Plea Agreement — United States v. Thomas Smith, No. 20-CR-196-1
Summary
A Plea Agreement in United States of America v. Thomas Smith, Case No. 20-CR-196-1 (BHL), Document 53 in Case 2:20-cr-00196-BHL, filed 01/22/21, in the U.S. District Court for the Eastern District of Wisconsin. The agreement states that the defendant is charged in a fourteen-count Indictment and agrees to plead guilty to Count Two, bank fraud under Title 18, United States Code, Section 1344. It lists a maximum of thirty (30) years and $1,000,000 for that count, a $100 special assessment, and Sentencing Guidelines provisions including a base offense level of seven (7). It also covers restitution, forfeiture and the defendant's waiver of trial rights. Its closing paragraphs describe false statements to a bank representative about PPP loan money, fake documents, and deleted emails and text messages.
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“Plea Agreement — United States v. Thomas Smith, No. 20-CR-196-1.”
Original at storage.courtlistener.com. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-2-20-cr-00196-dkt-53-e-d-wis-a4176428ec/
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
UNITED STATES OF AMERICA,
Plaintiff,
v. Case No. 20-CR-196-1 (BHL)
THOMAS SMITH,
Defendant.
PLEA AGREEMENT
1. The United States of America, by its attorneys, Matthew D. Krueger, United
States Attorney for the Eastern District of Wisconsin, Stephen Ingraham, Assistant United States
Attorney, Daniel Kahn, Acting Chief, Fraud Section, Department of Justice, Laura Connelly,
Trial Attorney, Leslie S. Garthwaite, Trial Attorneys, and the defendant, Thomas Smith,
individually and by attorney Michael J. Steinle, pursuant to Rule 11 of the Federal Rules of
Criminal Procedure, enter into the following plea agreement:
Charges
2. The defendant has been charged in a fourteen-count Indictment, which alleges
that the defendant committed six counts of bank fraud, in violation of Title 18, United States
Code, Section 1344 and six counts of money laundering, in violation of Title 18, United States
Code, Section 1957.
3. The defendant has read and fully understands the charges contained in the
Indictment. He fully understands the nature and elements of the crimes with which he has been
charged, and the charges and the terms and conditions of the plea agreement have been fully
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explained to him by his attorney.
4. The defendant voluntarily agrees to plead guilty to Count Two of the Indictment,
attached hereto as Attachment A.
5. The defendant acknowledges, understands, and agrees that he is, in fact, guilty of
the charge in Count Two of the Indictment. The parties acknowledge and understand that if this
case were to proceed to trial, the government would be able to prove the facts in Attachment B
beyond a reasonable doubt. The defendant admits that these facts are true and correct, and
establish his guilt beyond a reasonable doubt.
6. This information is provided for the purpose of setting forth a factual basis for the
plea of guilty. It is not a full recitation of the defendant's knowledge of, or participation in this
offense.
Penalties
7. The parties understand and agree that the offense to which the defendant will
enter a plea of guilty carries the following maximum term of imprisonment and fine: thirty (30)
years and $1,000,000. The count also carries a mandatory special assessment of $100 and a
maximum of five (5) years of supervised release. The parties further recognize that a restitution
order may be entered by the court. The parties' acknowledgments, understandings, and
agreements with regard to restitution are set forth in paragraphs 30 and 31 of this agreement.
8. The defendant acknowledges, understands, and agrees that he has discussed the
relevant statutes as well as the applicable sentencing guidelines with his attorney.
Elements
9. The parties understand and agree that in order to sustain the charge of bank fraud
as set forth in Count Two of the Indictment, the government must prove each of the following
propositions beyond a reasonable doubt:
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First, that there was a scheme to obtain moneys, funds, credits, assets, securities, or other
property that was owned by or in the care, custody, or control of a bank or financial institution by
means of false or fraudulent pretenses, representations or promises, as charged in the indictment;
and
Second, that the defendant knowingly carried out and attempted to carry out the scheme;
and
Third, that the defendant acted with the intent to defraud; and
Fourth, that the scheme involved a materially false or fraudulent pretense, representation,
or promise, and
Fifth, at the time of the charged offense the deposits of the bank or other financial
institution were insured by the Federal Deposit Insurance Corporation.
Sentencing Provisions
10. The parties agree to waive the time limits in Fed. R. Crim. P. 32 relating to the
presentence report, including that the presentence report be disclosed not less than 35 days
before the sentencing hearing, in favor of a schedule for disclosure, and the filing of any
objections, to be established by the court at the change of plea hearing.
11. The parties acknowledge, understand, and agree that any sentence imposed by the
court will be pursuant to the Sentencing Reform Act, and that the court will give due regard to
the Sentencing Guidelines when sentencing the defendant.
12. The parties acknowledge and agree that they have discussed all of the sentencing
guidelines provisions, which they believe to be applicable to the offense set forth Attachment A.
The defendant acknowledges and agrees that his attorney in turn has discussed the applicable
sentencing guidelines provisions with him to the defendant's satisfaction.
13. The parties acknowledge and understand that prior to sentencing the United States
Probation Office will conduct its own investigation of the defendant's criminal history. The
parties further acknowledge and understand that, at the time the defendant enters a guilty plea,
the parties may not have full and complete information regarding the defendant's criminal
history. The parties acknowledge, understand, and agree that the defendant may not move to
withdraw the guilty plea solely as a result of the sentencing court's determination of the
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defendant's criminal history.
Sentencing Guidelines Calculations
14. The defendant acknowledges and understands that the sentencing guidelines
recommendations contained in this agreement do not create any right to be sentenced within any
particular sentence range, and that the court may impose a reasonable sentence above or below
the guideline range. The parties further understand and agree that if the defendant has provided
false, incomplete, or inaccurate information that affects the calculations, the government is not
bound to make the recommendations contained in this agreement.
Relevant Conduct
15. The parties acknowledge, understand, and agree that pursuant to Sentencing
Guidelines Manual § 1B1.3, the sentencing judge may consider relevant conduct in calculating
the sentencing guidelines range, even if the relevant conduct is not the subject of the offense to
which the defendant is pleading guilty.
Base Offense Level
16. The parties agree to recommend to the sentencing court that the applicable base
offense level for the offense charged in Count Two of the Indictment is seven (7) under
Sentencing Guidelines Manual § 2B1.1(a)(1).
Specific Offense Characteristics
17. The parties further agree that a 14-level increase for a loss exceeding $550,000
under Sentencing Guidelines Manual § 2B1.1(b)(1)(H) is applicable to the offense level for the
offense charged in Count Two of the Indictment.
18. The parties further agree that a 2-level increase for an offense involving
sophisticated means under Sentencing Guidelines Manual § 2B 1.1(b)(10) is applicable to the
offense level for the offense charged in Count Two of the Indictment.
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19. The government will seek a 2-level increase for the defendant's role as an
organizer, leader, manager, or supervisor under Sentencing Guidelines Manual § 3B1.1(c) for the
offense charged in Count Two of the Indictment.
20. The government will seek a 2-level increase for obstructing or impeding the
administration of justice under Sentencing Guidelines Manual § 3B1.1(c) for the offense charged
in Count Two of the Indictment.
Acceptance of Responsibility
21. The government agrees to recommend a two-level decrease for acceptance of
responsibility as authorized by Sentencing Guidelines Manual § 3E1.1(a), but only if the
defendant exhibits conduct consistent with the acceptance of responsibility. In addition, if the
court determines at the time of sentencing that the defendant is entitled to the two-level reduction
under § 3E1.1(a), the government agrees to make a motion recommending an additional one-
level decrease as authorized by Sentencing Guidelines Manual § 3E1.1(b) because the defendant
timely notified authorities of his intention to enter a plea of guilty.
Sentencing Recommendations
22. Both parties reserve the right to provide the district court and the probation office
with any and all information which might be pertinent to the sentencing process, including but
not limited to any and all conduct related to the offense as well as any and all matters which
might constitute aggravating or mitigating sentencing factors.
23. Both parties reserve the right to make any recommendation regarding any other
matters not specifically addressed by this agreement.
24. The government agrees to recommend a sentence within the applicable sentencing
guideline range, as determined by the court.
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Court's Determinations at Sentencing
25. The parties acknowledge, understand, and agree that neither the sentencing court
nor the United States Probation Office is a party to or bound by this agreement. The United
States Probation Office will make its own recommendations to the sentencing court. The
sentencing court will make its own determinations regarding any and all issues relating to the
imposition of sentence and may impose any sentence authorized by law up to the maximum
penalties set forth in paragraph 7 above. The parties further understand that the sentencing court
will be guided by the sentencing guidelines but will not be bound by the sentencing guidelines
and may impose a reasonable sentence above or below the calculated guideline range.
26. The parties acknowledge, understand, and agree that the defendant may not move
to withdraw the guilty plea solely as a result of the sentence imposed by the court.
Financial Matters
27. The defendant acknowledges and understands that any and all financial
obligations imposed by the sentencing court are due and payable in full upon entry of the
judgment of conviction. The defendant further understands that any payment schedule imposed
by the sentencing court shall be the minimum the defendant is expected to pay and that the
government's collection of any and all court imposed financial obligations is not limited to the
payment schedule. The defendant agrees not to request any delay or stay in payment of any and
all financial obligations. If the defendant is incarcerated, the defendant agrees to participate in
the Bureau of Prisons' Inmate Financial Responsibility Program, regardless of whether the court
specifically directs participation or imposes a schedule of payments.
28. The defendant agrees to provide to the Financial Litigation Unit (FLU) of the
United States Attorney's Office, at least 45 days before sentencing, and also upon request of the
FLU during any period of probation or supervised release imposed by the court, a complete and
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sworn financial statement on a form provided by FLU and any documentation required by the
form. The defendant further agrees, upon request of FLU, whether made before or after
sentencing, to promptly: cooperate in the identification of assets in which the defendant has an
interest and cooperate in the liquidation of any such assets.
Special Assessment
29. The defendant agrees to pay the special assessment in the amount of $100 prior to
or at the time of sentencing.
Restitution
30. The parties acknowledge and understand that the government will recommend to
the sentencing court that restitution be ordered and that it be apportioned among co-schemers to
reflect the level of contribution to the victim's loss and economic circumstances of each
conspirator pursuant to Title 18, United States Code, Section 3664(h). The defendant
understands that because restitution for the offense is mandatory, the amount of restitution shall
be imposed by the court regardless of the defendant's financial resources.
31. The defendant agrees to pay restitution as ordered by the sentencing court. The
defendant agrees to cooperate in efforts to collect any restitution obligation. The defendant
understands that imposition or payment of restitution will not restrict or preclude the filing of
any civil suit or administrative action.
Forfeiture
32. The defendant understands that by pleading guilty, he will subject to forfeiture to
the United States all right, title, and interest that he has in any property constituting or derived
from proceeds obtained from the offense.
33. The defendant acknowledges that as part of his sentence, the Court will decide, by
a preponderance of the evidence, whether the government has established the requisite nexus
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between the offense and any specific property alleged to be subject to forfeiture and the amount
of a personal money judgment he must pay.
Defendant's Waiver of Rights
34. In entering this agreement, the defendant acknowledges and understands that he
surrenders any claims he may have raised in any pretrial motion, as well as certain rights which
include the following:
a. If the defendant persisted in a plea of not guilty to the charges against him,
he would be entitled to a speedy and public trial by a court or jury. The defendant has a right to a
jury trial. However, in order that the trial be conducted by the judge sitting without a jury, the
defendant, the government and the judge all must agree that the trial be conducted by the judge
without a jury.
b. If the trial is a jury trial, the jury would be composed of twelve citizens
selected at random. The defendant and his attorney would have a say in who the jurors would be
by removing prospective jurors for cause where actual bias or other disqualification is shown, or
without cause by exercising peremptory challenges. The jury would have to agree unanimously
before it could return a verdict of guilty. The court would instruct the jury that the defendant is
presumed innocent until such time, if ever, as the government establishes guilt by competent
evidence to the satisfaction of the jury beyond a reasonable doubt.
c. If the trial is held by the judge without a jury, the judge would find the
facts and determine, after hearing all of the evidence, whether or not he was persuaded of
defendant's guilt beyond a reasonable doubt.
d. At such trial, whether by a judge or a jury, the government would be
required to present witnesses and other evidence against the defendant. The defendant would be
able to confront witnesses upon whose testimony the government is relying to obtain a
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conviction and he would have the right to cross-examine those witnesses. In turn the defendant
could, but is not obligated to, present witnesses and other evidence on his own behalf. The
defendant would be entitled to compulsory process to call witnesses.
e. At such trial, defendant would have a privilege against self-incrimination
so that he could decline to testify and no inference of guilt could be drawn from his refusal to
testify. If defendant desired to do so, he could testify on his own behalf.
35. The defendant acknowledges and understands that by pleading guilty he is
waiving all the rights set forth above. The defendant further acknowledges the fact that his
attorney has explained these rights to him and the consequences of his waiver of these rights.
The defendant further acknowledges that as a part of the guilty plea hearing, the court may
question the defendant under oath, on the record, and in the presence of counsel about the
offense to which the defendant intends to plead guilty. The defendant further understands that
the defendant's answers may later be used against the defendant in a prosecution for perjury or
false statement.
36. The defendant acknowledges and understands that he will be adjudicated guilty of
the offense to which he will plead guilty and thereby may be deprived of certain rights, including
but not limited to the right to vote, to hold public office, to serve on a jury, to possess firearms,
and to be employed by a federally insured financial institution.
37. The defendant knowingly and voluntarily waives all claims he may have based
upon the statute of limitations, the Speedy Trial Act, and the speedy trial provisions of the Sixth
Amendment. The defendant agrees that any delay between the filing of this agreement and the
entry of the defendant's guilty plea pursuant to this agreement constitutes excludable time under
the Speedy Trial Act.
38. The defendant knowingly and voluntarily waives any claim or objection he may
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have based on statute of limitations.
39. The defendant knowingly and voluntarily waives his right to appeal his sentence
in this case and further waives his right to challenge his conviction or sentence in any post-
conviction proceeding, including but not limited to a motion pursuant to 28 U.S.C. Section
2255. This waiver does not extend to an appeal or post-conviction motion based on (1) any
punishment in excess of the statutory maximum, (2) the sentencing court's reliance on any
constitutionally impermissible factor, and (3) ineffective assistance of counsel.
Further Civil or Administrative Action
40. The defendant acknowledges, understands, and agrees that the defendant has
discussed with his attorney and understands that nothing contained in this agreement, including
any attachment, is meant to limit the rights and authority of the United States of America or any
other state or local government to take further civil, administrative, or regulatory action against
the defendant, including but not limited to any listing and debarment proceedings to restrict
rights and opportunities of the defendant to contract with or receive assistance, loans, and
benefits from United States government agencies.
General Matters
41. The parties acknowledge, understand, and agree that this agreement does not
require the government to take, or not to take, any particular position in any post-conviction
motion or appeal.
42. The parties acknowledge, understand, and agree that this plea agreement will be
filed and become part of the public record in this case.
43. The parties acknowledge, understand, and agree that the United States Attorney's
office is free to notify any local, state, or federal agency of the defendant's conviction.
44. The defendant understands that pursuant to the Victim and Witness Protection
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Act, the Justice for All Act, and regulations promulgated thereto by the Attorney General of the
United States, the victim of a crime may make a statement describing the impact of the offense
on the victim and further may make a recommendation regarding the sentence to be imposed.
The defendant acknowledges and understands that comments and recommendations by a victim
may be different from those of the parties to this agreement.
Effect of Defendant's Breach of Plea Aereement
45. The defendant acknowledges and understands if he violates any term of this
agreement at any time, engages in any further criminal activity prior to sentencing, or fails to
appear for sentencing, this agreement shall become null and void at the discretion of the
government. If this plea agreement is revoked or if the defendant's conviction ultimately is
overturned, then the government retains the right to file any and all charges which were not filed
because of this agreement. The defendant hereby knowingly and voluntarily waives any defense
based on the applicable statute of limitations for any charges filed against the defendant as a
result of his breach of this agreement. The defendant understands, however, that the government
may elect to proceed with the guilty plea and sentencing. If the defendant and his attorney have
signed a proffer letter in connection with this case, then the defendant further acknowledges and
understands that he continues to be subject to the terms of the proffer letter.
Voluntariness of Defendant's Plea
46. The defendant acknowledges, understands, and agrees that he will plead guilty
freely and voluntarily because he is in fact guilty. The defendant further acknowledges and
agrees that no threats, promises, representations, or other inducements have been made, nor
agreements reached, other than those set forth in this agreement, to induce the defendant to plead
guilty.
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ACKNOWLEDGMENTS
I am the defendant. I am entering into this plea agreement freely and voluntarily. I am not now
on or under the influence of any drug, medication, alcohol, or other intoxicant or depressant,
whether or not prescribed by a physician, which would impair my ability to understand the terms
and conditions of this agreement. My attorney has reviewed every part of this agreement with
me and has advised me of the implications of the sentencing guidelines. I have discussed all
aspects of this case with my attorney and I am satisfied that my attorney has provided effective
assistance of counsel.
Date: or
THOMAS SMITH
Defendant
I am the defendant's attorney. I carefully have reviewed every part of this agreement with the
defendant. To my knowledge, my client's decision to enter into this agreement is an informed
and voluntary one.
Date:
For the United States of America:
Date: 1/22/2021 Lazz a t Sap
LAURA CONNELIJ/
LESLIE S. GARTHWAITE
Trial Attorneys
U.S. Department of Justice
Criminal Division, Fraud Section
HEW KRUEGER
e k United States Attorney
Eastern 11) 'strict of Wisconsin
PHEN INGRAHAM
Assistant United States Attorney
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Attachment A
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UNITED WW , COURT
EASTERIEIMWTO ONSIN
FILRO
UNITED STATES OF AMERICA, 702P OCT 20 P 25
Plaintiff. CLERK OF 4 ALED
2 0 anfai 9 6
V. Case No. 20-CR-
[18 U.S.C. §§ 1344, 1957, and 2]
THOMAS E. SMITH,
STEPHEN E. SMITH,
SAMUEL A. DAVIS,
ROBERT HAMILTON, and
JONATHAN E. HENLEY,
Defendants.
INDICTMENT
THE GRAND JURY CHARGES THAT:
BACKGROUND
At all times material to this Indictment:
The Defendants and Relevant Entities
1. THOMAS E. SMITH was a resident of Pewaukee, Wisconsin, and the registered
agent of T & T Holdings LLC ("T&T Holdings"), a Wisconsin limited liability company. T&T
Holdings was administratively dissolved on or about March 20, 2017.
2. STEPHEN E. SMITH was a resident of Milwaukee, Wisconsin, and the registered
agent of CFA Auto Transport LLC ("CFA"), a Wisconsin limited liability company, and Complete
Fundamentals, Inc. ("Complete Fundamentals"), a Wisconsin non-stock corporation. S. SMITH
was also the organizer of New Beginnings Family Services LLC ("New Beginnings"), a Wisconsin
limited liability company.
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3. SAMUEL A. DAVIS was a resident of Chicago, Illinois, and the registered agent
and president of Davis Development Group Inc. ("Davis Development"), an Illinois corporation.
4. ROBERT HAMILTON was a resident of Milwaukee, Wisconsin, and the president
and registered agent of Glory Transportation Services, LLC ("Glory Transportation"), a Wisconsin
limited liability company.
5. JONATHAN E. HENLEY was a resident of Chicago, Illinois, and the manager and
one of the registered agents of Premier Logistic Solutions LLC ("Premier Logistic"), an Illinois
limited liability company.
6. Individual 1 was a resident of Milwaukee, Wisconsin, and the registered agent of
Rebels Paris, LLC ("Rebels"), a Wisconsin limited liability company.
7. Individual 2 was a resident of Milwaukee, Wisconsin, and the registered agent of
Comfort Care Transit LLC ("Comfort Care"), a Wisconsin limited liability company.
8. Individual 3 was a resident of Milwaukee, Wisconsin. On or about May 21, 2020,
Individual 3 fled paperwork with the State of Wisconsin establishing himself as the registered
agent of New Beginnings.
The Sinai! Business Administration
9. 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.
10. As part of this effort, the SBA enabled and provided for loans through banks, credit
unions, and other lenders. These loans had government-backed guarantees.
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The Paycheck Protection Program
11. The Coxonavirus Aid, Relief, and Economic Security ("CARES") Act was a federal
law enacted in or around March 2020 and designed to provide emergency fmancial assistance to
the millions of Americans who are suffering the economic effects caused by the COVID-19
pandemic.
12. One source of relief that the CARES Act provided was the authorization of up to
$349 billion in forgivable loans to small businesses for payroll, mortgage interest, rent/lease, and
utilities, through a program referred to as the Paycheck Protection Program ("PPP"). In April
2020, Congress authorized up to $310 billion in additional PPP funding.
13. The PPP allowed qualifying small businesses and other organizations to receive PPP
loans. Businesses were required to use PPP loan proceeds on 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 these expense items within a designated period
of time and used a certain percentage of the PPP loan proceeds on payroll expenses.
14. The amount of a PPP loan that a small business was entitled to receive was
determined by the number of employees employed by the business and the business's average
monthly payroll costs.
15. In order to obtain a PPP loan, a qualifying 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, the small business (through its authorized representative) 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
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eligible to receive under the PPP. In addition, businesses applying for a PPP loan had to provide
documentation showing their payroll expenses.
16. The SBA oversaw the PPP. However, individual PPP loans were issued by private,
approved lenders who received and processed PPP applications and supporting documentation,
and then made loans using the lenders' own funds, which were 100% 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 to the SBA in the course of
processing the loan.
Relevant Financial Institutions
17. Financial Institution 1 was a federally insured financial institution and member of
the Federal Home Loan Bank System headquartered in Green Bay, Wisconsin. Financial
Institution I was an approved SBA lender and participated as a PPP lender to small businesses.
18. Financial Institution 2 was a Federal Deposit Insurance Corporation-insured bank
headquartered in Minneapolis, Minnesota.
19. Credit Union 1 was a nationally insured credit union headquartered in Racine,
Wisconsin.
COUNTS ONE THROUGH SIX
Bank Fraud— 18 U.S.C. § 1344 and § 2
20. The Grand Jury re-alleges and incorporates by reference the factual allegations
contained in paragraphs 1 through 19 of this Indictment as if fully set forth herein.
The Scheme to Defraud
21. From in or about April 2020 through in or about July 2020, in the State and Eastern
District of Wisconsin and elsewhere,
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THOMAS E. SMITH,
STEPHEN E. SMITH,
SAMUEL A. DAVIS,
ROBERT HAMILTON, and
JONATHAN E. HENLEY,
and others known and unknown to the Grand Jury, and aided and abetted by each other, did
knowingly execute and attempt to execute a scheme and artifice to defraud Financial Institution 1,
and to obtain, by means of materially false and fraudulent pretenses, representations, and promises,
and by omission of material facts, certain moneys, funds, credits, assets, securities, and other
property owned by and under the custody and control of Financial Institution I.
The Purpose of the Scheme and Artifice
22. It was the purpose of the scheme for defendants T. SMITH, S. SMITH, DAVIS,
HAMILTON, and HENLEY, and others known and unknown to the Grand Jury, to unlawfully
enrich themselves by: (a) submitting false and fraudulent PPP loan applications to financial
institutions falsely representing that the applicant entities were functional and operational
businesses and falsely promising to use the fund proceeds on covered business expenses, and
(b) concealing and causing the concealment of these false and fraudulent applications.
Manner and Means of the Scheme
23. It was part of the scheme that defendants T. SMITH, S. SMITH, DAVIS,
HAMILTON, HENLEY, Individual 1, Individual 2, Individual 3, and others, submitted and caused
to be submitted fraudulent PPP loan applications to Financial Institution 1 for the purpose of
obtaining funds from Financial Institution 1.
24, It was further part of the scheme that each of the PPP loan applications falsely
claimed that the PPP loan applicant company was in operation as of February 15, 2020, when in
fact it was not, and that it employed individuals for whom it paid salaries and payroll taxes, or paid
independent contractors (as reported on IRS Form 1099-MISC). In fact, CFA, Davis
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Development, New Beginnings, Comfort Care, and Premier Logistic were not in operation in
February 2020. Specifically:
a. CFA's loan application falsely claimed that it was operational as of February 15,
2020, when in fact it was not and went into "delinquent" status with the Wisconsin Department of
Financial Institutions ("WDFI") on or about July 1, 2019. CFA's application did not report that
S. SMITH restored the active status of CFA with WDFI on or about May 5, 2020.
b. Davis Development's loan application falsely claimed that it was operational as of
February 15, 2020, when in fact Davis Development had been administratively dissolved with the
Illinois Secretary of State ("ILSOS") as of on or about August 10, 2018. Davis Development's
application did not report that DAVIS reinstated the company on or about May 2, 2020.
c. New Beginnings' loan application falsely claimed that it was operational as of
February 15, 2020, when in fact New Beginnings had been administratively dissolved with WDFI
as of on or about April 13, 2020. New Beginnings' application did not report that S. SMITH
reinstated the company on or about May 1, 2020.
d. Comfort Care's loan application falsely claimed that it was operational as of
February 15, 2020, when in fact Comfort Care was administratively dissolved with WDFI on June
13, 2017. Comfort Care's application did not report that Individual 2 restored the active status of
Comfort Care with WDFI on or about May 12, 2020.
e. Premier Logistic's loan application falsely claimed that it was operational as of
February 15, 2020, when in fact Premier Logistic had been administratively dissolved with the
ILSOS as of on or about June 14, 2019. Premier Logistic's application did not report that
HENLEY reinstated the company on or about May 14, 2020.
25. It was further part of the scheme that each of the PPP loan applications falsely
certified that the PPP loan applicant company employed individuals for whom it paid salaries and
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payroll taxes, or paid independent contractors (as reported on IRS Form 1099-M1SC) and falsely
represented the number of employees each company employed. Each of the PPP loan applications
also included falsified Employer's Quarterly Federal Tax Returns (IRS Forms 941) for each
quarter of 2019 and the first quarter of 2020. In fact, none of the businesses had filed Roans 941
in any quarter of 2019 or the first quarter of 2020, meaning that the company had no employees
for which federal taxes were paid during that period. Specifically:
a. CFA' s loan application falsely claimed that its average monthly payroll was
$97,000 and that it employed 38 people.
b. Comfort Care's loan application falsely claimed that its average monthly payroll
was $92,000 and that it employed 23 people.
c. Davis Development's loan application falsely claimed that its average monthly
payroll was $71,000 and that it employed 20 people.
d. New Beginnings' loan application falsely claimed that its average monthly payroll
was $92,000 and that it employed 28 people.
e. Premier Logistic's loan application falsely claimed that its average monthly payroll
was $85,000 and that it employed 23 people.
f. Rebels' loan application falsely claimed that Rebels' average monthly payroll was
$62,000 and that it employed 17 people.
g. Glory Transportation's loan application falsely claimed that Glory Transportation's
average monthly payroll was $62,000 and that it employed 14 people.
26. It was further part of the scheme that defendants T. SMITH, S. SMITH, DAVIS,
HAMILTON, HENLEY, Individual 1, Individual 2, Individual 3, and others falsely represented
the intended use of the funds, claiming that the funds would be used for legitimate business
expenses. Specifically, CFA, Comfort Care, Davis Development, New Beginnings, Premier
7
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 20 of 37 Document 53
Logistic, and Rebels' loan applications each falsely claimed that it intended to spend loan proceeds
on payroll, lease or mortgage expenses, interest, and utilities. In fact, the loan funds were used
for, among other things, personal expenses and other non-business expenses.
27. It was further part of the scheme that defendants T. SMITH, S. SMITH, DAVIS,
HENLEY, Individual 1, Individual 2, Individual 3, and others opened or directed others to open
bank accounts at Financial Institution 1 to facilitate and expedite obtaining PPP loan funds,
including:
a. On or about May 5, 2020, S. SMITH opened bank account No. x8659 at Financial
Institution 1 in the name of CFA.
b. On or about May 5, 2020, DAVIS opened bank account No. x8733 at Financial
Institution 1 in the name of Davis Development.
c. On or about May 8, 2020, Individual 1 opened bank account No. x9383 at Financial
Institution I in the name of Rebels.
d. On or about May 13, 2020, Individual 2 opened bank account No. x2840 at
Financial Institution I in the name of Comfort Care.
e. On or about May 19, 2020, HENLEY opened bank account No. x7764 at Financial
Institution 1 in the name of Premier Logistic.
f. On or about May 22, 2020, Individual 3 opened bank account No. x6862 at
Financial Institution 1 in the name of New Beginnings.
28. It was further part of the scheme that after the PPP loans were deposited into the
applicant company's bank account at Financial Institution 1, defendants T. SMITH, S. SMITH,
DAVIS, HAMILTON, Individual 1, Individual 2, and Individual 3 transferred or directed the
transfer of the loan proceeds to each other, and to entities controlled by one of the defendants,
enabling them to enrich themselves from the loan proceeds.
8
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 21 of 37 Document 53
1
29. It was further part of the scheme that when defendants T. SMITH, S. SMITH,
DAVIS, HAMILTON, HENLEY, Individual 1, Individual 2, and Individual 3 learned that
Financial Institution I froze or inquired about their loan applications, that Defendants, Individual
I, Individual 2, and Individual 3 took steps to misrepresent, conceal, hide and cause to be
misrepresented, concealed, and hidden, the existence, purpose, and acts done in furtherance of the
scheme.
30. It was further part of thc scheme that in total, at least approximately $960,000 was
provided to Defendants, Individual 1, Individual 2, and Individual 3 in fraudulently obtained loan
proceeds, and an additional $442,500 was attempted to be fraudulently obtained by Defendants,
Individual I, Individual 2, and Individual 3.
Executions
31. On or about the following dates, in the State and Eastern District of Wisconsin and
elsewhere, Defendants T. SMITH, S. SMITH, DAVIS, HAMILTON, and HENLEY, aided and
abetted by each other and by others known and unknown to the Grand Jury, did knowingly execute
and attempt to execute the above-described scheme to defraud by committing and willfully causing
others to commit the following acts, each of which constituted an execution of the fraudulent
scheme:
,, t.,,,, ,.• IA.,cnot_ —;,.' `-' ' _-.. ,,, , .0.4 ',,
( aqui e et s 1 . T'i'( e.
"-1-- ). ; i 1 ,,,
, , - , '
' P , 4 4 "1 1 c, ,-
-,' , • rviTX ,
Submission of fraudulent PPP loan
T. SMITH April 26,
1 application for Davis Development to $177,500
DAVIS 2020
Financial Institution 1
Submission of fraudulent PPP loan
T. SMITH
2 May 1,2020 application for CFA to Financial Institution $242,500
S.SIVIITH
1
Submission of fraudulent PPP loan
T. SMITH
3 May 1, 2020 application for Glory Transportation to $155,000
HAMILTON
Financial Institution 1
9
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 22 of 37 Document 53
Pi* p4m4te
iko*iipi0: -:-. .... ,.
.- --'ili• s '
MIA • YerciiiIii
qt;-,- 'Ilikd r
. , .. •Sou i Pv, : ght
. bitt.''
Submission of fraudulent PPP loan
T. SMITH
May 8,2020 application for Rebels to Financial $155,000
S. SMITH
Institution 1
Submission of fraudulent PPP loan
T.swum May 15, 2020 application for Comfort Care to Financial $230,000
Institution 1
Submission of fraudulent PPP loan
T. SMITH
May 20, 2020 application for Premier Logistic to Financial $212,500
HENLEY
Institution 1
Each in violation of Title 18, United States Code, Sections 1344(2) and 2.
10
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 23 of 37 Document 53
COUNTS SEVEN THROUGH FOURTEEN
Money Laundering— 18 U.S.C. § 1957
32. The Grand Jury rc-alleges and incorporates by reference the factual allegations
contained in paragraphs 1 through 31 of this Indictment as if fully set forth herein.
33. On the dates specified below, in the State and Eastern District of Wisconsin and
elsewhere, Defendants T. SMITH, S.SMITH, DAVIS, and HAMILTON, aided and abetted by
each other and by others known and unknown to the Grand Jury, knowingly engaged in, attempted
to engage in, and caused others to engage in a monetary transaction by, through, and to a financial
institution, affecting interstate and foreign commerce, knowing that such transaction involved
criminally derived property of a value greater than $10,000, such property having been derived
from a specified unlawful activity, that is, bank fraud, in violation of Title 18, United States Code,
Section 1344:
Approximate
COMit- Defendant(s) Description of Transaction
_ ..
Date ,
Cashier's check for approximately $30,000
withdrawn from Glory Transportation's Financial
7 HAMILTON May 6, 2020
Institution 1 account No. x2240, written to T.
SMITH.
Cashier's check for approximately $50,000
withdrawn from Glory Transportation's Financial
8 HAMILTON May 8, 2020 Institution 1 account No. x2240, deposited into Credit
Union 1 account No. x2707, held in the name of
HAMILTON.
Cashier's check for approximately $20,000
withdrawn from Rebels' Financial Institution 1
9 T. SMITH May 18, 2020 account No. x9383, deposited into Financial
Institution 1 account ending in 1719, held in the
name of T&T Holdings.
Cashier's check for approximately $20,000
withdrawn from Rebels' account No. x9383,
deposited into Financial Institution 2 account No.
10 S. SMITH May 18,2020
x4088, held in the name of S. SMITH d/b/a Complete
Fundamentals.
11
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 24 of 37 Document 53
Approximate -
Count ,Defendant(s)
_ , .„ • - - Deseription of Transaction
Cashier's check for approximately $40,000
withdrawn from Comfort Care's Financial Institution
11 F. SMITH May 20, 2020 1 account No. x2840, deposited into Financial
Institution 1 account No. x4241, held in the name of
T. SMITH.
Cashier's check for approximately $75,000
withdrawn from Davis Development's Financial
T. SMYITI
12 May 21, 2020 Institution 1 account No. x8733, deposited into
DAVIS
Financial Institution 1 account No. x1719, held in the
name of T&T Holdings.
Cashier's check for approximately $25,000
withdrawn from CFA's Financial Institution 1
T. SMITH
13 May 22, 2020 account No. x8659, deposited into Financial
S. SMITH
Institution 1 account No. x1719, held in the name of
T&T Holdings.
Cashier's check for approximately $25,000
withdrawn from CFA's Financial Institution 1
14 S. SMITH May 22, 2020 account No. x8659, deposited into Financial
Institution 2 account No. x4088, held in the name of
S. SMITH d/b/a Complete Fundamentals.
Each in violation of Title 18, United States Code, Section 1957 and Section 2.
12
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 25 of 37 Document 53
FORFEITURE ALLEGATIONS
The allegations contained in Counts 1-14 of this indictment are hereby realleged and
incorporated by reference for the purpose of alleging forfeiture. Upon conviction of an offense
alleged in Counts 114, Defendants shall forfeit to the United States, pursuant to Title 18, United
States Code, Section 981(a)(1)(C), by way of Title 28, United States Code, Section 2461(c), any
property that constitutes or is traceable to proceeds of the offense. This property includes, but is
not limited to, a sum of money reflecting the proceeds Defendants obtained from the offense.
The allegations contained in Counts 1-14 of this Indictment are hereby realleged and
incorporated by reference for the purpose of alleging forfeiture. Upon conviction of an offense
alleged in Counts 1-14, Defendants shall forfeit to the United States, pursuant to Title 18, United
States Code, Section 982(a)(1), any property involved in the offense, or any property traceable to
such property. This property includes, but is not limited to, a sum of money reflecting the proceeds
Defendants obtained from the offense.
If any of the above-described forfeitable property, as a result of any act or omission of the
Defendants,
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 divided without
difficulty;
it is the intent of the United States, pursuant to Title 21, United States Code, Section 853(p), and
Title 28, United States Code, Section 2461(c), to seek the forfeiture of any other property of the
13
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 26 of 37 Document 53
Defendants, up to the value of the above-dcseribed forfeitable property.
A TRUE BILL:
FOR :1)F,R SON
Dated: / - 2- °
•"-Z— MATTHEW D. KRU
United States Attorney
""Z.—DANIEL KAHN
Acting Chief, U.S. Department of Justice, Fraud Section
14
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 27 of 37 Document 53
Attachment B
The defendant admits that these facts are true and correct and establish his guilt beyond a
reasonable doubt:
The Paycheck Protection Program
1. The Coronavirus Aid, Relief, and Economic Security ("CARES") Act is a federal
law enacted in or around March 2020 and designed to provide emergency financial assistance to
the millions of Americans who are suffering the economic effects caused by the COVID-19
pandemic. One source of relief provided by the CARES Act was the authorization of up to $349
billion in forgivable loans to small businesses for job retention and certain other expenses,
through a program referred to as the Paycheck Protection Program ("PPP"). In or around April
2020, Congress authorized over $300 billion in additional PPP finding.
2. In order to obtain a PPP loan, a qualifying business must submit a PPP loan
application, which is signed by an authorized representative of the business. The PPP loan
application requires the business (through its authorized representative) to acknowledge the
program rules and make certain affirmative certifications, including that the business was in
operation on February 15, 2020, in order to be eligible to obtain the PPP loan. In the PPP loan
application, the small business (through its authorized representative) must state, among other
things, its: (a) average monthly payroll expenses; and (b) number of employees. These figures
are 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 must provide documentation showing their
payroll expenses.
3. A PPP loan application must be processed by a participating financial institution
(the lender). If a PPP loan application is approved, the participating financial institution funds
the PPP loan using its own monies, which are 100% guaranteed by 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, is transmitted by the lender to the
SBA in the course of processing the loan.
4. PPP loan proceeds must be used by the business on certain permissible
expenses payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest
and principal on the PPP loan to be entirely forgiven if the business spends the loan proceeds on
these expense items within a designated period of time after receiving the proceeds and uses a
certain amount of the PPP loan proceeds on payroll expenses.
5. The PPP is overseen by the SBA, which is headquartered at 409 3rd Street SW,
Washington, D.C. 20416, and has authority over all loans. Individual PPP loans, however, are
issued by private approved lenders (most commonly, banks and credit unions), which receive
and process PPP applications and supporting documentation, and then make loans using the
lenders' own funds.
6. Bank 1 is an SBA-approved lender headquartered in Green Bay, Wisconsin. At
the time of the charged offense, the deposits of Bank 1 were insured by the Federal Deposit
14
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 28 of 37 Document 53
Insurance Corporation.
7. As described in more detail below, the defendant caused the submission of eight
fraudulent PPP loans seeking approximately $1,250,000 in total.
Participants in the Schemes
8. The defendant was a resident of Pewaukee, Wisconsin and the registered agent of
T & T Holdings LLC ("T&T Holdings"), a Wisconsin limited liability company.
9. Co-Conspirator 2 ("CC-2") was the registered agent of CFA Auto Transport LLC
("CFA"), a Wisconsin limited liability company. CC-2 was also the organizer of New
Beginnings Family Services LLC ("New Beginnings"), a Wisconsin limited liability company.
10. Marvin Fitzgerald ("Fitzgerald") was a resident of Milwaukee, Wisconsin. On or
about May 21, 2020, Fitzgerald filed paperwork with the State of Wisconsin establishing himself
as the registered agent of New Beginnings.
11. Deon Petty ("Petty") was the registered agent of Rebels Paris, LLC ("Rebels"), a
Wisconsin limited liability company.
12. Jonathan Henley ("Henley") was the manager and one of the registered agents of
Premier Logistic Solutions LLC ("Premier Logistic"), an Illinois limited liability company.
13. Samuel Davis ("Davis") was the owner and registered agent of Davis
Development Group, Inc. ("Davis Development"), an Illinois corporation based in Chicago,
Illinois.
14. Robert Hamilton ("Hamilton") was the president and registered agent of Glory
Transportation Services, LLC ("Glory Transportation"), a Wisconsin limited liability company.
15. Co-Conspirator 8 ("CC-8") was the registered agent of Charisma Care Family
Services, LLC ("Charisma Care"), a Wisconsin limited liability company.
16. Tarone Woods ("Woods") was the owner and registered agent of Comfort Care
Transit LLC ("Comfort Care"), a Wisconsin limited liability company.
17. As of February 15, 2020, none of the above listed companies had any employees
for whom they paid salaries or payroll taxes, or independent contractors as reported on an IRS
Form 1099-MISC.
18. The defendant's scheme involved his facilitating the submission of fraudulent
loan applications for CC-2, CC-8, Fitzgerald, Petty, Henley, Davis, Hamilton, and Woods for
each of their companies, with the defendant receiving proceeds of each.
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The Fraudulent CFA PPP Loan Application to Bank 1
19. In or around April 2020, after the defendant had applied for and received PPP
loans for his own companies, CC-2 approached the defendant to help him obtain a PPP loan for
CFA. The defendant agreed to help CC-2 apply for a PPP loan for CFA by assisting CC-2 with
creating false documents to apply for the loan.
20. The defendant helped CC-2 create a fraudulent PPP loan application package for
CFA that requested a $242,500 PPP loan. Included with the loan application package were (1)
an SBA Form 2483 PPP Borrower Application Form; and (2) five IRS Forms 941 (Employer's
Quarterly Federal Tax Returns) purportedly reflecting CFA's payroll data from January 2019 to
March 2020 The CFA PPP application submitted to Bank 1 falsely stated that CFA's average
monthly payroll was $97,000 and that the company had 38 employees. The defendant knew that
none of this information was accurate when he helped to create the application.
21. The SBA Form 2483 that the defendant helped create falsely certified that CFA
was "in operation on February 15, 2020 and had employees for whom it paid salaries and payroll
taxes or paid independent contractors as reported on Form(s) 1099-MISC." The form further
falsely certified that the PPP loan funds would be "used to retain workers and maintain payroll or
make mortgage interest payments, lease payments, and utility payments, as specified under the
Paycheck Protection Program Rule." The form also acknowledged that failure to use the PPP
funds in accordance with the requirements of the PPP program, and making false statements in
support of the loan application, could result in criminal penalties.
22. The IRS Forms 941 included with the PPP loan application that the defendant
helped create falsely represented, among other things, that CFA had 38 employees. The
purported Form 941 for the first quarter of 2020, falsely represented that CFA had paid
$290,106.46 in wages, tips, and other compensation and had 38 employees. In fact, CFA made
no quarterly tax filings in 2019 or in the first quarter of 2020.
23. On or about May 1, 2020, CC-2 physically dropped off the CFA PPP application
at a Bank 1 branch. On or about May 6, 2020, Bank 1 approved the PPP loan and wired
approximately $242,500 to the CFA business checking account at Bank 1.
24. Before submitting the application, CC-2 agreed to pay the defendant part of the
PPP loan proceeds. After receiving the PPP funds, and at the defendant's direction, CC-2
obtained three cashier's checks totaling $65,000 payable to the defendant and two of his entities.
The Fraudulent Rebels PPP Loan Application to Bank 1
25. In or around May 2020, the defendant, CC-2, and Petty agreed to obtain a
fraudulent loan for Rebels from Bank 1. Petty provided CC-2 with certain information about
Rebels, including the company's address and tax identification number. The defendant agreed to
assist CC-2 with creating false documents to apply for the Rebels loan.
26. The defendant helped CC-2 create a fraudulent PPP loan application package for
Rebels that requested a $155,000 PPP loan. Included with the loan application package were (1)
16
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 30 of 37 Document 53
an SBA Form 2483 PPP Borrower Application Form; and (2) five IRS Forms 941 (Employer's
Quarterly Federal Tax Returns) purportedly reflecting Rebels' payroll data from January 2019 to
March 2020. The Rebels PPP application submitted to Associated Bank stated that Rebels'
average monthly payroll was $62,000 and that the company had 17 employees. The defendant
knew that none of this information was accurate when he created the application.
27. The SBA Form 2483 that the defendant helped create falsely certified that Rebels
was "in operation on February 15, 2020 and had employees for whom it paid salaries and payroll
taxes or paid independent contractors as reported on Form(s) 1099-MISC." The form further
falsely certified that the PPP loan funds would be "used to retain workers and maintain payroll or
make mortgage interest payments, lease payments, and utility payments, as specified under the
Paycheck Protection Program Rule." The form also acknowledged that failure to use the PPP
funds in accordance with the requirements of the PPP program, and making false statements in
support of the loan application, could result in criminal penalties.
28. The IRS Forms 941 that were included with the PPP loan application that the
defendant helped create falsely represented, among other things, that Rebels had 17 employees.
The purported Form 941 for the first quarter of 2020, falsely represented that Rebels had paid
$190,486.16 in wages, tips, and other compensation to its 17 employees. In fact, Rebels made no
quarterly tax filings in 2019 or in the first quarter of 2020.
29. On or about May 8, 2020, Bank 1 received the Rebels PPP application at a Bank 1
branch. On or about May 18, 2020, Bank 1 approved the PPP loan and wired approximately
$155,000 to the Rebels business checking account at Bank 1.
30. Petty agreed to pay the defendant and CC-2 part of the PPP loan proceeds. On or
about May 20, 2020, Petty distributed $45,000 to the defendant and two of his entities through
cashier's checks.
31. On or about June 7, 2020, Bank 1 froze the funds in the Rebels business account.
After Bank 1 froze the account, the defendant created a fake lease between his company, T&T
Holdings, and Rebels to explain the payment. The defendant provided the fake lease to both
Petty and Bank 1. When the defendant created the lease and provided it to Bank 1, he did not
plan to lease any property to Petty, and the defendant did not provide Petty with the property
identified in the lease. The defendant created the lease to conceal the true purpose of Petty's
payment to T&T Holdings.
The Fraudulent New Beginnings PPP Loan Application to Bank I
32. In or around May 2020, the defendant agreed to assist CC-2 and Fitzgerald in
obtaining a fraudulent loan for New Beginnings from Bank 1.
33. The defendant helped CC-2 create a fraudulent PPP loan application package for
New Beginnings that requested a $155,000 PPP loan. Included with the loan application
package were (1) an SBA Form 2483 PPP Borrower Application Form; and (2) five IRS Forms
941 (Employer's Quarterly Federal Tax Returns) purportedly reflecting New Beginnings' payroll
data from January 2019 to March 2020. Fitzgerald submitted the loan application to Bank 1.
17
Case 2:20-cr-00196-BHL Filed 01/22/21 Page 31 of 37 Document 53
The New Beginnings PPP application submitted to Bank 1 falsely stated that New Beginnings'
average monthly payroll was $92,000 and that the company had 28 employees. The New
Beginnings loan application was denied.
The Fraudulent Premier Logistic PPP Loan Application to Bank 1
34. In or around May 2020, Davis introduced Henley to the defendant to facilitate
getting a PPP loan for Premier Logistic. Henley provided the defendant with certain information
about Premier Logistic, including the company's address and tax identification number. The
defendant used this information to create false documents to apply for a PPP loan. In or around
May 2020, the defendant provided Henley with a completed Premier Logistic PPP loan
application containing false information about Premier Logistic, including false statements about
its operational status and employees. The defendant directed Henley to sign the application and
drop it off at a Bank 1 branch.
35. The fraudulent PPP loan application package for Premier Logistic that the
defendant created requested a $212,500 PPP loan for Premier Logistic. Included with the loan
application package were (1) an SBA Form 2483 PPP Borrower Application Form; and (2) five
IRS Forms 941 (Employer's Quarterly Federal Tax Returns) purportedly reflecting Premier
Logistic's payroll data from January 2019 to March 2020 The Premier Logistic PPP application
submitted to Bank 1 falsely stated that Premier Logistic's average monthly payroll was $85,000
and that the company had 23 employees. The defendant knew that none of this information was
accurate when he created the application.
36. The SBA Form 2483 that the defendant created falsely certified that Premier
Logistic was "in operation on February 15, 2020 and had employees for whom it paid salaries
and payroll taxes or paid independent contractors as reported on Form(s) 1099-MISC." The
form further falsely certified that the PPP loan funds would be "used to retain workers and
maintain payroll or make mortgage interest payments, lease payments, and utility payments, as
specified under the Paycheck Protection Program Rule." The form also acknowledged that
failure to use the PPP funds in accordance with the requirements of the PPP program, and
making false statements in support of the loan application, could result in criminal penalties.
37. The IRS Forms 941 that were included with the PPP loan application that the
defendant created falsely represented, among other things, that Premier Logistic had 23
employees. The purported Form 941 for the first quarter of 2020, falsely represented that
Premier Logistic had paid $255,789.45 in wages, tips, and other compensation to its 23
employees. In fact, Premier Logistic made no quarterly tax filings in 2019 or in the first quarter
of 2020.
38. On or about May 20, 2020, Henley physically dropped off the fraudulent PPP
loan application for Premier Logistic at a branch of Bank 1 in Wisconsin.
39. Before submitting the application, Henley agreed to pay the defendant part of the
PPP loan proceeds. Ultimately, Bank 1 did not approve the Premier Logistic PPP loan.
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Case 2:20-cr-00196-BHL Filed 01/22/21 Page 32 of 37 Document 53
The Fraudulent Davis Development PPP Loan Application to Bank 1
40. In or around April 2020, the defendant, CC-2, and Davis agreed to obtain a
fraudulent loan for Davis Development from Bank 1. In April 2020, Davis Development was
not operational and was not in good standing with the State of Illinois. The defendant sent Davis
$400 to be used towards the fee required to reinstate Davis Development with the State of
Illinois. Davis provided the defendant with certain information about Davis Development,
including the company's address and tax identification number. The defendant used this
information to create false documents to apply for a PPP loan. In or around May 2020, the
defendant provided Davis with a completed Davis Development PPP loan application containing
false information about Davis Development, including false statements about its operational
status and employees. The defendant directed Davis to sign the application and drop it off at a
Bank 1 branch.
41. The fraudulent PPP loan application package for Davis Development that the
defendant created, requested a $177,500 PPP loan for Davis Development. Included with the
loan application package were (1) an SBA Form 2483 PPP Borrower Application Form; and
(2) five IRS Forms 941 (Employer's Quarterly Federal Tax Returns) purportedly reflecting Davis
Development's payroll data from January 2019 to March 2020 The Davis Development PPP
application submitted to Bank 1 falsely stated that Davis Development's average monthly payroll
was $71,000 and that the company had 20 employees. The defendant knew that none of this
information was accurate when he created the application.
42. The SBA Form 2483 that the defendant created falsely certified that Davis
Development was "in operation on February 15, 2020 and had employees for whom it paid
salaries and payroll taxes or paid independent contractors as reported on Form(s) 1099-MISC."
The form further falsely certified that the PPP loan funds would be "used to retain workers and
maintain payroll or make mortgage interest payments, lease payments, and utility payments, as
specified under the Paycheck Protection Program Rule." The form also acknowledged that
failure to use the PPP funds in accordance with the requirements of the PPP program, and
making false statements in support of the loan application, could result in criminal penalties.
43. The IRS Forms 941 that were included with the PPP loan application that the
defendant created falsely represented, among other things, that Davis Development had 20
employees. The purported Form 941 for the first quarter of 2020, falsely represented that Davis
Development had paid $214,785.74 in wages, tips, and other compensation to its 20 employees.
In fact, Davis Development made no quarterly tax filings in 2019 or in the first quarter of 2020.
44. On or about May 6, 2020, Davis physically dropped off the application at a Bank
1 branch. On or about May 8, 2020, Bank I approved the PPP loan and wired approximately
$177,500 to the Davis Development business checking account at Bank 1.
45. Before submitting the application, Davis agreed to pay the defendant and CC-2
$75,000 of the PPP loan proceeds. After receiving the PPP funds, and at the defendant's
direction, Davis obtained a cashier's check from Davis Development's business checking
account for $75,000 payable to T&T Holdings. The defendant and CC-2 drove to the Davis's
home in Chicago and picked up the check.
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46. In or around June 2020, after Bank 1 had frozen some of the defendant's
accounts, the defendant contacted Davis. The defendant provided Davis with a fake joint venture
agreement by email and told Davis that he should sign it to make it look like the $75,000
payment was for an investment Davis Development was making with T&T Holdings into a
nursing home. The defendant created the fake joint venture agreement in order to provide it to
Bank 1 and conceal the true purpose of Davis's payment to T&T Holdings.
The Fraudulent Glory Transportation PPP Loan Application to Bank 1
47. In or around April 2020, Hamilton went to the defendant's office to discuss
getting the PPP loan for Glory Transportation. Hamilton provided the defendant with certain
information about Glory Transportation, including the company's address and tax identification
number. The defendant used this information to create false documents to apply for a PPP loan.
In or around May 2020, the defendant provided Hamilton with a completed Glory Transportation
PPP loan application containing false information about Glory Transportation, including false
statements about its operational status and employees. The defendant directed Hamilton to sign
the application and drop it off at a Bank 1 branch.
48. The fraudulent PPP loan application package for Glory Transportation that the
defendant created requested a $155,000 PPP loan. Included with the loan application package
were (1) an SBA Form 2483 PPP Borrower Application Form; and (2) five IRS Forms 941
(Employer's Quarterly Federal Tax Returns) purportedly reflecting Glory Transportation's
payroll data from January 2019 to March 2020 The Glory Transportation PPP application
submitted to Bank 1 falsely stated that Glory Transportation's average monthly payroll was
$62,000 and that the company had 14 employees. The defendant knew that none of this
information was accurate when he created the application.
49. The SBA Form 2483 that the defendant created falsely certified that Glory
Transportation was "in operation on February 15, 2020 and had employees for whom it paid
salaries and payroll taxes or paid independent contractors as reported on Form(s) 1099-MISC."
The form further falsely certified that the PPP loan funds would be "used to retain workers and
maintain payroll or make mortgage interest payments, lease payments, and utility payments, as
specified under the Paycheck Protection Program Rule." The form also acknowledged that
failure to use the PPP funds in accordance with the requirements of the PPP program, and
making false statements in support of the loan application, could result in criminal penalties.
50. The IRS Forms 941 that were included with the PPP loan application that the
defendant created falsely represented, among other things, that Glory Transportation had 14
employees. The purported Form 941 for the first quarter of 2020, falsely represented that Glory
Transportation had paid $188,673.45 in wages, tips, and other compensation to its 14 employees.
In fact, Glory Transportation made no quarterly tax filings in 2019 or in the first quarter of 2020.
51. On or about May 1,2020, Hamilton physically dropped off the application at a
Bank 1 branch. On or about May 5, 2020, Bank 1 approved the PPP loan and wired
approximately $155,000 to the Glory Transportation business checking account at Bank I.
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52. Before submitting the application, Hamilton agreed to pay the defendant $30,000
of the PPP loan proceeds. After receiving the PPP funds, and at the defendant's direction, on or
about May 6, 2020, Hamilton obtained a cashier's check from Glory Transportation's business
checking account for $30,000 payable to the defendant.
53. When Hamilton dropped off the cashier's check to the defendant, the defendant
directed Hamilton that if anyone asked about why Hamilton was paying the defendant money
from the loan, Hamilton should say that it was for equipment or vans. The defendant knew this
was false, because Hamilton paid the defendant only for completing the fraudulent loan
paperwork. During the conversation, the defendant also told Hamilton to pay CC-2 $10,000,
because CC-2 came up with the idea for Hamilton to apply for the loan. Hamilton declined to
pay CC-2.
The Fraudulent Charisma Care PPP Loan Application to Bank 1
54. In or around May 2020, the defendant and CC-8 agreed to obtain a fraudulent
loan for Charisma Care from Bank 1. CC-8 provided the defendant with certain information
about Charisma Care, including the company's address and tax identification number. The
defendant used this information to create false documents to apply for a PPP loan. In or around
May 2020, the defendant provided CC-8 with a completed Charisma Care PPP loan application
containing false information about Charisma Care, including false statements about its
operational status and employees. The defendant directed CC-8 to drop it off at a Bank 1 branch.
55. The fraudulent PPP loan application package for Charisma Care that the
defendant created requested a $107,500 PPP loan. Included with the loan application package
were (1) an SBA Form 2483 PPP Borrower Application Form; and (2) five IRS Forms 941
(Employer's Quarterly Federal Tax Returns) purportedly reflecting Charisma Care's payroll data
from January 2019 to March 2020. The Charisma Care PPP application submitted to Associated
Bank stated that Charisma Care's average monthly payroll was $43,000 and that the company
had 15 employees. The defendant knew that none of this information was accurate when he
created the application.
56. The SBA Form 2483 that the defendant created falsely certified that Charisma
Care was "in operation on February 15, 2020 and had employees for whom it paid salaries and
payroll taxes or paid independent contractors as reported on Form(s) 1099-MISC." The form
further falsely certified that the PPP loan funds would be "used to retain workers and maintain
payroll or make mortgage interest payments, lease payments, and utility payments, as specified
under the Paycheck Protection Program Rule." The form also acknowledged that failure to use
the PPP funds in accordance with the requirements of the PPP program, and making false
statements in support of the loan application, could result in criminal penalties.
57. The IRS Forms 941 that were included with the PPP loan application that the
defendant created falsely represented, among other things, that Charisma Care had 15
employees. The purported Form 941 for the first quarter of 2020, falsely represented that
Charisma Care had paid $127,8927.37 [sic] in wages, tips, and other compensation to its 15
employees. In fact, Charisma Care made no quarterly tax filings in 2019 or in the first quarter of
2020.
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58. In or around May 2020, CC-8 dropped off the application at a Bank 1 branch. On
or about May 6, 2020, Bank 1 approved the PPP loan and wired approximately $107,500 to the
Charisma Care business checking account at Bank 1.
59. Before submitting the application, CC-8 agreed to pay the defendant a portion of
the PPP loan proceeds. On or about May 20, 2020, at the defendant's direction, CC-8 obtained a
cashier's check from Charisma Care's business checking account for $40,000 payable to one of
the defendant's entities.
The Fraudulent Comfort Care PPP Loan Application to Bank 1
60. In or around May 2020, the defendant and Woods agreed to obtain a fraudulent
loan for Comfort Care from Bank 1. Woods provided the defendant with certain information
about Comfort Care, including the company's address and tax identification number. The
defendant used this information to create false documents to apply for a PPP loan. In or around
May 2020, the defendant provided Woods with a completed Comfort Care PPP loan application
containing false information about Comfort Care, including false statements about its operational
status and employees. The defendant directed Woods to sign the application and drop it off at a
Bank 1 branch.
61. The fraudulent PPP loan application package for Comfort Care that the defendant
created requested a $230,000 PPP loan. Included with the loan application package were (1) an
SBA Form 2483 PPP Borrower Application Form; and (2) five IRS Forms 941 (Employer's
Quarterly Federal Tax Returns) purportedly reflecting Comfort Care's payroll data from January
2019 to March 2020. The Comfort Care PPP application submitted to Associated Bank stated
that Comfort Care's average monthly payroll was $92,000 and that the company had 23
employees. The defendant knew that none of this information was accurate when he created the
application.
62. The SBA Form 2483 that the defendant created falsely certified that Comfort Care
was "in operation on February 15, 2020 and had employees for whom it paid salaries and payroll
taxes or paid independent contractors as reported on Form(s) 1099-MISC." The form further
falsely certified that the PPP loan funds would be "used to retain workers and maintain payroll or
make mortgage interest payments, lease payments, and utility payments, as specified under the
Paycheck Protection Program Rule." The form also acknowledged that failure to use the PPP
funds in accordance with the requirements of the PPP program, and making false statements in
support of the loan application, could result in criminal penalties.
63. The IRS Forms 941 that were included with the PPP loan application that the
defendant created falsely represented, among other things, that Comfort Care had 23 employees.
The purported Form 941 for the first quarter of 2020, falsely represented that Comfort Care had
paid $277,817.45 in wages, tips, and other compensation to its 23 employees. In fact, Comfort
Care made no quarterly tax filings in 2019 or in the first quarter of 2020.
64. On or about May 18, 2020, Woods physically dropped off the application at a
Bank 1 branch. On or about May 5, 2020, Bank 1 approved the PPP loan and wired
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approximately $230,000 to the Comfort Care business checking account at Bank 1.
65. Before submitting the application, Woods agreed to pay the defendant a portion of
the PPP loan proceeds. On or about May 20, 2020, at the defendant's direction, Woods obtained
three cashier's check from Comfort Care's business checking account for $115,000 payable to
the defendant and his entities.
False Statements to Bank 1
66. On or about June 8, 2020, a representative of Bank 1 called the defendant to ask
about the money he received from the PPP loans. The defendant made the following false
statements to the Bank 1 representative:
a. The $65,000 he received from CC-2 from the CFA loan was payment for
equipment and a trailer he sold to CC-2;
b. The $45,000 he received from Petty from the Rebels loan was an advance rent
payment;
c. The $75,000 he received from Davis from the Davis Development loan was for an
investment in the purchase of a nursing home; and
d. The $115,000 he received from Woods was for the purchase of a truck and a
couple of other vehicles.
None of these statements were true, and the defendant knew that they were false when he made
them. The defendant made the statements to conceal the true purpose of the payments.
67. On or about June 8, 2020, after speaking with the Bank 1 representative, the
defendant also created fake documents to conceal the true purpose of the payments to provide to
Bank 1. These documents included:
a. A fake Bill of Sale for a Ford F350 between the defendant and CFA;
b. A fake Bill of Sale for Ford F350 Super Duty between the defendant and Comfort
Care;
c. A fake Commercial Lease Agreement between T&T Holdings and Rebels; and
d. A fake Joint Venture Agreement between T&T Holdings and Davis Development.
Deleted Emails and Text Messages
68. In order to misrepresent, conceal, and hide the schemes, the defendant deleted
emails and text messages he sent and received related to the schemes. The defendant also
directed others, including Woods, to delete emails and text messages related to the schemes.
69. At all times, the defendant acted knowingly and intentionally.
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