Criminal Information — United States v. Lydia Spencer

Record facts

U.S. District Court for the Southern District of West Virginia · No. 2:24-cr-00053 · Doc. 1 · 2024-04-01 · Docket on CourtListener

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Case 2:24-cr-00053 Document1 Filed 04/01/24 Page 1 of 6 Pa

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UNITED STATES DISTRICT COURT FOR THE sou US, orire Coane

Southem District af We: inginia

SOUTHERN DISTRICT OF WEST VIRGINIA —
CHARLESTON

UNITED STATES OF AMERICA

v. crimiInan No. 2°24 =cyp-coeS3
18 U.s.c § 1349

LYDIA SPENCER

ZNMESRERAZLER
The United States Attorney Charges:

At all times material to this Information:

The Paycheck Protection Program

1. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act was a federal law enacted in or around March 2020
and designed to provide emergency financial assistance to the
millions of Americans who were suffering the economic effects
caused by the COVID-19 pandemic. One source of relief provided by
the CARES Act was the authorization of forgivable loans to small
businesses for job retention and certain other expenses, through
a program referred to as the Paycheck Protection Program (“PPP”).

2. In order to obtain a PPP loan, a qualifying business
submitted a PPP loan application, which was signed by an authorized

representative of the business. The PPP loan application required
Case 2:24-cr-00053 Document1 Filed 04/01/24 Page 2 of 6 PagelD #: 2

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 (Small Business Administration (“SBA”)
Form 2483), the small business (through its authorized
representative) was required to provide, 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 confirming their payroll expenses.

3. A PPP loan application was processed by a participating
lender. If a PPP loan application was approved, the participating
lender funded the PPP loan using its own monies. While it was the
participating lender that issued the PPP loan, the loan was 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.

4. 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
Case 2:24-cr-00053 Document1 Filed 04/01/24 Page 3 of 6 PagelD #: 3

business spent the loan proceeds on these expense items within a
designated period of time and used a defined portion of the PPP
loan proceeds on payroll expenses.

Relevant Entities and the Defendant

5. Stride Bank, N.A. was a financial institution as defined
in 18 U.S.C. § 20 headquartered in Enid, Oklahoma.

6. Lenders 1 and 2 were financial institutions as defined
by 18 U.S.C. § 20 that participated as lenders in the PPP.

7. Les Prints was a sole proprietorship with a registered
principal office address in Charleston, Kanawha County, West
Virginia. Its business purpose was the creation of custom t-shirts
and other pieces of clothing.

8. Defendant LYDIA SPENCER was a resident of Charleston,
Kanawha County, West Virginia, who was the sole proprietor of and
was the registered agent for Les Prints.

9. Defendant LYDIA SPENCER maintained a personal bank

account held by Stride Bank, N.A.

CONSPIRACY TO COMMIT BANK FRAUD

10. From in or about no later than April 2021 through in or
about June 21, 2021, at or near Charleston, Kanawha County, West
Virginia, in the Southern District of West Virginia, and elsewhere,
defendant LYDIA SPENCER did knowingly and intentionally conspire
and agree with others, both known and unknown to the United

States
Case 2:24-cr-00053 Document1 Filed 04/01/24 Page 4 of 6 PagelD #: 4

Attorney, to devise a scheme and artifice to defraud financial
institutions, namely Lenders 1 and 2, and to obtain moneys, funds,
credits, assets, securities, or other property owned by, or under,
the custody or control of, financial institutions, namely Lenders
1 and 2, by means of false or fraudulent pretenses,
representations, or promises, in violation of 18 U.S.C. § 1344.

Purpose of the Conspiracy

ll. It was the purpose of the conspiracy for defendant LYDIA
SPENCER and her co-conspirators to unlawfully enrich themselves
by, among other things: (a) submitting and causing the submission
of materially false and fraudulent applications for PPP loans to
financial institutions; (b) paying and receiving kickbacks in
return for submitting false and fraudulent loan applications; and
(c) diverting fraud proceeds for the personal use of defendant
LYDIA SPENCER and her co-conspirators.

Manner and Means of the Conspiracy

It was in furtherance of the conspiracy that:

12. From no later than April 8, 2021, defendant LYDIA
SPENCER, from a location within the Southern District of West
Virginia, provided personal and bank account information to a co-
conspirator for the purpose of obtaining fraudulent PPP loans on

behalf of Les Prints.
Case 2:24-cr-00053 Document1 Filed 04/01/24 Page 5 of 6 PagelD #: 5

13. On or about April 8, 2021, defendant LYDIA SPENCER and
her co-conspirators submitted and caused to be submitted one
fraudulent PPP loan application on Les Prints’ behalf to Lender 1.

14. Additionally, on or about April 8, 2021, defendant LYDIA
SPENCER and her co-conspirators submitted and caused to be
submitted one fraudulent PPP loan application on Les Prints’ behalf
to Lender 2.

15. The PPP loan applications submitted and caused to be
submitted by defendant LYDIA SPENCER and her
co-conspirators contained materially false and fraudulent
information, including Les Prints’ expenses and gross annual
income. These figures did not accurately represent Les Prints’
true operations and were inflated, which caused Les Prints to
obtain a loan Les Prints would not have been qualified to receive,
or to receive a loan in an amount higher than it would qualify for
had the applications been accurate.

16. Further, as part of the loan applications, defendant
LYDIA SPENCER and her co-conspirators submitted and caused to be
submitted materially false and fraudulent Internal Revenue Service
(“IRS”) Forms, including Forms 1040 (Profit or Loss from Business),
that were created solely for purposes of applying for the PPP loans

and were never submitted to the IRS.
Case 2:24-cr-00053 Document1 Filed 04/01/24 Page 6 of 6 PagelD #: 6

17. Based on the applications submitted by defendant LYDIA
SPENCER and her co-conspirators, Lender 1 and Lender 2 approved
the fraudulent loan applications.

18. As a result, on or about April 30, 2021, Lender 1
disbursed $15,625 to defendant LYDIA SPENCER’s bank account
maintained by Stride Bank, N.A.

19. Additionally, on or about June 17, 2021, Lender 2
disbursed $15,625 to defendant LYDIA SPENCER’s bank account
maintained by Stride Bank, N.A.

20. Between on or about May 3, 2021, and on or about June
21, 2021, defendant LYDIA SPENCER paid a co-conspirator monies
from the loans proceeds for facilitating and obtaining the two
fraudulent PPP loans on behalf of Les Prints. Defendant LYDIA
SPENCER spent the remainder of the PPP loan proceeds on a variety
of personal expenses unrelated to Les Prints.

In violation of Title 18, United States Code, Section 1349.

UNITED STATES OF AMERICA

WILLIAM S. THOMPSON
United States Attorney

oy: Ma When

Holly &% Wilson
Assistant United States Attorney

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