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Press Release

Family Members of Woman Convicted of Fraud Settle Claims Arising from Pandemic Relief Loans

For Immediate Release
U.S. Attorney's Office, Northern District of New York

ALBANY, NEW YORK – Several family members of an Albany woman convicted of pandemic relief fraud recently agreed to pay the Government a total of about $305,000. The civil settlements are related to the prosecution of Debra Hackstadt, of Albany, who was sentenced to 16 months in prison, on November 8, 2022, for fraudulently obtaining 32 government-backed loans meant for businesses struggling with the financial effects of the coronavirus pandemic.

United States Attorney Carla B. Freedman and Alfred Watson, Acting Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), made the announcement.

Two of the fraudulently obtained loans were made to Albany resident Danielle Hackstadt, Debra’s daughter. Danielle Hackstadt has agreed to pay $114,816 under the False Claims Act for fraudulently obtaining, with her mother’s assistance, a $42,500 Economic Injury Disaster Loan (EIDL), which was issued by the U.S. Small Business Administration (SBA), and a $14,908 loan under the Paycheck Protection Program (PPP), which was issued by a private financial institution and backed by the federal government.

In her July 2020 EIDL application, Danielle Hackstadt was listed as the sole proprietor of a “health services” company with gross revenue of $85,000.  And in her August 2020 PPP loan application, Danielle Hackstadt was listed as the sole proprietor of a “cleaning company” with gross receipts of $82,547.  She has admitted that, in July and August 2020, she was an employee of an insurance company and had no sole proprietorship.  She further admitted that she knew that her mother was applying for the PPP loan and EIDL in her name; she personally received the loaned funds, knowing they came from COVID-relief programs intended to benefit struggling businesses; and she spent the loaned funds for her personal benefit.

In a separate matter, in February 2023, the U.S. Attorney’s Office filed a lawsuit seeking the civil forfeiture of a lakefront residence and property off Great Sacandaga Lake in Saratoga County, New York, alleging that a portion of the property had been purchased with pandemic relief funds that Debra Hackstadt fraudulently obtained and then transferred to family members. 

In June 2023, the Government and Albany residents Gerald and Traci Hackstadt, Debra’s son and daughter-in-law, entered into a settlement agreement in which the Hackstadts agreed to pay $190,000 to satisfy the claim; payment of the $190,000 has since been made.  

United States Attorney Carla Freedman stated: “Debra Hackstadt showered ill-gotten pandemic relief funds upon her family members. These settlements prove that her crimes did not pay, and that we will use every tool at our disposal to follow the money and recover ill-gotten gains. In addition to criminal prosecutions, we can file False Claims Act lawsuits – with the potential for treble damages – and asset forfeiture actions. When appropriate, we can also seek recovery from people who financially benefitted from fraud even if they did not commit fraud themselves.”

FBI Acting Special Agent in Charge Alfred Watson stated: “Debra Hackstadt deliberately took money from programs designed to help American businesses struggling financially during the pandemic and instead used it to line the pockets of her own family members. These settlements should prove the FBI is committed to working closely with our federal, state, and local partners to protect federally funded relief programs. Together, we will work diligently to ensure fraudulently obtained funds are tracked down and returned so they can be put to use to assist the millions of honest Americans who need them most.”

The FBI and the U.S. Attorney’s Office’s Asset Recovery Unit conducted the investigation that led to these settlements.

Assistant U.S. Attorney Adam J. Katz represented the United States in the Danielle Hackstadt matter, and Assistant U.S. Attorney Elizabeth Conger represented the United States in the asset forfeiture action.

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

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 at 866-720-5721 or via the NCDF Web Complaint Form at:

Updated September 11, 2023

Asset Forfeiture
False Claims Act
Financial Fraud