A D.C. man faces charges of fraudulently obtaining $2.1 million in federal coronavirus relief loans and embezzling $472,000 from the Archdioceses of Washington and then using the money to buy a $1.13 million rowhouse, a $300,000 yacht and a $46,000 sports car.
The U.S. Attorneys’s Office charged Kenneth Gaughan, 41, of D.C. with obtaining $2.1 million the Paycheck Protection Program and through Economic Injury Disaster Loans.
Gaughan, according to prosecutors, applied to Small Business Administration lenders on behalf of multiple companies, to register emotional support animals.
He allegedly made false representations to receive the loan funds, including forged paperwork and bank records.
“Gaughan then used a portion of the loan proceeds to purchase a 2020 Cruisers Yachts 338 CX 33-foot watercraft, a 2020 Kia Stinger, and a rowhouse in Northeast, Washington, D.C. In conjunction with Gaughan’s arrest, the government obtained a warrant authorizing the seizure of the yacht, the Kia Stinger, Gaughan’s investment account, and Gaughan’s bank accounts,” a news release said.
The government is filing a forfeiture complaint against the house Gaughan bought.
“We will not tolerate exploitation of this national emergency for personal gain,” said Acting U.S. Attorney Michael R. Sherwin. “This Office will not allow fraudsters to steal taxpayer money intended to help small businesses that are currently struggling as a result of the COVID-19 pandemic.”
In a separate 12-count indictment, also unsealed Tuesday, Gaughan is charged with orchestrating an embezzlement scheme during his time as the assistant superintendent for the Catholic Archdiocese of Washington in Hyattsville, Maryland.
“Mr. Gaughan was so emboldened by deceiving a church for eight years he then, allegedly, turned
his deception to the government,” said FBI Special Agent in Charge Jennifer Boone.
Prosecutors allege Gaughan faked invoices for “anti-bullying, crisis intervention, and professional development programs at the approximately 95 Catholic schools overseen by ADW, located in Calvert, Charles, Montgomery, Prince George’s, and St. Mary’s Counties in Maryland, and Washington, D.C.”
Gaughan, starting in June 2010 through April 2018, had the archdiocese pay the companies for the services that were not provided and failed to acknowledge he owned and controlled the three companies.
Gaughan allegedly opened virtual and private mailboxes where he deposited the checks and then converted the money to his own use.
