Indictment — United States v. Kimberly Aralene Wells, District of Oregon (Document 1)

Summary

A sealed grand jury Indictment in United States v. Kimberly Aralene Wells, Case 3:21-cr-00437-SI, in the United States District Court for the District of Oregon, Portland Division, filed November 17, 2021. Counts 1-3 charge wire fraud under 18 U.S.C. § 1343, alleging that Wells, described as a self-employed housecleaner or unemployed, obtained an EIN for a fictitious corporation, Kim's Cleaning, Inc., and applied to Itria Ventures LLC for a PPP loan claiming an average monthly payroll of $19,583 for 6 employees, supported by tax documents never filed with the IRS. It alleges that Itria issued a loan of $48,957.50 and that Wells spent approximately $22,505.28 of the proceeds at casinos. It alleges that a second draw application for $50,987.00 was unsuccessful, and includes a forfeiture allegation.

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“Indictment — United States v. Kimberly Aralene Wells, District of Oregon (Document 1).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-3-21-cr-00437-dkt-1-d-or-164d4c0717/, SHA-256 215fa554f1b57366a49aee8bfe28c7673dc05a206b1673dbc6c4b12ba2c77b54.

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Case 3:21-cr-00437-SI Document 1 Filed 11/17/21 Page 1 of 7
UNDER SEAL

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON /

PORTLAND DIVISION

UNITED STATES OF AMERICA 3:21-cr-437-SI

v.
INDICTMENT
KIMBERLY ARALENE WELLS,
18 U.S.C. § 1343 and Forfeiture
Defendant. Allegation
UNDERSEAL

THE GRAND-JURY CHARGES:

INTRODUCTORY ALLEGATIONS

At all times relevant to this indictment:

1. KIMBERLY ARALENE WELLS ("WELLS"), defendant herein, resided in

Portland, Oregon, and worked as a self-employed housecleaner or was unemployed.

2. On March 27, 2020, President Trump signed the CoronavirusAid, Relief, and

Economic Security (CARES) Act into law. That statute created the Paycheck Protection

Program (PPP), which authorizeq the United States Small Business Administration (SBA) to

guarantee loans of up to $10,000,0001tci qualifying employers without collateral or personal

guarantees from the borrowers. The Act required lenders making loans under the PPP to defer

all repayment obligations on such loans for not less than six months and required borrowers to

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Revised April 2018
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certify, among other things, that the borrowed "funds [would] be used to retain workers and

maintain payroll or make mortgage payments, lease payments, and utility payments."

3. In order to obtain a PPP loan, each applicant was required to provide information

about the supject business's operations, including the number of employees, historical expenses

and revenues, and date of establishment (which had to be in or before February 2020).

Applicants were typically required to corroborate those representations with supporting

documentation, such as tax filings. Applicants were also required to certify that all the

information in their applications was true and correct to the best of their knowledge.

4. Businesses with non-owner employees were generally required to have a nine-

digit Employer Identification Number (EIN) to complete federal tax filings and to facilitate the

withholding of payroll and unemployment taxes. Business owners could apply to the Internal

Revenue Service (IRS) for the assignment of an EIN over the internet. Online applications for

EINs were transmitted to the IRS's servers in Martinsbug, West Virginia.

5. After January 11, 2021, all PPP loan applications were submitted electronically

through the SBA's cloud-based platform, which was hosted on computer servers located in the

State of Oregon. From those servers, PPP loan applications and supporting documents were

forwarded to participating lenders.

6. Itria Ventures LLC (Itria) was. a PPP lender. Itria's offices were located at One

Penn Plaza, Suite 4530, New York, NY 10119.

Ill

II I

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Case 3:21-cr-00437-SI Document 1 Filed 11/17/21 Page 3 of 7

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

7. The allegations_ in paragraphs 1 through 6 of this Indictmeµt are incorporate_d as

though realleged herein.
\

THE SCHEME
8. ; From not later than January 5, 2021, and continuing through at least April 14,

2021, defendant WELLS devised and intended to devise a material scheme to defraud the SBA

and Itria ·and to obtain money and property by means 9f materially false and fraudulent pretenses,

. representations, and promises.
\
9. Specifically, WELLS applied for PPP loans using false.borrower information

with the intent to steal and to convert the proceeds of those loans to her personal use and without

any intent to repay those loans or to use the proceeds thereof for any authorized purpose.

MANNER AND MEANS

It was part of this scheme that:

· 10. On January 5, 2021, WELLS applied to the IRS for an EIN to be assigned to

"Kim's Cleaning, Inc.," a fictitious corporation. The IRS assigned the BIN 86-XXXX744.

11. On February 24,, 2021, WELLS submitted PPP· borrower application numb9r

25629914 to the SBA and Itria on behalf of"Kim's Cleaning, Inc." In that application, WELLS

· claimed, inter alia, that the company had an "average monthly payroll" of $19,583 for 6

employees. These representations were false.

Ill

I II

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Case 3:21-cr-00437-SI Document 1 Filed 11/17/21 Page 4 of 7

12. In support of and in conjunction with PPP borrower application number

25629914, WELLS submitted to Itria various documents that purportedly reflected the

company's tax filings with the IRS. Among the documents were:

a. A Schedule C (IRS Form 1040) for "Kims Cleaning Inc." for 2019, which bore

the EIN 86-XXXX:744 and reflected "[g]ross receipts or sales" of $820,705, and

"[w]ages (less employment credits)" of $236,500;
V

b. A Schedule C (IRS Form 1040) for "Kims Cleaning Inc." for 2020, which bore

the EIN 86-XXXX:744 and reflected "[g]ross receipts or sales" of $632,000 and

"[w]ages (less employment credits)" of $236,000;

c. An IRS Form 940 (Employer's Annual Federal Unemployment (FUTA) Tax

Return) for 2020, which bore the EIN 86-XXXX:744 and reflected "[t]otal

payments to all employees of $236,500.00; and

d. An IRS Form 941 (Employer's Quarterly Federal Tax Return) for "Kims

Cleaning Inc." for the first quarter of 2020, which bore the EIN 86-:XXXX744

and declared the "[n]umber of employees who received wages, tips, or other

compensation" for the quarter to be 6 and the "[w]ages, tips, and other

compensation" paid that quarter to have been $59,125.00.

None of these documents was ever filed with the IRS. As of June 15, 2021, the IRS had received

no tax filings of any sort associated with the EIN 86-XXXX:744.

13. Based on PPP borrower application: number 25629914 and the documents

WELLS submitted therewith, Itria agreed on or about February 27, 2021, to issue PPP loan

number 9380878409 to Kim's Cleaning, Inc., in the amount of $48,957.50. Itria disbursed

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Case 3:21-cr-00437-SI Document 1 Filed 11/17/21 Page 5 of 7

- '
$23,957.50 to WELLS's account at Lili, an online bank, on March 10, 2021, and the remaining

$25,000 on March 25, 2021.

14. WELLS used almost none of the PPP loan funds for authorized business

purposes. Instead, between March 11, 2021, and July 19, 2021, WELLS spent approximately

$22,505.28 of the loan proceeds at casinos, another $5,612.16 on airfare, hotels, rideshares, and

other travel expenses, and more than $21,000 on sundry personal expenses.

15. On April 14, 2021, WELLS applied for a second draw on her PPP loan.

Specifically, WELLS submitted application number 28658540 to the SBA,and Itria, seeking an

additional $50,987.00. In that application, WELLS claimed, inter alia, that the "average

monthly payroll" for Kim's Cleaning Inc. had increased to $20,395.00, while the company's

"gross receipts" had declined from $638,000 in 2019 to $431,000 in 2p20. These representations

were false. In support of this application, WELLS again submitted various tax return

documents. These documents were fraudulent, and they were never filed with the IRS. This

application was unsuccessful.

WIREFRAUD

16. On or about the dates set forth below in each Count, in the District of Oregon and

elsewhere, defendant, for purposes of attempting to execute and executing the above-described

material scheme to defraud and for obtaining money and property by means of materially false

and fraudulent pretenses, representations, and promises caused the following communications

via int~rstate wire:

Ill

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COUNT DATE DESCRIPTION OF EXECUTION \

1 January 5, 2021 Online application to the IRS for an EIN, transmitted
from Oregon to West Virginia
2 February 24, 2021 Submission of PPP loan application number 25629914~
transmitted from Oregon to New York
3 April 14, 2021 Submission of PPP second draw loan application
i . '
number 28658540, transmitted from Oregon to New
York

All in violation of 18 U.S.C. § 1343.

FORFEITURE ALLEGATION

17. Upon conviction ot the wire fraud offenses alleged in Counts 1 through 3 of this

Indictment, or any of them, defendant shall forfeit to the United States pursuant to 18 U.S.C.

§ 982(a)(l), any and all property, real or personal, involved in or derived from said offense and

all property traceable to such property, including but not limited to a money judgment for a sum

of money equal to the amount of property involved in or derived from that offense.

18. If the above-described forfeitable property, as a 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;

(d) has been substantially diminished in value; or

(e) has been commingled with other property which cannot be divided without difficulty;

I II

II/

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Case 3:21-cr-00437-SI Document 1 Filed 11/17/21 Page 7 of 7

the United States of America shall be entitled to forfeiture of substitute property pursuant to 21
U.S.C. § 853(p), as incorporated by 18 U.S.C. § 982(b).

Dated: November I ·1, 2021 A TRUE BILL.

OFFICIATING FOREPERSON

Presented by:

SCOTT ERIK ASPHAUG
Acting United States }\ttomey

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