Indictment — United States of America v. Francisco E. Paulino (Case 1:26-cr-10231-JEK)

Summary

A grand jury indictment filed 08/25/26 in the District of Massachusetts, Case 1:26-cr-10231-JEK, charges Francisco E. Paulino with wire fraud and aiding and abetting (Counts One - Eight) and unlawful monetary transactions (Counts Nine - Eleven), with forfeiture allegations. It alleges that from in or around April 2020 until at least in or around December 2021, Paulino, owner of Madison Tax, LLC and Madison Mortgage, Inc., schemed to obtain PUA and EIDL funds. It states that on or about April 23, 2020 Paulino caused a PUA application to be filed in the name of a relative without the relative's knowledge, and that the DUA paid PUA benefits totaling $44,160. It also alleges an EIDL application for Jackson Enterprise, Inc. falsely reporting gross revenues of $426,755, followed by an EIDL of $136,700.

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

Record facts

Full text

Text recognized from a scanned document; may contain errors.

Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 1of 22

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

imi 26cr10231
UNITED STATES OF AMERICA Criminal No.

Violations:
Counts One - Eight: Wire Fraud; Aiding and
Abetting

(18 U.S.C. §§ 1343, 2)

FRANCISCO E. PAULINO,

Defendant

Counts Nine - Eleven: Unlawful Monetary

Transactions
(18 U.S.C. § 1957)

Wire Fraud Forfeiture Allegation:
(18 U.S.C. § 981(a)(1)(C) and

28 U.S.C. § 2461(c))

Money Laundering Forfeiture Allegation:
(18 U.S.C. § 982(a)(1))

INDICTMENT
At all times relevant to this Indictment:

General Allegations

1. Defendant Francisco E. PAULINO was a resident of Lawrence and Methuen,

Massachusetts.

2. PAULINO owned and operated Madison Tax, LLC (“Madison Tax”), a company
offering tax preparation and business planning services in Lawrence, Massachusetts.

3. PAULINO owned and operated Madison Mortgage, Inc. (“Madison Mortgage”), a

mortgage brokerage business in Lawrence, Massachusetts.
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 2 of 22

4. The Massachusetts Department of Unemployment Assistance (“DUA”) was a
state agency located in Boston, Massachusetts that administers unemployment benefits programs
in the Commonwealth of Massachusetts.

5. The United States Small Business Administration (the “SBA”) was an agency of
the executive branch of the United States government. The mission of the SBA 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. Among
other things, the SBA was authorized to make loans to eligible small businesses located in a
disaster area that suffered substantial economic injury as a result of the disaster. These were
called Economic Injury Disaster Loans (“EIDLs”).

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

7. The CARES Act created a new temporary federal unemployment insurance
program called pandemic unemployment assistance (“PUA”). The PUA program provided
unemployment benefits for individuals who were not eligible for regular unemployment benefits,
including independent contractors.

8. In addition, the CARES Act and subsequent legislation allocated billions of
dollars in EIDL funding and authorized the SBA to provide EIDLs to eligible small businesses

experiencing substantial financial disruptions due to the COVID-19 pandemic.
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 3 of 22

Scheme to Defraud

9, Beginning in or around April 2020, and continuing until at least in or around
December 2021, in the District of Massachusetts and elsewhere, PAULINO devised and
executed a scheme to fraudulently obtain pandemic-related relief funds—including PUA and
EIDL funds—in order to unlawfully enrich himself by, among other things, using the personal
identifying information of other individuals, using Madison Tax as a device of his scheme to
defraud, and using intermediaries to funnel pandemic-related relief funds to his own personal and
business bank accounts.

The Fraudulent PUA Claim

10. | The DUA administered and managed the PUA program in Massachusetts. The
United States Treasury transmitted CARES Act program monies to a People’s United Bank account
in Connecticut held in the name of the DUA. Then the PUA benefits were transmitted electronically
from Connecticut to the claimant’s designated bank account or the bank account for a Bank of
America prepaid debit card.

11. | Toreceive PUA benefits, Massachusetts claimants were required to, among other
things: (i) create an online account to submit the application (also known as PUA registration);
(ii) provide eligibility criteria; (iii) provide the reason for their unemployed status (e.g., how
COVID-19 affected their employment); and (iv) certify that all the statements in the application
were true. PUA claims submitted online to the DUA were processed via a server in Colorado.

12. Tocontinue to receive weekly PUA benefits, claimants were required to submit
weekly certifications online to the DUA confirming that they did not work, and did not receive any
income, during the weekly reporting period. These weekly certifications were also processed
through a server in Colorado. It was material to the DUA that it received truthful, complete, and

3
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 4 of 22

accurate information from applicants in the PUA registration, weekly certification, employment
substantiation, and eligibility verification process, so that PUA funds were disbursed to qualified
and eligible recipients.

13. On or about April 23, 2020, PAULINO caused an online application to be
submitted for PUA benefits (the PUA Registration) in the name of PAULINO’s relative, who
was approximately 77 years of age at the time (the “Relative”), without the Relative’s
knowledge. Certifying that the statements contained in the PUA Registration were truthful and
accurate, and acknowledging that the statements were made under the penalty of perjury and that
he could be subject to criminal prosecution, PAULINO made the following false statements on
the PUA Registration: (i) PAULINO checked the box stating that the Relative was “self
employed, an independent contractor, or a gig worker and COVID-19 has severely limited my
ability to perform my normal work,” (ii) PAULINO stated that the Relative worked in
Massachusetts in 2019, and (iii) PAULINO stated that the Relative’s total income for 2019 was
$4,650.

14. The PUA Registration that PAULINO filed in the Relative’s name asked that the
Relative’s PUA benefits be deposited electronically into Citizens Bank checking account no. -3102,
held solely in PAULINO’s name.

15. | The DUA approved the PUA claim which PAULINO submitted in the Relative’s
name, based in part on the false statements PAULINO made in the PUA Registration, and began
making PUA payments to the Relative by making electronic deposits into PAULINO’s Citizens
Bank checking account no. -3102 in April 2020.

16. Between on or about April 23, 2020, and on or about September 9, 2021, PAULINO
electronically filed Weekly Certifications with the DUA in connection with the claim he filed in the

4
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 5 of 22

Relative’s name. In each Weekly Certification, PAULINO acknowledged, among other things, that
“Claiming unemployment benefits for someone else is against the law.”

17. In or around March 2021, the DUA requested employment substantiation for 2019,
in order to determine the Relative’s eligibility to receive PUA. On or about June 17, 2021,
PAULINO submitted a false Employment Substantiation in the Relative’s name, certifying that the
Relative was self-employed in 2019 when in fact the Relative did not work in 2019 and had no
income in 2019. In support of the PUA claim, PAULINO also uploaded fabricated Internal Revenue
Service (“IRS”) documents for 2019 in the name of the Relative, including false IRS Form 1040
Schedules 1 and 2; a false IRS Schedule C showing $12,500 in business income; a false IRS
Schedule SE (Self-Employment Tax); and a false IRS Form 1099 purporting to reflect $12,500 in
nonemployee compensation paid to the Relative by Madison Tax.

18. Based on the Employment Substantiation and false IRS documentation
~ PAULINO provided for the Relative in June 2021, the DUA determined that the Relative was
qualified to receive PUA, that the Relative had not been overpaid PUA, and that the Relative was
not required to repay any PUA the Relative had previously received.

19. Based upon the PUA Registration and Weekly Certifications that PAULINO filed
in the name of the Relative, the DUA paid PUA benefits totaling $44,160. Approximately
$39,330 of the PUA benefit payments were sent via direct deposit to PAULINO’s Citizens Bank

account no. -3102.! PAULINO used the fraudulently obtained PUA proceeds to fund, among

other things, personal expenses such as real estate expenses, loan payments, and transfers to

' Taxes were withheld from some of the PUA payments.

5
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 6 of 22

PAULINO’s campaign account.”

20. | PAULINO knew that the PUA Registration, Employment Substantiation, IRS
documentation and Weekly Certifications he filed in the Relative’s name were false because
PAULINO knew the Relative did not work for and was not paid by Madison Tax in 2019.

The Fraudulent EIDL Application and Modifications

21. | CARES Act EIDLs had terms that were attractive to many small businesses,
including a low interest rate (3.75%), a long repayment period (30 years), and a deferred first
repayment date (usually twelve months after the date a borrower received their loan proceeds).

22. | The maximum amount of a CARES Act EIDL was initially $150,000. In or about
the week of April 6, 2021, the SBA increased the maximum to $500,000. On or about October 8,
2021, the SBA increased the maximum to $2,000,000.

23. | Asmall business applying fora CARES Act EIDL was required to complete a
loan application that requested information including, among other things, business name, owner
name, number of employees, gross revenues and cost of goods sold for the 12-month period
ending January 31, 2020. The applicant did not request a specific loan amount; the SBA
determined the amount based on the gross revenues and cost of goods sold identified on the
application. The applicant signed the application with a digital signature and submitted it through
the SBA’s online portal.

24. The application required the applicant to certify that all information on their

application, and any information submitted with their application, was “true and correct to the

2 PAULINO ran for a seat in the Massachusetts House of Representatives, 16" Essex
District, winning the election held in November 2021.

6
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 7 of 22

best of [their] knowledge,” and that they would “submit truthful information in the future.” The
borrower’s certification was material to the SBA’s decision whether to approve the loan.

25. | The SBA received EIDL applications and related documents electronically. All
EIDL applications and related documents submitted before July 11, 2020, traveled through a
server located in either Virginia, lowa, or Washington state. All EIDL applications and related
documents submitted on or after July 11, 2020, traveled through a server located in Iowa.

26. Ifthe SBA approved the EIDL loan, it sent the borrower three documents
electronically. The borrower had to sign these documents electronically and submit them to the
SBA before the SBA disbursed any EIDL funds. The documents were:

a. aLoan Authorization and Agreement (the “LA&A”), which described the
terms and conditions of the loan;

b. a promissory note (the “Note”), which stated the loan amount, the interest
rate, and the repayment schedule; and

c. a Security Agreement, which gave the SBA a security interest in the
borrower’s property in case the borrower defaulted on the loan.

27. Inthe LA&A, the borrower certified that “[a]ll representations in the Borrower’s
Loan application (including all supplementary submissions) are true, correct and complete and
are offered to induce SBA to make this Loan.” This certification was material to the SBA’s
decision whether to disburse the loan proceeds.

28. Upon receipt of a signed LA&A, Note, and Security Agreement, the SBA caused
EIDL proceeds to be electronically deposited into the borrower’s bank account.

29. After a borrower received their loan proceeds, they could ask the SBA for one or
more loan modifications for additional funds. The borrower did not need to complete another

7
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 8 of 22

application; the SBA relied on the borrower’s initial application, including the certification
contained therein, when determining whether to approve the borrower’s request for additional
funds.

30. ‘If the SBA approved the loan modification, the borrower was required to
electronically sign an amended LA&A, modified Note, and amended Security Agreement. In
each amended LA&A, the borrower again certified that “[a]ll representations in the Borrower’s
Loan application (including all supplementary submissions) are true, correct and complete and
are offered to induce SBA to make this Loan.” This certification in each amended LA&A was
material to the SBA’s decision whether to disburse the additional EIDL funds.

31. A business receiving EIDL funds could only use the funds to alleviate specific
economic injury from the COVID-19 pandemic. Specifically, borrowers could only use EIDL
funds for working capital necessary to carry the small business until resumption of normal
operations and for expenditures necessary to alleviate the specific economic injury, and could not
use EIDL funds for expansion of facilities or acquisition of fixed assets.

32. Before the SBA disbursed EIDL funds, borrowers were required to certify that the
funds would be used only for working capital to alleviate economic injury caused by the
COVID-19 pandemic. For example:

a. by signing the LA&A and any Amended LA&A, the borrower certified:
“Borrower will use all the proceeds of this Loan solely as working capital
to alleviate economic injury caused by [the] disaster occurring in the
month of January 31, 2020 and continuing thereafter... .”

b. by signing the Security Agreement and any Amended Security Agreement,
the borrower certified: “Borrower certifies that . . . none of the [loan

8
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 9 of 22

proceeds] are or will be primarily for personal, family or household
purposes....”
As set forth above, the borrower had to sign the LA&A and the Security Agreement, and any
Amended LA&A and Amended Security Agreement, electronically and submit them to the SBA
before the SBA would disburse any EIDL funds.

a. PAULINO’s Fraudulent EIDL Application for Jackson Enterprise

33. On or about November 25, 2019, PAULINO incorporated Jackson Enterprise, Inc.
(“Jackson Enterprise”) as a “fast food restaurant cafe” business located in Lawrence,
Massachusetts.

34. Jackson Enterprise opened a Heav’nly Donuts shop in Lawrence in August 2020.
Jackson Enterprise had no revenues prior to August 2020.

35. In or around April 2020, PAULINO electronically signed and caused to be
submitted to the IRS a federal tax return, prepared by Madison Tax, for Jackson Enterprise
stating that its gross receipts or sales in 2019 were $0.

36. In oraround May 2021, PAULINO electronically signed and caused to be
submitted to the IRS a federal tax return, prepared by Madison Tax, for Jackson Enterprise
stating that its gross receipts or sales in 2020 were $116,925.

37. On or about June 20, 2020, PAULINO electronically submitted an EIDL
application, in which he falsely represented that Jackson Enterprise’s gross revenues for the
twelve months ending January 31, 2020, were $426,755. On the EIDL application, PAULINO
indicated that an employee of Madison Tax had assisted in completing the application.

38. | The SBA approved PAULINO’s application. The false revenue amount reported
by PAULINO on the Jackson Enterprise application was material to the SBA’s decision to

9
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 10 of 22

extend an EJDL in the amount of $136,700.

39. Onor about July 16, 2020, PAULINO electronically signed and submitted an
LA&A, Note, and Security Agreement for an EIDL to Jackson Enterprise in the amount of
$136,700.

40. Onor about July 20, 2020:

a. approximately $136,600 in EIDL funds were electronically deposited into
Jackson Enterprise’s operating account at Citizens Bank, no. -7389; and

b. PAULINO then transferred all of the EIDL funds from Jackson
Enterprise’s operating account at Citizens Bank, no. -7389, to Jackson
Enterprise’s payroll account at Citizens Bank, no. -7397.

41. In or around December 2020, PAULINO transferred approximately $18,000 of
the EIDL funds from Jackson Enterprise’s payroll account at Citizens Bank, no. -7397, to
Madison Tax’s business checking account at Citizens Bank, no. -5593. Those funds were then
applied to the purchase of real property in Lawrence, Massachusetts.

b. PAULINO’s Fraudulent EIDL Modification for Madison Tax

42. | Onor about March 31, 2020, PAULINO electronically submitted an EIDL

application for Madison Tax.
43. | Onor about May 13, 2020,? PAULINO sent an email to the SBA regarding the

Madison Tax EIDL application which read as follows:

3 PAULINO sent an identical email to the SBA the day prior, May 12, 2020.

10
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 11 of 22

Sent: Wednesday, May 13, 2020 5:45 PM
Toa: cls@sba.gov
Subject: APPLICATION NUMBER: 3300551408

Good Moming,

Iam Francisco Paulino President of Madison Tax, LLC from Lawrence
Massachusetts. I applied for EIDL early on April and I know my
application had been overlooked. I had helped some of my client to
gettheirs application completed days after my was submitted and they
had been funded already. Please assign my application to a loan

officer and give access to the portal. 1 am desperate. As a accounting
office we serve the community of Lawrence one the poorest city in the
country. We need your help.

44. The SBA approved PAULINO’s application. On or about May 17, 2020,
PAULINO electronically signed and submitted an LA&A, Note, and Security Agreement for an
EIDL to Madison Tax in the amount of $109,300.

45. | Onor about May 19, 2020, approximately $109,2004 in EIDL funds were
electronically deposited into Madison Tax’s business checking account at Citizens Bank, no. -

5593.
46. Onor about April 15 and 24, 2021, PAULINO asked the SBA for an increase to

the Madison Tax EIDL.
47. | Onor about July 12, 2021, the SBA approved a modification to Madison Tax’s
| EIDL in the amount of $292,600, bringing the total loan amount to $401,800.
48. Onor about July 12, 2021, PAULINO electronically signed and submitted to the
SBA an Amended LA&A, 1° Modification of Note, and Amended Security Agreement for an
EIDL to Madison Tax in the amount of $401,800. When he signed the documents on or about

July 12, 2021, PAULINO falsely certified:

4 Tn some cases, the SBA deducted $100 from the loan amount as a processing fee.

11
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 12 of 22

a. in the Amended LA&A, “Borrower will use all the proceeds of this Loan
solely as working capital to alleviate economic injury caused by [the]
disaster occurring in the month of January 31, 2020 and continuing
thereafter... .”; and

b. in the Amended Security Agreement, “that . . . none of the [loan proceeds]
are or will be primarily for personal, family or household purposes .. . .”

In truth, PAULINO did not intend to use the Madison Tax EIDL funds solely as working capital
to alleviate economic injury caused by the COVID-19 pandemic.

49. Onor about July 16, 2021, approximately $292,500 in EIDL proceeds were
electronically deposited into Madison Tax’s business checking account at Citizens Bank, no. -
5593.

50. Onor about October 29, 2021, PAULINO transferred approximately $100,000 of
the EIDL funds from the Madison Tax business checking account at Citizens Bank, no. -5593 to
a Madison Mortgage business checking account at Citizens Bank, no. -7796. PAULINO then
caused approximately $600,000 ($100,000 of which was traceable to Madison Tax EIDL funds)
to be wired from the Madison Mortgage business checking account at Citizens Bank, no. -7796
to the account of a closing attorney to fund a $600,000 mortgage from Madison Mortgage to two
individuals for the purchase of real property in Methuen, Massachusetts. The interest rate on the
mortgage was 5.5%, and PAULINO charged the two individuals a $15,750 “Loan Origination
Fee.”

51. | Onor about December 2, 2021, PAULINO transferred approximately $120,000 of
the EIDL funds from the Madison Tax business checking account at Citizens Bank, no. -5593 to
a Madison Mortgage business checking account at Citizens Bank, no. -7796. PAULINO then

12
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 13 of 22

caused approximately $460,000 ($120,000 of which was traceable to Madison Tax EIDL funds)
to be wired from the Madison Mortgage business checking account at Citizens Bank, no. -7796
to the account of a closing attorney, to fund a $460,000 mortgage from Madison Mortgage to a
limited liability company for the purchase of real property in Lawrence, Massachusetts. The
interest rate on the mortgage was 7.94%, and PAULINO charged the limited liability company a
$9,200 “Loan Origination Fee.”

c. PAULINO’s Fraudulent EIDL Modification for Client 1

52. Several Madison Tax clients owned small businesses in and around Lawrence.
These clients were originally from the Dominican Republic or Guatemala and spoke limited
English. PAULINO was fluent in Spanish and English. PAULINO also had a law degree and a
Master of Laws degree in taxation, both from a law school in Boston.

53. Several of PAULINO’s clients hired him to perform bookkeeping and tax services
for their small businesses. Some of these clients gave PAULINO their social security numbers,
dates of birth, email addresses, and other identifying information. Some of these clients also gave
PAULINO their usernames and passwords for online access to their bank accounts.

54. | PAULINO encouraged Madison Tax clients to file applications for EIDL funding,
including modifications of funded loans. PAULINO completed at least some of his clients’ EIDL
applications; communicated with the SBA regarding his clients’ EIDL applications; signed his
clients’ names to their LA&As, Notes and Security Agreements without translating the
documents into their native language or explaining the terms of the documents to them; and
directed his clients regarding the use of their EIDL funds.

55. Client 1 was a Lawrence, Massachusetts resident originally from the Dominican
Republic. Client 1 had a sixth-grade education, did not read English, and spoke very little

13
Case 1:26-cr-10231-JEK Document1 .Filed 08/25/26 Page 14 of 22

English. Client 1 knew PAULINO for years, considered him a friend, and trusted him.

56. In or about 2015, Client 1 started a small coin-operated laundry business in
Lawrence (“Client 1 Business”) and hired PAULINO to handle all accounting and tax matters for
the business.

57. Client 1 gave PAULINO their Social Security number, date of birth, phone
number, email address, and other personal identifying information. Client 1 also gave PAULINO
the username and password for Client 1 Business’s accounts at Citizens Bank, nos. -1841
(checking) and -0157 (savings), so that PAULINO could conduct online banking, which Client 1
did not know how to use, for Client 1 Business.

58. In or about June 2020, PAULINO told Client 1 that the government was lending
money to small businesses because of the COVID-19 pandemic, and recommended that Client 1
apply. PAULINO told Client 1 that the interest rate for the loans was 0.1%, and that Client 1
could use the loan proceeds for anything they wanted, both of which PAULINO knew were
false. PAULINO said he would handle all the paperwork and Client 1 would not need to do
anything. Client 1 agreed.

59. | Onor about June 17, 2020, PAULINO submitted an EIDL application for Client 1
Business using the SBA’s online portal. The application identified PAULINO and Madison Tax
as the Agent assisting Client 1 with the application, but PAULINO did not show the application
to Client 1.

60. Although PAULINO knew Client 1’s personal email address, he did not put it on
the application. Instead, he used an email address to which he had access and which he knew
Client 1 never used.

61. Onor about June 20, 2020, the SBA approved an EIDL for Client 1 Business in

14
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 15 of 22

an amount of approximately $104,300. PAULINO signed the LA&A, Note, and Security
Agreement using Client 1’s digital signature and returned them to the SBA electronically. He did
not show or tell Client 1 about these documents.

62. Onor about June 23, 2020, approximately $104,200 in EIDL proceeds was
electronically deposited into Client 1 Business’s checking account at Citizens Bank, no. -1841.

63. On or before September 4, 2021, without Client 1’s knowledge, PAULINO asked
the SBA for a modification to Client 1 Business’s EIDL.

64. Onor about September 6, 2021, the SBA approved a modification to Client 1
Business’s EIDL in the amount of $243,200, bringing the total loan amount to $347,500.

65. On or about September 6, 2021, PAULINO electronically affixed Client 1’s
digital signature and submitted to the SBA an Amended LA&A, 1 Modification of Note, and
Amended Security Agreement for an EIDL to Client 1 Business in the amount of $347,500.
When he signed the documents for Client 1 on or about September 6, 2021, PAULINO falsely
certified:

a. inthe Amended LA&A, “Borrower will use all the proceeds of this Loan
solely as working capital to alleviate economic injury caused by [the]
disaster occurring in the month of January 31, 2020 and continuing
thereafter... .”; and

b. in the Amended Security Agreement, “that . . . none of the [loan proceeds]
are or will be primarily for personal, family or household purposes... .”

In truth, PAULINO did not intend for Client 1 to use Client 1 Business’s EIDL funds solely as
working capital to alleviate economic injury caused by the COVID-19 pandemic.

66. | Onor about September 13, 2021, approximately $243,200 in EIDL proceeds was

15
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 16 of 22

electronically deposited into Client 1 Business’s checking account at Citizens Bank, no. -1841.

67. On or about September 13, 2021, PAULINO used Client 1’s online-banking
username and password to access Client 1 Business’s checking account at Citizens Bank, no. -
1841, and transferred approximately $7,798.47 to the Madison Tax checking account at Citizens
Bank, no. -5593, without Client 1°s knowledge or permission.

68. On or about September 13, 2021, PAULINO told Client 1 that he had obtained
more government loan money for Client 1 Business, and that the funds had been deposited into
Client 1 Business’s checking account at Citizens Bank, no. -1841. PAULINO told Client 1 to
leave the money in the account. He said he was going to “propose a business deal for” Client 1,
or words along those lines.

69. Onor about September 14, 2021, PAULINO arranged for approximately
$227,000 of the new EIDL money to be transferred from Client 1 Business’s checking account,
no. -1841, to its savings account, no. -0157, at Citizens Bank.

70. | Between approximately September 14, 2021 and December 3, 2021, PAULINO
told Client 1 that he wanted Client 1 to lend him $200,000.

71. On or about December 3, 2021, Client 1 and PAULINO went to a Citizens Bank
branch, where they transferred $200,000 from Client 1 Business’s savings account, no. -0157, to
PAULINO’s Madison Tax checking account, no. -5593.

72. On or about December 6, 2021, PAULINO used the $200,000 from Client 1
Business’s EIDL to partially fund a $680,000 mortgage from Madison Mortgage to an individual
for the purchase of real property in Lawrence, Massachusetts. The interest rate on the mortgage

was 6.25%, and PAULINO charged the individual a $17,000 “Loan Origination Fee.”

16
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 17 of 22

The Grand Jury charges:

73.

COUNTS ONE - EIGHT

Wire Fraud; Aiding and Abetting

(18 U.S.C. §§ 1343, 2)

The Grand Jury re-alleges and incorporates by reference paragraphs 1-72 of this

Indictment.

On or about the dates set forth below, in the District of Massachusetts and

elsewhere, the defendant,

having devised and intending to devise a scheme and artifice to defraud, and for obtaining money
and property by means of materially false and fraudulent pretenses, representations, and promises,

did transmit and cause to be transmitted by means of wire communications in interstate and foreign

FRANCISCO E. PAULINO,

commerce, writings, signs, signals, pictures, and sounds for the purpose of executing the scheme

to defraud, as set forth below:
Count | Approximate Date Description
1 June 20, 2020 Electronic submission of EIDL application for Jackson
Enterprise to SBA
2 July 20, 2020 SBA electronic transfer of $136,600 to Jackson Enterprise’s
operating account at Citizens Bank, no. -7389
3 July 12, 2021 Electronic submission of Amended LA&A for Madison Tax

to SBA

4 July 16, 2021 SBA electronic transfer of $292,500 to Madison Tax’s
checking account at Citizens Bank, no. -5593

5 September 6, 2021 | Electronic submission of Amended LA&A for Client 1
Business to SBA

6 September 9, 2021 | Electronic submission of Weekly Certification for Week

Ending September 4, 2021, submitted to DUA

17
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 18 of 22

Count | Approximate Date | Description
7 September 13, 2021 | DUA electronic transfer of $482 to PAULINO’s Citizens
Bank checking account, no. -3102
8 September 13, 2021 | $243,200 SBA funds transfer to Client 1 Business Citizens

Bank checking account, no. -1841

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

18
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 19 of 22

COUNTS NINE — ELEVEN
Unlawful Monetary Transactions
(18 U.S.C. § 1957)

The Grand Jury charges:

75. | The Grand Jury re-alleges and incorporates by reference paragraphs 1-72 of this
Indictment.

76. On or about the dates set forth below, in the District of Massachusetts and
elsewhere, the defendant,

FRANCISCO E. PAULINO,

knowingly engaged and attempted to engage in the following monetary transactions by, through,
and to a financial institution affecting interstate commerce, that is, Citizens Bank, the deposits of
which are insured by the Federal Deposit Insurance Corporation, in criminally derived property of
a value greater than $10,000, which monetary transactions involved the proceeds of specified

unlawful activity, that is, wire fraud, in violation of 18 U.S.C. § 1343:

Count | Approximate Date Description

9 October 29, 2021 | Transfer of $100,000 from Madison Tax’s business checking
account at Citizens Bank, no. -5593, to Madison Mortgage’s
business checking account at Citizens Bank, no. -7796
10 December 2, 2021 | Transfer of $120,000 from Madison Tax’s business checking
account at Citizens Bank, no. -5593, to Madison Mortgage’s
business checking account at Citizens Bank, no. -7796
11 December 3, 2021 | Transfer of $200,000 from Client 1 Business’s savings
account at Citizens Bank, no. -0157, to Madison Tax’s
checking account at Citizens Bank, no. -5593

All in violation of Title 18, United States Code, Section 1957.

19
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 20 of 22

WIRE FRAUD FORFEITURE ALLEGATION
(18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c))

1. Upon conviction of one or more of the offenses in violation of Title 18, United

States Code, Section 1343, set forth in Counts One through Eight, the defendant,
FRANCISCO E. PAULINO,

shall forfeit to the United States, pursuant to Title 18, United States Code, Section 981(a)(1)(C),
and Title 28, United States Code, Section 2461(c), any property, real or personal, which
constitutes or is derived from proceeds traceable to the offense.

2. If any of the property described in Paragraph 1, above, as being forfeitable
pursuant to Title 18, United States Code, Section 981(a)(1)(C), and Title 28, United States
Code, Section 2461(c), 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;

©

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 intention of the United States, pursuant to Title 28, United States Code, Section 2461(c),
incorporating Title 21, United States Code, Section 853(p), to seek forfeiture of any other

property of the defendant up to the value of the property described in Paragraph One above.

All pursuant to Title 18, United States Code, Section 981(a)(1)(C), and Title 28, United

States Code, Section 2461(c).

20
Case 1:26-cr-10231-JEK Document1 Filed 08/25/26 Page 21 of 22

MONEY LAUNDERING FORFEITURE ALLEGATION
(18 U.S.C. § 982(a)(1))

l. Upon conviction of one or more of the offenses in violation of Title 18, United
States Code, Section 1957, set forth in Counts Nine through Eleven, the defendant,
FRANCISCO E. PAULINO,
shall forfeit to the United States, pursuant to Title 18, United States Code, Section 982(a)(1),
any property, real or personal, involved in such offenses, and any property traceable to such
property.

2. If any of the property described in Paragraph 1, above, as being forfeitable
pursuant to Title 18, United States Code, Section 982(a)(1), 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 intention of the United States, pursuant to Title 18, United States Code, Section 982(b),
incorporating Title 21, United States Code, Section 853(p), to seek forfeiture of any other
property of the defendants up to the value of the property described in Paragraph 1 above.

All pursuant to Title 18, United States Code, Section 982(a)(1).

21
Case 1:26-cr-10231-JEK Documenti Filed 08/25/26

A TRUE BILL

Page 22 of 22

FOREPERSO

I

ASSISTANT UNITED STATES ATTORNEYS
DISTRICT OF MASSACHUSETTS

District of Massachusetts: August oss , 2026
Returned into the District Court by the Grand Jurors and filed.

LS lean

DEPUTY CLERK UV


File and source

File

1-sealed-indictment.pdf

Size

1,456,129 bytes

SHA-256

0c7c70fe976a9bb753b1bf7829fe787bfe2489c06aa47538c2aceeffbb8ab492

Our copy

1-sealed-indictment.pdf

Original

storage.courtlistener.com