CHARLESTON, S.C. (WCSC) — A South Carolina businessman pleaded guilty in federal court in Massachusetts to misusing COVID funds.
David Breen, 54, pleaded guilty to one count of theft of government property and misappropriation of COVID-19 funds for personal use.
The U.S. Department of Justice said he spent more than $1.2 million in Economic Injury and Disaster Loan funds that he obtained from the U.S. Small Business Administration to build a home and purchase motor vehicles. The SBA provided loans to small businesses that suffered economic injury because of the COVID-19 pandemic.
He applied for Economic Injury and Disaster Loan funds in March 2022 on behalf of “Fun Zone,” an entity through which he operated “Pinz,” a bowling alley and entertainment venue in Milford, Massachusetts. Breen entered into a loan agreement with the SBA in which he agreed to use the loan proceeds as working…
Investment fraud targets the human desire for financial growth by promising high returns with “low to no risk.”
- Ponzi Schemes: Named after Charles Ponzi, these schemes pay “returns” to earlier investors using the capital brought in by newer investors. There is no actual underlying business; the system collapses when new recruitment slows down.
- Pyramid Schemes: Similar to Ponzi schemes, but participants are usually required to sell a product or service. The primary “profit” comes from the recruitment fees of new members rather than actual product sales.
- Pump and Dump: Fraudsters spread false, positive rumors about a cheap stock (the “pump”) to drive up the price. Once the price peaks, they sell their shares (the “dump”), leaving other investors with worthless stock.