Information — United States v. Nicoletta (Dkt. 24, M.D. Fla.)

Summary

An information filed January 12, 2021 as Document 24 in United States v. Keith Nicoletta, Case 8:21-cr-00006-MSS-AAS, in the U.S. District Court for the Middle District of Florida, Tampa Division, charging conspiracy to commit money laundering under 18 U.S.C. § 1956(h) in COUNT ONE. It states the defendant established West Coast Cores, LLC, a scrap metal business that reported no payroll or wages for 2019 and 2020. The United States Attorney charges that from about June 2020 through at least October 2020 a false PPP application for the company caused the SBA to issue approximately $1,903,157, which the defendant moved into accounts at several credit unions and used for purposes including a 2020 Mercedes-Benz S560 and a 2020 Ford Super Duty F-250 Platinum Edition. Forfeiture is sought of approximately $1,903,157, the vehicles, a Rolex watch, seized funds and real property.

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Case 8:21-cr-O0O006-MSS-AAS Document 24 _ Filed 01/12/21 Page 1 of 10 PagelD 48

PILED
UNITED STATES DISTRICT COURT mob tan
MIDDLE DISTRICT OF FLORIDA Pere Fe Pi br 93

TAMPA DIVISION a

UNITED STATES OF AMERICA

v. CASE NO. 8: 21 © © Vas 4a8

18 U.S.C. § 1956(h)
KEITH NICOLETTA

INFORMATION
The United States Attorney charges:

COUNT ONE
(Conspiracy to Commit Money Laundering)

A. Introduction

At all times material to this Information:

The Defendant and his Business Operations

1. KEITH NICOLETTA resided in Dade City, Florida, which was
within the Middle District of Florida.

2. In or around 2016, NICOLETTA established a Florida
corporation known as West Coast Cores, LLC (“WCC”), listing himself as
WCC’s manager. In or around May 2020, WCC’s registered principal place of
business was NICOLETTA’s residence in Dade City, Florida.

3. NICOLETTA used WCC to trade in scrap metal. For 2019 and
2020, WCC did not report payroll or wages to federal or state agencies as it

had no employees. Instead, WCC operated like a sole proprietorship.
Case 8:21-cr-O0006-MSS-AAS Document 24 _ Filed 01/12/21 Page 2 of 10 PagelD 49

4. WCC maintained bank accounts at a credit union headquartered
in Lakeland, Florida (“Credit Union-1”). NICOLETTA was a signatory on
the WCC accounts and also maintained separate personal accounts at Credit
Union-1. NICOLETTA also maintained and/or opened new bank accounts at
other credit unions, referred to herein as Credit Union-2 and Credit Union-3.

The Paycheck Protection Program

5. 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. As part of this effort, the SBA enabled and
provided for loans through banks, credit unions, and other lenders. These
loans had government-backed guarantees.

6. In March 2020, the Coronavirus Aid, Relief, and Economic
Security Act, or the “CARES Act,” was enacted to provide immediate
assistance to individuals, families, and organizations affected by the COVID-
19 emergency. Among its various provisions, the CARES Act authorized the
SBA to guarantee loans under the Paycheck Protection Program (“PPP”), and

the full principal amount of the loans could qualify for forgiveness.
Case 8:21-cr-O0O006-MSS-AAS Document 24 Filed 01/12/21 Page 3 of 10 PagelD 50

7. Borrowers were required to use PPP loan proceeds only for
enumerated purposes, including payroll costs, rent and utilities, and mortgage
interest payments. Knowing misuse of PPP funds would subject borrowers to
additional liability, such as charges for fraud.

8. Under the PPP, the maximum loan amount was the lesser of $10
million or an amount calculated using a payroll-based formula specified in the
CARES Act. The payroll-based formula considered the borrower’s total
payroll costs from the preceding twelve months for all domestic employees.
Once an average monthly payroll cost was established, the borrower would
multiply that figure by 2.5 to arrive at a total maximum PPP loan amount.

9. To apply for a PPP loan, a potential borrower electronically
submitted an SBA Form 2483 with supporting payroll documentation to a
financial institution that would administer the loan and serve as custodian of
the funds. On the SBA Form 2483, an authorized representative of the
business was required to certify information regarding business operations.
Those certifications included that: (i) the applicant was in operation on
February 15, 2020 and had employees for whom it paid salaries and payroll
taxes or paid independent contractors, as reported on a Form 1099-MISC; (ii)
current economic uncertainty made the loan request necessary to support the

applicant’s ongoing operations; and (iii) the PPP funds would be used to retain
Case 8:21-cr-00006-MSS-AAS Document 24 Filed 01/12/21 Page 4 of 10 PagelD 51

workers and to maintain payroll or pay other qualifying expenses.

10. Further, when submitting the SBA Form 2483, the authorized
representative certified his understanding that, should the PPP funds be
knowingly used for unauthorized purposes, the United States could hold him
legally liable, including for charges of fraud. The applicant was also required
to certify the truth and accuracy of any information provided on the SBA
Form 2483 and in all supporting documents, to include any documents
intended to verify the applicant’s payroll expenses. Such supporting
documents could include payroll processor records, bank records, wage
records, payroll tax filings with the Internal Revenue Service, or other records
sufficient to demonstrate the qualifying payroll amount.

11. Finally, the applicant was required to certify the following
warning regarding false statements and other criminal penalties:

I understand that knowingly making a false statement to obtain a
guaranteed loan from SBA is punishable under the law, including under
18 U.S.C. §§ 1001 and 3571 by imprisonment of not more than five
years and/or a fine of up to $250,000; under 15 U.S.C. § 645 by
imprisonment of not more than two years and/or a fine of not more
than $5,000; and, if submitted to a federally insured institution, under
18 U.S.C. § 1014 by imprisonment of not more than thirty years and/or
a fine of not more than $1,000,000.

12. PPP loan applications would then be processed by participating
lenders. If a PPP loan application was approved, the participating lender

funded the PPP loan using its own monies, which were 100% guaranteed by
Case 8:21-cr-O0006-MSS-AAS Document 24 Filed 01/12/21 Page 5 of 10 PagelD 52

the SBA. Data from the application, including information from 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 PPP Lender C.B. and Its Processor B.V.

13. C.B., which was located in Utah, was a financial institution, as
defined in 18 U.S.C. § 20, insured by the Federal Deposit Insurance
Corporation. C.B. participated in the SBA’s PPP as a lender and, as such, was
authorized to lend funds to eligible borrowers under the terms of PPP.

14. __B.V. was a California fintech company that provided online
business banking and financing solutions to small- and medium-sized
businesses. B.V. (the “Processor’”’) processed and serviced SBA-guaranteed
PPP loans, including for C.B. (hereinafter, the “Lender’’).

B. The Conspiracy

15. Beginning in or about June 2020, and continuing through at least
in or around October 2020, in the Middle District of Florida and elsewhere,
the defendant,

KEITH NICOLETTA
did knowingly combine, conspire, confederate, and agree with others, both
known and unknown to the United States Attorney, to commit money

laundering, to wit, knowing that the property involved in a financial
Case 8:21-cr-O0O006-MSS-AAS Document 24 _ Filed 01/12/21 Page 6 of 10 PagelD 53

transaction represented the proceeds of some form of unlawful activity, did
conduct, and attempt to conduct, a financial transaction which, in fact
involved the proceeds of specified unlawful activity, that is, bank fraud, in
violation of 18 U.S.C. § 1344, knowing that the transaction was designed in
whole or in part to conceal and disguise the nature, location, source,
ownership, and control of the proceeds of specified unlawful activity, in
violation of 18 U.S.C. § 1956(a)(1)(B)().

C. Manner and Means of the Conspiracy

16. |The manner and means by which the defendant sought to
accomplish the object of the conspiracy included, among others, the following:

a. It was part of the conspiracy that the conspirators would and did
submit and cause the submission of a false and fraudulent PPP loan
application to the Lender (through the Processor) on behalf of WCC seeking a
PPP loan from the SBA.

b. It was further part of the conspiracy that the conspirators would
and did falsely and fraudulently certify that the PPP funds acquired from the
requested loan would be used to pay for “Payroll,” “Lease/Mortgage
Interest,” and “Utilities.”

c. It was further part of the conspiracy that the conspirators’

materially false, fraudulent, and misleading representations would and did
Case 8:21-cr-O0006-MSS-AAS Document 24 _ Filed 01/12/21 Page 7 of 10 PagelD 54

cause the SBA to approve the PPP application and the SBA to issue
approximately $1,903,157 in PPP funds to the Lender, which the Lender then
deposited into a WCC business bank account (“Account -3127”) under the
defendant’s control at Credit Union-1.

d. It was further part of conspiracy that the defendant would and
did open new bank accounts at Credit Union-2 and Credit Union-3.

e. It was further part of the conspiracy that, to conceal and disguise
the nature, source, ownership, and control of the fraudulently-obtained loan
proceeds, the defendant would and did transfer the PPP funds from Account
-3127 into other personal and business bank accounts that he controlled at
Credit Union-1, Credit Union-2, and Credit Union-3.

f. It was further a part of the conspiracy that the defendant would
and did deliver fraud proceeds to another conspirator in cash;

g. It was further a part of the conspiracy that the defendant would
and did transfer fraud proceeds to other conspirators by interstate wire
transmission;

h. It was further part of the conspiracy that the conspirators would
and did use the PPP funds to be used for unauthorized purposes and/or for
their own personal enrichment, including the defendant’s purchase of a 2020

Mercedes-Benz S560 and a 2020 Ford Super Duty F-250 Platinum Edition.
Case 8:21-cr-O0O006-MSS-AAS Document 24 _ Filed 01/12/21 Page 8 of 10 PagelD 55

i. It was further part of the conspiracy that the conspirators would
and did misrepresent, hide, and conceal, and cause to be misrepresented,
hidden, and concealed, the purpose of acts performed in furtherance of the
scheme to defraud.

All in violation of 18 U.S.C. § 1956(h).

FORFEITURE
1. The allegations contained in Count One are incorporated by
reference for the purpose of alleging forfeiture pursuant to 18 U.S.C. §
982(a)(1).
2. Upon conviction of a violation of 18 U.S.C. § 1956(h), the
defendant,
KEITH NICOLETTA,
shall forfeit to the United States, pursuant to 18 U.S.C. § 982(a)(1), any
property, real or personal, involved in such offense, or any property traceable
to such property.
3. The property to be forfeited includes, but is not limited to, the
following:
a. an order of forfeiture in the amount of approximately
$1,903,157, which represents the amount of proceeds

involved in the offense;
Case 8:21-cr-O0006-MSS-AAS Document 24 _ Filed 01/12/21 Page 9 of 10 PagelD 56

b. a 2020 Mercedes-Benz S560, Vehicle Identification
Number W1KUG8DB8LA529322;

Cc. a 2020 Ford Super Duty F-250 Platinum Edition, Vehicle
Identification Number 1FT7W2BT9LED45745;

d. a Rolex watch purchased by the defendant in or about July
2020 from Mayors Jewelers;.

e. Approximately $40,335.00 in U.S. Currency seized from
11248 Mansker Road, Dade City, Florida on or about
October 20, 2020;

f. Approximately $96,139.32 seized from San Antonio
Federal Credit Union account number 59274-000, held in
the name of Keith W. Nicoletta;

g. the real property, including all improvements thereon and
appurtenances thereto, located at 11248 and 11304
Mansker Road, Dade City, Florida 33525, being the same
premises conveyed to Keith Nicoletta by virtue of the deed
recorded on August 12, 2019, Instrument Number
201935559, in Pasco County, Official Records, Book 9954,
Pages 508 through 514;

Parcel ID: 09-25-21-0000-05600-0000;
Parcel ID: 09-25-21-0000-05600-0010; and
Case 8:21-cr-O0006-MSS-AAS Document 24 Filed 01/12/21 Page 10 of 10 PagelD 57

Parcel ID: 09-25-21-0000-05600-0020.
4, 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 shall be entitled to forfeiture of substitute property under the

provisions of 21 U.S.C § 853(p), as incorporated by 18 U.S.C § 982(b)(1).

MARIA CHAPA LOPEZ
United States Attorney

Kristen A. Fiore
. Assistant United States Attorney

ay G. Trezevant
Assistant United States Attorney
Chief, Economic Crimes Section

10


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