Man accused of fraudulently obtaining PPP loans pleads not guilty, lists loan money as debt in bankruptcy filing
The first Mainer accused of fraudulently obtaining a loan from the Paycheck Protection Program to help companies pay employees and other expenses in the early days of the pandemic denied the charges in U.S. District Court on Tuesday in Bangor.
Nathan Reardon, 43, of Skowhegan and formerly of Brewer, pleaded not guilty to five cases of bank fraud, three cases of attempted wire fraud, two cases of bank false testimony, and one perjury case. Reardon was indicted by a federal grand jury earlier this month.
He received a $ 60,000 PPP loan in 2020.
The perjury charge arose from his first appearance in court last month, not from the loan process. Reardon allegedly lied about his income in the financial form used to determine whether a defendant qualified to serve as a court-appointed attorney. He reported his income as zero on the form, but a monthly income according to the prosecution when he filed for bankruptcy.
A trial is not expected to take place until next year.
Reardon stays free on an unsecured security deposit of $ 5,000. He would not have to put cash on bail unless he violates the terms of his release. Terms of his release include that no pandemic-related assistance be sought without the approval of the US Probation and Pretrial Services.
He was charged last month and first appeared in court on April 15, the day he filed for bankruptcy in an attempt to reorganize his debt. Reardon previously filed for bankruptcy in Florida in 2014 and 2018.
In his 129-page Maine bankruptcy filing, Reardon listed his assets, which consisted entirely of personal property, at nearly $ 18,000 and his liabilities at $ 385,000. His monthly household income is $ 2,500, of which $ 500 is from rental income and the remainder is a family gift.
His file lists nearly 200 creditors, many of whom are former employees who have owed wages back. He owes $ 36,000 in taxes and over $ 55,000 in taxes on commercial real estate in Bangor and Brewer. He also owes thousands of dollars to plumbers, electricians, security firms, construction companies, utilities, cable companies, cellular operators, and the individuals who gave him personal loans.
The bankruptcy filing also stated that he owed the government $ 90,000 for the PPP loan – $ 60,000 for the loan and $ 30,000 for money he mistakenly received and spent.
Reardon said he is opening a taco shack at 95 Center St. in Bangor, similar to the restaurant he runs in Newburgh. It has not been determined whether any of Reardon’s debts are related to the planned opening of this store.
Reardon applied for the loan for his company Global Disruptive Technologies Inc. on April 3, 2020, a week after Congress passed the CARES bill that provided money for PPP loans through private credit institutions, the affidavit said. Reardon sought the loan from TD Bank in Bangor, where he had a checking account.
When applying for the loan, Reardon allegedly lied about the company’s monthly payroll and expenses. When the loan was approved and the money was deposited into his account on April 22, 2020, it had a negative balance of more than $ 4,000, the complaint said.
Eight days later, Reardon allegedly illegally applied for a second PPP loan using the same false information. The bank denied this request, but mistakenly released an additional $ 59,145 into Reardon’s account on May 4, 2020, the affidavit said. Two days later, TD Bank identified the error and deposited the remaining $ 28,000 in the account.
Reardon’s purchases with the illegally obtained loan included a men’s 14-karat yellow gold wedding ring, clothing, shaving products, toys, an LED barber bar and a pair of caiman skin cowboy boots, a court affidavit said. Caimans are a species related to alligators found in Central and South America.
He listed some of these items as assets on his bankruptcy filing.
Reardon is also believed to have used the money to pay a lawyer and local veterinarian, make donations to a Florida church, and shop online. In addition, he withdrew more than $ 10,000 of the loan in cash, the complaint said.
If convicted, Reardon faces a prison sentence of up to 30 years and a fine of up to $ 1 million. He could also be instructed to repay the amount of the loans, including any money he mistakenly received.