The man responsible for buying the private island faces a five and a half year sentence in federal prison for illicitly obtaining $8 million from pandemic relief funds.
YANKEETOWN, Fla. — Located about a mile off the coast of this small Gulf Coast town, Sweetheart Island, an unoccupied two-acre lush paradise, houses a bubbling freshwater spring amongst cabbage palms, red cedars and mangroves.
Pelicans plunge into the cool waters of Florida’s Withlacoochee Bay which lies in close vicinity. Further west, one can witness the allure of stunning sunsets.
Perhaps Florida businessman Patrick Parker Walsh imagined it as the ideal retreat, however, he is instead spending his days in a federal prison for a term of five and half years. Walsh was found guilty of misappropriating close to $8 million in federal COVID-19 relief monies, a portion of which he used to purchase Sweetheart Island. Details here.
Although Walsh’s private island procurement stands out amongst other purchases made by pandemic scammers, his crime is far from unique. He is one among thousands who manipulated the system to swindle more than $280 billion from federal COVID-19 aid; an additional $123 billion was squandered or misused.
These losses represent close to 10% of the $4.3 trillion allocated by the U.S. government to ameliorate the financial disaster triggered by the COVID-19 pandemic, reveals an analysis by The Associated Press.
The investigation of multiple pandemic fraud cases by AP reveals a scenario of fraudsters and swindlers squandering stolen monies on luxury items, such as premium watches, exorbitant jewelry, high-end cars like Lamborghini, and opulent houses. The illicit funds also sponsored extravagant club nights, gambling escapades in Las Vegas and dream vacations.
The mode of carrying out these frauds was relatively straightforward: To provide immediate relief to those affected by COVID-19, the government removed stringent checks on fund allocation. But as highlighted by Walsh’s case and numerous other incidents, manipulating the system to steal the funds was as simple as dishonesty on an application.
Criminals exploiting this situation were not confined to any specific region or profession. Among the fraudsters were a Tennessee rapper, who boasted about stealing more than $700,000 in pandemic unemployment insurance on YouTube. An ex-pizzaria owner and cryptocurrency-themed radio show host used stolen aid funds to purchase an alpaca farm in Vermont. When a former Nigerian government official was arrested, he was wearing a $10,000 watch and gold chain worth $35,000 he had used pilfered COVID-19 relief benefits to purchase.
The U.S. Justice Department reports that approxmately 3,200 individuals have been prosecuted for COVID-19 relief fraud, with $1.4 billion in stolen pandemic aid recovered.
Catching every perpetrator is unrealistic due to the enormous scale of the fraud. Pandemic cases largely hinge on digital evidence which is fleeting, and the financial trails often go cold over time, as Bob Westbrooks, former executive director of the federal Pandemic Response Accountability Committee, points out.
“The uncomfortable truth is that the federal criminal justice system does not possess the capacity to fully deal with the unprecedented influx of pandemic relief fraud cases. These crimes have been committed by numerous individuals, both domestic and foreign,” added Westbrooks.
Despite the daunting challenge, top Justice Department officials remain undeterred. Special “ strike forces ” are being commissioned to apprehend COVID-19 aid swindlers and all attempts to evade justice will be thwarted.
“We’ll relentlessly pursue justice, regardless of how long it takes ,” declared U.S. Deputy Attorney General Lisa Monaco in August.
New York doctor Konstantinos Zarkadas, weighed down by massive debt, added to the list of COVID-19 fraudsters when he fraudulently procured almost $3.8 million through at least 11 separate applications for pandemic aid, according to the prosecution. Court records disclose that he bought Rolex and Cartier watches worth $140,000 for self and family and made a sizeable downpayment on a yacht.
Zarkadas used approximately $3 million to repay part of a previous civil judgement served on him for violating a real estate lease. Most shockingly, he used $80,000 of the stolen funds to settle a federal lawsuit which accused him of infringing the Controlled Substances Act by distributing more than 20,000 doses of a weight-loss drug without maintaining requisite records, alleged the prosecutors.
Shortly after Zarkadas was sentenced to over four years in prison for misappropriating the pandemic aid, New York State nullified his medical license.
Houston resident Lee E. Price III, with former convictions for forgery and heist, fraudulently amassed nearly $1.7 million by filing fake aid requests on behalf of non-existent businesses, as revealed by court records.
Price promptly splurged $14,000 on a Rolex, over $233,000 on a dazzling white Lamborghini Urus, a high-end SUV capable of scaling 0 to 60 mph in mere three seconds, and spent extravagantly at a Houston strip club named Casanova. Price was eventually sentenced to over nine years in prison.
Also conjuring an imaginary business was Vinath Oudomsine from Georgia, who falsely claimed his fabrication earned $235,000 annually and had a workforce of 10. Within weeks of Oudomsine’s application for pandemic relief, he was swiftly granted $85,000 to stave off collapse for his non-existent firm.
Nearly $58,000 of Oudomsine’s fraudulent gains were devoted to purchasing a 1999 Charizard Pokémon card – a golden, dragon-like creature with wide-open jaws, ready to strike.
While Pokémon merchandise might not match the value of rare baseball cards – case in point, a mint condition Mickey Mantle card that fetched $12.6 million previous year – they can still demand substantial sums. In recent years, an enthusiastic collector community has inflated prices for collectibles tied to the beloved franchise.
At his sentencing last year, U.S. District Judge Dudley H. Bowen chided Oudomsine calling his theft “an $85,000 affront” to a nation struggling with the pandemic aftermath.
“Every time I utter it: Pokémon card,” Bowen lamented before anointing Oudomsine with a three-year prison term.
Walsh’s Business Travails and His Turn to Fraud
Patrick Walsh’s attempt to salvage his aerial advertising businesses started off legitimately, but quickly snowballed into colossal fraud.
Walsh ran a small armada of cigar-shaped blimps, ferrying corporate logos over bustling venues. In June 2017, one of his airships experienced a spectacular crash and inferno during live coverage of the men’s U.S. Open golf tournament – one of the most prestigious sporting events in the world.
According to a report from the Associated Press, professional golfer Jamie Lovemark observed the horrific accident, saying, “I was teeing off and noticed it ablaze. It was a gut-wrenching sight”. The solo pilot was severely injured but survived, as per the findings from a National Transportation Safety Board investigation.
Following the disastrous crash, Walsh’s clients began jumping ship, as stated in his attorneys’ court records. In his quest for survival, Walsh obtained high-interest loans that also allowed him to scale up his firms. By 2019, his companies were raking in $16 million in sales and had spread their wings to Latin America and Asian markets.
The arrival of the pandemic dealt a brutal blow. As conveyed by Walsh’s attorneys, “COVID-19 didn’t merely hamper his business; it annihilated it”. He succumbed to panic.
Between March 2020 and January 2021, Walsh lodged more than 30 deceptive applications for pandemic emergency help and was awarded $7.8 million, as per the Justice Department. According to federal prosecutors’ allegations, even if Walsh had been compliant, his businesses would only have been eligible for a “minor fraction” of those loans.
In their court documents, prosecutors labeled his crimes as “egregious” and “driven by greed”. They pointed to his acquisition of Sweetheart Island, undisclosed “luxury goods”, Texas oil fields and a partial payment for a lavish residence in the upscale Jackson Hole, Wyoming.
Contrary to prosecutors’ allegations, Walsh’s attorneys contended in a court submission that his motivation wasn’t greed but desperation. They wrote that Walsh staggered under the immense pressure of salvaging his businesses and providing for his large family. He is a father to 11 children.
U.S. District Judge Allen C. Winsor wasn’t convinced by this explanation.
Winsor asserted at Walsh’s sentencing in January that this was far from a “lone lapse in judgement”, before sending him off for a prison term stretching over five years.
In agreeing to his plea deal, Walsh pledged to return the stolen $7.8 million and dispose of Sweetheart Island, which was among his initial purchases, financed through the embezzled taxpayer money, according to court documents.
Prosecutors alleged that Walsh directed $90,000 of that sum to aid in purchasing the $116,000 island. Florida’s property records indicate that the island was later sold off for $200,000 towards the end of June.
Walsh’s attorneys maintained that he hadn’t procured the island envisioning it as a “tropical entertainment haven” but as an investment in real estate. They didn’t bother elaborating on how he intended to convert the remote land into a profitable venture.
Several similar uninhabited tiny islands dot the Withlacoochee Bay. The only clue of any prior attempts at developing Sweetheart Island are some humble, weathered cinder block walls extending into the water. A “For Sale” sign, beaten by the elements and devoid of leaves, hung on a tree, appearing almost as a makeshift scarecrow signalling intruders to steer clear.
