Criminal Complaint — United States v. LaRoche

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United States District Court, Middle District of Florida, Fort Myers Division · No. 2:22-mj-01127-NPM · Doc. 3 · 2022-10-31 · Docket on CourtListener

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Case 2:22-mj-01127-NPM Document3_ Filed 10/31/22 Page 1of11PagelD 6

AQ 91 (Rev. 111) Criminal Complaint

UNITED STATES DISTRICT COURT

for the
Middle District of Florida

United States of America )
v. )
AL CLINT LAROCHE ) Case No.
2:22-mj- 1127-NPM
)
Defendant(s)
CRIMINAL COMPLAINT
I, the complainant in this case, state that the following is true to the best of my knowledge and belief.
On or about the date(s)of = === April2020, inthe county of = ——_—Collier ~—— sin the
Middle District of Florida . the defendant(s) violated:
Code Section Offense Description
18 U.S.C. § 1014 False Statement to Lending Institution

This criminal complaint is based on these facts:

SEE ATTACHED AFFIDAVIT.

@ Continued on the attached sheet.

¢ ‘omplainant's signature ;
Grace M. Bruno, Special Agent, FBI

Printed name and tithe

Sworn to me via reliable electronic means (telephone):

4; (,,

Judge's signature

__ Fort Myers, Florida Nicholas P. Mizell, United States Magistrate Judge —

City and state: “€ uted otal
Printed name and title

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AFFIDAVIT IN SUPPORT OF WARRANT

I, Grace M. Bruno, being duly sworn, states as follows:

1. I am a Special Agent with the Federal Bureau of Investigation (FBI),
Tampa Field Office- Fort Myers Resident Agency, and have been employed in this
capacity since June 2021. As a Special Agent assigned to the criminal squad, I am
responsible for the investigation of violations of United States federal law,
specifically complex financial crimes, to include violations of 18 U.S.C. §§ 1014
(False Statement to Lending Institution) and 1344 (Bank Fraud), as well as other
crimes related to Pandemic Relief Fraud.

2. This affidavit supports an application for a criminal complaint and
arrest warrant for Al Clint LaRoche (“LAROCHE”) for the fraudulent submission of
a Paycheck Protection Program (“PPP”) application to a federally insured financial
institution. Specifically, LAROCHE fraudulently obtained a $449,500 PPP loan by
making false and fraudulent statements in a PPP loan application in violation of 18
U.S.C. § 1014.

3. This affidavit is based on my personal investigation and investigation by
others, including federal law enforcement officials whom I know to be reliable and
trustworthy. The facts contained herein have been obtained by interviewing
witnesses and examining documents obtained in the course of this investigation. This
affidavit does not include every fact known to me concerning this investigation, but

rather only those facts sufficient to establish probable cause.
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OVERVIEW OF THE PAYCHECK PROTECTION PROGRAM

4, The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act
is a federal law enacted in or around March 2020 designed to provide emergency
financial assistance to the millions of Americans who are 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 PPP. In or around April 2020, Congress authorized over $300 billion in
additional funding.

5. In order to obtain a PPP loan, a qualifying business must submit a PPP
loan application, which is signed by an authorized representative of the business. The
PPP loan application requires the business (through its authorized representative) to
acknowledge the program rules and make certain affirmative certifications in order to
obtain a PPP loan. In the PPP loan application, the small business (through its
authorized representative) must state, among other things, its: (a) average monthly
payroll expenses; and (b) number of employees. These figures are used to calculate
the amount of money the small business is eligible to receive under the PPP. In
addition, businesses applying for a PPP loan must provide documentation to the
lending institution showing their payroll expenses. Typically, businesses would

supply documents showing the amount of payroll taxes reported to the Internal
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Revenue Service (“IRS”) by submitting copies of their Quarterly Federal Tax
Returns (“Form 941”).

6. A PPP loan application must be processed by a participating lender. Ifa
PPP loan application is approved, the participating lender funds the PPP loan using
its own monies, which are 100% guaranteed by the Small Business Administration
(“SBA”). Data from the application, including information from the borrower, the
total amount of the loan, and the listed number of employees, is transmitted by the
lender to the SBA in the course of processing the loan.

7. PPP loan proceeds MUST be used by the business on certain
permissible expenses — payroll costs, interest on mortgages, rent, and utilities. The
PPP allows interest and principal on the PPP loan to be entirely forgiven if the
business spends the loan proceeds on these expense items within a designated period
of time after receiving the proceeds and uses a certain amount of the PPP loan
proceeds on payroll expenses.

THE PPP LENDER AND SERVICE PROVIDER

8. The Lender is a financial institution federally insured by the Federal
Deposit Insurance Corporation (“FDIC”). The Lender is based in Luray, Virginia
and participated in the SBA’s PPP as a lender and, as such, was authorized to lend
funds to eligible borrowers under the terms of PPP.

9. The Service Provider was a financial services and technology company
based in Naples, Florida. The Service Provider participated in the SBA’s PPP by,

among other things, acting as a service provider between small businesses and the

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Lender. Small businesses seeking PPP loans could apply through the Service
Provider for PPP loans. The Service Provider would receive and review the loan
application. If a loan application received by the Service Provider was approved for
funding, the Lender disbursed the loan funds to the applicant.
BACKGROUND OF LAROCHE AND BORNWILD

10. The United States is investigating a fraudulent PPP application that was
submitted by LAROCHE for the business Bornwild, LLC (“Bornwild”). According
to Florida Division of Corporation records, Bornwild was originally formed as a
Florida Limited Liability (“LLC”) on February 10, 2014, with LAROCHE listed as
the only authorized member. In 2015, Bornwild became an inactive LLC and was
later was reinstated as an LLC on August 5, 2020. Further, Bornwild’s principal
place of business was listed as a residence located at 284 Gazetta Way, West Palm
Beach, FL, 33413 (the ““Gazetta Residence”), which is also where LAROCHE
resided at or around the time he fraudulently applied for a PPP loan. In loan
applications and correspondence reviewed by your Affiant, LAROCHE represented
that Bornwild was involved in the entertainment services industry, as well as the
restaurant industry.

LAROCHE’S FRAUDULENT PPP APPLICATION

11. Onor about April 18, 2020, LAROCHE, through the Service Provider,
signed and submitted a PPP loan application to the Lender on behalf of Bornwild

seeking approximately $449,500 in PPP loan funds. The loan amount was calculated
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based on Bornwild’s average monthly payroll, listed on the application as
$179,815.00, and number of employees, listed on the application as 61 employees.
Additionally, on the PPP Application, LAROCHE identified himself as the owner of
Bornwild, holding a 100% ownership interest. The application further indicated the
purpose of the loan was for payroll, rent/mortgage interest, and utilities.

12. Along with the PPP loan application, LAROCHE submitted
supporting payroll documents in the form of Bornwild’s Quarterly Federal Tax
Returns (Form 941) for each quarter of 2019. The following relevant information was

contained on the Form 941s:

Wages, tips, and
Year/ EIN Business Address | # of other compensation
Quarter Employees
2019/ QI 46- 4922693 284 Gezetta West 50 $ 530, 065.55
Palm Beach, FL
2019/ Q2 46- 4922693 284 Gezetta West 52 $ 515, 411.80
Palm Beach, FL
2019/7 Q3 46- 4922693 284 Gezetta West 54 $ 499.682.39
Palm Beach, FL
2019/ Q4 46- 4922693 284 Gezetta West 63 $564,182.36
Palm Beach, FL

13. Additionally, each Form 941 contained the name and signature of an
individual who prepared the Form 941, which revealed the Form 941s were prepared
by a payroll company based in Oklahoma City, OK (hereinafter, the “Payroll
Company”). As part of the investigation, your A ffiant subpoenaed copies of the
Form 941s from the Payroll Company. In their response, the Payroll Company
indicated they did not provide payroll services to, nor did they prepare 941s for,

Bornwild or LAROCHE.
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14. The Payroll Company also reviewed the Form 941s that LAROCHE
submitted with his PPP application and indicated the Form 941s belonged to another
business (the “Actual Business”) the Payroll Company provided payroll services to.
The Payroll Company provided your Affiant copies of the Form 941s for 2019 that
were filed and submitted by the Payroll Company for the Actual Business. The
Actual Business is a restaurant based in New York, New York. Your Affiant has
reviewed and compared the Form 941s submitted by LAROCHE to the Actual
Business. After comparing both, it appears that LAROCHE altered the Actual
Business’ Form 941s to include Bornwild’s business name, address, and EIN!
number, but kept the Actual Business’ quarterly tax numbers (number of employees,
payroll, and federal income tax withheld). Therefore, there is probable cause to
believe that LAROCHE submitted fraudulent Form 941s to the Lender as proof of
payroll in order qualify for the PPP loan.

15. Further, as part of the investigation, your Affiant reviewed records from
the Florida Department of Revenue, which maintains records of wages paid to
employees by employers in the state. The Florida Department of Revenue had no
records of wages paid to any employees of Bornwild during 2019 and 2020.

16. As part of the PPP Application, LAROCHE was required to make
certain representations, authorizations, and certifications. Specifically, regarding the

use of PPP funds, LAROCHE represented that “all SBA Loan proceeds will be used

1 An EIN or Employer ID Number is also known as a Federal Tax Identification Number
and is used to identify a business entity.

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only for business related purposes as specified in the loan application.” LAROCHE
also certified, among other things, that the PPP funds acquired from the requested
loan would “be used to retain workers and maintain payroll or make mortgage
payments, lease payments, and utility payments.” He further certified that he
understood that the federal government could pursue criminal fraud charges if the
“funds are used for unauthorized purposes.” These statements were knowingly false
when made because, as further detailed below, LAROCHE knowingly misused the
PPP loan proceeds for unauthorized purposes.

17. The Lender subsequently approved LAROCHE’s PPP application and,
on August 11, 2020, deposited $449,400 in PPP loan funds into a checking account
ending in 6207 in the name of Bornwild LLC (hereinafter, “BW 6207”) that was
opened by LAROCHE on or about August 5, 2020. LAROCHE was the account’s
sole signatory.

LAROCHE’S MISUSE OF PPP LOAN FUNDS

18. As stated above, LAROCHE opened BW 6207 on or about August 5,
2020. Prior to the deposit of PPP funds into the account on August 11, 2020, the
account’s balance was $200.00. The PPP loan deposit was the account’s second
transaction. After the $449,400 in PPP loan funds was deposited, LAROCHE
misused the funds, which is summarized as follows:

a. Onor about August 13, 2020, LAROCHE purchased a used
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2018 Mercedes SUV in the amount of $51,823.40 from an auto dealer in West Palm
Beach. This vehicle was purchased two days after the receipt of PPP funds.
LAROCHE made a $20,000 cash down payment and financed $20,490.19 for the
vehicle. Your Affiant has probable cause to believe the vehicle was purchased for
personal use and not for any business purpose related to Bornwild. Additionally, the
vehicle was registered in LAROCHE’s name.

b. Between August 2020 and January 2021, LAROCHE made
approximately 16 cash withdrawals totaling $133,200. The individual cash
withdrawals ranged in amounts from $1,200 to $25,000. Additionally, between the
same period, LAROCHE made approximately 56 ATM cash withdrawals, totaling
$58,371.25.

c. LAROCHE issued a total of 44 checks from the account to 11 different
individuals, totaling $115,000. The checks were dated between October 13-17, 2020.
Multiple checks issued to the same individuals, contained the same date, and amount
of $2,500. On the back of most of the checks, in the endorsement section, the payee
and LAROCHE ’s signature are present. Additionally, each check was cashed and
not deposited into the recipient’s bank account. On November 16, 2020, after
LAROCHE depleted the account of all its PPP funds, LAROCHE began depositing
cash into the account, totaling $19,700 between November 16, 2020, and December
30, 2020. Your Affiant believes that LAROCHE cashed the checks he issued with

the individuals he issued them to and retained a portion of the cash. Your Affiant
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also has reason to believe LAROCHE issued these checks to give the appearance
that he was using a portion of the funds for payroll. Moreover, there is no record of
LAROCHE reporting any wages paid by Bornwild to the Florida Department of
Revenue during the year 2020. It should also be noted that LAROCHE represented
Bornwild had 61 employees (not 11) on its PPP application.

d. LAROCHE also used the funds for travel and hotel stays, totaling
$3,565.66. This included stays at resort hotels in Palm Beach, West Palm Beach,
Fort Lauderdale, and Miami Beach, Florida. Moreover, LAROCHE spent
approximately $21,300 on 26 retail purchases, to include $9,024 in jewelry from
David Yurman, and other retail purchases at Adidas, Foot Locker, Guitar Center,

and Saks off 5th Avenue, to name a few.
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CONCLUSION
19. Based on the foregoing facts, there is probable cause to believe that Al
Clint LAROCHE knowingly made false statements for the purpose of influencing
the action of a financial institution whose deposits are insured by the FDIC in

connection with a loan application, in violation of 18 U.S.C § 1014.

4] MA_2

Grace M. Bruno
Special Agent
Federal Bureau of Investigation

Sworn to and subscribed before me
telephonically this _31st_ day of October 2022.

ahhjee & vlael]

NICHOLAS P. MIZELL
United States Magistrate Judge
Middle District of Florida

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