Superseding Indictment — U.S. v. Kyle William Brenizer (D. Minn.)

Summary

A Superseding Indictment in United States v. Kyle William Brenizer, also called "Kyle Williams," Case No. 20-CR-00177-ECT-HB, in the U.S. District Court for the District of Minnesota. It charges wire fraud in Counts 1-2 under Title 18, United States Code, Section 1343, money laundering in Counts 3 and 4 under Section 1957, and aggravated identity theft. The grand jury alleges that the defendant sought approximately $841,000 in PPP funds for True-Cut Construction LLC, stating average monthly payroll of $338,720 and approximately 30 employees, and that Bank 1 distributed approximately $841,000 on or about May 13, 2020. The money laundering counts concern a check of approximately $29,985 for a Harley-Davidson motorcycle and a transfer to Company 2. Forfeiture allegations follow.

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“Superseding Indictment — U.S. v. Kyle William Brenizer (D. Minn.).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-0-20-cr-00177-dkt-66-d-minn-feb445a5f3/, SHA-256 67369c9b152e59a3f71c7794b31e33a064b2cd88bd407b9d8c8a7736aa98dbbf.

Full text

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Case No. 20-CR-00177-ECT-HB

UNITED STATES OF AI\{ERICA, )
SUPERSEDING INDICTMENT
Plaintiff,
18 u.s.c. s 10284
v. 18 u.s.c. $ 1343
18 U.S.C. S 1e57
I(YLE WILLIAM BRENIZER, 18 U.s.c. S e81(a)(1)(c)
alkla "Kyle Williams," 18 U.S.c. $ e82(a)(1)
28 U.S.C. S 2461(c)
Defendant.

The UMTED STATES GRAND JURY charges:

General Alleqations

At times relevant to this Superseding Indictment:

The Defendant and. Related, Entities

1. Defendant I(YLE WILLIAM BRENIZER was a resident of St. Paul, in

the State and District of Minnesota. Defendant BRENIZER was subject to multiple

felony criminal charges penfing in the State of Minnesota in which he personally

appeared in court proceedings prior to May 2020, including but not limited to, charges

for check forgery, identifu theft, and theft by swindle.

2. True-Cut Construction LLC ('True-Cut") was a Minnesota corporation

formed in or around December 2015. Tbue-Cut operated as a contracting and

construction company' with its principal business location in Brooklyn Park,

Minnesota. Defendant BRENIZER was True-Cut's registered agent, manager, and

tooo/o olrner.

SCANI||ED
FEB 0e 2021
U.S. DISTRICT COURI MPLS
. 3. In or
"boo!
August 2018, True-Cut and defendant BRENIZER were

subject to an enforcement action Lv the Minnesota Department oilabor and Industry

and were ordered to cease and desist from acting or holding themselves out as a
' "--: -:'
residential building contractor, remodeler, or roofer. Since in or about December

2019, True-Cut's contractor license issued by the Minnesota Department of Labor and

Industry expired and has not been renewed by True-Cut or defendant BRENIZER.

4. Since at least zOtG through at least 2019, defendant BRENIZER did not

report to the State of Minnesota the payment of any wages to a single Tlue-Cut

employee. Since at least 2018, defendant BRENIZER did not submit any Form 944

federal tax returns to the United States Internal Revenue Service for True-Cut

Construction.

5. Interactive Innovators, Inc., ('Interactive Innovators") was a Minnesota

corporation formed in or around January 1997, which was administratively dissolved

in or around April 2005. Interactive Innovators remained dissolved from in or around

April 2005 until on or about April 23,2020, on which date the entity was reinstated

by defendant BRENlZERwho, under the alias "Kyle Williams," listed himself as the

chief executive officer of Interactive Innovators.

The U.S. Small Business Ad,ministration

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

executive-branch agency of the United States government that provided support to

entrepreneurs and small businesses. The mission of the SBA was to maintain and

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

businesses and by assisting in the economic recovery of communities after disasters.
7 . As part. qf this effort, the SBA enabled and provided for loans through
'Larrk.,
credit unions, and other lenders. These loans have government-backed

guarantees.
-:- " ---'-,
CARES Act and Paychech Protection Progrann

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-l9 pandemic. One source.of relief provided by the CARES Act was the

authorization of forgivable loans to small businesses for job retention and certain

other expenses, through a program referred to as the Paycheck Protection Program

('PPP").

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

PPP loan application, which was signed by an authorized representative of the

business. The PPP loan application required the business (through its authorized

representative) to acknowledge the program rules and make certain affirmative

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

application (SBA Form 2483), the small business (through its authorized

representative) was required to certifr, among other things: (a) that the small

business was in operation on February 15, 2020; (b) average monthly payroll

expenses; and (c) number of employees. These figures were used to calculate the

amount of money the small business is eligible to receive under the PPP. In addition,

businesses applying for a PPP loan were required to provide documentation showing

their payroll expenses. Applicants must meet (and certifr) certain requirements,
including that the .small business was in operation on February 15, 2020, had

employees, and had average monthly payroll costs.

10. The PPP loan application further required the business (through its
authorized representative) to certifr whether the applicant or any individual owning

20 percent or more of the equity of the business was subject to an indictment, criririnal

information, arraiglrment, or other means by which formal criminal charges are

brought.

11. A PPP loan application was processed by a participating lender. If a
PPP loan application \tras approved, the participating lender funded the PPP loan

using its own monies, which were guaranteed by the SBA. Data from the application,

including the information about the borrower, the total amount of the loan, and the

listed number of employees, was transmitted by the lender to the SBA in the course

of processing the loan.

12. PPP loan proceeds were required to be used on certain permissible
expenses, including payroll costs, mortgage interest, rent, and utilities. Under the

applicable PPP rules and guidance, the interest and principal on the PPP loan is

eligible for forgiveness if the business spent the loan proceeds on these expense items

within a designated period of time and used a certain portion of the loan towards
payroll expenses.

Releuant Financial Institutions and. Related. Entities

13. Bank 1 was a federally insured financial institution based in Salt Lake
City, Utah. Bank 1 participated in the SBA s PPP as a lender, and, as such, was

authorized to lend funds to eligible borrowers under the terms of the PPP.
t4. Bank 2 was a federally insured financial institution based in Fargo,

i.io"tn Dakota, with multipie branch locations, includins in Moorhead, Minnesota.

Defendant BRENIZER maintained personal accounts at Bank 2 for which he was the

sole account signatory.
'''

15. Compahy 1 was a publicly traded company that specialized in processing
credit card payments and small-business lending. Company 1 was based in Redwood

City, California. Company 1 participated in the SBAs PPP by, among, other things,

acting as a service provider between small businesses and certain banks, including

Bank 1. Small businesses seeking PPP loans could apply through Company 1 for PPP

loans. Company L would review the loan applications. If a loan application received

by Company 1 was approved for funding, a partner bank, such as Bank 1, disbursed

the loan funds to the applicant.

16. Company 2 was a FlNRA-registered broker-dealer that managed self-
directed cash accounts for its customers and related expense management services

through its website and mobile applications. Company 2was based in San Francisco,

California. Defendant BRENIZER, under the alias "Kyle Williams," maintained an

account at Company 2 in the name of Interactive Innovators. On April 30, 2020, to

open the Interactive Innovators' account, Defendant BRENIZER submitted an

application to Company 2 containing materially false and misleading information.

Namely, Defendant BRENIZER claimed that a person identified as Individual B was

on Interactive Innovator's board of directors. Defendant BRENIZER further claimed

that a person identified as Individual C was an incorporator of Interactive Innovators.

Neither Individual B nor Individual C were part of the Interactive Innovators
5
business and neither individual gave Defendant BRENIZER permission to use their

names in donnection with any of his businesses.

couNTs 1-2
(Wire Fraud)

L7. Paragraphs 1 through 16 are incorporated by reference as if fully set
forth herein.

18. Beginning in or around April 2020, and continuing until at least in or
around June 2020, in St. Paul, Minnesota, within the District of Minnesota, and

elsewhere, the defendant

KYLE WILLIAM BRENIZER,
a[Ha "Kyle Williamsr"

did knowingly devise and participate in a scheme and artifice to defraud and to obtain

money by means of materially false and fraudulent pretenses, representations, and

promises, and by concealment of material facts.

19. More specifically, defendant BREMZER devised a scheme to defraud
Bank 1, Company 1, and the SBA by filing false and fraudulent applications for PPP

funds. The purpose of the scheme was for defendant BRENIZER to unjustly enrich

himself by obtaining PPP loan proceeds under false and misleading pretenses,

including by making false statements about the number of TYue-Cut employees,

payroll expenses, the intended use of the loan proceeds, and defendant BRENIZER's

criminal history.

20. In furtherance of the scheme, on or about May 1, 2020, defendant
BRENIZER submitted a false and misleading PPP application to Bank 1 and

Company 1 in the name of True-Cut seeking approximately $841,000 in PPP funds
('PPP Application.l"). PPP Application 1 was signed by defendant BRENIZER. In

addition, defendant BRENIZER certified that PPP Application 1 and the information

provided in all supporting documents and forms was true and accurate.

2L. On PPP Application 1, defendant BREMZER falsely stated that True-

Cut's average monthly payroll was $338,720 and that the company had
approximately 30 employees. In addition, defendant BRENIZER submitted with the

PPP Application 1 what purported to be an Employer's Annual Federal Tax Return

('IRS Form 944') for True-Cut for 2019. On the purported IRS Form 944, defendant

BRENIZER falsely claimed that True-Cut had 30 employees and had paid $4,064,520

in wages, tips, and compensation.

22. It was further part of the scheme that defendant BRENIZER falsified
bank account records in support of PPP Application 1 unbeknownst to Bank 1 and

Company 1 at the time. More specifically, defendant BRENIZER provided Bank 1

and Company 1 with monthly statements for a personal account that he maintained

at Bank 2, which defendant BRENIZER had altered and falsified to appear as "True-

Cut Construction" bank account statements. In fact, and as defendant BRENIZER

knew at the time, True-Cut maintained no accounts at Bank 2.

23. On or about May 5, 2020, Company 1 notified defendant BRENIZER
that it did not approve the issuance of a PPP loan based on PPP Application 1.

24. In furtherance of the scheme to defraud, on or about May 12, 2020,
defendant BRENIZER caused the submission of another false and misleading PPP

application to Bank 1 and Company 1 in the name of True-Cut seeking approximately

$841,000 in PPP funds ('PPP Application 2"). In order to conceal his involvement,
defendant BRENIZER omitted his name from PPP Application 2, which he caused to.

be signed and submitted under the name of Individual A, whom defendant
BRENIZER falsely claimed was the 90% owner of True-Cut. In fact, and as defendant

BRENIZER knew, Individual A had no ownership interest in Tbue-Cut.

25. Under the false pretense that Individual A was a 90% owner of True-
Cut, defendant BRENIZER caused PPP Application 2 to be certifred as containing

true and accurate information and supporting documentation, when, in fact, PPP

Application 2 contained materially false and misleading claims. Among other things,

PPP Application 2 again falsely stated that True-Cut's average monthly payroll was

$338,720 and that the company had approximately 30 employees. Defendant

BRENIZER caused PPP Application 2 to be submitted to Bank 1 and Company 1 with

fraudulent supporting information, namely, bogus bank account records and a

purported IRS Form 944 for True-Cut for 2019 with false information about True-

Cut's employees and payroll expenses.

26. As a result of defendant BRENIZER s material falsehoods and
omissions, Bank 1 eventually approved PPP Application 2. On or about May 13, 2020,

Bank 1 distributed approximately $841,000 to defendant BRENIZER through a wire

transfer sent to defendant BRENIZERis personal account at Bank 2.

27 . It was further part of the scheme that defendant BRENIZER received
approximately $841,000 in fraud proceeds, some of which he distributed and

misappropriated, or attempted to distribute and misappropriate, for the personal

benefit of himself and other parties in violation of the PPP's requirements. More

specifically, rather than use PPP funds for permissible business expenses, such as
payroll costs, mortgage. interest, rent, or utilities, defendant BRENIZER instead

transferred approximately $650,000 to an account at Company 2 that he controlled

and was unrelated to True-Cut; made an approximately $29,000 payment to purchase

a Harley-Davidson motorcycle; transferred approximately $20,000 to a personal
savings account in defendant BRENIZER s name; transferred approximately $10,000

to Individual A; and spent aplroximately $1,185 for golf expenses, among other retail

and entertainment expenditures for his personal benefit.

28. On or about the dates set forth below, in the State and District of
Minnesota and elsewhere, the defendant,

I(YLE WILLIAM BRENIZEB,

for the purpose of executing and attempting to execute the above-described scheme

and artifice to defraud, knowingly transmitted and caused to be transmitted by

means of wire communications in interstate and foreign commerce, certain writings,

signs, signals, and sounds, as described below:

Date of\ilire Wire
Connt (on or about)
Electronic submission from Minnesota of PPP
1 May 1, 2020 Application 1, which was routed interstate
throueh Companv 1's servers outside of Minnesota
Electronic submission from Minnesota of PPP
2 May L2,2O2O Application 2, which was routed interstate
throueh Company l's servers outside of Minnesota

All in violation of fitle 18, United States Code, Section 1343.

COUNT 3
(Money Laundering)

29. Paragraphs 1 through 28 are incorporated by reference as if fully set
forth herein.
. 30. On or about May 16, 2020, in the State and District of Minnesota and
elsewhere, the defendant,

KYLE WILLIAM BRENIZER,
alkla "Kyle Williams,? --

knowingly engaged and attempted to engage in a monetary transaction by, through,

and to a financial institution, affecting interstate and foreign commerce in criminally-

derived property of a value greater than $10,000, that is, a check of approximately

$29,985 from defendant BRENIZER's personal account at Bank 2 for the purchase a

Harley-Davidson motorcycle, such funds having been derived from a specified

unlawful activity, namely, wire fraud.

All in violation of Title 18, United States Code, Section 1957.

COUNT 4
(Money Laundering)

31. Paragraphs 1 through 28 are incorporated by reference as if fully set
forth herein.

32. On or about May 19, 2020, in the State and District of Minnesota and
elsewhere, the defendant,

KYLE WILTIAM BRENIZER,
a[Ha "Kyle Williamsr"

knowingly engaged and attempted to engage in a monetary transaction by, through,

and to a financial institution, affecting interstate and foreign commerce in criminally-

derived property of a value greater than $10,000, that is, a transfer of approximately

9500,000 from defendant BRENIZEIIis personal account at Bank 2 to Company 2,

10
such funds having been derived from a specified unlawful activity, namely, wire

fraud.

t: of ri]le t_s, ufted c1u": 1e57.
^t "t:tafion ftates l:*.n
COUNT 5
(Aggravated Identity Theft)

33. Paragraphs 1 through 28 of the Superseding Indictment are
incorporated by reference as if fully set forth herein.

34. On or about the date set forth below, in the State and District of
Minnesota and elsewhere, the defendant,

I{YLE WILLIAM BRENIZER,
aIHa "Kyle Williams,"

did knowingly transfer, possess, and use, without lawful authority, a means of
identification of another person, as alleged in the count below, during and in relation

to the commission of a felony violation enumerated in Title 18, United States Code,

Section 1028A(c), specifically, wire fraud, in violation of Title 18, United States Code,

Section 1343:

Date
Cou'nt (on or about) Description
Unlawfully used a means of identification,
5 April 30,2020 specifically, the name of Individual B, during and
in relation to the commission of wire fraud. as
alleeed in Counts 1 and 2

All in violation of Title 18, United States Code, Section 10284.

11
COUNT 6
(Aggravated Identity Theft)

35. Paragraphs I through 28 of the Superseding Indictmeirt afe
. incorporated by reference as if fully-set-forth herein.

36. On or about the date set forth below in the State and District of
Minnesota and elsewhere, the defendant,

KYLE WILLIAM BRENIZER,
a[Ha "Kyle Williamsr"

did knowingly transfer, possess, and use, without lawful authority, a means of
identification of another person, as alleged in the count below, during and in relation

to the commission of a felony violation enumerated in Title 18, United States Code,

Section 1028A(c), specifically, wire fraud, in violation of Title 18, United States Code,

Section 1343:

Date Description
Count (on or about),
Unlawfully used a means of identification,
6 April 30,2020 specifically, the name of Individual C, during and
in relation to the commission of wire fraud, as
alleEed in Counts 1 and 2

All in violation of fitle 18, United States Code, Section 10284.

FORFEITURE ALLDGATIONS

37. Counts 1 through 4 of this Superseding Indictment are incorporated by
reference for the purpose of alleging forfeiture pursuant to Title 18, United States

Code, Sections 981(aXl)(C) and 982(a)(1), in conjunction with Title 28, United States

Code, Section 2aGL(p).

12
48. Upon conviction of any of the qffenses alleged in Counts 1 and 2, as set
forth in this Superseding Indictment, defendant shall forfeit to the United States of

America any property, real or personal, which constitutes or is derived from proceeds

traceable to the violation, as provided in Title 18, United States Code, Section

981(a)(1XC) and fitle 28, United States Code, Section zail@).

39. Upon conviction of the offenses alleged in Count 3 and 4 of this
Superseding Indictment, the defendant shall forfeit to the United States pursuant to

Title 18, United States Code, Section 982(a)(1), any property, real or personal,
involved in such offense, and all property traceable to such property, including but

not limited to, the sum of money involved in Counts 3 and 4.

40. If any of the above'described forfeitable property is unavailable for
forfeiture, the United States intends to seek the forfeiture of substitute property as

provided for in Title 21, United States Code, Section 853(p), as incorporated by fitle

28, United States Code, Section 2461(c).

A TRUE BILL

UNITED STATES ATTORNEY FOREPERSON

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