Emergency Management Agency (“FEMA”) in order to obtain a lucrative contract to provide
- Date
- 2022-03-07
Summary
The government's Position of the United States with Respect to Sentencing in United States v. James Victor Punelli, Case No. 1:21-cr-224-AJT, in the U.S. District Court for the Eastern District of Virginia, filed February 28, 2022 as Document 14 ahead of a March 7, 2022 hearing. It states the defendant pleaded guilty on October 19, 2021 to making false statements to FEMA under 18 U.S.C. § 1001(a)(2) and theft of government funds under 18 U.S.C. § 641. The filing describes a FEMA surgical-mask contract for $56,300,000 and an EIDL loan with disbursements totaling $141,000. It agrees with a total offense level of 12 and an advisory range of 10 to 16 months, but asks the court to vary downward to probation and enter restitution and forfeiture orders of $141,000. The nine-page filing is signed by an Assistant United States Attorney.
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Case 1:21-cr-00224-AJT Document 14 Filed 02/28/22 Page 1 of 9 PageID# 90
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
UNITED STATES OF AMERICA
v. Case No. 1:21-cr-224-AJT
JAMES VICTOR PUNELLI, Hearing: March 7, 2022 at 3:00 p.m.
Defendant.
POSITION OF THE UNITED STATES
WITH RESPECT TO SENTENCING
The United States of America, by and through its undersigned counsel, in accordance
with 18 U.S.C. § 3553(a) and the United States Sentencing Commission Guidelines Manual
(“Guidelines” or “U.S.S.G.”), files this Position of the United States with Respect to Sentencing.
I. PROCEDURAL HISTORY
On October 19, 2021, the defendant, James Victor Punelli, entered a guilty plea to a two-
count Criminal Information charging him with making false statements to the Federal
Emergency Management Agency (“FEMA”) in order to obtain a lucrative contract to provide
FEMA with much needed personal protective equipment (“PPE”) during the early stages of the
COVID-19 pandemic, in violation of 18 U.S.C. § 1001(a)(2) (Count 1); and theft of government
funds by fraudulently acquiring and then misusing financial assistance provided by the Small
Business Administration (“SBA”), in violation of 18 U.S.C. § 641 (Count 2). See Presentence
Report “PSR” at ¶¶ 1, 2, 16-37, ECF No. 12.
II. SUMMARY OF THE UNITED STATES’ SENTENCING RECOMMENDATION
The United States has no objections to the Guidelines calculation or factual information
contained in the PSR. The Probation Office accurately calculated the defendant’s advisory
Case 1:21-cr-00224-AJT Document 14 Filed 02/28/22 Page 2 of 9 PageID# 91
Guidelines range to be 10 to 16 months of imprisonment. PSR at ¶ 89. In the Plea Agreement
the United States agreed that a sentence within Zone B and in accordance with the provisions of
U.S.S.G. § 5B1.1(a)(2) is sufficient but not greater than necessary to achieve the sentencing
objectives set forth in 18 U.S.C. § 3553(a). PSR at ¶ 3.
After careful consideration of the information contained in the PSR as well as the
statutory factors enumerated in 18 U.S.C. § 3553(a), the United States recommends that the
Court grant Mr. Punelli a variance from the advisory Guidelines range and impose a term of
probation. The United States also requests that the Court enter the proposed Restitution Order
and Consent Order of Forfeiture, both in the amount of $141,000. 1 For the reasons set forth
below, a non-custodial sentence of probation would be sufficient, but not greater than necessary,
to accomplish the sentencing objectives of 18 U.S.C. § 3553(a).
III. SUMMARY OF FACTUAL BACKGROUND
A. Count 1: False Statements to FEMA
Mr. Punelli owned or had an ownership interest in several businesses, including Panthera
Worldwide LLC. PSR at ¶ 18. Each of these companies purported to be government contractors
that provided various tactical training services to federal agencies. PSR at ¶ 77. None of these
companies had a history of providing large quantities of medical equipment to the government.
Nevertheless, beginning on or about March 26, 2020, Mr. Punelli, acting on behalf of Panthera
Worldwide LLC, sought to secure a contract with FEMA to provide ten million surgical masks in
exchange for $56,300,000. In order to convince FEMA to award the contract to Panthera
Worldwide, Mr. Punelli made a series of statements in which he falsely represented that Panthera
1
Here, the purpose of the Consent Order of Forfeiture would be to facilitate the collection of
restitution, if necessary.
2
Case 1:21-cr-00224-AJT Document 14 Filed 02/28/22 Page 3 of 9 PageID# 92
had ten million masks currently available and going forward could supply FEMA one million
masks per week. Based on Mr. Punelli’s false statements, FEMA awarded the contract to
Panthera Worldwide. The contract called for payment upon delivery and inspection. PSR at ¶¶
19-22.
Thereafter, Mr. Punelli made sincere but unsuccessful attempts to acquire surgical masks
from various medical supply manufacturers and distributors. When it became clear to Mr. Punelli
that he would not be able to secure ten million surgical masks in the midst of a worldwide
pandemic, he requested an extension of the delivery date. In so doing, Mr. Punelli made
additional false statements in which he claimed the masks to be delivered to FEMA were in the
United States and awaiting transport. FEMA cancelled the contract when Mr. Punelli failed to
deliver the masks as required. FEMA suffered no actual financial loss. PSR at ¶¶ 23-24.
B. Count 2: EIDL Loan Fraud
The Economic Injury Disaster Loan Program (“EIDL”) was a government initiative
intended to provide emergency financial resources to businesses suffering from the economic
impact of, among other things, the COVID-19 pandemic. PSR at ¶¶ 27-30. On or about March
30, 2020, Mr. Punelli applied for an EIDL loan on behalf of Punelli Partners. PSR at ¶ 31. Mr.
Punelli made three materially false representations in the loan application. Namely, he: (1)
falsely represented that his wife was the sole owner of Punelli Partners, and in so doing
concealed his interest in the business; (2) stated that Punelli Partners grossed $287,167 in the
twelve months prior to January 31, 2020, when, in fact, Punelli Partners generated no revenue
during that period; and (3) claimed that Punelli Partners had two employees, when, in fact, there
were no employees.
Based on Mr. Punelli’s false statements the SBA approved the loan and on April 14,
3
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2020, and again on April 21, 2020, disbursed payments totaling $141,000. PSR at ¶ 34.
Thereafter, Mr. Punelli used the loan proceeds for prohibited purposes, including for personal
expenses and for expenses associated with a pre-existing bankruptcy proceeding. PSR at ¶ 35.
IV. STANDARDS GOVERNING SENTENCING
As the Court well knows, the sentencing Guidelines are advisory and should be taken into
consideration with the 18 U.S.C. § 3553(a) factors in making a sentencing decision. United
States v. Booker, 543 U.S. 220, 264 (2005); see also United States v. Kimbrough, 552 U.S. 85,
90 (2007) (stating that “the Guidelines, formerly mandatory, now serve as one factor among
several courts must consider in determining an appropriate sentence”). In Gall v. United States,
552 U.S. 38 (2007), the Supreme Court instructed that the sentencing court should calculate the
sentencing Guidelines range, permit the government and the defendant “an opportunity to argue
for whatever sentence they deem appropriate,” consider all of the § 3553(a) factors, and finally
pronounce a sentence taking into account all of the relevant factors. Id. at 49. The Court further
instructed that, in the event that the sentencing court decides to impose a variance, the court
“must consider the extent of the deviation and ensure that the justification is sufficiently
compelling to support the degree of the variance.” Id. (noting that a “major departure should be
supported by a more significant justification than a minor one”).
Applying these standards, the Fourth Circuit has concluded that a sentencing court must:
“(1) properly calculate the Guideline range; (2) allow the parties to argue for the sentence they
deem appropriate and determine whether the § 3553(a) factors support the sentences requested
by the parties; and (3) explain its reasons for selecting a sentence.” United States v. Simmons,
269 Fed. Appx. 272, 2008 WL 681764, at *1 (4th Cir. March 11, 2008) (citing United States v.
Pauley, 511 F.3d 468, 473 (4th Cir. 2007)). When “rendering a sentence, the district court must
4
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make and place on the record an individualized assessment based on the particular facts of the
case.” United States v. Cuthrell, No. 12-4077, 2012 WL 3643677, *1 (4th Cir. Aug. 27, 2012)
(citing United States v. Carter, 564 F.3d 325, 328 (4th Cir. 2009)). Ultimately, the court “must
state in open court the particular reasons supporting its chosen sentence.” Carter, 564 F.3d at 328
(quoting 18 U.S.C. § 3553(c)).
Section 3553 states that a court should consider the nature and circumstances of the
offense and history and characteristics of the defendant. 18 U.S.C. § 3553(a)(1). In addition, it
mandates that a court consider other factors, including the need for the sentence “to reflect the
seriousness of the offense, to promote respect for the law, and to provide just punishment for the
offense” and “to afford adequate deterrence to criminal conduct.” 18 U.S.C. §§ 3553(a)(2)(A) &
(B). The sentence should also protect the public from further crimes of the defendant. 18 U.S.C.
§§ 3553(a)(2)(C).
V. THE ADVISORY GUIDELINES RANGE
The United States and the United States Probation Office (“Probation”) agree as to the
applicable Guidelines in this case. Specifically, the United States and Probation agree to the
following:
• The applicable Guidelines provision is § 2B1.1, and the base offense level is 6.
USSG. § 2B1.1(a)(2);
• Because the loss amount is more than $95,000 but less than $150,000, the offense
level is increased by 8. USSG. § 2B1.1(b)(1)(E); and
• This results in an adjusted offense level of 14.
Further, pursuant to the terms of the plea agreement, the parties agree that Mr. Punelli
assisted the United States in the investigation and prosecution of his own misconduct by timely
5
Case 1:21-cr-00224-AJT Document 14 Filed 02/28/22 Page 6 of 9 PageID# 95
notifying authorities of his intention to enter a plea of guilty, thereby permitting the United States
to avoid preparing for trial and permitting the United States and the Court to allocate their
resources efficiently. As a result, it is the position of the United States that Mr. Punelli qualifies
for a two-level decrease in the offense level pursuant to U.S.S.G. § 3E1.1(a).
The above Guidelines calculation results in a total offense level of 12. After determining
the defendant’s criminal history falls within category I, Probation properly calculated the
advisory Guideline range to be 10 to 16 months’ imprisonment. PSR at ¶ ¶ 34-57, 88-89.
VI. 18 U.S.C. § 3553(a) FACTORS
Once the Court has properly calculated the Guidelines range and ruled upon all departure
motions, 2 the Court must then consider the factors identified in 18 U.S.C. § 3553(a) to fashion a
reasonable sentence. Gall v. United States, 552 U.S. 38 (2007). Here, the 3553(a) factors
discussed below support a sentence of probation.
With respect to Count 1, Mr. Punelli lied to FEMA about his ability to provide large
quantities of surgical masks in order to secure an extremely lucrative contract. Mr. Punelli’s
deceptive conduct during the early stages of the pandemic compromised the integrity of the
acquisition process in the midst of a national health emergency. However, it is clear that Mr.
Punelli made sincere attempts to obtain the needed masks. Indeed, there was no financial
incentive to get the contract if he knew he could not perform on the contract. As to Count 2, the
financial assistance provided by the EIDL program was intended to be a lifeline to businesses
and their employees suffering from the economic impact of COVID-19. The fact that Mr. Punelli
lied to the SBA to obtain an EIDL loan and then misused the proceeds of the loan is certainly a
2
There are no departure motions before the Court.
6
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serious offense.
Although Mr. Punelli’s deceptive conduct is deserving of criminal prosecution, it does
not necessarily follow that Mr. Punelli needs to be incarcerated for these offenses. In balancing
Mr. Punelli’s criminal conduct with his military service, low chance of recidivism, timely
acceptance of responsibility, and the minimal impact his criminal conduct had on the
community, the government believes a non-custodial sentence is reasonable and not greater than
necessary to achieve the goals set forth in Section 3553(a).
The PSR describes a 59-year individual who served honorably in the United States
military and then embarked on a career in business. When Mr. Punelli’s business ventures
faltered he engaged in a series of desperate and misguided efforts to stay financially solvent.
When confronted by agents with his criminal conduct, Mr. Punelli readily acknowledge his
crimes and accepted responsibility. The PSR taken as a whole clearly suggests that Mr. Punelli
poses a low risk of recidivism. There is, however, an important general deterrent aspect to this
case. It is important for the government to defend the integrity of the procurement process,
particularly regarding essential supplies during a national emergency. Based on the unique facts
of this case, the government believes the goal of general deterrence is satisfied with the felony
conviction.
* * *
7
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VII. CONCLUSION
For the foregoing reasons, the United States requests the Court sentence Mr. Punelli to a
term of probation. Such a sentence would be sufficient, but not greater than necessary, to
accomplish the sentencing objectives identified in 18 U.S.C. § 3553.
Respectfully submitted,
Jessica D. Aber
United States Attorney
By:
Christopher Hood
Assistant United States Attorney
United States Attorney’s Office
Eastern District of Virginia
2100 Jamieson Avenue
Alexandria, Virginia 22314
Phone: (703) 299-3700
Fax: (703) 299-3868
Christopher.Hood2@usdoj.gov
8
Case 1:21-cr-00224-AJT Document 14 Filed 02/28/22 Page 9 of 9 PageID# 98
CERTIFICATE OF SERVICE
I hereby certify that on February 28, 2022, I electronically filed the foregoing with the
Clerk of Court using the CM/ECF system, which will send a notification of that electronic filling
(NEF) of the foregoing to the attorney of record for the defendant.
Christopher Hood
Assistant United States Attorney
United States Attorney’s Office
Eastern District of Virginia
2100 Jamieson Avenue
Alexandria, Virginia 22314
Phone: (703) 299-3700
Fax: (703) 299-3768
Christopher.Hood2@usdoj.gov
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