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Government's Sentencing Memorandum — United States v. Francesco Distefano
Summary
The government's sentencing memorandum in United States of America v. Francesco Distefano, No. 1:24-cr-00424, in the U.S. District Court for the Northern District of Illinois, filed February 24, 2026 as Document 111. It asks the court to impose 108 months' incarceration followed by three years of supervised release, and notes a sentencing hearing set for March 10, 2026. It recounts that a second superseding indictment returned December 10, 2024 charged wire fraud under Title 18, United States Code, Section 1343, a false statement to a financial institution under Section 1014 and money laundering under Section 1957(a), and that the defendant pleaded guilty to Count One on June 25, 2025. It describes Paycheck Protection Program and Economic Injury Disaster Loan applications filed with a co-defendant for two companies, including a $149,900 disbursement and a $1,090,890 loan. It is 34 pages.
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No. 1:24-cr-00424 · Doc. 111 · Docket on CourtListener
Full text
Case: 1:24-cr-00424 Document #: 111 Filed: 02/24/26 Page 1 of 34 PageID #:787
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UNITED STATES OF AMERICA )
) No. 24 CR 424-1
v. )
) Judge Jeremy C. Daniel
FRANCESCO DISTEFANO )
GOVERNMENT’S SENTENCING MEMORANDUM
The United States of America, by its attorney, ANDREW S. BOUTROS, United
States Attorney for the Northern District of Illinois, respectfully submits this
memorandum in advance of the sentencing of defendant FRANCESCO DISTEFANO.
The government respectfully requests that this Court impose a sentence of 108
months’ incarceration followed by three years of supervised release.
I. PROCEDURAL BACKGROUND
On December 10, 2024, a grand jury returned its second superseding
indictment charging defendant FRANCESCO DISTEFANO with wire fraud, in
violation of Title 18, United States Code, Section 1343 (Counts 1-11); making a false
statement to a financial institution in violation of Title 18, United States Code,
Section 1014 (Count 12); and money laundering, in violation of Title 18, United States
Code, Section 1957(a) (Counts 13-17).
On June 25, 2025, pursuant to a written plea agreement with the government,
DISTEFANO pled guilty to Count One of the second superseding indictment.
A sentencing hearing has been scheduled for March 10, 2026, at 11:00 a.m.
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II. OFFENSE CONDUCT
The Paycheck Protection Program (PPP) and the Economic Injury Disaster
Loan (EIDL) program provided economic relief to businesses experiencing a loss of
revenue as a result of the COVID-19 pandemic. Plea Agreement, ¶ 5. 1 DISTEFANO
was familiar with these programs and knew that, in order to obtain a PPP loan, a
business was required to provide information about, among other things, the number
of individuals it employed and its average monthly payroll and, in order to obtain a
loan as part of the EIDL program, a business applicant was required to provide
truthful information about the number of employees as well as the business’ gross
revenues and cost of goods sold, among other things. DISTEFANO also knew that the
information in the PPP and EIDL applications about the business’ employees, payroll,
and revenues was material to the approval and funding of these loans. Id.
Beginning in March 2020, and continuing through February 2021, in the
Northern District of Illinois, Eastern Division, and elsewhere, DISTEFANO, together
with co-defendant Sargis Urumieh, knowingly devised, intended to devise, and
participated in a scheme to defraud and to obtain money and property, in connection
with applications for loans and advances under the PPP and the EIDL program on
behalf of businesses which Urumieh owned and controlled, namely, West Cost POS,
Inc. (West Coast) and National POS Inc. (National). Plea Agreement, ¶ 5. These
applications contained materially false statements and misrepresentations
1 Dkt. 82.
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concerning, among other things, the purported entities’ number of employees, gross
revenues, and payroll. And, on or about March 31, 2020, DISTEFANO, for the
purpose of executing the scheme, knowingly caused to be transmitted by means of
wire communication in interstate commerce certain writings, signs, and signals,
namely, an internet transmission of an EIDL application on behalf of West Coast to
the U.S. Small Business Administration (SBA). Id.
The West Coast EIDL and EIDL Advance
Following the onset of the pandemic, DISTEFANO and Urumieh discussed
obtaining an EIDL on behalf of Urumieh’s company, West Coast. Plea Agreement, ¶
5. Following that discussion, on or about March 31, 2020, DISTEFANO prepared and
filed an EIDL application on behalf of West Coast through the SBA online portal with
Urumieh’s knowledge and consent. DISTEFANO acknowledges that the transmission
of this application over the Internet involved an interstate wire communication. Id.
In completing this application, DISTEFANO falsely represented that West
Coast had 12 employees as of January 31, 2020, gross revenues of $5,000,000, and
cost of goods sold of $4,500,000, even though DISTEFANO knew that West Coast did
not have that many employees or that amount of cost of goods sold. Id. As a result of
these false representations, on May 22, 2020, the SBA disbursed EIDL funds of
$149,900 into an account J.P. Morgan Chase Bank, in the name of West Coast, for
which Urumieh was the sole signatory (“Account 6250”). Id. The SBA also disbursed
a $10,000 advance grant into Account 6250 on or about April 20, 2020, based upon
DISTEFANO’s request. Id.
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The West Coast PPP Loan and Second Round Application
On approximately July 17, 2020, DISTEFANO prepared and provided to
Urumieh, and Urumieh thereafter signed and submitted to Arkansas Capital
Corporation (Arkansas Capital), an application for a PPP loan for West Coast in the
amount of $1,090,890. Plea Agreement, ¶ 5. Arkansas Capital was a community
development finance company that originated PPP loans in partnership Encore Bank.
Id. In connection with the loan application, DISTEFANO and Urumieh falsely
represented that West Coast had 67 employees (after reporting 14 employees on the
initial application form) and an average monthly payroll of $436,356, even though
West Coast did not have that number of employees or an average payroll in that
amount. Id.
In support of the application, DISTEFANO also created and provided to
Urumieh, and Urumieh electronically submitted to Arkansas Capital, a fictitious
ADP “Payroll Run Summary Report” and a fictitious IRS Form 940. Id. Based upon
the false statements, on July 22, 2020, Arkansas Capital and Encore Bank funded a
PPP loan in the amount of $1,090,890, into an account at Encore Bank in the name
of West Coast, that was opened to receive the PPP proceeds. Id.
On approximately July 23, 2020, DISTEFANO opened a payroll account in the
name of West Coast at ADP, with himself as the account administrator, for the
purpose of removing PPP proceeds from West Coast’s account at Encore Bank and
making it appear that these proceeds were being used for payroll. Id. Between July
of 2020 and December of 2020, approximately $783,012 of the West Coast PPP
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proceeds were transferred from the West Coast account at Encore Bank to the payroll
account at ADP held for the benefit of West Coast. Id. Between July of 2020 and
December of 2020, DISTEFANO told ADP to transfer funds it held for West Coast to
approximately eight “employee” payees including himself, Urumieh, and three of
Urumieh’s family members. Id. Specifically, ADP paid $84,600 as “wages” to Urumieh
and approximately $169,769 as “wages” to three of Urumieh’s family members. Id.
ADP also paid DISTEFANO $389,539, which Distefano identified to ADP as non-
wage payments. Id.
On February 5, 2021, DISTEFANO electronically submitted a second round
PPP application to Arkansas Capital on behalf of West Coast in which he fraudulently
sought to obtain an additional $1,380,655. Id. In support of this application,
DISTEFANO falsely represented that West Coast had 14 employees and monthly
payroll of approximately $552,262, knowing that West Coast neither had that many
employees or amount of payroll. Id. The loan was not funded. Id.
The National PPP Loan and Second Round Application
Between approximately July 25, 2020, and July 28, 2020, DISTEFANO
prepared and provided to Urumieh, and Urumieh then submitted to Arkansas
Capital, an application for a PPP loan in the amount of $1,722,645.50 on behalf of
National. Plea Agreement, ¶ 5. In the loan application, DISTEFANO and Urumieh
falsely represented that that National had 123 employees and an average monthly
payroll of $689,058.20, even though, in reality, National was not an operating
business and had no employees. Id.
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In support of the application, DISTEFANO assisted Urumieh in creating and
sending fabricated documents to the lender in support of the loan. Id. These
documents included a fictitious ADP “Payroll Run Summary Report” and a fictitious
IRS Form 940, both falsely reporting that National paid $8,272,696.45 in wages in
2019 that DISTEFANO created and provided to Urumieh to submit to Arkansas
Capital. Id.
On July 28, 2020, DISTEFANO created a fictitious payroll spreadsheet that
listed 122 fictitious employees, each with a reported salary of between $98,121 and
$98,952. Id. Urumieh sent these false documents to Arkansas Capital in support of
the National PPP loan application. Id. Based upon the false statements, on July 29,
2020, Encore Bank disbursed a PPP loan in the amount of $1,722,654 into an account
at Encore Bank in the name of National that was opened to receive the PPP proceeds.
Id.
On approximately July 28, 2020, DISTEFANO opened a payroll account in the
name of National at ADP, with himself as the account administrator, in order to make
it appear that National had employes and payroll. Id. Nevertheless, the ADP account
set up by DISTEFANO identified only six employees rather than the 123 listed in the
loan application. Id. Of these six employees, DISTEFANO identified four as W-2 wage
earners, with the remaining two – DISTEFANO and his acquaintance – listed as non-
employees receiving 1099 compensation. Id.
On February 5, 2021, DISTEFANO electronically submitted a second round
PPP application to Arkansas Capital on behalf of National in which he and Urumieh
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fraudulently sought to obtain an additional $1,994,717. Id. In support of this
application, DISTEFANO falsely represented that National had 53 employees and
monthly payroll of approximately $797,887, knowing that National did have that
number of employees or amount of monthly payroll. Id. This loan was not funded. Id.
Proceeds from the West Coast and National Loans
On July 31, 2020, DISTEFANO caused $388,821 of the National PPP loan
proceeds to be transferred into his account at U.S. Bank (“Account 9624”) via the
National payroll account at ADP. Plea Agreement, ¶ 5. That same day, DISTEFANO
caused funds to be drawn from Account 9624 to make payments to American Express
totaling $188,368.73 and to purchase three cashier’s checks totaling $183,205.33 to
purchase or complete the purchase of a 2016 Lamborghini Huracan; 2020 Land Rover
Range Rover Evoque; and 2017 Maserati Ghibli. Id. On or about August 6, 2020,
DISTEFANO used a further approximately $95,000 in National PPP loan proceeds
that Urumieh caused to be transferred directly from National’s account at Encore
Bank to DISTEFANO’s Account 9624 to purchase a 2017 Porsche 911 Carrera. Id.
The total amount of funds DISTEFANO received for his personal benefit from
the National PPP loan was approximately $814,780. Id. This amount is comprised of
transfers into Account 9624 totaling approximately $719,780 from the payroll account
at ADP held for the benefit of National between July 2020 and January 2021, and the
$95,000 transferred directly from National’s account at Encore Bank to Account 9624
on August 6, 2020. Id.
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From July 2020 through January 2021, approximately $329,815 of the West
Coast PPP loan proceeds were transferred to Account 9624 for DISTEFANO’s
personal benefit. Id.
Defendant acknowledged in his plea agreement that the actual loss
attributable to the scheme is approximately $2,973,444 and that the total of actual
loss and intended loss for that scheme is approximately $6,348,816. Id.
Urumieh’s Purchase of Property in Glendale California
After obtaining funds from the EIDL and PPP first-round loan applications
filed for West Coast and National, Urumieh entered into a contract to purchase a
home located at 29XX E. Chevy Chase Dr. in Glendale, California (the “Glendale
Property”). Plea Agreement, ¶ 5. DISTEFANO’s understanding was that Urumieh
used funds obtained from the West Coast and National PPP loans for the down
payment to purchase the Glendale Property. Id. Thereafter, DISTEFANO and
Urumieh caused fraudulent mortgage loan applications to be filed to enable Urumieh
to complete the purchase. Id.
Between approximately September 9, 2020, and October 19, 2020,
DISTEFANO assisted Urumieh in submitting to Better Mortgage an application for
a residential real estate loan in the amount of approximately $746,555 to purchase
the Glendale Property, knowing that such application contained false and fraudulent
representations regarding: (a) monthly income; and (b) the truthfulness and accuracy
of the application and supporting documents. Id.
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The Uniform Residential Loan Application that DISTEFANO submitted online
to Better Mortgage on behalf of Urumieh represented that Urumieh had monthly
income of $233,333. Id. In support of the application, DISTEFANO created two
fraudulent individual income tax returns (IRS Forms 1040-X) falsely representing
that Urumieh had adjusted gross income of $8,908,233.43 in 2019 and adjusted gross
income of $7,659,188.50 in 2018, and a fraudulent letter from “ER TAX SERVICES”
explaining the IRS Forms 1040-X, and caused the documents to be submitted to
Better Mortgage. Id. Additionally, DISTEFANO and Urumieh submitted to Better
Mortgage a fraudulent “Large Deposit Explanation” that falsely attributed a
$450,000 deposit of proceeds from the National first draw PPP loan into an account
that Urumieh controlled at Chase Bank ending in 6250, as proceeds of a liquidation
of Urumieh’s “stock options on TastyTrade.” Id.
On or about October 19, 2020, Urumieh, after he was informed by Better
Mortgage that his loan application had been rejected by underwriting because of
“discrepancies in income in the amount of millions of dollars from what was reported
to the IRS when your taxes were filed as opposed to the tax returns that [Better
Mortgage] received,” sent an email to DISTEFANO and Individual A stating “[t]hats
what I was concerned about” and asking “[w]hat now?” Id. DISTEFANO responded
to this email with a false narrative for Urumieh to provide to Better Mortgage. Id.
After Urumieh’s mortgage loan application was rejected by Better Mortgage,
between approximately October 30, 2020 and December 4, 2020, DISTEFANO,
Urumieh, and Individual A caused to be submitted to Planet Home an application on
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behalf of Urumieh for a residential real estate loan in the amount of approximately
$765,600 to purchase the Glendale Property, knowing that the application contained
false and fraudulent representations regarding: (a) monthly income; and (b) the
truthfulness and accuracy of the application and supporting documents. Id.
The Uniform Residential Loan Application to Planet Home falsely represented
that Urumieh was employed by National and West Coast, both of Addison, Illinois,
with a total monthly income of $30,833. Id. To corroborate false representations made
in the application, DISTEFANO, Urumieh, and Individual A, created and submitted
to Planet Home, a fraudulent Sales Purchase Agreement that was backdated to
August 1, 2020. Id. More specifically, the document was built from a template
Individual A and DISTEFANO received from a then-relative of DISTEFANO. Id.
After the document was modified to reflect a fictional business sale transaction, the
document was docusigned by DISTEFANO from his house in Addison, Illinois, and
by Urumieh from his house in Glendale, California, on November 27, 2020. Id. The
docusign receipt page was then altered so that it appeared that the document had
been docusigned on August 1, 2020. Id. The document was then submitted to Planet
Home and falsely recounted that West Coast was sold by Urumieh to DISTEFANO’s
company, Distefano Enterprises LLC, for $2,000,000 payable in installments, and
that Urumieh was to enter into a 10-year employment agreement with Distefano
Enterprises at an annual salary of $365,000. Id.
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Defendant acknowledged in his plea agreement that for the purpose of
computing his sentence under the Sentencing Guidelines, the following conduct
constitutes relevant conduct under Guideline § 1B1.3:
EIDL and EIDL Advance Obtained by Distefano Enterprises
Simultaneous to his scheme with Urumieh, DISTEFANO was engaged in his
own scheme to obtain EIDL and PPP funds through fraudulent applications filed for
his own company, Distefano Enterprises LLC. Plea Agreement, ¶ 6. On March 31,
2020, DISTEFANO applied for an EIDL on behalf of Distefano Enterprises through
the SBA online portal. In this application, he falsely represented that Distefano
Enterprises had 12 employees as of January 31, 2020, gross revenues of $2,500,000,
and cost of goods sold of $2,120,000. At the time of the application, DISTEFANO knew
that these representations were false. Id. As a result of these representations, on
June 10, 2020, the SBA disbursed EIDL funds totaling $149,900 into DISTEFANO’s
Account 9624. Id. On June 18, 2020, the SBA disbursed a $10,000 EIDL advance
grant into Account 9624. Id.
Distefano Enterprises PPP Loan and Second Round Application
On or around April 27, 2020, DISTEFANO submitted to U.S. Bank an
application requesting a PPP loan in the amount of $237,500, on behalf of Distefano
Enterprises. Plea Agreement, ¶ 6. In the initial loan application, DISTEFANO falsely
stated that Distefano Enterprises had 14 employees and an average monthly payroll
of $95,000. Id. DISTEFANO supported this loan application with a fraudulent ADP
“Payroll Run Report” that he created. Id.
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On or about May 13, 2020, DISTEFANO submitted a revised fraudulent PPP
loan application to U.S. Bank, in which he falsely represented that Distefano
Enterprises had 14 employees with an average monthly payroll of $79,166, once again
knowing these presentations were false. Id. Based upon the false statements, on May
13, 2020, U.S. Bank disbursed a PPP loan in the amount of $197,915 into Account
9624. Id.
On October 29, 2020, DISTEFANO electronically submitted to U.S. Bank a
PPP Loan Forgiveness Application Form 3508EZ on behalf of Distefano Enterprises.
Id. In the application, he falsely reported that during the period of May 13, 2020 to
October 27, 2020, the business had payroll costs of $255,478.54. Id. Additionally,
DISTEFANO submitted, as supporting documentation, a fictitious ADP report listing
7 employees and a fictitious IRS Form 941 for the 3rd quarter of 2020. Id. This loan
forgiveness application was not granted. Id.
On approximately February 5, 2021, DISTEFANO electronically submitted a
second round PPP application to Arkansas Capital Corporation on behalf of Distefano
Enterprises in which he fraudulently sought to obtain an additional loan in the
amount of $83,921. Id. In support of this application, DISTEFANO falsely
represented that Distefano Enterprises had 14 employees and a monthly payroll of
approximately $33,568. Id. This loan was not funded. Id.
Defendant acknowledged in his plea that the actual loss attributable to the
Distefano Scheme is approximately $357,815 and that the total of actual loss and
intended loss for that scheme is approximately $441,736. Id.
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Unemployment Benefits
Beginning in March 2020 and continuing into February 2021, DISTEFANO
applied for and received unemployment benefits by falsely claiming that he was
unemployed due to COVID-19 since March 29, 2020. Plea Agreement, ¶ 6. In fact,
DISTEFANO was not unemployed and his business continued to operate. Id. Based
upon his false statements, the Illinois Department of Employment Security
electronically deposited approximately $29,581.50 in unemployment benefits into
Account 9624. Id.
Beginning in approximately August of 2020 and continuing into September of
2021, DISTEFANO applied for and received unemployment benefits in the name of
his father, claiming that his father was a self-employed driver/sales worker who
became unemployed due to COVID-19. Id. In reality, DISTEFANO’s father was
retired. Id. Based upon DISTEFANO’s false statements, the Illinois Department of
Employment Security disbursed $8,059.50 in unemployment benefits on account of
the claim, and DISTEFANO received the funds. Id.
Defendant’s Fraudulent Petition Filed with FBI
On February 17, 2021, four motor vehicles and $677,932.25 on deposit in
Account 9624 were seized pursuant to seizure warrants. Plea Agreement, ¶ 6. On
April 28, 2021, a Notice of Seizure of Property and Initiation of Administrative
Forfeiture Proceedings was issued and served on defendant. Id.
On May 3, 2022, defendant filed his Petition for Remission/Mitigation seeking
the return of the $677,932.25 seized from Account 9624. Id. In this application,
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defendant represented that the funds transferred to him by West Coast and National
were “for actual work done.” Id. Defendant falsely represented in the application that
he “was a bona fide purchaser or seller of the forfeited property for value, AND [he]
did not know and was without cause to believe that the property was subject to
forfeiture at the time [he] acquired [his] interest in the property.” Id. In support of
his petition, defendant submitted four counterfeit invoices, purporting to bill four
different customers a total of $1,010,000 care of Urumieh and West Coast. Id. These
invoices did not evidence real obligations, and were submitted to deceive the
government as to why defendant had received funds from the West Coast and
National loans. Id. The Petition for Remission/Mitigation was electronically signed
by defendant under penalty of perjury. Id.
III. CORRECTIONS/OBJECTIONS TO THE PRESENTENCE REPORT
The government has the following correction and objections to the Presentence
Report.
• The total loss amount for Guidelines’ purposes should be approximately
$6,828,184. The government and Probation Office have reviewed the
inputs, and it appears that one input was slightly off in arriving at the
$6,828,193 referenced in Paragraph 38 of the PSR.
• The government respectfully disagrees with the Probation Office about
the applicability of a leader/organizer enhancement, for the reasons
explained below.
• The government agrees the proposed Special Condition 14 is warranted,
but believes it should be more narrowly drawn, for reasons explained
below.
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IV. GUIDELINES CALCULATIONS
The Sentencing Guidelines to be considered in this case are those in effect at
the time of sentencing, the November 2025 Guidelines Manual.
A. Criminal History Category
The government and the Probation Office agree that defendant is a criminal
history category I. PSR at ¶ 53.
B. Offense Level Calculation
i. The government and the Probation Office agree that that the base
offense level is 7, pursuant to Guideline § 2B1.1(a)(1). PSR ¶ 37.
ii. The government and the Probation Office agree that the offense
level is increased by 18 levels because the loss of approximately $6,828,184 2
2 The inputs for this total are as follows:
Distefano Enterprises EIDL $159,900
Distefano Enterprises PPP $197,915
Distefano Enterprises 2nd Round PPP $83,920
West Coast EIDL $159,900
West Coast PPP $1,090,890
West Coast 2nd Round PPP $1,380,655
National PPP $1,722,646
National 2nd Round PPP $1,994,717
IDES benefits payable to defendant $29,581.50
IDES benefits payable to defendant's
father $8,059.50
TOTAL $6,828,184
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attributable to the offense of conviction and relevant conduct is between $3,500,000
and $9,500,000, pursuant to Guideline § 2B1.1(b)(1)(J) and Application Note 3(D)(ii).
PSR ¶ 38.
iii. The government and the Probation Office agree that the offense
level is increased by 2 levels because the offense involved obtaining more than
$1,000,000 in gross receipts from one or more financial institutions, pursuant to
Guideline § 2B1.1(b)(17)(A). PSR ¶ 39.
iv. The government respectfully disagrees with the Probation Office that
the offense is increased by 2 levels because defendant was an organizer of the offense,
pursuant to Guideline § 3B1.1(c). Application Note 4 to Guideline § 3B1.1(c) instructs
that factors to consider include: “the exercise of decision-making authority, the nature
of participation in the commission of the offense, the recruitment of accomplices, the
claimed right to a larger share of the fruits of the crime, the degree of participation
in planning or organizing the offense, the nature and scope of the illegal activity, and
the degree of control and authority exercised over others.”
Among the participants of this scheme (defendant, codefendant Sargis
Urumieh, and Individual A 3), defendant did not per se exercise control over others.
He made many tactical decisions in executing the scheme, but he did not alone
(openly) make larger decisions such as what loans would be applied for or what his
share of the proceeds would be. Defendant was supposed to be working for Urumieh
3Individual A’s direct involvement in the scheme primarily involved the second home
mortgage application for co-defendant Sargis Urumieh.
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to fraudulently obtain the loans for Urumieh. Their agreed arrangement was that
defendant would be compensated with a particular high end motor vehicle for his
efforts. PSR ¶ 23. Defendant took a portion of the loan proceeds, but he achieved this
by deceiving Urumieh into believing that the funds were needed for taxes. Id.
Urumieh (directly and through his designees) received the majority of the funds
obtained through the scheme. Considering the totality of the circumstances, the
government does not believe that an enhancement under Guideline § 3B1.1(c) is
warranted.
v. The government and the Probation Office agree that the offense
level is increased by 2 levels because the defendant willfully attempted to impede and
obstruct the investigation by filing his fraudulent Petition for Remission/Mitigation
with the FBI, pursuant to Guideline § 3C1.1. PSR ¶ 42.
ii. Acceptance of Responsibility
The government agrees with the Probation Office that that a two-level offense
reduction is not applicable under Guideline § 3E1.1(a). PSR ¶ 45. The government’s
position is based exclusively on defendant’s continued criminal conduct while on
pretrial release, however, and not on defendant’s pre-indictment obstruction.
Defendant obstructed brazenly during the investigation. However, after he was
indicted, defendant requested to meet with the government and truthfully admitted
his conduct in this case. The contrast with his pre-indictment behavior was
exceptional. A plea agreement was reached between the government and defendant
that provided that defendant would be available to cooperate and testify in the case
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against his codefendant, Sargis Urumieh. However, after defendant was granted
pretrial release, he brazenly violated the conditions of release and engaged in further
fraudulent conduct by creating All in 1 Swipe LLC with a nominee owner, and he
used the business to sign up an as-of-yet undetermined number of business clients
for payment processing services without their knowledge or consent. PSR ¶ 57; Supp
GV at 1; GX 4 (reports of interview with four “customers” who are unaware of All In
One Swype). 4 Additionally, defendant tendered a fraudulent check to Molly Maids
cleaning service. 5 See GV at 18-20; GX 2-A; GX 2-B.
The Guidelines advise that appropriate considerations in determining the
applicability of § 3E1.1(a) include, but are not limited to, “voluntary termination or
withdrawal from criminal conduct. . . .” Application Note 1(B). Consistent with the
Application Note, courts have denied defendants the reduction under § 3E1.1(a) for
continuing criminality. See United States v. McDonald, 22 F.3d 139, 141 (7th Cir.
1994) (collecting cases). Here, defendant continued engaging in fraudulent conduct
4 Citations to the Government’s Version of the Offense are “GV,” Government’s Supplemental
Version of the Offense are “Supp. GV,” and Defendant’s Version of the Offense are “DV,” each
followed by a page number. Citations to exhibits to the Government’s Versions of the Offense
are “GX” followed by the exhibit number and page, if applicable.
5 The government was alerted to the existence of a potential issue with Molly Maids through
a violation report prior to defendant’s change of plea. The government initially understood
that the check involved an acquaintance of defendant who had been living in his house, and
that defendant was more or less in the wrong place at the wrong time. The reality of what in
fact occurred – a fraudulent check was created using account information of Victim PB, whose
identity was previously fraudulently used to sign her business up for service with defendant’s
Big Star Payments company – was not known to the government until after defendant’s
pretrial release was revoked and further witnesses were interviewed and records obtained.
See GV 18-20.
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within a few weeks of obtaining pretrial release. Defendant’s actions were entirely
inconsistent with acceptance, and the reduction should not apply.
D. Advisory Guidelines Range
The government calculates defendant’s total offense level to be 29. With a
criminal history category I, defendant’s guideline range is 87 to 108 months’
imprisonment.
V. APPLICATION OF STATUTORY SENTENCING FACTORS
The Court must impose a sentence that is “sufficient, but not greater than
necessary” to achieve the purposes of sentencing. 18 U.S.C. § 3553(a). In doing so,
the Court must consider the statutory factors outlined in 18 U.S.C. § 3553(a)(1)-
(7), including:
(1) the nature and circumstances of the offense and the history and
characteristics of the defendant; (2) the need for the sentence imposed—(A) to
reflect the seriousness of the offense, to promote respect for the law, and to
provide just punishment for the offense; (B) to afford adequate deterrence to
criminal conduct; (C) to protect the public from further crimes of the defendant;
and (D) to provide the defendant with needed educational or vocational
training, medical care, or other correctional treatment in the most effective
manner; [and] (3) the kinds of sentences available.
Id. § 3553(a)(1)-(3). The Court must also respect “the need to avoid unwarranted
sentence disparities among defendants with similar records who have been found
guilty of similar conduct,” as well as “the need to provide restitution to any victim of
the offense.” Id. § 3553(a)(6)-(7). Finally, the Court must consider the Guideline range
and any pertinent policy statements issued by the United States Sentencing
Commission. Id. § 3553(a)(4)-(5). Although the Sentencing Guidelines are only
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advisory, “[a]s a matter of administration and to secure nationwide consistency,
[they] should be the starting point and the initial benchmark.” Gall v. United States,
552 U.S. 38, 49 (2007).
This Court should give serious consideration to the advisory Guidelines range,
for several reasons. First, the Guidelines minimize unwarranted sentencing
disparities and “remain an essential tool in creating a fair and uniform sentencing
regime across the country.” United States v. Mykytiuk, 415 F.3d 606, 608 (7th Cir.
2005); see also Booker v. United States, 543 U.S. 220, 250, 253 (2005) (noting that
“Congress’ basic goal in passing the Sentencing Act was to move the sentencing
system in the direction of increased uniformity” and “diminish[ing] sentencing
disparity”). Second, the Guidelines are “the product of careful study based on
extensive empirical evidence derived from the review of thousands of individual
sentencing decisions,” Gall, 552 U.S. at 42, and the U.S. Sentencing Commission is
“a respected public body with access to the best knowledge and practices of penology.”
United States v. Wachowiak, 496 F.3d 744, 753 (7th Cir. 2007) (quoting United States
v. Goldberg, 491 F.3d 668, 673 (7th Cir. 2007)). Therefore, “its judgments should not
lightly be disregarded.” Id. Finally, the U.S. Sentencing Commission is charged by
statute to review and revise the Guidelines as it collects sentencing data from
throughout the federal court system, see 28 U.S.C. § 994(o), making the Guidelines
the product of continuous evolution and improvement. See Rita v. United States, 551
U.S. 338, 358 (2007).
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In this case, a sentence of 108 months’ incarceration, which falls at the high end
of the advisory Guidelines’ range, is sufficient but not greater than necessary to satisfy
the goals of Section 3553(a). Even if the Court were to determine a lower Guidelines
range, the government believes that a sentence of 108 months’ incarceration is
appropriate under the Section 3553(a) factors.
A. The Nature and Circumstances of the Offense
The offense was serious. As the nation was struggling with the COVID
pandemic the defendant was scheming to defraud the PPP, EIDL, and unemployment
programs. Defendant successfully obtained $3,368,892 and nearly obtained a further
$3,459,292. The offense occurred over an 11-month period. It was not the result of a
momentary lack in judgment, but a continuing series of decisions, motivated by greed,
that defendant made to fraudulently obtain ever more money.
B. History and Characteristics of the Defendant
Defendant is 29 years-old and a lifetime resident of the Chicagoland area. PSR
¶¶ 62, 73. Defendant grew up in a household with both parents and enjoys a good
relationship with them. Id. ¶¶ 62-63. Defendant reports that he was bullied as a child
due to his placement in advanced classes at school. Id. ¶ 64. Defendant graduated
high school in 2014, and went on to complete one year of college. Id. ¶ 105. While in
high-school, defendant started Distefano Enterprises LLC, a company that provided
payment processing services to merchants. Id. ¶ 65.
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Defendant is generally healthy. PSR ¶¶ 77-79. Defendant has several mental
health diagnoses for which he has been provided medication. Id. ¶¶ 81-84, 86.
Defendant is presently on the waitlist at MCC to participate in cognitive skills, anger
management, and criminal thinking programs. Id. ¶ 86.
Defendant was 24 years-old when he committed the criminal conduct in this
case. The known fraudulent conduct that defendant has engaged in since the offense
conduct began includes:
• committing mortgage fraud in the purchase of defendant’s own home
(see PSR ¶ 55; GV at 17-18);
• continued receipt of fraudulently obtained unemployment benefits in
defendant’s father’s name after defendant was interviewed by the FBI
concerning PPP fraud (see PSR ¶ 28);
• submission of false records to the FBI in an attempt to recover
$677,932.25 in scheme proceeds that had been seized from defendant’s
bank account (see PSR ¶ 32);
• filing four fraudulent lien releases with the DuPage County Recorder to
release liens places on defendant’s home after he failed to pay for
windows, HVAC, floor refinishing, and roofing services performed by
contractors on his home (see PSR ¶ 55; GV at 17-18; GX 1-A; GX 1-B);
and
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• operating Big Star Payments through a nominee owner and signing
“customers” up for services without their knowledge or consent (see PSR
¶ 57; GV at 20; GX 2-B).
Defendant was initially detained in this case on September 11, 2024. After
approximately 225 days of detention, defendant was granted pretrial release on April
24, 2025. Upon posting bond, defendant engaged in further fraudulent conduct:
• on May 12, 2025, defendant opened All in 1 Swipe LLC through a
nominee, and proceeded to use “customer’s” identities to sign them up
for service without their knowledge or consent (see GV at 20-21); and
• on or about May 13, 2025, defendant provided a fraudulent check to
Molly Maids cleaning service and later lied to the Glendale Heights
Police Department about the fraudulent nature of the check, insisting
that it was not honored because he had stopped payment, when, in fact,
it was not honored because it was a fraudulent check. 6 See GV at 18-20;
GX 2-A; GX 2-B.
Defendant has one prior conviction. In December 2023, defendant was
convicted of Nonconsensual Dissemination of Sexual Images, commonly referred to
as “revenge porn,” in Cook County Circuit Court. The conduct underlying that
6 On September 10, 2025, defendant was charged in DuPage County Circuit Court with a
misdemeanor forgery offense in People of the State of Illinois v. Francesco Distefano, No.
2025CM001892. The case was nolle pross’d on October 22, 2025. The government
understands from the ASA assigned to the case that the disposition was due to the pending
federal case, and not the merits.
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conviction occurred on or about January 12, 2022, and involved defendant
disseminating private sexual images of the victim to her father, as well as the posting
of such images to Facebook, Instagram, and various pornographic websites. PSR ¶
52. One disseminated image was a video of a sexual encounter filmed in Las Vegas,
Nevada, wherein the victim appeared to not be alert during the filmed encounter. Id.
Defendant contends that the victim was trying to “extort” him, and that it was
“stupid” of him to distribute the images. Id. It is noted that defendant has been
accused of similar conduct by other women, including his former wife (PSR ¶¶ 68,
97), and Victim KM, who filed a series of police reports against defendant in April
2020, alleging that, following their breakup and her rejection of his sexual advances,
defendant disseminated nude images of her (that she had never consented to the
creation of) without consent, slashed the tires on her vehicle, called her incessantly
including from spoofed numbers that appeared to be known contacts to her, and
circled her apartment in his vehicle repeatedly after the police told defendant to stop
contacting her. Supp. GV at 2-3; GX 7 (compilation of police and interview reports).
Defendant accused Victim KM of using his credit card for unauthorized charges, see
Exhibit 7 at 8, however, defendant has fabricated evidence to falsely accuse Victim
KM of being under grand jury investigation (compare GX 3-D with GX 3-E), so his
accusations against her are suspect.
Defendant has a history of perpetrating outrageous deceptions. In a recent
example, while defendant was on pretrial release, he falsely portrayed himself to
Victim NN as an informant and special agent working with the FBI with access to
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criminal investigatory files. Defendant provided Victim NN with fabricated and
fraudulent investigatory files to convince Victim NN that her former partner (with
whom she shares a child) was about to be indicted. See Supp. GV at 3; GX 3-C at 1;
GX 3-D; GX 3-E. This was apparently motivated by defendant’s desire to date Victim
NN, and his desire that she stay away from her former partner with whom she shares
a child. In another example, in August 2023, defendant distributed to former business
acquaintances a fraudulent letter purported to be from the United States Attorney
for the District of Columbia. See GX 8. The fraudulent letter falsely represented that
the investigation into defendant’s PPP fraud (which was publicly known due to news
articles covering the seizure of defendant’s cars and bank accounts) had been closed
and that the United States was paying $15,000,000 to defendant for its “wrongdoing.”
Id.
Defendant has not been cited for misconduct while housed at the Metropolitan
Correctional Center. However, on December 6, 2025, defendant utilized another
inmate’s calling account and called Victim NN approximately 19 times on December
6, 2025. See Supp. GV at 2; GX 5; GX 6. This behavior constitutes phone abuse in
violation of MCC rules. And it is the continuation of a pattern of defendant
incessantly calling women who do not wish to communicate with him. See GX 5; GX
7 at 29.
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C. The Seriousness of the Offense, and the Need to Promote
Respect for the Law, Provide Just Punishment, Afford Adequate
Deterrence, and Protect the Public
Defrauding federal relief programs for millions of dollars during a global
pandemic is a serious offense. The sentence to be imposed must deter defendant
and others from committing fraud, protect the public, and promote respect for the
rule of law.
Defendant’s offense was serious because of the large sums involved and the
fact that the offense was committed while the nation was experiencing a national
emergency. Defendant took millions from programs designed for struggling
businesses to avoid layoffs and used the funds for ostentatious purchases
including a Lamborghini and a Porsche. His conduct undermines the public’s
confidence in the administration of federal relief programs.
Defendant has shown by his actions that there is a strong need for specific
deterrence in this case. Defendant knew that he was under investigation for PPP
fraud since February 2021, and, instead of being chastened and changing his
conduct, he plowed forward and committed further frauds. Even after defendant
spent 225 days in pretrial detention, he quickly returned to fraud upon being
granted pretrial release. Defendant has demonstrated a lack of respect for this
Court’s order setting conditions of release and a continuing lack of respect for the
law. Defendant has shown that a substantial custodial sentence is necessary to
deter him from committing further crimes.
A substantial sentence is also necessary to protect the public. While
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defendant may not have the opportunity to defraud the PPP and EIDL programs
again, he has shown that he will continue to engage in other frauds if he is not
incapacitated. An example is the case of Victim PB. On September 4, 2024, one
week before defendant was arrested in connection with this case, defendant’s Big
Star Payments (which he had opened using the name of his then-girlfriend)
fraudulently impersonated Victim PB and signed her up for payment processing
services. See GV at 19-20. After defendant was granted pretrial release and was
on home incarceration, defendant returned to victimizing Victim PB by using a
fraudulent check that contained her business’s account information and
presenting it to Molly Maids. Id. Defendant’s behavior demonstrates that he is not
presently willing to refrain from engaging in fraud, and custodial incapacitation
is the only measure that will reasonably assure the safety of the public from
defendant’s unceasing fraud schemes.
A substantial custodial sentence is also necessary to generally deter others
who may be inclined to defraud government programs. The need for general
deterrence is particularly strong for economic crimes, which are often
premeditated, lucrative, and difficult for law enforcement to detect. See United
States v. Heffernan, 43 F.3d 1144, 1149 (7th Cir. 1994) (“Considerations of
(general) deterrence argue for punishing more heavily those offenses that either
are lucrative or are difficult to detect and punish, since both attributes go to
increase the expected benefits of a crime and hence the punishment required to
deter it.”) “Because economic and fraud-based crimes are more rational, cool, and
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calculated than sudden crimes of passion or opportunity, these crimes are prime
candidates for general deterrence.” United States v. Brown, 880 F.3d 399, 405 (7th
Cir. 2019) (quotation omitted).
Defendant was young when he committed the offense conduct. However,
the mitigative inference of this fact is substantially tempered by defendant’s
behavior in the five years since the offense conduct. Specific deterrence, promotion
of respect for the law, and protection of the public are considerations that require
a substantial custodial sentence in defendant’s case. The government submits that
a sentence of 108 months’ incarceration is sufficient but not greater than
necessary to achieve the purposes of sentencing set forth in 18 U.S.C. § 3553(a).
VI. FINE AND RESTITUTION
In light of defendant’s present circumstances and the Guidelines’ range, the
government’s position is that a fine is not appropriate in this case.
Pursuant to 18 U.S.C. § 3663A, the Court must order defendant, together
with any jointly liable co-defendants, to make full restitution to the victims in an
amount to be determined by the Court at sentencing. The government has
submitted its Victim Import Spreadsheet requesting defendant be ordered to pay
$2,973,436.42 in restitution for the offense conduct.
Additionally, as part of his plea agreement with the government, the
defendant agreed to pay further restitution of $395,456 pursuant to 18 U.S.C. §§
3663(a)(3) and 3664, for losses caused by defendant’s relevant conduct. Plea
Agreement, ¶ 15. These amounts are also included in the Victim Import
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Spreadsheet.
VI. SUPERVISED RELEASE
The government requests that defendant’s sentence include a period of three
years’ supervised release. With the exception of Special Condition 14, which the
government supports in a modified form, the government supports the Probation
Office’s recommended conditions for the reasons set forth below.
The PSR recommends the following mandatory conditions, as numbered in the
PSR:
(1) not commit another Federal, State, or local crime;
(2) make restitution in accordance with 18 U.S.C. §§ 3663 and 3663A, or any
other statute authorizing a sentence of restitution
(3) not unlawfully possess a controlled substance;
(6) cooperate in the collection of a DNA sample if required by law; and
(7) refrain from any unlawful use of a controlled substance AND submit to one
drug test within 15 days of release on supervised release and at least two
periodic tests thereafter, up to 104 periodic tests for use of a controlled
substance during each year of supervised release.
The government agrees with the imposition of these mandatory conditions, and given
that these conditions are mandated by statute, the Court need not give any reason or
explanation for the imposition of these mandatory conditions. United States v.
Bryant, 754 F.3d 443, 445 (7th Cir. 2014).
In addition to the mandatory conditions, the Court has discretion to impose
additional conditions of supervised release or probation (1) that are “reasonably
related” to the factors set forth in 18 U.S.C. §§ 3553(a)(1), (a)(2)(B), (a)(2)(C), and
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(a)(2)(D); (2) that “involve[] no greater deprivation of liberty than is reasonably
necessary” to meet the goals of 18 U.S.C. §§ 3553(a)(2)(B), (a)(2)(C), and (a)(2)(D); and
(3) that are “consistent with any pertinent policy statements issued by the Sentencing
Commission.” 18 U.S.C. § 3583(d); United States v. Shannon, 743 F.3d 496, 500 (7th
Cir. 2014). Section 3583(d) points to the discretionary conditions set forth in § 3563(b).
Discretionary Conditions 4, 6, 7, 8, 9 and 24, as numbered in the PSR, support
defendant’s rehabilitation and reintegration into the community and would ensure
that he is engaged in lawful pursuits instead of criminal activity. Specifically,
Discretionary Condition 4, requiring defendant to work conscientiously at obtaining
employment will discourage him from returning to a life of crime and provide him
necessary financial resources. Discretionary Condition 6 prohibits defendant from
knowingly meeting or communicating with any person that he knows to be planning
or engaging in criminal activity, and also prohibits defendant from contacting the
individuals that participated in the offense conduct. Discretionary Condition 7, which
prohibits defendant from excessive use of alcohol (defined as a BAC above .08%) and
from any use of narcotics or controlled substances without a prescription, will assist
with defendant’s efforts to address anger and other mental health issues.
Discretionary Condition 9 provides support for defendant’s mental health diagnosis
by providing for mental health treatment.
Discretionary Conditions 14 through 18, as numbered in the PSR, facilitate
effective and efficient supervision of defendant by the Probation Office, and without
these conditions, the Probation Office would be severely hampered in assisting
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defendant to succeed. For example, requiring defendant to remain within the district
(Discretionary Condition 14) and report to his probation officer within 72 hours of
release from imprisonment (Discretionary Condition 15) will assist the probation
officer in supervising defendant effectively and efficiently. Discretionary Condition 16
allows the probation officer to visit defendant’s home, work, school, a community
service location or other reasonable location at any reasonable time to ensure
defendant’s compliance with his release conditions. Moreover, requiring defendant
notify a probation officer within 72 hours of any change in residence, employer, or
workplace (Discretionary Condition 17) or any arrest, criminal charge, or law
enforcement questioning (Discretionary Condition 18) allow for necessary probation
officer supervision and support of defendant.
Pursuant to 18 U.S.C. § 3563(b)(22), which allows for “other conditions as the
court may impose,” the Probation Office recommended nine additional special
conditions, all of which the government agrees are appropriate here. First, the
Probation Office recommends that defendant, if unemployed after the first 60 days of
supervision or if unemployed for 60 days after employment ends, must perform at
least 20 community service hours each week at the direction of Probation until
gainfully employed, with the total community service hours not to exceed 300 hours
(Special Condition 3). This condition supports defendant’s reintegration to lawful
society should he be unable to obtain employment despite the training and support
provided through supervised release. Second, the Probation Office recommends that
defendant be prohibited from incurring new credit charges or opening new lines of
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credit without approval of a probation officer unless defendant is in compliance with
the financial obligations of his sentence (Special Condition 5). Given that defendant
will owe substantial restitution, Special Condition 5 as well as Special Condition 6
(requiring defendant to provide financial information to probation officer to monito
compliance with conditions of supervised release), Special Condition 7 (requiring
defendant to notify probation officer of significant change in economic circumstance),
Special Condition 8 (requiring defendant to file accurate income tax returns and pay
all taxes, interest, and penalties required by law), and Special Condition 10
(requiring defendant to repay any financial condition that remains owing at the
commencement of supervised release at a rate of not less than 10% of after-tax
income) are all warranted.
The Probation Office recommends in Special Condition 15 that all of
defendant’s current and future employment be subject to Court approval to mitigate
third party risk. This condition is reasonably necessary to protect the public from
further crimes of defendant in light of defendant’s activities with Big Star Payments
and All in One Swipe.
The Probation Office recommends that defendant “not enter into any
agreement to act as an informer or special agent of a law enforcement agency without
the permission of the court.” (Special Condition 11). As the Seventh Circuit has noted,
a defendant acting as a confidential informant on supervised release is “generally
inconsistent” with the rehabilitative and reintegration efforts of the Sentencing
Guidelines because it keeps a defendant in the underground world of criminality at a
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time when that person is trying to change his/her life. See United States v. Kappes,
782 F.3d 828, 851 (7th Cir. 2015) (finding that the district court’s lack of findings to
support this condition was harmless because “acting as a confidential informant is
generally inconsistent with the rehabilitative and re-integrative goals of
supervision”).
The Probation Office’s proposed Special Condition 14 provides that defendant:
shall participate in a sex offender evaluation/assessment, which may include
psychological and physiological testing. The specific program and provider will
be determined by a probation officer. If treatment is deemed necessary by the
provider, the offender shall comply with all recommended treatment, which
may include psychological and physiological testing.
The government agrees that a sex offender evaluation/assessment is warranted.
Defendant did not complete such an evaluation/assessment in connection with his
Cook County case. Given that defendant’s Cook County case involved images of a
victim who does not appear to have been fully alert during the filmed sexual act, and
given that defendant has been accused of nonconsensual dissemination of sexual
images by two other women, an assessment to evaluate whether defendant might
benefit from treatment would promote the policy goals of protecting the public and
defendant’s rehabilitation. See United States v. Russell, 81 F.4th 726, 730 (7th Cir.
2023) (finding sex offender assessment warranted in sentencing for fentanyl
distribution based on conduct underlying a previous domestic battery/physical
contact conviction). The government submits that the Special Condition should be
narrowly tailored to include only the evaluation/assessment. In the event the
assessment determines that defendant would benefit from treatment, the matter
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should then be brought back before the Court so defendant has the opportunity to be
heard and a decision can be made as to whether any treatment is necessary.
VIII. CONCLUSION
For the reasons set forth above, the government respectfully submits that a
sentence of 108 months’ incarceration followed by three years of supervised release is
warranted in this case.
RESPECTFULLY SUBMITTED,
ANDREW S. BOUTROS
UNITED STATES ATTORNEY
Dated: February 24, 2026 By: /s/ Jeffrey S. Snell
JEFFREY S. SNELL
United States Attorney=s Office
219 S. Dearborn, Suite 500
Chicago, Illinois 60604
Telephone: 312-469-6308
Email: Jeffrey.Snell2@usdoj.gov
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