Factual Basis — United States v. Francois (Eastern District of Louisiana, Document 25)

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A Factual Basis in United States of America v. Irvin C. Francois, II, Criminal No. 25-165, in the U.S. District Court for the Eastern District of Louisiana, Document 25, filed 09/23/25 in Case 2:25-cr-00165-JCZ-JVM. It states that the defendant has agreed to plead guilty to Count One, False Statements, in violation of Title 18, United States Code, Section 1001, and Count Two, Money Laundering, in violation of Section 1957. The parties stipulate that on or about April 3, 2021 a 1st Draw PPP loan application for I and F Construction attested to 8 employees and monthly average payroll of $57,916.00, and that the defendant received a loan in the amount of $144,790.00. It states that on or about April 17, 2021 a wire transfer of $41,000.00 was initiated to a car dealership.

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Case 2:25-cr-00165-JCZ-JVM Document 25 Filed 09/23/25 Page1of6

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

UNITED STATES OF AMERICA * CRIMINAL NO, 25-165
v. * SECTION: “A”
IRVIN C. FRANCOIS, Hl *
FACTUAL BASIS

The defendant, IRVIN C. FRANCOIS, II (“FRANCOIS”), has agreed to plead guilty
as charged to Count One - False Statements, in violation of Title 18, United States Code, Section
1001, and Count Two —Money Laundering, in violation of Title 18, United States Code, Section
1957, of the Indictment. This Factual Basis does not attempt to set forth all of the facts known to
the United States at this time. The United States and FRANCOIS do hereby stipulate and agree
that the allegations in the Indictment and the following facts, which include relevant conduct
beyond what is charged, are true and correct and that, should this matter have proceeded to trial,
the government would have proven them beyond a reasonable doubt through the introduction of
competent testimony and admissible tangible and documentary exhibits.

Parties, Lenders, and Federal Programs

At all times material herein, FRANCOIS was a resident of Orleans Parish, Louisiana,
within the Eastern District of Louisiana.

At all times material herein, I & F Construction, LLC d/b/a “TI and F Construction” was a
Louisiana limited liability company formed in or around July 21, 2009, and FRANCOIS was the
registered agent and sole beneficiary owner.

AUSA AW

Defendant 7 £¢

Defense Counsel (AD—
Case 2:25-cr-00165-JCZ-JVM Document 25 Filed 09/23/25 Page 2of6

Atall times relevant herein, the United States Small Business Administration (“SBA”) was
an agency within the executive branch of the Government of the United States. Among other
things, SBA assists in the economic recovery of communities after disasters by providing SBA
backed loans. SBA loans are made through banks, credit unions, and other lenders who partner
with SBA.

The CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was a federal
law enacted in or about March 2020. The CARES Act provided emergency financial assistance to
the millions of Americans suffering the economic effects of the COVID-19 pandemic. One source
of relief provided by the CARES Act was the authorization of forgivable loans to small businesses
for job retention and certain other expenses, through a program referred to as the Paycheck
Protection Program (“PPP”).

The PPP was overseen by the SBA, which had authority over all PPP loans. Individual PPP
loans, however, were issued by approved private lenders, who received and processed PPP loan
applications and supporting documentation and, following SBA approval, made loans using the
lenders’ own funds. To obtain a PPP loan, a qualifying business had to submit a PPP loan
application signed by an authorized representative of the business, The PPP loan application
required the business, through its authorized representative, to acknowledge the program rules and
to make affirmative certifications to be eligible for the PPP loan. For example, in the PPP loan
application (SBA From 2483), the business, through its authorized representative, had to state its
average monthly payroll expenses and number of employees. In addition, businesses had to

provide documentation showing their payroll expenses, as part of the PPP loan application process.

Defendant F<
Defense Counsel | S
Case 2:25-cr-00165-JCZ-JVM Document 25 Filed 09/23/25 Page3of6

These figures were used to calculate the amount of money the small business was eligible to
receive under the PPP.

Among the type of businesses eligible for a PPP loan were individuals who operated under
a “sole proprietorship” business structure. In order to be eligible to receive such a PPP loan,
individuals had to report and document their income and expenses from the sole proprietorship, as
typically reported to the Internal Revenue Service (“IRS”) on Form 1040, Schedule C, for a given
year. The lending institution or loan processor used this information and documents to calculate
the amount of money the individual was entitled to receive under PPP.

Once a qualifying business completed a PPP application, a participating lender processed
the application. If a PPP loan was approved, the participating lender funded the PPP loan using its
own monies, which the SBA guaranteed. In the course of processing the PPP loan, the lender
transmitted data from the loan application to the SBA, including information about the borrower,
the total amount of the loan, and the identified number of employees.

At all times material herein, ReadyCap Lending, LLC was a participating lender in the
PPP.

Proceeds from a PPP loan were legally required to be used only for certain permissible
business expenses, including payroll costs, mortgage interest, rent, and utilities. If used as per the
PPP loan restrictions, an applicant could apply for a “second draw” PPP loan to be used for the
same purposes described above. Under the applicable PPP rules and guidance, the interest and
principal on the PPP loan was eligible for forgiveness if the business spent the loan proceeds on
permissible items within a designated period of time and used a certain portion of the loan toward

payroll expenses.

3
AUSA Ce

Defendant
Defense Counsel v
Case 2:25-cr-00165-JCZ-JVM Document 25 Filed 09/23/25 Page 4of6

False Statements — Count One

Specifically, on or about April 3, 2021, FRANCOIS submitted a 1st Draw PPP loan
application for I and F Construction, to ReadyCap Lending, LLC with the assistance of a known
third party. The application contained attestations that FRANCOIS employed 8 people and that
his monthly average payroll was $57,916.00. FRANCOIS also submitted a 2019 IRS 1040 Form
Schedule C that showed annual gross income of $695,000.00, an invoice for “I & F Construction”
showing an amount owed for approximately $75,000.00 and a Hancock Whitney Bank statement
showing a balance of approximately $30,000.00. However, in truth and fact, FRANCOIS did not
employ the number of persons in the PPP loan application, he did not have an average monthly
salary of $57,916.00, the 2019 Schedule C submitted in support of the loan was a falsely created
document with false earnings, the I & F Construction invoice was fake, and the Hancock Whitney
Bank statement was a forged document. FRANCOIS electronically signed this PPP loan
application knowing that his aforementioned material assertions and documents were false and
despite being warned in an attestation clause that all statements and attachments in the PPP
application needed to be “true and accurate” and were subject to the penalties of Title 18, United
States Code, Section 1001.

On or about April 9, 2021, FRANCOIS received the Ist Draw PPP loan (SBA loan
#2871598705) for I and F Construction from ReadyCap Lending, LLC in the amount of
$144,790.00, which was deposited into a Hancock Whitney Bank account # 63343421 in the name
of I & F Construction, LLC that FRANCOIS controlled.

On or about December 17, 2021, FRANCOIS applied with the assistance of a known third
party to have the PPP loan forgiven by the SBA and he falsely attested that $120,000.00 of the

loan had been used on payroll expenses.

Defense Counsel Aad
Case 2:25-cr-00165-JCZ-JVM Document 25 Filed 09/23/25 Page5of6

Money Laundering — Count Two

After receiving the criminally derived proceeds of the fraudulent PPP loan in the amount
of $144,790.000 detailed under Count One, FRANCOIS initiated an electronic wire transfer on
or about April 17, 2021, in the amount of $41,000.00 out of I & F Construction, LLC Hancock
Whitney Bank account # 63343421 to a CarMax car dealership in Kenner, Louisiana. This
electronic wire transfer, which affected interstate commerce, and was derived from the scheme to
defraud using electronic communications as between FRANCOIS, ReadyCap Lending, LLC,
Hancock Whitney, and the SBA, was used to purchase a 2014 Mercedes Benz sedan vehicle in
FRANCOIS’ name. The parties agree that the wire fraud described herein was a “specified
unlawful activity” under Title 18, United States Code, Section 1957.

Limited Nature of Factual Basis and Conclusion

This proffer of evidence is not intended to constitute a complete statement of all facts
known by FRANCOIS, and/or the government. Rather, it is a minimum statement of facts
intended to prove the necessary factual predicate for his guilty plea. The limited purpose of this
proffer is to demonstrate that there exists a sufficient legal basis for the plea of guilty to the charged
offenses against FRANCOIS. The government would further establish the material falsity of
FRANCOIS’ PPP application with testimony from the lenders and the SBA that FRANCOIS
would not have received the COVID-19 assistance were it not for said false statements and
attached documents. The above facts come from an investigation conducted by and would be
proven at trial by credible testimony from witnesses and Special Agents from the Office of
Veterans Affairs — Office of Inspector General and the Internal Revenue Service — Criminal

Investigations, representatives from the banks described above, SBA representatives, and business

Defendant
Defense Counsel
Case 2:25-cr-00165-JCZ-JVM Document 25 Filed 09/23/25 Page6of6

records and documents and tangible exhibits in the custody of the federal agencies described

above.

APPROVED AND AGREED TO:

Assistant United States Attorney

Attorney for Defendar io
IRVIN C. FRANCOIS, Tl Date
Defendant


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