A doctor who lives in Glen Cove was sentenced Friday to four years and three months in prison for fraudulently obtaining $3.8 million in pandemic relief loans and grants, the most serious case of its kind against a resident. of Long Island to date.

Dr. Konstantinos “Dino” Zarkadas, 49, was also ordered to pay $3.5 million in restitution during sentencing at the Central Islip federal courthouse, although his lawyer said he won’t. didn’t have the money. The doctor confessed to the crimes last year.

After Friday’s sentencing, federal authorities reported the doctor. “Dr. Zarkadas chose greed over honesty by funding a luxury lifestyle on the backs of American taxpayers,” said Thomas Fattorusso Jr., Special Agent in Charge of the Internal Revenue Criminal Investigations Office. Service in New York.

Zarkadas lied about 11 successful applications for Paycheck Protection Program loans and COVID-19 Economic Disaster Loans, then used the money to buy fancy watches and a yacht. Prosecutors say he even used loan proceeds to pay an $80,000 settlement in a separate federal case over his poor record keeping of a weight-loss drug he gave to patients.

His sentencing by U.S. District Court Judge Gary R. Brown comes as President Joe Biden’s administration steps up efforts to crack down on fraud in federal pandemic programs, which have awarded billions of dollars to struggling businesses and nonprofits across the country.

“It is an absolutely reprehensible crime,” the judge told Zarkadas on Friday, citing the disastrous impact of the coronavirus on the United States and its economy.

“This is disgraceful conduct… The defendant was looking for an opportunity to loot the public treasury,” the judge said during the 70-minute hearing. “It’s as bad as white collar crime gets.”

The judge, prosecutor and Zarkadas’ attorney all mocked his use of pandemic relief money to buy $140,000 worth of watches – three Rolex watches and a Cartier watch – and make a $194 down payment. $915 on a $1.7 million yacht for his brother-in-law. law. Zarkasdas has since handed over the watches and the yacht money to federal authorities, according to a sentencing memo from prosecutors.

“This defendant did ridiculous things,” the judge said.

In November, Zarkadas, who practices medicine in Manhattan, pleaded guilty to disaster relief fraud and wire fraud. He had faced up to 30 years in prison.

Zarkadas, who prosecutors say had a net worth of more than $2 million before the pandemic, applied for the loans and grants as COVID raged in New York state, between March 30 and July 20. 2020.

The federal aid was intended to help employers pay employee wages and survive a period when all non-essential businesses were closed to slow the spread of the coronavirus. Healthcare businesses, such as the practice of Zarkadas, were deemed essential.

Federal prosecutor Anthony Bagnuola said Friday that $757,000 in PPP and EIDL loans issued to Zarkadas’ medical practice were not part of the fraud case.

However, the doctor “falsified” 11 loan applications for other businesses he allegedly owned and “created false tax documents” to support his request for federal assistance, the prosecutor said.

Zarkadas lied on claims about number of people employed by companies, size of payroll and how he planned to use the money. “The defendant saw it as an opportunity to make a bargain. He was motivated by greed,” the prosecutor said.

Defense attorney’s explanation

Zarkadas’ attorney, Ronald G. Russo, disagreed, saying the doctor’s income had plummeted during the pandemic and he was struggling to pay a debt owed to a Manhattan landlord.

A few years earlier, Zarkadas had personally guaranteed a $4.7 million lease for a downtown medical practice from which he later withdrew. Zarkadas used $3 million, or 80% of the funds from the COVID loan, to pay the debt.

“My client was at the forefront of the COVID response, caring for the poorest of the poor – and the irony is that he stole COVID funds to pay his landlord,” the lawyer said.

Zarkadas did not comment publicly in court, opting to speak privately to the judge in a separate trial that his lawyer and the prosecutor agreed that he could produce a multi-million dollar settlement. This money would be used to pay restitution, they said.

Zarkadas cried while talking softly to the judge for five minutes.

The PPP consisted of federally guaranteed bank loans that are forgivable if used primarily to keep employees on payroll or to rehire them. EIDL loans come from the US Treasury and include a grant of up to $10,000 per applicant.

Both programs are overseen by the US Small Businesses Administration, which along with the Justice Department, FBI and IRS has investigated cases of fraud.

Breon Peace, U.S. attorney for the Eastern District of New York, said Friday that he and his staff “will vigorously pursue and bring to justice medical professionals, like the defendant, and other fraudsters who are driven by greed maintain a lavish lifestyle at the expense of small businesses that rightfully need emergency COVID-19 assistance.”