Information — United States v. Latoya Stanley and Johnny Philus, Southern District of Florida (Document 26)
Summary
An Information entered on the docket February 3, 2021 as Document 26 in United States of America v. Latoya Stanley and Johnny Philus, Case No. 1:21-cr-20067-MGC, in the U.S. District Court for the Southern District of Florida. The United States Attorney charges one count of conspiracy to commit wire fraud under 18 U.S.C. § 371, in 2020, with forfeiture under 18 U.S.C. § 982(a)(2)(A). It alleges false statements about employees and payroll in PPP applications for Elegance Auto Boutique, LLC and Dream Gurl Beauty Supply, LLC, with approximately $538,325 and approximately $302,860 in PPP funds alleged disbursed, and false EIDL applications. The filing includes a penalty sheet and Waiver of an Indictment forms.
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“Information — United States v. Latoya Stanley and Johnny Philus, Southern District of Florida (Document 26).”
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Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 1 of JA
13
Feb 3, 2021
UN IT ED STA TES D ISTR IC T C O URT
SO UTH ERN D ISTR ICT O F FLO R ID A
21-20067-CR-COOKE/O'SULLIVAN
C A SE N O .
18 U.S.C.j371
18 U.S.C.j982(a)(2)(A)
UN ITED STA TES O F A M ER ICA
5r:.
LA TO Y A STA NL EY and
JO H N NY PH ILU S,
D efendants.
/
IN FO R M AT IO N
The United States Attorney chargesthat:
G EN ER AL AL LEG AT IO N S
Atalltim es m aterialto this lnform ation:
Overview ofthe Paycheck Protection Prozram (diPPP'')
ln or around M arch 2020.the Coronavirus A id,Relief,and Econom ic Security
(''CARES'') Act was enacted to provide emergency tinancial assistance to the millions of
A m ericans who w ere suffering the econom ic effects caused by the CO V ID-19 pandem ic. One
source of relief provided by the CARES Act was the authorization of up to $349 billion in
forgivableloanstosmallbusinessesforjobretentionandcertainotherexpenses,throughthePPP.
ln oraround April2020,Congressauthorized over$300 billion in additionalPPP funding.
In order to obtain a PPP loan,a qualif-
ying business was required to subm ita PPP
loan application,w hich wassigned by an authorized representative ofthe business. The PPP loan
application required the business (through its authorized representative)to acknowledge the
program rules and m ake certain affirm ative certiticationsin orderto be eligible to obtain the PPP
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 2 of 13
loan. lnthePPP loan application,thesmallbusiness(through itsauthorized representative)was
requiredtostate,amongotherthings,its:(a)averagemonthly payrollexpenses'
,and (b)number
ofem ployees. These tigures w ere used to calculate the am ountofm oney the sm allbusinessw as
eligible to receive under the PPP. ln addition,businesses applying for a PPP loan were required
to provide docum entation to the lending institution show ing their payroll expenses'
, typically,
businesses would supply docum ents show ing the am ountofpayrolltaxes reported to the Internal
RevenueService(i-lRS'').
A PPP loan application w asrequired to be processed by a participating lender. lfa
PPP loan application wasapproved,the participating lenderfunded the PPP loan using itsown
monies,whichwere 100% guaranteedbytheSmallBusinessAdministration(''SBA'').Datafrom
the application,including infonnation aboutthe borrower,the totalam ountof the loan,and the
listed num berofem ployees,w ere transm itted by the lenderto the SBA in the course ofprocessing
the loan.
PPP loan proceedsw ere required to be used by the business on certain pennissible
expenses payrollcosts,intereston m ortgages,rent,and utilities. The PPP allow ed the interest
and principalon the PPP loan to be entirely forgiven if the business spent the loan proceeds on
these expense item s w ithin a designated period of tim e after receiving the proceeds and used a
certain am ountofthe PPP loan proceeds on payrollexpenses.
Overview ofthe Econom icIniurv DisasterLoan (ûiEIDL'')Prozram
The EID L program w as an SBA program thatprovided low -interesttinancing to
sm allbusinesses,renters,and hom eow ners in regionsaffected by declared disasters.
6. The CARES Actalso authorized the SBA to provide EIDLSofup to $2 m illion to
eligible sm all businesses experiencing substantial financial disruption due to the COV lD-l9
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 3 of 13
pandemic.ln addition,the CARES Actauthorized theSBA to issue advancesofup to $10,000 to
sm all businesses w ithin three days of applying for an EID L.The am ount of the advance w as
determ ined by the num ber of em ployees the applicantcertitied as having.The advances did not
have to be repaid.
ln order to obtain an EID L and advance, a qualifying business w as required to
subm itan application to the SBA and provide inform ation aboutitsoperations,such asthe num ber
ofem ployees,gross revenues for the lz-m onth period preceding the disaster,and costof goods
sold in the lz-m onth period preceding the disaster. ln the case ofEID LS for COV lD -19 relief,the
lz-m onth period w as thatpreceding January 31,2020. The applicantwas also required to certify
that a1lof the inform ation in the application was true and correct to the best ofthe applicant's
know ledge.
EID L applicationsw ere subm itted directly to the SBA . The am ountofthe loan,if
the application w as approved,w asdeterm ined based,in part,on the inform ation provided by the
applicantaboutem ploym ent,revenue,and cost ofgoods,as described above. A ny funds issued
underan EID L oradvance w ere issued directly by the SBA . EID L fundscould be used forpayroll
expenses,sick leave,production costs,and businessobligations,such as debts,rent,and m ortgage
paym ents. lfthe applicantalso obtained a loan underthe PPP,the EID L funds could notbe used
forthe sam e purpose as the PPP funds.
T he Defendants and R elevantEntities
9. LATO YA STAN LEY wasa residentofM iam i-D ade County,Florida.
10. JO H N N Y PH ILU S w as a residentofM iam i-Dade County,Florida.
LATO Y A STA NL EY and JO H NN Y PH IL US lived togetherand w ere rom antic
partners.
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 4 of 13
12. Dream GurlBeauty Supply,LLC (hereinafter,-èDream Gur1'-) was a Florida
corporation thatw as first registered w ith the Secretary of State of Florida in 20ll. LA TO Y A
STANLEY andJOHNNY PHILUS wereboth listed asChiefExecutive Ofticers(iiCEOs'')of
the com pany. Dream Gurlw as in inactive status untilitfiled for reinstatem enton or aboutM ay
3,2020.
Elegance Auto Boutique, LLC (hereinafter, 'ûElegance Auto'') was a Florida
corporation thatw as tirst registered w ith the Secretary of State of Florida in 2011. JO H NN Y
PH ILUS w asthe listed CEO . Elegance A uto w as in inactive status untilitfiled forreinstatem ent
on oraboutM ay l,2020.
Bank 1 w as a federally insured nationalbank based in Utah.
Bank 2 wasa federally insured nationalbank based in N ol'
th Carolina w ith branches
nationw ide.
l6. Bank l and Bank 2 w ere SBA -approved lenders and participated in the PPP as
lenders to sm allbusinesses.
Com pany 1 participated in the PPP as a non-bank lender as w ellas an entity that
connected applicantsw ith otherlenders. Sm allbusinessesseeking PPP loanscould apply through
Com pany lforPPP loans.Com pany 1subsequently partnered w ith variousbanks,including Bank
l,to disburse the loans.
CO N SPIR ACY TO C O M M IT W IR E FR A UD
(18U.S.C.j371)
From in or around M ay 2020,through in or around A ugust2020,in M iam i-Dade C ounty,
in the Southern D istrictofFlorida,and elsew here,the defendants,
JO H NN Y PH ILU S and
LA TO Y A ST AN LEY ,
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 5 of 13
didwillfully,thatis,withtheintenttofurthertheobjectoftheconspiracy,andknowinglycombine,
conspire,cont-
ederate,and agree w ith each other,and w ith others known and unknow n to the
U nited States Attorney,to com m itcertain offensesagainstthe U nited States,nam ely,w ire fraud,
thatis,to know ingly,and w ith the intentto defraud,devise,and intend to devise,a schem e and
artifice to defraud,and to obtain m oney and property by m eans ofm aterially false and fraudulent
pretenses, representations, and prom ises, know ing that the pretenses, representations, and
prom iseswere false and fraudulentw hen m ade,and,forthepurposeofexecuting such schem e and
artitice,did know ingly transm itand cause to be transm itted,by m eans ofw ire com m unication in
interstate and tbreign com m erce.certain w ritingsssigns.signals,pictures,and sounds,in violation
PURPQ NE O F THE CO NSPIM CY
lt w as a purpose of the conspiracy for the defendants and their conspirators to
unlawfully enrich themselvesby obtaining COVlD-19 disasterreliefrelated loan proceedsunder
false and fraudulent pretenses, including by m aking false statem ents about the num ber of
em ployees and payrollof businesses thatthe defendants controlled,in an effortto obtain funds
from the SBA and certified lendersparticipating in SBA program s.
M A NN ER AN D M EA N S O F TH E CO N SPIM CY
The m anner and m eans by w hich the defendants and their co-conspirators sought to
accomplishtheobjectandpurposeoftheconspiracyincluded,amongothers,thefollowing:
19. ln oraround M ay 2020,JO H N NY PH ILU S,LA TO Y A STA N LEY ,and theirco-
conspirators subm itted and caused the subm ission of online PPP applications, using interstate
wires,to Com pany 1, on behalf of Elegance A uto and D ream Gurl, in which PH ILU S and
STA NLEY falsely certified thata11representations in the applicationsw ere true.
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 6 of 13
20. In the respective PPP loan applications for Elegance A uto and D ream G url,
JO H N NY PH ILUS, LATO Y A STA N LEY ,and their conspirators m ade false and fraudulent
representationsregarding thenum berofem ployeesand payrollforthese businesses,and subm itted
false and fraudulentpurported tax recordsin suppol'tthereof. Forexam ple,in the PPP application
subm itted on behalf ofElegance Auto,PH ILU S claim ed to be the C EO and thatElegance Auto
had 29 employeeswith a monthly payrollof$215,330.In sim ilarfashion,in thePPP application
subm itted on behalfofD ream Gurl,STA N LEY claim ed to be the CEO and thatDream Gurlhad
18 employees with a monthly payroll of $121,144. Contrary to these representations, as
STA NLEY and PH ILU S then and there w ellknew ,neitherElegance A uto nor Dream Gurlhad
any em ployees orm onthly payrollatthattim e.
A s a result of their false and fraudulent loan applications,JO H N N Y PH ILUS,
LATO Y A STA NLEY , and their co-conspirators caused Bank l, a partner of Com pany 1,to
disburse hundredsofthousandsofdollarsin PPP fundsto STA NL EY and PH ILUS. Specitically,
approximately $538,325 in PPP funds were disbursed to PHILUS as a resultofthe false and
fraudulentPPP application forElegance Auto,and approxim ately $302,860 in PPP fundswere
disbursed to STA NLEY asa resultofthe false and fraudulentPPP application forDream Gurl.
JO H NN Y PH ILUS and LA TO Y A STA N LEY opened accounts at Bank 2 for
Elegance Auto and D ream G url,forthe purpose ofreceiving proceedsfrom the PPP fraud schem e.
23. A fter receiving the PPP loan funds,JO H N N Y PH ILUS,LAT O Y A STAN LEY ,
and theirco-conspiratorssoughtto launderthe proceedsby using athird-party payrollprocessor
to distribute the funds to individuals thatPH ILU S and STA N LEY claim ed w ere em ployees,but
who w ere,in fact,friends and fam ily m em bers.
In oraround June 2020,JO H N NY PH IL US,LA TO Y A ST AN LEY ,and theirco-
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 7 of 13
conspirators also submitted and caused the subm ission offalse and fraudulentapplications for
EID L loans. Specifically,PH ILUS subm itted and caused the subm ission ofan EID L application
in which PH ILU S falsely and fraudulently claim ed to be a farm erw ith ten em ployees,w hosefarm
produced an annualincome ofapproximately $400,262. STANLEY submitted and caused the
subm ission ofan EID L application in w hich STA N LEY falsely and t-raudulently claim ed to be a
farmerwith fiveem ployees,whosefarm produced an annualincome ofapproxim ately $899,000.
25. Based on the fraudulentrepresentations in the EID L loan applicationssubm itted by
JO H N NY PH ILUS, LA TO Y A STA N LEY ,and their co-conspirators,the SBA approved the
loansand soughttodisburseapproximately $150,000to PHILUS,and approxim ately $137,500to
STA NLEY .
O VE RT A C TS
lnfurtheranceoftheconspiracyandtoachievetheobjectandpurposethereof,atleastone
conspirator com m itted and caused to be com m itted in the Southern D istrict of Florida, and
elsewhere,atleastone ofthe follow ing overtacts,am ong others:
O n or about M ay 6,2020,LA TO YA STA N LEY opened a new bank accountat
Bank 2 forD ream G urlto use forreceiptofPPP fraud proceeds.
On oraboutM ay 6,2020,JO H N NY PH ILU S opened a new bank accountatBank
2 forElegance Auto to use forreceiptofPPP fraud proceeds.
O n oraboutM ay 7,2020,JO H N NY PH ILUS and hisco-conspirators caused the
subm ission of a PPP application to Com pany l on behalfof Elegance A uto,via interstate wire,
through an online portal.
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 8 of 13
4. On oraboutM ay 14,2020,LATOYA STANLEY and herco-conspiratorscaused
the subm ission ofa PPP application to Com pany l on behalf ofD ream Gurl,via interstate wire,
through an online portal.
On oraboutJune l8,2020 JO H N NY PH ILU S and his co-conspiratorscaused the
submission ofan onlineapplication,viainterstatewire,to the SBA foran approxim ately $150,000
loan from EID L program .
6. On oraboutJune 18,2020 LA TO YA STA NL EY and herco-conspirators caused
the subm ission of an online application,via interstate w ire,to the SBA for an approxim ately
$150,000 loan from the EIDL program .
A 11in violation ofTitle 18,United States Code,Section 371.
FO RFEITU R E
(18U.S.C.j982(a)(2)(A))
The allegationsofthis lnform ation are hereby re-alleged and by thisreference fully
incorporated herein forthe purpose ofalleging forfeitureto the United StatesofA m erica ofcertain
property in w hich the defendants, LAT O YA STA NLEY and JO H N N Y PH ILU S, have an
interest.
Upon conviction ofTitle 18,United States Code,Section 371,as alleged in this
lnform ation,any defendant so convicted shalltbrfeit to the U nited States any property,real or
personal,w hich constitutes,or is derived from ,proceeds traceable to such violation,pursuantto
Title18,United StatesCode,Section 982(a)(2)(A).
lfanyofthepropertysubjecttoforfeiture,asaresultofanyactoromissionofthe
defendants'
.
a. cannotbe located upon the exercise ofdue diligence;
b. has been transferred orsold to,ordeposited w ith,a third party;
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 9 of 13
c. hasbeenplacedbeyondthejurisdictionofthecourt;
d. has been substantially dim inished in value'
,or
e. has been com m ingled w ith otherproperty w hich cannotbe divided w ithout
difficulty.
the United States shallbe entitled to forfeiture of substitute property underthe provisions ofTitle
21,United StatesCode,Section 853(p).
Al1pursuanttoTitle 18,United StatesCode,Section982(a)(2)(A)and theproceduresset
forth in Title 21,U nited StatesCode,Section 853,asincorporated by Title l8,U nited StatesCode,
Section982(b)(1).
AR IA N A FA JA RDO O RSHA N
UN ITED STATES A TTO RN EY
SOU TH ERN D ISTRICT OF FLO RID A
DA N IEL KA HN
ACTIN G C HIEF
FRA U D SECTION ,CRIM IN A L DIV ISION
UN ITED STATES D EPA RTM EN T O F JU STICE
b:
L IS M AN ZO ,TRIA L A TTO RN EY
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 10 of 13
UNIT ED STATES DISTRICT CO URT
SO UTH ERN DISTRICT O F FLO RIDA
UNITED STATES O F AM ERICA
CERTIFICATE O F TRIA L ATTO RNEY*
LatoyaStanley and Johnny Philus
Superseding Case Inform ation:
Defendant. /
CourtDivision:(selectone) New defendantts) Yes /' No
z M iam i Key W est Num berofnew defendants 2
FTL W PB Totalnum berofcounts ?
Ihave carefully considered theallegations ofthe indictment,the numberofdefendants,the num berof
probable witnessesand thelegalcomplexitiesofthelndictm ent/lnformation attached hereto.
lam aware thatthe information supplied on this statementwillbe relied upon by the Judges ofthis
Courtin setting their calendarsand scheduling crim inaltrials underthe mandate ofthe Speedy Trial
Act,Title28 U.S.C.Section 3l6l.
Interpreter: (YesorNo) No
Listlanguageand/ordialect
Thiscase willtake 0 daysforthepartiesto try.
Please check appropriate category and type ofoffenselistedbelow:
(Checkonlàone) (t-heckonlyone)
I 0 to 5 days ?' Petty
11 6 to l0 days M inor
IlI llto 20 days M isdem .
IV 21to 60 days Felony ?'
V 6ldaysand over
6. HasthiscasepreviouslybeentiledinthisDistrictCourt? (YesorNo)
Ifyes:Judge CaseNo.
(Attachcopyofdispositiveorder)
HasacomplaintbeenGledinthismatter? (YesorNo) YeS
Ifyes:M agistrate CaseNo. 20-m i-03470-AOR
Related miscellaneousnum bers:
Defendantts)infederalcustody asof ArrestedonAucust26.2020-notincustodv
Defendantts)instatecustodyasof
Rule 20 from theDistrictof
lsthisapotentialdeathpenaltycase?(YesorNo) No
Doesthiscase originatefrom am atterpending in theCentralRegion ofthe U.S.Attorney'sOftice
priortoAugust9,2013(M ag.JudgeAlicia0.Valle)? Yes No ?'
8. Doesthiscase originatefrom am atterpending intheNorthern Region U.S.Attorney'sOffice
priortoAugust8,2014 (M ag.Judge Shaniek M aynard)? Yes No z
Lo isM anzo
Tri lA ttorney
SpecialBarID # A5502685
*penalty Sheetts)attached
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 11 of 13
UN IT ED STA TES D ISTRIC T C O U RT
SO UT H ER N D IST RIC T O F FLO R IDA
PEN A LTY SH EET
Defendant's N am e: LA TO YA STA N LEY
Case N o:
Count#:1
Conspiracy to Com m itW ire Fraud
Title 18,United StatesCode,Section 371
*M ax.Penalty:Five(5)Years'lmprisonment
*R efers only to possibleterm ofincarceration,does notinclude possible fines,restitution,
specialassessm ents,parole term s,or forfeituresthatm ay be applicable.
Defendant's N am e: JO HN N Y PH ILU S
Case N o:
Count#:l
Conspiracy to Com m itW ire Fraud
Title 18,United StatesCode,Section 371
*M ax.Penalty:Five(5)Years'lmprisonment
*R efers only to possibleterm ofincarceration,does notinclude possible fines,restitution,
specialassessm ents,parole term s,or forfeituresthatm ay be applicable.
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 12 of 13
AO 455(Rev.01/09)WaiverofanIndictment
U NITED STATES D ISTRICT COURT
forthe
Southern DistrictofFlorida
United StatesofAmerica
V.
Johnny Philus,
Defendant
W A IV ER O F A N IN D ICTM ENT
lunderstand thatIhavebeen accused ofoneormoreoffensespunishableby im prisonm entformore than one
year.lwasadvised in open courtofmy rightsand thenatureofthe proposed chargesagainstme.
Afterreceiving thisadvice,lwaive my rightto prosecution by indictlnentand consentto prosecution by
infonnation.
D ate:
Prinlednt
?&?trofdefendant'
r st7//t
?r/?cl'
Case 1:21-cr-20067-MGC Document 26 Entered on FLSD Docket 02/03/2021 Page 13 of 13
AO 455(Rev.01/09)Waiverofanlndictment
U NITED STATES D ISTRICT COURT
forthe
Southern DistrictofFlorida
United StatesofAmerica
V. C aseN o.
Latoya Stanley,
Defendant
W AIV ER OF AN INDICTM ENT
Iunderstand thatIhavebeen accused ofoneormoreoffensespunishableby im prisonmentformorethanone
year. Iwasadvised in open courtofmy rightsand the natureoftheproposed chargesagainstme.
Afterreceiving thisadvice,lwaive my rightto prosecution by indictmentand consentto prosecution by
information.
Date:
Pri
ntednal
neofdefendant'
stz//tprngl'
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