Arthur Cornwall of West Babylon and Sean Williams of Valley Stream plead guilty to COVID-19 loan fraud

Two Long Island men who received $770,000 in COVID-19 relief loans pleaded guilty to wire fraud on Friday in Central Islip federal court, acknowledging that they lied on at least six applications for loans. 

Arthur Cornwall, 42, of West Babylon, and Sean Williams, 41, of Valley Stream, acknowledged that they misled the Small Business Administration and an unnamed financial institution by lying about the number of employees, revenue, payroll costs and intended use of loan proceeds.

Instead of using the funds for disaster relief, Cornwall and Williams diverted them for their personal use, including the discharge of personal credit card debt and the purchase of cryptocurrency, said Breon Peace, U.S. Attorney for the Eastern District of New York.

The two men are lifelong friends who grew up in Queens.

Attorney Karen Charrington, who represents both defendants, declined to comment after their appearance in Central Islip Friday afternoon.

Cornwall and Williams were charged by an information — a short document outlining the charges against them — and pleaded guilty before U.S. Magistrate Judge Steven I. Locke. Locke released Cornwall and Williams without requiring them to post bond. 

U.S. District Judge Joan Azrack has to approve the guilty pleas. 

Cornwall and Williams are scheduled to return to court on Dec. 7.

Each face up to 30 years in prison, although Assistant United States Attorney Bradley T. King said in court that federal sentencing guidelines call for sentences of 33 to 41 months in prison. Additional penalties include possible restitution totaling more than $770,000 and a fine of up to $1.5 million.

Cornwall is a signal maintainer with the New York City Transit Authority, according to a statement released by Peace. Williams is a New York State Court Officer.

“It is reprehensible that two civil servants would blatantly steal from these programs for small businesses and families struggling during the pandemic,” Peace said. “The defendants are being held accountable. This case should serve as a reminder that while the worst days of the pandemic are in the past, law enforcement has a long memory for those who defrauded those relief programs.”