Update: Charges dropped.
A man the feds call "a purported Orthodox Christian monk" and his live-in lawyer were arrested today on charges they defrauded the government out of $3.6 million in Covid relief funds by filing bogus applications filled with lies about how many employees they had to obtain money that they then used to upgrade the properties they already owned and to buy a new one, rather than using the money to keep employing workers they did not, in fact, have.
Brian Andrew Bushell, 47, and Tracey M.A. Stockton, 64, were charged with conspiracy to commit wire fraud and unlawful monetary transactions, the US Attorney's office reports.
Bushell runs several non-profits in Marblehead, focused on the Shrine of St. Nicholas, named for a man venerated by the Orthodox not as a Christmas gift giver, but as the patron saint of sailors, brewers and "repentant thieves, which for those of us with a Marblehead connection, reminds us of General Glover’s days as a privateer. "
The feds accuse Bushell and Stockton of having plenty to beg for forgiveness of, related to numerous applications then made after the onset of the pandemic to obtain funds from the SBA's Economic Injury Disaster Loan program, intended to keep small companies and non-profits operating, and the Paycheck Protection Program set up by the government to help small concerns pay their workers during the pandemic. According to an affidavit by an FBI agent on the case, the two "fabricated average monthly payroll expenses of their affiliated entities and claimed employees that the borrowing entities did not actually employ."
Cumulatively, had the payroll expenses that these applications claimed been accurate, the six organizations would have paid payroll expenses of at least $3,736,132 combined, and Bushell and Stockton each would have earned annual salaries of at least $500,000.
Contrary to their claimed annual payroll of $3.7 million dollars, a review of bank records for these six entities identified no payroll expenses paid in 2019. The Targets began issuing paychecks on or about June 8, 2020, when Stockton signed five checks for Bushell for $8,333 each, and Bushell signed three checks for Stockton for $6,020 each, all from St. Paul's. These checks purported to be for pay periods between January and May 2020. Stockton subsequently signed another 33 paychecks for Bushell from St. Paul's, St. Nicholas, and Annunciation House, for a total of $341,666 through June 2021, and Bushell signed another four paychecks from St. Paul's for Stockton, for a total of $34,824 through August 2020. Each of the checks issued to Bushell was deposited into a Marblehead Bank account for St. Paul's, while each check for Stockton was deposited into a personal bank account for Stockton.
Based on the investigation to date and my training and experience, I believe the Targets wrote these payroll checks for the sole purpose of documenting sham payroll expenses in support of PPP loan forgiveness applications. The Targets issued no paychecks to other individuals during this period.
The affidavit states that as they were getting payments from EIDL and PPP, the two were using the money for items not allowed under the programs, including the $805,000 purchase of a house next to their property - allegedly to provide a place of shelter for Ukrainian and other refugees - and $50,000 to join the Centennial Society at the Economic Club of New York; $40,200 for a 2011 Breguet Reveil du Tsar Boutique Edition wrist watch; Approximately $42,000 for a membership to the Union League Club in New York; $26,713.39 for a Breguet Table Clock from circa 1791; $10,904 for 41 cases of wine from Gruet Winery; $6,805 on a monogrammed luxury handbag from Maison Goyard for Stockton; and $2,400 on items from Hermès. Also:
Bushell applied for an American Express credit card in February 2022 under the name St. Paul's. On the application, Bushell listed St. Paul's annual revenue as $10 million and his annual income as $900,000. The most recent statements reflects charges of approximately $10,000 in Apple products and thousands of dollars on travel-related charges, including charges for hotels and dining. Between March 2022 and July 2022, Bushell paid over $74,500 to American Express from a St Paul's bank account. The American Express balance in August 2022 was over $42,000.
The affidavit continues that the deception continued through 2022, as Bushnell applied for a loan to help finance the purchase of the house:
Compilation statements for St. Paul's that Bushell submitted to Greylock purported to show donations and charitable gifts of $1,515,214 in 2022 and $1,332,599 in 2021, as well as total payroll expenses of $801,667 in 2022 and $544,343 in 2021. Based on my review of bank records, I have determined that St. Paul's received donations and charitable gifts of, at most, approximately $237,000 in 2021 and 2022 combined. Further, I observed no bank account activity reflecting aid to refugees in recent years' statements.
The government says Bushnell may or may not be the Orthodox monk he claims to be. Bushnell says that starting in 2010, he spent seven or eight years on Mount Athos in Greece learning to become a monk - in part by learning to separate salt from seawater, before he was sent out to become "protos" or leader of an evangelical effort in the US, but:
I have reviewed encounter records from U.S. Customs and Border Protection ("CBP") for Bushell. CBP records reflect frequent travel to Europe beginning around 2010, including in December 2010; however, CBP records indicate that Bushell returned to the United States in January 2011 and spent little extended time outside of the United States following that trip.
On the St. Nicholas shrine Web site, after describing St. Nicholas, the shrine continues:
The shrine continues:
This patronage [of repentant thieves] also reminds us of the prayer of St. Dismas, the Good Thief. St. Dismas was aware of his own sin. He did not dispute it. He did not ask for mercy. But repenting he asked, “Jesus, remember me when you come into your kingdom.” And for St. Dismas, the gates to Paradise were opened. This is an important concept, that we have free will, not freedom from consequences, but nevertheless for those who beg for forgiveness salvation is still possible.