U.S. District Judge Philip Simon told Kathelia Hopkins that he tried to give federal defendants a break nearly every day.
In her case – after defrauding the U.S. Small Business Administration of over $400,000 in COVID-19 relief money – he found he couldn’t.
“You preyed on the system,” he said.
Hopkins, 48, a.k.a Kathelia Clay, of Portage, signed a plea agreement in the U.S. District Court in Hammond in June for wire fraud.
Court documents accused Hopkins, a one-time respiratory therapist, of applying to the SBA’s Economic Injury Disaster Loan program for herself, and over 20 family and friends, saying they all had fictitious businesses.
Assistant U.S. Attorney Thomas McGrath said she took a cut of their money. Overall, federal investigators estimated she took around $185,000. He asked for 21 months, arguing the government needed to make an example of her.
Prosecutors cited twin social media posts from June 2021.
“I’m getting SBA loan approvals,” she wrote. “If interested, inbox me, serious ppl (people) only.”
“What an awesome day!! I’m here in the 6month (sic) OF THE YEAR…and already NET, NOT GROSS $100K!! THANK YOU JESUS,” she wrote in the second post.
Defense lawyer Justin Camper said in the summer of 2020, Hopkins was going through a difficult period in her life. She used $20,000 to pay a lawyer to help her incarcerated son get out of prison sooner. She also wanted to help her struggling loved ones get extra money.
It was an “opportunity” and she “took advantage of it,” he said.
Was anyone else indicted, Simon later asked. McGrath said they opted to focus on the ringleader rather than hand the others a felony record.
In addressing the court, Hopkins said her legal troubles, in an otherwise law-abiding life, were a “horrific situation.” When she took the money, she was in an “exhausted” and “dark” place and regretted her actions.
McGrath noted in court that Hopkins tried to take $1.2 million in government funds, but ended up effectively stealing over $400,000.
Simon said he agreed there had to be a “real consequence.”
On one application, Hopkins listed her business, Deep Blue Sea, LLC., which was only a registered business name at the time. Her restaurant – Deep Blue Seafood in Hobart – opened later.
“This wasn’t the way to fund it,” Simon told her.
Hopkins will serve one year on supervised release after prison. She is also ordered to repay $424,000 to the SBA.
mcolias@post-trib.com
