Albany woman’s family members agree to pay back $305,000 in fraudulent COVID loans

Several family members of an Albany woman convicted of COVID pandemic relief fraud recently agreed to repay the government about $305,000 that was fraudulently obtained.

The civil settlements are related to the prosecution of Debra Hackstadt, who was sentenced on Nov. 8 to 16 months in prison for fraudulently obtaining 32 government-backed loans meant for businesses struggling with the financial effects of the coronavirus pandemic, according to a news release from the U.S. Attorney’s Office.

Two of the fraudulently obtained loans were made to Albany resident Danielle Hackstadt, Debra’s daughter. Danielle Hackstadt has agreed to pay $114,816 under the False Claims Act for fraudulently obtaining, with her mother’s assistance, a $42,500 Economic Injury Disaster Loan (EIDL), which was issued by the U.S. Small Business Administration and a $14,908 loan under the Paycheck Protection Program (PPP).

In her July 2020 EIDL application, Danielle Hackstadt was listed as the sole proprietor of a “health services” company with gross revenue of $85,000.  And in her August 2020 PPP loan application, Danielle Hackstadt was listed as the sole proprietor of a “cleaning company” with gross receipts of $82,547.  She has admitted that, in July and August 2020, she was an employee of an insurance company and had no sole proprietorship.  She further admitted that she knew that her mother was applying for the PPP loan and EIDL in her name; she personally received the loaned funds, knowing they came from COVID-relief programs intended to benefit struggling businesses; and she spent the loaned funds for her personal benefit.

In a separate matter, in February 2023, the U.S. Attorney’s Office filed a lawsuit seeking the civil forfeiture of a lakefront residence and property off Great Sacandaga Lake in Saratoga County, New York, alleging that a portion of the property had been purchased with pandemic relief funds that Debra Hackstadt fraudulently obtained and then transferred to family members. 

In June 2023, the government and Albany residents Gerald and Traci Hackstadt, Debra’s son and daughter-in-law, entered into a settlement agreement in which the Hackstadts agreed to pay $190,000 to satisfy the claim. The payment has been made.

United States Attorney Carla Freedman stated: “Debra Hackstadt showered ill-gotten pandemic relief funds upon her family members. These settlements prove that her crimes did not pay, and that we will use every tool at our disposal to follow the money and recover ill-gotten gains.”