ALBANY, NEW YORK – Debra Hackstadt, 68, of Albany, was sentenced today to 16 months in prison for fraudulently obtaining 32 government-backed loans meant for businesses struggling with the financial effects of the coronavirus pandemic.
The announcement was made by US Attorney Carla B. Freedman and Janeen DiGuiseppi, Special Agent in Charge of the Federal Bureau of Investigation (FBI) Albany Field Office.
US Attorney Carla B. Freedman stated, “Today’s sentencing holds Debra Hackstadt responsible for prolific fraud. She took advantage of an economically devastating pandemic and stole money meant for legitimate businesses struggling to stay afloat. With our law enforcement partners, we will continue to investigate and prosecute those who have stolen from pandemic relief programs.”
FBI Special Agent in Charge Janeen DiGuiseppi stated, “Debra Hackstadt defrauded government loan programs established to help small businesses recover from the devastating financial impacts of the pandemic. By lying to obtain multiple loans, Hackstadt took more than a million dollars from deserving businesses that desperately needed support. Today’s sentence ensures that she will answer for her criminal acts. The FBI, along with our law enforcement partners, will continue to investigate and hold accountable anyone seeking to steal money from these critical government programs.”
Hackstadt pleaded guilty to wire fraud on May 19, 2022. He admitted that between April 30, 2020 and June 11, 2021, he fraudulently obtained $1,615,546 from two pandemic relief loan programs: the Paychecks (“PPP”), whose loans are issued by private financial institutions and backed by the federal government, and Economic Injury Disaster Loans (“EIDL”), which are issued directly by the US Small Business Administration. USA (SBA). These loans were made to Hackstadt herself, to some of her relatives and acquaintances, and to various companies controlled by Hackstadt or her relatives.
United States District Judge Glenn T. Suddaby ordered Hackstadt to pay $1,696,324.96 in restitution and forfeit an additional $254,812, which represents the amount of money he personally made from the fraud. He also imposed a 2-year term of post-incarceration supervised release.
Hackstadt committed the fraud by lying to the SBA and various PPP lenders on loan applications, including by grossly fabricating and exaggerating the number of employees and payrolls of the businesses and individual businesses for which it obtained loans. Many of the PPP applications also included bogus tax documents that Hackstadt created as part of the scheme. In total, the Hackstadt scheme resulted in the issuance of 27 PPP loans and five EIDLs.
Hackstadt also admitted that in addition to these loans, he fraudulently obtained two other business loans from private lenders. He fraudulently obtained a loan of $42,290 in October-November 2019, and immediately defaulted, and fraudulently obtained a loan of $48,500 in June 2021, and immediately defaulted.
This case was investigated by the FBI and was prosecuted by Assistant US Attorneys Michael Barnett and Joshua R. Rosenthal.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Control Task Force to bring together the resources of the Department of Justice in partnership with agencies across the government to enhance efforts to combat and prevent fraud. related to the pandemic. The Working Group strengthens efforts to investigate and prosecute the most guilty national and international criminal actors and assists agencies charged with administering aid programs to prevent fraud, among other methods, by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques for uncovering fraudulent actors and their schemes, and sharing and leveraging information and insights gained from past enforcement efforts. For more information on the Department’s response to the pandemic, visit https://www.justice.gov/coronavirus
Anyone with information about allegations of attempted fraud related to COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or through the Complaint Form NCDF website at: https://www .justice.gov/disaster-fraud/ncdf-disaster-complaint-form.