Indictment — United States v. Simmerer (Dkt. 1, M.D. Fla.)

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A sealed indictment in United States v. Shawn Michael Simmerer and Seth Downes, Case 6:24-cr-00053-RBD-RMN, in the U.S. District Court for the Middle District of Florida, Orlando Division, filed February 28, 2024 as Document 1. It charges conspiracy to commit wire fraud under 18 U.S.C. § 1349, wire fraud under 18 U.S.C. § 1343 and false claims under 18 U.S.C. § 287. It describes the Paycheck Protection Program's payroll-based loan formula and states that the defendants owned and operated Arizona entities, including a tax-exempt organization, Your 10 Life Trainings, and Simmerer-Downes Enterprises. It runs 16 pages.

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Case 6:24-cr-00053-RBD-RMN Document 1. Filed 02/28/24 Pagétwf 16 PagelD 1
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                    UNITED STATES DISTRICT COURT “8                   SEALED
                     MIDDLE DISTRICT OF FLORIDA               3
                           ORLANDO DIVISION                 or
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UNITED STATES OF AMERICA                                    =

      v.                            CASE NO. 6:24-cr- 53" @BD- RW
                                                18 U.S.C. § 1349
                                                18 U.S.C. § 1343
SHAWN MICHAEL SIMMERER                          18 U.S.C. § 287
SETH DOWNES

                               INDICTMENT

      The Grand Jury charges:
                                COUNT ONE
                      (Conspiracy to Commit Wire Fraud)

                              A.    Introduction

      At times material to this Indictment:

      L     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 economy by enabling the establishment and viability of small

businesses and by assisting in the economic recovery of communities after disasters.

As part of this effort, the SBA enabled and provided for loans through banks, credit

unions, and other lenders. These loans had government-backed guarantees.

      2     In March 2020, the Coronavirus Aid, Relief, and Economic Security Act,

or the “CARES Act,” was enacted to provide immediate assistance to individuals,

families, and organizations affected by the COVID-19 emergency. Among its various

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 2 of 16 PagelD 2

provisions, the CARES Act authorized the SBA to guarantee loans under the
Paycheck Protection Program (“PPP”), and the full principal amount of the loans
could qualify for forgiveness.

3. Borrowers were required to use PPP loan proceeds only for enumerated
purposes, including payroll costs, rent and utilities, and mortgage interest payments.
Knowing misuse of PPP funds would subject borrowers to additional liability, such as
charges for fraud.

4, Under the PPP, the maximum loan amount was the lesser of $10 million
or an amount calculated using a payroll-based formula specified in the CARES Act.
The payroll-based formula considered the borrower’s total payroll costs from the
preceding twelve months for all domestic employees. Once an average monthly payroll
cost was established, the borrower would multiply that figure by 2.5 to arrive at a total
maximum PPP loan amount. This payroll-based formula expressly excluded the
compensation of an individual employee in excess of an annual salary of $100,000,
prorated as necessary, and, with limited exceptions, businesses with more than 500
employees did not qualify to obtain PPP loans.

5. To apply for a PPP loan, a potential borrower electronically submitted
an SBA Form 2483 with supporting payroll documentation to a financial institution
that would administer the loan and serve as custodian of the funds. On the SBA Form
2483, an authorized representative of the business was required to certify information
regarding business operations. Those certifications included that: (i) the applicant was

in operation on February 15, 2020 and had employees for whom it paid salaries and

2

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 3 of 16 PagelD 3

payroll taxes or paid independent contractors, as reported on a Form 1099-MISC; (ii)
current economic uncertainty made the loan request necessary to support the
applicant’s ongoing operations; and (iii) the PPP funds would be used to retain workers
and to maintain payroll or pay other qualifying expenses.

6. Further, when submitting the SBA Form 2483, the authorized
representative certified his understanding that, should the PPP funds be knowingly
used for unauthorized purposes, the United States could hold him legally liable,
including for charges of fraud. The applicant was also required to certify the truth and
accuracy of any information provided on the SBA Form 2483 and in all supporting
documents, including any documents submitted to verify the applicant’s payroll
expenses. Such supporting documents could include payroll processor records, bank
records, wage records, payroll tax filings with the Internal Revenue Service, or other
records sufficient to demonstrate the qualifying payroll amount.

7. Finally, the applicant was required to certify the following warning
regarding false statements and other criminal penalties:

I understand that knowingly making a false statement to obtain a
guaranteed loan from SBA is punishable under the law, including
under 18 U.S.C. §§ 1001 and 3571 by imprisonment of not more
than five years and/or a fine of up to $250,000; under 15 U.S.C.
§ 645 by imprisonment of not more than two years and/or a fine
of not more than $5,000; and, if submitted to a federally insured
institution, under 18 U.S.C. § 1014 by imprisonment of not more
than thirty years and/or a fine of not more than $1,000,000.

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 4 of 16 PagelD 4

8. PPP loan applications would then be processed by participating lenders.
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. Data from the
application, including information from 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.

9. Your 10 Life Foundation is a Tax Exempt 501(c)(3) non-profit
organization registered in Arizona with an EIN ending in 0011. This entity was
incorporated in or around June 2019. SHAWN MICHAEL SIMMERER and SETH
DOWNES are the owners and operators of this entity.

10. Your 10 Life Trainings is a Tax Exempt 501(c)(3) non-profit organization
registered in Arizona with an EIN ending in 0071. This entity was incorporated in or
around July 2019. SHAWN MICHAEL SIMMERER and SETH DOWNES are the
owners and operators of this entity.

11. Simmerer-Downes Enterprises is a business entity with an EIN ending in
8087, owned and operated by SHAWN MICHAEL SIMMERER and SETH

DOWNES.

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 5 of 16 PagelID 5

B. The Scheme and Artifice
12. Beginning on or about an unknown date but at least by or about April
2020, and continuing through in or about July 2021, in the Middle District of Florida,
and elsewhere, the defendants,
SHAWN MICHAEL SIMMERER,
and
SETH DOWNES,
did knowingly and willfully combine, conspire, confederate, and agree with each
other, and others known and unknown to the Grand Jury to commit wire fraud, by
knowingly and with intent to defraud devising and intending to devise a scheme and
artifice to defraud, and for obtaining money and property, by means of materially false
and fraudulent pretenses, representations and promises, and, for the purpose of
executing the aforesaid scheme and artifice to defraud, knowingly transmitting and
causing to be transmitted by means of wire, radio, and television communication in
interstate and foreign commerce, any writings, signs, signals, pictures, and sounds, in
violation of 18 U.S.C. § 1343.
C. Manner and Means
13. The manner and means of the conspiracy included the following:
a. It was part of the conspiracy and scheme and artifice to defraud
that SHAWN MICHAEL SIMMERER would and did submit and cause the
submission of a false and fraudulent PPP loan application to Lender-1 on behalf of

Your 10 Life Foundation seeking a PPP loan from the SBA on or about April 3, 2020.

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 6 of 16 PagelD 6

b. It was further part of the conspiracy and scheme and artifice to
defraud that SHAWN MICHAEL SIMMERER would and did falsely and
fraudulently represent that Your 10 Life Foundation, had 10 employees with an
average monthly payroll of $67,115.66.

Cc. It was further part of the conspiracy and scheme and artifice to
defraud that SHAWN MICHAEL SIMMERER would and did submit supporting
documentation to Lender-1, including, among others a “confidential Internal payroll
report.”

d. It was further part of the conspiracy and scheme and artifice to
defraud that SHAWN MICHAEL SIMMERER would and did certify on the PPP
loan application for Your 10 Life Foundation that neither the entity nor any owner of
the entity owned another business or had common management with any other
business, whereas SHAWN MICHAEL SIMMERER knew, in truth and in fact, that
they owned and controlled other businesses.

e. It was further part of the conspiracy and scheme and artifice to
defraud that SHAWN MICHAEL SIMMERER electronically filed an application for
loan forgiveness regarding SBA loan number 8372947100, on or about January 1,
2021, in which he listed a false and fraudulent amount of payroll paid, which was
granted in the amount of $100,108 in principal and $953.65 in interest on or about
March 8, 2021.

f. It was further part of the conspiracy and scheme and artifice to

defraud that SHAWN MICHAEL SIMMERER, would and did submit and cause the
6

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 7 of 16 PagelD 7

submission of a false and fraudulent PPP loan application to the Lender-2 on behalf
of Simmerer-Downes enterprises seeking a PPP loan from the SBA on or about April
22, 2020.

g. It was further part of the conspiracy and scheme and artifice to
defraud that SHAWN MICHAEL SIMMERER would and did falsely and
fraudulently represent that Simmerer-Downes enterprises, had 2 employees with an
average monthly payroll of $16,904, when in truth and in fact no payroll payments
were ever paid by this entity.

h. It was further part of the conspiracy and scheme and artifice to
defraud that SETH DOWNES would and did submit and cause the submission of a
false and fraudulent PPP loan application to the Lender-2 on behalf of Your 10 Life
Trainings, seeking a PPP loan from the SBA on or about June 19, 2020.

i. It was further part of the conspiracy and scheme and artifice to
defraud that SETH DOWNES would and did falsely and fraudulently represent that
Your 10 Life Trainings, had 11 employees with an average monthly payroll of $77,600.

j It was further part of the conspiracy and scheme and artifice to
defraud that SETH DOWNES would and did submit supporting documentation to
the Lender-2, including, among others an average monthly Payroll worksheet and
Internal payroll report and a quarterly 941 tax return that was never filed with the IRS.

k. It was further part of the conspiracy and scheme and artifice to
defraud that SETH DOWNES would and did certify on the PPP loan application for

Your 10 Life Trainings, that neither the entity nor any owner of the entity owned

7

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 8 of 16 PagelD 8

another business or had common management with any other business when SETH
DOWNES knew, in truth and in fact, that they owned and controlled other businesses.

1. It was further part of the conspiracy and scheme and artifice to
defraud that SETH DOWNES electronically filed an application for loan forgiveness
regarding SBA loan number 1342828005, on or about June 28, 2021, in which he listed
a false and fraudulent amount of payroll paid, and that was granted in the amount of
$194,000 in principal and $1,961.56 in interest on or about July 2, 2021.

m. It was further part of the conspiracy and scheme and artifice to
defraud that the defendants would and did use interstate wires in furtherance of the
conspiracy and scheme and artifice to defraud, including by causing interstate wires to
be used to submit applications to the Lenders and by causing interstate wires to be
used to send and receive proceeds.

n. It was further part of the conspiracy and scheme and artifice to
defraud that the defendants would and did perform acts and make statements to hide
and conceal, and cause to be hidden and concealed, the purpose of the scheme to
defraud and the acts committed in furtherance thereof.

All in violation of 18 U.S.C. § 1349.

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 9 of 16 PagelD 9

COUNTS TWO THROUGH FIVE
(Wire Fraud)

A. Introduction

1. The allegations contained in paragraphs one through thirteen of Count

One of this Indictment are hereby realleged and incorporated herein by reference.
B. Scheme and Artifice

2. Beginning at a time unknown to the Grand Jury, but beginning at least
by in or about April 2020, and continuing thereafter through and including in or about
July 2021 in the Middle District of Florida, and elsewhere, the defendants,

SHAWN MICHAEL SIMMERER,
and
SETH DOWNES,

did knowingly and with intent to defraud devise and intend to devise a scheme and
artifice to defraud, and for obtaining money and property by means of materially false

and fraudulent pretenses, representations, and promises.

C. Manner and Means of the Scheme

3. The manner and means utilized to accomplish the scheme and artifice to
defraud are set forth in paragraph thirteen of Count One of this Indictment, which are

incorporated by reference herein.

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 10 of 16 PagelD 10

D. Interstate Wires

4, On or about the dates set forth below, in the Middle District of Florida,
and elsewhere, the defendant,
SHAWN MICHAEL SIMMERER,
and

SETH DOWNES,
for the purpose of executing the aforesaid scheme and artifice to defraud and for
obtaining money and property by means of materially false and fraudulent pretenses,

representations and promises, did knowingly, and with intent to defraud, transmit and

cause to be transmitted by means of wire, radio, and television communication in

interstate commerce, the following writings, signs, signals, pictures, and sounds:

- Count

TWO

SETH DOWNES

June 19, 2020

Submission of the PPP loan application
from the Middle District of Florida to the
Lender, processed using a server located
outside of Florida

THREE

SETH DOWNES

July 2, 2020

Wire transfer in the amount of $194,000
into an account at Notre Dame Credit
Union controlled by Seth Downes and
Shawn Michael Simmerer ending in 3751,
processed using a server located outside of
Florida

FOUR

SHAWN
MICHAEL
SIMMERER

January 1, 2021

Submission of the PPP loan forgiveness
request for loan 8372947100 from the
Middle District of Florida to the Lender,
processed using a server located outside of
Florida

10


Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 11 of 16 PagelD 11

Submission of the PPP loan forgiveness
request for loan number 1342828005 from
FIVE |SETH DOWNES | June 28, 2021 | the Middle District of Florida to the
Lender, processed using a server located
outside of Florida

All in violation of 18 U.S.C. § 1343.
COUNT SIX

(False Claim)

On or about November 9, 2020, in the Middle District of Florida,

SHAWN MICHAEL SIMMERER,

knowingly, willfully, and intentionally made and presented, and caused to be made
and presented, to the Internal Revenue Service, an agency of the Department of the
Treasury, a claim against the United States for payment which he knew to be
materially false, fictitious and fraudulent, by preparing and causing to be prepared,
and filing and causing to be filed, what purported to be the quarterly federal tax
return, form 941, for Your 10 Life Foundation wherein a claim for a sick leave tax
credits, family leave tax credits, and employee retention credits was made, with
knowledge that such claim was materially false, fictious and fraudulent.

In violation of 18 U.S.C. § 287.

11

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 12 of 16 PagelD 12

COUNT SEVEN
(False Claim)

On or about January 14, 2021, in the Middle District of Florida,

SHAWN MICHAEL SIMMERER,

knowingly, willfully, and intentionally made and presented, and caused to be made
and presented, to the Internal Revenue Service, an agency of the Department of the
Treasury, a claim against the United States for payment which he knew to be
materially false, fictitious and fraudulent, by preparing and causing to be prepared,
and filing and causing to be filed, what purported to be the quarterly federal tax
return, form 941, for Your 10 Life Foundation wherein a claim for a sick leave tax
credits, family leave tax credits, and employee retention credits was made, with
knowledge that such claim was materially false, fictious and fraudulent.

In violation of 18 U.S.C. § 287.

COUNT EIGHT
(False Claim)

On or about April 1, 2021, in the Middle District of Florida,

SHAWN MICHAEL SIMMERER,

knowingly, willfully, and intentionally made and presented, and caused to be made
and presented, to the Internal Revenue Service, an agency of the Department of the
Treasury, a claim against the United States for payment which he knew to be

materially false, fictitious and fraudulent, by preparing and causing to be prepared,

and filing and causing to be filed, what purported to be the quarterly federal tax

12

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 13 of 16 PagelD 13

return, form 941, for Your 10 Life Foundation wherein a claim for a sick leave tax
credits, family leave tax credits, and employee retention credits was made, with
knowledge that such claim was materially false, fictious and fraudulent.

In violation of 18 U.S.C. § 287.

COUNT NINE
(False Claim)

On or about April 18, 2021, in the Middle District of Florida,

SHAWN MICHAEL SIMMERER,

knowingly, willfully, and intentionally made and presented, and caused to be made
and presented, to the Internal Revenue Service, an agency of the Department of the
Treasury, a claim against the United States for payment which he knew to be
materially false, fictitious and fraudulent, by preparing and causing to be prepared,
and filing and causing to be filed, what purported to be the quarterly federal tax
return, form 944, for Your 10 Life Trainings wherein a claim for a sick leave tax
credits, family leave tax credits, and employee retention credits was made, with
knowledge that such claim was materially false, fictious and fraudulent.

In violation of 18 U.S.C. § 287.

13

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 14 of 16 PagelD 14

FORFEITURE

1. The allegations contained in Counts One through Five are incorporated
by reference for the purpose of alleging forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C)
and 28 U.S.C. § 2461(c).

2. Upon conviction of a conspiracy of the violation of 18 U.S.C. § 1343, in
violation of 18 U.S.C. § 1349 and/or a violation of 18 U.S.C. § 1343, the defendants
shall forfeit to the United States, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C.
§ 2461(c), any property, real or personal, which constitutes or is derived from proceeds
traceable to the violation.

3. The property to be forfeited includes, but is not limited to, the following:
an order of forfeiture in the amount of $344,300.00 which represents the proceeds of
the offenses.

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

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
e. has been commingled with other property which cannot be
divided without difficulty,

14

Case 6:24-cr-00053-RBD-RMN Document 1 Filed 02/28/24 Page 15 of 16 PagelD 15

the United States shall be entitled to forfeiture of substitute property under the

provisions of 21 U.S.C. § 853(p), as incorporated by 28 U.S.C. § 2461(c).

A TRUE BILL,

ROGER B. HANDBERG
United States Attorney

Amanda S. Daniels
Assistant United States Attorney

Michael P. Felicetta
Assistant United States Attorney
Chief, Orlando Division

15

FORM OBD-34

Case 6:24-cr-00053-RBD-RMN Document1 Filed 02/28/24 Page 16 of 16 PagelD 16
APR 1991 No.

UNITED STATES DISTRICT COURT
Middle District of Florida
Orlando Division

THE UNITED STATES OF AMERICA
VS.

SHAWN MICHAEL SIMMERER
SETH DOWNES

INDICTMENT
Violation:
18 U.S.C. § 1349

18 U.S.C. § 1343
18 U.S.C. § 287

Filed in open Ne day of February, 2024.

Clerk Yas =

Bail $

GPO 863 525

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