Court filing
Government’s Sentencing Position for Defendant Steven R. Goldstein — United States v. Goldstein (Dkt. 42, C.D. Cal.)
Summary
The government's sentencing position for Steven R. Goldstein in United States v. Goldstein, No. 2:20-cr-00597-SB, in the U.S. District Court for the Central District of California, filed April 12, 2021 as Document 42 by Assistant U.S. Attorney Charles E. Pell for Acting U.S. Attorney Tracy L. Wilkison, ahead of an April 27, 2021 hearing. It states that Goldstein pleaded guilty pre-indictment, on December 7, 2020 under a written plea agreement, to the single count of an information charging fraud involving major disaster or emergency benefits under 18 U.S.C. § 1040(a)(2). The government asks the court to impose 21 months of imprisonment, 3 years of supervised release, $655,000 restitution and a $100 special assessment.
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Filed April 12, 2021 in Steven R. Goldstein; one of 2 filings from this case.
Record facts
| Court | U.S. District Court for the Central District of California |
|---|---|
| Filed | 2021-04-12 |
Cite this document
“Government’s Sentencing Position for Defendant Steven R. Goldstein — United States v. Goldstein (Dkt. 42, C.D. Cal.).”
U.S. District Court for the Central District of California, No. 2:20-cr-00597, Doc. 42, filed 2021-04-12. Archived at Pandemic Darlings, https://pandemicdarlings.com/court-filings/us-v-steven-r-goldstein/2021-04-12-government-s-sentencing-position-for-defendant-steven-r-gold-dkt-42/
, SHA-256 281d6d2289549c67920274e2fbacb24f29b34c72cacc7c91d37219aa0be87dba.Full text
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 1 of 12 Page ID #:181
1 TRACY L. WILKISON
Acting United States Attorney
2 BENJAMIN R. BARRON
Assistant United States Attorney
3 Chief, Santa Ana Branch Office
CHARLES E. PELL (Cal. SBN 210309)
4 Assistant United States Attorney
Santa Ana Branch Office
5 411 West Fourth Street, Suite 8000
Santa Ana, California 92701
6 Telephone: (714) 338-3542
Facsimile: (714) 338-3561
7 E-mail: charles.e.pell2@usdoj.gov
8 Attorneys for Plaintiff
UNITED STATES OF AMERICA
9
10 UNITED STATES DISTRICT COURT
11 FOR THE CENTRAL DISTRICT OF CALIFORNIA
12 UNITED STATES OF AMERICA, No. 2:20-cr-00597-SB
13 Plaintiff, GOVERNMENT’S SENTENCING POSITION
FOR DEFENDANT STEVEN R. GOLDSTEIN
14 v.
15 STEVEN R. GOLDSTEIN, Hearing Date: April 27, 2021
Hearing Time: 8:00 a.m.
16 Defendant.
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21 Pursuant to Rule 32 of the Federal Rules of Criminal Procedure,
22 plaintiff United States of America, by and through its counsel of
23 record, the acting United States Attorney for the Central District of
24 California and Assistant United States Attorney Charles E. Pell,
25 hereby files its sentencing position for defendant Steven R.
26 Goldstein.
27 This sentencing position is based upon the attached memorandum
28 of points and authorities, the files and records in this case, and
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 2 of 12 Page ID #:182
1 such further evidence and argument as the Court may permit.
2 Dated: April 12, 2021 Respectfully submitted,
3 TRACY L. WILKISON
Acting United States Attorney
4
BENJAMIN R. BARRON
5 Assistant United States Attorney
Chief, Santa Ana Branch Office
6
7 /s/ Charles E. Pell
CHARLES E. PELL
8 Assistant United States Attorney
Santa Ana Branch Office
9
Attorneys for Plaintiff
10 UNITED STATES OF AMERICA
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Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 3 of 12 Page ID #:183
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 Defendant Steven R. Goldstein pleaded guilty pre-indictment to
4 one count of fraud involving major disaster/emergency benefits that
5 involved an intended loss of more than $1 million, with actual loss
6 of $655,000. The government agrees with the Guidelines calculations
7 of the Probation Office as set forth in the PSR, which found that
8 defendant has a final offense level of 20 and criminal history
9 category of I, resulting in a Guidelines sentencing range of 33 to 41
10 months of imprisonment.
11 Based upon the facts, the government believes that a low end
12 Guideline sentence, after applying a two-level COVID variance and for
13 the reasons in the concurrently-filed under seal filing by the
14 government, is appropriate in this case: 21 months of imprisonment,
15 followed by three years of supervised release.
16 II. BACKGROUND
17 A. Procedural Background
18 On November 27, 2020, defendant was charged by criminal
19 information with fraud in connection with major disaster and
20 emergency benefits, in violation of 18 U.S.C. § 1040(a)(2). (DE 20.)
21 On December 7, 2020, pursuant to a written plea agreement (DE
22 24), defendant pleaded guilty to the sole count of the information.
23 (DE 34 (minutes of change of plea hearing).)
24 On February 16, 2021, the United States Probation Office
25 disclosed defendant’s Presentence Investigation Report (PSR). (DE
26 36.) The Probation Office has determined that defendant’s total
27 offense level is 20 and his criminal history category is I. (Id. at
28 3.) With said offense level of 20, the PSR calculated the resulting
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 4 of 12 Page ID #:184
1 Guidelines sentencing range as 33 to 41 months’ imprisonment, two to
2 five years of supervised release, and a fine of $15,000 to $150,000.
3 (Id.) In its disclosed recommendation letter, the Probation Officer
4 recommends a below Guidelines sentence of 24 months of imprisonment,
5 to be followed by three years of supervised release, and restitution
6 of $655,000. (DE 35 at 1-2.)
7 B. Plea agreement
8 Defendant pleaded guilty to the single count information against
9 him. (PSR ¶ 1.) That information charges defendant with violating
10 Title 18, United States Code, Section 1040(a)(2). (Id. ¶ 2.) The
11 statutory maximum sentence that the Court can impose for a Section
12 1040(a)(2) conviction is 30 years of imprisonment, a five-year period
13 of supervised release, a fine of $250,000 (or twice the gross gain or
14 gross loss resulting from the offense), and a mandatory special
15 assessment of $100.
16 In the plea agreement, the parties stipulated that the following
17 guidelines calculations are correct:
18 Base Offense Level: 7 U.S.S.G. § 2B1.1(a)(1)
19 $550k < Loss < $1.5mm: +14 U.S.S.G. § 2B1.1(b)(1)(H)
20 Section 1040 conduct: +2 U.S.S.G. § 2B1.1(b)(12)
21 (Id. ¶ 4; Plea Agreement ¶ 14.)
22 C. Factual Background
23 Defendant agreed to the following facts as part of the plea
24 agreement and change of plea hearing:
25 • On March 13, 2020, President Donald J. Trump declared
26 an emergency under the Robert T. Stafford Disaster Relief and
27 Emergency Assistance Act, 42 U.S.C. § 5191(b), which authorized
28 assistance for COVID-19 response efforts for all U.S. states,
2
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 5 of 12 Page ID #:185
1 territories, and the District of Columbia. The Coronavirus Aid,
2 Relief, and Economic Security (CARES) Act is a federal law enacted in
3 around March 2020 and was designed to provide emergency financial
4 assistance to the millions of Americans who are suffering the
5 economic effects caused by the COVID-19 pandemic. One source of
6 relief provided by the CARES Act was the authorization of up to $349
7 billion in forgivable loans to small businesses for job retention and
8 certain other expenses, through a program referred to as the Paycheck
9 Protection Program (PPP). Around April 2020, Congress authorized
10 over $300 billion in additional PPP funding.
11 • In April and May 2020, defendant submitted
12 applications for PPP loans to banks, which contained false statements
13 about the number of employees and the amount of employee payroll
14 expenses. Those false statements were material because to qualify
15 for PPP loans, those employee-related figures are used to calculate
16 whether the business qualifies for a PPP loan, as well as to
17 determine the amount of PPP funds the business is eligible to
18 receive.
19 • Specifically, on or about May 2, 2020, defendant
20 submitted a PPP loan application to Bank of America for $355,000 for
21 entity Beagle Real Estate Investments. In support of that PPP loan
22 application, defendant listed that the average monthly payroll was
23 $120,000, and that the number of employees was 43. Defendant knew
24 that those statements were false. Further, in support of that loan
25 application, defendant also submitted a 2019 Form 940 (Employer’s
26 Annual Federal Unemployment (FUTA) Tax Return) for Beagle Real Estate
27 Investments, dated February 24, 2020, which reported payments of
28 $1,704,000 to employees for 2019, and a 2020 Form 941 (Employer’s
3
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 6 of 12 Page ID #:186
1 QUARTERLY Federal Tax Return) for the first quarter of 2020 (Q1),
2 dated April 1, 2020, which reported $308,000 in wages paid to 13
3 employees for that quarter. Defendant knew that those tax documents
4 were fabricated and contained false information. That fraudulent
5 loan application was approved, and on or about May 4, 2020, Bank of
6 America disbursed $355,000 of PPP loan proceeds to the bank account
7 provided by defendant in the loan application.
8 • Defendant also submitted at least one other PPP loan
9 application in 2020, which he knew also contained similar false
10 statements and/or attached similar fabricated tax documents. One
11 such loan application was approved, and Bank of America disbursed
12 $300,000 as a result. The authorization, transportation,
13 transmission, transfer, disbursement, or payment for the PPP loans
14 submitted by defendant in April and May 2020 was in or affected
15 interstate or foreign commerce.
16 • When interviewed by agents in October 2020, defendant
17 admitted that he had submitted the multiple PPP loans knowing that
18 they contained false information about employees and payroll,
19 including the fabricated tax documents.
20 • The parties agree that for purposes of this Plea
21 Agreement, the intended loss from the PPP loan applications that
22 defendant submitted is greater than $550,000 and less than
23 $1,500,000, and the actual loss from the two loans that were approved
24 and disbursed is $655,000.
25 (DE 24 at 11-12.)
26 The PSR noted that entity Beagle Real Estate Investments, LLC,
27 was formed on August 26, 2015, and defendant is listed as the only
28 member. (DE 36 (PSR) ¶ 12.) Antelope Valley Residential
4
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 7 of 12 Page ID #:187
1 Development, LLC, was formed on December 5, 2016, and Raymond Magana
2 is listed as a Chief Executive Officer, and Goldstein is listed as a
3 Manager. (Id. ¶ 13.) Magana is the CEO of The Building Circle, LLC
4 and Forward Builders, LLC. (Id. ¶ 14.) 1
5 III. THE PSR’S CALCULATIONS AND RECOMMENDATION
6 The PSR calculates defendant’s Guidelines sentencing range as 33
7 to 41 months of imprisonment, based upon a total offense level of 20
8 and criminal history category of VI. (Id. at 3.) The Probation
9 Officer recommends a below Guidelines sentence of 24 months of
10 imprisonment, to be followed by three years of supervised release,
11 and restitution of $655,000. (DE 35 at 1-2.)
12 The PSR found that the intended loss was $1,230,000. (DE 36
13 ¶ 40.) The PSR’s guidelines calculations are summarized as follows
14 (PSR paragraph identified in parentheses):
15 Base Offense Level: 7 U.S.S.G. § 2B1.1(a)(1) (¶ 37)
16 $550k < Loss < $1.5mm: +14 U.S.S.G. § 2B1.1(b)(1)(F) (¶ 40)
17 Section 1040 conduct: +2 U.S.S.G. § 2B1.1(b)(12) (¶ 41)
18 Acceptance of Responsibility –3 U.S.S.G. § 3E1.1 (¶¶ 47-48)
19 Total Offense Level: 20
20 Criminal History Cat.: I
21 Guidelines Range: 31 to 41 months
22 These are the same calculations agreed to by the parties in the
23 plea agreement, so the government agrees with them.
24 IV. GOVERNMENT’S POSITION REGARDING SENTENCING
25 A. Summary of the Government’s Position
26 Defendant committed the serious federal crime of fraud involving
27
28 1The government held defendant responsible for the loans he
filed, and held Magana responsible for the loans he filed.
5
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 8 of 12 Page ID #:188
1 COVID-related PPP benefits, where defendant made false statements and
2 submitted fabricated tax documents to receive hundreds of thousands
3 of dollars of PPP funds that were intended to assist employees who
4 had been adversely affected by the COVID pandemic. Simply put, he
5 stole taxpayer funds intended to help those who had been hurt by the
6 COVID pandemic. The government does not object to the Guidelines
7 calculations of the Probation Office. As to the appropriate
8 sentence, the government believes that a low-end Guidelines sentence
9 – after applying a COVID-based two-level variance and the reasons in
10 the concurrently-filed under seal document – is appropriate in this
11 case.
12 As discussed below, the government recommends a sentence
13 slightly below the 24 months recommended by Probation: 21 months’
14 imprisonment, followed by 3 years of supervised release, and
15 restitution of $655,000 payable to Bank of America. 2
16 B. The § 3553(a) Factors Call for a Guidelines Sentence.
17 Under 18 U.S.C. § 3553(a), the Court should impose a sentence
18 “sufficient, but not greater than necessary, to comply with the
19 purposes” of sentencing as set forth in § 3553(a)(2). The Court is
20 to consider various factors in determining the particular sentence,
21 including:
22 (1) the nature and circumstances of the offense and the
history and characteristics of the defendant; [¶] (2) the
23 need for the sentence imposed –- [¶] (A) to reflect the
seriousness of the offense, to promote respect for the law,
24 and to provide just punishment for the offense; [¶] (B) to
afford adequate deterrence to criminal conduct; [and] (C)
25 to protect the public from further crimes of the defendant;
. . . [¶] (4) the kinds of sentence and the sentencing
26 range established [in the Sentencing Guidelines]; . . . [¶]
27
2 SBA is an inchoate victim, because SBA guaranteed PPP loans,
28 so if banks suffer a loss and make a claim with SBA, SBA may have to
pay.
6
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 9 of 12 Page ID #:189
1 (6) the need to avoid unwarranted sentence disparities
among defendants with similar records who have been found
2 guilty of similar conduct; and [¶] (7) the need to provide
restitution to any victims of the offense.
3 18 U.S.C. § 3553(a).
4 Here, application of those factors supports the conclusion that
5 the recommended below-Guidelines sentence is a reasonable and
6 appropriate sentence for defendant.
7 1. Nature, Circumstances, and Seriousness of the Offense
8 Defendant committed a serious federal crime, involving intended
9 loss of more than $1,200,000 of taxpayer funds (and more than
10 $650,000 of actual loss), which he perpetrated not only with false
11 statements, but also by fabricating tax documents.
12 2. Defendant’s History and Characteristics
13 On balance, defendant’s history and characteristics lack
14 significant mitigation in this case. Defendant lacks a criminal
15 history, which is adequately taken into consideration by the
16 Guidelines.
17 3. Adequate Deterrence to Defendant and the Public
18 Based upon his lack of criminal history and proffered remorse,
19 the government does not believe that specific deterrence is a big
20 issue in this case.
21 On the other hand, general deterrence is. The need for public
22 deterrence supports the recommended sentence. Given the prevalence
23 of COVID-related fraud against the government – billions of dollars
24 in PPP-related fraud during the past year, general deterrence would
25 be served by a sizable prison sentence in this case, so that people
26 stop committing these crimes.
27 The COVID-19 pandemic is not over. The PPP loan program is soon
28 addressing an important next step—loan forgiveness. In order for PPP
7
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 10 of 12 Page ID #:190
1 loans to be forgiven, businesses will need to certify that they used
2 the funds for their intended purpose —for payroll, rent, and
3 utilities. News of PPP loan fraud will likely reach others who may
4 apply for these loans in the future or may have to certify their own
5 PPP loan for forgiveness. As such, the sentence that the Court
6 orders in this case may serve as a warning to others to not commit a
7 similar crime.
8 In short, people who commit COVID-related benefits fraud against
9 the government need to know that they will be held accountable - and
10 will be imprisoned for years in federal prison.
11 4. Need to Protect the Public from Defendant
12 The government agrees with Probation that several years of
13 supervised release is appropriate in this case. Even though
14 defendant lacks a criminal history, in a short span of time last
15 year, he was able to inflict more than half a million dollars of
16 injury to federally insured funds.
17 5. Need to Avoid Unwarranted Sentence Disparities
18 The recommended below-Guidelines sentence of 21 months of
19 imprisonment does not appear to be disparate to a sentence for a
20 fraud conviction involving a loss exceeding half a million dollars,
21 in particular COVID-related fraud. 3
22 Based upon the above, a Guidelines sentence adequately addresses
23
24 3 Recent sentences for PPP fraud from other districts range from
12 months to 51 months of imprisonment. E.g., United States v. Tarik
25 Jaafar, 1:20-cr-00185-CMH (E.D. Va.) (November 2020 - 12 months
sentence/$1.4mm actual loss/criminal history category I); United
26 States v. Nadine Jackson, 3:20-cr-00112-MJN (S.D. Ohio) (March 2021 –
24 months sentence/$2.3mm actual loss); United States v. Tubbs,
27 4:20-cr-00193-BSM (E.D.Ark.) (March 2021 - 41 months sentence/$1.9mm
loss); United States v. Joseph M. Cherry, II, 4:20-cr-00027-RBS-LRL
28 (E.D. Va.) (May 2021 - 51 months sentence/loss>$150,000/criminal
history category V).
8
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 11 of 12 Page ID #:191
1 the Section 3553(a) factors.
2 C. Restitution
3 In the plea agreement, defendant agreed to make full
4 restitution. The PSR correctly calculates restitution as $655,000.
5 Defendant should be commended for taking efforts and making a pre-
6 sentence payment of $300,000 towards restitution, and his continuing
7 laudable efforts to pay more by the time of sentencing. 4
8 V. CONCLUSION
9 During the past year, tens of billions of dollars in PPP loans
10 are suspected to have involved fraud. E.g., “$84 Billion in PPP Loans
11 Are Potentially Fraudulent, But Only 1% of Funds Have Been Seized,”
12 Newsweek (March 24, 2021). 5 Similarly, during the COVID pandemic
13 over the past year, criminals have robbed the state of California of
14 billions to fraudulently obtain COVID-related unemployment benefits
15 from California EDD. E.g., “California officials say unemployment
16 fraud now totals more than $11 billion,” Los Angeles Times (Jan. 25,
17 2021); 6 “1.4 million unemployment fraud cases could take a month to
18 fix, EDD says,” Orange County Register (Jan. 12, 2021). 7
19 Defendant was part of that COVID fraud scourge. Defendant filed
20 multiple PPP loan applications that had false statements, when
21
22 4 The government’s understanding is that defendant is finalizing
other financial transactions to be able to pay even more in
23 restitution before the time of sentencing.
24 5 Available at https://www.newsweek.com/84-billion-ppp-loans-
are-potentially-fraudulent-only-1-funds-have-been-seized-1578708
25 (last visited 04/12/2021).
6 Available at https://www.latimes.com/california/story/2021-01-
26 25/california-unemployment-fraud-11-billion-investigations (last
visited 03/29/2021.)
27
7 Available at https://www.ocregister.com/2021/01/12/1-4-
28 million-unemployment-fraud-one-month-fix-edd-jobs-layoff-economy/
(last visited 03/29/2021).
9
Case 2:20-cr-00597-SB Document 42 Filed 04/12/21 Page 12 of 12 Page ID #:192
1 attempting to obtain more than one million dollars. He went even
2 further and fabricated tax documents to support his false statements.
3 By his fraud, defendant was able to steal $655,000 in PPP funds to
4 which he was not entitled.
5 General deterrence is an important consideration in this case.
6 A sizable sentence will send a strong message that such COVID relief
7 fraud will be swiftly and appropriately punished and that those
8 engaging in it can and will be held accountable.
9 On the other hand, defendant did immediately admit culpability
10 (confessing when first contacted by federal law enforcement), and
11 pleaded guilty immediately thereafter. That, however, is largely
12 addressed by the two-level downward COVID variance recommended by the
13 government.
14 Defendant should also be acknowledged for his attempts to fix
15 his mistake, by not only accepting responsibility, but also by paying
16 hundreds of thousands of dollars back in restitution. And it does
17 appear that defendant did not engage in this fraud with the intent to
18 squander the funds on personal or lavish expenditures, but rather, he
19 intended to use the funds for real estate investment or rehab.
20 Moreover, for the reasons given in the concurrently filed under
21 seal document, the government believes that the recommended sentence
22 is fair and reasonable.
23 For the foregoing reasons, the government respectfully requests
24 that this Court impose the following sentence:
25 1. 21 months of imprisonment;
26 2. 3 years of supervised release;
27 3. $655,000 restitution; and
28 4. $100 special assessment.
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