Attachment B — USA v. Crowther (Dkt. 140.2)

Record facts

U.S. District Court for the Middle District of Florida · No. 2:20-cr-00114 · Doc. 140-2 · 2021-04-09 · Docket on CourtListener

Full text

COMPOSITE 
ATTACHMENT
“B” 
Case 2:20-cr-00114-JES-M_M     Document 140-2     Filed 04/09/21     Page 1 of 6 PageID
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UNITED STATES DISTRICT COURT 
MIDDLE DISTRICT OF FLORIDA 
FORT MYERS DIVISION 
 
 
UNITED STATES OF AMERICA,      ) Fort Myers, Florida 
                               ) 
                               ) Case 2:20-CR-114-FtM-66MRM 
Plaintiff                      ) 
                               ) Wednesday, March 23, 2021 
vs.                            ) 
                               ) 1:38 p.m. to 3:51 p.m. 
CASEY DAVID CROWTHER,          ) 
                               ) Courtroom 5D 
Defendant                      ) 
_______________________________)  
 
 
 
TRANSCRIPT OF JURY TRIAL TESTIMONY OF JOHN MILLER 
 
HELD BEFORE THE HONORABLE JOHN E. STEELE, 
 
United States District Court Judge 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                            Official Court Reporter: 
                            Jeffrey G. Thomas, RPR, CRR 
                            2110 First Street, Suite 2-194 
                            Fort Myers, FL  33901 
                            Telephone:  (239) 461-2033 
 
 
(Proceedings reported by Stenotype; Transcript produced by 
computer-aided transcription.) 
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JOHN MILLER - CROSS/DICKERSON
yourself first.
(Witness examines evidence.) 
Q
Okay, sir.  Do you recall reviewing this IFR when it was
published?
A
Yes.
Q
And, when you reviewed this when it was published, what
was your understanding of this IFR?
A
This IFR was a consolidated IFR that was issued after
the passage of the -- well, it's for loan forgiveness and loan
review as provided by the Economic Aid Act.
Q
And we haven't talked about the Economic Aid Act yet.
What is that?
A
The Economic Aid Act was another of the stimulus . . .
stimulus acts, or programs, that was passed by Congress and
signed by the President.  I believe it was signed at the end of
December.
Q
Okay.  And so this IFR is saying anything from the
Economic Aid Act overrides any conflicting past, previous
guidance in the FAQs, and the SBA will be revised in the FAQs;
correct?
A
It does state SBA will be revising the FAQs.  It
overrides any conflicting guidance in the FAQs.  So, if there
wasn't conflicting guidance, then the other guidance would
stand.  And it says that the SBA will be revising the FAQs to
conform.
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JOHN MILLER - CROSS/DICKERSON
account, a segregated account?
A
When you segregated account.
Q
So when the lender then provided the funds to the
borrower, was it required to be in a segregated account?
A
The Act -- I don't recall anything requiring that.
Q
And so if the borrower commingled it by not having a
separated account, but just went directly to the operating
account, that was permissible.
A
I don't know about when you say commingling, but the --
Q
Well, let me define it.  Commingling is I have $500,000
in my account right now.  The bank then deposits the PPP money
into that $500,000 account.  Now I have -- let's say it's a
million-dollar loan -- a $1.5 million balance.
A
That would be permissible.
Q
So there's no requirement to have a standalone account,
and it can be commingled with the other bank account.
A
If your definition of commingling, yes, is that it's
deposited into an account with other funds, then yes.
Q
Okay.  And then, for the loan, the borrower had, at
first, eight weeks to use the loan proceeds for the eligible
purposes if they wanted forgiveness.
A
That's correct.
Q
And then it extended to 24 weeks.
A
Yes.  Under the Flexibility Act, it was extended.
Q
So if that money from the bank is deposited in the
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JOHN MILLER - CROSS/DICKERSON
limitations though.  I want to point that out.  Right before
that.
Q
And where does it say the limitations?
A
That same sentence.  "Section 7A of the Small Business
Act provides that, subject to several important limitations,
borrower shall be eligible for forgiveness."
Q
Right but this was an add-on to the 7A; correct?
A
That's correct.
Q
And correct me if I'm wrong, 7A SBA loans are directly
from the SBA to the actual borrower?
A
No, they are not.  They are guaranteed loans, as well.
Q
Okay.  So, when is the SBA proceeds ever come into play
with regard to a 7A loan, is it only during either the guaranty
when there's a default, or with a Paycheck Protection Program
when there's actually forgiveness?
A
Yes.  The government funds would only come into play for
a 7A loan in the event of a guaranty purchase, as you
suggest -- or when a guaranty is honored.  Or in the case of
the Paycheck Protection Program forgiveness.  Some of the
funds, though, are also issued to lenders for processing loans.
They are paid a fee in the PPP loan.  I just want to point that
out.
Q
But, with a borrower who has not defaulted on the loan,
and a borrower who has not applied for forgiveness, there's no
SBA proceeds applied to that loan.
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JOHN MILLER - CROSS/DICKERSON
A
Not to the loan; correct.  There would have been
proceeds applied to the lender for making that loan.
Q
That goes to the lender.
A
That goes to the lender.  Correct.
Q
But no SBA proceeds going to the borrower.
A
No SBA proceeds going to the borrower; correct.
Q
And do you have any direct knowledge or information
about the Target Roofing PPP application?
A
None.  No.
Q
And none about the forgiveness eligibility, nothing;
right?
A
No.  I don't know if a forgiveness application was
submitted.
Q
You don't even know if a forgiveness application was
submitted.
A
That's correct, I do not know.
Q
Okay.  And you made a comment about if the SBA . . . I
think -- I don't want to paraphrase it, so correct me if I'm
wrong.  If an applicant uses the proceeds knowingly wrong, the
SBA will ask them for repayment?
A
Actually, if the SBA -- I'm not sure that that's what I
said.
Q
All right.  Well, tell me.  I want your words.
A
Okay.  If -- if the SBA -- if a borrower knowingly uses
the proceeds for an unauthorized purpose, the borrower could be
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