Do None Of The Ps In ‘PPP’ Stand For Ponzi?

Hedge funds, former Treasury Secretary Steve Mnuchin belatedly and no doubt rather unhappily made clear after his former colleague Anthony Scaramucci inadvertently forced his hand, were not supposed to be eligible for the Paycheck Protection Program, under which the federal government (through some less-than-disinterested intermediaries) has handed out more than a half-trillion dollars in forgivable low-interest loans designed to keep their employees on the payroll and off the dole. Of course, lots of people decided to ignore that part of the bargain. One man (a Citadel alum, no less) allegedly decided to do so in concert with disregarding the sign that read “no hedge funds allowed,” along with other annoying laws, rules and regulations for good measure.

Gregory Blotnick is accused of misrepresenting payroll expenses at his companies Brattle Street GP LLC and BSC Management LLC in applications for five PPP loans between April and August of 2020, each from a different bank. Based on the allegedly false information, the lenders approved a combined $2.4 million in PPP loan funds for the companies.

Prosecutors allege the loans were never used to pay employees, and Blotnick instead funnelled the majority of the funds into personal trading accounts ‘and subsequently lost them in trading activity.’

He is also accused of wiring hundreds of thousands of dollars to a person identified as a previous investor of Blotnick’s investment management firm….

He pled not guilty at his April 16 arraignment, the D.A.’s office confirmed to Citywire.

Hedge fund manager charged with $2.4 million PPP loan scam [CityWire]

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