Plea Agreement — United States v. Arlen Encarnacion

Record facts

U.S. District Court, District of New Jersey · No. 3:23-cr-00794-GC · Doc. 29 · 2023-10-11 · Docket on CourtListener

Full text

Case 3:23-cr-00794-GC Document 29 Filed 10/11/23. Page 1 of 13 PagelD: 101

RECEIVED

U.S. Department of Justice OCT | | 2023

United States Attorney AT 8:30. M
District of New Jersey CLERK, U.S. DISTRICT COURT - DNJ

970 Broud Street, 7 floor 973-645-2700
Newark, New dersey 07102
MCO/PL AGR

April 7, 2028

Lorraine Gauli-Rufo

LGR Law, LLC

06 Pompton Avenue, Ste 25
Cedar Grove, NJ 07009

Re: Plea Agreement with Arlen Encarnacion

IB CRAIC @c)

Dear Counsel:

This letter sets forth the plea agreement between your client, Arlen
Encarnacion (““ENCARNACION”), and the United States Attorney for the District of
New Jersey (“this Office”). This offer will expire on April 14, 2028, if it is not
accepted in writing by that date. If ENCARNACION does not accept this plea
agreement, his sentencing exposure could increase beyond what is discussed in this
plea agreement as a result of this Office’s investigation.

Charge

Conditioned on the understandings specified below, this Office will accept a
guilty plea from ENCARNACION to a Two-Count Information, which charges
ENCARNACION with conspiracy to commit wire fraud, contrary to 18 U.S.C. §
1348, in violation of 18 U.S.C. § 1849 (Count 1); and money laundering, in violation
of 18 U.S.C. §§ 1957 and 2 (Count 2). If ENCARNCACION enters a guilty plea and
is sentenced on these charges and otherwise fully complies with this agreement,
this Office will not initiate any further criminal charges against ENCARNACION
for his scheme to fraudulently obtain approximately $2,176,017.83 million in
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) funds from in or
around May 2020 through in or around April 2021.

But if a guilty plea in this matter is not entered for any reason or a guilty
plea or judgment of conviction entered in accordance with this agreement does not

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remain in full force and effect, this Office may reinstate any dismissed charges and
initiate any other charges against ENCARNACION even if the applicable statute of
limitations period for those charges expires after ENCARNACION signs this
agreement, and ENCARNACION agrees not to assert that any such charges are
time-barred.

Sentencing

The violation of 18 U.S.C. § 1849 charged in Count 1 of the Information
carries a statutory maximum prison sentence of 20 years and a statutory
maximum fine which is the greatest of: (1) $250,000; (2) twice the gross amount of
any pecuniary gain that any persons derived from the offense; or (3) twice the
gross amount of any pecuniary loss sustained by any victims of the offense.

The violation of 18 U.S.C. § 1957 charged in Count 2 in the Information
carries a statutory maximum prison sentence of 10 years and a statutory
maximum fine which is the greatest of: (1) $250,000; (2) twice the gross amount
of any pecuniary gain that any persons derived from the offense; or (3) twice the
gross amount of any pecuniary loss sustained by any victims of the offense.

The sentence on each count may run consecutively. Fines imposed by the
sentencing judge may be subject to the payment of interest.

The sentence to be imposed upon ENCARNACION is within the sole
discretion of the sentencing judge, subject to the provisions of the Sentencing
Reform Act, 18 U.S.C. §§ 3551-3742, and the sentencing judge’s consideration of the
United States Sentencing Guidelines. Those Guidelines are advisory, not
mandatory. The sentencing judge may impose any reasonable sentence up to and
including the statutory maximum term of imprisonment and the maximum
statutory fine. This Office cannot and does not make any representation or promise
as to what Guidelines range may be found by the sentencing judge, or as to what
sentence ENCARNACION ultimately will receive.

Further, in addition to imposing any other penalty on ENCARNACION the
sentencing judge as part of the sentence:

(1) ~_-will order ENCARNACION to pay an assessment of $100 per count
pursuant to 18 U.S.C. § 3013, which assessment must be paid by the
date of sentencing;
Case 3:23-cr-00794-GC Document 29 Filed 10/11/23 Page 3 of 13 PagelD: 103

(2) may order ENCARNACION to pay restitution pursuant to 18 U.S.C. §§
3563(b)(2), 3583(d), or 3663;

(3) may order ENCARNACION, pursuant to 18 U.S.C. § 3555, to give
reasonable notice and explanation of the conviction to any victims of
his offenses;

(4) must order forfeiture, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28
U.S.C. § 2461(c); and

(5) pursuant to 18 U.S.C. § 3583, may require ENCARNACION to serve a
term of supervised release of not more than three years on each of
Counts 1 and 2, which will begin at the expiration of any term of
imprisonment imposed. Should ENCARNACION be placed on a term
of supervised release and subsequently violate any of the conditions of
supervised release before the expiration of its term, ENCARNACION
may be sentenced to not more two years’ imprisonment for each of
Counts 1 and 2, in addition to any prison term previously imposed,
regardless of the statutory maximum term of imprisonment set forth
above and without credit for time previously served on post-release
supervision, and may be sentenced to an additional term of supervised
release.

Restitution

In addition, ENCARNACION agrees to make full restitution for all losses
resulting from the offense of conviction or from the scheme, conspiracy, or pattern
of criminal activity underlying the offenses. The parties agree that this amount
shall be $2,176,017.83.

Forfeiture

As part of his acceptance of responsibility, (1) pursuant to 18 U.S.C. §
981(a)(1)(C) and 28 U.S.C, § 2461(c), ENCARNACION agrees to forfeit to the
United States all of his right, title, and interest in any property, real or personal,
which constitutes or is derived from proceeds traceable to the wire fraud charged in
Count One of the Information, and (2) pursuant to 18 U.S.C. § 982(a)(1),
ENCARNACION agrees to forfeit to the United States, all of his right, title and
interest in any and all property, real or personal, which constitutes or is derived
from proceeds that the defendant obtained that are traceable to the money
laundering offense charged in Count Two of the Information. ENCARNACION
further agrees that the aggregate value of such property was $1,683,883.83; that

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one or more of the conditions set forth in 21 U.S.C. § 858(p) exists; and that the
United States is therefore entitled to forfeit substitute assets equal to the value of
the proceeds obtained by ENCARNACION (the “Forfeiture Amount”), in an amount
not to exceed $1,683,883.83 (the “Money Judgment”). ENCARNACION consents to
the entry of an order requiring ENCARNACION to pay the Forfeiture Amount, in
the manner described below (the “Order”), and that the Order will be final as to
ENCARNACION prior to sentencing, pursuant to Rule 32.2(b)(4) of the Federal
Rules of Criminal Procedure, and which may be satisfied in whole or in part with
substitute assets. ENCARNACION further agrees that upon entry of the Order, the
United States Attorney’s Office is authorized to conduct any discovery needed to
identify, locate, or dispose of property sufficient to pay the Forfeiture Amount in full
or in connection with any petitions filed with regard to proceeds or substitute
assets, including depositions, interrogatories, and requests for production of
documents, and the issuance of subpoenas.

All payments made in full or partial satisfaction of the Forfeiture Amount
shall be made by postal money order, bank, or certified check, made payable in this
instance to the United States Marshals Service, indicating ENCARNACION’s name
and case number on the face of the check; and shall be delivered by mail to the
United States Attorney’s Office, District of New Jersey, Attn: Asset Forfeiture and
Money Laundering Unit, 970 Broad Street, 7th Floor, Newark, New Jersey 07102.

ENCARNACION further agrees to forfeit all of his right, title, and interest in
the property listed on the attached Schedule B, and which ENCARNACION admits
have the requisite nexus to the offenses charged in Count One of the Information
and is therefore forfeitable to the United States of America pursuant to 18 U.S.C. §
981(a)(1)(C) and 28 U.S.C. § 2461(c), and 18 U.S.C. § 982(a)(1) (the “Specific
Property”). ENCARNACION agrees that the Specific Property is subject to
forfeiture as property, real or personal, that constitutes or is derived, directly and
indirectly, from proceeds traceable to the commission of the offenses in violation of
18 U.S.C. §§ 1843 and 1849, and property involved in, or traceable to, the money
laundering offense charged in Count Two of the Information, Any forfeited money
and the net proceeds from the sale of the Specific Property will be applied to the
Money Judgment, in partial satisfaction thereof.

ENCARNACION further consents to the administrative and/or civil judicial
forfeiture of the Specific Property pursuant to 18 U.S.C. § 981(a)(1)(C).
ENCARNACION hereby consents to the entry of Preliminary Orders of Forfeiture
and Interlocutory Orders of Sale as to the Specific Property pursuant to Rule 32.2(b)
of the Federal Rules of Criminal Procedure as the United States Attorney’s Office
may request. ENCARNACION agrees to execute a Preliminary Order of Forfeiture
and an Interlocutory Order of Sale as to the Specific Property by the time of the
plea hearing in this case. ENCARNACION agrees that he will not file a claim or a

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Case 3:23-cr-00794-GC Document 29 Filed 10/11/23. Page 5 of 13 PagelD: 105

petition for remission or mitigation in any forfeiture proceeding involving the
Specific Property and will not cause or assist anyone else in doing so. To the extent
ENCARNACION has filed a claim or petition in any administrative or civil judicial
forfeiture proceeding involving the Specific Property, such claims or petitions are
hereby deemed withdrawn. ENCARNACION further agrees to take all necessary
steps to pass clear title to the Specific Property to the United States, including, but
not limited to, the surrender of such property to the United States Marshals Service
and the execution of all necessary documentation.

ENCARNACION waives the requirements of Rules 82.2 and 48(a) of the
Federal Rules of Criminal Procedure regarding notice of the forfeiture in the
charging instrument, announcement of the forfeiture at sentencing, and
incorporation of the forfeiture in the judgment. ENCARNACION understands that
criminal forfeiture is part of the sentence that may be imposed in this case and
waives any failure by the court to advise him of this pursuant to Rule 11(b)(1)(J) of
the Federal Rules of Criminal Procedure at the guilty plea proceeding.
ENCARNACION waives any and all constitutional, statutory, and other challenges
to the forfeiture on any and all grounds, including that the forfeiture constitutes an
excessive fine or punishment under the Eighth Amendment. It is further
understood that any forfeiture of ENCARNACION’s assets shall not be treated as
satisfaction of any fine, restitution, cost of imprisonment, or any other penalty the
Court may impose upon him in addition to forfeiture.

ENCARNACION further agrees that not later than the date he enters his
plea of guilty he will provide a complete and accurate Financial Disclosure
Statement on the form provided by the Government. If ENCARNACION fails to
provide a complete and accurate Financial Disclosure Statement by the date he
enters her plea of guilty, or if the Government determines that ENCARNACION
has intentionally failed to disclose assets on his Financial Disclosure Statement,
ENCARNACION agrees that that failure constitutes a material breach of this
agreement, and the Government reserves the right, regardless of any agreement or
stipulation that might otherwise apply, to oppose any downward adjustment for
acceptance of responsibility pursuant to U.S.S.G. § 3E1.1, and to seek leave of the
Court to withdraw from this agreement or seek other relief.

Rights of This Office Regarding Sentencing

Except as otherwise provided in this agreement, this Office may take any
position with respect to the appropriate sentence to be imposed on ENCARNACION
by the sentencing judge. This Office may also correct any misstatements relating to
the sentencing proceedings and provide the sentencing judge and the United States
Probation Office all law and information relevant to sentencing, favorable or
otherwise. And this Office may inform the sentencing judge and the United States

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Case 3:23-cr-00794-GC Document 29 Filed 10/11/23 Page 6 of 13 PagelD: 106

Probation Office of: (1) this agreement; and (2) the full nature and extent of
ENCARNACION’s activities and relevant conduct with respect to this case.

Stipulations

This Office and ENCARNACION will stipulate at sentencing to the
statements set forth in the attached Schedule A, which is part of this plea
agreement. Both parties understand that the sentencing judge and the United
States Probation Office are not bound by those stipulations and may make
independent factual findings and may reject any or all of the parties’ stipulations.
Nor do these stipulations restrict the parties’ rights to respond to questions from
the Court and to correct misinformation that has been provided to the Court.

This agreement to stipulate on the part of this Office is based on the
information and evidence that this Office possesses as of the date of this agreement.
Thus, if this Office obtains or receives additional evidence or information prior to
sentencing that it believes materially conflicts with a Schedule A stipulation, that
stipulation shall no longer bind this Office. A determination that a Schedule A
stipulation is not binding shall not release the parties from any other portion of this
agreement, including any other Schedule A stipulation.

If the sentencing court rejects a Schedule A stipulation, both parties reserve
the right to argue on appeal or at post-sentencing proceedings that the sentencing
court did so properly. Finally, to the extent that the parties do not stipulate to a
particular fact or legal conclusion in this agreement, each reserves the right to
argue how that fact or conclusion should affect the sentence.

Waiver of Appeal and Post-Sentencing Rights

As set forth in Schedule A and the paragraph below, this Office and
ENCARNACION waive certain rights to appeal, collaterally attack, or otherwise
challenge the judgment of conviction or sentence.

Immigration Consequences

ENCARNACION understands that, if ENCARNACION is not a citizen of the
United States, ENCARNACION’s guilty plea to the charged offenses will likely
result in ENCARNACION being subject to immigration proceedings and removed
from the United States by making ENCARNACION deportable, excludable, or
inadmissible, or ending ENCARNACION’s naturalization. ENCARNACION
understands that the immigration consequences of this plea will be imposed in a
separate proceeding before the immigration authorities. ENCARNACION wants
and agrees to plead guilty to the charged offenses regardless of any immigration

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consequences of this plea, even if this plea will cause ENCARNACION’s removal
from the United States. ENCARNACION understands that ENCARNACION is
bound by this guilty plea regardless of any immigration consequences. Accordingly,
ENCARNACION waives any right to challenge the guilty plea, sentence, or both
based on any immigration consequences. ENCARNACION also agrees not to seek
to withdraw this guilty plea, or to file a direct appeal, or any kind of collateral
attack challenging the guilty plea, conviction, or sentence, based on any
immigration consequences of the guilty plea or sentence.

Other Provisions

This agreement is limited to the United States Attorney’s Office for the
District of New Jersey and cannot bind other federal, state, or local authorities. If
requested to do so, however, this Office will bring this agreement to the attention of
other prosecuting offices.

This agreement was reached without regard to any civil or administrative
matters that may be pending or commenced in the future against ENCARNACION
So this agreement does not prohibit the United States, any agency thereof
(including the Internal Revenue Service and Immigration and Customs
Enforcement) or any third party from initiating or prosecuting any civil or
administrative proceeding against him.

No provision of this agreement shall preclude ENCARNACION from
pursuing in an appropriate forum, when permitted by law, a claim that he received
constitutionally ineffective assistance of counsel.

Case 3:23-cr-00794-GC Document 29 Filed 10/11/23 Page 8 of 13 PagelD: 108

No Other Promises

This agreement. constitutes the entire plea agreement between
ENCARNACION and this Office and supersedes any previous agreements between
them. No additional promises, agreements, or conditions have been made or will be
made unless set forth in writing and signed by the parties.

Very truly yours,

PHILIP R. SELLINGER
United States Attorney

By: s/ Mark C. Orlowski
MARK C. ORLOWSKI
Assistant United States Attorney

APPROVED:

s/ Joshua L. Haber

JOSHUA L. HABER
Chief, Economic Crimes Unit
Case 3:23-cr-00794-GC Document 29 Filed 10/11/23 Page 9 of 13 PagelD: 109

Ihave received this letter from my attorney, Lorraine Gauli-Rufo Esq.
T have read it. My attorney and I have reviewed and discussed it and all of its
provisions, including those addressing the charges, sentencing, stipulations
(including the attached Schedule A), waiver, forfeiture, restitution, and immigration
consequences. I understand this letter fully and am satisfied with my counsel’s
explanations. I accept its terms and conditions and acknowledge that it constitutes
the plea agreement between the parties. I understand that no additional promises,
agreements, or conditions have been made or will be made unless set forth in
writing and signed by the parties. I want to plead guilty pursuant to this plea
agreement. ;

AGREED AND ACCEPTED:

aN

ra ‘
ify ’ LE
(GA

Date: 4/09/2028

ARLEN ENCARNACION

I have reviewed and discussed with my client this plea agreement and all of
its provisions, including those addressing the charges, sentencing, stipulations
(including the attached Schedule A), waiver, forfeiture, restitution, and immigration
consequences. My client understands this plea agreement fully and wants to plead
guilty pursuant to it.

Kaa

/ / .

LORRAINKGAULLRUFO, ESQ.

\ Counsel for Defendant

Case 3:23-cr-00794-GC Document 29 Filed 10/11/23 Page 10 of 13 PagelD: 110

Plea Agreement With Arlen Encarnacion

Schedule A

1. This Office and ENCARNACION recognize that the United States
Sentencing Guidelines do not bind the sentencing judge. Each party nevertheless
agrees to these stipulations.

2. The version of the Guidelines effective November 1, 2021, applies in this
case.

Count 1— Conspiracy to Commit Wire Fraud

3. The applicable guideline for this offense is U.S.S.G. § 2B1.1. Because the
offense of conviction has a statutory maximum term of imprisonment of 20 years or
more, this guideline carries a Base Offense Level of 7. See U.S.S.G. § 2B1.1(a)(1).

4. Because the offense involved a loss amount that exceeded $1,500,000, but
not more than $3,500,000, the Specific Offense Characteristic results in an increase
of 16 levels. See U.S.S.G. § 2B1.1(b)(1)).

5, A 2-level enhancement applies because ENCARNACION derived more
than $1,000,000 in gross receipts from one or more financial institutions. See
U.S.S.G. § 2B1.10)(17)(A).

6. Accordingly, the total Offense Level for Count 1 is 25.

Count 2 — Money Laundering

1. The applicable guideline for money laundering is U.S.S.G. § 281.1,
which requires the application of U.S.S.G. § 2B1.1, the applicable guideline for the
underlying offense from which the laundered funds were derived (wire fraud

conspiracy, charged in Count 1). See U.S.S.G. § 281.1(a)(1). The offense level for
the underlying offense is 25.

2. Because the offense charged a violation of 18 U.S.C. § 1957, a I-level
enhancement applies . See U.S.8.G. § 281.1.

3. Accordingly, the total Offense Level for Count 2 is 26.

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Case 3:23-cr-00794-GC Document 29 Filed 10/11/23 Page 11 of 13 PagelD: 111

Grouping of Multiple Counts

4, The United States and ENCARNACION agree that Counts 1 and 2 of the
Information are grouped together into a single group because both counts are
determined largely on the basis of the total loss. See U.S.S.G. § 3D1.2.

5, Pursuant to U.S.S.G. § 3D1.4, the Total Guidelines Offense Level is 26.

6. As of the date of this letter, ENCARNACION has clearly demonstrated a
recognition and affirmative acceptance of personal responsibility for the offenses
charged. Therefore, a downward adjustment of 2 levels for acceptance of
responsibility is appropriate if ENCARNACION’s acceptance of responsibility
continues through the date of sentencing. See U.S.8.G. § 3E1.1(a).

7. As of the date of this letter, ENCARNACION has assisted authorities in
the investigation or prosecution of his own misconduct by timely notifying
authorities of his intention to enter a plea of guilty, thereby permitting this Office to
avoid preparing for trial and permitting this Office and the court to allocate their
resources efficiently. At sentencing, this Office will move for a further 1-point
reduction in ENCARNACION’s offense level pursuant to U.S.8.G. § 3E1.1(b) if the
following conditions are met: (a) ENCARNACION enters a plea pursuant to this
agreement, (b) this Office, in its discretion, determines that ENCARNACION’s
acceptance of responsibility has continued through the date of sentencing and
ENCARNACION therefore qualifies for a 2-point reduction for acceptance of
responsibility pursuant to U.S.S.G. § 3E1.1(a), and (c) ENCARNACION’s offense
level under the Guidelines prior to the operation of § 8E1.1(a) is 16 or greater.

8. Accordingly, the United States and ENCARNACION agree that the total
Guidelines Offense Level applicable to ENCARNACION is 23.

9. The parties agree not to advocate for any upward or downward adjustment
or departure from the Guidelines range resulting from (a) the Total Offense Level
and (b) the criminal history category that the sentencing judge applies under
Chapter 4 of the Guidelines without any departure or variance. But each party may
seek a variance from that Guidelines range, which the other party may oppose.

10. If the term of imprisonment does not exceed 57 months, and except as
specified in the next paragraph below, ENCARNACION will not challenge or seek
to reduce by any means any component of the sentence imposed by the sentencing
judge for any reason other than ineffective assistance of counsel. The term “any
means” includes a direct appeal under 18 U.S.C. § 3742 or 28 U.S.C. § 1291, a
motion to vacate the sentence under 28 U.S.C. § 2255, a motion to reduce the term
of imprisonment under 18 U.S.C. § 3582(c)(1) or (c)(2), a motion for early
termination of supervised release under 18 U.S.C. § 85838(e)(1), and any other
appeal, motion, petition, or writ, however captioned, that seeks to attack or modify

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Case 3:23-cr-00794-GC Document 29 Filed 10/11/23 Page 12 of 13 PagelD: 112

any component of the sentence. If the term of imprisonment is at least 46 months,
this Office will not challenge by appeal, motion, or writ any component of the
sentence imposed by the sentencing judge. The provisions of this paragraph bind
the parties even if the sentencing judge employs a Guidelines analysis different
from the one above.

11. Both parties reserve the right to file or to oppose any appeal, collateral
attack, writ or motion not barred by the preceding paragraph or any other provision
of this plea agreement. Moreover, the preceding paragraph does not apply to:

(a) | Any proceeding to revoke the term of supervised release.

(b) A motion to reduce the term of imprisonment under 18 U.S.C.
§ 3582(c)(1)(A).

(c) An appeal from the denial of a § 8582(c)(1)(A) motion on the
grounds that the court erred in finding no extraordinary and
compelling circumstances warranting a reduced term of
imprisonment or that the court failed to consider those

circumstances as a discretionary matter under the applicable
factors of 18 U.S.C. § 3553(a).

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Case 3:23-cr-00794-GC Document 29 Filed 10/11/23 Page 13 of 13 PagelD: 113

SCHEDULE B

a The contents of an account at Wells Fargo, NA, account number
ending in 5095 in the name of Skycam Homes LLC;

b. The contents of an account at Wells Fargo, NA, account number
ending in 5574 in the name of Skycam Entertainment LLC;

c The contents of an account at TD Bank, account number ending in 7619
in the name of Skycam Auto Group LLC ;

d The contents of an account at Wells Fargo, NA, account number
ending in 0261 in the name of Skycam Property Development LLC;

e The contents of an account at TD Bank, account number ending in
8725 in the name of Advance Intelligent Systems;

f The contents of an account at TD Bank, account number ending in
8733 in the name of Skycam Security LLC;

g The contents of an account at TD Bank, account number ending in
8741 in the name of Skycam Technologies LLC;

h. The contents of an account at TD Bank, account number ending in
8759 in the name of Skycam Construction LLC;

i The contents of an account at TD Bank, account number ending in 8767 in
the name of Skycam Enterprises and Holding LLC;

j. The contents of an account at Bank of America, NA, account number
ending in 8362 in the name of Skycam Technologies LLC;

k The contents of an account at Bank of America, NA, account number
ending in 8537 in the name of The ISS Group LLC.

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