Information as to Ahmed M Sary (1) count(s) 1. (bw5s, Deputy Clerk) — USA v. Sary (Dkt. 60, D. Md. No. 1:22-mj-01286)

Record facts

U.S. District Court for the District of Maryland · No. 1:23-cr-00344-RDB · Doc. 60 · 2023-09-26 · Docket on CourtListener

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Case 1:23-cr-00344-RDB Document 60 Filed 09/26/23 Page 1 of 10

PAR: 2021R00751
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

*

. Ls
v. * — cRIMINALNO, RED -aS- ONY

*

AHMED SARY, = (Conspiracy to Commit Wire Fraud

* Affecting Financial Institutions, 18
Defendant. * U.S.C. § 1349; Forfeiture, 18 U.S.C.

* § 981(a)(1)(C); 21 U.S.C. § 853(p);

* 28 U.S.C. § 2461(c))

INFORMATION
COUNT ONE

(Wire Fraud Conspiracy)

Relevant Individuals and Entities

The United States Attorney for the District of Maryland charges that:

At all times material to the Information:

I. Defendant AHMED SARY (“SARY”) was a resident of Baltimore, Maryland and
was the owner and principal of a purported financial services business called Amex Financial
Group Inc. SARY prepared false and fraudulent Paycheck Protection Program (“PPP”) loan
applications for various borrowers and false and fraudulent Economic Injury Disaster Loan
(“EIDL”) applications for various borrowers.

ee Co-conspirator H.D. was a resident of Gaithersburg, Maryland who ran a tax
preparation business.

3. Cross River Bank (“Cross River”) was a federally insured financial institution
headquartered in Fort Lee, New Jersey. Cross River was an approved United States Small
Business Administration (“SBA”) lender and participated as a lender in the Paycheck Protection

Program (“PPP”).

Case 1:23-cr-00344-RDB Document 60 Filed 09/26/23 Page 2 of 10

4, Heartland Payroll Solutions, Inc. (“Heartland”) is a payroll processing and
technology company headquartered in Oklahoma City, Oklahoma doing business throughout the
United States.

The Paycheck Protection Program

5. The PPP was a coronavirus disease (“COVID-19") pandemic relief program
administered by the SBA that provided forgivable loans to small businesses for job retention and
certain other expenses. The PPP permitted participating third-party lenders to approve and disburse
SBA-backed PPP loans to cover payroll, fixed debts, utilities, rent/mortgage, accounts payable and
other bills incurred by qualifying businesses during, and resulting from, the COVID-19 pandemic.
PPP loans were fully guaranteed by the SBA.

6. To obtain a PPP loan, a qualifying business had to submit a PPP loan application,
which was signed by an authorized representative of the business. The PPP loan application
required the business (through its authorized representative) to acknowledge the program rules and
make certain affirmative certifications to be eligible to obtain the PPP loan, including that the
business was in operation and either had employees for whom it paid salaries and payroll taxes or
paid independent contractors. A business applying for a PPP loan was required to provide
documentation, such as filed federal income tax documents, showing its payroll expenses and
substantiating that the borrowing business was in operation before or on February 15, 2020. The
payroll expenses for the qualifying business served as the basis for the amount of its PPP loan.

7. PPP loan applications were electronically submitted or caused to be submitted by
the borrower and received through SBA servers located outside of the District of Maryland. Once
approved, the business received the PPP loan proceeds via an electronic funds transfer from the

third-party lender to a financial account under the control of the business or business owner.

Case 1:23-cr-00344-RDB Document 60 Filed 09/26/23 Page 3 of 10

8. The proceeds of a PPP loan could be used for certain specified items, such as payroll
costs, costs related to the continuation of group health care benefits, or mortgage interest payments.
The proceeds of a PPP loan were not permitted to be used by the borrowers to purchase consumer
goods, automobiles, personal residences, clothing, jewelry, to pay the borrower’s personal federal
income taxes, or to fund the borrower’s ordinary day-to-day living expenses unrelated to the
specified authorized expenses.

The Economic Injury Disaster Loan Program

9. The EIDL program was an SBA program that provided low-interest financing to
small businesses, renters, and homeowners in regions affected by declared disasters. Through the
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the SBA was authorized to
provide EIDLs to eligible small businesses experiencing substantial financial disruption due to the
COVID-19 pandemic.

10. In addition, the CARES Act authorized the SBA to issue advances of up to
$10,000.00 to small businesses within three days of applying for an EIDL. The amount of the
advance was determined by the number of employees the applicant certified having. The advances
did not have to be repaid.

11. In order to obtain an EIDL or an advance, a qualifying business was required to
submit an application to the SBA and provide information about its operations, such as the number
of employees, gross revenues for the 12-month period preceding the disaster, and cost of goods
sold in the 12-month period preceding the disaster. In the case of EIDLs for COVID-19 relief, the
12-month period was that preceding January 31, 2020. The applicant was required to also certify
that all the information in the application was true and correct to the best of the applicant's
knowledge. EIDL applications were submitted directly to the SBA and processed by the agency

with support from a government contractor. The amount of the loan, if the application was

3

Case 1:23-cr-00344-RDB Document 60 Filed 09/26/23 Page 4 of 10

approved, was determined, in part, on the information provided by the application about
employment, revenue, and cost of goods, as described above. Any funds issued under an EIDL or
advance were issued directly by the SBA. EIDL funds were eligible to be used for working capital
for fixed debts, payroll expenses, accounts payable, and other bills resulting from the pandemic.
If the applicant also obtained a loan under the PPP, the EIDL funds could not be used for the same
purpose as the PPP funds.

The Conspiracy and the Scheme to Defraud

12. Beginning in or around April 2020 and continuing through in or around January

2022, in the District of Maryland and elsewhere, the defendant,
AHMED SARY,

knowingly and willfully, conspired with H.D., and others known and unknown to the United States
Attorney to knowingly and willfully execute and attempt to execute a scheme and artifice to
defraud the SBA, Cross River, and other lenders and to obtain and attempt to obtain money by
means of materially false and fraudulent pretenses, representations, and promises, and for the
purpose of executing and attempting to execute the scheme to defraud, did knowingly and willfully
transmit and cause to be transmitted by means of wire communications, in interstate and foreign
commerce, writings, signs, signals, pictures, and sounds affecting financial institutions (the
“scheme to defraud”), in violation of 18 U.S.C. § 1343.

The Object the Scheme to Defraud

9, It was the object of the conspiracy and scheme to defraud for SARY to personally
enrich himself by (1) fraudulently obtaining and attempting to obtain EIDL and PPP loans and
money for his own personal use and benefit, and for the personal benefit and use of his associates;
and (2) fraudulently obtaining and attempting to obtain kickbacks from owners of purported

businesses for whom he helped obtain and EIDL and PPP loans, often in the amount of up to 30%
4

Case 1:23-cr-00344-RDB Document 60 Filed 09/26/23 Page 5 of 10

of the amount of the loans obtained, in return for the submission of the false and fraudulent loan

applications.

Manner and Means of the Scheme to Defraud

10. It was part of the conspiracy and scheme to defraud that SARY and others known
and unknown to the United States Attorney referred, and directed others to refer, business owners
to SARY for the purpose of obtaining assistance in connection with obtaining EIDL and PPP loans.

12. _ It was a further part of the conspiracy and scheme to defraud that SARY and others
known and unknown to the United States Attorney, offered to assist the business owners in
applying for EIDL and PPP loans in exchange for a kickback.

13. It was a further part of the conspiracy and scheme to defraud that SARY, H.D., and
others known and unknown to the United States Attorney, assisted in the preparation of fraudulent
PPP loan applications for businesses by claiming grossly inflated numbers of employees and
grossly inflated monthly payroll costs, including for businesses that did not exist in any legitimate
capacity.

14. It was a further part of the conspiracy and scheme to defraud that SARY and others
known and unknown to the United States Attorney, assisted in the preparation of fraudulent EIDL
applications for businesses by claiming grossly inflated numbers of employees and grossly inflated
revenue numbers, including for businesses that did not exist in any legitimate capacity.

15. It was a further part of the conspiracy and scheme to defraud that in support of the
PPP applications, SARY and H.D. caused to be prepared various false and fraudulent records,
which were submitted with the PPP applications, including false United States Internal Revenue
Service (“IRS”) Forms 940 (Employer’s Annual Federal Unemployment Tax Return, 941
(Employer’s Quarterly Federal Tax Return), 944 (Employer’s Annual Federal Tax Return), and

W-3 (Transmittal of Wage and Tax Statements) for the businesses. The purpose of the false IRS
5

Case 1:23-cr-00344-RDB Document 60 Filed 09/26/23 Page 6 of 10

and fraudulent Forms 940, 941, 944, and W-3 was to circumvent Cross River’s requirement and
the requirement of other SBA approved lenders that prospective borrowers submit documentation
to support the payroll figures that served as the basis for the PPP loan amount. None of these false
and fraudulent and IRS Form 940s, 941s, 944s, and W-3 were ever filed with the IRS.

16. It was a further part of the conspiracy and scheme to defraud that these false and
fraudulent and IRS Form 940, 941, 944, and W-3 included false information concerning, among
other things, payroll costs and the number of employees in order to achieve a loan of the size
desired by the prospective borrower.

13. It was a further part of the conspiracy and scheme to defraud that in support of the
PPP applications, SARY caused to be prepared fabricated bank statements which were submitted
with the PPP applications for the businesses. The purpose of the fabricated bank statements was
to circumvent Cross River’s requirement and the requirement of other SBA approved lenders that
prospective borrowers submit documentation to support that the borrower’s business was in
operation on February 15, 2020.

17. It was a further part of the conspiracy and scheme to defraud that SARY, H.D., and
others known and unknown the United States Attorney communicated with one another and with
prospective clients electronically by sending messages and documents about their efforts to obtain
PPP loans.

18. It was a further part of the conspiracy and scheme to defraud that SARY, and others
known and unknown the United States Attorney told the prospective borrowers that in order to
complete the PPP loan applications, they would have to provide, among other things, a copy of

their driver’s license, biographical information, and banking information for their business.
Case 1:23-cr-00344-RDB Document 60 Filed 09/26/23 Page 7 of 10

19. It was a further part of the conspiracy and scheme to defraud that, after a PPP loan
or EIDL was funded, SARY collected a kickback of as much as a 30% of the loan amount from
the borrower.

20. It was a further part of the conspiracy and scheme to defraud that, at the request of
SARY, the kickback payments were frequently made to SARY by means of checks that had a
dollar amount filled in, but that left the payee blank.

21. It was a further part of the conspiracy and scheme to defraud that SARY and others
known and unknown to the United States Attorney wrote a payee name on each of the kickback
checks, and each check was deposited into accounts controlled by SARY.

22. It was a further part of the conspiracy and scheme to defraud that SARY collected
more than $2.7 million in kickback payments from the borrowers.

23. It was a further part of the conspiracy and scheme to defraud that after receiving
the PPP loans, certain loan borrowers, with the assistance of SARY, established payroll processing
services through Heartland for the purpose of making payments to purported employees of the
loan recipient businesses. The purpose of establishing payroll services for the businesses after
receipt of the PPP loans was to facilitate the creation of documentation that could be used to
substantiate requests for the PPP loans to be forgiven.

24. ‘It was a further part of the conspiracy and scheme to defraud that when SARY and
his co-conspirators applied for EIDL and PPP loans, they caused interstate wire communications,
including from Maryland to other states.

rae It was a further part of the conspiracy and scheme to defraud that 85 PPP loan
applications, including to Cross River, seeking a total of over $14,807,609.37 which had material
false representations were submitted in connection with the conspiracy and scheme to defraud. All

of these loans were ultimately funded.
Case 1:23-cr-00344-RDB Document 60 Filed 09/26/23 Page 8 of 10

26. ‘It was a further part of the conspiracy and scheme to defraud that 57 EIDL
applications seeking a total of over $3,093,670.50 which had material false representations were
submitted in connection with the conspiracy and scheme to defraud. All of these loans were
ultimately funded.

18 U.S.C. § 1349
Case 1:23-cr-00344-RDB Document 60 Filed 09/26/23 Page 9 of 10

FORFEITURE ALLEGATION

The United States Attorney for the District of Maryland further alleges that:

1, Pursuant to Federal Rule of Criminal Procedure 32.2, notice is hereby given to the
defendant that the United States will seek forfeiture as part of any sentence in accordance with 18
U.S.C. § 981(a)(1)(C), 21 U.S.C. § 853(p), and 28 U.S.C. § 2461(c), as a result of the defendant’s
conviction under the offense in Count One of this Information.

Wire Fraud Forfeiture

2. Upon conviction of the offense in Count One of this Information, the defendant,

AHMED SARY

shall forfeit to the United States, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c),

any property, real or personal, which constitutes or is derived from proceeds traceable to the
scheme to defraud.

3. The property to be forfeited includes, but is not limited to, a money judgment in the
amount of at least $828,498.95.

Substitute Assets

4, If any of the property described above, as a result of any act or omission of the
defendant:
a. cannot be located upon the exercise of due diligence;
b. has been transferred or sold to, or deposited with, a third party;
c. has been placed beyond the jurisdiction of the court;
d. has been substantially diminished in value; or
é. has been commingled with other property which cannot be divided

without difficulty,
Case 1:23-cr-00344-RDB Document 60 Filed 09/26/23 Page 10 of 10

the United States shall be entitled to forfeiture of substitute property pursuant to 21 U.S.C.
§ 853(p), as mcorporated by 28 U.S.C. § 2461(c).

18 U.S.C. § 981(a)(1)(C)
21 U.S.C. § 853(p)
28 U.S.C. § 2461(c)

Date Erek L. Barron
“n‘e' “‘a‘es * ‘‘omey

10

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