Florida businessman used PPP loans to buy island, invest in oil, feds say

GAINESVILLE, Fla. — A Florida businessman and 10 affiliated companies have agreed to a $20 million consent judgment to settle allegations of fraudulently obtaining pandemic relief loans, the U.S. Department of Justice (DOJ) announced.

Patrick Walsh of Williston and his companies are said to have violated the False Claims Act by knowingly submitting false information in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) applications. Prosecutors said Mr Walsh used loan proceeds for unauthorized personal expenses, including purchasing a private island, investing in Texas oil interests, and paying off personal debts.

According to the DOJ, Walsh obtained approximately $7.8 million in fraudulent loans by misrepresenting employee numbers and business operations for several companies, some of which were inactive. Prosecutors said he also submitted additional EIDL applications in his wife’s name.

When he defaulted, the Small Business Administration (SBA) paid lenders in full under its guarantee obligations, the DOJ said.

“PPP and EIDL loans were intended to help small businesses during the pandemic,” said Acting Assistant Attorney General Yaakov M. Roth of the Justice Department’s Civil Division.

“The department is committed to holding accountable those who undermined the purpose of these programs by knowingly obtaining and retaining loan proceeds for which they were not eligible.”

Mr Walsh previously pleaded guilty in January 2023 to one count of wire fraud and one count of money laundering related to the loans. He was sentenced to 66 months in federal prison and ordered to pay $7.8 million in restitution.

The case was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of Florida, and the SBA’s Office of General Counsel and Office of Inspector General. The settlement stems from a 2020 whistleblower complaint filed by Andrew Hersh, an information technology contractor who worked with Walsh.

The claims resolved by the settlement are allegations only, except for the admissions made in Mr Walsh’s guilty plea.