Tolland County Contractor Gets Prison Time In Fed COVID Fraud Case

TOLLAND COUNTY, CT — A Coventry-based contractor that is facing a laundry list of both local and federal offenses has been sentenced to two years in prison in connection with a scheme to fraudulently obtain COVID-19 relief funds.

The announcement Friday by Connecticut U.S. Attorney Vanessa Roberts Avery seemingly closes the door on his federal case. John Matava, 60, was was sentenced by U.S. District Judge Kari A. Dooley in Bridgeport to 24 months in prison, followed by three years of supervised release.

According to case records, in March 2020, the Coronavirus Aid, Relief, and Economic Security, or CARES Act was set up 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 loans to small businesses for job retention and certain other expenses through the Paycheck Protection Program and in n April 2020, Congress authorized more than $300 billion in additional PPP funding.

The PPP allowed qualifying small businesses and other organizations to receive unsecured loans at an interest rate of 1 percent. PPP loan proceeds were to be used by businesses on payroll costs, interest on mortgages, rent and utilities. 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.

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.

According to case records, in April 2020, Matava applied to Celtic Bank for a $100,000 PPP loan for his business, J.M. Builders LLC. The application submission included several "false representations," including that J.M. Builders LLC 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.

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, case and law enforcement records show.

On April 22, 2020, Celtic Bank disbursed $100,000 to a bank account for J.M. Builders LLC on which Matava was the signatory, Avery said. The account was opened on April 21, 2020, and had a balance of zero dollars 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 court cases in Rockville Superior Court, 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. Celtic Bank denied the application, Avery said.

Two of his pending cases include felony larceny charges on construction contracts he is accused of violating in Vernon, case and law enforcement records show. He is free on bonds totaling $170,000 in those cases and is scheduled to appear in court for both on April 5, judicial system records show.

In the federal case, Judge Dooley ordered Matava to pay restitution of $100,000. Matava was arrested by federal authorities on Jan. 7, 2023. On Jan. 2, 2024, he pleaded guilty to one count of wire fraud affecting a financial institution and one count of making an illegal monetary transaction.

Matava is released on a $60,000 bond, in home detention. He is required to report to prison on May 13.