Criminal Complaint — United States v. Butherde Darius (No. 2:22-mj-10018-MAH, filed 2022-01-25)

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Criminal complaint in United States v. Butherde Darius, Mag. No. 22-10018 (No. 2:22-mj-10018-MAH), in the U.S. District Court for the District of New Jersey, filed January 25, 2022, as Doc. 1. Special Agent Matthew T. Maltese attested to the complaint by telephone on January 25, 2022, and the judicial officer's signature line names Michael A. Hammer, United States Magistrate Judge. Attachment A lists Count One (Bank Fraud), 18 U.S.C. § 1344, tied to a June 2, 2020 Paycheck Protection Program application on behalf of Fabulous Appetizers, LLC and approximately $852,205.00, and Count Two (Wire Fraud) tied to an April 3, 2020 Economic Injury Disaster Loan Program application. A Money Laundering heading cites 18 U.S.C. § 1957 and transfers on October 19, 2020 and October 30, 2020.

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Case 2:22-mj-10018-MAH Document 1 Filed 01/25/22 Page 1 of 12 PagelD: 1

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY
UNITED STATES OF AMERICA : Hon. Michael A. Hammer
Vv. : Mag. No. 22-10018
BUTHERDE DARIUS : CRIMINAL COMPLAINT

I, Special Agent Matthew T. Maltese, 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 United States Attorney’s
Office, District of New Jersey, 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 Matthew T. Maltese
United States Attorney’s Office

District of New Jersey

Special Agent Matthew T. Maltese attested to this Complaint by telephone
pursuant to Federal Rule of Criminal Procedure 4.1(b)(2)(A) on January 25, 2022 in

New Jersey.

January 25, 2022
Newark, New Jersey ks Ighecl by Sh Nhe tepe

Men Po Instrucher,
HONORABLE MICHAEL A. HAMMER
UNITED STATES MAGISTRATE JUDGE Signature of Judicial Officer

Case 2:22-mj-10018-MAH Document1 Filed 01/25/22 Page 2 of 12 PagelD: 2

ATTACHMENT A

Count One
(Bank Fraud)

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

BUTHERDE DARIUS

did knowingly and intentionally execute and attempt to execute a scheme and artifice
to defraud one or more financial institutions, as defined by 18 U.S.C. § 20, to wit:
Lender 1, the deposits of which are insured by the Federal Deposit Insurance
Corporation, and to obtain moneys, funds, and credits owned by and under the control
of such financial institution by means of materially false and fraudulent pretenses,
representations, and promises.

Approximate
Count Date Description
1 June 2, 2020 |DARIUS submitted a fraudulent loan application for

Paycheck Protection Program (“PPP”) funds on behalf of
Fabulous Appetizers, LLC to Lender 1 and obtained
approximately $852,205.00 in PPP funds.

In violation of Title 18, United States Code, Section 1344.
Case 2:22-mj-10018-MAH Document 1 Filed 01/25/22 Page 3 of 12 PagelD: 3

Count Two
(Wire Fraud)

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

BUTHERDE DARIUS

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
2 April 3, 2020 | DARIUS submitted a fraudulent loan application for

Economic Injury Disaster Loan Program (“EIDL”) funds
to the Small Business Administration (the “SBA”) on
behalf of Fabulous Appetizers LLC causing the SBA to
deposit approximately $10,000 in EIDL funds into the
company’s bank account via interstate wire
transmission, through the District of New Jersey.

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

Case 2:22-mj-10018-MAH Document 1 Filed 01/25/22 Page 4 of 12 PagelD: 4

Counts Three T i

(Money Laundering)

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

BUTHERDE DARIUS

did knowingly engage and attempt to engage in monetary transactions by, through,
or 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 the Fabulous Appetizers LLC’s account at Bank 1 to “Payroll” 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 1344 and/or wire fraud, in
violation of Title 18, United States Code, Section 1343.

Count Approximate Description of Monetary Transaction
Date
Transfer from the Fabulous Appetizers LLC bank
3 October 19, 2020 account at Bank 1 in the amount of approximately

$26,575.04 into “Payroll” account at Bank 2.

Transfer from the Fabulous Appetizers LLC bank
account at Bank 1 in the amount of approximately

4 October 19, 2020 $26,575.08 into “Payroll” account at Bank 2.
Transfer from the Fabulous Appetizers LLC bank
account at Bank 1 in the amount of approximately

5 October 19, 2020 $26,575.08 into “Payroll” account at Bank 2.
Transfer from the Fabulous Appetizers LLC bank

6 October 30, 2020 account at Bank 1 in the amount of approximately

$27,136.52 into “Payroll” account at Bank 2.

In violation of Title 18, United States Code, Section 1957.

Case 2:22-mj-10018-MAH Document 1 Filed 01/25/22 Page 5 of 12 PagelD: 5

ATTACHMENT B

I, Matthew T. Maltese, a Special Agent with the United States Attorney’s
Office, District of New Jersey, 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.

vervi

1. From in or about April 2020 through in or about June 2020, defendant
BUTHURDE DARIUS (“DARIUS”) used a variety of false statements and
representations to fraudulently obtain over approximately $860,000 in federal
COVID-19 emergency relief funds meant for distressed small businesses.
Specifically, DARIUS submitted fraudulent loan applications that fabricated
employees, falsified tax records, and misclassified business revenues and other
company information. DARIUS then misused the proceeds to make personal

purchases.

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 and 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 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.

3. Toobtain 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 state, among other things, its: (a) average monthly
payroll expenses; and (b) number of employees. These figures were used to

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calculate 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.

4. 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 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 allowed
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 Economic Injury Disaster Loan Program

6. The Economic Injury Disaster Loan Program (“EIDL”) is an SBA
program that provides low-interest financing to small businesses, renters, and
homeowners in regions affected by declared disasters.

7. The CARES Act authorized the SBA to provide COVID-19 EIDLs of up
to $2 million to eligible small businesses experiencing substantial financial
disruption due to the COVID-19 pandemic.

8. Inorder to obtain an EIDL, a qualifying business must submit an
application to the SBA and provide information about its operations, such as the
number of employees, gross revenues, and cost of goods sold in the 12-month period
preceding the disaster. In the case of EIDLs for COVID-19 relief, the 12-month
period constituted the 12 months preceding January 31, 2020. In addition, the
business entity must have existed in an operational condition on February 1, 2020.

9. The amount of the EIDL is determined based, in part, on the
information the applicant provides regarding the revenue, employees, and cost of
goods of the company. SBA directly issues any funds disbursed under an EIDL to
the applicant company. A company may use EIDL funds for payroll expenses, sick
leave, production costs, and business obligations, such as debts, rent, and mortgage
payments. If an applicant also obtained a loan under the PPP, the applicant
company was prohibited from using EIDL funds for the same purpose as the PPP
funds.
Case 2:22-mj-10018-MAH Document 1 Filed 01/25/22 Page 7 of 12 PagelD: 7

The Defendant and Relevant Entities
10. At all times relevant to this complaint:

a) DARIUS, was a resident of North Plainfield or Piscataway, New
Jersey and controlled or was otherwise associated with Fabulous
Appetizers, LLC (“Fabulous Appetizers”), a New Jersey limited
liability company that purported to be in the catering and food
service industry and through which DARIUS fraudulently applied
for a PPP loan and an EIDL.

b) Lender-1 was a financial institution insured by the Federal Deposit

Insurance Corporation (“FDIC”) headquartered in Salt Lake City,
Utah.

c) Bank-1 was a financial institution headquartered in San Francisco,
California.

d) Bank-2 was a financial institution headquartered in McLean,
Virginia.

The Scheme to Defraud

11. From on or about April 2020 to on or about June 2020 DARIUS obtained
a PPP loan and one EIDL payment totaling approximately $860,000. As described
below, on each application submitted, DARIUS is listed as a primary contact and
owner of the entity seeking payments. The PPP loan application included false
statements and false supporting documents that fabricated the number of
employees for the entity and the average monthly payroll expenses for the entity.
The EIDL applications included false statements that fabricated the number of
employees and gross revenues for the entity. DARIUS then used the fraudulently
obtained proceeds to purchase, among other things, hotel rooms, airfare, and liquor,
and to make cash withdrawals of tens of thousands of dollars.

12. In connection with this fraud, DARIUS submitted or caused to be

submitted the following PPP loan and EIDL loan applications to Lender-1 and the
SBA:
Case 2:22-mj-10018-MAH Document 1 Filed 01/25/22 Page 8 of 12 PagelD: 8

Name of Amount Lender Approximate
Business Disbursed Application
Applicant Date
Fabulous $852,205 Lender 1 June 2, 2020
Appetizers
Fabulous $0 SBA April 3, 2020
Appetizers
Fabulous $10,000 SBA May 11, 2020
Appetizers

Falsified Fabulous Appetizers PPP Application to Lender-1

13. On or about June 2, 2020, Lender-1 received a PPP application in the
name of Fabulous Appetizers seeking a PPP loan in the amount of $852,205. The
application was submitted in DARIUS’ name and listed his Social Security Number.
In addition, the application listed DARIUS as the 100 % owner of Fabulous
Appetizers and included his home address in North Plainfield, New Jersey, a
telephone number subscribed to DARIUS, and an email address of
Fabulousapp16@gmail.com. DARIUS represented in the application that the loan
proceeds would be used for payroll, lease / mortgage interest, and utilities.

14. The PPP application submitted to Lender-1 stated that Fabulous
Appetizers’ average monthly payroll was $340,882.10 and that the company had 46
employees. In connection with Fabulous Appetizers’ payroll, the PPP application
included four purported Employer’s Quarterly Federal Tax Returns (IRS Form 941)
for 2019 and a purported February 2020 bank statement for Fabulous Appetizers’
business bank account at Bank-1 (the “Fabulous Appetizers’ Bank Account”).

15. Bank records show that the Fabulous Appetizers’ Bank Account was
opened on or about April 3, 2017. The authorized signer on the account is identified
as DARIUS and includes his Social Security Number and indicates his title as
“100% Sole Owner.” Account opening records and bank statements list Fabulous
Appetizers’ address as DARIUS’s home address in North Plainfield, New Jersey,
and two telephone numbers subscribed to DARIUS.

16. The Fabulous Appetizers application to Lender-1 contained the
following materially false and fraudulent information:

a. The purported Forms 941 claimed that Fabulous Appetizers
had paid employees wages of approximately $4,090,585 for
2019 and withheld approximately $705,590 in federal income
tax. Information obtained from the Social Security
Administration (“SSA”) revealed that Fabulous Appetizers
reported no wages paid for the period between 2017 through

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Case 2:22-mi-1OOs YAH NRORURERS WET OM RSIaa BAG WAL PANE Pek
Statements, nor Forms W-2, Wage and Tax Statements, were
received by the SSA. Likewise, a review of information
obtained from the Internal Revenue Service (“IRS”) revealed
that no Forms 941 were filed by Fabulous Appetizers for the
four purported Employer’s Quarterly Federal Tax Returns of

2019.

b. The purported February 2020 bank statement for the
Fabulous Appetizers’ Bank Account contained falsified bank
account information. The statement consisted of five pages
which reflected numerous transactions including deposits and
credits of approximately $28,800 and withdrawals and debits
of approximately $29,400. Bank records from Bank-1,
however, show that February 2020 bank statement for the
Fabulous Appetizers’ Bank Account consists of four pages
with minimal account activity, including deposits and credits
of only approximately $228 and withdrawals and debits of
only approximately $320.

Falsified Fabulous Appetizers’ EIDL Applications to the SBA

17. On or about April 3, 2020, the SBA received an EIDL application on
behalf of Fabulous Appetizers. The contact information for the application was for
DARIUS and included his Social Security Number; his home address in North
Plainfield, New Jersey, which was also listed as the business address for Fabulous
Appetizers; a telephone number subscribed to DARIUS; and an e-mail address of
fabulousappetizers@gmail.com. The EIDL application also identified DARIUS as
100% owner of Fabulous Appetizers and indicated that the company had 20
employees as of January 31, 2020, and, for the 12-months prior to the disaster, i.e.,
January 31, 2019 through January 31, 2020, gross revenues of $2 million and, cost
of goods sold of $100,000. Although the check box requesting up to a $10,000
advance was not checked, the bank information for where to send an advance was

completed on this EIDL application.

18. The Fabulous Appetizers April 3, 2020 EIDL application to SBA
contained the following false and fraudulent information:

a. There is no indication that Fabulous Appetizers employed 20
employees in the 12 months prior to the disaster (January 31,
2019 through January 31, 2020). As noted above, SSA records
revealed that Fabulous Appetizers reported no wages paid to
employees for the period between 2017 through 2019. No
Forms W-3, Transmittal of Wage and Tax Statements, nor
Case 2:22-m)-100]& Yah ROL Wale dla PAr Starenigat? WéreAtdel? by the
SSA. Likewise, a review of information obtained from the IRS
revealed that no Forms 941 were filed by Fabulous Appetizers
for the tax quarters of 2019. In addition, bank records also
revealed that from January 1, 2019 through August 30, 2021,
Fabulous Appetizers had total deposits of approximately
$70,000, excluding the approximate $860,000 in fraudulent
CARES Act funds it received. This amount of deposited funds
was substantially lower than the $2 million in gross revenue
that DARIUS claimed for the company on its EIDL

application.

19. On or about May 11, 2020, the SBA received another EIDL application
on behalf of Fabulous Appetizers. The contact information for the application was
for DARIUS and included his Social Security Number; his home address in North
Plainfield, New Jersey, which was also listed as the business address for Fabulous
Appetizers; a telephone number subscribed to DARIUS; and an e-mail address of
fabulousappetizers@gmail.com. The EIDL application also identified DARIUS as
100% owner of Fabulous Appetizers and indicated that the company had 20
employees as of January 31, 2020, and, for the 12-months prior to the disaster, 1.e.,

January 31, 2019 through January 31, 2020, gross revenues of $300,000 and cost of
goods sold of $75,000. On this application, the box indicating DARIUS was seeking

an advance of up to $10,000 was checked and the bank address information for
where to deposit such an advance was completed.

20. The Fabulous Appetizers’ May 11, 2020 EIDL application to SBA
contained the following false and fraudulent information:

a. There is no indication that Fabulous Appetizers employed 20
employees in the 12 months prior to the disaster (January 31,
2019 through January 31, 2020). As noted above, SSA records
revealed that Fabulous Appetizers reported no wages paid to
employees for the period between 2017 through 2019. No
Forms W-3, Transmittal of Wage and Tax Statements, nor
Forms W-2, Wage and Tax Statements, were received by the
SSA. Likewise, a review of information obtained from the IRS
revealed that no Forms 941 were filed by Fabulous Appetizers
for the tax quarters of 2019. In addition, bank records also
revealed that from January 1, 2019 through August 30, 2021,
Fabulous Appetizers had total deposits of approximately
$70,000, excluding the approximate $860,000 in fraudulent
CARES Act funds it received. This amount of deposited funds
was substantially lower than the $300,000 in gross revenue

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that DARIUS claimed for the company on this EIDL
application.

21. The SBA denied the May 11, 2020 EIDL application by letter dated
June 16, 2020.

Misuse of PPP and EIDL Proceeds

22. On or about June 3, 2020, the Fabulous Appetizers Bank Account
received approximately $852,205 in fraudulently obtained PPP loan proceeds from
Lender-1. Prior to this loan disbursement, the Fabulous Appetizers Bank Account
had an account balance of less than $20.

23. Onor about July 14, 2020, the Fabulous Appetizers Bank Account
received an EIDL deposit of $10,000 referencing Fabulous Appetizers’ April 3, 2020
EIDL application. Prior to this disbursement, the Fabulous Appetizers Bank
Account did not have any other deposits during the period from June 3, 2020 to on

or about July 14, 2020.

24. From July 15, 2020 through August 31, 2021, the Fabulous Appetizers
Bank Account had total withdrawals of approximately $641,800 through
approximately 970 transactions with the withdrawals ranging from approximately
$0.10 to $63,368. These withdrawals included payments to and for an e-commerce
company, hotels, nail salons, food, liquor stores, airfare, and approximately $58,000

in cash withdrawals.

25. In addition, these withdrawals during this period also included
approximately $300,000 in payments for purported “payroll” payments. As set forth
below, the purported “payroll” payments are consistent with an attempt to conceal
the fact that Fabulous Appetizers had not been an ongoing business with actual
employee payroll and was thus ineligible to receive a PPP loan in the amount of
$852,205. Notably, from on or about January 1, 2019 through on or about June 3,
2020, and prior to the PPP loan deposit, the Fabulous Appetizers Bank Account
records do not include any legitimate payments for any payroll expenses. In
addition, as described above, the company did not report any wages to employees to
the SSA for 2017 through 2019, nor did it file any Forms W-3, Transmittal of Wage
and Tax Statements or Forms W-2, Wage and Tax Statements, with the SSA. And a
review of information obtained from the IRS revealed that no Forms 941 were filed

by Fabulous Appetizers for the tax quarters of 2019.

26. Moreover, law enforcement lawfully obtained text message
communications between DARIUS and another individual (“Individual-1”) in or
about August 2020 related to sham payroll payments. Specifically, in these text
messages exchanges, DARIUS provided identifying information to Individual-1

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pertaining to three individuals who could serve as fake employees for Fabulous
Appetizers. In addition, DARIUS and Individual-1 also discuss Individual-1
providing the names and information of several additional individuals to serve as
fake employees to support the sham payroll scheme.

27. In furtherance of this “payroll” scheme, on or about October 19, 2020,
approximately $26,575 was transferred from Fabulous Appetizers Bank Account to
a sham payroll account at Bank-2 (the “Sham Payroll Account”). That same day,
two additional transfers were made from the Fabulous Appetizers’ account at Bank-
1 to the Sham Payroll Account, both in the amount of approximately $26,575.
Numerous additional transfers were made in furtherance of this scheme, including
approximately $27,136 transferred on or about October 30, 2020, from the Fabulous
Appetizers Bank Account to the Sham Payroll Account.

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