Government's Sentencing Position Regarding Defendant Natalie Le Demola (Document 494)

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Government's Sentencing Position Regarding Defendant Natalie Le Demola, filed June 28, 2023 as Document 494 in No. CR 22-CR-00205-JFW-1, with a sentencing hearing date of July 10, 2023 before the Honorable John F. Walter. The government says she led and orchestrated a brazen EDD fraud scheme, concurs with the presentence report's criminal history calculation and its 16-Level Loss Enhancement, and asks the Court to reject her arguments. It recommends 102 months' imprisonment, including a mandatory 24-month consecutive sentence, three years' supervised release, a $500 special assessment and restitution of $933,181.

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“Government's Sentencing Position Regarding Defendant Natalie Le Demola (Document 494).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-c-d-cal-no-2-22-cr-00205-dkt-494-c-d-cal-2a8f7f2c0b/, SHA-256 653099c4f779b066d555fcb8b462065baace4503a409c4fb7a63da1903d556ef.

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Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 1 of 23 Page ID #:2525

1 E. MARTIN ESTRADA
United States Attorney
2 ANNAMARTINE SALICK
Assistant United States Attorney
3 Chief, National Security Division
DAVID C. LACHMAN (Cal. Bar No. 261711)
4 NISHA CHANDRAN (Cal. Bar No. 325345)
Assistant United States Attorneys
5 1500 United States Courthouse
312 North Spring Street
6 Los Angeles, California 90012
Telephone: (213) 894-5564/2429
7 Facsimile: (213) 894-2927
E-mail: david.lachman@usdoj.gov
8 nisha.chandran@usdoj.gov

9 Attorneys for Plaintiff
UNITED STATES OF AMERICA
10
UNITED STATES DISTRICT COURT
11
FOR THE CENTRAL DISTRICT OF CALIFORNIA
12
UNITED STATES OF AMERICA, No. CR 22-CR-00205-JFW-1
13
Plaintiff, GOVERNMENT’S SENTENCING POSITION
14 REGARDING DEFENDANT NATALIE LE
v. DEMOLA
15
NATALIE LE DEMOLA et al., Sentencing
16 Hearing Date: July 10, 2023
Defendants. Hearing Time: 8:00 a.m.
17 Location: Courtroom of the
Honorable John F.
18 Walter
19

20 Plaintiff United States of America, by and through its counsel
21 of record, the United States Attorney for the Central District of
22 California and Assistant United States Attorneys David C. Lachman and
23 Nisha Chandran, hereby files its sentencing position for defendant
24 NATALIE LE DEMOLA.
25 This sentencing position is based upon the attached memorandum
26 of points and authorities, the files and records in this case, the
27 United States Probation and Pretrial Services Office’s presentence
28 //
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 2 of 23 Page ID #:2526

1 investigation report, and such further evidence and argument as the

2 Court may permit.

3 Dated: June 28, 2023 Respectfully submitted,

4 E. MARTIN ESTRADA
United States Attorney
5
ANNAMARTINE SALICK
6 Assistant United States Attorney
Chief, National Security Division
7

8 /s/
DAVID C. LACHMAN
9 NISHA CHANDRAN
Assistant United States Attorneys
10
Attorneys for Plaintiff
11 UNITED STATES OF AMERICA
12

18
19

2
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 3 of 23 Page ID #:2527

1 TABLE OF CONTENTS

2 I. INTRODUCTION...................................................1

3 II. DEFENDANT LED AND ORCHESTRATED A BRAZEN EDD FRAUD SCHEME.......3

4 III. THE USPPO’S CALCULATIONS.......................................6

5 A. The Government Concurs with the USPPO’s Criminal
History Calculations and the Guidelines Base Offense
6 Level.....................................................6

7 B. The Government Concurs with the PSR’s 16-Level Loss
Enhancement...............................................7
8
C. The Court Should Reject Defendant’s Argument that
9 Schemes that Defraud the Public Are Less Harmful..........9

10 D. The Government Concurs with the PSR’s 2-Level Increase
Because the Scheme Involved 10 or More Victims............9
11
E. The Government Disagrees with the PSR’s Two-Level
12 Increase Because the Scheme Used Means of
Identification to Obtain Means of Identification.........11
13
F. A Four-Level Increase Applies to Defendant’s
14 Guidelines Offense Level Because Defendant was a
Leader Within the EDD Fraud Scheme.......................12
15
G. Joint and Several Restitution Obligation.................15
16
IV. THE GOVERNMENT RECOMMENDS 102 MONTHS’ INCARCERATION...........15
17
A. Need to Afford Adequate Deterrence.......................15
18
B. Seriousness of the Offense...............................17
19
C. Need to Avoid Unwarranted Disparities....................18
20
V. CONCLUSION....................................................18
21

28
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 4 of 23 Page ID #:2528

1 TABLE OF AUTHORITIES

2 CASES

3 Gall v. United States,
552 U.S. 38 (2007)............................................21
4
United States v. Anderson,
5 532 F. App’x 373 (4th Cir. 2013)..............................13

6 United States v. Avila,
95 F.3d 887 (9th Cir. 1996)...............................15, 17
7
United States v. Edwards,
8 595 F.3d 1004 (9th Cir. 2010).................................19

9 United States v. Gagarin,
950 F.3d 596 (9th Cir. 2020)..............................15, 16
10
United States v. Hoffman,
11 901 F.3d 523 (5th Cir. 2018)..................................10

12 United States v. Ingham,
486 F.3d 1068 (9th Cir. 2007).............................15, 17
13
United States v. Martin,
14 455 F.3d 1227 (11th Cir. 2006)................................18

15 United States v. Ovsepian,
674 F. App’x 712 (9th Cir. 2017)..............................12
16
United States v. Smith,
17 751 F.3d 107 (3d Cir. 2014)...................................13

18 United States v. Treadwell,
593 F.3d 990 (9th Cir. 2010)..................................21
19
STATUTES
20
18 U.S.C. § 1028A...........................................5, 13, 15
21
18 U.S.C. § 1344.................................................5, 7
22
18 U.S.C. § 1349..............................................5, 7, 9
23
18 U.S.C. § 3553............................................6, 19, 21
24
OTHER AUTHORITIES
25
Francesca R. Jensensius & Abby K. Wood, Caught in the Act but
26 Not Punished: On Elite Rule of Law and Deterrence, 4 Penn.
State J.L. & Int’l Affairs 686, 688 (2016)....................21
27
Stephanos Bibas, White-Collar Plea Bargaining and Sentencing
28 After Booker, 47 Wm. & Mary L. Rev. 721, 724 (2005)...........19

ii
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 5 of 23 Page ID #:2529

1 SENTENCING GUIDELINES

2 U.S.S.G. § 2B1.1...............................................passim

3 U.S.S.G. § 2B1.6...............................................14, 15

4 U.S.S.G. § 3B1.1...........................................15, 16, 18

5 U.S.S.G. § 3E1.1...............................................10, 18

18
19

iii
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 6 of 23 Page ID #:2530

1 MEMORANDUM OF POINTS AND AUTHORITIES

2 I. INTRODUCTION
3 Beginning in June 2020, defendant NATALIE LE DEMOLA
4 (“defendant”) led and organized from prison a large-scale scheme to
5 fraudulently obtain Pandemic Unemployment Assistance benefits
6 intended for residences of California who were unemployed because of
7 the COVID-19 pandemic. Defendant and her co-conspirators procured
8 personal identifying information (“PII”) of individuals who were
9 ineligible for unemployment insurance benefits, typically because
10 they were incarcerated. Defendant and her co-conspirators used that
11 information to submit fraudulent online applications to the
12 California Employment Development Department (“EDD”) for pandemic
13 benefits, causing EDD to disburse approximately $1.7 million in
14 pandemic benefits to EDD debit accounts. Defendant then shared
15 information to access the EDD accounts and her co-conspirators
16 assumed the identities of more than 150 victims to withdraw hundreds
17 of thousands of dollars in pandemic benefits from ATMs in Los Angeles
18 County. On March 7, 2023, defendant pleaded guilty without a plea
19 agreement to conspiracy to commit wire fraud and bank fraud in
20 violation of 18 U.S.C. § 1349 (count one), bank fraud in violation of
21 18 U.S.C. § 1344(2) (counts three, four, and seven), and aggravated
22 identity theft in violation of 18 U.S.C. § 1028A (count thirty-
23 three). The parties filed a Joint Statement Regarding Defendant’s
24 Rule 11 Plea on March 6, 2023 (Dkt. 321).
25 The United States Probation and Presentence Office (“USPPO”)
26 issued its Presentence Report (“PSR”) and Recommendation Letter
27 (“Rec. Letter”) on June 5, 2023. (Dkts. 450, 451.) The PSR
28 calculated a total offense level of 24, which included a sixteen-
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 7 of 23 Page ID #:2531

1 level increase because the loss attributable to defendant was greater

2 than $1,500,000 but less than $3,500,000, a two-level increase

3 because the scheme involved ten or more victims, a two-level increase

4 because the offense involved the use of means of identification to

5 obtain other means of identification, and a three-level reduction for

6 defendant’s acceptance of responsibility. (PSR ¶¶ 50-67.) The PSR

7 did not include an increase for defendant’s aggravating role in the

8 offense. (PSR ¶¶ 57-61.) Based on a total offense level of 24, and

9 a Criminal History Category of III, the PSR calculated an advisory

10 Guideline range of 63 to 78 months’ incarceration. (PSR ¶ 131.) The

11 PSR did not identify any factors that would warrant a departure from

12 the applicable Guidelines range, but noted that the history and

13 characteristics of the defendant may warrant a variance. (PSR ¶¶

14 152-153.) The USPPO recommended a sentence of 65 months’

15 imprisonment, followed by a three-year term of supervised release.

16 (Rec. Letter at 2-3.) The USPPO also calculated that the reasonably

17 foreseeable intended loss is $1,699,975 and the actual loss to EDD

18 was $933,181. (PSR ¶ 51.)

19 Defendant’s criminal conduct was more than a series of bad

20 decisions. She led and organized a scheme that defrauded taxpayers

21 of millions of dollars in EDD funds while serving a life sentence in

22 for murder, aided by a contraband phone and with the assistance of a

23 California Department of Corrections (“CDCR”) employee. All of the

24 relevant sentencing factors articulated in 18 U.S.C. § 3553 favor a

25 significant sentence for such a dedicated criminal.

26 The government agrees with the PSR’s criminal history

27 calculation and the base offense level calculation. However, the

28 government believes that the two-level increase imposed because the

2
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 8 of 23 Page ID #:2532

1 offense involved the use of means of identification to obtain other

2 means of identification should not apply, and believes that a four-

3 level increase should apply based on defendant’s aggravating role as

4 an organizer or leader of the EDD fraud scheme. In light of this,

5 the total offense level calculation increases to 26 and the resulting

6 advisory Guidelines range is 78 to 97 months (plus a two-year

7 mandatory consecutive sentence on Count Thirty-Three). Thus, the

8 government respectfully requests that the Court sentence defendant

9 to: (1) a Guidelines term of 102 months’ imprisonment (including the

10 two-year mandatory consecutive sentence on Count thirty-three); (2)

11 five years of supervised release; (3) restitution in the amount of

12 $933,181 (jointly and severally liable with all co-defendants); and

13 (4) a mandatory special assessment of $500.

14 II. DEFENDANT LED AND ORCHESTRATED A BRAZEN EDD FRAUD SCHEME

15 By now, the salient facts of the case are no doubt well known to

16 the Court. As defendant admitted at her change of plea hearing (Rule

17 11 Joint Statement ¶ 13):

18 Beginning no later than June 2020, and continuing through at

19 least in or about April 2021, in Los Angeles County and elsewhere,

20 defendant conspired with co-defendant Carleisha Plummer (“Plummer”)

21 and others known and unknown to commit wire fraud, in violation of 18

22 U.S.C. § 1349, and bank fraud, in violation of 18 U.S.C. § 1344(2).

23 Defendant participated in the conspiracy from at least June 2020

24 until at least September 2020.

25 In furtherance of this scheme, and to accomplish its objectives,

26 defendant used PII belonging to other people to fraudulently acquire

27 unemployment insurance benefits from EDD, including Pandemic

28 Unemployment Assistance benefits for residents of California who were

3
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 9 of 23 Page ID #:2533

1 unemployed because of the Covid-19 pandemic (“pandemic benefits”).

2 Specifically, defendant and her co-conspirators would obtain the PII,

3 such as the names, dates of birth, and social security numbers, of

4 other individuals who were ineligible for unemployment insurance

5 benefits, including pandemic benefits. Many of the PII pertained to

6 individuals who were incarcerated at CDCR institutions. Defendant

7 and her co-conspirators then electronically submitted fraudulent

8 online applications to EDD for pandemic benefits using these

9 individuals’ PII. On the fraudulent applications, defendant and her

10 co-conspirators often assumed the victims’ identities and provided

11 materially false information to EDD, including that the applicants

12 were unemployed as a direct result of the Covid-19 pandemic.

13 For example, defendant obtained the PII of CDCR inmates D.F. and

14 M.D.S. and then submitted applications to EDD using their PII. D.F.

15 did not authorize defendant to apply for pandemic benefits using her

16 PII while M.D.S. incorrectly believed that defendant would provide

17 him a portion of any pandemic benefits obtained using his PII.

18 Defendant also submitted an application to EDD in her own name

19 despite knowing that she was ineligible for pandemic benefits because

20 she was incarcerated. By submitting the fraudulent EDD applications,

21 defendant and her co-conspirators caused EDD to transmit emails to

22 email addresses they provided, and to authorize pandemic benefits to

23 be provided to individuals who were ineligible for pandemic benefits.

24 After EDD approved the fraudulent applications and disbursed the

25 pandemic benefits funds to the EDD debit accounts, and Bank of

26 America issued the EDD debit cards linked to those accounts,

27 defendant’s co-conspirators used the EDD debit cards to make

28 fraudulent cash withdrawals of pandemic benefits from automated

4
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 10 of 23 Page ID #:2534

1 teller machines (“ATMs”) in Los Angeles County and elsewhere,

2 including at ATMs operated by Bank of America and other financial

3 institutions.

4 For example, on July 10, 2020, defendant and her co-schemers,

5 each aiding and abetting one another, caused the withdrawal of $1,000

6 using an EDD debit card issued in the name of M.D.S at a Bank of

7 America ATM in Wilmington, California. The next day, July 11, 2020,

8 defendant and her co-schemers, each aiding and abetting one another,

9 likewise caused the withdrawal of $1,000 using an EDD debit card

10 issued in the name of D.F. at a Bank of America ATM in Wilmington,

11 California. Four days later, on July 15, 2020, defendant and her co-

12 schemers, each aiding and abetting one another, caused the withdrawal

13 of another $1,000 using an EDD debit card in the name of D.F. at a

14 Bank of America ATM in Wilmington, California. Each of these

15 withdrawals occurred at an ATM operated by Bank of America and drew

16 on funds held in Bank of America debit accounts. Defendant and her

17 co-schemers knew that they were not entitled to these cash

18 withdrawals.

19 Additionally, beginning on or about June 23, 2020, and

20 continuing until on or about July 18, 2020, in Los Angeles and San

21 Bernardino Counties, within the Central District of California, and

22 elsewhere, defendant knowingly transferred, possessed, and used,

23 without lawful authority, means of identification that defendant knew

24 belonged to other real persons, namely, the names and EDD account

25 numbers of M.D.S. and D.F. during and in relation to the conspiracy

26 to commit wire fraud and bank fraud in violation of 18 U.S.C. § 1349,

27 as charged in count one of the indictment.

5
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 11 of 23 Page ID #:2535

1 III. THE USPPO’S CALCULATIONS

2 A. The Government Concurs with the USPPO’s Criminal History
Calculations and the Guidelines Base Offense Level.
3
Based on defendant’s first-degree murder conviction, with
4
enhancements for inflicting torture and lying-in-wait, for killing
5
her mother, the USPPO determined that defendant has three criminal
6
history points. (PSR ¶ 73.) Defendant also committed the instant
7
offense while serving a prison sentence, increasing defendant’s total
8
criminal history score to five. (PSR ¶ 75.) Defendant thus falls
9
within Criminal History Category III. (PSR ¶ 76.) The government
10
concurs with this calculation.
11
The PSR also calculated, based on the above facts, a total
12
offense level of 24. (PSR ¶ 67.) The government concurs with the
13
base offense level of 7 calculated by the PSR. (PSR ¶ 67.) The
14
PSR’s total offense level calculation is as follows:
15
Base Offense Level: 7 U.S.S.G. § 2B1.1(a)(1)
16
$1,500,000 < Loss Amount
17 < $3,500,000: +16 U.S.S.G. § 2B1.1(b)(1)(G)
18
10 or More Victims: +2 U.S.S.G. § 2B1.1(b)(2)(A)
19
Use of Means of
20 Identification to
Obtain Means of
21 Identification: +2 U.S.S.G. § 2B1.1(b)(11)(C)(i)
22
Acceptance of
23 Responsibility: -3 U.S.S.G. § 3E1.1(a)-(b)

24 ____________________________

25 TOTAL: 24

26 Based on that calculation, the USPPO recognized that a total

27 offense level of 24 and a Criminal History Category of III yield an

28 advisory Guidelines range of 63 to 78 months’ imprisonment, followed

6
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 12 of 23 Page ID #:2536

1 by a two-year mandatory consecutive sentence, and period of

2 supervised release of two to five years on counts one, three, four,

3 and seven, which are Class B felonies, and one year on count thirty-

4 three, a Class E Felony. (PSR ¶¶ 134-138.)

5 B. The Government Concurs with the PSR’s 16-Level Loss
Enhancement.
6
The U.S.S.G. § 2B1.1(b)(1) enhancement is intended to reflect
7
defendant’s culpability, based on “the greater of actual loss or
8
intended loss.” U.S.S.G. § 2B1.1, App. Note 3. “Intended loss”
9
refers to the pecuniary harm that defendant purposely sought to
10
inflict and includes the intended harm even if “that would have been
11
impossible or unlikely to occur.” Id. The reason for using intended
12
loss is that it is a “direct measure of culpable mental state” and
13
reflects the defendant’s culpability. United States v. Hoffman, 901
14
F.3d 523, 558 (5th Cir. 2018) (citations omitted) (explaining that “a
15
focus on intended loss makes sense for moral and utilitarian
16
considerations” (cleaned up)). Consistent with this principle, the
17
16-level enhancement here appropriately captures the culpability of
18
defendant’s mens rea and, in turn, the commensurate seriousness of
19
her crime when a defendant like this one threatens and intends the
20
loss of over $1.7 million in losses to government assistance
21
programs.
22
Here, it is evident that the intent of defendant’s crimes was to
23
fully convert all of the unemployment assistance funds fraudulently
24
obtained from California EDD for her and her co-conspirators’ use.
25
For example, defendant admits that she obtained the PII of D.F. and
26
M.D.S., who were incarcerated, and that she submitted applications to
27
EDD with the PII of D.F. and M.D.S. (Rule 11 Statement ¶ 13.)
28

7
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 13 of 23 Page ID #:2537

1 Defendant then transmitted the information required to access the

2 D.F. and M.D.S. accounts to co-defendant Plummer twice, instructing

3 her to “call and change pin” for the D.F. and M.D.S. accounts, and to

4 “cert” [to recertify eligibility] for the D.F. account. (PSR ¶ 35.)

5 As a result of defendant’s actions and her directions to co-

6 conspirators, EDD loaded $13,392 on the D.F. account. Defendant’s

7 co-conspirators withdrew $13,387.99 from the D.F. account.

8 Similarly, as a result of defendant’s actions, EDD loaded $12,392 on

9 the M.D.S. account. Defendant’s co-conspirators withdrew $12,389.69

10 from the M.D.S. account. In other words, for these two easily

11 traceable accounts, defendant and her co-conspirators left less than

12 $5 on each account. Defendant intended for and instructed her co-

13 conspirators to be able to drain all of the funds obtained from

14 California EDD. 1 Thus, the intended loss amount of $1.7 million,

15 which EDD loaded onto the fraudulent EDD accounts, is the most

16 accurate measure of loss and defendant’s culpability. See U.S.S.G. §

18
19 1This intent to drain full accounts is seen throughout the EDD
accounts used in the fraud scheme. In response to the Court’s
20 questions at the June 26, 2023 sentencing hearings, the government
conducted further inquiry into the actual and intended loss amounts
21 in the case.
Late on June 26, 2023, the government received a revised loss
22 calculation and learned that several previously produced documents
summarizing the loss on individual EDD accounts were improperly
23 formatted and had not, in fact, been included in the government’s
summary charts.
24
Based on this revised analysis, EDD loaded $1,699,975 onto the
25 EDD accounts created by defendant and her co-defendants, and a total
of $1,563,668.03 was withdrawn or accessed from the EDD debit card
26 accounts. Because this revised actual loss amount was not included
in the government’s summary charts produced before any defendant
27 pleaded guilty, the government maintains that the appropriate
restitution amount is $933,181. However, because the corrected
28 actual loss amount is $1,563,668.03, a 16-level increase is
appropriate even if the Court were to rely on actual loss.
8
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 14 of 23 Page ID #:2538

1 2B1.1 cmt. n.3(C) (requiring that a district court “make a reasonable

2 estimate of the loss”).

3 C. The Court Should Reject Defendant’s Argument that Schemes
that Defraud the Public Are Less Harmful.
4

5 Defendant attempts to minimize the relevant loss amount, arguing

6 that the loss here is overstated because the impact was felt by a

7 California public assistance program, and thus California taxpayers

8 at large, rather than an individual victim. (Def. Obj., Dkt. 462, at

9 3-4.) But defendant took advantage of a public benefit program

10 intended to help Californians who were employed because of the global

11 Covid-19 pandemic. (Rule 11 Statement ¶ 13.) The $1.7 million

12 disbursed by EDD to this fraud scheme and the time to process its

13 fraudulent applications were necessarily not available to other

14 legitimate recipients in need of the funds. A two-level variance is

15 not appropriate.

16 D. The Government Concurs with the PSR’s 2-Level Increase
Because the Scheme Involved 10 or More Victims.
17

18 The fact that defendant is being sentenced for aggravated
19 identity theft does not preclude a two-level increase because the

20 scheme involved ten or more victims pursuant to U.S.S.G.

21 §2B1.1(b)(2)(A). (Def. Obj. at 6-7.) Defendant correctly cites to

22 United States v. Ovsepian, 674 F. App’x 712 (9th Cir. 2017), which

23 found that “the district court did not engage in impermissible double

24 counting in applying a two-level enhancement for number of victims

25 under U.S.S.G. § 2B1.1(b)(2) relating to defendant’s health care

26 fraud scheme in addition to imposing defendant’s consecutive sentence

27 for aggravated identity theft under 18 U.S.C. § 1028A. The Ninth

28 Circuit explained that “[t]he number-of-victims enhancement serves a

9
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 15 of 23 Page ID #:2539

1 purpose distinct from punishing identity theft: punishing offenders

2 based on the number of victims.” Id. at 713 (citing United States v.

3 Smith, 751 F.3d 107, 121 (3d Cir. 2014) (“Quite plainly, the victim

4 enhancement under § 2B1.1(b)(2) is not an enhancement based on the

5 use of a ‘means of identification’; it is an enhancement based on the

6 number of victims.”)).

7 Defendant’s argument has also been rejected by other circuits.

8 See United States v. Anderson, 532 F. App’x 373, 378 (4th Cir. 2013)

9 (“Like all of our sister circuits to have considered the issue, we

10 conclude instead that § 2B1.6 does not preclude a district court from

11 imposing a number-of-victims enhancement in conjunction with a

12 sentence for aggravated identity theft”) (collecting cases from

13 Sixth, Tenth, Third, and Eighth Circuits). In Anderson, the Fourth

14 Circuit explained that:

15 [U.S.S.G. § 2B1.6 (Aggravated Identity Theft) cmt. n.2]
instructs a district court to refrain from applying an
16 enhancement only if it is triggered by a “specific
offense characteristic for the transfer, possession, or
17 use of a means of identification.” The most natural
reading of the comment limits its application to
18 enhancements linked to the nature of the offense . . .
. By contrast, the § 2B1.1(b)(2)(A) enhancement at issue
19 here looks only to the number of victims of the offense
. . . . the number-of-victims enhancement ‘punishes the
20 impact of the crime, not the transfer, possession, or
use of a means of identification.’
21
Id. at 378-79. Defendant is being sentenced for conspiracy to commit
22
bank and wire fraud (count one) and for bank fraud (counts three,
23
four, and seven), which involved more than 150 victims (PSR ¶ 53),
24
and the PSR correctly applied the two-level increase.
25

10
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 16 of 23 Page ID #:2540

1 E. The Government Disagrees with the PSR’s Two-Level Increase
Because the Scheme Used Means of Identification to Obtain
2 Means of Identification.

3 The government agrees with the PSR’s factual analysis finding

4 that defendant and her co-conspirators used the PII (such as names,

5 social security numbers, and dates of births) of individuals to

6 obtain EDD-issued debit cards with account numbers linked to

7 fraudulent applications for EDD benefits. (PSR ¶ 55.) The

8 government agrees that this conduct would ordinarily support a two-

9 level increase pursuant to U.S.S.G. § 2B1.1(b)(11)(C)(i) because the

10 offense involved “the unauthorized transfer or use of a means of

11 identification [i.e., names, social security numbers, and other PII]

12 unlawfully to produce or obtain any other means of identification

13 [i.e., EDD account numbers].” (PSR ¶ 54; U.S.S.G. §

14 2B1.1(b)(11)(C)(i).)

15 However, the government agrees with defendant (Def. Obj. at 4)

16 that because defendant was also convicted of count thirty-three, for

17 aggravated identity theft, in violation of 18 U.S.C. 1028A, this two-

18 level increase does not apply. Application Note 2 to U.S.S.G. §

19 2B1.6 directs that if a sentence is imposed under § 2B1.6 for

20 aggravated identity theft, “do not apply any specific offense

21 characteristic for the transfer, possession, or use of a means of

22 identification when determining the sentence for the underlying

23 offense. A sentence under this guideline [§ 2B1.6] accounts for this

24 factor for the underlying offense of conviction.” Thus, the two-

25 level increase pursuant to U.S.S.G. § 2B1.1(b)(11)(C)(i) does not

26 apply.

11
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 17 of 23 Page ID #:2541

1 F. A Four-Level Increase Applies to Defendant’s Guidelines
Offense Level Because Defendant was a Leader Within the EDD
2 Fraud Scheme.

3 Defendant was an organizer or leader of the charged criminal

4 activity, which involved five or more participants or was otherwise

5 extensive, and a four-level increase applies. U.S.S.G. § 3B1.1(a).

6 In determining whether a defendant is a leader or organizer, the

7 Court should consider the following factors: the exercise of decision

8 making authority, the nature of participation in the commission of

9 the offense, the recruitment of accomplices, the claimed right to a

10 larger share of the fruits of the crime, the degree of participation

11 in planning or organizing the offense, the nature and scope of the

12 illegal activity, and the degree of control and authority exercised

13 over others. U.S.S.G. § 3B1.1, App. Note 4. “[T]o sustain a finding

14 that a defendant was an organizer or a leader [under § 3B1.1(a)],

15 there must be evidence that the defendant exercised some control over

16 others involved in the commission of the offense or was responsible

17 for organizing others for the purpose of carrying out the crime.”

18 United States v. Ingham, 486 F.3d 1068, 1074 (9th Cir. 2007) (citing
19 United States v. Avila, 95 F.3d 887, 890 (9th Cir. 1996)) (rejecting

20 argument that control and organizational authority are required).

21 The role enhancement does not apply if the defendant and the other

22 participants are merely “co-equal conspirators.” United States v.

23 Gagarin, 950 F.3d 596, 606 (9th Cir. 2020) (quotation omitted).

24 Defendant was not a “patsy.” (Def. Sent. Pos. at 1.) She was

25 at the center of the EDD fraud scheme. Defendant and her co-

26 conspirators obtained the PII that was essential to the scheme. (PSR

27 ¶ 26.) Specifically, defendant admitted that she, along with co-

28 conspirator Plummer, solicited PII from incarcerated CDCR inmates and

12
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 18 of 23 Page ID #:2542

1 defendant herself obtained PII from a CDCR employee, who accessed the

2 CDCR databases for this purposes. Witnesses specifically reported

3 watching defendant exit the CDCR employee’s office with a stack of

4 printouts with the PII. (Id.) Defendant’s emails and recorded phone

5 calls show that she managed and distributed to co-conspirators the

6 usernames and passwords (including security questions) for the

7 various EDD accounts involved in the scheme, gave directions for how

8 to conduct the scheme (e.g., how to change addresses on EDD accounts

9 when needed), gave directions for which EDD accounts needed to have a

10 changed PIN number, and gave directions for where to send mail

11 related to the scheme. (See PSR ¶¶ 34-35.) Defendant also clearly

12 had organizational control over the scheme as she followed up with

13 co-conspirators and held them accountable, saying, “I don’t mean to

14 keep reminding u, but can u please get on it and tell me what is done

15 once u do it,” listing several EDD scheme tasks. (PSR ¶ 35.)

16 Additionally, and reflective of the control she exercised,

17 scheme members viewed defendant as the leader of the scheme. For

18 example, one co-defendant updated defendant that he received an EDD
19 card and then begged defendant for permission to activate it. (PSR ¶

20 36.) Another co-defendant contacted defendant to complain that she

21 was not receiving EDD cards and threatened to go to law enforcement.

22 (Plea Agreement for D. Martin, Dkt. 380, ¶ 12). In response,

23 defendant provided the co-defendant with credentials to log into two

24 EDD accounts, informing the co-defendant that the EDD cards had been

25 sent to a P.O. Box where no one was able to sign for the delivery.

26 (Id.) Co-conspirators understood that defendant knew where the EDD

27 cards were and that she could unlock their access to more funds.

13
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 19 of 23 Page ID #:2543

1 Defendant exerted control, at a minimum, over the distribution

2 and access to the EDD accounts, and organizational authority over the

3 victims’ PII from the CDCR employee and the fraud scheme tasks to be

4 completed. See Gagarin, 950 F.3d at 607 (applying a three-level

5 aggravating role and finding significant that defendant guided others

6 through actions to further the conspiracy, including directing the

7 use of the bank accounts, and giving phone numbers to use as the

8 numbers for fake insurance applications). And defendant participated

9 in every part of the fraud scheme that was not prevented by her

10 incarceration. The government submits that a four-level increase

11 under this section is appropriate.

12 * * *

13 Accordingly, the government believes the total offense level

14 calculation for defendant is as follows:

15 Base Offense Level: 7 U.S.S.G. § 2B1.1(a)(1)

16 $1,500,000 < Loss Amount
< $3,500,000: +16 U.S.S.G. § 2B1.1(b)(1)(G)
17

18 10 or More Victims: +2 U.S.S.G. § 2B1.1(b)(2)(A)

19 Leader or Organizer: +4 U.S.S.G. § 3B1.1(a)

20 Acceptance of
Responsibility: -3 U.S.S.G. § 3E1.1(a)-(b)
21
____________________________
22
TOTAL: 26
23
Based on a Criminal History Category of III, the advisory
24
Guidelines range is 78 to 97 months’ imprisonment, followed by a two-
25
year mandatory consecutive sentence. The government’s recommended
26
sentence is at the low-end of this advisory Guidelines range.
27

14
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 20 of 23 Page ID #:2544

1 G. Joint and Several Restitution Obligation

2 The government agrees that defendant should be ordered to pay

3 $933,181 in restitution to EDD. (Rec. Letter at 1.) However, in

4 light of her leadership role in the organization, the government

5 submits that defendant should be held jointly and severally liable

6 with all co-defendants, to the extent that each is convicted and

7 determined liable for losses attributable to the same fraudulently

8 obtained benefits. (Rec. Letter at 2.) The victim’s recovery

9 remains limited to the amount of their loss and the defendant’s

10 liability for restitution ceases if and when the victim receives full

11 restitution.

12 IV. THE GOVERNMENT RECOMMENDS 102 MONTHS’ INCARCERATION

13 The government recommends that the defendant be sentenced to a

14 Guidelines term of 102 months’ imprisonment, a three-year period of

15 supervised release, a $500 special assessment, and restitution of

16 $933,181. Such a sentence is sufficient, but not greater than

17 necessary, to achieve the purposes set forth in 18 U.S.C. § 3553(a).

18 A. Need to Afford Adequate Deterrence

19 Economic crimes like the charged EDD scheme are quintessentially

20 deterrable, elevating the deterrence of a significant term of

21 imprisonment to its zenith in cases like this one. “Because economic

22 and fraud-based crimes are ‘more rational, cool, and calculated than

23 sudden crimes of passion or opportunity,’ these crimes are ‘prime

24 candidate[s] for general deterrence.’” See United States v. Martin,

25 455 F.3d 1227, 1240 (11th Cir. 2006) (quoting Stephanos Bibas, White-

26 Collar Plea Bargaining and Sentencing After Booker, 47 Wm. & Mary L.

27 Rev. 721, 724 (2005)). In fact, Congress, in drafting section 3553,

28 confirmed that this common-sense principle was one of the driving

15
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 21 of 23 Page ID #:2545

1 forces for including deterrence among the goals of sentencing. See

2 S. Rep. No. 98-255, at 76 (1983), reprinted in 1984 U.S.C.C.A.N.

3 3182, 3259 (“To deter others from committing the offense . . . is

4 particularly important in the area of white collar crime.”). Indeed,

5 Congress was expressly concerned with the fact that “[m]ajor white

6 collar criminals often are sentenced to . . . little or no

7 imprisonment,” which the offenders disregard as “a cost of doing

8 business.” Id. As Judge Bea has written, “bank fraud, unlike an

9 assault in a tavern or even domestic abuse, tends to be a planned,

10 deliberate crime, which allows plenty of time for reflection,

11 calculation of the odds of success or failure, and the ultimate

12 decision.” United States v. Edwards, 595 F.3d 1004, 1021 (9th Cir.

13 2010) (Bea, J., concurring).

14 Defendant’s brazen EDD fraud scheme — which involved harvesting

15 PII belonging to other inmates, using that information to

16 fraudulently procure pandemic unemployment benefits, and then using a

17 network of accomplices to withdraw the funds, all while serving a

18 life sentence in California state prison — was no crime of passion or
19 emotional outburst. Nor was she feeding an addiction or suffering

20 from mental illness. Instead, defendant made a cost-benefit analysis

21 and decided that the money and influence, including among fellow

22 inmates, that she stood to gain was worth the additional penalties

23 she faced if she were caught. For almost a year, and to the tune of

24 nearly $1.7 million, defendant’s decision paid off. Unless

25 defendant’s crimes are met with an adequate punishment, others like

26 her – including other inmates - will undoubtedly make the same

27 calculation she did, and many of those will do so without ever being

28 apprehended.

16
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 22 of 23 Page ID #:2546

1 The fact that defendant was already incarcerated on a life

2 sentence further demonstrates the need for a sentence that affords

3 adequate deterrence. As a general rule, “deterrence from criminal

4 behavior is a function of the probability of detection, the size of

5 the sanction, and the benefit that the would-be violator stands to

6 gain if not detected.” Francesca R. Jensensius & Abby K. Wood,

7 Caught in the Act but Not Punished: On Elite Rule of Law and

8 Deterrence, 4 Penn. State J.L. & Int’l Affairs 686, 688 (2016).

9 Defendant led and organized a scheme in which she and her co-

10 conspirators pocketed hundreds of thousands of dollars allocated for

11 residents of California who were unemployed on account of the COVID-

12 19 pandemic. The severity of defendant’s sentence must therefore

13 reflect not only the seriousness of her conduct but the need to deter

14 inmates from committing crimes and the difficulty inherent in

15 detecting, apprehending, and convicting fraudsters who seek to abuse

16 public benefits programs.

17 B. Seriousness of the Offense

18 This is a case in which the sentencing guidelines appropriately
19 identify the factors that make defendant’s conduct so serious: the

20 $1.7 million in intended losses, the number of individuals whose

21 identities she obtained or corruptly procured with the assistance of

22 a CDCR employee, hers and others’ connections with the Hoover Crips

23 street gang (the same gang that also contributed to defendant’s

24 murder of her mother), and defendant’s role as its principal

25 organizer. Together, these factors speak to a sophisticated criminal

26 whose conduct calls for a substantial criminal sentence.

27 While the seriousness of defendant’s conduct speaks for itself,

28 several other factors demonstrate the need for defendant’s sentence

17
Case 2:22-cr-00205-JFW Document 494 Filed 06/28/23 Page 23 of 23 Page ID #:2547

1 to sufficiently “provide just punishment.” 18 U.S.C.

2 § 3553(a)(2)(A). First, defendant’s crime was no momentary lapse in

3 judgment. It was rather a lifestyle, his sole identifiable source of

4 income for years. Likewise, just as defendant’s offense is more

5 susceptible to deterrence because it arose from a calculated cost-

6 benefit analysis, so too it is all the more serious, since it was the

7 product of a series of deliberate choices. Finally, that she is one

8 of the scheme’s two most culpable members – its ringleader and

9 organizer – demonstrates her contempt for the law.

10 C. Need to Avoid Unwarranted Disparities

11 Section 3553(a)(6) requires the Court to minimize sentencing

12 disparities among similarly situated defendants. One way of doing so

13 is to correctly calculate the Guidelines range and then sentence

14 defendants within that range. See United States v. Treadwell, 593

15 F.3d 990, 1011 (9th Cir. 2010) (“Because the Guidelines range was

16 correctly calculated, the district court was entitled to rely on the

17 Guidelines range in determining that there was no ‘unwarranted

18 disparity’ . . . .”); Gall v. United States, 552 U.S. 38, 54 (2007)
19 (“[A]voidance of unwarranted disparities was clearly considered by

20 the Sentencing Commission when setting the Guidelines ranges.”). The

21 government’s within-Guidelines recommended sentence avoids an

22 unwarranted disparity with similarly situated defendants.

23 V. CONCLUSION

24 For the foregoing reasons, the government recommends that the

25 Court sentence defendant to 102 months’ imprisonment (including a

26 mandatory 24-month consecutive sentence), three years’ supervised

27 release, a $500 special assessment, and restitution of $933,181.

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