Memorandum Supplement to Sentencing Memorandum — USA v. Padilla-Reyna (Dkt. 44, E.D. Wash.)
Summary
A supplement to the defendant's sentencing memorandum, filed May 15, 2023 as ECF No. 44 in United States v. Karla L. Padilla-Reyna, Case No. 22-cr-2059-MKD-1, in the U.S. District Court for the Eastern District of Washington, by Robin C. Emmans and Ulvar W. Klein of 2nd Street Law PLLC. It corrects account balances reported in the presentence interview and states counsel keeps $300,000 in a dedicated trust account, half of which, $150,000, will be paid to the court at sentencing while, with the court's approval, the other half will be held by counsel pending the sale of a Yakima property subject to civil forfeiture. The supplement surveys other COVID-19 fraud cases in the Eastern District of Washington, several resolved with probation or a deferred prosecution, to argue that probation would be proportional.
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Cite this document
“Memorandum Supplement to Sentencing Memorandum — USA v. Padilla-Reyna (Dkt. 44, E.D. Wash.).”
Original at ecf.waed.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/memorandum-supplement-to-sentencing-memorandum-usa-v-padilla-reyna-dkt-4a295ff51b/
, SHA-256 ca8e5cc916a59c354ac9ab26a8d9ef05aab25c040f6024df2356ef86294903dd.Full text
Case 1:22-cr-02059-MKD ECF No. 44 filed 05/15/23 PageID.214 Page 1 of 7
1
2 Robin C. Emmans
3
2nd Street Law PLLC
217 N. 2nd Street
4 Yakima, WA 98901
5 (509) 575-0372 office
(509) 452-6771 fax
6 Of Attorneys for Defendant
7 Karla Padilla-Reyna
8
UNITED STATES DISTRICT COURT
9 EASTERN DISTRICT OF WASHINGTON
10
11 UNITED STATES OF AMERICA )
12
) Case No. 22-cr-2059-MKD-1
Plaintiff, )
13
)
vs. ) SUPPLEMENT TO
14 KARLA L. PADILLA-REYNA,
) SENTENCING MEMORANDUM
)
15
)
)
16 Defendant. )
)
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18
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COMES NOW the defendant, Karla L. Padilla-Reyna, through her attorneys,
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21 Robin C. Emmans and Ulvar W. Klein, of 2 Street Law PLLC, and submits this
nd
22 supplement to her sentencing memorandum. This memorandum will provide updated
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financial information, proof of restitution funding availability, and a survey of similar
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25 cases sentenced within the Eastern District of Washington.
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217 N. 2nd Street
Yakima, WA 98901
(509) 575-0372
fax (509) 452-6771
Case 1:22-cr-02059-MKD ECF No. 44 filed 05/15/23 PageID.215 Page 2 of 7
1 1. Updated financial information.
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In the PSIR interview, working from memory, Ms. Padilla estimated some
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4 financial assets incorrectly, though the net effect is the same. A table of corrected
5 account balances follows:
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Solarity Checking $20,302
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8 Solarity Savings $1,100
9 Solarity Safety Deposit Box Closed
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Solarity Line of Credit (Debt) $213,00
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12 Hapo Checking $9,982
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Hapo Savings $1,620
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Fidelity IRA $53,952
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16 Vanguard IRA $14,500
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The PSIR interview was conducted February 2nd. Meeting with counsel today, Ms.
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20 Padilla was able to log into her various accounts and provide updated data, with
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retirement account balance estimates based on the most recent statements. In the
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PSIR interview, Ms. Padilla incorrectly asserted that she had $120,000 in retirement
24 accounts. See p. 15 and p. 19, paragraph 95. There are two accounts, Fidelity and
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Vanguard, and their balances are similar to the balances she had reported in
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217 N. 2nd Street
Yakima, WA 98901
(509) 575-0372
fax (509) 452-6771
Case 1:22-cr-02059-MKD ECF No. 44 filed 05/15/23 PageID.216 Page 3 of 7
1 November of 2022. There is not a separate account worth $120,000. A small portion
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of retirement was liquidated to put toward restitution. The cash held in a safety
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4 deposit box was removed to put toward restitution. Property on Q street in Yakima,
5 subject of civil forfeiture, is estimated at closer to $150,000 (see PSIR paragraph 98),
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and sale negotiations are under way with a specific buyer.
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8 2. Proof of restitution availability.
9 Counsel is currently holding $300,000 in a dedicated trust account. See
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attached statement. Half of that amount, $150,000, will be paid to the court
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12 immediately on sentencing. With the court’s approval, half of that amount will be
13 held by counsel pending the sale of the Q street property. Pursuant to the Plea
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Agreement Addendum, once that property is sold, Ms. Padilla will forfeit the
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16 proceeds to the United States, which will then request that restitution be adjusted to
17 reflect that amount as paid toward the total stipulated restitution. Any remaining
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balance will be paid by counsel from the amount held in trust.
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20 3. Similar cases in the Eastern District of Washington.
21 As referenced in the sentencing memorandum, the type of sentence requested
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by the defense, of probation rather than incarceration, fits the facts of this case and is
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24 also proportional to other similar cases in this district. The government announced its
25 “strike force” dedicated to COVID-19 fraud on March 17, 2022. Since then, through
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217 N. 2nd Street
Yakima, WA 98901
(509) 575-0372
fax (509) 452-6771
Case 1:22-cr-02059-MKD ECF No. 44 filed 05/15/23 PageID.217 Page 4 of 7
1 similar press releases, defense counsel has been able to identify nine targets other
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than Ms. Padilla, six of whom have been sentenced or otherwise resolved their cases.
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4 The largest fraud, of nearly 3 million dollars, was settled with a deferred
5 prosecution in which the entity promised restitution and the individual owners
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pledged a hefty amount out of their own resources. Little information is available
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8 regarding the extent or duration of the fraud. See March 22, 2022 press release,
9 https://www.justice.gov/usao-edwa/pr/hpm-corporation-and-owners-accept-
10
responsibility-agree-pay-nearly-3-million-restituti-0, attached.
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12 In US v. Thomas, 22-cr-35-RMP, the defendant, who had significant criminal
13 history, was also terminally ill. According to court records, his range was 10-16
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months. He was sentenced on 8/17/2022 to probation with restitution of $54,900. He
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16 had made three applications over two years.
17 In US v. Jackson, 22-cr-89-TOR, the defendant was sentenced on 1/5/2023 to
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probation, with restitution of $54,900, and an order granting relief from interest on
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20 restitution. According to court records, he had made 2 loan applications, both of
21 which were disbursed. He had no criminal history. He was compliant with pretrial
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release conditions. His sentencing range was 6-12 months. Both parties recommended
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24 probation.
25 In US v. Murphy, 22-cr-84-TOR, married defendants were sentenced
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individually on 4/26/23 to probation and restitution. According to court documents,
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217 N. 2nd Street
Yakima, WA 98901
(509) 575-0372
fax (509) 452-6771
Case 1:22-cr-02059-MKD ECF No. 44 filed 05/15/23 PageID.218 Page 5 of 7
1 they had made 3 loan applications over time, all of which were disbursed, resulting in
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$62,499 being paid out. The husband had prior criminal history related to drug
3
4 addiction. The wife also had a history of drug addiction. Both did well on pretrial
5 release. Their range is not clear from the court record, nor is the government’s
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recommendation.
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8 In US v. Opsal, 22-cr-53-TOR, the defendant was sentenced on 5/10/23 to 6
9 months’ incarceration and restitution of $61,247 after failing to comply with
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conditions of pretrial release in the context of drug addiction. According to court
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12 records, that defendant had made 11 loan applications over two years, including 3
13 PPP loans and 8 EIDL loans. Three were disbursed. Her range was 12-18 months.
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The government recommended low end, the defense requested probation.
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16 One more defendant, in US v. Cain, 22-cr-6042-MKD, is awaiting sentencing
17 on a case with $337,267 in restitution. According to court records, this defendant
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made two loan applications with a later request for additional funds on one of them.
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20 Based on the dollar amount, her sentencing range is likely to be 18-25 months if she
21 has no prior criminal history. Other subjects have not been located, but have been
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indicted.
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24 As the above survey makes clear, sentencing ranges on financial crimes are
25 tied to the amount of loss rather than the individualized acts of defendants. While this
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is an attempt to develop objectivity in sentencing guidelines, judges are given vital
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217 N. 2nd Street
Yakima, WA 98901
(509) 575-0372
fax (509) 452-6771
Case 1:22-cr-02059-MKD ECF No. 44 filed 05/15/23 PageID.219 Page 6 of 7
1 discretion in sentencing precisely because such sentencing structures can obscure the
2
individual characteristics of defendants so essential to the sentencing task. Of especial
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4 note is the case of a corporation and individuals who would have been defendants
5 facing an extraordinarily high sentencing range had they not taken the opportunity to
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enter settlement negotiations during the investigation of their fraud. As it is, they will
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8 not even face conviction. Unfortunately for Ms. Padilla, when she was given the
9 opportunity to enter into a similar negotiation with the government, she was not able
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to secure functional representation in time to explore settlement pre-Indictment.
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12 Like several defendants above, Ms. Padilla has no prior criminal history, and
13 she was open with law enforcement just as she was with probation about the choice to
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engage in fraudulent loan applications. Similarly, she has done well on pretrial
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16 release, continuing to work and be productive for as long as she can. She is
17 distinctive in that she didn’t actually spend a significant chunk of the loans disbursed,
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and she has been able to provide restitution funds for counsel to hold pending
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20 sentencing.
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DATED: May 15, 2023
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24
_/Robin C. Emmans___________ _/Ulvar W. Klein_____________
25 Robin C. Emmans, WSBA 37085 Ulvar W. Klein, WSBA 24334
26 2 Street Law PLLC 2nd Street Law PLLC
nd
217 N. 2nd Street 217 N. 2nd Street
27
28
-6-
217 N. 2nd Street
Yakima, WA 98901
(509) 575-0372
fax (509) 452-6771
Case 1:22-cr-02059-MKD ECF No. 44 filed 05/15/23 PageID.220 Page 7 of 7
1 Yakima, WA. 98901 Yakima, WA. 98901
2
(509) 575-0372 office (509) 575-0372 office
(509) 452-6771 fax (509) 452-6771 fax
3 Attorney for Karla L. Padilla-Reyna Attorney for Karla L. Padilla-Reyna
4 robin.emmans@secondstreetlaw.com ulvar@secondstreetlaw.com
5
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CERTIFICATE OF SERVICE
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I hereby certify that on May 15, 2023, I electronically filed the foregoing with
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11 the Clerk of the Court using the CM/ECF System which will send notification of such
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filing to the following: SAUSA Frieda K. Zimmerman, AUSA Tyler Tornabene, and
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14
AUSA Dan Fruchter.
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16
s/ Robin Emmans
17 Robin Emmans, WSBA 37085
18 2nd Street Law PLLC
217 N. 2nd Street
19 Yakima, WA 98901
20 (509) 575-0372
(509) 452-6771 (fax)
21 Robin.emmans@secondstreetlaw.com
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28
-7-
217 N. 2nd Street
Yakima, WA 98901
(509) 575-0372
fax (509) 452-6771
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