Criminal Information — Deon Petty (Eastern District of Wisconsin)

Summary

Criminal information filed 10/27/20 in the Eastern District of Wisconsin, Case 2:20-cr-00199-LA, against Deon Petty. Count One is Conspiracy to Defraud the United States. It states that Petty was the sole owner of Rebels Paris LLC, incorporated as a Wisconsin limited liability company as of on or about March 14, 2019. The information alleges that funds were disbursed to individuals who did not work for Rebels and for expenses unrelated to the company's business operations. As an overt act, it alleges that on or about June 9, 2020, Petty falsely represented to representatives of Bank 1 the purpose and intended use of the funds obtained through the Rebels PPP loan. A forfeiture allegation follows.

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

UNITED STATES OF AMERICA,
Plaintiff,
Vv. Case No.
[18 U.S.C. § 371]
DEON PETTY,
Defendant.
CRIMINAL INFORMATION

The United States of America charges that:
Count One
Conspiracy to Defraud the United States
18 U.S.C. § 371
Defendant
1. DEON PETTY (“PETTY”) was a resident of the Eastern District of Wisconsin.
He was the sole owner of Rebels Paris LLC (“Rebels”), which was incorporated as a Wisconsin

limited liability company as of on or about March 14, 2019.

Paycheck Protection Program (“PPP”)
2. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was 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.

Bs One source of relief that the CARES Act provided for was the authorization of up

to $349 billion in forgivable loans to small businesses for payroll, mortgage interest, rent/lease,

Case 2:20-cr-00199-LA Filed 10/27/20 Page1of6 Document 1
and utilities, through a program referred to as the PPP. In April 2020, Congress authorized up to
$310 billion in additional PPP funding.

A. The PPP allowed qualifying small businesses and other organizations to receive
PPP loans. Businesses were required to use PPP loan proceeds on payroll costs, interest on
mortgages, rent, and utilities. The PPP allowed the interest and principal on the PPP loan to be
entirely forgiven if the business spent the loan proceeds on these expense items within a designated
period of time and used a certain percentage of the PPP loan proceeds on payroll expenses.

5. The amount of a PPP loan that a small business could have been entitled to receive
was determined by the number of employees employed by the business and the business’s average
monthly payroll costs.

6. In order to obtain a PPP loan, a qualifying business was required to submit a PPP
loan application, which was 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 make certain affirmative certifications in order to be eligible to obtain the PPP
loan. In the PPP loan application, the small business (through its authorized representative) had
to state, among other things, its: (a) average monthly payroll expenses; and (b) number of
employees. These figures were used to calculate the amount of money the small business was
eligible to receive under the PPP. In addition, businesses applying for a PPP loan had to provide
documentation showing their payroll expenses.

7. The SBA oversaw the PPP. However, individual PPP loans were issued by private,
approved lenders who receive and process PPP applications and supporting documentation, and
then make loans using the lenders’ own funds, which were 100% guaranteed by the SBA. Data

from the application, including information about the borrower, the total amount of the loan, and

Case 2:20-cr-00199-LA Filed 10/27/20 Page 2of6 Document 1
the listed number of employees, was transmitted by the lender to the SBA in the course of
processing the loan.

8. From in or about May 2020 until in or around July 2020, in the Eastern District of
Wisconsin and elsewhere, the defendant,

DEON PETTY,

did willfully and knowingly conspire and agree with Co-Conspirator 1, Co-Conspirator 2, and
others, known and unknown to the United States, to commit offenses against the United States,
that is, to devise and intend to devise a scheme and artifice to defraud the United States and to
obtain money and property belonging to a bank and financial institution by false and fraudulent
pretenses and misrepresentations, for the purpose of executing the scheme, in violation of Title 18,
United States Code, Section 1344(2).

Object of the Conspiracy

9. The object of the conspiracy was for PETTY and his co-conspirators to unjustly
enrich themselves by fraudulently obtaining PPP funds, and to conceal the conspiracy from lending
institutions, law enforcement, and the SBA.

Manner and Means of the Conspiracy

10. The manner and means by which PETTY and his co-conspirators sought to, and
did achieve the purpose of the conspiracy included the following:
a. PETTY provided information about his company, Rebels Paris LLC
(“Rebels”) to his co-conspirators for the purpose of using it to submit a false and fraudulent
PPP loan application.
b. On or around May 8, 2020, PETTY’s co-conspirators took the information

PETTY provided, and then made false statements and certifications on a PPP loan

Case 2:20-cr-00199-LA Filed 10/27/20 Page 3of6 Document 1
application for Rebels, submitted to Bank 1 in order to fraudulently obtain $155,000 of
PPP loan funds.

Cc. After the loan to Rebels was funded with PPP funds, PETTY caused the
funds to be disbursed to individuals who did not work for Rebels, and for expenses
unrelated to the company’s business operations.

Overt Acts

11. In furtherance of the conspiracy and to effect the objects thereof, PETTY and his
co-conspirators, performed or caused the performance of the following overt act, among others not
described herein, in the Eastern District of Wisconsin and elsewhere: on or about June 9, 2020,
PETTY falsely represented to representatives of Bank 1 the purpose and intended use of the funds
obtained through the Rebels PPP loan.

All in violation of Title 18 United States Code, Section 371.

Case 2:20-cr-00199-LA Filed 10/27/20 Page 4of6 Document 1
FORFEITURE ALLEGATION

12. Pursuant to 18 U.S.C. § 981(a)(1)(D) and 28 U.S.C. § 2461(c), upon conviction of
an offense in violation of conspiracy to defraud the United States, in violation of 18 U.S.C. § 371,
as alleged in this Information, the defendant shall forfeit to the United States of America all
property, real and personal, which constitutes and is derived from proceeds traceable to the scheme
to defraud. The property to be forfeited includes, but is not limited to, a money judgment in the
amount of the total loss caused by the defendant’s criminal conduct, as determined by the Court at
sentencing.
13. ‘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 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).

Case 2:20-cr-00199-LA Filed 10/27/20 Page5of6 Document 1
Respectfully submitted,

MATTHEW D. KRUEGER
United States Attorney

DANIEL KAHN

Acting Chief, Fraud Section
Criminal Division

United States Department of Justice

__/s/Laura Connelly
Laura Connelly
Leslie S. Garthwaite

Trial Attorneys, Fraud Section
Criminal Division

United States Department of Justice
1400 New York Avenue, N.W.
Bond Building, Fourth Floor
Washington, D.C. 20530

(202) 307-1423 (Connelly)

(202) 613-6388 (Garthwaite)
Laura.Connelly@usdoj.gov

Case 2:20-cr-00199-LA Filed 10/27/20 Page 6of6 Document 1


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