Former Hackettstown Resident Claimed $1.8M In Fraud COVID Loans: Feds

NEW JERSEY - A Hackettstown businessman admitted to illegally claiming nearly $1.8 million in federal COVID-19 loans meant for small businesses on Tuesday, authorities said.

Rocco A. Malanga, 50, a former resident of Hackettstown, pleaded guilty Tuesday before U.S. District Judge Julien X. Neals to information charging him with one count of bank fraud and one count of money laundering, U.S. Attorney Philip R. Sellinger and Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division announced.

Malanga submitted false documents to three lenders to illegally obtain the emergency relief loans, according to court records, submitting at least three Paycheck Protection Program (PPP) loan applications on behalf of three fraudulent businesses. In his loan application, Malanga fudged the number of employees at each business, as well as their average monthly payroll, diverting some of the proceeds from the federal funds to fund a business that did not receive the loans.

The PPP program was one source of federal coronavirus relief provided by the CARES Act, with hundreds of billions of dollars in forgivable loans to small businesses offered. Read more: Feds Grant NJ More Flexibility On CARES Act Funding

The bank fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine, while the money laundering charge carries a maximum sentence of 10 years and a $250,000 fine.

Sentencing is scheduled for Nov. 2, 2022.