Complaint for Violation of Federal False Claims Act — No. 2:22-cv-11432 (Dkt. 1, E.D. Mich.)

Summary

A False Claims Act complaint filed in camera and under seal on June 21, 2022 in the U.S. District Court for the Eastern District of Michigan, Case 2:22-cv-11432, by pro se relator Aidan Forsyth on behalf of the United States against Firas Hajjar, Nadine Hajjar, Mark Hajjar, Your Fantasy Warehouse, Inc., Ugly Christmas Sweater, Inc. and Costume Agent, Inc. It alleges that the defendants applied for and received PPP funds despite PPP rules barring applicants convicted of certain felonies within the last five years, or any other felony within the last year. The complaint states that Your Fantasy Warehouse received a PPP loan of $369,380 on or about June 22, 2020, which was forgiven on March 11, 2021. The relator seeks damages and civil penalties on behalf of the United States.

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4. Case 2:22-cv-11432-DML-JJCG ECF No.1, PagelD.1 Filed 06/21/22 Page 1 of 24

PET 4H 15 6000594 2

Aidan Forsyth
903 East 430 South G
Salem, UT 84653
801-473-9951
aafpretail@gmail.com
jbq.esq@gmail.com

Plaintiff/Relator
Pro Se
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
UNITED STATES OF AMERICA, ex rel. COMPLAINT FOR VIOLATION OF
AIDAN FORSYTH, FEDERAL FALSE CLAIMS ACT
Plaintiff, (Filed in camera and under seal)
(DO NOT PLACE ON PACER)
VS.
JURY TRIAL DEMANDED

FIRAS HAJJAR, NADINE HAJJAR, MARK
HAJJAR, YOUR FANTASY WAREHOUSE, o,
INC., UGLY CHRISTMAS SWEATER, ase:2:22-cv-11432

Judge: Steeh, George Caram
INC., and COSTUME AGENT, INC., MJ: Grey, Jonathan J.C.

Filed: 06-21-2022 At 12:26 PM
Defendants. CMP USA V. SEALED (DA)

Plaintiff-Relator Aidan Forsyth, acting on behalf of the United States of America (the
“Government” or the “Federal Government”) and against the above-named Defendants,

alleges based upon personal knowledge, relevant documents, information, and belief, as follows.

INTRODUCTION

1. This is an action to recover damages and civil penalties on behalf of the United
States of America arising from false and/or fraudulent records, statements, and claims made and
caused to be made by Defendants and/or their agents and employees, in violation of the federal

False Claims Act, 31 U.S.C. §§ 3729, et seq. (“the FCA”).


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2. This action seeks to recover hundreds of thousands of federal dollars wrongfully
loaned to Defendants through the Federal Government’s Payroll Protection Program (“PPP”).
The PPP provides a pathway to borrowers for forgiveness of these loans.

3. Pursuant to the PPP, the Federal Government has spent billions of dollars in
stimulus funding, as well as other federal funding, to support and aid legitimate businesses
through the coronavirus pandemic.

4, This action alleges that Defendants applied for PPP funds and received PPP funds
despite the PPP application and rules prohibiting applicants from receiving PPP funds when they
are were convicted of a felony involving fraud, bribery, embezzlement, or a false statement in a
loan application for federal financial assistance within the last five years or any other felony
within the last year.

5. The FCA was enacted during the Civil War, and was substantially amended in
1986, and again in 2009 and 2010. Congress amended the FCA in 1986 to enhance the Federal
Government’s ability to recover losses sustained as a result of fraud against the United States
after finding that fraud in federal programs was pervasive and that the FCA, which Congress
characterized as a primary tool for combating government fraud, was in need of modernization.
The amendments create incentives for individuals to come forward with information about fraud
against the Federal Government without fear of reprisals or inaction, and enable the use of
private legal resources to prosecute fraud claims on the Federal Government’s behalf.

6. The FCA prohibits, inter alia: (1) knowingly presenting, or causing to be
presented, a false or fraudulent claim for payment or approval; and (2) knowingly making or
using, or causing to be made or used, a false or fraudulent record or statement material to a false
or fraudulent claim. 31 U.S.C. §§ 3729(a)(1)(A), (B). Any person who violates the FCA is liable

for a civil penalty for each such claim, plus three times the amount of the damages sustained
2

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by the Government. 31 U.S.C. § 3729(a)(1)(A) (as adjusted by the Federal Civil Penalties
Inflation Adjustment Act of 1990 [28 U.S.C. § 2461 note; Public Law 104-410)).

7. In 2009, Congress amended the FCA to clarify that a “claim” includes “any
request or demand, whether under a contract or otherwise, for money or property and whether or
not the United States has title to the money or property that (i) is presented to an officer,
employee, or agent of the United States; or (ii) is made to a contractor, grantee, or other
recipient, if the money or property is to be spent or used on the Government’s behalf or to
advance a Government program or interest...” 31 U.S.C. § 3729(b)(2).

8. The FCA allows any person having information about an FCA violation to bring
an action for himself and the Federal Government, and to share in any recovery. The FCA
requires that the complaint be filed under seal for a minimum of 60 days (without service on
Defendants during that time) to allow the Federal Government time to conduct its own
investigation and to determine whether to join the suit.

9. Based on the foregoing laws, gui tam Plaintiff/Relator seeks through this action to
recover all available damages, civil penalties, and other relief for the violations alleged herein in
every jurisdiction to which Defendants’ misconduct has extended.

PARTIES

10. __ Plaintiff/Relator Aidan Forsyth (“Relator”) is a resident of New York. He brings
this action on behalf of the United States of America, the real party in interest.

11. Upon information and belief, Defendant Firas Hajjar (“F. Hajjar”) is a resident
within the boundaries of the Eastern District of Michigan.

12. Upon information and belief, Defendant Nadine Hajjar (“N. Hajjar’”) is the
spouse of F. Hajjar and is also a resident within the boundaries of the Eastern District of

Michigan.

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13. | Upon information and belief, Mark Hajjar (“M. Hajjar”) is the brother of F.
Hajjar and is a resident within the boundaries of the Eastern District of Michigan.

14. Defendant Your Fantasy Warehouse, Inc. (“Your Fantasy Warehouse”) is an
entity doing business within the boundaries of the Eastern District of Michigan. F. Hajjar and N.
Hajjar, through Your Fantasy Warehouse, applied for and received a PPP loan in the amount of
$369,380 on or about June 22, 2020.

15. Said loan was forgiven on March 11, 2021.

16. According to the PPP application discussed below, owners of Your Fantasy
Warehouse include partners or members owning 20% or more equity in the company. Upon
information and belief, and after further discovery in this matter, Relator anticipates he may need
to amend this Complaint to add in such owners or representatives as co-defendants if they were
complicit in the fraudulent misrepresentations listed herein.

17. The individual Defendants further applied for and obtained PPP loans and an
EIDL loan ostensibly for the entity Defendants, as explained below.

JURISDICTION AND VENUE

18. | This Court has jurisdiction over the subject matter of this action pursuant to 28
U.S.C. § 1331 and 31 U.S.C. § 3732, the latter of which specifically confers jurisdiction on this
Court for actions brought pursuant to 31 U.S.C. §§ 3729 and 3730. Although this issue is no
longer jurisdictional after the 2009 amendments to the FCA, to Realtor’s knowledge there has
been no statutorily relevant public disclosure of the “allegations or transactions” in this
Complaint, as those concepts are used in 31 U.S.C. § 3730(e), as amended by Pub. L. No. 111-
148, § 10104()(2), 124 Stat. 119, 901-02.

19. Moreover, whether or not such a disclosure has occurred, Relator would qualify

as an “original source” of the information on which the allegations or transactions in this

4

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Complaint are based. Plaintiff researched and discovered the pertinent entity information and
individual information of each Defendant.

20. This Court has personal jurisdiction over Defendants pursuant to 31 U.S.C. §
3732(a) because that section authorizes nationwide service of process and because Defendants
are Michigan residents or a Michigan entity.

21. | Venue is proper in the Eastern District of Michigan pursuant to 28 U.S.C. §
1391(b)-(c) and 31 U.S.C. § 3732(a) because Defendants can be found in and/or transacted
business in this district, and because violations of 31 U.S.C. §§ 3729 et seq. alleged herein
occurred within this district. At all times relevant to this Complaint, Defendants regularly
conducted substantial business within this district.

THE PAYCHECK PROTECTION PROGRAM

22. Congress added sections 1102 and 1106 of the Coronavirus Aid, Relief, and
Economic Security Act (“CARES Act”). Section 1102 contains a new program called the
Paycheck Protection Program (“PPP”) and is party of the U.S. Small Business Administration’s
(“SBA”) 7(a) Loan Program. These two sections are intended to provide economic relief to
small businesses nationwide adversely impacted by the coronavirus pandemic and the COVID-
19 Emergency Declaration issued by President Trump on March 13, 2020.

23. Due to the COVID-19 emergency, many small businesses nationwide are
experiencing economic hardship as a direct result of the Federal, State, and local public health
measures that are being taken to minimize the public’s exposure to the coronavirus.

24. The SBA received funding and authority through the CARES Act to modify
existing loan programs and establish the new PPP loan program to assist small businesses

nationwide adversely impacted by the coronavirus pandemic.

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25. Section 1102 of the Act temporarily permits SBA to guarantee 100% of 7(a) loans
under the PPP. Section 1106 of the CARES Act provides for forgiveness of up to the full
principal amount of qualifying loans guaranteed under the PPP.

26. |The CARES Act was intended to provide relief to America’s small businesses
expeditiously.

27. | The CARES Act gives lenders delegated authority to process loan applications for
PPP funding. SBA allowed lenders to rely on certifications of the borrowers in order to
determine eligibility of the borrower and use of loan proceeds, and to rely on specified
documents provided by the borrower to determine qualifying loan amount, and eligibility for
loan forgiveness. Lenders are held harmless for borrowers’ failures to comply with PPP rules.

28. Defendants had to submit documentation necessary to establish eligibility such as
payroll processor records, payroll tax filings, form 1099s, income and expenses documentation.

29. In general, Defendants calculated an amount to borrow by aggregating payroll
costs from the previous 12 months for employees whose principal place of residence is the
United States. Annual employee salaries are capped at $100,000. The borrower then calculated
the average monthly payroll cost and multiplied that amount by a factor of 2.5.

30. One certification on the Application states, “Current economic uncertainty makes
this loan request necessary to support the ongoing operations of the Applicant.”

31. | Your Fantasy Warehouse, Ugly Christmas Sweater, and Costume Agent certified
on their PPP application that within the last five years neither the applicant nor any owner of the

applicant had been convicted or pleaded guilty for any felony. See, section 6 on the PPP

application.


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32. Defendants also “further certify that the information provided in this application
and the information provided in all supporting documents and forms is true and accurate in all
material respects.”

33. Finally, Defendants certified on the PPP loan applications that they “understand
that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable
under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five
years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two
years and/or a fine of not more than $5,000; and, if submitted to a federally insured institution,
under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than
$1,000,000.”

ALLEGATIONS

34. On October 17, 2019, F. Hajjar pleaded guilty in case 2:19-cr-20631-DPH-EAS to
“evasion of assessment, in violation of 26 U.S.C. § 7201.” See, F. Hajjar’s “Rule 11 Plea
Agreement” attached hereto as Exhibit A.

35. Specifically, according to the Plea Agreement, F. Hajjar “attempted to evade or
defeat a tax or the payment thereof,” an “additional tax was due and owing,” and he “acted
willfully.” Jd. at 1.

36.  F. Hajjar’s tax evasion specifically related to Your Fantasy Warehouse according
to the Plea Agreement: “Your Fantasy Warehouse (“YF W’) ... was an internet-only retail
business that sold popular-culture shirts, sweaters, and other items.” Jd. at 2.

37.  F. Hajjar “was the sole shareholder of YF W and controlled its operations.” Id.

38.  F. Hajjar “provided fraudulent information to his accountant regarding the amount

of corporate sales deposited into the YFW PayPal account.” As a result, YF W’s accounted

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submitted false and fraudulent tax forms to the IRS that understated the gross receipts and net
income earned by YFW. Jd. at 3.

39. | The Plea Agreement details further fraud committed by F. Hajjar, which he
admitted in the Plea Agreement.

40. _ F. Hajjar signed the Plea Agreement. /d. at 11.

41. According to the Plea Agreement and the Articles of Incorporation for Your
Fantasy Warehouse, F. Hajjar owned 100% of this entity.

42. Yet, according to the SBA, the recipient of the PPP loan for Your Fantasy
Warehouse was a female, N. Hajjar.

43. In 2022, F. Hajjar added N. Hajjar as a director of Your Fantasy Warehouse.

44. — Upon information and belief, F. Hajjar added N. Hajjar to Your Fantasy
Warehouse to somehow avoid answering section 6 on the PPP loan application.

45. Upon information and belief, F. Hajjar used his wife, N. Hajjar, to perpetrate the
PPP fraud described herein relating to Your Fantasy Warehouse.

46. Upon information and belief, N. Hajjar knowingly joined F. Hajjar in the
perpetration of this fraud.

47. Additionally. F. Hajjar obtained a PPP loan in the amount of $41,665 on May 1,
2020 for Ugly Christmas Sweater.

48. Although the SBA lists Ugly Christmas Sweater as a female-owned business (i.e.
owned by N. Hajjar), according to the Articles of Incorporation for this entity F. Hajjar owns
100% of this entity.

49. _ F. Hajjar obtained another PPP loan in the amount of $31,353 on February 4,

2021 for Costume Agent Inc. Although the SBA lists Costume Agent as a female-owned


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business (i.e. owned by N. Hajjar), according to the Articles of Incorporation for this entity, F.
Hajjar owns this entity with his brother, M. Hajjar.

50. The four loans described above total $484,066 of which Relator has been able to
determine $414,000 has been forgiven.

51. The entity-Defendants have also received Economic Injury Disaster Loans
totaling $14,000. Upon information and belief, Defendants obtained these loans in violation of
EIDL rules barring felons from participating.

52. Plaintiff used his own efforts and data-mining skills, techniques, and abilities to
review and analyze data from the SBA, from the Michigan Department of Commerce, and the
federal court system to discover Defendants and their fraud described above.

53. The entity Defendants each certified on their PPP applications that none of their
owners had been convicted of a felon involving fraud or pleaded guilty to a felony involving
fraud.

54. Defendants thus made material misrepresentations on their applications for PPP
funds, knowing lenders and the Federal Government would rely on said representations in paying
PPP funds and EIDL funds to Defendants.

55. Relator reserves the right to amend this Complaint and expand these allegations
upon review of the actual applications and supporting documentation submitted by Defendants.

False Claims Act

31 U.S.C. § 3729(a)(1)(A)-(B)

56. Relator realleges and incorporates by reference the allegations contained in the
foregoing paragraphs as though fully set forth herein.
57. This is acclaim for treble damages and penalties under the False Claims Act, 31

U.S.C. § 3729, et seq., as amended.

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58. By virtue of the acts described above, Defendants knowingly presented or caused
to be presented, false or fraudulent claims to the United States Government, or authorized agent
of the United States Government, for payment or approval.

59. By virtue of the acts described above, Defendants knowingly made or used, or
caused to be made or used, false or fraudulent records or statements material to false or
fraudulent claims for payment by the Government.

60. Relator cannot at this time identify all of the false claims for payment that were
caused by Defendants’ conduct. The false claims were presented to third party lending
institutions. Relator does not have access to the records of all such false or fraudulent statements
or claims.

61. Lenders, acting on behalf of the Federal Government, were guaranteed 100% of
the PPP loans from the Federal Government. Said lenders were unaware of the falsity of the
records, statements, and claims made or caused to be made by Defendants. Said lenders paid the
claims that would not be paid but for Defendants’ illegal conduct.

62. By reason of Defendants’ acts, the United States has been damaged, and continues
to be damaged, in a substantial amount to be determined at trial.

63. Additionally, the United States is entitled to a maximum penalty for each and
every violation arising from Defendants’ unlawful conduct alleged herein.

PRAYER

WHEREFORE, qui tam Plaintiff/Relator prays for judgment against each Defendant as
follows:

1. That this Court enter judgment against each Defendant in an amount equal to three

times the damages the United Sates has sustained because of Defendant’s actions,

10


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plus a civil penalty of not less than $5,500 and not more than $11,000 for each
violation of 31 U.S.C. § 3729;

2. That Relator be awarded the maximum amount allowed pursuant to 31 U.S.C. §
3730(d);

3. That Relator be awarded all costs of this action, including attorney’s fees and
expenses; and

4. That Relator recover such other relief as the Court deems just and proper.

DEMAND FOR JURY TRIAL
Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Relator hereby demands a
trial by jury.

Dated: 6/20/2022. Respectfully submitted,

Aidan Forsyth
Plaintiff/Relator

11


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Exhibit A

Page 12 of 24

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

UNITED STATES OF AMERICA,
Plaintiff, CRIMINAL NO.: 2:19-CR-20631

Vv.

HONORABLE: Denise Page Hood
FIRAS HAJJAR,

Defendant.
/

RULE 11 PLEA AGREEMENT
Pursuant to Rule 11(c)(1)(B) of the Federal Rules of Criminal Procedure,

defendant FIRAS HAJJAR and the government agree as follows:
1. OFFENSE AND MAXIMUM PENALTIES

A. Count of Conviction

Defendant agrees to enter a plea of guilty to Count One of the Information,

which charges Defendant with Evasion of Assessment, in violation of 26 U.S.C. §
7201.

B. Maximum Penalties

Defendant understands that the relevant maximum penalties for Count
One, Evasion of Assessment, is five years imprisonment, a three-year period of
supervised release, a $250,000 fine, and a $100 special assessment.

Defendant further understands that supervised release may be revoked if
its terms and conditions are violated. Thus, a violation of supervised release

increases the possible period of incarceration and makes it possible that the


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Defendant will have to serve the original sentence, plus a substantial additional
period, without credit for time already spent on supervised release.
Defendant understands that he must provide the government with a
receipt for the payment of the $100 special assessment for Count One before
sentence is imposed.
C. Elements of Offense
Defendant understands that the elements of Count One, alleging
Defendant committed the crime of Evasion of Assessment, in violation of 26
U.S.C. § 7201, are:
a. Defendant attempted to evade or defeat a tax or the
payment thereof;
b. An additional tax was due and owing; and
c. The defendant acted willfully.
D. Factual Basis for Guilty Plea

Defendant admits to the following facts and submits them as a sufficient

and accurate basis for Defendant's guilty plea:

wist 6LemFte. V6)

1) Defendant FIRAS HAJJAR was a resident of
Michigan.

2) Your Fantasy Warehouse (“YFW”) was a corporation operating in
Commerce Township, Michigan. YFW was an internet-only retail business that
sold popular-culture shirts, sweaters, and other items. Defendant FIRAS
HAJJAR was the sole shareholder of YFW and controlled its operations. YFW

accepted customer payments through the online payment system, PayPal.


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3) During 2012, Defendant FIRAS HAJJAR provided fraudulent
information to his accountant regarding the amount of corporate sales deposited
into the YFW PayPal account. As a result, on or about June 25, 2013, Defendant
FIRAS HAJJAR caused the YFW accountant to prepare and submit to the IRS a
false and fraudulent YFW 2012 Forms 11208, U.S. Income Tax Return for an S

Corporation, that understated the gross receipts and net income eamed by YFW.

4) As the sole shareholder of YFW, Defendant FIRAS HAJJAR
reported Schedule K-1 Income earned from YFW to the IRS on a Schedule E,
Supplemental Income and Loss (From rental real estate, royalties, partnerships,
S corporations, estates, trusts, REMICs, etc.), attached to his own Forms 1040,

U.S. Individual Income Tax Retum, .

5) On or about June 25, 2013, Defendant FIRAS HAJJAR filed his
own false and fraudulent 2012 Form 1040 with the IRS that underreported his
individual total income and tax due and owing, with an attached Schedule E that
underreported the income he earned from YFW. In that false retum, Defendant
FIRAS HAJJAR stated that his total income for the calendar year 2012 was
$415,733, and that the amount of tax due and owing thereon was $90,138, when
in fact, as he then and there knew, his taxable income and tax due and owing

were well in excess of the amounts he reported.
2. SENTENCING GUIDELINES
A. Standard of Proof

The Court will find sentencing factors by a preponderance of the evidence.


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B. Agreed Guideline Range

There are no sentencing guideline disputes.

The parties agree and stipulate that, regarding Count One, Defendant is
responsible for relevant criminal conduct that resulted in a combined total of
between approximately $251,000 and $1,499,000 of additional tax due and
owing during the relevant time period of January of 2011 to December of 2014,
which results in a base offense level of either 18, pursuant to §§ 2T1.1(a)1),
2T4.1(G) of the Sentencing Guidelines or 20, pursuant to §§ 2T1.1(a){1),
2T4.1(H) of the Sentencing Guidelines. The parties agree they will present
evidence and argument at the sentencing hearing in this matter, regarding
whether the proper calculation of the relevant criminal conduct in this matter

results in an adjusted offense level for Count One of 18 or 20.

The parties agree and stipulate that Defendant's criminal history causes
him to have a criminal history category of |. The parties agree and stipulate that,
as of the date of this agreement, Defendant has demonstrated acceptance of
responsibility for his offense, making Defendant eligible for a two-level downward
adjustment in offense level under § 3E1.1(a) of the Sentencing Guidelines. The
parties further agree and stipulate that, as of the date of this agreement,
Defendant has assisted authorities in the investigation or prosecution of his own
misconduct by timely notifying the government of his intent to plead guilty,
making Defendant eligible for an additional one-level downward adjustment in

offense level under §3E1.1(b) of the Sentencing Guidelines.

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Accordingly, the parties stipulate and agree that, jf Defendant's combined
adjusted offense level is 15, Defendant's guideline rage is 18 to 24 months, and if
Defendant's adjusted offense level is 17, Defendant's guideline range is 24 to 30

months. If the Court finds:

a. that Defendant's criminal history category is higher

than I, or

b. that the offense level should be higher because, after
pleading guilty, Defendant made any false statement
to or withheld information from his probation officer,
otherwise demonstrated a lack of acceptance of
responsibility for his offense; or obstructed justice or

committed any crime,

and if any such finding results in a guideline range higher than 24 to 30 months,
the higher guideline range becomes the agreed range. However, if the Court
finds that Defendant is a career offender, an armed career criminal, or a repeat
and dangerous sex offender as defined under the sentencing guidelines or other
federal law, and that finding is not already reflected in the attached worksheets,

this paragraph does not authorize a corresponding increase in the agreed range.

Neither party may take a position conceming the applicable guidelines that
is different than any position of that party as reflected above, except as
necessary to the Court's determination regarding subsections 2.B(a) and 2.B(b),

above.

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3. SENTENCE

The Court will impose a sentence pursuant to 18 U.S.C. § 3553, and in

doing so must consider the sentencing guideline range.

A. imprisonment
Pursuant to Federal Rule of Criminal Procedure 11(c)(1)(B) the parties

|

agree the sentencing guideline range as determined by Paragraph 2.B. is

appropriate, but this recommendation does not bind the court.
B. Fine
The parties stipulate and agree that, if Defendant's combined adjusted

offense level is 15, Defendant's guidelines result in a fine range of $4,000 to

$40,000, and if Defendant's adjusted offense level is 17, Defendant's guidelines

result in a fine range of $5,000 to $50,000.

C. Supervised Release

There is no agreement with respect to supervised release. The Court may
impose any term of supervised release up to the statutory maximum term, which
in this case is three years. The agreement concerning imprisonment described
above in Paragraph 3.A. does not apply to any term of imprisonment that results

from any later revocation of supervised release.
4. WAIVER OF RIGHT TO APPEAL

If the sentence imposed does not exceed five years, Defendant waives
any right he has to appeal his conviction or sentence. If the sentence imposed is

within the guideline range determined by Paragraph 2.B. the government agrees


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not fo appeal the sentence, but retains its right to appeal any sentence below that
range. Nothing in the foregoing waiver of appellate and collateral review rights
shall preclude the Defendant from raising a claim of ineffective assistance of

counsel in an appropriate forum.

5. COOPERATION WITH THE INTERNAL REVENUE SERVICE

The Defendant agrees that he will cooperate fully with the Internal
Revenue Service (“IRS”) as follows:

A. Defendant agrees that, prior to sentencing, he will execute any IRS
forms deemed necessary to enable the IRS to make an immediate assessment
of the agreed upon or determined tax deficiency or restitution and will not file ony 9 J)
refund claims. In addition Defendant will cooperate with the IRS with respect to
the examination of Defendant's personal tax returns or for those business entities
that he owns or controls. Pursuant to 26 U.S.C. § 6201(a\4), the Internal
Revenue Service, as an identified victim, may assess and collect the amount of
restitution under an order pursuant to 18 U.S.C. § 3556 for failure to pay any tax
imposed under this title in the same manner as if such amount were such tax.

B. Defendant further agrees to provide to the IRS or any state taxing
authority any information requested regarding Defendant's individual income tax
liabilities for the tax years 2011 through 2014. Defendant further agrees to pay to
the IRS and to any state taxing authority the taxes, penalties, and interest due
and owing by him for the tax years 2011 through 2014. Defendant understands
that interest as fixed by statute will continue to accrue until his civil tax llabilities
are fully paid. In the event that Defendant fails to comply with this provision of

Case 2:22-cv-11432-DML-JJCG ECF No.1, PagelD.20 Filed 06/21/22 Page 20 of 24

Case 2:19-cr-20631-DPH-EAS ECF No. 9, PagelD.25 Filed 10/17/19 Page 8 of 11

the agreement, the government may void this agreement in whole or in part.
Nothing in this agreement shall limit the authority of the IRS or a state taxing

authority to collect Defendant's tax liabilities in any manner authorized by law.

Defendant specifically authorizes release by the IRS or other investigative
agency to the aforementioned agencies and their representatives of information
for purposes of making that assessment. Defendant further agrees to assent to
the filing and allowance of a motion under Rule 6(e) of the Federal Rules of
Criminal Procedure, to permit the disclosure of matters occurring before the

grand jury for this purpose, provided the Defendant receives a copy.

By entering into this Agreement, the government does not compromise
any federal or state civil liability, including but not limited to any tax liability, which
Defendant may have incurred or may incur as a result of his conduct and his plea
of guilty to the charges specified in this Agreement. Defendant agrees that this
agreement, or any judgment, order, release, or satisfaction issued in connection
with this agreement, will not satisfy, settle, or compromise the Defendant's
obligation to pay the balance of any remaining civil liabilities, including tax,
additional tax, additions to tax, interest, and penalties, owed to the IRS or to a
state taxing authority for the time period(s) covered by this Agreement or any

other time.

Nothing in this agreement shall limit the Internal Revenue Service in its
assessment and collection of any taxes, penalties or interest due from the

Defendant.

Case 2:22-cv-11432-DML-JJCG ECF No. 1, PagelD.21 Filed 06/21/22 Page 21 of 24
Case 2:19-cr-20631-DPH-EAS ECF No. 9, PagelD.26 Filed 10/17/19 Page 9 of 11

6. LEGAL REPRESENTATION

Defendant is satisfied with the legal representation provided by
Defendant's lawyer. Defendant and his lawyers have fully discussed this plea
agreement, and Defendant is agreeing to plead guilty because Defendant admits

that he is guilty.

7. CONSEQUENCES OF A WITHDRAWN GUILTY PLEA

If Defendant is allowed to withdraw his guilty plea or if any conviction
entered pursuant to this agreement is vacated, the Court shall, on the
govemment's request, reinstate any charges that were dismissed as part of this
agreement. If additional charges are filed against Defendant within six months
after the date the order vacating Defendant's conviction or allowing him to
withdraw his guilty plea becomes final, which charges relate directly or indirectly
to the conduct underlying the guilty plea, Defendant waives his right to challenge
the additional charges on the ground that they were not filed in a timely manner,
including any claim that they were filed after the limitations period expired,
provided that such charges were timely under the applicable limitations period as
of the date this agreement was executed. If the Court allows ‘Defendant to
withdraw his guilty plea for a “fair and just reason” pursuant to Federal Rule of

Criminal Procedure 11(d)(2)(B), Defendant waives his rights under Federal Rule
of Evidence 410, and the government may use his guilty plea, any statement
made under oath at the change-of-plea hearing, and the factual basis statement

in this plea agreement, against him in any proceeding.

Case 2:22-cv-114 34M L-JJCG

ECF No. 1, PagelD,22 Filed 06)
DPH-EAS ECF No.

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8. EACH PARTY’S RIGHT TO WITHDRAW FROM THIS AGREEMENT

The government may withdraw from this agreement if the Court finds the

correct guideline range to be different than is determined by Paragraph 2B.

Defendant may withdraw from this plea agreement, and may withdraw his
guilty plea, if the Court decides to impose a sentence higher than five years of
imprisonment. This is the only reason for which Defendant may withdraw from

this agreement.

9. PARTIES TO THE PLEA AGREEMENT

Unless otherwise indicated, this agreement does not bind any government
agency except the U.S. Attorney's Office for the Eastern District of Michigan and

the Tax Division of the Department of Justice.

10. SCOPE OF THE PLEA AGREEMENT

This agreement, which includes all documents that it explicitly
incorporates, is the complete agreement between the parties. It supersedes all
other promises, representations, understandings, and agreements between the
parties conceming the subject matter of this plea agreement that are made at
any time before the guilty plea is entered in court. Thus, no oral or written
promises made by the government to Defendant or to Defendant's attorney at
any time before Defendant pleads guilty are binding except to the extent they

have been explicitly incorporated into this agreement.

10

“Base Fi18-cr 20631 DPHEAS ECE No.9; Pagelb.28 Filed 10/17118° page if ait”

»

This agreement does not prevent any civil or administrative actions
against Defendant, or any forfeiture claim against any property, by the United
States or any other party.

11. ACCEPTANCE BY THE DEFENDANT

This plea offer expires unless it has been received, signed by Defendant
and his attorney, at the Northern Criminal Enforcement Section of the
| Department of Justice Tax Division by 9:00 A.M. on Friday, September 6, 2019.
The government reserves the right to modify or revoke this offer at any time

before Defendant appears and pleads guilty.

ROSEMARY E. PAGUNI

Chief

Northern Criminal Enforcement Section
U.S. Department of Justice, Tax Division

Date: October _'7" 2019

MARK MCDONALD
Trial Attorney

By signing below, Defendant acknowledges that he has read (or been read) this
entire document, understands it, and agrees to its terms. He also acknowledges
that he is satisfied with his attorney's advice and representation. Defendant
agrees that he has had a full and complete opportunity to confer with his lawyer,
and has had all of his questions answered by his lawyer.

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TES £2zZ=
ERIC M. NEMETH, ESQ.

FIRAS HAJJAR
Attomey for Defendant Defendant
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STEVEN @ FISHMAN,
Attorney for Defendant

Date: October /7™ , 2019

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