Plea Agreement — United States v. Deon Petty (E.D. Wis.)
Summary
A plea agreement in United States of America v. Deon Petty in the United States District Court for the Eastern District of Wisconsin, filed November 2, 2020 as Document 4 in Case 2:20-cr-00199-BHL. Petty, represented by attorney Jeffrey Purnell, agrees to waive indictment and plead guilty to a one-count information alleging conspiracy under Title 18, United States Code, Section 371, which carries up to five (5) years and $250,000. The parties agree to a base offense level of six (6), a 10-level increase for a loss exceeding $150,000 and a 2-level increase for sophisticated means, and Petty agrees to cooperate. The factual basis states that Petty falsely told Bank 1 that Rebels had 17 employees, sent Bank 1 a false employee list on or about June 9, 2020, and repeated the 17-employee claim to FBI agents on or about July 7, 2020.
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Cite this document
“Plea Agreement — United States v. Deon Petty (E.D. Wis.).”
Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-2-20-cr-00199-dkt-4-e9cd2e6dc4/
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
UNITED STATES OF AMERICA,
Plaintiff,
v. Case No.
DEON PETTY,
Defendant.
PLEA AGREEMENT
1. The United States of America, by its attorneys, Daniel Kahn, Acting Chief, Fraud
Section, Department of Justice, Laura Connelly, Trial Attorney, Leslie S. Garthwaite, Trial
Attorneys, and the defendant, Deon Petty, individually and by attorney Jeffrey Purnell, 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 one-count information, which alleges a
violation of Title 18, United States Code, Section 371.
3. The defendant has read and fully understands the charge contained in the
information. He fully understands the nature and elements of the crime with which he has been
charged, and the charge and the terms and conditions of the plea agreement have been fully
explained to him by his attorney.
4. The defendant voluntarily agrees to waive prosecution by indictment in open
court.
5. The defendant voluntarily agrees to plead guilty to the following count set forth in
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full in the information, attached hereto as Attachment A.
6. The defendant acknowledges, understands, and agrees that he is, in fact, guilty of
the offense described in Attachment A. 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.
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: five (5)
years and $250,000. The count also carries a mandatory special assessment of $100 and a
maximum of three (3) 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 29 and 30 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 conspiracy
as set forth in the information, the government must prove each of the following propositions
beyond a reasonable doubt:
First, that the conspiracy as charged in Count One of the information existed;
Second, that the defendant knowingly became a member of the conspiracy with an intent
to advance the conspiracy; and
Third, one of the conspirators committed an overt act in an effort to advance a goal of the
conspiracy.
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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
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
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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 the information is six (6) under Sentencing Guidelines
Manual § 2B1.1(a)(2).
Specific Offense Characteristics
17. The parties further agree that a 10-level increase for a loss exceeding $150,000
under Sentencing Guidelines Manual § 2B1.1(b)(1)(F) is applicable to the offense level for the
offense charged in the information.
18. The parties further agree that a 2-level increase for an offense involving
sophisticated means under Sentencing Guidelines Manual § 2B1.1(b)(10) is applicable to the
offense level for the offense charged in the information.
Role in the Offense
19. Pursuant to Sentencing Guidelines Manual § 3B1.2, the parties acknowledge and
understand that the defendant will recommend to the sentencing court that a decrease for
mitigating role is applicable to the offense level for the offense charged in the information. The
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parties acknowledge and understand that the government may not join in this recommendation;
however, the government will advise the sentencing court with regard to any facts or law
relevant to this adjustment.
Acceptance of Responsibility
20. 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
21. 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.
22. Both parties reserve the right to make any recommendation regarding any other
matters not specifically addressed by this agreement.
23. The government agrees to recommend a sentence within the applicable sentencing
guideline range, as determined by the court.
Court’s Determinations at Sentencing
24. 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
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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.
25. 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
26. 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.
27. 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
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.
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Special Assessment
28. The defendant agrees to pay the special assessment in the amount of $100 prior to
or at the time of sentencing.
Restitution
29. The parties acknowledge and understand that the government will recommend to
the sentencing court that restitution be ordered and that it be apportioned among conspirators 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).
30. 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.
DEFENDANT’S COOPERATION
31. The defendant, by entering into this agreement, further agrees to fully and
completely cooperate with the government in its investigation of this and related matters, and to
testify truthfully and completely before the grand jury and at any subsequent trials or
proceedings, if asked to do so. The government agrees to advise the sentencing judge of the
nature and extent of the defendant’s cooperation. The parties acknowledge, understand and
agree that if the defendant provides substantial assistance to the government in the investigation
or prosecution of others, the government, in its discretion, may recommend a downward
departure from the applicable sentencing guideline range. The defendant acknowledges and
understands that the court will make its own determination regarding the appropriateness and
extent to which such cooperation should affect the sentence.
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DEFENDANT’S WAIVER OF RIGHTS
32. 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 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.
33. 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.
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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.
34. 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.
35. 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.
36. The defendant knowingly and voluntarily waives any claim or objection he may
have based on statute of limitations.
Further Civil or Administrative Action
37. 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.
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GENERAL MATTERS
38. 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.
39. The parties acknowledge, understand, and agree that this plea agreement will be
filed and become part of the public record in this case.
40. 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.
41. The defendant understands that pursuant to the Victim and Witness Protection
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 AGREEMENT
42. 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
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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
43. 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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Attachment A
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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.
October 31, 2020
Date: _______________ electronically signed - Deon Petty
____________________________________
DEON PETTY
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.
October 31, 2020
Date: _______________ electronically signed - Jeffrey W. Purnell
____________________________________
JEFFREY PURNELL
Attorney for Defendant
For the United States of America:
Date: October 31, 2020
_______________ Leslie S. Garthwaite
____________________________________
LAURA CONNELLY
LESLIE S. GARTHWAITE
Trial Attorneys
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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 funding.
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.
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The Co-Conspirators
7. The defendant was a citizen of the United States and resident of Wisconsin.
8. The defendant was the owner and registered agent of Rebels Paris, LLC
(“Rebels”), located in Milwaukee, Wisconsin. Rebel’s Employer Identification Number issued
by the U.S. Internal Revenue Service ended in 5567. Rebels has been registered as a Wisconsin
limited liability company since on or about March 14, 2019. As of February 15, 2020, Rebels
did not have any employees for whom it paid salaries or payroll taxes, or independent contractors
as reported on an IRS Form 1099-MISC.
9. The defendant agreed with Co-Conspirator 1 (CC-1), Co-Conspirator 2 (CC-2),
and Co-Conspirator 3 (CC-3) to submit a fraudulent application for a PPP loan for Rebels and
split the proceeds.
10. On or about May 8, 2020, at CC-2’s direction, the defendant opened a business
checking account for Rebels at Bank 1. The defendant was the sole authorized signatory on the
account.
The Fraudulent PPP Loan Application
11. In or around May 2020, CC-3 introduced the defendant to CC-2. CC-2 offered to
help the defendant get a loan for his business, Rebels, and the defendant agreed to assist CC-2 in
this effort. In exchange for helping Rebels get a loan, CC-2 requested that the defendant share a
portion of the loan proceeds once received. In response, and to accomplish the goals of their
agreement, the defendant provided CC-2 with the business information requested, including the
business address and EIN. In addition, the defendant met in person with CC-2 and another
individual in the parking lot near Bank 1, where defendant signed records he understood to be
part of the loan application materials.
12. On or about May 8, 2020, using information that the defendant provided about
Rebels, and the records signed by the defendant, CC-2 submitted a PPP loan application package
for Rebels to Bank 1, requesting a $155,000 PPP loan for Rebels. 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 Rebels’s
payroll data from January 2019 to March 2020 The Rebels PPP application submitted to Bank 1
falsely stated that Rebels’s average monthly payroll was $62,000 and that the company had 17
employees. The defendant did not review the loan package before it was submitted to the bank.
13. The SBA Form 2483 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.
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14. The IRS Forms 941 that were included with the PPP loan application, which the
defendant signed, 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.
15. 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.
16. On or about May 20, 2020, at CC-2’s direction, the defendant distributed $45,000
to CC-1 and his entities, Company A and Company B, using cashier’s checks; and distributed
$30,000 to CC-2 and his entity, Company C. The defendant also distributed $20,000 to CC-3
using a cashier’s check.
17. After receiving the PPP loan funding, the defendant also transferred money and
wrote checks to himself.
False Statements to Bank 1
18. On or about June 7, 2020, Bank 1 froze the funds in the Rebels business account.
On or about June 9, 2020, a Bank 1 representative called the defendant to discuss the Rebels PPP
loan. On June 8, 2020, the defendant contacted CC-2 and CC-3 to determine how to respond.
CC-2 provided the defendant and CC-3 with a cover story. CC-1 also provided the defendant
with a lease dated July 1, 2020 between Rebels and CC-1’s company, Company A, purporting to
support some of Rebels’ expected uses of the PPP loans. In fact, at the time he paid CC-1, the
defendant was not actually entering into a lease with Company A, and the defendant did not
receive the property identified in the lease from Company A.
19. In furtherance of the conspiracy, and to conceal the existence of and his
participation in the conspiracy, the defendant falsely provided that cover story to the
representative of Bank 1, including falsely claiming that Rebels had 17 employees whom he paid
by direct deposit or check. The defendant further falsely stated that the money to CC-1 was for
rent, the money to CC-2 was for a mentorship program, and that CC-3 was an employee and the
money to him was for back pay.
20. On or about June 9, 2020, the defendant sent a list of employee names for Rebels
to Bank 1, which he created, knowing that the list of names was false. The defendant also
provided Bank 1 with a signed copy of the lease between Company A and Rebels.
False Statement to Law Enforcement
21. On or about July 7, 2020, the defendant was interviewed by agents of the Federal
Bureau of Investigation. In furtherance of the conspiracy and to conceal the existence of and his
participation in the conspiracy, the defendant falsely told agents that Rebels had 17 employees
and that CC-3 was an employee of Rebels. This was the story that the defendant and CC-2
agreed that the defendant would provide, if asked.
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