Plea Agreement — No. 1:22-cr-00171 (Dkt. 3, W.D. Mich.)

Summary

A plea agreement between Kurtis James VanderMolen and the U.S. Attorney's Office for the Western District of Michigan, filed as Docket 3 in United States v. VanderMolen, Case No. 1:22-CR-00171, in the U.S. District Court for the Western District of Michigan, before Judge Robert J. Jonker. VanderMolen gives up indictment by a grand jury and agrees to plead guilty to a Felony Information charging bank fraud under Title 18, United States Code, Section 1344(2) and money laundering under Section 1957. The agreement lists the elements of each count and the statutory maximums, 30 years of imprisonment and a $250,000 fine or twice the gross gain or loss for Count 1, and 10 years of imprisonment for Count 2.

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“Plea Agreement — No. 1:22-cr-00171 (Dkt. 3, W.D. Mich.).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/plea-agreement-no-1-22-cr-00171-dkt-3-w-d-mich-9419ecfda5/, SHA-256 11646a341c648fb942f86c533bbc13e0eba46eeb8a77e51e2cccf2b9e295e265.

Full text

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
--------------
UNITED STATES OF AMERICA,
Case No.: 1:22-CR-00171
Plaintiff,
v.

KURTIS JAMES VANDERMOLEN, Hon. Robert J. Jonker
U.S. District Judge
Defendant.
_________________________________/
PLEA AGREEMENT
This constitutes the plea agreement between Kurtis James VanderMolen and the United

States Attorney’s Office for the Western District of Michigan. The terms of the agreement are as

follows:

1. Plea to Information. Defendant gives up the right to Indictment by a grand jury and

agrees to plead guilty to the Felony Information charging bank fraud in violation of Title 18, United

States Code, Section 1344(2) and money laundering in violation of Title 18, United States Code,

Section 1957.

2. Defendant Understands the Crimes.

Count 1. In order for Defendant to be guilty of violating Title 18, United States

Code, Section 1344(2), the following must be true: (1) Defendant knowingly executed a scheme

to obtain any of the money, funds, or property owned by or under the control of a bank by means

of false or fraudulent pretenses, representations, or promises; (2) the scheme included a material

misrepresentation or concealment of a material fact; (3) Defendant acted with the intent to deceive

or cheat someone for the purpose of either causing a financial loss to another or bringing about a

financial gain for himself; and (4) the bank was federally insured.
Count 2. In order for Defendant to be guilty of violating Title 18, United States

Code, Section 1957, the following must be true: (1) Defendant knowingly engaged in a monetary

transaction; (2) the monetary transaction was property derived from specified unlawful activity

(here, bank fraud); (3) the property had a value greater than $10,000; (4) Defendant knew the

transaction was in criminally derived property; and (5) the monetary transaction took place within

the United States.

3. Defendant Understands the Penalties.

Count 1. The statutory maximum that the Court can impose for a violation of Title

18, United States Code, Section 1344(2) is the following: 30 years of imprisonment; a five-year

period of supervised release; a fine of $250,000 or twice the gross gain or gross loss resulting from

the offense, whichever is greater; and a mandatory special assessment of $100.

Count 2. The statutory maximum that the Court can impose for a violation of Title

18, United States Code, Section 1957 is the following: 10 years of imprisonment; a three-year

period of supervised release; a fine of $250,000 or twice the amount of the criminally derived

property involved in the transaction; and a mandatory special assessment of $100.

Defendant agrees to pay the special assessments at or before the time of sentencing unless

Defendant affirmatively demonstrates to the Court that Defendant lacks the ability to pay.

4. Mandatory Restitution (MVRA). Defendant understands that he will be required

to pay full restitution as required by law. The parties currently believe that the applicable amount

of restitution is approximately $170,002, but recognize and agree that this amount could change

based on facts that come to the attention of the parties prior to sentencing.

5. Supervised Release Defined. Supervised release is a period of time following

imprisonment during which Defendant will be subject to various restrictions and requirements.

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Defendant understands that if he violates one or more of the conditions of any supervised release

imposed, he may be returned to prison for all or part of the term of supervised release, which could

result in the Defendant serving a total term of imprisonment greater than the statutory maximum

stated above.

6. Asset Forfeiture and Financial Accountability. Defendant agrees to disclose to law

enforcement officials the whereabouts of, the Defendant’s ownership interest in, and all other

information known to Defendant about, all assets, money, or property of any kind, derived from

or acquired as a result of, or used to facilitate the commission of Defendant’s illegal activities.

Defendant further agrees to forfeit to the United States the sum of $170,002, which

represents the proceeds Defendant obtained as a result of his commission of the bank fraud offense

charged in Count 1 of the Felony Information.

Defendant consents to the forfeiture of substitute property pursuant to 21 U.S.C. § 853(p).

Defendant acknowledges that the proceeds he obtained, directly or indirectly from the bank fraud

offense charged in Count 1 of the Felony Information were spent on living expenses and other

assets he no longer possesses. As such, Defendant agrees that his criminal proceeds cannot be

located upon the exercise of due diligence and have been commingled with other property which

cannot be divided without difficulty.

The U.S. Attorney’s Office agrees to submit a restoration request to the Department of

Justice Money Laundering and Asset Recovery Section for the application of any proceeds from

such forfeited property towards Defendant’s restitution order. Defendant acknowledges that the

Department of Justice Money Laundering and Asset Recovery Section has the sole authority to

grant or deny the restoration request and that the submission of such a request by the U.S.

Attorney’s Office does not guarantee that such request will be granted.

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Defendant is the sole owner of two CZ firearms with serial numbers UC11369 and

UC12145, which are in the lawful custody of the United States. Defendant acknowledges that as a

convicted felon, Defendant will have no right to possess the firearms, either actually or

constructively. Defendant hereby waives and abandons all right, title, and interest in the listed

firearms. Defendant waives, releases, and withdraws any claim that Defendant has made with

respect to the firearms and ammunition, and waives and releases any claim that Defendant might

otherwise have made to them in the future. Defendant consents to the destruction of the firearms.

Defendant waives any right Defendant might otherwise have had to receive notice or a hearing

with respect to any motion, pleading, order, or any other action that the government might take, in

its sole discretion, to carry out the abandonment, disposition, and destruction of the firearms.

Defendant’s waiver includes, without limitation, all common law, statutory, and constitutional

claims or challenges, on any grounds, arising at any time from, or relating to, the seizure,

abandonment, disposition, and destruction of the firearms, including any such claim for attorney

fees and litigation costs. Defendant agrees to hold the United States, its agents and employees,

harmless from any claims whatsoever in connection with the seizure, abandonment, disposition,

and destruction of the firearms.

If abandonment is not feasible, Defendant consents to the entry of a preliminary order of

forfeiture concerning the firearms at or before the time of sentencing, and agrees to not contest a

civil forfeiture action to forfeit the firearms, and agrees not to assist any other individual in filing

a claim to the firearms. Defendant acknowledges that by pleading guilty to felony offenses, he

will become a prohibited person and cannot legally possess a firearm in the future.

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7. Factual Basis of Guilt. Defendant and the U.S. Attorney’s Office agree and

stipulate to the following statement of facts which need not be proven at the time of the plea or

sentencing:

On July 23, 2020, Defendant electronically signed and submitted an application for
a first-draw Paycheck Protection Program (“PPP”) loan to an FDIC-insured lender,
Cross River Bank, for a fictitious business: Breakout Strategies Corporation
(“Breakout Strategies”). In the application, Defendant knowingly and falsely stated
that Breakout Strategies was a legitimate business established in January 2020 that
had eleven employees. As part of the application, Defendant also submitted
fraudulent bank statements and other records to falsely make it appear as though
Breakout Strategies was a real business.

On August 5, 2020, Defendant electronically signed and submitted a U.S. Small
Business Administration (“SBA”) Borrower Application Form (SBA Form 2483)
to Cross River Bank, which form included a number of knowingly false statements,
including that Breakout Strategies (1) was in operation on February 15, 2020 and
had employees for whom it paid salaries and payroll taxes; and (2) would use the
PPP funds for eligible expenses.

On August 7, 2021, Cross River Bank, relying on Defendant’s materially false loan
applications and related documents and statements, deposited $100,641 in first-
draw PPP loan proceeds in a Breakout Strategies credit union account that
Defendant opened in Kent County, in the Western District of Michigan. Defendant
used the first-draw PPP loan proceeds for personal expenses and purchases. On
September 1, 2020, for example, Defendant wrote a $18,752 check (check number
1105) from the Breakout Strategies account at Consumers Credit Union to make
the final payment on a 2010 BMW 650i convertible. Defendant knew that the
entirety of the $18,752 constituted proceeds of his bank fraud.

On February 10, 2021, Defendant electronically submitted an application for a
second-draw PPP loan for Breakout Strategies. In the application, Defendant again
falsely represented that Breakout Strategies was a legitimate company with actual
employees. As part of this application, Defendant submitted fraudulent bank
statements, fraudulent tax records, and fraudulent wage and hour records that
Defendant claimed to have submitted to the State of Michigan.

On February 18, 2021, Defendant electronically signed and submitted an SBA
Second Draw Borrower Application Form (SBA Form 2483) to Cross River Bank,
which form included a number of knowingly false statements, including that
Breakout Strategies (1) was in operation on February 15, 2020; (2) realized a
reduction in gross receipts in excess of 25% relative to the relevant comparison
time periods in 2019 and 2020; and (3) used its first-draw PPP loan proceeds only
for eligible expenses.

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On February 22, 2021, Cross River Bank, relying on Defendant’s materially false
loan applications and related false documents and statements, deposited $69,361 in
second-draw PPP loan proceeds in the Breakout Strategies credit union account in
Kent County, in the Western District of Michigan. Defendant used the second-
draw PPP loan proceeds for personal expenses and purchases, including
Defendant’s wedding, in Florida, in May 2021.

8. Acceptance of Responsibility. The U.S. Attorney’s Office agrees not to oppose

Defendant’s request for a two-level reduction of his offense level for acceptance of responsibility

under Section 3E1.1(a) of the Sentencing Guidelines. However, the U.S. Attorney’s Office

reserves the right to object to Defendant’s request if it subsequently learns of conduct by Defendant

that is inconsistent with the criteria set forth in the Commentary to Section 3E1.1. Should the

Court grant a two-level reduction as provided herein, the government will move the Court to grant

an additional one-level reduction if the adjusted offense level is 16 or greater pursuant to Section

3E1.1(b).

9. Non-Prosecution Agreement. The U.S. Attorney’s Office for the Western District

of Michigan agrees, except for crimes of violence and criminal tax violations (including conspiracy

to commit such violations chargeable under 18 U.S.C. § 371), not to further prosecute Defendant

for conduct relating to Defendant’s application for, and receipt of, PPP loan proceeds for Breakout

Strategies Corporation. Defendant understands that the U.S. Attorney’s Office is free to prosecute

Defendant for any other unlawful past conduct or any unlawful conduct that occurs after the date

of this agreement.

10. Prison Placement. The U.S. Attorney’s Office will not object to a request by

Defendant that the Court recommend that Defendant be confined at any particular institution. Both

parties acknowledge that the Bureau of Prisons, in its sole discretion, decides prison placement

6
and that, while the Bureau often gives deference to a Court’s recommendation, the Bureau is not

required to follow the Court’s recommendation.

11. The Sentencing Guidelines. Defendant understands that, although the United States

Sentencing Guidelines (the “Guidelines”) are not mandatory, the Court must consult the

Guidelines and take them into account when sentencing Defendant. Defendant understands that

the Court, with the aid of the presentence report, will determine the facts and calculations relevant

to sentencing. Defendant understands that Defendant and Defendant’s attorney will have the

opportunity to review the presentence report and to make objections, suggestions, and

recommendations concerning the calculation of the Guideline range and the sentence to be

imposed. Defendant further understands that the Court shall make the final determination of the

Guideline range that applies in this case, and may impose a sentence within, above, or below the

Guideline range, subject to the statutory maximum penalties described elsewhere in this

Agreement. Defendant further understands that disagreement with the Guideline range or sentence

shall not constitute a basis for withdrawal of the pleas.

12. The Parties Jointly Agree to the Following:

a. Stipulations Regarding Guideline Factors. Defendant and the U.S.

Attorney’s Office agree and stipulate to the following applicable Sentencing Guidelines factors:

Base Offense Level: 7 [USSG § 2B1.1(a)(1)]

Specific Offense Characteristics:

Loss between $150,000 and $250,000 10 [USSG § 2B1.1(b)(1)(F)]

Sophisticated Means 2 [USSG § 2B1.1(b)(10)(C)]

Adjusted Offense Level: 19

Defendant and the U.S. Attorney’s Office each reserve the right to argue that additional specific

offense characteristics, adjustments and departures are appropriate.

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b. Stipulations Regarding Criminal History. There is no agreement as to

Defendant’s criminal history or criminal history category.

c. Stipulations Not Binding in Court. Defendant understands that neither the

United States Probation Office nor the Court is bound by any stipulation in this agreement, and

that the Court, with the aid of the presentence report, will determine the facts and calculations

relevant to sentencing. Both Defendant and the U.S. Attorney’s Office are free to supplement the

facts stipulated to in this agreement by supplying relevant information to the United States

Probation Office and the Court, and to correct any and all factual misstatements relating to the

calculation of the sentence. Defendant understands that if the Court finds facts or reaches

conclusions different from those in any stipulation contained in this agreement, Defendant cannot,

for that reason alone, withdraw his guilty pleas.

13. Waiver of Constitutional Rights. By pleading guilty, Defendant gives up the right

to persist in a plea of not guilty and the right to a speedy and public trial by jury or by the Court.

As a result of Defendant’s guilty pleas, there will be no trial. At any trial, whether by jury or by

the Court, Defendant would have had the following rights:

a. The right to the assistance of counsel, including, if Defendant could not

afford an attorney, the right to have the Court appoint an attorney to represent Defendant.

b. The right to be presumed innocent and to have the burden of proof placed

on the government to prove Defendant guilty beyond a reasonable doubt.

c. The right to confront and cross-examine witnesses against Defendant.

d. The right, if Defendant wished, to testify on Defendant’s own behalf and

present evidence in opposition to the charges, including the right to call witnesses and to subpoena

those witnesses to testify.

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e. The right not to be compelled to testify, and, if Defendant chose not to

testify or present evidence, to have that choice not be used against Defendant.

f. By pleading guilty, Defendant also gives up any and all rights to pursue in

this Court or on appeal any affirmative defenses, Fourth Amendment or Fifth Amendment claims,

and other pretrial motions that have been filed or could be filed.

14. FOIA Requests. Defendant hereby waives all rights, whether asserted directly or

by a representative, to request or receive from any department or agency of the United States any

records pertaining to the investigation or prosecution of this case, including without limitation any

records that may be sought under the Freedom of Information Act, 5 U.S.C. § 552, or the Privacy

Act of 1974, 5 U.S.C. § 552a.

15. The Court is not a Party to this Agreement. Defendant understands that the Court

is not a party to this agreement and is under no obligation to accept any recommendation by the

U.S. Attorney’s Office or the parties regarding the sentence to be imposed. Defendant further

understands that, even if the Court ignores such a recommendation or imposes any sentence up to

the maximum established by statute, Defendant cannot, for that reason, withdraw his guilty pleas,

and he will remain bound to fulfill all of his obligations under this agreement. Defendant

understands that no one—not the prosecutor, Defendant’s attorney, or the Court—can make a

binding prediction or promise regarding the sentence Defendant will receive, except that it will be

within the statutory maximum.

16. This Agreement is Limited to the Parties. This agreement is limited to the U.S.

Attorney’s Office for the Western District of Michigan, and cannot bind any other federal, state or

local prosecuting, administrative or regulatory authority. This agreement applies only to crimes

9
committed by Defendant. This agreement does not apply to or preclude any past, present, or future

forfeiture or civil actions.

17. Consequences of Breach. If Defendant breaches any provision of this agreement,

including any promise of cooperation, whether before or after sentencing, the United States shall

have the right to terminate this agreement, or deny any or all benefits to which Defendant would

otherwise be entitled under the terms of this agreement. In the event that the United States elects

to terminate this agreement, the agreement shall be considered null and void, and the parties shall

return to the same position they were in prior to the execution of this agreement, as though no

agreement ever existed. In such an event, Defendant shall remain liable for prosecution on all

original charges, and the United States shall be free to bring such additional charges as the law and

facts warrant. Defendant further agrees to waive and forever give up his right to raise any claim

that such a prosecution is time-barred if the prosecution is brought within one (1) year of the breach

that gives rise to the termination of this agreement.

18. This is the Complete Agreement. This agreement has been entered into by both

sides freely, knowingly, and voluntarily, and it incorporates the complete understanding between

the parties. No other promises have been made, nor may any additional agreements,

understandings or conditions be entered into unless in a writing signed by all parties or on the

record in open court.

10
MARK A. TOTTEN
J United States Attorney
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Date ar ADAM B. TOWNSHEND
Assistant United States Attorney

I have read this agreement and carefully discussed every part of it with my attorney. I
understand the terms of this agreement, and I voluntarily agree to those terms. My attorney has
advised me of my rights, of possible defenses, of the sentencing provisions, and of the
consequences of entering into this agreement. No promises or indugéments have been made to
me other than those contained in this agreement. No one has thregtened or forced me in any way
to enter into this agreement. Finally, I am satisfied with the repfesentgtion of my attorney in this

Iam Kurtis James VanderMolen’s attorney. I have carefully discussed every part of this
agreement with my client. Further, I have fully advised my client of his rights, of possible
defenses, of the sentencing provisions, and of the consequences of entering into this agreement.
ro did knowledge, my client’s decision to enter into this agreement is an informed and voluntary

‘12/ 6/ 262%
Date
Lh Veh Coeg he
PARKER DOUGLAS
Attorney for Defendant

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