Maryland Man Sentenced for Covid-19 Relief Fraud

GREENSBORO, NC – A Maryland resident was sentenced yesterday for conspiracy to file fraudulent loan applications seeking approximately $3.6 million in forgivable Paycheck Protection Program (PPP) loans that the Small Business Administration (SBA) guaranteed under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, announced United States Attorney for the Middle District of North Carolina Sandra J. Hairston.   

BENNETT ABABIO, age 51, of Clarksville, Maryland, was sentenced to 35 months imprisonment and 3 years supervised release by the Honorable William L. Osteen, Jr., United States District Judge in the United States District Court for the Middle District of North Carolina. In addition, ABABIO was ordered to pay restitution in the amount of $3,991,372.96.

According to court documents, between May 2020 and December 2021, ABABIO conspired to submit fraudulent Paycheck Protection Program loan and forgiveness applications for himself and others, including an individual located in Greensboro, North Carolina. ABABIO owned, or partially owned, five companies for which ABAIO submitted fraudulent PPP applications. In total, ABABIO received $2,581,833 in PPP loans for his companies. The PPP applications contained false statements about the payroll expenses of each company, which the SBA used to calculate the amount of PPP funds to which the applicant-companies would be entitled. Separately, ABABIO helped others prepare fraudulent PPP applications, resulting in over $1 million in additional PPP loans being disbursed to ABABIO’s clients.

“Our prosecutors will continue to seek active prison sentences for fraudsters who stole federal dollars intended to support businesses during the pandemic,” said U.S. Attorney Sandra J. Hairston. “We are grateful to IRS-CI and other agencies that investigate this unconscionable conduct and help us hold defendants accountable.”   

“During a global pandemic, the defendant committed fraud to gain funds designated to help struggling individuals and businesses,” said Donald “Trey” Eakins, Special Agent in Charge of the Internal Revenue Service Criminal Investigation (IRS-CI), Charlotte Field Office. “We will continue to work with our local, state, and federal law enforcement partners to prosecute those who abuse these programs.”

The Internal Revenue Service – Criminal Investigation investigated the case. It was prosecuted by Assistant United States Attorney Ashley Waid.

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