Sentencing Memorandum as to Derek Parker filed by USA (Document 554 Re-docketed) — USA v. Thomas et al. (Dkt. 556, N.D. Ga.)

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U.S. District Court for the Northern District of Georgia · No. 1:20-cr-00296-JPB-CMS · Doc. 556 · 2022-08-29 · Docket on CourtListener

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IN THE UNITED STATES DISTRICT COURT 
FOR THE NORTHERN DISTRICT OF GEORGIA 
ATLANTA DIVISION 
 
UNITED STATES OF AMERICA 
v. 
DEREK PARKER 
 
Criminal Action No. 
1:20-CR-296-JPB 
 
United States’ Sentencing Memorandum 
The United States of America, by Ryan K. Buchanan, United States Attorney, 
and Tal C. Chaiken and Nathan P. Kitchens, Assistant United States Attorneys for 
the Northern District of Georgia, and Babasijibomi Moore, Trial Attorney for the 
United States Department 
of Justice, respectfully files this Sentencing 
Memorandum in advance of Defendant Derek Parker’s sentencing, which is set for 
August 31, 2022 at 10:00 a.m.  Defendant pleaded guilty to conspiracy to commit 
wire fraud in violation of Title 18, United States Code, Section 1349.  As set forth 
below, the United States respectfully agrees that Defendant’s recommended 
sentence of 18 months’ imprisonment is sufficient, but not greater than necessary, 
to comply with the purposes set forth in Title 18, United States Code, Section 
3553(a). 
An 18-Month Sentence is Proper Given the Section 3553(a) Factors. 
1. 
The Nature and Circumstances of the Offense. 
Defendant’s offense was serious, motivated by personal greed during an 
unprecedented global crisis.  In early 2020, the COVID-19 pandemic sent stock 
markets crashing and unemployment rates skyrocketing, while nationwide 
lockdowns ground the economy to a halt.  Many American businesses – and in 
particular, small businesses – struggled to stay afloat as consumer demand 
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plummeted, creating daunting uncertainty for the businesses, their employees, 
and the families who rely on them.  Against that backdrop, Congress passed the 
Paycheck Protection Program (the “PPP”) as one of the mechanisms for providing 
relief to small businesses and their employees.  To obtain a loan, a business had to 
certify that the loan would be used to pay for payroll, lease or mortgage interest, 
or utilities, and the loan was forgivable if the business spent a certain percentage 
of the loan on payroll costs.   
Because Congress’s intent was to “provide relief to America’s small 
businesses 
expeditiously,” 
the 
PPP 
streamlined 
the 
Small 
Business 
Administration’s typical lending requirements.  Business Loan Program 
Temporary Changes; Paycheck Protection Program, 85 Fed. Reg. 20811-01 (Apr. 
15, 2020).  For example, the PPP “allow[ed] lenders to rely on certifications of the 
borrower in order to determine eligibility of the borrower and use of loan proceeds 
and to rely on specified documents provided by the borrower to determine 
qualifying loan amount and eligibility for loan forgiveness.”  Id.  These procedures 
were designed to quickly get much-needed funds to small businesses so they could 
keep their workers employed during an economic and public health crisis that 
threatened the viability of many small businesses and their ability to keep their 
employees on the payroll. 
Defendant sought to take advantage of the PPP’s streamlined procedures to 
line his own pockets by applying for an $818,102.00 PPP loan for a business that 
he had incorporated but that had no employees or actual business.  (See PSR, ¶¶ 12, 
76-78, 116-119.)  Defendant was not a small business owner worried about his 
employees and the mouths they were responsible for feeding.  Rather, he saw in 
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the PPP an opportunity to get free money to use for personal expenses.  Indeed, 
while others were struggling to stay afloat during the pandemic, Defendant 
personally received at least $159,856.09 from the PPP loan through payments by 
co-conspirators to other businesses he controlled and through multiple Rapid Pay 
Card payroll cards he received from his co-conspirators.  (Id. ¶ 77.)  And though 
Harvest Small Business Finance funded the loan, the funds that were stolen were 
taxpayer funds administered by the Small Business Administration.   
While Defendant is not the most culpable actor in this fraudulent scheme, 
as he recognizes, he played a crucial part in the scheme and benefitted from it 
substantially.  Without Defendant’s willingness to use his business and its bank 
account to obtain a fraudulent PPP loan and get “free money” for himself, other 
actors would not have been able to apply for a PPP loan on D Parker Holdings’ 
behalf.  And when the entire PPP loan was deposited into an account that he alone 
controlled, Defendant chose to launder the proceeds of that loan rather than to do 
the right thing and return the funds to the lender, ultimately receiving nearly 
$160,000 for himself.  
2. 
The Need for Adequate Deterrence. 
The Eleventh Circuit has identified general deterrence as “an important goal 
of sentencing in a white-collar crime prosecution.”  United States v. Kuhlman, 711 
F.3d 1321, 1328 (11th Cir. 2013); see also Howard, 28 F.4th at 209 (“General 
deterrence is more apt, not less apt, in white collar crime cases.”); United States v. 
Livesay, 587 F.3d 1274, 1279 (11th Cir. 2009) (“[T]he threat of spending time on 
probation simply does not, and cannot, provide the same level of deterrence as can 
the threat of incarceration in a federal penitentiary for a meaningful period of 
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time.”); United States v. McQueen, 727 F.3d 1144, 1158 (11th Cir. 2013) (recognizing 
that general deterrence is one of the “‘key purposes of sentencing’”) (citation 
omitted).   
A substantial downward variance would do little to dissuade Defendant or 
others from committing a similar crime in the future.  To the contrary, a lenient 
sentence would encourage would-be white-collar offenders to view a short prison 
sentence as part of the cost of doing business.  Nor would a lenient sentence reflect 
the seriousness of fraudulently obtaining for personal gain more than $818,000 
intended for struggling small businesses and their employees in the midst of a 
global crisis.  Hayes, 762 F.3d at 1308 (collecting cases where the Eleventh Circuit 
has “set aside sentences of little to no imprisonment” in white collar cases “because 
they do not constitute just punishment for the offense, do not promote respect for 
the law, and will not do much to deter similar activity by others”); see also United 
States v. Shah, 476 F. Supp. 3d 619, 623 (E.D. Mich. Aug. 4, 2020) (noting the 
seriousness of an offense that involved “bilk[ing] the government out of . . . funds 
that were earmarked to pay for the medical expenses of vulnerable and needy 
individuals”). 
As the Eleventh Circuit has recognized, deterrence is especially important 
in the context of crimes, like Defendant’s crime in this case, that “may easily go 
undetected and unpunished.”  See McQueen, 727 F.3d at 1158-59 (reversing the 
district court’s lenient sentence because it “sap[ped] the goal of general 
deterrence”); see also United States v. Engle, 592 F.3d 495, 502 (4th Cir. 2010) 
(explaining that because tax evasion offenses are infrequently prosecuted, 
“[w]ithout a real possibility of imprisonment, there would be little incentive for a 
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wavering would-be evader to choose the straight-and-narrow over the wayward 
path); United States v. Heffernan, 43 F.3d 1144, 1149 (7th Cir. 1994) (“Considerations 
of (general) deterrence argue for punishing more heavily those offenses that either 
are lucrative or are difficult to detect and punish, since both attributes go to 
increase the expected benefits of a crime and hence the punishment required to 
deter it.”). 
A recent analysis found that approximately 12.3% of the PPP loans granted 
to small businesses, totaling $64.2 billion, have at least one indicator of potential 
fraud.  See John M. Griffin et al., Did FinTech Lenders Facilitate PPP Fraud? (Aug. 5, 
2022), available online at https://ssrn.com/abstract=3906395 (last visited Aug. 15, 
2022).  And because of the sheer number of PPP loans as well as the streamlined 
documentation necessary to obtain them, the United States is unlikely to detect 
and/or to prosecute most individuals who obtained fraudulent PPP loans.  The 
need for general deterrence is therefore significant in this case.  
Defendant cites various sources stating that the certainty of being caught is 
a more powerful deterrent than the severity of punishment.  (Sent. Mem. at 8.)  But 
in the case of white-collar crime – and in particular, crime like PPP fraud that is 
difficult to detect – the certainty of being caught is low.  And the Eleventh Circuit 
has held that deterrence is a key consideration in white-collar sentencings.  Simply 
put, a substantial downward variance would signal to others considering 
engaging in white-collar crime that there is a significant benefit to be gained and 
little to be lost by committing the offense, thereby undermining, rather than 
promoting, Section 3553(a)’s purposes.             
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3. 
The Sentencing Commission’s Policy Statement. 
“In deciding a sentence, district courts should consider the policies behind 
the applicable guidelines provision.”  United States v. Crisp, 454 F.3d 1285, 1291 
(11th Cir. 2006); see also 18 U.S.C. § 3553(a)(5) (directing district courts to consider 
the Sentencing Commission’s policy statements).  For fraud-related offenses, the 
Sentencing Commission has explained that “along with other relevant factors 
under the guidelines, loss serves as a measure of the seriousness of the offense and 
the defendant’s relative culpability and is a principal factor in determining the 
offense level under [U.S.S.G. § 2B1.1].”  U.S.S.G. § 2B.1.1, cmt. backg’d. 
The Sentencing Commission’s policy statement does not support a 
substantial downward variance in this case, where Defendant’s Guidelines are 
based almost entirely on the amount of loss attributable to his offense. 
4. 
Defendant’s History and Characteristics. 
As described in the PSR and in Defendant’s Sentencing Memorandum, 
Defendant’s personal circumstances are compelling. Although a defendant’s 
history and characteristics “cannot be considered in isolation and without regard 
to the criminal conduct for which the defendant has been convicted and the 
characteristics it reveals,” Howard, 28 F.4th at 218-20, the Defendant’s substantial 
family caretaking obligations support a three-level downward variance after 
taking into account his less culpable role in the offense.   
Specifically, the record establishes that Defendant is the primary caretaker 
for his wife, who suffers several debilitating health conditions, and for a 
granddaughter who suffers from depression. In addition, the Defendant assists 
with the care of his 90-year-old mother, who suffers from dementia. The United 
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States is mindful of the Guidelines’ admonition that “family ties and 
responsibilities are not ordinarily relevant in determining whether a departure 
may be warranted.” U.S.S.G. § 5H1.6. Moreover, the Guidelines note that a 
departure based on the caretaking of family members requires a showing that:  (1) 
the defendant’s incarceration “will cause a substantial, direct, and specific loss of 
essential caretaking . . . to the defendant’s family”; (2)  the loss of caretaking 
“substantially exceeds the harm ordinarily incident to incarceration”; (3) “no 
effective remedial or ameliorative programs reasonably are available, making the 
defendant’s caretaking or financial support irreplaceable”; and (4) the departure 
will address the loss of caretaking. U.S.S.G. § 5H1.6 cmt n.1(B). Cases interpreting 
a departure based on family caretaking recognize that it is proper only in 
“extraordinary” circumstances. United States v. Allen, 87 F.3d 1224, 1225 (11th Cir. 
1996) (reversing downward departure for defendant who was primary caregiver 
of her seventy-year-old father who suffered from Alzheimer’s and Parkinson’s 
diseases); see also United States v. DeVegter, 439 F.3d 1299, 1307 (11th Cir. 2006) 
(reversing downward departure based on defendant’s caretaking of his dyslexic 
son and mother-in-law in “failing health,” concluding that “[t]here is nothing 
inherently extraordinary about caring for a child or a sick parent.  Innocent young 
family members, including children, commonly suffer as a result of a parent’s 
incarceration”). 
But the United States recognizes that Defendant’s incarceration will place 
an unusually difficult burden on Defendant’s wife and grandchildren, in 
particular, which distinguishes Defendant from many others who cause hardship 
to family members from their incarceration. Based on its consideration of his 
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caregiving responsibilities as part of a full analysis of Defendant’s history and 
characteristics under Section 3553(a), the United States submits that a three-level 
downward variance appropriately accounts for these mitigating circumstances 
and the need to provide just punishment and afford adequate deterrence.            
5. 
Unwarranted Sentencing Disparities. 
The parties’ sentencing recommendation of 18 months’ incarceration avoids 
creating unwarranted sentencing disparities between Defendant and other 
individuals involved in this fraudulent scheme whose conduct was most similar 
to Defendant’s – that is, other business owners who were recruited into the scheme 
by others and who did not themselves prepare the fabricated loan application and 
documentation.  The Court has already sentenced several of these co-defendants 
to sentences at the low end of their applicable Guidelines ranges.  See DE 84 
(sentencing Kahlil Green to 41 months’ incarceration); DE 380 (sentencing Bern 
Benoit to 27 months’ incarceration); United States v. Charmaine Redding, 1:21-cr-178, 
DE 17 (N.D. Ga. Oct. 27, 2021) (sentencing Charmaine Redding to 27 months’ 
incarceration). But the Court varied downward for another co-defendant, David 
Belgrave, who also had substantial family caregiving obligations and was a 
relatively less culpable business owner. See DE 552. Other co-defendants who 
received downward variances had different mitigating circumstances from 
Defendant, including full payment of restitution before the sentencing hearing and 
serious health conditions.1 The recommended three-level downward variance 
 
1 Defendant is not similarly situated to Andre Gaines, both in terms of the 
nature and circumstances of the offense and in terms of the history and 
characteristics of the defendant.  He is not similarly situated to Charles Hill, who 
received a sentence of probation with home confinement due to a rare 
autoimmune disease.   
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appropriately balances the downward variance granted to Mr. Belgrave with the 
low-end Guidelines sentences received by business owners who pleaded guilty 
earlier in this case.   
6. 
The Need to Provide Restitution.   
The Eleventh Circuit has rejected the argument that a large restitution 
award warrants a shorter custodial sentence.  See Crisp, 454 F.3d at 1291 
(explaining that shortening a defendant’s sentence “in order to increase the time 
for the defendant to earn money to pay restitution” would turn the Sentencing 
Commission’s policy on its head because it would mean that the more loss a 
defendant inflicts, the shorter their sentence).  While Defendant’s restitution 
obligation is significant, the need to provide restitution does not outweigh Section 
3553(a)’s other considerations and does not warrant a substantial downward 
variance.               
Conclusion 
For these reasons, the United States respectfully requests that the Court 
grant a three-level downward variance and impose a sentence at the low end of 
the resulting Guidelines range of 18 months.     
 
 
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Dated: August 29, 2022.  
 
 
 
 
Respectfully submitted, 
 
RYAN K. BUCHANAN 
   United States Attorney 
 
 
TAL C. CHAIKEN 
Assistant United States Attorney 
Georgia Bar No. 273949 
 
NATHAN P. KITCHENS 
Assistant United States Attorney 
Georgia Bar No. 263930 
 
600 U.S. Courthouse 
75 Ted Turner Drive SW 
Atlanta, GA 30303 
404-581-6000; Fax: 404-581-6181 
 
SIJI MOORE 
  Trial Attorney, Fraud Section 
  U.S. Department of Justice 
Case 1:20-cr-00296-JPB-CMS     Document 556     Filed 08/29/22     Page 10 of 11

 
 
Certificate of Service 
The United States Attorney’s Office served this document today by filing it 
using the Court’s CM/ECF system, which automatically notifies the parties 
and counsel of record. 
 
August 29, 2022 
 
/s/ NATHAN P. KITCHENS 
 
NATHAN P. KITCHENS 
 
Assistant United States Attorney 
 
 
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