Common use of Factual Basis Clause in Contracts

Factual Basis. 6. Defendant will plead guilty because he is in fact guilty of the charge contained in Count One of the indictment. In pleading guilty, defendant admits the following facts and that those facts establish his guilt beyond a reasonable doubt and constitute relevant conduct pursuant to Guideline § 1B1.3, and establish a basis for forfeiture of the property described elsewhere in this Plea Agreement: Beginning no later than in or about May 2002, and continuing until in or about December 2008, at Deerfield and elsewhere in the Northern District of Illinois, Eastern Division, XXXXXXX X. XXXXXX (“XXXXXX”) devised and participated in a scheme to defraud U.S. Bank, and to obtain money and funds owned by and under the custody and control of U.S. Bank, by means of materially false and fraudulent pretenses and representations, in violation of Title 18, United States Code, Section 1344. During this period, U. S. Bank was a financial institution, the deposits of which were insured by the Federal Deposit Insurance Corporation (FDIC). More specifically, between May, 2002, and December, 2008, XXXXXX was a certified public accountant licensed by the State of Illinois and a tax preparer doing business as Gross and Xxxxxx, Ltd., and Xxxxxx and Associates, Inc., from offices in Deerfield, Illinois. XXXXXX provided accounting and tax preparation services to small businesses, principally medical and dental firms. As part of these services, XXXXXX prepared tax returns, including payroll tax returns and income tax returns, and monthly financial statements for clients. XXXXXX also advised clients regarding amounts due vendors of the clients, amounts to be periodically set aside and periodically paid for taxes due. XXXXXX was authorized by his clients to made payments to retirement programs and tax authorities for his clients with checks signed by his clients and drawn on clients’ accounts. Between May, 2002, and December, 2008, XXXXXX defrauded U.S. Bank by depositing more than $1.8 million in checks he misappropriated from Clients A - E into two checking accounts that he controlled at U.S. Bank and then withdrawing money from the accounts for personal use. XXXXXX used several means to do this:

Factual Basis. 6. Defendant will plead guilty because he is in fact guilty of the charge contained in Count One of the indictmentinformation. In pleading guilty, defendant admits the following facts and that those facts establish his guilt beyond a reasonable doubt and constitute relevant conduct pursuant to Guideline § 1B1.3, and establish a basis for forfeiture of the property described elsewhere in this Plea Agreement: Beginning no later than in or about May 2002, 2000 and continuing until in or about through at least December 200819, at Deerfield and elsewhere 2011, in the Northern District of Illinois, Eastern Division, and elsewhere, defendant XXXXX XXXXXXX X. XXXXXX (“XXXXXX”) devised did willfully and participated in a scheme knowingly conspire with Individual A, and with others known and unknown, to defraud U.S. Bankthe United States by impeding, impairing, and to obtain money obstructing the Internal Revenue Service in the correct determination and funds owned collection of revenue and income taxes, and by avoiding the payment of taxes due and under the custody owing by Company A, Company B, Shareholder A and control of U.S. Bank, by means of materially false and fraudulent pretenses and representationsShareholder B, in violation of Title 18, United States Code, Section 1344371. During this periodThroughout the period of the charged conspiracy, U. S. Bank defendant was a financial institutionemployed as the office manager and bookkeeper for Company A and Company B. Company A and Company B were temporary staffing companies operating in the Chicago area that shared office space and administrative personnel. Companies A and B were headquartered in Chicago until 2009, when the deposits of which were insured by the Federal Deposit Insurance Corporation (FDIC). More specifically, between May, 2002, and December, 2008, XXXXXX was a certified public accountant licensed by the State of Illinois and a tax preparer doing business as Gross and Xxxxxx, Ltd., and Xxxxxx and Associates, Inc., from offices in Deerfieldheadquarters for both companies moved to Northbrook, Illinois. XXXXXX provided accounting Company A was an S corporation, and as such, was required to annually file a U.S. Income Tax Return for an S Corporation (Form 1120S) that reported the ordinary income or loss and amount of tax preparation services to small businesses, principally medical and dental firmsowed. As part an S corporation, the ordinary income and losses of these services, XXXXXX prepared tax returns, including payroll the business flowed through and were reported on its shareholders’ federal income tax returns (Form 1040). Shareholder A was president of Company A and owned 60 percent of the shares of Company A. Shareholder B was the secretary of Company A and owned 40 percent of the shares of Company A. Company B was required to annually file a U.S. Corporation Income Tax Return (Form 1120) and pay taxes based upon the amount of income reported. For the duration of the charged conspiracy, defendant prepared and filed with the IRS the Employer’s Quarterly Federal Tax Return (Form 941) for Company A and Company B, and prepared and issued Forms W-2 (Wage and Tax Statement) for employees of both companies. Defendant conspired with Individual A, an independent contractor employed by Company A and acting at defendant’s direction, to impede the lawful functions of the IRS and avoid the payment of taxes due and owing by falsifying information reported in quarterly Forms 941 of Companies A and B and in the Forms W-2 of employees of Company A and Company B for the duration of the charged conspiracy. Specifically, defendant avoided the assessment and payment of tax by falsely inflating the amount of advance Earned Income Credit (EIC) payments reported on Forms 941 filed by Company A and Company B. The IRS treated advance EIC payments by an employer as deposits of income tax withholding and of employee and employer social security and Medicare taxes. By falsifying the amount of advance EIC reported on Company A and Company B’s Forms 941, defendant intended to fraudulently reduce or eliminate the employment tax liability of Company A and Company B. The amount of falsified advance EIC varied over the course of the conspiracy, but a majority of the advance EIC reported for at least most of the quarters was false. In addition, by falsifying the advance EIC payments in the Forms 941 of Company A and Company B, defendant intended to and did cause the underreporting of annual ordinary business income in Company A’s U.S. Income Tax Return for an S Corporation (Form 1120S) and in Company B’s U.S. Corporation Income Tax Return (Form 1120). The intended purpose and effect of this was to impede, impair, and obstruct the payment of taxes due and owing by Company A, Company B, Shareholder A and Shareholder B. Because Company A was a Subchapter S corporation, corporate income and losses were passed through to Shareholder A and Shareholder B, resulting in a reduction in individual tax liability by Shareholder A and Shareholder B. To conceal the existence of the conspiracy, each year defendant directed Individual A, and Individual A agreed to falsify and inflate the advance EIC payments reported on Forms W-2s issued to employees of Company A and Company B to match the amounts of advance EIC payments that defendant falsified and inflated on the Forms 941 for Company A and Company B. It was the practice of Company A and Company B to make employee Forms W-2 available for pick-up at their offices. Defendant was aware that a majority of employees of Company A and Company B did not pick up their Forms W-2 from the offices of Companies A and B and did not file individual income tax returns (Forms 1040) with the IRS. Defendant knew that for this reason a majority of employees of Company A and Company B never learned that the advance EIC payments on their Forms W-2 were falsified and inflated by defendant, which furthered the conspiracy by making it less likely that the IRS would discover what defendant and Individual A had fraudulently agreed to do. Of the employees who picked up their Forms W-2 from Company A or Company B, each year multiple employees notified defendant, either directly or through an employee of Company A or Company B, that the advance EIC amount listed on their Form W-2 did not reflect the actual amount of advance EIC, if any, paid to the employee. Defendant issued these employees a “corrected” Form W-2 reflecting the actual amount of advance EIC, if any, that the employee had received the previous calendar year. Each year, multiple employees who filed their Form 1040 based on the amount of advance EIC in the “corrected” Form W-2 received a notice from the IRS informing them that the amount of advance EIC reported in the employee’s Form 1040 income tax return did not match the amount of advance EIC reported in the Form W-2 filed by Company A and/or Company B. Defendant provided these employees with letters—written on Company A or Company B letterhead, addressed to the IRS and signed by defendant—stating that the earnings reported by the employee were correct and that the Form W-2 filed by Company A or Company B was inaccurate due to a computer error and/or that the employee did not receive advance EIC payments during the previous year. Defendant intended the letters to conceal from the IRS the existence of the underlying conspiracy, and caused these letters to be sent to the IRS knowing that the IRS would rely on the information in the letters. For tax years 2006 through 2011, the defendant’s falsification of advance EIC payments on the Forms 941 caused a loss of at least approximately $2,722,601 in income tax that was not assessed against Shareholder A, at least approximately $1,795,960 in income tax that was not assessed against Shareholder B, at least approximately $1,650,498 in income tax that was not assessed against Company B, at least approximately $13,250,355 in employment taxes that were not assessed against or paid by Company A, and at least approximately $5,031,195 in employment taxes that were not assessed against or paid by Company B. For tax years 2006 through 2011, the total federal tax loss caused as a result of the conspiracy to impede, impair, and obstruct the Internal Revenue Service in the correct determination and collection of revenue and income taxes is therefore at least approximately $24,450,609. In addition, while an employee of Company A and Company B, defendant willfully filed materially false individual income tax returnsreturns (Forms 1040) for tax years 2010 through 2015 in which he underreported his income and falsely over- reported the amount of income withheld by his employers. This conduct resulted in a federal tax loss of approximately $83,859 for 2010, approximately $93,023 for 2011, approximately $58,458 for 2012, approximately $37,774 for 2013, approximately $10,312 for 2014, and monthly financial statements approximately $58,195 for clients2015, resulting in a total federal tax loss of approximately $341,621. XXXXXX This conduct also advised clients regarding amounts due vendors resulted in a Illinois State tax loss amount of approximately $6,134 for 2010, approximately $11,926 for 2011, approximately $5,731 for 2012, approximately $3,543 for 2013, approximately $1,775 for 2014, and approximately $3,495 for 2015, resulting in a total Illinois State tax loss of approximately $32,604. Therefore, as a result of the clientscharged and relevant conduct, amounts to be periodically set aside and periodically paid for taxes due. XXXXXX was authorized by his clients to made payments to retirement programs and the total federal tax authorities for his clients with checks signed by his clients and drawn on clients’ accounts. Between May, 2002loss is at least approximately $24,792,230, and December, 2008, XXXXXX defrauded U.S. Bank by depositing more than a total Illinois State tax loss of approximately $1.8 million 32,604. The above loss figures for the charged and relevant conduct are based on the government’s calculations. The defendant is relying on the above figures in checks he misappropriated from Clients A - E into two checking accounts that he controlled at U.S. Bank entering his plea of guilty and then withdrawing money from the accounts for personal usedoes not contest their accuracy. XXXXXX used several means to do this:Maximum Statutory Penalties

Factual Basis. 6. Defendant will plead guilty because he is in fact guilty of the charge contained in Count One of the indictmentsuperseding information. In pleading guilty, defendant admits the following facts and that those facts establish his guilt beyond a reasonable doubt and constitute relevant conduct pursuant to Guideline § 1B1.3lBl.3, and establish a basis for forfeiture of the property described elsewhere in this Plea Agreement: Beginning no later than in or about May 2002around April 2013, and continuing until in or about December 2008around March 2019, at Deerfield and elsewhere Rosemont, in the Northern District of Illinois, Eastern Division, and elsewhere, defendant, XXXXXXX X. XXXXXX (“XXXXXX”) devised XXXXXXXX, knowingly devised, intended to devise, and participated in a scheme to defraud U.S. BankCompany A, and to obtain money and funds owned by and under the custody and control of U.S. Bank, property by means of materially false and fraudulent pretenses and pretenses, representations, and promises, as further described below. More specifically, beginning in violation or around December 2012, XXXXXXXX was the Chief Financial Officer and Manager at Company A, as well as one of Title 18the five partners of Company A. As the CFO and Manager, United States CodeXXXXXXXX was responsible for Company A's financial management, Section 1344prepared Company A's financial statements, made journal entries in Company A's accounting system, and was a signatory and had access to Company A's bank accounts. XXXXXXXX also was responsible for reporting information regarding Company A's finances to Company A's banks and communicating with Company A's customers with respect to outstanding accounts receivable. Under the terms of Company A's operating agreement, FREMAREK could not take certain actions-including lending any money or extending credit to any person, other than in the ordinary course of business; making any distribution of Company A funds; withdrawing or reducing capital contributions to Company A; and modifying the compensation of any employee-without the approval of a majority or supermajority of the partners. At various times during the period of FREMAREK's scheme, Company A maintained business banking accounts with Bank A, a financial institution headquartered m Schaumburg, Illinois; Bank B, a financial institution headquartered m Rosemont, Illinois; and Bank C, a financial institution headquartered in Bridgeview, Illinois. More specifically, Company A maintained a business banking account: with Bank A, beginning in or about December 2012 until in or about November 2015; with Bank B, beginning in or about November 2015 until in or about October 2018; and with Bank C, beginning in or about October 2018. During this periodthe period of FREMAREK's scheme, U. S. Bank was a financial institutionA's, the Bank B's, and Bank C's deposits of which were insured by the Federal Deposit Insurance Corporation (FDIC)Corporation. More specificallyAlso during the period of FREMAREK's scheme, between MayXXXXXXXX maintained personal credit card accounts with American Express, 2002Chase, and DecemberBarclays. XXXXXXXX could and did submit expense reports seeking reimbursement from Company A of business expenses incurred on FREMAREK's personal credit cards. However, 2008XXXXXXXX was not authorized by Company A to use Company A'sfunds to pay his personal credit card bills. Beginning no later than April 2013, XXXXXX was a certified public accountant licensed by the State of Illinois and a tax preparer doing FREMAREK used Company A's business as Gross and Xxxxxx, Ltd.banking accounts at Bank A, and Xxxxxx later, at Bank B, to make payments by ACH transfer on his personal credit cards for personal expenses, without the knowledge or authorization of Company X. XXXXXXXX concealed his theft offunds from Company A's bank accounts by making false entries in Company A's accounting system, which disguised payments to FREMAREK's personal credit cards as seemingly legitimate business expenses of Company X. XXXXXXXX'x false accounting entries were included in and Associatesaffected Company A's financial statements, Inc.and XXXXXXXX knowingly submitted false documents to Company A's banks, to include Bank B and Bank C, which overstated Company A's assets, concealed FREMAREK's theft of funds from offices Company A's bank accounts, and falsely inflated Company A's liquidity. For instance, on or about August 27, 2018, at Rosemont, in Deerfieldthe Northern District of Illinois, Eastern Division, and elsewhere, defendant, XXXXXXX XXXXXXXX, for the purpose of executing and attempting to execute his scheme, did knowingly cause to be transmitted by means of wire communication in interstate commerce certain writings, signs, and signals, namely a payment of $47,576.14 from Company A's account at Bank B, in the Northern District of Illinois, to defendant's American Express credit card account, which was processed through an American Express server located outside Illinois. XXXXXX provided accounting Also, in or around October 2018, in order to conceal his theft of funds from Company A's bank accounts, XXXXXXXX falsely represented to his partners that Company A's account at Bank B was closed, by sending a statement showing a $0 closing balance to his partners and tax preparation services requesting the return of access fobs for Company A's account at Bank B. In fact, Company A's account at Bank B remained open, such that customers of Company A could and did make payments to small businessesthat account at B, principally medical and dental firmsinstead of Company A's account at Bank X. XXXXXXXX subsequently converted funds deposited in Company A's account at Bank B to his own benefit. As part a result of these serviceshis scheme, XXXXXX prepared tax returns, including payroll tax returns and income tax returns, and monthly financial statements for clients. XXXXXX also advised clients regarding amounts due vendors of the clients, amounts to be periodically set aside and periodically paid for taxes due. XXXXXX was authorized by his clients to made payments to retirement programs and tax authorities for his clients with checks signed by his clients and drawn on clients’ accounts. Between May, 2002, and December, 2008, XXXXXX defrauded U.S. Bank by depositing more than FREMAREK fraudulently obtained approximately $1.8 million in checks he misappropriated 1,370,165.04 from Clients A - E into two checking accounts that he controlled at U.S. Bank and then withdrawing money from the accounts for personal use. XXXXXX used several means to do this:Company A. Maximum Statutory Penalties

Factual Basis. 6. Defendant will plead guilty because he she is in fact guilty of the charge contained in Count One of the indictmentinformation. In pleading guilty, defendant admits the following facts and that those facts establish his her guilt beyond a reasonable doubt and constitute relevant conduct pursuant to Guideline § 1B1.3, and establish a basis for forfeiture of the property described elsewhere in this Plea Agreementdoubt: Beginning no later than in or about May 2002From at least as early as 2012, and continuing until to at least October 2, 2020, in or about December 2008Rockford and Loves Park, at Deerfield and elsewhere in the Northern District of Illinois, Eastern Western Division, XXXXXXX X. XXXXXX (“XXXXXX”) devised and elsewhere, defendant knowingly devised, intended to devise, and participated in a scheme to defraud U.S. Bankdefraud, and to obtain money and funds owned by and under the custody and control of U.S. Bank, property from Company A by means of materially false and fraudulent pretenses pretenses, representations, and promises. On or about October 1, 2020, at Rockford and Loves Park, in the Northern District of Illinois, Western Division, for the purpose of executing the scheme to defraud and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, defendant knowingly caused to be transmitted in interstate commerce by means of wire communication, certain writings, signs, and signals, namely, a $2,800 online transfer from defendant’s husband’s business account at Bank A in Rockford, Illinois, to Corporation A in Dubuque, Iowa, and then to defendant’s personal bank account at Bank A in Rockford, Illinois, in violation of Title 18, United States Code, Section 13441343. During this periodSpecifically, U. S. Company A was a computer numerical control shop located in Loves Park, Illinois, that made custom components for a variety of industries. Defendant was the office manager for Company X. As the office manager, defendant’s responsibilities included, among other things, handling the accounts payable and accounts receivable. Defendant and the owner of Company A were the only two Company A employees who had access to Company A’s bank accounts. Bank A was a bank located in Rockford, Illinois. Defendant’s husband had a business account at Bank A to which defendant had access. Defendant and her husband also had a personal checking account at Bank A to which defendant had access. Corporation A was a financial institutionservices company based in Dubuque, Iowa, and was the parent for Bank A. All transfers between accounts at Bank A in Rockford, Illinois went through Corporation A in Dubuque, Iowa. In 2012, defendant started issuing checks to herself from Company A’s bank account without permission from Company A’s owner. Defendant forged the signature of Company A’s owner on the checks. Defendant then deposited the checks into her personal bank account. At some point, in order to make it appear that the checks were for legitimate business purposes, defendant started issuing checks to her husband’s company from Company A’s bank account without permission from Company A’s owner. Defendant forged the signature of Company A’s owner on these checks as well. Defendant deposited the checks issued to her husband’s company in her husband’s business bank account at Bank A and then executed online requests to move the money from the business account at Bank A to her personal account at Bank A. In executing these online transactions, the deposits of which were insured by the Federal Deposit Insurance money moved from Bank A in Rockford, Illinois, to Corporation (FDIC). More specificallyA in Dubuque, between May, 2002Iowa, and December, 2008, XXXXXX was a certified public accountant licensed by the State of Illinois and a tax preparer doing business as Gross and Xxxxxx, Ltd., and Xxxxxx and Associates, Inc., from offices ultimately back to Bank A in DeerfieldRockford, Illinois. XXXXXX provided accounting and tax preparation services For example, on October 1, 2020, defendant deposited a $4,500 check from Company A into her husband’s business account at Bank A. After depositing the $4,500, defendant made an online request to small businessesmove $2,800 of the $4,500 to her personal account at Bank A. The $2,800 account transfer traveled via wire transmission from Bank A in Rockford, principally medical and dental firms. As part of these servicesIllinois, XXXXXX prepared tax returnsto Corporation A in Dubuque, including payroll tax returns and income tax returnsIowa, and monthly financial statements back to Bank A in Rockford, Illinois. In order to further conceal her scheme, defendant deleted in Company A’s system the checks that she issued to herself or her husband’s business and created false invoices to make it appear that the money she took was normal business expenditures for clients. XXXXXX also advised clients regarding amounts due vendors of the clientsCompany A. Between 2012 and 2020, amounts to be periodically set aside and periodically paid for taxes due. XXXXXX was authorized by his clients to made payments to retirement programs and tax authorities for his clients with checks signed by his clients and drawn on clients’ accounts. Between May, 2002, and December, 2008, XXXXXX defrauded U.S. Bank by depositing more than defendant issued $1.8 million 1,115,628.50 in checks he misappropriated to herself or to her husband’s busines from Clients A - E into two checking accounts that he controlled at U.S. Bank and then withdrawing money from the accounts for personal useCompany A’s account without permission of Company A’s owner. XXXXXX used several means to do this:Maximum Statutory Penalties