HARTFORD, Conn. — A Coventry man who allegedly used false information to obtain a Paycheck Protection Program loan of $100,000 and used some of the money at a dog breeder, an RV store and legal fees was arrested Saturday.
John Matava, 58, of Coventry, has been charged with wire fraud affecting a financial institution, which carries a maximum term of imprisonment of 30 years, and with making an illegal monetary transaction, which carries a maximum term of imprisonment of 10 years.
Matava appeared Monday in Hartford federal court and was released on a $60,000 bond.
Officials said the charges stem from a $100,000 loan Matava obtained under the Paycheck Protection Program as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The PPP allowed qualifying small businesses and other organizations to receive unsecured loans at an interest rate of 1%. The intent was the money would be used by businesses on payroll costs, interest on mortgages, rent and utilities. The interest and principal would be forgiven if businesses paid those expenses within a certain period of time and used at least a certain percentage of the amount to be forgiven for payroll.
Individual PPP loans were issued by private lenders, such as Celtic Bank, which received and processed PPP applications, documentation, and then made loans using the bank's own funds, which the Small Business Administration guaranteed.
Officials said in April 2020, Matava applied to Celtic Bank for a $100,000 PPP loan for J.M. Builders LLC. The application included several false representations, including that J.M. Builders LLC had eight employees and an average monthly payroll of $40,000; that the fund would be used for payroll, lease, mortgage, interest and utilities; and that the business owner was not subject to pending formal criminal charges.
At the time of the PPP loan application, according to authorities, there were no records of payroll or employees with the Connecticut Department of Labor for J.M. Builders LLC, and Matava was subject to criminal charges in two pending cases related to arrests in 2017 and 2018.
On April 22, 2020, Matava received $100,000 from Celtic Bank. The account was opened on April 21, 2020, and had a balance of $0 immediately prior to the loan funds being disbursed. Between April 2020 and January 2021, Officials said Matava used the funds primarily for personal expenses, including $3,498 to pay a dog breeder, $4,777 for payments to an RV superstore in Connecticut, and legal fees, including a $2,000 retainer, for four court cases in Rockville court.
Officials allege that the following January, Matava applied for an additional $100,000 in additional PPP funds from Celtic Bank, the applications for the loan allegedly had several other false statements and fraudulent tax documents. Celtic Bank denied the application.
Individuals with information about allegations of fraud involving COVID-19 are encouraged to report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721, or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Doug Stewart is a digital content producer at FOX61 News. He can be reached at dstewart@fox61.com.
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