Information — United States v. Hayes D. Horner, Jr. (M.D. Pa.)

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An Information in United States of America v. Hayes D. Horner, Jr., Case 4:21-cr-00242-MWB, in the U.S. District Court for the Middle District of Pennsylvania, filed August 31, 2021 as Document 1. Count 1 charges wire fraud under 18 U.S.C. § 1343. It alleges that coconspirators submitted EIDL applications in the names of Victim #1, who was already deceased, and Victim #2, without that person's knowledge, and that EIDL funds including $149,900 were deposited into accounts of Horner's Towing & Recovery LLC. It alleges that Horner used approximately $58,131.02 for personal expenses and requested wires of $94,500 to the Bank of China and $70,000 to Bank of America, which the banks did not honor. Forfeiture is sought of $100,583.66 seized from a Bank #2 account.

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Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 1 of 11

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA

HAYES D. HORNER, JR..,
Defendant

INFORMATION

THE UNITED STATES ATTORNEY CHARGES:
COUNT 1

Wire Fraud
18 U.S.C. § 1343

} Introduction

At times material to the Indictment:

Relevant Individuals and Entities

1. Defendant HAYES D. HORNER, JR. resided in or about
Berwick, Columbia County, within the Middle District of Pennsylvania.

2. Horner’s Towing & Recovery LLC was a limited liability
company incorporated in the Commonwealth of Pennsylvania, with a
business address located in Berwick, Pennsylvania. Horner's Towing &

Recovery LLC was incorporated on or about January 18, 2006, and was

owned and controlled by HORNER.
Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 2 of 11

3. 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 included maintaining and strengthening the nation’s economy
by enabling the establishment and viability of small businesses and by
assisting in the economic recovery of communities after disasters. As
part of those efforts, the SBA enabled and provided for loans with
government-backed guarantees to small business owners through
financial institutions and other lenders. The SBA also provided direct
loans.

4. Bank #1 was a financial institution insured by the Federal
Deposit Insurance Corporation (“FDIC”) and headquartered in Berwick,
Pennsylvania.

5. Bank #2 was a financial institution insured by the FDIC and
headquartered in Pittsburgh, Pennsylvania.

6. Victim #1 was a deceased individual who formerly lived in or
about Peoria, Arizona.

7. Victim #2 was an individual who lived in or about

Longmeadow, Massachusetts.
Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 3 of 11

The Economic Injury Disaster Loan Program

8. The Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act was a federal law enacted in March 2020 that provided
emergency financial assistance to millions of Americans suffering
financial difficulties from the economic impact of the COVID-19
pandemic. One source of relief provided by the CARES Act was the
expansion of an existing disaster-related program — the Economic Injury
Disaster Loan (“EIDL”) — to provide low-interest financing (including
forgivable $10,000 advances) to small businesses and other eligible
entities. The CARES Act authorized the SBA to provide EIDL loans to
eligible small businesses experiencing substantial financial disruption
resulting from the COVID-19 pandemic.

9. To obtain an EIDL loan, a qualifying business was required
to submit an application directly to the SBA and provide information
about the business’s operations, such as the number of employees, gross
revenues 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
EIDL loans for COVID-19 relief, the 12-month period was the 12-month
period from January 31, 2019, to January 31, 2020. The applicant was

also required to certify that all of the information in the application was
3
Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 4 of 11

true and correct to the best of the applicant’s knowledge.

10. EIDL loan applications were submitted directly to the SBA
and processed by the agency with support from a government
contractor. The amount of the loan, if the application was approved,
was determined based, in part, on the information provided by the
applicant about employment, revenue, and cost of goods sold. Any funds
issued under an EIDL loan were issued directly by the United States
Treasury.

11. EIDL proceeds could only 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 were not intended to
replace lost sales or profits or for expansion of a business.

II. The Scheme to Defraud

12. The object of the scheme was for HAYES D. HORNER, JR.
and his coconspirators to enrich themselves by fraudulently obtaining
EIDL funds through misrepresentations and false documentation.

13. On or about May 27, 2020, HORNER’s coconspirators
submitted and caused to be submitted to the SBA an EIDL loan
application on behalf of Victim #2, and without Victim #2’s knowledge,

containing material misstatements, by use of the internet and interstate
4
Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 5 of 11

and international wires.

14. On or about June 24, 2020, HORNER’s coconspirators
submitted and caused to be submitted to the SBA an EIDL loan
application on behalf of Victim #1, at the time Victim #1 was already
deceased, containing material misstatements, by use of the internet and
interstate and international wires.

15. Onor about June 30, 2020, HORNER opened and caused to
be opened a business checking account in the name of Horner's Towing
& Recovery LLC with Bank #1.

16. On or about July 2, 2020, HORNER opened and caused to be
opened a business checking account in the name of Horner’s Towing &
Recovery LLC with Bank #2. The account was opened with the deposit
of a negotiated instrument valued at $47,147. On or about July 7, 2020,
Bank #2 deemed the negotiated instrument altered and fictitious, and
rejected the funds.

17. Between on or about July 2, 2020 and July 14, 2020,
HORNER and his coconspirators, aiding and abetting one another,
deposited, caused to be deposited, and attempted to deposit EIDL funds
issued by the SBA, by use of interstate wires, as a result of the EIDL

applications submitted on behalf of Victim #1 and Victim #2, to the
5
Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 6 of 11

business checking accounts in the name of Horner’s Towing & Recovery

LLC at Bank #1 and Bank #2, as summarized below:

a.

On or about July 7, 2020, a deposit of $98,300 in EIDL
funds credited to the business checking account in the
name of Horner’s Towing & Recovery LLC at Bank #1.
The funds were accepted, but subsequently returned to
the SBA by Bank #1:

On or about July 7, 2020, a deposit of $149,900 in EIDL
funds credited to the business checking account in the
name of Horner’s Towing & Recovery LLC at Bank #2:
On or about July 8, 2020, an attempted deposit of
$149,900 in EIDL funds into the business checking
account in the name of Horner’s Towing & Recovery LLC
at Bank #1. The funds were rejected by Bank #1:

On or about July 14, 2020, an attempted deposit of $1,000
in EIDL funds into the business checking account in the
name of Horner’s Towing & Recovery LLC at Bank #1.

The funds were rejected by Bank #1; and

. On or about July 14, 2020, a deposit of $9,000 in EIDL

advance funds credited to the business checking account
6
Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 7 of 11

in the name of Horner’s Towing & Recovery LLC at Bank
#2.

18. Between on or about July 6, 2020 and July 15, 2020,
HORNER obtained, withdrew, and used approximately $58,131.02 in
EIDL funds deposited into the business checking account in the name of
Horner’s Towing & Recovery LLC at Bank #2. HORNER obtained,
used, and withdrew those funds through a series of debit card
transactions and cash withdrawals at automated teller machines and
from bank tellers, all occurring within the Middle District of
Pennsylvania. The funds were used for personal, instead of business
expenses.

19. On or about July 7, 2020, HORNER sent and caused to be
sent an international wire transfer request to Bank #1, requesting a
wire of $94,500 in EIDL funds to be sent from the business checking
account in the name of Horner’s Towing & Recovery LLC at Bank #1, to
the Bank of China, for a recipient located in Hong Kong. In addition to
the wire transfer request, HORNER forwarded and caused to be
forwarded to Bank #1 an electronic mail communication from
HORNER’s coconspirator, containing the wire transfer instructions.

The requested wire transfer was not related to legitimate business
7
Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 8 of 11

purposes. Bank #1 did not honor the wire transfer request, and
subsequently closed the business checking account in the name of
Horner’s Towing & Recovery LLC.

20. On or about July 14, 2020, HORNER sent and caused to be
sent a wire transfer request to Bank #2, requesting a wire of $70,000 in
EIDL funds to be sent from the business checking account in the name
of Horner’s Towing & Recovery LLC at Bank #2, to an account at Bank
of America. The requested wire transfer was not related to legitimate
business purposes. Bank #2 did not honor the wire transfer request,
and subsequently froze the remaining $100,583.66 in EIDL funds
located within the business checking account in the name of Horner’s
Towing & Recovery LLC.

III. Statutory Allegations

21. From on or about May 27, 2020, to on or about July 14, 2020,

in the Middle District of Pennsylvania and elsewhere, the defendant,
HAYES D. HORNER, JR.,

aiding and abetting others known and unknown to the United States

Attorney, and having devised and intended to devise the above-

described scheme and artifice to defraud and to obtain money and

property by means of materially false and fraudulent pretenses,
8
Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 9 of 11

representations, and promises, and for the purpose of executing the
above-described scheme and artifice to defraud, transmitted and caused
to be transmitted by means of wire communication in interstate and
foreign commerce the following writings, signs, signals, pictures, and

sounds:

Approximate Description
Date of Wire
On or about | Interstate wire transfer of $149,900 from the
July 7, 2020 | SBA’s Financial Management System to the
United States Treasury, for deposit in the

business checking account in the name of

Horner’s Towing & Recovery LLC at Bank #2. |

All in violation of Title 18, United States Code, Sections 1343 and
Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 10 of 11

FORFEITURE ALLEGATION

22. The allegations contained in Count 1 of this Information are
hereby realleged and incorporated by reference for the purpose of
alleging forfeiture pursuant to Title 18, United States Code, Section
981(a)(1)(C), Title 28, United States Code, Section 2461(c), and Title 18,
United States Code, Section 982.

23. Upon conviction of the offenses in violation of Title 18,
United States Code, Section 1343, the defendant,

HAYES D. HORNER, JR.,
shall forfeit to the United States of America, pursuant to Title 18,
United States Code, Section 981(a)(1)(C), Title 28, United States Code,
Section 2461(c), and Title 18, United States Code, Section 982, any
property, real or personal, which constitutes or is derived from proceeds
traceable to the offenses, and any property used, or intended to be used,
in any manner or part, to commit, or to facilitate the commission of the
offenses, including but not limited to:
a. $100,583.66 in funds seized from Bank #2, account
number 90-1649-6523 in the name of Horner’s Towing &
Recovery LLC, on or about June 28, 2021, currently in the

possession of the United States Marshals Service.
10
Case 4:21-cr-00242-MWB Document1 Filed 08/31/21 Page 11 of 11

24. If any of the property described above, as a result of any act

or omission of the defendant:

a. cannot be located upon the exercise of due diligence;
b. has been transferred or sold to, or deposited with, a third
party;
c. has been placed beyond the jurisdiction of the court:
d. has been substantially diminished in value: or
e. has been commingled with other property which cannot be
divided without difficulty,
the United States of America shall be entitled to forfeiture of substitute
property pursuant to Title 21, United States Code, Section 853(p), as
incorporated by Title 28, United States Code, Section 2461(c).
All pursuant to Title 18, United States Code, Section 981(a)(1)(C),
Title 28, United States Code, Section 2461(c), and Title 18, United
States Code, Section 982.

Date? 4/39): i BRUCE D. BRANDLER
Acting United States Attorney

By: Fe —_
PHILLIP J. CARABALLO
Assistant United States Attorney


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