September 9, 2022
Fraud Friday – Man Steals Millions from PPP, EIDL, and a Religious Organization
“Kenneth Gaughan is facing the consequences for defrauding his employer for years and then enriching himself with taxpayer funds meant to help businesses and employees at a time of crisis,” says IRS-CI Special Agent in Charge Darrell Waldon. “Instead of enjoying his ill-gotten yacht, new car and home, he will now be serving his sentence in prison thanks to our IRS-CI and law enforcement partner investigators. We will continue to pursue CARES Act fraud and bring these criminals to justice.”
Kenneth Gaughan pleaded guilty to three counts earlier this year: one count of wire fraud, one count of money laundering in a PPP and EIDL case, and one count of wire fraud in the Archdiocese case. Now he will serve 6.5 years for his fraud schemes that ultimately got him over $2.5 million. After his sentence, he will serve 3 years of supervised release, and his restitution amount will be decided later.
In 2020, Kenneth applied for $2.7 million in PPP loans for nine companies. He submitted the applications under two different names and provided forged documents to the SBA. A total of $2.1 million in EIDL and PPP loans was disbursed to Kenneth.
The press release states that he used the funds from the two government programs to purchase a variety of luxury items for himself. Gaughan bought a $300,000 yacht, a $1.13 million rowhouse, and a $46,000 sports sedan with a portion of the fraudulent SBA funds. At the time of his arrest, the government got a warrant and a civil forfeiture complaint to seize and protect all the assets he earned from the fraud schemes.
Kenneth Gaughan also admitted that he embezzled $438,000 from his previous employer, the Catholic Archdiocese of Washington, D.C., where he worked as an Assistant Superintendent. He caused the Archdiocese to pay manufactured invoices for anti-bullying, crisis intervention programs, and software programs. Gaughan deposited checks made for services never provided into his bank accounts for personal gain.
DOJ Press Release