Information — United States v. Mandy Ellen Bauer (Dkt. 1)

Summary

An Information, Document 1 filed 01/18/22 in United States of America v. Mandy Ellen Bauer, Case 1:22-cr-00004-GNS, in the U.S. District Court for the Western District of Kentucky at Bowling Green. Counts 1-9 charge wire fraud under 18 U.S.C. § 1343 between April 2, 2020 and July 1, 2020 in Green County, Kentucky. It alleges that Bauer filed EIDL applications and submitted SBA Form 2483 PPP applications to ReadyCap Lending falsely claiming six employees and monthly payroll figures for a business referred to as FPS. It alleges that on May 29, 2020 and July 1, 2020 she faxed IRS Form 7200 advance payment requests of $70,000 and $43,064.55, when FPS did not have any employees or wage expenses. A chart lists the interstate wire for each count, and the filing includes sentencing notices.

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Case 1:22-cr-00004-GNS Document 1 Filed 01/18/22 Page 1 of 8 PageID #: 1

FILED
JAMES J . VILT, JR. - CLERK

UNITED STATES DISTRICT COURT JAN 18 2022
WESTERN DISTRICT OF KENTUCKY
U.S. DISTRICT COURT
AT BOWLING GREEN
WEST'N. DIST. KENTUCKY
UNITED STATES OF AMERICA

INFORMATION
V.
NO. 1 ~ ~'J. a- I.\- 6 t.J r
18 u.s.c. § 1343
MANDY ELLEN BAUER

The United States Attorney Charges:

COUNTS 1-9
(Wire Fraud)

On or about and between April 2, 2020, and July 1, 2020, in the Western District of

Kentucky, Green County, Kentucky, the defendant, MANDY ELLEN BAUER, devised a scheme

to defraud and to obtain money by means of false and fraudulent pretenses and representations,

and transmitted writings and signs in interstate wire communications for the purpose of executing

the scheme, to wit:

1. The Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Families

First Coronavirus Response Act (FFCRA) established that eligible employers that retain

their employees are allowed tax credits against applicable employment taxes. Employers

are required to file employment tax returns, e.g. quarterly Form 941 , Employer 's

Quarterly Federal Tax Return, for the business to report employment taxes; and

required to file annual Form W-2, Wage and Tax Statement, for each employee to report

paid wages.
Case 1:22-cr-00004-GNS Document 1 Filed 01/18/22 Page 2 of 8 PageID #: 2

2. The Internal Revenue Service (IRS) created the Form 7200, Advance of Employer

Credits Due To COVID-19, to allow employer businesses to request an advance

payment of the tax credits prior to the filing of their Form 94 1. The IRS is

headquartered in Washington, DC, and maintains its computer servers outside of the

state of Kentucky.

3. The United States Small Business Administration (SBA) is an executive-branch agency

of the United States government that provides support to entrepreneurs and small

businesses. The SBA is headquartered in Washington, DC, and maintains its computer

servers outside Kentucky. The mission of the SBA is to maintain and strengthen the

nation' s economy by enabling the establishment and viability of small businesses and

by assisting in the economic recovery of communities after disasters.

4. As part of this effort, the SBA enables and provides for loans through banks, credit

unions and other lenders. These loans have government-backed guarantees. In addition

to traditional SBA funding programs, the CARES Act, which was signed into law in

March 2020, established several new temporary programs and provided for the

expansion of others to address the COVID-19 outbreak.

5. One of the new programs was the SBA Paycheck Protection Program (PPP), which was

a loan designed to provide a direct incentive for small businesses to keep their workers

on the payroll. Under this program, the SBA would forgive all or part of loans if all

employees were kept on the payroll for eight weeks and borrowers submitted

documentation confirming that the loan proceeds were used for payroll, rent, mortgage

interest, or utilities. Interested applicants applied through an existing SBA lender or

any other participating federally insured financial institution.

2
Case 1:22-cr-00004-GNS Document 1 Filed 01/18/22 Page 3 of 8 PageID #: 3

6. The PPP application process required applicants to submit a Borrower Application

Form through an SBA-approved financial entity. The application contained

information as to the purpose of the loan, average monthly payroll, number of

employees and background of the business and its owner, including questions relating

to criminal history. Applicants were also required to make good faith certifications,

including that economic uncertainties have necessitated their loan requests for

continued business operations and that they intended to use loan proceeds only for

authorized purposes.

7. Another related response to the COVID-19 outbreak was an expansion of an existing

disaster-related program - the Economic Injury Disaster Loan (EIDL) - to provide for

loan assistance (including $10,000 advances) for small businesses and other eligible

entities for loans up to $2 million. The EIDL proceeds could be used to pay fixed debts,

payroll, accounts payable and other bills that could have been paid had the disaster not

occurred; however, such loan proceeds were not intended to replace lost sales or profits

or for expansion of a business.

8. Unlike certain other types of SBA-guaranteed loans, EIDL funds were issued directly

from the United States Treasury and applicants applied through the SBA via an online

portal and application. The EIDL application process, which also used certain outside

contractors for system support, collected information concerning the business and the

business owner, including:

a. information as to the gross revenues for the business prior to January 31,

2020;

b. the cost of goods sold;

3
Case 1:22-cr-00004-GNS Document 1 Filed 01/18/22 Page 4 of 8 PageID #: 4

c. and information as to any criminal history of the business owner.

9. EIDL applicants electronically certified that the information provided was accurate and

were warned that any false statement or misrepresentation to the SBA or any

misapplication of loan proceeds may result in sanctions, including criminal penalties.

10. On April 2, 2020, BAUER filed an application (3301428208) for a Small Business

Administration (SBA) Economic Injury Disaster Loan (EIDL) for FPS. BAUER

falsely claimed that FPS had six employees, $29,500 in gross revenue, and $1 ,800 in

lost rents due to the disaster. The potential loan amount was $1,800.

11. On April 5, 2020, BAUER filed an application (330254 1838) for a SBAEIDL for FPS.

BAUER falsely claimed that FPS had six employees, $52,300 in gross revenue, and

$9,000 in lost rents due to the disaster. The potential loan amount was $9,000.

12. On April 7, 2020, BAUER applied for a PPP loan for FPS and submitted a SBA Form

2483, Paycheck Protection Program Borrower Application Form, to ReadyCap

Lending. BAUER falsely claimed that FPS had average monthly payroll of $11 ,1 00

and six employees. The potential loan amount was $30,800.

13. On April 8, 2020, BAUER applied for a PPP loan for FPS and submitted a SBA Form

2483 to ReadyCap Lending. BAUER falsely claimed that FPS had average monthly

payroll of $11,000 and six employees. The potential loan amount was $27,700.

14. On April 13, 2020, BAUER filed an application (330697682) for a SBA EIDL for FPS.

BAUER falsely claimed that FPS had six employees, $28,000 in gross revenue, and

$15,000 in cost of goods sold. The potential loan amount was $6,500.

15. On April 29, 2020, BAUER applied for a PPP loan for FPS, and submitted a SBA Form

2483 , Paycheck Protection Program Borrower Application Form, to ReadyCap

4
Case 1:22-cr-00004-GNS Document 1 Filed 01/18/22 Page 5 of 8 PageID #: 5

Lending. BAUER falsely claimed that FPS had average monthly payroll of $13,496

and six employees. The potential loan amount was $33,700.

16. On May 29, 2020, BAUER faxed a Form 7200, Advance Payment ofEmployer Credits

Due to COVID-19, to the Internal Revenue Service (IRS). BAUER falsely claimed

that FPS had 10 employees and $37,000 in quarterly wages, when in fact FPS did not

have any employees or wage expenses. BAUER requested a $70,000 advance

payment.

17. On June 29, 2020, BAUER filed an application (33073299618) for a SBA EIDL for

FPS. BAUER falsely claimed that FPS had 10 employees, $43,900 in gross revenue,

and $26,000 in cost of goods sold. The potential loan amount was $8,950.

18. On July 1, 2020, BAUER faxed another Form 7200. BAUER falsely claimed that FPS

had six employees and $37,350 in quarterly wages, when in fact FPS did not have any

employees or wage expenses. BAUER requested a $43,064.55 advance payment.

19. With each SBA Form 2483, BAUER submitted a fraudulent Form 941, Employer 's

Quarterly Federal Tax Return, for the first quarter of 2020, which stated FPS has six

employees, gross wages of $37,350, and $7,527 of taxes due.

20. According to IRS records, FPS did not file any Forms 941 or W-2 and has never made

any tax deposits.

COUNT DATE INTERSTATE WIRE COMMUNICATION

1 April 2, 2020 EIDL loan application transmitted by wire from Kentucky to the
SBA outside of Kentucky

2 April 5, 2020 EIDL loan application transmitted by wire from Kentucky to the
SBA outside of Kentucky

5
Case 1:22-cr-00004-GNS Document 1 Filed 01/18/22 Page 6 of 8 PageID #: 6

COUNT DATE INTERSTATE WIRE COMMUNICATION

3 April 7, 2020 SBA Form 2483 in support of PPP loan application
transmitted by wire from Kentucky to ReadyCap lending in New
Jersey

4 April 8, 2020 SBA Form 2483 in support of PPP loan application
transmitted by wire from Kentucky to ReadyCap lending in New
Jersey

5 April 13, 2020 EIDL loan application transmitted by wire from Kentucky to the
SBA in outside of Kentucky

6 April 29, 2020 SBA Form 2483 in support of PPP loan application
transmitted by wire from Kentucky to ReadyCap lending in New
Jersey

7 May 29, 2020 IRS Form 7200 transmitted by wire from Kentucky to the IRS in
Oklahoma requesting advance payment of tax credits

8 June 29, 2020 EIDL loan application transmitted by wire from Kentucky to the
SBA outside of Kentucky

9 July 1, 2020 IRS Form 7200 transmitted by wire from Kentucky to the IRS in
Virginia requesting advance payment of tax credits

In violation of Title 18, United States Code, Section 1343.

:'\~' ?'.\· ~
MICHAEL A. BENNETT
UNITED STATES ATTORNEY

MAB:DW:lb:01072022

6
Case 1:22-cr-00004-GNS Document 1 Filed 01/18/22 Page 7 of 8 PageID #: 7

UNITED STATES OF AMERICA v. MANDY ELLEN BAUER

PENALTIES

Counts 1-9: NM 20 yrsJ$250,000/both/NM 3 yrs. Supervised Release (each count)

NOTICE

ANY PERSON CONVICTED OF AN OFFENSE AGAINST THE UNITED STA TES SHALL BE SUBJECT TO SPECIAL
ASSESSMENTS, FINES, RESTITUTION & COSTS.

SPECIAL ASSESSMENTS

18 U.S.C. § 3013 requires that a special assessment shall be imposed for each count of a conviction of offenses committed after
November 11, 1984, as follows:

Misdemeanor: $ 25 per count/individual Felony: $100 per count/individual
$125 per count/other $400 per count/other

In addition to any of the above assessments, you may also be sentenced to pay a fine. Such fine is due immediately unless the court
issues an order requiring payment by a date certain or sets out an installment schedule. You shall provide the United States Attorney's
Office with a current mailing address for the entire period that any part of the fine remains unpaid, or you may be held in contempt of
court. 18 U.S.C. § 3571, 3572, 3611, 3612

Failure to pay fine as ordered may subject you to the following:

1. INTEREST and PENALTIES as applicable by law according to last date of offense.

For offenses occurring after December 12, 1987:

No INTEREST will accrue on fines under $2,500.00.

INTEREST will accrue according to the Federal Civil Post-Judgment Interest Rate in effect at
the time of sentencing. This rate changes monthly. Interest accrues from the first business day
following the two week period after the date a fine is imposed.

PENALTIES of:

10% of fine balance if payment more than 30 days late.

15% of fine balance if payment more than 90 days late.

2. Recordation of a LIEN shall have the same force and effect as a tax lien.

3. Continuous GARNISHMENT may apply until your fine is paid.

18 u.s.c. §§ 3612, 3613

If you WILLFULLY refuse to pay your fine, you shall be subject to an ADDITIONAL FINE
of not more than the greater of $10,000 or twice the unpaid balance of the fine; or
IMPRISONMENT fornot more than 1 year or both. 18 U.S.C. § 361 5
Case 1:22-cr-00004-GNS Document 1 Filed 01/18/22 Page 8 of 8 PageID #: 8

RESTITUTION

If you are convicted of an offense under Title 18, U.S.C., or under certain air piracy offenses, you may also be ordered to make
restitution to any victim of the offense, in addition to, or in lieu of any other penalty authorized by law. 18 U.S.C. § 3663

APPEAL
If you appeal your conviction and the sentence to pay your fine is stayed pending appeal, the court shall require:

l. That you deposit the entire fine amount (or the amount due under an installment schedule
during the time of your appeal) in an escrow account with the U.S. District Court Clerk, or

2. Give bond for payment thereof.

18 u.s.c. § 3572(g)

PAYMENTS

If you are ordered to make payments to the U.S. District Court Clerk's Office, certified checks or money orders should be made payable
to the Clerk, U.S. District Court and delivered to the appropriate division office listed below:

LOUISVILLE: Clerk, U.S. District Court
106 Gene Snyder U.S. Courthouse
601 WestBroadway
Louisville, KY 40202
502/625-3500

BOWLING GREEN: Clerk, U.S. District Court
120 Federal Building
241 East Main Street
Bowling Green, KY 42101
270/393-2500

OWENSBORO: Clerk, U.S. District Court
126 Federal Building
423 Frederica
Owensboro, KY 42301
270/689-4400

PADUCAH: Clerk, U.S. District Court
127 Federal Building
501 Broadway
Paducah, KY 42001
270/415-6400

If the court finds that you have the present ability to pay, an order may direct imprisonment until payment is made.

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