CASE 0:20-cr-00177-ECT-HB Document 1 Filed 08/19/20 Page 1 of 11

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UMTED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

UNITED STATES OF AMERICA, )

) INDICTMENT
Plaintiff, )
) 18 U.S.C. S 1343
v. ) 18 U.S.C. S 1e57
) 18 U.S.C. $ e81(a)(1)(c)
KYLE WILLIAM BRENIZER, ) 18 U.S.C. S e82(a)(1)
alkla Kyle Williams, ) 28 U.S.C. $ 2461(c)
).
Defendant. )

The UNITED STATES GRAND JURY charges:

General Allegations

At times relevant to this Indictment:

The Defendant and Related Entities

1. Defend.ant KYLE WILLIAM BRENIZER was a resident of St. Paul, in

the State and District of Minnesota. Defendant BRENIZER was subject to multiple

felony criminal chargeb pending in the State of Minnesota in which he personally

appeared in court proceedings prior to May 2}2l,including but not limited to, charges

for check forgery, identifu theft, and theft by swindle.

2. True-Cut Construction LLC ('True-Cut") was a Minnesota corporation

formed in or around December 2015. True-Cut operated as a contracting and

construction company with its principal business location in Brooklyn. Park,

Minnesota. Defendant BRENIZER was True-Cut's registered agent, manager, and

L00d/o owner.

3. In or about August 2018, True-Cut and defendant BRENIZER were

subject to an enforcement action by the Minnesota Department of Labc rrandttEKftNurJ

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and were ordered to cease and desist from acting or holding themselves out as a

residential building contractor, remodeler, or roofer. Since in or about December

2019, True-Cut's contractor license issued by the Minnesota Department of Labor and

Industry expired and has not been renewed by True-Cut or defendant BRENIZER.

4. Since at least 2016 through at least 2019, defendant BRENIZER did not

report to the State of Minnesota the payment of any wages to a single True-Cut

employee. Since at least 2018, defendant BRENIZER did not submit any Form 944

federal tax returns to the United States Internal Revenue Service for True-Cut

Construction.

5. Interactive Innovators, Inc., ('Interactive Innovators") was a Minnesota

corporation formed in or around January L997, which was administratively dissolved

in or aroundApril 2005. Interactive Innovators remained dissolved from in or around

April 2005 until on or about April 23, 2020, on which date the entity was reinstated

by defendant BRENIZER who, under the alias "Kyle Williams," listed himself as the

chief executive offrcer of Interactive Innovators.

The U.S. SmaII Business Administration

6. 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 econotnic recovery of communities after disasters.

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7. 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.

CARES Act and Paychech Protection Program

8. 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 ielief provided by the CARES Act was the

authorization of forgivable loans to small businesses for job retention and certain

other expenses, through a program referred to as the Paycheck Protection Program

("PPP").

9. To obtain a PPP loan, a qualifuing 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 (SBA Form 2483), the small business (through its authorized

representative) was required to certifu, among other things: (a) that the small
business was in operation on February 15, 2020; (b) average monthly payroll

expenses; and (c) number of employees. These figures were used to calculate the

amount of money the small business is eligible to receive under the PPP. In addition,

businesses applying for a PPP loan were required to provide documentation showing

their payroll expenses. Applicants must meet (and certifr) certain requirements,
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including that the small business was in operation on February 15, 2020, had

employees, and had average monthly payroll costs.

10. The PPP loan application further required the business (through its

authorized representative) to certi$r whether the applicant or any individual owning

20 percent or more of the equity of the business was subject to an indictment, criminal

information, arraignment, or other means by which formal criminal charges are

brought.

11. 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 the 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.

t2. 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.

Releuant Financial Institutions and Related Entities

13. Bank 1 was a federally insured financial institution based in Salt Lake

City, Utah. Bank 1 participated in the SBA's PPP as a lender, and, as such, was

authorized to lend funds to eligible borrowers under the terms of the PPP.
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14. Bank 2 was a federally insured financial institution based in Fargo,

North Dakota, with multiple branch locations, including in Moorhead, Minnesota.

Defendant BRENIZER maintained personal accounts at Bank 2 for which he was the

sole account signatory.

15. Company 1 was a publicly traded company that specialized in processing

credit card payments and small-business lending. Company 1 was based in Redwood

City, California. Company l participated in the SBA's PPP by, among, other things,

acting as a service provider between small businesses and certain barlks, including

Bank 1. Small businesses seeking PPP loans could apply through Company 1 for PPP

loans. Company 1 would review the loan applications. If a loan application received

by Company 1 was approved for funding, a partner bank, such as Bank 1, disbursed

the loan funds to the applicant.

16. Company 2 was a FlNRA-registered broker-dealer that managed self-

directed cash accounts for its customers and related expense management services

through its website and mobile applications. Company 2 was based in San Francisco,

California. Defendant BRENIZER, under the alias "Kyle Williams," maintained an

account at Company 2 in the name of Interactive Innovators.

COUNTS I..2
(Wire Fraud)

.I7. Paragraphs 1- through 16 are incorporated by reference as if fully set

forth herein.

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18. Beginning in or around April 2020, and continuing until at least in or

around June 2020, in St. Paul, Minnesota, within the District of Minnesota, and
elsewhere, the defendant

KYLE WILLIAM BRENIZER,

did knowingly devise and participate in a scheme and artifi.ce to defraud and to obtain

money by means of materially false and fraudulent pretenses, representations, and

promises, and by concealment of material facts.

19. More specifically, d.efendant BRENIZER devised a scheme to defraud.

Bank 1, Company 1, and the SBA by filing false and fraudulent applications for PPP

funds. The purpose of the scheme was for defendant BRENIZER to unjustly enrich

himself by obtaining PPP loan proceeds under false and misleading pretenses,

including by making false statements about the number of True-Cut employees,

payroll expenses, the intended use of the loan proceeds, and defendant BREMZER's

criminal history.

20. In furtherance of the scheme, on or about May 1, 2020, defendant

BRENIZER submitted a false and misleading PPP application to Bank 1 and
Company 1 in the name of True-Cut seeking approximately $841,000 in PPP funds

('PPP Application 1"). PPP Application 1 was signed by defendant BRENIZER. In

addition, defendant BRENIZER certified that PPP Application 1 and the information

provided in all supporting documents and forms was true and accurate.

2I. On PPP Application 1, defendant BRENIZER falsely stated that True-

Cut's average monthly payroll was $338,720 and that the company had

approximately 28 employees. In addition, defendant BRENIZER submitted with the

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PPP Application 1 what purported to be an Employer's Annual Federal Tax Return

('IRS Form 944") for True-Cut for 20L9. On the purported IRS Form 944, defendant

BRENIZER falsely claimed that True-Cut had paid $4,064,520 in wages, tips, and

compensation.

22. It was further part of the scheme that defendant BRENIZER falsified

bank account records in support of PPP Application 1 unbeknownst to Bank 1 and

Company 1 at the time. More specifically, defendant BRENIZER provided Bank 1

and Company 1 with monthLy statements for a personal account that he maintained

at Bank 2, which defendant BRENIZER had altered and falsified to appear as "True-

Cut Construction" bank account statements. In fact, and as defendant BRENIZER

knew at the time, True-Cut maintained no accounts at Bank 2.

23. On or about May 5, 2020, Company 1 notified defendant BRENIZER

that it did not approve the issuance of a PPP loan based on PPP Application 1.

24. In furtherance of the scheme to defraud, on or about May L2, 2020,

defendant BRENIZER caused the submission of another false and misleading PPP

application to Bank l and Company 1in the name of True-Cut seeking approximately

$841,000 in PPP funds (.'PPP Application 2"). In order to conceal his involvement,

defendant BRENIZER omitted his name from PPP Application 2, which he caused to

be signed and submitted under the name of Individual A, whom defendant

BRENIZER falsely claimed was the 90% owner of True-Cut. In fact, and as defendant

BRENIZER knew, Individual A had no ownership interest in True-Cut.

25. Under the false pretense that Individual A was a 90% owner of True-

Cut, defendant BRENIZER caused PPP Apptication 2 to be certified as containing

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true and accurate information and supporting d.ocumentation, when, in fact, PPP

Application 2 contained materially false and misleading claims. Among other things,

PPP Application 2 falsely stated that True-Cut's average monthly payroll was

9336,400 and that the company had approximately 30 employees. Defendant

BRENIZER caused PPP Application 2 to be submitted to Bank 1 and Company 1 with

fraudulent supporting information, namely, bogus bank account records and a

purported IRS Form 944 for True-Cut for 2019 with false information about True-

Cut's payroll expenses.

26. As a result of defendant BRENIZER s material falsehoods and

omissions, Bank 1 eventually approved PPP Application 2. On or about May 13, 2020,

Bank 1 distributed approximately $841,000 to defendant BREMZER through a wire

transfer sent to defendant BREMZER's personal account at Bank 2.

21. It was further part of the scheme that defendant BRENIZER received

approximately $841,000 in fraud proceeds, some of which he distributed and

misappropriated, or attempted to distribute and misappropriate, for the personal

benefit of himself and other parties in violation of the PPP's requirements. More

specifically, rather than use PPP funds for permissible business expenses, such as

payroll costs, mortgage interest, rent, or utilities, defendant BRENIZER instead

transferred approximately $650,000 to an account at Company 2 that he controlled

and was unrelated to True-Cut; made an approximately $29,000 payment to purchase

a Harley-Davidson motorcycle; transferued approximately $20,000 to a personal

savings account in defendant BRENIZER s name; transferred approximately $10,000

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to Individual A; and spent approximately $1,185 for golf expenses, among other retail

and entertainment expenditures for his personal benefit.

28. On or aboui the dates set forth below, in the State and Distribt of

Minnesota and elsewhere, the defendant,

KYLE WILLIAM BRENIZER,

for the purpose of executing and attempting to execute the above-described scheme

and artifice to defraud, knowingly transmitted and caused to be transmitted by

means of wire communications in interstate and foreign commerce, certain writings,

signs, signals, and sounds, as described below:

-WrdlW,&Ct
" (6nr63rahnrrm*l
Electronic submission from Minnesota of PPP
1 May 1, 2020 Application 1, which was routed interstate
throueh Companv l's servers outside of Minhesota
Electronic submission from Minnesota of PPP
2 May 12, 2020 Application 2, which was routed interstate
throueh Companv 1's servers outside of Minnesota

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

COUNT 3
(i\tfoney Laundering)

29. Paragraphs 1 through 28 are incorporated by reference as if fully set

forth herein.

30. On or about May 16, 2020, in the State and District of Minnesota and

elsewhere, the defendant,

KYLE WILLIAM BRENIZER,

knowingly engaged and attempted to engage in a monetary transaction by, through,

and to a financial institution, affecting interstate and foreign commerce in criminally-

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deprived property of a value greater than $10,000, that is, a check of approximately

$29,985 from defendant BRENIZER's personal account at Bank 2 for the purchase a

Harley-Davidson motorcycle, such funds having been derived from a specified

unlawful activity, namely, wire fraud.

All in violation of Title 18. United States Code. Section 1957.

cout{lr 4
(N4oney Laundering)

31. Paragraphs 1 through 28 are incorporated by reference as if fully set

forth herein.

32. On or about May 19, 2020, in the State and District of Minnesota and

elsewhere, the defendant,

KYLE WILLIAM BRENIZER,

knowingly engaged and attempted to engage in a monetary transaction by, through,

and to a fi.nancial institution, affecting interstate and foreign commerce in criminally-

deprived property of a value greater than $10,000, that is, a transfer of approximately

$500,000 from defendant BRENIZER's personal account at Bank 2 to Company 2,

such funds having been derived from a specified unlawful activity, namely, wire

fraud.

All in violation of Title 18, United States Code, Section 1957.

FORFEITURE ALLEGATIONS

33. Counts L through 4 of this Indictment are incorporated by reference for

the purpose of alleging forfeiture pursuant to Title 18, United States Code, Sections

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981(a)(1)(C) and 982(a)(1), in conjunction with Title 28, United States Code, Section

246r(c).

34. Upon conviction of any of the offenses alleged in Counts 1 and 2, as set

forth in this Indictment, defendant shall forfeit to the United States of America any

property, real or personal, which constitutes or is derived from proceeds traceable to

the violation, as provided in Title 18, United States Code, Section 981(a)(1)(C) and

Title 28, United States Code, Section 2a6I@).

35. Upon conviction of the offenses alleged in Count 3 and 4 of this

Indictment, the defendant shall forfeit to the United States pursuant to Title 18,

United States Code, Section 982(a)(1), any property, real or personal, involved in such

offense, and all property traceable to such property, including, but not limited to, the

sum of money involved in Counts 3 and 4.

36. If any of the above-described forfeitable property is unavailable for

forfeiture, the United States intends to seek the forfeiture of substitute property as

provided for in Title 21, United States Code, Section 853(p), as incorporated by Title

28, United States Code, Section 2aGI@\.

A TRUE BILL

UNITED STATES ATTORNEY FOREPERSON

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