Indictment — United States v. Benjamin Hayford (N.D. Okla., Dkt. 18)

Summary

An indictment in United States v. Benjamin Hayford, Case No. 20CR088 CVE, in the U.S. District Court for the Northern District of Oklahoma, Document 18. Count One charges bank fraud under 18 U.S.C. § 1344, and Counts 2 through 5 charge false statements to a financial institution under 18 U.S.C. § 1014. The grand jury charges that Hayford submitted Paycheck Protection Program loan applications to Bank A and Bank B for Global Policy & Strategy Partners, LLP, each in the approximate amount of $4,472,468. It alleges the applications stated 244.17 employees and an average monthly payroll of $1,788,987.50. The indictment also describes the Small Business Administration and the CARES Act.

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“Indictment — United States v. Benjamin Hayford (N.D. Okla., Dkt. 18).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-n-d-okla-no-4-20-cr-00088-dkt-18-43f430e809/, SHA-256 54ced840964b447095175efaf48855e3da601cf6cc38266bf85ac56347fbf56d.

Full text

Case 4:20-cr-00088-CVE Document 18 Filed in USDC ND/OK on 07/08/20 Page 1 of 9

FILED
JUL 0 7 2020
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMi('|rk C McCartt, Clerk
U.S. DISTRICT COURT

UNITED STATES OF AMERICA, Case No. 20CR088 CVE
Plaintiff, INDICTMENT
[COUNT 1: 18 U.S.C. § 1344 - Bank
V. Fraud;
COUNTS 2 through 5: 18 U.S.C. §
BENJAMIN HAYFORD, 1014 - False Statements to a Financial
Institution]
Defendant.

THE GRAND JURY CHARGES:

COUNT ONE
[18 U.S.C. § 1344]

1. From in or about March 2020 through in or about April 2020, in the Northern

Distriet of Oklahoma and elsewhere, the defendant, BENJAMIN HAYFORD,knowingly

executed, and attempted to execute, a scheme and artifice to defraud financial institutions

and to obtain any ofthe moneys,funds, credits, assets, securities, and other property owned

by, and under the custody and control of, financial institutions, by means of false and

fraudulent pretenses, representations, and promises, as stated below ("the Seheme"):

The Purpose of the Scheme

2. The purpose of the scheme was to enrieh HAYFORD unlawfully by

obtaining loan proceeds from financial institutions under false and fraudulent pretenses

coneeming the nature and operation of HAYFORD's businesses.
Case 4:20-cr-00088-CVE Document 18 Filed in USDC ND/OK on 07/08/20 Page 2 of 9

Manner and Means of the Scheme

3. To achieve the purpose of the Scheme, HAYFORD used the following

manner and means, among others:

The Defendant and Related Entities

4. HAYFORD was a resident of Centerton, Arkansas.

5. Global Policy & Strategy Partners, LLP("GPSP")was a general partnership

registered with the Secretary of State for the State of Texas on or about April 1, 2020.

HAYFORD held a majority interest in GPSP.

The Small Business Administration

6. The United States Small Business Administration("SBA")was an agency of

the United States government. The mission ofthe SBA was to maintain and strengthen the

nation's economy by enabling the establishment and viability of small businesses and by

assisting in the economie recovery of communities after disasters.

7. As part of this effort, the SBA enabled and provided for loans through

financial institutions, such as banks and credit unions, and through other lenders. SBA

loans commonly had some form of government-backed guarantee for the benefit of the

lender.

The Paycheck Protection Program

8. The Coronavirus Aid, Relief, and Economic Security("CARES")Act was a

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

to the millions ofAmericans who are suffering the economic effects caused by the COVID-

19 pandemic. One source of relief provided by the CARES Act was the authorization of
Case 4:20-cr-00088-CVE Document 18 Filed in USDC ND/OK on 07/08/20 Page 3 of 9

forgivable loans to small businesses to preserve jobs by paying for certain expenses. This

financial relief was referred to as the Paycheck Protection Program ("PPP").

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

loan application, designated as an SBA Form 2483, which was signed by an authorized

representative ofthe business. The PPP loan application required the business(through its

authorized representative) to acknowledge the program rules and make certain affirmative

certifications in order to be eligible to obtain the PPP loan. In the PPP loan application,

the small business (through its authorized representative) was required to state, among

other things, its number of employees and average monthly payroll expenses. These

figures, among other factors, determined the amount of money the small business could

borrow under the PPP. In addition, businesses applying for a PPP loan were required to

provide documents showing their payroll expenses.

10. A PPP loan application was processed by a participating lender, which often

was a financial institution such as a bank or credit union. In the course of processing the

loan, the lender transmitted data from the borrower's application, including information

about the borrower, the stated number of employees and payroll figures, and the total

amount of the prospective loan, to the SBA. If approved, the lender funded the PPP loan

using its own monies, the repayment of which was guaranteed by the SBA.

11. PPP required loan proceeds to be used only for certain expenses, including

payroll costs, mortgage interest, rent, and utilities. Under PPP rules and guidance, the

interest and principal on a PPP loan was eligible for forgiveness if the borrower spent the
Case 4:20-cr-00088-CVE Document 18 Filed in USDC ND/OK on 07/08/20 Page 4 of 9

loan proceeds on these expenses within a designated period and used a certain portion of

the loan proceeds for payroll expenses.

The Financial Institutions

12. Bank A, known to the Grand Jury, was a finaneial institution within the

meaning ofTitle 18, United States Code, Seetion 20, being an insured depository institution

and a member ofthe Federal Home Loan Bank system. Bank A was based in Fayetteville,

Arkansas, and maintained branches throughout the United States, including the Northern

District of Oklahoma. Bank A was authorized by the SBA to make PPP loans to eligible

borrowers.

13. Bank B, known to the Grand Jury, was a financial institution within the

meaning ofTitle 18, United States Code, Section 20, being an insured depository institution

and a member of the Federal Home Loan Bank system. Bank B was based in the Northern

District of Oklahoma. Bank B was authorized by the SBA to make PPP loans to eligible

borrowers.

HAYFORD's Fraudulent PPP Loan Applications

14. To obtain PPP loans fraudulently, HAYFORD submitted to Bank A and

Bank B certain application forms that materially misrepresented the history, nature and

operations of GPSP.

15. To support the fraudulent application forms, HAYFORD submitted to Bank

A and Bank B certain doeuments that purported to confirm the information in the

applications but which, themselves, contained material misrepresentations about the

employees, payroll figures and taxes pertinent to GPSP.

4
Case 4:20-cr-00088-CVE Document 18 Filed in USDC ND/OK on 07/08/20 Page 5 of 9

HAYFORD's Bank A Loan Application

16. On or about April 1, 2020, HAYFORD falsely represented to Bank A that

GPSP operated as a sole proprietorship from May 2018 to December 2019, and that its

business structure changed and it became a new entity effective January 1, 2020, when in

fact, as he then knew, GPSP partnership agreement was not signed until in or about April

2020.

17. On or about April 3, 2020, HAYFORD submitted a materially false

application to Bank A for a PPP loan to GPSP in the approximate amount of $4,472,468.

In the loan application, HAYFORD falsely:

a. Represented that GPSP had 244.17 employees and an average monthly

payroll of $1,788,987.50;

b. Certified that GPSP was in operation on February 15, 2020, and at that time

had employees, for whom it paid salaries and payroll taxes, and independent

contractors, for whom it paid wages as reported on Forms 1099-MlSC; and

c. Submitted documents that materially overstated the number of GPSP

employees and amounts of payroll expenditures, by falsely representing:

(1) In a PDF file, that GPSP paid wages of $1,904,325 in January 2020

and $1,673,650 in February 2020 to 247 of 250 employees;

(2) In a letter dated January 31, 2020, that GPSP distributed a total of

$1,904,325 in cash payments to 247 1099-MlSC contract employees for

44,370 hours; and
Case 4:20-cr-00088-CVE Document 18 Filed in USDC ND/OK on 07/08/20 Page 6 of 9

(3) In a letter dated February 28, 2020, that GPSP distributed a total of

$1,673,650 in cash payments to 247 1099-MISC contract employees for

39,050 hours.

HAYFORD's Bank B Loan Application

18. On or about April 9, 2020, HAYFORD submitted a materially false

application to Bank B for a PPP loan in the approximate amount of $4,472,468 to GPSP.

In the loan application, HAYFORD falsely:

a. Represented that GPSP had 244.17 employees and an average monthly

payroll of $1,788,987.50; and

b. Submitted documents that materially overstated the number of GPSP

employees and amounts of payroll expenditures, and the date of the partnership's

formation, by falsely representing:

(1) In a PDF file, that GPSP paid $1,904,325 in January 2020 and

$1,673,650 in February 2020 to 247 of 250 employees;

(2) In a document purporting to be a partnership agreement, that

HAYFORD,a friend of his, and a "Hayford Family Trust" formed GPSP on

January 1, 2020.

19. On or about April 20, 2020, during a telephone conversation with a Bank B

representative located in the Northern District of Oklahoma, HAYFORD falsely

represented that:

a. GPSP clients realized yearly revenues between several hundred million and

a billion dollars;

6
Case 4:20-cr-00088-CVE Document 18 Filed in USDC ND/OK on 07/08/20 Page 7 of 9

b. GPSP had 247 W-2 employees; and

e. The GPSP partnership agreement was signed effective January 1, 2020.

20. On or about April 21, 2020, at approximately 4:44 p.m. Eastern Time,

HAYFORD submitted documents to Bank B that materially overstated the number of

GPSP' employees and amounts of payroll expenditures by falsely representing:

a. In a letter dated January 31, 2020, that GPSP distributed a total of

$1,904,325.00 in cash payments to 247 1099-MISC contract employees for 44,370

hours during January 2020;

b. In a letter dated February 28, 2020, that GPSP distributed a total of

$1,637,650.00 in cash payments to 247 1099-MISC contract employees for 39,050

hours during February 2020; and

e. In an Excel fde, payroll figures for the months of January and February 2020

the same as those stated in the letters dated January 31,2020, and February 28,2020.

21. On or about April 21, 2020, at approximately 5:05 p.m. Eastern Time,

HAYFORD submitted documents to Bank B that materially overstated the number of

GPSP employees as well and amounts of payroll expenditures by falsely making the same

representations alleged in paragraph 20 ofthis Indictment, except that the GPSP employees

were described as being "W-2" employees, rather than "1099-MISC" employees.

The Executions of The Scheme

22. On or about the dates stated below, HAYFORD executed, and attempted to

execute, the Scheme in the manner described below:
Case 4:20-cr-00088-CVE Document 18 Filed in USDC ND/OK on 07/08/20 Page 8 of 9

a. On April 9, 2020, HAYFORD submitted a PPP loan application to Bank B,

as alleged in Paragraph 18 of this Indictment;

b. On April 20, 2020, HAYFORD had a telephone conversation with a Bank B

representative, as alleged in Paragraph 19 of this Indictment;

c. On April 21, 2020, HAYFORD submitted documents to Bank B, as alleged

in Paragraph 20 of this Indictment; and

d. On April 21, 2020, HAYFORD submitted documents to Bank B, as alleged

in Paragraph 21 of this Indictment.

All in violation of Title 18, United States Code, Section 1344.
Case 4:20-cr-00088-CVE Document 18 Filed in USDC ND/OK on 07/08/20 Page 9 of 9

COUNTS TWO THROUGH FIVE
[18 U.S.C. § 1014]

23. The allegations of Counts One through Four of this Indictment are incorporated

in these Counts by reference.

24. On or about the dates stated below, in the Northern District of Oklahoma and

elsewhere, the defendant BENJAMIN HAYFORD,knowingly made the following false

statements with the intent to influence the actions ofBank B, a financial institution located

in the Northern District of Oklahoma, the accounts of which were insured by the Federal

Deposit Insurance Corporation ("FDIC"), upon an application for a loan:

Count Date Statement
HAYFORD's statements contained in his submission of
2 04/09/20 PPP loan application to Bank B, as alleged in Paragraph
18 of this Indictment
HAYFORD's statements made in his telephone
3 04/20/20 conversation with Bank B representative, as alleged in
Paragraph 19 of this Indictment
HAYFORD's statements contained in his submission of
4 04/21/20 documents to Bank B, as alleged in Paragraph 20 of this
Indictment
HAYFORD's statements made in his submission of
5 04/21/20 documents to Bank B, as alleged in Paragraph 21 of this
Indictment

All in violation of Title 18, United States Code, Section 1014.

R. TRENT SHORES A TRUE BILL
UNITED STATES ATTORNEY

/s/ Grand Jury Foreperson
Victor A. Grand Jury Foreperson
Assistant Unit' States Attorney

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