Information — United States v. VanScoyk and Fiedler, No. 4:20-cr-02736-JCH-BGM (District of Arizona)

Summary

Information in United States of America v. Austin VanScoyk and Sam Fiedler, Case 4:20-cr-02736-JCH-BGM, in the U.S. District Court for the District of Arizona, Document 5 filed 12/03/20, charging a violation of 18 U.S.C. § 371, Conspiracy to Commit Wire Fraud (Felony). The Background section states that VanScoyk submitted Paycheck Protection Program loan applications on behalf of Bright Edge LLC and Aston Homes LLC, and that Fiedler, described as an accountant for Bright Edge, submitted applications on behalf of Yellow Turtle Shell LLC and Aston Homes. It describes the SBA, the CARES Act and the PPP, including the authorization of up to $349 billion in forgivable loans, and begins describing the participating financial institutions.

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MICHAEL BAILEY

United States Attorney

District of Arizona

Jane L. Westby

Assistant U.S. Attorney

State Bar No. 017550

United States Courthouse

405 W. Congress Street, Suite 4800
Tucson, Arizona 85701
Telephone: 520-620-7300
Email: jane.westby@usdoj.gov

Daniel Kahn

Acting Chief, Fraud Section

Criminal Division, U.S. Department of Justice
SIJI MOORE

Trial Attorney

1400 New York Ave NW

Washington, D.C. 20530

Telephone: (202) 305-0756

Email: Babasijibomi.moore2@usdoj.gov

Attorneys for the United States

Case 4:20-cr-02736-JCH-BGM Document5 Filed 12/03/20 Page 1 of 8

L.

"FILED _____ LODGED

RECEIVED COPY

BEC ~3 2020

CLERK 1 S DISTRICT COURT

DISTAICT OF ARIZONA

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA

United States of America,
Plaintiff,
vs.
Austin VanScoyk,
Sam Fiedler,
Defendants.

Ay wa DEPUTY
20- d0- 0x4 3G Wic#)(BE”
INFORMATION
Violation:
18 U.S.C. § 371

Conspiracy to Commit Wire Fraud

(Felony)

=

)

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Case 4:20-cr-02736-JCH-BGM Document5 Filed 12/03/20 Page 2 of 8

THE UNITED STATES CHARGES:
Background
At times relevant to this Information:

The Defendants and Co-Conspirators

l. AUSTIN VANSCOYK (“VANSCOYK’”) was an individual residing in
Arizona who claimed ownership of Bright Edge LLC (“Bright Edge”) and Aston Homes
LLC (“Aston Homes”), Arizona limited liability corporations. VWANSCOYK submitted
Paycheck Protection Program (“PPP”) loan applications on behalf of Bright Edge and Aston
Homes.

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

3. Individual | was an individual residing in Arizona who claimed
ownership of Aston Homes. Person | was married to VANSCOYK.

4. Individual 2 was an individual residing in Arizona who claimed
ownership of Grand American Homes (“Grand American”), Bright Edge, and Aston Homes,
Arizona limited liability corporations. Individual 2 was the applicant for the Grand
American PPP loan application.

The Small Business Administration

5. 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 businesses and by assisting in the economic

recovery of communities after disasters.

United States of America v. VanScoyk
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Case 4:20-cr-02736-JCH-BGM Document 5 Filed 12/03/20 Page 3 of 8

6. As part of this effort, the SBA enabled and provided for loans through banks,
credit unions, and other lenders. These loans have government-backed guarantees.

The Paycheck Protection Program

7. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal
law enacted in or around March 2020 and designed to provide emergency financial assistance to
the millions of Americans who are suffering the economic effects caused by the COVID-19
pandemic.

8. One source of relief that the CARES Act provided for was the authorization of up
to $349 billion in forgivable loans to small businesses for payroll, mortgage interest, rent/lease,
and utilities, through a program referred to as the PPP. In April 2020, Congress authorized up to
$310 billion in additional PPP funding.

9. The PPP allows qualifying small businesses and other organizations to receive
PPP loans. Businesses must use PPP loan proceeds on payroll costs, interest on mortgages, rent,
and utilities. The PPP allowed the interest and principal on the PPP loan to be entirely forgiven
if the business spent the loan proceeds on these expense items within a designated period of time
and used a certain percentage of the PPP loan proceeds on payroll expenses.

10. The amount of a PPP loan that a small business may be entitled to receive is
determined by the number of employees employed by the business and the business’s average
monthly payroll costs.

11. 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) had

United States of America v. VanScoyk
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Case 4:20-cr-02736-JCH-BGM Document 5 Filed 12/03/20 Page 4 of 8

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 had to provide
documentation showing their payroll expenses.

12. The SBA oversees the PPP. However, individual PPP loans are issued by private,
approved lenders who receive and process PPP applications and supporting documentation, and
then make loans using the lenders’ own funds, which are 100% guaranteed by 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.

13. Financial Institution 1 was a Federal Deposit Insurance Corporation (“FDIC”)
insured financial institution headquartered in St. Petersburg, Florida. Financial Institution J
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.

14. Financial Institution 2 was a FDIC insured financial institution headquartered in
Festus, Missouri. Financial Institution 2 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.

15. Financial Institution 3 was a FDIC insured financial institution headquartered in
Oklahoma City, Oklahoma. Financial 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.

16. Financial Institution 4 was a FDIC insured financial institution headquartered in
Salt Lake City, Utah, Financial 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.

United States of America v. VanScoyk
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Overt Acts

The Fraudulent PPP Loan Applications

abetted in the submission of the following PPP loan applications:

Case 4:20-cr-02736-JCH-BGM Document5 Filed 12/03/20 Page 5 of 8

17. VANSCOYK, FIEDLER, and Individual 2 submitted, caused, or aided and

Business Application Applicant Bank Claimed Amount
Date Employees | Requested |
. Financial
Bright Edge 04/03/20 VANSCOYK Institution 1 171 $638,355
Yellow Turtle | 04/20/20 | FIEDLER ; Financial 40 $715,520
nstitution 2
Aston Homes | 04/20/20 | FIEDLER Financial 49 $844,500
Institution 2
Aston Homes | 04/20/20 | FIEDLER Financial 49 $844,500
Institution 3
Grand . Financial
American 04/27/20 Individual 2 Institution 4 36 $594,830
Aston Homes 04/27/20 | Individual 1 Financial 49 $844,510
Institution 4
we Financial
Aston Homes 04/27/20 Individual 1 Institution 4 49 $844,510

United States of America v. VanScoyk
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submitted in support of the PPP application.

18. FIEDLER submitted a falsified IRS Form 941s for 2020 for Yellow Turtle,
Aston Homes, and Grand American. IRS records show that Yellow Turtle, Aston Homes, and
Grand American did not submit forms 94] in 2020. FIEDLER submitted a 2018 Federal
Partnership Income Tax return for Bright Edge. Attached to the back of the return was a list with
the title “Bright Edge, LLC” purporting to report wages of $3,064,105.15, and an average
monthly payroll expense of $255,342.10 for 171 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. VANSCOYK and Individual 1 were aware that false documents were

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Case 4:20-cr-02736-JCH-BGM Document5 Filed 12/03/20 Page 6 of 8

19. VANSCOYK and FIEDLER submitted, caused, or aided and abetted in the
submission of fraudulent documentation that materially overstated the number of employees and
the applicable salaries of the employees at Bright Edge, Yellow Turtle, and Aston Homes.

20. VANSCOYK, FIEDLER, and Individual 2 submitted, caused, or aided and
abetted in the submission of fraudulent documentation that materially overstated the number of
employees and the applicable salaries of the employees at Grand American.

21. Each loan applications contained the following certifications:

a. The Applicant business was in operation on February 15, 2020 and had
employees for whom it paid salaries and payroll taxes or paid independent
contractors, as reported on Form(s) 1099-MISC;

b. The funds will be used to retain workers and maintain payroll or make
mortgage interest payments, lease payments, and utility payments; and

c. The information provided in the application and the information provided
in all supporting documents and forms is true and accurate in all material
respects.

22. VANSCOYK and Individual 2 attempted to conceal their fraudulent scheme
through a variety of means, including attempting to convince independent contractors to
fraudulently claim to be employees of Bright Edge and Grand American.

PPP Loan Funding and Transfers of Money

23. Based on the fraudulent and false representations and submissions made by
VANSCOYK and FIEDLER, on or about April 26, 2020, Financial Institution 1 distributed

approximately $638,300 of PPP loan funds to Bright Edge.

United States of America v. VanScoyk
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Case 4:20-cr-02736-JCH-BGM Document5 Filed 12/03/20 Page 7 of 8

24. Based on the fraudulent and false representations and submissions made by
Individual 2 and FIEDLER, on or about April 30, 2020, Financial Institution 4 distributed

approximately $594,830 of PPP loan funds to Grand American.

Conspiracy to Commit Wire Fraud — 18 U.S.C. § 371
(Defendants VANSCOYK and FIEDLER)

25. The United States re-alleges and incorporates by reference the factual allegations
contained in paragraphs 1 through 24 of this Information as if fully set forth herein.

26. From on or about March 18, 2020 through on or about August 7, 2020, the exact
dates unknown, in the District of Arizona and elsewhere, VANSCOYK, FIEDLER, and
Individual 2 did knowingly and willfully combine, conspire, confederate, agree, and have a
tacit understanding with each other and with others known and unknown to the United States to
devise and intend to devise a scheme and artifice to defraud, and to obtain money and property,
by means of materially false and fraudulent pretenses, representations, and promises, and by the
omission of material facts, well knowing and having reason to know that said pretenses were
and would be false and fraudulent when made and caused to be made and that said omissions
were and would be material, and, in so doing, caused interstate and/or foreign wire
communications to be made, in furtherance of the scheme and artifice to defraud, in violation of

Title 18, United States Code, Section 371.

Forfeiture

Upon conviction of the single count Information, VANSCOYK and FIEDLER shall
forfeit to the United States, pursuant to Title 18, United States Code, Section 982(a)(2), any
property constituting, or derived from, proceeds the person obtained directly or indirectly as the
result of such violation, including but not limited to a money judgment equal to the amount of

proceeds the Defendant obtained as a result of the offense for which the Defendant ts convicted.

United States of America v. VanScoyk
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United States of America v. VanScoyk
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Case 4:20-cr-02736-JCH-BGM Document5 Filed 12/03/20 Page 8 of 8

MICHAEL BAILEY
United States Attorney
District of Arizona

DANIEL S. KAHN
Acting Chief, Fraud Section
U.S. Department of Justice

Digitally signed by JANE

J A N E WEST Bywerr 2.03 08:51:50

xe
SII MOORE
Trial Attorney, Fraud Section

United States Department of Justice
Jane L. Westby
Assistant U.S. Attorney

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