Patrick Walsh and 10 companies he owned or operated have agreed to a $20 million consent judgment to resolve allegations of defrauding federal COVID-19 relief programs, the U.S. Department of Justice announced. Walsh admitted to submitting fraudulent Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) applications, obtaining approximately $7.8 million in loans intended to help struggling small businesses during the pandemic.
The fraudulent loans were obtained on behalf of companies including American Blimp Company LLC; Walsh Family Land Corp.; Airsign Inc.; Airsign Airship Group LLC; Airsign Group LLC; Airsign Airships Latin America LLC; Airsign Airships Asia Pacific LLC; Airsign Airships Repair Station LLC; Aero Capital LLC; and Eagle Ridge Management Group LLC doing business as Shiloh Oil Company. Walsh falsely inflated employee numbers and payroll data, and some companies listed were dormant or inactive. He also submitted applications in his wife’s name. Walsh used the funds for personal expenses, including purchasing a private island, investing in Texas oil interests, and paying off personal debts.
In January 2023, Walsh pleaded guilty to wire fraud and money laundering and was sentenced to 66 months in federal prison. He was also ordered to pay $7.8 million in restitution. The $20 million judgment resolves civil claims under the False Claims Act, which allows whistleblowers to sue on behalf of the government. The case originated from a complaint filed by Andrew Hersh, an IT contractor for Walsh, who may receive a share of the recovery.
“Today’s civil resolution and the previously imposed 66-month period of incarceration should serve as a significant deterrent to others like the defendant who would attempt to steal millions of dollars from the American people and exploit Federal relief programs,” said Acting United States Attorney Michelle Spaven for the Northern District of Florida. “The Northern District of Florida is committed to protecting government programs from fraud, and we will hold those accountable who steal from the American taxpayers.”
Acting U.S. Attorney Michelle Spaven for the Northern District of Florida emphasized that the resolution and Walsh’s prison sentence should deter others from exploiting federal relief programs. The Small Business Administration (SBA), which administered the loans, also praised the outcome, with General Counsel Wendell Davis calling it a “victory over bad actors.”
In March 2020, Congress established the Paycheck Protection Program (PPP) and broadened the eligibility for the Economic Injury Disaster Loan (EIDL) program as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This initiative aimed to offer emergency financial assistance to small businesses facing economic challenges due to the COVID-19 pandemic. The PPP, managed by the U.S. Small Business Administration (SBA), was intended to provide low-interest, forgivable loans to help cover specific allowable expenses for qualifying businesses during the crisis, including payroll, mortgage interest, rent, and utility costs.
Meanwhile, the EIDL program, also overseen by the SBA, offers low-interest loans to small businesses in areas impacted by declared disasters. PPP loans were backed by the SBA, while EIDL loans were directly issued by the SBA. To be eligible for either program, a corporate representative needed to submit a loan application that included details such as the number of employees and a certification confirming that the business was operational and would utilize the loan funds for approved business expenses.
“PPP and EIDL loans were intended to help small businesses during the pandemic,” said Acting Assistant Attorney General Yaakov M. Roth. “The department is committed to holding accountable those who undermined the purpose of these programs.”
