Indictment — No. 0:23-cr-60203 (Dkt. 11, S.D. Fla.)

Summary

A grand jury indictment in United States v. Stephanie Diane Smith, No. 0:23-cr-60203 (S.D. Fla.), entered on the docket October 20, 2023 as Document 11. Counts 1-2 charge wire fraud, alleging that Smith submitted PPP applications for Children 1st and Agape with false payroll and gross receipts figures and falsified IRS tax forms, then sought forgiveness of the loans. The indictment states that Lender 1 and Lender 2 disbursed approximately $31,108 in total. Count 1 is a disbursement of approximately $20,833 from Lender 1, and Count 2 one of approximately $10,275 from Lender 2. The 10-page filing includes forfeiture allegations, a certificate of trial attorney and a penalty sheet.

Summary drafted by a model from the text of the original file linked on this page and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Case 0:23-cr-60203-BB Document 11 Entered on FLSD Docket 10/20/2023 Page 1 of 10
                                                                         FILED BY              D.C,

                                                                               02T 19 2223
                             UN ITED STA TES D ISTR ICT C O U R T
                             SO U TH ER N DISTR ICT O F FLO R IDA              tkkltll'
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                                                                              S,D.OFFLA.-FT.LAUD.


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                                    s-0--ttw os-6tq> 1vctl.
                                       18U.S.C.j1343
                                       18U.S.C.j981(a)(1)(C)


  U NITED STATE S O F AM E RICA

  VS.


  STEPH AN IE DIA NE SM ITH ,

                                D efendant.


                                           IN D ICTM EN T

         The Grand Jury chargesthat:

                                   G E NER AL A LLE G A TIO N S

         A tal1tim esrelevantto this lndictm ent:

                                 TheSm allB usiness A dm inistration

                 The United States Small Business Administration (ûçSBA'') was an executive
  branch agency ofthe United States governm entthatprovided supportto entrepreneursand sm all

  businesses. The m ission of the SBA w as to m aintain and strengthen the nation's econom y by

  enabling the establishm ent and viability of sm all businesses and by assisting in the econom ic

  recovery of com m unities after disasters.

                 A spartofthis effort,the SBA enabled and provided loans through banks,credit

  unions,and other lenders. These loanshad governm ent-backed guarantees.
Case 0:23-cr-60203-BB Document 11 Entered on FLSD Docket 10/20/2023 Page 2 of 10




                                 The Paycheck Protection Program

                TheCoronavinzsAid,Relief,andEconomicSecurityIICCARES''IActwasafederal
  law enacted in or around M arch 2020,designed to provide em ergency financialassistance to the

  m illions of Am ericans who w ere suffering from the econom ic effects caused by the COV 1D -19

  pandem ic. One source of relief that the CA RES A ct provided w as the Paycheck Protection

  Program ($çPPP''),which authorized forgivable loansto smallbusinesses forjob retention and
  certain otherexpenses.

                The SBA prom ulgated regulationsconcerning eligibility fora PPP loan. To obtain

  a PPP loan,a qualifying businessw asrequired to subm ita PPP loan application,w hich w assigned

  by an authorized representative ofthe business. The PPP loan application required the business

  (through its authorized representative)to acknowledge the program rules and make certain
  aftirm ative certificationsto be eligible to obtain the PPP loan,including thatthe businessw as in

  operation on February 15,2020,and eitherhad em ployees for whom itpaid salaries and payroll

  taxes orpaid independentcontractors.Paym entsto independentcontractors are typically reported

  tothelnternalRevenueService(ûtlRS'')on a CûF'ol'
                                                 m 1099-MlSC.'' ln thePPP loan application
  (SBA Form 2483),thesmallbusiness(tluoughitsauthorizedrepresentative)wasrequiredtostate,
  nmong otherthings,its:(a)average monthly payrollexpenses'
                                                          ,and (b)numberofemployees.
  These figures w ere used to calculate the am ount of m oney the sm all business was eligible to

  receive underthe PPP.

                In addition, a business applying for a PPP loan w as required to provide

  docum entation showing its payroll expenses. This payroll infonuation w as m aterial to the

  application because,pursuantto statutory requirem entsand im plem enting regulations,the am ount

  ofthe loan thattypically could be approved was a function of the applicant's historicalpayroll


                                                  2
Case 0:23-cr-60203-BB Document 11 Entered on FLSD Docket 10/20/2023 Page 3 of 10




 costs,consisting of com pensation to its em ployees whose principal place of residence w as the

 UnitedStates,subjecttocertainexclusions.
                lndividuals w ho operated a business under a ûûsole proprietorship'' business

  structure w ere eligible for a PPP loan. To qualify for such a PPP loan,individuals had to report

  and docum ent their incom e and expenses from the sole proprietorship. Sole proprietorships

 typically reporttheirincom e and expensesyearly to the IR S on a isForm 1040,Schedule C .'' A s

 w ith otherPPP loans,this inform ation and supporting docum entation was used to calculate the

  am ountofm oney the individualwas entitled to receive under the PPP. The m axim um PPP loan

  amountfora soleproprietorwith no employeeswas$20,833.
                PPP loan applicationsw ere processed by participating lenders and third-party loan

 processors. lfa PPP loan application w asapproved,the participating lenderfunded the PPP loan

 using its own m onies,including by electronic transfer through the Autom ated Clearing H ouse

  (ACH)system.W hileitwastheparticipatinglenderthatissuedthePPP loan,theloanwas100%
  guaranteed by the SBA . D ata from the application,including inform ation aboutthe borrow er,the

 totalam ountofthe loan,and the listed num berofem ployees,w astransm itted by the lenderto the

  SBA in the course ofprocessing the loan.

         8.      A fter the lender funded the PPP loan to the bonow er, the lender subm itted

  disbursem entdetailsinto the SBA E--f'
                                       ran system ,w ith serverslocated in Sterling,VA .The SBA 'S

  D enver Finance Center, located in D enver,Colorado, created paym ent files and authorized

  paym ents ofthe PPP processing fee to the lender through the FinancialM anagem entSystem of

  theU .S.Treasury. Theprim ary serverforthe FinancialM anagem entSystem w asin Sterling,VA .

  The PPP processing fee varied depending on the am ountofthe loan. Once created,the paym ent

  tilesw erethen transm itted via w ireto theU .S.Treasury disbursing office in K ansasCity,M issouri,
Case 0:23-cr-60203-BB Document 11 Entered on FLSD Docket 10/20/2023 Page 4 of 10




  which,in turn,sent instructions for paym ent of funds to the Federal Reserve Bank A utom ated

  Clearing H ouseprocessing site in EastRutherford,N ew Jersey.

                The proceedsof a PPP loan could be used only forcertain specified item s,such as

  payrollcosts,costs related to the continuation ofgroup health care benefits,orm ortgage interest

 paym ents for the business. The proceeds of a PPP loan were not perm itted to be used by the

  borrowertopurchaseconsumergoods,automobiles,personalresidences,clothing,orjewelry,to
  pay the borrow er's personalfederalincom e taxes,orto fund the borrow er'sordinary day-to-day

  living expensesunrelated to the specitied authorized expenses.

         10.    The PPP allow ed the interestand principalon the PPP loan to be entirely forgiven

  ifthe borrow er utilized 60% ofthe loan in the 24 weeks post-disbursem enttow ard payrollcosts

  andutilizedtheremaining40% onqualified expenseitems(e.g.,mortgage,rent,andutilities).
         11.    Applying forPPP loan forgiveness was a separate process thatrequired additional

  aftirm ationsthatthe applicantsatisfied the eligibility forPPP loan forgiveness. W hateverportion

  ofthe PPP loan w asnotforgiven w as serviced as a loan.

                               The Defendantand R elated Entities

         12.    D efendant STEPH AN IE DIA N E SM ITH was a resident of Brow ard County,

  Florida and an employeeofthe Broward SheriffsOffice.

         13.    Childems1stBasketballTraining lnc(hereinafter,tschildrens1st'')wasaFlorida
  cop oration w ith a registered principal address in Brow ard County, Florida. STEPH A NIE

  D IAN E SM ITH w as the registered agentand officerofChildrens 1st.

         14. AgapeSmithVending,LLC (hereinafter,ûûAgape'')wasaFloridalimited liability
  com pany w ith a registered principaladdressin B row ard County,Florida. STEPH A N IE DIA NE

  SM ITH w asthe m anagerofA gape.


                                                 4
Case 0:23-cr-60203-BB Document 11 Entered on FLSD Docket 10/20/2023 Page 5 of 10




                                        R elevantLenders

         15.    Lender 1 w as a participating lender in the PPP thatissued PPP loans.

         16.    Lender2 w as a participating lenderin the PPP thatissued PPP loans.

                                          C O U NT S 1-2
                                           W ire Fraud
                                        (18 U.S.C.j1343)
         17.    The GeneralA llegations section ofthis lndictm entis re-alleged and incorporated

 by reference as though fully setforth herein.

         18.    From in or around M arch 202 1,through in or around N ovem ber 2021,the exact

 dates being unknown to the G rand Jury,in Brow ard County,in the Southern D istrictof Florida,

 and elsew here,the defendant,

                                 STEPH A N IE D IAN E SM ITH ,

 did know ingly,and w ith the intentto defraud,devise,and intend to devise,a schem e and artitice

 to defraud, and to obtain m oney and property by m eans of m aterially false and fraudulent

 pretenses, representations, and prom ises, know ing that the pretenses, representations, and

 prom ises were false and fraudulentw hen m ade,and,forthe purpose ofexecuting the schem e and

 artifice,did know ingly transm itand cause to be transm itted,by m eans ofw ire com m unication in

 interstate com m erce,certain w ritings,signs,signals,pictures,and sotm ds,in violation ofTitle 18,

 U nited States Code,Section 1343.

                       PU RPO SE O F TH E SCH EM E A ND A RTIFIC E

                Itw asthe pum ose ofthe schem e and artifice forthe defendantto unlaw fully em ich

 herselfby,amongotherthings:(a)submittingandcausingthesubmissionoffalseandfraudulent
  applications for PPP loans m ade available through the SBA to provide relief for the econom ic

  effectscausedbytheCOV1D-19pandemic;(b)causingthedisbursementofPPP loanstoherself
Case 0:23-cr-60203-BB Document 11 Entered on FLSD Docket 10/20/2023 Page 6 of 10




 asa sole proprietorofChildren 1stand A gape thatneither she nor hercom panies w ere entitled to

 receive;and (c)submitling and causing the submission offalseand fraudulentapplicationsfor
 forgiveness ofPPP loansm ade to heras a sole proprietor ofChildren 1stand A gape.

                               TH E SC H EM E AN D A R TIFICE

         The m anner and m eans by w hich the defendant sought to accom plish the purpose of the

 schem e and artifice included,am ong others,the following:

         20.    STEPH AN IE D IAN E SM ITH subm itled and caused the subm ission ofm aterially

 false and fraudulentapplicationsforPPP loansforChildren 1stand A gape from the SBA through

 Lender 1 and Lender2,including PPP applications thatcontained m aterially false and fraudulent

 inform ation as to the bonow er's average m onthly payrolland annualgross receipts for the year

 2019.

                STEPH AN IE D IAN E SM ITH subm itted and caused the subm ission ofm aterially

 false and fraudulentinfonnation and docum entation in supportofapplications for PPP loans for

 Children 1stand Agape,including falsified lnternalRevenue Service tax form s.

                A s a result of false and fraudulent PPP loan applications and infonnation and

 docum entation subm itted as part of the schem e and artifice, STEPH AN IE D IAN E SM ITH

 caused Lender 1and Lender2 to disburse,in total,approxim ately $31,108 in PPP loan proceeds
 to STE PH A NIE D IA N E SM ITH as a sole proprietorofChildren 1stand A gape.

         23.    ln furtherance of the schem e and artifice, STE PH A N IE D IA N E SM ITH

  subm itted and caused the subm ission of m aterially false and fraudulent applications and

  infonnation to Lender 1 and Lender2 to cause and attem ptto cause the forgiveness ofPPP loans

  issued to STEPH A N IE D IAN E SM ITH as sole proprietor ofChildren 1stand A gape.




                                                6
Case 0:23-cr-60203-BB Document 11 Entered on FLSD Docket 10/20/2023 Page 7 of 10




           24.    STEPH A N IE D IA N E SM ITH used the proceeds of the schem e and artifice to

  em ich herself.

                                          U SE O F W IR ES

                  On or about the dates specified as to each count below ,STEPH AN IE D IAN E

  SM ITH ,forthe purpose of executing the aforesaid schem e and artitice to defraud,and to obtain

  m oney and property by m eans ofm aterially false and fraudulentpretenses,representations,and

  prom ises, knowing that the pretenses,representations,and prom ises w ere false and fraudulent

  when m ade,did know ingly transm itand cause to be transm itted in interstate com m erce,by m eans

  ofw ire com m unication,certain w ritings,signs,signals,pictures,and sounds,as m ore particularly

  described below :

   C O U NT      APPR O X IM ATE                      DE SCR IPTIO N O F W IR E
                     D A TE
       1           April1,2021         Disbursem ent of SBA loan num ber 1892748707 from
                                       Lender 1 in the approximate amount of $20,833 by
                                       Automated Clearing House (ACH)transferto W eFlorida
                                       Financialbalzk accountnum berendin in 3536.
       2            M ay 11,2021       Disbursem ent of SBA loan nlzm ber 7928598808 from
                                       Lender 2 in the approximate amount of $10,275 by
                                       Automated Clearing House(ACH)transfertoBB&T bank
                                       accountnum berendin in 1130.

           In violation ofTitle 18,U nited StatesCode,Section 1343.

                                 FO R FEITU RE A LLEG A TIO N S

                  The allegationsofthis lndictm entare hereby re-alleged and by this reference fully

  incorporated herein forthepurpose ofalleging forfeitureto the United States ofA m erica ofcertain

  property in w hich the defendant,STE PH A NIE D IA N E SM ITH ,hasan interest.

           2.     U pon conviction of a violation of Title 18,U nited States Code,Section 1343,as

  alleged in this lndictm ent,the defendant shall forfeit to the United States any property,real or

  personal,which constitutesorisderived from proceedstraceableto such offense,pursuantto Title

                                                  7
Case 0:23-cr-60203-BB Document 11 Entered on FLSD Docket 10/20/2023 Page 8 of 10




  18,UnitedStatesCode,Section981(a)(1)(C).
        A1lpursuanttoTitle18,UnitedStatesCode,Section981(a)(l)(C)andtheproceduresset
 forth in Title 21,United States Code,Section 853,asincorporated by Title 28,U nited StatesCode,

  Section2461(c).


                                                          A TRUE BILL



                                                          FO REP     S N

   '
    X               d             '
 V ARKENZ LAPOm TE
 UN ITED STATES ATTO RN EY


       /
 D A D A .SN IDER
 A SSISTAN T UN ITED STATES ATTO RN EY




                                               8
  Case 0:23-cr-60203-BB Document 11 Entered on FLSD Docket 10/20/2023 Page 9 of 10
                          UNITED STATES DISTRICT CO U RT
                         SO UTH ERN DISTR IC T O F FLO RIDA

UNITED STA TES OF A M ER ICA                          CASE N O .:


                                                      CERTIFICATE O F TR IAL ATTO RN EY
STEPHANIE DIANE SM ITH ,
                                         /            Superseding Case lnform ation:
                   D efendant.                       New Defendantts)(YesorNo)
CourtDivision (selectone)                            N umberofN ew D efendants
       EEIM iami     r Key W est L FTP               Totalnum berofcounts
       E FTL         L W PB

1do hereby certify that:
  l.     lhave carefully considered the allegations ofthe indictm ent,the numberofdefendants,the num berofprobable
         witnessesandthelegalcomplexitiesoftheIndictm ent/lnfonnationattached hereto.
         Iam awarethattheinformationsupjliedonthisstatementwillberelieduponbytheJudgesofthisCourtinsetting
         theircalendarsandschedulingcrimlnaltrialsunderthemandateoftheSpeedyTrialAct,Title28U.S.C.j3161.
         lnterpreter:(YesorNo)No
         Listlanguageand/ordialect:

         Thiscase willtake 3 daysforthepartiesto try.

         Please check appropriate category and type ofoffense listed below :
         (Checkonlyone)                      (Checkonly one)
         l m 0to 5 days                      L Petty
         11 D 6to 10 days                    L M inor
         III L 11to20 days                   L M isdem eanor
         IV L 21to60 days                    E Felony
         v L 61daysand over
         Hasthiscasebeenpreviously filed in thisDistrictCourt?(YesorNo)N0
         lfyes,Judge                                  CaseN o.
         Hasacomplaintbeenfiledinthismatter?(YesorNo)Yes
         lfyes,MagistrateCaseNo.23-mj-6477-PMH
         DoesthiscaserelatetoapreviouslyfiledmatterinthisDistrictCourt?(YesorNo)NO
         lfyes,Judge                                  CaseN o.
 9. Defendantts)infederalcustodyasofN/A
 10. Defendantts)instatecustodyasofN/A
  11. Rule 20 from the                D istrictof
  12. lsthisapotentialdeathpenaltycase?(YesorNo)NO
  13. Doesthiscase originate from a m atterpending in theN orthern Region ofthe U .S.A ttorney'sOffice
         priorto August8,2014 (M ag.JudgeShaniek M aynard?(YesorNo)No
  l4. Doesthiscase originate from a m atterpending in the CentralRegion ofthe U .S.Attorney'sO ffice
         priorto October3,2019 (M ag.JudgeJared Strauss?(YesorNo)No
         D id thism atterinvolvethe participation oforconsultation w ith now M agistrate Judge Eduardo 1.Sanchez
         during histenure atthe U.S.Attorney'sOffice,w hich concluded on January 22,2023? N O

                                                      B             /
                                                       y:                            .
                                                               DA ID A .SN DER
                                                               A ssistantUnited StatesA ttorney
                                                               CourtID N o. A5502260
Case 0:23-cr-60203-BB Document 11 Entered on FLSD Docket 10/20/2023 Page 10 of 10



                            U NITED STA TES D ISTR ICT CO U R T
                            SO UTH ERN D ISTR ICT O F FL O R ID A

                                       PEN A LTY SH EET

  Defendant's N am e:STEPH AN IE D IA N E SM ITH

  Case N o:                                           - -




  Cotmts#:1-2

  W ire Fraud

  Title 18sU nited States CodeeSection 1343
  * M ax.Term oflm prisonm ent:20 years
  *M andatory M in.Term ofImprisonm ent(ifapplicable):n/a
  * M ax.Supervised R elease:3 years
  * M ax.Fine:$250,000




    *Refersonly to possible term ofincarceration,supervised release and fines. Itdoesnotinclude
          restitution,specialassessm ents,parole terms,orforfeituresthatm ay beapplicable.


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