Defendant's Position Re: Sentencing Factors — United States v. Raymond Magana (Document 55)

Summary

Defendant's Position Re: Sentencing Factors for Raymond Magana, filed January 10, 2022 as Document 55 in Case No. 2:21-cr-00007-SB, with a sentencing date of January 25, 2022 before Hon. Stanley Blumenfeld, Jr. It says he pled guilty on January 26, 2021 to a one count Information over false statements on a PPP loan application, and received $360,415.00 in PPP loans that he says went to the businesses and not to luxury items. It describes him as extremely remorseful and nearly done with restitution. It asks for a sentence of no more than 24 months imprisonment and three years of supervised release, with participation in the Bureau of Prisons RDAP program.

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“Defendant's Position Re: Sentencing Factors — United States v. Raymond Magana (Document 55).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-c-d-cal-no-2-21-cr-00007-dkt-55-c-d-cal-3a6bd2c25f/, SHA-256 d663c5bd80d3a9653340622324d6d3f70e9eb7a9e6e250d52dab4fb5f6c37596.

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Case 2:21-cr-00007-SB Document 55 Filed 01/10/22 Page 1 of 12 Page ID #:189

1 WILLIAM S. PITMAN (SBN 131253)
Law Offices of William S. Pitman
2 65 North Raymond Avenue, Suite 320
Pasadena, CA 91103
3 Tel: (213) 629-0272
Fax: (213) 629-0208
4 Email: william_pitman@sbcglobal.net
5 Attorney for Defendant
Raymond Magana
6
7
8 UNITED STATES DISTRICT COURT
9 FOR THE CENTRAL DISTRICT OF CALIFORNIA
10
11 UNITED STATES OF AMERICA, ) Case No. 2:21-cr-00007-SB
)
12 Plaintiff, ) DEFENDANT’S POSITION RE:
) SENTENCING FACTORS
13 v. )
)
14 RAYMOND MAGANA, )
) Date: January 25, 2022
15 Defendant. ) Court: Hon. Stanley Blumenfeld, Jr.
______________________________ )
16
Defendant RAYMOND MAGANA, through counsel, hereby and herewith
17
submits his position, with exhibits, with respect to the sentencing factors in this
18
case.
19
Defendant reserves the opportunity to make additional comments through
20
counsel at the time of the sentencing hearing.
21
Dated: January 10, 2022. Respectfully submitted,
22 LAW OFFICES OF WILLIAM S. PITMAN
23
By /s/ William S. Pitman
24 WILLIAM S. PITMAN
Attorney for Defendant
25 RAYMOND MAGANA

26
27
28

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Case 2:21-cr-00007-SB Document 55 Filed 01/10/22 Page 2 of 12 Page ID #:190

1 I
2 INTRODUCTION
3 On January 26, 2021, shortly after his first appearance, Raymond Magana
4 accepted responsibility for and pled guilty to a one count Information alleging a
5 violation of 18 U.S.C. §§ 1040(a)(2), 2(b) involving false statements on a PPP
6 loan application. At the time of the offense, Mr. Magana was self-employed and
7 working in the real estate business. Essentially, he would purchase distressed
8 properties, renovate them and resell them at a profit.
9 The charges arose out of PPP loans and applications that the defendant
10 applied for early in the Covid pandemic both individually and with Steven
11 Goldstein. The defendant ultimately received $360,415.00 in PPP loans. The
12 money was used to prevent the residential remodel properties from going into
13 default, to pay workers and to keep the businesses afloat. This included making
14 mortgage payments on the properties, paying laborers, contractors, paying for
15 materials and maintaining permits and city fees. None of the funds were used to
16 purchase personal luxury items. Almost all the money went into the businesses
17 and to pay modest salaries.
18 Mr. Magana is extremely remorseful and regretful with regard to the
19 conduct he engaged in. He self-surrendered, waived indictment, agreed to plead
20 guilty almost immediately after his first appearance and has fully complied with
21 Pretrial Services and all conditions of his pretrial release. He has also worked
22 extremely hard this past year to support his children and himself and is on the cusp
23 of making full restitution.
24 II
25 STATEMENT OF FACTS
26 Mr. Magana is currently 41 years-old. He has been self-employed purchasing,
27 renovating and reselling residential properties since 2016. That year, a real estate
28 agent introduced him to Steven Goldstein (who was separately charged in Case No.

2
Case 2:21-cr-00007-SB Document 55 Filed 01/10/22 Page 3 of 12 Page ID #:191

1 20-cr-00597-SB) and the two formed Antelope Valley Residential Development,
2 LLC. Mr. Magana also worked through two other LLCs: Forward Builders, LLC and
3 The Building Circle, LLC. Mr. Goldstein maintained a separate LLC known as
4 Beagle Real Estate Investments. Each of the businesses obtained financing from
5 banks, hard money lenders, friends, relatives and other investors.
6 In March, 2020, the Covid-19 pandemic and associated lockdowns and
7 shortages began. It was an unprecedented time and caused panic and fear throughout
8 the world. In the United States, small business owners and self-employed individuals
9 were hit extremely hard. Housing sales ceased for many months and work (for many)
10 slowed to a standstill. Mr. Magana’s business was significantly impacted by this.
11 Apart from ongoing projects, loan payments, costs of materials and labor expenses,
12 several properties fell out of escrow. Like so many others, Mr. Magana experienced
13 financial panic and fear that his businesses would fall apart. He felt an obligation and
14 responsibility to his investors, contractors, laborers and dependents to figure out a
15 way to save the businesses.
16 It was in this setting that Mr. Magana and Mr. Goldstein became aware of PPP
17 loans being offered to qualified businesses through the CARES Act to help offset the
18 economic realities and loss resulting from the pandemic. Among other things, the
19 CARES Act authorized loans to small businesses to continue to pay employees
20 salaries, rents, interest on loans/mortgages and other related business expenses.
21 Mr. Magana and Mr. Goldstein believed that they did not qualify for the loans
22 because they did not have payroll employees and would not otherwise be able to
23 submit the required documentation. As a result, they made the obviously regrettable
24 decision to provide false information in an attempt to obtain PPP loans. Because
25 they did not have payroll records, Mr. Goldstein went to a close friend and neighbor
26 and hired him to assist in preparing the necessary documentation–falsified payroll
27
28

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1 records and tax documents.1
2 Mr. Magana, with Mr. Goldstein’s substantial assistance, also applied for a
3 loan with a company called Kabbage in the amount of $940,416.00 in the name of the
4 Building Circle, LLC.2 They used the template provided by the individual who
5 prepared the earlier documentation with modifications. The loan ultimately funded
6 but was not paid out.3
7 Mr. Magana actually received $360,415.00 in PPP funds which is reflected in
8 his plea agreement and the PSR. The funds were used to pay mortgages and keep
9 projects moving by buying materials and paying contractors and workers. None of
10
11 1
In his both his initial statements to agents and his later proffer to the government, Mr.
12 Goldstein failed to disclose this information. The information was brought to the attention of agents
13 by counsel for Mr. Magana and documented through text messages Mr. Goldstein had sent to Mr.
Magana reminding him that [Fred] would be owed $1,000.00 from each loan once they were funded.
14
(Copies of two text messages from Mr. Goldstein to Mr. Magana confirming this agreement are
15 attached as Exhibit A). The text messages and emails that Mr. Magana provided to the government
in March of 2021 have been previously submitted to the USPO by the government. This information
16
is not meant to minimize Mr. Magana’s conduct in any way, but is important to provide the actual
17 circumstances regarding the offense conduct and to provide context regarding relative culpability
18 as explained in more detail below.
2
19 Two other individuals George xxxx and Jennifer xxxx each had a 25% interest in the LLC
which had been set up to purchase and renovate rental properties in the Bakersfield area. Neither
20
is alleged to be involved in the fraudulent loan application.
21
3
Again, in his initial statements to the agents and his later proffer, Mr. Goldstein denied any
22 involvement in or knowledge of the Building Circle loan application. These denials were
23 contradicted by numerous text messages from Mr. Goldstein that were provided to the case agents
by Mr. Magana’s counsel. It is undisputable that Mr. Goldstein knew about the loan and expected
24
to receive funds from it as well. A small sample of the text messages are attached as Exhibit B. This
25 information is not meant to minimize Mr. Magana’s conduct in any way, but it is important to
provide the actual circumstances regarding the offense conduct and to provide context regarding
26
relative culpability. It is also important to note that Mr. Goldstein was not held accountable (for
27 purposes of the sentencing guidelines or otherwise) for his participation in this loan application or
28 for his lies and deception during his debriefings.

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1 the money received was not used to pay for luxury type items or spent in any type of
2 frivolous manner. While a small percentage of the funds were used to pay necessary
3 living expenses for Mr. Magana and his two children, the bulk was used to keep the
4 businesses afloat and continue to pay vendors, contractors and workers.
5 As a single parent of his ten year-old son and co-parent of an almost two year-
6 old daughter, Mr. Magana is finally close to being able to pay full restitution. Since
7 the time of his change of plea and an improved real estate market, Mr. Magana has
8 been continuing to keep his businesses operational. He has been working on two
9 major projects for almost a year and they are near completion. One was placed on the
10 market this month and the other property will be listed in approximately two weeks.
11 The realistic expected profits based on comparable sales will be sufficient to pay full
12 restitution in the amount of $360,415.00.
13 III
14 MR. MAGANA’S BACKGROUND
15 Mr. Magana grew up in a working class neighborhood in East Los Angeles and
16 is the oldest of five siblings. Although there were many active gangs in the area in
17 the 1980s and 1990s, Mr. Magana was able to avoid becoming involved in gang
18 activity and graduated from Garfield High School in 1999. In 2005 he earned an
19 associate degree in liberal arts from East Los Angeles College.
20 At the age of 22, Mr. Magana began working for Bank of America as a call
21 center customer service representative. He worked there for twelve years until 2014
22 and was promoted to a managerial position. He met Mariama Barrett in 2005 and
23 they married in 2009. In 2011, Mariama gave birth to their son, Raymond Elijah
24 Magana (Elijah) who is now 10 years-old.
25 In 2014, Mr. Magana, while still employed by Bank of America, was attending
26 a several month training program in Baltimore, Maryland. Mr. Magana would often
27 fly home on the weekends to spend time with Mariama and Elijah and help out at
28 home. He would typically arrive in Los Angeles late on Friday night and fly back to

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1 Maryland on a Sunday night redeye.
2 On March 28, 2014, Mr. Magana took a late flight to Los Angeles and arrived
3 home after midnight. The next morning he was up at the crack of dawn. He went to
4 Home Depot, did some construction work at their house, and took Elijah to play Tee
5 Ball. Later that evening, Mr. Magana and Mariama dropped Elijah at his
6 grandmother’s house and went to a small social gathering nearby. After the gathering
7 ended, Mr. Magana and Mariama picked up Elijah and began driving home.
8 Mariama, who had several drinks at the gathering, was in the front passenger seat.
9 Elijah was in the back seat in a child’s car seat. Mr. Magana who had at most three
10 drinks during the entire event was driving.4
11 While driving on Colima Road on a curvy downward slope, Mr. Magana, who
12 was exhausted, drifted slowly across the center of the roadway and hit an oncoming
13 car. His car veered out of control and then came to a stop. The driver of the second
14 vehicle suffered abrasions and a fractured rib.
15 The airbags on Mr. Magana’s vehicle all deployed except for the right front
16 passenger airbag where Mariama was seated. Mariama, who was asleep with the seat
17 reclined, died immediately. Elijah’s injuries consisted of abrasions and cuts. Contrary
18 to the PSR and USPO Recommendation Letter, only Mariama died as a result of the
19 accident. (See PSR ¶ 61; USPO Recommendation Letter p. 6, 7.) There were no
20 other fatalities associated with the accident.
21 Pursuant to a plea agreement, Mr. Magana pled No Contest to one count of
22 Vehicular Manslaughter While Intoxicated Without Gross Negligence (California
23 Vehicle Code § 191.5(b)) as a felony and one count of Child Endangerment
24 (California Penal Code § 273a(a)). He was placed on three years formal probation
25 with a condition that he serve 365 days in the County Jail. The Court also imposed,
26
27 4
A blood analysis performed by the Los Angeles County Sheriff’s Department determined
28 that Mr. Magana’s Blood Alcohol Content was 0.08% at the time of the accident. A second test
performed by Forensic Toxicology Associates determined the Blood Alcohol Content to be 0.06%.

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1 but stayed, a two year prison sentence.5

2 After the accident and death of Mariama, Mr. Magana was totally devastated

3 and became extremely depressed. He blames himself and has replayed the incident

4 over and over in his mind. He did not work for almost two years and devoted his time

5 to his family and raising Elijah. He also met with a therapist during this time to cope

6 with the devastating loss of Mariama. These were extraordinarily difficult times for

7 Mr. Magana and he began self medicating with marijuana to help him sleep and deal

8 with his depression.

9 In 2016, Mr. Magana started working in the real estate business. He attended

10 classes and worked extremely hard to develop contacts and learn the business. By

11 2017 he was making a profit and expanding his business. He met Mr. Goldstein

12 around this time and they began working together shortly thereafter.

13 In 2017, Mr. Magana started a relationship with Porsha Daniels. Mr. Magana

14 was a single parent to Elijah at the time and in 2020 Porsha gave birth to a daughter

15 named Karis who is now two-years old.

16 Mr. Magana has been on bond under the supervision of Pretrial Services. He

17 has maintained compliance with the terms of his bond.

18 ///

19 ///

20 ///

21 ///

22 ///

23
24 5
The PSR determined that this offense warranted two criminal history points under the
25 USSG. Also, in February of 2014, Mr. Magana was convicted of two misdemeanors related to his
possession of a stolen motorcycle and stolen motorcycle parts (which were purchased on the internet)
26
in 2012. He was sentenced to one year of summary probation. After his plea and sentence on the
27 vehicular manslaughter case, his probation was violated and he was sentenced to serve 180 days in
28 the County Jail to run concurrent with his previously imposed sentence. The PSR determined that
this offense also warranted two criminal history points.

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1 IV

2 OBJECTIONS TO THE PRESENTENCE REPORT

3 PSR ¶¶ 22, 30-32

4 The PSR calculates a loss (or intended loss) amount of $1,555,248.00. Mr.

5 Magana disagrees with this calculation. The defendant submitted an application

6 for and received $360,415.00. He also submitted an application with Goldstein’s

7 involvement for a loan in the amount of $940,916.00. Although the funds were

8 not received, the amount is calculated as an intended loss. Accordingly, the total

9 amount of loss plus intended loss is $1,301,331.00.

10 The PSR calculates another loan application from Antelope Valley

11 Residential Development (Antelope Valley) for $252,917.00. Although Mr.

12 Magana was a 50% partner with Steven Goldstein in this company the loan

13 application listed Goldstein as the principal and Mr. Magana was not involved in

14 applying for the loan. Accordingly, the 16 point adjustment pursuant to USSG §

15 2B1.1(b)(1)(I) is incorrect. The appropriate increase should be 14 points because

16 the amount of the loss or intended loss was between $550,001.00 and $1,500,000.

17 (See USSG § 2B1.1(b)(1)(H).) The two point decrease would reduce the

18 defendant’s offense level from 24 to 22 with a corresponding range of 51 to 63

19 months.

20 PSR ¶ 61; USPO Recommendation Letter p. 6, 7

21 As noted above, there were no other fatalities associated with the

22 automobile accident resulting in Mariama’s death.

23 ///

24 ///

25 ///

26 ///

27 ///

28 ///

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Case 2:21-cr-00007-SB Document 55 Filed 01/10/22 Page 9 of 12 Page ID #:197

1 V

2 THE 18 U.S.C. §3553(a) FACTORS SUPPORT A SENTENCE OF NO

3 MORE THAN 24 MONTHS IN CUSTODY AND THREE YEARS

4 SUPERVISED RELEASE

5 Under United States v. Booker, 543 U.S. 220 (2005), the courts must take

6 the Guidelines into account under 18 U.S.C. § 3553(a)(4) as one factor to be

7 considered in imposing a sentence, but are not required to sentence within the

8 guideline range.

9 18 U.S.C. §3553(a) states that in considering the sentencing factors set out

10 in the statute, the Court shall impose a sentence “sufficient, but not greater than

11 necessary, to comply with the purposes set forth in paragraph (2) of this

12 subsection.”

13 Paragraph 2 of Title 18 U.S.C. §3553(a) states that the factors to be

14 considered in imposing such a sentence are the following:

15 (1) the nature and circumstances of the offense and the history and

16 characteristics of the defendant;

17 (2) the need for the sentence imposed-

18 (A) to reflect the seriousness of the offense, to promote respect for the

19 law, and to provide just punishment for the offense;

20 (B) to afford adequate deterrence to criminal conduct;

21 ( C ) to protect the public from further crimes of the defendant; and

22 (D) to provide the defendant with needed educational or vocational

23 training, medical care, or other correctional treatment in the most

24 effective manner;

25 (3) the kinds of sentences available;

26 (4) the kinds of sentence and the sentencing range established...by the

27 Sentencing Commission...[and]

28 (6) the need to avoid unwarranted sentence disparities among defendants

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Case 2:21-cr-00007-SB Document 55 Filed 01/10/22 Page 10 of 12 Page ID #:198

1 with similar records who have been found guilty of similar conduct.”

2 In this case, a consideration of all of the factors set forth in 18 U.S.C.

3 §3553(a) suggests that a non-guideline sentence of no more than 24 months

4 imprisonment is warranted.

5 At the time of sentencing, district courts must treat the sentencing

6 guidelines as an initial benchmark and then apply appropriate departures and

7 variances. Gall v. United States, 552 U.S. 38 (2007). Moreover, while

8 “departures” relate to the Guidelines, a “variance” refers to a non-guideline

9 sentence outside the Guidelines framework. Irizarry v. United States, 553 U.S.

10 708, 714 (2008).

11 This is a case where a variance or non-Guideline sentence is appropriate.

12 While Mr. Magana undoubtedly engaged in fraudulent conduct, his underlying

13 motive for doing so was to prevent his business from crashing in the early days of

14 the Covid pandemic and the concomitant panic, fear and desperation it brought

15 with it. The funds obtained were used to prevent the properties from going into

16 default, to pay workers and to keep the businesses afloat and protect investors.

17 This included making mortgage payments on the properties, paying laborers and

18 other contractors, paying for materials and maintaining permits and city fees.

19 None of the funds were used for vacations, luxury items, vehicles, etc.

20 Additionally, and as noted above, Mr. Magana will be able to make full

21 restitution by late March or early April of this year. He has spent the past year

22 getting two properties ready to list for sale. The properties were essentially

23 teardowns that had to be rebuilt from scratch. (See Defendant’s Motion for

24 Reconsideration, Docket No. 52.)

25 A sentence of no more than 24 months for Mr. Magana would also be

26 appropriate in light of Mr. Goldstein’s sentence of one year and one day. Without

27 minimizing Mr. Magana’s conduct in anyway, there is little question that

28 Goldstein was more sophisticated than Mr. Magana and was involved in a

10
Case 2:21-cr-00007-SB Document 55 Filed 01/10/22 Page 11 of 12 Page ID #:199

1 significantly higher actual loss amount than Mr. Magana. Additionally and

2 initially, Mr. Goldstein hired a friend of his to prepare the false data in support of

3 the loans and to prepare spread sheets. He would then provide the information to

4 Magana whose role was to upload the information onto the PDF applications and

5 submit them. Goldstein was also involved in the planning of the Building Circle

6 loan ($940,916.00) and expected to profit from the proceeds if and when the loan

7 was approved.

8 What is even more troubling is that after being shown unequivocal proof in

9 March and April of 2021 that Mr. Goldstein lied to the agents and concealed

10 crucial information both during his initial debriefing after his arrest and a later

11 proffer session, the government recommended that he receive 21 months

12 imprisonment. Although Mr. Magana has a criminal history, he never sought to

13 mislead the government or agents in this case and he provided truthful and

14 complete information to explain and clarify the false and misleading narrative

15 concocted by Mr. Goldstein.

16 While sentencing is of course an individualized process, a sentence of no

17 more than 24 months for Mr. Magana would be “sufficient, but not greater than

18 necessary, to comply with the purposes set forth in [18 U.S.C. 3553(a)]” and

19 would avoid an extreme sentencing disparity.

20 Mr. Magana is a single parent of his 10 year-old son and a co-parent of his 2

21 year-old daughter. While he has made some bad choices in the past, he has also

22 demonstrated a significant work ethic and drive to succeed. He was employed for

23 12 years by Bank of America and has worked extremely hard to create a successful

24 real estate business. During the period he has been under the supervision of

25 Pretrial Services he has not used any marijuana and has continued working to put

26 himself in a position to make full restitution and to support his family.

27 Mr. Magana understands that he made a terrible choice to engage in the

28 fraudulent conduct in this case and he has accepted full responsibility for his

11
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1 actions. He is deeply ashamed of himself and extremely remorseful on many

2 levels. He knows that his conduct has caused and will continue to cause pain,

3 sacrifice and heartache for his family and he has continually beaten himself up for

4 his significant lapse in judgment.

5 When considering the circumstances of the offense, as well as the mitigating

6 factors set forth in this memorandum, a sentence of no more than 24 months

7 imprisonment, three years of supervised release and a condition that he participate

8 in the Bureau of Prisons RDAP program and remain drug free while on supervised

9 release would be “sufficient, but not greater than necessary” to comply with the

10 sentencing factors set forth at 18 U.S.C. §3553(a)(2) and appropriate in this case.

11 Mr. Magana is a salvageable human being with numerous redeeming qualities and

12 a strong will to learn from his mistakes and rehabilitate and better himself.

13 VI

14 CONCLUSION

15 For all the foregoing reasons, it is respectfully requested that the relief

16 sought be granted.

17
Dated: January 10, 2022. Respectfully submitted,
18 LAW OFFICES OF WILLIAM S. PITMAN
19 By /s/ William S. Pitman
WILLIAM S. PITMAN
20 Attorney for Defendant
RAYMOND MAGANA
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