Factual Resume — U.S. v. Cota

Record facts

U.S. District Court, Northern District of Texas (Fort Worth Division) · No. 4:24-cr-00005-Y · Doc. 21 · 2024-01-31 · Docket on CourtListener

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Case 4:24-cr-00005-Y / Document 21 Filed 01/31/24 Page1of3 PagelD 49

IN THE UNITED STATES DISTRICT COURT Hs
FOR THE NORTHERN DISTRICT OF TEXAS\0# 111; in

BI PRECP CO u yep

YEAR POU TENAG |

FORT WORTH DIVISION | ine
Vv. No uf ou Ca: OO Ys oun ;
MICHAEL COTA

FACTUAL RESUME

I, Plea: The defendant is pleading guilty to Count One of the Information, which
charges Conspiracy to Commit Wire Fraud, in violation of 18 U.S.C. § 371 (18

U.S.C. § 1343).

IL. Penalties: The maximum penalties the Court can impose for Count One include:

a. imprisonment for a period not to exceed 5 years;

b. a fine not to exceed $250,000, or twice any pecuniary gain to the defendant
or loss to the victim(s);

C. a term of supervised release not to exceed 3 years, which may be
mandatory under the law and will follow any term of imprisonment. If the
defendant violates any condition of supervised release, the Court may
revoke such release term and require that the defendant serve any or all of
such term as an additional period of confinement;

d. a mandatory special assessment of $100;

e. restitution to victims or to the community, which may be mandatory under
the law, and which the defendant agrees may include restitution arising
from all relevant conduct;

f, forfeiture; and

g. costs of incarceration and supervision.

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TIL.

IV.

Elements of the Offense: The government must prove the following elements as to

Count One of the Information:

First:

Second:

Third:

That the defendant and at least one other person made an agreement
to commit the crime of wire fraud, in violation of 18 U.S.C. § 1343,
as charged in the Information;

That the defendant knew the unlawful purpose of the agreement and
joined in it willfully, that is, with the intent to further the unlawful
purpose; and

That one of the coconspirators during the existence of the conspiracy
knowingly committed at least one of the overt acts described in the
Information, in order to accomplish some object or purpose of the
conspiracy.

The elements of wire fraud—the object of the offense—are as follows:

First: That a scheme to defraud existed;

Second: That the scheme to defraud employed false material representations
or pretenses;

Third: That the defendant transmitted or caused to be transmitted by way of
wire communications, in interstate or foreign commerce, any
writing, signal, or sound for the purpose of executing such scheme;

Fourth: That the defendant acted with a specific intent to defraud.

Stipulated Facts:

From in or around April 2020 until in or around May 2021, in the Fort
Worth Division of the Northern District of Texas and elsewhere, Michael Cota
agreed and conspired with others known and unknown to commit wire fraud. It
was part of the conspiracy and scheme that Cota, Coconspirator-1, Co-
Conspirator-2, and Coconspirator-3 would knowingly submit applications for
Paycheck Protection Program (“PPP”) loans containing false representations
related to facts material to eligibility for the loans and the amount of the loans.
Cota and his coconspirators submitted these loan applications via interstate wire
from in or around Scottsdale, Arizona to financial institutions headquartered in
Redwood City, California; San Diego, California; San Francisco, California; Fort

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Lee, New Jersey; and Bedford, Texas, in the Northern District of Texas. At least
one of those lenders funded at least one of the PPP loans using reserves sent from
the Federal Reserve to Bank in Cleveland, Ohio to a bank located in Happy,
Texas, in the Northern District of Texas.

It was also part of the conspiracy and scheme that Cota and Coconspirator-
2 falsely represented on a PPP loan application submitted in or around May 2020
the amount of payroll that an entity he operated, Qualytics, paid in 2019 in order
to obtain a PPP loan in the amount of about $62,610. It was also part of the
conspiracy and scheme that Cota, Coconspirator-1, Coconspirator-2, and
Coconspirator-3 falsely represented on PPP loan applications submitted in or
around August 2020 and in or around February 2021 that they earned income and
qualified for the maximum PPP loans available to sole proprietors in order to
obtain PPP loans in the amount of about $20,833 each. It was also part of the
conspiracy that Cota and others known and unknown created false documents to
use in loan applications, including a false bank statement that Cota made and that
a coconspirator submitted in PPP loan applications seeking approximately
$20,006. In total, Cota and his coconspirators obtained at least $125,904 in
fraudulent PPP loans and sought additional loan funds in the amount of at least
$20,006.

In furtherance of the conspiracy, on or around May 15, 2020, in Arizona,
Cota digitally signed the promissory note through which Qualytics obtained a PPP
loan in the amount of $62,610 and sent the note via electronic wire to a lender
located in or around San Diego, California. On or around August 13, 2020, in
Arizona, Cota digitally signed the promissory note through which he obtained a
PPP loan in the amount of about $20,800 and sent the note via electronic wire to a
lender located in or around Fort Lee, New Jersey. On or around February 5, 2021,
Coconspirator-3 digitally signed the application for a PPP loan in the amount of
about $20,833, causing a lender in or around Bedford, Texas, in the Northern
District of Texas, to disburse the loan proceeds to a bank account located outside
the state of Texas.

AGREED AND STIPULATED on this 27th _ day of December , 2023,
MICHAEL COTA LEE STEIN
Defendant Counsel for Defendant

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