Stoughton Man Pleads Guilty to Brank and Wire Fraud Scheme Related to COVID-19 Pandemic

BOSTON – A Stoughton pleaded guilty yesterday to fraudulently obtaining COVID-19-related small business loans from several financial institutions.

Patrick Joseph, 41, pleaded guilty to one count each of wire fraud, bank fraud and conspiracy to commit wire fraud and bank fraud. U.S. District Court Chief Judge F. Dennis Saylor IV scheduled sentencing for June 20, 2024. Joseph was indicted by a federal grand jury in November 2021. 

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) created a temporary loan program directed at small businesses called the Paycheck Protection Program (PPP). Independent contractors were eligible to apply for PPP loans, which were processed by private financial institutions and fully guaranteed by the U.S. Small Business Administration. If an independent contractor used the loan funds for approved purposes, such as payroll, the loan could be forgiven by the financial institution and paid for by the U.S. Small Business Administration.

Joseph participated in a scheme that obtained over $220,000 in proceeds through fraudulent PPP loan applications submitted between April 2020 and April 2021. Joseph and co-conspirator Yves Montima submitted 12 fraudulent PPP loan applications, both in their own names and on behalf of others, at several financial institutions. The fraudulent loan applications claimed independent contractor income that did not exist and substantiated that non-existent income through falsified tax documents. In addition to receiving the proceeds from the loans submitted in their own names, Joseph and Montima received kickback payments from individuals on whose behalf they submitted fraudulent PPP loan applications. 

In November 2021, Montima pleaded guilty to one count of bank fraud conspiracy and was sentenced in September 2023.

The charge of bank fraud and conspiracy to commit bank fraud provide for a sentence of up to 30 years in prison, up to five years of supervised release, a fine of up to $1 million or twice the gross gain or loss, whichever is greater, and forfeiture. The charge of wire fraud and conspiracy to commit wire fraud provide for a sentence of up to 20 years in prison, up to three years of supervised release, a fine of up to $250,000 or twice the gross gain or loss, whichever is greater, and forfeiture. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney Joshua S. Levy and Andrew Murphy, Special Agent in Charge of the U.S. Secret Service, Boston Field Office made the announcement. Valuable assistance in the investigation was provided by the U.S. Postal Service, Massachusetts State Police and the Boston Police Department. Assistant U.S. Attorney Christopher J. Markham, of the Financial & Cyber Fraud Unit, and Assistant U.S. Attorney Philip C. Cheng, of the Narcotics & Money Laundering Unit, are prosecuting the case.

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. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form.