Information — United States v. Anthony Zaghab

Record facts

U.S. District Court, District of Colorado · No. 1:21-cr-00188-RBJ · Doc. 1 · 2021-06-08 · Docket on CourtListener

Full text

1 
IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF COLORADO 
Criminal Case No.   
UNITED STATES OF AMERICA, 
Plaintiff, 
v. 
1. ANTHONY ZAGHAB,
Defendant. 
INFORMATION 
Count 1, 18 U.S.C. § 1343 
The Acting United States Attorney charges: 
Background  
1.
The United States Small Business Administration (“SBA”) is an executive-
branch agency of the United States government that provides support to entrepreneurs 
and small businesses. 
2.
In or around March 2020, the Coronavirus Aid, Relief, and Economic
Security (“CARES”) Act was enacted to provide emergency financial assistance to the 
millions of Americans suffering adverse economic effects caused by the COVID-19 
pandemic.  The CARES Act established several new temporary programs and 
expanded existing programs, including programs created or administered by the SBA.  
3.
The Economic Injury Disaster Loan (“EIDL”) program was an SBA
program that provided low-interest financing to small businesses, renters, and 
21-cr-00188-RBJ
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homeowners in regions affected by declared disasters.   
4. 
The CARES Act authorized the SBA to provide EIDLs to eligible small 
businesses experiencing substantial financial disruptions due to the COVID-19 
pandemic.  In addition, the CARES Act authorized the SBA to issue advances of up to 
$10,000 to small businesses, known as Economic Injury Disaster Grants (EIDGs).  The 
amount of the advance was determined by the number of employees the applicant 
certified having.  The advances did not need to be repaid.   
5. 
In order to obtain an EIDL and/or EIDG, a qualifying business was 
required to submit an application to the SBA and provide information about its 
operations, such as the number of employees and the entity’s gross business revenues 
and cost of goods sold in the twelve months prior to January 31, 2020.  The amount of 
the loan, if approved, was determined based, in part, on the information provided 
concerning the number of employees, gross revenue, and cost of goods.   
6. 
Any funds issued under an EIDL or EIDG were issued directly by the SBA.  
EIDL funds were permitted to be used for payroll expenses, sick leave, production 
costs, and business obligations, such as debts, rent, and mortgage payments.  
7. 
Another source of relief provided by the CARES Act was the authorization 
of forgivable loans to small businesses for job retention and certain other expenses, 
through a program referred to as the Paycheck Protection Program (“PPP”).   
8. 
In order to obtain a PPP loan, the authorized representative of a business 
was required to state the business’s average monthly payroll expenses and number of 
employees.  These figures were used to calculate the amount of money the small 
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business was eligible to receive under the PPP.   
9. 
A participating lender would then process the PPP loan application.  If the 
PPP loan application was approved, the participating lender funded the PPP loan using 
its own monies, which were fully guaranteed by the SBA.   
10. 
Lender 1, based in New Jersey, participated in the PPP as a lender to 
small businesses.  
11. 
The Colorado Department of Labor & Employment (“CDLE”) administered 
another source of pandemic relief, the Pandemic Unemployment Assistance (“PUA”) 
program.  PUA was designed to provide unemployment benefits to workers affected by 
the pandemic who were not otherwise eligible for regular unemployment benefits.  PUA 
was funded in part by the State of Colorado and in part by the United States 
government.   
Business Entities  
12. 
At all times relevant to this Information, the defendant, ANTHONY 
ZAGHAB, was a resident of the State and District of Colorado.   
13. 
ZAGHAB owned or controlled corporate entities, all of which had 
registered business addresses in Colorado, including the following: MKZ Investments 
Inc, Zippy Document Preparation & Tax, Kloud Heads Smoke Shop & Vape, WSI 
Marketing & Promotions Inc, and Service Wand Inc.   
14. 
ZAGHAB also claimed to own or control entities bearing his name 
(Anthony Zaghab) and the names of family members (I.Z., H.Z., R.D., and F.A.).   
 
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The Scheme To Defraud 
15. 
Beginning in or around April 29, 2020, and continuing until in or around 
February 6, 2021, within the State and District of Colorado and elsewhere, ZAGHAB, 
knowingly and with intent to defraud, devised, participated in, executed, and attempted 
to execute a scheme and artifice to defraud the United States, the State of Colorado, 
and Lender 1 to obtain money and property by means of materially false and fraudulent 
pretenses, representations, promises, and the concealment of material facts.  
16. 
As part of the scheme to defraud, ZAGHAB submitted false and fraudulent 
EIDL and PPP applications to the SBA and to Lender 1 and received payments totaling 
over $660,000 based on those fraudulent applications.    
17. 
As further part of the scheme, ZAGHAB claimed and received over 
$40,000 in unemployment insurance benefits on behalf of ineligible family members 
without their knowledge or consent.   
Manner and Means of the Scheme to Defraud 
18. 
The fraudulent scheme operated and was carried out, in substance, as 
follows: 
EIDL Scheme  
19. 
ZAGHAB submitted and caused to be submitted numerous fraudulent 
EIDL applications to the SBA.   
20. 
The SBA funded five of these EIDLs for a total of approximately $517,300, 
plus an additional $31,000 in EIDGs for these five entities.  The approved EIDL 
applications included the following:                                                           
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21. 
ZAGHAB falsely represented that the information provided in the EIDL 
applications was true and accurate.  Specifically, as forth in the table above, ZAGHAB 
falsely stated the number of employees, the purported gross revenues, and the 
purported cost of goods sold for each of these entities.   
22. 
ZAGHAB falsely represented that Kloud Heads Smoke Shop & Vape was 
established on January 1, 2019, when in fact ZAGHAB registered it with the Colorado 
Secretary of State on or about April 29, 2020.  Similarly, ZAGHAB inflated the 
employees, revenues and costs for MKZ Investments in the twelve months prior to 
January 31, 2020, when in fact it was in delinquent status with the Colorado Secretary 
 
1 Initials have been used to denote fictitious business entities bearing the names of 
ZAGHAB’s family members. 
Business 
Name 
Applicant 
Name 
Loan 
Amount 
Grant 
Amount 
Claimed 
Number of 
Employees 
Claimed 
Gross 
Revenue 
Claimed 
Cost of 
Goods 
Sold 
MKZ 
Investments 
Inc 
Anthony 
Zaghab 
$44,300 
$5,000 
5 
$100,000 
$1,500 
Anthony 
Zaghab 
Anthony 
Zaghab 
$150,000 
$5,000 
5 
$400,000 
$2,000 
Zippy 
Document 
Preparation 
& Tax 
Anthony 
Zaghab 
$150,000 
$10,000 
10 
$1,000,000 
$2,500 
Kloud 
Heads 
Smoke 
Shop & 
Vape 
Anthony 
Zaghab 
$150,000 
$10,000 
10 
$1,000,000 
$2,500 
I.Z.1 
I.Z. 
$23,000 
$1,000 
1 
$50,000 
$2,000 
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of State until ZAGHAB cured that status on June 17, 2020, the same day that ZAGHAB 
submitted the EIDL application.  
23. 
It was further part of the scheme that ZAGHAB applied for and obtained 
an EIDL for a fictitious business entity bearing the name of the defendant’s deceased 
father.   
24. 
ZAGHAB submitted numerous other EIDL applications that were declined 
or denied by the SBA, but still resulted in EIDGs ranging from $5,000 to $10,000 each, 
for a total of $35,000.  These grants included the following:  
Business 
Name 
Applicant 
Name 
Grant 
Amount 
Claimed 
Number of 
Employees 
Claimed 
Gross 
Revenue 
Claimed 
Cost of 
Goods 
Sold 
WSI Marketing 
& Promotions 
Inc 
Anthony 
Zaghab 
$5,000 
5 
$100,000 
$2,000 
Service Wand 
Inc 
Anthony 
Zaghab 
$10,000 
10 
$400,000 
$2,600 
H.Z. 
H.Z. 
$5,000 
5 
$400,000 
$1,500 
R.D. 
R.D. 
$10,000 
10 
$1,000,000 
$1,000 
F.A. 
F.A. 
$5,000 
5 
$50,000 
$2,000 
 
25. 
ZAGHAB falsely represented that the information provided in the EIDL 
applications that resulted in the EIDGs was true and accurate.  Specifically, as set forth 
in the table above, ZAGHAB falsely stated the number of employees, the purported 
gross revenues, and the purported cost of goods sold for each of these entities.  
ZAGHAB also falsely stated the date each of these businesses was established. 
26. 
It was further part of the scheme that ZAGHAB applied for and attempted 
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to obtain EIDLs on behalf of fictitious or purported business entities called “R.D.,” “H.Z.,” 
and “F.A.,” without the knowledge or consent of his family members bearing these 
names.  
27. 
In all of the above-described EIDL applications – both the ones that were 
granted and the ones that were declined but resulted in grants – ZAGHAB falsely 
represented that the funds would be used to pay payroll and other permissible 
expenses when, in fact, ZAGHAB used the majority of these proceeds for his personal 
benefit. 
PPP Scheme  
28. 
As further part of the scheme, ZAGHAB submitted and caused to be 
submitted four fraudulent PPP loan applications to Lender 1.  All four PPP loan 
applications were approved and funded.  
29. 
Specifically, on or about June 29, 2020, ZAGHAB submitted a PPP 
application for a business called “Anthony Zaghab.”  He falsely represented that the 
business had been established in 2019 and that it had a monthly payroll of $8,333.  He 
received a PPP loan in the amount of $20,833.   
30. 
On or about February 6, 2021, ZAGHAB submitted a second PPP 
application for the purported business entity “Anthony Zaghab.”  He again falsely 
represented that the business had been established in 2019 and that it had a monthly 
payroll of $8,333.  He received a PPP loan in the amount of $20,832.   
31. 
On or about June 29, 2020, ZAGHAB submitted a PPP application for a 
business called “H.Z..”  He falsely represented that the business had been established 
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in 2019 and that it had a monthly payroll of $8,333.  He received a PPP loan in the 
amount of $20,833.   
32. 
On or about February 3, 2021, ZAGHAB submitted a second PPP 
application for the purported business entity “H.Z..”  He again falsely represented that 
the business had been established in 2019 and that it had a monthly payroll of $8,333.  
He received a PPP loan in the amount of $20,832.   
33. 
ZAGHAB obtained a total of $83,330 in PPP loan proceeds based on 
these false representations, which he used for his own personal benefit instead of to 
pay permissible expenses, like payroll.   
Colorado Pandemic Unemployment Assistance Scheme  
34. 
As part of the scheme, ZAGHAB applied for and obtained approximately 
$41,500 in Colorado PUA for ineligible family members without their knowledge and 
consent. 
35. 
Specifically, in or around April 2020, ZAGHAB applied for and obtained 
PUA for his sister and his mother, both of whom resided outside of the United States.  
ZAGHAB submitted these applications without the knowledge of his sister or mother 
and used the money for his own personal benefit.   
36. 
In or around April 2020, ZAGHAB also applied for and obtained PUA for 
his father who is and was deceased at the time of the application and used the money 
for his own personal benefit.   
 
COUNT 1 
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 Wire Fraud, 18 U.S.C. § 1343 
 
37. 
The allegations in paragraphs 1 through 36 of this Information are re-
alleged and incorporated as if fully set forth herein.  
38. 
On or about June 23, 2020, in the State and District of Colorado, and 
elsewhere, defendant ANTHONY ZAGHAB, with intent to defraud, having devised and 
intended to devise a scheme and artifice to defraud, and to obtain money and property 
by means of materially false and fraudulent pretenses, representations, and promises, 
and attempting to do so, did, for the purpose of executing the scheme and artifice, 
knowingly transmit and cause to be transmitted by means of wire communication in 
interstate commerce certain writings, signs, signals, pictures, and sounds, to wit, the 
submission of an EIDL application for Zippy Document Preparation & Tax from 
Colorado to an SBA contractor’s server located in Iowa.  
All in violation of Title 18, United States Code, Section 1343. 
Forfeiture Allegation 
 
39. 
The allegations contained in Count 1 of this Information are hereby 
realleged and incorporated by reference for the purpose of alleging forfeiture pursuant 
to the provisions of Title 18, United States Code, Section 981(a)(1)(C) and Title 28, 
United States Code, Section 2461(c).  
 
40. 
Upon conviction of the violations alleged in Count 1 of this Information 
involving the commission of violations of Title 18, United States Code, Section 1343, 
defendant ANTHONY ZAGHAB shall forfeit to the United States, pursuant to Title 18, 
United States Code, Section 981(a)(1)(C), and Title 28, United States Code, Section 
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2461(c) any and all of the defendant‘s right, title and interest in all property constituting 
and derived from any proceeds the defendant obtained directly and indirectly as a result 
of such offense, including, but not limited to: 1) $120,070 in fraud proceeds the 
defendant voluntarily returned to the United States Secret Service (USSS); 2) more than 
$250,000 in fraud proceeds that were applied to the mortgage for a home held in the 
defendant’s wife’s name; and 3) a money judgment in the amount of the proceeds 
obtained by the defendant’s scheme. 
41. 
If any of the property described above, as a result of any act or omission 
of the defendant: 
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 subdivided without difficulty; 
 
it is the intent of the United States, pursuant to Title 21, United States Code, Section 
853(p), as incorporated by Title 28, United States Code, Section 2461(c), to seek  
 
 
 
 
 
forfeiture of any other property of the defendant up to the value of the forfeitable 
property. 
 
 
 
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MATTHEW T. KIRSCH 
Acting United States Attorney 
 
By: s/ Martha A. Paluch 
 
Martha A. Paluch 
By: s/ Rebecca S. Weber  
Rebecca S. Weber 
Assistant United States Attorney 
United States Attorney’s Office 
1801 California Street, Suite 1600 
Denver, Colorado 80202  
Telephone: (303) 454-0100 
Fax: (303) 454-0409 
E-mail: Martha.Paluch@usdoj.gov 
E-mail: Rebecca.Weber@usdoj.gov 
Attorneys for the United States 
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