Information — United States of America v. Ross Charno and Wyleia Nashon Williams, Case 1:21-cr-00806-PAB (Dkt. 29, N.D. Ohio)

Summary

A criminal information filed November 10, 2021 as Doc 29 in United States v. Ross Charno and Wyleia Nashon Williams, Case 1:21-cr-00806, in the U.S. District Court for the Northern District of Ohio, Eastern Division (Judge Barker). It charges conspiracy to commit wire fraud under 18 U.S.C. § 371 involving Paycheck Protection Program loans. It alleges that the conspirators submitted applications that falsely reported employee numbers and payroll expenses, choosing figures to yield the loan amount desired. For example, on or about May 15, 2020 Stote and Charno submitted a fraudulent PPP application for OMP for $244,062 with falsified IRS Forms 941. A forfeiture allegation covers a diamond ring with a $26,500.00 purchase price that Charno turned over through counsel on or about November 5, 2021.

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Case: 1:21-cr-00806-PAB Doc #: 29 Filed: 11/10/21 1 of 9. PagelD #: 191

FILED |

NOV 10 2021

Clerk of Court, United States Distr
P ’ tfict Court
Ohio Northem District - CLEVELAND

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

UNITED STATES OF AMERICA, INFORMATION

Plaintiff,

Title 18, United States Code,
ROSS CHARNO, Section 371

WYLEIA NASHON WILLIAMS,

JUDGE BARKER

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Defendants.

GENERAL ALLEGATIONS

At all times relevant to this Information, unless otherwise specified:

The Paycheck Protection Program

1. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal
law enacted in or around March 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. One 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”).

2. In order to obtain a PPP loan, a qualifying business submitted 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 in order to be eligible to obtain the PPP

loan. In the PPP loan application (Small Business Administration (“SBA”) Form 2483), the small

064
Case: 1:21-cr-O0806-PAB Doc #: 29 Filed: 11/10/21 2 of 9. PagelD #: 192

business (through its authorized representative) was required to provide, among other things, its:
(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 were required to provide documentation confirming
their payroll expenses.

3. A PPP loan application was processed by a participating lender. If a PPP loan
application was approved, the participating lender funded the PPP loan using its own monies.
While it was the participating lender that issued the PPP loan, the loan was 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, was transmitted by the lender to the SBA in the .
course of processing the loan. |

4, PPP loan proceeds were required to be used by the business on certain permissible
expenses—payroll costs, interest on mortgages, rent, and utilities. The PPP allowed the interest .
and principal on the PPP loan to be entirely forgiven if the business spent the loan proceeds on
these expense items within a designated period of time and used a defined portion of the PPP loan
proceeds on payroll expenses.

The Defendants and Related Entities and Individuals

5. ROSS CHARNO was a resident of Broward County, Florida. CHARNO was the
true owner of PM Autobody, Inc. (“PM Autobody”) and OMP Enterprises LLC ““OMP”), two
entities with minimal legitimate operations.

6. WYLEIA NASHON WILLIAMS was a resident of Broward County, Florida.

7. James Richard Stote (charged separately) was a resident of Broward County,

Florida. Stote was the true owner of FS Financial, Inc., and USA Homes and Remodeling, Inc.
Case: 1:21-cr-O0806-PAB Doc #: 29 Filed: 11/10/21 3 of 9. PagelD #: 193

FS Financial, Inc. had been in the business of providing credit-related services, such as improving
credit scores and obtaining commercial loans. USA Homes and Remodeling, Inc. was a corporate
entity with minimal legitimate operations.

8. Phillip J. Augustin (charged separately) was a resident of Broward County, Florida.
Augustin was the true manager and one of the true owners of Clear Vision Music Group (“Clear
Vision”) and Top Gun Consulting and Management LLC (“Top Gun”). Clear Vision and Top Gun
had limited operations prior to the COVID-19 pandemic.

9. Deon D. Levy (charged separately) was a resident of Bedford Heights, Ohio. Levy
was the true owner and manager of Apex Now Corp. (“Apex Now”) and Urban Housing Group
LLC (“Urban Housing”).

10. | Apex Now was an Ohio corporation with its listed principal address in Solon, Ohio,
which performed construction services in Northeast Ohio and elsewhere.

11. Urban Housing was an Ohio corporation with its listed principal address in
Highland Heights, Ohio, which had limited operations, but performed some construction services
in Northeast Ohio.

12. Bank Processor 1 was a third-party company processor, based in Redwood City,
California, that processed PPP loan applications for participating lender banks. Members of the
public could access an online portal for applying for PPP loans through Bank Processor 1’s
website, and it received applications through that portal submitted to its servers located in

California.
Case: 1:21-cr-O0806-PAB Doc #: 29 Filed: 11/10/21 4 o0f9. PagelD #: 194

COUNT 1
(Conspiracy to Commit Wire Fraud, 18 U.S.C. § 371)

The Acting United States Attorney charges:

13. The allegations contained in paragraphs 1 through 12 of this Information are
incorporated by reference as if stated fully herein.

The Conspiracy and Scheme to Defraud

14. From in or around May 2020, and continuing through in or around June 2020, in
the Northern District of Ohio, Eastern Division, and elsewhere, Defendants ROSS CHARNO and
WYLEIA NASHON WILLIAMS, and James Richard Stote (charged separately), Phillip J.
Augustin (charged separately), and Deon D. Levy (charged separately), did willfully, that is, with
the intent to further the object of the conspiracy, knowingly combine, conspire, confederate, and
agree together and with each other and with others known and unknown to the Acting United
States Attorney, to commit an offense against the United States, that is, to knowingly, and with the
intent to defraud, devise, and intend 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, knowing that the pretenses, representations, and promises were false and fraudulent
when made, and, for the purpose of executing the scheme and artifice, to knowingly transmit and
cause to be transmitted, by means of wire communication in interstate commerce, certain writings,
signs, signals, pictures and sounds, in violation of Title 18, United States Code, Section 1343.

Purposes of the Scheme

15. The purposes of the scheme included, but were not limited to, the following: for
Defendants and their co-conspirators to unlawfully enrich themselves by, among other things:
(a) submitting, and causing to be submitted, false and fraudulent applications for loans and grants

made available through the SBA to provide relief for the economic effects caused by the COVID-
Case: 1:21-cr-O0806-PAB Doc #: 29 Filed: 11/10/21 5o0f9. PagelD #: 195

19 pandemic, including PPP loans; (b) offering, paying, and receiving kickbacks in return for the
submission of false and fraudulent loan applications; and (c) diverting fraud proceeds for the
Defendants’ and co-conspirators’ personal use, the use and benefit of others, and to further the
conspiracy.

Manner and Means of the Scheme

16. The manner and means by which Defendants and their co-conspirators carried out
the scheme included, but were not limited to, the following:

a. Stote, Augustin, CHARNO, and other co-conspirators submitted and caused
to be submitted fraudulent PPP loan applications for entities under their control, including USA
Homes and Remodeling, Inc., FS Financial, Inc., Clear Vision, Top Gun, PM Autobody, and OMP.

b. Stote, Augustin, CHARNO, and other co-conspirators, solicited and
recruited confederate borrowers, for whom they submitted and caused to be submitted fraudulent
PPP loan applications, including for Apex Now and Urban Housing.

c. Stote, Augustin, and CHARNO also worked with other co-conspirators to
recruit additional confederate borrowers interested in obtaining PPP loans.

d. Stote coordinated submitting the fraudulent “PPP applications, largely
through Bank Processor 1’s online applications portal, but occasionally through other processors
of PPP loan applications for participating PPP lenders. In most instances, Stote used the
confederate borrower’s email to create an account with Bank Processor 1, which the borrower
would then validate. In some instances, Stote used email accounts he had created and controlled
to create an account for the borrower with Bank Processor 1. The PPP loan applications included

falsified payroll tax forms and falsified bank statements, and the application materials falsely and
Case: 1:21-cr-O0806-PAB Doc #: 29 Filed: 11/10/21 6 of 9. PagelD #: 196

fraudulently represented the borrowing entities’ operations and finances, including the number of
employees and the amount of monthly payroll.

e. ‘Stote and CHARNO falsified documents that were submitted, and were
intended to be submitted, in support of the applications, which falsely reported the number of
employees and the payroll expenses, choosing figures to yield a PPP loan in the amount desired.
The falsified payroll figures were determined based on a formula in which the desired PPP loan
amount was equal to the average monthly payroll expenses for .2019, multiplied by 2.5. In
particular, Stote and CHARNO created falsified Internal Revenue Service (“IRS”) Forms 941
(titled, “Employer’s Quarterly Federal Tax Return”) for all four quarters of 2019 in support of the
applications.

f. WILLIAMS assisted Augustin’s efforts to recruit confederate borrowers .
and to gather information and documents from those borrowers to provide to Stote for use in the
fraudulent PPP applications.

g. From time to time, Augustin, Stote, and CHARNO arranged with the
confederate borrowers for the borrowers to pay 25% of the amount of the PPP loan as a fee or
kickback for obtaining the loan, to be wired to accounts controlled by Stote.

h. From time to time, Stote wired to accounts controlled by Augustin, or
otherwise transferred to Augustin’s designees, a share of the 25% kickbacks.

i. Stote, Augustin, CHARNO, WILLIAMS, Levy, and other co-conspirators
coordinated their efforts, including obtaining information and documents from confederate
borrowers and submitting fraudulent PPP loan applications, through the use of interstate wire

communications.
Case: 1:21-cr-00806-PAB Doc #: 29 Filed: 11/10/21 7 of 9. PagelD #: 197

Overt Acts
17. In furtherance of the conspiracy, and to accomplish its object and purpose, at least
_ one of the co-conspirators committed and caused to be committed, in the Northern District of Ohio,
and elsewhere, at least one of the following overt acts, among others:

a. On or about May 14, 2020, WILLIAMS created a falsified check in the
name of Joshua Bellamy (charged separately), and emailed the check to Stote.

b, On or about May 15, 2020, Stote and CHARNO submitted a fraudulent PPP
application for OMP, for $244,062, through Bank Processor 1. The application included falsified
IRS Forms 941 with inflated payroll, and a falsified bank statement.

C. Oni or about May 15, 2020, CHARNO and Levy exchanged text messages
discussing a “[nJew loan program.” CHARNO sent Levy a screenshot from Bank Processor 1’s
website of an approval for a $244,062 PPP loan for “another client.” Levy then provided
CHARNO with information, including false representations, regarding Apex Now, and directions.
to send funds to an Apex Now bank account. CHARNO responded with another screenshot
showing, “You qualify for $554,232,” and stating that confirmations and instructions would be
sent to an email address not known to Levy, which Stote controlled.

d. On or about May 18, 2020, Stote and CHARNO submitted a fraudulent PPP
application for Apex Now for $554,232, through Bank Processor 1. The application included
. falsified IRS Forms 941 with inflated payroll, and a falsified bank statement that Levy had
previously provided. |

e. On or about May 18, 2020, Stote and CHARNO submitted a fraudulent PPP
application for PM Autobody, for $652,470, through Bank Processor 1. The application included

falsified IRS Forms 941 with inflated payroll, and a falsified bank statement.
Case: 1:21-cr-O0806-PAB Doc #: 29 Filed: 11/10/21 8 of 9. PagelD #: 198

f. On or about May 18, 2020, WILLIAMS sent Bellamy a text message that |
included the phone number for Bank Processor 1 and stated: “You calling in regards to your
paycheck protection loan and want to check the status.”

g. On or about May 25, 2020, CHARNO forwarded to Levy an email from
Stote, in which Stote provided instructions for Levy to send the 25% fee. Stote wrote that the wire
for Levy “is 138,558.25” and should be sent to a specified account controlled by Stote.

h. On or about May 27, 2020, Stote and WILLIAMS finalized an application
on behalf of Bellamy’s company, Drip Entertainment LLC, for a $1,246,565 PPP loan application
through Bank Processor 1. The application included falsified IRS Forms 941. |

All in violation of Title 18, United States Code, Section 371.
| FORFEITURE
18. The allegations of Count 1 are hereby re-alleged and incorporated herein by
reference for the purpose of alleging forfeiture pursuant to Title 18, United States Code, Section
981(a)(1)(C) and Title 28, United States Code, Section 2461(c). As a result of the foregoing
offense, Defendants ROSS CHARNO and WYLEIA NASHON WILLIAMS shall forfeit to the
United States all property, real and personal, which constitutes—or is derived from—proceeds

traceable to the commission of the offense, including, but not limited to, the following:
Case: 1:21-cr-00806-PAB Doc #: 29 Filed: 11/10/21 9 of 9. PagelD #: 199

a, I8kt. white gold diamond engagement ring with one center stone: 3.54cts J
color, VVSI clarity, Square Emerald cut set on a pave set mounting with 1.50cts in round
diamonds of G color, VSI clarity. The ring, which had a $26,500.00 purchase price, was turned
. over to the government by ROSS CHARNO, through counsel, on or about November 5, 2021.

BRIDGET M. BRENNAN JOSEPH S. BEEMSTERBOER
Acting United States Attorney Acting Chief, Fraud Section

CHELSEA S. RICE, CHIEF PHILIP TROUT”
White Collar Crime Unit Trial Attorney, Fraud Section

9


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