Statement of Facts — United States v. Mitchell (Dkt. 11, E.D. Va.)

Summary

A statement of facts in United States v. Sadie Mitchell, Case No. 3:22-cr-44, in the U.S. District Court for the Eastern District of Virginia, Richmond Division, filed May 17, 2022. The United States and Mitchell stipulate that the allegations in the Criminal Information and the facts set out are true and that the United States would have proven them beyond a reasonable doubt. The statement says Mitchell worked for the Virginia Department of Motor Vehicles from September 30, 2013 through April 24, 2019 and for the Virginia Motor Vehicle Dealer Board from April 25, 2019 through April 3, 2021, giving her access to a database of personal identifying information of Virginia residents. It then describes the Small Business Administration and its programs. It is signed by Mitchell and her attorney Edwin F. Brooks.

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

Record facts

Full text

Text recognized from a scanned document; may contain errors.

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 1 of 14 PagelD# 34

                IN THE UNITED STATES DISTRICT COURT FOR THE

                          EASTERN DISTRICT OF VIRGINIA

                                RICHMOND DIVISION

UNITED STATES OF AMERICA

       V.                                       Case No. 3:22-cr-44

SADIE MITCHELL,

       Defendant.

                                STATEMENT OF FACTS

       The United States and the defendant, SADIE MITCHELL (hereinafter, “the defendant”),

stipulate that the allegations contained in the Criminal Information and the following facts are true

and correct, and that had this matter gone to trial, the United States would have proven each of

them beyond a reasonable doubt.

       l.     The defendant, SADIE MITCHELL, resided in Richmond, Virginia, within the

Eastern District of Virginia.

       2.     The defendant was an employee of the Virginia Department of Motor Vehicles

from September 30, 2013, through April 24, 2019. The defendant was employed at the Virginia

Motor Vehicle Dealer Board from April 25, 2019, through April 3, 2021.

       3.     Due to her employment with the Virginia Department of Motor Vehicles and the

Virginia Motor Vehicle Dealer Board, the defendant had access to a government database that

contained the personal identifying information of Virginia residents.

                              Small Business Administration

       4,     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

Case 3:22-cr-00044-MHL Document11 Filed 05/17/22 Page 2 of 14 PagelD# 35

economy by enabling the establishment and viability of small businesses and by assisting in the
economic recovery of communities after disaster.
Virginia Unemployment Insurance Program

5. Following the emergence of the novel coronavirus (“COVID-19”), the United
States Government took steps to slow the spread of the virus and to mitigate its impact on the
public’s health and economic wellbeing.

6. On March 13, 2020, President Donald J. Trump declared the ongoing COVID-19
pandemic to be an emergency under Section 501(b) of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (“Stafford Act”).

7. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act
(“CARES ACT”) was signed into law. The CARES Act created the Pandemic Unemployment
Assistance (“PUA”) program, which provided unemployment benefits to individuals not eligible
for regular unemployment compensation or extended unemployment benefits.

8. The CARES Act also provided for an emergency increase in unemployment
compensation benefits, referred to as Federal Pandemic Unemployment Compensation
(“FPUC”). FPUC provided eligible individuals with $600 per week in addition to the weekly
benefit amount they received from certain other unemployment compensation programs, to
include PUA.

9, As of April 18, 2020, the President declared that a major disaster existed in all
States and territories under Section 401 of the Stafford Act. On August 8, 2020, to further
offset the pandemic’s impact on American workers, the President authorized the Federal
Emergency Management Agency (“FEMA”) to expend up to $44 billion from the Disaster Relief

Fund for lost wage payments. The President authorized the FEMA Administrator to provide

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 3 of 14 PagelD# 36

grants to participating states, territories, and the District of Columbia to administer delivery of
lost wages assistance (“LWA”) to those receiving unemployment insurance.

10. The PUA, FPUC, and LWA programs are administered by the various states,
including the Commonwealth of Virginia, but the programs’ benefits are funded in part by the
federal government.

11. Unemployment insurance (“UI”) is a joint state-federal program intended to
provide temporary financial assistance to unemployed workers under certain circumstances.
The federal unemployment trust fund provides support and funding for state UI programs. For
instance, during periods of high unemployment, the federal government provides partial funding
to states for payment of extended benefits to UJ recipients. States can also borrow from the
federal UI fund if their own funds are insufficient.

12. The Commonwealth of Virginia managed its unemployment insurance
compensation program through the Virginia Employment Commission (“VEC”). Under normal
circumstances, eligible Virginia UI recipients receive a minimum of $158 per week.

13. In the wake of the COVID-19 pandemic, the PUA and FPUC programs increased
weekly benefits for Virginia UI recipients to a minimum of $758 per week.

14. To be eligible for Virginia UI benefits, claimants must have had their hours
reduced by their employer or been separated from employment altogether. Once the VEC
approves a claim, the claimant must re-certify unemployment status on a weekly basis.
Specifically, claimants must certify that they are ready, willing, and able to work each day during
the weeks they are claiming UI benefits.

15. Successful applicants may choose whether to have the VEC deposit their

unemployment benefits directly in a linked bank account or loaded onto a prepaid debit card

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 4 of 14 PagelD# 37

(called “Way 2 Go” cards), which is shipped to the applicant via the United States Postal Service
to the physical address listed on the application. For applicants who choose a debit card, a
personal identification number for the card is sent to the address listed on the application in a
separate mailing. Prepaid cards are automatically reloaded with newly disbursed funds via

electronic transfers using the Internet.

The Paycheck Protection Program
16. In addition to the PUA program, another source of relief provided by the CARES

Act in response to the COVID-19 pandemic was the authorization of billions of dollars in
forgivable loans to small businesses for job retention and certain other expenses through a
program referred to as the Paycheck Protection Program (“PPP”).

17. To obtain a PPP loan, a qualifying business had to submit a PPP loan application
signed by an authorized representative of the business. The applicant of a PPP loan was
required 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 applicant had to state,
among other things, the business’s: (a) average monthly payroll expenses; and (b) number of
employees. In addition, businesses applying for a PPP loan had to provide documentation
showing their payroll expenses.

18. A PPP loan application had to be processed by a participating financial institution
(the lender). Ifthe PPP loan application was approved, the 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.

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 5 of 14 PagelD# 38

19. PPP loan proceeds could only be used by the business for certain permissible
expenses—payroll costs, interest on mortgages, rent, and utilities. The proceeds of a PPP loan
were not permitted to fund the borrower’s ordinary day-to-day living expenses unrelated to the
specified authorized expenses.

20. While this first draw PPP program ended on May 31, 2021, certain borrowers
were eligible to apply for second draw PPP loans. Eligible borrowers included businesses that:
had no more than 300 employees; which had previously received a PPP loan and would or had
already used the full amount only for authorized uses; and which could demonstrate at least a
25% reduction in gross receipts between comparable quarters in 2019 and 2020. Second draw
PPP loans were approved with the same general loan terms as the first draw PPP loans.

Economic Injury Disaster Loan

21. | Another source of relief provided by the CARES Act was an expansion of an
existing disaster-related program: the Economic Injury Disaster Loan (“EIDL”). This program
provides loan assistance, including $10,000 advances, for small businesses and other eligible
entities for loans up to $2 million. The EIDL proceeds can be used to pay fixed debts, payroll,
accounts payable, and other bills that could have been paid had the disaster not occurred;
however, such loan proceeds are not intended to replace lost sales or profits or for expansion of a
business.

22. Unlike certain other types of SBA-guaranteed loans, EIDL funds are issued
directly from the United States Treasury and applicants apply through the SBA via an online
portal and application. The EIDL application process, which also uses certain outside
contractors for system support, collects information concerning the business and the business

owner, including, but not limited to, the following: (a) information as to the gross revenues for

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 6 of 14 PagelD# 39

the business prior to January 31, 2020; (b) the cost of goods sold; (c) the number of employees;
and (d) information regarding the criminal history of the business owner. Applicants
electronically certify that the information provided is accurate and are warned that any false
statement or misrepresentation to the SBA or any misapplication of loan proceeds may result in
sanctions, including criminal penalties.
Count One: Conspiracy to Commit Mail Fraud

23. From on or about May 19, 2020, and continuing through on or about August 9,
2021, in the Eastern District of Virginia, the defendant, SADIE MITCHELL, knowingly and
intentionally combined, conspired, confederated, and agreed with Co-Conspirator | to devise and
intend to devise a scheme and artifice to defraud and to obtain money and property by means of
materially false and fraudulent pretenses, representations, and promises, and for the purpose of
executing the scheme and artifice and attempting to do so, causing any matter and thing to be
sent and delivered by the United States Postal Service in violation of Title 18, United States
Code, Section 1341.

24. The purpose of this conspiracy was for the defendant and Co-Conspirator | to
unjustly enrich themselves by fraudulently obtaining money which they were not entitled to by
filing false claims for PUA/UI benefits with the VEC.

The Ways, Manner, and Means of the Conspiracy

25. | The ways, manner, and means by which the conspirators sought to accomplish the
conspiracy included, but were not limited to, the following:
26. It was part of the conspiracy that Co-Conspirator | would obtain the names, dates

of birth, and social security numbers of inmates serving sentences at correctional centers for use

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 7 of 14 PagelD# 40

in filing fraudulent PUA/UI claims. Once obtained, Co-Conspirator | would share this
information with the defendant.

27. After receiving the inmates’ personal identifying information, the defendant used
this information to file fraudulent PUA/UI claims with the VEC online. These applications
contained false information, including, but not limited to, the following:

a. A false physical address rather than the correctional facility at which the inmates
were actually confined;

b. A false “last employer,” as the inmates were incarcerated and not employed; and

c. A false certification that the inmates were ready, willing, and able to work in the
event employment became available.

28. It was further part of the conspiracy that, following the filing of the false and
misleading PUA/UI claims, “Way 2 Go” debit cards were routinely mailed to addresses in the
Eastern District of Virginia selected by the defendant. The defendant and Co-Conspirator |
would share the Way 2 Go cards with each other, and they would use the funds contained on the
cards for their own personal benefit. For some applications, however, instead of Way 2 Go
cards, the defendant and Co-Conspirator 1 requested that the PUA/UI benefit payments be
directly deposited into financial accounts the conspirators controlled.

29. Ona weekly basis, the defendant and Co-Conspirator 1 would submit
recertifications of unemployment status for these fraudulent claims, resulting in the disbursal of
additional funds by the VEC.

30. —_In total, the defendant and Co-Conspirator 1 filed at least 20 knowingly false and
misleading PUA/UI applications using the personal identifying information of inmates, resulting

in the VEC disbursing over $300,000 in PUA/UI benefits as a result of those fraudulent claims.

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 8 of 14 PagelD# 41

31. It was further part of the conspiracy that the defendant and Co-Conspirator | filed
fraudulent PUA/UI claims using the personal identifying information of other individuals. The
vast majority of these individuals had no knowledge that their personal identifying information
had been compromised and used by the conspirators to file fraudulent PUA/UI applications.

On some occasions, however, the conspirators filed fraudulent PUA/UI applications using the
personal identifying information of individuals who were aware of the fraudulent applications
filed by the defendant on their behalf, and who shared in the fraudulently-obtained PUA/UI
benefits generated by those applications.

32. For instance, Co-Conspirator 1 would generally provide the defendant with names
of individuals—who were not inmates—for the defendant to query in a government database the
defendant had access to through her employer, the Virginia Motor Vehicle Dealer Board. By
querying this government database, the defendant would obtain the dates of birth and social
security numbers of these individuals.

33. Subsequently, the defendant and Co-Conspirator | would electronically submit
fraudulent PUA/UI applications to the VEC using the personal identifying information of these
individuals. The defendant and Co-Conspirator | provided false and misleading information on
these applications, such as the physical addresses of the applicants and the applicants’ purported
last employer.

34. Once those PUA/UI applications were approved, the VEC would regularly mail
Way 2 Go debit cards containing the corresponding PUA/UI benefits to addresses in the Eastern
District of Virginia selected by the defendant and Co-Conspirator 1. The defendant and
Co-Conspirator 1 would thereafter submit weekly recertifications of unemployment status for

these fraudulent claims to the VEC, resulting in additional PUA/UI funds being loaded onto the

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 9 of 14 PagelD# 42

debit cards. On some occasions, the defendant and Co-Conspirator | requested that the VEC
directly deposit the benefit payments into financial accounts they controlled. The defendant
and Co-Conspirator | used these fraudulently-obtained funds for their own personal benefit.

35. In total, the defendant and Co-Conspirator | filed at least 30 knowingly false and
misleading PUA/UI applications in the names of other individuals, resulting in the VEC
disbursing over $700,000 in PUA/UI benefits as a result of those fraudulent claims.

36. It was further part of the conspiracy for the defendant and Co-Conspirator | to file
false and misleading PUA/UI applications for themselves. Specifically, on or about May 19,
2020, the defendant filed a PUA/UI application in her name and using her personal identifying
information. On this application, the defendant falsely represented that her employment had
been terminated on April 25, 2019, when, in fact, the defendant was employed and was working
at the Virginia Motor Vehicle Dealer Board at the time she filed her application. The defendant
concealed this information in order to deceive the VEC as to her eligibility for PUA/UI benefits,
and to unjustly receive benefit payments.

37, On or about May 19, 2020, with the knowledge and consent of Co-Conspirator 1,
the defendant filed a false and misleading PUA/UI application in the name of Co-Conspirator 1,
using Co-Conspirator 1’s personal identifying information. On this application, the defendant
made false statements and representations to deceive the VEC, such as providing a false last
employer for Conspirator |, a false address for Conspirator 1’s purported last employer, and a
false employment termination date.

38. Ultimately, the VEC approved the false and misleading applications the
conspirators submitted in their own names. As a result of these fraudulent applications, the

defendant and Co-Conspirator | received over $20,000 in PUA/UI funds.

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 10 of 14 PagelD# 43

Mailings in Furtherance of the Conspiracy

39. In furtherance of this conspiracy, the defendant and Co-Conspirator | routinely
caused to be placed in a post office and authorized depository for mail matter, to be delivered by
the United States Postal Service to addresses in the Eastern District of Virginia, the following
matter: Way 2 Go debit cards containing fraudulently-obtained PUA/UI benefits.

Count Two: Wire Fraud

40. From on or about June 26, 2020, and continuing through on or about June 14,
2021, in the Eastern District of Virginia, SADIE MITCHELL, the defendant herein, knowingly
devised and intended to devise a scheme and artifice to defraud and for obtaining money by
means of materially false and fraudulent pretenses, representations, and promises, which scheme
and artifice, and the execution thereof, operated in substance as follows:

The Scheme and Artifice

41. The object of the defendant’s scheme and artifice was to enrich herself and others
by obtaining EIDL and PPP loan proceeds under false and misleading pretenses.

42. It was part of the scheme and artifice for the defendant to submit false and
misleading PPP loan applications to financial institutions. In total, the defendant submitted
three such PPP applications for businesses that she claimed to own and operate, and two more
PPP applications for businesses the defendant claimed were owned and operated by other
individuals.

43. On each of these applications, the defendant made knowingly false statements
and knowingly false certifications to mislead the financial institutions, including, but not limited

to, the following misrepresentations:

10

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 11 of 14 PagelD# 44

a. Providing false and fabricated gross income figures for the businesses;
b. Falsely certifying that the businesses were in operation on February 15, 2020; and

c. Falsely certifying that the loan proceeds would be used exclusively for eligible
business expenses.

44. All five of the PPP loan applications submitted by the defendant were approved
and funded, resulting in the disbursal of $97,462 in proceeds by the financial institutions.

45. It was further part of the scheme and artifice for the defendant to submit false and
misleading EIDL applications to the SBA. _In total, the defendant submitted six EIDL
applications for businesses she claimed to own and operate, and another two applications for
businesses purportedly owned and operated by Co-Conspirator 1. None of these businesses, in
truth and fact, and as the defendant well knew, had any customers, employees, or business
activity.

46. Although the specific misrepresentations the defendant employed varied from
application to application, the defendant’s false statements and misrepresentations on these EIDL
applications included, but were not limited to, the following:

a. Providing false gross revenue and costs of goods sold figures for the businesses;
b. Inflating or fabricating the employee count of the businesses; and
c. Falsely certifying that the information in the applications was true and accurate.

47. Ultimately, none of the defendant’s fraudulent EIDL applications were approved
by the SBA, but in response to one of the false and misleading applications the defendant
submitted, the SBA disbursed a $10,000 advance to a bank account designated by the defendant.

Ultimately, these funds were not spent on eligible expenses under the EIDL program.

11

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 12 of 14 PagelD# 45

Execution of the Scheme and Artifice to Defraud

48. For the purpose of executing the aforesaid scheme and artifice to defraud, the
defendant routinely caused wire transmissions in interstate commerce, including wire
transmissions of PPP loan proceeds from financial institutions located outside of the
Commonwealth of Virginia to bank accounts controlled by the defendant and located within the
Eastern District of Virginia.

49, For example, on or about April 26, 2021, for the purpose of executing and
attempting to execute the scheme and artifice described above, the defendant caused to be
transmitted by means of wire communication in interstate commerce the signs, signals, and
writings described herein: following the approval of one of the fraudulent PPP loan applications
described above, a financial institution initiated a wire transmission of $20,833, constituting
fraudulently-obtained PPP loan proceeds, from the financial institution’s bank account in
Pasadena, California, to the defendant’s bank account in the Eastern District of Virginia.

50. This statement of facts includes those facts necessary to support the plea agreement
between the defendant and the United States. It does not include each and every fact known to the
defendant or to the United States, and it is not intended to be a full enumeration of all of the facts

surrounding the defendant’s case.

12

Case 3:22-cr-00044-MHL Document11 Filed 05/17/22 Page 13 of 14 PagelD# 46

S51. The actions of the defendant, as recounted above, were in all respects knowing and

deliberate, and were not committed by mistake, accident, or other innocent reason.

Respectfully submitted,

Jessica D. Aber
United States Attorney

. Le
Date: May 17, 2022 By: a

Kashan K. Pathan

Assistant United NY

Carla Jordax#Detamore *
Assistant United States Attorney

13

Case 3:22-cr-00044-MHL Document 11 Filed 05/17/22 Page 14 of 14 PagelD# 47

After consulting with my attorney and pursuant to the plea agreement entered into this
day between the defendant, SADIE MITCHELL, and the United States, I hereby stipulate that
the above Statement of Facts is true and accurate, and that had the matter proceeded to trial, the
United States would have proved the same beyond a reasonable doubt.

LAAN QA
SADIE MITCHELL

I am Edwin F. Brooks, defendant’s attorney. I have carefully reviewed the above

Statement of Facts with her. To my knowledge, her decision to stipulate to these facts is an

RN
Edwin F. Brooks; Esq.
Attorney for SADIE MITCHELL

informed and voluntary one.

14

File and source

File

11.pdf

Size

729,678 bytes

SHA-256

aa341f610d1dcb344590dfd04c45930351e3122fe65a9baa5a46200fa400f168

Our copy

11.pdf