WELLINGTON — A federal judge has sentenced a former business executive from Wellington to 2.5 years in prison this week for acquiring about $2 million in fraudulent loans through federal programs designed to help small businesses struggling through the COVID-19 pandemic.
Gregory Scott Keough, 57, learned his fate during a sentencing hearing Thursday, Feb. 8, before Judge Donald M. Middlebrooks at the West Palm Beach federal courthouse.
He pleaded guilty in November to two counts of wire fraud and one count of money laundering. Prosecutors said Keough used the bulk of the money for personal expenses, including private school tuition and traveling on private jets.
During Thursday’s hearing, Middlebrooks ordered that Keough begin serving his sentence on March 25 and that he pay $1.9 million in restitution. His prison sentence will be followed by three years of probation.
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Federal prosecutors alleged that, between March and August of 2020, Keough and co-conspirator Derek Acree submitted fraudulent applications through the Small Business Administration-backed Paycheck Protection and Economic Injury Disaster Loan programs.
The programs, part of the $2.2 trillion CARES Act passed by Congress in March 2020, provided small businesses with loan assistance for payroll, rent, utilities and other operating expenses. Courts have convicted many people of profiting from fraudulent CARES Act loans, and the Palm Beach County State Attorney’s Office has set up a task force to deal with the crime.
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According to court records, Keough obtained about $1.6 million in fraudulent EIDL and PPP loans for companies they both controlled.
Individually, Keough submitted an additional four applications on behalf of private equity and advisory firms he controlled as their CEO, prosecutors said. Two of the applications were approved, providing Keough with $309,555 in CARES Act money.
The U.S. Attorney’s Office in Miami said companies affiliated with Keough included National Financial Holdings, Finova Financial, Grupo Keough and Enclave Partners.
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Prosecutors said the loan applications misrepresented Keough’s number of employees, payroll expenses and gross revenues.
Keough reportedly transferred some of the loan funds to other bank accounts and used the money to pay for multiple credit cards, private jet travel, private school tuition and to have storm windows installed at his home.
Acree, an attorney based in Palm Beach Gardens, was charged separately and plead guilty in October 2022 to conspiracy to commit wire fraud. He was sentenced in January of 2023 to three years and five months in prison and ordered to pay $1.26 million in restitution.
Julius Whigham II is a criminal justice and public safety reporter for The Palm Beach Post. You can reach him email@example.com and follow him on X, the platform formerly known as Twitter, at@JuliusWhigham. Help support our work:Subscribe today.
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