D.A. Vance: Two Indicted for Stealing $1.3M from Small Business Owners during COVID-19 Pandemic

December 3, 2021

Defendants Collected Money In Fake Loan Scheme, Spent it On Luxury Travel, Fine Dining

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictment of KELLY FONTAINE, 56, and ANTHONY BURGES, a/k/a ANTHONY SASSO, 53, for stealing more than $1.3 million from small businesses across the country through a fraudulent loan scheme. As alleged, FONTAINE and BURGES targeted at least 40 small business owners, most of whom were experiencing financial hardship due to the COVID-19 pandemic, and offered them fake loans and lines of credit while pocketing upfront fees and related costs. The defendants are charged in a New York State Supreme Court indictment with Scheme to Defraud in the First Degree, two counts of Grand Larceny in the Second Degree, and Grand Larceny in the Third Degree.[1]

"At the height of the COVID-19 pandemic, these scammers preyed on those who needed aid the most - robbing dozens of small business owners of cash they desperately needed to stay afloat, as alleged in the indictment." said District Attorney Vance. "Small businesses from Queens all the way to Minnesota were forced to close, reduce capacity, or declare bankruptcy as a result of this scheme. Unfortunately, the widespread financial pressures caused by COVID-19 provided a ripe market for fraud of all forms, from PPP and unemployment scams to fake vaccination card conspiracies. If you are aware of any such schemes, please call my Office's Financial Frauds Bureau at 212-335-8900."

Beginning in February 2020, FONTAINE posed as the principal of Twenty Four Seven Funding LLC, a shell company, and emailed and called small business owners to ask if they needed commercial loans to supplement their business capital, manage costs, or reduce their payments on existing debt. FONTAINE targeted companies in need of financing by purchasing the contact information of businesses in debt from merchant cash advances. FONTAINE connected interested small business owners to BURGES, who posed as the principal of another shell company, Artisan Capital Partners, and told them that he managed an exclusive club of private investors that could provide funding quickly without outside approval. BURGES pretended to negotiate the loan amount and terms, which culminated with signed letters of intent, commitment letters, and financing agreements. In some instances, BURGES provided the victims forged a "Proof of Funding" bank statement which showed balances ranging from $3 million to $33 million, when, in fact, the bank account never had a balance greater than $100.

During negotiations, BURGES required the small business owners to pay upfront fees, including commitment fees, due diligence fees, and attorney's fees. The fees were wired from the victims' accounts into bank accounts in BURGES' control, and then transferred to the defendants' personal accounts. The defendants spent the stolen money on accommodations and restaurants in the Hamptons and Connecticut, fine dining and cigars in New York City and New Jersey, Uber and Lyft rides, and purchases at high-end retailers such as Brooks Brothers, Tourneau, Paul Stuart, and Brunello Cucinelli.

As time passed, BURGES offered the small business owners an array of excuses, and in several instances, sought additional fees to finalize the purported loans. Ultimately, none of the promised funding was ever delivered, and the small business owners were not refunded for the upfront fees that they incurred. In total, the defendants stole nearly $1.3 million dollars from at least 40 small businesses, including: a preschool and a taxi company in New York City, an environmental consulting firm in Massachusetts, a health care services business in Texas, a staffing firm in North Carolina, a gaming and collectibles business in Minnesota, and a clean water bottling company in Georgia. Several of the small businesses were forced to close, reduce capacity, or declare bankruptcy. One of the small business owners - who lost more than $800,000 in the scheme - had his delivery truck repossessed.

The D.A.'s Office was alerted to the scheme when one of the victims contacted the Office's Financial Frauds Hotline at 212-335-8900.

Assistant D.A.s Chike Ibeabuchi and Luis Morales are handling the prosecution of the case under the supervision of Assistant D.A.s Hope Korenstein (Deputy Chief of the Financial Frauds Bureau) and Kofi Sansculotte (Chief of the Financial Frauds Bureau), and Executive Assistant D.A. Christopher Conroy (Chief of the Investigation Division). The following people provided assistance with the investigation: the Financial Fraud Bureau's Gensiana Cicero (Investigative Analyst), Isabela Newsom (Investigative Analyst), and Netanya Pierrot (Discovery Analyst); the Litigation Support Unit's Olivia Savell (Privilege Review Data Specialist) and Assistant D.A. Shannon Goldberg (Unit Chief); the Forensic Accounting & Financial Investigations Bureau's Kristina Manganaro (Analyst), Hermeet Kaur (Senior Analyst), Irene Serrapica (Principal Deputy Bureau Chief), and Robert Demarest (Bureau Chief); and the Investigation Bureau's Alexandra Cinque (Rackets Investigator), Jacob Diamond (Rackets Investigator), Mathew Dato (Senior Rackets Investigator), Anthony Santoro (Senior Rackets Investigator), and Jeremy Rosenberg (Supervising Rackets Investigator).

Defendant Information

ANTHONY BURGES, a/k/a ANTHONY SASSO

New York, NY

Charges:

• Grand Larceny in the Second Degree, a class C felony, two counts
• Grand Larceny in the Third Degree, a class D felony, one count
• Scheme to Defraud in the First Degree, a class E felony, one count

KELLY FONTAINE

Newark, NJ

Charges:

• Grand Larceny in the Second Degree, a class C felony, two counts
• Grand Larceny in the Third Degree, a class D felony, one count
• Scheme to Defraud in the First Degree, a class E felony, one count

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