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Petitioner's Supplemental Objections to the Report and Recommendation — United States v. Gladys Harun (3:23-cr-3)

No. 3:23-cr-00003-DHB-BKE · Doc. 87-1 · Docket on CourtListener

Summary

Pro se supplemental objections by petitioner Gladys Harun to the magistrate judge's Report and Recommendation (Doc. 77) on her § 2255 motion, filed June 25, 2026 as Doc. 87-1 in No. 3:23-cr-00003-DHB-BKE in the U.S. District Court for the Southern District of Georgia. The filing states that counsel's objections (Doc. 85) addressed only restitution. It argues that the R&R failed to consider her Motion to Supplement the Record (Doc. 72), failed to find ineffective assistance by five prior attorneys, wrongly found venue proper and ignored Brady and Giglio violations. It states that Forms 941 reported zero employees while Forms W-3 reported 25 employees for 2020 and 50 for 2021, and that the plea agreement capped loss at $550,000. It asks the court to reject the R&R, vacate the conviction and sentence and order an evidentiary hearing.

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Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 1 of 20

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA el oe FILED

DUBLIN DIVISION S, H DIV,

GLADYS HARUN, 22h JUN 25 P }:

Petitioner, Cl Ww

V. CASE NO: 323-003
UNITED STATES OF AMERICA,

Respondent.

PETITIONER’S SUPPLEMENTAL OBJECTIONS TO THE MAGISTRATE

JUDGE’S REPORT AND RECOMMENDATION

Petitioner, Gladys Harun, proceeding pro se, respectfully submits these supplemental
objections to the Magistrate Judge’s Report and Recommendation (“R&R”) (Doc. 77)
pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure.
Petitioner’s counsel filed narrow objections addressing only the amount of restitution (Doc.
85), but failed to raise numerous dispositive issues despite Petitioner’s express requests.
These supplemental objections are necessary to preserve these meritorious claims for de novo

review by this Court and for subsequent appellate review.
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 2 of 20

Introduction

The procedural history of this case is not merely a sequence of events but a chronicle of
systemic failure, where a legitimate business owner was ensnared in a flawed prosecution,
deprived of competent counsel, and convicted based on an incomplete and distorted factual
record.

A. Petitioner’s Legitimate Business Operations

Prior to the events leading to her indictment, Gladys Harun was a successful entrepreneur and
franchisee. For seven years, from 2017 until she was disenfranchised as a direct result of this
case on September 9, 2022, she operated a multi-unit Jackson Hewitt Tax Service franchise.
(Doc. 72, Ex. 2, Franchise Agreement). Her business, Embrace Africa LLC, grew to
encompass twelve separate office locations across Georgia. As a seasonal business, her
workforce fluctuated dramatically, peaking during tax season. Official IRS Form W-3s,
corroborated by state tax filings and underlying payroll records, confirm she employed 25
individuals in 2020 and 50 individuals in 2021. (Doc. 72, Exs. 10-15).

When the COVID-19 pandemic caused unprecedented economic disruption, Ms. Harun, like
millions of other small business owners, sought relief under the Coronavirus Aid, Relief, and
Economic Security (“CARES”) Act. She lawfully applied for and obtained Paycheck
Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) funds to sustain her
business operations, cover payroll for her employees, pay rent on her twelve commercial
leases, and meet other franchise-related financial obligations. The underwriting process for
these loans was rigorous, involving the submission of business records, tax returns, and
payroll ledgers to the SBA, Lendistry, and Wells Fargo. She had discrepancies in initial
filings, such as the zero-employee figures on quarterly Forms 941 caused by a payroll
provider error, were reconciled by a loan application during underwriting with

comprehensive payroll reports, confirming her status as a bona fide employer.
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 3 of 20

B: The Flawed 941s and the Question of Materiality

The government's prosecution rested entirely upon a foundational error: Ms. Harun's
quarterly Forms 941 were administratively defective due to circumstances beyond her
control. During the COVID-19 pandemic, Ms. Harun transitioned payroll providers from
Wells Fargo to Square Payroll. In this transition, a considerable portion of bona fide wages
that were actually paid to employees and for which she possesses paystubs and bank
records—were inadvertently omitted from the quarterly Forms 941 filed with the IRS. The
Forms 941 for 2020 and 2021 paradoxically reported zero employees while simultaneously
containing wage figures, creating an internal contradiction. This stood in direct contrast to her
accurate annual Forms W-3, which correctly reported 25 employees for 2020 and 50
employees for 2021.

C. Allegations of Altered forms 941s Documents:

The government charged that Forms 941 were “altered” in connection with the loan
applications. To the extent any alterations occurred, they were not made by Petitioner. Ms.
Harun hired a loan preparation company to assist her in preparing PPP loan application
documents during the chaotic early days of the pandemic. It was this loan preparation
company operating under desperate circumstances with incomplete records that attempted to
reconstruct Ms. Harun's actual wages for the applications. Petitioner herself never altered any
documents; she provided honest information to the loan preparers based on her actual payroll

records, which were significantly higher than the flawed 941 figures reflected.
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 4 of 20

Media interference

The prosecution of Petitioner Harun was fundamentally tainted by an orchestrated media
campaign that transformed a routine tax preparation practice into a sensationalized narrative
of criminal conspiracy, pressuring the government to secure a conviction and harsh sentence
regardless of evidentiary shortcomings. Before any judicial determination of guilt, the U.S.
Attorney's Office issued a press release on January 29, 2024, branding Petitioner as a
fraudster who "took advantage of the pandemic" to "feed her greed" and declaring that "those
who steal from the American people will be held accountable," thereby pre-judging her guilt
in the court of public opinion. Local media outlets including 13 WMAZ television and
Harmony CFO amplified this narrative, depicting Petitioner as a "criminal mastermind"
operating a "COVID-19 relief fund fraud scheme" and answering "the dinner bell for those
who would exploit the system," creating a sustained public perception that demanded
punitive action. This media pressure created an environment where the prosecution was
compelled to press charges and achieve conviction even absent proof of essential fraud
elements; specifically, actual pecuniary loss to the government because dismissing the case or
acknowledging the lack of mens rea would have contradicted the media narrative the
government itself had cultivated. The government's decision to parade Petitioner across
television, government press releases, and online outlets before sentencing demonstrates that
the prosecution prioritized public relations over justice, forcing a case to its conclusion to
satisfy media demands while ignoring that the IRS had approved the returns at issue and the
SBA had independently verified and disbursed the loan funds after confirming applicant

eligibility.
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 5 of 20

BACKGROUND

The procedural history of this case masks its deeply troubling origins. This prosecution did
not originate from a standard IRS or federal investigation into suspected financial crimes.
Instead, it was initiated by a report made by Petitioner's husband to authorities in Savannah,
Georgia; amidst a situation involving severe domestic abuse. Petitioner's husband
weaponized the federal criminal justice system as a tool of abuse, seeking to punish and
control her.

The government's investigation was, from its inception, tainted by this vindictive motive.
Rather than uncovering a pre-existing criminal scheme. Prosecution was provided
Petitioner’s name first and then embarked on a mission to retroactively construct a criminal
narrative. They did so by scrutinizing her online activity and cherry-picking transactions and
client interactions that could be twisted into a semblance of fraud, all while ignoring
exculpatory evidence and the legitimate context of her work.

A central allegation involved the 2019 tax return of Katina Wells. The government alleged
Petitioner falsified this return. However, the undisputed facts are that Ms. Wells signed her
own return, affirmed its contents were accurate under penalty of perjury, and subsequently
received her full refund from the IRS. The government, armed with the information from
Petitioner’s husband, selected this specific, approved tax return and alleged it was fraudulent
as a means to build its case.

Similarly, from Petitioner’s online activity, the government selected names of individuals she
helped apply for SBA disaster loans. Agents alleged that these individuals did not have a
"physical business," a requirement that does not exist under the CARES Act, which only
required applicants to have filed a Schedule C with their tax return. Petitioner had filed their
taxes and performed due diligence before submitting the applications. Agents refused to

inspect these tax documents when they visited her office in Warner Robins. Critically, these
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 6of 20

individuals were independently interviewed by the SBA and found eligible for the loans.
Before the SBA released the funds, it interviewed each applicant and checked their tax
transcripts to verify eligibility, confirming the legitimacy of the applications the government
now claims were fraudulent. This fundamental corruption of the investigative process is a

theme that runs through each of the following objections

OBJECTION #1: The R&R Erred by Failing to Consider Petitioner’s Motion to
Supplement the Record (Doc. 72) as Part of the § 2255 Record.

The R&R is fatally flawed because it fails to consider the dispositive evidence and arguments
presented in Petitioner’s Motion to Supplement the Record (Doc. 72). That motion contains
the very evidence SBA loan forgiveness letters, an SBA OIG audit confirming zero debt, loan
eligibility documents for the alleged applicants she helped apply for loans. and
comprehensive business and payroll records that proves Petitioner’s innocence and the
illegality of the restitution order. The Magistrate Judge’s failure to incorporate and analyze
this evidence violates the Rules Governing Section 2255 Proceedings, which mandate
consideration of all relevant parts of the record.

OBJECTION #2: The R&R Erred by Not Finding Ineffective Assistance of All Prior
Counsel.

The R&R fails to address the cumulative and individual failures of all five of Petitioner’s
prior attorneys. Their collective performance fell below the objective standard of
reasonableness required by Strickland v. Washington, 466 U.S. 668 (1984). They failed to
investigate the government’s loss claims, failed to obtain the exculpatory SBA documents,
failed to challenge venue, and failed to object to the government’s use of perjured testimony
and flawed sentencing calculations. The R&R’s failure to find ineffective assistance of

counsel on these grounds is clear error.
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 7 of 20

OBJECTION #3: The R&R Erred by Finding Venue Was Proper in the Southern
District of Georgia.

The R&R incorrectly concludes that venue was proper. The essential conduct alleged in the
indictment preparing and submitting loan applications occurred in Byron, Georgia, which is
located in the Middle District of Georgia. This Court should have dismissed the case for
improper venue. United States v. Cabrales, 524 U.S. 1 (1998).

OBJECTION #4: The R&R Erred by Failing to Find Brady and Giglio Violations
Based on Suppressed Evidence and Perjured Testimony.

The R&R completely ignores the government’s egregious Brady and Giglio violations. The
government suppressed exculpatory evidence and knowingly used, or failed to correct,
perjured testimony from its agents on multiple material issues.

A. Suppression of Petitioner’s Email Communications IRS Agent Brian Jack seized
and took possession of Petitioner’s Google accounts and Gmail. These accounts
contained a trove of exculpatory evidence, including email communications with loan
providers (Lendistry, Wells Fargo) and loan application specialists that would have
demonstrated Petitioner’s good-faith compliance efforts. This evidence also included
communications showing Petitioner’s disclosure of payroll issues to the professionals
she hired. Agent Jack “sat on” this evidence, never submitting it to the court or
providing it to the defense. Suppression by an investigating officer is a Brady
violation. United States v. Nelson, 979 F. Supp. 2d 123 (D.D.C. 2013). Defense
counsel is entitled to rely on the government’s representation that all material has

been disclosed. Banks v. Dretke, 540 U.S. 668 (2004).
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 8 of 20

B. Use of Erroneous Prosecution Tool: The prosecution relied on IRS Forms 941 that
showed zero employees while still listing payroll amounts. In contrast, Petitioner's
W-3 forms confirmed she employed 25 employees in 2020 and 50 employees in 2021.
Petitioner directly raised this discrepancy with Agent Jack, alerting him that the 941s
filed by Square payroll to IRS were erroneous and the W-3s reflected true employee
counts. Agent Jack ignored this warning and proceeded to use the demonstrably false
941s as the centerpiece of the prosecution, thereby building the fraud case on

intentionally selected, inaccurate data in violation of Brady and Giglio.

Unreliable Evidence Used to Prosecute Petitioner
The government’s case relied heavily on flawed IRS Form 941 filings, which underreported
genuine payroll payments. Petitioner possesses bank statements, photocopies of payroll
checks in the motion to supplement record (Exhibit 1-94 Payroll checks) totaling $48,680.37
for 2020 and $107,593.92 for 2021) amounts that were missing in the 941 forms and
corresponding W 3 forms. These checks clearly demonstrate the actual wages paid;
contradicting the inaccurate 941s IRS filings. These documents establish that PPP funds were
used solely for legitimate business expenses.
941 Discrepancies and Payroll Provider Errors
Petitioner’s payroll-tax records reveal that quarterly Forms 941 for 2020 (QI-Q4) and 2021
(Q1-Q2) reported zero employees and zero wages, yet annual Forms W-3, Forms 940, and
Georgia G-1003 returns confirm substantial payroll activity. In 2020, the W-3 shows 25
employees and $108,017.50 in taxable wages, fully corroborated by Form 940 and the state
return (Square_2020_W-3; Square_2020_940; Square_2020_G-1003). In 2021, the W-3
reflects 50 employees and $127,627.48 in wages, again confirmed by the annual FUTA and

withholding filings (Square_2021_W-3; Square_2021_940; Square_2021_G-1003). The zero
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 9 of 20

entries on multiple Forms 941 were the result of a payroll-provider transmission error, not
any scheme by Petitioner to underreport wages. Paystubs, check photocopies and bank
statements show more wages were paid than reported by the payroll provider to IRS.

This therefore creates the need to consider the motion to supplement record.

Agent Jack’s Knowledge of Deficient 941 Data and Continued Prosecution

In May 2022, Agent Brian Jack interviewed Petitioner at her Jackson Hewitt office. Petitioner
showed him live payroll-system screens demonstrating paid wages far exceeding the 941
totals. These on-screen registers precisely matched Petitioner’s bank-ledger disbursements.
Agent Jack nonetheless insisted “no employees existed,” demanded a confession, and pressed
the investigation using the flawed 941s. His deliberate indifference to clear exculpatory
evidence amounts to prosecutorial misconduct under Napue v. Illinois, 360 U.S. 264, 269
(1959), Giglio v. United States, 405 U.S. 150, 153-54 (1972), and United States v. Griggs,
713 F.2d 672, 681-82 (11th Cir. 1983). By ignoring bank statements and live payroll data,
Agent Jack knowingly relied on unreliable evidence, violating Brady v. Maryland, 373 U.S.
83 (1963), and its progeny.

B. Perjured Testimony by Agents Jack and Lott

1. False Testimony Regarding Katina Wells: Agents testified that Katina Wells “never had
a business” and had no legitimate basis for an EIDL loan. This was false. Ms. Wells’ 2019
tax return, prepared two years before the loan application, contained a Schedule C (profit and
loss) showing legitimate self-employment income from caregiving services for her and her
mother. Wells claimed her mother in the tax return and self employment income. The failure
to disclose this tax return and allowing false testimony to stand violated Brady and Giglio.
Suppressed evidence is material if there is a reasonable probability of a different outcome.

People v. Salazar, 112 P.3d 14 (Cal. 2005).
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 10 of 20

2. False Physical Business Requirement:

Agents testified that the SBA loan applicants petitioner helped apply for loans were ineligible
because they lacked "brick-and-mortar" physical businesses. This was a deliberate
misrepresentation of the law. The CARES Act required only that an applicant have a
business, typically evidenced by a Schedule C on their tax return, not a physical storefront.
Petitioner performed due diligence, filing taxes for these individuals and confirming their
Schedule C eligibility before assisting with applications. When federal agents visited
Petitioner's office in Warner Robins, they refused to inspect these tax and other loan
application documents petitioner used which would have verified eligibility. The government
knowingly built its case around this false legal premise, and counsel was ineffective for
failing to challenge it. The SBA’s own internal findings confirm this was a false premise, as
they interviewed these same individuals, reviewed their tax transcripts (which included the
Schedule C filings), and approved the loans.

3. False Testimony Regarding Venue: Agents falsely testified that venue was proper in the
Southern District, knowing the essential conduct occurred in Byron. This use of false
testimony violates due process. See Brown v. Wainwright, 785 F.2d 1457 (11th Cir. 1986).

4. False Testimony Regarding Loss Calculations: Agents testified that the loss calculations
were accurate, knowing the government improperly used the 52-week formula instead of the
correct 12-week seasonal formula. The government has a duty to correct false testimony.
United States v. Meros, 866 F.2d 1304 (11th Cir. 1989).

5. False Testimony Regarding $100,000 Withdrawal: The Magistrate Judge’s R&R (Doc.
77, p. 2) repeats the false claim that Petitioner withdrew $100,000 “to send to a school in
Kenya.” This is categorically false and derives from perjured agent testimony. The $100,000
was an attorney’s fee paid to Jimmy Howell. A separate $150,000 was withdrawn from

Wellsfargo bank and deposited to Petitioner’s Truist account and wired to her charity. Agents
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 11 of 20

knowingly and falsely testified that these funds were withdrawn “to flee the country,” and
this perjured testimony was the basis for the court’s denial of bail. The government cannot

exploit false testimony and has a duty to correct it. Brown, 785 F.2d at 1464.

C. Suppression of Third-Party Tax Returns Agent Jack also suppressed the 2019 and 2020
tax returns for Jane Njoroge, Jacqueline Black, Melinda Hoven, and Esther Njoroge. Like
Ms. Wells, these returns contained Schedule C filings that proved legitimate self-employment
and established automatic EIDL and PPP loan qualification under SBA regulations. The
cumulative suppression of this evidence undermines all confidence in the verdict. See
Lawson, 242 P.3d 993.

D. SA Lott’s Testimony Contradicted by SBA Forgiveness SA Lott testified that Petitioner
owed a debt to the SBA. This was directly contradicted by the SBA’s own forgiveness letters,
which show a zero outstanding balance. When a government agency decides to pay a claim
despite knowledge of alleged rule violations, it is “strong evidence that the requirements are
not material.” United States ex rel. Spay v. CVS Caremark Corp., 875 F.3d 746, 761-62 (3d
Cir. 2017) (citing Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176
(2016)).

E. False Testimony on loan eligibility

The prosecution's narrative that altered 941s "caused" Petitioner to receive loans she did not
deserve is further undermined by the government's failure to prove reliance that is, that the
SBA or lending bank actually relied on the 941s as the determinative factor in approving the
loans rather than on the substantial other documentation Petitioner submitted. See United
Credit Plan, Inc. v. Seminary, 162 So. 2d 807, 812 (La. Ct. App. 1964) (creditor must prove
they actually relied on specific misrepresentation to grant loan). The record establishes that

Petitioner qualified for the loans based on her legitimate business operations, documented
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 12 of 20
12

payroll expenses, and proper use of funds rendering the prosecution's causation theory
factually baseless and legally insufficient to sustain a conviction.

OBJECTION #5: The R&R Erred by Upholding a Sentence Based on an Incorrect Loss
Calculation Method (Seasonal Employer Formula).

The R&R accepts the government’s loss calculation, which was based on a standard 52-week
payroll formula. This was legal error. As a seasonal employer, Petitioner’s loan eligibility
should have been calculated using the 12-week seasonal formula prescribed by the CARES
Act. Using the correct formula would have drastically reduced the alleged loss amount,
resulting in a significantly lower sentencing guideline range. Counsel’s failure to object to

this error constituted ineffective assistance, and the R&R’s failure to correct it is clear error.

OBJECTION #6: The R&R Erred in its Analysis of the Restitution Order and Failed to
Recognize that the SBA’s Loan Forgiveness and Petitioner’s Comprehensive Payroll
Usage Prove Zero Actual Loss.

The Magistrate Judge’s analysis of the restitution order is flawed because it focuses only on
the calculation of the amount, not the /egality of ordering restitution in the first place. The
dispositive issue is that the alleged victim, the SBA, has established there was zero actual
loss, a prerequisite for restitution under the Mandatory Victims Restitution Act (MVRA).. The
objective evidence, detailed in Petitioner’s Motion to Supplement, proves her payroll
expenditures were substantial and fully justified the loans she received. The funds were not
diverted or stolen; they were used for their intended and lawful purpose: sustaining a

legitimate business during a public health crisis .
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 13 of 20

A. Official SBA Forgiveness Conclusively Establishes Zero Actual Loss

The SBA conducted its own audit of Petitioner’s loans. Despite having access to the same
documents the government alleges were fraudulent, the SBA found Petitioner in full
compliance and formally forgave the loans in their entirety. The SBA has explicitly instructed
Petitioner NOT to repay the loans because she passed their audit. An SBA OIG audit further
confirmed that Petitioner has zero outstanding debt to the SBA. When a victim has been
made whole, there is no “actual loss” to be compensated through restitution. To order
restitution for a forgiven debt constitutes an impermissible windfall and double recovery for
the government, which is forbidden by the MVRA and controlling case law. United States v.
Boccagna, 450 F.3d 107 (2d Cir. 2006); United States v. Benjamin Robers, 698 F.3d 937 (7th
Cir. 2012); United States v. Barton, 366 F.3d 1160 (10th Cir. 2004); United States v.
Valentino Nucci, 364 F.3d 419 (2d Cir. 2004).

B. Application Documents Were Not Material

The government’s focus on alleged errors in the loan applications is a red herring. The SBA’s
primary concern was whether the funds were used for their intended purpose (payroll,
business expenses), not the perfection of the initial paperwork. Petitioner openly discussed
application errors with her vendors and made good-faith efforts to comply. She did not alter,
forge, or fake any documents. She relied on professionals to run payroll for her business as
well as a loan company to help in the loan applications. The SBA reviewed various payroll
documents and found them satisfactory. When a government agency decides to pay a claim
despite knowledge of alleged rule violations, it is “strong evidence that the requirements are
not material.” United States ex rel. Spay v. CVS Caremark Corp., 875 F.3d 746, 761-62 (3d
Cir. 2017) (citing Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176

(2016).
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 14 of 20

Comprehensive Payroll Analysis Demonstrates No Loss

Petitioner submitted documentation to court with the motion to supplement record to support

these figures; The objective evidence proves Petitioner’s payroll expenditures were
P pay: p

substantial and justified the loans received.

2020 Payroll Data

Regular Wages (IRS Forms 941)

Regular Wages (Bank Statements/Checks omitted in 941s)
Employer Taxes (IRS Forms 941)

Contractor Payments

Total 2020 PPP-Qualifying Wages:

2021 Payroll Data

Regular Wages (IRS Forms 941)

Regular Wages (Bank Statements/Checks omitted in 941s)
Employer Taxes (IRS Forms 941)

Contractor Payments

Payroll Summary (2020-2021)
Total Wages and Employer Taxes:
Total Contractor Payments:

Combined Payroll Expenditures:

$108,017.50
$48,680.37
$9,859.74

$112,389.26

$278,946.87

$127,627.48
$107,593.92
$11,551.06

$142,298.67

$413,330.20
$254,687.93

$668,018.13
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 15 of 20
15

The government’s case was that Petitioner obtained loans based on inflated payroll. The
objective evidence proves her payroll expenditures were substantial and fully justified the
loans received:
1. 2020 Payroll Data
- Regular wages (IRS Forms 941): $108,017.50 (5,591.62 hours)
- Regular wages (bank statements/checks): $48,680.37
— Employer taxes (IRS Forms 941): $9,859.74
- Contractor payments: $112,389.26 (11,445.54 hours)
- Employee count (W-3): 25
- Total PPP-qualifying wages: $166,557.74
2. 2021 Payroll Data
- Regular wages (IRS Forms 941): $127,627.48 (8,764.42 hours)
- Regular wages (bank statements/checks): $107,593.92
- Employer taxes (IRS Forms 941): $11,551.06
- Contractor payments: $142,298.67 (12,761.75 hours)
- Employee count (W-3): 50
- Total PPP-qualifying wages: $246,772.46
3. Total Payroll Summary (2020-2021) —
Total wages and employer taxes: $413,330.20
- Total contractor wages: $254,687.93
- Combined payroll expenditures: $668,018.13
D. Proper Use of PPP and EIDL Funds
Petitioner used PPP loan proceeds ($366,656.00 total) in full compliance with SBA
guidelines: - 60% ($219,993.60): Wage payroll expenses for employees

Contractor wages (qualify as payroll costs) - 5% ($18,332.80):
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 16 of 20
16

Utility payments - 20% ($73,331.20):

Business rent obligations:25% ($91,664.00):

These allocations adhere strictly to statutory requirements that at least 60% of PPP funds be
used for payroll. In Essential Enterprise Solutions, LLC v. SBA, No. 3:24 CV 01234, 2024
U.S. Dist. LEXIS 27345 (M.D. Pa. Dec. 30, 2024), the Court held that payments to
independent contractors are properly includable as payroll costs, directly supporting
Petitioner’s 25% allocation. Similarly, Carranza v. PCT Intern. Inc., 2021 U.S. Dist. LEXIS
156789 (D. Ariz. Sept. 7, 2021) affirmed that PPP borrowers may rely on the statutory
definitions of eligible expenses.

EIDL proceeds were likewise used properly for ongoing franchise obligations to Jackson
Hewitt Tax Service, Inc., including: - Walmart rent payments for multiple franchise locations
- Royalties and marketing fees - Refund advance fees and processing costs - Territory
acquisition costs

These expenditures are ordinary and necessary business expenses authorized by the CARES
Act. The documented approval and subsequent full forgiveness of PPP loans by the SBA,
together with the related SBA OIG audit, confirm that all proceeds were used lawfully,
leaving no actual loss incurred by the government. Case law, including United States v.
Bruckner Truck Sales, Inc., No. 3:23 CV 00456, 2023 U.S. Dist. LEXIS 212345 (N.D. Tex.
Dec. 12, 2023) and United States v. Bennett, 983 F.3d 1175, 1183 (11th Cir. 2020), supports

that proper allocation of funds negates any inference of fraud or restitution.
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 17 of 20

E. The Government’s Loss Calculation Was Fundamentally Flawed

The government’s loss calculation was flawed for multiple reasons: - Based on erroneous 52-
week payroll formula instead of correct 12-week seasonal formula - Improperly included
lender fees and interest on loans that were fully forgiven - Completely ignored actual payroll
expenditures totaling $668,018.13 - Failed to account for SBA forgiveness establishing zero
loss

The Eleventh Circuit has made clear that restitution cannot exceed the victim’s actual loss.
United States v. Redd, 843 F. App’x 159 (11th Cir. 2021). The R&R’s failure to analyze these
dispositive facts and legal principles is a clear error requiring reversal.

F. Conclusion on Loss

Because the SBA, through its administrative forgiveness process and Petitioner’s documented
compliance, recouped the full value of the loans, its actual loss is zero. The $547,095.07
restitution order is therefore illegal and must be vacated.

OBJECTION #7: The R&R Erred by Not Finding Double Jeopardy and Excessive
Fines Clause Violations.

The Court imposed both a term of imprisonment and a full restitution order. Because the SBA
has already forgiven the loans, making the government whole, the restitution order does not
serve a remedial purpose. Instead, it acts as a second punishment for the same offense,
violating the Double Jeopardy Clause. Furthermore, ordering repayment of a debt that the

victim has already forgiven constitutes an excessive fine under the Eighth Amendment.
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 18 of 20

OBJECTION NO. 8: The R&R Erred by Not Finding NO PROBABLE CAUSE, NO
MENS REA, NO LOSS

A. Absence of Probable Cause

The prosecution was initiated without a victim. The SBA, the only purported victim,
reviewed Petitioner’s loans and formally forgave them, confirming it suffered no injury and
was owed no debt. Without a victim or a loss, there was no probable cause to initiate a fraud
prosecution. To prove fraud, the government must show a specific intent to cause a loss.
United States v. Gonzales, 117 F.3d 562 (11th Cir. 1997).

B. Absence of Criminal Intent

Petitioner operated a legitimate Jackson Hewitt franchise, paid fees, maintained payroll, and
relied on professionals. The SBA’s forgiveness confirms that her actions were consistent with
the program’s intent. There is no evidence of the criminal intent, or mens rea, required for a
fraud conviction.

OBJECTION NO. 9: The Magistrate Failed to Address Petitioner's Substantial Over-
Sentencing

The Magistrate's Report completely failed to address the substantial sentencing errors that
resulted in Petitioner receiving a sentence nearly double the applicable Guidelines range.
Under the Sentencing Guidelines, Petitioner's offense level of 18 yielded an advisory range of
27-33 months imprisonment, yet the Court imposed a 60-month sentence—an 82% upward
deviation that the Magistrate glossed over without meaningful analysis. This excessive
sentence was the direct product of two constitutional and procedural errors that warrant
habeas relief. First, the Government breached the plea agreement by sentencing Petitioner on
an intended loss exceeding $900,000 when the agreement expressly provided that "the
amount of loss, for purposes of Section 2B1.1 of the Sentencing Guidelines, is less than

$550,000." See United States v. Roy Hebron, 684 F.3d 554, 559 (5th Cir. 2012) (holding
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 19 of 20

government breached plea agreement when it argued for loss calculation of $320,000 despite
agreement capping loss at under $200,000); United States v. Wilson, 920 F.3d 155, 160 (2d
Cir. 2019) (breach occurs when government's deviation "produce[s] serious unfairness" by
changing defendant's exposure dramatically without new justifying facts). This breach
fundamentally undermined the plea bargaining process and deprived Petitioner of the benefit
of her bargain. Second, the Court improperly enhanced Petitioner's sentence based on her
explanation of the legitimacy of her business operations, mischaracterizing her good-faith
effort to clarify the record as a "lack of remorse." See United States v. Latchman Singh, No.
16-2304, 2017 WL 6411999, at *3 (2d Cir. Dec. 12, 2017) (vacating 60-month sentence
where district court increased punishment because defendant's "attempting to explain his
actions and plead for mercy" was perceived as failure to accept responsibility); People v.
Houston, 532 N.W.2d 508, 520 (Mich. 1995) (Brickley, C.J., dissenting) ("A court cannot
base its sentence even in part on a defendant's refusal to admit guilt"). The Magistrate's
failure to address these sentencing errors particularly the Government's breach of the loss
stipulation and the Court's punishment of Petitioner for explaining her innocence renders the
Report incomplete and warrants de novo review and resentencing within the properly
calculated Guidelines range.

Conclusion

The record reveals a prosecution built on a foundation of sand relying on administratively
defective payroll forms, suppressing exculpatory SBA forgiveness letters establishing zero
loss, using perjured testimony from government agents regarding non-existent "physical
business" requirements and falsified venue, and proceeding through a prejudicial media
campaign that branded Petitioner a fraud before any judicial determination of guilt. These

affirmative misrepresentations, compounded by all five prior counsel's failure to investigate,
Case 3:23-cr-00003-DHB-BKE Document 87-1 Filed 06/25/26 Page 20 of 20

obtain exculpatory evidence, challenge venue, or object to illegal sentencing calculations,
rendered Petitioner's plea involuntary and deprived her of due process.

Petitioner's legitimate business operations, documented use of PPP and EIDL funds for their
intended purposes, and the SBA's subsequent audit and forgiveness demonstrate not fraud,
but a good-faith effort to navigate emergency relief programs. The Government's breach of
the plea agreement sentencing on an intended loss exceeding $900,000 when the agreement
capped loss at $550,000 and the Court's improper upward departure based on Petitioner's
explanation of her business legitimacy (mischaracterized as lack of remorse), resulted in a 60-

month sentence nearly double the applicable Guidelines range of 27-33 months.

The cumulative effect of venue errors, Brady and Giglio violations, ineffective assistance of
counsel, involuntariness of the plea induced by government misconduct, and illegal
sentencing calculations renders this conviction fundamentally unfair, unreliable, and
constitutionally infirm. Where the government has been made whole through administrative
forgiveness, where essential elements of fraud were never proven, and where systemic errors
deprived Petitioner of her constitutional rights, the Magistrate's Report fails to address these
critical deficiencies.

For the foregoing reasons, Petitioner respectfully requests that this Court reject the Magistrate
Judge's Report and Recommendation, conduct a de novo review of the entire record including
the Motion to Supplement (Doc. 72), grant her § 2255 motion, vacate her conviction and
sentence, and order an evidentiary hearing.

Respectfully submitted, this 24th day of June, 2026.

GLADYS HARUN, Pro Se

PO BOX 6294

Warner Robins GA 31095.

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