Indictment — United States v. Reginald Devon Kimbrough, Southern District of Texas (Document 1)

Summary

A sealed grand jury indictment filed October 04, 2023 as Document 1 in United States v. Reginald Devon Kimbrough, aka Reginald Kimbrough, Criminal No. 4:23-cr-00464, in the U.S. District Court for the Southern District of Texas, Houston Division. Counts One through Six charge wire fraud under 18 USC § 1343, alleging that from about July 1, 2020 through June 8, 2021 Kimbrough submitted COVID-19 Economic Injury Disaster Loan applications to the Small Business Administration listing false business names, organization types, revenues, costs and employee numbers. Each count is an online application sent on dates from July 1, 2020 to June 8, 2021. The indictment states Kimbrough fraudulently obtained $10,000 and gives notice of forfeiture of that amount as to Count One.

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“Indictment — United States v. Reginald Devon Kimbrough, Southern District of Texas (Document 1).” Original at ecf.txsd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-usa-v-kimbrough-dkt-1-3d14345716/, SHA-256 fe3bd0ffc1b1a4132addd7e64a4726919870a224b838b2b1a705ccf7445bf091.

Full text

Case 4:23-cr-00464
Sealed Document 1 Filed 10/04/23 in TXSD Page 1 of 6 States Courts
United
Southern District of Texas
Public and unofficial staff access
to this instrument are FILED
prohibited by court order October 04, 2023
UNITED STATES DISTRICT COURT Nathan Ochsner, Clerk of Court
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

UNITED STATES OF AMERICA §
§
v. § CRIMINAL NO. 4:23-cr-00464
§
REGINALD DEVON KIMBROUGH §
AKA: REGINALD KIMBROUGH §

SEALED INDICTMENT

THE GRAND JURY CHARGES THAT:

Introduction

At all times material to this Indictment:

1. Defendant REGINALD DEVON KIMBROUGH, AKA: REGINALD

KIMBROUGH (“KIMBROUGH”), was a resident of Harris County, Texas, within the

jurisdiction of this Court.

2. The Department of the Treasury is the national treasury and finance department for the

federal government of the United States. Part of the role of the Treasury Department is the

disbursement of payments to the American public.

3. The Small Business Administration is an agency of the United States Government that

provides loans through banks, credit unions, and other lenders who partner with the agency, and

had offices throughout the United States.

4. Part of the role of the Small Business Administration is to provide low-interest disaster

loans to assist businesses and homeowners recover from declared disasters. The Small Business

Administration's (SBA) disaster loans are the primary form of Federal assistance for the repair and

rebuilding of non-farm, private sector disaster losses.

5. Qualified disaster loans under the Small Business Administration include economic
Case 4:23-cr-00464 Document 1 Filed 10/04/23 in TXSD Page 2 of 6

injury disaster loans. These types of loans are administered through the Economic Injury Disaster

Loan (EIDL) program.

6. The Economic Injury Disaster Loan (EIDL) Program can provide up to $2 million of

financial assistance to small businesses or private, non-profit organizations that suffer substantial

economic injury as a result of the declared disaster, regardless of whether the applicant sustained

physical damage. Actual loan amounts are based on amount of economic injury.

7. To be eligible for EIDL assistance, small businesses or private non-profit organizations

must have sustained economic injury and be located in a disaster declared county or contiguous

county.

8. On March 6, 2020, Congress passed Pub. L. 116–123, also known as the Coronavirus

Preparedness and Response Supplemental Appropriations Act. H.R. 6074 provided an emergency

supplemental appropriation of $8.3 billion to combat the spread of the Coronavirus (“COVID-19”)

pandemic. On March 13, 2020, the President declared an emergency under Section 501(b) of the

Stafford Act (41 USC § 5121, et seq.) in response to COVID-19. Section 501(b) of the Stafford

Act allows the President of the United States to unilaterally declare an emergency for certain

emergencies involving federal primary responsibility, pursuant to 41 USC § 5191(b).

9. Pub. L. 116–123 also deemed COVID-19 to be a disaster under the EIDL program. As

a result of the legislation, economic injury from COVID-19 became an eligible EIDL expense.

Qualifying businesses or entities were thereafter be permitted to obtain loans directly from the

SBA that would be repaid over a period of time, in order to help businesses overcome the effects

of the COVID-19 pandemic.

10. On March 27, 2020, Congress passed Pub. L. 116–136, also known as the Coronavirus

Aid, Relief, and Economic Security (CARES) Act. As part of the legislation, the CARES Act
Case 4:23-cr-00464 Document 1 Filed 10/04/23 in TXSD Page 3 of 6

expanded the EIDL program to include grants which could provide an emergency advance of up

to $10,000 to small businesses and private non-profits harmed by COVID-19. Businesses that were

eligible for an EIDL loan and who have been in operation since January 31, 2020, when the public

heath crisis was announced, qualified for an emergency grant.

Manner and Means of the Scheme

11. From approximately early July 2020, through June of 2021, KIMBROUGH engaged

in a scheme to defraud by applying for emergency assistance in the form of an advance and/or loan

with the Small Business Administration, via the COVID-19 Economic Injury Disaster Loan

(EIDL) Program.

12. It was further part of the scheme that KIMBROUGH would make such applications

by listing information material to the application that was fraudulent, such as the business legal

name, the organization type, gross revenues prior to the disaster, cost of goods sold, and number

of employees.

13. It was further part of the scheme that KIMBROUGH would transmit the fraudulent

applications to the Small Business Administration through the internet and used the SBA’s online

loan application portal.

14. Part of SBA’s online application included the following language:

CERTIFICATION AS TO TRUTHFUL INFORMATION: By
signing this application, you certify that all information in your
application and submitted with your application is true and correct
to the best of your knowledge, and that you will submit truthful
information in the future. WARNING: Whoever wrongfully
misapplies the proceeds of an SBA disaster loan shall be civilly
liable to the Administrator in an amount equal to one-and-one half
times the original principal amount of the loan under 15 U.S.C.
636(b). In addition, any false statement or misrepresentation to SBA
may result in criminal, civil or administrative sanctions including,
but not limited to: 1) fines and imprisonment, or both, under 15
U.S.C. 645, 18 U.S.C. 1001, 18 U.S.C. 1014, 18 U.S.C. 1040, 18
Case 4:23-cr-00464 Document 1 Filed 10/04/23 in TXSD Page 4 of 6

U.S.C. 3571, and any other applicable laws; 2) treble damages and
civil penalties under the False Claims Act, 31 U.S.C. 3729; 3)
double damages and civil penalties under the Program Fraud Civil
Remedies Act, 31 U.S.C. 3802; and 4) suspension and/or debarment
from all Federal procurement and non-procurement transactions.
Statutory fines may increase if amended by the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015.

15. It was further part of the scheme that KIMBROUGH would, at the end of the

application and underneath the language outlined in paragraph 14, check the box next to the

following language: “I hereby certify UNDER PENALTY OF PERJURY UNDER THE LAWS

OF THE UNITED STATES that the above is true and correct.”

16. As result of the scheme to defraud, KIMBROUGH fraudulently obtained $10,000 in

the form of an Economic Injury Disaster Loan from the Small Business Administration.

17. Paragraphs 1 through 16 of this Indictment are hereby incorporated by reference as

though fully set forth herein for Counts One through Six of this Indictment.

COUNTS ONE THROUGH SIX
[Wire Fraud, 18 USC § 1343]

Beginning on or about July 1, 2020, and continuing through on or about June 8, 2021, in

the Southern District of Texas and elsewhere, within the jurisdiction of the Court, Defendant,

REGINALD DEVON KIMBROUGH
AKA: REGINALD KIMBROUGH

for the purpose of executing the aforementioned scheme and artifice to defraud and to obtain

money, and to attempt to obtain money, by material false and fraudulent representations, pretenses

and promises, did knowingly cause to be transmitted by the internet and private commercial

interstate carriers, the following matters:
Case 4:23-cr-00464 Document 1 Filed 10/04/23 in TXSD Page 5 of 6

COUNT DATE OF RECEIVING AGENCY AGENCY
ONLINE LOCATION
APPLICATION
(on or about)

1 July 1, 2020 Small Business Administration Washington, D.C.

2 August 11, 2020 Small Business Administration Washington, D.C.

3 October 29, 2020 Small Business Administration Washington, D.C.

4 December 30, 2020 Small Business Administration Washington, D.C.

5 May 20, 2021 Small Business Administration Washington, D.C.

6 June 8, 2021 Small Business Administration Washington, D.C.

In violation of Title 18, United States Code, Section 1343.

NOTICE OF FORFEITURE
[18 USC § 1343]

Pursuant to Rule 32.2, Fed. R. Crim. P., notice is hereby given to the defendant that, upon

conviction of any of the offenses set forth in Counts One through Six of the Indictment, the United

States will seek forfeiture as part of any sentence in accordance with 18 U.S.C. § 982(a)(4), any

property, real or personal, which constitutes or is derived from proceeds traceable to the offense

charged in Counts One through Six of the Indictment including, but not limited to, $10,000

specifically as to Count One.

Substitute Assets

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

defendant:
Case 4:23-cr-00464 Document 1 Filed 10/04/23 in TXSD Page 6 of 6

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

b. has been transferred, 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

e. has been commingled with other property that cannot be divided without difficulty,

the United States shall be entitled to forfeiture of substitute property up to the value of the

forfeitable property described above, pursuant to 21 U.S.C. § 853(p), as incorporated by 18 U.S.C.

§ 982(b).

A TRUE BILL:

_______________________________
FOREMAN OF THE GRAND JURY

ALAMDAR S. HAMDANI
UNITED STATES ATTORNEY

____________________________
Brian Bajew
Assistant United States Attorney

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