A Levant man reportedly got more than $300,000 in government loans meant to help businesses survive the pandemic and used them for bail on a Florida theft charge as well as to buy exercise equipment, a telescope , a drone and two trucks.
Craig Franck, 39, was charged in US District Court in Bangor on Wednesday with three counts of wire fraud and one count of money laundering. He is the second person to date in Maine to be charged with defrauding a government loan program intended to help businesses at the start of the COVID-19 pandemic.
Franck is also accused of using illegally obtained federal funds to pay for a holistic doctor in Rockland and a veterinarian in Veazie, according to the complaint filed against him in federal court.
He reportedly received three electronic loans totaling $321,560 under two separate loan programs authorized by Congress at the start of the pandemic — the Paycheck Protection Program and the Economic Disaster Loan Program.
The US Small Business Administration processed applications for disaster loans while banks processed applications for the Paycheck Protection Program.
Franck received the funds for two companies, CCF Acoustics LLC — which was formed in 2015 and is still active, according to the Maine Secretary of State’s office — and CCF Acoustical System, which was founded in 2017 and dissolved the Next year. The companies were contracted to carry out acoustic and ceiling work.
In his applications to the loan programs, Franck lied about business income and the number of people he employed, according to the complaint.
Franck’s attorney, Charles Hodson of Bangor, did not immediately respond to a request for comment on Friday. The U.S. Attorney’s Office declined to comment. The office has a practice of not commenting on pending cases.
Franck’s first appearance before US investigating judge John Nivison has not been set. The U.S. Attorney’s Office, which is pursuing the case, has asked that he be held without bond.
In August, Franck pleaded guilty in a Florida court to stealing between $20,000 and $100,000 in that state. He was sentenced to seven years probation, according to the complaint. Details of this crime were not available on Friday.
Franck is the second person in Maine to be charged with fraudulently obtaining a Paycheck Protection Program loan, but the first to be charged with fraudulently obtaining a disaster loan.
Nathan Reardon, 43, of Skowhegan and formerly of Brewer, pleaded not guilty to five counts of bank fraud, three counts of attempted wire fraud, two counts of making false statements to a bank and one count of perjury. A trial has been tentatively set for June 7.
In a separate case, John J. Cavanaugh, Jr., 52, of Yarmouth admitted to making false statements to the Small Business Administration in an attempt to obtain a disaster loan. He is expected to be sentenced on that charge and a series of unrelated charges in May in federal court in Portland.
The US Secret Service said in December that criminals stole nearly $100 billion from COVID-19 relief programs set up to help businesses and people who have lost their jobs due to the pandemic.
If convicted, Franck faces up to 20 years in federal prison for wire fraud and up to 10 years for money laundering. Each charge carries a fine of up to $250,000. Franck could also be ordered to pay restitution if found guilty.