Sentencing Statement — No. 1:22-cr-00045 (Dkt. 90, D. Haw.)

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A five-page Sentencing Statement, Document 90, filed 12/05/24 by attorney John Schum for Erin V. Mazzei (02) in United States v. Mazzei, Case No. 22-CR-00045-JMS, in the U.S. District Court for the District of Hawaii, objecting to the draft presentence report (Document 88). First, it says PSR ¶ 44 wrongly adds three levels under USSG § 2B1.1(b)(17)(A) for deriving more than $1,000,000 from financial institutions: of $1,365,332.00 in PPP proceeds, $92,500 and $562,500 went to a joint account she held with her husband and $710,332 went to C. Mazzei, so she individually received less than $1,000,000. Second, PSR ¶ 45 wrongly adds two levels under § 2S1.1(b)(2)(B) because the sole object of the § 1956(h) conspiracy was a § 1957 offense. Removing four levels gives offense level 17 and, at Criminal History Category I, a range of 24-30 months rather than 37-46.

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Case 1:22-cr-00045-JMS      Document 90        Filed 12/05/24   Page 1 of 5 PageID.717



LAW OFFICE OF JOHN SCHUM
JOHN SCHUM 8525
P.O. BOX 1241
HONOLULU, HI 96807
TELEPHONE NUMBER: (808) 838-9586
Email: John@JohnSchum.com

ATTORNEY FOR THE DEFENDANT

                 IN THE UNITED STATES DISTRICT COURT

                       FOR THE DISTRICT OF HAWAII

UNITED STATES OF AMERICA,                       ) CASE NO. 22-CR-00045-JMS
                                                )
                    Plaintiff,                  ) SENTENCING STATEMENT
                                                )
       vs.                                      ) J. MICHAEL SEABRIGHT
                                                )
ERIN V. MAZZEI (02),                            )
                                                )
                    Defendant.                  )
                                                )

                          SENTENCING STATEMENT

      The Defendant, Ms. Erin V. Mazzei, by and through her counsel, John

Schum submits the following objections to Probation’s Draft Presentence Report,

Document 88 filed on November 22, 2024 (hereinafter, PSR).

                                          I.

PSR ¶ 44 Erroneously Enhances Ms. Mazzei’s Offense Level by Three Levels
          Under USSG § 2S1.1(a)(1) & USSG § 2B1.1(b)(17)(A).

      The PSR, cross-referencing USSG § 2B1.1(b)(17)(A) as required by USSG

§ 2S1.1(a)(1), applies a three-level enhancement – from offense level 21 to offense
Case 1:22-cr-00045-JMS      Document 90     Filed 12/05/24    Page 2 of 5 PageID.718



level 24 – after finding that “the defendant derived more than $1,000,000 in gross

receipts from one or more financial institutions. . . .” PSR ¶ 44. The PSR errs

applying this enhancement.

      In order for that enhancement to apply, the plain language of the guideline’s

commentary states that a defendant must have derived more than $1,000,000;

jointly derived funds do not count towards the required amount. See USSG, §

2B1.1, comment. (n.13) (“For purposes of subsection (b)(17)(A), the defendant

shall be considered to have derived more than $1,000,000 in gross receipts if the

gross receipts to the defendant individually, rather than to all participants,

exceeded $1,000,000.”) (emphasis added). As the PSR finds, of the total amount

of $1,365,332.00 in illegally-derived funds, less than $1,000,000 was solely

received by Ms. Mazzei. See PSR ¶ 22 (“Customers Bank approved the BHE PPP

loan application and wired $92,500 to Pacific Premier Bank checking account

#8237 controlled by [Mr. and Mrs.] Mazzei[], under the name of BHE, doing

business as GOTG.”) (emphasis added); PSR ¶ 23 (“Northeast Bank approved the

PPP loan, and on 04/27/2020, wired $562,500 to the Mazzeis’ Pacific Premier

Bank account #8237.”) (emphasis added); PSR ¶ 24 (“Only BOH, after approving

the PPP loan application, mailed a cashier’s check to C. Mazzei in the amount of

$710,332.”). Less than $1,000,000 was received solely by Ms. Mazzei.
Case 1:22-cr-00045-JMS      Document 90         Filed 12/05/24   Page 3 of 5 PageID.719



      Because Ms. Mazzei did not “individually” receive more than $1,000,000,

the PSR errs by adding three offense levels to her total offense level.

                                          II.

 PSR ¶ 45 Erroneously Enhances Ms. Mazzei’s Offense Level by Two Levels
                      Under USSG § 2S1.1(b)(2)(B).

      The PSR applies a two-level enhancement under USSG §2S1.1(b)(2)(B)

after finding that “the defendant was convicted under 18 USC § 1956.” PSR ¶ 45.

Although Count 3 of the indictment does charge that Ms. Mazzei violated §

1956(h) by conspiring with her husband, Christopher Mazzei, to violate § 1957

(but not conspiring to violate any “substantive” provision of § 1956), this Court

should deem Ms. Mazzei of having been “convicted” under § 1957 (the sole object

of the charged conspiracy). USSG § 2S1.1, comment. (n.3(C)). (“Subsection

(b)(2)(B) shall not apply if the defendant was convicted of a conspiracy under 18

U.S.C. § 1956(h) and the sole object of that conspiracy was to commit an offense

set forth in 18 U.S.C. § 1957.”); United States v. Tedder, 403 F.3d 836, 842-44 (7th

Cir. 2005) (Easterbook, J.) (discussing Application Note 3(C)); cf. United States v.

Ugoh, 537 Fed. App’x 126 (3d Cir. 2013) (holding that a defendant convicted

under 18 U.S.C. § 371 for conspiring to violate § 1956 should receive the two-level

enhancement under USSG § 2S1.1(b)(2)(B) because the object of the conspiracy

was a “substantive” violation of § 1956).
Case 1:22-cr-00045-JMS      Document 90     Filed 12/05/24   Page 4 of 5 PageID.720



      The Sentencing Commission clearly believes that money-laundering activity

that violates a “substantive” provision of § 1956 is more serious conduct than

money-launder activity that merely violates § 1957. See also United States v.

Acanda, 19 F.3d 616, 619 (11th Cir. 1994) (noting “the Sentencing Commission

specifically intended defendants convicted of promoting further crimes to receive

greater sentences than those defendants who did not act to maintain an ongoing

cycle of criminal activity”) (discussing the former version of § 2S1.1). Although §

1956(h) is the conspiracy provision for both § 1956 and § 1957, when that

conspiracy provision is applied solely to an object of the conspiracy that violated §

1957, the defendant in such a case should be deemed “convicted” of violating §

1957 rather than § 1956 for purposes of § 2S1.1(b)(2). The indictment and PSR

clearly show that Ms. Mazzei engaged in conduct that solely violated § 1957 rather

than any “substantive” provision of § 1956.

      Therefore, this Court should apply a one-level enhancement under §

2S1.1(b)(2)(A) rather than a two-level enhancement under § 2S1.1(b)(2)(A).


                                         III.

                           The Proper Guideline Range

      After reducing Ms. Mazzei’s total offense level by four levels – based on the

foregoing two objections – her final offense level should be 17 rather than 21.
Case 1:22-cr-00045-JMS    Document 90     Filed 12/05/24   Page 5 of 5 PageID.721



Based on a Criminal History Category I, her advisory sentencing guideline range

should be 24-30 months rather than 37-46 months (as stated in PSR ¶ 96).

      DATED: Honolulu, Hawai`i, December 5, 2024.

                                            /s/ John Schum
                                           JOHN SCHUM
                                           Attorney for Defendant 02
                                           ERIN V. MAZZEI


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