Third Superseding Indictment — United States v. Michael Fullerton (Western District of Texas)

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A Third Superseding Indictment, redacted version, filed July 18, 2023 in United States of America versus Michael Fullerton and Tiffany Fullerton, Criminal No. 21-CR-216-RP, in the United States District Court for the Western District of Texas, Austin Division. It alleges that from about April 2020 to February 2021 Michael Fullerton, Joseph Robles, Tiffany Fullerton and David Scott Starkes used false PPP loan applications and documents to defraud financial institutions and the SBA, and attempted to acquire in excess of $3 million in loans. The caption lists charges under 18 U.S.C. § 1349 (conspiracy to commit bank and wire fraud), § 1344 (bank fraud), § 1343 (wire fraud), § 1956 (conspiracy to commit money laundering), § 1957 and § 1028A (aggravated identity theft). It closes with a notice of forfeiture seeking a money judgment.

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Case 1:21-cr-00216-RP Document 152 Filed 07/18/23 Page 1 of 13

FILED
July 18, 2023
UNITED STATES DISTRICT COURT CLERK, U.S. DISTRICT COURT
WESTERN DISTRICT OF TEXAS WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION LRT
BY: ________________________________
DEPUTY

UNITED STATES OF AMERICA CRIMINAL NO. 21-CR-216-RP
Plaintiff
THIRD SUPERSEDING INDICTMENT
v
[Ct. 1: 18 U.S.C. § 1349 – Conspiracy to
(1) MICHAEL FULLERTON Commit Bank and Wire Fraud;
(3) TIFFANY FULLERTON Cts. 2-3: 18 U.S.C. § 1344 – Bank Fraud;
Defendants
Cts. 4-5: 18 U.S.C. § 1343 – Wire Fraud;
Ct. 6: 18 U.S.C. § 1956 – Conspiracy to
Commit Money Laundering;
Cts. 7-9: 18 U.S.C. § 1957 – Engaging in
Monetary Transactions in Criminally
Derived Property;
Cts. 10-11: 18 U.S.C. § 1028A –
Aggravated Identity Theft]

THE GRAND JURY CHARGES:

INTRODUCTION

1. Beginning in or about April 2020, and continuing until on or about February

2021, in the Western District of Texas and elsewhere, Defendants MICHAEL

FULLERTON, JOSEPH ROBLES, TIFFANY FULLERTON, and DAVID SCOTT

STARKES, together with others known and unknown, devised and executed a scheme to

defraud, and attempted to defraud, one or more financial institutions and the U.S. Small

Business Administration (SBA), an agency of the United States Government, in connection

with stimulus and economic assistance programs created by the federal government in

response to the COVID-19 pandemic.

2. Defendants used false documents and misrepresentations, including false and

fraudulent loan applications and attachments thereto, to influence and attempt to influence

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numerous financial institutions to approve and fund loans. When successful, these false statements

and misrepresentations influenced financial institutions to issue funds that were 100%

guaranteed by the SBA, and potentially forgivable. Defendants attempted to acquire in excess of

$3 million in such loans.

SBA PAYROLL PROTECTION PROGRAM (PPP)

3. The Coronavirus Aid, Relief, and Economic Security ("CARES") Act is a

federal law enacted in or about March 2020 and designed to provide emergency financial

assistance to the millions of Americans who were suffering the economic effect caused by the

COVID-19 pandemic.One source of relief provided by the CARES Act was the authorization

of up to $349 billion in forgivable loans to small businesses for job retention and certain other

expenses, through a program referred to as the Paycheck Protection Program (“PPP”). In or

about April 2020, Congress authorized over $300 billion in additional PPP funding.

4. To obtain a PPP loan, a qualifying small business was required to submit a PPP

loan application, which was signed by an authorized representative of the business. The PPP

loan application required the small business applicant (through its authorized representative)

to acknowledge the program rules and make certain affirmative certifications in order to be

eligiblefor the PPP loan. In the PPP loan application, the small business applicant (through its

authorized representative) was required to state, among other things, its average monthly

payroll expenses and the number of its employees. These figures were used to calculate the

loan amount the small business was eligible to receive under the PPP. In addition, the small

business applicant was required to provide supporting documentation showing its payroll

expenses.

5. A small business's PPP application was initially submitted to, and processed by a

participating financial institution, then transmitted for further review to the SBA to assess the

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applicant's eligibility. If the PPP loan application was approved, the participating financial

institution funded the PPP loan using its own monies.

6. Under the terms of the PPP, PPP loan proceeds must be used by the small business

applicant for specified permissible expenses, namely, payroll expenses, mortgage interest

payments, rent payments, and utilities expenses. The PPP allows the interest and principal on the

PPP loan to be entirely forgiven if the small business applicant spends the loan proceeds on the

specified expenses within a particular period of time and uses a certain percentage of the PPP loan

proceeds on payroll expenses.

7. When submitting an SBA PPP application, the small business applicant is explicitly

warned, and must acknowledge, that making a false statement in the application, and/or submitting false

or fraudulent supporting documentation, is a violation of federal law.

SCHEME

8. It was part of the scheme and artifice to defraud that Defendants MICHAEL

FULLERTON, JOSEPH ROBLES, TIFFANY FULLERTON, DAVID SCOTT STARKES,

or their coconspirators prepared and submitted false and fraudulent PPP loan applications to

financial institutions and the SBA. Some of the small business applicants were businesses whose

registrations with the Texas Secretary of State had expired, or were renewed shortly before an

application was submitted, after being dormant for a long time. The false and fraudulent statements

included, but were not limited to, the following:

a. fabricated payroll expenses for each small business applicant;

b. fabricated banking records for each small business applicant;

c. fabricated documents and records regarding the payment of state and
federal taxes;

d. false and fraudulent representations regarding employees, to include falsely

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stating the number of employees and using false and fraudulent identification information to

identify alleged employees, most or all of whom were, in truth and fact, not employed by the small

business applicant and whose identification information had been stolen or misused;

e. falsely and fraudulently stating that the loan proceeds would be used

only for the specified purposes set forth in the loan applications, when, in truth and fact,

Defendants applied the loan proceeds for their own personal use and benefit, to include the

purchase of a “toterhome” motor vehicle, a boat, Rolex watches, a Corvette, and using the

funds to start a new business in Oklahoma to develop a marijuana grow and dispensary, a bar

and grill, and an automotive repair facility.

FALSE AND FRAUDULENT SBA PPP LOAN APPLICATIONS

9. Defendants MICHAEL FULLERTON, JOSEPH ROBLES, TIFFANY

FULLERTON, DAVID SCOTT STARKES, or their coconspirators submitted the

following SBA PPP loan applications for the following small business applicants and loan

amounts on the dates and to the financial institutions listed below. The loan applications

contained false and fraudulent statements and representations, as set forth above.

Business Entity Application Financial Amount
Date (on or Institution Requested
about)

Fullerton Consulting Group, April 29, 2020 Celtic Bank $259,134.00
LLC

FCG Automotive & Collision, May 14, 2020 Celtic Bank $500,000.00
LLC
MTF Racing, LLC May 28, 2020 Celtic Bank $765,125.00

MTF Racing, LLC June 9, 2020 Customers Bank $834,200

MTF Racing, LLC July 9, 2020 Cross River Bank $834,292.11

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MONEY LAUNDERING CONSPIRACY

10. In order to collect the fraudulent proceeds, Defendants needed bank accounts

controlled by coconspirators to collect the stolen money. Defendants MICHAEL FULLERTON,

JOSEPH ROBLES, TIFFANY FULLERTON, DAVID SCOTT STARKES, or their

coconspirators controlled and opened bank accounts in the Austin, Texas area and in Oklahoma.

Defendant MICHAEL FULLERTON directed and controlled the opening of some of these

accounts and the transfers of fraud proceeds into and out of these accounts

11. When the PPP fraud scam was successful and a victim sent money to a conspirator’s

account, bank account records show that the conspirators acted quickly to remove fraudulent funds

deposited into the accounts and move them to other accounts controlled by the conspiracy. Because

some of the accounts were opened in the names of businesses that were not truly in operation or

owned or controlled by the persons opening the accounts, they were from their inception designed

to conceal and disguise the nature, location, source, ownership, and control of the proceeds of the

fraud

LOSS

12. As of the date of this Indictment, law enforcement has identified over $3 million in

attempted losses attributable to the money laundering conspiracy. On at least one occasion, the

bank did not fund the requested PPP loan. However, at least $2.4 million in actual losses have been

identified.

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COUNT ONE
Conspiracy to Commit Bank and Wire Fraud
[18 U.S.C. ' 1349]

13. Paragraphs 1 through 12 of this Indictment are realleged and incorporated as though

fully set forth herein.

14. Beginning as early as April 2020, the exact date being unknown to the Grand

Jury, and continuing until on or about July 13, 2020, in the Western District of Texas and

elsewhere, Defendants,

(1) MICHAEL FULLERTON and
(3) TIFFANY FULLERTON,

did knowingly and intentionally conspire and agree with one or more individuals to commit

one or more offenses against the United States, namely:

a. Bank Fraud, in violation of 18 U.S.C. § 1344, that is knowingly executing, or attempting

to execute, a scheme and artifice to obtain any of the moneys, funds, credits, assets,

securities, and other property owned by, and under the custody and control of, a financial

institution, by means of false and fraudulent pretenses, representations, promises, and

omissions of material facts, namely, a scheme to acquire SBA PPP funds as described

above, in violation of Title 18, United States Code, Section 1344; and,

b. Wire Fraud, in violation of 18 U.S.C. § 1343, that is, having devised and having

intended to devise a scheme and artifice to defraud, and to obtain money and property

by means of materially false and fraudulent pretenses, representations, promises, and

omissions of material facts, namely, a scheme to acquire SBA PPP funds as described

above, for the purpose of executing the scheme and artifice, transmitted and caused to be

transmitted by means of wire, radio, and television communication in interstate

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commerce certain writings, signs, signals, pictures, and sounds.

All in violation of Title 18, United States Code, Section 1349.

COUNTS TWO AND THREE
Bank Fraud
[18 U.S.C. ' 1344]

15. Paragraphs 1 through 12 of this Indictment are realleged and incorporated as though

fully set forth herein.

16. Beginning at least as early as April 2020, the exact date being unknown to the Grand

Jury, and continuing until on or about July 13, 2020, in the Western District of Texas and

elsewhere, Defendant,

(1) MICHAEL FULLERTON,

did knowingly execute and attempt to execute a scheme and artifice to defraud a financial

institution, as set forth below, and to obtain moneys, funds, credits, assets, securities, and other

property owned by, and under the custody and control of, said financial institution by means of

false, misleading, and fraudulent pretenses, representations, and promises, and omissions of

material facts, namely, a scheme to acquire SBA PPP funds as described above:

Amount
Application Financial Institution
Count Transferred by
Date (on or
Financial
about)
Institution
2 June 9, 2020 Customers Bank $834,200.00

3 July 9, 2020 Cross River Bank $834,292.11

All in violation of Title 18, United States Code, Section 1344.

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COUNTS FOUR AND FIVE
Wire Fraud
[18 U.S.C. ' 1343]

17. Paragraphs 1 through 12 of this Indictment are realleged and incorporated as though

fully set forth herein.

18. From in or about April 2020, the exact date being unknown to the Grand Jury,

andcontinuing until on or about July 13, 2020, in the Western District of Texas and elsewhere,

the Defendant,

(1) MICHAEL FULLERTON,

having devised and intended to devise a scheme and artifice to defraud to obtain money and

property by means of false, misleading, and fraudulent pretenses, representations, and

promises, and omissions of material facts, namely, a scheme to acquire SBA PPP funds as

described above, did knowingly cause to be transmitted by wire, radio, or television

communication in interstate and foreign commerce, including via the internet, one or more

electronic communications constituting and containing a writing, sign, signal, picture, and

sound for the purpose of executing and attempting to execute said scheme and artifice:

Count Date (on or Description of Wire Transmission
about)
Transmission via the internet of a SBA PPP loan
application from the Western District of Texas to Celtic
4 April 29, 2020
Bank, which is located in Salt Lake City, Utah, for a loan
in the amount of $259,134.00.

Transmission via the internet of a SBA PPP loan
application from the Western District of Texas to Celtic
5 May 14, 2020
Bank, which is located in Salt Lake City, Utah, for a loan
in the amount of $500,000.00.

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

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COUNT SIX
Conspiracy to Commit Money Laundering
[18 U.S.C. ' 1956]

19. Paragraphs 1 through 12 of this Indictment are realleged and incorporated as though

fully set forth herein.

20. From in or about April 2020, the exact date being unknown to the Grand Jury,

and continuing until on or about the date of this Indictment, in the Western District of Texas

and elsewhere, Defendants,

(1) MICHAEL FULLERTON and
(3) TIFFANY FULLERTON,

did knowingly combine, conspire, and agree with one or more individuals to commit offenses

against the United States in violation of Title 18, United States Code, Section 1956, namely:

a. To knowingly conduct and attempt to conduct financial transactions affecting

interstate commerce and foreign commerce, which transactions involved the

proceeds of specified unlawful activity, that is, Conspiracy to Commit Fraud (18

U.S.C. § 1349), Bank Fraud (18 U.S.C. § 1344), and Wire Fraud (18 U.S.C. § 1343)

as described in this Indictment, knowing that the transactions were designed in

whole or in part to conceal and disguise the nature, location, source, ownership, and

control of the proceeds of specified unlawful activity, and that while conducting

and attempting to conduct such financial transactions, knew that the property

involved in the financial transactions represented the proceeds of some form of

unlawful activity, in violation of Title 18, United States Code, Section

1956(a)(1)(B)(i).

All in violation of Title 18, United States Code, Section 1956(h).

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COUNTS SEVEN, EIGHT, AND NINE
Engaging in Monetary Transactions in Criminally Derived Property
[18 U.S.C. ' 1957]

21. Paragraphs 1 through 12 of this Indictment are realleged and incorporated as though

fully set forth herein.

22. On or about the dates set forth below, in the Western District of Texas

and elsewhere, the Defendant,

(1) MICHAEL FULLERTON,

did knowingly engage and attempt to engage in a monetary transaction in criminally derived

property of a value greater than ten thousand dollars ($10,000.00), set forth below, which property

was derived from specified unlawful activity, that is, Conspiracy to Commit Fraud (18 U.S.C. §

1349), Bank Fraud (18 U.S.C. § 1344), and Wire Fraud (18 U.S.C. § 1343) as described in this

Indictment:

Count Date Description of Monetary Transaction
(on or about)
Purchase and use of a cashier’s check from MTF Racing,
7 July 30, 2020 LLC Chase Bank account ending in 2263 in the amount of
$115,000 in and affecting commerce to purchase a semi-
truck motorhome from JJS Mechanical Inc. and J.S.
Wire transfer of funds in and affecting commerce in the
8 May 27, 2020 amount of $20,340.18 from the Fullerton Consulting
Group, LLC Radius Bank account ending in 5362 for the
purchase of two Rolex watches from CME International
d/b/a Bob’s Watches
Wire transfer of funds in and affecting commerce in the
9 May 20, 2020 amount of $21,688.00 from the Fullerton Consulting
Group, LLC Radius Bank account ending in 5362 for the
purchase of a 1983 Uniflite 36 foot double cabin boat
named “Breakfast at Tiffany’s”

All in violation of Title 18, United States Code, Section 1957.

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COUNT TEN
Aggravated Identity Theft
[18 U.S.C. ' 1028A]

23. Between on or about April 29, 2020 and on or about July 9, 2020, in the Western

District of Texas and elsewhere, the Defendant,

MICHAEL FULLERTON (1),

did knowingly use, without lawful authority, a means of identification of another person, to

wit, the name and purported signature of S.S., a certified public accountant, during and in

relation to a felony violation enumerated in Title 18, United States Code, Section 1028A(c),

to wit: Conspiracy to Commit Bank and Wire Fraud,, Bank Fraud, and Wire Fraud, as charged

in Counts One through Five of this Indictment, knowing that the means of identification

belonged to another actual person, and did aid and abet the commission of said offense.

All in violation of Title 18, United States Code, Sections 1028A(a)(l) and 2.

COUNT ELEVEN
Aggravated Identity Theft
[18 U.S.C. ' 1028A]

24. Between on or about April 29, 2020 and on or about July 9, 2020, in the Western

District of Texas and elsewhere, the Defendant,

MICHAEL FULLERTON (1),

did knowingly use, without lawful authority, a means of identification of another person, to

wit, the names and social security numbers of employees of Georgetown Collision,

EMPLOYEE 1, EMPLOYEE 2, EMPLOYEE 3, EMPLOYEE 4, EMPLOYEE 5, and

EMPLOYEE 6, whose names are known to the Grand Jury, during and in relation to a felony

violation enumerated in Title 18, United States Code, Section 1028A(c), to wit: Conspiracy

to Commit Bank and Wire Fraud, Bank Fraud, and Wire Fraud, as charged in Counts One

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through Five of this Indictment, knowing that the means of identification belonged to another

actual person, and did aid and abet the commission of said offense.

All in violation of Title 18, United States Code, Sections 1028A(a)(l) and 2.

NOTICE OF UNITED STATES OF AMERICA=S DEMAND FOR FORFEITURE

[See FED. R. CRIM. P. 32.2]

I.
Fraud & Monetary Transaction Violations and Forfeiture Statutes
[18 U.S.C. §§ 1343, 1344, 1349, 1956, & 1957
subject to forfeiture pursuant to 18 U.S.C. §§ 982(a)(1) & (2)]

As a result of the foregoing criminal violations set forth in Counts One through Nine, the

United States gives notice to the Defendants of its intent to seek the forfeiture of property,

including any items listed below, upon conviction and as a part of sentence pursuant to FED. R.

CRIM. P. 32.2 and 18 U.S.C. §§ 982(a)(1) & (2), which state:

18 U.S.C. § 982. Criminal Forfeiture
(a)(1) The court, in imposing sentence on a person convicted of an offense in violation
of section 1956, 1957 . . . of this title, shall order that the person forfeit to the United
States any property, real or personal, involved in such offense, or any property traceable
to such property.
(2) The court, in imposing sentence on a person convicted of a violation of, or a
conspiracy to violate―
(A) section . . . 1343, or 1344 of this title, affecting a financial institution . . .
***
shall order that the person forfeit to the United States any property constituting,
or derived from proceeds the person obtained directly or indirectly, as the result
of such violation.

II.
Money Judgment

Money Judgment: A sum of money equal to the proceeds obtained from the fraud
violations and the property involved in the money laundering/transaction violations for
which each defendant is liable.

III.
Substitute Property

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