United States’s Reply to Defendant’s Memorandum in Aid of Sentencing — United States v. Bell (Dkt. 19, D.D.C.)

Summary

The United States's Reply to Defendant's Memorandum in Aid of Sentencing in United States of America v. James Kyle Bell, No. 21-CR-00284 (JDB), in the U.S. District Court for the District of Columbia, dated December 3, 2021, with sentencing listed for December 6, 2021. The government argues that the defense request for sixteen months of house arrest should be rejected, stating that the defendant took over $1.1 million from taxpayers and over $300,000 from political donors. It argues that no precedent supports such a lenient sentence in a PPP loan fraud or political action committee case, and distinguishes United States v. Zhang, where it says the defendant obtained $16,500 and repaid it. It closes by asking that the requested guideline variance be denied.

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Case 1:21-cr-00284-JDB Document 19 Filed 12/03/21 Page 1 of 5




                                UNITED STATES DISTRICT COURT
                                FOR THE DISTRICT OF COLUMBIA


    UNITED STATES OF AMERICA

          v.                                                 No. 21-CR-00284 (JDB)

    JAMES KYLE BELL,
                                                             Sentencing: December 6, 2021
                            Defendant.




                         UNITED STATES’S REPLY TO DEFENDANT’S
                          MEMORANDUM IN AID OF SENTENCING

        After stealing over $1.1 million from the taxpayers along with over $300,000 from

political donors, the defendant has now made the wild suggestion that he should be sentenced to

sixteen months of house arrest— in essence, an extended “time out” at home with his family

members—and that he should never spend a moment of his life in the custody of the Bureau of

Prisons. (Dkt. 1 15 at 1, 14.) This proposal is misguided and should be rejected by the Court.

        There is no precedent for such a lenient sentence in any case that involves PPP loan fraud

or the operation of a scam PAC—let alone both. The government has presented numerous

examples to the Court of defendants receiving substantial periods of incarceration for both of

those types of cases. (Dkt. 14 at 13.) The defendant points (at 6) to United States v. Zhang, as

offering “important guidance” but gives scant analysis of the facts. While it is correct that Zhang

received a below-guidelines sentence, the defendant in that case only obtained $16,500 in actual

proceeds from his CARES Act scheme and made full restitution by depositing that entire amount

in the Court’s registry before sentencing. See Zhang, No. 20-CR-169 (W.D. Wa.) (DE 47 at 1).


1
 “Dkt.” refers to the docket entries in the case at bar available on ECF. The abbreviation “DE” denotes the docket
entries available on ECF in other referenced cases.

           Case 1:21-cr-00284-JDB Document 19 Filed 12/03/21 Page 2 of 5




Likewise, the defendant’s reference (at 6) to the facts in United States v. Jaafar leaves out

important details. The defendant in Jaafar obtained only $220,573 in actual proceeds from the

fraudulent PPP loans, and returned all of those proceeds to the government through forfeitures at

the time of sentencing. See Jaafar, No. 20-CR-185 (E.D. Va.) (DE 60 at 1; DE 70 at 2).

        Zhang and Jaafar simply do not support the defendant’s request for a non-custodial

sentence. Both of those cases involved much smaller actual losses to the government. Both of

those cases involved defendants who returned 100 percent of their criminal proceeds to the

government which was the only victim. And in both of those cases, the defendants were actually

sentenced to serve jail time. Cf. Zhang, (DE 53 at 2); Jaafar, (DE 67 at 2). This stands in sharp

contrast to the case at bar in which the defendant actually obtained more than $1.1 million in

proceeds from his PPP loan fraud and—even after the forfeitures of Mr. Bell’s known bank

accounts and funds—will fall short of making full restitution to the government and his victims

by over $850,000. A non-custodial sentence for the defendant here would be wholly inconsistent

with the sentences in Zhang and Jaafar. 2

        The defendant also plays fast and loose with the facts in an effort to minimize his crimes.

For example, one of the defendant’s loans was cancelled before funding; the proceeds were not

“voluntarily” returned to the lender. (Dkt. 5 ¶¶ 50-51; Dkt. 14 at 2.) He also claims (at 4) that

he “made over [$]100,000” in refunds to donors to the Best Days Lie Ahead Committee. Sure.

But those proceeds were actually returned by the fundraising platform he used once the

platform’s operators discovered he was running a scam PAC. 3 And it is somewhat disingenuous



2
  Just this week, in United States v. Lee E. Price, III, Case No. 4:20-cr-522-1 (S.D. Texas), the defendant was
sentenced to 110 months in custody and ordered to pay $1.6 million in restitution (DE 11/29/21) after pleading
guilty to fraud and money laundering counts based upon his filing two fraudulent PPP loan applications through
which he obtained that amount.
3
  The defendant directly made the following statement in a recorded interview with the FBI: “[The fundraising
platform] said it was they were getting complaints because people thought it was the actual Biden campaign trying

                                                        2

            Case 1:21-cr-00284-JDB Document 19 Filed 12/03/21 Page 3 of 5




for the defendant to suggest (at 4) that “[m]uch of the PPP funds were intact when seized” when

the government has yet to locate $862,000 of those criminal proceeds.

         In a further effort to buttress his request for a below-guidelines sentence, the defendant

claims (at 6) that the sentencing guidelines “overstate[ ] the serious[ness] of the offense” because

the “intended [loss] amount and the amount derived from bank[s] are duplicative in nature.”

This is nonsense. Four of the defendant’s PPP loans resulted in actual losses to the government

of $1,139,836. The defendant also fleeced KAGC’s donors for actual losses of $246,751.45.

The intended losses here consist of one cancelled loan ($521,625) and the “refunds” to BDLAC

donors ($100,000) which are entirely separate. There is nothing “duplicative” about them.

         Finally, even after submitting a substantial sentencing memorandum supported by

character letters and evidence, the defendant has still provided no explanation of his

cryptocurrency assets which by their very nature cannot easily be traced by the government

without further information from the defendant. This silence speaks volumes. At a minimum, it

shows that the defendant has failed to keep the promise he made in his plea agreement “to

disclose fully all assets in which [he] has any interest or over which [he] exercises control.”

(Dkt. 4 at 8.) The failure to keep that promise demonstrates an absence of remorse for the losses

to his victims. And, perhaps more concerning, the defendant’s silence on this subject could

suggest he still controls substantial financial assets that represent the laundered proceeds of his

crimes which he has no intention of returning to his victims.




to raise money. And I said well we have disclaimers that say it’s not. It’s our-- it’s this committee, it’s not the
Biden committee or whatever. But we never got any money to come in, they just refunded everything.”

                                                           3

        Case 1:21-cr-00284-JDB Document 19 Filed 12/03/21 Page 4 of 5




      The defendant’s request for a guideline variance should be denied.

                                           Respectfully submitted,
                                           MATHEW M. GRAVES
                                           United States Attorney



                                   By:     ___________________________________
                                           JOHN W. BORCHERT (Bar No. 472824)
                                           ELIZABETH A. ALOI
                                           Assistant United States Attorneys
                                           Fraud & Public Corruption Section
                                           555 Fourth Street, NW
                                           Washington, D.C. 20530
                                           (202) 252-7679
December 3, 2021




                                              4

         Case 1:21-cr-00284-JDB Document 19 Filed 12/03/21 Page 5 of 5




                                 CERTIFICATE OF SERVICE
       I hereby certify that on this 3rd day of December 2021, I caused a copy of the foregoing to

be served on counsel for the defendant via the court’s ECF system.




                                                    _______________________________
                                                    JOHN W. BORCHERT
                                                    Assistant United States Attorney




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