Indictment — U.S. v. Cisternino

Record facts

U.S. District Court, M.D. Fla. · No. 6:21-cr-00016-WWB-DCI · Doc. 1 · 2021-02-03 · Docket on CourtListener

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UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA MN FEB -3 PMU: §]
ORLANDO DIVISION Gee a
UNITED STATES OF AMERICA BREAST AI
v. CASE NO. 6:21-cr- | -ORL - #8 DCI

18 U.S.C. § 1343
18 U.S.C. § 1028A(a)(1)
DON V. CISTERNINO 18 U.S.C. § 1957
INDICTMENT
The Grand Jury charges:

COUNTS ONE AND TWO
(Wire Fraud)

A. Introduction

At times material to this Indictment:

The Defendant and his Business Operations

1. DON V. CISTERNINO was a resident of the Middle District of
Florida.

2. MagnifiCo, Inc. (“MagnifiCo”) was a State of New York
corporation established in or about May 2014 by CISTERNINO.
CISTERNINO listed himself as MagnifiCo’s president and registered agent.

3. CISTERNINO advertised MagnifiCo as a consulting company.

During 2019 and 2020, MagnifiCo had few or no employees other than
CISTERNINO and his girlfriend, L.Q. For 2019, MagnifiCo did not report
any payroll or wages to federal agencies.

4. On or about April 12, 2020, CISTERNINO opened an account
for MagnifiCo ending in 7809 (“Account -7809”) at Radius Bank, an online
bank headquartered in Boston, MA. At this time CISTERNINO listed a
mailing address for himself in Bradenton, Florida, in the Middle District of
Florida.

The Paycheck Protection Program

5. The United States Small Business Administration (“SBA”) was
an executive-branch agency of the United States government that provided
support to entrepreneurs and small businesses. The mission of the SBA was to
maintain and strengthen the nation’s economy by enabling the establishment
and viability of small businesses and by assisting in the economic recovery of
communities after disasters. As part of this effort, the SBA enabled and
provided for loans through banks, credit unions, and other lenders. These
loans had government-backed guarantees.

6. In March 2020, the Coronavirus Aid, Relief, and Economic
Security Act, or the “CARES Act,” was enacted to provide immediate
assistance to individuals, families, and organizations affected by the COVID-

19 emergency. Among its various provisions, the CARES Act authorized the
SBA to guarantee loans under the Paycheck Protection Program (“PPP”), and
the full principal amount of the loans could qualify for forgiveness.

7. Borrowers were required to use PPP loan proceeds only for
enumerated purposes, including payroll costs, rent and utilities, and mortgage
interest payments. Knowing misuse of PPP funds would subject borrowers to
additional liability, such as charges for fraud.

8. Under the PPP, the maximum loan amount was the lesser of $10
million or an amount calculated using a payroll-based formula specified in the
CARES Act. The payroll-based formula considered the borrower’s total
payroll costs from the preceding twelve months for all domestic employees.
Once an average monthly payroll cost was established, the borrower would
multiply that figure by 2.5 to arrive at a total maximum PPP loan amount.
This payroll-based formula expressly excluded the compensation of an
individual employee in excess of an annual salary of $100,000, prorated as
necessary, and, with limited exceptions, businesses with more than 500
employees did not qualify to obtain PPP loans.

9. To apply for a PPP loan, a potential borrower electronically
submitted an SBA Form 2483 with supporting payroll documentation to a
financial institution that would administer the loan and serve as custodian of

the funds. On the SBA Form 2483, an authorized representative of the
business was required to certify information regarding business operations.
Those certifications included that: (i) the applicant was in operation on
February 15, 2020 and had employees for whom it paid salaries and payroll
taxes or paid independent contractors, as reported on a Form 1099-MISC;; (ii)
current economic uncertainty made the loan request necessary to support the
applicant’s ongoing operations; and (iii) the PPP funds would be used to retain
workers and to maintain payroll or pay other qualifying expenses.

10. Further, when submitting the SBA Form 2483, the authorized
representative certified his understanding that, should the PPP funds be
knowingly used for unauthorized purposes, the United States could hold him
legally liable, including for charges of fraud. The applicant was also required
to certify the truth and accuracy of any information provided on the SBA
Form 2483 and in all supporting documents, including any documents
submitted to verify the applicant’s payroll expenses. Such supporting
documents could include payroll processor records, bank records, wage
records, payroll tax filings with the Internal Revenue Service, or other records
sufficient to demonstrate the qualifying payroll amount.

11. Finally, the applicant was required to certify the following
warning regarding false statements and other criminal penalties:

I understand that knowingly making a false statement to obtain a
guaranteed loan from SBA is punishable under the law, including under
18 U.S.C. §§ 1001 and 3571 by imprisonment of not more than five
years and/or a fine of up to $250,000; under 15 U.S.C. § 645 by
imprisonment of not more than two years and/or a fine of not more
than $5,000; and, if submitted to a federally insured institution, under
18 U.S.C. § 1014 by imprisonment of not more than thirty years and/or
a fine of not more than $1,000,000.

12. PPP loan applications would then be processed by participating
lenders. If a PPP loan application was approved, the participating lender
funded the PPP loan using its own monies, which were 100% guaranteed by
the SBA. Data from the application, including information from 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.

PPP Lender F.H. and Brokers R.A. and O.C.C.

13.  F.H., a financial institution located in the Middle District of
Florida, 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.

14. R.A. and Q.C.C. were New York companies that provided loan
brokerage services to help client businesses obtain financing. R.A. and Q.C.C.
(hereinafter, the “Brokers”) helped clients apply for SBA-guaranteed PPP

loans, including through F.H. (hereinafter, the “LLender’’).
B. The Scheme and Artifice
15. Beginning in or about April 2020, and continuing through in or
about December 2020, in the Middle District of Florida, the Southern District
of New York, and elsewhere, the defendant,
DON V. CISTERNINO,
did knowingly, and with intent to defraud, devise and intend to devise, a
scheme and artifice to defraud, and for obtaining money and property by
means of materially false and fraudulent pretenses, representations, and
promises, the substance of which scheme and artifice is described below.

C. Manner and Means of the Scheme and Artifice

16. The manner and means by which the defendant sought to
accomplish the scheme and artifice to defraud included, among others, the
following:

a. It was part of the scheme and artifice to defraud that the
defendant would and did submit and cause the submission of a false and
fraudulent PPP loan application to the Lender (through the Brokers) on behalf
of MagnifiCo seeking a PPP loan from the SBA.

b. It was further part of the scheme and artifice to defraud that
the defendant would and did falsely and fraudulently certify that the PPP

funds acquired from the requested loan would be used to retain workers,
maintain payroll, or make mortgage interest payments, lease payments, and
utility payments.

Cc. It was further part of the scheme and artifice to defraud that
the defendant would and did falsely and fraudulently certify that MagnifiCo
had 441 employees with an average monthly payroll of $2,880,000.

d. It was further part of the scheme and artifice to defraud that
the defendant would and did submit and cause to be submitted false and
fraudulent supporting documentation to the Lender (through the Brokers),
including, among others, false MagnifiCo bank statements, false MagnifiCo
quarterly Federal tax returns, a false MagnifiCo U.S. Corporation Income Tax
Return, and false 2019 Form W-2s for MagnifiCo’s purported employees,
many of which listed the name and social security numbers of persons who
were not in fact MagnifiCo employees in 2019.

e. It was further part of the scheme and artifice to defraud that
the defendant’s materially false, fraudulent, and misleading representations
and documentation would and did cause the SBA to approve the PPP
application and the SBA to issue approximately $7,210,000 in PPP funds to
the Lender, which the Lender then deposited into Account -7809 under the

defendant’s control.
f. It was further part of the scheme and artifice to defraud that
the defendant would and did use and cause the PPP funds to be used for
unauthorized purposes and for his own personal enrichment, including the
purchase of Lincoln Navigator, Maserati, and Mercedes-Benz vehicles, and an
approximately 12,579 sq. ft. residence in Seminole County, FL.

g. It was further part of the scheme and artifice to defraud that
the defendant would and did misrepresent, hide, and conceal, and cause to be
misrepresented, hidden, and concealed, the purpose of acts performed in
furtherance of the scheme to defraud.

D. Executions of the Scheme and Artifice

17. Onor about the dates set forth below, in the Middle District of

Florida and elsewhere, the defendant,
DON V. CISTERNINO,

for the purpose of executing the aforesaid scheme and artifice to defraud and
for obtaining money and property by means of materially false and fraudulent
pretenses, representations and promises, did knowingly, and with intent to
defraud, transmit and cause to be transmitted by means of wire
communication in interstate and foreign commerce, the following writings,

signs, signals, pictures, and sounds:
Email from Don Cisternino in the Middle District of
Florida to Q.C.C. in the Eastern District of New York with

ONE May 5, 2020 the subject line “Re: Page Two” attaching “MAGNIFICO
INC PPP Application Form”
Wire transfer in the amount of $7,210,000 from F.H.’s
Two May 28, 2020 Capital One N.A. account ending in 5588 into MagnifiCo’s

Radius Bank account ending in 7809, processed using a
server located outside of Florida

All in violation of 18 U.S.C. § 1343.

COUNTS THREE THROUGH FIVE
(Aggravated Identity Theft)

1. The paragraphs of Parts A and C of Counts One and Two of this
Indictment are realleged and incorporated by reference as if fully set forth
herein.

2. On or about May 17, 2020, in the Middle District of Florida, and
elsewhere, the defendant,

DON V. CISTERNINO,
did knowingly transfer, possess and use without lawful authority, a means of
identification of another person, as indicated below, during and in relation to a
felony violation of wire fraud, in violation of 18 U.S.C. § 1343, as charged in
Counts One and Two of this Indictment, knowing that such means of

identification belonged to an actual person:

Count Description
THREE Victim J .S.’s name and Social Security Number
in support of PPP loan application
FOUR Victim J.D.’s name and Social Security Number
in support of PPP loan application
FIVE Victim C.J.’s name and Social Security Number
in support of PPP loan application

In violation of 18 U.S.C. §§ 1028A and 2.

COUNTS SIX THROUGH EIGHT
(Illegal Monetary Transaction)

1. The paragraphs of Parts A and C of Counts One and Two of this

Indictment are realleged and incorporated by reference as if fully set forth

herein.

2. On or about the dates set forth below, in the Middle District of

Florida and elsewhere, the defendant,

DON V. CISTERNINO,

did knowingly engage and attempt to engage in the described monetary

transaction, in and affecting interstate and foreign commerce, in criminally

derived property of a value greater than $10,000, such property having been

derived from specified unlawful activity, that is, wire fraud, in violation of 18

U.S.C. § 1343:

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Count | ORT Pou | Approx. Amount | == Transaction

A draft from MagnifiCo’s Radius
Bank account ending in 7809 toa
SIX May 30, 2020 $89,413.71 dealership in the Middle District of
Florida to purchase a Lincoln
Navigator vehicle

A draft from MagnifiCo’s Radius
Bank account ending in 7809 toa
SEVEN June 22, 2020 $251,436.21 dealership in the Middle District of
Florida to purchase a Mercedes-
Benz vehicle

A wire transfer from MagnifiCo’s
Radius Bank account ending in
7809 to a title company in the
Middle District of Florida to
purchase a residence in Seminole
County, FL

EIGHT July 6, 2020 $3,104,000.00

In violation of 18 U.S.C. §§ 1957 and 2.
FORFEITURE

1. The allegations contained in Counts One, Two, and Six through
Eight are incorporated by reference for the purpose of alleging forfeiture
pursuant to 18 U.S.C. §§ 981(a)(1)(C), 982(a)(1), and 28 U.S.C. § 2461(c).

2. Upon conviction of a violation of 18 U.S.C. § 1343, the
defendant shall forfeit to the United States, pursuant to 18 U.S.C.
§ 981(a)(1)(C) and 28 U.S.C. § 2461(c), any property, real or personal, which
constitutes or is derived from proceeds traceable to the violation.

3. Upon conviction of a violation of 18 U.S.C. § 1957, the

defendant shall forfeit to the United States, pursuant to 18 U.S.C. § 982(a)(1),

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any property, real or personal, involved in such offense, or any property

traceable to such property.

4.

following:

The property to be forfeited includes, but is not limited to, the

an order of forfeiture in the amount of $7,210,000, which
represents the proceeds obtained from the offenses;
approximately $446,580.86 seized from Wells Fargo Bank
account number 1040205207573, held in the name of
Victor A. Cisternino and/or Mary Jo Cisternino;
approximately $439,576.96 seized from TD Bank account
number 7919290655, held in the name of Victor A
Cisternino and/or Mary J Cisternino;

approximately $94,726.07 seized from JP Morgan Chase
Bank account number 650710970, held in the name of
Victor A. Cisternino or Mary J. Cisternino;
approximately $5,000.21 seized from JP Morgan Chase
Bank account number 3838760727, held in the name of

Victor A. Cisternino or Mary J. Cisternino;

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approximately $86,039.88 seized from Citibank account
number 6866323510, held in the name of Denise L Pieck,
ITF Keith Pieck; and

the real property, including all improvements thereon and
appurtenances thereto, located at 3018 Kingfisher Pt.,
Chuluota, FL, titled in the name of Don Cisternino and

Lori Quasky.

5. If any of the property described above, as a result of any act or

omission of the defendant:

a.

b.

cannot be located upon the exercise of due diligence;

has been transferred or sold to, or deposited with, a third
party;

has been placed beyond the jurisdiction of the Court;

has been substantially diminished in value; or

has been commingled with other property which cannot be

divided without difficulty,

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the United States shall be entitled to forfeiture of substitute property under the

provisions of 21 U.S.C § 853(p), as incorporated by 18 U.S.C § 982(b)(1) and
28 U.S.C. § 2461(c).

A TRUE BILL,

Uh GL

Foreperson

MARIA CHAPA LOPEZ
United States Attorney

By: 2 ee
Chauncey A.‘Bratt
Assistant United States Attorney

wy. 1 LBW

Roger B. Handberg
Assistant United States Attorney
Chief, Orlando Division

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FORM OBD-34 Case 6:21-cr-00016-WWB-DCI Document 1 Filed 02/03/21 Page 15 of 15 PagelD 15
APR 1991 No.

UNITED STATES DISTRICT COURT
Middle District of Florida
Orlando Division

THE UNITED STATES OF AMERICA

VS.

DON V. CISTERNINO

INDICTMENT

Violations: 18 U.S.C. § 1343
18 U.S.C. § 1028A(a)(1)
18 U.S.C..§ 1957

A true bill,

Foreperson

Filed in open court this 3rd day of February, 2021

Y Kode —

(
Clerk i,

Bail $

GPO 863 525

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