Indictment — United States v. Christopher Lee Carroll and George Reed, Eastern District of Missouri (Doc. 2)

Summary

A grand jury indictment against Christopher "Chris" Lee Carroll and George Reed, Case 4:21-cr-00532-SEP, filed September 29, 2021 as Doc. 2 in the U.S. District Court for the Eastern District of Missouri, Eastern Division. It alleges that from about March 2020 through at least March 2021 the defendants, managers of the timeshare exit company Square One Group, LLC, executed a scheme to defraud Enterprise Bank and Trust through First and Second Draw PPP loan applications. It alleges the first application sought $1,247,820.30 based on 97 listed employees, 60 of them commission-based sales staff, and that the defendants' names did not appear on it. It alleges the proceeds were used to acquire assets including vehicles and land, and that Chris Carroll was on parole in Missouri until December 9, 2020. The signature block names United States Attorney Sayler A. Fleming.

Summary drafted by a model from the text of the original file linked on this page and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

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“Indictment — United States v. Christopher Lee Carroll and George Reed, Eastern District of Missouri (Doc. 2).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-4-21-cr-00532-dkt-2-e-d-mo-b23db6cbf2/, SHA-256 ab8b9ac23a38de01fcaafa1b7d4179d6d8624647a76e61030478ab97b0268689.

Full text

Case: 4:21-cr-00532-SEP Doc. #: 2 Filed: 09/29/21 Page: 1 of 23 PageID #: 27
f!LED
SEP 2 9 2021
UNITED STATES DISTRJCT COURT
U. S. DISTRICT COURT
EASTERN DISTRJCT OF MISSOURI EASTERN DISTRICT OF MO
EASTERN DIVISION ST. LOUIS

UNITED STATES OF AMERJCA, )
)
Plaintiff, )
v.
~~--~-----__:___~)
) ~

CHRISTOPHER"CHRIS"LEECARROLL, ~ 4:21CR532 SEP/SRW I

and )
)
GEORGE REED, )
)
Defendants. )
)

INDICTMENT

The Grand Jury charges that, at all times relevant to the Indictment:

I. From in or about March 2020 through in or about at least March 2021, Defendant

CHRISTOPHER "CHRIS" LEE CARROLL ("Defendant Chris Carroll") and Defendant

GEORGE REED ("Defendant George Reed") (collectively "the Defendants") engaged in a

scheme to defraud a federally insured financial institution and to engage in monetary transactions

in property derived from specified unlawful activity, all in violation of 18 U.S.C. § § 1344 and

1957.

2. Defendant Chris Carroll and Defendant George Reed sought and obtained funds

from the Paycheck Protection Program by means of material misrepresentations, to wit, that they

would use those funds to compensate their employees, when in truth and fact, the Defendants used

the loan proceeds to acquire assets, including vehicles and land, and to fund deposits into the

Defendants' personal bank accounts.

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INTRODUCTION

3. At all times relevant herein, Defendant Chris Carroll and Defendant George Reed

resided within the Eastern District of Missouri.

4. Defendant Chris Carroll was convicted of a felony offense in 1995 and was on

parole in the State of Missouri until December 9, 2020.

THE PAYCHECK PROTECTION PROGRAM

5. The United States Small Business Administration ("SBA") is ~ Executive-branch

agency of the United 1States government that provides support to entrepreneurs and small

businesses. The mission of the SBA is to maintain and strengthen the nation's economy by

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

after disasters.

6. The Coronavirus Aid, Relief, and Economic Security ("CARES") Act, Pub. L. No.

116-136,134 Stat. 281 (2020), is a federal law that was enacted in or around March 2020 to provide

emergency financial assistance to the millions of Americans suffering the economic impact caused

by the COVID-19 pandemic. One source of relief provided for in the CARES Act was the

authorization of forgivable loans to small businesses for job retention and certain other expenses

through the Paycheck Protection Program ("PPP"). The purpose of loans issued under the PPP was

to enable small businesses suffering from the economic downturn to continue to.pay salary, wages

and to provide benefits, such as health insurance coverage, to their employees.

7. 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 to acknowledge the program rules and make certain affirmative certifications
-- -
to obtain the PPP loan. In the PPP loan application (SBA Form 2483), the small business (through

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its authorized representative) was required to certify: (a) that the small busin~ss was in operation

on February 15, 2020; (b) the average monthly payroll expenses; and (c) the numberof employees.

These certifications were used to calculate the amount of money the small business was permitted

to receive under the PPP. In addition, businesses applying for PPP loans were required to submit

documentation supporting their payroll expenses.

8. PPP loan funds were required to be used only on certain permissible expenses,

including payroll costs, mortgage interest, rent and utilities for the business; In the PPP loan

application (SBA Form12483), the borrower was required to certify that "[a]ll SBA loan proceeds

will be used only for business-related purposes as specified in the loan applicaticm anq. consistent

with the Paycheck Protection Program Rule." In that same application, the borrower was also

required to certify that "[t]he funds will be used to retain workers and ·maintain payroll or make

mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck

Protection Program Rule."

9. The application advised the borrower that "[w]ith respect to 'purpose of the loan,'

payroll costs consist of compensation to employees (whose principal place of residence is the

United States) in the form of salary, wages, commissions~ or similar compensation," including

"payment for the provision of employee benefits consis,ting of group health care cove~age

including insurance premiums" (emphasis added).

10. The application asked whether "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 criminal charges are brought in any jurisdiction, or

presently incarcerated, or on probation or parole?" Applicants were required to certify a "yes" or

"no" response to that question.

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11. Further, the application asked whether "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 pretrial diversion; or 5) been placed on any form of

parole or probation (including probation before judgment)?" Applicants were required to certify

a "yes" or "no" response.

12. The PPP application further advised the borrowers that "if the funds are knowingly

used for unauthorized ,purposes, the federal government may hold me legally:liable, such as for

charges of fraud."

13. After the borrower submitted the PPP loan application, that application was then

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

lender funded the loan using its own monies, which were then guaranteed by the SBA. Generally,

in the event that the borrower defaulted on a PPP loan, the SBA would purchase the borrower's

debt from the lending financial institution and take on the responsibility for paying back the loan.

14. Under the applicable PPP rules and guidance, recipients of PPP loans could apply

to have the interest and principal on the PPP loan fully forgiven, meaning that the borrower would

owe nothing and would ha,ve no obligation to repay the PPP loan. To obtain full forgiveness of

the PPP loan, borrowers had to attest that they had "not reduced the number of employees or the

average paid hours of [their] employees" during the loan period, that the loan proceeds had been

spent on payroll costs and other permitted expenses and that at least 60% of the loan proceeds had

been spent on payroll costs.

15. Borrowers who qualified for and received a "First Draw" PPP loan were permitted,

to apply for a "Second Draw" PPP loan, provided that the borrower had (a) previously received a

First Draw PPP loan and had used the full amount only for authorized uses; (b) had no more than

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300 employees; and (c) could demonstrate at least a 25% reduction in gros:j! receipts between

comparable quarters in 2019 and 2020.

16. Like the First Draw PPP loans, Second Draw PPP loans could only be used for

certain permitted expenses, such as to fund payroll costs and employee benefits, such as health

insurance, to pay for,mortgage interest, rent, utilities or worker protection costs related to COVID-

19.

17. In obtaining a Second Draw PPP loan, borrowers were required. to certify that they

had used the First Draw PPP loan only for permitted expenses.

SQUARE ONE GROUP, LLC

18. Square One Group, LLC ("Square One Group") was a timeshare exit company that

offered to assist individuals in extricating themselves from the ownership or lease of unwanted

timeshare properties. Square One O-roup employed teams of travelling salespeople who met with
•.
potential Square One Group customers and gave sales presentations marketing Square One

Group's timeshare exit services.

19. Square One Group was registered as a corporation with the Missouri Secretary of

State's Office on or about September 17, 2019. According to documents filed with the Missouri

Secretary of State's Office, Square One Group had a principal office address located at 120 South

Central Avenue, Clayton, Missouri, 63105, which is located within the Eastern District of

Missouri.

20. Square One Group's Limited Liability Company Operating Agreement, dated

September 17, 2019, described Square One Group as a "manager-managed limited liability

company," and provided that Square One Group "shall be managed" by Defendant Chris Carroll

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and Defendant George Reed. Defendants Chris Carroll and George Reed were the only two

signatories to Square One Group's Operating Agreement.

21. Square One Group's Operating Agreement further provided that Defendant Chris

Carroll and Defendant George Reed "shall have full and complete authority, power and discretion

to manage and control the business, affairs and properties of the Company, to, make all decisions

regarding those matters and to perform any and all acts or activities customary or incident to the

management of the Company's business."

22. Defendant Chris Carroll and Defendant George Reed each received an annual

salary of $265,000.00 1from Square One Group, which they were paid in ~eeldy installments of

$5,000.00.

23. Defendant Chris Carroll and Defendant George Reed were also compensated by

Square One Group by means of "owner disbursements" drawn on Square One Group's operating

accounts. At Defendant Chris Carroll and Defendant George Reed's direction, multiple times per

year, Square One Group's Director of Finance would make simultaneous owner draw payments to

Defendant Chris Carroll and Defendant George Reed in equal amounts ranging from $1,000.00 to

$250k000.00. Defendant George Reed's compensation was cilways made payable to "LAR," his
·,

wife, ,but the funds were deposited into a joint account held by Defendant George Reed and his

wife.

24. Approximately two-thirds of Square One Group's employees were sales staff.

Square One Group's revenue was generated by the sales made by the sales staff. These sales staff

did not receive a salary, but instead, were paid by a commission that was a percentage of any sales

of Square One Group's timeshare exit services that a sales staff member was able to make. Sales

staffs compensation was tied solely to their successful sale of Square One Group's services. If a

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customer later cancelled the payment to Square One Group, the sales staff member's commission

was reduced accordingly.

25. Approximately one-third of Square One Group's employees were salaried staff

responsible for managing the business operations and administrative business functions of Square

One Group. One member of the salaried staff was "MTt Square One Group's Director ofFinance,

whose respons1bilities included calculating sales commission payments to the sales staff.

26. Square One Group maintained two bank accounts at Enterprise Bank, account·

***0058 and account i"'** 1234. These accounts, to which Defendant Chris Carroll and Defendant

George Reed were signatories, were used to handle Square One Group's business transactions,

including payroll payments, payment of operating expenses, and to receive deposits of customer

payments generated by the sales teams.

27. Enterprise Bank and Trust ("Enterprise Bank") was a financial institution within

the meaning of Title 18, United States Code,§§ 20 and 1344, the deposits of which were insured

by the Federal Deposit Insurance Corporation.

THE SCHEME TO DEFRAUD

; 28. From in or about March 2020 through in or ab0ut at least March 2021, Defendant

Chris Carroll and Defendant George Reed knowingly executed iand attempted to execute a scheme

and artifice to defraud Enterprise Bank and Trust and to obtain moneys, funds, assets, and other

property owned by, and under the custody and control of Enterprise Bank and Trust by means of

materially false and fraudulent pretenses, representations, and promises, to wit, false and

fraudulent representations in the applications for First and Second Draw PPP loans issued to

Square One Group and in the application for forgiveness of the First Draw PPP loan issued to

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Square One Group, all in violation of 18 U.S.C. § 1344. The manner and means of the scheme to

defraud were as follows:

THE DEFENDANTS MADE MATERIAL MISREPRESENTATIONS IN
SQUARE ONE GROUP'S FIRST DRAW PPP LOAN APPLICATION

29. In or alJout early April 2020, Defendant Chris Carroll, in consultation with

Defendant George Reed, directed Square One Group's Director of Finance, MT, to apply for a

PPP loan through Enterprise Bank, the financial institution where Square One Group had its
\ I

operating accounts.

30. Acting on instructions from Defendant Chris Carroll and Defendant George Reed,

MT completed the First Draw PPP loan application on behalf of Square One Group to obtain what

Defendant Chris Carroll described as "$1.6 million in free dollars." As a part of that application,

Square One Group submitted to Enterprise Bank a payroll spreadsheet listing employee

compensation. That payroll spreadsheet identified 97 Square One Group employees. Square One

Group sought a PPP loan in the amount of$1,247,820.30, a figure which was based on the average

monthly compensation during January and February 2020 of the 97 employees listed in the payroll

spreadsheet. Of the 97 employees listed in Square One Group's PPP loan application, 60 were
'
commission-based sales staff.

31. The loan application did not identify Defendant George Reed or Defendant Chris

Carroll as the representatives of the applicant borrower. The loan application listed MT as the

representative of Square One Group, and listed the wife ofDefendc,lllt Chris Carroll, "KAC," and

the wife ofDefendfil?-t George Reed, LAR, as Square One Group's managers. At the time of the

submission of the PPP loan application, K.AC had never had any role in the operation of Square

One Group. LAR had a minimal role in the company consisting of minor administrative tasks she

completed at the direction of Defendant George Reed. KAC and LAR had no physical presence

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at the company and no involvement in decisions impacting the business. The namt;s of Defendant

Chris Carroll and Defendant George Reed were omitted from and did not appear on the face of the

loan application.

32. In the application, with the knowledge and approval of Defendant Chris Carroll and

Defendant George Reed, MT responded "no" to the question whether "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 criminal charges

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

33. In the:application, with the knowledge and approval of Defendant Chris Carroll and

Defendant George Reed, MT responded "no" to the question whether "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 pretrial diversion; or 5) been

placed on any form of parole or probation (including probation before judgment)?" Applicants

were required to certify a "yes" or "no" response to that question.

34. In truth and in fact, at the time the PPP application was completed and submitted,

as both Defendant Chris Carroll and Defendant George Reed knew, Defendant Chris Carroll, who

was an: owner of Square One Group, was on parole following a term of imprisonment arising from

a felony conviction. MT did not know this fact at the time Mt completed and submitted the First

Draw PPP loan application.

35. As part of the Joan application, Enterprise Bank required Square One Group to

submit the company's Operating Agreement, which identified Defendant Chris Carroll and

Defendant George Reed as Square One Group's managers,.'

36. Defendant Chris Carroll and Defendant George Reed caused MT to certify falsely

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on behalf of Square One Group that:

The funds will be usedrto retain workers and maintain payroll or make mortgage
interest payments, lease payments, and utility payments as specified under the
Paycheck Protection Program Rule[.]

37. At the direction of Defendant Chris Carroll ·and Defendant George Reed, MT

submitted the First Draw PPP loan application on behalf of Square One Group 9n or about April

6, 2020.

38. Following the submission of the First Draw PPP loan applica1iion, Enterprise Bank,

in reliance on Square· One Group's representations in its loan application, approved the First Draw

PPP loan in the amount of $1,247,800.00.

39. Enterprise Bank required that Defendant Chris Carroll and Defendant George Reed,

as Square One Group's two managers identified in the Operating Agreement, sign the note for the

loan before the loan proceeds could be disbursed. On or about April 28, 2020, Defendant Chris

Carroll and Defendant George Reed signed the note for the First Draw PPP loan on behalf of

Square One Group.

40. In signing the First Draw PPP loan note, Defendant Chris Carroll and Defendant

George Reed acknowledged theit understanding that the loan would be defaulted if they were to

"mak~[]; or anyone acting on their behalf makes, a materially false or misleading representation

to Lender or SBA."

41. On May I, 2020, $1,247,800.00 in First Draw PPP loan proceeds was deposited

into Square One Group's Enterprise Bank account ***0058.

42. Enterprise Bank and Trust ("Enterprise Bank") was a financial institution within

the meaning.of Title 18, United States Code,§§ 20 and 1344, the deposits of which were insured

by the Federal Deposit Insurance Corporation.

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DESPITE THEIR CERTIFICATION IN THE FIRST DRAW PPP APPLICATION,
THE DEFENDANTS DID NOT USE PPP FUNDS .
TO COMPENSATE SQUARE ONE GROUP'S EMPLOYEES

43. Defendant Chris Carroll and Defendant George Reed never used or att~mpted to

use the PPP funds to compensate Square One Group's employees or to maintain their benefits.

Even after Square One Group received PPP funds, Defendant Chris Carroll and D,efendant George

Reed continued to compensate their sales staff by means of commissions made from revenue

actually generated by those employees. Defendant Chris Carroll and Defendant George Reed

"furloughed," in other words, sent home without compensation, their sales staff at the outset of the

COVID-19 pandemic.as a result of the reduced sales opportunities available during the pandemic.

44. Even after receipt of the PPP loan proceeds, Defendant Chris Carroll and·Defendant

George Reed did not inform the employees of Square One Group that the company had received

more than $1.2 million in PPP loan proceeds that were intended primarily to provide employee

compensation. Instead, Defendants George Reed and Defendant Chris Carroll continued to require

that their sales staff make sales and generate revenue in order to receive compensation, despite the
'
fact that to make in-person sales, employees would have to trav.el during a global pandemic and

meet in-person with potential cµstomers.

46. Defendant George Reed and Defendant Chris Carroll did offer sales staff the

· opportunity to attempt to make sales via online meetings and debt collection phone calls to existing

customers, but when those meetings proved substantially less profitable than in-person sales,

Defendant Chris Carroll and Defendant George Reed did not offer to supplement the significantly

reduced commissions of the sales staff using the PPP funds, despite Square One Group's

representation that they would use the PPP funds "to retain workers and maintain payroll."

46. When sales staff expressed concerns about not receiving compensation to

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Defendant Chris Carroll, he instructed them that they could collect unemployment l;>enefits, despite .

the fact that Square One,Group had received over $1.2 million in First Draw PPP funds intended

to provide employee compensation.

47. When sales staff were unable to make sales as a result of the pandemic, Defendant

Chris Carroll instructed ·MT to suspend employees' health insurance benefits. _,

48. During the covered period of the First Draw PPP loan, which was from May 1,

2020 until October;l5, 2020, Defendant Chris Carroll and Defendant Ge~rge Reed did make

payroll payments equal to the amount of the PPP loan, but the sole source of compensation for

Square One Group's sales staff was the commissions on sales revenue generated by the employees

themselves. Although Defendant Chris Carroll and Defendant George Reed continued to make

payroll payments, they did so with the revenue generated by the sales staff. If a sales staff member

did not generate revenue, Defendant Chris Carroll and Defendant George Reed did not compensate

that person.

49. During the covered period of the loan, Square One Group's sales staff was able to

generate sufficient revenue to pay all of Square One Group's•operating costs, incJ:uding payroll

costs for
.
the approximately one-third of the employees who were salaried staff.
'

:50. Despite the COVID-19 pandemic, at the directio:n of Defendant Chris Carroll and

Defendant George Reed, the sales staff resumed travel in Jun~ of 2020.' Defendant Chris Carroll

and Dyfendant George Reed did not use the First Draw PPP loan proceeds to provide the
' ,

furloughed employees with backp~y for the time that they had, been unable to earn commissions.

Defendant Chris Carroll and Defendant George Reed also did not use First Draw PPP funds to

compensate those employees for out-of-pocket medical costs the employees had incurred because

Square One Group had suspended their health insurance coverage during the furlough period.

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THE DEFENDANTS, USED FIRST DRAW PPP LOAN PROCEEDS TO J;rUND THE
STARTUP OF WHISKEY DIX BIG TRUCK REPAIR,
SQUARE ONE LOGISTICS & SQUARE ONE TRANSPORT

51. The First Draw PPP loan proceeds in the amount of $1,247,800.00 were deposited

into Square One Group's Enterprise Bank account ***0058 on May 1, 2020.

52. Beginning on May 15, 2020 and continuing through June 2020,,Defendant Chris

Carroll and Defendant George Read spent $1.9 million :from the Square .One Group operating

account ***0058 to acquire trucks, trailers, and land to start three new businesses unrelated to

Square One Group's timeshare exit business.

53. The three new businesses started by Defendant Chris Carroll and Defendant George

Reed were Whiskey Dix Big Truck Repair; Square One Logistics; and Square One Transport.

Whiskey Dix Big Truck Repair was a truck repair business located in Bourbon, Missouri in the

Eastern District of Missouri. Square One Transport was a trucking company that provided :freight

transport services and was located on the same property as Whiskey Dix Big Truck Repair. Square

One Logistics is a holding company that owns the assets, including land and trucks, that were

acquired by Defendant Chris Carroll and Defendant George Reed to start Whiskey Dix Big Truck

Repair and Square One Transport and Logistics.

54. On May 15, 2020, Defendant Chris Carroll and Defendant George Reed caused the

filing of Articles of Organization for Square One Logistics, LLC with the Missouri Secretary of

State.

55. On May 15, 2020, Defendant George Reed wired $354,550.00 from, Enterprise

Bank account ***0058 to Taylor and Martin Auctioneers for the purchase of 12 trucks.

56. On May 22, 2020, Defendant Chris Carroll and Defendant George Reed caused the

wiring of $563,035.00 from Enterprise Bank account ***0058 to Taylor & Martin Auctioneers for

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the purchase of24 trucks, ;vans and trailers.

57. On May 26, 2020·, Defendant Chris Carroll and Defendant George Reed caused the

transfer of $140,000.00 from Enterprise Bank account ***0058 to TNT sales for the purchase of

five trailers.

58. On May 26, 2020, Defendant Chris Carroll and Defendant George Reed registered

Whiskey Dix Big TruckRepair, LLC with the Missouri Secretary of State. ,

59. On June 2, 2020, Defendant Chris Carroll made a payment of $47,000.00 from

Enterprise Bank account ***0058 to Twin City Auto and Towing for the purchase of one truck.

60. On Jime 4, 2020, Defendant Chris Carroll and Defendant George Reed caused the

transfer of$27,153.58 from Enterprise Bank account ***0058 to Ritchie Bros Auctioneers for the

purchase of one truck.

61. On June 5, 2020, Defendant Chris Carroll and Defendant George Reed caused the

transfer of $42,000.00 from Enterprise Bank account* **0058 to Taylor& Martin Auctioneers for

the purchase of one truck.
, '

62. On June 11, 2020, pefendant Chris Carroll and D~fendant George Reed caused the

issuance of a payment of $698,683.29 from Enterprise Bank **l"0058 to Crawford County Title

for the purchase of land in Bourbon, Missouri that became the :site of Whiskey Dix Big Truck

Repair and Square One Transport.

63. On June 18, 2020, Defendant Chris Carroll and Defendant George Reed caused the

filing of Articles of Organization for Square One Transport, LLC with the Missouri Secretary of

State.

64. On June 19, 2020, Defendant Chris Carroll and Defendant George Reed caused the

issuance of a payment in the amount of $32,025.00 from Enterprise Bank account ***0058 to

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Taylor & Martin Auctioneers for the purchase of two trucks.

65. Prior to their receipt of the First Draw PPP loan proceeds, Defendant Chris Carroll

and Defendant George Reed had not ·acquired any assets for Whiskey Dix Big Truck Repair,

Square One Transport or Square One Logistics.

66. Without the deposit of $1.2 million in First Draw PPP money, Defendant Chris

Carroll and Defendant George Reed did not have sufficient funds in Square One Group's bank

accounts to start vthiskey Dix Big Truck Repair, Square One Logistics and Square One Transport.

THE DEFENDANTS MADE MATERIAL MISREPRESENTATIONS IN THEIR
APPLICATION FOR FORGIVENESS OF THE FIRST DRAW PPP LOAN

67. On November 24, 2020, Defendant George Reed, with the knowledge of Defendant

Chris Carroll, completed and submitted an application for forgiveness of the full amount of Square

One Group's $1,247,800.00 First Draw PPP loan.

68. In Square One Group's First Draw PPP loan forgiveness application, Defendant

George Reed falsely indicated that Square One Group had "not reduced the number of employees

or the average paid hours of [their] employees between January 1, 2020 and the end of the Covered

Period," despite the fact that, as Defendant Chris Carroll and Defendant George Reed knew,

Square One Group had :furloughed its sales force and suspended their compensation for a period

of more than two months.

69. In that forgiveness application, the sole co.st Defendant George Reed listed on

behalf of Square One Group in support of forgiveness was Square One Group's payroll cost.

Defendant George Reed falsely certified on behalf of Square One Group that the "dollar amount

for which forgiveness is requested was used to pay costs that are eligible for forgiveness [and] ...

.•, included payroll costs equal to at least 60% of the forgiveness amount[.]"

70. Defendant George Ree~ :further certified that "I understand that if the funds were

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knowingly used for unauthorized purposes, the federal government may pursue recovery of loan

amounts and/or civil or criminafiraud charges."

71. After Defendant George Reed submitted the application, based upon the

representations in that application, Enterprise Bank approved Square One Group's application for

forgiveness, and Square One Group was absolved of any obligation to repay the First Draw PPP

loan.

THE DEFENDANTS MADE MATERIAL MISREPRESENTATIONS IN SQUARE
ONE GROUP'S SECOND DRAW PPP LOAN APPLICATION

72. On or about January 21, 2021, Defendant George Reed caused the submission to

Enterprise Bank of a Second Draw PPP loan application on behalf of Square One Group.

73. Defendant George Reed caused the Second Draw PPP loan application to be

completed in the name of his wife, LAR, rather than his own name or the name of Defendant Chris

Carroll.

74. Defendant George Reed knowingly caused the submission of false certification in

the Second Draw PPP loan application that Square One Group had used "the full amount of the

First Draw PPP loan (including any increase) of the First Draw Paycheck Protection Program Loan

for permitted expen~es."

75. Defendant George Reed knowingly caused the submission of a false certification

in the Second Draw PPP loan application that Square One Group would use the PPP funds "to

retain workers and maintain payroll."

76. After Defendant George Reed caused the submission of the Second Draw PPP loan

application to Enterprise Bank, the bank, in·reliance on the representations made in the application,

approved the loan in the amount of $1,663,830.00. ,

77. On or about February 26, 2021, Defendant Chris Carroll and Defendant George

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Reed signed the note on the Second Draw PPP loan.

78. On March 1, 2021~ $1,663,830.00 in PPP loan proceeds was deposited int6·Bquare

One Group's Enterprise Bank account ***0058.

THE DEFENDANTS USED SECOND DRAW PPP LOAN PROCEEDS
TO COMPENSATE THEMSELVES

79. On March 5, 2021, four days after the deposit of the Second Draw PPP loan

proceeds, Defendant Chris Carroll cashed a $160,000.00 "owner draw" check drawn on Enterprise

account ***0058 ..

80. On ·March 12, 2021, Defendant Chris Carroll received a $250,000.00 "owner draw"

wire transfer from Enterprise Bank account ***0058 into his personal bank·:account.

81. On March 12, 2021, Defendant George Reed received a $250,000.00 "owner draw"

wire transfer from Enterprise Bank account *.**0058 into his personal bank account.

82. Without the deposit of the Second Draw PPP loan funds, Square One Group could

not have funded $660,000.00 in owner draws from Enterprise Bank account ***0058 over a seven-

day period to Defendant Chris Carroll and Defendant George Reed.

83. Even after Square One Group received the Second Draw PPP loan proceeds,

Defendant Chris Carroll and Defendant George Reed continued to require sales staff to travel in

an effort t6 make sales and continued to compensate them based solely on commissions generated

only from sales they were able to make.

84. Sales staff, who continued t0 be required to travel in an effort to make sales at the

direction of Defendant Chris Carroll and Defendant George Reed, were able to generate sufficient

revenue to fund Square One Group's operations, including the payroll payments for salaried staff.

85. As with the First Draw PPP loan proceeds, at no point did Defendant Chris Carroll

or Defendant George Reed offer to supplement or provide employee compensation using the

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Case: 4:21-cr-00532-SEP Doc. #: 2 Filed: 09/29/21 Page: 18 of 23 PageID #: 44

Second Draw PPP loan funds.

COUNTS 1-3
Bank Fraud {18 U.S.C. §§ 1344 & 2)

86. The allegations in paragraphs 1 through 85 are hereby realleged and incorporated

'herein.

87. From in or about at least March 2020 through at least in or about March 2021, in

the Eastern District of Missouri, the Defendants,

CHRISTOPHER "CHRIS" LEE CARROLL
and
GEORGE REED,

aiding and abetting each other, willfully and knowingly executed, and attempted· to execute, a

scheme and artifice to defraud a financial institution, the deposits of which were insured by the

Federal Deposit Insurance Corporation ("FDIC"), and to obtain moneys, funds, credits, assets,

securities, and other property owned by, and under the custody and control of, such financial

institutions, by means of false and :fraudulent pretenses, representations, and promises, to wit, the

Defendants engaged in a scheme to obtain over $2,900,000.00 in Government-guaranteed loans

from an FDIC-insured bank through the PPP by means of false and;:fraudulent and representations,

through and by means of the following executio.ns of the scheme: 1

COUNTi. DATE SUBMISSION TO ENTERPRISE BANK
1 April 6, 2020 First Draw PPP Loan Application submitted on behalf
of Square One Group
2 November 24, 2020 Application for Forgiveness of First Draw PPP Loan
issued to Square. One Group
3 January 21,,2020 Second Draw PPP Loan Application submitted on
'
behalf of Square One Group

All in violation of 18 U.S.C. §§ 1344 & 2.

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Case: 4:21-cr-00532-SEP Doc. #: 2 Filed: 09/29/21 Page: 19 of 23 PageID #: 45

COUNTS4-9
Money 'Laundering (18 U.S.C. §§ 1957 & 2)

88. The allegations in paragraphs 1 through 87 are hereby realleged and incorporated

herein;

89. On or about the dates described below, in the Eastern District of'Missouri, the

Defendants,

CHRISTOPHER "CHRIS" LEE CARROLL:
and
GEORGE REED,

aiding and abetting each other, did knowingly engage- and attempt to engage in monetary
l
: '-

transactions by, through or to a financial institution, affecting interstate or foreign commerce, in

criminally derived property of a value greater than $10,000, that is the transfer of fynds, such

property having been derived from a specified unlavVful activity, that is, bank fraud, in violation

of 18 U.S.C. § 1344, as follows:

COUNT DATE TRANSACTION
4 May 22, 2020 Wire Transfer of $563,035.00 from Enterprise Bank account
***0058 to Taylor and Martin Auctioneers.
5 ' May 26, 2020 Wire Transfer of $140,000.00 from Enterprise Bank account
***0058 to TNT Sales
6 1
June 11, 2020 Wire transfer of $698,683.29 to Crawford County Title
7 March 5, 2021 Deposit of $160,000.00 check drawn on Enterprise Bank
account ***0058 into personal banlc account of Defendant
Chris Carroll
8 March 12, 2021 Wire Transfer of $250,000.00 from Enterprise Bank account
***0058 to personal bank account of Defendant Chris Carroll
_.9 March 12, 2021 Wire Transfer of $250,000.00 from Enterprise Bank account
" ***0058 to personal bank account of Defendant Ge0rge Reed

All in violation of 18 U.S.C. §§ 1957 & 2.

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Case: 4:21-cr-00532-SEP Doc. #: 2 Filed: 09/29/21 Page: 20 of 23 PageID #: 46

FORFEITURE ALLEGATION

The Grand Jury further alleges there is probable cause that:

1. Pursuant to Titk 18, United States Code, Sections 981 and 982(a)(l) and Title 28,

United States Code, Section 2461, upon conviction of an offense in violation of Title 18, United

States Code, Sections 1344 and 1957, the Defendants shall forfeitto the United States of America

any property, real or personal, which constitutes or is derived from proceeds traceable to such

violation or any property involved in such violation. Subject to forfeiture is a sum of money equal

to the amount of $2,911,630.00 or to the total value of any property, real or personal, which

co~stitutes or is derived from proceeds traceable to such violation.

2. Pursuant to Title 18, United States Code, Sections 982(a)(2); upon conviction of 3.11

offense in violation of Title 18, United States Code, Section 1344 as set forth in Counts 1,2 and 3,

the Defendants shall forfeit to the United States of America any property constituting, or derived

from, any proceeds obtained, directly or indirectly, as a result of such violation. Subject to

forfeiture is a sum of money equal to the total value of any property, real or personal, constituting

or derived:from any proceeds traceable to such violation.

3. Pursuant to Title 18, United States Code, Sections 982(a), upon conviction of an

offense in violation of Title 18, United States Code, Section 1957, as set forth in Counts 4-9, the
i
Defendants shall forfeit to the United States of America any property, real or personal, involved

in such offense, and any property traceable to such property. Subject to forfeiture is a sum of

money equal to the total value of any property, real or personal, involved ~ such offense, or any

property traceable to such property.

· 4. Specific property subject to forfeiture includes, but is not limited to, the following:

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a. Approximately $250,000.00 in funds from bank account #***4356 at First State

Community Bank, Farmington, MO;

b. Approximately $11,530.98 in funds from bank account #***9779 at UMB Bank,

Kansas City, MO;
)

c. 380 Landon,Road, Bourbon, MO 65441, with all appurtenances, -attachments,

improvements, and fixtures_ thereon;

d. 2005 Wabash National Corp Van, VIN: 1JN532W75L942781;

e. 2008 Reitnouer-Flatbed, VIN: 1RND53A208R021231; ·, .

f. 2008 Reitnouer- Flatbed, VIN: 1RND53A228R021232; ;

g. 2008 Utility Trailer MFG- Van, VIN: 1UYVS25328G417011;

h. 2009 Trail King Lowboy, V~: 1TKJ048219W097519;

1. 2009 Utility Trailer MFG Van, VIN: 1UYVS25319P594201;

J. 2009UtilityTrailerMFG-Van, VIN: 1UYVS25389P594213;

k. 2009 Utility Trailer MFG-Van, VIN: 1UYVS25389P594311;

L 2009 Wabash National Corp- Van, VIN: 1JN532W29L316514;

m. 2012 East Manufacturing Flatbed, VIN: 1E1H5Y284CRG46525;

rr. 2013 International Prostar Tractor Truck --,- LF627 Premium, VIN:

3HSDJAPR1DN359175;

o. 2013 Kenworth Construction Tractor Truck - T600, VIN:

1XKAD49X3DJ334169;

p. 2013 Peterbilt 587 - Tractor Truck, VIN: 1XP4D49X1DD180695;

q. 2014 Great Dane Trailers- Van, VIN: 1GRAA0625EW701217;

r. 2014 Utility Trailer MFG Van, VIN: 1UYVS2532EU781202;

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s. 2014 Kenworth Construction - Tractor Truck - T680, VIN:

1XKYD49X8EJ400473; •-'

t. 2014 Peterbilt 389-Tractor Truck, VIN: 1XPXD49X0ED217699;

u. 2014 Reitnouer Trailer - Flatbed, VIN: 1RND53A24ER030526;

v. 2015 Peterbih 579-Tractor Truck, VIN: 1XPBD49X3FD279190;

w. 2015 Peterbilt 579 Tractor Truck, VIN: 1XPBD49X8FD279184; .

x. 2016 Kenworth Construction - Tractor Truck T680, VIN:

1XKYD49X2GJ484227;

y. 2016 Kenworth Construction - Tractor Truck - T680, VIN:

1XKYD49X2GJ49923 l;

z. 2016 Peterbilt 579 - Tractor Truck, VIN: 1XPBD49X9GD337336;

aa. 2016 Benson Trailer-Flatbed, VIN: 1TTE532A3G3917784;

bb. 2016 Fontaine Trailer - Flatbed, VIN: 13N1532C7G1517746;

~c. 2016 Fontaine Trailer - Flatbed, VIN: 13N1532C3G1518599;

dd. 2016 Fontaine Trailer-Flatbed, VIN: 13N1532C8G1518565;

ee. 2018 Great Dane Trailers - Van, VIN: 1GRAA0625JW1 l l 352; and

ff. 2020 Transcraft Corp-Flatbed, VIN: 1TTE532C0L3]97579,

5. If any of the property described above, as a result of any act or omission of the

Defendants:

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 of the court;

d. has been substantially diminished in value; or

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e. has been commingled with other property which cannot be divided

without difficulty, "~-'

the United States of America will be entitled to the forfeiture of substitute property pursuant to

Title 21, United States Code, Section 853(p).

DATED: - - - - - A TRUE BILL.

FOREPERSON

SAYLER A. FLEMING
United States Attorney

GWENDOLYN E. CARROLL #4657003NY
Assistant United States Attorney

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