Sentencing Memorandum and Opposition to Defendant's Motion — USA v. Scoggins et al (Dkt. 34)

Summary

The Government's Sentencing Memorandum and Opposition to Defendant's Motion for Downward Variance in United States v. Jennifer Corinne Scoggins, 5:23-CR-00087-MHH-HNJ, in the U.S. District Court for the Northern District of Alabama, filed 04/18/24 as Document 34 and signed by Assistant United States Attorney Jonathan "Jack" Harrington. It opposes the motion at Dkt. No. 33 and requests a 21-month custodial sentence. The memorandum states the defendant conspired with her husband to obtain PPP loans totaling more than $1.14 million and spent the proceeds on a home, automobiles, family vacations and personal expenses. It sets out the PSR calculation: base offense level 7, a 14-level loss increase, reductions for acceptance and Zero-Point Offender status, total offense level 16 and a range of 21 and 27 months. It argues general deterrence and the scale of the fraud weigh against a variance.

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“Sentencing Memorandum and Opposition to Defendant's Motion — USA v. Scoggins et al (Dkt. 34).” Original at ecf.alnd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/sentencing-memorandum-and-opposition-to-defendant-s-motion-usa-v-scogg-1673ad27f1/, SHA-256 cdd7a1c013397e85e9995fa0ac0490b0b81f429d395c83d2942d50c651c751bc.

Full text

Case 5:23-cr-00087-MHH-HNJ Document 34 Filed 04/18/24 Page 1 of 8 FILED
2024 Apr-18 PM 03:46
U.S. DISTRICT COURT
N.D. OF ALABAMA

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

UNITED STATES OF AMERICA )
)
v. ) 5:23-CR-00087-MHH-HNJ
)
JENNIFER CORINNE SCOGGINS )

GOVERNMENT’S SENTENCING MEMORANDUM AND OPPOSITION
TO DEFENDANT’S MOTION FOR DOWNWARD VARIANCE
The United States opposes the Defendant’s Motion for a Downward

Variance, Dkt. No. 33, and requests a 21-month custodial sentence because it is

sufficient, but not greater than necessary, to reflect the seriousness of the offense,

promote respect for the law, provide just punishment, and afford adequate

deterrence.

I. FACTUAL AND PROCEDURAL BACKGROUND

During the span of several months in 2021, the Defendant conspired with her

husband to fraudulently obtain Paycheck Protection Program (PPP) loans totaling

more than $1.14 million. See generally PSR ¶¶ 12-25. The Defendant submitted

several PPP loan applications replete with material misrepresentations and supported

by fraudulent documentation, including fake tax records, payroll documents, and

bank statements. Id. ¶¶ 18-25. The Defendant did not spend the PPP loan proceeds

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Case 5:23-cr-00087-MHH-HNJ Document 34 Filed 04/18/24 Page 2 of 8

to retain employees during the COVID-19 pandemic, but, rather, spent the proceeds

on a home, automobiles, family vacations, and personal expenses. Id. ¶ 25.

As a result of this conduct, the Defendant and her husband, John David

Scoggins, were charged in a five-count Indictment with conspiracy to commit wire

fraud in violation of 18 U.S.C. § 1349 and substantive wire fraud in violation of 18

U.S.C. § 1343. Id. ¶¶ 1-6. The Defendant pleaded guilty as charged to Count 1 of

the Indictment and the government agreed to dismiss the remaining counts. Id. ¶¶

8, 73. The parties stipulated for the purposes of sentencing that the total loss amount

was greater than $550,000 but less than $1,500,000. Id. ¶ 31.

II. SENTENCING RECOMMENDATION

A. The Calculation of the Defendant’s Guidelines Range

Although the guidelines are advisory, they remain “the starting point and the

initial benchmark” in determining the sentence that would be “sufficient, but not

greater than necessary, to comply with the purposes set forth in” 18 U.S.C.

§ 3553(a). Gall v. United States, 552 U.S. 38, 49 (2007). The guidelines reflect the

Sentencing Commission’s examination of “tens of thousands of sentences” over

many years, and they “seek to embody the Section 3553(a) considerations, both in

principle and in practice.” Rita v. United States, 551 U.S. 338, 349 (2007). It is

therefore “fair to assume that the Guidelines, insofar as practicable, reflect a rough

approximation of sentences that might achieve” those statutory goals. Id.

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Case 5:23-cr-00087-MHH-HNJ Document 34 Filed 04/18/24 Page 3 of 8

Here, the PSR calculates the Defendant’s total offense level as follows:

• The Sentencing Guideline for 18 U.S.C. § 1349 is U.S.S.G. § 2B1.1. PSR
¶ 30. Pursuant to § 2B1.1(a)(1), because of the twenty-year statutory
maximum, the base offense level is 7. Id.

• Pursuant to U.S.S.G. § 2B1.1(b)(1)(F) because the loss exceeded $550,000
but did not exceed $1,500,000, the offense level is increased by 14 levels.
Id. ¶ 31.

• Pursuant to §§ 3E1.1(a)-(b) because the defendant has demonstrated
acceptance of responsibility for the offense and timely assisted authorities
in the investigation or prosecution of her own misconduct, the offense level
is decreased by 3 levels. Id. ¶¶ 37-38.

• Pursuant to U.S.S.G. §§ 4C1.1(a) and (b) because the defendant is a Zero-
Point Offender, the offense level is reduced by two levels. Id. ¶ 39.

Probation determined her total offense level is 16, id. ¶ 40, her criminal history

category is I, id. ¶ 45, and therefore her advisory guidelines sentencing range is

between 21 and 27 months within Zone D of the Sentencing Table. Id. ¶ 72.

B. Objections to the PSR

Neither party objected to the PSR.

C. The Recommended Sentence is Fair and Reasonable

A custodial sentence of 21 months is appropriate and would meet the

objectives set forth in 18 U.S.C. § 3553(a), particularly given the nature and

circumstances of the Defendant’s crime; the need to reflect the seriousness of the

offense, to promote respect for the law, and to provide just punishment; and the need

to afford adequate deterrence. 18 U.S.C. § 3553(a)(1), (2)(A)-(B).
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Case 5:23-cr-00087-MHH-HNJ Document 34 Filed 04/18/24 Page 4 of 8

First, the nature and circumstances of the Defendant’s crimes support a

custodial sentence. See 18 U.S.C. § 3553(a)(1). Though the Defendant is not being

sentenced for a crime of violence, economic crimes, like those at issue here, are just

as serious as violent crimes and drug offenses. Thus, the Sentencing Guidelines

should not be ignored or discounted just because the Defendant is being sentenced

for what is typically referred to as a “white-collar” crime. The Defendant’s conduct

is particularly pernicious because she purposefully defrauded a government program

designed to aid struggling small businesses and prevent countless Americans from

losing their jobs and livelihoods due to the pandemic. Such egregious conduct, and

the greed demonstrated by the Defendant, support the government’s recommended

sentence.

Second, a 21-month custodial sentence will “reflect the seriousness of the

offense, [] promote respect for the law, and [] provide just punishment.” 18 U.S.C.

§ 3553(a)(2)(A). The Defendant’s conduct demonstrated a disregard for the law and

a fundamental failure to appreciate the purpose of the PPP loans designed to aid

legitimate small businesses suffering financial harm because of the COVID-19

pandemic. The seriousness of the offense is reflected in the scale and audacity of

the fraud. The Defendant did not simply apply for a fraudulent PPP loan in her own

name, but rather concocted a scheme to create multiple, fictitious business entities

that claimed to employ dozens of people who, in fact, did not exist. See generally

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Case 5:23-cr-00087-MHH-HNJ Document 34 Filed 04/18/24 Page 5 of 8

PSR ¶¶ 18-25.

For instance, the Defendant submitted a PPP loan application in the name of

River Peach Apparel claiming to employ 11 people at an average monthly payroll of

$83,017. Id. ¶ 23. The Defendant supported this lie with fraudulent IRS Form 941s

(“Employer’s Quarterly Federal Tax Return) she never filed, payroll records for non-

existent employees, and false customer shipping records with U.S. Postal Service

tracking numbers resolving to different destinations than listed. Id. The Defendant

scaled this scheme and ultimately defrauded taxpayers of more than $1.14 million.

The sheer volume of the Defendant’s fraud belies her argument that due to the

pandemic she “became deeply afraid and desperate to secure the safety and

wellbeing of her family through those uncertain times.” Dkt. No. 33 at 4. Securing

the wellbeing of one’s family is a far cry from using PPP loans to buy new cars and

pay for family vacations.

Third, the recommended sentence is necessary to promote deterrence. See 18

U.S.C. § 3553(a)(2)(B). As the Eleventh Circuit recently explained, “Congress, the

United States Sentencing Commission, and this Court have all decided that general

deterrence is a critical factor that must be considered and should play a role in

sentencing defendants, including those who wear white collars . . . .” United States

v. Howard, 28 F.4th 180, 208 (11th Cir. 2022) (citations omitted). Indeed, this §

3553(a) factor is particularly important in cases like this one. That is “[b]ecause

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economic and fraud-based crimes are more rational, cool, and calculated than sudden

crimes of passion or opportunity,” which makes them “prime candidates for general

deterrence.” United States v. Martin, 455 F.3d 1227, 1240 (11th Cir. 2006) (internal

marks and citations omitted). “White collar criminals often calculate the financial

gain and risk of loss of their crimes, and an overly lenient sentence sends the message

that would-be white-collar criminals stand to lose little more than a portion of their

ill-gotten gains and practically none of their liberty.” Howard, 28 F.4th at 209

(internal marks and citations omitted).

COVID-19 pandemic fraud, whether in the form of PPP loans, increased

unemployment insurance benefits, or other government programs, must be

sentenced with an eye toward deterring such criminal acts in the future. It is widely

reported that pandemic stimulus programs resulted in unprecedented fraud and

billions of dollars in estimated loss. See e.g., Justice Department Reports More than

$8 Billion in Alleged Fraud Tied to Federal Coronavirus Aid Programs, THE

WASHINGTON POST (Mar. 10, 2022) (available at

https://www.washingtonpost.com/us-policy/2022/03/10/justice-department-

coronavirus-aid-fraud/). Rigorous sentences for COVID-19 program fraudsters will

deter crimes against such programs during America’s next pandemic or equivalent

disaster.

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Case 5:23-cr-00087-MHH-HNJ Document 34 Filed 04/18/24 Page 7 of 8

D. A Downward Variance is Not Warranted

The Defendant seeks a custodial sentence of 12 months plus one day, an

approximately 43 percent departure from the government’s low-end

recommendation. See Dkt. No. 33 at 4-5. A downward variance is not warranted

here for the reasons stated above. Moreover, to the extent the Defendant is asking

the Court to consider her acceptance of responsibility or “her lack of prior criminal

history” as justifications for the variance, id., Probation already applied three- and

two-level reductions for acceptance of responsibility and Zero-Point Offender status

respectively. PSR ¶¶ 37-39.

III. CONCLUSION

The Defendant’s crimes were serious. The government recommends a

custodial sentence of 21 months and opposes the Defendant’s Motion for a

Downward Variance.

Dated: April 18, 2024
Birmingham, Alabama

Respectfully submitted,

PRIM F. ESCALONA
United States Attorney
JONATHAN Digitally signed by JONATHAN
HARRINGTON
By: HARRINGTON Date: 2024.04.18 15:37:02 -05'00'

Jonathan “Jack” Harrington
Assistant United States Attorney
Tel: (205) 244-2234

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Case 5:23-cr-00087-MHH-HNJ Document 34 Filed 04/18/24 Page 8 of 8

CERTIFICATE OF SERVICE

I certify that on April 18, 2024, I filed a copy of the above pleading

electronically using CM/ECF, which caused a copy to be sent to counsel of record.

JONATHAN Digitally signed by
JONATHAN HARRINGTON

HARRINGTON Date: 2024.04.18 15:37:46
-05'00'

Jonathan “Jack” Harrington
Assistant United States Attorney
Tel: (205) 244-2234

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