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Plea Agreement — United States v. Chad Brandon Thomas

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“Plea Agreement — United States v. Chad Brandon Thomas.” Archived at Pandemic Darlings, https://pandemicdarlings.com/court-filings/us-v-chad-thomas/2022-07-15-plea-agreement-dkt-3/.

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UN ITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT GREENEVILLE
J- ·- "Z'l
.J.lll-· 1- ~ J

UNITED STA TES OF AMERICA )
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,.., : !2 2- C,,'f ~ 7, lo \Jerk, U. S. District Court
' - """ Eastern District of Tennessee
V. )
(' / i\t Greeneville
) JUDGE ot"-l..V" ~n·o✓-
CHAD BRANDON THOMAS )

PLEA AGREEMENT

The United States of America, by the United States Anorney for th e Eastern District or

Ten nessee, and the defendant, Chad Brandon Thomas, and the defendant' s attorney, L. Dudley

Senter, Esq uire, have agreed upon the fo l lowing:

I. The defendant will \Vaive indictment and arraignment and plead guilty to an

information charging the defendant \\'ith 1he offense of wire fraud, a violation of 18 U.S.C. § 1343.

The maximum . statutory punishment for ,this offense is a term of imprisonment of not more than '.2.0

years, a fine of not more than $250,000, supervised release of not more than three years, a special

assessment in the amount of$ I 00, forfei ture of assets as set forth below, and restitution to any

victim of the offense.

2. The United States agrees not to further prosecute the defendant in the Eastern District

of Tennessee for any other non-tax criminal offenses com milled by the defendant related to the

charges contained in the information.

3. The defendant has read th e information, discussed the charge and possible defenses

with defense counsel, and und erstands th e crime charged. Specifically. th e elements of wire fraud in

violation of 18 U.S.C. § 1343 are as follows: (I) the defendant knowingly devised a schem e to

defraud in order to obtain money or property, that is. by submitting fraudulent loan applications

under the Paycheck Prorw;on Plan ofrhc Comnav;,•us A;d. Re l;e ( a n d ~ Security Act

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(''CARES Act"); (2) the scheme included a material misrepresentation or concealment of a material

fact; (3) the defendant had the intent to defraud: and (4) the defendant used wire, radio or television

communications or caused another to use wire, radio or television communications in interstate

commerce in furtherance of the scheme.

4. In suppo11 of the defendant's guilty plea, the defendant agrees and stipulates to the

following facts. which satist)' the offense elements. These are the facts submitted for purposes of

the defendant ' s guilty plea. They do not necessarily constitute all of the facts in the case. Other

facts may be relevant to sentencing. Both the defendant and the United States retain the right to

present additional facts to the Court to ensure a fair and appropriate sentence in this case.

Background Information

At all relevant times. the defendant was a resident of Blountville, Sullivan County.

Tennessee and was the primary owner, or claimed to be the managing member. of the following

small businesses that were purpo11edly headquartered and operating in the Eastern District of

Tennessee: Kingdom of God. Inc. ("KOG" ), a Tennessee corporation; C. Thomas Enterprises

("CTE"), a Tennessee corporation; and The Triangle Group ("TG"). a business alias name for

defendant doing business as a sole proprietorship.

At all relevant times, KOG was a Tennessee corporation . According to the Tennessee

Secretary of State's records, KOO was incorporated as a religious corporation on May 12, 2020, and

was administratively dissolved on August 11 , 202 1, for failure to file an annual report. The Internal

Revenue Service has no record of KOG ever submitting Form 941 reports for 2020. The Tennessee

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Department of Labor similarly has no record of KOG ever having emp loyees or paying wages in

2020.

At all relevant times, CTE \.Vas a Tennessee corporation. According to the Tennessee

Secretary ofState·s records, CTE was incorporated on February 3, 2016, and was administratively

dissolved on August 11 , 2021, for failure to file an annual repo1t. The Internal Revenue Service has

no record of CTE ever submitting Form 941 reports for the years 20 I 8 through 2020. The

Tennessee Department of Labor similarly has no record ofC:TE having employees or paying \vages

in 2019 and 2020.

At all releva nt times, TG was a purported so le proprietorship operated by defendant. The

Internal Revenue Service has no record of TG ever submitting Form 941 reports for the years 2018

through 2020. The Tennessee Department of Labor similarly has no record ofTG having

employees or paying wages in 2019 and 2020.

At all relevant times, the Bank of Southern California, N.A. (''BSC") was federally chartered

bank. BSC was a financial in stitution as defined in 18 U.S.C. § 20, with deposits insured by th e

Federal Deposi t Insurance Corporation.

At all relevant times. CDC Small Business Finance ("CDCSBF") \Vas a small husiness

lender and loan origination company th at operated in San Diego, California and elscv.-here.

CDCSBF routinely processed and fund ed small business loan applications. v.'ith A.CH funding by

Bank of Southern California.

Paycheck Protection Program

The CARES Act is a federal law enacted in or around March 2020 and designed to provide

emergency financial assistance to the millions of Americans who were suffering the economic

effecis of the COVID-19 worldwide pandemic. One source of relief provided by the CARES Act

3
t<f

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was the authorization of up to $349 bi Iii min forgivable loans to small businesses for job retention

and certain other specified expenses, through a program referred to as the Paycheck Protection

Program (" PPP.. ). In or around April 2020, Congress authorized over $300 billion in additional PPP

funding for small businesses. The purpose of loans issued under the PPP was to enable small

businesses suffering from the economic downturn to continue to pay salaries or wages to their

employees.

The United States Small Business Administration (''SBA") is an executi ve-branch agency of

the United States. The SBA was created in 1953 and is the only cabinet-level federal agency fully

dedicated to small business. The SBA provides counseling, capital, and contracting expertise as the

nation ·s resource and voice for small bu ·inesses. The SBA also provides government-backed loans

through banks, credit unions, and other lenders. The PPP was administered by the SBA. which

promulgated regulations concerning eligibility for PPP loans. Eligible businesses seeking a PPP

loan could apply for the loan through a federally insured depository institution or its originators.

To obtain a PPP loan, a qualifying business had 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 to be eligible. In the PPP loan application. the small business (through its

authorized representative) certifi ed, among otherthings its average monthly payroll expenses and its

number of employees. These figures were then used to calculate the amount of money the small

business was eligible to receive under th e PPP. In addition, businesses that applied for a PPP loan

had to include documentation showing their payroll expenses and other information as pan of the

application . CJ

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PPP loan application s were processed by a pa11icipating lender. lf a PPP loan application

was approved, the participating lender funded the PPP loan using its own monies, but the PPP loan

was I 00% guaranteed by the 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.

PPP loan proceeds had to be used by the business on the following permissible expenses :

payroll costs, interest on mortgages. ren , and utilities. The PPP allowed the interest and principal

on the PPP loan to be entirely forgiven iCthe business spent the loan proceeds on these 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. Using proceeds of a PPP loan for consumer goods,

automobiles. personal residences, clothi ng, jewelry. to pay the borrower's personal federal income

taxes. or to fund personal day-to-day living expenses unrelated to the specified authorized expenses

was not permitted.

The Scheme to Defraud

Beginning in or about IV[ay 2020, and continuing through around in or about September

2020. defendant knowingly and willfull y devised a scheme and artifice to defraud , and to obtain

money and property. by means of materially false and fraudulent pretenses, representations, and

promises. It was the purpose and o~ject of the scheme for defendant to unjustly c:nrich himself and

others by obtaining PPP loan proceeds under false and misleading pretenses. including by making

false statements about the number of individuals his businesses employed, the average monthly

payroll, and the intended use of the loan proceeds defendant obtained . It was also part of rhe

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scheme rhat defendant created false and fraudulent documems. including phony payroll lists and

Internal Revenue Service ("IRS'') payroll tax forms.

In total. defendant submitted three fraudulent PPP loan applications. one each for TG. CTE,

and KOG. All three loans were approved, and each is detailed below.

Execution <~l the Scheme to Defraud

On or about May 3. 2020, defendant transmitted by interstate wire from the Eastern District

of Tennessee to CDCSBF in San Diego, Californin. an application for PPP loan number

8240047208 on behalf of CTE. CDCSBF received the application on May 3, 2020. As part of the

application, defendant falsel y represented that CTE had six employees and an average monthly

payroll of $12,470. Defendant also submitted a phony IRS form 941 with the application. In

connection with the application. defend · nt included an authorization agreement for a one time ACH

electronic transfer of funds signed by defendant to a Regions Bank account ending in 3903. A PPP

loan of £31,200 was disbursed to that account on \fay 6, 2020.

On or about May 18. 2020. defendant transmitted by interstate wire from the Eastern District

of Tennessee to CDCSBF in San Diego, California, an application for PPP loan number

3799417406 on behalfofTG. CDCSBF received the application on May 18. 2020. As part of the

application. defendant falsely represented that TG had six employees and an average monthly

payroll of $27,600. Defendant also submitted a phony IRS form 941 with the application. In

connection with the application, defendant inc Iuded an authorization agreement for a one time ACH

electronic transfer of funds signed by defendant to a Regions Bank account ending in 7894. A PPP

loan of $69.000 was disbursed to that account on May 20, 2020 .

fa
On or about July 6. 2020. defendant transmitted by interstate \-Vire from the Eastern District

of Tennessee to CDCSBF in San Diego. Califixnia. an application loan number

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64064780 IO on behalf of KOG. CDCSBF received the application on July 6, 2020. As part of the

application. defendant fals ely represented that KOG had 26 employees and an average monthl y

payroll of $83,000. Defendant also submitted a phony payroll listing with the application that

included minors, family members. and nationall y knov,rn religious leaders as purported empl oyees.

In connection with th e application. defendam included an authori zation agreement for a one time

1\Cl-1 electronic transtcr of funds signed by defendant to a Regi ons Bank account ending in 1974. A

PPP loan of $207.500 was disbursed to that account on July 14. 2020.

Loss Amount:

Defendant stipulates and agrees that the above-described PPP loan applications that he

submitted contained false statements and fraudu lent documentation and constitute rele vant conduct

for purposes of this plea agreement.

Beginning on or about May 3. 2020, and continuing throu gh on or about July 14. 2020.

de fendant su bmitted the following loan appl ications, each of which contained matcrially false and

fraudul ent docum entation, and caused the follO\.ving losses or intended losses:

Date of application De~ails of App lication Amount

PPP loan application on behalf of CTE submitted to
May 3, 2020 $31 ,200
CDCSBF

PPP loan application on behalf of TG submitted to
May 18, 2020 $69.000
CDCSBF

PPP loan application on behalf of TG submitted to
July 6, 2020 $207,500
CDCSBF
j
TOTAL $307,700

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5. The defe ndant is pleadin g guilty because the defe ndant is in foct guilty. The

defendant understands that, by pleading guilty, th e defendant is giving up several rights. including:

a) the right to be indicted by a grand jury for these crimes:

b) the right to plead not guilty;

c) the right to a speedy and public trial by jury:

d) the right to assistance of counsel at trial :

e) the right to be presumed innocent and to have the burden of proof placed on

the United States to prove the defendant guilty beyond a reasonable doubt;

t) the right to confront and cross-examine witnesses against the defe ndant;

g) th e right to testify on one's own beha lt: to present evidence in opposition to

the charges, and to compel the attendance of witnesses; and

h) the right not to testity and to have that choice not used against the defendant.

6. The parties agree that th e appropriate disposition of this case would be th e follO\ving:

a) The Court may impose any lawful term of imprisonment, any lawful tine, and

any lawfu I term or supervised release up to the statutory ma ximum ;

b) The Court will impose special assessment tees as required by la\v;

c) The Coun may order forfeiture as applicable and restitution as appropriate;

and

d) Pursuant to Rule I l (c)(l)(B), Federal Rules of Criminal Procedure, and in

consideration of the terms of this plea agreement and the policy statement set fc)lth in U.S.S.G.

§ 6B1 .2(b) and related commentary, the United States and th e defendant agree and stipul ate, and

agree to recommend at the time of sentencing: (i) the inte nded loss amount from the offense is more

than $250,000 but less than $550,000 for an increase of 12 levels und~S.G. § 2B 1. 1(b)( l)(H ):

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and (ii) the defendant engaged in sophisticated means for an increase of two levels under U.S.S.G. §

2B I. I (b )( I 0). The defendant understands and agrees that the recommendations set forth in this

paragraph are made pursuant to Rule I l(c)(l)(B) and, as such, are not binding on the Court. The

defendant further understands and agrees that if the recommendations set forth in this paragraph arc

rejected by the Court, that rejection may not be used by the defendant as a basis to rescind this pica

agreement or withdraw the defendant·s guilty plea.

No promises have been made by any representative of the United States to the defendant as

to what the sentence will be in this case . Any estimates or predictions made to the defendant by

defense counsel or any other person regarding any potential sentence in this case are not binding on

the Court. and may not be used as a basi s to rescind this plea agreement or withdra1vv the defendant'

guilty plea(s). The defendant understands that the sentence in this case will be determined by the

Court after it receives the presentence in vestigation report from the United States Probation Office

and any inlcmnation presented by the parties. The defendant acknowledges that the sentencing

determination will be based upon the en tire scope of the defendant"s criminal conduct, the

defendanfs criminal history. and pursuant to other factors and guidelines as set forth in the

Sentencing Guidelines and the factors set forth in 18 U.S.C. § 3553.

7. Given the defendant's agreement to plead guilty, the United States will not oppose a

two-level reduction for acceptance of re~ponsibility under the provisions of Section 3E 1.1 (a) of the

Sentencing Guidelines. Further, if the detendant's offense level is 16 or greater, and the defendant

is awarded the two-level reduction pursuant to Section 3E 1. 1(a). the United States agrees to move.

at or before the time of sentencing, the Court m decrease the offense level by one additional level

pursuant to Section 3E 1.1 (b) of the Sentencing Guidelines. Should the defendant engage in any

conduct or make any statements that are inconsistent with accepting re~f bility for the

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defendant's offense, including violations of conditions of release or the commission of any

additional offense(s) prior to sentencing, the United States will be free to decline to make such

motion, to withdraw that motion if already made. and to rec ommend to the Court that the defendant

not receive any reduction for acceptance of responsibility under Section 3E I. I or the Sentencing

Guidelines.

8. The defendant agrees to pay the special assessment in this case prior ro sentencing.

9. Unless othenvise limited by an agreed preliminary order of forfeiture, the defendant

agrees to forfeit to the United States immediately and voluntarily any and all assets and property. or

portions thereoC subject to forfeiture as proceeds of the defendant" s violation of 18 U.S.C. § 1343,

which are in the possession or control of the defendant or the defendant 's nominees.

The defendant agrees to forfeit the defendant's interest in the following properties:

a. $161. 938.0 I of Un ited States currency seized from Regi ons Bank on or about l\1larch
2, 2022. which represent proceeds the defendant personally derived from the
violation of Title 18. Uni ted States Code. Section 1343.

b. A personal money judgment in the amount of $145.761.99 in favor of the United
States and against the defendant, CHAD BRANDON THOMAS. which represents
proceeds the detendant personall y derived from the offense of Title 18, United States
Code. Section 1343.

The defendant further agrees to assist the United States fully in the identification. recovery,

and return to the United States of any other assets or portions thereof su bject to forfeiture. The

defendant further agrees to make a full and complete disclosure of all assets over which the

defendant exercises control and those which are held or controlled by a nominee. The defendant

agrees to forfeit all interests in the properties as described above and to take whatever steps arc

necessary to pass clear titl e to the United States. These steps include, but are not limited to. the

surrender of title, the signing of a consent decree or forfeiture, an d the signing of any other

documents necessary to effectuate such transfers. The defendant agreeEf1o object to any civil or

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criminal forfeiture brought against these properties. The defendant agrees to take all such steps to

locate such propeny and to pass title to the United States before the defendant's sentencing.

ln the event a money judgment forfeiture is ordered, the Defendant agrees to send all money

judgment payments to the United States Treasury. Defendant also agrees that the full money

judgment amount shall be considered due and payable immediately. If the defendant cannot pay

the full amount immediately and is placed in custody. the defendant agrees that the Bureau of

Prisons will have the authority to establi sh payment schedules to ensure payment of the money

judgment. The defendant fu,ther agrees to cooperate fully in efforts to collect on the money

judgment by set-off of federal payments, execution on non-exempt property, and any other mean s

the United States deems appropriate. The defendant and counsel also agree that the defendant may

be contacted post-judgment regarding the collection of the money judgment without notifying

defendant"s counsel and outside the presence of the defendanfs counsel.

I 0. The defendant agrees that the Court shall order restitution. pursuant to any applicable

provision of law, for any loss caused to: ( I) the victim(s) of any offense charged in this case

(including dismissed counts); and (2) th e victim(s) of any criminal activity that was part of the same

course of conduct or common scheme or plan as the defendant's charged ortense(s).

11 . Financial Obligations. The defend ant agrees to pay all tines and/or restitution to the

Clerk of Court. The defendant also agrees that the full fine and ior restitution amount(s) shall be

considered due and payable immediately. If the defendant cannot pay the full amount immediately

and is placed in custody or under the supervision of the Probation Office at any time. the defendant

agrees that the Bureau of Prisons and the Probation Office will have the authority to establish

payment schedules to ensure payment of the fine and/or restitution. The defendant further agrees to

cooperate fully in efforts to collect any financial obligation imposed boourt by set-off of

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federal payments. execution on non-exem pt property. and any other means the United States deems

appropriate. The defendant and counsel also agree that the defendant may be contacted post-

judgment regarding the collection of any financial obligation imposed by the Court without

notifying the defendant's counsel and outside the presence of the defendant' s counsel. In order to

facilitate the collection of financial obi igations to be imposed with this prosecution. the defendant

agrees to disclose fully all assets in which the defendant has any interest or over which the

defendant exercises control. directly or indirectly. including those held by a spouse. nominee, or

other third party. In furtherance of th is agreement, the defendant additionally agrees to the

following specific terms and conditions:

a) lf so requested by the United States. the defendant will promptly submit a

completed financial statement to the U.S. Attorney·s Office. in a form it provides and as it directs.

The defendant promises th at such financial statement and disclosures will be complete. accurate.

and truthful.

b) The defendant expressly authorizes the U.S. Attorney·s Office to obtain a

credit report on the defendant in order to evaluate the defendant' s ability to satisfy any financial

obligation imposed by the Cou1t.

c) If so requested by the United States. the defendant will promptly execute

authorizations on Corms provided by the U.S. Attorney's Office to permit the U.S. Attorney's Office

to obtain financial and tax records of the defendant .

12. The defendant acknowledges that the principal benefits to the United States ofa plea

agreement include the conservation of limited government resources and bringing a certain end to

the case. Accordingly, in consideration of the concessions made by the United States in this

agreement and as a fu11her demonstration or the defendant' s acceptanQsponsibility for the

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offense(s) committed. the defendant vol untarily, knowingly. and intentionally agrees to the

following:

a) The defendant will not file a direct appeal of the defendant's conviction or

sentence with one exception: The defendant retains the right to appeal a sentence imposed above

the sentencing guideline range determined by the Court or above any mandatory minimum sentence

deemed applicable by the Court, whichever is greater. The defendant also waives the right to appea l

the Court's determination as to whether the defendant's sentence \,viii be consecutive or partially

concurrent to any other sentence.

b) The defendant will not file any motions or pleadings pursuant to 28 U.S.C.

§ 2255 or otherwise collaterally attack the defondanrs conviction(s) or sentence, with two

exceptions: The defendant retains the right to file a§ 2255 motion as to (i) prosecutorial

miscon duct and (ii) ineffective assistance of counsel,

c) The defendant will not, wh ether directly or by a representative, request or

receive from any department or agency of the United States any records pertaining to the

investigation or prosecution of this case, including, without Jim itation, any records that may be

sought under the freedom of Information Act, 5 U.S .C. Section 552, or the Privacy Act of 1974.

5 U.S .C. Section 552a.

13. This plea agreement becQmes effective once it is signed by the parties and is not

contingent on the defendant' s entry of a,guilty plea, If the United States violates the terms of this

plea agreement, the defend ant will have the right to withdraw from thi s agreement. If the defendant

violates the terms of this plea agreement in any way (i ncluding but not limited to foiling to enter

guilty plea as agreed herein. moving to \Vithdraw guilty plea after entry. or by violating any court

order or any local, state or federal law pending the resolution of this cas~n the United States

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\,vill have the right to void any or all pans of the agreement and may also enforce whatever pans of

the agreement it chooses. In addition, the United States may prosecute the defend ant for any and all

federal crimes that the defendant committed related to this case. including any charges that \Vere

dismissed and any other charges which the United States agreed not to pursue. The defendant

expressly waives any statute of limitations defen se and any constitutional or speedy trial or double

_j eopardy defense to such a prosecution . The defendant also understands that a violation of this plea

agreement by the defendant does not entitle the defendant to withdraw the defendant's guilty plea in

this case.

14. The United Stales will fil a supplemem in this case. as required in every case by the

Local Rules of the United States District Court !'or the Eastern District of Tennessee,' even though

there may or may not be any additional te rms. If ad ditional terms are included in the supplement.

they are hereby fully incorporated herein.

15. This plea agreement and supplement constitute the full and complete agreement and

understanding between the parties concerning the defendant ·s guilty plea to the above-referenced

charge, and there are no other agreements. promises. undertakings. or understandings between the

defendan t and the;: United States. The parties understand and agree that the terms of this plea

agreement can be modified only in writing signed by all of the parties and that any and all other

promises, representations, and statements whether made before, conternpuus with. or after this

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agreement, are null and void .

FRANCIS WILLIAM HAMILTON IIT
~ STATES AHORNEY

By:
Mac D. Heavener. Ifl
Assistant United States Attorney

-~1il zc
Date /~

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