Criminal Complaint - United States v. Maurice Fayne magistrate PPP fraud case (2020-05-12)
- Issuer
- U.S. District Court for the Northern District of Georgia
- Document type
- Criminal Complaint
- Date
- 2020-05-12
- Case
- United States v. Maurice Fayne magistrate
- Case number
- 1:20-mj-00370
Summary
A criminal complaint in United States v. Maurice Fayne, Case No. 1:20-mj-00370-JSA, in the U.S. District Court for the Northern District of Georgia, filed May 12, 2020 as Document 1 and sworn before United States Magistrate Judge Justin S. Anand. The complaint charges bank fraud in violation of 18 U.S.C. § 1344 in connection with a PPP loan from United Community Bank. The supporting affidavit of an FBI Special Agent states that a PPP application for Flame Trucking Inc. reported 107 employees and an average monthly payroll of $1,490,200, and that the loan was reduced from $3,725,500 to $2,045,800. It alleges that loan proceeds were used for loan payments and jewelry, that bank statements submitted with the application were not genuine, and that agents seized approximately $503,000. The affidavit requests an arrest warrant and sealing; the document is 13 pages.
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FILED IN CHAMBERS
Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 1 ofU.S.D.C
13 ATLANTA
Date: May 12 2020
__________________________
JAMES N. HATTEN, Clerk
United States District Court
NORTHERN DISTRICT OF GEORGIA s/B. Evans
By: ____________________________
Deputy Clerk
UNITED STATES OF AMERICA
v. CRIMINAL COMPLAINT
Case Number: 1:20-mj-370
MAURICE FAYNE, a/k/a “Arkansas Mo”
(UNDER SEAL)
I, the undersigned complainant being duly sworn, state the following is true and correct to the best of my
knowledge and belief. On or about April 28, 2020, in Gwinnett County, in the Northern District of
Georgia, the defendant did
knowingly execute and attempt to execute a scheme and artifice to defraud United Community Bank, a
financial institution as defined in Title 18, United States Code, Section 20, and to obtain moneys and
funds owned by and under the custody and control of United Community Bank, by means of materially
false and fraudulent pretenses, representations, and promises, and by the omission of material facts,
in violation of Title 18, United States Code, Section 1344.
I further state that I am a Special Agent of the Federal Bureau of Investigation, and that this complaint is
based on the following facts:
PLEASE SEE ATTACHED AFFIDAVIT, WHICH IS INCORPORATED BY REFERENCE HEREIN.
Continued on the attached sheet and made a part hereof. Yes
Paul Fike
Signature of Complainant
Paul Fike
Based upon this complaint, this Court finds that there is probable cause to believe that an offense has
been committed and that the defendant has committed it. Sworn to before me by telephone pursuant to
Federal Rule of Criminal Procedure 4.1.
May 12, 2020 at Atlanta, Georgia
Date City and State
JUSTIN S. ANAND
UNITED STATES MAGISTRATE JUDGE
Name and Title of Judicial Officer Signature of Judicial Officer
AUSA Russell Phillips / 2020R00423 Issued pursuant to Federal Rule of Criminal
Procedure 4.1
Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 2 of 13
Affidavit
I, Paul Fike, hereby depose and state under penalty of perjury that the
following is true and correct to the best of my knowledge and belief:
I am a Special Agent with the Federal Bureau of Investigation (“FBI”), and
I have been so employed since 1996. I am currently assigned to the Atlanta
Division investigating financial crimes, including wire fraud, mail fraud,
bank fraud, and securities fraud. I am a law enforcement officer of the
United States within the meaning of 18 U.S. C. §2510(7), and I am
empowered by law to conduct investigations and to make arrests for
federal felony offenses.
This affidavit is made in support of a criminal complaint charging Maurice
Fayne, a/k/a “Arkansas Mo” (hereinafter, Fayne), with bank fraud in
violation of 18 U.S.C. § 1344.
This affidavit is based, in part, on my conversations with other law
enforcement agents and witnesses, and my review of bank records and
other documents. This affidavit does not include every fact known to the
government, but only those facts necessary to support a finding of
probable cause to support the issuance of the requested arrest warrant.
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Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 3 of 13
Applicable Criminal Laws
The bank fraud statute, 18 U.S.C. § 1344, makes it a federal crime for
anyone to knowingly execute or attempt to execute a scheme and artifice
to defraud a financial institution, as defined in 18 U.S.C. § 20, or to obtain
moneys and funds owned by and under the custody and control of a
financial institution, by means of materially false and fraudulent pretenses,
representations, and promises, and by the omission of material facts.
The Paycheck Protection Program
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a
federal law enacted in or around March 2020 and was intended to provide
emergency financial assistance to 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 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 around April 2020, Congress authorized over $300
billion in additional PPP funding.
In order to obtain a PPP loan, a qualifying business must submit a PPP
loan application, which must be signed by an authorized representative of
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Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 4 of 13
the business. The PPP loan application requires 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, the small business (through its
authorized representative) must state, among other things, its: (a) average
monthly payroll expenses; and (b) number of employees. These figures are
used to calculate the amount of money the small business is eligible to
receive under the PPP. In addition, businesses applying for a PPP loan
must provide documentation showing their payroll expenses.
A PPP loan application must be processed by a participating financial
institution (the lender). If a PPP loan application is approved, the
participating financial institution funds the PPP loan using its own monies,
which are 100% guaranteed by Small Business Administration (SBA).
PPP loan proceeds must be used by the business on certain permissible
expenses—payroll costs, interest on mortgages, rent, and utilities. The PPP
allows the interest and principal on the PPP loan to be entirely forgiven if
the business spends the loan proceeds on these expense items within a
designated period of time (usually eight weeks of receiving the proceeds)
and uses at least 75% of the PPP loan proceeds on payroll expenses.
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Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 5 of 13
Flame Trucking Inc.
According to records on file with the Georgia Secretary of State:
a. Fayne incorporated Flame Trucking Inc. (“Flame Trucking”) on
April 4, 2019;
b. Fayne is the CEO and CFO of Flame Trucking; and
c. Flame Trucking’s principal office is located at 4029 Mountain Side
Trail, Dacula, Georgia 30019; and
Fayne resides at 4029 Mountain Side Trail, Dacula, Georgia 30019.
Flame Trucking’s PPP Loan Application
United Community Bank (“UCB”) is a federally insured financial
institution and has its headquarters in Blairsville, Georgia. UCB was an
approved SBA lender and has participated as a lender in the PPP.
On April 15, 2020, Fayne signed and submitted to UCB a PPP loan
application in the name of Flame Trucking. Fayne told UCB that Flame
Trucking had 107 employees and an average monthly payroll of
$1,490,200.
In Flame Trucking’s PPP loan application, Fayne certified that the loan
proceeds would be used to “retain workers and maintain payroll or make
mortgage interest payments, lease payments, and utility payments, as
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Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 6 of 13
specified under the Paycheck Protection Program Rule.” Fayne stated that
he understood he could be prosecuted for fraud if the PPP loan proceeds
were “knowingly used for unauthorized purposes.”
Flame Trucking’s PPP loan application requested a loan in the amount of
$3,725,500, and UCB originally funded the loan in that amount on April 22,
2020.
But UCB subsequently discovered that the loan exceeded the maximum
amount that Flame Trucking could borrow under PPP regulations.
Therefore, to comply with the regulations, UCB took back part of the loan
proceeds on April 28 and April 30, 2020, thereby reducing the loan amount
to $2,045,800.
Fayne’s Fraudulent use of PPP Loan Proceeds
On or about April 23, 2020, Fayne used Flame Trucking’s PPP loan
proceeds to fund a number of wire transfers, including the following:
a. $30,000 to D.J;
b. $50,000 to M.S.; and
c. $350,000 to C.W.
The $30,000 wire to D.J. and the $50,000 wire to M.S. were payments on
loans.
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Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 7 of 13
C.W. told a Wells Fargo investigator that she was not an employee of
Flame Trucking, and that Fayne is her “brother.” C.W. also told the Wells
Fargo investigator that, after receiving the $350,000 wire transfer from
Fayne, she disbursed that money according to Fayne’s directions.
C.W.’s bank records show that, on or about April 28, 2020, C.W. wire
transferred $84,000 to a jewelry store in Duluth, Georgia for “investment.”
C.W.’s bank records also show that, on or about April 30, 2020, C.W. wire
transferred $40,000 to a woman in Alexander, Arkansas for “child support
completion.”
When C.W. was later interviewed by federal agents, she stated that Fayne
is her “godbrother,” not her “brother.” C.W. also told federal agents that,
before she received the $350,000 wire transfer from Fayne, Fayne told her
he had received a COVID-19 loan from the U.S. government and would be
sending her some of it so that she could handle “payroll” for him when he
was not around. C.W. said Fayne told her that both of the wire transfers he
directed her to make (one to a jewelry store in Georgia and one to a
woman in Arkansas) were for “payroll” purposes.
Loan payments, jewelry purchases, and child support payments are not
authorized uses of PPP loan proceeds.
Page 6 of 12
Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 8 of 13
According to information obtained from the jewelry store, Fayne paid a
total of $85,065 (including the $84,000 wire transfer and a cash payment of
$1,065) for three pieces of jewelry, specifically: (1) one custom-made 18-
karat Rolex 41mm Presidential watch, serial number 5636S3S8, with
diamonds, which sold for $52,000; (2) one 10-karat custom-made Cuban
bracelet with 34.75 carats of diamonds, which sold for $24,500; and (3) one
14-karat custom-made ring with 5.73 carats of diamonds, which sold for
$3,750.
The following photograph shows a man, believed to be Fayne, wearing the
three pieces of jewelry described above:
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Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 9 of 13
On April 24, 2020, in support of Fayne’s assertion that Flame Trucking had
an average monthly payroll of $1,490,200, Fayne sent an email to UCB,
attaching what Fayne represented to be October, November, and
December 2019 bank statements for Flame Trucking’s account at Arvest
Bank.
According to Arvest Bank, Flame Trucking’s account was closed on
September 17, 2019.
Investigators provided Arvest Bank with copies of the purported October,
November, and December 2019 bank statements that were submitted to
UCB as part of Flame Trucking’s PPP loan application. Arvest Bank
reviewed those documents and informed investigators that they were not
genuine.
On April 27, 2020, Fayne withdrew $65,000 in cash from the UCB account
that held the PPP loan proceeds.
Fayne’s False Exculpatory Statements to Federal Agents
On May 6, 2020, Fayne was interviewed by federal agents. Fayne admitted
that he submitted a PPP loan application on behalf of Flame Trucking. But
Fayne claimed that he used all of the PPP loan proceeds to pay payroll and
other business expenses incurred by Flame Trucking. And Fayne expressly
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Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 10 of 13
denied that he used any of the PPP loan proceeds to pay his personal debts
and expenses.
Search and Seizure Warrants
Between May 7 and May 11, 2020, agents executed seizure warrants and
seized a total of approximately $503,000 in PPP loan proceeds from three
bank accounts used by Fayne to disburse the loan proceeds, including one
at UCB, one at Wells Fargo, and one at Navy Federal Credit Union.
On May 11, 2020, investigators executed a search warrant at Fayne’s
residence, which purportedly was also the principal office of Flame
Trucking.
During the search, agents told Fayne that they had seizure warrants for the
three pieces of jewelry described above. Fayne told agents that the jewelry
was stored in his bedroom, and agents seized the jewelry as authorized by
the seizure warrants. Fayne admitted that he purchased this jewelry with
proceeds of the PPP loan that UCB made to Flame Trucking.
Fayne told the agents that he believed he had the right to use part of the
PPP loan proceeds for “other business purposes” and for “working
capital.” Fayne also stated that he believed the jewelry would increase in
value because he would be wearing it, which would make it more valuable.
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Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 11 of 13
During the search, agents found a bag containing exactly $70,000 in U.S.
currency, most of which was bundled in $2,000 stacks and separated with
paper wrappers bearing the name “United Community Bank” and
stamped “April 23, 2020” or “April 24, 2020.” Two bundles of money were
in envelopes bearing the name “Navy Federal Credit Union.” When asked
where he got this cash, Fayne stated that it was his “personal money.”
During the search, agents seized $9,400 in U.S. currency from the pockets
of the clothes Fayne was wearing.
During the search, Fayne voluntarily agreed to speak with the agents.
Fayne was shown the Arvest Bank statements for October, November, and
December 2019, which were submitted to UCB as part of Flame Trucking’s
PPP loan application. Fayne denied that these were his bank statements,
but he admitted that they were transmitted from his email account to UCB.
Fayne stated that his employees also had access to his email account.
Fayne further stated that the entity identified in those documents as
“Heartland Payroll Systems” was not the payroll processor used by Flame
Trucking. Fayne claimed that he could not remember the name of the
payroll processor Flame Trucking actually used.
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Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 12 of 13
Agents asked Fayne whether he knows the Arkansas woman who received
the $40,000 wire transfer for “child support completion.” Fayne stated that
he does not know that woman, but he added that he does not know the
names of all of his “employees.”
In Fayne’s garage, Agents found a 2019 Rolls-Royce Wraith, VIN:
SCA665C53KUX87297, which still had a temporary dealer tag on it. Agents
asked Fayne whether he used any of the PPP loan proceeds to purchase
that vehicle, and Fayne said: “Kinda, sorta, not really.” According to
documents available online, the total suggested retail price of that vehicle
was $381,975. See https://www.bentleygoldcoast.com/2019-rolls-royce-
wraith-c-8148.htm, last visited 05/12/2020.
Conclusion
Based on my training and experience, and the information provided in this
affidavit, I respectfully submit that there is probable cause to believe that
Fayne’s conduct, as described above, violated the bank fraud statute, 18
U.S.C. § 1344, and I request that the Court issue a warrant for his arrest on
those charges.
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Case 1:20-mj-00370-JSA Document 1 Filed 05/12/20 Page 13 of 13
Request for Sealing
I further request that the Court order that this affidavit, the proposed
criminal complaint, the proposed arrest warrant, the motion to seal, and
the proposed sealing Order be sealed until further order of the Court.
These documents discuss an ongoing criminal investigation that is neither
public nor known to the target of the investigation. Accordingly, there is
good cause to seal these documents because their premature disclosure
may give the target an opportunity to flee, destroy or tamper with
evidence, change patterns of behavior, intimidate potential witnesses,
notify confederates, or otherwise seriously jeopardize the investigation.
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