Information — United States v. Philip Frederick Camino, Central District of California (Document 1)

Summary

A criminal information in United States of America v. Philip Frederick Camino, No. 8:24-cr-00074-FWS, filed June 10, 2024 as Document 1 in the U.S. District Court for the Central District of California, Southern Division. It charges conspiracy to commit wire fraud under 18 U.S.C. § 1349, with criminal forfeiture under 18 U.S.C. § 982. The information alleges that from about April 2020 to April 2021 Camino, using California entities he controlled and Arizona entities controlled by co-conspirators, submitted over 20 fraudulent PPP and EIDL applications with inflated employee counts and fictitious tax forms, obtaining over $4 million. It alleges kickbacks of over $100,000 to a co-conspirator and, as an overt act, an email to Lender A supporting a $144,270 PPP application for Nucleon LLC. The signature block names United States Attorney E. Martin Estrada.

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       Case 8:24-cr-00074-FWS Document 1 Filed 06/10/24 Page 1 of 9 Page ID #:1


                                                               06/10/2024
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 8                        UNITED STATES DISTRICT COURT

 9                  FOR THE CENTRAL DISTRICT OF CALIFORNIA

10                               SOUTHERN DIVISION

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12   UNITED STATES OF AMERICA,             No.   8:24-cr-00074-FWS
13             Plaintiff,                  I N F O R M A T I O N

14                   v.                    [18 U.S.C. § 1349: Conspiracy to
                                           Commit Wire Fraud; 18 U.S.C.
15   PHILIP FREDERICK CAMINO,              § 982: Criminal Forfeiture]
16             Defendant.

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20        The United States Attorney charges:
21                              [18 U.S.C. § 1349]
22   A.   INTRODUCTORY ALLEGATIONS
23        At times relevant to this Information:
24        1.    Defendant PHILIP FREDERICK CAMINO was a Canadian
25   citizen legally residing in the Central District of California.
26        2.    Defendant CAMINO controlled 13050Sushi, LLC; Stout
27   Palm Springs, LLC; Stout Cupertino, LLC; Stout Bardstown, LLC;
28   Camino Industries, LLC; 1071 Glendon Partners; 672 LA, LLC; EB
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 1   Venice, LLC; and Stout Four, LLC, which were located within the

 2   Central District of California (collectively the “California

 3   Entities”).

 4        3.     Co-Conspirator-1 controlled Squabble, LLC; Healthy

 5   Body Solutions, LLC; and Healthy Lawn Solutions, LLC and Co-

 6   Conspirator-2 controlled Nucleon, LLC, which were all located in

 7   Arizona (collectively the “Arizona Entities”).

 8        THE PAYCHECK PROTECTION PROGRAM

 9        4.     The Coronavirus Aid, Relief, and Economic Security
10   (“CARES”) Act was a federal law enacted in or about March 2020
11   that was designed to provide emergency financial assistance to
12   Americans suffering economic harm as a result of the COVID-19
13   pandemic.    One form of assistance provided by the CARES Act was
14   the authorization of United States taxpayer funds in forgivable
15   loans to small businesses for job retention and certain other
16   expenses, through a program referred to as the Paycheck
17   Protection Program (“PPP”).     PPP loan proceeds were required to
18   be used by the business to pay certain permissible expenses:
19   payroll costs, interest on mortgages, rent, and utilities.
20        5.     To obtain a PPP loan, a qualifying business was
21   required to submit a PPP loan application signed by an
22   authorized representative of the business.        The PPP loan
23   application required the applicant business (through its
24   authorized representative) to acknowledge the program rules and
25   make certain affirmative certifications in order to be eligible
26   to obtain the PPP loan.     Such certifications required the
27   applicant to affirm that “[t]he [PPP loan] funds will be used to
28   retain workers and maintain payroll or make mortgage interest

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 1   payments, lease payments, and utility payments,” and that the

 2   “loan proceeds will be used only for business-related purposes

 3   as specified in the loan application” and consistent with the

 4   PPP rules.    The authorized representative of the applicant was

 5   also required to certify that “the information provided in this

 6   application and the information provided in all supporting

 7   documents and forms is true and accurate in material respects,”

 8   and “I understand that if the funds are knowingly used for

 9   unauthorized purposes, the federal government may hold me

10   legally liable, such as for charges of fraud.”

11           6.   In the PPP loan application, the applicant was

12   required to state, among other things, the business’s:

13   (a) average monthly payroll expenses and (b) number of

14   employees.    These figures were used to calculate the amount of

15   money the small business was eligible to receive under the PPP.

16   In addition, the applicant was required to provide documentation

17   showing its payroll expenses, including federal tax filings and

18   bank account records.

19           7.   A small business’s PPP loan application would be

20   received and processed by a participating lender approved by the

21   Small Business Administration (“SBA”).       If a PPP loan

22   application was approved, the participating lender would fund

23   the PPP loan using its own monies, which were guaranteed by the

24   SBA.

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 1        THE ECONOMIC INJURY DISASTER LOAN PROGRAM

 2        8.      The Economic Injury Disaster Loan Program (“EIDL”) was
 3   a United States Small Business Administration (“SBA”) program
 4   that provided low-interest financing to small businesses,
 5   renters, and homeowners in regions affected by declared
 6   disasters.
 7        9.      The CARES Act authorized the SBA to provide EIDL loans
 8   of up to $2 million to eligible small businesses experiencing
 9   substantial financial disruption due to the COVID-19 pandemic.
10        10.     To obtain an EIDL loan, a qualifying business was
11   required to submit an application to the SBA and provide
12   information about the business’s operations, such as the number
13   of employees, gross revenues for the 12-month period preceding
14   the disaster, and cost of goods sold in the 12-month period
15   preceding the disaster.     In the case of EIDL loans for COVID-19
16   relief, the 12-month period was the 12-month period from January
17   31, 2019, to January 31, 2020.      The applicant was also required
18   to certify that all of the information in the application was
19   true and correct to the best of the applicant’s knowledge.
20        11.     EIDL loan applications were submitted directly to the
21   SBA and processed by the agency with support from a government
22   contractor.    The amount of the loan, if the application was
23   approved, was determined based, in part, on the information
24   provided by the applicant about employment, revenue, and cost of
25   goods sold.    Any funds issued under an EIDL loan were issued
26   directly by the SBA.
27        12.     EIDL loan funds could be used for payroll expenses,
28   sick leave, production costs, and business obligations, such as

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 1   debts, rent, and mortgage payments. If the applicant also

 2   obtained a loan under the PPP, the EIDL loan funds could not be

 3   used for the same purpose as the PPP loan funds.

 4        REVELANT LENDING INSTITUTION

 5        13.   Lender A is an approved SBA lender of PPP loans and
 6   located in Laguna Hills, California, within the Central District
 7   of California.
 8   B.   THE OBJECT OF THE CONSPIRACY
 9        14.   Beginning no later than in or around April 2020 and
10   continuing until at least in or around April 2021, in Orange
11   County, within the Central District of California, and
12   elsewhere, defendant CAMINO, Co-Conspirator-1, and Co-
13   Conspirator-2 conspired with one another and with others known
14   and unknown to the United States Attorney to commit wire fraud,
15   in violation of Title 18, United States Code, Section 1343, in
16   connection with a fraudulent PPP and EIDL loan scheme.
17   C.   THE MANNER AND MEANS OF THE CONSPIRACY
18        15.   The object of the conspiracy was to be carried out,
19   and was carried out, in substance, as follows:
20              a.    Defendant CAMINO, using the California Entities
21   and the Arizona Entities, submitted, and caused to be submitted,
22   false and fraudulent applications to the SBA and lending
23   institutions for PPP and EIDL loans (collectively the “PPP and
24   EIDL Applications”).
25              b.    In the PPP and EIDL Applications, defendant
26   CAMINO made, and caused to be made, false and fictitious
27   statements and provided falsified documents to the SBA and the
28   lending institutions, including inflating the number of

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 1   employees to whom were paid wages, providing fictitious federal

 2   tax forms that were never filed with the Internal Revenue

 3   Service, and falsely certifying that the loan proceeds would be

 4   used for permissible business purposes.

 5              c.   Defendant CAMINO electronically submitted, and

 6   caused to be submitted, the fictitious statements and falsified

 7   documents to the SBA and the lending institutions in support of

 8   the fraudulent PPP and EIDL Applications through interstate

 9   wires.

10              d.   In reliance on defendant CAMINO’s material false

11   and fraudulent statements and concealment of material facts in

12   the PPP and EIDL Applications, the SBA and lending institutions

13   approved and funded the PPP and EIDL loans, and thereafter

14   transferred the loan proceeds into bank accounts that defendant

15   CAMINO controlled.

16              e.   Defendant CAMINO used a majority of the

17   fraudulently obtained PPP and EDIL loan proceeds for expenses

18   prohibited under the requirements of the PPP and EIDL programs.

19              f.   In return for use of the Arizona Entities in the

20   PPP and EIDL Applications, defendant CAMINO paid Co-Conspirator-

21   1 kickback payments using the PPP and EIDL loan proceeds.

22        16.   As a result of the conspiracy above, defendant CAMINO

23   submitted over 20 fraudulent PPP and EIDL Applications from

24   which defendant CAMINO fraudulently obtained over $4 million in

25   PPP and EIDL loan proceeds from the SBA and lending

26   institutions.   Using those proceeds, defendant CAMINO paid Co-

27   Conspirator-1 over $100,000 for his role in the scheme.

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 1   B.   OVERT ACT

 2        17.   In furtherance of the conspiracy and to accomplish its
 3   object, defendant CAMINO committed the following overt act
 4   within the Central District of California: On or about June 23,
 5   2020, defendant CAMINO sent an email to Lender A containing
 6   false documentation to support a $144,270 fraudulent PPP loan
 7   application on behalf of Nucleon LLC, a company controlled by
 8   Co-Conspirator-2.
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      Case 8:24-cr-00074-FWS Document 1 Filed 06/10/24 Page 8 of 9 Page ID #:8



 1                           FORFEITURE ALLEGATION

 2                              [18 U.S.C. § 982]

 3        1.   Pursuant to Rule 32.2(a) of the Federal Rules of

 4   Criminal Procedure, notice is hereby given that the United

 5   States of America will seek forfeiture as part of any sentence,

 6   pursuant to Title 18, United States Code, Section 982(a)(2), in

 7   the event of the defendant’s conviction of the offense set forth

 8   in this Information.

 9        2.   The defendant, if so convicted, shall forfeit to the

10   United States of America the following:

11             (a) All right, title and interest in any and all

12   property, real or personal, constituting, or derived from, any

13   proceeds obtained, directly or indirectly, as a result of the

14   offense; and

15             (b) To the extent such property is not available for

16   forfeiture, a sum of money equal to the total value of the

17   property described in subparagraph (a).

18        3.   Pursuant to Title 21, United States Code, Section

19   853(p), as incorporated by Title 18, United States Code, Section

20   982(b), the defendant, if so convicted, shall forfeit substitute

21   property, up to the total value of the property described in the

22   preceding paragraph if, as the result of any act or omission of

23   the defendant, the property described in the preceding

24   paragraph, or any portion thereof: (a) cannot be located upon

25   the exercise of due diligence; (b) has been transferred, sold to

26   or deposited with a third party; (c) has been placed beyond the

27   jurisdiction of the court; (d) has been substantially diminished

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 1   in value; or (e) has been commingled with other property that

 2   cannot be divided without difficulty.

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 4                                  E. MARTIN ESTRADA
                                    United States Attorney
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 7                                  MACK E. JENKINS
                                    Assistant United States Attorney
 8                                  Chief, Criminal Division

 9                                  ANNE C. GANNON
                                    Assistant United States Attorney
10                                  Chief, Santa Ana Branch Office

11                                  JENNIFER L. WAIER
                                    Assistant United States Attorney
12                                  Deputy Chief, Santa Ana Branch Office

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