A hedge fund manager charged with 33 counts of grand larceny and fraud for allegedly stealing millions of dollars in COVID-19 Paycheck Protection Program loans was ordered held on $500,000 bail at his Manhattan Supreme Court arraignment Wednesday.
Gregory Blotnick, 33, allegedly ripped off $4.6 million from the PPP program by filing multiple fraudulent loan applications for his New York groups, Brattle Street Capital LLC and BSC Management LLC over a one year period, state prosecutors said.
He’s accused of lying about the number of employees at his companies and claiming he needed the funds to cover payroll. Instead, he transferred the money to a brokerage account — and lost millions in the stock market, prosecutors alleged.
Blotnick, a resident of West Palm Beach, Florida, pleaded not guilty Wednesday, and was held on $500,000 cash bail, which his lawyers claim he cannot afford.
Prosecutors argued for a larger bail, claiming Blotnick is a flight risk that tried to leave the country in April.
Defense lawyers argued the money manager is broke and said he just completed a substance abuse treatment program and is now taking medication for bipolar disorder, as they argued for leniency.
Blotnick faces eight-and-a-half to 25 years in prison if convicted.
“Mr. Blotnick repeatedly took advantage of a system intended to provide lifelines to small businesses and their employees during the height of the COVID-19 pandemic,” District Attorney Cy Vance wrote in a press release when Blotnick was charged in April.
The financier is also facing federal charges of stealing nearly $4 million from the program by falsifying loan applications for three other businesses.
Blotnick squandered that ill-gotten cash to buy more than $3 million in losing stock trades, federal prosecutors said.
“The Justice Department and its law enforcement partners remain committed to aggressively pursuing and holding accountable fraudsters who treat COVID-19 relief programs like a personal piggy bank,” Acting US Attorney Rachael Honig for the District of New Jersey wrote in May.
Blotnick’s lawyer, Jason Berland, said Blotnick is expected to plead guilty to the federal charges next week. He’s due back in Manhattan criminal court on October 19.
Neither Blotnick nor Berland could be reached for comment by The Post Wednesday.