Superseding Information, United States v. Kareem Memon (S.D. Fla., September 6, 2023)

Summary

A superseding information filed by the United States Attorney in United States v. Kareem Memon, Case No. 23-CR-80068-SINGHAL/McCabe(s), in the U.S. District Court for the Southern District of Florida, entered on the docket September 6, 2023 as Document 27. Count 1 charges wire fraud under 18 U.S.C. § 1343 over a PPP loan application for KSM Enterprises, Inc. that reported approximately $154,782 in monthly average payroll and 15 employees, after which Kabbage disbursed $386,954.00. Counts 2-3 charge money laundering under 18 U.S.C. § 1957 over a $50,000 cash withdrawal and a wire transfer of approximately $288,102.00 to the IRS. Count 4 charges possession of a firearm and ammunition by a convicted felon on or about April 18, 2023. The information lists pistols and ammunition for forfeiture and attaches a waiver of an indictment form.

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“Superseding Information, United States v. Kareem Memon (S.D. Fla., September 6, 2023).” Original at ecf.flsd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/superseding-information-usa-v-memon-dkt-27-s-d-fla-c872c434cb/, SHA-256 af1a9af766639e0c98c6d1b0079c29bd61d9fe7c2fc6fd0b17b5029fb3f9eabd.

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Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 1 of 12

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO. 23-CR-80068-SINGHAL/McCabe(s)
18 u.s.c. § 1343
18 u.s.c. § 1957
18 U.S.C. § 922(g)(l)
18 U.S.C. § 982(a)(l)
18 U.S.C. § 982(a)(2)(A)
18 U.S.C. § 924(d)(l)

UNITED STATES OF AMERICA TM
vs.
Sep 6, 2023
KAREEM MEMON,

_________________
Defendant.
]
WPB

SUPERSEDING INFORMATION
The United States Attorney charges that:

GENERAL ALLEGATIONS
At a!Jtimes relevant to this Superseding Information:

The CARES Act

1. 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 .

2. As part of this effort, the SBA enabled and provided for loans through banks, credit

unions, and other lenders. These loans had government-backed guarantees.

3. The Coronavirus Aid, Relief, and Economic Security (" CARES") Act was a federal

law enacted in or around March 2020 and designed to provide emergency financial assistance to the
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 2 of 12

millions of Americans who were suffering the economic effects caused by the COVID-19 pandemic.

The Economic Injury Disaster Loan Program

4. The Economic Injury Disaster Loan ("EIDL") program was an SBA program that

provided low-interest financing to small businesses, renters, and homeowners in regions affected by

declared disasters. The CARES Act authorized the SBA to provide EIDLs of up to $2 million to

eligible small businesses experiencing substantial financial disruption due to the COVID-19

pandemic.

Paycheck Protection Program

5. Another source of relief provided by the CARES Act was the authorization of

forgivable loans to small businesses for payroll, mortgage interest, rent/lease, utilities, through a

program referred to as the Paycheck Protection Program ("PPP"). In April 2020, Congress authorized

additional PPP funding.

6. The PPP allowed qualifying small businesses and other organizations to receive PPP

loans. Businesses were required to 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 expenses items within a designated period of time

and used a certain percentage of the PPP loan proceeds on payroll expenses.

7. The amount of PPP loan that a small business was entitled to receive was determined

by the number of employees employed by the business and the business ' average monthly payroll

costs.

8. 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 to be eligible to obtain the PPP loan. In the PPP loan

2
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 3 of 12

application (SBA Form 2483), 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 confirming their payroll expenses.

9. A PPP loan application was processed by a participating lender. If a PPP loan

application was approved, the participating lender disbursed the loan funds to the applicant. While a

participating lender issued the PPP loan, the loan was l 00% guaranteed by the SBA. Data from the

application, including information about the borrower, the total amount of the loan, and the listed

number of emp10yees, was transmitted by a wire transfer by the lender to the SBA in the course of

processing the loan.

10. In addition, businesses applying for the PPP loan were required to provide

documentation confirming their payroll expenses. Typically, businesses supplied documents showing

the amount of payroll taxes reported to the Internal Revenue Service ("IRS"). Small businesses (non-

sole proprietorship) had to report and document the business' income and expenses, as typically

reported to the IRS on Form W3 or Form 941. These figures and documentation were used to

calculate the amount of money the small business was eligible to receive under the PPP.

3
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 4 of 12

The Defendant and Relevant Entity

11. Defendant KAREEM MEMON was a resident of Boca Raton, Florida.

12. KSM Enterprises, Inc. ("KSM") was a Florida corporation with an address listed in

Coral Springs, Florida. KAREEM MEMON was the President ofKSM.

Relevant Financial Institutions

13. Wells Fargo Bank, N.A. ("Wells Fargo") was a federally insured financial institution

based in South Dakota.

14. Kabbage Inc. ("Kabbage:), headquartered in Atlanta, Georgia, was an approved SBA

lender of PPP Joans.

PPP and EIDL Applications

15. On or about June 24, 2020, KAREEM MEMON applied for an EIDL in the name

of KSM. On the application for the EIDL, KAREEM MEMON reported gross revenue for the

twelve months prior to the date of the d+saster (January 31, 2020) as $246,782.00 and 1 employee.

16. . On or abo.utJurre:25,2020; KAREEM MEMON applied for a PPP loan in the name

of KSM. On the application for the PPP loan, KAREEM MEMON reported KSM' s monthly average

payroll of approximately $154., 782 and 15 employees.

COUNT 1
Wire Fraud
(18 u.s.c. § 1343)

1. . The General Allegati.ons section of this Superseding Information is re-alleged and

incorporated by reference as though fully set forth herein.

2. From in or around June 2020, continuing through in or around December 2020, in

Palm Beach County, in the Southern District of Florida, and elsewhere, the defendant,

KAREEM MEMON,

did knowingly, and with the intent to defraud, devise, and intend to devise a scheme and artifice to

4
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 5 of 12

defraud, and to obtain money and property by means of materially false and fraudulent pretenses,

representations, and promises, knowing that the pretenses, representations, and promises were false

and fraudulent when made, and for the purpose of executing the scheme and artifice, did knowingly

transmit and cause to be transmitted, by means of wire communication in interstate and foreign

commerce, certain writings, signs, signals, pictures, and sounds.

PURPOSE OF SCHEME AND ARTIFICE
3. It was the purpose of the scheme and artifice for the defendant to unlawfully enrich

himself, by submitting a fa1se and 'fraudulent PPP loan application to Kabbage, which contained false

information,about average payroll·expenses and number of employees, and then using the subsequent

loan proceeds for his personal benefit.

MANNER AND MEANS OF THE SCHEME AND ARTIFICE

4. The matter and means by which the defendant, KAREEM MEMON, sought to

accompf.ish :the scheme ,and artifice'to·defra:ud included, among others, the following:

:-s. The PPP foan:.application :submitted, or caused to be submitted, by KAREEM

MEMON for KSM included false and fraudulent tax documents and falsely and fraudulently

represented the borrowing entity's number of employees and amount of monthly payroll for 2019.

6. KAREEM MEMON stated in the PPP loan application that the funds would be used to

retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments,

as specitied under the Paycheck Protection Program Rule.

7. As a result of the false and fraudulent representations made by the Defendant in the

PPR1oan application submitted as part of this scheme, Kabbage disbursed PPP loan proceeds to

KSM's Wells Fargo business account ending in 3088 and controlled by KAREEM MEMON in the

amount·, of $386,954.00 .

.8. Having obtained PPP loan proceeds for KSM, KAREEM MEMON used portions

5
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 6 of 12

of the loan proceeds for expenses not authorized by the Paycheck Protection Program, including

electronically wire transferred portions of the loan proceeds to the IRS.

USE OF THE WIRES

9. On or about June 25, 2020, in Palm Beach County, in the Southern District of Florida,

and elsewhere, the defendant KAREEM MEMON, for the purpose of executing and in furtherance

of aforesaid scheme and artifice to defraud, and to obtain money and property by means of materially

false and fraudulent pretenses, representations, and promises, knowing that the pretenses,

representations, and promises were false and fraudulent when made, did knowingly transmit and

cause to be transmitted, by means of wire communication, certain writings, signs, signals, pictures,

and sounds, that is, an electronic transmission of a fraudulent PPP loan application in the name of

KSM Enterprises to Kabbage.

In violation of Title 18, United States Code, Section 1343.

COUNTS 2-3
Money Laundering
(18 u.s.c. § 1957)

1. The General Allegations section of thi s Superseding Information is re-alleged and

incorporated by reference as though fully set forth herein.

2. On or about the dates and in the County set forth in each count below, in the Southern

District of Florida, and elsewhere, the defendant,

KAREEM MEMON,

did knowingly engage in a monetary transaction by, through, and to a financial institution affecting

interstate commerce in criminally derived property of a value greater than $10,000 , and such property

having been derived from a specified unlawful activity, knowing that the property involved in the

monetary transactions represented the proceeds of some form of specified unlawful activity, that is,

wire fraud, in violation of Title 18 United States Code, Section 1343.

6
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 7 of 12

COUNT APPROXIMATE DESCRIPTION DESCRIPTION OF FINANCIAL
DATE OF OF COUNTY TRANSACTION
TRANSACTION
2 July 6, 2020 Broward Cash withdrawal in the amount of
$50,000, from KSM Wells Fargo
account ending in 3088, identified with
withdrawal receipt # 4057.
3 July 22, 2020 Broward Wire transfer of approximately
$288 ,102.00 from KSM Wells Fargo
account ending in 3088 to the United
States Internal Revenue Service.

In violation of Title 18, United States Code, Section 1957.

COUNT4
Possession of a Firearm and Ammunition by a Convicted Felon
(18 U.S.C. § 922(g)(l))

On or about April 18, 2023, in Broward County, in the Southern District of Florida, the

Defendant,

KAREEM MEMON,

did knowingly possess a firearm and ammunition in and affecting interstate and foreign commerce,

knowing that he had previously been convicted of a crime punishable by imprisonment for a term

exceeding one year, in violation of Title 18, United States Code, Sections 922(g)(l) and 924(a)(2).

FORFEITURE ALLEGATIONS

1. The allegations of this Superseding Information are hereby realleged and

incorporated by reference for the purpose of alleging forfeiture to the United States of America of

certain property in which the defendant, KAREEM MEMON, has an interest.

2. Upon conviction of a violation of Title 18, United States Code, Section 1343 , the

defendant shall forfeit to the United States any property constituting, or derived from, proceeds

obtained, directly or indirectly, as a result of such violation, pursuant to Title 18, United States Code,

Section 982(a)(2)(A).

3. Upon conviction of a violation of Title 18, United States Code, Section 1957, the

7
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 8 of 12

defendant shall forfeit to the United States any property, real or personal, involved in such offense,

and any property traceable to such property, pursuant to Title 18, United States Code, Section

982(a)(I).

4. Upon conviction of a violation of Title 18, United States Code, Section 922(g)(l),

or any other criminal law of the United States, as alleged in this Superseding Information, the

defendant shall forfeit to the United States any firearm and ammunition involved in or used in the

commission of such offense, pursuant to Title 18, United States Code, Section 924(d)(l).

5. The property subject to forfeiture as a result of the alleged offenses includes, but is

not limited to, the following:

1. Glock Inc., Model : 43x, 9x19mm caliber pistol, bearing serial number:
BMYA019;
11. FN Herstal, Five-seveN, 5.7x28mm pistol, bearing serial number: 386386092;
111. FN Herstal, Five-seveN, 5.7x28mm pistol, bearing serial number:
386356379;
1v. Zastava, PAP M92PV, 7.62x39mm caliber, AK-47 variant pistol, bearing
serial number: M92PV064950;
v. Moriarti Armaments LLC, AR-15 , Multi-caliber pistol, bearing serial
number: MA15-0358;
v1. Glock Inc. (GmbH Austria), Model: 19 Gen 4, 9xl 9mm caliber pistol,
bearing serial number: WWU600 ;
v11. Taurus, model : TCP 738, .380 Auto caliber pistol, bearing serial number
(SIN) I 8659E;
v111. Fourteen (14) rounds of 9mm ammunition consisting of: two (2) rounds
of Fiocchi Ammunition 9mm Luger; eight (8) rounds of Hornady; and
four (4) rounds of Speer 9mm ammunition;
1x. Twenty-one (21) rounds ofFabrique National Belgique 5.7x28mm
ammunition;
x. Twenty (20) rounds of 5.7x28mm ammunition loaded for Fabrique
National Belgique;
x1. Thirty (30) rounds of BSVT- New Technologies LLC (Belarus)
7.62x39mm caliber ammunition;
x11. Seven (7) rounds of Winchester .380 Auto ammunition; and
x111. Fifty-nine (59) rounds of ammunition consisting of fifty-seven (57) rounds
of Winchester 5.56x45 ammunition and two (2) rounds of CBC Global
Ammunition.

All pursuant to Title 18, United States Code, Sections 982(a)(1 ), 982(a)(2)(A) and 924(d)(l),

and the procedures set forth at Title 21 , United States Code, Section 853 , as incorporated by Title 18,

8
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 9 of 12

United States Code, Section 982(b)(l) and Title 28, United States Code, Section 246 1(c).

A TRUE BILL

~~$
FOREPERSON

UNITED S A TES ATTORNEY

:l;;A~
ASSISTANT UNITED STATES ATTORNEY

9
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 10 of 12
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

UNITED STATES OF AMERICA CASE NO.: 23-80068-AHS/McCabe(s)

v.
CERTIFICATE OF TRIAL ATTORNEY
KAREEM MEMON,
- - - - - - - - - - - - - -I
Superseding Case Information:
Defendant. New Defendant(s) (Yes or No) No
Court Division (select one) Number of New Defendants o
□ Miami □ Key West □ FTP Total number of counts __4__--
□ FTL □ WPB

I do hereby certify that:
I. I have carefully considered the allegations of the indictment, the number of defendants, the number of probable
witnesses and the legal complexities of the Indictment/Infonnation attached hereto.
2. I am aware that the information supplied on this statement will be relied upon by the Judges of this Court in setting
their calendars and scheduling criminal trials under the mandate of the Speedy Trial Act, Title 28 U.S.C. §3161 .

3. Interpreter: (Yes or No) No
Language and/or dialect:
4. This case will take _ 4_ days for the parties to try.

5. Please check appropriate category and type of offense listed below:
(Check only one) (Check only one)
I IE] 0 to 5 days □ Petty
II □ 6 to 10 days D Minor
III D 11 to 20 days D Misdemeanor
IV D 21 to 60 days (El Felony
V D 61 days and over
6. Has this case been previously filed in this District Court? (Yes or No) _N_o_ _
If yes, Judge__________ Case No. _ _ _ _ _ _ _ _ _ _ _ _ _ __
7. Has a complaint been filed in this matter? (Yes or No) No
---
If yes, Magistrate Case No. _ _ _ _ _ _ _ _ _ _ __
8. Does this case relate to a previously filed matter in this District Court? (Yes or No) _ __
If yes, Judge__________ Case No. _ _ _ _ _ _ _ _ _ _ _ _ _ __
9. Defendant(s) in federal custody as of _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
10. Defendant(s) in state custody as of _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
11. Rule 20 from the _ _ _ _ District of
-------
12. Is this a potential death penalty case? (Yes or No )N__o_ _
13. Does this case originate from a matter pending in the Northern Region of the U.S. Attorney's Office
prior to August 8, 2014 (Mag. Judge Shaniek Maynard? (Yes or No) No
---
14. Does this case originate from a matter pending in the Central Region of the U.S. Attorney's Office
prior to October 3, 2019 (Mag. Judge Jared Strauss? (Yes or No)N __o_ _
15. Did this matter involve the participation of or consultation with now Magistrate Judge Eduardo I. Sanchez
during his tenure at the U.S. Attorney' s Office, which concluded on January 22, 2023? N_o_ _

By~-~
oinw,Wah
Assistant United States Attorney
FL Bar No. 0537837
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 11 of 12

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

PENALTY SHEET

Defendant's Name: KAREEM MEMON

Case No: 23-CR-80068-SINGHAL/McCabe(s)

Count#: 1

Wire Fraud
Title 18, United States Code, Section 1343
Max. Term of Imprisonment: 20 years' imprisonment
Mandatory Min. Term oflmprisonment (if applicable): N/A
Max. Supervised Release: 3 years' supervised release
Max. Fine: $250,000 fine or twice the gross loss or gross gain, which could be as much of
$773,908; and $100 special assessment; plus restitution

Counts# 2-3:

Engaging in Monetary Transactions in Criminally Derived Property
Title 18, United States Code, Section 1957(a)
Max. Term oflmprisonment: 10 years' imprisonment
Mandatory Min. Term oflmprisonment (if applicable): N/A
Max. Supervised Release: 3 years' supervised release
Max. Fine: $250,000 fine or twice the value of the criminally derived property involved in the
transaction; and $100 special assessment

Count#: 4

Felon in Possession
Title 18, United States Code, Section 922(g)(l)
Max. Term oflmprisonment: 15 years' imprisonment
Mandatory Min. Term oflmprisonment (if applicable) : N/ A
Max. Supervised Release: 3 years' supervised release
Max. Fine: $250,000

*Refers only to possible term of incarceration, supervised release and fines. It does not include
restitution, special assessments, parole terms, or forfeitures that may be applicable.
Case 9:23-cr-80068-AHS Document 27 Entered on FLSD Docket 09/06/2023 Page 12 of 12

AO 455 (Rev . 01/09) Wai ver of an Indictment

UNITED STATES DISTRICT COURT
for the
Southern District of Florida

United States of America )
V. ) Case No. 23-CR-80068-AHS/McCabe(s)
KAREEM MEMON )
)
Defendant )

W AIYER OF AN INDICTMENT

l understand that I have been accused of one or more offenses punishable by imprisonment for more than one
year. I was advised in open court of my rights and the nature of the proposed charges against me.

After receiving this advice, l waive my right to prosecution by indictment and consent to prosecution by
information.

Date:
Defendant's signature

Signature of defendant 's attorney

Brian Silber, Es uire
Printed name of defendant 's attorney

Judge's signature

Judge 's printed name and title

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