Indictment — U.S. v. Joshua Lybolt et al. (D. Colo.)

Summary

A grand jury indictment in United States v. Joshua Lybolt and Magdalena Lybolt, Case No. 1:24-cr-00212-DDD, in the U.S. District Court for the District of Colorado, filed June 27, 2024 as Document 1. Counts 1-5 charge wire fraud and aiding and abetting under 18 U.S.C. §§ 1343, 2(a), and the forfeiture section refers to Counts 6 through 13 under Title 18, United States Code, Section 1957. The indictment alleges that from about April 2020 through at least August 2022 the defendants sought EIDLs, EIDGs, EIDL modifications and a PPP loan for companies they had told a bankruptcy trustee on March 3, 2020 were closed. It states that the SBA funded a total of $4,950,000 in EIDLs and modifications and $3,000 in EIDGs, and that Bank 1 funded a $41,667 PPP loan for Broker Life on March 3, 2021.

Summary drafted by a model from the text of the original file linked on this page and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Cite this document

“Indictment — U.S. v. Joshua Lybolt et al. (D. Colo.).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-1-24-cr-00212-dkt-1-d-colo-67dbe26bf8/, SHA-256 5694c400a5b2c4f261259aac72414083841afea5cea1ccaf5d4404ef012bf351.

Full text

Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 1 of 15

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Criminal Case No. 24-cr-00212-DDD

UNITED STATES OF AMERICA,

Plaintiff,
v.

1. JOSHUA LYBOLT, and
2. MAGDALENA LYBOLT,

Defendants.

INDICTMENT

The Grand Jury charges that:

COUNTS 1-5
Wire Fraud and Aiding and Abetting, 18 U.S.C. §§ 1343, 2(a)

Background on the CARES Act Programs

1. The United States Small Business Administration (“SBA”) is an executive-

branch agency of the United States government that provides support to entrepreneurs

and small businesses.

2. In or around March 2020, the Coronavirus Aid, Relief, and Economic

Security (“CARES”) Act was enacted to provide emergency financial assistance to the

millions of Americans suffering adverse economic effects caused by the COVID-19

pandemic. The CARES Act established several new temporary programs and expanded

existing programs, including programs created or administered by the SBA. Two

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Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 2 of 15

sources of funding for small businesses were the Paycheck Protection Program (“PPP”)

and the Economic Injury Disaster Loans (“EIDL”) program. The CARES Act mandated

that only businesses in operation on February 15, 2020, for PPP, or before February 1,

2020, for EIDL, were eligible under the programs.

3. The EIDL program was an SBA program that provided low-interest

financing to small businesses in regions affected by declared disasters. The CARES Act

authorized the SBA to provide EIDLs to eligible small businesses experiencing

substantial financial disruptions due to the COVID-19 pandemic. In addition, the CARES

Act authorized the SBA to issue advances of up to $10,000 to small businesses, known

as Economic Injury Disaster Grants (“EIDG”). The amount of the EIDG was determined

by the number of employees the applicant certified having. The EIDGs did not need to

be repaid.

4. Until April 2021, under the EIDL program, a small business could receive

a loan from the SBA in an amount of up to six months of working capital with a

maximum of $150,000. In April 2021, the SBA increased the EIDL limit to allow small

businesses to receive loans in the amount of up to 24 months of working capital with a

maximum of $500,000. Thereafter, in September 2021, the SBA increased the EIDL

limit to $2 million.

5. In order to obtain an EIDL and/or EIDG, a qualifying business was

required to submit an application to the SBA and provide information about its

operations, such as the number of employees and the entity’s gross business revenues

and cost of goods sold in the twelve months prior to January 31, 2020. The amount of

2
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 3 of 15

the loan, if approved, was determined in part based on the information provided

concerning the gross revenue and cost of goods sold. For loans greater than $25,000,

the SBA withheld a $100 fee from the total EIDL amount for filing a UCC-1 lien on the

borrower’s business assets. EIDL funds were issued directly by the SBA and were

permitted to be used for payroll expenses, sick leave, production costs, and business

obligations, such as debts, rents, and mortgage payments. Before the SBA disbursed

EIDL funds, an applicant generally had to digitally sign a contract, referred to as a Loan

Authorization and Agreement.

6. The CARES Act further authorized the PPP program, which provided

forgivable loans to small businesses. To obtain a PPP loan, a qualifying small business

was required to submit a PPP loan application, signed by an authorized representative

of the business, in which the applicant acknowledged the program rules and made

certain affirmative certifications. The applicant was also required to state the business’s:

(a) average monthly payroll expenses; and (b) number of employees. These figures

were used to calculate the loan amount that the business was eligible to receive under

the PPP. Businesses were also required to provide documentation showing their payroll

expenses, such as filed federal income tax documents.

7. PPP loan applications were received and processed, in the first instance,

by a participating lender. If a PPP loan application was approved, the participating

lender funded the loan using its own monies, but the loans were guaranteed by the

SBA. Data from the application, including information about the borrower, the total

amount of the loan, and the listed number of employees, was transmitted by the lender

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Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 4 of 15

to the SBA in the course of processing the loan. The SBA paid participating lenders a

processing fee for each funded PPP loan.

8. The proceeds of a PPP loan could be used for certain specified items,

such as payroll costs, mortgage interest payments, and utilities. The proceeds of a PPP

loan were not permitted to be used by the borrowers to purchase consumer goods,

automobiles, real estate, or to fund the borrower’s ordinary day-to-day living expenses

unrelated to the specified authorized expenses.

9. Small businesses could request forgiveness of up to the full amount of the

PPP loan by filing a forgiveness application with the same lender. The forgiveness

application required the business to certify, among other things, that the loan was used

for eligible payroll and other business costs, and that the business had verified the

eligible payroll and nonpayroll costs for which the business requested forgiveness. The

business also was required to submit documentation to the lender verifying payroll

costs.

10. At all times relevant to the Indictment:

Lenders

11. Bank 1 was a financial institution based in the Commonwealth of

Pennsylvania. Bank 1 was an approved SBA lender of PPP loans.

Individuals and Entities

12. JOSHUA LYBOLT was a resident of the State and District of Colorado.

13. JOSHUA LYBOLT represented himself to be an owner or co-owner of the

following businesses: A Prime Real Estate Corporation, LLC (“Prime Real Estate”);

4
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 5 of 15

Broker Life, LLC (“Broker Life”); Lifstyl Real Estate, LLC (“Lifstyl Real Estate”); and

JMXE Capital, LLC (“JMXE Capital”).

14. MAGDALENA LYBOLT was a resident of the State and District of Colorado

and married to JOSHUA LYBOLT.

15. MAGDALENA LYBOLT represented herself to be a co-owner of the

following businesses: Prime Real Estate; Broker Life; Lifstyl Real Estate; and JMXE

Capital.

The Scheme

16. Beginning in or around April 2020, and continuing through at least in or

around August 2022, within the State and District of Colorado and elsewhere,

defendants JOSHUA LYBOLT and MAGDALENA LYBOLT devised, intended to devise,

and participated in a scheme and artifice to defraud and to obtain money and property

from the United States and Bank 1, and aided and abetted the same, by means of

materially false and fraudulent pretenses, representations, and promises (hereinafter

referred to as the “Scheme”). The Scheme was executed in connection with seeking

loans under the EIDL and PPP loan programs as authorized by the CARES Act by

submitting false and fraudulent applications for EIDLs, EIDGs, EIDL modifications, and

a PPP loan on behalf of companies that were already closed prior to the COVID-19

Pandemic, according to sworn representations made by JOSHUA LYBOLT and

MAGDALENA LYBOLT in prior bankruptcy proceedings.

5
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 6 of 15

Manner and Means of the Scheme
It was part of the Scheme that:

EIDL Scheme

17. From in or around April 2020, and continuing through at least in or around

August 2022, JOSHUA LYBOLT prepared and submitted fraudulent EIDL applications

to the SBA on behalf of business entities that he and MAGDALENA LYBOLT owned.

18. In these fraudulent EIDL applications, JOSHUA LYBOLT made materially

false statements regarding the number of employees, gross revenues, and cost of

goods sold purportedly relating to these business entities. He also falsely certified that

the business entities suffered losses as a result of the COVID-19 pandemic.

19. In fact, none of the business entities listed in the EIDL applications were in

operation as of January 31, 2020 as required to receive relief funds, as confirmed by

JOSHUA LYBOLT and MAGDALENA LYBOLT in bankruptcy proceedings that occurred

in 2020. Specifically:

a. On or about January 20, 2020, JOSHUA LYBOLT and MAGDALENA

LYBOLT filed for Chapter 7 Bankruptcy.

b. On or about March 3, 2020, JOSHUA LYBOLT and MAGDALENA

LYBOLT told a U.S. Bankruptcy Trustee, under oath, that all of the

businesses included in their bankruptcy filing were closed and no

longer operational. Among these closed businesses were Broker Life,

JMXE Capital, Lifstyl Real Estate, A Prime Real Estate Corporation,

and Commissions Fast.

6
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 7 of 15

c. On or about April 27, 2020, a U.S. Bankruptcy Judge entered an Order

of Discharge granting JOSHUA LYBOLT and MAGDALENA LYBOLT’s

bankruptcy petition and discharging more than $4,655,000 in claims.

20. From in or around April 2020, and continuing until at least in or around

August 2022, JOSHUA LYBOLT submitted six fraudulent EIDL applications to the SBA

on behalf of the following business entities: Prime Real Estate, Broker Life, Lifstyl Real

Estate, JMXE Capital, and Commissions Fast.

21. In these fraudulent EIDL applications, JOSHUA LYBOLT made materially

false statements regarding, inter alia, the entities’ gross revenues and cost of goods

sold. JOSHUA LYBOLT further falsely certified that the information provided in the EIDL

applications was true and accurate. JOSHUA LYBOLT also falsely certified that the

funds would be used solely as working capital to alleviate economic injury caused by

the COVID0-19 pandemic and only to pay permissible business expenses when, in fact,

JOSHUA LYBOLT and MAGDALENA LYBOLT used the bulk of the proceeds for their

personal benefit.

22. JOSHUA LYBOLT and MAGDALENA LYBOLT also submitted false and

fraudulent documentation in support of the applications for EIDLs, EIDGs, and EIDL

modifications. Specifically, in support of the EIDL modification requests for Lifstyl Real

Estate, JOSHUA LYBOLT and MAGDALENA LYBOLT signed an Amended Loan

Authorization and Agreement certifying that “All representations in the Borrower’s Loan

application (including all supplementary submissions)” were “true, correct and complete”

and “offered to induce SBA to make” the loan to Lifstyl Real Estate. JOSHUA LYBOLT

7
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 8 of 15

and MAGDALENA LYBOLT also certified that Lifstyl Real Estate would not distribute

the business entity’s assets to any owner, partner, employee, or other company.

Furthermore, by signing the Amended Loan Authorization, JOSHUA LYBOLT and

MAGDALENA LYBOLT falsely certified that Lifstyl Real Estate would “use all the

proceeds” of the loan “solely as working capital to alleviate economic injury caused by”

the COVID-19 pandemic.

23. As a result of the EIDL Scheme, the SBA approved and funded four EIDL

applications, two EIDGs, and six EIDL modification requests, for a total of $4,950,000 in

EIDLs and modifications and $3,000 in EIDGs. These funds, less $400 in UCC-filing

fees, were disbursed as follows:

a. Prime Real Estate: $1,999,900 in EIDL funds, including one EIDL

modification, deposited into a bank account controlled by JOSHUA

LYBOLT.

b. Broker Life: $450,900 in EIDL and EIDG funds, including one EIDL

modification, deposited into a bank account controlled by JOSHUA

LYBOLT.

c. JMXE Capital: $499,900 in EIDL funds, including one EIDL

modification, deposited into a bank account controlled by JOSHUA

LYBOLT.

d. Lifstyl Real Estate: $2,001,900 in EIDL and EIDG funds, including

three EIDL modifications, deposited into a bank account controlled by

JOSHUA LYBOLT.

8
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 9 of 15

24. In addition to the EIDLs and EIDGs that were funded by the SBA,

JOSHUA LYBOLT submitted additional fraudulent EIDL applications and EIDL

modification requests that were declined or rejected prior to funding.

PPP Scheme

25. From in or around February 2021, and continuing through at least in or

around March 2021, JOSHUA LYBOLT submitted and caused to be submitted a

fraudulent PPP Borrower Application Form and supporting documents to Bank 1 on behalf

of Broker Life. In the fraudulent PPP Borrower Application Form, JOSHUA LYBOLT made

materially false statements. Specifically:

a. JOSHUA LYBOLT falsely answered “No,” when asked on the form

whether the Broker Life, its owners, or any business owned or controlled

by the owners, had ever obtained a direct or guaranteed loan from the

SBA that was either delinquent or had defaulted in the last 7 years,

causing a loss to the government. In fact, in or around June 2019,

JOSHUA LYBOLT, as an owner of Prime Real Estate, failed to make

required payments on at least two loans that were guaranteed by the

SBA and those loans thereafter went into default.

b. JOSHUA LYBOLT also falsely certified that Broker Life was in operation

on February 15, 2020 and had not permanently closed. In truth, Broker

Life stopped operating on or about December 31, 2018, according to the

voluntary petition for bankruptcy filed by JOSHUA LYBOLT and

MAGDALENA LYBOLT. Furthermore, on March 3, 2020, JOSHUA

9
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 10 of 15

LYBOLT and MAGDALENA LYBOLT told the U.S. Bankruptcy Trustee,

under oath, that all of the businesses included in their bankruptcy filing

documentation, including Broker Life, were closed and no longer

operating.

c. JOSHUA LYBOLT further falsely certified that the information provided

in the PPP Borrower Application Form and the information provided in

all supporting documents and forms was true and accurate in all material

respects.

26. On or about March 3, 2021, Bank 1 funded the PPP loan for Broker Life in

the amount of $41,667.

27. On or about August 18, 2021, JOSHUA LYBOLT submitted an application

to the SBA seeking forgiveness of the full $41,667 PPP loan, which the SBA granted.

28. JOSHUA LYBOLT routinely transferred EIDL and PPP funds derived from

the Scheme between bank accounts controlled by JOSHUA LYBOLT and between bank

accounts controlled by JOSHUA LYBOLT and MAGDALENA LYBOLT. JOSHUA and

MAGDALENA LYBOLT utilized EIDL and PPP funds to purchase goods and property,

including vehicles, real estate, vacations, and country club memberships.

Execution of the Scheme

29. On or about the dates set forth below, in the State and District of

Colorado, and elsewhere, defendants JOSHUA LYBOLT and MAGDALENA LYBOLT

caused to be transmitted by means of wire communication in interstate commerce

certain writings, signs, signals, pictures, and sounds, and aided and abetted the same,

10
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 11 of 15

as set forth below:

Count Defendant Date Description of Wire

Payment file for EIDL of $114,400 from
SBA finance center in Colorado to U.S.
JOSHUA Treasury disbursing office outside of
1 June 12, 2020
LYBOLT Colorado caused by JOSHUA
LYBOLT’s submission of Broker Life’s
EIDL application.

Payment file for EIDL of $124,500 from
SBA finance center in Colorado to U.S.
JOSHUA Treasury disbursing office outside of
2 July 29, 2020
LYBOLT Colorado caused by JOSHUA
LYBOLT’s submission of JMXE
Capital’s EIDL application.

Broker Life PPP Borrower Application
JOSHUA Form electronically submitted in
3 March 1, 2021
LYBOLT Colorado and routed interstate to Bank
1 outside of Colorado.

Payment file for EIDL of $499,900 from
SBA finance center in Colorado to U.S.
JOSHUA December 21, Treasury disbursing office outside of
4
LYBOLT 2021 Colorado caused by JOSHUA
LYBOLT’s submission of Prime Real
Estate’s EIDL application.

Payment file for EIDL of $1,290,000
JOSHUA from SBA finance center in Colorado to
LYBOLT U.S. Treasury disbursing office outside
5 April 6, 2022 of Colorado caused by JOSHUA
LYBOLT and MAGDALENA LYBOLT’s
MAGDALENA
submission of Lifstyl Real Estate’s 3rd
LYBOLT
Modification of Note.

All in violation of Title 18, United States Code, Sections 1343 and 2(a).

11
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 12 of 15

COUNTS 6-13
MONEY LAUNDERING, 18 U.S.C. § 1957

30. The allegations in paragraphs 1 through 28 are re-alleged and

incorporated as if fully set forth herein.

31. On or about the dates set forth below, in the State and District of

Colorado, and elsewhere, JOSHUA LYBOLT, knowingly engaged in and attempted to

engage in monetary transactions, specifically, deposits, withdrawals and movements

and transfers of funds and monetary instruments, in and affecting interstate commerce,

to entities listed below, in criminally derived property of a value greater than $10,000

that was derived from specified unlawful activity, specifically, wire fraud in violation of

Title 18, United States Code, Section 1343, knowing that the property involved in such

monetary transactions represented the proceeds of some form of unlawful activity, as

follows:

Count Date Financial Transaction
Payment of $47,553 by cashier’s check number
XXXXXX3367 drawn from Bank of America account
xxxxxx3503 in the name of Broker Life and paid to
6 June 24, 2020
the order of Walser Automotive Group for the
purchase of a 2016 Land Rover Range Rover MP
vehicle.
Wire transfer of $95,170.35 from Bank of America
account xxxxxx6183 in the name of JMXE Capital to
7 January 27, 2021
T.D. Ameritrade account xxxxxx9375 in the name of
Magdalena Wosiak.
Payment of $25,000 by check drawn from Bank of
America account xxxxxx0720 in the name of Broker
8 September 2, 2021
Life and paid to the order of the Country Club at
Castle Pines.

12
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 13 of 15

Wire transfer of $902,803.84 from Bank of America
account xxxxxx6718 in the name of Prime JMXE,
LLC to Land Title Guarantee Company as payment
9 March 3, 2022
for a real estate property located at 35 Lower
Woodbridge Rd. # P157, Snowmass Village, CO
81615.
Payment of $30,000 by the Visa card ending 8565
10 March 29, 2022 drawn from Bank of America account xxxxxx6718 in
the name of Prime JMXE and paid to Inspirato LLC.
Wire transfer of $530,397.50 from Bank of America
account xxxxxx7469 in the name of Lifstyl Real
11 May 27, 2022 Estate to the Title Company of the Rockies for the
purchase of the property located at 1061 W. Beaver
Creek Blvd., #N202, Avon, CO 81620.
Wire transfer of $22,258.50 from Bank of America
account xxxxxx4710 in the names JOSHUA
12 May 31, 2022
LYBOLT and MAGDALENA LYBOLT to the Heritage
Vintage Sports Auctions.
Payment of $58,000 by cashier’s check number
xxxxxx7338 drawn from Bank of America account
xxxxxx4710 in the names of JOSHUA LYBOLT and
13 August 17, 2022
MAGDALENA LYBOLT and paid to the order of
Porsche Littleton for the purchase of a 2022 Porsche
Taycan vehicle.

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

Forfeiture Allegation

32. The allegations contained in Counts 1 through 13 of this Indictment are

hereby realleged and incorporated by reference for the purpose of alleging forfeiture

pursuant to the provisions of Title 18, United States Code, Sections 981(a)(1)(C),

982(a)(1) and (a)(2), and Title 28, United States Code, Section 2461(c).

33. Upon conviction of the violations alleged in Counts 1 through 5 of this

Indictment involving the commission of violations of Title 18, United States Code,

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Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 14 of 15

Section 1343, defendant JOSHUA LYBOLT, shall forfeit to the United States, pursuant

to Title 18, United States Code, Sections 981(a)(1)(C), 982(a)(2), and Title 28, United

States Code, Section 2461(c) any and all of the defendant‘s right, title and interest in all

property constituting and derived from any proceeds the defendant obtained directly and

indirectly as a result of such offense, including, but not limited to: a money judgment in

the amount of proceeds obtained by the defendant.

34. Upon conviction of the violations alleged in Count 5 of this Indictment

involving the commission of violations of Title 18, United States Code, Section 1343,

defendant MAGDALENA LYBOLT, shall forfeit to the United States, pursuant to Title 18,

United States Code, Sections 981(a)(1)(C), 982(a)(2), and Title 28, United States Code,

Section 2461(c) any and all of the defendant‘s right, title and interest in all property

constituting and derived from any proceeds the defendant obtained directly and

indirectly as a result of such offense, including, but not limited to: a money judgment in

the amount of proceeds obtained by the defendant.

35. Upon conviction of the violations alleged in Counts 6 through 13 of this

Indictment involving the commission of violations of Title 18, United States Code,

Section 1957, defendant JOSHUA LYBOLT, shall forfeit to the United States, pursuant

to Title 18, United States Code, Sections 982(a)(1), any and all rights, title, and interest

in all property involved in such offense or offenses, or property traceable to such

property, including, but not limited to: a money judgment in the amount of proceeds

obtained by the defendant.

14
Case No. 1:24-cr-00212-DDD Document 1 filed 06/27/24 USDC Colorado pg 15 of 15

36. If any of the property described above, as a result of any act or omission

of the defendant:

a) cannot be located upon the exercise of due diligence;
b) has been transferred or sold to, or deposited with, a third
party;
c) has been placed beyond the jurisdiction of the Court;
d) has been substantially diminished in value; or
e) has been commingled with other property which
cannot be subdivided without difficulty;

it is the intent of the United States, pursuant to Title 21, United States Code, Section

853(p), as incorporated by Title 28, United States Code, Section 2461(c), to seek

forfeiture of any other property of JOSHUA LYBOLT and MAGDALENA LYBOLT up to

the value of the forfeitable property.

A True Bill:

Ink Signature on File in the Clerk’s Office
Foreperson
MATTHEW T. KIRSCH
Acting United States Attorney

By: s/ Theodore O’Brien
Theodore O’Brien
Assistant United States Attorney
U.S. Attorney’s Office
1801 California St. Suite 1600
Denver, CO 80202
(303) 454-0100
Theodore.OBrien@usdoj.gov
Attorney for the Government

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