Eastern District of New York | Long Island Businessman Pleads Guilty to Multi-Million Dollar Covid-19 Loan Fraud

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Earlier today, at the federal courthouse in Central Islip, Donald Finley, a Locust Valley businessman and owner of the now-defunct Jekyll & Hyde theme restaurant in Manhattan and the Bayville Adventure Park on Long Island, pleaded guilty to the disaster relief fraud and wire fraud. in connection with his receipt of millions of dollars in small business loans under the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan Program (EIDLP). Today’s trial was held before United States Magistrate Judge Arlene R. Lindsay. When sentenced, Finley faces up to 30 years in prison, as well as restitution totaling more than $3.2 million and fines of up to $1.25 million.

Breon Peace, United States Attorney for the Eastern District of New York, Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), and Daniel Brubaker, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS) announced the guilty plea.

Finley admitted to diverting millions of dollars in COVID-19 disaster relief funds to finance his personal expenses, including the purchase of a home in Nantucket, Massachusetts, according to United States Attorney Peace. This Office will continue to investigate and prosecute those, like the defendant, who shamelessly steal from government programs intended for struggling small businesses and families during the pandemic.

We have seen abuses of disaster relief programs when criminals often find an opportunity for exploitation. In this case, Finley took millions in COVID-19 relief funds, only to use the ill-gotten cash for his personal gain. While he may be the owner of an amusement park meant to bring joy, with his guilty plea and pending sentencing, Finley may be facing a future he won’t find more enjoyable, the IRS said- CI Special Agent-in-Charge Fattorusso.

Mr. Finley took advantage of a program intended to be used to support small businesses as part of the CARES Act of 2020, when he devised a scheme to submit fraudulent information to the government to obtain millions in funding during the pandemic. to fund his lavish lifestyle. Not only did he buy a house on Nantucket, but he used those funds to pay for personal expenses. Postal Inspectors and their law enforcement partners are always on a mission to ensure that those who truly need help get it, and those who scheme and break the law to receive funds they are not entitled to , will be brought to justice, says USPIS Inspector-in – Charge Brubaker.

As set forth in court filings, between March 2020 and March 2021, in the midst of the COVID-19 pandemic, Finley fraudulently applied for, and received, at least 29 PPP and EIDLP grants. loans of approximately $3.2 million, on behalf of corporate entities he controlled. Instead of using the funds for disaster relief, Finley diverted them for personal use, including the purchase of a home in Nantucket, Massachusetts, in February 2021.

Congress created the PPP and EIDLP as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Enacted on March 29, 2020, the CARES Act provided emergency financial assistance in response to the economic impacts of the COVID-19 pandemic. One source of relief provided by the CARES Act is the allocation of funds for the issuance of forgivable loans to small businesses for job retention and certain other costs through PPP. The PPP allowed qualified small businesses to receive unsecured loans on favorable terms, which they were required to use for specified costs, including payroll costs, interest on mortgages, rent and utilities. The PPP provided debt forgiveness if the recipient businesses spent the proceeds on specified costs within a limited period of time and used a certain percentage for payroll costs.

Another source of relief provided by the CARES Act was the EIDLP, which provided low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters. Under the program, EIDLP recipients are eligible to receive advances of up to $10,000 for small businesses within three days of applying for an EIDL (EIDL Advance). The amount of an EIDL Advance is determined based on the number of employees working for the applicant. EIDL Advance does not need to be paid.

The government’s case is being handled by the Offices Long Island Criminal Division. Assistant United States Attorney Mark E. Misorek is in charge of the prosecution.

The Defendant:

DONALD FINLEYAge: 61Locust Valley, New York

EDNY Docket No. 23-CR-181 (JMA)

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