Indictment — United States v. Lorie A. Schaefer and Latisha C. Holloway, Southern District of Ohio (Doc. 19)
Summary
A grand jury indictment against Lorie A. Schaefer and Latisha C. Holloway, Case 2:24-cr-00029-EAS, in the U.S. District Court for the Southern District of Ohio, filed 03/07/24 as Doc #19. Counts One and Two charge wire fraud under 18 U.S.C. § 1343, alleging that Schaefer registered a Flying Pizza trade name to appear to own the restaurants and submitted false PPP applications to Itria and ECDI, including one on May 12, 2021, and that Holloway signed a false application for Jaguar Logistics, LLC on June 8, 2021. It alleges Holloway later sent ECDI a fake 2019 tax return claiming over $5 million in payroll. The money laundering counts under 18 U.S.C. § 1957 cite a wire by Schaefer for a residential property and a transfer of approximately $900,000 by Holloway. Forfeiture allegations include a Westerville, Ohio condominium and a sum of $800,833.00 from Holloway.
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“Indictment — United States v. Lorie A. Schaefer and Latisha C. Holloway, Southern District of Ohio (Doc. 19).”
Original at ecf.ohsd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-2-24-cr-00029-dkt-19-s-d-ohio-9d46bad915/
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Case: 2:24-cr-00029-EAS Doc #: 19 Filed: 03/07/24 Page: 1 of 15 PAGEID #: 91
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CASE NO/ /<?)pl fc^. JjM8(jS
Plaintiff,
JUDGE
vs.
INDICTMENT
LORIE A. SCHAEFER (1), and
18 U. S. C. § 1343
LATISHA C. HOLLOWAY (2), 18 U. S. C. § 1957
Defendants. FORFEITUREALLEGATIONS
THE GRAND JURY CRARGES:
At times relevant to the Indictment:
GENERALALLEGATIONS
1. Defendant LORIE A. SCHAEFER was a resident of Columbus,
Ohio, and was previously married to an owner ofthe Flying Pizzachain of
restaurants in central Ohio. SCHAEFERwas not an owner or operator ofthese
restaurants.
2. SCHAEFERcontrolled the following bank accounts:
a. A Huntington National Bank (HNB) checking account ending
x2400 (the "HNB x2400 Account");
b. An HNB checking account ending x4340 (the "HNB x4340
Account"), which was linked to an HNB savings account
ending x6233 (the "HNB x6233 Account");
c. An HNB money market account ending x8134 (the "HNB
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x8134Account").
3. Defendant LATISHA C. HOLLOWAY registered a limited liability
company in Ohio on or around December 5, 2018, in the name of Jaguar Logistics
LLC ("Jaguar").
4. HOLLOWAY controlled the following baiik accounts:
a. A US Bank (USE) account ending x6723, in her own name
(the "USE x6723 Account");
b. A USE account ending x9998, in the name of Jaguar (the
"USE x9998 Account").
Back round Re ardin COVID Relief Fundin
5. 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)
("CARESAct") which established several new temporary programs and provided
for the expansion of others to address the pandemic.
6. One of the new programs was the SBA Paycheck Protection Program
("PPP"), whichwas a loan designed to provide a direct incentive for small
businesses to keep their workers on the payroll. Under this program, the Small
Business Administration (SBA) would forgive all or part of loans if all employees
were kept on the payroll for eight weeks and borrowers submitted documentation
confirming that the loan proceeds were used for payroll, rent, mortgage interest,
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or utilities. Applicants could apply through participating third-party lenders.
PPP loans were fully guaranteed by the SBA, but the PPP loans were directly
funded by SBA-approved lenders.
7. To obtain a PPPloan, a qualifying business was required to submit
a PPP loan application, whichwas signed by an authorized representative of the
business. The PPPloan application required the business (through its authorized
representative) to acknowledge the program rules and make certain affirmative
certifications, including acknowledging that knowingly making a false statement
to obtain a guaranteed loan from the SBA is punishable under the law. In the
PPP loan application, the authorized representative was required to state, among
other things, the business's average monthly payroll expenses and number of
employees. These figiires were used to calculate the amount of money the
business was eligible for under the PPP. In addition, businesses applying for a
PPP loan were required to provide the lender documentation showingtheir
payroll expenses; typically, businesses would supply documents showingthe
amount of payroll taxes reported to the Internal Revenue Service ("IRS").
8. During the application process, PPP loan applications were
electronically submitted or caused to be submitted by the borrower and received
through SBA servers located in Virginia and 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.
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9. The proceeds of a PPP loan could be used for certain specified items,
such as payroll costs, costs related to the continuation of group health care
benefits, or mortgage interest payments. The proceeds of a PPP loan were not
permitted to be used by the borrowers to purchase consumer goods, automobiles,
personal residences, clothing, or 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.
10. The Economic & Community Development Institute ("ECDI")
and Itria Ventures LLC ("Itria") participated in the SBA's PPP as lenders
and, as such, were authorized to lend funds to eligible borrowers under the
terms of the PPP.
COUNTS ONE AND TWO
(Wire Fraud)
11. Paragraphs 1 to 10 ofthe Indictment are realleged here as if fully
restated herein.
12. From at least March 2020, and continuing through at least in or
around October 2022, in the Southern District of Ohio and elsewhere, the
defendants, LORIE A. SCHAEFER and LATISHA C. HOLLOWAY, did
knowingly and willfully devise and intend to devise a scheme to defraud PPP
lenders to deprive another of money and property by means of materially false and
fraudulent pretenses and representations, as set forth below.
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Manner and Means of the Scheme to Defraud
13. It was part of the scheme to defraud that:
a. SCHAEFER and HOLLOWAY sought to fraudulently obtain disaster-
related benefits in the form of SBA PPP loan proceeds.
b. SCHAEFER fraudulently registered a trade name with the Ohio
Secretary of State to create the appearance that she was a legitimate
owner of the Flying Pizza restaurants. Specifically, on or about March
9, 2021, she registered the trade name "Lorie Schaefer DBA Flying
Pizza" (the "SchaeferLLC"), listing a business address in Reedsville,
Ohio (the "Reedsville Address"). The Reedsville Address was in fact a
residence of her ex-husband, who was unaware ofthe filing.
c. SCHAEFERopened bank accounts to receive and transfer proceeds
from the fraudulent scheme, including the following:
On or about December 23, 2020, she opened the
HNB x4340 Account with an openingbalance of
$0. 88;
. On or about March 1, 2021, she opened the HNB
x2400 Account with an opening balance of $0.
d. HOLLOWAY opened the USB x6723 Account on or about June 21,
2021, to receive and transfer proceeds from the fraudulent scheme.
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SCHAEFER submitted, or caused to be submitted, false and
fraudulent PPP loan applications to EGDI and Itria, on behalfof
different purported companies, including the following:
On or about August 6, 2020, an application on
behalf of LS Associates, submitted to Itria (the
"Itria Application");
On or about May 12, 2021, an application on behalf
of Schaefer Flying Pizza, submitted to ECDI (the
"Schaefer ECDI Application");
On or about June 2, 2021, an application on behalf
ofJaguarLogistics, LLC, submitted to ECDI
(the "Holloway ECDI Application").
f. On the Itria Application and the Schaefer ECDIApplication,
SCHAEFERidentified herself as the owner, CEO, or managing
member and authorized representative of the applicant business.
SCHAEFERalso submitted purported copies ofIRS tax forms
and bank statements in support of her applications. These PPP
applications contained false statements, misrepresentations, and
omissions related to SCHAEFER'spersonal iiiformation, income,
employment, and claimed business entities, including: her Social
6
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Security number, the number of employees, gross income, gross
expenses, her bank statement, and her income tax return.
g. On the Holloway ECDI Application, HOLLOWAY-with
assistance from SCHAEFER-identified herself as the owner,
CEO, or managing member and authorized representative of the
applicant business. The Holloway ECDIApplication also included
purported copies of IRS tax forms and bank statements in
support of the application. This PPP application contained false
statements, misrepresentations, and omissions related to
HOLLOWAYspersonal information, income, employment, and
claimed business entity, including: the number of employees,
gross income, gross expenses, her bank statement, and her
income tax return.
h. On or about June 8, 2021, HOLLOWAYelectronically signed the
Holloway ECDI Application, which required her to sign or initial
the application dozens of times. The Internet Protocol (IP)
Address associated with the application was matched to
HOLLOWAYshome address in Chicago, Illinois. By signing and
initialing, she certified that all ofthe information in the Holloway
E GDI Application was true and accurate.
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i. On or about August 19, 2020, SCHAEFERreceived from Itria a
PPP disbursement of about $20, 800 as a result of the Itria
Application.
j. On or about May 20, 2021, SCHAEFER received into the HNB
x2400 Account from ECDI a PPP disbursement of about
$1,893, 333 as a result of the SchaeferECDIApplication.
k. SCHAEFERmisapplied the PPPproceeds by paying for expenses,
goods, and services unrelated to those authorized by the program,
including by using a majority of the PPP proceeds on personal
expenses to include the purchase of a residential property at 5259
Sorrento Court, Westerville, Ohio 43083, renovations ofthat property,
cosmetic surgery, groceries, restaurants, and retail shopping.
1. On or about June 17, 2021, HOLLOWAYreceived from ECDIaPPP
disbursement of about $980, 833 into the USE x9998 Account as a
result of the Holloway ECDIApplication.
m. HOLLOWAYmisapplied the PPP proceeds by paying for expenses,
goods, and services unrelated to those authorizedby the program.
n. On or about July 20 and August 3, 2021, HOLLOWAY,using proceeds
from the fraudulent PPP loan she received, wired $50, 000 and
$130,000, respectively, from her USB x6723 Account to
S CHAFFER'S HNB x4340 Account.
8
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o. On or about September 20, 2022, an application for forgiveness ofthe
Holloway ECDIApplication was submitted to ECDI. Wlien she was
notified by ECDI that a denial to that request was anticipated
because she had provided insufficient information, HOLLOWAY
emailed ECDI a fake 2019 Form 1040 individual tax return. The fake
tax form falsely claimed that one ofher businesses had paid over $5
million in payroll in 2019, when her genuine tax return claimed $0 in
payroll for that business. The fake tax form also replaced the name
and contact information of her real tax return preparer with that of
SCHAEFER.
p. In total, SCHAEFER sought or assisted in fraudulently obtaining
approximately $2, 894, 966 in PPP funds, $980, 833 of that with the
assistance and coordination of HOLLOWAY. Although the two
claimed that the funds would be used to pay employees, those
purported employees either did not exist, had not been paid, or earned
a fraction of what SCHAEFER and HOLLOWAY claimed in their
PPP loan applications.
Uses of Interstate Wires
14. On or about each of the dates set forth below, in the Southern District
of Ohio and elsewhere, the defendants, LORIEA. SCHAEFERand LATISHA C.
HOLLOWAY,for the purpose of executing the scheme described above, and
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attempting to do so, knowingly transmitted and caused to be transmitted by means
of a wire communication in interstate commerce, signals and sounds, as follows:
Count Date of Wire Description ofWire Conununication
Communication
One May 12, 2021 Defendant LORIEA. SCHAEFERcaused the
Schaefer ECDIApplication to be communicated via
wire to the SBA through servers outside of the
Southern District of Ohio.
Two June 8, 2021 Defendant LATISHA C. HOLLOWAY electronically
signed the Holloway ECDIApplication, thereby
causing the communication of wires to the SBA
through servers outside the Southern District of
Ohio.
All in violation of Title 18, United States Code, Section 1343.
COUNT THREE
(Money Laundering)
15. Paragraphs 1 to 10 of this Indictment are realleged as if fully restated
herein.
16. On or about June 23, 2021, in the Southern District of Ohio and
elsewhere, defendant LORIEA. SCHAEFERdid knowingly engage and attempt to
engage in a monetary transaction by, through, and to a financial institution,
affecting interstate and foreign commerce, in criminally derived property of a value
greater than $10, 000, such property having been derived from a specified unlawful
activity, namely wire fraud; that is, SCHAEFERsent and caused to be sent a wire
transfer from the HNB x8134 Account in the approximate amount of $789, 316. 64 to
the JPMorgan Chase Bank account of a title agency for the purchase of a residential
property located at 5259 Sorrento Court, Westerville, Ohio 43083.
10
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In violation of Title 18, United States Code, Section 1957.
(Money Laundering)
17. Paragraphs 1 to 10 ofthis Indictment are realleged as if fully restated
herein.
18. On or about June 21, 2021, in the Southern District of Ohio and
elsewhere, defendant LATISHA C. HOLLOWAY did knowingly engage and
attempt to engage in a monetary transaction by, through, and to a financial
institution, affecting interstate and foreign commerce, in criminally derived
property of a value greater than $10,000, such property having been derived from a
specified unlawful activity, namely wire fraud; that is, HOLLOWAY sent and
caused to be sent an account transfer of approximately $900,000 from the USB
x9998 Account to the USB x6723 Account.
In violation of Title 18, United States Code, Section 1957.
FORFEITURE ALLEGATION A
19. The allegations of this Indictment are realleged and by this reference
fully incorporated herein for the purpose of alleging forfeitures to the United States
of America.
20. Upon conviction of any of the offenses alleged in Counts One and/or
Three of this Indictment, defendant LORIEA. SCHAEFERshall forfeit to the
United States, in accordance with 18 U. S. C. § 981(a)(l)(C) and 28 U. S. C. § 2461(c),
any property, real or personal, which constitutes or is derived from proceeds
11
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traceable to the violation alleged in Count One; and/or in accordance with 18 U. S. C.
§ 982(a)(l), any property, real or personal, involved in the offense alleged in Count
Three, and any property traceable to such property, including, but not limited to:
a. A sum of money equal to $2, 094, 133.00 in United States currency,
which represents the amount ofproceeds traceable to, and derived
from, the offenses outlined in this Indictment, and the following
property which is a directly traceable asset in partial satisfaction of
this forfeiture:
i. The Real Property known and numbered as 5259 Sorrento Court,
Westerville, Delaware County, Ohio, with all appurtenances,
attachments, and improvements thereon, Record Owner:
Regional Investments LLC, and legally described as:
Situated in the Township of Genoa, County of Delaware, State of
Ohio, and further described as follows:
Being Unit 5259, in Sorrento At Highland Lakes Condominium,
as the same is nurabered, designated, delineated and described
in the Declaration, Bylaws and Drawingsthereof, ofrecord,
respectively, in Official Record Volume 1248, Page 117, and
condominium Plat filed in Official Record Volume 1248, Page
193 and in Condominium Plat Book 4, Slide 31, Recorder's
Office, Delaware County, Ohio, and any subsequent
amendments thereto.
Parcel ID: 317-322-03-008-503
Commonly KnownAs: 5259 Sorrento Court, Westerville, OH
Last Deed of Record recorded at Instrument Number 2023-
00021185in the records of the Delaware County, Ohio Recorder.
21. Substitute Assets: If any of the property described above, as a result of
any act or omission of defendant LORIEA. SCHAEFER:
a. cannot be located upon the exercise of due diligence;
12
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b. has been transferred or 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 which cannot be divided
without 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) and 28 U. S. C. § 2461(c), to seek forfeiture of any other
property of defendant LORIE A. SCHAEFER, up to the value of the forfeitable
property.
Forfeiture notice pursuant to 18 U. S. C. § 981(a)(l)(C) and 28 U. S. C.
§ 2461(c), 18 U. S. C. § 982(a)(l), and Rule 32. 2 of the Federal Rules of
Criminal Procedure.
FORFEITURE ALLEGATION B
22. The allegations of this Indictment are realleged and by this reference
fully incorporated herein for the purpose of alleging forfeitures to the United States
of America.
23. Upon conviction of any of the offenses alleged in Counts Two and/or
Four of this Indictment, defendant LATISHA C. HOLLOWAYshall forfeit to the
United States, in accordance with 18 U. S. C. § 981(a)(l)(C) and 28 U. S. C. § 2461(c),
any property, real or personal, which constitutes or is derived from proceeds
traceable to the violation alleged in Count Two; and/or in accordance with 18 U. S.C
§ 982(a)(l), any property, real or personal, involved in the offense alleged in Count
13
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Four, and any property traceable to such property, including, but not limited to:
a. A sum of money equal to $800,833.00 in United States currency,
which represents the amount ofproceeds traceable to, and derived
from, the offenses outlined in this Indictment.
24. Substitute Assets: If any of the property described above, as a result of
any act or omission of defendant LATISHA C. HOLLOWAY:
a. cannot be located upon the exercise of due diligence;
b. has been transferred or sold to, or deposited with, a third party;
c. has been placed beyond the jurisdiction ofthe court;
d. has been substantially diminishedin value; or
e. has been commingled with other property which cannot be divided
without difficulty,
it is the intent ofthe United States, pursuant to 21 U. S.C. § 853(p), as incorporated
by 18 U. S. C. § 982(b)(l) and 28 U. S. C. § 2461(c), to seek forfeiture of any other
property of defendant LATISHA C. HOLLOWAY, up to the value of the forfeitable
property.
Forfeiture notice pursuant to 18 U.S. C. § 981(a)(l)(C) and 28 U. S. C.
§ 2461(c), 18 U. S. C. § 982(a)(l), and Rule 32. 2 of the Federal Rules of
Criniinal Procedure.
A TRUE BILL
/s/ Grand Jur Fore erson
FOREPERSON
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KENNETH L. PARKER
United States Attorney
-< ^)
D VIDJ. TWO (92558)
Assistant U tates Attorney
15
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