Information — United States v. Patricia Ann Gilroy, District of Colorado (Document 1)

Summary

A criminal information against Patricia Ann Gilroy in the United States District Court for the District of Colorado, Criminal Case No. 22-cr-00063-DDD, filed February 16, 2022 as Document 1. Count One charges wire fraud under 18 U.S.C. § 1343. It alleges that from in or about April 2020 through in or about April 2021 Gilroy submitted false PPP and EIDL applications on behalf of ten inactive, shell companies, with false statements about payroll, employees, gross revenues and eligibility, and false tax forms. It states that bank accounts controlled by Gilroy received a total of $865,351 in PPP and EIDL proceeds, including $518,135 from PPP applications and $294,300 from EIDL loans. The charged wire is a $144,400 EIDL payment for Pest Control Services processed on or about November 3, 2020.

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Case 1:22-cr-00063-DDD Document 1 Filed 02/16/22 USDC Colorado Page 1 of 7




                    IN THE UNITED STATES DISTRICT COURT
                       FOR THE DISTRICT OF COLORADO

Criminal Case No.   22-cr-00063-DDD

UNITED STATES OF AMERICA,

      Plaintiff,
v.

1.    PATRICIA ANN GILROY,

      Defendant.



                                   INFORMATION



      The UNITED STATES ATTORNEY charges that:

                                    COUNT ONE
                                  18 U.S.C. § 1343

General Allegations

      On March 27, 2020, the President of the United States signed into law the

Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provided

emergency assistance, administered by the United States Small Business

Administration (SBA), to small business owners affected by the Coronavirus (COVID-

19) pandemic. The two sources of funding for small businesses were the Paycheck

Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL) program.

The CARES Act mandated that only businesses in operation on February 15, 2020, for

PPP, or before February 1, 2020, for EIDL, were eligible under the programs.




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       PPP loan proceeds were required to be used for certain permissible expenses,

including payroll costs, mortgage interest, rent, and utilities. To obtain a PPP loan, a

qualifying small business was required to submit a PPP loan application, signed by an

authorized representative of the business, in which the applicant acknowledged the

program rules and made certain affirmative certifications. The applicant was also

required to state the business’s: (a) average monthly payroll expenses; and (b) number

of employees. These figures were used to calculate the loan amount that the business

was eligible to receive under the PPP. Businesses were also required to provide

documentation showing their payroll expenses. PPP loan applications were received

and processed, in the first instance, by a participating lender. If a PPP loan application

was approved, the participating lender funded the loan using its own monies, but the

loans were 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

SBA paid participating lenders a processing fee for each funded PPP loan.

       At all times relevant to this plea agreement and until April 2021, under the EIDL

program, a small business could receive a loan from the SBA in an amount of up to six

months of working capital with a maximum of $150,000. The SBA determined the

amount of the loan for which each small business was eligible based, in part, on the

amount of gross revenues and cost of goods sold for the business set forth in the EIDL

application.




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The Scheme

      1.     Beginning in or about April 2020 and continuing through in or about April

2021, in the State and District of Colorado and elsewhere, defendant PATRICIA ANN

GILROY (GILROY) devised and intended to devise a scheme to defraud the SBA and to

obtain money by means of materially false and fraudulent pretenses, representations,

and promises (herein after referred to as the "Scheme"). The Scheme was executed in

connection with seeking loans under the PPP and EIDL programs as authorized by the

CARES Act by submitting false and fraudulent EIDL and PPP loan applications on

behalf of ten inactive, shell companies. It was part of the Scheme that:

             a. From at least April 2020 through at least April 2021, defendant

                 GILROY controlled 10 shell companies that had not been active

                 companies with employees, gross receipts or costs of goods sold

                 during the 12 months prior to January 31, 2020, and had not been in

                 operation on February 15, 2020, or prior to February 1, 2020;

             b. From in or about April 2020 through in or about April 2021, defendant

                 GILROY submitted eight false and fraudulent PPP applications to

                 lenders on behalf of six of these shell companies; three of the

                 applications were approved, resulting in a total of $518,135 being sent

                 to bank accounts controlled by GILROY;

             c. In all eight of these PPP applications, Gilroy knowingly and with the

                 intent to defraud made materially false statements about each shell

                 company’s: (1) average monthly payroll; (2) number of employees; (3)




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              eligibility to receive the loan; and (4) intent to use the loan proceeds

              only for business-related purposes as permitted under PPP;

           d. With these eight PPP applications, Gilroy also knowingly and

              intentionally submitted fraudulent supporting documentation, including

              false tax forms to support her false statements about payroll;

           e. GILROY also fraudulently applied for and received second draw

              payments under PPP for two of these shell companies, resulting in a

              total of an additional $52,916 being sent to bank accounts controlled

              by GILROY;

           f. From in or about August 2020 through in or about November 2020,

              defendant GILROY also submitted false and fraudulent applications on

              behalf of six of these shell companies to the SBA seeking loans under

              the EIDL program. Two of those EIDL applications were approved and

              funded by the SBA, resulting in a total of $294,300 being sent to bank

              accounts controlled by GILROY;

           g. In all six EIDL applications, GILROY knowingly and with the intent to

              defraud made materially false statements about: (1) the number of

              employees each company had as of January 31, 2020; and (2) the

              amount of gross revenues and cost of goods sold that each company

              had in the 12 months prior to January 31, 2020;

           h. Additionally, in connection with each of the two funded EIDL loans,

              GILROY signed a Loan Authorization and Agreement in which she

              falsely agreed to “use all proceeds of this Loan solely as working



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                 capital to alleviate economic injury caused by the disaster occurring in

                 the month of January 31, 2020 and continuing thereafter and to pay

                 Uniform Commercial Code (UCC) lien filing fees and a third-party UCC

                 handling charge of $100 which will be deducted from the Loan

                 amount”;

             i. In fact, defendant GILROY had always intended to, and did, use the

                 PPP and EIDL proceeds for other purposes not authorized by the

                 CARES Act; and

             j. As a result of these fraudulent PPP and EIDL applications, bank

                 accounts controlled by defendant GILROY received a total of $865,351

                 in PPP and EIDL proceeds.

Execution of the Scheme

      2.     For the purpose of executing the Scheme described in paragraphs 1a.

through 1j. above, defendant GILROY caused to be transmitted the following interstate

wire communication pertaining to an EIDL that defendant GILROY applied for on behalf

of Pest Control Services: on or about November 3, 2020, the SBA in Denver, Colorado

created and certified the payment file for this loan to Pest Control Services and

transmitted it via interstate wire communications from Colorado to the U.S. Treasury

processing site located in the Kansas City Regional Operations Center in Kansas City,

Missouri. After a computer operator at the U.S. Treasury disbursing office in Kansas

City, Missouri performed payment operations to complete the processing of the file, an

Automated Clearing House (ACH) payment file was transmitted to the Federal Reserve

Bank ACH processing site in New Jersey. The Federal Reserve Bank in New Jersey



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processed the payment file and sent $144,400 to Bank of America in Missouri with Pest

Control Services designated as the payee.

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

                                   Forfeiture Allegation

       4.     The allegations contained in Count One of this Information are hereby

realleged and incorporated by reference for the purpose of alleging forfeiture pursuant

to the provisions of 18 U.S.C. §§ 981(a)(1)(C) and 28 U.S.C. § 2461(c).

       5.     Upon conviction of the violation alleged in Count One of this Information

involving a violation of 18 U.S.C. § 1343, defendant PATRICIA ANN GILROY 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 and all of the

defendant’s right, title and interest in all property constituting and derived from any

proceeds the defendant obtained directly and indirectly as a result of such offense,

including, but not limited to the entry of a money judgment in the amount of proceeds

obtained by the scheme and by the defendant.

       6.     If any of the property described above, 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;

       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



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