Memorandum Opinion and Order — No. 1:23-cr-01352 (Dkt. 128, D.N.M.)

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Memorandum opinion and order in the District of New Mexico, United States v. Ricardo Landeros, case 1:23-cr-01352, Dkt. 128, on the government's objection to the presentence report. The question was whether Landeros's Paycheck Protection Program fraud is conduct that 18 U.S.C. 1040, the statute on fraud involving major disaster or emergency benefits, describes, which triggers a 2-level sentencing enhancement. The court found it is, rejected the rule of lenity and sustained the objection. It set the offense level at 17 and criminal history category at I, for a guideline range of 24 to 30 months.

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Case 1:23-cr-01352-JB Document 128 Filed 07/21/26 Page 1 of 14

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW MEXICO

UNITED STATES OF AMERICA,

Plaintiff,

vs. No. CR 23-1352 JB

RICARDO LANDEROS,

Defendant.

MEMORANDUM OPINION AND ORDER

THIS MATTER comes before the Court on the United States’ Objection to the

Presentence Investigative Report, filed September 24, 2025 (Doc. 106)(“Objections”). The

primary issue is whether the United States Probation Office’s Presentence Investigation Report,

filed September 3, 2025 (Doc. 97)(“PSR”) should apply a 2-level enhancement pursuant to

U.S.S.G § 2B1.1(b)(12), because Defendant Ricardo Landeros’ offenses of conviction involve

conduct that 18 U.S.C. § 1040 describes -- fraud in connection with the Paycheck Protection

Program (PPP), which authorizes the disbursement and payment of major disaster or emergency

benefits in response to the COVID-19 pandemic. The Court concludes that the 2-level

enhancement pursuant to U.S.S.G § 2B1.1(b)(12) does apply, because Landeros’ offenses of

conviction do involve conduct that 18 U.S.C. § 1040 describes -- fraud in connection with the

Paycheck Protection Program (PPP), which authorizes the disbursement and payment of major

disaster or emergency benefits in response to the COVID-19 pandemic.

FACTUAL BACKGROUND

The United States does not object to the PSR facts. See Objections at 7-8. Those

undisputed facts are the Court’s findings of fact. See Fed. R. Crim. P. 32(i)(3)(A) (“[The court]

may accept any undisputed portion of the presentence report as a finding of fact.”).
Case 1:23-cr-01352-JB Document 128 Filed 07/21/26 Page 2 of 14

In late 2019, the worldwide COVID-19 pandemic began, which causes severe economic

disruption and the largest recession around the globe since the Great Depression. See PSR ¶ 13,

at 4. President Trump shortly declares the pandemic a Presidential Disaster or Emergency

throughout the United States. See PSR ¶ 13, at 4. Congress passes the Coronavirus Aid, Relief,

and Economic Security Act, 15 U.S.C. §§ 9001-9141 (“CARES Act”) -- a multi-trillion dollar

stimulus bill -- in March, 2020, to combat the pandemic’s economic fallout by providing

emergency financial assistance to millions of affected citizens. See PSR ¶ 16, at 5. One of the

sources of relief that the CARES Act provides is the authorization of forgivable loans to small

business for job retention and certain other expenses through a program referred to as the PPP. See

PSR ¶ 17, at 5.

For a small business to obtain a PPP loan, a business’ authorized representative has to

submit an application. See PSR ¶ 18, at 5. The representative has to sign the application in addition

to acknowledging the PPP rules, and has to make certain affirmative certifications for the business

to be eligible. See PSR ¶ 18, at 5. Under the PPP’s terms, the business can only use the money

for certain permissible expenses, including payroll, rent, and utilities. See PSR ¶ 19, at 5.

Another federal program is the Economic Injury Disaster Loan Program (“EIDL

Program”), which provides low-interest financing to small businesses, renters, and homeowners

that various disasters affect. See PSR ¶ 20, at 5. In addition to authorizing the PPP, the CARES

Act extends EIDL Program loans of up to two million dollars to qualifying businesses experiencing

financial hardship, as well as authorizing emergency advances of up to $10,000.00 to businesses

within three days of applying for the EIDL program loans. See PSR ¶ 20, at 5. Just like with the

PPP, for a small business to obtain an EIDL Program loan, the business’ authorized representative

has to submit an application, certifying that everything in the application is correct, as well as

agreeing that the business will use the funds solely as working capital for authorized categories of
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expenses to alleviate the economic injury caused by the pandemic. See PSR ¶ 21, at 6. As a

general rule, if an applicant for an EIDL program also obtains funds through the PPP, the business

cannot use the two amounts of money for the same purpose. See PSR ¶ 21, at 6.

Beginning in approximately March, 2020, Landeros along with co-Defendants Jaqueline

Rascon-Chacon and Bryan Gardea knowingly and intentionally devise and execute a scheme to

defraud participating lenders and the Small Business Administration (“SBA”). 1 PSR ¶ 25, at 7.

The scheme involves submitting loan applications containing materially false information with

fabricated supporting documentation, including misrepresentations regarding the true nature of

their businesses, their number of staff members, and their payroll expenses. See PSR ¶ 25, at 7.

Based on these misrepresentations, lenders and the SBA issue the Defendants multiple loans,

which the Defendants do not use according to the applicable PPP or EIDL program rules and

guidelines, but instead use the money for personal purposes, including paying off personal debts,

gifting themselves luxury goods and services, and purchasing real estate properties to develop and

resell. See PSR ¶ 25, at 7.

Around May 16, 2020, with guidance from Gardea, Landeros submits a loan application

to the SBA containing materially false information and fabricated supporting documentation,

requesting a PPP loan to help A&R Drilling LLC, a corporation that Landeros organizes in early

October, 2019, which lists Landeros as the organizer and registering agent. See PSR ¶¶ 32-33, at

8. The false information includes the business not operating in the way that the application

1
The SBA is an executive-branch agency of the United States government that provides
financial support to entrepreneurs and small businesses. See PSR ¶ 14, at 4. The SBA’s mission
is to maintain and strengthen the United States’ economy by enabling the establishment and
viability of small businesses, as well as assisting in the recovery efforts of communities after
various disasters. See PSR ¶ 14, at 4-5. As part of these recovery efforts, the SBA enables and
provides for loans with government-backed guarantees offered through banks, credit unions, and
other lenders. See PSR ¶ 15, at 5. In some cases, the SBA also acts as a lender itself. See PSR ¶
15, at 5.
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describes and overstating the number of people whom the business employs. See PSR ¶ 33, at 8.

DreamSpring, a financial institution, approves the loan, and disburses $172,802.00 into a bank

account that JAGA Networks owns. See PSR ¶ 33, at 8.

On February 12, 2021, all three Defendants use a bank account held in the name of JAGA

Networks managed by Rascon-Chacon, to negotiate a check in the amount of $209,368.70, derived

from the sale of a property in Albuquerque. See PSR ¶ 39, at 10. Similarly, the Defendants use

the same account to negotiate a check in the amount of around $185,544.00 on March 11, 2021,

derived from the sale of another property in Albuquerque. See PSR ¶ 39, at 10.

Around March 15, 2021, again with guidance from Gardea, Landeros submits a second

loan application containing materially false information and fabricated supporting documentation

to the SBA requesting that the SBA issue a PPP loan to help A&R Drilling. See PSR ¶ 34, at 8.

The false information includes representations of renting workspace at an address that is an address

on a genuine lease agreement for JAGA Networks, where Rascon-Chacon previously operates a

cellphone store. See PSR ¶ 42, at 11. Although Gardea is the one to create the fabricating

supporting documentation, which Landeros neither signs nor initials, Landeros and Gardea

conspire to provide the documentation to the lender during the application process, and Landeros

certifies in the application that everything in the application is true. See PSR ¶ 34, at 8.

DreamSpring approves the loan, and disburses $149,000.00 into a bank account that Landeros

owns. See PSR ¶ 34, at 8. From approximately January, 2020 to May, 2022, the Defendants

knowingly and intentionally conduct financial transactions affecting interstate commerce, and

involving the unlawful activities’ proceeds. See PSR ¶ 36, at 9. The transactions constitute wire

fraud and bank fraud, and are designed, in whole or in part, to conceal and disguise the proceeds

of the Defendants’ unlawful activities. See PSR ¶ 36, at 9.

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PROCEDURAL BACKGROUND

On September 6, 2023, the Grand Jury files an Indictment in the United States District

Court for the District of New Mexico, charging Landeros as follows:

Count 3: Rascon-Chacon, Gardea, and Landeros with Wire Fraud. The
offense occurred from on or about March 2020, and continued to on or about May
2022, in Bernalillo County and elsewhere.
Count 9: Rascon-Chacon, Gardea, and Landeros with Wire Fraud and
Aiding and Abetting. The offense occurred on May 16, 2020, in Bernalillo County
and elsewhere.
Count 10: Rascon-Chacon, Gardea, and Landeros with Wire Fraud and
Aiding and Abetting. The offense occurred on March 15, 2021, in Bernalillo
County and elsewhere.
Count 11: Rascon-Chacon, Gardea, and Landeros with Conspiracy to
Commit Money Laundering. The offense occurred from on or about January 2020
and continued to on or about May 2022, in Bernalillo County and elsewhere.
Count 13: Rascon-Chacon, Gardea, and Landeros with Engaging in
Monetary Transactions in Property Derived from Specified Unlawful Activity and
Aiding and Abetting. The offense occurred on February 12, 2021, in Bernalillo
County and elsewhere.
Count 14: Rascon-Chacon, Gardea, and Landeros with Engaging in
Monetary Transactions in Property Derived from Specified Unlawful Activity in
Aiding and Abetting. The offense occurred on March 22, 2021, in Bernalillo
County and elsewhere.
PSR ¶ 1, at 3. On January 9, 2025, Landeros pleads guilty to Counts 10 and 14 of the fourteen-

count Indictment. See PSR ¶ 2, at 3. Count 10 charges Wire Fraud and Aiding and Abetting, in

violation of 18 U.S.C. §§ 1343 and 2. See PSR ¶ 2, at 3. Count 14 charges Engaging in Monetary

Transactions in Property Derived from Specified Unlawful Activity and Aiding and Abetting, in

violation of 18 U.S.C. §§ 1957(a) and 2. See PSR ¶ 2, at 3.

On September 3, 2025, the United States Parole Office (“USPO”) files the PSR, which

applies a total offense level of 15 for Counts 10 and 14. See PSR ¶ 60, at 13. On September 24,

2025, the United States files the Objections, which make one Objection to the PSR. See Objections

at 1. The United States argues that the Court should enhance the offense level by 2-levels pursuant

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to U.S.S.G. § 2B1.1(b)(12), which applies if the offense involves conduct that 18 U.S.C. § 1040

describes. See Objections at 2. A defendant commits the offense of fraud in connection with major

disaster or emergency benefits, in violation of 18 U.S.C. § 1040(a)(2), when the defendant makes

any materially false, fictitious, or fraudulent statement or representation, or makes or uses any false

writing or document knowing the same to contain any materially false, fictitious, or fraudulent

statement or representation, in any matter involving any benefit authorized, transported,

transmitted, transferred, disbursed, or paid in connection with a major disaster declaration under

section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §

5170, or, pursuant to an emergency declaration under section 501 of the Robert T. Stafford Disaster

Relief and Emergency Assistance Act, 42 U.S.C. § 5191, (collectively “Stafford Act”). Objections

at 2-3. The United States argues that Landeros satisfies U.S.S.G. § 2B1.1(b)(12), because his

offenses of conviction involve conduct that 18 U.S.C. § 1040 describes, namely, fraud in

connection with the PPP, which authorizes the disbursement and payment of major disaster or

emergency benefits in response to the COVID-19 pandemic. See Objections at 1. The United

States maintains that the funds do not need to have a direct relationship with the Stafford Act

emergency declaration which § 1040 references, but instead only needs to relate to the major

disaster or emergency that prompts the Stafford Act declaration -- in this case, the COVID-19

pandemic -- for the enhancement to apply. See Objections at 3-4.

On January 13, 2026, Landeros files his Response in Opposition to Government’s

Objection to Presentence Investigation (Doc. 97), filed January 13, 2026 (Doc. 118)(“Response).

Landeros interprets a violation of § 1040 to occur when a defendant commits fraud in connection

with a major disaster declaration or an emergency declaration under the Stafford Act, and therefore

understands the question before the Court in regards to the § 2B1.1(b)(12) enhancement to be

whether Landeros’ conduct, obtaining fraudulent PPP loans, constitutes a violation of the Stafford
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Act. See Response at 2. Landeros argues that, because his charged conduct involves only PPP

loans, and because there is no evidence to support the contention that the PPP loans are connected

to a Stafford Act declaration, that the 2-level enhancement pursuant to § 2B1.1(b)(12) is not

appropriate and that the Court should not impose the enhancement. See Response at 3.

On January 22, 2026, the United States files its Reply in Support of Objection to

Presentence Investigation Report, filed January 22, 2026 (Doc. 119)(“Reply”). The United States

argues that Landeros asks the Court to engage in an overly narrow reading of § 2B1.1(b)(12) to

require that the enhancement applies only if a defendant’s conduct constitutes a violation of the

Stafford Act. See Reply at 1. The United States contends that the correct interpretation is that the

§ 2B1.1(b)(12) enhancement applies to all benefits fraud that relates to a major disaster or

emergency that receive a Stafford Act declaration, even if the benefits do not flow through the

Stafford Act. See Reply at 1. Looking at § 1040’s structure, context, and history, the United States

concludes that the correct reading of § 1040 is that it describes conduct including fraud in relation

to benefits paid in connection with a disaster or emergency that is the subject of a Stafford Act

declaration. See Reply at 3-7.

The USPO files an Addendum to the Presentence Report on March 27, 2026. See

Addendum to the Presentence Report, at 1, filed March 27, 2026 (Doc. 123). In the Addendum,

the USPO reverses its position from the PSR, and applies the enhancement under U.S.S.G. §

2B1.1(b)(12) for fraud in connection with PPP loans during the COVID-19 pandemic. See

Addendum at 2. The USPO states that, “upon further review, the District Court in the Griffin case

[United States v. Griffin, 2024 WL 1505512] presented a compelling argument. While the PPP

loans were technically authorized separately from direct pandemic relief, the benefits were

intended to assist individuals and businesses impacted by the pandemic.” Addendum at 2.

Accordingly, the USPO concludes “that a conviction under 18 U.S.C. § 1040 is not required for
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the enhancement to apply. Instead, the increase is applicable as long as the conduct violated the

statute.” Addendum at 2. The USPO, therefore, applies the enhancement under U.S.S.G. §

2B1.1(b)(12).

ANALYSIS

The Court sustains the United States’ Objection. The Court sustains the United States’

Objection to add a 2-level enhancement pursuant to U.S.S.G. § 2B1.1(b)(12). The Court concludes

that 18 U.S.C. § 1040 is broad enough to encompass fraud regarding funds that stem from an

emergency which is the subject of a Stafford Act Declaration, and does not cover only fraud

regarding funds that come directly from a Stafford Act Declaration.

I. THE COURT SUSTAINS THE UNITED STATES’ OBJECTION TO ADD A 2-
LEVEL EHANCEMENT PURSUANT TO U.S.S.G § 2B1.1(b)(12).
Section 2B1.1(b)(12) applies a 2-level enhancement if the offense involves conduct that 18

U.S.C. § 1040 describes. U.S.S.G. § 2B1.1(b)(12). 18 U.S.C. § 1040 states in relevant part:

(a) Whoever, in a circumstance described in subsection (b) of this section,
knowingly--

(1) falsifies, conceals, or covers up by any trick, scheme, or
device any material fact; or
(2) makes any materially false, fictitious, or fraudulent
statement or representation, or makes or uses any false
writing or document knowing the same to contain any
materially false, fictitious, or fraudulent statement or
representation,

in any matter involving any benefit authorized, transported, transmitted,
transferred, disbursed, or paid in connection with a major disaster declaration under
section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5170) or an emergency declaration under section 501 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5191) . . . .

18 U.S.C. § 1040. The United States argues that § 1040 is written broadly so as to encompass

benefits fraud related to a major disaster or emergency that receives a Stafford Act declaration,

even if the benefits do not flow directly through the Stafford Act. See Reply at 1. Congress does

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not create PPP loans, which Landeros obtains fraudulently, under the Stafford Act. See Reply at

2. Instead, Congress creates the PPP program when it passes the CARES Act, which Congress

enacts in response to the COVID-19 outbreak and because of COVID’s impact on the economy,

public health, State and local governments, individuals, and businesses. See Reply at 2. According

to the United States’ reading of § 1040, the PPP program’s connection to the COVID-19 pandemic,

a declared Stafford Act emergency, is sufficient to qualify Landeros’ conduct as conduct that §

1040 describes such that the enhancement pursuant to § 2B1.1(b)(12) applies. By contrast,

Landeros argues that § 1040 describes only conduct of fraud committed directly in connection with

the Stafford Act, such that Landeros’ conduct of fraudulent PPP loans does not justify the

application of the § 2B1.1(b)(12) enhancement. See Response at 2.

The Court begins by looking at the statute’s text. See Been v. O.K. Industries, Inc., 495

F.3d 1217, 1227 (10th Cir. 2007)(“We review issues of statutory construction de novo,

‘interpret[ing] the words of the statute in light of the purposes Congress sought to serve.’”)(quoting

Wright v. Fed. Bureau of Prisons, 451 F.3d 1231, 1233-34 (10th Cir.2006)). Section 1040 regulates

fraud “involving any benefit” “authorized . . . [or] paid . . . in connection with a major disaster

declaration” or emergency declaration under the Stafford Act. 18 U.S.C. § 1040. The phrase “in

connection with a . . . declaration,” specifically the inclusion of the word declaration, could restrain

§ 1040’s scope to fraudulent conduct relating to benefits paid in direct connection with a Stafford

Act declaration, instead of benefits paid in connection with the emergency or disaster that cause a

Stafford Act declaration. The Court notes, however, that the phrase “in connection with” can bear

a “broad interpretation,” Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71, 85

(2006), and, the Supreme Court recognizes that “‘in connection with’ is essentially indeterminate

because connections, like relations, stop nowhere.” Maracich v. Spears, 570 U.S. 48, 59

(2013)(quoting New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins.
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Co., 514 U.S. 645, 655 (1995))(internal quotation marks omitted). The Court, therefore, does not

foreclose the possibility that benefits that the United States does not pay directly as a result of a

Stafford Act declaration still may constitute benefits paid “in connection with” a Stafford Act

declaration.

Further, the Court concludes that looking at § 1040 as a whole leads to the conclusion that

“in connection with a major disaster declaration” extends to benefits paid as a result of the

emergency that causes the Stafford Act declaration and not only benefits paid directly under the

Stafford Act declaration. 18 U.S.C. § 1040. Section 1040(b) is the jurisdictional provision which

determines when § 1040 applies. Section 1040(b) provides three jurisdictional hooks, extending

the statute to cover benefits which (i) are provided “in or affect[ing] interstate or foreign

commerce,” (ii) are provided through the mail, or (iii) come from the federal government. 18 U.S.C.

§ 1040(b). These jurisdictional hooks, taken together, suggest that Congress intends for § 1040 to

reach all benefits that are provided in connection with a Stafford Act emergency or major disaster,

because benefits that are paid specifically pursuant to or as a result of a Stafford Act declaration

nearly always come from the United States. See Barbosa v. United States Dep't of Homeland Sec.,

916 F.3d 1068, 1069 (D.C. Cir. 2019)(explaining that the Stafford Act program’s traditional

approach is to “disburse federal funds to the states, which in turn disburse those funds to

individuals”); Church v. Polis, No. 20-1391, 2022 WL 200661, at * 9 (10th Cir. Jan. 24,

2022)(stating that the Stafford Act “authorizes the president to provide disaster relief in certain

emergency situations”). 2 If the Court limits § 1040 to direct Stafford Act declaration funds, in

2
Church v. Polis is an unpublished opinion, but the Court can rely on an unpublished
opinion to the extent its reasoned analysis is persuasive in the case before it. See 10th Cir. R.
32.1(A)(“Unpublished decisions are not precedential, but may be cited for their persuasive
value.”). The Tenth Circuit states:

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essence federal funds, then there is no need to provide a federal nexus for the funds such as

“affect[ing] interstate or foreign commerce,” or payments sent through the mail. See Circuit City

Stores, Inc. v. Adams, 532 U.S. 105, 115 (2001)(“The phrase ‘affecting commerce’ indicates

Congress’ intent to regulate to the outer limits of its authority under the Commerce Clause.”). Even

more persuasively, the fact that the statute states explicitly that benefits which come from the

“United States, or of any department or agency thereof” are included within the scope of § 1040

leads to the conclusion that the statute contemplates benefits which originate from somewhere other

than the United States. Finally, § 1040(c) defines “benefit” to mean any payment “provided by the

United States, a State or local government, or other entity.” 18 U.S.C. § 1040(c). Funds that

originate from Stafford Act declarations are almost entirely federal, and so the inclusion of funds

from non-federal entities in the statute’s definitional section indicates an intent to expand the scope

of § 1040 beyond the narrow cabin of fraud involving funds directly from Stafford Act declarations

to fraud involving funds that relate to the emergency which is the subject of the Stafford Act

declaration.

The Court acknowledges that the statute’s language is ambiguous. There is ambiguity,

because the Stafford Act works by providing federal funds to State and local non-governments, as

well as to certain nonprofit organizations and individuals, and therefore there is an argument that §

1040 as written is meant to capture fraud relating to all funds provided under the Stafford Act

In this circuit, unpublished orders are not binding precedent, . . . and we have
generally determined that citation to unpublished opinions is not favored.
However, if an unpublished opinion or order and judgment has persuasive value
with respect to a material issue in a case and would assist the court in its disposition,
we allow a citation to that decision.

United States v. Austin, 426 F.3d 1266, 1274 (10th Cir. 2005). The Court concludes that Church
v. Polis has persuasive value with respect to a material issue, and will assist the Court in its
disposition of this Memorandum Opinion and Order.

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declaration, whether the defendant fraudulently obtains these funds directly from the United States

government or after the United States disperses these funds to the States, local government, or

private entities. See ELIZABETH WEBSTER ET AL., CONG. RSCH. SERV., R46326, STAFFORD ACT

DECLARATIONS FOR COVID-19 FAQ 7 (2020)(“Federal assistance made available pursuant to

Stafford Act declarations is intended to supplement local efforts to respond to and recover from

emergencies and major disasters. Federal assistance may support state, territorial, tribal, and local

governments, certain nonprofit organizations, and individuals and households.”). Looking at the

legislative history, however, the Court concludes that it supports the determination that § 1040 is

not narrow, but instead encompasses the fraud of all benefits that relate to an emergency which is

the subject of a Stafford Act declaration. See McGraw v. Barnhart, 450 F.3d 493, 499 (10th Cir.

2006)(‘“If [a statutory] ambiguity is found, a court may seek guidance from Congress’s intent, a

task aided by reviewing the legislative history.’”)(quoting United States v. Quarrell, 310 F.3d 664,

669 (10th Cir. 2002)).

Congress enacts § 1040 in the Emergency Disaster Assistance Fraud Penalty Enhancement

Act, Pub. L. No. 110-179, 121 Stat. 2556 (2008), to create “a new criminal penalty specifically

targeted at fraud in connection with major disaster or emergency benefits.” H.R. REP. NO. 109-473,

at 2 (2006). See S. REP. NO. 110-69, at 4 (2007)(stating that the law “[i]n addition to creating a

new federal crime that specifically prohibits fraud in connection with any emergency or disaster

benefit (including federal assistance or private charitable contributions) . . .”). The language in

connection with “any emergency or disaster benefit (including federal assistance or private

charitable contributions)” demonstrates Congress’ intention for § 1040 to cover broadly fraud in

connection to any benefit which stems from an emergency or disaster that is the subject of a Stafford

Act declaration, instead of cabining it narrowly to benefits that flow through the Stafford Act. S.

REP. NO. 110-69, at 4. That Congress enacts § 1040 in response to the extensive fraud which follows
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Hurricanes Katrina and Rita supports the Court’s conclusion, and the Committee reports highlight

instances of fraud involving benefits with no direct connection to Stafford Act declarations. See S.

REP. NO. 110-69, at 2-3 (noting creation of “phony Katrina-related websites to exploit those who

wished to contribute to legitimate disaster assistance efforts” and a volunteer who stole Red Cross

funds intended for Katrina victims); H. REP. NO. 109-473, at 2 (same). The Court determines that

the context in which Congress enacts § 1040, along with § 1040’s express purpose, supports the

conclusion that Congress intends § 1040 to apply broadly to all fraud in connection with emergency

or disaster benefits when that emergency or disaster is the subject of a Stafford Act declaration, and

not solely to emergency or disaster benefits which stem from a Stafford Act declaration.

In so concluding, the Court does not apply the rule of lenity to interpret the facially

ambiguous statute in Landeros’ favor. “‘The rule of lenity requires courts to interpret ambiguous

statutes, including the Sentencing Guidelines, in favor of criminal defendants.’” United States v.

Tony, 121 F.4th 56, 69 (10th Cir. 2024)(quoting United States v. Gay, 240 F.3d 1222, 1232 (10th

Cir. 2001)). The rule of lenity, however, applies only “‘where a statute is facially ambiguous and

resort to the legislative history does not reveal the congressional intent of the language.’” United

States v. Serawop, 505 F.3d at 1121 (quoting United States v. Wilson, 10 F.3d 734, 736 (10th Cir.

1993)). “The rule of lenity presupposes the application of a punitive, ambiguous statute, and we

apply it ‘only if, after seizing everything from which aid can be derived, . . . we can make no more

than a guess as to what Congress intended.’” United States v. Serawop, 505 F.3d at 1121-22

(quoting Muscarello v. United States, 524 U.S. 125, 138 (1998)). Here, the legislative history shines

a light on what Congress intends when it enacts § 1040, and the Court determines that this intention

is to apply § 1040 broadly to fraud relating to any emergency or disaster funds when that emergency

is the subject of a Stafford Act declaration. Accordingly, the rule of lenity does not apply, and the

Court determines that § 1040 encompasses Landeros’ conduct in committing fraud in relation to
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PPP loans under the CARES Act. The Court therefore sustains the United States’ Objection and

applies the 2-level enhancement pursuant to U.S.S.G. § 2B1.1(b)(12).

IT IS ORDERED that: (i) the United States’ Objection to the Presentence Investigative

Report, filed September 24, 2025 (Doc. 106) is sustained; (ii) the 2-level U.S.S.G. § 2B1.1(b)(12)

enhancement applies; (iii) the applicable offense level is 17; (iv) the applicable criminal history

category is I; (v) the United States Sentencing Guidelines establish an imprisonment range of 24

to 30 months.

________________________________
UNITED STATES DISTRICT JUDGE

Counsel:

Todd Blanche
Acting United States Attorney General
Ryan Ellison
First Assistant United States Attorney
Holland Kastrin
Sean Sullivan
Assistant United States Attorneys
United States Attorney’s Office
Albuquerque, New Mexico

Attorneys for the Plaintiff

Nicole Moss
The Law Office of Nicole Moss LLC
Albuquerque, New Mexico

Attorney for the Defendant

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