A D.C. man was arrested and charged with stealing more than $2 million by inventing fake emotional support animal companies and using pandemic relief loans to buy a rowhouse and a yacht, the U.S. Attorney’s Office for the District of Columbia announced Tuesday.

“We will not tolerate exploitation of this national emergency for personal gain,” Acting U.S. Attorney Michael R. Sherwin said in a statement. “This Office will not allow fraudsters to steal taxpayer money intended to help small businesses that are currently struggling as a result of the COVID-19 pandemic.”

In a criminal complaint unsealed Tuesday, Kenneth Gaughan, 41, and an accomplice are accused of filing for 11 Paycheck Protection Program loans, all using the same business address and the same phone numbers, but filed under different business names and submitted to different banks. Gaughan is also accused of filing for 12 Economic Injury Disaster Loans (EIDLs) using those same business names and a few others. The fake company names include Anything Pawsable Incorporated, Service Animals of America Incorporated, and Therapy Pet, Inc.

A separate indictment unsealed Tuesday charged Gaughan with mail fraud, wire fraud, and money laundering in a scheme that used similar tactics to allegedly defraud the Archdiocese of Washington of more than $472,000, the U.S. Attorney’s Office said. In that case, Gaughan is accused of falsifying invoices for anti-bullying, crisis intervention, and professional development programs at the 95 schools overseen by the Archdiocese, between the years 2010 and 2018. Gaughan, who was at the time the Assistant Superintendent of the Diocese, allegedly created private mailboxes to receive the checks and deposited those checks into bank accounts he controlled.

Gaughan resigned from the Archdiocese amid fraud allegations in 2018. A federal judge dismissed criminal charges against Gaughan that year, ruling that he was improperly charged in Maryland.

The fragmented nature of the PPP loan application process seems to have provided Gaughan with an opportunity. PPP loans are an emergency program created through the federal CARES Act. Banks fund the PPP loans directly, with a guarantee from the Small Business Administration. The loans cover payroll, interest on mortgages, rent, and utilities. Applicants for PPP loans must certify that they have not and will not receive another loan through PPP, but Gaughan and an accomplice allegedly submitted applications to multiple banks using the same address, the same phone number, and the same roster of 25 fake employees and fake income, hours worked, and taxes withheld. They received seven PPP loans totaling about $2.18 million, according to an affidavit filed by IRS Special Agent Charles W. Sublett.

Gaughan also allegedly stole via EIDL, an SBA program that lends up to $10,000 to small businesses that temporarily lost revenue. The terms of EIDL are more flexible and the funds can be used to pay fixed debts, payroll, accounts payable, and other bills that would have been paid were it not for a disaster. These are issued directly from the US. Treasury. Gaughan applied for 12 EIDLs and received $3,000, according to Sublett, while an accomplice received nearly $20,000.

Far from bailing out struggling businesses, Gaughan used his loans to fund decadent purchases: the Department of Justice says Gaughan used his profits to buy a $1.3 million rowhouse, a $300,000 yacht, and a $46,000 sports sedan.

Paula Gwynn Grant, spokesperson for the Roman Catholic Archdiocese of Washington, told DCist/WAMU that the Archdiocese would help prosecutors in the case.

“We learned of the indictment and will fully cooperate in the prosecution of the scheme to defraud that was committed against the Archdiocese and, most recently, allegations of such a scheme against the funds created to support small businesses during these difficult times,” she wrote in an email.

Kyle Herrig, president of the D.C.-based watchdog group Accountable.US, said the case against Gaughan revealed shortcomings of the federal bailout programs.

“It shows you, one, that there was little vetting done on the front end when he applied for this loan,” Herrig said. “And two, these type of actors, people that have committed financial crimes in the past, saw the PPP program as an opportunity to commit financial crimes now.”

He said fraud has been reported nationwide, including a recent case where a Florida man bought a Lamborghini with ill-gotten PPP funding. Herrig called for an audit of the program to prevent criminals from using money aimed for struggling businesses.