Hallas Sentencing Memorandum

UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA ::

v. : CRIMINAL NO.: 11-299 (EGS):

THEODOROS N. HALLAS, ::

Defendant. :

GOVERNMENT'S MOTION FOR SECTION 5K1.1 DOWNWARDDEPARTURE AND MEMORANDUM IN AID OF SENTENCING

The United States of America, by and through its attorney, the United States Attorney for

the District of Columbia, hereby submits this motion for downward departure pursuant to Section

5K1.1 of the United States Sentencing Guidelines (“USSG” or “Guidelines”) and memorandum in

aid of sentencing concerning the defendant, Theodoros N. Hallas (“Hallas”). The Pre-Sentence

Report (“PSR”) calculated the defendant’s total offense level under the Guidelines as a 19 (30-37

months). See PSR at p. 10, ¶ 46. The government agrees with the PSR that the defendant’s total

offense level under the Guidelines is 19. Although the defendant retained the right as part of the

plea agreement to argue for a total offense level under the Guidelines of 17 (24-30 months), the

government understands from discussions with the defendant’s counsel that the defendant agrees

the total offense level should be 19 (30-37 months).1

SUMMARY OF THE GOVERNMENT’S SENTENCING RECOMMENDATION

The government submits that a sentence at an offense level 19 (pre-departure) is reasonable

in light of the seriousness of the offense, the need to specifically deter the defendant, and the need

1 On September 6, 2012, the Court granted the parties’ consent motion to extendthe time for filing the parties’ memoranda of law in aid of sentencing. As stated in the consentmotion, the parties requested the additional time to attempt to narrow the issues at sentencing. As a result of the additional time, the parties were able to agree on the total offense level.

Case 1:11-cr-00299-EGS Document 19 Filed 10/19/12 of 17

to afford adequate general deterrence. The defendant engaged in a scheme to falsify past

performance references to bolster the qualifications of both Nova Datacom, LLC (“Nova Datacom”),

the defendant’s former employer, and MED Trends, Inc. (“MED Trends”), the employer of his

former colleague, Rajesh Malik (“Malik”). The false references corrupted the government

contracting process and enabled Nova Datacom and MED Trends to take government contracts away

from qualified 8(a) small disadvantaged businesses. Although Nova Datacom and MED Trends

performed the contracts that they fraudulently obtained, the false past performance references were

just one play out of a playbook used by both criminal enterprises masquerading as legitimate federal

contractors to corruptly game the federal procurement process.

Since being confronted with his criminal conduct in December 2010, however, the defendant

has made some amends for his criminal conduct. Although the defendant’s cooperation got off to

a shaky start, it ended up being highly effective. In December 2010, the defendant became the first

individual to cooperate in the investigation of MED Trends, which had begun in mid-2009. The

defendant interviewed with law enforcement personnel and identified contracts fraudulently

obtained by MED Trends through false past performance references. His cooperation included

covert recordings of Malik, the former Executive Vice President of MED Trends, and led to Malik’s

indictment.2

2 In September 2011, a grand jury in the District of Columbia returned a four-countIndictment against Malik, charging him with conspiracy to commit false statements, wire fraud,and mail fraud, in violation of 18 U.S.C. § 371, false statements, in violation of 18 U.S.C. §1001, wire fraud, in violation of 18 U.S.C. § 1343, and mail fraud, in violation of 18 U.S.C. §1341. See United States v. Rajesh Kumar Malik, 11-cr-0268 (filed Sept. 12, 2011). Malik isbelieved to be living in India.

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During his initial efforts to cooperate against Malik, it became clear that Hallas had used

false references to grow Nova Datacom’s government contracting business. Once confronted with

that information, Hallas began to cooperate against others at Nova Datacom, including Alex Cho

(“Cho”), Nova Datacom’s Chief Technology Officer. The defendant’s cooperation included covert

recordings of Cho. As a result of that cooperation, Cho subsequently divulged information to the

government that led to the investigation and prosecution of an historically large bribery, kickback,

and bid steering scheme.3

Based on Hallas’s cooperation, the government recommends a five-level downward

departure under Section 5K1.1 of the Guidelines, which results in a total offense level of 14 (15-21

months). The government specifically recommends a sentence of 15 months imprisonment and three

years of supervised release.

FACTUAL BACKGROUND

On October 13, 2011, the defendant pleaded guilty to a one-count Information, which

charged conspiracy to commit wire fraud, in violation of 18 U.S.C. § 371. In the Statement of

Offense, which the defendant signed as part of his plea agreement, the parties agreed that from

November 1, 2007 through December 30, 2010, the defendant was the Executive Vice President for

Operations of Nova Datacom. Nova Datacom was a provider of information assurance and security

services to federal agencies and commercial companies. Nova Datacom maintained its corporate

headquarters in Chantilly, Virginia.

3 On September 20, 2011, Cho pleaded guilty to a two-count Information, whichcharged conspiracy to commit bribery, money laundering, and wire fraud, in violation of 18U.S.C. § 371 (Count One), and bribery of a public official, in violation of 18 U.S.C. § 201(Count Two). See United States v. Young N. Cho, a/k/a Alex N. Cho, 11-cr-0276 (EGS). Cho’ssentencing is scheduled for December 4, 2012.

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The criminal activity that the defendant chose to engage in began with his association with

Malik. Hallas met Malik in the 1990s when they shared an office while working together for a short

period of time at an information technology company. After Hallas and Malik left the company,

they remained in contact with each other.

Malik went on to become the Executive Vice President of MED Trends. MED Trends was

a provider of information technology equipment and services to federal agencies. MED Trends

submitted written responses to solicitations from federal agencies to provide services and equipment.

As part of those responses, MED Trends provided past performance references and evaluations from

corporate entities that purportedly had contractual relationships with MED Trends.

Hallas agreed to provide Malik with false past performance references and evaluations to

burnish the qualifications of MED Trends to perform federal contracts. Hallas agreed to allow

Malik to represent falsely to federal agencies that Hallas’s employers, including eventually Nova

Datacom, had contractual relationships with MED Trends. Malik arranged for Hallas to provide

false information to federal agencies in the event the agencies contacted Hallas to verify the false

information provided to the agencies by Malik on behalf of MED Trends. This fraudulent activity

allowed Malik to grow the federal contracting business for MED Trends.4

4 As part of the Statement of Offense, Hallas agreed that in November 2009, asdirected by Malik, Hallas emailed to Malik a false past performance evaluation for MED Trendsaddressed to the United States Department of Labor in Washington, D.C. The evaluation falselyrepresented that MED Trends had provided “Excellent” and “Good” services to Nova Datacomas part of a six-year, $5,384,734.20 contract. Hallas and Malik knew that MED Trends hadprovided no such services to Nova Datacom. Based, in part, on that false past performancereference, MED Trends won the solicitation from the Department of Labor in 2010 for a contractvalued potentially, with all option years, of over $20 million.

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Upon joining Nova Datacom in November 2007, Hallas employed a similar strategy of using

Malik and others to provide false past performance references to burnish the qualifications of Nova

Datacom to perform federal contracts.5 Malik agreed to allow Hallas to represent falsely to federal

agencies that MED Trends had contractual relationships with Nova Datacom. Hallas and other

agents and employees of Nova Datacom arranged for the Nova Datacom references to provide false

information to federal agencies in the event the agencies contacted the references to verify the

information provided by the references to the agencies. This fraudulent activity allowed Hallas to

grow the federal contracting business for Nova Datacom, including by giving Nova Datacom access

to a GSA Multiple Awards Schedule.

In December 2007 and March 2008, Nova Datacom submitted false pricing information to

the United States General Services Administration (“GSA”) on labor categories that Nova Datacom

charged and sought to charge federal agencies for contracts awarded to Nova Datacom through a

GSA multiple awards schedule. The proposed labor rates purported to reflect discounts off the best

customer rate offered by Nova Datacom to three Nova Datacom references. Hallas and other Nova

Datacom representatives caused Nova Datacom to submit the false pricing information to the GSA.

ARGUMENT

I. The defendant provided substantial assistance in the investigation and prosecution ofothers.

The government moves for a downward departure under Section 5K1.1 of the Guidelines.

The defendant provided substantial assistance to the government during its investigation and

5 In October 2007, the United States Small Business Administration (“SBA”)certified Nova Datacom as an 8(a) small disadvantaged business. Cho has admitted as part of hisplea agreement to providing false information to the SBA to obtain Nova Datacom’s certificationas an 8(a) small disadvantaged business.

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prosecution of other individuals involved in the scheme. The defendant has met with the criminal

investigators and prosecutors numerous times. The defendant began to meet with investigators and

prosecutors on December 16, 2010. The initial meeting did not go well. Although the defendant

provided helpful information in some areas, he was untruthful in several others. In particular, the

defendant explained conversations that he had with Malik concerning the false past performance

references used by Malik to assist MED Trends. The defendant also provided documents reflecting

communications between Malik and him concerning the false past performance references.6

During the initial interview, however, the defendant was untruthful concerning his own

involvement in the false past performance scheme. For instance, during the initial meeting, the

defendant insisted that he had not received anything from Malik in return for the defendant

providing false references to MED Trends to help Malik grow MED Trends’s business. Near the

end of the interview on December 16, 2010, the defendant made a consensual telephone recording

with Malik. The telephone conversation between Hallas and Malik revealed that Malik had also

provided false past performance references to Hallas for Hallas to use to grow Nova Datacom’s

business.

Once Hallas confirmed to investigators that Hallas had employed similarly fraudulent

practices at Nova Datacom, Hallas began to cooperate against others at Nova Datacom, including

Cho. During the subsequent debriefings, the defendant disclosed that others inside and outside Nova

Datacom used false past performance references to win government contracts for Nova Datacom.

As part of that cooperation, the defendant agreed to covertly record meetings with Cho.

6 As part of his cooperation, the defendant also provided information to the CivilDivision of the United States Attorney’s Office for the District of Maryland.

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Sometimes, even for a cooperator, it is better to be lucky than good. In one instance of his

cooperation with the criminal authorities, for example, the defendant’s behavior during a secretly

recorded meeting with Cho was so awkward that Cho reportedly expressed to another co-

conspirator, Thomas Kwon, that the defendant must be cooperating with the authorities.7 Cho’s

(correct) perception that the defendant was cooperating with law enforcement authorities led, in part,

to Cho approaching law enforcement authorities to divulge Cho’s involvement in a multi-million

dollar bribery, kickback, and bid steering scheme.

Based on this substantial assistance, the government recommends a five-level downward

departure, resulting in a total adjusted offense level of 14 (15-21 months).

II. Based on the sentencing factors in 18 U.S.C. § 3553(a), a sentence within the StipulatedOffense Level is reasonable.

A. The applicable advisory Guidelines range should be 30-37 months.

The Supreme Court has declared that, in terms of determining an appropriate sentence, “[a]s

a matter of administration and to secure nationwide consistency, the Guidelines should be the

starting point and the initial benchmark.” Gall v. United States, 552 U.S. 38, 49 (2007) (“a district

court should begin all sentencing proceedings by correctly calculating the applicable Guidelines

range”). Although advisory, the Guidelines assure some measure of uniformity in sentencing,

7 Kwon pleaded guilty to bribery, conspiracy to commit bank fraud, and failure tofile a tax return on September 26, 2012. See United States v. Oh Sung Kwon, a/k/a ThomasKwon, 12-cr-181 (EGS). In his Statement of Offense, Kwon admitted that Cho told Kwon thatCho intended to meet with Hallas in February 2011 to obtain a status report from Hallas on thecriminal investigation. Following Cho’s meeting with Hallas, according to Kwon, Cho sent atext message to Kwon in Korean that stated, in substance, “I’m fucked.” Kwon understood fromCho’s message that Hallas was cooperating with the criminal investigation and Hallas’scooperation would implicate Cho.

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fulfilling a key Congressional goal in adopting the Sentencing Reform Act of 1984. Reference to

the Guidelines, while carefully considering the factors set forth in 18 U.S.C. § 3553(a) particularly

relevant to an individual defendant, minimizes the disfavored result of basing sentences on the luck

of the draw in judicial assignments. Therefore, the Supreme Court has held that “district courts must

begin their analysis with the Guidelines and remain cognizant of them throughout the sentencing

process.” Gall, 552 U.S. at 50 n.6.

1. The parties’ stipulated Guidelines range is between 24-37 months.

Here, the parties stipulated in the plea agreement to a maximum Total Adjusted Offense

Level of 19, with an attendant range of 30-37 months’ imprisonment, based on the following:

2B1.1(a)(1) Base Offense Level 6

2B1.1(b)(1)(G) or (H) Loss more than $200,000.00but less than $1,000,000.00 12-14

3B1.1(c) Aggravating Role (Leader/Manager/Supervisor) 2

3E1.1(a) and (b) Acceptance (3)

Total: 17-19

In the plea agreement, the defendant reserved the right to argue that the loss from the offense

was more than $200,000 but less than $400,000. The government, on the other hand, maintained

that the loss was more than $400,000 but less than $1,000,000. The government understands that

the defendant will not challenge the government’s position that the loss was more than $400,000 but

less than $1,000,000. As a result, the defendant’s offense level total with acceptance of

responsibility (pre-departure) is 19 (30-37 months).

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2. The Probation Office’s proposed Guidelines range is 30-37 months.

The Probation Office determined that the defendant’s total offense level was 19. See PSR

at p. 17, ¶ 92. The Probation Office, however, did not have the benefit of the government’s

reasoning for the proposed loss amount.

3. The loss amount is more than $400,000 but less than $1,000,000.

In general, the loss calculation for wire fraud, which is the underlying offense of conviction

here, is the greater of either the intended loss or the actual loss. Here, there was an intended and an

actual loss. The loss is the result of the following two factors. First, Nova Datacom obtained

contracts based on GSA’s decision to award Nova Datacom access to a GSA Multiple Awards

Schedule. Nova Datacom, however, was not qualified as a legitimate 8(a) small disadvantaged

business to obtain access to the schedule. In addition, the prices that Nova Datacom charged on the

GSA contracts that it obtained were fictitious because of the false pricing information that the

defendant and other Nova Datacom Representatives submitted to GSA. It is difficult to determine,

however, if the false pricing information resulted in a loss to the government.

Second, MED Trends obtained government contracts as a result of the defendant’s agreement

to submit false past performance references to burnish MED Trends’s qualifications as a government

contractor. MED Trends, however, was not qualified as a legitimate service-disabled veteran-owned

small business concern to obtain the awards.

To arrive at the stipulated loss number under the Guidelines, the government used the fact

that Nova Datacom received at least $646,149.26 in gross income as a result of contracts for services

won by Nova Datacom through the GSA Multiple Awards Schedule. As stated above, Nova

Datacom obtained access to the GSA Multiple Awards Schedule as a result of the defendant and

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other Nova Datacom representatives submitting (1) false information to the SBA to obtain status as

an 8(a) small disadvantaged business, which was a prerequisite to apply for the GSA Multiple

Awards Schedule; (2) false past performance references to the GSA to obtain access to the GSA

Multiple Awards Schedule, which allowed Nova Datacom to obtain the awards, and (3) false pricing

information to the GSA concerning the prices that Nova Datacom charged for certain labor

categories on contracts won by Nova Datacom through the GSA Multiple Awards Schedule.

Because Nova Datacom obtained the right to compete for the contracts on the GSA Multiple

Awards Schedule as a result of its fraudulent status as an 8(a) small disadvantaged business, the

Guidelines provide that the loss should be the entire amount of the contracts. See U.S.S.G. Section

2B1.1 Application Note 3(F)(ii) (“In a case involving government benefits (e.g., grants, loans,

entitlement program payments), loss shall be considered to be not less than the value of the benefits

obtained by unintended recipients or diverted to unintended uses, as the case may be.”).8 Because

an 8(a) small disadvantaged business is a type of government benefit program, the full amount of

the contract awarded, whether the contract was performed or not, may be considered funds diverted

either from those whom it was intended to benefit or to those whom it was not.9 The reasoning

underlying these cases is as follows:

8 As stated above, Alex Cho admitted as part of his offenses of conviction thatNova Datacom fraudulently obtained its status as an 8(a) disadvantaged small business concern.

9 See United States v. Maxwell, 579 F.3d 1282, 1305-07 (11th Cir. 2009); UnitedStates v. Tulio, 263 F. App'x 258, 263 (3d Cir. 2008); United States v. Leahy, 464 F.3d 773,789-90 (7th Cir. 2006); United States v. Bros. Constr. Co. of Ohio, Inc., 219 F.3d 300, 317-18(4th Cir. 2000); United States v. Campbell, Nos. 1:CR-08-007, 1:CR-08-129, 1:CR-08-318,1:CR-08-465, 2010 WL 2650541 (M.D. Pa. July 1, 2010); see also United States v. Benit, No.09-14263, 2010 WL 2992402 (E.D. Mich. July 27, 2010) (discussing as an alternative theory in28 U.S.C. § 2255 case); United States v. Duff, 371 F. Supp. 2d 959, 962 & n.1 (N.D. Ill. 2005).

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! A government program that sets aside contracts for businesses owned by minorityor other specific individuals (disadvantaged business enterprises (“DBE”)) is agovernment entitlement program akin to affirmative action;

! A government entitlement program is a government benefit;

! Consequently, Application Note 3(F)(ii) to U.S.S.G. § 2B1.1(b)(1) applies to DBEfraud;

! Under Note 3(F)(ii), the entire amount of the funds diverted from the DBE programor to non-DBE enterprises (generally, the amount of the contract(s) awarded) is theloss for purposes of § 2B1.1(b)(1);

! Application Note 2(E)(I), which credits services rendered to the loss amount, isinapplicable because the entity that did the work was not a DBE, no DBE wasgranted or paid for the service rendered, and because the work was completed, noDBE could receive those funds, see Campbell, 2010 WL 2650541, at *4.

As a result, to establish the loss amount here, the government recommends that the Court use

the $646,149.26 that Nova Datacom obtained through contracts for services on the GSA Multiple

Awards Schedule. As discussed above, this entire amount may be treated as loss under the

Guidelines under Note 3(F)(ii) because the entire amount of the funds diverted from the DBE

program or to non-DBE enterprises is the loss for purposes of § 2B1.1(b)(1). As a result, the loss

amount under the Guidelines is more than $400,000 but less than $1,000,000.10

10 The government did not include in the stipulated loss amount an additional$883,815.30 in contract funds fraudulently obtained by Nova Datacom through contracts forproducts (equipment) on the GSA Multiple Awards Schedule. In addition, the government didnot include in the stipulated loss amount the losses attributable to the government contractsfraudulently obtained by MED Trends as a result of the defendant’s fraudulent conduct. According to the government’s evidence, in addition to providing false past performancereferences, MED Trends submitted false documents to the SBA to retain its status as a SDVOsmall business concern. The entire amount of the contracts obtained by MED Trends, therefore,could be treated as loss under the Guidelines under Note 3(F)(ii) because the entire amount ofthe funds diverted from the DBE program or to non-DBE enterprises is the loss for purposes of §2B1.1(b)(1).

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B. The nature and circumstances of the offense support a within-Guidelinessentence.

The nature and circumstances of the offense demonstrate that a Guidelines sentence at an

offense level 19 (pre-departure) is reasonable in light of the circumstances of the offense of

conviction. The defendant was involved in multiple forms of government procurement fraud. The

defendant initially helped his friend, Malik, to fraudulently obtain government contracts for Malik’s

company, MED Trends, by providing false past performance references to bolster MED Trends’s

qualifications as a government contractor. As part of that fraud scheme, the defendant agreed to lie

to federal agencies in the event that they contacted him to verify the references provided by MED

Trends to the agencies. After he moved to Nova Datacom in November 2007, the defendant

employed a similar strategy by submitting false past performance references to bolster the

qualifications of Nova Datacom to perform federal contracts. While at Nova Datacom, the

defendant knowingly and intentionally submitted multiple past performance references to federal

agencies to win contracts for Nova Datacom. In the process, the defendant also submitted false

pricing information to the GSA. This conduct falls squarely within the heartland of the Guidelines

concerning conspiracy and wire fraud.

C. The history and characteristics of the defendant support a within-Guidelinessentence.

The history and characteristics of the defendant demonstrate that a Guidelines sentence at

an offense level 19 (pre-departure) is reasonable. The defendant has no one to blame for his

criminal conduct but himself. There is nothing in the defendant’s background as a son, brother,

husband, or father that appears to have triggered his criminal conduct. He appears to have led a

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normal childhood, obtained a college degree, and worked his way from lower-level jobs after college

to a high-level decision making position at Nova Datacom.

There apparently was also nothing in the defendant’s background that could have led one to

predict that he would engage in such anti-social conduct. The defendant has no prior criminal

history.

But make no mistake: This defendant has engaged in seriously anti-social conduct. The anti-

social conduct includes the defendant’s participation in schemes to submit false materials to federal

agencies to corrupt the federal procurement process for over four years. The e-mails between the

defendant and Malik in which Malik requests the defendant’s assistance in the scheme, and the

defendant eagerly agrees to participate, evidence a casual indifference to the cheating inherent in

their scheme. The defendant’s conduct with MED Trends alone merits a term of imprisonment

consistent with a total offense level 19.

The defendant organized the same fraud scheme when he joined Nova Datacom in November

2007. Nova Datacom was the type of enterprise in which a person with the defendant’s character

flaw could prosper. Having already fraudulently obtained its status as an 8(a) small disadvantaged

business by the time of the defendant’s arrival, the principals at Nova Datacom embraced the

defendant’s business plan to grow Nova Datacom’s contracting business by using false past

performance references. While at Nova Datacom, the defendant submitted multiple false past

performance references to federal agencies to help Nova Datacom win hundreds of thousands of

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dollars in government contracts. The defendant’s conduct at Nova Datacom also merits a term of

imprisonment consistent with a total offense level 19.11

D. The need for the sentence imposed (1) to reflect the seriousness of the offense,to promote respect for the law, and to provide just punishment for the offense,and (2) to afford adequate deterrence support a within-Guidelines sentence.

Here, a Guidelines sentence at an offense level 19 (pre-departure) is also reasonable in light

of the need for the sentence imposed to reflect the seriousness of the offense, provide just

punishment for the offense, and to afford adequate general deterrence. For over four years, the

defendant participated in fraud on the government by agreeing to submit false past performance

references to assist MED Trends and, later, to submit false past performance references to assist

Nova Datacom. The amounts of the contracts fraudulently obtained were on an intensifying upward

trajectory, as evidenced by MED Trends fraudulently obtaining a contract from the Department of

Labor valued at potentially in excess of $20 million.12 The Guidelines range of 30-37 months

reflects the seriousness of the schemes and provides just punishment for those offenses.

For similar reasons, the need to deter the defendant and others from engaging in similar

criminal conduct supports the reasonableness of a Guidelines range of 30-37 months (pre-departure).

The enormous amount of money spent annually on federal government contracts provides a strong

motive for criminals to infiltrate and exploit the procurement process. Although the responsible

11 The government has not obtained sufficient information to include as relevantconduct of the defendant the historically large bribery, kickback, and bid-rigging scheme thattook place at Nova Datacom while the defendant was its Executive Vice President of Operations. The defendant has specifically denied being aware of the larger scheme. Nevertheless, there isno doubt that the defendant was part of a corporate culture at Nova Datacom in which fraud onthe government was an accepted way to grow the business and enrich the officers.

12 According to the Department of Labor, MED Trends has received over $9 millionin payments through the contract.

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agencies have clear obligations to protect the integrity of the process, even the most vigilant

agencies are susceptible to abuse, particularly when the corrupt government contractors, such as

MED Trends and Nova Datacom here, conspire to corrupt the process. In these instances, the

criminal justice system can play an important role in sending a strong message to other contractors

that the criminal law will deal harshly with those who corrupt the federal contracting system on such

an intentional and elaborate scale.

E. The kinds of sentences available.

The maximum statutory term of imprisonment here is five years. The Court may also impose

a term of supervised release of not more than three years. The Court may impose a fine pursuant

to 18 U.S.C. § 3571(b) of the greater of: (1) $250,000 pursuant to 18 U.S.C. § 3571(b)(3); or (2)

twice the pecuniary gain or loss pursuant to 18 U.S.C. § 3571(d).

According to the PSR, the defendant does not have the ability to pay an immediate fine. See

PSR at p. 17, ¶ 90. As a result, the government does not recommend a fine. For similar reasons, the

government does not intend to seek forfeiture.

F. The sentencing range established by the Guidelines.

The government and the defendant stipulated in the plea agreement to an adjusted offense

level, with acceptance of responsibility, of 17-19 (pre-departure). As stated above, the parties agree

the total offense level is 19, the Criminal History category is I, and the resulting Guidelines range

is 30-37 months (pre-departure). In the plea agreement, the parties stipulated that the applicable fine

range under the Sentencing Guidelines for offense level 19 is $6,000-$60,000.

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G. Any pertinent policy statement issued by the United States SentencingCommission.

As stated above, the government has moved for a five-level downward departure under

Section 5K1.1 of the Guidelines.

H. The need to avoid unwarranted sentencing disparities among defendants withsimilar records.

A Guidelines sentence at an offense level 19 (pre-departure) and with a period of

incarceration of 15 months (post-departure) would be reasonable in light of the need to prevent

disparities between the defendant and defendants in similar cases. Here, based on a recommended

downward departure of 5 levels, the defendant will receive a 50% reduction in imprisonment from

the low-end of the advisory Guideline range (30 months) to the government’s recommended period

of imprisonment (15 months). Such a reduction is slightly higher than those provided to other

defendants in the related bribery, kickback, and bid steering investigation.13 The slightly higher

amount is attributable to, among other things, the defendant being the first individual to agree to

13 For Michael Alexander, the government recommended a 42% decrease (fivelevels) from the low-end of the advisory Guidelines range (108 months), resulting in the low-endof the Guidelines range after the recommended downward departure being 63 months. Thegovernment recommended a sentence of 72 months imprisonment, which fell toward the middleof Alexander’s post-departure Guidelines range, and Alexander was sentenced to 72 months. James Miller was sentenced to 70 months imprisonment, which was a 48% decrease from thelow-end of the advisory Guidelines range (135 months) to the low-end of the Guidelines rangeafter the recommended downward departure of six levels (70 months). Robert McKinney wassentenced to 33 months imprisonment, which was a 42% decrease from the low-end of theadvisory Guidelines range (57 months) to the low-end of the Guidelines range after therecommended downward departure of five levels (33 months). Harold Babb was sentenced to 87months imprisonment, which was a 36% decrease from the low-end of the advisory Guidelinesrange (135 months) to the low-end of the Guidelines range after the recommended downwarddeparture of four levels (87 months).

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cooperate in the investigation and his covert recordings of conversations and meetings, which

ultimately led to the discovery of the larger scheme.

I. Restitution.

Because the contracts that were obtained by fraud were actually performed by the

contractors, the parties agreed that restitution was not an issue here. For similar reasons, the

government has not sought forfeiture in this proceeding.

CONCLUSION

For the foregoing reasons, the government respectfully moves for a downward departure

under U.S.S.G. § 5K1.1, with a recommended downward departure of five levels, resulting in an

adjusted total offense level of 14 (15-21 months). The government recommends a sentence of 15

months and three years of supervised release.

Respectfully submitted,

RONALD C. MACHEN JR.United States AttorneyIn and For the District of Columbia

By: //ss// MICHAEL K. ATKINSONBRYAN SEELEYAssistant United States AttorneysFraud and Public Corruption Section555 4th Street, N.W.Washington, D.C. 20530(202) 252-7817 (Atkinson)(202) 252-1749 (Seeley)[email protected]@usdoj.gov

Dated: October 19, 2012

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Hallas Sentencing Memorandum

Documents

Transcript of Hallas Sentencing Memorandum