South Thomaston Man Sentenced to 1.5 Years for Fraudulently Obtaining More than $1 Million in PPP Loans

Summary

A press release published 2023-10-04 by the U.S. Attorney's Office for the District of Maine announcing that U.S. District Judge Nancy Torresen sentenced Mark X. Haley II, 43, of South Thomaston to 18 months in prison and three years of supervised release, with $1,010,581 in restitution. The office states that Haley pleaded guilty on February 8, 2023 to a bank fraud scheme in which he filed PPP applications with false employee and payroll information, false tax returns, fake timesheets and falsified bank records. According to the release, over an 11-month span he submitted 12 fraudulent applications to three lenders, attempted to obtain nearly $1.5 million and obtained $1,010,581, and used some funds toward a sailboat that he then claimed was itself a business.

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Full text

PORTLAND, Maine:
A South Thomaston man was sentenced today in U.S. District Court in Portland for a bank fraud scheme in which he filed fraudulent Paycheck Protection Program (PPP) loan applications and received over $1 million in fraud proceeds.
U.S. District Judge Nancy Torresen sentenced
Mark X. Haley II
, 43, to 18 months in prison followed by three years of supervised release. He was also ordered to pay $1,010,581 in restitution. Haley pleaded guilty on February 8, 2023.
According to court records, Haley filed fraudulent PPP loan applications in an attempt to obtain PPP loans. He listed false employee and payroll information on each application and submitted fraudulent documents to support the false information to the banks. These documents included false federal employment tax returns, fake timesheets and falsified bank records. Haley used some of the funds he obtained to make a down payment on a sailboat, which he then claimed was itself a functioning business with multiple employees in an attempt to steal additional PPP funds. Over an 11-month span, Haley submitted 12 fraudulent applications to three lenders, each with phony supporting documentation. In total, he attempted to steal nearly $1.5 million and succeeded in obtaining $1,010,581.
The Internal Revenue Service, Criminal Investigation investigated the case.
“Mark Haley exploited a worldwide epidemic to enrich himself through fraud,” said
U.S. Attorney Darcie N. McElwee
. “This was a prolonged and opportunistic scheme motivated by sheer greed that only ended when the program meant to help businesses survive the pandemic itself ended. The Department of Justice and my office will continue to pursue those, like Mr. Haley, who attempted to capitalize on an unprecedented crisis.”
Paycheck Protection Plan (PPP):
The PPP was a COVID-19 pandemic relief program administered by the Small Business Administration (SBA) that provided forgivable loans to small businesses for job retention and certain other expenses. The PPP permitted participating third-party lenders to approve and disburse SBA-backed PPP loans to cover payroll, fixed debts, utilities, rent/mortgage, accounts payable and other bills incurred by qualifying businesses during, and resulting from, the COVID-19 pandemic. PPP loans were fully guaranteed by the SBA.
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