Indictment — No. 2:23-cr-00405 (Dkt. 1)

Summary

A sealed indictment in United States of America v. Carter Lane Lucas, Case 2:23-cr-00405-DBB, in the U.S. District Court for the District of Utah, filed November 8, 2023 as Document 1. Counts 1-3 charge wire fraud under 18 U.S.C. § 1343. The grand jury alleges that Lucas made false statements about his criminal history on a PPP-Loan application to Mountain America Credit Union for approximately $17,000 on or about April 3, 2020, an EIDL-Loan application for approximately $34,900 on or about June 3, 2020, and an EIDL-Loan Modification application for approximately $129,900 on or about July 31, 2021. It describes the object of the scheme as approximately $182,800 in PPP- and EIDL-Loan proceeds. The forfeiture notice cites 28 U.S.C. § 2461(c) and 21 U.S.C. § 853(p) and seeks a money judgment.

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“Indictment — No. 2:23-cr-00405 (Dkt. 1).” Original at www.justice.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-2-23-cr-00405-dkt-1-f940d9da7e/, SHA-256 28b901fe872acae9117dabf36ad8662c3f9238e662a1224e498c9de6656ba568.

Full text

Case 2:23-cr-00405-DBB Document 1 (Ex Parte) Filed 11/08/23 PageID.1 Page 1 of 12

TRINA A. HIGGINS, United States Attorney (#7349)
TODD C. BOUTON, Assistant United States Attorney (#17800)
Attorneys for the United States of America
Office of the United States Attorney
111 South Main Street, Suite 1800
Salt Lake City, Utah 84111-2176 SEALED
Telephone: (801) 524-5682
Email: todd.bouton@usdoj.gov

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH

UNITED STATES OF AMERICA, INDICTMENT

Plaintiff, VIOLATIONS:

vs. COUNTS 1-3: 18 U.S.C. § 1343,
Wire Fraud
CARTER LANE LUCAS,

Defendant.

Case: 2:23-cr-00405
Assigned To : Barlow, David
Assign. Date: 11/8/2023

The Grand Jury charges:
I. BACKGROUND
At all times relevant to this Indictment:

1. Defendant CARTER LANE LUCAS ("LUCAS") was a resident of Salt Lake

County, Utah in the District of Utah.

2. During the COVID-19 pandemic, LUCAS lied about his criminal history on

loan applications to defraud the COVID-19 relief programs dubbed the Paycheck
Case 2:23-cr-00405-DBB Document 1 (Ex Parte) Filed 11/08/23 PageID.2 Page 2 of 12

Protection Program and the Economic Injury Disaster Loan Program out of approximately

$182,800 in loan funds.

3. To commit his fraud, LUCAS made use of a Mountain America Credit Union

account ending in x:xx.6901 over which he had custody and control.

The Small Business Administration

4. The Small Business Administration (SBA) is an executive branch agency of

the United States government that provides support to entrepreneurs and small businesses.

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

the establishment and viability of small businesses and by assisting in the economic

recovery of communities after disasters.

5. As part of this effort, the SBA enables and provides loans through banks,

ctedit unions, and other lenders. These loans have government-backed guarantees.

The Paycheck Protection Program

6. On March 27, 2020, the President signed into law the Coronavirus Aid, Relief,

and Economic Security Act (CARES Act). This Act was an economic stimulus bill that,

among other things, provided emergency financial assistance to small business owners,

including agricultural businesses, and nonprofit organizations in all U.S. states, Washington

D.C., and territories which were affected by the COVID-19 pandemic. One form of

assistance provided by the CARES Act was the authorization of up to $349 billion in

forgivable loans to small businesses for job retention and certain other expenses, through a

program referred to as the Paycheck Protection Program ("PPP Program").

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7. The PPP Program, which is operated by the SBA, provided small businesses

with funding to meet specific business obligations, including payroll and rent. The PPP

Program permitted participating third-party lenders to approve and disburse SBA-backed
'
PPP Loans to cover payroll, fixed debts, 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. In the event of default, the SBA would fully

satisfy the lender for any balance remaining on the loan. Further, the SBA would forgive

any loan up to 100 percent if the borrower used the loan funds as authorized. Whatever

portion of the loan funds was not forgiven was serviced as a loan.

8. The SBA promulgated regulations concerning eligibility for a PPP Loan. To

obtain a PPP Loan, a qualifying business was required to 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 in order to be eligible to obtain

• the PPP Loan.

Certification Regarding Criminal History in Relevant PPP-Loan Application

9. On or about April 3, 2020, one of the affirmative certifications a borrower had

to niake in a PPP-Loan application was that he had not been convicted of a felony within

the last five years. Specifically, the applicant was asked:

Within the last 5 years, for any felony, has the Applicant (if an
individual) or any owner of the Applicant 1) been convicted; 2)
pleaded guilty; 3) pleaded nolo contendere; 4) been placed on

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pretrial diversion; or 5) been placed on any form of parole or
probation (including probation before judgment)

(PPP-Loan Application at lr 6) (emphasis added).

10. If the applicant answered that an owner of the business seeking the PPP Loan

had been convicted of a felony within the last five years, the loan was denied.

11. By signing a PPP-Loan application, each applicant attested that the

information provided in the application (including the criminal history information) and in

all supporting documents and forms was true and accurate, and that the applicant understood

that knowingly making a false statement to obtain a PPP Loan was a crime.

PPP-Loan Application Processing Through E-Tran Server in Virginia

12. A PPP-Loan application was processed by the third-party participating lender

with whom the application was filed. If a PPP-Loan application was approved, the

participating lender would fund the PPP Loan; in order to encourage PPP Loans to be

issued, the loan was guaranteed by the SBA. Data from the application, including

information from the borrower, the total amount of the loan, and the listed number of

employees, was transmitted by the lender to the SBA in the course of processing the loan.

13. More specifically, PPP-Loan applications submitted before August 20, 2020

were received through the SBA E-Tran server located in Sterling, Virginia.

The EIDL-Loan Program

14. As part of the CARES Act, Congress also authorized the SBA to provide low-

interest Economic Injury Disaster Loans (EIDL Loans) ofup to $2 million to eligible small

businesses experiencing substantial fmancial disruption due to the COVID-19 pandemic·. In

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addition, the CARES Act authorized the SBA to issue advances ofup to $10,000 to small

businesses within three days of applying for an EIDL Loan.

How EIDL Loan Applications Were Processed

15. EIDL Loan applications were submitted directly to and proGessed by the

SBA. The applications were received in cloud-based platforms. The location of the server

through which EIDL Loan applications were submitted was based on the date a given

application was processed by the SBA and the application number.

16. During the time period relevant to this Indictment, the relevant EIDL-Loan

application and supporting documents and the later certification for an EIDL-Loan

. modification (increase) were both submitted from Utah and then received in a cloud-based

platform through SBA servers located in Quincy, Washington (the EIDL Loan application),

and Des Moines, Iowa (the later certification for the loan modification).

17. After an EIDL Loan/was approved, the applicant business received the EIDL-

Loan proceeds through an electronic funds transfer directly from the SBA into a financial

account reportedly under the control of the applicant business.

Required Criminal History Certification in EIDL-Loan Applications

18. From March 2020 on, to obtain an EIDL Loan, a qualifying business was

required to submit a loan application to the SBA and provide information about its business

and ownership. Each EIDL-Loan applicant was required to certify under penalty of perjury

that all the information in the loan application was true and correct to the best of his or her

knowledge.

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19. Up until May 4, 2020, one of the affirmative certifications a borrower had to

make in an EIDL-Loan application was that no owner of the business had ever been

convicted of, plead guilty to, or been placed on probation for any crime other than a minor

traffic violation. Specifically, the applicant was asked:

□ c. For any criminal offense - other than a minor vehicle violation -
have you ever been convicted, plead guilty, plead nolo contendere,
been placed on pretrial diversion, or been placed on any form ofparole
or probation (including probation before judgment)?

(EIDL-Loan Application.Form re: Additional Questions - Criminal History).

20. For any EIDL-Loan applications initiated before May 4, 2020, if the applicant

answered yes to this question, the SBA denied the EIDL-Loan application.

21. After making the required criminal history certification (and other required

certifications) in the EIDL-Loan application, borrowers would then sign a Loan

Authorization and Agreement wherein they were required to certify that "All

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

submissions) [were] true, correct and complete and [were] offered to induce [the] SBA to

make this Loan." (Loan Authorization and Agreement at 5 re: Borrower's Certifications).

The applicant was also required to agree that the EIDL-Loan funds would also be used

solely as working capital to alleviate economic injury caused by disaster and to certify under

penalty of perjury that they were authorized to apply for and obtain an EIDL Loan on behalf

of the borrower. (Id. at 3 re: Use of Loan Proceeds and Certification at 7).

The EIDL-Loan Modification Qncrease) Program

22. On March 24, 2021, the SBA announced that the maximum amount available

for an EIDL Loan was increased from $150,000 to $500,000. The SBA also announced that
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the formula for calculating the EIDL-Loan amount had been changed from 6 months of

gross margin to include 24 months of gross margin.

23. Based on these changes, some EIDL Loans that had been approved prior to

the week of April 6, 2021 were made eligible for an increase based on the new loan

maximum amounts announced March 24, 2021.

24. COVID-19 EIDL Loans could thus be modified to increase the loan amount

to account for up to 24 months of economic injury or a maximum of $500,000, whichever

was less. An increase could be requested either before or after accepting the loan.

25. To request an increase in the EIDL Loan amount, the borrower was required

to log into· the SBA loan portal account at https://covid19reliefl.sba.gov/. Once logged on,

the borrower could click on a button that read "Request More Funds."

26. Borrowers were then asked to disclose if any changes had occurred since the

original EIDL-Loan application was submitted.

27. Borrowers would then sign an Amended Loan Authorization and Agreement

wherein they would again certify that "All representations in the Borrower's [original] Loan

application (including all supplementary submissions) [were] true, correct and complete and

[were] offered to induce [the] SBA to make this Loan." (Am. Loan Authorization and

Agreement at 5 re: Borrower's Certifications). The applicant was also required to agree that

the increased EIDL-Loan funds would also be used solely as working capital to alleviate

economic injury caused by disaster and to certify under penalty of perjury that they were

authorized to apply for.and obtain an EIDL Loan on behalf of the borrower. (Id at 3 re: Use

of Loan Proceeds and Certification at 7).

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Case 2:23-cr-00405-DBB Document 1 (Ex Parte) Filed 11/08/23 PageID.8 Page 8 of 12

Lender

28. Mountain America Credit Union (Mountain America) is a federally insured

financial institution doing business in Utah. When the PPP program was in operation,

Mountain America offered PPP Loans to customers.

II. THE SCHEME AND ARTIFICE TO DEFRAUD

29. Beginning on or around April 3, 2020, and continuing to and including at least

August 4, 2021, within the District of Utah and elsewhere, the defendant,

CARTER LANE LUCAS,

devised and executed a scheme and artifice to defraud and sought to obtain money and

property by means of materially false and fraudulent pretenses, representations and

promises, and omissions of material facts.

3 0. In executing and attempting to execute the scheme and artifice to defraud, and

in furtherance thereof, LUCAS knowingly devised and intended to devise a scheme and

artifice to defraud Mountain America and the SBA and made false and fraudulent pretenses,

representations, and promises to Mountain America and the SBA, in violation of 18 U.S.C.

§ 1343 (Wire Fraud) by, among other things:

a. Submitting or causing to be submitted a fraudulent PPP-Loan application to

Mountain America and the SBA on or about April 3, 2020; and

b. Submitting or causing to be submitted a fraudulent EIDL-Loan application

the SBA on or about June 3, 2020.

c. Submitting or causing to be submitted a fraudulent EIDL-Loan Modification

application to the SBA on or about July 31, 2021.

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Case 2:23-cr-00405-DBB Document 1 (Ex Parte) Filed 11/08/23 PageID.9 Page 9 of 12

Ill. THE OBJECT OF THE SCHEME AND ARTIFICE TO DEFRAUD

31. It was the object of the scheme and artifice to defraud for LUCAS to obtain

money from Mountain America and the SBA in the form of approximately $182,800 in

PPP- and EIDL-Loan proceeds through false statements, misrepresentation, deception, and

omissions of material facts, and to then use the loan proceeds for his personal benefit.

IV. MANNER AND MEANS OF THE SCHEME AND ARTIFICE TO
DEFRAUD

April 3, 2020 PPP-Loan Application:

32. On or about April 3, 2020, LUCAS completed and submitted an application

to Mountain America and the SBA for a PPP Loan in the amount of approximately $17,000.

33. In execution and furtherance of the scheme and artifice to defraud, when

submitting the loan application, LUCAS made, or caused to be made, the following false,

:fraudulent, and material representation to Mountain America and the SBA:

a. LUCAS had not been convicted of a felony within five years of his

submission of the PPP-Loan application; when, in fact, he had been.

June 3, 2020 EIDL-Loan Application:

34. On or about June 3, 2020, LUCAS completed and submitted an EIDL-Loan

application to the SBA for an approximately $34,900 EIDL Loan, along with a request (in

the same application) for an additional $1,000 EIDL advance.

II I

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35. In execution and furtherance of the scheme and artifice to defraud, when

-submitting the EIDL-Loan application, LUCAS made, or caused to be made, the following

false, :fraudulent, and material representation to the SBA:

a. For any criminal offense - other than a minor vehicle violation -
LUCAS had never been convicted, plead guilty, plead nolo
contendere, been placed on pretrial diversion, or been placed on
any fonn of parole or probation (including probation before
judgment); when, in ~act, he had been.

July 31, 2021 EIDL-Loan Modification (Increase) Application:

36. On or about July 31, 2021, LUCAS completed and submitted an EIDL-Loan

Modification (Increase) application to the SBA for an additional approximately $129,900

EIDL-Loan increase.

37. In execution and furtherance of the scheme and artifice to defraud, when

submitting the EIDL-Loan Modification application, LUCAS again made, or caused to be

made, the following false, fraudulent, and material representation to the SBA:

a. For any criminal offense - other than a minor vehicle violation -
LUCAS had never been convicted, plead guilty, plead nolo
contendere, been placed on pretrial diversion, or been placed on any
form of parole or probation (including probation before judgment);
when, in fact, he had been.

COUNTS 1-3
18 u.s.c. § 1343)
(Wire Fraud)

38. The allegations set forth above are incorporated herein by reference and

realleged as though fully set forth in these Counts.

39. Beginning around April 3, 2020 and continuing in and through at least August

4, 2021, in the District of Utah and elsewhere, the defendant,

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CARTER LANE LUCAS,

having devised and intended to devise a scheme and artifice to defraud, and for obtaining

money and property from Mountain America and the SBA, by means of false and

fraudulent pretenses, representations, promises, and omissions of material facts, for the

purpose of executing said scheme and artifice to defraud, did transmit and cause to be

transmitted by means of wire communication certain writings, signs and signals, that is, an

interstate wire, as represented below, each such use of wire communication being a

separate count:

COUNT DATE USE OF INSTERSTATE WIRES
(On or About)
1 4/3/2020 LUCAS submitted a fraudulent PPP-Loan application for an
approximately $17,000 loan. He submitted the loan application to
the SBA from an IP address in Sandy, Utah and through the SBA
E-Tran server located in Sterling, Virginia.
2 6/3/2020 LUCAS submitted a fraudulent EIDL-Loan application for an
approximately $34,900 loan, with an EIDL-Loan advance of
another $1,000. He submitted the loan application to the SBA
from an IP address in Fairview, Utah and through DCMS 2.0,
which is located in Quincy, Washington.
3 7/31/2021 LUCAS submitted a fraudulent EIDL-Loan Modification
application for approximately $129,900. He submitted the loan
application to the SBA from an IP address located in Salt Lake
City, Utah and through an SBA server in Des Moines, Iowa.

All in violation of 18 U.S.C. § 1343.

NOTICE OF INTENT TO SEEK FORFEITURE

Pursuant to 18 U.S.C. § 98l(a)(l)(C) and 28 U.S.C. § 2461(c), upon conviction of

any offense violating 18 U.S.C. § 1343, the defendant(s) shall forfeit to the United States

of America any property, real or personal, that constitutes or is derived from proceeds

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traceable to the scheme to defraud. The property to be forfeited includes, but is not limited

to:

■ A money judgment equal to the value of any property not available for forfeiture

as a result of any act or omission of the defendant(s) for one or more of the

reasons listed in 21 U.S.C. § 853(p); and

• Substitute property as.allowed by 28 U.S.C. § 2461(c) and 21 U.S.C. § 853(p).

A TRUE BILL:

FOREPE~bF GRAND JURY

TRINA A. HIGGINS
United States Attorney

C-.-'

TODD C. B~ON-
Assistant Umted States Attorney

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