Information — United States v. Derek James Acree (Dkt. 1, S.D. Fla.)

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An Information filed by the United States Attorney in United States v. Derek James Acree, Case No. 22-80157-Cr-Singhal/McCabe, in the U.S. District Court for the Southern District of Florida, entered on the docket 09/27/2022 as Document 1. Count 1 charges conspiracy to commit wire fraud under 18 U.S.C. § 1349. It alleges that the defendant, Chief Operating Officer of National Financial Holdings Inc., and co-conspirator 1 sought approximately $509,900 in EIDL funds and PPP loans of approximately $376,300, $376,400 and $349,955 for National Financial Holdings Inc., NFH Florida LLC and National Financial Holdings Technology LLC, with false employee and payroll or revenue figures. It alleges they received approximately $1,612,555 in EIDL and PPP loan funds. Forfeiture allegations seek a money judgment of approximately $869,682.83.

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Case 9:22-cr-80157-AHS Document 1 Entered on FLSD Docket 09/27/2022 Page 1 of 11

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

22-80157-Cr-Singhal/McCabe

18 U.S.C. § 1349
18 U.S.C. § 981(a)(1)(C)

Case No.

UNITED STATES OF AMERICA

FILED BY. IM D.C,

vs.
DEREK JAMES ACREE, Sep 27, 2022
Defendant. CLERK U. S ONS CT.
/ §&. DB. OF FLA. - West Palm Beach
INFORMATION

The United States Attorney charges that:

GENERAL ALLEGATIONS

At all times relevant to this Information:

The Economic Injury Disaster Loan Program

1. 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
Americans suffering economic harm from the COVID-19 pandemic.

2. The Economic Injury Disaster Loan (“EIDL”) program was a U.S. Small Business
Administration (SBA) program that existed before the COVID-19 pandemic to provide low-
interest financing to small business, renters, and homeowners in regions affected by declared
disasters.

3. The CARES Act authorized the SBA to provide EIDLs to eligible small businesses
experiencing substantial financial disruptions due to the COVID-19 pandemic. In order to obtain

a COVID-19 EIDL, a qualifying business was required to submit an EIDL application to the SBA
Case 9:22-cr-80157-AHS Document 1 Entered on FLSD Docket 09/27/2022 Page 2 of 11

and provide information about its operations, such as the number of employees, gross revenues,
and the cost of goods sold for the 12-month period preceding January 31, 2020. The applicant was
also required to certify that all of the information in the application was true and correct to the best
of the applicant's knowledge. In addition, the CARES Act authorized the SBA to issue advances
of up to $10,000 to small businesses within three days of applying for an EIDL. The amount of the
advance was determined by the number of employees the applicant certified having. The advances
did not have to be repaid.

4. All EIDL applications were submitted online. All applications submitted on July
11, 2020 or after were handled by an SBA contractor with servers located in Des Moines, Iowa.
Prior to July 11, 2020, EIDL applications were submitted through three different servers, located
in Boydton, VA, West Des Moines, IA, or Quincy, WA.

5. EIDL applications were submitted directly to the SBA and processed by the SBA
with support from a government contractor. The amount of the loan was determined based, in part,
on the information provided in the application concerning the number of employees, gross
revenues, and cost of goods sold. Any EIDL funds were issued directly by the SBA.

The Paycheck Protection Program

6. Another source of relief provided through the CARES Act was the authorization of
forgivable loans to businesses for job retention and certain other expenses, through a program
called the Paycheck Protection Program (“PPP”).

7. The PPP allowed qualifying small businesses and other organizations to receive
PPP loans. Businesses were required to use PPP loan proceeds on 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 spent the loan proceeds on these expense items within a designated

period of time and used a certain percentage of the PPP loan proceeds on payroll expenses.

2
Case 9:22-cr-80157-AHS Document 1 Entered on FLSD Docket 09/27/2022 Page 3 of 11

8. The amount of a PPP loan that a small business was entitled to receive was
determined by the number of employees employed by the business and the business’s average
monthly payroll costs.

9. To obtain a PPP loan, a qualifying business was required to submit a PPP loan
application which was signed by an authorized representative of the business. The PPP loan
application required the business (through its authorized representative) to acknowledge the
program rules and make certain affirmative certifications to be eligible to obtain the PPP loan. In
the PPP loan application, the small business (through its authorized representative) was required
to state, among other things, its average monthly payroll expenses and number of employees.
These figures were used to calculate the amount of money the small business was eligible to
receive under the PPP. In addition, businesses applying for a PPP loan were required to provide
documentation confirming their payroll expenses.

10. A PPP loan application was processed by a participating lender. If a PPP loan
application was approved, the participating lender funded the PPP loan using its own funds. While
a participating lender issued the PPP loan, the loan was 100% guaranteed by the United States
Small Business Administration, an executive branch agency of the United States government.

The Defendant and Relevant Entities

11. DEREK JAMES ACREE was a resident of Palm Beach Gardens, Florida.

12. NATIONAL FINANCIAL HOLDINGS INC., formerly National Financial
Holdings LLC, was a Delaware corporation with a registered address in Wilmington, Delaware
and a principal address in Palm Beach Gardens, Florida. DEREK JAMES ACREE was the Chief
Operating Officer of NATIONAL FINANCIAL HOLDINGS INC.

13. © NFH FLORIDA LLC (“NFH FLORIDA”) was a Delaware limited liability

company with a registered address in Wilmington, Delaware.

3
Case 9:22-cr-80157-AHS Document 1 Entered on FLSD Docket 09/27/2022 Page 4 of 11

14. © NATIONAL FINANCIAL HOLDINGS TECHNOLOGY LLC, was a Delaware
limited liability company with a registered address in Wilmington, Delaware. DEREK JAMES
ACREE was the Chief Operating Officer of NATIONAL FINANCIAL HOLDINGS
TECHNOLOGY LLC.

Relevant Financial Institutions

15. First Home Bank (‘First Home”) was a federally insured financial institution
headquartered in Saint Petersburg, Florida.

16. Silicon Valley Bank (“SVB”) was a federally insured financial institution
headquartered in Santa Clara, California.

17. Truist Bank (“Truist”) was a federally insured financial institution headquartered
in Charlotte, North Carolina.

18. Flagler Bank (“‘Flagler’’) was a federally insured financial institution headquartered
in West Palm Beach, Florida.

COUNT 1

Conspiracy to Commit Wire Fraud
18 U.S.C. § 1349

1. The General Allegations section of this Indictment is re-alleged and incorporated
by reference as though fully set forth herein.

2. From in or around March 2020, and continuing through in or around August 2020,
the exact dates being unknown, in Palm Beach County, in the Southern District of Florida, and
elsewhere, the defendant,

DEREK JAMES ACREE,
did willfully, that is, with the intent to further the object of the conspiracy, and knowingly combine,
conspire, confederate, and agree with co-conspirator 1 to commit an offense against the United

States, that is, to knowingly devise and intend to devise a scheme and artifice to defraud and for

4
Case 9:22-cr-80157-AHS Document 1 Entered on FLSD Docket 09/27/2022 Page 5of11

obtaining money and property by means of false and fraudulent pretenses, representations, and
promises and to transmit and cause to be transmitted by means of wire communication in interstate
commerce writings, signs, signals, and pictures for the purpose of executing such scheme and
artifice, in violation of Title 18, United States Code, Section 1343.

Purpose of the Conspiracy

3. It was the purpose of the conspiracy for the conspirators to unlawfully enrich
themselves and others by, among other things, submitting and causing the submission of false and
fraudulent applications for EIDL and PPP loans and diverting the proceeds of those loans for the
personal use and benefit of the Defendant and known and unknown conspirators and to further the
conspiracy.

Manner and Means of the Conspiracy

The manner and means by which the defendant and his conspirators sought to accomplish
the object and purpose of the conspiracy included, among others, the following:

4. DEREK JAMES ACREE and co-conspirator 1 submitted and caused to be
submitted an EIDL application on behalf NATIONAL FINANCIAL HOLDINGS INC. This
application sought approximately $509,900 in EIDL funds. The application was approved and
funded by SBA.

5. DEREK JAMES ACREE submitted and caused to be submitted a PPP loan
application on behalf NATIONAL FINANCIAL HOLDINGS INC. This application sought
approximately $376,300 in PPP funds. The application was approved and funded by First Home
Bank.

6. DEREK JAMES ACREE submitted and caused to be submitted a PPP loan
application on behalf of NFH FLORIDA LLC. This application sought approximately $376,400

in PPP funds. The application was approved and funded by Truist Bank, formerly BB&T.

5
Case 9:22-cr-80157-AHS Document 1 Entered on FLSD Docket 09/27/2022 Page 6 of 11

7. DEREK JAMES ACREE submitted and caused to be submitted a PPP loan
application on behalf of NATIONAL FINANCIAL HOLDINGS TECHNOLOGY LLC. This
application sought approximately $349,955 in PPP funds. The application was approved and
funded by Flagler Bank.

8. Each application included false statements about the number of employees and the
average monthly payroll or gross revenue.

9. DEREK JAMES ACREE and co-conspirator 1 received approximately
$1,612,555 in EIDL and PPP loan funds as a result of the false and fraudulent EIDL and PPP loan
applications.

10... DEREK JAMES ACREE and co-conspirator 1 spent much of the loan proceeds
for their personal use and benefit, not for payroll costs, interest on mortgages, rent, or utilities.

All in violation of Title 18, United States Code, Section 1349.

FORFEITURE ALLEGATIONS

1. The allegations of this Indictment are hereby realleged and by this reference fully
incorporated herein for the purpose of alleging forfeiture to the United States of America of certain
property in which the defendant DEREK JAMES ACREE has an interest.

2. Upon conviction of a violation of Title 18, United States Code, Section 1349 as
alleged in this Information, the defendant, shall forfeit to the United States of America, any
property, real or personal, which constitutes or is derived from proceeds traceable to such offense
pursuant to Title 18, United States Code, Section 981(a)(1)(C).

3. The property subject to forfeiture includes, but is not limited to, a forfeiture money

judgment in the amount of approximately $869,682.83.
Case 9:22-cr-80157-AHS Document 1 Entered on FLSD Docket 09/27/2022 Page 7 of 11

5. If any of the property subject to forfeiture, 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 under the
provisions of Title 21, United States Code, Section 853(p).

All pursuant to Title 18, United States Code, Section 981(a)(1)(C) and the procedures set
forth in Title 21, United States Code, Section 853, as incorporated by Title 28, United States Code,

Section 2461(c).

Alexandra Chae for

JUAN ANTONIO GONZALEZ
UNITED STATES ATTORNEY

ROBIN W. WAUGH
ASSISTANT UNITED STATES ATTORNEY
Case 9:22-cr-80157-AHS pagqumensta FRCS IRIEPe heReEt 09/27/2022 Page 8 of 11
SOUTHERN DISTRICT OF FLORIDA

UNITED STATES OF AMERICA CASE NO.:
CERTIFICATE OF TRIAL ATTORNEY*
DEREK JAMES ACREE,
Defendant. Superseding Case Information:
/

Court Division (select one) New Defendant(s) (Yes or No)

O Miami [Key West DIFTP Number of New Defendants

OH FTL WPB Total number of New Counts
I “ > hereby certify that:

I have carefully considered the allegations of the indictment, the number of defendants, the number of probable
witnesses and the legal complexities of the Indictment/Information attached hereto.

2. Tam aware that the information supplied on this statement will be relied upon by the Judges of this Court in setting
their calendars and scheduling criminal trials under the mandate of the Speedy Trial Act, Title 28 U.S.C. §3161.

3. Interpreter: (Yes or No) No
List language and/or dialect:

4. This case will take 0 days for the parties to try.

5. Please check appropriate category and type of offense listed below:

(Check only one) (Check only one)
I Oto 5 days CO Petty

Il O 6to 10 days 0 Minor

Il [111 to 20 days [] Misdemeanor
IV (121 to 60 days Felony

V_ [161 days and over

6. Has this case been previously filed in this District Court? (Yes or No) No
If yes, Judge Case No.

7. Has acomplaint been filed in this matter? (Yes or No) No
If yes, Magistrate Case No.

8. Does this case relate to a previously filed matter in this District Court? (Yes or No) No
If yes, Judge Case No.

9. Defendant(s) in federal custody as of

10. Defendant(s) in state custody as of

11. Rule 20 from the District of

12. Is this a potential death penalty case? (Yes or No) No

13. Does this case originate from a matter pending in the Northern Region of the U.S. Attorney’s Office
prior to August 8, 2014 (Mag. Judge Shaniek Maynard? (Yes or No) No

14. Does this case originate from a matter pending in the Central Region of the U.S. Attorney’s Office
prior to October 3, 2019 (Mag. Judge Jared Strauss? (Yes or No)No

By: We » as

Robin Waugh ’
Assistant United States Attorney
FLA Bar No. 0537837
Case 9:22-cr-80157-AHS Document 1 Entered on FLSD Docket 09/27/2022 Page 9 of 11

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

PENALTY SHEET

Defendant's Name: DEREK JAMES ACREE

Case No:

Count #: 1

Wire Fraud Conspiracy

Title 18, United States Code, Section 1349

* Max. Term of Imprisonment: 20 years' imprisonment

* Mandatory Min. Term of Imprisonment (if applicable):

* Max. Supervised Release: 3 years' supervised release

* Max. Fine: $250,000 fine or twice the gross loss or gross gain, which could be as much of
$2,525,200; and $100 special assessment; plus restitution

*

Count #:

* Max. Term of Imprisonment:

* Mandatory Min. Term of Imprisonment (if applicable):
* Max. Supervised Release:

* Max. Fine:

Count #:

* Max. Term of Imprisonment:

* Mandatory Min. Term of Imprisonment (if applicable):
* Max. Supervised Release:

* Max. Fine:

*Refers only to possible term of incarceration, supervised release and fines. It does not include
restitution, special assessments, parole terms, or forfeitures that may be applicable.
Case 9:22-cr-80157-AHS Document 1 Entered on FLSD Docket 09/27/2022 Page 10 of 11

AO 455 (Rev. 01/09) Waiver of an Indictment

UNITED STATES DISTRICT COURT

for the
Southern District of Florida

United States of America
Vv. Case No.

Derek Acree

Defendant

WAIVER OF AN INDICTMENT

I understand that I have been accused of one or more offenses punishable by imprisonment for more than one
year. I was advised in open court of my rights and the nature of the proposed charges against me.

After receiving this advice, I waive my right to prosecution by indictment and consent to prosecution by
information.

Date:

Defendant's signature

Signature of defendant’s attorney

David Roth, Esquire

Printed name of defendant’s attorney

Judge’s signature

Judge’s printed name and title
Case 9:22-cr-80157-AHS Document 1 Entered on FLSD Docket 09/27/2022 Page 11 of 11

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NUMBER:
BOND RECOMMENDATION

DEFENDANT: DEREK JAMES ACREE

$200,000 Personal Surety Bond
(Personal Surety) (Corporate Surety) (Cash) (Pre-Trial Detention)

Last Known Address:

What Facility:

Agent(s): SA Michelle McDaniel, FBI
(FBI) (SECRET SERVICE) (DEA) (IRS) (ICE) (OTHER)


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