Maine business owner pleads guilty to pandemic-loan fraud, faces 30 years in prison
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Nathan Reardon could be sentenced to 30 years in prison and a $1 million fine for his fraud scheme related to Paycheck Protection Program loans.
A Skowhegan man faces up to 30 years in prison and a $1 million fine after pleading guilty in federal court to a bank fraud scheme related to Paycheck Protection Program loans.
Nathan Reardon, 44, formerly of Brewer, owned and controlled Global Disruptive Technologies Inc., a Bangor-based business. In April 2020, Reardon received a $59,145 PPP loan for his business using false employee wage and payroll information.
Reardon then improperly spent the PPP funds on items and expenses he knew were not covered by the program, U.S. Attorney Darcie McElwee said in a news release. Among other uses, the money went to buy a wedding band, men’s clothing, shaving products, toys and an LED barber pole light. Reardon also donated $5,000 to his church, according to court documents.
After receiving the first loan, Reardon submitted additional fraudulent PPP applications in April and May 2020. Two of the applications were for companies that had no active business operations, employees or payroll.
The federal Coronavirus Aid Relief and Economic Security (CARES) Act, enacted in March 2020, was designed to provide emergency financial assistance for economic hardship related to 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 loans were forgivable 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 in May 2021. He will be sentenced by a federal district judge after an investigation by the U.S. Probation Office.
The case was handled by the Treasury Inspector General for Tax Administration and the U.S. Small Business Administration.
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