Court filing

Guilty Plea Agreement — United States v. Nikia A. French

Filed March 27, 2023 in U.S. v. French; one of 2 filings from this case.

Record facts

Court	U.S. District Court, E.D. Mo., Eastern Division
Filed	2023-03-27

U.S. District Court, E.D. Mo., Eastern Division · No. 4:22-cr-00591-JAR · Doc. 40 · 2023-03-27 · Docket on CourtListener

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

NIKIA A. FRENCH,

Defendant.
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No. 4:22-CR-00591-JAR

GUILTY PLEA AGREEMENT
Come now the parties and hereby agree, as follows:
1. PARTIES:

The parties are the defendant Nikia A. French, represented by defense counsel Julie Clark,
and the United States of America (hereinafter "United States" or "Government"), represented by
the Office of the United States Attorney for the Eastern District of Missouri. This agreement does
not, and is not intended to, bind any governmental office or agency other than the United States
Attorney for the Eastern District of Missouri. The Court is neither a party to nor bound by this
agreement.
2. GUILTY PLEA:
Pursuant to Rule 11(c)(1)(A), Federal Rules of Criminal Procedure, in exchange for the
defendant’s voluntary plea of guilty to Counts I – II (bank fraud) of the Indictment, the United
States agrees that no further federal prosecution will be brought in this District relating to the
defendant’s participation in the check fraud scheme described in the Indictment between February
2022 and April 2022, of which the Government is aware at this time.
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In addition, the defendant admits to having submitted fraudulent Paycheck Protection
Program (“PPP”) loan applications and agrees that her PPP loan fraud constitutes relevant conduct
under the U.S. Sentencing Guidelines. In exchange, the United States agrees that no further federal
prosecution will be brought in this District relating to the defendant’s fraudulently obtaining two
PPP loans between April 2021 and May 2021, of which the Government is aware at this time.
The parties agree that the U.S. Sentencing Guidelines Total Offense Level analysis agreed
to by the parties herein is the result of negotiation and led, in part, to the guilty plea. The parties
further agree that either party may request a sentence above or below the U.S. Sentencing
Guidelines range (combination of Total Offense Level and Criminal History Category) ultimately
determined by the Court pursuant to any chapter of the Guidelines and Title 18, United States
Code, Section 3553(a). The parties further agree that notice of any such request will be given no
later than ten days prior to sentencing and that said notice shall specify the legal and factual bases
for the request.
The defendant also agrees, pursuant to the guilty plea to Counts I – II, to forfeit to the
United States all property subject to forfeiture under the applicable statute(s), including but not
limited to: any and all funds obtained as a result of the defendant’s check fraud scheme.
3. ELEMENTS:
a. Count I – II (Bank Fraud)
As to Count I through II, the defendant admits to knowingly violating Title 18, United
States Code, Section 1344(2), and admits there is a factual basis for the plea and further fully
understands that the elements of the crime are:
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One, the defendant knowingly executed a scheme to obtain any of the moneys owned by,
or under the custody and control of, a financial institution, by means of material false or fraudulent
pretenses, representations, or promises; and
Two, the financial institution was insured by the Federal Deposit Insurance Corporation.
4. FACTS:
The parties agree that the facts in this case are as follows and that the government would
prove these facts beyond a reasonable doubt if the case were to go to trial. These facts may be
considered as relevant conduct pursuant to Section 1B1.3:
a. Bank Fraud
Beginning no later than in or about February 2022, and continuing through at least in or
about April 2022, in the Eastern District of Missouri, the defendant Nikia A. French executed a
scheme to obtain money owned by or under the custody and control of a financial institution, by
means of materially false and fraudulent pretenses, representations, and promises.
More specifically, French participated in a scheme to obtain money from Commerce Bank
by fraudulently depositing counterfeit checks into various Commerce Bank accounts and
withdrawing the check funds as proceeds. As part of the scheme, French recruited individuals
with Commerce Bank accounts to allow their accounts to be used for the deposit of counterfeit
checks. Account holders provided debit cards, Personal Identification Numbers (“PINs”), and
other banking information for their Commerce Bank accounts to French, often in exchange for a
portion of the proceeds from the deposit of the counterfeit checks. French recruited account
holders using her social media accounts, specifically Instagram, and directly communicated with
account holders about the deposit of counterfeit checks into their accounts. Other participants in
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the scheme also recruited account holders on French’s behalf and acted as an intermediary between
French and the account holders. The account holders whose Commerce bank accounts French
used as part of the scheme included Individuals L.P., M.J., E.M., T.B., A.T., K.W., C.P., and R.W.
As part of the scheme, French obtained counterfeit checks and caused the checks to be
made payable to the account holders and in amounts typically around $5,000. The accounts on
which the checks were drawn were real accounts and belonged to real victims. French knew that
the checks were counterfeit and that the victims on whose accounts the checks were drawn had not
authorized the checks. French often deposited or caused the deposit of multiple counterfeit checks
drawn on the same victim’s account. During the scheme, French deposited or caused the deposit
of counterfeit checks drawn on the accounts at least five different business victims.
As part of the scheme, French deposited counterfeit checks, or directed other participants
in the scheme to deposit the checks, into the account holders’ Commerce Bank accounts using the
debit cards and PINs provided by the account holders. French deposited these checks for the
purpose of inflating the balances in these accounts. These deposits occurred at Commerce Bank
ATMs in St. Louis County, Missouri and were captured on ATM surveillance cameras. Prior to a
deposit, French often conducted in-person inquiries at Commerce Bank ATMs, using the account
holder’s debit card, to determine whether the account was active and the account balance. After a
counterfeit check was deposited, French monitored the account holder’s Commerce Bank account
in order to withdraw funds as soon as possible after the bank made them available and before the
bank discovered that the check was fraudulent. French also contacted Commerce Bank customer
service over the phone and pretended to be the account holder to verify the check deposit, using
the account information provided by the account holder. Once Commerce Bank made funds
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available, French withdrew the proceeds, typically through cash withdrawals at ATMs or by
making purchases using the account holder’s debit card.
As to Count I, on February 15, 2022, French executed the scheme by causing the deposit
of a counterfeit check, bearing #3802 and purportedly drawn on Investors Bank account
#xxxxx6329 belonging to Business Victim S.M.M., and payable to Individual L.P. in the amount
of $4,698.07, into the Commerce Bank account #xxxxx0359 in the name of Individual L.P., for
the purpose of obtaining money under the custody and control of Commerce Bank, a financial
institution within the meaning of Title 18, United States Code, Section 20. French directed another
participant in the scheme to conduct the deposit of this check at the Commerce Bank branch in
Affton, Missouri.
As to Count II, on February 15, 2022, French executed the scheme by withdrawing $1,000
from Commerce Bank account #xxxxx0359 in the name of Individual L.P. at a Commerce Bank
ATM at the Affton branch, following the deposit of a counterfeit check into the account earlier
that day, for the purpose of obtaining money under the custody and control of Commerce Bank, a
financial institution within the meaning of Title 18, United States Code, Section 20.
Over the course of the scheme, between February 2022 and April 2022, French caused the
deposit or attempted deposit of counterfeit checks totaling at least $73,515.22 and received at least
$34,109.66 in proceeds.
b. Other Relevant Conduct: PPP Loan Fraud
Between in or around April 2021, and in or around May 2021, the defendant Nikia A.
French engaged in a scheme to fraudulently obtain PPP loans.
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On March 13, 2020, the President declared a national emergency under Section 501(b) of
the Robert T. Stafford Disaster Relief and Emergency Assistance Act (“Stafford Act”) in response
to the COVID-19 pandemic. The President also subsequently authorized major disaster
declarations for all fifty states under Section 401 of the Stafford Act. The PPP, created by the
Coronavirus, Aid, Relief, and Economic Security (“CARES”) Act, 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. PPP loan funds
were authorized, transmitted, disbursed, and paid in connection with the COVID-19 Stafford Act
emergency and major disaster declarations.
The PPP permitted participating third-party lenders to approve and disburse SBA-backed
PPP loans. The types of businesses eligible for a PPP loan included individuals who were self-
employed and who did not have any employees. To obtain a PPP loan, a qualifying self-employed
individual submitted a signed PPP loan application and was required to certify, among other things,
the annual income of his or her business, as typically reported to the Internal Revenue Service on
Form 1040, Schedule C, for a given tax year. The amount of PPP loan for which a qualifying
individual was eligible was based on these certifications. An applicant also had to certify that the
applicant had not been convicted of or pleaded guilty to “any felony involving fraud, bribery,
embezzlement, or a false statement in a loan application or an application for federal financial
assistance” within the last five years, and that the PPP loan proceeds would be used for eligible
expenses, namely payroll. Borrowers who obtained a PPP loan were permitted to apply for a
“Second Draw” PPP loan, provided they certified that they had used the proceeds from the “First
Draw” PPP loan on eligible expenses.
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Fountainhead SBF (“Fountainhead”) was a third-party participating PPP lender. Womply
was a technology company that provided an Internet-based platform to receive and process PPP
loan applications for, among other PPP lenders, Fountainhead. Womply processed applications
for PPP loans submitted to Fountainhead through an Internet-based web portal that was hosted on
servers located in Virginia and Oregon.
On or about May 18, 2020, in the United States District Court for the Eastern District of
Missouri, in United States v. Nikia French, Case No. 4:19-CR-01035-AGF, French pleaded guilty
to six counts of Bank Fraud and was sentenced, on or about August 19, 2020, to a term of
imprisonment of 12 months and one day.
As part of the scheme, French submitted two fraudulent PPP loan applications, each for
approximately $11,532, as a self-employed individual to Fountainhead. French submitted the first
application on April 2, 2021, and the second on April 14, 2021. On both PPP loan applications,
French misrepresented her gross income in order to inflate the amount of PPP loan she could
receive. Specifically, French falsely represented that her gross income in 2020, as reported on IRS
Form 1040, Schedule C, was $55,356. In support of this misrepresentation, French submitted with
both PPP loan applications a fraudulent IRS Form 1040, Schedule C (Profit or Loss from
Business), that purported to have been filed by French in 2020. French falsified this Schedule C
and fabricated her gross income. French also falsely certified that she had not been convicted of
or pleaded guilty to any felony involving fraud within the past five years, despite having been
sentenced for bank fraud less than a year earlier. Based on the fraudulent misrepresentations in
her PPP loan applications, French caused Fountainhead to approve the applications and to disburse
the loan funds into French’s bank account. French did not spend the PPP loan proceeds on
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authorized expenses and instead used the money to pay for personal expenditures, such as at
clothing stores and restaurants, and for cash withdrawals.
In total, between April 2021 and May 2021, French submitted two fraudulent PPP loan
applications containing material misrepresentations. As a result of these fraudulent applications,
French fraudulently obtained $23,064 in PPP loan proceeds.
5. STATUTORY PENALTIES:
The defendant fully understands that the maximum possible penalty provided by law for
the crime to which the defendant is pleading guilty under Counts I though II is imprisonment of
not more than 30 years, a fine of not more than $1,000,000, or both such imprisonment and fine.
The Court may also impose a period of supervised release of not more than 5 years.
6. U.S. SENTENCING GUIDELINES (2021 MANUAL):
The defendant understands that this offense is affected by the U.S. Sentencing Guidelines
and the actual sentencing range is determined by both the Total Offense Level and the Criminal
History Category. The parties agree that the following are the applicable U.S. Sentencing
Guidelines Total Offense Level provisions.
a. Chapter 2 Offense Conduct:

(1) Base Offense Level: The parties agree that the base offense level is 7, as found
in Section 2B1.1(a)(1).

(2) Specific Offense Characteristics: The parties agree that the following Specific
Offense Characteristics apply:

The parties agree that 8 levels should be added pursuant to Section 2B1.1(b)(1)(E), because
the loss exceeds $95,000, but does not exceed $150,000.
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The parties agree that 2 levels should be added pursuant to Section 2B1.1(b)(12), because
the offense involved conduct described in 18 U.S.C. § 1040.
b. Chapter 3 Adjustments:

(1) Aggravating Role: The parties agree that 3 levels should added pursuant to
Section 3B1.1(b), because the defendant was a manager or supervisor and the criminal activity
involved five or more participants.
(2) Acceptance of Responsibility: The parties agree that 3 levels should be
deducted pursuant to Section 3E1.1(a) and (b), because the defendant has clearly demonstrated
acceptance of responsibility and timely notified the government of the defendant’s intention to
plead guilty. The parties agree that the defendant's eligibility for this deduction is based upon
information presently known. If subsequent to the taking of the guilty plea the government
receives new evidence of statements or conduct by the defendant which it believes are inconsistent
with defendant's eligibility for this deduction, the government may present said evidence to the
court, and argue that the defendant should not receive all or part of the deduction pursuant to
Section 3E1.1, without violating the plea agreement.
c. Estimated Total Offense Level: The parties estimate that the Total Offense Level is
17.

d. Criminal History: The determination of the defendant's Criminal History Category
shall be left to the Court. Either party may challenge, before and at sentencing, the finding of the
Presentence Report as to the defendant's criminal history and the applicable category. The
defendant's criminal history is known to the defendant and is substantially available in the Pretrial
Services Report.
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e. Effect of Parties' U.S. Sentencing Guidelines Analysis: The parties agree that the
Court is not bound by the Guidelines analysis agreed to herein. The parties may not have foreseen
all applicable Guidelines. The Court may, in its discretion, apply or not apply any Guideline
despite the agreement herein and the parties shall not be permitted to withdraw from the plea
agreement.
7. WAIVER OF APPEAL AND POST-CONVICTION RIGHTS:

a. Appeal: The defendant has been fully apprised by defense counsel of the defendant's
rights concerning appeal and fully understands the right to appeal the sentence under Title 18,
United States Code, Section 3742.

(1) Non-Sentencing Issues: The parties waive all rights to appeal all non-
jurisdictional, non-sentencing issues, including, but not limited to, any issues relating to pretrial
motions, discovery, the guilty plea, the constitutionality of the statute(s) to which defendant is
pleading guilty and whether defendant’s conduct falls within the scope of the statute(s).

(2) Sentencing Issues: In the event the Court accepts the plea, accepts the U.S.
Sentencing Guidelines Total Offense Level agreed to herein, and, after determining a Sentencing
Guidelines range, sentences the defendant within or below that range, then, as part of this
agreement, the defendant hereby waives all rights to appeal all sentencing issues other than
Criminal History, but only if it affects the Base Offense Level or Criminal History Category.
Similarly, the Government hereby waives all rights to appeal all sentencing issues other than
Criminal History, provided the Court accepts the plea and the agreed Total Offense Level and
sentences the defendant within or above that range.
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b. Habeas Corpus: The defendant agrees to waive all rights to contest the conviction or
sentence in any post-conviction proceeding, including one pursuant to Title 28, United States
Code, Section 2255, except for claims of prosecutorial misconduct or ineffective assistance of
counsel.

c. Right to Records: The defendant waives all rights, whether asserted directly or by a
representative, to request from any department or agency of the United States any records
pertaining to the investigation or prosecution of this case, including any records that may be sought
under the Freedom of Information Act, Title 5, United States Code, Section 522, or the Privacy
Act, Title 5, United States Code, Section 552(a).
8. OTHER:

a. Disclosures Required by the United States Probation Office: The defendant agrees
to truthfully complete and sign forms as required by the United States Probation Office prior to
sentencing and consents to the release of these forms and any supporting documentation by the
United States Probation Office to the government.
b. Civil or Administrative Actions not Barred; Effect on Other Governmental
Agencies: Nothing contained herein limits the rights and authority of the United States to take
any civil, tax, immigration/deportation or administrative action against the defendant.

c. Supervised Release: Pursuant to any supervised release term, the Court will impose
standard conditions upon the defendant and may impose special conditions related to the crime
defendant committed. These conditions will be restrictions on the defendant to which the
defendant will be required to adhere. Violation of the conditions of supervised release resulting
in revocation may require the defendant to serve a term of imprisonment equal to the length of the
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term of supervised release, but not greater than the term set forth in Title 18, United States Code,
Section 3583(e)(3), without credit for the time served after release. The defendant understands
that parole has been abolished.

d. Mandatory Special Assessment: Pursuant to Title 18, United States Code, Section
3013, the Court is required to impose a mandatory special assessment of $100 per count for a total
of $400, which the defendant agrees to pay at the time of sentencing. Money paid by the defendant
toward any restitution or fine imposed by the Court shall be first used to pay any unpaid mandatory
special assessment.

e. Possibility of Detention: The defendant may be subject to immediate detention
pursuant to the provisions of Title 18, United States Code, Section 3143.

f. Fines, Restitution and Costs of Incarceration and Supervision: The Court may
impose a fine, restitution (in addition to any penalty authorized by law), costs of incarceration and
costs of supervision. The defendant agrees that any fine or restitution imposed by the Court will
be due and payable immediately. Pursuant to Title 18, United States Code, Section 3663A, an
order of restitution is mandatory for all crimes listed in Section 3663A(c). Regardless of the Count
of conviction, the amount of mandatory restitution imposed shall include all amounts allowed by
Section 3663A(b) and the amount of loss determined by the Court, including all relevant conduct
loss. The defendant agrees to provide full restitution to all victims of all charges in the indictment.
g. Forfeiture: The defendant knowingly and voluntarily waives any right, title, and
interest in all items seized by law enforcement officials during the course of their investigation,
whether or not they are subject to forfeiture, and agrees not to contest the vesting of title of such
items in the United States. The defendant agrees to abandon her interest in all seized items and
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further agrees that said items may be disposed of or destroyed by law enforcement officials in any
manner without further notice. By abandoning these items, the defendant waives any future rights
to receive additional notice, a valuation of the items, or the opportunity to submit a claim to contest
the disposition or destruction of the items that may exist under any policies or procedures of the
seizing agency(ies).
The defendant agrees the stipulated facts above are sufficient to support forfeiture of certain
assets pursuant to the applicable forfeiture authorities. Defendant agrees to the entry of a forfeiture
money judgment against the defendant and in favor of the Government in the amount of
$34,109.66. The defendant agrees the Court may enter a consent preliminary order of forfeiture
any time before sentencing, and such Order will become final as to the defendant when it is issued
and will be part of the sentence. The defendant agrees not to object to any administrative, civil, or
criminal forfeiture brought against any assets subject to forfeiture. The defendant will execute any
documents and take all steps needed to transfer title or ownership of said assets to the government
and/or to rebut the claims of nominees and/or alleged third party owners. The defendant
knowingly and intelligently waives all constitutional, statutory, and equitable challenges to any
forfeiture carried out in accordance with this plea agreement, including but not limited to that
defendant was not given adequate notice of forfeiture in the charging instrument.
9. ACKNOWLEDGMENT AND WAIVER OF THE DEFENDANT'S RIGHTS:
In pleading guilty, the defendant acknowledges, fully understands and hereby waives his
rights, including but not limited to: the right to plead not guilty to the charges; the right to be tried
by a jury in a public and speedy trial; the right to file pretrial motions, including motions to
suppress or exclude evidence; the right at such trial to a presumption of innocence; the right to
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require the government to prove the elements of the offenses against the defendant beyond a
reasonable doubt; the right not to testify; the right not to present any evidence; the right to be
protected from compelled self-incrimination; the right at trial to confront and cross-examine
adverse witnesses; the right to testify and present evidence and the right to compel the attendance
of witnesses. The defendant further understands that by this guilty plea, the defendant expressly
waives all the rights set forth in this paragraph.
The defendant fully understands that the defendant has the right to be represented by
counsel, and if necessary, to have the Court appoint counsel at trial and at every other stage of the
proceeding. The defendant's counsel has explained these rights and the consequences of the waiver
of these rights. The defendant fully understands that, as a result of the guilty plea, no trial will, in
fact, occur and that the only action remaining to be taken in this case is the imposition of the
sentence.
The defendant is fully satisfied with the representation received from defense counsel. The
defendant has reviewed the government's evidence and discussed the government's case and all
possible defenses and defense witnesses with defense counsel. Defense counsel has completely
and satisfactorily explored all areas which the defendant has requested relative to the government's
case and any defenses.
The guilty plea could impact defendant's immigration status or result in deportation. In
particular, if any crime to which defendant is pleading guilty is an "aggravated felony" as defined
by Title 8, United States Code, Section 1101(a)(43), removal or deportation is presumed
mandatory. Defense counsel has advised the defendant of the possible immigration consequences,
including deportation, resulting from the plea.
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10. VOLUNTARY NATURE OF THE GUILTY PLEA AND PLEA AGREEMENT:
This document constitutes the entire agreement between the defendant and the government,
and no other promises or inducements have been made, directly or indirectly, by any agent of the
government, including any Department of Justice attorney, concerning any plea to be entered in
this case. In addition, the defendant states that no person has, directly or indirectly, threatened or
coerced the defendant to do or refrain from doing anything in connection with any aspect of this
case, including entering a plea of guilty.

The defendant acknowledges having voluntarily entered into both the plea agreement and
the guilty plea. The defendant further acknowledges that this guilty plea is made of the defendant's
own free will and that the defendant is, in fact, guilty.
11. CONSEQUENCES OF POST-PLEA MISCONDUCT:
After pleading guilty and before sentencing, if defendant commits any crime, other than
minor traffic offenses, violates any condition of release that results in revocation, violates any term
of this guilty plea agreement, intentionally provides misleading, incomplete or untruthful
information to the U.S. Probation Office or fails to appear for sentencing, the United States, at its
option, may be released from its obligations under this agreement. The Government may also, in
its discretion, proceed with this agreement and may advocate for any sentencing position supported
by the facts, including but not limited to obstruction of justice and denial of acceptance of
responsibility.
12. NO RIGHT TO WITHDRAW GUILTY PLEA:
Pursuant to Rule 11(c) and (d), Federal Rules of Criminal Procedure, the defendant
understands that there will be no right to withdraw the plea entered under this agreement, except
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Guilty Plea Agreement — United States v. Nikia A. French

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