Letter from Andrew J. Dalack to Judge Valerie E. Caproni, July 7, 2022 — United States v. Frazier (Dkt. 32, S.D.N.Y.)

Summary

Assistant Federal Defender Andrew J. Dalack asks Judge Caproni in this July 7, 2022 letter to sentence Marcus Frazier to time served, followed by three years of supervised release with the first year on home detention. The letter says that after a May 2020 layoff, Frazier gave lenders fake bank statements, corporate information and employee credentials and obtained approximately $1,217,499 in PPP loans. Frazier spent approximately $350,000 on personal expenses, and the remaining approximately $850,000 was seized on or about April 26, 2021. Frazier pleaded guilty on October 25, 2021 to an information charging two counts of wire fraud. The defense calls the stipulated Guidelines range of 63 to 78 months’ imprisonment “not a useful guide” and cites Frazier’s depression, pre-trial release record and $250-per-month restitution payments for the next 20 years.

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Case 1:21-cr-00649-VEC Document 32 Filed 07/07/22 Page 1 of 18




                                                      July 7, 2022

BY EMAIL (UNREDACTED)
BY ECF (REDACTED)
The Honorable Valerie E. Caproni
United States District Judge
Southern District of New York
40 Foley Square
New York, NY 10007

RE:     United States v. Marcus Frazier,
        21 Cr. 649 (VEC)

Dear Judge Caproni:

      The Court should sentence Marcus Frazier to time served followed by one-
year home detention and a total of three years’ supervised release. This sentence
adequately punishes Mr. Frazier and promotes respect for the law given his
mitigating personal circumstances, extraordinary performance on pre-trial release,
and the hefty monetary penalties he has agreed to pay. See Consent Restitution
Order, Attachment to Gov’t Sentencing Memorandum (Dkt. No. 30-1).

   I.     Overview

       Starting in June 2020, and within weeks of being laid off at the outset of the
COVID-19 pandemic, Mr. Frazier did something really stupid: he submitted bogus
applications to various lenders for emergency Paycheck Protection Program (PPP)
loans from the Small Business Administration (SBA). Mr. Frazier’s plan was as
boneheaded as it was uncomplicated. He gave several lenders fake bank statements,
corporate information, and employee credentials to ultimately obtain approximately
$1,217,499 from a government program designed to help real companies and
employers stay afloat during unprecedented public-health-related lockdowns and
social panic. Between June 18, 2020, and April 7, 2021, of the PPP funds Mr.
Frazier actually obtained, he spent approximately $350,000 on personal expenses,
including hotels, restaurants, transportation, and clothing. The remaining funds,
approximately $850,000, were not spent and were seized by federal law enforcement
on or about April 26, 2021.

       This is the thrust of Mr. Frazier’s offense conduct and it is certainly not
pretty. However, it is far from his full story.

        Case 1:21-cr-00649-VEC Document 32 Filed 07/07/22 Page 2 of 18




       From a young age, Mr. Frazier was determined to overcome the challenging
financial and social circumstances into which he was born—a mother with multiple
sclerosis, an abusive father, and a grandmother/foster mother who relied on social
security benefits to barely scrape by. Over time, as Mr. Frazier’s determination to
escape his family’s dysfunction transformed into an obsession, his self-worth and
self-esteem became inextricably intertwined with very public displays of wealth and
success. In May 2020, Mr. Frazier was unceremoniously laid off from a financial
firm due to COVID-related downsizing. He began drinking regularly as he became
further isolated in New York City, estranged from his family and living a world
away from his son and his son’s mother, who reside in Australia. Panicked over
finding a new job and desperate to sustain the carefully-curated image of himself as
a wealthy professional, Mr. Frazier’s preoccupation with affluence and social status
reached its climax and culminated in his scheme to defraud the SBA.

       But contrary to the Government’s reductionist argument, that Mr. Frazier’s
scheme was borne out of pure selfishness and greed, Mr. Frazier’s desperate scheme
was the product of years of depression, personal loss, and unaddressed trauma.
Indeed, while the instant case is Mr. Frazier’s first ever criminal conviction, he has
grappled for years with low self-esteem, chronic feelings of inferiority and
deficiency, covert grandiosity, and a hypersensitivity to loss and failure—
psychological symptoms contributing not only to his SBA fraud, but also to more
minor instances of financial misconduct in the past, which comprise the second wire
fraud count in the Information. See generally Dr. Claude Patrice Francois
Psychological Report, Exhibit A.

       This case has been a true wake-up call for Mr. Frazier, and he has done
everything possible to redeem himself since his arrest. Mr. Frazier’s willingness to
accept responsibility and plead guilty was unwavering from the moment he first
appeared in court. Mr. Frazier not only spared the Government from the hassle of
indicting him, but he also did not seek the Rule 16 discovery to which he was
otherwise entitled, saving the Government significant time and resources. And
when a search of his electronic devices uncovered other smaller acts of fraud against
financial institutions in 2018 and 2019—activities that would have unlikely
remained undiscovered but for the instant offense—Mr. Frazier readily accepted
responsibility and pleaded guilty to them as well.

      Mr. Frazier, who does not have any co-signers to his personal recognizance
bond, has also been a perfect and productive pre-trial releasee. He has held a job at
a consulting firm in New York City and is thriving in this new role. With his
earnings to date, Mr. Frazier has set aside $5,000 towards an initial restitution
payment, which he intends to make on July 18, 2022, the date of sentencing.

      Mr. Frazier also continues to enthusiastically participate in mental health
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         Case 1:21-cr-00649-VEC Document 32 Filed 07/07/22 Page 3 of 18




treatment and Alcoholics Anonymous, and he has volunteered with various
community-based organizations. He now possesses a more robust insight into his
mental health needs and challenges, and he will build on these successes through
continued talk therapy, substance abuse counseling, and psychological treatment.

        Mr. Frazier has used the past year-and-a-half to refocus on his relationship
with his son and the boy’s mother. As a result of this case and COVID-related travel
restrictions, it has been two years since Mr. Frazier has traveled to Australia to see
his son and co-parent, and he is humbled by their continued support and love
despite the circumstances created by his poor decision-making. Mr. Frazier’s son is
already showing signs of increased emotional distress related to his father’s
prolonged physical absence (see Exhibit B), and Mr. Frazier is committed to being a
better and more present father, i.e., to being the type of father that he never had.
Having fully grappled with the impact of his choices on his family, Mr. Frazier is
terrified at the prospect of being imprisoned and facing a more formidable
separation from them.

      Against this backdrop, sending Mr. Frazier to prison for any amount of time
would be greater than necessary to punish him, promote respect for the law, and
provide him with needed medical care and other treatment in the most effective
manner. A term of imprisonment is particularly inappropriate given his
overwhelmingly positive adjustment to pre-trial release, steady employment, and
the substantial economic penalties associated with his crime. Instead, the Court
should sentence Mr. Frazier to time-served, followed by three years’ supervised
release, with the first year to be spent on home detention, and restitution.

   II.    Procedural History

       Mr. Frazier was arrested on April 28, 2021 and presented before Magistrate
Judge Gabriel W. Gorenstein on a seven-count complaint. Dkt. No. 1. On consent,
Mr. Frazier was released the same day on a $250,000 personal recognizance bond to
be co-signed by two financially responsible people. Dkt. No. 4. After undersigned
counsel conveyed to the Government Mr. Frazier’s readiness to plead guilty to an
information and without the need for Rule 16 discovery,1 the Government
consented to a modification of Mr. Frazier’s bail conditions permitting him to
remain on pre-trial release under “strict supervision” but without the need for any
co-signers to his personal-recognizance bond. Mr. Frazier has scrupulously complied
with the terms of his pre-trial release without incurring a single infraction. PSR ¶7.

1 The defense received a very small set of discovery in this case, namely the

recorded telephone communication between Mr. Frazer and an agent of the Small
Business Administration referenced in ¶12 of the Complaint and summary loss-
amount charts prepared by the Government.
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Ultimately, on October 25, 2021, Mr. Frazier pleaded guilty to an information
charging two counts of wire fraud in violation of 18 U.S.C. § 1343 and pursuant to
the terms of a negotiated written plea agreement.

   III.    Marcus Frazier’s Personal Background, Record, and
           Circumstances

      A. Mr. Frazier’s difficult and traumatic childhood was punctuated by
         his mother’s multiple sclerosis, his exposure to domestic violence,
         child protection services, and his father’s sudden death.

       Born in 1973 in Columbia, South Carolina, Mr. Frazer had two siblings and
grew up in a challenging home environment. When Mr. Frazier was very young, his
mother, Yvonne Frazier, was diagnosed with multiple sclerosis (MS). Mr. Frazier
cannot remember a time in which his mother was not suffering physically and
mentally from MS. Her husband, George Frazier, amplified her suffering through
physical abuse that Mr. Frazier witnessed. On one occasion, Mr. Frazier recalls his
father picking up his wheel-chair-bound mother and dropping her on the floor. As a
result, Mr. Frazier grew up conflicted about his father, someone he so desperately
wanted to see as a role model. As Dr. Claude Patrice Francois writes in her
psychological assessment of Mr. Frazer:

      He believes that the pressure on his father to care and provide for an
      ailing spouse and young children caused him to engage in physical
      violence towards his mother and older brother. He recalled an incident
      wherein his father picked up his wheelchair-bound mother and
      dropped her on the ground. Queried as to how he felt when his father
      would become violent, he stated ‘I was scared because I didn’t
      understand. Also, as a boy, you look at your father like a king. My
      father was a God to me. My older brother hated my father. He was
      older. I saw less.’

Ex. A at 2.

       Eventually, the authorities intervened, and Mr. Frazier and his siblings,
were transferred to the foster care system. During this time, Mr. Frazier recalls
really missing his home. He was only four years old when he was removed from his
parents’ care, and he craved their presence and attention. As Dr. Francois explains:

      Although [Mr. Frazier] was not mistreated at the foster care
      placement, he recalled missing home. He shared that he would sit
      outside for hours and watch the road in the hopes that he would catch
      the familiar sight of his grandmother’s car coming to pick them up.

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Ex. A at Page 2.

       Mr. Frazier’s mother’s physical disabilities prevented her from assuming full
custody of Mr. Frazier and his siblings. Consequently, and given the clearly
untenable alternative of leaving the children in Mr. Frazier’s father’s care, Mr.
Frazier’s parents gave up their parental rights and their children were adopted by
Mr. Frazier’s maternal grandmother. As part of the terms of the adoption, George
Frazier was not allowed to have any contact with his children. Mr. Frazier, despite
being so young, vividly recalls a supervised visit in which his father told all of his
children that he would no longer be a part of their lives. Although Mr. Frazier and
his siblings were happy to be with their maternal grandmother, this was still
devastating news.

       Life was not easy with Mr. Frazier’s grandmother, either. They lived in a
two-bedroom trailer and had very little income. Mr. Frazier’s mother didn’t work
because of her disability and his grandmother relied on social security benefits. The
children continued to receive visits from the relevant governmental authorities for
two to three years after the adoption. The visits terrified Mr. Frazier; he worried
that he would be taken away from his grandmother. As he recounted to Dr.
Francois:

      ‘When we got to my grandmother’s house, I almost had PTSD, constant
      fear of the social worker coming and taking us. She could show up at
      any time to check up on the house. She would write a report and if the
      report was wrong, they could take us. I was terrified. I didn’t know
      what she was writing.’

Ex. A at 2.

      Mr. Frazier felt ashamed and embarrassed over his family’s situation—their
dysfunction, poverty, and regular contact with children’s services. He wanted a
normal life. To mask his humiliation, Mr. Frazier fabricated an image of himself to
present to the world. Dr. Francois writes:

      He coped with his shame by crafting an image to present to the world.
      He noted ‘I remember being embarrassed of our living conditions. I was
      not telling them we were poor. I started exaggerating stuff, like we had
      a big house as opposed to living in a two-bedroom trailer. I was
      embarrassed that my mom was sick. I told them my mom had a job. I
      can’t remember what I said for my dad….’

Ex. A at 2.

      When Mr. Frazier was 10 years old, his father was found dead in a pool. It
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was a shocking development for the family, especially because they had not seen
him in years. Although George Frazier’s death was ruled an accident, Mr. Frazier’s
family suspected that he had been killed over a financial dispute. Despite being
separated for some time, Mr. Frazier had long fantasized about his family
reuniting. He thought that one day they would all live together in a big house. This
was all cut short by his father’s sudden death.

      B. Although he was a good student and hard worker, Mr. Frazier’s
         successes were often overshadowed by his inability to cope with
         adversity and failure, and he frequently resorted to lying to avoid
         problems in his life.

        Through all of the tumult, Mr. Frazier found respite in his education. He
believed that getting degrees would be his way out of poverty and despair. Mr.
Frazier was a diligent student and graduated from high school at the top of his
class. In one of his proudest moments, Mr. Frazier was admitted to Howard
University, with a partial tuition scholarship. For the first time in his life, Mr.
Frazier felt like he had finally “made it.”

       During his first year of college, Mr. Frazier worked hard and enjoyed living
away from home. In some respects, college was the great equalizer; everyone lived
in dormitories, took the same classes, and at the same food. It felt like a real fresh
start. For a while, Mr. Frazier thrived in this environment. But after his first year,
Mr. Frazier had a tuition balance of $900—a debt he was simply unable to pay. As a
result, Mr. Frazier was forced to drop out. That experience crushed him. But rather
than face his family, tell them the truth, and rebound from the setback, Mr. Frazier
lied and told them that he was still enrolled at Howard. Dr. Francois elaborates:

      He stated that he did not tell his family about being forced to drop out
      for financial reasons because ‘I didn’t want to disappoint my mother or
      my family. I didn’t want to tell them I didn’t have the money. No one
      had the money’. For a time, Mr. Frazier continued living in the
      dormitories in spite of no longer being enrolled. He obtained entry level
      jobs and often sent money to support his mother as her health was
      declining. He struggled financially. He recalled that he was homeless
      for a period for 8 months in 1995. He slept at the homes of his friends
      or at times was forced to sleep in his car.

Ex. A at 3.

      In 1998, Mr. Frazier landed a job at a tech company. Although he began in
the mailroom, Mr. Frazier capitalized on the opportunity to learn about network
engineering. He immersed himself in the subject matter and became conversant in

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the technicalities of the job. Eventually, senior staff members recognized Mr.
Frazier’s eagerness and potential. They encouraged Mr. Frazier to apply for a
promotion that would provide on-the-job training, but that also required a college
degree. Mr. Frazier knew it was wrong, but he lied about having graduated from
college. He was not only desperate for the job, but he also did not want to disappoint
or embarrass himself in front of the company’s senior staff. He planned on securing
the employment, making some money, and then attending school at night to finish
his degree. Mr. Frazier held this position for a few years before getting laid off in
2000. Onward, Mr. Frazier continued to work at technology firms, and later at
financial companies, and became accustomed to fudging his educational
background—a problem that never surfaced because Mr. Frazier was such a
hardworking employee.

      In spite of earning modest to high salaries, Mr. Frazier frequently found
himself in financial distress, living beyond his means. Sometimes, his failure to save
and budget drove him to homelessness, a secret he went to great lengths to protect
by constantly lying about his employment status and finances, including to his
romantic partners. Ex. A at 3-4.

        Mr. Frazier’s mother’s health began to decline more aggressively in 1995.
Over time, she was relocated to a nursing home and had a feeding tube installed.
Mr. Frazier did not cope well with his mother’s drawn-out demise and avoided going
to visit her. She eventually died in 2003. The whole experience drove an even larger
wedge between Mr. Frazier and his siblings, and he redoubled his commitment to
his professional aspirations.

       Eventually, Mr. Frazier acquired his bachelor’s and master’s degrees and felt
a sense of relief. He no longer had to misrepresent his education. Soon, Mr. Frazier
obtained a high-level position as a project manager at a financial firm in New York
City. He began living in an upscale apartment in lower Manhattan and spent a lot
of money on eating out, purchasing art, and socializing with other high-level finance
professionals. In retrospect, Mr. Frazier should have lived more prudently and
saved his money. Instead, when he was laid off in May 2020 due to financial
repercussions of the COVID-19 pandemic, Mr. Frazier found himself in an
uncomfortably familiar position: unemployed, underfunded, and overspent. And he
reacted to this problem in the most self-destructive way possible.

      C. Mr. Frazier made the biggest mistake of his life when he
         defrauded the SBA to improperly obtain and spend COVID-19-
         related paycheck protection loans—a mistake directly
         attributable to self-destructive coping mechanisms he developed
         as a response to trauma, anxiety, and low self-esteem.


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        When Mr. Frazier found himself unemployed in May 2020, he completely
panicked. In spite of his high-end salary, Mr. Frazier had barely saved for three
months’ worth of expenses, and he was ill-equipped to immediately ditch the
lifestyle he had so carefully cultivated. Although Mr. Frazier tried to reassure
himself that he could downsize, adjust his lifestyle, and scrape by until he found a
new job, he simply did not have the coping skills or mechanisms to act on this
rationale. See infra. Instead, he capitulated to his paranoia of becoming homeless
again and succumbed to his fear, self-loathing, embarrassment, and anxiety: he lied
to the SBA and submitted fake applications, bank statements, and other materials
to obtain emergency PPP loans.

       As evidenced by his immediate willingness to plead guilty and by his letter to
the Court, Mr. Frazier accepts full responsibility for his conduct and is genuinely
sorry. As he wrote to Your Honor:

      Despite my efforts to be an exemplary person and father, I failed that
      mission when I broke the law. My decision to commit fraud and
      improperly obtain funds the federal government had provided to keep
      millions of Americans afloat during the height of COVID-19 was
      impulsive and motived by a desperate attempt to maintain a sense of
      stability after I lost my own job at the start of the pandemic. I felt like
      I needed to maintain an image of success in order to be deemed worth,
      and in that state of anxiety, I behaved extremely poorly. There is no
      justification for what I did. We are a nation of laws, and I broke the
      social contract. I am deeply remorseful.

Marcus Frazier’s Letter to the Court, Exhibit C.

       Crucially, however, Mr. Frazier has used the past year following his arrest to
gain a better understanding of his mental health needs and how his self-destructive
approach to problem-solving landed him in front of the Court. In particular, Mr.
Frazier agreed to be evaluated by Dr. Francois in July 2021, who explains the direct
relationship between his life experiences and his plainly negative and
counterproductive reactions to stress:

      Mr. Frazier’s formative years were shaped by a number of traumatic
      factors including a violent household wherein he repeatedly witnessed
      his father physical assaults of his paralyzed mother, the sudden
      dissolution of his nuclear family and placement into foster care, the
      loss of his father first through adoption and later to death, his mother’s
      debilitating illness and poverty. These factors deeply shaped the
      development of his sense of self and others. Internally, Mr. Frazier
      struggles with a deep sense of shame, vulnerability, feeling less than.

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      He feels a sense of insecurity both within himself and in the
      environment given his early childhood experiences of sudden and
      radical changes to his family life. …

      As his career took off, he began to socialize with highly successful
      individuals. He concocted various stories about his origins. For
      example, he would claim that his mother was an attorney and that his
      father was a physician in a recreation of the main characters of the
      Cosby Show. It is as if by gaining admission to these elite circles, Mr.
      Frazier sought to transform his very being. He stated: ‘living outside
      my means...pretending to be someone I wasn’t…some sort of
      façade…trying to fit into the crowd also understanding the power of
      having a certain network, being able to fit into a certain network. At
      Fannie Mae, I’m around very powerful people, around traders, the CEO
      knew who I was…a lot of it goes to my childhood stuff, the shame and
      the embarrassment. I was ashamed of my background…I had to cover
      up for not being educated, trying to get stability, trying to escape the
      chaos…I needed to be able to move in these groups. I was chasing
      stability.’

Ex. A at 4-5.

       Essentially, “[w]hen intelligence, network and hard work alone do not yield
visible signs of success, he relies on maladaptive behaviors such as misrepresenting
his education or engaging in high-risk financial behaviors such as those manifested
by the instant offense.” Id. at 5. Thus, from a clinical perspective, it is clear that
“[w]hen Mr. Frazier is faced with a situation wherein he experiences a major loss
that he cannot immediately address, his feelings of shame intensify and he
experiences acute episodes of depression.” Id. And while those “episodes of a deep
descent into despair and hopelessness are often temporary,” Mr. Frazier “climbs out
of those states by relying on his traditional coping mechanism of achievement and
status seeking.” Ex. A at 6.

       Indeed, while Mr. Frazier’s obsession with status and achievement might be
useful to propel him out of intense states of despair and shame, it also “undermines
[his] genuine psychological well-being and socioeconomic stability.” As Dr. Francois
writes:
       Ironically, his psychological defense style repeatedly recreates the very
       state of affairs he is attempting to flee. In spite of earning high salaries
       throughout his long professional career, Mr. Frazier has struggled to
       establish financial security. In an effort to project a certain image of
       himself, he generally lives above his means. He generally has limited
       savings to weather professional setbacks which in turn fuel risky
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      decision making in order to avoid homelessness and to continue
      maintaining his much-needed façade of being a high-status person. For
      example, once he obtained the PPP loans, he maintained his residence
      in Manhattan and also traveled to Florida and stayed in expensive
      hotels. He noted that socializing with the elite in Miami “made me feel
      like somebody. I had Georgetown and Cornell credentials. I had
      arrived. Even though shame there, I can mask it. Now I have PPP, I
      don’t have to stress of potential homelessness. I can take time and space
      to find a job. I can finally be a part of a culture that would not have
      accepted me if I didn’t have the education and be able to afford this
      stuff.”

Ex. A at 6.

       Unsurprisingly, Mr. Frazier is drawing connections between his own
devastating lapse in judgment in this case and his father’s devastating behavior
against his mother and the rest of his family—and drawing parallels to his
relationship with his own son. During his evaluation with Dr. Francois, Mr. Frazier
“became tearful when he made the connection between how his father’s actions tore
his family apart when he was around four years old; and how he himself is
recreating this history” as he faces the real prospect of a lengthy incarceration. Mr.
Frazier is scared of revealing his present legal situation to his son:

      “He can no longer see me as a God. He can no longer talk to me with his
      friends. What he is going to see now is a criminal who couldn’t be
      trusted. Someone who made bad choices. Now he’s going to start lying
      like I lied about my parents. That’s the worst part more than anything
      else.”

Ex. A at 6.

      D. Mr. Frazier enjoys a genuine and loving relationship with Kate
         O’Connor and their son, which gives him meaning and motivates
         him to use this case to turn his life around.

       In June 2011, Mr. Frazier met a woman named Kate O’Connor in
Washington, DC. At the time, Dr. O’Connor, a clinical immunologist and
immunopathologist in Sydney, Australia, was presenting research from her PhD at
a conference. Upon meeting Mr. Frazier, Dr. O’Connor formed an “immediate and
lasting connection” with him (Ex. B at 1) that survived their physical separation
and vastly different time zones. Mr. Frazier and Dr. O’Connor visited each other
when possible, and he supported her through many challenges, including Dr.
O’Connor’s completion of her PhD and her sister’s cancer diagnosis. Id.
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       Following a visit in November 2015, Dr. O’Connor
discovered that she was pregnant. Both she and Mr. Frazier were
thrilled. Although Mr. Frazier missed his son’s birth because he
was delivered a month early, he flew to Sydney as soon as he
could and they spent a “blissful, sleepless time [together] as new
parents.” Ex. B at 1. Mr. Frazier was “loving, caring, and
attentive.” Id. In the years following, they visited each other
when possible, but the significant time zone and geographical
differences proved formidable.

       At the beginning of 2020, Mr. Frazier and Dr. O’Connor
planned for Mr. Frazier to make an extended visit to coincide
with their son’s fourth birthday in July. But as soon as COVID-
19 disrupted international travel, they cancelled their plans. As
Dr. O’Connor writes:

      The uncertainty of when we would be able to see             Mr. Frazier and his son celebrating his
      each other was unsettling, along with the concern           second birthday.
      about falling ill that we all faced. I recall a
      conversation with Marcus early during our respective lock-downs; I
      was complaining about being exhausted with hours of stressful work at
      the hospital coupled with being a single parent. Usually, my parents
      travel to help me out periodically, but Australian national borders
      were also closed and I was facing an unknown period of work and
      single parenting. Although Marcus has always praised me and
      thanked me for being            s mother, on this occasion, he said “but
      you have           and I have nobody….” This is one of the rare occasions
      I have heard him complain. And he was right. I wouldn’t have traded
      my place with him for anything, my five am wake ups or locked down
      weekends with            baking, reading and endless Lego sessions. I
      can’t envision missing out on hugging him or touching his little curls
      and soft cheeks for even a week.

      Ex. B at 1-2.




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        It took Mr. Frazier more
than a year to disclose the details
of his case to Dr. O’Connor, as he
was terrified that she would refuse
to see him again. Of course, the
news “was and still is extremely
distressing” for Dr. O’Connor, who
worries about Mr. Frazier’s “well-
being and future as well as the
implications for [their] son.” Ex. B
at 2. Dr. O’Connor has also been
reluctant to share news about Mr.
Frazier’s case with her close
friends and family, which has
impacted her mood and sleep and                Mr. Frazier, Dr. O’Connor, and their son
parenting. Worse, Dr. O’Connor has             shortly after his birth.
noticed a shift in her son’s behavior. He
struggled with the start of school this past
February and “has experienced difficulty regulating
his emotions,” suffering from “recurrent episodes of
anger or sadness.” Id. For his part, Mr. Frazier has
done everything he can to be present, available,
and helpful from thousands of miles away. As Dr.
O’Connor explains:

       We have started seeing a child psychologist
       in the last few months. Marcus’s support has
       been invaluable during this time. They have
       regular long FaceTime phone calls. Marcus
       has always remained patient, calm, loving
       and practical while discussing anger
       management solutions with            over the
       phone. His regular input and contact has
       been encouraged by our psychologist.
       has requested to talk to his father about
       events at school, and there are times he does not want to share these
       conversations with me. I can’t fathom to think if Marcus is
       incarcerated and          is no longer able to have these conversations
       with his father, and I am unable to reach out when times are tough. I
       don’t know how I would explain this to           and I can’t bear to think
       of the impact this change may make. I have wanted to travel to the US
       with         , but Australian international borders only opened six

                                               12

       Case 1:21-cr-00649-VEC Document 32 Filed 07/07/22 Page 13 of 18




      months ago, and I worry about the trip causing further disruption to
           ’s start to the school.

Ex. B at 2.

        Mr. Frazier “regularly apologises” to Dr. O’Connor for his actions. She knows
that he feels “anguish at being unable to visit and support [their son] during this
trying time.” Ex. B at 2. Dr. O’Connor knows that Mr. Frazier feels especially guilty
that it is no longer COVID-19 that is keeping them apart, but Mr. Frazier’s case
and his own poor decision-making. But Dr. O’Connor has also noticed something
else: that Mr. Frazier’s focus is not only on himself, but rather on the impact his
actions will have on their son in the near and distant future. Dr. O’Connor has
“witnessed a shift in Marcus’s life goals.” Id. Whereas he used to “prioritize his
career achievements above all else,” he is now focused on being “the best father he
can be, to be present and watch [his son] grow into a fine young man.” Ex. B at 2.
Now, Mr. Frazier’s long-term goal is to move to Australia as soon as it is
permissible/possible. As Dr. O’Connor observes, “If devastating actions can have a
silver lining, in this case, it has been for Marcus to not take fatherhood for granted.”
Id.

      E. Mr. Frazier has made an overwhelmingly positive adjustment to
         court supervision.

       Following his arrest, Mr. Frazier readily accepted responsibility for his
crimes and saved the Government significant time and resources by working out a
plea agreement without Rule 16 discovery. Mr. Frazier also redoubled his
employment efforts and obtained a consulting job at a firm in New York City, where
he is making a decent salary and learning to live within his means. See Paystub,
Exhibit D. He received a glowing performance review this past February, which
described his overall performance as follows:

      Demonstrates a disciplined, reliable work ethic, and I am always
      responsive and available to my teams to provide support, key insights,
      ideas and direction. Displays an organized, thorough and efficient with
      time-management and mindful of deadlines. Begins each day fully
      refreshed and prepared for any challenges.

See Performance Review, Exhibit E. Mr. Frazier has also regularly attended
alcoholics anonymous meetings through Sober Miracles (see, e.g., 2022 Attendance
Sheet, Exhibit F) and regularly volunteers his Saturdays with the Coalition for the
Homeless and the Robinhood Foundation, both of which are foodbanks. Critically,
Mr. Frazier continues to participate in mental health treatment, and his most
recent records are attached (Exhibit G).

                                          13

         Case 1:21-cr-00649-VEC Document 32 Filed 07/07/22 Page 14 of 18




   IV.     A Sentence Of Time-Served Followed By 36 Months’ Supervised
           Release, With One Year Of Home Detention, Is Sufficient But Not
           Greater Than Necessary To Satisfy The Statutory Goals Of
           Sentencing Under 18 U.S.C. § 3553(a)

       Mr. Frazier’s stipulated U.S. Sentencing Guidelines range of 63 to 78 months’
imprisonment, while technically correct, is not a useful guide to an appropriate
sentence in this case. In addition to Mr. Frazier’s mitigating personal
circumstances, legitimate criticism of the Guidelines’ focus on (and calculation of)
loss amounts in wire fraud cases compels a downward variance to a sentence of
time-served followed by three-years’ supervised release, including a year of home
detention.

         A. The fraud guideline lacks any empirical or historical basis and
            does not warrant substantial deference at sentencing.

        In considering the weight to be afforded to the Sentencing Guidelines in a
particular case, in Kimbrough v. United States, 128 S. Ct. 558, (2007), the
Supreme Court effectively recognized that not all guidelines are equal: while
some “exemplify the Commission’s exercise of its characteristic institutional
role,” others do not. Id. at 575. In cases involving application of Guidelines that
“do not exemplify the Commission’s exercise of its characteristic institutional
role,” it is “not [] an abuse of discretion for a district court to conclude when
sentencing a particular defendant” that the application of the guideline “yields a
sentence ‘greater than necessary’ to achieve § 3553(a)’s purposes even in a
mine-run case.” Id.; see also, e.g., United States v. Dorvee, 616 F.3d 174 (2d Cir.
2010). In Dorvee, the Second Circuit endorsed the authority of the district court
to disagree with the Guidelines in child pornography cases based solely on policy
considerations where the Guidelines are not based on empirical research and
appear to be “irrational.”

       Indeed, in Rita v. United States, 551 U.S. 338 (2007), the Court reasoned
that if a particular Guideline was originally based on past sentencing practices
and revised in response to sentencing data and other research, then it seems
fair to assume that recommendations truly embody the statutory goals of
§3553(a). Id. at 349. Conversely, when a Guideline is not developed according to
this practice, there is less reason to believe that it embodies the statutory
objectives and deserves deference, even in a mine-run case. Kimbrough, 552 U.S.
at 109. Accordingly, district courts have routinely engaged in the process of
scrutinizing presumptive Guidelines provisions, finding that many of them are
not in fact the product of empirical research or national surveys of sentencing
practices. See, e.g., United States v. Shipley, 560 F. Supp. 2d 739, 744 (S.D.
Iowa 2008) (child pornography guideline); United States v. Galvez-Barrios, 355
                                        14

       Case 1:21-cr-00649-VEC Document 32 Filed 07/07/22 Page 15 of 18




F. Supp. 2d 958, 962 (E.D. Wis. 2005) (illegal reentry guideline).

       U.S.S.G. §2B1.l, the fraud guideline, is an example of one that is not
based on historical sentencing practices or research. The history of §2B1.l shows
the Guideline to lack any sound policy rationale. It was not based on empirical
research concerning deterrent efficacy or any other variable relevant to the
purposes of sentencing. It was not even originally intended as a codification of
past sentencing practices. To the contrary, it was written with the goal of
increasing the severity of sentences over their historic levels. See United States
v. Corsey, 723 F.3d 366, 379 (2d Cir. 2013) (Underhill, J., concurring) (“The loss
guideline … was not developed by the Sentencing Commission using an
empirical approach based on data about past sentencing practices. As such,
district judges can and should exercise their discretion when deciding whether
or not to follow the sentencing advice that guideline provides.”).

       The history of bracket inflation and the extraordinary emphasis on loss
(which can be either actual or intended) renders the loss Guideline
fundamentally flawed. Corsey, 723 F.3d at 380. For example, while imposing a
below-guidelines sentence, Judge Rakoff noted in United States v. Adelson, 441
F.Supp.2d 506, 509 (S.D.N.Y. 2006), that the loss Guideline in fraud cases, in an
effort to appear “objective,” places great weight on putatively measurable
quantities without explaining why it is appropriate to accord such weight to
such factors. Indeed, and as the Sentencing Commission has detailed, so-called
white collar offenders were historically more likely to receive probationary
sentences. The Guidelines tried to modify this practice by making a greater
number of white collar offenders subject to heightened prison terms. See U.S.S.C.,
Fifteen Years of Guidelines Sentencing vi-vii, 15, 44 (Nov. 2004).    This
deviation from past practices was a conscious but largely unjustified and
inexplicable decision by the Commission, which opined that lengthier sentences
were necessary to correct for past under punishment of theft and fraud, to make
white-collar sentences “proportionate” to sentences for drug and violent crimes,
and to effectuate greater deterrence. See id. at 55-56.

      The Commission’s stated reasons for amending the fraud Guideline simply
do not justify imposing harsher sentences and more prison time on convicted
fraudsters. Rather, the Commission’s apparent rationale seems to directly
contradict the statutory prescription that an individual be sentenced based on
his own personal characteristics and his own offense, and that prison terms be
the least amount necessary to punish the individual, promote respect for the
law, and adequately account for the individual’s specific physical and mental
health needs.

      With this in mind, there is no clear evidence that more severe sentences,
                                        15

       Case 1:21-cr-00649-VEC Document 32 Filed 07/07/22 Page 16 of 18




or the more frequent imposition of prison terms, actually provides for greater
deterrence of crime. To the contrary, the weight of the evidence indicates that
increasing the severity of sentences has little deterrent effect. See, e.g., Francis
T. Cullen, et al., Prisons Do Not Reduce Recidivism: The High Cost of Ignoring
Science, 91 The Prison Journal 48S (2011); Michael Tonry, Purposes and
Functions of Sentencing, 34 Crime and Justice: A Review of Research 28-29
(2006); David Weisburg et al., Specific Deterrence in a Sample of Offenders
Convicted of White Collar Crimes, 33 Criminology 587 (1995).

       In sum, the harsh sentences recommended under §2B1.1, based primarily
on loss, are not historically or empirically based, and actually provide little
verifiable benefit while imposing significant costs on the individual defendant
and the community. See, e.g., United States v. Chavez, 230 F.3d 1089, 1092 (8th
Cir. 2000) (Bright, J., concurring).

             1. Section 2B1.1 overemphasizes loss amount.

       Core to the criticism of relying on §2B1.1 as a lodestar in fraud cases is the
Guideline’s overemphasis on loss amount and a failure to recognize other factors
that might more accurately capture an individual’s culpability and/or the harm
from his offense. See, e.g., United States v. Gupta, 904 F. Supp. 2d 349
(S.D.N.Y. 2012) (Rakoff, J.) (describing how fraud guidelines effectively ignore
everything but the loss amount and that many of the resulting Guidelines -
recommended sentences are “irrational on their face”); United States v. Ovid, 09
Cr. 216 (JG), 2010 WL 3940724, at *1 (E.D.N.Y. Oct. 1, 2010) (criticizing§ 2B1.1
for failing to account for “many of the myriad factors that are properly
considered in fashioning just sentences”); United States v. Musgrave, 647 F.
App’x 529, 538-39 (6th Cir. 2016) (explaining that “there is reason to believe
that, because the loss Guidelines were not developed using an empirical
approach based on data about past sentencing practices, it is particularly
appropriate for variances”).

      A study by The American Bar Association Task Force On The Reform Of
Federal Sentencing for Economic Crimes, recommended vast changes to the
fraud Guideline. The Task Force included Second Circuit Judge Gerard Lynch,
Southern District Judge Jed S. Rakoff, and former Eastern District Judge John
Gleeson. See Defense Exhibit H. As a preface to the Report, Task Force members
reached a consensus that the current structural framework for the fraud
Guideline “can be unduly rigid and lead to the arbitrary assignment of values
and the overemphasis of considerations that are more easily quantified to the
detriment of equally relevant considerations that are lesseasily quantified.” The
recommendations included a dramatic decrease in the emphasis on loss (e.g.,
instead of the 18-level enhancement for an approximately $6 million “loss”
                                         16

       Case 1:21-cr-00649-VEC Document 32 Filed 07/07/22 Page 17 of 18




amount, PSR at ¶55, Mr. Frazier would face a 10-level enhancement for the
amount), and a greater emphasis on other 3553(a) factors. Id.

             2. A sentence below Probation’s Guidelines range is also
                necessary to avoid an unwarranted sentencing disparity
                with comparable cases.

       The Court must consider a number of factors in imposing a sentence that
is “sufficient, but not greater than necessary” to meet the goals of the Sentencing
Reform Act. 18 U.S.C. §3553(a). One consideration is “the need to avoid
sentencing disparities among defendants with similar records who have been
found guilty of similar conduct.” 18 U.S.C. §3553(a)(6). The Second Circuit has
found that this section requires a District Court to consider nationwide sentence
disparities. United States v. Ghailani, 733 F.3d 29, 55 (2d Cir. 2013).
Accordingly, the Court should consider the following sentences imposed in cases
involving PPP loan fraud:

   a. United States v. Butziger, 20 Cr. 72 MSM-LDA (D.R.I.). One of the first in
      the country to face PPP loan fraud charges, the defendant was accused of
      obtaining $543,959 in forgivable loans. The Government sought 21
      months’ imprisonment, and the Court sentenced the defendant to time-
      served followed by three years’ supervised release and six months’ home
      detention;
   b. United States v. Jenison, 21 Cr. 90 ALM (S.D. Oh.). Defendant pleaded
      guilty to three counts of wire fraud in connection with her applications for
      nearly $300,000 in COVID-19 relief loans. The Government sought 21
      months imprisonment, but the Court sentenced the defendant to five
      years’ probation, a $250,000 fine, and almost $130,000 in restitution.
   c. United States v. VanScoyk, 21 Cr. 1620 JCH-BGM (D. Ariz.). The
      defendant pleaded guilty to conspiring to fraudulently obtain over $1.2
      million in PPP loans. The Government sought a prison term, and the
      defendant was sentenced to two years’ probation (one of his co-defendants
      received 10 months’ imprisonment, the other eight months).

      B. Given the totality of the circumstances, a non-incarceratory
         sentence of time-served, one-year home detention, and 36 months
         of supervised release is sufficient to punish Mr. Frazier and
         promote respect for the law.

       There is no dispute that, of the PPP loans Mr. Frazier ultimately obtained
fraudulently, the bulk of the money he acquired was seized from his bank accounts
upon his arrest. There can also be no dispute that, throughout his life, Mr. Frazier
has struggled with depression and that his “characterological response to his
                                         17

           Case 1:21-cr-00649-VEC Document 32 Filed 07/07/22 Page 18 of 18




history of relational trauma includes vulnerable self-esteem, deep sense of shame,
feelings of inferiority, need for admiration and status, shallow interpersonal
relationships used mainly to bolster a fragile self, poor emotion regulation, deficits
in judgment, and engaging in self-destructive behaviors.” Ex. A at 7-8. Against this
backdrop, and given the unmistakable connection between his offense conduct and
mental health struggles, Mr. Frazier needs more treatment—not prison. Dr.
Francois has identified Brooklyn Minds as a facility well equipped to provide Mr.
Frazier with the mentalization-based therapy and dialectical behavior therapy he
would benefit from, and notes that he is highly motivated to change the course of
his life. Ex. A at 8. The Court can confirm as much through, inter alia, Dr.
O’Connor’s thoughtful and impassioned letter, and Mr. Frazier’s commitment to
therapy, his outstanding performance at his new job, and his scrupulous compliance
with the terms of his pre-trial release.

       There is no doubt that Mr. Frazier must be punished for his crimes. Forcing
him to endure three more years of court supervision, with the first year spent on
home detention, is sufficient, but not greater than necessary, to achieve this goal,
particularly given the $250-per-month restitution payments Mr. Frazier must make
for the next 20 years. Such a sentence also adequately accounts for Mr. Frazier’s
lack of a criminal history, positive trajectory, and the unnecessary collateral
consequences a term of imprisonment would have on his son and co-parent.

      V.     Conclusion

      For the reasons stated herein and for any that are apparent at Mr. Frazier’s
July 18, 2022, sentencing proceeding, the Court should sentence Mr. Frazier to
time-served followed by three years’ supervised release, including a year of home
detention.

                                                     Respectfully Submitted,



                                                     Andrew J. Dalack, Esq.
                                                     Assistant Federal Defender

Cc:        Government Counsel                        Counsel for Marcus Frazier




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