Stipulated Factual Basis — United States v. Alfredo Hudson (S.D. Fla., Dkt. 14)
Summary
Stipulated Factual Basis entered on the docket March 28, 2023 as Document 14 in United States of America v. Alfredo Hudson, Case No. 23-20060-Cr (1:23-cr-20060-RKA), U.S. District Court for the Southern District of Florida. The United States and the defendant stipulate to facts the United States would have offered at trial. The stipulation states that on or about June 12,2020 the defendant submitted to Kabbage a false PPP loan application for a business named Alfredo Enterprise and obtained approximately $10,104, and that on or about April 25,2021 the defendant submitted to Womply a second draw application and obtained approximately $11,251 from SEDCO. It also states that a false forgiveness application for the second draw loan was submitted to the SBA.
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“Stipulated Factual Basis — United States v. Alfredo Hudson (S.D. Fla., Dkt. 14).”
Original at ecf.flsd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-1-23-cr-20060-dkt-14-s-d-fla-12db569803/
, SHA-256 054c3efa9093127642ee1dadd700b51dd303513ec44a81a4374790e9303b3638.Full text
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iCase 1:23-cr-20060-RKA Document 14 Entered on FLSD Docket 03/28/2023 Page 1 of 6
UNITED STATES DISTRICT CO URT
SOUTHERN DISTRICT OF FLORIDA
Case No.23-20060-C r-A LTM A N/REID
UNITED STATES OF AM ERICA
V.
ALFREDO HUDSON,
Defendant.
J
STIPULATED FACTUAL BASIS
TheUnitedStatesandALFREDO HUDSON ('l
thedefendant'')herebystipulateand
agree that had this matter proceeded to trial,the United States would'have offered
evidence and tqstim ony to establish the following factualbasis beyond a reasonable
doubt:
The defendant,who resided in M iam i-Dade County,in the Southern Districtof
Florida,was atvarious relevanttimes employed by the State ofFlorida as a Corrections
Officer. AtaIIrelevanttimes,the defendanthad accountsatRegions Bankand TD Bank.
Regions Bank and TD Bank both did business throughoutthe United States,including
maintaining branches in the Southern DistrictofFlorida.
The United States SmallBusiness Administration ('SBA'')was an agency ofthe
executiye branch ofthe G overnmentofthe United States. The Coronavirus Aid,Relief,
and Economic Securi
ty CCARES')Actwas a federalIaw enacted in oraround March
(
2020 that w as designed to provide em ergency financial assistance to the m illions of
Americans who were suffering the econom ic effects caused bythe COVID-19 pandem ic.
1
Case 1:23-cr-20060-RKA Document 14 Entered on FLSD Docket 03/28/2023 Page 2 of 6
O ne source ofreliefprovided by the CARES Actwas the authorization offorgivable Ioans
to smallbusinesses forjob retention and cedain otherexpenses,through a program
referredto asthe Paycheck ProtedionN Program ('PPP'').
In order to obtain a PPP Ioan,a qualifying business subm ioed a PPP loan
application,whichwassigned byan authorized representative ofthe business. The PPP
Ioan application required the business (through i
ts authorized representative) to
)
'
acknow ledge the program rules and m ake cedain affirm ative certifications in orderto be
eligible toobtainthe PPP Ioan. Inthe PPP'Ioanapplication (SBA Form 2483),the small
business (through its authorized representative)was required to provide,among other
things,its:(a)average monthly payroll'
,and (b)numberofemployees. These figures
were used to calculate the amountofmoney the smallbusiness waé eligible to receive
underthe PPP. In addition,the sole proprietorhad to repod and docum entthe sole
proprietorship's income and expenses,as typically reported to the Internal Revenue
Service ('1IRS'') on Form 1040, Schedule C. This application and the suppoding
documentation subm itted were used to calculate the am ountofm oney the applicantwas
entitled to receive underthe PPP.
The PPP also allowed a qualifying business thathad obtained a PPP loan in 2020
and experienced a required revenue reduction in 2020 to obtain a second PPP loan in
2021. These second PPP Ioans were also know n as ''second draw'Ioans. Starting on
oraboutMarch 4,2021,sm allbusinessesthatfiled an IRS Form 1040, Schedule C,could
apply forthis second draw Ioan based on theirgross income by using a PPP second draw
application (SBA Form 2483-SD-C)thatprovided theirgross incomefrom either2019or
Case 1:23-cr-20060-RKA Document 14 Entered on FLSD Docket 03/28/2023 Page 3 of 6
2020. This second draw application and the supporting documentation subm itted were
used to calculate the am ountofsecond draw m oney the applicantw as entitled to receive
underthe PPP.
A PPP Ioan application was processed by a participating Iender. Ifa PPP Ioan
application was approved,the padicipating Ienderfunded the PPP Ioan using its own
monies. W hile i
twas the padicipating Ienderthatissued the PPP Ioan,the Ioan was
100% guaranteed by the SBA. Data from the application,including inform ation about
the borrower,the totalamount ofthe Ioan,and the Iisted num berof em ployees,was
transm i
tted by the Ienderto the SBA in the course ofprocessing the Ioan.
PPP Ioan proceeds were required to be used by the business on cedain
perm issible expensës,specifically,payrollcosts,interqston m ortgages,rent,and utilities.
The PPP allowed the interestand principalon the PPP Ioan to be entirely forgiven ifthe
business spent the Ioan proceeds on these perm issible expense item s within a
designated period oftim e and used a defined portion ofthe PPP Ioan proceedson payroll
expenses. In the PPP Ioen forgiveness application (SBA Form 35085),the borrower
was required to provide,among otherthings,the am ountofthe Ioan spenton payroll
costs,and to cedify compliance w ith aIIthe rules and requirements ofthe PPP program .
Certain PPP borrowerswithloansunder$150,000were allowed to use the SBA'S
Direct Forgiveness Portalto apply for PPP Ioan forgiveness. Forgiveness requests
made through this portalwere reviewed and accepted by the Iender,and then processed
by the SBA. The servers forthis portalwere Iocated outside the state ofFlorida.
Kabbage was an SBA-approved IenderforPPP Ioans,and processed PPP Ioan
Case 1:23-cr-20060-RKA Document 14 Entered on FLSD Docket 03/28/2023 Page 4 of 6
applications from applicants Iocated throughoutthe United States. Kabbage was based
in Atlanta,Georgia,and itsserverswere Iocated outside the state ofFlorida.
W om ply was a com pany thatoperated ah online platform thatreceived information
and docum ents from PPP Ioan applicants throughoutthe United States. W om pl
y was
not a PPP Iender,but ratherwas an independent business that served as a referral
padnerandtechnologyservices providerformultiple SBA-approved PPP Ienders. Once
an applicant subm itted their inform ation and docum ents through the online platform ,
W om pl
y would m ake certain inform ation and documents available to one ofthe Ienders
that retained its services forthe Iender's review , approval,and funding ofthe PPP Ioan.
W om plywas based in San Francisco,California,and its servers were Iocated outside the
state ofFlorida.
SEDCO was an SBA-approved lenderforPPP Ioans. SEDCO contracted with
W om pl
y to receive PPP applications forfunding by SEDCO . Fountainhead SBF LLC
CFountainhead'')was an SBA-approved Ienderthatoriginated and funded PPP Ioans,
and that also acquired and serviced pre-existing PPP Ioans issued by other Ienders.
Fountainhead reviewed PPP Ioan forgiveness applications subm itted directly to the '
SBA
by borrowers ofthe Ioans itwas servicing,and made recom mendations to the SBA on
w hetherthose applications satisfied the requirem ents forPPP Ioan.
On oraboutJune 12,2020,the defendantsubm itted to Kabbage, via interstate
wire comm unicationsfrom the Southern DistrictofFlorida to outside the State ofFlorida,
afal
se andfraudulentPPP 2020 Ioan application claim ingto be a self-employed individual
operating a business underthe nam e d
'Alfredo Enterprise.'' That PPP Ioan application
4
Case 1:23-cr-20060-RKA Document 14 Entered on FLSD Docket 03/28/2023 Page 5 of 6
falsely and fraudulently represented Alfredo Enterprise's m onthly payroll,and as partof
the application process,the defendantsubm itted a false and fraudulentIRS Form 1040,
Schedule C fortax year2019,statingthatAlfredo Enterprisewasa 'Recreation'business.
As a result of this false and fraudulent application, the defendant obtained
approximately $10,104 in PPP Ioan proceeds from Kabbage thatwere electronicall
y
deposited by Kabbage into one ofthe defendant's accounts at Regions Bank. This
electronic depositw as m ade via interstate w ire com m unications.
On oraboutApril25,2021,the defendantsubm itted to W omply,via interstate wire
comm unications from the Southern DistrictofFlorida to outside the State of Florida, a
false and fraudulent 2021 PPP second draw loan application claim ing to be a sole
proprietor operating a business under the tradename of '
A lfredo Enterprise.' This
second draw PPP Ioan application falsely and fraudulently represented Alfredo
Enterprise's2019 gross income,and as partofthissecond draw application process, the
defendantsubmitted a differentfalse and fraudul
entIRS Form 1040, Schedule C,fortax
year2019,stating thatAlfredo Enterprise was a ''Barbershop.''
As a result of this false and fraudulent application, the defendant obtained
approxim ately $11,251 in second draw PPP loan proceeds from SEDCO that were
electronically deposited by SEDCO into one ofthe defendant's accounts atTD Bank.
This electronic depositwas m ade via interstate wir: com m unications. SEDCO Iater
transferred this Ioan to Fountainhead forservicing.
O n or about Septem ber 24, 2021, the defendant subm itted to the SBA , via
,
interstate wire com m unications from the Southern DistrictofFlorida to outside the State
5
;
Case 1:23-cr-20060-RKA Document 14 Entered on FLSD Docket 03/28/2023 Page 6 of 6
of Florida, a false and fraudulent SBA PPP Ioan forgiveness application seeking
forgivenessfrom repaymentofthe PPP second draw Ioan he received from SEDCO . As
a resultofthis false and fraudulentforgi
veness application,the defendantwas excused
from any repaymentobligatipn onthe $11,251second draw PPP Ioan he received,and
the SBA reim bursed Fountainhead,w hich has acquired this Ioan from SEDCO ,forthe full
am ountofthis Ioan and its accrued interest.
The UnitedStates and the defendantagreethatthisStipulated FactualBasis, while
notcontaining aIIfactsknown to the United States,issuE cientto satisfy aIlthe elem ents
establishing the guiltofthe defendantto the crim e charged in the Information.
MARKENZY LAPOINTE
UNITED STATES ATTORNEY
Date:'
3ht/zot.u By: #
Edward N.Stamm
AssistantUnited States Attorney
Date: 7/& /23 By2 Q Fw.
xxx..
DanielEcarius
AssistantFederalPublic Defender
Attorney forDefendant
Date:kl z f.zg By:
Alfredo Hudson
Defendant
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