Court filing
Sentencing Hearing Transcript — United States v. Carl Bradley Johansson
Summary
A reporter's transcript of proceedings at a sentencing hearing in United States v. Carl Bradley Johansson, filed February 3, 2023 as Document 116 in No. 5:21-cr-00170-JGB in the U.S. District Court for the Central District of California. The hearing took place November 29, 2022 in Los Angeles before the Honorable Virginia A. Phillips and was called in two matters, Criminal 21-170 and Criminal 18-114(B). Counsel state appearances, and the court settles which attorney will argue for Western Distribution, LLC, National Distribution Services, Inc. and Wholesale Distribution, Inc. The court hears a motion to withdraw the guilty pleas before sentencing the three corporations and the individual defendant. The transcript is 76 pages and ends with the government's motion to dismiss Counts 2 and 4 as to Western, which the court grants.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
No. 5:21-cr-00170-JGB · Doc. 116 · Docket on CourtListener
Full text
Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:951 Page 1 of 76 Page ID 1 1 UNITED STATES DISTRICT COURT 2 CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION 3 HONORABLE VIRGINIA A. PHILLIPS, U.S. DISTRICT JUDGE 4 5 6 7 8 9 10 11 12 13 14 15 16 UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) ) WESTERN DISTRIBUTION, LLC, and ) CARL BRADLEY JOHANSSON, ) ) Defendants. ) ) ) UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) ) NATIONAL DISTRIBUTION SERVICES, INC., ) WHOLESALE DISTRIBUTION, INC., and ) CARL BRADLEY JOHANSSON, ) ) Defendants. ) ) Case No. CR 21-170 VAP Case No. CR 18-114 VAP 17 18 19 20 REPORTER'S TRANSCRIPT OF PROCEEDINGS SENTENCING HEARING TUESDAY, NOVEMBER 29, 2022 10:06 A.M. LOS ANGELES, CALIFORNIA 21 22 _______________________________________________________________ 23 MYRA L. PONCE, CSR NO. 11544, CRR, RPR, RMR, RDR FEDERAL OFFICIAL COURT REPORTER 350 WEST 1ST STREET, ROOM 4455 LOS ANGELES, CALIFORNIA 90012 (213) 894-2305 24 25 UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:952 Page 2 of 76 Page ID 2 APPEARANCES OF COUNSEL: 1 2 3 4 5 6 7 FOR THE PLAINTIFF: E. MARTIN ESTRADA United States Attorney BY: MATTHEW W. O'BRIEN BY: JOSEPH O. JOHNS Assistant United States Attorneys United States Courthouse 312 North Spring Street Los Angeles, California 90012 8 9 10 11 12 FOR THE DEFENDANTS CARL BRADLEY JOHANSSON, WESTERN DISTRIBUTION, LLC, and NATIONAL DISTRIBUTION, INC.: EDWARD M. ROBINSON Attorney at Law 21515 Hawthorne Boulevard, Suite 730 Torrance, California 90503 13 14 FOR DEFENDANT NATIONAL DISTRIBUTION SERVICES, INC.: 15 16 17 EXUM LAW OFFICES BY: DARRYL L. EXUM Attorney at Law 4129 Main Street, Suite 200 Riverside, California 92501 18 19 FOR THE DEFENDANT WHOLESALE DISTRIBUTION, INC.: 20 21 22 LAW OFFICES OF GRECH & PACKER BY: PAUL GRECH, JR. Attorney at Law 7095 Indiana Avenue, Suite 200 Riverside, California 92506 23 24 25 LAW OFFICE OF ALAN M. LURYA BY: ALAN M. LURYA Attorney at Law 15615 Alton Parkway, Suite 450 Irvine, California 92612 UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:953 Page 3 of 76 Page ID 3 1 TUESDAY, NOVEMBER 29, 2022; 10:06 A.M. 2 LOS ANGELES, CALIFORNIA 3 -oOo- 4 10:06AM 10:06AM 10:07AM 10:07AM 10:07AM THE COURTROOM DEPUTY: Calling Eastern Division 5 Criminal 21-170 and Criminal 18-114(B), United States of 6 America versus Carl Bradley Johansson, Western Distribution, 7 LLC, National Distribution Services, Inc., and Wholesale 8 Distribution, Inc. 9 Counsel, please state your appearances. 10 MR. O'BRIEN: Good morning, Your Honor. 11 Matthew O'Brien on behalf of the United States. 12 counsel table is Special Agent Ashley Strickland of the 13 United States Department of Transportation. 14 THE COURT: Thank you. 15 MR. ROBINSON: And with me at Good morning. Good morning, Your Honor. 16 Edward Robinson on behalf of Mr. Johansson. 17 court. 18 which we'll have to address immediately, I assume, on behalf of 19 Western, National, and Wholesale. 20 THE COURT: Good morning. 21 MR. EXUM: Good morning, Your Honor. He's in custody. He is present in Also appearing, with your permission, Good morning. Darryl Exum. 22 The record shows I am counsel of record on National 23 Distribution, which was my understanding. 24 THE COURT: All right. 25 MR. GRECH: Good morning, Your Honor. UNITED STATES DISTRICT COURT Paul Grech, Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:954 Page 4 of 76 Page ID 4 1 counsel of record for Wholesale. 2 THE COURT: Thank you. 3 MR. LURYA: Good morning, Your Honor. 4 10:07AM 10:07AM also counsel for Wholesale. 5 THE COURT: 6 Well, I am -- you may be seated. 10:08AM I am perplexed about who represents National because there hasn't been a 8 substitution of attorney filed in the docket. 9 MR. ROBINSON: 10 on the ECF as the counsel of record. 11 e-mail communication with respect to filing certain position 12 papers. There hasn't, but I'm on the record And that prompted some I think the simplest way, if I may, Your Honor, to 14 clear this up is, assuming that Mr. Johansson agrees with this, 15 is that for the purpose of today's proceedings, to be followed 16 up, if necessary, by substitutions of attorneys, that I speak 17 for Mr. Johansson and the organizational defendants because 18 what I have to address on his behalf is inextricably 19 intertwined, to use that phrase, with the position that we're 20 asking the Court to rule on with respect to the organizational 21 defendants. 22 10:09AM Thank you. 7 13 10:08AM Alan Lurya, And I -- I think it would just simplify things. I 23 know that at the change of plea, you took a conflict waiver for 24 Mr. Johansson's speaking on behalf of the organizational 25 defendants. So I don't believe that there's any issue with UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:955 Page 5 of 76 Page ID 5 1 10:09AM 2 THE COURT: 3 MR. ROBINSON: 4 THE COURT: 10:09AM 10:10AM 10:10AM Well, it's been an awfully long time. It has. So I'm not sure -- I remember that. 5 I thought that at the change of plea for National, Mr. Exum 6 represented National. 7 MR. ROBINSON: 8 after the change of plea. 9 10:09AM that. THE COURT: He did. I did not come in until long So Mr. Werksman was present when I 10 took -- and represented Mr. Johansson when I took 11 Mr. Johansson's individual plea. 12 MR. ROBINSON: 13 THE COURT: That's correct. Mr. Exum represented National for 14 purposes of the change of plea as to National. 15 recollection? Is that your 16 MR. EXUM: That's my recollection, Your Honor. 17 THE COURT: And then my -- but the motion that 18 was -- the motion to withdraw the guilty pleas was filed by 19 your office on behalf of both. 20 But MR. ROBINSON: That's correct. And the reason that 21 we did that -- and just to fill out the record, -- the notice 22 of intent to withdraw with respect to Mr. Johansson on the tax 23 count and the loan -- tax counts and loan counts was also 24 noticed on behalf of Western simply because -- 25 THE COURT: Right. Western, right. UNITED STATES DISTRICT COURT Wait, National, Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:956 Page 6 of 76 Page ID 6 1 I thought. 2 10:10AM 3 case, the loan case. 4 THE COURT: 5 10:11AM 10:11AM 10:11AM Western is the -- the loan -- the 170 We've been receiving, understandably -Wait a minute. I'm sorry. I'm getting confused. 6 MR. ROBINSON: 7 THE COURT: 8 10:10AM MR. ROBINSON: Can I -- Mr. Exum represents National, not Western. 9 MR. ROBINSON: 10 THE COURT: Mr. Grech represents Western. 11 MR. GRECH: Wholesale, Your Honor. 12 THE COURT: Okay. 13 MR. LURYA: Wholesale. 14 THE COURT: Wholesale. 16 MR. LURYA: Correct. 17 MR. ROBINSON: 15 That's correct. Mr. -- Mr. Lurya? So you both represent Wholesale. Western -- forgive me for not knowing 18 this off the top of my head, but Western must have been 19 represented by Werksman. 20 Is that correct? 21 THE COURT: 22 MR. ROBINSON: 23 THE COURT: 24 MR. O'BRIEN: 25 THE COURT: Oh, maybe that's why I took the waiver. That might be. All right. Mr. -- Yes, Your Honor. -- O'Brien, do you want to -- UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:957 Page 7 of 76 Page ID 7 1 10:11AM 10:11AM 10:12AM 10:13AM My recollection is that you took a 2 conflict waiver with Mr. Werksman because he was representing 3 both Mr. Johansson and Western in the PPP case. 4 THE COURT: 5 MR. ROBINSON: All right. Thank you. And so, not to be presumptuous, 6 Your Honor, but I think to clear up any issues with respect to 7 representation -- and I know that both Mr. Exum and Mr. Grech 8 do not oppose this and I don't believe that Mr. Johansson does. 9 The Court would obviously have to inquire. 10 I should represent Mr. Johansson and the 11 organizational entities because, at the change of plea, 12 Mr. Johansson was the authorized party to enter the plea. 13 organizational defendants swore to the same factual basis, 14 entered the pleas to the same counts. 15 my making of a record this morning. 16 10:12AM MR. O'BRIEN: THE COURT: The And it would streamline And I believe that -- Well, why don't -- excuse me for 17 interrupting you, but why don't we do this. The motion -- as 18 to the motion, which I will entertain very brief argument 19 about, I will -- I will let you argue because the arguments as 20 to the corporate defendant are not different than the arguments 21 as to the individual. 22 the -- or if Mr. Exum wishes to add anything as to the 23 corporate defendant, I will let him do that. 24 Should we proceed in that fashion? 25 MR. ROBINSON: So it doesn't really matter. If any of That's -- that's fine with me, UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:958 Page 8 of 76 Page ID 8 1 10:13AM 10:13AM 10:14AM 10:14AM I don't imagine that -- 2 THE COURT: Mr. Exum, do you have any -- 3 MR. EXUM: Well, I guess the problem is this, 4 Your Honor. 5 some point did not want me to be his counsel. 6 was filed with the Court of that. 7 aware. 8 things, but it's my understanding that those are not things 9 that Mr. Johansson wants. 10 water under the bridge. It looks as though that Mr. Johansson didn't -- at And no record And I wasn't apparently made So I filed documents for sentencing, I did those And I understand it happened, it's 11 Mr. Robinson is going to represent Mr. Johansson and 12 he wants to represent Mr. Johansson because he's been under the 13 impression for some time that he represents National. 14 10:13AM Your Honor. 15 THE COURT: Right. So let me just ask Mr. Johansson. 16 And, Mr. Johansson, do you have any objection to 17 going forward this morning on the arguments as I proposed a 18 moment ago, that is, Mr. Robinson will be arguing on your 19 behalf and on behalf of Western? 20 is still in the case, if he's any -- if he has anything to add 21 on behalf of National, then I would allow him to do that. 22 that agreeable with you? 23 THE DEFENDANT: Because technically Mr. Exum Is Well, just as a way of 24 clarification, National Distribution ceased operating at the 25 end of 2014. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:959 Page 9 of 76 Page ID 9 10:14AM 1 THE COURT: 2 THE DEFENDANT: 10:15AM officers, employees, and so on. 4 THE COURT: 5 understand what you're telling me. 6 asking you right now is: 7 first of all, to Mr. Robinson arguing on your behalf and on 8 behalf of National on the motion and as to sentencing? That's not my question. I But the only question I'm Do you have any objection to Mr. -- My -- my point of clarification is 10 that, when I signed the plea agreement over a year ago, I had 11 no standing with National to sign anything on behalf of the 12 company. 13 if I didn't sign all the plea -- 14 THE COURT: I was asked by Mr. Exum to do that. I was told that Again, that's not my question. My 15 question is really limited to who represents you this morning 16 and who represents National. THE DEFENDANT: You're the only person -- There is no one here to speak for 18 National. 19 resigned as the director two or three years ago the authority 20 to do anything on behalf of National. 21 10:15AM No. THE DEFENDANT: 17 10:15AM So at that time, there were no 3 9 10:14AM Oh, I understand that. I -- I don't believe I have and haven't had since I THE COURT: All right. Do you have -- let me ask 22 you the question this way. 23 proceeding the way I suggested we would? 24 THE DEFENDANT: 25 THE COURT: Do you have any objection to No, Your Honor. All right. Thank you. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:960 Page 10 of 76 Page ID 10 1 10:15AM 10:16AM 10:16AM All right. 2 anything to add, Mr. Exum, but if you do, you'll have the 3 opportunity to do so. 4 MR. EXUM: Can I just make a quick record, 6 THE COURT: Sure, certainly. 7 MR. EXUM: The problem, of course, is I was not 8 privy to this motion. 9 did not have anything to do with this motion. 10 I would request of the Court is, if the Court is going to allow 11 Mr. Robinson to argue for National Distribution, that at that 12 time, I not be his counsel because -- 5 Your Honor? THE COURT: You mean, its counsel. 14 MR. EXUM: Sorry. So I think, what Its counsel, I'm sorry, 15 Your Honor. 16 arguments on a motion that I was not privy to, if I'm still the 17 counsel of record. Because it's not appropriate for him to make those THE COURT: Well, I mean, you're counsel of record 19 because there isn't -- there's nothing in the record to say 20 that you've been substituted out or relieved. 21 your point, and it -- I am going to let Mr. Robinson argue. 22 don't think anything else needs to be added. 23 24 10:16AM I don't have anything to add because I 13 18 10:16AM Then, that's -- you may not have 25 MR. EXUM: That's fine, Your Honor. THE COURT: Thank you. Your Honor. UNITED STATES DISTRICT COURT But I understand Thank you, I Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:961 Page 11 of 76 Page ID 11 10:17AM 10:17AM 10:17AM 10:17AM 1 Now, I wasn't under the impression that the other 2 two corporate defendant -- well, excuse me, that Western or 3 Wholesale was going to be sentenced today. 4 ready to proceed with that sentencing? 5 The Government is ready for everyone 6 to be -- for the three corporations and Mr. Johansson to be 7 sentenced -- 8 THE COURT: 9 MR. O'BRIEN: 10 THE COURT: Are you ready, Mr. Grech? 11 MR. GRECH: I am ready, Your Honor. 12 THE COURT: All right. All right. 13 we'll take up the motion. 14 MR. ROBINSON: 15 THE COURT: -- today. Then, that's fine. First And just -- Oh, I'm sorry. Before we do that, I 16 noticed that last Wednesday, the last day before a long 17 weekend, there was a Notice of Intent to Withdraw the Plea as 18 to the tax counts, which is Counts 3, 4, 6, 8, and 9 in 19 Case 18-114 and the bank fraud counts in Case 21-170, but no 20 motion has been filed. 21 10:18AM MR. O'BRIEN: But are the parties So I've decided, after researching this to the best 22 that we could, we couldn't really find anything on this, but 23 I'm going to construe this as a supplement to the motion, that 24 is, that the motion that was filed to withdraw the plea to the 25 other counts should now include the counts that I just UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:962 Page 12 of 76 Page ID 12 1 described on the record. 2 10:18AM 10:18AM 10:19AM I would not grant a continuance of the sentencing 3 because -- well, for several reasons. 4 Notice of Intent to Withdraw is simply that, a notice. It's 5 untimely. And as 6 far as I can tell, there are no new grounds, that is, the 7 request to withdraw the guilty plea as to the counts that it 8 covers would also -- there's no new -- anything additional that 9 could be raised to justify withdrawal of the guilty plea as to 10 the new count. There is no motion to withdraw the counts. 11 So I just construe that -- that notice that I should 12 now consider the motion to withdraw as to withdraw everything, 13 the guilty plea as to all counts. 14 MR. ROBINSON: position on that. 16 respect to that notice of intent, it was Mr. Johansson's intent 17 as of the date of the filing of that notice to withdraw his 18 guilty pleas to the tax counts and the loan fraud counts. As I set forth in my declaration with Prior to that, as we set forth in our first 20 motion -- well, I'll call it the first motion because now it 21 looks like there's a first motion with a supplement -- 22 Mr. Johansson was not seeking to withdraw his pleas with 23 respect to the tax counts or the loan -- the loan fraud counts. 24 10:19AM Your Honor, I appreciate the Court's 15 19 10:19AM First, because this 25 I appreciate the Court's position with respect to timeliness. We filed this Notice of Intent the day that UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:963 Page 13 of 76 Page ID 13 10:20AM 10:20AM 10:21AM 1 Mr. Johansson made it clear -- 2 THE COURT: 3 understand, you set that forth in your declaration, I'm happy 4 to accept that representation from you as an officer of the 5 Court. 6 through the docket and all of the continuances in this case. 7 The trial continuances, the sentencing continuances, the 8 changes of counsel, it's all in the record and I'm not going to 9 go through that now. 10 10:21AM But your -- you know, I could spend a long time going But suffice it to say that the record speaks for 11 itself and makes it clear that this is a last-minute attempt -- 12 not on counsel's part, you're doing as your client directed 13 you -- but it's a last-minute attempt to yet again continue the 14 sentencing and avoid the resolution of this case. 15 going to happen today. 16 10:21AM Not counsel's timeliness but -- I MR. ROBINSON: And it's not So in light of that, what I'd like to 17 do, Your Honor, just to try to perfect the record with respect 18 to the prong concerning the claim of legal or factual 19 innocence, if the Court is going to construe our notice of 20 intent as a supplement to our motion to withdraw, if the Court 21 could agree that the pleadings in the 170 case are incorporated 22 by reference into the supplement as part of a factual basis for 23 the claim of legal innocence so that Mr. Johansson has a record 24 from which he can appeal. 25 THE COURT: That's fine. I mean, that's what I UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:964 Page 14 of 76 Page ID 14 1 10:21AM 2 MR. ROBINSON: 3 And lastly -- and this is something that is unique, it's very unique. 5 think it's relevant just to my comments on the motion to 6 dismiss -- to withdraw the plea. 10:23AM Mr. Johansson has made it clear that he denies what he swore to in the factual basis. 9 what he would testify to with respect to the loan fraud counts 10 were the plea withdrawn and the matter to proceed to trial. He has some comments as to I have not had much time with Mr. Johansson 12 concerning that position, as evidenced by the fact that this 13 notice was given on the 22nd of November, seven days ago. 14 Mr. Johansson has some notes that he has drawn up 15 that deal with the -- his position on lack of knowledge, lack 16 of intent to defraud with respect to the loan counts. 17 10:23AM And I don't want to jump the gun, but I 8 11 10:22AM Thank you. 4 7 10:22AM intend when I say I'm construing it as a supplement. I'd like an opportunity to review those documents 18 and maybe after today's hearing, within a short period of time, 19 file a supplement to the motion so that the record is perfected 20 to the extent that it can be, recognizing that your ruling with 21 respect to the supplement, the tax count and the loan fraud 22 count, is based upon primarily timeliness as opposed to 23 anything else because there's nothing else in the record. 24 Is that something that the Court would entertain? 25 THE COURT: No, I would not. You know, Mr. -- I'm UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:965 Page 15 of 76 Page ID 15 10:24AM 1 going to deny the motion for all the reasons set forth in the 2 tentative ruling. 3 opportunity to allocute before I impose sentence. 4 know, I rarely impose limits on what a defendant can choose to 5 say during his allocution. 6 he wants when he allocutes. 7 10:24AM MR. ROBINSON: 10:24AM 10:24AM And, you So he can address it to the extent I appreciate that. And, Your Honor, 8 I do understand very clearly that the right to allocute is a 9 personal right, one over which I have no tactical control, 10 unlike other constitutional rights. 11 10:24AM Mr. Johansson has -- will have the Before that happens, if I could have one minute with 12 Mr. Johansson so that it's clear what the purpose of his 13 allocution is and that would be to perfect the record, to the 14 extent it's possible, concerning his claim of factual innocence 15 with respect to the loan fraud counts and the tax counts? 16 THE COURT: You may do so now, if you wish. 17 MR. ROBINSON: 18 THE COURT: Thank you. You may consult. 19 heard in just a moment. 20 MR. O'BRIEN: And I'll let you be Your Honor, just while they're taking 21 a little break, I have the actual victim statement from 22 Mr. Velasquez, which I'm not sure the Court has. 23 copies to defense counsel and I wanted to offer it to the 24 Court. 25 THE COURT: You may do so. UNITED STATES DISTRICT COURT I've given Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:966 Page 16 of 76 Page ID 16 1 MR. O'BRIEN: 2 (Pause in the proceedings.) 3 THE COURT: 4 10:25AM The Government is ready. 7 MR. ROBINSON: Your Honor, we are, subject to our -- 8 our motion to withdraw. 10 THE COURT: All right. Which -- which the Court denies the motion to withdraw for the reasons set forth. Mr. Exum. 12 MR. EXUM: Is the Court -- I mean, I filed some documents on behalf of National Distribution. 14 THE COURT: Which I have read. 15 MR. EXUM: Right. 16 THE COURT: But I'm not doing that sentencing at the 17 moment. Um -- I'm just doing the individual. 18 MR. EXUM: Oh, sorry, Your Honor. 19 THE COURT: All right. 20 with your counsel at the lectern. 21 All right. 22 10:26AM Yes, Your Honor. 11 13 10:26AM Then, as to the sentencing MR. O'BRIEN: 9 10:26AM All right. as to Mr. Johansson, are both sides ready to proceed? 5 6 10:26AM It's a one-page letter. Mr. Johansson, you may stand Has the Government complied with the Crime Victims' Rights Act as to this proceeding? 23 MR. O'BRIEN: 24 THE COURT: 25 Sorry. Yes, Your Honor. Are there any victims who wish to address the Court, other than in the form of the written UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:967 Page 17 of 76 Page ID 17 1 2 10:26AM 10:27AM 10:27AM 10:27AM 10:27AM communications? MR. O'BRIEN: No, Your Honor. And just so the 3 record is clear, I just handed the Court -- and I can lodge a 4 copy later today -- of Mr. Velasquez's statement. 5 record itself contains the statements of Ms. Spencer and I 6 think one of her boys. 7 THE COURT: 8 MR. O'BRIEN: 9 THE COURT: All right. 10 All right. The presentence report was disclosed And the Yes. Okay. Thank you. Thank you. 11 originally on April the 4th, 2022, with the addendum on 12 November 22nd. Have you reviewed these with your client? 13 MR. ROBINSON: 14 THE COURT: 15 I have, Your Honor. Mr. Johansson, have you seen the probation office's reports in your case? 16 THE DEFENDANT: I've seen the probation office's 17 report maybe two or three weeks ago. 18 I've seen it. 19 THE COURT: All right. 20 discussed it with your lawyer? 21 THE DEFENDANT: 22 THE COURT: That was the first time You've seen it. Have you Yes, ma'am. All right. In addition to the 23 presentence reports, I have reviewed the Government's 24 sentencing memorandum and then the attachments to it, the 25 defense's sentencing memorandum and the documents attached to UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:968 Page 18 of 76 Page ID 18 10:28AM 10:28AM 10:28AM 10:28AM 10:29AM 1 that and, also, to the extent that it's relevant, the documents 2 attached -- or the pleadings and the documents attached in 3 connection with the motion to withdraw the plea. 4 Is this everything the parties have submitted? 5 MR. O'BRIEN: 6 Government is concerned. 7 MR. ROBINSON: 8 THE COURT: Yes, Your Honor. As far as the Yes, Your Honor. All right. Does either side have any 9 objections to the presentence report other than what you set 10 forth in the papers? 11 MR. ROBINSON: No, Your Honor. 12 MR. O'BRIEN: No, Your Honor. 13 THE COURT: All right. The Government filed several 14 objections. 15 presentence report. 16 guideline calculations in the presentence report. 17 the Court treats the guideline calculation as advisory and does 18 not presume that the guideline sentence is the appropriate 19 sentence. 20 Those were addressed in the revised and final I would adopt the factual findings and the Of course, The guideline range here is 87 to 108 months, a two- 21 to five-year period of supervised release, a fine ranging 22 between 25,000 and $1 million. 23 restitution, which I understand the parties are requesting that 24 that be taken up at a separate hearing to be set within 25 90 days. There's also the issue of Correct? UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:969 Page 19 of 76 Page ID 19 1 10:29AM 10:29AM 10:30AM 10:30AM Your Honor, I don't think that's 2 necessary. 3 think, not disputed as far as the banks are concerned. We've tried to get -- I mean, the restitution is, I 4 THE COURT: 5 MR. O'BRIEN: It's the individual victims. Right. And in the companion case 6 wherein Enrique Garcia is the defendant and in this case, the 7 Government reached out to the individual victims multiple, 8 multiple times and has not received any sort of documentation 9 to support the one restitution claim. 10 there would be any value in -- 11 THE COURT: 12 MR. O'BRIEN: 13 THE COURT: 14 10:29AM MR. O'BRIEN: And so I don't think All right. -- postponing -- So the Government isn't further seeking restitution as to the individual victims? 15 MR. O'BRIEN: That's correct, Your Honor. 16 THE COURT: 17 The offense -- the guideline range that I just All right. Thank you. 18 stated is based on the offense level of 28. As to Group 1, the 19 conspiracy count, the base offense level for a violation of 18, 20 United States Code, Section 371, is 8. 21 Guideline 2X1.1, the substantive offense under 49, U.S.C., 22 Section 5124, is Guideline 2O1.2 [sic], plus nine levels 23 under -- therefore, under 2O1.2(b)(2) [sic] because the offense 24 resulted in substantial likelihood of death or serious bodily 25 injury. But under Sentencing Plus two levels because the defendant was convicted UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:970 Page 20 of 76 Page ID 20 10:31AM 1 under 49, U.S.C., Section 5124. 2 adjusted base offense level. 3 defendant's role in the offense as an organizer or leader of 4 criminal activity that involved five or more participants. 5 controlled and operated the co-defendants, National and 6 Wholesale, and employed Garcia and Spicer. 7 obstruction of justice, resulting in an adjusted offense -- 8 total adjusted offense level of 25. 9 10:31AM 10 10:33AM He Plus two levels for That's as to the conspiracy count. As to Count 4, tax evasion, the base offense level 12 is 18 based on a tax loss of $298,562. 13 Section 2T. -- 2T4.1(g) and then two levels under 2T1.1(b)(2) 14 for use of sophisticated means, results in a base offense level 15 of 20. 16 10:32AM Plus four levels for the The base -- all right. 11 10:32AM So that means that 19 is the So under Guideline The offense was committed while on pretrial release. 17 And the conspiracy -- excuse me. The guideline calculation for 18 the group -- for Group 2, which is the offense committed while 19 on pretrial release and conspiracy to commit tax fraud, the 20 base offense level is 7 under Guideline Section 2X1.1 and 21 2B1.1. 22 the loss was more than $550,000 and less than $1.5 million. 23 The total loans were $954,417. 24 sophisticated means under Guideline Section 2B1.1(b)(10), 25 resulting in 23 plus 4 as an adjusted base level. And then 14 levels are added under 2B1.1(b)(1) because Plus two levels for use of UNITED STATES DISTRICT COURT And then Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:971 Page 21 of 76 Page ID 21 1 four levels because the defendant was the leader or organizer. 2 And three levels because he committed the offense while on 3 pretrial release, resulting in a Level 30. 4 10:33AM 10:33AM So taking into account the adjustment for multiple 5 counts, the offense level is 31, minus three levels for 6 acceptance of responsibility. 7 it's very questionable that the defendant has truly accepted 8 responsibility. 9 3553(a) factors. 10 11 defendant's criminal history category is 2. 12 conviction for conspiracy to violate the regulations, 13 et cetera, so he has three criminal history points. 15 I have considered whether a criminal history category of 2 16 substantially understates the defendant's criminal history and 17 the likelihood of recidivism. The defendant's sentencing request is a sentence of 19 57 months. 20 of 120 months. 21 22 The Government's sentencing request is a sentence So turning to the 3553(a) factors, the Court makes the following individualized determination. 23 10:35AM He has the 2000 Although the argument wasn't made by the Government, 18 10:34AM And I'll get into that when I go through the But as to the criminal history category, the 14 10:34AM Although, in my mind, I think Starting with the nature and circumstances of the 24 offense. And I have -- I have prepared some fairly lengthy 25 notes on that. But they're not intended to be exclusive, that UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:972 Page 22 of 76 Page ID 22 10:35AM 10:36AM 10:36AM 1 is, there are many more facts regarding the nature and 2 circumstances of the offenses here than I think needs to be 3 stated specifically on the record. 4 But in summary, as to the 18-114 case, the defendant 5 controlled and operated National Distribution Services from '09 6 to 2015 and Wholesale Distribution from 2015 to the present. 7 In 2015, National was transformed into a new entity, Wholesale. 8 Welding on cargo tanks that haul hazardous 9 materials, including crude oil is dangerous, highly dangerous 10 because of the danger of explosions and so forth. 11 companies doing this work are required to get an R stamp after 12 going through rigorous compliance procedures. 13 Neither the individual defendant nor the 14 co-defendants -- no one, corporate or individual, held the R 15 stamp. 16 10:36AM 10:37AM And so The defendant was well aware of the regulations 17 because he was previously convicted in April of 2000, after a 18 1993 cargo tank explosion when one of his welders conducted 19 repairs on a cargo tank, in violation of the regulations. 20 When he was released from prison, he received a 21 lenient sentence in that case. And after serving his prison 22 term, he was released and he returned to operating another 23 company doing the same type of work, Systems Logistics. 24 was based at the same location. 25 of National, which, again, didn't have an R stamp. That And in 2009 he assumed control UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:973 Page 23 of 76 Page ID 23 1 10:37AM 10:37AM 10:38AM 2 the name of someone, Mr. Scott, who the defendant met in prison 3 who was simply a straw man. 4 property when the explosion occurred in September 2012. 5 10:38AM And the defendant was on the At least five additional illegal welding repairs 6 were conducted between September of 2013 and May of 2014. 7 May 6th, 2014, during a welding job on a cargo tank, an 8 explosion occurred that caused severe injury to one person and 9 death to another victim. 10 On The defendant lied to the first responders at the 11 scene, saying he was a customer service rep of a different 12 trucking company. 13 victims worked for a different company. 14 fraudulent acts described in the presentence report -- excuse 15 me -- on September 13th, 2014, he signed an affidavit falsely 16 claiming to regulators that co-defendant Garcia worked for a 17 different company and that National had never done cargo tank 18 repairs. 19 10:38AM The owner and manager of National was listed under He gave a different name. He said the And among many other On -- I think I have this date right. August 20th, 20 2014, the FMCSA issued an emergency out-of-service order 21 barring National and the defendant from operating 37 specific 22 tankers and the defendant then shut National down and started 23 Wholesale with largely the same employees and management and 24 operated out of the same location. 25 John Corsini, who's another straw man. This was allegedly owned by UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:974 Page 24 of 76 Page ID 24 1 10:39AM 10:39AM 10:40AM As to the tax evasion counts, the defendant did not 2 file tax -- income tax returns for the period from 2012 to 3 2017. 4 personal expenses but -- of at least $1,174,173 in unreported 5 income. 6 in tuition payments for private high schools and a university 7 for his four children, but he directed his office manager to 8 write -- or to describe these expenses as employee training in 9 various records. He used income from National and Wholesale to pay for He used two corporate accounts to pay about $200,000 10 As I said, that's just a summary. 11 comprehensive account of all of the criminal conduct. 12 In the 21-170 case, while out on pretrial release, 13 over the Government's objection, the defendant established -- 14 that is, he was out on pretrial release over the Government's 15 objection. 16 appeal from the magistrate judge's order, the Government's 17 arguments that the defendant, if out on bail, will continue to 18 violate the law. 19 10:40AM I remember clearly the argument before me on the He established Western Distribution, AKA Advanced 20 Distribution. 21 oath that he was the sole owner of Western and had been so 22 since March of 2019. 23 10:40AM It's not a And in July of 2021, his son Carl claimed under But going back a bit, around 2003, the defendant's 24 company at the time, Systems Logistics, bought a company called 25 Agri-Comm. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:975 Page 25 of 76 Page ID 25 1 10:41AM Beginning in 2020, the defendant laid off almost all 2 of the employees at Western and then directed John Mello at 3 Agri-Comm to apply for a PPP loan, listing the defendant's 4 85-year-old mother as the company's owner to avoid disclosing 5 his criminal history on the PPP loan application. 6 received a loan of $286,500. 7 10:41AM And again, at that same time, April 2020, the 8 defendant directed his office manager, Mr. Surprenant, to apply 9 for a PPP loan on behalf of Western, listing his son as the 10 owner, again to avoid disclosing that he had been indicted. 11 10:41AM The application stated that Western had 31 full-time 12 employees despite the layoffs that I referred to earlier, and 13 he received a loan of $436,390 and then applied for loan 14 forgiveness, certifying the amount to be forgiven was used to 15 pay eligible costs, payroll costs, which it was not. 16 10:42AM 10:42AM And he The history and characteristics of the defendant. 17 He's 63 years old. He has two sisters. He grew up in Southern 18 California. 19 for a short period of time who locked him up for two days and, 20 as a result, he suffers from claustrophobia. 21 growing up, both of his parents worked and he held after-school 22 jobs and worked while he was in college. 23 He and his wife separated, I believe, in 2003. 24 children. 25 from his face. At 7, he claims he was sent to live with an uncle When he was He married in 1990. He has four He suffers from asthma, has had skin cancer removed He has -- and back. He suffers from high blood UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:976 Page 26 of 76 Page ID 26 1 pressure, high cholesterol, and irregular heartbeat and 2 depression and, as I said earlier, claims claustrophobia. 3 10:42AM 10:43AM 10:43AM 10:44AM 4 of the offense, promote respect for the law, and provide just 5 punishment. 6 safety regulations for this industry resulted in the serious 7 injury to more than one victim and death of one. 8 seriousness -- and this is just as to the -- what the defense 9 has referred to as the regulatory counts is made more serious 10 because of his previous experience and conviction for this type 11 of conduct. 12 failure to pay taxes on the large income he was earning over 13 the years by operating these businesses in violation of the 14 law. 15 The defendant's failure to abide by the essential And the And then, of course, that's coupled with his The defendant -- I'm not entirely sure that this 16 comes within the seriousness of the offense and the promote -- 17 the need to promote respect for the law. 18 to be mentioned that the defendant has, in his interview with 19 the probation office, repeatedly claimed that he really has no 20 assets and that his faith is such that -- that the accumulation 21 of worldly goods is frowned upon. 22 fraud and untruthfulness that permeates every part of this 23 case. 24 10:44AM The need for the sentence to reflect the seriousness 25 But I think it needs That's part of a pattern of The Government has provided a photograph of the residence where the defendant was previously living, which is UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:977 Page 27 of 76 Page ID 27 10:45AM 1 obviously a very large estate, and also informed the Court that 2 the defendant went to great efforts to keep the Government -- 3 the investigators from locating his residence. 4 reason it was actually finally located was because of the 5 pictures posted on TikTok by his son. 6 to one more reason why TikTok is something that's used often 7 and that -- acknowledgment of the effects it can have. 8 10:45AM 10:46AM But in this case, it helped the Government find the property where the defendant was living. 10 I guess, he was -- according to the Government, he was living 11 in a condominium in a gated community that was also worth a 12 great deal of money. And then after that, But the amounts of money that were realized from the 14 failure to pay income tax are very large. 15 crimes are very difficult to investigate in the sense paying 16 our taxes is a voluntary act. 17 taxes -- he didn't even file tax returns -- that's a very 18 serious offense. 19 10:46AM So you can chalk that up 9 13 10:46AM And the only And those types of And when people don't pay their The need for the sentence to afford adequate 20 deterrence to criminal conduct. This is a factor, in my view, 21 that's critical for several reasons. 22 First of all, the defendant wasn't deterred by the 23 lenient sentence he received after his 2000 conviction for the 24 same type of conduct. 25 He fails to take responsibility. Moreover, he continues to be untruthful. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:978 Page 28 of 76 Page ID 28 10:47AM 1 At his plea colloquy in this case, he admitted to 2 his knowledge of the circumstances, of the explosions, all of 3 the criminal conduct covered by the counts to which he was 4 offering his guilty plea. 5 ownership and control of the companies. 6 10:47AM 10:47AM In his latest filing, he swears under oath to the 7 contrary -- or he asserts to the contrary. 8 he -- again, he claims he has no assets. 9 types of residences that he has and also his efforts to hide 10 this. That's belied by the The need for the sentence to reflect -- or to 12 protect the public from further crimes of the defendant. 13 defense has argued that, given the defendant's age, he's 14 currently 63, and the fact that he will be in prison for some 15 period of time, that it's unlikely that he will re-offend. 16 That is belied by the record here. The His age does not mean that he won't re-offend. I 18 mean, when he committed these crimes, he wasn't a young man. 19 He committed the offense charged in Count 1, knowing -- after 20 his conviction in 2000. 21 offenses. 22 on pretrial release. 23 10:48AM He claims that 11 17 10:48AM Admitted, for example, to his But he also committed the tax And he committed the PPP loan fraud while he was out These aren't the kinds of crimes that require 24 physical stamina or strength that wanes in old age. 25 well commit the same or similar types of fraud, maybe even UNITED STATES DISTRICT COURT He could Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:979 Page 29 of 76 Page ID 29 10:48AM 1 while he's incarcerated but certainly if he is not incarcerated 2 for a lengthy period of time. 3 The need to avoid sentencing disparity. 4 argues that the conditions of pretrial confinement are grounds 5 for leniency and also argues about his -- his health 6 conditions. 7 10:49AM 10:49AM 10:50AM 10:50AM The defense But let me take up, first, the argument that the 8 conditions of his pretrial confinement are grounds for 9 leniency. 10 First of all, the claims are exaggerated. During the COVID pandemic, which was one of the 11 gravest crises our country and the world has faced in decades, 12 everyone suffered. 13 suffered. 14 And the measures that the B.O.P. took to alleviate the 15 danger -- or to guard against the danger of COVID infection, 16 that's what caused the defendant's hardship while he was 17 incarcerated, because he had committed PPP fraud while he was 18 out. And in particular -- I mean, everyone In particular, those who were incarcerated suffered. 19 So the quarantine measures were suffered by the -- 20 and the hardships involved with the quarantine measures were 21 shared by thousands of other prisoners. 22 think there's a soul in this country that wasn't affected and 23 didn't suffer to some extent, many people losing many family 24 members during COVID. 25 And again, I don't So I'm not moved by the conditions of pretrial UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:980 Page 30 of 76 Page ID 30 1 confinement as a grounds for leniency. 2 10:50AM The defendant does suffer from depression, 3 claustrophobia, and so forth. 4 That's all set forth in the psychological evaluation that was 5 submitted. 6 sets the defendant apart from many, many others. 7 10:51AM 10:51AM 10:52AM But again, there's nothing there that, in my view, And then, finally, I just have to note that, while 8 the defendant is seeking leniency because of the conditions 9 that he suffered in his pretrial incarceration because of the 10 COVID measures that were taken by the B.O.P., he also took 11 advantage of the efforts that the administration made to 12 provide these forgivable loans to -- so for someone who has 13 engaged in PPP fraud, to complain about what was happening in 14 prison because of COVID, there's a real disconnect there that I 15 feel I just -- I have to point out on the record. 16 10:52AM And I've considered that. So I've considered, you know, the voluminous filings 17 in this case, everything that the parties have filed. I've 18 considered the Government's recommendation, the defendant's 19 arguments for a sentence of 57 months, which is just short of 20 five years. 21 case, as the Government points out, is either close to or 22 exceeds 100 years. The total exposure that the defendant has in this 23 On certain counts alone, the maximum is 30 years. 24 And I seriously -- for all the reasons that I've set forth as 25 to everything in this case, I really seriously considered UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:981 Page 31 of 76 Page ID 31 1 whether 120 months is a sufficient sentence. 2 10:53AM But I think, after considering everything in the 3 case, I would sentence the defendant to 120 months. 4 considered sentencing him to 240 months, given the extent of 5 the fraud, the harm that was caused, and all of the other 6 factors that I've discussed at length. 7 8 My intended sentence is a sentence of 120 months, five years of supervised release. 9 10:53AM 10:53AM 10:54AM I'm not -- I'll listen to argument on the amount of 10 the fine because, although the defendant has, I think, 11 succeeded in hiding assets, I'm not persuaded that a fine is 12 not appropriate here, whether collecting it is feasible or not. 13 But then restitution in the amount that I stated earlier, that 14 is, the -- I think it's 968 -- what's the total amount? 15 sorry. 16 10:54AM I I'm $954,417. And that's a slight upward departure from the top 17 end of the guidelines here. 18 guideline range at 87 to 108 months. 19 that's the guideline range. 20 considered whether Criminal History Category 2 is an 21 understatement and whether the defendant really has accepted 22 responsibility because I -- if he did not receive the three 23 points downward adjustment for acceptance of responsibility, 24 120 months would be near the low end of the range. 25 All right. It's one year longer than the But as I -- I do conclude Although, as I said, I've Mr. Robinson, you may argue. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:982 Page 32 of 76 Page ID 32 1 2 10:54AM 10:55AM 10:55AM MR. ROBINSON: Mr. Johansson? 3 THE COURT: 4 (Off-the-record discussion between 5 the defendant and his counsel.) 6 MR. ROBINSON: 10:56AM You may. Your Honor, if I could just indicate 7 to the Court that, as we discussed at the start of this 8 proceeding, Mr. Johansson wants to address the Court with 9 respect to the record for the portion of the motion to withdraw 10 that goes to the loan fraud counts. 11 right to -- to allocute. 12 guideline applies. 13 between those two positions. 14 the Court. I've explained to him his I've explained to him how the 3E1.1 And I believe he understands the tension 15 THE COURT: 16 to make any argument? 17 10:56AM May I have one moment, please, with And so he would like to address All right. MR. ROBINSON: Before he does, do you wish Your Honor, I'm going to submit on 18 what we have provided to you with -- with one -- one 19 amplification. 20 a little bit more compromised than even what Dr. Lane 21 concluded. 22 needs significant treatment. 23 provide that treatment, as we all know, is outside of the 24 Bureau of Prisons. 25 But I would ask the Court to consider that and, as a condition I believe that Mr. Johansson's mental state is I've spent a lot of time with him. I know that he The most effective means to We're not asking for a quick release here. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:983 Page 33 of 76 Page ID 33 1 of his supervision, order that there be mental health 2 treatment. 3 10:56AM And in that, I believe the mental health treatment 4 will alleviate some of the Court's concerns with respect to the 5 need to protect the public. 6 that ten years be considered greater than necessary and ask for 7 more -- more in line with the guideline sentence, as the Court 8 has indicated. 9 10:57AM 10:57AM 10 10:57AM I'll submit it to you on those grounds. And then Mr. Johansson does wish to address the Court. 11 THE COURT: 12 THE DEFENDANT: 13 Um, hearing you read the statements that you made 14 over the last few minutes, I'm almost at a loss of where to 15 start. 16 10:57AM We would ask to -- we would ask All right. Mr. Johansson. Thank you, Your Honor. The Court has not heard one positive or exculpatory 17 thing about myself, my employees, my fellow employees, the 18 company, or any behavior conducted by any of those individuals 19 in four-and-a-half years. 20 My previous counsel, when you alluded to earlier 21 this morning about the delays and multiple delays and so on, 22 those were never my decisions. 23 wanted to go to trial. 24 not ready, not prepared. 25 was multiple, um, kicking the can down the road. I never wanted to delay. I And my counsel at the time was either That was obvious to me. UNITED STATES DISTRICT COURT And there That was Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:984 Page 34 of 76 Page ID 34 1 2 10:58AM 10:58AM 10:59AM tribunal regarding this accident from 2014. 4 investigated by city, county, state, and then more recently 5 federal regulators. 6 no criminal intent, no criminal charges. 7 filed by the state, they investigated for a year and a half, 8 and they dropped all the charges. 9 Because this was a horrible accident where a man by the name of 10 Samuel Enciso lost his life unnecessarily, clearly. We were The other three parties investigated found He was a good man. Criminal charges were Why did they do that? And he was -- he was a good 12 person to be around. 13 to jeopardize anyone in the company ever, Mr. Enciso or anyone 14 else, for -- for love or money. But there was no intent on anyone's part 15 Um, so having had to endure this process now for 16 eight-and-a-half years and, as regards to federal charges, 17 spent four years resisting plea offers where my own counsel was 18 more or less badgering me to take a plea as I professed my 19 innocence and as they did no -- no, you know, review of my 20 discovery of -- of anything related to my case. 21 10:59AM With that being said, this is more or less my fourth 3 11 10:58AM never my decision or intention. Um, in a weak moment, when I was physically ill and 22 despondent and traumatized, if you will, I sat right here in 23 the corner of this table. 24 indict my son who had just gotten out of college, had worked 25 for the company for a handful of months, completely innocent of And the prosecution threatened to UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:985 Page 35 of 76 Page ID 35 11:00AM 1 anything in his entire life, save for a traffic ticket, that he 2 was going to be indicted and my sister was going to lose her 3 home if I didn't sign a plea document that, frankly, I couldn't 4 even have read. 5 documents and I had no glasses to do that, if you remember that 6 whole episode. 7 11:00AM I've cared about everyone I've ever worked with, in 8 or around. I would never ever jeopardize anyone for one penny 9 in any way, shape, or form or for any other motivation. 10 never did. 11 11:00AM 11:00AM 11:01AM There was over a hundred pages of plea And I I was charged of an incident from 1992, 30 years 12 ago. The Government has -- has convinced you and clarified -- 13 or implied to you that that was somehow an employee of our 14 company or whatnot. 15 died in the accident in 1992 from a welding accident on a tank 16 trailer worked for a third party vendor. 17 employee. 18 worked for, we did not even do welding. 19 everything. 20 this company, which, over the course of the 12 months prior to 21 the accident, had did, I think, 12 or 13 jobs for maybe $400 22 each. The truth of the matter is the fellow that He was not our Our company, which was Atlas at the time that I We subbed out Everything we had went to outside shops, including 23 There was a five-year investigation that went on, a 24 cloud over the company, a cloud over myself, and I stepped up. 25 And according to my -- my attorney at the time suggested I sign UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:986 Page 36 of 76 Page ID 36 11:01AM 11:01AM 11:01AM 1 a plea to put the whole thing to bed, put it behind everybody. 2 And so I did that. 3 probation. 4 As it turned out, I got 15 months. 5 Judge Paez, who I very much respect, in going through the 6 sentencing hearing, it dawned on him, as it did with us on the 7 defense side, that I had pled guilty to two things that weren't 8 even federal crimes. 9 they're not even state crimes. 10 11:02AM However, They were not federal crimes. In fact, But as I -- as I asked my attorney, hey, isn't this 11 the Perry Mason moment? 12 object and whatnot? 13 sentenced to 15 months in federal prison for something, 14 frankly, I had absolutely nothing to do with. 15 I -- I -- at that point in time I chalked it up as the worst 16 mistake of my life, to plead guilty to something I didn't do. 17 However, it did put the case to bed. 18 which was -- was some benefit. 19 11:02AM I was told I would get six months Aren't you supposed to stand up and He did nothing. And as a result, I got And -- and I -- It put it behind me, Um, prior to that point, I had never had any trouble 20 with the law in any way, shape, or form, including paying all 21 my taxes. 22 Fast-forward 30 years or 20 -- well, 28 years, we 23 have -- we have a horrible accident at the Corona location. 24 was not there that day. 25 on. I I did not know any welding was going I did not instruct anyone to weld, nor would I if someone UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:987 Page 37 of 76 Page ID 37 1 11:02AM had informed me so. 2 Um, the welding job in question, if you want to call 3 it that, was actually, from a financial standpoint, a negative 4 to the company as opposed to what the trailer needed to have 5 done. 6 11:03AM The intention to change the dome lid out was done on 7 Tuesday morning at the suggestion of Danny Lopez Velasquez. 8 was his idea to change the dome lid out. 9 supervisor, his foreman, Sam Enciso, the fellow that passed 10 away, they both went to Henry and suggested they wanted to 11 change the dome lid out because it had -- the new style had the 12 vent built in as opposed to the old style that was on the 13 trailer. 14 11:03AM 11:03AM 11:03AM No one else. His The old style dome lid that was on the trailer 15 didn't even need to be replaced. 16 this to happen at all, which is -- which is doubly troubling 17 regarding a man who lost his life. 18 happen. 19 to upgrade the dome lid on their own. 20 It There was no need for any of It didn't even have to There was no need even for that repair. They decided And Henry, who had just come back from a ten-day 21 vacation and wasn't even up to speed on all the projects in the 22 shop, said, "Fine, go ahead, guys. 23 That's fine." 24 I had no idea that these guys were going to do that. 25 Do what you want to do. That was the extent of it. I wasn't even there. The Government contends that I knew all about it and UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:988 Page 38 of 76 Page ID 38 1 11:04AM I ordered them. 11:04AM The -- unless I have a crystal ball or some sort of 3 time machine, there's no way I could have known that that was 4 going to happen. 5 said we're going to replace a perfectly good dome lid with 6 another dome lid that's also perfectly good, to no apparent 7 gain other than a convenience for the maintenance fellows, I 8 would not have approved it. 11:05AM And as a manager of the company, if someone Um, there's so much I want to cover based upon what 10 you said over the last five minutes. I'm -- I'm -- I'm, 11 frankly, just scattered regarding it. But as far as the PPP, 12 Agri-Comm's loan for $286,000. 13 was purchased with funds from my father in 2004. 14 was in bankruptcy. 15 away. 16 it would go to, I would assume my mom. Agri-Comm was a company that My father bought it. The shares transferred to my mom. 17 11:05AM Absolutely impossible. 2 9 11:04AM It's impossible. That company My father passed I don't know who else I have never been an employee of Agri-Comm. I have 18 never been an officer of Agri-Comm. 19 Agri-Comm. 20 20 years of a family relationship to that company, I have 21 stopped by that company in Central California or North Central 22 California a dozen times in 20 years. 23 coming back from some visit from a relative or something who 24 just popped in to say hello. 25 I have never worked at I know three or four employees that work there. In And that's usually just As far as the PPP for Agri-Comm, I never suggested UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:989 Page 39 of 76 Page ID 39 11:05AM 11:05AM 1 to anyone at Agri-Comm to get a PPP loan. 2 loans, I heard about the program on the radio and so on. 3 John Mello, who is a 24-year president of Agri-Comm 4 who ran that company from top to bottom, stem to stern, called 5 me one day. And he said, "Hey, we haven't talked about this in 6 a long time. But who owns the stock in the company since your 7 dad passed away?" 8 And I said, "It's my mom." 9 He said, "Okay. 10 number and Social Security number." 11 12 joke, he said, "Has your mom ever been in trouble?" And I said, "My mom's in her 80s. in trouble for anything." And I thought he was sort of joking, 15 being flippant about it. I didn't even understand what the 16 question was. So I said, "Fine. 18 Security number. 19 day," which I did. 20 the PPP for Agri-Comm. 21 11:06AM She's never been 14 17 11:06AM I need your mom's address and phone And then he also said, which I thought was almost a 13 11:06AM I knew about PPP I'll get it to you this afternoon or the next That's the extent of my involvement with The funds that went to Agri-Comm went to their 22 payroll account. 23 guidelines. 24 anyone else. 25 I'll get her address and Social The funds were used entirely per PPP And not one penny went to me or my family or In fact, Mr. Mello in his statement to the UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:990 Page 40 of 76 Page ID 40 11:06AM 11:07AM 1 Government has testified that in 20-plus years, I personally 2 nor anyone from my family has ever received one penny in 3 payroll or dividends or funds of any kind from Agri-Comm at 4 all. Zero. 5 So for the Government to quote the -- Mr. O'Brien's 6 comments regarding the presentence -- that I pocketed this 7 money is -- is, frankly, a travesty to the truth. 8 never saw one penny of that, nor did I solicit a penny. 9 have never solicited a penny from Agri-Comm in 10 20-something-plus years. I never ran that company. 11 non-compensated director. That was it. 12 role in anything to do with Agri-Comm. 13 11:07AM 11:07AM And I I was a I had a very minor John Mello ran that company as he saw fit. He -- 14 he -- he and his family earned $450,000 a year running that 15 company. 16 from the PP -- from their bank, which I had no relation to 17 their bank, don't even know anyone at their bank. 18 got that $286,000, used it exactly per program guidelines with 19 no involvement or benefit to myself. 20 That's the Agri-Comm loan. It was -- funds were sent The company As far as Western Distribution's PPP loan, the 21 company qualified for a $486,000 PPP loan. 22 awarded a $486,000 PPP loan. 23 11:08AM I never -- I The company was At that time, with Western Distribution being a jet 24 fuel distribution company, our business at that company had 25 dropped 80 percent. We did lay off most everybody. UNITED STATES DISTRICT COURT Why? Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:991 Page 41 of 76 Page ID 41 1 There was nothing to do. 2 11:08AM 11:08AM 3 around and do nothing all day. 4 of the company. 5 My son had quit taking a paycheck. 6 four or five paychecks he never even cashed and he was working 7 there. 8 taxable payroll, by the way, through Paychex services with 9 taxes taken out. 11:09AM 11:09AM It was meant for the survival I had quit taking a paycheck by that point. He had backpay -- he had I had four or five paychecks I never even cashed. But 10 The company put the money in its corporate accounts. 11 And we had 24 or 26 weeks to use the funds according to program 12 guidelines, which they were. 13 11:08AM The PPP program didn't mandate hire people to stand The Government says I pocketed this money and spent 14 it on other things for myself. Absolutely untrue. I basically 15 worked -- I worked without pay for over a year to try and make 16 sure that company would survive for the benefit of the 17 employees there that I cared about. 18 The Government has done everything but classified me 19 and categorized me as someone that has horns sticking out of my 20 head and carrying a pitchfork. 21 portrayed to the Court in any way, shape, or form. 22 lot of it on myself for the last four years with Mr. Werksman 23 doing absolutely nothing to put forth anything exculpatory 24 regarding this case to the Court or pushed back on any of the 25 Government's assertions. None. I'm not the person that's been And I put a I should have -- I should have UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:992 Page 42 of 76 Page ID 42 1 terminated my relationship with him sooner than the beginning 2 of this year. 3 11:09AM By the way, funds that were paid to Mr. Werksman and 4 his firm were substantial. 5 the retainer was signed in 2018 that it says, if you take a 6 plea, all funds are 100 percent due -- 100 percent earned. 7 11:10AM Mr. Werksman had been paid to take the company and 8 myself to trial. 9 last insult from the Werksman firm was a bill for $10,000, 10 which was paid, to hire an investigator who was never hired and 11 never investigated anything. 12 Mr. Werksman. 13 11:10AM 11:10AM 11:10AM I -- I didn't notice at the time Obviously that didn't happen. In fact, the So I parted ways with The Government contends that I have some sort of 14 vast financial resources to hire all these people that are here 15 to -- to defend myself and the company. 16 help that has been done of any substantive nature in preparing 17 the discovery in my case was done by family members, friends, 18 attorneys that are acting pro bono because -- because they're 19 shocked at the situation I'm in. 20 Frankly, most of the But following that line, you said that you think 21 that it's -- it's unseemly that I contend that I am not someone 22 focused on material possessions. That's absolutely true. 23 Can the Government point to anything other than my 24 mistake of renting a house from a friend, which was a mistake, 25 I admit it. That's the only extravagance I've ever had in my UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:993 Page 43 of 76 Page ID 43 1 life, Your Honor. 2 11:11AM I've driven three cars in 30 years -- a GMC, a 3 Volkswagen -- 2004 Volkswagen Golf, a little red car. 4 335,000 miles on it before the engine blew. 5 that's got 250,000 miles. 6 cars. 7 no ski boats, there's no -- nothing in my life. 9 a home in my life. 10 even the 1992 accident. 11:12AM I've never owned All of that precedes anything going back to I was raised by my grandmother predominantly in a 12 Swedish family. 13 maybe not the current generation but certainly my grandparents 14 and myself, it's du tar lagom. 15 than you need and you don't want for more than you need. 16 11:12AM Those are the three I have never had a home mortgage. 11 11:11AM And a minivan There's no sports cars, there's no luxury cars, there's 8 11:11AM Three cars. I put There is a philosophy that Swedish people -- It means you don't take more And unlike the American colloquialism of keeping up 17 with the Joneses, that's the antithesis of how I was raised. 18 You were meant to help your neighbor, not trying to be better 19 or one up them. That's not me. 20 Your Honor, I made a mistake. 21 large home from a friend who was in a bad situation. 22 mistake. 23 if you'll have it, for renting that house for those few years. 24 Big mistake. 25 I agreed to rent a It was a And it was -- and it was clearly a luxury indulgence, I wish I could go back and -- and undo that. That's -- but, again, the genesis of that was me UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:994 Page 44 of 76 Page ID 44 11:12AM 11:12AM 11:13AM 11:13AM 1 helping a friend who was about to lose his home because he 2 couldn't afford it. 3 was supposed to be temporary, and it didn't turn out to be very 4 temporary. And it 5 But the house -- the $2.1 million home that the 6 Government refers to, that's a condo my parents bought over 7 30 years ago. 8 lived anywhere in my life other than rental properties or with 9 family members. 10 I don't own it. I've lived there. I've never I don't -- I don't -- I don't covet material 11 possessions. 12 have gold watches. 13 sports cars or luxury cars or anything of that nature. 14 not me. 15 last 40 years. 16 people around me. I don't have any material possessions. I don't I don't have -- like I said, I've never had I like to work. That's That's what I've always done for the And I've worked not just for myself but the 17 I was asked by my family, there was going to be -- 18 there was going to be 150 people in here -- employees, family 19 members, friends. 20 This isn't the day. 21 gallery. 22 told them not to come. 23 24 11:13AM He was having cash flow problems. 25 And I said, no, this isn't the day for it. You don't need to come and fill up the I didn't anticipate getting sentenced today, so I Again, a mistake on my part. But how I've been portrayed to the Court has just been -- has been a travesty to the truth, frankly, Your Honor. The Western -- getting back to the Western loan, UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:995 Page 45 of 76 Page ID 45 11:14AM 1 Western got the 486,000. 2 had 24 weeks to put those funds to use according to the program 3 guidelines. 4 never got one penny of that nor any family member or my son or 5 anyone else. 6 skeleton crew because there was no work. 7 8 11:14AM 10 11:14AM I But at the time we got the loan, yes, we were a company together -THE COURT: All right. You've made -- you've already addressed that point. 11 THE DEFENDANT: Okay. 12 MR. ROBINSON: May I just have one moment, please? 13 (Off-the-record discussion between 14 the defendant and his counsel.) 15 THE DEFENDANT: Okay. The -- the Government -- the 16 Government said that the reason for the fraud was somehow for 17 me to pocket the money. 18 11:14AM And that's exactly what they were used for. We I was desperately trying to see if we could hold the 9 11:14AM It went in its business account. Again, never happened. But I did request from John Mello, because it 19 appeared that because we had lost so much payroll, we weren't 20 going to qualify for a workers' compensation program. 21 asked him would he be okay with moving a few employees onto our 22 payroll group. 23 it's not that big of a deal, go ahead and you can do it. 24 did. 25 So I He was not happy about it, but he said, yeah, So we That was to address a workers' compensation issue UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:996 Page 46 of 76 Page ID 46 1 that we were going to lose our program because we weren't 2 producing enough workers' comp payroll revenue for it, frankly. 3 Had nothing to do with cheating PPP out of anything. 4 11:15AM 11:15AM Um, I never signed any documents for PPP, I never 5 spoke to any -- anyone at the bank other than the initial call 6 to ask if they would entertain a PPP loan. 7 any or review any documents that were presented to the PPP loan 8 forgiveness. 9 The worst you can say about the PPP for Western was 10 that we had an administrative mistake for -- we were overfunded 11 $54,000. 12 the SBA. And when it was apparent, the funds were returned to 13 11:15AM 11:16AM 11:16AM I didn't provide Again, nothing went in my pocket, family's pocket or 14 anything. I worked diligently for the entire time of COVID to 15 try and keep the company going. 16 able to do that. 17 had guys working -- I got them jobs driving forklifts at 18 different companies and vendors we worked for and so on for the 19 benefit of the employees and not for myself. 20 wasn't -- I wasn't getting paid at the time. And -- and, fortunately, I was I was running around trying to find work -- I As I said, I 21 I -- there's so many things in the plea agreement 22 that are just -- just, frankly, so -- so untrue and baseless. 23 The -- the notion that no one in the company cared 24 about safety and these sorts of things is just patently 25 ridiculous. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:997 Page 47 of 76 Page ID 47 1 11:16AM 11:17AM We had a full-time safety director. 2 $75,000 a year plus benefits. 3 director for, compared to some of our competitors, a fairly 4 small company. 5 assist in training for our drivers, eight-hour single classes 6 by specified trainers once a year. No one compelled us to do 7 that. We could have saved $100,000 8 doing that, but we didn't. 9 on a regular basis because I thought it was the prudent and 10 safe thing to do. 11 11:17AM 11:17AM He was a full-time safety We paid over 100,000 a year to have someone We didn't have to do that. I -- I instructed that to be done Our -- our shop facilities -- we had weekly safety 12 meetings in the shop. 13 every week, and the company paid for lunch for all the guys. 14 And in the entire time at that facility, we had no workers' 15 comp accidents ever, with the exception of the one accident in 16 2014. 17 11:17AM Mr. Spicer made Mr. Spicer typically conducted those In fact, our workers' compensation modification 18 factor was a 63. That's not good; that's exceptional. It's 19 because we ran a safe shop. 20 we had our trucks that were -- were -- had tracking devices on 21 them. 22 I mean, we went to great lengths. 23 THE COURT: We had safety bonuses, we had -- We limited the speeds to them so drivers couldn't speed. 24 ask you to wrap up. 25 want to say -- All right. Is there any -- I'm going to If there's anything else that -- that you UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:998 Page 48 of 76 Page ID 48 11:18AM 1 THE DEFENDANT: 2 THE COURT: 3 THE DEFENDANT: 11:18AM 11:19AM Okay. perjured myself on that plea. 5 reasons. I sat right there and I I signed that plea for three Number one, six of the last ten years I did -- I did 7 my taxes. 8 with the dollar figure that the -- that the Government has. 9 figure, I remember, is $244,000. 10 Because I was -- I knew I had to deal with that at some point. 11 I have an explanation for not filing the taxes, but I never mailed them in. I don't necessarily agree My Why do I remember that? 12 it didn't relieve me of the obligation. 13 I am guilty of. 14 I was brought up, I should have made sure those got paid. 15 got behind a couple of years, and I never caught up. 16 11:18AM -- I want you to wrap it up. 4 6 11:18AM Your Honor -- Of the taxes, I am -- I should have like -- most Americans and like I However, over the last four or five years I've filed 17 and paid and not had an issue. But the previous six years in 18 question by the Government, no. I didn't file those. 19 100 percent my responsibility, and I should have. 20 It was The DOT charges and the PPP charges are -- are, 21 frankly, a wild distortion of the facts, circumstances, witness 22 statements, and regulations. 23 just mentioned are exculpatory to myself. 24 I believe they're fact and provable. 25 All of those things that I have It's not my opinion; And the third reason I signed was -- or the second UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:999 Page 49 of 76 Page ID 49 11:19AM 1 reason I signed the plea agreement was because I was threatened 2 that they were going to indict my son who had done nothing 3 wrong. 4 And that was their final push to get me to sign the plea. 5 then, also, take my sister's house if -- if I didn't sign the 6 plea. I believe the Government knows he's done nothing wrong. 7 11:19AM How can I be responsible for knowingly and willfully 8 defrauding the Government on a bank fraud loan when I didn't 9 know anything about it and didn't realize that there was 10 anything wrong because I didn't expect there was anything 11 wrong, didn't assume anything was wrong? 12 11:20AM 11:20AM 11:20AM And In fact, the Department of Transportation sent us a 13 subpoena for documents to Western. I called, um, 14 Ms. Strickland here per the subpoena, which said if you have 15 any questions, call, which I did. 16 messages, it was not returned. 17 confused about what they were asking for. I called her twice, left Because I had questions. 18 The DOT was asking for certain information, 19 financial -- banking information, I thought it was odd. 20 like the subpoena -- 21 THE COURT: 22 THE DEFENDANT: I was So Like I said, you need to wrap up. Okay. I attempted to contact 23 Ms. Strickland because I -- I was confused by what they were 24 asking for. 25 Of course, the Government portrays it as I'm UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1000 Page 50 of 76 Page ID 50 11:20AM 11:21AM 11:21AM 11:21AM 1 blatantly, flagrantly creating bank fraud to line my own 2 pockets, when that just absolutely didn't happen at all. 3 And so I signed a plea, really to take 4 responsibility for the taxes, which I did, and protect my son, 5 whom I love, and my sister, whom I love, two people totally 6 innocent and shouldn't have any repercussions for any of this. 7 But I'm genuinely not guilty of the DOT charges, and I don't 8 believe that's my opinion. 9 provable. And the same thing with the PPP stuff. 10 The worst you can say about the PPP is there was an 11 administrative mistake made by some office personnel at Western 12 and the bank. 13 were sent back to the SBA. There was a $54,000 overfunding, and the funds 14 THE COURT: 15 THE DEFENDANT: All right. And no one -- no one spent any of 16 those funds on anything other than program guidelines 17 required -- requirements. 18 THE COURT: 19 to make your points. All right. Thank you. You've had time 20 I'm going to let the Government respond. 21 that, though, I just want to make a few points on the record. 22 23 11:21AM I think that's provable, easily Before Everything that the defendant has said as to his factual innocence is belied by the plea colloquy. 24 And as for the claim that he didn't have glasses -- 25 he didn't have his glasses, he couldn't read all the documents, UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1001 Page 51 of 76 Page ID 51 11:22AM 1 the transcript makes it clear and my memory confirms it that at 2 the plea hearing, we gave a lengthy recess so that the 3 defendant would have the ability to get glasses and have 4 everything read to him. 5 THE DEFENDANT: May I comment, Your Honor? 6 THE COURT: No. 7 11:22AM 11:22AM One thing really struck me listening to the 9 defendant's allocution, which is at one point saying that 10 pleading guilty when he was innocent back in 2000 was the 11 biggest mistake he ever made in his life. 12 he chose to do it again. But then apparently 13 So you knew, according to your own words, that it 14 was a mistake to plead guilty and perjure yourself the first 15 time -- 16 THE DEFENDANT: 17 THE COURT: 18 THE DEFENDANT: 19 THE COURT: No -- -- but you did it again. No one threatened my family in 1992. Well, on the record I asked you many 20 times. 21 motion to withdraw the plea, because of the way the case had 22 progressed. 23 11:23AM You've already had your chance to allocute. 8 11:22AM No. I have to say, I anticipated something like this, a And I think I'm usually very careful when I take a 24 plea. I never want to take a plea from someone unless they 25 really understand what they're doing and they agree that UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1002 Page 52 of 76 Page ID 52 11:23AM 1 they've done the things that they are pleading guilty to. 2 there's many times where I have stopped in the middle of a plea 3 colloquy and said I'm not going to take this plea because I 4 don't think the defendant understands or the defendant is 5 claiming that he is innocent and I won't take his guilty plea. 6 11:23AM So I was extra careful in this case. 11:24AM defendant stated under oath that no one had made any threats to 8 him or anyone in his family. 9 statements that were made under oath during the plea colloquy 10 that are being contradicted -- or attempted to be contradicted 11 today, and I'm simply not persuaded. And that's just one of many On the taxes, there was one thing I neglected to 13 mention earlier and that is -- well, first of all, the 14 defendant's argument is that he filled them out but he didn't 15 mail them. That's, of course, no defense on the tax charges. 16 But as the Government points out, he was required 17 under the plea agreement to -- I believe it was filed back -- 18 filed the forms for the years he hadn't done it and he still 19 has not done that. 20 THE DEFENDANT: Mr. Werksman instructed -- 21 THE COURT: No. You've had a chance to speak All right. Mr. O'Brien, is there anything you want 22 already. 23 24 11:24AM And the 7 12 11:24AM And 25 to add? MR. O'BRIEN: Thank you, Your Honor. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1003 Page 53 of 76 Page ID 53 1 11:24AM 2 clarifications just so the record is clear, and then I'll just 3 respond briefly because I don't want to -- 4 THE COURT: 5 MR. O'BRIEN: 6 11:24AM Your Honor, I just -- I'd like to make a few 7 THE COURT: 8 MR. O'BRIEN: Go ahead. Your Honor, when you were discussing the guidelines, I just want to make sure a couple of things are 10 correct for the record. 11 You referred -- excuse me. 12 you referred a few times to 2O in the guidelines. 13 you got the guidelines right, but it's -- 15 17 THE COURT: 19 On the welding counts, No, but I -- all right. was 2 zero -- not 2 zero -- the letter O. MR. O'BRIEN: It's 2Q. So I thought it It's Q? Your Honor, I defer to the Court, but in my -- I believe it's 2Q. 18 THE COURT: Well, I have the -- I have the guidelines here, of course. 20 Oh, no, you're right. It is -- it is 2Q. There's 21 underlining, and that's what made me read it as a zero on 22 screen. I apologize. 23 11:25AM No. 9 16 11:25AM I appreciate the Court's attention to this case, and I don't want to belabor the point. 14 11:25AM Go ahead. You're right. MR. O'BRIEN: 24 thing. 25 correct. Anyway, Your Honor, it's a minor The PSR gets it correct, and Your Honor's points were I just think -- UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1004 Page 54 of 76 Page ID 54 1 2 3 11:25AM 11:26AM 11:26AM 11:26AM You're right. It is a Q. I was reading it as an O. MR. O'BRIEN: Secondly, Your Honor, I think briefly 4 the Court mentioned the second group, which is the PPP loan 5 fraud, and referred to it as the tax group. 6 the Court just misspoke. 7 THE COURT: 8 MR. O'BRIEN: But I think maybe You're correct. Third, Your Honor, on the restitution, 9 I believe the Court omitted the IRS portion, which should be 10 part of the restitution order. 11 THE COURT: That's right. The number that I stated 12 was simply the number for the -- for the two banks, and it's 13 $298,562 for the IRS. 14 MR. O'BRIEN: 15 THE COURT: 16 MR. O'BRIEN: Thank you, Your Honor. All right. Um, Your Honor, I agree with 17 everything the Court has said this morning. 18 going to refute point by point the many misstatements in 19 defendant's allocution. 20 couple and then I'll be done. 21 11:26AM THE COURT: And so I'm not I just briefly want to mention a The State dropped its criminal investigation, the 22 Riverside County District's Office, into the May 2014 explosion 23 because we filed our Indictment. 24 exonerated the defendant is absurd. 25 The idea that they somehow There's never been any threats by the Government. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1005 Page 55 of 76 Page ID 55 1 None of defendant's very capable counsel have ever alleged 2 that, to their credit. 3 11:27AM 4 after the explosion and -- I went back and looked at the 5 footage -- he was there that morning. 6 was there the day before. It's all on his own -- ironically 7 his own security footage. So, again, that's just patently 8 untrue. 9 11:27AM 11:28AM 11:28AM So this -- he said he The idea that, you know, he was somehow tricked, 10 coerced at the change of plea hearing, wasn't paying attention, 11 if -- as the Court, I'm sure, knows, he made careful 12 interlineations on almost all of the factual basis -- factual 13 bases to the four plea agreements on very technical matters. 14 11:27AM Defendant was at the facility on May 6th, 2014, both He was there. He was paying attention. The mental 15 health report generated by the defense casts no doubt on his 16 understanding of those proceedings. 17 know, he wasn't paying attention or capable of paying attention 18 is refuted by those interlineations, which are very careful -- 19 carefully made and initialed by defendant. 20 So the idea that, you Regarding his statements about the Agri-Comm loans. 21 The Agri-Comm loans weren't charged in the Indictment. 22 they're relevant and I disagree with almost everything he said 23 about Agri-Comm, but those weren't charged in the Indictment. 24 And these criticisms of his former counsel, as the 25 So Court is well aware, there was heavy motion practice before the UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1006 Page 56 of 76 Page ID 56 11:28AM 1 trial dates years ago in this case. 2 wasn't actively pursuing a defense on behalf of Johansson and 3 all of his attorneys on behalf of the corporations is belied by 4 the docket in this case, which, as the Court knows, was subject 5 to heavy, heavy motion practice. 6 11:28AM 11:29AM 11:29AM And finally, Your Honor, just for the record, just 7 so there's no confusion, the Government is recommending a 8 ten-year prison sentence and not a day more. 9 Thank you. 10 THE COURT: 11 MR. ROBINSON: 12 THE COURT: 13 (Off-the-record discussion between 14 the defendant and his counsel.) 15 MR. ROBINSON: All right. Mr. Robinson? May I have one moment, please? Yes, you may. Your Honor, if I may, Mr. Johansson 16 just asked me to clarify that he was at the business in the 17 morning of the -- of the explosion, early morning. 18 there when it happened. 19 called that there was the accident. 20 Mr. Johansson meant when he said he wasn't at the location on 21 that day. 22 probably that he wasn't there at the time of the explosion. 23 11:30AM The idea that the defense He wasn't He came back in response to being And that's -- that's what It should have been more artfully stated by me THE COURT: All right. Then I intend to sentence 24 the defendant to 120 months, a five-year period of supervised 25 release, and order restitution. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1007 Page 57 of 76 Page ID 57 1 2 The Government did not argue about fines, so I'm not going to impose a fine at this time. 3 4 11:30AM 11:30AM 11:30AM 11:31AM 11:31AM Any legal cause why sentence should not now be imposed? 5 MR. ROBINSON: Other than with respect to the 6 motions to withdraw, no, Your Honor. 7 THE COURT: All right. 8 MR. ROBINSON: And I say that -- 9 THE DEFENDANT: You heard the threat; right? 10 MR. ROBINSON: And I say that just so there's no 11 argument of waiver later. 12 just -- I don't anticipate that, but I 13 THE COURT: I understand. 14 All right. The Court has considered the sentencing 15 factors set forth at 18, United States Code, Section 3553(a), 16 as well as the advisory Sentencing Guidelines and hereby impose 17 a sentence as follows: 18 It's ordered that the defendant shall pay to the 19 United States a special assessment of $500 due immediately. 20 Any unpaid balance shall be due during the period of 21 imprisonment at the rate of not less than $25 per quarter 22 pursuant to the B.O.P.'s Inmate Financial Responsibility 23 Program. 24 It's ordered that the defendant shall pay 25 restitution in the total amount of $1,252,979 pursuant to 18, UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1008 Page 58 of 76 Page ID 58 1 United States Code, Section 3663(a). 2 3 11:31AM 11:32AM The amount of restitution ordered shall be paid as follows: 4 To the victim IRS, $298,562; 5 To BAC Community Bank, $667,917; 6 Bank of the West, $286,500. 7 If the defendant makes a partial payment, each payee 8 shall receive approximately proportional payment unless another 9 priority order or percentage payment is specified in the 10 judgment. 11 11:32AM 12 that the defendant's economic circumstances allow for 13 restitution payments under the following schedule: 14 Restitution shall be due during the period of 15 imprisonment at the rate of not less than $25 per quarter 16 pursuant to the B.O.P.'s Inmate Financial Responsibility 17 Program. 18 11:32AM If any amount of restitution remains unpaid after 19 release from custody, nominal monthly payments of at least 20 10 percent of the defendant's gross monthly income but not less 21 than $100, whichever is greater, shall be made during the 22 period of supervised release. 23 24 11:32AM The Court finds from a consideration of the record 25 These payments shall begin 90 days after the commencement of supervision. Nominal restitution payments are ordered, as the UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1009 Page 59 of 76 Page ID 59 11:33AM 11:33AM 1 Court finds the defendant's economic circumstances do not allow 2 for either immediate or future repayment of the amount ordered. 3 Pursuant to 18, United States Code, 4 Section 3612(f)(3)(A), interest on restitution ordered is 5 waived because the defendant doesn't have the ability to pay 6 interest, but payments may be subject to penalties for default 7 and delinquency under 18, U.S.C., Section 3612(g). 8 With respect to the restitution owed to the victims 9 BAC Community Bank and Bank of the West, the defendant shall be 10 held jointly and severally liable with convicted defendant 11 Western Distribution, LLC, in Case No. 21-170, for the amount 12 of restitution ordered in this judgment. 13 11:33AM 14 their loss, and the defendant's liability for restitution 15 ceases if and when the victims receive full restitution. 16 The defendant shall comply with Second Amended 17 11:34AM 11:34AM The victims' recovery is limited to the amount of General Order No. 20-04. 18 The Court waives all fines, as it finds the 19 defendant doesn't have the ability to pay a fine in addition to 20 restitution. 21 The Court has found the property identified in the 22 preliminary order of forfeiture in Case No. 21-170 is subject 23 to forfeiture, and the preliminary order is incorporated by 24 reference into this judgment and is final. 25 The Court recommends that the Bureau of Prisons UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1010 Page 60 of 76 Page ID 60 1 conduct a mental health evaluation of the defendant and provide 2 all necessary treatment. 3 11:34AM 11:35AM 11:35AM 11:35AM 4 the judgment of the Court that the defendant, Carl Bradley 5 Johansson, is hereby committed on Counts 1, 2, and 4 of the 6 Second Superseding Indictment filed in Docket 7 No. 0973 5:18-114(B) and Counts 1 and 3 of the Indictment filed 8 in Docket No. 21-170 to the custody of the Bureau of Prisons to 9 be imprisoned for a term of 120 months. 10 This term consists of the following: 11 Counts 1 and 4 of the Second Superseding Indictment filed in 12 18-114 and 120 months on Count 2 of the Second Superseding 13 Indictment filed in 18-114(B) and Counts 1 and 3 of the 14 Indictment filed in 21-170 to be served concurrently with each 15 other. 16 under 18, United States Code, Section 3147, to be served 17 consecutively. 60 months on Six months of the statutory sentencing enhancement 18 No, let me think. 19 Because that six months has to be served 20 consecutively, then, rather than 120 months on Count 2, it 21 should be 114 months. 22 11:36AM Pursuant to the Sentencing Reform Act of 1984, it's Okay. So the six months under 18, United States 23 Code, Section 3147, is served consecutively to the terms on 24 Counts 1, 2, and 4 of the Second Superseding Indictment filed 25 in the 18-114 case and Counts 1 and 3 of the Indictment in the UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1011 Page 61 of 76 Page ID 61 1 11:36AM 11:37AM 21-170 case. 2 So that's a total term of 120 months. 3 Upon release from imprisonment, the defendant shall 4 be placed on supervised release for a term of five years. 5 consists of five years on each of Counts 1, 2, and 4 of the 6 Second Superseding Indictment in the 18-114 case and Counts 1 7 and 3 of the Indictment filed in the 21-170 case, all such 8 terms to run concurrently under the following terms and 9 conditions: 10 The defendant shall comply with the rules and 11 regulations of the U.S. Probation and Pretrial Services Office 12 and Second Amended General Order 20-04. 13 11:37AM During the period of supervision, he shall pay the 14 special assessment and restitution in accordance with this 15 judgment's orders regarding such payment. 16 17 The defendant shall cooperate in the collection of a DNA sample from the defendant. 18 11:37AM He shall apply all monies received from income tax 19 refunds, lottery winnings, inheritance, judgments, and any 20 other financial gains to the court-ordered financial 21 obligation. 22 11:37AM That The defendant shall participate in mental health 23 treatment, which may include evaluation and counseling, until 24 discharged from the treatment by the treatment provider with 25 the approval of the probation officer. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1012 Page 62 of 76 Page ID 62 11:38AM 1 As directed by probation, he shall pay all or part 2 of the costs of court-ordered treatment during the period of 3 supervision and provide payment and proof of payment as 4 directed by probation. 5 no payment shall be required. 6 11:38AM owner, employee, or otherwise in any business involving the 8 transportation of hazardous materials of any kind without the 9 express approval of the probation officer before engaging in 10 such employment. officer with access to any and all business records, client 13 lists, and other records pertaining to the operation of any 14 business owned, in whole or in part, by the defendant as 15 directed by probation. And the defendant -- any employment that the 17 defendant undertakes while on supervision must be approved in 18 advance by the probation office. 19 The defendant shall submit his person, property, 20 residence, vehicle, papers, or other areas under his control to 21 a search conducted by a U.S. probation officer or law 22 enforcement officer. 23 grounds for revocation of supervised release. 24 11:39AM Further, the defendant shall provide the probation 12 16 11:38AM The defendant shall not engage as whole or partial 7 11 11:38AM If the defendant has no ability to pay, 25 Failure to submit to a search may be The defendant shall warn any other occupants that the premises may be subject to searches pursuant to this UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1013 Page 63 of 76 Page ID 63 11:39AM 1 condition. 2 at a reasonable time and in a reasonable manner upon reasonable 3 suspicion that the defendant has violated a condition of his 4 supervision and that the areas to be searched contain evidence 5 of this violation. 6 11:39AM 11:40AM 11:40AM The Court orders that the drug testing condition 7 mandated by statute is suspended based on this Court's 8 determination that the defendant poses a low risk of future 9 substance abuse. 10 All right. Mr. Johansson, by pleading guilty and 11 under the terms of the plea agreement that you signed in this 12 case, you've given up most of your rights to appeal my decision 13 as to your sentence. 14 appeal processes. 15 I'm still required to inform you about A defendant may appeal by filing a Notice of Appeal. 16 He may ask that he be allowed to file any Notice of Appeal 17 without paying the fee that's usually required. 18 14 days to file your Notice of Appeal or you lose the right to 19 appeal. 20 Do you understand? 21 THE DEFENDANT: 22 THE COURT: 23 11:40AM Any search under this condition will be conducted You have Yes, Your Honor. All right. I believe there's one count to be dismissed. 24 MR. O'BRIEN: 25 THE COURT: There's more than that, Your Honor. All right. What counts does the UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1014 Page 64 of 76 Page ID 64 1 Government move for dismissal? 2 3 11:40AM 11:41AM 5 MR. O'BRIEN: 6 THE COURT: 7 MR. O'BRIEN: 8 Your Honor, there's one clarification. All right. And in the other case? In the PPP case, Counts 2 and 4. All right. Ordered dismissed. Thank you, Your Honor. May I make it for the record? 10 THE COURT: 11 MR. O'BRIEN: Go ahead. On the restitution, if I heard the 12 Court correctly, it was ordered joint and several with Western 13 Distribution for both banks. 14 think the Bank of the West portion, which is 286,500, should 15 not be jointly and severally. 16 Agri-Comm loan. 18 11:41AM 8, and 9. THE COURT: 17 11:41AM In the 2018 case, Counts 3, 5, 6, 7, 4 9 11:40AM MR. O'BRIEN: THE COURT: And I think that's a mistake. That was the portion of the All right. Do you have any objection to that clarification? 19 MR. ROBINSON: 20 THE COURT: All right. 21 All right. We'll take up the -- 22 MR. ROBINSON: 23 THE COURT: 24 MR. ROBINSON: 25 I No, Your Honor. Thank you. May I make one request to the Court? Yes. Could the Court recommend to the Bureau of Prisons that Mr. Johansson be incarcerated in a UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1015 Page 65 of 76 Page ID 65 11:41AM 1 facility in Southern California? 2 THE COURT: 3 MR. ROBINSON: 4 THE COURT: 5 Let's take a 10-minute recess, and then I'll take up 6 12:02PM 12:03PM Thank you. Thank you. 7 (Break taken.) 8 THE COURT: All right. Next I'm taking up -- let's 9 see. 10 National. 11 the -- there's no guideline calculations to be made because 12 this is a corporate defendant. I think, first, I should take up the sentencing for And there's no opposition from either side as to The probation office has recommended a sentence of 14 probation as to all three of the defendants and that no fine be 15 imposed. 16 12:03PM I will make that recommendation. the three corporate defendants. 13 12:03PM Yes. So there really isn't any disagreement between the 17 parties as to the sentence. The Government in its consolidated 18 opposition made certain objections to statements in the PSR, 19 but they're not necessary. 20 Court's decision as to sentencing, so I don't need to rule on 21 the objections. Those statements do not affect the 22 So who is the -- I do need a corporate 23 representative for each of these companies to impose sentence. 24 Is that not correct? 25 MR. O'BRIEN: That's my understanding, Your Honor. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1016 Page 66 of 76 Page ID 66 12:04PM 1 As the Court is aware, Mr. Johansson's been the corporate 2 representative for each of the corporations from day one. 3 THE COURT: 4 Is there any reason why we shouldn't proceed with 5 12:04PM MR. EXUM: 7 MR. ROBINSON: 8 THE COURT: Counsel? No, Your Honor. No, Your Honor. All right. You may stand at the DEFENDANT REPRESENTATIVE: National Distribution, 11 um, has been out of business since the end of 2014. 12 director. 13 time of the plea, I didn't have any standing to sign the plea 14 anyway but I did. Wholesale Distribution -- 16 THE COURT: 19 I was a I resigned a couple, three years after that. 15 18 12:04PM So, Mr. Johansson -- lectern, Mr. Johansson. 10 17 12:04PM sentencing as to National? 6 9 12:04PM All right. All right. At the We're just talking about National at the moment. All right. Is there any legal cause why judgment should not now be imposed? 20 MR. ROBINSON: No, Your Honor. 21 MR. EXUM: No, Your Honor. 22 THE COURT: All right. 23 sentence as follows: Then the Court imposes a 24 Having considered the sentencing factors set forth 25 at 18, United States Code, Section 3553(a), it's ordered that UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1017 Page 67 of 76 Page ID 67 1 the defendant, National Distribution Services, Inc., shall pay 2 to the United States a special assessment of $800 due 3 immediately. 4 12:05PM Pursuant to Guideline Sections 8C2.2(b) and 5 8C3.3(b), all fines are waived, as the Court finds that the 6 defendant is unable to pay and is not likely to become able to 7 pay any fine. 8 9 12:05PM As to restitution as to National, what's the Government's position as to restitution? 10 11 MR. O'BRIEN: on the two individual victims -- well -- 12 13 12:05PM 12:06PM The Government isn't seeking restitution as to the individual victims? MR. O'BRIEN: 15 THE COURT: 17 12:06PM THE COURT: 14 16 I -- Your Honor, as with Mr. Johansson That's correct, Your Honor. All right. So there's no restitution order. Pursuant to the Sentencing Reform Act of 1984, it's 18 the judgment of the Court that the defendant organization, 19 National Distribution Services, Inc., is hereby placed on 20 probation on Counts 1 and 2 of the Second Superseding 21 Indictment for a term of one year, consisting of one year on 22 each of Counts 1 and 2, all such terms to run concurrently 23 under the following terms and conditions: 24 During the period of probation, the organization 25 shall pay the special assessment and restitution -- special UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1018 Page 68 of 76 Page ID 68 1 assessment in accordance with this judgment's orders pertaining 2 to such payment. 3 12:06PM 4 state, or local crime, shall provide the probation officer 5 access to any requested financial information, and within 6 30 days of the date of this judgment shall designate an 7 official of the organization to act as the organization's 8 representative and to be the primary contact with probation. 9 12:06PM 12:07PM 12:07PM 12:07PM The organization shall not commit another federal, The organization shall answer truthfully all 10 inquiries by the probation officer and follow the instructions 11 of probation; shall report to probation as directed; and shall 12 submit a truthful and complete written report within the first 13 five days of each month; shall be required to notify the Court 14 or probation immediately upon learning of any material adverse 15 change in its business or financial condition or prospects, the 16 commencement of any bankruptcy proceeding, major civil 17 litigation, criminal prosecution, or administrative proceeding 18 against the organization, or any investigation or formal 19 inquiry by Government authorities regarding the organization. 20 The organization shall notify probation immediately 21 of any intent to sell the organization, change the name of the 22 organization, merge with another business entity, or otherwise 23 dissolve or modify in any form or manner the organizational 24 structure from its present status. 25 All right. And again, by the nature of the plea UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1019 Page 69 of 76 Page ID 69 12:08PM 12:08PM 12:08PM 1 agreement and the guilty plea, the organization has given up 2 most of its rights to appeal the Court's decision. 3 defendant may appeal by filing a Notice of Appeal by asking if 4 the appeal can be filed without paying the fee that's usually 5 required. 6 the organization would lose the right to appeal. Anything else as to National Distribution? 8 MR. O'BRIEN: No, Your Honor. 9 MR. ROBINSON: Nothing. 10 MR. EXUM: Nothing. 11 THE COURT: All right. 12 And as then as to Wholesale. 13 MR. GRECH: 14 Paul Grech on behalf of Wholesale. 15 MR. LURYA: Alan Lurya on behalf of Wholesale. 16 THE COURT: Thank you. 17 And do you also represent -- I'm sorry. Yes. Thank you. Thank you. Thank you, Your Honor. Thank you. Good morning, Your Honor. Do you also represent Western? 19 MR. GRECH: No, Your Honor. 20 MR. LURYA: No, Your Honor. 21 THE COURT: Who represents Western? 22 MR. ROBINSON: 23 12:09PM And there are 14 days to file a Notice of Appeal or 7 18 12:08PM But a I do, Your Honor. I can stand in right now if you'd like to do them simultaneously. 24 THE COURT: We can do them both together. 25 And again, the Government -- I've read everything UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1020 Page 70 of 76 Page ID 70 12:09PM 1 that the parties have submitted. 2 consolidated opposition. 3 would sentence the corporations to one year on probation with 4 no fine. 5 6 7 12:09PM 12:09PM 12:09PM I've already addressed that. And I Is there any reason -- and again, Mr. Johansson is the corporate representative. Is there any reason why judgment should not be 8 imposed at this time? 9 MR. GRECH: No, Your Honor. 10 MR. LURYA: No, Your Honor. 11 MR. ROBINSON: 12 THE COURT: 13 Wholesale and Western. No, Your Honor. All right. 14 MR. ROBINSON: 15 THE COURT: And that's both as to Correct. All right. So starting with Western, 16 having considered the sentencing factors set forth at 18, 17 United States Code, Section 3553(a), and the guideline fine 18 range, the Court imposes a sentence as follows: 19 It's ordered that the defendant shall pay to the 20 United States a special assessment of $800 due immediately. 21 12:10PM The Government filed a It is ordered that the defendant shall pay 22 restitution in the total amount of $667,917 under 18, U.S.C., 23 Section 3663(a), to be paid to BAC Community Bank. 24 shall be paid in full immediately. 25 Restitution With respect to -- with respect to the restitution UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1021 Page 71 of 76 Page ID 71 12:10PM 12:10PM 1 owed to BAC Community Bank, the defendant shall be held jointly 2 and severally liable with the convicted co-defendant 3 Carl Bradley Johansson for the amount of restitution ordered in 4 this judgment. 5 6 its loss, and the defendant's liability for restitution ceases 7 if and when the victim receives full restitution. 8 Pursuant to United States -- United States 9 Sentencing Guidelines Sections 8C2.2(b) and 8C3.3(b), all fines 10 are waived. 11 a fine. 12 12:11PM Pursuant to the Sentencing Reform Act of 1984, it's the judgment of the Court that the defendant, Western 14 Distribution, LLC, is hereby placed on probation on Counts 1 15 and 3 of the Indictment for a term of three years, consisting 16 of three years on each of Counts 1 and 3 of the Indictment. 17 All such terms to run concurrently under the following terms 18 and conditions: During the period of probation, the organization 20 shall pay the special assessment and restitution in accordance 21 with this judgment's orders pertaining to such payment. 22 23 24 12:11PM The Court finds the organization is unable to pay 13 19 12:11PM The victims' recovery is limited to the amount of 25 The organization shall not commit another federal, state, or local crime. The organization shall provide probation access to any requested financial information. UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1022 Page 72 of 76 Page ID 72 1 12:11PM 2 organization shall designate an official of the organization to 3 act as the organization's representative and to be the primary 4 contact with probation. 5 12:12PM inquiries by probation and follow the instructions of the 7 probation officer. directed and shall submit a full, complete, and truthful report 10 within the first five days of each month and is required to 11 notify the Court or probation immediately upon learning of any 12 material adverse change in its business or financial condition 13 or prospects, the commencement of any bankruptcy proceeding, 14 major civil litigation, criminal prosecution, or administrative 15 proceeding against the organization, or any investigation or 16 formal inquiry by Government authorities regarding the 17 organization. And the defendant organization shall notify 19 probation immediately of any intent to sell the organization, 20 change its name, merge with another business entity, or 21 otherwise dissolve or modify in any form or manner the 22 organizational structure from its present status. 23 12:13PM The organization shall report to probation as 9 18 12:12PM And the organization shall answer truthfully all 6 8 12:12PM Within 30 days from the date of this judgment, the And again, the Court notes that the defendant, by 24 pleading guilty and by signing the plea agreement, has given up 25 most of its rights to appeal. But any appeal must be filed UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1023 Page 73 of 76 Page ID 73 1 within 14 days. 2 Notice of Appeal without paying the fee that's usually 3 required. 4 12:13PM 12:13PM 5 Any legal cause why judgment should not now be imposed? No legal cause. 7 THE COURT: All right. The Court has considered the 8 sentencing factors set forth at 18, United States Code, 9 Section 3553(a). 10 It's ordered the defendant shall pay to the United States a special assessment of $400 due immediately. Pursuant to Guideline Section 8C2.2(b) and 8C3.3(b), 13 all fines are waived. 14 unable to pay a fine. 15 The Court finds that the defendant is Pursuant to the Sentencing Reform Act of 1984, it's 16 the judgment of the Court that the defendant organization, 17 Wholesale Distribution, Inc., is hereby placed on probation on 18 Count 1 of the Second Superseding Indictment for a term of one 19 year under the following terms and conditions: 20 During the period of probation, the defendant shall 21 pay the special assessment in accordance with this judgment's 22 orders regarding such payment. 23 24 12:14PM And then as to Wholesale. MR. GRECH: 12 12:14PM All right. 6 11 12:14PM And the entity may seek that it can file its 25 The organization shall not commit another federal, state, or local crime. The organization shall provide the probation office UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1024 Page 74 of 76 Page ID 74 1 2 12:14PM 12:15PM 12:15PM 12:15PM Within 30 days from the date of this judgment, the 3 organization shall designate an official of the organization to 4 act as the organization's representative and to be the primary 5 contact with probation. 6 12:15PM access to any requested financial information. The organization shall answer truthfully all 7 inquiries by probation and follow the instructions of the 8 probation officer. 9 The organization shall report to probation as 10 directed and shall submit a truthful and complete written 11 report within the first five days of each month. 12 The organization shall be required to notify the 13 Court or probation immediately upon learning of any material 14 adverse change in the business or financial condition or 15 prospects or the commencement of any bankruptcy proceedings, 16 major civil litigation, criminal prosecution, or administrative 17 proceeding against the organization, or any investigation or 18 formal inquiry by Government authorities regarding the 19 organization. 20 The organization shall notify probation immediately 21 of any intent to sell the organization, change its name, merge 22 with another business entity, or otherwise dissolve or modify 23 in any form or manner the organizational structure from its 24 present status. 25 The organization has entered into a guilty plea, UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1025 Page 75 of 76 Page ID 75 12:16PM 12:16PM 1 signed the plea agreement, pled guilty, and, therefore, given 2 up most of its rights to appeal but may appeal by filing a 3 Notice of Appeal within 14 days from today's date and may seek 4 that it be allowed to file any Notice of Appeal without paying 5 the fee that's usually required. 6 Anything else? 7 MR. GRECH: No, Your Honor. 8 MR. LURYA: No, Your Honor. 9 MR. O'BRIEN: 10 Your Honor, as to Western, the Government moves to dismiss Counts 2 and 4. 11 THE COURT: It is so ordered. 12 MR. O'BRIEN: 13 THE COURT: 14 (Proceedings concluded at 12:16 p.m.) Thank you, Your Honor. All right. Thank you very much. 15 16 17 18 19 20 21 22 23 24 25 UNITED STATES DISTRICT COURT Case 5:21-cr-00170-JGB Document 116 Filed 02/03/23 #:1026 Page 76 of 76 Page ID 76 1 CERTIFICATE OF OFFICIAL REPORTER 2 3 COUNTY OF LOS ANGELES 4 STATE OF CALIFORNIA ) ) ) 5 6 I, MYRA L. PONCE, FEDERAL OFFICIAL REALTIME COURT 7 REPORTER, IN AND FOR THE UNITED STATES DISTRICT COURT FOR THE 8 CENTRAL DISTRICT OF CALIFORNIA, DO HEREBY CERTIFY THAT PURSUANT 9 TO SECTION 753, TITLE 28, UNITED STATES CODE THAT THE FOREGOING 10 IS A TRUE AND CORRECT TRANSCRIPT OF THE STENOGRAPHICALLY 11 REPORTED PROCEEDINGS HELD IN THE ABOVE-ENTITLED MATTER AND THAT 12 THE TRANSCRIPT PAGE FORMAT IS IN CONFORMANCE WITH THE 13 REGULATIONS OF THE JUDICIAL CONFERENCE OF THE UNITED STATES. 14 15 16 17 DATED THIS 29TH DAY OF JANUARY, 2023. 18 19 20 /S/ MYRA L. PONCE 21 MYRA L. PONCE, CSR NO. 11544, CRR, RDR FEDERAL OFFICIAL COURT REPORTER 22 23 24 25 UNITED STATES DISTRICT COURT
File and source
- File
- gov.uscourts.cacd.826563.116.0.pdf
- Size
- 650,118 bytes
- SHA-256
- d96325cb507d7097b8919f1f59e151972391ae844655bc331bcb9b35af03ab42
- Original
- PACER (login required)