Philadelphia Man Pleads Guilty to Defrauding Pandemic Relief Programs, Local Union Chapter

PHILADELPHIA - United States Attorney David Metcalf announced that Tracy Hardy, 52, of Philadelphia, Pennsylvania, entered a plea of guilty before United States District Judge Harvey Bartle III on Thursday on four counts of wire fraud and one count of making a false claim upon the United States.

The defendant was charged with those offenses by information, arising from two separate schemes - one to obtain disaster-related loans to which he was not entitled, and another to defraud a union through inflated and falsified bids for a construction project.

As detailed in court filings and admitted to by the defendant, from about May 2020 to May 2022, Hardy participated in a scheme to defraud the Small Business Administration (SBA) and multiple SBA-approved lenders participating in the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program, established as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in March 2020.

Hardy, the owner of several Philadelphia-based businesses, including Lou & Choo Enterprises, Inc., Hardy & Hardy Holdings, LLC, and Monroe Press, Inc., began working with Person #1, who helped individuals and businesses obtain disaster-related loans with fraudulent financial information. Hardy provided Person #1 with background and financial information related to his companies, and Person #1 prepared and submitted to the lenders the loan applications, falsely inflating financial figures relating to the operations of the companies applying for the loans and drafting false documents to support the inflated figures.

As a result, Hardy obtained more than $2 million in pandemic relief funds by means of materially false and fraudulent pretenses, representations, and promises, including: (a) by making false statements about the wages paid to employees of his businesses, the number of employees working for his businesses, the gross revenues of the businesses, the ownership of his businesses, and the intended use of the PPP loan proceeds; and (b) by providing false documentation, such as false tax documents and payroll summaries to support the loan applications.

As further detailed in court filings, from about January 2019 to June 2019, Hardy also participated in a scheme to defraud District 1199C, a local chapter of the National Union of Hospital and Healthcare Employees, which represented thousands of healthcare workers throughout the greater Philadelphia area.

In early 2019, District 1199C was seeking a construction company to renovate the bar area inside its union hall, located on the 1300 block of Locust Street in Philadelphia.

In addition to companies referenced above, Hardy was also the co-owner and operator of a construction company, Manayunk Construction & Development Corporation ("Manayunk Construction").

On or about January 30, 2019, Hardy sent an email to Person #5, an officer of District 1199C, attaching a bid on the letterhead of Manayunk Construction for renovating the bar in the union hall. The bid detailed the work to be performed for a total cost of $47,490.

In February 2019, the defendant then submitted to Person #5 a new and inflated bid from Manayunk Construction, and two additional bids that he falsely and fraudulently created, purporting to be from two independent companies. In fact, the bids from those two additional companies were created by Hardy and were entirely fabricated.

The second bid from Manayunk Construction was fraudulently inflated by at least $45,000, with the bid accounting for some additional work to be done, as well as generating tens of thousands of dollars in proceeds for the benefit of the defendant and Person #5. Hardy's bid from Manayunk Construction offered the lowest price of the three bids that he submitted.

In March 2019, the Executive Board of District 1199C voted to award the contract for the bar renovation project to Manayunk Construction, based on its low bid of $139,790. Manayunk Construction subsequently completed the bar renovation project and Hardy, through his company, was paid more than $150,000, an amount that was fraudulently inflated by at least $45,000.

The case was investigated by the FBI, with the Pennsylvania Office of Attorney General, and is being prosecuted by Assistant United States Attorney Louis D. Lappen.