Recently, family members of Debra Hackstadt have agreed to pay the government $305,000 to settle claims related to pandemic relief loans. Hackstadt, an Albany woman, was sentenced to 16 months in prison in November for applying for and receiving 32 government-backed loans intended for businesses struggling due to the financial impact of the COVID-19 pandemic. The Department of Justice (DOJ) was involved in the case. News10 reported this story.
In her plea, Hackstadt admitted to fraudulently obtaining a total of $1,615,546 from two pandemic relief loan programs – the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDLs). The PPP loans are issued by private financial institutions and backed by the federal government, while the EIDLs are issued directly by the U.S. Small Business Administration (SBA). Hackstadt obtained these loans between April 30, 2020, and June 11, 2021, and used them for herself, her family members, and several companies that she or her family members controlled.
In July 2020, Danielle Hackstadt was listed as the only owner of a “health services” company that generated $85,000 in gross revenue in her EIDL application. The Department of Justice revealed that while listed as the sole proprietor, Danielle received $82,547 in gross receipts. However, she later admitted that she was actually employed by an insurance company during July and August of 2020 and did not have a sole proprietorship. The DOJ also disclosed that she knowingly applied for the PPP loan and EIDL in her name and received the loaned funds personally, despite knowing that they were intended to help struggling businesses affected by COVID-19. She spent the loaned funds for her personal benefit, as she confessed to the DOJ.
In February 2023, the U.S. Attorney’s Office took legal action to recover a lakefront residence and property near Great Sacandaga Lake, alleging that a portion of the property was purchased with pandemic relief funds obtained through fraudulent means, which Hackstadt then transferred to his family. In June of the same year, a settlement was reached between the government and Hackstadt’s son and daughter-in-law, who agreed to pay $109,000 to satisfy the claim. As of now, the payment has been completed.
According to Carla Freedman, the United States Attorney General, Debra Hackstadt gave pandemic relief funds to her family members through fraudulent means. The settlements that have been made clearly indicate that her actions have not gone unpunished, and the authorities will use every available tool to retrieve the funds obtained illegally. The False Claims Act lawsuits can result in treble damages, and the authorities can also take asset forfeiture actions. In some cases, individuals who have financially benefited from fraudulent activities can be held responsible for the recovery of the funds, even if they did not commit the fraud themselves.
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