A few months before the COVID-19 pandemic, Gregory Blotnick, having gone through the key rite of passage for hedge fund managers of having been fired by Citadel, decided to start his own. Once the plague broke out, like many small business owners Blotnick raced to the Paycheck Protection Program trough early and often—21 times.
This, of course, was wrong. Not only was it wrong because hedge funds like Blotnick’s Brattle Street Capital were technically, if not practically, ineligible for PPP bailouts. It was wrong because Blotnick had no paychecks to protect.
From April 2020 through March 2021, prosecutors said, Blotnick falsified information about Brattle Street in his PPP loan applications, telling one bank the fund employed 45 people, with a monthly payroll of more than $325,000. In reality, according to the government, Brattle Street paid no wages at all in 2019 or 2020.
And that means, after more than two years of intermittent lockdowns, Blotnick’s getting a few more.
Gregory Blotnick, 35, was sentenced on Tuesday to 51 months behind bars by a federal judge in Newark, New Jersey, and ordered to pay $4.6 million in restitution…. “Mr. Blotnick will serve his time with dignity and looks forward to becoming a contributing member of society when his sentence is completed,” [his lawyer Adam] Kaufmann said.
The bright side is it means Blotnick will at least be getting off Riker’s Island, and probably won’t have to go back.
Blotnick pleaded guilty in October to similar charges brought by the Manhattan district attorney’s office. He faces a possible state court sentencing on Thursday.
Kaufmann said Blotnick is expected to get a sentence of one to three years on the state charges, to run concurrent with the federal term.
Ex-Citadel Analyst Gets Over Four Years in Prison for Hedge Fund Covid Scam [Bloomberg]
