Memorandum and Order — United States v. Howard, Myers, and Sunquist (Document 150, filed June 10, 2026)

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Memorandum and order in Case No. 24-CR-30153-DWD in the United States District Court for the Southern District of Illinois, Document 150, filed June 10, 2026 and dated June 8, 2026. The Court denies Defendant Richard Scott Myers' Motion to Dismiss Counts Related to PPP Loan Applications and Forgiveness Based on the Due Process Clause and the Rule of Lenity (Doc. 84). It states that the defendant notes that the Small Business Administration revised its PPP guidance twenty-four separate times, and that the Government counters that he is charged with fraud and false-statement offenses, not PPP violations. The Court states that the question is whether the defendant acted fraudulently, and that disputes about knowledge of SBA guidance go to intent and are for the jury.

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Case 3:24-cr-30153-DWD             Document 150 Filed 06/10/26     Page 1 of 8   Page ID
                                             #869



                       IN THE UNITED STATES DISTRICT COURT
                      FOR THE SOUTHERN DISTRICT OF ILLINOIS

 UNITED STATES OF AMERICA,                        )
                                                  )
         Plaintiff,                               )
                                                  )
 vs.                                              )   Case No. 24-CR-30153-DWD
                                                  )
 DANA C. HOWARD, RICHARD                          )
 SCOTT MYERS, and GLENN                           )
 SUNQUIST,                                        )

         Defendants.

                                MEMORANDUM AND ORDER

        This matter is before the Court on Defendant Richard Scott Myers’ Motion to

Dismiss Counts Related to PPP Loan Applications and Forgiveness 1 Based on the Due

Process Clause and the Rule of Lenity. (Doc. 84). The United States has filed a

memorandum in opposition. (Doc. 93). The Court heard oral argument from the parties

on May 14, 2026. For the reasons that follow, the motion is DENIED.

                                          I.   BACKGROUND

        On November 20, 2024, Dana C. Howard, Glenn Sunquist, and Myers were named

as co-defendants in a 13-count indictment. According to the indictment, Howard and

Myers were co-owners of Zoie LLC (“Zoie”) and Zade Trucking (“Zade”). Sunquist was

an employee hired to handle bookkeeping for the businesses.

        The indictment alleges that, beginning in approximately April 2020, Howard and

Myers conspired to defraud the United States and the Small Business Administration.



1 Counts 1 through 5 of the Indictment.
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                                        #870



They allegedly obtained a Paycheck Protection Program (“PPP”) loan of approximately

$1.426 million through false representations and then misused and diverted the loan

proceeds. Specifically, Howard and Myers are accused of participating in a scheme to

fraudulently secure and misuse the PPP funds and to conceal their use of those proceeds

through various financial transactions and bankruptcy filings. The defendants allegedly

prepared and executed the PPP loan application and related certifications, received the

funds into accounts controlled by their companies, converted the proceeds into cashier’s

checks and other transfers, and later submitted requests for loan forgiveness while hiding

how the money had actually been used. The indictment further claims that both Howard

and Myers initiated bankruptcy proceedings while still in possession of PPP-derived

funds and made false statements in those proceedings concerning their assets and

bankruptcy status.

      Counts 1 through 5 arise from conduct relating to a PPP loan occurring between

April 2020 and October 2022. During that period, the United States Small Business

Administration (SBA), the agency responsible for administering the PPP loan program,

revised its guidance on PPP loan compliance twenty-four separate times. Defendant

notes that this was “in addition to the CARES Act and the CFR provisions implementing

temporary rules, interim final rules, and final rules.” (Doc. 84, pg. 2). According to

Defendant, the resulting regulatory uncertainty requires dismissal of Counts 1 through 5

pursuant to the Due Process Clause of the Fifth Amendment and the rule of lenity.

      The Government counters, noting that Defendant is not charged with violating

PPP regulations. Rather, Defendant is charged with federal fraud and false-statement
Case 3:24-cr-30153-DWD         Document 150 Filed 06/10/26          Page 3 of 8    Page ID
                                         #871



offenses, including conspiracy to commit wire fraud, wire fraud, making false statements,

and engaging in monetary transactions involving criminally derived funds. The

Government maintains that these statutes prohibit schemes to obtain money through

intentional deception and knowingly false representations. The Government argues that,

because the application of these statutes does not depend on the clarity of the PPP

program’s guidance, the motion should be denied.

                                    II.    DISCUSSION

       The Fifth Amendment’s Due Process Clause requires criminal statutes to provide

fair warning of the conduct they prohibit. In United States v. Lanier, the Supreme Court

identified three related manifestations of this requirement:

       First, the vagueness doctrine bars enforcement of a statute which either
       forbids or requires the doing of an act in terms so vague that men of
       common intelligence must necessarily guess at its meaning and differ as to
       its application.” Second, ... the canon of strict construction of criminal
       statutes, or rule or lenity, ensures fair warning by so resolving ambiguity in
       a criminal statute as to apply it only to conduct covered. Third, ... due
       process bars courts from applying a novel construction of a criminal statute
       to conduct that neither the statute nor any prior judicial decision has fairly
       disclosed to be within its scope.


United States v. Lanier, 520 U.S. 259, 266, 117 S.Ct. 1219, 137 L.Ed.2d 432 (1997) (citations

omitted); see also United States v. Balint, 201 F.3d 928, 934 (7th Cir. 2000). In all three

contexts, the central question is “whether the statute, either standing alone or as

construed, made it reasonably clear at the relevant time that the defendant's conduct was

criminal.” Lanier, 520 U.S. at 267, 117 S.Ct. 1219.
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                                          #872



       Because Defendant’s challenge is not premised on the First Amendment, it is an

as-applied challenge, not a facial one. United States v. Calimlim, 538 F.3d 706, 710–11 (7th

Cir. 2008). The Court further notes that a scienter requirement in a statute significantly

alleviates vagueness concerns. McFadden v. United States, 135 S. Ct. 2298, 2307 (2015). The

presence of a scienter element makes a defendant’s vagueness burden “very difficult to

carry.” Calimlim, 538 at 711; see also United States v. Cherry, 938 F.2d 748, 754 (7th Cir. 1991)

(proof of intent and knowledge does “much to destroy any force in the argument that

application of the statute would be so unfair that it must be held invalid.”) (internal

quotations omitted).

       Counts 1-3 charge conspiracy to commit wire fraud and wire fraud in violation of

18 U.S.C. §§ 1349 and 1343. These offenses require (1) participation in a scheme to

defraud, (2) intent to defraud, and (3) use of interstate wires in furtherance of the fraud.

United States v. Sheneman, 682 F.3d 623, 628–29 (7th Cir. 2012); 18 U.S.C. §§ 1349, 1343.

Count 4 charges making materially false statements in violation of 18 U.S.C. § 1001(a)(2),

which requires proof that (1) the defendant made a statement or representation; (2) that

the statement or representation was false; (3) the defendant did so knowingly and

willfully; (4) that the statement was material; and (5) that the statement was made in a

matter within the jurisdiction of the federal government. United States v. Castro, 704 F.3d

125, 139 (3d Cir. 2013). Count 5 charges money-laundering violation under 18 U.S.C. §

1957, which requires proof of “the unlawful activity that generated ‘proceeds’ and then

the monetary transaction conducted with the criminal proceeds.” United States v.

Kelerchian, 937 F.3d 895, 908 (7th Cir. 2019).
Case 3:24-cr-30153-DWD             Document 150 Filed 06/10/26                Page 5 of 8      Page ID
                                             #873



        Because each of the charged statutes requires proof of knowing falsehoods or

intentional deception in connection with obtaining or using money or property,

Defendant’s vagueness burden is “very difficult to carry.” Calimlim, 538 F.3d 706, 711 (7th

Cir. 2008). The conduct alleged in the indictment, submitting false information to obtain

PPP loan funds and misappropriating those funds, 2 falls within the plain language of 18

U.S.C. §§ 1343, 1349, 1001(a)(2), and 1957. Defendant’s argument that regulatory

uncertainty in SBA guidance or CARES Act implementing rules renders these

prosecutions unconstitutionally vague is therefore unpersuasive. Defendant is not

charged with violating any SBA regulation or provision of the CARES Act. He is charged

with violating federal criminal statutes that unambiguously prohibit schemes to obtain

money through material false statements and the knowing use of criminally derived

proceeds. Any ambiguity in collateral program guidance does not inject vagueness into

these criminal prohibitions or deprive Defendant of fair notice that lying to obtain

government funds is illegal.

        A criminal statute is unconstitutionally vague only if it “fails to give ordinary

people fair notice of the conduct it punishes, or so standardless that it invites arbitrary

enforcement.” Johnson v. United States, 576 U.S. 591, 595, 135 S. Ct. 2551, 2556, 192 L. Ed.

2d 569 (2015). The statutes charged here contain no such defect. Likewise, the rule of




2 The Indictment alleges that Defendants made material false statements on their PPP loan applications and

certifications by representing that the funds would be used “for payroll” and “to retain workers and
maintain payroll or make mortgage interest, lease, and utility payments,” when they instead used the
proceeds for personal enrichment, including writing checks to themselves, obtaining cashier’s checks,
transferring funds to others, and purchasing a residential home. It does not charge Defendants with
violating PPP program rules in and of itself.
Case 3:24-cr-30153-DWD         Document 150 Filed 06/10/26          Page 6 of 8    Page ID
                                         #874



lenity applies only when, after exhausting traditional tools of statutory construction,

there remains a “grievous ambiguity” in the criminal statute itself. See, e.g., United States

v. Pace, 48 F.4th 741 (7th Cir. 2022). No such grievous ambiguity exists in the subject

statutes.

       Numerous district courts, considering similar arguments, have reached the same

conclusion. See e.g., United States v. Mansouri, No. 1:22-CR-00034-LJV-MJR, 2023 WL

9100641, at *4 n.1 (W.D.N.Y. June 29, 2023), report and recommendation adopted, 2023

WL 8430239 (W.D.N.Y. Dec. 5, 2023) (rejecting the defendant’s “attempt to blur the lines

between SBA rules about PPP loans and the elements of a fraud offense.”); United States

v. Crowther, No. 2:20-CR-114-JES-MRM, 2021 WL 2583554, at *2 (M.D. Fla. June 23, 2021),

aff’d, No. 21-12255, 2023 WL 3813509 (11th Cir. June 5, 2023) (denying motion for post-

verdict relief, explaining that the defendant “was not charged with violating the CARES

Act,” that the charged offenses related “to defendant’s misrepresentations to secure a

loan, and then the use of the loan proceeds for various monetary transactions,” and that

his reliance on CARES Act ambiguity was “misplaced.”); United States v. Borgheriu No.

4:22-CR-06040-MKD, 2023 WL 8634784, at *3–5 (E.D. Wash. Dec. 13, 2023) (rejecting a

vagueness challenge premised on an SBA regulation because the defendant “is not under

Indictment for alleged violations of [the regulation]” but was instead charged under

unambiguous criminal statutes prohibiting wire fraud and false claims); United States v.

Kjar, No. 4:24CR331 HEA, 2024 WL 5088850 (E.D. Mo. Dec. 12, 2024) (denying motion to

dismiss a false-statement charge under 18 U.S.C. § 1014 arising from a PPP loan, holding

that the indictment properly charged the elements of § 1014, not any CARES Act
Case 3:24-cr-30153-DWD         Document 150 Filed 06/10/26           Page 7 of 8    Page ID
                                         #875



violation, and rejecting vagueness and lenity arguments that improperly looked beyond

the charging statute to collateral PPP rules).

       Similarly, in United States v. Schampers, No. 22-CR-31, 2023 WL 1098445 (E.D. Wis.

Jan. 30, 2023), the United States District Court for the Eastern District of Wisconsin

rejected efforts to conflate SBA program rules with the elements of wire fraud. The court

prohibited the government from arguing that the defendant’s purchase of residential

property was a per se prohibited use of PPP loan proceeds, emphasizing that the

defendant was “charged with Wire Fraud, not violation of the PPP.” The court explained

that the issue at trial would be whether the defendant, with intent to defraud, “falsely

claimed that he intended to spend the loan proceeds on payroll, lease and mortgage

expenses, interest, and utilities,” and whether any such representation, if false, was

material.” Id. at *4.

       Here, as in Schampers, the question is whether the defendant acted fraudulently,

not whether he violated interim rules governing the PPP. Further, to the extent that

Defendant’s argument pertains to factual disputes about his knowledge or

understanding of SBA guidance, those disputes go to his intent and are questions for the

jury, not a basis for dismissal. Morissette v. United States, 342 U.S. 246, 274

(1952) (“Where intent of the accused is an ingredient of the crime charged, its existence is

a question of fact which must be submitted to the jury.”); see also United States v. Borgheriu

No. 4:22-CR-06040-MKD, 2023 WL 8634784, at *3–5 (E.D. Wash. Dec. 13, 2023) (disputes

over defendant’s awareness of SBA rules, reasonable interpretations of loan documents,
Case 3:24-cr-30153-DWD       Document 150 Filed 06/10/26         Page 8 of 8   Page ID
                                       #876



and beliefs about permissible uses of funds “remain in dispute” and “are questions for

the jury, not the Court”).

                                  III.     Conclusion

       For these reasons, Defendant Richard Scott Myers’ Motion to Dismiss Counts

Related to PPP Loan Applications and Forgiveness Based on the Due Process Clause and

the Rule of Lenity. (Doc. 84) is DENIED.                              Digitally signed

       SO ORDERED.
                                                    Judge             by Judge Dugan
                                                                      Date:

       Dated: June 8, 2026                          Dugan             2026.06.08
                                                                      22:31:41 -05'00'
                                                        ______________________________
                                                        DAVID W. DUGAN
                                                        United States District Judge


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