Letter to Judge McMahon Re: United States v. Moshe Rosenfeld, 23 Cr. 65 (CM) (Dkt. 90, S.D.N.Y.)
Summary
In this July 11, 2024 letter to Judge Colleen McMahon (S.D.N.Y., 23 Cr. 65), the government asks for a sentence within the stipulated Guidelines range of 21 to 27 months for Moshe Rosenfeld, sentencing set for July 18, 2024. The government says Rosenfeld and co-conspirator Zvi Zigelman submitted at least six fraudulent loan applications for fictitious businesses in 2020, seeking more than $1.4 million: two EIDL loans that paid out $310,000, a PPP application for $708,930 and three EIDL applications for $150,000 each that were not approved. Rosenfeld pleaded guilty on February 20, 2024 to conspiracy to commit bank fraud. The Probation Office recommends 14 months and the defense seeks 366 days; Zigelman was sentenced to 18 months on February 22, 2024. The government also asks for forfeiture and restitution of $310,000.
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Case 1:23-cr-00065-CM Document 90 Filed 07/11/24 Page 1 of 6
U.S. Department of Justice
United States Attorney
Southern District of New York
The Silvio J. Mollo Building
One Saint Andrew’s Plaza
New York, New York 10007
July 11, 2024
BY ECF and EMAIL
The Honorable Colleen McMahon
United States District Judge
Southern District of New York
500 Pearl St.
New York, New York 10007
Re: United States v. Moshe Rosenfeld, 23 Cr. 65 (CM)
Dear Judge McMahon:
The Government respectfully submits this letter in connection with the sentencing of
defendant Moshe Rosenfeld (“Rosenfeld,” or the “defendant”), scheduled for Thursday, July 18,
2024, at 11:00 a.m. Moshe Rosenfeld submitted multiple fraudulent Paycheck Protection Program
(“PPP”) and Economic Injury Disaster Loan Program (“EIDL”) loan applications containing false
information about companies that had no real business or employees, seeking to fraudulently
obtain more than $1.4 million in loan proceeds and resulting in losses to the U.S. Small Business
Administration (“SBA”) of more than $300,000. The parties stipulated to a Guidelines sentencing
range of 21 to 27 months’ imprisonment (the “Stipulated Guidelines Range”), based on an offense
level of 16 and a Criminal History Category of I. The Probation Office calculates an identical
Guidelines range in the Presentence Investigation Report, and recommends a below-Guidelines
sentence of 14 months’ imprisonment. The defendant is seeking a further variance to a below-
Guidelines sentence of 366 days’ imprisonment. The Government believes that a sentence within
the Stipulated Guidelines Range would be sufficient but not greater than necessary in consideration
of the seriousness of the offense and the need for just punishment and adequate deterrence.
Offense Conduct
Between May and September 2020, Rosenfeld participated in a conspiracy to fraudulently
apply for PPP and EIDL loans that were being made available to qualifying small businesses for
job retention and other business expenses during the COVID pandemic. (PSR ¶¶ 9-17). At least
six fraudulent loan applications were submitted in the defendant’s name, for his purported
businesses: (1) two EIDL loans that were approved and resulted in disbursements totaling
$310,000 (PSR ¶ 27); (2) one PPP loan application for $708,930, which was not approved (PSR
¶¶ 22-25, 27), and (3) three EIDL loans, for $150,000 each, which were not approved (PSR ¶ 27).
The disbursed EIDL funds were sent to bank accounts controlled by Rosenfeld. (PSR ¶ 39).
In the loan applications, Rosenfeld and his co-conspirator, Zvi Zigelman, falsely
represented that the above-referenced businesses had dozens of employees, and that the funds
Case 1:23-cr-00065-CM Document 90 Filed 07/11/24 Page 2 of 6
would be used for payroll or other legitimate business expenses. (PSR ¶ 16). In fact, these
businesses were all fictitious, with no employees and no legitimate business. In addition, to
support the false claims made in the USA DIP PPP application, Rosenfeld and Zigelman submitted
fraudulent, undated IRS forms which stated that the companies had paid their employees salaries
during fiscal year 2019. (PSR ¶ 19). The EIDL applications also included fake EINs for
Rosenfeld’s purported businesses. (PSR ¶ 37).
Procedural History
The defendant was arrested on October 23, 2022, and released on a $250,000 bond. On
February 20, 2024, the defendant pled guilty before Your Honor to Count One of the Indictment,
which charged him with participating in conspiracy to commit bank fraud, in violation of 18 U.S.C.
§§ 1344 and 1349. Pursuant to the parties’ plea agreement, based on an offense level of 16 –
reflecting a 14-level enhancement because the intended loss exceeded $550,000 but was less than
$1,500,000, and a two-level downward adjustment pursuant to U.S.S.G. § 4C1.1 because the
defendant has zero criminal history points and otherwise meets the requirements of § 4C1.1 – and
a criminal history category of I, the Stipulated Guidelines Range is 21 to 27 months’ imprisonment.
The Probation Office’s guidelines calculation is in accord with the plea agreement.
The Probation Office recommends a variance sentence of 14 months’ imprisonment and
two years’ supervised release. (PSR 28). In support of its recommendation, the Probation Office
noted Rosenfeld’s lack of other criminal history, his compliance with the conditions of his pretrial
supervision, and the nonviolent nature of the offense, but stated that Rosenfeld’s offense cannot
be “attributed to a single lapse in judgment” as he “filed multiple fraudulent loan applications for
millions of dollars in government funds to which he had zero legitimate claim” over the course of
multiple months. (PSR at 28). The Probation Office further explained that “general deterrence is
also paramount” because of the susceptibility of emergency government relief programs to fraud.
Status of Moshe Rosenfeld’s Co-Defendants
In February 2023, Zvi Zigelman pled guilty to conspiracy to commit bank fraud, pursuant
to 18 U.S.C. § 371. His Guidelines range was 18 to 24 months’ imprisonment, based on an offense
level of 15 and a Criminal History Category of I. On February 22, 2024, this Court sentenced
Zigelman to 18 months’ imprisonment. As reflected in the Presentence Investigation Report, the
Government believes that Rosenfeld is similarly situated to Zigelman in terms of culpability. (PSR
¶ 38). In particular, Rosenfeld and Zigelman were responsible for relatively similar intended
losses, and neither defendant had any prior criminal history.
One difference between Rosenfeld and Zigelman is that Zigelman accepted responsibility
shortly after being arrested pursuant to a complaint and pled guilty without requiring the
Government to present the case to a grand jury, produce discovery, or otherwise invest further
resources in the matter. In acknowledgment of his early acceptance of responsibility, the
Government agreed that Zigelman could plead guilty to bank fraud conspiracy pursuant to 18
U.S.C. § 371, which has a five-year statutory maximum sentence and thus resulted in a Guidelines
range that was one offense level lower than if Zigelman had pled guilty to bank fraud conspiracy
pursuant to 18 U.S.C. § 1349. Zigelman and Rosenfeld’s Guidelines calculations are otherwise
identical.
2
Case 1:23-cr-00065-CM Document 90 Filed 07/11/24 Page 3 of 6
Objections to the Presentence Investigation Report
Rosenfeld raises a number of objections to the Presentence Investigation Report based on
his contentions that the fraudulent loan applications were all submitted by Zigelman, and that
Zigelman submitted loans “under Rosenfeld’s name that Rosenfeld was not aware of.” (Dkt. 89
at 2-3). While Rosenfeld does not appear to dispute that he knowingly participated in the bank
fraud conspiracy, that he was aware of the two approved fraudulent loans, and that, at a minimum,
the other fraudulent loans submitted in his name were reasonably foreseeable to him, he Rosenfeld
appears to argue that he was only specifically aware of the two EIDL loans submitted in his name
that resulted in the disbursement of approximately $310,000 in funds. (See Dkt. 89 at 2). The
evidence, however, shows that Rosenfeld was aware of and involved in additional fraudulent loan
applications, consistent with the Guidelines range stipulated to in the parties’ plea agreement.
First, Rosenfeld acknowledges that he provided “a copy of [his] license and basic
information about . . . business entitit[ies] in order to secure [the] loan[s].” Id. at 3. This on its
own suggests that Rosenfeld was well aware of even the rejected fraudulent loan applications that
were submitted in his name. The rejected applications were generally made in the names of
different entities than the approved loan applications (PSR ¶ 27), and it is undisputed that none of
those businesses had any real employees or ongoing operations (PSR ¶ 16). It defies belief that
Rosenfeld thought he was engaged in legitimate activity when he provided information about
defunct businesses to be used in loan applications for emergency COVID-relief funds.
Second, the evidence further shows that contact information for Rosenfeld, including his
address, phone number, and/or email addresses that he used, was included in each of the Rosenfeld
loan applications. Rosenfeld’s cellphone number – the number assigned to the cellphone that was
seized from him at the time of his arrest – was listed in three of the rejected EIDL loan applications
and the approved EIDL loan application for Rose 123 Consulting. That cellphone number was
subscribed to Isreal Gifts Store Inc., one of Rosenfeld’s entities, at an address in Brooklyn that
was listed all of the fraudulent loan applications Rosenfeld submitted. Moreover, chat messages
recovered from Rosenfeld’s cellphone showed that, on May 21, 2020, shortly before the first of
the relevant fraudulent loan applications was submitted, Rosenfeld provided Zigelman with an
email address that was then listed in the EIDL application for Rose 123 Consulting (which was
approved), and the PPP application for Rose 123 Consulting (which was rejected). Finally, emails
records from Rosenfeld’s cellphone further show that, in July and August 2020, Rosenfeld
received multiple emails from the SBA regarding the approved EIDL loan for MRH26 LLC. In
sum, the evidence shows that Rosenfeld was not merely the name on these fraudulent loan
applications: he was the point of contact for them, and would have received communications or
correspondence sent out regarding the applications, including the four rejected fraudulent loan
applications.
Rosenfeld also makes the self-serving assertion that the loan applications were all
submitted by Zigelman, not him. In doing so, he appears to rely on the fact that the applications
were all submitted from the same IP address, which he suggests was associated with Zigelman’s
home. (See Dkt. 89 at 3). While the Government agrees that the loan applications were all
submitted from the same IP address, that IP address is subscribed to a company located at an
address in Borough Park, Brooklyn that is, to the Government’s knowledge, neither Rosenfeld’s
nor Zigelman’s address.
3
Case 1:23-cr-00065-CM Document 90 Filed 07/11/24 Page 4 of 6
For all of the foregoing reasons, the Government believes that the evidence shows that
Rosenfeld was aware of and involved in all of the fraudulent loan applications that were being
submitted in his name, that the Presentence Investigation Report is accurate in its current form,
and the Rosenfeld’s objections to the factual recitations in the offense conduct should be rejected.
Discussion
I. Applicable Law
As the Court is well aware, the Guidelines are no longer mandatory, but they still provide
important guidance to the Court following United States v. Booker, 543 U.S. 220 (2005), and
United States v. Crosby, 397 F.3d 103 (2d Cir. 2005). “[A] district court should begin all
sentencing proceedings by correctly calculating the applicable Guidelines range,” which “should
be the starting point and the initial benchmark.” Gall v. United States, 552 U.S. 38, 49 (2007).
The Guidelines range is thus “the lodestar” that “‘anchor[s]’” the district court’s discretion.
Molina-Martinez v. United States, 136 S. Ct. 1338, 1345-46 (2016) (quoting Peugh v. United
States, 133 S. Ct. 2072, 2087 (2013)).
After making the initial Guidelines calculation, a sentencing judge must consider the
factors outlined in Title 18, United States Code, Section 3553(a), and “impose a sentence
sufficient, but not greater than necessary, to comply with the purposes” of sentencing outlined in
18 U.S.C. § 3553(a)(2). To the extent a district court imposes a sentence outside the range
recommended by the Guidelines, it must “‘consider the extent of the deviation and ensure that the
justification is sufficiently compelling to support the degree of the variance.’” United States v.
Cavera, 550 F.3d 180, 189 (2d Cir. 2008) (en banc) (quoting Gall, 552 U.S. at 50).
II. A Guidelines Sentence is Warranted
The Government respectfully submits that a sentence within the Stipulated Guidelines
Range would be sufficient but not greater than necessary in this case. A sentence within that range
would appropriately reflect the nature and circumstances of the offense, promote respect for the
law, and provide for adequate general and specific deterrence.
As an initial matter, a meaningful sentence of imprisonment is warranted to reflect the
serious nature of the offense. The defendant attempted to obtain more than $1.46 million in
government funds to which he had no legitimate claim. This offense was particularly serious
because, as the Probation Office points out, emergency government relief programs are
particularly susceptible to fraud due the nature of the programs – specifically, the more limited
due diligence conducted so that the funds can be disbursed on an expedited basis. And the funds
were earmarked for a particularly important purpose, sustaining legitimate small business during
the dire economic effects that were caused by the COVID-19 pandemic. The defendant’s conduct,
moreover, was no one-off mistake or aberration. He submitted at least six fraudulent applications
that included falsified documents and false claims, in the names of at least five different sham
businesses, over a period of approximately three months between June 2020 and September 2020.
A sentence within the Adjusted Guidelines Range is also warranted to promote respect for
the law and to provide for adequate general deterrence. Although Rosenfeld has no prior criminal
4
Case 1:23-cr-00065-CM Document 90 Filed 07/11/24 Page 5 of 6
history, as noted above, he was involved in the instant offense conduct for a period of several
months. A meaningful sentence of imprisonment is thus necessary to ensure that that the defendant
comprehends the seriousness of his actions. More importantly, a meaningful sentence of
imprisonment is necessary to send a message to others that there will be serious consequences for
defrauding emergency government relief programs like PPP and EIDL. This is particularly given
that there will inevitably be need for future similar relief programs in times of future emergency.
The need for adequate general deterrence thus weighs strongly in favor of a sentence within the
Adjusted Guidelines Range.
Rosenfeld has requested a below-Guidelines sentence of 366 days. The Government
believes that this would be inadequate, and that Rosenfeld’s arguments in support of that sentence
suggest that while he has admitted to the core conduct involved in the offense he continues to
minimize aspects of his involvement. In particular, Rosenfeld argues that he played a “relatively
small role in the scheme,” and that the plea agreement “does not accurately reflect [his] conduct”
because Zigelman submitted loans “under Rosenfeld’s name that Rosenfeld was not aware of.” 1
For the reasons discussed above with respect to Rosenfeld’s objections to the Presentence
Investigation Report, the Government believes this is inaccurate and erroneously minimizes
Rosenfeld’s role, awareness of, and participation in the scheme.
In support of his request for a downward variance, Rosenfeld also points to his lack of
criminal history, and health issues. The Government does not dispute
that these are mitigating factors that the Court can and should consider in imposing an appropriate
sentence, The cannot, however, excuse the defendant’s conduct. They are insufficient to justify a
below-Guidelines sentence in light of the number of fraudulent applications Rosenfeld submitted,
his disregard for the impact his actions would have on a critical Government program, the
significant loss he attempted to cause, and his continued refusal to fully accept responsibility for
his conduct.
1
Rosenfeld also states that he “has taken responsibility for his actions” “[s]tarting at the time of
his arrest at JFK airport nearly two years ago.” (Dkt. 89 at 1). That is inaccurate. Rosenfeld did
not accept responsibility in any meaningful way until he entered his guilty plea in February 2024,
approximately sixteen months after he was arrested. He certainly did not admit that he had been
involved in submitting fraudulent loan applications, or accept responsibility for that conduct,
during his lengthy post-arrest interview at JFK airport.
5
Case 1:23-cr-00065-CM Document 90 Filed 07/11/24 Page 6 of 6
Conclusion
For the foregoing reasons, the Court should impose a sentence within the Adjusted
Guidelines Range of 21 to 27 months’ imprisonment, along with forfeiture and restitution in the
amount of $310,000. 2
Respectfully submitted,
DAMIAN WILLIAMS
United States Attorney
By: /s/
Emily Deininger
Assistant United States Attorney
(212) 637-2472
Cc: Defense counsel (by ECF and email)
2
The Government anticipates submitting proposed orders for forfeiture and restitution in advance
of the sentencing proceedings.
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