Complaint as to ARLEN G. Encarnacion (1) — USA v. ARLEN Encarnacion (Dkt. 1, D.N.J.)

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U.S. District Court for the District of New Jersey · No. 2:21-mj-13425-LDW · Doc. 1 · 2021-12-13 · Docket on CourtListener

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UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

UNITED STATES OF AMERICA Hon. Leda Dunn Wettre

Vv. : Mag. No. 21-13425

ARLEN G. ENCARNACION CRIMINAL COMPLAINT

I, Postal Inspector Justyna Ramotowski, being duly sworn, state that the
following is true and correct to the best of my knowledge and belief:

SEE ATTACHMENT A

I further state that I am a Postal Inspector with the United States Postal
Inspection Service and that this complaint is based on the following facts:

SEE ATTACHMENT B

continued on the attached pages and made a part ne,

Postal Inspector Justyna Ramotowski
United States Postal Inspection Service

Postal Inspector Justyna Ramotowski attested to this Complaint by telephone

pursuant to Federal Rule of Criminal Procedure 4.1(b)(2)(A) on December 13, 2021
in New Jersey.

December 13, 2021 at
Newark, New Jersey

HONORABLE LEDA DUNN WETTRE Hon .Weda Duan Netrce
UNITED STATES MAGISTRATE JUDGE Signature of Judicial Officer

ATTACHMENT A

Counts One Through Eleven
(Bank Fraud)

From at least in or about May 2020 through in or about April 2021, in Middlesex
County, in the District of New Jersey and elsewhere, defendant

ARLEN G. ENCARNACION

did knowingly and intentionally execute and attempt to execute a scheme and artifice
to defraud one or more financial institutions, as defined by 18 U.S.C. § 20, to wit:
Lender 1, Lender 2, and Lender 3, the deposits of which were each insured by the
Federal Deposit Insurance Corporation, and to obtain moneys, funds, and credits
owned by and under the control of such financial institutions by means of materially
false and fraudulent pretenses, representations, and promises.

Approximate
ce Date Description

1 May 20, 2020 ENCARNACION submitted a fraudulent loan
application for Paycheck Protection Program (“PPP”)
funds on behalf of Skycam Technologies, LLC to
Lender 1 and obtained approximately $26,415 in PPP
funds.

2 July 30, 2020 ENCARNACION submitted a fraudulent loan

application for PPP funds on behalf of Skycam
Enterprises and Holdings LLC to Lender 1 and
obtained approximately $105,010 in PPP funds.
3 January 15, 2021 | ENCARNACION submitted a fraudulent loan
application for PPP funds on behalf of Skycam
Security LLC to Lender 1 and obtained
approximately $143,450 in PPP funds.

4 January 15, 2021 | ENCARNACION submitted a fraudulent loan
application for PPP funds on behalf of Skycam
Technologies LLC to Lender 1 and obtained
approximately $121,312 in PPP funds.

5 January 16, 2021 | ENCARNACION submitted a fraudulent loan
application for PPP funds on behalf of Skycam
Construction LLC to Lender 1 and obtained
approximately $130,330 in PPP funds.

6 January 16, 2021 | ENCARNACION submitted a fraudulent loan
application for PPP funds on behalf of Skycam
Enterprises and Holdings LLC to Lender 1 and
obtained approximately $105,010 in PPP funds.

~l

January 18, 2021

ENCARNACION submitted a fraudulent loan
application for PPP funds on behalf of Advance
Intelligent Systems LLC to Lender 1 and obtained
approximately $101,235 in PPP funds.

January 18, 2021

ENCARNACION submitted a fraudulent loan
application for PPP funds on behalf of The ISS Group
LLC to Lender 1 and obtained approximately
$148,350 in PPP funds.

9

January 20, 2021

ENCARNACION submitted a fraudulent loan
application for PPP funds on behalf of Skycam Auto
Group LLC to Lender 3 and obtained approximately
$116,670 in PPP funds.

10

April 8, 2021

ENCARNACION submitted a fraudulent loan
application for PPP funds on behalf of Skycam

Homes LLC to Lender 2 and obtained approximately
$153,030 in PPP funds.

11

April 13, 2021

ENCARNACION submitted a fraudulent loan
application for PPP funds on behalf of Skycam
Entertainment LLC to Lender 2 and obtained
approximately $169,372 in PPP funds.

In violation of Title 18, United States Code, Sections 1344(2) and 2.

Counts Twelve Through Fourteen

(Wire Fraud)

In or about August 2020, in Middlesex County, in the District of New J ersey and

elsewhere, defendant

ARLEN G. ENCARNACION

knowingly and intentionally devised and intended to devise a scheme and artifice to
defraud, and to obtain money and property by means of materially false and
fraudulent pretenses, representations, and promises, and, for the purpose of
executing and attempting to execute such scheme and artifice, did transmit and cause
to be transmitted by means of wire communications in interstate and foreign
commerce, the following writings, signs, signals, pictures, and sounds:

Count | Approximate
Date

Description of Wire

12 August 8, 2020

ENCARNACION submitted a fraudulent loan
application for Economic Injury Disaster Loan
Program (“EIDL”) funds to the Small Business
Administration (the “SBA”) on behalf of Skycam
Technologies LLC causing the SBA to deposit
approximately $63,600 in EIDL funds into the
company’s bank account via interstate wire
transmission through the District of New Jersey.

13 August 21, 2020

ENCARNACION submitted a fraudulent loan
application for EIDL funds to the SBA on behalf of
Skycam Security LLC causing the SBA to deposit
approximately $149,900 in EIDL funds into the
company’s bank account via interstate wire
transmission through the District of New Jersey.

14 August 22, 2020

ENCARNACION submitted a fraudulent loan
application for EIDL funds to the SBA on behalf of
Skycam Construction LLC causing the SBA to deposit
approximately $149,900 in EIDL funds into the
company’s bank account via interstate wire
transmission through the District of New Jersey.

In violation of Title 18, United States Code, Sections 1343 and 2

Counts Fifteen and Sixteen
(Money Laundering)

On or about the dates set forth below, in the District of New Jersey and
elsewhere, defendant

ARLEN G. ENCARNACION

did knowingly engage and attempt to engage in a monetary transaction by, through,
and to a financial institution, affecting interstate and foreign commerce, in criminally
derived property of a greater value than $10,000, that is, the transfer of U.S. currency
from bank accounts to the other bank accounts, cash withdrawals, foreign bank
transfers (defined in Attachment B), such property having been derived from a
specified unlawful activity, that is, wire fraud in violation of Title 18, United States
Code, Section 1343, and bank fraud, in violation of Title 18, United States Code,
Section 1344.

Count Approximate Description of Monetary Transaction
Date

Transfer from the Skycam Enterprises and Holdings
15 |December 21, 2020 {LLC bank account at Bank 1 in the amount of
approximately $40,000 to a Cashier’s Check, which
was subsequently deposited into a bank account at
Bank 4.

Transfer from the Skycam Technologies LLC bank
16 [December 21, 2020 [account at Bank 1 in the amount of approximately
$60,000 to a Cashier’s Check, which was
subsequently deposited into a bank account at Bank
4,

In violation of Title 18, United States Code, Sections 1957 and 2.

ATTACHMENT B

I, Justyna Ramotowski, a Postal Inspector with the United States Postal
Inspection Service, having conducted an investigation and having discussed this
matter with other law enforcement officers who have participated in this
investigation, have knowledge of the following facts. Because this Complaint is being
submitted for the limited purpose of establishing probable cause, I have not included
each and every fact known to me concerning this investigation. Rather, I have set
forth only the facts that I believe are necessary to establish probable cause. Unless
specifically indicated, all dates described in this affidavit are approximate and all
statements or representations described in this affidavit are related in substance and
in part.

Overview

1. From on or about May 20, 2020 through on or about April 138, 2021,
defendant ARLEN G. ENCARNACION (“EN CARNACION?”) used a variety of false
statements and representations to fraudulently obtain approximately $1.69 million
in federal COVID-19 emergency relief loans meant for distressed small businesses.
To obtain the loans, ENCARNACION submitted falsified loan applications to three
different lenders and the SBA on behalf of ENCARNACION’s purported businesses.
On these loan applications, ENCARNACION falsified various types of information
associated with his purported businesses, including: the number of employees; the
names of employees; payroll records; and federal tax documents. ENCARNACION
then misused the loan proceeds, including by purchasing various luxury items, and
withdrawing large sums of cash.

Background

The Paycheck Protection Program and Economic Insurance Disaster
Program Loans

2 The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a
federal law enacted in or about March 2020 and designed to provide emergency
financial assistance to the millions of Americans who are suffering the economic
effects caused by the COVID-19 pandemic. One source of relief provided by the
CARES Act was the authorization of up to $349 billion in forgivable loans to small
businesses for job retention and certain other expenses, through a program referred to
as the Paycheck Protection Program (“PPP”). In or around April 2020, Congress
authorized over $300 billion in additional PPP funding.

3. In order to obtain a PPP loan, a qualifying business must submit a PPP
loan application, which is signed by an authorized representative of the business. The
PPP loan application requires the business—through its authorized representative
to acknowledge the program rules and make certain affirmative certifications in
order to be eligible to obtain the PPP loan. In the PPP loan application, the small

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business must state, among other things, its: (a) average monthly payroll expenses;
and (b) number of employees. These figures are used to calculate the amount of money
the small business is eligible to receive under the PPP. In addition, businesses
applying for a PPP loan must provide documentation showing their payroll expenses.

A, A PPP loan application must be processed by a participating lender. Ifa
PPP loan application is approved, the participating lender funds the PPP loan using
its own money, which is 100% guaranteed by the SBA. Data from the application,
including information about the borrower, the total amount of the loan, and the listed
number of employees,is transmitted by the lender to the SBA in the course of
processing the loan.

5. PPP loan proceeds must be used by the business on certain permissible
expenses—payroll costs, interest on mortgages, rent, and utilities. The PPP allows
the interest and principal on the PPP loan to be entirely forgiven if the business
spends the loan proceeds on these expense items within a designated period of time
after receiving the proceeds and uses a certain amountof the PPP loan proceeds on
payroll expenses.

6. The Economic Injury Disaster Loan Program (“EIDL”) program is an SBA
program that provides low-interest financing to small businesses, renters, and
homeowners in regions affected by declared disasters.

7. The CARES Act authorized the SBA to provide EIDL loans of up to $2
million to eligible small businesses experiencing substantial financial disruption due
to the COVID-19 pandemic.

8. In order to obtain an EIDL loan, a qualifying business must submit an
application to the SBA and provide information about its operations, such as the
number of employees, gross revenue 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 constitutes the 12 months preceding
January 31, 2020. In addition, the business entity must have existed in an
operational condition on February 1, 2020.

9. The amount of the EIDL loan is determined based, in part, on the
information the applicant provides regarding the revenue, employees, and cost of
goods of the company. The SBA directly issues any funds disbursed under an EIDL
loan to the applicant company. A company may use EIDL loan funds for payroll
expenses, sick leave, production costs, and business obligations, such as debts, rent,
and mortgage payments. If an applicant also obtains a loan under the PPP, the
applicant company is prohibited from using EIDL loan funds for the same purpose as
the PPP funds. ,

~]

The Defendant and Relevant Entities

10.

At all times as relevant to this Complaint:

a. ENCARNACION was a resident of Perth Amboy, New Jersey and the
sole owner or “member/manager’” of the following entities through which
he fraudulently applied for PPP and EIDL loan funds:

i.

i.

ill.

iv.

Vi.

vi.

viii.

ix,

Skycam Homes LLC was purported to be a New Jersey limited
liability company in the realty industry.

Skycam Entertainment LLC was purported to be a New Jersey
limited liability company in the entertainment industry.

Skycam Auto Group LLC was purported to be a New J ersey
limited liability company providing distribution services.

Advance Intelligent Systems LLC was purported to be a New
Jersey limited liability company providing consulting services.

Skycam Security LLC was purported to be a New Jersey limited
liability company providing security services.

Skycam Technologies LLC was purported to be a New J ersey
limited liability company providing distribution services.

Skycam Construction LLC was purported to be a New Jersey
limited liability company providing construction services.

Skycam Enterprises and Holdings LLC was purported to be a New
Jersey limited liability company providing distribution services.

The ISS Group LLC was purported to be a New Jersey limited
liability company providing staffing agency services.

b. Company 1 was purported to be a New Jersey limited liability company
in the technology distribution industry. A known associate of
ENCARNACION was identified as a member of the company.

c. Lender 1 was a financial institution insured by the Federal Deposit
Insurance Corporation (“FDIC”) headquartered in Boston,
Massachusetts.

d. Lender 2 was a financial institution insured by the FDIC headquartered
in San Francisco, California.

e. Lender 3 was a financial institution insured by the FDIC headquartered
in Cherry Hill, New Jersey.

f. Bank 1 was a financial institution insured by the FDIC headquartered in
Boston, Massachusetts.

g. Bank 2 was a financial institution insured by the FDIC headquartered in
San Francisco, California.

h. Bank 3 was a financial institution insured by the FDIC headquartered in
Cherry Hill, New Jersey.

i. Bank 4 was a financial institution insured by the FDIC headquartered in
New York, New York.

The Scheme to Defraud

11. From at least in or about May 2020 through at least in or about April
2021, ENCARNACION submitted, or caused to be submitted, fraudulent loan
applications to approved lenders, including Lender 1, Lender 2, Lender 3, and the
SBA, in order to fraudulently obtain funds through the PPP and EIDL programs.

12. In connection with this fraud, ENCARNACION submitted, or caused to
be submitted, the following PPP and EIDL applications to Lender 1, Lender 2, Lender
3, and the SBA:

Name of Amount Approximate Status
Business Approved Lender Application
Applicant Date

Skycam $26,415 Lender 1 May 20, 2020 Funded

Technologies LLC

Skycam $105,010 Lender 1 July 30, 2020 Funded
Enterprises and
Holdings LLC
Skycam $63,700 SBA August 8, 2020 Funded

Technologies LLC

Skycam Security $150,000 SBA August 21, Funded
LLC 2020
Skycam $150,000 SBA August 22, Funded
Construction LLC 2020
Skycam Security $143,450 Lender 1 January 15, Funded
LLC 2021
Skycam $121,312 Lender 1 January 15, Funded
Technologies LLC 2021
Skycam $130,330 Lender 1 January 16, Funded
Construction LLC 2021
Skycam $105,010 Lender 1 January 16, Funded
Enterprises and 2021
Holdings LLC
Advance $101,235 Lender 1 January 18, Funded
Intelligent 2021
Systems LLC
ISS Group LLC $148,350 Lender 1 January 18, Funded
2021
Skycam Auto $116,670 Lender 3 January 20, Funded
Group LLC 2021
Skycam Homes $153,030 Lender 2 April 8, 2021 Funded
LLC
Skycam $169,372 Lender 2 April 13, 2021 Funded
Entertainment
LLC

10

May 20, 2020 Falsified Skycam Technologies LLC PPP Application to Lender
I

13. On or about May 20, 2020, Lender 1 received a PPP application in the
name of Skycam Technologies LLC seeking a PPP loan in the amount of
approximately $40,000. The application was submitted in ENCARNACION’S name
and listed his social security number. In addition, the application listed
ENCARNACION as the owner of Skycam Technologies LLC and his home address in
Perth Amboy, New Jersey, and a telephone number subscribed to ENCARNACION.
In support of the loan application, ENCARNACION also provided a copy of his New
Jersey Driver’s License.

14. The PPP application submitted to Lender 1 stated that Skycam
Technologies LLC’s monthly payroll was approximately $16,000 and that the company
had 15 employees. In connection with Skycam Technologies LLC’s purported payroll
numbers, the PPP application included an annual Transmittal of Wage and Tax
Statements (Internal Revenue Service (“TRS”) Form W3) for 2019, a payroll summary
for Skycam Technologies LLC for February 14 through 29, 2020, and Schedule C (RS
Form 1040) Profit or Loss From Business for 2019.

15. On or about June 23, 2020, Lender 1 informed ENCARNACION via e-
mail that the Schedule C submitted reflected monthly wages of $10,566, resulting in a
revised loan amount of $26,415. Via an e-mail to Lender 1 sent on or about June 29,
2020, ENCARNACION confirmed that Skycam Technologies LLC accepted the
adjusted loan amount.

16. The Skycam Technologies LLC application to Lender 1 contained the
following materially false and fraudulent information:

a. The purported Form W8 claimed that Skycam Technologies LLC
had paid employees approximately $113,323 for 2019 and
withheld approximately $6,424 in federal income tax. In addition,
the Skycam Technologies LLC, Form 1040, Schedule C for 2019
claimed purported wages in the amount of approximately
$126,786. Notably, as described below, in connection with a
subsequent PPP loan application for Skycam Technologies LLC
submitted in or about January, 2021, an identical Skycam
Technologies LLC, Form 1040, Schedule C for 2019 was submitted
in connection with that application but indicated that the company
paid approximately $582,288 in wages. Thus, Skycam
Technologies LLC, submitted what purported to be the same IRS
tax document to Lender 1 on two different occasions which
reported that it paid substantially different amounts in wages to
its purported employees.

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b. Information obtained from the Social Security Administration
(“SSA”) revealed that Skycam Technologies LLC reported no
wages paid for the period between 2018 and 2020. No Forms W-3,
Transmittal or Wage and Tax Statements, nor Forms W-2, W age
and Tax Statements, were received by the SSA. Likewise, a review
of information obtained from the IRS revealed that no Forms 941
were filed by Skycam Technologies LLC for the tax quarters of
2019 and 2020. IRS records also revealed that no Forms 1120,
Form 1040, Schedule Cs, Forms W2, or Forms W3 were filed for
Skycam Technologies LLC between 2018 and 2020.

17. Bank records show that ENCARNACION was the authorized
signatory on the Skycam Technologies LLC bank account at Bank 1 and that,
on or about July 1, 2020, the full loan amount of approximately $26,415 was
transferred into the Skycam Technologies LLC bank account at Bank 1.

July 30, 2020 Falsified Skycam Enterprises and Holdings LLC PPP
Application to Lender 1

18. On or about July 30, 2020, Lender 1 received a PPP application in the
name of Skycam Enterprises and Holdings LLC seeking a PPP loan in the amount of
approximately $105,009. The application was submitted in ENCARNACION’S name
and listed his social security number. In addition, the application listed
ENCARNACION as the owner of Skycam Enterprises and Holdings LLC and his
home address in Perth Amboy, New Jersey, and a telephone number subscribed to
ENCARNACION. In support of the loan application, ENCARNACION also provided a
copy of his New Jersey Driver’s License.

19. The PPP application submitted to Lender 1 stated that Skycam
Enterprises and Holding LLC’s monthly payroll was approximately $42,003 and that
the company had 15 employees. In connection with Skycam Enterprises and Holdings
LLC’s payroll numbers, the PPP application included an annual Transmittal of Wage
and Tax Statements (RS Form W8) for 2019, a payroll summary for Skycam
Enterprises and Holdings LLC for June through July 2020, and Schedule C (RS
Form 1040) Profit or Loss From Business for 2019.

20. The Skycam Enterprises and Holdings LLC application to Lender 1
contained the following materially false and fraudulent information:

a. The purported Form W8 claimed that Skycam Enterprises and
Holdings had paid employees approximately $504,047 for 2019
and withheld approximately $32,120 in federal income tax. In
addition, the Skycam Enterprises and Holdings LLC, Form 1040,
Schedule C claimed purported wages in the amount of
approximately $504,047.

12

b. Information obtained from the SSA revealed that Skycam
Enterprises and Holdings LLC reported no wages paid for the
period between 2018 and 2020. No Forms W-3, Transmittal or
Wage and Tax Statements, nor Forms W-2, Wage and Tax
Statements, were received by the SSA. Likewise, a review of
information obtained from the IRS revealed that no Forms 941
were filed by Skycam Enterprises and Holdings LLC for the tax
quarters of 2019 and 2020. IRS records also revealed that no
Forms 1120, Form 1040, Schedule Cs, Forms W2, or Forms W3
were filed for Skycam Enterprises and Holdings LLC between
2018 and 2020.

21. Bank 1 bank records revealed that the bank account for Skycam
Enterprises and Holdings LLC was opened on or about J uly 29, 2020, and that
ENCARNACION was the authorized signatory on the account and listed as the
managing member for the company.

22. Bank records show that on or about August 7, 2020, the full loan
amount of approximately $105,009 was transferred into the Skycam
Enterprises and Holdings LLC bank account at Bank 1 (the “Skycam
Enterprises and Holdings Bank Account’).

23. Prior to the receipt of the loan proceeds, the Skycam Enterprises
and Holdings Bank Account had a balance of approximately $450.

24. Areview of other deposits into the Skycam Enterprises and
Holdings Bank Account revealed that on or about August 18, 2020
approximately $17,800 was transferred from an account held at Bank 1 by the
ISS Group LLC, another company that ENCARNACION controlled. In
addition, on or about September 28, 2020, approximately $75,000 was
transferred from an account held by Skycam Security, LLC with Bank 1, and
approximately $75,000 was transferred from an account held by Skycam
Construction with Bank 1. On or about October 2, 2020, approximately $5,000
in cash was deposited into the Skycam Enterprises and Holdings Bank
Account.

25. Between approximately September 2, 2020 through January 12,
2021, ENCARNACION made several disbursements of the funds held in the
Skycam Enterprises and Holdings Bank Account. Specifically,
ENCARNACION made approximately six payments totaling approximately
$37,806, to credit cards and one debit card purchase to a home improvement
retailer in the amount of approximately $7,039. Approximately $12,000 in cash
was withdrawn in two transactions — approximately $10,000 on or about

13

November 5, 2020, and approximately $2,000 paid by cashier's check on or
about January 12, 2021.

26. Onor about December 21, 2020, approximately $40,000 was
withdrawn from the Skycam Enterprises and Holdings Bank Account, along
with $60,000 from the Skycam Technologies Bank Account with Bank 1 (the
“Skycam Technologies Bank Account”) for the purchase of a $100,000 cashier’s
check made payable to Company 1, a company owned and controlled by a
known associate of ENCARNACION. Company 1 deposited the $100,000
cashier's check in a bank account with Bank 4 (the “Company 1 Bank
Account’).

27. On or about December 22, 2020, Company 1 withdrew $100,000
from the Company 1 Bank Account for the purchase of a cashier’s check made

payable to a Lamborghini dealer in Paramus, New Jersey (the “Lamborghini
Dealer’).

28. On or about December 23, 2020, ENCARNACION granted a power
of attorney, a legal status granted to another party that authorized that party
to act on ENCARNACION’s behalf, to the Lamborghini Dealer for the purpose
of obtaining title and registration documents for a 2019 Lamborghini Urus
purchased from the Lamborghini Dealer. .

August 8, 2020 Falsified Skycam Technologies LLC EIDL Application to the
SBA

29. On or about August 8, 2020, the SBA received an EIDL application in the
name of Skycam Technologies LLC seeking an EIDL loan in the amount of
approximately $63,700. The application listed ENCARNACION as the owner of
Skycam Technologies LLC and listed his social security number. In addition, in
support of the application, ENCARNACION signed a letter reflecting his authority to
to sign the SBA loan closing documents in his capacity as CEO and President of
Skycam Technologies LLC. The application also listed ENCARNACION’S home
address in Perth Amboy, New Jersey, and a telephone number subscribed to
ENCARNACION.

30. The Skycam Technologies LLC application to the SBA contained the
following materially false and fraudulent information:

a. The EIDL application submitted to the SBA stated that Skycam
Technologies LLC’s gross revenue for the 12 months prior to
January 31, 2020 was approximately $252,000 and that the
company had 12 employees.

14

b. Information obtained from the SSA revealed that Skycam
Technologies LLC reported no wages paid for the period between
2018 and 2020. No Forms W-3, Transmittal or Wage and Tax
Statements, nor Forms W-2, Wage and Tax Statements, were
received by the SSA. Likewise, a review of information obtained
from the IRS revealed that no Forms 941 were filed by Skycam
Technologies LLC for the tax quarters of 2019 and 2020. IRS
records also revealed that no Forms 1120, Form 1040, Schedule
Cs, Forms W2, or Forms W3 were filed for Skycam Technologies
LLC between 2018 and 2020.

31. Bank records show that ENCARNACION was the authorized
signatory on the Skycam Technologies LLC bank account at Bank 1 and that,
on or about August 31, 2020, approximately $63,600 in loan funds were
transferred into the Skycam Technologies LLC bank account at Bank 1, which
represented the full $63,700 approved loan proceeds minus a $100 fee for a
Uniform Commercial Code filing that was deducted from the total loan amount.

August 21, 2020 Falsified Skycam Security LLC EIDL Application to the SBA

32. Onor about August 21, 2020, the SBA received an EIDL application in
the name of Skycam Security LLC seeking an EIDL loan in the amount of
approximately $150,000. The application listed ENCARNACION as the owner of
Skycam Security LLC and listed his social security number. In addition, in support of
the application, a Certificate of Formation for Skycam Security LLC listing
HNCARNACION as the member/manager was provided to the SBA, along witha
letter ENCARNACION signed reflecting his authority to sign the SBA loan closing
documents in his capacity as CEO and President of Skycam Security, LLC. The
application also listed ENCARNACION’S home address in Perth Amboy, New Jersey,
and a telephone number subscribed to ENCARNACION.

33. The Skycam Security LLC application to the SBA contained the following
materially false and fraudulent information:

a. The EIDL application submitted to the SBA stated that Skycam
Security LLC’s gross revenue for the 12 months prior to J anuary
31, 2020 was approximately $538,778 and that the company had
15 employees.

b. Information obtained from the SSA revealed that Skycam Security
LLC reported no wages paid for the period between 2018 and 2020.
No Forms W-3, Transmittal or Wage and Tax Statements, nor
Forms W-2, Wage and Tax Statements, were received by the SSA.
Likewise, a review of information obtained from the IRS revealed
that no Forms 941 were filed by Skycam Security LLC for the tax

15

quarters of 2019 and 2020. IRS records also revealed that no
Forms 1120, Form 1040, Schedule Cs, Forms W 2, or Forms W3
were filed for Skycam Security LLC between 2018 and 2020. In
addition, bank records revealed that Skycam Security LLC’s bank
account at Bank 1 had a starting balance of approximately $200 on
August 13, 2020, and had no other deposits prior to the
approximately $149,900 in EIDL funds received on or about
September 1, 2020. This amount of deposited funds in Skycam
Security LLC’s bank account was significantly lower than the
$538,778 in gross revenue that ENCARNACION claimed for the
company on its EIDL loan application.

34. Bank records show that ENCARNACION was the authorized
signatory on the Skycam Security LLC bank account at Bank 1 and that, on or
about September 1, 2020, the loan amount of approximately $149,900 was
transferred into the Skycam Security LLC bank account at Bank 1, which
represented the full $150,000 approved loan proceeds minus a $100 fee for a
Uniform Commercial Code filing that was deducted from the total loan amount.

August 22, 2020 Falsified Skycam Construction LLC EIDL Application to the
SBA

35. Onor about August 22, 2020, the SBA received an EIDL application in
the name of Skycam Construction LLC seeking an EIDL loan in the amount of
approximately $150,000. The application listed ENCARNACION as the owner of
Skycam Construction LLC and listed his social security number. In addition, in
support of the application, a Certificate of Formation for Skycam Construction LLC
was submitted that listed ENCARNACION as the member/manager, with his home
address as the registered office of the business. The application also listed
ENCARNACION’S home address in Perth Amboy, New Jersey, anda telephone
number subscribed to ENCARNACION.

36. The Skycam Construction LLC application to the SBA contained the
following materially false and fraudulent information:

a. The EIDL application submitted to the SBA stated that Skycam
Construction LLC’s gross revenue for the 12 months prior to
January 31, 2020 was approximately $549,886 and that the
company had 15 employees.

b. Information obtained from the SSA revealed that Skycam
Construction LLC reported no wages paid for the period between
2018 and 2020. No Forms W-3, Transmittal or Wage and Tax
Statements, nor Forms W-2, Wage and Tax Statements, were
received by the SSA. Likewise, a review of information obtained

16

from the IRS revealed that no Forms 941 were filed by Skycam
Construction LLC for the tax quarters of 2019 and 2020. IRS
records also revealed that no Forms 1120, Form 1040, Schedule
Cs, Forms W2, or Forms W3 were filed for Skycam Construction
LLC between 2018 and 2020. In addition, bank records revealed
that Skycam Construction LLC’s bank account at Bank 1 hada
starting balance of $200 on August 13, 2020, and had no other
deposits prior to the approximately $149,900 in EIDL funds
received on or about September 2, 2020. This amount of deposited
funds in Skycam Construction LLC’s bank account was
significantly lower than the $549,886.00 in gross revenue that
ENCARNACION claimed for the company on its EIDL loan
application.

37. Bank records show that ENCARNACION was the authorized
signatory on the Skycam Construction LLC bank account at Bank 1 and that,
on or about September 2, 2020, the loan amount of approximately $149,900 was
transferred into the Skycam Construction LLC bank account at Bank 1 which
represented the full $150,000 approved loan proceeds minus a $100 fee for a
Uniform Commercial Code filing that was deducted from the total loan amount.

January 15, 2021 Falsified Skycam Security LLC PPP Application to
Lender 1

38.  Onor about January 15, 2021, Lender 1 received a PPP application in
the name of Skycam Security LLC seeking a PPP loan in the amount of approximately
$143,450. The application was submitted in ENCARNACION’S name and listed his
social security number. In addition, the application listed ENCARNACION as the
owner of Skycam Security LLC and his home address in Perth Amboy, New Jersey,
and a telephone number subscribed to ENCARNACION. In support of the loan
application, ENCARNACION also provided a copy of his New Jersey Driver's License.

39. The PPP application submitted to Lender 1 stated that Skycam Security
LLC’s monthly payroll was approximately $57,380 and that the company had 15
employees. In connection with Skycam Security LLC’s purported payroll numbers, the
PPP application included an annual Transmittal of Wage and Tax Statements (RS
Form W3) for 2019, a payroll summary for Skycam Security LLC for February 14
through 29, 2020, and Schedule C (RS Form 1040) Profit or Loss From Business for
2019.

40. The Skycam Security LLC application to Lender 1 contained the
following materially false and fraudulent information:

a. The purported Form W3 claimed that Skycam Security LLC had
paid employees approximately $688,550 for 2019 and withheld
approximately $42,820 in federal income tax. In addition, the
Skycam Security LLC, Form 1040, Schedule C claimed purported
wages in the amount of approximately $688,550.

b. Information obtained from the SSA revealed that Skycam Security
LLC reported no wages paid for the period between 2018 and 2020.
No Forms W-3, Transmittal or Wage and Tax Statements, nor
Forms W-2, Wage and Tax Statements, were received by the SSA.
Likewise, a review of information obtained from the IRS revealed
that no Forms 941 were filed by Skycam Security LLC for the tax
quarters of 2019 and 2020. IRS records also revealed that no
Forms 1120, Form 1040, Schedule Cs, Forms W2, or Forms W3
were filed for Skycam Security LLC between 2018 and 2020.

41. Bank records show that the authorized signatory on the Skycam
Security LLC bank account at Bank 1 was ENCARN: ACION, and that on or
about March 1, 2021, ENCARNACION received the full loan amount of
approximately $143,450 into the Skycam Security LLC bank account at Bank 1.

January 15, 2021 Falsified Skycam Technologies LLC PPP Application to
Lender 1

42. Onor about January 15, 2021, Lender 1 received another PPP
application in the name of Skycam Technologies LLC seeking a PPP loan in the
amount of approximately $121,312. The application was submitted in
ENCARNACION’S name and listed his social security number. In addition, the
application listed ENCARNACION as the owner of Skycam Technologies LLC and his
home address in Perth Amboy, New Jersey, and a telephone number subscribed to
ENCARNACION. In support of the loan application, ENCARNACION also provided a
copy of his New Jersey Driver's License.

43. The PPP application submitted to Lender 1 stated that Skycam
Technologies LLC’s monthly payroll was $48,525 and that the company had 18
employees. In connection with Skycam Technologies LLC’s purported payroll
numbers, the PPP application included a Schedule C (IRS Form 1040) Profit or Loss
From Business for 2019.

18

44. The Skycam Technologies LLC application to Lender 1 contained the
following materially false and fraudulent information:

a. The Skycam Technologies LLC, Form 1040, Schedule C for 2019
claimed purported wages in the amount of approximately
$582,288. Notably, in connection with a previous PPP loan
application for Skycam Technologies LLC submitted in or about
May, 2020, an identical Skycam Technologies LLC, Form 1040,
Schedule C for 2019 was submitted in connection with that
application but indicated that the company paid approximately
$126,786 in wages. Thus, Skycam Technologies LLC, submitted
what purported to be the same IRS tax document to Lender 1 on
two different occasions while reporting that it paid substantially
different amounts in wages to its purported employees.

b. Information obtained from the SSA revealed that Skycam

Technologies LLC reported no wages paid for the period between
2018 and 2020. No Forms W-3, Transmittal or W age and Tax
Statements, nor Forms W-2, Wage and Tax Statements, were
received by the SSA. Likewise, a review of information obtained
from the IRS revealed that no Forms 941 were filed by Skycam
Technologies LLC for the tax quarters of 2019 and 2020. IRS
records also revealed that no Forms 1120, Form 1040, Schedule
“s, Forms W2, or Forms W3 were filed for Skycam Technologies
LLC between 2018 and 2020.

45. Bank records show that the authorized signatory on the Skycam
Technologies LLC bank account at Bank 1 was ENCARNACION, and that on or
about February 2, 2021, the full loan amount of approximately $121,312 was
transferred into the Skycam Technologies LLC bank account at Bank 1.

January 16, 2021 Falsified Skycam Construction LLC PPP Application to
Lender 1

46. Onor about January16, 2021, Lender 1 received a PPP application in the
name of Skycam Construction LLC seeking a PPP loan in the amount of
approximately $130,330. The application was submitted in ENCARNACION’S name
and listed his social security number. The application listed ENCARNACION as the
owner of Skycam Construction and his home address in Perth Amboy, New Jersey,
and a telephone number subscribed to ENCARNACION. In support of the loan
application, ENCARNACION also provided a copy of his New J. ersey Driver’s License.

47. The PPP application submitted to Lender 1 stated that Skycam
Construction’s monthly payroll was $52,132 and that the company had 15 employees.
In connection with Skycam Construction’s purported payroll numbers, the PPP

19

application included four purported State of New J ersey Employer's Amended
Quarterly Report (NJ927) for 2019, an annual Transmittal of Wage and Tax
Statements (RS Form W3) for 2019, a payroll summary, and Schedule C (IRS Form
1040) Profit or Loss From Business for 2019.

48. The Skycam Construction application to Lender 1 contained the
following materially false and fraudulent information:

a. The purported NJ927 claimed that Skycam Construction had paid
employees approximately $622,576 for that year. The purported
Form W3 claimed that Skycam Construction had paid employees
approximately $625,576 for 2019 and withheld approximately
$39,820 in federal income tax. In addition, the Skycam
Construction, Form 1040, Schedule C claimed purported wages in
the amount of approximately $625,576.

b. Information obtained from the SSA revealed that Skycam
Construction reported no wages paid for the period between 2018
and 2020. No Forms W-3, Transmittal or Wage and Tax
Statements, nor Forms W-2, Wage and Tax Statements, were
received by the SSA. Likewise, a review of information obtained
from the IRS revealed that no Forms 941 were filed by Skycam
Construction for the tax quarters of 2019 and 2020. IRS records
also revealed that no Forms 1120, Form 1040, Schedule Cs, Forms
W2, or Forms W3 were filed for Skycam Construction between
2018 and 2020.

49. Bank records show that the authorized signatory on the Skycam
Construction LLC bank account at Bank 1 was ENCARNACION , and that on
or about February 3, 2021, the full loan amount of approximately $130,330 was
transferred into the Skycam Construction LLC bank account at Bank 1.

January 16, 2021 Falsified Skycam Enterprises and Holdings LLC PPP
Application to Lender 1

50. Onor about January 16, 2021, Lender 1 received another PPP
application in the name of Skycam Enterprises and Holdings LLC seeking a PPP loan
in the amount of approximately $105,010. The application was submitted in
ENCARNACION’S name and listed his social security number. The application listed
ENCARNACION as the owner of Skycam Enterprises and Holdings and his home
address in Perth Amboy, New Jersey, and a telephone number subscribed to
ENCARNACION. In support of the loan application, ENCARNACION also provided a
copy of his New Jersey Driver’s License.

20

51. The PPP application submitted to Lender 1 stated that Skycam
Enterprises and Holding LLC’s monthly payroll was $42,004 and that the company
had 25 employees. In connection with Skycam Enterprises and Holdings LLC’s
purported payroll numbers, the PPP application included an annual Transmittal of
Wage and Tax Statements (IRS Form W3) for 2019, a payroll summary for Skycam
Enterprises LLC for February 14-29, 2020, and Schedule C (IRS Form 1040) Profit or
Loss From Business for 2019.

52. The Skycam Enterprises and Holdings LLC application to Lender 1
contained the following materially false and fraudulent information:

a. The purported Form W3 claimed that Skycam Enterprises and
Holdings LLC had paid employees approximately $504,047 for
2019 and withheld approximately $32,120 in federal income tax.
In addition, the Skycam Enterprises and Holdings LLC, Form
1040, Schedule C claimed purported wages in the amount of
approximately $504,047.

b. Information obtained from the SSA revealed that Skycam
Enterprises and Holdings LLC reported no wages paid for the
period between 2018 and 2020. No Forms W-3, Transmittal or
Wage and Tax Statements, nor Forms W-2, Wage and Tax
Statements, were received by the SSA. Likewise, a review of
information obtained from the IRS revealed that no Forms 941
were filed by Skycam Enterprises and Holdings LLC for the tax
quarters of 2019 and 2020. IRS records also revealed that no
Forms 1120, Form 1040, Schedule Cs, Forms W2, or Forms W3
were filed for Skycam Enterprises and Holdings LLC between
2018 and 2020.

53. Bank records show that the authorized signatory on the Skycam
Enterprises and Holdings LLC bank account at Bank 1 was ENCARNACION ,
and that on or about January 25, 2021, the full loan amount of approximately
$105,010 was transferred into the Skycam Enterprises and Holdings LLC bank
account at Bank 1.

January 18, 2021 Falsified Advance Intelligent. Systems LLC PPP
Application to Lender 1

54. On or about January 18, 2021, Lender 1 received a PPP application in
the name of Advance Intelligent Systems seeking a PPP loan in the amount of
approximately $101,235. The application was submitted in ENCARNACION’S name
and listed his social security number. The application listed ENCARNACION as the
owner of Advance Intelligent Systems LLC and his home address in Perth Amboy,
New Jersey, and a telephone number subscribed to ENCARNACION. In support of

21

the loan application, ENCARNACION also provided a copy of his New Jersey Driver's
License.

55. The PPP application submitted to Lender 1 stated that Advance
Intelligent Systems LLC’s average monthly payroll was $40,494 and that the company
had 26 employees. In connection with Advance Intelligent Systems LLC’s purported
payroll numbers, the PPP application included an annual Transmittal of Wage and
Tax Statements (IRS Form W3) for 2019.

56. The Advance Intelligent Systems LLC application to Lender 1 contained
the following materially false and fraudulent information:

a. The purported Form W3 claimed that Advance Intelligent Systems LLC had
paid employees approximately $485,923 for 2019 and withheld
approximately $28,060 in federal income tax.

b. Information obtained from the SSA revealed that Advance Intelligent
Systems LLC LLC reported no wages paid for the period between 2018 and
2020. No Forms W-3, Transmittal of Wage and Tax Statements, nor Forms
W-2, Wage and Tax Statements, were received by the SSA. Likewise, a
review of information obtained from the IRS revealed that no Forms 941
were filed by Advance Intelligent Systems LLC for the tax quarters of 2019
and 2020.

57. Bank records show that the authorized signatory on the Advance
Intelligent Systems LLC bank account at Bank 1 was ENCARNACION, and that on
or about February 9, 2021, the full loan amount of approximately $101,235 was
transferred into the Advance Intelligent Systems LLC bank account at Bank 1.

January 18, 2021 Falsified ISS Group LLC PPP Application to Lender 1

58. Onor about January 18, 2021, Lender 1 received a PPP application in
the name of ISS Group LLC seeking a PPP loan in the amount of approximately
$148,350. The application was submitted in ENCARNACION’S name. The
application listed ENCARNACION as the primary contact for ISS Group LLC, along
with his home address in Perth Amboy, New Jersey, and a telephone number
subscribed to ENCARNACION. In support of the loan application, ENCARNACION
also provided a copy of his New Jersey Driver’s License.

59. The PPP application submitted to Lender 1 stated that ISS Group LLC
average monthly payroll was approximately $59,340 and that the company had 65
employees. In connection with ISS Group LLC’s purported payroll numbers, the PPP
application included an annual Transmittal of Wage and Tax Statements (IRS Form
W3) for 2019, a payroll summary for ISS Group LLC for February through March,
2020, and a Schedule C (RS Form 1040) Profit or Loss from Business for 2019.

22

60. The ISS Group LLC application to Lender 1 contained the following
materially false and fraudulent information:

a. The ISS Group LLC Form 1040, Schedule C, claimed wages in the
amount of approximately $712,088 for the year 2020. The
purported Form W3 claimed that ISS Group LLC had paid
employees approximately $712,088 for 2020 and withheld
approximately $37,292 in federal income tax.

b. Information obtained from the SSA revealed that ISS Group LLC
reported no wages paid for the period between 2018 and 2020. No
Forms W-3, Transmittal or Wage and Tax Statements, nor Forms
W-2, Wage and Tax Statements, were received by the SSA.
Likewise, a review of information obtained from the IRS revealed
that no Forms 941 were filed by ISS Group LLC for the tax
quarters of 2019 and 2020. IRS records also revealed that no
Forms 1120, Form 1040, Schedule Cs, Forms W2, or Forms W3
were filed for ISS Group LLC between 2018 and 2020.

Bank records show that the authorized signatory on the ISS Group LLC bank
account at Bank 1 was ENCARNACION, and that on or about J anuary 26,
2021, the full loan amount of approximately $148,350 was transferred into the
ISS Group LLC bank account at Bank 1.

January 20, 2021 Falsified Skycam Auto Group LLC PPP Application to
Lender 3

61. On or about January 20, 2021, Lender 3 received a PPP application in
the name of Skycam Auto Group LLC seeking a PPP loan in the amount of
approximately $116,670. In addition, the application listed ENCARNACION as the
owner of Skycam Auto Group LLC and listed his social security number. The
application also listed an address in Perth Amboy, New Jersey, and a telephone
number subscribed to ENCARNACION as the business address and business phone.
In support of the loan application, ENCARNACION also provided a copy of his New
Jersey Driver’s License.

62. The PPP application submitted to Lender 3 stated that Skycam Auto
Group LLC’s monthly payroll was $46,668 and that the company had 20 employees. In
connection with Skycam Auto Group LLC’s purported payroll numbers, the PPP
application included a payroll summary for Skycam Auto Group LLC from February
through March 2020 an annual Transmittal of Wage and Tax Statements (IRS Form
W3) for 2019, a payroll summary, and Schedule C (IRS Form 1040) Profit or Loss from
Business for 2019.

23

63. The Skycam Auto Group LLC application to Lender 3 contained the
following materially false and fraudulent information:

a. The purported Form W3 claimed that Skycam Auto Gr oup LLC
had paid employees approximately $590,025 for 2019 and withheld
approximately $25,060 in federal income tax. In addition, the
purported Skycam Auto Group LLC, Form 1040, Schedule C
claimed purported wages in the amount of approximately
$590,025.

b. Information obtained from the SSA revealed that Skycam Auto
Group LLC reported no wages paid for the period between 2018
and 2020. No Forms W-3, Transmittal or Wage and Tax
Statements, nor Forms W-2, Wage and Tax Statements, were
received by the SSA. Likewise, a review of information obtained
from the IRS revealed that no Forms 941 were filed by Skycam
Auto Group LLC for the tax quarters of 2019 and 2020. IRS
records also revealed that no Forms 1120, Form 1040, Schedule
Cs, Forms W2, or Forms W3 were filed for Skycam Auto Group
LLC between 2018 and 2020.

64. Bank records show that the authorized signatory on the Skycam
Auto Group LLC bank account at Bank 3 was ENCARNACION, and that on or
about February 25, 2021, the full loan amount of approximately $116,670 was
transferred into the Skycam Auto Group LLC bank account at Bank 3.

April 8, 2021 Falsified Skycam Homes LLC PPP Application to Lender 2

65. On or about April 8, 2021, Lender 2 received a PPP application in the
name of Skycam Homes LLC seeking a PPP loan in the amount of approximately
$153,030. The application was submitted in ENCARNACION’S name and listed his
social security number. In addition, the application listed ENCARNACION as the
owner of Skycam Homes LLC and his home address in Perth Amboy, New Jersey, and
a telephone number subscribed to ENCARNACION.

66. The PPP application submitted to Lender 2 stated that Skycam Homes
LLC’s monthly payroll was $61,212 and that the company had 34 employees. In
connection with Skycam Homes LLC’s purported payroll numbers, the PPP
application an annual Transmittal of Wage and Tax Statements (IRS Form W3) for
2019, a payroll summary, and Schedule C (IRS Form 1040) Profit or Loss From
Business for 2019.

24

67. The Skycam Homes LLC application to Lender 2 contained the following
materially false and fraudulent information:

a. The purported Form W3 claimed that Skycam Homes LLC had
paid employees approximately $634,550.00 for 2019 and withheld
approximately $29,060.12 in federal income tax. In addition, the
Skycam Homes LLC, Form 1040, Schedule C claimed purported
wages in the amount of approximately $634,550.

b. Information obtained from the SSA revealed that Skycam Homes
LLC reported no wages paid for the period between 2018 and 2020.
No Forms W-3, Transmittal or Wage and Tax Statements, nor
Forms W-2, Wage and Tax Statements, were received by the SSA.
Likewise, a review of information obtained from the IRS revealed
that no Forms 941 were filed by Skycam Homes LLC for the tax
quarters of 2019 and 2020. IRS records also revealed that no
Forms 1120, Form 1040, Schedule Cs, Forms W2, or Forms W3
were filed for Skycam Homes LLC between 2018 and 2020.

68. Bank records show that the authorized signatory on the Skycam
Homes LLC bank account at Bank 2 was ENCARNACION, and that on or
about April 22, 2021, the full loan amount of approximately $153,030 was
transferred into the Skycam Homes LLC bank account at Bank 2.

April 13, 2021 Falsified Skycam Entertainment LLC PPP Application to
Lender 2

69. On or about April 18, 2021, Lender 2 received a PPP application in the
name of Skycam Entertainment LLC seeking a PPP loan in the amount of
approximately $169,372. The application was submitted in ENCARNACION’S name
and listed his social security number. In addition, the application listed
ENCARNACION as the owner of Skycam Entertainment LLC and his home address
in Perth Amboy, New Jersey, and a telephone number subscribed to ENCARNACION.

70. The PPP application submitted to Lender 2 stated that Skycam
Entertainment LLC’s monthly payroll was $67,749 and that the company had 32
employees. In connection with Skycam Entertainment LLC’s purported payroll
numbers, the PPP application included an annual Transmittal of Wage and Tax
Statements (RS Form W8) for 2019, a payroll summary, and Schedule C (IRS Form
1040) Profit or Loss From Business for 2019.

71.

The Skycam Entertainment LLC application to Lender 2 contained the

following materially false and fraudulent information:

a.

72.

The purported Form W3 claimed that Skycam Entertainment LLC
had paid employees approximately $712,988 for 2019 and withheld
approximately $42,860 in federal income tax. In addition, the
Skycam Entertainment LLC, Form 1040, Schedule C claimed
purported wages in the amount of approximately $712,988.

Information obtained from the SSA revealed that Skycam
Entertainment LLC reported no wages paid for the period between
2018 and 2020. No Forms W-3, Transmittal or Wage and Tax
Statements, nor Forms W-2, Wage and Tax Statements, were
received by the SSA. Likewise, a review of information obtained
from the IRS revealed that no Forms 941 were filed by Skycam
Entertainment LLC for the tax quarters of 2019 and 2020. IRS
records also revealed that no Forms 1120, Form 1040, Schedule
Cs, Forms W2, or Forms W3 were filed for Skycam Entertainment
LLC between 2018 and 2020.

Bank records show that the authorized signatory on the Skycam

Entertainment LLC bank account at Bank 2 was ENCARNACION, and that on
or about May 10, 2021, the full loan amount of approximately $169,372 was
transferred into the Shyoan: Entertainment LLC bank account at Bank 2.

26

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