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South Carolina Businessman Charged with $1.2 Million in COVID-19 Relief Fraud
A south Carolina businessman faces federal charges in Massachusetts for allegedly misappropriating over $1.2 million in COVID-19 relief funds for personal expenses,including the construction of a home and the purchase of luxury vehicles. The case highlights ongoing efforts to combat fraud related to pandemic-era assistance programs.
David Breen, 54, of Mount Pleasant, South Carolina, was charged today in federal court in Worcester with one count of theft of goverment property.According to court filings, the alleged scheme involved funds obtained through the Economic Injury and Disaster Loan (EIDL) program administered by the U.S. Small business Management (SBA).
The SBA’s EIDL program was designed to provide financial assistance to small businesses experiencing substantial economic hardship due to the COVID-19 pandemic. Authorities allege that Breen applied for these funds in March 2022 on behalf of ‘Fun Zone,’ the parent entity of ‘pinz,’ a bowling alley and entertainment venue located in Milford, Massachusetts.
Prosecutors claim Breen agreed to utilize the loan proceeds as working capital for his business when he entered into the loan agreement with the SBA. However, after receiving approximately $1.5 million, he allegedly diverted more than $1.2 million between March 2022 and june 2023 to fund personal acquisitions. these included building a home in Mount Pleasant, South Carolina, a $111,000 truck, and a downpayment on a $98,289 Mercedes-Benz.
“This case demonstrates a blatant disregard for the intent of these vital relief programs,” stated a senior official involved in the investigation. “Funds intended to support struggling businesses were instead used to enrich the defendant.”
The charge carries a potential sentence of up to 10 years in prison, three years of supervised release, and a fine of up to $250,000. Sentencing will be determined by a federal district court judge, taking into account U.S. Sentencing Guidelines and relevant statutes.
the announcement of the charges was made jointly by United States Attorney Leah B. Foley, Michael J. Krol,Special Agent in Charge of Homeland Security Investigations in New England,and Massachusetts Inspector General S. Jeffrey Shapiro. The U.S. small Business Administration, Office of Inspector General, Boston Region, provided valuable assistance in the investigation. Assistant U.S. Attorney Brendan D.O’Shea of the Worcester Branch Office is prosecuting the case.
This investigation is part of a broader effort by the Department of Justice to combat pandemic-related fraud. On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to coordinate resources across government agencies and enhance fraud prevention and prosecution efforts. More information about the Department of Justice’s response to the pandemic, including resources for reporting fraud, can be found at https://www.justice.gov/coronavirus and https://www.justice.gov/coronavirus/combatingfraud.
Individuals with information regarding potential COVID-19 fraud are encouraged to report it to the Department of Justice’s National center for Disaster fraud (NCDF) Hotline or through the NCDF Web Complaint
