Affidavit — USA v. SEALED (Dkt. 3.1)

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In this affidavit, filed 07/05/22 as Document 3-1 in Case 1:22-mj-00051-BKE (Southern District of Georgia), Brian Truax, a Senior Special Agent with the United States Secret Service, sets out probable cause that Gladys Harun, owner of Embrace Africa d/b/a Jackson Hewitt Tax Service, committed wire fraud and made false statements to the SBA. It says Harun received approximately $366,656 in forgiven PPP loans and describes applications claiming 36 and later 59 employees, including an April 9, 2021 Wells Fargo application requesting $397,075 that Wells Fargo rejected and a $20,710 Truist Bank loan approved on April 29, 2021.

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Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 1 of 13
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION

AFFIDAVIT IN SUPPORT OF CRIMINAL COMPLAINT

I, Brian Truax, being first duly sworn, hereby depose and state as follows:

INTRODUCTION AND AGENT BACKGROUND

1. I am a Senior Special Agent with the United States Secret Service
(“USSS”) assigned to the Savannah Resident Office. I have been employed by the
USSS since September of 2002 and have been assigned to the Savannah Resident
Office since 2019. I have received training in general law enforcement and criminal
investigations from the Federal Law Enforcement Training Center and the USSS
James J. Rowley Training Center. As a Special Agent, I have been involved with
numerous criminal investigations including credit card fraud, bank fraud, access
device fraud, identity theft, wire fraud, money laundering, and various other
crimes. I have executed many arrests and executed multiple search and seizure
warrants in my almost 20 years as a Senior Special Agent.

2, Based on the facts set forth in this affidavit, there is probable cause to
believe the following offenses have been committed by Gladys Harun: wire fraud in
violation of 18 U.S.C. § 1343 and making a false statement to the Small Business
Administration in violation of 15 U.S.C. § 645, collectively referred to as the “Target

Offenses.”
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 2 of 13
RELEVANT STATUTORY BACKGROUND

3 The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act
was a federal law enacted in or about March 2020 designed to provide emergency
financial assistance to the millions who are suffering the economic effects caused by
the COVID-19 pandemic.

4. Among other relief efforts, the United States sought to provide
financial support to eligible businesses that could be used to offset certain business
expenses.

5. The SBA was an executive branch agency of the United States
government that provided support to entrepreneurs and small businesses. The SBA
was headquartered in Washington, DC and maintained its computer servers outside
of the State of Georgia. The SBA’s mission was to maintain and strengthen the
nation’s economy by enabling the establishment and viability of small businesses
and by assisting in the economic recovery of communities after disasters.

6. As part of this effort, the SBA enabled and provided for loans through
banks, credit unions, and other lenders. These loans have government-backed
guarantees. In addition, the SBA provided loans that came directly from the U.S.
Government.

Economic Injury Disaster Loans

7. One source of relief provided by the CARES Act was the authorization
for the SBA to provide EIDLs to eligible small businesses experiencing substantial

financial disruption due to the COVID-19 pandemic.
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 3 of 13
8. In order to obtain an EIDL, a qualifying business had to submit an
online application to the SBA and provide information about its operations, such as
the number of employees, gross revenues for the twelve-month period preceding the
disaster, and the cost of goods the business sold in the twelve-month period
preceding the disaster. In the case of EIDLs, the twelve-month period was that
preceding January 31, 2020. The applicant also had to certify that all the
information in its application was true and correct to the best of the applicant’s
knowledge.

9. In addition, the CARES Act authorized the SBA to issue advances of
up to $10,000 to small businesses within three days of applying for an EIDL (“EIDL
Advance”). The amount of the EIDL Advance was determined by the number of
employees the applicant certified having.

10. EIDL applications were submitted directly to the SBA online at
https://covid19relief.sba.gov/#/ and processed by the agency with support from a
government contractor, Rapid Finance. The amount of each loan was determined
based, in part, on the information provided by the application about employment,
revenue, and cost of goods, as described above. Any funds issued under an EIDL
were issued directly by the SBA.

11. EIDL funds could be used for payroll expenses, sick leave, production

costs, and business obligations, such as debts, rent, and mortgage payments.
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 4 of 13
The Paycheck Protection Program

12. Another source of relief provided by the CARES Act was the
authorization of up to $349 billion in forgivable loans to small businesses for job
retention and certain other expenses, through a program referred to as the
Paycheck Protection Program (“PPP”). In or around April 2020, Congress authorized
over $300 billion in additional PPP funding.

13. In order to obtain a PPP loan, a qualifying 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 authorized representative)
to acknowledge the program rules and make certain affirmative certifications in
order to be eligible to obtain the PPP loan. In the PPP loan application, the small
business (through its authorized representative) had to state, among other things,
its: (a) average monthly payroll expenses; and (b) number of employees. These
figures were then used to calculate the amount of money the small business was
eligible to receive under the PPP. In addition, a business applying for a PPP loan
had to provide documentation showing its payroll expenses.

14. A PPP loan application must be processed by a participating lender,
such as a financial institution. If a PPP loan is approved, the participating lender
funds the PPP loan using its own monies, which are 100% guaranteed by the SBA.
Data from the application, including the 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.
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 5 of 13
15. The 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 of the PPP loan to be entirely forgiven if the
business spends the loan proceeds on these expense items within a designated
period of time and uses a certain percentage of the PPP loan proceeds on payroll

expenses.

PROBABLE CAUSE

Gladys Chege Harun

16. Ms. Harun is the owner and operator of Embrace Africa d/b/a Jackson
Hewitt Tax. Jackson Hewitt is a tax-preparation business operating franchises
throughout the United States, including in the Southern District of Georgia. Ms.
Harun resides at 192 Amelia Drive in Byron, Georgia. In an interview with law
enforcement on May 2, 2022, Harun described owning and operating several
Jackson Hewitt storefront locations and locations inside Walmart stores, including
several locations in Dublin, Eastman, and elsewhere.

17. A review of SBA’s records, lender documents, interviews, and tax
filings reveal that Ms. Harun received approximately $366,656 in forgiven PPP
loans and approximately $137,500 in EIDL grants and loans by submitting false
and fraudulent information concerning her business. To obtain the loans, Ms.
Harun falsely inflated information concerning her business, namely her average

payroll, among other information.
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 6 of 13
18. The investigation further revealed that Ms. Harun filed and attempted
to obtain tens of thousands of dollars in others’ names by utilizing their personal
identifiable information without those persons’ knowledge and consent. Ms. Harun
also aided others in submitting false and fraudulent PPP and EIDL applications
resulting in losses of several hundred thousand dollars.

Harun’s PPP Applications

PPP Application 1

19. On or about April 17, 2020, Wells Fargo received a PPP application
signed in the name of Gladys Harun for the business “Embrace Africa DBA Jackson
Hewitt Tax.” The application claimed that the business had 36 employees and an
average monthly payroll of $18,413. Wells Fargo approved the loan and wired
$46,033 into a bank account controlled by Harun.

PPP Application 2

20. In or about April 2021, Harun submitted a PPP application to Truist
Bank in which she represented she was an independent contractor who received an
average monthly payroll of $8,288. On or about April 29, 2021, Truist Bank
approved Ms. Harun for a $20,710 PPP loan and wired the money to an account she
controlled.

PPP Application 3

21. On or about April 9, 2021, Harun submitted another PPP application

to Wells Fargo. The application claimed that Embrace Africa d/b/a Jackson Hewitt
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 7 of 13
Tax Service had 59 employees and an average monthly payroll of $158,830. The
application requested $397,075.

22. Wells Fargo flagged the application as providing questionable or false
documentation. Notably, Harun had previously opened Wells Fargo accounts and
noted the business employed only 20 people. Wells Fargo rejected the application
and observed that the tax documents appeared to be altered.

PPP Application 4

23. On or about June 17, 2021, Lendistry, an SBA-approved lender,
received a PPP application signed in the name of Gladys Harun. The application
contained a photograph of a passport bearing Ms. Harun’s name and date of birth.
The application represented that the business, Embrace Africa d/b/a Jackson
Hewitt, was located at 5715 Neese Street in Eastman, Georgia, had an average
monthly payroll of $119,965.20. Gladys Harun was listed as the individual with a
100% ownership of the business. Lendistry approved the loan and paid $299,913,
via interstate wire, into a bank account controlled by Ms. Harun.

Inconsistencies in Harun’s PPP Applications

24. A review of information submitted by Harun to the lenders in
connection with the PPP applications described above reveals internal and external
inconsistencies. First, the applications themselves are inconsistent with each other
in terms of monthly payroll and number of employees. Second, a review of

information provided by Harun to law enforcement and the IRS reveals that her
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 8 of 13
PPP applications fraudulently inflated her business income to obtain a larger
amount of PPP loans.

25. In response to a grand jury subpoena, Harun provided payroll records
consisting of Form 1099s and W-2s. An analysis of the records provided by Harun
show that she grossly inflated the average monthly payroll. Specifically, the 2019
payroll records of the business show average monthly payroll of approximately
$8,429.96; in contrast, PPP Application 1 represented she had $18,413 in average
monthly payroll for the period covering 2019. Similarly, for 2020, PPP Application
4 represented average monthly payroll of $119,965.20, whereas the records she
provided to law enforcement show an average monthly payroll of only $9,304.84.

Harun’s EIDL Applications

26. A review of SBA’s records reveals Gladys Harun submitted at least
four EIDL applications, variously representing that Embrace Africa had 32 or 35
employees and revenue of $602,000 or $726,075. In addition, she submitted an
EIDL application in the name of Jackson Hewitt Tax Service purporting to be a sole
proprietor whose business had $8,766 in gross revenue.

27. As a result of her applications, SBA approved one EIDL loan of
$127,500 and one grant for $10,000, and said money was wired into accounts
controlled by Harun.

EIDL Application Harun Prepared for L.G.
28. OnJune 25, 2021, the SBA received an application in the name of a an

individual whose initials are L.G. L.G., who resided in the Southern District of
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 9 of 13
Georgia, died the day before the application was created and submitted, as
confirmed by a Georgia death certificate.

29. The application identified L.G. as the sole owner and independent
contractor for a personal services company that began on January 12, 2018.
According to the application, L.G.’s business had one employee, gross receipts of
$2,145, and $21 in the cost of goods sold for the twelve-month period prior to
January 31, 2020.

30. EIDL applications provide a section to list anyone who assisted in the
preparation or submission; in L.G.’s application, no one was listed.

31. L.G’s EIDL application listed an address of 192 Amelia Drive in
Byron, Georgia, which is Harun’s’ residence, an email address_ of
embraceafrica@yahoo.com, which is consistent with Harun's company and
similar to the email used in her Lendistry application, and a phone number
ending in 2207, which Harun confirmed to law enforcement as her number.

32. Months after L.G.’s death, SBA received an email from an individual
utilizing embraceafrica@yahoo.com who claimed to be L.G. The email asked for
help setting up a password to log in and access the portal.

33. SBA’s records revealed that the IP address used in the submission of
L.G.’s application matched at least 29 other EIDL applications submitted, including
applications for individuals whose initials are J.B., J.N., W.P and others. Law
enforcement interviewed J.B., J.N. and W.P., and they confirmed their EIDL

applications were prepared in large part by Harun.
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 10 of 13
34. Law enforcement interviewed L.G.’s daughter who recalled that L.G.
and Harun had discussed obtaining an EIDL, but the daughter did not know if the
application had ever been submitted.

PPP Application Harun Prepared for J.B.

35. SBA records reveal that an individual with the initials J.B. obtained a
PPP loan of $8,240. The application submitted to the lender claimed that J.B.’s
business was established on December 29, 2018. Law enforcement interviewed J.B.,
and J.B. described how Harun prepared J.B.’s PPP application in exchange for
$800. J.B. confirmed that the business had not been established on that date, and
he/she had not told Harun that or provided Harun with any information to support
that. Rather, J.B. told law enforcement that the business was established in July
2020. Since PPP recipients had to have a business in existence on or before
February 15, 2020, J.B. would not have been eligible had the business
establishment date been accurate.

EIDL Application Harun Prepared for J.N.

36. Two EIDL applications were created and submitted to the SBA under
the name of an individual whose initials are J.N. As a result of these applications,
the SBA paid EIDL grants of $15,000 and an EIDL loan of $101,300.

37. One EIDL application in J.N.’s name claimed that J.N. had a health
services business established on May 17, 2019, with 1 employee, and gross revenues
for the twelve months prior to January 31, 2020 of $55,840. The application listed

Harun as the preparer with $0 fee charged. In support of the application, a 2019
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 11 of 13
Form 1099-MISC was attached that identified J.N. as receiving $56,476 in
compensation from Embrace Africa. A copy of J.N.’s Home Care Aide Certification
was also included, though that certificate revealed her initial issuance was not until
December 8, 2020.

38. When interviewed by law enforcement, J.N. acknowledged that Harun
prepared the EIDL applications, and although J.N. said she worked as an employee
in the health services industry, she acknowledged that she did not have her own
business. J.N. did not provide any documentation or information to Harun to
support the date of establishment or revenue represented in the EIDL application.

PPP Application Harun Prepared Concerning C.H.

39. Law enforcement also interviewed an individual with the initials C.H.
who recalled that she worked for Harun preparing tax returns at Jackson Hewitt.
C.H. described how he/she had received an email sent to his/her business email
account from biz2credit. The email revealed that Harun had attempted to apply for
a PPP loan using C.H.’s name and identifiers. The application showed C.H.’s name
but Harun’s address and the company Embrace Africa. C.H. described how she had
no ownership of Embrace Africa.

40. Because the application was linked to C.H.’s email, she was able to use
the “forgot password” link to reset the password and view the application. When
C.H. viewed the application, C.H. confronted Harun about it. Harun told C.H. it

was submitted accidentally.
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 12 of 13
PPP Application Harun Prepared Concerning H.M.

41. SBA records reveal that Harun’s then-husband, who has the initials
H.M., had a PPP loan application and an EIDL application submitted on his behalf
and using his social security number. When interviewed by agents, H.M., who is
currently going through a divorce with Harun, advised that he was unaware of any
PPP or EIDL applications submitted under his name or identity.

42. SBA records show a fully cancelled PPP application specifying one
employee and an average monthly payroll of $7,917. Additionally, IRS database
records show a declined EIDL application for a business with one employee, gross
revenues of approximately $87,000, and cost of goods sold of $16,500. H.M.
confirmed that he had no business nor any employee working for him. When asked
about the email account associated with the PPP application, H.M. recalled that his
wife had created the email account and he did not use it. H.M. surmised that

Harun had filed the PPP and EIDL applications without his knowledge.
Case 1:22-mj-00051-BKE     Document 3-1     Filed 07/05/22     Page 13 of 13
CONCLUSION
I submit that there is probable cause to believe that Harun has violated 18
U.S.C. § 13843 and 15 U.S.C. § 645.

Respectfully submitted,

Brian (ruar

Brian Truax
Special Agent
U.S. Secret Service

Subscribed and sworn to me by reliable electronic means, namely
S pursuant to Fed. R. Crim. P. 4.1(b)(6), on July | , 2022.

Lek ge

Hoflotable BriAn K. Epps
United States Magistrate Judge
Southern District of Georgia


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