Indictment — United States v. Nil A. Tei, Southern District of Ohio (Doc. 28)

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An indictment in United States of America v. Nil A. Tei, Case 1:22-cr-00078-SJD, in the U.S. District Court for the Southern District of Ohio, Western Division, filed September 13, 2022 as Doc #: 28. Count One charges conspiracy to commit wire fraud affecting a financial institution under 18 U.S.C. § 1349, and later counts charge wire fraud, aggravated identity theft under 18 U.S.C. § 1028A and false statements on loan applications under 18 U.S.C. § 1014. The grand jury alleges that Tei and co-conspirators prepared PPP applications for other people with falsified Schedule C forms, submitted through BlueVine to Cross River Bank. It alleges over 60 applications, approximately 30 funded loans worth over $1.2 million, and success fees of between $1,500 and $7,000 per loan. The forfeiture allegation lists $33,390.00 in currency and bank account contents.

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“Indictment — United States v. Nil A. Tei, Southern District of Ohio (Doc. 28).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-1-22-cr-00078-dkt-28-s-d-ohio-0d59907352/, SHA-256 ec8bb8614e648dbce542c81494b1aa96b2fb7ad693c74ccb4b399fecaa838793.

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Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 1 of 13 PAGEID #: 78

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UNITED STATES DISTMCT COURT '"'""

SOUTHERNDISTRICTOF OHIO
^22 SEP 13 FH 2: 52
WESTERN DIVISION ;> !

W£STD?r'Li-!;V iJAYTOH
UNITED STATES OF AMERICA,
CASE NO. 1:22-CR-00078
Plaintiff,
JUDGE DLOTT
V.
INDICTMENT
Nil A. TEI,
18 U. S. C. § 2
Defendant. 18 U. S. C. § 1001(a)(2)
18 U. S. C. § 1028A
18 U. S. C. § 1014
18 U. S. C. § 1343
18 U. S. C. § 1349
18 U. S. C. § 1956(a)(l)(B)(i)

FORFEITUREALLEGATION

THE GRAND JURY CHARGES:

At all times material to this Indictment:

INTRODUCTION

1. The defendant. Nil A. TEI, was a resident of the Southern District of Ohio. Nil

A. TEI had ownership and control over financial accounts in the name ofProvident Home Health

Care, LLC and Troy's Home Appliances, LLC.

2. The United States Small Business Administration ("SBA") was an executive

branch agency of the United States government that provided support to entrepreneurs and small

businesses. The mission of the SBA was to maintain and strengthen the nation's economy by

enabling the establishment andviability ofsmall businesses aswell as by assisting inthe economic

recovery of communities after disasters, including through facilitating loans to small businesses

directly or through participating lenders.
Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 2 of 13 PAGEID #: 79

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

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 expanded the Economic Injury Disaster Loan ("EIDL") program

administered by the SBA to provide economic relief to businesses that were experiencing a

temporary loss of revenue due to the coronavirus pandemic. The EIDL program provided loan

assistance, including advancesup to $10,000, for eligible entities. EIDLproceeds could be used

to pay fixed debts, payroll, accounts payable and other bills that could have been paid had the

disasternot occurred; however, suchproceedswere not intendedto replace lost salesor profits or

to be used for expansion of a business or the purchase affixed assets. Unlike certain other types

of SBA-guaranteedloans, EBDLproceeds were issued directly from the United States Treasury

and applicants applied through the SBA via an online portal and application.

4. The EIDL application process, which also used certain outside contractors for

system support, collected information concerning the business andthe business owner, whichwere

used to determine loan eligibility and amounts, including information as to the gross revenues for

the business prior to January 31, 2020; the cost of goods sold; and the number of employees.

Applicants would electronically certify that the information provided was accurate and were

warned that any false statement or misrepresentation to the SBA or any misapplication of loan

proceeds couldresult in sanctions, includingcriminal penalties.

5. The CARES Act also created the Payment Protection Program ("PPP"). The PPP

wasa COVID-19pandemic reliefprogram administered bythe SBAthatprovided forgivable loans

to small businessesforjob retention and certain other expenses. The PPPpermittedparticipating

third-party lenders to approve and disburse SBA-backed PPP loans to cover payroll, fixed debts,
Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 3 of 13 PAGEID #: 80

utilities, rent/mortgage, accounts payable and other bills incurred by qualifying businesses during,

and resulting from, the COVID-19 pandemic. PPP loans were fully guaranteed by the SBA, but

the PPP loans were directly funded by SBA-approved lenders.

6. To obtain a PPP loan, a qualifyingbusiness hadto submit a PPP loan application,

which was signed by an authorized representative of the business. The PPP loan application

required the business (through its authorized representative) to acknowledge the program rules and

make certain affirmative certifications to be eligible to obtain the PPP loan, including that the

businesswas in operationand eitherhademployees for whom it paidsalariesandpayroll taxesor

paid independent contractors. A business applying for a PPP loan was required to provide

documentation showingits payroll expenses, such as filed federal income tax documents.

7. PPP loan applicationswere electronically submitted or causedto be submitted by

the borrower andreceivedthrough SBA servers located in Virginiaand Oregon. Once approved,

the business received the PPP loan proceeds via an electronic funds transfer from the third-party

lender to a financial account under the control of the business.

8. Theproceeds ofaPPP loan could beusedfor certain specified items, suchaspayroll

costs, costs related to the continuation ofgroup health care benefits, or mortgage interest payments.

The proceeds ofaPPP loan were not pemiitted to be used by the borrowers to purchase consumer

goods, automobiles, personal residences, clothing, jewelry, to pay the borrower's personal federal

income taxes, or to fund the bon-ower's ordinary day-to-day living expenses unrelated to the

specified authorized expenses.

9. BlueVine was a third-party participating non-bank lender headquartered in

Redwood City, California whose entire PPP application process was automated and conducted
Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 4 of 13 PAGEID #: 81

online. BlueVine would issue certain PPP loans under its own name and would electronically

transferotherPPPloan applicationsto its partnerbanksfor processing.

10. Cross River Bank was a federally insured financial institution as defined in

18 U. S. C. § 20 based in Fort Lee, NJ. Cross River Bank participated in the SBA's PPP as a third-

party lender, m some cases working with financial technology companies such as BlueVine to

issue PPP loans.

COUNT ONE
(Conspiracyto Commit Wire Fraud Affecting a FinancialInstitution)

11. Paragraphs 1 through 10 ofthe Indictanentare incorporatedhere.

12. From at least June2020andcontinuingthroughat leastMay 2021, in the Southern

District of Ohio and elsewhere, the defendant. Nil A. TEI, did knowingly and willfully combme,

conspire, confederate, and agree, with others known and unknown to the Grand Jury to commit

an offense againstthe United States, namely wire fraud, in violation of 18 U. S. C. § 1343. That is,

the defendant. Nil A. TEI, and his co-conspirators devised and intend to devise a scheme to

defraud and for obtaining money and property by means of materially false and fraudulent

pretenses, representations and promises, and for the purpose of executing the scheme,

used wire communications in interstate commerce which affected a financial instihition.

The Pur ose of the Cons irac

13. The purpose of the conspiracy was for the defendant, Nil A. TEI, and his co-

conspirators to unlawfully enrich themselves by obtaining PPP proceeds by false and fraudulent

pretenses and representations.
Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 5 of 13 PAGEID #: 82

IVlanner and Means of the Cons irac

14 The manner and means by which defendant, Nil A. TEI, and others known and

unknown to the Grand Jury, sought to accomplish the object of the conspiracy, included the

following:

15. The defendant. Nil A. TEI, and his co-conspirators, held themselves out as

individuals who could prepare PPP loan applications for other individuals for pay or as a favor to

friends or acquaintances.

16. It was further part of the conspiracy that the defendant, Nil A. TEI and his co-

conspirators would promote the PPP to individuals claiming that anyone would qualify regardless

of whether such individuals actually owned a small business.

17. Aspart ofthe conspiracy, the defendant. Nil A. TEI, andhis co-conspirators would

contact individuals on Facebook advertising their services.

18. It was further part of the conspiracy that the defendant, MI A. TEI, and his co-

conspirators would request the prospective applicant's name, social security number, and bank

statements, but would generally not otherwise request tax records associatedwith the individual

or purported business.

19. It was further part of the conspiracy that the defendant, Nil A. TEI, and his co-

conspirators knowingly prepared and filed PPP loan applications on behalfof other individuals

which were false and fraudulent as to material matters. For example, TEI prepared PPP

applications for other individuals which inflated the total amount ofgross income such individuals

received in tax year 2020 to fraudulently increase the PPP loan issued. In support of the

application, TEI would falsify Schedule C (Profit or Loss from Business) fonns listing false
Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 6 of 13 PAGEID #: 83

income and false expenses to substantiate the fictitious gross income figure claimed on the PPP

loan application.

20. It was further part of the conspiracy that the defendant, Nil A. TEI, and his co-

conspirators would submit and cause to be submitted, by interstate wire transmission, the false and

fraudulent PPP loan application and supporting documents to BlueVine, Cross River Bank, and

ultimately to the SBA. In furtherance ofthe conspiracy, the defendant, Nil A. TEI, and his co-

conspirators would in some cases electronically sign the PPP application in the name of the

borrower, fraudulently giving the appearance that the borrower had prepared and filed the PPP

loan application and concealing the fact that TEI and others known and unknown to the Grand

Jury hadprepared and filed the PPP loan application.

21. For example, on or about April 30, 2021, the defendant, Nil A. TEI, prepared,

electronically signed, and submitted and caused to be submitted, a PPP loan application in the

name of individual P.W. In the application, the defendant, Nil A. TEI, falsely represented, that

P.W. 's total gross income from 2020 was $119, 809. In support of the application, the defendant,

Nil A. TEI, included a fraudulent Schedule C which falsely claimed that that P.W. 's "construction

business" had gross receipts or sales of $119, 809, had advertising expenses of $500, and car and

truck expenses of $15, 792. In actuality, as the defendant. Nil A. TEI, well knew, P. W. did not

own a construction business, neither did P.W. generate the sales nor incur the expenses claimed.

BlueVine transmitted the loan application to its partner bank Cross River Bank for processing and

ultimately such application was received by the SBA. Based on the false and fraudulent

representations and submissions made by TEI, the SBA approved the loan and Cross River Bank

funded the loan in the amount of $20, 833 into an account controlled by P.W. P.W. paid the

defendant, Nil A. TEI, $5, 000 in cash for his assistance in filing the application as TEI requested.
Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 7 of 13 PAGEID #: 84

22. As part ofthe conspiracy, the defendant. Nil A. TEI, andhis-co-conspirators, filed

over 60 PPP loan applications on behalf of themselves and other individuals. Lenders funded

approximately 30 ofthese PPP loans worth a total approximate value ofover $1.2 million. For his

efforts, the defendant. Nil A. TEI, earned success fees of between $1,500 and $7,000 per loan.

TEI spent PPP proceeds for his personal benefit, including for travel, luxury goods, and foreign

remittances.

In violation of 18 U. S.C. §1349.

COUNTS TWO THROUGH FOUR
CWire Fraud Affecting a Financial Institution)

23. Paragraphs 1 through 22 ofthe Indictment are realleged as if fully stated herein.

24. From at least June 2020 and continuing through at least May 2021, the defendant,

Nil A. TEI, devised and intended to devise a scheme and artifice to defraud and to obtain money

andproperty by means ofmaterially false andfraudulent pretenses, representations, andpromises,

which scheme is described above, and for the purposes of executing and attempting to execute

such scheme and artifice to defraud, on the dates listed below, did knowingly transmit and caused

to be transmitted in interstate commerce by means of wire communications, certain signals,

signs, and sounds, which affected a financial institution namely:

Count Date of Wire Description of Wire Transmission FinancialInstitution
Transmission Affected
on or about

4/19/2021 ransmission of the PPP application Cross River Bank
'n the name ofA.H. from TEI to
lueVine through servers outside o
he Southern District of Ohio.
4/22/2021 ransmission of the PPP application Cross River Bank
in the name of S.B. from TEI to
lueVine through servers outside o
he Southern Disb-ict of Ohio.
Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 8 of 13 PAGEID #: 85

4 4/30/2021 ransmission of the PPP application Cross River Bank
'n the name ofP.W. from TEI to
lueVine through servers outside o
he Southern Disti-ict of Ohio.

All in violation of 18 U.S.C. §§ 1343 and 2.

COUNTS FWE THROUGH SEVEN
(Aggravated Identity Theft)

25. On or about the following dates, in the Southern District of Ohio and elsewhere,

the defendant. Nil A. TEI, didknowingly transfer and use, without lawful authority, a means of

identification of another person during and in relation to a felony violation enumerated in

18U.S.C. § 1028A(c), to wit: Wire Fraud Affecting a Financial Institution, in violation of

18 U. S. C. §§ 1343 and 2, knowing that the means of identification belonged to another actual

person, as specifically identifiedbelow:

Count Date Wire Transmission Initials Means of Identification
(on or of Transferred and Used
about) Actual
Person
Name, social security
4/19/2021 Transmission of the PPP application A. H.
number, electronic
in the name ofA.H. from TEI to
signature
BlueVine and affecting Cross River
Bank through servers outside of the
Southern District of Ohio.
Name, social security
4/22/2021 Transmission of the PPP S.B.
number, electronic
application in the name of S.B.
signature
from TEI to BlueVine and
affecting Cross River Bank
through servers outside of the
Southern District of Ohio.
4/30/2021 Transmission of the PPP P.W. Name, social security
number, electronic
application in the name ofP.W.
signature
from TEI to BlueVine and
affecting Cross River Bank
through servers outside of the
Southern District of Ohio.

All in violation of 18 U.S.C. § 1028A.
Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 9 of 13 PAGEID #: 86

COUNT EIGHT
(False Statement on a Loan and Credit Application)

26. On or about March 21, 2021, in the Southern District of Ohio and elsewhere,

the defendant. Nil A. TEI, knowingly made, and caused to be made, a false statement or

report for the purpose of influencing the action of Cross River Bank, the accounts of which

are insured by the Federal Deposit Insurance Corporation, in connection with a loan

application, that is, the defendant submitted on behalfof T. A. an application for a loan under

the Payment Protection Prograni that contained false iiiformation, in that the defendant. Nil

A. TEI, claimedthat T.A. 's business had an average monthly payroll of $8,327.00, when in

truth and in fact, as the defendant. Nil A. TEI, well knew, T. A. 's business did not generate

the monthly payroll amount claimed.

In violation of 18 U. S.C. §§ 1014, 2.

COUNT NINE
(False Statement on a Loan and Credit Application

27. Onor aboutApril 19, 2021, in the SouthernDistrictofOhioandelsewhere,the

defendant. Nil A. TEI, knowingly made, and causedto be made, a false statement or report

for the purpose of influencing the action of Cross River Bank, the accounts of which are

insured by the Federal Deposit Insurance Corporation, in connection with a loan application,

that is, the defendant submitted on behalf of A. H. an application for a loan under the Payment

Protection Program that contained false information, in that the defendant, Nil A. TEI,

claimed that A.H.. 's business had a total amount of gross income of $135,780.00 in 2020,

when in truth and in fact, as the defendant. Nil A. TEI, well knew, A.H. 's business did not

generatethe gross income amount claimed.

In violation of 18 U. S.C. §§ 1014, 2.
Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 10 of 13 PAGEID #: 87

COUNT TEN
(False Statement on a Loan and Credit Application

28. On or about April 22, 2021, in the Southern District of Ohio and elsewhere, the

defendant. Nil A. TEI, knowingly made, and causedto be made, a false statement or report

for the purpose of influencing the action of Cross River Bank, the accounts of which are

insured by the Federal Deposit Insurance Corporation, in connection with a loan application,

that is, the defendantsubmitted on behalfof S.B. an applicationfor a loanunderthe Payment

Protection Program that contained false information, in that the defendant, Nil A. TEI,

claimedthat S.B. 's businesshadatotal amount ofgross income of$102,645. 00 in2020,when

in truth and in fact, as the defendant. Nil A. TEI, well knew, S.B. 's business did not generate

the gross income amount claimed.

In violation of 18 U.S.C. §§ 1014, 2.

COUNT ELEVEN
(False Statement on a Loan and Credit Application

29. On or about April 30, 2021, in the Southern District of Ohio and elsewhere, the

defendant, Nil A. TEI, knowingly made, and causedto be made, a false statement or report

for the purpose of influencing the action of Cross River Bank, the accounts of which are

insured by the Federal Deposit Insurance Corporation, in connection with a loan application,

that is, the defendantsubmittedon behalfofP.W. an applicationfor a loanunderthePayment

Protection Program that contained false information, in that the defendant, Nil A. TEI,

claimed that P. W. had a total amount of gross income of $ 119, 809. 00 in 2020, when in truth

and in fact, as the defendant. Nil A. TEI, well knew, P. W. 's business did not generate the

gross income amount claimed.

In violation of 18 U.S.C. §§ 1014, 2.

10
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COUNT TWELVE
(False Statementor Representation to an Agency ofthe United States)

30. On or about July 22, 2020, in the Southern District of Ohio and elsewhere, the

defendant, Nil A. TEI, did willfully and knowingly make a materially false, fictitious, and

fraudulent statement and representation in a matter within thejurisdiction ofthe executive branch

of the government of the United States, by falsely stating in an Economic Injury Disaster Loan

(E1DL)applicationto the SmallBusinessAdministration(SBA) thatthebusinessProvidentHome

Health Care LLC had earned gross revenues over the last 12 months of $230,480.00 and had 13

employees. These statements or representations were false, because asthe defendant. Nil A. TEI,

thenandthereknew,the businesshadnot earnedgrossrevenues of$230,480.00,nor didit employ

13 individuals.

In violation of 18 U. S. C. § 1001(a)(2).

COUNT THIRTEEN
(False Statement or Representation to an Agency ofthe United States)

31 On or about, July 8, 2020, in the SouthernDistrict of Ohio and elsewhere, the

defendant, Nil A. TEI, did willfully and knowingly make a materially false, fictitious, and

fraudulent statement and representation in a matter within the jurisdiction of the executive

branch of the government of the United States, by falsely stating in an Economic Injury

Disaster Loan (EIDL) application to the Small Business Administration (SBA) that his

business Troy's Home Appliances, LLC had 12 employees and his gross revenues for the 12

months prior to the COVID-19disasterwas $125,000.00. Thesestatements orrepresentations

were false, because as the defendant. Nil A. TEI, then andthere knew, the businesshadnot

earned gross revenues of $125, 000. 00, nor did it employ 12 individuals.

In violation of 18 U. S. C. § 1001(a)(2).

11
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COUNT FOURTEEN
(Money Laundering)

32. Between January 18, 2021 and January 19, 2021 in the Southern District of

Ohio, the defendant. Nil A. TEI, did knowingly conduct or attempt financial transactions

affecting interstate and foreign commerce which involved the proceeds ofa specified unlawful

activity, namely, wire fraud in violation of 18 U. S. C. § 1343, that is, he purchased four money

orders in the amounts of $1, 000. 00, $500. 00, $1, 000. 00, and $195. 00 in cash at a grocery store

in Cincinnati, Ohio, representing fees obtained from fraudulently preparingPPP applications

and subsequently deposited $2, 695. 00 in money orders into his PNC Bank account ending in

6539, knowing that the transactions were designed in whole or in part to conceal or disguise

the nature, the location, the source, the ownership, and the control of the proceeds of the

specified unlawful activity.

In violation of 18 U. S.C. § 1956(a)(l)(B)(i).

FORFEITURE ALLEGATION ONE

Upon conviction of any of the offenses set forth in Counts One through Four and Eight

through Eleven of this Indictment, the defendant, Nil A. TEI, shall forfeit to the United States,

pursuant to 18 U. S. C. § 982(a)(2)(A), any property constituting, or derived from, proceeds

obtained directly or indirectly, as a result of such violation(s), including but not limited to:

a. A sum ofmoney equalto the amount ofproceedsthe defendantobtainedas
a result ofthe offense(s);

b. Thirty-Three Thousand Three Hundred Ninety and 00/100 Dollars
($33,390. 00) in United States Currency;

c. Contents of US Bank Account No. x5824 in the Name of Troy's Home
Appliances, LLC;

d. Contents of US Bank Account No. x6482 in the Name ofNii A. Tei;

12
Case: 1:22-cr-00078-SJD Doc #: 28 Filed: 09/13/22 Page: 13 of 13 PAGEID #: 90

e. Contents of US Bank Account No. x9251, in the Name of Nil A. Tei;

f. Contents of Bank of America Account No. x3700 in the Name of Provident
Home Health Care LLC; and

g. Two (2) Breitling Watches.

FORFEITURE ALLEGATION TWO

Upon conviction of the offense set forth in Count Fourteen of this Indictment, the

defendant. Nil A. TEI, shall forfeit to the United States, pursuant to 18 U. S.C. § 982(a)(l), any

property, real or personal, involved in such offense, and any property traceable to suchproperty

SUBSTITUTE ASSETS

If any ofthe property described above, as a result of any act or omission ofthe defendant:

a. cannotbe located uponthe exerciseofdue diligence;

b. has been transferred or sold to, or deposited with, a third party;

c. has beenplacedbeyondthejurisdiction ofthe court;

d. has been substantially diminished in value; or

e. hasbeencommingledwithotherproperty whichcannotbe dividedwithout

difficulty,

it is the intent of the United States, pursuant to 21 U. S.C. § 853(p), as incorporated by 18 U. S. C.

§ 982(b)(l), to seekforfeiture ofany otherproperty ofthe defendant, up to thevalue oftheproperty

described above.

A TRUE BILL.

FORE ERSON
KENNETH L. PARKER
UNITED STATES ATTORNEY

EBUNOLUWAA. TAIWO
ASSISTANT UNITED STATES ATTORNEY

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