SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Darryl Corradini, age 63, was sentenced by United States Chief District Judge Matthew W. Brann, to 18 months’ imprisonment for a bank fraud and money laundering scheme that included nearly $300,000 in COVID-19 relief guaranteed by the Small Business Administration through the Paycheck Protection Program (PPP).
The PPP is designed to help small businesses facing financial difficulties during the COVID-19 pandemic. Funded by the March 2020 CARES Act, PPP funds are offered in forgivable loans, provided that certain criteria are met, including use of the funds for employee payroll, mortgage interest, lease, and utilities expenses.
According to United States Attorney John C. Gurganus, Corradini pleaded guilty to a money laundering conspiracy involving his codefendant, Vicki Hackenberg, age 57, and others. Corradini created a shell corporation, CGM Realty LLC, and opened bank accounts and a Bitcoin trading account in the corporation’s name, by using false and forged documents. The conspirators used the accounts to receive over $135,000 in fraudulently obtained funds, and over $296,000 from a PPP loan that was obtained with false and forged documentation. That documentation included false information and certifications about CGM Realty LLC’s employee payroll obligations, and intention to use the funds for approved purposes, when in fact CGM Realty LLC had no employees or legitimate business operations. Forged IRS documentation also was included with the PPP application, containing false information about CGM Realty LLC’s nonexistent payroll obligations.
Over $350,000 of the fraudulent proceeds was used to purchase Bitcoins, a type of cryptocurrency. Although Corradini and Hackenberg were to each receive $40,000 for their participation in the offense, they ultimately received less than $10,000 of the fraudulent proceeds.
During sentencing, Chief Judge Brann highlighted Corradini’s lies to law enforcement officials and concealment of a separate bank account used to receive fraudulent proceeds. In addition to the Corradini’s sentence of imprisonment, Chief Judge Brann also ordered him to perform 20 hours of community service, and to pay $431,289 to the victims of his crimes. That restitution obligation is shared by Hackenberg, who previously was sentenced by Chief Judge Brann to serve 12 months’ imprisonment.
The case was investigated by agents with the Internal Revenue Service’s Criminal Investigations Division. The matter was prosecuted by Assistant U.S. Attorney Phillip J. Caraballo.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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