Objection to Restitution Order and Motion in Support of a Minimal Fine — United States v. VIP Healthcare Solutions, Inc. (Dkt. 103, D.P.R.)

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An objection to restitution order and motion in support of a minimal fine filed January 12, 2024 as Document 103 by attorney Kendys Pimentel-Soto for VIP Healthcare Solutions, Inc. in United States v. VIP Healthcare Solutions, Inc., Crim. No. 23-0058 (RAM), in the U.S. District Court for the District of Puerto Rico. It states that VIP pleaded guilty to count 46, admitting false statements to a federally insured institution in a Paycheck Protection Program loan application, including that Carla Carrillo owned 85% of its stock, and that the SBA forgave the loan after finding it was used as directed. VIP objects to the presentence report's suggested restitution of $249,755.35, the full loan amount, arguing under 18 U.S.C. § 3663(a)(1)(B)(i)(I) that the SBA suffered no actual loss.

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Case 3:23-cr-00058-RAM Document 103 Filed 01/12/24 Page 1 of 5


                       UNITED STATES DISTRICT COURT
                      FOR THE DISTRICT OF PUERTO RICO

 UNITED STATES OF AMERICA,
  Plaintiff,

        v.
                                              CRIM. NO. 23-0058 (RAM)
 VIP HEALTHCARE SOLUTIONS, INC.,
  Defendant.



                    OBJECTION TO RESTITUTION ORDER
                AND MOTION IN SUPPORT OF A MINIMAL FINE


TO THE HONORABLE COURT:

       COMES NOW the Defendant, VIP HEALTHCARE SOLUTIONS, INC., through

the undersigned counsel, and respectfully states and prays:

       1.     VIP Healthcare Solutions, Inc. (“VIP”) pleaded guilty to count 46 and

admitted to have made false statements to a federally insured institution, including that

Carla Carrillo owned 85% of its stocks. The statements were made in an application for a

Small Business Administration guaranteed loan known as “Paycheck Protection

Program” (“PPP”). The loan was to be used for payroll and other authorized business

expenses and its repayment could be forgiven if used as directed. The Small Business

Administration relieved VIP from repaying the loan after determining that the loan was

used as directed.

       2.     The presentence investigation report suggests that restitution to the Small

Business Administration should be ordered in the total amount of the loan; that is:

$249,755.35. Dkt. 93, page 22, ¶ 85. VIP disagrees. The Small Business Administration

        Case 3:23-cr-00058-RAM Document 103 Filed 01/12/24 Page 2 of 5


had no loss attributable to VIP’s conduct. It suffered no actual loss as a result of the

admitted offense.

       3.      Pursuant to 18 U.S.C. § 3663(a)(1)(B)(i)(I) of the Victim and Witness

Protection Act of 1982 (“VWPA”), restitution is authorized for “the amount of the loss

sustained by each victim as a result of the offense.” The fact that false statements could

have been included in the loan application does not necessarily mean that the PPP loan

would have not been approved otherwise. These statements could have been material but

nonetheless if the correct information would have been given the loan could have been

approved regardless. The government has not carried its burden to show that restitution

should be ordered nor that restitution is warranted on this record. The fact that the Small

Business Administration determined that the funds were properly used and relieved VIP

from paying the loan weighs against restitution as well since no finding of “loss” is

supported. See United States v. Diamond, 969 F.2d 961, 966 (10th Cir. 1992)(reversing a

restitution order based on that the defendant pleaded guilty to making false statements to

the Small Business Administration in obtaining loans because the record did not support

concluding that that entity “lost any money or suffered any detriment as a result of […]

[defendant’s] false reports.”)

       4.      The Small Business Administration’s website informs that the following

entities affected by COVID-19 may have been eligible for a PPP loan:

            a. Sole proprietors, independent contractors, and self-employed persons
            b. Any small business concern that meets SBA’s size standards (either the
               industry size standard or the alternative size standard)


                                             2

        Case 3:23-cr-00058-RAM Document 103 Filed 01/12/24 Page 3 of 5


            c. Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans
               organization, or tribal business concern (sec. 31(b)(2)(C) of the Small
               Business Act) with the greater of:
            d. 500 employees, or
            e. That meets the SBA industry size standard if more than 500
            f. Any business with a NAICS code that begins with 72 (Accommodations
               and Food Services) that has more than one physical location and employs
               less than 500 per location

https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-

protection-program/first-draw-ppp-loan#id-loan-details (visited 1/8/2024).

       5.      None of the listed requirements are related to the false statement admitted

in this case. As such, the loan could have been approved and the payment forgiven

regardless of the admitted misconduct.

       6.      The PPP loan application specifically listed the reasons that certainly

caused the loan to be denied and none of them were related to the false statement

admitted in this case. It read:




                                             3

        Case 3:23-cr-00058-RAM Document 103 Filed 01/12/24 Page 4 of 5


       https://www.sba.gov/document/sba-form-2483-ppp-first-draw-borrower-

       application-form (downloaded on 1/8/2024).

       7.     Moreover, the Small Business Administration, having significant recourses

to do so, has not proceeded to collect any purported debt from VIP and has maintained its

decision to forgive the loan as of this date also weighing against any finding of loss. In

fact, no victim impact has been sent to the Probation Office. Dkt. 93, page 16, ¶ 43.

       8.     Considering the above, VIP also objects to the presentence investigation

report calculation of the Guidelines. An enhancement of 10 levels was added based on

the purported “loss.” Dkt. 93, page 19, ¶ 66. No enhancement is warranted on this record.

       9.     VIP does agree with the finding in the presentence investigation report that,

where no ability to pay exists, no fine should be imposed. Dkt. 93, page 19, ¶ 68. In this

case, VIP ceased operation following the indictment in this case. Moreover, following the

sentencing hearing, VIP will be dissolved. As of today, it has minimal assets and has an

accumulated debt with the PR Treasury Department of more than $220,000 as reported in

the presentence investigation report. The sum of VIP’s minimal assets are far from

enough to pay such income tax debt and has no ability to pay any fine. Because VIP is

bound by the plea agreement to requests a fine, it requests a nominal fine of $200

considering its inability to pay.

       WHEREFORE, defendant VIP HEALTHCARE SOLUTIONS, INC., prays this

Honorable Court consider the above at sentencing.

       RESPECTFULLY SUBMITTED.

       At San Juan, Puerto Rico, on this 12th day of January, 2024.
                                             4

       Case 3:23-cr-00058-RAM Document 103 Filed 01/12/24 Page 5 of 5


       I HEREBY CERTIFY that on this same date, I electronically filed the foregoing
with the Clerk of the Court using the CM/ECF system, which will send notification of
such filing to all counsel of record.




                                                 KENDYS PIMENTEL-SOTO
                                                     LAW OFFICE LLC
                                                        PO Box 270184
                                                   San Juan, PR 00927-0184
                                                     Tel.: (787) 370-0091

                                                    s/ Kendys Pimentel-Soto
                                                 KENDYS PIMENTEL-SOTO
                                                       USDC-PR 226704
                                                  kendyspimentel@yahoo.com




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