Rocco A. Malanga — Information
Summary
An Information in United States v. Rocco A. Malanga in the U.S. District Court for the District of New Jersey, filed after the defendant waived prosecution by indictment, charging bank fraud under 18 U.S.C. § 1344(2) and a monetary transaction count under 18 U.S.C. § 1957. It alleges that from about April 2020 through about August 2020 Malanga made false statements to obtain at least approximately $1.8 million in Paycheck Protection Program loan funds through three applications for entities he owned: Cloud Accounting, Cedar Grove Transportation and Pixie Hollow. According to the Information, the applications misstated employee counts and average monthly payroll and were supported by false tax forms, and three lenders disbursed the funds. It closes with forfeiture allegations.
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- 2026-09-25
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Full text
2020R001897 I BAC
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
UNITED STATES OF AMERICA Hon.
v. Crim. No. 22-
ROCCO A. MALANGA 18 U.S.C. § 1344(2)
18 U.S.C. § 1957
INFORMATION
The defendant having waived in open court prosecution by Indictment, the
United States charges:
Count 1
(Bank Fraud)
Overview of the Scheme
1. From at least in or about April 2020 through in or about August 2020,
Defendant Rocco A. Malanga ("MALANGA") made a variety of false statements to
fraudulently obtain at least approximately $1.8 million in Paycheck Protection
Program ("PPP") loan funds meant for qualifying small businesses. MALANGA
submitted three PPP loan applications on behalf of entities that he owned, namely,
Cloud Accounting, Cedar Grove Transportation, and Pixie Hollow, as defined below.
These PPP applications contained false representations regarding the number of
employees working for each company and the average monthly payroll paid to those
purported companies. In addition, MALANGA created and submitted false tax forms
to substantiate the false number of employees claimed to be working for his
companies, as well as their average monthly payroll.
2. Based on MALANGA's false representations, three different lenders
approved and disbursed emergency relief funds totaling in excess of $ 1.8 million to
the three entities.
Relevant Individuals and Entities
3. At all times relevant to this Information:
a. MALANGA was a resident of Hackettstown, New Jersey.
b. MALANGA was associated with several corporate entities that he
used to apply for government loans, including the following:
1. Cloud Accounting LLC ("Cloud Accounting") was a New Jersey
Limited Liability Company. On or about May 15, 2020, the
business name Cloud Accounting LLC was amended to the
business name Cedar Grove Ventures LLC.
11. Cedar Grove Transportation Inc was a Florida corporation that
purported to provide trucking services.
111. Pixie Hollow LLC, d/b/a Pixie Technologies ("Pixie Hollow") was
a Florida Limited Liability Company.
c. Company 1 was a financial-technology company based in
California. Company 1 participated in the U.S. Small Business Administration's
("SBA") PPP by, among other things, acting as a service provider between small
businesses and certain lenders. A small business seeking a PPP loan could apply
through Company 1, which would review the PPP loan application. If a PPP loan
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application received by Company 1 was approved for funding, a partner lender
disbursed the loan funds to the applicant.
d. Lender 1 was a financial institution, as defined by Title 18,
United States Code, Section 20, with accounts insured by the Federal Deposit
Insurance Corporation ("FDIC"), and headquartered in Salt Lake City, Utah.
e. Lender 2 was a financial institution, as defined by Title 18,
United States Code, Section 20, with accounts insured by the FDIC, and
headquartered in Edgewater, New Jersey. MALANGA maintained bank accounts at
Lender 2.
f. Lender 3 was a financial institution, as defined by Title 18,
United States Code, Section 20, with accounts insured by the FDIC, and
headquartered in Salt Lake City, Utah.
g. Bank 1 was a financial institution, as defined by Title 18, United
States Code, Section 20, with accounts insured by the FDIC, and headquartered in
New York, New York. MALANGA maintained bank accounts at Bank 1.
The Payroll Protection Program
4. The Coronavirus Aid, Relief, and Economic Security ("CARES") Act was
a federal law enacted in or around March 2020 that was designed to provide
emergency financial assistance to the millions of Americans who were suffering the
economic effects caused by the COVID-19 pandemic. One source of relief provided by
the CARES Act was the authorization ofup to $349 billion in forgivable loans to small
businesses for job retention and certain other expenses, through a program referred
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to as the PPP. In or around April 2020, Congress authorized over $300 billion in
additional PPP funding.
5. In order to obtain a PPP loan, a qualifying business was required to
submit a PPP loan application, which was signed by an authorized representative of
the business. The PPP loan application required the business (through its authorized
representative) to acknowledge the program rules and make certain affirmative
certifications in order to be eligible to obtain the PPP loan. In the PPP loan
application, the small business (through its authorized representative) was required
to state, among other things, its: (a) average monthly payroll expenses; and (b)
number of employees. 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.
6. A PPP loan application was required to be processed by a participating
lender. If a PPP loan application was approved, the participating lender funded the
PPP loan using its own funds, 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 the applicant company
on certain permissible expenses-payroll costs, interest on mortgages, rent, and
utilities. The PPP allowed the interest and principal on the PPP loan to be entirely
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forgiven if the business spent the loan proceeds on these expense items within a
designated period of time after receiving the proceeds and used a certain amount of
the PPP loan proceeds on payroll expenses.
The Scheme
8. From at least in or about April 2020 through in or about August 2020,
in the District of New Jersey, and elsewhere, the defendant
ROCCO A. MALANGA
did knowingly execute and attempt to execute a scheme and artifice to obtain moneys,
funds, and credits owned by and under the control of one or more financial
institutions, that is: Lender 1, Lender 2, and Lender 3, the deposits of which are
insured by the Federal Deposit Insurance Corporation and whose accounts are
insured by the National Credit Union Share Insurance Fund, by means of materially
false and fraudulent pretenses, representations, and promises, as set forth below.
The Goal of the Scheme
9. The goal of the scheme was for MALANGA to enrich himself by
fraudulently obtaining approximately $1.8 million in PPP loan funds from various
lenders.
Manner and Means of the Scheme
10. It was part of the scheme that:
a. On or about April 27, 2020, MALANGA submitted a PPP loan
application on behalf of Cloud Accounting to Lender 3, through Company 1, seeking
a PPP loan in the amount of approximately $564,632 ("Application-1"). Application-
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1 was submitted in MALANGA's name and listed MALANGA as the owner of Cloud
Accounting. The application and supporting documentation contained materially
false and fraudulent information, including false employee and payroll information, ·
and falsified tax documents.
b. On or about June 3, 2020, MALANGA submitted a PPP loan
application on behalf of Cedar Grove Transportation Inc to Lender 1 seeking a PPP
loan in the amount of approximately $441,260 ("Application-2"). Application-2 was
submitted in MALANGA's name and listed MALANGA as the owner of Cedar Grove
Transportation Inc. The application and supporting documentation contained
materially false and fraudulent information, including false employee and payroll
information, and falsified tax documents.
c. On or about August 3, 2020, MALANGA submitted a PPP loan
application on behalf of Pixie Hollow to Lender 2 seeking a PPP loan in the amount
of approximately $810,294 ("Application-3"). Application-3 was submitted in
MALANGA's name and listed MALANGA as the owner of Pixie Hollow. The
application and supporting documentation contained materially false and fraudulent
information, including false employee and payroll information, and falsified tax
documents.
d. MALANGA's fraudulent loan applications induced Lender 1,
Lender 2, and Lender 3, respectively, to disburse approximately $1.8 million in PPP
loan funds to the three entities owned by MALANGA.
All in violation of Title 18, United States Code, Section 1344(2).
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Count 2
(Money Laundering)
1. The allegations in Paragraphs 1 to 7 and 9 to 10 of Count 1 are repeated
as though realleged here.
2. On or about August 21, 2020, m the District of New Jersey, and
elsewhere, the defendant,
ROCCO A. MALANGA
did knowingly engage and attempt to engage in a monetary transaction by, through,
and to a financial institution, affecting interstate and foreign commerce, in criminally
derived property of a greater value than $10,000, that is, the transfer of
approximately $275,000 of U.S. currency from an account in the name of Pixie Hollow
LLC at Lender 2 to an account in the name of Cedar Grove Ventures LLC at Bank 1,
such property having been derived from specified unlawful activity, that is, bank
fraud, in violation of Title 18, United States Code, Section 1344(2).
In violation of Title 18, United States Code, Section 1957.
FORFEITURE ALLEGATION
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1. As a result of committing the offense charged in Count 1 of this
Information, defendant ROCCO A. MALANGA shall forfeit to the United States,
pursuant to Title 18, United States Code, Section 982(a)(2)(A), any property, real or
personal, constituting, or derived from, proceeds obtained directly or indirectly as a
result of the offenses charged in Count 1 of this Information, the value of which
totaled approximately $1,816,096, and which includes, but is not limited to, the
following properties (collectively, the "Specific Properties"):
a. The contents of an account at JP Morgan Chase - 9 7 5 9 in
the name of Cloud Accounting, LLC; Cloud Accounting, LLC, d/b/a
Cedar Grove Transportation; as well as Cedar Grove Ventures LLC,
d/b/a Cedar Grove Group;
b. The contents of an account at Mariner's Bank -7427 in the
name of Pixie Hollow LLC:
c. The contents of an account at JP Morgan Chase-2515 in
the name of Cedar Grove Ventures LLC, d/b/a Cedar Grove Group;
d. The contents of an account at JP Morgan Chase - 6 8 6 0 in
the name of Cedar Grove Ventures LLC, d/b/a Cedar Grove Group;
e. The contents of an account up to the amount of $42,500 at JP Morgan
Chase -7680 in the name of Cedar Grove Trees LLC;
f. The contents of an account at Mariner's Bank - 7 4 3 5 in the
name of Pixie Hollow LLC;
g. The contents of an account at JP Morgan Chase - 0 0 3 6 in
the name of Rocco and Jennifer Malanga;
h. The contents of an account at JP Morgan Chase-9951 in
the name of Rocco and Jennifer Malanga;
i. The contents of an account at JP Morgan Chase - 8 9 3 5 in
the name of Jennifer Malanga;
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j. The contents of an account at Mariner's Bank - 8 5 8 1 in
the name of Jennifer Malanga;
k. The contents of an account at Mariner's Bank-7443 in
the name of Rocco A. Malanga;
1. The contents of an account up to the amount of $26,400 at JP
Morgan Chase - 8 6 6 8 in the name of N.M., by Jennifer Malanga
NJUTMA; and,
m. The contents of an account up to the amount of $25,450 at JP
Morgan Chase - 8 6 5 0 in the name of A.M., by Jennifer Malanga
NJUTMA.
2. As a result of committing the money laundering offense charged in
Count 2 of this Information, defendant ROCCO A. MALANGA shall forfeit to the
United States, pursuant to Title 18, United States Code, Section 982(a)(l), all
property, real or personal, involved in such money laundering offense, and all
property traceable to such property, including but not limited to the Specific
Properties.
Substitute Asset Provision
(Applicable to All Forfeiture Allegations)
3. 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,
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it is the intent of the United States, pursuant to Title 21, United States Code, Section
853(p), as incorporated by Title 18, United States Code, Section 982(a)(l) and Title
28, United States Code, Section 2461(c), to seek forfeiture of any other property of
such defendant up to the value of the forfeitable property described above.
P&.«Ldili--
United States Attorney
~~S.3~6(2.,1,,
~SEPHS.BEEMSTERBOER
Acting Chief, Fraud Section
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