OBJECTIONS TO PRESENTENCE INVESTIGATION REPORT by USA as to Eric Dean Sheppard — USA v. SHEPPARD (Dkt. 235)

Record facts

U.S. District Court for the Southern District of Florida · No. 1:22-cr-20290-BB · Doc. 235 · 2024-05-09 · Docket on CourtListener

Summary

The United States' objections to the presentence investigation report in United States v. Eric Dean Sheppard, No. 1:22-cr-20290-BB, in the U.S. District Court for the Southern District of Florida, entered on the docket May 9, 2024 as Document 235. The filing states objections to Paragraph 37 and to Paragraphs 75, 103, 105, 109 and 118, seeking corrections to the offense conduct time frame and to the defendant's reported assets and income. It objects to the total offense level of 25 on the ground that it omits a two-level enhancement under U.S.S.G. § 2B1.1(b)(12), which applies when the offense involved conduct described in 18 U.S.C. § 1040. Most of the filing argues that the text, structure, context and history of section 1040 reach benefits paid in connection with declarations under the Stafford Act, 42 U.S.C. §§ 5121-5208. The document is 11 pages.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF FLORIDA 
 
Case No. 22-20290-CR-BLOOM(s) 
 
UNITED STATES OF AMERICA  
 
 
 
vs. 
 
 
 
 
 
 
 
 
 
 
ERIC DEAN SHEPPARD 
 
 
 
       Defendant. 
                                    / 
 
UNITED STATES’ OBJECTIONS TO  
THE PRESENTENCE INVESTIGATION REPORT 
 
 
The United States of America, through the undersigned Assistant United States Attorney, 
hereby submits its objections to the Presentence Investigation Report (“PSR”) in connection with 
defendant, Eric Dean Sheppard’s sentencing.   
 
Paragraph 37: 
 
The government seeks to make a correction to the time frame set forth in the Offense 
Conduct at Paragraph 37.  This Paragraph refers to Sheppard’s submission of false and fraudulent 
documents to support the Paycheck Protection Program (“PPP”) second draw loan application to 
PayPal/WebBank on behalf of HM-UP Development Alafaya Trails, LLC (“Alafaya Trails”), and 
provides the time frame of April 2020 through March 2021.  Sheppard’s submission of false and 
fraudulent documents in support of the second draw PPP loan application to PayPal occurred 
between January 19, 2021 and March 2021.  
 
Paragraphs 103, 109:  
The defendant was not truthful in reporting to Probation that he does not earn any income 
from HM-UP Development Alafaya Trails, LLC because the company sold its assets in September 
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 1 of 11

Page 2 of 11 
 
2022.  Shortly after the defendant was arrested in this case, on September 22, 2022, he sold the 
Orlando shopping center, the Shoppes at Alafaya Trail, to himself; he sold the shopping center to 
a corporation that is the defendant’s alter ego.  The warranty deed reflecting the sale indicates that 
Alafaya Trails sold the shopping center to a company named, 1200 Alafaya, LLC.  See Govt. Trial 
Exh. 3-3.  That company, 1200 Alafaya, was formed just days earlier, on August 31, 2022, and 
has as its principal address the defendant’s residence: 180 Bal Cross Drive, Bal Harbour, FL 33154.  
The company’s listed manager is 1200 Alafaya Manager, LLC, also with a listed address of 180 
Bal Cross Drive, Bal Harbour, FL 33154.  The warranty deed transferring the Orlando shopping 
center to 1200 Alafaya is signed by Jennifer Sheppard, as the Manager of 1200 Alafaya Manager.  
See id. 
The PSR should reflect the Shoppes at Alafaya as an asset of the defendant, and the 
defendant should be required to report to Probation the significant income he earns from this 
valuable asset. 
Paragraph 105: 
The government objects to the defendant’s characterization that HM Four, LLC is “active 
for the purpose of overseeing a 150,000 square foot shopping center and its common area 
requirements ….”  HM Four is the 99% owner of HM-UP Development Alafaya Trails, LLC 
(“Alafaya Trails”), which in turn owned the Shoppes at Alafaya until the defendant transferred the 
shopping center to 1200 Alafaya, LLC in September 2022.  The government is not aware of 
another shopping center (indirectly) owned by HM Four.  Even when Alafaya Trails owned the 
Shoppes at Alafaya, HM Four’s income tax returns (for tax years 2019-2020) as well as the bank 
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 2 of 11

Page 3 of 11 
 
account that the defendant opened for the HM Four EIDL application in 2020, showed that HM 
Four was a passive owner of Alafaya Trails.   
 
Paragraphs 75 & 118: 
 
The government objects to the total offense level of 25, which does not include a two-level 
enhancement under U.S.S.G. § 2B1.1(b)(12) because the offense involved conduct described in 
18 U.S.C. § 1040.  As discussed below, both the PPP and the EIDL fraud perpetrated by the 
defendant constitutes “conduct described in 18 U.S.C. § 1040.”  U.S.S.G. § 2B1.1(b)(12).   
 
Background 
The Robert T. Stafford Disaster Relief and Emergency Assistance Act (the “Stafford Act”), 
42 U.S.C. §§ 5121-5208, governs federal assistance to state and local governments in the event of 
an “emergency” or “major disaster.”  See id. § 5122(1), (2) (defining “[e]mergency” and “[m]ajor 
disaster”).  The President generally declares an emergency or major disaster at the request of “the 
Government of the affected State.”  Id. §§ 5170(a), 5191(a).  The Act authorizes a wide array of 
federal aid, including coordination services, “technical and advisory assistance,” and help with 
distributing “medicine, food, and other consumable supplies.”  Id. § 5170(a)(2)-(4).   
Following the onset of the COVID-19 pandemic and the subsequent recession, the 
President declared an emergency under the Stafford Act on March 13, 2020.  See Elizabeth M. 
Webster et al., Cong. Rsch. Serv., Stafford Act Declarations for COVID-19 FAQ 1 (Apr. 22, 2020), 
https://crsreports.congress.gov/product/pdf/R/R46326; 42 U.S.C. § 5191(b).  In the weeks that 
followed, he further authorized “major disaster” declarations for all 50 States under the Stafford 
Act.  See Webster, supra, at 1; 42 U.S.C. § 5170(a).  The Small Business Administrator issued 
disaster declarations for each State as well.  See Notice, Administrative Declarations of Economic 
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 3 of 11

Page 4 of 11 
 
Injury Disasters for the Entire United States and U.S. Territories, 85 Fed. Reg. 19,052 (Apr. 3, 
2020).  These declarations enabled the Small Business Administration (“SBA”) to exercise its 
authority to make or guarantee loans to small businesses that suffered a “substantial economic 
injury” caused by a disaster where the business was located.  15 U.S.C. § 636(b)(2)(A), (C).  
These loans were called “economic injury disaster loans” (“EIDLs”).  See 13 C.F.R. §§ 123.300-
123.304. 
On March 25, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security 
(“CARES”) Act, which established the Paycheck Protection Program that provided potentially 
forgivable loans to small businesses for use meeting payroll and, to a lesser extent, other operating 
costs.  See CARES Act § 1102, 134 Stat. 281, 286-94.  The CARES Act also increased funding 
for EIDLs, and enabled EIDL applicants to forgo certain eligibility requirements and to receive 
advance payments up to $10,000.  CARES Act §§ 1107(a)(6), 1110, 134 Stat. at 302, 306-07.  
Congress authorized multiple rounds of funding under the CARES Act (in March, April, and 
December of 2020). 
Argument 
The two-level enhancement pursuant to USSG §2B1.1(b)(12) applies “[i]f the offense 
involved conduct described in 18 U.S.C. 1040,” which in turn prohibits fraud “involving any 
benefit authorized, transported, transmitted, disbursed, or paid in connection with a major disaster 
declaration . . . or an emergency declaration under” the Stafford Act. USSG §2B1.1(b)(12); 
18 U.S.C. § 1040(a).  A “benefit” includes any “payment” or “money,” 18 U.S.C. § 1040(c), and 
there is no dispute that the COVID-19 pandemic was declared as both a major disaster and an 
emergency under the Stafford Act, as set forth above.  As explained below, section 1040(a)’s text, 
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 4 of 11

Page 5 of 11 
 
structure, context, and history establish that the PPP and EIDL funds the defendant sought to obtain 
by fraud in this case were “authorized, transported, transmitted, transferred, disbursed, or paid in 
connection with” the Stafford Act declarations.  18 U.S.C. § 1040(a).1 
A.  Text and Structure  
Section 1040(a)’s language, referring to benefits “paid in connection with a major disaster 
declaration . . . or an emergency declaration” is logically read to apply broadly to benefits paid in 
connection with a disaster or emergency that is the subject of a Stafford Act declaration.  The 
declaration triggers the statute’s applicability.  “If Congress intended a narrower interpretation, it 
could have easily used narrower language,” Mont v. United States, 587 U.S. ___, 139 S. Ct. 1826, 
1832-33 (2019), such as by writing subsection (a) to reach only benefits paid “as a result of” or 
“pursuant to” a Stafford Act declaration.  Cf. 42 U.S.C. § 5160(a) (“Any person who intentionally 
causes a condition for which Federal assistance is provided under this chapter or under any other 
 
1 1The government has found no case in which the application of U.S.S.G. §2B1.1(b)(12) was 
directly addressed.  In two Fourth Circuit decisions involving appeals by co-defendants, United 
States v. Griffin, 2024 WL 1505512 (4th Cir. Apr. 8, 2024), and United States v. Redfern, 2023 WL 
2823064 (4th Cir. Apr. 7, 2023), the defendants appealed the district court’s decision to impose the 
Section 2B1.1(b)(12) enhancement to the EIDL benefits (and not the PPP benefits) in connection 
with the defendants’ sentencing on COVID-related loan fraud.  The Fourth Circuit stated that it 
did not need to decide the issue, and upheld the imposition of the enhancement under a harmless 
error standard (The Court stated, “’we also have no need to pass on it here’ …. Assuming arguendo 
that the district court erred in applying § 2B1.1(b)(12), that error is clearly harmless because even 
if the court had decided the issue the other way, it would have imposed the same sentence, and that 
sentence would have remained reasonable.”).  Similarly, in Jones v. United States, 2023 WL 
6541023 (M.D. Fla. Oct. 6, 2023), the district court imposed the Section 2B1.1(b)(12) 
enhancement to the defendant’s wire fraud conviction relating to COVID-19 loans, but the 
Eleventh Circuit issued a per curiam decision affirming the conviction and granting defense 
counsel’s motion to withdraw, after finding there were “no arguable issues of merit” to warrant a 
direct appeal (11th Cir. Case No. 22-12484, March 29, 2023).  Nor was the enhancement an issue 
addressed in the collateral challenge under 28 U.S.C. § 2255. See id., 2023 WL 6541023, at *2.    
 
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 5 of 11

Page 6 of 11 
 
Federal law as a result of a declaration of a major disaster or emergency under this chapter shall 
be liable to the United States . . . .” (emphasis added)).   
The text of section 1040(a) suggests that Congress meant for subsection (a) to have an 
expansive scope, not a narrow one.  It used the phrase “in connection with” which typically bears 
a “broad interpretation.”  Mont, 139 S. Ct. at 1832 (quoting Merrill Lynch, Pierce, Fenner & 
Smith Inc. v. Dabit, 547 U.S. 71, 85 (2006)).  Congress preceded “in connection with” in section 
1040(a) with a litany of verbs (“authorized, transported, transmitted, transferred, disbursed, or 
paid”), which further connotes breadth.  See United States v. Shrader, 675 F.3d 300, 311 (4th Cir. 
2012) (“Congress often uses multiple words with overlapping meaning to capture a broad swath 
of conduct.” (quoting United States v. Lawreys, 653 F.3d 27, 41 (D.C. Cir. 2011) (Brown, J., 
dissenting in part))).   
Moreover, section 1040 must be read as a whole, and a narrow reading of subsection (a) 
“when viewed in isolation is untenable in light of [the statute] as a whole.”  Dep’t of Revenue 
v. ACF Indus. Inc., 510 U.S. 332, 343 (1994) (citation omitted).  The rest of section 1040 makes 
even clearer that the statute applies to benefits that do not have a direct relationship to a Stafford 
Act declaration.  Subsection (c) defines “benefit” to include not just federal benefits but also any 
benefit provided by “a State or local government, or other entity.”  Stafford Act declarations are 
made by the President of the United States, 42 U.S.C. §§ 5170(a), 5191(a), so any relationship 
between a Stafford Act declaration and benefits provided by a different sovereign—or an entity 
that is not governmental at all—would generally be indirect by definition.  Indeed, the 
government is aware of no benefits provided by private entities that directly relate to Stafford Act 
declarations.  And there appear to be few benefits provided by state or local governments that 
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 6 of 11

Page 7 of 11 
 
depend on a Stafford Act declaration.  Most references to the Stafford Act in state law refer to the 
acceptance and distribution of federal aid.  See, e.g., Idaho Code Ann. § 46-1025.2  Because only 
federal benefits are likely to have a direct nexus with a Stafford Act declaration, reading section 
1040 to require that kind of nexus would risk rendering superfluous much of subsection (c)—and 
the entire statute, since subsection (c) is a definitional provision—or at least leave much of it “with 
little, if any, meaningful application.”  Nijhawan v. Holder, 557 U.S. 29, 39 (2009).  “The canon 
against surplusage is not an absolute rule,” but it “is strongest when,” as here, “an interpretation 
would render superfluous another part of the same statutory scheme.”  Marx v. Gen. Revenue 
Corp., 568 U.S. 371, 385-86 (2013) (cited with approval in Yates v. United States, 574 U.S. 528, 
543 (2015).   
Section 1040’s jurisdictional provision reinforces the point.  Subsection (b) provides that 
the statute extends to benefits that (1) are provided “in or affect[ing] interstate or foreign 
commerce,” (2) are provided through the mail, or (3) come from the federal government.  These 
jurisdictional hooks, especially the first, strongly suggest that Congress intended for section 1040 
to reach all benefits provided in connection with a Stafford Act emergency or major disaster, not 
just benefits paid specifically pursuant to or as a result of a Stafford Act declaration, which would 
nearly always come from the federal government.  See Circuit City Stores, Inc. v. Adams, 532 
U.S. 105, 115 (2001) (“The phrase ‘affecting commerce” indicates Congress’ intent to regulate to 
 
2 See also 42 U.S.C. § 5122(2) (defining “[m]ajor disaster” under the Act as an event that 
warrants federal assistance “to supplement the efforts and available resources of States, local 
governments, and disaster relief organizations”).  Such benefits are still “provided by the United 
States,” under 18 U.S.C. § 1040(c), just through intermediaries.  See, e.g., City of Pembroke Pines 
v. FEMA, 510 F. Supp. 3d 1126, 1131 (S.D. Fla. 2021).  Section 1040 looks nothing like federal 
statutes that specifically target schemes to defraud recipients of federal funds.  E.g., 
18 U.S.C. § 666.   
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 7 of 11

Page 8 of 11 
 
the outer limits of its authority under the Commerce Clause.”).  Read as a whole, section 1040 
makes sense if it reaches benefits provided in connection with an incident triggering a Stafford Act 
declaration, not just benefits linked with the declaration itself.   
B. Context and History  
Section 1040’s background confirms the plain meaning of its text.  Congress enacted 
section 1040 in the Emergency and Disaster Assistance Fraud Penalty Enhancement Act of 2007 
(the “Disaster Fraud Act”), Pub. L. No. 110-179, § 2(a), 121 Stat. 2556, 2556-57 (2008).  See also 
id. § 5, 121 Stat. at 2557-58 (directing the Sentencing Commission to promulgate the section 1040 
sentencing enhancement).  Both the Senate and House committee reports—which represent the 
most useful form of legislative history, see Garcia v. United States, 469 U.S. 70, 76 (1986)—state 
that section 1040 was intended to “prohibit[] fraud in connection with any emergency or disaster 
benefit,” “including federal assistance or private charitable contributions,” the latter of which 
would seldom or never directly relate to a Stafford Act declaration.  S. Rep. No. 110-69, at 4 
(2007) (emphasis added); accord H.R. Rep. No. 109-473, at 18 (2006).  The legislation was 
spurred by the extensive fraud that followed Hurricanes Katrina and Rita, and the committee 
reports highlighted instances of fraud involving benefits with no direct connection to Stafford Act 
declarations.  See S. Rep. No. 110-69, at 2-3 (noting creation of “phony Katrina-related websites 
to exploit those who wished to contribute to legitimate disaster assistance efforts” and a volunteer 
who stole Red Cross funds intended for Katrina victims); H.R. Rep. No. 109-473, at 2 (same).  
Indeed, the Senate Report explained that the Disaster Fraud Act was enacted in response to general 
“concerns that the current provisions of title 18, United States Code, do not adequately address or 
deter fraud in connection with emergency and disaster assistance.”  S. Rep. No. 110-69. 
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 8 of 11

Page 9 of 11 
 
In addition, the same Disaster Fraud Act amended the federal wire- and mail-fraud statutes, 
18 U.S.C. §§ 1341 and 1343, to provide for enhanced penalties “[i]f the violation occurs in relation 
to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in 
connection with, a presidentially declared major disaster or emergency (as those terms are defined 
in [the Stafford Act]).”  Pub. L. No. 110-179, §§ 3, 4, 121 Stat. at 2557.  These provisions clearly 
require a connection only to the incident prompting a Stafford Act declaration, not the declaration 
itself.  Congress intended for these portions of sections 1040(a), 1341, and 1343 to mean the same 
thing.  See S. Rep. No. 110-69, at 6-7 (explaining that the amendments of sections 1341 and 1343 
“increase[] the penalties available” for wire and mail fraud “that occur[s] in connection with major 
disaster or emergency declarations” (emphasis added); H.R. rep. No. 109-473, at 5 (same).   
Furthermore, in the same Disaster Fraud Act, Congress required the U.S. Sentencing 
Commission to forthwith promulgate sentencing guidelines to provide increased penalties for 
persons convicted of fraud in connection with a major disaster declaration or an emergency 
declaration.  See Section 5(a) of the Disaster Fraud Act; see also, September 2008 U.S. 
Sentencing Commission Report to Congress in response to the Disaster Fraud Act.   The 
Sentencing Commission worded the final version of the enhancement in USSG §2B1.1(b)(12) 
broadly.  As explained by the Commission, “the broader directive in section 5(b) of the Disaster 
Fraud Act covers all ‘fraud or theft offenses in connection with a major disaster declaration’” 
which is why the Commission worded the enhancement to apply to all conduct “described in 18 
U.S.C. § 1040.”  See September 2008 U.S. Sentencing Commission Report to Congress, at 12.  
This is consistent with Disaster Fraud Act’s Senate Report, which explains that the changes 
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 9 of 11

Page 10 of 11 
 
brought by the Act were designed to "send a strong message that disaster relief crime is a serious 
crime." S. Rep. No. 110–69.  
C. PPP and EIDL Payments Are Benefits Covered by 18 U.S.C. § 1040 
It follows from the foregoing that the section 1040 sentencing enhancement in 
USSG §2B1.1(b)(12) applies in this case.  Section 1040 prohibits fraud involving benefits 
provided in connection with a major disaster or emergency that is the subject of a Stafford Act 
declaration—here, the COVID-19 pandemic.  The defendant’s fraud scheme involved PPP loans 
and EIDLs, benefits that were clearly provided in connection with the COVID-19 emergency.   
Moreover, in section 1110(f) of the CARES Act, Congress amended the Small Business 
Act specifically to authorize EIDLs in the event of “an emergency involving Federal primary 
responsibility determined to exist by the President under the [sic] section 501(b) of the [Stafford 
Act].”  15 U.S.C. § 636(b)(2)(D).  The President had declared such an emergency with respect 
to COVID-19 on March 13, 2020.  See Webster, supra, at 2.  
EIDLs were also authorized under the President’s major-disaster declarations under the 
Stafford Act, one of which was issued for Florida on March 23, 2020; and under the Small Business 
Administrator’s disaster declarations, one of which was issued for Florida on March 18, 2020.  
See 15 U.S.C. § 636(b)(2)(A), (C); Notice, Florida; Major Disaster and Related Determinations, 
85 Fed. Reg. 20,700 (Apr. 14, 2020); Notice, Administrative Declarations of Economic Injury 
Disasters for the Entire United States and U.S. Territories, 85 Fed. Reg. 19,052 (Apr. 3, 2020).  
Thus, COVID-19 EIDLs were unquestionably a benefit “paid in connection with a major disaster 
declaration . . . or an emergency declaration under” the Stafford Act. USSG §2B1.1(b)(12); 
18 U.S.C. § 1040(a).   
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 10 of 11

Page 11 of 11 
 
As explained above, the Section 2B1.1(b)(12) enhancement applies to the defendant’s 
fraudulent scheme to obtain PPP and EIDL loans.  The COVID-19 pandemic was the subject of 
disaster declarations.  This is exactly the type of disaster fraud case for which Congress directed 
the U.S. Sentencing Commission to create an enhanced penalty.  Disaster fraud is a serious crime 
and the penalty should reflect that. 
             
 
 
 Respectfully submitted, 
    
MARKENZY LAPOINTE 
  
 
UNITED STATES ATTORNEY 
 
By:   s/Aimee Jimenez___________  
 
 
 
 
 
 
 
Aimee C. Jimenez 
 
 
 
 
 
 
Assistant United States Attorney 
 
 
 
 
 
 
Court No. A5500795 
 
 
 
 
 
 
99 Northeast 4th Street 
 
 
 
 
 
 
Miami, Florida 33132-2111 
 
 
 
 
 
 
Tel: (305) 961-9028 
 
 
 
 
 
 
Email: aimee.jimenez@usdoj.gov  
 
 
 
 
CERTIFICATE OF SERVICE 
 
I HEREBY CERTIFY that on May 9, 2024, I electronically filed the foregoing Objections 
to the PSR with the Clerk of the Court using CM/ECF.     
s/Aimee Jimenez____________                           
 
 
 
 
 
 
Aimee C. Jimenez 
 
 
 
 
 
 
  Assistant United States Attorney  
Case 1:22-cr-20290-BB   Document 235   Entered on FLSD Docket 05/09/2024   Page 11 of 11

File and source

File

gov.uscourts.flsd.615773.235.0.pdf

Size

237,803 bytes

SHA-256

f808903597bbf0658da75c4f23642bd31f7d5807309767e61ff0e1daa445e633

Our copy

gov.uscourts.flsd.615773.235.0.pdf

Original

PACER (login required)