Plea Agreement — U.S. v. Blotnick

Record facts

U.S. District Court, District of New Jersey · No. 2:21-cr-00796-BRM · Doc. 19 · 2021-07-29 · Docket on CourtListener

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U.S. Department of Justice
United States Attorney
Criminal Division
District of New Jersey
Fraud Section
Fallow Meka Coon
970 Brood Street, Suite 700 Direct Dial: (973)645-2758
Assistant (in ited Stoles Attorney
Neu-ark, New -Jersey 07102
ConE. Jacobs
1400 Non- York Acenue, NW Direct Dial: (202) 616-4994
Trio? Attorney
Washington, DC. 20005
July 29, 2021
Via Email
Adam S. Kaufmann, Esq.
Jason H. Berland, Esq.
Lewis Baach Kaufmann Middlemiss PLLC
405 Lexington Avenue, 64th Floor
New York, NY 10174
adam. kaufrnann(thlbkmiaw. corn
jason. berland@lbknilaw.com
Re:
Plea Agreement with Gregory J. Blotnick
Dear Messrs. Kaufmann and Berland:
This letter sets forth the plea agreement between your client, Gregory
J. Blotnick (“Blotnick”), and the United States Attorney for the District of New Jersey
and the United States Department of Justice, Criminal Division, Fraud Section
(collectively, “the United States”). This plea agreement will expire on August 12,
2021, if an executed copy is not returned to the United States on or before that date.
Charges
Conditioned on the understandings specified below, the United States
will accept a guilty plea from Blotnick to a two-count Information which charges
Blotnick with: (1) wire fraud, in violation of 18 U.S.C. § 1343 (Count One); and (2)
money laundering, in violation of 18 U.S.C. § 1957 (Count Two). If Blotnick enters a
guilty plea and is sentenced on these charges, and otherwise fully complies with all
ofthe terms of this agreement, the United States will not initiate any further criminal
charges against Blotnick for, from in or about April 2020 through in or about March
2021, engaging in a scheme to fraudulently obtain federal Paycheck Protection
Program (“PPP”) loans and causing those loan funds to be deposited into various bank
and brokerage accounts that Blotnick controlled, provided that: Blotnick admits
under oath at the time of his guilty plea to: (1) knowingly and intentionally
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F’
submitting twenty-one fraudulent PPP
loan
applications
to
thirteen lenders
(together, the “Lenders”) on behalf of at least nine purported businesses that Blotnick
controlled in connection with a wire fraud scheme in which Blotnick fraudulently
intended to obtain a total of approximately $6,889,089 in PPP loan proceeds from the
Lenders, and did obtain a total of approximately $4,681,796 in PPP loan proceeds
from the Lenders; (2) knowingly engaging in a series of six transactions with the loan
proceeds in which Blotnick transferred the funds from a bank account he controlled
to a brokerage account he controlled: and (3) having this conduct taken into account
as relevant conduct by the Court at the time of sentencing pursuant to U.S.S.G. §
1 B 1.2(c).
However, in the event that a guilty plea in this matter is not entered for
any reason or the judgment of conviction entered as a result of this guilty plea does
not remain in full force and effect. Blotnick agrees that any other charges that are
not time-barred by the applicable statute of limitations on the date this agreement is
signed by Blotnick may be commenced against him, notwithstanding the expiration
of the limitations period after Blotnick signs the agreement.
Sentencing
The violation of 18 U.S.C. § 1343 charged in Count One in the
Information to which Blotnick agrees to plead guilty carries a statutory maximum
prison sentence of 20 years and a statutory maximum fine which is the greatest of:
(1) $250,000; (2)
twice the gross amount of any pecuniary gain that any persons
derived from the offense: or (3) twice the gross amount of any pecuniary loss sustained
by any victims of the offense.
The violation of 18 U.S.C.
§
1957 charged in Count Two in the
Information to which Blotnick agrees to plead guilty each carries a statutory
maximum prison sentence of 10 years and a statutory maximum fine which is the
greatest of: (1) $250,000: (2) twice the gross amount of any pecuniary gain that any
persons derived from the offense; or (3) twice the gross amount of any pecuniary loss
sustained by any victims of the offense.
The sentence on each count may run consecutively. Fines imposed by
the sentencing judge may be subject to the payment of interest.
The sentence to be imposed upon Blotnick is within the sole discretion
of the sentencing judge, subject to the provisions of the Sentencing Reform Act, 18
U.S.C. § 355 1-3742, and the sentencing judge’s consideration of the United States
Sentencing Guidelines. The United States Sentencing Guidelines are advisory, not
mandatory. The sentencing judge may impose any reasonable sentence up to and
including the statutory maximum term of imprisonment and the maximum statutory
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fine. The United States cannot and does not make any representation or promise as
to what Guidelines range may be found by the sentencing judge, or as to what
sentence Blotnick ultimately will receive.
Further, in addition to imposing any other penalty on Blotnick, the
sentencing judge, with respect to both Count One and Count Two: (1) will order
Blotnick to pay an assessment of l0O on each count pursuant to 18 U.S.C. § 3013,
A?
\QL’i
which assessment must be paid by the date of sentencing; (2) may order Blotnick to K)
pay restitution pursuant to 18 U.S.C. § 3563(b)(2), 3583(d), or 3663; (3) may order
Blotnick, pursuant to 18 U.S.C. § 3555. to give notice to any victims of his offense; (4)
o
c
must order forfeiture, pursuant to 18 U.S.C. § 981(a)(1)(C); and (5) pursuant to 18
[‘
L
U.S.C. §f3583’ may require Blotnick to serve a term of supç
4release of not morej
than +4we %ars on oach-e&Count One anrwo, which will begin at the expiration
of any term of imprisonment imposed. Should Blotnick be placed on a term of
supervised release and subsequently violate any of the conditions of supervised
,i,ieee.CS
release before the expiration of its term, Blotnick may be sentenced to not more than1
two years imprisonmenttiàSiton to any prison term previously imposed,
c0- o
regardless of the statutory maximum term of imprisonment set forth above and
‘in,1
without credit for time previously served on post-release supervision, and may be
sentenced to an additional term of supervised release.
Restitution Agreement
In addition, Blotnick agrees to make full restitution for all losses
resulting from the offenses of conviction or from the scheme, conspiracy, or pattern of
criminal activity underlying the offenses. The parties agree that this amount shall he
$4,681,796.
Rights of The United States Regarding Sentencing
Except as otherwise provided in this agreement, the United States
reserves its right to take any position with respect to the appropriate sentence to be
imposed on Blotnick by the sentencing judge, to correct any misstatements relating
to the sentencing proceedings, and to provide the sentencing judge and the United
States Probation Office all law and information relevant to sentencing, favorable or
otherwise. In addition, the United States may inform the sentencing judge and the
United States Probation Office of (1) this agreement, and (2) the full nature and
extent of activities and relevant conduct with respect to this case.
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lations
Blotnick and the United States agree to stipulate at sentencing to the
statements set forth in the attached Schedule A, which hereby is made a part of this
plea agreement. This agreement to stipulate, however, cannot and does not bind the
sentencing judge, who may make independent factual findings and may reject any or
all of the stipulations entered into by the parties. To the extent that the parties do
not stipulate to a particular fact or legal conclusion, each reserves the right to argue
the existence of and the effect of any such fact or conclusion upon the sentence.
Moreover, this agreement to stipulate on the part of the United States is based on the
information and evidence that the United States possesses as of the date of this
agreement. Thus, if the United States obtains or receives additional evidence or
information prior to sentencing that it determines to be credible and to be materially
in conflict with any stipulation in the attached Schedule A, the United States shall
not be bound by any such stipulation. A determination that any stipulation is not
binding shall not release either Blotnick or the United States from any other portion
of this agreement, including any other stipulation. If the sentencing court rejects a
stipulation, both parties reserve the right to argue on appeal or at post-sentencing
proceedings that the sentencing court was within its discretion and authority to do
so. These stipulations do not restrict this Office’s right to respond to questions from
the Court and to correct misinformation that has been provided to the Court.
Waiver of Appeal and Post-Sentencing Rights
As set forth in Schedule A, Blotnick and the United States waive certain
rights to file an appeal, collateral attack, writ, or motion after sentencing, including
but not limited to an appeal under 18 U.S.C. § 3742 or a motion under 28 U.S.C.
§ 225.5.
Forfeiture
As part of his acceptance of responsibility, and pursuant to 18 U.S.C.
§ 982(a)(7), Blotnick agrees to forfeit to the United States all of his right, title, and
interest in all property the defendant obtained that constitutes or is derived, directly
or indirectly, from gross proceeds traceable to wire fraud and money laundering
schemes, in violation of 18 U.S.C. § 1343 and 18 U.S.C. § 19.57, as charged in the
Information. Blotnick further agrees that the value of such property was $4,681,796;
that one or more of the conditions set forth in 21 U.S.C. § 853(p) exists; and that the
United States is therefore entitled to forfeit substitute assets equal to the value of the
gross proceeds obtained by Blotnick, in an amount not to exceed $4,681,796 (the
“Money Judgment”). Blotnick consents to the entry of an Order requiring him to pay
the Money Judgement and agrees that such Order will he final as to him prior to
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sentencing, pursuant to Rule 32.2(b)(4) of the Federal Rules of Criminal Procedure,
and which may be satisfied in whole or in part with substitute assets.
All payments made in full or partial satisfaction of the Money Judgment
shall be made by postal money order, bank, or certified check, made payable in this
instance to the United States Marshals Service, indicating Blotnick’s name and case
number on the face of the check; and shall be delivered to the United States Attorney’s
Office, District of New Jersey, Attn: Asset Recovery and Money Laundering Unit, 970
Broad Street, 7th Floor, Newark. New Jersey 07102. Blotnick further agrees that
upon entry of the Order, the United States Attorney’s Office is authorized to conduct
any discovery needed to identify, locate, or dispose of propert.y sufficient to pay the
Money Judgment in full or in connection with any petitions filed with regard to
proceeds or substitute assets, including depositions, interrogatories, and requests for
production of documents, and the issuance of subpoenas.
Blotnick waives the requirements of Rules 32.2 and 43(a) of the Federal
Rules of Criminal Procedure regarding notice of the forfeiture in the charging
instrument, announcement of the forfeiture at sentencing, and incorporation of the
forfeiture in the judgment. Blotnick understands that criminal forfeiture is part of
the sentence that may be imposed in this case and waives any failure by the court to
advise him of this pursuant to Rule ll(b)(1)(J) of the Federal Rules of Criminal
Procedure at the
guilty plea proceeding. The defendant waives any and
all
constitutional, statutory, and other challenges to the forfeiture on any and all
grounds. including that the forfeiture constitutes an excessive fine or punishment
under the Eighth Amendment. It is further understood that any forfeiture of the
defendant’s assets shall not be treated as satisfaction of any fine, restitution, cost of
imprisonment, or any other penalty the Court may impose upon him in addition to
forfeiture.
Blotnick further agrees that on or before the date he enters his plea of
guilty he will provide a complete and accurate Financial Disclosure Statement on the
form provided by this Office. If Blotnick fails to provide a complete and accurate
Financial Disclosure Statement by the date he enters his plea of guilty, or if the
United States determines that Blotnick has intentionally failed to disclose assets on
his Financial Disclosure Statement. Blotnick agrees that that failure constitutes a
material breach of this agreement, and the United States reserves the right,
regardless of any agreement or stipulation that might otherwise apply, to oppose any
downward adjustment for acceptance of responsibility pursuant to U.S.S.G. § 3E1.l,
and to seek leave of the Court to withdraw from this agreement or seek other relief.
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Immigration Consequences
Blotnick understands that, if he is not a citizen of the United States, his
guilty plea to the charged offense will likely result in his being subject to immigration
proceedings and removed from the United States by making him deportable.
excludable, or inadmissible, or ending his naturalization. The defendant understands
that the immigration consequences of this plea will be imposed in a separate
proceeding before the immigration authorities. The defendant wants and agrees to
plead guilty to the charged offense regardless of any immigration consequences of
this plea, even if this plea will cause his removal from the United States. The
defendant understands that he is bound by his guilty plea regardless of any
immigration consequences of the plea. Accordingly, the defendant waives any and all
challenges to his guilty plea and to his sentence based on any immigration
consequences, and agrees not to seek to withdraw his guilty plea, or to file a direct
appeal or any kind of collateral attack challenging his guilty plea, conviction, or
sentence, based on any immigration consequences of his guilty plea.
Other Provisions
This agreement. is limited to the United States Attorney’s Office for the
District of New Jersey and the United States Department of Justice, Criminal
Division, Fraud Section, and cannot bind other federal, state, or local authorities.
However, the United States will bring this agreement to the attention of other
prosecuting offices, if requested to do so.
This
agreement
was
reached
without
regard
to
any
civil
or
administrative matters that may be pending or commenced in the future against
Blotnick. This agreement does not prohibit the United States, any agency thereof
(including the U.S. Securities and Exchange Commission, the Internal Revenue
Service, or U.S. Immigration and Customs Enforcement), or any third party from
initiating or prosecuting any civil or administrative proceeding against Blotnick.
No provision of this agreement shall preclude Blotnick from pursuing in
an appropriate forum, when permitted by law, an appeal, collateral attack, writ, or
motion claiming that Blotnick received constitutionally ineffective assistance of
counsel.
Blotnick hereby waives any challenge to his conviction or sentence based
upon the venue in which the prosecution of the Information was brought.
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No Other Promises
This agreement constitutes the plea agreement between Blotnick and
the United States and supersedes any previous agreements between them. No
additional promises, agreements, or conditions have been made or will be made
unless set forth in writing and signed by the parties.
Very truly yours,
RACHAEL A. HONIG
Acting United States Attorney
United States Attorney’s Office
District of New Jersey
By: ratnt I4Aa- ?ane
FATIME MEKA CANO
Assistant U.S. Attorney
APPROVED:
BERNARfl. 000N’EY
Chief
Government Fraud Unit
JOSEPH S. BEEMSTERBOER
Acting Chief, Fraud Section
Criminal Division
U.S. Department of Justice
By:
C9’tc206t
CORY E. JACbBS
Trial Attorney, Fraud Section
APPROVED:
LISA H. MILLER
Chief
Market Integrity & Major Frauds Unit
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I have received this letter from my attorneys, Adam S. Kaufmann, Esq.
and Jason H. Berland, Esq., and I have read it. My attorneys and I have discussed it
and all of its provisions,
including those addressing the charges,
sentencing,
restitution,
stipulations,
waiver,
forfeiture,
and
immigration
consequences.
I
understand this
letter fully.
I
hereby
accept
its
terms
and conditions
and
acknowledge that
it constitutes
the
plea
agreement between
the
parties.
I
understand that no additional promises, agreements, or conditions have been made
or will be made unless set forth in writing and signed by the parties. I want to plead
guilty pursuant to this plea agreement.
AGREED AND ACCEPTED:
t49t1 t?LtccA
Date: 8/10/2021
GregorvJ. Blotnick
We have discussed with our client, Gregory J. Blotniek, this plea
agreement and all of its provisions, including those addressing the charges,
sentencing,
restitution,
stipulations.
waiver,
forfeiture,
and
immigration
consequences. Our client understands this plea agreement fully and wants to plead
guilty pursuant to it.
Date:
08/10/2021
Adam S. Kaufmann. Esq.
Date:
08/10/2021
Jason H. Berland, Esq.
8
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Plea Agreement with Gregory J. Blotnick
Schedule A
1.
The United States and Gregory J. Blotnick (“Blotnick”) recognize
that the United States Sentencing Guidelines are not binding upon the Court. The
United States and Blotnick nevertheless agree to the stipulations set forth herein,
and agree that the Court should sentence Blotnick within the Guidelines range that
results from the total Guidelines offense level set forth below.
2.
The version of the United States Sentencing Guidelines effective
November 1, 2018, applies in this case.
Count One
— Wire Fraud
3.
The applicable guideline for wire fraud is U.S.S.G.
§
2B1.1.
Because the offense of conviction has a statutory maximum term of imprisonment of
20 years or more, this guideline carries a Base Offense Level of 7. U.S.S.G. §
2Bl.1(a)(l).
4.
The intended loss amount, including all relevant conduct under
U.S.S.G. § lB 1.2(c), consists of $6,889,089 in federal Paycheck Protection Program
loan
proceeds that
Blotnick intended
to
obtain.
Thus,
the
Specific
Offense
Characteristic results in an increase of 18 levels. U.S.S.G. § 2B1.1(b)(fl(J).
5.
Because the offense involved sophisticated means and Blotnick
intentionally engaged in or caused the conduct constituting sophisticated means, it
results in an increase of 2 levels. U.S.S.G. § 2B1.1(b)(10)(C).
6.
Because Blotnick derived more than 51.000,000 in gross receipts
from one or more financial institutions as a result of these offenses, including all
relevant conduct under U.S.S.G. § 1B1.2(c). it results in an increase of 2 levels.
U.S.S.G. § 2Bl.l(b)(17A).
Count Two
— Money Laundering
7.
The applicable guideline for money laundering is U.S.S.G. § 2S1.l.
which requires the application of U.S.S.G. § 2B1.l, the applicable guideline for the
underlying offense from which the laundered funds were derived (wire fraud).
U.S.S.G. § 2S1.l(a)(l).
8.
The Base Offense Level under U.S.S.G. § 251.1 is therefore 29, as
described in Paragraphs 3 through 6 above.
9.
The offense resulted in the conviction of Blotnick under 18 U.S.C.
§ 1957. This results in an increase of 1 level, under U.S.S.G. § 2S1.1b)(2)(A.
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Groupinu of Multiple Counts
10.
The United States and Blotnick agree that Counts One and Two
of the Information are grouped together into a single group because those counts
involve substantially the same harm under P.5.5.0. § 3D 1.2.
11.
Pursuant to P.5.5.0. § 3D1.4, the adjusted offense level is 30.
Acceptance of Responsibility and Plea
12.
As of the date of this letter, Blotnick has clear]y demonstrated a
recognition and affirmative acceptance of personal responsibility for the offenses
charged.
Therefore,
a
downward
adjustment
of
2
levels
for
acceptance
of
responsibility is appropriate if Blotnick’s acceptance of responsibility continues
through the date of sentencing. U.S.S.G. § 3E1.1(a).
13.
As of the date of this letter, Blotnick has assisted authorities in
the investigation or prosecution of his own misconduct by timely notifying authorities
of his intention to enter a plea of guilty, thereby permitting the United States to avoid
preparing for trial and permitting the United States and the court to allocate their
resources efficiently. At sentencing, the United States will move for a further 1-point
reduction in Blotnick’s offense level pursuant to U.S.S.G. § 3EL1Ib) if the following
conditions are met: (a) Blot.nick enters a plea pursuant to this agreement, b) the
United States in its discretion determines that Blotnick’s acceptance of responsibility
has continued through the date of sentencing and Blotnick therefore qualifies for a
2-point reduction for acceptance ofresponsibility pursuant to U.S.S.0. § 3E 1.1(a), and
(c) Blotnick’s offense level under the Guidelines prior to the operation of 3E1.1(a) is
16 or greater.
14.
In accordance with the above, the parties agree that the total
Guidelines offense level applicable to Blotnick is 27 (the “agreed total Guidelines
offense level”).
1.5.
Pursuant to 18 U.S.C. § 3553(a), Blotnick reserves the right to
move for a downward variance. This Office reserves the right to oppose such a motion.
The parties agree not to seek or argue for any upward or downward departure,
adjustment or variance not. set forth herein.
16.
Blotnick knows that he has and, except as noted below in this
paragraph, voluntarily waives, the right to file any appeal, any collateral attack, or
any other writ or motion, including but not limited to an appeal under 18 U.S.C. §
3742 or a motion under 28 US.C. § 2255, which challenges the sentence imposed by
the sentencing court if that sentence falls within or below the Guidelines range that
results from the agreed total Guidelines offense level of 27. The United States will
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not file any appeal, motion or writ which challenges the sentence imposed by the
sentencing court if that sentence falls within or above the Guidelines range that
results from the agreed total Guidelines offense level of 27. The parties reserve any
right they may have under 18 U.s.c. § 3742 to appeal the sentencing court’s
determination of the criminal history category. The provisions of this paragraph are
binding on the parties even if the Court employs a Guidelines analysis different from
that stipulated to herein. Furthermore, if the sentencing court accepts a stipulation,
both parties waive the right to file an appeal, collateral attack, writ, or
motion
claiming that the sentencing court erred in doing so.
17.
Both parties reserve the right to oppose or move to dismiss any
appeal, collateral attack, writ, or motion barred by the preceding paragraph and to
file or to oppose any appeal, collateral attack, writ or motion not barred by the
preceding paragraph.
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