ALBANY, N.Y. (NEWS10) — An Albany woman will spend nearly a year-and-a-half in prison after she applied for and was awarded 32 government-backed loans meant for businesses struggling with the financial effects of the COVID pandemic, according to United States Attorney Carla B. Freedman and Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI). Debra Hackstadt, 68, pleaded guilty to wire fraud on May 19, 2022.

Hackstadt admitted in her plea that between April 30, 2020, and June 11, 2021, she fraudulently obtained $1,615,546 from two pandemic relief loan programs—the Paycheck Protection Program (PPP), whose loans are issued by private financial institutions and backed by the federal government, and Economic Injury Disaster Loans (EIDLs), which are issued directly by the U.S. Small Business Administration (SBA). These loans were granted to Hackstadt herself, some of her family members and friends, and several companies controlled by Hackstadt or her family members.

United States District Judge Glenn T. Suddaby ordered Hackstadt to pay $1,696,324.96 in restitution and to pay another $254,812, representing the amount of money she personally obtained from the fraud. He also imposed a two-year term of supervised release after Hackstadt is let out of jail.

“Today’s sentence holds Debra Hackstadt accountable for a prolific fraud,” said United States Attorney Carla B. Freedman. “She took advantage of an economically devastating pandemic and stole money that was earmarked for legitimate businesses struggling to stay afloat. With our law enforcement partners, we will continue to investigate and prosecute those who have stolen from pandemic relief programs.”

Hackstadt committed the fraud by lying to the SBA and various PPP lenders on loan applications, including by making up and grossly overstating the number of employees and payrolls of the companies and sole proprietorships for which she obtained loans. Many of the PPP applications also included false tax documents that Hackstadt created as part of the scheme. In total, Hackstadt’s scheme resulted in the issuance of 27 PPP loans and five EIDLs.

Hackstadt also admitted that in addition to these loans, she fraudulently obtained two other business loans from private lenders. She fraudulently obtained a $42,290 loan sometime near October or November 2019, and promptly defaulted on it, and fraudulently obtained a $48,500 loan in June 2021, quickly defrauding on that as well.

This case was investigated by the FBI. It was prosecuted by Assistant U.S. Attorneys Michael Barnett and Joshua R. Rosenthal.