Oakland, Calif. Lady charged with fraud in pandemic assist applications for struggling companies, the DOJ experiences

The defendant spent pandemic aid money on private jets, hotel stays, Louis Vuitton and Neiman Marcus purchases, expensive automobiles and other personal luxury items

Feb. 7, 2021 – OAKLAND – Christina Burden was arrested Friday on a federal criminal complaint charging her with bank fraud related to a scheme to illegally procure more More than $ 4.5 million in pandemic relief loans, United States attorney David L. Anderson announced; Tax Administration Treasurer J. Russell George; Federal Bureau of Investigation, Special Agent in Charge Craig D. Fair; and Internal Revenue Service, Criminal Investigation, Special Agent in charge Michael Daniels.

Christina Burden, 31, of Oakland, is charged in the complaint of one-time bank fraud on or about June 20, 2020 when she applied for and was later received $ 684,375 in a forgivable loan from the government's Paycheck Protection Program (PPP) their shell unit "Blessing Box Co LLC". The complaint also describes a system in which Burden made nine additional fraudulent PPP loan applications between April and June 2020, one of which resulted in her receiving additional PPP funds of $ 307,916. In total, Burden attempted to raise over $ 4.5 million in PPP loans for four different Shell companies.

During that time, Burden also filed a fraudulent Economic Injury Disaster Loan Program (EIDL) application for one of the same Shell entities for which it received $ 150,900 in funding. The four companies were recently founded by Burden, according to the complaint, and do not appear to have legitimate businesses or employees. Loan applications for PPP and EIDL loans must be confirmed as true by the applicant. The criminal complaint describes how Burden's claims contained false information and misleading statements as well as manipulated bank statements and fictitious tax forms.

Burden ultimately received over $ 1 million in total fraudulent pandemic aid loans, including nearly $ 1 million in PPP funding. The PPP requires its funds to be used for legitimate business and labor costs, and the complaint describes how Burden spent the majority of the loan money on personal indulgences, including private jet travel, hotel stays, boat rentals, expensive cars, and luxury goods purchased from Louis Vuitton and Neiman Marcus, as well as specialties purchased at Sunglass Hut and the San Francisco Giants Dugout Store.

"The Paycheck Protection Program provides companies in need and their employees with a financial lifeline," said US attorney Anderson. “We claim Christina Burden obtained PPP funds through fraud by submitting incorrect business information, incorrect employee numbers, incorrect bank statements and incorrect tax returns. She used these funds on a shopping spree on entertainment, luxury goods, and high-end excursions, including travel by private jet. "

"The Tax Administration Treasurer is aggressively pursuing those who seek to defraud taxpayer-funded programs under the Coronavirus Aid, Relief and Economic Security Act that were set up to assist American business owners during these unprecedented times," said J. Russell George , the General Inspector for Tax Administration. "We appreciate the efforts of the US Department of Justice and our law enforcement partners in these efforts."

"As we begin a second round of PPP loans for small businesses struggling during this pandemic, we will be alert to scammers trying to take advantage of the program," said Craig Fair, FBI special agent in San Francisco. "Those who seek to defraud programs designed to help those in need should know that the FBI and our partners are following all investigative tools at our disposal to ensure the integrity of these programs and that they continue to be available to small business owners in our community. "

Christina Burden allegedly used funds fraudulently obtained from the Paycheck Protection Program and the Economic Injury Disaster Loan Program to unjustly enrich herself. According to the criminal complaint, she submitted false documents and records to banks showing that she had employees, paid wages to those employees, and paid wage taxes to the IRS – none of which are true, ”said Michael Daniels, Acting Special Agent on indictment Oakland Field Office of the IRS Criminal Investigation. “IRS-CI prides itself on working with our law enforcement partners by providing our expertise on complex financial cases like this one.

As stated in the complaint, the PPP is administered by the United States Small Business Administration (SBA) under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act is federal law passed in March 2020 to provide emergency financial assistance to millions of Americans suffering from the economic impact of the COVID-19 pandemic. The PPP loan proceeds must be used by the company for certain eligible business expenses, including labor costs, mortgage interest, rent, and utilities. The PPP allows the interest and principal on a PPP loan to be completely forgiven if the company spends the loan proceeds on those business expense items within a specified time frame and uses at least 60% of the PPP loan proceeds on wages and salaries. Loans granted through the PPP are 100% guaranteed by the SBA.

Similarly, the EIDL program provides low-interest unforgivable loans to small businesses, including those in disaster-hit regions. In March 2020, the President of the United States expanded the availability of EIDL funds to all states and territories due to the size and severity of the COVID-19 pandemic.

According to the complaint, Burden's loan applications contained several false statements that were confirmed to be true. Among these, Burden falsely confirmed that every company was up and running prior to February 15, 2020, and their companies had up to 89 employees and monthly labor costs in excess of $ 700,000. However, the complaint alleges that the companies' tax records show that none of them paid wage tax or filed wage tax forms. Bank records filed as evidence of the four Shell companies' wages and salaries in Burden's motions were found to be tampered with actual bank records, according to the complaint's allegations.

The complaint finally alleges that after receiving the money, Burden did not use the money to pay legal PPP business expenses, but instead used it on personal indulgences: US $ 184,000 on airfare, private jet travel and hotel expenses; $ 124,000 for luxury purchases from Louis Vuitton and Neiman Marcus, as well as purchases from Nordstrom, the San Francisco Giants Dugout Store, the Sunglass House, Tumi and Wayfair; $ 16,000 for boat and rental cars; and $ 14,000 for various dining and entertainment expenses, among other things. In addition, the complaint alleges that Burden sent hundreds of thousands of dollars to friends and family, of which $ 150,000 was spent in part on Mercedes and Land Rover vehicles.

The charges contained in the complaint are merely accusations and the accused is presumed innocent unless found guilty in a court of law.

Burden is charged with bank fraud affecting 18 US states. Section 1344. Burden faces a maximum sentence of 30 years in prison and a $ 1 million fine if convicted. However, any post-conviction penalty would be imposed by the court in accordance with U.S. Sentencing Guidelines and Federal Law on the Imposition of a Penalty, 18 U.S.C. Section 3553.

Burden was arrested this morning in Austin, Texas. Her first appearance in the United States District Court will be on Monday, February 8, 2021, in the Western District of Texas, before United States Judge Mark Lane, who sits in Austin. Burden is expected to appear in the United States District Court in Oakland, California at that hearing to face the charges in the federal complaint. The date for her first appearance in federal court in Oakland is not yet planned.

Abraham Fine is the US assistant attorney pursuing the case with the assistance of Kay Konopaske and Laurie Worthen. The law enforcement is the result of an investigation by TIGTA, IRS-CI, and the FBI.

Download christina_burden_complaint_.pdf
Source: DOJ