Criminal Information — United States v. Sean Tracy Dillard, Eastern District of North Carolina (Document 1)

Summary

A criminal information in United States of America v. Sean Tracy Dillard, filed May 31, 2023 as Document 1 in No. 2:23-cr-00011-FL in the U.S. District Court for the Eastern District of North Carolina. It charges theft of federal funds under Title 18, United States Code, Section 641, tied to the NC HOPE emergency rental assistance program. The information alleges that from in or about August, 2021 to December 29, 2021 Dillard signed approximately ten fraudulent applications seeking about $64,860, posing as landlord, listing fabricated tenants and submitting fraudulent leases. It alleges that Dillard negotiated six NC HOPE rental assistance checks. The forfeiture notice seeks a money judgment of at least $64,860.00, and the signature block names United States Attorney Michael F. Easley, Jr.

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“Criminal Information — United States v. Sean Tracy Dillard, Eastern District of North Carolina (Document 1).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/information-no-2-23-cr-00011-dkt-1-e-d-n-c-77d1b6a867/, SHA-256 5b00ce4d6167795aab092b3e7e7d9abe403d9d67720bde05f54f2730e2c39afe.

Full text

UNITED STATES DISTRICT COURT
FILED
EASTERN DISTRICT OF NORTH CAROLINA
MAY 3 1 2023
NORTHERN DIVISION

NO.: 2=2 3-~-- \\-FL-
UNITED STATES OF AMERICA )
)
V. ) CRIMINAL INFORMATION
)
SEAN TRACY DILLARD )

The United States Attorney charges at all relevant times:

INTRODUCTION

1. Between August, 2021 to December 29, 2021, Defendant SEAN TRACY

DILLARD carried out a housing fraud scheme to obtain emergency rental assistance

designated for households impacted by the coronavirus pandemic. The scheme

included fraudulent applications submitted to the North Carolina agency tasked with

administering federal Covid-19 relief funds to provide financial assistance to North

Carolina residents whose housing was impacted by the Covid-19 pandemic. In total,

DILLARD obtained/sought $64,860 in fraudulent proceeds in connection with this

scheme.

2. On March 13, 2020, President Donald J. Trump declared the existence

of a national emergency in response to the Covid-19 pandemic. On March 27, 2020,

Congress enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act,

which was de signed to provide emergency financial assistance to millions of

Americans who were suffering the economic effects caused by the Covid-19 pandemic.

Case 2:23-cr-00011-FL Document 1 Filed 05/31/23 Page 1 of 8
3. One source of relief provided by the CARES Act was the authorization

of $5 billion in Community Development Block Grant ("CDBG") programs as flexible

federal funding to states and localities earmarked to prevent, prepare for, and

respond to the coronavirus pandemic. The United States Department of Housing and

Urban Development ("HUD") administers the Community Development Block Grant

("CDBG") program as a source of flexible federal funding for economic and community

development, as well as to direct long-term recovery funding to states and localities

in response to disasters and emergencies.

4. Another source of relief allocated m the CARES Act was the

establishment of a $150 billion Coronavirus Relief Fund ("CRF''), funded by the

United States Department of Treasury ("US Treasury"), to assist states and localities

cover expenses incurred due to the Covid-19 public health emergency.

5. The State of North Carolina's Office of Recovery and Resiliency

("NCORR"), a division of the North Carolina Department of Public Safety, utilized

federal funds made available in the CARES Act to assist North Carolina renters stay

in their homes during Covid-19 by preventing evictions and the loss of utility services.

The North Carolina Housing Opportunities for the Prevention of Evictions program,

known as the NC HOPE program, utilized an initial $51.5 million allocation of CDBG

funds from the CARES Act to provide housing and utility assistance. The State of

North Carolina also received CRF funds from the CARES Act, of which $66 million

was allocated to pay administrative costs associated with the NC HOPE program.

Case 2:23-cr-00011-FL Document 1 Filed 05/31/23 Page 2 of 8
This first wave of rental assistance provided to North Carolina renters by the NC

HOPE program, using CDBG and CRF funds , became known as "HOPE 1.0."

6. On December 27, 2020, the Consolidated Appropriations Act of 2021

("CAA") became law, which included $900 billion in federal support for additional

economic assistance and stimulus relief to address the ongoing Covid-19 pandemic.

The CAA continued many of the programs authorized under the CARES Act, as well

as added new allocations and new guidance to address the continued impact on

American lives caused by the pandemic. Among other things, the CAA established

the Emergency Rental Assistance ("ERA-1") program. Funded through the US

Treasury, ERA-1 provided $25 billion for states to administer to households that were

impacted by Covid-19 and unable to pay rent or utilities. A second Emergency Rental

Assistance program ("ERA-2") was established through the American Rescue Plan

Act of 2021 ("ARP"). Also funded through the US Treasury, an additional $21.55

billion was made available for states and localities to provide rental and utility

assistance to eligible households during the pandemic.

7. The State of North Carolina received a total of $1.261 billion from ERA-

1 and ERA-2. From this funding, 12 counties and six cities received $493 million

directly from the US Treasury. The remaining $761.5 million was disbursed to fund

the NC HOPE program. This second wave of funding to the NC HOPE program,

through the US Treasury ERA programs, became known as "HOPE 2.0."

Case 2:23-cr-00011-FL Document 1 Filed 05/31/23 Page 3 of 8
8. In total, the NC HOPE program received $879 million from the federal

government to assist North Carolina renters who faced housing insecurity due to the

Covid-19 pandemic.

9. The HOPE 2.0 program paid for up to 15 months of assistance , including

12 months of arrears. In exchange for the NC HOPE program funds, landlords were

required to agree not to evict the tenant for a certain amount of time. The NC HOPE

program closed to applicants on December 17, 2021.

10. To be eligible for assistance through the NC HOPE program, a tenant

must have faced possible eviction or missed rent or utility payments anytime since

April 1, 2020, and had lost income, employment, or faced financial hardship due to

the Covid-19 pandemic. The tenant applicant must have occupied the rental property

as their primary residence and be a named party to the lease or rental agreement.

Additionally, the tenant applicant must earn an income less than or equal to eighty

percent (80%) of the median income of the county of residence.

11. To obtain assistance, a tenant submitted an electronic application,

stating his name, rental address, contact information, household members, household

income, and contact information for the landlord or utility provider. The online

application also required the tenant to confirm that (s)he lived at the address, was

behind on rent or unable to pay rent or utilities due to the Covid-19 pandemic, and

the amount owed to the landlord and the utility provider. The NC HOPE program

requested, but did not require, the tenant to submit a form of identification. It also

Case 2:23-cr-00011-FL Document 1 Filed 05/31/23 Page 4 of 8
requested a copy of the tenant's lease, or written statement from the landlord

identifying the amount of rent owed. The tenant was required to certify the accuracy

and truthfulness of the application.

12. If eligible to receive rental assistance, the NC HOPE program sent a

Landlord Tenant Agreement ("LTA") to the email addresses provided for both the

landlord and tenant. In signing the LTA, both parties were required to attest that

the statements to the NC HOPE program were true and correct to the best of their

knowledge.

13. Once both parties signed the LTA, the NC HOPE program required the

landlord to submit an Internal Revenue Service Form W-9, with their name, address,

filing status, and taxpayer identification number. By signing the W-9, the landlord

certified under penalties of perjury the accuracy of the information provided to the

NC HOPE program on the Form W-9.

14. Upon approval, a check issued by the North Carolina Department of

Public Safety was mailed directly to the landlord or utility company to pay the tenant

applicant's rent or utility bills. The address listed on the Form W-9 is where the NC

HOPE program sent the rental assistance funds for landlords.

THE SCHEME

15. At all relevant times, the defendant, SEAN TRACY DILLARD, resided

in Chowan County within the Eastern District of North Carolina.

Case 2:23-cr-00011-FL Document 1 Filed 05/31/23 Page 5 of 8
16. From in or about August, 2021, to December 29, 2021 , in the Eastern

District of North Carolina and elsewhere, defendant DILLARD devised a scheme and

artifice to defraud the NC HOPE program.

17. Defendant DILLARD signed approximately ten fraudulent applications

for rental assistance to the NC HOPE program, seeking a total approximate of

$64,860.

18. Defendant DILLARD falsely represented he was the landlord.

19. Defendant DILLARD fabricated names of individuals to list as tenants

on HOPE applications.

20. Defendant DILLARD submitted and caused to be submitted fraudulent

lease agreements, wherein Defendant DILLARD was listed as the landlord.

21. Defendant DILLARD provided rental property address on the

applications to obtain the NC HOPE rental assistance checks. The rental property

addresses provided were determined to be uninhabitable at the time.

22. Defendant DILLARD negotiated six NC HOPE program rental

assistance checks at banks and check cashing facilities.

THE CHARGE

23. Paragraphs one through 22 of this Criminal Information are hereby

realleged and incorporated by reference herein.

24. On or about August, 2021 and December 29, 2021, in the Eastern

District of North Carolina and elsewhere, defendant DILLARD, knowingly and

Case 2:23-cr-00011-FL Document 1 Filed 05/31/23 Page 6 of 8
willfully embezzled, stole, purloined, and converted to his own use , federal funds of

the United States, that is, NC HOPE program funds of the United States Department

of Treasury and United States Department of Housing and Urban Development, with

an aggregate value of more than $1,000, all in violation of Title 18, United States

Code, Section 641.

FORFEITURE NOTICE

Defendant SEAN TRACY DILLARD is hereby given notice that all of the

defendant's interest in all property specified herein is subject to forfeiture .

Upon conviction of the offense set forth in this Criminal Information,

defendant DILLARD shall forfeit to the United States, pursuant to Title 18, United

States Code, Section 981(a)(l)(C), as made applicable by Title 28, United States Code,

section 2461(c), any property, real or personal, which constitutes or is derived from

proceeds traceable to said offense.

The forfeitable property includes, but is not limited to, the following:

Forfeiture Money Judgment:

(a) A sum of money representing the gross proceeds traceable to the

commission of the offense personally obtained by the defendant in the amount of at

least $64,860.00.

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

defendant:

(1) cannot be located upon the exercise of due diligence ;

Case 2:23-cr-00011-FL Document 1 Filed 05/31/23 Page 7 of 8
(2) has been transferred or sold to, or deposited with, a third party;

(3) has been placed beyond the jurisdiction of the court;

(4) has been substantially diminished in value; or

(5) has been commingled with other property which cannot be divided without

difficulty,

it is the intent of the United States, pursuant to Title 21, United States Code, Section

853(p), to seek forfeiture of any other property of said defendant up to the value of

the forfeitable property described above.

MICHAEL F. EASLEY, JR
United States Attorney

BY:
E~~~E
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Assistant United States Attorney

Case 2:23-cr-00011-FL Document 1 Filed 05/31/23 Page 8 of 8

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