Indictment — United States v. Kenisha Simmons (Dkt. 1-1, S.D. Tex.)

Summary

This sealed grand jury indictment from the Eastern District of Texas, Sherman Division, charges Alexander J. Clethen, Laura Clethen, Javaris Jackson, Patricia McClendon, Kenisha Simmons and Jaleesa Thompson; it was filed on 03/17/26 as Document 1-1 in Case 4:26-cr-00136 (TXSD). Count 1 charges conspiracy to commit bank fraud (18 U.S.C. § 1349), Count 2 conspiracy to make false statements on loan and credit applications (18 U.S.C. §§ 371, 1014) and Count 3 conspiracy to commit money laundering (18 U.S.C. § 1956(h)). It alleges the defendants used sham businesses to file false PPP and EIDL applications and obtained at least 19 loans and at least $2.7 million. Its loan table lists a $141,070 PPP loan to KayStylez with Kenisha Simmons shown as application signer and funds recipient, and the indictment gives notice that the government will seek forfeiture.

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Case 4:26-cr-00136 Documenti1-1 Filed 03/17/26 in TXSD Page1of14

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

UNITED STATES OF AMERICA § SEALED
§
V. § Case No. 4:22CR Zo
§ meee |
§ erdan
§
KENISHA SIMMONS (5 § FEB 9 - 2022
a §
Clerk, U.S. District Court
Texas Eastern
INDICTMENT

THE UNITED STATES GRAND JURY CHARGES:

General Allegations

At all times material to the facts set forth in this Indictment:

I. Defendant Pe was an individual
residing in Frisco, Texas, in the Eastern District of Texas.

Zz. On or about April 28, 2017, BE :e2iscere Eon Green Technologies,
LLC (“EGT”) with the state of Texas. On or about July 7, 2017, | opened a
business bank account at Wells Fargo Bank ending in 6473 (“EGT account’), under the
name of EGT, listing MB as the sole authorized signer.

3. On or about August 26, 2019, defendant (iii registered a

business called Tech Space, LLC (“Tech Space”) with the state of Florida. On or about

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June 3, 2020, J opened a business bank account at JP Morgan Chase Bank ending
in 1552, under the name of Tech Space, listing MMM) as the sole authorized
signer.

4, On or about June 2, 2020, p | opened a personal account at JP Morgan
Chase ending in 1621 (IB personal account”), listing Mp as the sole
authorized signer.

5. On March 27, 2020, the President of the United States signed into law the
Coronavirus Aid, Relief, and Economic Security (“CARES”) Act to provide emergency
financial assistance to the millions of Americans suffering from the economic effects
caused by the COVID-19 pandemic. One source of relief provided by 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”). Another source of
relief was the Economic Injury Disaster Loan (““EIDL”) program, which was designed to
provide assistance to businesses suffering temporary loss of revenue because of the
pandemic.

6. The PPP was managed by the United States Small Business Administration
(“SBA”). To obtain a PPP loan, the small business, through its authorized representative,
was required to certify and provide documentation of, among other things, its: (a) average
monthly payroll expenses; and (b) number of employees.

7. Small businesses applied for PPP relief through one of over 4,900 SBA

designated lending institutions, who received, processed, and approved the applications

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and loans. These designated lending institutions included financial institutions like Cross
River Bank, WebBank, Paypal, Celtic Bank, and JP Morgan Chase. All of these
institutions’ funds were insured by the Federal Deposit Insurance Corporation (“FDIC”).

8. ‘The EIDL program was also overseen by the SBA. Unlike PPP loans, EIDL
loans were funded directly by the SBA. To obtain an EIDL loan, the small business,
through its authorized representative, was required to certify and provide documentation
of, among other things, its: (a) gross revenues for the twelve months preceding January 31,
2020; (b) cost of goods sold during that time period; and (c) number of employees as of
January 31, 2020.

COUNT 1

Violation: 18 U.S.C. § 1349 (Conspiracy
to Commit Bank Fraud)

5. From approximately March 27, 2020, and continuing through the date of this

Indictment, in the Eastern District of Texas and elsewhere, the defendants, Sa

GE. 2)0n¢g with others both known and unknown to the Grand Jury, did conspire to
commit bank fraud, a violation of Title 18 United States Code Section 1344, and knowingly

and willfully joined in the agreement with the intent to further its unlawful purpose.

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Overview of the Conspiracy

6. The defendants, led by | a scheme to defraud the PPP
and EIDL programs. The defendants created and registered sham businesses that they
used to submit applications to obtain PPP and EIDL funding. On these applications, the
defendants misrepresented material information such as the true nature of their business,
the number of employees, the amount of payroll, and revenue lost during the pandemic.
Based on these material misrepresentations, the SBA and other financial institutions
approved and issued loans to the defendants. Once in receipt of the fraudulently obtained
funds, the defendants never used the money as intended, such as to pay employee salaries,
cover fixed debt or utility payments, or continue health care benefits for employees.
Instead, the defendants paid each other, transferred money to their personal accounts, and
spent the funds on various personal purchases. In total, the defendants fraudulently
obtained at least 19 loans and at least $2.7 million.

Purpose of the Conspiracy

7. It was the general purpose of the conspiracy for the defendants to unlawfully
and unjustly enrich themselves by means of materially false and fraudulent pretenses,
representations, and promises.

Manner and Means of the Conspiracy

8. The manner and means by which the defendants sought to accomplish the
purpose of the conspiracy included, among others, the following:

a. The defendants created, registered, and used sham, non-operational businesses

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under which they could submit PPP and EIDL applications.

b. The defendants opened bank accounts under their name and their businesses to
receive, deposit, and transfer PPP and EIDL funds.

c. The defendants submitted materially false PPP and EIDL applications, lying
about, among other things, the number of employees, monthly payroll expenses,
and gross revenues.

d. The defendants submitted falsified and fabricated supporting documentation
with their loan applications.

e. The defendants submitted the applications using the internet, frequently from

an internet protocol address that resolved back to end QE

residence in Frisco, Texas, in the Eastern District of Texas.
f. The defendants used the PPP and EIDL funds for unauthorized purposes,

including to pay non-employees and co-conspirators, to withdraw cash, and to
buy vehicles.

g. The defendants obtained the PPP loans from financial institutions that were
insured by the FDIC.

Acts in Furtherance of the Conspiracy

In furtherance of the conspiracy, the following acts, among others, were
committed in the Eastern District of Texas and elsewhere.
The Fraudulent PPP Application for Tech Space
9, On or about June 5, 2020, Tech Space submitted a PPP loan application to
Celtic Bank. The application was submitted electronically from an IP address that
resolved to defendants Wand | se in Frisco, Texas, in the Eastern
District of Texas. On or about June 7, 2020, Celtic Bank rejected the application and

informed Tech Space that it would not fund the loan.

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10. Despite being rejected, on or about June 15, 2020, Tech Space attempted
again to obtainaPPP loan. This time, Tech Space submitted the application to a different
PPP processing institution, PayPal. The application paperwork identified
as the primary contact and provided the Tech Space account as the bank account to receive
the funds.

11. The application contained several misrepresentations regarding Tech
Space’s business operations and its need for pandemic relief. For instance, the application
certified that Tech Space had 9 employees and had an average monthly payroll expense of
approximately $61,237. In reality, Tech Space had no verifiable business activity, had no
employees other than {J and had no payroll or other identifiable business expenses.

12. The application was signed and initialed by J. On one signed page,
GE certified the following the statement:

The 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; I understand 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. In support of its application, Tech Space also attached a fabricated bank
statement for the Tech Space account showing the company’s purported financial activity.
The account statement was dated for the period May 1-29, 2020. However, the Tech
Space account was actually opened on June 3, 2020, after the period indicated on the
statement. Furthermore, the transactions on the account statement—beginning balance,

ATM and debit card withdrawals, electronic withdrawals, fees, and ending balance—were

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nearly identical to another bank statement for a different business, Mills Pharmacy,
affiliated with co-conspirators TTT o(/ i.
Use of Fraudulently Obtained Funds

14. On or about June 16, 2020, PayPal, approved Tech Space’s application and
wired approximately $153,092 to the Tech Space bank account. The funds were never
used according to the representations or certifications stated in the application. There
were no debits from the Tech Space account for mortgage interest payments, lease
payments, utility payments, or other approved expenses. Instead J made several
transfers from the Tech Space account to Jackson’s personal account, with the notation
“payroll.” Once the funds had been transferred to Jackson’s personal account, J
made multiple transfers to Mk EGT account totaling at least $35,000. At the end
of September 2020, less than four months after obtaining the loan, the ending balance in
the Tech Space account was $562.

Other Fraudulent PPP and EIDL Loans

15. The defendants and their co-conspirators obtained several other PPP and
EIDL loans using similar misrepresentations. None of the funds were used for the
designated purposes, such as employee payroll, health care benefits, or utilities payments.
The funds were spent on various non-business expenses, including to pay co-defendant and
co-conspirator MJ. - The chart below captures some of the loans the defendants

obtained as part of their scheme:

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Case 4:26-cr-00136

Document 1-1

Filed 03/17/26 in TXSD

Page 8 of 14

Date of Business Name Application | PPP/ Amount Amount Sent to
Loan Signer and | EIDL Funded Clethen Using
(on or Funds (Approximate) | Funds
about) Recipient (Approximate)
May 18, Eon Green EIDL $150,000 $150,000
2020 | Technologies
May 22, Ace Pharmacy PPP $56,704 $5,000
2020
June 9, Clearvue PPP $143,642 $6,000
2020 Entertainment &
Agency
June 11, KayStylez Kenisha PPP $141,070 $52,000
2020 Simmons
June 15, | Tech Space F PPP $153,092 $35,000
June 22, U’Nique Tech PPP $160,280 $72,800
2020 Beauty Bar

In sum, the defendants obtained at least 19 loans, fraudulently drawing on at

least $2.7 million of funds that were earmarked for emergency pandemic relief.

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All in violation of 18 U.S.C. § 1349.
Count Two

Violation: 18 U.S.C. § 371, 1014
(Conspiracy to Make False Statements
on Loan and Credit Applications)

17. Paragraphs | through 16 of this Indictment are realleged and incorporated by
reference as though fully set forth herein, as constituting and describing the defendants’
and co-conspirators’ fraudulent scheme and the overt acts taken in furtherance of that
scheme.

18. From on or about March 27, 2020 and continuing through the date of this
Indictment, in the Eastern District of Texas and elsewhere, the defendants, Sa
ees, Kenisha Simmons, and
GB. did knowingly combine, conspire, and agree with each other and with other
persons known and unknown to the Grand Jury to commit the offense of making false
statements on loan and credit applications, in violation of Title 18 United States Code
Section 1014.

All in violation of 18 U.S.C. § 371.

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Count Three

Violation: 18 U.S.C. § 1956(h)
(Conspiracy to Commit Money
Laundering)

19. Paragraphs 1 through 16 of this Indictment are realleged and incorporated by
reference as though fully set forth herein, as constituting and describing the defendants’
and co-conspirators’ fraudulent scheme.

20. From on or about March 27, 2020 and continuing through the date of this
Indictment, in the Eastern District of Texas and elsewhere, the defendants,
GE id knowingly combine, conspire, and agree with each other and with other
persons known and unknown to the Grand Jury to commit offenses against the United
States in violation of Title 18, United States Code, Section 1956, to wit: to knowingly
conduct and attempt to conduct financial transactions affecting interstate commerce and
foreign commerce, which transactions involved the proceeds of specified unlawful activity,
that is, bank fraud in violation of Title 18 United States Code Section 1344, knowing that
the transactions were designed in whole or in part to conceal and disguise the nature,
location, source, ownership, and control of the proceeds of specified unlawful activity, and
that while conducting and attempting to conduct such financial transactions, knew that the
property involved in the financial transactions represented the proceeds of some form of
unlawful activity, in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i).

All in violation of 18 U.S.C. § 1956(h).

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NOTICE OF INTENT TO SEEK CRIMINAL FORFEITURE

1. The allegations contained in Count One, Two, and Three are hereby realleged
and incorporated by reference as though fully set forth herein for the purpose of alleging
forfeitures to the United States of America of certain property in which the defendant has
an interest.

2. Upon conviction of any violation of 18 U.S.C. §§ 1349, 371, or 1956, the
defendants shall forfeit to the United States any property, real or personal, that constitutes
or is derived from proceeds traceable to a violation of any offense constituting “specified
unlawful activity,” or a conspiracy to commit such offense, pursuant to 18 U.S.C. §

981(a)(1)(C) and 28 U.S.C. § 2461(c).

3. The property which is subject to forfeiture, includes but is not limited to the
following:
a, All funds subject to forfeiture in bank accounts receiving or transferring the

fraudulently obtained proceeds; and
b. A money judgment, and all interest and proceeds traceable thereto,
representing the proceeds of the offenses, for which the defendant is jointly
and severally personally liable, including a money judgment.
4, Pursuant to 21 U.S.C. § 853(p), as incorporated by reference by 18 U.S.C. §
982(b), if any of the forfeitable property, or any portion thereof, as a result of any act or
omission of the defendant:

a. cannot be located upon the exercise of due diligence;

b. has been transferred or sold to, or deposited with, a third party;

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C. has been placed beyond the jurisdiction of the court;

d. has been substantially diminished in value; or

é. has been commingled with other property which cannot be divided without
difficulty,

it is the intent of the United States to seek the forfeiture of other property of the defendants
up to the value of the above-described forfeitable properties, including, but not limited to,
any identifiable property in the name of the defendants.

a By virtue of the commission of the offenses alleged in this indictment, any
and all interest the defendants have in the above-described property is vested in the United
States and hereby forfeited to the United States pursuant to 18 U.S.C. §§ 981(a)(1)(C) and
982(a)(2)(A) and 28 U.S.C. § 2461(c).

All pursuant to 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(2)(A) and 28 U.S.C. §
2461(c), and the procedures set forth at 21 U.S.C. § 853, as made applicable through 18

U.S.C. § 982(b)(1).

A TRUE BILL

GRAND JURY FOREPERSON

BRIT FEATHERSTON
UNITED STATES ATTORNEY

ANAND VARADARAJAN Date
G.R. JACKSON
Assistant United States Attorneys

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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS

SHERMAN DIVISION

UNITED STATES OF AMERICA § SEALED

§
V. § Case No. 4:22CR

§ Judge
ALEXANDER J. CLETHEN (1) §
LAURA CLETHEN (2) §
JAVARIS JACKSON (3) §
PATRICIA McCLENDON (4) §
KENISHA SIMMONS (5) §
JALEESA THOMPSON (6) §

N ENALTY
COUNT 1

Violation: 18 U.S.C. §§ 1349, 1344 (Conspiracy to Commit Bank Fraud)
Penalty: Not more than thirty years imprisonment, a fine not to exceed

$1,000,000, or both; supervised release of not more than five years.

Special
Assessment: $100.00
COUNT 2

Violation: 18 U.S.C. § 371, 1014 (Conspiracy to Make False Statements on
Loan and Credit Applications)

Penalty: Not more than five years imprisonment, a fine not to exceed
$250,000, or both; supervised release of not more than three years.

Special

Assessment: $100.00

Notice of Penalty

Page |
Case 4:26-cr-00136 Document1-1 Filed 03/17/26 in TXSD Page 14 of 14

Violation:

Penalty:

Special
Assessment:

Notice of Penalty
Page 2

COUNT 3

18 U.S.C. §§ 1956(h) (Conspiracy to Commit Money
Laundering)

Imprisonment for a term not more than twenty years, a fine not to
exceed $500,000, or twice the value of the property involved in
the transaction, whichever is greater, or both imprisonment and
fine; supervised release of not more than three years.

$100.00

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