Factual Basis - US v. Eley

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U.S. District Court, Eastern District of Louisiana · No. 2:23-cr-00085-ILRL-KWR · Doc. 18 · 2023-05-22 · Docket on CourtListener

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Case 2:23-cr-00085-ILRL-KWR Document18- Filed 05/22/23 Page 1of7

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

UNITED STATES OF AMERICA * CRIMINAL NO. 23-85
Vv. * SECTION: “B”
SIEDAH ELEY *
FACTUAL BASIS

The defendant, SIEDAH ELEY (hereinafter, the “defendant” or “ELEY”), has agreed to
plead guilty to Count One of the Bill of Information currently pending against her, charging ELEY
with conspiracy to commit wire fraud, in violation of Title 18, United States Code, Sections 371
and 1343. Should this matter proceed to trial, both the Government and the defendant, SIEDAH
ELEY, do hereby stipulate and agree that the following facts set forth a sufficient factual basis for
the crime to which the defendant is pleading guilty. The Government and the defendant further
stipulate that the Government would have proven, through the introduction of competent testimony
and admissible, tangible exhibits, the following facts beyond a reasonable doubt to support the
allegations in the Bill of Information now pending against the defendant:

Introduction

The government would establish that, at all times material, ELEY was a resident of
Columbia, Maryland. ELEY maintained multiple financial accounts, including one at Stride
Bank.

The Government would further establish that Co-Conspirator 1, Co-Conspirator 2, Co-
Conspirator 3, Co-Conspirator 4, Co-Conspirator 5, Co-Conspirator 6, and Co-Conspirator 7 were

adult friends, relatives, and associates of ELEY.

AUSA 20
Defendant
Defense Counsel \

Case 2:23-cr-00085-ILRL-KWR Document18- Filed 05/22/23 Page 2 of 7

The Government would further establish that 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
its efforts, the SBA provided business loans through banks, credit unions, and other lenders. Those
loans had government backed guarantees.

The Government would further establish that the Coronavirus Aid, Relief, and Economic
Security Act (“CARES Act”) was a federal law enacted in or about March 2020. The CARES Act
provided emergency financial assistance to the millions of Americans suffering the economic
effects of the COVID-19 pandemic. One source of relief provided by the CARES Act was the
authorization of up to $349 billion in forgivable loans to small businesses for job retention and
certain other expenses, through a program referred to as the Paycheck Protection Program (“PPP”).
In or around April 2020, Congress authorized over $300 billion in additional PPP funding. To
obtain a PPP loan, a qualifying business was required 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 in order to be eligible to obtain the PPP loan. In the PPP loan
application, the small business (through its authorized representative) was required to state, among
other things, its: (a) average monthly payroll expenses; and (b) number of employees. These
figures were used to calculate the amount of money the small business was eligible to receive
under the PPP. In addition, businesses applying for a PPP loan were required to provide

documentation showing their payroll expenses.

Page 2 of 7
AUSA ,
Defendant
Defense Counsel
Case 2:23-cr-00085-ILRL-KWR Documenti18_ Filed 05/22/23 Page 3 of 7

The Government would further establish that among the types of businesses eligible for a
PPP loan were individuals who operated under a “sole proprietorship” business structure. To be
eligible to receive such a PPP loan, individuals had to report and document their income and
expenses from the sole proprietorship, as typically reported to the IRS on Form 1040, Schedule C,
for a given tax year. The lending institution or loan processor used this information to calculate
the amount of money the individual was entitled to receive under the PPP. The maximum PPP
loan amount for a sole proprietor with no employees was $20,833.00.

The Government would further establish that a PPP loan application was required to be
processed by a participating lender. 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 about 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. Among the participating lending agencies were “Prestamos CDFI,” “Capital
Plus Financial,” and “Benworth Capital.”

The Government would further establish that PPP loan proceeds were required to be used
by the business on certain permissible expenses—payroll costs, interest on mortgages, rent, and
utilities. The PPP allowed the interest and principal on the PPP loan to be entirely forgiven if the
business spent the loan proceeds on these expense items within a designated period of time after
receiving the proceeds and used a certain amount of the PPP loan proceeds on payroll expenses.

Conspiring to Submit Fraudulent PPP Applications

The Government would establish ELEY used the same strategy to create, generate, and
submit multiple fraudulent PPP loan applications. EKLEY used via word-of-mouth and text

message to solicit individuals interested in obtaining money from the PPP program with her

Page 3 of 7

AusA \®
Defendant
Defense Counsel
Case 2:23-cr-00085-ILRL-KWR Document18- Filed 05/22/23 Page 4 of 7

assistance fraudulently. When someone expressed interest, ELEY requested that she receive the
following information for the applicant: the applicant’s name, address, social security, and phone
number, a copy of the front and back of the applicant’s driver’s license, a bank statement from
2020, and the routing and account number for the applicant’s bank account. ELEY then created
a false and fraudulent loan application. Among the false representations ELEY included in the
pertinent forms was that the applicant had a sole proprietorship in the beauty industry and
generated substantial income from those businesses. ELEY also submitted financial numbers that
overstated the gross receipts, expenses, and net income for the business, which resulted in the
creation of a false federal tax Form 1040, Schedule C by the online portal that accepted and
processed the application. In several instances, where the applicant actually received income in a
de minimis amount from work in the beauty industry, ELEY knowingly inflated the amount of
income falsely. Each of the above-described false representations constituted a misstatement that
was material to the determination of the eligibility of the applicant and the loan amount the
applicant would receive.

The Government would further establish that ELEY prepared and submitted the false and
fraudulent PPP sole proprietor loan applications via the Blueacorn online portal. The submission
of each loan application caused the transmission of wire communications in interstate commerce.
ELEY falsely certified that the applications and the information provided in the supporting
documents were true and accurate when she electronically submitted the fraudulent PPP loan
applications. After an application was accepted, money was disbursed from one of the lending
agencies referenced above to the applicant via electronic means to the account listed on the
application. Once the loan was paid to the applicant, ELEY charged some applicants up to

$5,000.00 for preparing and submitting the fraudulent PPP application. ELEY received the funds

Page 4 of 7
AUSA,;
Defendant 7
Defense Counsel
Case 2:23-cr-00085-ILRL-KWR Document18- Filed 05/22/23 Page 5of7

from the applicable co-conspirator either in cash, after the applicant withdrew cash from his
account, or by electronic means, including the Zelle digital payment network.

The Government would further establish that, in total between about April 19, 2021, and
May 20, 2021, ELEY, Co-Conspirator 1 (Loan number x68700), Co-Conspirator 2 (Loan number
x68704), Co-Conspirator 3 (Loan number x19005), Co-Conspirator 4 (Loan number x58908), Co-
Conspirator 5 (Loan number x98710), Co-Conspirator 6 (Loan number x18808), and Co-
Conspirator 7 (Loan number x18700) defrauded the Small Business Administration (SBA) and
other designated financial institutions of approximately $166,656 through submission of
approximately 8 fraudulent PPP loan applications in the manner described above.

Included among the loans obtained through the above-described fraudulent scheme were
those for ELEY herself and Co-Conspirator 1.

Fraudulent Application for Eley

The Government would further establish that on or about April 23, 2021, ELEY completed
and submitted a false PPP loan application in her own name and on behalf of herself (Loan number
x58704). ELEY submitted the loan application via electronic means, which caused the
transmission of wire communications in interstate commerce. The application contained
numerous material misrepresentations, including a false Form 1040, Schedule C that substantially
overstated her gross receipts, expenses, net income for her business and the purpose for which
ELEY sought the loan. As a result of the fraudulent application, ELEY received approximately
$20,832, via electronic deposit into her Stride Bank account. Thereafter, ELEY sought and

received forgiveness of the loan.

Page 5 of 7
AUSA )
Defendant —_
Defense Counsel A

Case 2:23-cr-00085-ILRL-KWR Documenti18_- Filed 05/22/23 Page 6 of 7

Fraudulent Application for Co-Conspirator 1

The Government would further establish that on or about May 4, 2021, ELEY completed
submitted a false PPP loan applicant in the name of Co-Conspirator | (Loan Number x68700).
ELEY submitted the loan via electronic means, which caused the transmission of wire
communications in interstate commerce. The application contained numerous material
misrepresentations, including a false Form 1040, Schedule C that substantially overstated Co-
Conspirator 1’s gross receipts, expenses, net income for Co-Conspirator 1’s business and the
purpose for which Co-Conspirator 1 sought the loan. As a result of the fraudulent application, Co-
Conspirator 1 received approximately $20,832, via electronic means into Co-Conspirator 1’s
JPMorgan Chase Bank account.

Limited Nature of Factual Basis and Conclusion
This proffer of evidence is not intended to constitute a complete statement of all facts
known by SIEDAH ELEY and the Government. Rather, it is a minimum statement of facts
intended to prove the necessary factual predicate for her guilty plea. The limited purpose of this
proffer is to demonstrate that there exists a sufficient legal basis for the plea of guilty to the

charged offense by SIEDAH ELEY.

Page 6 of 7
AUSA Gb

Defendant %
Defense Counsel_{ AA

Case 2:23-cr-00085-ILRL-KWR Document 18

Filed 05/22/23. Page 7 of 7

The above facts derive from an investigation conducted by, and would be proven at trial

by credible testimony from, Special Agents from the United States Secret Service, as well as other

witnesses, and documents in the possession of the United States Secret Service.

APPROVED AND ACCEPTED:

Orton Cain daar A Wee

JORDAN GINSBERG
Assistant United States Attorney

JOH} MCLINBON
Couns el for Defendant
ALEX LAIRD

Counsel for Defendant

lal

SIEDAH ELEY
Defendant

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