A former Rockport man who served on various local government boards and nonprofits will serve 18 months in federal prison after lying to obtain more than $1 million in COVID-19 disaster relief loans.

Mark X. Haley II, 43, was sentenced Wednesday to a year and a half in federal prison, followed by three years of probation. He also must pay more than a million dollars in restitution – the amount he obtained through 12 fraudulent loan applications in which he fabricated small businesses and employees to secure forgivable loans meant to cover workers’ wages under the federal Paycheck Protection Program.

Haley admitted to this in court records. In February, he pleaded guilty to one count of bank fraud and one count of money laundering. He faced up to 30 years in prison.

“Haley lied to get loans, he knew he was wrong in doing so, and he recognizes that he must be punished for his crimes,” Walter McKee, Haley’s defense attorney, wrote in a sentencing memo filed in U.S. District Court in Portland last month.

Thousands of small businesses around the country were rewarded PPP loans from 2020 to 2021.

In Maine, those loans covered more than a quarter million jobs by the end of 2020.

Federal prosecutors have gone after a handful of people in Maine since the program ended in May 2021, alleging they came by the loans fraudulently. Haley’s was “the largest heist from any PPP fraud case yet prosecuted in the District of Maine,” Assistant U.S. Attorney Sean Green wrote in a sentencing memo.

Haley invented employees, payroll and documents “from whole cloth,” Green stated. In one instance, Green said, Haley used one loan to buy a sailboat, and then applied for another loan using a company he created in the sailboat’s title. Haley said in his application that the sailboat had eight employees and an average monthly payroll of $53,750.

“This crime was not the result of a rash decision or momentary lapse in judgment. Nor was it a scheme the defendant abandoned upon reflection,” Green wrote. “The scheme was calculated, prolonged and opportunistic.”

In court records, McKee said Haley was “more than the crimes he committed,” citing his client’s “long road of addiction and recovery, his lack of criminal history, his community service, and his full and deep remorse.”

“It was a fair sentence all in all,” McKee said in an email Monday. “Mark did what he did and owned up to it.”

Haley, who grew up in Boston, enjoyed remarkable success in the investment industry, according to his sentencing memo. While working in real estate investment in New York, McKee wrote that Haley oversaw several billion dollars’ worth of real estate and sales transactions.

Despite his success, McKee wrote that Haley was struggling with substance use disorder. After an overdose, a heart attack and a car accident that left him with a traumatic brain injury, McKee wrote that Haley returned to Boston in 2017 after living in California.

In 2019, Haley joined a residential mental health and substance abuse treatment program in Camden. He moved to Lincolnville afterward, “away from the bustle and distractions of past people, places and things that might interfere with his recovery.”

Haley bought a house, was engaged, and was delving back into the world of investment. He served on several boards and committees, McKee wrote, including the Maine Ocean School Foundation, the Midcoast Recovery Coalition, PAWS Animal Adoption Center and the Rockport Planning Board.

Things started to come apart after an export/import company Haley started with a friend began to struggle, McKee wrote. The venture was weathering “considerable cash flow problems,” McKee wrote. Haley later learned his friend was defrauding and embezzling money from the company, McKee said in the memo.

Haley was afraid of letting down his fiancée and his family, McKee said, and used “bad judgment to make poor decisions and turn his life into utmost chaos.”

Haley is still defending himself against a lawsuit from his former fiancée, Rachel Klotz, who has alleged in Knox County Superior Court that Haley defrauded her of more than $1 million, promising he could use the money to get her a better return on her investments. Superior Court Justice Daniel Billings agreed to let the case move toward trial a couple months ago, denying Haley’s requests to dismiss the case on summary judgment.

In an affidavit, Klotz said Haley often abused her trust.

“Early on in our relationship, Mark would often encourage me to make certain investments that he claimed were ‘sure things,’ ” Klotz said. “He would make me feel stupid for not seeing that these were clear things and manipulate me to agree to the investment.”

McKee also represents Haley in the lawsuit and said it is being vigorously contested.

Other Mainers who were convicted of PPP fraud have faced higher sentences.

In November, Nathan Reardon, of Skowhegan, was sentenced to 20 months in federal prison after prosecutors say he applied for PPP loans using false employee wage information and using companies that had no active business operations or workers. Craig Franck, of Levant, was sentenced to 33 months in January after prosecutors say he received more than $320,000 in loans for two companies that were no longer in business or had employees by 2020.

The U.S. Attorney’s Office is still prosecuting Merton Weed Jr., who was indicted in February with four counts of wire fraud for allegedly applying for $150,000 in PPP loans using false payroll and employee information. Weed is scheduled for a change of plea hearing on Oct. 23.

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