Indictment — United States v. Kyle McLemore, Eastern District of Pennsylvania (Document 1)

Summary

A grand jury Indictment in United States v. Kyle McLemore, Case 2:21-cr-00431-CMR, in the United States District Court for the Eastern District of Pennsylvania, filed under seal November 4, 2021. It charges one count of mail fraud and two counts of theft of public money. Count One alleges that McLemore, who was incarcerated until being paroled on May 15, 2020, filed a PUA application falsely stating he had lost his job due to the COVID-19 pandemic and obtained $14,555 in PUA benefits on a mailed debit card. Count Two alleges that McLemore's EIDL application claimed a tobacco business with eleven other employees and $400,000 in sales, and falsely denied being on parole, yielding a $10,000 advance and a later deposit of approximately $114,900 that the SBA was able to reverse after part was spent. The forfeiture notice seeks $24,555.

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“Indictment — United States v. Kyle McLemore, Eastern District of Pennsylvania (Document 1).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-2-21-cr-00431-dkt-1-e-d-pa-e94e3576ca/, SHA-256 baaf65b51d5d377bf8a290912f3a2b4a66fa7bc31a01765adeb2e450111641cf.

Full text

Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 1 of 14

Filed Under Seal
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA CRIMINAI NO.
v. DATE FII,ED:

VIOLATIONS:
KYLE MCLEMORE 18 U.S.C. $ 1341 (mail fraud - I count)
l8 U.S.C. $ 641 (theft of public money -
2 counts)
Notice of forf'eiture

INDICTMENT
COUNT ONE

THE GRAND JURY CHARGES THAT:

At all times material to this indictment:

INTRODUCTION

I . On March 13 , 2020 , the President declared the ongoing COVID- 1 9

pandemic to be an emergency under Section 501(b) ofthe Robert T. Stafford Disaster Relief and

Emergency Assistance Act.

2. On March 27 , 2020, the Coronavirus Aid, Reliet and Economic Security

Act (CARES Act) was signed into law. The CARES Act created the pUA (pandemic
Unemployment Assistance) program, which provided unemployment benefits to individuals not

eligible for regular unemployment compensafion or extended unemployment benefits.

3. The PUA program was administered by the various states, including the

Commonwealth of Pennsylvani4 but its benefits were frrnded by the federal govemment. In

Pennsylvani4 the Pennsylvania Department of Labor and Industry (pA DLI) administered the
Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 2 of 14

PUA program, on behalf of the United States Department of Labor, which was responsible for

overseeing the PUA program.

4. PA DLI required that a PUA claim be made online via the PUA website,

https://pua.benefits.uc.pa.gov. The applicant was required to enter personal identification

information (PII), including name, date of birth, social security number, email address, telephone

number, and a physical address. An applicant was also required to answer a series ofquestions that

enabled the PA DLI to determine the applicant's eligibility and payment amoutrt. Once awarded

PUA benefits, the applicant was required to submit weekly certifications showing continuing

eligibility. PA DLI required that the application for PUA benefits as well as the weekly

certifications be made online.

5. While each state administered its own PUA program, the application used

by each state was a standard online application form. The form consisted of27 different sections

including a range ofquestions within each section. Some ofthe questions asked for the applicant's

PII and biographical information, while other questions dealt with the applicant's eligibility for

the program and work history. An applicant was required to provide their current employment

status and answer if they were able to accep ajob ifoffered. Ifthe applicant was unable to accept

ajob, the applicant was required to provide a reason for not being able to accept ajob.

6. The applicant was also required to disclose if they were unemployed as a

result ofa pandemic or major disaster. If the applicant's employment had not been affected as a

result of a pandemic or major disaster, the applicant was not eligible for PUA benefits. If the

applicant's employment had been affected by a pandemic or major disaster, the application was

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Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 3 of 14

required to note in which state the applicant was affected by the pandemic or major disaster and

the nature ofthe pandemic or major disaster.

7. In the 'self-certification' section of the application, the applicant was

required to answer questions regarding the nature and impact ofa pandemic or major disaster on

the applicant's employment status. First, the applicant was required to disclose the pandemic or

major disaster which affected the applicanl's employment. An applicant was only eligible to

receive weekly PUA benefits if the applicant was unemployed for reasons related to the COVID-

19 pandemic. Second, the applicant was required to disclose the date ofthe applicant's last day of

work. Finally, ifthe applicant quit theirjob due to COVID-19, the applicant was required to supply

a reason for quitting.

8. As to all of these preceding questions, the applicant was required to

"acknowledge that I rmderstand that making the certification is under penalty of perjury and

intentional misrepresentation in self-certifuing that I may fall in one or more of these categories is

fraud."

9. The applicant was also required to complete another certification, under

penalty ofperjury, that ifoffered ajob, the applicant would be able to accept it. An applicant was

required to read and understand the PUA Compensation Handbook, which stated that any eamings

must be reported for each week a person works. The applicant was also required to certifr once

again as to the application that "all furformation is true and complete" and that if the applicant

provided false information the applicant could be subject to criminal prosecution.

10. IfPA DLI or another state's administrative agency approved an application

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Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 4 of 14

for PUA benefits, the applicant was then eligible to receive benefits in the form of checks,

electronic fund transfers, or debit cards, and the checks and debit cards were mailed via the United

States Postal Service to the physical address that appeared on the application. When a state agency

approved an applicant's eligibility, the agency established the applicant's period of benefits,

amount of weekly benefit, and maximum total benefit amormt. However, even after this occurred,

the applicant was not able to receive the benefits unless the applicant performed the appropriate

weekly certifications.

11. The recipient ofPUA benefits received a unique applicant number that
corresponded to the applicant's initial application and weekly certifications. Payments for PUA

were based on a seven-day period, from Sunday through Saturday. Thus, the benefits recipient was

required to certi$ every seven days that he or she: a) was ready, willing and able to work each

day; b) was seeking full time employment; c) did not refuse any job offers or refenals; and d) had

reported any employment during the week and the gross pay or other payments received. The

weekly certification was required to be completed in a timely manner. A delay in the weekly

certification could result in a delay or denial of further payments.

12. Until May 15,2020, defendant KYLE MCLEMORE was incarcerated
under the custody the Permsylvania Departrnent ofCorrections. On May 15,2020, defendant

MCLEMORE was paroled and released from custody.

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Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 5 of 14

THE SCIIEME TO DEF'RAUI)

13. From in or about March 2020, to on or about February 27,2021, nthe
Eastern District of Pennsylvani4 and elsewhere, defendant

KYLE MCLEMORE

devised and intended to devise a scheme to defraud state and federal agencies, and to obtain

money and property, specifically PUA benefits, by means offalse and fraudulent pretenses,

represenlations. and promises.

MAFTNER AI\D MEANS

It was part of the scheme tlat:

14. On May 21,2020, defendant KYLE MCLEMORE submiued or caused to
be submitted a PUA application in the state of Pennsylvania. On the application, defendant

MCLEMORE falsely stated that he had lost his job due to the COVID-I9 pandemic and that his

last day of work was on March 27,2020. These statements were false as defendant MCLEMORE

was incarcerated on March 27,2020, and as a result ofhis incarceration, did not lose his job due

to the COVID-I9 pandemic.

15. After he was approved for PUA benefits, defendant KYLE MCLEMORE
submitted or caused to be submitted weekly certifications to the PUA website certifing that he

was ready and able to accept a job if offered. On June 16, 2020, defendant MCLEMORE submitted

or caused to be submitted numerous certifications falsely stating that from the period of March 28,

2020 to May 15,2020, he was ready and able to accept a job if offered. These statements on the

weekly certifications for this period were false as defendant MCLEMORE was incarcerated fiom

March 28, 2020 to May 15, 2020 and would have not been able to accept ajob.

)
Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 6 of 14

16. Thereafter, from June 23,2020 to September 5, 2020, defendant KYLE
MCLEMORE performed weekly certifications which allowed him weekly benefits tied to his

initial false application. As a result ofhis application and weekly certifications, defendant

MCLEMORE obtained $14,555 in PUA benefits.

THE MAILING

17. The benefits tied to defendant KYLE MCLEMORE's application and
weekly certifications were loaded onlo a US Bank debit card. This card was mailed to the address

on the application, on E. Chelton Avenue, Philadelphia Pennsylvania.

18. On or about May 26,2020, in the Eastem District of Pennsylvani4 and
elsewhere, having devised and intending to devise this scheme described above, the defendant,

KYLEMCLEMORE,

for the purpose ofexecuting the scheme, knowingly caused to be delivered by United States mail,

according to the directions thereon, a US bank debit card mailed from Shoreview, Minnesota or

lndianapolis, Indian4 addressed to Kyle Mclemore at E. Chelton Avenue, Philadelphia,

Pennsylvania.

In violation of Title 18, United States Code, Section 1341.

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Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 7 of 14

COUNT TWO

THE GRAND JURY FURTHER CHARGES THAT:

At all times material to this indictment:

EIDL PROGRAM

l. On March 27,2020, the Coronavirus Ai4 Relief, and Economic Security

Act (the CARES Act) (Pub. L. 116-136) became law and provided emergency assistance for

individuals, families, and businesses affected by the coronavirus pandemic. The CARES Act

provided funding for multiple programs to aid businesses affected by the pandemic, including the

Economic Injury Disaster Loan @IDL) program. The EIDL program provided low-rate emergency

loan options for struggling businesses for amounts up to $500,000. This program is administered

by the Small Business Administration (SBA). Applications for the EIDL program are made

through an online SBA portal.

2. As part of the application process, an applicant must submit information

about the applicant's business. This information includes, amongst other categories, the

organization type of the business, gross revenues for the twelve months preceding January 31,

2020, cost of goods sold for the twelve months preceding January 31, 2020, nd the number of

employees working at tle business.

3. An applicant who submits an application for the EIDL prcgftrm must also

certifr that the owner has not been convicted ofa felony committed during and in connection with

a riot or civil disorder or other declared disaster, and that the owner is not presently subject to an

indictment, criminal information, arraignment, or other criminal charges. An applicant must also

certif that the owner within the last five years has not been convicted ofa felony or placed on any

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Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 8 of 14

form ofprobation or parole.

4. As part of the EIDL application, an applicant can also request an emergency

advance of$10,000. If an applicant qualifies for this proglam, the SBA will pay this emergency

advance within three days ofthe applicant submitting the information. To receive this advance and

the r.rltimate loan, the applicant must enter bank account information to identil) the account to

receive the deposit of the advance funds and the loan.

5. Before an applicant can submit the application, the applicant must certift,

under the penalty of perjury under the laws of the United States, that the information on the

application is fue and correcl.

6. In addition to submitting the application, before applicants can receive the

final disbursement, the applicant must sign a Loan Authorization and Agreement (I-A&A) with

the SBA. This LA&A outlines for the applicant all applicable provisions ofthe loan including the

loan amount and rate, repayment schedule, collateral and personal guaranty (ifapplicable), record

keeping requirement, and permissible uses ofthe loan, The loan cannot be disbursed unless the
*all
applicant executes the LA&A. As part of the LA&A, the applicant must again certifr that

representations in the Borrower's Loan application (including all supplementary submissions) are

true, correct and complete and are offered to induce SBA to make this loan."

7 . As outlined in the LA&A as well as the initial application, the only

permissible use ofthe loan is to'hse all proceeds ofthis Loan solely as working capital to alleviate

economic injury caused by disaster occurring in the month of January 31,2020 and continuing

thereafter and to pay Uniform Commercial Code (UCC) lien filing fees."

8
Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 9 of 14

MCLEMORE'S FRAUDT]LENT LOAhI

8. On or about June 25, 2020, defendant KYLE MCLEMORE submitted an

EIDL program application to the SBA. On the application, defendant MCLEMORE falsely stated

that he owned a sole proprietorship that sold tobacco located on E. Chelton Avenue, Philadelphi4

Pennsylvani4 his residential address. Defendant MCLEMORE falsely stated that a) his business

had eleven other employees; and b) that in the twelve months prior to the pandemic his business

had $400,000 in sales and $150,000 in cost of goods sold. For the business's tax ID number,

defendant MCLEMORE listed his social security number. Defendant MCLEMORE also falsely

stated on the application that within the past five years he had not been on probation or parole, when

in fact, he was on parole on June 25, 2020, having just been paroled on May 15, 2020. Defendant

MCLEMORE opted on the application to be considered for an immediate $10,000 emergency

advance. For deposit information, defendant MCLEMORE provided his Nary Credit Federal Union

account ending in 0155. At the end of the application, under the penalty of perjury under the laws

of the United States, defendant MCLEMORE certified that all of this information was true and

correct.

9. As a result of defendant KYLE MCLEMORE's false application, on or

about June 29,2020, the SBA deposited the $10,000 advance into his Nary Federal Credit Union

account ending in 0155. Defendant MCLEMORE did not use any of the $10,000 advance for a

proper business purpose under the loan as specified in the LA&A and on the application. Rather,

defendant MCLEMORE spent the $10,000 by withdrawing large cash amounts at ATMs,

transferring $1,500 to his sister, and making multiple debit card transactions.

10. After defendant KYLE MCLEMORE submitted his application and

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Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 10 of 14

received his emergency advance, defendant MCLEMORE'S ultimate loan disbursement was put on

hold due to a lack ofa verification ofhis business. The SBA requested further verification of the

existence ofhis business through a license or incorporation documents. On or about July 9,2020,

defendant MCLEMORE submitted a forged business license from the City of Philadelphia for

verification. The SBA accepted this as verification, allowing defendant MCLEMORE's application

to be approved and the loan to be disbursed to defendant MCLEMORE.

11. On or about July 13,2020, the SBA deposited approximately $114,900 into
defendant KYLE MCLEMORE's Nary Federal Credit Union acc6u11 gnding in 0155. The SBA

was eventually able to reverse this deposit. However, before the SBA was able to do so, defendant

MCLEMORE spent a portion of the loan proceeds on non-business purposes, including large cash

withdrawals at ATMs in Philadelphia and Atlantic City, personal car payments, another transfer to

his sister, and a $10,000 check to another person with whom defendant MCLEMORE discussed

making fraudulent PUA and EIDL fraud schemes.

12. From on or about ltne 25,2020, to on or about July 23, 2020, in the Eastem
District of Pennsylvania, and elsewhere, defendant

KYLEMCLEMORE

did knowingly steal and convert to his use or the use ofanother, money or a thing of value ofthe

United States, specifically, Economic Injury Disaster Loan @IDL) funds under the care of the

United States Small Business Administration, in a value exceeding $ I ,000.

In violation of Title 18, United States Code, Section 641.

10
Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 11 of 14

COUNT THREE

TIIE GRAI\D JI]RY FI]RTHER CIIARGES THAT:

At all times relevant to this indictrnent:

l. The allegations in paragraphs I through 12 and 14 through 17 ofCount

One are incorporated herein.

2. From on or about May 21,2020, to on or about Februry 27,2021, inthe

Eastem District of Pennsylvani4 and elsewhere, defendant

KYLEMCLEMORE

did knowingly steal and convert to his use or the use of another money or a thing ofvalue of the

United States, specifically, Pandemic Unemployment Assistance funds under the care of the

United States Department of Labor, in a value exceeding $ I ,000.

In violation ofTitle 18, United States Code, Section 641.

I1
Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 12 of 14

NOTICE OF FORFEITURE

THE GR{ND JURY FURTHER CHARGES THAT:

At all times relevant to this indictment:

1. As a result ofthe violations ofTitle 18, United States Code, Sections 641

and l341as set forth in this indictment, defendant

KYLE MCLEMORE

shall forfeit to the United States of America any property that constitutes, or is derived from,

proceeds traceable to the commission of such offenses, including, but not limited to, the sum of

$24,555.

2. Ifany ofthe property subject to forfeiture, as a result ofany act or omission

ofthe defendant:

(a) cannot be located upon the exercise ofdue diligence;

O) has been transferred or sold to, or deposited with, a third party;

(d) has been substantially diminished in value; or

(e) with other propertv which cannot be divided

#:,"atffled
it is the intent of the United States, pursuant to Title 28, United States Code, Section 2461(c)

incorporating Title 21, United States Code, Section 853(p), to seek forfeiture of any other

property ofthe defendant up to the value of the property subject to forfeiture.

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Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 13 of 14

All pursuant to Title 28, United States Code, Section 2461(c) and Title 18, United

States Code, Section 98 1(a)(1)(C).

A TRUE BILL:

G JURYFOREPERSON

1'r-(-

JENNIFER ARBITTIER WILLIAMS
ACTING UNITED STATES ATTORNEY

13
No.__________
UNITED STATES DISTzuCT COURT
Eastem District of Pennsylvania
Criminal Division

THE UNITED STATES OF AMI,RICA
vs,
KYLT] MCLEMORE

INDICTMENT
Counts
18 U.S.C. $ 1341 (mail fraud 1 count)
-
18 U.S.C. $ 641 (theft of public money - 2 counts)

Notice of forfeitu rc

Filed in open court this duy,
of A.D.20

CIerk

Bril, $
Case 2:21-cr-00431-CMR Document 1 Filed 11/04/21 Page 14 of 14

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