Government’s Sentencing Memorandum — United States v. Ransome (Dkt. 26, W.D.N.C.)

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The government's sentencing memorandum in United States v. Joseph Ransome, Docket No. 3:21-cr-22-RJC, in the U.S. District Court for the Western District of North Carolina, filed January 18, 2022 as Document 26. It recounts that a Bill of Information filed January 25, 2021 charged Ransome with one count of wire fraud in relation to a disaster benefit under 18 USC § 1343, and that he pleaded guilty on January 29, 2021. The memorandum describes CARES Act unemployment benefits and states that the defendant sought more than $150,000 in unemployment benefits, that the SBA paid out one loan of $9,000 and later recovered it, and that the intended loss exceeds $163,000. It argues for a guidelines sentence and notes that NASA Federal Credit Union was ordered to remit $27,432 toward restitution.

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UNITED STATES DISTRICT COURT FOR THE
                       WESTERN DISTRICT OF NORTH CAROLINA
                                CHARLOTTE DIVISION

UNITED STATES OF AMERICA            )               DOCKET NO.: 3:21-cr-22-RJC
                                    )
      v.                            )               GOVERNMENT’S SENTENCING
                                    )               MEMORANDUM
JOSEPH RANSOME                      )
____________________________________)

       NOW COMES the United States of America, by and through Dena J. King, United States

Attorney for the Western District of North Carolina, and hereby submits this sentencing

memorandum.

I.     PROCEDURAL BACKGROUND

       On January 25, 2021, a Bill of Information was filed in the Western District of North

Carolina charging the defendant, Joseph Ransome, with one count of wire fraud in relation to a

disaster benefit, in violation of 18 USC § 1343. Doc. 1, Information. On January 29, 2021, the

Defendant pleaded guilty to that count. See Docs. 3 and 4, Plea Agreement and Factual Basis.

The Factual Basis and the Statement of Relevant Conduct were fully incorporated into the

Presentence Report (“PSR”). Doc. 21, PSR at ¶¶ 5-10 and 12-14.

II.    FACTUAL BACKGROUND

       In March 2020, in response to the many challenges presented by the pandemic, Congress

passed the CARES ACT, Pub. L. 116-136. The CARES Act expanded states’ ability to provide

unemployment insurance for many workers impacted by the COVID-19 pandemic, including for

workers who are not ordinarily eligible for unemployment benefits. The CARES Act provided

for an additional $600 weekly payment, known as “Federal Pandemic Unemployment

Compensation” or “FPUC,” to certain eligible individuals who were receiving other benefits

under state law.

                                               1

       Case 3:21-cr-00022-RJC-DSC Document 26 Filed 01/18/22 Page 1 of 7

        From March 2020 through July 2020, the Defendant applied for fraudulent

unemployment insurance (UI) benefits in North Carolina, New Jersey, Connecticut, Florida,

Minnesota, New York, Massachusetts, Main, Washington, and Illinois. The filed claims for UI

benefits included false representations about the Defendant’s place of employment and reasons

for termination. For example, the Defendant falsely claimed to have been laid off from Walmart

in North Carolina due to COVID, when in truth he was terminated for non-COVID-related

reasons. In addition, Ransome claimed prior employment with at least four companies that he

never worked for and falsely claimed he was laid off from some of the companies because he

had been diagnosed with COVID. On some occasions, Ransome also used a social security

number and mailing address that did not belong to him.

        In addition to the UI fraud, Ransome fraudulently applied to the Small Business

Administration (SBA) for four separate Economic Injury Disaster Loans (EIDL). Ransome used

four different fictitious entities in these applications – Ransome Investments, Ransome Financial,

Rosa Milk and Dairy, and Ransome Pizza – and provided SBA with false financial information

to purportedly qualify for the loans. The SBA paid out one of the loans and deposited $9,000

into Ransome’s bank account, though the SBA eventually determined the application was

fraudulent and recovered the funds. In an additional fraud, Ransome used another individual’s

social security number to apply for a car loan, though he used his own name in the application.

Ransome has not defaulted on this loan. In total, the intended loss is more than $163,000 1.

III.    ADVISORY GUIDELINES

        In determining the appropriate sentence, “a district court must begin by correctly

calculating the applicable Guidelines range.” United States v. Evans, 526 F.3d 155, 160 (4th Cir.


11
  After receipt of the fraudulent UI benefits, many of the states uncovered Ransome’s fraud and were able to recoup
some of the fraudulently deposited funds. See Doc. 21 at ¶ 14 (Chart).

                                                        2

        Case 3:21-cr-00022-RJC-DSC Document 26 Filed 01/18/22 Page 2 of 7

2008). The advisory Guidelines are “the starting point and the initial benchmark.” Gall v. United

States, 552 U.S. 38, 49 (2007). The Guidelines “seek to embody the § 3553(a) considerations,

both in principle and in practice. . . . [I]t is fair to assume that the Guidelines, insofar as

practicable, reflect a rough approximation of sentences that might achieve § 3553(a)’s

objectives.” Rita v. United States, 551 U.S. 338, 350 (2007). “[A] Guidelines sentence will

usually be reasonable, because it reflects both the Commission’s and the sentencing court’s

judgment as to what is an appropriate sentence for a given offender.” Id. at 351.

        The PSR calculated a total offense level of 16 and a criminal history I, corresponding to

an advisory guideline range of 21 to 27 months. Doc. 21 at ¶¶ 21-31, 44, and 76.

IV.     18 USC § 3553(a) SENTENCING FACTORS

        The appropriate sentence is for the District Court to determine based on the factors

enumerated in 18 U.S.C. § 3553(a), and “any sentence, within or outside of the Guidelines range,

as a result of a departure or of a variance, must be reviewed by appellate courts for reasonableness

pursuant to an abuse of discretion standard.” United States v. Diosdado-Star, 630 F.3d 359, 365

(4th Cir. 2011). The 18 U.S.C. § 3553(a) factors dictate a sentence within the advisory guideline

range. While the post-Booker sentencing regime affords the sentencing court discretion in

selecting the appropriate sentence, “[a]s a matter of administration and to secure nationwide

consistency, the advisory Guidelines should be the starting point and the initial benchmark” in

determining the appropriate sentence. Gall, 522 U.S. at 49. The Fourth Circuit has stated it even

more strongly, describing the Guideline offense level as “the crucial ‘starting point,’ as well as the

‘initial benchmark’” in the sentencing process. United States v. Lewis, 606 F.3d 193, 199 (4th Cir.

2010) (quoting Gall, 522 U.S. at 49) (emphasis added).




                                                    3

       Case 3:21-cr-00022-RJC-DSC Document 26 Filed 01/18/22 Page 3 of 7

        A lengthy period of incarceration also serves to deter not just the Defendant but other

would-be fraudsters. Regarding specific deterrence and the need to protect the public, according

to a recent report issued by the U.S. Sentencing Commission, longer sentences deter recidivism.

Length of Incarceration and Recidivism, Ryan Cotter, PH.D., April 2020, at 30 (“The

Commission found a statistically significant deterrent effect for offenders incarcerated for more

than 60 months when compared to similar offenders incarcerated for shorter periods of time.”). 2

        As to general deterrence, as the Eleventh Circuit has noted, “[b]ecause economic and fraud-

based crimes are more rational, cool, and calculated than sudden crimes of passion or opportunity,

these crimes are prime candidates for general deterrence.” United States v. Martin, 455 F.3d 1227,

1240 (11th Cir. 2006) (internal quotation omitted). “Defendants in white collar crimes often

calculate the financial gain and risk of loss, and white collar crime therefore can be affected and

reduced with serious punishment.” Id. at 1227. Put differently, as the Seventh Circuit has

explained, “[t]he system of penalties under the Guidelines is constructed on the belief that . . .

longer sentences of imprisonment, are more effective deterrents. A large body of evidence supports

this intuition.” United States v. Turner, 998 F.2d 534, 536 (7th Cir. 1993).

        The nature and circumstances of the offense and the need to afford adequate deterrence

warrants a guidelines sentence. The Defendant’s scheme to fraudulently obtain more than

$150,000 in unemployment benefits depleted the available funds for legitimate applicants. The

Defendant’s actions can only have been motivated by self-interest and greed at a time when

millions of Americans were suffering from the economic impact of a global pandemic. As the

pandemic spread, so too did fraud related to the unemployment benefits program and other

programs designed to provide critical economic assistance. The United States’ recommended


2
 Available at: https://www.ussc.gov/sites/default/files/pdf/research-and-publications/research-
publications/2020/20200429_Recidivism-SentLength.pdf.
                                                    4

       Case 3:21-cr-00022-RJC-DSC Document 26 Filed 01/18/22 Page 4 of 7

sentence of imprisonment in this case is thus appropriate to provide both specific and general

deterrence. Such a sentence will send a clear message to the Defendant and other offenders that

there are serious consequences for defrauding government pandemic relief programs. Actors like

the Defendant who seek to defraud these programs not only drain the program of limited funding,

they also make it more difficult for administrators of government and other relief programs to get

aid to individuals that qualify for and need it. The Defendant’s sentence will serve as a warning

and deterrent to others inclined to exploit pandemic relief programs. See United States v. Morgan,

635 F3d. Appx. 423, 450 (10th Cir. 2015) (“Deterrence is a crucial factor in sentencing decisions

for economic and public corruption crimes…”); United States v. Hayes, 762 F.3d 1300, 1308 (11th

Cir. 2014) (“In a number of opinions … we have explained that general deterrence is an important

factor in white-collar cases, where the motivation is greed.”). The Fourth Circuit has explicitly

recognized the importance of incarceration for defendants convicted of white collar crimes such

as tax evasion, theft, fraud and embezzlement. See United States v. Engle, 592 F3.d 495, 501 (4th

Cir. 2010).

V.     TWO-LEVEL UPWARD VARIANCE

       The United States moves for a two-level upward variance from a Guidelines range of 16

(21-27 months) to a Guidelines range of 18 (24-30 months). In the filed plea agreement, the

parties agreed that a two-level enhancement was appropriate under USSG § 2B1.1(b)(12)

because the offense involved conduct described in 18 USC § 1040. See Doc. 3 at ¶ 7(b). Section

1040 generally covers fraud in connection with major disaster or emergency benefits. The fraud

must be in a matter paid in connection with a major disaster declaration under section 401 of the

Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. § 5170) or an

emergency declaration under section 501 of the Robert T. Stafford Disaster Relief and



                                                5

       Case 3:21-cr-00022-RJC-DSC Document 26 Filed 01/18/22 Page 5 of 7

Emergency Assistance Act (42 U.S.C. § 5191).

        In April 2021, the Department of Justice issued new guidance to Assistant United States

Attorney’s prosecuting COVID-19 fraud cases regarding the use of 18 USC § 1040, and the

related USSG enhancement, in relation to CARES Act funds. The guidance directed that

AUSAs should use restraint in seeking this two-level enhancement because the conduct does not

involve funds obtained under the Stafford Act. 3 As a result, the United States filed an objection

to the presentence report requesting that the enhancement not be applied. At the time of the

objection the United States also notified the Defendant that the fact that Defendant’s conduct

related to disaster benefits issued under a different statute may be a basis for a two-level upward

variance.

        The United States respectfully moves for such a two-level upward variance. Ransome’s

conduct involved taking advantage of a world-wide pandemic and the resulting emergency

governmental efforts to ameliorate the impact. The Defendant exploited the fact that the

unemployment benefits program was designed to release funds as quickly as possible in order to

provide a lifeline to individuals across the country. Even if the enhancement in the Guidelines

does not specifically apply to conduct under the CARES Act, the reasoning behind such an

enhancement – to punish defendants who seek to profit from national disasters and who take

advantage of the government’s desire to get money quickly into the hands of those hurt by the

disasters – still applies.




3
 On March 13, 2020, President Trump declared the existence of a national emergency pursuant to § 501(b) (42
U.S.C. § 5191(b)) of the Stafford Act in response to the COVID-19 pandemic. However, the funds involved in
Ransome’s case were ultimately authorized under the CARES Act, Pub. L. No., 116-136, not under the Stafford Act.
The CARES Act expanded unemployment benefits payments – such as those Ransome admitted to fraudulently
obtaining.

                                                       6

       Case 3:21-cr-00022-RJC-DSC Document 26 Filed 01/18/22 Page 6 of 7

VI.     CONCLUSION

        For the foregoing reasons, the United States recommends a sentence of 24 months, the low-

end of the advisory guidelines range, as well as a term of supervised release, and restitution of

$44,172 4. See Doc. 21 at ¶¶ 15-17 (full discussion of breakdown of restitution). A sentence of 24

months, the low-end of the advisory guideline range, reflects the seriousness of the offense and

deters both the Defendant and others from defrauding government pandemic relief programs.

        RESPECTFULLY SUBMITTED, this the 18th day of January, 2022.

                                                    DENA J. KING
                                                    UNITED STATES ATTORNEY

                                                    /s/ Caryn Finley
                                                    Assistant United States Attorney
                                                    United States Attorney’s Office
                                                    Western District of North Carolina
                                                    New York Bar Number: 3953882
                                                    227 West Trade Street, Suite 1650
                                                    Charlotte, North Carolina 28202
                                                    Telephone: (704) 344-6222
                                                    E-mail: Caryn.Finley@usdoj.gov




4
  Pursuant to a Joint Motion for Turnover of Funds and to Accept Early Payment of Monetary Penalties, Doc. 18, the
Court ordered NASA Federal Credit Union to remit $27,432 to the Clerk of Court to be applied to the Defendant’s
restitution to be imposed in this matter. See Doc. 20.

                                                        7

        Case 3:21-cr-00022-RJC-DSC Document 26 Filed 01/18/22 Page 7 of 7

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