ALBANY, N.Y. (NEWS10) — An Albany woman was sentenced to 16 months in prison last November 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 the Department of Justice (DOJ), family members of Debra Hackstadt recently agreed to pay the government a total of $305,000, settling claims arising from Pandemic relief loans.

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.

Hackstadt’s daughter, Danielle Hackstadt, was listed as the sole proprietor of a “health services” company with gross revenue of $85,000 in her July 2020 EIDL application. According to the DOJ, Danielle received gross receipts of $82,547 while listed as the sole proprietor. She admitted she was an employee of an insurance company and had no sole proprietorship during July and August of 2020. The DOJ says she further admitted she knowingly applied for the PPP loan and EIDL in her name and personally received the loaned funds, knowing they came from COVID-relief programs intended to benefit struggling businesses, spending the loaned funds for her benefit.

Later in February 2023, the U.S. Attorney’s Office filed a lawsuit pursuing the civil forfeiture of a lakefront residence and property off Great Sacandaga Lake, alleging a portion of the property was purchased with fraudulently obtained pandemic relief funds that Hackstadt had then transferred to family. Later in June, a settlement was reached between the government and Hackstadt’s son and daughter-in-law, who agreed to pay $109,000 to satisfy the claim. The payment has since been made.

“Debra Hackstadt showered ill-gotten pandemic relief funds upon her family members,” said United States Attorney General Carla Freedman. “These settlements prove that her crimes did not pay, and that we will use every tool at our disposal to follow the money and recover ill-gotten gains. In addition to criminal prosecutions, we can file False Claims Act lawsuits – with the potential for treble damages – and asset forfeiture actions. When appropriate, we can also seek recovery from people who financially benefitted from fraud even if they did not commit fraud themselves.”