Superseding Indictment — United States v. Jaleel Phillips and Jerry Phillips, District of Maryland

Summary

A Superseding Indictment in United States of America v. Jaleel Phillips and Jerry Phillips, a/k/a Tian Juzo, Criminal No. PWG-22-073, in the U.S. District Court for the District of Maryland, Document 44, filed 05/17/22 in Case 8:22-cr-00073-TDC. Count One charges Conspiracy to Commit Wire Fraud under 18 U.S.C. § 1349, alleging a conspiracy beginning in or about March 2020 and continuing until on or about February 16, 2022 involving PPP, EIDL and unemployment insurance benefit applications. It alleges that the defendants obtained and attempted to obtain more than $500,000 in the aggregate. Counts Two through Fifteen charge Wire Fraud under 18 U.S.C. § 1343, Counts Sixteen through Seventeen charge Transactions in Criminally Derived Property, and the caption also lists Possession of a Machine Gun.

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Case 8:22-cr-00073-TDC Document44 Filed 05/17/22 Page1of18

D____ ENTERED
1— ie RECEIVED

HG: USAO#2021R00199 MAY 17 2022
IN THE UNITED STATES DISTRICT COURT —_ tex us.0isTRIcT coueT
FOR THE DISTRICT OF MARYLAND BY casirees DEPUTY
UNITED STATES OF AMERICA : CRIMINAL NO. PWG-22-073
v. : (Conspiracy To Commit Wire Fraud,
: 18U.S.C. § 1349; Wire Fraud, 18 U.S.C.
JALEEL PHILLIPS, and : § 1343; Aggravated Identity Theft, 18 U.S.C. §
: 1028A; Transactions In Criminally Derived
JERRY PHILLIPS, : Property, 18 U.S.C. § 1957; Possession Of A
: Machine Gun, 18 U.S.C. § 922(0); Forfeiture,
a/k/a “TIAN JUZO,” : 18 U.S.C. § 981(a)(1)(C), 982(a),

21 U.S.C. § 853; 28 U.S.C. § 2461(c))
Defendants.

..000...

SUPERSEDING INDICTMENT

COUNT ONE — CONSPIRACY TO COMMIT WIRE FRAUD

The Grand Jury for the District of Maryland charges:

INTRODUCTION

At times material to this Superseding Indictment:

L. Defendants JALEEL PHILLIPS and JERRY PHILLIPS, a/k/a “TIAN
JUZO,” (collectively the “PHILLIPS BROTHERS”) lived in Temple Hills, Maryland and
Capitol Heights, Maryland.

2. Celtic Bank Corporation (“Celtic Bank”), Citibank (“Citi”), PNC Bank (“PNC”),
and Wells Fargo Bank, N.A. (“Wells Fargo”) were financial institutions as defined in 18 U.S.C.

§ 20. All of these entities are hereinafter collectively referred to as the “Financial Institutions.”
Case 8:22-cr-00073-TDC Document44 Filed 05/17/22 Page2of18

3. The Financial Institutions maintained records concerning financial
transactions in their accounts, including but not limited to records about the individuals
controlling the accounts, and in some instances, surveillance video and/or images, and
information about the identification documents used to open an account.

4, Financial institutions throughout the United States used a nine-digit number,
called a routing number, along with a bank account number, to determine the particular
financial institution and account that should receive funds from a wire transfer. Similarly,
financial institutions placed the routing number and account number on checks so a
receiving bank could draw on the funds and the account from which the check was issued.

Si Telegram Messenger LLP (“Telegram”) was a company that controlled an
encrypted online platform called Telegram, which allowed users to send text and voice messages,
communicate via voice and video calls, and share images, documents, user locations, and other
media. Users provided a cellular mobile number when registering with the service.

6. Zelle was a digital payments network owned by multiple financial institutions
in the United States. Zelle allowed users to electronically transfer money from their bank
account to another registered user’s bank account within the United States through a mobile
device or online banking system.

7. Robinhood Markets, Inc. (“Robinhood”) was a financial services company that
allowed customers to engage in commission-free trading of stocks, exchange-traded funds
(ETFs), and cryptocurrencies.

8. The Home Depot, Inc. (“Home Depot”) was a home improvement retailer that

supplied tools, construction materials, appliances, and services.
Case 8:22-cr-00073-TDC Document44 Filed 05/17/22 Page 3of18

9. Carvana Co. (“Carvana”) was an online used car dealer that allowed customers to
purchase a vehicle through the internet and pick up the vehicle from its multi-story car vending
machines or arrange for delivery of the vehicle to a customer’s residence.

10. Person #1 was a resident of Mississippi.

11. Identity Victims #1, #2, #3, #4, #5, and #6, were real persons living in
Virginia, Alaska, California, Massachusetts, Connecticut, and Iowa, respectively.

The Paycheck Protection Program

12. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal
law enacted in March 2020 to provide emergency financial assistance to Americans suffering from
the economic consequences of COVID-19.

13. The CARES Act authorized forgivable loans to small businesses for employee
retention and certain business expenses through a program called the Paycheck Protection Program
(“PPP”). The PPP authorized qualifying small businesses and other organizations to receive loans
guaranteed by the SBA. Each recipient business was required to use PPP loan proceeds on payroll
costs, mortgage interest, rent, and utilities. Loan forgiveness of the PPP loan principal was
possible if the loans were spent on qualifying expenses.

14. In order to calculate the amount of PPP funding, the SBA used a loan recipient’s
number of employees and average monthly payroll costs for the 12-month period prior to the

disaster.
Economic Injury Disaster Loan

15. | An Economic Injury Disaster Loan (“EIDL”) was an SBA-administered loan
designed for a small business suffering substantial economic injury due to a declared disaster. It
was designed so businesses could meet necessary financial obligations. The amount of the loan
offered as well as the advance amount were determined by the SBA based on the information
provided on the loan application. In or about March 2020, the SBA declared a disaster due to
COVID-19, thus making EIDL loans available nationwide.

16. EIDL funds were issued by the United States, and applicants applied for benefits
through the SBA via an online portal. The EIDL application process collected information
concerning the business and the business owner, including information as to the gross revenues
for the 12 months prior to the disaster; the cost of goods sold; and information as to any criminal
history of the business owner. Applicants electronically certified that the information provided
was accurate and were warned that any false statement or misrepresentation to the SBA or any
misapplication of loan proceeds may result in sanctions, including criminal penalties.

Unemployment Insurance

17. Unemployment insurance (“UI”) was a state-federal program that provided
monetary benefits to eligible workers. Although states administered their respective UI
programs, they did so in accordance with federal laws and regulations. Generally, UI benefits
were paid weekly based on a percentage of wages earned over a time period.

18. After states determined that a person was eligible for benefits, payments were
often made by either (a) direct deposit to a financial institution account or (b) by crediting the

benefits to a financial account that was linked to a prepaid debit card. The beneficiary could then
Case 8:22-cr-00073-TDC Document44 Filed 05/17/22 Page5of18

use the prepaid debit card to withdraw cash at ATMs or pay for goods and services in point-of-
sale transactions.

19. | The CARES Act expanded states’ ability to provide UI benefits for many workers
impacted by COVID-19, including workers who would normally not be eligible for UI benefits.

THE CONSPIRACY AND ITS OBJECTS

20. Beginning in or about March 2020, and continuing until on or about February 16,
2022, in the District of Maryland and elsewhere,
JALEEL PHILLIPS, and

JERRY PHILLIPS,
a/k/a “TIAN JUZO,”

the defendants herein, did knowingly and willfully combine, conspire, confederate and agree with
each other, and with persons known and unknown to the Grand Jury, to knowingly and willfully
devise and intend to devise a scheme and artifice to defraud the United States, multiple financial
institutions, and multiple states, including California, Arizona, Michigan, and Massachusetts, to
obtain money by means of materially false and fraudulent pretenses, representations, and
promises, and for the purpose of executing and attempting to execute the scheme to defraud, did
knowingly and willfully transmit and cause to be transmitted by means of wire communications,
in interstate and foreign commerce, writings, signs, signals, pictures, and sounds, in violation of
18 U.S.C. § 1343.

METHODS AND MEANS

21. It was part of the conspiracy and scheme to defraud that the PHILLIPS BROTHERS
opened, controlled, and accessed multiple accounts at the Financial Institutions that were listed in

names other than their own.
Case 8:22-cr-00073-TDC Document44 Filed 05/17/22 Page 6of18

22. It was further part of the conspiracy and scheme to defraud that the PHILLIPS
BROTHERS used fake, fraudulent and fictitious identities, including but not limited to
Kenneth Williams, David Wyatt, Jamal Hopkins, Lawrence Robinson, Eric Jones, Tomi
Bradley, Allen Gator, Derek Parker, and Jordan Gilmoore, thereby hiding the identities of the
PHILLIPS BROTHERS and frustrating the efforts of multiple financial institutions and law
enforcement to identify and investigate the conspiracy and scheme to defraud.

23. It was part of the conspiracy and scheme to defraud that the PHILLIPS
BROTHERS used defunct corporate entities and created and used business entities with no
actual business operations, for the purpose of applying for COVID-19 related benefits, such as
PPP and EIDL.

24. It was further part of the conspiracy and scheme to defraud that the PHILLIPS
BROTHERS created and used email accounts associated with alias identities.

2D; It was further part of the conspiracy and scheme to defraud that the PHILLIPS
BROTHERS used IP addresses associated with their residence, including 96.241.193.39 and
173.73.217.89, when applying for PPP, EIDL, and unemployment insurance benefits.

26. It was further part of the conspiracy and scheme to defraud that, when the
PHILLIPS BROTHERS applied for PPP, EIDL, and unemployment insurance benefits, the
PHILLIPS BROTHERS caused interstate wire communications, including from Maryland to
other states.

27. It was further part of the conspiracy and scheme to defraud that, in order to obtain
PPP benefits, the PHILLIPS BROTHERS made and caused to be made materially false and

fraudulent pretenses, representations, and promises to the Financial Institutions and the United
Case 8:22-cr-00073-TDC Document44 _ Filed 05/17/22 Page 7 of 18

States, including false representations regarding the average monthly payroll and employees of
purported businesses, as well as the owners of those alleged businesses.

28. It was further part of the conspiracy and scheme to defraud that the PHILLIPS
BROTHERS made and caused to be made materially false and fraudulent pretenses,
representations, and promises in order to obtain EIDLs, including falsely representing the gross
revenues and employees of purported businesses, as well as the owners of those alleged
businesses.

29. It was further part of the conspiracy and scheme to defraud that, in order to
obtain unemployment insurance benefits, the PHILLIPS BROTHERS made and caused to be
made materially false and fraudulent pretenses, representations, and promises, including false
representations as to an applicant’s identity, employment status, and eligibility for benefits.

30. It was further part of the conspiracy and scheme to defraud that the PHILLIPS
BROTHERS used the personal identifying information of multiple real persons, including
Identity Victims #1, #2, #3, #4, #5, and #6, when applying for unemployment benefits.

31. It was further part of the conspiracy and scheme to defraud that the PHILLIPS
BROTHERS engaged and attempted to engage in financial transactions in accounts at the
Financial Institutions that received fraudulent PPP, EIDL, and unemployment insurance benefits.

32. It was further part of the conspiracy and scheme to defraud that the PHILLIPS
BROTHERS transferred money via Zelle, point-of-sale transactions, ATM withdrawals, and
other financial transactions that caused interstate wire communications, including wires that

began and ended in Maryland.
Case 8:22-cr-00073-TDC Document44 Filed 05/17/22 Page 8of18

33. It was further part of the conspiracy and scheme to defraud that JERRY
PHILLIPS, a/k/a TIAN JUZO communicated with Person #1 using Telegram.

34. It was further part of the conspiracy and scheme to defraud that JERRY
PHILLIPS, a/k/a TIAN JUZO, sent messages via Telegram about applying for PPP, EIDL and
unemployment insurance benefits.

ons It was further part of the conspiracy and scheme to defraud that the PHILLIPS
BROTHERS obtained and attempted to obtain more than $500,000 in the aggregate through
materially false and fraudulent pretenses, representations, and promises in PPP, EIDL, and

unemployment related benefit applications.

18 U.S.C. § 1349
Case 8:22-cr-00073-TDC Document44 Filed 05/17/22 Page9of18

COUNTS TWO THROUGH FIFTEEN — WIRE FRAUD

The Grand Jury for the District of Maryland further charges that:

1. Paragraphs | — 19 and 21 — 35 of Count One of this Superseding Indictment are
incorporated here by reference.

2s Beginning in or about March 2020, and continuing until on or about February 16,
2022, in the District of Maryland and elsewhere,

JALEEL PHILLIPS, and
JERRY PHILLIPS,

the defendants herein, did knowingly and willfully devise and intend to devise a scheme and
artifice to defraud the United States, multiple financial institutions, and multiple states, including
California, Arizona, Michigan, and Massachusetts, to obtain money by means of materially false
and fraudulent pretenses, representations, and promises, and for the purpose of executing and
attempting to execute the scheme to defraud, did knowingly and willfully transmit and cause to
be transmitted by means of wire communications, in interstate and foreign commerce, writings,

signs, signals, pictures, and sounds, in violation of 18 U.S.C. § 1343.

THE CHARGES

3. On or about the dates set forth below, in the District of Maryland and elsewhere,

JALEEL PHILLIPS, and
JERRY PHILLIPS,

the defendants herein, for the purpose of executing and attempting to execute the scheme and
artifice to defraud described above, did knowingly and willfully transmit and cause to be
transmitted in interstate commerce by means of a wire communication, certain signals, signs and

sounds, as set forth below:
Case 8:22-cr-00073-TDC Document 44

Filed 05/17/22 Page 10 of 18

COUNT DATE DESCRIPTION INTERSTATE WIRE
COMMUNICATION
DETAILS
2 5/11/2020 | Application for EIDL benefits on behalf | From Maryland to a
of Wyatt’s Family Farm location outside
Maryland
3 5/14/2020 | Application for unemployment benefits From Maryland to a
from Massachusetts in the name of Jamal | location outside
Hopkins Maryland
4 5/16/2020 | Application for unemployment benefits From Maryland to a
from Massachusetts in the name of location outside
Kenneth Williams Maryland
5 5/16/2020 | Application for unemployment benefits From Maryland to a
from Massachusetts in the name of location outside
Identity Victim #1 Maryland
6 5/17/2020 | Application for unemployment benefits From Maryland to a
from Massachusetts in the name of location outside
Identity Victim #2 Maryland
i 5/19/2020 | Application for unemployment benefits To Colorado from a
from Massachusetts in the name of location outside
Identity Victim #4 Colorado
8 5/19/2020 | Application for unemployment benefits To Colorado from a
from Massachusetts in the name of location outside
Identity Victim #6 Colorado
9 5/30/2020 | Application for PPP benefits to Celtic From Maryland to a
Bank on behalf of Agroimpex, Inc., using | location outside
the alias Jamal Hopkins Maryland
10 6/15/2020 | Application for EIDL benefits on behalf | From Maryland to a
of Cultivations, Inc. location outside
Maryland
11 6/20/2020 | Purchase at Home Depot in Oxon Hill, From Maryland to a
Maryland, using the Allen Gator alias location outside
Maryland
12 6/30/2020 | Purchases at Home Depot in Oxon Hill, From Maryland to a
Maryland, using the Allen Gator and location outside
Tomi Bradley aliases Maryland
13 7/1/2020 Purchase at Home Depot in Oxon Hill, From Maryland to a
Maryland, using the Allen Gator alias location outside
Maryland
14 7/3/2020 Purchase at Home Depot in Oxon Hill, From Maryland to a

Maryland, using the Allen Gator alias

location outside
Maryland

10
Case 8:22-cr-00073-TDC Document 44

Filed 05/17/22 Page 11 of 18

15

9/2/2021

Online Purchase from Home Depot, using
the Eric Jones alias

From Maryland to a
location outside
Maryland

18 U.S.C. § 1343
18 U.S.C. § 2

11
Case 8:22-cr-00073-TDC Document 44 _ Filed 05/17/22 Page 12 of 18

COUNTS SIXTEEN THROUGH SEVENTEEN — TRANSACTIONS IN
CRIMINALLY DERIVED PROPERTY

The Grand Jury for the District of Maryland further charges that:

1. Paragraphs | through 19 of Count One of this Superseding Indictment are
incorporated here by reference.

2. On or about the dates listed below, in the District of Maryland and elsewhere,
the defendant listed below, did knowingly engage, and attempt to engage, in the monetary
transactions described below, by through and to a financial institution, affecting interstate
commerce, in criminally derived property having a value greater than $10,000, such property

having been derived from a specified unlawful activity, that is wire fraud, in violation of 18

U.S.C. § 1343.
COUNT DATE DEFENDANT DESCRIPTION OF MONETARY
TRANSACTION

16 6/8/2020 JERRY Transfer And Exchange Of $65,538.96 To Carvana,
PHILLIPS For The Purchase Of A 2020 Chevrolet Camaro

17 6/10/2020 | JERRY Transfer and Exchange of More Than $10,000 to
PHILLIPS a Robinhood Account ending in 3792, in the name

KENNETH WILLIAMS

18 U.S.C. § 1957
18 U.S.C. § 2

12
Case 8:22-cr-00073-TDC Document 44 _ Filed 05/17/22

COUNTS EIGHTEEN THROUGH TWENTY-ONE

AGGRAVATED IDENTITY THEFT

The Grand Jury for the District of Maryland further charges that:

Page 13 of 18

l. Paragraphs | through 19 of Count One of this Superseding Indictment are

incorporated here by reference.

2. On or about the dates listed below, in the District of Maryland and elsewhere,

JERRY PHILLIPS,

the defendant herein, did knowingly transfer, possess, and use, without lawful authority, the

means of identification of another real person, to wit, the personal identifying information of the

individuals listed below, including their names, dates of birth, and social security numbers,

during and in relation to (a) Conspiracy To Commit Wire Fraud, in violation of 18 U.S.C. § 1349,

as alleged in Count One and (b) Wire Fraud, in violation of 18 U.S.C. § 1343, as alleged in the

Counts of the Superseding Indictment listed below:

benefits using the name, date of birth, and social
security number of Identity Victim #6, an lowa
resident.

COUNT DATE DESCRIPTION Wire Fraud
Count
18 5/17/2020 | Application for Massachusetts unemployment 5
benefits using the name, date of birth, and social
security number of Identity Victim #1, a Virginia
resident.
19 5/17/2020 | Application for Massachusetts unemployment 6
benefits using the name, date of birth, and social
security number of Identity Victim #2, an Alaska
resident.
20 5/19/2020 | Application for Massachusetts unemployment 7
benefits using the name, date of birth, and social
security number of Identity Victim #4, a
Massachusetts resident.
21 5/19/2020 | Application for Massachusetts unemployment 8

13
COUNT TWENTY-TWO — POSSESSION OF A MACHINE GUN
The Grand Jury for the District of Maryland further charges that:
On or about February 16, 2022, in the District of Maryland, the defendant herein,
JERRY PHILLIPS,

did knowingly possess a machine gun, that is, a privately manufactured Glock-type firearm with
no serial number, which contained a machine gun-conversion device.
18 U.S.C. § 922(0)
18 U.S.C. § 924(a)(2)

26 U.S.C. § 5845
18 U.S.C. §2

15
FORFEITURE

The Grand Jury for the District of Maryland further finds that:

i. Pursuant to Fed. R. Crim. P. 32.2, notice is hereby given to the defendants that the
United States will seek forfeiture as part of any sentence in accordance with 18 U.S.C. §§ 924(d),
981(a)(1)(C) and 982, 21 U.S.C. § 853(p), and 28 U.S.C. § 2461(c), in the event of the
defendants’ convictions on any of the offenses charged in Counts One through Seventeen or
Twenty-Two of this Superseding Indictment.

Wire Fraud Forfeiture

hs Upon conviction of any of the offenses set forth in Counts One through Fifteen of

this Superseding Indictment,
JALEEL PHILLIPS, and
JERRY PHILLIPS,
a/k/a “TIAN JUZO,”
the defendants herein, shall forfeit to the United States, pursuant to 18 U.S.C. § 981(a)(1)(C) and
28 U.S.C. § 2461(c), any property, real or personal, which constitutes or is derived from proceeds
traceable to the offenses and pursuant to 18 U.S.C. § 982(a)(2)(A), any property constituting, or

derived from, proceeds the person obtained directly or indirectly, as the result of the offenses.

Forfeiture For Transactions In Criminally Derived Property

3. Upon conviction of any of the offenses set forth in Counts Sixteen and Seventeen
of this Superseding Indictment,
JERRY PHILLIPS,
the defendant herein, shall forfeit to the United States, pursuant to 18 U.S.C. § 982(a)(1), any

property, real or personal, involved in the offense, or any property traceable to such property.

16
Firearms Forfeiture

4. Upon conviction of the offense set forth in Count Twenty-Two of this Superseding
Indictment,
JERRY PHILLIPS,
the defendant herein, shall forfeit to the United States, pursuant to 18 U.S.C. § 924(d) and 28
U.S.C. § 2461(c), any firearm or ammunition involved in or used in the commission of the
offense.

Property Subject to Forfeiture

5. The property to be forfeited includes, but is not limited to, the following:

(a) a privately manufactured Glock-type firearm with no serial number, which
contained a machine gun-conversion device; and

(b) a forfeiture money judgment.

Substitute Assets

= If, as a result of any act or omission of the defendant, any such property subject to
forfeiture,

(a) cannot be located upon the exercise of diligence;

(b) has been transferred, or sold to, or deposited with a third person;

(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 subdivided without
difficulty;

17
Case 8:22-cr-00073-TDC Document 44 _ Filed 05/17/22 Page 18 of 18

the United States, pursuant to pursuant to 21 U.S.C. § 853(p), as incorporated by 18 U.S.C.
§ 982(b) and 28 U.S.C. § 2461(c), shall be entitled to forfeiture of substitute property up to the

value of the forfeitable property.

18 U.S.C. § 924(d)

18 U.S.C. §§ 981(a)(1)(C), 982
21 U.S.C. § 853(p)

28 U.S.C. § 2461(c)

EREK L. BARRON
United States Attorney

A TRUE BILL:

Foreperson

18


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