Indictment — United States v. Robert Bearden, Northern District of Ohio (Doc. 12)

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Indictment in United States v. Robert Bearden, Case No. 1:21-cr-00527-DCN, Document 12, filed July 14, 2021, in the U.S. District Court for the Northern District of Ohio, Eastern Division. Counts 1 — 3 charge wire fraud under 18 U.S.C. § 1343, and Count 4 charges theft of government funds under 18 U.S.C. § 641 involving a value exceeding $1,000. The Grand Jury alleges that Defendant submitted Economic Injury Disaster Loan applications through the SBA online portal on July 6, July 10 and July 16, 2020, seeking $13,000, $12,300 and $34,800. It also alleges a $6,000 kickback on one of the loans.

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Case: 1:21-cr-00527-DCN Doc #: 12 Filed: 07/14/21 1 of 6. PagelD #: 71

FILED
JUL 14 2021
IN THE UNITED STATES DISTRICT COURT ERS star coun
FOR THE NORTHERN DISTRICT OF OHIO CLEVeLANy OF OHIO
EASTERN DIVISION
UNITED STATES OF AMERICA, INDICTMENT
JUDGE NUGENT

Plaintiff,

)
)
)
)

Title 18, United States Code,

ROBERT BEARDEN, Sections 641 and 1343

Defendant.

GENERAL ALLEGATIONS

At all times relevant to this Indictment, unless otherwise specified:

1. Defendant ROBERT BEARDEN resided in the Cleveland, Ohio area, in the
Northern District of Ohio, Eastern Division.

2. The United States Small Business Administration (“SBA”) was an executive
branch agency of the United States government. The mission of the SBA was to maintain and
strengthen the nation’s economy by enabling the establishment and viability of small businesses
and assist in the economic recovery of communities after disasters.

3. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a
federal law enacted in or around March 2020 and was designed to provide emergency financial
assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. One
source of relief under the CARES Act was authorization for the SBA to issue loans to small

businesses and non-profit entities experiencing revenue loss due to the pandemic.
Case: 1:21-cr-00527-DCN Doc #: 12 Filed: 07/14/21 2 of 6. PagelD #: 72

4. One form of such assistance was the Economic Injury Disaster Loan (““EIDL”’)
program, which provided loan assistance for certain businesses negatively affected by the
COVID-19 pandemic. To qualify for an EIDL loan, a business had to, among other
requirements, be in operation prior to February 1, 2020.

5. Applicants for EIDL loans used the SBA online portal to submit their application
materials. The servers that processed the EIDL loan applications were based in the state of Iowa.

6. Applicants had to certify that the information in the application was true and
correct, under the penalty of perjury and applicable criminal statutes. The application process
involved filling out data fields relating to the size and ownership of the affected business entity,
and other information about the relevant business for the 12 months prior to COVID-19
impacting the national economy, such as the number of employees in the business, the gross
business revenues realized, and the cost of goods sold. This information, submitted by the
applicant, was then used by SBA systems to calculate the amount of money the applicant was
eligible to receive.

7. Pursuant to the provisions governing the EIDL program, loan proceeds could only
be used by the affected business receiving EIDL loans for certain permissible expenses. The
loans could be used by the business to pay fixed debts, payroll, accounts payable, and other bills

that could have been paid had the COVID-19 disaster not occurred.

COUNTS 1 — 3
(Wire Fraud, 18 U.S.C. § 1343)
The Grand Jury charges:
8. The allegations contained in paragraphs 1| through 7 of this Indictment are

realleged and incorporated by reference as if stated fully herein.
Case: 1:21-cr-00527-DCN Doc #: 12 Filed: 07/14/21 3 of 6. PagelD #: 73

The Scheme to Defraud

9. In or around July 2020, in the Northern District of Ohio, Eastern Division, and
elsewhere, Defendant ROBERT BEARDEN, with the intent to defraud, did devise, and intend to
devise, a scheme and artifice to defraud, and to obtain money and property from the SBA by
means of materially false and fraudulent pretenses, representations, and promises, knowing that
the pretenses, representations, and promises were false and fraudulent when made, by submitting
fraudulent loan applications with fictionalized information.

Purposes of the Scheme

10. The purposes of the scheme included, but were not limited to, the following: for
Defendant to unjustly enrich himself and others by obtaining EIDL loan proceeds under false

pretenses.

Manner and Means of the Scheme

11. The manner and means by which Defendant carried out the scheme included, but
were not limited to, the following:

a. Defendant submitted EIDL loan applications with false information about
existing businesses, and with information about businesses that did not exist, through the SBA’s
online application portal, using interstate wire communications. Defendant fictionalized figures
provided for the businesses’ gross revenues and employees.

b. Defendant offered to obtain, attempted to obtain, and in some instances
did obtain, government pandemic assistance for third parties in exchange for a share of the funds
obtained, and then submitted fraudulent EIDL loan applications in the names of those third

parties, and in some instances received kickbacks on those loans.
Case: 1:21-cr-00527-DCN Doc #: 12 Filed: 07/14/21 4 of 6. PagelD #: 74

C. Defendant obtained identifying information from individuals interested in
receiving government pandemic assistance, but then used the information to submit fraudulent
EIDL loan applications in their names, but with the funds directed to accounts that Defendant

controlled.

Acts in Furtherance of the Scheme

12. The acts caused by Defendant in furtherance of the scheme, in the Northern
District of Ohio, Eastern Division, included, but were not limited to, the following:

a. On or about July 6, 2020, Defendant finalized a fraudulent EIDL loan
application through the SBA online portal, seeking a $13,000 loan to a sole proprietorship in
Defendant’s name, with a trade name of “24 KARAT GOLD HOUSE,” which was approved and
disbursed to a bank account in Defendant’s name and under Defendant’s control (“Bank
Account 1”), as Defendant had requested.

b. On or about July 10, 2020, Defendant finalized a fraudulent EIDL loan
application through the SBA online portal, seeking a $12,300 loan to a sole proprietorship in
Person 1’s name, with a trade name of “House Painting by [Person 1],” which was approved and
disbursed to Bank Account 1, as Defendant had requested. Defendant submitted the loan in
Person 1’s name, representing Person 1 as having $98,500 in annual revenues, despite Person 1’s
instruction not to do anything inconsistent with Person 1’s receiving benefits from the U.S.
Social Security Administration.

Cc. On or about July 16, 2020, Defendant finalized a fraudulent EIDL loan
application through the SBA online portal, seeking a $34,800 loan to a sole proprietorship in
Person 2’s name, with a trade name indicating a catering business, which was approved and

disbursed to Person 2’s bank account, as Defendant had requested. Defendant expected to
Case: 1:21-cr-00527-DCN Doc #: 12 Filed: 07/14/21 5 of 6. PagelD #: 75

receive, and did receive, a $6,000 kickback in exchange for obtaining the EIDL loan for

Person 2.

13.

Execution of the Scheme

On or about each of the dates set forth below, in the Northern District of Ohio,

Eastern Division, and elsewhere, Defendant, for the purpose of executing the scheme and artifice

to defraud described above, and attempting to do so, transmitted, and caused to be transmitted,

writings, signs, signals, pictures and sounds by means of wire communications in interstate

commerce, as described below, each transmission constituting a separate count of this

Indictment:
Count | Approximate Description of Transmission Originating | Recipient
Date Location | and Location

1 July 6, 2020 | Electronic submission of EIDL loan | Ohio SBA, Iowa
application in Defendant’s name

2 July 10, 2020 | Electronic submission of EIDL loan | Ohio SBA, Iowa
application in Person 1’s name

3 July 16, 2020 | Electronic submission of EIDL loan | Ohio SBA, Iowa
application in Person 2’s name

All in violation of Title 18, United States Code, Section 1343.
Case: 1:21-cr-00527-DCN Doc #: 12 Filed: 07/14/21 6 of 6. PagelD #: 76

; COUNT 4
(Theft of Government Funds, 18 U.S.C. § 641)

The Grand Jury further charges:

14. The allegations contained in paragraphs 1 through 7 and 9 through 12 of this
Indictment are realleged and incorporated by reference as if stated fully herein.

15. In or around July 2020, in the Northern District of Ohio, Eastern Division, and
elsewhere, Defendant ROBERT BEARDEN knowingly and willfully embezzled, stole,
purloined, and converted to his own use money of the United States or any department or agency
thereof, of a value exceeding $1,000, to wit: SBA EIDL funds obtained by fraud.

All in violation of Title 18, United States Code, Section 641.

A TRUE BILL.

Original document - Signatures on file with the Clerk of Courts, pursuant to the E-Government

Act of 2002.


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