Criminal Complaint — United States v. Sharika Lavonte Carpenter et al. (W.D. Tenn., Dkt. 1)

Summary

Criminal Complaint in United States of America v. Sharika Lavonte Carpenter, Janisha Latoya Jones and Brandy Denise Scaife, Case 2:20-cr-20179-TLP, in the U.S. District Court for the Western District of Tennessee, filed 10/06/20 as Document 1, attested by telephone before Annie T. Christoff, U.S. Magistrate Judge, on 10/06/2020. It charges Count 1, Conspiracy to Defraud the United States, 18 U.S.C. 371, and Counts 2 through 4, Wire Fraud, 18 U.S.C. 1343 and 2, for April 2020 through June 2020. IRS Special Agent Jay Thomas's affidavit alleges that the defendants, employed at Better Days Tax Service, submitted approximately 401 fraudulent EIDL applications to the SBA, attempted to obtain in excess of $2,000,000 and fraudulently obtained approximately $745,000. It also alleges that IRS agents executed a search warrant at the business on October 6, 2020.

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Case 2:20-cr-20179-TLP Document1i Filed 10/06/20 Page1ofi PagelD1

AO 91 (Rev. 11/11) Criminal Complaint

UNITED STATES DISTRICT COURT

for the

Western District of Tennessee

United States of America )
V. )
: 179-TLP/tm
SHARIKA LAVONTE CARPENTER, y CameiMa, — 2:20cr2017 P
JANISHA LATOYA JONES, )
and )
BRANDY DENISE SCAIFE )
Defendant(s)
CRIMINAL COMPLAINT
I, the complainant in this case, state that the following is true to the best of my knowledge and belief.
On or about the date(s) of April 2020 - June 2020 _ in the county of Shelby ____ inthe
Western District of Tennessee _ , the defendant(s) violated:
Code Section Offense Description
Count 1: 18 U.S.C. 371 Conspiracy to Defraud the United States:
Count 2: 18 U.S.C. 1343 and 2 Wire Fraud;
Count 3: 18 U.S.C. 1343 and 2 Wire Fraud;
Count 4: 18 U.S.C. 1343 and 2 Wire Fraud.

This criminal complaint is based on these facts:

See attached affidavit.

of Continued on the attached sheet.

[ Complainant’ S signature

Jay Thomas - Special Agent IRS

Printed name and title

Attested to by the complainant in accordance with the requirements of Fed. R. Crim. P. 4.1 by telephone.

Date: 10/06/2020 s/ Annie T. Christofff

Judge's signature

City and state: Memphis, TN ANNIE T.CHRISTOFF, U.S. Magistrate Judge —

Printed name and title
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AFFIDAVIT IN SUPPORT OF CRIMINAL. COMPLAINT

|, Jay Thomas, being duly sworn on oath, depose and state that | have been
employed as a Special Agent (SA), with the Internal Revenue Service since June 2017

and am currently assigned to the Western District of Tennessee.

AGENT BACKGROUND

4. | am employed as a Special Agent with the Internal Revenue Service
Criminal Investigation (IRS-Cl), and have been employed in this capacity since June
2017. Your affiant’s responsibilities include the investigation of possible criminal
violations of the Internal Revenue Laws under Title 26 of the United States Code and
related offenses, particularly as found in Title 18 and Title 31 of the United States Code,
which includes, the investigation of criminal tax violation as well as other financial
crimes including money laundering, identity theft, wire fraud, bank fraud, as well as
other white collar crimes. Your affiant holds a bachelor’s degree in accounting from the
University of Georgia and maintains an active Certified Public Accountant license. Your
affiant has been involved with numerous search warrants including search warrants that
were conducted at tax return preparation businesses.

2. Your affiant graduated from the Federal Law Enforcement Training Center
(FLETC) in Glynco, Georgia on December 20, 2017. There your affiant successfully
completed Special Agent Basic Training which included Criminal Investigator Training
Program and Special Agent Investigative Training. The training classes covered the
areas of criminal law, criminal investigative techniques, enforcement operations, and

specialized training in financial investigations.

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3. During my career, | have participated in numerous federal fraud
investigations. In these investigations, | have conducted and/or participated in the
following: victim and suspect interviews, the execution of search warrants, debriefing and
tasking of informants, and review of surveillance videos. In addition, through my training,
education, experience, | have become familiar with the manner in which fraud and tax
crimes are committed against the United States.

4, | am an investigative or law enforcement officer of the United States within
the meaning of section 2510(7) Title 18, United States Code, and am empowered by law
to conduct investigations and make arrests for offenses enumerated in Section 2516 of
Title 18, United States Code. The facts in this affidavit come from my personal
observations, my training and experience, and information obtained from other agents,
law enforcement officials and witnesses. This affidavit is intended to show merely that
there is sufficient probable cause for the requested warrant and does not set forth all of
my knowledge about this matter. Based on the facts set forth in this affidavit, there is
probable cause to believe that violations of Title 18 U.S.C. § 371 and Title 18 U.S.C. §
1343 have been committed by SHARIKA LAVONTE CARPENTER, JANISHA LATOYA
JONES and BRANDY DENISE SCAIFE.

STATEMENT OF PROBABLE CAUSE

5. 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 to communities after disasters. As part of its mission

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the SBA, among other things, made loans to borrowers after receipt and approval of loan
applications and any other required supporting documentation.

6. In or around March 2020, the Coronavirus Aid Relief and Economic
Security(CARES) Act was enacted to provide emergency financial assistance to the
millions of Americans suffering adverse economic effects caused by the COVID-19
pandemic. The CARES Act established several new temporary programs and provided
for expansion of others including programs created and / or administered by the SBA.

7. The Economic Injury Disaster Loan ("EIDL") program was an SBA program
that provided low-interest loans to small businesses, renters, and homeowners in regions
affected by declared disasters.

8. The CARES Act also authorized the SBA to provide EIDLs of up to $2 million
to eligible small businesses experiencing substantial financial disruptions due to the
COVID-19 pandemic. In addition, the CARES Act authorized the SBA to issue advances
of up to $10,000 to small businesses within three days of applying for an EIDL.

9. In order to obtain an EIDL and advance, a qualifying business was required
to submit an application to the SBA and provide information about its operations, such as
the number of employees, gross revenue for the 12-month period preceding the disaster,
and cost of goods sold in the 12-month period preceding the disaster. In the case of
EIDLs for COVID-19 relief, the 12-month period was the period preceding January 31,
2020. For a business to be eligible for an EIDL, the business must have been in operation
before February 1, 2020. The applicant was also required all of the information in the

application is true and correct to the best of the applicant's knowledge.

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10. _ EIDL applications were submitted directly to the SBA and processed by the
agency with support from a government contractor, Rapid Finance. Approval of a loan
application and the amount of a loan was based, in part, on the information provided on
the application about the number of employees, gross revenue, and cost of goods, as
described above. Upon approval of an application for an EIDL or advance, SBA will
disburse the funds. EIDL loan proceeds were permitted to be used for payroll expenses,
sick leave, production costs, and business obligations, such as debts, rent, and mortgage
payments.

11. The United States, including the Internal Revenue Services (IRS), is
conducting a criminal investigation of SHARIKA LAVONTE CARPENTER, JANISHA
LATOYA JONES AND BRANDY DENISE SCAIFE, who were employed at Better Days
Tax Service (BDTS) located at 1391 N. Hollywood St, Memphis, Tennessee 38108, for
violations of Title 18 U.S.C. § 371 and Title 18 U.S.C. § 1343 and 2 for knowingly and
willfully conspiring and agreeing with each other, and with other persons known and
unknown, to defraud the United States and to use and cause interstate wire
communications to be used in furtherance of a scheme and artifice to defraud the Small
Business Administration (SBA) in relation to a presidentially declared major disaster or
emergency, in violation of Title 18, United States Code, Section 1343 and 2.

12. It was a part of the conspiracy and substance of the scheme and artifice
that the defendants submitted and cause to be submitted, to the SBA, applications for
EIDL’s which contained materially false, fictitious and fraudulent information. It was further
a part of the conspiracy and substance of the scheme and artifice that the submission of

EIDL’s with false, fictitious and fraudulent information would induce the SBA to disburse

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funds to the defendants. During the course of the conspiracy, the defendants submitted

and caused to be submitted approximately 401 fraudulent EIDL applications to the SBA

and attempted to obtain in excess of $2,000,000 and fraudulently obtained approximately

$745,000 from the SBA.

13. In furtherance of the conspiracy, at least one of the defendants committed

at least one of the following overt acts in the Western District of Tennessee as

described below:

A.

On or about May 4, 2020, SCAIFE accessed the IRS online portal to
apply for and obtain a new Employer Identification Number (“EIN”)
85-XXX4226. This online EIN application used SCAIFE’s name,
SSN and 2019 residential address. SCAIFE’s reasoning for
requesting the EIN is to start a new business. For a business to be
eligible for an EIDL, the business must have been in operation before
February 1, 2020. Any business formed in May 2020 would not have
qualified for EIDL funding. Comcast Communications (Comcast)
confirmed that the IP addresses used for SCAIFE’s application
originated at the Better Days Tax Service office at 1391 N Hollywood
St, Memphis, Tennessee, 38108.

From May 4, 2020, to May 8, 2020, one or more of the conspirators
accessed the IRS portal and applied for, and obtained, six additional
EINs. All six new EINs were traced to the BDTS office at 1391 N.
Hollywood St, Memphis, Tennessee 38108. Of these six additional
EINs obtained, one used the name and SSN of JANISHA JONES
with a business address identical to JONES’ reported home address.
Another EIN was in the name of a relative of SCAIFE and listed the
business address as SCAIFE’s home address. SCAIFE’s
application and her relative’s applications for a new business EIN
were submitted four days apart and both used SCAIFE’s residential
address as the business address. Both of these EINs were obtained
from IP addresses associated with the BDTS office. All of these EINs
were also obtained in May 2020 after the EIDL program was
announced. These six EINs plus SCAIFE’s, were later used to
submit EIDL applications.

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C. On or about May 7, 2020, SCAIFE, submitted EIDL Application, ID
Number XXXXXX5841, using her newly acquired EIN, 85-XXX4226
for a business named BEE'S PRODUCE AND GOODS (BEE’S P&G)
and on which said application SCAIFE falsely and fraudulently stated
and caused to be stated, among other things, that BEE’S P&G was
formed in 2016, had 10 employees and had gross revenues of
$27,698. The IP address used for SCAIFE’s EIDL application was
traced to the BDTS office. Based on this fraudulent information,
SCAIFE’s EIDL application for BEE’S P&G was funded by the SBA
and $13,900 in loan disbursements was wired to the bank account
listed on SCAIFE’s EIDL application.

D. Research was conducted into any IRS tax filings associated with
SCAIFE’s EIN and/or SSN for tax years 2018 and 2019 in efforts to
locate any supporting evidence of the information used in SCAIFE’s
EIDL Application for BEE’S P&G. No IRS information exists to
support the business name, gross revenue, or employee numbers
used in SCAIFE’s EIDL application.

E. Between April 1, 2020, and June 17, 2020, one or more of the
Conspirators submitted approximately 59 EIDL applications to the
SBA which said applications contained false and fraudulent
representations. The IP addresses used in all these applications
were confirmed to be associated with the BDTS office at 1391 N.
Hollywood St, Memphis, Tennessee, 38108. No IRS information was
found to support any of the business’ names, gross revenue, or
employee numbers used in any of the 59 EIDL applications. The total
amount of money disbursed due to these 59 EIDL applications was
$745,000.

F. Of the 59 funded EIDL applications, one was submitted by
CARPENTER for BETTER DAYS TAX SERVICE using the address
of 1391 N Hollywood St, Memphis, TN, 38108. While BDTS is an
actual business and appears on CARPENTER’s 2018 and 2019
Forms 1040 Schedule C, the Schedule C gross revenues and wages
amounts do not match the gross revenue and number of employee
amounts used on CARPENTER’s BDTS EIDL application. Another
application was submitted in the name of a relative of CARPENTER.

G. Of these 59 funded EIDL applications, one was submitted by

JANISHA JONES and another was submitted by a relative of
JONES.

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H. Including the 59 EIDL applications described above, SBA has
identified 40isubmitted EIDL applications that are associated with
BDTS. IP address, SSN, EIN, address, telephone number, among
other data was used by the SBA to associate these 401 applications
with BDTS. Of the total 401 EIDL applications, 75 applications have
been funded by the SBA at this time, (which includes the 59
discussed above). The total amount of SBA funding that was
distributed relating to these 75 applications was $1,107,600. These
distributions were divided up into two parts, grant advances and loan
proceeds. $531,000 of this total amount was disbursed as grant
advances, and the remaining $486,600 was disbursed as loans.
Many EIDL applications received both grant and loan money,
although some applications may have only received either one or the
other at this time. The 326 additional related EIDL applications that
have not been funded were either denied funding or are still waiting
to be processed and potentially funded by the SBA.

F Of the 401 EIDL applications, 46 applications can be directly
associated with CARPENTER, JONES and SCAIFE using the
following characteristics: name, address, EIN, SSN, associated
address, name of known associates, phone number, email address,
bank account. Not all 46 of these EIDL applications have been
funded, but they were all submitted to the SBA in efforts to receive
funding.

14. All aforementioned conduct committed in violation of Title 18, United States
Code, Section 371.

15. Beginning in or around April, 2020, and continuing until in or around June
2020, the defendants SHARIKA LAVONTE CARPENTER, JANISHA LATOYA JONES
AND BRANDY DENISE SCAIFE being aided, abetted, counseled and induced by each
other and by other persons known and unknown, devised and intended to devise the
scheme and artifice described above in paragraph 6, to defraud the SBA and to obtain

money and property from the SBA by means of materially false and fraudulent pretenses,
representations and promises.

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16. On or about the dates set forth below, the defendant named below, did for
the purpose of executing the aforesaid scheme and artifice and in furtherance thereof,
knowingly transmit and cause to be transmitted in interstate commerce from the SBA in
Colorado to the bank account described below in the Western District of Tennessee, by
means of wire communications certain writings and signals for the purpose of executing
the scheme described above, as set forth below, the said violations being committed in
relation to a presidentially declared major disaster and emergency, all in violation of Title

18, United States Code, Sections 1343 and 2.

COUNT DATE DEFENDANT DESCRIPTION
Wire transfer $4,000 to Bank
SHARIKA LAVONTE Of America Account
2 April 28,2020 | CARPENTER XXXXXXXX8275
Wire transfer $13,900 to
BRANDY DENISE Bank Of America Account
3 June 9,2020 | SCAIFE XXXXXXXX5615
Wire transfer of $14,300 to
JANISHA LATOYA Green Dot Bank Account
4 June 16, 2020 | JONES XXXXXXXX3001

17. On October 6, 2020, IRS agents executed a search warrant at BDTS at
1391 N. Hollywood St. Memphis, Tennessee 38108. During the search, agents recovered
documents related to the fraudulent submission of federal loan applications. That same
date, agents interviewed SCAIFE, who confessed to conspiring with CARPENTER and

JONES to submit fraudulent EIDLs as described above.

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CONCLUSION

Based on my investigation, | believe that there is probable cause to believe that
SHARIKA CARPENTER, JANISHA JONES and BRANDY SCAIFE violated the crimes

as set forth in this criminal complaint and respectfully request that the Court issue an

Respectfully Submitted,

JAY THOMAS
Special Agent
Internal Revenue Service

arrest warrant.

Pursuant to Federal Rule of Criminal Procedure 41(d)(3), the undersigned judicial
officer has on this date considered information communicated by telephone, in reviewing
and deciding whether to issue an arrest warrant. In doing so, this judicial officer has
placed the affiant under oath and has confirmed by speaking personally with the affiant
on the telephone that the signatures on the complaint and affidavit are those of the affiant,
the documents received by the judicial officer are a correct and complete copy of the
documents submitted by the affiant, and the information contained in the complaint and
affidavit are true and correct to the best of the affiant’s knowledge.

Sworn to and subscribed before me by telephone this __6th_ day of October
2020.

s/ Annie T. Christoff
ANNIE T. CHRISTOFF
U. S. MAGISTRATE JUDGE
WESTERN DISTRICT OF TENNESSEE

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