Reply in Support of Motion for Preliminary Order of Forfeiture — United States v. Baver (Dkt. 191, D. Utah)

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The government's Reply in Support of Motion for Preliminary Order of Forfeiture in United States of America v. Allison Marie Baver, Case No. 2:21-cr-00520-JNP, in the U.S. District Court for the District of Utah, filed September 27, 2023. The United States argues that Ms. Baver's interpretation of "victim" in 18 U.S.C. § 981(a)(2)(C) has no support, and that the term should include a guarantor like the Small Business Administration that reimbursed the lending bank. It argues that no double repayment arises because the SBA, not the defendant, paid back the bank. The reply contends that the factors support a forfeiture money judgment equal to the proceeds she obtained and asks the Court to enter the order as requested.

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Case 2:21-cr-00520-JNP Document 191 Filed 09/27/23 PageID.2672 Page 1 of 18




TRINA A. HIGGINS, United States Attorney (7349)
JENNIFER K. MUYSKENS, Assistant United States Attorney (DC 475353)
TRAVIS K. ELDER, Assistant United States Attorney (11987)
Attorneys for the United States of America
111 South Main Street, Suite 1800
Salt Lake City, Utah 84111
(801) 524-5682
travis.elder@usdoj.gov

                             UNITED STATES DISTRICT COURT
                                     DISTRICT OF UTAH


UNITED STATES OF AMERICA,                          REPLY IN SUPPORT OF
                                                   MOTION FOR PRELIMINARY
                       Plaintiff,                  ORDER OF FORFEITURE

        vs.                                        Case No. 2:21-cr-00520-JNP

ALLISON MARIE BAVER,                               Judge Jill N. Parrish

                       Defendant.


        The United States of America submits this Reply in Support of Motion for Preliminary

Order of Forfeiture:

        Ms. Baver’s proposed interpretation of “victim” in 18 U.S.C. § 981(a)(2)(C) has no
        support in the law or reason.

        Common sense and reason dictate that the definition of “victim” under Section

981(a)(2)(C) should not be narrowly defined to exclude from its definition a guarantor like the

Small Business Administration (SBA) who has reimbursed the lending bank for its loss. It is no

logical leap to conclude that when Congress enacted Section 981(a)(2)(C) it did so to prevent

defendants in the loan fraud context from unfairly having to pay back a loan twice. No such

unfairness exists in this case because it was the SBA, not the defendant, who paid back the bank

on its loan.

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        Unsurprisingly, restitution is not reduced when victims receive compensation from

insurance or other sources. Under 18 U.S.C. § 3664(f)(1)(B), compensation a victim receives

from “insurance or any other source” is “not considered in determining the amount of

restitution.” The SBA is clearly the victim for restitution and should also be under Section

981(a)(2)(C). It would be ludicrous to conclude that Ms. Baver is entitled to credit for the

reimbursement made by the SBA to Meridian Bank. See Robbins v. Chronister, 435 F.3d 1238,

1241 (10th Cir. 2006) (“When statutory language reasonably admits of alternative constructions,

there is nothing remarkable about resolving the textual ambiguity against the alternative meaning

that produces a result the framers are highly unlikely to have intended.”).

        Even if the plain and ordinary meaning of “victim” was not broad enough to include

guarantors, the absurdity doctrine ensures that Ms. Baver does not get credit for the SBA’s

payment under Section 981(a)(2)(C). Under that doctrine, statutory interpretations that lead to

absurd results are rejected if other interpretations are consistent with legislative intent. In re

McGough, 737 F.3d 1268, 1276 (10th Cir. 2013). However, the doctrine only applies “when it

would have been unthinkable for Congress to have intended the result commanded by the words

of the statute—that is, when the result would be so bizarre that Congress could not have intended

it . . . .” Chronister, 435 F.3d at 1241. The idea that Congress could have intended to exclude

guarantors as victims and to effectively give a defendant credit on the forfeiture for a guarantor’s

loan reimbursement is ludicrous. Further argument is unnecessary to conclude the absurdity

doctrine is satisfied and the defendant’s interpretation should be rejected.




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          The defendant’s hypertechnical application of Rule 32.2(a) elevates form over
          substance without any showing of prejudice and should be rejected.

          The proceeds forfeiture provisions of 18 U.S.C. § 982(a)(2)(A) and 18 U.S.C.

§ 981(a)(1)(C) are both applicable forfeiture provisions to Ms. Baver’s 18 U.S.C. § 1014 offense

that provide for the forfeiture of very similar property:

    Section 982(a)(2)(A) Forfeiture Authority            Section 981(a)(1)(C) Forfeiture Authority
    [A]ny property constituting, or derived from,        Any property, real or personal, which
    proceeds the person obtained directly or             constitutes or is derived from proceeds
    indirectly, as a result of such violation.           traceable to [the offense].

Essentially, both statutes require a defendant to forfeit the proceeds of the crime to the United

States. These forfeiture authorities do have some differences:

    Section 982(a)(2)(A) Differences                     Section 981(a)(1)(C) Differences
    The Section 1014 offense must have affected          The United States may or may not be able to
    a financial institution.                             forfeit gross proceeds depending on the
                                                         applicability of the proceeds definition in 18
    The United States is entitled to forfeit gross       U.S.C. § 981(b)(2)(A) or (B).
    proceeds. 1
                                                         The defendant is entitled under 18 U.S.C.
    No deductions from the forfeiture are made           § 981(b)(2)(C) to “a deduction from the
    based on repayments of a loan in the context         forfeiture to the extent that the loan was
    of a Section 1014 offense.                           repaid, or the debt was satisfied, without any
                                                         financial loss to the victim.”

          Rule 32.2(a) should not be read to penalize the United States in seeking forfeiture simply

because a change in circumstances from the time of the indictment’s filing has resulted in the

financial institution receiving reimbursement from the SBA’s guaranty. Such a result does not

favor justice, nor does it safeguard the defendant from any prejudice. Whether the United States


1
 United States v. McGinty, 610 F.3d 1242, 1246 (10th Cir. 2010) (Section 982(a)(2) provides for “broad”
forfeiture authority; the word “any” means all).


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obtains forfeiture under Section 982(a)(2)(A) or Section 981(a)(1)(C), it gets the proceeds of the

crime. The defendant can claim no surprise, injustice, or prejudice here. In reality, a forfeiture

under Section 981(a)(1)(C) is often more advantageous for a defendant because of the more

favorable proceeds definition and the repayment allowance. Again, no prejudice here. Cf. United

States v. Joseph, 185 F. Supp. 3d 1290, 1293-94 (D. Utah 2016) (rejecting argument that the

court and the United States had failed to follow Rule 32.2(b)(1)(A)’s requirement of entering a

forfeiture order as soon as practical after a guilty verdict in part because the defendant had

“suffered no prejudice.”), aff'd, 705 F. App’x 711 (10th Cir. 2017).

       Although not binding Tenth Circuit authority, the logic and reasoning of the cases cited

by the government on this issue are sound and should be adopted by the Court. In Silvious, the

United States cited 18 U.S.C. § 982 and § 2314, and 21 U.S.C. § 853 as its forfeiture authorities

in the indictment. United States v. Silvious, 512 F.3d 364, 367 (7th Cir. 2008). After the

defendant pled guilty, the United States sought forfeiture under 18 U.S.C. § 981(a)(1)(C) and 28

U.S.C. § 2461(c) because it conceded that 18 U.S.C. § 982 only authorizes forfeiture for mail

fraud offenses that affect a financial institution, which did not apply to the defendant’s mail fraud

offense. Id. at 368-69. The district court held that the defendant would not suffer any prejudice

by “correcting the statutory basis of the forfeiture” because the indictment had a forfeiture

notice. Id. at 368. In affirming this decision, the Seventh Circuit rejected the defendant’s

argument that Rule 32.2(a) barred the court from entering a forfeiture order because the

government had not listed the “applicable statute” in the indictment’s forfeiture notice. Id. at

369. The circuit did not agree with the defendant’s reading of Rule 32.2(a) because the


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“‘essential purpose’ of notice is to inform the defendant that the government seeks forfeiture so

the defendant can marshal evidence in his defense.” Id. Since the indictment informed the

defendant of the United States’ intent to seek forfeiture and listed the target assets, “the wrong

forfeiture statute did not prevent Silvious from receiving notice under Rule 32.2(a).”

       The government also cited United States v. Joel, No. 8:11CR89, 2012 WL 2499424, at

*5-6 (M.D. Fla. June 5, 2012) (unpublished). In addition to relying on the reasoning of Silvious,

Joel also relied on United States v. Wall, 285 Fed. Appx. 675, 684 (11th Cir.2008). These cases,

which follow the majority view, describe similar situations to this case involving offenses that

turned out not to have affected a financial institution. Ms. Baver cites outlier United States v.

Annabi, 746 F.3d 83 (2nd Cir. 2014) in support of her argument. However, Annabi is

distinguishable. In that case, the government cited 18 U.S.C. § 981(a)(1)(C) instead of 18 U.S.C.

§ 982(a)(2). Id. at 85. Both statutes could have applied to the defendant’s offense and the district

court ordered forfeiture of the gross proceeds of the loan amount even though the defendant had

repaid the associated loan. Id. The Second Circuit reversed so that Annabi would get credit for

the loan repayment under the forfeiture statute cited by the government. Id. at 86. Given the

equities, the Annabi court’s decision is understandable, but those equities were not present in

Silvious, Joel, or Wall, nor are those equities present here. Instead, the equities favor reading

Rule 32.2(a) consistent with its purpose to ensure a defendant receives notice of the forfeiture

and can marshal a defense. The defendant received such notice here and proceeding under 18

U.S.C. § 981(a)(1)(C) presents no prejudice to Ms. Baver as it did to the defendant in Annabi

when the district court utilized 18 U.S.C. § 982 instead of the cited provision of Section


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981(a)(1)(C). Consequently, under the circumstances of this case where no prejudice inures to

the defendant, ordering forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C) does not violate Rule

32.2(a).

       Since the assets sought for forfeiture have the requisite nexus with the relevant
       offenses, the court must order their forfeiture without regard to ownership.

       At the preliminary order stage, under Rule 32.2(b)(1)(A), courts only makes one

determination regarding specific assets sought for forfeiture: whether the government has

established the requisite nexus between the property and the offense. If the court finds that the

property sought for forfeiture is connected to the crime in the manner provided in the forfeiture

statute, then “it must promptly enter a preliminary order of forfeiture . . . directing the forfeiture

of specific property[.]” Rule 32.2(b)(2)(A). Consideration of third-party ownership interests are

deferred to the ancillary proceeding. Id.

       For the Section 1014 offense, the court is only deciding whether the $9,014,830.76 seized

from FIB 4629; $465,936.99 seized from Meridian Bank account 8439; $33,932.39 seized from

Meridian Bank account 2022; and the $22,018.81 seized from Meridian Bank account 4101 have

the nexus to the crime as defined by the forfeiture authority. Under 18 U.S.C. § 981(a)(1)(C),

these seized funds must be ordered forfeit in the preliminary order of forfeiture if they are “any

property, real or personal, which constitutes or is derived from proceeds traceable to” Ms.

Baver’s Section 1014 offense. As shown at trial and in the United States’ motion, these seized

funds are traceable to the $10,000,000 PPP loan that Meridian Bank made to Allison Baver

Entertainment based on Ms. Baver’s false statements. Consequently, the United States has



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established the requisite nexus and the Court must order them preliminarily forfeited to the

United States.

       The same is true for the property involved in Ms. Baver’s Section 1957 offense. For that

offense, the court is only deciding whether all payments due and owing to Allison Baver

Entertainment, LLC by Fintage Collection Account Management B.V. under the terms and

conditions of a Collection Account Management Agreement entered between ABE and Fintage

Collection on June 6, 2020, have the nexus to the crime as defined by the forfeiture authority.

Under Section 982(a)(1), this asset must be ordered forfeit in the preliminary order of forfeiture

if it is “any property, real or personal, involved in such offense, or any property traceable to such

property.” These payments trace directly to the $150,000 payment involved in Ms. Baver’s

Section 1957 offense. Consequently, the United States has established the requisite nexus and the

Court must order this asset preliminarily forfeited to the United States.

       Ms. Baver “obtained” the PPP loan funds regardless of whether any of the loan
       proceeds ever reached her personal bank accounts because of her complete
       ownership and control of the entity that received the PPP loan funds.

       Ms. Baver urges the court to find that it cannot order forfeiture because based on the

Supreme Court’s decision in Honeycutt, but the reasoning of that decision and subsequent cases

interpreting it support ordering forfeiture. As this court noted recently in summarizing the

Honeycutt decision:

       Because the defendant in Honeycutt did not own the hardware store and did not
       obtain the profits for the chemical sales or otherwise personally benefit from the
       sales, the government was not entitled to a money judgment against him.

United States v. Kingston, No. 2:18-CR-00365-JNP, 2023 WL 2634692, at *3 (D. Utah Mar. 24,

2023) (unpublished). The factual circumstances in Honeycutt are obviously not comparable to
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this case in which Ms. Baver was the sole owner and controller of ABE. Rather, the

circumstances here are much closer to the facts in Kingston where this Court did order forfeiture.

In deciding the Kingston forfeiture, this Court considered whether the defendants “exercised a

degree of control over the fraudulently obtained funds that would justify holding him responsible

for their dissipation.” Id. at 4. In denying the forfeiture as to one of the defendants the court

found the facts did not indicate a sufficient “measure of control over the disposition of the funds

fraudulently obtained by the company.” Id. However, the Court ordered forfeiture as to another

defendant, Jacob Kingston, because the facts did indicate a sufficient measure of control. Id.

       The Court did not require a conviction of the company, Washakie Renewable Energy

(WRE), in Kingston, nor did it require that the criminal proceeds pass through Jacob Kingston’s

personal bank accounts before it ordered forfeiture, and it need not here. In fact, Ms. Baver’s

control of ABE is perhaps even greater than the control Jacob Kingston had over WRE. Whereas

it appears Jacob Kingston worked with other employees and principals of (WRE) in Kingston

(see Kingston, 2023 WL 2634692, at *4 (noting that even though Isaiah Kingston “executed

many of the wire transfers” it was Jacob who “ultimately decided where to transfer the money”)),

Allison Baver was the one and only person directing and controlling Allison Baver

Entertainment. She opened all the company’s bank accounts. She directed every movement of

funds. But for Ms. Baver, ABE would not have existed or acted in any manner. Ms. Baver’s

whole impetus for obtaining the PPP loan was to start her own business, a business that had one

principal and one employee at the time the loan was received: Ms. Baver. Numerous post-

Honeycutt cases have ordered forfeiture under similar circumstances. See, e.g., United States v.


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Goldstein, 989 F.3d 1178, 1203 (11th Cir. 2021), cert. denied sub nom. Bercoon v. United States,

142 S. Ct. 806, 211 L. Ed. 2d 501 (2022) (Honeycutt does not apply where each defendant

personally acquired total amount of fraud proceeds that were deposited into their jointly

controlled bank accounts that each defendant had access to); United States v. Saccoccia, 1 F.4th

64, 73 (1st Cir. 2021) ($136 million forfeiture money judgment upheld based on defendant’s

joint ownership of business account that tainted funds flowed through, which was “enough to

demonstrate”—even post-Honeycutt—that defendant obtained the funds for purposes of

forfeiture under the RICO forfeiture statute); United States v. Mathieu, 853 F. App'x 739, 742

(2d Cir. 2021) (unpublished) (forfeiture money judgment affirmed for Medicare healthcare fraud

scheme proceeds that was calculated in part from checks issued from two accounts that

defendant maintained; court rejected Honeycutt argument that defendant did not exercise

sufficient control over accounts because evidence at trial showed that defendant was the

signatory on both accounts that he directed Medicare to deposit funds into and used to issue

checks for fraud proceeds and deposit fraud proceeds); United States v. Fujinaga, Nos. 19-

10222, 21-10155, 2022 WL 671018, *6 (9th Cir. Mar. 7, 2022) (unpublished) (joint and several

forfeiture money judgment did not violate Honeycutt; district court found that defendant had

“full and exclusive authority over [corporate] accounts” that mail and wire fraud scheme

proceeds were deposited in); United States v. Dotson, 635 F. Supp. 3d 1326, 1333 (M.D. Fla.

2022) (Honeycutt did not prevent holding two co-defendants jointly and severally liable for a

forfeiture money judgment because both were co-owners of the entity used to perpetuate the

fraud and they, not their employees, personally benefited from the fraud by keeping the profits


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from the fraudulent transactions). Whether ABE is ever convicted or not and whether any of the

loan funds passed through Ms. Baver’s personal bank accounts, as Ms. Baver exclusively

dominated and controlled ABE, she is liable for a forfeiture money judgment for the $10,000,000

PPP loan deposited into ABE’s account.

       Imposing a forfeiture money judgment in the amount of the proceeds Ms. Baver
       obtained from her offense is exactly proportional to her offense and does not violate
       the Eighth Amendment.

       Contrary to Ms. Baver’s arguments, the requested $10,000,000 forfeiture money

judgment cannot violate the Eighth Amendment because it is exactly proportional to her offense.

Under United States v. Bajakajian, 524 U.S. 321, 334 (1998), a forfeiture violates the Eighth

Amendment if it is “grossly disproportionate to the gravity of a defendant’s offense.” In Joseph,

also a case that involved a Section 1014 offense, this Court outlined the factors used to determine

whether a forfeiture is grossly disproportionate:

       Under Tenth Circuit law, proportionality is assessed by:

               considering the nature of the offense, the relationship of the offense to
               other illegal activity, the value and function of the defendant’s property,
               the culpability of the claimant, the benefit reaped by the claimant, and the
               maximum sanction authorized by Congress for the offense.

Joseph, 185 F. Supp. 3d at 1294–95 (quoting United States v. Lot Numbered One of the Lavaland

Annex, 256 F.3d 949, 958 (10th Cir. 2001)). Bajakajian also directs that “judgments about the

appropriate punishment for an offense belong in the first instance to the legislature.” Bajakajian,

524 U.S. at 336. By authorizing the forfeiture of the proceeds of Ms. Baver’s Section 1014

offense, Congress has expressed its judgment about the appropriate punishment for that offense.

See United States v. Bikundi, 926 F.3d 761, 795 (D.C. Cir. 2019) (“In authorizing large forfeiture

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judgments for [health care fraud and money laundering] of which Florence and Michael were

convicted, Congress determined that the offenses are grave, which carries significant weight in

our analysis.”); United States v. Blackman, 746 F.3d 137, 144 (4th Cir. 2014) (“Because

questions of proportionality are reserved primarily to the legislature, the Bajakajian test is highly

deferential”).

        Moreover, Eighth Amendment analysis usually applies where the property to be forfeited

is not criminally derived or helped to facilitate the crime. For example, in Bajakajian, the money

at issue “was the proceeds of a legal activity and was to be used to repay a lawful debt” and the

defendant was convicted of a single instance of failing to file a Currency Transaction Report, a

reporting offense. Bajakajian, 524 U.S. at 339. In such a circumstance, it would have been

grossly disproportional to the gravity of the offense to forfeit the entire $357,144 that he failed to

report. Id.

        In contrast, where forfeiture represents the proceeds of the crime itself, courts have found

either that the Bajakajian factors do not apply, or, if they do, that forfeiture of the proceeds of the

crime is not grossly disproportional to the gravity of the offense. This is because forfeiture of

proceeds “simply parts the owner from the fruits of the criminal activity.” United States v.

Alexander 32 F.3d 1231, 1236 (8th Cir. 1994). See, e.g., Bikundi, 926 F.3d at 795 (given that the

forfeiture money judgment corresponded exactly to the proceeds the defendants derived from

their healthcare fraud and money laundering “the penalties were not ‘grossly disproportional’ to

[the defendant’s] crimes”); United States v. Bentancourt, 422 F.3d 240, 250-51 (5th Cir. 2005)

(“the Eighth Amendment has no application to the forfeiture of property acquired with


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proceeds”; the forfeiture of a winning lottery ticket purchased with drug proceeds therefore could

not violate the Excessive Fines Clause, regardless of the value of the lottery winnings; that the

forfeiture greatly exceeded the maximum statutory fine is irrelevant); United States v. Peters,

257 F.R.D. 377, 389-90 (W.D.N.Y. 2009) (questioning whether proportionality analysis even

applies to forfeiture of proceeds, but concluding that even if it does, requiring defendant to

forfeit gross amount of $23,154,259 in fraudulently obtained loans was not grossly

disproportional); Joel, 2012 WL 2499424, at *8-10 (forfeiture money judgment of $1,618,000

was not grossly disproportionate for defendant who was guilty of participating in “scheme to

induce 10 lenders to fund fraudulent mortgage loans totaling $1.848 million dollars, and

employing the mail and wire systems to facilitate the fraudulent conduct.”). See also United

States v. Lot 41, Berryhill Farm Estates, 128 F.3d 1386, 1395 (10th Cir. 1997) (pre-Bajikajian

case, holding “as a matter of law that forfeiture of drug proceeds pursuant to § 881(a)(6) can

never be constitutionally excessive.”). Accordingly, imposing a money judgment against Ms.

Baver equal to the proceeds of her Section 1014 offense would not be grossly disproportionate.

       Even if the Bajakajian analysis applied, imposing a money judgment against Ms. Baver

equal to the proceeds she fraudulently obtained would not be constitutionally excessive.

       Nature of the Offense and Relationship of Offense to Other Illegal Activity

       The offense in this case is nothing like the more technical reporting violation considered

in Bajakajian. Ms. Baver applied for and obtained the maximum amount available for a PPP loan

of $10,000,000. The funds in the PPP loan program were limited and her loan took funding and




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support away from others entitled to relief. 2 Before Ms. Baver applied to receive a loan with

Meridian Bank, numerous indicators showed she was not eligible including her experiences

applying for PPP loans with Lendio and Utah First Credit Union, which were not approved.

Micah Stanford, director of credit with Utah First Credit Union, explained to Ms. Baver in very

clear terms on April 21, 2020, that she did not qualify and was not eligible for a PPP loan

because “you have not paid any payroll to date.” 3




2
  During her trial testimony, Kandace Zelaya, an attorney for the SBA, testified that Congress
appropriated money to allow the SBA to guarantee PPP loans. The CARES Act originally included an
$349 billion appropriation for PPP loans, which was exhausted by April 14, 2020. Once the funds were
exhausted, no more loans could be made. Multiple rounds of legislation provided additional funding for
the PPP loan program. See also Lisa Desjardins, It took 13 days for the Paycheck Protection Program to
run out of money. What comes next?, Apr. 16, 2020, https://www.pbs.org/newshour/politics/it-took-13-
days-for-the-paycheck-protection-program-to-run-out-of-money-what-comes-next.
3
    GX 4.
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          The PPP application and instructions that Ms. Baver certified numerous times in applying

for PPP loans with Lendio, Utah First Credit Union, and Meridian Bank, 4 supported Mr.

Stanford’s advisements to Ms. Baver. For example:

      1. Ms. Baver certified that she read the statements included in the PPP loan application

          form, understood them, and was eligible to receive the PPP loan under existing rules:




      2. Ms. Baver certified that ABE “was in operation on February 15, 2020 and had employees

          for whom it paid salaries . . .” (emphasis added) even though she knew ABE had no

          employees on that date:




      3. Ms. Baver certified that the PPP loan would “be used to retain workers and maintain

          payroll” (emphasis added) even though ABE had no workers to retain and no payroll to

          maintain:




4
    See, e.g., GX 16(c).
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   4. Ms. Baver certified that she would provide the lender “documentation verifying the

       number of full-time equivalent employees on the Applicant’s payroll . . .” even though

       she knew that the documentation she provided related to hope for payroll:




   5. The form’s instructions described three time periods to use for calculating “Average

       Monthly Payroll” depending on the business type: a) 2019 (most businesses); b) the time

       period between February 15, 2019 and June 30, 2019 (seasonal businesses); or c) the time

       period from January 1, 2020 to February 29, 2020 (new businesses). This same

       information was provided to Ms. Baver in Mr. Sanford’s email cited above. Ms. Baver

       knew that her business did not fit into any of those periods because ABE had no

       employees during those time frames.




This evidence belies the idea Ms. Baver applied for the PPP loan confused about its eligibility

requirements. Ms. Baver’s lack of eligibility was all over the place and was conveyed to her in

plain terms. Ms. Baver’s conduct in fraudulently obtaining $10,000,000 in public funds is a

serious offense.




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        Whether the Property Constitutes Proceeds of Illegal Activity.

        As described above, the $10,000,000 forfeiture money judgment the United States seeks

represents the proceeds of Ms. Baver’s Section 1014 crime. Parting Ms. Baver from the proceeds

of her crimes cannot be considered constitutionally excessive. 5

        Harm Caused by the Illegal Activity

        Given the occurrence of Ms. Baver’s crime during a worldwide pandemic that was

wreaking havoc on the economic stability of our country, the harm is significant. The PPP loan

program was enacted to enable the Small Business Administration to quickly get aid to

businesses throughout the country. Due to the emergency nature of the situation, lenders were

permitted to rely on self-certifications made by borrowers to be honest and true and that same




5
  It should be noted that at the outset of their entry, the forfeiture money judgment for the money
laundering offense will most likely be reduced to zero and the forfeiture money judgment for the false
statement offense will most likely be reduced to $463,281.05. The United States has seized $9,536,718.95
of the $10,000,000 in PPP loan proceeds. As indicated in its motion, the United States intends, upon
successful forfeiture of the $9,536,718.95 to apply those funds to the forfeiture money judgments.
Whatever the government obtains from the forfeiture of ABE’s contractual interest related to the No Man
of God film, will also be applied to reduce the forfeiture money judgment. The seized funds will also help
reduce the restitution order. Pursuant to DOJ policy, unless it finds that Ms. Baver can pay both forfeiture
and restitution, the U.S. Attorney’s Office will recommend as part of the restoration process that the
Department of Justice permit application of the net value obtained from forfeited property to the
restitution order. In this way, the forfeited property will help satisfy both the forfeiture money judgment
and the restitution order. The authority to apply forfeited property to satisfy a restitution order is granted
to the Attorney General under 21 U.S.C. § 853(i)(1). The return of forfeited assets to victims is one of the
primary goals of the Department’s asset forfeiture program. Asset Forfeiture Policy Manual (2023), 14.I.
Consequently, the Attorney General routinely grants such requests. The DOJ approves restoration
requests if (1) both restitution to compensate victims and a related forfeiture (either civil, criminal, or
administrative) have been ordered; (2) the victims and amounts listed in the restitution order essentially
conform to the victims and amounts that would have been paid through the remission process; and (3)
other property is not available to fully satisfy the order of restitution. Asset Forfeiture Policy Manual
(2023), 14.II.B. So, while in theory forfeiture is on top of any restitution ordered, practically, forfeiture is
rarely pursued in that manner, and it is unlikely to be so pursued in this case.
                                                      16

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self-certification was relied upon to obtain the SBA’s 100% guarantee of the loan. 6 Ms. Baver

took advantage of this situation in fraudulently obtaining the maximum amount available under

the PPP program. Instead of going to an eligible business that needed the funds, the PPP funds

went to an ineligible company with zero employees to retain and no payroll to maintain.

Consequently, Ms. Baver’s offenses were no mere technical violations like the ones in

Bajakajian, but serious offense that took advantage of an emergency.

        Ms. Baver’s Culpability and The Benefit Reaped by Ms. Baver

        As the sole owner and operator of ABE, Ms. Baver is entirely culpable for her offenses.

She certified the application to Meridian Bank and solely orchestrated ABE’s obtaining the PPP

loan. She caused the loan proceeds to be deposited into and moved through ABE’s bank

accounts. The entire purpose of the crime was to help Ms. Baver start a business that but for the

illegally obtained loan monies she would not have had.

        The Maximum Sanction Authorized by Congress

        For Ms. Baver’s false statement to a bank conviction (Count Six), the maximum penalties

include 30 years in prison and a $1,000,000 fine under 18 U.S.C. § 1014, and forfeiture of the



6
  At trial, Kandace Zelaya testified that he PPP application process allowed applicants to self-certify their
eligibility for PPP loan when they submitted their application to the lender. The lender was able to rely on
the self-certifications by the applicant in reaching an approval decision. Lenders had minimal
underwriting obligations because the PPP was designed to get money out the door as fast as possible to
keep workers employed and receiving their paychecks. The loan applications and supporting documents
were not submitted directly to or reviewed by the SBA; rather they were submitted to the lender who
made the decision to approve the loan. To obtain the 100% guarantee, the lender had to certify to the SBA
that they received the information from the applicant and performed a review of the application and
approved the loan based on the criteria established by the SBA. The lender entered information into the
SBA electronic system, which generated an SBA loan number. Once the loan number was generated, the
SBA’s 100% guarantee attached to the loan.
                                                     17

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proceeds of Ms. Baver’s offense under 18 U.S.C. § 981(a)(1)(C). As indicated, the forfeiture

money judgment is tied directly to the proceeds Ms. Baver obtained from her offense.

Furthermore, the money judgment is likely to be reduced to only $463,281.05 or less if the

United States is successful in forfeiting the specific assets sought for forfeiture. This hardly

represents a disproportional penalty. See, e.g., United States v. Pocelli, No. 10-14777, 440 Fed.

Appx. 870, 879 (11th Cir. 2011) (unpublished) (forfeiture of gross amount of a bank fraud

scheme without an offset for what it cost to keep the scheme going was not excessive, even

though difference between the gross receipts and the net proceeds was three times the maximum

fine).

         Consequently, all the factors support imposing a forfeiture money judgment equal to the

proceeds Ms. Baver obtained from her offense.

         Conclusion

         Ms. Baver has failed to provide any valid reason why this court should not enter the

forfeiture order requested by the United States. Accordingly, the United States requests that the

Court enter the order as requested.

         Respectfully submitted,

                                               TRINA A. HIGGINS
                                               United States Attorney



                                               /s/ Travis K. Elder
                                               Travis K. Elder
                                               Assistant U.S. Attorney



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