Superseding Indictment as to Carter Lane Lucas — USA v. Lucas (Dkt. 38, D. Utah)
Summary
Superseding Indictment in Case No. 2:23-cr-00405-DBB (District of Utah) charging Carter Lane Lucas with wire fraud under 18 U.S.C. § 1343 in Counts 1-3. It alleges that Lucas operated Nine Lions LLC and lied about a criminal history on loan applications to defraud the Paycheck Protection Program and the Economic Injury Disaster Loan Program out of approximately $182,800. The scheme is alleged to run from in or around April 2020 to at least August 2021, and to include a PPP Loan application for approximately $17,000 and an EIDL Loan application for approximately $34,900, both on or about April 3, 2020. Count 3 alleges a payment of approximately $129,900 on an EIDL Loan modification request. A notice of intent to seek forfeiture follows.
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“Superseding Indictment as to Carter Lane Lucas — USA v. Lucas (Dkt. 38, D. Utah).”
Original at ecf.utd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/superseding-indictment-as-to-carter-lane-lucas-usa-v-lucas-dkt-38-d-ut-17ada460ac/
, SHA-256 1b9e0e285a9948bf66f055c8188f13361913b3f1683c487b98692314e488538e.Full text
Case 2:23-cr-00405-DBB Document 38 Filed 09/25/24 PageID.136 Page 1 of 13
TRINA A. HIGGINS, United States Attorney (#7349)
TODD C. BOUTON, Assistant United States Attorney (#17800)
SACHIKO JEPSON, Special Assistant United States Attorney (#17077)
Attorneys for the United States of America
Office of the United States Attorney
111 South Main Street, Suite 1800
Salt Lake City, Utah 84111-2176
Telephone: (801) 524-5682
Email: todd. bouton@usdoj.gov
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH
UNITED STATES OF AMERICA, Case No. 2:23-cr-00405-DBB
Plaintiff, SUPERSEDING INDICTMENT
vs. VIOLATIONS:
CARTER LANE LUCAS, COUNTS 1-3: 18 U.S.C. § 1343,
Wire Fraud
Defendant.
The Grand Jury charges:
I. BACKGROUND
At all times relevant to this Indictment:
1. Defendant CARTER LANE LUCAS ("LUCAS") was a resident of Salt Lake
County, Utah in the District of Utah who operated a company called Nine Lions LLC
("Nine Lions").
2. During the COVID-19 pandemic, LUCAS lied about his criminal history on
loan applications to defraud the COVID-19 relief programs, dubbed the Paycheck
Case 2:23-cr-00405-DBB Document 38 Filed 09/25/24 PageID.137 Page 2 of 13
Protection Program and the Economic Injury Disaster Loan Program, out of approximately
$182,800 in loan funds.
3. To commit his fraud, LUCAS made use of a Mountain America Credit Union
account ending in xxx6901 over which he had custody and control.
The Small Business Administration
4. The 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.
5. As part of this effort, the SBA enabled and provided loans through banks,
credit unions, and other lenders. Some of these loans have government-backed guarantees.
The Paycheck Protection Program
6. On March 27, 2020, the President signed into law the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act). This Act was an economic stimulus bill that,
among other things, provided emergency financial assistance to small business owners,
including agricultural businesses, and nonprofit organizations in all U.S. states, Washington
D.C., and territories which were affected by the COVID-19 pandemic. One form of
assistance 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 a
program referred to as the Paycheck Protection Program ("PPP Program").
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7. The PPP Program, which is operated by the SBA, provided small businesses
with funding to meet specific business obligations, including payroll and rent. The PPP
Program permitted participating third-party lenders to approve and disburse SBA-backed
PPP Loans to cover payroll, fixed debts, utilities, rent/mortgage, accounts payable, and other
bills incurred by qualifying businesses during, and resulting from, the COVID-19 pandemic.
PPP Loans were fully guaranteed by the SBA. In the event of default, the SBA would fully
satisfy the lender for any balance remaining on the loan. Further, the SBA would forgive
any loan up to I 00 percent if the borrower used the loan funds as authorized. Whatever
portion of the loan funds was not forgiven was serviced as a loan.
8. The SBA promulgated regulations concerning eligibility for a PPP Loan. 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.
Certification Regarding Criminal History in Relevant PPP Loan Application
9. On or about April 3, 2020, one of the affirmative certifications a borrower had
to make in a PPP Loan application was that he had not been convicted of a felony within
the last five years. Specifically, the applicant was asked:
Within the last 5 years, for any felony, has the Applicant (if an
individual) or any owner of the Applicant 1) been convicted; 2)
pleaded guilty; 3) pleaded nolo contendere; 4) been placed on
3
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pretrial diversion; or 5) been placed on any form of parole or
probation (including probation before judgment)
(PPP Loan Application at Question 6) (emphasis added).
10. If the applicant answered that an owner of the business seeking the PPP Loan
had been convicted of a felony within the last five years, the loan was denied.
11. By signing a PPP Loan application, each applicant attested that the
information provided in the application (including the criminal history information) and in
all supporting documents and forms was true and accurate, and that the applicant understood
that knowingly making a false statement to obtain a PPP Loan was a crime.
PPP Loan Application Processing Through E-Tran Server in Virginia
12. A PPP Loan application was processed by the third-party participating lender
with whom the application was filed. If a PPP Loan application was approved, the
participating lender would fund the PPP Loan; in order to encourage PPP Loans to be issued,
the loan was guaranteed by the SBA. Data from the application, including information from
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. More specifically, PPP Loan applications submitted before August 8, 2020
were received through the SBA E-Tran server located in Sterling, Virginia.
The EIDL Loan Program
14. As part of the CARES Act, Congress also authorized the SBA to provide low-
interest Economic Injury Disaster Loans ("EIDL Loans") of up to $2 million to eligible
small businesses experiencing substantial financial disruption due to the COVID-19
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pandemic. In addition, the CARES Act authorized the SBA to issue advances of up to
$10,000 to small businesses within three days of applying for an EIDL Loan.
How EIDL Loan Applications Were Processed
15. EIDL Loan applications were submitted directly to and processed by the
SBA. The applications were received in cloud-based platforms. The location of the server
through which EIDL Loan applications were submitted was based on the date a given
application was processed by the SBA and the application number.
16. During the time period relevant to this Indictment, the relevant EIDL Loan
application and supporting documents and the later certification for an EIDL Loan
modification (increase) were received in a cloud-based platform through SBA servers
located in Washington state (the EIDL Loan application), and Iowa (the later certification
for the loan modification).
17. After an EIDL Loan was approved, the applicant business received the EIDL
Loan proceeds through an electronic funds transfer from the SBA into a financial account
reportedly under the control of the applicant business. All the EIDL Loan payments were
processed by the SBA from Denver, CO and the disbursements of the EIDL Loans and
EIDL Advances were transmitted through the Financial Management Service ("FMS") of
the Treasury. The primary server for FMS is in Sterling, VA.
Required Criminal History Certification in EIDL Loan Applications
18. From March 2020 on, to obtain an EIDL Loan, a qualifying business was
required to submit a loan application to the SBA and provide information about its business
and ownership. Each EIDL Loan applicant was required to certify under penalty of perjury
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that all the information in the loan application was true and correct to the best of his or her
knowledge.
19. Up until May 4, 2020, one of the affirmative certifications a borrower had to
make in an EIDL Loan application was that no owner of the business had ever been
convicted of, plead guilty to, or been placed on probation for any crime other than a minor
traffic violation. Specifically, the applicant was asked:
c. For any criminal offense - other than a minor vehicle violation -
have you ever been convicted, plead guilty, plead nolo contendere,
been placed on pretrial diversion, or been placed on any form of parole
or probation (including probation before judgment)?
(EIDL Loan Application Form re: Additional Questions - Criminal History).
20. For any EIDL Loan applications initiated before May 4, 2020, if the applicant
answered yes to this question, the SBA denied the EIDL Loan application.
21. After making the required criminal history certification (and other required
certifications) in the EIDL Loan application, borrowers would then sign a Loan
Authorization and Agreement wherein they were required to certify that "All
representations in the Borrower's Loan application (including all supplementary
submissions) [were] true, correct and complete and [were] offered to induce [the] SBA to
make this Loan." (Loan Authorization and Agreement at 5 re: Borrower's Certifications).
The applicant was also required to agree that the EIDL Loan funds would also be used solely
as working capital to alleviate economic injury caused by disaster and to certify under
penalty of perjury that they were authorized to apply for and obtain an EIDL Loan on behalf
of the borrower. (Id. at 3 re: Use of Loan Proceeds and Certification at 7).
Ill
6
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The EIDL Loan Modification {Increase) Program
22. On March 24, 2021, the SBA announced that the maximum amount available
for an EIDL Loan was increased from $150,000 to $500,000. The SBA also announced that
the formula for calculating the EIDL Loan amount had been changed from 6 months of
gross margin to include 24 months of gross margin.
23. Based on these changes, some EIDL Loans that had been approved prior to
the week of April 6, 2021 were made eligible for an increase based on the new loan
maximum amounts announced March 24, 2021.
24. COVID-19 EIDL Loans could thus be modified to increase the loan amount
to account for up to 24 months of economic injury or a maximum of $500,000, whichever
was less. An increase could be requested either before or after accepting the loan.
25. To request an increase in the EIDL Loan amount, the borrower was required
to log into the SBA loan portal account at https://covid19reliefl.sba.gov/. Once logged on,
the borrower could click on a button that read "Request More Funds."
26. Borrowers were then required to sign an Amended Loan Authorization and
Agreement ("Amended EIDL Loan Agreement") wherein they were required to certify that
no substantial adverse changes in their financial condition had occurred since the original
EIDL Loan application was submitted.
27. In the same Amended EIDL Loan Agreement, Borrowers were also required
to certify that "All representations in the Borrower's [original] Loan application (including
all supplementary submissions) [were] true, correct and complete and [were] offered to
induce [the] SBA to make this Loan." (Am. Loan Authorization and Agreement at 5 re:
7
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Borrower's Certifications). The applicant was also required to agree that the increased EIDL
Loan funds would also be used solely as working capital to alleviate economic injury caused
by disaster and to certify under penalty of perjury that they were authorized to apply for and
obtain an EIDL Loan on behalf of the borrower. (Id. at 3 re: Use of Loan Proceeds and
Certification at 7).
Lender
28. Mountain America Credit Union ("Mountain America") is a federally insured
financial institution doing business in Utah. When the PPP program was in operation,
Mountain America offered PPP Loans to customers.
II. THE SCHEME AND ARTIFICE TO DEFRAUD
29. Beginning in or around April 2020, and continuing to and including at least
August 2021, within the District of Utah and elsewhere, the defendant,
CARTER LANE LUCAS,
devised and executed a scheme and artifice to defraud and sought to obtain money and
property by means of materially false and fraudulent pretenses, representations and
promises, and omissions of material facts.
30. In executing and attempting to execute the scheme and artifice to defraud, and
in furtherance thereof, LUCAS knowingly devised and intended to devise a scheme and
artifice to defraud Mountain America and the SBA and made false and fraudulent pretenses,
representations, and promises to Mountain America and the SBA, in violation of 18 U.S.C.
§ 1343 (Wire Fraud) by, among other things:
Ill
8
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a. Submitting and causing to be submitted a fraudulent PPP Loan application to
Mountain America and the SBA on or about April 3, 2020;
b. Submitting and causing to be submitted a fraudulent EIDL Loan application
to the SBA on or about April 3, 2020; and
c. Submitting and causing to be submitted a fraudulent Amended EIDL Loan
Modification Agreement to the SBA on or about July 31, 2021.
III. THE OBJECT OF THE SCHEME AND ARTIFICE TO DEFRAUD
31. It was the object of the scheme and artifice to defraud for LUCAS to obtain
money from Mountain America and the SBA in the form of approximately $182,800 in PPP
and EIDL Loan proceeds through false statements, misrepresentation, deception, and
omissions of material facts.
IV. MANNER AND MEANS OF THE SCHEME AND ARTIFICE TO
DEFRAUD
April 3, 2020 PPP Loan Application:
32. On or about April 3, 2020, and on behalf of his company Nine Lions, LUCAS
completed and submitted an application to Mountain America and the SBA for a PPP Loan
in the amount of approximately $17,000.
33. In execution and furtherance of the scheme and artifice to defraud, when
submitting the loan application, LUCAS made, or caused to be made, the following false,
fraudulent, and material representation to Mountain America and the SBA:
a. LUCAS had not been convicted of a felony within five years of his
submission of the PPP Loan application; when, in fact, he had been.
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April 3, 2020 EIDL Loan Application:
34. On or about April 3, 2020, and on behalf of his company Nine Lions, LUCAS
also completed and submitted an EIDL Loan application to the SBA for an approximately
$34,900 EIDL Loan, along with a request (in the same application) for an additional $1,000
EIDL advance.
35. In execution and furtherance of the scheme and artifice to defraud, when
submitting the EIDL Loan application, LUCAS made, or caused to be made, the following
false, fraudulent, and material representation to the SBA:
a. For any criminal offense - other than a minor vehicle violation -
LUCAS had never been convicted, plead guilty, plead nolo
contendere, been placed on pretrial diversion, or been placed on
any form of parole or probation (including probation before
judgment); when, in fact, he had been.
July 31, 2021 Amended EIDL Loan Agreement for Modification (Increase):
36. On or about July 31, 2021, and on behalf ofhis company Nine Lions, LUCAS
requested an EIDL Loan modification and completed and submitted an Amended EIDL
Loan Agreement to the SBA for an additional approximately $129,900 EIDL Loan
mcrease.
37. In execution and furtherance of the scheme and artifice to defraud, when
submitting the Amended EIDL Loan Agreement and certifying that all the statements in
his original EIDL Loan application were true, correct, and complete, LUCAS again made,
or again caused to be made, the following false, fraudulent, and material representation to
the SBA:
Ill
Case 2:23-cr-00405-DBB Document 38 Filed 09/25/24 PageID.146 Page 11 of 13
a. For any criminal offense - other than a minor vehicle violation -
LUCAS had never been convicted, plead guilty, plead nolo
contendere, been placed on pretrial diversion, or been placed on any
form of parole or probation (including probation before judgment);
when, in fact, he had been.
COUNTS 1-3
18 U.S.C. § 1343)
(Wire Fraud)
38. The allegations set forth above are incorporated herein by reference and
realleged as though fully set forth in these Counts.
39. Beginning around April 2020 and continuing in and through at least August
2021, in the District of Utah and elsewhere, the defendant,
CARTER LANE LUCAS,
having devised and intended to devise a scheme and artifice to defraud, and for obtaining
money and property from Mountain America and the SBA, by means of false and
:fraudulent pretenses, representations, promises, and omissions of material facts, for the
purpose of executing said scheme and artifice to defraud, did transmit and cause to be
transmitted by means of wire communication certain writings, signs and signals, that is, an
interstate wire, as represented below, each such use of wire communication being a
separate count:
COUNT DATE USE OF INTERSTATE WIRE(S)
(On or About)
1 1/28/2021 In relation to a PPP Loan application submitted on approximately
April 3, 2020 and a related loan forgiveness application submitted
on approximately December 15, 2020 for approximately $17,000,
both of which LUCAS submitted on behalf of Nine Lions;
LUCAS caused the SBA to transmit approximately $17,137.40
through a server in Virginia to an account (ending in 6667) at
Mountain America in Utah.
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COUNT DATE USE OF INTERSTATE WIRE(S)
(On or About)
2 61912020 In relation to an EIDL Loan application submitted on behalf of
Nine Lions, LUCAS caused to be transmitted a payment for
approximately $34,900 from the SBA's Finance Center through
a server in Virginia to a checking account (ending in 6901) at
Mountain America in Utah.
3 81412021 In relation to an EIDL Loan modification request submitted on
behalf of Nine Lions, LUCAS caused to be transmitted a payment
for approximately $129,900 from the SBA's Finance Center
through a server in Virginia to a checking account (ending in
6901) at Mountain America in Utah.
All in violation of 18 U.S.C. § 1343.
NOTICE OF INTENT TO SEEK FORFEITURE
Pursuant to 18 U.S.C. § 98l(a)(l)(C) and 28 U.S.C. § 2461(c), upon conviction of
any offense violating 18 U.S.C. § 1343, the defendant(s) shall forfeit to the United States
of America any property, real or personal, that constitutes or is derived from proceeds
traceable to the scheme to defraud. The property to be forfeited includes, but is not limited
to:
■ A money judgment equal to the value of any property not available for forfeiture
as a result of any act or omission of the defendant(s) for one or more of the
reasons listed in 21 U.S.C. § 853(p); and
Ill
Ill
Ill
Ill
I II
12
Case 2:23-cr-00405-DBB Document 38 Filed 09/25/24 PageID.148 Page 13 of 13
■ Substitute property as allowed by 28 U.S.C. § 2461(c) and 21 U.S.C. § 853(p).
A TRUE BILL:
TRINA A. HIGGINS
United States Attorney
;;,::✓-~~
TODD C. B()Uf()N
Assistant United States Attorney
13
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