Indictment — United States v. Malak Faltawws, a/k/a “Mark Andrews” (D.N.J.)

Summary

This indictment, returned by a grand jury sitting in Newark and signed by United States Attorney Philip R. Sellinger, charges Malak Faltawws, a/k/a "Mark Andrews," of Rutherford, New Jersey, with three counts of wire fraud and two counts of money laundering. It alleges that from in or around March 2020 through in or around November 2021 Faltawws, the purported owner of eighteen businesses, used shell companies to submit false Paycheck Protection Program and Economic Injury Disaster Loan applications. An EIDL application for Cleo Transportation claimed approximately $988,500 in gross revenues and led the SBA to disburse approximately $149,900 on or about August 4, 2020. A PPP application for Car Network brought approximately $17,145. The laundering counts charge transfers of approximately $17,500 and $23,500 in August 2020.

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Full text

2022R00605/AB

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

UNITED STATES OF AMERICA : Hon.

Vv. : Crim. No. 24-

MALAK FALTAWWS, ~ 5 18 U.S.C.
§ 1343
alk/a “Mark Andrews” : 18 U.S.C. § 1957

‘INDICTMENT
The Grand Jury in and for the District of New Jersey, sitting in Newark, .

charges:

COUNT ONE THROUGH THREE
(Wire Fraud)

1. At all times relevant to this Indictment:

a. Defendant Malak -Faltawws, a/k/a “Mark Andrews”

(FALTAWWS"), resided in Rutherford, New J ersey.

b. FALTAWWS was the purported owner of eighteen businesses,

including Cleo Transportation Inc. (“Cleo Transportation”), New Jersey Car and

Limo, Inc. (“NJ Car and Limo”), Affordable Services LLC (“Affordable Services”), and

Car Network LLC (Car Network”). : . ;

c. Bank-1 is a financial institution headquartered in New York, New

York.

d. Bank-2 is a financial institution headquartered in Cherry Hull,

New Jersey.

e. Entity-1 is a limousine sales company located in North East,

Pennsylvania.
f. Entity-2 is a wine touring company located in Ithaca, New York.

The Paycheck Protection Program (“PPP”)

g. The Coronavirus Aid, Relief, and Economic Security (“CARES”)

Act is a federal law enacted in or around March 2020 designed to provide emergency

financial assistance to millions of Americans suffering 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 other certain expenses through a program referred to as the Paycheck

Protection Program (“PPP”).

h. In order to obtain a PPP loan, a qualifying business had to submit

a PPP loan application, which was 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 to make certain affirmative

certifications to be eligible to obtain PPP funds. In the PPP loan application, the

business (through its authorized representative) had to state truthfully, among other

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

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

receive under the PPP. The applicant of a PPP loan was required to acknowledge the

program rules and make certain affirmative certifications, including that the

business was in operation on February 15, 2020. In addition, a business applying for

PPP funds had to provide truthful supporting documentation, which could include

the business’s tax information, such as Internal Revenue Service (“IRS”) Forms 941

(Employer’s Quarterly Federal Tax Returns), Form 940 (Employer’s Annual Federal

2
Unemployment Tax Returns), and Form 1040 — Schedule C (Profit or Loss from

Business).

i. A PPP loan application had to be processed by a participating

financial institution (the lender). If the PPP loan application was approved, the

lender funded the PPP loan using its own monies, which was 100% guaranteed by the

Small Business Administration (“SBA”). 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. |

j. PPP loan proceeds could only be used by the business for certain

permissible expenses, including 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 used the loan proceeds on these expense items within a

designated period of time and used at least 75% of the PPP funds on payroll expenses.

Economic Injury Disaster Loan Program (“EIDL”)

k. Another source of relief provided by the CARES Act was the

authorization of the Economic Injury Disaster Loan (““EIDL”) program for COVID-19.

EIDL was an SBA program that provided low-interest financing to small businesses,

renters, and homeowners in regions affected by declared disasters.

1. In order to obtain an EIDL, a qualifying business was required to

submit an application to the SBA and provide truthful information about its

operations, such as the number of employees, gross revenues for the twelve-month

period preceding the disaster, and cost of goods sold in the twelve-month period

3
preceding the disaster. In the case of EIDL Program loans for COVID-19 relief, the

twelve-month period constituted the twelve months preceding January 31, 2020. In

addition, the business entity must have existed in an operational condition on

February 1, 2020.

m. The amount of the EIDL was determined based, in part, on the

information the applicant provided regarding the revenue and costs of goods of the

company. The SBA directly issued any funds disbursed under an EIDL Program loan

to the applicant company. A company was permitted to use EIDL funds for payroll

expenses, sick leave, production costs, and business obligations, such as debts, rent,

and mortgage payments.

n. As part of the EIDL Program application, applicants could apply

for up to a $10,000 grant, known as an EIDL Program advance, which did not need

to be repaid.

The Scheme to Defraud

2. From in or around March 2020 through in or around November 2021, in

the District of New Jersey and elsewhere, FALTAWWS devised and intended to

devise a scheme to defraud the SBA and approved lenders, and to obtain federal

| COVID-19 emergency relief money by means of materially false and fraudulent

pretenses, representations, and promises, as set forth below.

Goal of the Scheme to Defraud

3. The goal of the scheme was for FALTAWWS to enrich himself by

fraudulently obtaining and misusing federal COVID-19 emergency relief money.
Manner and Means of Scheme to Defraud

4, It was part of the scheme that:

a. FALTAWWS, using shell companies that had no actual business,

submitted and caused to be submitted falsified and fraudulent PPP loan applications

and falsified and fraudulent EIDL Program applications, including EIDL Program

advances seeking federal COVID-19 emergency relief money.

b. FALTAWWS also filed fraudulent PPP loan and EIDL Program

applications on behalf of at least one company with some legitimate business

operations.

C. FALTAWWS’ fraudulent applications included false information

concerning, among other things, the companies’ (1) average monthly payroll; (ii) gross

revenue; and (iii) number of employees.

d. Along with certain applications, FALTAWWS also submitted fake

supporting tax documents, including false IRS Forms 1040 — Schedule C.

Fraudulent Application-1

e. On or about July 18, 2020, FALTAWWS submitted and caused to

be submitted an EIDL application to the SBA on behalf of Cleo Transportation

(Application: 1”). - . .

f. In support of Application-1, FALTAWWS represented falsely that

for the twelve months prior to on or about January 31, 2020, Cleo had approximately

$988,500 in gross revenues, approximately $100,500 in costs of goods sold, and

approximately eighteen employees.
g. On or about August 4, 2020, FALTAWWS’ false and fraudulent

representations and omissions in Application-1 caused the SBA to disburse

approximately $149,900 into an account ending in 1680 at Bank-1 (the “1680

Account”), which resulted in an interstate wire transmission.

Fraudulent Application-2

h. On or about November 21, 2020, FALTAWWS submitted and

caused to be submitted an EKIDL application to the SBA on behalf of NJ Car and Limo

(“Application-2”). Application-2 listed FALTAWWS as NJ Car and Limo’s sole owner.

1. In support of Application-2, FALTAWWS represented falsely that

for the twelve months prior to on or about January 31, 2020, NJ Car and Limo had

approximately $885,000 in gross revenues, approximately $185,000 in costs of goods

sold, and approximately eighteen employees.

j. _ On or about November 380, 2020, FALTAWWS’ false and

fraudulent representations and omissions in Application-2 caused the SBA to

disburse approximately $149,900 into an account ending in 1621 at Bank-2 (the “1621

Account”), which resulted in an interstate wire transmission.

Fraudulent Application-3
Sh

i On or about February 8, 2021, FALTAWWS submitted a ppp loan

application to Bank-2 on behalf of Car Network requesting approximately $17,145

(“Application-3”).

il. In support of Application-3, FALTAWWS submitted and caused

to be submitted materially false and fraudulent information, including fabricated

copies of Car Network’s purported Tax Form 1040 — Schedule C for 2019.

6
iii. FALTAWWS also represented falsely that Car Network had one

employee and an average monthly payroll of approximately $6,858 and that Car

Network was in operation since in or around January 2012.

iv. On or about February 25, 2021, FALTAWWS’ false and

fraudulent representations and omissions in Application-3 caused Bank-2 to send a

promissory note to FALTAWWS, which resulted in an interstate wire transmission.

On or about February 26, 2021, Bank-2 disbursed approximately $17,145 into an

account ending in 5995 at Bank-2.

Execution of the Scheme to Defraud

5. On or about the dates set forth below, in the District of New Jersey and

elsewhere, the defendant,

MALAK FALTAWWS,
a/k/a “Mark Andrews,”

for the purpose of executing the scheme described above, transmitted and caused to

be transmitted by means of wire communications in interstate and foreign commerce

the writings, signs, and signals described in the chart below, each transmission

constituting a separate count of this Indictment:
Count Approximate Date Description of Interstate Wire

One August 4, 2020 An electronic transfer of approximately-
$149,050 by the SBA to the 1680 Account via
interstate wire that traveled in interstate
commerce, including through New Jersey.
Two November 380, 2020 An electronic transfer of approximately
$149,000 by the SBA to the 1621 Account via
interstate wire that traveled in interstate
commerce, including through New Jersey.
Three February 25, 2021 The transmission of an electronic promissory
note by Bank-2 to FALTAWWS via an
international wire that traveled through
Canada and New Jersey.

In violation of Title 18, United States Code, Section 1343.
COUNT FOUR THROUGH FIVE
(Money Laundering)

6. The allegations in paragraphs 1 and 8 through 5 of Count One of this

Indictment are realleged here.

7. On or about the dates set forth below, in the District of New Jersey and

elsewhere, the defendant,

MALAK FALTAWWS,
a/k/a “Mark Andrews,”

knowingly engaged and attempted to engage in the following monetary transactions

by, through, and to a financial institution, affecting interstate and foreign commerce,

in a criminally derived property of a value greater than $10,000, knowing that the

money transactions were criminally derived property from a specific unlawful

activity, that is, wire fraud in violation of Title 18, United States Code, Section 1343,

described in the chart below, each transfer constituting a separate count of this

Indictment:

Count | Approximate Date Description of Monetary Transaction.

Four August 5, 2020 An electronic transfer of approximately
$17,500 from the 1680 Account to Entity-1 via
an interstate wire that traveled through Texas
and New Jersey* 7
s ge

Five August 6, 2020 An electronic transfer for approximately
$23,500 from the 1680 Account to Entity-2 via
an interstate wire that traveled through Texas
and New Jersey

In violation of Title 18, United States Code, Section 1957.
FORFEITURE ALLEGATION AS TO COUNTS ONE, TWO, AND THREE

Upon conviction of an offense in violation of Title 18, United States Code,

Section 1348, as charged in Counts One through Three of this Indictment, defendant

MALAK.FALTAWWS shall forfeit to the United States, pursuant to Title 18, United

States Code, Section 981(a)(1)(C) and Title 28, United States Code, Section 2461(c),

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

to the commission of such offenses.

FORFEITURE ALLEGATION AS TO COUNTS FOUR AND FIVE

Upon conviction of an offense in violation of Title 18, United States Code,

Section 1957, as charged in Counts Four and Five of this Indictment, defendant

MALAK FALTAWWS shall forfeit to the United States, pursuant to Title 18, United

States Code, Section 982(a)(1), any property, real or personal, involved in such

offense, or any property traceable to such property.

SUBSTITUTE ASSETS PROVISION
(Applicable to All Forfeiture Allegations)

If any of the above-described forfeitable property, as a result of any act of

omission of the defendant:

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

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

c. has been place beyond the jurisdiction of the court;

d. has been substantially diminished in value; or

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

without difficulty,

10
it is the intent of the United States, pursuant to Title 21, United States Code, Section

853(p), as incorporated by Title 18, United States Code, Section 982(b)(1) and Title

28 United States Code, Section 2461(c), to seek forfeiture of any other property of the

defendant up to the value of the forfeitable property described above.

A TRUE BILL

EPERSON

sie Fh. Setringer
PHILIP R. SELLINGER
United States Attorney

11
CASE NUMBER:

United States District Court
District of New Jersey
UNITED STATES OF AMERICA

Vv.

MALAK FALTAWWS
a/k/a “Mark Andrews”

INDICTMENT FOR
18 U.S.C. § 1343
18 U.S.C. § 1957

A True Bill,

(fae

PHILIP R. SELLINGER
UNITED STATES ATTORNEY
FOR THE DISTRICT OF NEW JERSEY

AJA ESPINOSA
ASSISTANT U.S. ATTORNEY
NEWARK, NEW JERSEY
973-645-3883

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