Former Citadel Analyst Gets Four-Year Prison Sentence For Covid Scam
A former analyst at Citadel LLC was sentenced to 51 months in prison for scamming millions in Covid relief loans for his startup hedge fund.
Gregory Blotnick, who founded Brattle Street Capital in 2019, pleaded guilty to wire fraud and money laundering charges in October. He admitted to submitting 21 fraudulent loan applications amounting to US$6.8 million to 13 lenders under the Paycheck Protection Program of the March 2020 Covid-19 economic stimulus bill.
He was sentenced on Tuesday by a federal judge in Newark, New Jersey. He was also ordered to pay US$4.6 million in restitution.
Hedge funds like Brattle Street are technically ineligible for PPP bailouts. According to the prosecutors, Blotnick falsified information about his startup from April 2020 to March 2021 in his loan applications. He told one bank that the startup employed 45 people, and had a monthly payroll of over US$325,000. His startup paid a total of $0 in wages in 2019 and 2020.
Of the US$6.8 million in loan applications, Blotnick received US$4.6 million. The former analyst lost much of the money in bad stock trades.
Blotnick also pleaded guilty to similar charges brought by the Manhattan district attorney’s office in October. He’s likely to receive court sentencing on Thursday.
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