Indictment — United States v. Farough Darakhshan et al., Eastern District of Virginia (Document 1)

Summary

An indictment in United States of America v. Farough Darakhshan, Shoughi Darakhshan and Fouzi Darakhshan, Case 1:22-cr-00022-LMB, in the U.S. District Court for the Eastern District of Virginia, Alexandria Division, filed February 10, 2022 as Document 1. Count 1 charges conspiracy to commit offenses against the United States under 18 U.S.C. § 371, and Counts 2-21 charge false statements on loan applications under 18 U.S.C. § 1014. The grand jury alleges that the defendants submitted EIDL and PPP loan applications with inflated employee, revenue and payroll figures and IRS forms that had not been filed with the IRS. One overt act describes a PPP application to Atlantic Union Bank for $837,582.50 for Flood Doctor Inc. The forfeiture notice seeks a sum of money equal to at least $1,370,562.00.

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“Indictment — United States v. Farough Darakhshan et al., Eastern District of Virginia (Document 1).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-1-22-cr-00022-dkt-1-e-d-va-f1f4b77249/, SHA-256 e874d7464c904da5b4f4e4bec37cb755f7820d9450d97eea6381d733d0b5586b.

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Case 1:22-cr-00022-LMB Document 1 Filed 02/10/22 Page 1 of 26 PageID# 1

FILED
IN OPEM COURT

IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF VIRGINIA CLERK, U.S. DISTRICT COURT
ALEXANDRIA, VIRGI[!IA
Alexandria Division

UNITED STATES OF AMERICA
CaseNo. l:22-CR-22
V.

Count 1: Conspiracy to Commit Offenses
FAROUGH DARAKHSHAN, Against the United States
a/k/a Frank Darakhshan, (18U.S.C. §371)

SHOUGHI DARAKHSHAN, Counts 2-21: False Statements on Loan
a/k/a Steve Darakhshan, Applications
(18U.S.C. § 1014)
and
Forfeiture Notice
FOUZI DARAKHSHAN,
a/k/a Dave Darakhshan, UNDER SEAL

Defendants.

INDICTMENT

February 2022 Term - at Alexandria, Virginia

THE GRAND JURY CHARGES THAT:

COUNT 1

(Conspiracy to Commit Offenses Against the United States)

Introductory Allegations

At all times material to this Indictment, unless otherwise specified below:

I. Defendant FAROUGH DARAKHSHAN (hereafter "FAROUGH") resided in

Great Falls, Virginia, within the Eastern District of Virginia. FAROUGH also was known as

"Frank Darakhshan."
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2. Defendant SHOUGHI DARAKHSHAN (hereafter "SHOUGHI") resided in

McLean, Virginia, within the Eastern District of Virginia. SHOUGHI was also known as "Steve

Darakhshan."

3. Defendant FOUZI DARAKHSHAN (hereafter "FOUZI") resided in Falls Church

and McLean, Virginia, within the Eastern District of Virginia, and after approximately July 7,

2020, also in Florida. FOUZI was also known as "Dave Darakhshan."

4. FAROUGH, SHOUGHI, and FOUZI are also referred to collectively as "the

defendants" herein.

5. Foad Darakhshan (hereafter "Foad"), charged elsewhere, resided in McLean,

Virginia, within the Eastern District of Virginia.

6. Haleh Farshi(hereafter "Farshi"), charged elsewhere, resided in Ashburn, Virginia,

within the Eastern District of Virginia, and, at times, lived with Foad.

7. Marcus Gharib (hereafter "Gharib"), charged elsewhere, was a friend of

FAROUGH and SHOUGHI. Gharib resided in Tysons Comer, Virginia, in the Eastern District of

Virginia.

8. FAROUGH,SHOUGHI,FOUZI,and Foad, were brothers (hereinafter collectively

referred to as "the brothers"), with Foad being the oldest. Foad and Farshi were in a romantic

relationship and provided guidance and coordination to the other brothers in connection with the

loan applications described below.

9. FAROUGH, SHOUGHI, FOUZI, and Foad were in the home construction, home

repair, and related business fields, and each controlled various corporations and business entities,

most of which had been inactive at various times and did little to no actual business. When the

COVlD-19 pandemic struck the United States and Congress made pandemic relieffunds available,

the defendants charged herein, and their co-conspirators, knowingly and unlawfully submitted
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multiple false loan applications and supporting fraudulent documents in order to obtain money

from financial institutions and the Small Business Administration.

10. FAROUGH controlled approximately seven corporate business entities, all of

which were formed and registered under the laws of the Commonwealth of Virginia, unless

otherwise indicated below:

a. Flood Doctor Florida LLC (which was created in Florida, and FAROUGH

was listed as a member of that company)

b. Tyco Rd LLC

c. Starlabs LLC

d. Skyfall Investments LLC

e. Flood Doctor Inc.

f. Restoration Services Inc. Construction

g. Restoration Doc LLC

11. SHOUGHI controlled the following corporate business entities, which were formed

and registered under the laws of the Commonwealth of Virginia:

a. Blue Media Inc.

b. Restoration Doctor LLC

12. FOUZI controlled the following corporate business entities, which were formed

and registered under the laws of the Commonwealth of Virginia:

a. Persica logistics 11c ("Persica")

b. DAR Restoration Services LLC("DAR Restoration")

13. Foad and Farshi controlled their own business entities and submitted multiple loan

applications in a similar manner, and around the same time, and in concert with the defendants

charged here.
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14. Atlantic Union Bank, American Express National Bank, Fundbox (through its

relationship with First Electronic Bank, a Utah chartered Industrial Bank, member FDIC), Navy

Federal Credit Union,PNC Bank,TD Bank, were each a "financial institution" for purposes of 18

U.S.C. §§ 20, 1014, 1344, and 1957.

15. The Small Business Administration ("SBA") was an agency within the United

States Government that provided assistance to small businesses, including administering and

financing the Economic Injury Disaster Loan ("ETDL") program. Eligible businesses seeking an

EIDL could apply for such a loan directly through the SBA. The SBA also administered the

Paycheck Protection Program ("PPP"), by promulgating regulations concerning eligibility for a

PPP loan. Eligible businesses seeking a loan under the PPP could apply for such a loan through a

federally insured depository institution.

16. All dates indicated in this Indictment are on or about the date indicated. The

submission of loans, supporting documents, signing of loan agreements, and the certifications and

affirmations discussed below occurred on or about the dates indicated, and constituted continuing

offenses under Title 18, United States Code, Section 3237.

The Paycheck Protection Program

17. In or around March 2020, in response to the economic crisis caused by the novel

coronavirus pandemic, the United States Congress passed the Coronavirus Aid, Relief, and

Economic Security Act,Pub. L. No. 116-136, 134 Stat. 281 (2020)("CARES Act"). Among other

things, the CARES Act made government-guaranteed loans available to qualified small businesses

through the PPP. The purpose of loans issued under the PPP was to enable small businesses

suffering from the economic downturn to continue to pay salary or wages to their employees.

18. To qualify for a loan under the PPP, an applicant had to meet certain criteria,

including, among other things, that it was in operation on February 15, 2020, and either had

4
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employees for whom it paid salaries and payroll taxes or paid independent contractors, as reported

on a Form 1099-MISC. Moreover, the amount of the loan that could be approved under the PPP

and implementing regulations typically was a function of the applicant's historical payroll costs,

consisting of compensation to its employees whose principal place of residence was the United

States, subject to certain exclusions.

19. The proceeds of a PPP loan could be used only for certain specified items, such as

payroll costs, costs related to the continuation of group health care benefits, mortgage interest

payments(but not mortgage prepayments or principal payments), rent payments, utility payments,

interest payments on debt obligations that were incurred before February 15, 2020, or for

refinancing certain specified SBA loans. The proceeds of a PPP loan were not permitted to be

used to purchase automobiles, aircraft, personal residences, clothing, jewelry, to pay the

borrower's personal federal income taxes, or to fund the borrower's ordinary day-to-day living

expenses unrelated to the specified authorized expenses.

The Economic Injury Disaster Loan Program

20. Also, in response to the economic crisis caused by the coronavirus pandemic, the

SBA made government-guaranteed loans available to qualified small businesses through the EIDL

program. The puipose of EIDLs was to enable small businesses suffering from the economic

downturn to continue to meet financial obligations and operating expenses that could have been

met had the pandemic not occurred.

21. To qualify for an EIDL, an applicant had to meet certain criteria, including, among

other things, that it was in operation prior to the pandemic, and had regular operating expenses,

which would have been paid if not for the pandemic. Moreover,the amount ofthe loan that could

be approved under the EIDL program typically was a function of the applicant's working capital.
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22. The proceeds of an EIDL could be used for working capital and normal operating

expenses. The proceeds ofan EIDL were not permitted to be used to fund the borrower's ordinary

day-to-day living expenses or to invest in real estate investments on behalf of wholly unrelated

businesses. It was a requirement of the EIDL program that the EIDL proceeds disbursed for the

benefit of a particular company actually be used for the benefit of that company.

23. If an EIDL loan or advance was approved, that information was wired from the

SBA server in the Eastern District of Virginia to a Treasury Department server located outside of

the Eastern District of Virginia.

The Conspiracv and Its Obiects

24. From at least April 2020 and continuing through approximately December 2020, in

the Eastern District of Virginia and elsewhere,

FAROUGH DARAKHSHAN,

SHOUGHI DARAKHSHAN,and

FOUZI DARAKHSHAN,

together with Foad, Farshi, Gharib, and others known and unknown to the Grand Jury, did

knowingly conspire and agree with each other to commit the following offenses against the United

States, all in violation of 18 U.S.C. § 371:

a. False Statements on Loan Applications — that is, for the purpose of

influencing the action of financial institutions and the Small Business

Administration, in connection with loan applications, knowingly to make false

statements and reports concerning revenue, payroll, number of employees, and to

supply false and fictions documents in support thereof, in violation of Title 18,

United States Code, Section 1014; and
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b. Wire Fraud — that is, knowingly to devise and intend to devise a scheme

and artifice to defraud financial institutions, the SBA, and other lenders such as

Fundbox, and to obtain money and property by means of materially false and

fraudulent pretenses, representations, and promises, and for the purpose of

executing such scheme to transmit and cause to be transmitted by means of wire

communication in interstate and foreign commerce, any writings, signs, signals,

pictures, and sounds, in violation of Title 18, United States Code, Section 1343;

and

c. Bank Fraud — that is, to knowingly devise and intend to devise a scheme

and artifice to defraud financial institutions, and to obtain and attempt to obtain by

means of materially false and fraudulent pretenses, representations, and promises,

moneys,funds, credits, assets, securities, or other property owned by, or under the

custody or control of a financial institution, in violation of Title 18, United States

Code, Section 1344.

25. It was a purpose and object ofthe scheme and the conspiracy for the co-conspirators

to fraudulently obtain moneys, funds, credits, assets, and other property owned by, and under the

custody and control of(a) financial institutions—namely, PPP loan proceeds— and (b)the Small

Business Administration through its EIDL program, through materially false pretenses,

representations and promises.

Manner and Means of the Conspiracy

In furtherance of the scheme and the conspiracy, and to accomplish the unlawful objects,

the following manner and means were used, among others:
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26. The defendants would provide the SBA with EIDL applications in which they

falsified and inflated the number of employees and gross revenues for each of their companies,

thereby attempting to obtain and obtaining EIDL proceeds.

27. The defendants would provide financial institutions with IRS Forms 940,941, and

1040 in support of loan applications for their entities containing materially false and fraudulent

representations concerning, among other items as applicable, payroll expenditures, withholding

taxes, and numbers of employees, each item being grossly inflated.

28. The defendants would falsely attest and certify to financial institutions that the IRS

forms provided in connection with PPP loan applications had also been filed with the Internal

Revenue Service ("IRS"), when, in fact, they had not been filed; rather, they had been fabricated

and backdated for the purpose of being provided to the financial institutions.

29. The defendants would falsely attest and certify to financial institutions on each loan

that the proceeds of the PPP Loan would be used to retain workers and maintain payroll or make

mortgage interest payments, lease payments, and utility payments; and at least 60 percent of the

proceeds ofthe PPP Loan would be used for payroll expenses. The defendants acknowledged that

if the funds were knowingly used for unauthorized purposes, the federal government could hold

them legally liable such as for charges of fraud. The defendants made these certifications and

representations knowing they were false, and that they intended to use the PPP loan proceeds, at

least in part, for unauthorized purposes.

30. The defendants would falsely attest and certify to financial institutions that the

information provided in the PPP Loan application and the information provided in all supporting

documents and forms was true and accurate in all material respects. The defendants made these

representations when, in fact, they knew that they had made numerous materially false statements

in PPP loan applications and supporting documents.
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31. The defendants would use on-line portals and email and other interstate electronic

communications in and affecting interstate commerce for the purpose of submitting the loan

applications and supporting documents described herein.

32. The defendants would communicate with Foad and Farshi via a WhatsApp group

chat dedicated to the fraudulent EIDL and PPP loan applications, as well as in person and over the

telephone, concerning the above aspects of the fraud, providing direction, support, and assistance

in the execution of the scheme. In turn, FAROUGH and SHOUGHI likewise communicated with

Gharib and others about aspects of the scheme and its execution and assist Gharib and others in

the preparation of additional false EIDL and PPP loan applications.

33. The defendants would agree with Foad and Farshi that Farshi would submit EIDL

applications to the SBA on their behalf, with their knowledge and approval, knowing that the

representations concerning numbers of employees and revenues for their respective entities were

materially false.

34. The defendants reactivated dormant companies at the direction of Foad in order to

apply for EIDL and PPP loans for those entities. Farshi and Foad assisted the defendants in

reactivating the dormant companies.

Acts in Furtherance of the Conspiracy

In furtherance of the conspiracy, and to achieve the objects thereof, the following overt

acts, among others, were committed in the Eastern District of Virginia:

Entities Associated with FAROUGH

Flood Doctor Inc.

35. On or about April 10,2020,FAROUGH submitted an EIDL application to the SBA

on behalf of Flood Doctor Inc. ("Flood Doctor"), misrepresenting that Flood Doctor had 60

employees and $2,100,000 of gross revenue from January 31, 2019,to January 31, 2020. In truth
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and in fact, Flood Doctor, although an active entity, paid few, if any, wages to employees, and its

revenues were substantially less than FAROUGH claimed to the SBA and financial institutions,

as FAROUGH well knew.

36. On or about May 5, 2020, the SBA deposited approximately $10,000.00 in

FAROUGH's Eagle Bank account ending in 2693. These funds represented the EIDL advance

portion of FAROUGH's fraudulent EIDL. On or about June 18, 2020, the SBA deposited

approximately $149,900.00 of EIDL proceeds into FAROUGH's Eagle Bank account ending in

2693.

37. On May 14, 2020,FAROUGH also applied to Atlantic Union Bank for a PPP loan

of $837,582.50 for Flood Doctor, misrepresenting that Flood Doctor had 40 employees and

$335,033 in monthly payroll expense. FAROUGH provided a fabricated IRS Form 941 for the

first quarter of 2020 in support of the application, misrepresenting that Flood Doctor paid 40

employees approximately $1,005,099 in wages during the first quarter of 2020. FAROUGH also

provided Atlantic Union Bank with a fabricated IRS Form 1040 for 2019, misrepresenting that

Flood Doctor received approximately $1,475,902 in gross receipts in 2019.

38. On June 18, 2020, FAROUGH applied to American Express National Bank

("AMEX")for a PPP loan of $350,000 for Flood Doctor, misrepresenting that Flood Doctor had

40 employees and $140,000 in monthly payroll expense. FAROUGH provided AMEX with a

fabricated IRS Form 941 for the first quarter of2020 in support ofthe application, misrepresenting

that Flood Doctor paid 31 employees approximately $669,228 in wages during the first quarter of

2020. FAROUGH also provided AMEX with fabricated IRS Forms 941 for the second,third, and

fourth quarter of 2019. According to these forms. Flood Doctor paid 40 employees wages of

$377,886.34, $404,911.29, and $322,087.13, in the last three quarters of 2019, respectively.

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39. On or about June 23, 2020, AMEX sent approximately $350,000.00 of PPP loan

proceeds via automated clearinghouse("ACH")into FAROUGH's Eagle Bank account ending in

2693.

Tyco Rd LLC

40. On or about April 15,2020,FAROUGH submitted an EIDL application to the SBA

on behalf of Tyco Rd LLC ("Tyco"), misrepresenting that Tyco had 16 employees and $255,000

of gross revenue from January 31, 2019, to January 31, 2020. In truth and in fact, Tyco was a

defunct company that did not have any employees, revenue,or wage expenses, as FAROUGH well

knew.

41. On or about June 18,2020,the SBA deposited approximately $117,400.00 ofEIDL

proceeds into FAROUGH's Eagle Bank account ending in 2289.

42. On May 14, 2020, FAROUGH also applied to Atlantic Union Bank for a PPP loan

of$249,990 for Tyco, misrepresenting that Tyco had 12 employees and $99,996 in monthly payroll

expenses. FAROUGH provided a fabricated IRS Form 941 for the first quarter of2020 in support

of the application, misrepresenting to Atlantic Union Bank that Tyco paid 12 employees

approximately $99,996 in wages during the first quarter of 2020.

Starlabs LLC

43. On or about May 5, 2020, FAROUGH submitted and caused to be submitted an

EIDL application to the SBA on behalf of Starlabs LLC ("Starlabs"), materially misrepresenting

that Starlabs had 11 employees and $259,000 of gross revenue from January 31, 2019, to January

31, 2020. In truth and in fact, Starlabs was a defunct company that did not have any employees,

revenues, or wage expenses, as FAROUGH well knew.

44. On or about June 19,2020,the SBA deposited approximately $119,400.00 ofEIDL

proceeds into FAROUGH's Atlantic Union Bank account ending in 6942.
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45. On May 14, 2020, FAROUGH also applied to Atlantic Union Bank for a PPP loan

of $229,157.50 for Starlabs, materially misrepresenting that Starlabs had 11 employees and

$91,663 in monthly payroll expenses. FAROUGH also provided a fabricated IRS Form 941 for

the first quarter of 2020 in support of the application, misrepresenting that Starlabs paid 11

employees approximately $91,663 in wages during the first quarter of 2020.

Skyfall Investments LLC

46. On or about May 5, 2020, FAROUGH submitted and caused to be submitted an

EIDL application to the SBA on behalf of Skyfall Investments LLC ("Skyfall"), misrepresenting

that Skyfall had 11 employees and $1,200,000 of gross revenue from January 31,2019, to January

31, 2020. In truth and in fact, Skyfall was a defunct company that did not have any employees,

revenue, or wage expenses, as FAROUGH well knew.

47. On or about June 18, 2020,the SBA deposited approximately $139,900.00 of EIDL

proceeds into FAROUGH's Eagle Bank account ending in 7076.

48. On May 14, 2020,FAROUGH also applied to Atlantic Union Bank for a PPP loan

of $437,482.50 for Skyfall, misrepresenting that Skyfall had 21 employees and $174,993 in

monthly payroll expenses. FAROUGH provided a fabricated IRS Form 941 for the first quarter

of 2020 in support of the application, misrepresenting that Skyfall paid 21 employees

approximately $524,979 in wages during the first quarter of2020.

Remaining Entities Associated With FAROUGH

49. FAROUGH also submitted fraudulent EIDL applications to the SBA on behalf of

Flood Doctor Florida LLC,Restoration Services Inc. Construction,and Restoration Doc LLC(also

referred to as "Restoration Doctors LLC"). Each application contained materially inflated

company revenue and false statements regarding numbers of employees, as FAROUGH well

knew.

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50. FAROUGH also knowingly submitted fraudulent PPP loan applications to Atlantic

Union Bank on behalf of Restoration Services Inc. Construction and Restoration Doc LLC. Those

applications contained similar material misrepresentations concerning numbers of employees and

payroll expenses.

Entities Associated With SHOUGHI

Restoration Doctor LLC

51. On or about April 6, 2020, SHOUGHI submitted an EIDL application to the SBA

on behalf of Restoration Doctor LLC ("Restoration Doctor"), misrepresenting that Restoration

Doctor had 15 employees and $520,000 in gross revenue between January 31, 2019, and January

31, 2020. In truth and in fact, Restoration Doctor paid little if any employee wages and had much

less revenue than SHOUGHI stated, as he well knew.

52. On or about May 1, 2020, the SBA deposited approximately $10,000 into

SHOUGHI's TD Bank account ending in 4196. This payment constituted the EIDL advance on

SHOUGHI's fraudulent application. On or about June 16,2020,the SBA deposited approximately

$149,900 in EIDL proceeds into this same account.

53. Beginning at least on or about May 4, 2020, SHOUGHI also applied to TD Bank

for a PPP loan for Restoration Doctor, misrepresenting that Restoration Doctor had five employees

and $41,665 in monthly payroll expense.

54. During the PPP application process with TD Bank, SHOUGHI corresponded via

email with a TD Bank employee from at least May 5, 2020,to May 13, 2020,concerning initially,

SHOUGHI's providing a handwritten 2019 IRS tax document in draft form,then submission ofan

"official" first quarter 2020 IRS Form 941.

55. On or about May 13, 2020, SHOUGHI sent a typed IRS Form 941 for the first

quarter of 2020 for Restoration Doctor. This form misrepresented to TD Bank that Restoration

13
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Doctor had five employees and $158,566 in wages paid for the first quarter of 2020. In truth and

in fact, SHOUGHI had never filed any such forms with the IRS,and the number of employees and

supposed wages paid were both false.

56. On or about May 14, 2020, TD Bank deposited the PPP loan proceeds of

approximately $104,162 into SHOUGHI's TD Bank account ending in 4196.

57. On or about June 12, 2020,SHOUGHI applied to Atlantic Union Bank for another

PPP loan of approximately $104,162 on behalf of Restoration Doctor. In this application,

SHOUGHI represented to Atlantic Union Bank that Restoration Doctor had 5 employees and

$41,665 in monthly payroll expense, which were the same false figures SHOUGHI had previously

given to TD Bank. SHOUGHI also provided Atlantic Union Bank with a fabricated IRS Form

941 for each quarter of 2019, and one for the first quarter of 2020, each of which contained false

representations concerning numbers of employees and wages paid.

Blue Media Inc.

58. On or about May 5, 2020, SHOUGHI submitted and caused to be submitted an

EIDL application to the SBA on behalf of Blue Media Inc.("Blue Media"), misrepresenting to the

SBA that Blue Media had 12 employees and $158,000 in gross revenue between January 31,2019,

and January 31, 2020. In truth and in fact, Blue Media was a defunct company that did not have

any employees, revenue, or wage expenses, as SHOUGHI well knew.

59. On or about June 19, 2020,the SBA deposited approximately $68,900.00 of EIDL

proceeds into SHOUGHI's Atlantic Union Bank account ending in 0242.

60. On May 14, 2020, SHOUGHI also applied to Atlantic Union Bank for a Paycheck

Protection Program ("PPP")loan of$145,827.50 for Blue Media, misrepresenting that Blue Media

had 7 employees and $58,331 in monthly payroll expense. SHOUGHI provided Atlantic Union

Bank with IRS Forms 941 for each quarter of2019 and the first quarter of2020 in support of the

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application. The number ofemployees and the quarterly wages paid according to these forms are

shown in the chart below:

Document Number of Employees Wages Paid
01 2019 941 19 $198,642
02 2019 941 21 $201,567
03 2019 941 22 $229,311
04 2019 941 25 $206,163
01 2020 941 24 $199,642

Each of these documents was fabricated and the employees and wages paid represented on them

were materially false, as SHOUGHI well knew.

61. On May 28,2020,SHOUGHI applied to Fundbox for another PPP loan of$450,000

on behalfof Blue Media. SHOUGHI later reduced the requested loan amount to $170,883. In this

application, SHOUGHI falsely stated that Blue Media had 26 employees and an average monthly

payroll expense of $193,842. In support of the application, SHOUGHI also submitted fabricated

IRS Forms 941 for 2019 and for the first quarter of 2020, with material misrepresentations

concerning wages paid and numbers of employees.

Entities Associated With FOUZI

DAR Restoration Services LLC

62. On or about April 6, 2020, FOUZI submitted an EIDL application to the SBA on

behalf of DAR Restoration Services LLC("DAR Restoration"), misrepresenting to the SBA that

it had 15 employees and $519,000 ofgross revenue in 2019. In truth and in fact, DAR Restoration

was a defunct company that did not have any employees, revenues, or wage expenses, as FOUZI

well knew.

63. On or about May 14, 2020, FOUZI applied to Atlantic Union Bank for a PPP loan

on behalf of DAR Restoration, misrepresenting that it had 25 employees and $208,325.00 in

average monthly payroll expense. FOUZI provided Atlantic Union Bank with a fabricated IRS

Form 941 for the first quarter of 2020 in support of the application, which falsely indicated that

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DAR Restoration paid 25 employees approximately $624,975.00 in wages during the first quarter

of 2020. FOUZI also provided Atlantic Union Bank with a fabricated IRS Form 940 for 2019 in

support of the PPP loan application. With this form,FOUZI falsely represented to Atlantic Union

Bank that, in 2019, DAR Restoration paid its employees approximately $1,958,500.00 in wages.

64. Between June 22, 2020, and July 7, 2020, FOUZI also applied to Navy Federal

Credit Union ("NFCU") for a PPP loan for DAR Restoration. In this application, FOUZI

misrepresented to NFCU that DAR Restoration had 16 employees and $60,414.58 in monthly

payroll expense. FOUZI provided NFCU with a fabricated IRS Form 941 for the first quarter of

2020 in support of the application, which falsely represented that DAR Restoration paid 16

employees approximately $181,243.75 in wages during the first quarter of 2020. FOUZI also

provided NFCU with a fabricated IRS Form 940 for 2019 in support of the application, falsely

representing that, in 2019, DAR Restoration paid its employees approximately $724,975.00 in

wages.

65. FOUZI also provided NFCU with a document entitled, "2019 Payroll

Summary.pdf." This document was a portable document format("PDF") version of a Microsoft

Excel spreadsheet, which contained a list of 16 redacted social security numbers and purported

salaries associated with each social security number. FOUZI provided this document to NFCU as

supporting documentation associated with the quarterly payroll expense FOUZI had claimed on

his PPP application. In truth and in fact, this document was fabricated, and its contents were false.

66. On or about July 7,2020,NFCU deposited the PPP loan proceeds of approximately

$151,000 into FOUZI'sNFCU account ending in 8752.

Persica logistics lie

67. On or about May 5, 2020, FOUZI submitted and caused to be submitted an EIDL

application to the SBA on behalf of Persica logistics 11c ("Persica"), misrepresenting that Persica

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had 12 employees and $267,000 of gross revenue in 2019. In truth and in fact, Persica was a

defunct company that did not have any employees, revenue, or wage expenses, as FOUZI well

knew.

68. On May 14, 2020, FOUZI also applied to Atlantic Union Bank for a PPP loan of

$229,157 for Persica, misrepresenting that Persica had 11 employees and $91,663 in monthly

payroll expense. FOUZI provided a fabricated IRS Form 941 for the first quarter of 2020 in

support ofthe application, misrepresenting to Atlantic Union Bank that Persica paid 11 employees

approximately $274,989 in wages during the first quarter of 2020. FOUZI also provided Atlantic

Union Bank with an IRS Form 940 for 2019 in support of the PPP loan application,

misrepresenting to Atlantic Union Bank that, in 2019, Persica paid its employees approximately

$874,340 in wages.

Other Acts in Furtherance ofthe Conspiracy

69. After SHOUGHl had success with a fraudulent loan application, SHOUGHI

assisted Gharib and Individual K.J., respectively, in submitting their own fraudulent PPP loan

applications, using the same manner and means described above to defraud and attempt to defraud

financial institutions. SHOUGHl submitted Gharib's loan application to the lender with Gharib's

knowledge and approval, well knowing that the representations contained therein were false.

70. From approximately April 2020 through at least October 2020, SHOUGHl

participated in a group WhatsApp chat with his brothers and Farshi. While participating in this

chat, SHOUGHl sent several messages to the group by which SHOUGHl informed the group that

he had facilitated Individual K.J.'s PPP fraudulent loan application.

71. FAROUGH also assisted Gharib with a fraudulent loan application for Gharib's

shell entity. From at least June 9, 2020, to at least June 15, 2020, FAROUGH and Gharib

exchanged messages via the application WhatsApp regarding Gharib's fraudulent loan. During

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these conversations, FAROUGH coached Gharib through the process of applying for a fraudulent

loan. In a voice message, FAROUGH also instructed Gharib just to make up numbers to put on

IRS forms to submit to the lender.

72. In and around 2020, the conspirators used loans proceeds for items unrelated to

employee payroll, such as personal expenses, the acquisition of vehicles, investments, and travel.

(All in violation ofTitle 18, United States Code, Section 371.)

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COUNTS 2-10

(False Statements on Loan Applications)

THE GRAND JURY FURTHER CHARGES THAT:

67. The allegations set forth in paragraphs 1 - 23 and paragraphs 25 - 72 of Count One

of this Indictment are realleged and incorporated as if set forth herein.

68. On or about the dates indicated in the table below, in the Eastern District ofVirginia

and elsewhere, the defendant,

FAROUGH DARAKHSHAN,

for the purpose of influencing the action of financial institutions and the Small Business

Administration, in connection with applications for EIDL and PPP loans, knowingly made false

statements and reports, in that the defendant, and others aiding and abetting him:(a) overstated

annual and quarterly company employee payroll wages paid;(b) overstated annual and quarterly

company revenue; (c) overstated the number of employees each company had paid; and (d)

provided false, fictitious, and backdated IRS Forms 940 and 941, as further described below:

COUNT DATE DESCRIPTION

Flood Doctor Inc.
2 4/10/2020 EIDL application to the SBA for Flood Doctor Inc., falsely
representing number of employees and gross revenue.

3 5/14/2020 PPP loan application to Atlantic Union Bank for Flood Doctor
Inc., falsely representing number of employees, payroll expenses,
and submission of fabricated and false IRS Forms 941 and 1040.

4 6/18/2020 PPP loan application to American Express National Bank for
Flood Doctor Inc., falsely representing number of employees,
payroll expenses, and submission of fabricated and false IRS
Forms 941.

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Tyco Rd LLC
5 4/15/2020 EIDL application to the SBA for Tyco Rd. LLC,falsely
representing number of employees and gross revenue.

6 5/14/2020 PPP loan application to Atlantic Union Bank for Tyco Rd. LLC,
falsely representing number of employees, payroll expenses, and
submission of fabricated and false IRS Form 941.

Starlahs LLC
1 5/5/2020 EIDL application to the SBA for Starlabs LLC,falsely
representing number of employees and gross revenue.

8 5/14/2020 PPP loan application to Atlantic Union Bank for Starlabs LLC,
falsely representing number of employees, payroll expenses, and
submission offabricated and false IRS Form 941.

Skvfall Investments LLC
9 5/5/2020 EIDL application to the SBA for Skyfall Investments LLC,falsely
representing number of employees and gross revenue.

10 5/14/2020 PPP loan application for Skyfall Investments LLC,falsely
representing number of employees, payroll expenses, and
submission offabricated and false IRS Form 941.

(All in violation of Title 18, United States Code, Sections 1014 and 2.)

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COUNTS 11-16

(False Statements on Loon Applications)

THE GRAND JURY FURTHER CHARGES THAT:

69. The allegations set forth in paragraphs 1 - 23 and paragraphs 25 - 72 of Count One

ofthis Indictment are realleged and incorporated as if set forth herein.

70. On or about the dates indicated in the table below, in the Eastern District of Virginia

and elsewhere, the defendant,

SHOUGHIDARAKHSHAN,

for the purpose of influencing the action of financial institutions and the SmalT Business

Administration, in connection with applications for EIDL and PPP loans, knowingly made false

statements and reports, in that the defendant, and others aiding and abetting him:(a) overstated

annual and quarterly company employee payroll wages paid;(b) overstated annual and quarterly

company revenue; (c) overstated the number of employees each company had paid; and (d)

provided false, fictitious, and backdated IRS Forms 940 and 941,as further described below:

COUNT DATE DESCRIPTION
Restoration Doctor LLC
n 4/6/2020 EIDL application to the SEA for Restoration Doctor LLC,falsely
representing number of employees and gross revenue.

12 5/13/2020 PPP loan application to TD Bank for Restoration Doctor LLC,
falsely representing number of employees, payroll expenses, and
submission of fabricated and false IRS Form 941.

13 6/12/2020 PPP loan application to Atlantic Union Bank for Restoration
Doctor LLC,falsely representing number of employees, payroll
expenses, and submission of fabricated and false IRS Forms 941.

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Blue Media Inc.
14 5/5/2020 EIDL application to the SBA for Blue Media Inc., falsely
representing number of employees and gross revenue.

15 5/14/2020 PPP loan application to Atlantic Union Bank for Blue Media Inc.,
falsely representing number of employees, payroll expenses, and
submission of fabricated and false IRS Forms 941.

16 5/28/2020 PPP loan application to Fundbox for Blue Media Inc., falsely
representing number of employees, payroll expenses, and
submission offabricated and false IRS Forms 941.

(All in Violation of Title 18, United States Code, Sections 1014 and 2.)

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COUNTS 17-21

(False Statements on Loan Applications)

THE GRAND JURY FURTHER CHARGES THAT:

71. The allegations set forth in paragraphs 1 - 23 and paragraphs 25 - 72 of Count One

ofthis Indictment are realleged and incorporated as if set forth herein.

72. On or about the dates indicated in the table below, in the Eastern District of Virginia

and elsewhere, the defendant,

FOUZI DARAKHSHAN,

for the purpose of influencing the action of financial institutions and the Small Business

Administration, in connection with applications for EIDL and PPP loans, knowingly made false

statements and reports, in that the defendant, and others aiding and abetting him:(a) overstated

annual and quarterly company employee payroll wages paid;(b) overstated annual and quarterly

company revenue; (c) overstated the number of employees each company had paid; and (d)

provided false, fictitious, and backdated IRS Forms 940 and 941, as described below:

COUNT DATE DESCRIPTION
DAR Restoration Services LLC
17 4/6/2020 EIDL application to the SBA for DAR Restoration Services LLC,
falsely representing number of employees and gross revenue.

18 5/14/2020 PPP loan application to Atlantic Union Bank for DAR Restoration
Services LLC,falsely representing number of employees, payroll
expenses, and submission of fabricated and false IRS Forms 940
and 941.

19 7/7/2020 PPP loan application to Navy Federal Credit Union for DAR
Restoration Services LLC,falsely representing number of
employees, payroll expenses, and submission of fabricated and
false IRS Forms 940 and 941, and submission of"2019 Payroll
Summary.pdf' document falsely listing employee payroll
information.

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Persica losistics lie
20 5/5/2020 EIDL application for Persica logistics 11c, falsely representing
number of employees and gross revenue.

21 5/14/2020 PPP loan application for Persica logistics 11c, falsely representing
number of employees, payroll expenses, and submission of
fabricated and false IRS Forms 940 and 941.

(All in Violation of Title 18, United States Code, Sections 1014 and 2.)

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FORFEITURE NOTICE

THE GRAND JURY FURTHER FINDS PROBABLE CAUSE THAT THE PROPERTY
DESCRIBED BELOW IS SUBJECT TO FORFEITURE:

Pursuant to Federal Rule of Criminal Procedure 32.2(a), the defendants FAROUGH

DARAKHSHAN, SHOUGHI DARAKHSHAN, and FOUZI DARAKHSHAN, are hereby

notified that, if convicted of an offense alleged in Counts 1 of this Indictment,the defendants shall

forfeit to the United States, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), any

property real or personal, which constitutes or is derived from proceeds traceable to the offense.

Pursuant to Federal Rule of Criminal Procedure 32.2(a), the defendants FAROUGH

DARAKHSHAN, SHOUGHI DARAKHSHAN, and FOUZI DARAKHSHAN, are hereby

notified that, if convicted of an offense alleged in Counts 1 through 21 of this Indictment, the

defendants shall forfeit to the United States, pursuant to 18 U.S.C. § 982(a)(2)(A), any property

constituting, or derived from, proceeds the person obtained directly or indirectly, as a result ofthe

violation.

The property subject to forfeiture includes, but is not limited to, the following: sum of

money equal to at least $1,370,562.00 representing the amount of proceeds obtained as a result of

the scheme and conspiracy alleged in the Indictment.

If any property that is subject to forfeiture above, as a result of any act or omission of the

defendant,(a) cannot be located upon the exercise of due diligence,(b) has been transferred to,

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

that cannot be divided without difficulty, it is the intention of the United States to seek forfeiture

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of any other property ofthe defendant, as subject to forfeiture under Title 21, United States Code,

Section 853(p).

(In accordance with Title 18, United States Code, Sections 982(a)(2)(A) and 981(a)(1)(C);
Title 28, United States Code, Section 2461(c); Title 21, United States Code, Section 853(p);
and Rule 32.2(a), Federal Rules of Criminal Procedure.)

A TRUE BILL

• PureuOTt10Ihe L-OovcmmcntAct

FOREPERSON OF THE GRAND JURY

Jessica D. Aber
United States Attorney

By:
Russell L. Carlberg
Assistant United States Attorney

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