Criminal Information — United States v. Butherde Darius

Record facts

U.S. District Court for the District of New Jersey · No. 3:22-cr-00783-GC · Doc. 21 · 2022-11-21 · Docket on CourtListener

Full text

Case 3:22-cr-00783-GC Document 21 Filed 11/21/22 Page 1 of 9 PagelD: 45

202200875/DED

RECEIVED
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY NOV 2 1 2022

AT 8:30 M
WILLIAM T. WALSH
CLERK

UNITED STATES OF AMERICA : Hon.

v. : Crim. No. 7 7 ~ ] £3 Ue s)

BUTHERDE DARIUS 18 U.S.C. § 1349
18 U.S.C. § 1957

INFORMATION

The defendant having waived in open court prosecution by Indictment, the
United States Attorney for the District of New Jersey charges:

COUNT ONE
(Conspiracy to Commit Bank Fraud)

Background

Individuals and Entities
1, At all times relevant to this Information:

a. Defendant BUTHERDE DARIUS (“DARIUS”) resided in New
Jersey.

b. DARIUS owned and controlled a purported business (“Business
1”) through which he submitted an application for federal COVID-19 emergency relief
funds.

C. CC-1 was a co-conspirator not charged in this Information who
agreed with DARIUS to submit a fraudulent loan application for federal COVID-19

emergency relief funds.
Case 3:22-cr-00783-GC Document 21 Filed 11/21/22 Page 2 of 9 PagelD: 46

d. Victim-Lender 1 was a financial institution and a member bank
of the Federal Home Loan Bank system headquartered in Utah.

e, Bank 1 was a financial institution and a member bank of the
Federal Home Loan Bank system headquartered in San Francisco, California.

f. Bank 2 was a financial institution and a member bank of the
Federal Home Loan Bank system headquartered in McLean, Virginia.

Paycheck Protection Program

g. The Coronavirus Aid, Relief, and Economic Security (“CARES”)
Act was a federal law enacted in or about 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. 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. The PPP ended on May 31,
2021.

h, To obtain a PPP loan, a qualifying business was required to
submit a PPP loan application, signed by an authorized representative of the
business. The PPP loan application required the business—through its authorized
representative—to acknowledge the program rules and make certain affirmative
certifications in order to be eligible to obtain the PPP loan. In the loan application,
the small business was required to state, among other things, its: (a) average monthly

payroll expenses; and (b) number of employees. These figures were used to calculate

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Case 3:22-cr-00783-GC Document 21 Filed 11/21/22 Page 3 of 9 PagelD: 47

the amount of money the small business was eligible to receive under the PPP. In
addition, businesses applying for a PPP loan had to provide documentation showing
their payroll expenses.

1. A PPP loan application had to be processed by a participating
lender. If the PPP loan application was approved, the participating lender funded
the PPP loan using its own money, which was 100% guaranteed by the U.S. Small
Business Administration (“SBA”). Data from the application, including information
about the borrower, the total amount of the loan, and the listed number of employees,
was transmitted by the lender to the SBA while processing the loan.

j. PPP loan proceeds could only be used by the business on certain
permissible expenses—payroll costs, interest on mortgages, rent, and utilities. The
PPP allowed the interest and principal on the PPP loan to be forgiven if the business
spent the loan proceeds on these eligible expense items within a designated period of
time after receiving the proceeds and used a certain amount of the PPP loan proceeds
on payroll expenses.

The Bank Fraud Conspiracy

z., From at least in or around April 2020 through in or around June 2020,
for the purpose of executing and attempting to execute the scheme and artifice to
defraud, in the District of New Jersey and elsewhere, defendant

BUTHERDE DARIUS
did knowingly and intentionally conspire and agree with others, including CC-1, to
execute and attempt to execute a scheme and artifice to defraud one or more financial

institutions, as defined by 18 U.S.C. § 20, namely, Victim-Lender 1, the deposits of

3
Case 3:22-cr-00783-GC Document 21 Filed 11/21/22 Page 4 of 9 PagelD: 48

which are insured by the Federal Deposit Insurance Corporation, and to obtain any
of the moneys, funds, credits, assets, securities, and other property owned by, and
under the control of, such financial institution by means of false and fraudulent
pretenses, representations, and promises, contrary to Title 18, United States Code,
Section 1344.

Goal of the Conspiracy

a. The goal of the conspiracy was for DARIUS and CC-1 to profit by
fraudulently obtaining federal COVID-19 emergency relief funds from Victim-Lender
1 and the SBA by submitting a fraudulent loan application and then diverting the
money for personal use and other business ventures.

Manner and Means of the Conspiracy

A, It was part of the conspiracy that:

a. On or about June 2, 2020, DARIUS and CC-1 submitted a PPP
application to Victim-Lender 1 for Business 1 seeking a loan for approximately
$852,205 (the “Business 1 PPP Application”). The Business 1 PPP Application was
submitted in DARIUS’s name and listed DARIUS as the owner of Business 1.

b. The Business 1 PPP Application and supporting documentation
contained materially false and fraudulent information, including false tax documents
and false claims about the number of employees and the monthly payroll of Business
i.

C. The fraudulent Business 1 PPP Application caused Victim-

Lender 1 to disburse approximately $852,205 in PPP funds on or about June 3, 2020
Case 3:22-cr-00783-GC Document 21 Filed 11/21/22 Page 5 of 9 PagelD: 49

to an account that DARIUS controlled at Bank 1. DARIUS and CC-1 then caused the
transfer of approximately $85,221 from Bank 1 to an account controlled by CC-1.

All in violation of Title 18, United States Code, Section 1349.
Case 3:22-cr-00783-GC Document 21 Filed 11/21/22 Page 6 of 9 PagelD: 50

COUNT TWO
(Transacting in Criminal Proceeds)

5. The allegations set forth in Paragraphs 1, 2, and 4 of Count One of this
Information are realleged here.

6. On or about October 19, 2020, in the District of New Jersey and
elsewhere, defendant

BUTHERDE DARIUS

knowingly engaged 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 approximately $26,575 from a
bank account at Bank 1 to a bank account at Bank 2, such property having been
derived from a specified unlawful activity, that is bank fraud.

In violation of Title 18, United States Code, Section 1957.
Case 3:22-cr-00783-GC Document 21 Filed 11/21/22 Page 7 of 9 PagelD: 51

FORFEITURE ALLEGATION AS TO COUNT ONE

1. As a result of committing the offense charged in Count One of this
Information, defendant BUTHERDE DARIUS shall forfeit to the United States,
pursuant to Title 18, United States Code, Section 982(a)(2)(A), any property, real or
personal, constituting, or derived from, proceeds obtained directly or indirectly as a
result of the offense charged in Count One of this Information, the value of which
totaled $852,205.

FORFEITURE ALLEGATION AS TO COUNT TWO

2. As a result of committing the money laundering offense charged in
Count Two of this Information, defendant BUTHERDE DARIUS shall forfeit to the
United States, pursuant to Title 18, United States Code, Section 982(a)(1), all
property, real or personal, involved in such money laundering offense, and all
property traceable to such property.

SUBSTITUTE ASSET PROVISION
(Applicable to All Forfeiture Allegations)

4, If any of the property described above, 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,
Case 3:22-cr-00783-GC Document 21 Filed 11/21/22 Page 8 of 9 PagelD: 52

it is the intent of the United States, pursuant to Title 21, United States Code, Section
853(p), as incorporated by Title 18, United States Code, Section 982(a)(1) and Title
28, United States Code, Section 2461(c), to seek forfeiture of any other property of

such defendant up to the value of the forfeitable property described above.

Pritip R. Set

PHILIP R. SELLINGER
United States Attorney

CASE NUMBER: 22-

United States District Court
District of New Jersey

UNITED STATES OF AMERICA
v.

BUTHERDE DARIUS

INFORMATION FOR

18 U.S.C. § 1349
18 U.S.C. § 1957

PHILIP R. SELLINGER
UNITED STATES ATTORNEY
FOR THE DISTRICT OF NEW JERSEY

DAVID E. DAUENHEIMER
KATHERINE M. ROMANO
ASSISTANT U.S. ATTORNEYS
NEWARK, NEW JERSEY
(973) 353-6095

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