KAUAI MAN SENTENCED IN $1.4 MILLION COVID RELIEF FRAUD CASE: FEDERAL COURT ORDERS PRISON TERM, FULL RESTITUTION FOLLOWING SBA MISREPRESENTATION

A federal sentencing in the District of Hawaii has concluded a COVID-19 relief fraud case involving the misuse of funds distributed through a targeted federal recovery program, with a Kauai resident ordered to serve prison time and repay more than $1.4 million to the U.S. Small Business Administration. The case centers on false certification, fund diversion, and post-award reporting violations tied to pandemic-era financial assistance.

Ethan Page, 52, of Kekaha, Hawaii, was sentenced on April 15, 2026, to fourteen months in federal prison, followed by three years of supervised release. The court also ordered restitution totaling $1,409,964.35 to the Small Business Administration. The sentence follows Page’s guilty plea to making a false statement to a federal agency in connection with relief funding.

Court records establish that the funding originated under the American Rescue Plan Act of 2021, enacted in March 2021, which created the Restaurant Revitalization Fund to provide financial stabilization for food service businesses impacted by COVID-19-related revenue losses. The program was structured to deliver non-repayable grants to eligible businesses, contingent on strict compliance with usage requirements. Funds were required to be used exclusively for approved operational expenses, including payroll, rent or mortgage obligations, utilities, and other essential business costs. Recipients were required to submit post-award documentation verifying proper use of the funds.

On or about May 16, 2021, Page submitted an application to the Small Business Administration under the business name Hanapepe Design Studio, LLC, requesting more than $1.4 million in Restaurant Revitalization Fund assistance. The application was approved, and the funds were deposited into the business account shortly thereafter.

Financial tracing conducted during the investigation determined that approximately $1.3 million of the awarded funds was transferred from the business account into a personal investment account held by Page at a separate financial institution. The remaining portion of the funds, approximately $100,000, was used for expenses that did not meet program eligibility requirements.

The violation extended into the program’s compliance phase. On or about December 22, 2021, Page submitted a required post-award report to the Small Business Administration, certifying that the entirety of the funds had been used for eligible business expenses. Investigators determined that this certification was false and materially misrepresented the actual use of the funds. Federal authorities state that accurate reporting would have triggered a repayment requirement under the program’s rules.

The structure of the Restaurant Revitalization Fund relied on a hybrid oversight model, combining initial eligibility verification with post-disbursement compliance reporting. This model placed significant weight on recipient certification, creating exposure points where false statements could delay detection of misuse until after funds had been distributed.

The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorneys Craig S. Nolan and Gregg Paris Yates prosecuted the case in the District of Hawaii.

The sentencing occurs within a broader federal enforcement expansion targeting pandemic-related fraud. On April 7, 2026, the Department of Justice announced the establishment of the National Fraud Enforcement Division, a centralized unit focused on identifying and prosecuting misuse of federal funds across relief programs and benefit systems. The initiative is part of an ongoing federal effort to address fraud, waste, and abuse associated with emergency financial distributions during the COVID-19 period.

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