Yarmouth Man pleads guilty to identity theft and SBA loan fraud | USAO-ME


PORTLAND, Maine – A Yarmouth man pleaded guilty to aggravated identity theft in federal court today, waived charges in a separate case, and pleaded guilty to false testimony in a loan application to the Small Business Administration, the incumbent U.S. – Attorney Donald E. Clark announced.

According to court records, in November 2016 John J. Cavanaugh, Jr., 52, applied to the Social Security Administration (SSA) for disability insurance benefits for his underage son. During the application process, Cavanaugh falsely claimed that his son had lived with him since he was born and that he and his son lived together. In fact, neither his son nor his mother had ever lived with Cavanaugh.

In December 2016, Cavanaugh submitted a typewritten letter to the SSA allegedly written and signed by his son’s mother. The letter incorrectly stated that she and her son lived with Cavanaugh. The letter was tabled in support of Cavanaugh’s application for disability insurance on his son’s behalf. His son’s mother did not write the letter, and the signature on the letter was not hers. Cavanaugh did not have her permission to write the letter on her behalf. The SSA approved his claim for benefits, and he received them until June 2018 when his son’s mother learned he was receiving them and notified the SSA.

Also according to court records, Cavanaugh applied for an Economic Injury Disaster Loan through the US Small Business Administration in April 2020. The loans should support entrepreneurs negatively affected by the COVID-19 pandemic. The online application that Cavanaugh completed asked whether he was currently on charges or some other formal criminal charge. Cavanaugh incorrectly answered “no” to this question. In fact, he was on trial in the US District Court for the District of Maine and was the subject of a detention order informing him that he would face additional sentences if he commits a new federal crime during his release.

Cavanaugh faces a two-year prison sentence and a $ 250,000 fine for aggravated identity theft. He faces a maximum sentence of 30 years in prison, a US $ 1 million fine, and five years of supervised release on charges of misrepresentation. He faces an additional prison sentence of up to 10 years, which follows any other sentence, because he committed the offense for false information while in custody. He will be sentenced after completing an investigation report from the US probation service. A federal district court judge will determine each sentence based on U.S. sentencing guidelines and other legal factors.

The FBI is investigating the case with the assistance of the SSA Office of Inspector General and the US Small Business Administration.

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