Criminal Complaint — United States v. Daniel Dadoun

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U.S. District Court, District of New Jersey · No. 3:25-cr-00215-RK · Doc. 1 · 2023-11-09 · Docket on CourtListener

Summary

The criminal complaint in United States v. Daniel Dadoun, No. 3:25-cr-00215-RK, in the U.S. District Court for the District of New Jersey, filed November 9, 2023 as Document 1. Attachment A charges Counts 1-4, bank fraud, one for each of four PPP loans from three victim-lenders, and Counts 5-6, transacting in criminal proceeds, including a transfer of $2,125,000 on April 23, 2020. Attachment B is the affidavit of Homeland Security Investigations Special Agent James R. Haines, which alleges that Dadoun obtained approximately $3,239,773.43 in PPP loans for DG Distiservices, Seldat Distribution and Seldat Staffing using false employee and payroll figures and false tax documents. The affidavit alleges that he moved the proceeds among accounts he controlled and sought forgiveness with altered bank statements, and that three loans were forgiven and one partially forgiven.

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Case 3:25-cr-00215-RK     Document 1     Filed 11/09/23     Page 1 of 11 PageID: 1

 
ATTACHMENT A 
Counts 1-4 
(Bank Fraud)  
On or about the dates listed below, in the District of New Jersey and elsewhere, 
defendant 
 
DANIEL DADOUN 
 
did knowingly and intentionally execute and attempt to execute a scheme and artifice 
to defraud one or more financial institutions, as defined by 18 U.S.C. § 20, namely, 
Victim-Lender 1, Victim-Lender 2, and Victim-Lender 3, the deposits of which were 
insured by the Federal Deposit Insurance Corporation, and to obtain any of the 
moneys, funds, credits, assets, securities, and other property owned by, and under 
the control of, such financial institution by means of false and fraudulent pretenses, 
representations, and promises, each of which constitutes a separate count in this 
Complaint: 
 
Count PPP Loan 
Approximate 
Dates 
Lender 
Approximate 
Amount 
1 
DG Distiservices 
First Draw PPP 
Loan 
April 2020 to 
September 2021 
Victim-Lender 1 
$464,806 
2 
Seldat 
Distribution PPP 
Loan 
April 2020 to 
September 2021 
Victim-Lender 2 
$2,125,000 
3 
Seldat Staffing 
PPP Loan 
May 2020 to 
September 2021 
Victim-Lender 3 
$185,162.43 
4 
DG Distiservices 
Second Draw PPP 
Loan 
February 2021 to 
August 2022 
Victim-Lender 1 
$464,805 
 
In violation of Title 18, United States Code, Sections 1344 and 2. 
 
 
 
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Counts 5-6 
(Transacting in Criminal Proceeds)  
On or about the dates listed below, in the District of New Jersey and elsewhere, 
defendant  
 
DANIEL DADOUN 
 
knowingly engaged in a monetary transaction by, through, and to a financial 
institution, affecting interstate and foreign commerce, in criminally derived property 
of a greater value than $10,000, such property having been derived from a specified 
unlawful activity, that is bank fraud, as follows: 
 
Count 
Approximate Date 
Transaction 
5 
April 23, 2020 
Transfer of $2,125,000 from the Seldat 
Distribution Bank Account 1 to the 
Seldat Fashion Bank Account  
6 
April 7, 2021 
Transfer of $350,000 from the DG 
Distiservices Bank Account to an account 
at Bank 1 
 
  
In violation of Title 18, United States Code, Sections 1957 and 2. 
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ATTACHMENT B 
 
I, James R. Haines, am a Special Agent of the Department of Homeland 
Security, Homeland Security Investigations. The information contained in the 
complaint is based upon my personal knowledge, as well as information obtained from 
other sources, including: (a) statements made or reported by various witnesses with 
knowledge of relevant facts; (b) my review of publicly available information; and (c) 
my review of evidence, including business records, bank records, and other 
documents. Because this complaint is being submitted for a limited purpose, I have 
not set forth every fact that I know concerning this investigation. Where the contents 
of documents and the actions and statements of others are reported, they are reported 
in substance and in part, except where otherwise indicated. Where I assert that an 
event took place on a particular date, I am asserting that it took place on or about the 
date alleged. 
 
Overview 
1. 
From in or about April 2020 through in or about August 2022, defendant 
DANIEL DADOUN made numerous false statements and misrepresentations to 
fraudulently obtain over $3.2 million in federal COVID-19 emergency relief funds 
meant for distressed small businesses.  DADOUN then diverted the proceeds to his 
own use, transferring funds among bank accounts that he controlled and using the 
funds for other business ventures.  
Background 
Individuals and Entities 
2. 
At all times relevant to this Criminal Complaint: 
a. 
Defendant DANIEL DADOUN resided in New Jersey and 
elsewhere.  Defendant DADOUN was associated with various businesses located in 
New Jersey, including DG Distiservices, LLC, Seldat Distribution, Inc., Seldat 
Staffing, Inc., Seldat Fashion LLC, and 200 S. Pemberton Urban Renewal LLC. 
b. 
DG Distiservices LLC (“DG Distiservices”) was a business with 
operations in Perth Amboy, New Jersey, and elsewhere.  DG Distiservices provided 
staffing services. 
c. 
Seldat Distribution, Inc. (“Seldat Distribution”), Seldat Staffing, 
LLC (“Seldat Staffing”), and Seldat Fashion LLC (“Seldat Fashion”) were businesses 
purportedly located in South Plainfield, New Jersey.   Seldat Distribution provided 
services related to warehousing and third-party logistics. 
d. 
200 South Pemberton Urban Renewal LLC was a business with a 
registered address in Perth Amboy, New Jersey. 200 South Pemberton Urban 
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Renewal LLC was associated with construction of a warehouse in Pemberton, New 
Jersey.  
e. 
Victim-Lender 1 was a financial institution headquartered in 
Charlotte, North Carolina. 
f. 
Victim-Lender 2 was a financial institution headquartered in 
Cherry Hill, New Jersey.  
g. 
Victim-Lender 3 was a financial institution headquartered in 
Sandy, Utah.  
h. 
Bank 1 was a financial institution headquartered in New York, 
New York.  
i. 
Tax Preparer 1 was a business operated by an individual that 
provided tax preparation services. Tax Preparer 1 had business operations in 
Flemington, New Jersey.  
j. 
Defendant DADOUN had ownership and control over a checking 
account at Victim-Lender 1 ending in account number 7052 associated with DG 
Distiservices (the “DG Distiservices Bank Account”). DADOUN and a purported 
business partner, Individual-1, were signatories to this account. 
k. 
Defendant DADOUN had sole ownership and control over certain 
financial accounts at Victim-Lender 2, including a checking account ending in account 
number 7172 associated with Seldat Distribution (the “Seldat Distribution Bank 
Account 1”), a checking account ending in account number 7180 associated with 
Seldat Distribution (“Seldat Distribution Bank Account 2”), and a checking account 
ending in account number 1234 associated with Seldat Fashion (the “Seldat Fashion 
Bank Account”).  
The Paycheck Protection Program 
 
l. 
The Internal Revenue Service (“IRS”) was an agency of the United 
States Department of the Treasury, responsible for administering and enforcing the 
tax laws of the United States.  
m. 
The Social Security Administration (“SSA”) was an agency of the 
United States that administered retirement, disability, survivor, and family benefits.  
n. 
The Paycheck Protection Program (“PPP”) was a COVID-19 
pandemic relief program administered by the Small Business Administration (“SBA”) 
that provided forgivable loans to small businesses for job retention and certain other 
expenses. The PPP permitted participating third-party lenders to approve and 
disburse SBA-backed PPP loans to cover payroll, fixed debts, utilities, rent/mortgage, 
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accounts payable and other bills incurred by qualifying businesses during, and 
resulting from, the COVID-19 pandemic. PPP loans were fully guaranteed by the 
SBA.  
o. 
To obtain a PPP loan, a qualifying business had to submit a PPP 
loan application, which was 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 to obtain the PPP loan, including that the business was in 
operation and either had employees for whom it paid salaries and payroll taxes or 
paid independent contractors. A business applying for a PPP loan was required to 
provide documentation showing its payroll expenses, such as filed federal income tax 
documents.  
p. 
PPP loan applications were electronically submitted or caused to 
be submitted by the borrower and received through SBA servers. Once approved, the 
business received the PPP loan proceeds via an electronic funds transfer from the 
third-party lender to a financial account under the control of the business.  
q. 
The proceeds of a PPP loan could be used for certain specified 
items, such as payroll costs, costs related to the continuation of group health care 
benefits, or mortgage interest payments. The proceeds of a PPP loan were not 
permitted to be used by the borrowers to purchase consumer goods, automobiles, 
personal residences, clothing, jewelry, to pay the borrower’s personal federal income 
taxes, or to fund the borrower’s ordinary day-to-day living expenses unrelated to the 
specified authorized expenses. 
r. 
Victim-Lender 1, Victim-Lender 2, and Victim-Lender 3 were 
third-party participating lenders in the PPP and federally insured financial 
institutions as defined in 18 U.S.C. § 20. 
The Scheme to Defraud 
3. 
From in or around April 2020 through in or around August 2022, in the 
District of New Jersey, and elsewhere, defendant DADOUN applied for and obtained 
several PPP loans, receiving approximately $3,239,773.43 in total from the Victim-
Lenders.  DADOUN’s PPP loan applications included false statements and forged 
supporting documents that falsified, among other things, the number of employees 
and the average monthly payroll for the entity.  Once DADOUN received the PPP 
loan proceeds based on his false representations, he transferred the illicit loan 
proceeds between and among bank accounts that he controlled.  DADOUN sought 
forgiveness of the loans through the Victim-Lenders, and the forgiveness applications 
likewise included false statements and false supporting documents.  As a result of 
the misrepresentations made to the Victim-Lenders, three loans were forgiven and 
one was partially forgiven.  DADOUN has not repaid any of the PPP loan funds.   
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Goal of the Scheme to Defraud 
4. 
The goal of the scheme to defraud was to obtain money from Victim-
Lender 1, Victim-Lender 2, and Victim-Lender 3, by submitting false and fraudulent 
PPP loan applications, and to keep the money without repaying it by submitting false 
and fraudulent PPP loan forgiveness applications to the Victim-Lenders.  
Manner and Means of the Scheme to Defraud 
 
5. 
It was part of the scheme to defraud that: 
DG Distiservices First Draw PPP Loan 
a. 
On or about April 6, 2020, defendant DADOUN submitted and 
caused to be submitted a loan application to Victim-Lender 1 seeking a PPP loan of 
approximately $464,806 on behalf of DG Distiservices (the “DG Distiservices First 
Draw PPP Loan”).  
b. 
The loan application, which was signed by defendant DADOUN, 
falsely stated that DG Distiservices had approximately 100 employees and an 
average monthly payroll of approximately $185,923. In fact, according to IRS and 
SSA records, DG Distiservices had no employees in 2019 and only four employees in 
the first quarter of 2020. According to those records, DG Distiservices paid no wages 
in 2019 and had an average monthly payroll of less than $15,000 in the first quarter 
of 2020. 
c. 
As part of the loan application, defendant DADOUN submitted 
false and fraudulent tax documents, including a false IRS Form 940 for DG 
Distiservices for tax year 2019, and a false IRS Form 941 for DG Distiservices for the 
first quarter of 2020. The false Form 940 stated that DG Distiservices had paid 
approximately $2,156,747 to employees in 2019. This form was never filed with IRS. 
The false Form 941 stated that DG Distiservices had approximately 453 employees 
and paid approximately $1,475,228.15 to employees during the period from January 
1, 2020 to February 15, 2020. This form was also never filed with IRS. 
d. 
Defendant DADOUN signed a promissory note for the loan. In 
reliance on the representations in the loan application, on or about April 28, 2020, 
Victim-Lender 1 disbursed approximately $464,806—the full amount applied for—to 
the DG Distiservices Bank Account. The following day, defendant DADOUN 
transferred approximately $115,000 to a Vietnamese bank account in his name and 
a bank account in Canada. 
e. 
On or about September 2, 2021, defendant DADOUN submitted 
to Victim-Lender 1 an application for forgiveness of the DG Distiservices First Draw 
PPP Loan. As part of the application for loan forgiveness, defendant DADOUN 
submitted to Victim-Lender 1 a falsified lease agreement and altered bank 
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statements. These documents were altered to support false representations made to 
Victim-Lender 1 regarding DG Distiservices. As a result of misrepresentations made 
as part of the loan and forgiveness applications, the loan was forgiven.  
Seldat Distribution PPP Loan 
f. 
On or about April 13, 2020, defendant DADOUN submitted and 
caused to be submitted a loan application to Victim-Lender 2 seeking a PPP loan of 
approximately $2,125,000 on behalf of Seldat Distribution (the “Seldat Distribution 
PPP Loan”).  
g. 
The loan application, which was signed by defendant DADOUN, 
falsely stated that Seldat Distribution had approximately 400 employees and an 
average monthly payroll of approximately $850,000. According to IRS records, 
however, Seldat Distribution had approximately 97 employees during the first 
quarter of 2020 and an average monthly payroll of approximately less than $170,000.  
h. 
As part of the loan application, defendant DADOUN also 
submitted a false IRS Form 941, which stated that Seldat Distribution had 
approximately 263 employees and paid approximately $624,068 in wages from 
January 1, 2020 to February 15, 2020. This document was never filed with IRS. 
i. 
Defendant DADOUN signed a promissory note for the loan. In 
reliance on the representations made in the loan documentation, on or about April 
22, 2020, Victim-Lender 2 disbursed approximately $2,125,000—the full amount 
applied for—to the Seldat Distribution Bank Account 1. The following day, defendant 
DADOUN transferred approximately the full amount of the loan, $2,125,000, to the 
Seldat Fashion Bank Account. Thereafter, on that same day, defendant DADOUN 
transferred approximately $2,100,000 to the Seldat Distribution Bank Account 2, and 
then transferred approximately $2,100,000 from the Seldat Distribution Bank 
Account 2 to the DG Distiservices Bank Account. 
j. 
On or about September 1, 2021, defendant DADOUN submitted 
to Victim-Lender 2 an application for forgiveness of the Seldat Distribution PPP 
Loan. The application stated that Seldat Distribution had 110 employees at the time 
of the forgiveness application. According to IRS documents, however, Seldat 
Distribution had approximately three employees in the first quarter of 2021, and no 
employees for the remainder of 2021.  
k. 
In support of the forgiveness application, defendant DADOUN 
submitted a false bank statement that contained several transactions that were 
altered to support false representations made to Victim-Lender 2 regarding Seldat 
Distribution. As a result of misrepresentations made as part of the loan and 
forgiveness applications, the loan was partially forgiven. 
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Seldat Staffing PPP Loan 
l. 
On or about May 11, 2020, defendant DADOUN submitted and 
caused to be submitted a loan application to Victim-Lender 3 for a PPP loan on behalf 
of Seldat Staffing (the “Seldat Staffing PPP Loan”). The loan application, which was 
signed by defendant DADOUN, falsely stated that defendant DADOUN was not the 
owner of any other business. In fact, defendant DADOUN was an owner of other 
businesses, including Seldat Distribution and DG Distiservices, for which he had also 
applied for PPP funding. 
m. 
On the loan application, defendant DADOUN falsely stated that 
Seldat Staffing had approximately 80 employees and a monthly payroll of 
approximately $74,064.92. According to IRS and SSA records, however, Seldat 
Staffing had no employees and paid no wages between 2018 and 2021. 
n. 
As part of the loan application, defendant DADOUN submitted 
false tax documents, including false IRS Forms 941 that stated that Seldat Staffing 
had employees and paid wages in 2019. DADOUN also submitted a false IRS 
Schedule K-1, an attachment to an IRS Form 1065. The document purported to show 
that Individual-1 was entitled to a 100% share of the profits of Seldat Staffing and 
that Individual-1 received approximately $96,743 in ordinary business income in tax 
year 2019. The document, however, contained a false Social Security number for 
Individual-1 and was never filed with IRS. According to IRS records, Seldat Staffing 
did not report any income for tax year 2019.  These documents were never filed with 
IRS. 
o. 
As part of the loan application, defendant DADOUN submitted 
altered bank statements, similar to the altered bank statements provided to Victim-
Lenders 1 and 2 with respect to the DG Distiservices and Seldat Distribution PPP 
Loans.  
p. 
Defendant DADOUN signed a promissory note for the loan. In 
reliance on the representations made in the loan application, on or about May 27, 
2020, Victim-Lender 3 disbursed approximately $185,162.43—the full amount 
applied for—to the DG Distiservices Bank Account.  
q. 
On or about September 9, 2021, defendant DADOUN submitted 
to Victim-Lender 3 an application for forgiveness of the Seldat Staffing PPP loan. The 
forgiveness application falsely stated that Seldat Staffing had approximately 80 
employees at the time of the loan application and approximately 35 employees at the 
time of the forgiveness application. The forgiveness application also falsely stated 
that Seldat Staffing had payroll costs of approximately $361,585.61 from on or about 
May 26, 2020 to on or about October 30, 2020. According to IRS and SSA records, 
however, Seldat Staffing had no employees and paid no wages in 2020.  As a result of 
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misrepresentations made as part of the loan and forgiveness applications, the loan 
was forgiven. 
DG Distiservices Second Draw PPP Loan 
r. 
On or about February 22, 2021, defendant DADOUN submitted 
and caused to be submitted a loan application to Victim-Lender 1 for a “second draw”1 
PPP loan on behalf of DG Distiservices (the “DG Distiservices Second Draw PPP 
Loan”). The loan application listed Individual-1 as the contact person, but it listed 
defendant DADOUN’s phone number as the contact phone number. The loan 
application listed a false Social Security number for Individual-1 and was purportedly 
signed by Individual-1. 
s. 
The loan application falsely stated that DG Distiservices had 
approximately 150 employees and an average monthly payroll of approximately 
$185,922. IRS and SSA records show, however, that in 2020 and 2021, DG 
Distiservices had a maximum of approximately 63 employees and an average 
monthly payroll of approximately less than $60,000. 
t. 
As part of the loan application, defendant DADOUN submitted a 
false IRS Schedule K-1, similar to the false Schedule K-1 submitted as part of the 
Seldat Staffing PPP Loan application. The document purported to show that 
Individual-1 was entitled to a 100% share of the profits of DG Distiservices and that 
Individual-1 received approximately $96,743 in ordinary business income in tax year 
2019. The document, however, contained a false Social Security number for 
Individual-1 and was never filed with IRS. According to IRS records, DG Distiservices 
did not report any income for tax year 2019. 
u. 
As part of the loan application, defendant DADOUN also 
submitted a falsified letter purportedly signed by Tax Preparer 1 together with 
documents that purported to reflect financial statements for the fourth quarter of 
2019 and 2020 for DG Distiservices. The letter and purported financial statements 
were not prepared by Tax Preparer 1 and did not reflect accurate financial 
information regarding DG Distiservices. 
v. 
Defendant DADOUN signed a promissory note for the loan. In 
reliance on the representations made in the loan application, on or about April 6, 
2021, Victim-Lender 1 disbursed approximately $464,805—the full amount applied 
for—to the DG Distiservices Bank Account.  
 
1 Certain businesses were eligible for a “second draw” PPP loan after receiving an 
initial PPP loan.  Among other things, to qualify for a “second draw” loan the business 
had to demonstrate at least a 25% reduction in gross receipts between comparable 
quarters in 2019 and 2020.  
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w. 
The same day, defendant DADOUN transferred $350,000 to an 
account at Bank 1, and defendant DADOUN transferred approximately $5,000 to a 
Vietnamese bank account in his name.  Two days later, DADOUN transferred 
approximately $70,000 to a bank in Israel. 
x. 
On or about August 26, 2022, defendant DADOUN submitted an 
application to Victim-Lender 1 for forgiveness of the DG Distiservices Second Draw 
PPP Loan. In support of the forgiveness application, defendant DADOUN submitted 
false bank statements that were altered to support false representations made to 
Victim-Lender 1 regarding DG Distiservices.  As a result of misrepresentations made 
as part of the loan and forgiveness applications, the loan was forgiven. 
y. 
The loan proceeds for the two DG Distiservices PPP Loans and 
the Seldat Staffing PPP loan were deposited by the Victim-Lenders directly into the 
DG Distiservices Bank Account. As described above, all but $25,000 of the loan 
proceeds for the Seldat Distribution PPP loan was also transferred—through other 
accounts—to the DG Distiservices Bank Account.  Bank records indicate significant 
spending from the DG Distiservices Bank Account on behalf of 200 South Pemberton 
Urban Renewal, LLC, an entity controlled by DADOUN, for construction of a 
multimillion-dollar warehouse in Pemberton, New Jersey. 
z. 
The total loss to the Victims was approximately $3,239,773.43.   
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