Information — United States v. Michael Lain, District of Colorado (Document 1)
Summary
An Information filed May 26, 2021 as Document 1 in United States of America v. Michael Lain, Criminal Case No. 21-cr-175-WJM, in the U.S. District Court for the District of Colorado. Count One charges wire fraud under 18 U.S.C. § 1343. The Information alleges that from at least March 2020 through at least the end of June 2020 the defendant controlled 70 limited liability companies and submitted false EIDL applications for them, misstating gross revenues and cost of goods sold. It alleges that the LLCs received $3,830,400 in EIDL proceeds and $336,000 in Economic Injury Disaster Grant proceeds. The charged wire is an SBA payment file for a loan to Ramnauxtly PMB 304, LLC, and the forfeiture allegation cites 28 U.S.C. § 2461(c). It is signed by Assistant United States Attorney Patricia Davies.
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“Information — United States v. Michael Lain, District of Colorado (Document 1).”
Original at ecf.cod.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/information-usa-v-lain-dkt-1-d-colo-349a13b644/
, SHA-256 c6b1f2971c4d88deeacda52ebaea10353786ce97db9868d8ca9652c16f169435.Full text
Case No. 1:21-cr-00175-WJM Document 1 filed 05/26/21 USDC Colorado pg 1
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Criminal Case No. 21-cr-175-WJM
UNITED STATES OF AMERICA,
Plaintiff,
V.
1. MICHAEL LAIN ,
Defendant.
INFORMATION
The UNITED STATES ATTORNEY charges that:
COUNT ONE
18 u.s.c. § 1343
General Allegations
1. On March 27 , 2020 , the President of the United States signed into law the
Coronavirus Aid , Relief, and Economic Security ("CARES") Act, wh ich provided
emergency assistance, administered by the United States Small Business
Administration ("SBA"), to small business owners affected by the Coronavirus ("COVID-
19") pandemic. The two sources of funding for small businesses were the Paycheck
Protection Program ("PPP") and the Economic Injury Disaster Loans ("EIDL") program .
The CARES Act mandated that only businesses in operation before February 1, 2020 ,
were eligible under the EIDL program. Under the EIDL program , a small business could
receive a loan in an amount of up to six months of working capital with a maximum of
Case No. 1:21-cr-00175-WJM Document 1 filed 05/26/21 USDC Colorado pg 2
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$150,000 during all times relevant to this Information . The SBA determined the amount
of the loan for which each small business was eligible based , in part, on the amount of
gross revenues and cost of goods sold for the business set forth in the EIDL application.
The CARES Act also allowed eligible businesses submitting EIDL applications to
request in the same application an advance grant of up to $10,000.
The Scheme
2. Beginning in or about March 2020 and continuing through at least in or
about the end of June 2020, in the State and District of Colorado and elsewhere,
defendant MICHAEL LAIN ("LAIN ") devised and intended to devise a scheme to obtain
money by means of materially false and fraudulent pretenses , representations , and
promises (herein after referred to as the "Scheme"). The Scheme was executed in
connection with submitting false and fraudulent loan applications to the SBA seeking
loans and grants under the EIDL program authorized by the CARES Act. It was part of
the Scheme that:
a. From at least March 2020 through at least the end of June 2020,
defendant LAIN controlled 70 limited liability companies ("LLC ") that
had not been active companies with employees , gross receipts or
costs of goods sold during the 12 months prior to January 31 , 2020 ;
b. From in or about March 2020 through in or about the end of June
2020, defendant LAIN submitted false and fraudulent applications on
behalf of these 70 LLCs to the SBA seeking loans and grants under
the EIDL program ;
2
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c. In at least 59 of those false and fraudulent EIDL applications ,
defendant LAIN made false statements about the number of
employees each LLC had as of January 31 , 2020 ;
d. In all 70 of those false and fraudulent EIDL applications, defendant
LAIN made false statements about the amount of gross revenues and
cost of goods sold that each LLC had in the 12 months prior to January
31 , 2020 ;
e. In connection with each of the 70 loans , defendant LAIN signed , or
caused someone else to sign , a Loan Authorization and Agreement in
which LAIN falsely agreed to "use all proceeds of this Loan solely as
working capital to alleviate economic injury caused by the disaster
occurring in the month of January 31 , 2020 and continuing thereafter
and to pay Un iform Commercial Code (UCC) lien filing fees and a
third-party UCC handling charge of $100 which will be deducted from
the Loan amount";
f. In fact, defendant LAIN had always intended to , and did , use the EIDL
proceeds for other purposes not authorized by the CARES Act; and
g. As a result of these 70 fraudulent EIDL applications, LLCs controlled
by defendant LAIN received $3 ,830,400 in EIDL proceeds and
$336 ,000 in Economic Injury Disaster Grant (EIDG) proceeds .
3
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Execution of the Scheme
3. For the purpose of executing the Scheme described in paragraphs 1a.
through 1g . above, defendant LAIN caused to be transmitted the following interstate
wire communication pertaining to an EIDL that defendant LAIN applied for on behalf of
Ramnauxtly PMB 304 , LLC: on or about June 26 , 2020 , the SBA in Denver, Colorado
created and certified the payment file for a loan to Ramnauxtly PMB 304 , LLC and
transmitted it via interstate wire communication from Colorado to the U.S. Treasury
processing site located in the Kansas City Regional Operations Center in Kansas City,
Missouri.
All in violation of Title 18, United States Code , Section 1343.
Forfeiture Allegation
4. The allegations contained in Count One of this Information are hereby
realleged and incorporated by reference for the purpose of alleging forfeiture pursuant
to the provisions of 18 U.S.C . §§ 981 (a)(1 )(C) and 28 U.S.C. § 2461 (c) .
5. Upon conviction of the violation alleged in Count One of this Information
involving a violation of 18 U.S.C. § 1343, defendant MICHAEL LAIN shall forfeit to the
United States, pursuant to Title 18, United States Code, Section 981 (a)(1 )(C) , and Title
28 , United States Code , Section 2461 (c) any and all of the defendant's right , title and
interest in all property constituting and derived from any proceeds the defendant
obtained directly and indirectly as a result of such offense , including , but not limited to
the entry of a money judgment in the amount of proceeds obtained by the scheme and
by the defendant.
4
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6. 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 subdivided without difficulty;
it is the intent of the United States, pursuant to Title 21 , United States Code, Section
853(p) , Title 28 , United States Code , Section 2461 (c) , to seek forfeiture of any other
property of said defendant up to the value of the forfeitable property.
MATT ----
AGTI
)
e
Assistant United States Attorney
1801 California Street, Suite 1600
Denver, CO 80202
Phone : (303) 454-0100
Fax: (303) 454-0402
pegeen .rhyne@usdoj .gov
s/ Patricia Davies
By: Patricia Davies
Assistant United States Attorney
1801 California Street, Suite 1600
Denver, CO 80202
Phone : (303) 454-0100
Fax: (303) 454-0402
patricia. davies@usdoj .gov
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