Court filing
Transcript of Sentencing Hearing for dates of June 29, 2021 — USA v. Crowther (Dkt. 179, M.D. Fla. No. 2:20-mj-01094, docketed in No. 2:20-cr-00114)
Filed August 12, 2021 in USA v. Crowther; one of 318 filings from this case.
Record facts
| Court | U.S. District Court for the Middle District of Florida |
|---|---|
| Filed | 2021-08-12 |
U.S. District Court for the Middle District of Florida · No. 2:20-cr-00114 · Doc. 179 · 2021-08-12 · Docket on CourtListener
Full text
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
________________________________
)
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
Vs. )Case No.: 2:20-cr-114-JES-MRM
)
CASEY DAVID CROWTHER, )
)
Defendant. )
________________________________)
SENTENCING HEARING PROCEEDINGS
BEFORE THE HONORABLE JOHN E. STEELE
June 29, 2021
10:01 a.m.
APPEARANCES:
FOR THE PLAINTIFF:
MICHAEL V. LEEMAN, ESQUIRE
TRENTON J. REICHLING, ESQUIRE
SUZANNE C. NEBESKY, ESQUIRE
United States Department of Justice
Office of the United States Attorney
2110 First Street, Suite 3-137
Fort Myers, Florida 33901
FOR THE DEFENDANT:
NICOLE HUGHES WAID, ESQUIRE
Fisher Broyles LLP
2390 Tamiami Trail North, Suite 100
Naples, Florida 34103
COURT REPORTER:
Stacey E. Raikes, RMR, CRR
2110 First Street, Suite 2-163
Fort Myers, Florida 33901
ALSO PRESENT:
CASEY DAVID CROWTHER, DEFENDANT
Proceedings reported and transcribed by computer-aided
stenography.
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
TABLE OF CONTENTS
SENTENCING HEARING
WITNESSES
On behalf of the Defendant:
JESSICA HOLLOBAUGH
Direct examination by Ms. Waid................ 36
Cross-examination by Mr. Leeman............... 49
EXHIBITS
On behalf of the Government:
Admitted
Numbers 22 & 23.................................... 65
Number 13.......................................... 81
Number 14.......................................... 85
Number 21.......................................... 89
Number 29.......................................... 110
On behalf of the Defendant:
Admitted
Number C........................................... 40
Number C1.......................................... 42
Numbers C2 - C9.................................... 43
Numbers D & D1..................................... 48
Number F........................................... 61
MISCELLANY
Proceedings, June 29, 2021......................... 3
Court's ruling..................................... 152
Certificate of Court Reporter...................... 164
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
P R O C E E D I N G S
(Court called to order.)
THE DEPUTY CLERK: Your Honor, case
2:20-cr-114-JES-MRM: The United States of America versus Casey
David Crowther.
THE COURT: Thank you.
Counsel, if you'd identify yourselves and your
respective clients beginning with counsel for the government.
MR. REICHLING: Good morning, Your Honor. Trent
Reichling, Michael Leeman, and Suzanne Nebesky on behalf of the
United States. Also present at counsel's table is United
States Secret Service Agent Brian Kirby.
THE COURT: All right, good morning.
MS. WAID: Good morning, Your Honor. Nicole Waid on
behalf of Casey Crowther.
THE COURT: All right. I notice we have a standing
room only crowd. What I'm going to do is fill in the jury with
those of you standing and see how many we have left. I do that
with the caveat that, once you sit down, you can't be leaving
until we take a recess. And so, those of you who want to stay,
the first however many we have seats, come on up. If you're
too shy, you can leave the courtroom.
(Pause.)
THE COURT: Jodi can stay right there. Just
backfill. And the people in the center seats can stay there,
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
that's fine.
(Pause.)
THE COURT: We got everybody? All seats? All right,
we'll see how that goes. I know we still have some people
standing, but we'll just see how that works out.
All right, this is the time set for sentencing with
regard to Mr. Crowther. Are both sides ready?
MR. REICHLING: The United States is ready, Your
Honor.
MS. WAID: Yes, Your Honor, defense is ready.
THE COURT: All right. Ms. Waid, if you and
Mr. Crowther would come on up to the podium for me, please.
Mr. Crowther, on March the 22nd of 2021, you entered
a plea of guilty to counts five and six of a second superseding
indictment. Count five charged you with bank fraud in
violation of Title 18 United States Code Sections 1344 and
Section 2, while count six charged you with making a false
statement to a financial institution in violation of Title 18
United States Code Sections 1014 and Section 2. I have
previously accepted your pleas of guilty and adjudicated you
guilty of those offenses.
On March the 26th of 2021, a jury found you guilty of
counts one, two, three, and four of a second superseding
indictment. Count one charged you with bank fraud in violation
of Title 18 United States Code Section 1344 and Section 2.
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
Count two charged you with making a false statement to a
financial institution in violation of Title 18 United States
Code Section 1014 and Section 2. And counts three and four
charged you with illegal monetary transactions in violation of
Title 18 United States Code Sections 1957 and Section 2.
We have now reached the stage of the proceedings
where it's my obligation to decide what sentence should be
imposed upon you. Have you read the presentence report that's
been prepared in this case?
THE DEFENDANT: Yes, Your Honor.
THE COURT: And have you discussed the contents of
that report with your attorney?
THE DEFENDANT: Yes, Your Honor.
THE COURT: Ms. Waid, have you, likewise, read the
presentence report in the case and discussed the contents with
your client?
MS. WAID: Yes, Your Honor.
THE COURT: Counsel for the government, have one or
both of you read the presentence report and discussed it with
whoever you wish to?
MR. REICHLING: Yes, Your Honor.
THE COURT: All right.
My normal procedure and what I would propose to do in
this case is to first discuss any objections to the facts set
forth in the presentence report. Then to address the
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MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
sentencing guideline calculations in terms of whether there's
objections to those. And, finally, to address the pending
motion for a variance and the sentence to be imposed.
I believe both sides have submitted exhibits. I
infer from that that somebody anticipates calling witnesses.
Perhaps I'm wrong, but that seems to be the situation.
MS. WAID: Your Honor, we had anticipated calling two
witnesses. One for the obstruction enhancement, but the
government has told us that they're not going to forward with
part of that enhancement where we would need a witness. And
the second witness that we have is pursuant to the loss
amounts. So it would depend on how the Court is going to rule
if we need testimony.
THE COURT: All right. Well, that brings up a better
point. Let me first ask whether there's any aspect of the
calculation of the sentencing guidelines that the government
does not support and we'll see.
MR. REICHLING: Your Honor, I believe the government,
with regards to one of the enhancements, is going to concede
that it does not apply, and that is the enhancement that --
with respect to the position of trust enhancement. And I'm
trying to find where that's located in the presentence report.
My apologies, Judge.
THE COURT: Yeah, it's going to be paragraph 83.
MR. REICHLING: That's correct, Judge.
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
While the government does understand probation's
reasons for including it, that being that the defendant's role
as the owner and president of Target Roofing definitely lent
credence to his use of PPP funds in that it wasn't questioned
by his upper management team or employees of Target Roofing,
the government believes the case law is too difficult in terms
of supporting the government getting behind this particular
enhancement. So the government concedes that it does not
apply.
THE COURT: Does that mean that you would suggest the
Court sustain the objection to that?
MR. REICHLING: Yes, Your Honor, that would be fine
with the government.
THE COURT: All right.
Ms. Waid, anything else with regard to that
particular adjustment?
MS. WAID: No, Your Honor.
THE COURT: All right. The Court will sustain the
objection. The Court will delete paragraph 83 and, of course,
delete the plus two that had resulted.
All right, any additional aspect of the sentencing
guideline calculations to which there is no support from the
government?
MR. REICHLING: No, Your Honor.
THE COURT: All right.
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
With regard to the Court's proposal to first address
factual objections in the contents of the report, then the
application of the guidelines, I suppose, someplace in there
where it may need testimony, anyone have a better procedure or
better process to follow?
MS. WAID: No, Your Honor, that's fine with the
defense.
MR. REICHLING: I have no suggestions, Your Honor.
THE COURT: All right. Let's take a look at the
presentence report with regard to any outstanding factual
objections. I don't recall any factual objections being filed
by the government. Is that still the government's position?
MR. REICHLING: Yes, Your Honor.
THE COURT: All right. In terms of factual
objections from the defendant -- Mr. Crowther, you may stand
there, if you wish, or you may have a seat while we go through
this process. It's up to you.
THE DEFENDANT: Thank you, Your Honor.
THE COURT: All right.
Ms. Waid, any actual objections to the current
version of the presentence report?
MS. WAID: The objections that we had prior, Your
Honor, still stand. I can, for the Court and for the record,
actually put down the parts of the trial transcripts that
support that. So for paragraph --
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
THE COURT: Let me stop you here.
MS. WAID: Yup.
THE COURT: I have, actually, the first version to
which there were objections, basically, the current version
that's before the Court. I've not compared one version to the
other. So you're going to need to make your factual objections
anew to the current version and let me rule on those because I
don't know what was changed from one version to the other.
MS. WAID: Correct. So for in paragraph five --
THE COURT: Yes.
MS. WAID: -- where it is represented that they are
loan proceeds or bank proceeds, not -- or they're represented
that they're SBA loan proceeds, not bank proceeds, we agree
that that's what the indictment says. We disagree factually
that those were the facts of the case. And that cite would be
Stephen Miller's transcript, paragraph 47, lines 22 to 25,
paragraph 48, lines 1 through 7.
THE COURT: All right. I'm with you at paragraph 5.
And let me find the reference to the SBA that you're referring
to. Oh, here it is.
So the objection isn't that it misstates the
indictment, it's just that the indictment misstates the
evidence?
MS. WAID: Yes.
THE COURT: Is that the bottom line?
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
MS. WAID: That's the objection, Your Honor, yes.
THE COURT: All right, I understand that. What, if
anything, did you want me to do with regard to the language in
paragraph five?
MS. WAID: Nothing, Your Honor. We just, for the
record, wanted to put that on the record.
THE COURT: Okay. That's fine then. What's next?
MS. WAID: In paragraph 17, the paragraph
mischaracterizes the CARES Act. The loan was actually a 1
percent loan between the borrower and the lender and, although
it could be eligible for forgiveness, there was no requirement
that it must be used for payroll and benefits.
The cite to that -- and, again, this is for the
record, Your Honor -- is the Miller trial transcript at page
62, 8 through 10; the DeCicco trial transcript at page 26,
lines 4 through 5 and 11 through 15, page 33, line 17 through
34.
THE COURT: What's the change in paragraph 17 that
you want me to make?
MS. WAID: I would say that, instead of the loan was
to be used to pay payroll and benefits, the loan could be
forgiven if it was used to pay payroll and benefits to keep
American workers employed.
THE COURT: Well, the sentence, or the paragraph,
rather, begins, "The PPP loan was a forgivable loan." Does it
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
address your problem to change that to something like, "The PPP
loan could be forgivable loan" --
MS. WAID: Yes.
THE COURT: -- instead of was?
MS. WAID: Yes, Your Honor. The PPP loan was a 1
percent, low-interest loan that could be forgivable would be
preferable.
THE COURT: So if I change that first sentence to
read, "The PPP loan was a 1 percent loan, which could be a
forgivable loan," does that address your concerns?
MS. WAID: Yes, sir.
THE COURT: Any other suggested changes in that
paragraph?
MS. WAID: No, Your Honor.
THE COURT: Any objection from the government to the
Court's suggested change?
MR. LEEMAN: No, Your Honor.
THE COURT: All right. I will direct that that
change be made to paragraph 17.
All right, Ms. Waid, what's next?
MS. WAID: In paragraph 18, Your Honor, and it's
trial Exhibit No. 8 we were looking at, it says in the
application, the borrower had to certify that they were going
to use the PPP loan for specific business purposes, and it's
referring to trial Exhibit 8.
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
We would ask that it state, "The PPP application form
was an SBA form utilized for forgiveness, but filled out by the
borrower at the time of the application for the loan."
THE COURT: Say, again, your suggested --
MS. WAID: Yes, Your Honor.
THE COURT: -- sentence, please.
MS. WAID: Sorry. "The PPP application form was an
SBA form utilized for forgiveness, but filled out by the
borrower at the time of application for the loan."
THE COURT: Why is that difference significant?
MS. WAID: Because it's actually not -- he's
convicted of bank fraud and it was an SBA form, not an actual
part of the bank loan application forms, and the argument being
that the language in the SBA form tracks the language of the
interim final rules, which the SBA has later come out and said
were inaccurate and needed to be changed.
THE COURT: All right. What says the government?
MR. LEEMAN: Your Honor, this seems to me to be an
attempt to really add facts that they lost at trial. The
application was on an SBA form, but it was the application for
the loan. As the Court, no doubt, remembers, a large part of
their defense was there was some division between you could get
a loan, but -- and you could use it for what you wanted, but
once you applied for forgiveness, that's when these
constrictions or restrictions applied, rather. I believe
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
that's what they're trying to do here by inserting this
language it was a form utilized for forgiveness. I haven't
heard any evidence of that, Your Honor. The application that
we used at trial and which is referred to here was provided to
the bank to get the bank to make a loan. Whether it was
generated by the SBA or not is besides the point. It was the
application used by the bank to generate the loan.
So, on top of that, Your Honor, I don't see how that
meaningfully adds anything. And so, you know, to the extent we
believe they're trying to sort of insert facts that weren't
supported by the trial record in support of their defense in a
case that they lost, we would object to it.
THE COURT: All right. The Court's going to overrule
the objections and the Court finds that paragraph 18 as written
is accurate and, therefore, as I said, the objection will be
overruled.
What's next?
MS. WAID: For paragraph 27, Your Honor, with regard
to the opening of the new account.
THE COURT: Yes.
MS. WAID: We had an objection in there that we would
like to maintain that, according to -- there's some still
confusion on the trial record as to the opening of that account
pursuant to Government's Exhibit Trial Exhibit No. 100 where a
bank account had just been opened a couple weeks prior and --
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
for Target Roofing and there were no funds in that account
pursuant to the trial record and so it would be unclear as to
why a new account would be opened.
We just wanted to get that on the record, that there
was some confusion regarding three different accounts; the
operating account, an account that was opened on April 10th,
and account that was opened on March 23, 2020.
THE COURT: Is there any portion of paragraph 27 as
written that, in your view, needs to be changed or you just
want the record to reflect your position?
MS. WAID: We'd like the record to reflect our
position, please.
THE COURT: All right. It will so reflect.
What's next?
MS. WAID: In paragraph 29, it appears from
Government's Exhibit 20, Trial Exhibit 20, that the different
calculation was based upon employee withholdings.
THE COURT: And so what part of paragraph 29 needs to
be corrected, in your view?
MS. WAID: Again, we just wanted that clarification
for the record.
THE COURT: Again, nothing specific to be changed in
the presentence report, just your position on the record?
MS. WAID: Correct.
THE COURT: Okay. And what's the next paragraph?
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MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
MS. WAID: In paragraph 50, this is where, Your
Honor, that we were going to put on a witness to state that the
letter from the bank was actually utilized to provide to
customers and in order to make them feel comfortable that
Target was a viable business. We were going to present
evidence and we're happy to present that evidence, but the
government indicated to me this morning that they were not
going to proceed on that position.
THE COURT: All right.
What says the government then with regard to
paragraph 50?
MR. LEEMAN: Your Honor, as a factual matter, are we
talking about paragraph 50 or 48, Your Honor? I'm sorry. In
the new PSR.
THE COURT: I thought it was paragraph 50 that you
said; is that correct --
MS. WAID: Yes.
THE COURT: -- Ms. Waid?
MR. LEEMAN: Thank you, Your Honor. Just give me a
minute. I was reading the wrong paragraph.
THE COURT: Sure.
(Pause.)
MR. LEEMAN: Your Honor, the part about the letter
being sent is factually accurate. The government is happy to
excise some portion, if Mr. Crowther has some proposed
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
language.
We are not going to be asking the Court to base any
obstruction enhancement based on the provision of the -- a
letter went to the -- from the bank to Mr. Crowther which said
he was in good standing. That bank was then forwarded to the
government. Or that letter was then forwarded to the
government. So the letter was sent, that's factually accurate,
so I don't believe any facts about the letter being sent need
to be removed. But to the extent language within paragraph 50
suggests that the good standing letter being sent is the basis
for obstruction, we would get comfortable with removing that
language, Your Honor
THE COURT: All right. So, as I understand, there's
still a request for the obstruction of justice enhancement.
Just the premise for that is not based upon this letter.
MR. LEEMAN: That's right, it's narrower, Your Honor.
THE COURT: Okay.
And so what portion of that paragraph do you suggest I strike?
MS. WAID: I would suggest, Your Honor, the last
sentence be struck.
THE COURT: That begins, "Additionally, trial
testimony."
MS. WAID: Yes.
THE COURT: Any objections?
MR. LEEMAN: No, Your Honor.
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MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
THE COURT: The Court will strike the last sentence
in that paragraph.
All right, what's the next paragraph?
MS. WAID: Paragraph 60, Your Honor.
THE COURT: Sixty. Okay.
MS. WAID: There were no allegations or evidence
established at trial that any PPP funds were utilized to
purchase a horse. I believe that evidence was brought in as
other crimes evidence pursuant to the way it was characterized
on the wire. So we'd suggest striking buy a horse from
paragraph 60.
THE COURT: What says the government?
MR. REICHLING: Your Honor, while the government's
focus was not on the defendant's misuse of PPP funds in trial
on the horse, the government did present sufficient evidence
showing that the defendant went at great lengths to disguise
the purchase of the horse. The purchase of the horse, I
believe, was on June 1st of 2020. The defendant moved over PPP
funds into his bank account -- this is all from evidence
presented at trial. The defendant moved PPP funds over to his
main operating account, which was the account used to buy the
horse on May 7th of 2020. The government inferred that -- or
the evidence suggested, at least circumstantially, that the
great extent to which the defendant went to disguise his
purchase of a horse by calling it roofing materials to the
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MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
bank, by sending an email to the bank and asking them for proof
the wire went through because he needed to provide something to
his guys so they can pick up roofing materials showed --
exhibited what we believed was intrinsic evidence of the fraud
and the great lengths that he had went to supported at least
the notion that the defendant was utilizing PPP funds to
purchase the horse.
We would agree, though, that, you know, there is no
direct link between a transfer of money and then the purchase
of a horse factually within the bank records because of the
time -- the temporal distance between the time the money was
transferred over and the purchase of the horse, but I think it
is important to note that the defendant went to great lengths
to disguise the purchase and use of at least his main operating
funds to buy the horse. So I don't know how Your Honor wants
to handle the insertion within the presentence report that he
bought a horse with PPP money. While it wasn't the focus of
the government's case, we did believe that the evidence of the
horse purchase was intrinsic to the PPP fraud.
THE COURT: Ms. Waid, is the gist of the objection
that the reference to buying a horse is improperly in a
paragraph that is captioned Summary of the Offense Conduct?
MS. WAID: Yes, Your Honor.
THE COURT: So it's not a dispute that a horse was
purchased for $55,000, it's just that that was, in your view,
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not part of the charged offense?
MS. WAID: Yes, Your Honor. My objection is that it
states that the horse was bought with PPP funds and the trial
record, as it stands, is that all of the business funds at that
point in time were commingled into an operating account and
there was various accounts receivables going into those
accounts and so there was no way, and nor did the government do
it at trial, trace those as PPP funds.
THE COURT: I'm not sure that a reasonable jury
couldn't have made that finding. You have $1.7 million or so
transferred I think it was early June and a horse purchased
some time after that from that operating account. That's
certainly true.
MS. WAID: But it's certainly true, also, if the bank
records are viewed as part of the trial exhibits, that there
was lots and lots of money going into those accounts as soon as
different projects were being paid for and so that money as an
S Corp is actually money that Mr. Crowther could take as a
distribution later on in the year. It's also the amount of
working capital that they had was -- I don't see how they could
possibly trace the PPP funds to the horse based upon the amount
of money that was coming into those accounts at that time. So
it's just the buying the horse that I do not believe is
supported by the evidence.
THE COURT: All right. To the extent that paragraph
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60 is captioned Summary of the Offense Conduct and to the
extent that the allegation about buying a horse was not set
forth in the second superseding indictment, the Court's going
to sustain the defendant's objection. The Court will strike
the phrase, "Buy a horse," from that paragraph and, otherwise,
leave it as is.
All right. What's the next paragraph?
MS. WAID: I would say in paragraph 61, towards the
end of the paragraph, it states, "Additionally, Crowther
altered bank statements to receive a mortgage towards the
purchase of a new residence which he did not rightfully have
the money for the down payment." We disagree with the fact
that he did not rightfully have the money for the down payment
and don't believe that the evidence at trial actually supports
that.
THE COURT: This is on the guilty plea portion?
MS. WAID: This was actually -- yes, this is the
mortgage fraud.
THE COURT: All right, okay.
MS. WAID: So, whereas we agree that he committed
mortgage fraud, absolutely, we do not believe that he -- he did
have sufficient money for the down payment is what the argument
is.
THE COURT: And what was the fraud that he committed?
MS. WAID: He altered bank statements to make it look
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like all that money was in one bank account instead of several
different bank accounts.
THE COURT: So he had the money -- your view is he
could have got the mortgage lawfully, but -- because he had the
money for the down payment, but, nonetheless, he falsified the
bank records?
MS. WAID: Correct.
THE COURT: All right. What says the government?
MR. REICHLING: Your Honor, the government would
object. The evidence, although we did not have a trial on the
mortgage fraud counts, the evidence, Your Honor, is that the
defendant moved $400,000, approximately, from his Jade Avenue
account into his main operating account. On the same date he
transferred those funds into his main operating account, he
pulled $150,000 from his Target Roofing business line of credit
into his main operating account and then used remaining liquid
assets that were already in Target Roofing's main operating
business account to then wire out 600 -- I don't have the exact
number, Your Honor, but 600, I think, 80 something thousand
dollars to the bank.
What the defendant hid, Your Honor, really, was his
use of another form of liability or debit, which was the use of
line of credit funds. That's the focal point and something
that the lender in this case, which would have been incredibly
material to their determination of whether to approve or
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disprove of his loan application or his mortgage application,
was his use of $150,000 from his line of credit to purchase the
home. The bank records, which are actually -- were put into
evidence for other reasons, you know, with regards to the other
accounts, support the fact that, on the day the defendant wired
the money to purchase the house, he pulled $150,000 from his
line of credit after comingling funds from another account into
his main operating account.
So I believe that that factual distinction is
incredibly important and supports the fact that the defendant
used line of credit funds. He did not have the appropriate
amount of money in his accounts to pay for the down payment.
The ending balance of the main operating account on July 30th,
which was the date preceding the day he wired funds for the
purchase of the home, was $200,000. That was what was in the
Target Roofing main operating account. The funds he
transferred over were $400,000. He had to come up with
approximately 680 or so thousand dollars for his down payment
on his mortgage. He did not have enough money in his main
operating account and also including his money from this other
Jade Avenue account to come up with this down payment. It's
certainly obvious, at least from the government's point of
view, that the use of the line of credit funds on the same date
was to fund the down payment of the mortgage. Otherwise, he
would have completely liquidated all of Target Roofing's
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assets, its liquid assets, to put down a down payment on a
house.
THE COURT: Well, as I understand the arguments, it's
certainly not contested that the defendant altered bank
statements to receive the mortgage towards the purchase of a
new residence and is not -- there's no objections to the
reference to the $150,000 business line of credit. The only
issue is the phrase, "Which he did not rightfully have the
money for the down payment." I don't see that as being an
element of the offense to which he pled guilty or in any way,
whether it's true or not, impacting his guilt or the potential
sentence, quite frankly. The Court's going to sustain the
objection to the extent it will strike the phrase, "Which he
did not rightfully have the money for the down payment," from
that paragraph.
And what's next?
MS. WAID: And then I believe we go on to the
adjustments, Your Honor.
THE COURT: Let me call your attention first to
paragraph 63, which is part of the victim impact, and there was
some indication of restitution being made by June the 25th.
What's the update, if any, as to that?
MS. WAID: Yes, Your Honor, and there's actually an
exhibit marked.
Mr. Crowther was able to pay $30,000 towards the
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loan. He wanted to pay the entire amount; however, we're
currently in a construction crisis where there are no building
materials. It's a supply and demand issue due to the pandemic
and many of his projects have been halted. So a lot of the
money he was anticipating getting in has not got in as of yet,
but he has made a $30,000 payment.
THE COURT: Should paragraph 63 just be stricken or
is there some modification that may be helpful?
MS. WAID: Let's see.
You could say, "Cheffer acknowledges that Sanibel
Captiva Community Bank is owed the 2.98 from Casey Crowther
from the PPP loan. Mr. Crowther has paid $30,000 towards that
loan." And I want to say it's actually Exhibit I in my -- in
Defendant's Exhibits that I can proffer to the Court.
THE COURT: So if I leave the first sentence in, add
a sentence that he's paid $30,000, then do the math, that would
come up with the restitution figure?
MS. WAID: Yes, Your Honor. And he anticipates being
able to pay more of it off as the accounts receivable are
received and as projects begin to be funded again pursuant to
the shortage.
THE COURT: All right. And do you want that included
in the paragraph or is that just information for the Court?
MS. WAID: That's just information for the Court,
Your Honor.
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THE COURT: All right.
What says the government with regard to paragraph 63?
MR. LEEMAN: Yes, Your Honor.
Is the Court considering, essentially, leaving the
first sentence, striking the rest, and adding something to the
effect of he has paid $30,000 by the date of the sentencing?
THE COURT: That's exactly what I'm considering.
MR. LEEMAN: Thank you, Your Honor.
I just want to confirm that we actually had -- we did
get exhibits last night and I want to see how firm the proof
is. I don't want to speak for the bank receiving a $30,000
payment. We hadn't been informed of that. The last we had
been informed of the bank was that they had not received any
payment, but it was not as early as last night, Your Honor,
when we received the exhibits.
THE COURT: All right. Go ahead and check.
MR. REICHLING: I don't have an Exhibit I on your
exhibit list; so...
THE DEPUTY CLERK: I believe it's H.
MR. REICHLING: It ends at H.
MS. WAID: Oh, Exhibit H. I apologize.
(Pause.)
MR. LEEMAN: I've got the bank attorney nodding to me
from the jury box that the payment was, in fact, made.
MR. CHEFFER: That's correct, Your Honor.
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MR. LEEMAN: So we don't have the exhibit from
Ms. Waid. I don't know. It's just as likely it's an oversight
by our office in printing as it was her sending it to us. But,
given Mr. Cheffer's indicating that the payment was made, we
don't have an objection to the amendment to the PSR, Your
Honor.
THE COURT: All right. Well, his nodding is good
enough for the Court.
And what was the date that the defendant paid the
$30,000 to the bank; does anyone know for sure?
THE DEFENDANT: I believe it was yesterday, Your
Honor.
THE COURT: So that would be the 28th of June?
THE DEFENDANT: No, the 25th. I'm sorry, Your Honor,
it was the 25th.
THE COURT: 25th? Thank you.
MS. WAID: Exhibit H corroborates it was the 25th,
Your Honor.
(Pause.)
THE COURT: All right, here's what I propose: Is to
leave the first sentence or paragraph 63 as is, to delete the
remainder of the paragraph, to add the following sentence:
"Defendant paid $30,000 to bank on June 25, 2021,
leaving a balance of $2,068,700." First of all, someone needs
to check my math.
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MR. LEEMAN: I believe your math is good, Your Honor.
Thank you.
THE COURT: That's the first time then.
All right. Any objections to those changes to
paragraph 63?
MS. WAID: No, Your Honor.
PROBATION OFFICER: Your Honor, could you repeat
the --
THE COURT: Sure. The new sentence reads, "The
defendant paid $30,000 to the bank on June 25, 2021, leaving a
balance of $2,068,700."
PROBATION OFFICER: Thank you.
THE COURT: Okay. All right, what's the next
paragraph or do we get into guideline issues?
MS. WAID: We got into guideline issues adjustments
for obstruction of justice, Your Honor.
THE COURT: Okay. How do the parties propose to
proceed with regard to the sentencing guideline issues and
testimony that may be required?
MS. WAID: I'd ask Your Honor, first, if Your Honor's
inclined to actually provide the enhancement and then argument
from either side. Like I said, we were going to put on a
witness for the obstruction of justice, but the paragraph 65 of
the letter of good standing, apparently, is no longer an issue
for the government. So it's really just the initial letter
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that was sent by me in September of 2020, pre-indictment, in an
attempt, pursuant to Rule 408 settlement negotiations, to make
this, in all honesty, a civil case instead of a criminal case.
THE COURT: Well, I want to hear oral argument as to
all of the proposed adjustments. I don't know if there's
factual issues or disputes with regard to some of them. I
think some of them -- how should I phrase this -- give me more
pause than others. That doesn't mean one side's going to win
or lose, but the first thing we need to do, I guess, is figure
out if there's any factual disputes. And then, if so, the
Court will have to resolve those factual issues. Then rule as
to the law. So I don't think I can tell you right now how I'm
going to rule, if that's what you're asking.
MS. WAID: Okay. Well, there were some legal --
well, actually, it was abuse of trust was more of a legal issue
in our words, but that's no longer on the record; so...
THE COURT: Well, I mean, for example, is the other
part of the obstruction of justice statements made by the
defendant? I don't recall testimony at trial with regard to
statements made by the defendant or counsel postarrest. If
there's a dispute as to that, we probably need to take
testimony. If both sides agree as to the facts, then you can
tell me and we'll proceed from there. Then it becomes simply a
legal issue. But, as I sit here now, I don't know.
MS. WAID: Right.
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THE COURT: So how do you intend to proceed? Do you
just want to proceed by paragraph and I'll call upon you to
tell me if there's any factual dispute? And, if not, I'll hear
legal argument as to that paragraph and then move on to the
next one or something else?
MS. WAID: That works for the defense, Your Honor.
MR. LEEMAN: It does work for the government, too,
Your Honor. And, just to sort of clarify, the government, I
don't -- we don't really have any plans to call any witnesses.
To the extent we have exhibits, I think they are things which
are already in the trial record. We have marked, for instance,
exhibits of transcripts from trial testimony. We would be
introducing those. I don't believe any of these things are
going to be objectionable. Of course, we can cross that bridge
when we come to it.
THE COURT: Okay.
MR. LEEMAN: But, as far as testimony goes, we're
certainly happy to just sort of see how it plays out.
THE COURT: Well, all right. Well, let me do it this
way then: The next paragraph that gives me concern and that I
want either oral argument or testimony or some combination of
both is paragraph 76, the calculation of the guidelines.
Specifically, the calculation of the loss amount. And, again,
I don't know if there's factual disputes or just, you know,
legal argument, but you can tell me right now. Paragraph 76
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has a plus 16. As I understand, the defendant says it should
be a plus zero. And so either proceed with testimony or oral
argument at your pleasure.
MS. WAID: Yes, Your Honor. We have both oral
argument and we also do have a witness for the loss amounts.
THE COURT: Okay. Well, let's start with the witness
then.
MS. WAID: Okay. And this witness also, if we can
jump just so we don't have to -- if it's easier for the Court
to bring her back, will also be testifying for the financial
information provided by the defendant. Essentially, you know,
the monthly income and cash flow as well in order to just
clarify that for the PSR.
THE COURT: I guess my preference, unless she has
scheduling issues, is to separate those testimony into two
different occurrences.
MS. WAID: Okay. That's fine, Your Honor. And so,
just from our perspective prior to putting her on, the reason
that we believe that the loss amounts should be zero are
because the intended loss pursuant to probation was the loan
amount, however, as the Court knows, the sentencing guidelines
make that also subjective. And the evidence, you know, at
trial and beyond, has shown that Mr. Crowther actually had
always intended to pay the bank. He's in constant
communication with the bank. He's already made a payment. As
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soon as he actually got the loans, he was paying employees as
well. So there's really no evidence to show otherwise and we
believe that there can be no intended loss if the purpose was
to pay his employees and his employees were, in fact, paid and
that there's no evidence at trial to suggest otherwise,
frankly.
We do want to put on evidence, Your Honor, of the
allowable expenses that were spent by Target. That's all in
the trial record. So just kind of summarizing what those
allowable expenses were. In the event that the Court decides,
alternatively, to go with a government benefits kind of loss
analysis, because the trial record is extremely clear that the
majority of that money, even taking apart the boat and the
promissory note, was spent on allowable expenses, which, in
fact, would most likely have been forgivable pursuant to the
CARES Act. And so we would be calling Jessica Hollobaugh for
those types of -- for that type of evidence and kind of summary
witness testimony in order to clarify for the record what those
expenses were.
THE COURT: All right.
MS. WAID: And, for the record, too, we'd also like
to -- for the intended loss, the loan is still a performing
loan and, again, Mr. Crowther is paying off on that. So we'll
call Ms. Hollobaugh to the stand.
MR. REICHLING: And, Your Honor, if I just -- the
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government may briefly respond.
I believe the appropriate -- at least the government
would be proceeding under the actual loss amount, which was the
amount of money that was caused to be lent to the defendant
based upon misrepresentations that the defendant made
concerning his use of the funds. I believe there's ample
testimony from trial from Diane Knott, as well as other
exhibits admitted at trial, that these funds, which were to the
tune of $2,098,700, for the most part, were not used for
payroll expenses, utilities, rent, or interest on a mortgage.
The record was quite clear that, but not for the defendant's
misrepresentations concerning his use of the funds, the
defendant would never have gotten this loan. The testimony of
Kyle DeCicco at trial was that, had the bank known that the
defendant was going to use a portion of these funds to purchase
a boat, they would have never approved the loan.
So the government is proceeding under the belief that
the actual loss amount is the appropriate loss amount here
because that's the amount of money the bank parted with based
upon the defendant's misrepresentations. So, for those
reasons, Your Honor, we do believe that that $2,098,700 is
applicable here as the loss amount because it is the actual
loss amount. I don't believe the guidelines call for the idea
that, if you defraud a financial institution into giving you
money or giving you a loan, that you can then say okay, I
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intend on paying it back now, I should be credited that toward
my loss. In fact, the guidelines do contemplate a situation in
which the defendant, or a defendant, would begin to make
repayments towards a loan or other financial obligation they
procured by fraud, but the guidelines state that if it is
because -- if it comes after the defendant is aware that he's
being investigated or after his arrest, those wouldn't apply as
credits towards loss.
So, to me, it appears to be more of a legal
discrepancy or difference of opinion between the government and
the defense. I think there's ample testimony and evidence that
was provided at trial that would show that the actual loss
amount is this $2,098,700 figure.
THE COURT: Well, your amount of loss theory differs
than the theory expressed in the presentence report; correct?
MR. REICHLING: That is correct. I believe the
government's opinion would be that the defendant intended to
cause a loss or intended to get this money. We believe the
actual loss and the intended loss would likely be the same
amount of money, but the case law, when it comes to fraud
cases, is that it's the greater of the actual loss or the
intended loss in determining the guideline loss amount. So we
believe that Your Honor can proceed under the actual loss
theory as well and get to the same number, but we do believe
that that is the appropriate number based on the actual loss
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theory.
MS. WAID: For the record, Your Honor, we disagree
with that legal analysis. An actual loss --
THE COURT: I'm shocked.
MS. WAID: -- just doesn't -- no.
THE COURT: All right. Do you still desire to call a
witness or are we, basically, at a legal issue?
MS. WAID: We would still like to put on a witness
for -- in the event, like we said, of the -- to show the
allowable expenses that were paid pursuant to the CARES Act in
the event that the Court decides to rule in more of a
government benefits type of analysis for loss. We'd also like
to put on just kind of the amount of money that was spent by
Target of kind of allowable expenses pursuant to the CARES Act
and the sum of that loan being utilized in allowable expense
purposes as required by the statute.
THE COURT: The government has not requested that I
utilize a benefits analysis to calculate loss; is that correct?
MR. REICHLING: That's correct, Judge.
THE COURT: All right, so since no one has asked me
to do that, I don't intend to do it.
MS. WAID: Okay.
THE COURT: So it comes down to either actual loss or
intended loss and the calculation of that. So that may give
you some guidance as to what you do or don't need to do with
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the witness. As to the second part of her testimony, I'll
certainly allow that and she can summarize however you wish the
amount of money that you claim were acceptable expenses.
MS. WAID: Okay. Thank you, Your Honor.
Can I just have a brief moment with my client just --
THE COURT: Sure.
MS. WAID: -- for a quick discussion?
(Pause.)
MS. WAID: Your Honor, we are going to call the
witness briefly just because we believe there is an intent
argument and get some testimony from there.
THE COURT: That's fine.
MS. WAID: Thank you.
THE DEPUTY CLERK: Do you solemnly swear or affirm
the testimony you are about to give in the case now before the
Court will be the truth, the whole truth, and nothing but the
truth?
THE WITNESS: I do.
THE DEPUTY CLERK: Thank you. If you would have a
seat in the witness box. And, once seated, if you would state
your name and spell it.
THE WITNESS: Sure.
THE DEPUTY CLERK: Thank you.
(Pause.)
MS. WAID: Court's indulgence. I'm just doing
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technical work here.
(Pause.)
Thereupon,
JESSICA HOLLOBAUGH,
Having been called as a witness on behalf of the Defense,
and having been first duly sworn by the Deputy Clerk, was
examined and testified as follows:
DIRECT EXAMINATION ON BEHALF OF THE DEFENSE
BY MS. WAID:
Q.
Good morning.
A.
Good morning.
Q.
Could you please state your name and spell it for the
record?
A.
Sure. Jessica Hollobaugh. It's J-E-S-S-I-C-A.
Hollobaugh is H-O-L-L-O-B-A-U-G-H.
Q.
Okay. And can you please let the Court know your
education?
A.
Sure. I have a bachelors's in accounting from
Richard Stockton College of New Jersey.
Q.
Okay. Do you have any licenses or certifications?
A.
Yes, I'm a certified public accountant. I also hold
my accreditation in business valuation and I am a certified
fraud examiner.
Q.
Okay. Where do you work?
A.
Withum Smith & Brown.
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Q.
And how long have you been with them?
A.
They are a national accounting firm. I've been with
them for 18 years.
Q.
Okay. And what's your role there?
A.
So I started with them 18 years ago in our general
audit, tax, and business consulting largely focused on
construction contractors. And, about halfway through my
career, I transitioned into our forensic and litigation support
group. And, in that group, I am now the market leader of our
forensic investigation and white collar group.
Q.
Okay. Are you a member of any other groups at
Withum?
A.
Yes, we have a construction services team. I know I
just briefly mentioned, for a good portion of my career, I
focused on audit and tax of construction companies, so I've
maintained a relationship with that group as the litigation
liaison. And, most recently, about a year-and-a-half ago, as a
result of the PPP loans and the CARES Act, we started an SBA
financial services team, and I'm also a part of that team.
Q.
And as a leader of Withum's white collar team and a
member of the SBA services team, have there been any changes in
your workload over the past year?
A.
Absolutely. So we largely do all types of forensic
investigations, but over the last year, we've been engaged on
quite a bit of these PPP related matters.
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Q.
And by PPP, what do you mean?
A.
Paycheck Protection Program. So we've been engaged
both in active investigations and then also just under the
consult of attorneys. So there's been a lot of ambiguity and
clients are a bit concerned that they may not have properly
interpreted the rules from the onset or are a little concerned
with what the forgiveness rules are. So we've been consulting
with attorneys to help them through that phase.
Q.
And did you attend Mr. Crowther's trial?
A.
Yes, I did.
Q.
Have you had a chance to review the trial exhibits?
A.
Yes, I have.
Q.
Okay. I'm going to show you what has been marked as
Exhibit No. C. And then I'm also going to provide you with C1
through 9 and we're going to go over those individually.
MS. WAID: Permission to approach, Your Honor.
THE COURT: You may. Freely.
Q.
I'm showing you what has been marked as Exhibit C.
Can you tell me what it is, please?
A.
This is a summary schedule that I put together based
on a review of the trial exhibits which were submitted and it's
a schedule that just summarizes the different categories of
forgivable expenses and the amount that was expended out of
Target Roofing's bank account over the covered period on those
categories.
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Q.
And what's a forgivable expense?
A.
So, in the CARES Act, the SBA allowed for certain
categories of expenses. And, if the borrower was to spend
money over the course of the covered period in those
categories, they were eligible to apply for forgiveness for the
loan amount.
Q.
Okay. So the SBA is the final decision maker on
forgiveness. How did you decide what to include in your
summary?
A.
Based on accounting knowledge, just classified the
items that fell within these designated categories and then
applied -- there are some restrictions. For example, payroll
is limited up to $100,000 per year. So just applied those
restrictions to those categories.
Q.
And what types of allowable expenses may be
forgivable?
A.
So the SBA originally set forth several categories,
one of which being -- it was payroll. So gross payroll along
with state and local employer taxes, group health insurance.
In addition, it was rent payments, utility payments, and then
interest payments on mortgages. They did subsequently extend
those categories in, I believe, February of 2021, and those
categories were extended to include things such as supplies and
materials and operations expenses.
Q.
What documents did you review to prepare Exhibit C?
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A.
So you'll see I also provided a bunch of exhibits
behind this so we can go into detail on each one, but for the
most part, it was the Government's Exhibits 70 through -- I
believe it was 88. It was the bank statements and supporting
documents of Target Roofing.
Q.
Okay. And is your summary a fair and accurate
depiction of summarizing what was in those trial records?
A.
Yes; correct.
MS. WAID: Your Honor, we'd like to admit Defense
Exhibit C.
THE COURT: Any objections?
MR. REICHLING: No, Your Honor. No objections, Your
Honor.
THE COURT: Defendant's C will be admitted.
(Defendant's Exhibit Number
C admitted into evidence.)
BY MS. WAID:
Q.
Okay. And can you please explain to the Court what
is in this summary report?
A.
Sure. So the summary exhibit is just a summary of
those categories that I just talked about. And the numbers in
the far right column are the numbers that I was able to
ascertain only from the documents that have been set forth in
the trial exhibits as used for forgivable purposes.
Q.
Okay. What's the timeframe for this?
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A.
The covered period was a 24-week covered period. It
started on the date that Target received the PPP loan, which
was on April 14th, and so it ran through September 28th of
2020.
Q.
Okay. And what is the number of total forgivable or
allowable expenses pursuant to your summary report?
A.
So I was able to quantify $3,496,000 of expenses,
which were expended on forgivable expenses. I will caution
you, and we'll get into it a bit later, there are likely more,
but I just couldn't quantify the full dollar amount based on
the documents that had already been submitted at trial.
Q.
Okay. And what was the PPP loan amount?
A.
$2,098,700.
Q.
Okay. And could you tell us what the forgivable
expenses paid in excess of that loan amount were?
A.
$1,397,300.
Q.
Okay. I'd like you to please look at Defense Exhibit
C1. Can you please tell me what that is?
A.
Sure. This is -- in the far -- well, you don't have
it.
So this is a summary that I created of the payroll
costs that were expended by Target during the 24-week covered
period and I created this based on the Government's Exhibit C8.
I'm sorry, that was the Defense Exhibit C8.
Q.
Okay. The Defense Exhibit C8, which was the payroll
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records; is that correct?
A.
Correct.
Q.
Okay. And there had been some trial testimony
regarding 39 employees. Are those 39 employees included in
this analysis?
A.
So in the analysis I completed, they were included in
the total number because they were included in the payroll, but
what I did was, for purposes of determining what the forgivable
expenses were, I did back out all of the 39 employees as well
as five family members that were hired during this same time
period.
Q.
Okay. And, with that exception or that caveat, is
this a fair and accurate summary of the payroll paid during the
covered period as recorded on Defense Trial Exhibit C8?
A.
Yes, it is.
MS. WAID: We'd like to admit C1.
THE COURT: Any objections?
MR. REICHLING: No, Your Honor.
THE COURT: C1 will be admitted.
(Defendant's Exhibit Number
C1 admitted into evidence.)
THE COURT: Are you going to move to admit C2 through
9?
MS. WAID: Yes, Your Honor.
THE COURT: Any objections to those admissions?
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MR. REICHLING: No, Your Honor.
THE COURT: C2 through 9 will be admitted likewise.
(Defendant's Exhibit Number
C2 - 9 admitted into evidence.)
BY MS. WAID:
Q.
And could you give me the total amount of payroll
paid during the covered period based upon C1?
A.
Sure. The total amount paid was $3,549,000. As I
just mentioned, I did back out the 39 employees and the five
family members. So, after backing them out, it was still
$3,415,147.
Q.
Okay. And can you please look at Government -- I
mean, Defense Exhibit C2? Can you please tell us what this is?
A.
Sure. This is also just a summary of activity which
occurred and was recorded in Exhibit 70 through 78. And, like
I mentioned before, not only was payroll an eligible expense,
but you could also use it to pay the state and local taxes of
the employees.
What Exhibit C2 represents are the total payments
that were made to Workforce Business Services. So Workforce
Business Services is a PEO entity. When Target would pay
payroll, they wouldn't pay the gross payroll to employees and
then a separate payment for state and taxes and a separate
payment for other items. It was one dollar amount lumped
together.
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So what this represents is that, during the covered
period, there were over $3.7 million in payments to that PEO.
We just talked about 3.5 million of that related to the gross
payroll. So what that means is, in addition to those amounts,
there was another $227,000 that was paid to Workforce Business
Solutions, which would represent items such as your state and
local taxes, retirement costs, as well as payments for the PEO
service.
So the difficulty with this, again, is because we
didn't have other documents in trial exhibits, I couldn't
calculate the exact amount of what portion of that 227
represents state and local taxes, but there are some additional
state and local taxes that would be eligible embedded in that
number.
Q.
And these -- and this number 227,205.53 would be a
forgivable amount?
A.
Not the entire amount. The portion within there
that's state and local taxes would be a forgivable amount.
Q.
Can you please look at C4?
A.
Did you mean to skip C3?
Q.
No. C3? Sorry about that.
A.
Sure.
THE DEFENDANT: C3?
MS. WAID: C3.
Q.
And can you tell us what this is, please?
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A.
Sure. C3 is a summary of the group health and life
insurance payments as taken from Exhibit 73 through 88 that
total $97,556 during the covered period. Similar to the state
and local taxes, there are some limitations with the health
insurance. So the forgivable portion is only the employer
portion. We're not able to, just based on the documents
submitted at trial, we're not able to separate those two. But,
also, a portion of that 97,556 would be forgivable.
Q.
Okay. And C4, please. What does this exhibit
represent?
A.
This exhibit represents the total rent payments that
were made during the covered payment -- or covered period. So
for the 24-week covered period, Target paid $123,130 in rent.
The CARES Act did specify that rent paid to related parties,
which this was, was only forgivable up to the extent that that
rent was used for mortgage interest by the related party. So
what you'll see on the bottom half of the schedule is actually
from Exhibit C6 at trial and what that outlines is the total
interest payments that were made by the related party during
the covered period of 56,498.
Q.
Which are potentially forgivable expenses?
A.
The 56,498 is a forgivable expense, yes.
Q.
Okay. Could you please go to C5?
A.
Yes.
Q.
What does this exhibit represent?
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A.
This represents lease payments. So rent payments on
officer, copier, and printer services. Again, a summary of
which came from trial Exhibit 70 through 88. The total of
which are $6,068.
Q.
And could you please go to C6? What does this
exhibit represent?
A.
C6 is another summary from Exhibits 70 through 88,
and it outlines all of the utilities payments that were paid
during the covered period totaling $37,739. Again, the
utilities payments do represent forgivable expenses.
Q.
Okay. And C7, please. What does this exhibit
represent?
A.
C7 represents a summary of all the payments that were
made on vehicle and equipment loans during the covered period
and they total $277,407. The CARES Act allowed the portion of
those loan payments, which was interest on the loan, to be
forgivable. I've only been able to quantify the first ten days
based on the documents submitted at trial. So, within the
first ten days of the covered period, there was $4,136 of
interest expense made -- paid that would be forgivable.
Q.
And C8, please.
A.
C8 is a summary of the materials and supplies costs
that were paid over the covered period. And the total of these
items are $3,359,121. These payments were required to be
essential to the operations and made pursuant to a contractor
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order in order to be forgivable. We haven't been provided with
the invoices underlying all these payments so I cannot quantify
any of these as forgivable, although, I think it's safe to
assume that roofing supplies would be essential to a roofing
business.
Q.
And, finally, C9, could you please look at that?
A.
Sure. C9, similar, this is just a summary of what is
called covered operations expenses that were paid during the
covered period that total 21,530. Dataforma, which is listed
on here, is the software program. It's a roofing software
that's utilized for the operations.
Q.
Okay, thank you.
I'm going to now show you what's been marked as
Exhibit No. -- or letter D and D1.
MS. WAID: Permission to approach, Your Honor?
THE COURT: You may.
MS. WAID: Thank you.
Q.
So you're looking at what's been marked Defense
Exhibit D. Can you please tell us what it is?
A.
Sure. Just like we talked about before, this is a
summary of Trial Exhibit C8, which set forth the total gross
payroll that was paid to Target Roofing employees throughout
the time period of January 2020 through October of 2020.
Q.
And did you make a payroll trend analysis based upon
Defense Exhibit C8?
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A.
Yes, I did. So what I did is I just separated the
amount of the payments that were made prior to the PPP period
and then the amount that were paid during the PPP period.
Q.
Okay. And is this a fair and accurate summary of
Trial Exhibit C8?
A.
Yes, it is.
MS. WAID: We'd like to move in Exhibit D, Your
Honor.
THE COURT: Any objections?
MR. REICHLING: No, Your Honor.
MS. WAID: And D1 as well, Your Honor, please.
THE COURT: Any objections?
MR. REICHLING: No, Your Honor.
THE COURT: D and D1 will be admitted.
(Defendant's Exhibit Numbers
D & D1 admitted into evidence.)
BY MS. WAID:
Q.
So, in your analysis, can you tell us what occurs
with the Target salaries in the weeks prior to the company
receiving the PPP loan?
A.
Yes. So, starting around February timeframe when
COVID really started to impact a lot of businesses, you'll see
that the gross payroll is declining at a pretty rapid rate.
So, in February of 2020, you're looking, in the beginning, at
about $130,000 in payroll per week. And, by the first week in
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April 2020, payroll had been cut down to approximately $80,000
per week.
Q.
Okay. And what occurs with the Target salaries once
the company actually receives the PPP money?
A.
Immediately after the company receives the PPP money,
the salaries are restored and actually start to jump above
where they were prior to receiving the PPP funds.
Q.
And is that consistent throughout the covered period?
A.
Yes, it is.
MS. WAID: Court's indulgence.
(Pause.)
MS. WAID: Nothing further, Your Honor.
THE COURT: All right. From the government?
MR. LEEMAN: Yes, Your Honor. Just to make sure I'm
not running afoul, would the Court allow me to do the
cross-examination? I ask because I had been prepared to do any
cross for this witness at trial. I feel a little better
prepared. I know Mr. Reichling has been the one not objecting
to things, but before I get up there and start asking
questions, I wanted to make sure.
THE COURT: Well, for the purpose of this witness,
I'll consider both of you fungible. So you may proceed.
CROSS-EXAMINATION ON BEHALF OF THE GOVERNMENT
BY MR. LEEMAN:
Q.
Good morning, ma'am.
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A.
Good morning.
Q.
So you sat here during trial?
A.
I did.
Q.
Every day?
A.
I think -- I believe every day except for the first
day.
Q.
Were you here for the testimony from the gentleman
from the Social Security Administration who looked at some
identification documents?
A.
Yes.
MS. WAID: Objection, Your Honor. Outside the scope.
THE COURT: Overruled so far. We'll see where it's
headed.
Q.
You were here for that?
A.
Correct; yes.
Q.
You understood his testimony to be that none of those
documents were authentic Social Security Administration cards;
is that right?
A.
Correct.
Q.
You were here for the testimony of Evelyn Portinari;
is that right?
A.
Yes.
Q.
And you were here for her testimony that she never
saw any of these 39 people Mr. Crowther had hired for a special
project to shred papers; is that right?
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MS. WAID: Objection, Your Honor. Outside the scope.
THE COURT: Overruled.
A.
I was here. I can't say that I can remember her
testimony to the extent that I can agree with exactly what she
said, but yes, along those lines, yes.
Q.
Okay. Well, you realize that the government
presented a case suggesting that the 39 individuals that were
hired by Mr. Crowther to "shred paper" didn't exist; is that
right?
A.
Yes, that's why I removed them from my analysis.
Q.
You removed them from your analysis because the
government proved that at trial; is that right?
A.
No, I removed them from my analysis because it's an
allegation and I wanted to present the most conservative
figures that I could.
Q.
Okay. You're aware that Mr. Crowther is now a
six-time convicted felon; is that right?
MS. WAID: Objection, Your Honor. Irrelevant.
THE COURT: Overruled.
Q.
Is that right?
A.
Yes.
Q.
You're aware that two of his felonies relate to the
creation of documents from whole cloth to trick a bank into
committing loans; you realize that?
A.
Are you asking me for a response?
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Q.
I'm asking you did you realize that two of his
convictions relate to creating bank documents out of whole
cloth in order to trick a financial institution into giving a
loan?
A.
I don't understand what you're asking me.
Q.
Ma'am, did you understand that Casey Crowther cut and
pasted false balances on a bank statement, sent them to a
mortgage broker and lender to convince them to give him a loan
that he otherwise wouldn't get?
A.
I was here for trial so, yes, I understand the
allegations and what occurred.
Q.
How much have you been paid for your testimony,
ma'am, so far?
A.
I don't recall. I think it's around $40,000.
Q.
$40,000 to date?
A.
Yes.
Q.
Have you earned any other money by being associated
with this case or is it just the approximately $40,000?
A.
How would I earn other money?
Q.
Well, I said testimony, ma'am, so I didn't know if
you did other types of work for the case in which you might
have earned money. Counseling, advising work, for instance.
A.
So the $40,000 was in totality.
Q.
The total amount?
A.
Yes.
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Q.
Okay. So the numbers on your various exhibits that
have been introduced today, where did those come from?
A.
The payroll reports of Target Roofing and the banking
records of Target Roofing.
Q.
Okay. So you took -- part of your analysis is based
on records that were provided to you by Target Roofing; is that
right?
A.
They were records that came out of the trial
exhibits.
Q.
And some of those records are from Target Roofing or
you just didn't check?
A.
They would be Target Roofing's business records, yes,
and banking records.
Q.
Target Roofing's business records. Target Roofing's
business records also included records that 39 people were
hired to shred paper, didn't they?
A.
Assumingly so, yes.
Q.
Okay. Let's talk about your calculations here.
How much in total do you claim Target Roofing spent
on forgivable expenses during the time period? What is it?
Roughly. You don't have to look back to the number. What are
we talking roughly here?
A.
I think it was about 3.5 million that I was able to
quantify.
Q.
Okay. So you found $3.5 million that's forgivable
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expenses; is that right? Roughly?
A.
That I was able to quantify with the documents.
Q.
So might even be more; right?
A.
Correct.
Q.
Okay. But the loan was $2.1 million; right?
A.
Yes.
Q.
Okay. So let's talk about the loan and what
Mr. Crowther did with the loan.
Mr. Crowther used the loan to buy a boat; right?
MS. WAID: Objection. Outside the scope, Your Honor,
of her testimony. She's a summary witness, Your Honor.
THE COURT: Sustained.
MR. LEEMAN: May I make a proffer for the record,
Your Honor?
THE COURT: You may.
MR. LEEMAN: What the government intends to do here,
Your Honor, is, as it relates to the use of the actual loan, is
what Mr.-- we've charged intent to defraud the bank and part of
that scheme is to use that loan to personally enrich himself.
To the extent we're talking about things that were
done with not loan money, I think it's relevant to show what he
did with loan money so that we can argue what the actual or
intended loss was at the time.
THE COURT: It's my view that that information is set
forth in the presentence report and has not been objected to.
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Do you see that differently? I mean, there's paragraphs that I
remember in the presentence report that talk about money going
to the boat on a certain date, money going to pay off the
promissory note on a certain date, money going into an account,
I mean, you know, I think I had that.
MR. LEEMAN: Yes, Your Honor, I think with one
exception, if the Court would indulge me and would want to
strike it after, I believe there's one sum of money that is not
in the presentence report that I do think is relevant.
THE COURT: Go ahead.
BY MR. LEEMAN:
Q.
On May 7th -- you've reviewed Mr. Crowther's
accounts, including all the discovery that's been provided by
the government to Mr. Crowther in this case; is that right?
A.
I'm not sure I reviewed it all in detail,
particularly for today, but, at some point, I've seen it, yes.
Q.
Okay. At some point, you've seen what's been
referred to as the PPP account, an account that was set up and
held only the loan proceeds of the PPP fund?
A.
Yes.
Q.
Okay. You've also reviewed his company's operating
account for some period relevant to the indictment?
A.
Yes.
Q.
Okay. You remember that on May 7th, $800,000 was
transferred from the PPP account to the operating account?
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MS. WAID: Again, Your Honor, objection. Outside the
scope of her testimony. She summarized trial exhibits.
THE COURT: Overruled. If she knows from the
exhibits, she can testify.
A.
There was a transfer, yes.
Q.
Of $800,000?
A.
Yes.
Q.
And then that $800,000 in the operating account on
the same day was used to pay off a line of credit; is that
right? That was owed to Sanibel Captiva Bank?
A.
I'm not sure you can say it's the same money. Cash
is fungible.
Q.
Fair enough. Fair enough. $800,000 of PPP funds was
transferred into the operating account that day; is that right?
May 7th?
A.
Again, I'm not sure I agree with your classification
of what's PPP funds and what's other funds because cash is
fungible.
Q.
Money from the account that held the proceeds of the
loan that was funded by the proceeds of the PPP loan, $800,000
of it was transferred to the operating account on May 7th;
correct?
A.
There was a transfer of $800,000 on May 7th from one
account, one business account to another business account.
Q.
Understood.
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A.
Correct.
Q.
And then $800,000, that same day, was used from the
operating account to pay off an existing line of credit with
Sanibel Captiva Bank; is that right?
A.
You would have to show me documents at this point. I
don't remember all these transactions.
Q.
Oh. Well, you remembered before, but now you're
saying you don't remember?
A.
I remember the one transfer because it was the major
point of your trial. I can't remember every transaction that
occurred thereafter.
Q.
So you were hired and paid $40,000 to help as a
forensic accountant in this case, but you don't remember an
$800,000 transfer involving potentially contested PPP funds;
that's your testimony here today?
A.
I can't remember. If you'd like to give me the
statements, I can look at them.
Q.
Okay.
MR. LEEMAN: Would the Court give me a moment?
THE COURT: Yes.
(Pause.)
MR. LEEMAN: Okay, Your Honor, thank you for the
time. And I don't have any further questions.
THE COURT: Any redirect?
MS. WAID: Nothing, Your Honor.
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THE COURT: Okay. You may stand down. Thank you.
(Witness is excused at 11:22 a.m.)
THE COURT: Ms. Waid, any additional testimony with
regard to the amount of loss issue?
MS. WAID: Briefly, Your Honor.
Again, I know that the probation sees this as an
intended loss, but I think that the fact that this continues to
be a performing loan is a critical aspect of this analysis. I
also think that Ms. Hollobaugh's testimony --
THE COURT: I'm sorry. Before argument, any
additional witnesses?
MS. WAID: Oh, no, Your Honor. I'm sorry, I didn't
hear you.
THE COURT: No, all right. Go ahead.
MS. WAID: Sorry.
I would also say that Ms. Hollobaugh's testimony
today was actually very important towards intent because it
showed that, one, money is fungible. And, two, that before the
PPP loan, Target Roofing was having to reduce salaries and
reduce employees. And, once the PPP loan came in, those
salaries increased, and that was maintained throughout the
covered period. The intent was to pay the employees and
Mr. Crowther, in fact, paid his employees.
He also, again, as we stated earlier and, you know,
not to break the point, Your Honor, but there is no evidence
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that he didn't intend to pay off Sanibel Captiva Bank. He's
been working extremely closely with Sanibel Captiva Bank. He's
paid off the line of credit already. He's paid off the
mortgage to Target Building. He's working to pay off the PPP
loan. He talks with them almost daily. He has spoken with
them almost daily since the inception of this case and since,
in fact, getting the PPP loan back in April. So I don't see
any evidence whatsoever that there was any intent not to pay.
And, again, as the Court knows, it's a subjective intent
pursuant to the guidelines.
Thank you.
THE COURT: One question: Your reference to the fact
that the defendant has paid off the Sanibel Captiva Bank line
of credit, is that the $800,000 that Mr. Leeman was referring
to in his examination?
MS. WAID: That's a great question. It was -- so
there was -- I believe he was speaking about a $800,000. I
believe, when it was paid off, there is an exhibit that we were
going to show later that I can look to actually get out the
exact amount of what was paid --
THE COURT: Sure.
MS. WAID: -- off.
THE COURT: If you have it handy.
MS. WAID: Sure.
(Pause.)
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MS. WAID: So the $800,000, Your Honor, yes, that was
the credit line. That was paid off. It was actually then
extended again during the past year because Target Roofing took
a hit for a variety of reasons when -- being this trial to
being the pandemic and the shortage of supplies, but we would
proffer Defense Exhibit F, which is the HUD statement for 8790
Loredo LLC. And, once that building was paid off, was actually
sold by Loredo, one of Mr. Crowther's company, he paid off the
entire line of credit and the mortgage to Sanibel in order to
minimize their risk as a bank in order to, you know, preserve
that relationship.
THE COURT: I'm sorry. Tell me, again, what your
proposed Exhibit F is.
MS. WAID: It is a HUD statement. So Mr. Crowther
actually sold the new building that Target Roofing had recently
constructed in order to pay back that line of credit and
minimize the risk to Sanibel Captiva Community Bank.
THE COURT: And is that something you're moving into
evidence?
MS. WAID: We will be, yes, Your Honor. It really
went more to his personal expenses and things of that nature
within the PSR, but we can move it in now, if the Court would
allow it.
THE COURT: Well, I don't mean to interrupt your flow
of things, but any objections to F?
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MR. LEEMAN: No, Your Honor.
THE COURT: All right. The Court will go ahead and
admit Exhibit F.
(Defendant's Exhibit Number
F admitted into evidence.)
THE COURT: Getting back to the amount of loss, any
additional argument?
MS. WAID: No, Your Honor.
THE COURT: From the government, any argument you
care to make?
MR. LEEMAN: Yes, Your Honor. Thank you.
So, again, starting where Mr. Reichling left off and
also noting that no one here is moving under a government
benefits analysis, Your Honor, Mr. Crowther applied for a loan
that he was not entitled to. The bank testified quite clearly
under oath that, had it known what Mr. Crowther had intended to
do with the money, specifically the boat, it would not have
provided him the loan. He got approximately $2.1 million
because of that loan. Now, the threshold here to get to a
level 16 is $1.5 million. So we're well over that with just
the amount of loan.
What it sounds like the defense would like to do is
earn some credits against that loss by doing appropriate things
with the money because, again, the Court, under 2B1.1, is to
take the larger of the actual or the intended loss. If the
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actual $2.1 million has gone out the door and really there's
$30,000 only so far been repaid, which happened after
Mr. Crowther was charged, that's the actual loss here, Your
Honor. That's what was parted with because of the fraud and so
we believe that results in the level 16.
Now, just sort of humoring some of the arguments made
by Ms. Waid for a moment, there's no question that Mr. Crowther
used PPP proceeds directly to buy $670,000 plus dollar boat.
There's also no question that he used $100,000 directly to pay
Steven Adkins on a promissory note that was improper. We also
have this $800,000 payment on a preexisting debt principal,
which was improper. You add those three things up, Your Honor,
we're already over $1.5 million improperly, directly spent PPP
money. So that's another way of getting there, another way of
thinking about this.
There's this -- been this constant conflation of the
idea that Mr. Crowther, because he was paying his employees,
was doing everything he should have. No. In fact, you weren't
supposed to get a PPP loan unless you needed it. If he was
able to do everything he wanted to do in buying a boat, paying
off $800,000 worth of credit with a PPP fund and still pay his
employees, he should have never got the loan. Should have
never got the loan.
So, our argument, Your Honor, is this $2.1 million,
it sets the loss amount. You can think about it any other
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number of ways. You can just add up the boat, the $800,000
payoff of the line of credit, and the $100,000 Mr. Adkins, you
still get above $1.5 million in directly spent, improper PPP
money resulting in the same enhancement.
As it relates to sort of credits against the loss --
I know I'm not going to spend a lot of time on this. This is,
I think, fairly well understood in white collar cases. If you
do pay back things, you get credit for them before anyone knows
you committed a crime. That's the way this works. But
Mr. Crowther made no payments on this loan before he was
charged or before he learned he was being investigated. In
fact, Mr. Crowther -- we just heard Mr. Crowther's been paying
off large mortgages, large mortgages right now on his Laredo
property, but not paying off the debt due in this case. And I
find that really illuminating, Your Honor, because, at the end
of the day, guess who's on the hook if Mr. Crowther never pays
in this case? The taxpayer; right? So Mr. Crowther wants to
come up here and say oh, I intend to pay it back, I've always
intended to pay it back, I'll do -- you know, there's no proof
I didn't want to pay it back, yet, here he is paying off his
other loans, which aren't backed by the American taxpayer, and
coming in here and saying there's no loss yet. I think that
really illuminates what Mr. Crowther's true intent is.
I also would note, Your Honor, the idea that he
always intended to pay this back and never cause anybody a loss
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is completely contradicted by the 39 fake employees he hired.
He wasn't going to pay anybody back. He was going to waltz off
into the sunset. The whole thing was going to be forgiven and
nobody knew the better. And Mr. Crowther's got a, you know,
40-foot catamaran, got a happy ex-business partner, and we know
what he was doing with the checks for the fake employees until
he got caught. He cashed one of them; right? Cashed one of
them. The rest of them were going to be cashed, too. I think
that's a fair inference.
So the $2,098,700 we believe, Your Honor, is the
appropriate loss amount and the 16-level enhancement is
appropriate in this case.
THE COURT: Let me ask you one thing about the May
7th 800,000 transfer to the operating account. I don't recall
it being mentioned in the presentence report. Did I miss it or
was it not mentioned?
MR. LEEMAN: It's not mentioned in the presentence
report, Your Honor. It is something we discussed at length and
I have the trial exhibit numbers here ready. I also have them
marked as sentencing exhibits, if the Court would like me to
admit both of those, but it is something Ms. Knott talked about
at length, this $800,000 movement into the operating account
and then the almost immediate payment -- well, the same day
payment of $800,000 of the letter of credit.
THE COURT: I'd like to see those records --
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MR. LEEMAN: Yes, Your Honor.
THE COURT: -- since it's not referred to in the
presentence report.
(Pause.)
MR. LEEMAN: Your Honor, sentencing exhibits
government would introduce 22 and 23 at this time. They were
both trial exhibits as well. The trial exhibit for 22 was 158
and the trial exhibit for 23 was 153. And, if I may approach,
I'll hand them to the courtroom deputy.
THE COURT: Do I have copies in here?
MR. LEEMAN: Oh. You do, Your Honor. Yes, you do.
(Pause.)
MR. LEEMAN: And, to orient the Court, Your Honor,
Exhibit 22 is self-explanatory. It's a single page. Exhibit
No. 23, I think I could speed the Court up by pointing you to
page 30.
THE COURT: First of all, Ms. Waid, any objection to
the receipt of Government's Exhibits 22 and 23?
MS. WAID: No, Your Honor.
THE COURT: All right. Those two exhibits will be
admitted for sentencing purposes.
(Government's Exhibit Numbers
22 & 23 admitted into evidence.)
MS. WAID: Your Honor, could we post them?
THE COURT: Sure.
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MS. WAID: I'm just not getting internet access at
the moment.
(Pause.)
THE COURT: And, Mr. Leeman, if I can ask, with
regard to Exhibit 22, which is now on the overhead projection,
I don't literally see anything relating to $800,000. Is that a
component of the $1.1 million and change transfer?
MR. LEEMAN: It is, Your Honor, it is.
So Government's Exhibit No. 22 is a complete listing.
It's a summary exhibit that was created by Diane Knott from
underlying other admissible evidence at trial showing the
inflows and outflows -- all of the inflows and outflows from
the PPP account of Target Roofing.
THE COURT: So is it more precise to say that, on May
the 7th, there was, in general terms, a $1.179 million transfer
to the operating account and then, on the same date, an
$800,000 transfer to a line of credit?
MR. LEEMAN: Yes, Your Honor. Imprecisely, I was
referring -- yes, what the government was referring to is an
$800,000 transfer used to make an $800,000, but it actually was
a slight -- approximately $300,000 more transferred and then
$800,000 used directly to pay off the line of credit.
THE COURT: And there were a number of other payments
on May 7th to other things that look to be expenses and various
items.
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MR. LEEMAN: Yes, that's correct, Your Honor, but if
you look at the closing balance from May 6th, there was
$200,000 in the account. So he --
THE COURT: I see. I gotcha.
MR. LEEMAN: So, in order to make the line of credit
payment, that 800 -- that PPP loan deposit needed to be paid.
Or at least that's the government's theory.
THE COURT: Okay. I understand that. Thank you.
MR. LEEMAN: And, Your Honor, if you have no further
questions, I'm without further argument on the point.
THE COURT: Let me just see here.
(Pause.)
THE COURT: No, I think I'm good. Thank you.
MR. LEEMAN: Thank you, Your Honor.
MS. WAID: Your Honor, may I clarify a few things?
THE COURT: Yes.
MS. WAID: So there are a couple of things that we
just wanted to make sure the Court knew.
One is that the trial testimony of Stephen Miller was
that there was no requirement for a segregation of funds and,
in fact, that money was, in fact, fungible. So, although there
were two separate bank accounts, that was not a requirement and
they were all considered corporate funds.
Prior to 5/7, Target Roofing had been paying
allowable expenses pursuant to the charts that you have as
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Exhibit C for those months. So those allowable expenses would
have had to have been reimbursed regardless.
Third, the trial testimony of Kristen Dilorio was
that, although they put it in a separate account originally,
they decided to actually put all that money into the operating
account because it was easier to actually pay the payroll
instead of switching payroll to the new account. So those
funds were commingled and the reality is is that there were
many more funds coming in via the bank records at trial that
were actually accounts receivable, working capital, all things
that a business would be utilizing anyways and, but for the
fact of that segregated PPP account, we probably wouldn't be
here, even though that was not a requirement. So all those
expenses were being paid prior and really just needed to be
repaid at that point in time.
We would also just let Your Honor know that the
credit line was cross-collateralized on the Laredo property.
So it really wasn't a question of, you know, what was going to
be paid off or who's going to be paid off. I think we can all
agree that, you know, the victim should have a word in where
payments are made or not made, but that LLC was actually a
cross-collateralization so that, when that building was sold,
that's why that line of credit was paid off instead of the PPP
loan.
Court's indulgence.
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(Pause.)
MS. WAID: We just wanted to clarify that for the
Court. Thank you, Your Honor.
THE COURT: All right, thank you.
The next paragraph to which I understand there
remains objections is paragraph 77, which is a two-level
enhancement for sophisticated means.
Counsel, do you care to be heard and/or present
testimony?
MR. REICHLING: Your Honor, the government does not
intend to present testimony, but we would be intending to at
least proffer exhibits to Your Honor that were admitted at
trial and just, you know, make argument to Your Honor in
reference to the testimony and/or evidence that was presented
at trial.
THE COURT: All right, that would be fine.
Ms. Waid, do you want to proceed first since it's
your objection?
MS. WAID: Yes, Your Honor.
For purpose of sophisticated means, Your Honor, we
just don't believe that this actually falls within the
definition. As the Court knows, sophisticated means means
especially complex or essentially intricate offense conduct
pertaining to the execution or concealment of an offense.
What the government and probation are actually
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stating is -- was never an offense. The offense that the
defendant was charged with in the superseding indictment is
making a false statement on the loan application and utilizing
those loan proceeds to purchase a boat and make a promissory
note payment. Yet, the conduct that they're assessing is a
sophisticated means occurred months after the initial
application, had nothing to do whatsoever with the loan
application or the bailing or the payment of loan proceeds to
Target Roofing and had no bearing on the execution or
concealment of the offense that was actually charged within the
superseding indictment. In fact, because Target Roofing
actually never applied for forgiveness, the conduct is
completely irrelevant to the offense conduct whatsoever.
It's -- you know, I think they're maybe trying to say it's some
type of pre-crime, but how can you have a sophisticated means
on the execution of an offense when the crime actually never,
in fact, occurred? And, for those reasons, we believe this
enhancement just simply doesn't apply and it's overreaching.
THE COURT: All right, thank you.
From the government?
MR. REICHLING: Yes, Your Honor. I just wanted to
get the appropriate trial exhibit number for these two exhibits
so, for the record, I can state they've been previously
admitted at trial.
THE COURT: Sure.
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MS. WAID: Your Honor, may I ask, is there an
objection -- I'm not exactly sure why we need exhibits. Was
there an objection to the PSR on behalf of the government that
we are needing additional exhibits for or -- the majority of
the information is within the PSR.
THE COURT: I don't know how to answer your question.
I don't know what the exhibit is other than --
MR. REICHLING: Your Honor --
THE COURT: -- apparently a copy of the trial exhibit
is what my understanding is.
MR. REICHLING: That's correct, Your Honor. The
government is in support of the sophisticated means enhancement
and would refer to two particular exhibits admitted at trial,
which were the Workforce Business Services new employment
enrollment packets that had been submitted to them to add
individuals to the payroll, which were also submitted to Evelyn
Portinari, the head of human resources. Additionally, the
government would refer to the exhibit which contained the
copies of the Social Security cards and lawful permanent
resident cards that had also been submitted to Evelyn Portinari
by the defendant to add individuals to the payroll. And the
government is seeking to at least highlight these particular
exhibits to show the intricate, sophisticated nature of the
defendant's scheme to defraud, which, although the indictment,
speaking indictment itself does not refer to the addition of 39
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employees, it does refer to a scheme to defraud. And the
government's position on these 39 employees has always been
that the addition of these employees was a scheme to defraud or
a part of the scheme to defraud the lender in this case. And
the government can certainly at least refer to the trial
exhibits and/or trial testimony from two witnesses in
particular, at least the government would like to highlight in
support of the sophisticated means enhancement. And I could
just proceed, Your Honor, now, of course, and get to the point
pretty much. I'm sure that's what you want me to do. So let
me get to it.
The testimony at trial was that -- from John Miller,
was that, at the time the Paycheck Protection Program began,
borrowers had an eight-week period of time in which they must
use the Paycheck Protection funds towards allotted expenses.
They had to use it towards payroll, rent, utilities, and
mortgage interest.
After that eight-week period was over, a borrower
would submit proof of payroll and other expenses to his lender
to apply for forgiveness. Of course, the biggest draw to this
loan not only being that it was a 1 percent loan, but that it
was a forgivable loan, was certainly reasons why they had these
particular eight-week, you know, eight-week payroll things and
such.
So during the course of the -- after the defendant
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received the PPP funds on April 14, 2020, of course, we know
that those funds were never used towards payroll. In early
May, as Mr. DeCicco testified, Mr. DeCicco sent the defendant
new guidance from the SBA indicating that the SBA was also
going to take their own look and audit at PPP loans of $2
million or more to determine whether the borrower really needed
the loan or not. So based on after receiving this particular
email from Mr. DeCicco, which Mr. Crowther acknowledged and
responded to, all of a sudden, individual -- there was a high
influx of hiring of people to Mr. Crowther's payroll.
Now, all of these individuals, which included five
family members and 39 individuals that were hired to shred
paper, as evidenced from the trial testimony of Evelyn
Portinari and others, were all fired on June 5, 2020. That is
significant and important and is pertinent to the scheme to
defraud because, during the course of these individuals'
employment -- and I'm making quote motions for the record --
the Paycheck Protection Program was changed with the passing of
the Paycheck Protection Flexibility Act, which John Miller
testified to. That change in the Paycheck Protection Program
was that, instead of using the money within eight weeks, you
had to use the money -- you had up to 24 weeks to use the money
and you didn't have to use 75 percent of the money on payroll,
but you could use 60 percent of the money on payroll. That was
signed into law on June 5, 2020, the same date that 39
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individuals were fired that were the 39 paper shredders that
were hired with the use of fake Social Security cards, fake
lawful permanent resident cards, and applications submitted for
hiring by Target Roofing to make it appear that these
individuals were actually employees of Target Roofing. They
all were issued paychecks for two- to three-week period of
time. The defendant parted with over $100,000 that never went
claimed in paychecks that were issued to these 39 people. This
was all done as a means to ensure that the defendant would get
forgiveness of this $2.1 million loan because he had to bump up
his payroll numbers to ensure that, within that eight-week
period of time, he could prove that I spent 75 percent on
payroll. That is supported by the trial record because of the
firing of these individuals all on June 5th, which is the same
day the change in the law happened, and the government believes
that these intricate means in which the defendant took to add
people to the payroll had an unwitting participant in
Ms. Portinari. Submitted to her applications that were
purported to be filled out by these people, submitted I9
documents showing that they were eligible to work in the United
States, Social Security cards, and lawful permanent resident
cards all to Ms. Portinari to add these individuals to the
payroll to make it appear as if they really worked at Target
Roofing. It wasn't as simple as just saying hey, payroll
company, can you just simply add these people to the payroll?
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This was a great -- the defendant went to a great length and
extent to add these people to the payroll to make it appear as
if they were really employed by Target Roofing. Of course, the
government believes that, based on the evidence provided at
trial, these individuals never worked there. They were never
seen by Ms. Portinari and none of them cashed their checks
except one check was cashed and deposited into the defendant's
account.
So that's why the government believes the
sophisticated means enhancement applies because, a part of the
scheme to defraud, the defendant created these fake employee
files and documents to correspond with the hiring of these
individuals as if they really worked for the company in
furtherance of ensuring forgiveness up until, of course, the
point in time that the PPP program changed from the eight weeks
to 24 weeks.
THE COURT: The guideline requires the conduct to
be -- I think the word is extraordinary. Did you find any
cases where creating false employees constituted extraordinary
conduct?
MR. REICHLING: Well, there has been case law that,
of course, has stated that, you know, the creation of false
documents in furtherance of a fraud is considered sophisticated
means. Of course, those courts have also, you know, considered
other steps the defendant has taken in furtherance of the
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scheme to defraud, but they have found, you know, the creation
of fake or fraudulent documents. I'm not saying they're in the
sense of employment documents, but, for instance, there's a
case in which I believe someone created fake documents in
furtherance of a check kiting scheme so that they could cash
the checks written to these individuals and utilized fake
identification documents in furtherance of a bank fraud scheme
in a check kiting scheme, which it pretty much was, to further
the scheme, and the Court found that the creation of these
identification documents in furtherance of that scheme to
defraud the bank, you know, make it seem as if these people
were real or that these were their paychecks, the Court has
found that that does qualify for sophisticated means, Judge.
THE COURT: Am I correct that, at the point in time
when this conduct took place, the defendant had already been
approved for the loan and had got the money?
MR. REICHLING: You are correct, Judge. That is
true. He received -- he had been approved and issued the funds
on April 14th. The addition of family members began on May
6th. And the hiring of the 39 fake employees, which the
government believes qualifies as being sophisticated, happened
on May 15th and May 22nd. But the government believes that
this was in furtherance of the scheme to defraud. But for the
change in the Paycheck Protection Program, the defendant would
have likely applied for forgiveness and utilized these payroll
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numbers to get forgiveness of the loan, which, as I've said and
the government has said, was really the draw to the Paycheck
Protection Program loan, was that it's eligible for
forgiveness. So yes, you are correct, though, Your Honor.
THE COURT: And am I also correct that your argument
is based on the 39 employees; you're not saying it's
sophisticated to hire your family members?
MR. REICHLING: I would say that the level in which
the employees -- excuse me, the family members were added was
not sophisticated because there was no need to, you know,
manufacture documents or add them in the sense of, you know,
creating fake documents to get them hired. They were hired
through the normal hiring process, I imagine. Even though they
were never seen at Target Roofing, their applications and
informations were submitted to the HR director by the defendant
or through a family member. But I believe that the 39
employees, though, given the level of sophistication in the
creation of these documents and identities for these
individuals and then issuing paychecks to them for this
particular period of time does display a sophisticated means,
Judge.
THE COURT: Thank you.
MR. REICHLING: Thanks.
THE COURT: Ms. Waid, any response to that particular
issue?
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MS. WAID: Yes, Your Honor.
We would just proffer to the Court I still just don't
understand where the offense is. The government is saying that
this was actually a scheme of this long scheme to defraud, but
again, this actually occurred months after he received the
loan. If he had applied for forgiveness, then I could see
their point, but there has been no application for forgiveness
whatsoever. And, in fact, those employees were paid by Target.
Target lost that money. There's no offense here for there to
be sophisticated means to execute. And, you know, again, we
would argue, in addition to that, that what the government is
saying kind of appears not to be accurate if you look at
Government -- I mean, Defense Exhibit D1 of the payroll
analysis, after the June 5th date, the actual payroll seems to
steadily increase. So it doesn't really appear that what the
government is arguing, one, ever came to fruition, and two, is
accurate pursuant to the payroll expended by Target Roofing.
Thanks.
THE COURT: All right. Why don't you stay there and
pick up with the next objection, which is paragraph 78, the
means of identification enhancement.
MS. WAID: Okay. So we objected to the means of
identification because it just does not fit the definition of
means of identification pursuant to the sentencing guidelines.
The entire purpose of means of identification was for
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aggravated identity theft and that's not at all, from what I
can hear, the government is actually allocuting or that
probation has actually stated.
Effective November 1, 2009, the Sentencing Commission
amended the commentary to expand the definition of victim in
cases involving aggravated identity theft. The definition
requires that means of identification shall be an actual, not a
fictitious individual, and the government's entire argument is
that these were fake employees. That's their whole theory
concerning the 39 employees, not that they were real employees,
so I don't see how this could possibly fit within the
definition whatsoever and it appears to be kind of an overreach
and a stretch of what -- of the purpose of that sentencing
enhancement that does not apply to the facts of this case.
It's also a dangerous slope to go on -- down if we're
talking about certain industries in Southwest Florida where,
you know, sometimes undocumented people who are responsible for
providing information may provide some type of identification
that may or may not be accurate, but the employee does that as
well. But, in this one, it's just a simple, straightforward it
doesn't fit within the definition. The government says they're
fake employees, not real people, and the whole point of this
enhancement was for real people in aggravated identity theft.
THE COURT: All right, thank you.
MS. WAID: Thank you.
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THE COURT: Mr. Reichling.
MR. REICHLING: Thank you, Your Honor.
The defendant is correct in the sense that the
government produced evidence that the people didn't work there
and that the cards themself were fake cards, but the government
never stated that these numbers themselves weren't real Social
Security numbers and the government's belief and can proffer,
and I've got a certified document from the Social Security
Administration that is one of my -- the Government's Exhibits,
which I would intend to introduce under Government's Exhibit 13
for the purpose of sentencing, which states that 19 of the 39
Social Security numbers that were contained on those 39 Social
Security cards are assigned to real individuals. And 18 U.S.C.
Section 1028(d)(7), which defines a means of identification,
states that a Social Security number is a means of
identification. So it's the government's position that 19 of
these 39 Social Security numbers contained on these fake Social
Security cards are real Social Security numbers belonging to
real people. They just don't belong to the people stated on
the Social Security card and name.
So the government does believe that the defendant --
the offense did involve the possession of five or more means of
identification that were unlawfully produced or obtained
regardless of the number of individuals whose name or other
identifying information, the means of identification were so
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produced or so obtained.
The means of identification are the Social Security
numbers which were used in furtherance of this scheme to
defraud, which involved the hiring of these 39 people.
Nineteen of them were real numbers. They have real
implications on the 19 individuals whose numbers they really
were. There were payroll documents generated, tax documents,
more than likely, under these Social Security numbers for
payroll paid to these individuals. So it's the government's
position that this did involve five or more means of
identification; a Social Security number is a means of
identification; nineteen of the 39 are real Social Security
numbers. So, for that reason, Judge, we do believe that
enhancement applies.
I would move to enter into evidence the exhibit I
referenced, which is Government's Exhibit 13, if it pleases the
Court.
THE COURT: Any objection to Government's 13?
MS. WAID: No objection, Your Honor.
THE COURT: Government's 13 will be admitted.
(Government's Exhibit Number
13 admitted into evidence.)
MR. REICHLING: And Your Honor should have it up
there in your copy.
THE COURT: Let me just take a look. See if I can
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find it.
(Pause.)
MR. REICHLING: And I also -- just for the record,
Your Honor, I also believe the government's witness, Lee
Lefkowitz with the Social Security Administration, also
testified to the fact that some of these numbers were assigned
to real people.
THE COURT: So let me see if I understand what your
theory is. Are you saying that Mr. Crowther had 39 people
lined up which were going to be employees?
MR. REICHLING: No, Judge.
THE COURT: That there was 39, or even 19, warm
bodies?
MR. REICHLING: No, no. The government believes
there's sufficient evidence that was offered at trial that
shows that none of these people worked there. They were never
really working there because none of them cashed or deposited
their paychecks.
THE COURT: None of them even existed.
MR. REICHLING: Correct, Your Honor.
THE COURT: According to your theory, I mean, I
think.
MR. REICHLING: That is my theory, Judge, but that
doesn't excuse somebody from utilizing means of identification
in furtherance of their scheme to defraud. Even -- you know,
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even if these particular cards did not belong to the people
that the Social Security card was assigned to, the defendant
set in motion adding individuals to a payroll which have
complications or issues with regards to the Social Security
numbers that those -- the real individuals assigned to those
Social Security numbers when you, you know, issue paychecks and
W2s and W4s and things of that nature.
So it's the government's belief that, while these
individuals weren't -- did not work for Target Roofing, the
means of identifications utilized belong to other individuals
and, therefore, this enhancement should apply.
THE COURT: So just because whoever made up these
cards got -- and made up the numbers, presumably, got 19 out of
39 hit as real people, that makes it fall within the
adjustment?
MR. REICHLING: I mean, Your Honor, that's entirely
what the government wants to punish, right, is the use of fake
Social Security cards with Social Security numbers on there
which, you know, are assigned to other individuals and adding
them to some, you know, to a payroll.
THE COURT: But that's not what the provision
provides in terms of the case law is pretty clear that it has
to be real individuals. There has to be someone there using
the false document. Here, your theory was just the opposite,
that no one was there and that it was Mr. Crowther using 39
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false documents.
MR. REICHLING: That is factually accurate, Your
Honor, but, like the government has said, the 19 of the 39
numbers were real numbers assigned to real individuals. Even
though they weren't the same individuals, this conduct has
implications to these, you know, individuals whose numbers were
really used or offered for payroll reasons. So, yes, the
government does still believe the enhancement would apply.
Another fact to add, Judge, as my co-counsel pointed
out, was that Mr. Crowther was the individual who received
these paychecks from Evelyn Portinari once they were issued and
there was evidence at trial that one of the paychecks that was
issued to an Augustine Castillo under one of these, you know,
fake Social Security cards was cashed and deposited into the
defendant's personal account. So the government does believe
that this use of fraudulent means of identification was in
furtherance of the scheme to defraud.
THE COURT: Yeah. Anything else as to this
particular issue from the defense?
MS. WAID: No, Your Honor.
THE COURT: All right. I think the final enhancement
or guideline objection relates to obstruction of justice. So
you may proceed with regard to that.
MR. LEEMAN: Thank you, Your Honor.
Your Honor, I would ask to introduce Government's
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Exhibit No. 14, which is the underlying letter that was sent to
the government which forms the basis of this that the -- that
this letter exists, I think, is uncontested between the parties
and I think it will be helpful for the Court to look, so I'd
ask to enter Exhibit No. 14 at this time.
THE COURT: Any objection?
MS. WAID: No objection.
THE COURT: Government's Exhibit 14 will be admitted.
(Government's Exhibit Number
14 admitted into evidence.)
MR. LEEMAN: Thank you, Your Honor.
I'll start with the law, Your Honor. 3C1.1, the very
first comment says, "The adjustment applies if the defendant's
obstructive conduct occurred with respect to the investigation,
prosecution, sentencing of the defendant's instant offense of
conviction." Clearly, here, I think this relates to the
prosecution of the offense, and I'll get into the facts here in
a second.
Also, one of the -- the 3C1.1 provides sort of a list
of examples that usually qualify for obstructive conduct and
then examples of things that don't usually qualify as
obstructive conduct. Those are found in comments four and five
of the rule. I think what the government's really going to be
hinging its argument on here is the example of when it does
qualify as obstructive conduct found in comment 4G, which is
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providing materially false statement to a law enforcement
officer that significantly obstructed or impeded the
investigation or prosecution of the offense.
And so, if Exhibit No. 14 has been admitted, Your
Honor, I want to ask the Court -- and I'm going to read into
the record a paragraph that was included in this letter sort of
setting the stage, Your Honor. This letter is sent on
September 21, 2020, by Ms. Waid to the government and it is
pre-indictment. It is post-complaint, but it is pre-indictment
and so things are moving quickly. A charge -- well, a formal
charge in an indictment has not been levied yet and so this is
a letter in which not only certain documents were provided to
the government as a response to a subpoena, but also, sort of
unsolicited, Ms. Waid lays out the position of Mr. Crowther
very specifically as to his thoughts about whether a fraud had
been committed or not. At this time, the mortgage fraud hadn't
been discovered so this is all related to the PPP fraud related
counts.
And I would ask the Court to turn to page 4 of 10 of
the letter. And I'm just going to begin reading on the very
first line. And this is on April 10, 2020.
Kristen Dilorio, the vice president and office
manager at Sanibel Captiva sent Mr. Crowther an email with
information about the process for depositing PPP funds.
Mr. Crowther responded to the email that same day and requested
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that Sanibel Captiva deposit the PPP funds into the company's
operating account. This email is incorporated as attachment D.
Sanibel Captiva, unilaterally and without the
specific direction from Mr. Crowther, established that the PPP
account -- established the PPP account and deposited the funds
into the account instead of the general operating account, as
requested by Mr. Crowther.
On April 24, 2020, Mr. Crowther sent Kristen Dilorio
an email requesting the wire transfer for the boat. He did not
specify which account he wanted the money wired from when he
was requesting the wire transfer to Sara Bay Marina. Sanibel
Captiva took it upon themselves to wire the money from the PPP
account. The timeline in email communications negate the
government's theory that Mr. Crowther intended to utilize
specific PPP funds to purchase the boat.
So I'll focus on that first sentence last, Your
Honor. It sort of proves the material nature of this
statement. If, in fact -- and I think everyone can agree on
this -- if, in fact, the bank, Sanibel Captiva, had just picked
what account it wanted to move money to buy this boat from,
clearly, there would not be -- the government would be -- well,
the government would be in a pretty tough spot proving
Mr. Crowther intended to defraud the bank in connection with
this PPP loan. So this is more or less a complete defense to
the charge and this is laid out pre-indictment to the bank.
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Turns out, Your Honor -- well, so a couple of things.
First of all, this type of a defense really was not
on the government's radar. In a number of white collar cases,
I don't know that I've ever seen, or Mr. Reichling has ever
seen, the bank just sort of take it upon themselves to pick
which account they want to move nearly $700,000 from. So,
while there was no doubt the government was investigating
things and would continue to investigating things, this is not
a defense that the government had seen coming. And, from
there, Your Honor, the government had to and did, in fact, have
multiple interviews with the bank and multiple bank employees.
That went all the way through trial, Your Honor, where both
Kristen Dilorio and Jennifer Briggs testified about the
procedure the bank uses in getting the account right for these
transactions to disprove this idea that Mr. Crowther had just
said wire some money and the bank messed up and picked the PPP
account. So let me talk a little bit about this.
I would also note, Your Honor, this letter contains
an email and it's listed as attachment D. And I think it's
well near the back, of course. But the email is an email where
Mr. Crowther tells Kristen Dilorio to deposit the PPP funds
into the main operating account and let me know what else you
need.
Well, also, as we found out during the trial, this
email's cut short. There was another email in this chain that
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followed up and it said give me a call about it. And what did
Ms. Dilorio testify happened when they had that call?
Your Honor, I have marked Government's Exhibit No.
21. It is the transcript of the direct examination of
Ms. Dilorio. I'm happy to enter it into record, or I'm happy
to attempt to enter it as a piece of evidence, but given that
it's a trial transcript, I don't know if the Court wants the
clutter.
THE COURT: We've had enough exhibits. I'm really
not concerned about cluttering anymore. So if you'd like to
move that in, it might be simpler to find it.
MR. LEEMAN: Yes, Your Honor. I'm going to ask, at
this time, Government's Exhibit No. 21 be introduced into the
record, which is a transcript of Kristen Dilorio's testimony at
trial.
THE COURT: Any objection as to 21?
MS. WAID: No objection, Your Honor.
THE COURT: Government's 21 will be admitted.
(Government's Exhibit Number
21 admitted into evidence.)
MR. LEEMAN: And I'm going to move to page 16 of that
exhibit. And we are referring to the email. And Ms. Dilorio
is asked what was Mr. Crowther's response to your email -- and
I'm going to Zoom in on it. And Ms. Dilorio answers he says to
deposit it in the main operating accounts. Let me know what
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else you need and when to expect to close. And that's what we
just saw. That's what we just saw attached to the letter, Your
Honor.
Moving on to page 17 of the transcript, Mr. Reichling
asks about another email. And, this time, he says -- the
question is:
"Is that email that I have the portion that I have
Zoomed in on?
"ANSWER: Yes.
"QUESTION: And what did he email you back again?
"ANSWER: Can you call me, please?
"QUESTION: And did you call him?
"ANSWER: I did.
"QUESTION: And do you recall what you all discussed?
"ANSWER: Yes. I was just about -- about if there
was an option if we could open a separate account to put the
PPP funds into.
"And could you continue to explain that conversation
with me? Did he tell you that he wanted the money to remain in
the operating account or did he want it to go somewhere else?
"ANSWER: He just asked if a separate account could
be opened to put the funds into, which we were allowed to open
a separate account to put the funds into. So he said he would
just like to keep it from, you know, other staff from viewing
the funds. So I went ahead, you know, and it was a quick
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conversation about it, if there's something we can do. We did
it for a couple of other customers that requested it, so it
wasn't anything out of the ordinary."
So, moving away from the transcript there, Your
Honor, Ms. Dilorio, quite conclusively, testified that
Mr. Crowther asked that these funds be put into a PPP
segregated account. In fact, there's documents in the record
drawn up from trial in which he opens the account. Account
opening documents, okay? So that happened.
Regarding that, page 19 of the transcript,
Mr. Reichling asks:
"And can you read what you wrote and also tell the
jury and date and time that you sent that?
"ANSWER. Sure. The email was on September -- the
email was September on Friday, April 10, 2020, at 3:49. It
says, 'Hi, Casey. Please sign where highlighted on the new
account. I have updated your SBA file to indicate that the
funds will go into this account. Let me know if you need
anything else. Thank you.'"
So we are well past bank just making it upland here
in the testimony of Dilorio, when which was credence by the
jury, Your Honor, because if, in fact, Ms. Dilorio had just
randomly picked the account she wants to move money out of, or
Ms. Briggs, there isn't a crime here. Or it becomes very
difficult for the government to prove.
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Just moving, I think, briefly on to some more of what
the government had to do and what it introduced at trial to
disprove this idea that the bank unilaterally did this is the
numerous layers of review that these wires go through and,
also, also the requirement that each account with a wire access
have a passcode associated with it. And, in fact, the passcode
associated with the PPP account was a unique one in this case.
So, moving to page 21 of the transcript, reading:
"QUESTION: I'd like you to sort of walk me through a
scenario in which a customer submits a wire request via email.
What is your typical standard of practice, if you receive a
wire request via email from a customer?
"ANSWER: We have a couple of different methods to
set customers up depending on how many wires they do. This
request is pretty typical for a lot of our businesses. It
would initiate us either receiving a signed request from them
or based on what we have on file, which is called a wire
agreement. Kind of sets the tone for whether we can just send
wires based on an email and then with a call back verification
or they might have to sign a request in an email to us in order
that they send it. But, by receiving calls, this would prompt
me to check and see if we have a wire agreement on file, which
we do, and then to call the folks back listed as authorized
confirmers and confirm the dollar amount and their codeword.
"QUESTION: What did you do in response to receiving
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this email from Mr. Crowther?
"ANSWER: I called Casey to confirm the dollar amount
and the codeword and that was for a reason.
"Let me stop you there. Codeword. Did this
particular account that Mr. Crowther was requesting the funds
to be wired from have its own unique wire passcode?
"It did."
So that's it, Your Honor. It is this coming out of
the box prior to the indictment and telling something that is
so blatantly contradictory with the evidence at trial, I have
seen -- in that way, it is very similar to any number of
obstruction arguments that the government has made in front of
this Court and others around the country. There are some
significant differences that the government, obviously,
acknowledges.
First, Ms. Waid has pointed out that this letter in
its representations, which the government thinks it's proven
are false, was made in some quote/unquote some type of an
attempt to resolve the case. So the first point I'll make
about that, which I don't believe is the most compelling, is
the rule she cites is a rule of evidence, it's not a privilege,
and the rules of evidence are not applicable at sentencings,
according to the Federal Rule of Evidence 1101. So we start
from there.
The second issue with the argument is she cites Rule
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408 as this impediment to the government relying on this type
of factual information, but Rule 408 contains a very big
exception. I'm reading from 408(b).
"The Court may admit this evidence for another
purpose, such as proving a witness's bias or prejudice,
negating an contention of undue delay, or proving an effort to
obstruct a criminal investigation." So the rule she cites,
Your Honor, has an exception for just this scenario.
And I anticipate the Court's going to ask me if we
found any cases on this. And I have. It is not the -- it is
not one of the most wordy opinions I've ever read, but United
States v. Bushert, 997 F.2d 1343, and I'm quoting from the case
here. This is the Eleventh Circuit 1993.
"Bushert's third claim that he should not have
received an enhancement for obstruction of justice similarly is
without merit especially because the District Court found that
he lied during his plea negotiations and these lies impeded the
investigation of the offense."
Now, wasn't exactly offering to plea for anything
here, but I think that's, you know, analogous to what's going
on. He's looking -- Mr. Crowther is looking for to us drop the
charges and throwing stuff at the government to see if they'll
bite. The Eleventh Circuit has found, when you're negotiating,
if you're lying to the government, it, at least in that case,
found that the enhancement was applicable. And that's a 3C1.1
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case under the guidelines, albeit from 1993, but the principle
seems to me to be the same.
So we have this falsity. We have this materiality.
If true, what Mr. Crowther said would be nearly a complete
defense. We have this -- well, I can tell the Court we had to
meet with multiple witnesses on multiple occasions and
introduce this evidence at trial to exclude this potential
defense. So we have this serious impudence.
I want to just, maybe more to save time, but address
a couple of arguments that Ms. Waid made, and I anticipate her
making here shortly, is look, if we do this, what we're -- or
if the Court does this, if the Court applies this enhancement,
what it's really going to do is chill people from engaging in
pre-plea -- or in negotiations with the government about the
charges and I think that's half right, but I think it sort of
chills the stuff we don't want people negotiating the
government with. We want to chill people coming to the
government and lying in order to get out of serious felony
crimes. And that's what happened here. So, obviously, there's
reason to be circumspect about applying because we don't want
to chill people who are not lying to the government, but this
is quite clearly false, Your Honor. This idea that the bank
unilaterally decided and picked and chose to take money from
the PPP account and buy Mr. Crowther's $700,000 boat without
telling him.
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And so, for those reasons, Your Honor, we think the
enhancement applies and -- yeah. For those reasons, Your
Honor, we think the enhancement applies and the two-point
increase is appropriate.
If the Court would just give me one minute to confer
with co-counsel?
THE COURT: Certainly.
(Pause.)
MR. LEEMAN: Thank you, Your Honor.
THE COURT: Don't go away so quick. I've got some
questions for you.
MR. LEEMAN: Yes, sir.
THE COURT: Did you find any cases where it wasn't
the defendant making the false statement but his or her lawyer?
MR. LEEMAN: I did not, Your Honor. And I tried.
THE COURT: Doesn't that make a difference?
MR. LEEMAN: I think it could make a difference, but
I think why it doesn't make a difference here, Your Honor, I
think when you read the paragraph here and understand sort of
where we are in the case, this is -- information about who
chose to do this is not coming from the bank, it's coming from
Casey Crowther; right? We are a couple of weeks after the case
has been charged. We're not even to indictment yet. Ms. Waid
knows what she's saying. Government's saying nothing untoward
about -- or hope it is not construed as saying anything about
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Ms. Waid here. The letter is passing along information from
Mr. Crowther. There's no way for Ms. Waid to know this. And I
think, Your Honor and what I would say gives the government --
this is, essentially, a plea negotiation; right? This is
something -- I think it's reasonable to infer -- in fact, it's
ethically required to keep your client informed about how you
plan to resolve a case. And so, given that this information
has to come from Mr. Crowther and given sort of the status of
the case, I think it's fair to impute, you know, this letter
and the facts that are recited by the attorney, who is the
agent of Mr. Crowther, no less, against Mr. Crowther. It's
not -- this isn't a legal argument, I think, that -- at least,
in this part, that the government is focusing on. These are
facts.
THE COURT: Well, it's not immediately apparent to me
that the source of the information has to be Mr. Crowther. I
mean, the context of the letter, I gather, is that the
government had issued a Grand Jury subpoena on the defendant's
company, Target, and this letter was producing documents
pursuant to that subpoena. And counsel then was making
arguments as to why she thought there should be no charges and
included her evaluation of what the records reflected. I mean,
why can't this letter be written as Ms. Waid's interpretation
of the documents was as follows? It may have been wrong, as it
turned out at trial, but, certainly, at the early stages
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pre-indictment, she believed what she believed.
MR. LEEMAN: Well, Your Honor, because the documents
provided, as I showed the letter to the Court, Your Honor, was
a partial email. What they referred to here was this partial
email where it was like put it in the main operating account.
But when the government -- it wasn't until later that the
government saw that the text chain continued, Your Honor, and
it was give me a call back. And then -- well, with that in
mind and with this letter in hand, the government had to start
piecing together well exactly what happened here. Is it
possible that the bank just unilaterally made a decision to
move $700 out of a PPP account? So that's what I would say to
that, Your Honor.
I understand the point, but I also would note here,
you know, we are dealing with a preponderance of the evidence.
You know, we are not required to prove beyond a reasonable
doubt, at least at this stage, that it was Mr. Crowther, but I
think that's a fair inference from what's going on here. Or at
least the government submits it's a fair inference.
THE COURT: Even if you tag Mr. Crowther with it and
assume that it was incorrect information and, from the
government's perspective, knowingly false information, I guess
I'm not sure I understand what the government was forced to do
that it wouldn't have been required to do anyhow? I mean, in
effect, as she gives you the outline of the defense, that helps
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the government because now, prior to the indictment, you know
what they're going to say and, you know, you kind of got a
head's up.
MR. LEEMAN: Well, to the last point first, Your
Honor, I guess, any time the government's provided information,
we kind of get a head's up, but I don't think that sort of
makes it fair game to lie to the government.
THE COURT: I don't disagree with that, but you
certainly have to prove and you had to -- presumably had to
investigate before that indictment the very kind of things that
she was talking about. I don't see where you had to do
anything extra is my point.
MR. LEEMAN: Well, what I would have to proffer to
the Court and what I thought I did proffer, Mr. Reichling and I
had to sit down with bank witnesses on multiple occasions
hashing this out. The wires --
THE COURT: Wouldn't you have done that anyhow?
MR. LEEMAN: Well, I think it's this specific issue.
You know, what is it, bank employees, that you can tell us that
would exclude this possibility that the bank just unilaterally
moved the money from this account? Well, then you're looking
to see was there enough money in the operating account at the
time to cover it because the bank -- you're looking are there
unique passwords that would have to -- you're looking at does
the bank have some internal procedure or layers of review. And
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so we're dealing with that with Mr. Cheffer on an initial basis
to gather an understanding of it. We're dealing with it with
Kristen Dilorio, who handled the wire related to Mr. Adkins.
She was also involved in the boat wire, although, that was
finalized by Jennifer Briggs. We're dealing with it with Lana
Hollier, who's involved in this sort of chain of record keeping
of documents. So I don't know what to say, Your Honor, other
than it was -- this particular issue was put into play by
Mr. Crowther and the government had to respond.
THE COURT: All right. I may come back after hearing
from counsel.
MR. LEEMAN: Thank you.
THE COURT: Ms. Waid.
MS. WAID: Thank you, Your Honor.
Pursuant to the enhancement for the obstruction of
justice, I truly do not understand how the statements of
defense counsel can be imputed on the defendant.
Second, Target was actually -- Target Roofing
produced the emails that then went to the government so I'm not
exactly sure where their argument about an obstruction comes
in.
I also want to put on the record that they claim that
this was knowingly false; however, you know, people's memories
differ and we're talking about six months past the PPP loan
application and there is this extremely confusing evidence in
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the trial record of a bank account that was opened on March 23,
2020, by Diane Jefferson. It's Government's Exhibit 100. And
then, a few weeks later, Ms. Dilorio opens the bank account
that is now being called by the government the PPP account. So
I can understand where there would be confusion about why are
we opening another account when the first account, which had no
money in it pursuant to the evidence at trial, already exists
three-and-a-half to four weeks earlier.
I also don't understand how having to actually
interview your witnesses is an obstruction of justice.
Frankly, it's the government's job. They should be
interviewing their witnesses if there's a discrepancy.
Honestly, if it had been me and I had been a prosecutor for 14
years, you would have called me up and said hey, I think that
there might be something else going on here. Let's discuss
that. That's the purpose of Rule 408, is to have some type of
negotiations, a little bit of professional courtesy. If I got
something wrong, that's on me and they should be telling me
that instead of having to say that there's some type of
obstruction because they now had to go investigate the case
that they, frankly, should have been investigating anyways, had
to speak to witnesses who they would have been preparing for
trial anyways. I just don't see how this was an obstruction of
justice in any way, shape, or form. I also think, because
Target was the one that did provide them with the emails, that
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it kind of negates any type of somebody was trying to hide the
truth. Memories differ. And I -- this is the furthest thing
from an obstruction of justice. Of all the things that I've
said today was an overreach, this is the enhancement that I
believe completely overreaches.
Thank you.
THE COURT: Let me ask -- well, maybe I'll ask
Mr. Leeman.
I gathered from your argument, or I inferred from
your argument, that the government's position was the defendant
did not produce the entire email chain.
MR. LEEMAN: That's right, Your Honor. And the
government received the entire email chain not pursuant -- not
in connection -- let me try to explain this letter, Your Honor.
This letter had a number of attachments to it, which
sort of like talked about things in the letter, but it also was
sort of the cover letter for a discovery production. And so
the email that we're referring to, the whole email wasn't
farther down in the discovery production. The whole email that
we got, we got from the bank later. So it's not sort of like
oh, well, if you would have just looked harder down in the
discovery, you know, you would have found the whole email.
THE COURT: All right.
And, Ms. Waid, I understood your argument a moment
ago to be that the defendant produced the entire email chain.
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MS. WAID: It was my understanding that this was
produced in discovery, yeah. Whenever we got the Grand Jury
subpoena, in response to that Grand Jury subpoena, Your Honor.
I mean, I think the only part of it was the call me part, which
could have been interpreted any way, anyways, but it was my
understanding that that was actually produced.
THE COURT: Is that what was missing, the call me?
MR. LEEMAN: The call me, part. Yeah, there's no
smoking part in the email, Your Honor.
MS. WAID: Right. And call me can be interpreted any
way to next Tuesday.
THE COURT: Okay, thank you.
MS. WAID: Thank you.
THE COURT: All right, Counsel, is there any other
factual matter that the Court needs to resolve or any other
issue with regard to the calculation of the guidelines that we
need to discuss?
MR. LEEMAN: Do we have an -- I believe there might
be some issue with acceptance of responsibility, Your Honor.
THE COURT: You're right, and I did miss that. Let's
see where.
(Pause.)
THE COURT: All right. Someone help me. What's that
paragraph number?
PROBATION OFFICER: It begins on paragraph 66.
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THE COURT: Sixty-six. Thank you.
All right, Ms. Waid, is there still an objection with
regard to the lack of acceptance of responsibility under the
guidelines?
MS. WAID: Yes, Your Honor.
THE COURT: I'll be happy to hear from you as to
that.
MS. WAID: Your Honor, Mr. Crowther pled straight up
to the mortgage fraud and he did so before this Court. He
should -- he deserves acceptance of responsibility for that.
Again, the obstruction, my statements should not be
imputed upon Mr. Crowther and he should not be punished for
that, some type of obstruction of justice for that type of
thing. I believe he deserves credit for his plea. I would
also ask the Court to take into consideration that, again, this
trial was a legal issue. It's been a legal issue from the
beginning. We've believed that there is no violation of the
CARES Act. We respect the Court's order and the jury's
decision, but Mr. Crowther felt like he had no other choice but
to go to trial, and we ask that that not be held against him.
He should receive some acceptance of responsibility.
THE COURT: What do you suggest? You verbally
underlined some acceptance. What --
MS. WAID: Well, there's three; right? So, you know,
a two-level acceptance of responsibility for his mortgage fraud
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plea.
THE COURT: All right.
MS. WAID: Thank you.
THE COURT: When I say all right, I'm not saying I'm
doing it, but I understand the argument.
MS. WAID: I get you.
THE COURT: From the government?
MR. LEEMAN: Your Honor, the government doesn't
believe any level of acceptance of responsibility is here. I
acknowledge the fact that there was a guilty plea here, but I
think there's sort of more at play that's more important as it
relates to the analysis of this and I hope I'll be able to walk
the Court through what the government believes.
I just want to note first from the commentary note 2
of 31.1, I'm quoting here:
"This adjustment is not intended to apply to a
defendant who puts the government to its burden of proof at
trial by denying the essential factual elements of guilt, is
convicted, and only then admits guilt and expresses remorse.
In rare situations, a defendant may clearly demonstrate
acceptance of responsibility for his criminal conduct even
though he exercises his constitutional right to trial. This
may occur, for example, where a defendant goes on to trial to
assert and preserve issues that do not relate to factual guilt.
Eg., to make a constitutional challenge to a statute or
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challenge to the applicability of the statute to his conduct."
So that's sort of the framework here. I think that's
well known probably -- certainly to the Court, to all the
parties. And the government's argument, this isn't a rare
case. This is a white collar case. It's higher profile than
some, but it's garden variety fraud. That the plaintiff
didn't -- or that the defendant didn't contest a lot of facts
in a white collar case is how almost all of them go. The issue
is usually intent. I mean, the bank records prove what
happened. There really wasn't any denying that Mr. Crowther
bought a boat. There's a bank account that shows he moved
$670,000 to go buy a boat. I mean, that's white collar crimes
101. So the idea that they agreed to a lot of the facts is
somehow evidence that they accepted responsibility, I think, is
sort of a -- is not really apt, especially as it relates to
white collar cases.
So that being said, you know, we have even here, even
in his most recent sentencing memo, you see example after
example where Mr. Crowther is not accepting responsibility.
Remember, the government proved that Mr. Crowther had an intent
to conduct a scheme or artifice to defraud. We had to prove
that. And Mr. Crowther, in his sentencing memo, document 156,
says he deeply regrets his decision to buy a boat during this
timeframe and is remorseful about his poor accounting
decisions. That doesn't sound to me like someone who's
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accepting he had an intent to defraud a bank. He's passing it
off on poor accounting decisions like, if he had just taken
another class at the community college, this would have all
been okay. No, this is a crime. It was a purposefully
conducted crime and he's still not accepting responsibility for
it. Now, there might be good reasons for not accepting
responsibility. He might want to preserve some issues for
appeal, but that's a different thing. If he gets a -- we're
talking now whether he's here accepting responsibility for his
crime, and his sentencing memorandum is absolutely not bearing
that out.
Sentencing memorandum as well, again, not taking
responsibility for himself, but pawning it off on the
government. Page 3, the government inserted itself into a
performing loan. There are no loss amounts and there's no
evidence that Casey Crowther ever intended to default on his
loans. Mr. Crowther's here painting the government as the
wrongdoer. The government here prosecutes an individual,
convicts him of six felonies and, you know, it's the government
that's the bad guy here. If the government would have just
left him alone, that would have been more fair. These six
felonies weren't, apparently, that big of a deal. That sort of
idea that someone else is at fault is the height of not
accepting responsibility.
Goes on to -- this from the sentencing memorandum as
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well, and I'm quoting here, also, from page 3, as stated in his
letter to the Court, "Mr. Crowther takes full responsibility
for the mortgage fraud and deeply regrets his actions," then he
guess on to talk at that time PPP fraud. Doesn't say he takes
full responsibility. He says, "He respects the verdict of the
jury in the PPP fraud case." So he's not -- he's willing to
take full responsibility for what he's pled to, but he's not
taking full responsibility for what he was convicted of. And
that's normal, but that's not acceptance of responsibility.
That's normal in a trial case.
And it's not even clear that Mr. Crowther's really
all that gung ho about taking excited -- or taking
responsibility for the charge he pled to. This is, again, from
the sentencing memo. This time, at page 6. "Even in light of
his poor decision, it's clear that Mr. Crowther never intended
to defraud the lender. He put down a 50 percent down payment
on his home. Someone having the intent to walk away from a
mortgage would never provide that." I think there's ways to
quibble with that language, but here's an individual who pled
guilty to mortgage fraud, or defrauding a mortgage lender,
saying Mr. Crowther never intended to defraud the lender. I
mean, so we are right on the -- we are right on the dividing
line between whether he's even accepting responsibility for
this mortgage fraud or not.
I would also just remind the Court, Your Honor, the
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mortgage fraud case, at least in the government's estimation,
he -- Mr. Crowther was caught redhanded. The documents don't
match the bank documents and the emails come from Mr. Crowther.
They are doctored. And Mr. Crowther waited until the eve of
trial to plead guilty to it. This isn't someone who ran in
and -- so you don't have to run in to get acceptance of
responsibility, but it's certainly a consideration when a
person is being sentenced.
So, moving on, page -- well, I'm just going to skip.
There's more examples in the sentencing memo. This isn't a
person who's really coming to court and falling on his sword
and said I did it; I committed PPP fraud; it was a bad idea and
a crime, but I'm here to tell the Court I deserve, you know,
some leniency. That's not him. He's not taking responsibility
for the PPP fraud. It's an accounting error, according to him.
More pertinently, I think, or more illuminating is
their conduct at trial. I would first note that every single
witness was cross-examined at trial. So we had nearly a
five-day trial in this case. It's hard to have a five-day
trial on solely a legal issue, I would say, especially
considering legal issues aren't usually settled by a jury, but
we had a five-day trial. Every one of the witnesses was
cross-examined and there were factual arguments raised.
There's sort of these blended sounding legal/factual arguments
about the PPP program and what interim final rules say and the
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government's always said that's sort of background noise. The
real question is whether this individual lied to a bank and
whether he did these other things that prove he lied to the
bank. And they took a lot of stabs at disproving that. So we
have the fake 39 employees. The government put that on to
prove that Mr. Crowther intended to get this money and be able
to walk away with all of it, never have to pay any of that
back. Put that on. Well, that was not uncontested. That was
not this example that the guidelines give of uncontested
conduct but we're going to go up and see if it actually is a
crime as a legal matter. No, they contested it. How did they
do that? Evelyn Portinari. Evelyn Portinari during trial -- I
have, actually, Your Honor, I'd like to introduce Government's
Exhibit No. 29, which is a portion of the trial testimony.
It's volume II of her -- the trial testimony of Evelyn
Portinari.
THE COURT: Any objection to 29?
MS. WAID: No objection, Your Honor.
THE COURT: It may be admitted.
(Government's Exhibit Number
29 admitted into evidence.)
MR. LEEMAN: Thank you, Your Honor.
Ms. Portinari is asked, and this is on page 34 of
that exhibit:
"QUESTION: And, like many of us during the pandemic,
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did Target decide to actually take on tasks they hadn't done
before and do some kind of spring cleaning?
"ANSWER: Yes.
"QUESTION: And were these workers hired to kind of
clean out all of the old documents and things of that nature
from those trailers at the time?
"ANSWER: They had already been moved from the
trailers out to the house, but yes."
So this is Ms. Portinari. This is elicited during
her cross-examination by Ms. Waid testifying about these fake
employees being hired to remove and shred old documents from a
house on the Target Roofing property. Now, the problem was she
was testifying what these people were hired for, but she never
saw any of them. So Ms. Waid spent more time eliciting
testimony -- Mr. Crowther spent more time eliciting testimony
from Evelyn Portinari that really distanced herself from
knowing whether these people existed or not. This is on page 9
of Exhibit 29:
"QUESTION: What time do the crew members usually get
to work?
"ANSWER: About 5:30.
"QUESTION: 5:30 in the morning?
"ANSWER: Yes.
"And what time do you usually get to work?
"ANSWER: 8:30 a.m."
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So, again, these are factual arguments, these are
factual things the defendant is raising to try and undermine
the prosecution's case. Perfectly normal, but not accepting
responsibility.
Page 12, it goes on. She's asked a question about
how many people she can identify at Target Roofing. She says
is she able to identify all 170 to 180 employees?
"No.
"Would you be able to identify 100 of those
employees?
"No."
She was also asked a series of questions about COVID
protocols that were introduced at the Target Roofing business.
That's on page 14. Page 28 as well. She was -- she testified
about being required to stay in her office, being told not to
mingle with other coworkers. Page 28, there's a discussion of
certain roofers becoming sick with coronavirus and being
hospitalized, something akin to an outbreak at Target. This
really forced everybody to be less around. Again, they're
introducing all of this stuff to create distance to explain why
the director of human resources, who is in charge of hiring for
the company, hasn't seen these people. All factual in nature
again.
And then Ms. Portinari, in redirect examination, also
noted well, I didn't even see people when I was going to the
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bathroom or, you know, it's not like I was absent. I just, you
know, these 39 people and these five family members, they never
showed up ever. They asked Ms. Portinari questions directly
addressing Mr. Crowther's criminal intent. Page 32:
"And because the intent of getting the PPP money was
for what reason?
"ANSWER: To employ our employees and make sure that
they were paid.
"QUESTION: And that's exactly what happened;
correct?
"ANSWER: Yes."
I mean, that's not -- that's them saying they spent
the money appropriately on employees, which is definitively
disproven by a very large portion of the money being spent
directly on a boat; so...
MS. WAID: Your Honor -- oh, I'm sorry. I just -- I
wanted to make sure that I was clear because I had asked for
acceptance of responsibility for his mortgage fraud plea and
that it not be held against him that he went to trial, but this
seems like we're asking for acceptance of responsibility for
the PPP and that's not what was -- not that I thought that I
had actually articulated on the record.
THE COURT: Okay.
MR. LEEMAN: Well, if that's the case, if they're
withdrawing it, Your Honor, I had believed I had read that they
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were arguing that this was really a legal issue and he went to
trial just to preserve that legal issue. If they're
withdrawing that, I don't have much of an argument. If they're
saying he does not get acceptance of responsibility, I'll
certainly end my argument for the PPP fraud stuff and then I
can address what I think the interplay is between pleading
guilty.
THE COURT: You've heard what she said as well as I
did. So proceed.
MR. LEEMAN: Your Honor, the issue of whether, with
respect to the mortgage fraud related counts, Mr. Crowther gets
acceptance of responsibility, he doesn't. And that may sound
harsh, but that's because his sentence is almost entirely based
on the conduct and enhancements, if the Court grants them,
stemming from the PPP fraud. The mortgage fraud is driving
almost nothing as it relates to the sentence. The loss amount
is being largely driven, if the government is correct, is being
largely driven by the PPP fraud, if not solely driven by the
PPP fraud. Obstruction of justice, PPP fraud related.
Sophisticated means, PPP fraud related. And the plus one
enhancements for money laundering, PPP fraud related. So that,
Your Honor, there isn't something to really reward. If he
hadn't been charged with the mortgage fraud, I guess -- it's
funny in some ways because Mr. Crowther is asking for a -- if
he hadn't been charged with the mortgage fraud, he'd be worse
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off. They're asking for some benefit because he pled guilty to
it when his sentence is being driven completely by the PPP
fraud. I think it would be perverse to give him some time off
in this case because he pled guilty to that when he didn't
plead guilty to the more serious fraud in the government's eyes
and wouldn't get any credit for pleading guilty if he hadn't
been charged with the mortgage fraud.
So the Court, obviously, is free to consider his
guilty plea in fashioning a variance, but as to whether he
technically qualifies for it, the government believes he
clearly doesn't and would not support the reduction.
THE COURT: Where is the burden in this situation?
MR. LEEMAN: The burden on a reduction is on the
defendant, Your Honor.
THE COURT: All right.
MR. LEEMAN: Yes.
THE COURT: Ms. Waid, anything else as to this
particular issue?
MS. WAID: Just briefly, Your Honor.
I guess I didn't really understand the last argument.
Mr. Crowther has absolutely no control of what probation does
in their PSR. He came in. He pled straight up to the mortgage
fraud. If you recall correctly, there was actually a money
laundering that had been attached to that that, months before,
we had actually said to the government was legally
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insufficient. That wasn't dismissed until right before the
trial as well. He did what he had to do. He accepted
responsibility. And the sentencing memorandum that was
actually discussed, that was talking about loss amounts and the
intended loss. And, if somebody puts down 50 percent on a
house and they pay their mortgage payments timely, that was the
argument that was, in fact, being made. So I think that
argument the government was trying to put was a little
disingenuous. He's done nothing but accept responsibility for
that.
As far as the PPP stuff, like I said, I just ask that
he not be held -- that be held against him that he actually
went to trial because we still do believe that there is a legal
issue involved and we continue to believe that and I'm sure
that Mr. Crowther will appeal that. And that's his right to do
that. But he, knowing that he did wrong in the mortgage fraud
case, came and pled guilty to this Court and he exercised his
constitutional right to a trial, which is all his right to do.
He should get acceptance of responsibility for what he, in
fact, pled guilty to, and I think that's pretty clear on the
record.
Thank you.
THE COURT: All right, thank you.
All right, Counsel, is there any other issue I've
missed in terms of either factual objections that need to be
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resolved or relating to the calculation of the sentencing
guidelines?
MR. REICHLING: Your Honor, I just want to make sure
there's -- I know this was never objected to in the -- by the
defense in their objections, but I want to make sure that, on
the record, that this particular enhancement still is in play
and it was not objected to, and that is under paragraph 79 of
the presentence report. That is the enhancement under 2B1.1
sub (b)(17)(a), which is the deriving more than $1 million in
gross receipts from one or more financial institutions as a
result of the offense. So I just wanted to verify for the
record that the defense, even though they never objected to
this enhancement, continue to maintain that they're not
objecting to this enhancement because it's the government's
belief that this is -- this particular enhancement applies to
the guideline calculation.
THE COURT: All right. I don't believe I've ever
seen any objection from the defense; is that accurate?
MS. WAID: That's accurate.
THE COURT: Okay. All right. The restitution
amount, let's see. I think the parties agree that it's the
$2,098,700 less the $30,000 that have now been paid and that's
the figure I mentioned earlier; is that correct? Everyone
agrees that's the restitution amount?
MR. LEEMAN: That's the government's position, Your
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Honor.
THE COURT: Ms. Waid?
MS. WAID: Well, it was our position, Your Honor,
that, because it's a performing loan, there really shouldn't be
any restitution because he's still paying off on that loan.
THE COURT: Okay.
All right, Counsel, is there anything anyone wishes
to discuss other than the pending motion for a variance and the
actual sentence the Court should impose? What I propose to do
is take our lunch recess, come back, I'm going to give you my
decisions with regard to what we talked about for the last
three hours, calculate the guidelines, then have oral argument
with regard to the motion and what sentence should be imposed.
Anyone have a different proposal?
MR. REICHLING: That sounds good to the government,
Judge.
MS. WAID: That's fine, Your Honor. We still do have
to make that one correction regarding the financial condition
of the defendant.
THE COURT: You did mention that.
MS. WAID: I think there's a mathematical error that
we can probably get through pretty quickly.
THE COURT: Why don't you tell me what it is and
we'll see if we need something more formal.
MS. WAID: Court's indulgence here.
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(Pause.)
MS. WAID: Your Honor, the probation was provided
profit and loss statements for the -- from Mr. Crowther for
Target Roofing and for his, also, for his personal income and
there appeared to be a -- Ms. Hollobaugh was supposed to
testify to this. But there appear to be a monthly income of
total of 1.834, and what we believe probation did was they
actually took the amount of income that was coming out of
Target Roofing and they applied that as personal income to
Mr. Crowther, 'however, it was miscalculated and it was
actually a net loss of $200,000 for Target Roofing's monthly
income at this point in time. And they applied that kind of as
a $200,000 just expense instead of what the net income was,
which is leaving Mr. Crowther's net -- total monthly income at
1.834 on page 27 of the PSR, which is substantially over what
it, in fact, is. And, in fact, Target has a negative income at
this point in time and Mr. Crowther's, I think, his net
personal cash flow comes to about $5,973.
THE COURT: Well, I was going to be really impressed
with the $1.8 million per month income.
MS. WAID: Right. Us as well.
THE COURT: So what do you want changed?
MS. WAID: Well, I believe she just transcribed it
wrong to make a -- let's see. Essentially, the 1.834 total
monthly income actually comes down to $5,973. So we have -- I
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have a PSR and kind of Mr. Crowther's objections here where we
compare what she put in the PSR and what we believe the errors
are as Exhibit B that I'm happy to -- I mean, G, which I'm
happy to provide for the Court for your review, and the
government already has it, as to what we think actually the
problem was.
The other thing was that the Ortiz property was sold
on May 21st, so we also allocate that in this Exhibit G as to
what the actual amounts should be.
THE COURT: Does the government have objections to
the changes proposed in their Exhibit G, I think she said?
MS. WAID: Yes, sir.
MR. REICHLING: Your Honor, the government would just
defer to probation's calculation of his income. I mean, all
we've gotten is a profit/loss statement. We have not done any
independent investigation concerning what his current financial
status is. That was a part of probation's creation of the
presentence report. So the government would just defer to
probation on the calculation of his income.
MS. WAID: And, again, Your Honor, I think it was a
mathematical error. It wasn't so much as I needed to give you
different information. We utilized the profit and loss
statements that were given to probation and it was actually a
mathematical error with numbers that she had included
incorrectly from Target and also what the actual loss amounts
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were per Target monthly and then allocated 1.8 to Mr. Crowther,
which I can tell you right now it's completely inaccurate.
We also have those profit and loss statements
utilized by probation as Exhibit E and as Exhibit E1 that I can
also proffer to the Court. So, I think, essentially, what had
happened was the revenue was 1.8, but the expenses are actually
2.138 to Target, which makes it a net loss of 208. Whereas,
probation did 1.8, took the expenses out as part of
Mr. Crowther's personal income, and the net income then became
1.6. So, really, it's the same exact information that was
provided to probation, but just calculated mathematically
incorrectly.
THE COURT: Let me do this: Let me suggest that,
over the recess, you and the probation officer compare your
Exhibit G with the presentence report and see if you can come
to an agreement as to what the situation is and either we can
attach G as a addendum to the presentence report or substitute
it or do some such thing and then I'll address it after lunch.
MS. WAID: Absolutely.
THE COURT: All right. Anything else before we
recess?
MR. REICHLING: No, Judge.
MS. WAID: Nothing from the defense, Your Honor.
THE COURT: All right. It's five after 1. Does an
hour do it for everyone?
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MS. WAID: Yes, Your Honor.
MR. REICHLING: That's fine, Judge. Thank you.
THE COURT: All right, 2:05 we'll see you back here.
(Luncheon recess taken at 1:04 p.m.)
AFTERNOON SESSION
(Time noted: 2:08 p.m.)
THE COURT: All right, looks like everyone is back
that we need.
All right, Counsel, I've been handed an updated
three-page document related to the defendant's assets and
liabilities. I assume this is the product of discussions with
the probation office over the lunch hour and it reflects
changes in the numbers set forth in the presentence report.
First of all, do both sides accept the updated report
for purposes of the presentence report?
MS. WAID: Yes, Your Honor.
MR. REICHLING: Yes, Your Honor.
THE COURT: All right. I would simply direct the
probation office then to include these figures either as an
attachment or as a correction to the figures set forth in the
current version of the presentence report.
All right, anything else before the Court announces
its decisions with regard to the sentencing guidelines?
MR. REICHLING: No, Judge.
MS. WAID: No, Your Honor.
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THE COURT: All right. I'll try and address the
arguments as it relates to the paragraphs in the order in which
they are set forth in the presentence report.
The first objection relates to the lack of any
acceptance of responsibility given in the calculation of the
guidelines. Generally, that relates to paragraphs 66 through
71. The defendant, obviously, pled guilty to two of the counts
in this case, counts five and six, and he went to trial as to
four of the counts and was convicted. A plea of guilty does
not authorize a defendant, as a matter of right, to obtain an
acceptance of responsibility, although, certainly, that is the
most common situation. The burden is upon the defendant to
show that he's entitled to acceptance of responsibility.
In this particular case, the Court finds that the
fact that the defendant went to trial as to counts one through
four indicate that he has not accepted responsibility. That's
not because you went to trial, which the Court understands is,
certainly, any defendant's rights, but the issue in this case,
despite the defendant's attempts to make it into a PPP issue,
the charges were bank fraud and related bank fraud and money
laundering allegations. The Court finds that going to trial as
to those theories does not justify his acceptance of
responsibility, even given his pleas of guilty as to counts
five and six.
I do think, however, that the defendant is entitled
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to consideration for his pleas of guilty as to the partial
version of the second superseding indictment. I think the
government got it right and the way the Court handles that is
to consider acceptance of responsibility as a component of any
variance that the Court may give in connection with the motion
that has been filed.
Bottom line, as to the acceptance of responsibility,
the Court overrules the objections that have been made to the
failure to give an acceptance of responsibility.
The next paragraph and the next set of objections
relate to the loss amount. The loss amount is set forth in
paragraph 66 as it impacts the sentencing guidelines.
Essentially, the Court does not agree with anyone's calculation
of the guidelines loss amount. It's clear that there is no
loss resulting from the mortgage fraud. I don't think anyone
has argued to the contrary. The issue is as to the loss amount
from the loan. The amount of the loan was a little bit in
excess of $2 million and that's the amount the government
contends is the intended loss. The guideline provision section
2B1.1 is pretty clear. I've not heard any legal dispute as to
the law to be applied. The government has the burden of
proving that the loss amount is a certain amount. That burden
is by a preponderance of the evidence. The loss amount that's
appropriate is either the actual loss or the intended loss.
The government argues that the amount of the loan is the actual
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loss. Actual loss is defined by the sentencing guidelines as a
reasonably foreseeable pecuniary harm that resulted from the
offense. The Court finds that the amount of the loan is not
necessarily the amount of the actual loss and, in this case, is
not the amount of the actual loss.
The other alternative is the amount of the intended
loss. The intended loss is defined by the guidelines as a
pecuniary harm that was intended to result from the offense.
Again, the burden is on the government.
The third alternative would be, if the Court couldn't
otherwise determine the loss, to use the gains of the defendant
from the offense. No one argues that the third alternative
applies so the Court will not go there.
In calculating the loss amount, the Court concludes
that the intended loss is a proper calculation. The Court
rejects the defendant's argument that the intended loss in this
case was zero. The Court views the evidence to reflect that
the intended loss is as follows:
The Court has looked to the fact that the loan amount
was deposited into the defendant's account at the bank on April
the 14th. That was the amount in excess of $2 million. The
presentence report reports that, shortly thereafter, two days
thereafter, the defendant withdrew $126,000 and that was
transferred to the Target main operating account. I can't tell
from the records with any degree of certainty that that was not
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money used for proper purposes and, therefore, the Court does
not count that $126,000.
Several days later, on April the 21st, the defendant
wired $100,000 to Mr. Adkins to pay a promissory note. That
clearly came from the loan proceeds. That clearly was not a
permitted use of the money, and the Court will include the
$100,000 as a component of the amount of loss.
The next deduction was $3,300. There's virtually no
information in the presentence report as to what that is all
about, therefore, the Court does not consider that.
The next amount is $689,417 that was transferred on
April the 24th that was used to buy the catamaran. Obviously,
that is not a proper use of the PPP funds, and the Court will
include that as a component of the intended amount of loss.
Finally, on May the 7th of 2020, in excess of
$1.1 million was transferred to the main operating account. Of
that, based upon the evidence this morning, $800,000 was used
to pay off or to pay off or pay down a line of credit. That
clearly was not a proper purpose under the PPP, and the Court
will include that $800,000 as part of the intended loss.
In sum, the Court finds that the defendant intended
loss to the bank based upon the PPP loan of the following
amounts: The $100,000, the $689,417 and the $800,000. If my
math is correct, that totals 1. -- well, $1,589,417. While
that's a different calculation than the amount set forth in the
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presentence report, that does still fall within the plus 16
category and, therefore, although I arrive at that figure a
little bit differently than anyone else, the Court overrules
the objection and will adopt the plus 16 as set forth in
paragraph 76.
Paragraph 77 relates to sophisticated means. Here,
the allegation of sophisticated means relates to the 39
identification cards for alleged employees that was obtained
after the defendant obtained the loan from the bank. The
requirement for a sophisticated means talks about extraordinary
conduct in furtherance of the offense and that the defendant
intentionally engaged in the conduct.
The false identification cards representing what I
find to be fictitious employees, I think, was certainly
relevant to the case, but I do not find that it was
sophisticated conduct within the meaning of the sentencing
guidelines. So, therefore, the Court finds that the government
has not established the sophisticated means and would deduct
the plus two from the sentencing guidelines in paragraph 77 of
the presentence report.
Paragraph 78 is related. It increased the guidelines
by two based upon five or more means of identification. The
identification are the 39 fraudulent Social Security or
resident cards here. The obligation of the government is to
prove, among other things, that these were actual people and
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not fictitious individuals. Also, the government has to prove
that the documents were unlawfully made from another means of
identification.
The Court finds the government has not established
either of those requirements. It's clear to the Court that the
government's theory and that the evidence shows these were
fictitious people. They are not real. The application
required the persons to be actual persons. The Court finds
that this enhancement simply does not apply under the facts of
this case. Accordingly, the Court would sustain the objection
to paragraph 78 and would delete the plus two set forth in the
guidelines.
The final one is paragraph 84, the obstruction of
justice enhancement, which is currently a plus two. The
government must show that a defendant wilfully obstructed or
impeded, or attempted to obstruct or impede, the administration
of justice in order for this enhancement to be applied. The
basis for the enhancement that is currently before the Court
are the two statements made in the letter of September 21st of
2020 from defense counsel to the government responding to a
Grand Jury subpoena.
The Court has difficulty in this particular case
imputing the contents of the letter to the defendant. That's
not to say that the statement of attorney is never or can never
be imputed to his or her client, but in this case, the Court
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does not find sufficient evidence to impute the letter by the
attorney and the contents of the letter to the defendant and,
obviously, the obstruction of justice requires that the
defendant personally and wilfully obstruct justice. The Court
finds that that has not been shown here.
Also, the Court is not satisfied that the government
has established by a preponderance of the evidence that the
statements, even if they are, indeed, false, as the government
contends, cause the government to take any significant extra
steps in investigating. Obviously, the posture of the case at
the time was that a complaint had been filed against the
defendant, he had been arrested, but the investigation was not
over, as we know, because the letter was in response to a Grand
Jury subpoena and was pre-indictment. The Court accepts the
proffer of the government attorneys as to what they did
thereafter. The Court finds, however, that they have not
satisfied the preponderance of the evidence standard suggesting
that their investigation was actually obstructed or it was done
with the intent to obstruct. The Court, therefore, will delete
the plus two from paragraph 84 of the presentence report.
All right. Based upon that, the Court's calculation
of the guidelines is as follows:
The base offense level remains at seven. The loss
amount is increased by a plus 16. The plus two for the $1
million in gross receipts in paragraph 79 remains and the plus
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one in paragraph 81 also remains. Again, if my math is
correct, that creates a total offense level of 26. The
defendant's criminal history remains a category I. That
results in what range?
PROBATION OFFICER: Sixty-three to 78 months.
THE COURT: Is there is any change in supervised
release?
PROBATION OFFICER: No, Your Honor.
THE COURT: And how about fine range?
PROBATION OFFICER: The fine would change to $25,000
to $4,250,000.
THE COURT: All right, Mr. Waid and -- Mr. Waid.
MS. WAID: No offense taken.
THE COURT: I'm looking at your client. But, anyhow,
Mr. Crowther and Ms. Waid, if you'd come on back to the podium
for me, please?
Mr. Crowther, you've heard the sentencing guidelines
range that I computed. Let me go through it and summarize it
once again for the record.
The total offense level is 26. The criminal history
calculation is category I. The range of imprisonment is 63 to
78 months. The range of supervised release is two to five
years as to count one, two, five, and six and is one to three
years as to counts three and four. The restitution is
$2,068,700. The fine range is $25,000 to $4.25 million and the
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special assessments, which are mandatory, total $600.
Is there any victim present in the courtroom who
wishes to address the Court? Does the government know?
MR. REICHLING: I don't believe so, Your Honor.
THE COURT: I'm sorry, you say you do or you don't?
MR. REICHLING: I said I do not believe so, Your
Honor.
THE COURT: All right. I know we had someone from
the bank here that is still here from this morning.
Anything you'd like to address the Court about?
MR. CHEFFER: No, Your Honor.
THE COURT: Thank you.
All right. Ms. Waid, I'd be happy to hear from you
or your client or anyone else with regard to the sentencing.
This would also be the time to discuss your motion that was
filed for a variance.
MS. WAID: Yes, Your Honor.
At the time, we would move for a motion for variance.
Mr. Crowther has actually prepared a statement that we would
like to provide to the Court, if the Court would allow.
THE COURT: Say that again.
MS. WAID: I said we -- Mr. Crowther has prepared a
statement --
THE COURT: Oh.
MS. WAID: -- for the Court, if the Court would allow
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him to say -- speak.
THE COURT: Surely.
Mr. Crowther, I'd be happy to hear anything you have
to say, as you or anyone else may address the Court.
I should say I have received a number of letters of
recommendation. I think 13 at last count, but I'm not sure. I
have read all of those as well. And Mr. Crowther also sent a
letter, which I have read.
MS. WAID: And, Your Honor, if we may submit a final
exhibit, which is just a psychiatric report regarding substance
abuse issues that Mr. Crowther has been going to counseling
for.
THE COURT: Sure.
MS. WAID: For the record. Thank you.
THE COURT: Have you shown it to government counsel?
MS. WAID: We have.
THE COURT: All right. And did you want that just
read by the Court or as an exhibit?
MS. WAID: Just read by the Court is fine, Your
Honor.
THE COURT: Do you want me to read it first or listen
first?
THE DEFENDANT: You can read it first, Your Honor.
THE COURT: I'm sorry?
THE DEFENDANT: You can read it first, Your Honor.
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THE COURT: All right, thank you. Give me a minute
then.
(Pause.)
THE COURT: All right, thank you. I've read the
report by Dr. Bryant.
THE DEFENDANT: Thank you, Your Honor.
Your Honor, I have drafted a statement. I've spent a
couple days drafting this. I'd like to talk to the Court
openly. And then, afterwards, if I could speak to the
employees of Target Roofing and address them specifically, if I
could walk away from the stand and address them, would you
allow that?
THE COURT: Briefly.
THE DEFENDANT: Okay.
THE COURT: Go ahead.
THE DEFENDANT: Thank you.
Your Honor, thank you for letting me address this
Court. In the interest of this Court's time, I will be brief
and follow my notes.
Before my trial, I pled guilty to mortgage fraud
charges and I accepted full responsibility for giving false
statements to a lending institution. I had a duty to provide
accurate information when providing documentation to Angel Oak
Mortgage Company. Instead, I manipulated bank statements in
order to expedite the process. I apologize for making such a
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rash and reckless decision. It was wrong and I am beyond
ashamed of my actions and will never make these same mistakes
again.
Later, a jury of my peers found me guilty of misusing
PPP program money during the COVID-19 pandemic. I have spent
many hours reflecting on what I should have done differently to
avoid this outcome. I had a duty and an obligation to take
care of my employees and carefully consider their concerns and
their survival of the company. I've recognized now that it was
a privilege to own that company and an opportunity, as well as
a duty, to ensure their livelihoods. Together, as a team,
we've moved mountains to build a successful and respectable
company we could be proud of. However, I alone am responsible
for my actions and the eventual results. I will use my time
during the consequences mandated by this Court to improve
myself so that, one day, I may, again, move mountains and make
things right for the people of Target Roofing, this community,
and any potential victims who have felt impact from my actions.
I am a proud American citizen, and I understand that
I am to obey the law. I respect the jury service and humbly
submit to the judgment of this Court. I will do whatever it
takes to make amends and fulfill my obligations to the United
States judicial system. My family, employees, and community
trusted me to use good judgment and make wise choices. As I
stand here today, it proves that I failed them. The
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consequences of my actions will follow me, my family, and my
employees for the rest of our lives. I wish that I could undo
the past and I've spent many sleepless nights dwelling on how
my actions impacted so many lives, but if I am to make amends,
I must face the future and the ramifications it holds. I am
deeply sorry to all those lives who have been affected because
of my poor decisions. I will never forget the lessons I've
learned during this legal process. I am proud that this
country offers a second chance to those who earn it. I've
always been a believer in second chances, and many of the
Target Roofing employees were benefactors of that philosophy.
I now humbly ask this Court to now offer me a second
chance and I am determined to prove worthy of that second
chance. In business, I learned it was very important to accept
responsibility. Further, I stand here today also ready to
accept my consequences. People will remember you not for your
mistakes, but for how you make good on them. In the years
ahead, I'm committed to using my story to help other people
avoid having to stand here before you in my shoes.
To close, Your Honor, I wish to thank you and this
Court for an opportunity to address you, and I want to assure
that I will never, ever return to another courtroom as a
defendant again.
At this time, would you mind if I address the Target
Roofing employees?
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THE COURT: As I said, you may do so briefly.
THE DEFENDANT: Thank you.
I appreciate every one of you coming here today and
supporting me. I have not always deserved that. You guys are
just as much part of my family as my wife and children. Some
of you I've worked with for over 20 years. The most painful
thing I've ever felt in my entire life is the suffering that I
have caused this Target Roofing family. I remember sitting at
each of your offices talking about how we were going to build
the greatest roofing company ever. I remember the dreams each
one of you had, the conversations each one of us had, the
camaraderie, the team. I could not have done any of this
without this team, without many of you.
As a team, we came up with core values that we all
strived to live. We knew if we lived by these values, it would
make Target Roofing great. Those values were we work hard, we
care, and we always do the right thing. I didn't always do
those things. I made serious mistakes. I apologize I let this
Target Roofing family down. I love you guys. Thank you.
MS. WAID: Your Honor, I think Casey said everything
that was the most important, but I would just like to reiterate
a few of the points regarding this case.
I was struck by the letters of support that were
submitted on Casey Crowther's behalf. It showed that he's a
good husband, a good father, a great boss, a really good
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friend, and a phenomenal businessman. He didn't lead the
easiest of lives, and that's something that I think is
extremely important because the perception is that he did lead
a pretty gifted life, but he had a very, very difficult
childhood and he overcame that with hard work. Since the day
he was 14, he's taken a job. And with sweat and guts and
tears, he has actually built a company that had over 200
employees by the age of 35 and that's pretty, pretty
impressive. And, by all accounts, he's a good businessperson.
And, by all accounts, the employees needed this job.
We would ask to move for a variance of time served
with some type of work release and home detention in order to
help his business survive. Mr. Crowther moved Target Roofing
to his home residence. He works out of there. His employees
work out of there. He wants the ability to make Target as
successful as it was in years prior. He wants the ability to
pay back restitution and he wants the ability to make it up to
his employees.
The other thing that I would like to point out to the
Court is that, not only in the letters of support was Casey
actually depicted as a good person well before that, but he
continues to strive to be a better person. He's always been on
charity boards, the volunteer work as a football coach and a
baseball coach. He actually helps this community. He is an
asset to this community. And, even after his arrest, he
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continued to do those things. It really impressed me the
letter of support from the 28 football parents who actually
stood behind Casey and said that these charges don't matter,
you motivate our kids, you're good for our kids, you're a great
role model for our kids, and I think that made a really lasting
impression on me. I hope it made a lasting impression on the
Court.
Casey's continued to try to better himself during
this time of thoughtfulness. He's actually seeking counseling
for alcohol abuse treatment. He's worked daily with the bank
in order to mitigate the risk by selling off his -- by selling
off his building and paying down that line of credit and paying
off mortgages. He continues to work with the bank to mitigate
any further risk.
He also took a proactive stance, and I think that
goes directly to his moral character of what we were discussing
before. He's a fighter and, against all odds, he continues to
actually become a better person and be introspective. And one
of the things he did proactively after being arrested was to
actually figure out how he could assist other people in the
Bureau of Prisons. And I had this in my sentencing memorandum.
I'm not sure if the Court was able to see that, but there is
actually a website where Casey actually went and he made
educational forums in order to help prisoners gain critical
skills that they will need upon their release from prison.
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And, again, I think that speaks to his proactive character, but
it also speaks to the person that he is. It's not everybody
who would take that upon themselves and do that for the
betterment of others and not just himself. But the letters of
support and the testimony that we actually heard at trial,
actually, that is who Casey is. When there's a hurricane, he
is proactive. He's not a person who just sits back and donates
money. He gets in his truck and he drives and he puts roofs on
houses and helps people whose homes were completely destroyed.
He helps veterans who can't afford to get new housing. When
the Bahamas hurricane struck, I know, yeah, I actually
volunteered and put -- you know, gave water and food. Casey
actually got a plane and went to the Bahamas and he actually
delivered those supplies. And then he opened his home to a
person in the Bahamas whose house had been destroyed and made
her part of his family because that is who he is.
During this global pandemic, Target Roofing actually
did employ the family members on to come and they actually
gathered food, pallets of food, to feed this community because
he loves this community. He's an integral part of this
community and he's an asset to this community. They fed so
many people from food banks and beyond during a pandemic
because that's what he wanted to do because that's actually the
core person that he is. He's a good person.
I also think I need to talk a little bit about kind
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of the disparities and the difficult -- or the stark contrast
between this case and the other PPP cases that we've seen. In
stark contrast, in this case, Mr. Crowther actually had a
legitimate business, legitimate employees. Target Roofing
qualified. He actually worked during the entire pandemic.
They put in COVID regulations, they put in different safety
measures, but they worked this entire time and they actually
would reduce the project prices in order to be able to hire
more people and to put people back to work in this community.
They also paid their employees, and that is in stark
contrast to the majority of the other PPP loan cases where they
were just straw companies, blatantly fraudulent, fake
employees, there was no work, it really, truly was -- the only
cases that I've been found that have been charged have been
cases where they're so egregious. Eighteen loan applications,
PPP loan applications, in United States v. Tarik Jaafar in the
Eastern District of Virginia, he received 12 months. He
submitted 18 PPP loan applications all on fraudulent premises.
There was no companies; there was no employees; and then he
tried to flee. He got 12 months for that.
And the list goes on in the sentencing memorandum,
but 24 months for two PPP loan applications seeking $10 million
and $3 million respectively, 250 fake employees. The defendant
did not pay payroll with funds received.
Latoya Stanley and Johnny Philus, Southern District
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of Florida, 18 and 30 months respectively. They filed four PPP
and EIDL loan applications. They resurrected defunct
corporations. They had over 70 credit cards in fake people's
names. They did not pay any payroll.
Julio Lugo received 42 months. He submitted at least
70 false and fraudulent loan applications seeking PPP and EIDL
funds, requested more than $5.8 million. They, again, spent
that on luxury vehicles, casinos, and other personal purposes.
They did not have any real employees. They did not pay any
payroll with those funds.
And Nadine Consuelo Jackson from the Southern
District of Ohio who received 24 months. She applied for two
different loans, 1.3 and 1.2, as well as an EIDL. Submitted
false wage and tax reports. False tax returns to the bank.
Everything that was submitted on behalf of Target
Roofing in order to get this PPP loan was actually legitimate
payroll, was legitimate numbers based upon different
calculations. Target Roofing was eligible for this PPP loan.
That is in stark contrast to the other PPP cases that I've been
seeing charged nationwide. And the fact that Mr. Crowther
actually cares about his employees, paid his employees,
continues to try to keep his business afloat is in stark
contrast to all these other cases, which received no more than
I could find 24 months or below.
We would ask the Court for a variance. We'd move
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this Court for a variance. We're asking for time served with
some type of home release so that Mr. Crowther can continue to
grow Target Roofing; he can continue to try to move those
mountains; he can pay his employees; he can pay his vendors; he
can pay his suppliers; he can pay back the bank. And we think
that that is the most important thing for Mr. Crowther to do so
that he can continue to be a valuable member of society, one
that his family needs, one that his employees need, but also,
the kids who he mentors.
We request that and respectfully ask for it. Thank
you for your time, Your Honor.
THE COURT: All right, thank you.
From the government?
MR. REICHLING: Yes, Your Honor.
Your Honor, the government would certainly oppose any
granting of a variance, especially a variance that would
incorporate a sentence in this case that would include time
served.
I'd like to at least address the cases that the
defense points to in support of what they're asking for in a
sentence in this case in assessing the disparate sentences
throughout the country. I think it's important to just note a
few of these differences between the cases that are cited in
the defendant's sentencing memorandum and what these cases were
about.
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The four cases, I believe, that the defendant
includes -- it may be actually five, but I know that, for all
four to five of these cases, all of these defendants waived
indictment and cooperated with the government and entered plea
agreements after they were arrested. None of these individuals
contested the facts of the case nor did any of them go to
trial. They all accepted responsibility close thereafter being
arrested.
The one case that I just would like to correct for
the record, and this may have been a mistake on behalf of
Ms. Waid, but the United States versus Julio Lugo and Rosenide
Venant case that's highlighted on page 16 of the sentencing
memorandum is actually a case that hasn't been formally charged
yet. It was -- it involved -- it hasn't been indicted or there
hasn't been a waiver of indictment yet in that case. It's
simply a case that's pending under a criminal complaint. There
has not been a sentence in that case. That is a Middle
District case out of Tampa. That was a recent arrest. I don't
know where the 42 months of imprisonment came from, but those
individuals have not been sentenced in that case.
I would like to at least bring to your attention,
Your Honor's attention to other PPP fraud cases, one of which
that was recently sentenced in the Southern District of Florida
in May of this year, on May 12th of 2021, that did involve an
individual who did plead guilty, that did waive indictment, and
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did enter a plea agreement, and that was United States v. David
Hines. And the case number in the Southern District of Florida
is 1:21-cr-20011. This case got a lot of media attention
because the defendant purchased a Lamborghini with PPP funds
and, while he did not have a business that had the amount of
employees that warranted the amount of PPP funds in that case,
he was given a term of imprisonment of 78 months as well as
three years of supervised release. I think that is a recent
sentence regarding Paycheck Protection Program and fraud
regarding that program that the government believes the Court
should take into consideration.
There's also a case out of the Eastern District of
Virginia, United States v. Joseph Cherry, where, again, a
defendant pled guilty, entered into a plea agreement, and was
given 51 months of imprisonment. And that was back in 2020, I
believe.
So there are other instances in which other
defendants who have pled guilty, have not gone to trial, have
cooperated with the government, and have received sentences
that total, you know, more than 40 or 50 months. The
government does believe a guideline sentence is warranted here.
It believes that the facts of this case, as Your Honor heard
enough of in trial, specifically with the PPP fraud counts,
warrants a guideline sentence.
This was an instance -- and Your Honor has presided
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over a ton of cases and certainly plenty of white collar cases,
but fraudsters take advantage of vulnerable situations, and
that's really what the defendant did here. He exploited a
program that was created to get businesses out of a global
pandemic and it was a program intended to keep American workers
employed. It wasn't a program intended to go into the pockets
or to line the pockets of wealthy business owners. And I think
this was a situation here, Your Honor, where the defendant did
just that.
Now, government does not -- agrees with the defense.
There's no evidence that the defendant created a fictitious
company. But, on the other side of the coin, Your Honor, is
it's the government's belief that the defendant took advantage
of the resource he had, which was payroll with a company to
qualify for a loan. None of those loan funds ever went to, at
least 18 -- you know, 17 -- 1.7 and $1.8 million of that money
never went to the intended recipients of the Paycheck
Protection Program, which were the employees of Target Roofing.
This wasn't a loan made to Casey Crowther. This was a loan, a
forgivable loan, made to Target Roofing. And, while the
government certainly respects the fact that the defendant is
now thinking over his actions and what those actions have led
to with this company, those are things that Mr. Crowther should
have been considering when he wired over $600,000 to Sara Bay
Marina to buy a 40-foot catamaran boat. There are certainly
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consequences for those actions that the defendant took and the
government believes that a guideline sentence is appropriate
given the actions of the defendant.
Not to mention, of course, the -- in furtherance of
the fraud, as we've gone over again and again here today,
addition of fake employees, adding family members to the
payroll, paying them just under the $100,000 a year annual
prorated salary. And the evidence at trial was they were never
seen, they never worked there. These are things that the
defendant did and decisions that he made which furthered his
scheme to defraud that the government believes warrants a
guideline sentence.
Now, Your Honor did not hear much of any evidence
about the mortgage fraud case. And, although the focal point
of this sentencing is likely the PPP fraud, it's important for
Your Honor to at least consider that the defendant engaged in
two separate fraud schemes. The first, of course, was the PPP
fraud. The second was this mortgage fraud scheme. That was
almost prompted by the PPP fraud. The defendant got the PPP
loan funds in the middle of April. He entered into a contract
to purchase a $1.3 million house in the middle of May. And he
then falsified numerous bank statements and a screenshot
printout from his online account records to hide the fact that
the defendant did not have liquid assets to cover the down
payment of a home in hiding the fact that he had to borrow or
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pull from $150,000 line of credit, $150,000 from his Target
Roofing line of credit, to fund his purchase of his own
personal house. Not for Target Roofing but for himself, a
$1.3 million house. These are two separate fraud schemes that
I believe should factor in this Court's decision in fashioning
the appropriate sentence.
Certainly, the government respects the fact that the
defendant has -- is on charity boards or that he volunteers his
time coaching football, but that doesn't preclude someone from
committing a crime. As Your Honor knows, I'm sure, over the
course of your time as a judge, you've seen plenty of
individuals who do good things for the community but also
commit crime as well.
For those reasons, Judge, we believe that the
appropriate sentence in this case is a guideline sentence. I
believe it reflects the seriousness of the offense. This was
a, like I said, like the government has said, this is a
government program intended to benefit small businesses that
needed to handle shutdowns implemented by local governments and
couldn't allow services to be provided and needed to fund
payroll and that's -- and that's really -- that's a serious
offense in the government's mind because John Miller in the SBA
testified that banks were given the -- greenlighted to begin
loaning money under the Paycheck Protection Program on April 3,
2020. By April 16, 2020, the $349 billion that congress
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allocated under the CARES Act for the PPP program was gone.
Within two weeks, that money was gone. $2 million of that
money went into the defendant's pocket and was spent on boats,
paying off debts, paying down lines of credit. None of that
went to the true intent of this government program, which was
to weather -- allow businesses to weather themselves during a
global pandemic.
So the government does believe a guideline sentence
is warranted here. We'd also ask Your Honor impose a term of
supervised release of three years. We have discussed
restitution. We ask that restitution be a condition of his
supervised release or be incorporated in Your Honor's sentence.
And we would also ask that Your Honor incorporate your
preliminary and final orders of forfeiture in your judgment and
sentence.
Thank you.
THE COURT: Two questions, if I may.
MR. REICHLING: Yes, Your Honor.
THE COURT: What do you propose the Court do with
regard to the variance motion in light of the defendant's
guilty plea to two of the counts? I think Mr. Leeman had said
the Court has the authority to handle the acceptance in a
variance as opposed to a sentencing guideline adjustment. What
do you suggest the Court do here?
MR. REICHLING: While Your Honor can, obviously, take
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it under consideration, and I agree with Mr. Leeman's position
on that, I really do not believe, given the fact that there
were two fraud schemes here that were committed close in time
with one another, that even a two-level variance for acceptance
of responsibility on the mortgage fraud is warranted given the
defendant's criminal conduct. I'm not saying Your Honor can't
do it, of course. Your Honor can do whatever Your Honor wishes
to do, of course. But the government believes that the current
guideline range, which is 63 to 78 months, a sentence within
that range would be appropriate given the offenses committed by
the defendant.
THE COURT: The other thing is the restitution. Talk
to me a little bit about restitution. I know I've stated the
amount --
MR. REICHLING: Yeah, uh-huh.
THE COURT: -- several times now. And it seems to me
I remember either reading or hearing at trial that the amount
wasn't due yet to the bank and --
MR. REICHLING: That's correct. I mean, the Paycheck
Protection Program, which, of course, the repayment periods and
things of that nature have been amended subsequent to the
defendant's indictment. He has not been -- what am I trying --
the word I'm looking for?
The bank has not sought action regarding his ability
to pay the loan at all yet. It hasn't technically come due or
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the determined period of time in which it needs to be paid has
not begun.
The government's concern, Judge, is that, you know,
the defendant is looking at a significant period of
incarceration and we -- the government doesn't know or even
believe that the defendant will repay a large portion of that
loan amount to the bank. Given that concern, if the bank were
to, say, seek the honoring of the agreement with the SBA to pay
for the loan because the defendant's in default perhaps, then
the SBA or the government has to fund or repay or pay the bank
its loss in this case. So we believe that ordering
restitution, even though the loan is technically not due yet or
he's not been defaulted on the loan, is appropriate because, at
the end of the day, if the bank is not made whole, the
government has to come in and honor the loan agreement
between -- or the arrangement between the SBA and the bank to
cover that loss. And so that's why we believe restitution is
warranted here.
THE COURT: And how do I do that? Do I impose
restitution to begin at the same time it's due to the bank?
MR. REICHLING: If you can give me one moment, Judge.
Let me ask brighter minds than mine and ask what the best
response to that question would be just so I can make sure.
THE COURT: Sure.
(Pause.)
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MR. REICHLING: Your Honor, we believe that the
restitution should be ordered now. If the defendant were to
begin to make payments towards the loan, say, now, he can
notify the Court and get credit towards his restitution
obligation as a part of his sentence. So that's sort of the
government's thoughts on how to proceed on the restitution
issue.
THE COURT: When is he scheduled to start payments to
the bank, everything else being equal?
MR. REICHLING: I do not know that answer.
Maybe Mr. Cheffer can chime in.
MR. CHEFFER: October, Your Honor.
MS. WAID: Your Honor, that's our understanding, too.
It's October 2021 is when the loan payments actually become
due.
THE COURT: All right. And how long do the payments
continue for?
MR. CHEFFER: Well, there's an option to extend it
either over five years or two years. And it's from the
inception of the loan. So it's only going to be about a
four-year payout, which he won't be able to do if he's not
here. And we've been working with the SBA, Your Honor.
THE COURT: Thank you.
All right, thank you.
MR. REICHLING: Yes, Judge.
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THE COURT: Ms. Waid, anything further?
MS. WAID: Nothing, Your Honor.
THE COURT: If you and your client would come on back
to the podium for me, please?
(Pause.)
THE COURT: Mr. Crowther, is there anything else
you'd like to say?
THE DEFENDANT: No, Your Honor.
THE COURT: Let me ask you just a few questions.
Stop losing my microphone, that might help.
I've read, as I said, the report from the doctor and
that deals largely with some alcohol and drug issues. Are you
currently under the influence of any drugs or alcohol?
THE DEFENDANT: No, Your Honor.
THE COURT: Have you understood what's happened here
today?
THE DEFENDANT: Yes, Your Honor.
THE COURT: All right. Mr. Crowther, the Court is
required to consider all the factors in Title 18 United States
Code Section 3553 in determining what sentence is appropriate.
Your attorney has filed a substantial memorandum in which she
sets forth her analysis of each of the factors. I've read that
and accept that as her view.
Deciding the sentence to impose on a person is, in my
view, one of the hardest things a judge has to do. It's,
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obviously, personal and, in fact, affects not only the
defendant, but other persons. And your situation is no
different.
The factors that the Court has to consider and has
considered, I've considered all of them, but I don't intend to
discuss all of them because they're not really material in your
case, but almost all of the factors are favorable. You have no
criminal history to speak of; you have substantial ties to the
community; you have a history of employment. The problem in
your case is the facts of the case and whether it's an
aberration or not. You know, in connection with the mortgage
loan and the PPP, you did some things that either you admit
were wrong or a jury has found to be wrong. I concur with both
the jury's verdict and your plea of guilty, and there has to be
consequences to that.
As I suggested earlier, while I do not find that
you've accepted responsibility within the meaning of the
sentencing guidelines, I do find that you should be given
consideration in connection with the variance for your plea of
guilty. I do intend to grant your attorney's motion for a
variance, although, I do not intend to grant it to the extent
that she has requested.
After considering all the factors, all the letters
that I've written as well as what you've said in addition to
the facts of the case that I heard at trial, it's the judgment
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of the Court that you be committed to the custody of the Bureau
of Prisons to be imprisoned for a term of 36 months. As to
each count, those terms will run concurrently with one another.
You will also be placed on a term of supervised release for
three years as to each count. Those terms also will be served
concurrently with one another. You will be required to pay
restitution in the amount of $2,068,700.
With regard to a fine range, the Court is, based upon
your financial condition and the restitution obligations, not
going to impose a fine in the case. You will be required to
pay the mandatory special assessments. Those total $600. The
Court will include in the sentencing judgment the restitution.
I'm sorry, the forfeiture consistent with the preliminary order
of forfeiture that I entered within the last several days.
With regard to recommendations, the Court would
recommend that you be allowed to participate in any and all
drug programs while in custody of the Bureau of Prisons. They
have what's generally referred to as a 500-hour program. The
Court would specifically recommend that you be allowed to
participate in that program if and when you're eligible to do
so.
Counsel, any other conditions or recommendations
anyone wants me to consider?
MS. WAID: Yes, Your Honor. The defendant was
actually asking if he could be housed in Pensacola. He's got
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family up there.
THE COURT: I don't control where you get housed.
I'll hear from the government. I don't have any objection to
making recommendation of that.
Any reason from the government or any objection to
that?
MR. REICHLING: No objection, Your Honor.
THE COURT: The Court would recommend that the
defendant be housed in the federal facility in the Pensacola,
Florida area to be close to relatives in that area.
MS. WAID: Thank you, Your Honor.
Mr. Crowther just wanted to take one minute, Your
Honor, to -- he had to look something up, if that's possible.
THE COURT: Sure.
THE DEFENDANT: Thank you, Your Honor.
(Pause.)
THE COURT: I do need to add some special conditions
to the supervised release I've imposed, but we'll give you a
chance to read whatever it is you're looking at.
MS. WAID: Thank you, Your Honor.
(Pause.)
MS. WAID: Your Honor, I'm just -- I apologize for
delay. I was just reading a memorandum from the program RDAP,
and they're actually asking for the 37-month sentence instead
of a 36-month sentence.
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THE COURT: I'm sorry, say that again.
MS. WAID: They're stating that a 37-month sentence
would actually be more beneficial via the RDAP program instead
of a 36-month sentence. That's what Mr. Crowther has just
provided me.
THE COURT: Oh. So --
MS. WAID: Are you requesting 37 months?
THE COURT: So you want me to increase the sentence
I've imposed to 37 months?
MS. WAID: Yes, please, Your Honor.
Sure about that?
THE COURT: Mr. Crowther, is that what you want?
THE DEFENDANT: Yes, Your Honor.
THE COURT: I mean, I don't know what memorandum
you're looking at, but I've only had one other defendant ask
for a longer sentence, which I granted, but --
THE DEFENDANT: Your Honor, I discussed with the
gentleman who received the RDAP program who is in the same
counseling class as myself and he told me that the RDAP
program, based off of how long you're in there, is how the
program ends up working out and he gave me only a few words of
advice and one of them was that, if you get a 36-month
sentence, that the RDAP program becomes more beneficial for a
alcoholic than a 36-month sentence, Your Honor.
THE COURT: Well, I'm tentatively willing to do that,
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but you need to understand if, for some reason, that person's
advice is wrong, don't be coming back to me and asking for a
lesser sentence.
THE DEFENDANT: Your Honor, I understand.
THE COURT: Okay.
Any objection from the government?
MR. LEEMAN: I have had this situation happen before,
Your Honor. It didn't turn out well. I do think it's prudent
to advise him. I don't even believe it's necessarily ensured
he will qualify for the RDAP program. It may be. It may not
be. That's up to the Bureau of Prisons. And we also had this
issue -- I know the government has requested a sentence which
was over the 36 months, but it strikes me -- I don't know how
we get around we're, essentially, making a sentence up not
advising the 3553(a) factors and that gives me some pause.
So, obviously, the government's not trying to limit
any programs that Mr. Crowther could get into, but it's really
not something the government feels comfortable with, increasing
someone's sentence because they ask for it in the hopes they
get some type of a program that they heard from someone may be
better, so we don't support it, Your Honor.
THE COURT: So you wanted me to give him 63 months,
but you object now to 37?
MR. LEEMAN: Yeah. Not trying to be funny, Your
Honor, but I just -- the government's not comfortable with the
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idea of playing with the time of a sentence to -- not playing
with, but moving the time of a sentence to potentially get
Mr. Crowther into a program that none of us are very capable of
speaking of. And, even if we can speak, it's up to the Bureau
of Prisons whether he gets placed into it or not. And so we
don't support it. If it's 37 months, it's 37 months, but we're
not in support of it.
THE COURT: All right.
MS. WAID: Mr. Crowther's comfortable with his
decision, Your Honor, and he would request 37 months.
THE COURT: All right.
Mr. Crowther, you heard -- I mean, Mr. Leeman is
right, in large regard, that nothing I do can guarantee that
you're going to be accepted in the program. You may or may not
be. And, also, changing your sentence from 36 to 37 months may
or may not help your situation. If you think it's helpful, so
be it. But like -- as I think I said, if you're wrong, you're
going to do an extra month and I'm not going to change that.
THE DEFENDANT: I understand, Your Honor. Thank you.
THE COURT: All right.
All right, the Court will change the sentence from 36
to 37 months. The term of supervised release of three years
remains the same. Both the terms of imprisonment and the
supervised release terms will be served concurrently with one
another. I've made my recommendation with regard to the prison
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portion, but I also will add special conditions to the
supervised release as follows:
You will be required to participate in a substance
abuse program, which may be either inpatient or outpatient, and
to follow the instructions of the probation officer with regard
to that condition.
You will be required to contribute to the costs of
that to the extent it's determined you're able to do so and you
will be required to submit to random drug testing not to exceed
104 tests per year.
You will be required also to participate in a mental
health treatment program. Again, that may be the inpatient or
outpatient. And you will be required to follow the
instructions of your probation officer with regard to that
condition. You will also be required to contribute to the
costs of that program.
You will be required to provide the probation officer
with any requested financial information. You will be required
to cooperate with the probation officer in the collection of
DNA. You will be required, as I said, like I said -- I didn't
say it, but you will be required to refrain from the unlawful
use of any controlled substance and will be required to submit
to one drug test within 15 days of placement on supervised
release and at least two periodic drug tests thereafter as
directed by the probation officer. As I indicated, you will be
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required to submit to random drug testing not to exceed 104
tests per year.
You will be required to pay restitution in the
amount, as I said, $2,068,700 to the Sanibel Captiva Community
Bank. That restitution will be paid through the normal process
via payments to the Clerk of the Court for distribution to the
victim.
All right. I may have asked, but is there any
additional condition or recommendation either in connection
with the imprisonment or the supervised release anyone wants
the Court to consider?
MR. REICHLING: Nothing from the government, Judge.
MS. WAID: When would he be required to report, Your
Honor?
THE COURT: Well, that's the next issue. Actually,
it's not the next issue, but we'll get to it.
MS. WAID: Okay.
THE COURT: Counsel, having heard the sentence the
Court has imposed and the manner in which it has been imposed,
are there any objections, first, from the government?
MR. LEEMAN: To the substantive reasonableness of the
sentence, Your Honor, for preservation purposes.
THE COURT: Substantive unreasonableness, I guess, is
what you mean.
MR. LEEMAN: Substantive unreasonableness, yes, Your
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Honor.
THE COURT: All right.
From the defense?
MS. WAID: No, Your Honor. Just so the Court knows,
Mr. Crowther has hired Bill Kent as his appellate attorney, and
I believe he is going to file a motion for release on bond
pending appeal.
THE COURT: All right.
All right, with regard to the defendant's surrender,
any objection from the government to a voluntary surrender in
this case?
MR. REICHLING: No, Your Honor.
THE COURT: The Court will require the defendant to
surrender to the designated facility on or before -- let's see.
I don't have a calendar. What is July 30th, is that a --
(Pause.)
THE COURT: On or before July 30th at noon.
Mr. Crowther, when I say on or before, the Bureau of
Prisons will notify you of the facility. If they set an
earlier date, that's the date you're required to be there. So
it may be some time before July 30th. If for some reason they
have not determined a facility for you by the 30th, your
attorney will know how to get an extension of that surrender
date. I suspect that that will be enough time, but maybe not.
Do you understand?
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THE DEFENDANT: Yes, Your Honor.
THE COURT: In the meantime, between now and the date
of your surrender, whatever the terms of your conditions are
will still apply. So whatever you're doing in connection with
Pretrial Services, you need to keep doing between now and then.
Do you understand that?
THE DEFENDANT: Yes, Your Honor, I do.
THE COURT: All right. Now, Mr. Crowther, I gather
you know this, but let me tell you anyhow. You do have a right
to appeal both the judgment and the sentence in the case. To
do that, you have to file what's called a Notice of Appeal
within 14 days of the entry of the judgment. If you fail to
file a notice of appeal within that 14-day period, you waive or
give up your right to take an appeal. If you wish to appeal,
you have the right to be represented by an attorney and, if you
cannot afford an attorney, the Court will appoint one to
represent you at no cost or obligation to yourself. Ms. Waid
will consult with you within that 14-day period, although it
sounds like she has already. Do you understand what I've said
about your right to appeal?
THE DEFENDANT: Yes, Your Honor.
THE COURT: Any questions about that?
THE DEFENDANT: No, Your Honor.
THE COURT: All right.
Counsel, anything further from anyone?
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MR. REICHLING: Nothing further from the United
States, Judge.
MS. WAID: Nothing from the defense, Your Honor.
THE COURT: All right.
Mr. Crowther, I recommend you check with probation
just to make sure you're all on the same page as to your
requirements between now and then. Good luck.
THE DEFENDANT: Thank you, Your Honor.
THE COURT: And we'll be in recess.
(Proceedings were concluded at 3:19 p.m.)
* * * * * * * * * *
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CERTIFICATE OF REPORTER
UNITED STATES DISTRICT COURT )
MIDDLE DISTRICT OF FLORIDA )
I, Stacey E. Raikes, RMR, CRR, Official Court
Reporter for the United States District Court, Middle District
of Florida, do hereby certify, pursuant to Section 753, Title
28, United States Code, that I was authorized to and did
stenographically report the foregoing proceedings; and that the
foregoing pages constitute a true and complete computer-aided
transcription of my original stenographic notes taken by the
undersigned in the above-entitled matter to the best of my
knowledge, skill, and ability.
I further certify that I am not a relative, employee,
attorney, or counsel of any of the parties, nor am I a relative
or employee of any of the parties' attorneys or counsel
connected with the action, nor am I financially interested in
the action.
IN WITNESS WHEREOF, I have hereunto set my hand at Fort
Myers, Lee County, Florida, this 12th day of August 2021.
____________________________
STACEY E. RAIKES, RMR, CRR
Official Court Reporter
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