Court filing
TRANSCRIPT of Proceedings as to Carl Delano Torjagbo held on 8-15-2023, before Judge… — USA v. Torjagbo (Dkt. 74)
Record facts
| Court | U.S. District Court for the Northern District of Georgia |
|---|---|
| Filed | 2023-11-29 |
U.S. District Court for the Northern District of Georgia · No. 1:22-cr-00171-MLB-RDC · Doc. 74 · 2023-11-29 · Docket on CourtListener
Summary
A certified transcript of a motion hearing held August 15, 2023 before Judge Michael L. Brown in United States v. Carl Delano Torjagbo, Criminal Action No. 1:22-cr-00171-MLB-RDC, in the U.S. District Court for the Northern District of Georgia, Atlanta Division, filed November 29, 2023 as Doc. 74. Counsel address a competency evaluation, a pending Jackson-Denno hearing, and the motion for reconsideration of the magistrate judge's detention order. Arguing against bond, the prosecutor describes a PPP loan application he says swore to 493 employees and about $1.5 million in monthly payroll, seizure warrants covering vehicles and roughly 11 tractor trailers, and money he says remains unaccounted for. Defense counsel proffers that the loan proceeds were recouped. The transcript runs 44 pages and ends with the court reporter's certificate dated November 21, 2023.
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Case 1:22-cr-00171-MLB-RDC Document 74 Filed 11/29/23 Page 1 of 44
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
UNITED STATES OF AMERICA,
)
) CRIMINAL ACTION NO.
vs. ) 1:22-CR-00171-MLB-RDC-1
)
)
CARL DELANO TORJAGBO,
)
)
Defendant.
)
_______________________________)
--------------------------------------------------------------
BEFORE THE HONORABLE MICHAEL L. BROWN
TRANSCRIPT OF MOTION HEARING
AUGUST 15, 2023
--------------------------------------------------------------
APPEARANCES OF COUNSEL:
For the Government: JOHN R. PHILLIPS
UNITED STATES ATTORNEY'S OFFICE
For the Defendant: JAY L. STRONGWATER
STRONGWATER & ASSOCIATES, LLC
Proceedings recorded by mechanical stenography
and computer-aided transcript produced by
KEISHA M. CRUMP, RCR, RMR, RPR
Official Court Reporter
1759 U.S. Courthouse
75 Ted Turner Drive, SW
Atlanta, Georgia 30303
(404) 215-1354
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(Atlanta, Fulton County, Georgia, August 15, 2023, in open
court at 2:00 p.m.)
- - -
P R O C E E D I N G
THE COURT: We are here for a motion hearing in the
United States versus Carl Torjagbo.
May I have appearances starting with counsel for the
United States.
MR. PHILLIPS: Good afternoon, Your Honor. Russell
Phillips for the United States.
THE COURT: And for the defendant?
MR. STRONGWATER: Good afternoon, Your Honor. Jay
Strongwater on behalf of Carl Torjagbo, who is seated to my
right.
THE COURT: All right. So it was my understanding
that there was a competency evaluation done. Is that correct?
MR. STRONGWATER: Yes.
THE COURT: And that has been resolved?
MR. STRONGWATER: The report has come back from the
BOP psychologist who says that Mr. Torjagbo is competent.
THE COURT: Okay.
MR. STRONGWATER: May I remain seated?
THE COURT: Yes.
MR. STRONGWATER: Okay.
THE COURT: So how should we proceed now with this
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case?
MR. STRONGWATER: I believe the appeal from the
detention order is ripe for the Court to look at.
THE COURT: Okay. And then what happens after that?
Where are you all in the discovery process?
MR. STRONGWATER: There is a pending Jackson-Denno
hearing. Judge Cannon earlier today wanted -- asked us to ask
the Court whether that's something the Court wanted to hear or
refer back to her.
THE COURT: Okay.
MR. STRONGWATER: I think discovery has been
completed. There is a question of whether a competency
hearing is necessary after we consult with Mr. Torjagbo and
the psychologist who made the initial finding on our behalf,
our behalf being the defendant's behalf. And we have ten days
to two weeks to get back to the magistrate judge on that.
THE COURT: You have how long to get back to her?
MR. STRONGWATER: Ten days, ten working days.
THE COURT: All right. Do y'all want to talk about
the bond today then? Are you ready to do that today?
MR. STRONGWATER: Yes, Your Honor.
THE COURT: Are y'all ready to do that today?
MR. PHILLIPS: Yes, Your Honor.
THE COURT: Okay. I have read the magistrate judge's
prior order. I have read the motion for reconsideration, and
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I have read the Government's response to that. It seems to me
as though, and I think the Government makes the point that the
facts relied upon by the magistrate judge to deny bond on the
grounds that he is a flight risk remain exactly the same as
they were before. Is that right? Is there any new
information to be considered?
MR. STRONGWATER: I hope so. That's why we're before
the Court.
THE COURT: Okay.
MR. STRONGWATER: By way of proffer, Your Honor.
Mr. Torjagbo is accused of obtaining a
multimillion-dollar PPP loan.
THE COURT: I know.
MR. STRONGWATER: Yes.
THE COURT: Nine million. He tried for 13; he got
nine, almost 10 million. Some amount of it was clawed back.
The rest of it was spent on a Lamborghini, a BMW, some
property, some tractor trailers, and the rest of it is in the
wind somewhere.
MR. STRONGWATER: All but that last comment, I think,
is accurate. I think the money -- the loan proceeds have been
either frozen through bank accounts or financial accounts or
the property -- or the real property and the personal property
that was purchased with the loan proceeds have been seized, so
there's been, I believe, a full recoupment of the loan
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proceeds.
THE COURT: What do you say about that on behalf of
the United States?
MR. PHILLIPS: Judge, that's -- that's not entirely
correct. First of all, I think it's important to make clear
that it's not only the nine-and-a-half million dollars that
the defendant obtained in the PPP fraud loan, but three days
before that, he obtained roughly three-and-a-half million
dollars by filing a phony tax return. And at the same time,
he filed a very similar return, which, fortunately, the IRS
flagged and did not fund seeking another three-plus million
dollars. So within three days just by filing phony paperwork,
he got more than $13 million in taxpayer money.
THE COURT: How can it possibly be that easy?
MR. PHILLIPS: That's a great question. I don't
know.
THE COURT: How could it possibly be that easy?
MR. PHILLIPS: I know, Judge, that during the
pandemic, there was this push to push the CARES money out to
try to save small businesses from going under because they
couldn't pay their employees because they were shut down, and
so that was the reason for putting out, I think, eventually
$800 billion in CARES Act money through the PPP loan program.
And in order to do that, a lot of those loans, you know, just
could not be vetted. And so, roughly, a third of that amount
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now we're being told was fraud, so hundreds of billions of
dollars in fraud money.
And this defendant got what I believe is the largest
PPP loan in this district, certainly the largest one that we
have discovered to be fraudulent. It's the largest one that
we've investigated, the largest one that we've prosecuted as a
single loan. There might be others who got, you know, through
fraud, multiple loans. But in terms of just the single value
of one loan, this is at the top.
But the phony tax return where he just makes up
employment information and files that, and they literally just
wire him three-and-a-half million dollars, and he tried to get
another three-and-a-half by doing the same thing. So why
they'd flagged that one and not the first one, I don't know.
THE COURT: He got about $14 million; is that your
estimate?
MR. PHILLIPS: Roughly, yeah.
THE COURT: Of which how much has been recovered or
frozen or was not provided?
MR. PHILLIPS: Well, that's a difficult question to
answer, but let me explain how we got to where we are.
THE COURT: The reason I ask is because a large part
of the magistrate judge's conclusion seems to me rightfully
focused on the fact that he may have assets. He clearly has
ties overseas. He is a pilot, and he has the -- if he has the
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means to abscond, that would go a long way. I think it went a
long way with the magistrate judge. It would probably go a
long way with me. That's why I'm curious about that.
MR. PHILLIPS: Well, that's right, Judge. The
loan -- the bank that funded the PPP loan got scared that
there was fraud, and they clawed back some of the money. But
they had already lost millions and millions of dollars in the
initial transfer.
Well, first, they put the whole nine-and-a-half
million in his account, and he immediately took out over
3 million and moved it to a different bank and then started
spending that. And he bought the $1.7 million house in
Marietta and all the cars and other goodies that are listed in
the various things that we filed, the indictment, and the
seizure warrants and so forth. But it's -- it's more than
just that because he got the tax money too. He got
three-and-a-half million roughly there.
And when he was arrested, he made a statement to the
FBI after he was advised of his rights, and this is going to
be the subject of the Jackson-Denno hearing. But the
Government's view on that and what it says on the recording --
there's an audio recording the Court can listen to -- and he
tells the FBI that he has offshore accounts.
And the reason he's making that statement is to -- is
because the FBI said where did you get the money to buy these
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things, these trucks, these trailers, these fancy cars, this
house, et cetera, get the plastic surgery for your abs, the
surfer ab; where did you get the money to pay for that? And
he said, oh, I'm -- you know, I'm very successful. I'm in the
gold mining business. And the agent said, yeah, I know, you
told, you know, the PPP folks that you had 493 employees. He
didn't -- he didn't use that number, but that's what he said
in his loan application.
And he tells Mr. Torjagbo, where did you get the
money? And Torjagbo says I'm very successful. I'm in the
gold mining business in Africa. And he eventually tells the
agent my employees and my assets are in Africa. Well, why are
you getting a PPP loan from the American taxpayers if you've
got a gold mining operation in Africa that is suffering from
the pandemic? But that's what he said. And he said my money
is tied up in offshore accounts. He told the agent that he
had accounts in Africa and Switzerland, as I recall. And so
by his own --
THE COURT: And are you -- I'm sorry to interrupt
you, but let me just make sure. Are you suggesting that that
is, in fact, true or are you suggesting that he might have
some offshore accounts?
MR. PHILLIPS: I have no way of knowing, Your Honor,
right. I have not been able to check that out. That is what
the defendant told the FBI. I don't believe --
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THE COURT: And but you're going to argue that he
might because I don't remember reading that at least in the
order.
MR. PHILLIPS: We did not have that information at
the time of the detention hearing. I have not been able to
get the audio. I haven't been able to listen to that, and so
they -- this all happened the same day they brought the
defendant in and we had his bond hearing.
THE COURT: But you're going to argue that that means
he might have offshore assets that -- and by the way, we're
missing some millions of dollars?
MR. PHILLIPS: We're missing millions of dollars.
THE COURT: Is that true? Are you, in fact -- there
is still millions of dollars that have not been accounted for?
MR. PHILLIPS: That's right, Judge. Because
remember, he got more than $3 million of PPP money, then he
got roughly three-and-a-half, round numbers, from the IRS, so
we haven't been able to seize all of that.
What we did seize, and there are numerous, I think,
probably 20 or so seizure warrants that we obtained for each
of these fancy vehicles, plus I think it's roughly 11 tractor
trailers, somewhere in that ballpark, ten or 11 tractor
trailers that he had bought to start a new business.
And so not only is he telling the FBI I have money in
offshore accounts, but we know that he used taxpayer money to
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start a new business.
And even though he lived in Georgia, he registered
this new business in Wyoming. It's a company that's in the
trucking business, and he opened up bank accounts in the names
of this trucking company, and then he bought these ten or 11
tractor trailer trucks, which we have seized.
But he's trying to start a new business with the
taxpayer money that was given to him because he swore under
oath that he had 493 employees and a $1.5 million
approximately monthly payroll that he had to make for these
existing people. There is no evidence of any of that, so I
would not count on anything that the defendant says as being
true. I just know that that is a statement that he made to
the FBI.
I don't have any evidence that those accounts exist,
but I also don't have the millions of dollars that were
missing. All of the accounts that we knew about, we seized.
We got a seizure warrant. We took the money out of those
accounts, so they're not just frozen. We actually took the
money out of the accounts. They no longer exist.
THE COURT: By your own account, how much money has
not been recovered either -- I'm assuming you seized the
house, the Land Rover, the tracts of land, the BMW, and the
Lamborghini.
MR. PHILLIPS: That's right.
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THE COURT: You seized all of those?
MR. PHILLIPS: There's a Land Rover. We seized all
of those things, and plus all of the tractor trailers.
THE COURT: Okay. How much do you think is miss --
has not been accounted for?
MR. PHILLIPS: I'm terrible with math. I don't know
the exact number, but millions of dollars.
THE COURT: Can you ask? Does your agent know? Does
he have any better...?
MR. PHILLIPS: We're checking with our financial
person at the FBI who's been working with us on that. But
it's a substantial amount of money. Let's put it this way,
Judge.
THE COURT: Enough.
MR. PHILLIPS: Enough money that if a person were so
inclined to flee, he could certainly finance that flight to a
different country, get a private jet, and fly anywhere in the
world he wanted to, not to mention the fact that as you know,
he's a licensed airline transport pilot, and he's a flight
instructor.
THE COURT: And he has family in Ghana; is that where
it is?
MR. PHILLIPS: He does, Judge. But I'm glad you
brought that up because that's an interesting topic. He told
pretrial services at the time of the bond hearing that he was
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born in Ghana, and that's an important factor because it goes
into the arguments that I made in my brief about him not
having substantial ties to this district because he was born
there, still has family there. He wired fraud money to his
mom, who allegedly was sick there in Ghana.
But when he was interviewed most recently by the
psychiatrist at the BOP, he told that doctor that he was born
in South Africa, not Ghana. Those countries are roughly
3,000 miles apart, Judge. That's like saying, you know, I was
born in LA but you were really born in New York. I mean,
that's preposterous. Why would you make that statement?
THE COURT: It's more like you saying you were born
in LA and you're really born in Brazil.
MR. PHILLIPS: Okay.
THE COURT: Because it's not even the same country.
MR. PHILLIPS: It's not even the same country. And
so those are his words. He's made two different statements.
They both can't be true. So one of those statements is -- at
least one of them is false. We know that.
So he does not have substantial ties to the charging
district, so he's got the means to flee if he wants to do
that, the skill that we can't take away from him, even if he
says here's my passport, here's -- which he claims he's
lost -- here's my airline transport pilot certificate and my
medical certificate and so forth; he still has this skill.
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THE COURT: When did he become a naturalized citizen?
MR. PHILLIPS: When did he?
THE COURT: Yes.
MR. PHILLIPS: That is --
THE COURT: I'm wondering if he is subject to
deportation upon conviction?
MR. PHILLIPS: Judge, I think he's been a citizen for
a good while.
THE COURT: Is he nevertheless subject to deportation
if convicted on a fraud offense?
MR. STRONGWATER: No, Your Honor. I'm sorry.
THE COURT: No, that's all right. I want this to be
informal.
MR. STRONGWATER: Okay.
THE COURT: So please.
MR. STRONGWATER: My understanding is the only way --
once you're naturalized, you're not deportable unless your
N-400 naturalization petition contains a false statement in it
that would render your naturalization proceeding null and
void.
THE COURT: I'm not sure that's true. I thought you
could be deported if it was a crime of moral turpitude.
MR. STRONGWATER: I think only if your green -- I'm
sorry, Russell. I think it --
THE COURT: Only if it's a --
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MR. STRONGWATER: If it's a green card status --
THE COURT: Okay.
MR. STRONGWATER: -- if you were a legal resident
alien.
THE COURT: Ah, right.
MR. STRONGWATER: Then you can be deported.
THE COURT: If you're naturalized, you have to lie
during the time of your process.
MR. STRONGWATER: Right. Because there's boxes have
you ever done a host of things, and if you check no and the
answer is yes, then the Government could come back and say
your naturalization petition was fraudulent --
THE COURT: Yeah.
MR. STRONGWATER: -- we're going to cancel your
naturalization, you're back to green card status, now you're
deportable.
THE COURT: I thought the magistrate judge -- yeah,
so she checked subject to removal and deportation after
incarceration, didn't she?
MR. STRONGWATER: I think that was an overzealous
check mark.
MR. PHILLIPS: According to what the defendant told
the psychiatrist at BOP, he was naturalized in 2012, so it's
been more ten years if that's right.
THE COURT: But you don't think he's subject to
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deportation then?
MR. PHILLIPS: I don't, Judge, but that is not
something that we've looked at closely, and I'm certainly not
an expert in immigration. And I'm not in a position to make a
representation to the Court.
THE COURT: Okay. But at least insofar as the facts
I can rely upon, I cannot rely upon the check mark that he's
subject to deportation?
MR. STRONGWATER: That would be our position. I'm
sorry to interrupt you.
THE COURT: I don't see how I could rely on that
unless somebody gives me evidence.
MR. PHILLIPS: I'm not asking the Court to do that.
THE COURT: Okay. Fair enough.
MR. PHILLIPS: I think there's substantial evidence
otherwise. There are so many other things, Judge.
As I stated in my brief, it's our plan to supersede
the indictment to add additional charges based on the
aggravated identity theft. The FBI has interviewed some of
the people whose personal information, name and Social
Security number and so forth, was used in that fraudulent PPP
loan application.
And so we know that the defendant falsely represented
that this person was an employee. He used that person's name
and Social Security number, means of identification, so he's
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committed aggravated identity theft. He did that in
connection with bank fraud filing a fraudulent PPP loan
application.
So our plan would be to increase the charges against
him. That -- and as the Court knows, that carries a mandatory
minimum of two years. And if we were to charge multiple
counts, if the Court were so inclined, the Court could, if it
chose to, stack those.
THE COURT: And does that have to be consecutive to
any sentence he gets on the underlying fraud?
MR. PHILLIPS: It does, Judge. And so that just
makes it, you know, the consequences of a conviction that much
more severe. The charges are already serious, and so
regarding -- you know, the max -- the statutory maximum is 30
years for bank fraud, but it's unlikely that anybody is going
to get a 30-year sentence for bank fraud.
But because the dollar amount of the loss is so high,
and you've got all of these other factors that are involved,
his guidelines are going to be high. And so he's certainly
looking at a substantial prison sentence under normal
conditions. And if he's charged with the aggravated identity
theft on top of that, he's looking at even more, plus he would
be subject to a restitution order of, you know, $14 million.
THE COURT: So he might be -- he might be somewhere
in excess of 27 just on the base offense level and the
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addition for the amount if it's just 9 million.
MR. STRONGWATER: Judge --
THE COURT: And that's 70 months plus two years at
the low end of the guidelines.
MR. PHILLIPS: Right.
THE COURT: That's your point. I mean, if we're
putting -- if we're putting numbers to it, that might be a
conservative estimate of the guideline range.
MR. PHILLIPS: It would certainly give a reasonable
person cause to be scared and create a motive to flee if the
person didn't have strong ties to the community. This
defendant has never been married. His parents live in Africa.
He doesn't have any family here. He doesn't have a wife. He
doesn't have any kids. He doesn't have a long-term romantic
relationship that would cause him to stay here. He's got
literally nothing.
The house that he lived in, he bought with stolen
taxpayer money, and so he told pretrial services that it was
his intent that if the Court released him on bond that he
would go back there to live. That house is subject to
forfeiture.
I've had the person who runs the homeowners
association for that neighborhood, which is a very nice
neighborhood in Marietta, and they're very concerned because
the house is, you know, going to the dogs because there's
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nobody there to take care of it, and they're worried about how
that's affecting their property values.
If the defendant didn't want to cooperate, which
that's his right, the Government is not able to do anything
with that. We've got a lien on that property, but we can't
sell it until the defendant has been convicted. And so that
house is just sitting there, and it's deteriorating. Nobody
is living in it. I'm not sure who's cutting the grass or, you
know, who's maintaining it. I know how hard it is to maintain
my own house. And if nobody is there to do those things, you
know, that's building up. So it's not the same place that he
left a year ago. It's certainly deteriorated over that time.
THE COURT: And it wouldn't be available to him to
live in anyways.
MR. PHILLIPS: He's not legally entitled to it. He
doesn't have family. He doesn't have other connections to the
district. He'd only lived in the district for a short time
before he committed this fraud. He didn't --
THE COURT: How long had he lived there?
MR. PHILLIPS: Based on what he told pretrial
services, I think that he had lived in the house for just over
a year and maybe claimed to be in the district for maybe two
years or so before the fraud.
THE COURT: Mr. Strongwater, do you want to correct
that?
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MR. STRONGWATER: As far as the house, we're not
proposing that Mr. Torjagbo return to that home. Peter Irie,
his family member, is here in the courtroom.
THE COURT: What's his relationship to him?
MR. STRONGWATER: Peter, what's your relationship?
MR. IRIE: A cousin.
MR. STRONGWATER: A cousin. And he's been in touch
since the day Mr. Torjagbo --
THE COURT: And he lives here in Atlanta?
MR. STRONGWATER: Yes, in Buford.
THE COURT: And does he have a house?
MR. STRONGWATER: Yes, he does.
THE COURT: And what's the house worth?
MR. STRONGWATER: I'm sorry. Could I go back and ask
him? Well, let me qualify that.
THE COURT: And would he put the house up for bond?
MR. STRONGWATER: I think that precedes their -- no.
THE COURT: He would not?
MR. STRONGWATER: His wife does not want to post the
house as collateral for --
THE COURT: So what would he use to post for bond?
MR. STRONGWATER: I would -- as far as hard assets, I
don't know at the moment. What we're proposing was he does
have a place to live independent of this house, the
$1.7 million house that's been seized or liened on. He would
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live with Mr. Irie and Mr. Irie's spouse. He would be under
either curfew or home confinement with a geolocation monitor.
THE COURT: What will he post for bond? You're
talking about an OR bond?
MR. STRONGWATER: No. If the judge set -- if the
Court set a bond, we would struggle to make those conditions.
I mean, right now we have restricted -- the only thing we can
propose to the Court at the moment is physical restrictions,
restrictions on him as far as where he can be and how it could
be monitored in addition to surrendering his pilot's license.
THE COURT: And the passport?
MR. STRONGWATER: We don't have the passport. I
don't think the Government has the passport.
THE COURT: No, the Government doesn't --
MR. STRONGWATER: We don't know where the passport
is.
THE COURT: He claims his girlfriend stole the
passport. Did he file a police report about that?
THE DEFENDANT: No, Your Honor. I --
THE COURT: Mr. Strongwater? You need to talk to
your lawyer.
MR. STRONGWATER: It was filed with ICE.
THE COURT: When was that done?
MR. STRONGWATER: Approximately 2021.
THE COURT: After his arrest in this case?
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MR. STRONGWATER: No, prior to.
THE COURT: Do we know if that's true, Mr. Phillips?
MR. PHILLIPS: I do not, Your Honor.
THE COURT: But at any rate, somebody is willing to
let him have a place to live but is not willing to put his
house up as part of bond?
MR. STRONGWATER: I think the cousin is. The
cousin's spouse is not.
THE COURT: Is that right, sir?
MR. IRIE: Yeah, absolutely. We're going through
some sort of separation, so I have to get a consensus for that
but.
THE COURT: And you are --
MR. IRIE: I'm the cousin.
THE COURT: You're -- you are brother or sister with
his mother or his father?
MR. IRIE: With mom, mom side.
THE COURT: You are his mother's brother?
MR. IRIE: My mom is a sister to, how you call it,
his mom.
THE COURT: Yes. Your mom is his mom's sister?
MR. IRIE: Correct.
MR. STRONGWATER: Mr. Torjagbo's mother is his --
Peter Irie's aunt.
THE COURT: I'm just trying to make sure I
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understand. So your mother is the sister of the defendant's
mother?
MR. IRIE: Correct.
THE COURT: Is that right?
MR. IRIE: Yes. That's correct.
THE COURT: Okay.
MR. PHILLIPS: So, Judge, the defendant has had no
lawful employment since at least 2016. He told the BOP
doctor, who evaluated -- evaluated him recently, that he lost
his previous job because he was arrested. And it was some
sort of a domestic dispute. He was charged with aggravated
assault and domestic violence and other things. Those charges
were dead docketed. We talked about that in the brief. And
he's not had any lawful employment since then.
So let's talk about the false statements that he's
made about his employment. As I mentioned earlier, he created
that sham company in Wyoming called FlyingJack. And so he
represented to the magistrate judge at the detention hearing
that he had been employed by FlyingJack for eight months.
That company was funded entirely by fraud proceeds.
It had no legitimate income. So any salary that the defendant
received from FlyingJack was nothing other than fraud
proceeds.
He can't go back to that job. All of the assets of
that company, the trucks and the trailers that he bought with
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fraud proceeds have all been seized. That company doesn't do
any legitimate business. It doesn't have any employees. It
doesn't have a place of business. There's nothing to go back
to.
And at the detention hearing, defense counsel
admitted that the defendant had used PPP loan proceeds to buy,
quote, physical assets like tractors and trailers for his
other business. So he files a PPP loan application in the
name of the company called Kremkov Industries, which was
supposedly a gold mining operation. He lied and said he had
493 employees; it wasn't true. He said he had $1.5 million,
$1.4 million monthly payroll; that wasn't true.
And so he then takes the PPP money and he uses it to
fund another business, so there's nothing to go back to there
either. Kremkov is a sham. FlyingJack is a sham. And so he
has no employment. He has no employment history since he lost
his legitimate job, which I believe was as an airline pilot,
because of the issues that I mentioned.
He told the IRS not that he was employed by
FlyingJack, but that he was employed by Kremkov, and he told
IRS that he earned $9.2 million in wages in 2020. In one year
he said he earned -- I owe taxes on $9.2 million. That's what
he told the IRS, and that's why he got the big refund. That
was not true either.
So he just makes up statements wherever it's
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convenient for him without regard to whether they're true,
without regard to whether they're consistent with what he said
before or anything. So how can you trust somebody like that
whose made all of these false statements under oath to get
money from the Government to come in and say, oh, Judge, I've
now changed my ways? You can believe me. If you let me out
on bond, I'll give you my airline transport certificate, and
even though I can't find my passport, scout's honor, I won't
flee. Now, I'll live with this guy right here that nobody's
ever seen before or ever heard of before today. That is not a
very reliable thing in my opinion.
The defendant has some criminal history. I'm not
saying he's John Dillard here, but it is something that needs
to be considered.
As the Court knows, the issue that the Government has
the burden of proof on is, is the defendant either a risk of
flight, which we have to show by a preponderance of the
evidence, or is he a danger to the community, which we have to
show by clear and convincing evidence.
And so to be a danger to the community, it doesn't
mean that you have to be a gangster, that you have to hurt
people physically or be a big drug dealer or somehow
threaten -- you know, beat people up or threaten them
physically. Being a danger to the community also includes
people who are a financial danger.
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And somebody like this defendant who is so willing to
just disregard the law and just make up facts and figures when
it suits him to line his own pockets is clearly a danger to
the community.
And as the magistrate judge found at the detention
hearing, the fact that he's previously created false documents
makes it more likely that he would create false documents to
aid his flight if the Court were to let him out on bond.
So, previously, he was charged with aggravated
assault. He was charged with driving on a suspended license
and the failure to appear. So I think the failure to appear
is more serious than driving.
THE COURT: Was that dropped? Because that does
worry me.
MR. PHILLIPS: I don't show that that was dropped.
MR. STRONGWATER: I don't have the pretrial services
report in front of me.
MR. PHILLIPS: I do.
MR. STRONGWATER: Okay. We have that he -- it was
basically moving violations, so I think he might have -- it
was a 2008 conviction for traffic and driving violation.
MR. PHILLIPS: According to the page 3 of the
pretrial services report, it says he was arrested on
September 17, 1999, by the Brevard County Sheriff's Office in
Florida. He was charged with failure to appear for a
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misdemeanor offense, and the disposition is unknown.
He was also charged with failure to appear, Judge,
but in a different jurisdiction by the Rockledge Police
Department in Rockledge, Florida, and that was roughly six or
seven months later on March 31st of 2000, and his license was
suspended indefinitely, and he was fined $100.
MR. STRONGWATER: You said 2000?
MR. PHILLIPS: 3/31/2000.
MR. STRONGWATER: 2000.
THE COURT: Okay.
MR. PHILLIPS: He's had other charges, including the
driving while his license was suspended, aggravated assault,
intimidating and harassing a 911 operator.
THE COURT: Those were all dropped.
MR. PHILLIPS: They were, but the Court can consider
his entire record. The Court does -- you have discretion,
Judge. You can say I don't think that's worth considering or
I think it informs my judgment about what kind of person I'm
dealing with: A history of multiple arrests, multiple
different types of offenses, including the failure to appear,
and the violence on somebody that he lived with.
Regardless of who started it, who's to blame, what
who said what to whom and all that kind of stuff, it's still
not the kind of thing that -- that makes you feel comfortable
about having somebody out there dealing with the community.
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I think there is evidence, Judge, that he is a danger
to the community for multiple reasons, and so I think that's a
factor that the courts should certainly give strong weight to
in its decision about whether to detain this gentleman.
And I've cited a number of cases in there that talk
about driving with a suspended license and failure to appear,
and they talk about it, and they describe the person as
somebody who has little to no respect for the law. And so I
think that's -- that's characteristic of the kind of person
that we're dealing here -- dealing with here, no respect for
the law, no respect for the rules. If I want $14 million, all
I've got to do is file some phony papers, and the taxpayers
will give it to me, and then I'll go live like a king.
THE COURT: Well, I get that out of the lying to the
magistrate judge about what his employment was. I mean, when
you're in court and then you lie to the judge to say that you
were employed by FlyingJack, that's fairly brazen, in my
opinion.
MR. PHILLIPS: It is. In addition, Judge, he lied to
the FBI agent in his post-arrest statement. You can hear in
the recordings the agent says where did you get the money to
buy these things, and he said that's my own money; that's not
PPP money. And the agent says, come on, man, don't do that.
Don't -- don't say that. You know that's not true. There's a
paper trail. All of these bank records show where you got the
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money. We've got the checks. We've got the wires. We know
how you got the money to pay for these things. And yet he
just brazenly lies to the FBI agent.
You could say, well, he was scared and he was
intimidated or whatever. There's no evidence of that on the
tape. You'll listen to the tape. You'll see there's no
evidence of him being intimidated or harassed in any way.
It's just -- he just chooses to say whatever.
I think the main thing that the magistrate judge
focused on and that I would certainly say is extremely
concerning to us is the defendant being a pilot and having all
this experience flying and being a flight instructor and the
missing money, those two things in combination.
Even if he didn't fly himself, if he said his skills
are rusty or whatever, he still possibly has the money to hire
somebody else to do that for him, and so that is -- that's a
huge concern.
So the factors, Judge, that I want the Court to pay
attention to, to give weight to in deciding this issue, the
nature and circumstances of the offense charged, we've already
talked about that, extremely serious, the weight of the
evidence. I know we throw around the word overwhelmingly or
overwhelming a lot. We talk about a lot of our cases having
overwhelming evidence; we truly do here. This, as the agent
said on the tape, is a paper trail case, a records case, and
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those records don't lie. We didn't make those records up.
You know, JPMorgan and the other banks and the other people
who sold him these cars, well, these are their records. All
we did was go out and get them and assemble them.
And the evidence of him doing these things is
overwhelming. Plus he's never denied it. He's never said I
didn't buy a BMW, I didn't buy a Lamborghini, I didn't buy a
Range Rover, I didn't buy this house, I didn't have this
surgery on my abs. He admits he did all of those things.
He's just lied about was he entitled to the money and so
forth, and we don't know where a lot of it is.
So the weight of the evidence, extremely strong.
Defendant's history and characteristics, we've talked about
that in terms of his ties to the community and his employment
and so forth, and then the nature and seriousness of the
danger to the community, if the defendant were to be released.
And for all of those reasons, Judge, unless you have
some more questions, I'm happy to answer.
THE COURT: Just if you've gotten me the amount that
you think is missing?
MR. PHILLIPS: We're still looking for Mr. Share, and
we've not been able to get that. But if I do, I will
certainly provide that to you and to Mr. Strongwater.
THE COURT: Until then, you would describe it as
millions?
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MR. PHILLIPS: I would describe it as extremely
significant. We believe it's in the millions. But whatever
that number is, we know that it's enough that could fund
flight to another country to avoid prosecution.
THE COURT: Okay. Mr. Strongwater.
MR. STRONGWATER: Your Honor, I don't -- other than
listening to the tape, I don't know what representations were
made when Mr. Torjagbo first appeared in front of the Court
for detention. I would say that my --
THE COURT: I thought he -- I thought the
representation was that he told the magistrate judge that he
had been working for eight months for FlyingJack.
MR. STRONGWATER: Is that in the pretrial service
report?
MR. PHILLIPS: It is. It's also in our brief. We
cite that page.
MR. STRONGWATER: I meant as far as -- I'm sorry to
interrupt.
MR. PHILLIPS: I was just saying we cited that page
of the transcript in our brief --
MR. STRONGWATER: Yeah.
MR. PHILLIPS: -- where that representation was made.
MR. STRONGWATER: Yeah, as far as the representation
that Mr. Torjagbo admitted that he used the funds to start the
trucking business, we weren't there. The Government said that
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counsel, and I just wanted to make sure that the Court knew
that it wasn't us that made that representation.
Judge, all I can do is point the Court to 18 3142(c).
This is not a presumption case, and the statute for bond
suggests that conditions of release be under the least
restrictive conditions. And (c)(1)(b) sets out ten -- ten
specific conditions to consider, but is not an all-inclusive
list, so we'd ask the Court to be somewhat creative as far
as --
THE COURT: I don't see how I can be creative.
MR. STRONGWATER: Okay.
THE COURT: Because what you've given me is that he
can't afford to pay a bond, that all you've given me, the only
thing you've given me different from what was at -- in front
of the magistrate judge is that now there is a cousin that
would allow him to stay there, but that's not much, is it?
MR. STRONGWATER: It may not be much, but is it
sufficient. Similarly, I don't believe there is aggravated
identity theft in this case because my recollection of the
roster of employees did not contain Social Security numbers,
so it's missing a vital element of aggravated identity theft,
so the two-year consecutive, I don't think is going to apply
at the end of the day.
The third part is while you're still talking
ballparking and saying millions, in looking at the forfeiture
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and the seizure notices valuing the house, it seems like most
of the money, not all of the loan proceeds, have been frozen,
clawed back or liened on.
THE COURT: Well, let me say this.
MR. STRONGWATER: Yes, sir.
THE COURT: I don't see how -- I think -- I think if
you look at the statute, there's a provision that says I have
to release him on or he should be released upon personal
recognizances or unsecured bond, unless the Court determines
that the release will not reasonably assure his appearance or
endanger the community.
I don't see how releasing him on an unsecured bond or
on his own recognizance would in any way assure his appearance
at trial. I think to do that would not reasonably assure his
appearance. I think if you just run two numbers on the
guidelines, the amount of the alleged loss, which I put it at
nine, even though it might be up to three, and that comes out
to -- given the amount of the underlying offense, I think I
said it comes out to a level 27 of 70 months.
MR. STRONGWATER: I had the same while you were --
THE COURT: Okay. And if you -- so even if you were
to say that it could go up to 94 if you add the aggravated
identity theft, regardless of that, that is a significant
amount of time, which would provide significant reason for
someone not to be here.
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If you add to it, what Mr. Phillips has argued about
the risk of flight as a result of his lies, his lack of
employment, his lack of real ties here, his significant ties
overseas, I don't see how what you've said he could do,
personal recognizance or unsecured, could possibly be the
answer.
MR. STRONGWATER: May I have one second, Your Honor?
THE COURT: Yes.
MR. STRONGWATER: Your Honor, could we suggest this:
If the Court needs more -- or as more as security either in
the way of people, real property, or cash, not from
Mr. Torjagbo but from third parties, can the Court leave open
a final ruling for a few days so that we can see what we can
muster?
THE COURT: Well, you can -- you can -- sitting here
now -- is there anything else you wanted to present on this?
MR. STRONGWATER: No, Your Honor.
THE COURT: Okay. Sitting here now, I think the
Government has made a compelling case that they have met their
burden by a preponderance of the evidence to show me that he
is a risk of flight, not addressing, not rejecting, but I'm
just talking about that because that's enough regardless of
danger.
But the amount of -- the weight of the case, the time
that he faces, the lack of local ties, the ties overseas, the
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type of offense being a fraudulent offense that has involved
so very much lying to get so very much money with some
significant amount of the money still not recovered, and
family overseas -- I could be leaving something else out --
all of that I think makes a very compelling case that he is a
risk of flight. And not having gone back and read some of the
cases or made a final determination, I think it's probably a
preponderance of the evidence.
I'm trying to think of what there could possibly be
that could give him that type of -- give me that type of
assurance. One of them might be if there wasn't a lot of
money missing because the threat -- I did leave out the pilot
and all that that entails.
But the missing money with the -- with the claim that
he has accounts overseas or at least that he has wired some
money to his mother overseas and he has ties overseas, all
puts the specter on a person who would rather get out of the
country and go live off the missing millions rather than stay
here, face what the Government has presented as a fairly
strong case, and face maybe a 70-month guideline sentence at
the bottom. That's a pretty strong risk of flight.
But I don't -- I don't know if I might be convinced
otherwise if I saw something else. I don't know. I kind of
doubt it. But I don't know. I don't know what it is that you
could come up with.
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I can't think of a series of release conditions that
would do it. Certainly a home detention or a home confinement
or an electronic monitoring would not do that for me because
he could be in the wind within minutes of cutting it off his
leg, and there would be nothing to stop him from doing that.
And then he would have all of the reasons, assets, and ability
to not be here, okay?
MR. STRONGWATER: Yes, sir.
THE COURT: But if there's something else you could
think of, I'll listen to it, but I think the Government -- I
want to go back and look at it a little bit more, but I think
the Government has proven it by a preponderance.
I would like to know the amount of money. If it's a
couple of hundred thousand dollars, that's one thing. If it's
a couple million, that's pretty big, pretty big deal, so I
will leave it open for the Government to tell me that amount.
And if there's something you want to do in the interim, you
could do that as well, but I would like to know the amount.
MR. PHILLIPS: May I respond just briefly, Judge?
THE COURT: Yes.
MR. PHILLIPS: So we know that the original PPP loan
is more than 9.5 million. We know that there's a check that
the defendant wrote to Kremkov Industries, which was a sham,
when he moved that money from the original account where the
loan was funded to a different bank, and so we know that was
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3 million that went there. Plus he got 3,366,000 and change
from the IRS on the fraudulent tax, so that's 6.3 million
right there.
Even if we assume, just for the sake of discussion,
that the bank that funded the PPP loan clawed back everything
except the $3 million that he transferred immediately, that's
still almost six-and-a-half million dollars that he had.
So we have under our control a $1.7 million house
that he paid in cash for, and then those multiple vehicles
that we talked about, the Lamborghini being the most
expensive; it cost, I don't know, three, 350, somewhere in
that neighborhood he paid for it. We've got a $100,000 BMW, a
$100,000 Range Rover, $15,000 worth of surgery, a few hundred
thousand dollars for other miscellaneous properties.
In other words, Judge, there just isn't
six-and-a-half million dollars that he spent on all of those
things. He probably at most spent half of that on the trucks
and the trailers and all of these flashy things that he had.
So I feel very comfortable in saying that there's at
least several million dollars that we don't have control over.
But the FBI agent who's helping us with the financial part of
the case will be back in the office tomorrow, I believe, and
so we will certainly work with him to try to get that number
and give the Court our best estimate of what we think is
missing.
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Just a couple of things I want to address --
THE COURT: We did not mention the fact that he tried
to change his name.
MR. PHILLIPS: He did change his name. Not tried, he
did.
THE COURT: Oh, he did actually change it to Karl
Lucius Delano?
MR. PHILLIPS: He legally changed his name in Cobb
County, yeah, the Superior Court of Cobb County. And the
timing of that is extremely suspicious. His version to the
BOP doctor was I waited until after I got a -- I became a
naturalized citizen to do it. Yeah, he waited about ten years
to do it.
He was saying it was because people had a hard time
pronouncing his name, and that's why he wanted to change it.
But the timing of it coincides with the fraud and the money
laundering, and you could see that he's using both names to do
the fraudulent transactions. You could see in the indictment
and the other documents that we filed that he uses both names
to commit the fraud and the money laundering.
So once he got the new name from Cobb County, he
didn't stop using the old name. He's just now using two
names. He also has two different Social Security numbers that
he's used.
Let me address one thing that Mr. Strongwater said
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about the Government having names but not Social Security
numbers in the PPP loan application. The name and a Social
Security number are both forms of means of identification, as
that term is defined in Section 1028(a), the aggravated
identity theft statute.
There's no rule that I'm aware of that says that you
have to have more than one means of identification in order to
charge somebody with aggravated identity theft. The law, I
believe, is just the opposite that one of those is sufficient
by itself. So clearly he used the names of 493 people. Even
if he didn't use any Social Security number, he committed
aggravated identity theft if he knew that those were real
people who's names that he was using in connection with that
bank fraud. That's one thing.
The other one is I realize this is nitpicking, but I
don't want to create unnecessarily low expectations for
purposes of discussions with Mr. Strongwater. But I know that
there is at least one additional enhancement in the guidelines
that would apply, and that is if you get more than a million
dollars from a financial institution or multiple financial
institutions, that's plus two.
So in addition to the calculations that the Court
already did on the back of the envelope, I would ask start
thinking about the plus two because he clearly got more than a
million dollars from a financial institution.
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THE COURT: Yeah, but that may very well be right,
but I think you get what you want by way of it being a serious
offense just at 70 -- 70 months is a lot of time. You're
right, it could be higher. I didn't -- I didn't run any of
the special characteristics. I simply used base offense level
and amount of the loss on the low end.
MR. PHILLIPS: By itself, that's a big number.
THE COURT: It is. Okay. All right.
MR. STRONGWATER: Could I ask the Government?
THE COURT: Yes.
MR. STRONGWATER: In talking about the clawback, what
bank was the 3 million transferred into?
MR. PHILLIPS: I think it went from JPMorgan Chase
to -- what's the big bank in Pittsburgh?
MR. STRONGWATER: PNC.
MR. PHILLIPS: I think it's PNC, yeah. You've got
all those.
MR. STRONGWATER: That has not been touched?
MR. PHILLIPS: Oh, no, the --
MR. STRONGWATER: I mean, to say that $3 million was
transferred, I think --
MR. PHILLIPS: No, that account --
MR. STRONGWATER: That's not a missing pocket of
money.
THE COURT: No, I think what he's saying is there was
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about between the PPP loan -- PPP loan and the tax return,
there was somewhere in the neighborhood of 12.
MR. STRONGWATER: Yes.
THE COURT: Of which six was actually obtained.
MR. STRONGWATER: Okay.
THE COURT: Of which three was transferred in that
big transfer of which some amount of that has been obtained
through the seizure of assets. But that amount, if you add up
what's in Government's pleading 34, if you add up the 800,000
for the trailers, assuming they've been seized, and the other
amounts in the chart, you get about 3.1 million, which would
mean there's still somewhere in the neighborhood of 3 million
missing, back-of-the-envelope stuff. Because I think the
Government said the other 3 million was clawed back by the
bank immediately.
MR. PHILLIPS: I think it was -- it might even be
closer to 6 million that was clawed back by JPMorgan Chase.
THE COURT: Okay.
MR. PHILLIPS: I know that there was the initial
transfer of $3 million by check.
THE COURT: Yup.
MR. PHILLIPS: Because the defendant wrote on there
this is for payroll, and that went from Chase to PNC.
THE COURT: So that may -- if that was 3 million and
now it appears that you-all have retained assets that cost
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about 3 million, perhaps there is not -- perhaps there is not
a lot of money missing.
MR. STRONGWATER: Because there's the $600,000
deposit and the boat that was reclaimed. So we're dealing
with six figures to seven figures, but it's still something
for the Court to consider and something we have -- both sides
have to account for at the end of the day.
MR. PHILLIPS: We haven't seized $6 million worth of
cash and property.
THE COURT: Okay. Well, we're all talking about
hypotheticals here. I'd like somebody to let me know, the
Government to let me know what they believe the amount that's
missing is, okay?
MR. PHILLIPS: Yes.
THE COURT: Because that is -- seems to be the
biggest part of the Government's argument here is that there
is a big incentive to flee because of what's been missing,
okay?
MR. PHILLIPS: Yes, Your Honor.
THE COURT: All right. Anything else?
MR. STRONGWATER: Not at this time. Nothing for
Mr. Torjagbo.
THE COURT: Say that again.
MR. STRONGWATER: Nothing for Mr. Torjagbo.
THE COURT: Okay. All right. Thank you-all very
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much. I appreciate it.
MR. PHILLIPS: Thank you, Judge.
(The proceedings were adjourned at 3:00 p.m.)
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REPORTERS CERTIFICATE
I, Keisha M. Crump, Official Court Reporter for the
United States District Court for the Northern District of
Georgia, with offices at Atlanta, do hereby certify:
That I reported on the Stenograph machine the
proceedings held in open court; that said proceedings in
connection with the hearing were reduced to typewritten form
by me; and that the foregoing transcript is a true and
accurate record of the proceedings.
This the 21st day of NOVEMBER, 2023.
/S/ Keisha M. Crump, RCR, RMR, RPR
Official Court Reporter
United States District Court
Northern District of Georgia
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