Letter re restitution and proposed restitution… — Letter re restitution and proposed restitution order as to… (Dkt. 25)

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U.S. District Court for the Eastern District of New York · No. 1:21-cr-00477-FB · Doc. 25 · 2023-02-15 · Docket on CourtListener

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U.S. Department of Justice 
 
 
United States Attorney 
Eastern District of New York 
 
CWE 
271 Cadman Plaza East 
F. #2020R00955 
Brooklyn, New York 11201 
 
 
February 15, 2023 
 
By Email and ECF 
 
The Honorable Frederic Block  
United States District Judge 
Eastern District of New York 
225 Cadman Plaza East 
Brooklyn, New York 11201 
 
Re: 
United States v. Charlene Wint 
 
Criminal Docket No. 21-477 (FB) 
 
Dear Judge Block: 
 
The government respectfully submits this letter regarding the restitution amount 
that should be ordered as part of the sentencing of Charlene Wint (the “defendant”), which 
occurred on November 17, 2022.  Because the full amount of the victim’s loss was within the 
scope of the criminal activity the defendant agreed to undertake and was reasonably foreseeable 
to Wint, the defendant is jointly and severally liable for the full amount of the victim’s loss.  
Therefore, the Court should order restitution in the amount of $3,500,000 plus interest.  
I. 
Background1 
The Paycheck Protection Program 
In March 2020, the President of the United States signed the Coronavirus Aid, 
Relief, and Economic Security (“CARES”) Act into law.  It was designed to provide emergency 
financial assistance to the millions of Americans who were suffering the economic effects of the 
COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of 
up to $349 billion in forgivable loans to small businesses for job retention and certain other 
expenses through a program referred to as the Paycheck Protection Program (“PPP”). 
To obtain a PPP loan, a qualifying business was required to submit a PPP loan 
application signed by an authorized representative of the business.  The PPP loan application 
 
1 Unless otherwise noted, the facts in this section come from the Information and Pre-
Sentencing Report (“PSR”) for the defendant, which was adopted by the Court without objection 
from the parties at sentencing on November 17, 2022. 
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required the business, through its authorized representative, to acknowledge the program rules 
and to make certain affirmative certifications to be eligible to obtain a PPP loan.  In the PPP loan 
application, the small business was required to state, among other things, its: (a) average monthly 
payroll expenses and (b) number of employees.  These figures were used to calculate the amount 
of money the small business was eligible to receive under the PPP.  In addition, businesses 
applying for a PPP loan were required to provide documentation showing their payroll expenses. 
The Economic Injury Disaster Loan Program 
The Economic Injury Disaster Loan (“EIDL”) program was a Small Business 
Administration (“SBA”) program that provided low­interest financing to small businesses, 
renters and homeowners in regions affected by declared disasters.  Another source of relief 
provided by the CARES Act was the authorization for the SBA to provide EIDLs of up to $2 
million to eligible small businesses experiencing substantial financial disruption due to the 
COVID-19 pandemic.  Under the program, the SBA was authorized to issue advances of up to 
$10,000 to small businesses within three days of applying for an EIDL Advance.  The amount of 
an EIDL Advance was determined based on the number of employees working for the applicant.  
The advance did not have to be repaid. 
To obtain an EIDL or EIDL Advance, a qualifying business was required to 
submit an application to the SBA and provide information about its operations, such as the 
number of employees, gross revenues for the 12-month period preceding the disaster, and cost of 
goods sold in the 12-month period preceding the disaster.  In the case of EIDLs for COVID-19 
relief, the 12-month period was the period preceding January 31, 2020.  The applicant also was 
required to certify that all the information in the application was true and correct to the best of 
the applicant's knowledge. 
EIDL applications were submitted directly to the SBA and processed by the SBA 
with support from a government contractor.  The amount of the loan, if the application was 
approved, was determined based, in part, on the information provided in the application about 
number of employees, revenue, and cost of goods, as described above.  Any funds issued under 
an EIDL were issued directly by the SBA.  EIDL funds could be used for payroll expenses, sick 
leave, production costs, and business obligations, such as debts, rent and mortgage payments.  If 
the applicant also obtained a loan under the PPP, the EIDL funds could not be used for the same 
purpose as the PPP funds. 
The Fraudulent Scheme 
The defendant worked as the second most senior employee at a bank branch in 
Manhattan (“Bank 1”).  Taking advantage of that position, the defendant engaged in a scheme 
where she and her co-conspirators fraudulently obtained approximately $3.5 million in PPP 
loans.  
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The defendant, co-conspirator #1, co-conspirator #2, and co-conspirator #3 (the 
“Bank Employees”),2 were employed at a retail branch of Bank 1 located at 125th Street, New 
York City.  Bank 1 is a national bank with locations around the country. 
Following the enactment of the CARES Act, the defendant and Bank Employees, 
together with others, effectuated a scheme to submit fraudulent PPP loan applications on behalf 
of Bank 1 customers who did not legitimately qualify for loans under the PPP program in 
exchange for “commissions” taken from loan proceeds.  The defendant and Bank Employees 
worked with a network of recruiters to identify borrowers who were either existing Bank 1 
customers or became Bank 1 customers after they were recruited.  In exchange for their 
assistance, the defendant and Bank Employees gave the recruiters “commissions” from the PPP 
loan proceeds.   
After borrowers were recruited to join the scheme, the defendant and Bank 
Employees assisted customers with all aspects of the PPP loan application process.  The 
defendant personally helped borrowers fill out fraudulent PPP loan application documents that 
contained fraudulent information.  As part of the scheme, the defendant and Bank Employees 
also worked with tax preparers to obtain false tax documents, which were provided as support for 
the fraudulent PPP applications to maximize the loan amount for each borrower’s business.  In 
addition, the defendant and Bank Employees submitted fraudulent EIDLs on behalf of recruited 
customers which also contained false information.   
In addition to relying on recruiters to find complicit customers, the defendant 
personally recruited many borrowers to the scheme.  Once recruited, the defendant directed 
applicants (who did not have legitimate businesses) to others who would assist them in 
fabricating documents needed for the applications.  This included Hashim Campbell 
(“Campbell”), an accountant, and co-conspirator #4 (another accountant not employed by the 
bank).  Campbell and co-conspirator 4 prepared false tax documentation, including false W2s 
and 941s, which overstated the applicants’ business payroll information.  Campbell and co-
conspirator #4 received approximately 10% of each loan that was supported by false tax 
documents.  In other cases, rather than sending the applicants to Campbell, the defendant and 
Bank Employees forwarded the applicants’ personal information to Campbell (e.g. name, 
business name, SSN, etc.) and Campbell used the information to prepare false tax documents, 
without ever meeting the loan applicant.  For applicants with legitimate businesses, Campbell 
inflated financial figures on tax documents so that the applicants would qualify for larger PPP 
loans.  For applicants with no businesses, Campbell created false tax returns. 
After Campbell prepared the false tax documents, he sent the documents, often 
via email, to the defendant and Bank Employees.   
Once the defendant’s borrowers’ PPP applications were complete, with all 
required paperwork, the defendant forwarded the applications to her supervisor for approval.  
The supervisor, who was a co-conspirator and the branch manager, was responsible for 
 
2 Some of these co-conspirators have been charged in other cases pending in this district 
before Your Honor.  
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reviewing and approving all the PPP loan applications from the branch.  The defendant was 
instructed by a co-conspirator to call applicants into the bank when their PPP loans were funded 
so the applicants could withdraw the money and make payments to the co-conspirators. 
The defendant and her co-conspirators profited from their scheme through the 
commissions they received from the straw borrowers.  This was done in two ways.  In some 
instances, once a borrower obtained a fraudulent PPP loan, one of the co-conspirators determined 
a “commission” amount each borrower owed the Bank Employees.  Other times, as part of the 
PPP application process, the defendant and the Bank Employees often required borrowers to sign 
“starter” checks, which were legally negotiable instruments often issued by banks to customers 
who opened new checking accounts.  Once the PPP loans were funded, the defendant and the 
Bank Employees used the signed starter checks to make withdrawals from borrowers’ accounts.  
In some instances, the defendant and Bank Employees used the starter checks to purchase 
cashiers’ checks, which they used to pay themselves the “commissions.” 
The defendant obtained thousands of dollars in “commissions” from the PPP loan 
proceeds after processing dozens of fraudulent PPP loans totaling approximately $3.5 million.  
The defendant demanded approximately $5,000 in loan proceeds from each of her bank 
customers that she helped to fraudulently obtain PPP loans and was aware that the Bank 
Employees demanded similar payments.  The defendant also submitted a number of EIDL 
applications on behalf of borrowers and was, at times, paid “commissions” with respect to the 
EIDLs. 
On September 23, 2021, the defendant pled guilty before the Honorable Roanne 
L. Mann, United States Magistrate Judge, Eastern District of New York, to a single-count 
Information charging her with participating in a conspiracy to commit bank and wire fraud, and 
in violation of Title 18, United States Code, Section 1349.  Subsequently, on November 17, 2022 
the defendant was sentenced to nine months of home confinement and restitution to be ordered 
within 90 days. 
II. 
  Applicable Law 
The Mandatory Victim Restitution Act (“MVRA”), 18 U.S.C. § 3663A, provides 
for mandatory restitution in all sentencing proceedings where (a) the offense was committed by 
fraud or deceit and (b) an identifiable victim has suffered a physical injury or pecuniary loss. 18 
U.S.C. §§ 3663A(a)(1), (c)(1)(A)(ii), (c) (1)(B).  The amount of restitution to be ordered is the 
“amount of loss caused by the specific conduct forming the basis for the offense of conviction.” 
United States v. Gushlak, 728 F.3d 184, 195 n. 7 (2d Cir.2013) (quoting United States v. 
Silkowski, 32 F.3d 682, 688 (2d Cir.1994)).  The Government bears the burden of establishing 
loss amount, and “[a]ny dispute as to the proper amount or type of restitution shall be resolved 
by the court by the preponderance of the evidence.”  United States v. Bahel, 662 F.3d 610, 647 
(2d Cir.2011) (quoting 18 U.S.C. § 3664(e)).  “The district court need not establish the loss with 
precision but rather ‘need only make a reasonable estimate of the loss, given the available 
information.’”  United States v. Carboni, 204 F.3d 39, 46 (2d Cir.2000) (quoting United States v.  
Jacobs, 117 F.3d 82, 95 (2d Cir.1997)).  There is no dispute that defendant’s offense is one to 
which mandatory restitution applies or that the victim identified by the Government is entitled to 
restitution. 
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The MVRA authorizes district courts to hold co-conspirators jointly and severally 
liable for restitution owed to the victims of a conspiracy.  See United States v. Nucci, 364 F.3d 
419, 423 (2d Cir.2004) (citing 18 U.S.C.A. § 3664(h)).  Rejecting the argument that “the MVRA 
provides for restitution based only on the conduct of the defendant, and not on the conduct of 
others,” the Second Circuit has held that a defendant is “liable for the reasonably foreseeable acts 
of all co-conspirators.”  United States v. Boyd, 222 F.3d 47, 50–51 (2d Cir.2000).  It does not 
matter that a defendant may “not have agreed on the details of the conspiracy” or may be 
“unaware” of his co-conspirator’s acts.  United States v. Gushlak, No. 03 CR 833, 2011 WL 
782295, at *3 (E.D.N.Y. Feb.24, 2011) (quoting United States v. Geibel, 369 F.3d 682, 689 (2d 
Cir.2004)).  Where a defendant “was a member of the conspiracy,” her “offense was committed 
pursuant to the common plan of the conspiracy,” and she “could reasonably have foreseen that a 
co-conspirator would commit the substantive offense,” she is liable for restitution arising out of 
those offenses.  Boyd, 222 F.3d at 51. 
III. 
Restitution in the Amount of $3,500,000 is Appropriate 
Here, the losses reflected in the proposed restitution order were readily 
foreseeable by the defendant.  Indeed, Wint pleaded guilty to conspiring with the Bank 
Employees, Campbell, and others to commit bank and wire fraud.  She undertook numerous acts 
in furtherance of the conspiracy, such as directing applicants for PPP loans (who did not have 
legitimate businesses) to others who would assist them in fabricating documents needed for the 
applications, taking kickbacks after individuals were fraudulently awarded loan money, and 
forwarding false applications to the branch manager for them to be submitted.  Even assuming 
that Wint had no knowledge of all false loans that were given out, it was reasonably foreseeable 
to her, as a bank co-conspirator, that her other co-conspirators would be preparing false loan 
applications, submitting them, and obtaining PPP loan money fraudulently. 
The loss amount was included within the PSR that was adopted by the Court, and 
no objected to by the parties.  See PSR ¶ 22 (“The defendant is accountable for a total of 
$3,500,000 in fraudulently obtained loans.”).  Additionally, the victim’s loss amount was laid out 
in the submission by the victim that was submitted prior to the sentencing and made part of the 
record by the Court.  The total loss that the defendant is jointly and severally liable for is 
$3,500,000. 
Further, “the purpose of restitution is essentially compensatory: to restore a 
victim, to the extent money can do so, to the position he occupied before sustaining injury.” 
United States v. Boccagna, 450 F.3d 107, 115 (2d Cir.2006).  Consistent with that purpose, the 
MVRA provides that a “court shall order restitution to each victim in the full amount of each 
victim's losses.”  18 U.S.C. § 3664(f)(1)(A).  Restitution should not be limited to the defendant’s 
ill-gotten gains.  The Second Circuit has conclusively rejected substitution of ill-gotten gains for 
a victim’s actual loss in awarding restitution.  See United States v. Zangari, 677 F.3d 86, 92–93 
(2d Cir.2012) (“We ... hold that a sentencing court ordering restitution under the MVRA may not 
substitute a defendant's ill-gotten gains for the victim's actual loss.”).  As the proper measure is 
the full amount the victim’s losses, the restitution order must reflect that sum. 
The Court retains jurisdiction to modify the terms of payment if there is a material 
change in defendant’s economic circumstance that may affect her ability to pay restitution, see 
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United States v. Kyles, 601 F.3d 78, 83-84 (2d Cir. 2010), including adjusting the payment 
schedule or even requiring immediate payment in full, as the interests of justice may require.  
See 18 U.S.C. § 3664(k).  The Court may adjust the payment schedule on its own motion, and 
section 3664 even permits a court to accelerate defendant’s schedule of restitution payments so 
her victims are promptly and justly compensated.  See United States v. Gilmartin, 12-cr-287, 
2018 WL 2059650, at *3 (S.D.N.Y. May 1, 2018).   Although the MVRA provides the Court 
with continuing jurisdiction to modify the timing of payment, 18 U.S.C. § 3664(k), that section 
makes no mention of altering the amount of payment.  See United States v. Hamburger, 414 F. 
Supp. 2d. 219, 227 (E.D.N.Y. 2006).  The Second Circuit in Kyles, 601 F.3d at 83, made it 
abundantly clear that, although a district court has equitable authority to modify a payment 
schedule, this authority does not extend to decreasing the amount of restitution.   
Lastly, no hearing is required.  “Pursuant to 18 U.S.C. § 3664(d)(5), so long as the 
victim’s losses are ascertainable at least ten days before [ruling on restitution], and the 
documents supporting the victim’s losses are provided to the defendant within this time-frame, 
the district court may decide restitution ... without holding a separate evidentiary hearing.” 
United States v. Hagerman, 506 F. App’x 14, 19 (2d Cir.2012); see also United States v. 
Sabhnani, 599 F.3d 215, 258 (2d Cir.2010) (district court did not abuse its discretion in declining 
“to hold a full-blown evidentiary hearing” on restitution).  Under the circumstances, the 
requirements for issuing a restitution order without holding a hearing have been satisfied.  The 
victim’s losses were ascertainable to defendant and copies of the documents supporting the 
victim’s losses were provided to defendants within a relevant time frame.  Wint cannot rebut 
these findings.  Additionally, there is sufficient evidence to conclude, based on the record, that 
Wint is liable for restitution payable to the victim identified by the Government, and no hearing 
is required. 
 
 
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Conclusion 
Accordingly, it is appropriate for the full amount of restitution, totaling 
$3,500,000 plus interest, to be imposed jointly and severally as to Wint, and her co-defendants.  
The proposed Order of restitution is attached. 
*** 
Because the proposed Order includes the name and address of the victim and it is 
an ongoing investigation regarding other members of the conspiracy, the government 
respectfully requests that Exhibit A to the restitution Order remain under seal except for the 
limited purpose of providing access to the clerk of the court. 
Additionally, the government requests that the Court exclude time under the 90-
day clock during the pendency of the motions until Your Honor’s decision. 
Respectfully submitted, 
BREON PEACE 
United States Attorney 
By: 
Chand W. Edwards-Balfour 
Assistant U.S. Attorney 
(718) 254-6238
Jennifer Bilinkas 
Department of Justice 
Trial Attorney 
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