Position on Sentencing by USA as to Craig David Davis — USA v. Davis (Dkt. 44, E.D. Va.)

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U.S. District Court for the Eastern District of Virginia · No. 1:24-cr-00040-PTG · Doc. 44 · 2025-01-09 · Docket on CourtListener

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IN THE UNITED STATES DISTRICT COURT FOR THE 
EASTERN DISTRICT OF VIRGINIA 
Alexandria Division 
 
UNITED STATES OF AMERICA  
) 
Case No. 1:24-cr-40 
 
 
 
 
 
 
) 
 
 
v. 
 
 
 
) 
Sentencing Date: January 16, 2025 
 
 
 
 
 
 
) 
CRAIG DAVID DAVIS, 
 
 
) 
The Honorable Patricia Tolliver Giles   
 
 
 
 
 
 
) 
 
 
 
 
 
 
 
 
Defendant. 
 
 
 
) 
 
POSITION OF THE UNITED STATES WITH RESPECT TO SENTENCING 
 
The defendant, Craig Davis (“Davis” or the “defendant”) defrauded multiple government 
pandemic relief programs during the backdrop of the COVID-19 pandemic, an unprecedented time 
of financial hardship, turmoil, and suffering, and caused nearly $10 million of loss. Specifically, 
the defendant submitted multiple Paycheck Protection Program (“PPP”) and Main Street Lending 
Program (“MSLP”) loan applications to which he was not entitled. Simultaneously the defendant 
continued to execute another long-term fraud scheme that caused at least 15 banks to issue over 
$60 million across 359 fraudulent loans. The United States of America, through undersigned 
counsel, in accordance with 18 U.S.C. § 3553(a) and the United States Sentencing Guidelines 
(“Guidelines” or “U.S.S.G.”), files its sentencing recommendation.  
The Presentence Investigation Report (“PSR”) calculated Davis’s total offense level as 30 
and his criminal history as category II, resulting in an advisory Guidelines range of 108–135 
months. The United States agrees with the PSR’s Guideline calculations. For the reasons set forth 
below and in the accompanying sealed filing, the United States respectfully requests that the 
defendant be sentenced to a term of imprisonment of 97 months, which is below his Guideline 
range. The United States also requests that the Court sentence the defendant to three years of 
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supervised release, and consistent with the plea agreement enter a proposed forfeiture order for 
$8,995,191.55 and order restitution in the amount of at least $8,995,191.55.  
I. 
BACKGROUND 
 
A. The Pandemic   
 
 The pandemic was a time characterized not only by a serious disease but also by true 
economic uncertainty. The fear felt at the time is hard to remember now – there were concerns 
about the country falling into an economic depression during the first few months of the pandemic. 
Millions of Americans lost their jobs seemingly overnight. 23.1 million Americans were 
unemployed in April 2020.1 The U.S. real gross domestic product (GDP) “fell by 8.9 percent in 
the second quarter of 2020 … the largest single-quarter contraction in more than 70 years.” 2  
 
In response to the looming financial peril threatening the country, Congress passed the 
Coronavirus Aid, Relief, and Economic Security Act, more commonly known as the “CARES 
Act,” in March of 2020. The CARES Act made billions of government-guaranteed loans available 
to qualified small businesses through the Paycheck Protection Program. These loans would be 
forgiven entirely if the loan proceeds were used on a narrow list of expenses designed to help 
struggling businesses survive such as payroll, utilities, rent, and employee health care expenses. 
PSR ¶ 24. To qualify for a PPP loan, an applicant had to meet certain criteria designed to ensure 
 
1“TED: Economics Daily,” U.S. Bureau of Labor Statistics, available at  
https://www.bls.gov/opub/ted/2020/unemployment-rate-rises-to-record-high-14-point-7-percent-
in-april-2020.htm (last visited September 1 2023) 
 
2 “The U.S. Economy and the Global Pandemic, Chapter 3,” the White House (April 26, 2022, 
4:00 p.m.) available at whitehouse.gov/wp-content/uploads/2022/04/Chapter-3-new.pdf (last 
visited September 1, 2023) 
 
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that the program’s assets would be used to forestall widespread layoffs and economic collapse.  
The CARES Act also authorized the Main Street Lending Program (“MSLP”).  The 
MSLP was an emergency lending program established by the Federal Reserve Board (“FRB”) 
and administered by the Federal Reserve Bank of Boston (“FRBB”). PSR ¶ 25. The MSLP was 
designed to support lending to small and medium-sized businesses that were in sound financial 
condition before the onset of the COVID-19 pandemic. Id.  
MSLP applicants, through their representatives, applied for their loans with private 
lenders, such as banks, that had been approved by the FRBB for making MSLP loans.  PSR ¶ 26. 
The borrowers had to meet the eligibility requirements set by the MSLP and certify that they 
would abide by the terms of the program and additional criteria set by the private lenders.  Id. 
The MSLP and the lenders required applicants to submit accurate financial information to 
support their applications. Id. The MSLP and the lenders also required that the loan proceeds be 
used for business expenses, and the lenders often required more specific representations by the 
representatives of the businesses. Id. Lenders relied on the accuracy of the information contained 
in the loan applications and supporting documents. Id.   
When a lender decided that an applicant had met the requirements of the MSLP and the 
lender, the lender sent information about the borrower and the requested loan amount 
electronically to MS Facilities.  PSR ¶ 27. Once a loan had been approved, MS Facilities sent the 
lender a commitment letter stating, among other things, that MS Facilities would purchase 95 
percent of the loan.  Id. The lender kept five percent of the loan and was responsible for servicing 
the loan. Id. The MSLP deferred interest repayments until the second year of each loan, the first 
repayment of principal until the third year of each loan, and the final repayment of principal until 
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the fifth year of each loan. Id. All MSLP loans were made between July 2020 and January 2021 
and were not forgivable. Id.  
B. Offense Conduct
From at least April 2020 through at least February 2021, Davis engaged in a scheme to 
defraud CARES Acts Program of nearly $10 million by fraudulently applying for multiple PPP 
loans and one MSLP loan that he knew neither he nor his business, Bright Vanguard, LLC (“BV”), 
was entitled to receive. PSR ¶¶ 29-33. He created fake payroll records, fake tax documents, and 
fake business records to support the fraudulent loan applications. PSR ¶¶ 31, 38, 42, 45-46, 
50. Notably, the defendant even took pains to create not one, but two fake financial audit 
reports to support his MSLP loan application. PSR ¶ 50.  
Simultaneous to this conduct, he engaged in a years’ long scheme to defraud commercial 
equipment lenders by soliciting business owners to submit fake invoices for computer equipment 
from his company, BV. PSR ¶ 52. In that scheme, the defendant recruited business owners in need 
of operating capital to apply for commercial equipment loans. The defendant provided the 
applicant borrowers invoices from BV, or other companies he controlled through proxies, falsely 
indicating the sale of computer equipment. Id. The borrowers provided these invoices to lenders 
to justify their loan requests. Once approved, the lenders provided the defendant with the funds. 
The defendant then remitted the majority of the loan proceeds to the borrowers and kept 
approximately 10 to 25% of the loan proceeds for himself and his coconspirators without providing 
the equipment indicated on the invoices. PSR ¶ 54. This kick-back scheme was never disclosed to 
the lenders. The defendant’s scheme involved approximately 359 separate loans to dozens of 
financial institutions, resulting in nearly $60 million of fraudulently induced lending. PSR ¶ 55.  
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II. 
GUIDELINES CALCULATION  
Although the Supreme Court rendered the federal Sentencing Guidelines advisory in 
United States v. Booker, it held that a sentencing court must “consult [the] Guidelines and take 
them into account when sentencing.” 543 U.S. 200, 264 (2005); see also United States v. Clark, 
434 F.3d 684, 685 (4th Cir. 2006). Indeed, the Guidelines “seek to embody the Section 3553(a) 
considerations, both in principle and in practice.” Rita v. United States, 551 U.S. 338, 350 (2007). 
Thus, a sentencing court “must consult [the] Guidelines and take them into account when 
sentencing” to “provide certainty and fairness in meeting the purposes of sentencing [while] 
avoiding unwarranted sentencing disparities.” Booker, 543 U.S. at 264 (internal quotation marks 
omitted); United States v. Biheiri, 356 F. Supp. 2d 589, 593 (E.D. Va. 2005).  
A sentencing court should first calculate the defendant’s guideline range after making the 
appropriate findings of fact. See United States v. Hughes, 401 F.3d 540, 546 (4th Cir. 2005). 
Following that calculation, a sentencing court must then “consider that range as well as other 
relevant factors set forth in the [G]uidelines and those factors set forth in [18 U.S.C. §] 3553(a) 
before imposing the sentence.” Id.  
a. The Advisory Guideline Range 
 
The parties agree to the base offense level, the 20-level enhancement based on the loss 
from the COVID-19 relief fraud scheme, the 2-level enhancement for the offense involving 10 or 
more victims, and the 2-level enhancement for deriving more than $1,000,000 from a financial 
institution are not in contention. PSR ¶ 5, ECF No. 38 at 3.  
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The PSR offense level calculation includes an additional enhancement, the 2-level 
enhancement because the offense involved sophisticated means, see PSR ¶ 89, U.S.S.G. § 
2B1.1(b)(10)(C). The plea agreement explicitly reserves the right for the parties to argue their 
position regarding the sophisticated means enhancement. ECF No. 38 at 3.  
i. Sophisticated Means Enhancement  
 
The PSR correctly includes a 2-level enhancement for sophisticated means pursuant to 
U.S.S.G. § 2B1.1(b)(10)(C). “For purposes of subsection (b)(]10)(C), ‘sophisticated means’ means 
especially complex or especially intricate offense conduct pertaining to the execution or 
concealment of an offense. . . . Conduct such as hiding assets or transactions, or both, through the 
use of fictitious entities, corporate shells, or offshore financial accounts also ordinarily indicates 
sophisticated means.” U.S.S.G. 2B1.1 cmt. n.9(B); see also Stinson v. United States, 508 U.S. 36, 
38, 113 (1993) (holding that Guidelines commentary explaining or interpreting a rule “is 
authoritative unless it violates the Constitution or a federal statute, or is inconsistent with, or a 
plainly erroneous reading of, that guideline”). The sophisticated means enhancement “applies 
where the entirety of the scheme constitutes sophisticated means, even if every individual action 
is not sophisticated.” United States v. Adepoju, 756 F.3d 250, 257 (4th Cir. 2014). The 
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enhancement applies even if the defendant did “not utilize the most complex means possible to 
conceal his fraudulent activities[.]” United States v. Jinwright, 683 F.3d 471, 486 (4th Cir. 2012).  
 
The defendant admitted in his written allocution that “BV did little if any legitimate 
business and Davis used it primarily as a vehicle to commit the offenses detailed herein.” PSR ¶ 
28. As such, BV should be viewed as a corporate shell—one of the specific examples set forth in 
the Guidelines justifying the application of the sophisticated means enhancement. See United 
States v. Igboda, 964 F.3d 501, 511 (6th Cir. 2020) (applying sophisticated means enhancement 
where defendant “used corporate entities in furtherance of his criminal activities”) (quoting United 
States v. Benchick, 725 F. App’x 361, 369 (6th Cir. 2018)); see also United States v. Rubashkin, 
718 F.Supp.2d 953, 976 (N.D. Iowa, June 21, 2010) (“A shell corporation is a company that is 
incorporated, but has no significant assets or operations”) (quoting Nautilus Ins. Co. v. Reuter, 537 
F.3d 733, 737 (7th Cir. 2008)). Other aspects of the defendant’s confirm the sophisticated nature 
of the offense. These include the defendant’s use of fraudulent documents, including false tax 
documents, to misrepresent the extent of his business.  See United States v. Okolo, 82 F. App’x 
834, 837-38 (4th Cir. 2003) (affirming district court’s application of sophisticated means 
enhancement based, inter alia, on the use of false documents); see also United States v. Pierce, 
643 F. App’x 500, 502-04 (6th Cir. 2016) (affirming application of sophisticated means 
enhancement based, inter alia, on use of false tax returns and applying totality approach to analysis 
of offense conduct).  
 
Consequently, the defendant’s use of corporate shells and false documents, when 
considered in the broader context of his offense, counsels in favor of the enhancement’s application 
and the adoption of the sentencing range set forth in the PSR.  
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III. 
THE FACTORS SET FORTH IN SECTION 3553(A) AND RECOMMENDED 
SENTENCE 
 
 
After calculating the appropriate Guidelines range, the court must “determine whether a 
sentence within that range . . . serves the factors set forth in § 3553(a) and, if not, select a sentence 
[within statutory limits] that does serve those factors.”  United States v. Moreland, 437 F.3d 424, 
432 (4th Cir. 2006), overruled on other grounds. Pursuant to 18 U.S.C. § 3553(a), the Court should 
consider: (1) the nature and circumstances of the offense and the history and characteristics of the 
defendant; (2) the need for the sentence imposed to, among other things, reflect the seriousness of 
the offense and adequately deter criminal conduct; (3) the kinds of sentences available; (4) the 
Sentencing Guidelines; (5) policy statements issued by the Sentencing Commission; (6) the need 
to avoid unwarranted sentence disparities among defendants with similar records found guilty of 
similar conduct; and (7) the need to provide restitution to victims of the offense. Ultimately, the 
sentence imposed must meet a standard of reasonableness. See Booker, 543 U.S. at 260–61. The 
advisory guidelines range is an important starting point because it captures the seriousness of the 
offense. United States v. Goff, 501 F.3d 250, 257 (3d Cir. 2007) (“[T]he Guidelines reflect a 
carefully considered assessment of the seriousness of federal crimes”). 
A. The Nature, Circumstances, and Seriousness of the Offense  
 
Davis took advantage of a time of unprecedented uncertainty when and defrauded two 
different pandemic relief programs. He caused nearly $10 million in actual losses.  If that was all 
he did, the defendant’s conduct would call for a significant custodial sentence.  However, the 
defendant’s false invoice scheme also took place over several years, was prolific in scope, and 
caused approximately $60 million of fraudulent lending.  
 
In fashioning an appropriate sentence, the Court should consider the length and severity of 
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the defendant’s fraudulent activities—as indicated by his admission to the fake invoice scheme—
and the fact that he took advantage of a nation emergency to enrich himself through fraud. See 
Gall, 522 U.S. at 59 (holding it was “quite reasonabl[e]” for the sentencing for the sentencing court 
to have “attached great weight” to a 3553(a) factor.); see also Kimbrough v. United States, 552 
U.S. 85, 111 (2007) (holding that appellate court should not find the sentencing court’s reliance 
on a single factor unreasonable, so long as the court imposes a sentence sufficient, but not greater 
than necessary to accomplish the sentencing goals advanced in § 3553(a)(2)”) (internal quotation 
marks omitted); see also United States v. Pauley, 511 F.3d 468, 476 (4th Cir. 2007) (permitting a 
district court to “reasonably accord significant weight to a single sentencing factor in fashioning 
its sentence.”)  
 
A sentence of 97 months would account for the seriousness of the defendant’s crimes, 
provide just punishment, and promote respect for the law.  
B. The Defendant’s History and Characteristics and the Need for Specific Deterrence  
The Court should also consider the fact that that defendant attended college (although he 
did not graduate) and had a history of steady employment before embarking on these fraud 
schemes. PSR ¶ ¶ 111, 119-120, 122. This demonstrates the role greed played in driving his 
conduct and this Court’s need to deter any future misconduct.   
The defendant also has a criminal history. In 2016, he was arrested after he attempted to 
open a bank account using an altered identification. PSR ¶ 100. He received a non-custodial 
sentence in exchange of a plea of no lo contendere. This further demonstrates the need for this 
Court to impose the government’s recommended sentence because the defendant was not deterred 
when granted leniency. Rather, his conduct escalated significantly. 
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C.  Need to Deter Future Criminal Conduct and Promote Respect for the Law  
 
The defendant exploited governmental efforts to aid those in need, for his own financial 
gain. His actions are serious, and their impact extends beyond this case. Each time federal benefits 
are obtained through fraud it misappropriates taxpayer dollars and shakes public confidence in 
government. His conduct demonstrates a disregard for the law and a failure to appreciate the 
purpose of pandemic relief loans.  
 
Due to the prevalence of government program fraud, the United States often lacks the 
resources to investigate and prosecute all bad actors. Accordingly, general deterrence is critically 
important to dissuading others from engaging in similar conduct.  See United States v. Morgan, 
635 F. App’x. 423, 450 (10th Cir. 2015) (“General deterrence comes from a probability of 
conviction and significant consequences. If either is eliminated or minimized, the deterrent effect 
is proportionally minimized.”).  
 
Congress recognized that general deterrence is particularly important in the context of 
white-collar crime and “emphasized the critical deterrent value of imprisoning serious white-collar 
criminals, even when the criminals might be unlikely to commit another offense.” United States v. 
Sample, 901 F.3d 1196, 1200 (10th Cir. 2018); see also United States v. Livesay, 587 F.3d 1274, 
1279 (11th Cir. 2009) (cleaned up) (“[I]n enacting § 3553, Congress was especially concerned that 
prior to the Sentencing Guidelines, major white-collar criminal often were sentence to small fines 
and little or no imprisonment.”)    
 
 
 
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IV. 
CONCLUSION 
 
A sentence of 97 months’ imprisonment is sufficient but not greater than necessary to 
account for the defendant’s wrongdoing. The government, therefore, urges the Court to impose 
the recommended sentence.  
Jessica D. Aber 
United States Attorney 
 
 
/s/ Kathleen E. Robeson 
 
Kathleen E. Robeson 
Assistant United States Attorney 
 
David A. Peters 
Trial Attorney, Criminal Division, 
Fraud Section, Department of Justice 
 
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CERTIFICATE OF SERVICE 
I hereby certify that on January 9, 2025, I electronically filed the foregoing with the Clerk 
of Court using the CM/ECF system, which will send a notification of that electronic filing (NEF) 
to all counsel of record.  
 
 
 
By:  
    
/s/ Kathleen E. Robeson 
 
Kathleen E. Robeson 
Assistant United States Attorney 
United States Attorney’s Office 
Justin W. Williams U.S. Attorney’s Building 
2100 Jamieson Avenue 
Alexandria, VA 22314 
Telephone: 703-299-3700 
 
 
 
 
 
 
 
Email: kathleen.robeson@usdoj.gov 
 
 
 
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