Court filing
Criminal Complaint — United States v. HPM Corporation (Dkt. 1, E.D. Wash.)
Summary
A criminal complaint filed March 23, 2022 in the U.S. District Court for the Eastern District of Washington (Case No. 4:22-mj-07038-JPH) charging HPM Corporation of Kennewick, Washington, the occupational medicine contractor at the Hanford Site, with one count of making a false claim under 18 U.S.C. § 287. In the attached affidavit, Department of Energy OIG Special Agent Benjamin Wagar says HPMC received a $1,344,700 PPP loan through Community First Bank on April 17, 2020 and moved it the same day into a money market account, where it stayed until July 1, 2021. He says the company's April 6, 2021 forgiveness application falsely certified that the money paid eligible costs, and the SBA forgave $1,358,184.35 in principal and interest. The affidavit says the $1,344,700 then went to the personal checking account of Mr. and Ms. Mooers and was donated to charity.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Filed March 23, 2022 in HPM Corporation; one of 1 filings from this case.
Record facts
| Court | U.S. District Court for the Eastern District of Washington |
|---|---|
| Filed | 2022-03-23 |
Cite this document
“Criminal Complaint — United States v. HPM Corporation (Dkt. 1, E.D. Wash.).”
U.S. District Court for the Eastern District of Washington, No. 4:22-mj-07038, Doc. 1, filed 2022-03-23. Archived at Pandemic Darlings, https://pandemicdarlings.com/court-filings/us-v-hpm-corporation/2022-03-23-criminal-complaint-dkt-1/
, SHA-256 2fb2d24196e4eb2e556fd368373e0d0596ee5a1a48d4694ced36ce41d4105253.Full text
Case
AO 91 (Rev.11/11) 4:22-mj-07038-JPH
Criminal Complaint ECF No. 1 filed 03/23/22 PageID.1 Page 1 of 14
United States District Court
for the FILED IN THE
Eastern District of Washington U.S. DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON
) Mar 23, 2022
UNITED STATES OF AMERICA
) SEAN F. MCAVOY, CLERK
)
v.
) Case No. 4:22-MJ-07038-JPH
)
HPM Corporation,
)
CRIMINAL COMPLAINT
I, Benjamin Wagar, the complainant in this case, state that the following is true to the best of my
knowledge and belief.
On or about the date(s) April 6, 2021, in the county of Benton in the Eastern District of Washington, the
defendant(s) violated:
Code Section Offense Description
18 U.S.C. § 287 False, Fictitious, or Fraudulent Claim
This complaint is based on these facts:
See Attached Affidavit of Special Agent Benjamin Wagar.
Continued on the attached sheet.
Digitally signed by Benjamin
Benjamin A. A. Wagar
Date: 2022.03.23 15:33:24
Wagar -07'00'
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Complainant’s signature
Benjamin Wagar, Special Agent
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Printed name and title
܆Sworn to before me and signed in my presence.
܈Sworn to telephonically and signed electronically.
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Date: _ ________________
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Judge’s signature
James P. Hutton, United States Magistrate Judge
City and state: Yakima, Washington ņņņņņņņņņņņņņņņņņņņņņņņņņņņņņņņņ
Printed name and title
Case 4:22-mj-07038-JPH ECF No. 1 filed 03/23/22 PageID.2 Page 2 of 14
United States District Court
for the
Eastern District of Washington
)
UNITED STATES OF AMERICA
)
)
v.
) Case No. 4:22-mj-07038-JPH
)
HPM Corporation
)
CRIMINAL COMPLAINT AFFIDAVIT
I, Benjamin Wagar, Special Agent with the Department of Energy, Office of
Inspector General, being duly sworn, state as follows:
1. I am a Special Agent with the United States Department of Energy, Office of
Inspector General (hereinafter referred to as DOE OIG) and have been so employed
since September of 2018.
2. The DOE OIG is a Federal agency charged with investigating cases of fraud,
waste, and abuse within the Department of Energy, its contractors, subcontractors,
and grantees. My responsibilities include planning, conducting, and participating in
criminal investigations involving individuals and corporations allegedly engaged in
schemes to defraud the United States Government. Through these investigations, I
have led or actively participated in cases involving contract fraud, grant fraud,
procurement fraud, theft of government funds, embezzlement, bribery, identity theft,
impersonation of government employees, theft of government equipment, and other
forms of fraud. I am currently a sworn federal law enforcement officer.
Affidavit of SA Benjamin Wagar (22-mj-07038-JPH) - 1
Case 4:22-mj-07038-JPH ECF No. 1 filed 03/23/22 PageID.3 Page 3 of 14
3. I was previously employed as an Auditor with DOE OIG from June 2016 to
September 2018. The DOE OIG Office of Audits is charged with conducting
performance and financial audits for the Department’s operations and programs,
including those performed by contractors.
4. I have Bachelor of Arts Degrees in Law and Justice, Russian, and Political
Science from Central Washington University, and a Bachelor of Science in
Accounting from Western Governors University. I am a graduate of the Criminal
Investigator Training Program at the Federal Law Enforcement Training Center
(FLETC), in Glynco, GA, where I received training in Criminal Law and Procedures.
I am also a graduate of the Inspector General Investigator Training Program, at
FLETC, where I received training specific to investigating crimes in the Inspector
General community.
5. In my capacity as a Special Agent, I have assisted and participated in
investigations regarding various federal crimes. I have reviewed and analyzed
government contracts, grants, financial records, and evidence obtained from search
and seizure warrants. I have conducted physical and wire surveillance and
participated in consensual recordings. I have been the affiant on applications for
search and seizure warrants, participated and directed other law enforcement officers
in the execution of said warrants, and participated in arrests of individuals engaged
in various crimes. As part of my duties as a Special Agent, I investigate criminal
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Case 4:22-mj-07038-JPH ECF No. 1 filed 03/23/22 PageID.4 Page 4 of 14
violations and have statutory authority to execute warrants issued under the authority
of the United States and make arrests.
6. Based on my training and experience and the facts as set forth in this affidavit,
I respectfully submit that there is probable cause to believe that HPM Corporation
(“HPMC”) has violated 18 U.S.C. § 287 (False, Fictitious, or Fraudulent Claims).
7. Specifically, I respectfully submit there is probable cause to believe that on or
around April 6, 2021, HPMC, through representative Grover Cleveland Mooers,
made a false claim on a PPP loan forgiveness application in violation of 18 U.S.C.
§ 287.
8. Except as explicitly set forth below, I have not distinguished in this affidavit
between facts of which I have personal knowledge and facts of which I learned from
other law enforcement agents. Because this affidavit is limited in purpose, I am not
including all facts known to law enforcement concerning this investigation. Instead,
I have set forth only those facts that are necessary to establish probable cause for the
complaint sought herein. In addition, where the contents of documents, or the action,
statements, and conversations of others are reported herein, they are reported in sum
and substance, and in part, except where otherwise indicated.
STATEMENT OF FACTS IN SUPPORT OF PROBABLE CAUSE
Relevant Entities, Individuals, and Contracts
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9. Defendant HPMC is a Washington corporation with its principal place of
business in Kennewick, Washington, specializing in occupational medicine.
10. Hollie P. Mooers (“Ms. Mooers”) is the registered agent for HPMC, and both
Ms. Mooers and Grover Cleveland Mooers (“Mr. Mooers”) serve as HPMC’s
governors. Additionally, Ms. Mooers serves as President and Chief Executive
Officer (CEO) of HPMC.
11. The United States Department of Energy (“DOE”) oversees environmental
remediation efforts at the Hanford Site in southeastern Washington State. In 2012,
HPMC was awarded the Hanford Occupational Medicine Services prime contract to
provide occupational medical and health services to workers at the Hanford Site,
located in Southeastern Washington state. Most recently, in 2018, HPMC was
competitively re-awarded the Hanford Occupational Medicine Services contract,
under Department Contract No. 89303919DEM000005.
12. The United States Small Business Administration (“SBA”) is a federal
agency dedicated to small businesses that provides counseling, capital, and
contracting expertise. Under the Coronavirus Aid, Relief, and Economic Security
Act, enacted on March 27, the SBA received authority to temporarily guarantee
loans under a new 7(a) loan program.
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PAYCHECK PROTECTION PROGRAM BACKGROUND
13. The Coronavirus Aid, Relief, and Economic Security Act (“CARES” Act)
was enacted on March 27, 2020, to provide over $2 trillion of economic relief to
workers, families, small businesses, industry sectors, and other levels of government
that have been hit hard by the public health crisis created by the Coronavirus
(COVID-19). Among the provisions contained in the CARES Act are provisions
authorizing the Small Business Administration (SBA) to temporarily guarantee
loans under a new 7(a) loan program titled Paycheck Protection Program (“PPP”).
14. This SBA-backed loan program was designed to help businesses keep their
workforce employed during the COVID-19 crisis. Under the PPP, borrowers
received loans to cover payroll costs and certain eligible nonpayroll costs. A
borrower could apply for forgiveness once all loan proceeds for which the borrower was
requesting forgiveness have been used. Borrowers could apply for forgiveness at any
time up to the maturity date of the loan. If borrowers did not apply for forgiveness within
10 months after the last day of the covered period, then PPP loan payments were no
longer deferred, and borrowers would begin making loan payments to their PPP lender.
Loans guaranteed under the PPP were 100 percent guaranteed by SBA, and the full
principal amount of the loans could in some circumstances qualify for loan
forgiveness.
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15. A company was eligible for a PPP loan if it has 500 or fewer employees
whose principal place of residence is in the United States or was a business that
operates in a certain industry and met the applicable SBA employee-based size
standards for that industry, and was in operation on February 15, 2020.
16. In order to obtain a PPP loan, each applicant was required to provide
information about the subject business's operations, such as the date of opening,
number of employees, and past revenues. Each applicant was also required to certify
that all the information in the application was true and correct to the best of the
applicant's knowledge.
17. Under the PPP loan program, the maximum loan amount is the lesser of $10
million or an amount calculated using a payroll-based formula specified in the Act.
The entire loan amount may be forgiven. However, for 100% forgiveness, at least
60% of loan must be used on payroll costs, and the remaining 40% may be spent on
interest on mortgages, rent, and utilities in the 24 weeks post loan disbursement.
18. The PPP loans were not directly distributed through the SBA. Rather, the
SBA approved 7(a) lenders to make PPP loans on a delegated basis. 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. The SBA maintained the power
to exercise authority over PPP loan administration.
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The Investigation
19. In August 2021, the DOE OIG received a complaint from a Department
Official alleging that HPMC had applied for and received a PPP loan in the amount
of $1,344,700, and subsequently had the total loan amount fraudulently forgiven. An
investigation was initiated and revealed the following.
20. On April 3, 2020, HPMC, through Grover Cleveland Mooers, applied for a
PPP loan through Community First Bank. This application was submitted through
the SBA “E-Tran server,” located in Sterling, VA.
21. On the Borrower Application Form, Mr. Mooers certified, on behalf HPMC,
that the, “current economic uncertainty makes this loan request necessary to support
the ongoing operations of the Applicant” and that “the funds will be used to retain
workers and maintain payroll; or make payments for mortgage interest, rent,
utilities, covered operations expenditures, covered property damage costs, covered
supplier costs, and covered worker protection expenditures as specified under the
Paycheck Protection Program Rules; I understand that if the funds are knowingly
used for unauthorized purposes, the federal government may hold me legally liable,
such as for charges of fraud.”
22. This loan was approved and the SBA assigned PPP loan number
“7352397001.” Community First Bank handled this loan on a delegated basis from
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the SBA. Community First Bank submitted disbursement details for this loan into
the SBA E-Tran system located in Sterling, VA.
23. On April 17, 2020, a PPP loan of $1,344,700 was deposited into HPMC’s
Business Bank Account. After deposit of the PPP loan was made, the same day an
inter-bank transfer of $1,344,700 was made from HPMC’s Business Bank Account
to HPMC’s Business Premium Money Market Account. The sum of $1,344,700
remained in the money market account until July 1, 2021.
24. The coverage period of the loan, during which HPMC was required to use the
funds for authorized purposes in order to receive forgiveness, was from April 17,
2020, through September 30, 2020. However, HPMC did not use the PPP loan
proceeds to maintain payroll or for other covered business expenses during the loan
coverage period, or at any point after.
25. On April 6, 2021, Mr. Mooers, on behalf of Ms. Mooers and HPMC,
submitted a PPP Loan Forgiveness Application, Form 3508EZ, to the SBA through
a SBA cloud-based platform (Summit) through the AWS GOVcloud server located
in Oregon, as well as to Community First Bank.
26. On the loan forgiveness application, HPMC certified, through Mr. Mooers,
that “the dollar amount for which forgiveness is requested… was used to pay
business costs that are eligible for forgiveness (payroll costs to retain employees;
business mortgage interest payments; business rent or lease payments; business
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utility payments; covered operations expenditures; covered property damage costs;
covered supplier costs; or covered worker protection expenditures).”
27. HPMC further certified, through Mr. Mooers, that “[t]he Borrower has
accurately verified the payments for the eligible payroll and nonpayroll costs for
which the Borrower is requesting forgiveness.”
28. HPMC also certified, through Mr. Mooers, that “[t]he information provided
in this application and the information provided in all supporting documents and
forms is true and correct in all material respects. I understand that knowingly
making a false statement to obtain forgiveness of an SBA guaranteed loan is
punishable under the law....”
29. HPMC also certified, through Mr. Mooers, that “I understand that if the funds
were knowingly used for unauthorized purposes, the federal government may pursue
recovery of loan amounts and/or civil or criminal fraud charges.”
30. On April 13, 2021, based in part on the certification that the dollar amount
for which forgiveness was being requested was used to pay business costs eligible
for forgiveness such as payroll, SBA forgave HPMC’s PPP loan of $1,358,184.35
principal of the loan ($1,344,700) plus the interest ($13,484.35) in full.
31. The SBA issued a “Notice of Paycheck Protection Program Forgiveness
Payment,” and on April 14, 2021, the forgiven amount of $1,358,184.35 was
transmitted by the SBA from the Denver Finance Center in Denver, CO, and routed
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through the Financial Management Service system located in Sterling, VA, before
proceeding to Community First Bank in Kennewick, WA. The SBA also paid a
lender fee to Community First Bank of $40,341.00.
32. On April 14, 2021, the SBA Denver Finance Center located in Denver,
Colorado created and certified the payment file and transmitted the file to the U.S.
Treasury data processing site in Kansas City, Missouri (KROC). KROC sent the file
to the National Payment Center of Excellence (NPCE), also located in Kansas City,
Missouri. The NPCE then sent the payment authorization to the Federal Reserve
Bank (FRB) in East Rutherford, New Jersey. Finally, the FRB submitted an ACH
payment to Community First Bank in Kennewick, Washington.
33. From the date of the loan application on April 3, 2020, to the date of the
forgiveness application on April 6, 2021, the Department maintained payments to
HPMC under the Contract No. 89303919DEM000005.
34. HPMC, through Mr. Mooers, certified to the SBA that the PPP Loan funds
were used for authorized purposes and were thus eligible for forgiveness. This
certification was knowingly false. This false certification was material.
35. On July 1, 2021, the sum of $1,344,700 was transferred from HPMC’s
Business Premium Money Market Account to Mr. and Ms. Mooers’ personal
Community Bank Checking Account.
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36. A subsequent OIG audit identified that HPMC had obtained a PPP loan and
OIG Audits contacted HPMC officials regarding the PPP loan. In a response
questioning from OIG Audit, an HPMC official confirmed on August 2, 2021, that
“the loan was never used to cover any business operations to include payroll or
other facility expenses.”
37. On September 14, 2021, HPMC officials represented that a third-party
consultant, “Cornerstone Wealth Strategies,” was used to distribute the PPP loan
funds to various charities and that “the charities were not handled through HPMC
and were done as personal donations outside of HPMC. The full amount of the loan
was sent to Cornerstone Wealth Strategies to disburse to the charities directly. As
previously stated, at no time did HPMC use any of those funds to cover CARES Act
3610 related expenses.”
38. On November 4, 2021, HPMC Employee Number 1 for HPMC further
confirmed to the affiant that HPMC applied for the PPP loan, the Department
continued to pay for contract services HPMC performed through the coronavirus
pandemic, the PPP loan proceeds were not used for payroll related expenses, the PPP
loan sat in the bank account and was not used until July 2021 when the loan proceeds
were transferred out of the HPMC bank account, and the PPP loan proceeds were
donated to charity through personal contributions by the Mr. and Ms. Mooers and
not HPMC.
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39. On November 4, 2021, HPMC Employee Number 2 for HPMC also
confirmed to the affiant that the PPP loan was not used for payroll related expenses,
the Department continued to pay HPMC for contract services performed, and the
PPP loan proceeds were donated to charity.
40. HPMC continued to receive full payment under their preexisting prime
contract with the Department during the time in question. In fact, because HPMC is
the on-site Occupational Health provider for the Department’s Hanford Site,
HPMC’s business with the Department grew due to the coronavirus pandemic as
they were awarded additional contract task orders related to coronavirus testing and
vaccine administration.
41. HPMC, through Mr. Mooers, knowingly provided materially false statements
to the SBA in support of HPMC’s application for loan forgiveness. HPMC, through
Mr. Mooers, falsely certified that the loan’s proceeds were utilized for covered
HPMC business-related expenses and that the loan was eligible for forgiveness when
it was not.
42. These materially false representations made to the SBA caused the SBA to
forgive the $1,358,184.35, principal of the loan ($1,344,700) plus the interest of 1%
($13,484.35) PPP loan in its entirety. Furthermore, upon forgiveness of the PPP loan,
Mr. Mooers and Ms. Mooers transferred the sum value of the $1,344,700 PPP loan
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into their personal checking account where they utilized the government funds for
non-covered PPP loan related expenses.
CONCLUSION
Based on the foregoing, there is probable cause to believe that HPMC engaged
in a violation of criminal law, specifically one count of 18 U.S.C. § 287 (false,
fictitious, or fraudulent claims).
Respectfully submitted,
Benjamin A. Digitally signed by
Benjamin A. Wagar
Date: 2022.03.23 15:33:41
Wagar
______________________________
-07'00'
BENJAMIN WAGAR
SPECIAL AGENT
DEPARTMENT OF ENERGY
OFFICE OF INSPECTOR
GENERAL
Subscribed Electronically and sworn to telephonically this
____ day of March,
2022.
______________________________
_________________
JAMES P. HUTTON
AM
UNITED STATES MAGISTRATE JUDGE
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