United States v. Reginald Dewayne Rhodes — Plea Agreement, Northern District of Alabama (Document 14)

Summary

The 15-page plea agreement in United States v. Reginald Dewayne Rhodes, No. 7:23-cr-00309-LSC-GMB, in the U.S. District Court for the Northern District of Alabama, Western Division, filed October 23, 2023 as Document 14. The defendant agrees to plead guilty to Count One, wire fraud under 18 U.S.C. § 1343, which carries up to 20 years and a fine of up to $250,000.00. The factual basis states that a PPP application submitted on or about April 29, 2021 claimed a carpet cleaning business with $74,000 in 2020 gross receipts and included a fraudulent February 2020 bank statement, and that a Florida lender wired $11,770 on or about June 4, 2021. The parties stipulate a loss greater than $6,500 and less than $15,000, and the government will recommend restitution to the Small Business Administration of not less than $11,770.

Summary drafted by a model from the text of the original file linked on this page and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Text recognized from a scanned document; may contain errors.

Case 7:23-cr-00309-LSC-GMB Document14_ Filed 10/23/23 Page 1of 15 FILED

2023 Oct-23 AM 11:09
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA

WESTERN DIVISION
UNITED STATES OF AMERICA )
) Case No.:7:23-cr-309-LSC-GMB
v )
)
REGINALD DEWAYNE )
RHODES )

PLEA AGREEMENT

The Government and the defendant, REGINALD DEWAYNE RHODES,

hereby acknowledge the following plea agreement in this case:
PLEA

The defendant agrees to (i) plead guilty to COUNT ONE of the Indictment
filed in the above-numbered and -captioned matter; (ii), pay restitution as determined
by the Court; and (iii) waive certain rights to direct appeal and collateral attack as
outlined in section IV of this agreement. In exchange, the United States Attorney,
acting on behalf of the Government and through the undersigned Assistant United
States Attorney, agrees to recommend the disposition specified below, subject to the

conditions in section VII.

Page 1 of 15 Defendant’s Initials (1K
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23 Page 2of15

TERMS OF THE AGREEMENT

I. MAXIMUM PUNISHMENT
The defendant understands that the maximum statutory punishment that
may be imposed for the crime of Wire Fraud, in violation of Title 18, United States
Code, Section 1343, as charged in Count One is:
A. Imprisonment for not more than 20 years;
B. A fine of not more than $250,000.00, or;
C. Both (a and b);
D. Supervised release of not more than three years; and
E. Special Assessment Fee of $100 per count.
II. FACTUAL BASIS FOR PLEA
The Government is prepared to prove, at a minimum, the following facts at
the trial of this case:

A. Overview of the Paycheck Protection Program (PPP)

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was
enacted in March 2020 and designed to provide emergency financial assistance to
Americans suffering from the economic effects of the COVID-19 pandemic. Among
other initiatives, the CARES Act, through the PPP, authorized up to $349 billion in
potentially forgivable loans to small business for payroll, job retention, mortgage

interest, and certain other applicable expenses. Each loan draw had a specific

Page 2 of 15 Defendant’s Initials _{*
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23. Page3of15

application process and requirements.

The Small Business Administration (SBA) oversaw the PPP and fully
guaranteed every legitimate PPP loan. The SBA would forgive PPP loans if all
employee retention criteria were met, and the funds were used for eligible expenses
within a designated period as set forth in the PPP. The individual PPP loans,
however, were issued by private, SBA-approved lenders who received and processed
the PPP applications. Thus, the loans were made from the lenders’ own funds.

To apply for a PPP loan, a qualifying business was required to submit a PPP
loan application to an SBA-approved lender. In the PPP loan application (SBA Form
2483), the small business (through its authorized representative) had to verify its
average monthly payroll and the total number of employees. These figures were
used to calculate the amount of money the business was eligible to receive under the
PPP. The maximum PPP loan amount a business could receive was 2.5 times the
business’s average monthly payroll costs, up to $10 million.

The borrower was required to make several affirmative certifications as part
of the PPP application process, including: (1) the business was in operation on
February 15, 2020 and has employees for whom it paid salaries and payroll taxes or
paid independent contractors, (2) the funds would be used to retain workers and

otherwise comply with the fund eligibility restrictions, and (3) the information

Page 3 of 15 Defendant’s Initials 4 t
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23 Page 4of15

provided in the application and supporting documentation was true and accurate in
all material aspects.

B. Overview of the Scheme

Between April and June 2021, the defendant applied for and had deposited
into his bank account $11,770 in fraudulently obtained PPP loan funds. The
defendant filed or caused to be filed a PPP loan application with material
misrepresentations and supported by fraudulent bank records. Based on those
material misrepresentations, on or about June 4, 2021, and SBA-approved lender
headquartered in Florida wired $11,770 into the defendant’s bank account in
Alabama. The wire constituted a wire communication traveling in interstate
commerce.

The defendant’s PPP loan application was submitted on or about April 29,
2021, and included the defendant’s social security number, date of birth, personal
address, and a copy of his Alabama nondriver identification card. The application
also included a self-administered photo (“selfie”) to further confirm his identity and
listed a contact email address of reginaldrhodes!@yahoo.com, which is an email
account subscribed to in the dofendant’s name.

The application claimed defendant had established a carpet cleaning business
in January 2020 for which he earned $56,500 in 2020 during the pandemic. To

support these claims, the application included a 2020 IRS Schedule C Form 1040

Page 4 of 15 Defendant’s Initials \\\
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23 Page5of15

(Profit or Loss from Business) claiming the defendant earned $74,000 in gross
receipts in 2020. The application also included a purported February 2020 bank
statement listing a $1,060.92 deposit for “PAYROLL.” PPP loan applicants would
often include February 2020 bank statements to prove their business was a going
concern as of February 15, 2020, a requirement to receive a PPP loan. Bank records
prove the defendant submitted a fraudulent February 2020 bank statement. Given
the fraudulent bank statement, the defendant therefore also materially
misrepresented on his loan application that he was eligible to receive the PPP loan
and that the information provided in the application and all supporting
documentation was true and accurate.

Furthermore, the defendant, like all PPP loan applicants, was required to
indicate whether he was presently subject to any criminal charges. The SBA loan
application form clearly states that if an applicant answers “Yes” to that question the
SBA will deny the loan application. The defendant answered “No” to that question,
however, he was arrested in Tuscaloosa County in December 2020 on unrelated
violent crime charges that remain pending. Therefore, the defendant made yet
another material misrepresentation on his loan application.

On June 22, 2021, the defendant issued an $8,000 cashier’s check in his name

from the bank account into which he received the PPP loan.

* KOK

Page 5 of 15 Defendant’s Initials (i
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23. Page6of15

The parties stipulate that for the purposes of sentencing the total foreseeable

loss amount is greater than $6,500 and less than $15,000. The parties further

stipulate that venue is appropriate in the Northern District of Alabama.

The defendant hereby stipulates that the facts stated above are
substantially correct and that the Court can use these facts in calculating the
defendant’s sentence. The defendant further acknowledges that these facts do
not constitute all the evidence of each and every act that the defendant and/or
any co-conspirators may have committed.

)

REGINALD DEWAYNE RHODES

II. RECOMMENDED SENTENCE

Subject to the limitations in section VII regarding subsequent conduct and

pursuant to Fed. R. Crim. P. 11(c)(1)(B), the Government will recommend the

following disposition:

A.

That the defendant be awarded a two (2) level reduction in the
defendant’s adjusted offense level, based upon the defendant’s apparent
prompt recognition and affirmative acceptance of personal
responsibility for the defendant’s criminal conduct. The Government
agrees to make a motion pursuant to USSG §3E1.1(b) for an additional
one-level decrease in recognition of the defendant’s prompt notification
to the Government of the intention to enter a plea of guilty. The
Government may oppose any adjustment for acceptance of
responsibility if the defendant: (1) fails to admit each and every item
in the factual stipulation; (2) denies involvement in the offense;
(3) gives conflicting statements about the defendant’s involvement in
the offense; (4) is untruthful with the Court, the Government, or the
United States Probation Officer; (5) obstructs or attempts to obstruct
justice prior to sentencing; (6) engages in any criminal conduct between
the date of this agreement and the date of sentencing; or (7) attempts to

Page 6 of 15 Defendant’s Initials _\<
IV.

Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23. Page7of15

withdraw the defendant’s plea of guilty for any reason other than those
expressly enumerated in the “Waiver of Right to Appeal and Post-
Conviction Relief” section of this Plea Agreement;

B. — That the defendant be remanded to the custody of the Bureau of Prisons
and incarcerated for a term consistent with the advisory United States
Sentencing Guideline range as calculated by the Court at the time of
sentencing;

C. That following said term of imprisonment, the defendant be placed on
supervised release for a period to be determined by the Court, subject
to the Court’s standard conditions of supervised release;

D. That the defendant be required to pay restitution to all the victims of the
defendant’s crimes, specifically the United States Small Business
Administration, in an amount not less than $11,770;

E. That the defendant be required to pay a fine in accordance with the
sentencing guidelines should the Court determine that the defendant has
the ability to pay a fine, said amount due and owing as of the date

sentence is pronounced, with any outstanding balance to be paid in full
by the expiration of the term of supervised release; and,

F. That the defendant pay a special assessment of $100.00, said amount
due and owing as of the date sentence is pronounced.

WAIVERS

A. STATUTE OF LIMITATIONS WAIVER

In consideration of the recommended disposition of this case, I,
REGINALD DEWAYNE RHODES, hereby understand, acknowledge, and
agree that if this plea agreement is set aside for any reason, I will not assert any
defense based on any applicable statute of limitations or the Speedy Trial Act,

18 U.S.C. § 3161, et seq., that includes the passage of time from and including

Page 7 of 15 Defendant’s Initials NW
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23 Page8of15

the date of this plea agreement until and including the date of entry of any order
setting this plea agreement aside.

B. RIGHT TO APPEAL AND POST-CONVICTION RELIEF

In consideration of the recommended disposition of this case, I,
REGINALD DEWAYNE RHODES, hereby waive and give up my right to
appeal my conviction and/or sentence in this case, as well as any fines,
restitution, and forfeiture orders, the Court might impose. Further, I waive
and give up the right to challenge my conviction and/or sentence, any fines,
restitution, forfeiture orders imposed or the manner in which my conviction
and/or sentence, any fines, restitution, and forfeiture orders were determined
in any post-conviction proceeding, including, but not limited to, a motion
brought under 28 U.S.C. § 2255, and any argument that (1) the statute(s) to
which I am pleading guilty is or are unconstitutional or (2) the admitted
conduct does not fall within the scope of the statute(s).

The defendant reserves the right to contest in an appeal or post-
conviction proceeding(s) the following:

1. Any sentence imposed in excess of the applicable statutory
maximum sentence(s);

2. Any sentence imposed in excess of the Guidelines range
determined by the Court at the time sentence is imposed; and

3. Ineffective assistance of counsel.

Page 8 of 15 Defendant’s Initials _K>
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23 Page9of15

The defendant acknowledges that before giving up these rights, the
defendant discussed the United States Sentencing Guidelines and _ their
application to the defendant’s case with the defendant’s attorney, who
explained them to the defendant’s satisfaction. The defendant further
acknowledges and understands that the Government retains its right to appeal
where authorized by statute.

I, REGINALD DEWAYNE RHODES, hereby place my signature on the
line directly below to signify that I fully understand the foregoing paragraphs,
and that Iam knowingly and voluntarily entering into this waiver.

REGINALD DEWAYNE RHODES

V. UNITED STATES SENTENCING GUIDELINES
The defendant’s counsel has explained to the defendant, that in light of the
United States Supreme Court’s decision in United States v. Booker, the federal
sentencing guidelines are advisory in nature. Sentencing is in the Court’s discretion
and is not required to be within the guideline range. The defendant agrees that,
pursuant to this agreement, the Court may use facts it finds by a preponderance of
the evidence to reach an advisory guideline range, and the defendant explicitly

waives any right to have those facts found by a jury beyond a reasonable doubt.

Page 9 of 15 Defendants Initials \S
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23. Page10of15

VI. AGREEMENT NOT BINDING ON COURT
The defendant fully and completely understands and agrees that it is the
Court’s duty to impose sentence upon the defendant and that any sentence
recommended by the Government is NOT BINDING UPON THE COURT, and
that the Court is not required to accept the Government’s recommendation. Further,
the defendant understands that if the Court does not accept the Government’s
recommendation, the defendant does not have the right to withdraw the guilty plea.
Vil. VOIDING OF AGREEMENT
The defendant understands that if the defendant (a) violates any federal, state,
or local law or any condition of pretrial release after entering into this plea
agreement, (b) moves the Court to accept a plea of guilty in accordance with, or
pursuant to, the provisions of North Carolina v. Alford, 400 U.S. 25 (1970),
(c) tenders a plea of nolo contendere to the charges, (d) violates any other term of
this plea agreement, and/or (e) does or says anything that is inconsistent with the
acceptance of responsibility, the plea agreement will become NULL and VOID at
the election of the United States, and the United States will not be bound by any of
the terms, conditions, or recommendations, express or implied, which are contained
herein. Further, such election will not entitle the defendant to withdraw a previously

entered plea.

Page 10 of 15 Defendant’s Initials_(\\ ~
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23. Page11of15

Vill. OTHER DISTRICTS AND JURISDICTIONS
The defendant understands and agrees that this agreement DOES NOT BIND
any other United States Attorney in any other district, or any other state or local
authority.
IX. COLLECTION OF FINANCIAL OBLIGATION
To facilitate the collection of financial obligations to be imposed in
connection with this prosecution, the defendant agrees to:

e fully disclose all assets in which the defendant has any interest or over which
the defendant exercises control, directly or indirectly, including those held by
a spouse, nominee or other third party;

e promptly submit a completed financial statement to the United States
Attorney’s Office, in a form that it provides and as it directs;

e identify all assets over which the defendant exercises or exercised control,
directly or indirectly, within the past five years, or in which the defendant has
or had during that time any financial interest;

e take all steps as requested by the Government to obtain from any other parties
by any lawful means any records of assets owned at any time by the defendant;

e undergo any polygraph examination the Government may choose to
administer concerning such assets and to provide and/or consent to the release

of the defendant’s tax returns for the previous five years.

Page 11 of 15 Defendant’s Initials_| \\ \_
Case 7:23-cr-00309-LSC-GMB Document14 Filed 10/23/23. Page12o0f15

The defendant further agrees that the above information, as well as any of the
defendant’s financial statements and disclosures, will be complete, accurate, and
truthful. Finally, the defendant expressly authorizes the United States Attorney’s
Office to obtain a credit report on the defendant to evaluate the defendant’s ability
to satisfy any financial obligation imposed by the Court.

X. AGREEMENT REGARDING RELEVANT CONDUCT AND
RESTITUTION

As part of the defendant’s plea agreement, the defendant admits to the above
facts associated with the charges and relevant conduct for any other acts. The
defendant understands and agrees that the relevant conduct contained in the factual
basis will be used by the Court to determine the defendant’s range of punishment
under the advisory sentencing guidelines. The defendant admits that all the crimes
listed in the factual basis are part of the same acts, scheme, and course of conduct.
This agreement is not meant, however, to prohibit the United States Probation Office
or the Court from considering any other acts and factors, which may constitute or
relate to relevant conduct. Additionally, if this agreement contains any provisions
providing for the dismissal of any counts, the defendant agrees to pay any
appropriate restitution to each of the separate and proximate victims related to those
counts should there be any and waives objection to the inclusion of that restitution

in any order issued by the Court.

Page 12 of 15 Defendant’s Initials_{ VS _
Case 7:23-cr-00309-LSC-GMB Document14 Filed 10/23/23. Page13o0f15

XI. TAX, FORFEITURE AND OTHER CIVIL/ADMINISTRATIVE
PROCEEDINGS

Unless otherwise specified herein, the defendant understands and
acknowledges that this agreement does not apply to or in any way limit any pending
or prospective proceedings related to the defendant’s tax liabilities, if any, or to any
pending or prospective forfeiture or other civil or administrative proceedings.

XI. IMMIGRATION STATUS

The defendant recognizes that pleading guilty may have consequences with
respect to the defendant’s immigration status if the defendant is not a citizen of the
United States. Under federal law, a broad range of crimes are removable offenses,
including the offense(s) to which the defendant is pleading guilty. The defendant’s
guilty plea and conviction make it practically inevitable and a virtual certainty that
the defendant will be removed or deported from the United States if the defendant is
not a citizen of the United States. Removal and other immigration consequences are
the subject of a separate proceeding, however; and the defendant understands that
no one, including her attorney or the district court, can predict to a certainty the effect
of her conviction on her immigration status. Understanding all of this, the defendant
nevertheless affirms that the defendant wants to plead guilty regardless of any
immigration consequences that plea may entail, even if the consequence is automatic

removal from the United States.

Page 13 of 15 Defendant’s Initials_~
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23. Page14of15

XIII. DEFENDANT’S ACKNOWLEDGEMENT

I have read and understand the provisions of this plea agreement consisting of
fifteen (15) pages. I have discussed the case and my constitutional and other rights
with my lawyer. I am satisfied with my lawyer’s representation in this case. I
understand that by pleading guilty, I will be waiving and giving up my right to
continue to plead not guilty, to a trial by jury, to the assistance of counsel at that trial,
to confront, cross-examine, or compel the attendance of witnesses, to present
evidence on my behalf, to maintain my privilege against self-incrimination, and to
the presumption of innocence. I agree to enter my plea as indicated above on the
terms and conditions set forth herein.

NO PROMISES OR REPRESENTATIONS OTHER THAN THOSE IN

THE AGREEMENT HAVE BEEN MADE TO ME BY THE

PROSECUTOR, OR BY ANYONE ELSE, NOR HAVE ANY THREATS

BEEN MADE OR FORCE USED TO INDUCE ME TO PLEAD
GUILTY.

I further state that I have not had any drugs, medication, or alcohol within the

past 48 hours except as stated here:

I understand that this plea agreement will take effect and will be binding as to
the Parties only after all necessary signatures have been affixed hereto.
I have personally and voluntarily placed my initials on every page of this plea

agreement and have signed the signature line below to indicate that I have read,

Page 14 of 15 Defendant’s Initials_\\|
Case 7:23-cr-00309-LSC-GMB Document14 _ Filed 10/23/23. Page15o0f15

understand, and approve all the provisions of this plea agreement, both individually

and as a total binding agreement.

DATE REGINALD DEWAYNE RHODES
XIV. COUNSEL’S ACKNOWLEDGMENT

I have discussed this case with my client in detail and have advised my client
of all my client’s rights and all possible defenses. My client has conveyed to me that
my client understands this plea agreement and consents to all its terms. I believe the
plea and disposition set forth herein are appropriate under the facts of this case and

are in accord with my best judgment. I concur in the entry of the plea agreement on

the terms and conditions set forth herein. yee
(0/16/33

DATE COURTNEY MURTHA
Defendant’s Counsel

XV. GOVERNMENT’S ACKNOWLEDGMENT
I have reviewed this matter and this plea agreement and concur that the plea

and disposition set forth herein are appropriate and are in the interests of justice.

PRIM F. ESCALONA
United States Attorney

(0 be [2Z (IA \
DA JONATHAN “JACK” HARRINGTON

Assistant United States Attorney

Page 15 of 15 Defendant’s Initials KK


File and source

File

14-plea-agreement-as-to-reginald-dewayne-rhodes-jr.pdf

Size

5,755,301 bytes

SHA-256

1fc1d06296745fc69dd7ce5a14153a98cacf39b51bbafa912eac7384f5b1e0c3

Our copy

14-plea-agreement-as-to-reginald-dewayne-rhodes-jr.pdf

Original

PACER (login required)