Orono man agrees to settle following allegations of pandemic fraud
An Orono man has agreed to pay just over $228,000 to settle a civil fraud case alleging that he illegally applied for, received and obtained forgiveness for two pandemic-era Paycheck Protection Program loans.
Jacob Hennie has also been accused of fraudulently receiving a COVID-19 Economic Injury and Disaster Loan Emergency Advance, according to court papers filed in the U.S. District Court for the District of Maine.
The complaint filed on April 14 alleged that in July 2020, Hennie said he operated a business with nine employees to receive a $9,000 Emergency Loan Advance when he did not operate any business.
In February 2021, Hennie obtained a PPP loan in the amount of $18,625 based on alleged misrepresentations in loan applications, U.S. Attorney Darcie N. McElwee said in an April 18 news release. Hennie then obtained a second-draw PPP loan in the amount of $20,833 based on alleged fictitious business expenses, according to the release.
"Hennie received forgiveness for both PPP loans through allegedly misrepresenting how the loan funds were used," McElwee said.
The complaint against Hennie was filed under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act. The FCA provides that any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” or “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim” is liable to the United States for three times the amount of damages which the United States sustains, plus a civil penalty for each FCA violation. For FCA violations assessed after Jan. 30, 2023, the minimum penalty per violation is $13,508.
FIRREA provides that the Attorney General may recover civil penalties against those who knowingly make a false statement in order to influence a decision by the Small Business Administration or to get a loan or anything of value under certain SBA programs, including the PPP. For FIRREA violations assessed after Jan. 30, 2023, the maximum penalty per violation is $2,372,677.
The complaint is a result of the District of Maine’s ongoing efforts to identify and investigate pandemic relief funds that were obtained under fraudulent circumstances.
Recent amendments to federal law have extended the statute of limitations for civil and criminal fraud enforcement related pandemic loans from six to 10 years and Hennie's is the fourth loan fraud case to be prosecuted since mid-2022:
- In February, Mark X. Haley II, 42, of Rockport, was accused of filing nine bogus Paycheck Protection Program loan applications at two banks for businesses he controlled. He faces a fine of up to $1 million and 30 months in prison.
- Merton Weed Jr., 50, of Norway, could face up to 20 years in prison, a $250,000 fine and three years of supervised release following his arrest in February for allegedly defrauding the Paycheck Protection Program.
- Nathan Reardon, 44, of Skowhegan faced up to 30 years behind bars and a $1 million fine after pleading guilty in July 2022 in federal court to a bank fraud scheme related to Paycheck Protection Program loans.
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