Information — United States v. Patrick Strauss, District of Columbia (Document 1)
Summary
A criminal information against Patrick Strauss in the United States District Court for the District of Columbia, Case 1:24-cr-00374-RC, filed August 19, 2024 as Document 1. Count 1 charges conspiracy to commit bank fraud under 18 U.S.C. § 1349 between on or about July 10, 2020 and on or about July 23, 2021. It alleges that Strauss, owner of Powergrid Real Estate LLC, submitted to Capital Bank a PPP loan application prepared by co-conspirators claiming 16 employees and an average monthly payroll of $132,547.17 when the business had no employees or payroll. It states that the loan was funded for $304,900, that Strauss wired $124,000 to an account of a business associated with Individual 1, and that a false Form 3508EZ led to forgiveness of the loan.
Summary drafted by a model from the text of the original file linked on this page and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Information — United States v. Patrick Strauss, District of Columbia (Document 1).”
Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/information-no-1-24-cr-00374-dkt-1-d-d-c-3da707c7c8/
, SHA-256 ad6cfda8d588d83f4e673282eaddb491b27745c59a6d2d970b351285625d9b06.Full text
Case 1:24-cr-00374-RC Document 1 Filed 08/19/24 Page 1 of 9
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA ) CRIMINAL NO.
)
v. )
) VIOLATION:
PATRICK STRAUSS, )
) Count 1: 18 U.S.C. § 1349
Defendant ) (Conspiracy to Commit Bank Fraud)
INFORMATION
The United States Attorney for the District of Columbia charges that:
Background
At all times relevant to this Information, on or about the dates and times stated herein:
The Co-Conspirators
1. Defendant Patrick Strauss was a resident of the District of Columbia and the
owner and operator of Powergrid Real Estate LLC.
2. Kelly Winston was a resident of Maryland and employed as an accountant for
several businesses under the control of Individual 1 that operated in the District of Columbia.
3. Individual 1 was a resident of Maryland and operated several businesses in the
District of Columbia that provide services to the District.
Relevant Entities
4. Powergrid Real Estate LLC (“Powergrid”), was a real estate business registered as
a corporation in Delaware on May 23, 2017, and operated in the District of Columbia.
5. Capital Bank, N.A. (“Capital Bank”) is a financial institution insured by the Federal
Deposit Insurance Corporation.
Case 1:24-cr-00374-RC Document 1 Filed 08/19/24 Page 2 of 9
The Small Business Administration
6. The United States Small Business Administration (“SBA”) was an executive
branch agency of the United States government that provided support to entrepreneurs and small
businesses. The mission of the SBA was to maintain and strengthen the nation’s economy by
enabling the establishment and viability of small businesses and by assisting in the economic
recovery of communities after disasters.
The Paycheck Protection Program
7. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal
law enacted in or around March 2020 and designed to provide emergency financial assistance to
the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. One
source of relief provided by the CARES Act was the authorization of billions in forgivable loans
to small businesses for job retention and certain other expenses, through a program referred to as
the Paycheck Protection Program (“PPP”).
8. In order to obtain a PPP loan, a qualifying business must have submitted a PPP loan
application, which is signed by an authorized representative of the business. The applicant of a
PPP loan was required to acknowledge the program rules and make certain affirmative
certifications in order to be eligible to obtain the PPP loan. In the PPP loan application, the
applicant must state, 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 small business is
eligible to receive under the PPP. In addition, businesses applying for a PPP loan must have
provided documentation showing their payroll expenses. To qualify for eligibility, businesses that
applied for a PPP loan needed to be in operation as of February 15, 2020.
9. A PPP loan application must have been processed by a participating financial
institution (the lender). If a PPP loan application was approved, the participating financial
2
Case 1:24-cr-00374-RC Document 1 Filed 08/19/24 Page 3 of 9
institution funds the PPP loan using its own monies, which are 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.
10. PPP loan proceeds must have been used by the business for certain permissible
expenses—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 spends the loan proceeds on
these expense items within a designated period of time and uses a certain percentage of the PPP
loan proceeds on payroll expenses.
11. On December 27, 2020, the Economic Aid to Hard-Hit Small Business, Nonprofits
and Venues Act provided additional funding for the PPP and extended the application deadline to
March 31, 2021. The act enables borrowers to take a second draw PPP loan under the same general
terms as their first PPP loan up to a maximum loan amount of $2 million. The act reopened the
program to borrowers who did not previously receive a first draw PPP loan. To be eligible for a
second draw, borrowers must employ no more than 300 employees, demonstrate a 25% reduction
in gross receipts during a calendar quarter in 2020, and have expended the full amount of their
initial PPP loan. Allowable expenses were expanded to include worker protection costs related to
COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and
certain supplier costs and expenses for operations. The expansion applies retroactively to first draw
PPP loans that have not been forgiven by the SBA.
12. On March 25, 2021, the PPP Extension Act of 2021 extended the application
deadline from March 31, 2021, to May 31, 2021. In addition to extending the PPP application
filing window by 60 days, the Extension Act provided an extra 30 days for the SBA to finish
processing applications received by the May 31, 2021, deadline.
3
Case 1:24-cr-00374-RC Document 1 Filed 08/19/24 Page 4 of 9
COUNT 1
(18 U.S.C. § 1349 – Conspiracy to Commit Bank Fraud)
13. Paragraphs 1 through 12 are hereby realleged.
14. Between on or about July 10, 2020, and on or about July 23, 2021, in the District
of Columbia and elsewhere, the defendant,
PATRICK STRAUSS
and others, known and unknown to the grand jury, did knowingly conspire, combine, confederate,
and agree to commit bank fraud, by executing and attempting to execute a scheme and artifice to
obtain moneys, funds, credits, assets, securities, and other property owned by, and under the
custody and control of a federally insured financial institution, by means of false and fraudulent
pretenses, representations, and promises.
Purpose of the Conspiracy
15. It was the purpose of the conspiracy for Strauss, Winston, Individual 1 and other
co-conspirators to enrich themselves, and each other, by obtaining PPP loans under false and
fraudulent pretenses, and to spend the fraudulently obtained money, in part, for their own benefit
and enjoyment.
Manner and Means of the Scheme to Defraud
16. It was part of the scheme to defraud that:
17. Individual 1 contacted business owners within the District of Columbia, Maryland
and Virginia, including Strauss, to inquire about their interest in applying for a PPP loan for which
Winston would prepare the loan application – irrespective of the business’s eligibility and without
collecting from the business owners the supporting documents or information, such as accurate
payroll data, necessary to support their applications.
4
Case 1:24-cr-00374-RC Document 1 Filed 08/19/24 Page 5 of 9
18. Individual 1 directed Winston to prepare PPP loan applications for the business so
identified, which Winston did for, among others, Powergrid.
19. As Individual 1 was aware, Winston intentionally prepared the PPP loan
applications to seek amounts higher than the loan amounts for which the businesses might have
qualified. To do so, Winston included false and misleading information in the applications.
20. Winston prepared phony federal tax forms and payroll records to support the
fraudulent PPP loan applications.
21. Winston and Individual 1 provided the fraudulent applications and supporting
documents to businesses owners, including Strauss, who each submitted the fraudulent
applications and supporting documents to a financial institution supporting the PPP loan program.
As a result, the financial institutions approved and disbursed the requested PPP loans.
22. After fraudulently obtaining the PPP loans, the business owners, including Strauss,
kicked back a percentage of the loan proceeds to Individual 1, who in-turn split the money with
Winston.
23. Individual 1 used the loan proceeds kicked back to him for his own personal
enrichment.
24. Winston, acting at Individual 1’s direction, also prepared PPP loan forgiveness
applications for the businesses for which she had prepared the fraudulent PPP loan applications.
25. Winston provided the PPP loan forgiveness applications to the business owners,
including Strauss, who submitted them to the applicable financial institution to seek and obtain
loan forgiveness.
Execution of the Conspiracy with Regard to Powergrid
26. In the summer of 2020, Individual 1 approached Strauss to ask if he wanted to
apply, with Individual 1’s assistance, for a PPP loan in the name of Powergrid. At the time, both
5
Case 1:24-cr-00374-RC Document 1 Filed 08/19/24 Page 6 of 9
Individual 1 and Strauss were aware that Powergrid did not qualify for a PPP loan because it did
not have any employees or payroll.
27. Individual 1 and Strauss agreed that Individual 1 would receive a portion of the
PPP funds if the loan application was approved and funded.
28. In July 2020, Individual 1 provided Strauss with a PPP loan application containing
materially false statements, including that Powergrid had 16 employees and an average monthly
payroll of $132,547.17, when in fact, as of July 2020, it had no employees and no payroll. In
addition, Individual 1 provided Strauss false and fraudulent supporting documents to submit with
his loan application, including: false financial statements for 2019 and for the first two quarters of
2020, false monthly payroll reports for May 2019 through March 2020, and false Employer’s
Quarterly Federal Tax Return (Forms 941), for the second, third, and fourth quarters of 2019 and
first quarter of 2020.
29. Strauss understood that the application and supporting documentation given to him
by Individual 1 had been prepared by Winston, even though neither Individual 1, nor Winston,
requested, or received any information from Strauss that would be necessary to submit a complete
and accurate PPP loan application had Powergrid been eligible for a loan.
30. Individual 1 and Strauss agreed that Strauss would submit the PPP loan
application to Capital Bank to seek a loan in the amount of $331,367.92.
31. On or about July 10, 2020, Strauss submitted the PPP Loan application given to
him by Individual 1 to Capital Bank to obtain a $331,367.92 PPP loan in the name of Powergrid.
In addition, Strauss submitted to Capital Bank, with his application, supporting documents he
knew to contain false information.
6
Case 1:24-cr-00374-RC Document 1 Filed 08/19/24 Page 7 of 9
32. On or about July 22, 2020, as a result of a system failure by Capital Bank, Strauss,
through Winston and Individual 1, resubmitted Powergrid’s false and fraudulent PPP loan
application.
33. On July 22, 2020, Capital Bank, based on the representations of Strauss, adjusted
the loan amount to $304,933.
34. On July 22, 2020, the SBA and Capital Bank approved Strauss’s fraudulent PPP
loan application and funded the loan in amount of $304,900.
35. On July 23, 2020, Strauss opened a Capital Bank business checking account ending
in -0211.
36. On July 24, 2020, Strauss electronically signed various loan documents including
a Promissory Note and Disbursement Request and Authorization.
37. On July 29, 2020, the SBA and Capital Bank wired $304,900 into Powergrid’s
Capital Bank account ending in -3426.
38. On July 29, 2020, Strauss wired $304,800 from Powergrid’s Capital Bank account
ending in -0211 to a TD Bank account ending in -3426, also held by Powergrid.
39. On August 3, 2020, Strauss wired $124,000 from Powergrid’s TD Bank account
ending in -3426 to a Truist Bank account ending in -1820, held by a business associated with
Individual 1.
40. On June 4, 2021, Strauss forwarded Individual 1 an email containing a link to
Capital Bank’s PPP loan forgiveness application for Powergrid.
41. On June 25, 2021, Strauss emailed Individual 1 regarding the status of Powergrid’s
loan forgiveness application. Individual 1 responded that Winston would complete and submit the
application.
7
Case 1:24-cr-00374-RC Document 1 Filed 08/19/24 Page 8 of 9
42. On July 20, 2021, Strauss forwarded an email to Winston and Individual 1 from
Capital Bank requesting “a summary paycheck or an FTE [(Full Time Equivalent)] snapshot
document from ADP” for the period of January 1, 2020 through October 23, 2020.
43. On July 20, 2021, at the direction of Individual 1, Winston prepared false and
fraudulent Employer’s Quarterly Federal Tax Return (Forms 941) in support of Powergrid’s PPP
loan forgiveness application.
44. On July 23, 2021, Strauss submitted a Form 3508EZ to Capital Bank on behalf of
Powergrid seeking forgiveness for his PPP loan. The application falsely claimed that Powergrid
had 16 employees at the time Strauss received the PPP loan, when in fact it had no employees.
The application also falsely claimed that, for the period of July 27, 2020, through October 23,
2020, Powergrid spent the full amount of the second draw loan, $304,900 on payroll costs, when
in fact it had no payroll costs.
45. As a result of the false Form 3508EZ submission and supporting documentation,
Capital Bank and the SBA forgave Powergrid’s PPP loan.
(All in violation of Title 18, United States Code, Section 1349)
NOTICE OF FORFEITURE
The allegations contained in Count One of this Information are hereby realleged and
incorporated by reference for the purpose of alleging forfeitures pursuant to Title 18, United States
Code, Sections 982(a)(2)(A).
Upon conviction of the offense of conspiracy to commit bank fraud in violation of Title
18, United States Code, Section 1349, Defendant,
PATRICK STRAUSS,
8
Case 1:24-cr-00374-RC Document 1 Filed 08/19/24 Page 9 of 9
shall forfeit to the United States of America, pursuant to Title 18, United States Code, Section
982(a)(2)(A), any property constituting, or derived from, proceeds obtained, directly or indirectly,
as a result of such violation.
MONEY JUDGMENT
In the event of conviction, the United States may seek a money judgment.
SUBSTITUTE ASSETS
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 cannot be divided without
difficulty,
the United States of America shall be entitled to forfeiture of substitute property pursuant to Title
21, United States Code, Section 853(p), as incorporated by Title 28, United States Code, Section
2461(c).
All pursuant to 18 U.S.C. ' 981(a)(1)(C) and 28 U.S.C. ' 2461(c).
_____________________________
MATTHEW M. GRAVES
UNITED STATES ATTORNEY
D.C. Bar No. 481052
9
File and source
- File
- 1-information.pdf
- Size
- 205,552 bytes
- SHA-256
- ad6cfda8d588d83f4e673282eaddb491b27745c59a6d2d970b351285625d9b06
- Our copy
- 1-information.pdf
- Original
- archive.org