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Tolland County resident John Matava of Coventry, age 59, pleaded guilty on Tuesday, Jan. 2 to charges related to his scheme to obtain COVID-19 relief funds, the US Attorney's Office for the District of Connecticut announced.
According to federal officials, in April 2020, Matava applied for a $100,000 Paycheck Protection Program loan from Celtic Bank for his purported business, J.M. Builders LLC.
These loans, provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, were meant to be forgivable loans to small businesses to help them with job retention and other expenses during the pandemic. In April 2020, Congress authorized more than $300 billion in PPP loans.
Although most PPP loans were overseen by the federal Small Business Administration (SBA), some individual loans were issued by private approved lenders such as Celtic Bank. The bank would receive applications and supporting documentation and then make loans using their own funds guaranteed by the SBA.
In Matava's application submission, he included several false representations, including the fact that his business had eight employees and an average monthly payroll of $40,000. He also claimed that the funds would be used for payroll, lease, mortgage, interest, and utilities and that he was not subject to pending formal criminal charges, officials said.
However, at the time of this application, the Connecticut Department of Labor held no records of payroll or employees for J.M. Builders LLC and Matava was in fact facing criminal charges for arrests that happened in 2017 and 2018, according to federal officials.
Despite this, the loan was approved and disbursed to a bank account for J.M. Builders LLC by Celtic Bank on April 22, 2020. This bank account, on which Matava was the signatory, was opened the day before the disbursement and had a balance of $0 just before the funds were received.
After the disbursement, between April 2020 and January 2021, Matava used these funds primarily for personal expenses. These included $3,498 to pay a dog breeder; $4,777 for payments to an RV superstore in Connecticut; and legal fees for four court cases in Rockville, including a $2,000 retainer, officials said.
To make matters worse for himself, Matava again applied for a $100,000 PPP loan from Celtic Bank in January 2021 and included false statements and fraudulent tax documents in this application, which was soon denied, federal officials added.
Matava was eventually arrested in January 2023. On Tuesday, he pleaded guilty to:
- One count of wire fraud affecting a financial institution, which carries a maximum prison term of 30 years;
- One count of making an illegal monetary transaction, which carries a maximum prison term of 10 years.
He is scheduled to be sentenced on Friday, March 29. Until then, he is released on a $60,000 bond in home detention, according to federal officials.
Anyone who has information about other allegations of fraud involving COVID-19 can report it to the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721.
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