Information — United States v. Baker (Dkt. 3, W.D. Wash.)

Summary

The U.S. Attorney charged Darlene A. Baker, also known as Darlene Piper, with wire fraud in this information filed August 18, 2023 in Case No. 3:23-cr-05254 in the Western District of Washington. It alleges that from about March 2020 through August 2021 Baker sought approximately $265,000 and obtained approximately $81,000 from PPP and EIDL programs. Baker claimed lost business income and payroll obligations while working throughout the period, earning significant income and having no employee payroll obligations, and used the money for personal expenses. The first PPP application is dated on or about March 25, 2020.

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Case 3:23-cr-05254-DGE Document 3 Filed 08/18/23 Page 1 of 8

FILED LODGED

Aug 18, 2023

CLERK U.S. DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON AT TACOMA
BY DEPUTY

UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF WASHINGTON
AT TACOMA

UNITED STATES OF AMERICA, NO. 3:23-cr-05254-DGE
Plaintiff, INFORMATION
(Felony)
V.
DARLENE A. BAKER,
a/k/a DARLENE PIPER,

Defendant.

The United States Attorney charges that:
COUNT 1
(Wire Fraud)

A. Overview

I. From about March of 2020 through August of 2021, Defendant DARLENE
A. BAKER fraudulently sought approximately $265,000, and obtained approximately
$81,000, from COVID-19 pandemic relief programs, namely the Paycheck Protection
Program (PPP) administered by the U.S. Small Business Administration (SBA) and the
Economic Injury Disaster Loan (EIDL) Program administered by SBA. BAKER made

false statements in connection with her applications for funds and for loan forgiveness.

Information - | UNITED STATES ATTORNEY
United States v. Baker 700 STEWART STREET, SUITE 5220
USAO# 2022R0043 | SEATTLE, WASHINGTON 98101

(206) 553-7970

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Case 3:23-cr-05254-DGE Document 3 Filed 08/18/23 Page 2 of 8

BAKER falsely claimed to have lost business income due to the COVID-19 pandemic,
and falsely claimed that she would use relief funds to meet employee payroll obligations.
In truth, as BAKER knew, she was working throughout the relevant timeframe, continued
to earn significant income during the pandemic, and had no employee payroll obligations.
Rather, BAKER used, and intended to use, the relief funds for personal expenses.

B. Background

The Pandemic Relief Programs

2. Paycheck Protection Program. PPP was a COVID-19 pandemic relief
program administered by SBA that provided forgivable loans to small businesses for job
retention and certain other expenses. The PPP permitted participating third-party lenders
to approve and disburse SBA-backed PPP loans to cover payroll, fixed debts, utilities,
rent/mortgage, accounts payable and other bills incurred by qualifying businesses during,
and resulting from, the COVID-19 pandemic. PPP loans were fully guaranteed by the
SBA. In the event of default, SBA will fully satisfy the lender for any balance remaining
on the loan. Further, SBA will forgive any loan up to 100 percent if the borrower uses
the funds for specified purposes.

3. To obtain a PPP loan, a qualifying business, which included certain sole
proprietorships, had to submit a PPP loan application, which was 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 to be eligible to obtain the PPP loan, including that the business
was in operation on February 15, 2020, and either had employees for whom it paid
salaries and payroll taxes or paid independent contractors. A business applying for a PPP
loan was required to provide documentation showing its payroll expenses, such as filed

federal income tax documents.

Information - 2 UNITED STATES ATTORNEY
United States v. Baker 700 STEWART STREET, SUITE 5220
USAO# 2022R0043 1 SEATTLE, WASHINGTON 98101

(206) 553-7970

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Case 3:23-cr-05254-DGE Document 3 Filed 08/18/23 Page 3 of 8

4. Once approved, the business received the PPP loan proceeds via an
electronic funds transfer from the third-party lender to a financial account under the
control of the business. The proceeds of a PPP loan could be used for certain specified
items, such as payroll costs, costs related to the continuation of group health care
benefits, or mortgage interest payments.

5. The proceeds of a PPP loan were not permitted to be used by the borrowers
to purchase consumer goods, automobiles, personal residences, clothing, jewelry, to pay
the borrower’s personal federal income taxes, or to fund the borrower’s ordinary day-to-
day living expenses unrelated to the specified authorized expenses.

6. Economic Injury Disaster Loan Program. SBA also administers the
EIDL Program, which provides low-interest financing to small businesses and non-profit
organizations in regions affected by declared disasters. In March 2020, the Coronavirus
Aid, Relief, and Economic Security (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. The CARES Act and subsequent legislation
also authorized the SBA to issue advances of up to $10,000 to small businesses within
three days of applying for an EIDL. EIDL Advances did not have to be repaid. EIDL
funds can be used for payroll expenses, sick leave, production costs, and business
obligations, such as debts, rent, and mortgage payments.

7. A qualifying business, which may include sole proprietorships, applying for
an EIDL must 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 cost of goods sold in the 12-month period preceding the
disaster. The applicant must also certify that all of the information in the application is

true and correct to the best of the applicant’s knowledge.

Information - 3 UNITED STATES ATTORNEY
United States v. Baker 700 STEWART STREET, SUITE 5220
USAO# 2022R0043 1 SEATTLE, WASHINGTON 98101

(206) 553-7970

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Case 3:23-cr-05254-DGE Document 3 Filed 08/18/23 Page 4 of 8

DARLENE BAKER’s Background

8. At all relevant times, BAKER resided in Kitsap County, Washington.

7. From approximately June of 2017 through March of 2022, BAKER worked
as a contractor, providing accounting and related services to a real estate investment firm
in Gig Harbor, Washington. The contract work was initially part-time in 2017-2018, and
full-time thereafter.

10. The firm initially paid BAKER $35 an hour, and raised her salary to $45 an
hour in 2019. During the relevant time-period (i.e. 2020 and 2021) BAKER earned
approximately $145,000.

Mo The Scheme and Artifice to Defraud

11. Beginning on or about March of 2020, and continuing until at least on or
about August of 2021, in Kitsap County, within the Western District of Washington, and
elsewhere, Defendant DARLENE A. BAKER knowingly devised a scheme and artifice
to defraud and to obtain money and property by means of false and fraudulent pretenses
and representations and the concealment of material facts.

12. The essence of the scheme and artifice to defraud was to fraudulently
obtain federally funded pandemic-related benefits and assistance by submitting
fraudulent applications, documents, and/or claims to administrating government agencies
and financial institutions and/or lenders. The scheme and artifice to defraud occurred in
relation to, and involved, benefit payments authorized, transmitted, transferred,
disbursed, and paid in connection with a presidentially-declared major disaster and
emergency.

D. Manner and Means
13. Throughout the COVID-19 pandemic, the Defendant defrauded various

pandemic relief programs to obtain PPP and EIDL funds.

Information - 4 UNITED STATES ATTORNEY
United States v. Baker 700 STEWART STREET, SUITE 5220
USAO# 2022R0043 1 SEATTLE, WASHINGTON 98101

(206) 553-7970

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Case 3:23-cr-05254-DGE Document 3 Filed 08/18/23 Page 5 of 8

14. On or about March 25, 2020, BAKER applied for a PPP loan that was
designated with an SBA loan number ending in -7204. The loan was approved and
$18,400 was disbursed to BAKER on or about April 29, 2020. The lender was Olympia
Federal Savings and Loan Association (“OFSLA”) in Olympia, Washington.

15. On or about March 25, 2021, BAKER applied to the SBA for loan
forgiveness for loan -7204. Her application was granted. The SBA paid $18,571.13 in
principal and interest to the lender on or about March 31, 2021.

16. Onor about April 3, 2020, BAKER applied to the SBA for an EIDL
designated with an SBA number ending in -7660. The application was granted, and
BAKER received $45,400 in funds on or about June 30, 2020.

17. Onor about March 27, 2021, BAKER received a second-draw PPP
disbursement of $18,492 from OFSLA. BAKER applied for and received forgiveness for
this loan, and the SBA paid $18,559.29 in principal and interest to OFSLA on or about
August 5, 2021.

18. Onor about April 22, 2021, BAKER applied for another EIDL in the
amount of $184,600. This application was transmitted electronically from the Western
District of Washington to the SBA via servers in lowa. This application was denied on or
about June 7, 2021.

19. BAKER knowingly made false and misleading material statements and
omissions in connection with each of the applications described above. Among other
things, BAKER falsely claimed that relief funds would be, and had been, used for payroll
costs and other permitted expenses, when in fact BAKER intended to use, and did use,
the funds for personal expenses. BAKER also falsely claimed to have lost all business
income due to the pandemic, when in fact BAKER continued to earn significant income
during the pandemic.

20. For example, in connection with her request for additional EIDL funds,

Information - 5 UNITED STATES ATTORNEY
United States v. Baker 700 STEWART STREET, SUITE 5220
USAO# 2022R0043 1 SEATTLE, WASHINGTON 98101

(206) 553-7970

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Case 3:23-cr-05254-DGE Document 3 Filed 08/18/23 Page 6 of 8

BAKER sent an email to an SBA representative on or about April 27, 2021, claiming to
have “100% lost income since COVID.”
E. Execution of the Scheme and Artifice to Defraud

21. Onor about April 22, 2021, in Kitsap County, within the Western District
of Washington, and elsewhere, for the purpose of executing and attempting to execute
this scheme and artifice to defraud, Defendant DARLENE A. BAKER, did knowingly
transmit and cause to be transmitted, by wire communication in interstate and foreign
commerce, a writing, sign, signal, picture and sound, namely, an EIDL application
originating in Kitsap County, Washington, that was transmitted to an SBA server in Iowa.

All in violation of Title 18, United States Code, Section 1343.

COUNT 2
(False Statement)

22. The allegations set forth in Paragraphs 1 through 2 of this Information are
re-alleged and incorporated as if fully set forth herein.

23. Onor about November 19, 2021, in Kitsap County, within the Western
District of Washington, the Defendant DARLENE A. BAKER did willfully and
knowingly make a materially false, fictitious, and fraudulent statement and representation
in a matter within the jurisdiction of the executive branch of the Government of the
United States, by completing and submitting to the United States Department of Justice,
specifically, to the Financial Litigation United for the United States Attorney’s Office for
the Western District of Washington, in Seattle, Washington, under penalty of perjury, a
Financial Disclosure Statement that stated that BAKER (using the name DARLENE

PIPER) was “unemployed currently” and that responded “N/A” to a question about

//

//
Information - 6 UNITED STATES ATTORNEY
United States v. Baker 700 STEWART STREET, SUITE 5220
USAO# 2022R00431 SEATTLE, WASHINGTON 98101

(206) 553-7970

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Case 3:23-cr-05254-DGE Document 3 Filed 08/18/23 Page 7 of 8

current salary, when in truth BAKER was working full time and earning several thousand

dollars per month.

All in violation of Title 18, United States Code, Section 1001(a)(2).

FORFEITURE ALLEGATIONS

The allegations contained in Counts 1—21 of this Information are hereby realleged
and incorporated by reference for the purpose of alleging forfeiture.

Upon conviction of the offense alleged in Count 1, DARLENE A. BAKER shall
forfeit to the United States pursuant to Title 18, United States Code, Section
981(a)(1)(C), by way of Title 28, United States Code, Section 2461(c), any property that
constitutes or is traceable to proceeds of the wire fraud scheme described above. This
property includes, but is not limited to, a judgment for a sum of money reflecting the
proceeds the defendant obtained as a result of the wire fraud scheme.

Substitute Assets. If any of the above-described forfeitable property, 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;

e 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,
it is the intent of the United States to seek the forfeiture of any other property of the
//
//
Information - 7 UNITED STATES ATTORNEY
United States v. Baker 700 STEWART STREET, SUITE 5220
USAO# 2022R0043 1 SEATTLE, WASHINGTON 98101

(206) 553-7970

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Case 3:23-cr-05254-DGE Document 3 Filed 08/18/23 Page 8 of 8

defendant, up to the value of the above-described forfeitable property, pursuant to

Title 21, United States Code, Section 853(p).

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DATED this NSE day of August, 2023. wa

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TESSA M. GORMAN
Acting United States Attorney

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(SETH WILKINSON
“Assistant United States Attorney

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/MIQHAEL DION ~
Assistant United States Attorney

Information - 8 UNITED STATES ATTORNEY
United States v. Baker 700 STEWART STREET, SUITE 5220
USAO# 2022R0043 1 SEATTLE, WASHINGTON 98101

(206) 553-7970

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