U.S. Attorney Files Civil Fraud Suit Against Network Of Companies For Fraudulently Obtaining COVID Relief Money

 

Suit Alleges That Corporate Group Improperly Obtained Over $13 Million in Paycheck Protection Program (“PPP”) Loans

United States Attorney for the Southern District of New York, Jamie McDonald, announced that the United States has filed a Complaint against MICHAEL SHABSELS, SIMAD HOLDINGS LLC, DAMIS HOLDINGS LLC, and 26 related entities (the “Shabsels Companies” and, collectively, the “Defendants”), alleging that the Defendants concealed their interrelationship from the Small Business Administration (“SBA”) in order to improperly obtain PPP funds.  The lawsuit seeks damages and civil penalties under the False Claims Act as well as a recovery of government funds under the common law. 

“Congress enacted the Paycheck Protection Program during a national crisis to help small businesses,” said U.S. Attorney Jamie McDonald.  “As alleged, the defendants repeatedly lied to the SBA to exploit this program and fund their sprawling network of companies at taxpayer expense, thereby depleting the funds for small businesses that needed the assistance. The civil process to recover taxpayer funds remains ongoing.”

The following allegations are based on the Complaint filed in White Plains federal court on August 24, 2026:

To promote the availability of PPP loans to the largest number of borrowers, the SBA limited businesses in a single corporate group to a maximum aggregate loan amount of $4 million for second-draw PPP loans (the “Corporate Group Rule”).  The Shabsels Companies were part of a large corporate group that was subject to the Corporate Group Rule’s cap of $4 million.  Indeed, the vast majority of the Shabsels Companies were directly majority-owned by a single company.  The Defendants, however, sought and obtained over $17 million in second-draw PPP loans for the Shabsels Companies, improperly obtaining over $13 million in PPP loans, all of which were forgiven, as follows:

Defendant	Camp Name	Loan and Forgiveness Amount
ACHIM OPERATINGCO LLC	Camp Achim, New York	$79,527.00
BAHS OPERATING INC CAMP	Camp Chen-A-Wanda, Pennsylvania	$1,072,529.00
BANNER OPERATINGCO LLC	Banner Day Camp, Illinois	$1,394,904.00
BELGRADE LAKES SUMMER CAMPS LLC	New England Golf and Tennis Camp, Maine	$167,415.00
BLUESTAR OPERATINGCO, LLC	Blue Star Camps, North Carolina	$1,425,091.00
CAMP MED-O-LARK, INC	Camp Med-O-Lark, Maine	$454,719.00
CLUB GETAWAY OPERATINGCO, LLC	Club Getaway, Connecticut	$592,039.00
COUNTRY ROADS OPERATINGCO, LLC	Country Roads Day Camp, New Jersey	$1,134,437.50
DAMIS HOLDINGS, LLC	(not a camp at all, but a holding company)	$179,730.00
EAGLE'S LANDING DAY CAMP LLC	Eagle’s Landing, New Jersey	$591,804.00
GREEN LANE OPERATINGCO, LLC	Camp Green Lane, Pennsylvania	$175,836.00
IAFA OPERATING CO, LLC	Indian Acres and Forest Acres, Maine	$469,105.00
KIWI OPERATINGCO, LLC	Kiwi Country Day Camp, New York	$768,410.00
LAVCO LLC	Camp Lavi, Pennsylvania	$689,132.00
MAINE WEKEELA CO, LLC	Camp Wekeela, Maine	$424,343.00
MALKA OPERATINGCO LLC	Camp Malka, New York	$163,628.00
MEADOWBROOK OPERATINGCO, LLC	Meadowbrook Country Day Camp, New Jersey	$1,380,766.00
MESORAHCO, LLC	Camp Mesorah, New York	$469,829.00
MOGENAVCO LLC	Camp Mogen Av, New York	$1,091,353.62
MOHAWKCAMPCO LLC	Mohawk Day Camp, New York	$2,000,000.00
POLAND CAMPCO LLC	Camp North Star, Maine	$224,350.00
RDM CAMPS LLC	Camp Lokanda, New York	$719,446.00
SHAB OPERATING INC	Camp Echo, New York	$326,893.00
STONY CREEK OPERATING CO, LLC	1000 Acres Ranch, New York	$142,015.00
SUMMIT CAMP, LLC	Summit Camp, Pennsylvania	$613,833.50
WAUKEELA OPERATINGCO LLC	Camp Waukeela, New Hampshire	$268,170.00
WM CAMP LLC	Windsor Mountain Summer Camp, New Hampshire	$399,273.00

SHABSELS signed numerous second-draw PPP applications on behalf of the Shabsels Companies.  On over 20 occasions, SHABSELS falsely answered “no” to the following question in PPP applications submitted on behalf of the Shabsels Companies: “[i]s the Applicant or any owner of the Applicant an owner of any other business, or have common management (including a management agreement) with any other business.”  In fact, SHABSELS and SIMAD HOLDINGS, LLC were owners of the applicants for PPP loans and also owners of various other businesses.

The Defendants have all filed for bankruptcy in the District of New Jersey.  In this action, the United States seeks to determine the extent of the Defendants’ liability and will then coordinate any recovery for the taxpayers in conjunction with the bankruptcy proceedings.

The Government intervened in a whistleblower lawsuit before U.S. District Judge Kenneth M. Karas that had previously been filed under seal pursuant to the False Claims Act, and which was unsealed on August 17, 2026. 

Mr. McDonald thanked the SBA for its assistance with the case.

This case is being handled by the Office’s Civil Frauds Unit.

Governor Hochul Announces Start of Construction on the Redevelopment of the N.D. Peters Public Housing Complex in Utica

Parkway Gardens Project Replaces Three Utica Municipal Housing Authority Buildings to Create 71 Modern, Sustainable Apartments

Governor Kathy Hochul announced the start of construction on Parkway Gardens, a $33 million, 71-unit public housing redevelopment in the city of Utica. The project will replace three N.D. Peters Public Housing complex buildings with a new, modern building that enhances the surrounding neighborhood. Under Governor Hochul’s leadership, New York State Homes and Community Renewal (HCR) has created or preserved more than 1,400 affordable homes in Oneida County. Parkway Gardens continues this effort and is part of Governor Hochul’s $25 billion five-year Housing Plan, which is on track to create or preserve 100,000 affordable homes statewide.

“Significant investments in housing, healthcare and other industries continue to strengthen Utica and lay the groundwork for its future,” Governor Hochul said. “Parkway Gardens is another example of how we are investing in the future of Utica and making it a place where people want to live and raise their families. This adds to our commitment to providing safe, affordable and sustainable housing for all New Yorkers.”

Parkway Gardens is developed by Vecino and People First, formerly the Utica Municipal Housing Authority. The project will include the demolition of three outdated buildings containing 28 apartments within the Housing Authority’s N.D. Peters complex, which was built in the 1960s. The demolished buildings will be replaced with a new three-story building containing 71 apartments. All tenants of the demolished N.D. Peters buildings have been relocated to other People First developments and will be guaranteed new apartments in Parkway Gardens at no additional monthly cost.

The new apartments will be affordable to households earning up to 80 percent of the Area Median Income. There will be eight units to accommodate individuals with mobility disabilities and three units to accommodate residents with sensory disabilities. The all-electric building will feature Energy Star appliances, water-conserving plumbing, high-efficiency heating and air conditioning systems, and Energy Recovery Ventilators that improve air quality within each unit.

Parkway Gardens will provide a mix of one-, two-, three-, and four-bedroom units. The building is located near schools, public transportation to downtown Utica, Proctor Park, and Starch Factory Creek and its trail system. New pedestrian paths will connect grounds with the surrounding neighborhood and park system.

Financing for Parkway Gardens includes a mix of public and private sources, including Federal and State Low-Income Housing Tax Credits from HCR that are expected to generate more than $16.8 million in equity and $9.2 million in HCR subsidy. The city of Utica will provide $1 million from its HOME program and People First will provide $800,000. The project is also supported by $2 million from the Federal Home Loan Bank of New York’s Affordable Housing Program. There will be 28 units of project-based rental assistance which will be provided by People First.

ICE Lodges Detainer for Illegal Alien MS-13 Member Charged with Murder in Florida

 

This illegal alien entered the country under the Obama Administration

The United States Department of Homeland Security (DHS) released the following statement after U.S. Immigration and Customs Enforcement (ICE) lodged a detainer asking officials in Florida to not release a criminal illegal alien and MS-13 gang member charged with murder.

According to local reporting, the incident occurred on August 20. The suspect, Luis Eduardo Olla-Hernandez, a criminal illegal alien from El Salvador, allegedly lured a man named Devin Graves to his property and shot him multiple times. Olla-Hernandez then attempted to dispose of Graves’ body by burning it, and forced his own girlfriend at gunpoint to help him do so. After discovering partially-burned human remains on his property, the Leon County Sheriff’s Office arrested Olla-Hernandez on August 23 and charged him with first-degree murder.

Luis Eduardo Olla-Hernandez

Olla-Hernandez is a member of MS-13, which the Trump Administration has designated as a foreign terrorist organization. ICE lodged a detainer with the Leon County Jail the same day he was arrested.

“This criminal illegal alien and MS-13 terrorist has been charged with first-degree murder in Florida after shooting a man and burning his body," said DHS Secretary Markwayne Mullin. “If it weren’t for the open-border policies of the Obama Administration, he would not have been able to come into our country, and Devin Graves would still be alive. ICE will work with our partners in Florida to make sure this killer is never released back into our communities, and will instead be removed from our country once he faces justice.”

Olla-Hernandez illegally entered the United States through Texas in February 2016 under the Obama Administration. A Department of Justice (DOJ) Immigration Judge issued him a final order of removal on September 18, 2024.

DEP, NYC Parks and Prospect Park Alliance Complete $1.4 Million Infrastructure Improvement to Brooklyn’s Only Lake

 

New Valve Improves Stormwater Management as an Early Component of the Future Prospect Park Bluebelt, Boosts Water Conservation, and Protects New York Bay

The New York City Department of Environmental Protection (DEP), NYC Parks and the Prospect Park Alliance (PPA) announced the completion of a $1.4 million valve upgrade for Prospect Park Lake that provides improved control over water levels in the lake. The new valve will manage the amount of potable water that helps feed the lake to support a healthy ecosystem. It allows PPA greater operational control of the lake system during heavy rainstorms and will free up capacity of local sewers during storms, resulting in a reduction of overflows to Gravesend Bay and the Upper Bay by up to 12 million gallons a year. As one of the first infrastructure upgrades supporting the future Prospect Park Bluebelt and lakeshore restoration, the project lays critical groundwork for long‑term stormwater management and ecological improvements.

“Smart, targeted upgrades like this deliver real benefits for water conservation and climate resilience,” said DEP Commissioner Lisa F. Garcia. “By giving Prospect Park the ability to control lake inflows, we’re reducing potable water use, cutting sewer overflows, and strengthening the park’s ability to prepare for heavy rain.”

“This project is a great example of all the ways our public parks make New York City more livable, not just as beautiful places to connect with nature but also as natural infrastructure that improves quality of life for humans and wildlife alike,” said NYC Parks Commissioner Tricia Shimamura. “This underwater upgrade will pay off rain or shine, preventing sewer overflows during extreme weather and improving the health of the lake's ecosystem during sunny summer days. This is an exciting step in our work to bring a comprehensive Bluebelt system to Prospect Park, and we look forward to working with our partners to build our sustainable future here in Brooklyn's Backyard.”

In the summer months, when evaporation increases, the lake requires potable water to maintain stable levels that support circulation and oxygenation, provide adequate depth for fish and aquatic plants, and help limit unsightly and odorous algal blooms — all essential to sustaining the lake’s ecological health and appearance.

The project replaced an aging 8‑inch service line valve that supplies potable water to the lake and feeds the waterfall within Prospect Park’s watercourse. With the new valve fully functional, the park is expected to use only 200,000 gallons per day — conserving approximately 800,000 gallons per day.

Prospect Park Lake drains into the combined sewer system at the southeast corner of the park. PPA staff can now temporarily halt inflows as needed — especially ahead of heavy rain events — allowing for more precise management of lake levels and reducing unnecessary water from entering and overwhelming the area’s combined sewer system. This operational flexibility also eases pressure on the Owls Head Wastewater Resource Recovery Facility, which treats wastewater and stormwater from nearly 13,000 acres of western Brooklyn.

DEP provided funding and project oversight, while NYC Parks procured and managed construction, supervision, and design services. PPA will support NYC Parks with ongoing operation and maintenance.

This valve upgrade is an early component of the broader Prospect Park Bluebelt initiative, for which DEP has allocated up to $50 million. Planned improvements include new rain gardens and ponds that will slow and filter stormwater while also capturing and redirecting floodwaters. The investment complements Prospect Park Alliance’s $20 million lakeshore restoration plan, which will reconstruct the shoreline of Brooklyn’s only lake to improve environmental resiliency and enhance the visitor experience.

Together, these efforts will create a coordinated approach to managing stormwater, strengthening ecological health, and protecting the park, the Prospect Park Zoo, and surrounding neighborhoods from extreme weather driven by climate change.

About the NYC Department of Environmental Protection

DEP manages New York City’s water supply, providing approximately 1 billion gallons of high-quality drinking water each day to nearly 10 million residents, including 8.5 million in New York City. The water is delivered from a watershed that extends more than 125 miles from the city, comprising 19 reservoirs and three controlled lakes. Approximately 7,000 miles of water mains, tunnels and aqueducts bring water to homes and businesses throughout the five boroughs, and 7,500 miles of sewer lines and 96 pump stations take wastewater to 14 in-city treatment plants. DEP also protects the health and safety of New Yorkers by enforcing the Air and Noise Codes and asbestos rules. For more information, visit nyc.gov/dep, like us on Facebook, or follow us on X and Instagram.

About NYC Parks

NYC Parks is the steward of more than 30,000 acres of land — 14 percent of New York City — including more than 5,000 individual properties ranging from Coney Island Beach and Central Park to community gardens and Greenstreets. We operate more than 800 athletic fields and nearly 1,000 playgrounds, 1,800 basketball courts, 550 tennis courts, 66 public pools, 52 recreational facilities, 15 nature centers, 14 golf courses, and 14 miles of beaches. We care for 1,200 monuments and 23 historic house museums. We look after 666,000 street trees, and five million more in parks. We are New York City's principal providers of recreational and athletic facilities and programs. We are home to free concerts, world-class sports events, and cultural festivals.