Criminal Complaint — U.S. v. Tisone

Record facts

U.S. District Court, Middle District of Florida, Fort Myers Division · No. 2:22-mj-01043-DNF · Doc. 3 · 2022-03-30 · Docket on CourtListener

Full text

AO 91 (Rey. LI/11) Criminal Complaint

UNITED STATES DISTRICT COURT

for the

Middle District of Florida

United States of America

)
V. )
) Case No.
DANIEL JOSEPH TISONE

) 222-m- JOY Z-DNA F-

)

)

a a )

Defendant(s)
CRIMINAL COMPLAINT

I, 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) of March 2020 through present

in the county of Collier
Middle _ District of _ Florida

_ inthe
, the defendant(s) violated:

Code Section

Offense Description
18 U.S.C. § 1343

Wire Fraud =

18 U.S.C. § 1344 Bank Fraud ~

18 U.S.C. § 1957 Illegal Monetary Transactions =
3 —_

2

This criminal complaint is based on these facts: nO

M Continued on the attached sheet.

Grace Bruno, Special Agent, FBI

Printed name and title

Sworn to before me and signed in my presence.

Date: 03/30/2022, . Dele 4 tego

Judge 's signature

City and state: Fort Myers, Florida oo Douglas N. Frazier, Senior U.S. Magistrate Judge

Printed name and title
AFFIDAVIT IN SUPPORT OF WARRANT

I, Grace M. Bruno, being duly sworn, states as follows:

1. Iam a Special Agent with the Federal Bureau of Investigation (FBI),
Tampa Field Office- Fort Myers Resident Agency, and have been employed in this
capacity since June 2021. As a Special Agent assigned to the criminal squad, I am
responsible for the investigation of violations of United States federal law,
specifically complex financial crimes, to include violations of 18 U.S.C. §§ 1343
(Wire Fraud), 1344 (Bank Fraud), and 1957 (Illegal Monetary Transactions).

ea This affidavit supports an application for a criminal complaint and
arrest warrant for DANIEL JOSEPH TISONE (“TISONE”) for fraud and the
unlawful use of fraudulently obtained loan proceeds related to the fraudulent
submission of Paycheck Protection Program (“PPP”), Economic Injury Disaster
Loan (“EIDL”), and Main Street Lending Program (“MSLP”) applications to
federally insured financial institutions and the Small Business Administration
(“SBA”). Specifically, TISONE electronically submitted a total of five (5) false and
fraudulent PPP loan applications to a federally insured financial institution, which
led to the issuance of approximately $573,954.17 in PPP loan funds. Additionally,
TISONE submitted three (3) false and fraudulent EIDL applications to the SBA,
which led to the issuance of approximately $456,000 in EIDL and EIDL Advance
funds. TISONE also electronically submitted a false and fraudulent MSLP loan
application and supporting financial documents to a federally insured financial

institution, which led to the issuance of approximately $1,500,000 in MSLP loan
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funds. In total, approximately $2,523,954.17 in loan proceeds were issued to

TISONE as a result of his scheme to defraud financial institutions and the SBA. The
fraudulently obtained loan proceeds were deposited into bank accounts that TISONE
opened and controlled. As detailed later, TISONE misused the fraudulently obtained
loan proceeds, which included the purchase of real property in violation of 18 U.S.C.

§ 1957.

3 Based on these acts, as set forth more fully below, probable cause exists
to believe that TISONE violated 18 U.S.C. §§ 1343 (Wire Fraud), 1344 (Bank
Fraud), and 1957 (Illegal Monetary Transactions). This Affidavit is intended to show
merely that there is sufficient probable cause for the requested warrant and does not
set forth all of my knowledge about this matter. Unless specifically indicated
otherwise, all dates and amounts described in this affidavit are approximate and all
statements or representations described in this affidavit are related in substance and
in part.

STATEMENT OF PROBABLE CAUSE

Overview of the Paycheck Protection Program
4. In March of 2020, the Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act was enacted to provide immediate 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 PPP. The program was administered by the

SBA.

5. To obtain a PPP loan, a qualifying business must submit a PPP
application, signed by an authorized representative of the business. The PPP loan
application required the business (through its authorized representative) to
acknowledge the program rules and make certain affirmative certifications in order 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) 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 to the
lending institution showing their payroll expenses. Typically, businesses would
supply documents showing the amount of payroll taxes reported to the Internal

Revenue Service (“IRS”).

6. A PPP loan application must be processed by a participating lender. If
approved, the participating lender funds the PPP loan using its own monies, which
are 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,
is transmitted by the lender to the SBA in the course of processing the loan. In the

ordinary course of providing the loan guaranty, neither the SBA nor any other
government agency checked IRS records to confirm that the applicant had paid the

payroll taxes represented in the PPP applications.

Vz PPP loan proceeds MUST be used by the business on certain
permissible expenses — Payroll costs, interest on mortgages, rent, and utilities.
Interest and principal on the PPP loan are entirely forgiven if the business spends the
loan proceeds on these expense items within a designated period of time and uses a
certain amount of the loan proceeds on payroll expenses. A PPP loan borrower may
qualify for full loan forgiveness if during the 8 to 24 week covered period following
loan disbursement, (i) employee and compensation levels are maintained, (ii) the
loan proceeds are spent on payroll and other eligible expenses, and (iii) at least 60%
of the proceeds are spent on payroll costs. A borrower can apply for forgiveness once
all loan proceeds for which the borrower is requesting forgiveness have been used.
To seek forgiveness, the borrower must submit an application to the lender,
providing a range of information and supporting documentation to establish
eligibility for forgiveness. Once the borrower furnishes a complete application, the
lender then applies to the SBA for forgiveness, furnishing the information provided
by the borrower. Based on the borrower’s information furnished by the lender, the
SBA determines whether the PPP loan qualifies, in who or in part, for forgiveness.

8. In December of 2020, the Economic Aid Act was enacted, which
authorized the SBA to guarantee Second Draw PPP loans under generally the same

terms and conditions available under the original PPP (“First Draw PPP Loans”).
Only First Draw PPP Loan borrowers who had used, or will have used, the full
amount of the First Draw PPP Loan on or before the expected date on which the
Second Draw PPP Loan was disbursed could receive a Second Draw PPP loan.
Further, a borrower would be eligible for a Second Draw PPP loan only if it had 300
or fewer employees and experienced a revenue reduction of 25% or greater in 2020
relative to 2019. Second Draw PPP loan applicants were also required to make the
same or similar certifications and representations concerning the use of PPP funds.
Pertinent to this case, TISONE applied for three (3) First Draw PPP Loans and two
(2) Second Draw PPP loans.
Overview of the Economic Injury Disaster Loan Program

9. The EIDL program was an SBA program that was in existence prior to
the passing of the CARES Acct. It provided low-interest financing to small businesses,
renters, and homeowners in regions affected by declared disasters. The CARES Act
authorized the SBA to provide EIDLs of up to $2 million to eligible small businesses
experiencing substantial financial disruption due to the COVID-19 pandemic. In
addition, the CARES Act authorized the SBA to issue advances (Economic Injury
Disaster Grants or “EIDG”) of up to $10,000 to small businesses within three days of
applying for an EIDL. The EIDG was determined by the number of employees the

applicant certified as having. The EIDG did not have to be repaid.

10. To obtain an EIDL and advance, a qualifying business was required to

submit an application to the SBA and provide information about its operations, such
as the number of employees, gross revenues for the 12-month period preceding the
disaster, and the cost of goods sold in the 12-month period preceding the disaster. In
the case of EIDLs for COVID-19 relief, the 12-month period was that preceding
January 31, 2020. The applicant was also required to certify that all of the
information in the application was true and correct to the best of the applicant’s
knowledge. The SBA would rely on the self-certifications contained in the

application to verify that the applicant was an eligible entity.

11. An EIDL applicant must also respond to questions regarding the
applicant’s personal criminal history. Prior to May 4, 2020, EIDL intake forms asked
if applicants had for any criminal offense- other than a minor vehicle violation- been
convicted, plead guilty, plead nolo contendere, been placed on pretrial diversion, or
been placed on any form of parole or probation (including probation before
judgement). After May 4, 2020, the EIDL intake form was updated by asking if the
applicant was convicted of a felony and/or was placed on probation within the
previous five years. TISONE applied for an EIDL loan before and after the question

regarding personal criminal history was changed in the EIDL application.

12. _EIDL applications are submitted directly to the SBA. The amount of
the loan, if the application is approved, is determined based, in part, on the
information provided by the application about employment, revenue, and costs of
goods, as described above. Any funds issued under an EIDL or EIDG are issued

directly by the SBA. EIDL funds can be used for payroll expenses, sick leave,
production costs, and business obligations, such as debts, rent, and mortgage
payments. If the applicant also obtains a loan under the PPP, the EIDL funds cannot

be used for the same purpose as the PPP funds.

13. Between April 2020 and March 2021, the EIDL amount was calculated
to cover six months of gross profits. The gross revenue and costs of goods sold
figures submitted by the EIDL applicant for the 12 months preceding the date of the
disaster (January 31, 2020) were utilized to calculate the EIDL amount. Specifically,
the cost of goods sold was subtracted from the gross revenue and the amount was
divided by two to calculate the EIDL amount which was capped at $150,000. The
EIDG was calculated based on how many employees the EIDL applicant stated they
had. An EIDL applicant would be entitled to $1,000 in EIDG for each additional
person the business employed and was capped at $10,000.

Overview of the Main Street Lending Program

14. The CARES Act also authorized the Secretary of Treasury and the
Federal Reserve Board to create the MSLP under Section 13(3) of the Federal
Reserve Act to promote lending to small and medium sized businesses affected by
the coronavirus pandemic. As part of the MSLP, the Secretary of the Treasury and
the Federal Reserve Board created a government-owned facility to encourage private
lending by borrowing funds from the Federal Reserve Bank of Boston and using the
funds to purchase 95 percent participation in loans made by private lenders that

conformed to the MSLP’s terms. A participating private lender would retain the
remaining 5 percent of each loan. In this way, MSLP assumed nearly all the risk of
default.

15. The MSLP consists of three credit facilities: the Main Street New Loan
Facility, Main Street Priority Loan Facility, and the Main Street Expanded Loan
Facility. Under the Priority Loan Facility Term Sheet, the total value of a loan must
not exceed “the lesser of (i) $50 million or (ii) an amount that, when added to the
Eligible Borrower’s existing outstanding and undrawn available debt, does not
exceed six times the Eligible Borrower’s adjusted 2019 earnings before interest, taxes,

depreciation, and amortization,” colloquially called the “EBITDA” formula.

16. Eligible MSLP borrowers apply through a private lender. If the lender
approves the application, the lender will originate and service the loan, though it will
also sell a 95 percent participation at par to MS Facilities LLC. MSLP loans are 5-
year term loans. Interest repayment is deferred for the first year and principal
repayment is deferred for two years.

TISONE’s Background

17. |TISONE has been a resident of Collier County, Florida since
approximately February 2018. TISONE currently resides at 550 Starboard Drive,
Naples, Florida (the “Starboard Residence”). At or around the time TISONE
fraudulently applied for PPP, EIDL, and MSLP loans, he resided at 222 Harbour

Drive #507, Naples, Florida (the “Harbour Drive Residence’).
18. TISONE is a convicted felon and was previously convicted of felony
offenses in New York and Virginia. Specifically, TISONE was previously convicted
of the felony offenses of Attempted Robbery Ist Degree, Assault 2nd Degree,
Attempted Robbery 2nd Degree, and Hindering Prosecution in the County Court of
the State of New York, Nassau County on October 24, 2007. TISONE was also
previously convicted of the felony offense of Possession of a Schedule II Controlled

Substance in the Circuit Court of Loudoun County, Virginia on September 30, 2012.
Overview of TISONE’s Entities

19. TISONE applied for and sought PPP, EIDL, and MSLP funds for
Limited Liability Companies and a Corporation that were originally incorporated in
Virginia and Delaware. Below is a chart, that summarizes the name of each
company, its date of incorporation, the inactive date, reinstatement date, the
company’s Officers, and whether it is presently an active company in the State of
Virginia. The information was obtained from records kept and maintained by the

Virginia State Corporation Commission (“VSCC”).

Name Date of Inactive | Reinstatement | Officers Status
Incorporation | Date Date

TEC 1/6/13 4/30/15 3/30/20 Albert Active
Ventures, Tisone
LLE

Daniel

Tisone
Rub a Dub 3/19/14 6/30/15 N/A Daniel Inactive
Eco Wash, Tisone (6/30/15)
LLC

Rub a 5/23/16 8/31/17 3/30/20 Daniel Inactive
Dub, LLC Tisone (8/31/21)
RubaDub| 7/25/17 10/31/18 7/13/20 Daniel Inactive
Atlantic, Tisone (10/31/21)
LLC

Rub a Dub 9/19/17 1/2/20 7/13/20 Daniel Inactive
Marines, Tisone (12/31/21)
Lig

20. TISONE also previously incorporated Rub a Dub Holdings, Inc. in the
State of Delaware on or about August 8, 2017.

21. In documentation that was submitted to the SBA for an EIDL in
November 2020, TISONE described TEC Ventures, LLC (“TEC Ventures”) as the
main holding company for Rub a Dub, LLC (“Rub a Dub”), Rub a Dub Holdings,
Inc. (“Rub a Dub Holdings”), and Rub a Dub Atlantic, LLC (“Rub a Dub
Atlantic”). According to a document submitted by TISONE, Rub a Dub and Ruba
Dub Atlantic “engaged in the business of construction & contractor for commercial
parking structure from which they are enhancing the revenue from their business
activity to achieve their strategic goals.” Further, in the document, TISONE states
Rub a Dub Holdings “provides the services of telematic software and storage hub for
autonomous & connected vehicles to put his part to generating more business under

TEC Ventures LLC.”

22. TISONE also submitted a description of TEC Ventures as part of his
MSLP application in a document titled “Company History,” in November 2020.

The document described TEC Ventures as “an SME holding company that owns,

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operates, invests in, and develops a dynamic portfolio of high-growth mixed-use

properties in and around Washington, DC and South Florida.”

23. Your Affiant has also conducted an internet search of “Rub A Dub” to
determine its online presence and existence. I located and reviewed a description of
Rub a Dub Eco Wash on the website Yelp.com, which is a website that allows
customers to leave internet reviews of businesses. Rub A Dub Eco Wash’s Yelp.com
business page contained an “About the Business” section with a description of the
business that was written by “Daniel T.,” the business owner. There was also a photo
of Daniel T. and, based on your Affiants review of the photo, the photo is of
TISONE. Rub a Dub Eco Wash is described as an eco-friendly car wash and
detailing service. The business’s address was 1676 International Dr, Ste 600,
McLean, Virginia.

Overview of Relevant Financial Institutions

24. Lender #1 was a federally insured bank based in Virginia. Lender #1 is
an SBA approved lender and participated in the PPP as a lender to small businesses.
All the fraudulent PPP applications referenced in this affidavit were submitted to
Lender #1.

25. Lender #2 was a federally insured bank based in Virginia. Lender #2
participated in MSLP as a lender. The fraudulent MSLP application referenced in
this affidavit was submitted to Lender #2 and the proceeds of the MSLP were

deposited at Lender #2. TISONE also maintained a bank account with Lender #2.

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26. Bank #1 was a federally insured credit union based in Virginia.
TISONE maintained a personal checking and savings account at Bank #1.

27. Bank #2 was a federally insured investment bank and financial services
company based in New York. TISONE maintained personal and business checking
and investment accounts with Bank #2 for himself, TEC Ventures, Rub a Dub, Rub
a Dub Holdings, Rub a Dub Atlantic, and Rub a Dub Marines, LLC (“Rub a Dub
Marines”).

TISONE’s False and Fraudulent PPP Applications (Bank Fraud)

28. Between April 20, 2020 and March 31, 2021, TISONE submitted a total
of five false and fraudulent PPP loan applications (three First Draw and two Second
Draw PPP applications) to Lender #1 in violation of 18 U.S.C. § 1344. The five
applications, described in detail below, were approved and funded by Lender #1,
causing approximately $573,554.17 to be deposited into bank accounts controlled by
TISONE. The chart below summarizes the First and Second Draw PPP applications

that were submitted by TISONE and funded by Lender #1.

# | Applicant | Business | Application | Amount Loan
Name Date Requested Amount
First Draw PPP Loans
1 Daniel ae
LLC ($103,900)

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2 oo oars ub} 4/22/20 | $130,600 05/08/20
ae ($130,600)
3 Daniel Rub A Dub
Ties Atlantic 7/16/20 $130,600 07/31/20
LiLo ($130,600)
Second Draw PPP Loans
Daniel TEC
=) iene Ventures 01/12/21 | $104,954.17 02/08/21
LLC ($104,954.17)
5 Daniel Rub A Dub
Tisené Atlantic 03/31/2021 $103,900 4/22/21
‘i ($103,900)
Total: $573,954.17
> PPP #1 -TEC Ventures, LLC

29. Onor about April 20, 2020, TISONE electronically signed and
submitted a fraudulent PPP application to Lender #1 for TEC Ventures (“PPP #1”).
TISONE was listed as the manager and 100% business owner. The number 703-635-
9362 was listed as the business’s phone number and the business’s email address was
listed as Dtisone@me.com. The business’s primary address was listed as 7514
Gresham St. Springfield, VA, which is the personal residence and home of
TISONE’s mother, an individual with initials D.T. The application listed

TISONES’s address as the Harbour Drive Residence.

Is
30. According to records from VSCC, TEC Ventures was an inactive LLC
from April 30, 2015, up until March 30, 2020. TISONE filed an application with
VSCC for reinstatement of TEC Ventures 21 days before submitting the PPP #1 loan

Application.

31. The PPP #1 loan application listed the number of employees for TEC
Ventures as five, with an average monthly payroll of $41,565. The application sought
a total of $103,900 in PPP funds. In support of the monthly payroll calculation,
TISONE submitted a fraudulent IRS Form 941 (Employer’s Quarterly Federal Tax
Return) with TISONE’s signature and dated April 20, 2020, as record of TEC
Venture’s payroll for the first quarter of 2020 (January, February, March of 2020).
The IRS Form 941 stated five employees received compensation for the first quarter
of 2020, totaling $123,750. The IRS confirmed that TEC Ventures did not file an

IRS Form 941 for the first quarter of 2020.

32. Further, as part of the investigation, I reviewed records from the Florida
Department of Revenue and Virginia Employment Commission, which requires
employers in each respective state to report records of wages paid to employees. The
Florida Department of Revenue and Virginia Employment Commission had no

record of wages paid to be any employees of TEC Ventures during 2020.

33. As part of the PPP #1 loan application, TISONE was required to make
a number of representations and certification. TISONE represented that “[a]ll SBA
loan proceeds will be used only for business-related purposes as specified in the loan

14
application and consistent with the Paycheck Protection Program Rules.”
Additionally, TISONE digitally initialed and falsely certified, among other things,
that the PPP funds acquired from the requested loan would “be used to retain
workers and maintain payroll or make mortgage interest payments, lease payments,
and utility payments.” TISONE further certified that he understood that the federal
government could pursue criminal fraud charges if the “funds are knowingly used for
unauthorized purposes.” These statements were knowingly false when made
because, as further detailed below, TISONE knowingly used the PPP funds for

unauthorized purposes.

34. TISONE’s false and fraudulent representations on the PPP #1 loan
application caused Lender #1 to approve and fund a PPP loan of $103,900.00. On
May 11, 2020, $103,800! in PPP loan funds were deposited into a personal checking
and investment account ending in 38001 with Bank #2 (“Bank #2 account ending in
38001”), held in TISONE’s name. The account and TISONE’s use of PPP proceeds
will be further discussed in the Misuse of Covid Relief Funds section below.

> PPP #2 - Ruba Dub, LLC

35. Onor about April 22, 2020, TISONE electronically signed and
submitted a fraudulent PPP application to Lender #1 for Rub a Dub (“PPP #2”).
TISONE was listed as the manager and 100% business owner. The number 703-635-

9362 was listed as the business’s phone number and the business’s email address was

' For certain PPP loan deposits, Lender #1 applied a $100 service charge.
LS
listed as Dtisone@me.com. The business’s primary address was listed as 9445
Fairfax Blvd #203, Fairfax, VA, which is a condominium unit associated with
TISONE’s father, an individual with initials A.T. The application listed TISONES’s
address as the Harbour Drive Residence.

36. According to records from VSCC, Rub a Dub was an inactive LLC
from August 21, 2017, up until March 30, 2020. TISONE filed an application with
VSCC for reinstatement of Rub a Dub 23 days before submitting the PPP #2 loan
application.

37. The PPP #2 loan application listed the number of employees for Rub a
Dub as six, with an average monthly payroll of $52,249.34. The application sought a
total of $130,600 in PPP funds. In support of the monthly payroll calculation,
TISONE submitted a fraudulent IRS Form 941 (Employer’s Quarterly Federal Tax
Return) with TISONE’s signature and without a date, as record of Rub a Dub’s
payroll for the first quarter of 2020 (January, February, March of 2020). The IRS
Form 941 stated Rub a Dub’s paid compensation to employees for the first quarter of
2020 was $102,830.76. However, the 941 did not provide the number of employees
that received compensation. The IRS confirmed that Rub a Dub did not file an IRS
Form 941 for the first quarter of 2020.

38. Additionally, as proof of payroll, TISONE submitted a document titled
“Rub a Dub LLC —- Paycheck Protection Program Report” which included a
summary of Rub a Dub’s payroll in January and February of 2020. The report

purported to be prepared by a third-party internet payroll company based out of San
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Francisco (“payroll company”) that contained the payroll company’s logo. As part of
the investigation, I confirmed with the payroll company that they did not prepare the
report and had no record of the report ever being prepared. Further, the payroll

company confirmed that they did not assist in processing payroll for Rub a Dub.

39. Further, as part of the investigation, I reviewed records from the Florida
Department of Revenue and Virginia Employment Commission, which requires
employers in each respective state to report records of wages paid to employees. The
Florida Department of Revenue and Virginia Employment Commission had no

record of wages paid to any employees of Rub a Dub during 2020.

40. As part of the PPP #2 loan application, TISONE was required to make
a number of representations and certification. TISONE represented that “[a]ll SBA
loan proceeds will be used only for business-related purposes as specified in the loan
application and consistent with the Paycheck Protection Program Rules.”
Additionally, TISONE digitally initialed and falsely certified, among other things,
that the PPP funds acquired from the requested loan would “be used to retain
workers and maintain payroll or make mortgage interest payments, lease payments,
and utility payments.” TISONE further certified that he understood that the federal
government could pursue criminal fraud charges if the “funds are knowingly used for
unauthorized purposes.” These statements were knowingly false when made
because, as further detailed below, TISONE knowingly used the PPP funds for

unauthorized purposes.

LW
41. TISONE’s false and fraudulent representations on the PPP #2 loan
application caused Lender #1 to approve and fund a PPP loan of $130,600.00. On
May 8, 2020, $130,600 in PPP loan funds were deposited into the Bank #2 account
ending in 38001. The account and TISONE’s use of PPP proceeds will be further
discussed in the Misuse of Covid Relief Funds section below.

> PPP #3 - Rub A Dub Atlantic

42. Onor about July 16, 2020, TISONE electronically signed and
submitted a fraudulent PPP application to Lender #1 for Rub a Dub Atlantic (“PPP
#3”). TISONE was listed as the manager and 100% business owner. The number
703-635-9362 was listed as the business’s phone number and the business’s email
address was listed as Dtisone@me.com. The business’s primary address was listed as
1676 International Dr, McLean, VA 22101, which is a 13-story office building in the
Northern Virginia/DC Metro area. The application listed TISONES’s address as the

Harbour Drive Residence.

43. According to records from VSCC, Rub a Dub Atlantic was an inactive
LLC from October 31, 2018, up until July 13, 2020. TISONE filed an application
with VSCC for reinstatement of Rub a Dub Atlantic three days before submitting the

PPP #3 loan application.

44. The PPP #3 loan application listed the number of employees for Rub a
Dub Atlantic as six, with an average monthly payroll of $52,249.34 (the same as

PPP# 2). The application sought a total of $130,600 in PPP funds (the same as PPP#

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2). In support of the monthly payroll calculation, TISONE submitted a fraudulent
IRS Form 941 (Employer’s Quarterly Federal Tax Return) with TISONE’s signature
and without a date, as record of Rub a Dub’s payroll for the first quarter of 2020
(January, February, March of 2020). The IRS Form 941 stated Rub a Dub Atlantic
paid a total of $102,830 in employee compensation in the first quarter of 2020.
However, the tax document did not state the number of employees that received
compensation. The IRS confirmed that Rub a Dub Atlantic did not file an IRS Form

941 for the first quarter of 2020.

45. Additionally, as proof of payroll, TISONE submitted a document titled
“Rub a Dub Atlantic LLC — Paycheck Protection Program Report” which included a
summary of Rub a Dub’s payroll in January and February of 2020. The monthly
payroll information on the report was the same as what was submitted for PPP #2.
The report purported to be prepared by the payroll company and contained the
payroll company’s logo. As part of the investigation, I confirmed with the payroll
company that they did not prepare the report and had no record of the report ever
being prepared. Further, the payroll company confirmed that they did not assist in

processing payroll for Rub a Dub Atlantic.

46. Further, as part of the investigation, I reviewed records from the Florida
Department of Revenue and Virginia Employment Commission, which requires

employers in each respective state to report records of wages paid to employees. The

1g
Florida Department of Revenue and Virginia Employment Commission had no

record of wages paid to any employees of Rub a Dub Atlantic during 2020.

47. As part of the PPP Loan #3 application, TISONE was required to make
a number of representations and certification. TISONE represented that “[a]ll SBA
loan proceeds will be used only for business-related purposes as specified in the loan
application and consistent with the Paycheck Protection Program Rules.”
Additionally, TISONE digitally initialed and falsely certified, among other things,
that the PPP funds acquired from the requested loan would “be used to retain
workers and maintain payroll or make mortgage interest payments, lease payments,
and utility payments.” TISONE further certified that he understood that the federal
government could pursue criminal fraud charges if the “funds are knowingly used for
unauthorized purposes.” These statements were knowingly false when made
because, as further detailed below, TISONE knowingly used the PPP funds for

unauthorized purposes.

48. TISONE’s false and fraudulent representations on the PPP #3 loan
application caused Lender #1 to approve and fund a PPP loan of $130,600.00. On
July 31, 2020, $130,500 in PPP loan funds were deposited into the Bank #2 account
ending in 38001. On the same date, TISONE transferred the PPP loan funds to a
business checking and investment account ending in 39000 with Bank #2 (“Bank #2
account ending in 39000”). TISONE was the sole signatory on the Bank #2 account

ending in 39000. The account was set up to permit its account holder to use the

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account as a primary investment account, while also enjoying traditional checking
account functions. The account and TISONE’s use of PPP proceeds will be further
discussed in the Misuse of Covid Relief Funds section below.

> PPP #4-TEC Ventures LLC (Second Draw)

49. Onor about January 21, 2021, TISONE electronically signed and
submitted a fraudulent Second Draw PPP application to Lender #1 for TEC
Ventures (“PPP #4”). TISONE was listed as the manager and 100% business owner.
The application contained some of the same identifying information as the First
Draw application for PPP#1, except the email for the business was changed to
info@tecventuresllc.com.

50. The PPP#4 loan application listed the number of employees for TEC
Ventures as four, with an average monthly payroll of $41,981.67. The application
sought a total of $104,954.17 in Second Draw PPP funds. Unique to the Second
Draw PPP application, TEC Ventures was required to show a reduction in gross
receipts of more than 25% to qualify for a Second Draw loan. To do this, the
applicant business was required to identify the 2020 quarter meeting this
requirement, identify the reference quarter, and provide the gross receipt amounts for
both quarters. A portion of TEC Venture’s PPP #4 application that contains this

information is pictured below.

21
2 Ti ‘ Re Ae WV. Covered Operations
Purpose of the L Payroll Cows wi Rent Morrgoge interest 0 Uiilities Expendinwes
loan (select all that pre zr as
; : “oveperd Pr ayty" —_> Py ‘arke Wher ¢2
Apply) roti ered Property Ficaverel Supplier Costs ‘: omar a orkei — Other (explain)
Damage Protecnion Expenditures
PPP First Draw
SBA Loan Nuinber: 67325272-07
Reduction in Gross Receipts of at Least 2020 Quarter Reference Quarter
25% (Applicants for loans of $150,000 or| (e.g... 2Q 2020): 2Q 2020 {e.g., 2Q 2019): 2Q 201 9
less nay leave blank but must provide 3
upon or before secking loan forgiveness | Gross Receipts: | $ Gross Receipts s
or upon SBA request): 9 94 1 . 4 9 84 8834 . 33 |

51. As detailed in a portion of the PPP #4 application shown above,
TISONE submitted the second quarter of 2020 as a period in which gross receipts for
TEC Ventures decreased by more than 25%. TISONE stated in the application that
the gross receipts for that quarter were $59,431.49. TISONE submitted the second
quarter of 2019 as TEC Venture’s reference quarter and stated in the application that
the gross receipts for that quarter were $848,834.33. Moreover, TISONE submitted a
fraudulent profit and loss statement for TEC Ventures for the period of April 2 to
July 31, 2020. It should be noted that the second quarter of a given year would run

from April Ist through June 30th.

52. Based on your Affiant’s training and experience, there are entries on the
profit and loss statement that are consistent with fraud. The first is that TISONE
claimed TEC Ventures paid a total of $159,409.44 in salary and wage expenses
between April 2 and July 31, 2020. See the relevant portion of the profit and loss

statement below.

ve
7650 Travel expense 718.88 -100.00 %
7700 Salaries & Wages expense 159,409.44
7750 Payroll Tax 11.880.95
Total Expenses $178,623.48 $6,190.39 2,785.50 %
NET OPERATING INCOME $ -132,534.83 $842,043.94 -115.74 %

53. The column on the left side (pictured above) is the April 2 to July 31,
2020 period. The column in the middle is the reference period in 2019. It should be
noted that TISONE does not include any salary and wage expenses for the reference
period in 2019. Your Affiant’s review of TISONE’s personal and business bank
accounts for 2020, showed no record of payroll expenses for TEC Ventures during
the period identified above. Further, the Florida Department of Revenue and
Virginia Employment Commission had no record of wages paid to be any employees

of TEC Ventures during 2020.

54. Another entry in the profit and loss statement that your Affiant found
was inconsistent and evidence of fraud was that the profit and loss statement
indicated TEC Ventures had a total cost of goods sold of $600 and total income of
$848,834.33 in the 2019 reference period, but a cost of goods sold of $13,342.84 and
total income of $59,431.49 during the same period in 2020. The proportional
increase in cost of goods sold from 2019 to 2020, while also suffering a substantial
decrease in total income is inconsistent with the claim of decreased business. That,
taken with the entry of no payroll expenses in 2019, is further evidence that TISONE
provided a fraudulent profit and loss statement for his Second Draw PPP loan. See

the relevant portion of the profit and loss statement pictured below.

23
Case 2:22-mj-01043-DNF

Document 3 Filed 03/30/22 Page 25 of 50 PagelD 30

APR 2-JUL 31, 2020

rota

~ APR2-JUL 31,2019 (PY)

“Ye CHANGE

Income

4000 Revenue
Total Income
Cost of Goods Sold

§020 Contractor Service
Total Cost of Goods Sold
GROSS PROFIT

59,431.49
$59,431.49

13,342.84
$13,342.84
$46,088.65

848.834 33
$848,834.33

600.00
$600,00

$848,234.33

-93.00 %
-93.00 %

2,123.81 %
2,123.81 %
-94.57 %

55. Your Affiant’s review of TISONE’s personal and business account

records for 2019 showed no records of substantial deposits or inflows that would
support the representation of $848,834.33 in income during the period described

above in the profit and loss statement submitted by TISONE.

56. A Second Draw PPP loan applicant was also required to make a
number of certifications. In the Second Draw PPP application for PPP #4, TISONE
initialed and falsely certified that “[t]he Applicant received a First Draw Paycheck
Protection Program Loan and, before the Second Draw Paycheck Protection
Program Loan is disbursed, will have used the full loan amount (including any
increase) of the First Draw Paycheck Protection Program Loan only for eligible
expenses.” As detailed below, TISONE did not use the First Draw PPP loan (PPP

#1) for eligible expenses.

57. TISONE’s false and fraudulent representations on the PPP #4 loan
application caused Lender #1.to approve and fund a Second Draw PPP loan in the
amount of $104,954.17. On February 8, 2021, $104,854.17 in Second Draw PPP
loan funds were deposited into a business investment and checking account ending in

39323 with Bank #2 (“Bank #2 account ending in 39323”). The account was a

24
business account with the name TEC Ventures c/o Daniel Tisone. TISONE was the
sole signatory on the Bank #2 account ending in 39323. The account and TISONE’s
use of PPP proceeds will be further discussed in the Misuse of Covid Relief Funds
section below.

> PPP #5 - Rub A Dub Atlantic (Second Draw)

58. Onor about January 21, 2021, TISONE electronically signed and
submitted a fraudulent Second Draw PPP application to Lender #1 for Rub a Dub
Atlantic (“PPP #5”). TISONE was listed as the manager and 100% business owner.
The application contained the same identifying information as the First Draw
application for PPP #3.

59. The PPP #5 loan application listed the number of employees for Rub a
Dub Atlantic as four, with an average monthly payroll of $41,565. The application
sought a total of $103,900 in Second Draw PPP funds. Records from the Florida
Department of Revenue and Virginia Employment Commission showed no record of
any wages being paid to employees of Rub a Dub Atlantic in the States of Florida or
Virginia during 2020 or 2021. Additionally, your Affiant has reviewed TISONE’s
personal and business bank records, as well as payroll company records, and I have
found no records of payroll being paid to any employees of Rub a Dub Atlantic. The
payroll amount and number of employees submitted in the Second Draw PPP #5

application are false.

Z5
60. Again, just like PPP #4, TISONE used the second quarter of 2019 and
the second quarter of 2020 to establish a greater than 25% reduction in gross receipts.
The PPP #5 loan application stated Rub a Dub Atlantic had gross receipts of
$227,360 in the second quarter of 2019 and gross receipts of $0.00 in the second
quarter of 2020. Additionally, and unlike the Second Draw application for PPP #4,
TISONE did not submit supporting documentation, like a profit and loss statement,
for the 2019 and 2020 gross receipt figures. Such supporting documentation was not
required by the SBA for Second Draw PPP loan applications that requested less than

$150,000.

61. The gross receipts figure submitted by TISONE for the second quarter
of 2019 is false. Your Affiant has reviewed TISONE’s personal and business bank
account records for the year of 2019. A review of those records showed no evidence

of $227,600 in gross receipts during the second quarter of 2019.

62. | A Second Draw PPP loan applicant was also required to make a
number of certifications. In the Second Draw PPP application for PPP #5, TISONE
initialed and falsely certified that “[t]he Applicant received a First Draw Paycheck
Protection Program Loan and, before the Second Draw Paycheck Protection
Program Loan is disbursed, will have used the full loan amount (including any
increase) of the First Draw Paycheck Protection Program Loan only for eligible
expenses.” As detailed below, TISONE does not use the First Draw PPP loan (PPP

#3) for eligible expenses.

26
63. TISONE also falsely certified that the Second Draw PPP loan funds
would 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.”
TISONE further certified that if the funds were knowingly used for unauthorized
purposes, the federal government could hold him legally liable, such as for charges of
fraud. As detailed below, TISONE knowingly used PPP #5 loan funds for

unauthorized purposes.

64. TISONE’s false and fraudulent representations on the PPP #5 loan
application caused Lender #1 to approve and fund a Second Draw PPP loan in the
amount of $103,900. On April 22, 2021, $103,800 in Second Draw PPP loan funds
were deposited into the Bank #2 account ending in 39000. The account and
TISONE’s use of PPP proceeds will be further discussed in the Misuse of Covid
Relief Funds section below.

TISONE’s False and Fraudulent EIDL Applications (Wire Fraud)

65. Between March 2020 and November 2020, TISONE submitted a total

of five false and fraudulent EIDL applications to the SBA in violation of 18 U.S.C.

§ 1343. Below is a chart that summarizes each EIDL application.

zi
# of On or About | Approx.
# | Applicant(s) Business Employees | Application Loan EIDG Status
Date Amount
APPROVED EIDL LOANS
Daniel Rub a Dub Funded
I mene Holdings, Inc. 6 3/30/2020 | $150,000 Y (5/21/2020)
(C Corp) ($6,000)
i Funded
2 Csi eg Le 10/12/2020 | $150,000
isone Atlantic, LLC | N (10/22/2020)
Rub a Dub Funded
Daniel Marines, LLC
3 ; dba 4 11/9/2020 | $150,000 N (11/19/2020)
Tisone
Rub a Dub
Eco Wash
DECLINED EIDL APPLICATIONS
Daniel Rub a Dub, 12 Req. Declined
Tisone LLe i | SO (11/6/2020)
3 | fai PART, 12 4/15/2020 | $500,000| Re Declined
Tisone LLC 4. (5/26/2020)
Total: $456,000
66. Three of the applications, described in detail below, were approved and

funded by the SBA. The SBA deposited approximately $455,700? in EIDL and

EIDG funds into bank accounts controlled by TISONE. The two EIDL applications

> The SBA charged a $100 processing fee for each EIDL deposit. So, while the EIDL was for $150,000, $149,900 of
EIDL proceeds were deposited into accounts controlled by TISONE.

28

that were declined will be referenced in this affidavit because, during the EIDL
review process, TISONE submitted corporate tax returns and financial statements
that contained gross revenue, wage, and cost of goods sold amounts that conflicted
with representations TISONE made in his approved EIDL applications.

> EIDL #1 - Rub A Dub Holdings, Inc.

67. Onor about March 30, 2020, TISONE electronically submitted a
fraudulent EIDL application to the SBA for Rub A Dub Holdings, a C-corporation
(“EIDL #1”). The application was submitted from an Internet Protocol (“IP”)
address in Collier County, FL. According to the application, Rub a Dub Holdings
was established on August 25, 2017. TISONE was listed as the 100% owner. The
address for the business was listed as 1676 International Dr. McLean, VA (same
business address as PPP #3), and the email address was listed as
rubadubecowash@gmail.com. The business phone number contained in the EIDL
application was 571-336-7059. The business owner’s mobile number was listed as
703-635-9362 and the email was listed as Dtisone@me.com. The application
described Rub a Dub Holding’s business industry as “construction & contractors,”
and the business category as “construction contractors.”

68. Inthe EIDL application, TISONE falsely represented Rub A Dub
Holding’s gross revenue to be $1,500,000 and cost of goods sold to be $460,000 for
the year period preceding January 31, 2020. The application sought a $150,000
EIDL and a $6,000 EIDG, which was based on a claim that the business had six

employees. The SBA did not require the applicant to submit documentation in

20
support of these represented figures. Records from the Florida Department of
Revenue and Virginia Employment Commission revealed no record of wages being
paid to employees of Rub a Dub Holdings in the States of Florida and Virginia

during 2019 and 2020.

69. Additionally, your Affiant has reviewed a Form 1120 U.S. Corporation
Income Tax Return filed by TISONE for TEC Ventures for the 2019 tax year. The
corporate tax return was filed as a consolidated return and contained the tax
information for subsidiary corporations, which included Rub a Dub Holdings, Rub a
Dub, and Rub a Dub Atlantic. The tax return indicated that in 2019 the total cost of
goods sold for TEC Ventures and its subsidiary corporations, including Rub a Dub
Holdings, was $2,470 and not $460,000 as stated in the EIDL #1 application.
Additionally, the tax return contained no salary and wages for 2019. TISONE’s
EIDL application representations that the cost of goods sold for Rub a Dub Holdings
were $460,000 in 2019 and that the business had six employees were false.

70. Onthe EIDL #1 application, TISONE failed to disclose his criminal
history which would have automatically disqualified him as a EIDL borrower.
Specifically, the application asked the applicant if he/she had, for any criminal
offense other than a minor vehicle violation, been convicted, plead guilty, plead nolo
contendere, been placed on pretrial diversion, or been placed on any form of parole
or probation (including probation before judgement). The EIDL application

indicated TISONE responded “No.” As previously discussed, TISONE has been

30
convicted of felony offenses in the States of New York and Virginia. According to
the SBA, had TISONE truthfully represented that he was a convicted felon, the
EIDL application would have been denied.

71. TISONE’s false and fraudulent representations on the EIDL #1
application caused the SBA to approve and fund a $150,000 EIDL. On May 22,
2020, the SBA deposited $149,900 in EIDL funds and $6,000 in EIDG funds into the
Bank #2 account ending in 38001. The account and TISONE’s use of EIDL funds
will be further discussed in the Misuse of Covid Relief Funds section below.

> EIDL #2 - Rub A Dub Atlantic, LLC

72. On or about October 12, 2020, TISONE electronically submitted a
fraudulent EIDL application to the SBA for Rub a Dub Atlantic (“EIDL #2”).
According to the application, Rub a Dub Atlantic was established on September 19,
2017. TISONE was listed as the 100% owner. The address for the business was listed
as 360 NW 27th Street, Miami, FL, and the email address was listed as
daniel@rubadub.com. Further investigation of the business address revealed it to be
the address for WeWork, a business which allows individuals and companies to rent
shared office space by the hour, day, month, or year. The business phone number
contained in the EIDL application was 855-681-999. The business owner’s mobile
number was listed as 703-635-9362 and the email was listed as
Dtisone@rubadub.com. The application described Rub a Dub Atlantic’s business

industry as “transportation,” and the business category as “None of the below.”

31
73. Inthe EIDL application, TISONE falsely represented Rub A Dub
Atlantic’s gross revenue to be $632,000 and cost of goods sold to be $248,000 for the
year period preceding January 31, 2020. The application sought a $150,000 EIDL.
The application also claimed Rub a Dub Atlantic had six employees. Records from
the Florida Department of Revenue and Virginia Employment Commission revealed
no record of wages being paid to employees of Rub a Dub Atlantic in the States of
Florida and Virginia during 2019 and 2020.

74. Your Affiant has also reviewed the 2019 TEC Ventures Form 1120 U.S.
Corporation Income Tax Return, which included Rub a Dub Atlantic as a subsidiary
corporation in the tax filing. The tax return indicated that in 2019 the total cost of
goods sold for TEC Ventures and its subsidiary corporations, including Rub a Dub
Atlantic, was $2,470 and not $248,000 as stated in the EIDL #2 application.
Additionally, the tax return contained no salary and wages for 2019. Moreover,
combining the gross revenue falsely represented by TISONE in EIDL #1 and EIDL
#2 would equal a sum in gross revenues of $2,132,000 for two of TEC Venture’s
subsidiary corporations in 2019. That number exceeds the $1,717,701 in gross
receipts or sales that is listed in TISONE’s 2019 Corporate Income Tax Return. Your
Affiants review of TISONE’s personal and business bank records also showed no
evidence of deposits that are consistent with TISONE’s gross revenue
representations. The gross revenue, cost of goods sold, and employment

representations made by TISONE in the EIDL #2 application were false.

32
75. TISONE’s false and fraudulent representations on the EIDL #2
application caused the SBA to approve and fund a $150,000 EIDL. On October 23,
2020, the SBA deposited $149,900 in EIDL funds into the Bank #2 account ending
in 39000. The account and TISONE’s use of EIDL funds will be further discussed in
the Misuse of Covid Relief Funds section below.

> EIDL #3- Rub A Dub Marines, LLC dba Rub a Dub Eco Wash

76. Onor about November 9, 2020, TISONE electronically submitted a
fraudulent EIDL application to the SBA for Rub a Dub Marines dba Rub a Dub Eco
Wash (“EIDL #3”). The application was submitted from an IP address in Collier
County, FL. According to the application, Rub a Dub Marines was established on
September 19, 2017. TISONE was listed as the 100% owner. The address for the
business was listed as 9445 Fairfax Blvd, Fairfax, VA, and the email address was
listed as RADMarines@rubadub.com. The business phone number contained in the
EIDL application was 571-336-7059. The business owner’s mobile number was listed
as 703-635-9362 and the email was listed as RADMarines@rubadub.com. The
application described Rub a Dub Marines’s business industry as “automotive repair,”
and the business category as “car wash.”

77. Inthe EIDL application, TISONE falsely represented Rub A Dub
Marines’s gross revenue to be $362,000 and cost of goods sold to be $47,000 for the
year period preceding January 31, 2020. The application sought a $150,000 EIDL.

The application also claimed Rub a Dub Marines had four employees. Records from

the Florida Department of Revenue and Virginia Employment Commission revealed

33
no record of wages being paid to employees of Rub a Dub Marines in the States of
Florida and Virginia during 2019 and 2020.

78. During the review of TISONE’s EIDL #3 application, the SBA
requested various supporting documents. These supporting documents included,
among others, Rub a Dub Marines’s business bank statement and a copy of a
business lease and tax return as proof of the business’s existence. In response, on or
about November 14, 2020, TISONE submitted copies of property use agreements
and a lease agreement to the SBA as proof of business operations. The documents
purported to be executed with a real estate investment trust (REIT) that owns,
develops, leases, and manages more than 100 commercial properties and is
headquartered in Philadelphia, PA (the “REIT”). As part of the investigation, your
Affiant spoke with a representative with the REIT that confirmed the lease is not a
form used by the REIT and that the REIT had no record of the lease in their system.
Additionally, the lease is signed by an individual with the initials S.B. on behalf of
the REIT and the signature is dated June 1, 2015. Your Affiant confirmed that S.B.
stopped working for the REIT in 2014 and was not working for the REIT on June 1,
2015. Therefore, TISONE submitted a fraudulent lease agreement to the SBA as
proof of Rub a Dub Marines’s existence.

79. Additionally, TISONE submitted a false and fraudulent tax return to
the SBA during the EIDL #3 application process. On or about November 14, 2020,
the SBA spoke with TISONE on the phone and requested he submit a 1040 Schedule

C. On or about November 16, 2020, TISONE electronically submitted a 2019
34
individual tax return and a 2019 1040 Schedule C for Rub a Dub Marines. Of note,
the tax documents were electronically signed by TISONE and dated November 16,
2020, two days after the SBA requested that he submit a 1040 Schedule C. The 2019
1040 Schedule C listed the gross receipts for Rub a Dub Marines as $369,188 and the
cost of goods sold as $47,133. The Schedule C also listed the gross income for Rub a
Dub Marines as $313,682 and total expenses as $313,400. Rub a Dub Marines’s
income was therefore listed as $282 for the 2019 tax year. A review of TISONE’s
personal and business bank records showed no record of deposits that are consistent
with over $360,000 in gross receipts in 2019. Additionally, there were no records of
any withdrawals or debits that are consistent with $313,400 in expenses in 2019.

80. TISONE’s false and fraudulent representations on the EIDL #3
application and in supporting documentation caused the SBA to approve and fund a
$150,000 EIDL. On November 20, 2020, the SBA deposited $149,900 in EIDL funds
into a business checking and investment account ending in 39171 at Bank #2 (“Bank
#2 account ending in 39171”). The account was opened by TISONE on October 27,
2020, in the name of Rub a Dub Marines LLC dba Rub a Dub Eco Wash. TISONE
was the sole signatory on the account. The account and TISONE’s use of EIDL
funds will be further discussed in the Misuse of Covid Relief Funds section below.

TISONE’s False and Fraudulent MSLP Application for TEC Ventures, LLC
(Bank Fraud)

81. Onor about November 9, 2020, TEC Ventures submitted a fraudulent

MSLFP application to Lender #2, a federally insured bank, in violation of 18 U.S.C.

an
§ 1344. The Commercial Loan Application requested $9,000,000.00 through the
Main Street Priority Loan Facility (“Priority Loan Facility”). The application named
TEC Ventures LLC as the borrower and was signed by TISONE. The application
indicated that the business’s street address was 1775 Tysons Blvd 5th Floor, McLean,
Virginia, 22102, while the business’s mailing address and principal office address was
the Harbour Drive Residence.

82. In support of the application, TISONE submitted a document called
“Daniel Tisone Bio.” This document listed a name of “Daniel Joseph Tisone” and a
birth date of April 2, 1987. Likewise, TISONE submitted his Florida driver’s license.
The address listed on the driver’s license was the Harbour Drive Residence, which
was also listed on this loan application.

83. In further support of the application, TISONE provided Lender #2 with
materials describing TEC Ventures’s business activities and the purpose of the loan.
The documents generally describe TEC Ventures as a property developer. For
example, a document titled “Company History” called TEC Ventures a “holding
company that owns, operates, invests in, and develops a dynamic portfolio of high-
growth mixed-use properties in and around Washington, DC and South Florida.”
The document also claimed that “TEC Ventures LLC builds tech enabled property
amenities for use by both consumers and Fortune 500 mobility companies” and that
“TEC Venture’s portfolio currently comprises of over 200 high-quality office,
multifamily and retail assets.” In addition, a document called “Key Customers &

Suppliers” claimed that TEC Ventures partnered with landlords and parking
36
operators to offer “amenities” to tenants and “fleet” companies that regularly used
their parking garages. These purported services involved “integrating” TEC

“e

Venture’s “technology” into automobiles built by various major manufacturers.
Further, a document titled “MSLP Use of Loan Proceeds” represented that TEC
Ventures would use most of the requested loan amount to purchase and improve real
estate.

84. TISONE also submitted information regarding TEC Ventures’s
finances in support of the application. Specifically, he submitted TEC Ventures’s
corporate income tax returns for the years 2018 and 2019, as well as “Profit & Loss
by Business” statements for 2018, 2019, and the first nine months of 2020. These
materials reported significant revenues earned and wages paid between 2018 and
2020. Thus, the application created the impression that TEC Ventures’s activities had
generated revenues and had required paid employees. Your Affiant’s review of TEC
Ventures’s and TISONE’s personal and business bank records for this period of time
showed no evidence of incoming deposits or credits consistent with the gross receipts
or sales contained in TEC Ventures corporate tax filings. Also, in TEC Ventures’s
2019 corporate tax filing, the business declared $1,666,744 in depreciation for
machinery and equipment purchased in 2019. A review of TEC Ventures’s and
TISONE’s personal and business bank records showed no record of the purchase of

$1,666,744 in machinery and or equipment. Additionally, it should be noted that

TEC Ventures’s 2018 and 2019 corporate tax filings were filed on or around October

EH
30, 2020, 10 days before TEC Ventures submitted its MSLP loan application to
Lender #2.

85. In reliance on these representations, Lender #2 created a credit
memorandum that recommended issuing a loan of $1,500,000.00 to TEC Ventures
under the Priority Loan Facility. The memorandum explained that this amount was
approximately six times TEC Ventures’s EBITDA for 2019. The memorandum
summarized TEC Ventures’s financial information, relying on tax returns as the
“source of financials” for 2018 and 2019 and “internal” documents as the source for
the first nine months of 2020. The 2020 revenue referenced in the credit
memorandum matched the amount reported in the TEC Ventures’s Profit & Loss
statement submitted by TISONE for January-September 2020. The credit
memorandum also repeated much of the information from TEC Ventures’s
application regarding the nature of the business, its clientele, the holdings of its
portfolio, its need to pivot to residential real estate during the pandemic, and the
representation that TEC Ventures would use the proceeds for working capital and
operating expenses.

86. On or about November 20, 2020, Lender #2 sent a Commercial Loan
Commitment Letter to TEC Ventures. The letter stated that Lender #2 had approved
a loan to TEC Ventures in the amount of $1,500,000.00, subject to various terms and
conditions. On November 23, 2020, the letter was “agreed and accepted by” TEC

Ventures and signed by “Daniel Tisone, president,” with TISONE’s signature.

38
87. On November 30, 2020, Lender #2 issued a “Loan Summary &
Approval” that formally approved a loan to TEC Ventures in the amount of
$1,500,000.00. After processing fees, Lender #2 deposited $1,476,093.00 into TEC
Ventures’s Lender #2 business account ending in 2616 (“Lender #2 account ending
in 2616”). This account was opened on December 3, 2020, with TISONE and his
father, A.T., listed as authorized signers. The use of the MSLP funds will be further
discussed in the Misuse of Covid Relief Funds section below.

88. On December 10, 2020, Lender #2 and TEC Ventures entered a signed
and notarized Loan Agreement providing that Lender #2 would loan $1,500,000.00
to TEC Ventures. In your Affiant’s experience, it is not uncommon for banks to fund
loans before loan agreements are signed. The agreement was signed by TISONE.
TISONE’s title on the agreement was “Manager and Sole Member.” The agreement
was also signed by the senior vice president of Lender #2.

89. The signed and notarized Loan Agreement contained a number of
“Additional Covenants of Borrower.” One such covenant, titled “Negative Pledge,”
was that TEC Ventures would not incur liens on any of its assets:

Borrower will not, nor will it permit any subsidiary to,
create, incur, assume, or suffer to exist any lien upon any of
its property, assets, or revenues, whether now owned or
hereafter acquired, securing any debt for borrowed money
or any obligations evidenced by a bond, debenture, note
loan agreement, or other similar instrument, or any
guaranty of the foregoing, other than liens securing the
Loan.

32
90. The parties additionally agreed that TEC Ventures “shall not assign this
Agreement or the moneys to be advanced hereunder or convey, assign, pledge,
encumber or mortgage any part of the collateral for the Loan without the prior
written consent of [Lender #2].”

91. On December 11, 2020, TEC Ventures provided certifications and
covenants required of all borrowers through the Priority Loan Facility. The
certifications and covenants were signed by TISONE, whose title was “CEO.” It was
also signed by A.T., whose title was “CFO.” Among other certifications, TEC
Ventures certified that the financial records it had provided to Lender #2 “fairly
present, in all material respects, the financial condition of such entities for the period
covered thereby . . ., consistently applied, and that such adjusted EBITDA
calculations are true and correct in all material respects.” On or about December 24,
2020, in reliance on TEC Ventures’s certifications and covenants, MS Facilities LLC
purchased 95% of the loan participation from Lender #2, for a total purchase
amount of $1,425,000.00.

92. Among other types of financial disclosures, the Loan Agreement
required TEC Ventures to submit its federal tax return to Lender #2 by May 1 of
each year. On or about October 31, 2021, TISONE emailed Lender #2 a 2020 tax
return for Daniel Tisone. Schedule C of the tax return, titled “Profit or Loss from
Business,” purported to show income and receipts for TEC Ventures. It should be
noted that for tax years 2018 and 2019, TEC Ventures reported its taxes in the form

of an 1120 corporate tax filing for both TEC Ventures and its subsidiary
40
corporations. TISONE, for tax year 2020, changed TEC Venture’s tax filing to a
1040 Schedule C, which would be consistent with the tax filing of a sole
proprietorship.

93. Much of the information that TISONE supplied, and upon which
Lender #2 relied, was false, misleading, and fraudulent. In addition, some of TEC
Ventures’s certifications and covenants, which TISONE signed, were false and
fraudulent. Most notably, TISONE 1) falsified TEC Ventures’s revenue totals
between January and September 2020, 2) falsified TEC Ventures’s reported wage
payments, 3) falsely certified TEC Ventures’s eligibility to participate in the Priority
Loan Facility, 4) falsely promised that TEC Ventures would not create liens on its
assets or pledge MSLP funds as collateral for additional loans, and 5) after the loan
was approved and entered the MSLP, falsified TEC Ventures’s revenue totals on a
purported 2020 tax return.

TISONE’s Misuse of COVID Relief Funds
(Illegal Monetary Transactions)

94. Between May 8, 2020 and April 22, 2021, a total of approximately
$2,505 ,347.17 in COVID relief loan funds were deposited into financial accounts
that TISONE controlled and maintained. The details of which accounts received

COVID relief funds are summarized below.

41
Account Overview

Account | Date Opened | Signer(s) | PPP/EIDL/EIDG/MSLP | Total Deposited
Bank #2 02/19/2019 Daniel PPP #1, PPP #2, PPP #3, $520,800.00
38001 Tisone EIDL #1, EIDG
Bank #2 07/30/2020 Daniel PPP #5, EIDL #2 $253,700.00
39000 Tisone
Bank #2 10/27/2020 Daniel EIDL #3 $149,900.00
3917] Tisone
Lender #2 | 12/03/2020 Daniel MSLP $1,476,093.00
2616 Tisone
A.T.
Bank #2 12/29/2020 Daniel PPP #4 $104,854.17
39323 Tisone
Total $2,505,347.17
Bank#2 Account Ending in 38001
95. On or about February 19, 2019, Bank #2 account ending in 38001 and

titled “Daniel Tisone” was opened at Bank #2, with TISONE listed as the sole

signatory on the account. The account could be used as both a personal checking

account and as a primary brokerage investment account to purchase stocks and other

securities. Bank #2 account ending in 38001 received approximately $520,800 in

PPP, EIDL, and EIDG funds. Prior to the initial deposit of PPP #2 funds on May 8,

2020, the account had a balance of $0.00.

96.

Between May 8, 2020 and July 31, 2020, 96% of the total funds received

into the account consisted of COVID relief funds received either directly and

indirectly. Outflows during the same period consisted of the purchase of

42

stocks/securities (50%) and inter-account transfers (50%). For instance, after
TISONE received $130,600 in PPP #2 funds on May 8, 2020, and $103,800 in
PPP#1 funds on May 21, 2020, TISONE used the funds to purchase bulk shares of
stock. Specifically, between May 18, 2020 and May 21, 2020, TISONE misused PPP
funds to conduct four (4) separate bulk stock share purchase transactions in excess of
$10,000 in violation of 18 U.S.C. § 1957. The dates and amounts are summarized as

follows:

Date Amount

05/18/2020 | $18,082.90

05/18/2020 | $19,653.60

05/19/2020 | $16,080.00

05/21/2020 | $25,000.00

97. On May 22, 2020, the balance of Bank #2 account ending in 38001 was
$85,853.50, which consisted of remaining funds from PPP #1 and PPP #2. On May
22, 2020, two deposits from the SBA were received totaling $155,900. This was the
receipt of EIDL #1 funds and EIDG funds. Between May 27, 2020 and July 16,
2020, the PPP and EIDL funds in Bank #2 account ending in 38001 were used to
conduct nine (9) separate bulk stock share and securities purchase transactions
totaling $192,024.03. The date and amount of each transaction, 8 of which were in

excess of $10,000 in violation of 18 U.S.C. § 1957, are summarized as follows:

43
Date Amount
05/27/2020 $24,887.10
05/27/2020 $25,000.00
05/29/2020 $7,533.02
05/29/2020 $13,067.95
06/04/2020 $25,352.16
06/05/2020 $22,454.80
06/11/2020 $25,000.00
06/30/2020 $25,000.00

7/16/2020 $23,729.00

98. On July 31, 2020, PPP #3 funds in the amount of $130,500 were
deposited into Bank #2 account ending in 38001 for Rub a Dub Atlantic. On the
same date, TISONE transferred the funds to Bank #2 account ending in 39000.
TISONE’s use of the PPP #3 funds are detailed below.

Bank #2 Account Ending in 39000

99. Onor about July 30, 2020, Bank #2 account ending in 39000 and titled
“RUBADUB ATLANTIC LLC” was opened at Bank #2, with TISONE listed as
the sole signatory on the account. The account could be used as both a business
checking account and as a primary brokerage investment account to purchase stocks

and other securities. On July 31, 2020, Bank #2 account ending in 39001 received an

td
inter-account transfer of $130,500 in PPP #3 funds from Bank #2 account ending in
38001. Prior to the transfer of PPP #3 funds, the account had a balance of $0.00.

100. Upon receipt of the PPP #3 funds transfer, TISONE conducted two
transactions of bulk stock share purchases for more than $10,000, in violation of 18
U.S.C. § 1957. The first, was on August 26, 2020, in the amount of $15,000, and the
second was on September 30, 2020, also in the amount of $15,000. On October 9,
2020, TISONE misused $15,632.89 in PPP #3 funds to pay off the balance on a
personal credit card, also in violation of 18 U.S.C. § 1957. A review of the personal
credit card’s statements revealed TISONE primarily uses the card for personal use, to
include restaurant, retail, and grocery purchases.

101. On October 23, 2020, $149,900 in EIDL #2 funds for Rub a Dub
Atlantic were deposited by the SBA into Bank #2 account ending in 39000. Prior to
the receipt of the EIDL #2 funds, the account balance was $0.52. The EIDL #2
funds were depleted from the account by November 3, 2020. On October 30, 2020,
$10,000 of the funds were used to purchase investment securities.

102. On November 3, 2020, TISONE made an inter-account transfer of
EIDL #2 funds to Bank #2 account ending in 39178 in the amount of $138,839.
Bank #2 account ending in 39178, titled “796 Ketch LLC,” was a business checking
and investment account that was opened on November 2, 2020. TISONE was the
account’s sole signatory. Prior to the funds transfer, the account’s balance was $0.00.

103. On November 5, 2020, TISONE made another inter-account transfer.

This time, TISONE transferred $138,839 (EIDL #2 funds) from Bank #2 account
45
ending in 39178 to Bank #2 account ending in 38001. An email from TISONE to a
representative of Bank #2 on the same date, detailed the purpose of the inter-account
transfer was to fund a wire transfer from Bank #2 account ending in 38001 for the
purchase of a property in Naples, FL. On the same date, $185,000 (which consisted
of $138,839 in EIDL #2 funds) was wired from Bank #2 account ending in 38001 to
a law firm for the purchase of a property located at 796 Ketch Dr. Naples, FL
(“Ketch Residence’’).

104. On April 22, 2021, $103,800 in Second Draw PPP #5 funds for Rub a
Dub Atlantic were deposited into Bank #2 account ending 39000. Prior to the receipt
of the PPP #5 funds, the account balance was $17.21. On May 4, 2021 and June 4,
2021, TISONE used $12,819.14 and $15,619.51 in PPP #5 funds to pay the balance
on his personal credit card, in violation of 18 U.S.C. § 1957. A review of the
personal credit card’s statements for the months of April and May of 2021, revealed
TISONE primarily used the card for personal use, which included payments for
airfare, hotel stays, an online dating service, retail purchases, and groceries.
Additionally, on June 23, 2021, $12,000 in PPP# 5 funds were used by TISONE to
make a bulk purchase of stock shares.

Bank #2 Account Ending in 39171

105. On or about October 27, 2020, Bank #2 account ending in 39171 and
titled “Rub a Dub Marines LLC dba rubadubeco wash” was opened at Bank #2,
with TISONE listed as the sole signatory on the account. The account could be used

as both a business checking account and as a primary brokerage investment account

46
to purchase stocks and other securities. On November 20, 2020, $149,900 in EIDL
#3 funds were deposited by the SBA into Bank #2 account ending in 39171. Prior to
the deposit of EIDL #3 funds the account had a balance of $0.00.

106. On December 16, 2020, $12,000 in EIDL #3 funds were used by
TISONE to purchase investment securities. Further, on December 21, 2021,
TISONE transferred $15,600 in EIDL #3 funds to Bank #2 account ending in 39178.
The balance of Bank #2 account ending in 39178 at the time of the transfer was
$82.86. On December 29, 2020, $12,040.88 of the $15,600 in EIDL #3 funds
transferred to Bank #2 account ending in 39178 were used by TISONE for a
mortgage payment for the Ketch Residence, in violation of 18 U.S.C. § 1957.

Lender #2 Account Ending in 2616

107. On or about December 3, 2020, Lender #2 account ending in 2616 and
titled “TEC Ventures LLC” was opened at Lender #2, with TISONE and his father
A.T. listed as the account’s sole signatories. The account was a business checking
account. On December 28, 2020, a total of $1,476,093 in MSLP were deposited into
the account by Lender #2. The account balance before the deposit was $0.00. On or
about January 5, 2021, TISONE issued a $1,000,000 check from Lender #2 ending
in 2616 to “TEC Ventures LLC.” The check was signed by TISONE. On the same
date, TISONE deposited the $1,000,000 MSLP funds check into TEC Ventures’s
Bank #2 account ending in 39323.

108. TISONE used a portion of the remaining MSLP funds in the Lender #2

ending in 2616 account to purchase a residence located at 1530 Mandarin Rd.

47
Naples, FL (“Mandarin Residence”). TISONE issued a total of two checks, totaling
$98,500, to a law firm for the purchase of the Mandarin Residence, in violation of 18
U.S.C. § 1957. The first, was a $5,000 check from the Lender #2 account ending in
2616 on January 19, 2021. The second, was a $93,500.00 check from the Lender #2
account ending in 2616 on February 1, 2021. Both checks were signed by TISONE.
A review of the Mandarin Residence’s purchase and deed records showed the
property was initially purchased and deeded in TISONE’s name.

Bank #2 Account Ending in 39323

109. On or about December 29, 2020, Bank #2 account ending in 39393 and
titled “TEC Ventures LLC” was opened at Bank #2, with TISONE listed as the sole
signatory on the account. The account could be used as both a business checking
account and as a primary brokerage investment account to purchase stocks and other
securities. As discussed above, on January 5, 2021, $1,000,000 in MSLP funds was
deposited by TISONE into the account. Additionally, on February 8, 2021,
$104,854.17 in Second Draw PPP #4 funds for TEC Ventures were deposited by
Lender #1 into the account. Prior to the deposit of MSLP and PPP #5 loan
proceeds, the account’s balance was $0.00.

110. Between January 12, 2021 and March 30, 2021, TISONE used
approximately $1,098,708.67 in MSLP and PPP #5 funds on approximately 34
separate bulk stock and securities investment purchase transactions of over $10,000.
Each of these transactions in excess of $10,000 represents a separate violation of 18

U.S.C.§ 1957.
48
CONCLUSION

Based on the foregoing, I have probable cause to believe that Daniel Joseph
TISONE has committed violations of 18 U.S.C. §§ 1343 (Wire Fraud), 1344 (Bank
Fraud) and 1957 (Illegal Monetary Transaction). I therefore request that the Court
issue a criminal complaint and arrest warrant for Daniel Joseph TISONE.

Request for Sealing

It is respectfully requested that the Court issue an order sealing, until further
order of the Court, all papers submitted in support of the requested criminal
complaint and arrest warrant. I believe that sealing these documents is necessary
because any disclosure of the information at this time may cause flight from
prosecution, cause destruction of or tampering with evidence, cause intimidation of
potential witnesses, or otherwise seriously jeopardize the ongoing investigation.
Premature disclosure of the affidavit, the criminal complaint, and arrest warrant may

adversely affect the integrity of the investigation

GK NAL

GracéM. Bruno
Special Agent
Federal Bureau of Investigation

Sworn ang subscribed to me
this 4 day of March, 2022, in Fort Myers, Florida.

JUDGE DOUGLAS N. FRAZIER
SENIOR UNITED STATES MAGISTRATE JUDGE

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