Information — United States v. Keith McConnell (Middle District of Pennsylvania)
Summary
A criminal information filed June 4, 2021 in United States v. Keith McConnell, Case 1:21-cr-00167-KMN, in the Middle District of Pennsylvania. Count 1 charges wire fraud under Title 18, United States Code, Section 1343, alleging that McConnell, sole owner of KB Transportation LLC, submitted PPP applications claiming twenty-six employees and seeking $312,000.00 and then $155,200.00 when the company was not in business and had no employees. It states the lender wired $312,000.00 to McConnell's personal bank account on or about June 9, 2020, and that the proceeds went to a residential property, vehicles, stock market investments and personal expenditures. Count 2 charges money laundering conspiracy under Section 1956(h), and the forfeiture allegation lists real property in Carlisle, PA and vehicles.
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“Information — United States v. Keith McConnell (Middle District of Pennsylvania).”
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Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 1 of 12
UNITED STATES DISTRICT COURT
FOR THE MTDDLE DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA CRIM.lJO. 1:21-CR-
v
(Judge )
KEITH MCCONNELL
Defendant.
INFORMATION
THE UNITED STATES ATTORNEY CTIARGES:
COUNT 1
l8 U.S.C. $ 1343 - Wire Fraud
At all times relevant to this Criminal Information:
Background
1. Defendant KEITH MCCONNELL resided in Cumberland County,
within the Middle District of Pennsylvania.
2. KEITH MCCONNELL was the sole or,"ner of KB Transportation LLC,
a Pennsylvania limited liability company established on or about February 5,2015
with an address of l6 W. Main Street, Unit 1, Newville,PA 17241.
3. The United States Small Business Administr:ation (SBA) was an
executive branch agency of the United States government that provided suppoft to
entrepreneurs and small businesses. The mission of the SBlt was to maintain and
Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 2 of 12
strengthen the nation's economy by enabling the establishment and viability of small
businesses and by assisting in the economic recovery of communities after disasters.
4. As part ofthis effort, the SBA enabled and provided for loans through
banks, credit unions, and other lenders. These loans had government backed
guarantees.
5. The Coronavirus Aid, Relief, and Economic Security (CARES) Act
was a federal law enacted or March 27, 2020 and designed to provide emergency
financial assistance to the millions of Americans who are suffering the economic
effects caused by the COVID-19 pandemic.
6. One source of relief provided by the CARES Act was the authorization
of up to $349 billion in forgivable loans to small businesses for payroll, mortgage
interest, rent/lease, and utilities, through the Paycheck Protection Program (PPP).
On or about April 24,2020, Congress authorized up to $3 10 billion in additional
PPP funding.
7. PPP loan proceeds were authorized to be used for businesses' payroll
costs, mortgage interest, lease, and utilities. The principal and interest on PPP loans
were to be entirely forgiven if the business spent the loan proceeds on these
authorized expense items within a designated time-period, and also used a certain
percentage of the PPP loan proceeds for payroll expenses
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8. The PPP loan amount available to small businesses was determined by
the number of employees employed by the business and the business's average
monthly payroll costs.
9. To obtain a PPP loan, qualifuing businesses were required to submit a
PPP loan 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 to be
eligible to obtain the PPP loan.
10. In the PPP loan application, the authorized representative had to state,
among other things, the business' (a) average monthly payroll expenses and (b)
number of employees. These figures were used to calculate the amount of money
the small business was eligible to receive under the PPP. In addition, businesses
applying for a PPP loan had to provide documentation showing their payroll
expenses.
11. The SBAoversawthe PPP. However, individual PPP loans were issued
by private, approved lenders who received and processed PPP applications and
supporting documentation, and then made loans using bank funds, which were 100%
guaranteed by the SBA. Data from the application, including information about the
borrower, the total amount of the loan, and the listed number of employees, were
transmitted by the lender to the SBA in the course of processing the loan.
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Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 4 of 12
The Scheme
12. From on or about June 3, 2020 and continuing until on or about March
26,2021, defendant KEITH MCCONNELL knowingly devised and intended to
devise a scheme and artifice to defraud the SBA's Paycheck Protection Program
(PPP), and to obtain money and property by means of materially false and fraudulent
pretenses, representations and promises.
13. The object of the scheme was for KEITH MCCONNELL to unjustly
enrich himself and others by submitting fraudulent applications to obtain or attempt
to obtain PPP loans of approxirnately $467,200.00, through intentional
misrepresentations and false documentation.
Manner and Means
It was part of the scheme that:
14. On or about June 5, 2020, KEITH MCCONNELL applied for and
submitted a first draw PPP loan application for KB Transportation LLC which
requested $312,000.00 in PPP loan proceeds. On this application, KEITH
MCCONNELL claimed his business had twenty-six employees in 2019 with an
average monthly payroll of$124,800.00, and attached supporting documenration for
these figures.
15. On or about January 20,2021, KEITH MCCONNELL applied for and
submitted a second draw PPP loan application for KB Transportation LLC which
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Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 5 of 12
requested $155,200.00 in additional PPP loan proceeds. On this second application,
KEITH MCCONNELL clairned his business had twenty-six employees in 2020 with
an average monthly payroll of $95,572.00, and attached supporting documentation
for these figures.
16. KEITH MCCONNELL electronically signed both PPP loan
applications, and certified on these applications that the infonnation he provided was
true and accurate and that he understood the criminal penalties associated with
providing false statements to the federal government.
17. At the time of both PPP loan applications KEITH MCCONNELL knew
that KB Transportation LLC was not in business, had no employees, and had no
payroll expenses. KEITH MCCONNELL further knew the tax and business records
submitted in support of both PPP loan applications were fake records which did not
contain accurate informati on
18. At the time of both PPP loan applications I(EITH MCCONNELL knew
that KB Transportation LLC did not qualiff for the PPP loans for which he applied,
and he acted with the intent to defraud.
19. On or about June 5, 2020, a PPP lender approved the first draw loan
application subrnitted by KEITH MCCONNELL on behalf of KB Transportation
LLC, and on or about June 9, 2020 the lender wired $3 12,000.00 in PPP loan
proceeds to the personal bank account of KEITH MCCONNELL.
5
Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 6 of 12
20. KEITH MCCONNELL and others subsequently used the $3 12,000.00
in PPP loan proceeds for unauthorized expenditures including the purchase of a
residential property and two vehicles, stock market investments, and personal
expenditures. None of the PPP loan proceeds received by KEITH MCCONNELL
on behalfofKB Transportation LLC were used for authorized PPP purposes.
21 . On or about each of the dates set forth below, in the Middle District of
Pennsylvania and elsewhere, defendant
KEITH MCCONNELL
for the purpose of executing the scheme described above, and attempting to do so,
knowingly transmitted or caused to be transmitted by means of wire communication
in interstate commerce certain writings, signs, signals, pictures, and sounds
described below, with each transmission affecting a financial institution
Date of Wire
Transm ission Description of Wire Transmission
(on or about)
Submitted fraudulent SBA PPP first draw loan application for
615120 53 12,000.00 in the name of KB Transportation LLC that
contained materially false statements, records, and
misrepresentations
Submitted fraudulent SBA PPP second draw loan application for
U20t21 $155,200.00 in the name of KB Transportation LLC that
contained materially false statements, records, and
misrepresentations
All in violation of Title 18, United States Code. Section 1343.
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Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 7 of 12
COUNT 2
l8 U.S.C. S 1956(h) - Money Laundering Conspiracy
22. For purposes of Count 2 of this Criminal Information, the factual
allegations contained in the preceding paragraphs are re-alleged and incorporated by
reference as if fully set forth herein.
23. From on or about June 3, 2020, and continuing thereafter until on or
about July 8,2020, in the Middle District of Pennsylvania and elsewhere, defendant
KEITH MCCONNELL
knowingly combined, conspired, and agreed with other persons known and
unknown, to commit offenses against the United States in violation of Title 18,
United States Code, Section 1957, namely: to knowingly engage and attempt to
engage in monetary transactions by, through or to a financial institution, affecting
interstate and foreign commerce, in criminally derived property of a value greater
than $10,000.00, such property having been derived from a specified unlawful
activity, that is: wire fraud in violation of Title i 8 United States Code, Section 1343.
Manner and Means
The manner and means used to accomplish the objectives of the conspiracy
included, among others, the following:
24. On or about June 9, 2020, KEITH MCCONNELL and his co-
conspirators, aiding and abening each other, knowingly caused to be transferred and
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Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 8 of 12
deposited criminally derived property in the amount of $3 12,000.00 from a PPP
lender into the personal bank account of KEITH MCCONNELL at F&M Trust
25. From approximateiy June 15, 2020 through July 8, 2020, KEITH
MCCONNELL and his co-conspirators, aiding and abetting each other, knowingly
transferred and deposited, and caused to be transferred and deposited, criminally
derived property in the amount of $244,292.00 from the bank account of KEITH
MCCONNELL at F&M Trust into a personal bank account at PNC Bank. These
transactions included four wire transfers - all referencing "payroll" - in the amounts
of (1) $38,645.00 on June 15,2020,(2)$67,347.00 on June 25,2020, (3) $63,500.00
on July 2,2020, and (4) $70,800.00 on July 8, 2020.
26. On or about June 15, 2020, KEITH MCCONNELL and his co-
conspirators, aiding and abetting each other, knowingly transferred and caused to be
transferred criminally derived property in the amounts of $ 1 8,000.00 and $ 19,000.00
from the PNC Bank account to obtain two cashier's checks, which were
subsequently used to purchase two personal vehicles.
27. On or about June 25,2020, KEITH MCCONNELL and his co-
conspirators, aiding and abetting each other, knowingly transferred and caused to be
transferred criminally derived property in the amount of $20,000.00 from his bank
account at F&M Trust to the seller of a residential property located in Carlisle, PA,
said sum representing the down payment for the purchase ofthe residential property.
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Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 9 of 12
28. On or about July 9, 2020, KEITH MCCONNELL and his co-
conspirators, aiding and abetting each other, knowingly transferred and caused to be
transferred criminally derived property in the amount of $195,300.00 from the PNC
Bank account to the seller of the residential property in Carlisle, PA, said sum
representing the remaining balance for the purchase ofthe residential propefty.
All in violation of Title 18, United States Code, Section 1956(h).
FORFEITURE ALLEGATION
29. The allegations contained in Counts 1 and 2 of this Criminal
Information are hereby realleged and incorporated by reference for the purpose of
alleging forfeiture pursuant to Title 18, United States Code, Sections 982(a)(1) and
e82(a)(2XA).
30. Pursuant to Title 18, United States Code, Sections 982(aX1) and
982(a)(2)(A), upon conviction of the offenses in violation of Title 18, United States
Code, Sections 1343 and 1956(h), as set forth in Counts l and2 of this Criminal
Information, defendant
KEITH MCCONNELL
shall forfeit to the United States of America any property real or personal, involved
in such offenses, or property traceable to such property, and property constituting or
derived from any proceeds obtained, directly or indirectly, as the result of said
offenses. The property to be forfeited includes, but is not limited to:
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Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 10 of 12
a real property located at 699 Bamstable Road, Carlisle, PA, 17015,
with a legal description of:
ALL THOSE CERTAIN two tracts of land situate in West
Pennsboro Township, Cumberland County, Pennsylvania, more
particularly bounded and described in accordance with survey of
Larry V. Neidlinger, P.E., dated June 26, 1983, recorded in
Cumberland County Plan Book 43, Page 143, as follows:
Tract 1:
BEGINNING at a spike at the intersection of Township Road T-
447 and Legislative Route 21034; thence North 38 degrees 54
minutes West 156.41 feet along the center line of L.R. 21034to a
nail in the center line of Legislative Route 21034 at corner of Tract
No.2 herein; thence North 64 degrees l2 minutes 05 seconds East
301.25 feet along Tract No. 2 herein to a stake at comer of iands
now or formerly of Hewitt E. Line et ux., and lands now or formerly
of Reno Pittenger; thence South 15 degrees 15 minutes East 200 feet
along lands now or formerly of Pittenger to a spike in the center line
of Towship Road T-447; thence South 75 degrees 08 minutes West
233.48 feet along the center line of Township Route T-447 to astake
at the intersection of Township Road T-447 and Legislative Route
21034, the place of BEGINNING.
CONTAINING 1.063 acres and being designed Parcel No. 3 on the
aforementioned subdivision plan. Having thereon erected a ranch-
type dwelling house known as and numbered 699 Barnstable Road.
Tract 2:
BEGINNING at a point in Legislative Route 21034; thence North
38 degrees 54 minutes West 20.00 feet to point in lands now or
formerly of Stanley L. Rice, et ux.; thence along lands of same,
North 67 degrees 50 minutes 47 seconds East 306.40 feet to a point
in corner of lands of same and Tract t herein conveyed (referred to
as Parcel No. 3 on recorded subdivision); thence along the aforesaid
Parcel No. 3, South 64 degrees 12 minutes 05 seconds West 301.25
feet to a point in L.R. 2 1034, the point and place of BEGINNING.
t0
Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 11 of 12
CONTAINING 0.067 acres and being designated as Parcel No. 2
on the aforementioned subdivision plan.
BEING the same two tracts of land which John Suloman. widowed
man, by his deed dated October 8, 1997 and recorded in the Office
of the Cumberland County Recorder of Deeds of the
Commonwealth of Pennsylvania in Book 165, Page 964, granted
and conveyed unto Hal K. Berkstresser, Grantor herein.
b. a2004 Ford F350 with VIN ending xxxxC85649;
c a 2015 Chevrolet Traverse with VIN ending xxxx241747; and
d. approximately 565,000.00 in U.S. Currency representing dissipated
proceeds traceable to the criminal offense
31. lfany of the above-described forfeitable property, as a result ofany act
or omission of the defendant:
a cannot be located upon the exercise ofdue diligence;
b. has been transferred or sold to, or deposited with, a third party;
c has been placed beyond the jurisdiction ofthe court;
d. has been substantially diminished in value; or
e. has been commingled with other properfy which canaot be divided
without difficulty,
the United States shall be entitled to forfeiture ofsubstitute property pursuant to Title
21, United States Code, Section 853(p).
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Case 1:21-cr-00167-KMN Document 1 Filed 06/04/21 Page 12 of 12
All pursuant to Title 8, United States Code, Sections 982(a)( ) and
1 1
e82(a)(2)(A).
BRUCE D. BRANDLER
Acting United States Attomey
Samu el S. Dalke
Assistant United States Attornev
L-!-?l
DATE:
1l
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