DOJ seeks $305K in claims from COVID-19 fraudster’s family; Great Sacandaga Lake property allegedly purchased

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Family members of a woman who allegedly helped fund the purchase of a Great Sacandaga Lake property, among other assets, with pandemic relief dollars have so far agreed to pay the federal government nearly $305,000.

Albany resident Debra Hackstadt, 69, was sentenced to 16 months in prison last year for fraudulently tapping more than 30 government-backed loans during the COVID-19 pandemic and distributing some of the money to family members and . She was ordered to pay $1,696,324 in restitution.

Two lawsuits have since been filed, ordering family members to dole out claims and forfeit assets such as a small slice of property owned by Hackstadt’s son and daughter-in-law in the Great Sacandaga Lake area. Saratoga County property records show that the two own some land on South Shore Road in Edinburg.

So far, $190,000 of the settlement funds requested by the U.S. Northern District of New York has been tendered. An additional $114,816 is still pending from Danielle Hackstadt, who received two of her mother’s loans.

“In addition to criminal prosecutions, we can file False Claims Act lawsuits – with the potential for treble damages – and asset forfeiture actions,” said U.S. District Attorney Carla Freedman in a statement. “When appropriate, we can also seek recovery from people who financially benefited from fraud even if they did not commit fraud themselves.”

The daughter was listed as the sole proprietor of a health services firm and cleaning company, respectively, despite working as an insurance agency employee at the time the applications were filled out by Debra Hackstadt.

She knew that her mother was applying for small business loans in her name, according to the U.S. Northern District of New York.

The U.S. Attorney’s Office’s Asset Recovery Unit and FBI lead an investigation into the matter.

Federal law enforcement officials in May of 2021 launched a task force dedicated to preventing COVID-19 relief program fraud. So far, $1.4 billion has been seized and more than 3,000 defendants have been slapped with related charges.

“These settlements should prove the FBI is committed to working closely with our federal, state, and local partners to protect federally funded relief programs,” said FBI special agent Charles Alfred Watson in a statement regarding the Hackstadt case. “Together, we will work diligently to ensure fraudulently obtained funds are tracked down and returned so they can be put to use to assist the millions of honest Americans who need them most.”

At the time of her sentencing, Debra Hackstadt said that she suffered childhood abuse, faced widowhood in 2019 and twice battled cancer. She told the court she regrettably “panicked” while filling out the applications, according to the Times Union.

By Tyler A. McNeil

Tyler A. McNeil is a nine-year multimedia journalist and southern Saratoga County native. Currently, McNeil covers the southern Adirondacks and northern Mohawk Valley with the Daily Gazette and Leader-Herald. He also specializes in political, investigative and transit-related coverage. The University at Albany graduate's reporting has appeared in a variety of outlets, including Buzzfeed, New Food, Saratoga Today and the Times Union.

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