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Covid-19: NY Doctor Sentenced For Using $3M In Fraudulently Obtained Loans On Luxury Items

A New York doctor will spend time behind bars after being sentenced for spending millions of dollars obtained through fraudulently obtained small business loans during the pandemic in an effort to live a luxury lifestyle.

A Glen Cove doctor was sentenced for scamming $3 million during the COVID-19 pandemic.

A Glen Cove doctor was sentenced for scamming $3 million during the COVID-19 pandemic.

Photo Credit: pasja1000 / Pixabay

Long Island resident Konstantinos Zarkadas, who had a Nassau County practice in Glen Cove, was sentenced in federal court to 51 months in prison for fraudulently obtaining millions of dollars in COVID-19 emergency relief funds.

In addition to his prison term, Zarkadas was also ordered to pay approximately $3.5 million in restitution after pleading guilty in November 2021 to disaster relief fraud and wire fraud in connection with his receipt of small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP).

Zarkadas also forfeited $200,000 and four luxury wristwatches, US Attorney Breon Peace noted.

“It’s a shame to see rampant abuse of programs designed to help ordinary people struggling through the pandemic. Zarkadas chose greed over honesty by financing a luxury lifestyle on the backs of America’s taxpayers,” IRS-CI Special Agent-in-Charge Thomas Fattorusso said.

“Thanks to the investigative work of IRS-CI and the FBI, he’ll sail straight to federal prison instead of onboard his $1.7 million yacht that was illegally purchased with CARES Act funds.”

As part of his guilty plea, Zarkadas admitted to fraudulently applying for at least 11 PPP and EIDLP loans totaling approximately $3.7 million between March 2020 and July 2020, when the pandemic first broke out.

Peace said that Zarkadas then laundered the loan money through multiple bank accounts, and ultimately used the stolen funds to make “extravagant personal purchases and other impermissible purposes.”

Prosecutors specifically cited a near $200,000 down payment that was made on a $1.75 million yacht.

In an effort to conceal the fraudulent nature of that purchase, Peace said that Zarkadas made the check payable to a family member who was not the actual beneficiary of the funds and, in the check’s memo line, falsely indicated the funds were “repayment for payroll.” 

Zarkadas also withdrew tens of thousands of dollars worth of loan proceeds in cash and used some of the proceeds to satisfy more than $1 million in judgments against him, to lease luxury automobiles, and to make personal purchases, including several Rolex and Cartier wristwatches which he forfeited as part of his guilty plea, in this case, prosecutors noted.


“Today’s sentence demonstrates there are consequences for those who treat vital government programs as cash give-a-ways and shamefully seek to profit from an unprecedented public health crisis,” Peace said in a statement announcing the sentencing.

“This office will vigorously prosecute and bring to justice medical professionals like the defendant and other fraudsters who are driven by greed to maintain a lavish lifestyle at the expense of small businesses in legitimate need of COVID-19 emergency assistance.” 

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