Government Sentencing Memorandum — U.S. v. Shibley (W.D. Wash.)

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GOVERNMENT’S SENTENCING MEMORNANDUM - 1 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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The Honorable John C. Coughenour 
 
 
 
 
 
 
 
 
UNITED STATES DISTRICT COURT FOR THE 
WESTERN DISTRICT OF WASHINGTON 
AT SEATTLE 
 
 
UNITED STATES OF AMERICA, 
 
Plaintiff 
 
v. 
ERIC R. SHIBLEY, 
             Defendant. 
NO. CR 20-174JCC 
 
 
GOVERNMENT’S SENTENCING 
MEMORANDUM 
 
 
 
 
 
I. 
Introduction 
 
Eric Shibley will be sentenced by this Court for his scheme to fraudulently obtain 
relief funds meant for small businesses suffering because of the COVID-19 pandemic.  
Shibley engaged in scheme to obtain over $3.6 million dollars from COVID-19 relief 
programs set up by the government, including the Paycheck Protection Program (“PPP”) 
and Economic Injury Disaster Loan (“EIDL”) program run by the Small Business 
Administration (“SBA”).  As part of his scheme, Shibley submitted false information and 
documentation about the payroll, employees, and revenues of the entities he controlled in 
order to obtain pandemic relief funds.   
Per the Section 3553(a) factors, a sentence of 97 months of imprisonment, and 
three years of supervised release is the appropriate sentence in this case for adequate 
deterrence, and to recognize the seriousness and nature of this offense. 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 2 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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II. 
Factual Background 
 
In early 2020, as the COVID-19 pandemic spread across the country causing death 
and economic distress, the government assembled relief programs to help those whose 
livelihoods were jeopardized.  However, Shibley, who had no employees or payroll, took 
advantage of the programs by claiming to own companies with employees and payroll 
that did not exist.  He fraudulently applied for funds from both the PPP and EIDL 
programs in the name of fake businesses, supported by false tax forms.  As part of his 
scheme, Shibley provided false and fraudulent information about entities that he 
controlled to participating lenders and the SBA, including: 
• That Shibley had over 150 employees across six different businesses; 
• That Shibley paid payroll of approximately $1,000,000 a month across his six 
different businesses; and 
• That Shibley paid payroll taxes for his over 150 employees. 
Further, in his PPP applications, Shibley falsely affirmed that he was not on probation, 
when he was on probation for violating a protection order from Skagit County.   
A. CARES Act 
 
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal 
law enacted in March 2020 and designed to provide emergency financial assistance to the 
millions of Americans who are suffering the economic effects caused by the COVID-19 
pandemic. One source of relief provided by the CARES Act was the authorization of 
forgivable loans to small businesses for job retention and certain other expenses through 
the PPP.  A PPP loan application must be processed by a participating financial 
institution (the lender). If a PPP loan application is approved, the participating financial 
institution funds the PPP loan using its own monies, which are 100% guaranteed by the 
Small Business Administration (“SBA”). PPP loans are obtained by submitting an 
application to a financial institution along with supporting documentation as to the 
business’s payroll expenses.  

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 3 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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The CARES Act also authorizes the SBA to provide EIDLs up to $2 million to 
eligible small businesses experiencing substantial financial disruption due to the COVID-
19 pandemic.  In addition, pursuant to the CARES Act, the SBA is authorized to issue 
advances of up to $10,000 to small businesses within three days of applying for an EIDL.  
The amount of the advance was determined by the business’s number of employees.  The 
advances did not have to be repaid.  Unlike PPP loan applications, EIDL applications are 
submitted directly to the SBA.  EIDL funds can be used for payroll expenses, sick leave, 
production costs, and business obligations, such as debts, rent, and mortgage payments. 
B. Shibley’s scheme to obtain multiple fraudulent PPP Loans and EIDLs 
From March 2020 through June 2020, Shibley submitted 26 PPP applications and 
13 EIDL applications on behalf of seven businesses that did not exist – Eric R Shibley 
MD PLLC, SS1 LLC, ES1 LLC, The A Team Holdings LLC, Dituri Construction LLC, 
SFC LLC a/k/a Seattle’s Finest Cannabis LLC, and a sole proprietorship (the “Shibley 
entities”).  The loans are summarized in Government’s Exhibit 205.  Shibley knew that 
these entities did not exist and did not have employees or revenue; nevertheless, his 
applications represented that he had over 150 employees and was paying over $1 million 
in payroll a month.  He included fake IRS tax forms with his applications to support these 
made-up numbers.  On the applications, Shibley repeatedly certified that the information 
and documents he provided in support of the application were “true and accurate in all 
material respects.”   
While some of the Shibley entities were registered with Washington state, none of 
them had filed taxes with the IRS or Washington state in 2019 and 2020.  Furthermore, 
an analysis of the bank accounts that Shibley controlled showed that they were not paying 
over a million dollars a month in payroll in 2019 and 2020.  Many of the entities did not 
even have bank accounts until after Shibley applied for the loans. 
As a result of his scheme, Shibley actually received over $2.8 million in PPP and 
EIDL funds.  After Shibley received loan money, he immediately transferred the money 
to other accounts and attempted to withdraw the fraudulent loan proceeds in cash.  He 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 4 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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continued to withdraw money even after learning that the government had questions 
about his loan applications.  He was successful in withdrawing approximately $200,000 
in cash that the government was unable to trace.  
Federal agents caught on to Shibley’s scheme and arranged undercover calls with 
Shibley to verify the loan documents.  After speaking with federal agents posing as 
lender representatives, Shibley attempted to conceal his scheme by providing the lenders 
with a list containing fake employee names and social security numbers.  The lists, which 
were supposed to be for two separate businesses, were nearly identical.  But more 
concerningly, none of the people on the lists actually worked for Shibley.  One of the 
names was of an individual who died in 1987.  Another one was a woman who had never 
heard of nor worked for Shibley.  Shibley used the identities of these individuals to 
further his fraudulent scheme. 
Once Shibley became aware that lenders and investigators were onto his scheme, 
he doubled down.  He continued to submit loan applications, even after learning of the 
“federal investigation” at the end of May.  And he continued to attempt to withdraw the 
fraudulent loan proceeds in cash up until his arrest at the end of June.  
C. Obstruction of the Grand Jury Investigation 
Shibley was approached by federal agents in June 2020 and served with federal 
grand jury subpoenas for documents issued Shibley and his entities.  In response to the 
subpoenas, Shibley provided the government with some of the same false IRS Forms 941 
(for SS1 LLC, The A Team Holdings LLC, Dituri Construction LLC, SFC LLC, Eric R. 
Shibley MD PLLC, and ES1 LLC) and W-3 (for SS1 LLC, ES1 LLC, and Eric R. 
Shibley MD PLLC) that he submitted in support of his fraudulent PPP applications.  PSR 
at ¶ 18; see also GX 225 at pp. 114-132. None of these forms had been filed with the 
IRS. 
Furthermore, Shibley testified at trial that he obstructed the grand jury 
investigation by not turning over documents that the grand jury subpoenas called for. As 
an example, Mr. Shibley testified that he “chose not to” turn over the employee names for 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 5 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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the Dituri Construction LLC business. US v. Shibley Trial Transcript, Testimony of Eric 
Shibley, November 18, 2021, p. 569, line 19. 
II. 
Procedural History 
A. Prosecution 
On June 29, 2020, Shibley was arrested pursuant to a complaint for one count of 
Wire Fraud, in violation of Title 18, United States Code, Section 1343 and one count of 
Bank Fraud, in violation of Title 18, United States Code, Section 1344.  See Complaint, 
ECF No. 1.  On October 15, 2020, Shibley was indicted by a federal grand jury on fifteen 
counts of wire fraud, bank fraud, and money laundering.  ECF No. 31. 
B. Pretrial Detention  
After being arrested in June 2020, Shibley was released on an appearance bond 
with a condition to not commit any violations of law.  In September, while released on 
bond in this case, Shibley was arrested after the Seattle Police Department was twice 
called to his West Seattle residence on reports of domestic violence by Shibley against 
his girlfriend. Shibley was subsequently charged in Seattle Municipal Court with assault.  
In responding to the second assault, the responding officer noticed the victim had fresh 
bruises under both her eyes, a laceration on her nose, and swelling around her left middle 
finger when taking the report.  PSR at ¶ 42.  That case remains pending.  Id.  As a result 
of the arrest, Defendant was charged with two violations of the conditions of his release 
in this case: 1) committing the crime of assault on or about September 12, 2020; and 2) 
committing the crime of assault on or about September 15, 2020.  
 
As a result of Shibley’s arrest while out on pretrial release, Judge Peterson 
revoked Shibley’s bond on September 28, 2020 and ordered him detained pending trial.  
ECF No. 29.  In her order revoking bond, Judge Peterson found that Shibley was unlikely 
to abide by any release conditions and noted that Shibley was alleged to have committed 
“the underlying crime and the two domestic violence assaults while on probation for 
violating a no contact/protection order. Defendant is alleged to have failed to appear for 
his appointments for domestic violation as required by his probation. Defendant’s 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 6 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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criminal history appears to show that Defendant violated prior protection orders on at 
least four different occasions.”  Id.  Furthermore, Judge Peterson noted that Shibley 
“appears to have provided misleading information to his pretrial service officer when 
questioned about the recent allegations of domestic violence assault.”  Id. 
 
On November 20, 2020, Judge Peterson denied Shibley’s motion for review of the 
detention order.  ECF No. 58.  Shibley sought review of his detention primarily because 
he was not receiving anti-psychotic medication that he claimed to be taking at the FDC.  
Id. at 2.  In denying that motion, Judge Peterson noted that “although [Shibley] now 
claims to take anti-psychotic medication, when he was interviewed in June 2020 [by 
Pretrial Services], with the assistance of counsel, he denied any mental health issues.”  Id. 
 
In her order, Judge Peterson also noted concern about another “attempt by 
Defendant to circumvent the bond conditions set by the Court.”  Id. at 3.  On July 21, 
2020, while on pretrial release, Shibley tried to purchase another property, which would 
have required the consent of his pretrial services officer.  After his request to purchase the 
property was denied by his officer, Shibley persuaded his girlfriend (and the victim in the 
September 2020 assault case) “to purchase the property in her name even though she was 
unemployed, had no income, and was dependent on Defendant.”  Id. 
 
On February 24, 2021, this Court denied Shibley’s motion to revoke Judge 
Peterson’s detention order.  ECF No. 72.  This Court found that there was probable cause 
to believe that Shibley had committed the crime of assault while on pretrial release.  Id. at 
7.  The Court noted that Shibley should be detained because “he is unlikely to abide by 
any conditions of release that would ensure M.B. and the community’s safety.”  Id.  The 
Court also found that the evidence of the July 2020 loan was “sufficiently compelling for 
this incident to inform the Court’s assessment of whether Mr. Shibley is likely to abide 
by his conditions of release under Section 3148(b)(2)(B).”  Id.at 8. 
C. Competency Proceedings 
At a status hearing with the Court on November 16, 2020, Shibley raised certain 
mental health concerns and later filed a motion for a competency evaluation.  ECF Nos. 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 7 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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49, 52.  On November 25, 2020, the Court granted Shibley’s motion for a competency 
evaluation.  ECF No. 62.  Dr. Cynthia Low, a forensic psychologist at FDC SeaTac, 
conducted the evaluation and provided the Court with a report.  ECF No. 68.  On 
February 24, 2021, the Court found Shibley competent to stand trial after a review of Dr. 
Low’s competency report which found that Shibley was “most likely malingering.”  Id.  
The Court summarized the contents of the report in finding Shibley competent: 
After administering six psychological tests to Mr. Shibley, reviewing his 
available medical history, and evaluating his external communications, Dr. 
Low concluded that Mr. Shibley “is most likely malingering for the purpose 
of obtaining pre-trial release and evading criminal prosecution.” (Dkt. No. 
68 at 24.) In short, Mr. Shibley’s performance on the psychological tests 
was so poor that it suggests that he is “feign[inga] cognitive and memory 
deficits and psychotic symptoms [because] he feels it will benefit his legal 
case.” (Id. at 25.) In addition, Mr. Shibley has not provided any evidence of 
a history of mental health issues. In fact, he affirmatively denied any 
history of mental health issues when he was interviewed by the Probation 
Office shortly after he was arrested in June 2020, (Dkt. No. 3 at 3), and 
when he was booked into the Federal Detention Center on September 21, 
2020, (Dkt. No. 68 at 12). Finally, the e-mails Mr. Shibley sent from the 
FDC suggest that he is competent and is not suffering from the severe 
mental health issues he claims. Mr. Shibley wrote lengthy e-mails to his 
business partners explaining his legal circumstances and providing them 
with detailed instructions about how to manage his real estate investments 
and personal affairs while he is incarcerated. (Id. at 16–18.) For example, 
he told them how to pay various mortgages, evict his tenants, access his 
bank accounts, pay his bills, and suggested prices at which they should sell 
his properties. (Id.) These e-mails suggest that he is not experiencing 
mental health issues that would impact his ability to understand the nature 
and consequences of the proceedings against him and assist in his defense. 
ECF No. 72 at 4-5. 
D. Trial and Presentence Report 
 
After a four-day trial, a federal jury found Shibley guilty of all fifteen counts in the 
Indictment on November 18, 2021.  A Presentence Report was prepared by the Probation 
Office and the final report was distributed on February 22, 2022.  The government 
accepts the PSR as written and withdraws any outstanding objections to the PSR.  

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 8 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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The government agrees with the PSR that the loss amount is more than 3,500,000, 
but less than $9,500,000, thus the base offense level should be increased by 18 levels 
pursuant to USSG §2B1.1(b)(1)(J).  For purposes of this guideline, “loss is the greater of 
actual loss or intended loss.”  While Shibley actually obtained over $2,800,000, he 
intended to obtain over $3,500,000 in loans.   
Shibley submitted over 25 PPP loan applications.  Because program rules allowed 
for companies to submit more than one application per company, loss should be 
calculated using the highest loan amount Shibley sought for each company / tax 
identification number (“EIN”).  In some instances, Shibley submitted applications using 
the same business name, but a different EIN.  In those instances, using a different EIN 
shows Shibley’s intent to obtain two different loans for the same business.  Using this 
method, the loss amount is $3,639,650.  The loans that make up this calculation are 
detailed below: 
PPP Loans 
Entity 
EIN 
Loan Amount 
Lender 
GX 
Dituri Construction 84-4218508 
$980,000 
Customers Bank 
/ Ready Capital 
3 
The A Team 
Holdings 
83-3477088 
$960,000 
Customers Bank 
/ Ready Capital 
1 
ES1  
46-1305849 
$100,000 
TCF Bank 
22 
SS1 
85-0767509 
$820,000 
Harvest Small 
Business Finance 
5 
Seattle’s Finest 
Cannabis 
82-3383580 
$100,000 
TCF Bank 
2 
Eric R Shibley MD 
PLLC 
46-1305849 
$94,750 
Ready Capital 
11 
Eric R Shibley MD 
PLLC 
46-1599052 
$93,900 
Idaho Central 
Credit Union 
19 
 
 
 
 
 
 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 9 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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EIDLs 
Entity 
EIN 
GX 
Amount 
Approved1 
SBA Loan 
Number 
Dituri Construction 
84-4218508 
27 
$115,000  
3304338608 
ES1  
46-1305849 
32 
$90,000  
3304228652 
SFC LLC 
82-3383598 
29 
$75,000  
3304338580 
Seattle’s Finest Cannabis 
82-3383580 
31 
$15,000  
3601282989 
SS1 
85-0767509 
28 
$115,000  
3304338551 
Eric R Shibley MD PLLC 
46-1599052 
34 
$31,000  
3600262629 
Eric Shibley 
N/A 
35 
$25,000  
3601212749 
Eric DBA Shibley 
N/A 
36 
$25,000  
3601212786 
All of the loans detailed above are part of the same scheme and contained the same false 
statements.   
Shibley objects to the addition of the sophisticated means enhancement pursuant 
to U.S.S.G. §2B1.1(b)(10).  Shibley’s scheme included the use of shell companies and 
false tax forms, which fit squarely within the sophisticated means enhancement.  Further, 
other PPP schemes sentenced in this district have included the sophisticated means 
enhancement.  See United States v. Zhang, CR20-169 RAJ; United States v. Mohan, 
CR21-41 JCC; United States v. Hsu, CR20-191 JLR. 
III. 
Sentencing Recommendation 
 
The § 3553(a) factors warrant a sentence of 97 months followed by three years of 
supervised release.  The § 3553(a) factors do not support the 48 month term of 
imprisonment recommended by the Probation Office of 48 months.  See 
Recommendation at 3-4.    
 
 
 
1 The government has attached SBA Rapid Decision forms to this submission that show that 
amount that was approved and accepted for these loans as Exhibit A. 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 10 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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A. 
Nature and Circumstances of the Offense  
 
As the government, nonprofits, and businesses worked to try and help small 
businesses suffering from the effects of the unprecedented COVID-19 pandemic, Shibley 
engaged in a cash grab.   
This offense deserves punishment because of its extensive nature.  While the 
offense period was short, spanning from March to June 2020, Shibley fraudulently 
submitted multiple applications to the PPP and EIDL program and obtained over $2.8 
million in fraudulent loan funds.  This was not a one-time error in judgment, but rather a 
calculated attempt to take advantage of the relief systems set up for those that were truly 
in need because of the pandemic.  Shibley applied for 26 PPP loans and 13 EIDLs using 
false statements about his employees and payroll supported by fake tax forms.    
 
Furthermore, Shibley did not simply exaggerate the state of a business that he 
owned.  None of the Shibley entities had employees or payroll, despite his 
representations that his entities had approximately 150 employees and they were paying 
over a million dollars of payroll per month. Shibley created fake paperwork and tax 
forms to create the illusion that these businesses had real employees, paid payroll, and 
had been in operation as of February 15, 2020.  He submitted outright lies to lenders and 
the government to perpetuate his scheme.  Shibley sought to get money from any source 
and by any means available, without any regard for the harm it caused those who actually 
needed the funds. 
At a time when millions of Americans and small business owners were suffering 
from the effects of the COVID-19 pandemic, Shibley elected to defraud the very 
programs set up to help those in need.  By applying for and receiving these funds, Shibley 
deprived suffering small business owners of the opportunity to get the funds.  
Furthermore, Shibley had sizable assets at the time of the conduct – his home in Seattle 
worth between $1.5 and 4 million and three rental properties worth approximately $2 
million.  PSR at ¶ 64.  This offense was motivated purely by greed.  See United States v. 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 11 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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Khan, No. 12-CR-0860 YGR, 2014 WL 2930656, at *5 (N.D. Cal. June 27, 2014) (in a 
bank fraud case, finding upward variance in sentencing was warranted because the 
defendant’s “only apparent motive was greed”); c.f. United States v. Eggleston, 347 
F.Supp.3d 381, 384 (E.D. Wisc. 2018) (in bank fraud case, noting as a mitigating factor 
that embezzlement offense was committed to support business rather than for personal 
enrichment). 
And Shibley would have continued to seek COVID-19 relief funds without law 
enforcement intervention – even after he was interviewed by agents posing as lender 
representatives in May 2020 and later law enforcement in June 2020, he continued to 
apply for PPP and EIDL money and attempt to take out ill-gotten gains in cash until he 
was arrested at the end of June.  Mere days after being approached by law enforcement 
and served grand jury subpoenas in June 2020, Shibley attempted to take out EIDL 
proceeds in cashier’s checks from Verity Credit Union. 
Finally, the offense was not limited to obtaining funds fraudulently.  It also 
involved significant efforts towards concealing the true nature of his scheme.  When the 
lenders and law enforcement started to inquire about the loans, Shibley did not merely 
lie; he took the additional step of providing fake employee names and social security 
numbers to the lenders.  The use of identities of unrelated individuals to conceal the 
scheme makes this offense even more serious.  Shibley provided lenders with the last 
four digits of their social security numbers, phone numbers, and names of individuals 
who had never even heard of Shibley, let alone worked for him.  While Shibley was not 
charged with identity theft, the use of other people’s identities to further his scheme adds 
to the seriousness of this offense. 
And Shibley’s efforts to conceal the scheme did not stop with the lenders:  Shibley 
also obstructed a federal grand jury investigation by passing along fake tax forms to the 
grand jury investigating his conduct.  See United States v. Hayes, 190 F.3d 939, 947 (9th 
Cir. 1999), reh’g en banc granted, opinion vacated, 201 F.3d 1255 (9th Cir. 2000), and 
on reh’g en banc, 231 F.3d 663 (9th Cir. 2000) (in a mail fraud case, affirming an 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 12 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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obstruction enhancement “on the ground that [the defendant] submitted false documents 
to the grand jury.”); United States v. Johnson, 56 F.3d 74 (9th Cir. 1995) (finding an 
obstruction enhancement was proper in a conspiracy bank robbery case because the 
defendant intentionally gave material, false testimony to the grand jury).   
 
B.  
The History and Characteristics of the Defendant 
According to the PSR, Shibley has a criminal history category II.  PSR at ¶ 40.  
Shibley has a string of domestic violence arrests and was on probation for a violation of a 
no contact order at the time of the offense.   PSR at ¶¶ 39, 42-47.   As detailed above, 
Shibley was also arrested for two separate domestic violence assaults while on pretrial 
release in this case.   
Professionally, Shibley went to medical school in Bangladesh, where he was 
raised.  PSR at ¶¶ 49-50.  He immigrated to the United States and completed a residency 
program in Tennessee in 2010.  PSR at ¶¶ 50, 52.  After his residency, Shibley moved to 
Washington and took a job at Snoqualmie Valley Hospital.  After four months of work at 
the hospital, Shibley was fired after he documented a patient history and physical without 
having examined the patient.2  PSR at ¶ 53.  As a result, the Washington State 
Department of Health placed Shibley’s credential to practice as a physician and surgeon 
on probation in 2012. 
After being fired from the hospital, Shibley then opened his own medical clinic.  
Id.  However, in January 2020, Shibley’s license to prescribe controlled substances was 
put in summary restriction.  In August 2020, Shibley’s license was summarily suspended 
after the Washington Medical Commission determined that Shibley had provided 
“substandard care of patients with regard to his prescribing of controlled substances.”  
Furthermore, the Commission determined that Shibley continued to prescribe controlled 
substances after his license had been summarily suspended in January 2020.3 
 
2 Shibley claimed in the PSR that he resigned “in protest in order to avoid what he considered 
unethical medical practices.”   
 
3 The August 2020 Washington Medical Commission Order is attached as Exhibit B. 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 13 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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Shibley’s disregard of court orders, pretrial supervision, probation, and the 
medical commission demonstrate that he is incapable of abiding by instructions from 
courts and other authority figures.  
C. 
The Need for Adequate Deterrence 
In this case, the need for specific deterrence of Shibley is the most compelling 
factor warranting an eight year term of imprisonment.  Shibley’s criminal record and 
conduct after being arrested in this case, taken with his history on non-compliance with 
no contact orders, medical commission orders, and the fact that Shibley committed the 
underlying crime and two more domestic violence assaults while on probation in his 
Washington State case indicates that he has been unwilling to abide by Court rules.  That 
casual attitude about the law appears to have carried over to this offense where he was 
willing to take advantage of vulnerabilities in pandemic relief programs.  And the 
sentence should reflect that Shibley repeatedly engaged in criminal conduct as it related 
to these programs:  he submitted 26 PPP applications and 13 EIDL applications and was 
only stopped upon being arrested.   
Beyond Shibley’s unwillingness to abide by the terms of the Court and other 
authority figures, Shibley also attempted to manipulate the competency evaluation 
process in order to evade prosecution.  His actions throughout the pendency of this case 
demonstrate a lack of respect for these proceedings. 
These concerns are heightened because Shibley refuses to accept any 
responsibility for his actions, even after being convicted at trial.  Indeed, the PSR notes 
that Shibley continues to maintain that he has created several businesses and “disputes 
what the government proved at trial.”  PSR at ¶ 62.  Furthermore, Shibley testified in his 
own defense at trial and asserted that he really did have over 150 employees and really 
was paying over $1 million a month in payroll, despite there being no evidence to support 
that assertion.  See United States v. Magana-Guerrero, 80 F.3d 398, 402 (9th Cir.1996) 
(“Lying with the hope of avoiding a degree of culpability or punishment is the very 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 14 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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antithesis of acceptance of responsibility.”).  Given all of these considerations, a 
significant sentence is necessary to deter Shibley from future criminal conduct. 
In addition to specific deterrence to Shibley, the sentence in this case must send a 
clear message to the defendant and other offenders that there are serious consequences 
for defrauding government and other pandemic relief programs.  See United States v. 
Khan, No. 12-CR-0860 YGR, 2014 WL 2930656, at *5 (N.D. Cal. June 27, 2014) (noting 
“the circumstances of [the defendant’s] white collar offenses, the need for a 
custodial sentence of sufficient length was appropriate to reflect the seriousness of the 
offense, promote respect for the law, and, quite importantly, afford deterrence to further 
and similar criminal conduct”).  Actors like Shibley who seek to defraud these programs 
make it more difficult for administrators of government and other relief programs to get 
aid to individuals that qualify for and need it.  The defendant’s sentence should serve as a 
warning and deterrent to others inclined to exploit pandemic relief programs.  
D. 
The Sentencing Guidelines and similarly situated defendants   
Section 3553(a) requires that the Court consider the need to avoid unwarranted 
sentence disparity among similarly situated defendants.  Courts have imposed meaningful 
jail sentences in similar cases where defendants defrauded the PPP loan program.  See, 
e.g., United States v. Lee Price III, 20-CR-522, S.D.TX, (imposing 110-month sentence 
on an individual who fraudulently applied for two PPP loans with a loss of $5.5 million); 
United States v. Thomas Smith, 20-CR-196, E.D.WI, (imposing 57-month sentence on an 
individual who led a scheme to apply for seven PPP loans with a loss of $1.4 million); 
United States v. Ganell Tubbs, 20-CR-193, E.D.AR (imposing 41-month sentence on an 
individual who fraudulently applied for two PPP loans with a loss of $1.9 million).  
Based on these cases, a meaningful, eight-year jail sentence is appropriate here.   
The other cases charged in this District are not comparable.  See United States v. 
Zhang, CR20-169 RAJ; United States v. Mohan, CR21-41 JCC; United States v. Hsu, 
CR20-191 JLR. The schemes in these cases were far less extensive that Shibley’s scheme 
to submit more than 30 loan applications seeking more than $3.6 million.  All of these 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 15 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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defendants did not have a criminal history, while Shibley was on probation for domestic 
violence and then arrested while on bond.  And these defendants all accepted 
responsibility for their crimes, unlike Shibley who lied on the witness stand and failed to 
accept responsibility in the post-trial process.   
A significant sentence is appropriate because of Shibley’s behavior throughout the 
pendency of this case and the fact that Shibley has not accepted any responsibility for his 
crimes.  A low sentence is inappropriate for a defendant who has consistently refused to 
take accountability for his behavior, obstructed the investigation, did not abide by the 
terms of his pretrial release, abused the competency evaluation process, and perjured 
himself during his testimony at trial. 
Finally, the Sentencing Guidelines support a 97-month sentence – this is the low 
end of the applicable range.  Consistent application of the Guidelines avoids unwarranted 
disparities in cases involving similar conduct.  While there can be valid reasons to depart 
from the applicable Guidelines, but no such reasons apply in this case. 
E. 
Consideration of the Types of Sentences Available and to Reflect Policy 
Statements 
In testimony on April 20, 2021 by Hannibal “Mike” Ware, the Inspector General 
of the U.S. Small Business Administration, he stated, “[t]here is no higher priority for our 
office than providing oversight of SBA and the taxpayer’s funds at risk through the 
Coronavirus Aid, Relief, and Economic Security (CARES) Act ensuing legislation and 
related pandemic response laws aimed at mitigating the pandemic.”  See Statement for 
the Record, April 20, 2021, U.S. House Committee on Small Business Administration, 
available at https://www.sba.gov/sites/default/files/202104/Statement%20for%20the%20 
Record%204.20.21%20-%20508.pdf.  In his written statement, Inspector General Ware 
described the fraud-prevention initiatives which were designed to protect program funds 
from opportunistic criminals.  He noted that the PPP funding put “strain” on the SBA’s 
operations and revealed some of the “systemic weaknesses” in the SBA’s programs.  Id. 
at 4.   

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 16 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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The federal government should be able to provide emergency funds like PPP loans 
to the deserving public without having to feel constrained by possible fraudsters who 
seek to profit from the national disaster.  It is important to impose a significant sentence 
on someone who did not just misrepresent himself in a loan program in the wake of a 
national disaster, but who acted brazenly, getting loan after loan, and refusing to stop 
even once he was aware investigators were onto him. 
F. 
Restitution and Forfeiture4 
Restitution is governed by the Mandatory Victims Restitution Act.  See 18 U.S.C. 
§ 3663A.  In pertinent part, the Act provides that “the court shall order…that the 
defendant make restitution to the victim of the offense” when the offense of conviction or 
plea agreement is one listed in the statute, including those where “an identifiable victim 
or victims has suffered a…pecuniary loss.”  18 U.S.C. § 3663A(c)(1)(B).    
The restitution amount is calculated based on the actual loss incurred by the 
victim.  See United States v. Gagarin, 950 F.3d 596, 607 (9th Cir. 2020), cert. denied, 
141 S. Ct. 2729, 210 L. Ed. 2d 887 (2021).   In a scheme offense, the amount of 
restitution “may include all losses caused during the course of that scheme, conspiracy or 
pattern.”  United States v. Gamma Tech Indus., Inc., 265 F.3d 917, 927 n.10 (9th Cir. 
2001).  A district court has “wide discretion in fashioning restitution orders.”  United 
States v. Grovo, 826 F.3d 1207, 1221 (9th Cir. 2016).  The government is required to 
prove the amount of the victim’s loss for restitution purposes by a preponderance of the 
evidence.  See United States v. Peterson, 538 F.3d 1064, 1075 (9th Cir. 2008).  A victim 
under the MVRA is “any person directly harmed by the defendant’s criminal conduct in 
the course of the scheme.”  18 U.S.C. § 3663A(a)(1)-(2) 
As proved at trial, Shibley obtained over $2.8 million in loan funds through his 
scheme.  Certain lenders were able to recover some of the money loaned, thus a 
 
4 Attached to this filing as Exhibit C is a victim impact statement from Celtic Bank.  Should any 
other victims provide a statement in advance of sentencing, the government will provide it to the 
Court.  
 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 17 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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restitution order is not warranted for the money that was recovered.5  Excluding the 
money that was recovered by those lenders, the government requests that the Court enter 
a restitution order in the amount of $1,438,000, to be divided by the below victims, as 
part of the sentence. 
For the PPP loans, the lenders are the victims for the purposes of restitution.  
Huntington Bank6 and Customers Bank7 are entitled to restitution for the funded loans as 
detailed below: 
 
For the EIDLs, the SBA is the victim for purposes of restitution.  Both EIDL loans 
and advances that Shibley received are detailed below:  
 
 
5 The loans that were funded but recalled are detailed below: 
 
 
6 TCF Bank funded the loans.  Huntington Bank acquired TCF Bank in 2021.  US v. Shibley 
Trial Transcript, Testimony of David Haagsma, November 16, 2021, p. 373, lines 3-4. 
 
7 This loan was funded by Customers Bank, even though it was reviewed and approved by Ready 
Capital.  US v. Shibley Trial Transcript, Testimony of John Mosier, November 16, 2021, p. 373, 
lines 19-23. 

 
 
 
GOVERNMENT’S SENTENCING MEMORNANDUM - 18 
United States v. Eric Shibley, CR20-174JCC 
UNITED STATES ATTORNEY 
700 STEWART STREET, SUITE 5220 
SEATTLE, WASHINGTON 98101 
(206) 553-7970 
 
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The Court entered a Preliminary Order of Forfeiture and Forfeiture Order on 
January 21, 2022.  ECF No. 144.   
V. 
Conclusion 
 
Based on the foregoing, the United States respectfully requests that this Court 
impose a sentence of 97 months of imprisonment, followed by three years of supervised 
release, and order Shibley to pay $1,438,000 in restitution to the victims named above. 
The government submits that an eight-year sentence is sufficient, but not greater than 
necessary, to satisfy the purposes of sentencing.     
Dated this 1st day of March 2022. 
Respectfully submitted,  
NICHOLAS W. BROWN 
United States Attorney 
 
JOSEPH S. BEEMSTERBOER 
Acting Chief, Fraud Section 
U.S. Department of Justice 
 
s/Brian Werner 
 
 
 
BRIAN WERNER 
Assistant United States Attorney 
700 Stewart Street, Suite 5220  
Seattle, Washington 98101 
Telephone: (206) 553-2389 
Fax:  
(206) 553-2502 
E-mail:  Brian.Werner@usdoj.gov 
 
s/Laura Connelly 
 
 
     
LAURA CONNELLY 
Trial Attorney 
1400 New York Ave. NW 
Washington, D.C. 20005 
Telephone: (202) 307-1423 
Fax:  
(202) 514-0152 
E-mail:   Laura.Connelly@usdoj.gov

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