Indictment — United States v. Keith Anton Johnson, Southern District of Texas (Document 1)

Summary

A grand jury indictment of Keith Anton Johnson, Criminal No. 4:21-cr-123, in the U.S. District Court for the Southern District of Texas, filed March 10, 2021 as Document 1. Count 1 charges wire fraud under 18 U.S.C. § 1343. The indictment alleges that Johnson, an owner of KJR Entertainment Holdings LLC, which operated the Southerns bar and live music venue in Bryan, Texas, obtained a PPP loan of $123,500.00 through Prosperity Bank after answering NO to the SBA Form 2483 question on whether he was under indictment. It states that Johnson was then under a Harris County indictment for felony theft, cause number 1639125, returned on July 17, 2019. It also alleges that payroll information submitted on or about April 30, 2020 listed a former employee as still employed.

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“Indictment — United States v. Keith Anton Johnson, Southern District of Texas (Document 1).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-4-21-cr-00123-dkt-1-baee6a678d/, SHA-256 7011f7e41f0314a48bfeb201c179b47e7106237fac758708a97cb20db3d5fae5.

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Case 4:21-cr-00123 Document 1 Filed on 03/10/21 in TXSD Page 1 of 8
United States Courts
Southern District of Texas
FILED
UNITED STATES DISTRICT COURT March 10, 2021
SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk of Court
HOUSTON DIVISION

UNITED STATES OF AMERICA ' CRIMINAL NO.: 4:21-cr-123
'
v. ' 18 U.S.C. § 1343
' Wire Fraud (Count 1)
'
KEITH ANTON JOHNSON, '
'
Defendant. '

INDICTMENT

THE GRAND JURY CHARGES THAT:

GENERAL ALLEGATIONS

A. THE SCHEME TO DEFRAUD

1. From on or about April 30, 2020, in the Houston Division of the Southern District

of Texas, and elsewhere,

KEITH ANTON JOHNSON

defendant herein, did knowingly devise and intend to devise a scheme and artifice to defraud and

to obtain money and property by false and fraudulent pretenses, representations and promises,

from the United States Treasury, and in so doing, transmitted, or caused to be transmitted by way

of wire, radio, and television communication in interstate commerce any writing, sign, signal,

picture, and sound for the purpose of executing such scheme, all as more fully set forth below.
Case 4:21-cr-00123 Document 1 Filed on 03/10/21 in TXSD Page 2 of 8

B. GENERAL ALLEGATIONS

1. Defendant KEITH ANTON JOHNSON was a resident of Bryan/College Station

area of Texas, within the Southern District of Texas.

2. In or about January 2020 through July 2020, Defendant KEITH ANTON

JOHNSON, in conjunction with others, owned and operated KJR Entertainment Holdings LLC

(KJR Entertainment), a corporation registered in the State of Texas. The primary concern of

KJR Entertainment was the operation of a bar and live music venue in Bryan, Texas within the

Southern District of Texas named “Southerns.”

The Small Business Administration

3. The United States Small Business Administration (“SBA”) was an executive-

branch agency of the United States government that provided 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.

The Paycheck Protection Program

4. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal

law enacted in or around March 2020 that was 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 authorization of up to $349

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

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Case 4:21-cr-00123 Document 1 Filed on 03/10/21 in TXSD Page 3 of 8

a program referred to as the Paycheck Protection Program (“PPP”). In or around April 2020,

Congress authorized over $300 billion in additional PPP funding.

5. In order to obtain a PPP loan, a qualifying business was required to submit a PPP

loan application 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. In the PPP

loan application, the applicant (through its authorized representative) was required to state, among

other things: (a) its average monthly payroll expenses; and (b) its number of employees. These

figures were used to calculate the amount of money the small business was eligible to receive under

the PPP. In addition, the applicant was required to provide documentation showing its payroll

expenses.

6. Application forms for the PPP provided by the SBA required the applicant to certify

and attest to various qualifiers, including Question #5 on SBA Form 2483, “Are you presently

subject to an indictment, criminal information, arraignment, or other means by which formal

charges are brought in any jurisdiction, or presently incarcerated, on probation or parole?”

7. A business’s PPP loan application was received and processed, in the first instance,

by a participating lender. If a PPP loan application was approved, the participating lender funded

the PPP loan using its own monies. Data from the application, including information about 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.

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Case 4:21-cr-00123 Document 1 Filed on 03/10/21 in TXSD Page 4 of 8

8. PPP loan proceeds were required to be used by the business on certain permissible

expenses: payroll costs, interest on mortgages, rent, and utilities. The PPP allowed the interest

and principal on the PPP loan to be entirely forgiven if the business spent the loan proceeds on these

expense items within a designated period of time after receiving the proceeds and used a certain

amount of the PPP loan proceeds on payroll expenses.

C. MANNER AND MEANS OF THE SCHEME TO DEFRAUD

9. On April 30, 2020, defendant KEITH ANTON JOHNSON (JOHNSON) submitted

an update loan application for PPP funds based on his representations of the current payroll of

“Southerns.” He submitted the application in his personal capacity and in his capacity as a director

of KJR Entertainment.

10. Defendant JOHNSON’s application was submitted to participating lender Prosperity

Bank, based in El Campo and Houston, Texas. During the application process, participating

lender Prosperity Bank transmitted, via wire and email transmission, portions of defendant

JOHNSON’s application to the Small Business Administration disbursement agencies, whose

servers are located in Little Rock, Arkansas and Raleigh, North Carolina, these transactions moving

in interstate commerce.

11. Based on representations defendant JOHNSON made on his April 6, 2020 initial

application and his April 30, 2020 updated loan application, the SBA granted JOHNSON a PPP

loan of $123,500.00 to fund payroll, rent, and utilities for KJR Entertainment and the “Southerns”

venue. Prosperity Bank disbursed those funds to Johnson and KJR Entertainment and was

4
Case 4:21-cr-00123 Document 1 Filed on 03/10/21 in TXSD Page 5 of 8

reimbursed through the PPP program and the SBA, with the monies drawn from the United States

Treasury.

12. The SBA Form 2483 submitted by defendant JOHNSON to Prosperity Bank on

April 30, 2020, contains a qualifying question which reads: “Is the Applicant (if an individual) or

any individual owning 20% or more of the equity of the Applicant subject to an indictment, criminal

information, arraignment, or other means by which formal charges are brought in any jurisdiction,

or presently incarcerated, on probation or parole?” Defendant JOHNSON answered “NO” by

checking a box and then initialed a statement declaring that all of the information contained in the

loan application was true. This statement was signed under penalty of perjury. The SBA form

Defendant JOHNSON submitted on April 6, 2020 contains a similar question, and Johnson again

stated “NO” when asked if he was under indictment.

13. In fact, at the time he applied for PPP funds through Prosperity Bank, defendant

JOHNSON was under indictment in Harris County, Texas for the felony offense of Theft-

Aggregate, over Three Hundred Thousand Dollars, as reflected by indictment cause number

1639125. That indictment was returned by a Harris County, Texas Grand Jury on July 17, 2019.

14. The Harris County felony indictment cause number 1639125 was assigned to the

338th District Court of Texas, sitting in Harris County, Texas. Defendant JOHNSON made several

personal appearances in the case and retained an attorney to represent him in the matter.

Defendant JOHNSON’s indictment cause number 1639125 remains pending in the 338th District

Court.

15. On or about April 30, 2020, Defendant Johnson submitted to Prosperity Bank

required payroll information purporting to be that of current employees of the “Southerns” venue,

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Case 4:21-cr-00123 Document 1 Filed on 03/10/21 in TXSD Page 6 of 8

employed by KJR Holdings, to justify the basis for a PPP loan. On these forms, Johnson

submitted payroll information that claimed J. F., a one-time employee of “Southerns,” was still

currently employed by “Southerns” and had received his monthly salary of $7,211.55 on March 12,

2020.

16. In fact, at the time of defendant JOHNSON’s application, J.F. was no longer

employed at “Southern’s,” having quit in January of 2020. Former employee J.F. received his

final paycheck on January 18, 2020.

D. EXECUTION OF THE SCHEME

COUNT ONE

16. The Grand Jury re-alleges and incorporates by reference the allegations in

paragraphs 1-15, as if fully set forth herein.

17. On or about April 30, 2020, in the Southern District of Texas and elsewhere, the

defendant,

KEITH ANTON JOHNSON,

did knowingly devise and intend to devise a scheme and artifice to defraud the Small Business

Administration, an executive branch agency of the United States Government, by means of

materially false and fraudulent pretenses and representations, namely by causing Prosperity Bank

to disburse funds via SBA Loan # 24847873 to accounts controlled by KEITH ANTON

JOHNSON and to be reimbursed by the Small Business Administration, through a series of false

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Case 4:21-cr-00123 Document 1 Filed on 03/10/21 in TXSD Page 7 of 8

and fraudulent statements, namely that he was not currently under indictment when in fact at the

time of the application he was under indictment for a felony offense in Harris County, Texas

under cause number 1639125, transmitted via wire transaction between KEITH ANTON

JOHNSON, Prosperity Bank and the Small Business Administration in Bryan, Texas, Little Rock,

Arkansas, and Raleigh, North Carolina in interstate commerce in furtherance of executing the

scheme.

All in violation of Title 18, United States Code, Section 1343.

NOTICE OF CRIMINAL FORFEITURE

(18 U.S.C. § 982(a)(7); 18 U.S.C. § 981(a)(1)(C))

Pursuant to Title 18, United States Code, Section 982(a)(7), the United States gives notice

that upon Defendant’s conviction of any wire fraud offense charged in this Indictment, the United

States will seek forfeiture of all property, real or personal, that constitutes or is derived, directly or

indirectly, from gross proceeds traceable to the commission of such offenses.

Pursuant to Title 18, United States Code, Section 981(a)(1)(C) and Title 28, United States

Code, Section 2461(c), the United States gives notice that upon Defendant’s conviction of wire

fraud offenses charged in this Indictment, the United States intends to seek forfeiture of all property,

real or personal, which constitutes or is derived from proceeds traceable to such offenses.

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MONEY JUDGMENT AND SUBSTITUTE ASSETS

The United States gives notice that it will seek a money judgment against the Defendant.

In the event that one or more conditions listed in Title 21, United States Code, Section 853(p) exist,

the United States will seek to forfeit any other property of the Defendant up to the amount of the

money judgment.

A TRUE BILL

Original Signature on file
_________________________________
FOREPERSON OF THE GRAND JURY

JENNIFER LOWERY
Acting United States Attorney
Southern District of Texas

By: __________________________
THOMAS H. CARTER
Assistant United States Attorney
Southern District of Texas

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