Defendant's Objections to the Presentence Investigation Report — United States v. Daniel Hernandez

Summary

Defendant's Objections to the Presentence Investigation Report, dated February 23, 2023, in United States of America v. Daniel Hernandez, Case No. 22-20529-CR-MOORE, Southern District of Florida. Hernandez states that he pled guilty to an information charging conspiracy to commit wire fraud and that the objections do not seek to alter the calculation of the guidelines. He objects to statements in paragraphs 29, 39, 71, and 127 that he required or advised borrowers to transfer loan funds out of their TD Bank accounts. He states that the Plea Agreement shows he conspired to submit between $9,500,000 and $25,000,000, not $30,000,000, and that the parties agree to several objections.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Cite this document

“Defendant's Objections to the Presentence Investigation Report — United States v. Daniel Hernandez.” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-s-d-fla-no-1-22-cr-20529-dkt-33-s-d-fla-10bb45f8ff/, SHA-256 8530189f4441c594b39182611824161ef7246c4561e6c9a4022544815a61ae3e.

Full text

Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 1 of 11

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO. 22-20529-CR-MOORE

UNITED STATES OF AMERICA,
Plaintiff,
v.

DANIEL HERNANDEZ,

Defendant.
_____________________________/
DEFENDANT’S OBJECTIONS TO
THE PRESENTENCE INVESTIGATION REPORT

Defendant, DANIEL HERNANDEZ, files his objections to the presentence

investigation report (“PSI”).

Mr. Hernandez, after self-surrendering, entered into a plea agreement, and

pled guilty to an information charging him with conspiracy to commit wire fraud. The

instant objections do not seek to alter PSI’s calculation of the guidelines, which are

consistent with the Plea Agreement. Nevertheless, some of the instant objections are

made to erroneous statements about Mr. Hernandezs’ criminal conduct and seek to

clarify some of the facts. While it is no doubt true that this is a serious case and Mr.

Hernandez acted wrongfully, something he has for some time accepted, it is only fair

that the Court should not consider erroneous or exaggerated misconduct.

The undesigned conferred with counsel for the government before the

defendant filed these objections. We have noted those instances parties agree.

1
Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 2 of 11

Objections to Paragraphs 29, 39, 71, and 127.

These four paragraphs make similar erroneous statements about Mr.

Hernandez’s criminal activity, namely that he required or advised the borrowers, who

submitted false loan applications, to be sure to immediately move or transfer the loan

funds out of their TD Bank accounts to avoid detection or launder the loan proceeds.

Paragraph 29 states: “Hernandez also advised applicants on how to launder

the loan proceeds to shield the fraud from detection.” Mr. Hernandez objects to this

sentence.

Paragraph 39 states: “According to Alfonso Barata, Hernandez had a very

specific and clear requirement for applicants they worked with, after receiving the

loans proceeds, the applicants had to transfer the loan proceeds out of TD Bank so

that TD Bank could not trace how the loan funds were used.” Mr. Hernandez objects

to this sentence.

Paragraph 71 states: “Further, nearly all the applicants, pursuant to

Hernandez’s requirement, quickly transferred the majority of the loan proceeds out

of TD Bank.” Mr. Hernandez objects to the statement that it was his “requirement”

that the subject borrowers or applicants transfer the funds.

Paragraph 127 states: “Hernandez also advised, led, and guided applicants on

how to launder the loan proceeds to shield the fraud from detection.” Mr. Hernandez

objects to this statement.

While it may be the case that many of the applicants transferred their

fraudulently obtained loan proceeds out of their TD Bank accounts shortly after they

2
Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 3 of 11

received the loan funds, it was not because Mr. Hernandez “required,” “advised,”

“led,” or “guided” them in doing so.

First, many of the borrowers had their bank accounts, including the accounts

that they used to make it appear like they were paying payroll, at other banks.

Indeed, it is the government’s theory of the case that many of the applicants opened

accounts at TD Bank for the purpose of obtaining fraudulent loans. The applicants or

borrowers transferred the funds to accounts at other banks for reasons that had

nothing to with anything Mr. Hernandez said or counseled. The borrowers, who were

committing fraud, knew well to transfer the funds from the TD Bank, the bank which

they used to defraud the government’s PPP Loan program. Indeed, the PSI generally

minimizes and diminishes the role and agency of the applicants or borrowers, who

ultimately submitted the false loan applicants and kept the lion’s share of the

fraudulently obtained proceeds from their loans. They did not need any help in trying

to avoid detection of their fraudulent loans from which they benefited more than

anyone else. And Mr. Hernandez did not, as repeatedly asserted in the PSI, which

relies on Afonso’s purported statements, require, or direct, the borrowers to transfer

the funds out of their TD Bank accounts to avoid detection.

Second, Mr. Hernandez had no contact with most of the borrowers and did not

lead, advise, require, or guide them in doing anything, much less in laundering their

loan proceeds. While Mr. Hernandez undoubtedly abused his position of trust at the

bank and was involved in the fraudulent scheme, it was his co-conspirators, Alfonso,

De Leon, a conspirator who is unnamed in the PSI, and others like William Posada

3
Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 4 of 11

(see ¶ 130, PSI), who worked for the unnamed conspirator, who recruited, led, and

directed applicants in submitting the false loan applications and documents and

communicated with the applicants or borrowers about their false PPP loans. Mr.

Hernandez kept track of the loans and when they may be approved, and

communicated with Alfonso, De Leon, and the unnamed conspirators such

information so that they could then collect from the borrowers their commissions. Mr.

Hernandez’s role and or assistance to the conspirators made it impossible for a

borrower to avoid paying a “commission” by claiming that the loan application was

rejected or unfunded. Mr. Hernandez referred some applicants or bank customers to

his coconspirators as well. But he played no role in telling the applicants or borrowers

that they must move or transfer the loan proceeds from TD Bank to avoid detection.

In sum, Mr. Hernandez objects to the above-mentioned sentences in

paragraphs 29, 39, 71, and 127. The parties agree to the objection to paragraphs 29,

39, 71, and 127.

Objection to Paragraphs 31.

This paragraph states: “Hernandez’s conspiracy attempted to defraud the PPP

loan program out of more than $30,000,000, and the EIDL Loan program out of more

than $7,000,000.” The plea agreement shows that Mr. Hernandez conspired to submit

between $9,500,000 and $25,000,000, not $30,000,000. See Plea Agreement, ECF 28,

¶ 7(b). The parties agree to this objection and that paragraph 31 should be consistent

with the loss amount set forth in the plea agreement.

4
Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 5 of 11

Further, Mr. Hernandez was not involved with, and did not conspire to, submit

more than $7,000,000 in EIDL loans. The parties agree to this objection.

Objection to Paragraph 32.

Mr. Hernandez objects to the statement in this paragraph that the borrowers

who Alfonso recruited applied for PPP loans through Hernandez. While it is correct

that Mr. Hernandez actively conspired with Alfonso to unlawfully profit from the

false loans, he objects to the extent that the PSI leaves the impression that the loan

applications were sent or submitted to him and that he underwrote and approved the

loans. Alfonso recruited borrowers and coached them on what to do to create the false

PPP loan applications. And he assisted them in submitting the loans directly to the

bank, not through Hernandez. Hernandez assisted Alfonso and tracked when the

loans were approved but he did not underwrite or approve them as suggested when

asserting that they were submitted “through” him.

Objection to paragraphs 34.

Mr. Hernandez objects to the sentence in paragraph 34 which asserts that he

“worked on” over 50 EIDL loan applications listed on De Leon’s spreadsheet. Mr.

Hernandez did not “work on” or conspire to submit over 50 EIDL loans. Mr.

Hernandez was only involved with 10 EIDL loans, 7 of which were declined. Unknown

to Mr. Hernandez, De Leon, on his own and without any involvement of Mr.

Hernandez, apparently assisted applicants in submitting over 50 false EIDL loan

applications. The parties agree on this objection.

5
Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 6 of 11

Objection to paragraph 37.

Mr. Hernandez objects to the sentence in this paragraph that asserts that he

“would work to have applications reviewed and approved by specific bank employees.”

This assertion misunderstands the facts, and the limits of Mr. Hernandez’s authority

at the TD Bank. It makes it appear like he assigned certain employees to review or

underwrite the loans. Mr. Hernandez could not, and did not, assign any specific TD

Bank employees to review, approve, or underwrite the subject PPP loans. Rather,

once a loan was submitted to the bank it went into a que and the bank assigned the

underwriting of the loans to TD Bank employees charged with underwriting

responsibility. Those underwriting employees did not have the authority to assign

themselves any loan files. Once a loan was assigned to a particular employee to be

underwritten, Mr. Hernandez sometimes tracked when the loans were approved and

sometimes communicated with the employees to ask that loans be reviewed. But he

could not, and did not, assign specific employees to review and approve (underwrite)

the loan applications. Hence, he objects. Although Mr. Hermandez is a guilty

conspirator, the inference or suggestion that he could underwrite and approve a loan,

or have a loan approved by an employee he controlled or assigned an application for

review is incorrect.

Objection to Paragraph 38.

Mr. Hernandez objects to the assertions that Hernandez advised Alfonso

Barata how much to request in a loan proceeds independent for the company’s

finances and that he wanted to know when a loan was submitted so that he could

6
Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 7 of 11

direct is review to someone Hernandez trusted. These assertions are incorrect. Mr.

Hernandez did not advise Alfonso Barata as the amounts to be requested in the loans.

Alfonso and the borrowers he recruited made up the false payroll amounts they used

to seek the loans. And, as stated above, Mr. Hernandez did not have the authority or

ability at assign anyone to underwrite a loan.

Paragraph 38 also misleadingly states that, according to Alfonso Barata,

Hernandez initially charged 12%, but increased the charge to $15%. While that is

what Alfonso Barata may have stated, it out leaves the fact that the amounts charged

are those that Alfonso Barata and Hernandez split. The parties agree that 12-15%

was what Alfonso Barata and Mr. Hernandez split.

Objection to paragraph 40.

In this paragraph, the PSI states that Alfonso Barata submitted 21

applications “at Hernandez” direction.” As “an example,” paragraph 40 PSI cites

paragraphs 41-52, which described the loans Alfonso Barata obtained for two entities

he controlled, Black Hookah and EJ Networking and Security Service. Nothing in

those paragraphs, however, shows how he submitted the loans at Mr. Hernandez’s

“direction.” Rather, they show how Alfonso shared the information about his two

loans with Hernandez and how they worked as conspirators with Hernandez tracking

the loan’s review and approval to assist Alfonso Barata. But it is Alfonso Barat who

submitted the false loan applications, false payroll records, and kept and controlled

most of the loan proceeds. Indeed, according to paragraph 58, Alfonso Barata, used

some of the loans’ proceeds to buy a yacht, a Sea Ray 44. Again, while paragraphs 41-

7
Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 8 of 11

52 show how Mr. Hernandez used his position at TD Bank to conspire with Alfonso

Barata to profit from the false loan applications (something that was undoubtedly

wrongful), they do not show that Alfonso Barata acted at “Mr. Hernandezs direction”

in submitting the loans. This paragraph exaggerates Mr. Hernandez’s influence over

Alfonso Barata and diminishes Alfonso Barata’s role and agency over his

participation in the scheme, which included his profiting from loans sought on behalf

of companies that he controlled.

Clarification to Paragraphs 59 and 68.

These paragraphs (and some of those that follow) describe Alfonso Barata

submitting a false PPP loan application on July 12, 2021, and receiving loan proceeds

on July 21, 2021. Mr. Hernandez seeks to clarify that he was not in involved with

any PPP loan Alfonso Barata may have submitted in 2021. Although these

paragraphs do not explicitly state that Mr. Hernandez conspired with Alfonso Barata

to submit the February 2021 loan, it leaves such impression. The parties agree on

this clarification.

Clarification to paragraph 76.

This paragraph states that Alfonso Barat went “numerous” times to Mr.

Hernandez home drop off his share of the commission. Hernandez seeks to clarify

how many times Alfonso Barata went to his house to share commissions. They met

at Mr. Hernandez’ home 4 times, on 04/22/20, 04/23/20, 05/02/20, and 06/13/20.

8
Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 9 of 11

Mr. Hernandez objects to the statement in paragraph 76 that he shared a

portion of the commission with another TD Bank employee during a visit from Afonso

Barata to drop off his share of the commission.

Objection to paragraph 77.

This paragraph asserts that, according to Alfonso Barata, “Hernandez wanted

to charge applicants an additional fee to have their loans forgiven and reportedly

responded by saying something to the extent that the applicants were already

receiving more that they were entitled to.” Mr. Hernandez objects to this statement.

It was Alfonso Barata who thought of the idea of charging the applicants, most of

whom he knew and recruited, an additional fee to obtain loan forgiveness because the

thought it was unfair that they kept most of the loan proceeds from the fraudulent

loans that he and Hernandez had helped them obtain.

Clarification to paragraph 78.

This paragraph asserts that following a disagreement between Hernandez and

Afonso Barata that Hernandez returned at least a portion of the loan proceeds. It

was all the loan commissions, which Afonso Barat had shared with Hernandez,

except for those relating to two loans. Hernandez returned approximately $300,000

to Alfonso Barata. So, it is true that “at least a portion” was returned but candor

requires that we disclose how much.

Objection to paragraph 111.

This paragraph describes a spreadsheet that De Leon created and kept and

that it recorded over 50 EIDL loans. While it is true that it refers to EIDL loans, Mr.

9
Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 10 of 11

Hernandez objects to the extent that the PSI asserts that Mr. Hernandez conspired

with De Leon to submit over 50 EIDL loans. See objections to paragraphs 31 and 34

above. The parties agree on this objection.

Clarifications to paragraphs 126 and 180.

Mr. Hernandez self-surrendered on August 9, 2022. The exact amount which

Mr. Hernandez surrendered to the FBI is $606,060. The parties agree on this

clarification.

Objection to paragraph 178.

This paragraph fails to note Mr. Hernandez’s and his wife’s mortgage of

$542,362 as a liability. This appears to be inadvertent as it is described in paragraph

181. The parties agree on this objection.

Wherefore, the Defendant, Daniel Hernandez, respectfully requests that the

Court sustain his objections to the PSI.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that, on February 23, 2023, a true and correct copy of

the foregoing has been furnished electronically via CMCEF to all counsel of record.

Respectfully submitted,

BELL ROSQUETE REYES ESTEBAN, PLLC
999 Ponce De Leon Blvd.
Suite 810
Coral Gables, Florida 33134
Telephone: (305) 570-1610
Facsimile: (305) 570-1599

10
Case 1:22-cr-20529-KMM Document 33 Entered on FLSD Docket 02/23/2023 Page 11 of 11

Email: hbell@bresq.com
Counsel for Daniel Hernandez

By: ____s/Henry P. Bell_____
Henry P. Bell
Florida Bar No. 090689

File and source

File: 33.pdf
Size: 197,889 bytes
SHA-256: 8530189f4441c594b39182611824161ef7246c4561e6c9a4022544815a61ae3e
Our copy: 33.pdf
Original: No public link identified.