Complaint — United States v. Brandon Boyle (No. 22-mj-09604, S.D.N.Y.)
Summary
Sealed complaint in United States v. Brandon Boyle, 22 MAG 9604, in the Southern District of New York, charging wire fraud under 18 U.S.C. §§ 1343 and 2 before Magistrate Judge Stewart D. Aaron. Special Agent LaVale Jackson of the U.S. Attorney's Office states that the investigation concerns public employees who submitted fraudulent SBA loan applications related to the COVID-19 pandemic, and that Boyle, employed by the NYPD, applied for a $10,000 EIDL loan for a sole proprietorship called HoodEATS, which the SBA declined on or about August 21, 2020. It states that on a PPP application submitted on or about April 8, 2021, Financial Institution-1 paid $20,415 to Boyle's account on or about April 29, 2021. The document closes with a complaint seeking an arrest warrant for Edwin Skepple, sworn on the 29th day of November 2022.
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“Complaint — United States v. Brandon Boyle (No. 22-mj-09604, S.D.N.Y.).”
Original at web.archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/complaint-no-22-mj-09604-s-d-n-y-7e84185816/
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Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
22 MAG 9604
Southern District of New York
- - - - - - - - - - - - - - - - - - X
: SEALED COMPLAINT
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343 and 2
:
BRANDON BOYLE, :
: COUNTY OF OFFENSE:
Defendant. : NEW YORK
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Wire Fraud)
1. From at least in or about August 2020, up to and
including at least in or about April 2021, in the Southern District
of New York and elsewhere, BRANDON BOYLE, the defendant, knowingly
and with the intent to defraud, having devised and intending to
devise a scheme and artifice to defraud, and for obtaining money
and property by means of false and fraudulent pretenses,
representations, and promises, transmitted and caused to be
transmitted by means of wire communication in interstate and
foreign commerce, writings, signs, signals, pictures, and sounds
for the purpose of executing such scheme and artifice, to wit,
BOYLE engaged in a scheme to obtain funds from the United States
Small Business Administration (“SBA”) through the SBA’s Economic
Injury Disaster Loan (“EIDL”) Program and to obtain Government-
guaranteed loan proceeds from the SBA and a financial institution
through the SBA’s Paycheck Protection Program (“PPP”), by
submitting false and fraudulent loan applications.
(Title 18, United States Code, Sections 1343 and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
2. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
3. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”), have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
4. At all times relevant to this Complaint, BRANDON BOYLE,
the defendant, was employed by the New York City Police Department
(“NYPD”).
5. From in or about August 2020 to in or about April 2021,
BRANDON BOYLE, the defendant, engaged in a scheme to defraud the
SBA and a certain financial institution (“Financial Institution-
1”) and enrich himself, by applying for an EIDL loan for a sole
proprietorship called HoodEATS and a PPP loan for a sole
proprietorship in BOYLE’s own name, using applications that
contained materially false representations about his purported
businesses. The fraudulent EIDL application, which sought $10,000,
was denied. Based on the fraudulent PPP loan application, Financial
Institution-1 issued an SBA-guaranteed PPP loan to BOYLE in the
amount of $20,415.
2
The SBA’s EIDL Program
6. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. As relevant here, this
assistance includes making direct loans to applicants through the
EIDL program.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act expanded the
SBA’s EIDL program, which provided small businesses with low-
interest loans of up to $2 million prior to in or about May 2020,
and up to $150,000 between in or about May 2020 and in or about
December 2021, in order to provide vital economic support to help
overcome the loss of revenue small businesses experienced due to
COVID-19. These loans were made directly by the SBA.
c. To qualify for an EIDL under the CARES Act, an
applicant had to have suffered “substantial economic injury” from
COVID-19, based on an actual economic injury determined by the
SBA. EIDLs could only be used for certain specified purposes, such
as for payroll and other similar costs, increased costs due to
supply chain interruption, to pay obligations that could not be
met due to revenue loss, and for other similar uses.
d. The CARES Act also permitted applications to
request an advance of up to $10,000 to pay allowable working
capital needs. Advances were expected to be paid by the SBA within
three days of the submission of an EIDL application to the SBA,
provided the application contained a self-certification under
penalty of perjury of the applicant’s eligibility for an EIDL.
e. Individuals were permitted to submit EIDL
applications electronically through the SBA’s website, which
recorded various information about the application and applicant.
Applicants received email notifications at various points in the
application process, including, if applicable, when the SBA
extended an offer and when the SBA approved the loan.
3
The SBA’s PPP
7. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
a. As noted above, the SBA, among other things,
guarantees loans issued by certain lenders, to qualifying small
businesses. Under the SBA loan guarantee programs, the actual loan
is issued by a commercial lender, but the lender receives the full
faith and credit backing of the United States Government on all or
part of the loan. Therefore, if a borrower defaults on an SBA-
guaranteed loan, the commercial lender may seek reimbursement from
the SBA, up to the percentage of the guarantee. By reducing the
risk to commercial lenders, the SBA’s loan guarantee programs
enable lenders to provide loans to qualifying small businesses to
which financing might otherwise be unavailable on reasonable terms
through normal lending channels. When a borrower seeks an SBA-
guaranteed loan, the borrower must meet both the commercial
lender’s eligibility requirements for the loan as well as the SBA’s
eligibility requirements.
b. The CARES Act authorized billions of dollars in
forgivable loans to small businesses for job retention and certain
other business expenses through the PPP. On April 24, 2020, the
Paycheck Protection Program and Health Care Enhancement Act was
signed into law, authorizing additional billions of dollars in PPP
funding. The first round of the PPP closed to new applications on
August 8, 2020. On December 27, 2020, the Consolidated
Appropriations Act of 2021, which included the Economic Aid to
Hard-Hit Small Businesses, Nonprofit, and Venues Act (the “Relief
Act”) was signed into law, providing additional funding for the
PPP. Under the Relief Act, certain businesses that had already
obtained a PPP loan under the original PPP were eligible for an
additional “second draw” PPP loan, provided they met certain
requirements. The Relief Act also re-opened the application period
for “first draw” PPP loans to businesses that had not been approved
for “first draw” PPP loans prior to August 8, 2020, or who may
have been eligible to receive more funds during the “first draw”
period than they actually received.
c. The PPP allowed qualifying small businesses and
other organizations to receive unsecured SBA-guaranteed loans. PPP
loan proceeds were required to be used by businesses on payroll
costs, mortgage interest, rent, and/or utilities, among other
specified expenses. The PPP allowed the interest and principal to
be forgiven if businesses spent the proceeds on those expenses
4
under certain conditions. Pursuant to the CARES Act, the amount of
PPP funds a business was eligible to receive was determined by the
number of employees employed by the business and their average
payroll costs. Businesses applying for a PPP loan had to provide
documentation to confirm that they had in the past paid employees
the compensation represented in the loan application. The PPP is
overseen by the SBA, which has authority over all PPP loans, but
individual PPP loans were issued by approved commercial lenders,
who would receive and process PPP applications and supporting
documentation. Eligibility for PPP loans was limited to businesses
in existence before on or about February 15, 2020.
d. Borrowers through the PPP were also eligible to
apply for loan forgiveness once all loan proceeds for which
forgiveness was requested had been used.
BOYLE’s Fraudulent EIDL and PPP Applications
8. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about August 4, 2020, BRANDON BOYLE, the
defendant, submitted an EIDL application to the SBA for a sole
proprietorship under the name “HoodEATS” (the “BOYLE EIDL
Application”).
b. The BOYLE EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The BOYLE EIDL Application claimed that HoodEATS
was 100% owned by BOYLE.
d. The BOYLE EIDL Application claimed, among other
things, that HoodEATS was established on May 7, 2019, was in the
business of “Food & Beverage Stores,” had nine employees, earned
$35,000 in gross revenues during the 12-month period ending January
31, 2020, and incurred $15,000 in cost of goods sold during the
12-month period ending January 31, 2020.
e. The BOYLE EIDL Application directed that the loan
payment be sent to a certain account in BOYLE’s name (the “BOYLE
Bank Account”) at a certain financial institution (“Financial
Institution-2”). 1
1 Based on my review of publicly available information, I have
learned that Financial Institution-2 is a credit union for which
only certain categories of individuals are eligible to open
5
f. The BOYLE EIDL Application listed a certain email
address (the “BOYLE Email Address”), which I know, based on my
review of subscriber records for the BOYLE Email Address, was
subscribed to BOYLE and created in 2011. The BOYLE EIDL
Application listed a particular date of birth and social security
number for BOYLE, which, based on my review of law enforcement
databases, I know belongs to BOYLE.
g. The requested loan amount was $10,000.
h. On or about August 10, 2020, the SBA requested a
copy of BOYLE’s “current business” or “business tax returns for
proof of business” and a copy of BOYLE’s driver’s license. The
SBA also requested that BOYLE confirm that he applied for the loan.
BOYLE did not respond.
i. On or about August 21, 2020, the SBA declined the
BOYLE EIDL Application and listed the following reason:
“Unverifiable Information.”
9. Based on my review of records received from Financial
Institution-1, I have learned, among other things, the following:
a. On or about April 8, 2021, BRANDON BOYLE, the
defendant, submitted an application for a PPP loan to Financial
Institution-1, seeking a PPP loan for a sole proprietorship in
BOYLE’s name (the “BOYLE PPP Application”). In connection with
the BOYLE PPP Application, BOYLE uploaded a copy of his driver’s
license.
b. The BOYLE PPP Application contained a certification
“that the information provided in this application and the
information provided in all supporting documents and forms is true
and accurate in all material respects,” and that making false
statements to obtain loans guaranteed by the SBA was a federal
crime.
c. The BOYLE PPP Application claimed that BOYLE was
the 100% owner of a business in his own name that was established
in 2019.
accounts, including but not limited to employees of the City of
New York, and Financial Institution-2 requires proof of
eligibility in order to open an account.
6
d. The BOYLE PPP Application claimed, among other
things, that BOYLE had earned gross income of $98,000 in tax year
2020, and that his sole proprietorship had only one employee. As
an attachment to the BOYLE PPP Application, BOYLE provided a copy
of an IRS Schedule C, Profit or Loss from Business Form listing
BOYLE as the proprietor of a “Food Delivery” business (the “Fake
2020 Schedule C”). The Fake 2020 Schedule C claimed that BOYLE’s
Food Delivery business had $98,000 in income and $18,950 in total
expenses during tax year 2020.
e. The BOYLE PPP Application listed the BOYLE Email
Address and the same date of birth and social security number as
the BOYLE EIDL Application.
f. The BOYLE PPP Application directed that the loan
payment be sent to the BOYLE Bank Account, i.e., the same bank
account provided for the BOYLE EIDL Application.
g. Financial Institution-1 approved the BOYLE PPP
Application, and, on or about April 29, 2021, Financial
Institution-1 issued a payment to the BOYLE Bank Account in the
amount of $20,415.
10. Based on my review of records from Financial
Institution-2, I have learned, among other things, the following:
a. The BOYLE Bank Account regularly received payments
labeled “payroll” from the City of New York.
b. On or about April 29, 2021, the BOYLE Bank Account
received a payment from Financial Institution-1, labeled
“PPPFunding,” in the amount of $20,415. Immediately before
receiving this transfer, the balance in the BOYLE Bank Account was
approximately $327.70.
c. Between on or about April 29, 2021 and on or about
June 30, 2021, BOYLE, using the BOYLE Bank Account, conducted over
100 transactions with FanDuel (an online sports gambling website),
for a total of over $30,000.
d. Statements for the BOYLE Bank Account reflect that,
during 2019, BOYLE received less than $59,000 in total deposits,
and that a majority of the deposits to the BOYLE Bank Account were
“payroll” deposits from the City of New York. Statements for the
BOYLE Bank Account do not reflect tens of thousands of dollars in
2019 earnings from either HoodEATS or the sole proprietorship in
BOYLE’s own name.
7
11. Based on my communications with employees of Financial
Institution-2, I have learned, among other things, that Financial
Institution-2 is headquartered in Manhattan, New York, and that
during the relevant period, when Automated Clearing House (“ACH”)
transfers were sent to accounts at Financial Institution-2,
Financial Institution-2’s process of reviewing batches of those
ACH transfers and disbursing them into the destination accounts
involved the transmission of wire communications between Manhattan
and servers located in New Jersey.
12. Based on my review of tax filings for BRANDON BOYLE, the
defendant, I have learned, among other things, the following:
a. In tax year 2019, BOYLE (i) reported adjusted gross
income of $51,754, (ii) reported gambling winnings of $4,999, and
(iii) filed a Schedule C for a “Consultant” business which incurred
a net loss of $3,044.
b. In tax year 2020, BOYLE reported adjusted gross
income of $55,401. BOYLE did not file a Schedule C, thus
indicating that the Fake 2020 Schedule C filed in support of the
BOYLE PPP Application was fake.
WHEREFORE, deponent respectfully requests that a warrant
issue for the arrest of BRANDON BOYLE, the defendant, and that he
be imprisoned or bailed, as the case may be.
_______________________________
/s/ LaVale Jackson, with permission by SDA
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
29th day of November, 2022
__
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
8
Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
Southern District of New York
- - - - - - - - - - - - - - - - - - X
:
22 MAG
SEALED COMPLAINT
9605
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343 and 2
:
VASHAWN FOREMAN, :
: COUNTY OF OFFENSE:
Defendant. : NEW YORK
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Wire Fraud)
1. From at least in or about June 2020, up to and including
at least in or about April 2021, in the Southern District of New
York and elsewhere, VASHAWN FOREMAN, the defendant, knowingly and
with the intent to defraud, having devised and intending to devise
a scheme and artifice to defraud, and for obtaining money and
property by means of false and fraudulent pretenses,
representations, and promises, transmitted and caused to be
transmitted by means of wire communication in interstate and
foreign commerce, writings, signs, signals, pictures, and sounds
for the purpose of executing such scheme and artifice, to wit,
FOREMAN engaged in a scheme to obtain funds from the United States
Small Business Administration (“SBA”) through the SBA’s Economic
Injury Disaster Loan (“EIDL”) Program and to obtain Government-
guaranteed loan proceeds from the SBA and a financial institution
through the SBA’s Paycheck Protection Program (“PPP”), by
submitting false and fraudulent loan applications.
(Title 18, United States Code, Sections 1343 and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
2. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
3. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”), have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
4. At all times relevant to this Complaint, VASHAWN
FOREMAN, the defendant, was employed by the City of New York.
5. From in or about June 2020 to in or about April 2021,
VASHAWN FOREMAN, the defendant, engaged in a scheme to defraud the
SBA and a certain financial institution (“Financial Institution-
1”) and enrich himself, by applying for an EIDL loan for a sole
proprietorship in FOREMAN’s own name and a PPP loan for a sole
proprietorship called “Quality Mobile Retail,” using applications
that contained materially false representations about his
purported businesses. Based on the fraudulent EIDL application,
the SBA issued an EIDL to FOREMAN in the amount of $104,800. Based
on the fraudulent PPP loan application, Financial Institution-1
issued an SBA-guaranteed PPP loan to FOREMAN in the amount of
$20,832.
2
The SBA’s EIDL Program
6. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. As relevant here, this
assistance includes making direct loans to applicants through the
EIDL program.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act expanded the
SBA’s EIDL program, which provided small businesses with low-
interest loans of up to $2 million prior to in or about May 2020,
and up to $150,000 between in or about May 2020 and in or about
December 2021, in order to provide vital economic support to help
overcome the loss of revenue small businesses experienced due to
COVID-19. These loans were made directly by the SBA.
c. To qualify for an EIDL under the CARES Act, an
applicant had to have suffered “substantial economic injury” from
COVID-19, based on an actual economic injury determined by the
SBA. EIDLs could only be used for certain specified purposes, such
as for payroll and other similar costs, increased costs due to
supply chain interruption, to pay obligations that could not be
met due to revenue loss, and for other similar uses.
d. The CARES Act also permitted applications to
request an advance of up to $10,000 to pay allowable working
capital needs. Advances were expected to be paid by the SBA within
three days of the submission of an EIDL application to the SBA,
provided the application contained a self-certification under
penalty of perjury of the applicant’s eligibility for an EIDL.
e. Individuals were permitted to submit EIDL
applications electronically through the SBA’s website, which
recorded various information about the application and applicant.
Applicants received email notifications at various points in the
application process, including, if applicable, when the SBA
extended an offer and when the SBA approved the loan.
3
The SBA’s PPP
7. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
a. As noted above, the SBA, among other things,
guarantees loans issued by certain lenders, to qualifying small
businesses. Under the SBA loan guarantee programs, the actual loan
is issued by a commercial lender, but the lender receives the full
faith and credit backing of the United States Government on all or
part of the loan. Therefore, if a borrower defaults on an SBA-
guaranteed loan, the commercial lender may seek reimbursement from
the SBA, up to the percentage of the guarantee. By reducing the
risk to commercial lenders, the SBA’s loan guarantee programs
enable lenders to provide loans to qualifying small businesses to
which financing might otherwise be unavailable on reasonable terms
through normal lending channels. When a borrower seeks an SBA-
guaranteed loan, the borrower must meet both the commercial
lender’s eligibility requirements for the loan as well as the SBA’s
eligibility requirements.
b. The CARES Act authorized billions of dollars in
forgivable loans to small businesses for job retention and certain
other business expenses through the PPP. On April 24, 2020, the
Paycheck Protection Program and Health Care Enhancement Act was
signed into law, authorizing additional billions of dollars in PPP
funding. The first round of the PPP closed to new applications on
August 8, 2020. On December 27, 2020, the Consolidated
Appropriations Act of 2021, which included the Economic Aid to
Hard-Hit Small Businesses, Nonprofit, and Venues Act (the “Relief
Act”) was signed into law, providing additional funding for the
PPP. Under the Relief Act, certain businesses that had already
obtained a PPP loan under the original PPP were eligible for an
additional “second draw” PPP loan, provided they met certain
requirements. The Relief Act also re-opened the application period
for “first draw” PPP loans to businesses that had not been approved
for “first draw” PPP loans prior to August 8, 2020, or who may
have been eligible to receive more funds during the “first draw”
period than they actually received.
c. The PPP allowed qualifying small businesses and
other organizations to receive unsecured SBA-guaranteed loans. PPP
loan proceeds were required to be used by businesses on payroll
costs, mortgage interest, rent, and/or utilities, among other
specified expenses. The PPP allowed the interest and principal to
be forgiven if businesses spent the proceeds on those expenses
4
under certain conditions. Pursuant to the CARES Act, the amount of
PPP funds a business was eligible to receive was determined by the
number of employees employed by the business and their average
payroll costs. Businesses applying for a PPP loan had to provide
documentation to confirm that they had in the past paid employees
the compensation represented in the loan application. The PPP is
overseen by the SBA, which has authority over all PPP loans, but
individual PPP loans were issued by approved commercial lenders,
who would receive and process PPP applications and supporting
documentation. Eligibility for PPP loans was limited to businesses
in existence before on or about February 15, 2020.
d. Borrowers through the PPP were also eligible to
apply for loan forgiveness once all loan proceeds for which
forgiveness was requested had been used.
FOREMAN’s Fraudulent EIDL and PPP Applications
8. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about June 30, 2020, VASHAWN FOREMAN, the
defendant, submitted an EIDL application to the SBA for a sole
proprietorship in his own name (the “FOREMAN EIDL Application”).
b. The FOREMAN EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The FOREMAN EIDL Application claimed that the sole
proprietorship was 100% owned by FOREMAN.
d. The FOREMAN EIDL Application claimed, among other
things, that his sole proprietorship was established on June 1,
2000, was in the business of “Retail – Clothing & Apparel,” had 11
employees, earned $311,022 in gross revenues during the 12-month
period ending January 31, 2020, and incurred $101,430 in cost of
goods sold during the 12-month period ending January 31, 2020.
e. The FOREMAN EIDL Application directed that the loan
payment be sent to a certain account in FOREMAN’s name (the
“FOREMAN Bank Account”) at a certain financial institution
(“Financial Institution-2”). 1
1 Based on my review of publicly available information, I have
learned that Financial Institution-2 is a credit union for which
only certain categories of individuals are eligible to open
accounts, including but not limited to employees of the City of
5
f. The FOREMAN EIDL Application listed a certain email
address (the “FOREMAN Email Address”), which I know, based on my
review of subscriber records for the FOREMAN Email Address, was
subscribed to FOREMAN and created in 2015.
g. On or about July 2, 2020, the SBA approved an
advance on the FOREMAN EIDL Application and issued a payment to
the FOREMAN Bank Account in the amount of $10,000.
h. The SBA approved the FOREMAN EIDL Application, and,
on or about July 3, 2020, the SBA issued a payment to the FOREMAN
Bank Account in the amount of $94,800.
9. Based on my review of records received from Financial
Institution-1, I have learned, among other things, the following:
a. On or about March 23, 2021, VASHAWN FOREMAN, the
defendant, submitted an application for a PPP loan to Financial
Institution-1, seeking a PPP loan for a sole proprietorship called
“Quality Mobile Retail” 2 (the “FOREMAN PPP Application”). In
connection with the FOREMAN PPP Application, FOREMAN uploaded a
copy of his driver’s license and listed the FOREMAN Email Address.
b. The FOREMAN PPP Application contained a
certification “that the information provided in this application
and the information provided in all supporting documents and forms
is true and accurate in all material respects,” and that making
false statements to obtain loans guaranteed by the SBA was a
federal crime.
c. The FOREMAN PPP Application claimed that FOREMAN
was the 100% owner of Quality Mobile Retail and that it was
established on January 1, 2020.
d. The FOREMAN PPP Application claimed, among other
things, that Quality Mobile Retail had earned gross income of
$113,260 in tax year 2019 (even though the same application said
that the business started on January 1, 2020) and that Quality
New York, and Financial Institution-2 requires proof of
eligibility in order to open an account.
2 Based on my review of records from the New York State Department
of State, I have learned that, on or about August 29, 2017, VASHAWN
FOREMAN, the defendant, filed Articles of Organization for a
limited liability company called “Quality Mobile Retail” with the
New York State Department of State.
6
Mobile Retail had only one employee. As an attachment to the
FOREMAN PPP Application, FOREMAN provided a copy of an IRS Schedule
C, Profit or Loss from Business Form listing FOREMAN as the
proprietor of a “Mobile Wash Service” business (the “Fake 2019
Schedule C”). The Fake 2019 Schedule C claimed that FOREMAN’s
Mobile Wash Service business had $113,260 in gross income and
$18,116 in total expenses during tax year 2019.
e. The FOREMAN PPP Application directed that the loan
payment be sent to the FOREMAN Bank Account, i.e., the same bank
account provided for the FOREMAN EIDL Application.
f. Financial Institution-1 approved the FOREMAN PPP
Application, and, on or about April 8, 2021, Financial Institution-
1 issued a payment to the FOREMAN Bank Account in the amount of
$20,832.
10. Based on my review of records from Financial
Institution-2, I have learned, among other things, the following:
a. The FOREMAN Bank Account regularly received
payments labeled “payroll” from the City of New York.
b. On or about July 2, 2020, the FOREMAN Bank Account
received a payment from the SBA in the amount of $10,000.
Immediately before receiving this transfer, the balance in the
FOREMAN Bank Account was approximately $2,799.40.
c. On or about July 3, 2020, the FOREMAN Bank Account
received a payment from the SBA in the amount of $94,700. 3
d. On or about April 8, 2021, the FOREMAN Bank Account
received a payment from Financial Institution-1, labeled “PPP
Loan,” in the amount of $20,832.
11. Based on my communications with employees of Financial
Institution-2, I have learned, among other things, that Financial
Institution-2 is headquartered in Manhattan, New York, and that
during the relevant period, when Automated Clearing House (“ACH”)
transfers were sent to accounts at Financial Institution-2,
Financial Institution-2’s process of reviewing batches of those
ACH transfers and disbursing them into the destination accounts
3 Based on my review of information from the SBA’s website about
the EIDL program, I know that for EIDLs greater than $25,000, the
SBA charged a one-time $100 fee in order to file a lien on the
borrower’s business assets.
7
involved the transmission of wire communications between Manhattan
and servers located in New Jersey.
12. Based on my review of tax filings for VASHAWN FOREMAN,
the defendant, I have learned, among other things, the following:
a. In tax year 2019, FOREMAN (i) reported adjusted
gross income of $18,691, and (ii) filed a Schedule C for a “Quality
Mobile Retail Limited Liability Comp.,” which earned zero gross
income and incurred total expenses of $21,200. The Schedule C
that FOREMAN submitted to the IRS for tax year 2019 therefore
differed from the fake Schedule C he submitted with the FOREMAN
PPP Application in that the real Schedule C listed no gross
revenues. FOREMAN did not file the Fake 2019 Schedule C with his
tax filings.
b. In tax year 2020, FOREMAN reported adjusted gross
income of $45,081. FOREMAN filed a Schedule C for a “Mobile
Detail” business, which earned gross income of $11,060 and incurred
total expenses of $5,703.
13. Based on my review of records from the New York State
Department of Labor (“NYS DOL”), I have learned that the NYS DOL
does not have records that VASHAWN FOREMAN, the defendant, had any
employees or paid any wages to employees during 2019 or 2020,
contrary to FOREMAN’s claim in the FOREMAN EIDL Application that
his business employed 11 people.
8
WHEREFORE, deponent respectfully requests that a warrant
issue for the arrest of VASHAWN FOREMAN, the defendant, and that
he be imprisoned or bailed, as the case may be.
_______________________________
/s/ LaVale Jackson, with permission by SDA
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
29th day of November, 2022
__
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
9
Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
Southern District of New York
- - - - - - - - - - - - - - - - - - X 22 MAG 9606
: SEALED COMPLAINT
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343 and 2
:
TREVOR GORDON, :
: COUNTY OF OFFENSE:
Defendant. : NEW YORK
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Wire Fraud)
1. From at least in or about March 2021, up to and including
at least in or about June 2021, in the Southern District of New
York and elsewhere, TREVOR GORDON, the defendant, knowingly and
with the intent to defraud, having devised and intending to devise
a scheme and artifice to defraud, and for obtaining money and
property by means of false and fraudulent pretenses,
representations, and promises, transmitted and caused to be
transmitted by means of wire communication in interstate and
foreign commerce, writings, signs, signals, pictures, and sounds
for the purpose of executing such scheme and artifice, to wit,
GORDON engaged in a scheme to obtain Government-guaranteed loan
proceeds from the United States Small Business Administration
(“SBA”) and two financial institutions through the SBA’s Paycheck
Protection Program (“PPP”), by submitting false and fraudulent
loan applications.
(Title 18, United States Code, Sections 1343 and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
2. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
3. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”) have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
4. At all times relevant to this Complaint prior to in or
about 2020, TREVOR GORDON, the defendant, was employed by the New
York City Department of Corrections (“NYC DOC”). In or about 2020,
TREVOR GORDON, the defendant, retired from his job with the NYC
DOC and began collecting a pension from the City of New York.
5. Between in or about March 2021 and in or about June 2021,
TREVOR GORDON, the defendant, engaged in a scheme to defraud the
SBA and certain financial institutions, and enrich himself, by
applying for two PPP loans on behalf of a sole proprietorship in
his own name, using applications that contained materially false
representations about GORDON’s purported business. Based on those
fraudulent applications, two financial institutions (“Financial
Institution-1” and “Financial Institution-2”) issued SBA-
guaranteed PPP loans to GORDON in the total amount of $41,799.
2
The SBA’s PPP
6. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. Under the SBA loan
guarantee programs, the actual loan is issued by a commercial
lender, but the lender receives the full faith and credit backing
of the United States Government on all or part of the loan.
Therefore, if a borrower defaults on an SBA-guaranteed loan, the
commercial lender may seek reimbursement from the SBA, up to the
percentage of the guarantee. By reducing the risk to commercial
lenders, the SBA’s loan guarantee programs enable lenders to
provide loans to qualifying small businesses to which financing
might otherwise be unavailable on reasonable terms through normal
lending channels. When a borrower seeks an SBA-guaranteed loan,
the borrower must meet both the commercial lender’s eligibility
requirements for the loan as well as the SBA’s eligibility
requirements.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act authorized
billions of dollars in forgivable loans to small businesses for
job retention and certain other business expenses through the PPP.
On April 24, 2020, the Paycheck Protection Program and Health Care
Enhancement Act was signed into law, authorizing additional
billions of dollars in PPP funding. The first round of the PPP
closed to new applications on August 8, 2020. On December 27, 2020,
the Consolidated Appropriations Act of 2021, which included the
Economic Aid to Hard-Hit Small Businesses, Nonprofit, and Venues
Act (the “Relief Act”) was signed into law, providing additional
funding for the PPP. Under the Relief Act, certain businesses that
had already obtained a PPP loan under the original PPP were
eligible for an additional “second draw” PPP loan, provided they
met certain requirements. The Relief Act also re-opened the
application period for “first draw” PPP loans to businesses that
had not been approved for “first draw” PPP loans prior to August
8, 2020, or who may have been eligible to receive more funds during
the “first draw” period than they actually received.
3
c. The PPP allowed qualifying small businesses and
other organizations to receive unsecured SBA-guaranteed loans. PPP
loan proceeds were required to be used by businesses on payroll
costs, mortgage interest, rent, and/or utilities, among other
specified expenses. The PPP allowed the interest and principal to
be forgiven if businesses spent the proceeds on those expenses
under certain conditions. Pursuant to the CARES Act, the amount of
PPP funds a business was eligible to receive was determined by the
number of employees employed by the business and their average
payroll costs. Businesses applying for a PPP loan had to provide
documentation to confirm that they had in the past paid employees
the compensation represented in the loan application. The PPP is
overseen by the SBA, which has authority over all PPP loans, but
individual PPP loans were issued by approved commercial lenders,
who would receive and process PPP applications and supporting
documentation. Eligibility for PPP loans was limited to businesses
in existence before on or about February 15, 2020.
d. Borrowers through the PPP were also eligible to
apply for loan forgiveness once all loan proceeds for which
forgiveness was requested had been used.
GORDON’s Fraudulent PPP Applications
7. Based on my review of records received from Financial
Institution-1, I have learned, among other things, the following:
a. On or about March 2, 2021, TREVOR GORDON, the
defendant, submitted an application for a “first draw” PPP loan to
Financial Institution-1, seeking a PPP loan for a sole
proprietorship in GORDON’s name (“GORDON PPP Application-1”).
b. In connection with GORDON PPP Application-1,
GORDON certified, among other things, “that the information
provided in this application and . . . in all supporting documents
and forms is true and accurate in all material respects. I
understand that knowingly making a false statement to obtain a
guaranteed loan from the SBA is punishable under the law . . . .”
c. GORDON PPP Application-1 claimed that GORDON was
the 100% owner of a business in his own name that was started in
December 2018.
d. As an attachment to GORDON PPP Application-1,
GORDON provided a copy of a 2019 Internal Revenue Service (“IRS”)
Schedule C, Profit or Loss from Business Form, listing GORDON as
the proprietor of a “BARBER” business (the “Fake 2019 Schedule
4
C”). The Fake 2019 Schedule C claimed that GORDON’s BARBER business
had $118,832 in gross receipts and gross income, and $18,188 in
total expenses, during tax year 2019.
e. GORDON PPP Application-1 directed that the loan
payment be sent to a certain account in GORDON’S name (the “GORDON
Bank Account”) at a certain financial institution (“Financial
Institution-3”). 1
f. On or about March 11, 2021, Financial Institution-
1 approved GORDON PPP Application-1 and issued a payment to the
GORDON Bank Account in the amount of $20,967.
8. Based on my review of records received from Financial
Institution-2, I have learned, among other things, the following:
a. On or about May 21, 2021, TREVOR GORDON, the
defendant, submitted an application for a “second draw” PPP loan
to Financial Institution-2, seeking a PPP loan for a sole
proprietorship in GORDON’s name (“GORDON PPP Application-2”).
b. In connection with GORDON PPP Application-2,
GORDON certified, among other things, “that the information
provided in this application and . . . in all supporting documents
and forms is true and accurate in all material respects. I
understand that knowingly making a false statement to obtain a
guaranteed loan from the SBA is punishable under the law . . . .”
c. GORDON PPP Application-2 claimed that GORDON was
the 100% owner of a business in his own name that was started in
December 2018.
d. GORDON PPP Application-2 claimed that GORDON’s sole
proprietorship had gross income of $99,996 and gross receipts of
$118,332, in tax year 2019. GORDON attached a copy of the Fake
2019 Schedule C to GORDON PPP Application-2; as noted above, the
Fake 2019 Schedule C claimed that GORDON’s BARBER business had
$118,832 in gross receipts and gross income, and $18,188 in total
expenses, during tax year 2019.
1 Based on my review of publicly available information, I have
learned that Financial Institution-3 is a credit union for which
only certain categories of individuals are eligible to open
accounts, including but not limited to employees of the City of
New York, and Financial Institution-3 requires proof of
eligibility in order to open an account.
5
e. GORDON PPP Application-2 directed that the loan
payment be sent to the GORDON Bank Account at Financial
Institution-3.
f. Financial Institution-2 approved GORDON PPP
Application-2, and on or about June 8, 2021, Financial Institution-
2 issued a payment to the GORDON Bank Account in the amount of
$20,832.
9. Based on my review of records from Financial
Institution-3, I have learned, among other things, the following:
a. The GORDON Bank Account regularly received payments
labeled “payroll” from the City of New York up until in or about
2020, and in or about 2020, the GORDON Bank Account began regularly
receiving payments from the New York City Employee Retirement
System.
b. On or about March 12, 2021, the GORDON Bank Account
received an Automated Clearing House (“ACH”) transfer from
Financial Institution-1, labeled “SBA Loan,” in the amount of
$20,967. Immediately before receiving this transfer, the balance
in the GORDON Bank Account was $0.76. During the remainder of March
2021, approximately $17,000 in cash was withdrawn from the GORDON
Bank Account, and approximately $2,500 from the GORDON Bank Account
was spent at a casino.
c. On or about June 11, 2021, the GORDON Bank Account
received an ACH transfer from Financial Institution-2, in the
amount of $20,832. Immediately before receiving this transfer, the
balance in the GORDON Bank Account was $322.00. During the
remainder of June 2021, approximately $13,500 in cash was withdrawn
from the GORDON Bank Account, and approximately $2,000 from the
GORDON Bank Account was spent at a casino. Most of the remainder
of the loan proceeds were withdrawn in cash in July 2021, during
which, at one point, the balance in the GORDON Bank Account was
down to $143.19.
d. Statements for the GORDON Bank Account reflect that
during 2019, a majority of the deposits to the GORDON Bank Account
were “payroll” deposits from the City of New York. Statements for
the GORDON Bank Account do not reflect tens of thousands of dollars
in 2019 earnings from GORDON’s purported sole proprietorship.
10. Based on my communications with employees of Financial
Institution-3, I have learned, among other things, that Financial
Institution-3 is headquartered in Manhattan, New York, and that
during the relevant period, when ACH transfers were sent to
6
accounts at Financial Institution-3, Financial Institution-3’s
process of reviewing batches of those ACH transfers and disbursing
them into the destination accounts involved the transmission of
wire communications between Manhattan and servers located in New
Jersey.
11. Based on my review of tax filings for TREVOR GORDON, the
defendant, I know, among other things, that the Fake 2019 Schedule
C was not actually submitted to the IRS with GORDON’s tax return,
and that GORDON did not report any income — let alone $118,832 in
income — from work as a barber. I also know that for tax year 2020
– unlike tax year 2019 – GORDON did submit an actual IRS Schedule
C for work as a barber, in which he claimed $2,443 in gross receipts
and gross income, and $16,775 in total expenses, resulting in a
$14,332 loss that reduced GORDON’s taxable income in that year.
WHEREFORE, deponent respectfully requests that a warrant
issue for the arrest of TREVOR GORDON, the defendant, and that he
be imprisoned or bailed, as the case may be.
_______________________________
/s/ LaVale Jackson, with permission by SDA
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
___day of November 2022.
29th
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
7
Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
Southern District of New York
- - - - - - - - - - - - - - - - - - X
:
22 MAG 9607
SEALED COMPLAINT
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343 and 2
:
DIONE HALL, :
: COUNTY OF OFFENSE:
Defendant. : NEW YORK
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Wire Fraud)
1. In or about July 2020, in the Southern District of New
York and elsewhere, DIONE HALL, the defendant, knowingly and with
the intent to defraud, having devised and intending to devise a
scheme and artifice to defraud, and for obtaining money and
property by means of false and fraudulent pretenses,
representations, and promises, transmitted and caused to be
transmitted by means of wire communication in interstate and
foreign commerce, writings, signs, signals, pictures, and sounds
for the purpose of executing such scheme and artifice, to wit,
HALL engaged in a scheme to obtain funds from the United States
Small Business Administration (“SBA”) through the SBA’s Economic
Injury Disaster Loan (“EIDL”) Program, by submitting a false and
fraudulent loan application.
(Title 18, United States Code, Sections 1343 and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
2. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
3. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”), have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
4. At all times relevant to this Complaint, DIONE HALL, the
defendant, was either employed by the New York City Police
Department (“NYPD”) or was collecting unemployment insurance
during the COVID-19 pandemic.
5. In or about July 2020, DIONE HALL, the defendant, engaged
in a scheme to defraud the SBA and enrich herself, by applying for
an EIDL on behalf of a sole proprietorship in the name “Thift’d
[sic] N Gift’d” that was purportedly in the
“Antiques/Collectibles” business. HALL’s EIDL application
contained materially false representations about her purported
sole proprietorship. Based on that fraudulent application, the SBA
issued an EIDL to HALL in the amount of $136,500.
The SBA’s EIDL Program
6. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
2
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. As relevant here, this
assistance includes making direct loans to applicants through the
EIDL program.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act expanded the
SBA’s EIDL program, which provided small businesses with low-
interest loans of up to $2 million prior to in or about May 2020,
and up to $150,000 between in or about May 2020 and in or about
December 2021, in order to provide vital economic support to help
overcome the loss of revenue small businesses experienced due to
COVID-19. These loans were made directly by the SBA.
c. To qualify for an EIDL under the CARES Act, an
applicant had to have suffered “substantial economic injury” from
COVID-19, based on an actual economic injury determined by the
SBA. EIDLs could only be used for certain specified purposes, such
as for payroll and other similar costs, increased costs due to
supply chain interruption, to pay obligations that could not be
met due to revenue loss, and for other similar uses.
d. The CARES Act also permitted applications to
request an advance of up to $10,000 to pay allowable working
capital needs. Advances were expected to be paid by the SBA within
three days of the submission of an EIDL application to the SBA,
provided the application contained a self-certification under
penalty of perjury of the applicant’s eligibility for an EIDL.
e. Individuals were permitted to submit EIDL
applications electronically through the SBA’s website, which
recorded various information about the application and applicant.
Applicants received email notifications at various points in the
application process, including, if applicable, when the SBA
extended an offer and when the SBA approved the loan.
HALL’s Fraudulent EIDL Application
7. Based on my review of records received from the SBA, I
have learned, among other things, the following:
3
a. On or about July 7, 2020, an EIDL application was
submitted to the SBA, seeking an EIDL for a sole proprietorship
under the name “Thift’d N Gift’d” (the “HALL EIDL Application”).
b. The HALL EIDL Application contained a certification
under penalty of perjury that its contents were “true and correct.”
c. The HALL EIDL Application claimed that the “Thift’d
N Gift’d” sole proprietorship was 100% owned by DIONE HALL, the
defendant.
d. The HALL EIDL Application claimed, among other
things, that the “Thift’d N Gift’d” sole proprietorship was
established on January 1, 2020, operated in Queens, New York, was
an “Antiques/Collectibles” business, had one employee, earned
$300,000.00 in gross revenues during the 12-month period ending
January 31, 2020, and incurred $25,000.00 in cost of goods sold
during the 12-month period ending January 31, 2020.
e. The HALL EIDL Application directed that the loan
payment be sent to a certain account in HALL’s name (the “HALL
Checking Account”) at a certain financial institution (“Financial
Institution-1”). 1
f. On or about July 21, 2020, the SBA approved the
HALL EIDL Application and a loan in the amount of $136,500.
8. Based on my review of records from Financial
Institution-1, I have learned, among other things, the following:
a. In or about May 2015, DIONE HALL, the defendant,
opened the HALL Checking Account and a connected savings account
(the “HALL Savings Account,” and collectively the “HALL Financial
Institution-1 Accounts”).
b. The HALL Checking Account regularly received
payments labeled “payroll” from the City of New York.
1 Based on my review of publicly available information, I have
learned that Financial Institution-1 is a credit union for which
only certain categories of individuals are eligible to open
accounts, including but not limited to employees of the City of
New York, and Financial Institution-1 requires proof of
eligibility in order to open an account.
4
c. On or about July 23, 2020, the HALL Checking Account
received an Automated Clearing House (“ACH”) transfer from the SBA
in the amount of $136,400.00. 2
d. On or about July 23, 2020, $136,000 was transferred
from the HALL Checking Account to the HALL Savings Account, which
Financial Institution-1’s records indicate was a “Mobile
Transfer.” On or about October 7, 2020, $107,000 in EIDL proceeds
were transferred back from the HALL Savings Account to the HALL
Checking Account, which Financial Institution-1’s records indicate
was a “Mobile Transfer.” On or about October 8, 2020, $7,400 in
cash was withdrawn from the HALL Checking Account, and $100,000
was withdrawn from the account with the notation “Check Cleared.”
Financial Institution-1’s records contain a receipt indicating
that HALL showed her driver’s license when conducting the cash
withdrawal on or about October 8, 2020. Financial Institution-1’s
records also contain an image of the $100,000 check that cleared
on or about October 8, 2020, and it was dated October 7, 2020,
written to “Thrift It N Gift It Inc.” and signed by HALL.
e. Statements for the HALL Financial Institution-1
Accounts reflect that HALL’s principal source of earnings during
the 12-month period ending January 31, 2020 was her job with the
NYPD. Statements for the HALL Financial Institution-1 Accounts do
not reflect any other significant deposits during the 12-month
period ending January 31, 2020, and are therefore not consistent
with the operation of a sole proprietorship that purportedly earned
approximately $300,000 in revenue during that period.
9. Based on my communications with employees of Financial
Institution-1, I have learned, among other things, that Financial
Institution-1 is headquartered in Manhattan, New York, and that
during the relevant period, when ACH transfers were sent to
accounts at Financial Institution-1, Financial Institution-1’s
process of reviewing batches of those ACH transfers and disbursing
them into the destination accounts involved the transmission of
wire communications between Manhattan and servers located in New
Jersey.
10. Based on my review of tax filings for DIONE HALL, the
defendant, I know, among other things, that the only income she
reported to the Internal Revenue Service (“IRS”) for tax year 2019
was her salary from the NYPD, that the only income she reported to
2 Based on my review of information from the SBA’s website about
the EIDL program, I know that for EIDLs greater than $25,000, the
SBA charged a one-time $100 fee in order to file a lien on the
borrower’s business assets.
5
the IRS for tax year 2020 was her salary from the NYPD and
unemployment compensation, and that in both tax years, HALL did
not report any income from, or file a Schedule C, Profit or Loss
from Business Form, for any sole proprietorship in the name
“Thift’d N Gift’d.”
11. Based on my training and experience and my review of
information published by the New York City and New York State
governments, I know that under the New York General Business Law,
a sole proprietorship operating in a name other than the name of
the sole proprietor him or herself must file a Certificate of
Assumed Name with the County Clerk in the county where the sole
proprietorship is based. Based on my review of records from the
Queens County Clerk, I know that no Certificate of Assumed Name
was filed in Queens County for “Thift’d N Gift’d” between in or
about 1993 and in or about April 2022.
12. Based on my review of records from the New York
Department of State, I have learned that an entity called “Thrift
It N Gift It Inc.” was incorporated in or about September 2020.
13. Based on my review of records from a certain financial
institution (“Financial Institution-2”), I have learned, among
other things, that on or about October 7, 2020, DIONE HALL, the
defendant, opened an account in the name of Thrift It N Gift It
Inc. at Financial Institution-2, and deposited a check from the
HALL Checking Account in the amount of $100,000 into that account.
The money remained in the account untouched for more than a year,
and then HALL began spending it at camera supply stores, ultimately
spending a total of more than $30,000 at such stores between in or
about November 2021 and in or about January 2022.
6
WHEREFORE, deponent respectfully requests that a warrant
issue for the arrest of DIONE HALL, the defendant, and that she be
imprisoned or bailed, as the case may be.
_______________________________
/s/ LaVale Jackson, with permission by SDA
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
29th
___day of November 2022.
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
7
Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
22 MAG 9608
Southern District of New York
- - - - - - - - - - - - - - - - - - X
: SEALED COMPLAINT
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343 and 2
:
TONI MCCULLOUGH, :
a/k/a “Toni Singleton,” :
: COUNTY OF OFFENSE:
Defendant. : NEW YORK
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Wire Fraud)
1. From at least in or about April 2020, up to and including
at least in or about May 2021, in the Southern District of New
York and elsewhere, TONI MCCULLOUGH, a/k/a “Toni Singleton,” the
defendant, knowingly and with the intent to defraud, having devised
and intending to devise a scheme and artifice to defraud, and for
obtaining money and property by means of false and fraudulent
pretenses, representations, and promises, transmitted and caused
to be transmitted by means of wire communication in interstate and
foreign commerce, writings, signs, signals, pictures, and sounds
for the purpose of executing such scheme and artifice, to wit,
MCCULLOUGH engaged in a scheme to obtain funds from the United
States Small Business Administration (“SBA”) through the SBA’s
Economic Injury Disaster Loan (“EIDL”) Program, and from multiple
financial institutions through the SBA’s Paycheck Protection
Program (“PPP”), by submitting false and fraudulent loan
applications.
(Title 18, United States Code, Sections 1343 and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
2. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
3. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”), have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
4. At all times relevant to this Complaint, TONI
MCCULLOUGH, a/k/a “Toni Singleton,” the defendant, was employed by
the New York City Department of Education (“NYC DOE”).
5. From at least in or about April 2020 to at least in or
about May 2021, TONI MCCULLOUGH, a/k/a “Toni Singleton,” the
defendant, engaged in a scheme to defraud the SBA and multiple
financial institutions, and to enrich herself, by submitting
fraudulent EIDL and PPP applications on behalf of two entities,
AM-PM LLC (“AM-PM”) and U&I Holdings LLC (“U&I”). MCCULLOUGH’s
applications on behalf of these entities contained materially
false representations about their respective purported businesses.
MCCULLOUGH submitted more than ten separate EIDL applications to
the SBA, and submitted more than five separate PPP applications to
multiple financial institutions. Based on those fraudulent
2
applications, MCCULLOUGH obtained more than $400,000 in loans
from, or guaranteed by, the SBA.
6. Based on my review of records from the New York
Department of State (“NYDOS”), I have learned, among other things,
that:
a. On or about March 8, 2019, Articles of Organization
were filed with the NYDOS for U&I, located in Brooklyn, New York.
b. On or about September 7, 2015, Articles of
Organization were filed with the NYDOS for AM-PM, located in
Brooklyn, New York. 1
7. Based on my review of EIDL and PPP applications and bank
and tax records discussed in greater detail below, I know that
TONI MCCULLOUGH, a/k/a “Toni Singleton,” the defendant, sometimes
uses the middle name “Nicole” or the middle initial “N,” and
alternates between using her maiden name, “Singleton,” and her
married name, “McCullough.” For instance, MCCULLOUGH files tax
returns with the Internal Revenue Service (“IRS”) using the last
name “McCullough,” but has a New York State identification using
the last name “Singleton.” Despite the variation in the use of
middle and last names, MCCULLOUGH consistently uses the same social
security number and date of birth in records discussed in this
Complaint. For ease of reference, the applications and records
discussed in this complaint are referred to as having been in the
name of TONI MCCULLOUGH, a/k/a “Toni Singleton,” the defendant,
regardless of which variant of her name she used.
The SBA’s EIDL Program
8. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. As relevant here, this
1 Based on my review of records from the New York State Department
of Taxation and Finance, I know that AM-PM has been issued
Certificates of Authority to collect sales and use taxes in New
York State, and that the certificates were addressed to MCCULLOUGH.
3
assistance includes making direct loans to applicants through the
EIDL program.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act expanded the
SBA’s EIDL program, which provided small businesses with low-
interest loans of up to $2 million prior to in or about May 2020,
and up to $150,000 between in or about May 2020 and in or about
December 2021, in order to provide vital economic support to help
overcome the loss of revenue small businesses experienced due to
COVID-19. These loans were made directly by the SBA.
c. To qualify for an EIDL under the CARES Act, an
applicant had to have suffered “substantial economic injury” from
COVID-19, based on an actual economic injury determined by the
SBA. EIDLs could only be used for certain specified purposes, such
as for payroll and other similar costs, increased costs due to
supply chain interruption, to pay obligations that could not be
met due to revenue loss, and for other similar uses.
d. The CARES Act also permitted applications to
request an advance of up to $10,000 to pay allowable working
capital needs. Advances were expected to be paid by the SBA within
three days of the submission of an EIDL application to the SBA,
provided the application contained a self-certification under
penalty of perjury of the applicant’s eligibility for an EIDL.
e. Individuals were permitted to submit EIDL
applications electronically through the SBA’s website, which
recorded various information about the application and applicant.
Applicants received email notifications at various points in the
application process, including, if applicable, when the SBA
extended an offer and when the SBA approved the loan.
The SBA’s PPP
9. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
a. As noted above, the SBA, among other things,
guarantees loans issued by certain lenders, to qualifying small
businesses. Under the SBA loan guarantee programs, the actual loan
is issued by a commercial lender, but the lender receives the full
4
faith and credit backing of the United States Government on all or
part of the loan. Therefore, if a borrower defaults on an SBA-
guaranteed loan, the commercial lender may seek reimbursement from
the SBA, up to the percentage of the guarantee. By reducing the
risk to commercial lenders, the SBA’s loan guarantee programs
enable lenders to provide loans to qualifying small businesses to
which financing might otherwise be unavailable on reasonable terms
through normal lending channels. When a borrower seeks an SBA-
guaranteed loan, the borrower must meet both the commercial
lender’s eligibility requirements for the loan as well as the SBA’s
eligibility requirements.
b. The CARES Act authorized billions of dollars in
forgivable loans to small businesses for job retention and certain
other business expenses through the PPP. On April 24, 2020, the
Paycheck Protection Program and Health Care Enhancement Act was
signed into law, authorizing additional billions of dollars in PPP
funding. The first round of the PPP closed to new applications on
August 8, 2020. On December 27, 2020, the Consolidated
Appropriations Act of 2021, which included the Economic Aid to
Hard-Hit Small Businesses, Nonprofit, and Venues Act (the “Relief
Act”) was signed into law, providing additional funding for the
PPP. Under the Relief Act, certain businesses that had already
obtained a PPP loan under the original PPP were eligible for an
additional “second draw” PPP loan, provided they met certain
requirements. The Relief Act also re-opened the application period
for “first draw” PPP loans to businesses that had not been approved
for “first draw” PPP loans prior to August 8, 2020, or who may
have been eligible to receive more funds during the “first draw”
period than they actually received.
c. The PPP allowed qualifying small businesses and
other organizations to receive unsecured SBA-guaranteed loans. PPP
loan proceeds were required to be used by businesses on payroll
costs, mortgage interest, rent, and/or utilities, among other
specified expenses. The PPP allowed the interest and principal to
be forgiven if businesses spent the proceeds on those expenses
under certain conditions. Pursuant to the CARES Act, the amount of
PPP funds a business was eligible to receive was determined by the
number of employees employed by the business and their average
payroll costs. Businesses applying for a PPP loan had to provide
documentation to confirm that they had in the past paid employees
the compensation represented in the loan application. The PPP is
overseen by the SBA, which has authority over all PPP loans, but
individual PPP loans were issued by approved commercial lenders,
who would receive and process PPP applications and supporting
5
documentation. Eligibility for PPP loans was limited to businesses
in existence before on or about February 15, 2020.
d. Borrowers through the PPP were also eligible to
apply for loan forgiveness once all loan proceeds for which
forgiveness was requested had been used.
The Fraudulent U&I Loan Applications
10. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about May 21, 2020, TONI MCCULLOUGH, a/k/a
“Toni Singleton,” the defendant, submitted an EIDL application to
the SBA on behalf of U&I (the “U&I EIDL Application”).
b. The U&I EIDL Application contained a certification
under penalty of perjury that its contents were “true and correct.”
c. The U&I EIDL Application claimed that U&I was 100%
owned by MCCULLOUGH.
d. The U&I EIDL Application claimed, among other
things, that U&I was in the “Entertainment Services” business,
that it had five employees as of January 31, 2020, and that it
earned $537,600.00 in gross revenues during the 12-month period
ending January 31, 2020, with $0 in cost of goods sold during that
same period.
e. The U&I EIDL Application directed that the loan
payment be sent to a certain account (the “Husband Bank Account”),
in the name of a person other than MCCULLOUGH (the “Husband”), at
a certain financial institution (“Financial Institution-1”). 2
Based on my review of records from Financial Institution-1 relating
to the Husband Bank Account, I know that MCCULLOUGH was identified
as the “spouse” of the account holder.
f. On or about June 17, 2020, the SBA approved the U&I
EIDL Application, for a loan in the amount of $150,000.
2 Based on my review of publicly available information, I have
learned that Financial Institution-1 is a credit union for which
only certain categories of individuals are eligible to open
accounts, including but not limited to employees of the City of
New York, and Financial Institution-1 requires proof of
eligibility in order to open an account.
6
11. Based on my review of records from Financial
Institution-1, I have learned, among other things, the following:
a. On or about June 19, 2020, the Husband Bank Account
received an Automated Clearing House (“ACH”) transfer from the SBA
in the amount of $149,900.00. 3 Immediately before receiving this
transfer, the balance in the Husband Bank Account was $224.85.
b. Between in or about July 2020 and in or about
October 2020, those loan proceeds were removed from the Husband
Bank Account, principally via check and cash withdrawal.
12. Based on my communications with employees of Financial
Institution-1, I have learned, among other things, that Financial
Institution-1 is headquartered in Manhattan, New York, and that
during the relevant period, when ACH transfers were sent to
accounts at Financial Institution-1, Financial Institution-1’s
process of reviewing batches of those ACH transfers and disbursing
them into the destination accounts involved the transmission of
wire communications between Manhattan and servers located in New
Jersey.
13. Based on my review of records from a certain financial
institution (“Financial Institution-2”), I have learned, among
other things, the following:
a. On or about June 2, 2020, TONI MCCULLOUGH, a/k/a
“Toni Singleton,” the defendant, submitted a PPP application to
Financial Institution-2 on behalf of U&I (the “U&I PPP
Application”).
b. The U&I PPP Application contained a certification
that “the information provided in this application and the
information provided in all supporting documents and forms is true
and accurate in all material respects. I understand that knowingly
making a false statement to obtain a guaranteed loan from the SBA
is punishable under the law . . . .”
c. The U&I PPP Application claimed that U&I was 100%
owned by MCCULLOUGH.
d. The U&I PPP Application claimed, among other
things, that U&I was in the “Arts, Entertainment, and Recreation”
3 Based on my review of information from the SBA’s website about
the EIDL program, I know that for EIDLs greater than $25,000, the
SBA charged a one-time $100 fee in order to file a lien on the
borrower’s business assets.
7
business, that it had ten employees, and that it had average
monthly payroll expenses of $57,600.
e. MCCULLOUGH submitted to Financial Institution-2 a
copy of a 2019 IRS Schedule C, Profit or Loss from Business Form,
listing MCCULLOUGH as the proprietor of U&I (the “Fake U&I Schedule
C”). The Fake U&I Schedule C claimed that U&I had $691,200 in gross
receipts and gross income, $324,278 in total expenses, and $366,922
in tentative profit, for tax year 2019.
f. The U&I PPP Application directed that the loan
payment be sent to a certain account in U&I’s name (the “U&I Bank
Account”) at a certain financial institution (“Financial
Institution-3”).
g. On or about June 4, 2020, Financial Institution-2
approved the U&I PPP Application and issued a payment in the amount
of $76,442 to the U&I Bank Account.
14. Based on my review of records from Financial
Institution-3, I have learned, among other things, the following:
a. TONI MCCULLOUGH, a/k/a “Toni Singleton,” the
defendant, opened the U&I Bank Account as “Account Owner” on or
about May 21, 2020.
b. On or about June 4, 2020, the U&I Bank Account
received a wire transfer in the amount of $76,442. Immediately
before receiving this transfer, the balance in the U&I Bank Account
was $50.00.
c. In or about June and July 2020, the loan proceeds
received based on the U&I PPP Application were spent as follows,
among other ways: (i) $10,000 was wired from the U&I Bank Account
to an account in the name of the Husband; (ii) $11,000 was
withdrawn in cash; and (iii) $50,000 was transferred to bank
accounts in the name of AM-PM.
15. Based on my review of tax filings for TONI MCCULLOUGH,
a/k/a “Toni Singleton,” the defendant, I know, among other things,
that the principal source of income she reported to the IRS for
tax year 2019 was her salary from the NYC DOE, and that MCCULLOUGH
did not report any income from, or file a Schedule C for, U&I. The
Fake U&I Schedule C that was submitted in connection with the U&I
PPP Application was not attached to MCCULLOUGH’s actual 2019 tax
return.
8
16. Based on my review of records from the New York State
Department of Labor (“NYS DOL”), I have learned that the NYS DOL
does not have records that U&I had any employees or paid any wages
to employees during 2019 or 2020, contrary to MCCULLOUGH’s claims
in the U&I EIDL Application and the U&I PPP Application that U&I
had five and ten employees, respectively.
The Fraudulent AM-PM Loan Applications
17. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about June 17, 2020, TONI MCCULLOUGH, a/k/a
“Toni Singleton,” the defendant, submitted an EIDL application to
the SBA on behalf of AM-PM (the “AM-PM EIDL Application”).
b. The AM-PM EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The AM-PM EIDL Application claimed that AM-PM was
100% owned by MCCULLOUGH.
d. The AM-PM EIDL Application claimed, among other
things, that AM-PM was in the “Food & Beverage Stores,” “Food –
Convenience & Variety” business, that it had nine employees as of
January 31, 2020, that it earned $517,440.00 in gross revenues
during the 12-month period ending January 31, 2020, and that it
had $40,000 in cost of goods sold during that same period.
e. The AM-PM EIDL Application directed that the loan
payment be sent to a certain account (the “AM-PM Bank Account”) in
the name of AM-PM, at Financial Institution-3.
f. On or about June 17, 2020, the SBA approved an
advance in connection with the AM-PM EIDL Application, and issued
a payment to the AM-PM Bank Account in the amount of $9,000.
g. On or about June 20, 2020, the SBA approved the AM-
PM EIDL Application, for a loan in the amount of $150,000.
18. Based on my review of records from Financial
Institution-3 relating to the proceeds from the AM-PM EIDL
Application, I have learned, among other things, the following:
9
a. TONI MCCULLOUGH, a/k/a “Toni Singleton,” the
defendant, opened the AM-PM Bank Account as “Sole Member” on or
about December 26, 2019.
b. On or about June 22, 2020, the AM-PM Bank Account
received a payment from the SBA in the amount of $9,000.
c. On or about June 23, 2020, the AM-PM Bank Account
received a payment from the SBA in the amount of $149,900.
d. Statements for the AM-PM Bank Account indicate that
the SBA EIDL proceeds were spent on, among other things, numerous
purchases at a certain electronics store and a certain online
furniture store, and significant transfers to bank accounts or
mobile payment application accounts in the names of MCCULLOUGH and
the Husband.
19. Based on my review of records from Financial
Institution-3 relating to PPP applications submitted on behalf of
AM-PM, I have learned, among other things, the following:
a. On or about April 28, 2020, TONI MCCULLOUGH, a/k/a
“Toni Singleton,” the defendant, submitted a “first draw” PPP
application to Financial Institution-3 on behalf of AM-PM (“AM-PM
PPP Application-1”).
b. AM-PM PPP Application-1 contained a certification
that “the information provided in this application and the
information provided in all supporting documents and forms is true
and accurate in all material respects. I understand that knowingly
making a false statement to obtain a guaranteed loan from the SBA
is punishable under the law . . . .”
c. AM-PM PPP Application-1 claimed that AM-PM was 100%
owned by MCCULLOUGH.
d. AM-PM PPP Application-1 claimed, among other
things, that AM-PM had two employees and that it had average
monthly payroll expenses of $5,040.
e. MCCULLOUGH submitted to Financial Institution-3 a
copy of a 2019 IRS Schedule C listing MCCULLOUGH as the proprietor
of AM-PM (the “Fake AM-PM Schedule C”). The Fake AM-PM Schedule C
claimed that AM-PM had $517,440 in gross receipts and gross income,
$143,190 in total expenses, and $374,250 in tentative profit, for
tax year 2019.
10
f. On or about May 19, 2020, Financial Institution-3
approved AM-PM PPP Application-1, and issued a loan to AM-PM in
the amount of $13,062.
g. On or about February 2, 2021, TONI MCCULLOUGH,
a/k/a “Toni Singleton,” the defendant, submitted a “second draw”
PPP application to Financial Institution-3 on behalf of AM-PM (“AM-
PM PPP Application-2”).
h. AM-PM PPP Application-2 contained a certification
that “the information provided in this application and the
information provided in all supporting documents and forms is true
and accurate in all material respects. I understand that knowingly
making a false statement to obtain a guaranteed loan from the SBA
is punishable under the law . . . .”
i. AM-PM PPP Application-2 claimed that AM-PM was 100%
owned by “TONI NICOLE SINGLETON,” and provided the social security
number and date of birth for TONI MCCULLOUGH, a/k/a “Toni
Singleton,” the defendant.
j. AM-PM PPP Application-2 made reference to the SBA
Loan Number associated with AM-PM PPP Application-1.
k. AM-PM PPP Application-2 claimed, among other
things, that AM-PM had eight employees, and that it had average
monthly payroll expenses of $5,225, that it had annual business
revenue of $100,000, and that it had annual business profit before
tax of $67,000. AM-PM PPP Application-2 did not identify the year
for which these figures were reported.
l. Financial Institution-3 approved AM-PM PPP
Application-2, and on or about February 4, 2021, issued a loan to
AM-PM in the amount of $18,287.
20. Based on my review of tax filings for TONI MCCULLOUGH,
a/k/a “Toni Singleton,” the defendant, I know, among other things,
that in tax years 2019, 2020, and 2021, MCCULOUGH filed Schedule
C forms for AM-PM with the IRS. In none of those years did
MCCULLOUGH file a tax form similar to the Fake AM-PM Schedule C.
Instead, MCCULLOUGH’s filed Schedule Cs for AM-PM reported the
following:
a. For tax year 2019, MCCULLOUGH’s Schedule C reported
that AM-PM had gross receipts of $751 and total expenses of $1,211,
for a tentative loss of $460.
11
b. For tax year 2020, MCCULLOUGH’s Schedule C reported
that AM-PM had gross receipts of $317 and total expenses of
$23,667, for a tentative loss of $23,350.
c. For tax year 2021, MCCULOUGH’s Schedule C reported
that AM-PM had gross receipts of $537 and total expenses of $5,935,
for a tentative loss of $5,398.
21. Based on my review of records from the NYS DOL, I have
learned that the NYS DOL does not have records that AM-PM had any
employees or paid any wages to employees during 2019 or 2020,
contrary to MCCULLOUGH’s claims in the AM-PM EIDL Application, AM-
PM PPP Application-1, and AM-PM PPP Application-2, that AM-PM had
nine, two, and eight employees, respectively.
WHEREFORE, deponent respectfully requests that a warrant
issue for the arrest of TONI MCCULLOUGH, a/k/a “Toni Singleton,”
the defendant, and that she be imprisoned or bailed, as the case
may be.
_______________________________
/s/ LaVale Jackson, with permission by SDA
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
29th
___day of November 2022.
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
12
Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
Southern District of New York
- - - - - - - - - - - - - - - - - - X 22 MAG 9609
: SEALED COMPLAINT
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343 and 2
:
RONETTE SHORT, :
: COUNTY OF OFFENSE:
Defendant. : NEW YORK
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Wire Fraud)
1. From in or about June 2020 up to and including in or
about September 2020, in the Southern District of New York and
elsewhere, RONETTE SHORT, the defendant, knowingly and with the
intent to defraud, having devised and intending to devise a scheme
and artifice to defraud, and for obtaining money and property by
means of false and fraudulent pretenses, representations, and
promises, transmitted and caused to be transmitted by means of
wire communication in interstate and foreign commerce, writings,
signs, signals, pictures, and sounds for the purpose of executing
such scheme and artifice, to wit, SHORT engaged in a scheme to
obtain funds from the United States Small Business Administration
(“SBA”) through the SBA’s Economic Injury Disaster Loan (“EIDL”)
Program, by submitting false and fraudulent loan applications.
(Title 18, United States Code, Sections 1343 and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
2. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
3. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”), have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
4. At all times relevant to this Complaint, RONETTE SHORT,
the defendant, was employed by the New York City Administration
for Children's Services (“NYC ACS”).
5. From in or about June 2020 to in or about September 2020,
RONETTE SHORT, the defendant, engaged in a scheme to defraud the
SBA and enrich herself by submitting two fraudulent EIDL
applications. First, in or about June 2020, SHORT submitted an
EIDL application on behalf of a sole proprietorship in her own
name that contained materially false representations. Based on
this fraudulent application, the SBA issued an EIDL advance and
EIDL to SHORT totaling $49,000. Later, in or about September 2020,
SHORT submitted an EIDL application on behalf of a C-Corporation
named “Neat Streaks Inc” that also contained materially false
representations. Although the SBA ultimately denied the second
application, SHORT stood to earn approximately $24,500 if the loan
application had been approved.
2
The SBA’s EIDL Program
6. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. As relevant here, this
assistance includes making direct loans to applicants through the
EIDL program.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act expanded the
SBA’s EIDL program, which provided small businesses with low-
interest loans of up to $2 million prior to in or about May 2020,
and up to $150,000 between in or about May 2020 and in or about
December 2021, in order to provide vital economic support to help
overcome the loss of revenue small businesses experienced due to
COVID-19. These loans were made directly by the SBA.
c. To qualify for an EIDL under the CARES Act, an
applicant had to have suffered “substantial economic injury” from
COVID-19, based on an actual economic injury determined by the
SBA. EIDLs could only be used for certain specified purposes, such
as for payroll and other similar costs, increased costs due to
supply chain interruption, to pay obligations that could not be
met due to revenue loss, and for other similar uses.
d. The CARES Act also permitted applications to
request an advance of up to $10,000 to pay allowable working
capital needs. Advances were expected to be paid by the SBA within
three days of the submission of an EIDL application to the SBA,
provided the application contained a self-certification under
penalty of perjury of the applicant’s eligibility for an EIDL.
e. Individuals were permitted to submit EIDL
applications electronically through the SBA’s website, which
recorded various information about the application and
applicant. Applicants received email notifications at various
points in the application process, including, if applicable,
when the SBA extended an offer and when the SBA approved the
loan.
3
SHORT’s Fraudulent EIDL Applications
7. Based on my review of records received from the SBA and
an email provider, I have learned, among other things, the
following:
a. On or about June 30, 2020, an EIDL application was
submitted to the SBA, seeking an EIDL for a sole proprietorship
under the name “Ronette Short” (the “Ronette Short EIDL
Application”).
b. The Ronette Short EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The Ronette Short EIDL Application claimed that the
“Ronette Short” sole proprietorship was 100% owned by RONETTE
SHORT, the defendant.
d. The Ronette Short EIDL Application claimed, among
other things, that the “Ronette Short” sole proprietorship was
established on May 16, 2018, was an “entertainment services” and
“event planning” business, had 8 employees, earned $154,000 in
gross revenues during the 12-month period ending January 31, 2020,
incurred $56,000 in cost of goods sold during the 12-month period
ending January 31, 2020, and had $11,500 in lost rents due to the
coronavirus pandemic.
e. The Ronette Short EIDL Application directed that
the loan payment be sent to a certain account in SHORT’s name
(“SHORT Checking Account-1”) at a certain financial institution
(“Financial Institution-1”). 1
f. The Ronette Short EIDL Application listed a certain
email address (the “SHORT Email Address”). Email provider records
show that the SHORT Email Address was created in or about 2011 and
is subscribed to in the name of “Ronette Short.”
g. On or about June 30, 2020, the SBA approved an EIDL
advance for $8,000, and the next day it disbursed that amount to
SHORT Checking Account-1. On or about July 9, 2020, the SBA
1 Based on my review of publicly available information, I have
learned that Financial Institution-1 is a credit union for which
only certain categories of individuals are eligible to open
accounts, including but not limited to employees of the City of
New York, and Financial Institution-1 required proof of
eligibility in order to open an account.
4
approved the Ronette Short EIDL Application, and issued a payment
to SHORT Checking Account-1 in the amount of $41,000.
h. On or about September 15, 2020, an EIDL application
was submitted to the SBA, seeking an EIDL for a C-Corporation named
“Neat Streaks Inc” (the “Neat Streaks EIDL Application”).
i. The Neat Streaks EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
j. The Neat Streaks EIDL Application claimed that the
“Neat Streaks” business was 100% owned by SHORT.
k. The Neat Streaks EIDL Application claimed, among
other things, that the “Neat Streaks” business was established on
January 26, 2019, was a “personal services” and “drycleaners”
business, had 2 employees, earned $74,000 in gross revenues during
the 12-month period ending January 31, 2020, and incurred $25,000
in cost of goods sold during the 12-month period ending January
31, 2020.
l. The Neat Streaks EIDL Application directed that the
loan payment be sent to a certain account in the name “Neat Streaks
Inc.” with “Ronette Short” as the sole owner of the bank account
(“SHORT Checking Account-2”) at a certain financial institution
(“Financial Institution-2”).
m. The Neat Streaks EIDL Application listed a certain
email address (the “Neat Streaks Email Address”). Email provider
records show that the Neat Streaks Email Address was created on or
about July 23, 2020, and is subscribed to in the name of “Ronette
Short.”
n. On or about September 22, 2020, the SBA declined
the Neat Streaks EIDL Application, noting that the application
“[d]oes not meet eligibility criteria” and noting “[s]uspicious
online behavior.”
o. On or about November 6, 2020, SHORT requested
reconsideration of the SBA’s denial of her Neat Streaks EIDL
Application. On or about the same date, an SBA employee sent SHORT
an email stating, in sum and substance, that, in order to process
her reconsideration request, the SBA would need a completed 2018
or 2019 tax return; a completed IRS Form 4506T (request for tax
transcript); an SBA Schedule-of-Liabilities form; a valid form of
identification; and a voided check matching the bank account she
5
provided. SHORT never responded to the SBA’s request for additional
information.
8. Based on my review of records from Financial
Institution-1, I have learned, among other things, the following:
a. On or about March 10, 2014, RONETTE SHORT, the
defendant, opened SHORT Checking Account-1. Financial Institution-
1’s files for SHORT Checking Account-1 include a copy of SHORT’s
New York State driver’s license.
b. SHORT Checking Account-1 regularly received
payments labeled “payroll” from the City of New York.
c. On or about July 2, 2020, SHORT Checking Account-1
received an Automated Clearing House (“ACH”) transfer from the SBA
in the amount of $8,000, i.e., the EIDL advance. Immediately before
receiving this transfer, the balance in SHORT Checking Account-1
was $2,314.06.
d. On or about July 13, 2020, SHORT Checking Account-
1 received an ACH transfer from the SBA in the amount of $40,900,
i.e., the EIDL. 2 Immediately before receiving this transfer, the
balance in SHORT Checking Account-1 was $4,521.15.
e. Statements for SHORT Checking Account-1 reflect
that SHORT’s principal source of earnings during the 12-month
period ending January 31, 2020 was her job with the NYC ACS.
Statements for SHORT Checking Account-1 do not reflect regular,
significant deposits during the 12-month period ending January 31,
2020, and are therefore not consistent with the operation of a
sole proprietorship that purportedly earned approximately $154,000
in revenue during that period.
9. Based on my communications with employees of Financial
Institution-1, I have learned, among other things, that Financial
Institution-1 is headquartered in Manhattan, New York, and that
during the relevant period, when ACH transfers were sent to
accounts at Financial Institution-1, Financial Institution-1’s
process of reviewing batches of those ACH transfers and disbursing
them into the destination accounts involved the transmission of
2 Based on my review of information from the SBA’s website about
the EIDL program, I know that for EIDLs greater than $25,000,
the SBA charged a one-time $100 fee in order to file a lien on
the borrower’s business assets.
6
wire communications between Manhattan and servers located in New
Jersey.
10. Based on my review of tax filings for RONETTE SHORT, the
defendant, I know, among other things, that the only income she
reported to the Internal Revenue Service (“IRS”) for tax years
2019, 2020, or 2021 was her salary from the City of New York; for
tax year 2020, approximately $693 in income from the U.S.
Department of Commerce; and for tax year 2021, approximately
$10,790 in retirement fund distributions. For tax years 2019, 2020,
and 2021, SHORT did not report any income from, or file a Schedule
C, Profit or Loss from Business, for, a sole proprietorship in her
name, in the name of “Neat Streaks,” or in any other name. Nor did
SHORT file a Schedule E, Supplemental Income or Loss, which, based
on my communications with other law enforcement officers, would
have been required if SHORT elected to be treated as a Subchapter
S Corporation.
11. Based on my review of New York Department of State
records and publicly available records from Instagram, I have
learned, among other things, the following:
a. On or about September 4, 2020, RONETTE SHORT, the
defendant, filed a certificate of incorporation for “Neat Streaks
Inc,” in which she is listed as the “incorporated” and the person
filing the certificate of incorporation.
b. Publicly available records show an Instagram page
with the username “_neat_streaks_.” The name field on the page
states “Ronette S. | Founder.” The biography area of the page
states “Pick Up / Drop Off Wash & Fold Service Est. 2020” and lists
the Neat Streaks Email Address. A publicly visible post on the
page, dated September 3, 2020, has a caption that says “Coming
Soon ♥.”
c. Based on my training and experience and my
involvement in this investigation, I believe Neat Streak’s date of
incorporation, September 4, 2020; the statements on the Neat
Streaks Instagram that the business was established in 2020 (“Est.
2020”) and “Coming Soon” as of September 3, 2020; and the absence
of tax filings reflecting any income in 2019 or 2020 contradict
SHORT’s claim on the Neat Streaks EIDL Application that the
business was established January 26, 2019, and earned a substantial
sum, $74,000, in gross revenues during the 12-month period ending
January 31, 2020.
12. Based on my review of records from the New York State
Department of Labor (“NYS DOL”), I have learned that the NYS DOL
7
does not have records that RONETTE SHORT, the defendant, any sole
proprietorship using her name in New York State, or the name “Neat
Streaks” in New York State, had any employees or paid any wages to
employees during 2019 or 2020, contrary to SHORT’s claim in the
SHORT EIDL Application that her business employed 8 people and her
claim in the Neat Streaks EIDL Application that her business
employed 2 people.
WHEREFORE, deponent respectfully requests that a warrant
issue for the arrest of RONETTE SHORT, the defendant, and that she
be imprisoned or bailed, as the case may be.
_______________________________
/s/ LaVale Jackson, with permission by SDA
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
___day of November 2022.
29th
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
8
Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
Southern District of New York
- - - - - - - - - - - - - - - - - - X 22 MAG 9610
: SEALED COMPLAINT
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343 and 2
:
WALTER SUSSWELL, :
: COUNTY OF OFFENSE:
Defendant. : NEW YORK
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Wire Fraud)
1. From at least in or about April 2021, up to and including
at least in or about May 2021, in the Southern District of New
York and elsewhere, WALTER SUSSWELL, the defendant, knowingly and
with the intent to defraud, having devised and intending to devise
a scheme and artifice to defraud, and for obtaining money and
property by means of false and fraudulent pretenses,
representations, and promises, transmitted and caused to be
transmitted by means of wire communication in interstate and
foreign commerce, writings, signs, signals, pictures, and sounds
for the purpose of executing such scheme and artifice, to wit,
SUSSWELL engaged in a scheme to obtain Government-guaranteed loan
proceeds from the United States Small Business Administration
(“SBA”) and a financial institution through the SBA’s Paycheck
Protection Program (“PPP”), by submitting a false and fraudulent
loan application.
(Title 18, United States Code, Sections 1343 and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
2. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
3. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”) have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
4. At all times relevant to this Complaint, WALTER
SUSSWELL, the defendant, was employed by the New York City Police
Department (“NYPD”).
5. In or about April and May 2021, WALTER SUSSWELL, the
defendant, engaged in a scheme to defraud the SBA and enrich
himself, by applying for a PPP loan as a self-employed individual,
using an application that contained materially false
representations about his purported self-employment business.
Based on that fraudulent application, a financial institution
(“Financial Institution-1”) issued an SBA-guaranteed PPP loan to
SUSSWELL in the amount of $20,833.
The SBA’s PPP
6. Based on my training and experience, my review of
information from the SBA’s website, my review of information
2
received from the SBA, and my communications with SBA employees,
I know that:
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. Under the SBA loan
guarantee programs, the actual loan is issued by a commercial
lender, but the lender receives the full faith and credit backing
of the United States Government on all or part of the loan.
Therefore, if a borrower defaults on an SBA-guaranteed loan, the
commercial lender may seek reimbursement from the SBA, up to the
percentage of the guarantee. By reducing the risk to commercial
lenders, the SBA’s loan guarantee programs enable lenders to
provide loans to qualifying small businesses to which financing
might otherwise be unavailable on reasonable terms through normal
lending channels. When a borrower seeks an SBA-guaranteed loan,
the borrower must meet both the commercial lender’s eligibility
requirements for the loan as well as the SBA’s eligibility
requirements.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act authorized
billions of dollars in forgivable loans to small businesses for
job retention and certain other business expenses through the PPP.
On April 24, 2020, the Paycheck Protection Program and Health Care
Enhancement Act was signed into law, authorizing additional
billions of dollars in PPP funding. The first round of the PPP
closed to new applications on August 8, 2020. On December 27, 2020,
the Consolidated Appropriations Act of 2021, which included the
Economic Aid to Hard-Hit Small Businesses, Nonprofit, and Venues
Act (the “Relief Act”) was signed into law, providing additional
funding for the PPP. Under the Relief Act, certain businesses that
had already obtained a PPP loan under the original PPP were
eligible for an additional “second draw” PPP loan, provided they
met certain requirements. The Relief Act also re-opened the
application period for “first draw” PPP loans to businesses that
had not been approved for “first draw” PPP loans prior to August
8, 2020, or who may have been eligible to receive more funds during
the “first draw” period than they actually received.
c. The PPP allowed qualifying small businesses and
other organizations to receive unsecured SBA-guaranteed loans. PPP
loan proceeds were required to be used by businesses on payroll
costs, mortgage interest, rent, and/or utilities, among other
3
specified expenses. The PPP allowed the interest and principal to
be forgiven if businesses spent the proceeds on those expenses
under certain conditions. Pursuant to the CARES Act, the amount of
PPP funds a business was eligible to receive was determined by the
number of employees employed by the business and their average
payroll costs. Businesses applying for a PPP loan had to provide
documentation to confirm that they had in the past paid employees
the compensation represented in the loan application. The PPP is
overseen by the SBA, which has authority over all PPP loans, but
individual PPP loans were issued by approved commercial lenders,
who would receive and process PPP applications and supporting
documentation. Eligibility for PPP loans was limited to businesses
in existence before on or about February 15, 2020.
d. Borrowers through the PPP were also eligible to
apply for loan forgiveness once all loan proceeds for which
forgiveness was requested had been used.
SUSSWELL’s Fraudulent PPP Application
7. Based on my review of records received from Financial
Institution-1, I have learned, among other things, the following:
a. On or about April 13, 2021, an application for a
“first draw” PPP loan was submitted to Financial Institution-1,
seeking a PPP loan for WALTER SUSSWELL, the defendant, as a self-
employed individual (the “SUSSWELL PPP Application”). 1
b. The SUSSWELL PPP Application contained a
certification “that the information provided in this application
and the information provided in all supporting documents and forms
is true and accurate in all material respects,” and that making
false statements to obtain loans guaranteed by the SBA was a
federal crime.
c. The SUSSWELL PPP Application claimed that SUSSWELL
was the 100% owner of a business in his own name that was
established in 2017.
1
The SUSSWELL PPP Application listed a certain email address, and
was submitted from an Internet Protocol (“IP”) Address, both of
which, based on my involvement in this investigation, I do not
believe are connected to WALTER SUSSWELL, the defendant. However,
I believe that SUSSWELL was involved in submitting the SUSSWELL
PPP Application, because Financial Institution-1 required SUSSWELL
to verify his identity as the applicant by providing both a
photograph of his driver’s license and a series of “selfies”
showing himself from multiple angles.
4
d. The SUSSWELL PPP Application claimed, among other
things, that SUSSWELL had earned gross income of $180,650 in tax
year 2019, and that his self-employment business had only one
employee. As an attachment to the SUSSWELL PPP Application,
SUSSWELL provided a copy of an IRS Schedule C, Profit or Loss from
Business Form, listing SUSSWELL as the proprietor of a “REPAIR &
MAINTENANCE” business (the “Fake 2019 Schedule C”). The Fake 2019
Schedule C claimed that SUSSWELL’s REPAIR & MAINTENANCE business
had $180,650 in gross receipts and gross income, and $93,150 in
total expenses, during tax year 2019.
e. The SUSSWELL PPP Application directed that the loan
payment be sent to a certain account in SUSSWELL’s name (the
“SUSSWELL Bank Account”) at a certain financial institution
(“Financial Institution-2”). 2
f. On or about May 6, 2021, Financial Institution-1
approved the SUSSWELL PPP Application and issued a payment to the
SUSSWELL Bank Account in the amount of $20,833.
8. Based on my review of records from Financial
Institution-2, I have learned, among other things, the following:
a. In or about 2002, the SUSSWELL Bank Account was
opened as a custodial account, in the name of another person as
custodian for WALTER SUSSWELL, the defendant, who was a minor at
the time. In or about March 2019, SUSSWELL — who was no longer a
minor at the time — signed an “Account Signature Card” with a
checkbox indicating that it “Amends Existing Information.”
SUSSWELL’s 2019 Account Signature Card indicates that he presented
a New York State Driver’s License in his own name, and Financial
Institution-2’s files for the SUSSWELL Bank Account include a
photocopy of SUSSWELL’s New York State driver’s license.
b. The SUSSWELL Bank Account regularly received
payments labeled “payroll” from the City of New York.
c. On or about May 7, 2021, the SUSSWELL Bank Account
received an Automated Clearing House (“ACH”) transfer from
Financial Institution-1, labeled “PPP LOAN,” in the amount of
2 Based on my review of publicly available information, I have
learned that Financial Institution-2 is a credit union for which
only certain categories of individuals are eligible to open
accounts, including but not limited to employees of the City of
New York, and Financial Institution-2 requires proof of
eligibility in order to open an account.
5
$20,833. Immediately before receiving this transfer, the balance
in the SUSSWELL Bank Account was $81.48.
d. That same day, after the PPP loan proceeds were
deposited, a cash withdrawal was made from the SUSSWELL Bank
Account, at a Financial Institution-2 branch in Queens, New York,
in the amount of $20,000. A receipt from that cash withdrawal
indicates that WALTER SUSSWELL, the defendant, showed his New York
State Driver’s License when making the withdrawal, and
surveillance footage from the Financial Institution-2 branch at
the time of the cash withdrawal shows a person consistent in
appearance with SUSSWELL walking up to a teller to withdraw the
money.
e. Statements for the SUSSWELL Bank Account reflect
that during 2019, SUSSWELL received less than $10,000 in total
deposits, and that a majority of the deposits to the SUSSWELL Bank
Account were “payroll” deposits from the City of New York.
Statements for the SUSSWELL Bank Account do not reflect tens of
thousands of dollars in 2019 earnings from SUSSWELL’s self-
employment business.
9. Based on my communications with employees of Financial
Institution-2, I have learned, among other things, that Financial
Institution-2 is headquartered in Manhattan, New York, and that
during the relevant period, when ACH transfers were sent to
accounts at Financial Institution-2, Financial Institution-2’s
process of reviewing batches of those ACH transfers and disbursing
them into the destination accounts involved the transmission of
wire communications between Manhattan and servers located in New
Jersey.
10. Based on my review of tax filings for WALTER SUSSWELL,
the defendant, I know, among other things, that the Fake 2019
Schedule C was not actually submitted to the Internal Revenue
Service (“IRS”) with SUSSWELL’s tax return, and that SUSSWELL did
not report any income — let alone $180,650 in income — from work
as a self-employed “repair and maintenance” worker.
6
WHEREFORE, deponent respectfully requests that a warrant
issue for the arrest of WALTER SUSSWELL, the defendant, and that
he be imprisoned or bailed, as the case may be.
_______________________________
/s/ LaVale Jackson, with permission by SDA
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
___day
29th of November 2022.
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
7
Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
22 MAG 9611
Southern District of New York
- - - - - - - - - - - - - - - - - - X
: SEALED COMPLAINT
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343 and 2
:
DELILAH CUMMINGS, :
: COUNTY OF OFFENSE:
Defendant. : NEW YORK
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Wire Fraud)
1. In or about July 2020, in the Southern District of New
York and elsewhere, DELILAH CUMMINGS, the defendant, knowingly and
with the intent to defraud, having devised and intending to devise
a scheme and artifice to defraud, and for obtaining money and
property by means of false and fraudulent pretenses,
representations, and promises, transmitted and caused to be
transmitted by means of wire communication in interstate and
foreign commerce, writings, signs, signals, pictures, and sounds
for the purpose of executing such scheme and artifice, to wit,
CUMMINGS engaged in a scheme to obtain funds from the United States
Small Business Administration (“SBA”) through the SBA’s Economic
Injury Disaster Loan (“EIDL”) Program, by submitting a false and
fraudulent loan application.
(Title 18, United States Code, Sections 1343 and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
2. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
3. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”), have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
4. At all times relevant to this Complaint, DELILAH
CUMMINGS, the defendant, was employed by the New York City
Department of Education (“NYC DOE”).
5. In or about July 2020, DELILAH CUMMINGS, the defendant,
engaged in a scheme to defraud the SBA and enrich herself, by
applying for an EIDL on behalf of a sole proprietorship in her own
name that purportedly provided hair and nail salon services.
CUMMINGS’s EIDL application contained materially false
representations about her purported sole proprietorship. Based on
that fraudulent application, the SBA issued an EIDL to CUMMINGS in
the amount of $150,000.
The SBA’s EIDL Program
6. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
2
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. As relevant here, this
assistance includes making direct loans to applicants through the
EIDL program.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act expanded the
SBA’s EIDL program, which provided small businesses with low-
interest loans of up to $2 million prior to in or about May 2020,
and up to $150,000 between in or about May 2020 and in or about
December 2021, in order to provide vital economic support to help
overcome the loss of revenue small businesses experienced due to
COVID-19. These loans were made directly by the SBA.
c. To qualify for an EIDL under the CARES Act, an
applicant had to have suffered “substantial economic injury” from
COVID-19, based on an actual economic injury determined by the
SBA. EIDLs could only be used for certain specified purposes, such
as for payroll and other similar costs, increased costs due to
supply chain interruption, to pay obligations that could not be
met due to revenue loss, and for other similar uses.
d. The CARES Act also permitted applications to
request an advance of up to $10,000 to pay allowable working
capital needs. Advances were expected to be paid by the SBA within
three days of the submission of an EIDL application to the SBA,
provided the application contained a self-certification under
penalty of perjury of the applicant’s eligibility for an EIDL.
e. Individuals were permitted to submit EIDL
applications electronically through the SBA’s website, which
recorded various information about the application and applicant.
Applicants received email notifications at various points in the
application process, including, if applicable, when the SBA
extended an offer and when the SBA approved the loan.
CUMMINGS’s Fraudulent EIDL Application
7. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about July 16, 2020, an EIDL application was
submitted to the SBA, seeking an EIDL for a sole proprietorship
3
under the name “Delilah Cummings” (the “CUMMINGS EIDL
Application”).
b. The CUMMINGS EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The CUMMINGS EIDL Application claimed that the
“Delilah Cummings” sole proprietorship was 100% owned by DELILAH
CUMMINGS, the defendant. 1
d. The CUMMINGS EIDL Application claimed, among other
things, that the “Delilah Cummings” sole proprietorship was
established on March 1, 2016, was a “Hair & Nail Salon,” 2 had 45
employees, earned $498,800.00 in gross revenues during the 12-
month period ending January 31, 2020, and incurred $97,000.00 in
cost of goods sold during the 12-month period ending January 31,
2020.
e. The CUMMINGS EIDL Application directed that the
loan payment be sent to a certain account in CUMMINGS’s name (the
“CUMMINGS Checking Account”) at a certain financial institution
(“Financial Institution-1”). 3
f. The CUMMINGS EIDL Application listed a certain
email address, and was submitted from an Internet Protocol (“IP”)
Address, both of which, based on my involvement in this
1 The social security number, date of birth, and street address
listed for DELILAH CUMMINGS, the defendant, on the CUMMINGS EIDL
Application were the same as the social security number, date of
birth, and street address associated with CUMMINGS’s bank
accounts, tax returns, and Cash App account, all discussed below,
and are also consistent with the information for CUMMINGS contained
in a public records database frequently used by law enforcement.
2 Based on my review of records from the New York Department of
State, I have learned that DELILAH CUMMINGS, the defendant, was
licensed by the State of New York as a cosmetologist between at
least in or about August 2016 and in or about August 2020, and
again beginning in or about January 2021.
3 Based on my review of publicly available information, I have
learned that Financial Institution-1 is a credit union for which
only certain categories of individuals are eligible to open
accounts, including but not limited to employees of the City of
New York, and Financial Institution-1 requires proof of
eligibility in order to open an account.
4
investigation, I do not believe are connected to DELILAH CUMMINGS,
the defendant.
g. On or about July 18, 2020, the SBA approved the
CUMMINGS EIDL Application, and issued a payment to the CUMMINGS
Checking Account in the amount of $150,000.
8. Based on my review of records from Financial
Institution-1, I have learned, among other things, the following:
a. In or about May 2019, DELILAH CUMMINGS, the
defendant, opened the CUMMINGS Checking Account and a connected
savings account (the “CUMMINGS Savings Account,” and collectively
the “CUMMINGS Financial Institution-1 Accounts”). Financial
Institution-1’s files for the CUMMINGS Financial Institution-1
Accounts include a copy of CUMMINGS’s New York State driver’s
license.
b. The CUMMINGS Checking Account regularly received
payments labeled “payroll” from the City of New York.
c. On or about July 21, 2020, the CUMMINGS Checking
Account received an Automated Clearing House (“ACH”) transfer from
the SBA in the amount of $149,900.00. 4 Immediately before receiving
this transfer, the balance in the CUMMINGS Checking Account was
$3.21.
d. On or about July 21, 2020, $146,000 was transferred
from the CUMMINGS Checking Account to the CUMMINGS Savings Account,
which Financial Institution-1’s records indicate was a “Mobile
Transfer.” Immediately before receiving this transfer, the balance
in the CUMMINGS Savings Account was $5.00.
e. Statements for the CUMMINGS Financial Institution-
1 Accounts indicate that the SBA EIDL proceeds were spent on, among
other things, a trip to Las Vegas, Nevada, multiple large purchases
at retailers including Apple, Louis Vuitton, Polo Ralph Lauren,
Macys, and Canada Goose, transfers to investment accounts, and
multiple large payments to an auto loan servicing company. Those
records do not indicate that the SBA EIDL proceeds were used for
expenditures consistent with running a hair and nail salon, such
as commercial rent or the purchasing of supplies.
4 Based on my review of information from the SBA’s website about
the EIDL program, I know that for EIDLs greater than $25,000, the
SBA charged a one-time $100 fee in order to file a lien on the
borrower’s business assets.
5
f. Statements for the CUMMINGS Financial Institution-
1 Accounts reflect that during the period beginning when she opened
the accounts in or about May 2019, and ending January 31, 2020,
CUMMINGS’s principal source of earnings was her job with the NYC
DOE. Statements for the CUMMINGS Financial Institution-1 Accounts
do not reflect any other significant deposits prior to January 31,
2020, and are therefore not consistent with the operation of a
sole proprietorship that purportedly earned approximately $500,000
in revenue during the 12 months prior to January 31, 2020.
9. Based on my communications with employees of Financial
Institution-1, I have learned, among other things, that Financial
Institution-1 is headquartered in Manhattan, New York, and that
during the relevant period, when ACH transfers were sent to
accounts at Financial Institution-1, Financial Institution-1’s
process of reviewing batches of those ACH transfers and disbursing
them into the destination accounts involved the transmission of
wire communications between Manhattan and servers located in New
Jersey.
10. Based on my review of tax filings for DELILAH CUMMINGS,
the defendant, I know, among other things, that the only income
she reported to the Internal Revenue Service (“IRS”) for tax year
2019 was her salary from the NYC DOE, and that CUMMINGS did not
report any income from, or file a Schedule C, Profit or Loss from
Business Form, for any sole proprietorship in her name.
11. Based on my review of records from the New York State
Department of Labor (“NYS DOL”), I have learned that the NYS DOL
does not have records that DELILAH CUMMINGS, the defendant, or any
sole proprietorship using her name in New York State, had any
employees or paid any wages to employees during 2019 or 2020,
contrary to CUMMINGS’s claim in the CUMMINGS EIDL Application that
her business employed 45 people.
12. Based on my review of records from the mobile payments
application Cash App, I have learned, among other things, the
following:
a. DELILAH CUMMINGS, the defendant, has an account on
Cash App (the “CUMMINGS Cash App Account”).
b. One of the payment sources for the CUMMINGS Cash
App Account is a debit card associated with the CUMMINGS Checking
Account.
c. The CUMMINGS Cash App Account made a series of
attempted and actual payments, and received certain payment
6
requests, from a Cash App account in the name “Brian Mohammed.” In
total, the CUMMINGS Cash App Account paid a total of $6,000 to
Mohammed in the days after receiving the EIDL proceeds discussed
above. Based on my review of records from Financial Institution-
1, I know that each of the completed payments discussed below were
withdrawn from the CUMMINGS Checking Account, and were funded using
proceeds from the EIDL. The payments and requests between CUMMINGS
and Mohammed included, among others, the following:
i. On or about July 21, 2020, CUMMINGS paid
Mohammed $2,500;
ii. On or about July 23, 2020, CUMMINGS paid
Mohammed $500;
iii. On or about July 25, 2020, Mohammed sent
CUMMINGS a request for $2,500 with the memo “Application,” and
this request was declined with the message
“AMOUNT_EXCEEDED_WEEKLY_TRANSACTION_LIMIT”;
iv. On or about July 27, 2020 Mohammed sent
CUMMINGS a request for $2,500 with the memo “balance $3,000.00,”
and this request was declined with the message
“AMOUNT_EXCEEDED_WEEKLY_TRANSACTION_LIMIT”;
v. On or about July 28, 2020, CUMMINGS paid
Mohammed $2,500;
vi. On or about July 29, 2020, CUMMINGS paid
Mohammed $500, with the memo “thank you again.”
7
WHEREFORE, deponent respectfully requests that a warrant
issue for the arrest of DELILAH CUMMINGS, the defendant, and that
she be imprisoned or bailed, as the case may be.
_______________________________
/s/ LaVale Jackson, with permission by SDA
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
___day of November 2022.
29th
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
8
Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
Southern District of New York
- - - - - - - - - - - - - - - - - - X 22 MAG 9612
: SEALED COMPLAINT
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343 and 2
:
JAROD OTTLEY, :
: COUNTY OF OFFENSE:
Defendant. : NEW YORK
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Wire Fraud)
1. From in or about July 2020 up to and including in or
about September 2020, in the Southern District of New York and
elsewhere, JAROD OTTLEY, the defendant, knowingly and with the
intent to defraud, having devised and intending to devise a scheme
and artifice to defraud, and for obtaining money and property by
means of false and fraudulent pretenses, representations, and
promises, transmitted and caused to be transmitted by means of
wire communication in interstate and foreign commerce, writings,
signs, signals, pictures, and sounds for the purpose of executing
such scheme and artifice, to wit, OTTLEY engaged in a scheme to
obtain funds from the United States Small Business Administration
(“SBA”) through the SBA’s Economic Injury Disaster Loan (“EIDL”)
Program, by submitting false and fraudulent loan applications.
(Title 18, United States Code, Sections 1343 and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
2. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
3. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”), have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
4. At all times relevant to this Complaint, JAROD OTTLEY,
the defendant, was employed by the New York City Department of
Transportation (“NYC DOT”).
5. From in or about July 2020 to in or about September 2020,
JAROD OTTLEY, the defendant, engaged in a scheme to defraud the
SBA and enrich himself by submitting two fraudulent EIDL
applications. First, in or about July 2020, OTTLEY submitted an
EIDL application on behalf of a sole proprietorship named “jerry
home improvement” that contained material false representations.
Based on this fraudulent application, the SBA issued an EIDL to
OTTLEY in the amount of $96,000. Later, in or about September 2020,
OTTLEY submitted an EIDL application on behalf of a sole
proprietorship named “JD Transportation” that also contained
material false representations. Although the SBA ultimately denied
the second application, OTTLEY stood to earn approximately
$106,400 if the loan application had been approved.
2
The SBA’s EIDL Program
6. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. As relevant here, this
assistance includes making direct loans to applicants through the
EIDL program.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act expanded the
SBA’s EIDL program, which provided small businesses with low-
interest loans of up to $2 million prior to in or about May 2020,
and up to $150,000 between in or about May 2020 and in or about
December 2021, in order to provide vital economic support to help
overcome the loss of revenue small businesses experienced due to
COVID-19. These loans were made directly by the SBA.
c. To qualify for an EIDL under the CARES Act, an
applicant had to have suffered “substantial economic injury” from
COVID-19, based on an actual economic injury determined by the
SBA. EIDLs could only be used for certain specified purposes, such
as for payroll and other similar costs, increased costs due to
supply chain interruption, to pay obligations that could not be
met due to revenue loss, and for other similar uses.
d. The CARES Act also permitted applications to
request an advance of up to $10,000 to pay allowable working
capital needs. Advances were expected to be paid by the SBA within
three days of the submission of an EIDL application to the SBA,
provided the application contained a self-certification under
penalty of perjury of the applicant’s eligibility for an EIDL.
e. Individuals were permitted to submit EIDL
applications electronically through the SBA’s website, which
recorded various information about the application and
applicant. Applicants received email notifications at various
points in the application process, including, if applicable,
when the SBA extended an offer and when the SBA approved the
loan.
3
OTTLEY’s Fraudulent EIDL Applications
7. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about July 22, 2020, an EIDL application was
submitted to the SBA, seeking an EIDL for a sole proprietorship
with the business name “jerry home improvement” (the “Jerry Home
EIDL Application”). The Jerry Home EIDL Application stated that
the business’s primary address was a certain address in Rosedale,
New York, which is a neighborhood in Queens County, New York.
b. The Jerry Home EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The Jerry Home EIDL Application claimed that the
“jerry home improvement” sole proprietorship was 100% owned by
JAROD OTTLEY, the defendant.
d. The Jerry Home EIDL Application claimed, among
other things, that the “jerry home improvement” sole
proprietorship was established on April 1, 2017, was a
“Construction & Contractors” and “House Remodeling/Improvements
(ie structural remodeling)” business, had 10 employees, earned
$202,000 in gross revenues during the 12-month period ending
January 31, 2020, and incurred $10,200 in cost of goods sold during
the 12-month period ending January 31, 2020.
e. The Jerry Home EIDL Application directed that the
loan payment be sent to a certain account in the name of “Jarod H
Ottley” (“OTTLEY Checking Account-1”) at a certain financial
institution (“Financial Institution-1”). 1
f. On or about July 23, 2020, the SBA approved the
Jerry Home EIDL Application and a loan in the amount of $96,000.
g. On or about September 2, 2020, an EIDL application
was submitted to the SBA, seeking an EIDL for a sole proprietorship
1
Based on my review of publicly available information, I have
learned that Financial Institution-1 is a credit union for which
only certain categories of individuals are eligible to open
accounts, including but not limited to employees of the City of
New York, and Financial Institution-1 required proof of
eligibility in order to open an account.
4
with the business name “JD Transportation” (the “JD Transportation
EIDL Application”).
h. The JD Transportation EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
i. The JD Transportation EIDL Application claimed that
the “JD Transportation” sole proprietorship was 100% owned by
OTTLEY.
j. The JD Transportation EIDL Application claimed,
among other things, that the “JD Transportation” sole
proprietorship was established on April 15, 2015, was a
“Educational Services” business, had 3 employees, earned $225,560
in gross revenues during the 12-month period ending January 31,
2020, and incurred $12,800 in cost of goods sold during the 12-
month period ending January 31, 2020.
k. On or about September 2, 2020, the SBA denied the
JD Transportation EIDL Application. SBA records show that on or
about the same date, an SBA employee noted that the JD
Transportation EIDL Application listed a sole proprietorship
without a federal tax identification number but with declared
employees. The SBA employee further noted that “per the [Internal
Revenue Service], any time a sole proprietor hires an employee,
the sole proprietorship will need to obtain an Employer
Identification Number (EIN). Decline loan[.]” On or about
September 5, 2020, the SBA sent a letter to OTTLEY notifying him
that the JD Transportation EIDL Application was denied. 2
2 Based on my review of SBA records, I have learned, among other
things, that on or about July 25, 2020, an EIDL application was
submitted for a sole proprietorship named “Jays Construction,”
listing “jarod ottley” as the 100% owner of the business (the
“Jays Construction EIDL Application”). The Jays Construction
EIDL Application listed the same phone number for “jarod ottley”
as was listed on the Jerry Home EIDL Application and JD
Transportation EIDL Application, although other identifying
information differs. The SBA’s notes for the Jays Construction
EIDL Application show that on or about August 12, 2020, “jarod
ottley” called the SBA to ask about the status of his loan
application. However, an SBA employee noted that she “had to
wait too long for him to get his info to give me to make sure
[t]his is the person that I [was] speaking with.” During a
subsequent call on or about August 16, 2020, when “jarod Ottley”
5
8. Based on my review of SBA records, email provider
records, and phone carrier records, I have learned, among other
things, the following:
a. Both the Jerry Home EIDL Application and the JD
Transportation EIDL Application list a certain email address for
OTTLEY (the “OTTLEY Email Address”). Email provider records show
that the OTTLEY Email Address was created in or about 2014 and is
subscribed to in the name of “Jarod Ottley.”
b. Both the Jerry Home EIDL Application and the JD
Transportation EIDL Application were submitted from the same IP
Address. In addition, on or about July 23, 2020, the Jerry Home
EIDL Application was electronically signed by “jarod ottley” using
another certain IP address ending in 169 (the “Signing IP
Address”).
9. Based on my review of records from Cash App, I have
learned, among other things, the following:
a. On or about June 13, 2019, an individual, who I
believe to be JARROD OTTLEY, the defendant, created a Cash App
account using the name “Jarod Ottley” (the “OTTLEY Cash App
Account”). OTTLEY also provided the OTTLEY Email Address as the
contact email address.
b. Cash App records show that the OTTLEY Cash App
Account was accessed by an individual using the Signing IP Address
on or about July 11, 2020, i.e., the same month an individual at
the same IP address signed the Jerry Home EIDL Application.
10. Based on my review of records from Financial
Institution-1, I have learned, among other things, the following:
a. In or about May 16, 1994, JAROD OTTLEY, the
defendant, opened an account at Financial Institution-1. At
Financial Institution-1, OTTLEY held OTTLEY Checking Account-1 and
a connected bank account (“OTTLEY Checking Account-2”). Financial
Institution-1’s files for OTTLEY’s accounts include a copy of
OTTLEY’s New York State driver’s license.
called again to check on the status of his loan application,
another SBA employee was able to verify the caller’s identity.
Ultimately, the SBA denied the Jays Construction EIDL
Application.
6
b. OTTLEY Checking Account-2 regularly received
payments labeled “payroll” from the City of New York.
c. On or about July 24, 2020, OTTLEY Checking Account-
1 received an ACH transfer from the SBA in the amount of $95,900. 3
Immediately before receiving this transfer, the balance in OTTLEY
Checking Account-1 was $609.17.
d. In the period soon after the EIDL was disbursed,
bank records show that on or about July 24, 2020, OTTLEY
transferred $88,000 to OTTLEY Checking Account-2, and there were
frequent cash withdrawals from both bank accounts OTTLEY
controlled.
e. Statements for OTTLEY Checking Account-1 and OTTLEY
Checking Account-2 reflect that OTTLEY’s principal source of
earnings during the 12-month period ending January 31, 2020 was
his job with the NYC DOT. Statements for OTTLEY Checking Account-
1 also show tens of thousands of dollars in cash deposits, but
those cash deposits, even collectively, do not appear to be
consistent with the operation of a sole proprietorship that
purportedly earned approximately $202,200 in revenue during the 12
months ending January 31, 2020.
11. Based on my training and experience and my review of
information published by the New York City and New York State
governments, I know that under the New York General Business Law,
a sole proprietorship operating in a name other than the name of
the sole proprietor him or herself must file a Certificate of
Assumed Name with the County Clerk in the county where the sole
proprietorship is based. Based on my review of records from the
Queens County Clerk, I know that no Certificate of Assumed Name
was filed in Queens County for “jerry home improvement” or “JD
Transportation” between in or about 1993 and in or about April
2022. 4
3 Based on my review of information from the SBA’s website about
the EIDL program, I know that for EIDLs greater than $25,000,
the SBA charged a one-time $100 fee in order to file a lien on
the borrower’s business assets.
4 Based on my review of records provided by the New York
Department of State, I have learned that a business named “JD
Transportation LLC” was incorporated in New York State on or
about March 30, 1999, by an individual other than JAROD OTTLEY,
the defendant. Based on my review of records associated with “JD
Transportation LLC,” including the fact that this is a limited
7
12. Based on my communications with employees of Financial
Institution-1, I have learned, among other things, that Financial
Institution-1 is headquartered in Manhattan, New York, and that
during the relevant period, when ACH transfers were sent to
accounts at Financial Institution-1, Financial Institution-1’s
process of reviewing batches of those ACH transfers and disbursing
them into the destination accounts involved the transmission of
wire communications between Manhattan and servers located in New
Jersey.
13. Based on my review of tax filings for JAROD OTTLEY, the
defendant, I know, among other things, that OTTLEY filed a tax
return for tax years 2019 and 2020 but did not file a tax return
for tax year 2021. For tax years 2019 and 2020, the only income
OTTLEY reported to the Internal Revenue Service (“IRS”) was his
salary from the NYC DOT. 5 For tax years 2019, 2020, and 2021,
OTTLEY did not report any income from, or file a Schedule C, Profit
or Loss from Business, for, “jerry home improvement,” “JD
Transportation,” or any other sole proprietorship.
14. Based on my review of records from the New York State
Department of Labor (“NYS DOL”), I have learned that the NYS DOL
does not have records that “jerry home improvement” or “JD
Transportation” had any employees or paid any wages to employees
during 2019 or 2020, contrary to the claim by JAROD OTTLEY, the
defendant, in the Jerry Home EIDL Application and the JD
Transportation EIDL Application that these businesses employed 10
and 3 employees, respectively.
liability company rather than a sole proprietorship and it was
created long before the date JAROD OTTLEY, the defendant,
claimed his business were established, I believe this is a
different business than the “JD Transportation” for which OTTLEY
submitted an EIDL application.
5 For tax year 2020, JAROD OTTLEY, the defendant, filed an IRS
Form 8915-E reporting to the IRS that he received a $100,000
disbursement from a retirement plan due to the coronavirus or
other 2020 disaster. See Instructions for Form 8915-E (Feb. 11,
2021) (“If you were impacted by the coronavirus and you made
withdrawals from your retirement plan in 2020 before December
31, you may have coronavirus-related distributions eligible for
special tax benefits on Form 8915-E. . . . Taxpayers adversely
affected by qualified 2020 disasters, other than the
coronavirus, may be eligible for special tax benefits.”).
8
WHEREFORE, deponent respectfully requests that a warrant
issue for the arrest of JAROD OTTLEY, the defendant, and that he
be imprisoned or bailed, as the case may be.
_______________________________
/s/ LaVale Jackson, with permission by SDA
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
___day
29th of November 2022.
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
9
Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
Southern District of New York
- - - - - - - - - - - - - - - - - - X
:
22 MAG 9613
SEALED COMPLAINT
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343, 1349,
: 1028A, and 2
RODNEY SMITH, :
DENISE GANT, : COUNTY OF OFFENSE:
EBONY SIMON, : NEW YORK
PHYA SCOTT, :
PRISCILLA JACKSON, :
SHARON CHARLES, :
YOLANDA LAWRENCE, :
YOLANDA RATCLIFF, and :
ZHANE RATCLIFF, :
:
Defendants. :
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Conspiracy to Commit Wire Fraud)
1. From at least in or about June 2020 up to and including
at least in or about May 2021, in the Southern District of New
York and elsewhere, RODNEY SMITH, DENISE GANT, EBONY SIMON, PHYA
SCOTT, PRISCILLA JACKSON, SHARON CHARLES, YOLANDA LAWRENCE,
YOLANDA RATCLIFF, and ZHANE RATCLIFF, the defendants, and others
known and unknown, willfully and knowingly, did combine, conspire,
confederate, and agree together and with each other to commit wire
fraud, in violation of Title 18, United States Code, Section 1343.
2. It was a part and object of the conspiracy that RODNEY
SMITH, DENISE GANT, EBONY SIMON, PHYA SCOTT, PRISCILLA JACKSON,
SHARON CHARLES, YOLANDA LAWRENCE, YOLANDA RATCLIFF, and ZHANE
RATCLIFF, the defendants, and others known and unknown, willfully
and knowingly, having devised and intending to devise a scheme and
artifice to defraud, and for obtaining money and property by means
of false and fraudulent pretenses, representations, and promises,
did transmit and cause to be transmitted by means of wire, radio,
and television communication in interstate and foreign commerce,
writings, signs, signals, pictures, and sounds, for the purpose of
executing such scheme and artifice, in violation of Title 18,
United States Code, Section 1343.
(Title 18, United States Code, Section 1349.)
COUNT TWO
(Wire Fraud)
3. From at least in or about June 2020 up to and including
at least in or about May 2021, in the Southern District of New
York and elsewhere, RODNEY SMITH, DENISE GANT, EBONY SIMON, PHYA
SCOTT, PRISCILLA JACKSON, SHARON CHARLES, YOLANDA LAWRENCE,
YOLANDA RATCLIFF, and ZHANE RATCLIFF, the defendants, having
devised and intending to devise a scheme and artifice to defraud,
and for obtaining money and property by means of false and
fraudulent pretenses, representations, and promises, knowingly
transmitted and caused to be transmitted by means of wire, radio,
and television communication in interstate and foreign commerce,
writings, signs, signals, pictures, and sounds, for the purpose of
executing such scheme and artifice, to wit, SMITH, GANT, SIMON,
SCOTT, JACKSON, CHARLES, LAWRENCE, YOLANDA RATCLIFF, and ZHANE
RATCLIFF engaged in a scheme to obtain funds from the United States
Small Business Administration (“SBA”) through the SBA’s Economic
Injury Disaster Loan (“EIDL”) Program by submitting false and
fraudulent loan applications.
(Title 18, United States Code, Sections 1343 and 2.)
COUNT THREE
(Aggravated Identity Theft)
4. From at least in or about June 2020 up to and including
at least in or about May 2021, in the Southern District of New
York and elsewhere, RODNEY SMITH, the defendant, knowingly did
transfer, possess, and use, without lawful authority, a means of
identification of another person, during and in relation to a
felony violation enumerated in Title 18, United States Code,
Section 1028A(c), to wit, SMITH used identifying information
2
belonging to other persons to work with others to submit fraudulent
loan applications to the SBA in furtherance of the offenses charged
in Counts One and Two of this Complaint.
(Title 18, United States Code, Sections 1028A and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
5. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
6. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”), have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
7. At all times relevant to this Complaint, DENISE GANT,
EBONY SIMON, PHYA SCOTT, PRISCILLA JACKSON, SHARON CHARLES,
YOLANDA LAWRENCE, YOLANDA RATCLIFF, and ZHANE RATCLIFF, the
defendants (together, the “Applying Defendants”), were employed by
various New York City and New York State agencies, and one non-
profit organization. Specifically, GANT, SIMON, SCOTT, YOLANDA
RATCLIFF, and ZHANE RATCLIFF were employees of the New York City
Police Department (“NYPD”), LAWRENCE was an employee of the New
York City Human Resources Administration (“NYC HRA”), and JACKSON
was an employee of the Metropolitan Transportation Authority
3
(“MTA”). CHARLES worked as a director at a non-profit organization
based in New York.
8. As set forth below, between at least June 2020 and at
least May 2021, the defendants engaged in a scheme to defraud the
SBA and enrich themselves. RODNEY SMITH, the defendant, conspired
with the eight Applying Defendants to submit fraudulent loan
applications to the EIDL Program on behalf of the Applying
Defendants (together, the “Fraudulent Applications”). The
Fraudulent Applications contained materially false representations
about the Applying Defendants’ purported businesses. Fraudulent
Applications were frequently similar to each other, in terms of
the numbers of employees, amounts of revenue, and types of
businesses falsely claimed in the applications. Based on the
Fraudulent Applications, the SBA issued EIDLs to each of the
Applying Defendants ranging from approximately $52,000 to
approximately $60,000. In certain instances, the Applying
Defendants communicated with SMITH before the Fraudulent
Applications were submitted. In addition, after obtaining their
loans, certain Applying Defendants transferred approximately
$5,000 of their fraudulently obtained money to co-conspirators,
including SMITH. In addition, SMITH’s involvement in this scheme
was not limited to the Fraudulent Applications; SMITH conspired to
create at least 95 total EIDL applications suspected to be
fraudulent, on behalf of numerous people including, but not limited
to, the Applying Defendants.
The SBA’s EIDL Program
9. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. As relevant here, this
assistance includes making direct loans to applicants through the
EIDL program.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act expanded the
SBA’s EIDL program, which provided small businesses with low-
interest loans of up to $2 million prior to in or about May 2020,
4
and up to $150,000 between in or about May 2020 and in or about
December 2021, in order to provide vital economic support to help
overcome the loss of revenue small businesses experienced due to
COVID-19. These loans were made directly by the SBA.
c. To qualify for an EIDL under the CARES Act, an
applicant had to have suffered “substantial economic injury” from
COVID-19, based on an actual economic injury determined by the
SBA. EIDLs could only be used for certain specified purposes, such
as for payroll and other similar costs, increased costs due to
supply chain interruption, to pay obligations that could not be
met due to revenue loss, and for other similar uses.
d. The CARES Act also permitted applications to
request an advance of up to $10,000 to pay allowable working
capital needs. Advances were expected to be paid by the SBA within
three days of the submission of an EIDL application to the SBA,
provided the application contained a self-certification under
penalty of perjury of the applicant’s eligibility for an EIDL.
e. Individuals were permitted to submit EIDL
applications electronically through the SBA’s website, which
recorded various information about the application and applicant.
Applicants received email notifications at various points in the
application process, including, if applicable, when the SBA
extended an offer and when the SBA approved the loan.
The Scheme to Submit Fraudulent Applications
10. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. For each EIDL application submitted, the SBA
collects the IP address from which the application was submitted.
b. SBA records show that from on or about June 30,
2020, through May 18, 2021, approximately 95 EIDL applications
were created from a particular IP address (the “Common IP
Address”), including each of the Fraudulent Applications. In
total, 23 of the 95 EIDL applications created from the Common IP
Address were funded by the SBA for a total of more than $1.2
million.
c. The Fraudulent Applications are listed below, along
with the business category, gross revenues, and number of employees
listed on each respective application:
5
Business Owner
Business Gross Number of Date and Time Loan
and Primary
Category Revenue Employees Application Created
Contact1
Eating &
Denise Gant $157,000.00 11 8/7/2020 1:19 p.m.
Drinking
Hair & Nail
Ebony Simon $152,000.00 10 8/7/2020 7:22 p.m.
Salon
Hair & Nail
Phya Scott $152,000.00 11 7/29/2020 11:13 p.m.
Salon
Educational
Priscilla Jackson $168,000.00 12 7/31/2020 5:05 p.m.
Services
Health
Sharon Charles $151,300.00 5 8/4/2020 1:10 p.m.
Services
Hair & Nail
Yolanda Lawrence $187,000.00 9 6/30/2020 8:17 p.m.
Salon
Hair & Nail
Yolanda Ratcliff $160,000.00 10 7/29/2020 5:44 p.m.
Salon
Hair & Nail
Zhane Ratcliff $154,000.00 11 7/29/2020 6:01 p.m.
Salon
11. Based on my review of records obtained from internet
service providers and phone carriers, I have learned, among other
things, that from approximately February 22, 2020, to at least
approximately January 21, 2022, the Common IP Address was assigned
to “Rodney Smith” at a certain address in Brooklyn, New York (the
“SMITH Address”), and the same customer account listed a particular
phone number ending in 5186 (the “SMITH Phone number”) and a
particular email address (the “SMITH Email Address”). The SMITH
Phone number has been assigned to “Rodney Smith” since
approximately 2017. The SMITH Email Address was created in or about
2004 and is subscribed to in the name of “Remy Jones,” which I
believe, based on my review of criminal history records, is an
alias associated with RODNEY SMITH, the defendant.
12. Based on my review of bank records and records from Cash
App, a mobile payment application, I have learned, among other
things, the following:
1 Based on my review of records received from the SBA, I have
learned, among other things, that each of the Fraudulent
Applications listed a “primary contact” name and a “company legal
name.” Each of the Fraudulent Applications listed the same name in
both fields. For example, the same application that listed “Yolanda
Ratcliff” as the primary contact also listed “Yolanda Ratcliff” as
the company legal name.
6
a. On or about August 5, 2020, ZHANE RATCLIFF, the
defendant, sent approximately $5,000 to YOLANDA RATCLIFF, the
defendant, with the message “Loan.” As set forth below, ZHANE
RATCLIFF received her EIDL approximately one day earlier, on or
about August 4, 2020.
b. On or about August 7, 2020, PRISCILLA JACKSON, the
defendant, sent approximately $5,000 to YOLANDA RATCLIFF with the
message “Thank you so muc[h].” As set forth below, JACKSON received
her EIDL approximately one day earlier, on or about August 6, 2020.
c. On or about August 7, 2020, August 19, 2020, and
August 21, 2020, PHYA SCOTT, the defendant, sent three sums of
money totaling $10,000 to RODNEY SMITH, the defendant.2 Each
transfer was accompanied with the message “business.” As set forth
above, SCOTT received her EIDL loan on or about August 4, 2020.3
d. On or about August 10, 2020, YOLANDA RATCLIFF sent
three sums of money totaling $5,000 to SMITH. As set forth below,
YOLANDA RATCLIFF received her EIDL approximately nine days
earlier, on or about August 1, 2020.
e. Between on or about August 12, 2020, and on or about
August 14, 2020, DENISE GANT, the defendant, transferred three
sums of money totaling approximately $5,000 to YOLANDA RATCLIFF.
2 Records from Cash App show that on or about August 7, 2020, there
was a declined transfer from PHYA SCOTT, the defendant, to RODNEY
SMITH, the defendant, for $5,000 with the message “business
advisor.”
3 The financial transactions described in Paragraphs 12(a)-(b)
above are reflected in bank statements for PRISCILLA JACKSON and
ZHANE RATCLIFF, the defendants, respectively. The financial
transaction described in Paragraph 12(c) above is reflected in
records for Cash App accounts believed to be used by PHYA SCOTT,
the defendant, and SMITH, based on the name and date of birth for
each Cash App Account matching those for SCOTT and SMITH,
respectively, in their EIDL applications. Records for the SMITH
Cash App show that on or about February 26, 2022, after the
financial transactions described herein and in response to
receiving information from SMITH, Cash App determined that SMITH’s
Cash App account had been compromised, and Cash App secured the
account for SMITH. The financial transaction described in
Paragraph 12(d) above is reflected in records for Cash App accounts
believed to be used by YOLANDA RATCLIFF and RODNEY SMITH, the
defendants, based on the name and date of birth for each Cash App
Account matching those for YOLANDA RATCLIFF and SMITH,
respectively, in their EIDL applications.
7
As set forth below, GANT received her EIDL approximately one day
earlier, on August 11, 2020.
13. Based on my review of SBA records, bank records, phone
carrier records,4 and my review of another law enforcement
officer’s analysis of those records, I have learned, among other
things, that several of the defendants were in regular contact
around the dates on which their Fraudulent Applications were
submitted, which suggests that they were working together to submit
the Fraudulent Applications. In particular, I have learned the
following:
a. On or about July 29, 2020, i.e., the day that
applications for YOLANDA RATCLIFF, ZHANE RATCLIFF, and PHYA SCOTT,
the defendants, were submitted, YOLANDA RATCLIFF and SCOTT had
telephone contact approximately 24 times. Prior to that day,
YOLANDA RATCLIFF and SCOTT had telephone contact approximately 7
times that month, approximately 4 times in June 2020, and
approximately 16 times in May 2020. Also on July 29, 2020, SCOTT
and ZHANE RATCLIFF had telephone contact once. The same day, SCOTT
had telephone contact with SMITH approximately three times. SCOTT
had not previously had telephone contact with SMITH. SCOTT also
had telephone contact with SMITH once on July 30, 2020 and multiple
times in August 2020, including once on August 7, 2020, i.e., one
of the days that SCOTT sent money to SMITH, as set forth below.
b. On or about the same day, July 29, 2020, YOLANDA
RATCLIFF had telephone contact with SMITH approximately 83 times,
approximately 28 times the next day, and approximately 41 times
the following day. Prior to that, YOLANDA RATCLIFF and SMITH had
telephone contact in July 2020 approximately 3 times, zero times
in June 2020, and approximately 13 times in May 2020.
c. On or about August 7, 2020, i.e., the day JACKSON
sent $5,000 to YOLANDA RATCLIFF, JACKSON had a text message
communication with RATCLIFF. Prior to that date, JACKSON’s most
recent telephone contact with Yolanda RATCLIFF was on July 25,
2020.
14. Based on my review of text messages exchanges between
RODNEY SMITH and YOLANDA RATCLIFF and between SMITH and PHYA SCOTT,
the defendants, obtained pursuant to a judicially authorized
4 The phone numbers associated with YOLANDA RATCLIFF, ZHANE
RATCLIFF, PHYA SCOTT, and PRISCILLA JACKSON, the defendants, in
this paragraph were listed on each individual defendants’ EIDL
application. The phone number associated with RODNEY SMITH, the
defendant, is the SMITH Phone Number, discussed above.
8
search warrant, I have learned, among other things, that between
at least in or about July 2020 and in or about October 2020, SMITH,
YOLANDA RATCLIFF, and SCOTT had several communications about
submitting EIDL applications and receiving a fee to do so. For
example:
a. On or about July 29, 2020, SMITH sent YOLANDA
RATCLIFF a message saying the following:
Name
Address
County
Phone
SSN
Name of bank
Acct
Routing
Dob
Place of birth
Email
Side job
Based on my training and experience and my involvement in this
investigation, I believe this message reflects SMITH asking
YOLANDA RATCLIFF to provide responses to this message so that he
can submit an EIDL application with this information on YOLANDA
RATCLIFF’s behalf (the “Requested Information”).
b. In response, later on the same day, YOLANDA
RATCLIFF sent messages to SMITH with the Requested Information,
for herself and ZHANE RATCLIFF. In response to the request for her
“side job,” YOLANDA RATCLIFF provided “cooking/ catering.” Later
on the same day, SMITH sent a message to YOLANDA RATCLIFF saying,
among other things, “Also I put u down for Hair n Nails, they
didn’t have the option for Cooking.” Based on my training and
experience and my involvement in this investigation, I believe
this message reflects SMITH saying he listed YOLANDA RATCLIFF’s
business category as Hair & Nail Salon on her EIDL application
instead of the description she provided, “cooking/ catering.” As
set forth herein, the EIDL application for YOLANDA RATCLIFF – along
with several of the other Fraudulent Applications – in fact listed
the business category “Hair & Nail Salon.”
c. Later on or about the same day, July 29, 2020, SMITH
sent YOLANDA RATCLIFF a message saying, “Better hit ur ppl b4 this
shit is dead, not for just anyone tho, just close Ppl." Based on
my training and experience and my involvement in this
investigation, I believe this message reflects SMITH saying that
9
YOLANDA RATCLIFF should find other individuals who will submit
EIDL applications through SMITH but, in order to avoid disclosure
that might implicate them in a crime, YOLANDA RATCLIFF should
communicate about their scheme only with people close to her, i.e.,
“just close Ppl.”
d. On or about July 29, 2020, SCOTT sent SMITH the
Requested Information for her application. SMITH asked a few follow
up questions and then told SCOTT that he was “able to put it in
tonight” and that SCOTT should “[l]ook for an Email tomorrow” and
inform SMITH when she received the email. As set forth below, SBA
records show that on or about the same day, July 29, 2020, an EIDL
application was submitted for SCOTT from the Common IP Address.
e. On or about July 31, 2020, YOLANDA RATCLIFF sent to
SMITH the Requested Information for PRISCILLA JACKSON, the
defendant, and two other individuals. Later, on or about August 5,
2020, YOLANDA RATCLIFF sent messages to SMITH saying, among other
things, “Priscilla signed hers” and “Still waiting on Priscilla
money.” On or about August 7, 2020, YOLANDA RATCLIFF sent a message
to SMITH saying, “Priscilla sent me the money ” and “I’ll give
it to you Monday.” As described above, JACKSON sent $5,000 to
YOLANDA RATCLIFF on or about August 7, 2020.
f. On or about August 5, 2020, SMITH told SCOTT that
“this is the last few days to apply for the Loan so if you [know]
anyone else interested[,] it has to happen ASAP.” The following
day, SCOTT sent the Requested Information for three more
individuals.
g. On or about August 5, 2020, SMITH sent a message to
YOLANDA RATCLIFF saying “Hey Phya sent me 2 ppl so u got PC coming
from them if it goes thru.” Based on my training and experience
and my involvement in this investigation, I believe this message
reflects SMITH saying that SCOTT has recruited two individuals to
this scheme to submit fraudulent applications and, if the
applications are granted and the loans disbursed, YOLANDA RATCLIFF
will receive some compensation for recruiting SCOTT.
h. On or about August 7, 2020, YOLANDA RATCLIFF sent
to SMITH the Requested Information for DENISE GANT, the defendant.
In the message, YOLANDA RATCLIFF spelled GANT’s last name as
“Gant.” Later the same day, YOLANDA RATCLIFF sent a message to
SMITH saying, “You spelled Denise last name wrong” and “She’s
afraid to call.” As set forth below, the EIDL application for GANT
in fact incorrectly listed her last name as “Grant.” SMITH
responded saying, “I don’t think the spelling will be a problem
10
bcuz her SS# should tell it all.” Soon afterwards, YOLANDA RATCLIFF
responded saying “Denise got approved and signed.”
i. On or about August 7, 2020, YOLANDA RATCLIFF sent
to SMITH the Requested Information for EBONY SIMON, the defendant.
The next day, on or about August 8, 2020, YOLANDA RATCLIFF sent a
message to SMITH saying, “Ebony is approved and signed.” On or
about August 11, 2020, YOLANDA RATCLIFF sent a message to Smith
saying, “Ebony want you to meet with her today.”
j. On or about August 7, 2020, SMITH asked SCOTT if
she was going to give him the “5k” that day. Later that same day,
SMITH said he “got it,” which, I believe, means the requested
payment. As described above, SCOTT sent SMITH payment on or about
August 7, 2020.
k. On or about August 9, 2020, SMITH sent a message to
YOLANDA RATCLIFF suggesting that she take a bigger take of the
fraud proceeds than what they had previously agreed, which appears
to be $500. Specifically, SMITH wrote, “why don’t u start telling
ppl that it’s 6k and u take the 1 off top plus the $500 .”5
15. Based on my review of records received from the SBA, I
have learned, among other things, that the SBA required that each
applicant disclose whether anyone assisted them in preparing their
application, and whether or not that person was paid a fee. None
of the Applying Defendants disclosed that RODNEY SMITH, the
defendant, or anyone else assisted them in applying for an EIDL.
16. As discussed in greater detail below, many of the loans
disbursed by the SBA based on the Fraudulent Applications were
sent via Automated Clearing House (“ACH”) transfer to a certain
5
Based on my review of the text message communications, which are
discussed in greater detail above, I believe there may be others
involved in the scheme to submit the Fraudulent Applications beyond
the defendants charged herein. For example, RODNEY SMITH, the
defendant, references “my ppl” offering a particular amount of
money for people being recruited into the scheme, and YOLANDA
RATCLIFF, the defendant, references SMITH sending identifying
information for another person to “[his] boy so he can get
started,” both of which may be references to others being involved
in submitting the Fraudulent Applications and others from the
Common IP Address. As also discussed above, all of the Fraudulent
Applications, as well as numerous other EIDL applications
submitted on behalf of others, were submitted to the SBA from the
Common IP Address.
11
financial institution (“Financial Institution-1”).6 Based on my
communications with employees of Financial Institution-1, I have
learned, among other things, that Financial Institution-1 is
headquartered in Manhattan, New York, and that during the relevant
period, when ACH transfers were sent to accounts at Financial
Institution-1, Financial Institution-1’s process of reviewing
batches of those ACH transfers and disbursing them into the
destination accounts involved the transmission of wire
communications between Manhattan and servers located in New
Jersey.
17. As set forth above, the Fraudulent Applications were
submitted from the Common IP Address, which subscriber records
show was associated with the SMITH Address in Brooklyn, New York.
Based on my communications with an employee of the SBA, I have
learned, among other things, that the SBA received electronic loan
applications on one of three different servers, which are located
in Virginia, Washington, and Iowa. Based on my training and
experience, electronic communications between Brooklyn and any of
the states where the SBA maintained relevant servers would have
traveled through or over the waters of the Eastern District of New
York, which are within the area comprising this judicial district.
DENISE GANT’s Fraudulent EIDL Application
18. Based on my review of records received from the SBA,
email provider records, and phone carrier records, I have learned,
among other things, the following:
a. On or about August 7, 2020, an EIDL application was
submitted to the SBA, seeking an EIDL for a sole proprietorship
under the name “Denise A Grant” (the “GANT EIDL Application”). As
set forth above, in a text message exchange, RODNEY SMITH, the
defendant, acknowledged misspelling GANT’s name on her EIDL
application.
b. The GANT EIDL Application contained a certification
under penalty of perjury that its contents were “true and correct.”
6 Based on my review of publicly available information, I have
learned that Financial Institution-1 is a credit union for which
only certain categories of individuals are eligible to open
accounts, including but not limited to employees of the City of
New York, and Financial Institution-1 required proof of
eligibility in order to open an account.
12
c. The GANT EIDL Application claimed that the “Denise
A Grant” sole proprietorship was 100% owned by DENISE GANT, the
defendant.
d. The GANT EIDL Application claimed, among other
things, that the “Denise A Grant” sole proprietorship was
established on November 21, 2018, was an “Eating & Drinking Places”
and “Catering” business, had 11 employees, earned $157,000 in gross
revenues during the 12-month period ending January 31, 2020, and
incurred $52,000 in cost of goods sold during the 12-month period
ending January 31, 2020.
e. The GANT EIDL Application directed that the loan
payment be sent to a certain account in GANT’s name (the “GANT
Checking Account”) at a certain financial institution (“Financial
Institution-2”).
f. The GANT EIDL Application listed a certain phone
number ending in 1313 as GANT’s contact number (the “GANT Phone
Number”). Phone carrier records show that the GANT Phone Number
has been assigned to “Denise A Gant” since approximately April
2019.
g. The GANT EIDL Application listed a certain email
address (the “GANT Email Address”). Email provider records show
that the GANT Email Address was created in or about 2010 and is
subscribed to in the name of GANT. Email provider records show
that GANT listed the GANT Phone Number as the recovery phone number
for the GANT Email Address.
h. The GANT EIDL Application was submitted from the
Common IP Address.
i. On or about August 8, 2020, the SBA approved a
$52,500 loan based on the GANT EIDL Application.7
7 Based on my review of text message exchanges, SBA records, and
criminal history records, I have learned, among other things, that
YOLANDA RATCLIFF, the defendant, provided to RODNEY SMITH, the
defendant, a particular social security number for DENISE GANT,
the defendant (the “GANT Social Security Number”). The GANT Social
Security Number matches the social security number for GANT listed
in criminal history records for GANT and records for the GANT Bank
Account. On the Gant EIDL Application, SMITH listed the GANT Social
Security Number as the “EIN/SSN for Sole Proprietorship.” However,
SMITH separately and incorrectly included one wrong digit in the
social security number when listing GANT’s personal information as
the owner of the business applying for the loan.
13
19. Based on my review of records from Financial
Institution-2, I have learned, among other things, the following:
a. On or about April 6, 2010, DENISE GANT, the
defendant, opened the GANT Checking Account.
b. The GANT Checking Account regularly received
payments labeled “payroll” from the City of New York. Statements
for the GANT Checking Account reflect that GANT’s principal source
of earnings during the 12-month period ending January 31, 2020 was
her job with the City of New York. Statements for the GANT Checking
Account do not reflect any other significant, regular deposits
during the 12-month period ending January 31, 2020, that are
consistent with the operation of a sole proprietorship that
purportedly earned approximately $157,000 in revenue during that
period.
c. On or about August 11, 2020, the GANT Checking
Account received a payment from the SBA in the amount of $52,400.8
Immediately before receiving this payment, the balance in the GANT
Checking Account was approximately $10,223.56. As set forth above,
soon after receiving her EIDL disbursement, GANT transferred
approximately $5,000 to YOLANDA RATCLIFF, the defendant. On or
about August 12, 2020, GANT transferred approximately $44,000 to
a savings account she controlled at Financial Institution-2.
20. Based on my review of tax filings for DENISE GANT, the
defendant, I know, among other things, that for tax years 2019,
2020, and 2021, the only income GANT reported to the Internal
Revenue Service (“IRS”) was her income from the City of New York.
GANT did not report any income from, or file a Schedule C, Profit
or Loss from Business, for, any sole proprietorship in her name.
21. Based on my review of records from the New York State
Department of Labor (“NYS DOL”), I have learned that the NYS DOL
does not have records that DENISE GANT, the defendant, or any sole
proprietorship using her name in New York State, had any employees
or paid any wages to employees during 2019 or 2020, contrary to
GANT’s claim in the GANT EIDL Application that her business
employed 11 people.
8 Based on my review of information from the SBA’s website about
the EIDL program, I know that for EIDLs greater than $25,000, the
SBA charged a one-time $100 fee in order to file a lien on the
borrower’s business assets.
14
EBONY SIMON’s Fraudulent EIDL Application
22. Based on my review of records received from the SBA and
an email provider, I have learned, among other things, the
following:
a. On or about August 7, 2020, an EIDL application was
submitted to the SBA, seeking an EIDL for a sole proprietorship in
the name of EBONY SIMON, the defendant (the “SIMON EIDL
Application”).
b. The SIMON EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The SIMON EIDL Application claimed that the sole
proprietorship was 100% owned by SIMON.
d. The SIMON EIDL Application claimed, among other
things, that the sole proprietorship was established on October
22, 2018, was a “Hair & Nail Salon,” had 10 employees, earned
$152,000 in gross revenues during the 12-month period ending
January 31, 2020, and incurred $45,000 in cost of goods sold during
the 12-month period ending January 31, 2020.
e. The SIMON EIDL Application directed that the loan
payment be sent to a certain account in SIMON’s name (the “SIMON
Checking Account”) at Financial Institution-1.
f. The SIMON EIDL Application listed a certain email
address (the “SIMON Email Address”). Email provider records show
that the SIMON Email Address was created in or about 2011 and is
subscribed to in the name of SIMON.
g. The SIMON EIDL Application was submitted from the
Common IP Address.
h. On or about August 9, 2020, the SBA approved the
SIMON EIDL Application, and issued a payment to the SIMON Checking
Account in the amount of $53,500.
23. Based on my review of records from Financial
Institution-1, I have learned, among other things, the following:
a. In or about March 2013, EBONY SIMON, the defendant,
opened the SIMON Checking Account. Financial Institution-1’s files
for the SIMON Checking Account include a copy of SIMON’s New York
State driver’s license.
15
b. The SIMON Checking Account regularly received
payments labeled “payroll” from the City of New York.
c. On or about August 11, 2020, the SIMON Checking
Account received an ACH transfer from the SBA in the amount of
$53,400.00. Immediately before receiving this transfer, the
balance in the SIMON Checking Account was $74.78.
d. In the period soon after the EIDL was disbursed,
bank records show that, on or about August 11, 2020, SIMON withdrew
$10,000 in cash; on or about September 9, 2020, SIMON made online
purchases from a luxury goods retailer totaling approximately
$3,450; and, on or about September 9, 2020, SIMON purchased a
$16,000 money order made out to herself and made a $5,000 cash
withdrawal, among other purchases.
e. Statements for the SIMON Checking Account reflect
that SIMON’s principal source of earnings during the 12-month
period ending January 31, 2020 was her job with the NYPD.
Statements for the SIMON Checking Account do not reflect any other
significant deposits during the 12-month period ending January 31,
2020, and are therefore not consistent with the operation of a
sole proprietorship that purportedly earned approximately $152,000
in revenue during that period.
24. Based on my review of records from the New York
Department of State and publicly available information, I have
learned, among other things, the following:
a. In New York state, an individual is required to
obtain a license from the New York Department of State to work on
nail appearance (a nail specialty license); practice nail or hair
styling, waxing, and beauty treatment (a cosmetology license); or
work or train as a barber (a master or apprentice barber license).
b. EBONY SIMON, the defendant, is not licensed to work
as a barber, cosmetologist, or nail specialist and was not during
the relevant period, contrary to her representation on the SIMON
EIDL Application that she was the sole owner of a profitable Hair
& Nail Salon.
25. Based on my review of tax filings for EBONY SIMON, the
defendant, I know, among other things, that SIMON filed a tax
return for tax year 2019 but did not file for tax years 2020 or
2021. For tax year 2019, which covered much of the period when
SIMON claimed that her sole proprietorship earned $152,000, SIMON
claimed only $33,711 in income, which is consistent with the wages
that NYPD reported paying her in that year. SIMON did not report
16
any income from any sole proprietorship in her name in 2019, and
did not file any separate business return for a sole proprietorship
in her name for 2019, 2020, or 2021.
26. Based on my review of records from the NYS DOL, I have
learned that the NYS DOL does not have records that EBONY SIMON,
the defendant, or any sole proprietorship using her name in New
York State, had any employees or paid any wages to employees during
2019 or 2020, contrary to SIMON’s claim in the SIMON EIDL
Application that her business employed 10 people.
PHYA SCOTT’s Fraudulent EIDL Application
27. Based on my review of records received from the SBA and
an email provider, I have learned, among other things, the
following:
a. On or about July 29, 2020, an EIDL application was
submitted to the SBA, seeking an EIDL for a sole proprietorship in
the name of PHYA SCOTT, the defendant (the “SCOTT EIDL
Application”).
b. The SCOTT EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The SCOTT EIDL Application claimed that the sole
proprietorship was 100% owned by SCOTT.
d. The SCOTT EIDL Application claimed, among other
things, that the sole proprietorship was established on March 11,
2018, was a “Hair & Nail Salon,”9 had 11 employees, earned $152,000
in gross revenues during the 12-month period ending January 31,
2020, and incurred $41,000 in cost of goods sold during the 12-
month period ending January 31, 2020.
e. The SCOTT EIDL Application directed that the loan
payment be sent to a certain account in the name of SCOTT (the
“SCOTT Checking Account”) at a certain financial institution
(“Financial Institution-3”).10
9 Based on my review of records from the New York Department of
State, I have learned that PHYA SCOTT, the defendant, was licensed
by the State of New York as a cosmetologist from at least 1998
through the present.
10 The bank account number listed on the SCOTT EIDL Application is
missing one digit from the correct bank account number for the
17
f. The SCOTT EIDL Application listed a certain email
address (the “SCOTT Email Address”). Email provider records show
that the SCOTT Email Address was created in or about 2014 and is
subscribed to in the name of SCOTT.
g. The SCOTT EIDL Application was submitted from the
Common IP Address.
h. On or about August 1, 2020, the SBA approved the
SCOTT EIDL Application, and issued a payment to the SCOTT Checking
Account in the amount of $55,500.
28. Based on my review of records from Financial
Institution-3, I have learned, among other things, the following:
a. In or about January 2007, PHYA SCOTT, the
defendant, opened the SCOTT Checking Account. Financial
Institution-3’s files for the SCOTT Checking Account list SCOTT’s
employer as the “NYC POLICE DEPT” and list the same phone number,
social security number, and date of birth listed on the SCOTT EIDL
Application.
b. The SCOTT Checking Account regularly received
payments labeled “payroll” from the City of New York.
c. On or about August 4, 2020, the SCOTT Checking
Account received a payment from the SBA in the amount of $55,400.
Immediately before receiving this transfer, the balance in the
SCOTT Checking Account was $1,125.91.
d. In the period soon after the EIDL was disbursed,
bank records show transfers totaling $10,000 to RODNEY SMITH, the
defendant, as set forth above.
e. Statements for the SCOTT Checking Account reflect
that SCOTT’s principal source of earnings during the 12-month
period ending January 31, 2020 was her job with the NYPD.
Statements for the SCOTT Checking Account do not reflect any other
significant deposits during the 12-month period ending January 31,
SCOTT Checking Account at Financial Institution-3. However, given
that, as discussed below, the EIDL was ultimately disbursed to the
SCOTT Checking Account and the identifying information for the
SCOTT EIDL Application and the SCOTT Checking Account match, I
believe, based on my training and experience and my participation
in this investigation, that SCOTT may have corrected this error
after the application was submitted or otherwise transmitted the
correct information to SBA.
18
2020, and are therefore not consistent with the operation of a
sole proprietorship that purportedly earned approximately $152,000
in revenue during that period.
29. Based on my review of tax filings for PHYA SCOTT, the
defendant, I know, among other things, that SCOTT filed a personal
tax return for tax year 2019, but did not file a personal tax
return for tax year 2020 or 2021, and did not file any separate
business return for a sole proprietorship in her name for 2019,
2020, or 2021. For tax year 2019, SCOTT reported to the IRS her
salary from the NYPD and filed a Schedule C for a sole
proprietorship in her own name. For the sole proprietorship, SCOTT
listed the “principal business or profession” as “CONSULTANT.” For
this business, SCOTT reported gross receipts or sales of $6,117
and expenses of $41,754 for a total loss of $35,637. These sales
are far short of the gross receipts of $152,000 that she reported
on the SCOTT EIDL Application. SCOTT did not file any other
Schedule C in connection with the sole proprietorship in her own
name.
30. Based on my review of records from the NYS DOL, I have
learned that the NYS DOL does not have records that PHYA SCOTT,
the defendant, or any sole proprietorship using her name in New
York State, had any employees or paid any wages to employees during
2019 or 2020, contrary to SCOTT’s claim in the SCOTT EIDL
Application that her business employed 11 people.
PRISCILLA JACKSON’s Fraudulent EIDL Application
31. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about July 31, 2020, an EIDL application was
submitted to the SBA for a sole proprietorship in the name of
PRISCILLA JACKSON, the defendant (the “JACKSON EIDL Application”).
b. The JACKSON EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The JACKSON EIDL Application claimed that her sole
proprietorship was 100% owned by JACKSON.
d. The JACKSON EIDL Application claimed, among other
things, that her sole proprietorship was established on May 2,
2018, was in the business of “Educational Services - Daycare,” had
12 employees, earned $168,000 in gross revenues during the 12-
19
month period ending January 31, 2020, and incurred $48,000 in cost
of goods sold during the 12-month period ending January 31, 2020.
e. The JACKSON EIDL Application was submitted from the
Common IP Address.
f. The JACKSON EIDL Application directed that the loan
payment be sent to a certain account in JACKSON’s name (the
“JACKSON Bank Account”) at Financial Institution-1.
g. The JACKSON EIDL Application listed a certain email
address (the “JACKSON Email Address”), which, based on my review
of subscriber records, I know was subscribed to JACKSON and created
in 2008.
h. On or about August 4, 2020, the SBA emailed JACKSON
at the JACKSON Email Address and requested that JACKSON sign her
loan documents. That same day, JACKSON, using the JACKSON Email
Address, replied that she would sign her loan documents. That same
day, JACKSON signed her loan documents.
i. On or about August 4, 2020, the SBA approved a
$60,000 loan based on the JACKSON EIDL Application.
32. Based on my review of records from Financial
Institution-1, I have learned, among other things, the following:
a. The JACKSON Bank Account regularly received
payments labeled “DIR DEP” [i.e. “direct deposit”] from the MTA
Bus Company.
b. On or about August 6, 2020, the JACKSON Bank Account
received an ACH transfer from the SBA in the amount of $59,900.
Immediately before receiving this transfer, the balance in the
JACKSON Bank Account was approximately $5,016.87. As discussed
above, JACKSON transferred $5,000 to YOLANDA RATCLIFF the day after
receiving her loan.
33. Based on my review of tax filings for PRISCILLA JACKSON,
the defendant, I have learned, among other things, the following:
a. In tax year 2019, JACKSON reported adjusted gross
income of $51,753, which came from her wages from the MTA.
b. In tax year 2019, JACKSON did not file a Schedule
C in connection with the sole proprietorship in her own name.
20
34. Based on my review of records from the NYS DOL, I have
learned that the NYS DOL does not have records that PRISCILLA
JACKSON, the defendant, had any employees or paid any wages to
employees during 2019 or 2020, contrary to JACKSON’s claim in the
JACKSON EIDL Application that her business employed 12 people.
35. Based on my review of the website of the New York State
Office of Children and Family Services (the “OCFS”), I have
learned, among other things, that any child day care program
planning to serve three or more children for more than three hours
a day on a regular basis must obtain a license or registration.
36. Based on my review of records from the OCFS, I have
learned that the OCFS does not have any records for PRISCILLA
JACKSON, the defendant, from January 2020 through the present.11
SHARON CHARLES’s Fraudulent EIDL Application
37. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about August 4, 2020, an EIDL application was
submitted to the SBA for a sole proprietorship in the name of
SHARON CHARLES, the defendant (the “CHARLES EIDL Application”).
b. The CHARLES EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The CHARLES EIDL Application claimed that her sole
proprietorship was 100% owned by CHARLES.
d. The CHARLES EIDL Application claimed, among other
things, that her sole proprietorship was established on January
25, 2017, was in the business of “Health Services,” had 5
employees, earned $151,300 in gross revenues during the 12-month
period ending January 31, 2020, and incurred $52,500 in cost of
goods sold during the 12-month period ending January 31, 2020.
e. The CHARLES EIDL Application was submitted from the
Common IP Address.
11Based on my review of records from a law enforcement database,
I have learned that PRISCILLA JACKSON, the defendant, applied to
the OCFS for a child day care license in 2014.
21
f. The CHARLES EIDL Application directed that the loan
payment be sent to a certain account in CHARLES’s name (the
“CHARLES Bank Account”) at Financial Institution-1.
g. The CHARLES EIDL Application listed a certain email
address (the “CHARLES Email Address”), which, based on my review
of subscriber records, I know was subscribed to “S CH” and created
in 2016. The CHARLES Email Address was also used to open the
CHARLES Bank Account in 2018. Based on the foregoing, I believe
the CHARLES Email Address belongs to CHARLES.
h. On or about August 6, 2020, the SBA approved a
$49,400 loan based on the CHARLES EIDL Application.
38. Based on my review of records from Financial
Institution-1, I have learned, among other things, the following:
a. On or about August 7, 2020, the CHARLES Bank Account
received an ACH transfer from the SBA in the amount of $49,300.
Immediately before receiving this transfer, the balance in the
CHARLES Bank Account was approximately $176.13. On or about August
12, 2020, CHARLES withdrew $5,000 in cash.
b. Statements for the CHARLES Bank Account reflect
that, during 2019, CHARLES received much less than $151,300 in
total deposits, and that a significant majority of the deposits
were bimonthly payments of $150. These deposits are therefore
inconsistent with the operation of a sole proprietorship that
earned approximately $151,300 in gross revenues.
39. Based on my review of tax filings for SHARON CHARLES,
the defendant, I have learned, among other things, the following:
a. In tax year 2019, CHARLES reported adjusted gross
income of $94,280, which primarily came from her wages from the
Fund for the City of New York.
b. In tax year 2019, CHARLES did not file a Schedule
C in connection with a sole proprietorship in her own name.12
12In tax year 2019, SHARON CHARLES, the defendant, filed a Schedule
C form for the “consulting” business Sharon Charles-Hewitt
Consulting LLC. CHARLES indicated that this business earned $4,800
in gross income and had $2,861 in total expenses. On or about July
17, 2020, CHARLES also submitted to the SBA an EIDL application
for Sharon Charles-Hewitt Consulting Business. On or about
February 12, 2021, CHARLES cancelled the loan application.
22
40. Based on my review of records from the NYS DOL, I have
learned that the NYS DOL does not have records that SHARON CHARLES,
the defendant, had any employees or paid any wages to employees
during 2019 or 2020, contrary to CHARLES’s claim in the CHARLES
EIDL Application that her business employed 5 people.
YOLANDA LAWRENCE’s Fraudulent EIDL Application
41. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about June 30, 2020, an EIDL application was
submitted to the SBA for a sole proprietorship in the name of
YOLANDA LAWRENCE, the defendant (the “LAWRENCE EIDL Application”).
b. The LAWRENCE EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The LAWRENCE EIDL Application claimed that her sole
proprietorship was 100% owned by LAWRENCE.
d. The LAWRENCE EIDL Application claimed, among other
things, that her sole proprietorship was established on April 10,
2012, was in the business of “Personal Services – Hair & Nail
Salon,” had 9 employees, earned $187,000 in gross revenues during
the 12-month period ending January 31, 2020, and incurred $59,500
in cost of goods sold during the 12-month period ending January
31, 2020.
e. The LAWRENCE EIDL Application was submitted from
the Common IP Address.
f. The LAWRENCE EIDL Application directed that the
loan payment be sent to a certain account in LAWRENCE’s name
(“LAWRENCE Bank Account-1”) at a certain financial institution
(“Financial Institution-4”).
g. On or about July 1, 2020, LAWRENCE digitally signed
the loan application associated with the LAWRENCE EIDL Application
from a certain IP address beginning with the numbers “47” (the “47
IP Address”).
h. The LAWRENCE EIDL Application listed a certain
email address (“LAWRENCE Email Address-1”), which, based on my
review of subscriber records, I know was subscribed to LAWRENCE
and created in 2009. The subscriber information for LAWRENCE Email
Address-1 also listed the following: (i) a recovery phone number
23
which was also listed on the LAWRENCE EIDL Application (the
“LAWRENCE Phone Number”), (ii) dates on which LAWRENCE Email
Address-1 was accessed from the 47 IP Address, and (iii) a recovery
email address (“LAWRENCE Email Address-2”).
i. On or about July 1, 2020, the SBA approved a $9,000
advance on the LAWRENCE EIDL Application and a $54,800 loan based
on the LAWRENCE EIDL Application.
42. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about January 26, 2021, YOLANDA LAWRENCE, the
defendant, using the 47 IP Address, submitted an EIDL application
to the SBA for a sole proprietorship in the name of Beautiful Are
the Gifts (the “Beautiful Are the Gifts EIDL Application”). The
Beautiful Are the Gifts EIDL Application contained a certification
under penalty of perjury that its contents were “true and correct.”
b. The Beautiful Are the Gifts EIDL Application
claimed that the sole proprietorship was 100% owned by LAWRENCE.
The Beautiful Are the Gifts EIDL Application claimed, among other
things, that the sole proprietorship was established on April 1,
2008, was in the business of “Manufacturing,” had 3 employees,
earned $51,000 in gross revenues during the 12-month period ending
January 31, 2020, and incurred $36,000 in cost of goods sold during
the 12-month period ending January 31, 2020.
c. The Beautiful Are the Gifts EIDL Application
directed that the loan payment be sent to LAWRENCE Bank Account-
1. The Beautiful Are the Gifts EIDL Application listed LAWRENCE
Email Address-1.
d. The SBA denied the Beautiful Are the Gifts EIDL
Application.
e. On or about January 29, 2021, YOLANDA LAWRENCE, the
defendant, using the 47 IP Address, submitted an EIDL application
to the SBA for a sole proprietorship in the name of Lady Braids
(the “Lady Braids EIDL Application”). The Lady Braids EIDL
Application contained a certification under penalty of perjury
that its contents were “true and correct.”
f. The Lady Braids EIDL Application claimed that the
sole proprietorship was 100% owned by LAWRENCE.
24
g. The Lady Braids EIDL Application claimed, among
other things, that the sole proprietorship was established on April
21, 2006, was in the business of “Personal Services – Hair & Nail
Salon,” had one employee, earned $30,000 in gross revenues during
the 12-month period ending January 31, 2020, and incurred $21,500
in cost of goods sold during the 12-month period ending January
31, 2020.
h. The Lady Braids Application directed that the loan
payment be sent to a certain bank account in LAWRENCE’s name which
also listed LAWRENCE Email Address-2 (the “LAWRENCE Bank Account-
2”) at Financial Institution-1. The Lady Braids Application also
listed LAWRENCE Email Address-2.
i. The SBA denied the Lady Braids EIDL Application.
43. Based on my review of records from Apple for an Apple
iCloud account associated with LAWRENCE Email Address-1 and the
LAWRENCE Phone Number, I know that the iCloud account associated
with LAWRENCE Email Address-1 was accessed numerous times from the
47 IP Address.
44. Based on my review of records from Cash App, I have
learned, in substance and in part, that a Cash App account for
YOLANDA LAWRENCE, the defendant, which lists LAWRENCE’s date of
birth, the last four digits of LAWRENCE’s social security number,
and LAWRENCE Email Address-2, was accessed from the 47 IP Address
numerous times, including on or about June 30, 2020 and in or
around January 2021.
45. Based on my review of records from Financial
Institution-4, I have learned, among other things, the following:
a. On or about July 2, 2020, LAWRENCE Bank Account-1
received payments from the SBA in the amount of $9,000 and $54,700.
b. After receiving the loan, during the rest of July
2020, LAWRENCE Bank Account-1 had withdrawals for, among other
things, $5,000 at “Brooklyn Mitsubishi,” over $1,000 at Macys,
over $1,000 at Lacoste, and over $800 at Old Navy.
46. Based on my review of tax filings for YOLANDA LAWRENCE,
the defendant, I have learned, among other things, the following:
a. In tax year 2019, LAWRENCE reported adjusted gross
income of $39,265, which came from her wages from the City of New
York.
25
b. In tax year 2019, LAWRENCE did not file a Schedule
C in connection with the sole proprietorship in her own name,
Beautiful Are the Gifts, or Lady Braids.
47. Based on my review of records from the NYS DOL, I have
learned that the NYS DOL does not have records that YOLANDA
LAWRENCE, the defendant, had any employees or paid any wages to
employees during 2019 or 2020, contrary to LAWRENCE’s claim in the
LAWRENCE EIDL Application that her business employed 9 people.
48. Based on my review of records from the New York State
Department of State, I have learned, among other things, the
following:
a. There are no filings associated with Beautiful Are
the Gifts or Lady Braids.
b. From at least January 1, 2016 through the present,
YOLANDA LAWRENCE, the defendant, was not licensed as a barber or
cosmetologist.
YOLANDA RATCLIFF’s Fraudulent EIDL Application
49. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about July 29, 2020, an EIDL application was
submitted to the SBA for a sole proprietorship in the name of
YOLANDA RATCLIFF, the defendant (the “YOLANDA RATCLIFF EIDL
Application”).
b. The YOLANDA RATCLIFF EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The YOLANDA RATCLIFF EIDL Application claimed that
her sole proprietorship was 100% owned by YOLANDA RATCLIFF.
d. The YOLANDA RATCLIFF EIDL Application claimed,
among other things, that her sole proprietorship was established
on June 6, 2018, was in the business of “Personal Services – Hair
& Nail Salon,” had 10 employees, earned $160,000 in gross revenues
during the 12-month period ending January 31, 2020, and incurred
$40,000 in cost of goods sold during the 12-month period ending
January 31, 2020.
e. The YOLANDA RATCLIFF EIDL Application was submitted
from the Common IP Address.
26
f. The YOLANDA RATCLIFF EIDL Application directed that
the loan payment be sent to a certain account in YOLANDA RATCLIFF’s
name (the “YOLANDA RATCLIFF Bank Account”) at Financial
Institution-2.
g. The YOLANDA RATCLIFF EIDL Application listed a
certain email address (the “YOLANDA RATCLIFF Email Address”),
which, based on my review of subscriber records, I know was
subscribed to YOLANDA RATCLIFF and created in 2009.
h. On or about August 1, 2020, the SBA approved a
$60,000 loan based on the YOLANDA RATCLIFF EIDL Application.
50. Based on my review of records from Financial
Institution-2, I have learned, among other things, the following:
a. On or about August 4, 2020, the YOLANDA RATCLIFF
Bank Account received a payment from the SBA in the amount of
$59,900. Immediately before receiving this transfer, the balance
in the YOLANDA RATCLIFF Bank Account was approximately $282.49.
51. Based on my review of tax filings for YOLANDA RATCLIFF,
the defendant, I have learned, among other things, the following:
a. In tax year 2019, YOLANDA RATCLIFF reported
adjusted gross income of $51,544, which came from her wages from
the City of New York.
b. In tax year 2019, YOLANDA RATCLIFF did not file a
Schedule C in connection with the sole proprietorship in her own
name.
52. Based on my review of records from the NYS DOL, I have
learned that the NYS DOL does not have records that YOLANDA
RATCLIFF, the defendant, had any employees or paid any wages to
employees during 2019 or 2020, contrary to YOLANDA RATCLIFF’s claim
in the YOLANDA RATCLIFF EIDL Application that her business employed
10 people.
53. Based on my review of records from the New York State
Department of State, I have learned, among other things, that,
from at least January 1, 2016 through the present, YOLANDA
LAWRENCE, the defendant, was not licensed as a barber or
cosmetologist.
27
ZHANE RATCLIFF’s Fraudulent EIDL Application
54. Based on my review of records received from the SBA, I
have learned, among other things, the following:
a. On or about July 29, 2020, an EIDL application was
submitted to the SBA for a sole proprietorship in the name of ZHANE
RATCLIFF, the defendant (the “ZHANE RATCLIFF EIDL Application”).
b. The ZHANE RATCLIFF EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
c. The ZHANE RATCLIFF EIDL Application claimed that
her sole proprietorship was 100% owned by ZHANE RATCLIFF.
d. The ZHANE RATCLIFF EIDL Application claimed, among
other things, that her sole proprietorship was established on
November 21, 2018, was in the business of “Personal Services –
Hair & Nail Salon,” had 11 employees, earned $154,000 in gross
revenues during the 12-month period ending January 31, 2020, and
incurred $36,000 in cost of goods sold during the 12-month period
ending January 31, 2020.
e. The ZHANE RATCLIFF EIDL Application was submitted
from the Common IP Address.
f. The ZHANE RATCLIFF EIDL Application directed that
the loan payment be sent to a certain account in ZHANE RATCLIFF’s
name (the “ZHANE RATCLIFF Bank Account”) at Financial Institution-
1.
g. The ZHANE RATCLIFF EIDL Application listed a
certain email address (the “ZHANE RATCLIFF Email Address”), which,
based on my review of subscriber records, I know was subscribed to
ZHANE RATCLIFF and created in 2013.
h. On or about August 1, 2020, the SBA approved a
$59,000 loan based on the ZHANE RATCLIFF EIDL Application.
55. Based on my review of records from Financial
Institution-1, I have learned, among other things, the following:
a. The ZHANE RATCLIFF Bank Account regularly received
payments labeled “payroll” from the City of New York.
b. On or about August 4, 2020, the ZHANE RATCLIFF Bank
Account received an ACH transfer from the SBA in the amount of
28
$58,900. Immediately before receiving this transfer, the balance
in the ZHANE RATCLIFF Bank Account was approximately $592.61.
56. Based on my review of tax filings for ZHANE RATCLIFF,
the defendant, I have learned, among other things, the following:
a. In tax year 2019, ZHANE RATCLIFF reported adjusted
gross income of $64,242.
b. In tax year 2019, ZHANE RATCLIFF did not file a
Schedule C in connection with a sole proprietorship in her own
name.
c. ZHANE RATCLIFF did not file any tax return,
including any Schedule C, for tax year 2020.
57. Based on my review of records from the NYS DOL, I have
learned that the NYS DOL does not have records that ZHANE RATCLIFF,
the defendant, had any employees or paid any wages to employees
during 2019 or 2020, contrary to ZHANE RATCLIFF’s claim in the
ZHANE RATCLIFF EIDL Application that her business employed 11
people.
58. Based on my review of records from the New York State
Department of State, I have learned, among other things, that,
from at least January 1, 2016 through the present, ZHANE RATCLIFF,
the defendant, was not licensed as a barber or cosmetologist.
WHEREFORE, deponent respectfully requests that warrants issue
for the arrest of RODNEY SMITH, DENISE GANT, EBONY SIMON, PHYA
SCOTT, PRISCILLA JACKSON, SHARON CHARLES, YOLANDA LAWRENCE,
29
YOLANDA RATCLIFF, and ZHANE RATCLIFF, the defendants, and that
they be imprisoned or bailed, as the case may be.
/s/ LaVale Jackson, with permission by SDA
_______________________________
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
___day of November 2022.
29th
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
30
Approved: _______________________________
KEDAR S. BHATIA / REBECCA T. DELL / DEREK WIKSTROM
Assistant United States Attorneys
Before: THE HONORABLE STEWART D. AARON
United States Magistrate Judge
22 MAG 9637
Southern District of New York
- - - - - - - - - - - - - - - - - - X
: SEALED COMPLAINT
UNITED STATES OF AMERICA :
: Violation of
- v. - : 18 U.S.C. §§ 1343 and 2
:
EDWIN SKEPPLE, :
: COUNTY OF OFFENSE:
Defendant. : ROCKLAND
:
- - - - - - - - - - - - - - - - - - X
SOUTHERN DISTRICT OF NEW YORK, ss.:
LAVALE JACKSON, being duly sworn, deposes and says that
he is a Special Agent with the United States Attorney’s Office for
the Southern District of New York, and charges as follows:
COUNT ONE
(Wire Fraud)
1. From in or about July 2020 up to and including in or
about August 2020, in the Southern District of New York and
elsewhere, EDWIN SKEPPLE, the defendant, knowingly and with the
intent to defraud, having devised and intending to devise a scheme
and artifice to defraud, and for obtaining money and property by
means of false and fraudulent pretenses, representations, and
promises, transmitted and caused to be transmitted by means of
wire communication in interstate and foreign commerce, writings,
signs, signals, pictures, and sounds for the purpose of executing
such scheme and artifice, to wit, SKEPPLE engaged in a scheme to
obtain funds from the United States Small Business Administration
(“SBA”) through the SBA’s Economic Injury Disaster Loan (“EIDL”)
Program, by submitting false and fraudulent loan applications.
(Title 18, United States Code, Sections 1343 and 2.)
The bases for my knowledge and for the foregoing charges
are, in part, as follows:
2. I am a Special Agent with the United States Attorney’s
Office for the Southern District of New York (“USAO-SDNY”), and
have been in that position for over eight years. Before joining
the USAO-SDNY, I was a Special Agent with the United States
Department of Labor – Office of Inspector General for more than
nine years. In both of these capacities, I have participated in
numerous criminal investigations, including investigations into
fraud and public corruption.
3. This case arises from an investigation the USAO-SDNY,
the Internal Revenue Service – Criminal Investigations (“IRS-CI”),
and the SBA’s Office of Inspector General (“SBA-OIG”), have been
conducting into public employees who submitted or caused to be
submitted fraudulent applications for SBA loans related to the
COVID-19 pandemic. I have been personally involved in that
investigation. This affidavit is based upon my personal
participation in the investigation of this matter, my
conversations with other law enforcement officers, and my
examination of reports and records. Because this affidavit is being
submitted for the limited purpose of establishing probable cause,
it does not include all the facts that I have learned during the
course of my participation in the investigation. Where the contents
of documents and the actions, statements and conversations of
others are reported herein, they are reported in substance and in
part, except where otherwise indicated.
Overview
4. At all times relevant to this Complaint, EDWIN SKEPPLE,
the defendant, was employed by the New York City Department of
Corrections (“NYC DOC”).
5. In or about July 2020, EDWIN SKEPPLE, the defendant,
engaged in a scheme to defraud the SBA and enrich himself, by
applying for an EIDL on behalf of a sole proprietorship in his own
name that purportedly provided printing and graphic design
services. SKEPPLE’s EIDL application contained materially false
representations about his purported sole proprietorship. Based on
that fraudulent application, the SBA issued an EIDL to SKEPPLE in
the amount of $50,000.
The SBA’s EIDL Program
6. Based on my training and experience, my review of
information from the SBA’s website, my review of information
received from the SBA, and my communications with SBA employees,
I know that:
2
a. The SBA is a federal agency that administers
assistance to American small businesses. This assistance includes
issuing certain loans, and guaranteeing loans issued by certain
lenders, to qualifying small businesses. As relevant here, this
assistance includes making direct loans to applicants through the
EIDL program.
b. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act is a federal law enacted on March 29, 2020, designed
to provide emergency financial assistance to the millions of
Americans who were suffering the economic effects caused by the
COVID-19 pandemic. Among other things, the CARES Act expanded the
SBA’s EIDL program, which provided small businesses with low-
interest loans of up to $2 million prior to in or about May 2020,
and up to $150,000 between in or about May 2020 and in or about
December 2021, in order to provide vital economic support to help
overcome the loss of revenue small businesses experienced due to
COVID-19. These loans were made directly by the SBA.
c. To qualify for an EIDL under the CARES Act, an
applicant had to have suffered “substantial economic injury” from
COVID-19, based on an actual economic injury determined by the
SBA. EIDLs could only be used for certain specified purposes, such
as for payroll and other similar costs, increased costs due to
supply chain interruption, to pay obligations that could not be
met due to revenue loss, and for other similar uses.
d. The CARES Act also permitted applications to
request an advance of up to $10,000 to pay allowable working
capital needs. Advances were expected to be paid by the SBA within
three days of the submission of an EIDL application to the SBA,
provided the application contained a self-certification under
penalty of perjury of the applicant’s eligibility for an EIDL.
e. Individuals were permitted to submit EIDL
applications electronically through the SBA’s website, which
recorded various information about the application and applicant.
Applicants received email notifications at various points in the
application process, including, if applicable, when the SBA
extended an offer and when the SBA approved the loan.
SKEPPLE’s Fraudulent EIDL Application
7. Based on my review of records received from the SBA, an
email provider, and an internet service provider, I have learned,
among other things, the following:
3
a. On or about July 25, 2020, EDWIN SKEPPLE, the
defendant, submitted an EIDL application to the SBA, seeking an
EIDL for a sole proprietorship under the name “Edwin Skepple” (the
“SKEPPLE EIDL Application”).
b. The SKEPPLE EIDL Application was submitted from a
certain Internet Protocol (“IP”) address (the “SKEPPLE IP
Address”). Internet service provider records show that from on or
about June 23, 2020, to on or about August 7, 2020, the SKEPPLE IP
Address was assigned to “edwin skepple” at a particular address in
West Nyack, New York (the “SKEPPLE West Nyack Address”).
c. The SKEPPLE EIDL Application contained a
certification under penalty of perjury that its contents were “true
and correct.”
d. The SKEPPLE EIDL Application claimed that the
“Edwin Skepple” sole proprietorship was 100% owned by EDWIN
SKEPPLE, the defendant.
e. The SKEPPLE EIDL Application claimed, among other
things, that the “Edwin Skepple” sole proprietorship was
established on March 22, 2016, was a “printing/graphic design”
business, earned $250,000 in gross revenues during the 12-month
period ending January 31, 2020, incurred $150,000 in cost of goods
sold during the 12-month period ending January 31, 2020, and
incurred $50,000 in lost rents due to the coronavirus pandemic.
f. The SKEPPLE EIDL Application directed that the loan
payment be sent to a certain account in the name of “Edwin R
Skepple” (“SKEPPLE Checking Account-1”) at a certain financial
institution (“Financial Institution-1”).
g. The SKEPPLE EIDL Application listed a certain email
address (the “SKEPPLE Email Address”). Email provider records show
that the SKEPPLE Email Address was created in or about July 25,
2020, and is subscribed to in the name of “EDWIN SKEPPLE.”
h. SBA notes accompanying the SKEPPLE EIDL Application
show that on or about July 25, 2020, SKEPPLE indicated that he
“would like to cancel his application.” Nevertheless, on or about
July 30, 2020, SKEPPLE “confirmed wire information” for SKEPPLE
Checking Account-1. On or about the same day, July 30, 2020,
SKEPPLE electronically signed the SBA’s loan agreement to receive
a $50,000 EIDL.
i. On or about July 31, 2020, the SBA approved the
SKEPPLE EIDL Application and a loan in the amount of $50,000.
4
8. Based on my review of records from Financial
Institution-1, I have learned, among other things, the following:
a. On or about May 17, 2020, EDWIN SKEPPLE, the
defendant, opened SKEPPLE Checking Account-1. 1
b. On or about August 4, 2020, SKEPPLE Checking
Account-1 received a deposit from the SBA in the amount of $49,900. 2
c. On or about August 7, 2020, i.e., soon after the
EIDL was disbursed, SKEPPLE Checking Account-1 began receiving
payments labeled “payroll” from the City of New York. 3
d. In the period soon after the EIDL was disbursed,
bank records show, among other things, that, that between on or
about August 13, 2020, and on or about September 10, 2020, SKEPPLE
made approximately eight cash withdrawals of $1,000 each and one
cash withdrawal of $6,000.
9. Based on my review of records from a certain financial
institution (“Financial Institution-2”), 4 I have learned, among
other things, the following:
a. On or about September 21, 2011, EDWIN SKEPPLE, the
defendant, opened an account in his own name at Financial
Institution-2 (“SKEPPLE Checking Account-2”). Account opening
records list SKEPPLE’s name and his employer as “NYC Dept of
Corrections,” and list the same date of birth and social security
number listed on the SKEPPLE EIDL Application.
1 Although records for SKEPPLE Checking Account-1 show that account
opening documents were signed on or about May 17, 2020, bank
statements show activity beginning earlier on or about April
30,2020.
2 Based on my review of information from the SBA’s website about
the EIDL program, I know that for EIDLs greater than $25,000, the
SBA charged a one-time $100 fee in order to file a lien on the
borrower’s business assets.
3 SKEPPLE Checking Account-1 received one prior payroll deposit
from the City of New York on or about May 15, 2020.
4 Based on my review of publicly available information, I have
learned that Financial Institution-2 is a credit union for which
only certain categories of individuals are eligible to open
accounts, including but not limited to employees of the City of
New York, and Financial Institution-2 required proof of
eligibility in order to open an account.
5
b. Statements for SKEPPLE Checking Account-2 from in
or about January 2019 to in or about January 2020 reflect that,
during that period, SKEPPLE regularly received payments labeled
“payroll” from the City of New York in SKEPPLE Checking Account-
2.
c. Statements for SKEPPLE Checking Account-2 from in
or about January 2019 to in or about January 2020 reflect that,
during this period, SKEPPLE’s regular source of earnings into
SKEPPLE Checking Account-2 during the 12-month period ending
January 31, 2020 was his job with the NYC DOC. While statements
for SKEPPLE Checking Account-2 reflect other significant deposits
into the account, based on the records available to me and my
training and experience, I believe these other deposits are not
together consistent with the operation of a sole proprietorship
doing printing and graphic design work that earned approximately
$250,000 in revenue during that period.
10. Based on my review of tax filings for EDWIN SKEPPLE, the
defendant, I have learned, among other things, the following:
a. For tax year 2019, the only income SKEPPLE reported
to the Internal Revenue Service (“IRS”) was his salary from the
City of New York. SKEPPLE did not report any income from, or file
a Schedule C, Profit or Loss from Business, for, any sole
proprietorship in his name.
b. For tax year 2020, the only income SKEPPLE reported
to the IRS was his salary from the City of New York, approximately
$78,980 rent received from approximately seven rental properties,
and approximately $4,377 income and gross receipts from ERS
Foundation LLC, which SKEPPLE reported as a “real estate
investment” business on a Schedule C. SKEPPLE filed no Schedule C
for a business in printing/graphic design, and the Schedule C he
submitted for ERS Foundation LLC listed far less gross revenue
than the $250,000 he claimed on the SKEPPLE EIDL Application. The
tax return SKEPPLE filed for tax year 2020 listed the SKEPPLE West
Nyack Address as SKEPPLE’s “Home address.”
c. For tax year 2021, the only income SKEPPLE reported
to the IRS was his salary from the City of New York; approximately
$3,741 in income from a property; and approximately $6,417 in rents
received. SKEPPLE filed a Form 8995, Qualified Business Income
Deduction, showing no income for ERS Foundation LLC. SKEPPLE did
not report any income from, or file a Schedule C for, any sole
proprietorship in his name.
6
11. Based on my review of records provided by the SBA, I
have learned, among other things, the following:
a. In addition to submitting the SKEPPLE EIDL
Application from the SKEPPLE IP Address, EDWIN SKEPPLE, the
defendant, submitted several other EIDL applications from the
SKEPPLE IP Address.
b. On or about July 24, 2020, SKEPPLE submitted an
EIDL application from the SKEPPLE IP Address for a sole
proprietorship with the name “SKEPPLE,” that also provided
“printing/graphic design” services. With this EIDL application,
SKEPPLE listed an email address that I believe to be his workplace
email address at NYC DOC. SKEPPLE also claimed $250,000 in gross
revenue (the same as the funded SKEPPLE EIDL Application); $80,000
in cost of goods sold (less than the $150,000 in the funded SKEPPLE
EIDL Application); no lost rent due to the coronavirus pandemic
(less than the $50,000 claimed in the funded SKEPPLE EIDL
Application); and he claimed that his business was established on
March 26, 2017 (different than the March 22, 2016 date he claimed
in the SKEPPLE EIDL Application). SBA records show that on or about
July 24, 2020, SKEPPLE called SBA, requested to withdraw the
application, and took no further action on it.
c. Between on or about July 5, 2020, and on or about
August 8, 2020, SKEPPLE also submitted at least six applications
for a real estate businesses; however, all six applications were
denied. 5 Some of these applications were for businesses in his own
name and others were for ERS Foundation LLC. These applications
listed differing values of gross revenues, cost of good sold, lost
rents, and dates the business was established.
5 Based on my review of SBA records, I have learned, among other
things, that five of the real estate business EIDL applications
were submitted from the SKEPPLE IP Address and the last was
submitted from another IP address.
7
WHEREFORE, deponent respectfully requests that a warrant
issue for the arrest of EDWIN SKEPPLE, the defendant, and that he
be imprisoned or bailed, as the case may be.
_______________________________
/s/ LaVale Jackson, with permission by SDA
LaVale Jackson
Special Agent
United States Attorney’s Office for the
Southern District of New York
Sworn to me through the transmission of this
Complaint by reliable electronic means, pursuant to
Federal Rule of Criminal Procedure 4.1, this
29th day of November 2022.
__________________________________
THE HONORABLE STEWART D. AARON
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK
8
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