Defendant's Sentencing Memorandum — United States v. Daniel Hernandez (Document 34, entered February 28, 2023)

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Defendant's Sentencing Memorandum in United States v. Daniel Hernandez, Case No. 22-20529-CR-MOORE, U.S. District Court for the Southern District of Florida, filed February 28, 2023. The memorandum asks the Court to vary below the applicable sentencing guidelines and impose a sentence of 78 months of imprisonment, stating that the guidelines provide for a range of 97-121 months. It argues that Mr. Hernandez has no prior criminal history, confessed early, agreed to cooperate, and turned over $606,060 to the government. It also argues that there are unwarranted disparities in the role enhancements applied to other conspirators, and it requests voluntary surrender to the facility within the BOP where Mr. Hernandez is designated.

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“Defendant's Sentencing Memorandum — United States v. Daniel Hernandez (Document 34, entered February 28, 2023).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-s-d-fla-no-1-22-cr-20529-dkt-34-s-d-fla-3cd3951a63/, SHA-256 3038a60501b1151ece573cd47dee8c289c85e3da2ac42c08d85fa2a422bf96d0.

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Case 1:22-cr-20529-KMM Document 34 Entered on FLSD Docket 02/28/2023 Page 1 of 13

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF FLORIDA

CASE NO: 22-20529-CR-MOORE

THE UNITED STATES OF AMERICA,

Plaintiff,

DANIEL HERNANDEZ,

Defendant.
/

DEFENDANT’S SENTENCING MEMORANDUM

Defendant, DANIEL HERNANDEZ, files his Sentencing Memorandum,

requesting that the Court vary below the applicable sentencing guidelines in

sentencing him and impose a sentence of 78 months of imprisonment. In support, he

states:

Imposing a sentence on a fellow human being is a formidable
responsibility. It requires a court to consider, with great care and
sensitivity, a large complex of facts and factors. The notion that
this complicated analysis, and moral responsibility, can be
reduced to the mechanical adding-up of a small set of numbers
artificially assigned to a few arbitrarily-selected variables wars
with common sense. Whereas apples and oranges may have but a
few salient qualities, human beings in their interactions with
society are too complicated to be treated like commodities, and the
attempt to do so can only lead to bizarre results.1

1. United States v. Gupta, 904 F. Supp.2d 349, 350 (S.D.N.Y. 2012) aff’d, 747 F.3d 111 (2nd. Cir.
2014).
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While Mr. Hernandez’s criminal conduct was wrongful and he appreciates that

the Court will sentence him to a term of imprisonment, a review of the applicable

sentencing factors under 18 U.S.C. § 3553(e) weigh in favor a below guideline sentence.

The applicable guidelines provide for a range of imprisonment of 97-121 months. PSI, ¶

191. We respectfully request that the Court impose a sentence of 78 months.

Mr. Hernandez has no prior criminal history. He presents little or no risk of

reoffending. An effective deterrent message can easily be sent with a sentence of 78

months rather than 97-121 months of imprisonment. Mr. Hernandez confessed early

and agreed to proceed by information and cooperate with the prosecution. And he

disgorged the lucre he kept when he turned over $606,060 to the government.

A lengthy discussion of the applicable case law holding that the guidelines are

advisory is unnecessary. The Court is well versed in the law, and it is well established

that the Court should tailor the sentence to be imposed in line with the factors or

considerations set forth in 18 U.S.C. § 3553(a). Indeed, the Supreme Court held that

the guidelines are not to be presumed reasonable. Nelson v. United States, 555 U.S.

350, 352 (2009) (“[t]he Guidelines are not only not mandatory on sentencing courts;

they are also not to be presumed reasonable.”) (emphasis in original); Rita v. United

States, 551 U.S. 338, 351 (2007). See also, Kimbrough v. United States, 552 U.S. 85, 113

(2007) (The Court must conduct an individual assessment of the defendant based on

the §3553(a) factors and may “reject (after due consideration) the advice of the

Guidelines.”); United States v. Hunt, 459 F.3d at 1180 1184 (11th Cir. 2016) (“If Booker

is to mean anything, it must be that district courts are obligated to impose a reasonable
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sentence, regardless of the guideline range, so long as the Guidelines have been

considered.”).

Below we discuss several of the section 3553(e) factors as they apply to Mr.

Hernandez.

A. The Nature and Circumstances of the Offense.

To start, we appreciate the subject PPP loan fraud scheme to which Mr.

Hernandez pled guilty is a serious offense and we do not pretend otherwise. We further

appreciate the fact that Mr. Hernandez used his position with his employer, TD Bank,

to profit from the scheme. Nevertheless, it is worth noting that Mr. Hernandez

disgorged the lucre he held from the scheme. More specifically, throughout the scheme,

Mr. Hernandez and those coconspirators described in the PSI (Alfonso, De Leon, and

the unindicted coconspirator) received from the borrowers (also conspirators) payments

or commissions for helping them with their fraudulent loans, which they then split.

Those “commissions” were paid to Mr. Hernandez in cash. On December 22, 2022, at

the undersigned’s office, Mr. Hernandez voluntarily met with FBI agents in this case

and handed them the cash he continued to hold - $606,060.

While fraud prosecutions are common, it is rare for a defendant to admit he is

sitting on a significant sum of cash from the fraud that he then on his own turns over

to the government. In doing exactly that here, Mr. Hernandez did everything within

his grasp to mitigate the impact of his unlawful profiteering from the scheme and

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disgorge the lucre he held. Hence, while this matter involves a serious fraud offense,

Mr. Hernandez’s disgorgement of the $606,060 weighs in favor of leniency.

B. History and Circumstances of the Defendant.

Consideration of the sentencing factors under § 3553(e) begins with the

recognition that a defendant’s history and characteristics may support a downward

variance and should be afforded the same weight as the other factors. United States v.

Rodriguez, 724 F. Supp. 1118, 1119 (S.D.N.Y. 1989). See also United States v. Prosperi,

686 F.3d 32, 39 & 45 (1st Cir. 2012) (affirming downward variance from 87-108 months

to home detention because the loss numbers did not take into account the personal

characteristics of the defendant); United States v. Martin, 520 F.3d 87, 93 (1st Cir.

2008) (affirming a 91-month variance down from the guideline range based in part on

“the support that the defendant stood to receive from his family [and] personal

qualities indicating his potential for rehabilitation”). As one court eloquently stated

with respect to this factor:

But, surely, if ever a man is to receive credit for the good he
has done, and his immediate misconduct assessed in the
context of his overall life hitherto, it should be at the
moment of his sentencing, when his very future hangs in the
balance. This elementary principle of weighing the good
with the bad, which is basic to all the great religions, moral
philosophies, and systems of justice, was plainly part of
what Congress had in mind when it directed courts to
consider, as a necessary sentencing factor, “the history and
characteristics of the defendant.”

United States v. Adelson, 441 F.Supp.2d 506, 513-14 (S.D.N.Y. 2006).

Mr. Hernandez, who has no prior criminal history, is a supportive father,

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stepfather, son, sibling, and a valued member of his family. In his household, he is the

primary economic support for his wife who discontinued working after a cancer

diagnosis and treatment.

While Mr. Hernandez committed a grievous wrong, in sentencing him, the

Court should avoid defining him solely by his lowest or worst moments. Mr.

Hernandez’s history and characteristics weigh in his favor of his being be treated

with some leniency.

C. The Need to Promote Respect for the Law and Deterrence.

These factors are intertwined and revolve around the message a sentence sends

to the defendant and would-be-offenders to dissuade them from committing similar

offenses. There are two kinds of deterrence, specific deterrence, and general deterrence.

As for specific deterrence, there is little chance, if any, that Mr. Hernandez, who

is in fifties already, will again engage in any sort of criminal conduct. He is integrated

into a supportive family, and he has no prior criminal record. And while on bond

release he found another job and continued to work, holding down a job working for

landscaping business. PSI, ¶ 174.

Mr. Hernandez’s background and extremely low likelihood of recidivating may

justify a downward variance or departure. In United States v. Clay, 483 F.3d 739 (11th

Cir. 2007), the Eleventh Circuit affirmed a sentence of 60 months based on the district

court’s view that the defendant was unlikely to reoffend, even though the defendant’s

guideline range was 188-235 months. The Eleventh Circuit stressed that a sentencing

court is “require[d] . . . to consider characteristics of the defendant and the offense that
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make it more or less likely that the defendant will reoffend.” Id. at 745. See also,

United States v. Chase, 828, 831 (8th Cir. 2009) (finding that lack of criminal history

can be considered as a basis for downward variance even though it is considered in

calculating the guideline range); United States v. Darway, 255 Fed. Appx. 68, 73 (6th

Cir. 2007) (upholding downward variance on basis of defendant’s first-offender status);

United States v. Hamilton, 323 Fed. Appx. 27, 31 (2d Cir. 2009) (“the district court

abused its discretion in not taking into account policy considerations with regard to age

recidivism not included in the Guidelines”); United States v. Urbina, 2009 WL 565485,

*3 (E.D. Wis. Mar. 5, 2009) (considering low risk of recidivism indicated by defendant’s

lack of criminal record, positive work history, and strong family ties); United States v.

Cabrera, 567 F. Supp. 2d 271, 279 (D. Mass. 2008) (granting variance because

defendants “with zero criminal history points are less likely to recidivate than all other

offenders”). United States v. Ruiz, 2006 WL 1311982, at *4 (S.D.N.Y. May 10, 2006)

(“This Court and others have previously declined to impose Guidelines sentences on

defendants who, like Ruiz, were over the age of forty at the time of sentencing on the

grounds that such defendants exhibit markedly lower rates of recidivism in comparison

to younger defendants.”).

A strict guideline sentence of 97-121 months of imprisonment is simply

unnecessary to deter Mr. Hernandez from future criminal behavior. In fashioning an

individualized sentence, the fact that Mr. Hernandez is highly unlikely to recidivate

favors leniency.

General deterrence is a more difficult factor to weigh and measure. However, in
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assessing how severe a sentence the Court should impose upon Mr. Hernandez to send

a deterrent message to other potential offenders, the Court should consider the fact

that that it is the certainty of being caught and punished rather than the length of a

sentence which best serves to deter potential offenders. Studies have shown that

increasing the severity of a person’s sentence does little to deter future crime. U.S.

Dep’t of Justice, Nat’l Inst. Of Justice, Five Things About Deterrence (May 2016) (citing

Daniel S. Nagin, Deterrence in the Twenty-First Century, Crime and Justice: A Review

of Research, vol. 43 (2013)). Further, lengthy prison sentences are less likely to reduce

the likelihood of recidivism. See Valerie Wright, Sentencing Project, Deterrence in

Criminal Justice: Evaluating Certainty vs. Severity in Punishment 7 (2010) (finding

that “[a]mong low-risk offenders, those who spent less time in prison were 4% less

likely to recidivate than low-risk offenders who served longer sentences”). Instead,

research has consistently shown that while the certainty of being caught and punished

has a deterrent effect, “increases in severity of punishments do not yield significant (if

any) marginal deterrent effects.” Michael Tonry, Purposes and Functions of Sentencing,

34 Crime & Just. 1, 28 (2006) (“Three National Academy of Science Panels…. reached

that conclusion, as have every major survey of the evidence.”); Zvi D. Gabbay,

Exploring the Limits of the Restorative Justice Paradigm: Restorative Justice and

White-Collar Crime, 8 Cardozo J. Conflict Resol. 421, 447-48 (2007) (“[C]ertainty of

punishment is empirically known to be a far better deterrent than its severity.”). See

also Adelson, 441 F. Supp.2d at 514 (S.D.N.Y. 2006) (J. Rakoff) (“There is considerable

evidence that even relatively short sentences can have a strong deterrent effect on
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prospective white-collar offenders.”).

Here, the government appears to be actively investigating and indicting many

PPP loan fraud cases and, as such, disabusing many offenders and would be offenders

of the false impression they had that they somehow could easily get away with

defrauding the government. The truth is that is not so easy to get away with

defrauding the government, as this prosecution and many others have shown. Many

offenders are being held to account and, like Mr. Hernandez will be, are serving prison

sentences. Indeed, it appears that the number of PPP loan fraud related cases is only

increasing. The word is out that the government is coming for those who defrauded the

government’s PPP loan program.

Further, although sending a deterrent message is important, the Court should

avoid over-emphasizing general deterrence. See United States v. Gardellini, 545 F.3d

1089, 1095 (D.C. Cir. 2008) (rejecting government's contention that affirming a

probationary sentence imposed in criminal tax case would lessen deterrent value of

criminal law "because it elevates one § 3553(a) factor - deterrence - above all

others. As § 3553(a) makes clear, the district court at sentencing must consider and

balance a number of factors- not all of which will point in the same direction.").

Here, with the many prison sentences being imposed in similar fraud cases, including

the one which Mr. Hernandez will serve, it is unnecessary to impose upon him a

sentence of 97 or more months to send an effective and compelling deterrent message.

Again, we appreciate that this is a serious matter, but the sentence of 78 months in

prison requested through this memorandum does not in any way diminish the offense’s
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seriousness while also providing a meaningful deterrent message.

D. Unwarranted Disparities.

A close reading of the PSI shows that there are unwarranted disparities in how

the guidelines are being applied to other important conspirators in this case. See PSI,

¶¶ 127-129 (addressing the defendants’ roles). The PSI asserts, consistent with the

Plea Agreement, that Mr. Hernandez should receive a four-level aggravating role

enhancement pursuant to U.S.S.G. § 3B1.1(a) because he was a leader or organizer of

criminal activity involving five more participants or that was otherwise extensive. PSI,

¶127. To be sure, the conspiracy here involved five or more participants because the

defendants conspired with the borrowers who were the chief beneficiaries of their

fraudulent loans. When there are five or more participants, an aggravating role

increase is of either three or four levels. U.S.S.G. §§ 3B1.1(a) and (b). A two-level

increase is not an option when five or more participants are involved in the offense.

Compare U.S.S.G. §§ 3B1.1 (a) and (b) with U.S.S.G. § 3B1.1 (c).

Despite the uncontroverted fact that this case involves well over five

participants, the PSI (and apparently the plea agreements) provides that De Leon and

Alfonso, who are every bit as culpable as Mr. Hernandez, especially when considering

that they profited handsomely from their own fraudulent loans and recruited, directed,

and influenced many more criminal participants (the borrowers) than Mr. Hernandez,

receive only two-level role enhancements. See PSI, ¶¶ 138 and 129. According to the

PSI, the two-level enhancements applicable to De Leon and Alfonso are provided for

pursuant to U.S.S.G. § 3B1.1(c). Id. As explained above, however, there is no legal basis
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Case 1:22-cr-20529-KMM Document 34 Entered on FLSD Docket 02/28/2023 Page 10 of 13

for imposing only a two-level role enhancement on any defendant in this case who

played an aggravating role because the offense involved five or more participants

participants. U.S.S.G. § 3B1.1(a) and (b).

Further, the crux of an aggravating role enhancement turns on whether the

defendant led or directed other participants. See United States v. Glover, 179 F.3d 1300

(11th Cir. 1999); United States v. Harness, 180 F.3d 1232 (11th Cir. 1999), United States

v. Campa, 529 F.3d 980, 1013 (11th Cir. 2008), United States v. Martinez, 584 F.3d 1022

(11th Cir. 2009), United States v. Jennings, 599 F.3d 1241, 1253 (11th Cir. 2010). De

Leon, Alfonso, and the unindicted co-conspirator are no less culpable than Mr.

Hernandez. While Mr. Hernandez faces an abuse of trust enhancement because he was

employed by the bank while involved in the scheme, when it comes to leading or

organizing other participants in the fraud,2 they are equally culpable to Mr. Hernandez

and played more important roles as defined by the aggravating role guideline, U.S.S.G.

§ 3B1.1, because they recruited and influenced scores of borrowers for whom they also

provided the false documents they submitted with the false loan applications. In

influencing and controlling other participants in the fraud scheme, which lies at the

heart of the guideline, Alfonso, De Leon, and the unindicted coconspirator are more,

not less culpable, than Mr. Hernandez, yet they face lower aggravating role

enhancements than the four-level increase Mr. Hernandez faces because of his

2. De Leon, who the PSI does not describe as facing an abuse of trust enhancement, was also
employed by TD Bank when he submitted fraudulent loans to TD Bank for his benefit on behalf of
companies he controlled. See U.S. v. Armando De Leon, Case No. 22-20420-Martinez, Criminal
Complaint, ECF 1(describing De Leon submitting false loan applications to Bank 1 (TD Bank)
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aggravating role. Accordingly, Mr. Hernandez’s guideline range is overstated in

comparison to De Leon and Alfonso’s guideline ranges.

In sum, the misapplication of the role guidelines to provide lower enhancements

for De Leon and Alfonso and the special treatment of the unindicted coconspirator are

unwarranted disparities that the Court should consider. There is no difference in their

roles as defined by U.S.S.G. § 3B1.1. Accordingly, the unwarranted disparities here

weigh in favor of a downward variance for Mr. Hernandez.

E. The Applicable Sentencing Guidelines are Harsher than

Necessary.

The applicable guideline range calls for a term of imprisonment of imprisonment

of 97-121 months in prison. The sentencing guidelines, however, are but one of the

considerations that the Court must consider in fashioning a fair and reasonable

sentence. See Hunt, supra, at page 2. As recognized by the Eleventh Circuit in United

States v. Glover, 431 F.3d 744, 752-753 (11th Cir. 2005), in some cases, the guidelines

may have little persuasive force when considering some of the other § 3553(a) factors.

In Mr. Hernandez’s case, a sentence of 97 months or more would be harsher than

necessary to achieve the goals of the sentencing statute. A strong deterrent message

can be sent with a sentence lower than 97 months of imprisonment. Mr. Hernandez

presents little or no risk of recidivating. His background and characteristics show he

has no prior criminal history and that he is a valued and selfless member of his family.

He agreed to plead guilty early to an information and is trying to rectify his

where he was employed when submitting the applications.
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wrongdoing by cooperating with the government, which shows that he recognizes the

wrongfulness of his conduct and further demonstrates that he is most unlikely to ever

commit a fraud offense again. Mr. Hernandez voluntarily disgorged the lucre he held.

And there exists unwarranted disparities in the calculation of the role guidelines

between the defendants which further warrants a downward variance.

Request for voluntarily surrender.

To facilitate Mr. Hernandez’s ongoing cooperation, Mr. Hernandez requests that

the Court permit Mr. Hernandez to voluntarily surrender to the facility within the

BOP where he is designated to serve his sentence.

WHOREFORE, for the above stated reasons, the defendant, Daniel Hernandez,

respectfully requests that the Court vary below the applicable guideline range and

impose upon him a sentence of 78 months imprisonment.

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on February 28, 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
Direct Line: (305) 570-1576
Cellular: (305) 781-8111
Facsimile: (305) 570-1599
Email: hbell@brresq.com

By: s/ Henry P. Bell_____
HENRY P. BELL
Fla. Bar No. 0090689

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