Reply to Defendant’s Motion for a Variance and Sentencing Memo, United States v. Carl Ulm, November 2, 2023

Summary

Government's reply to the defendant's motion for a variance and sentencing memorandum, filed November 2, 2023 as Entry Number 47 in United States v. Carl Ulm, Criminal No. 2:22-cr-00994-BHH, in the U.S. District Court for the District of South Carolina, Charleston Division. It states that Ulm pled guilty to Count 1 of the Indictment on July 11, 2023 under a written plea agreement. The government objects to defense counsel's references to plea discussions, citing Federal Rule of Criminal Procedure 11(c)(1) and Federal Rule of Evidence 408. It states that Ulm sold Anchor Restoration Contractors, LLC in January 2021 and then directed an employee to submit a round two PPP loan application, and it argues that the case is distinguishable from one in the Columbia Division.

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“Reply to Defendant’s Motion for a Variance and Sentencing Memo, United States v. Carl Ulm, November 2, 2023.” Original at ecf.scd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/sentencing-memorandum-usa-v-ulm-dkt-47-d04d2f20c9/, SHA-256 3b395b905ae4b0f686cdbb0838c3f390f06958320f045030241752d1b031921c.

Full text

2:22-cr-00994-BHH Date Filed 11/02/23 Entry Number 47 Page 1 of 5

IN THE DISTRICT COURT OF THE UNITED STATES
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION

UNITED STATES OF AMERICA Criminal No: 2:22-cr-00994-BHH

v.
REPLY TO DEFENDANT’S MOTION
CARL ULM FOR A VARIANCE AND SENTENCING
MEMO

On July 11, 2023, Defendant Carl Ulm pled guilty to Count 1 of the Indictment against him

pursuant to a written plea agreement. The United States submits this response to Defendant’s

sentencing memorandum in advance of Defendant’s sentencing. The purpose of this response is

to discuss the nature and circumstances of the Defendant’s offense and address how Defendant’s

conduct is very easily distinguishable from the conduct of another individual who was prosecuted

in the Columbia Division of the District of South Carolina.

I. THE NATURE AND CIRCUMSTANCES OF DEFENDANT’S OFFENSE AND
THE NEED TO AVOID UNWARRANTED DISPARITIES.

At the outset, the Government would like to address the representations defense counsel

makes in Defendant’s motion for a variance regarding certain conversations he has had with the

undersigned AUSA and her supervisor. These conversations were had during negotiations of

Defendant’s plea and after the Defendant’s plea being entered. As this Court is well aware, “[t]he

court must not participate in [plea] discussions.” Fed. R. Crim. P. 11(c)(1).1 Further, Federal Rule

of Evidence 408 governs compromise offers and negotiations and generally holds that they are

1
Federal Rule of Criminal Procedure 11(f) refers the question of whether plea discussions are
admissible to Federal Rule of Evidence 410; however, Federal Rule of Evidence 410 pertains to
statements made by a defendant during plea negotiations which is not at issue in the present case.
2:22-cr-00994-BHH Date Filed 11/02/23 Entry Number 47 Page 2 of 5

inadmissible in any proceeding. See Fed. R. Evid. 408. In Defendant’s motion for a variance, his

counsel sets forth many details about discussions between the undersigned AUSA and her

supervisor; specifically, Defendant’s counsel requested for the undersigned AUSA to consider an

11(c)(1)(C) plea and/or a recommendation for probation. Pursuant to Federal Rule of Criminal

Procedure 11(c)(1) and Federal Rule of Evidence 408, the Government believes these discussions

are inappropriate for the Court’s consideration and are also inappropriately raised because they

were discussions had during negotiations of a resolution of the Defendant’s case. 2 Although the

Government takes issue with defense counsel's characterization and interpretation of these

conversations, the Government refrains some specifically responding to the Defendant's claims

given the clear prohibitions set forth in Rules 11 and 408. When fashioning a sentence, the Court

must consider both the advisory guidelines and the 18 U.S.C. § 3553(a) factors, two of which will

be discussed below.

Nature and Circumstances of Defendant’s Offense

The Presentence Report sets forth in detail the nature and circumstances of the Defendant’s

offense. See PSR ¶¶ 1 - 17. As set forth in the PSR, Defendant owned Anchor Restoration

Contractors, LLC (“Anchor 1”) until January 2021 when he sold the company and its assets to

Randall Sizemore and his company, Anchor Restoration Construction (“Anchor 2”). Despite no

longer having an active operating business that had qualifying expenses for a PPP loan (i.e.:

payroll), Ulm directed an employee to submit a round two PPP loan application in February 2021.

2
Defendant’s counsel also represents in his motion for a variance that the undersigned AUSA
advised him that she planned to supersede if the case went to trial. The undersigned did, in fact,
make this representation because further investigation into the Defendant’s offenses after
indictment supported a money laundering charge, and it is the Government’s practice to notify
defense counsel of the likelihood of a superseding indictment in advance of trial when negotiating
in good faith.

2
2:22-cr-00994-BHH Date Filed 11/02/23 Entry Number 47 Page 3 of 5

See PSR ¶ 15. Importantly, the evidence obtained in the investigation revealed that Ulm had been

advised by his accountant that he and Anchor 1 did not qualify for the round two PPP loan. Despite

this advice, Defendant directed the employee to apply for the round two PPP loan. It is also worth

noting that Ulm agreed to these facts when read during his change of plea hearing.

When Defendant became aware that the loan had been funded, he emailed the employee

the following message: “ALL OF THIS MONEY WILL GO TO ME IT WILL NOT BE SHARED

WITH RANDALL IT WILL NOT BE APART OF ANY DEAL WE HAD.” When the employee

questioned Defendant about how he would show the loan was used for operating and payroll costs

Defendant replied as follows: “WE WILL BUT QUALIFYING WAS LAST YEAR IF YOU

HAVE ANY QUESTIONS ASK [ACCOUNTANT] WE HAVE TALKED ABOUT IT.” The

investigation has revealed that Defendant did speak to his accountant and was advised he and

Anchor 1 did not qualify for the loan. Once the loan proceeds were deposited in Anchor 1’s bank

account, Defendant directed his employee to write a check, representing a majority of the loan

funds, to a personal account of his; essentially, not only did he fraudulently apply for a loan, but

he misused proceeds of the loan by directing them to his personal bank account rather than for

qualifying PPP expenses.

As will be discussed in more detail at Defendant’s sentencing, and is described in detail in

the PSR, Defendant committed this offense after being told he was not entitled to apply for and

receive the loan and then directed that a majority of the proceeds be transferred to his personal

bank account. The Defendant abused a government program that was designed to help businesses

affected by the COVID-19 pandemic.

3
2:22-cr-00994-BHH Date Filed 11/02/23 Entry Number 47 Page 4 of 5

Need to Avoid Unwarranted Disparities

In his motion for a variance, Defendant’s counsel sets forth that it was represented to him

there was a similar case in Columbia where the Columbia AUSA also was not going to agree to

probation because both AUSAs felt that these cases needed to be prosecuted. The only similarity

between Ulm’s conduct and the conduct of the defendant charged in the Columbia is that both

individuals applied for loans under the CARES Act.3 The undersigned trusts that Defendant and

his lawyer know that all cases are evaluated based on the individual facts and circumstances of

each case and investigations and prosecutions are fluid. While Defendant and his counsel seem to

contend that Defendant entered this plea solely on the representation of a similar case in the

Columbia Division, a review of the evidence in this case clearly shows that the Defendant

committed the crime of wire fraud, and a plea was in his best interest.

Any sentence this Court chooses to impose on Defendant would not create an unwarranted

disparity because the cases are substantially distinguishable. The Columbia Division case involved

an application for an active business being operated solely by the applicant; whereas Defendant

had sold Anchor 1 and no longer had operating costs. Moreover, there is no evidence to indicate

that the defendant in the Columbia Division case was told by an accountant that he was not entitled

to the loan. The Columbia Division case was a strictly misuse of funds case – here we have a

fraudulent application and a misuse of funds. The facts are distinguishable for many reasons, and

any sentence this Court decides to impose would not create an unwarranted sentencing disparity.

3
The Government is prepared to address at sentencing arguments raised by Defendant about how
the EIDL application process is more extensive and, respectfully, disagrees with this assertion.
However, the Government believes this is irrelevant for the purposes of Defendant’s sentencing
given the nature and circumstances of his offense.
4
2:22-cr-00994-BHH Date Filed 11/02/23 Entry Number 47 Page 5 of 5

II. CONCLUSION.

For the reasons stated in this memorandum, and for reasons that will be more fully

addressed at sentencing, the Government believes the nature and circumstances of Defendant’s

offense warrant any sentence this Court chooses to impose and would not create any unwarranted

disparity.

RESPECTFULLY SUBMITTED,

ADAIR F. BOROUGHS
UNITED STATES ATTORNEY

BY: /s/ Amy Bower
Amy F. Bower (Fed. Id. 11784)
Assistant U.S. Attorney
151 Meeting Street, Suite 200
Charleston, South Carolina 29401
(843) 727-4381
Amy.Bower@usdoj.gov

Charleston, South Carolina
November 2, 2023

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