Court filing
Defendant's Response to the Government's Sentencing Memorandum — United States v. Alexander Barabash (D. Md.)
Filed June 19, 2023 in U.S. v. Barabash; one of 10 filings from this case.
Record facts
| Court | U.S. District Court, District of Maryland |
|---|---|
| Filed | 2023-06-19 |
U.S. District Court, District of Maryland · No. 1:22-cr-00232-JKB · Doc. 25 · 2023-06-19 · Docket on CourtListener
Full text
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
(Northern Division)
____________________________________
:
UNITED STATES OF AMERICA
:
:
v.
:
No. 1:22-cr-232-JKB
:
:
ALEXANDER BARABASH,
:
:
Defendant.
:
____________________________________:
DEFENDANT’S RESPONSE TO THE
GOVERNMENT’S SENTENCING MEMORANDUM
Since the inception of this case, Mr. Barabash has accepted complete responsibility for his
actions and acknowledged that his company iDesignBuild was ineligible for PPP funds as it did
not have W-2 employees, but rather employed independent contractors. For some unknown reason,
whether it be a more catchier press release, or to bring more attention to the national task force
created by the Department of Justice to prosecute these cases over more traditional federal crimes,
such as, Hobbs Act robberies, drug trafficking, and unlawful firearm possession, the Government
goes to great lengths to give the impression that Mr. Barabash engaged in some widespread,
intricate, and systematic fraud and used the proceeds of his fraud to live “lavishly.”1 That is not
this case. While it may be the vast majority of cases that the Government usually prosecutes, and
what it may have even believed was this case when it initially opened an investigation, the facts
1 As foreshadowed in Mr. Barabash’s sentencing memorandum (D.E. 23 at 11), the Government
makes this characterization solely from Mr. Barabash’s purchase of a vehicle from an account that
already contained $350,000 prior to the introduction of PPP funds, where the vehicle was
ultimately refinanced above purchase price and the proceeds transferred back into the account that
contained the PPP funds. While the Government would like to give the impression — like the
many cases cited nationwide — where the PPP funds were used exclusively for lavish personal
purposes and not for business purposes, that is not this case.
Case 1:22-cr-00232-JKB Document 25 Filed 06/19/23 Page 1 of 5
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do not bear out those beliefs.
The Government’s sentencing memorandum also completely disregards M&T Bank’s Vice
President for Business Banking Peyton Morin (https://www.linkedin.com/in/peytonmorin, last
visited June 19, 2023) encouraging Mr. Barabash to apply for a larger loan and that the tax
documents were prepared and signed by Mr. Barabash’s accountant and his accountant participated
in a phone conference with bank personnel when issues were raised regarding the documentation
in support of the loans. Whether or not those facts are inconvenient for the Government’s narrative,
they nonetheless put into appropriate context Mr. Barabash’s conduct in this case.
Absent knowingly submitting inaccurate loan applications (and supporting documents)
during a global pandemic to save his company from economic ruin, there is absolutely no history
of Mr. Barabash engaging in any widespread business fraud or self-dealing for his own financial
benefit. Mr. Barabash’s company did excellent work and employed numerous individuals,
contractors, and suppliers in the process. The Government, nonetheless, uses Mr. Barabash’s
impeccable business record and positive life history to somehow justify why this Court should
sentence him harsher than others. See Gov’t Mem. at 7 (“He reports no history of mental or
psychiatric illness and no history of mental, emotional, physical, sexual or other abuse . . . These
characteristics may, on one level, show that [the] Defendant has a clear path toward rehabilitation.
But, on the other hand, the same characteristics show that [the] Defendant’s criminal conduct did
not arise from necessity or extreme hardship”). Brushing aside that the pandemic had the effect of
destroying Mr. Barabash’s business, as well as, all those who worked for him and whose livelihood
depended upon his business’ viability; the fact that Mr. Barabash did not have a significant criminal
record or history of drug use or gambling cannot be an aggravating factor. If he had all of them,
the Government would be arguing that Mr. Barabash deserves a lengthy sentence to punish his
Case 1:22-cr-00232-JKB Document 25 Filed 06/19/23 Page 2 of 5
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life-long criminal conduct and would link his fraud to his personal shortcomings, and not more
appropriately, as in this case, to a once in a hundred years global pandemic. Again, while not an
excuse or legal defense, Mr. Barabash’s personal life puts into appropriate context his conduct in
this case.
Also, momentarily brushing aside the Government’s disclosure of its communication with
Mr. Barabash’s subcontractor, Mr. McGuire for the first time in its sentencing memorandum and
not earlier; the fact that Mr. Barabash was using PPP funds to pay workers and contractors, whether
W-2 employees or not, reinforces that the PPP funds in this case were used to save and grow Mr.
Barabash’s business and not to pay his personal expenditures as is so frequently seen in cases that
the Government usually focuses its prosecutorial resources on.
Finally, at the plea hearing, this Court spoke at length about its concerns regarding the
Government’s position on seeking both restitution and forfeiture orders. Besides now claiming
that M&T Bank is the victim and not the Government, contrary to its response to this Court’s
pointed inquiry at the plea hearing, the Government wants to obtain a windfall in this case, a
million dollar restitution order and a million dollar forfeiture order, while also claiming (at 9) that
“[a]lthough the Government seized a portion of the fraud proceeds before Defendant could use the
funds, that seizure does not offset Defendant’s restitution obligation.” The Government’s position,
contrary to the Court’s admonitions at the plea hearing, now makes clear why Mr. Barabash is
receiving treasury notices that he immediately owes the Government $1.6 million dollars. See
Treasury Notice, D.E. 23-4.
Here, the Government wants to incarcerate Mr. Barabash for over three years and then
require him to pay over two million dollars after he is removed from society, out of the relevant
commercial industry for years, and a convicted felon. If the Government was truly focused on and
Case 1:22-cr-00232-JKB Document 25 Filed 06/19/23 Page 3 of 5
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committed to the 3553 statutory factors, it would allow Mr. Barabash to remain in the community
in order to meet his financial obligations under strict conditions of probation to see if Mr.
Barabash’s conduct in this case (completely inconsistent with his life), was a once off event and
the result of a global pandemic and financial meltdown, or as the Government would have this
Court belief, part of a pattern of improper conduct.
While the Government is required to ask for a Guidelines compliant sentence as a matter
of policy, notwithstanding that the Guidelines range in this case is completely overstated by the
loss amount and that a financial institution was involved, even if just a pass through entity; this
Court’s obligation is to 18 U.S.C § 3553, which provides no limit on what this Court may consider
in fashioning an appropriate sentence that is “sufficient, but not greater than necessary” to comply
with the statutory factors of sentencing as mandated by Congress.
Consistent with comparator sentences issued in this jurisdiction and others (see D.E. 23 at
20-29), Mr. Barabash’s actions in this case do not require any period of incarceration, let alone the
lengthy period the Government requests solely as a matter of deterrence, where Mr. Barabash’s
felony conviction will be a life-long reminder of his conduct and his lengthy period of supervision
will ensure that such conduct never happens again while he works to pay back his debts and
continues to help those, especially his family, who rely significantly on his support in this
challenging time in their lives.2
2 As a supplement to his sentencing memorandum, Mr. Barabash can report that his fiancée Mariia
Doroshenko’s parents have left Ukraine, are in Poland, and should arrive in the United States by
the end of the month.
Case 1:22-cr-00232-JKB Document 25 Filed 06/19/23 Page 4 of 5
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Dated: June 19, 2023
Respectfully submitted,
/s/
Christopher Macchiaroli (Bar No. 21099)
Silverman Thompson Slutkin & White LLC
1750 K Street, NW, Suite 810
Washington, D.C. 20006
Telephone: (202) 539-2444
Facsimile: (410) 547-2432
cmacchiaroli@silvermanthompson.com
Counsel for Alexander Barabash
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