Former Bangor Business Owner Pleads Guilty to Paycheck Protection Plan (PPP) Loan Fraud
A Skowhegan man pleaded guilty today in federal court to a bank fraud scheme arising from his applications for Paycheck Protection Plan (PPP) loans, U.S. Attorney Darcie N. McElwee announced.
According to court records Nathan Reardon, 44, formerly of Brewer, Maine, owned and controlled Global Disruptive Technologies Inc., a Bangor-based business. In April 2020, Reardon obtained a $59,145 PPP loan for Global Disruptive Technologies Inc. using false employee wage information and false supporting payroll documentation.
Reardon then improperly spent the PPP funds on items and expenses he knew were not covered by the program. After receiving the first loan, Reardon submitted additional fraudulent PPP applications to the same bank in April and May 2020. Two of the applications were for companies that had no active business operations, employees or payroll.
The Coronavirus Aid Relief and Economic Security (CARES) Act is a federal law, enacted in March 2020, was designed to provide emergency financial assistance to the millions of Americans who suffered economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of forgivable loans to small businesses for job retention and certain other expenses through the PPP.
Businesses were required to use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allowed the interest and principal to be forgiven if businesses spent the proceeds on these expenses within a set period and used at least a certain percentage of the funds for payroll expenses.
Reardon was indicted by a federal grand jury in Bangor on May 13, 2021. He faces up to 30 years in prison and a $1,000,000 fine. He also faces up to five years of supervised release. Reardon will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated by the Treasury Inspector General for Tax Administration and the U.S. Small Business Administration.