False Pandemic Loan Claims
The scandal deepened during the COVID-19 pandemic, when Katz allegedly secured $179,000 in federal relief loans through programs meant to keep small businesses afloat.
Investigators say Katz falsely certified that he was not involved in criminal activity when applying for the funds, only to divert part of the money into his off-the-books compensation scheme — a move prosecutors likened to “robbing the Treasury during a crisis.”
The Plea Deal and Penalties
Under a plea agreement filed in Massachusetts federal court, Katz will plead guilty to:
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Two counts of conspiracy to defraud the U.S. government, and
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One count of loan fraud.
Federal prosecutors are seeking a sentence at the low end of the guidelines — 33 to 41 months in prison — followed by supervised release. Katz must also pay over $1 million in restitution, including:
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$751,683 to the IRS,
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$83,422 to the Commonwealth of Massachusetts, and
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$179,000 to the Small Business Administration for the COVID relief loans.
Attorneys Stay Silent as Case Moves Forward
Katz’s attorney, William A. Korman of Rudolph Friedmann LLP, declined to comment on Tuesday. The U.S. Attorney’s Office also did not issue a statement beyond court filings.
The government’s case is being handled by Assistant U.S. Attorney Kriss Basil for the District of Massachusetts.
