Criminal Complaint - United States v. Maurice Fayne related docket PPP fraud case (2023-06-20)
- Issuer
- U.S. District Court for the Northern District of Georgia
- Document type
- Criminal Complaint
- Date
- 2023-06-20
- Case
- United States v. Maurice Fayne related docket
- Case number
- 1:20-cr-00228
Summary
Sentencing memo filed June 20, 2023 as Document 316 by counsel for defendant Daniel Eric Jay in United States v. Daniel Eric Jay, No. 1:20-cr-00228-MHC-JKL, U.S. District Court for the Northern District of Georgia, ahead of a sentencing hearing set for June 23, 2023. The memo argues that the 2-level role enhancement recommended by the Probation Office is correct and the 3-level enhancement sought by the government is not, describing Maurice Fayne as the leader of the scheme. It states a Final Offense Level 29, Criminal History Category I and an advisory range of 87-108 months, and says Jay agreed to restitution of $4,465,865.55 and a personal forfeiture of $250,000. It asks the court to impose a sentence no longer than 60 months. The 20-page memo is signed by counsel L. Burton Finlayson.
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Case 1:20-cr-00228-MHC-JKL Document 316 Filed 06/20/23 Page 1 of 20
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
UNITED STATES OF AMERICA )
)
v. )
) No. 1:20-CR-228-MHC-JKL
)
DANIEL ERIC JAY )
_____________________________ )
SENTENCING MEMO
COMES NOW DANIEL ERIC JAY, by and through counsel, and files this
memo to be considered by this Honorable Court in conjunction with his
Presentence Report and all argument, evidence and allocution to be put forth at his
sentencing hearing set for Friday, June 23, 2023, in Atlanta. Mr. Jay asks that this
information be used to fashion a sentence which comports with the requirements
of 18 U.S.C. §3553(a) and which is otherwise reasonable.
Introduction: DANIEL ERIC JAY is a 47 year-old man, raised in the small
township of Bessemer, PA. He comes before the Court with no prior convictions
and zero (0) criminal history points. Like many of the victims in this case, Dan
Jay initially believed in MAURICE FAYNE and his trucking company’s “big deal
with Amazon.” Dan Jay invested his own money into the operation / scheme and
encouraged others to do the same. At one point, he even borrowed money from a
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loan-shark to meet Fayne’s requests for additional funds to keep the deal alive. As
time went by and the fantasy crumbled, Dan Jay remained in the scheme, hoping to
recover the money he invested. Jay, like many investors, desperately desired to
get his money back out of the deal, even after it became obvious the deal was
suspect. As the government acknowledges, Dan Jay received comparatively little
money from Fayne’s fraud schemes. He did receive $30,000 from the PPP loan,
most of which he used to repay the aforementioned loan-shark. It is surprising in
this case that Jay got so little money from Fayne's schemes, meanwhile Fayne
bought luxury cars, expensive jewelry and other high-dollar items.
[Dan with [Dan with his
his father father in the
and later days.]
newphew
in the better
days.]
Loss of his father. Dan was very close to his father, Elmer “Butch” Jay.
Butch was a lineman for Ohio Edison Power Company for 40 years. He served as
the union representative / “Grievance Man,” and was a renowned fast-pitch
softball pitcher. In 2017, Butch broke his back. This injury led to a series of
2
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medical complications and illnesses including vasculitis and COPD. (PSR ¶ 148).
When his illnesses progressed, Dan moved back into the family home to take care
of his father. In July of 2020, Dan was arrested on a complaint in this case. (Doc.
4). On June 30, 2021, his father passed away. Following his father’s death, Dan
Jay spiraled out of control. His abuse of pain medicines (including Percocet and
Oxycodone) increased exponentially. He began making terrible and misinformed
decisions about how to handle this legal case. He violated the conditions of his
bond, and ended up living in extended-stay hotels and ultimately on the streets of
Youngstown, Ohio.
Mr. Jay continues to apologize for his erratic and disruptive behavior during
the litigation of this case. He has apologized for the disrespect he showed to the
Court, the prosecutor and his attorney. (PSR ¶127). The undersigned counsel can
attest that since being returned to custody and sobriety, Dan Jay has been a stellar
and most reasonable client.
I) SENTENCING GUIDELINE ISSUES.
(Paragraph 134) Role in the Offense.
The Probation Office has awarded Mr. Jay a 2-level upward role
enhancement. The government has objected and requests a 3-level role
enhancement. Mr. Jay submits the Probation Officer is correct on this issue, only
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a 2-level adjustment is warranted. In response to the governments objection, the
Probation Officer writes,
In response, this officer maintains a two level, not a three level,
enhancement is warranted in this case. Regarding the Ponzi scheme,
this officer notes the Government did not seek a role enhancement for
Michael Sargent, Jay's codefendant in this case, and this officer views
both of them on a par of culpability. Regarding the PPP loan, this
officer concurs with the Government that Jay exercised a managerial
role by recruiting Crivilli and Capone to assist in the creation of the
phony documents but does not view the procurement of the PPP loan
as an "extensive criminal activity," as required for the 3-level
enhancement. For all these reasons, a two-level enhancement is
recommended.
(PSR ¶134).
As shall be discussed at a later point, Dan Jay submits he was less culpable
than Michael Sargent, a man who victimized several women through “romance
fraud” and who defrauded members of his own family. Regardless, Mr. Jay agrees
with the Probation Officer’s ultimate conclusion and notes that Michael Sargent
received zero (0) points for his role in the offense.
Furthermore, Dan Jay is being held accountable for a huge loss amount,
$8,725,500, which adds 18 offense levels to his sentencing guidelines. In relation
to the quantity of money for which he is being held accountable, Mr. Jay’s role
was deserving of only a 2-level enhancement, not the 3-level enhancement sought
by the government. The level of supervisory authority which Jay exercised during
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this conspiracy was diminished by his lesser role with respect to the vast loss
amount. “[T]he district court must measure the defendant's role against the
relevant conduct for which she has been held accountable. . . . In other words, the
district court must assess [the defendant’s role] in relation to the relevant conduct
attributed to the defendant in calculating her base offense level.” United States v.
De Varon, 175 F.3d 930, 940-941 (11th Cir. 1999).
The Application Notes to USSG § 3B1.1 direct the Court to consider a
variety of factors including - the nature of participation in the commission of the
offense, the recruitment of accomplices, the degree of control and authority
exercised over others, and the claimed right to a larger share of the fruits of
the crime. USSG § 3B1.1, Application Note 4 (emphasis added). Here, Mr. Jay
did recruit Carrie Capone, who was not charged, however given Dan Jay’s
relatively minuscule share of the fraud proceeds, a 2-level role enhancement is
sufficient and appropriate.
This was not a large or otherwise extensive fraud ring. Only four (4) people
were indicted. Clearly, Maurice Fayne was the leader, organizer, the boss. It was
Fayne’s trucking company, his scheme, and he got almost all of the money. As the
Background Commentary to USSG § 3B1.1 reads:
In relatively small criminal enterprises that are not
5
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otherwise to be considered as extensive in scope or in
planning or preparation, the distinction between
organization and leadership, and that of management or
supervision, is of less significance than in larger
enterprises which tend to have clearly delineated
divisions of responsibility. This is reflected in the
inclusiveness of § 3B1.1 (c).
USSG § 3B1.1, Background.
When the totality of the circumstances are considered, including the lack of
role enhancement for Michael Sargent and the absence of prosecution for several
others, Mr. Jay should receive no more than a 2-level upward role adjustment.
II) REQUESTS FOR A REASONABLE AND LOWER SENTENCE:
Mr. Jay’s current sentencing guidelines include a Final Offense Level 29,
Criminal History Category I, and an advisory range of 87-108 months. As
authorized by Title 18 USC § 3553 (a) and United States v. Booker, 125 S.Ct. 738
(2005), Mr. Jay requests a reasonable sentence lower than the advisory guidelines.
After considering the Guidelines, “the District Court may impose a more severe or
more lenient sentence as long as the sentence is reasonable.” United States v.
Crawford, 407 F.3d 1174, at 1179 (11th Cir. 2005). A below-Guidelines sentence
is assessed for reasonableness in light of the factors set out at 18 U.S.C. §3553(a).
“These factors include available sentences, the applicable Guideline range, the
nature and circumstances of the offense, and the need for the sentence to reflect
6
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the seriousness of the offense, promote respect for the law, provide just
punishment for the offense, and provide the defendant with needed medical care.”
United States v. Winingear, 422 F.3d 1241, 1246 (11th Cir. 2005).
A) THE NATURE AND CIRCUMSTANCES OF THE OFFENSE.
Obviously, the nature of the offense is serious. Victims were defrauded out
of large sums of money with promises of high returns on a non-existent insider
Amazon contract, and the PPP loan program and the American taxpayers were also
victims of fraud and intended fraud. Such crimes wreak havoc on the lives of the
innocent and erode the trust people once had in one another. Defrauding and
attempting to defraud the PPP loan program undermines an important assistance
program and wastes funds and resources intended for real business owners in need
of assistance during the COVID pandemic to keep their employees on the payroll.
While the intended loss amount for Dan Jay is calculated to be “approximately
$8,725,500,” (PSR ¶123), and he has agreed to a loss amount between 3.5 and 9
million dollars, and agreed to pay restitution of $4,465,865.55, and a personal
forfeiture of $250,000 - he personally received very little of the funds actually lost.
7
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B) THE HISTORY AND CHARACTERISTICS OF THE DEFENDANT.
Who is Daniel Eric Jay ? Dan Jay has no prior convictions and zero (0)
criminal history points. “Danny” to his family, Dan Jay is the youngest of three
children born to “Butch” and Nancy Jay. They lived in a small house on a hill just
above the highschool football stadium in Bessemer, PA. Dan Jay literally grew up
under the Friday night lights.
[The house Dan Jay grew up in.] [Remains of the H.S. stadium behind
Dan's house. Only the lights are left.]
Dan’s father played competitive softball until the age of 53. Dan grew up
an obsessive sports fan with an immense knowledge of sports’ statistics. He
followed baseball, and, like his Dad, loved boxing.1 Dan wanted to be a contender.
Bessemer, PA, is small. As of 2000, there were 1,172 people, and 345 families
residing in the borough. “Bessemer was once a thriving industrial community. It
1
One of Bessemer’s two “Notable People” was Charley Burley, professional boxer.
(https://en.wikipedia.org/wiki/Bessemer,_Lawrence_County,_Pennsylvania)
(Accessed 6/19/2023).
8
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hosted a cement plant, two brick yards, and two railroad spurs from the
Pennsylvania and the Pittsburgh & Lake Erie Railroads…. Bessemer also hosted
several department stores, supermarkets, businesses and a plethora of bars and
restaurants. The brick yards closed by the mid-1960’s and the cement plant
ceased production in 2009. With the decline of industry, Bessemer also saw a
decline in terms of businesses as well.”2
[Bessemer, PA]
2
The Borough of Bessemer, Pennsylvania (bessemerpa.com) (Accessed 6/19/2023).
9
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[Bessemer Hotel & Diner in
2022.]
[Bessemer
Bowling
Alley in
2022.]
[Bessemer Presbyterian Church
where the Jay family attended.]
10
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After he left Bessemer, Dan Jay sought fame and fortune as a boxing
promoter, among other endeavors. Unfortunately, he lost more money in boxing
than he ever made.
As reflected in the letters provided by family members, DANIEL ERIC JAY
is a loyal, giving and loving person.
His sister, CINDY BARTH, writes the following:
Our family was a bit unusual - I am the oldest, my sister
Amy is 9 years younger than me & Danny was born the
summer that I graduated from high school. I married my
high school sweetheart the following year & we began
having our family shortly after that so my daughter &
11
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Danny are only 3 years apart in age. Because of that,
even though Danny is my brother, he grew up more as
one of my “kids” in many ways. My children all adored
him growing up and even though he was just a few years
older than they were, he was always “Uncle Danny” to
them.
He was married for many years & lived out of
state but because he and his wife never had children, he
always had a special place in his heart for our
grandchildren. He made his way back home for every
important event in our family and showed up for soccer
games, wrestling matches, football & basketball games
whenever possible, and of course for birthdays &
Christmas. We were always grateful for the love and
attention he gave the kids & they thought he was the
greatest ! He was always so generous with his time as
well as his money. . . .
When our father developed a life-threatening
infection in the fall of 2020, my sister & I weren’t sure
how we could possibly keep him in the home that he
loved because the care he needed was beyond our
physical ability. Danny decided to step up & move back
in with him so that there would be someone to care for
him around the clock. . . . . It was Danny who was with
him 24/7 (in the middle of the night making sure his
CPAP & oxygen were working properly, helping him in
and out of bed, dressing his wounds & being available
when his home health nurses would be there for visits.)
Without Danny stepping up as he did, our father would
have had to go to a nursing home & would never have
received the love and care that he got at home. He spent
the last 9 months of his life very happy & comfortable
with his family being able to visit in the home that he
loved.
This is my brother. This is the man who stands
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before you. I know that the memo you have of all his
crimes paints a very dark picture, but there is so much
more to him & I wanted you to hear from my heart the
part of him that you may not see.
He was a beloved son, Uncle Danny to my 5
children & 10 grandchildren & a man that I love dearly.
May you consider all of this as pronounce his sentence.
....
(See Exhibit 1, attached hereto, letter from Cindy Barth).
[Dan and his sister's, Amy and Cindy.]
13
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SCOTT JOHNSON, Dan’s brother-in-law, (husband of sister, Amy), writes,
I have personally known Dan for most of his life, as I
was introduced to his family when he was a young boy....
My three children, all adults now, really adored their
uncle while growing up ! Dan was a fun loving person
toward them and they looked forward to seeing him at
birthday parties, holidays and various gatherings.
Dan was always kind hearted towards his nieces and
nephews and affectionate towards his family and friends
as he would be later get on to caring and assisting my
father-in-law during his last year on earth.
(See Exhibit 2, attached hereto, letter from Scott Johnson).
Dan’s niece, HOLLY PAULIN, writes the following:
I am aware that you will be the one to judge and sentence
Dan for the crimes he committed and my heart is heavy
with the knowledge that he will now have to pay the
consequences for the poor choices he’s made. I am
saddened by this because I know there is so much more
to Dan than these choices.
.... Dan was always there to lift me up and cheer me on,
while reminding me there are brighter days to come. He
is a phenomenal motivator for anyone going through
hard times.
He has an absolutely kind and generous heart, and I’m
not sure what our family would have done had he not
stepped up to care for my grandfather during his last
couple years on this earth. . . . .
Grandpa was his best friend and I know that caring
for him during that time was a blessing to Uncle D, while
14
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at the same time, incredibly painful.
. . . I just wanted you to know that there’s so much
more to Dan than the crimes he’s committed and he has a
family who loves him deeply.
(See Exhibit 3, attached hereto, letter from Holly Paulin).
[Dan and his niece, Holly Paulin.]
C) THE NEED FOR DETERRENCE AS WELL AS
THE NEED TO AVOID UNWARRANTED DISPARITIES.
Deterrence. Mr. Jay’s codefendants have received substantial prison
sentences. These sentences, and Mr. Jay’s, will sufficiently deter members of
society from committing future fraud and PPP loan fraud crimes. Furthermore,
there no evidence or sentencing data to suggest that longer sentences will have a
correspondingly greater deterrent effect.
15
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Avoiding Unwarranted Sentencing Disparities.
Michael Sargent was sentenced to 60 months. He and his brother, Mark
Sargent, committed “romance fraud” on unsuspecting, trusting older women. The
Sargent brothers also defrauded members of their own family. The Sargents
received more money from the scheme than Dan Jay. Unfortunately, Mr. Jay has
picked up two (2) points for Obstruction (PSR ¶135) and lost one (1) point from
Acceptance of Responsibility (PSR ¶138). Had Mr. Jay not spiraled out of control
and behaved badly after his father died, he would have been in a good position to
request a variance down to somewhere between 36 and 44 months. In light of his
lesser culpability, but taking into account his pre-trial transgressions (obstruction),
Daniel Jay submits 60 months is a reasonable sentence.
D) ADDITIONAL GROUNDS FOR VARIANCE.
In Kimbrough v. United States, the Supreme Court made clear that a
sentencing court had the authority to downwardly vary if there was no empirical
evidence supporting the applicable guideline. Kimbrough, 552 U.S. 85, 108-10
(2007). Here, the fraud guidelines overly inflate Mr. Jay’s sentence in light of his
criminal conduct and personal history. As numerous federal courts have
recognized, the fraud guidelines outlined in USSG §2B1.1 are not based on
empirical data and often result in seemingly random and excessively harsh
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sentences. See Barry Boss and Kara Kapp, How the Economic Loss Guideline
Lost its Way, and How to Save It, Ohio State Journal of Criminal Law at
https://moritzlaw.osu.edu/osjcl/2021/07/18/how-the-economic-loss- guideline-
lost-its-way-and-how-to-save-it/ (collecting cases).
In a concurrence in United States v. Corsey, District Judge Underhill
explained the issue:
The loss guideline, like the child pornography guideline
at issue in Dorvee, 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 three sets of amendments to the loss table of the
fraud guideline alone have effectively multiplied several
times the recommended sentence applicable in 1987 for
large-loss frauds, which itself was set higher than
historic sentences. Each of the three increases in the
recommended Guideline ranges for fraud crimes was
directed by Congress, without the benefit of empirical
study of actual fraud sentences by the Sentencing
Commission.
The history of bracket inflation directed by Congress
renders the loss guideline fundamentally flawed,
especially as loss amounts climb. The higher the loss
amount, the more distorted is the guideline's advice to
sentencing judges. As a well-known sentencing
commentator has put it, “For the small class of
defendants . . . convicted of fraud offenses associated
with very large guidelines loss calculations, the
17
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guidelines now are divorced both from the objectives of
Section 3553(a) and, frankly, from common sense.
Accordingly, the guidelines calculations in such cases
are of diminished value to sentencing judges.” Frank O.
Bowman, III, Sentencing High-Loss Corporate Insider
Frauds After Booker, 20 FED. SENT'G REP. 167, 168
(2008). Id. at 380. See also United States v. Musgrave,
674 Fed. App’x 529, 530 (6th Cir. 2016) (affirming
downward variance for defendant with offense level of
25 and a $1.7 million loss to a sentence of one day of
imprisonment, reasoning 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.”); United
States v. Johnson, 2018 U.S. LEXIS 71257 at *16-20
(E.D. N.Y. 2018) (finding that application of the 16-
point loss enhancement corresponding to loss amount
would result in a sentence well out of the proportion to
[an] appropriate sentence”); United States v. Parris, 573
F. Supp. 2d 744 (E.D. N.Y. 2008) (varying down from
300 months to a 60-month sentencing and finding that
the guidelines have “run so amok that they are patently
absurd on their face” after conviction for 6 counts of
securities fraud and witness tampering).
United States v. Corsey, 723 F.3d 366, 380 (2nd Cir. 2013).
Meanwhile, the United States Sentencing Commission has recently
proposed new Sentencing Guidelines, some of which are persuasive or relevant
here. For instance, the new Guidelines which take effect November 1, 2023, will
create an additional 2-level reduction for defendants who have zero (0) criminal
history points. Additionally, there has been extensive debate and discussion about
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removing intended-loss from the offense level calculation and sentencing only
upon actual loss.
Request for Recommendation to the RDAP Program.
Mr. Jay requests a recommendation to the BOP’s Residential Drug
Treatment Program. He clearly suffered from substance abuse problems (PSR ¶¶
155-164), and would benefit from drug treatment.
WHEREBY, based upon the above, DANIEL ERIC JAY requests that
this Honorable Court deny the government’s role objection to the PSR, grant him
variance down from 87 months, and impose a reasonable sentence no longer than
60 months.
Dated: This 20th day of June, 2023.
Respectfully submitted,
L. Burton Finlayson
______________________________
L. BURTON FINLAYSON
Attorney For DANIEL ERIC JAY
Georgia Bar Number: 261460
LAW OFFICE OF
L. BURTON FINLAYSON
ATTORNEY AT LAW
931 Ponce de Leon Avenue, NE
Atlanta, Georgia 30306
(404) 872-0560
LBFCOURTS@aol.com
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CERTIFICATE OF SERVICE
This is to certify that I have this day served a copy of the foregoing
Sentencing Memo upon the following:
Russell Phillips
Assistant United States Attorneys
600 U.S. Courthouse
75 Ted Turner Drive, S. W.
Atlanta, Georgia 30303
by CM/ ECF delivery.
DATED: This 20th day of June, 2023.
L. Burton Finlayson
____________________________
L. BURTON FINLAYSON
ATTORNEY FOR DANIEL ERIC JAY
State Bar Number: 261460
20
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