Information — United States v. Carey Mills, District of Hawaii (Document 1)

Summary

A criminal information against Carey Mills in the United States District Court for the District of Hawaii, Cr. No. 22-00034 DKW, Case 1:22-cr-00034-DKW, filed May 4, 2022 as Document 1. The sole count of the information charges wire fraud under 18 U.S.C. § 1343. It alleges that Mills submitted PPP and EIDL applications with false employee, payroll and revenue information for businesses including New Way Horizon Travel, Kanaka Maoli Hookupu Center and Uilani Kawailehua Foundation, and received a total of $937,575 from three fraudulent loan applications and one SBA grant. The charged wire is the transfer of $350,000 for a PPP loan on or about May 14, 2020, and the forfeiture notice lists $69,791.77 seized from an escrow company.

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“Information — United States v. Carey Mills, District of Hawaii (Document 1).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/information-no-1-22-cr-00034-dkt-1-fc163031f5/, SHA-256 48d0cb24a6479822a459e4258ecddce1d93fea0d02bc91458dbecd6f56b7cdd6.

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Case 1:22-cr-00034-DKW Document 1 Filed 05/04/22 Page 1 of 9 PageID #: 1

FILED
FILED IN
IN THE
THE
UNITED STATES DISTRICT
UNITED STATES DISTRICT COURT
COURT
DISTRICT
DISTRICT OF
OF HAWAII
HAWAII CC,
CLARE E. CONNORS #7936 May 4, 2022, 3:49 pm
Pam Hartman Beyer, Clerk of Court
United States Attorney
District of Hawaii

REBECCA A. PERLMUTTER
GREGG PARIS YATES
Assistant U.S. Attorney
Room 6100, PJKK Federal Building
300 Ala Moana Blvd.
Honolulu, Hawaii 96850
Telephone: (808) 541-2850
Facsimile: (808) 541-2958
Emails: Rebecca.Perlmutter@usdoj.gov
Gregg.Yates@usdoj.gov

Attorneys for Plaintiff
UNITED STATES OF AMERICA

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAll

UNITED STATES OF AMERICA, ) CR. NO. 22- 00034 DKW
)
Plaintiff, ) INFORMATION
)
vs. ) [18 U.S.C. § 1343]
)
CAREY MILLS, )
)
Defendant. )
)

INFORMATION

The United States Attorney charges:
Case 1:22-cr-00034-DKW Document 1 Filed 05/04/22 Page 2 of 9 PageID #: 2

Wire Fraud
(18 u.s.c. § 1343)

THE COVID-19 PANDEMIC PPP & EIDL LOAN PROGRAMS

On March 13, 2020, the President of the United States declared that the

Coronavirus Disease 2019 ("COVID-19") pandemic was an emergency under

Section 501 (b) of the Robert T. Stafford Disaster Relief and Emergency Assistance

Act, 42 U.S.C. 5121-5207. Shortly afterward, on March 25, 2020, Congress

passed the Coronavirus Aid, Relief, and Economic Security (the "CARES") Act,

which was signed into law on March 27, 2020. The CARES Act provided

emergency funds that included financial assistance to individuals and businesses

suffering the economic effects caused by the COVID-19 pandemic.

The United States Small Business Administration (the "SBA") was an

executive-branch agency of the United States government directed to administer

certain CARES Act funds to small businesses in need of financial assistance.

The Paycheck Protection Program ("PPP")

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 certain

other expenses through the Paycheck Protection Program ("PPP"). In or around

April 2020, Congress authorized over $300 billion in additional PPP funding.

To obtain a PPP loan, a qualifying business had to submit an application

signed by an authorized representative of the business. The PPP loan application

2
Case 1:22-cr-00034-DKW Document 1 Filed 05/04/22 Page 3 of 9 PageID #: 3

required the business (through its authorized representative) to acknowledge the

program rules and make certain affirmative certifications to be eligible to obtain

the PPP loan. In the PPP loan application, the small business (through its

authorized representative) had to accurately and truthfully state, among other

things, its average monthly payroll expenses and number of employees. This

information was used to calculate the amount of money the business was eligible to

receive under the PPP. In addition, the business had to provide accurate and

truthful supporting documentation showing payroll expenses, such as the

business's filed United States Internal Revenue Service ("IRS") Forms 941

(Employer's Quarterly Federal tax returns). Forms 941 reported employee wages

and tax withholding amounts.

A PPP loan application was processed by a participating lender, such as a

financial institution. If a PPP loan application was approved, the participating

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

the 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.

The PPP loan proceeds could only be used by the business on certain

permissible business expenses, such as payroll costs, interest on mortgages, rent,

and utilities.

3
Case 1:22-cr-00034-DKW Document 1 Filed 05/04/22 Page 4 of 9 PageID #: 4

Economic Injury Disaster Loans ("EIDLs")

Economic Injury Disaster Loans ("EIDLs") provided low-interest financing

to small businesses, renters, and homeowners in regions affected in certain

declared disasters. The CARES Act authorized the SBA to provide EIDL funds, in

the form of both loans and grants, to eligible small businesses that had experienced

substantial financial disruptions due to the COVID-19 pandemic.

To obtain EIDL funds, a qualifying business had to submit an application

directly to the SBA and provide accurate and truthful information regarding

business ownership and operations, such as the number of employees, gross

revenue for the 12-month period preceding the disaster, and cost of goods sold in

the 12-month period preceding the disaster. In the case ofEIDLs for COVID-19

relief, the 12-month period was that preceding January 31, 2020. The applicant

also had to certify that all the information in the application was true and correct.

For a qualifying business, the application information and supporting

documentation was used to determine the amount ofEIDL funds the SBA would

make available to the business.

CARES Act EIDL funds could only be used as working capital to alleviate

economic injury caused by the COVID-19 pandemic. Permitted business expenses

included payroll, production costs, and business obligations, such as fixed debts,

mortgage, lease, or rent payments.

4
Case 1:22-cr-00034-DKW Document 1 Filed 05/04/22 Page 5 of 9 PageID #: 5

THE SCHEME TO DEFRAUD

From an earlier date unknown, but by in or around May 2020 to August

2020 and thereafter, within the District of Hawaii and elsewhere, CAREY MILLS,

the defendant, a resident of the Island of Hawaii, did knowingly devise and intend

to devise a scheme and artifice to defraud, that is to deceive and cheat, and to

obtain money by means of materially false and fraudulent pretenses,

representations, and promises, well knowing at the time that such pretenses,

representations, and promises would be and were false when made.

As part of the scheme to defraud:

MILLS knowingly and intentionally engaged in a scheme to obtain federally

guaranteed funds through the PPP and EIDL loan programs, which funds MILLS

knew he and several businesses were not entitled to receive. As part of this

scheme, MILLS took various steps to submit electronic applications for PPP and

EIDL small business loans. The applications included materially false and

fraudulent representations and information that MILLS knew to be false and

fraudulent at the time he submitted the applications.

In furtherance of the scheme to defraud:

MILLS applied for fraudulent loans using multiple businesses, including

Kanaka Maoli Hookupu Center ("KMHC"), New Way Horizon Travel ("NWHT"),

and Uilani Kawailehua Foundation ("UKF"). These businesses included

5
Case 1:22-cr-00034-DKW Document 1 Filed 05/04/22 Page 6 of 9 PageID #: 6

ownership information associated with MILLS' s family and friends, whose

information was part of the false loan applications - at times without their

knowledge or authorization. To support the false loan applications, MILLS

submitted false and fraudulent IRS Forms 941 listing false employee, payroll, and

wage information. MILLS also provided false payroll spreadsheets as part of the

loan application. Among other false representations on the applications, MILLS

reported false employee and payroll information, false revenue information, and on

the PPP loan applications he falsely answered "no" to the question whether the

business or business owner had any ownership or common management with any

other business. Further, the PPP loan applications included certifications,

including about applications for other PPP loans, that MILLS knew were false

when he submitted the applications.

As part of this scheme, the defendant received a total of $937,575 from three

fraudulent loan applications and one SBA grant. Specifically, on or about May 4,

2020, MILLS applied for a PPP loan for NWHT from Bank A and received

$350,000 for the loan on or about May 14, 2020; on or about May 17, 2020,

MILLS applied for a PPP loan for KMHC from Bank A and received $475,175 for

the loan on or about May 20, 2020; and on or about June 27, 2020, MILLS applied

for an EIDL loan and an SBA grant for UKF from the SBA and received $10,000

for the grant on or about June 30, 2020 and $102,400 for the loan on or about July

6
Case 1:22-cr-00034-DKW Document 1 Filed 05/04/22 Page 7 of 9 PageID #: 7

13, 2020. Bank A was a financial institution as defined by Title 18, United States

Code, Section 20. MILLS's scheme to defraud thereby affected a financial

institution.

MILLS directed the loan proceeds to be deposited into personal bank

accounts controlled by him and/or Person A. Prior to these loan deposits, the bank

account balances were only a few hundred dollars or less. Most of the loan

proceeds were spent in rapid succession and on items that provided MILLS and his

family a personal benefit, such as to pay rent on MILLS's personal residence.

Further, within weeks of the fraudulent loan deposits into MILLS and Person A's

accounts, MILLS and Person A used the fraudulent loan proceeds to purchase two

vacant real property lots located in Keaau, Hawaii.

THE WIRE COMMUNICATION

On or about May 14, 2020, within the District of Hawaii and elsewhere, and

for the purpose of executing the scheme and artifice to defraud, MILLS did

knowingly cause to be transmitted by means of wire communication in interstate

commerce signals and sounds, namely the transfer of $350,000 for a PPP loan for

NWHT from Bank A to MILLS ' s joint Bank of Hawaii account ending in -5554.

All in violation of Title 18, United States Code, Section 1343.

7
Case 1:22-cr-00034-DKW Document 1 Filed 05/04/22 Page 8 of 9 PageID #: 8

Forfeiture Notice

1. The allegations contained in the sole count of this Information are

incorporated by reference for the purpose of noticing forfeitures pursuant to Title

18, United States Code, Section 982( a)(2)(A) and/or Title 18, United States Code,

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

2. The United States hereby gives notice to CAREY MILLS, the defendant,

that, upon conviction of the offense charged in the sole count of this Information,

the government will seek forfeiture, in accordance with Title 18, United States

Code, Section 982(a)(2)(A) and/or Title 18, United States Code, Section

981(a)(l)(C) and Title 28, United States Code, Section 2461(c), of any and all

property, real or personal, that constitutes or is derived from proceeds traceable to

the violations of Title 18, United States Code, Section 1343, alleged in

the sole count of the Information, including:

a. $69,791.77 seized from Title Guaranty Escrow Services Inc. on or

about January 3, 2022, for proceeds of a sale of real property

located at 15-1544 15th Avenue, Lot 845, Keaau, Hawaii 96749

(Tax Map Key No.: 3-1-5-42-24).

3. If by any act or omission of the defendant, any of the property subject

to forfeiture described in paragraph 2 herein:

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

8
Case 1:22-cr-00034-DKW Document 1 Filed 05/04/22 Page 9 of 9 PageID #: 9

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

e. has been commingled with other property which cannot be

subdivided without difficulty

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

up to the value of the property described above in paragraph 2, pursuant to Title

21, United States Code, Section 853(p), as incorporated by Title 18, United States

Code, Section 982(b)(l) and/or Title 28, United States Code, Section 246l(c).

DATED: May~' 2022, at Honolulu, Hawaii.

ttorney
District of Hawaii

filil?~
REBECCA A. PERLMUTTER
GREGG PARIS YATES
Assistant United States Attorneys

United States v. Carey Mills
Infonnation
Cr. No. 22-00034 DKW
9

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