Criminal Complaint - United States v. Eric Shibley PPP fraud case (2020-06-29)
- Issuer
- U.S. District Court for the Western District of Washington
- Document type
- Criminal Complaint
- Date
- 2020-06-29
- Case
- United States v. Eric Shibley
- Case number
- 2:20-cr-00174
Summary
A criminal complaint in United States of America v. Eric Shibley, Case No. MJ20-385, filed June 29, 2020 as Document 1 in Case 2:20-cr-00174-JCC in the U.S. District Court for the Western District of Washington, before United States Magistrate Judge Michelle L. Peterson. Count One charges wire fraud and Count Two charges bank fraud under Title 18, United States Code, Sections 1343, 1344 and 2, from in or around April 2020 through in or around June 2020. The complaint alleges that the defendant submitted a Paycheck Protection Program loan application to Financial Institution 1 on behalf of Dituri Construction LLC seeking more than $560,000, stating monthly payroll expenses of $225,400. The supporting affidavit of an FBI Special Agent describes the PPP and EIDL programs and sets out the facts offered as probable cause. The complaint runs 19 pages.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Case 2:20-cr-00174-JCC Document 1 Filed 06/29/20 Page 1 of 19
1
Magistrate Judge Michelle L. Peterson
2
3
4
5
6
7 UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF WASHINGTON
8
AT SEATTLE
9
CASE NO. MJ20-385
10
UNITED STATES OF AMERICA,
11
Plaintiff
COMPLAINT for VIOLATIONS OF
12
13 Title 18, United States Code, Sections 2,
v.
1343, & 1344(2)
14
ERIC SHIBLEY,
15
Defendant.
16
17 BEFORE, Michelle L. Peterson, United States Magistrate Judge, U. S. Courthouse,
18 Seattle, Washington.
19 The undersigned complainant being duly sworn states:
20 COUNT ONE
21 (Wire Fraud)
22 From in or around April 2020 through in or around June 2020, at Seattle, in the
23 Western District of Washington and elsewhere, ERIC SHIBLEY, the defendant,
24 knowingly devised and intended to devise a scheme and artifice to defraud the United
25 States, and to obtain money and property by means of false and fraudulent pretenses,
26 representations and promises, and attempted to do so.
27 A. Manner and Means
28 1. It was part of the scheme to defraud that SHIBLEY submitted false and
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Case No. SEATTLE, WASHINGTON 98101
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1 misleading loan applications to various financial institutions in order to obtain millions of
2 dollars in funds related to the Paycheck Protection Program and Economic Injury Disaster
3 Loan program.
4 2. It was further part of the scheme to defraud that SHIBLEY submitted a loan
5 application to Financial Institution 1 seeking more than $560,000 in funds under the
6 Paycheck Protection Program on behalf of Dituri Construction LLC.
7 3. SHIBLEY included in the loan application multiple material false
8 statements, including, but not limited to:
9 a. That, as of February 15, 2020, Dituri Construction LLC was in
10 operation and had employees for which it paid unemployment taxes or independent
11 contractors for which it provided MISC-1099s;
12 b. That Dituri Construction LLC had monthly payroll expenses of
13 $225,400; and
14 c. That SHIBLEY was not currently on probation.
15 B. Execution
16 On or about April 30, 2020, at Seattle, in the Western District of Washington and
17 elsewhere, SHIBLEY, for the purpose of executing the scheme described above transmitted
18 and caused to be transmitted by means of wire, radio, and television communication in
19 interstate and foreign commerce, writings, signs, signals, pictures, and sounds for the
20 purpose of executing such scheme and artifice, to wit, the transmission of a Paycheck
21 Protection Program loan application on behalf of Dituri Construction LLC from the
22 Western District of Washington to Financial Institution 1’s servers in Utah.
23 All in violation of Title 18, United States Code, Sections 1343 and 2.
24 COUNT TWO
25 (Bank Fraud)
26 From in or around April 2020 through in or around June 2020, at Seattle, in the
27 Western District of Washington and elsewhere, SHIBLEY, the defendant, knowingly
28 executed, and attempted to execute, a scheme to obtain monies owned and under the care,
COMPLAINT/United States v. Eric Shibley - 2 UNITED STATES ATTORNEY
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1 custody, and control of Financial Institution 1, a federally insured financial institution as
2 defined by Title 18, United States Code, Section 20, by means of false and fraudulent
3 pretenses, representations, and promises.
4 A. Manner and Means
5 1. It was part of the scheme to defraud that SHIBLEY submitted a loan
6 application to Financial Institution 1 seeking more than $560,000 in funds under the
7 Paycheck Protection Program on behalf of Dituri Construction LLC.
8 2. SHIBLEY included in the loan application multiple material false
9 statements, including, but not limited to:
10 a. That, as of February 15, 2020, Dituri Construction LLC was in
11 operation and had employees for which it paid unemployment taxes or independent
12 contractors for which it provided MISC-1099s;
13 b. That Dituri Construction LLC had monthly payroll expenses of
14 $225,400; and
15 c. That SHIBLEY was not currently on probation.
16 B. Execution
17 On or about April 30, 2020, at Seattle, in the Western District of Washington and
18 elsewhere, SHIBLEY submitted a loan application in the name of Dituri Construction LLC
19 to Financial Institution 1, and that loan application contained materially false statements.
20 All in violation of Title 18, United States Code, Sections 1344 and 2.
21 And the complainant states that this Complaint is based on the following
22 information:
23 I, KATHLEEN MORAN, being first duly sworn on oath, depose and say:
24 1. I am a Special Agent of the Federal Bureau of Investigation
25 (“FBI”) currently assigned to the white-collar crime squad in the Seattle Field Division. I
26 have been employed as a Special Agent of the FBI since May 2005. I have received basic
27 federal law enforcement training, including the training at the FBI Academy, as well as
28 other specialized federal law enforcement training. I have investigated violations of federal
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1 statutes governing various types of white-collar crime, including wire fraud, mail fraud,
2 bank fraud, securities fraud, money laundering, and theft of government and public money.
3 I have been a sworn law enforcement officer during all times herein.
4 2. The information contained in this Complaint is the result of my own
5 investigation as well as information provided to me by others, including other investigators
6 and law enforcement officers. In each instance when I recite information from such others,
7 I have gained that information either by talking directly to such investigators and law
8 enforcement officers or reviewing written reports of their investigation, or both. This
9 Complaint accurately summarizes some of the evidence I discovered during my
10 investigation; it does not, however, contain every detail known to me about the
11 investigation.
12 FACTS ESTABLISHING PROBABLE CAUSE
13 The Paycheck Protection Program
14 3. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a
15 federal law enacted in or around March 2020 and designed to provide emergency financial
16 assistance to the millions of Americans who are suffering the economic effects caused by
17 the COVID-19 pandemic. One source of relief provided by the CARES Act was the
18 authorization of up to $349 billion in forgivable loans to small businesses for job retention
19 and certain other expenses, through a program referred to as the Paycheck Protection
20 Program (“PPP”). In or around April 2020, Congress authorized over $300 billion in
21 additional PPP funding.
22 4. In order to obtain a PPP loan, a qualifying business must submit a PPP loan
23 application, which is signed by an authorized representative of the business. The PPP loan
24 application requires the business (through its authorized representative) to acknowledge
25 the program rules and make certain affirmative certifications in order to be eligible to
26 obtain the PPP loan. In the PPP loan application, the small business (through its authorized
27 representative) must state, among other things, its: (a) average monthly payroll expenses;
28 and (b) number of employees. These figures are used to calculate the amount of money
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1 the small business is eligible to receive under the PPP. In addition, businesses applying
2 for a PPP loan must provide documentation showing their payroll expenses.
3 5. A PPP loan application must be processed by a participating financial
4 institution (the lender). If a PPP loan application is approved, the participating financial
5 institution funds the PPP loan using its own monies, which are 100% guaranteed by Small
6 Business Administration (SBA). Data from the application, including information about
7 the borrower, the total amount of the loan, and the listed number of employees, is
8 transmitted by the lender to the SBA in the course of processing the loan.
9 6. PPP loan proceeds must be used by the business on certain permissible
10 expenses—payroll costs, interest on mortgages, rent, and utilities. The PPP allows the
11 interest and principal on the PPP loan to be entirely forgiven if the business spends the loan
12 proceeds on these expense items within a designated period of time and uses a certain
13 percentage of the PPP loan proceeds on payroll expenses.
14 The Economic Injury Disaster Relief Program
15 7. The Economic Injury Disaster Loan (“EIDL”) program is a U.S. Small
16 Business Administration (“SBA”) program that provides low-interest financing to small
17 businesses, renters, and homeowners in regions affected by declared disasters.
18 8. The CARES Act also authorizes the SBA to provide EIDLs of up to $2
19 million to eligible small businesses experiencing substantial financial disruption due to the
20 COVID-19 pandemic. In addition, the CARES Act authorized the SBA to issue advances
21 of up to $10,000 to small businesses within three days of applying for an EIDL. The
22 amount of the advance is determined by the number of employees the applicant certifies
23 having. The advances do not have to be repaid.
24 9. In order to obtain an EIDL and advance, a qualifying business must submit
25 an application to the SBA and provide information about its operations, such as the number
26 of employees, gross revenues for the 12-month period preceding the disaster, and cost of
27 goods sold in the 12-month period preceding the disaster. In the case of EIDLs for COVID-
28 19 relief, the 12-month period was that preceding January 31, 2020. The applicant must
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1 also certify that all of the information in the application is true and correct to the best of
2 the applicant’s knowledge.
3 10. EIDL applications are submitted directly to the SBA and processed by the
4 agency with support from a government contractor, Rapid Finance. The amount of the
5 loan, if the application is approved, is determined based, in part, on the information
6 provided by the application about employment, revenue, and cost of goods, as described
7 above. Any funds issued under an EIDL or advance are issued directly by the SBA. EIDL
8 funds can be used for payroll expenses, sick leave, production costs, and business
9 obligations, such as debts, rent, and mortgage payments. If the applicant also obtains a
10 loan under the PPP, the EIDL funds cannot be used for the same purpose as the PPP funds.
11 SHIBLEY and Individual 1
12 11. SHIBLEY is a citizen of the United States. According to public records,
13 SHIBLEY is a medical doctor. According to records available on the Washington State
14 Department of Health website, the status of SHIBLEY’s license to practice medicine is
15 identified as “summary restriction” due to allegations of unprofessional conduct.
16 According to information obtained in the investigation, SHIBLEY’s office address is
17 located in Seattle, Washington (“the SHIBLEY Address”). The investigation has revealed
18 that SHIBLEY appears to reside, at least some of the time, at this address as well.
19 a. According to records from the Anacortes Municipal Court, located in
20 Anacortes, Washington, SHIBLEY pled guilty to a Violation of a No Contact Order, a
21 criminal misdemeanor under Washington State law, on December 13, 2018 and was
22 sentenced to a jail term of 364 days, with 334 days suspended, a $5,000 fine, and two years’
23 probation. 1 The case number is AC17582. SHIBLEY is currently on probation until
24 December 13, 2020. An agent spoke with SHIBLEY’s Probation Officer on or about May
25 26, 2020, and she confirmed SHIBLEY remains on probation through December 13, 2020.
26
27
1
28 According to SHIBLEY’s Probation Officer, SHIBLEY was allowed to serve the 30 days
that was not suspended on Electronic Home Monitoring.
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1 b. According to information obtained from SHIBLEY’s Probation Officer,
2 SHIBLEY last met with her on or about January 23, 2020. Further, he was supposed to
3 report to her on or about March 9, 2020 but did not do so. On or about May 13, 2019,
4 SHIBLEY signed a document which noted his probation did not terminate until December
5 2020.
6 c. According to information received from the Washington State Employment
7 Security Department (“WA ESD”), SHIBLEY applied for unemployment benefits on or
8 about April 21, 2020, under a provision of the CARES Act that provides for unemployment
9 benefits for independent contractors or self-employed individuals whose work has been
10 affected by the COVID-19 public health emergency, who may not be eligible otherwise for
11 state unemployment. SHIBLEY received unemployment benefits in the form of weekly
12 payments covering the weeks from on or about March 7, 2020 through at least on or about
13 May 16, 2020.
14 12. Individual 1 is a resident of Seattle, Washington. According to Washington
15 state records, on or about October 22, 2019, Individual 1 was charged in Washington State
16 on state felony drug charges. Individual 1 was arrested on or about April 21, 2020, for
17 failing to appear in the pending case that resulted from the October 2019 charges.
18 Internet and Phone Records
19 13. Records obtained from Comcast show that a subscriber by the name of
20 Shibley Medical was assigned an IPv4 address and an IPv6 address (“the SHIBLEY IP
21 Address”). 2 Records from Comcast show that the subscription address was the SHIBLEY
22 Address.
23 14. Phone Number 1 is listed as the contact number on the Shibley Medical
24
25 2
There are two (2) types of IP addresses commonly used by ISPs: IP version 4 (“IPv4”)
26 and IP version 6 (“IPv6”). It is common to have an Internet Service Provider (“ISP”) assign
both IPv4 and IPv6 to the same subscriber, and as a result, ISPs may provide a single
27 subscriber an IPv4 address and an IPv6 address. For ease of reference, I refer to these
28 collectively as the SHIBLEY IP Address
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1 website (www.shibley-medical.com), which is the website for SHIBLEY’S medical
2 practice. The website lists the office address as the SHIBLEY Address, the same address
3 used on SHIBLEY’s driver’s license. The government has obtained records related to
4 Phone Number 1. Subscriber records show that the number is a Comcast provided number.
5 The Subscriber is Shibley Medical and the address for the account is the SHIBLEY
6 Address.
7 Dituri Construction LLC and Related Entities
8 15. On or about January 9, 2020, an EIN ending in 8508 was obtained from the
9 Internal Revenue Service (“IRS”), for Dituri Construction LLC. The business address
10 provided at the time of application for the EIN assignment was an address in Seattle,
11 Washington later identified as the residence of Individual 1. The EIN was requested by an
12 individual using the Social Security Number of Individual 1.
13 16. According to records from the WA SOS, on or about April 30, 2020—nine
14 days after Individual 1’s arrest for failure to appear—documents were filed with the WA
15 SOS purporting to transfer ownership of Dituri Construction LLC to SHIBLEY. A new
16 Operating Agreement was filed with the WA SOS, purportedly dated January 7, 2020, and
17 signed by Individual 1 and SHIBLEY. The Operating Agreement stated that SHIBLEY
18 owned 90 percent of the company, while Individual 1 owned 10 percent. Separately, the
19 government has obtained a copy of what purports to be the “Purchase Agreement” between
20 SHIBLEY and Individual 1 for the sale of Dituri Construction, LLC, in which SHIBLEY
21 purported to buy an ownership interest in exchange for a sale price of $10.00. The Purchase
22 Agreement’s listed execution date is on or about May 9, 2020.
23 17. Records from two U.S. financial institutions show that after SHIBLEY
24 purported to acquire Dituri Construction LLC, he opened several bank accounts in the
25 name of the entity. On or about April 30, 2020, SHIBLEY opened two accounts in the
26 name of Dituri Construction LLC at Financial Institution 2. On or about June 3, 2020,
27 SHIBLEY opened three accounts in the name of Dituri Construction LLC at Financial
28 Institution 3.
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1 18. IRS records show that on or about May 28, 2020, an EIN ending in 8667
2 was obtained from the IRS on behalf of a purported entity called Dituri Construction
3 (without an “LLC” or any other corporate identifier at the end of the name). The business
4 address provided at the time of application was the SHIBLEY Address. Similarly, records
5 from the IRS and the internet provider Comcast show that the IP address used to apply for
6 the EIN was the SHIBLEY IP Address.
7 19. IRS records show that on or about May 29, 2020, an EIN ending in 1739
8 was obtained from the IRS on behalf of a purported entity called “Thomas Dituri
9 Construction.” According to records provided by the IRS and Comcast, the EIN was
10 requested from the SHIBLEY IP Address.
11 Fraudulent PPP Loan Application Submitted to Financial Institution 1
for Dituri Construction LLC
12
20. Financial Institution 1 is a federally insured bank headquartered in Salt
13
Lake City, Utah. Financial Institution 1 is an SBA Approved Lender and has participated
14
as a PPP lender to small businesses. Financial Institution 1’s servers are located in Utah.
15
21. According to records provided by Financial Institution 1, on or about April
16
30, 2020, SHIBLEY digitally signed and submitted an application package in support of a
17
$563,500 PPP loan for Dituri Construction LLC. (The date of submission was the same
18
date as the purported transfer of a 90 percent ownership interest in Dituri Construction LLC
19
from Individual 1 to SHIBLEY). According to records provided by Financial Institution
20
1, the final loan application package was submitted from the SHIBLEY IP Address.
21
22. Financial Institution 1 provided the government the SBA Form 2483
22
submitted with Dituri Construction LLC’s PPP loan application and bearing a signature in
23
SHIBLEY’s name. The application identified SHIBLEY as a 90 percent owner of the
24
business, the SHIBLEY Address as the business address, and Phone Number 1 as the
25
business phone number. The application did not identify who owned the remaining 10
26
percent of the entity.
27
23. The Form 2483 submitted to Financial Institution 1 represented that Dituri
28
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1 Construction LLC had an average monthly payroll of $225,400 and 49 employees. With
2 the application, SHIBLEY submitted what purported to be an IRS Form 941, Employer’s
3 Quarterly Federal Tax Return, for Dituri Construction LLC for the first quarter of 2020.
4 According to the form, between January and March 2020, Dituri Construction LLC paid
5 $392,000 in wages to 49 employees and withheld no federal income taxes from those
6 wages. The form purported to report that Dituri Construction LLC owed $59,976 in federal
7 employment related taxes for the first quarter of 2020. The form purports to be signed by
8 SHIBLEY and is dated April 28, 2020, two days before SHIBLEY submitted a PPP loan
9 application for Dituri Construction LLC.
10 24. SHIBLEY made several false certifications in support of the loan application
11 for Dituri Construction LLC:
12 a. For example, SHIBLEY answered “no,” and initialed by the response, to
13 Question 5 on the application: “Is the Applicant (if an individual) or any individual owning
14 20 percent or more of the equity of the Applicant subject to an indictment, criminal
15 information, arraignment, or other means by which formal criminal charges are brought in
16 any jurisdiction, or presently incarcerated, or on probation or parole.” (The application
17 notes that “If questions (5) or (6) are answered ‘Yes,’ the loan will not be approved.”) In
18 fact, as described above, SHIBLEY was on probation at the time he submitted the
19 application on behalf of Dituri Construction LLC.
20 b. SHIBLEY also certified that Dituri Construction LLC “was in operation on
21 February 15, 2020 and has employees for whom it paid salaries and payroll taxes or paid
22 independent contractors, as reported on Form(s) 1099-MISC.” This was false. As
23 described further below, evidence gathered in the investigation demonstrates that Dituri
24 Construction LLC has no apparent employees for which it pays federal payroll taxes and
25 the Form 941 SHIBLEY provided in support of the PPP loan application is fake. In
26 addition, according to information from the WA ESD, “From January 1, 2017 through
27 March 31, 2020, our records fail to disclose any employer quarterly reports being submitted
28 by [Dituri Construction LLC; ending in the last four digits 8508].” Therefore, there is no
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1 evidence that, as of February 15, 2020, Dituri Construction LLC had employees for whom
2 it paid state payroll taxes.
3 25. On or about May 4, 2020, Financial Institution 1 approved the full loan
4 amount of $563,500. On or about May 6, 2020, Financial Institution 1 disbursed the loan
5 funds to one of the accounts in the name of Dituri Construction LLC at Financial Institution
6 2 that SHIBLEY had opened on or about April 30, 2020, the same day the Dituri
7 Construction LLC loan application was submitted to Financial Institution 1.
8 Recorded Call and Subsequent Emails with SHIBLEY about the PPP Application
9 26. On or about May 27, 2020, an agent posing as a representative of Financial
10 Institution 1 called Phone Number 1. After no one answered, the agent left a voicemail
11 message. An individual called the agent back from a different phone number identifying
12 himself as SHIBLEY and providing the last four digits of SHIBLEY’s Social Security
13 Number to confirm his identification. The call was recorded (hereinafter the “May 27
14 Recorded Call”). During the call, SHIBLEY was asked whether he was on any type of
15 parole or probation in relation to the violation of no-contact order charge described above.
16 The agent also explained that, if SHIBLEY was currently on probation, that was
17 disqualifying. SHIBLEY provided various responses, including that he was not on
18 probation, that the charge for violating the no-contact order had been dismissed, and that
19 the case had wrapped up a long time ago. Based on information obtained from SHIBLEY’s
20 Probation Officer, described above, these statements were false.
21 27. During the May 27 recorded call, SHIBLEY was also asked about the IRS
22 Form 941 he submitted with the Dituri Construction LLC application. In response,
23 SHIBLEY stated that the IRS Form 941 he submitted with the application had not actually
24 been filed with the IRS, because he was behind on his taxes by a couple of years.
25 Accordingly, as of February 15, 2020, Dituri Construction LLC did not have employees
26 for whom it paid federal payroll taxes.
27 28. During the May 27 recorded call, SHIBLEY agreed to submit several names
28 of employees to Financial Institution 1 to verify the employment representations in the
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1 application for Dituri Construction LLC.
2 29. On or about May 28, 2020, an individual identifying himself as SHIBLEY
3 and using the email address shibley98126@gmail.com, emailed Financial Institution 1 a
4 list of seven names of purported employees with what he claimed to be the last four digits
5 of each individual’s Social Security Number and phone number. In the email, SHIBLEY
6 told Financial Institution 1 that the employees “know me by name and ‘A Team.’” Based
7 on the investigation, “A Team” is believed to be a reference to The A Team Holdings LLC,
8 one of the Shibley entities under which SHIBLEY applied for and obtained a PPP loan in
9 the amount of $960,000. Based on my training and experience, SHIBLEY’s email suggests
10 that he is not operating an active business under the name of Dituri Construction LLC and
11 may have used the same business to apply for multiple PPP loans.
12 Interviews of Purported Dituri Construction LLC Employees
Indicate They Did Not Work for the Company
13
30. Further investigation has also revealed that none of the individuals that
14
SHIBLEY claimed to work for Dituri Construction LLC actually work for the entity.
15
Based on my training and experience, this suggests that Dituri Construction LLC does not
16
have employees as SHIBLEY represented.
17
31. An initial search of law enforcement databases has revealed that the name
18
and last four digits of the Social Security Number given for one of the purported employees,
19
S.M., is associated with an individual that has been deceased since 1987.
20
32. The name and last four digits of the Social Security Number provided for
21
another purported employee are associated with an individual, L.V., whom I interviewed
22
on or about June 18, 2020. The individual told me that she has never heard of or been
23
employed by SHIBLEY, Dituri Construction LLC, or any of his other entities. She also
24
relayed that she has been employed by her current employer, which is unrelated to
25
SHIBLEY, since September 2017.
26
33. In separate recorded calls on or about June 5, 2020, with an agent posing as
27
a representative of Lender 2, purported employees E.P. and R.R. both claimed to work for
28
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1 “A Team.” In another recorded call on or about June 5, 2020, purported employee C.C.L
2 stated she was a house cleaner and personal assistant for SHIBLEY. She stated she worked
3 for either “A Team” or “SS1.”
4 34. Another purported employee, M.T., was interviewed on or about June 10,
5 2020. M.T. told agents that he worked for “ELS LLC” doing plumbing work and other
6 renovation projects since in or around October 2019. According to M.T., ELS LLC is the
7 only company he knows of that SHIBLEY owns and the only company of SHIBLEY’s for
8 which he has worked.
9 35. Another purported employee, D.S., was interviewed on June 10, 2020, and
10 told agents, including myself, that he has worked for SHIBLEY since in or around October
11 2019 doing home renovations. He reported that he is paid in cash and does not know the
12 name of the company he works for, though he thinks that information would be on the
13 packet of information he received when he began work. He also reported that he is paid
14 by the job, not by the hour.
15 36. Based on my training and experience, the statements of E.P., R.R., C.C.L.,
16 M.T., and D.S. suggest that SHIBLEY is not operating an active business under the name
17 of Dituri Construction LLC and may have used the same business to apply for multiple
18 PPP loans under different entity names.
19 Additional PPP Loan Applications by SHIBLEY in the Name of
Dituri Construction LLC
20
37. Separate from the funded PPP loan application to Financial Institution 1,
21
the investigation has revealed that SHIBLEY submitted PPP loan applications in the name
22
of Dituri Construction LLC to other SBA lenders, including a non-bank lender (Lender 1).
23
However, a comparison of these PPP applications show that SHIBLEY provided
24
inconsistent information about the company to different lenders.
25
38. As part of the supporting documentation submitted on behalf of Dituri
26
Construction LLC, SHIBLEY provided both Financial Institution 1 and Lender 1 purported
27
IRS Forms 941 for the first quarter of 2020. However, a comparison of the two IRS Form
28
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(206) 553-7970
Case 2:20-cr-00174-JCC Document 1 Filed 06/29/20 Page 14 of 19
1 941’s show SHIBLEY reported different total wages to the two different lenders.
2 According to the Form 941 submitted to Lender 1, which was purportedly signed by
3 SHIBLEY on April 22, 2020, Dituri Construction LLC paid wages and compensation
4 totaling $784,000 in the first quarter of 2020. However, according to the Form 941
5 provided to Financial Institution 1, which was purportedly signed by SHIBLEY on April
6 28, 2020, Dituri Construction LLC paid approximately $392,000 in wages and
7 compensation during that period. Based on my training and experience, these
8 discrepancies suggest that the Form 941s are fake and were created specifically to support
9 the specific loan amounts sought in each application.
10 SHIBLEY’s Efforts to Withdraw Large Sums of PPP Loan Proceeds in Cash
11 39. On or about May 22 and 25, 2020, agents spoke with employees from
12 Financial Institution 2. The employees confirmed that an account at Financial Institution
13 2 in the name of Dituri Construction LLC had received approximately $563,500 in PPP
14 loan funding. They further relayed that on or about May 13, 2020, SHIBLEY asked to
15 withdraw the Dituri Construction LLC PPP loan funds totaling $563,500 in cash.
16 40. According to the Financial Institution 2 investigators, SHIBLEY further
17 stated that he would later be requesting a cash withdrawal of $820,000 in PPP funds that
18 had been issued to another company controlled by SHIBLEY (SS1 LLC). When a
19 Financial Institution 2 Investigator asked SHIBLEY the reason for the bulk cash
20 withdrawals, SHIBLEY responded that it was because many of his employees did not have
21 Social Security Numbers, so he pays them in cash. (SHIBLEY’s assertion that many of
22 the Dituri Construction LLC and SS1 LLC employees do not have Social Security Numbers
23 is also inconsistent with his provision to Financial Institution 1 of Social Security Numbers
24 for purported Dituri Construction LLC employees on or about May 28, 2020.)
25 41. On or about May 26, 2020, after learning of the government’s investigation,
26 Financial Institution 1 recalled the $563,500 in PPP funds from Financial Institution 2. On
27 or about June 1, 2020, Financial Institution 1 cancelled the loan for Dituri Construction,
28 LLC.
COMPLAINT/United States v. Eric Shibley - 14 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220
Case No. SEATTLE, WASHINGTON 98101
(206) 553-7970
Case 2:20-cr-00174-JCC Document 1 Filed 06/29/20 Page 15 of 19
1 42. I have reviewed surveillance videos and photos received from Financial
2 Institution 2. On or about May 13, 2020, video from Financial Institution 2 shows a man
3 matching SHIBLEY’s description meeting with Financial Institution 2 representatives.
4 Other PPP and EIDL Loan Applications Submitted for the Shibley Entities
5 43. The investigation has revealed that SHIBLEY claims ownership in or has
6 obtained federal Employer Identification Numbers (EIN) for at least ten different
7 businesses (collectively, “the Shibley Entities”), listed below:
8 Last Four Digits of Employer
Business Name
Identification Number (“EIN”)
9
Dituri Construction LLC 8508
10
Dituri Construction 8667
11
Thomas Dituri Construction 1739
12
Eric R Shibley MD PLLC d/b/a
9052
13 Shibley Medical
14 The A Team Holdings LLC 7088
15 SS1 7509
16 SS1 LLC 2134
17 ES1 LLC 5849
Seattle’s Finest Cannabis LLC a/k/a
18 3580
SFC LLC
19 Eric R Shibley MD PLLC 8805
20 Shibley Foundation 1253
21 44. WA ESD has no record of any employment tax filings for the following
22 entities listed above: Dituri Construction LLC, The A Team Holdings LLC, SS1, SS1 LLC,
23 Seattle’s Finest Cannabis LLC, ES1 LLC, or Eric R Shibley MD PLLC (EIN ending 8805).
24 According to WA ESD, employment tax information has only been filed for Eric R Shibley
25 MD PLLC d/b/a Shibley Medical (EIN ending 9052) for Quarter 1, Quarter 2, and Quarter
26 3 of 2017. The government has not yet obtained information from WA ESD related to
27 Shibley Foundation, Dituri Construction (EIN ending 8667), and Thomas Dituri
28 Construction (EIN ending 1739).
COMPLAINT/United States v. Eric Shibley - 15 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220
Case No. SEATTLE, WASHINGTON 98101
(206) 553-7970
Case 2:20-cr-00174-JCC Document 1 Filed 06/29/20 Page 16 of 19
1 45. In total, the investigation has revealed that at least 12 PPP loan applications
2 and at least 13 EIDL loan applications have been submitted for several of the Shibley
3 Entities. In total, SHIBLEY sought over $3.3 million in PPP and EIDL loan proceeds
4 through these applications.
5 46. The following PPP loan applications were submitted to the following
6 lenders:
7 Entity Name / Submitted Loan Approx. Date of
Lender
EIN (Last Four Digits) Amount Application
8
Dituri Construction, LLC /
Financial Institution 1 $563,500 4/30/2020
9 8508
10 ES1, LLC / 5849 Financial Institution 2 $95,750 4/15/2020
11 Eric r Shibley, MD, PLLC
Financial Institution 4 $93,900 5/7/2020
d/b/a Shibley Medical / 9052
12 ES1, LLC Financial Institution 5 $97,000 Unknown 3
13 ES1, LLC / 5849 Financial Institution 6 $100,000 4/15/2020
14 Seattle’s Finest Cannabis,
Financial Institution 6 $100,000 4/25/2020
LLC / 3580
15
Eric R Shibley MD PLLC /
16 Financial Institution 6 $100,000 4/15/2020
9052
17 SFC, LLC / 8358 4 Financial Institution 7 $94,000 5/21/2020
18 The A Team Holdings LLC Financial Institution 8
$960,000 4/12/2020
/ 7088 / Lender 1
19 Financial Institution 8
SFC, LLC / 3580 $62,600 6/2/2020
20 / Lender 3
Financial Institution 8
21 SFC, LLC / 3580 $62,600 6/19/2020
/ Lender 3
22 SS1 / 7509 Lender 2 $820,000 4/20/2020
23
24 3
The government is still waiting for certain PPP Loan files from the certain lender, and the
information that is unknown at this time is noted in this table.
25
4
26 Based on the investigation, I believe that this application was submitted with a
typographical error on the EIN. Based on the EIN assigned to Seattle’s Finest Cannabis
27 LLC, which was renamed SFC LLC, I believe the EIN submitted was missing a digit and
28 should have ended with 3580.
COMPLAINT/United States v. Eric Shibley - 16 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220
Case No. SEATTLE, WASHINGTON 98101
(206) 553-7970
Case 2:20-cr-00174-JCC Document 1 Filed 06/29/20 Page 17 of 19
1 47. The following EIDL loan applications were submitted:
2 Entity Name / Submitted SBA Application Loan Approx. Date of
3 EIN (Last Four Digits) Number Amount 5 Application
Dituri Construction, LLC /
4 3304338608 $115,000 6/7/2020
8508
5 N/A – Loan
Dituri Construction LLC 3304925314 6/16/20
Canceled
6
SS1 LLC / 7509 3304338551 $115,000 6/7/2020
7
SS1 LLC 3304924428 Canceled 6/16/20
8 Eric r Shibley, MD, PLLC
3600262629 $31,000 3/31/2020
9 d/b/a Shibley Medical / 9052
N/A – Loan
10 ES1 LLC / 5849 3600261356 3/31/2020
Declined
11 N/A – Loan
ES1 LLC 3304338652 6/7/20
Canceled
12
Seattle’s Finest Cannabis,
3601282989 $15,000 4/15/2020
13 LLC / 3580
N/A – Loan
14 SFC LLC 3304338580 6/7/20
Canceled
15 N/A – Loan
SFC LLC 3304338625 6/7/20
16 Canceled
Eric Shibley (using his Social
17 3601212749 $25,000 4/13/2020
Security Number)
18 Eric DBA Shibley (using his 3601212786
N/A - Agency
4/13/2020
Social Security Number) Hold
19 The A Team Holdings LLC / N/A – Loan
3600260002 3/31/2020
20 7088 Declined
21 48. Through the investigation, the government has received records, including
22 the PPP loan and EIDL applications, from many of the above financial institutions and
23 lenders. All the applications for which the government has received records were
24 submitted in SHIBLEY’s name as the relevant entity’s authorized representative and
25 owner. Each application also identified SHIBLEY by his Social Security Number and
26
27
5
28 The amount for an EIDL is not determined until the SBA accepts the loan application.
As such, there are not loan amounts for some of the EIDLs.
COMPLAINT/United States v. Eric Shibley - 17 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220
Case No. SEATTLE, WASHINGTON 98101
(206) 553-7970
Case 2:20-cr-00174-JCC Document 1 Filed 06/29/20 Page 18 of 19
1 identified the business address as the SHIBLEY Address. A copy of a Washington State
2 driver’s license in SHIBLEY’s name and with his identifying information, including the
3 SHIBLEY Address described above, also was submitted with some of the applications.
4 49. All the PPP loan applications listed above contained at least one materially
5 false statement. SHIBLEY did not disclose on any of the applications that he was on active
6 probation at the time of the applications and answered “No” to Question 5 of the
7 application, as described above. These certifications were all false, as SHIBLEY remains
8 on probation until December 2020.
9 50. Some loan applications carry other indicia of fraud as well. For example,
10 Lender 2 has provided records relating to a PPP loan application submitted to Lender 2 for
11 SS1 LLC seeking $820,000 on or about April 20, 2020. According to Washington SOS
12 records, however, on or about March 3, 2020, SS1 LLC was administratively dissolved
13 after the entity failed to file its 2019 annual report. (It was reinstated on or about April 6,
14 2020, after a fee was paid.) Furthermore, as described above, on or about May 29, 2020,
15 an individual claiming to be SHIBLEY emailed Lender 2 a list with ten purported
16 employees of SS1 LLC with what he claimed to be the last four digits of each individual’s
17 Social Security Number and phone number. The list included the same seven names (with
18 the same Social Security Numbers and phone numbers) that were provided on the previous
19 day, May 28, 2020, to Financial Institution 1, as employees of Dituri Construction LLC.
20 As described above, six of the seven employees either had no association with SHIBLEY
21 or his businesses or claimed to be employed by a business other than Dituri Construction
22 LLC or SS1. In addition, the government has interviewed the three new individuals
23 SHIBLEY provided for SS1 LLC. They too claim to be employed by entities other than
24 Dituri Construction LLC or SS1 LLC.
25 CONCLUSION
26 51. Based on the above facts, I respectfully submit that there is probable cause
27 to believe that ERIC SHIBLEY did willfully and knowingly, having devised and intending
28 to devise a scheme and artifice to defraud, and for obtaining money and property by means
COMPLAINT/United States v. Eric Shibley - 18 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220
Case No. SEATTLE, WASHINGTON 98101
(206) 553-7970
Case 2:20-cr-00174-JCC Document 1 Filed 06/29/20 Page 19 of 19
1 of false and fraudulent pretenses, representations and promises, and attempting to do so,
2 transmitted and caused to be transmitted by means of wire, radio, and television
3 communication in interstate and foreign commerce, writings, signs, signals, pictures, and
4 sounds for the purpose of executing such scheme and artifice, in violation of Title 18,
5 United States Code, Sections 1343 and 2.
6 52. Based on the above facts, I further respectfully submit that there is probable
7 cause to believe that SHIBLEY knowingly executed, and attempted to execute, a scheme
8 to defraud Financial Institution 1, a federally insured financial institution, and obtain
9 monies owned and under the care, custody, and control of that financial institution by
10 means of false and fraudulent pretenses, representations, and promises, in violation of Title
11 18, United States Code, Sections 1344 and 2.
12
13
14 KATHLEEN MORAN, Complainant
Special Agent, FBI
15
16 The above-named agent provided a sworn statement attesting to the truth of the
17 contents of the foregoing affidavit, and based on the Complaint and Affidavit, the Court
18 hereby finds that there is probable cause to believe the Defendant committed the offenses
19 set forth in the Complaint.
20 Dated this day of June, 2020.
21
22
23
24 MICHELLE L. PETERSON
United States Magistrate Judge
25
26
27
28
COMPLAINT/United States v. Eric Shibley - 19 UNITED STATES ATTORNEY
700 STEWART STREET, STE 5220
Case No. SEATTLE, WASHINGTON 98101
(206) 553-7970
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