Indictment - United States v. Shibley companion docket

Record facts

U.S. District Court for the Western District of Washington · No. 2:20-cr-00174-JCC · Doc. 31 · 2020-10-15 · Docket on CourtListener

Summary

A grand jury indictment of Eric Shibley in United States v. Shibley, No. 2:20-cr-00174-JCC, in the U.S. District Court for the Western District of Washington, filed October 15, 2020 as Document 31. It opens with background on the Paycheck Protection Program and the Economic Injury Disaster Loan program under the CARES Act. The indictment states that Shibley, a medical doctor residing in Seattle, controlled various Washington limited-liability companies, including Dituri Construction LLC, SS1 LLC and Seattle's Finest Cannabis LLC, and that each had no employees for which federal payroll taxes were paid from on or about January 1, 2019, to on or about February 15, 2020. It identifies PPP lenders by number and lists bank accounts in the names of the Shibley Entities. The 19-page indictment closes with a forfeiture allegation under Title 18, United States Code, Section 982(a)(1).

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 1 of 19

Presented to the Court by the foreman of the
Grand Jury in open Court, in the presence
‘of the Grand Jury and FILED in the U.S.
DISTRICT COURT at Seattle, Washington

October 15, 2020

a Clerk
By Deputy

[/*

UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF WASHINGTON

AT SEATTLE
UNITED STATES OF AMERICA, NO. CR20-174 JCC
Plaintiff,
Vv. INDICTMENT
ERIC SHIBLEY,
Defendant.
The Grand Jury charges that:

The Paycheck Protection Program

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

2. In order to obtain a PPP loan, a qualifying business was required 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 |

INDICTMENT/ERIC SHIBLEY - 1 UNITED STATES ATTORNEY

700 STEWART STREET, STE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970

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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 2 of 19

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) was required to state, 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
showing their payroll expenses.

3. PPP loan applications were processed by a participating lender. If a PPP
loan application was approved, the participating lender funded the PPP loan using its own
monies, which were 100% guaranteed by the U.S. 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, was transmitted by the lender to
the SBA in the course of processing the loan.

4, PPP loan proceeds were required to be used by the business on certain
permissible expenses—payroll costs, interest on mortgages, rent, and utilities. The PPP
allowed the interest and principal on the PPP loan to be entirely forgiven if the business
spent the loan proceeds on the allowable expenses within a designated period of time and
used a certain percentage of the PPP loan proceeds on payroll expenses.

The Economic Injury Disaster Relief Program

5. The Economic Injury Disaster Loan (“EIDL”) program was an SBA
program that provided low-interest financing to small businesses, renters, and
homeowners in regions affected by declared disasters.

6. The CARES Act authorized the SBA to provide EIDLs of up to $2 million
to eligible small businesses experiencing substantial financial disruption due to the
COVID-19 pandemic. 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. The
amount of the advance was determined by the number of employees the applicant
certified having. The advances did not have to be repaid.

INDICTMENT/ERIC SHIBLEY - 2 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970

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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 3 of 19

7. In order to obtain an EIDL and advance, a qualifying business had to
submit an application to the SBA and provide information about its operations, such as
the number of employees, gross revenues for the 12-month period preceding the disaster,
and cost of goods sold in the 12-month period preceding the disaster. In the case of
EIDLs for COVID-19 relief, the 12-month period was that preceding January 31, 2020.
The applicant also had to certify that all of the information in the application was true and
correct to the best of the applicant’s knowledge.

8. EIDL applications were submitted directly to the SBA. The amount of the
loan, if the application was approved, was determined based, in part, on the information
provided by the applicant about employment, revenue, and cost of goods, as described
above. Any funds issued under an EIDL or advance were issued directly by the SBA.
EIDL funds could be used for payroll expenses, sick leave, production costs, and business
obligations, such as debts, rent, and mortgage payments. Ifthe applicant also obtained a
loan under the PPP, the EIDL funds could not be used for the same purpose as the PPP
funds.

Relevant Individuals

9. Defendant ERIC SHIBLEY was a medical doctor residing in Seattle,
Washington. On or about December 13, 2018, SHIBLEY pled guilty to a Violation of a
No Contact Order, a criminal misdemeanor under Washington State law. SHIBLEY’s
sentence included two years’ probation expiring on or about December 13, 2020.

10. Individual 1 was a resident of Seattle, Washington. On or about October
22, 2019, Individual 1 was charged in Washington State on state felony drug charges.
Individual 1 was arrested on or about April 21, 2020, for failing to appear in the pending
case that resulted from the October 2019 charges.

Relevant Entities
11. As of at least April 2020, SHIBLEY controlled various limited-liability

companies registered in Washington State (collectively, “the Shibley Entities”), including

INDICTMENT/ERIC SHIBLEY - 3 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970

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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 4 of 19

Dituri Construction LLC, $S1 LLC, Seattle’s Finest Cannabis LLC a/k/a SFC LLC, The
A Team Holdings LLC, ES1 LLC, and Eric R Shibley MD PLLC d/b/a Shibley Medical.
12.  Dituri Construction LLC was a Washington State Limited Liability

Company that was registered with the State of Washington on or about January 2, 2020.
Individual 1 was listed as Dituri Construction LLC’s only identified governor and the
business purported to be located at Individual 1’s residence. On or about January 9,
2020, Dituri Construction LLC obtained an Employer Identification Number (“EIN”)
ending in 8508 from the Internal Revenue Service (“IRS”).

a. On or about April 30, 2020, and May 1, 2020, a Statement of
Change and an Amended Annual Report, respectively, were filed with the State of
Washington listing SHIBLEY as the registered agent and only identified governor for
Dituri Construction LLC and SHIBLEY’s residence as the principal office address.

b. On or about May 5, 2020, an Operating Agreement dated on or
about January 7, 2020 was filed with the State of Washington purporting to show that
SHIBLEY owned 90 percent of Dituri Construction LLC.

c. On or about May 9, 2020, SHIBLEY and Individual 1 executed a
purchase agreement, made effective May 5, 2020, by which SHIBLEY purchased Dituri
Construction LLC from Individual 1 for $10.

d. On or about May 28, 2020, a second EIN ending in 8667 was
obtained from the IRS for an entity using the name Dituri Construction that purported to
be located at SHIBLEY’s residence.

e. From at least on or about January 1, 2019, to on or about February
15, 2020, Dituri Construction LLC had no employees for which federal payroll taxes
were paid.

13. SS1 LLC was a Washington State Limited Liability Company that was
registered with the State of Washington on or about October 3, 2017. SHIBLEY was
SS1 LLC’s registered agent and only identified governor. On or about January 2, 2018,
SS1 LLC obtained an EIN ending in 2134 from the IRS.

INDICTMENT/ERIC SHIBLEY - 4 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970
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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 5 of 19

a. SS1 LLC was administratively dissolved on or about March 3, 2020.
On or about April 6, 2020, SHIBLEY filed documentation with Washington State to
reinstate SS1 LLC.

b. On or about April 20, 2020, an EIN ending in 7509 was obtained
from the IRS for an entity using the name SS1 that purported to be located at SHIBLEY’s
residence.

C. From at least on or about January 1, 2019, to on or about February
15, 2020, SS1 LLC had no employees for which federal payroll taxes were paid.

14.  Seattle’s Finest Cannabis LLC was a Washington State Limited Liability
Company that was registered with the State of Washington on or about November 3,
2017. SHIBLEY was Seattle’s Finest Cannabis LLC’s registered agent and only
governor. Seattle’s Finest Cannabis LLC obtained an EIN ending in 3580 from the IRS
on or about November 13, 2017.

a. On or about May 13, 2020, SHIBLEY filed paperwork with the
Washington State Secretary of State changing Seattle’s Finest Cannabis LLC’s name to
SFC LLC.

b. From at least on or about January 1, 2019, to on or about February
15, 2020, Seattle’s Finest Cannabis LLC a/k/a SFC LLC had no employees for which
federal payroll taxes were paid.

15. The A Team Holdings LLC was a Washington State Limited Liability
Company that was registered with the State of Washington on or about December 10,
2018. SHIBLEY was The A Team Holdings LLC’s registered agent and only governor.
On or about February 7, 2019, The A Team Holdings LLC obtained an EIN ending in
7088 from the IRS.

a. From at least on or about January 1, 2019, to on or about February
15, 2020, The A Team Holdings LLC had no employees for which federal payroll taxes

were paid.

INDICTMENT/ERIC SHIBLEY - 5 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970
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Case 2:20-cr-00174-JCC Document 31 _ Filed 10/15/20 Page 6 of 19

16. _ES1 LLC was a Washington State Limited Liability Company that was
registered with the State of Washington on or about October 25, 2012. SHIBLEY was
ES1 LLC’s registered agent and only governor. On or about November 11, 2012, ES1
LLC obtained an EIN ending in 5849 from the IRS.

a. From at least on or about January 1, 2019, to on or about February
15, 2020, ES1 LLC had no employees for which federal payroll taxes were paid.

17. Eric R Shibley MD PLLC dba Shibley Medical was a Washington State
Professional Limited Liability Company that was registered with the State of Washington
on or about December 12, 2012. SHIBLEY was Eric R Shibley MD PLLC’s registered
agent and only governor. On or about December 23, 2012, Eric R Shibley MD PLLC
obtained an EIN ending in 9052 from the IRS.

a. From at least on or about January 1, 2019, to on or about February
15, 2020, Eric R Shibley MD PLLC had no employees for which federal payroll taxes
were paid.
Relevant PPP Lenders

18. Financial Institution 1 was a Federal Deposit Insurance Corporation-insured
bank headquartered in Salt Lake City, Utah. Financial Institution 1 participated as a PPP
lender to small businesses.

19. Lender 1 was a publicly traded real-estate investment trust with its primary
offices in New York, Texas, and New Jersey that participated in the PPP as both a lender
and a broker between borrowers and other PPP lenders. Lender | served as a broker for
PPP loans for Financial Institution 2, a Federal Deposit Insurance Corporation-insured
bank headquartered in West Reading, Pennsylvania. As a broker, Lender 1 collected and
provided loan applications to Financial Institution 2 for funding once approved.

20. Lender 2 was a non-bank small-business lender headquartered in Laguna

Hills, California. Lender 2 participated as a PPP lender to small businesses.

INDICTMENT/ERIC SHIBLEY - 6 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970

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Case 2:20-cr-00174-JCC Document 31 _ Filed 10/15/20 Page 7 of 19

21. Financial Institution 3 was a state-chartered, nationally-insured credit union
headquartered in Chubbuck, Idaho. Financial Institution 3 participated as a PPP lender to
small businesses.

22. Financial Institution 4 was a Federal Deposit Insurance Corporation-insured
bank headquartered in Detroit, Michigan. Financial Institution 4 participated as a PPP
lender to small businesses.

23. Financial Institution 5 was a Federal Deposit Insurance Corporation-insured
bank headquartered in Tukwila, Washington. Financial Institution 5 participated as a
PPP lender to small businesses.

24. Financial Institution 6 was a Federal Deposit Insurance Corporation-insured
bank headquartered in San Francisco, California. Financial Institution 6 participated as a
PPP lender to small businesses.

25. Financial Institution 7 was a Federal Deposit Insurance Corporation-insured
bank headquartered in Fort Lee, New Jersey. Financial Institution 7 participated as a PPP
lender to small businesses. |

26. Financial Institution 8 was a Federal Deposit Insurance Corporation-insured
bank headquartered in Portland, Oregon. Financial Institution 8 participated as a PPP
lender to small businesses.

Bank Accounts Controlled by SHIBLEY

27. | SHIBLEY controlled and had sole signatory authority over multiple bank
accounts in his name and in the names of the Shibley Entities at many different financial
institutions, including at Financial Institution 5, Financial Institution 6, Financial
Institution 9, and Financial Institution 10.

28. SHIBLEY controlled and was the sole signatory on the following bank

accounts at Financial Institution 5:

a. A checking account ending in 7277 in the name of Dituri
Construction LLC.
INDICTMENT/ERIC SHIBLEY - 7 UNITED STATES ATTORNEY

700 STEWART STREET, STE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970
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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 8 of 19

b. A savings account ending in 7219 in the name of Dituri Construction
LLC,
c. A checking account ending in 9724 in the name of SS1 LLC.
d, A savings account ending in 9683 in the name of SS1 LLC.
29. | SHIBLEY controlled and was the sole signatory on the following bank

accounts at Financial Institution 6:

a. A checking account ending in 9116 in the name of The A Team
Holdings LLC.

b. A savings account ending in 3536 in the name of The A Team |
Holdings LLC. |

30. Financial Institution 9 was a nationally-insured credit union headquartered |
in Vienna, Virginia. SHIBLEY controlled and was the sole signatory on the following |
bank accounts at Financial Institution 9:

a. A checking account ending in 9972 in the name of Eric R Shibley
MD PLLC.

b. A savings account ending in 7528 in the name of Eric R Shibley MD
PLLC.

C. SHIBLEY also controlled a savings account ending in 4507 in the
name of ES1 LLC.

31. Financial Institution 10 was a nationally-insured credit union headquartered
in Seattle, Washington. SHIBLEY controlled and was the sole signatory on the
following bank accounts at Financial Institution 10:

a. A savings account ending in 5320 in the name of SS1 LLC.

INDICTMENT/ERIC SHIBLEY - 8 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970
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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 9 of 19

COUNTS 1-7
(Wire Fraud)

32. The allegations in Paragraphs 1 — 31 are re-alleged and incorporated by
reference as if set forth in full herein.

A. The Scheme to Defraud

33. Beginning in or around April 2020, and continuing until in or around June
2020, in Seattle, within the Western District of Washington, and elsewhere, defendant
ERIC SHIBLEY, together with others known and unknown to the Grand Jury, knowingly
and with intent to defraud, devised and executed and attempted to execute a scheme and
artifice to defraud Financial Institution 1, Financial Institution 2, Financial Institution 3,
Financial Institution 4, Financial Institution 5, Financial Institution 6, Financial
Institution 7, Financial Institution 8, Lender 1, Lender 2, and the SBA and to obtain
money and property in the custody and control of Financial Institution 1, Financial
Institution 2, Financial Institution 3, Financial Institution 4, Financial Institution 5,
Financial Institution 6, Financial Institution 7, Financial Institution 8, Lender 1, Lender 2,
and the SBA by means of material false and fraudulent pretenses, representations, and
promises, and the concealment of material facts, all by filing false and fraudulent
applications for PPP and EIDL funds.
B. Purpose of the Scheme to Defraud

34. The purpose of the scheme to defraud was for SHIBLEY to unjustly enrich
himself by obtaining PPP and EIDL loan proceeds under false and misleading pretenses,
including by making false statements about the monthly payroll expenses, employees,
and revenues of the Shibley Entities and about SHIBLEY’s probation status. It was also
the purpose of the scheme to defraud to conceal the scheme.
C. Manner and Means of the Scheme to Defraud

35. Tocarry out the scheme to defraud, SHIBLEY submitted and caused to be
submitted multiple fraudulent PPP loan applications on behalf of the Shibley Entities to
Financial Institution 1, Financial Institution 2, Financial Institution 3, Financial Institution

INDICTMENT/ERIC SHIBLEY - 9 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970

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Case 2:20-cr-00174-JCC Document 31 _ Filed 10/15/20 Page 10 of 19

4, Financial Institution 5, Financial Institution 6, Financial Institution 7, Financial
Institution 8, Lender 1, and Lender 2 (“the Fraudulent PPP Applications”) and
approximately 13 fraudulent EIDL loan applications on behalf of the Shibley Entities to
the SBA (“the Fraudulent EIDL Applications”).

36. In each of the Fraudulent PPP Applications and the Fraudulent EIDL
Applications, SHIBLEY identified himself as the sole or majority owner of each entity.

37. | SHIBLEY made, and caused to be made, material false statements in each of
the Fraudulent PPP Applications, which SHIBLEY knew to be false when he made them
and caused them to be made. For example: |

a. In each of the Fraudulent PPP Applications, SHIBLEY falsely
certified that he was not currently on probation. In fact, as SHIBLEY knew, he was on
probation in Washington State at the time he submitted the applications.

b. In each of the Fraudulent PPP Applications, SHIBLEY knowingly
provided false information about the number of employees the Shibley Entities had for
whom payroll taxes were paid as of February 15, 2020. In fact, as SHIBLEY knew, none
of the Shibley Entities had the number of qualifying employees SHIBLEY claimed on the
applications as of February 15, 2020.

C. In each of the Fraudulent PPP Applications, SHIBLEY knowingly
provided false information about the monthly payroll obligations of each of the Shibley
Entities. In fact, as SHIBLEY knew, none of the Shibley Entities had the monthly payroll
obligations that SHIBLEY falsely claimed them to have.

d. SHIBLEY provided false tax return information, which SHIBLEY
knew to be false when he provided it, to Financial Institution 1, Financial Institution 3,
Financial Institution 4, Financial Institution 5, Financial Institution 6, Financial Institution
7, Financial Institution 8, Lender 1, and Lender 2 to support the Fraudulent PPP
Applications, including fake IRS Forms 941 that included false statements about the
taxable wages, tips, and other compensation the Shibley Entities had paid to employees in
tax years 2019 and in the first quarter of 2020. In fact, none of the Shibley Entities had

INDICTMENT/ERIC SHIBLEY - 10 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970

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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 11 of 19

filed IRS Forms 941 for tax years 2019 and the first quarter of 2020 and had not paid the
taxable wages, tips, and other compensation reported in the IRS Forms 941 SHIBLEY
submitted.

38. SHIBLEY submitted multiple applications to different PPP lenders in the
name of Eric R Shibley MD PLLC using different EINs.

39.  Onat least two occasions, SHIBLEY fraudulently used the identities of other
individuals to support his false claims that Dituri Construction LLC and SS1 LLC had
qualifying employees by providing the individuals’ names and the last four digits of their
social security numbers to PPP lenders.

40. SHIBLEY opened checking and savings accounts in the names of some of
the Shibley Entities shortly before or at the time he submitted fraudulent PPP loan
applications in their names. SHIBLEY then provided these account numbers to the PPP
lenders to which he submitted fraudulent loan applications as business accounts into which
PPP loan funds should be deposited. For example:

a. On or about April 21, 2020, SHIBLEY opened Financial Institution
5 accounts ending in 9724 and 9683 in the name of SS1 LLC, approximately six days
after SHIBLEY submitted the first fraudulent PPP loan application in SS1 LLC’s name.

b. On or about April 30, 2020, SHIBLEY opened Financial Institution
5 accounts ending in 7219 and 7277 in the name of Dituri Construction LLC, the same
day SHIBLEY submitted the first fraudulent PPP loan application in Dituri Construction
LLC’s name.

41. SHIBLEY made, and caused to be made, material false statements in the
Fraudulent EIDL Applications, which SHIBLEY knew to be false when he made them and
caused them to be made. SHIBLEY knowingly provided false information about the
Shibley Entities’ operations, including the entities’ gross revenues, cost of goods sold, and
number of employees in the twelve-month period preceding January 31, 2020.

42. In addition, on several of the Fraudulent EIDL Applications SHIBLEY
falsely certified that he was not currently on probation. In fact, as SHIBLEY knew, he was

INDICTMENT/ERIC SHIBLEY - 11 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970

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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 12 of 19

on probation in Washington State at the time he submitted the applications.

43. In at least two of the Fraudulent EIDL Applications, SHIBLEY falsely
claimed to own and operate a sole proprietorship in his name. In fact, SHIBLEY knew that
no sole proprietorship in his name existed.

44. Toconceal the scheme to defraud, SHIBLEY transferred PPP loan and EIDL
funds he received, based on the false representations he made and caused to be made in the
Fraudulent PPP Applications and the Fraudulent EIDL Applications, between bank
accounts he controlled shortly after he first received the funds.

45. To further conceal the scheme to defraud, SHIBLEY withdrew PPP loan
funds he received from PPP lenders in cash.

D. Execution of the Scheme to Defraud

46. Onor about the dates set forth below, in Seattle, in the Western District of
Washington, and elsewhere, defendant ERIC SHIBLEY, for the purpose of executing the
above-described scheme to defraud, did knowingly transmit and cause to be transmitted
by means of wire communication in interstate commerce the following writing, signals,

pictures, and sounds:

Count __ Date Interstate Wire Transmission

Electronic transmission of loan note with false

1 April 23, 2020 | certifications in the name of The A Team Holdings LLC to
Lender 1.

Electronic transmission of fraudulent PPP loan application
2 April 25, 2020 | in the name of Seattle’s Finest Cannabis LLC to Financial
Institution 4.

Electronic transmission of fraudulent PPP loan application
in the name of Dituri Construction LLC to Lender 1
Electronic transmission of fraudulent PPP loan application
4 May 4, 2020 | in the name of Dituri Construction LLC to Financial
Institution 1.

Electronic transmission of loan note with false
certifications to Lender 2 in the name of SS1 LLC.
Electronic transmission of fraudulent EIDL loan application
in the name of Dituri Construction LLC to the SBA.

3 May 2, 2020

5 May 5, 2020

6 June 7, 2020

INDICTMENT/ERIC SHIBLEY - 12 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970

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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20

Page 13 of 19

7 June 7, 2020

in the name of SS1 LLC to the SBA.

Electronic transmission of fraudulent EIDL loan application

All in violation of Title 18, United States Code, Sections 1343 and 2.

INDICTMENT/ERIC SHIBLEY - 13

UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970

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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 14 of 19

COUNTS 8 — 10
(Bank Fraud)

47. The allegations in Paragraphs 1 — 31 and 33 — 45 are re-alleged and
incorporated by reference as if set forth in full herein.

A. The Scheme to Defraud

48. From in or around April 2020 through in or around June 2020, at Seattle, in
the Western District of Washington and elsewhere, defendant ERIC SHIBLEY, together
with others known and unknown to the Grand Jury, did knowingly and intentionally
devise and intend to devise a scheme to obtain money, funds, assets, and property owned
by and under the custody and control of financial institutions participating in the PPP
loan program, specifically Financial Institution 1, Financial Institution 2, Financial
Institution 3, Financial Institution 4, Financial Institution 5, Financial Institution 6,
Financial Institution 7, and Financial Institution 8 by means of materially false and
fraudulent pretenses, representations, and promises, and the concealment of material
facts.

B. The Purpose of the Scheme to Defraud

49. The purpose of the scheme to defraud was for SHIBLEY to unjustly enrich
himself by obtaining PPP loan proceeds under false and misleading pretenses, including
by making false statements about the monthly payroll expenses and employees, of the
Shibley Entities and about SHIBLEY’s probation status. It was also the purpose of the
scheme to defraud to conceal the scheme.

Cc. Execution of the Scheme to Defraud

50. On or about the following dates, at Seattle, in the Western District of
Washington and elsewhere, defendant SHIBLEY committed and willfully caused others to
commit the following acts, each of which constituted an execution of the fraudulent

scheme:

Count Date Act
8 April 25, 2020 Submission of fraudulent PPP loan application in the name

of Seattle’s Finest Cannabis LLC to Financial Institution 4.

INDICTMENT/ERIC SHIBLEY - 14 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970

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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 15 of 19

9 April 30. 2020 Submission of a signed loan note with false certifications to
P , Financial Institution 2 for The A Team Holdings LLC.
Submission of fraudulent PPP loan application in the name
10 May 4, 2020 of Dituri Construction LLC to Financial Institution 1.
All in violation of Title 18, United States Code, Sections 1344(2) and 2.
INDICTMENT/ERIC SHIBLEY - 15 UNITED STATES ATTORNEY

700 STEWART STREET, STE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970

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oN A WN BWW NO FP OO Mm N DU HF WY KF &

Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 16 of 19

COUNTS 11-15

(Money Laundering)

51. The allegations in Paragraphs 1 — 50 are re-alleged and incorporated by
reference as if set forth in full herein.

52. Onor about the dates set forth below, in the Western District of
Washington and elsewhere, defendant ERIC SHIBLEY, knowing that the funds involved
represented proceeds of some form of unlawful activity, engaged in and willfully caused
others to engage in the following monetary transactions, in and affecting interstate
commerce, in criminally derived property of a value greater than $10,000, which
property, in fact, was derived from specified unlawful activity, namely, wire fraud in
violation of 18 United States Code, Section 1343, and bank fraud in violation of 18
United States Code, Section 1344(2), as charged in Counts 1 — 10:

Count Date Monetary Transaction

Transfer of $960,000 from Financial Institution 6 account
ending in 9116 in the name of The A Team Holdings LLC to
Financial Institution 6 account ending in 3536 in the name of
The A Team Holdings LLC.

11 | May 4, 2020

Transfer of $563,500 from Financial Institution 5 account
ending in 7277 in the name of Dituri Construction LLC to
Financial Institution 5 account ending in 7219 in the name of
Dituri Construction LLC.

12 May 6, 2020

Transfer of $820,000 from Financial Institution 5 account
13. | May 19, 2020 | ending in 9724 in the name of SS1 LLC to Financial
Institution 5 account ending in 9683 in the name of SS1 LLC.

Withdrawal of $150,000 in cash from Financial Institution 6
14. | May 26, 2020 | account ending in 3536 in the name of The A Team Holdings
LLC.

Deposit of $20,000 cashier’s check from Financial Institution
15 | June 22, 2020 | 10 account ending in 5320 into Financial Institution 9 account
ending in 4507 in the name of ES1 LLC.

All in violation of Title 18, United States Code, Sections 1957 and 2.

INDICTMENT/ERIC SHIBLEY - 16 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970
Oo eo N DA nA FW NY

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oN AO AW BR WHY KF OO wmOAN DUN FP WN KF O&O

Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 17 of 19

FORFEITURE ALLEGATIONS
The allegations contained in Counts 1 —7 of this Indictment are hereby realleged

and incorporated by reference for the purpose of alleging forfeiture. Upon conviction of
an offense alleged in Counts 1 — 7, the Defendant ERIC SHIBLEY shall forfeit to the
United States, pursuant to Title 18, United States Code, Section 981(a)(1)(C), by way of
Title 28, United States Code, Section 2461(c), any property that constitutes or is traceable
to proceeds of the offense. This property includes, but is not limited to:

1. $804,816.63 in U.S. funds seized on or about May 27, 2020 from Financial

Institution 6 account ending in 3536 held in the name of The A Team
Holdings, LLC;

2. $100,000 in U.S. funds seized on or about May 29, 2020 from Financial
Institution 6 account ending in 2378 held in the name of ES1, LLC;

3. $49,500.86 in U.S. funds seized on or about May 29, 2020 from Financial
Institution 9 account ending in 7528 held in the name of Eric R. Shibley MD,
PLLC;

4. $114,440 in U.S. funds seized on or about June 25, 2020 from Financial
Institution 10 account ending in 5390 held in the name of Dituri Construction,
LLC;

5. $114,743.59 in U.S. funds seized on or about June 25, 2020 from Financial
Institution 10 account ending in 5320 held in the name of SS1, LLC; and,

6. A sum of money reflecting the proceeds the Defendant obtained from the

offense.

The allegations contained in Counts 8 — 10 of this Indictment are hereby realleged
and incorporated by reference for the purpose of alleging forfeiture. Upon conviction of
an offense alleged in Counts 8 — 10, the Defendant ERIC SHIBLEY shall forfeit to the
United States, pursuant to Title 18, United States Code, Section 982(a)(2), any property

that constitutes or is traceable to proceeds of the offense.

INDICTMENT/ERIC SHIBLEY - 17 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970
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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 18 of 19

The allegations contained in Counts 11 — 15 of this Indictment are hereby
realleged and incorporated by reference for the purpose of alleging forfeiture. Upon
conviction of an offense alleged in Counts 11 — 15, the defendant, ERIC SHIBLEY, shall —
forfeit to the United States, pursuant to Title 18, United States Code, Section 982(a)(1),
any property involved in the offense, or any property traceable to such property.

(Substitute Assets)

If any of the above-described forfeitable property, as a result of any act or
omission of the defendant,

a. cannot be located upon the exercise of due diligence;

b. has been transferred or sold to, or deposited with, a third party;

c. has been placed beyond the jurisdiction of the Court;

d. has been substantially diminished in value; or

e. has been commingled with other property which cannot be divided without

difficulty;
it is the intent of the United States, pursuant to Title 21, United States Code, Section
853(p), and Title 28, United States Code, Section 2461(c), to seek the forfeiture of any
other property of the defendant, up to the value of the above-described forfeitable
property.
//
/

INDICTMENT/ERIC SHIBLEY - 18 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220

SEATTLE, WASHINGTON 98101
(206) 553-7970

—

.

—
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Case 2:20-cr-00174-JCC Document 31 Filed 10/15/20 Page 19 of 19

Vins

T. MORAN

B
[nite ates Attorney

OC
ANDREW C. FRIEDMAN
Assistant United States Attorney

Pen

BRIAN D. WERNER
Assistant United States Attorney

INDICTMENT/ERIC SHIBLEY - 19

A TRUE BILL:
DATED: _/© / /5/en0

(Signature of Foreperson redacted
Pursuant to the policy of the Judicial
Conference of the United States)

FOREPERSON

DANIEL S. KAHN
Acting Chief, Fraud Section
Criminal Division, Department of Justice

pA fe

AMANDA R. VAUGHN
Trial Attorney

LAURA CONNELLY
Trial Attorney

UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220
SEATTLE, WASHINGTON 98101
(206) 553-7970

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