Stipulated Statements of Fact — U.S. v. Holness (S.D. Fla.)

Summary

Stipulated Statements of Fact between the United States and defendant Damara Holness supporting a guilty plea to Count 1 of the Information, conspiracy to commit wire fraud under 18 U.S.C. § 1349, in Case No. 0:21-cr-60229-RAR, U.S. District Court for the Southern District of Florida, entered on the docket November 3, 2021 as Document 17. The statement says a PPP loan application filed with Kabbage, Inc. on or about June 29, 2020 requested $300,000 for HOLNESS Consulting, Inc., stating 18 employees and an average monthly payroll of $120,000, and that Kabbage wired $300,000 on or about July 2, 2020. It states that bank records show the company paid approximately $10,000 in wages during 2019 and that the Form W-3 submitted to Kabbage was never submitted to the IRS. It describes checks of approximately $1,300 issued to individuals, of which Holness would keep the remaining $1,000.

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Cite this document

“Stipulated Statements of Fact — U.S. v. Holness (S.D. Fla.).” Original at ecf.flsd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-0-21-cr-60229-dkt-17-s-d-fla-40e64e759d/, SHA-256 06d3b531571bc2d0ff919da9d5d59dac79abedf9ab4a07b30714be5434f9a6d8.

Full text

Case 0:21-cr-60229-RAR Document 17 Entered on FLSD Docket 11/03/2021 Page 1 of 4

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO. 2 \- lo D0 a4 - L{2.-- fZ-AR-
UNITED STATES OF AMERICA

DAMARA HOLNESS,

Defendant.
--------------I
Stjpu]ated Statements of Fact

The United States of America and DAMARA HOLNESS (hereinafter referred to as

"HOLNESS'') enter into the following stipulated statements of fact in support of the defendant's

plea of guilty:

Had this case proceeded to trial, the government would have presented evidence by way of

testimony of co-conspirators and other witnesses, bank records, and other business records, and

other evidence, which would establish that beginning at least in or about June 2020 and continuing

through in or about September 2020, the defendant engaged in a Conspiracy to Commit Wire

Fraud, in violation of 18 U .S.C. § 1349, as charged in Count 1 of the Information.

Background

In or about September 2020, the FBJ began an investigation of a Payroll Protection

Program (PPP) loan for $300,000 obtained by HOLNESS. The PPP was created to help certain

businesses continue paying their workers during the COVID-19 pandemic. The Paycheck

Protection Program allowed entities to apply for low-interest private loans to pay for their payroll

and certain other costs. The amount of the PPP loan is based on the average monthly payroll costs

of a business between January 1, 2019, and December 31, 2019. The am.owit of a PPP loan is
Case 0:21-cr-60229-RAR Document 17 Entered on FLSD Docket 11/03/2021 Page 2 of 4

approximately equal to 2.5 times the applicant's average monthly payroll costs. The loan could be

partially or fully forgiven if the business kept its employee counts and employee wages stable.

On or about June 29, 2020, a loan application was filed online, by interstate wire

communication, with Kabbage, Inc., ("Kabbage") requesting a PPP loan of $300,000 for

HOLNESS Consulting, Inc. Kabbage was an online bank that provided funding directly to small

businesses and consumers. Kabbage was an approved SBA lender of PPP loans. The loan

application was caused to be signed electronically by Damara HOLNESS who was listed on an

attachment to the application as the 1000/o owner of HOLNESS Consulting.

The loan application for HOLNESS Consulting stated that during 2019 HOLNESS

Consulting had 18 employees and had an average monthly payroll of$120,000 a month. In support

of the loan application defendant HOLNESS caused to be submitted online to Kabbage Bank, by

interstate wire communication, an IRS Form W-3 reflecting that during 2019 HOLNESS

Consulting paid wages of $1,440,000 and had withheld from those wages federal income tax of

$532,800, social security tax of$178,560, and Medicare tax of$41,760 (An IRS Form W-3 is :fi]ed

at the end of each year summarizing the information submitted in all the Form W-2s prepared by

a company).

On or about July 2, 2020, based on the information provided in the loan application and

supporting documents, Kabbage approved the loan to HOLNESS Consulting and wire transferred

$300,000, via interstate wire communication, to the HOLNESS Consulting bank account at Chase

Bank.

The government obtained the bank records of HOLNESS Consulting for 2019. The bank

records reflect that, at best, HOLNESS Consulting paid approximately $10,000 in wages during

2019. The HOLNESS Consulting bank account showed very little income for 2019 and did not

2
Case 0:21-cr-60229-RAR Document 17 Entered on FLSD Docket 11/03/2021 Page 3 of 4

show an ability to pay wages of $1 ,440,000 during 2019. The government also obtained the tax

records of HOLNESS Consulting. The tax records show that the Form W-3 for 2019 submitted to

Kabbage was never submitted to the IRS. The tax records show that there were no wages or W-2

forms filed for HOLNESS Consulting. The tax records show that there were no Form 941

quarterly income tax returns filed for any quarter in 2019 reflecting any wages or withholdings for

any employees of HOLNESS Consulting. Further, there was no record of any federal income tax

withholdings of$532,800 being paid to the IRS as reflected in the Form W-3 submitted in support

of the PPP loan. Thus, there was no evidence to support the information provided to Kabbage in

the PPP loan.

The HOLNESS Consulting bank account records reflect that after receiving the PPP Joan,

checks were issued approximately every two weeks to approximately two dozen individuals. The

checks were endorsed on the back and were cashed at Chase Bank. A representative from Chase

Bank would testify that the checks were cashed at Chase Bank and that the checks would have

been cashed by the account holder HOLNESS. The IRS records reflect that the one and only

quarter for which a Form 941 was filed by HOLNESS Consulting was the third quarter of 2020

from July through September 2020.

FBI agents interviewed some of the people who received the checks. They would testify

that in or about July or August 2020 they were asked by HOLNESS to ..work'' for her. The

individuals did little, if any, work. The individuals were issued a check for approximately $1 ,300

approximately every two weeks and told by HOLNESS to sign the check. A couple of the

individuals went with HOLNESS to Chase Bank where HOLNESS cashed the checks. HOLNESS

would pay the individuals approximately $300 and keep the remaining $1,000. Many of the

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Case 0:21-cr-60229-RAR Document 17 Entered on FLSD Docket 11/03/2021 Page 4 of 4

individuals would admit that they did not do anything to earn the amount of the check issued or

knew what they were getting paid for.

This is some of the evidence the government would present if this matter were to proceed

to trial. The above-described acts in Count 1 occurred from in or about June 2020 and continuing

through in or about September 2020, in Broward County in the Southern District of Florida and

elsewhere.

Date: ~ By:
e ey
Assistant United States Attorney

I have read the StipuJated Statements of Fact set forth above. I believe that the above-

stated facts set forth all the elements for the offense of Conspiracy to Commit Wire Fraud, in

violation of Title 18, United States Code, Section 1349, as charged in Count 1 of the Information.

l believe that all the facts set forth in the Stipulated Statements of Fact are true and correct

Date: V n~I 11-IJ t By:
Damara Holness
DefenA ... r,......,,,,

Date: 1l / 0 3/a-t By:
Sue-
Attorney for Damara Holness

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