A businessman from South Carolina has been charged in federal court in Worcester, Massachusetts, with allegedly misusing COVID-19 relief funds intended for his business. David Breen, 54, of Mount Pleasant, S.C., faces one count of theft of government property after prosecutors say he used more than $1.2 million in Economic Injury and Disaster Loan (EIDL) funds for personal expenses.
Court documents state that Breen applied for EIDL funds in March 2022 on behalf of ‘Fun Zone,’ which operated ‘Pinz,’ a bowling alley and entertainment venue located in Milford, Massachusetts. The EIDL program was created by the U.S. Small Business Administration (SBA) to provide loans to small businesses impacted by the COVID-19 pandemic.
According to the allegations, Breen entered into a loan agreement with the SBA promising to use the money as working capital for his business. However, authorities claim that after receiving approximately $1.5 million from the SBA, Breen used over $1.2 million between March 2022 and June 2023 to build a home for himself in Mount Pleasant, S.C., buy a $111,000 truck, and make a down payment on a Mercedes costing $98,289.
If convicted of theft of government property, Breen could face up to 10 years in prison, up to three years of supervised release, and a fine as high as $250,000. Sentencing will be determined by a federal district court judge based on federal guidelines.
“United States Attorney Leah B. Foley; Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England; and Massachusetts Inspector General S. Jeffrey Shapiro made the announcement. Valuable assistance was provided by the U.S. Small Business Administration, Office of Inspector General, Boston Region. Assistant U.S. Attorney Brendan D. O’Shea of the Worcester Branch Office is prosecuting the case.”
The Department of Justice established the COVID-19 Fraud Enforcement Task Force on May 17, 2021 to coordinate efforts across agencies to investigate and prosecute pandemic-related fraud schemes and support agencies administering relief programs (https://www.justice.gov/coronavirus). More information about these efforts can be found at https://www.justice.gov/coronavirus/combatingfraud.
Anyone who has information regarding attempted fraud involving COVID-19 relief funds is encouraged to report it through the Department of Justice’s National Center for Disaster Fraud Hotline or web complaint form.
Prosecutors emphasized that all details are allegations at this stage and that Breen is presumed innocent until proven guilty beyond a reasonable doubt.