The Government’s Sentencing Memorandum — United States v. Norton (Dkt. 60, N.D. Ga.)

Summary

The government's sentencing memorandum in United States v. Chandra Norton, Criminal Action No. 1:20-CR-297-SDG, in the U.S. District Court for the Northern District of Georgia, Atlanta Division, filed August 12, 2024 as Document 60. It states that on November 12, 2020 Norton pleaded guilty to a single-count information of conspiracy to commit wire fraud under 18 U.S.C. § 1349 for conspiring with Shelitha Robertson to submit fraudulent PPP loan applications for entities Norton owned, and using the funds for personal benefit. The government recommends a term of imprisonment at the low end of the advisory guidelines range. It runs 17 pages.

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

Record facts

Full text

Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 1 of 17




                  IN THE UNITED STATES DISTRICT COURT
                 FOR THE NORTHERN DISTRICT OF GEORGIA
                           ATLANTA DIVISION


   U NITED S TATES OF A MERICA
                                                Criminal Action No.
            v.
                                                1:20-CR-297-SDG
   C HANDRA N ORTON

                 The Government’s Sentencing Memorandum

      The United States of America, by and through undersigned counsel, files

this Sentencing Memorandum to assist the Court in imposing a fair and reasonable

sentence.

      Defendant Chandra Norton (“Norton”) pleaded guilty to conspiracy to

commit wire fraud for submitting fraudulent loan applications under the

Paycheck Protection Program (“PPP”), and then diverting the use of the

unlawfully obtained funds for her personal use and benefit rather than for

expenses authorized under the PPP. (Doc. 1).

      For the reasons more fully set forth herein, the government respectfully

recommends that the Court sentence Defendant to a term of imprisonment at the

low end of the applicable advisory sentencing range produced by the United States

Sentencing Guidelines (the “Guidelines”) and a three-year term of supervised

release. Such a sentence will provide punishment that is sufficient, but not greater

                                         1

        Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 2 of 17




than necessary to accomplish the purposes of sentencing set forth in 18 U.S.C.

§ 3553(a).

I. Background

      On November 12, 2020, Norton pleaded guilty to a single count Information

of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, for engaging

in a conspiracy to defraud the PPP. (Doc. 1; Doc. 10-1). Norton specifically was

charged for conspiring with Shelitha Robertson (“Robertson”) to submit

fraudulent PPP loan applications on behalf of entities Norton owned. (Doc. 1).

The fraudulent applications Norton submitted falsely represented the average

monthly payroll and number of employees associated with each applicant

business, including false supporting tax documentation, and falsely certified that

the information contained in the application was true and accurate. (Doc. 1 at

¶¶ 13-15; Trial Tr. in United States v. Robertson, No. 22-cr-432 (N.D. Ga) (“Trial Tr.”)

288 21 – 289 11).

      Norton admitted to submitting at least eleven fraudulent loan applications

on behalf of entities she owned, which resulted in $7,785,062 in funding.

(Presentence Investigation Report (“PSR”) ¶¶ 13, 20; Trial Tr. 288 2-8). In addition,

the conspiracy involved submitting fraudulent loan applications on behalf of four




                                           2

        Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 3 of 17




entities owned by Robertson, seeking and obtaining a total of $7,020,779 in PPP

loan funding.

      Norton admitted that she used the funds she obtained on behalf of entities

she owned for expenses not authorized under the PPP, including to purchase a

2020 Land Rover luxury SUV and to deposit funds into a personal brokerage

account. (Trial Tr. 290 2-3).

II. The Applicable Guidelines Range

      A. Pursuant to the Plea Agreement the Parties Agreed to a Loss Amount
      of Less Than $9,500,000

      The government submits that for Guidelines purposes, the loss estimate

reflected in Norton’s plea agreement, which specifies a loss amount between

$3,500,000 and $9,500,000, is appropriate. (See Doc. 10-1 at ¶ 13(b)). At co-

defendant Robertson’s sentencing, the Court ruled that the total loss amount

associated with the conspiracy and attributable to both Norton and Robertson is

$14,805,841. Nonetheless, the plea agreement was executed in November 2020 and

the loss amount set forth therein represents the “benefit of the bargain” Norton

made with the government. See, e.g., United States v. Camacho, 233 F.3d 1308, 1323

(11th Cir. 2000) (noting that defendant “received the full benefit of the bargain she

made with the Government” by entering into a plea agreement.).



                                         3

        Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 4 of 17




       B. The Zero Point Offender Reduction Under § 4C1.1 Applies

       The parties agree that Norton is eligible for a two-point reduction to her

offense level as a zero-point offender, pursuant to USSG § 4C1.1. That provision,

which went into effect after the final PSR was issued, authorizes a decrease of two

levels from the offense level for defendants who “did not receive any criminal

history points” and whose instant offense did not involve specified aggravating

factors. USSG § 4C1.1.

       The PSR calculated a total offense level of 24, based in part on a loss amount

of between $3,500,000 and $9,500,000 as reflected in the parties’ plea agreement.

(See PSR ¶¶ 47-57). A two-level reduction pursuant to § 4C1.1 would result in an

offense level of 22. Should the Court accept this determination with respect to the

calculation of the total offense level, the applicable Guidelines range is 41 to 51

months before any downward departure. See Guidelines Ch. 5, Part A.

III.   Restitution

       The parties agree that the amount of restitution owed is $4,425,002.23. This

figure represents the actual loss attributable to Norton and Robertson’s

conspiracy. As detailed in the attached schedule (Exhibit (“Ex.”) A) describing the

PPP funds obtained by Norton and Robertson, the amount of restitution owed is

based upon the total amount of the loans fraudulently obtained that caused the


                                          4

       Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 5 of 17




financial institution victims—the PPP lenders—to fund, less credits for money

recovered by the victims, plus applicable interest and processing fees. See Ex. A.

IV.   Consideration of Sentencing Factors Under 18 U.S.C. § 3553(a)

      The § 3553(a) factors relevant to Norton support the government’s

recommendation for the Court to impose a sentence at the low end of the

applicable Guidelines range and a term of supervised release of three years.1

      A. The Serious Nature and Circumstances of the Offense

      In early 2020, the COVID-19 pandemic necessitated nationwide lockdowns

that ground the economy to a halt, sending stock markets crashing and

unemployment rates skyrocketing.       Many American businesses—particularly

small businesses—struggled to stay afloat as consumer demand plummeted and

in-person services abruptly ceased. Employees relying on these paychecks to

support their families faced unprecedented uncertainty. The Coronavirus Aid,

Relief, and Economic Security (CARES) Act was a federal law enacted in or around

March 2020 and designed to provide emergency financial assistance to Americans

who were suffering the economic effects caused by the COVID-19 pandemic. One

source of relief provided by the CARES Act was up to $349 billion in forgivable



   1 Pursuant to the plea agreement, the government makes no recommendation

as to the amount of the fine to be imposed. (Doc. 10-1 at ¶ 21).

                                         5

         Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 6 of 17




loans through the PPP. In or around April 2020, an additional $300 billion was

authorized. To obtain a PPP loan, an applicant had to certify that the loan would

be used to pay for payroll, lease or mortgage interest, or utilities, and the loan was

forgivable if the business spent a certain percentage of the loan on payroll costs,

given that all of the information in the application and supporting documents was

true.

        Because Congress’ intent was to “provide relief to America’s small

businesses    expeditiously,”    the   PPP    streamlined    the    Small   Business

Administration’s typical lending requirements. Businesses Loan Program Temporary

Changes; Paycheck Protection Program, 85 Fed. Reg. 20811-01 (Apr. 15, 2020). For

example, the PPP “allow[ed] lenders to rely on certifications of the borrower in

order to determine eligibility of the borrower and use of loan proceeds and to rely

on specified documents provided by the borrower to determine qualifying loan

amount and eligibility for loan forgiveness.” Id. These procedures were designed

to rapidly provide desperately needed funds to small businesses so they could

keep their workers employed during an economic and public health emergency

that threatened the viability of these businesses, and their ability to pay employees.

Thus, the program dispensed with some of the usual underwriting checks on the

applicant and depended on the applicants’ honesty.

                                          6

       Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 7 of 17




      Fraudulent PPP applications, in addition to being unlawful, caused two

distinct harms as the lenders were attempting to quickly review and distribute

funds: (1) each fraudulent application that was funded took funds away from the

limited pool of money available for legitimate applicants, and (2) each fraudulent

application drew away time and resources from the lenders and intermediaries

who were working to distribute funds to proper borrowers as quickly as possible

in light of the fast-moving economic crisis.

      Norton selfishly and intentionally exploited this national emergency and

the government’s response to it by engaging in a conspiracy with Robertson to

submit false PPP applications seeking over $14 million in PPP funds. Funds for

the PPP were limited, and the legitimate demand for relief money exceeded the

available supply. Thus, funds disbursed to Norton and her co-conspirator were

diverted away from qualified applicants and kept lenders from working to

distribute funds to proper borrowers.

      The scope of Norton’s criminal acts was significant in its breadth. These acts

were not isolated instances or one-off errors in judgment. Rather, Norton took part

in a conspiracy that lasted several months and resulted in the submission of

numerous fraudulent loan applications on behalf of companies she and Robertson

each owned. Norton took deliberate and calculated steps to fraudulently receive

                                         7

        Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 8 of 17




and conceal the PPP funds and received a significant amount of money. After

obtaining the loan proceeds, the funds were not used for purposes authorized

under the PPP, but instead were used to purchase a 2020 Land Rover luxury SUV

and to deposit funds into a personal brokerage account. (Trial Tr. 290 2-3).

      B. History and Characteristics of the Defendant

      Norton is 56 years old and resides in Johns Creek, Georgia. She earned a

juris doctorate and was a practicing attorney and member in good standing of the

State Bar of Georgia beginning in 1993. (PSR ¶¶ 78-79; Trial Tr. 291 10-20). She

also started CamKen Consulting, a water and sewer construction and

rehabilitation company, which served municipalities throughout the southeastern

United States for over 20 years. (See Trial Tr. 290 16 – 291 9). As a result of her

offense conduct in this case, Norton was disbarred by the State of Georgia. (Trial

Tr. 291 20-25).

      Norton’s education and professional experience—as an attorney and as a

successful business owner—are factors weighing in favor of a sentence within the

applicable Guidelines range. Norton’s history and characteristics reflect how an

educated professional and officer of this Court took advantage of a program that

was designed to help struggling businesses during the pandemic. Norton knew

better than to apply for fraudulent loans and had no reason to do so—other than


                                        8

       Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 9 of 17




greed. Indeed, “[c]riminals who have the education and training that enables

people to make a decent living without resorting to crime are more rather than less

culpable than their desperately poor and deprived brethren in crime.” United

States v. Howard, 28 F.4th 180, 210 (11th Cir. 2022) (internal quotations omitted)

(emphasis added).

      Norton contacted the government in early June 2020, after learning that her

fraud had been detected and that the government was investigating the PPP loans

she had obtained. She then accepted responsibility for her conduct, waived

indictment, and pleaded guilty. (See Doc. 2, Doc. 10).

      The government understands that Norton has serious medical conditions.2

Nonetheless, Norton’s medical conditions do not warrant a downward departure

or non-custodial sentence pursuant to USSG § 5H1.4. See, e.g., United States v.

Smith, 128 F. App’x 89, 90 (11th Cir. 2005) (unpublished) (weakened immune

system causing vulnerability to future illnesses based on cancer in remission

insufficient to satisfy Section 5H1.4); Swiss v. United States, No. CRIM. 1:08CV076,

2008 U.S. Dist. LEXIS 121250, at *9 (W.D.N.C. Mar. 20, 2008) (“For these reasons

the Court cannot find or conclude that Petitioner would be eligible for a



   2 Because this Sentencing Memorandum is being publicly filed, the government

is not providing additional details regarding Norton’s medical condition.

                                         9

       Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 10 of 17




downward departure under § 5H1.4 in light of the Petitioner’s cancer diagnosis

and the treatment available to him through the Bureau of Prisons.”).

      As to the Bureau of Prisons (BOP) facility where Norton serves her sentence,

the BOP generally is equipped to house inmates with significant medical

conditions—including conditions comparable to Norton’s—and deals with such

inmates routinely. The government has engaged with BOP regarding Norton’s

specific conditions, and BOP is indeed equipped to provide adequate care to

Norton in a Federal Medical Center, even if it cannot guarantee continuation of the

clinical trial protocols in which she participates.3       The government will

supplement this memorandum with a declaration from BOP stating its ability to

accommodate Norton’s medical conditions. Because BOP is equipped to care for

Norton’s medical conditions, a custodial sentence in a BOP facility, rather than

home detention, is warranted.

      C. Need to Afford Adequate Deterrence to Criminal Conduct

      A sentence within the advisory Guidelines range is necessary to afford

adequate deterrence and to reflect the seriousness of the offense, promote respect




   3 The government is prepared to recommend to the Court that Norton be

permitted to report to the designated BOP facility after the conclusion of her
treatment in the clinical trial.

                                        10

       Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 11 of 17




for the law, and provide just punishment for the offense. 18 U.S.C. § 3553(a)(2).

The Eleventh Circuit has identified general deterrence as “an important goal of

sentencing in a white-collar crime prosecution.” United States v. Kuhlman, 711

F.3d 1321, 1328 (11th Cir. 2013); see also United States v. Livesay, 587 F.3d 1274, 1279

(11th Cir. 2009) (“[T]he threat of spending time on probation simply does not,

and cannot, provide the same level of deterrence as can the threat of incarceration

in a federal penitentiary for a meaningful period of time.”); United States v.

McQueen, 727 F.3d 1144, 1158 (11th Cir. 2013) (recognizing that general

deterrence is one of the “key purposes of sentencing.”) (citation omitted).

      As the Eleventh Circuit has recognized, deterrence is especially important

in the context of crimes, like Norton’s in this case, that “may easily go undetected

and unpublished.” See McQueen, 727 F.3d at 1158-59 (reversing the district

court’s lenient sentence because it “sap[ped] the goal of general deterrence”); see

also Howard, 28 F.4th at 209 (“General deterrence is more apt, not less apt, in white

collar crime cases.”). One analysis found that approximately 12.3 percent of the

PPP loans granted to small businesses, totaling $64.2 billion, have at least one

indicator of potential fraud. See John M. Griffin et al., Did Fintech Lenders Facilitate

PPP       Fraud?       (Mar.       15,      2022),       available       online      at

https://ssrn.com/abstract=3906395 (last visited August 8, 2024). Because of the

                                           11

       Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 12 of 17




sheer number of PPP loans as well as the streamlined documentation necessary

to obtain them, the government is unlikely to detect and/or to prosecute most

individuals who obtained fraudulent PPP loans. These circumstances alone

make general deterrence significant in this case.

      Also, “[b]ecause economic and fraud-based crimes are more rational, cool,

and calculated than sudden crimes of passion or opportunity, these crimes are

prime candidate[s] for general deterrence.” United States v. Martin, 455 F.3d 1227,

1240 (11th Cir. 2006) (finding the district court’s sentence utterly failed to afford

adequate deterrence) (internal quotations omitted). “White collar criminals often

calculate the financial gain and risk of loss of their crimes, and an overly lenient

sentence sends the message that would-be white-collar criminals stand to lose

little more than a portion of their ill-gotten gains and practically none of their

liberty.” Howard, 28 F.4th at 209 (quoting Martin, 455 F.3d at 1240) (internal

quotations omitted); see also Kuhlman, 711 F.3d at 1329 (vacating a sentence of

time served for defendant who stole millions of dollars from insurance

companies.).

      COVID-19 relief funds were meant to protect businesses from shutting

down due to the economic harm the pandemic caused, not line the pockets of

individuals who embellished financials, or created their own business, for the

                                          12

       Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 13 of 17




purposes of greed and personal gain. Those who sought to defraud COVID-19

disaster relief programs took limited funds out of the hands of legitimate

applications and made it more difficult to disperse aid to those who needed it. A

significant downward variance from the Guidelines would be substantively

unreasonable for the type of economic crime committed by Norton. See, e.g.,

Kuhlman, 711 F.3d at 1329.

      Sentencing Norton to a custodial sentence at the low end of the advisory

Guidelines range will help to deter others from fraudulently applying for

government-backed loans during a national emergency and then laundering the

proceeds of those funds. It will provide an important message that there are

serious consequences for exploiting a national emergency and stealing disaster-

relief money earmarked for small businesses. A custodial sentence will also

specifically deter Norton from committing another crime.

      D. Need for the Sentence to Avoid Unwarranted Sentencing Disparities

      A sentence at the low end of the applicable Guidelines will not create an

unwarranted sentencing disparity. “One of the central reasons for creating the

sentencing guidelines was to ensure stiffer penalties for white-collar crimes and to

eliminate disparities between white-collar sentences and sentences for other

crimes.” United States v. Davis, 537 F.3d 611, 617 (6th Cir. 2008); see also United States


                                           13

          Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 14 of 17




v. Snipes, 611 F.3d 855, 870 (11th Cir. 2010) (explaining that Guidelines were created

after “empirical analysis of sentences for white-collar crimes” determined that

white-collar crimes “were given considerably lower sentences.”).

      Courts in this Circuit and elsewhere have imposed significant sentences of

imprisonment for pandemic-related fraud. See, e.g., United States v. VanderMolen,

No. 23-1552, 2024 WL 1434206 (6th Cir. Apr. 3, 2024) (affirming a 30-month

sentence for defendant responsible for a loss of approximately $170,000 in

fraudulent PPP loans); United States v. Griffin, No. 22-4673 (4th Cir. Apr. 8, 2024)

(affirming a 66-month term of imprisonment for defendant responsible for loss

over $2,000,000 in fraudulent PPP and EIDL loans); United States v. Crosby, No. 21-

cr-00011-LMM (N.D. Ga June 7, 2024) (37-month sentence for defendant involved

in $900,000 conspiracy to submit fraudulent PPP applications); United States v.

Almaguer, No. 22-CR-80118 (S.D. Fla. May 19, 2023) (87-month sentence for

defendant responsible for $8.4 million in fraudulent PPP loans); United States v.

Tubbs, 20-cr-00193 (E.D. Ark. March 15, 2021) (41-month term of imprisonment for

defendant responsible for loss of $1.9 million resulting from two fraudulent PPP

loans).

      Though “for purposes of § 3553(a)(6), a defendant who cooperates with the

Government and pleads guilty is not ‘similarly situated’ to [her] co-defendant who

                                         14

       Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 15 of 17




proceeds to trial,” United States v. Cavallo, 790 F.3d 1202, 1237 (11th Cir. 2015), it is

important to note that a custodial sentence at the low end of the Guidelines range

for Norton would avoid unwarranted sentencing disparities with Norton’s co-

conspirator, who received a custodial sentence of 87 months. See Robertson, No.

22-cr-432 (Doc. 127).

      Accordingly, the imposition of a significant term of imprisonment within

the advisory Guidelines range would be appropriate and not create any

unwarranted sentencing disparity.

                                      Conclusion

      For the reasons stated above, the government respectfully requests that the

Court impose a custodial sentence at the low end of the applicable Guidelines

range and a term of supervised release of three years.

                                         Respectfully submitted,

                                         RYAN K. BUCHANAN
                                         United States Attorney

                                         /s/BERNITA MALLOY
                                         Assistant United States Attorney
                                         Georgia Bar No. 718905
                                         75 Ted Turner Drive SW
                                         Atlanta, GA 30303
                                         Bernita.Malloy@usdoj.gov

                                         GLENN S. LEON
                                         Chief, Fraud Section
                                           15

Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 16 of 17




                            U.S. Department of Justice

                            /s/ARIEL GLASNER
                            Trial Attorney, Fraud Section
                            U.S. Department of Justice
                            D.C. Bar No. 991442
                            1400 New York Ave, NW
                            Washington, DC 20005
                            Ariel.Glasner@usdoj.gov




                              16

      Case 1:20-cr-00297-SDG Document 60 Filed 08/12/24 Page 17 of 17




                               Certificate of Service

The United States Attorney’s Office served this document today by filing it using

the Court’s CM / ECF system.


August 12, 2024


                                          /s/ A RIEL G LASNER
                                          Trial Attorney, U.S. Department of
                                          Justice

File and source

File

60.pdf

Size

126,171 bytes

SHA-256

879c76fc7570837421ee722a137c3695897198ec79a5c31256fd24cd4748dcde

Our copy

60.pdf