Plea Agreement — U.S. v. Cisternino

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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
UNITED STATES OF AMERICA
V. CASE NO. 6:21-cr-16-WWB-DCI
DON V. CISTERNINO
PLEA AGREEMENT
Pursuant to Fed. R. Crim. P. 11(c), the United States of America, by
Roger B. Handberg, United States Attorney for the Middle District of Florida,
and the defendant, DON V. CISTERNINO, and the attorney for the

defendant, Michael Ryan, Esq., mutually agree as follows:

A.  Particularized Terms

1. Counts Pleading To

The defendant shall enter a plea of guilty to Counts Two, Three,
and Eight of the Indictment. Count Two charges the defendant with wire
fraud, in violation of 18 U.S.C. § 1343. Count Three charges the defendant
with aggravated identity theft, in violation of 18 U.S.C. § 1028A. Count Eight
charges the defendant with illegal monetary transaction, in violation of 18
U.S.C. § 1957.

2. Maximum Penalties
Count Two carries a maximum sentence of 20 years’

imprisonment, a fine of up to $250,000, or twice the gross gain caused by the

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offense, or twice the gross loss caused by the offense, whichever is greater, a
term of supervised release of not more than three years, and a special
assessment of $100. Count Three carries a mandatory sentence of two years’
imprisonment to be served consecutively to any term of imprisonment for any
other count, a maximum fine of $250,000, or twice the gross gain caused by
the offense, or twice the gross loss caused by the offense, whichever is greater,
a term of supervised release of not more than one year, and a special
assessment of $100. Count Eight carries a maximum sentence of 10 years’
imprisonment, a fine of up to $250,000, or twice the gross gain caused by the
offense, or twice the gross loss caused by the offense, whichever is greater, or
twice the amount of the criminally derived property involved in the
transaction, a term of supervised release of not more than three years, and a
special assessment of $100.

3. Elements of the Offenses

The defendant acknowledges understanding the nature and
elements of the offenses with which defendant has been charged and to which
defendant is pleading guilty. The elements of Count Two are:

First: the defendant knowingly devised or participated in a
scheme to defraud someone by using false or fraudulent
pretenses, representations, or promises;

Second: the false pretenses, representations, or promises were
about a material fact;

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hird: the defendant acted with the intent to defraud; and

the defendant transmitted or caused to be transmitted by
wire some communication in interstate commerce to help
carry out the scheme to defraud.

The elements of Count Three are:

First: the defendant knowingly transferred, possessed, or used
another person’s means of identification;

Second: the defendant did so without lawful authority; and

Third: the defendant did so during and in relation to the crime of
wire fraud in violation of 18 U.S.C. § 1343.

The elements of Count Eight are:

First: the defendant knowingly engaged, or attempted to engage,
in a monetary transaction;

Second: the defendant knew the transaction involved property or
funds that were the proceeds of some criminal activity;

Third: the property or funds had a value of more than $10,000;

Fourth: the property or funds were in fact proceeds of the wire
fraud described in the indictment; and

Fifth: the transaction took place in the United States.

4. Counts Dismissed
At the time of sentencing, the remaining counts against the
defendant, Count One and Counts Four through Seven of the Indictment, will

be dismissed pursuant to Fed. R. Crim. P. 11(c)(1)(A).

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5. No Further Charges

If the Court accepts this plea agreement, the United States
Attorney’s Office for the Middle District of Florida agrees not to charge the
defendant with committing any other federal criminal offenses known to the
United States Attorney's Office at the time of the execution of this agreement,
related to the charges giving rise to this plea agreement.

6. Mandatory Restitution to Victim of Offense of Conviction
Pursuant to 18 U.S.C. § 3663A and 18 U.S.C. § 3663(a) and (b),

defendant agrees to make full restitution to the U.S. Small Business
Administration in the amount of $7,210,000.
7. Guidelines Sentence

Pursuant to Fed. R. Crim. P. 11(c)(1)(B), the United States will
recommend to the Court that the defendant be sentenced within the
defendant’s applicable guidelines range as determined by the Court pursuant
to the United States Sentencing Guidelines, as adjusted by any departure the
United States has agreed to recommend in this plea agreement. The parties
understand that such a recommendation is not binding on the Court and that,
if it is not accepted by this Court, neither the United States nor the defendant
will be allowed to withdraw from the plea agreement, and the defendant will

not be allowed to withdraw from the plea of guilty.

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8. Acceptance of Responsibility - Three Levels

At the time of sentencing, and in the event that no adverse
information is received suggesting such a recommendation to be unwarranted,
the United States will recommend to the Court that the defendant receive a
two-level downward adjustment for acceptance of responsibility, pursuant to
USSG § 3E1.1(a). The defendant understands that this recommendation or
request is not binding on the Court, and if not accepted by the Court, the
defendant will not be allowed to withdraw from the plea.

Further, at the time of sentencing, if the defendant's offense level
prior to operation of subsection (a) is level 16 or greater, and if the defendant
complies with the provisions of USSG § 3E1.1(b) and all terms of this Plea
Agreement, including but not limited to, the timely submission of the financial
affidavit referenced in Paragraph B.5., the United States agrees to move
pursuant to USSG § 3E1.1(b) for a downward adjustment of one additional
level. The defendant understands that the determination as to whether the
defendant has qualified for a downward adjustment of a third level for
acceptance of responsibility rests solely with the United States Attorney for the
Middle District of Florida, and the defendant agrees that the defendant cannot
and will not challenge that determination, whether by appeal, collateral attack,

or otherwise.

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9. Forfeiture of Assets

The defendant agrees to forfeit to the United States immediately

and voluntarily any and all assets and property, or portions thereof, subject to

forfeiture, pursuant to 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(1), and 28 U.S.C.

§ 2461(c), whether in the possession or control of the United States, the

defendant or defendant’s nominees. The assets to be forfeited specifically

include, but are not limited to, the following: the $7,210,000 in proceeds the

defendant admits he obtained, as the result of the commission of the wire

fraud scheme to which the defendant is pleading guilty, as well as the funds

from the following bank accounts:

a.

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approximately $446,580.86 seized from Wells Fargo Bank
account #1040205207573, held in the name of Victor A.
Cisternino and/or Mary Jo Cisternino;

approximately $439,576.96 seized from TD Bank account
#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 #650710970, held in the name of Victor A.
Cisternino and/or Mary J. Cisternino;

approximately $5,000.21 seized from JP Morgan Chase
Bank account #3838760727, held in the name of Victor A.
Cisternino and/or Mary J. Cisternino;

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


and the real property located at 3018 Kingfisher Pt., Chuluota, FL, titled in
the name of Don Cisternino and Lori Quasky.! The defendant admits that the
real property was purchased with proceeds he obtained from his wire fraud
scheme and was involved in the money laundering transaction charged in
Count Eight of the Indictment. The defendant further admits that the funds in
the bank accounts are proceeds of his wire fraud scheme that he transferred to
his family members. The net proceeds from the forfeiture and sale of any
specific assets will be credited to and reduce the amount the United States
shall be entitled to forfeit as substitute assets pursuant to 21 U.S.C. § 853(p).

The defendant acknowledges and agrees that (1) the defendant
obtained $7,210,000 as a result of the commission of the wire fraud scheme
and (2) as a result of the acts and omissions of the defendant, the proceeds not
recovered by the United States through the forfeiture of the directly traceable
assets listed herein have been transferred to third parties and cannot be located
by the United States upon the exercise of due diligence. Therefore, the

defendant agrees that, pursuant to 21 U.S.C. § 853(p), the United States is

1 The real property was forfeited in United States v. Real Property Located at
3018 Kingfisher Point., Chuluota, FL 32766, Case No. 2306-Orl-PGB-EJK at
Doc. 23. The defendant admits that he received proper notice of the forfeiture
of the real property, but chose not to file a claim to contest the forfeiture of the

property.

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entitled to forfeit any other property of the defendant (substitute assets), up to
the amount of proceeds the defendant obtained, as the result of the offense(s)
of conviction and, further, the defendant consents to, and agrees not to
oppose, any motion for substitute assets filed by the United States up to the
amount of proceeds obtained from commission of the offense(s) and consents
to the entry of the forfeiture order into the Treasury Offset Program.

The defendant additionally agrees that since the criminal
proceeds have been transferred to third parties and cannot be located by the
United States upon the exercise of due diligence, the preliminary and final
orders of forfeiture should authorize the United States Attorney’s Office to
conduct discovery (including depositions, interrogatories, requests for
production of documents, and the issuance of subpoenas), pursuant to Rule
32.2(b)(3) of the Federal Rules of Criminal Procedure, to help identify, locate,
and forfeit substitute assets.

The defendant agrees that forfeiture of substitute assets as
authorized herein shall not be deemed an alteration of the defendant's
sentence and the United States shall not be limited to the forfeiture of the
substitute assets, if any, specifically listed in this plea agreement.

The defendant agrees and consents to the forfeiture of these

assets pursuant to any federal criminal, civil, judicial or administrative

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forfeiture action. The defendant also agrees to waive all constitutional,
statutory and procedural challenges (including direct appeal, habeas corpus, or
any other means) to any forfeiture carried out in accordance with this Plea
Agreement on any grounds, including that the forfeiture described herein
constitutes an excessive fine, was not properly noticed in the charging
instrument, addressed by the Court at the time of the guilty plea, announced at
sentencing, or incorporated into the judgment.

The defendant admits and agrees that the conduct described in
the Factual Basis below provides a sufficient factual and statutory basis for the
forfeiture of the property sought by the government. Pursuant to Rule
32.2(b)(4), the defendant agrees that the preliminary order of forfeiture will
satisfy the notice requirement and will be final as to the defendant at the time
it is entered. In the event the forfeiture is omitted from the judgment, the
defendant agrees that the forfeiture order may be incorporated into the written
judgment at any time pursuant to Rule 36.

The defendant agrees to take all steps necessary to identify and
locate all property subject to forfeiture (including substitute assets) and to
transfer custody of such property to the United States before the defendant’s
sentencing. To that end, the defendant agrees to make a full and complete

disclosure of all assets over which defendant exercises control, including all

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assets held by nominees, to execute any documents requested by the United
States to obtain from any other parties by lawful means any records of assets
owned by the defendant, and to consent to the release of the defendant’s tax
returns for the previous five years. The defendant agrees to be interviewed by
the government, prior to and after sentencing, regarding such assets and their
connection to criminal conduct. The defendant further agrees to be
polygraphed on the issue of assets, if it is deemed necessary by the United
States. The defendant agrees that Federal Rule of Criminal Procedure 11 and
USSG § 1B1.8 will not protect from forfeiture assets disclosed by the
defendant as part of the defendant’s cooperation.

The defendant agrees to take all steps necessary to assist the
government in obtaining clear title to the forfeitable assets before the
defendant’s sentencing. In addition to providing full and complete
information about forfeitable assets, these steps include, but are not limited to,
the surrender of title, the signing of a consent decree of forfeiture, and signing
of any other documents necessary to effectuate such transfers.

The defendant agrees that, in the event the Court determines that
the defendant has breached this section of the Plea Agreement, the defendant

may be found ineligible for a reduction in the Guidelines calculation for

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acceptance of responsibility and substantial assistance, and may be eligible for

an obstruction of justice enhancement.

Forfeiture of the defendant's assets shall not be treated as
satisfaction of any fine, restitution, cost of imprisonment, or any other penalty
the Court may impose upon the defendant in addition to forfeiture.

The defendant agrees that the forfeiture provisions of this plea
agreement are intended to, and will, survive the defendant, notwithstanding
the abatement of any underlying criminal conviction after the execution of this
agreement. The forfeitability of any particular property pursuant to this
agreement shall be determined as if the defendant had survived, and that
determination shall be binding upon defendant’s heirs, successors and assigns
until the agreed forfeiture, including the forfeiture of any substitute assets, is
final.

10. Removal - Notification

The defendant has been advised and understands that pleading
guilty may have consequences with respect to the defendant’s immigration
status if the defendant is not a citizen of the United States. Under federal law,
the offenses to which defendant is pleading guilty may be a removable offense.
Removal and other immigration consequences are the subject of a separate

proceeding, however, and the defendant understands that no one, including

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the defendant’s attorney or the district court, can predict to a certainty the
effect of the defendant’s conviction on the defendant’s immigration status. The
defendant nevertheless affirms that the defendant wants to plead guilty
regardless of any immigration consequences that may result from the
defendant’s guilty plea, even if the consequence is the defendant’s automatic

removal from the United States following completion of the defendant’s

sentence.
B. Standard Terms and Conditions
1. Restitution, Special Assessment and Fine

The defendant understands and agrees that the Court, in addition
to or in lieu of any other penalty, shall order the defendant to make restitution
to any victim of the offenses, pursuant to 18 U.S.C. § 3663A, for all offenses
described in 18 U.S.C. § 3663A(c)(1); and the Court may order the defendant
to make restitution to any victim of the offenses, pursuant to 18 U.S.C. § 3663,
including restitution as to all counts charged, whether or not the defendant
enters a plea of guilty to such counts, and whether or not such counts are
dismissed pursuant to this agreement. The defendant further understands that
compliance with any restitution payment plan imposed by the Court in no

way precludes the United States from simultaneously pursuing other statutory

remedies for collecting restitution (28 U.S.C. § 3003(b)(2)), including, but not

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limited to, garnishment and execution, pursuant to the Mandatory Victims
Restitution Act, in order to ensure that the defendant’s restitution obligation is
satisfied.

On each count to which a plea of guilty is entered, the Court
shall impose a special assessment pursuant to 18 U.S.C. § 3013. To ensure that
this obligation is satisfied, the Defendant agrees to deliver a cashier's check,
certified check, or money order to the Clerk of the Court in the amount of
$100, payable to “Clerk, U.S. District Court” within ten days of the change of
plea hearing. The defendant understands that this agreement imposes no

limitation as to fine.

2. Supervised Release
The defendant understands that the offenses to which the

defendant is pleading provide for imposition of a term of supervised release
upon release from imprisonment, and that, if the defendant should violate the
conditions of release, the defendant would be subject to a further term of

imprisonment.

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3. Immigratio nsequences of Pleading Guil
The defendant has been advised and understands that, upon
conviction, a defendant who is not a United States citizen may be removed
from the United States, denied citizenship, and denied admission to the

United States in the future.

4. Sentencing Information

The United States reserves its right and obligation to report to the
Court and the United States Probation Office all information concerning the
background, character, and conduct of the defendant, to provide relevant
factual information, including the totality of the defendant's criminal activities,
if any, not limited to the count(s) to which defendant pleads, to respond to
comments made by the defendant or defendant's counsel, and to correct any
misstatements or inaccuracies. The United States further reserves its right to
make any recommendations it deems appropriate regarding the disposition of
this case, subject to any limitations set forth herein, if any.

5. Financial Di es

Pursuant to 18 U.S.C. § 3664(d)(3) and Fed. R. Crim. P.
32(d)(2)(A)(ii), the defendant agrees to complete and submit to the United
States Attorney's Office within 30 days of execution of this agreement an

affidavit reflecting the defendant's financial condition. The defendant promises

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that his financial statement and disclosures will be complete, accurate and
truthful and will include all assets in which he has any interest or over which
the defendant exercises control, directly or indirectly, including those held by
a spouse, dependent, nominee or other third party. The defendant further
agrees to execute any documents requested by the United States needed to
obtain from any third parties any records of assets owned by the defendant,
directly or through a nominee, and, by the execution of this Plea Agreement,
consents to the release of the defendant's tax returns for the previous five
years. The defendant similarly agrees and authorizes the United States
Attorney's Office to provide to, and obtain from, the United States Probation
Office, the financial affidavit, any of the defendant's federal, state, and local
tax returns, bank records and any other financial information concerning the
defendant, for the purpose of making any recommendations to the Court and
for collecting any assessments, fines, restitution, or forfeiture ordered by the
Court. The defendant expressly authorizes the United States Attorney's Office
to obtain current credit reports in order to evaluate the defendant's ability to
satisfy any financial obligation imposed by the Court.
6. Sentencing Recommendations
It is understood by the parties that the Court is neither a party to

nor bound by this agreement. The Court may accept or reject the agreement,

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or defer a decision until it has had an opportunity to consider the presentence
report prepared by the United States Probation Office. The defendant
understands and acknowledges that, although the parties are permitted to
make recommendations and present arguments to the Court, the sentence will
be determined solely by the Court, with the assistance of the United States
Probation Office. Defendant further understands and acknowledges that any
discussions between defendant or defendant's attorney and the attorney or
other agents for the government regarding any recommendations by the
government are not binding on the Court and that, should any
recommendations be rejected, defendant will not be permitted to withdraw
defendant's plea pursuant to this plea agreement. The government expressly
reserves the right to support and defend any decision that the Court may make
with regard to the defendant's sentence, whether or not such decision is
consistent with the government's recommendations contained herein.

a. Defendant’s Waiver of Right to Appeal the Sentence

The defendant agrees that this Court has jurisdiction and

authority to impose any sentence up to the statutory maximum and expressly
waives the right to appeal defendant's sentence on any ground, including the
ground that the Court erred in determining the applicable guidelines range

pursuant to the United States Sentencing Guidelines, except (a) the ground

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that the sentence exceeds the defendant's applicable guidelines range as
determined by the Court pursuant to the United States Sentencing Guidelines;
(b) the ground that the sentence exceeds the statutory maximum penalty; or (c)
the ground that the sentence violates the Eighth Amendment to the
Constitution; provided, however, that if the government exercises its right to
appeal the sentence imposed, as authorized by 18 U.S.C. § 3742(b), then the
defendant is released from his waiver and may appeal the sentence as
authorized by 18 U.S.C. § 3742(a).
8. Middle District of Florida Agreement
It is further understood that this agreement is limited to the
Office of the United States Attorney for the Middle District of Florida and
cannot bind other federal, state, or local prosecuting authorities, although this
office will bring defendant's cooperation, if any, to the attention of other
prosecuting officers or others, if requested.
9. Filing of Agreement
This agreement shall be presented to the Court, in open court or
in camera, in whole or in part, upon a showing of good cause, and filed in this

cause, at the time of defendant's entry of a plea of guilty pursuant hereto.

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10. Voluntariness

The defendant acknowledges that defendant is entering into this
agreement and is pleading guilty freely and voluntarily without reliance upon
any discussions between the attorney for the government and the defendant
and defendant's attorney and without promise of benefit of any kind (other
than the concessions contained herein), and without threats, force,
intimidation, or coercion of any kind. The defendant further acknowledges
defendant's understanding of the nature of the offense or offenses to which
defendant is pleading guilty and the elements thereof, including the penalties
provided by law, and defendant's complete satisfaction with the representation
and advice received from defendant's undersigned counsel (if any). The
defendant also understands that defendant has the right to plead not guilty or
to persist in that plea if it has already been made, and that defendant has the
right to be tried by a jury with the assistance of counsel, the right to confront
and cross-examine the witnesses against defendant, the right against
compulsory self-incrimination, and the right to compulsory process for the
attendance of witnesses to testify in defendant's defense; but, by pleading
guilty, defendant waives or gives up those rights and there will be no trial. The
defendant further understands that if defendant pleads guilty, the Court may

ask defendant questions about the offense or offenses to which defendant

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pleaded, and if defendant answers those questions under oath, on the record,
and in the presence of counsel (if any), defendant's answers may later be used
against defendant in a prosecution for perjury or false statement. The
defendant also understands that defendant will be adjudicated guilty of the
offenses to which defendant has pleaded and, if any of such offenses are
felonies, may thereby be deprived of certain rights, such as the right to vote, to
hold public office, to serve on a jury, or to have possession of firearms.
11. Factual Basis
Defendant is pleading guilty because defendant is in fact guilty.
The defendant certifies that defendant does hereby admit that the facts set
forth in the attached "Factual Basis," which is incorporated herein by
reference, are true, and were this case to go to trial, the United States would be
able to prove those specific facts and others beyond a reasonable doubt.
12. Entire Agreement
This plea agreement constitutes the entire agreement between the
government and the defendant with respect to the aforementioned guilty plea
and no other promises, agreements, or representations exist or have been

made to the defendant or defendant's attorney with regard to such guilty plea.

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13. Certification
The defendant and defendant's counsel certify that this plea
agreement has been read in its entirety by (or has been read to) the defendant

and that defendant fully understands its terms.

DATED this (2 day of _.S¢ ptember , 2022.

ROGER B. HANDBERG

United States Attorney
Hh. V. tks MALK fe
Don V. Cisternino Chauncey A. Bratt
Defendant Assistant United States Attorney
Michael Ryan, Esq. Michael P. Felicetta
Attorney for Defendant Assistant United States Attorney

Chief, Orlando Division

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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
UNITED STATES OF AMERICA

v. CASE NO. 6:21-cr-16-WWB-DCI

DON V. CISTERNINO

PERSONALIZATION OF ELEMENTS

Count Two

First: Did you knowingly devise or participate in a scheme to
defraud the U.S. Government by using false or fraudulent
pretenses, representations, or promises?

Second: Were the false pretenses, representations, or promises
about a material fact?

Third: Did you act with the intent to defraud?

Fourth: Did you cause to be transmitted by wire a communication
in interstate commerce to help carry out the scheme to
defraud, namely a wire transfer in the amount of
$7,210,000 from the Lender’s Capital One N.A. account
into MagnifiCo’s Radius Bank account?

Count Three
First: Did you knowingly transfer, possess, or use another

person’s means of identification, specifically the name and
Social Security Number of J.S.?

Second: Did you do this without lawful authority?

Third: Did you do this during and in relation to the crime of wire
fraud in violation of 18 U.S.C. § 1343?

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Did you knowingly engage, or attempt to engage, in a
monetary transaction, namely the purchase of a residence
in Seminole County, FL?

Did you know that the transaction involved property or
funds that were the proceeds of some criminal activity?

Did the property or funds have a value of more than
$10,000?

Were the property or funds proceeds of the wire fraud
described in the indictment?

Did this transaction take place in the United States?

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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION

UNITED STATES OF AMERICA

V. CASE NO. 6:21-cr-16-WWB-DCI
DON V. CISTERNINO

FACTUAL BASIS

Don Cisternino (‘“‘Cisternino”) fraudulently obtained a $7.2 million
Paycheck Protection Program (“PPP”) loan by falsely claiming that his New
York company, MagnifiCo Inc. (“MagnifiCo”), had 441 employees and an
average monthly payroll of $2.9 million. In fact, MagnifiCo had few, if any,
employees other than Cisternino. In support of his PPP loan application,
Cisternino submitted falsified bank statements, fake tax returns, and 441 fake
Form W-2s for his purported employees. For many of the purported
employees, he used the stolen names and Social Security numbers of identity
theft victims. Cisternino used the fraudulently-obtained PPP loan proceeds to
purchase a 12,579 sq. ft. residence in Chuluota, FL for $3,499,000, as well as

to make other luxury purchases including Maserati, Lincoln Navigator, and

Mercedes vehicles.

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Background Regarding the CARES Act and PPP

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 pandemic.
Among its various provisions, the CARES Act authorized the SBA to
guarantee loans through the Paycheck Protection Program (PPP), under
which the full principal amount of the loans could qualify for forgiveness.

The PPP allowed qualifying small-businesses and other organizations to
receive loans with a maturity of two years and an interest rate of one percent.
Most businesses were ineligible to receive PPP loans unless they had fewer
than 500 employees. PPP loan proceeds had to be used by businesses on
qualifying expenses including payroll costs, interest on mortgages, rent, and
utilities. The PPP allowed the interest and principal on the loan to be forgiven
if businesses spent the proceeds on these qualifying expenses within eight
weeks of receipt and used at least 75 percent of the forgiven amount for
payroll.

Under the PPP, the maximum loan amount a business could obtain was
the lesser of $10 million or an amount calculated using a payroll-based
formula specified in the CARES Act. The payroll-based formula principally

considered the borrower’s aggregate payroll costs from the preceding twelve

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months for all domestic employees. Once an average monthly payroll cost was
established, the borrower multiplied that amount by 2.5 to arrive at the 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.

The PPP Application Process: the SBA Form 2483

To apply for a PPP loan, potential borrowers electronically submitted
an SBA Form 2483 with supporting payroll documentation to a financial
institution that administered the loan and served as custodian of the funds. On
the SBA Form 2483, an authorized representative of the borrower had to
make several certifications about his business operations and related
information. Those certifications included, among others, 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.

Further, when submitting the SBA Form 2483, the authorized

representative had to certify that, should he knowingly use the PPP funds for

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unauthorized purposes, the United States could hold him legally liable,
including for charges of fraud. The applicant also had to certify the truth and
accuracy of any information provided on the SBA Form 2483 and in all
supporting documents. Such supporting documents could include payroll tax
filings with the Internal Revenue Service (“IRS”), such as the Employer’s
Quarterly Federal Tax Return and the “IRS Form 941.”

Finally, the applicant had to certify that he understood that should he
knowingly make false statements on the forms, he was subject to criminal

penalties.

Background regarding MagnifiCo
MagnifiCo was incorporated in the state of New York on May 12,

2014. Cisternino was the founder and registered agent of MagnifiCo.
MagnifiCo’s LinkedIn page provides the company overview as: “Software,
Consulting, Marketing, IT, Tech, Apps, Graphics, Websites, Content, PR,
Social, Talent, Literary, Professional and Personal Services, and more” and
listed its web address as http://magnifico.media. However, at the time that
Cisternino applied for a PPP loan in 2020, that webpage was not functional

and did not contain any information regarding MagnifiCo.

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Cisternino’s Submission of Fraudulent PPP Loan Application for MagnifiCo

The CARES Act was signed into law on March 27, 2020. On or about
April 8, 2020, Cisternino participated in an informational video call during he
learned of the documents he would need to submit to obtain a PPP loan for
his company, including, among other things, his company’s most recent two
months of bank statements and copies of his passport. On April 12, 2020,
Cisternino opened an account number ending in 7809 at Radius Bank in the
name of MagnifiCo.” On May 4, 2020, Cisternino emailed contacts who had
been on the video call, stating that “If there is still funding available, I would
like to apply,” and attaching requested documents. That same day, one of
those contacts referred Cisternino to L.R., a loan broker in New York, whose
job was to help clients obtain loans from various lenders. One of those was a
mortgage lender located in Lake Mary, Florida in the Middle District of
Florida (the “Lender’”).

L.R. helped Cisternino obtain a PPP loan through the Lender. Between
May 5, 2020, and May 11, 2020, to apply for the loan, Cisternino sent, or
caused to be sent, to L.R. a number of false or fraudulent documents which

L.R. forwarded on to the Lender, including the following:

? Cisternino was the sole signatory for this account.

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e A Paycheck Protection Program Borrower Application Form (SBA
Form 2483) dated May 5, 2020, on which Cisternino falsely certified
that MagnifiCo had 441 employees and an average monthly payroll of
$2,880,000. On this form Cisternino confirmed that he was the
Founder, CEO, and 100% owner of MagnifiCo. Cisternino certified in
this application, among other things, that he would use the funds “to
retain workers and maintain payroll or make mortgage interest
payments, lease payments, and utility payments.” He acknowledged
that if the funds were knowingly used for unauthorized purposes “the
federal government may hold me legally liable, such as for charges of
fraud.”

e Wells Fargo Bank Statements for January and February 2020 for a
MagnifiCo business bank account ending in 7533. These statements
falsely purported to show that MagnifiCo made “Payroll” withdrawals
of $720,000 every week. In fact, this document had been forged and
falsified by Cisternino. Wells Fargo has confirmed that this account
number does not exist, and there are inconsistencies in one of the
statements that also show that the bank statements were fraudulent.

e Form 941 Employer’s Quarterly Federal Tax Returns for MagnifiCo
signed by Cisternino for each of the four 2019 tax quarters. Each of
these four quarterly tax returns stated that MagnifiCo paid exactly
$9,360,000 in wages (e.g. $720,000 x 13 weeks) for the quarter in
question, and had withheld exactly $561,602.25 of those wages as the
employees’ wage withholdings for that quarter. In fact, these documents
were fake, and MagnifiCo had not filed any Form 941s for 2019.

e Form 1120 U.S. Corporation Income Tax Return for MagnifiCo for
2019 signed by Cisternino. According to this purported return,
MagnifiCo paid $37,440,000 in wages during 2019 (i.e. 9,360,000 x 4)
and earned $44.9 million in gross receipts and sales. In fact, this
document was fake, and MagnifiCo did not file any Form 1120 for
2019.

On May 11, 2020, Cisternino also provided a direct deposit form

requesting that the deposit of the loan proceeds be made into the Radius bank

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account ending in 7809 that he had opened the month prior after learning
about the PPP loan requirements.

Later, on May 11, 2020, after receiving the above documents, the loan
underwriter for the Lender sent the following message to L.R.: “I need to
verify that no one made more than $100k in 2019 so I need W-2 forms for
each employee or a detailed payroll summary that shows all the employees’
salaries. That’s what I need to submit this one.” That same day, L.R. sent
Cisternino the following message: “[The Lender] will need to verify that no
one made more than $100k in 2019 so the last item they are asking for at this
time is either the W-2 forms for each employee or a detailed payroll summary
that shows all the employees’ salaries.”

After nearly a weeklong delay, on the evening of May 17, 2020,
Cisternino had his girlfriend send an email to L.R. attaching a file prepared by
Cisternino containing 441 falsified W-2s for purported MagnifiCo employees.
L.R. forwarded this email and the 441 W-2s to the Lender’s underwriter. On
May 18, 2020, after receiving the W-2s, the Lender’s underwriter emailed L.R.
asking, “I reviewed the 2019 941 forms and W-2 and noticed that all four 941
forms have the exact same amount. Also, about 86 employees made $90,000
and over 200 employees made $85,000. Were these amounts rounded or are

these the exact amounts/salaries employees received in 2019? I’m specifically

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asking these questions since the SBA will audit this file due to the size of this
deal.” L.R. conveyed this question to Cisternino and his girlfriend. Cisternino
responded the next day with a lengthy email attempting to justify the salary
amounts. In this email, he stated “The short answer to these questions is that
1) we didn’t have any changes in terms of personnel last year, so the 941’s
show the same amount for each quarter, and 2) Those are the correct
employee salaries on the W-2’s. Nothing has been rounded.” L.R. conveyed
Cisternino’s response to the underwriter on May 19, 2020, and later that day,
the underwriter responded “Thanks. The deal was approved by the SBA.
Approval # is 83216674-04.”

On May 27, 2020, Cisternino and the Lender signed the closing
paperwork for the loan, on which Cisternino certified that the loan amount of
$7,210,000 would be used for the “Paycheck Protection Program,” and on
which he again acknowledged that he would be subject to criminal charges if
he had submitted false information to the Government.

Emails sent by Cisternino show that he was living (and working from
home) in Bradenton, FL, in the Middle District of Florida, at the time that he

applied for the PPP loan.

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Disbursement and Use of Funds
On May 28, 2020, the loan proceeds in the amount of $7,210,000 were

wired from the Lender’s account at Capital One N.A. ending in 5588, into
MagnifiCo’s Radius Bank account ending in 7809, for which Cisternino was
the sole authorized signatory. Prior to this deposit, the account balance of

MagnifiCo’s Radius bank account was $89.44.

At the time of the deposit, Radius Bank sent a “Wire Transfer of Funds
Notice” for the $7.2 million transfer to Cisternino’s residence in Bradenton,
FL. An analysis of the records for the Radius Bank account ending in 7809
shows that Cisternino did not use the $7.2 million in PPP loan proceeds to
make payroll payments to the individuals listed on the Form W-2s supplied by
Cisternino. Nor were any of these funds sent to any payroll companies or used
for rent or utilities. Instead, most of the funds were used by Cisternino on
luxury items or to make payments to his girlfriend or family members,
including the following:

e Check dated May 30, 2020, signed by Cisternino, for $89,413.71

to a Lincoln dealership in the Middle District of Florida with
“Don Cisternino Lincoln Navigator” in the memo line;

e Debit card purchase dated June 1, 2020 for $361.74 at Capital
Grille in Sarasota, FL;

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e Check dated June 9, 2020, signed by Cisternino, for
$1,440,000.00 Cisternino’s father;*

* Check dated June 22, 2020, signed by Cisternino, for $251,436.21
to a Mercedes-Benz dealership in the Middle District of Florida;*

& Check dated June 25, 2020, signed by Cisternino, for $48,477.26
to an auto finance company with “Maserati Payoff: Acct #
0011070037” in the memo line;

€ Check dated June 28, 2020, signed by Cisternino, for $7,122.31
to his girlfriend;

e Wire transfer dated June 29, 2020 for $200,000 to a title
company. The wire notes state that this was a deposit for “3018
Kingfisher Pt., Chuluota, FL 32766”;

® Check dated June 30, 2020, signed by Cisternino, for $7,473.38
made payable to an auto company and with “Payoff for Nissan
for [Cisternino’s girlfriend]” in the memo line; and

3 Those funds were initially deposited into Wells Fargo Bank account
#1040205207573, held in the name of Victor A. Cisternino and/or Mary Jo
Cisternino. Thereafter, in July 2020, $550,000 of those funds were transferred
to TD Bank Account #7919290655 held in the name of Victor A Cisternino
and/or Mary J Cisternino. In August 2020, $100,000 of the $1,440,000 was
“split-deposited” into JP Morgan Chase Bank Account #650710970 held in
the name of Victor A. Cisternino and/or Mary J. Cisternino ($95,000) and JP
Morgan Chase Bank Account #3838760727 held in the name of Victor A.
Cisternino and/or Mary J. Cisternino ($5,000). The defendant’s parents
ultimately transferred $86,039.88 in fraud proceeds from TD Bank Account
#7919290655 to the defendant’s sister’s account - Citibank Account Number
6866323510 held in the name of Denise L Pieck ITF Keith Pieck. The fraud
proceeds remaining in these accounts were ultimately seized by the IRS.

‘ Cisternino subsequently had a Mercedes Benz S650X (which has a base
MSRP of $202,550) registered in his name with the State of Florida.

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e Wire transfer dated July 6, 2020 for $3.1 million described as
“Balance of Purchase Price for 3018 Kingfisher Pt. Chuluota, FL
32766 from Don Cisternino, CEO Magnifico Inc.”
On July 7, 2020, Cisternino completed the purchase of 3018 Kingfisher
Pt., Chuluota, FL for a total price of $3,499,000, and no mortgage was filed
against the property. The entire purchase price was funded using proceeds
from Cisternino’s fraudulently-obtained PPP loan. The Kingfisher Pt. property

sits on twelve plus acres, and is approximately 12,579 square feet in size, with

7 bedrooms, 11 bathrooms, a 4-car garage, a theater room, a “resort style”

pool and spa area, tennis courts, and a 5-stall horse barn:

33
Defendant’s Initials DC _


palin Y RD. Sa
Sera ii \ fem. ans

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Defendant’s Initials vc


W-2 Analysis and Interviews of Purported Employees

An analysis of the 441 Form W-2s submitted by Cisternino in support of
his loan application showed the following:

e 132 of the Form W-2s listed Social Security numbers that were never
issued to any individual;

e 150 of the Form W-2s listed Social Security numbers that belong to an
individual other than the person listed on the Form W-2; and

e 158 of the Form W-2s listed Social Security numbers that were issued to
the same individual listed on the Form W-2; however, three of those
individuals were deceased prior to the end of 2019 (two died in 2018
and the third died on March 7, 2019).

IRS special agents interviewed several of the 158 individuals whose
actual names and Social Security numbers were used together on the W-2s,
including J.S., M.B., C.J., J.D., J.M., and B.O. Each of them confirmed that

they had not ever worked for MagnifiCo and that they had not received the

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Defendant’s Initials p C


salary listed for them in the W-2s. Although some of them knew Cisternino,
none of them had authorized Cisternino to use their names and social security
numbers to apply for the PPP loan.
Flight of Cisternino
Between late December 2020 and mid-January 2021, the United States

filed a civil forfeiture action against the Kingfisher Point residence, see
footnote 1, and the IRS obtained seizure warrants for the funds in the

following accounts:

a. $446,580.86 in Wells Fargo Bank account number
1040205207573, held in the names of Victor A. Cisternino
and/or Mary Jo Cisternino;

b. $439,576.96 in TD Bank account number 7919290655, held in
the names of Victor A Cisternino and/or Mary J Cisternino;

c. $94,726.07 in JP Morgan Chase Bank account number
650710970, held in the names of Victor A. Cisternino and/or
Mary J. Cisternino;

d. $5,000.21 in JP Morgan Chase Bank account number
3838760727, held in the names of Victor A. Cisternino
and/or Mary J. Cisternino; and

e. $86,039.88 in Citibank account number 6866323510, held in
the name of Denise L Pieck ITF Keith Pieck,

because the real property was purchased with, and the accounts were funded
with, proceeds from Cisternino’s PPP loan fraud.

On December 29, 2020, law enforcement agents visited the Kingfisher
Pt. residence and found Cisternino and his girlfriend living at the residence.

The law enforcement agents informed Cisternino that a federal court had

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Defendant's Initials UG


authorized them to conduct a check on the condition of the residence and to
inventory its contents. They informed Cisternino of the pending investigation
against him and told him that he was authorized to continue living at the
residence until further notice, but was responsible to maintain the residence in
its current condition. The IRS served a subpoena on Cisternino requiring him
to provide copies of specified MagnifiCo business records by January 29,
2021.

On January 22, 2021, Cisternino fled to Switzerland without producing
any of the requested documents. He was arrested on April 11, 2021, pursuant

to an Interpol Red Notice, as he attempted to enter Croatia from Slovenia by
way of Italy. Cisternimother-eentested his extradition to the United States;-but-
28,2022.
Interstate Nexus

The Lender sent the PPP loan proceeds to Cisternino from its Capital
One N.A. bank account. The servers that Capital One N.A. utilized to send
wire payments were located in Virginia and Oregon. Cisternino received the
funds at his Radius Bank account. Radius Bank utilized servers in
Jacksonville, Florida to receive wire transfers. The wire thus, by necessity,

involved communications across state lines.

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