Man accused of fraudulently obtaining PPP loan pleads not guilty and records loan money as debt in bankruptcy filing
The first Mainer accused of fraudulently obtaining a loan from the Paycheck Protection Program, intended to help companies pay employees and other expenses during the first days of the pandemic, denied the charges Tuesday in the U.S. District Court in Bangor.
Nathan Reardon, 43, of Skowhegan and formerly of Brewer has pleaded not guilty to five counts of bank fraud, three counts of attempted wire fraud, two counts of misrepresenting a bank and one count of perjury. Reardon was indicted earlier this month by a federal grand jury.
He got a $ 60,000 PPP loan in 2020.
The perjury charge stems from his first court appearance last month, not the loan process. Reardon allegedly lied about his income on the financial form used to determine whether a defendant qualified for duty counsel. He entered his income as zero on the form, but indicated monthly income when he filed for bankruptcy, according to the indictment.
A trial is not expected to take place until next year.
Reardon remains free on an unsecured deposit of $ 5,000. He would not have to post any money as a bond unless he violated the conditions of his release. Conditions of his release include not seeking pandemic assistance without approval from the United States probation and trial services.
He was charged last month and first appeared in court on April 15, the same day he filed for bankruptcy in an attempt to reorganize his debt. Reardon had already filed for bankruptcy in 2014 and 2018 in Florida.
In his 129-page bankruptcy filing in Maine, Reardon listed his assets, consisting only of personal property, at nearly $ 18,000 and his liabilities at $ 385,000. Her monthly household income is $ 2,500, of which $ 500 is rental income and the rest a gift from the family, according to the record.
His file lists nearly 200 creditors, many of whom are former employees with salary arrears. He owes $ 36,000 in federal and state tax arrears and over $ 55,000 in rent arrears on commercial properties in Bangor and Brewer. He also owes thousands of dollars to plumbers, electricians, security companies, construction companies, utilities, cable companies, cell phone providers and individuals who have given him personal loans.
The bankruptcy filing also stated that he owed the government $ 90,000 for the P3 loan – $ 60,000 for the loan and $ 30,000 for the money it mistakenly received and spent.
Reardon said he was opening a Taco Shack at 95 Center Street in Bangor, similar to the restaurant he operates in Newburgh. It could not be determined whether any of Reardon’s debts were related to the planned opening of that business.
Reardon applied for the loan for his company, Global Disruptive Technologies Inc., on April 3, 2020, a week after Congress passed the CARES Act that provided money for PPP loans through private lending institutions. , according to the affidavit. Reardon applied for the loan from TD Bank in Bangor, where he had a checking account.
In applying for the loan, Reardon allegedly lied about the company’s payroll and monthly expenses. When the loan was approved and the money transferred to his account on April 22, 2020, he had a negative balance of over $ 4,000, according to the complaint.
Eight days later, Reardon allegedly illegally applied for a second PPP loan using the same false information. The bank denied that request, but mistakenly released an additional $ 59,145 to Reardon’s account on May 4, 2020, according to the affidavit. Two days later, TD Bank identified the error and froze the remaining $ 28,000 in the account.
Reardon’s purchases with the illegally obtained loan included a 14k yellow gold men’s wedding ring, clothing, shaving supplies, toys, an LED barber lamp and a pair of caiman skin cowboy boots, according to a court affidavit. Caymans are a species related to alligators that are found in Central and South America.
He listed some of these items as assets in his bankruptcy filing.
Reardon also reportedly used the money to pay a local lawyer and veterinarian, donate to a church in Florida, and shop online. In addition, he withdrew more than $ 10,000 from the cash loan, according to the complaint.
If convicted, Reardon faces up to 30 years in prison and a fine of up to $ 1 million. He could also be ordered to repay the loan amount, including the money he received in error.