Criminal Complaint — No. 4:20-mj-00140 (Dkt. 1, N.D. Okla.)

Summary

A criminal complaint and affidavit filed under seal June 2, 2020 as Document 1 in Case 4:20-mj-00140-FHM, U.S. District Court for the Northern District of Oklahoma, charging Benjamin Hayford with wire fraud, bank fraud, false statements to a financial institution and false statements to the Small Business Administration (18 U.S.C. § 1343, 18 U.S.C. § 1344(2), 18 U.S.C. § 1014 and 15 U.S.C. § 645(a)) from April 2020 to May 2020 in Tulsa County. The affidavit of Rodney Connor of the Federal Housing Finance Agency Office of Inspector General alleges that Hayford applied through Global Policy & Strategy Partners LLP, registered in Texas on April 1, 2020, for a PPP loan of $4,472,468.75 on a claimed 244.17 employees and $1,788,987.50 in average monthly payroll. It describes applications to Bank 1, which denied the loan, and Bank 2, with payroll documents and a Form 941.

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Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 1 of 19

AO 91 (Rev. 08/09) Criminal Complaint

UNITED STATES DISTRICT COURT &
for the iM My 0 LH
Northern District of Oklahoma Us" o My ~ Ly
dA
United States of America ) S7gec rn GC,
BENJAMIN HAYFORD FILED UNDER SEAL
)
CRIMINAL COMPLAINT

1, the complainant in this case, state that the following is true to the best of my knowledge and belief.
On or about the date(s) of __on or around April 2020 to May 2020 in the county of Tulsa in the
Northern District of Oklahoma, the defendant(s) violated:

Code Section Offense Description
18 U.S.C. § 1343 Wire Fraud; ,
18 U.S.C. § 1344(2) Bank Fraud;
18 U.S.C. § 1014 False Statements to a Financial Institution; and
16 U.S.C. § 645(a) False Statements to the Small Business Administration

This criminal complaint is based on these facts:
See Attached Affidavit by

@ Continued on the attached sheet.

prem’ 's signature

S$ a ent Rodney Connor
Printed name and title

Judge's signature
City and state: Tulsa, OK U.S, Magistrate Tv yy ©

Printed name and title
Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 2 of 19

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OKLAHOMA

UNITED STATES OF AMERICA
FILED UNDER SEAL
Vv.

)
)
) Criminal No.
BENJAMIN HAYFORD, )
)
)

Defendant.

AFFIDAVIT IN SUPPORT OF CRIMINAL COMPLAINT

I, Rodney Connor, being duly sworn, hereby depose and state as follows:
Introduction
1. Llama Special Agent for the Federal Housing Finance Agency, Office of Inspector
General, where I have been employed since 2012. I am currently assigned to the Dallas Field
Office. My current duties include the investigation of financial crimes including wire and bank
fraud, as well as other white-collar crimes. For approximately eleven years, I served as a Special
Agent for the Internal Revenue Service (“IRS”), Criminal Investigation Division. Throughout the
course of my career, I have conducted an array of investigations involving criminal tax, money
laundering and bank fraud schemes, including abusive tax programs; investment frauds; income,
and employment tax evasion; non-compliance with the Bank Secrecy Act; and many other illegal
schemes impacting individuals, partnerships, corporations and financial institutions. I have
extensive experience conducting search, seizure and arrest warrant operations. I am authorized to
investigate violations of the laws of the United States, and I am a law enforcement officer with the
authority to execute warrants issued under the authority of the United States.
| 2. Recently, I have been assigned to work with the U.S. Department of Justice and

other law enforcement partners to investigate possible fraud associated with the stimulus and
Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 3 of 19

economic assistance programs created by the federal government in response to the COVID-19
pandemic.

3. This affidavit is made in support of a criminal complaint charging Benjamin
Hayford with 18 U.S.C. § 1343 (Wire Fraud), 18 U.S.C. § 1344(2) (Bank Fraud), 18 U.S.C. § 1014
(False Statements to a Financial Institution), and 15 U.S.C. § 645(a) (False Statements to the Small
Business Administration), committed by Benjamin Hayford.

4. This affidavit is based on my personal investigation and investigation by others,
including federal and local law enforcement officials whom I know to be reliable and trustworthy.
The facts contained herein have been obtained by interviewing witnesses and examining
documents obtained in the course of the investigation as well as through other means. This
affidavit does not include every fact known to me about this investigation, but rather only those
facts sufficient to establish probable cause.

5. This affidavit does not include each and every fact known to the government, but
only those facts necessary to support a finding of probable cause to support the requested arrest
warrant.

Probable Cause
The Paycheck Protection Program

6. | 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
Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 4 of 19

a program referred to as the Paycheck Protection Program (“PPP”). In or around April 2020,
Congress authorized over $300 billion in additional PPP funding.

7. 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 loan application
is called an SBA Form 2483. 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. In the PPP loan application, the small
business (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 and that they
were in business as of February 15, 2020.

8. A PPP loan application must be processed by a participating financial institution (the
lender). If a PPP loan application is approved, the participating financial institution funds the PPP
loan using its own monies, which are 100% guaranteed by the 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.

9. 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 (usually eight weeks of receiving the proceeds) and uses

at least 75% of the PPP loan proceeds on payroll expenses.
Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 5 of 19

Benjamin Hayford and Global Policy & Strategy Partners LLP

10. Benjamin Hayford is a resident of Centerton, Arkansas who, since in or about May
2019, has been employed full time by a large retailer as a Senior Project Manager.

11. Global Policy & Strategy Partners, LLP (“GPS Partners”) is a general partnership
that was registered with the Secretary of State for the State of Texas on or about April 1, 2020.
The State of Texas registration document for GPS Partners listed Hayford as the signer and the
partner with a majority interest. This document identifies an apartment in Bryan, Texas (the
“Bryan, Texas Address”) as being the partnership’s principal office in the State of Texas.
According to databases used by law enforcement, the Bryan, Texas Address is a residential
building that is occupied by LC, who is believed to be a cousin of Hayford. Agents performed
surveillance on the Bryan, Texas Address and took the photograph marked as Attachment A. The
Bryan, Texas Address appeared to the surveilling agents to be a private residence, not a
commercial office space. According to an Internal Revenue Service (“IRS”) Form SS-4 / Notice
CP 575 B that I reviewed, GPS Partners was assigned an Employee Identification Number (“EIN”)
on or about March 30, 2020. An EIN is a unique identification number that the IRS assigns to
businesses for tax reporting purposes.
Benjamin Hayford’s Application to Bank 1

12. Bank 1 is a federally-insured financial institution and a member of the Federal Home
Loan Bank System based in Fayetteville, Arkansas. As set forth below, based on a search of the
contents of a Gmail account registered to Hayford (the “Hayford Gmail Account”), which I

reviewed pursuant to a warrant issued by a United States Magistrate Judge in the District of
Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 6 of 19

Columbia, I know that Hayford, on behalf of GPS Partners, applied to Bank 1 for a PPP loan and
that he had email correspondence with representatives of Bank | about that loan.'

13. On or about March 31, 2020, Hayford exchanged email correspondence with a
representative of Bank 1 in which he asked for, and received, information about the requirements
of the PPP. In an email sent on or about April 1, 2020, Hayford advised a representative of Bank
1 that he intended to apply for a PPP loan for GPS Partners. In this email, Hayford represented
that his business operated as a sole proprietorship from May 2018 to December 2019 and that
“Tojur business structure change[d] and became a new entity effective 1 January 2020 (partnership
agreement signed 25 December 2019).”

14. On or about April 3, 2020, Hayford, on behalf of GPS Partners, sent to Bank 1 via
email an application for a PPP loan together with what purported to be supporting payroll
documentation. In the body of the email, Hayford explained that the payroll documentation that
he was providing identified employees by an internal employee number — not by name — because
he was uncomfortable providing “private data” over email. Hayford also wrote: “We currently
employ 247 people, with 244.17 FTE [full time equivalent]. . . Since our employees are 1099-
MISC, we do not withhold Federal income tax and they are responsible for paying this, as well as
their own health insurance, et cetera. The other partners and I are prioritizing our employees during
this time and currently not receiving any income (e.g., have waived our Q1 partner guaranteed

payment).”? Hayford attached numerous documents to this email including:

| All email correspondence from or to Hayford referenced herein occurred on the Hayford Gmail
Account.

2 The term “1099 employee” is derived from the IRS Form 1099-MISC, which taxpayers use to

declare payments made to independent contractors. The term “W-2 employee” is derived from
the IRS Form W-2 which taxpayers use to declare payments made to employees.

5
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a. First, an SBA Form 2483 which represented that GPS Partners had 244.17
employees and an average monthly payroll of $1,788,987.50. This application sought a loan in
the amount of $4,472,468.75 (2.5 times average monthly payroll). The application identified the
Bryan, Texas Address as GPS partners’ primary address and the Hayford Gmail Account as the
contact email address.

b. Second, a PDF file purporting to show GPS Partners’ payroll for January and
February 2020. The file identified employees only by an internal employee number — not by their
names — and represented that the partnership paid $1,904,325 and $1,673,650 in wages in January
2020 and February 2020, respectively. This documentation reported that payments were made to
247 of 250 employees (Employee identification numbers 100000 through 100249).

c. Third, a letter dated January 31, 2020, signed by Hayford, representing that: “a total
of $1,904,325 was distributed in cash payments to 247 1099-MISC contract employees for 44,370
hours.”

d. Fourth, a letter dated February 28, 2020, signed by Hayford, representing that: “a
total of $1,673,650 was distributed in cash payments to 247 1099-MISC contract employees for
39,050 hours.”

e. Fifth, a Form 941, Employer’s Quarterly Federal Tax Return’, reporting that for the
period January, February and March 2020, GPS Partners had 247 employees that received wages,
tips or other compensation in the amount of $3,577,975, and that no federal income tax was
withheld or social security or Medicare taxes were owed by GPS Partners. The Form 941 was

unsigned but listed Hayford as the “Founding Partner.”

3 A Form 941 is used by employers to report federal income, social security, and Medicare taxes withheld from
employee’s paychecks and to pay the employer's portion of social security or Medicare tax.
Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 8 of 19

15. Onor about April 3, 2020, Bank 1 sent Hayford an email notifying him that his PPP
loan had been denied because his company was not located within the bank’s service area. After
Hayford emailed a representative of Bank 1 asking for more information about the denial of his
loan, a representative of Bank 1 wrote Hayford an email which apprised him of the following: “T
would also like to remind you that currently the SBA has opened this up for small businesses with
W2 employees and sole proprietorships. . . If you are paying someone by 1099 you will NOT
include them as they are considered an independent contractor. They can apply for themselves
starting on the 10th.”

16. Onor about April 10, 2020, Hayford sent an email to a representative of Bank 1 in
which he opined that the SBA’s decision to exclude from the calculation of eligible payroll costs
payments made to 1099-MISC employees was inconsistent with the spirit of the CARES Act and
asserted: “this means I will be having a call tomorrow with 247 workers to let them know we are
not able to submit on their behalf and pay their payroll for 8 more weeks, and they will have to go-
it-alone using net income calculations. That’s 247 families we fought to help access this Paycheck
Protection Program lifeline.”

Hayford’s Application to Bank 2

17. Bank 2 is a federally-insured financial institution and a member of the Federal Home
Loan Bank System headquartered in Tulsa, Oklahoma. On or about April 9, 2020, Bank 2 received
an application (and underlying payroll documentation) for a PPP loan on behalf of GPS Partners,
which Bank 2 provided to investigators. Bank 2’s file for the GPS Partners PPP loan contained
the following:

a. An SBA Form 2483 signed by Hayford and dated April 3, 2020, which represented

that GPS Partners had 244.17 employees with an average monthly payroll of
Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 9 of 19

$1,788,987.50. Accordingly, the application sought a loan in the amount of
$4,472,468.75. The application identified the Bryan, Texas Apartment as GPS
partners’ address and listed the phone number XXX-XXX-7348 as the telephone
point of contact.*
b. A copy of Hayford’s State of Texas driver’s license.
c. A PDF file purporting to show payroll documentation that is materially the same
as the document that Hayford sent to Bank 1, as described in paragraph 14b above.
d. Documentation from the IRS establishing that GPS Partners received its EIN on
March 30, 2020 as well as documentation from the State of Texas establishing that
GPS Partners was registered on April 1, 2020.
e. A document purporting to be the “Partnership Agreement” that formed GPS
Partners. This agreement represents that the partnership was formed on January 1,
2020 between Benjamin James Hayford, whose address is listed as the Bryan,
Texas Address; LC, whose address is listed as the Bryan, Texas Address; and the
Hayford Family Trust, the address of which is listed as a residence on Wyoming
Street in Vancouver, Washington. The signature block identifies Benjamin James
Hayford as the trustee of the Hayford Family Trust.
18. According to RB, a representative of Bank 2, Hayford’s PPP loan was approved on
or about April 11, 2020, but was not funded immediately. RB advised investigators that, on or

about April 17, 2020, he reviewed the payroll documentation submitted with Hayford’s application

4 According to records provided by cellular carrier T-Mobile, the subscriber of this account is an
individual with the last name of Hayford, who appears to be Benjamin Hayford’s father. The
subscriber address is the same Vancouver, Washington residence identified in the partnership
agreement described in paragraph 17e below.
Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 10 of 19

and concluded that it “looked strange.” RB explained that, in his experience, business loan
applicants typically provide payroll documentation that includes employee names and Federal
Insurance Contributions Act (“FICA”) withholdings. The payroll documentation that was
submitted, on the other hand, did not include this information. RB also relayed that he became
concerned after he reviewed an article that Hayford posted on LinkedIn, a professional social
networking website, which criticized the SBA’s administration of the PPP program. Investigators
have preserved an image of the article. The author is identified as Benjamin J. Hayford and the
profile picture of the LinkedIn poster appears to be the same person whose picture appears in the
Benjamin Hayford driver’s license that Bank 2 maintains in its loan file for the GPS PPP loan.
The “about the author” section of the LinkedIn article describes Hayford as a “senior advisor and
founding partner” of GPS Partners as well as his position with the retailer described above.

19. On or about April 20, 2020, RB and another representative of Bank 2 placed a call
to Hayford at the 7348 telephone number and recorded the conversation. RB placed the call from
a Bank 2 office in Tulsa, Oklahoma. I listened to a recording of the conversation, during which
Hayford communicated the following, in sum and substance:

a. GPS originally operated as a sole proprietorship but in December 2019 re-organized
into a partnership, which became effective on January 1, 2020.

b. GPS Partners’ clients realized between several hundred million dollars and up to a
billion dollars in revenue per year.

c. GPS partners has 247 ““W-2 employees.”

d. The agreement establishing GPS Partners “was signed effective the first of

January.” Hayford relayed that, although GPS Partners was formed on January 1,
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2020, it was not formally registered with the State of Texas until April of 2020 due
to unspecified “difficulties” with the Secretary of State for the State of Texas.
e. When asked to explain how GPS Partners paid wages to ““W-2 employees” before
receiving an EIN, Hayford explained that GPS Partners paid employees in cash, did
not use banks, and did not use a payroll processor. Hayford also asserted that GPS
Partners’ clients paid the partnership in cash to “protect confidentiality.”
f. Most of GPS Partners’ employees reside in Texas and the partnership paid them by
providing envelopes of cash.
20. On or about April 20, 2020, Hayford sent an email to Bank 2 and attached an
~ unsigned Form 941, Employer’s Quarterly Federal Tax Return. Similar to the Form 941 that
Hayford submitted to Bank 1, the Form 941 submitted to Bank 2 reported that for the period of
January, February, and March 2020, GPS Partners had 247 employees that received wages, tips or
other compensation in the amount of $3,577,975. However, unlike the Form 941 submitted to
Bank 1 that reflected no federal income taxes had been withheld or social security or Medicare
taxes were owed, it was reported to Bank 2 that $441,473.53 was due for the combined payroll
related taxes. The form submitted to Bank 2 was unsigned but listed Hayford as the “Sr Advisor
& Founding Partner.” As noted previously in paragraphs 14 and 15, after Hayford had told Bank
1 that GPS Partners did not withhold federal income taxes for the 247 employees because they
were 1099 contract employees responsible for paying their taxes, Bank 1 informed him that the
SBA program is for small businesses with W2 employees and that 1099 contractors should not be
included. Because of this communication, your affiant believes that Hayford then reported to Bank
2 that $441,473.53 of payroll related taxes were due in an attempt to make it appear that GPS

Partners was paying W-2 employees rather than 1099 contract employees.

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21. Onor about April 21, 2020, RB sent Hayford an email notifying him that Bank 2 had
decided not to fund the loan. Hayford responded with an email stating: “if I understand correctly,
although our partnership agreement was effective 1/1/2020 and although we meet every PPP
eligibility factor, we were accepted by the SBA on 11 April, now, despite partnering with [Bank
2] since 9 April to provide every requested documentation, because we had delayed filing
confirmation back from the TX Secretary of State and received a Federal EIN at the end of Q1
[first quarter of 2020], and because we do not use a third-party payroll provider, you are declining
to fund our SBA approved loan?” RB responded: “[w]e are not declining to fund the loan because
you do not use a third-party payroll provider — we are declining to fund the loan because you are
unable to provide any documents validating your payroll expense. Your documentation appears
to be an excel file completely devoid of typical W-2 information, such as calculations for federal
income tax withholdings or payroll-related taxes, such as FICA...Per our conversation yesterday,
you operate entirely out of cash and cannot provide any bank statements at all. The only additional
form you provided is the 941, which has not been submitted to the IRS.”

22. Inan email sent on or about April 21, 2020 at 4:44 p.m.° Hayford wrote to RB: “I do
not recall you asking for further payroll information yesterday. We only provided you the first
three tabs of the attached in PDF form; here’s the full Q1 [first quarter 2020] payroll file.
Additionally, we also send an internal comm[unication] when payroll is disbursed; scanned copies
of those letters for Jan and Feb are attached as well.” Hayford attached three documents to the
email.

a. A letter signed by Hayford and purportedly dated January 31, 2020. The letter

represented: “January payroll has been disbursed in full to all employees as of

5 Times are listed in Eastern Daylight Time (EDT)

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yesterday, Thursday, 30 January close of business. A total of $1,904,325.00 was
distributed in cash payments to 247 1099-MISC contract employees for 44,370
hours.” This letter is identical to the one that Hayford provided to Bank 1, as
described in paragraph 14c above.

b. A letter signed by Hayford and purportedly dated February 28, 2020. The letter
represented: “February payroll has been disbursed in full to all employees as of
yesterday, Thursday, 27 February close of business. A total of $1,637,650.00 was
distributed in cash payments to 247 1099-MISC contract employees for 39,050
hours.” This letter is identical to the one that Hayford provided to Bank 1, as
described in paragraph 14d above.

c. An Excel file entitled “GPS Partners 2020 Payroll JanFeb2020.xIsx.”

23. Although Hayford represented to Bank 1 that the employees for GPS Partners are
1099 contract employees who are responsible for paying all their taxes, the Excel file submitted to
Bank 2, labeled “GPS Partners 2020 Payroll JanFeb2020.xlsx,” purports to show GPS Partners’
payroll expenditures and taxes withheld for their employees for January and February 2020. The
file contains additional tabs labeled “January 2020 incl tax withhold” and “February 2020 incl tax
withhold.” The tabs contain fields identifying employee number (but not employee name) and
wages paid, as well as deductions for expenditures such as health savings account, and retirement
contributions. In addition, these two tabs contain a field identifying the purported employees’ net
(or “take home”) pay. In my training and experience, the disbursements and deductions reflected

in this document do not resemble the operations of a legitimate business. For example, the tab

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Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 14 of 19

purporting to summarize the February 2020 payroll contains over one hundred entries® for

employees who received the following identical disbursements and deductions:

Hours | Wages | HSA Retirement | Social Medicare | Net (Take-

Worked | Paid Election (401k) Security Withheld | Home)
Withheld

160 $7,200 | ($1,775.00) | ($4,875.00) | ($336.35) | ($75.95) $137.70

The notion that employees earning wages of $7,200 per month would, after deductions, “take
home” only $137.70 per month is, in my experience, highly implausible. In my experience
reviewing tax returns and return information, it is unusual to encounter a business in which dozens
of employees contributed over half of their wages to a retirement plan while subsisting on less than
$200 per month. Moreover, the tab purporting to summarize the February 2020 payroll shows
total withholdings of $1,112,010 for 401(k) contributions. I know from listening to a recording of
Hayford’s April 20, 2020 telephone call with Bank 2 that Hayford claimed to handle payroll in
cash; in my training and experience, I find it unusual that a legitimate 401(k) investment manager
would accept and manage over $1 million in cash contributions. Notwithstanding that it purports
to track payroll from January and February of 2020, an examination of the metadata associated
with this Excel file reveals that it was created on March 30, 2020.

24. On April 21, 2020 at 5:05 p.m. — 21 minutes after sending RB the documents
described in the preceding two paragraphs — Hayford sent RB an email with the same text as the
one that he sent at 4:44 p.m. and to which was attached identically-named attachments. However,
one word was altered in the purported payroll disbursement letters for January and February of

2020: Hayford substituted the phrase ““W-2” for “1099-MISC.” Accordingly, the revised January

6 The chart below is a non-exhaustive sample of the information contained in the Excel file.

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2020 payroll letter that Hayford sent at 5:05 p.m. read: “January payroll has been disbursed in full
to all employees as of yesterday, Thursday, 30 January close of business. A total of $1,904,325.00
was distributed in cash payments to 247 W-2 employees for 44,370 hours.” (Emphasis added).
Similarly, the February 2020 payroll letter represented: “[a] total of $1,673,650.00 was distributed
in cash payments to 247 W-2 employees for 39,050 hours.” (Emphasis added). Hayford’s email
at 5:05 noted “here are the corrected docs,” but it did not specifically call RB’s attention to the
alteration from “1099-MISC” to “W-2” employees.

25. Thenext day (April 22, 2020), RB sent Hayford an email addressing the discrepancy:
“(t]he first set of letters note that your cash payments were made to 247 1099-MISC contract
employees. Per the SBA’s guidance, 1099 contractors need to apply for their own PPP loans, and
GPS Partners cannot use those individuals in their payroll calculation. In your phone conversation
on Monday, you represented to [Bank 2] that all of the employees on the payroll report were W-2
employees.” That day, Hayford responded: “the first set of letters were a clerical error by my
assistant. We have instructed our 1099-MISX [sic] to apply on their own and the 247 are W-2
employees. My apologies for any inconvenience.”

26. Hayward’s assertion to Bank 2 that GPS Partners has 247 ““W-2 employees” is
completely inconsistent with the April 3, 2020 email that he sent to Bank 1 (recounted in paragraph
14, above), in which he asserted that GPS Partners “currently employ[s] 247 people” and that
“since our employees are 1099-MISC, we do not withhold Federal income tax . . . .” (Emphasis

added).

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Review of Texas Workforce Commission Documentation

27. Employers in the State of Texas are required to register with the Texas Workforce
Commission and report to that agency the payment of unemployment insurance taxes on
employees’ wages.

28. In or about May of 2020, a representative of the Texas Workforce Commission
performed a wage detail inquiry which determined that neither Global Policy & Strategy Partners,
LLC; the Benjamin J. Hayford Family Trust; nor Benjamin James Hayford were registered with
the Texas Workforce Commission. Accordingly, the Texas Workforce Commission has no record
that Hayford or the other two entities paid wages to any employees.

29. Investigators discovered in the Hayford Gmail Account an email that Hayford sent
to the Texas Workforce Commission on or about March 31, 2020, which stated: “I am hoping to
determine the appropriate unemployment tax rate I should pay this year for my small business. I
understand I should pay at least 2.7% on every first $9,000 paid to every employee. .. Can you
help me understand if I should be allocating a higher portion than 2.7%?” Notably, this email to
the Texas Workforce Commission came after the dates on which Hayford claimed to have made
payroll disbursements to the partnership’s employees.

Review of Hayford’s Personal Income Tax Return

30. Investigators discovered in Hayford’s email account his 2019 federal tax return
together with a receipt from Intuit TurboTax memorializing that the returns were submitted to the
IRS.

31. Hayford’s tax return included an IRS Form 1040 Schedule C, which reported $2,500
in gross income generated from a business identified as Global Policy & Strategy Partners. In

response to the question, “[d]id you make any payments in 2019 that would require you to file

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Form(s) 1099?” Hayford answered “no.” Hayford reported total business expenses of $24,925 in
connection with this business. This sum is comprised of expenses for advertising ($224); vehicle
expenses ($9,994); insurance ($386); legal and professional services ($980); office expenses
($584); office expenses ($584); supplies ($73); taxes and licenses ($26); travel ($7,110); meals
($2,476); utilities ($2,744); and other expenses ($328). Notably, the Schedule C does not list any
expenses associated with wages.

32. Based on my training and experience, it is difficult to understand how a business with
the expenses described in Hayford’s Schedule C could expand over the course of a single month
(January 2020) to a partnership that paid $1,904,325 in monthly wages to 247 employees.

Email Correspondence Regarding the Formation of GPS Partners

33. Although Hayford represented to Bank 1 and Bank 2 that GPS Partners LLP was
established on January 1, 2020 and provided Bank 2 with a partnership agreement purporting to
show that the business association was formed on that date, I reviewed correspondence from
Hayford’s email account indicating that the parties did not execute a partnership agreement until
April 2020. This fact is significant not only because it tends to show that GPS Partners was created
to take advantage of the PPP but also because Hayford initialed a certification appearing on the
SBA Form 2483 submitted to Bank 2 which attested that: “the Applicant was in operation on
February 15, 2020 and had employees for whom it paid salaries and payroll taxes or paid
independent contractors, as reported on Form(s) 1099-MISC.”

a. On or about April 10, 2020, Hayford sent LC an email to which was attached an
unsigned copy of a partnership agreement for GPS Partners. In the body of the email, Hayford
wrote: “any changes you see we need for this? If not, will you please sign, scan, and return to me

at your earliest convenience?” The attached agreement, which purports to be “made as of this 01

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Case 4:20-mj-00140-FHM Document 1 Filed in USDC ND/OK on 06/02/20 Page 18 of 19

day of January, 2020,” is identical to the agreement that Hayford provided to Bank 2 and which
Bank 2 maintained in its loan file.
b. On or about April 17, 2020, LC sent Hayford an email to which was attached an
image of his signature.
Conclusion

34. Based on my training and experience, and the information provided in this affidavit,
I respectfully submit that there is probable cause to believe that beginning on a date unknown, but
from at least in or around April 2020 to May 2020, within the Northern District of Oklahoma and
elsewhere, Benjamin James Hayford committed violations of 18 U.S.C. § 1343 (Wire Fraud), 18
U.S.C. § 1344(2) (Bank Fraud), 18 U.S.C. § 1014 (False Statements to a F inancial Institution), and
15 U.S.C. § 645(a) (False Statements to the Small Business Administration).

I declare under penalty of perjury that the statements above are true and correct to the best

of my knowledge and belief.

Federal Housing Finance Agency
Office of Inspector General

SWORN And Attested to by relePloye C- 2-20

The Honorable Frank McC
United States Magistrate

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Case 4:20-mj-00140-FHM Document 1 Filed in


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