The Small Business Administration once recognized a Maryland entrepreneur as Maryland’s Small Business Person of the Year. Federal prosecutors now accuse that former business executive, who later secured a $130,000 Baltimore government job, of submitting fraudulent applications that brought more than $2.5 million in pandemic relief loans into accounts she controlled.
Kara DiPietro, 49, of Towson, Maryland, was indicted on six federal bank fraud counts on October 8, 2026. The U.S. Attorney’s Office for the District of Maryland announced the charges on October 20.
The allegations involve more than 20 Paycheck Protection Program (PPP) applications filed between April 2020 and May 2021 using businesses DiPietro owned or controlled. Prosecutors say the submissions misrepresented business information and previous borrowing activity to secure loans intended to help employers during the pandemic.
Her financial history also includes a 2023 personal bankruptcy, in which she disclosed millions in liabilities, and related business bankruptcy proceedings.
More Than 20 Loan Applications Sought Over $7.5 Million
According to the federal indictment, DiPietro submitted or caused the submission of PPP applications using H.M.C. Inc., Holdings Management Company Inc., Kinetic Capital LLC and related business names.
The applications allegedly contained false Employer Identification Numbers (EINs), including numbers the Internal Revenue Service had not assigned to the businesses identified. Prosecutors also allege that DiPietro supplied inaccurate information about payroll, employee counts and business operations.
Some applications omitted previous PPP borrowing associated with DiPietro or her companies, while others allegedly certified that an applicant had not already received a First Draw or Second Draw loan. These representations affected eligibility and the amounts businesses could borrow under the program.
The indictment also alleges that multiple applications used common business or residential internet connections, despite being submitted in the names of different entities.
Eight PPP Loans Were Funded, Including Six Detailed Bank Fraud Counts
According to the Justice Department, eight applications were funded. The selected indictment pages show the six charged transactions; the complete indictment’s funding table places the eight-loan total at approximately $2.79 million.
Six bank fraud counts identify individual funded transactions ranging from $327,395 to $664,331. Those six transactions total $2,749,506. The broader application table also identifies two additional $20,130 loans involving Kinetic Capital.
The indictment names Greater Nevada Credit Union, Sandy Spring Bank, First Home Bank and Customers Bank among the financial institutions involved in the charged transactions.
Prosecutors further allege that DiPietro transferred portions of the loan proceeds and used them for expenses not permitted under the PPP, including renovations to her personal residence.
The SBA Had Honored DiPietro as Maryland’s Small Business Person of the Year
In April 2017, the Small Business Administration announced DiPietro as Maryland’s Small Business Person of the Year. She was president and CEO of HMC Incorporated, a Columbia-based company specializing in commercial millwork and design services.
Her father, Gerald Dzurek, founded the business in 1989. DiPietro purchased it in 2015 after working in education and nonprofit fundraising, according to Baltimore Brew.
The SBA’s 2017 national awards guide profiled her business achievements, including the company’s operations and growth during her leadership.
DiPietro later established Holdings Management Company and Kinetic Capital. The indictment states that Holdings assumed HMC’s employees and business operations around 2020, while HMC ceased operating as an active business.
Her 2023 Bankruptcy Disclosed $6.56 Million in Liabilities
Federal bankruptcy records show that DiPietro filed a personal Chapter 11 petition on May 11, 2023, in the U.S. Bankruptcy Court for the District of Maryland. The proceeding, case 23-13304, was filed under Subchapter V, a provision available to qualifying debtors seeking to reorganize their financial affairs.
Her selected bankruptcy filing pages reported $492,481.51 in assets against $6,559,611.44 in liabilities. The assets consisted primarily of real estate valued at $460,000, while the liabilities included approximately $3 million in secured claims and $3.56 million in unsecured claims.
Two companies she owned, H.M.C. Inc. and Holdings Management Company, had already filed bankruptcy cases on February 24, 2023, according to her petition. Those proceedings were identified as cases 23-11234 and 23-11233, respectively.
In a May 22, 2023, attorney filing, DiPietro’s lawyers explained that most of her personal liabilities arose from guarantees she had provided to finance business operations. The filing described creditor collection actions, including foreclosure proceedings against her home, garnishment of bank accounts and claims against ownership interests in her businesses.
Baltimore Hired Her for a $130,000 Fleet Management Position
BREAKING – Federally indicted Baltimore city official continues to work at high-level government job. https://t.co/Wbayz6S095 https://t.co/FkvHyUsQLh
— Baltimore Brew (@BaltimoreBrew) October 20, 2026
Baltimore’s Department of General Services hired DiPietro in April 2025 as a deputy chief in fleet management, with an annual salary of approximately $130,000, according to Baltimore Brew’s review of public records.
She subsequently became deputy chief of operations in the division, which manages more than 5,000 municipal vehicles. Its responsibilities include maintenance facilities, fueling operations, procurement and contracts for parts and services.
Baltimore Brew reported that the fleet division operates with a budget of approximately $96 million.
Baltimore Brew reported on October 20 that DiPietro remained employed by the city. The mayor’s office told the outlet it would not comment on personnel matters.
The announced federal charges relate to DiPietro’s private business activities during 2020 and 2021, before she joined the Baltimore government.
Six Bank Fraud Counts Carry Potential 30-Year Prison Terms
The FBI’s Baltimore Field Office and the SBA Office of Inspector General investigated the case. Assistant U.S. Attorneys Joseph Wenner and John Mark Mastakas are handling the prosecution.
Each of the six bank fraud counts carries a statutory maximum of 30 years in federal prison. Those penalties are individual maximums, not a prediction of the sentence DiPietro would receive if convicted.
An indictment is a formal accusation rather than a finding of guilt. DiPietro is presumed innocent unless and until proven guilty.
How Business Owners Can Review Old PPP Loan Records
The SBA’s public PPP dataset contains loan-level information about disbursed Paycheck Protection Program loans. Business owners can compare company names, lenders and loan amounts with their original applications, loan agreements and forgiveness records.
A similar business name alone is not proof of unauthorized borrowing. Owners reviewing potential discrepancies should verify identifying information and consult their original tax and business records before reporting suspected misuse.
The SBA Office of Inspector General accepts complaints involving suspected fraud and misuse of SBA funds. Reports can include relevant company names, application information, transactions and supporting documentation.