Information — United States of America v. Michael Bischoff, Eastern District of Michigan, 2:20-cr-20556

Summary

Criminal information, Case 2:20-cr-20556, filed 11/12/20, in the U.S. District Court for the Eastern District of Michigan, charging Michael Bischoff with one count of bank fraud under 18 U.S.C. 1344(2). It alleges that between about June 4, 2020 and August 2, 2020 he submitted at least 9 false PPP loan applications worth $931,772 for businesses he owned or served as registered agent, including Little Dino’s Pizza Express, Inc. and Motor City Pizza, misstating payroll and employee counts and, for some loans, using another person’s identifying information. It says five loans totaling $593,590 were sent to accounts he controlled, and it seeks forfeiture of $844,590.

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Case 2:20-cr-20556-PDB-APP ECF No.1, PagelD.1 Filed 11/12/20 Page 1of8

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION
UNITED STATES OF AMERICA CRIMINAL NO.
V. VIOLATION: 18 U.S.C. § 1344(2)
Case: 2:20-cr-20556
MICHAEL BISCHOFF, Assigned To : Borman, Paul D.

Referral Judge: Patti, Anthony P.
Assign. Date : 11/12/2020
Description: INFO USA v. BISCHOFF (SO)

Defendant.

/

INFORMATION

THE UNITED STATES ATTORNEY CHARGES:
At all times relevant to this Information:
COUNT1
(Bank Fraud - 18 U.S.C. § 1344(2))

1. Between approximately June 4, 2020, and August 2, 2020, in the Eastern
District of Michigan, the defendant, Michel Bischoff (“Bischoff”), did knowingly
execute and/or attempt to execute a scheme or artifice to obtain any of the moneys,
funds, credits, assets, securities, or other property owned by, or under the custody or
control of, a financial institution, by means of false or fraudulent pretenses,
representations, or promises, in violation of 18 U.S.C. 1344(2).

Background

It is relevant to the Information that during the above-listed time period:
Case 2:20-cr-20556-PDB-APP ECF No.1, PagelD.2 Filed 11/12/20 Page 2 of 8

2. Defendant Bischoff was a resident of Macomb County within the Eastern
District of Michigan.

3. Defendant Bischoff was the owner and/or registered agent of Little Dino’s
Pizza Express, Inc. (doing business as Little Dino’s Pizza), Passport Pizza, Motor
City Pizza, Group 1 Enterprises Inc., Marvel Media LLC, D-Brands Inc., MJR
Financial Group LTD, MJR Food Group Inc., and Group MJR Inc. (collectively, the
“Bischoff Entities”), which are registered in the State of Michigan and located in
Macomb County within the Eastern District of Michigan.

4. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a
federal law enacted in or around March 2020 and designed to provide emergency
financial assistance to the millions of Americans who are suffering the economic
effects caused by the COVID-19 pandemic. One source of relief provided by the
CARES Act was the authorization of up to $349 billion in forgivable loans to small
businesses for job retention and certain other expenses, through a program referred
to as the Paycheck Protection Program (“PPP’’). In or around April 2020, Congress
authorized over $300 billion in additional PPP funding.

5. In order to obtain a PPP loan, a qualifying business must submit a PPP loan
application, which is signed by an authorized representative of the business. The
PPP loan application requires the business (through its authorized representative) to
acknowledge the program rules and make certain affirmative certifications in order

to be eligible to obtain the PPP loan. Inthe PPP loan application, the small business
2
Case 2:20-cr-20556-PDB-APP ECF No.1, PagelD.3 Filed 11/12/20 Page 3 of 8

(through its authorized representative) must state, among other things, its: (a)
average monthly payroll expenses; and (b) number of employees. These figures are
used to calculate the amount of money the small business is eligible to receive under
the PPP. In addition, businesses applying for a PPP loan must provide
documentation showing their payroll expenses.

6. A PPP loan application must be processed by a participating lender. Ifa
PPP loan application is approved, the participating lender funds the PPP loan using
its own monies, which are 100% guaranteed by Small Business Administration
(“SBA”). Data from the application, including information about the borrower, the
total amount of the loan, and the listed number of employees, is transmitted by the
lender to the SBA in the course of processing the loan.

7. PPP loan proceeds must be used by the business on certain permissible
expenses—payroll costs, interest on mortgages, rent, and utilities. The PPP allows
the interest and principal on the PPP loan to be entirely forgiven if the business
spends the loan proceeds on these expense items within a designated period of time
after receiving the proceeds and uses a certain amount of the PPP loan proceeds on
payroll expenses.

Participating Financial Institutions and the PPP Loans

8. Lender A is a nonbank small business investment lender; thus, it is a

“financial institution” as defined in 18 U.S.C § 20(5).
Case 2:20-cr-20556-PDB-APP ECF No.1, PagelD.4 Filed 11/12/20 Page 4 of 8

9. Bank Awasa financial institution based in Fort Lee, New Jersey that was
insured by the FDIC; thus, it is a “financial institution” as defined in 18 U.S.C. §
20(1).

10. Bank B was a financial institution based in Salt Lake City, Utah that was
insured by the FDIC; thus, it is a “financial institution” as defined in 18 U.S.C §
20(1).

11. Bank Processor A was a financial technology company based in Atlanta,
Georgia that provides direct funding services to small businesses and consumers
through an automated lending platform. Since March 2020, Bank Processor A has
processed PPP loan applications and sold PPP loans to certain financial institutions,
including Bank A.

Defendant Obtained PPP Loans through False and Fraudulent

Representations

12. Between approximately June 4, 2020, and August 2, 2020, defendant
Bischoff submitted, and caused the submission of, at least 9 false and fraudulent PPP
loan applications worth a total of $931,772 on behalf of the Bischoff Entities
(collectively, the “PPP Loans”). The PPP Loans are listed in the following table by

loan date, the funding financial institution or processing company and loan amount.:
Case 2:20-cr-20556-PDB-APP ECF No.1, PagelD.5 Filed 11/12/20 Page 5 of 8

INo.| Loan Date Funding Loan Amount
Financial
Institution or
Processor
1 | June 4, 2020 Lender A $50,000
2 | June 6, 2020 Bank B $134,165.00
3 | June 18, 2020 | Bank A $90,410.00
4} June 19,2020 | BankA $112,470.00
5 | June 20, 2020 | Bank A $119,791.00
6 | June 24, 2020 | Bank A $136,654.00
7 | July 15,2020 | Bank $75,436.00
Processor A
8 | July 24,2020 | Bank $89,477.00
Processor A
9 | August 2, 2020 | Bank $123,369.00
Processor A

13. The funds for five of the PPP Loans (Loan Nos. 2-6) were disbursed to
defendant Bischoff, totaling $593,590. The funds were sent via ACH wire transfer
from the listed funding institutions to bank accounts that Bischoff controlled.

14. In each of the applications for the PPP Loans, Defendant Bischoff falsely
represented the amount of payroll and the number of employees working for the
Bischoff Entities.

15. In the applications for PPP Loan Nos. 2-9, defendant Bischoff submitted
false and fraudulent Internal Revenue Service Forms W-3 to secure approval of the

loans.
Case 2:20-cr-20556-PDB-APP ECF No.1, PagelD.6 Filed 11/12/20 Page 6 of 8

16. In the applications for PPP Loan Nos. 1 and 5-9, defendant Bischoff
fraudulently used another person’s personal identifying information to secure

approval of the loans.

All in violation of Title 18, United States Code, Section 1344(2).

FORFEITURE ALLEGATIONS
18 U.S.C. § 982(a)(2)(a) and 18 U.S.C. § 981(a)(1)(c) with 28 U.S.C. § 2461

17. The above allegations contained in this Information are incorporated by
reference as if set forth fully herein for the purpose of alleging forfeiture pursuant to
the provisions of 18 U.S.C. § 982(a)(2)(a) and 18 U.S.C. § 981(a)(1)(c) with 28
U.S.C. § 2461.

18. As a result of violating 18 U.S.C. § 1344, as set forth in this Information,
defendant Bischoff shall forfeit to the United States any property, real or personal,
which represents or is traceable to the gross proceeds obtained, directly or indirectly,
as the result of his violation of 18 U.S.C. § 1344(2).

19. Specifically, defendant Bischoff will be required to forfeit $844,590 to the
United States, which is the total amount of the fraudulently obtained PPP loan money
that was disbursed to him.

20. Substitute Assets: If all or any of the forfeited $593,590

a. cannot be located upon the exercise of due diligence;

b. has been transferred or sold to, or deposited with, a third

party;
Case 2:20-cr-20556-PDB-APP ECF No.1, PagelD.7 Filed 11/12/20 Page 7 of 8

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 that cannot be
subdivided without difficulty;

it is the intent of the United States, pursuant to 21 U.S.C. § 853(p), as incorporated

by 18 U.S.C. § 982(b), to seek forfeiture of any other property of defendant

Bischoff’s up to the value the $844,590 still outstanding.

MATTHEW J. SCHNEIDER
United States Attorney
Eastern District of Michigan

/s/John K. Neal

JOHN K. NEAL

Chief, White Collar Crime Unit
Assistant United States Attorney
Eastern District of Michigan

DEBORAH CONNOR

Chief

Money Laundering and Asset
Recovery Section

United States Department of Justice

/s/ Chad M. Davis
CHAD M. DAVIS
Trial Attorney

DANIEL S. KAHN

Acting Chief

Fraud Section, Criminal Division
United States Department of Justice

/s/ Philip B. Trout
PHILIP B. TROUT
Trial Attorney
Case 2:20-cr-20556-PDB-APP ECF No.1, PagelD.8 Filed 11/12/20 Page 8 of 8

United States District Court Criminal Case Cover Sheet | Case Number

Eastern District of Michigan 20-20556

NOTE: It is the responsibility of the Assistant U.S. Attorney signing this form to complete it accurately in all respects.

Companion Case Information Companion Case Number:
This may be a companion case based upon LCrR 57.10 (b)(4)': Judge Assigned:
LI Yes No AUSA’s Initials:

Case Title: USA v. Michael Bischoff

County where offense occurred : Macomb

Check One: Felony | ]Misdemeanor LlPetty
Indictment/__¥_Information --- no prior complaint.
Indictment/ Information --- based upon prior complaint [Case number: ]
Indictment/ Information --- based upon LCrR 57.10 (d) [Complete Superseding section below].

Superseding Case Information

Superseding to Case No: Judge:

[_|Corrects errors; no additional charges or defendants.
[_|Involves, for plea purposes, different charges or adds counts.
[_]Embraces same subject matter but adds the additional defendants or charges below:

Defendant name Charges Prior Complaint (if applicable)

Please take notice that the below listed Assistant United States Attorney is the attorney of record for
the above captioned case.

November 12, 2020 /s/ John K. Neal
Date John K. Neal

Assistant United States Attorney
211 W. Fort Street, Suite 2001
Detroit, MI 48226-3277
Fax: (313) 226-2873
E-Mail address: John.Neal@usdoj.gov
Attorney Bar #:

1 Companion cases are matters in which it appears that (1) substantially similar evidence will be offered at trial, or (2) the same
or related parties are present, and the cases arise out of the same transaction or occurrence. Cases may be companion cases

even though one of them may have already been terminated.
5/16


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