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Home Court filings USA v. Thomas - Chad Brandon Thomas USA v. Thomas — U.S. District Court, Eastern District of Tennessee Plea Agreement as to Chad Brandon Thomas — USA v. Thomas (Dkt. 3, E.D. Tenn.)

Court filing

Plea Agreement as to Chad Brandon Thomas — USA v. Thomas (Dkt. 3, E.D. Tenn.)

Filed July 15, 2022 in USA v. Thomas; one of 68 filings from this case.

Record facts

CourtU.S. District Court for the Eastern District of Tennessee
Filed2022-07-15

U.S. District Court for the Eastern District of Tennessee · No. 2:22-cr-00076-JRG-CRW · Doc. 3 · 2022-07-15 · Docket on CourtListener

Full text

UN ITED STATES DISTRICT COURT 
EASTERN DISTRICT OF TENNESSEE 
AT GREENEVILLE 
.J.lll 1 ~- · "Z'l 
UNITED STA TES OF AMERICA 
V. 
CHAD BRANDON THOMAS 
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,.., : !2 2- C,,'f ~ 7, lo 
\Jerk, U. S. District Court 
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Eastern District of Tennessee 
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i\t Greeneville 
JUDGE ot"-l..V" ~n·o✓-
PLEA AGREEMENT 
The United States of America, by the United States Anorney for the Eastern District or 
Tennessee, and the defendant, Chad Brandon Thomas, and the defendant's attorney, L. Dudley 
Senter, Esquire, have agreed upon the fo l lowing: 
I. 
The defendant will \Vaive indictment and arraignment and plead guilty to an 
information charging the defendant \\'ith 1he offense of wire fraud, a violation of 18 U.S.C. § 1343. 
The maximum. statutory punishment for ,this offense is a term of imprisonment of not more than '.2.0 
years, a fine of not more than $250,000, supervised release of not more than three years, a special 
assessment in the amount of$ I 00, forfei ture of assets as set forth below, and restitution to any 
victim of the offense. 
2. 
The United States agrees not to further prosecute the defendant in the Eastern District 
of Tennessee for any other non-tax criminal offenses com milled by the defendant related to the 
charges contained in the information. 
3. 
The defendant has read the information, discussed the charge and possible defenses 
with defense counsel, and understands the crime charged. Specifically. the elements of wire fraud in 
violation of 18 U.S.C. § 1343 are as follows: (I) the defendant knowingly devised a schem e to 
defraud in order to obtain money or property, that is. by submitting fraudulent loan applications 
under the Paycheck Prorw;on Plan ofrhc Comnav;,•us A;d. Rel;e( and~ Security Act 
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(''CARES Act"); (2) the scheme included a material misrepresentation or concealment of a material 
fact; (3) the defendant had the intent to defraud: and (4) the defendant used wire, radio or television 
communications or caused another to use wire, radio or television communications in interstate 
commerce in furtherance of the scheme. 
4. 
In suppo11 of the defendant's guilty plea, the defendant agrees and stipulates to the 
following facts. which satist)' the offense elements. These are the facts submitted for purposes of 
the defendant' s guilty plea. They do not necessarily constitute all of the facts in the case. Other 
facts may be relevant to sentencing. Both the defendant and the United States retain the right to 
present additional facts to the Court to ensure a fair and appropriate sentence in this case. 
Background Information 
At all relevant times. the defendant was a resident of Blountville, Sullivan County. 
Tennessee and was the primary owner, or claimed to be the managing member. of the following 
small businesses that were purpo11edly headquartered and operating in the Eastern District of 
Tennessee: Kingdom of God. Inc. ("KOG"), a Tennessee corporation; C. Thomas Enterprises 
("CTE"), a Tennessee corporation; and The Triangle Group ("TG"). a business alias name for 
defendant doing business as a sole proprietorship. 
At all relevant times, KOG was a Tennessee corporation. According to the Tennessee 
Secretary of State's records, KOO was incorporated as a religious corporation on May 12, 2020, and 
was administratively dissolved on August 11 , 202 1, for failure to file an annual report. The Internal 
Revenue Service has no record of KOG ever submitting Form 941 reports for 2020. The Tennessee 
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Department of Labor similarly has no record of KOG ever having employees or paying wages in 
2020. 
At all relevant times, CTE \.Vas a Tennessee corporation. According to the Tennessee 
Secretary ofState·s records, CTE was incorporated on February 3, 2016, and was administratively 
dissolved on August 11 , 2021, for failure to file an annual repo1t. The Internal Revenue Service has 
no record of CTE ever submitting Form 941 reports for the years 20 I 8 through 2020. The 
Tennessee Department of Labor similarly has no record ofC:TE having employees or paying \vages 
in 2019 and 2020. 
At all relevant times, TG was a purported sole proprietorship operated by defendant. The 
Internal Revenue Service has no record of TG ever submitting Form 941 reports for the years 2018 
through 2020. The Tennessee Department of Labor similarly has no record ofTG having 
employees or paying wages in 2019 and 2020. 
At all relevant times, the Bank of Southern California, N.A. (''BSC") was federally chartered 
bank. BSC was a financial institution as defined in 18 U.S.C. § 20, with deposits insured by the 
Federal Deposit Insurance Corporation. 
At all relevant times. CDC Small Business Finance ("CDCSBF") \Vas a small husiness 
lender and loan origination company that operated in San Diego, California and elscv.-here. 
CDCSBF routinely processed and funded small business loan applications. v.'ith A.CH funding by 
Bank of Southern California. 
Paycheck Protection Program 
The CARES Act is a federal law enacted in or around March 2020 and designed to provide 
emergency financial assistance to the millions of Americans who were suffering the economic 
effecis of the COVID-19 worldwide pandemic. One source of relief provided by the CARES Act 
t<f 
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was the authorization of up to $349 bi Iii min forgivable loans to small businesses for job retention 
and certain other specified expenses, through a program referred to as the Paycheck Protection 
Program ("PPP .. ). In or around April 2020, Congress authorized over $300 billion in additional PPP 
funding for small businesses. The purpose of loans issued under the PPP was to enable small 
businesses suffering from the economic downturn to continue to pay salaries or wages to their 
employees. 
The United States Small Business Administration (''SBA") is an executive-branch agency of 
the United States. The SBA was created in 1953 and is the only cabinet-level federal agency fully 
dedicated to small business. The SBA provides counseling, capital, and contracting expertise as the 
nation ·s resource and voice for small bu ·inesses. The SBA also provides government-backed loans 
through banks, credit unions, and other lenders. The PPP was administered by the SBA. which 
promulgated regulations concerning eligibility for PPP loans. Eligible businesses seeking a PPP 
loan could apply for the loan through a federally insured depository institution or its originators. 
To obtain a PPP loan, a qualifying business had to submit a PPP loan application, signed by 
an authorized representative of the business. The PPP loan application required the business 
(through its authorized representative) to acknowledge the program rules and make certain 
affirmative certifications to be eligible. In the PPP loan application. the small business (through its 
authorized representative) certified, among otherthings its average monthly payroll expenses and its 
number of employees. These figures were then used to calculate the amount of money the small 
business was eligible to receive under the PPP. In addition, businesses that applied for a PPP loan 
had to include documentation showing their payroll expenses and other information as pan of the 
application. 
CJ 
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PPP loan applications were processed by a pa11icipating lender. lf a PPP loan application 
was approved, the participating lender funded the PPP loan using its own monies, but the PPP loan 
was I 00% guaranteed by the SBA. Data from the application, including information about the 
borrower. the total amount of the loan. and the listed number of employees, was transmitted by the 
lender to the SBA while processing the loan. 
PPP loan proceeds had to be used by the business on the following permissible expenses: 
payroll costs, interest on mortgages. ren , and utilities. The PPP allowed the interest and principal 
on the PPP loan to be entirely forgiven i C the business spent the loan proceeds on these expense 
items within a designated period of time after receiving the proceeds and used a certain amount of 
the PPP loan proceeds on payroll expenses. Using proceeds of a PPP loan for consumer goods, 
automobiles. personal residences, clothing, jewelry. to pay the borrower's personal federal income 
taxes. or to fund personal day-to-day living expenses unrelated to the specified authorized expenses 
was not permitted. 
The Scheme to Defraud 
Beginning in or about IV[ay 2020, and continuing through around in or about September 
2020. defendant knowingly and willfully devised a scheme and artifice to defraud, and to obtain 
money and property. by means of materially false and fraudulent pretenses, representations, and 
promises. It was the purpose and o~ject of the scheme for defendant to unjustly c:nrich himself and 
others by obtaining PPP loan proceeds under false and misleading pretenses. including by making 
false statements about the number of individuals his businesses employed, the average monthly 
payroll, and the intended use of the loan proceeds defendant obtained. It was also part of rhe 
~T 
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scheme rhat defendant created false and fraudulent documems. including phony payroll lists and 
Internal Revenue Service ("IRS'') payroll tax forms. 
In total. defendant submitted three fraudulent PPP loan applications. one each for TG. CTE, 
and KOG. All three loans were approved, and each is detailed below. 
Execution <~l the Scheme to Defraud 
On or about May 3. 2020, defendant transmitted by interstate wire from the Eastern District 
of Tennessee to CDCSBF in San Diego, Californin. an application for PPP loan number 
8240047208 on behalf of CTE. CDCSBF received the application on May 3, 2020. As part of the 
application, defendant falsely represented that CTE had six employees and an average monthly 
payroll of $12,470. Defendant also submitted a phony IRS form 941 with the application. In 
connection with the application. defend· nt included an authorization agreement for a one time ACH 
electronic transfer of funds signed by defendant to a Regions Bank account ending in 3903. A PPP 
loan of £31,200 was disbursed to that account on \fay 6, 2020. 
On or about May 18. 2020. defendant transmitted by interstate wire from the Eastern District 
of Tennessee to CDCSBF in San Diego, California, an application for PPP loan number 
3799417406 on behalfofTG. CDCSBF received the application on May 18. 2020. As part of the 
application. defendant falsely represented that TG had six employees and an average monthly 
payroll of $27,600. Defendant also submitted a phony IRS form 941 with the application. In 
connection with the application, defendant inc I uded an authorization agreement for a one time A CH 
electronic transfer of funds signed by defendant to a Regions Bank account ending in 7894. A PPP 
loan of $69.000 was disbursed to that account on May 20, 2020. 
On or about July 6. 2020. defendant transmitted by interstate \-Vire from the Eastern District 
of Tennessee to CDCSBF in San Diego. Califixnia. an application fa loan number 
6 
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64064780 IO on behalf of KOG. CDCSBF received the application on July 6, 2020. As part of the 
application. defendant falsely represented that KOG had 26 employees and an average monthly 
payroll of $83,000. Defendant also submitted a phony payroll listing with the application that 
included minors, family members. and nationally knov,rn religious leaders as purported employees. 
In connection with the application. defendam included an authorization agreement for a one time 
1\Cl-1 electronic transtcr of funds signed by defendant to a Regions Bank account ending in 1974. A 
PPP loan of $207.500 was disbursed to that account on July 14. 2020. 
Loss Amount: 
Defendant stipulates and agrees that the above-described PPP loan applications that he 
submitted contained false statements and fraudu lent documentation and constitute relevant conduct 
for purposes of this plea agreement. 
Beginning on or about May 3. 2020, and continuing through on or about July 14. 2020. 
de fendant submitted the following loan applications, each of which contained matcrially false and 
fraudulent documentation, and caused the follO\.ving losses or intended losses: 
Date of application 
De~ails of Application 
Amount 
May 3, 2020 
PPP loan application on behalf of CTE submitted to 
$31 ,200 
CDCSBF 
May 18, 2020 
PPP loan application on behalf of TG submitted to 
$69.000 
CDCSBF 
July 6, 2020 
PPP loan application on behalf of TG submitted to 
$207,500 
CDCSBF 
TOTAL 
j 
$307,700 
c( 
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5. 
The defendant is pleading guilty because the defendant is in foct guilty. The 
defendant understands that, by pleading guilty, the defendant is giving up several rights. including: 
a) 
the right to be indicted by a grand jury for these crimes: 
b) 
the right to plead not guilty; 
c) 
the right to a speedy and public trial by jury: 
d) 
the right to assistance of counsel at trial: 
e) 
the right to be presumed innocent and to have the burden of proof placed on 
the United States to prove the defendant guilty beyond a reasonable doubt; 
t) 
the right to confront and cross-examine witnesses against the defendant; 
g) 
the right to testify on one's own behalt: to present evidence in opposition to 
the charges, and to compel the attendance of witnesses; and 
h) 
the right not to testity and to have that choice not used against the defendant. 
6. 
The parties agree that the appropriate disposition of this case would be the follO\ving: 
a) 
The Court may impose any lawful term of imprisonment, any lawful tine, and 
any lawfu I term or supervised release up to the statutory maximum; 
b) 
The Court will impose special assessment tees as required by la\v; 
c) 
The Coun may order forfeiture as applicable and restitution as appropriate; 
and 
d) 
Pursuant to Rule I l(c)(l)(B), Federal Rules of Criminal Procedure, and in 
consideration of the terms of this plea agreement and the policy statement set fc)lth in U.S.S.G. 
§ 6B1 .2(b) and related commentary, the United States and the defendant agree and stipulate, and 
agree to recommend at the time of sentencing: (i) the intended loss amount from the offense is more 
than $250,000 but less than $550,000 for an increase of 12 levels und~S.G. § 2B 1.1 (b)( l)(H): 
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and (ii) the defendant engaged in sophisticated means for an increase of two levels under U.S.S.G. § 
2B I. I (b )( I 0). The defendant understands and agrees that the recommendations set forth in this 
paragraph are made pursuant to Rule I l(c)(l)(B) and, as such, are not binding on the Court. The 
defendant further understands and agrees that if the recommendations set forth in this paragraph arc 
rejected by the Court, that rejection may not be used by the defendant as a basis to rescind this pica 
agreement or withdraw the defendant·s guilty plea. 
No promises have been made by any representative of the United States to the defendant as 
to what the sentence will be in this case. Any estimates or predictions made to the defendant by 
defense counsel or any other person regarding any potential sentence in this case are not binding on 
the Court. and may not be used as a basis to rescind this plea agreement or withdra1vv the defendant' 
guilty plea(s). The defendant understands that the sentence in this case will be determined by the 
Court after it receives the presentence investigation report from the United States Probation Office 
and any inlcmnation presented by the parties. The defendant acknowledges that the sentencing 
determination will be based upon the entire scope of the defendant"s criminal conduct, the 
defendanfs criminal history. and pursuant to other factors and guidelines as set forth in the 
Sentencing Guidelines and the factors set forth in 18 U.S.C. § 3553. 
7. 
Given the defendant's agreement to plead guilty, the United States will not oppose a 
two-level reduction for acceptance of re~ponsibility under the provisions of Section 3E 1.1 (a) of the 
Sentencing Guidelines. Further, if the detendant's offense level is 16 or greater, and the defendant 
is awarded the two-level reduction pursuant to Section 3E 1.1 (a). the United States agrees to move. 
at or before the time of sentencing, the Court m decrease the offense level by one additional level 
pursuant to Section 3E 1.1 (b) of the Sentencing Guidelines. Should the defendant engage in any 
conduct or make any statements that are inconsistent with accepting re~f bility for the 
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defendant's offense, including violations of conditions of release or the commission of any 
additional offense(s) prior to sentencing, the United States will be free to decline to make such 
motion, to withdraw that motion if already made. and to recommend to the Court that the defendant 
not receive any reduction for acceptance of responsibility under Section 3E I. I or the Sentencing 
Guidelines. 
8. 
The defendant agrees to pay the special assessment in this case prior ro sentencing. 
9. 
Unless othenvise limited by an agreed preliminary order of forfeiture, the defendant 
agrees to forfeit to the United States immediately and voluntarily any and all assets and property. or 
portions thereoC subject to forfeiture as proceeds of the defendant" s violation of 18 U.S.C. § 1343, 
which are in the possession or control of the defendant or the defendant 's nominees. 
The defendant agrees to forfeit the defendant's interest in the following properties: 
a. 
$161. 938.0 I of United States currency seized from Regions Bank on or about l\1larch 
2, 2022. which represent proceeds the defendant personally derived from the 
violation of Title 18. United States Code. Section 1343. 
b. 
A personal money judgment in the amount of $145.761.99 in favor of the United 
States and against the defendant, CHAD BRANDON THOMAS. which represents 
proceeds the detendant personally derived from the offense of Title 18, United States 
Code. Section 1343. 
The defendant further agrees to assist the United States fully in the identification. recovery, 
and return to the United States of any other assets or portions thereof subject to forfeiture. The 
defendant further agrees to make a full and complete disclosure of all assets over which the 
defendant exercises control and those which are held or controlled by a nominee. The defendant 
agrees to forfeit all interests in the properties as described above and to take whatever steps arc 
necessary to pass clear title to the United States. These steps include, but are not limited to. the 
surrender of title, the signing of a consent decree or forfeiture, and the signing of any other 
documents necessary to effectuate such transfers. The defendant agreeEf1o object to any civil or 
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criminal forfeiture brought against these properties. The defendant agrees to take all such steps to 
locate such propeny and to pass title to the United States before the defendant's sentencing. 
ln the event a money judgment forfeiture is ordered, the Defendant agrees to send all money 
judgment payments to the United States Treasury. Defendant also agrees that the full money 
judgment amount shall be considered due and payable immediately. If the defendant cannot pay 
the full amount immediately and is placed in custody. the defendant agrees that the Bureau of 
Prisons will have the authority to establish payment schedules to ensure payment of the money 
judgment. The defendant fu,ther agrees to cooperate fully in efforts to collect on the money 
judgment by set-off of federal payments, execution on non-exempt property, and any other means 
the United States deems appropriate. The defendant and counsel also agree that the defendant may 
be contacted post-judgment regarding the collection of the money judgment without notifying 
defendant"s counsel and outside the presence of the defendanfs counsel. 
I 0. 
The defendant agrees that the Court shall order restitution. pursuant to any applicable 
provision of law, for any loss caused to: ( I) the victim(s) of any offense charged in this case 
(including dismissed counts); and (2) the victim(s) of any criminal activity that was part of the same 
course of conduct or common scheme or plan as the defendant's charged ortense(s). 
11 . 
Financial Obligations. The defendant agrees to pay all tines and/or restitution to the 
Clerk of Court. The defendant also agrees that the full fine andior restitution amount(s) shall be 
considered due and payable immediately. If the defendant cannot pay the full amount immediately 
and is placed in custody or under the supervision of the Probation Office at any time. the defendant 
agrees that the Bureau of Prisons and the Probation Office will have the authority to establish 
payment schedules to ensure payment of the fine and/or restitution. The defendant further agrees to 
cooperate fully in efforts to collect any financial obligation imposed boourt by set-off of 
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federal payments. execution on non-exempt property. and any other means the United States deems 
appropriate. The defendant and counsel also agree that the defendant may be contacted post-
judgment regarding the collection of any financial obligation imposed by the Court without 
notifying the defendant's counsel and outside the presence of the defendant's counsel. In order to 
facilitate the collection of financial obi igations to be imposed with this prosecution. the defendant 
agrees to disclose fully all assets in which the defendant has any interest or over which the 
defendant exercises control. directly or indirectly. including those held by a spouse. nominee, or 
other third party. In furtherance of th is agreement, the defendant additionally agrees to the 
following specific terms and conditions: 
a) 
lf so requested by the United States. the defendant will promptly submit a 
completed financial statement to the U.S. Attorney·s Office. in a form it provides and as it directs. 
The defendant promises that such financial statement and disclosures will be complete. accurate. 
and truthful. 
b) 
The defendant expressly authorizes the U.S. Attorney·s Office to obtain a 
credit report on the defendant in order to evaluate the defendant's ability to satisfy any financial 
obligation imposed by the Cou1t. 
c) 
If so requested by the United States. the defendant will promptly execute 
authorizations on Corms provided by the U.S. Attorney's Office to permit the U.S. Attorney's Office 
to obtain financial and tax records of the defendant. 
12. 
The defendant acknowledges that the principal benefits to the United States ofa plea 
agreement include the conservation of limited government resources and bringing a certain end to 
the case. Accordingly, in consideration of the concessions made by the United States in this 
agreement and as a fu11her demonstration or the defendant's acceptanQsponsibility for the 
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offense(s) committed. the defendant voluntarily, knowingly. and intentionally agrees to the 
following: 
a) 
The defendant will not file a direct appeal of the defendant's conviction or 
sentence with one exception: The defendant retains the right to appeal a sentence imposed above 
the sentencing guideline range determined by the Court or above any mandatory minimum sentence 
deemed applicable by the Court, whichever is greater. The defendant also waives the right to appeal 
the Court's determination as to whether the defendant's sentence \,viii be consecutive or partially 
concurrent to any other sentence. 
b) 
The defendant will not file any motions or pleadings pursuant to 28 U.S.C. 
§ 2255 or otherwise collaterally attack the defondanrs conviction(s) or sentence, with two 
exceptions: The defendant retains the right to file a§ 2255 motion as to (i) prosecutorial 
misconduct and (ii) ineffective assistance of counsel, 
c) 
The defendant will not, whether directly or by a representative, request or 
receive from any department or agency of the United States any records pertaining to the 
investigation or prosecution of this case, including, without Jim itation, any records that may be 
sought under the freedom of Information Act, 5 U.S.C. Section 552, or the Privacy Act of 1974. 
5 U.S.C. Section 552a. 
13. 
This plea agreement becQmes effective once it is signed by the parties and is not 
contingent on the defendant' s entry of a,guilty plea, If the United States violates the terms of this 
plea agreement, the defendant will have the right to withdraw from this agreement. If the defendant 
violates the terms of this plea agreement in any way (including but not limited to foiling to enter 
guilty plea as agreed herein. moving to \Vithdraw guilty plea after entry. or by violating any court 
order or any local, state or federal law pending the resolution of this cas~n the United States 
13 
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\,vill have the right to void any or all pans of the agreement and may also enforce whatever pans of 
the agreement it chooses. In addition, the United States may prosecute the defendant for any and all 
federal crimes that the defendant committed related to this case. including any charges that \Vere 
dismissed and any other charges which the United States agreed not to pursue. The defendant 
expressly waives any statute of limitations defense and any constitutional or speedy trial or double 
_jeopardy defense to such a prosecution. The defendant also understands that a violation of this plea 
agreement by the defendant does not entitle the defendant to withdraw the defendant's guilty plea in 
this case. 
14. 
The United Stales will fil a supplemem in this case. as required in every case by the 
Local Rules of the United States District Court !'or the Eastern District of Tennessee,' even though 
there may or may not be any additional terms. If additional terms are included in the supplement. 
they are hereby fully incorporated herein. 
15. 
This plea agreement and supplement constitute the full and complete agreement and 
understanding between the parties concerning the defendant ·s guilty plea to the above-referenced 
charge, and there are no other agreements. promises. undertakings. or understandings between the 
defendant and the;: United States. The parties understand and agree that the terms of this plea 
agreement can be modified only in writing signed by all of the parties and that any and all other 
promises, representations, and statements whether made before, conternpuus with. or after this 
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agreement, are null and void. 
By: 
-~1il zc 
Date 
/~ 
15 
FRANCIS WILLIAM HAMILTON IIT 
~ 
STATES A HORNEY 
Mac D. Heavener. Ifl 
Assistant United States Attorney 
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