Indictment — United States v. Jason Carnell O'Daffer, Eastern District of Washington (ECF No. 1)

Summary

An indictment filed October 18, 2022 as ECF No. 1 in United States v. Jason Carnell O'Daffer, Case 2:22-cr-00147-MKD, in the U.S. District Court for the Eastern District of Washington, charging wire fraud (Counts 1-2) and false, fictitious, or fraudulent claims under 18 U.S.C. § 287 (Count 3). The grand jury charges that from about November 9, 2021 through about May 9, 2022 the defendant obtained $117,300.00 in EIDL funds for Chelan Douglas Appraisal Services by inflating its 2020 gross revenue to $106,589.00 after reporting $61,840.00 to the state, and later sought a Targeted EIDL Advance. It states the funds were deposited on December 1, 2021 and used for personal purposes, including paying off a loan for a recreational vehicle. Forfeiture allegations follow.

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Case 2:22-cr-00147-MKD ECF No. 1

Vanessa R. Waldref

United States Attorney

Eastern District of Washington
Tyler H.L. Tornabene

Dan Fruchter

Assistant United States Attorneys
Post Office Box 1494

Spokane, WA 99210-1494
Telephone: (509) 353-2767

filed 10/18/22 PagelD.1 Page 1 of 13

. 9. DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

OCT 1 8 2029

SEAN F McAvoy, CLERK

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF WASHINGTON

UNITED STATES OF AMERICA,
Plaintiff,
V.
JASON CARNELL O’DAFFER,

Defendant.

The Grand Jury charges:

2:22-CR-00147-MKD
INDICTMENT

Vio: 18U.S.C. § 1343
Wire Fraud
(Counts 1-2)

18 U.S.C. § 287
False, Fictitious, or Fraudulent

Claims
(Count 3)

18 U.S.C. § 981, 28 U.S.C. §
2461
Forfeiture Allegations

GENERAL ALLEGATIONS
l. At times relevant to this Indictment, the Defendant, JASON
CARNELL O’DAFFER, was residing in Wenatchee, Washington, in the Eastern

District of Washington.

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2. The Coronavirus Aid, Relief, and Economic Security Act (CARES
Act) was a federal law enacted on March 27, 2020, designed to provide emergency
financial assistance to the millions of Americans who were suffering the economic
effects caused by the COVID-19 pandemic. One source of relief provided by the
CARES Act was the Economic Injury Disaster Loan (EIDL) program. EIDL is an
Small Business Administration (SBA) program that provides low-interest funding
to eligible small businesses, renters, and homeowners affected by declared
disasters.

3. In order to obtain an EIDL and advance, a qualifying business must
submit an application to the SBA and provide information about its operations,
such as the number of employees, gross revenues for a 12-month period preceding
the disaster, and.cost of goods sold in the prior 12-month period. The applicant
must also certify that all the information in the application is true and correct to the
best of the applicant’s knowledge, and agree in the required Loan Authorization
and Agreement that the EIDL funds will be used solely as working capital to
alleviate economic injury caused by disaster.

4. The amount of an EIDL, if the application is approved, is determined
based, in part, on the information provided in the application about employment,
revenue, and cost of goods, as set forth above. Any funds issued under an EIDL or
advance are issued directly by the SBA. EIDL funds must be used for appropriate
working capital expenses such as payroll, sick leave, production costs, and
business obligations, such as debts, rent, and mortgage payments.

5. EIDL applications are received in cloud-based platforms. The location
of the server through which the EIDL application is submitted is based on the date
the application was processed by SBA and the application number. During the time

period relevant to this Indictment, all EIDL applications and supporting documents

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were received in a Microsoft cloud-based platform using a Rapid Finance
application, through SBA servers located in Des Moines, Iowa.
The Scheme

6. The allegations in paragraphs 1 through 5 of this Indictment are
incorporated as though realleged herein.

7. Beginning no later than on or about November 9, 2021, and
continuing through at least on or about May 9, 2022, in the Eastern District of
Washington and elsewhere, Defendant devised and intended to devise a scheme to
defraud the SBA, and to obtain money and property by means of materially false
and fraudulent pretenses, representations, and promises, and to convert the
proceeds of the fraud for personal use.

8. Specifically, Defendant applied for and, on or about December 1,
2021, received, $117,300.00 in EIDL funds, using false and fraudulent information
about his purportedly active company, Chelan Douglas Appraisal Services, with
the intent to defraud, steal, and convert the proceeds of the EIDL for Defendant’s
personal use and without any intent to use the proceeds thereof for any authorized
purpose, or any intent to repay the EIDL.

9. Upon his receipt of the EIDL funds and through at least May 9, 2022,
Defendant knowingly and intentionally converted the EIDL funds for his personal
use through various transactions from the below described business checking
account for Chelan Douglas Appraisal Services and the below described consumer
checking account, including but not limited to Defendant’s purchase of a personal
recreational vehicle (RV).

10. Additionally, as part of his scheme to defraud the SBA, after he
fraudulently obtained $117,300.00 in EIDL funds through his initial fraudulent
application, Defendant fraudulently sought additional EIDL funding by applying

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for a Targeted EIDL Advance Loan and Supplemental Targeted Advance Loan.

On or about December 24, 2021, Defendant used false and fraudulent information
about his purportedly active company, Chelan Douglas Appraisal Services, with
the intent to defraud, steal, and convert the proceeds of the Targeted EIDL
Advance Loan and Supplemental Targeted Advance Loan for Defendant’s personal
use and without any intent to use the proceeds thereof for any authorized purpose,
or any intent to repay the Targeted EIDL Advance Loan and Supplemental
Targeted Advance Loan.

Manner and Means

It was part of this scheme that:
Economic Injury Disaster Loan Application No. 3324752705
11. Onor about November 9, 2021, Defendant applied for an EIDL by
submitting application number 3324752705 to the SBA under the name of his

purportedly active business, Chelan Douglas Appraisal Services, for EIDL No.
25694491-02. Defendant signed for and submitted the final application on or
about November 14, 2021.

12. Onor about November 27, 2021, Defendant electronically signed a
Loan Authorization and Agreement for EIDL Application No. 3324752705,
agreeing that he would use the proceeds of the EIDL solely as working capital for
his business to alleviate economic injury. Defendant agreed to be bound by the
stated terms and conditions during the term of the EIDL. Defendant further
certified, under penalty of perjury, that he was authorized to apply for and obtain a
disaster loan in connection with the effects of the COVID-19 emergency. A
properly signed Loan Authorization and Agreement is required prior to any

disbursement of EIDL funds.

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13. Pursuant to the Loan Authorization and Agreement, a third-party UCC
handling charge of $100 was to be deducted from Defendant’s EIDL amount of
$117,400.00 prior to disbursement.

14. The representations and certifications made by Defendant on his
EIDL application were materially false and fraudulent and Defendant knew they
were false and fraudulent at the time they were made. As Defendant well knew,
Chelan Douglas Appraisal Services had ceased doing business by or before
November 9, 2021, when Defendant applied for the EIDL for Chelan Douglas
Appraisal Services. In fact, while Chelan Douglas Appraisal Services had
apparently functioned as a sole proprietorship through 2020, in 2021 it ceased
doing business, and at the time of Defendants’ EIDL application, Defendant, as the
only appraiser for Chelan Douglas Appraisal Services, could not lawfully conduct
appraisals in Washington nor engage in the business of appraising in Washington.

15. In Washington, pursuant to Revised Code of Washington (RCW)
18.310.060, a Certified General Appraiser License is required to lawfully engage
or attempt to engage in business as an appraisal management company, to engage
or attempt to perform appraisal management services, or to advertise or hold
oneself out as so engaging or conducting appraisals. Similarly, pursuant to RCW
18.310.110, any employee of an appraisal management company or any contractor
working in the capacity of an appraiser for an appraisal management company
must be licensed or certified by the state of Washington. Additionally, pursuant to
RCW 18.140.220, any person acting as a state-certified or state-licensed real estate
appraiser without a currently valid certificate, license, or registration, is guilty of a
misdemeanor.

16. At the time that Defendant signed and submitted EIDL application
number 3324752705, Defendant’s Washington Certified General Appraiser’s

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license had expired as of October 23, 2021. During all times relevant to this
Indictment, Defendant did not apply for a new appraisers’ license.

17. WaFd Bank business checking account ending in 7626 is the only
known bank account for Chelan Douglas Appraisal Services (herein “the business
checking account”). Between July 2020 and November 2020, the business
checking account for Chelan Douglas Appraisal Services had beginning and
ending monthly balances ranging between $43,714.21 and $86,513.08. However,
a year later, between July 2021 and November 2021, the business checking
account for Chelan Douglas Appraisal Services had beginning and ending monthly
balances ranging between $34.81 and $7,775.04. Moreover, in the four days after
Defendant’s Washington Certified General Appraiser’s license expired, the
business checking account for Chelan Douglas Appraisal Services was charged
four times for insufficient funds. Additionally, as Defendant well knew, Defendant
did not report any revenue to the Washington State Department of Revenue (DOR)
for calendar year 2021 for Chelan Douglas Appraisal Services. However, for
calendar year 2020, Defendant reported to DOR that Chelan Douglas Appraisal
Services was paid $61,840.00 in gross revenue. Nonetheless, in order to receive
increased EIDL funding to which he was not entitled, Defendant falsely and
fraudulently inflated Chelan Douglas Appraisal Services’ 2020 gross revenue in
his EIDL application number 3324752705 by certifying that Chelan Douglas
Appraisal Services’ Actual 2020 Gross Revenues were $106,589.00. As a result of
Defendant’s false and fraudulent inflation of Chelan Douglas Appraisal Services’
2020 gross revenue, the SBA’s calculated eligible amount for Defendant’s EIDL
was itself inflated to $117,400.00.

18. Defendant certified that the information in EIDL application number

3324752705 was true and correct to the best of his knowledge, under penalty of

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perjury and of other criminal penalties for false information. Specifically,
Defendant falsely and fraudulently certified Chelan Douglas Appraisal Services
engaged in business activity, when it did not engage in any business activity and
was prohibited by state law from engaging in its purported business activity of
providing appraisal services.

19. Since Defendant’s Washington Certified General Appraiser’s license
expired on October 23, 2021, and was not renewed during times relevant to this
Indictment, it was unlawful for Defendant to engage or attempt to engage in
business as an appraiser or as an appraisal management company pursuant to RCW
18.310.060 and RCW 18.140.220. Further, Defendant reported no employees to
the Washington State Employment Security Department from at least 2018 to
March of 2022, and while he did report revenue to DOR for Chelan Douglas
Appraisal Services in 2020, though in a far lower amount than Defendant falsely
and fraudulently claimed in his EIDL application, he reported no revenue to DOR
for Chelan Douglas Appraisal Services in 2021. In addition, the business checking
account for Chelan Douglas Appraisal Services shows a sharp decline in apparent
revenue in 2021 culminating in multiple insufficient fund charges in the days after
Defendant’s Washington Certified General Appraiser’s license expired. All of
which occurred just weeks prior to Defendant’s false and fraudulent EIDL
application number 3324752705. Accordingly, Chelan Douglas Appraisal
Services and Defendant were not eligible for any EIDL funding at the time of
Defendant’s EIDL application or thereafter as it was not an operating business and
Defendant had fraudulently inflated its 2020 gross revenue.

20. As aresult of the fraud and relying on the materially false and
fraudulent representations and certifications made by Defendant, SBA approved

the requested EIDL, on November 30, 2021.

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21. On December 1, 2021, $117,300.00 was deposited into Chelan
Douglas Appraisal Services’ business checking account. The business checking
account was opened by Defendant, on July 18, 2016, doing business as Chelan
Douglas Appraisal Services. The business checking account had a beginning
balance of $85.10 in December of 2021, prior to the $117,300.00 deposit from
Defendant’s falsely and fraudulently obtained EIDL.

22. The representation made by Defendant in the Loan Authorization and
Agreement required for disbursement of EIDL Application No. 3324752705 that
he would use the proceeds of the EIDL solely as working capital to alleviate
economic injury was materially false and Defendant knew it was false at the time
he made this representation. Instead of using the EIDL funds for a permissible
purpose, Defendant misused the EIDL funds for personal use through payments,
transfers, and withdrawals from the business checking account and Defendant’s
WaFd Bank consumer checking account ending in 5351 (herein “the consumer
checking account”).

23. Between December 1, 2021, and May 9, 2022, a total of more than
$70,000.00 was transferred from the business checking account to the consumer
checking account and during which time, with the exception of one $40.00 deposit,
there was no other deposit into the business checking account other than the EIDL
disbursement of $117,300. During that time period, the EIDL funds were
withdrawn, spent, and otherwise transferred out of the business checking account
and the consumer checking account. The ending balance of the business checking
account on April 30, 2022 was $1,757.63. The ending balance of the consumer
checking account on May 10, 2022, was $1,041.54. The consumer checking

account was shared by Defendant with his father and sister who were also

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signatories on that account. The business checking account was shared by
Defendant and his sister who was a signatory on that account.

24. The unauthorized transactions using the EIDL funds that Defendant
conducted out of the consumer checking account, included (1) a withdrawal
credited to payment for a campground membership in the amount of $1,194.00, (2)
a wire transfer in the amount of $39,169.48 payable to a Bank of the West Account
ending in 5213 (herein “ the Bank of West Account”), and (3) a cashier’s check
payable to Defendant’s sister in the amount of $12,000.00. All these transactions
were for Defendant’s personal benefit, were not legitimate business or working
capital expenses, and were not authorized by the terms of his EIDL.

Defendant’s RV
25. Onor about November 6, 2021, Defendant signed the Retail

Installment Contract and Security Agreement for the purchase of a Thor Freedom
Elite 23U Class C RV (herein “Defendant’s RV”) from Lazydays RV in the State
of Indiana.

26. Onor about November 6, 2021, Defendant submitted a Consumer
Credit Application number 11713513 through Bank of the West for a loan to fund
Defendant’s purchase of Defendant’s RV.

27. Based on Defendant’s Consumer Credit Application number
11713513, on or about November 18, 2021, Bank of the West funded the loan for
Defendant’s RV in the amount of $37,802.50.

28. On January 11, 2022, the consumer banking account had a balance of
$2,540.71. On January 28, 2022, the consumer banking account received a transfer
of $40,000 from the business checking account delineated as “RV Payoff.” As of
January 28, 2022, since receiving the $117,300.00 EIDL on December 1, 2021,

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when the business checking account had a beginning balance of $85.10, it had
received no deposits other than the EIDL funds.

29. Onor about February 1, 2022, the Bank of the West loan number
241946585 was paid in full by a wire transfer authorized by Defendant from the
consumer checking account using the EIDL funds that had been transferred from
the business checking account on January 28, 2022, delineated as “RV Payoff.”
Defendant wire transferred a total of $39,169.48 from the consumer bank account
to the Bank of the West Account, in Omaha, Nebraska, for payment in full of the
loan that had secured Defendant’s RV using the interstate wires.

Economic Injury Disaster Loan Application No. 3325926731

30. Between November 29, 2021, and December 24, 2021, after
fraudulently obtaining and receiving the initial $117,300.00 in EIDL funding,
Defendant fraudulently sought additional EIDL funding through the Targeted
Advance and Supplemental Targeted Advance EIDL program. On or about

November 30, 2021, while in correspondence with an SBA representative and
pursuant to the scheme, Defendant falsely and fraudulently stated that he needed
the additional funds to pay for an office space rental, licensing fees, and a vehicle,
among other business-related necessities.

31. Onor about December 24, 2021, Defendant applied for an EIDL
Targeted Advance and Supplemental Targeted Advance by signing and submitting
application number 3325926731 to the SBA under the name of his purportedly
active business, Chelan Douglas Appraisal Services.

32. The representations and certifications made by Defendant on EIDL
application number 3325926731 were materially false and Defendant knew they
were false at the time they were made. The SBA did not grant Defendant’s EIDL
application number 3325926731.

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Counts 1-2

33. The allegations in paragraphs 1 through 32 of this Indictment are
incorporated as though realleged herein.

34. Onor about each of the dates set forth below, in the Eastern District
of Washington and elsewhere, the Defendant, JASON CARNELL O’DAFFER, for
the purpose of executing the scheme described above, caused to be transmitted by
means of wire communication in interstate commerce the signals and sounds

described below for each count, each transmission constituting a separate count:

Count | Date Description
1 December 1, | Wire transfer from SBA’s FMS servers in the State of
2021 Iowa to the WaFd business checking account ending

7626 in the Eastern District of Washington in the amount
of $117,300.00 for an EIDL applied for with EIDL
Application No. 3324752705.

2 February 1, | Wire transfer of $39,169.48 from WaFd Bank consumer
2022 checking account ending in 5351 located in the Eastern
District of Washington to Bank of the West account
ending in 5213, located Omaha, Nebraska, wire number
24206.

All in violation of 18 U.S.C. § 1343.
Count 3

35. The allegations in paragraphs 1 through 34 of this Indictment are
incorporated as though realleged herein.

36. On or about November 14, 2021, in the Eastern District of Washington
and elsewhere, the Defendant, JASON CARNELL O’DAFFER, made and presented
to the United States Small Business Administration claims concerning EIDL
Application No. 3324752705 for EIDL Loan No. 25694491-02 in the name of
Chelan Douglas Appraisal Services for an amount of $117,400.00, knowing said

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claims were false and fraudulent, and knowing the information submitted was
materially false and fraudulent in that Defendant knew that Chelan Douglas
Appraisal Services was not then an active business, knew that Chelan Douglas
Appraisal Services’ 2020 actual gross revenue was significantly and materially less
than the amount that Defendant fraudulently represented in the application, and
knew that he planned to use the EIDL funds for unauthorized purposes, all in
violation of 18 U.S.C. § 287.
NOTICE OF FORFEITURE ALLEGATIONS

The allegations contained in this Indictment are hereby realleged and
incorporated herein by this reference for the purpose of alleging forfeitures.

Pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), upon
conviction of an offense in violation of 18 U.S.C. §§ 1343 as alleged in this
Indictment, Defendant shall forfeit to the United States any property, real or
personal, which constitutes or is derived from proceeds traceable to the offenses.
The property to be forfeited includes, but is not limited to, the following:

MONEY JUDGMENT

A sum of money equal to $117,400.00 in United States currency,
representing the amount of proceeds obtained by Defendant from the
wire fraud violations.

CONVEYANCE

Thor Motor Coach M-23U E350-V10, VIN: FD WE3FSXBDB36388,
WA Tag #: CBV1981

If any of the property described above, as the result of any act or omission of
Defendant:
(a) cannot be located upon the exercise of due diligence;

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

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(c) has been placed beyond the jurisdiction of the court;
(d) has been substantially diminished in value; or
(e) has been commingled with other property which cannot be divided
without difficulty,
the United States shall be entitled to forfeiture of substitute property pursuant to

21 U.S.C. § 853(p), as incorporated by 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C.
§ 2461(c).

DATED this AY day of October 2022.

Vanessa R. Waldref

United States Attorney—

Tyler H.L. Tornabene
Assistant

Dan Fruehtér ~~
Assistant United States Attorney

INDICTMENT — 13


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