A sixty-eight-year-old Albany woman, Debra Hackstadt, has been sentenced to 16 months in prison for fraudulently obtaining 32 government-backed loans meant for businesses struggling with the financial effects of the coronavirus pandemic.
This was disclosed on Friday November 11, 2022, by United States Attorney Carla B. Freedman and Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
Speaking about the case, the United States Attorney Carla B. Freedman stated, “Today’s sentence holds Debra Hackstadt accountable for a prolific fraud. She took advantage of an economically devastating pandemic and stole money that was earmarked 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 over a million dollars away from deserving companies who were in desperate need of support.
“Today’s sentence ensures she will answer for her criminal acts. The FBI, together with our law enforcement partners, will continue to investigate and hold accountable anyone looking to steal money from these critical government programs.”
Hackstadt pled guilty to wire fraud on May 19, 2022. She admitted that between April 30, 2020 and June 11, 2021, she fraudulently obtained $1,615,546 from two pandemic relief loan programs – the Paycheck Protection Program (“PPP”), whose loans are issued by private financial institutions and backed by the federal government, and Economic Injury Disaster Loans (“EIDLs”), which are issued directly by the U.S. Small Business Administration (SBA).
These loans were issued to Hackstadt herself, certain of her family members and acquaintances, and several companies controlled by Hackstadt or her family members.
United States District Judge Glenn T. Suddaby ordered Hackstadt to pay $1,696,324.96 in restitution and to forfeit an additional $254,812, representing the amount of money she personally obtained from the fraud. He also imposed a 2-year term of post-imprisonment supervised release.
Hackstadt committed the fraud by lying to the SBA and various PPP lenders on loan applications, including by making up and grossly overstating the number of employees and payrolls of the companies and sole proprietorships for which she obtained loans.
Many of the PPP applications also included false tax documents that Hackstadt created as part of the scheme. In total, Hackstadt’s scheme resulted in the issuance of 27 PPP loans and five EIDLs.
Hackstadt also admitted that in addition to these loans, she fraudulently obtained two other business loans from private lenders. She fraudulently obtained a $42,290 loan in October-November 2019, and promptly defaulted on it, and fraudulently obtained a $48,500 loan in June 2021, and promptly defaulted on it.
This case was investigated by the FBI, and was prosecuted by Assistant U.S. Attorneys Michael Barnett and Joshua R. Rosenthal.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.
The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.