Felony Information — U.S. v. Michael Leroi Douros (D. Utah)

Summary

A felony information in United States v. Michael Leroi Douros, Case 2:20-cr-00259-HCN, in the U.S. District Court for the District of Utah, Central Division, filed August 14, 2020 as Document 1. It charges bank fraud under 18 U.S.C. § 1344(1) & (2) in Counts 1-2, false statements to a bank under 18 U.S.C. § 1014 in Counts 3 and 4, and money laundering under 18 U.S.C. § 1957 in Count 5. The information alleges that PPP loan applications for Epic Rentals UT LLC overstated its payroll and employees and misstated its ownership and the applicant criminal history. It states that Zions Bank funded then cancelled a $198,800.00 loan, and that Cache Valley Bank funded a $239,091.67 loan on or about May 14, 2020. Count 5 cites a $20,000 check from the Epic Rentals Keybank account.

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Cited in: Zions Bancorporation

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“Felony Information — U.S. v. Michael Leroi Douros (D. Utah).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-2-20-cr-00259-dkt-1-e0798e3930/, SHA-256 6909bdb50564c7243d2448c8aedc475294e7ebc77165a0fa86f650eab6e396f6.

Full text

Case 2:20-cr-00259-HCN Document 1 Filed 08/14/20 PageID.1 Page 1 of 9

Case: 2:20−cr−00259
Assigned To : Nielson, Howard C., Jr
JOHN W. HUBER, United States Attorney (#7226) Assign. Date : 8/14/2020
JACOB J. STRAIN, Assistant United States Attorney (#12680) Description: USA v Douros
Attorneys for the United States of America
Office of the United States Attorney FILED
111 South Main Street, Suite 1800 • Salt Lake City, Utah 84111-2176 2020 AUG 14 AM 8:30
Telephone: (801) 524-5682 CLERK
U.S. DISTRICT COURT

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF UTAH, CENTRAL DIVISION

UNITED STATES OF AMERICA, FELONY INFORMATION

Plaintiff, Counts 1-2: 18 U.S.C. § 1344(1) & (2)
(Bank Fraud)
vs.
Count 3: 18 U.S.C. § 1014 (False
MICHAEL LEROI DOUROS, Statement to a Bank)

Defendant. Count 4: 18 U.S.C. § 1014 (False
Statement to a Bank)

Count 5: 18 U.S.C. § 1957 (Money
Laundering)

The United States Attorney alleges:

I. BACKGROUND

At all times relevant to this Felony Information:

1. Defendant MICHAEL LEROI DOUROS (“DOUROS”) was a resident of Utah.

2. Epic Rentals UT LLC (“Epic Rentals”) was registered with Utah Division of

Corporations on June 5, 2019 with Zach Douros as the registered agent.

3. The United States Small Business Administration (“SBA”) is an executive-bra nc h

agency of the United States federal government that provides support to entrepreneurs and small

businesses. The mission of the SBA is to maintain and strengthen the nation’s economy by
Case 2:20-cr-00259-HCN Document 1 Filed 08/14/20 PageID.2 Page 2 of 9

enabling the establishment and viability of small businesses and by assisting in the economic

recovery of communities after disasters. As part of this effort, the SBA enables and provides for

loans through banks, credit unions and other lenders. These loans have government-backed

guarantees.

4. In addition to traditional SBA funding programs, The CARES Act, which was

signed into law in March 2020, established several new temporary programs and provided for the

expansion of others to address the COVID-19 outbreak.

5. One of these new programs is the SBA Paycheck Protection Program (PPP), which

is a loan designed to provide a direct incentive for small businesses to keep their workers on the

payroll. Under this program, the SBA will forgive all or part of loans if all employees were kept

on the payroll for eight weeks and borrowers submit documentation confirming that the loan

proceeds were used for payroll, rent, mortgage interest, or utilities.

6. Payroll, as defined by the PPP excludes compensation of an individual employee

in excess of an annual salary of $100,000, prorated as necessary.

7. Interested applicants apply through an existing SBA lender or any other

participating federally insured financial institution. Borrower requirements include the business

was in operation on February 15, 2020 and either had employees for whom the business paid

salaries and payroll taxes or paid independent contractors as reported on a Form 1099-MISC.

Borrowers are required to submit such documentation as is necessary to establish eligibility such

as payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses

from a sole proprietorship.

8. The PPP application process requires applicants to submit a Borrower Applicatio n

Form through an SBA-approved financial entity. The application contains information as to the

2
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purpose of the loan, average monthly payroll, number of employees and background of the

business and its owner, including questions relating to criminal history.

II. THE SCHEME AND ARTIFICE TO DEFRAUD

9. On or about May 1, 2020 and continuing to on or about August 12, 2020, within

the Central Division of the District of Utah and elsewhere,

MICHAEL LEROI DOUROS,

defendant herein, devised and intended to devise a scheme to defraud, and to obtain money and

property by means of materially false and fraudulent pretenses, representations and promises, and

omissions of material facts.

10. In executing and attempting to execute the scheme and artifice to defraud, and in

furtherance thereof, defendant DOUROS:

a. knowingly made false and fraudulent pretenses, representations, and promises
to Cache Valley Bank and Zions Bank, financial institutions within the meaning
of 18 U.S.C. § 20, the accounts of which were then insured by the Federal
Deposit Insurance Corporation (“FDIC”), in violation of 18 U.S.C. § 1344
(Bank Fraud);

b. knowingly made false statements and caused false statements to be made to
financial institutions, in violation of 18 U.S.C. § 1014 (False Statements to a
Bank); and

c. knowingly engaged and attempted to engage in monetary transactions in
criminally derived property of a value greater than $10,000 and derived from
specified unlawful activity (Bank Fraud), to wit, proceeds of fraudule ntly
obtained money, in violation of 18 U.S.C. § 1957 (Money Laundering).

III. MANNER AND MEANS OF THE SCHEME AND ARTIFICE TO DEFRAUD

Zions Bank Loan Application:

11. On or about May 2, 2020, defendant DOUROS filled out and submitted a PPP loan

3
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application through Zions Bank.

12. In execution and furtherance of the scheme and artifice to defraud, defendant

DOUROS made or caused to be made, one or more of the following false and fraudule nt

representations to Zions Bank:

a. Epic Rentals’ average monthly payroll was $79,524; when in fact, Epic Rentals’
average monthly payroll was far less;

b. Epic Rentals had 10 employees; when in fact, Epic Rentals had only
approximately 6 employees;

c. Defendant DOUROS’s son owned 50% of Epic Rentals; when in fact,
defendant DOUROS’s son did not own any portion of the business; and

d. The Applicant (defined on SBA Form 2483 as all members owning at least 20%
or more of the LLC) had not been convicted of a felony or on any form of parole
or probation in the last 5 years; when in fact, defendant DOUROS was a 50%
owner of Epic Rentals and was convicted of a felony by the State of Utah in
2016 and was on probation within the 5 year period.

13. Zions Bank initially funded the PPP loan of $198,800.00, but upon further

inspection of the representations in the loan application, cancelled the transfer on or about May 5,

2020.

14. The next day, on or about May 6, 2020, defendant DOUROS transferred his

ownership interest in Epic Rentals to his son.

Cache Valley Bank Loan Application:

15. On or about May 13, 2020, defendant DOUROS caused to be filled out and

submitted a PPP loan application through Cache Valley Bank.

16. In execution and furtherance of the scheme and artifice to defraud, defendant

DOUROS made or caused to be made, one or more of the following false and fraudule nt

4
Case 2:20-cr-00259-HCN Document 1 Filed 08/14/20 PageID.5 Page 5 of 9

representations to Cache Valley Bank:

a. Epic Rentals’ average monthly payroll was $95,636; when in fact, Epic Rentals’
average monthly payroll was far less;

b. Epic Rentals had 9 employees; when in fact, Epic Rentals had only
approximately 6 employees;

c. Defendant DOUROS’s son owned 50% Epic Rentals; when in fact, defendant
DOUROS’s son was a nominee and “straw owner”; and

d. The Applicant (defined on SBA Form 2483 as all members owing at least 20%
or more of the LLC) had not been convicted of a felony or on any form of parole
or probation in the last 5 years; when in fact, defendant DOUROS was the true
owner of Epic Rentals and was convicted of a felony by the State of Utah in
2016 and was on probation within the 5 year period.

17. On or about May 14, 2020, Cache Valley Bank funded the PPP loan of $239,091.67

and transferred that money to Epic Rentals.

18. Within one month of receiving the PPP loan money, defendant DOUROS’s son

transferred $95,000 of the PPP loan money to defendant DOUROS.

Counts 1-2
18 U.S.C. § 1344(1) & (2)
(Bank Fraud)

19. The allegations in this Felony Information are incorporated by reference and

realleged as though fully set forth herein.

20. On or about the dates listed below, in the Central Division of the District of Utah

and elsewhere,

MICHAEL LEROI DOUROS,

defendant herein, did execute and attempt to execute, a scheme and artifice to defraud and to obtain

money by means of false and fraudulent pretenses, representations, and promises, from Cache

Valley Bank and Zions Bank, financial institutions within the meaning of 18 U.S.C. § 20, the

accounts of which were then insured by the Federal Deposit Insurance Corporation, in instances

5
Case 2:20-cr-00259-HCN Document 1 Filed 08/14/20 PageID.6 Page 6 of 9

including but not limited to each count below:

COUNT DATE DESCRIPTION
(on or about)
1 05/02/2020 Online loan application submitted to Zions Bank

2 05/14/2020 $239,091.67 transfer from Cache Valley Bank to Epic Rentals

All in violation of 18 U.S.C. § 1344.

Count 3
18 U.S.C. § 1014 and 2(b)
(False Statement to a Bank)

21. The allegations in this Felony Information are incorporated by reference and

realleged as though fully set forth herein.

22. On or about May 2, 2020, in the Central Division of the District of Utah and

elsewhere,

MICHAEL LEROI DOUROS,

defendant herein, knowingly made and caused to be made a false statement listed below for the

purpose of influencing the action of Zions Bank, a bank the deposits of which were then insured

by the Federal Deposit Insurance Corporation, in connection with a PPP loan application for

approximately $198,800.00, in that defendant DOUROS falsely stated and caused to be falsely

stated:

a. Epic Rentals’ average monthly payroll was $79,524; when in fact, Epic Rentals’
average monthly payroll was far less;

b. Epic Rentals had 10 employees; when in fact, Epic Rentals had only
approximately 6 employees;

c. Defendant DOUROS’s son owned 50% Epic Rentals; when in fact, defendant
DOUROS’s son did not own any portion of the business; and

d. The Applicant (defined on SBA Form 2483 as all members owing at least 20%

6
Case 2:20-cr-00259-HCN Document 1 Filed 08/14/20 PageID.7 Page 7 of 9

or more of the LLC) had not been convicted of a felony or on any form of parole
or probation in the last 5 years; when in fact, defendant DOUROS was a 50%
owner of Epic Rentals and was convicted of a felony by the State of Utah in
2016 and was on probation within the 5 year period.

Count 4
18 U.S.C. § 1014 and 2(b)
(False Statement to a Bank)

23. The allegations in this Felony Information are incorporated by reference and

realleged as though fully set forth herein.

24. On or about May 2, 2020, in the Central Division of the District of Utah and

elsewhere,

MICHAEL LEROI DOUROS,

defendant herein, knowingly made and caused to be made a false statement listed below for the

purpose of influencing the action of Cache Valley Bank, a bank the deposits of which were then

insured by the Federal Deposit Insurance Corporation, in connection with a PPP loan applicatio n

for approximately $239,091.67, in that defendant DOUROS falsely stated and caused to be falsely

stated:

a. Epic Rentals’ average monthly payroll was $95,636; when in fact, Epic
Rentals’ average monthly payroll was far less;

b. Epic Rentals had 9 employees; when in fact, Epic Rentals had only
approximately 6 employees; and

c. Defendant DOUROS’s son owned 50% Epic Rentals; when in fact, defendant
DOUROS’s son was a nominee and “straw owner”.

7
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Count 5
18 U.S.C. § 1957
(Money Laundering)

25. The allegations in this Felony Information are incorporated by reference and

realleged as though fully set forth herein.

26. On or about the dates listed below, in the Central Division of the District of Utah

and elsewhere,

MICHAEL LEROI DOUROS,

defendant herein, did knowingly engage and attempt to engage in the following monetary

transaction by, through, and to a financial institution, affecting interstate or foreign commerce, in

criminally derived property of a value greater than $10,000.00, and such property was derived

from the specified unlawful activity of Bank Fraud as alleged above, in instances including but not

limited to the count below:

COUNT DATE MONETARY TRANSACTIONS
(on or about)
5 05/21/2020 “Payroll” check for $20,000 written to defendant DOUROS from
the Epic Rentals Keybank account.

All in violation of 18 U.S.C. § 1957 and 18 U.S.C. § 2(b).

8
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NOTICE OF INTENT TO SEEK FORFEITURE

Pursuant to 18 U.S.C. § 982(a)(2)(A), upon conviction of any offense violating 18 U.S.C.

§ 1344, the defendant(s) shall forfeit to the United States of America any property constituting, or

derived from, proceeds obtained directly or indirectly, as a result of the scheme to defraud. The

property to be forfeited includes, but is not limited to:

 A money judgment equal to the value of any property not available for forfeiture as a
result of any act or omission of the defendant for one or more of the reasons listed in
21 U.S.C. § 853(p).
 Substitute property as allowed by 18 U.S.C. § 982(b) and 21 U.S.C. § 853(p).

Pursuant to 18 U.S.C. § 982(a)(1), upon conviction of any offense in violation of 18 U.S.C.

§ 1957, the defendants shall forfeit to the United States of America any property, real or personal,

involved in such violations, and any property traceable to such property. The property to be

forfeited includes, but is not limited to:

 A money judgment equal to the value of all property not available for forfeiture as a
result of any act or omission of the defendant(s) for one or more of the reasons listed
in 21 U.S.C. § 853(p); and
 Substitute property as allowed by 18 U.S.C. § 982(b) and 21 U.S.C. § 853(p).

Dated this 13th day of August 2020.

JOHN W. HUBER
United States Attorney

___________________________
JACOB J. STRAIN
Assistant United States Attorneys

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