GREENEVILLE, Tenn. (WJHL) — A Johnson City man must serve two years in prison and pay more than $100,000 in restitution for reportedly defrauding a COVID-19 relief program meant for small businesses.
According to a news release on Monday from the U.S. Attorney’s Office for the Eastern District of Tennessee, Ketan Ghutadaria, 53, pleaded guilty to aggravated identity theft after defrauding the Economic Injury Disaster Loan (EIDL) program in 2020.
The release said the EIDL program is a federal program that provided loans to small businesses that were experiencing “substantial financial disruptions” due to the COVID-19 pandemic. The program was part of the national Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.
In March 2020, Ghutadaria used a business owner’s personal identification information, without their knowledge or authority, to apply for an EIDL on behalf of a local trucking company, the release said.
The application for the EIDL was approved based on the fraudulent information provided by Ghutadaria, according to the release. The Small Business Administration then transferred $100,300 in EIDL funds into a bank account that Ghutadaria had access to.
The release said that within approximately three months, Ghutadaria spent nearly all of the funds to pay off student loans, a vehicle loan and purchase other personal items.
Through the plea agreement, Ghutadaria must serve two years in prison. He’ll be under supervised release for one year following his sentence and must pay the full $100,300 in restitution, the release said.
The release said the case was investigated by Special Agent Thomas Whitehead of the United States Secret Service, and Assistant United States Attorneys Mac Heavener and Ryan Blackwell represented the United States in court proceedings.
