Government’s Sentencing Memorandum, United States v. Joseph Harding (N.D. Fla., August 31, 2023)

Summary

The government's sentencing memorandum in United States v. Joseph Harding, Case No. 1:22cr32-AW/MAL, in the U.S. District Court for the Northern District of Florida, filed August 31, 2023 as Document 45 by Assistant United States Attorney Justin M. Keen. It describes Harding as a businessman and former member of the Florida House of Representatives who pleaded guilty to wire fraud, money laundering and making false statements, and states that the funded Vak Shack EIDL caused a loss of $150,000 while a second application for Harding Farms was denied. The memorandum argues that general deterrence favors a guideline sentence and cites other pandemic fraud sentences. It also credits Harding's confession, full repayment to the SBA and early plea, and concludes that a reasonable variance below the guideline range is probably appropriate but that a term of prison is still necessary.

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“Government’s Sentencing Memorandum, United States v. Joseph Harding (N.D. Fla., August 31, 2023).” Original at ecf.flnd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/sentencing-memorandum-usa-v-harding-dkt-45-n-d-fla-f687af5879/, SHA-256 db8118b2f4a943af5303bc79e75a54ed58e9ac45ffe8d460c37764154e656b0f.

Full text

Case 1:22-cr-00032-AW-MAL Document 45 Filed 08/31/23 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF FLORIDA
GAINESVILLE DIVISION

UNITED STATES OF AMERICA

v. CASE NO. 1:22cr32-AW/MAL

JOSEPH HARDING
______________________________/

GOVERNMENT’S SENTENCING MEMORANDUM

Joseph Harding is a businessman and former member of the Florida House of

Representatives. As he proudly served the citizens of Florida's 22nd District,

Harding took advantage of relief programs designed to help businesses recover from

the covid-19 pandemic, bilking the federal government of $150,000. For this

conduct, Harding pleaded guilty to wire fraud (Count One), money laundering

(Count Three), and making false statements (Count Five). For the reasons explained

in this memorandum, § 3553(a) factors warrant a sentence of incarceration.

I. INTRODUCTION

The Presentence Investigation Report (“PSR”), ECF No. 42, and the

Statement of Facts, ECF No. 29, set out the details of Harding’s crimes. This Court

may rely on the Statement of Facts and the undisputed facts in the PSR to impose its

sentence. United States v. Philidor, 717 F.3d 883, 885 (11th Cir. 2013).

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II. APPLICATION OF 18 U.S.C. § 3553(A) FACTORS

After the Court calculates a defendant’s advisory guideline range, it “may

impose a more severe or more lenient sentence as long as the sentence is

reasonable.” United States v. Williams, 435 F.3d 1350, 1353 (11th Cir. 2006)

(quoting United States v. Crawford, 407 F.3d 1174, 1179 (11th Cir. 2005)). In

determining the proper sentence, this Court must weigh the factors enumerated in

§ 3553(a). These include:

(1) the nature and circumstances of the offense and the history and
characteristics of the defendant; (2) the need to reflect the seriousness
of the offense, to promote respect for the law, and to provide just
punishment for the offense; (3) the need for deterrence; (4) the need to
protect the public; (5) the need to provide the defendant with needed
educational or vocational training and medical care; (6) the kinds of
sentences available; (7) the Sentencing Guidelines range; (8) pertinent
policy statements of the Sentencing Commission; (9) the need to avoid
unwarranted sentencing disparities; and (10) the need to provide
restitution to victims.

United States v. Ochoa-Torres, 519 F. App’x 583, 584 (11th Cir. 2013). The

§ 3553(a) factors mirror the reasons traditionally recognized for imposing

sentence: (a) retribution, (b) deterrence, sometimes referred to as “general

deterrence” (the need to deter others from committing like crimes), (c)

incapacitation, sometimes referred to as “specific deterrence” (the need to prevent

the defendant from committing crime), and (d) rehabilitation. Bullington v.

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Missouri, 451 U.S. 430, 443 n.16 (1981); United States v. Godfrey, 22 F.3d 1048,

1058 (11th Cir. 1994).

In this case, the need for general deterrence is the most important factor, and

it weighs in favor of a guideline sentence. However, the Government

acknowledges that mitigating circumstances—including Harding’s genuine

remorse and exceptional acceptance of responsibility—may warrant a downward

variance.

A. The Nature and Circumstance of the Offense and the History and
Characteristics of the Defendant – 18 U.S.C. § 3553(a)(1)

1. The Offense Conduct

As the PSR and Statement of Facts lay out in detail, Harding fraudulently

applied for two SBA loans. The Vak Shack, Inc., loan was funded, resulting in the

loss of $150,000. The Harding Farms, LLC, loan was denied, but only because

Harding did not provide the SBA with sufficient business and tax documentation

(which he couldn’t do because the application information was false). See Exhibit

A at p.1 (start from bottom of page and read up). Although the pandemic-relief

funds were intended for honest business owners—to whom these funds meant the

difference between survival and financial ruin—Harding used them to pay his

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credit card balance and Shiloh Oil Company (owned by his brother-in-law, Patrick

Walsh, who himself had committed extensive pandemic-related loan fraud).1

2. The History and Characteristics of the Defendant

Harding’s family life and upbringing are set forth in the PSR. See ECF No.

36 at ¶¶ 51-66. Harding’s professional accomplishments and contributions to the

community are commendable. However, the guidelines “authorize no special

sentencing discounts on account of economic or social status.” United States v.

Kuhlman, 711 F.3d 1321, 1329 (11th Cir. 2013). Moreover, Harding’s intentional

criminal acts while serving as an elected state representative signify a betrayal of

the public’s trust. “[G]ood people can make bad decisions and they're still held

accountable for their conduct.” United States v. Vaughan, 525 F. App'x 871, 877

(10th Cir. 2013).

B. The Sentence Should Reflect the Seriousness of the Offense,
Promote Respect for the Law, Afford Adequate Deterrence to
Criminal Conduct, Protect the Public from Further Crimes of the
Defendant, and Provide Just Punishment for the Offense -
18 U.S.C. § 3553(a)(2)

1. The Seriousness of the Offense

Section 3553(a)(2)(A) embraces the concept of “just deserts,” “which carries

the need for retribution, the need to make the punishment fit the crime, and the

1
Patrick Walsh was sentenced by this Honorable Court on January 31, 2023, following his guilty
plea to wire fraud and money laundering. See NDFL case # 1:22cr00024-AW. Walsh was
sentenced by this Honorable Court to be imprisoned for 66 months.
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need not just to punish but to punish justly.” United States v. Irey, 612 F.3d 1160,

1206 (11th Cir. 2010) (en banc). This factor weighs in favor of a guideline

sentence.

Economic crimes are as serious as many other cases that come before this

Court. This is especially true when, as here, the case involves a scheme to defraud

federal government benefit programs during an unprecedented pandemic. The

Sentencing Guidelines should not be discounted simply because Harding is being

sentenced for what are typically referred to as “white-collar” crimes. That Harding

caused actual loss of only $150,000—a relatively small figure—should not

overshadow the fact that he attempted to fraudulently obtain government funds via

a separate, second false loan application.

The seriousness of the offense is exacerbated by another fact: at the time of

the false applications, Harding was a state representative. Fraud committed by

public officials, “even for relatively minor gains, impose a tremendous social cost

when finally exposed, for they weaken the public's trust and confidence in

government and breed a cynicism that only encourages more crime, more

corruption, and more wrongdoing.” United States v. Loughry, No. 2:18-CR-00134,

2019 WL 660353, at *7 (S.D.W. Va. Feb. 11, 2019). In other words, “[t]here has to

be a sense that we give to the public that we are going to safeguard the integrity of

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our system...[t]hat we will hold our public officials to a higher standard[.]” United

States v. Sampson, 898 F.3d 287, 314 (2d Cir. 2018).

In fact, the SBA-OIG estimates that the SBA disbursed over $200 billion in

potentially fraudulent COVID-19 pandemic relief funds, including EIDLs,

meaning at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed

to potentially fraudulent actors. COVID-19 Pandemic EIDL and PPP Loan Fraud

Landscape, SBA.GOV, https://www.sba.gov/document/report-23-09-covid-19-

pandemic-eidl-ppp-loan-fraud-landscape (last visited August 8, 2023). The fruits

of Harding’s fraud, albeit not an exorbitant amount compared to some other bad

actors, still contributed to “the biggest fleecing of America in American history.”

In New Oversight Role, House Republicans Target Billions Lost to Covid Relief

Fraud, NBCNEWS.COM, https://www.nbcnews.com/politics/congress/billions-

covid-loans-questionable-social-security-numbers-rcna68296 (last visited August

8, 2023).

2. General Deterrence

This Court’s sentence must also give heed to general deterrence. As the

Eleventh Circuit has explained, “general deterrence is a critical factor that must be

considered and should play a role in sentencing defendants.” United States v.

Howard, 28 F.4th 180, 208 (11th Cir. 2022). And it is especially important in white

collar cases. “The reason is that ‘economic and fraud-based crimes are more

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Case 1:22-cr-00032-AW-MAL Document 45 Filed 08/31/23 Page 7 of 12

rational, cool, and calculated than sudden crimes of passion or opportunity,’ which

makes them ‘prime candidates for general deterrence.” Id. (quoting United States

v. Kuhlman, 711 F.3d 1321, 1329 (11th Cir. 2013)). See also United States v.

Martin, 455 F.3d 1227, 1240 (11th Cir. 2006) (recognizing that “the Congress that

adopted the § 3553(a) sentencing factors emphasized the critical deterrent value of

imprisoning serious white collar criminals, even where those criminals, even where

those criminals might themselves be unlikely to commit another offense”). Indeed,

“[w]hite collar criminals ‘often calculate the financial gain and risk of loss’ of their

crimes, and 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 (quoting Martin, 455

F.3d 1240).

Although the PPP and EIDL programs are over, there is unfortunately no

shortage of people who look to take advantage of government programs, such as

disaster assistance programs, federal tax credits, or health care benefit programs. A

sentence within the guideline range would send the message to others—including

those elected to public office—that defrauding the federal government will result

in significant deprivation of liberty and not merely the inconvenience of probation.

In fashioning a reasonable sentence, this Court should keep in mind that

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“[l]eniency undermines general deterrence, and the extreme leniency of a probation

sentence undermines it extremely.” Howard, 28 F.4th at 209.

C. Avoiding Sentencing Disparities - 18 U.S.C. § 3553(a)(6)

The need to avoid unwarranted sentencing disparities also supports a

guideline sentence. Courts have imposed lengthy prison sentences in other

pandemic fraud cases. For example, the defendant in Oudomsine was sentenced to

36 months’ imprisonment for wire fraud—an upward variance from the guidelines

range of 8 to 14 months—for fraudulently obtaining an $85,000 Economic Injury

Disaster Loan (EIDL) and using the proceeds to purchase a $57,789 Pokémon

card. Oudomsine, 2023 WL 220349, at *3. In another case, a Florida couple was

sentenced to 18 months and 30 months in prison, respectively, for their

participation in a scheme to file four fraudulent PPP loan and EIDL applications

seeking more than $1.1 million. https://www.justice.gov/opa/pr/couple-who-

falsely-claimed-be-farmers-sentenced-11-million-covid-relief-fraud. Additionally,

a Colorado physician was sentenced to 30 months in prison for fraudulently

obtaining and misappropriating approximately $250,000 received from two

separate COVID-19 relief loan applications. https://www.justice.gov/opa/pr/

physician-sentenced-stealing-approximately-250k-covid-19-relief-programs. A Las

Vegas man was sentenced to 21 months in prison for filing fraudulent loan

applications seeking over $100,000 in COVID-19 relief loans. https://

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www.justice.gov/usao-nv/pr/las-vegas-man-sentenced-prison-committing-covid-

relief-fraud-while-pretrial-release.

The Government recognizes that, in terms of financial loss, Harding’s

crimes were not as egregious as some of the others noted above, or even that of his

brother-in-law. But Harding’s crimes were not an isolated occurrence; he

fraudulently submitted two separate applications for SBA EIDL funds in the names

of two different business entities. In support of the applications, Harding submitted

altered bank statements (which were nearly identical to ones submitted in support

of his brother-in-law’s fraudulent loan application other than the entity name and

address on the account and the account number). Compare Exhibit B (bank

statement that Harding submitted to the SBA) with Exhibit C (bank statement that

Patrick Walsh submitted to the SBA).

D. A Downward Variance May be Warranted2

Notwithstanding the foregoing, the Government recognizes that a downward

variance may be warranted here. During the Government’s investigation, law

enforcement spoke with Harding multiple times. Harding readily confessed to his

misconduct and provided law enforcement with information about how he ended

up committing these crimes. In doing so, Harding did not minimize his own

culpability or attempt to shirk responsibility for defrauding the SBA. Additionally,

2
Yes, you are still reading the Government’s sentencing memorandum.
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within a few weeks of his initial interview with law enforcement, Harding had

fully repaid the SBA.

“A sentence’s variance outside the guidelines range, whether upward or

downward, represents a district court’s judgment that the combined force of the

other § 3553(a) factors are entitled to greater weight than the guidelines range.

Otherwise, there would never be any variances.” United States v. Rosales-Bruno,

789 F.3d 1249, 1259 (11th Cir. 2015); see also United States v. Irey, 612 F.3d

1160, 1182 (11th Cir. 2010) (en banc) (explaining that a case falls “outside the

heartland” when “there [is] something unusual, either about the defendant or the

circumstances surrounding the crime,” that warrants a sentence outside of the

guidelines range). A district court’s decision to vary from the advisory Guidelines

may attract greatest respect when the sentencing judge finds a particular case

outside the heartland to which the Commission intends individual Guidelines to

apply. Kimbrough, 552 U.S. at 109.

Harding made poor choices when he submitted his false applications for

SBA loans. But since getting caught, Harding has done almost everything that

could be expected of a person who is facing federal felony charges. He promptly

confessed to law enforcement and paid restitution to the SBA, and he further

assisted law enforcement with their investigations. Although he declined to be

charged by information (which would have saved resources associated with the

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grand jury), Harding entered a guilty plea soon after his arraignment, enabling the

government and the Court to allocate their resources efficiently. The government

agrees that these facts could warrant a downward variance.

III. CONCLUSION

A reasonable variance below the guideline range is probably appropriate. But

a term of prison is still necessary to accomplish the §3553(a) factors and the goals

of sentencing—namely, general deterrence.

Respectfully submitted,

JASON R. COODY
United States Attorney

_________________________
JUSTIN M. KEEN
Assistant United States Attorney
Florida Bar Number: 021034
111 North Adams Street, Fourth Floor
Tallahassee, FL 32301
Justin.Keen@usdoj.gov
(850) 942-8430

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CERTIFICATE OF COMPLIANCE WITH LOCAL RULE 7.1(F)

I HEREBY CERTIFY that this memorandum complies with the type-

volume limitation of Local Rule 7.1(F) because this pleading contains

approximately 2,293 words.

________________________
JUSTIN M. KEEN
Assistant United States Attorney

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing has been

filed via the Court’s CM/ECF system on this 31th day of August, 2023, which will

send notification of such filing to all counsel of record.

________________________
JUSTIN M. KEEN
Assistant United States Attorney

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