Criminal Complaint — United States v. Jonathan VanScoyk (District of Arizona)

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A Criminal Complaint in United States of America v. Jonathan VanScoyk, Case 4:20-mj-09042-N/A-LCK, Document 1, filed 12/10/20, in the District of Arizona. The statement of facts alleges in Count One, Conspiracy under 18 U.S.C. § 1349, that from on or about March 18, 2020 through on or about August 7, 2020 the defendant conspired with Austin VanScoyk, Sam Fiedler and others to defraud a financial institution through false Paycheck Protection Program loan materials. It alleges that lenders issued a $638,300 PPP loan to Bright Edge LLC and a $594,830 PPP loan to Grand American Homes LLC. Count Two alleges bank fraud under 18 U.S.C. § 1344 and aiding and abetting under 18 U.S.C. § 2 on or about April 29, 2020.

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Case 4:20-mj-09042-N/A-LCK Document1 Filed 12/10/20 Page 1of5

CRIMINAL COMPLAINT
United States District Court — DISTRICT of ARIZONA
United States of America DOCKET NO.

v.
Jonathan VanScoyk

MAGISTRATE'S CASE NO,

Complaint for violation of Title 18, United States Code § 1344,1349, and 2

COMPLAINANT'S STATEMENT OF FACTS CONSTITUTING THE OFFENSE OR VIOLATION:
COUNT ONE
Conspiracy ~ 18 U.S.C, § 1349

From on or about March 18, 2020 through on or about August 7, 2020, the exact dates unknown, i in the District of|
Arizona and elsewhere, the Defendam, JONATHAN VANSCOYK, did knowingly and willfully combine, conspire,
confederate, agree, and have a tacit understanding with Austin VanScoyk, Sam FiedJer, and others known and unknown to the
United States to execute a scheme and arfifice to defraud a financial institution, the deposits of which were insured by the FDIC
(“Federal Deposit Insurance Corporation”), and to obtain money, funds, and credits owned by and under the custody and control
of the aforementioned financial institution by means of materially false and fraudulent pretenses, representations, and promises
and by omission of material facts, in violation of Title 18, United States Code, Section 1344.

Purpose of the Scheme to Defraud

The purpose of the scheme was for defendant to unjustly enrich himself by obtaining Paycheck Protection Program
("PPP") loan proceeds under false and misleading pretenses, including by making false statements about the number of
employees at the businesses that applied for PPP loans, and the intended use of the loan proceeds,

Manner and Means
Defendant, together with others known and unknown to the United States, conspired to submit false materials, such as
a false PPP loan application, false IRS Form 941s, and false payroll documentation, to financial institutions to obtain PPP loan
funding. As a result of and based on defendant and his co-conspirators’ false representations, certifications, and supporting
documents, federally insured lenders issued a $638,300 PPP loan to Bright Edge LLC (“Bright Edge”), an entity controlled by
Austin VanScoyk, and a $594,830 PPP loan to Grand American Homes LLC (“Grand American”), an entity controlled by the
defendant, Jonathan VanScoyk. ;
All in violation of Title 18, United States Code, Section 1349,
COUNT TWO
Bank Fraud —-18 U.S.C. § 1344
Aiding and Abetting Bank Fraud — 18 U.S.C. § 2

On or about April 29, 2020, in the District of Arizona and elsewhere. the Defendant, JONATHAN VANSCOYK, did
knowingly, and with intent to defraud, execute, and attempt to execute, and cause the execution of, 2 scheme and artifice to
defraud a federally insured financial institution, which scheme and artifice employed a material falsehood, and did knowingly,
and with intent to defraud, execute, and attempt to execute, and cause the execution of a scheme and artifice to obtain moneys
and funds owned by, and under tha custody and control of a financial institution, by means of false and fraudulent pretenses,
representations, and promises relating to a material fact, that is, by causing Financial Institution 4 (“Institution 4"), a FDIC
insured financial institution headquartered in Salt Lake City, Utah, to deposit $594,830 into an account in the name of Grand
American that was controlled by the defendant, in violation of Title 18, United States Code, Sections 1344 and 2.

BASIS OF COMPLAINANT'S CHARGE AGAINST THE ACCUSED:
Complainant, Wayne K. Schaltenbrand, as and for probable cause, states the following:

lama Special Agent with the Federal Bureau of Investigation ("FBI") and have been since April 2003, I am currently assigned
to the FBI Sierra Vista Resident Agency, Sierra Vista. Arizona, and a member of the Cochise Border Corruption Task Force.
To become an FBI SA, | attended seventeen (17) weeks of training at the FBI Academy in Quantico, Virginia where I was

trained to investigate violations of United States laws, to collect evidence in cases in which the United States is, or may be. a
| party in interest, and to perform other duties imposed by law as well as other specialized federal law enforcement training.
(Continued)

DETENTION REQUESTED SIGNATURE OF COMPLAINANT
COMPLAINT REVIEWED by AUSA Jane Westby St JK. ef flow Cte

Being duly sworn, I declare that the foregoing is

true and carreci to the best af my knowledge. OFFICIAL TITLE & NAME:

Wayne Schaltenbrand, Special Agent, FB!

Signed by the enmniajnant and «~om to before me telephonically.

SIGNATURATT Fe Ne ryt Geng2 DATE
Pon LA. Dern December 10, 2020

See Federal rales of Crimlual Preeedure Rules 3 and <i

CG: ysmM(z), AUSA, PTS

Case 4:20-mj-09042-N/A-LCK Document1 Filed 12/10/20 Page 2 of 5

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1 have investigated violations of federal statutes governing various types of white-collar crime,
including wire fraud, bank fraud, and money laundering, .

I am familiar with, and have participated in, the normal methods of investigation, including, but not
limited to, visual surveillance, conducting interviews, drafting and executing seizure warrants, executing
search and arrest warrants, and conducting consensually monitored audio and video recordings

The following information is based upon, among other things, my review of records and documents
obtained during the course of this investigation, information conveyed by other employees or agents of the
FBI, agents of the Office of Inspector General of the United States Smal] Business Administration (“SBA”),
U.S. Treasury Inspector General for Tax Administration (“TIGTA"), and witnesses, to me orally or via
written communication, and my experience and background as an FBI SA.

INTRODUCTION

There is prohable cause to believe JONATHAN VANSCOYK (“WANSCOYK”), through his
corporate entity Grand American, submitted false and fraudulent applications to obtain loans through the
PPP guaranteed by the SBA, Based on the false and fraudulent applications, VANSCOYK successfully
obtained a PPP loan of $594,830. As set forth below, there is probable cause to believe that the PPP loans
were obtained based on false and fraudulent information about the number of employees and the gross
payroll expenses of the business, information that was provided by VANSCOYK and his co-conspirators.

The Paycheck Protection Program

The Coronavirus Aid, Relief, and Economic Security (*CARES”) Act is a federal law enacted in
or around March 2020 and is designed to provide emergency financial assistance to the millions of
Americans who are suffering the economic effects caused by the COVID-19 pandemic. 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, through the PPP, In or around April 2020, Congress
authorized over $300 billion in additional PPP funding.

In order to obtain a PPP Ioan, a qualifying business must submit a PPP loan application, which is
signed by an authorized representative of the business, The PPP loan application requires 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 smal! business
(through its authorized representative) must state, among other things, its: (a) average monthly payroll
expenses; and (b) number of employees. These figures are used to calculate the amount of money the small
business is eligible to receive under the PPP. In addition, businesses applying for a PPP loan must provide
documentation showing their payroll expenses.

A participating financial institution (the lender) must process a PPP loan application, If the lender
approves 4 PPP loan application, it funds the PPP foan using its own monies, which the SBA guarantees
100%, The lender transmits to the SBA, in the course of processing the loan, data from the application,
including information about the borrower, the total amount of the loan. and the listed number of employees.
The SBA oversees the PPP, which has authority over all loans, To date, over 5,000 lending institutions.
mostly banks and credit unions, have participated in the PPP.

The business receiving the PPP loan proceeds must spend the funds on certain permissible
expenses: payroll costs. interest on mortgages, rent, and utilities. The PPP allows the interest and principal
on the PPP {oan to be entirely forgiven if the business spends the loan proceeds on these expense items
within a designated period of time and uses a specified portion of the PPP loan proceeds on payroll
expenses,

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Background of VANSCOYK and Co-conspirators

VANSCOYK was an individual residing in Arizona who claimed partial ownership of Grand
American, Bright Edge, and Aston Homes LLC (‘Aston Homes”), Arizona limited liability corporations.
VANSCOYK was the applicant for a PPP loan application on behalf of Grand American.

Austin VanScoyk was an individual residing in Arizona who claimed ownership of Bright Edge
and Aston Homes, Arizona limited liability corporations. Austin VanScoyk submitted PPP Joan
applications on behalf of Bright Edge and Aston Homes,

Sam Fiedler was an individual residing in Arizona who was an accountant for Bright Edge. Sam
Fiedler submitted PPP loan applications on behalf of Yellow Turtle Shell LLC (“Yellow Turtle") and Aston
Homes.

Individual | was an individual residing in Arizona who claimed partial ownership of Aston Homes.
Individual! | was married to Austin VanScoyk.

Individual 2 was an individual residing in Arizona who served as the Statutory Agent for Grand
American, Bright Edge, and Aston Homes.

Overview of the Scheme

VANSCOY K and his co-conspirators submitted fraudulent applications submitted in the names of
companies they controlled to lenders approved by the SBA. VANSCOYK and his co-conspirators sought
more than $2.5 million in PPP funds, purportedly for the purpose of paying employees. Those purported
employees either were not actual employees or eamed a fraction of what VANSCOYK and his co-
Corispirators claimed in the PPP applications. Collectively, VANSCOYK and his co-conspirators falsely
claimed the companies they controlled paid millions of dollars in payroll in the first quarter of 2020. State
and bank records, however, show little to no payroll expense during this period. The lenders approved two
applications and paid $1 ,233,130.00 in PPP loans,

The Lending Institutions and Banks

Financial Institution | (“Institution 1") was a FDIC insured financial institution headquartered in
St. Petersburg, Florida. Institution 1 participated in the SBA‘s PPP as a lender, and as such, was authorized
to lend funds to eligible borrowers under the terms of the PPP.

Financial Institution 2 (‘Institution 2") was a FDIC insured financial institution headquartered in
Festus, Missouri. Institution 2 participated in the SBA's PPP as a ender, and as such, was authorized to
lend funds to eligible borrowers under the terms of the PPP.

Financial Institution 3 (“Institution 3") was a FDIC insured financial institution headquartered in
Oklahoma City, Oklahoma, Institution 3 participated in the SBA's PPP as a lender, and as such, Was
authorized to lend funds to eligible borrowers under the terms of the PPP.

Institution 4 participated in the SBA’s PPP as a lender, and as such, was authorized to lend funds
to eligible borrowers under the terms of the PPP.

Bank | (“Bank |”) was a FDIC insured financial institution headquartered in New York, New
York. In Noveinber 2019, VANSCOYK opened a bank account at Bank ! on behalf of Grand American
(“Account 2133”),

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Fraudulent PPP Loan Applications

Case 4:20-mj-09042-N/A-LCK Document1 Filed 12/10/20 Page 4of5

VANSCOYK and his co-conspirators submitted the following PPP loan applications:

Business ‘Application | Applicant | Bank Amount
Date Requested
Bright Edge | 04/03/20 Vanseoyk Institution 1 $638,355
Yellow Turtle | 04/20/20 Sam Fiedler Institution 2 $715,520
Aston Homes =| 04/20/20 Sam Fiedler Institution 2 $844,500
Aston Homes | 04/20/20 Sam Fiedler Institution 3 $844,500
een an 04/27/20 VANSCOYK | Institution 4 $594,830
Aston Homes =| 04/27/20 Individual 1 Institution 4 $844,510
Aston Homes | 04/27/20 Individual | Institution 4 $844,510

False Statements on PPP Applications

VANSCOYK and his co-conspirators made a number of false representations and submitted
several documents in support of the Bright Edge, Yellow Turtle, Aston Homes, and Grand American PPP
loan applications. A review of the submitted documents, records obtained from the IRS, and information
derived through interviews, demonstrates that documents provided to the financial institutions in support
of the PPP loan application were falsified and/or included false statements about Bright Edge, Yellow
Turtle, Aston Homes, and Grand American.

For the Bright Edge applicatlon VANSCOYK and his co-conspirators submitted a 2018 Federat
Partnership Income Tax return. Attached to the back of the return was a list with the title “Bright Edge,
LLC" purporting to report wages of $3,064,105.!5, and an average monthly payroll expense of $255,342.10
for 17] employees. According to IRS records, Bright Edge filed an IRS Form 941 for the fourth quarter of
2018 reporting total wages of $98,000 for seven employees. No additional IRS Forms 941 were filed for
2018. Additionally, Individual 2, the Statutory Agent for Bright Edge from December 32, 2018 until he
was terminated on June 11,2020, was interviewed on July 9, 2020. According to Individual 2, Bright Edge
had approximately seven employees.

For the Yellow Turtle application VANSCOYK and his co-conspirators submitted an IRS Form
941, purporting to report wages and federal payroll tax information for Yellow Turtle for the first quarter
of 2020. According to the form, Yellow Turtle claimed to have 40 employees in the first quarter and paid
wages, tips and total compensation totaling $572.416, According to IRS records, there have been no tax
returns filed for the business, to include IRS Forms 941.

For the Aston Homes applications VANSCOYK and his co-conspirators submitted an IRS Form

94], purporting to report Wages and federal payroll tax information for Aston Homes for the tirst quarter
of 2020, According to the form, Aston Homes claimed to have 49 employees in the first quarter and paid

' wages, tips and total compensation totaling $675,609.60. According to IRS records, there have been no tax
returns filed for the business, to include IRS Forms 941. Additionally, Individual 2, the Statutory Agent

Case 4:26=m7j-69642-N/A-LEK-Bocument 1 Filed 12/10/20 Page 5of5

20-0904 2mJ

for Aston Homes from August 28, 2018 until he was terminated on June 11, 2020, was interviewed on July
9, 2020. According to Individual 2, Aston Homes did not have any employees, demonstrating that any
document purporting to reflect a payroll for Aston Homes would be fraudulent,

For the Grand American application VANSCOYK and his co-conspirator submitted an IRS Form
941, purporting to report wages and federal payroll tax information for Grand American for the first quarter
of 2020. According to the form, Grand American claimed to have 36 employees jn the first quarter and
paid wages. tips and total compensation totaling $475,865.60. According to IRS records, there have been
no tax returns filed for the business, to include IRS Forms 941. Additionally, Individua] 2, the Statutory
Agent for Grand American from September 17, 2018 until he was terminated on June 11, 2020, was
interviewed on July 9, 2020. Individual 2 was shown the payroll details document purported to list payroll
employees for Grand American. According to Individual 2, Grand American did not have any employees,
demonstrating that ariy document purporting to reflect a payroll for Grand American would be fraudulent.

The Grand American PPP loan application lists VANSCOYK as the sole owner of Grand
American. The application identified VANSCOYK as the “Primary Contact” for Grand American and
having 100% ownership. On April 28, 2020, VANSCOYK signed a Promissory Note in support of the
Grand American PPP loan application that he electronically signed using IP Address 206.128.79.95.

VANSCOYK was interviewed by FBI agents on September 11,2020. During the interview
VANSCOYK stated that Sam Fiedler and Austin VanScoyk submitted the initial applications for Grand
American, but he "signed off” on the Grand American PPP Joan application, When VANSCOYK was
asked why they submitted loan applications for multiple related entities, VANSCOYX stated that they
were trying to “grab more money.” When asked what they intended to use the PPP loan proceeds for,
VANSCOYK stated they wanted to “reboot” the business.

According to Institution 4's records, the PPP loan for Grand American was approved and
disbursed. Records from Bank | show the PPP loan proceeds of $594,830 were received in Account
ending in 2133 on or about April 29, 2020. According to Institution 1’s records, the PPP ioan for Aston
Homes was approved and disbursed. Records from Bank | show the PPP loan proceeds of $638,300 were
received in Account ending in 3551 on or about Aprif 27, 2020. VANSCOYK attempted to conceal his
fraudulent scheme through a variety of means, including attempting to convince an independent
contractor to fraudulently clalm to be an employee of Grand American.

Based on my training and experience, and the information provided in this affidavit, |
respectfully submit that there is probable cause to believe that VANSCOYVK committed violations of 18
U.S.C. § 1349 (Conspiracy to Commit Bank Fraud) and 18 U.S.C. § 1344 and 2 (Bank Fraud and Aiding
and Abetting Bank Fraud),

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