Criminal Information — United States v. Antonio D. Hosey

Record facts

U.S. District Court, Northern District of Georgia · No. 1:20-cr-00396-LMM · Doc. 1 · 2020-10-21 · Docket on CourtListener

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Case 1:20-cr-00396-LMM Document1 Filed 10/21/20 Page 1 of 7

FILED IN OPEN COURT

U.S.D.C. - Atlanta

OCT 29 2020

B JAMES N. HATTEN, Clerk
IN THE UNITED STATES DISTRICT COURT y: i, D
epuly Clerk

FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

UNITED STATES OF AMERICA
Criminal Information
v.
No. 1:20-CR-396
ANTONIO D. HOSEY

THE UNITED STATES ATTORNEY CHARGES THAT:

Count One

Conspiracy
18 U.S.C. § 371

1. From in or about April 2020 to in or about June 2020, in the Northern
District of Georgia and elsewhere, the defendant, ANTONIO D. HOSEY, did
knowingly and willfully combine, conspire, confederate, agree, and have a tacit
understanding with Co-Conspirators 1 and 2 and others, known and unknown,
to commit offenses against the United States, that is:

a. To devise and intend to devise a scheme and artifice to defraud the United
States and to obtain money and property by means of materially false and
fraudulent pretenses, representations, and promises, and by omission of material
facts, and, with the intent to defraud, cause to be transmitted certain wire
communications in interstate and foreign commerce for the purposes of
executing the scheme, in violation of Title 18, United States Code, Section 1343;

b. To knowingly conduct and attempt to conduct a financial transaction

affecting interstate and foreign commerce, which involved the proceeds of a
Case 1:20-cr-00396-LMM Document1 Filed 10/21/20 Page 2 of 7

specified unlawful activity, that is, wire fraud, knowing the transaction was
designed in whole and in part to conceal and disguise the nature, source,
ownership, and control of the proceeds of said specified unlawful activity and,
while conducting and attempting to conduct such a financial transaction,
knowing that the property involved in the financial transaction represented the
proceeds of some form of unlawful activity, in violation of Title 18, United States

Code, Section 1956(a)(1)(B)(i).

Background
The Paycheck Protection Program

2. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a
federal law enacted in or around March 2020 and designed to provide emergency
financial assistance to the millions of Americans who are suffering the economic
effects caused by 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.

3. In order to obtain a PPP loan, a qualifying business must submit a PPP
loan application, which is signed by an authorized representative of the business.
The PPP loan application requires 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) must

state, among other things, its: (a) average monthly payroll expenses; and (b)

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number of employees. These figures are used to calculate the amount of money
the small business is eligible to receive under the PPP. In addition, businesses
applying for a PPP loan must provide documentation showing their payroll
expenses.

4. A PPP loan application must be processed by a participating financial
institution (the lender). If a PPP loan application is approved, the participating
financial institution funds the PPP loan using its own monies, which are 100%
guaranteed by Small Business Administration (“SBA”). Data from the
application, including information about the borrower, the total amount of the
loan, and the listed number of employees, are transmitted by the lender to the
SBA in the course of processing the loan.

5. PPP loan proceeds must be used by the business on certain permissible
expenses — payroll costs, interest on mortgages, rent, and utilities. The PPP
allows the interest and principal on the PPP loan to be entirely forgiven if the
business spends the loan proceeds on these expense items within a designated
period of time after receiving the proceeds and uses a certain amount of the PPP
loan proceeds on payroll expenses.

6. The PPP is overseen by the SBA, which is headquartered at 409 3rd Street
SW, Washington, D.C. 20416, and has authority over all loans. Individual PPP
loans, however, are issued by private approved lenders (most commonly, banks
and credit unions), which receive and process PPP applications and supporting
documentation, and then make loans using the lenders’ own funds.

The Co-Conspirators
7. HOSEY was a citizen of the United States and resident of the Northern

District of Georgia.
Case 1:20-cr-00396-LMM Document1 Filed 10/21/20 Page 4of7

8. Co-conspirator 1 (“CC-1”) was a citizen of the United States and resident
of the Northern District of Georgia.

9. Co-conspirator 2 (“CC-2”) was a citizen of the United States and resident of
the Northern District of Georgia.

Object of the Conspiracy

10. The object of the conspiracy was for HOSEY, CC-1, CC-2, and others to
fraudulently obtain PPP loan funds for themselves, and to conceal the
conspiracy.

Manner and Means of the Conspiracy

11. The manner and means by which HOSEY, CC-1, CC-2, and others, sought
to accomplish the objects of the conspiracy included, among others, the
following:

a. In or about April 2020, HOSEY was contacted by CC-1 and asked to recruit
individuals to cash checks from small businesses at banks in the Northern
District of Georgia. CC-1 explained that he would give HOSEY checks from the
small businesses made out to individuals whom HOSEY recruited (“check
cashers”). HOSEY would then aid the check cashers in cashing the checks, and
would give the cash back to CC-1. CC-1 told HOSEY that cashing the checks
would help the small business owners who were in financial trouble. CC-1
offered to pay HOSEY approximately $30,000 for six months of check-cashing
work.

b. The checks were the proceeds of approximately $2.1 million in PPP loans
that CC-1 and the small business owners had obtained by fraud.
Case 1:20-cr-00396-LMM Document1 Filed 10/21/20 Page5of7

c. In or about April and May 2020, on CC-1’s instructions, HOSEY recruited
approximately 13 check cashers whom he trusted, and supplied their names to
CC-1.

d. In or about May and June 2020, on multiple occasions, CC-1 provided
HOSEY with checks from small businesses made out to HOSEY’s check cashers.
Initially, HOSEY personally took the check cashers to banks in the Northern
District of Georgia to cash the checks. Later, HOSEY gave checks to the check
cashers, and allowed them to cash the checks on their own. Because at least one
of the checks was drawn against a bank account located outside the Northern
District of Georgia, the check cashing caused at least one interstate wire
communication to occur.

e. HOSEY allowed his check cashers to keep approximately $500 of each
cashed check. HOSEY delivered the rest of the cash to CC-1 in bags. HOSEY
delivered bags of cash to CC-1 approximately 10 times at different locations in
the Northern District of Georgia.

f. HOSEY’s check cashers cashed approximately 56 checks and cashier's
checks from approximately 7 small businesses, totaling approximately
$463,777.79.

g. In or about May and June 2020, CC-1 gave HOSEY approximately three
checks made out to him for approximately $8,333.33 each. HOSEY cashed these

checks and kept the money for himself.

h. In or about April or May 2020, HOSEY referred CC-2 to CC-1. CC-1
subsequently aided CC-2 in obtaining a $300,000 PPP loan using fraudulent
documentation.

Allin violation of Title 18, United States Code, Section 371.
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FORFEITURE ALLEGATION

12. Upon conviction of the offense alleged in Count One of this Criminal
Information, the defendant, ANTONIO D. HOSEY, shall forfeit to the United
States, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), all property,
real and personal, constituting and derived from proceeds traceable to the
scheme to defraud, including but not limited to the following:

(a) MONEY JUDGMENT: A sum of money in United States currency equal
to the amount of proceeds the defendant obtained as a result of the

offense for which the defendant is convicted.

13. If any of the property described above, as a result of any act or omission of
the defendant:

a. cannot be located upon the exercise of due diligence;

b. has been transferred or sold to, or deposited with, a third party;

c. has been placed beyond the jurisdiction of the Court;

d. has been substantially diminished in value; or has been commingled with

other property which cannot be divided without difficulty;

the United States of America shall be entitled to forfeiture of substitute property
pursuant to Title 21, United States Code, Section 853(p), as incorporated by Title
28, United States Code, Section 2461(c).

BYUNG J. PAK
United States Attorney
Case 1:20-cr-00396-LMM Document 1

C Gch

DIANE C. SCHULMA
Special Assistant United States Attorney
Georgia Bar No. 497764

DANIEL S. KAHN
Acting Chief, Fraud Section
Criminal Division
U.S. Department of Justice
New York Bar No. 4196143

MICHAEL P. MCCARTHY
Trial Attorney

DC Bar No. 1020231

600 U.S. Courthouse

75 Ted Turner Drive SW
Atlanta, GA 30303
404-581-6000; Fax: 404-581-6181

Filed 10/21/20

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