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Ahoy There Matey

Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

When a physician takes the Hippocratic Oath, they vow to uphold certain ethical standards. Dr. Konstantinos Zarkadas, 47, of Long Island, N.Y., seems to have conveniently forgotten what that promise was all about. The deceptive doctor applied for multiple small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP) and absconded with approximately $3.7 million he didn’t deserve.

According to the Federal Trade Commission, Americans have lost $586 million in relief aid due to scams related to COVID-19 programs. The PPP and EIDLP are programs that Congress created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act during the COVID pandemic to assist small businesses with staying afloat. The PPP provided small businesses with loans, while the EIDLP granted low-interest financing to small businesses. Dr. Zarkadas provided false information on his applications and received a total of 11 PPP and EIDLP loans.

Utilizing various bank accounts, the physician laundered money to make lavish purchases. (You would think a physician could make enough money to finance their own purchases). Zarkadas used $194,915.42 he received from the PPP loans as a down payment on a $1.7 million yacht. (Ahoy there matey. This fraudster sounds like a pirate.)

The doc also used some of the stolen government funds to purchase Rolex and Cartier wristwatches and lease luxury cars. (While this pirate may have had good taste, he was up to no good.) Zarkadas disguised his fraudulent purchases by writing a check to a family member. In the memo line, he wrote “repayment of payroll.” (He made payroll alright, but it appears he only paid himself.) He also used some of the stolen money to settle more than $1 million in judgements against him.

It looks like Dr. Zarkadas chose greed over honesty. He experienced a luxurious lifestyle at the expense of suffering American taxpayers. Zarkadas was sentenced to 51 months in jail for his crimes. In addition, the plea agreement states that the fraudster will surrender his four wristwatches and $200,000 and pay back $3.5 million in restitution. (It looks like this fraudster is going to sail straight on to federal prison, but unfortunately for him, it won’t be onboard his $1.7 million yacht.)

Today’s Fraud of the Day comes from a Department of Justice press release, “Long Island Physician Sentenced to 51 Months in Prison for Covid-19 Loan Fraud,” dated March 18, 2022.

Earlier today, in federal court in Central Islip, Konstantinos Zarkadas, a Glen Cove-based medical doctor, was sentenced by United States District Judge Gary R. Brown to 51 months’ imprisonment for fraudulently obtaining millions of dollars in COVID-19 emergency relief funds.  The Court also ordered Dr. Zarkadas to pay approximately $3.5 million in restitution.  Dr. Zarkadas pleaded guilty in November 2021 to disaster relief fraud and wire fraud in connection with his receipt of small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP). As part of the plea agreement, Dr. Zarkadas forfeited $200,000 and four luxury wristwatches.

Breon Peace, United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas Fattorusso, Jr., Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the sentence.

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