Marietta Man Charged In Large PPP Fraud Scheme: Report

MARIETTA, GA — A Marietta man was arrested on federal bank fraud and money laundering charges after he got a fake $9.5 million Paycheck Protection Program loan in the name of a fictitious company and then allegedly using the loan proceeds to upgrade his personal lifestyle.

Carl Delano Torjagbo, known as Karl Lucius Delano, 42, of Marietta, 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.

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.

“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.”

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 for more than $9 million. To be eligible for a PPP loan, a business had to have been in operation on Feb. 15, 2020. Kremkov Industries was not eligible for a PPP loan because it was not in operation on Feb. 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 Feb. 15, 2020. Torjagbo stated that Kremkov Industries had 493 employees. Torjagbo also stated that Kremkov Industries had an average monthly payroll of more than $3.8 million. 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 more than $9.5 million 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
• 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.

“This defendant allegedly stole millions of dollars in taxpayer money intended to help small businesses stay afloat during the pandemic,” U.S. Attorney Ryan K. Buchanan said. “We will continue to investigate and charge anyone who fraudulently obtains these critical funds and uses them for their own personal gain.”