South Burlington business owner sentenced for loan fraud, money laundering

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BURLINGTON — Dennis Duffy II, 40, of South Burlington was sentenced to 12 months and one day of imprisonment and two years of supervised release following his prison term, for loan fraud and money laundering, according to the District of Vermont.

The judge also ordered Duffy to pay restitution in the amount of $191,000 and forfeit a Ford truck that he purchased with fraud proceeds.

According to court documents, Duffy applied for and received a $416,000 loan from North Country Federal Credit Union in the summer of 2020 for his commercial cleaning business, Night Owl Cleaning, Inc.

The loan was part of the Paycheck Protection Plan (PPP) loan program established by Congress to help small businesses keep employees on payroll during the pandemic.

Duffy submitted fraudulent documents, including tax records, rent invoices, and utility bills, to support the loan application.

Instead of using the funds for Night Owl payroll, Duffy used more than $390,000 to buy a house in Milton.

Duffy also committed an unrelated fraud against American Express in 2017.

He obtained a credit card for Night Owl Cleaning and used it to make fraudulent purchases, totaling $125,000, from a business named Vermont Aerial.

The transactions were fraudulent transfers of AMEX funds to another company Duffy owned named Pet Stop.

Duffy retransferred the money to a Night Owl Cleaning account and used those monies for his own benefit.

Duffy’s case was the first pandemic-related fraud prosecution to be filed in Vermont federal court.

The case was investigated by the Burlington office of the Federal Bureau of Investigation.

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