An East Granby woman has pleaded guilty to offenses stemming from a scheme to defraud pandemic-relief programs of more than $1.1 million, according to the U.S. District Attorney’s office.
Karen Gaston, 44, allegedly submitted fraudulent applications for the federal Paycheck Protection and Economic Injury Disaster Loan programs. Gaston had previously been sentenced in a separate case involving Medicaid fraud.
The loan applications falsely represented the operations, resources and employees of several small businesses she controlled.
Gaston claimed that her businesses were all active and operating concerns; falsely represented the number of employees and the amount of wages paid; included copies of fraudulent tax returns and tax-related documents; and falsely represented that a family member, used as an applicant, was a part owner of one of her entities.
She received $1,163,910 in PPP and EIDL loan funds. Instead of using the funds for payroll or other operating expenses, prosecutors allege she spent the money on personal expenditures, including travel, food, luxury home goods, expensive jewelry, cars, and paying off her home mortgage.
Gaston pleaded guilty to wire fraud, which carries a maximum prison term of 20 years, and making illegal monetary transactions, which carries a maximum term of 10 years.
She has agreed to make full restitution. Â She also has agreed to the forfeiture of a ring she purchased in July 2020 from the jeweler Harry Winston for $39,521.63.
Gaston was released on a $100,000 bond pending sentencing, which has not yet been scheduled.
Last December, Gaston was sentenced after being found guilty of larceny and health insurance fraud in connection with fraudulent billings to Medicaid.
She falsely claimed more than $52,0000 from Medicaid for nine clients she treated as part of a vocational program for adults with disabilities.
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