Criminal Information — United States v. Edward Sheldon Whitaker and Schunda Coleman, E.D.N.C. (Document 1)

Summary

A criminal information against Edward Sheldon Whitaker and Schunda Coleman, Case 5:22-cr-00257-D, filed 10/11/22 as Document 1 in the U.S. District Court for the Eastern District of North Carolina, Western Division. It charges a money laundering conspiracy in violation of Title 18, United States Code, Section 1956(h). The information alleges that Whitaker and Coleman helped Borrowers around the country fraudulently obtain PPP and EIDL loans for a fee, preparing false payroll documents and applications, and collectively facilitated more than $15 Million in Covid Loans; it states that Coleman was involved to a lesser degree than Whitaker. It seeks a forfeiture money judgment of at least $4,792,294.62 and lists real property in Hidalgo County, Texas and the Dominican Republic and bank account funds.

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“Criminal Information — United States v. Edward Sheldon Whitaker and Schunda Coleman, E.D.N.C. (Document 1).” Original at ecf.nced.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/information-usa-v-whitaker-et-al-dkt-1-e-d-n-c-92d2d75ae7/, SHA-256 85d2bf4719de1f7049dd40a6cb7d653083889cf41e281e97e4f6ca4a921d6a9c.

Full text

FILED
OCT 1 1 2022
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
NO. 5:22-Gfl-2'51

UNITED STATES OF AMERICA )
)
V. ) CRIMINAL INFORMATION
)
EDWARD SHELDON WHITAKER )
SCHUNDA COLEMAN )

The United States Attorney charges that at all relevant times:

INTRODUCTORY ALLEGATIONS

COVID FRAUD

The Paycheck Protection Program ("PPP")

1. In March 2020, Con gress 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.

2. 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.

3. One source of relief provided by th e CARES Act was the a uthorization

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

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

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 1 of 14
Program (PPP). In or around April 2020, Congress authorized over $300 billion in

additional PPP funding.

4. 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

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.

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

financial institution ("lender"). Many lenders constituted financial institutions, as

that term is defined in Title 18, United States Code, Section 20. 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.

6. 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%

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 2 of 14
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

7. 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.

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

businesses experiencing substantial financial disruptions due to the COVID-19

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.

9. 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.

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

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

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 3 of 14
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.

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

collectively herein as "Covid Loans".

The Scheme to Defraud

12. Between approximately April of 2020 and December of 2021, EDWARD

SHELDON WHITAKER (hereinafter "Whitaker") and SCHUNDA COLEMAN

(hereinafter "Coleman") conspired with numerous others to engage in a 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,

Whitaker and Coleman assisted numerous other companies and individuals

(collectively "Borrowers") located around the country to fraudulently obtain Covid

Loans. In exchange for their assistance in obtaining Covid Loans, the Borrowers

paid Whitaker and Coleman a fee. While Coleman was involved to a lesser degree

than Whitaker, Whitaker and Coleman collectively facilitated the fraudulent

disbursement of more than $15 Million in Covid Loans.

13. To promote the operation of the scheme, Whitaker and Coleman utilized

middlemen to recruit additional Borrowers. Whitaker and Coleman paid, and
4

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 4 of 14
caused other to pay, these middlemen a "cut" of the fee charged for securing the

fraudulent loans for the Borrowers.

14. Q.J. was an individual who operated various companies in the Eastern

District of North Carolina. Q.J. was a Borrower who utilized Whitaker to

fraudulently obtain PPP loan proceeds in the names of several compames. In

addition to being a Borrower, Q.J. also served as a middleman, and recruited

additional Borrowers for Whitaker for an agreed upon fee.

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

common series of steps:

A. Either directly, or by introduction from a middleman such as Q.J.

Whitaker and Coleman 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, Whitaker and the Borrower discussed the

process by which Whitaker would assist the Borrowers to secure

Covid Loans.

B. The Borrower supplied Whitaker and Coleman various

information concerning the Borrower and the company that would

be used to obtain the Covid Loans. This information included

such company information as the federal tax identification

number, articles of incorporation with proof of good standing from

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 5 of 14
the state of formation, the number of employees for the comp any,

and payroll information for the comp any for the prior year. The

Borrower also supplied personal information, such as a driver's

license, social security card, address, and contact information .

Lastly, the Borrower also supplied bank account information for

the company, including the account number and bank routing

information.

C. Whitaker and Coleman would use the information supplied by the

Borrower to fraudulently apply for Covid Loans. In furtherance

of the application, Whitaker and Coleman created documents that

falsely reflected such information as the annual payroll, gross

receipts, expenses, number of employees, and employee names for

the company.

D. With respect to PPP loan applications, Whitaker and Coleman

supplied fraudulent documents to the Borrowers via interstate

email transmission for review and signat ure by Borrower. Such

fra udulent documents reviewed and signed by t h e Borrower

included the Paych eck Protection Program Borrower Application

Form . These documents were fraudulent becau se, among other

reasons, they misrepresented the average monthly payroll and

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 6 of 14
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, Whitaker and Coleman 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

Whitaker and Coleman.

F. With respect to PPP loan applications, Whitaker and Coleman 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.

G. Whitaker and Coleman 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.

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 7 of 14
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

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

Borrowers carried out a series of steps orchestrated by Whitaker that made it appear

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

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

to each of the individuals previou sly 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 period. In reality, in most instances, the

recipients of the checks were not emp loyees of the Borrower's company, or did not

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

Loans.

18. In most instances, after rece1vmg the checks described above, the

purported employees cashed the checks, and returne d the cash to the Borrower.

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 8 of 14
19. In most inst ance s, 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 wer e

made payable to entities controlled by Whitaker and Coleman. The aggregate fee

paid to Whitaker and Coleman typically amounted to 25% of the loan r eceived.

CHARGE

20. From approximately April of 2020 through a time unknown, but no

earlier than February of 2022, in the Eastern District of North Carolina and

elsewhere, defendants EDWARD SHELDON WHITAKER and SCHUNDA

COLEMAN, 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, Section 1956(a), specifically, to knowingly conduct and attempt

to conduct a financial transaction affecting interstate commerce, which involved the

proceeds of specified unlawful activities, that is:

(1) Knowingly executing and attempting to execute a scheme and artifice to

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

and fraudulent pretenses, repre sentations and promises, and for the

purpose of executing said scheme and artifice , transmitting and causing

to be transmitted by means 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

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 9 of 14
(2) Knowingly executing a scheme and artifice: (1) to defraud a financial

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

(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

21. The United States Attorney realleges and incorporates by reference

herein all of the allegations contained in paragraphs one through 19 of this Criminal

Information, and further alleges that EDWARD SHELDON WHITAKER and

SCHUNDA COLEMAN 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).

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 10 of 14
FORFEITURE NOTICE

Notice is hereby given that all right, title and interest in the property described

herein is subject to forfeiture.

Upon conviction of any violation of 18 U .S.C. §§ 1956, 1957 or 1960 charged

herein, the defendant shall forfeit to the United States, pursuant to 18 U.S.C.

§ 982(a)(l), any property, real or personal, involved in such offense, or any property

traceable to such property.

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

Forfeiture Money Judgment:

a) A sum of money representing the value of the property involved in the money

laundering offense(s) charged herein against EDWARD SHELDON

WHITAKER and SCHUNDA COLEMAN in the amount of at least

$4,792,294.62

Real Property:

b) Real property having th e physical address of 3400 Monserat Drive, Edinburg,

TX 78539-34 72, including any and all appurtenances and improvements

thereto, being titled to SCHUNDA COLEMAN and legally described in Official

Document No. 2929047 recorded on July 2, 2018 with the County Clerk of

Hidalgo County, Texas, and any and all proceeds from t h e sale of said property

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 11 of 14
c) Real Property identified as Unit J-4, including any and all appurtenances and

improvements thereto, identified as 506606738020:J-4, registration No.

4000348411, with an area of 140.00 square meters, located in Higiiey, La

Altagracia Province, Dominican Republic, and any and all proceeds from the

sale of said property

d) Real property identified as Atman Residences Villa Nos. 116, 204 and 243,

including any and all appurtenances and improvements thereto, located at Lot

1, Block 333, Tulum, Quintana Roo, Mexico, any and all proceeds from the sale

of said property

Personal Property:

e) Any and all funds in SOFI Bank Account Nos. XX:1663, XX:4068, and XX8540,

held in the name of EDWARD WHITAKER and/or SCHUNDA COLEMAN

f) Any and all funds in Seed Invest accounts held in the name of EDWARD

WHITAKER and/or SCHUNDA COLEMAN

g) Any and all funds in Texas Regional Bank Account No. XXX:9944, held in the

name ofMPLOYPATH LLC

h) Any and all funds in International Bank of Commerce Account Nos.

XXXXXX:2341 and XXXXXX:1350, held in the names of TAKYL LOGISTICS

LLC and/or S&E GROUP LLC

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 12 of 14
i) Any and all funds in Navy Federal Credit Union Account Nos. XXXXXX4722,

XXXXXX9024, XXXXXX1946, XXXX:XX1454, XXXX:XX1421 , and

XXXXXX:8047, held in the name ofS&E GROUP LLC, EDWARD WHITAKER

and/or SCHUNDA COLEMAN

j) Any and all funds in Wells Fargo Account Nos. :XXXXXX0906, XXXXXX4727,

XXXXXX:4271, and XXXXXX:4769, held in the name of VORK LLC, S&E

GROUP LLC and/or SCHUNDA COLEMAN

k) Any and all funds in Trulian Federal Credit Union Account No. XXXXXX:7496,

held in the name of SCHUNDA COLEMAN

1) Any and all funds in Founders Federal Credit Union Account No. XX1062, held

in the name of EDWARD WHITAKER

m) Any and all funds in JP Morgan Chase Bank Account Nos. XXXXXX0096,

XXXXX2058, and XXXXXX:5056, held in the name of VORK LLC and/or

EDWARD WHITAKER

n) Any and all cashier's checks, funds , or other things of value derived from or

traceable to the proceeds of specified unlawful activity in the possession,

custody or control of EDWARD WHITAKER and/or SCHUNDA COLEMAN

If any of the above-described forfeitable property, as a result of any act or

omission of a defendant: cannot be located upon the exercise of due diligence; has

been transferred or sold to, or deposited with, a third party; has been placed beyond

the jurisdiction of the court; has been substantially diminished in value; or has been

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 13 of 14
commingled with other property which cannot be divided without difficulty; 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: l?;~HT;
Assistant United States Attorneys
150 Fayetteville Street, Suite 2100
Raleigh, NC 27601
(919)856-4530

Case 5:22-cr-00257-D Document 1 Filed 10/11/22 Page 14 of 14

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