Information — United States v. Christopher Brian Valdes, District of Colorado (Document 1)
Summary
A criminal information in United States of America v. Christopher Brian Valdes, Case No. 1:23-cr-00292-PAB, in the United States District Court for the District of Colorado, filed June 8, 2023 as Document 1. Count One charges wire fraud under 18 U.S.C. § 1343 for a scheme from in or around May 2020 through in or around May 2021. The information alleges that Valdes submitted three EIDL applications for entities he controlled, funded for a total of $433,800 plus $16,000 in EIDGs, and created fabricated documents for Individual 1's PPP and EIDL applications. It alleges that the SBA funded 27 other EIDL applications Valdes prepared and 14 EIDGs, totaling $3,436,300 and $124,000, and that $4,544,340 in PPP loan and EIDL proceeds was paid out in total. The charged wire is a $149,900 payment on or about July 7, 2020 for Zul Technologies Inc.
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“Information — United States v. Christopher Brian Valdes, District of Colorado (Document 1).”
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Case No. 1:23-cr-00292-PAB Document 1 filed 06/08/23 USDC Colorado pg 1 of 7
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Criminal Case No. 23-cr-00292-PAB
UNITED STATES OF AMERICA,
Plaintiff,
v.
1. CHRISTOPHER BRIAN VALDES,
Defendant.
INFORMATION
The UNITED STATES ATTORNEY charges that:
COUNT ONE
18 U.S.C. § 1343
General Allegations
1. The United States Small Business Administration (“SBA”) is an executive-
branch agency of the United States government that provides support to entrepreneurs
and small businesses.
2. 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 to small business owners suffering adverse economic effects
caused by the Coronavirus (“COVID-19”) pandemic. The CARES Act established
several new temporary programs and expanded existing programs, including programs
created or administered by the SBA. Two sources of funding for small businesses were
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Case No. 1:23-cr-00292-PAB Document 1 filed 06/08/23 USDC Colorado pg 2 of 7
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.
3. The EIDL program was an SBA program that provided low-interest
financing to small businesses in regions affected by declared disasters. The CARES
Act authorized the SBA to provide EIDLs to eligible small businesses experiencing
substantial financial disruptions due to the COVID-19 pandemic. In addition, the
CARES Act authorized the SBA to issue advances of up to $10,000 to small
businesses, known as Economic Injury Disaster Grants (“EIDG”). The amount of the
EIDG was determined by the number of employees the applicant certified having. The
EIDGs did not need to be repaid.
4. 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. Thereafter, in April 2021, the SBA increased the EIDL limit to
allow small businesses to receive loans in the amount of up to 24 months of working
capital with a maximum of $500,000. In order to obtain an EIDL and/or EIDG, a
qualifying business was required to submit an application to the SBA and provide
information about its operations, such as the number of employees and the entity’s
gross business revenues and cost of goods sold in the twelve months prior to January
31, 2020. The amount of the loan, if approved, was determined in part based on the
information provided concerning the gross revenue and cost of goods sold. EIDL funds
were issued directly by the SBA. EIDL funds were permitted to be used for payroll
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Case No. 1:23-cr-00292-PAB Document 1 filed 06/08/23 USDC Colorado pg 3 of 7
expenses, sick leave, production costs, and business obligations, such as debts, rents,
and mortgage payments.
5. The CARES Act further authorized the PPP program, which provided
forgivable loans to small businesses. PPP loan proceeds were required to be used for
certain permissible expenses, including payroll costs, mortgage interest, rent, and
utilities.
6. 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.
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Case No. 1:23-cr-00292-PAB Document 1 filed 06/08/23 USDC Colorado pg 4 of 7
The Scheme to Defraud
7. Beginning in or around May 2020 and continuing through in or around May
2021, in the State and District of Colorado and elsewhere, defendant CHRISTOPHER
BRIAN VALDES devised and intended to devise a scheme to defraud and to obtain
money and property from the United States and participating lenders by means of
materially false and fraudulent pretenses, representations and promises (hereinafter
referred to as the “Scheme”). The Scheme was executed in connection with defendant
VALDES’s submitting fraudulent EIDL applications on behalf of entities that he
controlled and on behalf of other individuals and entities, as well as defendant
VALDES’s creation of fabricated documents for others who he knew would use them to
obtain fraudulent EIDL and PPP loans. It was part of the Scheme that:
8. From in or around June 2020 through August 2020, defendant VALDES
prepared and submitted three fraudulent EIDL applications to the SBA on behalf of
three entities that he controlled, using the identities and personal identifying information
of other individuals to obtain EIDL loans and grants in their names.
9. In these three fraudulent EIDL applications, defendant VALDES made
false statements regarding the entities’ number of employees, gross revenues, and cost
of goods sold; he further falsely certified that the information provided in the EIDL
applications was true and accurate and that the funds would be used to pay payroll and
other permissible expenses when, in fact, he always intended to use the proceeds for
his personal benefit.
10. The SBA funded these three EIDLs for a total of $433,800, plus an
additional $16,000 in EIDGs.
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Case No. 1:23-cr-00292-PAB Document 1 filed 06/08/23 USDC Colorado pg 5 of 7
11. From in or around May 2020 to in or around May 2021, defendant
VALDES also created and provided an individual (“Individual 1”) with fabricated
documents to submit in connection with Individual 1’s PPP loan and EIDL applications,
including Internal Revenue Service documents, checks, and bank statements.
12. Two of the fraudulent EIDL applications that were submitted by Individual
1 with these fabricated documents were approved and funded by the SBA for a total of
$294,500. One fraudulent PPP application submitted with these fabricated documents
was also approved and funded, resulting in $239,740 being sent to a bank account
controlled by Individual 1.
13. From in or around June 2020 through April 2021, defendant VALDES
prepared and submitted fraudulent EIDL applications to the SBA on behalf of other
individuals and entities. These applications contained false statements regarding, inter
alia, the entities’ ownership, operations prior to February 1, 2020, gross revenues, cost
of goods sold, and number of employees.
14. The SBA approved and funded 27 of these EIDL applications and 14
EIDGs for a total of $3,436,300 in EIDL funds and $124,000 in EDIGs.
15. In total, $4,544,340 of PPP loan and EIDL proceeds were paid out as a
result of the Scheme.
Execution of the Scheme
16. For the purpose of executing the Scheme described in paragraphs 7–15
above, defendant VALDES caused to be transmitted by means of wire communication
in interstate commerce the following signals and sounds: on or about July 7, 2020, the
SBA in Denver, Colorado created and certified the payment file for the EIDL pertaining
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Case No. 1:23-cr-00292-PAB Document 1 filed 06/08/23 USDC Colorado pg 6 of 7
to Zul Technologies Inc. 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 processed the payment file and sent $149,900 to
Wells Fargo Bank in Minnesota with Zul Technologies Inc. designated as the payee.
All in violation of Title 18, United States Code, Section 1343.
Forfeiture Allegation
17. 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).
18. Upon conviction of the violation alleged in Count One of this Information
involving a violation of 18 U.S.C. § 1343, defendant CHRISTOPHER BRAIN VALDES
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.
19. If any of the property described above, as a result of any act or omission
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Case No. 1:23-cr-00292-PAB Document 1 filed 06/08/23 USDC Colorado pg 7 of 7
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 cannot be subdivided
without difficulty;
it is the intent of the United States, pursuant to Title 21, United States Code, Section
853(p), Title 28, United States Code, Section 2461(c), to seek forfeiture of any other
property of said defendant up to the value of the forfeitable property.
COLE FINEGAN
UNITED STATES ATTORNEY
s/ Nicole C. Cassidy_____
By: Nicole C. Cassidy
Assistant United States Attorney
1801 California Street, Suite 1600
Denver, CO 80202
Phone: (303) 454-0100
Fax: (303) 454-0402
nicole.cassidy@usdoj.gov
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