Plea Agreement — United States v. Chapman (Dkt. 22, E.D. Ky.)

Summary

A plea agreement in United States v. Christopher Chapman, Criminal Action No. 7:24-CR-04-KKC, in the U.S. District Court for the Eastern District of Kentucky, Southern Division at Pikeville, filed August 14, 2024 as Doc. 22. Under Federal Rule of Criminal Procedure 11(c), Chapman will plead guilty to Count 1 of the Indictment, charging Theft of Public Funds under 18 U.S.C. § 666(a)(1)(A). The agreement lists the elements of the offense, including that the organization received more than $10,000 in federal program benefits in a twelve-month period and that property worth at least $5,000 was taken, and then sets out the facts the United States could prove. It carries signature blocks for an Assistant United States Attorney, the defendant and attorney Andy Markelonis.

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Case: 7:24-cr-00004-KKC-EBA Doc #: 22 Filed: 08/14/24 Page: 1 of 8 - Page ID#: 72

                      UNITED STATES DISTRICT COURT
                     EASTERN DISTRICT OF KENTUCKY
                             SOUTHERN DIVISION
                                   PIKEVILLE

CRIMINAL ACTION NO. 7:24-CR-04-KKC

UNITED STATES OF AMERICA                                      .       PLAINTIFF

V.                            PLEA AGREEMENT

CHRISTOPHER CHAPMAN                                                 DEFENDANT

                                   ek ek kk *&

       1. Pursuant to Federal Rule of Criminal Procedure 11(c), the Defendant will enter

a guilty plea to Count 1 of the Indictment, charging a violation of 18 U.S.C. § 666(a)(1)(A),

Theft of Public Funds.

       2. The essential elements of Count 1, 18 U.S.C. § 666(a)(1)(A), are:

             (a) The Defendant was an agent of an organization or agency thereof.

             (b) In a twelve-month period, the organization or agency thereof received
                benefits in excess of $10,000 under a federal program involving a grant,
                contract, subsidy, loan, guarantee, insurance, or other form of federal
                assistance.

             (c) During the same twelve-month period, the Defendant embezzled, stole,
                obtained by fraud, or otherwise without authority knowingly converted to
                the use of any person other than the rightful owner money or property
                that was worth at least $5,000 and that was in the care, custody, or
                control of the organization or agency thereof.

       3. As to Count 1, the United States could prove the following facts that establish

the essential elements of the offense beyond a reasonable doubt, and the Defendant admits

Case: 7:24-cr-O0004-KKC-EBA Doc#: 22 Filed: 08/14/24 Page: 2 of 8 - Page ID#: 73

these facts:

(a) Throughout the period between May 15, 2022 and May 14, 2023, the
Defendant was the Fire Chief of the Blackberry Volunteer Fire
Department (hereinafter “BVFD”), located in Pike County, Kentucky. In
this position, the Defendant was an agent of both the local government of
Pike County and the Blackberry Volunteer Fire Department. During this
time period, the local government of Pike County received benefits in
excess of $10,000 under a federal program.

(b) In 2021, Congress enacted the American Rescue Plan Act (hereinafter
“ARPA”), in part, to support communities and local governments which
were struggling due to the COVID-19 pandemic. As part of ARPA, the
federal government distributed emergency funding to local governments
to maintain vital local services.

(c) In the spring of 2022, the local government of Pike County authorized
distributing a total of $50,000 of funds made available by ARPA in the
form of two $25,000 grants to each fire department located within Pike
County. These grants were called the Pike County Fire/Rescue Recovery
Grants. The funds for the first grant were designated for the purchase of
turnout gear. The funds for the second grant were designated for
equipment and building maintenance.

(d) On April 11, 2022, the Defendant, as the sole organizer and member,
created a company named Rural Public Safety Equipment, LLC
(hereinafter “RPSE”) and registered it with the West Virginia Secretary
of State. The Defendant informed members of the Board of the BVFD
that he could obtain fire safety equipment at cost from a safety equipment
company. He did not disclose he was the owner of the company. As a
result, in April 2022, BVFD began purchasing equipment from RPSE.

(e) On May 8, 2022, as part of his responsibilities as the BVFD Fire Chief,
the Defendant applied for part one of the Pike County Fire/Rescue
Recovery Grant Application to obtain funding for turnout great. On June
16, 2022, Pike County Fiscal Court issued a $25,000 grant to BVFD for
turnout gear.

(f) On July 7, 2022, as part of his responsibilities as the BVFD Fire Chief,
the Defendant applied to part two of the Pike County Fire/Rescue
Recovery Grant Application to obtain funding for equipment and building
maintenance. The Defendant included an itemized list of equipment that
BVFD would purchase with the grant money. On July 18, 2022, Pike

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County Fiscal Court issued a $25,000 grant to BVFD for equipment and
building maintenance.

(g) In total, BVFD prepaid and ordered $76,854.50 worth of fire and safety
equipment from RPSE.

(h) Instead of using the prepayments from BVFD to fulfill the orders, the
Defendant withdrew $61,500 in cash from the RPSE bank account for his
own personal use. He used the rest of the money for his personal use
through direct purchases from the RPSE bank account. The Defendant
never fulfilled any of BVFD’s fire and safety equipment orders.

(i) Through the aforementioned means, the Defendant used his position to

take wrongfully $5,000 or more in funds, goods, and services from the

. local government of Pike County and BVFD during the period between
May 15, 2022, and May 14, 2023.

4. The statutory punishment for Count 1 is imprisonment for not more than 10 years,
a fine of not more than $250,000, and a term of supervised release of not more than 3 years.
A mandatory special assessment of $100 applies, and the Defendant will pay this
assessment to the U.S. District Court Clerk at the time of the entry of the plea.

5. Pursuant to Rule 11(c)(1)(B), the United States and the Defendant recommend
the following sentencing guidelines calculations, and they may object to or argue in favor
of other calculations. This recommendation does not bind the Court.

(a) United States Sentencing Guidelines (U.S.S.G), November 1, 2023,
manual, will determine the Defendant’s guidelines range. Pursuant to
U.S.S.G. § 1B1.2, the Defendant’s relevant conduct includes all of the
Defendant’s thefts from the government of Pike County, Kentucky and
BVFD.

(b) Pursuant to U.S.S.G. § 2B1.1, the base offense level is 6.

' (c) Pursuant to USS.G. § 2B1.1(b), the parties agree that the offense level

should be increased by 6 levels because the loss foreseeable to the
Defendant exceeded $40,000 but was less than $95,000.


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(d) Pursuant to U.S.S.G. § 3B1.3, the parties agree that the offense level
should be increased by 2 levels because the Defendant abused a position
of trust.

(e) Pursuant to U.S.S.G. § 3E1.1 and unless the Defendant commits another
crime, obstructs justice, or violates a court order, the parties agree the
offense level should be decreased by 2 levels for the Defendant’s
acceptance of responsibility. If the offense level determined prior to this
2-level decease is level 16 or greater, the United States will move at
sentencing to decrease the offense level by 1 additional level based on the
Defendant’s timely notice of intent to plead guilty.

(f) Pursuant to U.S.S.G. § 4C1.1, the parties agree that if the Defendant has

zero Criminal history points, the offense level should be decreased by two
points because he would be an eligible zero-point offender.

(g) Pursuant to U.S.S.G. § 5E1.1, the parties agree that the Defendant shall
pay restitution in the amount of $76,854.50, of which $11,000 shall be
paid to the Kentucky Fire Commission and the remainder shall be paid to
the local government of Pike County, Kentucky.

6. No agreement exists about the Defendant’s criminal history category pursuant
to U.S.S.G. Chapter 4.

7. The Defendant will not file a motion for a decrease in the offense level based on

a mitigating role pursuant to U.S.S.G. § 3B1.2 or a departure motion pursuant to U.S.S.G.

Chapter 5, Parts H or K. The Defendant also will not seek a sentence below the advisory
sentencing guidelines range as determined by the Court at sentencing.

8. The Defendant waives the right to appeal the guilty plea, conviction, and
sentence. Except for claims of ineffective assistance of counsel, the Defendant also waives
the right to attack collaterally the guilty plea, conviction, and sentence.

9. The Defendant understands and agrees that he will return all BVFD equipment

and property in his possession to BVFD prior to the final sentencing hearing.

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10. The United States will recommend releasing the Defendant on the current
conditions for future court appearances if the Defendant does not violate the terms of the

order setting conditions of release.

11. The Defendant consents to the imposition of a forfeiture money judgment in
the amount of $76,854.50, which represents the amount of proceeds that the Defendant
obtained as a result of the offense to which he is pleading guilty. The Defendant consents
to the entry of a Preliminary Order of Forfeiture, pursuant to Federal Rule of Criminal
Procedure 32.2. If the Defendant fails to pay in full the forfeiture money judgment, he
consents to the forfeiture of any other property of his up to the amount of 76,854.50,
pursuant to 21 U.S.C. § 853(p), and further agrees that the conditions of 21 U.S.C. §
853(p)(1)(A)-(E) have been met. The Defendant voluntarily and knowingly waives all
provisions in Rule 32.2 pertaining to notice and/or the timing of forfeiture orders. The
Defendant also waives his/her right, if any, to a jury trial on forfeiture and all constitutional,
legal, or equitable defenses to the forfeiture. The Defendant agrees that this forfeiture is
separate and distinct from any restitution, fine, or penalty ordered by the Court and shall
survive bankruptcy.

11. The Defendant agrees to pay restitution in the amount of $11,000 to the Kentucky
Fire Commission and the remainder to the local government of Pike County, Kentucky, for
a total of $76,854.50, pursuant to 18 U.S.C. § 3663(a)(3). The Defendant agrees that the
restitution amount may include restitution for all losses caused by the Defendant’s criminal
conduct or through the commission of the offense of conviction, even if such losses resulted

from crimes not charged or admitted by Defendant in the factual basis.
5


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12. The Defendant agrees to cooperate fully with the United States Attorney’s
Office by making a full and complete financial disclosure. Within 30 days of pleading
guilty, the Defendant agrees to complete, sign, and return to the United States Attorney’s
Office a financial disclosure statement or affidavit disclosing 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, and disclosing
any transfer of assets that has taken place within three years preceding the entry of this plea
agreement. Upon request, the Defendant agrees to provide the United States Attorney’s
Office with records verifying his/her financial information or with any releases required to
obtain such records, with such releases being valid for a period extending 90 days from the
date of sentencing. The Defendant will submit to an examination, which may be taken
under oath and may include a polygraph examination. Prior to sentencing, the Defendant
agrees to notify the United States Attorney’s Office and obtain its consent before
transferring, encumbering, or disposing of any interest in property with a value exceeding
$1,000.00 owned or controlled directly or indirectly, individually or jointly, by the
Defendant, including any interest held or owned under any name, including trusts,
partnerships, and corporations. If the Defendant is ever incarcerated in connection with
this case, the Defendant will participate in the Bureau of Prisons Inmate Financial
Responsibility Program, regardless of whether the Court specifically directs participation
or imposes a schedule of payments. The Defendant agrees to notify the United States

Attorney’s Office of any material changes in his/her economic circumstances, as described

in 18 U.S.C. § 3664(k), which occur prior to sentencing, within seven days of the event
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giving rise to the changed circumstances. If the Defendant fails to comply with any of the

provisions of this paragraph, the United States, in its discretion, may refrain from moving

the Court pursuant to U.S.S.G. § 3E1.1(b) to reduce the offense level by one additional
level and may argue that the Defendant should not receive a two-level reduction for
acceptance of responsibility under U.S.S.G. § 3E1.1(a).

13. The Defendant understands and agrees that, pursuant to 18 U.S.C. § 3613,
whatever monetary penalties are imposed by the Court will be due and payable immediately
and subject to immediate enforcement by the United States. Ifthe Court imposes a schedule
of payments, the Defendant agrees that it is merely a minimum schedule of payments and
not the only method, nor a limitation on the methods, available to the United States to
enforce the judgment. The Defendant waives any requirement for demand of payment on
any fine, restitution, or assessment imposed by the Court and agrees that any unpaid
obligations will be submitted to the United States Treasury for offset. The Defendant
waives any defense or objection to any action to enforce the collection of financial
obligations to be imposed in connection with this prosecution, including, but not limited to,
collection procedures authorized by the Federal Debt Collection Procedures Act, 28 U.S.C.
§ 3001, et seq., 18 U.S.C. § 3664, or 18 U.S.C. § 3613. The Defendant expressly authorizes
the United States to obtain the Defendant’s credit reports at any time. The Defendant
authorizes the U.S. District Court to release funds posted as security for the Defendant’s
appearance bond in this case, if any, to be applied to satisfy the Defendant’s financial
obligations contained in the judgment of the Court. The Defendant authorizes the United

States Attorney’s Office to inspect and copy all financial documents and information held
7


Case: 7:24-cr-00004-KKC-EBA Doc#: 22 Filed: 08/14/24 Page: 8 of 8 - Page ID#: 79

by the U.S. Probation Office.

14. If the Defendant violates any part of this Agreement, the United States may
void this Agreement and seek an indictment for any violations of federal laws, and the
Defendant waives any right to challenge the initiation of additional federal charges.

15. This document contains the complete and only Plea Agreement between the
United States Attorney for the Eastern District of Kentucky and the Defendant. The United
States has not made any other promises to the Defendant.

16. This Agreement does not bind the United States Attorney’s Offices in other
districts, or any other federal, state, or local prosecuting authorities.

17. The Defendant and the Defendant’s attorney acknowledge that the Defendant
understands this Agreement, that the Defendant’s attorney has fully explained this
Agreement to the Defendant, and that the Defendant’s entry into this Agreement is
voluntary.

CARLTON S. SHIER, IV
UNITED STATES ATTORNEY

Date: 8/12/24 By: Potten pun ae

Brittany Dung -Pirio
Assistant United States Attorney

Date: RB _ (2-53 GP — ai
Christopher Chapman
Defendant _
Date: (© ~ 13-3 Ke LL AZ dare
~~ 4 Andy Markelonis
__” Attorney for Defendant

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