BOSTON — A Marblehead man who presented himself as an Orthodox Christian monk, and his attorney, a Marblehead woman, were arrested Thursday for their roles in an alleged scheme to fraudulently obtain Coronavirus Aid, Relief, and Economic Security (CARES) Act funds for several purported non-profit religious organizations and related businesses they controlled, the U.S. Attorney’s for Massachusetts announced Thursday.
Brian Andrew Bushell, 47, and Tracey M.A. Stockton, 64, face charges of conspiracy to commit wire fraud and unlawful monetary transactions for their roles in the multi-million dollar scheme, where they allegedly overstated the operational expenses of the organizations Bushell controlled in order to receive inflated Economic Injury Disaster Loans, which they then used to fund a lavish lifestyle, U.S. Attorney Rachael S. Rollins’s office said in a statement.
At their arraignment in Federal Court in Boston, the pair were released after each posting a $10,000 bond on the conditions that they report to probation, surrender their passports, not apply for any loans without the approval of the court, not register or facilitate the registration of any businesses without the approval of the court, not encumber any real estate without the approval of the court, and report any contact with law enforcement within 24 hours. Bushell, a dual citizen of the U.S. and Greece, was also ordered not to obtain any other travel documents while the case is pending.
Neither Bushell nor Stockton entered a plea during their arraignment.
Bushell controlled several Marblehead-based organizations, including St. Paul’s Foundation; a “monastic house” known as Shrine of St. Nicholas the Wonderworker, Patron of Sailors, Brewers & Repentant Thieves; a purported residence for clergy known as the Annunciation House; Marblehead Brewing Co., a monastic brewery; and Marblehead Salt Co., a craft saltern.
Stockton served as general counsel and authorized representative of these organizations and she and Bushell lived together at the Annunciation House, the statement said.
“We allege that these two individuals engaged in brazen, criminal behavior that took advantage of our government’s efforts to rescue organizations—both for-profit and non-profit— by assisting with specific, legitimate expenses during the global pandemic,” said Rollins in a statement. “Pandemic relief funds are not ‘free money’ – they are a lifeline designed to help business owners and non-profit leaders experiencing real economic hardship. … Hard-working people deserve these funds.”
When CARES act funds became available in April 2020, Bushell, with Stockton’s assistance, began submitting numerous applications to the Small Business Administration to receive loans for the organizations he controlled. In doing so, they allegedly ”vastly overstated the organizations’ 2019 operational expenses” in order to grow the size of the loans they might receive, according to the statement. Bushell and Stockton allegedly submitted false income statements and other fraudulent documents that fabricated the organizations’ revenues and expenses.
As a result of the scheme, Bushell and Stockton were able to receive $3.5 million for St. Paul’s, St. Nicholas, Annunciation House, and Marblehead Salt Co., the statement said.
Bushell and Stockton also allegedly submitted numerous applications for Paycheck Protection Program funds for Bushell’s organizations, prosecutors said in a statement. In the documents they filed for the applications, and in correspondence with PPP lenders, Bushell and Stockton allegedly inflated the number of employees and the amount of payroll expenses that each borrower organization had.
“For instance, with respect to several applications, it is alleged that Bushell and Stockton listed, as employees, at least eight individuals who were never employed by any of Bushell’s organizations,” the statement said.
As a result of the allegedly fraudulent applications, Bushell and Stockton were able to receive an additional $146,608 in PPP funds.
Upon receiving those funds, Bushell and Stockton allegedly used them to pursue an expensive lifestyle, spending over $1 million of the CARES Act funds for extensive renovations to two Marblehead properties they planned to develop into a monastic complex that featured a chapel, brewery, and beer garden. The pair also allegedly spent approximately $90,000 in audio-video system equipment and nearly $40,000 in antique furniture.
The pair also allegedly used the funds to buy a new residential property and various fixtures, furnishings, and equipment for their various properties. Bushell, who claimed he had taken a vow of poverty, allegedly used the funds to buy over $40,000 in Swiss watches, a nearly $7,000 Goyard designer handbag for Stockton, $2,400 on items from Hermès, and other luxury goods, the statement said.
If convicted of both charges, Bushell and Stockton would face up to 30 years in prison, as the charge of conspiracy to commit wire fraud carries a maximum sentence of 20 years and the charge of conspiracy to commit unlawful monetary transactions carries a maximum sentence of 10 years in prison.
“We believe they clearly knew that what they were doing was wrong, but they did it anyway, spending tens of thousands of dollars on exclusive memberships, expensive wine, property, renovations, and even a $40,000 wristwatch,” said Joseph R. Bonavolonta, special agent in charge of the Federal Bureau of Investigation, Boston Division, in a statement. “Their alleged greed is an affront to every hard-working taxpayer, and during these challenging times where scammers are doing everything they can to defraud people of their hard-earned money, the FBI is doing everything we can to make sure they don’t succeed.”
At 124 Pleasant St., the site of Marblehead Brewing Co., roughly eight to 10 FBI agents could be seen removing items from the building. Two black unmarked cars were parked outside the property, and a large box truck sat in the driveway.
Donna Murphy, 67, who lives nearby the brewery, described Bushell as a “bully.” Murphy said she saw FBI agents in the area around 6:45 a.m. Thursday morning.
“He’s really a bully,” she said. “I’m smiling.”
Item Creative Director Spenser Hasak contributed to this report. Charlie McKenna can be reached at [email protected].
