Transcript of Proceedings as to Darrell Thomas held on 3/17/21 — USA v. Thomas et al. (Dkt. 113, N.D. Ga.)

Record facts

U.S. District Court for the Northern District of Georgia · No. 1:20-cr-00296-JPB-CMS · Doc. 113 · 2021-04-19 · Docket on CourtListener

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UNITED STATES DISTRICT COURT - OFFICIAL CERTIFIED TRANSCRIPT
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   UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
UNITED STATES OF AMERICA, )
)
)
-VS-
) DOCKET NO. 1:20-CR-00296-JPB-AJB
) 
DARRELL THOMAS,
)
)
DEFENDANT.
)
TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE RUSSELL G. VINEYARD
UNITED STATES MAGISTRATE JUDGE
MARCH 17, 2021
APPEARANCES:
ON BEHALF OF THE GOVERNMENT: 
TAL COHEN CHAIKEN, ESQ.
NATHAN KITCHENS
ASSISTANT UNITED STATES ATTORNEY
ON BEHALF OF THE DEFENDANT:
BENJAMIN ALPER, ESQ.
PENNY PRITTY COUDRIET, RMR, CRR
OFFICIAL COURT REPORTER
UNITED STATES DISTRICT COURT 
ATLANTA, GEORGIA
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I N D E X
WITNESS:
  PAGE:
JOSEPH STITES
DIRECT EXAMINATION.................................... 4
CROSS-EXAMINATION..................................... 6
REDIRECT EXAMINATION................................. 15
RECROSS-EXAMINATION.................................. 16
- - - - -  
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(PROCEEDINGS HELD IN OPEN COURT AT 2:50 P.M.)
THE COURT:  Please be seated.  
This is the case of the United States of America v.  
Darrell Thomas, Case Number 1:20-CR-296.  We're here for a hearing 
on a petition to revoke supervised -- pretrial release, I'm sorry.  
Ms. Chaiken and Mr. Kitchens on behalf of the United 
States.  And Mr. Alper on behalf of Mr. Thomas, who is present in 
court.  
Are you ready to proceed, counsel?  
MS. CHAIKEN:  Yes, Judge. 
MR. ALPER:  Yes, your Honor. 
THE COURT:  All right.  Ms. Chaiken. 
MS. CHAIKEN:  Thank you, Judge.  And if it's okay with 
the Court, we were planning to proceed by proffer today.  
MR. ALPER:  I had indicated -- I didn't realize -- I had 
indicated I would like to hear from the agent and ask him some 
questions, so I'm objecting to proceeding by proffer. 
THE COURT:  Yes, I think we need to hear testimony from 
the agent in connection with this matter. 
MS. CHAIKEN:  Okay.  So we call Special Agent Joseph 
Stites. 
THE COURT:  All right. 
Have a seat right here, Agent Stites.  Right here.  
We've got you set up right there.
AGENT STITES:  Okay.  I'm sorry.
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THE COURT:  That's all right.  
Would you raise your right hand and take the oath.
(Witness duly sworn)  
COURTROOM DEPUTY CLERK:  Please be seated and state and 
spell your name for the record.
THE WITNESS:  Joseph D. Stites.  Last name is spelled 
S-T-I-T-E-S.  
THE COURT:  You may proceed, Ms. Chaiken. 
MS. CHAIKEN:  Thank you, Judge. 
_____________________________
JOSEPH D. STITES 
a witness herein, being first duly sworn,
was examined and testified as follows:
DIRECT EXAMINATION 
BY MS. CHAIKEN:
Q.
Good afternoon, Special Agent Stites.  
A.
Good afternoon. 
Q.
Do you have a copy of your declaration that's signed and dated 
March 4th, 2021? 
A.
Yes, I do. 
Q.
Is that your signature on this declaration? 
A.
Yes, it is. 
Q.
Is everything in this declaration true and correct to the best 
of your knowledge? 
A.
Yes.
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Q.
If you could just turn to page 17 of the declaration.  
A.
Okay. 
Q.
Do you see the paragraph that refers to payments to Rapid! 
PayCard by various companies that are dated August 11th, 2020, 
through September 28th, 2020?  Do you see that? 
A.
Yes, I do. 
Q.
And in your declaration you had stated that you had probable 
cause to believe that those payments were deposited into an 
account, a MetaBank Rapid! PayCard account owned by Bellator 
Phront Group, is that correct? 
A.
That's correct. 
Q.
Have you since had an opportunity to review copies of the 
actual wire transfers and bank statements that reflect those -- 
the specific account into which those payments were deposited? 
A.
Yes.
Q.
And for all of those payment records, with the exception of 
Infinite Education Services, Inc., was the account into which the 
money was transferred an account that ends in 6687? 
A.
Yes.
Q.
And who owns the MetaBank Rapid! PayCard account that ends in 
6687? 
A.
That's a Bellator Phront account. 
Q.
Were you able to speak to the owner of Infinite Education 
Services, Inc.?  
A.
Yes.
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Q.
Did he tell you who directed him to send money to Rapid! 
PayCard at MetaBank? 
A.
Yes, he did. 
Q.
What did he say? 
A.
He said Darrell Thomas had instructed him to do that. 
Q.
Other than that, is there anything in your declaration that 
needs to be changed or updated? 
A.
No. 
MS. CHAIKEN:  No further questions. 
THE COURT:  Okay.  Mr. Alper, you may cross-examine. 
MR. ALPER:  Thank you, Judge.
CROSS-EXAMINATION 
BY MR. ALPER:
Q.
Good afternoon, Agent.  How are you today? 
A.
Good.  How are you doing, sir?  
Q.
I'm okay.  Thank you.  
Just to go back a little bit, Darrell Thomas was initially 
indicted with a number of other individuals charged with 
fraudulent PPP Loan applications with five businesses, is that 
correct? 
A.
Correct. 
Q.
But after further investigation, according to your affidavit, 
you uncovered an additional six PPP applications that you believe 
were fraudulently obtained, is that correct? 
A.
Correct. 
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Q.
All of these additional six that were not charged in the 
initial indictment, they were applied for before Mr. Thomas was 
arrested, correct? 
A.
Correct. 
Q.
And they were funded before Mr. Thomas was arrested, correct? 
A.
I believe so, yes.  Correct. 
Q.
So the new conduct that you're alleging in your affidavit has 
to do with, correct me if I'm wrong, the movement of those PPP 
funds to various accounts, is that correct? 
A.
Correct. 
Q.
And my understanding is there are kind of two parts to the 
movement or alleged movement of these funds, there's the one you 
just talked about, which was the payment from companies to a 
Bellator Rapid! PayCard account, is that correct? 
A.
Yes.  Correct. 
Q.
And that's what you just described, which is detailed in 
paragraph 37? 
A.
Let me confirm the paragraph.  
Q.
Sure.  Sure.  
A.
37, yes, on page 17. 
Q.
And so -- and then after that, the second part, as I 
understand it, is then the use of this paycard account to issue 
payroll cards that then these funds were withdrawn from, is that 
correct? 
A.
That's correct. 
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Q.
So let me focus on the first part you just talked about and 
then we'll also talk about the second.  
So you list in your affidavit here eight payments made by 
these companies to a Rapid! PayCard account, correct? 
A.
Correct. 
Q.
And that's between August 11th of 2020, to September 28th 
2020, correct? 
A.
Yes, that's correct. 
Q.
And when you referred to -- in your affidavit you call it the 
Rapid! PayCard account, that's the Bellator company Rapid! PayCard 
account? 
A.
Correct. 
Q.
And I might have misheard, but did Ms. Chaiken, when she asked 
you, did she indicate that the Infinite Education payment did not 
go to this account?  Did it go to a different account? 
A.
I believe that went to a different account. 
Q.
So that payment from Infinite Education --
A.
Wait.  No.  No.  No, that's still part of 37.  Infinite 
Education is part of that account, went to the Bellator account. 
Q.
Were there any payments made by these companies with PPP funds 
to other accounts that weren't the Bellator Rapid! PayCard 
account? 
A.
No. 
Q.
So I must have misunderstood that, I'm sorry.  
Okay.  And the way that you connect these payments to the -- 
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from these companies to the Bellator account is your interview 
with a Mr. Charles Hill, is that correct? 
A.
The way we connect these payments to the Bellator account?  
Q.
The way you connect that it was Mr. Thomas that instructed 
these companies to make these payments is through this interview, 
is that correct? 
A.
That's one of the ways, yes. 
Q.
What are the other ways? 
A.
Well, just looking at the transactions going to the Bellator 
account and then other interviews of other individuals. 
Q.
Okay.  So in addition to the interview of Mr. Hill, there are 
other individuals who stated that Mr. Thomas directed these 
specific payments to the Bellator paycard account? 
A.
Right. 
Q.
Who are those people? 
A.
The RK Painting, Ricky Dickson. 
Q.
Okay.  Who else? 
A.
All Star Room & Board, Charmaine Redding.  And then Infinite 
Education is Charles Hill.  
Q.
Okay.  What about Continuing Success, did we talk about that? 
A.
No. 
Q.
You didn't interview the owner of Continuing Success? 
A.
No, not yet. 
Q.
Do you know who that is? 
A.
Continuing Success is David Belgrave, I believe. 
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Q.
But he did not say that Mr. Thomas directed him to --
A.
I have not talked to Mr. Belgrave. 
Q.
Okay.  
When did you interview Ricky Dickson? 
A.
I can't remember the exact date but it was within the last few 
weeks. 
Q.
Okay.  And when you spoke to Mr. -- is that a man?  Is Ricky 
Dickson a male? 
A.
Yes, sir. 
Q.
When you spoke to Mr. Dickson, when did he indicate that he 
received instructions from Mr. Thomas to wire these funds to the 
Bellator paycard account? 
A.
I don't have specific -- are you talking about a specific 
date?  
Q.
Yes.  
A.
I don't have a specific date.  It was just in general after 
the money was received, he was given instruction. 
Q.
But the money was received before Mr. Thomas was arrested? 
A.
The money was received before Mr. Thomas was arrested, yes. 
Q.
So the instructions may have been given before Mr. Thomas was 
arrested? 
A.
I don't know the exact date of when the instructions were -- 
Q.
You don't know.  
And is it fair to say for all these individuals, you don't 
know when Mr. Thomas, according to them, instructed them to 
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disburse this money to this account? 
A.
I would assume it was just prior to whenever the money was 
disbursed. 
Q.
Okay.  But you don't know?  I mean -- 
A.
Exact dates, no. 
Q.
Right.  
They did not -- did they, did they provide you with any 
e-mails, text messages, voicemail messages that have Mr. Thomas 
directing them to transfer these funds? 
A.
No, no voicemail messages, no e-mail messages, no text 
messages. 
Q.
Okay.  So, again, as far as you know, the instructions that 
allegedly came from Mr. Thomas could have come prior to him being 
arrested because you don't know when they came? 
A.
There are transfers that occurred after the arrest date. 
Q.
I understand that.  
A.
I just don't know the exact dates of when the instructions 
were given.  
Q.
Okay.  
Mr. Hill got a PPP loan of about $850,000, is that correct? 
A.
That's correct. 
Q.
And he sent to Bellator Rapid! PayCard account about 280,000, 
is that correct? 
A.
281,496, correct.  
Q.
Is the remaining -- is the difference in that, is that still 
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sitting in Mr. Hill's account? 
A.
No. 
Q.
Where is that? 
A.
I don't recall all the other transfers that occurred out of 
that account. 
Q.
From before? 
A.
Excuse me?  
Q.
From before the ones you list in your affidavit? 
A.
I don't understand the question. 
Q.
You list, I think, two in your affidavit -- 
A.
Yes.
Q.
-- that went to Mr. Hill.  They were transfers before the ones 
listed in your affidavit as well; is that what you're telling me? 
A.
Yes.
Q.
And those presumably would have been made pursuant to the 
instructions of Mr. Thomas as well, correct? 
A.
That's correct.  And Mr. Hill, all the instructions were 
provided by Mr. Thomas.  
Q.
So let's talk about the second part of this, which is the use 
of these payroll cards to withdraw these funds.  
Mr. Thomas was arrested and released August the 6th, is that 
correct? 
A.
That's correct. 
Q.
And that was after a search of his home? 
A.
Correct.  On the 6th we searched his home. 
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Q.
And during that search you seized his computers and cell 
phones? 
A.
That's correct. 
Q.
And you also seized I think nine of these payroll cards? 
A.
Correct. 
Q.
And then according to paragraph 47 of your affidavit, let's 
skip ahead on page 21, according to you, within hours of him being 
released someone contacts Rapid! PayCard to get these cards 
replaced, correct? 
A.
Correct. 
Q.
Do you know who requested that those cards be replaced? 
A.
No. 
Q.
Did you investigate as to what device or phone or computer was 
used to request that these cards be replaced? 
A.
We're still looking into that. 
Q.
Okay.  
Where were the cards sent, the replacement cards? 
A.
I don't recall. 
Q.
So you don't know if someone signed for them when they were 
sent? 
A.
I do not know that. 
Q.
Do you know -- is it your understanding that these cards when 
they were received by someone, they have to then be activated? 
A.
I'm not aware of that. 
Q.
Did you investigate with Rapid! PayCard to find out the 
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answers to these questions? 
A.
We're in the process -- 
Q.
You don't have that yet, correct?  
A.
No. 
Q.
Or you're not going to tell me.  Okay.  
And then you discuss in the affidavit that -- how these cards 
were supposedly used after he's arrested at different banks in 
Florida and Georgia? 
A.
Correct. 
Q.
And according to you, it was approximately 60 cards being used 
at 6 different banks in Jacksonville, is that correct? 
A.
Correct. 
Q.
Did you attempt to obtain security footage or surveillance 
footage from these banks indicating who the individual was who 
went to the bank to withdraw this money? 
A.
We are attempting that. 
Q.
You don't have that, is that correct? 
A.
No. 
Q.
You don't have any photographs of Mr. Thomas walking into the 
banks or these ATMs and pulling out this cash, correct? 
A.
No. 
Q.
Is it your understanding -- I mean, if someone goes to a bank 
and uses a -- 30 different payroll cards, is it your understanding 
that someone was physically at an ATM for like an hour plugging 
these cards in at the bank? 
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A.
Yeah, there would -- at the same location, it would have had 
to have been a process to do that, yeah, whether it's one -- 
Q.
One individual or -- 
A.
One individual or multiple. 
Q.
So it could have been more than one individual that was doing 
this, correct? 
A.
We don't know.
MR. ALPER:  If I could have one second, Judge. 
THE COURT:  Yes, sir.  
MR. ALPER:  That's all I have, Judge.  Thank you. 
THE COURT:  All right.  Any redirect, Ms. Chaiken?  
MS. CHAIKEN:  Yes, just briefly, Judge. 
THE COURT:  All right. 
REDIRECT EXAMINATION 
BY MS. CHAIKEN:
Q.
Just a couple points of clarifications, Special Agent Stites.  
Mr. Alper asked you if you had uncovered these six loans that 
are listed in your declaration as being additional fraudulent 
loans.  Are there any additional loans that you have uncovered 
that are fraudulent in addition to those six? 
A.
Yes.
Q.
Did all of the financial transactions that are listed in your 
declaration between August 11th and September of -- sorry, August 
and September of 2020 occur after Mr. Thomas's arrest? 
A.
Yes.
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Q.
Now, for Infinite Education -- I apologize, I think I asked an 
unclear question, but for Infinite Education's bank statements, 
did the records that you reviewed identify the specific account 
number of the account at Rapid! -- at MetaBank into which the 
money was distributed? 
A.
The bank -- the account records from Infinite?  
Q.
Any of the bank records that you've reviewed.  We've discussed 
the other ones identified an account number that ended in 6687.  
A.
Infinite did not but you see it coming into the Rapid! Pay 
MetaBank. 
Q.
Do you recall the username of the person who was listed as 
reporting the Rapid! PayCard payments -- sorry, the Rapid! payroll 
cards that were seized from the defendant's house as lost? 
A.
I don't recall. 
Q.
Okay.  
MS. CHAIKEN:  I have nothing further. 
THE COURT:  Special Agent Stites, you may step down.  
MR. ALPER:  Can I clarify one thing, Judge?  
THE COURT:  What's it on, Mr. Alper?  
MR. ALPER:  Just the other loans that she mentioned that 
were also PPP and fraudulent. 
THE COURT:  All right, I'll allow that. 
MR. ALPER:  Thank you, Judge.
RECROSS-EXAMINATION
BY MR. ALPER:
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Q.
You -- again, you indicated there were other alleged 
fraudulent PPP loans.  Were any of those applied for after 
Mr. Thomas was arrested? 
A.
I don't think they were applied for after the arrest, no. 
Q.
Okay.  Thank you.  
And there were obviously other individuals charged in this 
case and your investigation, obviously, as you indicated, 
continues to identify other potential co-conspirators, correct? 
A.
Correct. 
Q.
Thank you.  
THE COURT:  Agent Stites, you may step down.
THE WITNESS:  Thank you.
(Witness excused)
THE COURT:  Any other evidence to present, Ms. Chaiken?  
MS. CHAIKEN:  No, Judge. 
THE COURT:  Are you relying on the declaration of Agent 
Stites as part of your evidence?  
MS. CHAIKEN:  Yes, Judge. 
THE COURT:  Okay.  
Mr. Alper, do you have any evidence that you want to 
present on behalf of Mr. Thomas?  
MR. ALPER:  No, sir.  Thank you. 
THE COURT:  All right.  
All right.  Ms. Chaiken, the evidence is presented in 
support of the petition to revoke pretrial release.  Let me hear 
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from you.  
MS. CHAIKEN:  Thank you, your Honor.  
Judge, under Title 18, USC, Section 3148, the 
defendant's bond should be revoked and an order of detention 
should be issued because there's probable cause to believe that 
the defendant has committed new federal offenses, specifically 
money laundering and aggravated identity theft, since he was 
released on pretrial supervision.  He's unlikely to abide by any 
conditions that this Court may impose in the future, and he -- 
there's no condition or combination of conditions that will assure 
that he will not be a danger to the community, in this case the 
financial community, in the sense that he will continue to commit 
financial fraud.  
Under Section 3148(b) there's a rebuttal presumption 
that he will be -- that no condition or combination of conditions 
will assure the safety of the community because he has committed a 
new federal offense and given the circumstances present here, 
defendant can't overcome that presumption.  
The evidence is clear that after Mr. Thomas was 
arrested, he continued to launder millions of dollars of PPP loan 
proceeds into accounts that he controls, that his company 
controls, and then laundered them out of that account using 
payroll cards in a manner that was designed to make it look like 
the payments were coming into his account as legitimate payroll 
payments by the companies that he had helped apply for fraudulent 
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PPP loans so that they could obtained fraudulently loan 
forgiveness.  And then they were laundered out of the account 
appearing -- designed to look like legitimate payroll payments to 
his employees.  
Now, whether Mr. Thomas had those cards or other people 
had those cards, they were cards that he controlled.  It's his 
company.  He decided who had the cards and how they used it.  And 
his company is the one that continued to fund those cards, 
millions of dollars worth of money that was then withdrawn at ATMs 
on dates and in locations that coincide with Mr. Thomas's travel.  
That's not a coincidence.  
If he was going down to Jacksonville for business, and 
there was over $200,000 withdrawn at ATMs during that time period 
on payroll cards that were issued by his company to people who 
there's no evidence actually work for his company, he's 
controlling that, regardless of whether the card is in his hand or 
in somebody else's hand.  And I don't think there can really be 
any doubt that he engaged in these financial transactions after 
his arrest.  
So with respect to the money coming into the MetaBank 
Rapid! Pay account, whether he gave the instruction to make 
regular payments to Rapid! PayCard once you get the money, or 
whether he did it each time, his account was engaging in that 
financial transaction after the date of his arrest, eight separate 
transactions, and that money kept rolling in.  If he was inclined 
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to stop committing criminal activity, he could have instructed 
them not to make those payments or to close that account or to 
stop using it in order to launder money, but the evidence in this 
case establishes that Bellator doesn't have any legitimate 
employees.  
And, in fact, Judge, the day before Bellator filed its 
PPP loan applications, which stated that it had 66 employees, 
Bellator filed -- the day before Bellator filed with the City of 
Roswell an application for a commercial business that listed three 
employees and that had a sworn and Notarized statement that as of 
January 1st the business had fewer than ten employees.  And the 
two other people that were identified on that application were the 
defendant's wife and a woman named Brenda Miller.  Special Agent 
Stites spoke to Brenda Miller and she stated that she hadn't heard 
of Bellator and did not work there.  
So all of these payroll cards were issued for the sole 
purpose of laundering money out of this Rapid! PayCard account.  
The declaration makes clear that Mr. Thomas had access to at least 
some of those payroll cards before he was arrested because he was 
using it -- using them in Las Vegas at the same hotel where we 
received information that he was staying.  And then in 
Jacksonville, during his trip there, he used his own card on two 
of the dates.  And it justifies logic that he would give somebody 
a payroll card in his own name to be used to withdraw money at the 
same time as several other payroll cards were being used.  
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So the evidence I think is clear that he has committed 
acts of money laundering and aggravated identity theft because 
these payroll cards were in the names of other real individuals 
who were not using those cards.  And that activity began merely 
hours after the Court released him for pretrial supervision, just 
hours later.  Whether it was him, again, or whether it was 
somebody else who reported those cards lost, it's his company, 
it's his payroll cards.  They were seized from his house.  He had 
to tell somebody that those cards had been seized.  And then, 
again, those cards, the same ones that were -- that were reported 
lost, some of them were then used in Jacksonville on dates that 
coincide with the defendant's travel.  So it appears that rather 
than serving as a wake-up call to Mr. Thomas, his arrest and 
immediate release just emboldened him to continue his money 
laundering activities.  
I would just note, Judge, I think, again, there's a 
rebuttal presumption that this conduct shows that there's no 
combination of conditions that will assure that he will not pose a 
danger to the safety of any other person or community.  And case 
law establishes that danger does not just mean physical danger, 
economic crime falls into that as well.  
Beyond that, there -- that the Court issued an arrest 
warrant on Wednesday afternoon, Mr. Thomas was instructed to 
report to probation at 9:00 a.m. on Friday morning.  During that 
phone call he informed his pretrial supervision officer that he 
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was in Jacksonville.  And when she told him that he had not gotten 
permission for that trip, he said that he had told Officer 
Bachelor, who was his prior officer.  And after checking with 
Officer Bachelor, the pretrial supervision officer told me that 
statement was not true. 
MR. ALPER:  I'm going to object.  That's not been 
presented.  That's not part of the petition and it's not in 
evidence.  I'm not prepared to deal with it. 
THE COURT:  Overruled.  I'll hear it proffered with 
respect to detention. 
MS. CHAIKEN:  Mr. Thomas did not appear at probation on 
Friday morning.  He told the pretrial supervision officer that he 
could not get on a stand-by flight, and that he did not have 
enough money to come back from Jacksonville.  And then he, again, 
appeared at 9:00 a.m. on Monday morning and was arrested.  
But that, too, I think shows that he is not abiding by 
the Court's order and by -- he's not respecting the probation 
office's authority over him.  And, obviously, the failure to 
report or give notice of travel pales in comparison to the 
millions of dollars in money laundering, but it's just an 
additional factor here that I think should be considered in 
determining that he should be detained pending trial.  
Thank you. 
THE COURT:  Thank you.  
Mr. Alper. 
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MR. ALPER:  Thank you, Judge.  
I think it's important to highlight, Judge, that this 
from the beginning has been a complicated scheme involving over, 
it seems, a dozen companies with a dozen different owners, 
multiple bank accounts, multiple conspirators, multiple, it seems, 
soon-to-be superseded indicted co-conspirators.  
I think it's also important to note that Mr. Thomas, 
since being arrested and released, did exactly what we would want 
him to do; he cut all ties with his bank and he cut all ties with 
these co-conspirators.  He's not allowed to tell a co-conspirator 
after he's arrested and released on bond don't transfer this 
money, stop sending this money, stop doing that, he's not allowed 
to communicate with them.  
And if a co-conspirator thinks it's still part of the 
scheme to do it or is doing it at the direction of another 
co-conspirator after he's arrested, that's not attributable to 
him, okay.  
The government has not been able to establish that any 
actions were taken directly by Mr. Thomas after he was arrested 
and released on this case to deal with any of this money 
whatsoever.  They can't show that the instructions that were given 
to these companies to wire the money to this account were given by 
him after his arrest.  They can't show that he's the one that 
requested these payroll cards after they were seized from his 
house.  They can't show that he's the one that activated them.  
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They can't even show that he's the one that received them.  
And, again, everything that occurred before his arrest 
is not the subject of this hearing, it's the actions he took after 
the fact.  They can't show that it's him, the one that's going 
into the banks, pulling this money out allegedly.  And they can't 
show that he's the only one who had access to these payroll cards 
or had access to these banks.  The fact that one of his names is 
on one of them indicates at best that he's maybe a victim of a 
continuing fraud by these folks who still have access to these 
cards now.  
I would also point out that it seems that this conduct, 
as far as I can tell, ended at the end of September in dealing 
with withdrawing these cards.  There's been nothing for six months 
indicating at all that he's touched this money, that he's done 
anything with this money.  If he's pulling out $3 million in 
fraudulent proceeds and they can't show that it's gone anywhere to 
any of his accounts or businesses or anything like that, I think 
that calls into question whether or not he actually dealt with 
this money.  
So, again, you know, in reading the complaint, you know, 
or the affidavit, I understand, you know, the optics of it but 
there are too many holes, too many gaps, too many things that 
could have occurred before his arrest and not enough investigation 
done after the fact.  Again, having been six months, every bank 
case I have, they've got a picture of a guy going in, cashing a 
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check at the ATM, those are not hard records to get.  So I don't 
believe they've established by probable cause that he committed 
these money laundering offenses.  
To the extent that he was traveling in Florida, again, 
I'm not aware of that.  I know when pretrial initially contacted 
him, he contacted my partner, Howard Weintraub, who spoke with 
pretrial and said, you know, do you really need him to come in?  
We weren't aware of the warrant at that time, we thought this was 
just a routine health check or whatever.  So they said, no, he 
needs to come in.  And we negotiated with them back and forth 
saying he can't get out, he's coming in Monday.  And, obviously, 
he came in first thing Monday morning when they put the handcuffs 
on him.  
So he's certainly not a flight risk.  There's no 
evidence that he violated any other conditions of his bond.  So I 
don't think they've met their burden.  If they have, then it's a 
rebuttal presumption that I need to rebut, which I think I can.  
To that, I would speak to again, as far as I can see 
nothing in the past six months there has been any indication that 
he's had anything to do with this money, so he's otherwise been 
perfectly compliant on bond.  There's obviously been no -- no -- 
any kind of suggestion that there's any threats or violence or 
witness intimidation while he's been out on bond.  The government 
seems to have done a good job tracking this money down, and 
there's no evidence that there is additional moneys out there he 
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has access to or could have access to.  
So for all those reasons, I think he's still a suitable 
candidate for bond.  I think there are reasonable conditions.  If 
your Honor wants to put an ankle monitor on him because they're 
concerned about the travel, if you want to limit his Internet 
access, the Court can do that.  
He put up a signature bond, you know, when he was -- 
first came before your Honor.  He's got properties in the Atlanta 
area of, you know, $190, $180,000 in equity that he's prepared to 
put up to secure his conditions and his appearance.  So he can -- 
we can do more than a signature, obviously, now if the Court has 
concerns about that, but we can I think satisfactorily assuage 
those concerns.  
So we would ask that the Court not find that he has 
violated the conditions of his bond or committed a new offense.  
But should you find that, I would ask that you release him on a 
stricter bond, your Honor.  Thank you. 
THE COURT:  Thank you.  
Ms. Chaiken, do you have anything else?  Do you have 
anything else?  
MS. CHAIKEN:  Yes.  I just want to respond to a couple 
of points raised by Mr. Alper.  
It is true that this is a very complex investigation 
that involves a lot of loans and a lot of people.  And the one 
common thread here is Mr. Thomas in all of it.  He is the only 
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person who has money coming to him from essentially every loan 
applicant.  He is the only person who is linked to all of these 
different loan applicants, either directly or through other 
co-conspirators.  And his e-mail records show that he directly 
participated in the fabrication of documents for all these loan 
applicants.  That includes falsified W-2 payroll spreadsheets.  It 
includes falsified IRS Form 941s, which are employer's quarterly 
tax returns that there are IRS stamps purported to have been 
received by the IRS, and the IRS records show that those forms 
were never filed.  
It includes falsified bank statements, including fake 
bank statements that are identical for multiple businesses where 
the only thing that's different is the business name, and the 
account number obviously.  
Just to give you an example, there's -- Bellator in 
response to a grand jury subpoena produced a W-2 payroll 
spreadsheet that was just a PDF with names and then supposed 
payroll amounts.  One of the businesses we're discussing here, 
Continuing Success, submitted a payroll spreadsheet with its PPP 
loan application where the payroll figures were identical both for 
the company as a whole and for each individual employee.  
And the first employee on Continuing Success was Johnny 
Gillespie.  The first one on Bellator's list Sabrina Gillespie.  
The Sandy Waire and Chasity Waire.  The third was Mike Kneeland 
and Julian Kneeland.  They both reported having an employee named 
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Adonay Yehdego.  One reported having Matt Zimmerman and one 
reported Matthew Zimmerman.  These are all documents that were in 
Mr. Darrell's -- Mr. Thomas's e-mails.  So the suggestion that he 
is the victim of a fraud carried out by other co-conspirators is 
just not borne out by the evidence.  The same thing goes for the 
use of his payroll card.  
And the suggestion that he may be a victim of fraud by 
another co-conspirator, when agents searched his house, they found 
a receipt for a hotel room at the Encore Hotel in Vegas where he 
had just been visiting.  That receipt matched exactly the amount 
that was charged to the payroll card in Darrell Thomas's name.  So 
at least we know that the day before his arrest he had that 
payroll card in his name.  
Again, I -- we're obviously talking about the 
post-arrest conduct here, but the pre-arrest conduct is relevant 
to proving circumstantially that Mr. Thomas had and was using 
these cards.  The behavior pre-arrest with multiple cards being 
used at the same ATM on the same day is identical to the 
post-arrest conduct.  There are multiple cards being used at the 
same ATM on the same day.  And I would add to that that based on 
the information that we have from Rapid! PayCard, a lot of the 
other cards which we do believe may have been in co-conspirators' 
hands were being used for transactions like grocery stores and 
other personal expenses, but the transactions that we've 
highlighted and that are contained in Agent Stites's declaration 
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are large amounts of payroll cards being used at ATMs to withdraw 
approximately a thousand dollars each, which was the maximum we 
understand of these payroll cards, and that's conduct that mirrors 
exactly the conduct in Vegas before the arrest.  
With respect to the flight risk, as the declaration 
details, there were million of dollars withdrawn from the Rapid! 
PayCard account on payroll cards.  There was a suggestion that 
we've tracked it down, but this is not money that's been tracked 
down, this was money that was withdrawn in cash from ATMs 
throughout Florida and Georgia.  We don't know where that money 
is, and this case involves a very large number of bank accounts 
that are opened specifically for the purpose of laundering money.  
What we see in this case is bank accounts that are opened and the 
next day they receive a transfer of hundreds of thousands of 
dollars from one of these business applicants or one of the 
co-conspirators.  And so we don't know where that money is.  
Mr. Thomas, the evidence is -- I think circumstantially 
establishes that he has access to it.  And he is now facing a very 
significant amount of time and much longer time than he was facing 
when he was first arrested in August because of this additional 
conduct itself and because it occurred while he was on pretrial 
release.  So we think that there is a very significant risk that 
he will flee in order to avoid the very lengthy sentence that he 
is facing.  And, again, we don't think there's enough to rebut the 
presumption that he will be a danger to the safety of the 
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community if he is released.  
Thank you.  
THE COURT:  Thank you, Ms. Chaiken.  
So in this case the petition is supported by a very 
detailed declaration from Special Agent Stites.  He's also 
testified today reaffirming the declaration.  And I find based on 
that testimony and the declaration that there is probable cause to 
believe that Mr. Thomas has committed violations of federal law 
involving money laundering and identity theft after his release in 
this case.  Because of that finding, it does invoke the rebuttable 
presumption that he will present a danger to the community based 
on that continuing engagement of the conduct.  
There is a substantial amount of money, that also causes 
me concern that that money is not fully accounted for and would be 
available to him if he wanted to flee.  Also, the conduct, because 
it appears to have occurred so soon after release and in a 
substantial amount of money, it's unlikely he would abide by 
conditions of release if I were to release him.  So I'm going to 
order Mr. Thomas to be detained pending trial in this case.  
Certainly if anything develops with respect to the investigation 
that undermines what has been purported to the Court, I expect to 
be informed about that.  
I'm finding probable cause.  Obviously, the government 
is not required at this point to present anything more, and it 
sounds like the investigation is still underway.  But based on the 
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record before me today, I believe that burden has been satisfied 
and that he should be detained.  
Anything further from the government?  
MS. CHAIKEN:  No, your Honor. 
THE COURT:  Mr. Alper?  
MR. ALPER:  No, sir.  Thank you. 
THE COURT:  Very good.  We're in recess.
(PROCEEDINGS REPORTED WERE CONCLUDED)
___________________________ 
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C E R T I F I C A T E
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
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 15th of April, 2021. 
  
  
    _______________________________  
    PENNY PRITTY COUDRIET, RMR, CRR
    OFFICIAL COURT REPORTER
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