Criminal Indictment — United States v. Paul Kwak and Michelle Kwak, Northern District of Georgia (Document 32)

Summary

A criminal indictment in United States of America v. Paul Kwak and Michelle Kwak, Case 1:21-cr-00199, in the U.S. District Court for the Northern District of Georgia, Atlanta Division, filed May 18, 2021 as Document 32. Count 1 charges conspiracy to commit wire fraud from about March 30, 2020 through about April 5, 2021, Counts 2 to 6 charge wire fraud over EIDL applications for NSEW GA Inc., NSEW Eastern LLC, NSEW Western LLC, Copeland GA LLC and Bomnal LLC, and Count 7 charges Paul Kwak with concealment money laundering. The grand jury alleges that the Bomnal application of on or about August 6, 2020 falsely claimed gross revenue of $549,567 and 7 employees, and that the SBA approved an EIDL of $150,000. It alleges that on or about August 14, 2020 $70,000 and $80,000 of those proceeds were transferred to the defendants.

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“Criminal Indictment — United States v. Paul Kwak and Michelle Kwak, Northern District of Georgia (Document 32).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-1-21-cr-00199-dkt-32-n-d-ga-b4dff8ba3c/, SHA-256 0bc5935024ed558977452d386fddb25f89c35cd4bbe798adffc3355d60b75021.

Full text

Case 1:21-cr-00199-UNA Document 32 Filed 05/18/21 Page 1 of 7

ORIGINAL
FILED IN OPEN COURT
U.S.D.C. - Atlanla

MAY 182021
IN THE UNITED STATES DISTRICT COURT JAMES N. HATTEN, Clerk
FOR THE NORTHERN DISTRICT OF GEORGL’W ~ Deputy Clerk
ATLANTA DIVISION “/‘

UNITED STATES OF AMERICA

v. Criminal Indictment
PAULKWAK No. 1Lz21Cfl._199
MICHELLE KwAK

THE GRAND JURY CHARGES THAT:

Count 1
Conspiracy to Commit Wire Fraud

From on or about March 30, 2020, through on or about April 5, 2021, in the
Northern District of Georgia and elsewhere, the Defendants, PAUL KWAK

and MICHELLE KWAK, did knowingly and willfully combine, conspire,
confederate, agree, and have a tacit understanding with each other and
with others known and unknown to the Grand Jury to devise and intend

to devise a scheme and artifice to defraud the U.S. Small Business
Administration (“SBA”), and for obtaining money from the SBA by means

of materially false and fraudulent pretenses, representations, and
promises, and by the omission of material facts, and, with the intent to

defraud, cause to be transmitted by means of wire communication in

interstate commerce certain writings, signs, signals, pictures, and sounds,

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

2. In March 2020, Congress passed the Coronavirus Aid, Relief, and
Economic Security (“CARES”) Act to provide emergency financial
Case 1:21-cr-00199-UNA Document 32 Filed 05/18/21 Page 2 of 7

assistance to the millions of Americans who were suffering the economic

effects caused by the COVID-19 pandemic. The Act created the Economic
Impact Disaster Loan (“EIDL”) Program to provide economic relief to
small businesses with 500 or fewer employees. EIDL proceeds may be

used to pay debts, payroll, accounts payable, and other bills that cannot be
paid because of the impact of COVID-19. The BRA administers the EIDL
Program.

3. An EIDL application must provide, among other information, the amount
of revenue the business generated in the 12 months prior to the application

and the number of employees. The applicant must certify, under penalty

of peijury, that the information is correct and that he or she is legally
eligible to apply for an EIDL.

4. Defendants PAUL KWAK and MICHELLE KWAK submitted and caused
to be submitted to the SBA over the Internet materially false and
fraudulent EIDL applications.

5. For example, on or about August 6, 2020, Defendant PAUL KWAK
submitted and caused to be submitted an EIDL application online on

behalf of Bomnal LLC, which falsely and fraudulently stated that Bomnal

• (1) had gross revenue of $549,567 for the 12 months prior to January 31,
2020, (2) had 7 employees as of January 31, 2020, (3) was established on

March 26, 2019, and (4) conducted business activity in finance and
accounting. In reality, Bomnal had no revenue, no employees, was not

2
Case 1:21-cr-00199-UNA Document 32 Filed 05/18/21 Page 3 of 7

organized as an LLC until March 26, 2020, and conducted no legitimate
business activity of any kind.

6. By means of these false and fraudulent applications, Defendants PAUL
KWAK and MICHELLE KWAK illegally obtained millions of dollars in

EIDL proceeds. For example, as a result of the fraudulent EIDL application
submitted in the name of Bomnal, the SBA approved an EIDL of $150,000,

and Defendants PAUL KWAK and MICHELLE KWAK converted the
proceeds to their personal uses.

All in violation of Title 18, United States Code, Section 1349.

Counts 2 to 6
Wire Fraud
7. The facts alleged in paragraphs 2 through 6 are incorporated here.

8. On or about each of the dates set forth below, in the Northern District of
Georgia and elsewhere, the Defendants, PAUL KWAK and MICHELLE
KWAK, aided and abetted by each other and by others known and
unknown to the Grand Jury, having devised and intending to devise a

scheme and artifice to defraud the SBA, and for obtaining money from the

SBA by means of materially false arid fraudulent pretenses,
representations, and promises, and by the omission of material facts, with

the intent to defraud, transmitted and caused to be transmitted by means

of wire communication in interstate commerce, the following writings,
signs, signals, pictures, and sounds, that is, the EIDL applications
identified below, for the purpose of executing such scheme and artifice:

3
Case 1:21-cr-00199-UNA Document 32 Filed 05/18/21 Page 4 of 7

Count Applicant Company’s Name Date Submitted
2 NSEW GA Inc. March 30, 2020
3 NSEW Eastern LLC June 16, 2020
4 NSEW Western LLC June 23, 2020
5 Copeland GA LLC August 4, 2020
6 Boninal LLC August 6, 2020

All in violation of Title 18, United States Code, Section 1343 and Section 2.

Count 7
Concealment Money Laundering
9. The facts alleged in paragraphs 2 through 6 are incorporated here.
10. On or about August 14,2020, in the Northern District of Georgia and
elsewhere, the Defendant, PAUL KWAK, knowingly conducted and

attempted to conduct a financial transaction affecting interstate commerce,

which involved the proceeds of a specified unlawful activity, that is wire
fraud, in violation of Title 18, United States Code, Section 1343, knowing

that the transaction was designed in whole and in part to conceal and

disguise the nature, location, source, ownership, and control of the
proceeds of specified unlawful activity, and while conducting and
attempting to conduct such financial transaction knowing that the

property involved in the financial transaction represented the proceeds of

some form of unlawful activity.

4
Case 1:21-cr-00199-UNA Document 32 Filed 05/18/21 Page 5 of 7

11. The Defendant, PAUL KWAK, knew that the EIDL proceeds of $150,000
approved by the SBA to Bomnal LLC were the proceeds of wire fraud in
violation of Title 18, United States Code, Section 1343. On or about August

14, 2020, PAUL KWAK caused to be transferred from Bomnal’s bank
account $70,000 to himself and $80,000 to Defendant MICHELLE KWAK.

All in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i) and

Section 2.
FORFEITURE PROVISION

12. Upon conviction of one or more of the offenses alleged in Counts One
through Six of this Indictment, the Defendants, PAUL KWAK and
MICHELLE KWAK, shall forfeit to the United States of America, pursuant

to Title 18, United States Code, Section 982(a) (2) (A), any property
constituting, or derived from, proceeds obtained directly or indirectly as a

result of such violations, including, but not limited to, the following:

13. MONEY JUDGMENT: A sum of money in United States currency,
representing the amount of proceeds obtained as a result of the offenses

alleged in Count~ One through Six of this Indictment.

14. Upon conviction of the offense alleged in Count Seven of this Indictment,
the Defendant, PAUL KWAK, shall forfeit to the United States of America,
pursuant to Title 18, United States Code, Section 982(a)(1), any property,

real or personal, involved in such offense, or any property traceable to
such property, including, but not limited to, the following:

5
Case 1:21-cr-00199-UNA Document 32 Filed 05/18/21 Page 6 of 7

15. MONEY JUDGMENT: A sum of money in United States currency,
representing the amount of proceeds obtained as a result of the offense
alleged in Count Seven of this Indictment.
16. If, as a result of any act or omission of any Defendant, any property subject
to forfeiture:
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
e. has been commingled with other property which cannot be
subdivided without difficulty;
the United States of America intends, pursuant to Title 21, United States Code,
Section 853(p), as incorporated by Title 18, United States Code, Section 982(b)(1),
to seek forfeiture of any other property of said defendant up to the value of the
forfeitable property.

A j /tA BILL
earl /

•REPERSON
KURT R. ERsKINE
Acting United States Attorney

7i~2Aad 5
MICHAEL S. QIN
Assistant United States Attorney
Provisionally admitted pursuant to
Local Rule 83.1
Case 1:21-cr-00199-UNA Document 32 Filed 05/18/21 Page 7 of 7

600 U.S. Courthouse
75 Ted Turner Drive SW
Aflanta, GA 30303
404-581-6000; Fax: 404-581-6181

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