Donald Finley — Notice of Motion
Summary
A notice of motion by the United States Attorney for the Eastern District of New York, signed by Assistant United States Attorney Mark E. Misorek for United States Attorney Breon Peace, seeking leave to file an information on Donald Finley's waiver of indictment under Rule 7(b) of the Federal Rules of Criminal Procedure, followed by the Information. The Information sets out the COVID-19 emergency, the Paycheck Protection Program, with up to $349 billion in forgivable loans under the CARES Act, and the Economic Injury Disaster Loan program. It alleges that Finley submitted, or caused to be submitted, at least 29 online loan applications for PPP and EIDL funds for the Subject Entities, some containing materially false information.
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Full text
REgEIVED
IN CLE;IKS CFFICE
u.S. DiSTFrcr- ^,'-irE DNY
MEM:dmc
F. #2021R00393 * ApR 24 2023
*
UNITED STATES DISTRICT COURT LONG ISLAND OFFICE
EASTERN DISTRICT OF NEW YORK
x
LTNITED STATES OF AMERICA
- against -
NOTICE OF MOTION
Criminal oo.n., No.
e R (
2q t 8l
DONALD FINLEY,
AZRACK, J,
Defendant.
x LINDSAY,M.J.
PLEASE TAKE NOTICE that the undersigned will move this Court, before a
judge to be assigned, for leave to file an information upon the defendant DONALD FINLEY's
waiver of indictment pursuant to Rule 7(b) ofthe Federal Rules of Criminal Procedure.
Dated: Central Islip, New York
Apil24,2023
BREON PEACE
United States Attomey
Eastem District of New York
Attorney for Plaintiff
610 Federal Plaza
Central Islip, New York I 1722
By: /s/ Mark E. Misorek
Mark E. Misorek
Assistant United States Attomey
(63r) 7 t5-7874
Cc Clerk ofthe Court
Christopher Ferguson
RECEIVED
IN CLF,?:<'' OFFICE
u,s. DlsTRr: : DN.Y
CCC:MEM * ApR 24 ?0?t *
F. #2021R00393
LONG ISLAND OFFICE
LINITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
X
IN
TINITED STATES OF AMERICA
- against - Cr. NoCI
3 181
(T. 18, U.s.c., $$ l0a0(a)(2),
DONALD FINLEY, 1040(bXl), 1343, e81(a)(l)(C) and
3551 et seo.; T. 21, U.S.C., $ 853(p);
Defendant and T. 28, U.S.C., $ 2461(c))
x
AZRACK, J.
THE UNITED STATES ATTORNEY CHARGES:
I.INDSAY, M.J.
INTRODUCTION
At all times relevant to this Information, unless otherwise indicated
The COVID-I9 ic in the United States
I - In or about December 2019, a novel coronavirus, SARS-CoV-2 (the
"coronavirus"), caused outbreaks ofthe coronavirus disease COVID-19 that have since spread
globally. On or about January 31,2020,the Secretary of Health and Human Services
declared a national public health emergency under 42 U.S-C. $ 247 d as a result ofthe spread
of COVID-19 to and within the United States. On or about March 11,2020, the Director-
General of the World Health Organization characterized COVID-I9 as a pandemic. On or
about March 13,2020, the President of the United States issued Proclamation 9994 declaring
a national emergency beginning on March l, 2020, as a result ofthe rapid spread ofCOVID-
19 within the United States.
2
The Pavcheck Protection Prosram
2. On or about March 27 ,2020, the President signed into law the
Coronavirus Aid, Relief, and Economic Securiry ("CARES") Act. The CARES Act was a
federal law designed to provide emergency financial assistance to the millions of Americans
who were suffering the economic effects caused by the COVID-l9 pandemic. One source of
relief provided by the CARES Act was the audrorization 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 April2020, Congress
authorized over $300 billion in additional PPPfunding.
3. To obtain a PPP loan, qualifuing businesses were required to submit
a PPP loan application, which was sigred by an authorized representative of the business.
The PPP loan application required recipient businesses, through an audrorized representative,
to acknowledge the program rules and make certain affirmative certifications to establish
eligibility for the PPP loan. For example, in the PPP loan application, recipient businesses,
ttrrough an authorized representative, were required to state, among other things, their
average monthly payroll expenses and number of employees. These figures were used to
calculate the amount of money the businesses were eligible to receive under the PPP. The
recipient businesses were also required to provide documentation supporting the information
contained in the PPP loan application.
4. PPP loan proceeds were required to be used by the recipient
businesses on certain permissible expenses, to wit: payroll costs, interest on mortgages, rent
and utilities. The PPP allowed the interest and principal on a PPP loan to be entirely forgiven
ifthe recipient businesses spent the loan proceeds on these expense items within a designated
3
period of time after receiving the proceeds and used a certain percentage for papoll costs.
5. The PPP was overseen by the Small Business Administration
('SBA), which had authority over all PPP loans. Individual PPP loans, however, were
issued and approved by private lenders, who received and processed PPP loan applications
and supporting documentation and, following SBA approval, made loans using the lenders'
own funds.
The Economic Injurv Disaster Loan Proeram
6. The Economic Injury Disaster Loan ("EIDL") program was also
overseen by the SBA and was designed to provide long+erm, low-interest loans for small
businesses affected by various natural and economic disasters. The CARES Act provided
funding for EIDL loans for businesses affected by the COVID-19 pandanic. Incontrast to
the PPP, EIDL loan amounts were determined based on the recipient businesses' historical
revenue and disbursed directly by the SBA.
The Defendant and His Fraud Scheme
7. The defendant DONALD FINLEY was a resident of Locust Valley,
New York. FINLEY operated several restaurants and theme parks located on Long Island
and in New York City through various corporate entities (the "Subject Entities"). Certain of
the Subject Entities were used to commit the fraud described herein.
8. Between March 30, 2020 ardMarch24,202l, both dates being
approximate and inclusive, the defendant DONALD FINLEY engaged in a schemeto
defraud the SBA and several financial institutions administering the PPP and EIDL programs
of federal COVID- 19 emergency-relief funds meant for disressed small businesses by
obtaining more funds than he and/or the Subject Entities were entitled to receive under these
4
programs. It was a part of the scheme to defraud that FINLEY submitted, or caused to be
submitted, at least 29 online loan applications to obtain funds through the PPP and EIDL
programs for the Subject Entities. It was further a part ofthe scheme to defraud that one or
more ofthese loan applications and certain supporting documentation contained materially
false and fiaudulent information, including, but not limited to, the Subject Entities'number
of employees, payroll costs and intended use ofcertain ofthe loan proceeds, all of which was
specifically designed to mislead the SBA and financial institutions administering the PPP and
EIDL programs into disbursing various loans, which theydid.
9. In total, between March 30, 2020 and March 24,2021 , both dates
being approximate and inclusive, as a result of this fraudulent scheme, the SBA and financial
institutions administering the PPP and EIDL programs wire-transferred sums totaling
approximately S3.2 million in PPP and EIDL loans for the Subject Entities to bank accounts
that the defendant DONALD FINLEY established at bank branches in the Eastern District of
New York and elsewhere.
10. FINLEY utilized certain of the loan proceeds to enrich himself,
including to purchase personal assets and pay personal expenses. For example, on or about
February 5, 2021, FINLEY used a portion ofloan proceeds to purchase real property located
in Nantucket, Massachusetts.
COIJNT ONE
(Disaster Relief Fraud)
I l. The allegations contained in paragraphs one through ten are realleged
and incorporated as if fully set forth in this paragraph.
5
12. In or about and between March 2020 and December 2020, both
dates being approximate and inclusive, within the Eastem District of New York and
elsewhere, the defendant DONALD FINLEY did knowingly and intentionally make one or
more materially false, fictitious, and fraudulent statements and representations, and make and
use one or more false writings and documents knowing the same to contain materially false,
fictitious, and fraudulent statements and representations, in connection with a procurement of
property and services related to an emergency declaration under Section 501 ofthe Stafford
Act, to wit: Proclamation 9994 of March 13,2020by the President of the United States of
America Declaring a National Emergency Concerning a Novel Coronavirus Disease
(COVID- l9) Outbreak, which benefits were authorized, transported, transmitted, ransfene{
disbursed and paid in and affecting interstateand foreigr commerce.
(Title 18, United States Code, Sections l0a0(a)(2), 1040(bxl) and 3551 et
scs.)
COTJNT TWO
(Wire Fraud)
13. The allegations contained in paragraphs one through ten are realleged
and incorporated as if fully set forth in this paragraph.
14. In or about and between April 2020 and March 2O21, both dates
being approximate and inclusive, within the Eastern District of New York and elsewhere, the
defendant DONALD FINLEY did knowingly and intentionally devise a scheme and artifice
to defraud the SBA and one or more financial instirutions administering the PPP and EIDL
programs, and to obtain money and property fiom the SBA and said financial institutions by
means of materially false and fraudulent pretenses, representations and promises, and for the
purpose of executing such scheme and artifice did transmit and cause to be transmitted, by
6
means of wire communication in interstate and foreign commerce, one or more writings,
signs, signals, pictures and sounds, to wit: fraudulent online applications for one or more PPP
and EIDL loans for the Subject Entities.
(Title 18, United States Code, Sections 1343 and 3551 et Sgq.)
CRIMINAL FORFEITURE
ALLEGATION AS TO COI.JNT TWO
15. The United States hereby gives notice to the defendant that, upon
his conviction of the offense charged in Count Two, the government will seek forfeiture in
accordance with Title 18, United Sates Code, Section 981(a)(lXC) and Title 28, United
States Code, Section 2461(c), which require any person convicted ofsuch offense to forfeit
any property, real or personal, constituting, or derived from, proceeds obtained directly or
indirectly as a result of such offense.
16. If any ofthe above-described forfeiable property, as a result ofany
act or omission of the defendant:
(a) cannot be located upon the exercise ofdue diligance;
O) has been transfened or sold to, or deposited with, a third
party;
(c) has been placed beyond the jurisdiction of thecourt;
(d) has been substantially diminished in value; or
(e) has been commingled with other property which cannot be
divided without diffi culty;
7
it is the intent of the United States, pursuant to Title 21, United States Code, Section 853(p),
to seek forfeiture ofany other property ofthe defendant up to the value of the forfeitable
property described in this forfeiture allegation.
(Title 18, United States Code, Section 981(a)(1)(C); Title 21, United States
Code, Section 853(p); Title 28, United States Code, Section 246l@))
A/. C4,7 P"/"2 4.arh,i 4. S.
"**2-
BREON PEACE
UNITED STATES ATTORNEY
EASTERN DISTRICT OF NEW YORK
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