Criminal Information — United States v. Quentin Allen Jackson, Eastern District of North Carolina (Document 1)

Summary

A criminal information against Quentin Allen Jackson, Case 5:22-cr-00180-D, filed 08/05/22 as Document 1 in the U.S. District Court for the Eastern District of North Carolina, Western Division. Count One charges a money laundering conspiracy in violation of Title 18, United States Code, Section 1956(h). The information alleges that Jackson was a Borrower who utilized E.W. and S.C. to fraudulently obtain PPP loan proceeds in the names of several companies, and that he also served as a middleman who recruited other Borrowers for them for a fee. It alleges that E.W. or S.C. used information supplied by Borrowers to apply for the loans, and that Jackson, for a fee, obtained altered bank statements from T.M. that others used to apply for loans. It seeks a forfeiture money judgment of at least $3,942,758.99.

Summary drafted by a model from the text of the original file linked on this page and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Cite this document

“Criminal Information — United States v. Quentin Allen Jackson, Eastern District of North Carolina (Document 1).” Original at ecf.nced.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/information-usa-v-jackson-dkt-1-e-d-n-c-a00c0422f9/, SHA-256 6fa83481b35f8960e07df4e58ec187871cd4fe2b0efc5350ec7b7449b3a9aa62.

Full text

FILED
AUG O5 2022
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NORTH CAROLINA PETER A. MOORE, JR.T, CE~
BYUS 0~ COUR 'oEP CU<
WESTERN DIVISION
No.: s~ 2-:2-c12-\
q,o
UNITED STATES OF AMERICA )
)
V. ) CRIMINAL INFORMATION
)
QUENTIN ALLEN J ACKS ON )

The United States Attorney charges at all relevant times:

INTRODUCTORY ALLEGATIONS

1. Between February of 2017 and February of 2022, Defendant QUENTIN

ALLEN JACKSON and others, known and unknown to t he United States Attorney,

conspired to carry out various frauds. In some instances, Jackson, committed t hese

frauds in his own na me or in the names of companies he controlled. In other

instances, Jackson facilitated frauds committed in the names of other persons and

entities in exch ange for a fee or kickback. These schemes included frauds upon

financial institutions; and upon institutions and agencies en gaged to provide

financial assistance to the public arising from t he COVID-19 pandemic. In total,

J ackson and his conspirators sought more than $3.5 million in fraudulent proceeds

in connection with these schemes. Additionally, to promote the carrying on the

foregoing schemes, Jackson conspired with others to launder the proceeds of the

frauds.

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 1 of 13
COVIDFRAUD

The Paycheck Protection Program ("PPP")

2. In March 2020, Congress passed the Coronavirus Aid, Relief, and

Economic Security (CARES) Act, which was designed to provide emergency financial

assistance to millions of Americans who were suffering the economic effects caused

by the COVID-19 pandemic.

3. 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

business and by assisting in the economic recovery of communities after disasters.

4. One source of relief provided by the CARES Act was the authorization

of up to $349 billion in forgivable loans to small businesses for job retention and

certain other expenses, throu gh a program referred to as the Paycheck Protection

Program (PPP). In or around April 2020, Congress authorized over $300 billion in

additional PPP funding.

5. To obtain a PPP loan, businesses were required to submit a PPP loan

application, signed by an authorized representative of the business, acknowledging

the program rules. The business was required to state (a) its average monthly

payroll expenses and (b) the number of employees and to provide documentation

showing their payroll expenses. These figures were used to calculate the amount of

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 2 of 13
money the small business was eligible to receive under the PPP. In addition,

businesses applying for a PPP loan were required to provide documentation showing

their payroll expenses.

6. A PPP loan application was required to be processed by a participating

financial institution ("lender"). If a PPP loan application was approved, the lender

funded the PPP loan using its own moneys, which were 100% guaranteed by the SBA.

Data from the application, including information about 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.

7. PPP loan proceeds were required to be used by businesses on certain

permissible expenses: payroll costs, interest on mortgages, rent, and utilities. Loans

provided through the PPP have government-backed guarantees and are 100%

forgivable if the borrower submits documentation to the PPP lender and SBA

demonstrating that at least sixty percent (60%) of the PPP loan proceeds were utilized

to meet existing payroll obligations and to retain employees.

The Economic Injury Disaster Loan ("EIDL") Program

8. Another source of relief provided by the CARES Act was the Economic

Injury Disaster Loan Program (EIDL). The SBA provided low-interest financing to

small businesses, renters, and homeowners in regions affected by declared disasters.

9. The CARES Act authorized the SBA to provide EIDLs to eligible small

businesses experiencing substantial financial disruptions due to the COVID-19

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 3 of 13
pandemic. In addition, the CARES Act authorized the SBA to issue advances of up

to $10,000 to small businesses. The amount of the advance was determined by the

number of employees the applicant certified having. The advances did not have to

be repaid.

10. To obtain an EIDL and advance, businesses were required to file an

application with the SBA and provide information about its operations, such as the

number of employees, gross revenue for the 12-month period preceding the disaster,

and cost of goods sold in the 12-month period preceding the disaster. In the case of

EIDLs for COVID-19 relief, the 12-month period was that preceding January 31,

2020.

11. EIDL applications were submitted electronically to the SBA and any

funds issued under an EIDL or advance were issued directly by the SBA. The

amount of the loan was determined based, in part, on the number of employees, gross

revenue , and cost of goods. EIDL funds were permitted to be used for payroll

expenses, sick leave, production costs, and business obligations, such as debts, rent,

and mortgage payments. EIDL funds could not be used to expand or start a

business. Additionally, if the applicant also obtained a loan under the PPP, the

EIDL funds were not permitted to be used for the same purpose as the PPP funds.

12. Funds disbursed under the PPP and EIDL programs are referred to

collectively herein as "Covid Loans".

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 4 of 13
The Scheme to Defraud

13. Between approximately April of 2020 and December of 2021, E.W. and

S.C. conspired with numerous others to engage in a massive fraud upon the PPP and

EIDL programs. After first engaging in successful frauds upon the PPP and EIDL

programs in the names of companies that they owned and controlled, E.W. and S.C.

assisted numerous other companies and individuals (collectively "Borrowers") located

around the country to fraudulently obtain Covid Loans. In exch a nge for their

assistance in obtaining Covid Loans, the Borrowers paid E.W. and S.C. a fe e. In

total, E.W. and S.C. collectively facilitated the fraudulent disbursement of more than

$15 Million in Covid Loans.

14. To promote the operation of the scheme, E.W. and S.C. utilized

middlemen to recruit additional Borrowers. E.W. and S.C. paid, and caused other to

pay, these middlemen a "cut" of the fee charged for securing the fraudulent loans for

the Borrowers.

15. JACKSON was an individual who operated various companies in the

Eastern District of North Carolina. Jackson was a Borrower who utilized E.W. and

S.C. to fraudulently obtain PPP loan proceeds in the names of several companies. In

addition to being a Borrower , Jackson also served as a middleman, and recruited

additional Borrowers for E.W. and S.C. for an agreed upon fe e.

16. To carry out the scheme, the conspirators generally engaged m a

common series of step s:

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 5 of 13
A. Either directly, or by introduction from a middleman such as Jackson,

E.W. came into contact with a Borrower who desired to obtain a Covid

Loan. In most instances, these contacts occurred via interstate text

message or interstate phone calls. During these contacts, E.W. a nd the

Borrower discussed the process by which E.W. would assist the

Borrowers to secure Covid Loans.

B. The Borrower supplied E.W. or S.C. various information concerning the

Borrower and the company that would be used to obtain the Covid

Loans. This information included such comp any information as the

federal tax identification number, articles of incorporation with proof of

good st a nding from the state of formation, the number of employees for

the company, and payroll information for t he company for the prior year.

The Borrower also supplied person al information, such as a driver's

license, social security card, address, a nd contact information. Lastly,

the Borrower also supplied bank account information for the company,

including the account number and bank routing information.

C. E.W. or S.C. would use the information supplied by the Borrower to

fraudulently apply for Covid Loans. In furtherance of the application,

E.W. or S.C. created documents t hat falsely reflected such information

as the annual payroll, gross receipts, expenses, number of employees,

and employee names for the company.

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 6 of 13
D. With respect to PPP loan applications, E.W. and S.C. supplied

fraudulent documents to the Borrowers via interstate email

transmission for review and signature by Borrower. Such fraudulent

documents reviewed and signed by the Borrower included the Paycheck

Protection Program Borrower Application Form. These documents

were fraudulent because, among other reasons, they misrepresented the

average monthly payroll and true number of employees for the

Borrower's company. The Borrower signed and returned the

fraudulent Application Form.

E. With respect to PPP loan applications, E.W. and S.C. also supplied to

the Borrowers via interstate email, a purported employee listing and

annual salary for the Borrower's company. The Borrower signed and

returned these fraudulent documents to E.W. and S.C.

F. With respect to PPP loan applications, E.W. and S.C. also supplied to

the Borrower via interstate email, a fraudulent Form 940, and four

fraudulent from 941 forms. The forms were fraudulent because they

misrepresented the actual annual and quarterly wages for the

Borrower's company. The Borrower received, signed, and returned the

fraudulent Form 940 and Form 941s. In each instance , the fraudulent

Form 940 and 941 was backdated by the conspirators.

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 7 of 13
G. E.W. and S.C. applied for the Covid Loans in the names of the Borrower

using the fraudulent information described above, by electronically

transmitting the information to the lending institution or agency, via

intestate wire transmission.

H. With respect to PPP loans, upon approval, a member of the conspiracy

electronically signed the promissory note or promise to pay.

I. The Covid Loan monies were deposited to the Borrower's bank account

via interstate wire transfer.

Money Laundering

17. After rece1vmg proceeds from the PPP fraud described above , the

Borrowers carried out a series of steps orchestrated by E.W. that made it appear as

though the Borrower's company was paying bi-weekly payroll to its employees.

18. Over a series of six to eight weeks, the Borrower wrote checks payable

to each of the individuals previously named by the Borrower as employees of the

Borrower's company. Each of the checks contained a memo notation stating a "pay

period" and a two-week interval. Collectively, this made it appear that each of the

check recipients was engaged in work on behalf of the Borrower's company, and

receiving wages during each of the stated periods. In reality, in most instances, the

recipients of the ch ecks were not employees of the Borrower's company, or did not

previously receive wages from the company comparable to those paid from the Covid

Loans.

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 8 of 13
19. In most instances, after rece1vmg the checks described above , the

purported employees cashed the checks, and returned the cash to the Borrower.

20. In most instances, the Borrower was instructed to, and did, purchase a

series of cashier's checks in an amount less than $10,000. The cashier's checks were

made payable to entities controlled by E.W. and S.C. The aggregate fee paid to E.W.

and S.C. typically amounted to 25% of the loan received.

Bank Fraud

21. In addition to the Covid loans described above, Jackson was also

engaged in the business of "middle-manning" other forms of fraudulent loans and

loan documents for others for a fee.

22. T.M. was an individual operating in the Eastern District of North

Carolina who was knowledgeable in the use of software to fabricate and alter bank

statements for a fee.

23. T.R. was a North Carolina attorney who worked with R.M. , a business

associate, to carry out frauds upon financial institutions, as that term is defined in

Title 18, United States Code, Section 20.

24. Beginning no later than February of 2017 and continuing through a time

no earlier than December of 2019, Jackson, in exchange for an agreed upon fee,

obtained altered and fabricated bank statements from T.M. on behalf of R.M. and

T.R. These altered bank statements were then utilized by R.M. and T .R. to

fraudulently apply for loans from financial institutions. In some instances, R.M.

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 9 of 13
communicated directly with T.M. to obtain fraudulent bank statements for u se on

loans.

COUNT ONE

25. From approximately February of 2017 through a time unknown, but no

earlier than February of 2022, in t h e Eastern District of North Carolina and

elsewhere, defendant QUENTIN ALLEN JACKSON and others, known and

unknown to the United States Attorney, did knowingly combine, conspire,

confederate, agree, and have a tacit understanding with each other to commit

offenses against the United States, in violation of Title 18, United States Code,

Sect ion 1956(a), specifically, to knowingly conduct and attempt to conduct a financial

transaction affecting interstat e commerce, which involve d the proceeds of specified

unlawful activities, that is:

(1) Knowingly executing and attempting to execute a sch eme and artifice to

defraud, a nd to obtain money and property by means of materially false

and fraudulent pret enses, representations and promises, and for the

purpose of executing said sch eme and artifice, transmitting and causing

to be transmitted by me ans of wire communication in interstate

commerce, any writing, sign, signal, picture , and sound, in violation of

Title 18, United States Code, Section 1343 ("Wire Fraud"); and

(2) Knowingly executing a sch eme and artifice : (1) to defraud a financial

institution, as defined by Title 18, United States Code, Section 20, and

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 10 of 13
(2) to obtain any of the moneys, funds , credits, and assets owned by and

under the custody and control of a financial institution, by means of

materially false and fraudulent pretenses, representations, and

promises, in violation of Title 18, United States Code, Section 1344

("Financial Institution Fraud")

(Hereinafter collectively referred to as the "SUAs") with the intent to promote the

carrying on of said SUAs, and while conducting and attempting to conduct such

financial transaction knowing that the property involved in the financial transaction

represented the proceeds of some form of unlawful activity in violation of Title 18,

United States Code, Section 1956(a)(l)(A)(i).

Manner and Means

26. The United States Attorney realleges and incorporates by reference

herein all of the allegations contained in paragraphs one through 24 of this Criminal

Information, and further alleges that Jackson and others, known to the United States

Attorney carried out the conspiracy in the manner and means as set forth in those

paragraphs.

All in violation of Title 18, United States Code, Section 1956(h).

FORFEITURE NOTICE

Defendant Quentin Allen Jackson 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 Count One this Superseding

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 11 of 13
Criminal Information, defendant Jackson shall forfeit to the United States, pursuant

to Title 18, United States Code, Section 982(a)(2)(A), any property constituting, or

derived from , proceeds obtained directly or indirectly, as a result of such offense(s).

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

Forfeiture Money Judgment:

a) A sum of money representing the gross proceeds of the offense(s) charged

herein against QUENTIN ALLEN JACKSON in the amount of at least

$3,942,758.99.

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 ;

(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,

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 12 of 13
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:

Case 5:22-cr-00180-D Document 1 Filed 08/05/22 Page 13 of 13

File and source

File: 1-information-as-to-quentin-allen-jackson.pdf
Size: 201,818 bytes
SHA-256: 6fa83481b35f8960e07df4e58ec187871cd4fe2b0efc5350ec7b7449b3a9aa62
Our copy: 1-information-as-to-quentin-allen-jackson.pdf
Original: PACER (login required)