Letter from Scott Erik Asphaug to Counsel, March 2, 2022 — United States v. Wells (Dkt. 21, D. Or.)

Summary

This March 2, 2022 letter from the U.S. Attorney's Office for the District of Oregon to defense counsel Scott L. Mullins sets out a revised plea offer to Kimberly Aralene Wells in Case No. 3:21-cr-00437-SI; it was filed April 19, 2022 as Dkt. 21. Wells agrees to plead guilty to Count 2, wire fraud, which carries a maximum of 20 years in prison. In the stipulated facts, Wells obtained an EIN for a fictitious business, "Kim's Cleaning, Inc.," claimed gross annual receipts of more than $600,000 and an average monthly payroll of more than $19,000, and induced Itria Ventures LLC to disburse $48,957.50 in PPP funds. With $2,500 in lender fees paid by SBA, the actual fraud losses come to $51,457.50. The office will recommend a two-level downward variance and a low-end sentence, anticipated to be at least 8 months' imprisonment, and Wells agrees to forfeit $48,957.50.

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Case 3:21-cr-00437-SI       Document 21        Filed 04/19/22     Page 1 of 7

PORTLAND MAIN OFFICE                                                                              EUGENE BRANCH
1000 SW Third Avenue, Suite 600                                                            405 E 8th Avenue, Suite 2400
Portland, Oregon 97204                                                                           Eugene, Oregon 97 40 I
(503) 727-1000                                                                                          (541) 465-6771
www.usdoj.gov/usao/or

Ryan W. Bounds                            U.S. DEPARTMENT OF JUSTICE                            MEDFORD BRANCH
Assistant U.S. Attorney                      United States Attorney's Office                     310 West Sixth Street
Ryan.Bounds@usdoj.gov                              District of Oregon                           Medford, Oregon 97501
(503) 727-1141                                                                                         (541) 776-3564
                                                   Scott Erik Asphaug
Reply to Portland Office
                                                 United States Attorney


                                                                        March 2, 2022

       Scott L. Mullins, Esq.
       Mullins Law Office, LLC
       1000 SW Broadway St., Suite 2300
       Portland, Oregon 97205

                Re:        United States v. Kimberly Aralene Wells
                           Case No. 3:21-cr-00437-SI

       Dear Counsel:

       This offer has been revised at your request.

       1.     Parties/Scope: This plea agreement is between this United States Attorney's Office
       (USAO) and defendant, and thus does not bind any other federal, state, or local prosecuting,
       administrative, or regulato1y authority. This agreement does not apply to any charges other than
       those specifically mentioned herein.

       2.      Charges: The defendant agrees to waive full discovery and substantive motions and to
       plead guilty to Count 2 of the Indictment filed in this matter, which charges her with Wire Fraud
       in violation of Title 18, United States Code, Section 1343. Defendant also admits the forfeiture
       allegation.

       3.      Penalties: The maximum penalties for Count 2, Wire Fraud, are 20 years in prison, a
       fine of $250,000 (or, if greater, twice defendant's gross gain or the victims' gross losses), and 3
       years of supervised release. In addition, defendant must pay a $100 fee assessment for each
       felony count of conviction. Defendant agrees to pay the fee assessment of $100 by the time of
       ent1y of guilty plea or explain to the satisfaction of the Court why this cannot be done.

       4.     Dismissal/No Prosecution: The USAO agrees to forgo any additional charges against
       defendant resulting from this investigation, if, first, all the essential facts underlying such charges
       are known to the USAO at the time of this agreement and, second, defendant is convicted and
       sentenced in conformity with this agreement.

       5.     Sentencing Factors: The parties agree that the Court must first determine the applicable
       adviso1y guideline range, then determine a reasonable sentence considering that range and the

          Case 3:21-cr-00437-SI       Document 21       Filed 04/19/22      Page 2 of 7




Scott L. Mullins, Esq.
Page2
March 2, 2022


factors listed in 18 U.S.C. § 3553(a). Where the parties agree that sentencing factors apply, such
agreement constitutes sufficient proof to satisfy the applicable evidentiaiy standard.

6.     Elements of the Offense: For defendant to be found guilty of Wire Fraud as alleged in
Count 2 of the Indictment, the government must prove the following elements beyond a
reasonable doubt:

   A. First, the defendant knowingly devised a scheme or plan to defraud, or a scheme or plan
      for obtaining money or property by means of false or fraudulent pretenses,
      representations, or promises;

   B. Second, the statements made or facts omitted as paii of the scheme were material, that is,
      they had a natural tendency to influence, or were capable of influencing, a person to part
      with money or property;

   C. Third, the defendant acted with the intent to defraud, that is, the intent to deceive and
      cheat; and

   D. Fourth, the defendant used, or caused to be used, an interstate wire communication to
      carry out or attempt to can-y out an essential part of the scheme.

Defendant stipulates that uncontested and admissible evidence of her relevant conduct as
summarized in paragraph 7, inji·a, establishes each of the foregoing elements beyond any
reasonable doubt.

7.      Factual Basis 'and Relevant Conduct: Defendant stipulates that the following is a true
and accurate summary of her offense conduct. She further agrees and avers that every statement
herein and every allegation in the Indictment is true and con-ect and that the government could
prove eve1y statement beyond a reasonable doubt at trial, including through evidence of these
admissions.
           a) In the spring of 2020, defendant was either unemployed or worked inte1mittently
               as a self-employed housecleaner. She was in a romantic relationship with Sean
               Kirkpatrick.
           b) After the CARES Act was enacted in March 2020, defendant learned from
               Kirkpatrick and others that she could procure, quickly and with limited scrutiny, a
               COYID-relief loan guaranteed by the United States Small Business
               Administration ("SBA") by submitting a fraudulent loan application on behalf of
               a fictitious or newly created shell company.
           c) To perpetrate this scheme, defendant obtained from the Internal Revenue Service
               an Employer Identification Number ("EIN") for a fictitious cleaning business,
               "Kim's Cleaning, Inc.," on January 5, 2021.
           d) On February 24, 2021, and again on April 14, 2021, defenda11t applied for
               Paycheck Protection Program ("PPP") funds from Itria Ventures LLC ("Itria') by

          Case 3:21-cr-00437-SI         Document 21       Filed 04/19/22     Page 3 of 7




Scott L. Mullins, Esq.
Page 3
March 2, 2022


                 submitting false and fraudulent applications via wire transmissions from Oregon
                 to Ittia's computer servers in New Jersey.
            e)     In her applications, defendant falsely claimed that "Kim's Cleaning, Inc.,"
                 posted gross annual receipts of more than $600,000 and maintained an average
                 monthly payroll of more than $19,000. In fact, the company existed in name only
                 and had no employees.
           f)      As a result of her false and fraudulent loan applications, defendant induced Itt·ia
                 to disburse a total of $48,957.50 to her online bank account in March 2021.
                 Defendant spent almost all the funds on personal expenses, including travel and
                 gambling.
           g)     In addition to the foregoing principal amounts, defendant caused SBA to pay
                 lender fees of $2,500 for defendant's PPP loan. All told, defendant caused actual
                 fraud losses of $51,457.50.
           h)     Defendant also submitted at least three fraudulent applications to the SBA for
                 Economic Inju1y Disaster Loans between July 3, 2020, and May 8, 2021. None of
                 these applications was successful.

The parties stipulate that the offense level applicable to Count 2 of the Indictment based on the
foregoing relevant conduct is 15, pursuant to U.S.S.G. § 2Bl.l(a)(l) (base offense level for wire
fraud of seven), (b)(l)(D) (six-level enhancement for loss exceeding $40,000 but less than
$95,000), (b)(IO) (two-level enhancement for sophisticated means).

8.     Acceptance of Responsibility: The defendant must demonstrate to the Court that
defendant fully admits and accepts responsibility under U.S.S.G. § 3El.1 for defendant's
unlawful conduct in this case. If defendant does so, the USAO will recommend a two-level
reduction in defendant's offense level. The USAO reserves the right to change this
recommendation if defendant, between plea and sentencing, commits any criminal offense, again
obstructs or attempts to obsttuctjustice as explained in U.S.S.G. § 3Cl.1, or acts inconsistently
with acceptance ofresponsibility as explained in U.S.S.G. § 3El.1.

9.      Waiver of Discovery: As a material te1m of this offer and agreement, defendant
expressly accepts the USAO's offer to make available the evidence gathered in the investigation
of this matter for on-site inspection and the USAO's production oflimited discove1y as of the
date of this agreement in full satisfaction of the government's discovery obligations in this case.
Defendant knowingly, intelligently, and voluntarily waives her rights to further production of
evidence or information from the government, even though she may be entitled to such
production pursuant to the Federal Rules of Criminal Procedure, the discovery orders of the
Court, and any prior demands for discove1y.

10.     Recommendation of Two-Level Downward Variance and Low-End Sentence: In
consideration of defendant's waiver of substantive motions, rights of appeal, collateral attack,
and full discove1y, her prompt acceptance of responsibility as described in paragraph 8, supra,

          Case 3:21-cr-00437-SI       Document 21      Filed 04/19/22     Page 4 of 7




Scott L. Mullins, Esq.
Page4
March 2, 2022


and her compliance with all other tenns of this agreement, the USAO will recommend a
downward variance of two levels and a sentence at the low end of the resulting Guideline range.
(Although the final recommendation will depend on defendant's criminal history, the USAO
anticipates that the government's sentencing recommendation will be at least 8 months'
imprisonment.) The USAO shall recommend defendant's period of incarceration be followed by
three years' supervised release. Defendant may argue for any sentence, including probation.

11.     Waiver of Appeal/Post-Conviction Relief: Defendant knowingly and voluntarily
waives the right to appeal from any aspect of the conviction and sentence on any grounds, except
for a claim that: (1) the sentence imposed exceeds the statutory maximum, (2) the Court arrives
at an advisory sentencing guideline range by applying an upward departure under the provisions
of Guidelines Chapters 4 or SK, or (3) the Comt exercises its discretion under 18 U.S.C.
§ 3553(a) to impose a sentence exceeding the advisory guideline sentencing range as determined
by the Comt at the time of sentencing without required notice to the parties. Should defendant
seek an appeal despite this waiver, the USAO may take any position on any issue on appeal and
may pursue any charges forgone pursuant to this agreement. Defendant also waives the right to
file any collateral attack, including a motion under 28 U.S.C. § 2255, challenging any aspect of
the conviction or sentence on any grounds, except on grounds of ineffective assistance of
counsel, and except as provided in Fed. R. Crim. P. 33 and 18 U.S.C. § 3582(c)(2).

        Defendant expressly agrees that these waivers shall remain effective if the USAO alters
its sentencing recommendation consistent with the terms of this agreement or because defendant
otherwise breaches this agreement.

12.     Full Disclosure/Reservation of Rights: The USAO will fully inform the PSR writer and
the Court of the facts and law related to defendant's case. Except as set forth in this agreement,
the parties reserve all other rights to make sentencing recommendations and to respond to
motions and arguments by the opposition.

13.      Court Not Bound: The Comt is not bound by the recommendations of the parties or of
the presentence report (PSR) writer. Because this agreement is made under Rule 1 l(c)(l)(B) of
the Federal Rules of Criminal Procedure, defendant may not withdraw any guilty plea or rescind
this plea agreement if the Comi does not follow the agreements or recommendations of the
parties.

14.      Payment of Full Restitution: Defendant agrees to an order of full restitution to all
victims of the offenses of conviction and her relevant conduct pursuant to 18 U.S.C. §§ 3663 and
3663A. Defendant specifically agrees that the Comt is required to and shall impose an order of
restitution to the SBA and Itria Ventures LLC in an amount of not less than $51,457.50.

      Defendant expressly authorizes the USAO to obtain a credit report on defendant.
Defendant agrees to provide waivers, consents, or releases requested by the USAO to access

          Case 3:21-cr-00437-SI         Document 21       Filed 04/19/22      Page 5 of 7




Scott L. Mullins, Esq.
Page 5
Mai-ch 2, 2022


records to verify the financial info1mation. Defendant also authorizes the USAO to inspect and
copy all financial documents and information held by the U.S. Probation Office.
The parties agree that defendant's failure to timely and accurately complete and sign the
Financial Disclosure Statement, and any update thereto, may, in addition to any other penalty or
remedy, constitute defendant's failure to accept responsibility under USSG § 3El.1.
Defendant agrees to submit to examination under oath and/or a polygraph examination by an
examiner selected by the USAO, on the issue of defendant's financial disclosures and assets.

        Transfer of Assets
        Defendant agrees to notify the Financial Litigation Unit of the USAO before defendant
transfers any interest in prope1ty with a value exceeding $ I 000 owned directly or indirectly,
individually or jointly, by defendant, including any interest held or owned under any name,
including tmsts, partnerships, and corporations.

        Restitution
        The Court shall order restitution to each victim in the full amount of each victim's losses
as detetmined by the Court. Defendant agrees to pay restitution for all losses caused by
defendant's relevant conduct, regardless of whether the Indictment alleges such conduct.

        Defendant understands and agrees that the total amount of any monetary judgment that
the Court orders defendant to pay will be due. Defendant further understands and agrees that
pursuant to 18 U.S.C. § 3614, defendant may be resentenced to any sentence which might have
originally been imposed if the court determines that defendant has lmowingly and willfully
refused to pay a fine or restitution as ordered or has failed to make sufficient bona fide efforts to
pay a fine or restitution. Additionally, defendant understands and agrees that the government
may enforce collection of any fine or restitution imposed in this case pursuant to 18 U.S. C.
§§ 3572, 3613, and 3664(m), notwithstanding any initial or subsequently modified payment
schedule set by the cornt. Defendant understands that any monetary debt defendant owes related
to this matter may be included in the Treasury Offset Program to potentially offset defendant's
federal retirement benefits, tax refunds, and other federal benefits.

         Pursuant to 18 U.S.C. § 3612(b)(l)(F), defendant understands and agrees that until a fine
or restitution order is paid in full, defendant must notify the USAO of any change in the mailing
address or residence address within 30 days of the change. Further, pursuant to 18 U.S.C. §
3664(k), defendant shall notify the Court and the USAO of any material change in defendant's
economic circumstances that might affect defendant's ability to pay restitution, including, but not
limited to, new or changed employment, increases in income, inheritances, monetary gifts, or any
other acquisition of as'sets or money.

15.     Forfeiture Terms:

       A.       Assets and Authority: By signing this agreement, defendant knowingly and
voluntarily forfeits all right, title, and interest in and to $48,957.50 pursuant to 18 U.S.C. § 982,

             Case 3:21-cr-00437-SI       Document 21       Filed 04/19/22      Page 6 of 7




Scott L. Mullins, Esq.
Page 6
March 2, 2022


which defendant admits represents proceeds defendant personally obtained, directly or indirectly,
as a result of defendant's criminal activity set forth in Count 2 of the Indictment.

        B.      No Alteration or Satisfaction: Defendant knowingly and voluntarily waives the
tight to a jury trial on the forfeiture of assets. Defendant knowingly and voluntarily waives all
constitutional, legal, and equitable defenses to the forfeiture of this money judgment, including
any claim or defense under the Eighth Amendment to the United States Constitution, and any
rights under Rule 32.2 of the Federal Rules of Criminal Procedure. Defendant further agrees
forfeiture of defendant's assets shall not be treated as satisfaction of any fine, restitution, cost of
imprisomnent, or any other penalty this Court may impose upon defendant in addition to
forfeiture. Defendant agrees that forfeiture of substitute assets as authorized pursuant to 21
U.S.C. § 853(p) shall not be deemed an alteration of defendant's sentence.

16.     Breach of Plea Agreement: If defendant breaches the te1ms of this agreement or
commits any new criminal offenses between signing this agreement and sentencing, the USAO is
relieved of its obligations under this agreement, but defendant may not withdraw any guilty plea
or rescind her waivers of appeal and post-conviction relief, as desctibed in paragraph 11, supra.

         If defendant believes that the government has breached the plea agreement, defendant
must raise any such claim before the district court, either prior to or at sentencing. If defendant
fails to raise a breach claim in district court, defendant has waived any such claim and shall be
precluded thereby frm;n raising a breach claim for the first time on appeal.

17.      Memorialization of Agreement: No promises, agreements, or conditions other than
those set forth in this agreement will be effective unless memorialized in writing and signed by
all parties listed below or confmned on the record before the Court. If defendant accepts this
offer, please sign and attach the original of this letter to the Petition to Enter Plea.




                                                                            (Continued on next page.)

          Case 3:21-cr-00437-SI       Document 21      Filed 04/19/22    Page 7 of 7




Scott L. Mullins, Esq.
Page?
March 2, 2022


18.    Deadline: This plea offer expires if not accepted and signed by defendant and counsel
and received by the USAO by noon on March 4, 2022.


                                                    Sincerely,

                                                   SCOTT ERIK ASPHAUG
                                                   United States Attorney



                                                   r:t::w7::::-~
                                                   Assistant United States Attorney

I have carefully reviewed every part of this agreement with my attorney. I understand and
voluntarily agree to its terms. I expressly waive my rights to appeal as outlined in this
agreement. I wish to plead guilty because, in fact, I am guilty.




        I represent the defendant as legal counsel. I have carefully reviewed every part of this
agreement with defendant. To my knowledge, defendant's decisions to make this agreement and
to plead guilty are info1med and voluntary ones.


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