Glen Cove doctor commits $3.7 million Covid loan fraud


A Glen Cove medical doctor was sentenced to four years and three months in prison by U.S. District Judge Gary Brown on Friday for fraudulently obtaining approximately $3.7 million dollars in Covid-19 pandemic relief loans, in Central Islip federal court, according to the U.S. Attorney Office for the Eastern District of New York. The defendant was ordered to pay $3.5 million in restitution.

“Today’s sentence demonstrates there are consequences for those who treat vital government programs as cash give-a-ways and shamefully seek to profit from an unprecedented public health crisis,” Breon Peace, United States Attorney for the Eastern District of New York, stated.  

During the coronavirus pandemic from March 2020 to July 2020, Dr. Konstantinos Zarkadas, 48, used false information to apply and receive at least 11 Paycheck Protection Program and Covid-19 Economic Injury Disaster Loan Program.  Zarkadas laundered the money through various bank accounts, then used the funds for luxurious personal purchases.

Glen Cove dermatologist Dr. Eve Lupenko, of Greenberg Cosmetic Surgery and a former Glen Cove City Councilwoman, was outraged after hearing the news. “It’s absolutely abhorrent that a doctor would use the career,” Lupenko said. “Whereby most physicians practice the adage: ‘First, do no harm,’ to take advantage of what may be the lowest point of the United States since 9/11.”

In July 2020, Zarkadas used about $195,000 in PPP funds to finance the down payment on a $1.75 million yacht, reported New York’s Eastern District U.S. Attorney Office. He concealed the purchase by making the check payable to a family member who was not the primary beneficiary of the funds and in the check’s memo line, Zarkadas falsely specified that the money was “repayment for payroll.” He also withdrew thousands of dollars of loan proceeds in cash to satisfy more than $1 million in judgments against him to lease luxury vehicles and purchase several Rolex and Cartier watches.

“I’m a dermatologist, and every day I walk into my exam rooms, and the first thing I say after introducing myself is, ‘How can I help you?’” Lupenko said. “That’s what I do all day, every day, in my business life and my personal life, find ways to help and take care of others; not take advantage of others.”

As part of the Coronavirus Aid, Relief, and Economic Security Act, PPP and EIDLP were created to provide emergency financial aid to small businesses economically struggling because of the pandemic. Through PPP, small businesses were able to receive unsecured loans and loan forgiveness for spending on predetermined expenses, including interest on mortgages, rent, utilities, and at least 60 percent on payroll costs.

As the owner of Passport Health Travel Medicine in Roslyn Heights and Manhattan, Lupenko recalled how meticulous her business was in identifying the terms of the PPP loan and turning in all the paperwork to strictly adhere to the policies.

“The pandemic caused so much illness, mental health issues, death, loss of jobs and failure of businesses,” Lupenko said. “And while so many other people found the time and strength to help others who were in need, like other Glen Cove and Long Island organizations, including my Do Good To Feel Good program, this physician is accused of trying to help only himself.”

EIDLP provided low-interest financing for small businesses, renters and homeowners. Small businesses, that were in low-income communities, could show 30 percent revenue reduction, or had less than 300 employees, were able to receive up to $10,000 within three days of applying for an EIDL Advance. It did not have to be repaid.

Zarkadas pleaded guilty in November 2021 to disaster relief and wire fraud. In compliance with the plea agreement, he forfeited $200,000 and four luxury watches. Assistant United States Attorney Anthony Bagnuola oversaw the prosecution.

“This office will vigorously prosecute and bring to justice medical professionals like the defendant and other fraudsters who are driven by greed to maintain a lavish lifestyle at the expense of small businesses in legitimate need of Covid-19 emergency assistance,” Peace said.

“My job is to help others,” Lupenko said. “My job is not to help myself and that’s what the doctor is being accused of and that’s what I think is just so overwhelmingly wrong on so many different levels.”