Bill of Indictment — United States v. Keon I. Taylor (Western District of North Carolina, Document 3)

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A Bill of Indictment, Document 3, filed 05/18/21 in Case 3:21-cr-00132-FDW-DSC, Docket No.: 3:21-cr-132-FDW, United States of America v. Keon I. Taylor, in the United States District Court for the Western District of North Carolina, Charlotte Division. It alleges that from at least March 2020 through February 2021 Taylor filed fraudulent COVID-19-related unemployment insurance claims in the names of identity theft victims to defraud the Department of Labor, the North Carolina Division of Employment Security and six other states. It alleges that he obtained more than $219,000 in benefits through claims in the names of more than 35 victims and fraudulently applied for three Economic Injury Disaster Loans from the Small Business Administration. The text sets out background on the unemployment system, FPUC and EIDL and a chart of North Carolina claims.

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_ FILED
~ CHARLOTTE, NC

“UNDE i er i. MAY 18 2021

COUFT
UNITED STATES DISTRICT COURT WESTERN DISTRICT Ot NC
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
UNITED STATES OF AMERICA ) Docket No.: 3:21-cr-132-FDW
)
v. ) BILL OF INDICTMENT
)
KEON I. TAYLOR ) Violations: 18 U.S.C. § 1343
) 18 U.S.C. § 1014
) 18 U.S.C. § 1028
) 18 U.S.C. § 1028A
)
THE GRAND JURY CHARGES:

At the specified time and at all relevant times:

1. From at least March 2020 through February 2021, the Defendant, KEON I.
TAYLOR (“TAYLOR”), engaged in a scheme to defraud the United States Department of
Labor, the North Carolina Division of Employment Security, and the States of Tennessee, Texas,
Ohio, Massachusetts, Nevada, and Arizona by filing fraudulent claims for COVID-19-related
unemployment insurance (UJ) benefits in the names of identity theft victims. During the scheme,
TAYLOR fraudulently obtained more than $219,000 in fraudulent unemployment benefits by
filing fraudulent claims in the names of more than 35 victims and submitted numerous additional
applications seeking fraudulent UI benefits. Additionally, TAYLOR fraudulently applied for
three Economic Injury Disaster Loans from the Small Business Administration using false
information.

Background of the Unemployment System

2. The Social Security Act of 1935 initiated the UI system, which is operated and
managed by each state at the direction of the federal government, specifically, the United States
Department of Labor (DOL). In the majority of states, benefit funding is based solely on a tax
imposed on employers. However, DOL funds all substantive and administrative costs associated
with each state’s UI system, which is run by a state agency in the respective state. The UI system
is designed to provide benefits to persons who are out of work due to no fault of their own, and
who meet other eligibility requirements of state laws.

3. Eligibility for UI, benefit amounts, and the length of time benefits are available is
determined by individual state law. In all states, individual claimants must be eligible for
employment and actively searching for employment while receiving UI benefits.

4, A claimant receives UI benefits by completing an application at a local “one-stop
center,” by telephone, or online at each state’s website. A claimant must provide the claimant’s

1

Case 3:21-cr-00132-FDW-DSC Document3 Filed 05/18/21 Page 1 of 10
name, date of birth, social security number, home address, and other personal information. On a
weekly or bi-weekly basis, the claimant then files for weekly payment benefits by certifying that
the claimant is unemployed, eligible for benefits, and is seeking employment.

5. The state agencies authorize their financial services sections to release
unemployment compensation funds in the form of either: (a) a state contracted debit card mailed
to the applicant; (b) a direct deposit into a pre-paid debit card account; (c) a direct deposit into
the claimant's designated bank account; or (d) in rare cases, some states will issue a check, if
requested.

6. As relevant to this Indictment, direct deposits of UI funds were completed
through the automated clearing house ("ACH"), an electronic funds transfer system that
facilitates payments within the United States.

COVID-19, the National Emergency, and FPUC

7. According to the United States Centers for Disease Control and Prevention
(CDC), Coronavirus Disease 2019 (“COVID-19"") is a respiratory illness that can spread from
person to person. The virus that causes COVID-19 is a novel coronavirus that was first identified
during an investigation into a 2019 outbreak in Wuhan, China. COVID-19 can attack human
lungs and kill infected persons, especially those who have certain risk factors identified by the
CDC.

8. On March 13, 2020, President Donald J. Trump issued a Proclamation on
Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19)
Outbreak (“the Emergency Proclamation”). The Emergency Proclamation noted that “on March
11, 2020, the World Health Organization announced that the COVID-19 outbreak can be
characterized as a pandemic, as the rates of infection continue to rise in many locations around
the world and across the United States.” Further, “[t]he spread of COVID-19 within our Nation’s
communities threatens to strain our Nation's healthcare systems.”

9. At all relevant times, Section 2104 of the Coronavirus Aid, Relief, and Economic
Security ("CARES") Act, Pub. L. No. 116-136, 134 Stat. 281(March 27, 2020), entitled
“Emergency Increase in Unemployment Compensation Benefits,” provided for an additional
$600 weekly payment, known as “Federal Pandemic Unemployment Compensation” or “FPUC,”
to certain eligible individuals who were receiving other UI benefits under state law.

10. At all relevant times, Arizona, Massachusetts, North Carolina, Nevada, Ohio,
Tennessee, and Texas paid FPUC, a benefit authorized, transported, transmitted, transferred,
disbursed, and paid in connection with, a presidentially declared major emergency (as those
terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, 42 U.S.C. § 5122).

Relevant Entities

11. Bank of America (“BOA”), Sutton Bank, Wells Fargo Bank, and Woodforest
National Bank (“the Victim Banks”) are financial institutions whose deposits are insured by the
Federal Deposit Insurance Corporation (“FDIC”).

Case 3:21-cr-00132-FDW-DSC Document3 Filed 05/18/21 Page 2 of 10
12. The Small Business Administration (“SBA”) is an executive-branch agency of the
United States government that provides support to entrepreneurs and small businesses. The
mission of the SBA is 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.

Economic Injury Disaster Loans from the SBA

13. The SBA enables and provides for loans through banks, credit unions and other
lenders. These loans have government-backed guarantees. The CARES Act established several
new temporary programs and provided for the expansion of others to address the COVID-19
outbreak.

14. ‘One of the programs modified in response to the COVID-19 outbreak was an
expansion of an existing disaster-related program — the Economic Injury Disaster Loan (“EIDL”)
— to provide for loan assistance, including advances, for small businesses and other eligible
entities. The EIDL proceeds can be used to pay fixed debts, payroll, accounts payable and other
bills that could have been paid had the disaster not occurred; however, such loan proceeds are
not intended to replace lost sales or profits or for expansion of a business. The CARES Act
specifically expanded eligibility for the EIDL program to assist business entities that suffered
“substantial economic injury” from COVID-19 and changed the definition of “disaster” to
include “an emergency involving Federal primary responsibility determined to exist by the
President under the section 5191(b)” of the Stafford Act. Previously, on March 13, 2020, the
President had declared that the ongoing COVID-19 pandemic was an emergency under Section
501(6) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C.
§5121-5207. After March 13, 2020, the President approved major disaster declaration requests
under the Stafford Act for all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands,
Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands (authorized
under Stafford Act Section 401).

15. Unlike certain other types of SBA-guaranteed loans, EIDL funds are issued
directly from the United States Treasury and applicants apply through the SBA via an online
portal and application. The EIDL application process, which also uses certain outside contractors
for system support, collects information concerning the business and the business owner,
including information as to the gross revenues for the business prior to January 31, 2020; the cost
of goods sold; and information as to any criminal history of the business owner. Applicants
electronically certify that the information provided is accurate and are warned that any false
statement or misrepresentation to the SBA or any misapplication of loan proceeds may result in
sanctions, including criminal penalties.

The Scheme to Defraud

16. From in or about March 2020 and continuing until in or about February 2021, in
the Western District of North Carolina and elsewhere, TAYLOR did voluntarily and
intentionally (1) participate in a scheme and artifice to defraud with knowledge of its fraudulent
nature and (2) obtain the money and property by means of false and fraudulent pretenses,
representations, and promises (collectively, “the scheme to defraud”).

3

Case 3:21-cr-00132-FDW-DSC Document3 Filed 05/18/21 Page 3 of 10
Manner and Means of the Scheme to Defraud

17. It was part of the scheme to defraud that TAYLOR obtained the identity
information of real persons (“Identity Theft Victims”), including names, Social Security
Numbers, dates of birth, and addresses, among other information (collectively, “personal
identifying information” or “PII’’) over the Internet, and elsewhere.

18. It was further part of the scheme to defraud that TAYLOR used the PII of identity
theft victims to file fraudulent UI benefit claims with the State of North Carolina. TAYLOR
electronically submitted or caused to be submitted fraudulent unemployment benefits claims in
the names of at least thirteen Identity Theft Victims and obtained fraudulent payments totaling
more than $139,000. For example, TAYLOR submitted or caused to be submitted the fraudulent
unemployment benefits claims to the state of North Carolina, as identified in the chart below:

UI UI WHERE FUNDS WERE AMOUNT | VICTIM
APPLICATION | STATE DEPOSITED DEPOSITED
DATE

a. | 6/3/2020 NC Sutton Bank card $7,250.00 Z.C,

b. | 5/26/2020 NC BOA pre-paid card $16,224.00 J.R.

c. | 6/10/2020 NC BOA pre-paid card $2,850.00 A.M.

d. | 5/25/2020 NC BOA pre-paid card and Wells | $15,600.00 B.B.
Fargo Acct *1588

e. | 6/15/2020 NC BOA pre-paid card and $13,450.00 B.W.
Chime pre-paid card

f. | 6/19/2020 NC BOA pre-paid card $18,900.00 | Br.W

g. | 6/3/2020 NC BOA pre-paid card $9,648.00 K.Z.

h. | 6/2/2020 NC BOA pre-paid card $3,800.00 J.W.

i. | 5/17/2020 NC Sutton Bank card $950.00 M.M.

j. | 6/14/2020 NC BOA pre-paid card $20,050.00 T.K.

19. It was further part of the scheme to defraud that TAYLOR used the PII of identity
theft victims to file fraudulent UI benefit claims in other states including Nevada, Arizona,
Tennessee, Texas, Ohio, and Massachusetts. TAYLOR electronically submitted by interstate
wire, and caused to be submitted, fraudulent unemployment benefits claims in the names of more
than twenty Identity Theft Victims and obtained fraudulent payments, through interstate wires,
totaling more than $200,000. For example, TAYLOR submitted or caused to be submitted the
fraudulent unemployment benefits claims to the states identified below as further identified in
the chart below:

Case 3:21-cr-00132-FDW-DSC Document 3 Filed 05/18/21 Page 4 of 10
UI UI WHERE FUNDS WERE AMOUNT | VICTIM
APPLICATION | STATE DEPOSITED DEPOSITED
DATE
a. | 6/22/2020 NV Sutton Bank card $3,067.00 C.D.
b. | 6/27/2020 AZ Sutton Bank card $10,242.00 C.T.
c. | 6/27/2020 AZ Sutton Bank card $9,438.00 B.R.
d. | 5/7/2020 MA Woodforest Acct *0259 $6,736.00 S.R.
e. | 5/8/2020 MA Woodforest Acct *9863 $4,335.00 T.F.

20. It was further part of the scheme to defraud that, on or about January 1, 2021,
TAYLOR fraudulently applied for, or caused to be applied for, an EIDL from the SBA given
application number *3299 using the name of Identity Theft Victim A.G. and a purported tutoring
business using false business information.

21. It was further part of the scheme to defraud that, on or about December 23, 2020,
TAYLOR fraudulently applied for an EIDL from the SBA given application number *9930 in
the name of Tristar Building Services using false business information.

COUNT ONE
Wire Fraud Scheme (18 U.S.C. §1343)

22. Paragraphs 1 through 21 of this Bill of Indictment are re-alleged and incorporated
herein by reference as though fully set forth herein.

23. Between in or about March 2020 and continuing through February 2021, in the
Western District of North Carolina, and elsewhere, the defendant,

KEON I. TAYLOR

with the intent to defraud, did knowingly and intentionally devise the above described scheme and
artifice to defraud and obtain money by materially false and fraudulent pretenses, representations,
and promises, and for the purpose of executing such scheme and artifice to defraud, did cause to
be transmitted by means of wire communication in interstate commerce any writing, signal, or
sound for the purposes of executing said scheme and artifice.

All in violation of Title 18, United States Code, Section 1343.

Case 3:21-cr-00132-FDW-DSC Document3 Filed 05/18/21 Page 5 of 10
COUNTS TWO THROUGH EIGHT
Wire Fraud (18 U.S.C. § 1343)

24. Paragraphs | through 21 of this Bill of Indictment are re-alleged and incorporated
herein by reference as though fully set forth herein.

25. On or about the dates set out below, in the Western District of North Carolina, and
elsewhere, the defendant,

KEON I. TAYLOR,

knowingly executed and attempted to execute the above described scheme and artifice to defraud
and for obtaining money and property by means of materially false and fraudulent pretenses,
representations, and promises, and by concealment of material facts, would and did transmit and
cause to be transmitted from Charlotte, North Carolina by means of wire communication in
interstate commerce, the following fraudulent unemployment benefit claims to the states identified
below causing the payments to be issued as indicated below:

COUNT UI UI WHERE FUNDS AMOUNT | VICTIM
APPLICATION | STATE | WERE DEPOSITED | DEPOSITED
DATE

TWO 6/27/2020 AZ Sutton Bank card $10,242.00 C.T.

THREE | 6/27/2020 AZ Sutton Bank card $9,438.00 B.R.

FOUR 6/26/2020 AZ Sutton Bank card $9,438.00 TS.

FIVE 7/15/2020 AZ BOA Pre-Paid card $1,467.00 HLS.

SIX 5/7/2020 MA Woodforest Acct $6,736.00 S.R.
*0259

SEVEN | 5/8/2020 MA Woodforest Acct $4,335.00 T.F.
*9863

EIGHT | 5/12/2020 MA Woodforest Acct $6,770.00 R.R.
*9863

All in violation of Title 18, United States Code, Section 1343.

Case 3:21-cr-00132-FDW-DSC Document 3 Filed 05/18/21 Page 6 of 10
COUNT NINE
False Statements to the SBA (18 U.S.C. § 1014)

26. Paragraphs 1 through 21 of this Bill of Indictment are re-alleged and incorporated
herein by reference as though fully set forth herein.

27. On or about January 1, 2021, in the Western District of North Carolina and
elsewhere, the defendant,

KEON I. TAYLOR

did knowingly make and cause to be made a false statement or report for the purpose of
influencing the action of the SBA in connection with the EIDL program, which it administers
pursuant to a provision of the Small Business Act. The defendant submitted a fraudulent EIDL
Application ending in *3299, using the identity of Victim A.G. in the name of a purported
tutoring business, seeking funds totaling $21,600. In truth and in fact, and as the defendant well
knew, Victim A.G. had not submitted the application and the information contained therein was
fictitious.

All in violation of Title 18, United States Code, Sections 1014 and 2.

COUNT TEN
False Statements to the SBA (18 U.S.C. § 1014)

28. Paragraphs 1 through 21 of this Bill of Indictment are re-alleged and incorporated
herein by reference as though fully set forth herein.

29. On or about December 23, 2020, in the Western District of North Carolina and
elsewhere, the defendant,
KEON I. TAYLOR

did knowingly make and cause to be made a false statement or report for the purpose of
influencing the action of the SBA in connection with the EIDL program, which it administers
pursuant to a provision of the Small Business Act. The defendant submitted a fraudulent EIDL
Application ending in *9930, using his own name and a business named Tristar Building
Services, seeking funds totaling $150,000. In truth and in fact, and as the defendant well knew,
the application and the information contained therein was fictitious.

All in violation of Title 18, United States Code, Sections 1014 and 2.

Case 3:21-cr-00132-FDW-DSC Document 3 Filed 05/18/21 Page 7 of 10
COUNT ELEVEN
Aggravated Identity Theft (18 U.S.C. §1028A)

30. Paragraphs | through 21 of this Bill of Indictment are re-alleged and incorporated
herein by reference as though fully set forth herein.

31. On or about May 17, 2020, in the Western District of North Carolina and
elsewhere, the defendant,

KEON I. TAYLOR

did knowingly use, without lawful authority, a means of identification of another person, namely,
M.M., during and in relation to a felony violation enumerated in 18 U.S.C. § 1028A(c), to wit,
wire fraud in violation of 18 U.S.C. § 1343 as alleged in Count One, knowing that the means of
identification belonged to another actual person.

In violation of Title 18, United States Code, Section 1028A(a)(1).

COUNT TWELVE
Aggravated Identity Theft (18 U.S.C. §1028A)

32. Paragraphs | through 21 of this Bill of Indictment are re-alleged and incorporated
herein by reference as though fully set forth herein.

33. On or about June 27, 2020, in the Western District of North Carolina and
elsewhere, the defendant,

KEON I. TAYLOR

did knowingly use, without lawful authority, a means of identification of another person, namely,
C.T., during and in relation to a felony violation enumerated in 18 U.S.C. § 1028A(c), to wit,
wire fraud in violation of 18 U.S.C. § 1343 as alleged in Count Two, knowing that the means of
identification belonged to another actual person.

In violation of Title 18, United States Code, Section 1028A(a)(1).

Case 3:21-cr-00132-FDW-DSC Document 3 Filed 05/18/21 Page 8 of 10
COUNT THIRTEEN
Aggravated Identity Theft (18 U.S.C. §1028A)

34. Paragraphs 1 through 22 of this Bill of Indictment are re-alleged and incorporated
herein by reference as though fully set forth herein.

35. On or about January 1, 2021, in the Western District of North Carolina and
elsewhere, the defendant,

KEON I. TAYLOR

did knowingly use, without lawful authority, a means of identification of another person, namely,
A.G., during and in relation to a felony violation enumerated in 18 U.S.C. § 1028A(c), to wit,
fraud on the SBA in violation of 18 U.S.C. § 1014 as alleged in Count Nine, knowing that the
means of identification belonged to another actual person.

In violation of Title 18, United States Code, Section 1028A(a)(1).

COUNT FOURTEEN
Production, Transfer, or Possession of a Document Making Implement or Authentication Feature
(18 ULS.C. § 1028(a)(5))

36. Paragraphs 1 through 21 of this Bill of Indictment are re-alleged and incorporated
herein by reference as though fully set forth herein.

37. On or about February 10, 2021, in Mecklenburg County, within the Western District
of North Carolina, the defendant,

KEON I. TAYLOR

did knowingly produce, transfer or possess a document making implement or authentication feature,
to wit, holographic ink cartridge(s); holographic sticker(s); plastic identification card blank(s); and
identification card template computer software, with the intent such document making implement or
authentication feature would be used in the production of a false identification document or another
document making implement or authentication feature which would be so used, and the production,
transfer, or possession of said authentication feature or document making implement was in or
affecting interstate commerce, in that one or more of the above-described document making
implement or authentication feature was manufactured outside the state of North Carolina.

All in violation of Title 18, United States Code, Sections 1028(a)(5), (b)(1)(C), and 2.

Case 3:21-cr-00132-FDW-DSC Document3 Filed 05/18/21 Page 9 of 10
NOTICE OF FORFEITURE AND FINDING OF PROBABLE CAUSE

Notice is hereby given of 18 U.S.C. § 982 and 28 U.S.C. § 2461(c). Under Section 2461(c),
criminal forfeiture is applicable to any offenses for which forfeiture is authorized by any other
statute, including but not limited to 18 U.S.C. § 981 and all specified unlawful activities listed or
referenced in 18 U.S.C. § 1956(c)(7), which are incorporated as to proceeds by Section
981(a)(1)(C). The following property is subject to forfeiture in accordance with Section 982 and/or
2461(c):

a. All property which constitutes or is derived from proceeds of the violations set forth
in Counts One through Ten, and/or Count Fourteen of this Bill of Indictment;
b. All illicit authentication features, identification documents, document-making

implements, and/or means of identification connected to Count Fourteen; and

c. If, as set forth in 21 U.S.C. § 853(p), any property described in (a) cannot be located
upon the exercise of due diligence, has been transferred or sold to, or deposited
with, a third party, has been placed beyond the jurisdiction of the court, has been
substantially diminished in value, or has been commingled with other property
which cannot be divided without difficulty, all other property of the defendant/s to
the extent of the value of the property described in (a).

The Grand Jury finds probable cause to believe that the following property is subject to
forfeiture on one or more of the grounds set forth above:
a. a money judgment in the amount of at least approximately $252,849 in proceeds of
the violations set forth in Counts One through Ten and Count Fourteen.

A TRUE BILL:

WILLIAM T. STETZER
ACTING UNITED STATES ATTORNEY

JTZNNY G. SUGAR
SSISTANT GAR STATES ATTORNEY

10

Case 3:21-cr-00132-FDW-DSC Document 3 Filed 05/18/21 Page 10 of 10


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