Glen Cove doctor sentenced in $3.8M COVID-aid fraud for ‘luxury lifestyle’
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A doctor who lives in Glen Cove was sentenced to 4 years and three months in jail on Friday for fraudulently acquiring $3.8 million in pandemic-relief loans and grants, essentially the most severe case of its type towards a Lengthy Islander up to now.
Dr. Konstantinos “Dino” Zarkadas, 49, additionally was ordered to pay restitution of $3.5 million throughout the sentencing on the federal courthouse in Central Islip, although his legal professional mentioned he would not have the cash. The physician confessed to the crimes final yr.
After Friday’s sentencing, federal officers denounced the doctor. “Dr. Zarkadas selected greed over honesty by financing a luxurious way of life on the backs of America’s taxpayers,” mentioned Thomas Fattorusso Jr., particular agent-in-charge within the Inside Income Service’s prison investigation workplace in New York.
Zarkadas lied on 11 profitable purposes for Paycheck Safety Program loans and COVID-19 Financial Harm Catastrophe Loans, after which used the cash to buy fancy watches and a yacht. He even used mortgage proceeds to pay an $80,000 settlement in a separate federal case involving his poor record-keeping of a weight-loss drug that he gave to sufferers, in response to prosecutors.
What to know
- The physician stole $3.8 million from two COVID-19 aid packages for companies and nonprofits struggling to outlive.
- He used the cash to purchase fancy watches, restaurant meals, a yacht, leases on luxurious vehicles and pay a real-estate debt.
- He should repay $3.5 million to the federal authorities, although his legal professional mentioned he would not have the cash.
His sentencing by U.S. District Court docket Decide Gary R. Brown comes because the administration of President Joe Biden steps up efforts to crack down on fraud in federal pandemic-relief packages, which have awarded billions of {dollars} to struggling companies and nonprofits throughout the nation.
“That is a fully reprehensible crime,” the choose advised Zarkadas on Friday, citing the disastrous affect of the coronavirus on america and its financial system.
“It is disgraceful conduct … The defendant was on the lookout for a chance to raid the federal government treasury,” the choose mentioned throughout the 70-minute listening to. “That is as dangerous as white-collar crime will get.”
The choose, the prosecutor and Zarkadas’ lawyer all derided his use of pandemic-relief cash to purchase $140,000 price of watches — three Rolex watches and a Cartier watch — and make a $194,915 down cost on a $1.7 million yacht for his brother-in-law. Zarkasdas has since turned over the watches and the yacht cash to federal authorities, in response to a sentencing memo from prosecutors.
“This defendant did ridiculous issues,” the choose mentioned.
In November, Zarkadas, who practices drugs in Manhattan, pleaded responsible to catastrophe aid fraud and wire fraud. He had confronted as much as 30 years in jail.
Zarkadas, who prosecutors mentioned had a internet price of greater than $2 million earlier than the pandemic, sought the loans and grants as COVID was raging in New York State, between March 30 and July 20, 2020.
The federal help was meant to assist employers to pay workers’ salaries and to outlive a interval when all nonessential companies had been shut right down to gradual the coronavirus’ unfold. Well being care companies, comparable to Zarkadas’ observe, had been deemed to be important.
Federal prosecutor Anthony Bagnuola mentioned on Friday that $757,000 in PPP and EIDL loans that had been granted to Zarkadas’ medical workplace aren’t a part of the fraud case.
Nevertheless, the doctor “falsified” 11 mortgage purposes for different companies that he allegedly owned and “created pretend tax paperwork” to assist his declare of needing federal help, the prosecutor mentioned.
Zarkadas lied on the purposes concerning the variety of those that had been employed by the companies, the scale of the payrolls and the way he deliberate to make use of the cash. “The defendant noticed this a chance for a windfall. He was motivated by greed,” the prosecutor mentioned.
Protection lawyer’s rationalization
Zarkadas’ legal professional, Ronald G. Russo, disagreed, saying the doctor’s earnings dropped within the pandemic and he was having hassle paying a debt owed to a Manhattan landlord.
Some years earlier, Zarkadas had personally assured a $4.7 million lease for a medical workplace in midtown that he then backed out of. Zarkadas used $3 million, or 80% of the COVID mortgage funds, to pay the debt.
“My consumer was on the forefront of the COVID response, caring for the poorest of the poor — and the irony is that he stole COVID funds to pay his landlord,” the lawyer mentioned.
Zarkadas did not publicly remark in court docket, opting to talk privately to the choose a few separate lawsuit that his lawyer and the prosecutor agreed may produce a multimillion-dollar settlement. That cash would go towards paying the restitution, they mentioned.
Zarkadas cried as he spoke quietly to the choose for 5 minutes.
The PPP consisted of financial institution loans assured by the federal authorities which are forgivable if used primarily to maintain workers on the payroll or to rehire them. The EIDL loans are from the U.S. Treasury and embody a grant of as much as $10,000 per applicant.
Each packages are overseen by the U.S. Small Companies Administration, which along with the Division of Justice, FBI and IRS, has been investigating cases of fraud.
Breon Peace, U.S. legal professional for the Jap District of New York, mentioned on Friday that he and his employees “will vigorously prosecute and produce to justice medical professionals, just like the defendant, and different fraudsters who’re pushed by greed to take care of a lavish way of life on the expense of small companies in legit want of COVID-19 emergency help.”
WHAT TO KNOW
* The physician stole $3.8 million from two COVID-19 aid packages for companies and nonprofits struggling to outlive.
* He used the cash to purchase fancy watches, restaurant meals, a yacht, leases on luxurious vehicles and pay a real-estate debt.
* He should repay $3.5 million to the federal authorities, although his legal professional mentioned he would not have the cash.
James T. Madore writes about Lengthy Island enterprise information together with the financial system, growth, and the connection between authorities and enterprise. He beforehand served as Albany bureau chief.
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