Statement of the Offense — United States v. Owen M. Grigsby and Himmeh Kuawogal (D.D.C., Dkt. 10)

Summary

This Statement of the Offense, filed in the District of Columbia, sets out the facts the United States and defendant Himmeh Kuawogai stipulate for his guilty plea in a case also naming Owen M. Grigsby, with the violation listed as 18 U.S.C. § 371. After background on the Paycheck Protection Program and the Economic Injury Disaster Loan program, it says Kuawogai helped Grigsby obtain loans for Owen Grigsby Associates, LLC, including by altering the filing date on its articles of organization to 2018 so the company appeared operational in 2019. It also says he helped with two PPP loan applications containing materially false statements, that Grigsby paid him $1,500.00 through CashApp after the second loan, and that Grigsby received a total of $41,666.00 in PPP loans.

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“Statement of the Offense — United States v. Owen M. Grigsby and Himmeh Kuawogal (D.D.C., Dkt. 10).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-1-24-cr-00186-dkt-10-d-d-c-1f025d3850/, SHA-256 3154fea35350b892540ef213a946ec0ff9bfbf80dba82996b531e058e8d36883.

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Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page1of13

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA |

v. | CRIMINAL NO.
OWEN M. GRIGSBY and HIMMEH | VIOLATION: 18 U.S.C § 371
KUAWOGAL,

Defendants.

STATEMENT OF THE OFFENSE

Pursuant to Federal Rule of Criminal Procedure 11, the United States of America, by and
through its attorney, the United States Attorney for the District of Columbia, and the defendant,
Himmeh Kuawogai (“Kuawogai”), with the concurrence of his attorney, agree and stipulate to the
below factual basis for the defendant’s guilty plea. If this this case were to proceed to trial, the
parties stipulate the United States could prove the below facts beyond a reasonable doubt.

I. BACKGROUND
a. The Payment Protection Program

1. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal
law enacted in or around March 2020 and designed to provide emergency financial assistance to
the millions of Americans who were suffering the economic effects caused by the COVID-19
pandemic. One source of relief provided by the CARES Act was the authorization of billions in
forgivable loans to small businesses for job retention and certain other expenses, through a
program referred to as the Paycheck Protection Program (“PPP”).

2. In order to obtain a PPP loan, a qualifying business had to submit a PPP loan

application, which was signed by an authorized representative of the business. The applicant of a
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 2 of 13

PPP loan was required 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
applicant had to state, among other things, its: (a) average monthly payroll expenses and (b)
number of employees. These figures were used to calculate the amount of money the small
business was eligible to receive under the PPP. In addition, businesses applying for a PPP loan
had to provide documentation showing their payroll expenses. To qualify for eligibility,
businesses applying for a PPP loan needed to be in operation as of February 15, 2020.

3. A PPP loan application had to be processed by a participating financial institution
(the lender). If a PPP loan application was approved, then the participating financial institution
funded the PPP loan using its own monies, which were 100% guaranteed by the Small Business
Administration (“SBA”). Data from the application, including information about the borrower,
the total amount of the loan, and the listed number of employees, were transmitted by the lender
to the SBA in the course of processing the loan.

4, PPP loan proceeds had to be used by the business for certain permissible
expenses—payroll costs, interest on mortgages, rent, and utilities. The PPP allowed the interest
and principal on the PPP loan to be entirely forgiven if the business spent the loan proceeds on the
expense items within a designated period of time and used a certain percentage of the PPP loan
proceeds on payroll expenses.

5. On or about December 27, 2020, the Economic Aid to Hard-Hit Small Business,
Nonprofits and Venues Act provided additional funding for the PPP and extended the application
deadline to March 31, 2021. The act enabled borrowers to take a second draw PPP loan under the
same general terms as their first PPP loan, up to a maximum loan amount of $2 million. The act

reopened the program to borrowers who did not previously receive a first draw PPP loan. To be
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 3of13

reopened the program to borrowers who did not previously receive a first draw PPP loan. To be
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eligible for a second draw, borrowers had to employ no more than 300 employees, demonstrate a
25% reduction in gross receipts during a calendar quarter in 2020, and have expended the full
amount of their initial PPP loan. Allowable expenses were expanded to include worker protection
costs related to COVID-19, uninsured property damage costs caused by looting or vandalism
during 2020, and certain supplier costs and expenses for operations. The expansion applied
retroactively to first draw PPP loans not forgiven by the SBA.

6. On or about March 25, 2021, the PPP Extension Act of 2021 extended the
application deadline from March 31, 2021, to May 31, 2021. In addition to extending the PPP
application filing window by 60 days, the Extension Act provided an extra 30 days for the SBA to
finish processing applications received by the May 31, 2021, deadline.

b. The Economic Injury Disaster Loan Program

7. An Economic Injury Disaster Loan (“EIDL”) is an SBA-administered loan
designed to provide assistance to small businesses that suffer substantial economic injury as a
result of a declared disaster. An EIDL helps businesses meet necessary financial obligations that
could have been met had the disaster not occurred. It provides relief from economic injury that the
disaster caused and permits businesses to maintain a reasonable working capital position during
the period that the disaster affected. Additionally, the SBA offers an EIDL advance designed to
provide emergency economic relief to businesses experiencing a temporary loss of revenue.
This advance does not have to be repaid and small businesses can receive an advance even if they
are not approved for an EIDL.

8. In March 2020, due to the COVID-19 pandemic, the SBA issued an Economic
Injury Disaster Loan declaration. The declaration made EIDLs available nationwide to small

businesses to help alleviate economic injury that COVID-19 caused. EIDLs were usually limited
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 5of13

to a maximum amount of $2 million. However, during the COVID-19 pandemic, EIDLs were
limited, for a period of time, to $150,000.00. The amount of the loan and the amount of the
advance were determined by the SBA based on information provided in the loan application.

9. During the COVID-19 pandemic, EIDL funds were issued directly from the United
States Treasury and applicants applied through the SBA via an online portal. The EIDL application
process, which also used certain outside contractors for system support, collected information
concerning the business and the business owner, including information as to the gross revenues
for the 12 months prior to the disaster; the cost of goods sold; and information as to any criminal
history of the business owner. Applicants were required to electronically certify that the
information provided was accurate and were warned that any false statement or misrepresentation
to the SBA or any misapplication of loan proceeds could result in sanctions, including criminal
penalties.

c. Himmeh Kuawogai and Owen M. Grigsby

10. Kuawogai is a resident of Ellicott City, Maryland. He is the owner, operator, and
sole employee of HAK Accounting Services. Kuawogai is an accountant and Internal Revenue
Service (“IRS”) registered tax preparer.

11. | Kuawogai and Owen M. Grigsby (“Grigsby”) are friends and relatives. Grigsby is
employed by the Metropolitan Police Department (“MPD”), the primary law enforcement agency
for the District of Columbia. MPD Headquarters is located in Washington, D.C. Grigsby has been
an MPD Officer since October 15, 2007. Grigsby is currently assigned to the Overnight (1° watch)

as a Patrol Officer for the Fifth District, which is located in the Northeast quadrant of Washington,

D.C.
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 6of13

II. THE CONSPIRACY
a. Owen Grigsby Associates, LLC

12. Grigsby and Kuawogai created Owen Grigsby Associates, LLC (“OGA”), a self-
registered business. On July 7, 2020, Kuawogai sent Grigsby, who was in the District of Columbia
at the time, an email and link to the Maryland State Express Business Registration and Filings
website. Approximately 20 minutes later, Kuawogai sent Grigsby another email with the subject
line “IRS Business Registration.” Attached to that email was a “Form CP 575G,” which indicated
that the Employee Identification Number (EIN) 85-1790815 had been assigned to OGA.

13. Grigsby filed OGA’s articles of organization on or about July 7, 2020. On or about
August 8, 2020, while in the District of Columbia, Grigsby used his cell phone to forward an email
to Kuawogai confirming that he registered OGA in Maryland, causing interstate wire
communications to be sent in furtherance of the scheme to defraud. Shortly after, Kuawogai
responded to Grigsby with an email, which included an attachment showing OGA’s articles of
organization were certified on August 8, 2020, using the login credentials Grigsby previously
provided Kuawogai. The listed address for OGA was Grigsby’s primary residence.

14. On September 28, 2020, Grigsby opened a Bank of America account, ending
in -9614, on behalf of OGA. The signature card for this account was signed by Grigsby. In the
days leading up to September 28, 2020, Grigsby and Kuawogai communicated extensively about
opening OGA’s Bank of America account.

15. OGA had no legitimate purpose and was solely created to obtain EIDL and PPP

loans.
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 7 of 13

b. Owen Grigsby Associates, LLC and the Two EIDL Applications

16. | Between July 2020 and present day, Grigsby, knowingly and willfully, filed two
EIDL applications on behalf of OGA containing materially false statements to the SBA. Kuawogai
assisted Grigsby with these fraudulent loan applications by providing him with amended and fake
documents and explaining the loan application process to him via messaging applications, the
phone, and email. Kuawogai assisted Grigsby despite knowing that Grigsby never intended to use
the loan funds for a legitimate business purpose.

17. On or about October 11, 2020, Kuawogai helped Grigsby apply for an EIDL on
behalf of OGA in the amount of $53,600.00. The application claimed that OGA was established
on August 18, 2018, which is approximately two years earlier than the actual date of incorporation,
had one employee (Grigsby), and fell into the “Finance-Other” business category. The application
listed Grigsby as the owner with 100% ownership. It further indicated that in 2019, when OGA
had yet to be incorporated, OGA had gross revenues of $107,640.00 with a stated monthly revenue
of $8,937.08 and monthly sales of $8,937.08. While in the District of Columbia, Grigsby used his
phone to forward an email from the SBA to Kuawogai that confirmed Grigsby had submitted his
application, causing an interstate wire communication.

18. On or about October 11, 2020, a contractor working for SBA emailed Grigsby
asking for additional information related to OGA’s EIDL application, which Grigsby forwarded
to Kuawogai. Later that day, Kuawogai responded to Grigsby’s email, writing: “Send this and your
license to respond to the request[.]” Attached to Kuawogai’s email was a PDF of OGA’s articles
of organization, which Kuawogai had altered. Kuawogai modified the filing date listed on OGA’s
articles of organization from July 7, 2020, to July 18, 2018. By modifying the filing date to 2018,

OGA appeared to the SBA as if it were operational during calendar year 2019, as required to
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 8 of 13

qualify for the loan. On or about October 12, 2020, Grigsby responded to the email he received
from the SBA contractor with a picture of his driver’s license and OGA’s altered articles of
organization. Subsequently, Grigsby signed and executed a loan agreement with the SBA for the
amount $53,700.00.

19. On or about October 20, 2020, the SBA disbursed the $53,600.00 loan to OGA’s
Bank of America Account ending in -9614.

20. On or about December 30, 2021, Kuawogai helped Grigsby apply for a
modification of his original EIDL on behalf of OGA in the amount of $214,500.00. As part of his
modification loan application, Grigsby provided the SBA an IRS Form 1040-X, “Amended
Individual Income Tax Return” for 2019. As part of those amended tax forms, Kuawogai filled out
and provided Grigsby with a Form 1040, “Profit or Loss from Business (Sole Proprietorship)” on
behalf of OGA, even though OGA did not exist in 2019. On that form, Kuawogai and Grigsby
asserted OGA had a gross income of $107,640 with a profit of $37,854, which was not true. On or
about January 8, 2022, the SBA emailed Grigsby a declination letter informing Grigsby that his
loan modification application for $214,500.00 had been declined due to “unverifiable
information.” Shortly after receiving this email, Grigsby forwarded the email communication to
Kuawogai.

c. Owen Grigsby Associates, LLC and the Two PPP Loans

21. Onor about March 10, 2021, Kuawogai and Grigsby exchanged the following text
messages while Grigsby was at work in the District of Columbia, causing interstate wire
communications to be sent:

a. Kuawogai: “You want the PPP? I can get you over 40K. Just [throw] me 3k.”

b. Grigsby: “How much can you get me”
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 9 of 13

c. Kuawogai: “At least 41k”

22. Between July 2020 and present day, Kuawogai helped Grigsby to submit two PPP
loan applications on behalf of OGA containing materially false statements to Harvest Small
Business Finance, LLC (“HSBF”), a FDIC insured financial institution that engages in interstate
commerce. Kuawogai assisted Grigsby with these loan applications by providing him with
amended and fake documents and explaining the loan application process to him via messaging
applications, the phone, and email.

23, On or about April 5, 2021, Grigsby electronically signed a PPP “Borrow
Application Form” on behalf of OGA. In this application, Grigsby, knowingly and willfully
indicated that OGA was established in January 2018, which was approximately 2.5 years earlier
than the actual date of incorporation in or about July 2020. Grigsby also indicated the gross income
for the company was $0.00 in 2019, and $103,540.00 in 2020, which was false. On or about April
15, 2021, while in the District of Columbia, Grigsby submitted a “Promise to Pay Note” to the
SBA, indicating that he would repay the PPP loan, causing interstate wire communications to be
sent.

24. As part of this application, Grigsby electronically signed a document
acknowledging that he could apply for forgiveness of the loan for any amount spent on a number
of business-related expenses, including, payroll costs, rent obligations, utility payments, and
operating expenditures. He further certified that that the loan was “necessary to support the
ongoing operations” of OGA and that the loan funds would be “used only to retain workers and to
maintain payroll or other payments” specifically related to the business, such as rent obligations,

utility payments, and operating expenditures.
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 10 of 13

25. As part of this application, Grigsby provided an Internal Revenue Service (IRS)
Form 1040, “Profit or Loss From Business (Sole Proprietorship).” In that form, he listed OGA as
the business name, and indicated that his gross income was $103,540.00, which was false. He
further indicated that he had “materially participated” in the operation of the business during 2020,
which was also false.

26. SBA approved Grigsby’s loan application for OGA for $20,833.00. On or about
April 20, 2021, $20,833.00 was disbursed into OGA’s Bank of America account ending in -9614.

27. Onor about April 24, 2021, while in the District of Columbia, Grigsby received a
notification from the SBA that OGA’s PPP “Second Draw Borrower Application” was ready to be
verified and signed. Later that day, Grigsby electronically signed the PPP “Second Draw Borrower
Application Form” on behalf of OGA. As Grigsby had indicated in the initial “Borrower
Application Form,” he once again asserted OGA was established in January 2018, the gross
income for the company was $0.00 in 2019, and $103,540.00 in 2020, which was false. Grigsby
initialed his understanding that the funds would be used to “retain workers and maintain payroll”
or make other business-related expenses, such as rent obligations, utility payments, and operations
expenditures. He further initialed his understanding that loan forgiveness would only be provided
for the sum of these documented costs, and that not more than 40% of the forgiven amount would
be for non-payroll costs. Grigsby submitted the application while in the District of Columbia,
causing interstate wire communications to be sent in furtherance of the scheme to defraud.

28. SBA approved Grigsby’s “Second Draw” loan application for OGA for
$20,833.00. On or about May 5, 2021, $20,833.00 was disbursed into OGA’s Bank of America

account ending in -9614.

29. On or about June 28, 2021, Grigsby sent Kuawogai a text message: “Bro please
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 11 of 13

don’t forget to give me whatever documents I may need to have this stuff forgiven.” Kuawogai
response shortly after, “I got you bro[.]” On or about July 26, 2021, Kuawogai, knowingly and
willfully, sent Grigsby via email a fake invoice for $9,000 for accounting services. Grigsby used
the fake invoice as part of his applications for PPP loan forgiveness.

30. On or about August 7, 2021, Grigsby submitted Form 3508S, “PPP Loan
Forgiveness Application,” on behalf of OGA for the initial $20,833.00 loan from HSBF for OGA,
As part of that application, Grigsby affirmed that he had complied with all requirements of the
PPP Program rules, including the eligible uses of PPP loan proceeds and the amount of PPP loan
proceeds that had to be used for payroll costs. In fact, Grigsby had not complied with the PPP
Program rules and misspent the PPP funds he received as part of his first fraudulent PPP loan
application. Kuawogai assisted Grigsby with the loan forgiveness application knowing that
Grigsby had not complied with the PPP Program rules.

3h. On or about August 7, 2021, Grigsby submitted an additional Form 3508S, “PPP
Loan Forgiveness Application,” on behalf of OGA for the “Second Draw” $20,833.00 loan from
HSBF for OGA. As part of that application, Grigsby once again affirmed that he had complied
with all requirements of the PPP Program rules, including the eligible uses of PPP loan proceeds
and the amount of PPP loan proceeds that had to be used for payroll costs. Kuawogai assisted
Grigsby with the loan forgiveness application knowing that Grigsby had not complied with the
PPP Program rules.

d. Grigsby Pays Kuawogai for his Help Obtaining Fraudulent Loans

32. On or about April 20, 2021, the same day OGA received its first $20,833.00 PPP

loan, while in the District of Columbia, Grigsby used CashApp to pay Kuawogai $1,500.00, or

approximately 7.5 percent of the total PPP loan OGA received, causing interstate wire

10
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 12 of 13

communications to be sent. Grigsby paid Kuawogai $1,500.00 in exchange for his help obtaining
the fraudulent PPP loan.

33. On or about May 5, 2021, the same day OGA received its second $20,833.00 PPP
loan, Grigsby again used CashApp to pay Kuawogai 1,500.00, or approximately 7.5 percent of the
total second PPP loan OGA received. Grigsby paid Kuawogai $1,500.00 in exchange for his help
obtaining the second fraudulent PPP loan.

34, In sum, starting in July 2020, and continuing at least until February 20, 2022,
Kuawogai and Grigsby, knowingly and willfully agreed to file fraudulent loan applications to
obtain EIDL and PPP loans for Grigsby. As a result of the fraudulent loan applications, Grigsby

paid Kuawogai for this help obtaining the fraudulent loans. Grigsby received a $53,600.00 EIDL

and a total of $41,666.00 in PPP loans.

Respectfully submitted,

MATTHEW GRAVES
United State Attorney

By: /s/ Rebecca G. Ross
Rebecca Ross (N.Y. BAR #5590666)
Assistant United States Attorney
601 D Street N.W.
Washington, D.C. 20530
Rebecca.Ross2@usdoj.gov
(202) 815-8982

11
Case 1:24-cr-00186-RDM Document 10 Filed 04/24/24 Page 13 of 13

Defendant’s Acceptance
have read this Statement of the Offense and carefully reviewed every part of it with my attorney.
I am fully satisfied with the legal services provided by my attorney in connection with this
Statement of the Offense and all matters relating to it. I fully understand this Statement of the
Offense and voluntarily agree to it, No threats have been made to me, nor am I under the influence

of anything that could impede my ability to understand this Statement of the Offense fully.

Defendant Hinimeh uawogai

COMES

Date

Defense Counsel’s Acknowledgment

IL am Defendant Himmeh Kuawogai’s attorney. I have reviewed every part of this Statement of
the Offense with him. It accurately and completely sets forth the Statement of the Offense agreed

to by Defendant and the Office of the United States Attomey for the District of Columbia.

John O. Iweanoge,

Date \

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