Complaint as to Carlos Vazquez (1). (cg1) [1:21-mj-02512-CMM] — USA v. Vazquez (Dkt. 3, S.D. Fla. No. 1:21-mj-02512, docketed in No. 1:21-cr-20231)

Record facts

U.S. District Court for the Southern District of Florida · No. 1:21-cr-20231-DMM · Doc. 3 · 2021-03-18 · Docket on CourtListener

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Case 1:21-cr-20231-DMM Document 3 Entered on FLSD Docket 03/18/2021 Page 1 of 8

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO. _21-mj-02512 McAliley

FILED BY___CG__D.c.
UNITED STATES OF AMERICA

Mar 18, 2021
" ANGELA E. NOBLE
CLEAK U.S. BIST. CT.
CARLOS VAZQUEZ, §. D. OF FLA. - MIAMI, FL

Defendant.
/

CRIMINAL COVER SHEET

1. Did this matter originate from a matter pending in the Central Region of the United States
Attomey’s Office prior to August 9, 2013 (Mag. Judge Alicia Valle)? |= Yes X_ No

2. Did this matter originate from a matter pending in the Northern Region of the United States
Attorney's Office prior to August 8, 2014 (Mag. Judge Shaniek Maynard)? Yes X No

3. Did this matter originate from a matter pending in the Central Region of the United States
Attorney's Office prior to October 3, 2019 (Mag. Judge Jared Strauss)? _ Yes X_ No

4. Did this matter originate from a matter pending in the Southern Region of the United States
Attorney’s Office prior to November 23, 2020 (Judge Aileen M. Cannon)? ___ Yes X.No

Respectfully submitted,

ARIANA FAJARDO ORSHAN
UNITED STATES ATTORNEY

BY: Nayden 2. O'Gyane
Haygfen P. O’Byrne Va
Assistant United States Attorney
Southern District of Florida
Fla. Bar. No. 60024
99 Northeast 4th Street
Miami, Florida 33132-2111
Telephone: (305) 961-9447
E-mail: hayden.obyrne@usdoj.gov
Case 1:21-cr-20231-DMM Document 3 Entered on FLSD Docket 03/18/2021 Page 2 of 8

AO 91 (Rev, 08/09) Criminal Complaint

UNITED STATES DISTRICT COURT

for the
Southern District of Florida

United States of America )
V. )
) Case No. 21-mj-02512 McAliley
CARLOS VAZQUEZ, )
)
)
Defendant(s)

CRIMINAL COMPLAINT BY TELEPHONE OR OTHER RELIABLE ELECTRONIC MEANS

I, the complainant in this case, state that the following is true to the best of my knowledge and belief.

On or about the date(s) of | June 18 - December 31, 2020 in the county of Miami-Dade in the
Southern District of Florida , the defendant(s) violated:
Code Section Offense Description
18 U.S.C. §§ 1343 and 2 Wire Fraud

This criminal complaint is based on these facts:

SEE ATTACHED AFFIDAVIT.

Continued on the attached sheet.

ae Complainant's signature

Giovanni Donies, Special Agent, IRS-Cl

Printed name and title

Attested to by the Applicant in accordance with the requirements of Fed.R.Crim.P. 4.1 by Face Time

Date: __ March 18, 2021 Cheeses a ee

Judge's signature

City and state: Miami, Florida __ ___ Hon. Chris M. McAliley U.S. Magistrate Judge

Printed name and title
Case 1:21-cr-20231-DMM Document 3 Entered on FLSD Docket 03/18/2021 Page 3 of 8

AFFIDAVIT
I, Giovanni Donies, being first duly sworn, hereby depose and state as follows:

INTRODUCTION AND AGENT BACKGROUND

iP I am a Special Agent with the United States Department of the Treasury, Internal
Revenue Service, Criminal Investigation (“IRS-CI”) and have been employed in this capacity since
October 2016. I have received extensive training in the investigation of bank fraud, mail fraud,
access device fraud, and identity theft. I have also actively participated in federal financial
criminal investigations. I am an investigative or law enforcement officer of the United States
within the meaning of Title 18, United States Code, Section 2510(7), in that I am empowered by
law to conduct investigations of, and make arrests for, offenses enumerated in Title 18 of the
United States Code.

2. This Affidavit is made in support of a criminal complaint charging Carlos Vazquez
(“Vazquez”) from on or about June 18, 2020, through December 31, 2020, with wire fraud, in
violation of Title 18, United States Code, Sections 1343 and 2. This Affidavit is based upon my
personal investigation and investigation by others. The facts contained herein have been obtained
by examining documents and records obtained during the investigation as well as through other
means. The Affidavit does not include every fact known to me about this investigation, but rather
only those facts sufficient to establish probable cause. |

PROBABLE CAUSE

The Paycheck Protection Program
3. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal
law enacted March 27, 2020 to provide financial assistance to Americans suffering economic

harms from the COVID-19 pandemic. One source of relief provided through the CARES Act is
Case 1:21-cr-20231-DMM Document 3 Entered on FLSD Docket 03/18/2021 Page 4 of 8

the authorization of forgivable loans to businesses for job retention and certain other expenses,
through a program called the Paycheck Protection Program (“PPP”).

4, To obtain a PPP loan, a qualifying business is required to 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 to be eligible to obtain the PPP loan. In
the PPP loan application (Small Business Administration (“SBA”) Form 2483), the small business
(through its authorized representative) is required to provide, among other things, its: (a) average
monthly payroll expenses; and (b) number of employees. These figures were used to calculate the
amount of money the small business was eligible to receive under the PPP. In addition, businesses
applying for a PPP loan were required to provide documentation confirming their payroll expenses.

5. 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 monies, which
are fully guaranteed by Small Business Administration (“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.

6, The Cares Act specifies eligibility criteria that a participating lender must consider,
specifically,

In evaluating the eligibility of a borrower for a covered loan with the terms

described in this paragraph, a lender shall consider whether the borrower-- was in

operation on February 15, 2020; and had employees for whom the borrower paid
salaries and payroll taxes; or paid independent contractors, as reported on a Form
1099-MISC.

15 U.S.C. § 636 (a)(36)(F)Gi)(ID)(aa)-(bb).
fe 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

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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 amount of

the PPP loan proceeds on payroll expenses.

The Fraudulent PPP Loan Disbursed to Big League

8. On or about June 30, 2020, Vazquez electronically submitted a PPP loan
application and supporting documents on behalf of Big League L.L.C (“Big League”), via
interstate wire, to Kabbage, Inc. (“Kabbage”) through an IP address associated with T-Mobile in
Miami, Florida. These documents included: (1) a purported Big League Form W-3 for 2019; (2)
a copy of Vazquez’s Florida Driver’s License; (3) a completed PPP loan application form (the
“Application”); (4) a resolution to borrow; and (5) a promissory note.

9. The Application contains materially false statements, specifically:

a. Carlos Vazquez initialed the certification affirming that the applicant, Big
League, “was in operation on February 15, 2020 and had employees for
whom it paid salaries and payroll taxes or paid independent contractors, as
reported on Form(s) 1099-MISC;”

b. The Application states that Big League’s average monthly payroll is
$368,750.00;

Cs The Application states that Big League has 64 employees.

10. The Application lists Vazquez as the CEO and 100% owner of Big League and is
electronically signed by “Carlos Vazquez.” A copy of Vazquez’s Florida Driver’s License was
uploaded with the Application.

11. The purported Form W-3 for Big League included with the Application showed
payroll of $4,425,000 for the year, for 64 employees. That payroll figure yielded the PPP loan

application’s “Average Monthly Payroll” figure of $368,750, which determined the $921,875

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Case 1:21-cr-20231-DMM Document 3 Entered on FLSD Docket 03/18/2021 Page 6 of 8

amount of the loan. The Form W-3 appears to be signed by Vazquez and the signature on Form
W-3 appears similar to the signature on Vazquez’s Florida Driver’s License.

12. According to the Florida Department of State, Vazquez reinstated Big League on
June 24, 2020. Vazquez filed the 2020, 2019 & 2018 annual reports on the same day.

13. Florida Department of Revenue records show that neither Big League nor Vazquez
ever registered with them to file taxes, Additionally, Florida Department of Revenue does not
have any records of reported wages or employees tied to Vazquez.

14. The day before filing the Application, on June 29, 2020, Vazquez opened a
JPMorgan Chase business account for Big League and presented his Florida Driver’s license as
part of the opening process. Vazquez is the sole signatory on this account.

15. Based on the representations made in the loan application paperwork and
supporting documents, the Application for Big League was approved, and on or about July 6, 2020,
Kabbage wired approximately $921,875 in loan proceeds from outside the State of Florida into the
Big League bank account at JPMorgan Chase in the Southern District of Florida.

16. | The Application lists the business address for Big League as an apartment (the
“Apartment”) in Miami, Florida. This address appears to be a four-floor residential
apartment/condominium building in the Blue Lagoon area. The Miami-Dade Property Appraiser
website lists Vazquez as the owner of the Apartment. Law Enforcement has surveilled this
Apartment and did not observe any activity appearing to be business-related.

17. Comcast has provided high speed internet at the Apartment from at least January 6,
2019 until December 7, 2020, and the subscriber is identified as Carlos Vazquez, with a T-Mobile

telephone number ending in 9484. This telephone number is also listed in the Application.

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Case 1:21-cr-20231-DMM Document 3 Entered on FLSD Docket 03/18/2021 Page 7 of 8

Additionally, a Comcast IP address (ending in 151) assigned to the Apartment was used to log into
the Kabbage account for this loan as early as June 18, 2020.

18. JPMorgan Chase and Kabbage records further show that on June 30, 2020 someone
logged into Vazquez’s JPMorgan Chase business account for Big League from the same IP address
(ending in 167) that was used to apply for the PPP loan that same day. Records for the subscriber
associated with the IP address ending in 167 are pending.

19. [have reviewed the JPMorgan Chase bank records for the account controlled by
Vazquez, which confirmed Vazquez’s receipt of Big League’s PPP loan proceeds. Specifically,
on or about July 6, 2020, Kabbage wired the loan amount of approximately $921,875 into the Big
League account at JPMorgan Chase. On or about September 19, 2020, Vazquez began writing
hundreds of checks, disguised as payroll checks, from the account to himself and others to dissipate
the loan proceeds. These payouts continued through December 31, 2020. During that period, the
JPMorgan Chase account has no other withdrawals outside of the disguised payroll checks,

[This Space Intentionally Left Blank]

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Case 1:21-cr-20231-DMM Document 3 Entered on FLSD Docket 03/18/2021 Page 8 of 8

CONCLUSION

20. Based on the forgoing, I respectfully submit that there is probable cause to believe
that Carlos Vazquez committed a wire fraud scheme in violation of Title 18 United States Code,

Section 1343 and 2, from on or about June 18, 2020, to on or about December 31, 2020, in the

Giovanni Donies
Special Agent
IRS-CI

Southern District of Florida, and elsewhere.

Attested to by the applicant in accordance
with the requirements of Fed. R. Crim. P. 4.1
byFace Time on this _jgth day of March 2021.

‘ Qn

Chis Ati/s<.
HONORABLE CHRIS M. MCAKJLEY
UNITED STATES MAGISTRATE JUDGE

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