Government’s Sentencing Memorandum — United States v. Robert Hamilton, No. 20-CR-196-4 (Dkt. 122, E.D. Wis.)
Summary
In this sentencing memorandum filed June 15, 2021 (Dkt. 122, No. 20-CR-196-4, E.D. Wis.), the government asks for a prison term at the bottom of the 21 to 27 month guideline range, two years of supervised release and $155,000 in restitution for Robert Hamilton. Hamilton pleaded guilty to bank fraud (Count Three) for submitting a PPP application seeking $155,000 for Glory Transportation Services, LLC, which had no employees or payroll as of February 2020, and then paying $30,000 of the proceeds to Thomas Smith by cashier's check. The memo says the wider fraud sought over $1 million in government funds for employees that did not exist, and calls Thomas Smith the ringleader, already sentenced to 57 months. It calls Hamilton far less culpable: recruited by Thomas Smith, owner of an operating business, with no criminal history, though Hamilton lied to law enforcement.
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
UNITED STATES OF AMERICA,
Plaintiff,
v. Case No. 20-CR-196-4
ROBERT HAMILTON,
Defendant.
GOVERNMENT’S SENTENCING MEMORANDUM
Robert Hamilton (“the Defendant”) submitted a fraudulent Paycheck Protection
Program (“PPP”) application seeking $155,000 to Financial Institution 1 for his business
Glory Transportation Services, LLC (“Glory Transportation”). For his conduct, the
Defendant faces a guideline sentencing range of 21-27 months’ incarceration as
recommended by the Plea Agreement (Dkt. 38) and the Presentence Investigation
Report (Dkt. 117) and a statutory maximum sentence of 30 years’ incarceration. In light
of the factors in 18 U.S.C. § 3553 and for the reasons set for below, the United States
respectfully requests that this Court impose a term of imprisonment at the bottom of the
United States Sentencing Guidelines (the “Guidelines” or “U.S.S.G.”) range, two years
of supervised release, and order the Defendant to pay $155,000 in restitution.
I. OVERVIEW OF UNITED STATES V. THOMAS SMITH, ET AL.
The Defendant was one of the defendants charged by Indictment in United States
v. Thomas Smith, et al., which involved charges of bank fraud conspiracy and money
laundering against him and four other individuals. All of the charged conduct took
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place in the spring and summer of 2020. As described more fully in the Indictment and
plea agreements associated with each of the defendants, the defendants obtained
fraudulent PPP loans from a bank using false and fraudulent application materials. See
Dkt. Nos 1, 5, 38, 42, 53, 73. In addition to the five defendants charged in the
Indictment, three other defendants were charged by Information for their part of the
scheme. See United States v. Tarone Woods, 20 CR 197; United States v. Deon Petty, 20 CR
199; United States v. Marvin Fitzgerald, 20 CR 202. In total, the scheme sought over $1
million in government funds for employees (and sometimes businesses) that did not
exist. Id. Proceeds of the fraud were shared among co-defendants. Id. Some of the
defendants also coordinated the false statements they planned to provide law
enforcement, if approached, to try to conceal their crimes.
II. OVERVIEW OF UNITED STATES V. ROBERT HAMILTON
A more detailed recitation of the facts relating to the scheme are detailed in the
Defendant’s plea agreement (Dkt No. 38), the plea agreements of the related defendants
in the case, the PSR, and the government’s submission regarding restitution. (Dkt. No.
87.)
Stephen Smith approached the Defendant in April 2020 and asked him whether
he had received a PPP loan for Glory Transportation. When the Defendant said he had
not, Stephen Smith told him to contact Thomas Smith, who could help him with the
paperwork to get the loan. While Glory Transportation was a functioning company, it
did not have any employees or payroll as of February 2020, and thus was not eligible
for a PPP loan.
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The Defendant went to Thomas Smith’s office to discuss getting the loan.
Thomas Smith told the Defendant that he would complete the loan paperwork and
provide it to the Defendant to sign and drop off at Financial Institution 1. The
Defendant signed the application and dropped it off at Financial Institution 1 as
directed. He also agreed to provide Thomas Smith with $30,000 of the loan proceeds
after the loan was funded.
After the loan was funded, the Defendant obtained a cashier’s check for $30,000
payable to Thomas Smith. When he met Thomas Smith to deliver the check, Thomas
Smith told the Defendant that if anyone asked about why the Defendant had paid him
money, the Defendant should say it was for equipment or vans. Thomas Smith also
said that the Defendant should pay Stephen Smith $10,000 of the loan money because it
was Stephen Smith’s idea. The Defendant declined to do so.
III. PROCEDURAL BACKGROUND
A more detailed recitation of the procedural history of this case can be found in
the Government’s Position on Restitution. (Dkt. 87.) To summarize, on October 20,
2020, a grand jury returned an indictment charging the Defendant, Thomas Smith,
Stephen Smith, Samuel Davis, and Jonathan Henley for participating in a bank fraud
scheme between April 2020 and July 2020, in violation of Title 18, United States Code,
Section 1344, and for engaging in money laundering, in violation of Title 18, United
States Code, Section 1957. (Dkt. 1.)
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The Defendant pled guilty to Count Three of the Indictment (Bank Fraud, in
violation of Title 18, United States Code, Section 1344) pursuant to a written plea
agreement on January 6, 2021. (Dkt. 25.) Sentencing is scheduled for June 21, 2021.
IV. SENTENCING GUIDELINES CALCULATIONS
The United States agrees with the Probation Office’s calculation of the Guidelines
in this case. The Final Presentence Investigation Report, filed on June 15, 2021,
determined that the total offense level was 16 and that the Defendant’s criminal history
category was I, which corresponds to an advisory Guidelines range of 21 to 27 months’
imprisonment. (PSR ¶ 96.) The Probation Officer found that the Defendant was subject
to a Base Offense Level of seven under U.S.S.G. § 2B1.1(a)(1). (Id. at ¶ 41.) The
Defendant then received a 10-level enhancement for a loss exceeding $150,000 but less
than $250,000 under U.S.S.G. § 2B1.1(b)(1)(F). (Id. at ¶ 42.) The Defendant received a
two-level enhancement because the offense involved sophisticated means under
U.S.S.G. §2B1.1(b)(10)(C). (Id. ¶ 43.)
The parties and the Probation Office agree that the Defendant is entitled to a two-
level reduction for acceptance of responsibility. The Defendant has assisted authorities
in the investigation and prosecution of his own misconduct by pleading guilty prior to
indictment, thereby permitting the United States to avoid preparing for trial and
permitting the United States and the Court to allocate their resources efficiently.
Therefore, the United States moves the Court, under Section 3E1.1(b), to grant the
Defendant an additional one-level reduction in the offense level for acceptance of
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responsibility if the Defendant receives the two-level reduction for acceptance of
responsibility.
With a Total Offense Level as Level 16, and a Criminal History Category of I, the
Sentencing Guidelines recommend a sentence between 21- and 27-months’
imprisonment. The United States agrees with the PSR’s Guidelines’ Calculations and
has no corrections to the PSR.
V. CONSIDERATION OF FACTORS UNDER SECTION 3553(A)
A. Nature and Circumstances of the Offense
The Defendant’s offense is a serious one meriting punishment. In 2020, as the
COVID-19 pandemic spread across the country causing death and economic distress,
the government created PPP loans to help small businesses whose livelihoods were
jeopardized. The Defendant, who was the owner of a business that was not eligible for
a PPP loan, took advantage of the program by submitting a false application claiming to
have employees and payroll that did not exist. His application was supported by false
tax forms. Furthermore, upon being discovered, the Defendant chose to continue with
the scheme by trying to conceal his conduct. He told multiple lies to law enforcement
about the state of Glory Transportation and his payment to Thomas Smith.
Still, there are some mitigating factors which weigh against imposing the most
serious available sentence. The Defendant had a far more minor role in the scheme as
compared to the ringleaders, Thomas and Stephen Smith. He did not fill out the loan
application or create the fake tax forms. Furthermore, unlike his co-schemers, the
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Defendant never made false statements to the bank after submitting the fraudulent
application.
Finally, unlike many of his co-schemers, the Defendant actually had an
operational business at the time he applied for the loan. Though Glory Transportation
did not have employees for which it paid taxes, the company was in existence and did
create revenue. It should be considered that the Defendant did in fact have a business
when evaluating the circumstances of the offense.
B. History and Characteristics of the Defendant
The Defendant is a 59-year-old man who is in good health. (PSR ¶¶ 59, 70.) He
grew up in a stable family and has close relationships with an extended family. (Id.
¶¶ 59-66.) The Defendant has been married to his wife since 2010, and he has two adult
children from a previous marriage. (Id. ¶¶ 65-66.) The Defendant received his Masters
of Education in 2010, and has been employed as a high school special education teacher
since 1987. (Id. ¶¶ 81, 85.) He also works part time as a forensic specialist and owns
Glory Transportation. (Id. ¶ 83-84.) The Defendant has no criminal history. (Id. ¶ 64.)
A significant mitigating factor for the Defendant is his acceptance of
responsibility, which saved the government considerable resources in preparing for
trial. Furthermore, as is clear by the fact that the Defendant held three jobs at the time
of the offense, the Defendant committed this offense due to a desire to provide for his
family and support his business, which supports a sentence at the bottom of the
Guidelines. See e.g. United States v. Eggleston, 347 F.Supp.3d 381, 384 (E.D. Wisc. 2018)
(in bank fraud case, noting as a mitigating factor that embezzlement offense was
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committed to support business rather than for personal enrichment). As noted above,
Glory Transportation was an operational business at the time the Defendant applied for
the fraudulent loan.
C. Need for the Sentence to Afford Adequate Deterrence to Criminal
Conduct
The government believes a that a sentence at the bottom of the Guidelines is
appropriate for both specific and general deterrence. The sentence in this case should
send a clear message to the Defendant and other offenders that there are serious
consequences for defrauding government emergency relief programs. Indeed, as the
pandemic continues to impact small businesses, the PPP loan program remains
ongoing. Actors like the Defendant who seek to defraud these programs make it more
difficult for administrators of government and other relief programs to get aid to
individuals who qualify for and need it. The Defendant’s sentence should serve as a
warning and deterrent to others inclined to exploit pandemic relief programs.
The Defendant’s lack of a criminal record, and the fact that he was only involved
with one loan that was for a legitimate business, indicates that specific deterrence is not
a concern in this case.
D. Need for the Sentence to Avoid Unwarranted Sentencing Disparities
There are two relevant points of comparison to avoid unwarranted sentencing
disparities: sentences associated with others convicted of PPP related fraud, and those
in this case. Around the country, only a few defendants have been sentenced to date for
PPP related frauds, but those courts have imposed meaningful jail sentences. See, e.g.,
United States v. David Hines, 21-CR-20011, S.D.FL. (imposing 78-month sentence on an
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individual who fraudulently applied for multiple PPP loans with a loss of $3.9 million
and also assisted others in submitting fraudulent PPP loans); United States v. Ganell
Tubbs, 20-CR-193, E.D.AR (imposing 41-month sentence on an individual who
fraudulently applied for two PPP loans with a loss of $1.9 million); United States v. Tarik
Jaafar, 20-CR-185, E.D.V.A. (imposing 12-month sentence on an individual who
fraudulently applied for 18 PPP loans with a loss of $1.4 million); United States v. Zhang,
20-CR-169, W.D.W.A. (imposing 60 day sentence on an individual who fraudulently
applied for multiple COVID-19 relief program loans, including four PPP loans with a
loss of over $900,000). The government notes that the Defendant sought only one loan
for $155,000 in this case, which is significantly less than the cases cited.
The government submits that the Defendant was significantly less culpable than
Thomas and Stephen Smith. The Defendant was recruited into the scheme by Thomas
Smith. He did not fill out any of the applications or create false documents like the
Thomas Smith or Stephen Smith. Finally, unlike Thomas and Stephen Smith, the
Defendant was not involved in the creation or direction of the scheme.
In this case, the Court has already sentenced Thomas Smith, the ringleader, to 57
months imprisonment. The Court has also sentenced three other co-schemers in this
case: Samuel Davis was sentenced to 6 months in prison for one count of bank fraud,
Deon Petty was sentenced to a year and a day for conspiracy to commit wire fraud, and
Marvin Fitzgerald was sentenced to a term of probation for lying to law enforcement.
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VI. RESTITUTION & FORFEITURE
The government incorporates its Position on Restitution for Sentencing, filed on
April 13, 2021 at Docket No. 87. For the reasons explained in that submission, the
Defendant should be ordered to pay $155,000 in restitution. 1
The government is not seeking a separate forfeiture judgment against the
Defendant.
* * *
For the reasons stated above, the United States respectfully requests that the
Court impose a term of imprisonment at the bottom of the Guidelines, two years of
supervised release, and order the Defendant to pay $155,000 in restitution. The United
States submits that this sentence is sufficient, but not greater than necessary, to satisfy
the purposes of sentencing.
Respectfully Submitted,
DANIEL KAHN
Acting Chief, Fraud Section
U.S. Department of Justice
s/Laura Connelly_____________________
LAURA CONNELLY
LESLIE S. GARTHWAITE
Trial Attorneys
Fraud Section
U.S. Department of Justice
1400 New York Ave. NW
Washington, DC 20005
Phone: 202-307-1423
laura.connelly@usdoj.gov
1
The PSR noted that on May 25, 2021, the defendant made a payment to the clerk to be applied towards restitution.
(PSR ¶ 35.) The government agrees that the defendant should receive credit for these, and any other amounts paid
for restitution.
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CERTIFICATE OF SERVICE
I hereby certify that on June 15, 2021, I caused the foregoing to be electronically
filed with the Clerk of the Court using the CM/ECF system, which will provide copies
to counsel for all parties.
/s Leslie S. Garthwaite_____________
LAURA CONNELLY
LESLIE S. GARTHWAITE
Trial Attorneys
Fraud Section
U.S. Department of Justice
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