ATLANTA - Carl Delano Torjagbo, a/k/a Karl Lucius Delano, has been arrested on federal bank fraud and money laundering charges arising from a scheme to defraud a bank by obtaining a $9.5 million Paycheck Protection Program (“PPP”) loan in the name of a fictitious company and then allegedly using the loan proceeds to upgrade his personal lifestyle. The PPP is a federal loan program intended to help small businesses survive the COVID-19 pandemic by providing them with funds to cover certain payroll costs, including benefits, interest on mortgages, rent, and utilities.
“This defendant allegedly stole millions of dollars in taxpayer money intended to help small businesses stay afloat during the pandemic,” said U.S. Attorney Ryan K. Buchanan. “We will continue to investigate and charge anyone who fraudulently obtains these critical funds and uses them for their own personal gain.”
“The FBI and our partners will not tolerate anyone who misdirects federal emergency assistance intended for business who actually need it to stay operational," said Keri Farley, Special Agent in Charge of FBI Atlanta. “Torjagbo’s fraud was particularly egregious, and we will make sure he is held accountable accordingly.”
“The Treasury Inspector General for Tax Administration aggressively pursues those who endeavor to defraud programs afforded to the American people under the CARES Act,” said J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA). “We appreciate the efforts of the Department of Justice and our law enforcement partners in this effort.”
According to U.S. Attorney Buchanan, the charges, and other information presented in court: On February 16, 2021, Torjagbo signed a PPP loan application on behalf of Kremkov Industries LLC and submitted it to a bank, requesting a PPP loan in the amount of $9,554,425.00. To be eligible for a PPP loan, a business had to have been in operation on February 15, 2020. Kremkov Industries was not eligible for a PPP loan because it was not in operation on February 15, 2020. In fact, it was not even created until approximately ten months after that deadline had expired.
Torjagbo swore that the information he provided in the PPP loan application and in all supporting documents and forms was “true and accurate in all material respects.” Torjagbo certified that Kremkov Industries was in operation on February 15, 2020. Torjagbo stated that Kremkov Industries had 493 employees. Torjagbo also stated that Kremkov Industries had an average monthly payroll of $3,821,770. All of these statements were allegedly false.
In support of the PPP loan application, Torjagbo allegedly submitted fraudulent documents to the bank, including false tax returns (IRS Forms 940, 941, and 1040) and fake reports that listed the names and make-believe payroll information of the 493 people who purportedly worked for Kremkov Industries.
On March 29, 2021, as a result of Torjagbo’s alleged false and fraudulent representations, the bank transferred $9,554,425.00 in PPP loan proceeds to Torjagbo’s custody and control. The PPP loan proceeds were initially deposited into a bank account titled in the name of Kremkov Industries. Immediately before that deposit, the balance in that account was only $105.
On the PPP loan application, Torjagbo certified that all loan proceeds would be used only for business-related purposes as specified in the loan application and consistent with the Paycheck Protection Program Rules. Torjagbo acknowledged that he could be prosecuted if the PPP loan proceeds were knowingly used for unauthorized purposes.
On April 8, 2021, Torjagbo caused $3 million of the PPP loan proceeds to be transferred by check from the bank to a different bank. On that check, Torjagbo wrote a note stating that it was for “payroll.” But those funds were not used to pay “payroll.” Instead, those funds were allegedly used to pay Torjagbo’s personal debts and expenses, including the following:
• $1,677,861.01 for his personal residence;
• more than $837,000 for tractor-trailers to start a new trucking business;
• approximately $300,000 to purchase other real estate;
• $118,299.79 for a 2022 BMW M850XL;
• $87,020 for a 2021 Land Rover Velar; and
• more than $15,000 for plastic surgery.
The PPP is a federal loan program intended to help small businesses survive the COVID-19 pandemic by providing them with funds to cover certain payroll costs, including benefits, interest on mortgages, rent, and utilities.
Carl Delano Torjagbo, a/k/a Karl Lucius Delano, 42, of Marietta, Georgia, was arraigned before U.S. Magistrate Judge Linda T. Walker, on federal charges of bank fraud and money laundering, and was remanded to custody. Torjagbo was indicted by a federal grand jury on May 10, 2022. Members of the public are reminded that the indictment only contains charges. The is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation, U.S. Treasury Inspector General for Tax Administration, and Internal Revenue Service Criminal Investigation. In addition, the Federal Motor Carrier Safety Administration and the Paulding County Sheriff’s Office provided valuable assistance in the investigation.
Assistant U.S. Attorney Russell Phillips is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
| URL | |
|---|---|
| Component | USAO - Georgia, Northern; |
| OIG | Treasury IG for Tax Administration |