Information — United States v. Mark X. Haley II (District of Maine)

Summary

A criminal information filed January 13, 2023 in United States v. Mark X. Haley II, Case 2:23-cr-00004-NT, in the U.S. District Court for the District of Maine. It alleges that from no later than on about April 30, 2020 until at least March 4, 2021, Haley used companies including Burntcoat Capital LLC, Boyaca Trading Company LLC and Eastern Investment Advisors LLC to apply for PPP loans with false employee counts, payrolls, IRS Forms 941 and bank statements, obtaining approximately $1,010,581. Count One charges bank fraud under 18 U.S.C. §§ 1344 and 2 for a Bank B application of about $134,375 on about July 16, 2020, and Count Two money laundering under Sections 1957 and 2. The forfeiture allegation seeks a money judgment of $1,010,581 and a sailboat.

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Case 2:23-cr-00004-NT Document 1 Filed 01/13/23 Page 1 of 8 PageID #: 1

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE

UNITED STATES OF AMERICA

v. No.

MARK X. HALEY II

INFORMATION
The United States Attorney charges:

General Allegations

At all times relevant to this Information:

1. The defendant resided in Rockport, Maine, in the District of Maine.

2. The Paycheck Protection Program (“PPP”) was a COVID-19 pandemic

relief program administered by the Small Business Administration (“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.

3. To obtain a PPP loan, a qualifying business 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 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

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payroll expenses, such as filed federal tax documents.

4. PPP loan applications were electronically submitted or caused to be

submitted by the borrower and received through SBA servers located in Virginia or

Oregon. 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.

5. 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. The proceeds of a PPP loan were not permitted to be used

by the borrowers to purchase consumer goods, make speculative investments or to fund

the borrower’s ordinary day-to-day living expenses unrelated to the specified authorized

expenses.

6. Bank A was a third-party participating lender in the PPP and a federally

insured financial institution as defined in 18 U.S.C. § 20.

7. Bank B was a third-party participating lender in the PPP and a federally

insured financial institution as defined in 18 U.S.C. § 20.

8. Burntcoat Capital LLC was a limited liability company formed in

Delaware. Mark X. Haley II was its only member. On about August 5, 2019, the

defendant opened a checking account for Burntcoat Capital LLC with Bank A. On about

January 29, 2021, the defendant opened a checking account for Burntcoat Capital LLC

with Bank B.

9. Boyaca Trading Company LLC was a limited liability company formed in

Delaware. Mark X. Haley II and Burntcoat Capital LLC were its only members. The

company was purportedly created to import agricultural goods from Colombia to the

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Case 2:23-cr-00004-NT Document 1 Filed 01/13/23 Page 3 of 8 PageID #: 3

United States. On about August 5, 2019, the defendant opened a checking account for

Boyaca Trading Company LLC at Bank A.

10. Burntcoat – MIA LLC was a limited liability company formed in Delaware.

The company was controlled by Mark X. Haley II. On about July 15, 2020, the

defendant opened a checking account for Burntcoat – MIA LLC at Bank B.

11. Eastern Investment Advisors LLC was a limited liability company formed

in Delaware. Mark X. Haley II was its only member. On about August 4, 2020, the

defendant opened a checking account for Eastern Investment Advisors LLC at Bank B.

12. Secure Capital Management Inc. was a Delaware corporation controlled by

Mark X. Haley II. On about August 4, 2020 the defendant opened a checking account

for Secure Capital Management at Bank B.

The Scheme and Artifice

13. Beginning at an unknown time, but no later than on about April 30, 2020,

and continuing until at least March 4, 2021, in the District of Maine and elsewhere, the

Defendant,

MARK X. HALEY II,

knowingly and willfully devised and intended to devise a scheme and artifice to defraud,

and to obtain money and property by means of materially false and fraudulent pretense,

representations and promises.

Manner and Means

14. The manner and means by which the defendant sought to accomplish the

scheme and artifice included, among others, the following:

a. The defendant created limited liability companies and other

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Case 2:23-cr-00004-NT Document 1 Filed 01/13/23 Page 4 of 8 PageID #: 4

businesses and exercised control of existing limited liability

companies and other businesses and used those businesses’ identities

to fraudulently apply for and claim PPP loan proceeds to which

neither he nor the businesses were entitled;

b. The defendant prepared and submitted, and caused to be prepared

and submitted, false and fraudulent applications to financial

institutions and the SBA that included materially false and fraudulent

representations and pretenses, such as:

i. Providing false numbers of employees purportedly employed

by the businesses;

ii. Providing false average monthly payrolls for the businesses;

iii. Falsely stating that the loan proceeds were necessary to

support the businesses’ payrolls and would be used for payroll;

iv. Affirming under penalty of perjury that the statements in the

application were true and correct.

c. The defendant prepared and submitted, and caused to be prepared

and submitted, false and fraudulent documents in support of the PPP

applications, such as:

i. False quarterly employment tax returns (IRS Forms 941) for

the businesses. The forms listed false numbers of employees,

false amounts of wages paid, and false amounts of tax withheld

from wages. None of the employment tax returns submitted to

the financial institutions and SBA in support of the PPP

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Case 2:23-cr-00004-NT Document 1 Filed 01/13/23 Page 5 of 8 PageID #: 5

applications was actually filed with the Internal Revenue

Service (IRS);

ii. False payroll records that falsely identified third parties as

having worked for the businesses and received wages from the

businesses when the defendant knew that the individuals

identified were not employees and had not received any wages;

iii. False bank statements that listed nonexistent transactions for

the businesses’ bank accounts.

d. The defendant opened and caused to be opened bank accounts into

which the fraudulently obtained PPP proceeds would be transferred

via interstate wire;

e. The defendant caused the SBA and financial institutions to transfer

the fraud proceeds to bank accounts under his control;

f. The defendant used some of the fraud proceeds to promote and

perpetuate the scheme and retained other fraud proceeds for his

personal enrichment.

15. As part of the scheme, the defendant filed, or caused to be filed, the

following PPP loan applications:

APPROXIMATE APPLICANT LENDER APPROXIMATE
DATE APPLICATION
AMOUNT
April 30, 2020 Burntcoat Capital LLC Bank A $62,500

March 3, 2021 Burntcoat Capital LLC Bank B $101,582

April 27, 2020 Boyaca Trading Company LLC Bank A $41,666.67

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Case 2:23-cr-00004-NT Document 1 Filed 01/13/23 Page 6 of 8 PageID #: 6

January 25, 2021 Boyaca Trading Company LLC Bank A $136,805.20

July 16, 2020 Burntcoat – MIA LLC Bank B $134,375

March 3, 2021 Burntcoat – MIA LLC Bank B $134,375

August 6, 2020 Eastern Investment Advisors Bank B $133,333.35
LLC
March 3, 2021 Eastern Investment Advisors Bank B $133,333.34
LLC
February 13, 2021 Secure Capital Management, Bank B $137,500
Inc.

16. As a result of the scheme, the defendant fraudulently obtained

approximately $1,010,581 in PPP loan proceeds.

COUNT ONE
Bank Fraud

17. Paragraphs 1 – 16 and all subparts are incorporated herein.

18. On about July 16, 2020, in the District of Maine and elsewhere, the

Defendant,

MARK X. HALEY II,

knowingly and willfully executed and attempted to execute a scheme and artifice to

defraud Bank B, which was a federally insured financial institution, and to obtain

money, funds and property under the custody of Bank B by means of false and

fraudulent representations and promises; specifically, the defendant filed, and caused to

be filed, a false and fraudulent application and supporting documents for a PPP loan in

the approximate amount of $134,375.

Thus, the defendant violated Title 18, United States Code, Sections 1344 and 2.

COUNT TWO
Money Laundering

19. Paragraphs 1 – 16 and all subparts are incorporated herein.

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20. On about July 23, 2020, in the District of Maine and elsewhere, the

Defendant,

MARK X. HALEY II,

knowing that the funds involved represented the proceeds of some form of unlawful

activity, engaged in and willfully caused others to engage in a monetary transaction, in

and affecting interstate commerce, in criminally derived property of a value greater than

$10,000, which property, in fact, was derived from specified unlawful activity, namely,

bank fraud, committed in violation of Title 18 United States Code, Section 1344, as

charged in Count One of this Information.

Thus, the defendant violated Title 18, United States Code, Sections 1957 and 2.

FORFEITURE ALLEGATION

20. Upon conviction of Count One, in violation of 18 U.S.C. §§ 1344 and 2, the

defendant,

MARK X. HALEY II,

shall forfeit to the United States, pursuant to Title 18, United States Code, Section

982(a)(2) any property constituting or derived from proceeds the person obtained,

directly or indirectly, as a result of the offense, including, but not limited to, the

following assets:

a. a money judgment in the amount of $1,010,581 ; and

b. a 2006 J/100 Sailboat with the hull identification number
PCX10129L607.

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Dated: January 13, 2023 Respectfully submitted,

DARCIE N. MCELWEE
United States Attorney

By:

______________________
Sean M. Green
Assistant United States Attorney
100 Middle Street
Portland, Maine 04101
Sean.Green2@usdoj.gov
Office: (207) 771-3240

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