United States v. Elijah Buoi — Wire Fraud, District of Massachusetts (Case 1:20-cr-10130-FDS)

Summary

An Indictment, Document 29, filed in the U.S. District Court for the District of Massachusetts on July 14, 2020, case number 20cr10130, against Elijah Buoi. The caption lists Counts One-Four, Wire Fraud (18 U.S.C. § 1343), Count Five, False Statements to a Financial Institution (18 U.S.C. § 1014), and forfeiture allegations. The general allegations state that Buoi was President and CEO of Sosuda Tech, LLC, a Massachusetts company registered on or about May 1, 2019, and describe the roles of Bank of America, Lendio, Fundbox and Newtek in the Paycheck Protection Program and of the SBA.

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Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 1 of 14

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

imi _ 20cr101
UNITED STATES OF AMERICA Caimnal Ne. 20cr10130

Violations:
Vv.

Counts One-Four: Wire Fraud
(18 U.S.C. § 1343)

ELIJAH BUOI,
Defendant Count Five: False Statements to a Financial

Institution
(18 U.S.C. § 1014)

Wire Fraud Forfeiture Allegation:
(18 U.S.C. § 981(a)(1)(C) and

28 U.S.C. § 2461)

False Statement Forfeiture Allegation:
(18 U.S.C. § 982(a)(2)(A))

mee ee ee SS Se aS ae

INDICTMENT

At all times relevant to this Indictment:

General Allegations

A. Relevant Individuals and Entities

1. The defendant, ELITAH BUOI (“BUOI”’), was a resident of Winchester,
Massachusetts. BUOI was the President and CEO of Sosuda Tech, LLC (“Sosuda”).

2. | Sosuda was a Massachusetts company that was registered with the Massachusetts
Secretary of State on or about May 1, 2019. The company was initially registered under the name
South Sudanese American Technologies, LLC. On or about May 15, 2019, the name was changed
from South Sudanese American Technologies, LLC to Sosuda. Sosuda advertised that it provided

various technology services to businesses.
Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 2 of 14

3. Bank of America, N.A. (“Bank of America”) was a federally insured financial
institution based in Charlotte, North Carolina with branches throughout the United States. Bank
of America participated as a lender in a program referred to as the Paycheck Protection Program
(“PPP”) operated by the United States Small Business Administration (“SBA”). As a PPP lender,
Bank of America was authorized to lend funds to eligible borrowers under the terms of the PPP.

4.  Sosuda maintained an account at Bank of America. BUOI was the sole signatory on
that account.

5. Wells Fargo Bank (“Wells Fargo”) was a federally insured financial institution based
in Sioux Falls, South Dakota with branches throughout the United States.

6.  Lendio, Inc. (“Lendio”) was a company that specialized in facilitating small-business
lending. Lendio was headquartered in Lehi, Utah. Lendio participated in the PPP by, among
other things, matching small businesses seeking PPP loans with authorized lenders. The
authorized lenders, not Lendio, decided whether to approve the PPP loan applications and if
approved, financed the PPP loans.

7. Fundbox, Inc. (“Fundbox”) was a financial technology company based in San
Francisco, California. Fundbox participated in the PPP as a lender and, as such, was authorized to
lend funds to eligible borrowers under the terms of the PPP. Fundbox maintained a bank account
at Wells Fargo.

8. | Newtek Small Business Finance, LLC (“Newtek”), which is owned by Newtek
Business Services Corp, was a non-bank lender based in Lake Success, New York. Newtek
participated in the PPP as a lender and, as such, was authorized to lend funds to eligible borrowers

under the terms of the PPP.
Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 3 of 14

9. The 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. 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.

B. The Paycheck Protection Program

10. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal
law enacted in 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. One
source of relief provided by the CARES Act was the authorization of forgivable loans to small
businesses for job retention and certain other expenses, through the PPP.

11. 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; (b) number of
employees; and (c) whether the United States is the principal place of residence for all employees
included in the applicant’s payroll calculation. 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.

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12. A PPP loan application was processed by a participating lender. If a PPP loan
application was approved, the participating lender funded the PPP loan using its own monies,
which were 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.

13. PPP loan proceeds were required to be used on certain permissible expenses,
including payroll costs, mortgage interest, rent, and utilities. Under the applicable PPP rules and
guidance, the interest and principal on the PPP loan is eligible for forgiveness if the business spent
the loan proceeds on these expense items within a designated period of time and used a certain
portion of the loan towards payroll expenses.

Scheme to Defraud

14. Beginning in or around April 2020, and continuing until at least in or around June
2020, in the District of Massachusetts and elsewhere, BUOI devised a scheme to defraud, and to
obtain PPP funds, by filing false and fraudulent PPP loan applications with participants in the PPP
program, including Bank of America, Lendio, Fundbox, and Newtek.

15. The purpose of the scheme was for BUOI to obtain PPP loan proceeds under false
and misleading pretenses, including false statements about the number of Sosuda employees, the
location of Sosuda’s employees, the average monthly expenses associated with payroll for
Sosuda’s employees, and false documents and forms submitted in support of PPP loan

applications.
Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 5 of 14

A. The Bank of America PPP Loan Application

16. In furtherance of the scheme, on or about April 21, 2020, BUOI submitted a false
and misleading PPP loan application to Bank of America in the name of Sosuda seeking
approximately $7,500,000 in PPP loan funds (the “Bank of America PPP Application”). BUOI
signed the Bank of America PPP Loan Application and certified that the application and the
information provided in all supporting documents and forms was true and accurate.

17. The Bank of America PPP Loan Application falsely stated that Sosuda’s average
monthly payroll was $3 million and that the company had 353 employees. BUOI certified that the
United States was the principal place of residence for those employees. In addition, BUOI
submitted with the Bank of America PPP Loan Application what purported to be Employer’s
Quarterly Federal Tax Returns (“IRS Form 941”) for Sosuda for the first quarter of 2020. On the
purported IRS Form 941, BUOI falsely claimed that Sosuda had 353 employees and paid
$9,498,987 in wages, tips, and other compensation during that period.

18. BUOI also submitted a falsified IRS Form 940, an Employer’s Annual Federal
Unemployment Return, purporting to show Sosuda’s total payments to employees for 2019.
According to the IRS Form 940, Sosuda made $34,800,000 in payments to employees in 2019 and
did not have employees in any other state except Massachusetts.

19. The Bank of America PPP Loan Application was denied.

B. The Lendio PPP Loan Application

20. Onor about May 21, 2020, BUOI submitted a false and misleading PPP application
to Lendio in the name of Sosuda seeking approximately $2,000,000 in PPP funds (the “Lendio
PPP Loan Application”), BUOI signed the Lendio PPP Loan Application and certified that the

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Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 6 of 14

application and the information provided in all supporting documents and forms was true and
accurate.

21. The Lendio PPP Loan Application falsely stated that Sosuda’s average monthly
payroll was $150,000 and that the company had 18 employees. BUOI certified that the United
States was the principal place of residence for those employees. In addition, BUOI submitted with
the Lendio PPP Loan Application a purported IRS Form 941 for Sosuda for the first quarter of
2020. On the IRS Form 941, BUOI falsely claimed that Sosuda had 18 employees and paid
$450,000 in wages, tips, and other compensation during that period.

22. BUOlI also submitted a falsified IRS Form 940 purporting to show Sosuda’s wages
and federal payroll tax information for 2019. According to the IRS Form 940, Sosuda made
$1,800,000 in payments to employees in 2019 and did not have employees in any other state except
Massachusetts.

23. The Lendio PPP Loan Application was provided to an authorized SBA lender, which
ultimately denied the application.

C, The Fundbox PPP Loan Application

24. On or about June 7, 2020, BUOI submitted a false and misleading PPP application
to Fundbox in the name of Sosuda seeking approximately $2,000,000 in PPP funds (the “Fundbox
PPP Loan Application”), BUOI signed the Fundbox PPP Loan Application, and certified that the
application and the information provided in all supporting documents and forms was true and
accurate.

25. The Fundbox PPP Loan Application falsely stated that Sosuda’s average monthly
payroll was $800,000 and that the company had 96 employees. BUOI certified that the United

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Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 7 of 14

States was the principal place of residence for those employees. In addition, BUOI submitted with
the Fundbox PPP Loan Application a purported IRS Form 941 for Sosuda for the first quarter of
2020. On the IRS Form 941, BUOI falsely claimed that Sosuda had 96 employees and paid
$2,400,000 in wages, tips, and other compensation during that period.

26. BUOl also submitted a falsified IRS Form 940 purporting to show Sosuda’s wages
and federal payroll tax information for 2019. According to the IRS Form 940, Sosuda made
$9,600,000 in payments to employees in 2019 and did not have employees in any other state except
Massachusetts.

27. The Fundbox PPP Loan Application was approved. On or about June 15, 2020,
Fundbox distributed approximately $2,000,000 in PPP loan funds to BUOI via a wire transfer in
interstate commerce from Fundbox’s bank account at Wells Fargo to Sosuda’s bank account at
Bank of America.

D. The Newtek PPP Loan Application

28. Onor about June 9, 2020, BUOI submitted a false and misleading PPP application
to Newtek in the name of Sosuda seeking approximately $2,000,000 in PPP funds (the “Newtek
PPP Loan Application”). BUOI signed the Newtek PPP Loan Application, and certified that the
application and the information provided in all supporting documents and forms was true and
accurate.

29. The Newtek PPP Loan Application falsely stated that Sosuda’s average monthly
payroll was $800,000 and that the company had 96 employees. BUOI certified that the United
States was the principal place of residence for those employees. In addition, BUOI submitted with
the Newtek PPP Loan Application a purported IRS Form 941 for Sosuda for the first quarter of

7
Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 8 of 14

2020. On the IRS Form 941, BUOI falsely claimed that Sosuda had 96 employees and paid
$2,400,000 in wages, tips, and other compensation during that period.

30. BUOI also submitted a falsified IRS Form 940 purporting to show Sosuda’s wages
and federal payroll tax information for 2019. According to the IRS Form 940, Sosuda made
$9,600,000 in payments to employees in 2019 and did not have employees in any other state except
Massachusetts.

31. The Newtek PPP Loan Application was denied.
The Grand Jury charges:

Bie

Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 9 of 14

Indictment.

33.

the defendant,

COUNTS ONE - FOUR
Wire Fraud
(18 U.S.C. § 1343)

The Grand Jury re-alleges and incorporates by reference paragraphs 1-31 of this

On or about the dates set forth below, in the District of Massachusetts and elsewhere,

ELIJAH BUOI,

having devised and intending to devise a scheme and artifice to defraud, and for obtaining money

and property by means of materially false and fraudulent pretenses, representations, and promises,

did transmit and cause to be transmitted by means of wire communications in interstate and foreign

commerce, writings, signs, signals, pictures, and sounds for the purpose of executing the scheme

to defraud, as set forth below:

Count

Approximate Date

Description

1

May 21, 2020

The Lendio PPP Loan Application electronically submitted
by Elijah Buoi, in Massachusetts, and routed interstate
through Lendio’s servers outside of Massachusetts.

June 7, 2020

The Fundbox PPP Loan Application electronically submitted
by Elijah Buoi, in Massachusetts, and routed interstate
through Fundbox’s servers outside of Massachusetts.

June 9, 2020

The Newtek PPP Loan Application electronically submitted
by Elijah Buoi, in Massachusetts, and routed interstate
through Newtek’s servers outside of Massachusetts.

June 15, 2020

Wire transfer of $2,000,000 from Fundbox’s account at
Wells Fargo to Sosuda’s account at Bank of America.

All in violation of Title 18, United State Code, Section 1343.
Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 10 of 14

COUNT FIVE
False Statements to a Financial Institution
(18 U.S.C. § 1014)

The Grand Jury further charges:

34. The Grand Jury re-alleges and incorporates by reference paragraphs 1-31 of this
Indictment.

35. On or about April 21, 2020, in the District of Massachusetts and elsewhere, the
defendant,

ELIJAH BUOI,

knowingly made a false statement and report for the purpose of influencing in any way the actions
of Bank of America, an institution the accounts of which are insured by the Federal Deposit
Insurance Corporation (“FDIC”), upon any loan, as follows: in the Bank of America PPP Loan
Application, BUOI falsely represented that Sosuda had 353 employees, falsely represented that
Sosuda’s average monthly payroll was $3 million, and in support of the loan application, BUOI
submitted falsified IRS Forms 940 and 941.

All in violation of 18 U.S.C. § 1014.

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Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 11 of 14

WIRE FRAUD FORFEITURE ALLEGATION
(18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c))

The Grand Jury further finds:
36. Uponconviction of one or more of the offenses in violation of. Title 18, United States
Code, Section 1343, set forth in Counts 1 through 4, the defendant,
ELIJAH BUOI,

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 property, real or personal, which
constitutes or is derived from proceeds traceable to the offenses. The property to be forfeited
includes, but is not limited to, the following assets:

a. $1,200,000 seized from Bank of America account ending in 0252, in the name
of Sosuda Tech LLC;

b. $772,000 seized from Bank of America account ending in 2641, in the name of
Sosuda Tech LLC; and

c. $28,000, to be entered in the form of a forfeiture money judgment.

37. Ifany of the property described in Paragraph 36, above, as being forfeitable pursuant
to Title 18, United States Code, Section 981(a)(1)(C), and Title 28, United States Code, Section
2461(c), 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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Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 12 of 14

it is the intention of the United States, pursuant to Title 28, United States Code, Section 2461(c),
incorporating Title 21, United States Code, Section 853(p), to seek forfeiture of any other property
of the defendant up to the value of the property described in Paragraph 38 above.

All pursuant to Title 18, United States Code, Section 981(a)(1)(C), and Title 28, United

States Code, Section 2461(c).

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Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 13 of 14

FALSE STATEMENT FORFEITURE ALLEGATION
(18 U.S.C. § 982(a)(2)(A))

38. Upon conviction of the offense in violation of Title 18, United States Code, Section
1041, set forth in Count 5, the defendant,
ELIJAH BUOI,
shall forfeit to the United States, pursuant to Title 18, United States Code, Section 982(a)(2)(A),
any property constituting, or derived from, proceeds obtained directly or indirectly, as a result of
such offense.

39. Ifany of the property described in Paragraph 38, above, as being forfeitable pursuant
to Title 18, United States Code, Section 982(a)(2), 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;

it is the intention of the United States, pursuant to Title 18, United States Code, Section 982(b),
incorporating Title 21, United States Code, Section 853(p), to seek forfeiture of any other property
of the defendant up to the value of the property described in Paragraph 40 above.

All pursuant to Title 18, United States Code, Section 982(a)(2).

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Case 1:20-cr-10130-FDS Document 29 Filed 07/14/20 Page 14 of 14

A TRUE BILL

MACKENZIE A. QUEENIN
ASSISTANT UNITED STATES ATTORNEY
DISTRICT OF MASSACHUSETTS

LbeSoel

DELLA SENTILLES
TRIAL ATTORNEY
FRAUD SECTION, DEPARTMENT OF JUSTICE

District of Massachusetts: JULY ( 1 , 2020
Returned into the District Court by the Grand Jurors and filed.

/s/ Noreen A. Russo

DEPUTY CLERK

at 4:02 PM

on 7/14/20

14

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