central coast real estate scam - kelly gearhart

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STEPHANIE YONEKURA Acting United States Attorney ROBERT E. DUGDALE Assistant United States Attorney Chief, Criminal Division STEPHEN I. GOORVITCH (California State Bar #199325) Assistant United States Attorney Major Frauds Section

1100 United States Courthouse 312 North Spring Street Los Angeles, California 90012 Telephone: (213) 894-2476 Facsimile: (213) 894-6269 E-mail: [email protected]

Attorneys for Plaintiff UNITED STATES OF AMERICA

UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA UNITED STATES OF AMERICA,

Plaintiff, v.

KELLY GEARHART, Defendant.

Case No. 12-CR-631-ODW GOVERNMENTS SENTENCING POSITION [EXHIBITS FILED UNDER SEPARATE COVER AND FILED UNDER SEAL] Sentencing Hearing: June 1, 2015, at 11:00 a.m.

Plaintiff United States of America, by and through its counsel of record, the United States Attorney for the Central District of California and Assistant United States Attorney Stephen I. Goorvitch, hereby files its sentencing position in this matter. The governments sentencing position is based upon the attached memorandum of points and authorities, the presentence investigation report (the PSR), the files and records in this case, and any evidence and argument that may be presented at the sentencing hearing, which is currently scheduled for June 1, 2015, at 11:00 a.m.

Case 2:12-cr-00631-ODW Document 61 Filed 04/10/15 Page 1 of 21 Page ID #:238

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The government is seeking to file the exhibits under separate cover, as some should be sealed, pursuant to the Courts sealing orders or Federal Rule of Criminal Procedure 6(e). Defendant does not object to filing the exhibits under seal. DATED: April 10, 2015 Respectfully submitted,

STEPHANIE YONEKURA Acting United States Attorney ROBERT E. DUGDALE Assistant United States Attorney Chief, Criminal Division /s/ Stephen I. Goorvitch_____ STEPHEN I. GOORVITCH Assistant United States Attorney Major Frauds Section Attorneys for Plaintiff UNITED STATES OF AMERICA


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MEMORANDUM OF POINTS AND AUTHORITIES I.

INTRODUCTION The government concurs with the findings and conclusions in the PSR except as they relate to the number of victims and, therefore, the loss amount. In fact, there are over 250 victims, and the losses are at least $14,718,690 (but less than $20 million). Therefore, the total offense level is 33 (and not 29, per the PSR), resulting in a sentencing range of 135 to 168 months imprisonment. The government believes the sentencing enhancement most in dispute is whether the Court should apply a two-level or a six-level enhancement based upon the number of victims. The disagreement over loss would not affect the Sentencing Guidelines calculations, as both the PSR and the government believe the loss is between $7 million and $20 million. The probation officer recommends a sentence of 87 months imprisonment. See Recommendation Letter. Defendant concedes that he should receive a sentence of at least 57 months. See Plea Agreement at 2(i). However, the government believes that a more stringent sentence is appropriate, based upon the scope of the fraud and the devastating impact upon the victims. Should the Court adopt the governments position and find that the total offense level is 33, the government respectfully recommends that the Court to sentence defendant to 135 months imprisonment. See Plea Agreement at 4(e)(1). Even if the Court adopts the probation officers position and finds that the total offense level is 29, the government respectfully recommends that the Court sentence defendant to 108 months imprisonment. See Plea Agreement at 4(e)(3).


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II. FACTUAL BACKGROUND

A. Defendants Business Defendant was a real estate developer in San Luis Obispo County, California, and he funded his real estate development projects through investment. See PSR 24. Defendant raised money for his projects through a hard money lender called Hurst Financial Corporation (Hurst Financial). See PSR 22. Hurst Financial was owned and operated by James Hurst Miller Jr., who pleaded guilty in Case No. 11-CR-793-ODW and will be sentenced on July 27, 2015. See id. Millers daughter, Courtney Brard, also worked at Hurst Financial. See PSR 23. Hurst Financial would act as a middle man between individual investors and defendant. See PSR 22. Hurst Financial recruited investors, executed investment contracts, collected the funds, disbursed the funds to defendant, collected the payments from defendant, and paid the investors back. See id. Miller and Brard promised investors that their money would be earmarked for certain projects. See PSR 23. Defendant also communicated directly with certain victims and made the same promises as Miller and Brard, namely, that victims investments would be used to develop specific projects and would be secured by specific pieces of property. See PSR 26. Eventually, defendants business failed, at which point the fraud came to light.


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B. Summary of the Fraud This case can be summarized in one sentence: Defendant solicited funds from victims by making false promises, which he did not honor. Defendant made three sets of false promises. First, defendant told victims that he would use their money to develop specific real estate projects, but instead spent their money for other things, like making interest payments to other investors. More important, defendant promised victims that their investments would be secured by specific lots. Second, defendant told victims that he would sell them specific plots of land. This was fraud for two different reasons. Those lots were being used to secure investments to develop the property, so defendant was not authorized to sell them. Also, defendant sold the same lots multiple times to different people. Third, after defendant used the lots to secure investments and sold the same lots to different people, defendant (with the assistance of Miller) made it appear as though he owned the lots outright and used them as collateral to obtain loans from two different banks. In other words, defendant tricked the banks into loaning him money. C. Defendants Misrepresentations to Develop Real Estate Projects 1. Vista Del Hombre The focus of the governments case at sentencing will be on one real estate development project called Vista Del Hombre (hereinafter VDH), which was a golf course on which defendant was going to build an office park. See Exhibit #5. As discussed, defendant promised victims that he would use their money to develop this project and


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that their investments would be secured by certain lots underlying the VDH project. For example, defendant promised Del Robasciotti and Nitsan Kolikant that their $190,000 investment would be used to develop VDH and would be secured by Lot #18. See PSR 38-40. It was important to Del Robasciotti that his investment was secured by Lot #18, because it had a building on it, based upon which he knew that he could recover something if defendants business failed. See Exhibit #6 at pp. 156-62. Defendant promised both Annette Le Duc and Joan Warnisher that each of their investments of $50,000 would be used to develop VDH and would be secured by Lot #10. See PSR 41-42.1 Defendant promised Jeanette Gruidl (formerly known as Jeanette Paul) that her $400,000 investment would be used to develop VDH and would be secured by Lot #26 through Lot #28. See PSR 43. Defendant promised Jeanette Barnard that her $250,000 investment rolled over from other projects would be used to develop VDH and would be secured by certain VDH lots. See PSR 44. Defendant also promised Clotilde Julien that her VDH investment would be secured by Lot #3. See PSR 45. As will be discussed below, defendant then tried to sell some of those same lots (e.g., Lot #18) to other victims. Then, defendant had Miller clear title to all of the lots lots that were being used to safeguard victims investments and used them as collateral to obtain bank loans.

1 The PSR incorrectly refers to this victim as Jennifer

Warnisher.


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2. Other Projects The bulk of the governments case focuses on VDH because there is the strongest evidence of fraud. There are, however, other projects and victims at issue in this case. For example, Robert Olson invested $450,000 in a project located at 5901 East Mall Avenue in the City of Atascadero. See PSR 46. Defendant promised him that the money would be used to purchase the lot and construct a building. See PSR 46. However, nothing was built on the lot, and Olson eventually foreclosed on the property. See PSR 46. Similarly, Thomas Wooldridge invested a total of $875,000 in two of defendants projects, one on Atascadero Avenue and another on San Rafael Road. See PSR 48. The investments were secured by Lot #6 of the Atascadero Avenue project and Lot #42 of the San Rafael Road project. See PSR 48-49. However, then defendant transferred Lot #42 of the San Rafael Road project to someone else without Wooldridges knowledge. See PSR 51. 3. Summary The PSR finds that there were 10 victims who communicated directly with defendant and invested based upon his false promises. For purposes of sentencing, the losses for these victims are $2,370,000. See PSR 67.2

2 The losses associated with the 15 victims who communicated

directly with defendant total $6,620,000. See PSR 67. Of this total, $4,250,000 came from victims who thought they were purchasing VDH lots. See PSR 27-36, 52. Therefore, the remaining victims invested $2,370,000. See PSR 37-51.


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D. Defendants Misrepresentations to Sell Lots Then, defendant sold certain Vista Del Hombre lots including those securing victims investments to five victims. Defendant sold Lot #16 and Lot #18 to Umer and Usman Iqbal for $1 million in total. See PSR 28-29. Defendant did so, even though Lot #18 was securing Del Robasciotti and Nitsan Kolikants investment, as discussed above. However, defendant never transferred title to either of the brothers. See PSR 30. Defendant sold Lot #16 and Lot #18 to Charles Liddell. See PSR 32-33. These are the same lots defendant sold to the Iqbal brothers, and Lot #18 was securing Del Robasciotti and Nitsan Kolikants investment. Not only did defendant not transfer title of those lots to Charles Liddell (or the Iqbal brothers), he gave Liddell four contracts with the wrong lot numbers (specifically, Lot #15, Lot #17, Lot #21, and Lot #22). See Exhibit #7 through Exhibit #10. Defendant sold Lot #16 to Moe Abarghoei. See PSR 36. This is the same lot that he sold to the Iqbal brothers and Charles Liddell. However, defendant transferred title to Lot #17 to Abarghoei, which is the same lot listed on Charles Liddells contact. See PSR 36. Finally, defendant sold Lot #13 to Michael Hawkins. See PSR 52. In total, defendant defrauded these victims out of $4.25 million. See PSR 37-51. E. Defendants Fraudulent Loan Applications Then, defendant applied for loans from Heritage Oaks Bank and San Luis Trust Bank by misrepresenting that that he and/or his limited liability corporation Vista Del Hombre LLC owned the VDH


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lots that he pledged as collateral for the loans. See PSR 53. Defendant persuaded Miller to clear title and reconvey those lots back to defendant. See PSR 53. Specifically, Hurst Financial reconveyed Lot #1 through Lot #20 and Lot #23 to Lot #37 back to Vista Del Hombre, L.L.C. See PSR 55. Defendant then used those lots the same lots that were securing victims investments and that defendant sold (on multiple occasions to different victims) to obtain $3,037,000 in bank loans. See PSR 53-59. Specifically, defendant obtained: (1) a $1 million loan from Heritage Oaks Bank, which was later increased to $1.5 million; (2) a $250,000 loan from Heritage Oaks Bank; (3) a $350,000 loan from San Luis Trust Bank; and (4) a $937,000 loan from San Luis Trust Bank. See PSR 58-59. F. Defendant Misused Money Earmarked for Vista Del Hombre Defendant also misused funds that were earmarked for the VDH project. According to Millers Quickbooks accounting records, defendant received $17,955,617 in investors funds relating to VDH. See Exhibit #1. According to defendants Quickbooks records, defendant spent only approximately $2,659,302 of those funds on developing the VDH project. See id.; see also Exhibit #2. Defendants Quickbooks show that defendant used approximately $7,890,148 to make interest payments to VDH investors. See id. This is largely confirmed by Hurst Financials Quickbooks accounting records that indicate defendant paid approximately $7,865,125 in interest payments. See Exhibit #1. Not only do the accounting records show that defendant was making interest payments from other victims investments, the VDH project never generated significant


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revenue, if any, so those payments necessarily came from other sources. Of the funds that defendant received from Hurst Financial, approximately $12,931,190 were transferred to accounts in the names of defendant and his wife. See Exhibit #3 and Exhibit #4. The governments position is not that defendant stole all of that money. Rather, the evidence demonstrates that defendant commingled all of his money. See Exhibit #1, Exhibit #3, and Exhibit #4. See also Exhibit #11 at p. 446. Defendant may have spent some of the money in his personal accounts on things related to VDH. See Exhibit #3 and Exhibit #4. However, a review of that account demonstrates that defendant also spent money on things other than the VDH project, including paying interest and expenses associated with other real estate projects, in contravention of his promises. See Exhibit #3 and Exhibit #4. Perhaps more important, defendant took a draw from the investments, which was his only source of income, see Exhibit #11 at pp. 449-50. In that sense, defendant and his wife were living off his failing business while making false promises to victims. This is corroborated by Nancie Secher, who was defendants accountant until 2004 or 2005. See Exhibit #11 at pp. 442-43. Secher reported that defendant was losing money on a good majority of his real estate development projects. See id. at p. 444. Secher said that she reported that to defendant, but he continued to spend money that he did not have. See id. at pp. 444-45. According to Secher, defendant believed that he was entitled to spend all of his revenue without regard to the expenses associated with those projects. See id. at pp. 445. Secher reported that defendant


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continued to raise money for real estate development projects, even after she told defendant that he was losing money. See id. at pp. 449-450, 452. However, defendant continued to take an a draw his only source of income during this same time period. See id. at pp. 449, 454. Peggy Hutchins corroborated Sechers account. She began working for defendant in September 2004. See Exhibit #12 at p. 469. Hutchins remained until defendants business failed. See id. at p. 473. She confirmed that defendant was transferring money into his personal account. See id. at p. 471. Hutchins also confirmed that defendant was borrowing money from Hurst Financial in order to make interest payments to other investors, see Exhibit #12 at pp. 472-73, which contradicts his representations that money would be used to develop certain real estate projects. Finally, Hutchins corroborated that Secher informed defendant that he was losing money on his projects. See id. at p. 479. Therefore, the evidence demonstrates that defendant was raising money, even though he knew he was losing money on his real estate development projects, and that he used some of that money to live. The evidence also demonstrates that defendant was spending money on things other than the intended purposes. Regardless, how defendant spent the VDH money is of less relevance to the sentencing proceedings, because: (1) It would not change the Sentencing Guidelines loss enhancement; and (2) Regardless of how he spent the money, defendant still stole the lots securing the victims investments, sold them to different people, and then used them to obtain bank loans that he could not pay back. So, even if defendant


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spent every penny of the VDH money lawfully, there would still be fraud upon the over 250 VDH investors.

III. OBJECTIONS TO PSR

The government raises two objections to the PSR. First, the PSR finds that there are only 17 victims (the 15 individuals who communicated directly with defendant and the two banks who loaned him money). See PSR 78. Therefore, the PSR finds a two-level victim enhancement under U.S.S.G. 2B1.1(b)(2)(A). The government objects because there are over 250 victims, resulting in a six-level victim enhancement under U.S.S.G. 2B1.1(b)(2)(C). Second, the PSR finds that there $6,620,000 in losses to the 15 individual victims and $3,037,500 in losses to the banks. See PSR 79. Therefore, the PSR finds a 20-level loss enhancement under U.S.S.G. 2B1.1(b)(1)(K). Because there are additional victims, the government believes that the losses total at least $14,718,690 (but less than $20 million). However, that would not change the loss enhancement recommended by the PSR.

IV. SENTENCING GUIDELINES CALCULATIONS

A. Summary The government believes that the following Sentencing Guidelines should apply to this case: Base Offense Level : 7 [U.S.S.G. 2B1.1(a)(1)] Losses Between $7M and $20M : +20 [U.S.S.G. 2B1.1(b)(1)(K)] Over 250 Victims : +6 [U.S.S.G. 2B1.1(b)(2)(C)]


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Over $1M from Financial Institutions : +2 [U.S.S.G. 2B1.1(b)(16)(A)] Money Laundering Enhancement : +1 [U.S.S.G. 2S1.1(b)(2)(A)] Acceptance of Responsibility : -3 [U.S.S.G. 3E1.1] Total Offense Level : 33 The difference between the governments calculations and those in the PSR is the victim enhancement. The PSR finds that there are only 17 victims, resulting in a two-level victim enhancement. The government believes that there are over 250 victims, resulting in a six-level victim enhancement. As far as the government is concerned, this is the main Sentencing Guidelines issue in dispute. B. Base Offense Level

Defendant pleaded guilty to mail and wire fraud charges, which have a statutory maximum sentence of 20 years imprisonment. Therefore, the PSR correctly finds that the base offense level is 7. See U.S.S.G. 2B1.1(a)(1). C. Number of Victims 1. Summary of Issue The PSR limits the number of victims to only those people who talked directly to defendant out of an abundance of caution. See PSR 83. In doing so, the PSR excludes victims who relied on Miller and Brards promises, which the government believes were made with defendants knowledge and consent. In other words, the PSR concludes that someone is not a victim for purposes of sentencing unless the government can prove that they spoke directly with defendant (and then finds that the evidence was insufficient in this regard). While


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the government has great respect for the U.S. Probation Office, the PSR is incorrect in this respect because defendant is responsible for his relevant conduct, and losses from Miller and Brards representations were entirely foreseeable to him. In fact, there is ample corroboration for the fact that Miller and Brard made those misrepresentations on behalf of defendant, especially because defendant made those same misrepresentations himself. Regardless, even accepting the PSRs view of relevant conduct and limiting the number of victims to only those to whom defendant communicated directly, there are still over 250 victims. Even if defendant never spoke to the vast majority of the VDH investors, he knew that their investments were secured by the VDH lots. When he sold the lots out from under the victims and cleared title to those lots and used them to obtain bank financing, he turned every VDH investor into a victim. Finally, defendant attempted to lull the VDH victims into maintaining their investments and not raise issues. Therefore, there are over 250 victims.3 2. Relevant Conduct The U.S. Sentencing Guidelines define an offense as the offense of conviction and all relevant conduct under [U.S.S.G.] 1B1.3. U.S.S.G. 1B1.1, Application Note #1(H). Relevant conduct includes all acts and omissions committed, aided, abetted,

3 The government believes that defendant objects to the argument

that every VDH investor is a victim. However, the government does not believe that defendant disputes that there were, in fact, over 250 investors in VDH. If the government is incorrect, it will proffer evidence to establish that there were over 250 investors in VDH.


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counseled, commanded, induced, procured, or willfully caused by defendant. U.S.S.G. 1B1.3(a)(1)(A). Put another way, defendant is responsible for all losses from his crime that are foreseeable to him. See U.S.S.G. 2B1.1, n.3(A)(i). Defendant is responsible for all losses associated with the VDH project because he induced Miller and Brard to make misrepresentations on his behalf. Specifically, defendant told Miller and Brard that the money they raised would be used for specific projects, which they then repeated to the victims. This is clear from the factual basis in Millers plea agreement. See Exhibit #13. This is also clear from the governments interview with Courtney Brard. See Exhibit #14 at pp. 2-3. The government wishes to disclose that Miller pleaded guilty in Case No. 11-CR-793-ODW and presumably expects to receive a benefit under U.S.S.G. 5K1.1. It is also true that Courtney Brard received immunity in this matter. However, their reports that defendant stated that he would use money for specific projects are corroborated by the fact that defendant personally told numerous victims that he would use their money to develop VDH. For example, defendant made that representation to Del Robasciotti, Nitsan Kolikant, Annette Le Duc, Joan Warnisher, and Jeanette Gruidl. See PSR 38-43. Simply, the fact that defendant made the same misrepresentations to his victims confirms that he also made them to Miller and Brard. Moreover, defendant deposited victims funds in different checking accounts, each of which had the name of a specific project. See Exhibit #11 at pp. 469-70; see also Exhibit #3 and Exhibit #4. The fact that defendant deposited funds in checking


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accounts named after each project corroborates that he was supposed to spend the money to develop those projects. Finally, logic dictates that if defendant was planning to develop VDH, he likely told people that is what he intended to use the money for. Therefore, there is ample corroboration that Miller and Brards promises were sanctioned by defendant, or at least made with his knowledge, making those losses foreseeable to defendant. 3. The Security Interest Even if defendant did not personal communicate with the vast majority of the VDH victims, he still victimized them when he stole the security interest protecting their investments. As discussed, the VDH victims investments were secured by the lots underlying VDH. Defendant persuaded Miller to clear title to those lots and reconvey them back to defendants limited liability company. See PSR 53, 55. Defendant used those lots - the same lots that were securing victims investments and that defendant sold (sometimes on multiple occasions) to obtain $3,037,000 in bank loans. See PSR 53-59. By doing so, defendant victimized all of the VDH investors. While the government has great respect for the U.S. Probation Office, the PSR does not address this reason why all VDH investors are victims. 4. The Lulling Conduct Finally, defendant victimized all of the VDH investors because he lulled them into maintaining their investments. For example, defendant sent out a lulling letter near the end of the fraud. See Exhibit #15. Lulling conduct is part of the scheme charged in the indictment. See Indictment at 2(c).


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5. Conclusion Based upon the foregoing, the government believes that the Court should hold defendant responsible for all VDH victims, as well as victims like Heritage Oaks Bank, San Luis Trust Bank, Robert Olson, and Thomas Wooldridge because: (1) The losses were relevant conduct and foreseeable to defendant; (2) Defendant stole the VDH victims security interest; and (3) Defendant lulled the VDH victims. Therefore, there should be a six-level victim enhancement under U.S.S.G. 2B1.1(b)(2)(C). D. The Loss Amount The PSR finds that the loss amounts for the 15 individuals victims who communicated directly with defendant are $6,620,000. See PSR 78. The PSR finds that the loss amounts to the banks are $3,037,500. See PSR 79. Therefore, the PSR concludes that the total losses are $9,657,500, resulting in a twenty-level loss enhancement, per U.S.S.G. 2B1.1(b)(1)(K). As discussed above, the Court should find that every investor in VDH is a victim for purposes of sentencing. The additional losses would be $5,061,190, which raises the total loss to $14,718,690. However, that would not change the loss enhancement. E. Over $1 Million in Losses to Financial Institutions As discussed above, defendant defrauded two banks out of $3,037,500. Therefore, he is subject to a two-level enhancement for deriving more than $1 million in gross receipts from one or more financial institutions. See U.S.S.G. 2B1.1(b)(16)(A).


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F. Money Laundering Enhancement Defendant pleaded guilty to money laundering, in violation of 18 U.S.C. 1957. Therefore, he is subject to a one-level enhancement. See U.S.S.G. 2D1.1(b)(2)(A). G. Acceptance of Responsibility Defendant pleaded guilty in a timely fashion. Therefore, he is entitled to a three-level enhancement under U.S.S.G. 3E1.1(a) and (b). H. Conclusion Based upon the foregoing, the Court should find that the total offense level is 33. Because defendant falls within Criminal History Category I, the Sentencing Guidelines range is 135 to 168 months imprisonment. However, if the Court adopts the Sentencing Guidelines calculations in the PSR, the total offense level would be 29, resulting in an advisory sentencing range of 87 to 108 months imprisonment.

V. SENTENCING RECOMMENDATION

A. The Plea Agreement As discussed, the main issue in dispute as far as the government is concerned is whether the total offense level is 33 (with a six-level victim enhancement) or 29 (with a two-level victim enhancement). The governments sentencing recommendation is dependent on how the Court resolves this issue. See Plea Agreement at 4(e). Should the Court find that the total offense level is 33, the government would recommend a sentence at the low-end of the applicable range, which in this case would be 135 months


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imprisonment. See Plea Agreement at 4(e)(1). Should the Court find that the total offense level is 29, the government would recommend a sentence within the applicable Sentencing Guidelines range. See Plea Agreement at 4(e)(2). In this case, the government would recommend a sentence of 108 months imprisonment. B. Analysis of the Factors under 18 U.S.C. 3553(a) A sentence of 135 (or 108) months imprisonment is warranted under the factors delineated in 18 U.S.C. 3553(a). This offense was serious, and a stringent sentence is necessary to promote respect for the law and just punishment. See 18 U.S.C. 3553(a)(1) & 2(A). Defendant lied to victims either directly or through Hurst Financial about how their investments would be spent and secured. Then, defendant sold the same lots to different victims. Then, defendant took those lots lots that were securing the VDH victims investments and that he sold to multiple parties and used them to defraud two banks out of a total of approximately $3 million. This reflects a pattern of serious criminal conduct. This crime had a devastating impact on the victims, as reflected by the victim impact statements, as well as any victims who speak at the sentencing hearing. See 18 U.S.C. 3553(a)(2)(A). Many of the victims entrusted defendant with large amounts of money, some of which the victims needed for retirement. A long sentence is necessary to protect the public from defendant getting back into the real estate development business or working in fields that afford him unfettered discretion over how money is spent. See 18 U.S.C. 3553(a)(2)(C). Simply, the longer


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defendant is in custody, the longer he is segregated from those whom he might victimize. That having been said, the government does not believe that a sentence in excess of 135 (or 108) months imprisonment is necessary and respectfully requests that the Court not sentence defendant in excess of the governments sentencing recommendation. As an initial matter, defendant eventually pleaded guilty, which saved the government (and the Court) considerable resources in trying the case, so he is entitled to some amount of leniency. Moreover, even though the evidence suggests that defendant was losing money as early as 2004 and continued to operate his business based upon new investments without disclosing these losses, the government does not believe that defendant started his business with the intention of committing fraud. That distinguishes him from some fraud defendants prosecuted before this Court. Finally, although defendant was taking a draw (a salary on which he lived) while he continued to solicit new investments in the face of his failing business, the government does not believe that defendant stole the approximately $12.9 million that was transferred to his personal account. These are mitigating factors that would militate against the Court imposing a sentence in excess of the governments recommendation. In consideration of both the aggravating and mitigating factors, the government is recommending a sentence of 135 (or 108) months imprisonment. Should the Court adopt a lower Sentencing Guidelines range than that contemplated by the government or the probation officer, the government reserves its right to lower its sentencing recommendation pursuant to the provisions of the plea agreement, as


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the government stands behind the recommendation in the plea agreement. See Plea Agreement at 4(e).

VI. CONCLUSION

In conclusion, the government feels that the Court should impose a meaningful sentence, in order to send a strong message to defendant and his victims, as well as the community at large. The government also recommends that the Court impose a term of supervision of three years to afford the Court an opportunity to monitor defendant following his release from custody. Therefore, the government respectfully recommends a sentence of 135 (or 108) months imprisonment, based upon a total offense level of 33 (or 29). DATED: April 10, 2015 Respectfully submitted,

STEPHANIE YONEKURA Acting United States Attorney ROBERT E. DUGDALE Assistant United States Attorney Chief, Criminal Division /s/ Stephen I. Goorvitch_____ STEPHEN I. GOORVITCH Assistant United States Attorney Major Frauds Section Attorneys for Plaintiff UNITED STATES OF AMERICA


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