Tolland County Contractor Enters Plea In Fed COVID Fund Fraud Case

COVENTRY, CT — An eastern Connecticut contractor with a laundry list of transgressions in Tolland County has now admitted to fraudulently obtaining COVID-19 Relief Funds, a federal prosecutor said.

Vanessa Roberts Avery, United States attorney for the District of Connecticut, said that John Matava, 59, of Coventry, entered a guilty plea Tuesday before U.S. District Judge Kari A. Dooley in Bridgeport to offenses related to his receipt of federal COVID-19 relief funds.

Avery said the case relates to the Coronavirus Aid, Relief, and Economic Security, or CARES Act, which was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of forgivable low-interest loans to small businesses for job retention and certain other expenses through the Paycheck Protection Program. The PPP allowed the interest and principal to be forgiven if businesses spent the proceeds on these expenses within a certain period of time of receipt and used at least a certain percentage of the amount to be forgiven for payroll, Avery said.

The PPP was overseen by the Small Business Administration, which has authority over all PPP loans. Individual PPP loans, however, were issued by private approved lenders, such as Celtic Bank, which received and processed PPP applications and supporting documentation, and then made loans using the lenders’ own funds, which were guaranteed by the SBA.

That's how Matava came into the picture, Avery said. According to court documents and statements made in court, in April 2020, Matava applied to Celtic Bank for a $100,000 PPP loan for a company he owned — J.M. Builders LLC. The application submission included several false representations, including that J.M. Builders had eight employees and an average monthly payroll of $40,000; that the monies would be used for payroll, lease, mortgage, interest and utilities; and that the business owner was not subject to pending formal criminal charges.

Court records indicate that, at the time of the PPP loan application, there were no records of payroll or employees with the Connecticut Department of Labor for J.M. Builders LLC, and Matava was subject to criminal charges in two pending cases related to arrests in 2017 and 2018.

For example, in 2018, Vernon police arrested Matava on a set of criminal charges that accused him of skipping out on work to rental properties in the Rockville section of town, according to an arrest warrant. Records cited in a warrant showed that Matava had 17 prior arrests in Connecticut and had convictions for crimes like building code violations, second-degree larceny, other larcenies, home improvement fraud, forgery, assault and the use of a motor vehicle without permission, according to a warrant. He had not had a valid contractor's license since 2004 as the owner of J.M. Builders, according to a warrant.

Records in the federal loan fraud case show that, on April 22, 2020, Celtic Bank disbursed $100,000 to a bank account for J.M. Builders. The account was opened on April 21, 2020, and had a balance of $0 immediately prior to the loan funds being disbursed, Avery said. Between April 2020 and January 2021, Matava used the funds primarily for personal expenditures, including $3,498 to pay a dog breeder, $4,777 for payments to an RV superstore in Connecticut, and legal fees, including a $2,000 retainer, for four of his Vernon cases, Avery said.

In January 2021, Matava sought $100,000 in additional PPP funds from Celtic Bank, and included with the application several additional false statements and fraudulent tax documents, Avery said. Celtic Bank denied the application, records show.

Matava was arrested on Jan. 7, 2023. He entered a guilty plea Tuesday to one count of wire fraud affecting a financial institution, which carries a maximum prison term of 30 years, and to one count of making an illegal monetary transaction, which carries a maximum term of 10 years.

Judge Dooley scheduled sentencing for March 29.

Matava is released on a $60,000 bond, in home detention, pending sentencing.