Indictment as to Craig David Davis (1) count(s) 1-4 — USA v. Davis (Dkt. 1, E.D. Va.)

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U.S. District Court for the Eastern District of Virginia · No. 1:24-cr-00040-PTG · Doc. 1 · 2024-02-15 · Docket on CourtListener

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IN THE UNITED STATES DISTRICT COURT FOR TI
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
' '52024
UNITED STATES OF AMERICA,
V.
CRAIG DAVID DAVIS,
Defendant.
UNDERSEAL
. No. l:24-CR-40
Counts 1-4: 18 U.S.C. § 1343
(Wire fraud)
Foifeiture Notice
INDICTMENT
Febiuaiy 2024 Teiin - 
At Alexandria
THE GRAND JURY CHARGES THAT:
Introduction
At times material to this Indictment;
1. 
CRAIG DAVID DAVIS ("DAVIS") was the owner and operator of Bright
Vanguard, LLC ("BV") for which DAVIS filed a Certificate of Formation with the Secretary of
State of Texas in 2015. DAVIS described BV to others as a business that provided computer
software, hai'dwai*e, and storage space to other businesses. BV's mailing address was in San
Antonio, Texas.
2. 
Bank-1, BanIc-2, and Banlc-3 were banlcs headquaitered in the United States with
deposits insui'ed by the Federal Deposit Insurance Corporation.
3. 
The Federal Reserve Bank of Boston ("FRBB") in Massachusetts was one of
twelve Federal Reserve Banks within the nationwide Federal Reserve System overseen by the
Federal Reserve Board ("FRB").
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4. 
The Department of the Treasury ("Treasury") was a department within the United
States Government headquartered in Washington, D.C.
5. 
The Small Business Administration ("SEA") was an agency within the United
States Government headquartered in Washington, D.C.
6. 
• The Coronavh'us Aid, Relief, and Economic Security ("CARES") Act was a
I  federal law enacted in March 2020 designed to provide emergency financial assistance to
Americans suffering the economic effects caused by the Covid-19 pandemic. One source of
relief provided by the CARES Act was the authorization of forgivable loans to small businesses
to help with payroll and other business expenses through the Payroll Protection Program ("PPP")
overseen by the SEA.
7. 
To obtain a PPP loan, a qualifying small business had to submit a PPP loan
application signed by an authorized representative of the business. The PPP loan application
required the business through its representative to acknowledge the program rules and malce
certain afiiimative certifications. The loan application required the busmess to state, among
other things, its monthly payroll expenses, and number of employees. These figures were used
to calculate the amount of money the business was eligible to receive under the PPP. In addition,
the applicants were required to provide documeiitation showing then payroll expenses. Lenders
relied on the accuracy of the information contained in the PPP applications and supporting
documents.
8. 
Small businesses applied for PPP loans with private lenders, including banlcs, that
had been approved to participate in the program by the SEA. When lenders decided that
applications were ready for approval, the lenders sent electronic communication to the SEA E-
Tran computer server in Sterling, Virginia, in the Eastern District of Virginia, containing data
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from and related to the applications, including the identities of the applicants and the amounts of
tlie proposed loans. The SB A E-Tran server processed the applications electronically. The SEA
also used the B-Tran server to send return communications to notify lenders that loans could be
ftinded as part of the PPP program. Specifically, the SEA used the E-Tran server to send an
SEA loan number for the lender to use when making the PPP loan. The lenders used their own
frmds to make the PPP loans, but the loans were guaranteed 100 percent by the SEA.
9. 
The SEA required that PPP loan proceeds be used for certain expenses, including
payroll, rent, mortgage payments, and utility charges. A representative of a PPP loan recipient
could apply through its private lender for forgiveness of the principal and interest payments by
certifying that the business had used the loan proceeds as required during a specified time period
and that a specified percentage of the proceeds had been used for payroll.
10. 
The CARES Act also authorized the Main Street Lending Program ("MSLP").
The MSLP was an emergency lending program established by the PRE, with prior approval by
the Secretary of the Treasmy, in accordance with section 13(3) of the Federal Reserve Act. The
MSLP was designed to support lending to small and medium-sized businesses that were in sound
financial condition before the onset of the Covid-19 pandemic. As part of the MSLP, the FREE
established MS Facilities LLC ("MS Facilities"), a special-purpose vehicle, that boiTOwed
money from the FREE and used the frmds to purchase 95 percent of the loans made by Private
Lenders (defined below) that confoimed to the terms of the MSLP program. The FREE was the
Managing Member of MS Facilities, and Treasury, which contributed capital to MS Facilities
using fimds appropriated by the CARES Act, was the Preferred Equity Member.
11. 
MSLP applicants, through their representatives, applied for their loans with
private lenders, such as banlcs ("Private Lenders"), that had been approved by the FREE for
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making MSLP loans. The boiTOwers had to meet the eligibility requirements set by the MSLP
and certify that they would abide by the tenns of the progi'am. MSLP borrowers also had to
meet any additional eligibility requirements set by the Private Lenders and agree to comply with
any additional terms set by the Private Lenders. The MSLP and Private Lenders required
applicants to submit accuiute financial information to support their applications. The MSLP and
Private Lenders also required that the loan proceeds be used for business expenses, and Private
Lenders, often requhed more specific representations by the representatives of the businesses.
Private Lenders relied on the accuracy of the information contained in the loan applications and
supporting documents.
•
 12. 
When one of the Private Lenders decided that an applicant met the requirements
of the MSLP and the Private Lender, the Private Lender sent MS Facilities infoimation about the
boiTower and the requested loan amount. After MS Facilities had approved the loan, MS
Facilities sent the Private Lender a commitment letter stating, among other things, that MS
Facilities would purchase 95 percent Of the loan. The Private Lenders kept five percent of the
loans and were responsible for servicing the loans. The MSLP deferred interest payments until
the second year of each loan, the first repayment of principal until the third year of each loan,
and the final repayment of principal until the fifth year of each loan. All MSLP loans were made
between July 2020 and January 2021 and were not forgivable.
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Counts 1-4
(Wire fraud)
13. 
Pai-agraphs 1 through 12 of the Indictment are re-alleged and incoiporated by
reference as though fully set forth herein.
14. 
Beginning in or ai-ound April 2020, and continuing through at least in or around
June 2021, in the Eastern District of Virginia and elsewhere, the defendant,
CRAIG DAVID DAVIS,
did knowingly devise and intend to devise a scheme and aitifice to defi'aud and to obtain money
and property by means of materially false and fraudulent pretenses, representations, and
promises and, knowingly transmitted and caused to be transmitted by means of wire and radio
communications in interstate commerce certain wiitings, signs, signals, pictures, and sounds for
the purpose of executing such scheme and artifice.
Purpose and Objects of the Scheme and Artifice
15. 
It was a purpose and object of the scheme and artifice to defraud for DAVIS to
unlawfully enrich himself by, among other things: (a) submitting and causing the submission of
false and fi'audulent PPP and MSLP loan applications to banks and financial institutions; (b) falsely
promising to use the loan proceeds on permitted business expenses under the PPP and MSLP; and
(c) concealing and causing the concealment of the scheme.
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Ways. Manner and Means of the Scheme and Artifice
PPP Application to Bank-1
I 16. 
Between on or about April 1,2020, and on or about April 21,2020, DAVIS
submitted an application for a PPP loan for $341,300 to Banlc-1 for BV, which DAVIS knew
included false information, including false employee payroll infoimation, a false Social Security
number ("SSN") for himself, a false Employee Identification number ("BIN"), false IRS Form
941 s, and false attestations.
17. 
On or about September 16,2021, DAVIS applied to have the PPP loan j&om
Bank-1 to BV forgiven. In his application, DAVIS falsely attested, among other things, that the
information in the application, including information related to BV's employees, was tme and
accurate. Banlc-1 denied the application.
18. 
It was further part of the scheme that DAVIS concealed and caused to be concealed
the fi-audulent natm*e of the PPP application.
PPP Applications to Bank-2
19. 
Between on or about April 27,2020, and on or about April 29,2020, DAVIS
submitted an application for a PPP loan for $354,000 to Bank-2 for BV, which DAVIS knew
included false information and documents, such as a false name, false employee payroll
information, a false SSN for himself, false IRS Form 941s, and false attestations.
20. 
On or about February 25,2021, DAVIS sent a preliminary application to Bank-2
to obtain a second-draw PPP loan. In support, DAVIS provided false IRS Form 941s for 2020, a
false profit and loss statement for BV, and a false SSN for himself. Bank-2 denied the
apphcation.
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21. 
It was forther part of the scheme that DAVIS concealed and caused to he concealed
the fraudulent nature of the PPP applications.
MSLP Application to Bank-3
22. 
In and around 2020, DAVIS engaged a firm that helped clients obtain financing
for their businesses. DAVIS worked with a representative of that firm, C.G., purportedly to
assist DAVIS in obtaining a loan for BV to expand BV's operations. DAVIS provided C.G.,
both directly and indirectly, witli information and documents purporting to show BV's financial
condition, such as federal tax returns for BV for 2018 and 2019.
23. 
On or about July 3,2020, on behalf of DAVIS and BV, C.G. contacted a
representative of Bank-3, B.M., by email to indicate DAVIS's and BV's interest in obtaining a
loan.
24. 
On or about July 7,2020, on behalf of DAVIS and BV, C.G. communicated with
B.M. by email to confirm that DAVIS and BV were interested in obtaining an MSLP loan for
BV from Bank-3. In that same email, C.G. provided B.M. with documents lhat falsely
represented BV's financial condition. These documents were supplied to C.G. by DAVIS and
included, among other items, false tax returns and false financial statements for BV. Several of
these documents contained false SSjMs for DAVIS and false EINs for BV.
25. 
Beginning in or around July 2020, and continuing through in or around December
2020, C.G. sent B!M. additional materials by email, which he had received from DAVIS, in
support of BV's MSLP loan application, including a false SSN and falsified personal tax retums.
26. 
On or about Noveniber 13,2020, C.G. forwai'ded to B.M. emails from DAVIS
relating to the puiported nature of B.V.'s business, its financial condition, and its plans for how it
would use the MSLP money.
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27. 
On or about December 3, 2020, DAVIS, on behalf of BY, signed a loan
agreement with Bank-3 for a $10 million MSLP loan, a security agreement pledging BV's assets
as collateral for the loan, a promissory note promising to repay the MSLP loan, and a personal
guarantee for the repayment of the loan. In those documents, DAVIS falsely represented that all
the financial information that had been delivered to Bank-3 on his behalf was accurate in all
material aspects and that there were no other liens in favor of other creditors previously placed
on any of the BV collateral. DAVIS also agreed to provide Bank-3 with financial statements for
BV for 2020 within 120 days of December 31,2020.
28. 
On or about March 1,2021, DAVIS provided BaDlc-3 with a false financial audit
report for BV for 2020. and on or about June 30,2021, DAVIS provided to Bank-3 a false
financial audit report for BV for 2020.
29. 
On or about June 30,2021, DAVIS provided to Bank-3 a second false financial
audit report for BV for 2020.
Executions of the Scheme and Artifice
30. 
On or about the dates listed below, for the purpose of executing the above-
described scheme, in the Eastern District of Virginia and elsewhere, CRAIG DAVID DAVIS
transmitted and caused to be transmitted by means of wife communication in interstate and
foreign commerce, any writings, signs, signals, pictures, arid sounds, as described below, each
count being a sepaiute offense:
Count. Approx. Date
Lender
Type of Communication
1
April 21, 2020
Banlc-1
Electronic tr^mission by Bank-1
of an application for a PPP loan on
behalf of BV for $341,300 to
SBA's Etran server, located within
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the Eastern District of Virginia
2
April 21,2020
Bahk-1
Electronic assignment by SBA via
the Etran server, located within the
Eastern District of Vhginia, of a
SBA loan number to the PPP loan
application Banlc-1 submitted on
behalfofBV for $341,300.
3
April 27,2020
Bank-2
Electronic transmission by Banlc-2
of an application for a PPP loan on
behalfofBV for $354,000 to
SBA's Etran server, located within
the Eastern District of Virginia
4
April 27,2020
Bank-2
Electronic assignment by SBA via
the Etr^ server, located within the
Eastern District of Virginia, of a
SBA loan number to the PPP loan
application Bank-2 submitted on
behalf ofBV for $354,000.
(In violation of 18 U.S.C. § 1343)
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FORFEITURE NOTICE
There is probable cause that the propei*ty described in this forfeiture notice is subject to
forfeiture pui'suant to the statutes described herein.
1. 
Pursuant to Federal Rule of Criminal Procedure 32.2(a), the defendant is hereby
notified that, if convicted of any of the violations of 18 U.S.C. § 1343 alleged in Counts 1
through 4 of this indictment, he shall forfeit to the United States, pursuant to 18 U.S.C. '
§ 981(a)(1)(C) and 28 U.S.C. § 2461(c), his interest in any propeity, real or personal, which
constitutes or is derived fi'om proceeds traceable to the violations of 18 U.S.C. § 1343. The
property subject to forfeiture under Counts 1 thi'ough 4 includes, but is not limited to, a sum of
money equal to at least $9,195,300 in United States currency, representing the amount of
proceeds obtained by the defendant as a result of the offenses.
2. 
Pursuant to 21 U.S.C. § 853(p), as incorporated by 28 U.S.C. § 2461(c), the
defendant shall forfeit substitute property, up to the value of $9,195,300 if, by any act or
omission of the defendant, the property dkectly derived fi:om the chai'ged violations cannot be
located upon the exercise of due diligence; has been transferred, sold to, or deposited with a third
party; has been placed beyond the jurisdiction of the Court; has been substantially diminished in
value; or has been commingled with other property which cannot be divided without difficiilty.
(All in accordance with § 18 U.S.C. § 981(a)(1)(C); 28 U.S.C. § 2461(c)); and Federal Rule of
Criminal Procedme 32.2(a)).
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A TRUE BILL:
Pursuant to the E-Government Act,,
The original of this page has been filed
—„uMi;LsMin the Clerk's Office
Jessica D. Aber
United States Attorney
Kathleen Robesoii
Assistant United States Attorney
2100 Jamieson Avenue
Alexandria, Virginia 22314
Phone: 703-299-3827
Email: Kathleen.Robeson@usdQi.gov
David A. Peters
Trial Atlomey
Depaitment of Justice, Fraud Section, Market Integrity and Major Frauds Unit
1400 New York Ave., Washington, D.C. 20005
Phone: 202-616-5420
Email: David.Peters2@usdoj.gov
11
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