Court filing

Criminal Complaint — U.S. v. Blotnick

Filed May 6, 2021 in U.S. v. Blotnick; one of 14 filings from this case.

Record facts

Court	U.S. District Court, District of New Jersey
Filed	2021-05-06

U.S. District Court, District of New Jersey · No. 2:21-cr-00796-BRM · Doc. 1 · 2021-05-06 · Docket on CourtListener

Full text

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UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
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UNITED STATES OF AMERICA
: Hon. Edward S. Kiel

: Mag. No. 21-15165

GREGORY J. BLOTNICK

: CRIMINAL COMPLAINT

I, Special Agent Jeffrey L. Fata, being duly sworn, state that the following is
true and correct to the best of my knowledge and belief:

SEE ATTACHMENT A

I further state that I am a Special Agent with the Federal Housing Finance
Agency, Office of Inspector General, and that this Complaint is based on the following
facts:

SEE ATTACHMENT B

continued on the attached pages and made a part hereof.

_______________________________________________
Special Agent Jeffrey L. Fata
Federal Housing Finance Agency,
Office of Inspector General

Special Agent Jeffrey L. Fata attested to this Complaint by telephone pursuant to
Federal Rule of Criminal Procedure 4.1(b)(2)(A).

May 6, 2021 at
Newark, New Jersey

HONORABLE EDWARD S. KIEL

______________________________
UNITED STATES MAGISTRATE JUDGE

Signature of Judicial Officer

/s/ Jeffrey Fata
/s/ Edward S. Kiel
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ATTACHMENT A

Counts One through Eight
(Wire Fraud)

From at least in or about April 2020 through at least in or about July 2020, in
the District of New Jersey and elsewhere, defendant

GREGORY J. BLOTNICK

knowingly and intentionally devised and intended to devise a scheme and artifice to
defraud, and to obtain money and property by means of materially false and
fraudulent pretenses, representations, and promises, and, for the purpose of
executing and attempting to execute such scheme and artifice, did transmit and cause
to be transmitted by means of wire communications in interstate and foreign
commerce, the following writings, signs, signals, pictures, and sounds:

Count
Approximate
Date
Description of Wire
1
April 25, 2020

BLOTNICK submitted a fraudulent loan application for
Paycheck Protection Program (“PPP”) funds to Lender 1
causing Lender 1 to deposit approximately $302,065 in
PPP funds for BSC Opportunistic Equity, LP into
BLOTNICK’s bank account at Bank 1 via interstate
wire transmission through the District of New Jersey.

2
April 30, 2020

BLOTNICK submitted a fraudulent loan application for
PPP funds to Lender 2 causing Lender 2 to deposit
approximately $491,100 in PPP funds for Brattle Street
GP, LLC into BLOTNICK’s bank account at Bank 1 via
interstate wire transmission through the District of
New Jersey.

3
April 30, 2020

BLOTNICK submitted a fraudulent loan application for
PPP funds to Lender 3 causing Lender 3 to deposit
approximately $387,100 in PPP funds for Brattle Street
Capital, LLC into BLOTNICK’s bank account at Bank 1
via interstate wire transmission through the District of
New Jersey.

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4
May 18, 2020

BLOTNICK submitted a fraudulent loan application for
PPP funds to Lender 4 causing Lender 4 to deposit
approximately $455,800
in PPP funds for BSC
Management, LLC into BLOTNICK’s bank account at
Bank 2 via interstate wire transmission through the
District of New Jersey.

5
May 19, 2020

BLOTNICK submitted a fraudulent loan application for
PPP funds to Lender 1 causing Lender 1 to deposit
approximately $388,320 in PPP funds for Brattle Street
GP, LLC into BLOTNICK’s bank account at Bank 1 via
interstate wire transmission through the District of
New Jersey.

6
June 4, 2020

BLOTNICK submitted a fraudulent loan application for
PPP funds to Lender 5 causing Lender 5 to deposit
approximately $817,487 in PPP funds for Brattle Street
Capital, LLC into BLOTNICK’s bank account at Bank 2
via interstate wire transmission through the District of
New Jersey.

June 18, 2020

BLOTNICK submitted a fraudulent loan application for
PPP funds to Lender 6 causing Lender 6 to deposit
approximately $666,100 in PPP funds for BSC Patriot,
LP into BLOTNICK’s bank account at BANK 2 via
interstate wire transmission through the District of
New Jersey.

July 14, 2020

BLOTNICK submitted a fraudulent loan application for
PPP funds to Lender 7 causing Lender 7 to deposit
approximately $338,132 in PPP funds for Brattle Street
GP, LLC into BLOTNICK’s bank account at Bank 2 via
interstate wire transmission through the District of
New Jersey.

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

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Counts Nine through Fourteen
(Money Laundering)

On or about the dates set forth below, in the District of New Jersey and
elsewhere, defendant

GREGORY J. BLOTNICK
did knowingly engage and attempt to engage in a monetary transaction by, through,
and to a financial institution, affecting interstate and foreign commerce, in criminally
derived property of a greater value than $10,000, that is, the transfer of U.S. currency
from bank accounts to the Blotnick Brokerage Account (defined in Attachment B),
such property having been derived from a specified unlawful activity, that is, wire
fraud, in violation of Title 18, United States Code, Section 1343.

Count
Approximate
Date
Description of Monetary Transaction
9
May 13, 2020
Transfer from Bank 1 in the amount of approximately
$100,000 to the Blotnick Brokerage Account.
10
May 13, 2020
Transfer from Bank 1 in the amount of approximately
$175,000 to the Blotnick Brokerage Account.
11
May 20, 2020
Transfer from Bank 1 in the amount of approximately
$98,500 to the Blotnick Brokerage Account.
12
May 20, 2020
Transfer from Bank 1 in the amount of approximately
$175,000 to the Blotnick Brokerage Account.
13
May 21, 2020
Transfer from Bank 1 in the amount of approximately
$25,000 to the Blotnick Brokerage Account.
14
May 21, 2020
Transfer from Bank 1 in the amount of approximately
$15,000 to the Blotnick Brokerage Account.

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

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ATTACHMENT B

I, Jeffrey L. Fata, a Special Agent with the Federal Housing Finance Agency,
Office of Inspector General, having conducted an investigation and having discussed
this matter with other law enforcement officers who have participated in this
investigation, have knowledge of the following facts. Because this Complaint is being
submitted for the limited purpose of establishing probable cause, I have not included
each and every fact known to me concerning this investigation. Rather, I have set
forth only the facts that I believe are necessary to establish probable cause. Unless
specifically indicated, all dates described in this affidavit are approximate and all
statements or representations described in this affidavit are related in substance and
in part.

Overview

1.
Defendant Gregory J. Blotnick (“BLOTNICK”) used a variety of false
representations to fraudulently obtain at least approximately $3.8 million in federal
COVID-19 emergency relief loans. To obtain the loans, BLOTNICK submitted at
least eight falsified loan applications to seven different lenders on behalf of five of
BLOTNICK’s businesses. On these loan applications, BLOTNICK falsified various
information, including the number of his employees, the federal tax returns for his
businesses, and his payroll documentation. BLOTNICK then misused the loan
proceeds, including by sending them to brokerage accounts from which he placed
more than approximately $3 million in losing stock trades.

Background

The Paycheck Protection Program

2.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a
federal law enacted in or about March 2020 designed to provide emergency financial
assistance to millions of Americans suffering 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 about April 2020, Congress authorized over $300 billion in
additional PPP funding.

3.
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
loan application requires the business—through its authorized representative—to
acknowledge the program rules and make certain affirmative certifications to be
eligible to obtain the PPP loan. In the loan application, the small business 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 business is
Case 2:21-cr-00796-BRM Document 1 Filed 05/06/21 Page 5 of 16 PageID: 5

eligible to receive under the PPP. In addition, businesses applying for a PPP loan
must provide documentation showing their payroll expenses.

4.
A PPP loan application must be processed by a participating lender. If
a loan application is approved, the participating lender funds the loan using its own
money, which is 100% guaranteed by 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, is transmitted by the lender
to the SBA in the course of processing the loan.

5.
PPP loan proceeds must be used by the business on certain permissible
expenses—payroll costs, interest on mortgages, rent, and utilities. The PPP allows
the interest and principal 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 Federal Wire Transfer Network and the Automated Clearing House

6.
The Federal Reserve Bank operates the Federal Wire Transfer Network
(“Fedwire”), which is an electronic funds-transfer system used primarily for the
transmission and settlement of certain payment orders.

7.
At all times relevant to this Complaint, money transmitted by Fedwire
was routed via electronic wire from its origin to its destination through the District
of New Jersey.

8.
The Federal Reserve Bank is also an operator of the Automated Clearing
House (“Federal Reserve ACH”), which is a funds-transfer system that provides for
the interbank clearing of electronic entries for participating financial institutions.

9.
At all times relevant to this Complaint, money transmitted by Federal
Reserve ACH was routed via electronic wire from its origin to its destination through
the District of New Jersey.

10.
As set forth below, the loan proceeds that BLOTNICK procured through
fraudulent loan applications submitted to Lender 1 through Lender 6 were sent to a
bank account held by BLOTNICK via interstate wire through the District of New
Jersey using either Fedwire or Federal Reserve ACH. The loan proceeds that
BLOTNICK procured through a fraudulent loan application submitted to Lender 7
were sent to a bank account held by BLOTNICK via interstate wire through the
District of New Jersey, originating from a computer server in New Jersey.

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The Defendant and Relevant Entities

11.
At all times relevant to this Complaint:

a. BLOTNICK was a resident of New York or Florida and owned and
controlled the following businesses through which he fraudulently
applied for PPP loans:

i.
Brattle Street Capital, LLC (“Brattle Capital”), which was a
New York limited liability company.

ii.
Brattle Street GP, LLC (“Brattle GP”), which was a Delaware
limited liability company.

iii.
BSC Patriot, LP (“BSC Patriot”), which purported to be a
limited partnership.

iv.
BSC Opportunistic Equity, LP (“BSC Opportunistic”), which
was a Delaware limited partnership with Brattle GP.

v.
BSC Management,
LLC (“BSC Management”), which
purported to be a limited liability company.

b. BLOTNICK owned and controlled brokerage accounts at a stock
brokerage collectively referred to as the “Blotnick Brokerage
Account.”

c. Lender 1 was a financial institution headquartered in Utah.

d. Lender 2 was a financial institution headquartered in New Jersey.

e. Lender 3 was a financial institution headquartered in Texas.

f. Lender 4 was a financial institution headquartered in Maine.

g. Lender 5 was a financial institution headquartered in New York.

h. Lender 6 was a financial institution headquartered in Pennsylvania.

i. Lender 7 was a financial institution with a computer server in New
Jersey.

j. Bank 1 was a financial institution headquartered in New York.

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k. Bank 2 was a financial Institution headquartered in California.

l. Bank 3 was a financial institution headquartered in California.

The Scheme to Defraud

12.
From at least in or about April 2020 through at least in or about July
2020, BLOTNICK submitted, or caused to be submitted, falsified loan applications to
approved lenders, including Lender 1 through Lender 7, to fraudulently obtain funds
through the PPP.

13.
In connection with his fraud, BLOTNICK submitted at least the
following falsified PPP loan applications:

Name of Business
Applicant
Approximate
Amount
Approved
Lender
Approximate
Submission
Date
Status
BSC Opportunistic
$302,065
Lender 1
April 25, 2020
Funded
Brattle GP
$491,100
Lender 2
April 30, 2020
Funded
Brattle Capital
$387,100
Lender 3
April 30, 2020
Funded
BSC Management
$455,800
Lender 4
May 18, 2020
Funded
Brattle GP
$388,320
Lender 1
May 19, 2020
Funded
Brattle Capital
$817,487
Lender 5
June 4, 2020
Funded
BSC Patriot
$666,100
Lender 6
June 18, 2020
Funded
Brattle GP
$338,132
Lender 7
July 14, 2020
Funded

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Falsified BSC Opportunistic Application to Lender 1

14.
On or about April 25, 2020, BLOTNICK submitted a PPP application to
Lender 1 for BSC Opportunistic seeking approximately $302,065. The application
was submitted in BLOTNICK’s name and listed BLOTNICK as the owner of BSC
Opportunistic.

15.
The application submitted to Lender 1 stated that BSC Opportunistic’s
monthly payroll was approximately $127,500 and that the company had 17
employees.

16.
The BSC Opportunistic application to Lender 1 contained materially
false and fraudulent information:

a. The purported payroll documentation for April 2019 through March
2020 claimed 17 employees, including BLOTNICK, and average
monthly payroll amounts of approximately $127,500. However, New
York State Department of Labor (“NYS DOL”) records indicate that
BSC Opportunistic reported no wages paid during that period.
Further, Social Security Administration (“SSA”) records show that
there were no wages or Forms W-2 processed for BSC Opportunistic
between 2018 and 2020.

b. The application certified that all SBA loan proceeds would be used
only for business-related purposes as specified in the loan
application.

17.
Bank records show that on or about April 30, 2020, BSC Opportunistic
received the full amount of the approximately $302,065 PPP loan into Brattle
Capital’s checking account at Bank 1.

18.
The loan from Lender 1 was sent to Bank 1 via interstate wire through
the District of New Jersey using Fedwire.

19.
On or about April 30, 2020, BLOTNICK then transferred approximately
$100,000 in loan proceeds to the Blotnick Brokerage Account.

Falsified Brattle GP Application to Lender 2

20.
On or about April 30, 2020, BLOTNICK submitted a PPP loan
application to Lender 2 for Brattle GP seeking approximately $491,100. The
application was submitted in BLOTNICK’s name and listed BLOTNICK as the owner
of Brattle GP.

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21.
The application stated that Brattle GP’s average monthly payroll was
approximately $196,440 and that the company had 25 employees.

22.
The Brattle GP application to Lender 2 contained materially false and
fraudulent information:

a. A purported Form 941 for the third quarter of 2019 submitted in
support of the application claimed that Brattle GP paid 25 employees
approximately $458,053 during that period. However, NYS DOL
records indicate that Brattle GP reported no wages during that
period. Further, SSA records show that there were no wages or
Forms W-2 processed for Brattle GP between 2018 and 2020.

b. The application certified that all SBA loan proceeds would be used
only for business-related purposes as specified in the loan
application.

23.
Bank records show that on or about May 1, 2020, Brattle GP received
the full amount of the approximately $491,100 PPP loan into Brattle Capital’s
checking account at Bank 1.

24.
The loan from Lender 2 was sent to Bank 1 via interstate wire through
the District of New Jersey using Federal Reserve ACH.

25.
BLOTNICK then transferred the loan proceeds as follows:

a. On or about May 1, 2020, BLOTNICK transferred approximately
$100,000 to the Blotnick Brokerage Account.

b. On or about May 4, 2020, BLOTNICK transferred approximately
$50,000 to the Blotnick Brokerage Account.

c. On or about May 5, 2020, BLOTNICK transferred approximately
$100,000 to the Blotnick Brokerage Account.

d. On or about May 6, 2020, BLOTNICK transferred approximately
$100,000 to the Blotnick Brokerage Account.

e. On or about May 7, 2020, BLOTNICK made four transfers totaling
approximately $152,000 to the Blotnick Brokerage Account.

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Falsified Brattle Capital Application to Lender 3

26.
On or about April 30, 2020, BLOTNICK submitted a PPP loan
application to Lender 3 for Brattle Capital seeking approximately $387,100. The
application was submitted in BLOTNICK’s name and listed BLOTNICK as the owner
of Brattle Capital.

27.
The application stated that Brattle Capital’s average monthly payroll
was approximately $154,840 and that the company had 25 employees.

28.
The Brattle Capital application to Lender 3 contained materially false
and fraudulent information:

a. The application claimed 25 employees for Brattle Capital with an
average monthly income of approximately $154,840. However, NYS
DOL records indicate that Brattle Capital reported no wages during
that period. Further, SSA records show that there were no wages or
Forms W-2 processed for Brattle Capital between 2018 and 2020.

b. The application certified that all SBA loan proceeds would be used
only for business-related purposes as specified in the loan
application.

29.
Bank records show that on or about May 13, 2020, Brattle Capital
received the full amount of the approximately $387,100 PPP loan into Brattle
Capital’s checking account at Bank 1.

30.
The loan from Lender 3 was sent to Bank 1 via interstate wire through
the District of New Jersey using Federal Reserve ACH.

31.
BLOTNICK then transferred the loan proceeds as follows:

a. On or about May 13, 2020, BLOTNICK transferred a total of
approximately $275,000 to the Blotnick Brokerage Account through
a series of two transactions.

b. On or about May 13, 2020, BLOTNICK transferred approximately
$2,000 to a personal account BLOTNICK held at Bank 3.

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Falsified BSC Management Application to Lender 4

32.
On or about May 18, 2020, BLOTNICK submitted a PPP application to
Lender 4 for BSC Management seeking approximately $455,800. The application was
submitted in BLOTNICK’s name and listed BLOTNICK as the owner of BSC
Management.

33.
The application stated that BSC Management’s average monthly payroll
was approximately $182,339 and that the company had 26 employees.

34.
The BSC Management application to Lender 4 contained materially
false and fraudulent information:

a. Purported Forms 941 (an employer’s quarterly federal tax return) for
the second, third and fourth quarters of 2019 and first quarter of
2020 submitted in support of the application claimed BSC
Management had paid 26 employees for each quarter. And
purported payroll documentation claimed that BSC Management
paid employees on average, approximately $182,339 per month for
the period April 2019 through March 2020. However, NYS DOL
records indicate that BSC Management reported no wages paid by
during that period. Further, SSA records show there were no wages
or Forms W-2 processed for BSC Management between 2018 and
2020.

b. The application certified that all SBA loan proceeds would be used
only for business-related purposes as specified in the loan
application.

35.
Bank records show that on or about May 28, 2020, Brattle Capital
received the full amount of the approximately $455,000 loan into Brattle Capital’s
checking account at Bank 2.

36.
The loan from Lender 4 was sent to Bank 2 via interstate wire through
the District of New Jersey using Fedwire.

37.
On or about May 28, 2020, BLOTNICK then transferred the loan
proceeds as follows:

a. On or about May 28, 2020, BLOTNICK transferred approximately
$440,000 to the Blotnick Brokerage Account.

b. On or about May 28, 2020, BLOTNICK transferred approximately
$15,000 to a personal account BLOTNICK held at Bank 3.
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Falsified Brattle GP Application to Lender 1

38.
On or about May 19, 2020, BLOTNICK submitted a PPP application to
Lender 1 for Brattle GP seeking approximately $388,320. The application was
submitted in BLOTNICK’s name and listed BLOTNICK as the owner of Brattle GP.

39.
The application stated that Brattle GP’s average monthly payroll was
approximately $155,328 and that the company had 25 employees.

40.
The Brattle GP application to Lender 1 contained materially false and
fraudulent information:

a. Purported Forms 941 for the second, third and fourth quarters of
2019 and first quarter of 2020 submitted in support of the application
claimed that Brattle GP had paid 25 employees for 2019 and for the
first quarter of 2020. And purported payroll documentation claimed
that Brattle GP had 25 employees, including BLOTNICK, with an
average monthly payroll amount of approximately $154,878 for the
period April 2019 through March 2020. However, NYS DOL records
indicate that Brattle GP reported no wages paid during that period.
Further, SSA records show that there were no wages or Forms W-2
processed for Brattle GP between 2018 and 2020.

b. The application certified that all SBA loan proceeds would be used
only for business-related purposes as specified in the loan
application.

41.
Bank records show that on or about May 20, 2020, Brattle Capital
received the full amount of the approximately $388,320 loan into Brattle Capital’s
checking account at Bank 1.

42.
The loan from Lender 1 was sent to Bank 1 via interstate via through
the District of New Jersey using Fedwire.

43.
On or about May 20, 2020 and May 21, 2020, through a series of four
transactions, BLOTNICK transferred a total of approximately $313,500 to the
Blotnick Brokerage Account.

Falsified Brattle Capital Application to Lender 5

44.
On or about June 4, 2020, BLOTNICK submitted a PPP application to
Lender 5 for Brattle Capital seeking approximately $817,487. The application was
submitted in BLOTNICK’s name and listed BLOTNICK as the owner of Brattle
Capital.
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45.
The application stated that Brattle Capital’s average monthly payroll
was approximately $326,995 and that the company had 45 employees.

46.
The Brattle Capital application to Lender 5 contained materially false
and fraudulent information:

a. Purported Forms 941 for the second, third and fourth quarters of
2019 and first quarter of 2020 submitted in support of the application
claimed that Brattle Capital paid 45 employees more than
approximately $3.4 million during that period. And purported
payroll documentation claimed that Brattle Capital paid employees
an average, approximately $326,995 per month for the period April
2019 through March 2020. However, NYS DOL records indicate
that Brattle Capital reported no wages paid during that period.
Further, SSA records show that there were no wages or Forms W-2
processed for Brattle Capital between 2018 and 2020

b. The application certified that all SBA loan proceeds would be used
only for business-related purposes as specified in the loan
application.

47.
Bank records show that on or about June 15, 2020, Brattle Capital
received the full amount of the approximately $817,487 loan into Brattle Capital’s
checking account at Bank 2.

48.
The loan from Lender 5 was sent to Bank 2 via interstate wire through
the District of New Jersey using Federal Reserve ACH.

49.
BLOTNICK then transferred the loan proceeds as follows:

a. On or about June 15, 2020, BLOTNICK transferred approximately
$690,500 to a personal account BLOTNICK held at Bank 2.

b. On or about June 15, 2020, BLOTNICK transferred approximately
$125,000 to the Brattle GP checking account at Bank 2. Later on or
about that same day, BLOTNICK transferred approximately
$816,000 from Bank 2 to the Blotnick Brokerage Account.

Falsified BSC Patriot Application to Lender 6

50.
On or about June 18, 2020, BLOTNICK submitted a PPP application to
Lender 6 for BSC Patriot seeking approximately $666,100. The application was
submitted under BLOTNICK’s name and listed BLOTNICK as the owner of BSC
Patriot.
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51.
The application stated that BSC Patriot’s average monthly payroll was
approximately $263,966 and that the company had 36 employees.

52.
The BSC Patriot application to Lender 6 contained materially false and
fraudulent information:

a. Purported Forms 941 for the second, third and fourth quarters of
2019 and first quarter of 2020 submitted in support of the application
claimed that BSC Patriot paid 36
employees more than
approximately $3 million during that period. And purported payroll
documentation claimed that BSC Patriot paid employees on average,
approximately $263,966 per month for the period April 2019 through
March 2020. However, NYS DOL records indicate that BSC Patriot
reported no wages paid during that period. Further, SSA records
show that there were no wages or Forms W-2 processed for BSC
Patriot between 2018 and 2020.

b. The application certified that all SBA loan proceeds would be used
only for business-related purposes as specified in the loan
application.

53.
Bank records show that on or about July 1, 2020, BSC Patriot received
the full amount of PPP loan proceeds of approximately $666,100 into Brattle Capital’s
checking account at Bank 2. Before receiving these loan proceeds, as of June 30,
2020, Brattle Capital’s Bank 2 account had a balance of approximately $272.

54.
The loan from Lender 6 was sent to Bank 2 via interstate wire through
the District of New Jersey using Federal Reserve ACH.

55.
BLOTNICK then transferred the loan proceeds as follows:

a. On or about July 1, 2020, BLOTNICK transferred a total of
approximately $532,201 to the Blotnick Brokerage Account and
approximately $25,000 from a personal account BLOTNICK held at
Bank 2 into a personal account he held at Bank 3.

b. On or about July 2, 2020, BLOTNICK transferred approximately
$50,000 from an account he held at Bank 2 to the Blotnick Brokerage
Account.

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Falsified Brattle GP Application to Lender 7

56.
On or about July 14, 2020, BLOTNICK submitted a PPP application to
Lender 7 for Brattle GP seeking approximately $338,132. The application was
submitted in BLOTNICK’s name and listed BLOTNICK as the owner of Brattle GP.

57.
The application submitted to Lender 7 stated that Brattle GP’s average
monthly payroll was approximately $135,253 and that the company had 16
employees.

58.
The Brattle GP application to Lender 7 contained materially false and
fraudulent information:

a. Purported Forms 941 for the second, third and fourth quarters of
2019 and first quarter of 2020 submitted in support of the application
claimed that Brattle GP had paid 16 employees for each quarter.
And purported payroll documentation claimed that Brattle GP paid
employees on average, approximately $135,253 per month for the
period April 2019 through March 2020. However, NYS DOL records
indicate that Brattle GP reported no wages paid during that period.
Further, SSA records show there were no wages or Forms W-2
processed for Brattle GP between 2018 and 2020.

b. The application certified that all SBA loan proceeds would be used
only for business-related purposes as specified in the loan
application.

59.
Bank records show that on or about August 12, 2020, Brattle GP
received the full amount of the approximately $338,132 loan in Bank 2.

60.
The loan from Lender 7 was sent to Bank 2 via interstate wire through
the District of New Jersey, originating from a server in New Jersey.

61.
On or about August 12, 2020, BLOTNICK transferred approximately
$320,000 to a personal BLOTNICK Bank 2 account. Later on or about that same day,
BLOTNICK transferred approximately $257,500 to the Blotnick Brokerage Account.

Misuse of PPP Loan Proceeds

62.
In total, BLOTNICK transferred at least approximately $3 million in
PPP loans funded for BLOTNICK’s businesses to the Blotnick Brokerage Account.
BLOTNICK then used this money to trade stocks, and in doing so, lost approximately
all $3 million.
Case 2:21-cr-00796-BRM Document 1 Filed 05/06/21 Page 16 of 16 PageID: 16

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Criminal Complaint — U.S. v. Blotnick

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