Konstantino Zarkadas, Covid-19 Loan Fraud, New York 2020

A Glen Cove-based medical doctor has pleaded guilty to disaster relief fraud and wire fraud in connection with his receipt of millions of dollars in small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP).

Konstantino Zarkadas, 38, pleaded guilty to the charges before United States District Judge Gary R. Brown at the federal courthouse in Central Islip, New York.

The defendant faces up to 30 years in prison, as well as forfeiture of $3,796,849.50 and a fine of up to $250,000. When sentenced, Zarkadas will face a lengthy prison term for his role in the massive Covid-19 loan fraud scheme.

According to court filings, between March 2020 and July 2020, Dr. Zarkadas fraudulently applied for, and received, at least 11 PPP and EIDLP loans totaling approximately $3.7 million, on behalf of corporate entities he controlled. He laundered the loan proceeds through various bank accounts he controlled, ultimately using the funds for extravagant personal purchases and other impermissible purposes.

For example, in July 2020, Zarkadas used approximately $194,915.42 in PPP funds intended for distressed small businesses affected by the pandemic to finance the down payment on a $1.75 million yacht. He made the check payable to a family member who was not the ultimate beneficiary of the funds and, in the check’s memo line, falsely indicated that the funds were “repayment for payroll.”

Zarkadas also withdrew tens of thousands of dollars’ worth of loan proceeds in cash and used some of the proceeds to satisfy more than $1 million in judgments against him, to lease luxury vehicles, and to make personal purchases, including several Rolex and Cartier wristwatches which he has agreed to forfeit in today’s proceeding.

Congress created the PPP and EIDLP as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provided emergency financial assistance in connection with economic effects of the Covid-19 pandemic.

Source: https://www.justice.gov/usao-edny/pr/long-island-doctor-pleads-guilty-covid-19-loan-fraud