Common use of Factual Basis Clause in Contracts

Factual Basis. Defendant will plead guilty because he is in fact guilty of the charge contained in the 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 § 1B1.3: Beginning no later than 2000 and continuing through at least December 19, 2011, in the Northern District of Illinois, Eastern Division, and elsewhere, defendant ▇▇▇▇▇ ▇▇▇▇▇▇▇ did willfully and knowingly conspire with Individual A, and with others known and unknown, to defraud the United States by impeding, impairing, and obstructing the Internal Revenue Service in the correct determination and collection of revenue and income taxes, and by avoiding the payment of taxes due and owing by Company A, Company B, Shareholder A and Shareholder B, in violation of Title 18, United States Code, Section 371. Throughout the period of the charged conspiracy, defendant was employed 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 headquarters for both companies moved to Northbrook, Illinois. 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 owed. As an S corporation, the ordinary income and losses of 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 returns (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 approximately $58,195 for 2015, resulting in a total federal tax loss of approximately $341,621. This conduct also 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 charged and relevant conduct, the total federal tax loss is at least approximately $24,792,230, and a total Illinois State tax loss of approximately $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 entering his plea of guilty and does not contest their accuracy.

Factual Basis. Defendant will plead guilty because he is in fact guilty of the charge contained in the superseding 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 2000 in or around April 2013, and continuing through until in or around March 2019, at least December 19, 2011Rosemont, in the Northern District of Illinois, Eastern Division, and elsewhere, defendant defendant, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ did willfully and ▇▇, knowingly conspire with Individual Adevised, intended to devise, and with others known and unknown, participated in a scheme to defraud the United States by impeding, impairing, and obstructing the Internal Revenue Service in the correct determination and collection of revenue and income taxes, and by avoiding the payment of taxes due and owing by Company A, Company B, Shareholder A and Shareholder B, in violation of Title 18, United States Code, Section 371. Throughout the period of the charged conspiracy, defendant was employed 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 headquarters for both companies moved to Northbrook, Illinois. 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 owed. As an S corporation, the ordinary income and losses of 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 to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, as further described below. More specifically, beginning in or around December 2012, ▇▇▇▇▇▇▇▇ was the Chief Financial Officer and Manager at least approximately $5,031,195 Company A, as well as one of the five partners of Company A. As the CFO and Manager, ▇▇▇▇▇▇▇▇ was responsible for Company A's financial management, prepared Company A's financial statements, made journal entries in employment taxes that Company A's accounting system, and was a signatory and had access to Company A's bank accounts. ▇▇▇▇▇▇▇▇ 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 the period of FREMAREK's scheme, Bank A's, Bank B's, and Bank C's deposits were insured by the Federal Deposit Insurance Corporation. Also during the period of FREMAREK's scheme, ▇▇▇▇▇▇▇▇ maintained personal credit card accounts with American Express, Chase, and Barclays. ▇▇▇▇▇▇▇▇ could and did submit expense reports seeking reimbursement from Company A of business expenses incurred on FREMAREK's personal credit cards. However, ▇▇▇▇▇▇▇▇ was not assessed against or paid authorized by Company A to use Company A'sfunds to pay his personal credit card bills. Beginning no later than April 2013, FREMAREK used Company A's business banking accounts at Bank A, and 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 ▇. ▇▇▇▇▇▇▇▇ 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 ▇. ▇▇▇▇▇▇▇▇'▇ false accounting entries were included in and affected Company A's financial statements, and ▇▇▇▇▇▇▇▇ 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 Company A's bank accounts, and falsely inflated Company A's liquidity. For instance, on or about August 27, 2018, at Rosemont, in the Northern District of Illinois, Eastern Division, and elsewhere, defendant, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, 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. Also, in or around October 2018, in order to conceal his theft of funds from Company A's bank accounts, ▇▇▇▇▇▇▇▇ 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 requesting the return of access fobs for Company A's account at Bank B. For tax years 2006 through 2011In fact, the total federal tax loss caused as Company A's account at Bank B remained open, such that customers of Company A could and did make payments to that account at B, instead of Company A's account at Bank ▇. ▇▇▇▇▇▇▇▇ subsequently converted funds deposited in Company A's account at Bank B to his own benefit. As a result of the conspiracy to impedehis scheme, impair, and obstruct the Internal Revenue Service in the correct determination and collection of revenue and income taxes is therefore at least FREMAREK fraudulently obtained approximately $24,450,609. In addition, while an employee of 1,370,165.04 from Company A and Company B, defendant willfully filed materially false individual income tax returns (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 approximately $58,195 for 2015, resulting in a total federal tax loss of approximately $341,621. This conduct also 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 charged and relevant conduct, the total federal tax loss is at least approximately $24,792,230, and a total Illinois State tax loss of approximately $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 entering his plea of guilty and does not contest their accuracy.A.

Factual Basis. Defendant will plead guilty because he is in fact guilty of the charge contained in the 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 § 1B1.3doubt: Beginning no not later than 2000 July 21, 2008, and continuing through to at least December 19in or about March 2014, 2011at Rockford, in the Northern District of Illinois, Eastern Western Division, and elsewhere, defendant ▇▇▇▇▇ ▇▇▇▇▇▇▇ did willfully and knowingly conspire with Individual A▇. ▇▇▇▇▇▇, devised, intended to devise, and with others known and unknown, participated in a scheme to defraud the United States by impeding, impairingdefraud, and obstructing the Internal Revenue Service in the correct determination to obtain money and collection property by means of revenue materially false and income taxesfraudulent pretenses, promises and representations, and by avoiding concealment of material facts. On or about December 1, 2012, in the payment Northern District of taxes due Illinois, Western Division, and owing elsewhere, ▇▇▇▇▇▇, for the purpose of executing the above-described scheme, knowingly placed or caused to be placed in an authorized depository for mail matter, to be sent by United States mail according to the directions thereon, an envelope addressed to Company A at an address in Westlake, Ohio, containing a Promissory Note signed by Victim A, Company B, Shareholder A and Shareholder B, in violation of Title 18, United States Code, Section 3711341. Throughout the period Specifically, between approximately 1996 and 2014, ▇▇▇▇▇▇ lived in Rockford, Illinois and operated financial advisory companies as well as real estate companies, including Senior Securities of Rockford LLC (“SSOR LLC”) and Chicago Wealth Partners LLC (“CWP LLC”). SSOR LLC and CWP LLC were Illinois limited liability companies with their principal place of business in Rockford, Illinois, and whose sole member was ▇▇▇▇▇▇. ▇▇▇▇▇▇ operated SSOR LLC as a financial planning business. From approximately 1996 through approximately 2008, ▇▇▇▇▇▇ sold fixed annuities to retirement-age investors. Beginning in approximately 2008, ▇▇▇▇▇▇ began to encourage some of the charged conspiracyindividuals to whom ▇▇▇▇▇▇ had previously sold fixed annuities to move their money from the secure investments in fixed annuities to investments in SSOR LLC and CWP LLC, defendant was employed as which ▇▇▇▇▇▇ told investors were real estate companies in which the office manager investors could make a higher rate of return on their investment. ▇▇▇▇▇▇ used the investments in SSOR LLC and bookkeeper CWP LLC to rehab and sell homes in the Rockford, Illinois and Chicago, Illinois areas and did not explain to the investors the risky nature of this sort of investment. Instead, ▇▇▇▇▇▇ told the investors that their investments in SSOR LLC and CWP LLC would remain secure. From approximately July 2008 through December 2011, ▇▇▇▇▇▇, through SSOR LLC and CWP LLC, entered into promissory notes with investors for terms of 3 to 5 years, in which ▇▇▇▇▇▇ promised a rate of return on the investments that ranged from 6 percent to 10 percent per year. ▇▇▇▇▇▇ had some of the investors invest their money in SSOR LLC and CWS LLC through self-directed IRAs that were set up through Company ▇. ▇▇▇▇▇▇ provided information to Company A and Company B. Company A and Company B were temporary staffing companies operating about the status of these investors’ investments. This information was contained in the Chicago area that shared office space and administrative personnel. Companies A and B were headquartered in Chicago until 2009, when the headquarters for both companies moved quarterly statements mailed to Northbrook, Illinois. 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 owed. As an S corporation, the ordinary income and losses of 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 these investors by Company A and acting at defendant’s directionthat caused the investors to believe that their initial investment was secure. Between approximately June 2012 through October 2012, to impede the lawful functions ▇▇▇▇▇▇ approached some of the IRS investors 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 convinced them 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 renew their promissory notes for an S Corporation (Form 1120S) additional 5 years. At this time, ▇▇▇▇▇▇ did not disclose to the investors that SSOR LLC and in Company B’s U.S. Corporation Income Tax Return (Form 1120). The intended purpose CWP LLC were failing and effect of this was that he lacked sufficient funds to impede, impair, and obstruct repay 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 investors 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 owed 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 them pursuant to the employeeoriginal promissory notes. Defendant issued these employees a “corrected” Form W-2 reflecting the actual amount of advance EICOn or about December 1, if any2012, that the employee had received the previous calendar year. Each yearin Rockford, multiple employees who filed their Form 1040 based on the amount of advance EIC Illinois, ▇▇▇▇▇▇ knowingly placed or caused to be placed 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 letterheadan authorized depository for mail matter, 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 by United States mail according to the IRS knowing that the IRS would rely on the information directions thereon, an envelope addressed to Company A at an address in the letters. For tax years 2006 through 2011Westlake Ohio, the defendant’s falsification of advance EIC payments on the Forms 941 caused containing 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 Promissory Note signed 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 Victim A. As a result of the conspiracy scheme, ▇▇▇▇▇▇ fraudulently caused investors to impede, impair, and obstruct the Internal Revenue Service in the correct determination and collection of revenue and income taxes is therefore at least invest approximately $24,450,609842,150 in SSOR LLC and CWP LLC. In additionOnly approximately $109,792 of that amount was returned to investors, while an employee of Company A and Company B, defendant willfully filed materially false individual income tax returns (Forms 1040) for tax years 2010 through 2015 in which he underreported his income and falsely over- reported causing the amount of income withheld by his employers. This conduct resulted in investors to suffer 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, 732,257 through their investments in SSOR LLC and approximately $58,195 for 2015, resulting CWP LLC. ▇▇▇▇▇▇ acknowledges that the offense resulted in a total federal tax substantial financial hardship to five or more victims because at least 5 victims suffered substantial loss of approximately $341,621. This conduct also 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 charged and relevant conduct, the total federal tax loss is at least approximately $24,792,230, and a total Illinois State tax loss of approximately $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 entering his plea of guilty and does not contest their accuracyretirement savings.

Factual Basis. Defendant will plead guilty because he she is in fact guilty of the charge contained in the information. 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 § 1B1.3doubt: Beginning no later than 2000 From at least as early as 2012, and continuing through to at least December 19October 2, 20112020, in Rockford and Loves Park, in the Northern District of Illinois, Eastern Western Division, and elsewhere, defendant ▇▇▇▇▇ ▇▇▇▇▇▇▇ did willfully and knowingly conspire with Individual Adevised, intended to devise, and with others known participated in a scheme to defraud, and unknownto obtain money and property from Company A by means of materially false and fraudulent 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 defraud the United States by impedingCorporation A in Dubuque, impairingIowa, and obstructing the Internal Revenue Service then to defendant’s personal bank account at Bank A in the correct determination and collection of revenue and income taxesRockford, and by avoiding the payment of taxes due and owing by Company A, Company B, Shareholder A and Shareholder BIllinois, in violation of Title 18, United States Code, Section 3711343. Throughout the period Specifically, Company A was a computer numerical control shop located in Loves Park, Illinois, that made custom components for a variety of the charged conspiracy, defendant industries. Defendant was employed as the office manager and bookkeeper for Company A ▇. As the office manager, defendant’s responsibilities included, among other things, handling the accounts payable and Company B. accounts receivable. Defendant and the owner of Company A and were the only two Company B were temporary staffing companies operating A employees who had access to Company A’s bank accounts. Bank A was a bank located in the Chicago area that shared office space and administrative personnel. Companies A and B were headquartered in Chicago until 2009, when the headquarters for both companies moved to NorthbrookRockford, 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 services 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 money moved from Bank A in Rockford, Illinois, to Corporation A in Dubuque, Iowa, and ultimately back to Bank A in Rockford, Illinois. For example, on October 1, 2020, defendant deposited a $4,500 check from Company A was into her husband’s business account at Bank A. After depositing the $4,500, defendant made an S corporationonline request to move $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, Illinois, to Corporation A in Dubuque, Iowa, and as suchback to Bank A in Rockford, was required Illinois. In order 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 owed. As an S corporation, the ordinary income and losses of 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 conspiracyfurther conceal her scheme, 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 deleted in Company A’s U.S. Income Tax Return 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 an S Corporation (Form 1120S) Company A. Between 2012 and 2020, defendant issued $1,115,628.50 in Company Bchecks to herself or to her husband’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 busines from 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 ’s account without permission 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 employeeA’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 returns (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 approximately $58,195 for 2015, resulting in a total federal tax loss of approximately $341,621. This conduct also 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 charged and relevant conduct, the total federal tax loss is at least approximately $24,792,230, and a total Illinois State tax loss of approximately $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 entering his plea of guilty and does not contest their accuracyowner.