Order Affirming Detention — United States v. Gladys Harun

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An order of the U.S. District Court for the Southern District of Georgia, filed August 18, 2022 as Document 36 in United States v. Gladys Harun, No. 3:22-cr-00009-DHB-BKE, ruling on the defendant's appeal of the denial of bond. The defendant is charged with one count of wire fraud under 18 U.S.C. § 1343 in connection with a Paycheck Protection Program loan application. Reviewing de novo, the court finds that the weight of the evidence and her history and characteristics favor detention, citing her ties to Kenya, a $100,000 cash withdrawal after she learned she was a target of investigation, and an undisclosed plan to travel. It also finds clear and convincing evidence that she is a danger to the community. The order affirms the Order of Detention entered July 21, 2022 and directs that she be detained pending trial.

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Case 3:22-cr-O0009-DHB-BKE Document 36 Filed 08/18/22 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA U.S.
DUBLIN DIVISION

UNITED STATES OF AMERICA *
*
V's * CR 322-009
a
GLADYS HARUN -
ORDER

Defendant Gladys Harun has appealed the denial of bond pending
trial of the case. Defendant has been charged with one count of
wire fraud, in violation of 18 U.S.C. § 1343, in connection with
an application to obtain a loan through the Paycheck Protection
Program (“PPP”) .}

On July 8, 2022, the United States Magistrate Judge conducted

a detention hearing. At the conclusion, the Magistrate Judge
granted the Government’s oral motion for detention. A written
Order would follow on July 21, 2022. (Doc. No. 22.) Thereafter,
Defendant appealed the Detention Order to this Court. In her

appeal, Defendant does not necessarily dispute the findings of

fact of the Magistrate Judge. Rather, Defendant challenges the

1 Specifically, Defendant is charged with filing a PPP loan
application which fraudulently represented that her business
averaged $199,965 in monthly payroll. Defendant submitted altered
and false IRS Forms and other records in support. Ultimately,
$300,000 was deposited into a Georgia bank account controlled by
Defendant. (See Indictment, Doc. No. 1.)

Case 3:22-cr-O0009-DHB-BKE Document 36 Filed 08/18/22 Page 2 of 9

“unsavory” inferences drawn from those facts, stating that the
Magistrate Judge went to “exorbitant measures to justify
detention” of Defendant. (Appeal, Doc. No. 21, at 6.) Defendant
contends that the Magistrate Judge’s findings of fact are
insufficient to warrant detention under the applicable standards.
Defendant further contends that if viewed objectively and
practically, Defendant’s circumstances would not meet the criteria
for detention.

The Court has reviewed the Detention Order, Defendant's
objections and the Government’s response, the partial transcript
and evidence from the detention hearing as well as other documents
of record. The Court sets forth here the salient facts as revealed
from these sources.

Defendant was born and raised in Kenya. She came to the United
States in 2005 and was naturalized in 2011; she retains a dual
citizenship. She has six siblings and a father in Kenya, she
visits on a yearly basis, and she sends money to Kenya.

Since January 2016, she has worked for Jackson Hewitt Tax
Service as a franchise owner; she now owns 12 Jackson Hewitt
locations. On May 22, 2022, agents with the IRS and Secret Service
interviewed Defendant at her workplace, at which time she was
served with a letter from the United States Attorney’s Office
advising her that she was a target of federal grand jury

investigation into various fraud related crimes. The interview

Case 3:22-cr-00009-DHB-BKE Document 36 Filed 08/18/22 Page 3 of 9

concluded at approximately 2:15 p.m. Nearly two hours later,
Defendant withdrew $100,000 in cash from her bank account at Truist
Bank.

On May 17 and May 20, 2022, Defendant sent a text message to
a witness that at the very least may be construed as coercive.
(See Det. Hrg. Ex. 12, Doc. No. 24.) In any event, the witness
was concerned enough to alert law enforcement.

On June 27, 2022, Defendant and her attorney attended a
proffer with agents and the U.S. Attorney's Office. Defendant
vacillated in her testimony about her various PPP applications.
At the conclusion of the proffer, the U.S. Attorney’s Office
informed Defendant that she was likely to be charged. According
to Plaintiff’s own testimony, she and her attorney then discussed
the fact that she must notify her attorney and the U.S. Attorney’s
Office prior to traveling. (Det. Hrg. Tr., Doc. No. 24, at 13.)
Yet, Defendant did not disclose that only five days earlier, her
divorce attorney notified the state court and Defendant’s
husband’s counsel that Defendant would not be able to attend a
hearing on July 29, 2022 because she would be out of the country
from July 6 to August 6.

Upon a probable cause determination that she had committed
federal crimes, Defendant was arrested on July 5, 2022. The United
States Probation Office interviewed her on July 6, 2022. At that

time, Defendant reported that she had no history of mental health

Case 3:22-cr-O0009-DHB-BKE Document 36 Filed 08/18/22 Page 4 of 9

treatment. (See Doc. No. 10.) Yet, less than three months
earlier, she had filed an affidavit in a civil case in the Middle
District of Georgia from Dr. Thomas Sachy, who stated that
Defendant had been treated as a psychiatric patient by him since
January 2016, had received continuous psychiatric care since 2014,
and had been diagnosed with two psychiatric disorders. (Det. Hrg.,
Ex. 13.) The Probation Office also reported Defendant’s monthly
income as $66,667, derived from Defendant’s report that her income
is $800,000 a year. (Doc. No. 10.) When asked about her income,
Defendant claimed that she did not remember discussing monthly
income with the Probation Officer, only her annual business income.
(Det. Hrg. Tr. at 30.)

The Government also offered a motion requesting’ the
appointment of counsel filed by Defendant in the Middle District
of Georgia in a civil case on September 10, 2021. (Det. Hrg. Ex.
13.) In the motion, Defendant swore that she had no money to hire
an attorney and that she was presently unemployed because she
suffered a psychological illness and was unable to work. (Id. )
Yet, less than three months earlier, Defendant obtained a PPP loan
of $299,919 by representing that she was the sole owner of business

with more than 20 employees and more than $119,000 on average

monthly payroll. In fact, Defendant testified at her detention
hearing: “But by the grace of God, in 2020 and 2021, my business
had grown, so I had many employees.” (Det... Hrg. Tr. at. 20...)

Case 3:22-cr-O0009-DHB-BKE Document 36 Filed 08/18/22 Page 5 of 9

Defendant attempted to justify the inconsistency by claiming that
her work is seasonal. (Id. at 32-33.)

Finally, in a civil action filed by Defendant in this
District, she filed an application to proceed in forma pauperis
on December 2, 2019, in which she states that she had no income
during the prior twelve months and had not worked for four years.

Chege v. Ga. Dep’t of Juvenile Justice, Case No. 3:18-CV-51, Doc.

No. 25 (S.D. Ga. Jul. 6, 2018). Yet, these statements are directly
contradicted by her sworn statements to the Probation Office that
she had been gainfully employed during this same time period, by
a loan application to Wells Fargo representing that she paid
$18,413 in average monthly payroll for a period covering 2019, and
by a loan application to Truist Bank representing that she was an
independent contractor who had $99,456 in gross income in 2019 and
was paid $95,000 from Jackson Hewitt that year. Further, Defendant
testified that she bought a home in Byron, Georgia in 2019 and was
current on her mortgage. (Det. Hrg. Tr. at 9=10;,)

The Court reviews a Magistrate Judge’s detention or release

order de novo. United States v. King, 849 F.2d 485, 489-91 (11

Cir. 1988). The Bail Reform Act provides that a defendant may be
detained pending trial only if a “judicial officer finds that no
condition or combination of conditions will reasonably assure the
appearance of the person as required and the safety of any other

person and the community.” ie 0.8.6. § 3142 be) (1). This rule

Case 3:22-cr-00009-DHB-BKE Document 36 Filed 08/18/22 Page 6 of 9

implies a presumption in favor of release in many cases including
this one. To overcome this presumption, the Government must prove
dangerousness by clear and convincing evidence and court

appearance by a preponderance of the evidence. United States v.

Quartermaine, 913 F.2d 910, 917 (11%8 Cir. 1990).

The Magistrate Judge correctly identified the following
factors that must be considered in determining whether detention
is warranted: (1) the nature and circumstances of the offense
charged; (2) the weight of the evidence; (3) the history and
characteristics of the person; and (4) the nature and seriousness
of the danger to any person or the community posed by the person’s
release. (See Order of Detention at 7 (citing 18 U.S.C. §
3142 (g) (1) -(4)).) In reviewing this case de novo, the Court
reaches the same conclusions of the Magistrate Judge and therefore
affirms his decision to detain Defendant pending trial.

In particular, while the first factor - the nature and
circumstances of the offense charged - weighs against detention,
the remaining factors decidedly weigh in favor of detention. With
respect to the weight of evidence, the Magistrate Judge heard
testimony of two investigative federal agents who outlined not
only the offense ultimately charged,? but discussed several other

PPP applications with differing and fraudulent information about

2 The grand jury did not indict the case until July 13, 2022.

Case 3:22-cr-O0009-DHB-BKE Document 36 Filed 08/18/22 Page 7 of 9

the number of employees and the monthly payroll of Defendant’s
business. The agents also explained that when Defendant was asked
to provide supporting documentation through a grand jury subpoena,
she was unable to do so. There was also evidence that Defendant
had submitted PPP loan applications in the name of other
individuals.3 The Court has little trouble counting this factor
against Defendant, and Defendant does not seriously dispute this.

The Court now turns to the history and characteristics of
Defendant. While her appeal focuses on Defendant’s background in
terms of her familial and residential ties to the community, her
work history, her six minor children,4’ and her lack of criminal
record, her deceitful character is readily revealed by the evidence
and her own testimony. With this in mind, the Court has no
confidence that Defendant will not flee based on her substantial

and continuing ties to Kenya, her withdrawal of $100,000 two hours

3 The Government discusses in brief the allegations of the Secret
Service that Defendant received approximately $137,500 in grants
and loans under the Economic Injury Disaster Loan (“EIDL”) program.
One allegation states that an application for an EIDL loan was in
the name of a person who had died the day before the application
was created and submitted. Because the Magistrate Judge did not
rely in any way on the EIDL allegations, the Court does not
consider them either.

4 The detention hearing transcript reveals that Defendant told
the Court she had no family in America at her initial appearance.
When asked about this statement, Defendant qualified that she does
not have “immediate family” in America. (Det. Hrg. Tr. at 14.) A
husband, albeit estranged, and six minor children are immediate
family.

Case 3:22-cr-00009-DHB-BKE Document 36 Filed 08/18/22 Page 8 of 9

after she learned she was the target of a federal investigation,
and the non-disclosure of her plan to travel to Kenya in July.
Thus, evidence of Defendant’s character weighs in favor of a
finding that she is more likely than not to flee. Further, given
her resources and foreign ties, the Court cannot fashion conditions
that will reasonably assure her appearance.

Finally, Defendant takes great issue with the Magistrate
Judge’s determination that she is a threat to the community,
contending that his conclusion eviscerates the applicable legal
standard because anyone charged with a financial crime who has
access to a computer and interacts with the community would be
detained. The Court, however, will not as readily discount the
harm that someone with Defendant’s apparent aptitude for deceit,
access to personal identify information of potentially hundreds of
people, and desperation (as already demonstrated with the
withdrawal of $100,000 and undisclosed trip) could cause.° Add to
this equation the apparent attempt to coerce or intimidate a
witness, and the Court concludes that there is clear and convincing
evidence that Defendant is a danger to the community.

In short, Defendant’s appeal seemingly contends that the

Magistrate Judge had a result-oriented approach to his analysis.

> As aptly noted by the Magistrate Judge, Defendant owns 12
franchise tax businesses so “there is significant opportunity
there for financial fraud to occur.” (Det. Hrg. Tr. at 36.)

8

Case 3:22-cr-O0009-DHB-BKE Document 36 Filed 08/18/22 Page 9 of 9

The Court disagrees and in fact concludes that any thoughtful and
reasonable analysis of the evidence results in an order of
detention.

Accordingly, after a de novo review of the case, the Court
AFFIRMS the Magistrate Judge’s Order of Detention entered on July
21, 2022. Defendant Gladys Harun shall be detained pending trial
or some other resolution of the charges against h

a
ORDER ENTERED at Augusta, Georgia, this PPR 0 August,

2022.

UNITED a a JUDE

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