Government's Sentencing Memorandum — United States v. Antonio D. Hosey (N.D. Ga.)

Record facts

U.S. District Court, Northern District of Georgia · No. 1:20-cr-00396-LMM · Doc. 21 · 2022-11-01 · Docket on CourtListener

Full text

IN THE UNITED STATES DISTRICT COURT 
FOR THE NORTHERN DISTRICT OF GEORGIA 
ATLANTA DIVISION 
 
UNITED STATES OF AMERICA 
v. 
ANTONIO D. HOSEY 
 
Criminal Action No. 
1:20-CR-396-LMM 
 
The Government’s Sentencing Memorandum 
The United States of America, by Ryan K. Buchanan, United States Attorney, 
and Diane C. Schulman, Special Assistant United States Attorney for the 
Northern District of Georgia, files this Sentencing Memorandum. 
1. Background 
On or about November 19, 2020, Defendant was charged in a criminal 
information with one count conspiracy to commit wire fraud in violation of Title 
18 U.S.C. § 371. (Doc 1).  These charges arose from Defendant’s role in a PPP 
fraud scheme that defrauded two banks out of a combined $3,000,000. 
The scheme involved 10 business owners who obtained $300,000 PPP loans by 
submitting applications that contained fraudulent information and attachments.  
Each business owner submitted the loan documents with the help of R.T., the 
ringleader of the scheme.  Once the business owners obtained the loan, they were 
required to pay R.T. approximately 50 percent of the loan.   
Defendant was involved in the scheme in several crucial ways.  He knew R.T., 
the ringleader, from years earlier when R.T. ran a questionable “credit repair” 
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 1 of 11

2 
 
service.  When R.T. got involved in the PPP fraud scheme, he needed to find 
small business owners who had business bank accounts to participate in the 
scheme.  He reached out to Defendant because of their prior relationship.  
Because Defendant did not have a business bank account, he referred T.W. to 
R.T.  R.T. paid Defendant a $10,000 referral fee.  T.W. was able to get a $300,000 
PPP loan and he referred 3 other business owners. Those business owners 
obtained 4 PPP loans, each for $300,000. 
R.T. then asked Defendant to help him launder the funds.  In order to receive 
50 percent of each loan he helped a business owner obtain, R.T. needed 
individuals who could cash checks from the business owners.  He asked 
Defendant to recruit check cashers.  Defendant recruited approximately 12 
individuals to cash checks.  He brought the check cashers to the bank to cash the 
checks.  Typically, each check was for $8,333.33.  Defendant let the check cashers 
keep $500 from each check and he collected the remainder of the cash.  
According to R.T., Defendant was also instructed to keep $500 per check for 
himself.  Defendant delivered the remaining cash in bags to R.T.  Defendant 
received approximately $32,000 for his role.    
On November 19, 2020, Defendant pleaded guilty to the criminal information 
pursuant to a negotiated plea.  (Doc. 8). At the sentencing hearing, the 
Government will object to the loss amount and seek two-level downward 
variance for Defendant’s cooperation.  The Government will then ask for a 
sentence at the low-end of the guideline range. 
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 2 of 11

3 
 
II. The appropriate loss amount is more than $550,000 and less than 
$1,500,000. 
In determining the appropriate enhancement for loss, the PSR added a 12- 
level enhancement consistent with a loss amount of more than $250,000 and less 
than $550,000.  This enhancement was based on a finding that the appropriate 
loss was $463,779.79, which represents that amount of checks Defendant and his 
check cashers cashed in connection with the overall scheme.  But this amount 
overlooks the $300,000 loan obtained by T.W. who Defendant referred to R.T. 
Defendant is charged with participating in a criminal conspiracy.  His 
participation started when he referred T.W. to R.T. and continued while he 
oversaw the check cashers for multiple business owners.  Defendant’s check 
cashers cashed multiple checks for the following businesses: Rare Breed Nation, 
Faithful Transport, the Infinity Group, KMJ Transport, and Market Yourself.  
One of his check cashers cashed one $7,945.21 check for Bamigi Brand, T.W.’s 
company.  The total amount of the checks that Defendant’s check cashers cashed 
was $463,777.79. 
The Government argues that the appropriate loss attributed to Defendant is 
$755,832.58.1  The Guidelines define relevant conduct as “jointly undertaken 
criminal activity…that [was] within the scope of the jointly undertaken criminal 
activity, in furtherance of that criminal activity, and reasonably foreseeable in 
 
1 This amount represents the total amount of checks Defendant and his check 
cashers cashed plus the loan T.W. received.  Because the checks cashed included 
a $7,945.21 check from Bamigi Brand, the Government deducted this amount 
from the T.W. loan so as to not double count. 
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 3 of 11

4 
 
connection with that criminal activity.  See U.S.S.G. § 1B1.1(a)(1)(B).  The 
appropriate inquiry is not whether Defendant was actually involved the 
submission of the fraudulent PPP loan application for Bamigi Brand or whether 
he had actual knowledge of the submission of the fraudulent loan, the 
appropriate inquiry is whether the submission of the fraudulent loan was 
reasonably foreseeable consequence of Defendant’s referral.  See United States v. 
Danzey, 842 F. App’x 413, 471 (11th Cir. 2021).  The Court should answer that 
question in the affirmative.   
Defendant referred T.W. to R.T. after R.T. explained to Defendant that he was 
looking for small business owners who had business bank accounts to assist in 
getting PPP loans.  R.T. paid Defendant $10,000 as a referral fee.  It was 
reasonably foreseeable that T.W. would obtain a fraudulent loan as result of 
Defendant’s referral. In fact, without Defendant’s referral, T.W. would never 
have been in position to obtain the loan.  Finally, including the loan T.W. 
received as part of Defendant’s loss amount is consistent with how the 
Government has treated other defendants involved in the same scheme.   
II. Defendant provided substantial assistance worthy of a two-level 
downward variance. 
Section 5K1.1 allows the court to depart from the guidelines “upon a motion 
from the Government stating that the defendant has provided substantial 
assistance in the investigation and prosecution of another person who has 
committed an offense.”  See U.S.S.G. § 5K1.1.  In determining the appropriate 
departure, the Court should consider the significance and usefulness of the 
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 4 of 11

5 
 
defendant’s assistance; the truthfulness, completeness and reliability of the 
information Defendant provided; the nature and extent of the defendant’s 
assistance; any injury suffered or danger or risk to the defendant; and the 
timeliness of Defendant’s assistance. 
Defendant provided critical information about how the scheme worked.  He 
also truthfully testified at trial against T.C. Because of his testimony, the 
Government secured a conviction against T.C.  The information Defendant 
provided to the Government was truthful, complete and reliable.  In fact, the 
evidence as well as statements from R.T. corroborated Defendant’s information.  
Defendant immediately accepted responsibility for his conduct and quickly 
agreed to assist the Government in the investigation and prosecution.  These 
factors weigh in favor of granting Defendant a two-level reduction in his 
sentence for substantial assistance. 
II. A Guidelines Sentence is Appropriate Given the Section 3553(a) Factors. 
1. The Nature and Circumstances of the Offense. 
Defendant’s offense was serious, motivated by personal greed during an 
unprecedented global crisis.  In early 2020, the COVID-19 pandemic necessitated 
nationwide lockdowns that ground the economy to a halt, sending stock markets 
crashing and unemployment rates skyrocketing.  Many American businesses—
particularly small businesses—struggled to stay afloat as consumer demand 
plummeted and in-person services abruptly ceased.  Employees relying on these 
paychecks to support their families faced unprecedented uncertainty.  In 
response, Congress passed the Paycheck Protection Program (the “PPP”) as one 
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 5 of 11

6 
 
of the mechanisms to provide relief to small businesses and their employees.  To 
obtain a PPP loan, a business had to certify that the loan would be used to pay 
for payroll, lease or mortgage interest, or utilities, and the loan was forgivable if 
the business spent a certain percentage of the loan on payroll costs.  
Because Congress’ intent was to “provide relief to America’s small businesses 
expeditiously,” the PPP streamlined the Small Business Administration’s typical 
lending requirements.  Businesses Loan Program Temporary Changes; Paycheck 
Protection Program, 85 Fed. Reg. 20811-01 (Apr. 15, 2020).  For example, the PPP 
“allow[ed] lenders to rely on certifications of the borrower in order to determine 
eligibility of the borrower and use of loan proceeds and to rely on specified 
documents provided by the borrower to determine qualifying loan amount and 
eligibility for loan forgiveness.”  Id.  These procedures were designed to rapidly 
provide desperately needed funds to small businesses so they could keep their 
workers employed during an economic and public health emergency that 
threatened the viability of these businesses, and their ability to pay employees. 
Thus, the program dispensed with some of the usual checks on the applicant and 
depended on the applicants’ honesty. 
2. The History and Characteristics of the Defendant. 
The Government believes that a sentence at the low end of the guidelines 
range fairly reflects Defendant’s history and characteristics.  Defendant has no 
past arrests and no criminal history points.  These factors weigh in Defendant’s 
favor.  However, Defendant is before the Court to be sentenced for the criminal 
conduct he did engage in.  Defendant made the decision to get involved in this 
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 6 of 11

7 
 
criminal conduct so that he could line his own pockets.  The Government has 
recommended a downward departure to reward Defendant for his quick 
readiness to provide substantial assistance.  After accounting for that assistance, 
Defendant needs to be held accountable for the criminal conduct that got him 
here.  Defendant’s conduct warrants a low-end guideline sentence. 
Defendant recruited 12 people to help him commit money laundering.  These 
check cashers were individuals who trusted Defendant and desperately needed 
money.  Defendant betrayed those individuals by getting them involved in 
criminal conduct.  He also referred T.W. into the bank fraud scheme for which 
T.W. now has a felony conviction.  Defendant’s conduct deserves a custodial 
sentence at the low-end of the adjusted guideline range. 
3. The Need for Adequate Deterrence. 
A sentence within the guidelines range is necessary to afford adequate 
deterrence and to reflect the seriousness of the offense, promote respect for the 
law, and provide just punishment for the offense.  18 U.S.C. § 3553(a)(2).  
The Eleventh Circuit has identified general deterrence as “an important goal 
of sentencing in a white-collar crime prosecution.”  United States v. Kuhlman, 711 
F.3d 1321, 1328 (11th Cir. 2013); see also United States v. Livesay, 587 F.3d 1274, 
1279 (11th Cir. 2009) (“[T]he threat of spending time on probation simply does 
not, and cannot, provide the same level of deterrence as can the threat of 
incarceration in a federal penitentiary for a meaningful period of time.”); United 
States v. McQueen, 727 F.3d 1144, 1158 (11th Cir. 2013) (recognizing that general 
deterrence is one of the “key purposes of sentencing’”) (citation omitted). 
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 7 of 11

8 
 
As the Eleventh Circuit has recognized, deterrence is especially important in 
the context of crimes, like the Defendant’s crime in this case, that “may easily go 
undetected and unpublished.”  See id. at 1158-59 (reversing the district court’s 
lenient sentence because it “sap[ped] the goal of general deterrence”); see also 
United States v. Engle, 592 F.3d 495, 502 (4th Cir. 2010) (explaining that because 
tax evasion offenses are infrequently prosecuted, “[w]ithout a real possibility of 
imprisonment, there would be little incentive for a wavering would-be evader to 
choose the straight-and-narrow over the wayward path); 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.”). 
A recent analysis found that approximately 12.3% of the PPP loans granted to 
small businesses, totaling $64.2 billion, have at least one indicator of potential 
fraud.  See John M. Griffin et al., Did FinTech Lenders Facilitate PPP Fraud? (May 
4, 2022), available online at https://ssrn.com/abstract=3906395 (last visited Aug. 
4, 2022).  And because of the sheer number of PPP loans as well as the 
streamlined documentation necessary to obtain them, the United States is 
unlikely to detect and/or to prosecute most individuals who obtained fraudulent 
PPP loans.  The need for general deterrence is therefore significant in this case.  
4. The Sentencing Commission’s Policy Statement. 
“In deciding a sentence, district courts should consider the policies behind the 
applicable guidelines provision.”  United States v. Crisp, 454 F.3d 1285, 1291 (11th 
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 8 of 11

9 
 
Cir. 2006); see also 18 U.S.C. § 3553(a)(5) (directing district courts to consider the 
Sentencing Commission’s policy statements).  For fraud-related offenses, the 
Sentencing Commission has explained that “along with other relevant factors 
under the guidelines, loss serves as a measure of the seriousness of the offense 
and the defendant’s relative culpability and is a principal factor in determining 
the offense level under [U.S.S.G. § 2B1.1].”  U.S.S.G. § 2B1.1, cmt. backg’d. 
The Sentencing Commission’s policy statement supports imposing a 
Guidelines sentence in this case, where Defendant’s Guidelines are based almost 
entirely on the amount of loss attributable to his offense.  
IV.  
Conclusion 
For the reasons stated above and at sentencing, the United States respectfully 
requests that the Court impose a sentence at the low end of the applicable 
Guidelines range. Considering the 3553a factors, a low-end guideline sentence is 
appropriate.  Defendant’s conduct warrants a custodial sentence because of the 
nature and circumstance of the offense.  Defendant’s crime is an egregious fraud 
case.  During a pandemic, Defendant stole money intended for legitimate 
businesses struggling to survive in the midst of the public health emergency.  
The PPP was a much-needed lifesaver for legitimate businesses throughout the 
country.  Defendant put his own self-interest above the needs of the public.  
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 9 of 11

600 U.S. Courthouse, 75 Ted Turner Drive S.W., Atlanta, GA 30303 
(404) 581-6000   fax (404) 581-6181 
10 
 
 
Respectfully submitted, 
RYAN K. BUCHANAN 
United States Attorney 
/s/DIANE C. SCHULMAN 
Special Assistant United States 
Attorney 
Georgia Bar No. 497764 
Diane.schulman@usdoj.gov 
 
 
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 10 of 11

 
Certificate of Service 
The United States Attorney’s Office served this document today by filing it using 
the Court’s CM/ECF system, which automatically notifies the parties and counsel 
of record. 
Caitlyn Wade 
November 1, 2022 
 
/s/ DIANE C. SCHULMAN  
 
DIANE C. SCHULMAN 
 
Special Assistant United States 
Attorney 
 
 
Case 1:20-cr-00396-LMM     Document 21     Filed 11/01/22     Page 11 of 11

File and source

File

gov.uscourts.gand.282638.21.0.pdf

Size

138,295 bytes

SHA-256

46903b33c65c88a63e6a3c0296a55f0a60639ad9fe08ee79dd70a23ad6cb4e45

Our copy

gov.uscourts.gand.282638.21.0.pdf

Original

PACER (login required)