Court filing
TRANSCRIPT of Proceedings as to Carl Delano Torjagbo held on 5/12/22 (Detention Hrg),… — USA v. Torjagbo (Dkt. 21)
Record facts
| Court | U.S. District Court for the Northern District of Georgia |
|---|---|
| Filed | 2022-05-27 |
U.S. District Court for the Northern District of Georgia · No. 1:22-cr-00171-MLB-RDC · Doc. 21 · 2022-05-27 · Docket on CourtListener
Summary
A transcript of the May 12, 2022 detention hearing in United States of America v. Carl Delano Torjagbo, No. 1:22-cr-00171-MLB-RDC, before Magistrate Judge Linda T. Walker of the U.S. District Court for the Northern District of Georgia, filed May 27, 2022 as Document 21. The court reads that the indictment charges bank fraud in Count One over a PPP loan application for Kremkov Industries under which Chase Bank transferred $9,554,425, and money laundering in Counts Two through Four and Five through Seven. The court appoints Kendal Silas for the hearing, and the defendant is arraigned and pleads not guilty to Counts One through Seven. John R. Phillips for the government seeks detention under 18 USC, Section 3142(e)(1), citing risk of flight and danger to the community. The court closes by reminding the government of its Brady obligations under Rule 5(f)(1).
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
UNITED STATES OF AMERICA
) Docket Number
) 1:22-CR-00171-MLB-RDC-1
)
)
v.
)
)
) Atlanta, Georgia
) May 12, 2022
CARL DELANO TORJAGBO, also known
)
as KARL LUCIUS DELANO
)
)
TRANSCRIPT OF DETENTION HEARING
BEFORE THE HONORABLE LINDA T. WALKER
UNITED STATES MAGISTRATE JUDGE
APPEARANCES OF COUNSEL:
For the Government:
MR. JOHN R. PHILLIPS
For the Defendant:
MR. KENDAL SILAS
Official Court Reporter: ALICIA B. BAGLEY, RMR, CRR
Proceedings recorded by mechanical stenography, transcript
produced by computer
Case 1:22-cr-00171-MLB-RDC Document 21 Filed 05/27/22 Page 1 of 39
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P R O C E E D I N G S
(Atlanta, Fulton County, Georgia; May 12, 2022;
defendant present)
THE COURT: Please be seated. Good afternoon.
MR. PHILLIPS: Good afternoon, Judge.
THE COURT: The Court calls the case of United States
of America vs. Carl Delano Torjagbo, also known as Karl Lucius Delano.
This is criminal indictment Number 1:22-CR-171. We have appearing on
behalf of the government Russell Phillips. Seated with the defendant
is Kendal Silas who I've not yet appointed.
Mr. Torjagbo, you're here because a criminal indictment
has been filed against you. The criminal indictment charges you in
Count One with bank fraud. Beginning in or about January of 2021 and
continuing through at least in or about March of 2021, in the Northern
District of Georgia and elsewhere.
Count One alleges that you, aided and abetted by
others, knowingly executed and attempted to execute a scheme to
defraud JPMorgan Chase, National Bank Association, or Chase Bank, a
financial institution as defined in 18 USC 20, and to obtain monies
and funds owned by and under the custody and control of Chase Bank, by
means of materially false and fraudulent pretenses, representations,
and promises, and by the omission of material facts. This is in
conjunction with your forming a business, Kremkov Industries, a
Georgia company organized by you on or about January 4, 2021,
ten months after the Paycheck Protection Program eligibility date had
Case 1:22-cr-00171-MLB-RDC Document 21 Filed 05/27/22 Page 2 of 39
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expired. At that time, the indictment alleges, Kremkov Industries was
not eligible for a PPP loan because it was not in operation on
February 15, 2020. According to the indictment, that business never
conducted any legitimate business and never paid wages to any
employees because it had no employees.
Nevertheless, on February 16 you signed a PPP loan
application on behalf of this company and submitted it to Chase Bank
requesting a PPP loan of $9,554,425. On or about March 29th, 2021, as
a result of your materially false and fraudulent representations Chase
Bank transferred $9,554,425 in PPP loans to your custody and control,
in violation of Title 18 U.S. Code, Section 1344 and Section 2.
Count Two through Four charges you with concealment of
money laundering, in violation of 18 USC 1956(a)(1)(B)(i).
Five through Seven charges you with transaction of
money laundering, in violation of 18 USC 1957 and Section 2.
You're also charged in -- has the defendant received a
copy of the underlying indictment?
MR. SILAS: He has, Your Honor.
THE COURT: Does he understand the nature of the
charges pending against him?
MR. SILAS: Yes, Your Honor.
THE COURT: There's also a forfeiture provision in a
sum of money that arose or resulting from the offenses listed in the
indictment, including, it looks like, five different properties. He
understands the nature of the charges pending against him?
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MR. SILAS: He does, Your Honor.
THE COURT: Because you've been charged, you have an
absolute constitutional right to remain silent. That means no one
associated with the government or law enforcement can force or compel
you to make any statement or answer any questions concerning any
subject, particularly the allegations of this case, including your
background, alienage, and criminal history.
Any statement made by you, or the answers given to any
questions asked, can and will be used against you in court as
evidence, that is, in this proceeding and all others related to these
charges and perhaps in related ones as well, such as a probation
revocation, state court, immigration proceedings, if applicable.
Therefore, you should not make any statements or answer any questions
from persons associated with the government or law enforcement unless
and until a lawyer representing only your legal interests advises you
that making such a statement is in your best interest.
You also have the right to have an attorney represent
you before and during any questioning or making any statements at
every proceeding and appearance in court on these charges, including
this one. You may hire a lawyer of your own choosing if you
financially qualify. If you're not able to hire an attorney, the
Court may appoint someone to represent you at no cost to you if you so
qualify. The cost will be borne by the Court, but the lawyer will
represent only your interests.
I am looking at your financial affidavit with a little
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bit of a dilemma because he obviously has a substantial amount of
assets, some which may have been derived from the allegations, which
would prevent him from being able to hire an attorney, but I'm not
sure if the government has seized these assets yet or what.
MR. PHILLIPS: Your Honor, I'm not privy to the
affidavits so I'm not sure what assets you're referring to, but I can
tell you that we obtained 24 seizure warrants for motor vehicles and
for bank accounts and I know that those seizure warrants were being
executed today. I don't know what the result of those was. I don't
know what funds they were able to get out of those bank accounts.
THE COURT: Okay.
MR. PHILLIPS: But I do know that we obtained warrants
for accounts at PNC Bank and for Bank of America. I'll have to talk
to the agent and find out what they were able to get out of those.
THE COURT: Okay. For the purpose of this hearing I
will go ahead and appoint Mr. Silas because I'm not sure what his
financial posture will be after those warrants have been executed, but
if we need to we can come back and revisit his qualifications,
financial qualifications.
Did I ask him did he want the Court to appoint somebody
to represent you or do you want to hire your own attorney?
MR. SILAS: For now he'd like the Federal Defender to
be appointed.
THE COURT: Okay. For the purpose of this hearing and
until further notice the Court will go ahead and appoint Mr. Silas to
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represent him.
Okay. Because you've been charged in a criminal
indictment, you do not have a right to what is called a preliminary or
probable cause hearing because a grand jury, sitting here in the
Northern District of Georgia, has already determined, by the return of
this charging document, the indictment, that you committed the offense
that is set forth in Counts One through Seven of the underlying
indictment.
Do you want to proceed with the arraignment at this
time, Mr. Phillips?
MR. PHILLIPS: Yes, Your Honor.
MR. SILAS: Judge, I don't think I got the form for him
to sign.
MR. PHILLIPS: Your Honor, I prepared the motion for
detention and the motion to unseal the indictment. I forgot to
prepare the Plea with Counsel. That's my fault, I apologize. Can I
run back to the office and do that right now? I'm sorry, Your Honor.
I can actually fill it out on my computer right here.
(off-the-record discussion)
THE COURT: While she's working on that, I obviously
did not read every word of the criminal indictment. Mr. Silas, I'd
like to ask if your client would waive the formal reading of the
indictment or would he like for me to read the entire document -- the
entire indictment to him?
MR. SILAS: We'll waive reading.
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THE COURT: While we're waiting on that, Mr. Torjagbo,
you also have the right to a bond or detention hearing. Is he asleep?
It looks like your eyes were closed. You have the right to a
detention and bond hearing. In this case the government is seeking to
detain you until these charges are resolved. The government's
indicated in the motion that you are a risk of flight.
Is the defendant going to request to have that
detention hearing?
MR. SILAS: He is, Your Honor.
THE COURT: Okay. Then we'll wait for the Plea with
Counsel Form.
MR. PHILLIPS: Your Honor, I'm prepared to go forward
today if the Court would like to.
THE COURT: Do you need more time, Mr. Silas? It's up
to you. Do you want to go forward today or do you need more time to
prepare for the bond? Is he a U.S. citizen? That wasn't clear to me.
I know there was --
MR. SILAS: (Inaudible).
THE COURT: Okay. I just didn't see it. I may have
overlooked it in the Pretrial Services report. I don't remember
seeing it.
(off-the-record discussion)
THE COURT: Mr. Silas, did you say you wanted to go
forward with the bond hearing today or are you wanting more time to
prepare for it?
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MR. SILAS: We would like to go forward today.
THE COURT: Okay.
(a brief recess was taken)
THE COURT: Okay. Mr. Phillips, do you have the Plea
with Counsel Form?
MR. PHILLIPS: I do, Your Honor.
THE COURT: Okay. You may present it to defense
counsel.
MR. PHILLIPS: Sir, you have in front of you a document
entitled "Indictment" in Criminal Case Number 1:22-CR-171. Are you
Carl Delano Torjagbo, also known as Karl Lucius Delano?
THE DEFENDANT: Yes.
MR. PHILLIPS: All right. And it's your intent today
to plead not guilty to Counts One through Seven of the indictment; is
that correct?
THE DEFENDANT: Yes.
MR. PHILLIPS: And is this your signature on the Plea
with Counsel Form where it says "Defendant"?
THE DEFENDANT: Yes.
MR. PHILLIPS: And you're represented today by Kendal
Silas; is that correct?
THE DEFENDANT: Yes.
MR. PHILLIPS: Mr. Silas, is this your signature on the
Plea with Counsel Form?
MR. SILAS: Yes, it is.
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MR. PHILLIPS: All right. Your Honor, at this time I'd
tender Defendant Carl Torjagbo's, also known as Karl Delano's, Plea
with Counsel Form.
THE COURT: Okay. Thank you.
Okay. Let the record reflect that the defendant has
received a copy of the underlying indictment, he has been arraigned.
I think you have "having waived arraignment" in here. He's not
waiving his arraignment.
MR. PHILLIPS: Do you want me to strike through it?
THE COURT: If you can strike "having been" -- instead
of waived, "having been arraigned." Strike out the waived part of it
and they can initial it.
MR. PHILLIPS: Okay.
(off-the-record discussion)
MR. PHILLIPS: All right. Mr. Torjagbo, is that your
signature on the Plea with Counsel Form where it says "Defendant"?
THE DEFENDANT: Yes.
MR. PHILLIPS: Mr. Silas, is that your signature on the
Plea with Counsel Form?
MR. SILAS: It is.
MR. PHILLIPS: Your Honor, I'd tender the defendant's
revised Plea with Counsel Form.
THE COURT: Okay. Thank you.
Okay. Let the record reflect that the defendant has
received a copy of the underlying indictment, he's waived the formal
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reading of the indictment. Having been arraigned, he's entered a not
guilty plea to Counts One through Seven. The Court would note for the
record that the defendant, as well as his counsel, each have signed
the Plea with Counsel Form and the Court will order that a not guilty
plea be entered.
Mr. Phillips, will this be a short, medium, or long
case?
MR. PHILLIPS: Your Honor, I think this will be a
medium case.
THE COURT: Okay. As a medium case this case is
assigned to District Judge Brown and Magistrate Judge Cannon.
Do you have Rule 16 discovery for Mr. Silas?
MR. PHILLIPS: I do, Your Honor. I'm handing Mr. Silas
now a discovery disc and a piece of paper that has the password for
the disc on it.
THE COURT: Okay. Is reciprocal discovery requested?
MR. PHILLIPS: Yes, Your Honor.
THE COURT: Okay. So noted.
Okay. We'll proceed now to the detention portion of
this hearing. Mr. Phillips.
MR. PHILLIPS: Thank you, Your Honor.
As the Court knows, the detention issue is governed by
18 USC, Section 3142(e)(1), which states that if the Court finds that
no condition, or combination of conditions, will reasonably assure the
appearance of the person as required and the safety of any other
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person in the community the Court shall order the detention of the
person before trial. It's the government's contention that both of
those apply in this case, risk of flight and danger to the community.
The government bears the burden of establishing that
the defendant should be detained either by a preponderance of the
evidence concerning risk of flight or by clear and convincing evidence
concerning danger to the community. The statute also states that the
Court shall consider the factors that are listed in Subsection G and
I'd like to address those.
The first one, as to risk of flight, has to do with the
defendant changing his name. This is a case, Your Honor, that
involves a huge PPP loan, $9.5 million and change. It's the largest
single PPP loan that my office has investigated during the two plus
years of this pandemic. As the Court knows, the Paycheck Protection
Program, also known as the PPP, is a federal loan program that was
designed to provide funds to help small businesses stay afloat during
the covid-19 pandemic. This defendant is accused of applying for a
loan of more than $9.5 million getting that loan in the name of a
shell company, it's the company that he made up. After getting that
$9.5 million, he then is accused of laundering that money, as alleged
in the indictment.
One of the things that we found when we were going
through the bank records that pertain to the PPP loan is that not only
did this defendant make numerous false statements in the loan
application itself -- for example, he said he had 493 employees. That
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was not true. He didn't have any employees. He said he had a payroll
of more than $3.8 million per month, that was not true. He swore that
his company had been in business since December of 2014, that was not
true. The Georgia Secretary of State's records show that that company
was not organized until January of 2021, approximately 10 months after
the cutoff to get a PPP loan.
He made those false statements, he swore to them under
oath, but he also doubled down on that. He submitted numerous false
and fraudulent documents in support of his loan application. He made
up this company, he made up all the facts concerning the company and
its performance and its existence, those were all lies. Then he made
up tax documents to support what he was telling JPMorgan Chase Bank in
his loan application. He submitted what's called 940 and 941, those
are federal forms, IRS forms, that pertain to withholding and the
number of employees that a business has, those were all just made up.
But here's the really interesting thing, Judge. He
filed a phony personal income tax return. It wasn't phony. He
actually filed a tax return. It was fraudulent because he just made
up all of that information and that's attached to his PPP loan
application -- or it's submitted with it and his bank records show
that when he filed the PPP loan application in his tax return for 2020
he told the IRS that he was employed by Kremkov Industries, this phony
company, and he said that he had earned wages of more than $9 million
that year. But he also claimed a tax loss that exceeded that and
wiped out all of his income. His alleged tax loss was more than $9.9
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million -- or approximately $9.9 million. As a result, he alleged
that he was entitled to a refund of more than $3.3 million. That
happened three days before he filed the phony PPP loan application.
So he files his tax return and he says to the
government "Give me $3.3 million in a refund," and the government did.
Then three days later he files this PPP loan application and he says
"Give me another 9 and a half million dollars of taxpayer money." So
within three days, just by filing these phony documents in the name of
a fraudulent and made up, fictitious company, the government gave him
almost $13 million of taxpayer money so that's what this case is
about.
He's not charged with the tax fraud. The DOJ Tax
Division has to approve the charges for that so we're not able to
bring those at this time. I'm telling you about it not because it's a
charge, but because it's evidence in the case. We discovered that tax
return that this gentleman submitted to JPMorgan Chase Bank with his
PPP loan application. Then when we reviewed his bank records we saw
the actual check that the government provided him, the tax refund.
It's worth $3,366,240.76, and he deposited that check into not his
personal account, because it was his personal tax refund, he deposited
that check into an account in the name of Kremkov Industries at PNC
Bank.
So the indictment talks in great detail about things
that the defendant did with the PPP loan proceeds. For example, the
defendant used approximately $1.7 million to buy a new house. So this
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house that's referred to in his Pretrial Services report where he says
"This is where I live and I want to go back there and keep living
there if the Court let's me out on bond," that 5114 Greythorne Lane,
that's a house that he bought with $1.7 million in taxpayer money.
He also spent approximately $300,000 buying other real
estate, more than $800,000 to buy tractor-trailer trucks to start a
new trucking business called FlyingJack Freight and Logistics and, if
the Court will look at the defendant's Pretrial Services report, it
indicates that that is his current employer. He says he's been
employed there for eight months and he says he's the CEO of this
company. That's a fraud, Your Honor. That's another fictitious LLC
that the defendant made up to launder fraud proceeds. Instead of
doing that in Georgia where he lives, he got Wyoming to do it to make
it even harder to find and harder to trace the money, that's a Wyoming
entity. He then got a tax ID number for that phony company and he set
up a bank account in the name of that phony company and he transferred
more than 1.7 -- well, approximately $1.7 million of the fraud
proceeds to the bank account at Bank of America that he set up in the
name of FlyingJack Freight and Logistics. So when he says he's the
CEO of that company it is nothing but fraud. It is nothing but a
shell company and a front for a fraud scheme.
So the defendant was contacted by the Federal Motor
Carrier Safety Administration earlier this week and they have a right
to inspect all new trucking companies within the first 12 months. So
they called the defendant and they said, "We would like to inspect
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your trucks," and so the defendant told the Federal Motor Carrier
Safety Administration that he has not put any of these trucks into
service yet so he has not yet earned any income whatever through that
phony business.
So the FBI went to a meeting this morning where the
defendant was to bring these tractor-trailers for inspection by the
Federal Motor Carrier Safety Administration and he was arrested on the
charges in the indictment and those vehicles were seized. So his
statements to the Court that he lives in this big fancy house at 5114
Greythorne Lane and that he's the CEO of this trucking company, that's
just fraud. That's taxpayer money that he used to set that up. So he
wants to go back and continue living a life that is fully funded by
fraud money.
In addition to those things that I already named, he
bought himself a $118,000 BMW, an $87,000 Land Rover. He paid $15,000
to have plastic surgery to have his abs done, what they called
gladiator abs so he's willing to spend money and endure pain and
suffering to change his appearance. He went to New York and got that
plastic surgery done.
His parents still live in Ghana, as he indicated in his
Pretrial Services report, and he's wired more than $80,000 of the
fraud proceeds to his mother in Ghana. A large part of the stolen
money, Your Honor, is unaccounted for and so that creates an extra
risk of flight because the government was unable to trace that.
Despite our almost around-the-clock efforts for the last couple of
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months in trying to figure out where all that money went, there's
still a large part of that money that is unaccounted for.
This defendant has engaged in literally hundreds of
financial transactions with the fraud proceeds, including online
transfers between accounts, wire transfers, checks, cashier's checks,
debit cards, credit cards, and cash withdrawals largely to conceal and
disguise the nature and location, source, ownership, and control of
the bank fraud proceeds and then to convert the fraud proceeds to his
own use. He has a number of debit cards and credit cards that are
connected to his bank accounts and he uses those for all of his daily
living expenses. All of his groceries and all of his everyday living
expenses are being paid for by taxpayer money on those accounts that
are funded fully with the fraud proceeds.
We seized those bank accounts because there's no
evidence from his bank records that any legitimate money in any
significant amount went into any of those accounts. There are a few
checks in there for like 20 or 30 or $40 that the defendant got
because he was an extra in some television or movie productions, but
literally, you know, very small amounts of money. So almost all of
the money that is in those accounts and that he's been transferring
back and forth between those accounts and using to set up these
fictitious companies and to fund his upgraded lifestyle, that's fraud
money.
The fraud occurred in early 2021, that's when it began,
and then the defendant, on July 29th of 2021, went to the Superior
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Court of Cobb County, Georgia, and he filed a petition to change his
name from Karl Lucius Delano -- I'm sorry, from Carl with a "C"
Torjagbo to Karl Lucius Delano, Karl with a "K," and the petition was
granted on September 17th, 2021. But even though he legally changed
his name and even though he came to Court and he told the Court that,
in other papers that I've seen, he's using that name. He's used that
name to buy real estate, but he's used both names. He hasn't switched
over to the new name, he's just operating in two different identities.
He's created at least two -- well, before I get to
that, a number of courts, Your Honor, have said that the defendant's
use of an alias evidences a willingness and an ability to flee, United
States vs. Gillin, G-I-L-L-I-N, 345 F.Supp 1145, Southern District of
Texas from 1972, and United States v. Ferguson, which is a Michigan
case from 2013 finding that the defendant presented a flight risk
because he was able to obtain a driver's license with a false identity
once which meant that he likely could do so again.
So we think that changing his name for purposes of
leading this new life is extremely important. It appears that the
defendant comitted the frauds in the name of his birth name, this
Torjagbo, and then he thought he could change his name and create some
LLCs that are shell companies and just hide this fraud, this
$13 million fraud, he thought he could hide that and get away from it
by creating this new identity for himself. As I said, he's created
multiple bank accounts through the names of these fictitious entities,
two of them in the name of Kremkov Industries, one at Chase Bank, one
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at PNC Bank, and one at Bank of America in the name of FlyingJack
Freight and Logistics.
Also, we believe the defendant is a risk of flight
because he holds a U.S. passport. It doesn't expire until May 28th of
2025. But more importantly, the defendant is a licensed airline
transport pilot and a flight instructor. When I say "a licensed
airline transport pilot," I mean he is a commercial pilot. He flew
for FlyDubai Airlines and for SkyWest Airlines, those are two that we
know about. So even if this Court were to tell the defendant to turn
in your passport and turn in your pilot's license, we can't take away
his skill. His skill as a pilot is something that's going to remain
with him even if he doesn't have paperwork, and because there's such a
huge amount of money that's unaccounted for we think that the
defendant is a flight risk because he has this special skill that
would enable him to fly a plane and leave the country.
Another factor that the Court is asked to consider in
determining whether detention or bond would be the appropriate choice
is the nature and circumstances of the offense. As I said, the
defendant is charged with bank fraud, that carries a maximum
punishment of 30 years in a penitentiary, as well as two different
types of money laundering. Under 1956 each of those counts carries a
maximum punishment of 20 years in prison and under 1957 each of those
is 10 years in prison.
As this Court knows, danger to the community is not
limited to the threat of physical violence. Numerous courts have said
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that the term "dangerousness," as used in the Bail Reform Act, has a
much broader construction than might be commonly understood in
everyday life. There can be no question that an economic danger falls
under the broad umbrella of "dangerousness," as that term is used in
the Bail Reform Act.
This defendant appears to be a significant fraudster
and an economic danger to the community, if he's released from
custody, and the ease with which he committed these crimes and his
boldness, his daring to ask the federal government to give him $13
million in these two separate fraudulent transactions is staggering.
I mean, somebody who's got that kind of nerve, who knows what he might
be willing to do. The Seventh Circuit has said information that sheds
light on the defendant's honesty is a highly relevant factor in
determining whether the defendant should remain in custody or be
granted bond and thus is material, United States vs. Bedolla,
B-E-D-O-L-L-A, hyphen, Zabala, Z-A-B-A-L-A, from 2010.
The next factor the Court should consider is the weight
of the evidence. Your Honor, the evidence in this case is
overwhelming. The bank records and the records of purchasing these
motor vehicles and these real properties leave a paper trail a mile
long. There is no other person who has benefitted from these
fraudulent transactions other than the defendant. He spent all of the
money that we've been able to trace so far on himself for personal
luxuries and for building this new business in the name of FlyingJack.
He doesn't have any partners in that business, nobody else helped him
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submit the application, nobody else helped him submit the fraudulent
tax return. As far as we can tell, it's all on him.
He used his own social security number, his home
address, and his own name, Torjagbo, in filling out this application
that he submitted to Chase Bank and the loan proceeds were deposited
into a Chase account that he alone controlled and then he moved the
money from Chase to other accounts at PNC Bank and then Bank of
America that he alone controlled, there's no other signer on the
account. There's nobody else who has a right of withdrawal on any of
those accounts.
The next factor, Your Honor, is the person's physical
and mental condition. In June 2021, a month before he filed the
petition to change his name, the defendant paid a little bit over
$15,000 for plastic surgery in New York to surgically enhance his
appearance. While that may be a vanity issue that doesn't disguise
who he is, it certainly says something about his willingness to endure
what I would imagine is significant pain and suffering and spend
significant money to change his appearance. So if he's willing to do
that he might be willing to have other types of cosmetic surgery to
change his facial appearance and make it easier for him to avoid
capture if he's allowed out on bond.
The next factor is family ties or ties to the
community. The defendant was born in Ghana. He's wire transferred
more than $80,000 of the PPP loan proceeds to Ghana. According to
notes that are in these wire transfer records, his mother in Ghana is
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sick and he was sending her money for medical treatment, that's
another reason that he might want to go to Ghana and leave the United
States.
The defendant's ties to this state are hardly more than
a reflection of his criminal activities here. He's lived at this
address in Marietta, he says, since 2021, so a year or so. He lives
alone. He's unmarried, he has no children, no wife. Both his parents
and his siblings all reside in Ghana, that's according to his Pretrial
Services report.
The next factor, Your Honor, is employment. As I said,
the defendant states in his Pretrial Services report that he's
employed by FlyingJack Freight and Logistics. As I explained earlier,
that is a fictitious company. It was created with fraud money, it was
used to launder fraud money, and other than whatever people he's hired
to drive these trucks around for him temporarily, it's not an ongoing
business. Certainly the defendant should not be allowed to operate a
business that was fully funded with fraud proceeds.
Furthermore, that business is going to be effectively
shut down because this morning the FBI executed seizure warrants,
which are under seal -- I need to unseal those and I don't know if the
Court can do that orally or if I need to file a separate motion, but I
will do that. We obtained seizure warrants for those tractor-trailers
so that business doesn't have any assets, it's not going to be a going
concern when he leaves here today, if the Court lets him leave on
bond. So he doesn't have any employment to go to, he's not going to
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make any money from FlyingJack, and it's a fraud.
In his employment -- I'm sorry. In his PPP loan
application, which was filed on February 16 of 2021, he stated or
claimed that he had been employed by Kremkov Industries since December
31 of 2014, but the Georgia Secretary of State's records show that
that company was not created until January 4th of 2021, six years
after he said he had started working for Kremkov. He made that
statement under oath in his PPP loan application, that was false. The
Fifth Circuit has said "A job is meaningless as an indicator of future
appearances before the Court when it is directly connected to criminal
activity," that's United States vs. Rueben, 974 F.2d 580, 1992.
As far as the defendant's financial resources, as I
said, I'm not privy to the document that the defendant filed, but on
his tax return the defendant told the IRS that in 2020 he made
$9,199,411 in wages from Kremkov Industries, that was not true. He's
already made that false statement about his income so I wouldn't put a
lot of credence in anything that he says about his income that's not
actually backed up by some records.
I can state that I've reviewed those bank records and
those bank records do not show any deposits into any of the accounts
that he controls that came from any noncriminal source, other than
those minor and, in my view, insignificant payments that are deposits
from what appears to be working as an extra in a television or a movie
production. There's also no evidence that the defendant has any bank
accounts other than the accounts that we've identified that we traced
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the fraud money to. Those accounts don't show that he's moved money
to any accounts that we are unaware of and that we have not looked at
in detail.
The next factor, Your Honor, is the defendant's criminal
history. I'm sure that one way to look at it is to say, well, he
doesn't have any felony convictions and so somebody might be tempted
to write that off and say that's insignificant. But on Page 3 of the
Pretrial Services report I note not one, but two failures to appear,
allegedly, misdemeanor offenses. A failure to appear shows a
disrespect for the Court and for the legal process to not show up when
you're supposed to and the defendant has done that not once, but
twice.
In addition, the defendant has driven while he had a
suspended license. Again, it's a minor offense in the scheme of
things. The way that this Court normally deals with things -- this
Court is used to dealing with federal felony offenses and so driving
with a suspended license may seem like a minor thing. But, again, it
shows a lack of respect for the Court, it shows a lack of respect for
the law, and a willingness to just do whatever you want because it's
convenient for you.
In addition, the defendant has been charged with
aggravated assault, it was dead docketed, but it shows a tendency
towards violence. Again, he was charged in 2016 with intimidating and
harassing a 9/11 -- or a 911 operator and he was also charged with
simple battery and family violence and false imprisonment. Again,
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those were dead docketed. I assume that's because somebody who was a
recipient of that violence refused to prosecute, but it says something
about this individual in combination with all of these other factors.
It doesn't alone mean that he ought to be detained, I'm not arguing
that, but it is evidence of his lack of respect for the law and his
lack of willingness to abide by what the Court tells him he should do.
Your Honor, I'm happy to answer any questions, but
that's my presentation. Thank you for your time and, again, I
apologize for not having that form filled out earlier.
MR. SILAS: May I have just a moment, Your Honor?
THE COURT: Yes, you may.
MR. SILAS: All right. Your Honor, Mr. Torjagbo is a
42-year-old man who has no prior felony convictions at all. The case
before the Court, while certainly not insignificant, is not a case
that involves violence and, as I read the government's motion for
detention, while the government appears to have asserted during its
presentation -- or at least implied there was a risk of danger to the
public, the reason stated -- well, I guess the government did state
the safety of any other person in the community so I guess perhaps the
government's speaking in a more general sense. But in any event, this
is a case where -- we believe that it is not a case where there are no
set of conditions that could be set in place by the Court to ensure
both the appearance of Mr. Torjagbo and the community.
The Court certainly can require as conditions of bond
that Mr. Torjagbo obtain other employment. The Court can require that
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he be on a location monitor so the Court knows where he is. The
government is seemingly largely aware of the movements -- I do want to
note that the amount of money that Mr. Torjagbo that I understand he
actually received in connection with these loan applications is not
$9.5 million. Although perhaps he might have been approved for
$9.5 million, it's my understanding that at some point fairly early in
the process that accounts were frozen and that about $6.5 million of
the money was actually frozen. My understanding is that Mr. Torjagbo
actually received about $3 million in connection with that.
While there was money that was obtained in connection
with an IRS tax return, the money that was received, it's my
understanding, may have had some connection to other business activity
such as offshore drilling or something of that nature. But in any
event, when we look at what the government has identified in terms of
the various assets that are noted in the indictment in the case and
those that were referred to by Mr. Phillips, it does appear that, in
large part, the assets are there in the sense that there's a home that
Mr. Torjagbo resides in the Cobb County area and there are various
other pieces of property that have been purchased. The government has
identified a number of trucks. The government has indicated that it
has obtained seizure warrants -- I think 24 seizure warrants
apparently primarily relating at this point to tractors and trailers
that were purchased for use as part of FlyingJack Freight and
Logistics. That is, in essence, it appears in large part where the
money has actually gone.
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It appears to me that the fact that Mr. Torjagbo
actually took the money and actually put it into actually buying
physical assets like tractors and trailers suggests that his business,
FlyingJack Freight and Logistics, is not actually -- is not a shell
company at all. I mean, it is a company that actually has real
assets, it's a real business. It may be at a point in the process
where he had not been especially operational, that is, maybe it hasn't
done a lot of business, but it does appear that that actually is where
the money was going.
I would posit just based on -- while the government has
perhaps made out its case for why it believes that fraud was actually
committed in connection with the PPP loan process, that still doesn't
answer the question, at the end of the day, in terms of whether this
gentleman that's before the Court presents such a risk that the Court
has no alternative but to incarcerate him.
Again, he's 42 years old. He has no history -- no
prior felony convictions on his record at all. When we look at the
failure to appears that are referenced by the government in its
argument, those are things that happened back in 1999 and 2000. One
involved an unidentified misdemeanor offense at age 20 for
Mr. Torjagbo. The other relates to apparently the driving on a
suspended license. I will say that with regard to the earlier offense
that Mr. Torjagbo was not aware of any sort of failure to actually --
that he actually failed to appear for court appearances. But in any
event, when we look at his record, almost entirely are things that
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comprise traffic-related offenses.
We've got an aggravated assault arrest -- and I beg to
differ with the government. I don't think that the Court can glean
much discernible about any risk that Mr. Torjagbo would pose to the
public by virtue of the fact that there was a charge that was placed
on him back in 2015 for aggravated assault and the charge ultimately
was dead docketed. To me, that really says nothing that really gives
any meaningful information about the characteristics of Mr. Torjagbo.
There again, with regard to the matter in 2016 regarding a 911 call,
there again the charges were dead docketed so I would posit to the
Court there's not really much of anything that really can be gleaned
from that.
What we do know is that Mr. Torjagbo actually does have
some very substantial ties to the United States. Yes, he was born in
Ghana and he lived in Ghana, but he's actually a citizen of the United
States at this point. He's been living in the United States primarily
for the past 25 years. He came to the United States at age 17 to go
to school and he, in fact, did attend school there at the Florida
Institute of Technology in Melbourne, Florida, where ultimately he did
obtain a degree in aviation management there. He has primarily worked
in the United States. He's worked in the United States since then.
After getting his degree he went on to work as a civilian contractor
working with the Air Force and he provided -- he did provide flight
instruction there to members of the Air Force and he himself
eventually did become a member of the U.S. Armed Forces himself. He
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actually served in the Army, the U.S. Army, in 2011 himself.
He gained his citizenship and became a legal permanent
resident in 2008 or '09. In 2012, he actually became a citizen of the
United States. Yes, he has worked in an aviation-related field and he
has worked in Houston, he's lived in Atlanta, he's been living in
Atlanta now for approximately the past couple of years, but this is
not his first stint of actually living in the Atlanta area. He
actually has lived previously in Atlanta so he has a total of about
7 years that he's lived in the Atlanta area.
He has very substantial ties here and Mr. Torjagbo's
life here is in the United States. He's 42 years old. He left Ghana
when he was 17 years old so primarily since he was 17 years old he's
actually lived in the United States. This is where his life is, this
is where his home is, this is where his assets are. He basically has
no desire and no intention of living anywhere else.
While it may be the case that the business was -- that
Kremkov Industries was formerly licensed here in Georgia after 2020,
but my understanding from Mr. Torjagbo is this is a business that had
been operational for a substantial period of time even before that.
This is a business that operated initially with regard to mining in
Africa and he organized the business after 2020.
So because of covid, when he received money in relation
to the loan, he used the money, he did. I mean, he used money with
regard to his other business, but that was, in part, a reflection of
the financial distress that arose because of covid and it appeared
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that the money might be, I guess, better used and that he might be
able to make more productive use of the funds with regard to his
transport business that he was also in the process of starting, that
is FlyingJack Freight and Logistics.
I also understand from Mr. Torjagbo that his mother is
not -- his mother is not ill and that, in fact, he was in the process
of applying for his family to be able to come here with visas to visit
him.
Interestingly, the government noted with regard to
changes of appearance that Mr. Torjagbo has undergone surgery. But
notably, the surgery doesn't change meaningfully Mr. Torjagbo's
appearance. I mean, there's no indication that he's ever sought any
plastic surgery with regard to his face which would primarily be how
anyone would identify him. The government's contention is that
Mr. Torjagbo had some plastic surgery to his abdomen which is
generally covered by a coat and it wouldn't be the basis for
identifying some likeness. But in any event, I also understand from
Mr. Torjagbo that that surgery is related to a hernia and liposuction.
The government has identified the accounts that the
funds went into. I think it's notable that the government hasn't
actually been able to identify the accounts and also I think it's
notable with regard to risk of flight that it doesn't appear that the
monies were actually brought into accounts in different names. The
government has noted in its argument that the conduct by Mr. Torjagbo
was brazen. I would assert that the nature of the conduct does
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suggest something otherwise in terms of risk of flight.
The government notes that Mr. Torjagbo did the alleged
fraud in his own name, using his own social security, using his own
name, not the identity of someone else, not the identity of someone
made up. This is stuff that's all being done in his own name so he
could easily be traced and easily be found. There was no fake --
there was no false identity here. He has essentially legally changed
his name. He hasn't used a different name that is one that's made up.
He has since gotten a name change to a different name, but with regard
to the alleged fraud, it does not appear that the government is really
contending that Mr. Torjagbo tried to use some other identity to
conceal his tracks at all.
Again, I posit, Your Honor, that it would be a huge
step for the Court to -- simply based upon, primarily the facts of the
case, which is largely, it seems, what the government is standing on,
the amount of money that's involved in the case, the
misrepresentations that were made -- now, of course, PPP loan fraud --
many PPP loan fraud involves -- perhaps all involve some degree of
misrepresentation, that is the essence of the actual criminal conduct.
It's certainly fairly common that defendants in such cases receive
bond. In this case we have, again, a defendant who does not have a
substantial criminal history at all.
While the amount of money might have been substantial,
I would posit to the Court that the fact that Mr. Torjagbo has been
primarily in the United States for 25 years and does not have a
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significant history of failure to appear in court -- and I note that
the criminal history in the Pretrial Services report notes that
(inaudible) -- those cases are extremely dated and we don't know the
circumstances of them. What we do know is that the matters that were
involved in those cases were minor things.
I would posit to the Court that there are things that
could be put in place, whether it be some sort of security that would
be required, location monitoring, restriction as far as curfew,
requiring Mr. Torjagbo actually get some other employment, that he not
obtain employment in the commercial field. He doesn't have an
airplane. It appears that the government's actually in the process of
actually freezing his assets or essentially seizing all of the assets
of the FlyingJack Freight and Logistics business with regard to the
tractors and trailers involved. The government has identified the
pieces of property that he has. Certainly the government can take
other means to actually prevent the disposition with regards to the
property. The government has some ability here to limit the conduct
of Mr. Torjagbo going forward.
I would posit that despite the nature of the conduct,
the nature of the alleged document which the government asserts rests
on misrepresentation, that will be litigated over the course of time
and I posit to the Court that to the extent that the government has
argued about the nature of some of these expenditures that were made
by Mr. Torjagbo, such as the use of it on an abdomen modification, or
something of that nature, or using debit cards to pay for personal
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expenses, it appears to me that those arguments perhaps have more
powerful force with regard to sentencing than with regards to bond.
If the government wants to argue that that is a matter of aggravation
as to why the punishment should be reflective of that or to accomplish
that, that's one thing. But the fact that perhaps he used debit card
accounts to pay for his personal meals, that says nothing about
whether or not he presents a risk of flight or anything of that nature
or whether he presents a risk of danger to the public, which is really
the consideration that the Court has to decide here today.
I would posit that based upon what we know about the
alleged offenses that are set forth in the indictment and as
referenced by Mr. Phillips and the information that is set forth in
the Pretrial Services report, to me, I posit to the Court that those
things do not overcome the history that Mr. Torjagbo has established
over the course of the past 25 years in the United States. In
essence, he has been an upstanding person and he has not been a person
who has conducted himself in such a way that the Court can contend
there's no way that the Court can have any reason to believe that if
the Court were to let him out the Court could control him and have him
appear back.
THE COURT: Thank you.
MR. PHILLIPS: May I respond just briefly?
THE COURT: Sure.
MR. PHILLIPS: Mr. Silas was talking about the
$9.5 million in PPP being put in the Chase account and he talked about
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that account being frozen, let me explain what happened. After the
money was deposited into the account the defendant wrote a check for
$3 million payable to Kremkov Industries and he moved it from Chase
Bank to PNC Bank and on that check he wrote a note in the "for"
section and he said "payroll" and so that was a lie. That was done to
conceal and disguise the truth about that transfer. It wasn't payroll
because he didn't have a payroll, he didn't have any employees. He
just moved money from one account in the name of a shell company to
another account at a different bank in the name of that same shell
company. Then what did he do with it? He proceeded to buy himself a
$1.7 million house, an $118,000 BMW, an $87,000 Land Rover and on and
on and on, all those things I talked about, and to pay all his
personal expenses.
So when that happened Chase Bank got concerned and they
took action because they thought it was a fraud and they clawed back
the remaining money from that account, but he had already moved $3
million to PNC and then he deposited his fraudulent tax refund, the
3.3 million and change, into that PNC account. So at least at one
time he had more than $6.3 million. There's one transfer, one, where
he moves $6 million in an online transfer from one account to another,
there's no reason to do that. You don't need all these multiple
accounts unless you're trying to hide it. Then he engages in all this
new behavior in his new name and he creates this new company out in
Wyoming called FlyingJack Freight and Logistics and sets himself up in
the new business.
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Mr. Silas, you know, he's a great lawyer. He's doing
everything he can to put his client's actions in a positive light, but
to say that this company existed before -- this Kremkov Industries
existed before the PPP deadline, filing deadline, is just simply not
true. I'm not saying he's lying. He doesn't understand the facts
about that because his client is telling him that the company existed.
It didn't.
He says this company was in the gold mining business,
but when he filed his PPP loan application he told JPMorgan Chase Bank
the same thing that he told the Georgia Secretary of State. He said
that company is located in Douglasville, Georgia, and the address that
he gave was his home address. How can one have 493 employees at your
home? It's a single-family residence in a subdivision. Of course he
didn't have 493 employees. So to argue that the company was somehow
in business in some other state or some other country or whatever
beforehand, it's preposterous. It's a shell company, it was used
purely for fraud and for money laundering.
THE COURT: Okay. Thank you.
Based on the information presented to the Court, we
have a case in which the defendant's alleged to have defrauded the
U.S. government out of $9.5 million. Actually, seeking 13 million,
even though 9.5 is in the indictment, that is a substantial sum of
money. Even if the bank clawed back 6 million of it, we still have in
excess of 6 million still outstanding.
The Court notes a couple of things. That the
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information the defendant provided to the Pretrial Services officers
was not verified, he didn't have anybody that can verify any of the
information. The Court finds that he does not have substantial ties
to the charging district. He's lived at this address for a year. I
understand counsel is arguing, based on information provided to him by
his client, that he's been in the U.S. for 20 something years. The
Court notes its concern about his use of an alias or changing his
identity - again, the new name - after the alleged criminal conduct at
issue. The Court notes the defendant has ties to a foreign country
and that his family resides in Ghana where he was born. The Court
also notes with regard to the alternative name or the new identity,
the alias, he's alleged to have committed fraud in both names. The
Court finds there's no verifiable, what appears to be, legitimate work
history. The Court also notes the defendant, who was a trained pilot,
is unable to find his passport and could not recall where his passport
would be.
I'm mostly concerned he's a licensed pilot, there's a
substantial sum of money that is still outstanding here, we don't know
what -- even though the government has indicated it has a substantial
number of seizure warrants, no one knows exactly what's left in those
accounts, if anything. There may be cash that's waiting there and you
are a pilot and you can rent something to flee the country to a nearby
island. This was a lot of money barely a year ago. We're not talking
about conduct in 2018 or 2017 or 2019. We're talking about
substantial sums of money that you had last year.
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You were in the military, I noticed you didn't mention
that to Pretrial Service or your pilot experience, which would be
normally a positive for risk of flight. You're in the Armed Forces,
you're a pilot, you know, (inaudible), work history, things of that
nature, and so the Court finds, in light of the extensive -- I did
notice, before Mr. Phillips indicated, that this was the largest sum
of PPP money fraud that I have seen. But what stands out to me most
is the concern about the pilot. If the allegations are true in the
underlying case, you are quite bright to engage in this type of fraud,
to an extent, not counting using your own information, but it's
extensive. It was an extensive number of transactions between
accounts transferring here and there, the tax $3 million refund from a
business that allegedly did not exist or income you did not make.
So the Court finds that, for these and other reasons, I
am going to detain him until these charges are resolved deeming that
you are a risk of flight and the type of fraud engaged here, the Court
is concerned about the security of the community with regard to this--
it was meant for small businesses, legitimate businesses, not for you
to form a business after the fact after you have bought luxury items
for yourself, personal items for yourself. So I don't think I can
fashion conditions that will ensure your appearance in Court or that
you're going to continue to engage in some type of similar economic
fraud so the Court is going to detain you until these charges are
resolved.
Anything else on behalf of either party?
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MR. PHILLIPS: Not for the government.
THE COURT: And I didn't say your ties to Ghana. I'm
going to say that, too. I said earlier you don't know where your
passport is and the house you live in appeared to be something that
was purchased by fraud. So for these and other reasons, I didn't go
through each and every reason, but these are the substantial reasons
the Court is concerned that you're a risk of flight and a danger to
the community.
MR. SILAS: Your Honor, I know the Court has made its
decision. May I say a couple things for the record?
THE COURT: Sure.
MR. SILAS: Mr. Torjagbo would like the Court to know
that he did report to immigration that he lost his passport and
citizenship document. He made that report back in August of 2021 and
the matter is still pending at this point. So he doesn't have his
passport, but he has made an official report to the government that
those items were lost. He believed that they were taken from his
house perhaps when he separated from an ex-girlfriend and perhaps she
took those items, that's why he doesn't have them.
He would also like the Court to know that he is a
commercial pilot, but he's unable to -- he can't fly a commercial
plane by himself, he doesn't have the ability. To the extent that
would provide some assurance to the Court, that he doesn't have access
to any sort of commercial plane.
THE COURT: Okay. With regard to the passport, he was
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able to -- allegedly, if the allegations in the underlying indictment
are true, he was able to manufacture substantial documents to engage
in the alleged conduct so he would probably be likely to be able to
obtain a passport, even if he couldn't find his legitimate one, and
because there's a substantial amount of money missing, that money
could be used to hire a pilot to fly you somewhere close to here. In
any event, thank you for that information, it's noted on the record,
but it does not change the Court's opinion.
I'd also at this time remind the government of its
obligation to comply with the Due Process Protection Act, Rule 5(f)(1)
of the Federal Rules of Criminal Procedure. Counsel is reminded of
your obligation under Brady and its progeny to disclose evidence that
is favorable to the defendant and material to either guilt or
punishment. The failure to do so in a timely manner may result in the
suppression of evidence, the dismissal of some or all counts, or other
remedies that are just under the circumstances.
Okay. Anything else at this time on behalf of either
party?
MR. PHILLIPS: Not for the government.
MR. SILAS: No, Your Honor.
THE COURT: If there's nothing else before the Court,
Court is in recess.
(proceedings concluded)
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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
CERTIFICATE OF REPORTER
I do hereby certify that the foregoing pages are a true and
correct transcript of the proceedings taken down by me in the case
aforesaid.
This the 27th day of May, 2022.
/S/ Alicia B. Bagley
ALICIA B. BAGLEY, RMR, CRR
OFFICIAL COURT REPORTER
(706) 378-4017
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