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IN THE UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF TENNESSEE
NORTHERN DIVISION, AT KNOXVILLE, TENNESSEE
United States of America, ::
Government, ::
Vs. : CR: 3-12-17
Freddie Marshall Carson, ::
Defendant, :
Transcript of sentencing hearing before theHonorable Thomas A. Varlan on January 8, 2013.
APPEARANCES:
ON BEHALF OF THE GOVERNMENT:
Jennifer KolmanAssistant U.S. Attorney
ON BEHALF OF THE DEFENDANT:
Bobby Hutson, Jr.Assistant Federal Defender
Jolene Owen, R.P.R.800 Market Street, Suite 131
P.O. Box 2201Knoxville, Tennessee, 37901
(865) 384-6585
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COURTROOM DEPUTY: Criminal action 3:12:17,
United States of America versus Freddie Marshal Carson.
Jennifer Kolman is here on behalf of the
government. Is the government present and ready to
proceed?
MS. KOLMAN: Present and ready, Your Honor.
COURTROOM DEPUTY: Bobby Hutson is here on
behalf of the defendant. Is the defendant present and
ready to proceed?
MR. HUTSON: Present and ready, Your Honor.
THE COURT: We are here for imposition of
judgment and sentence in this case. We'll begin by
asking the defendant, Mr. Carson, to please come up to
the lecturn along with your counsel. We'll begin by
having your sworn in by the courtroom deputy.
FREDDIE M. CARSON
was first duly sworn and testified as follows:
COURTROOM DEPUTY: Would you please state and
spell your name for the record.
MR. CARSON: Freddie Marshal Carson,
F-r-e-d-d-i-e M-a-r-s-h-a-l C-a-r-s-o-n.
THE COURT: Thank you, Mr. Carson. Let me ask
you to confirm, you are represented here today by
Mr. Bobby Hutson, is that correct?
MR. CARSON: That is correct Your Honor.
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THE COURT: Mr. Hutson, you are here as counsel
for this defendant?
MR. HUTSON: That is correct, Your Honor.
THE COURT: Mr. Carson, on August 1, 2012, you
pled guilt to Count 1 of the Indictment in this case
charging you with wire fraud in violation of 18 United
States Code § 1343.
You understand the offense described in Count 1
requires a sentence of up to twenty years imprisonment,
up to three years supervised release, one to five years
probation, a $250,000 fine, restitution and a mandatory
$100 assessment?
MR. CARSON: Yes, sir, Your Honor.
THE COURT: All right. Also on August 1 you
pled guilty to Count 7 of the Indictment charging you
with money laundering in violation of 18 United States
Code § 1957.
Do you understand the offense described in
Count 7 requires a sentence of up to ten years
imprisonment, up to three years supervised release, one
to five years probation, a $250,000 fine and a mandatory
$100 assessment?
MR. CARSON: Yes, sir, Your Honor.
THE COURT: Mr. Carson, have you received and
had the opportunity to read and discuss the Presentence
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Report in this case with your attorney?
MR. CARSON: Yes, sir.
THE COURT: Mr. Hutson, have you reviewed the
Presentence Report in this case and -- have you received
the Presentence Report in this case and reviewed it with
Mr. Carson?
MR. HUTSON: Yes, Your Honor.
THE COURT: Does the defendant have any
objections to the Presentence Report?
MR. HUTSON: No objections.
THE COURT: Ms. Kolman, have you received the
Presentence Report in this case?
MS. KOLMAN: Yes, Your Honor.
THE COURT: Does the government have any
objection?
MS. KOLMAN: No, Your Honor.
THE COURT: Does the government have a motion
for third level acceptance of responsibility pursuant to
Sentencing Guidelines Section 3E1.1(b)?
MS. KOLMAN: Yes, we ask for the third point.
THE COURT: Without objection, that motion will
be granted.
The Court has before it the defendant's sealed
Sentencing Memorandum. Before we hear from the
defendant, let me first hear from the government
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regarding the subject of sentencing. Are there any
witnesses who wish to address the Court?
MS. KOLMAN: Yes, Your Honor. I would like to
present one victim to the Court, Mr. John Young. I
don't know how you would like to proceed.
THE COURT: Let's hear from any witnesses or
victims that want to testify first.
Mr. Carson, why don't you take a seat along
with Mr. Hutson. Why don't you go ahead and call the
witness who wants to testify.
MS. KOLMAN: The government would call John
Young. Would you like him to go to the witness stand or
the podium?
THE COURT: Let me think about this. He is
addressing the Court as a victim?
MS. KOLMAN: Yes, Your Honor.
THE COURT: It's really not as a witness.
MS. KOLMAN: No, Your Honor.
THE COURT: I should ask if there are any
victims who desire to address the Court pursuant to
Federal Criminal Rules of Procedure 32 and this
individual desires to. Are you aware of anyone else?
MS. KOLMAN: I have not been approached. I
don't see anyone acknowledging. No, Your Honor.
THE COURT: Your name again, sir.
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MR. YOUNG: John Young.
THE COURT: Mr. Young, if you will come up to
the podium. You can address the Court at this time.
MR. YOUNG: Your Honor, upon my first meeting
with Mr. Carson I was asked if money was not an issue,
what would you do with your life? I answered I would
use my time and talents for Christ.
Mr. Carson preyed on the trust a son has for
the advice of his father, a Christian has for the advice
of his pastor and the trust one has with lifelong
friends.
Mr. Carson has preyed on the Christian's desire
to use his time, talents and finances to advance the
cause of Christ. Mr. Carson has used these bonds of
trust and desire to gain access to my savings, the
savings of my family, of my lifelong friends and their
friends for his own deceit.
Instead of using the funds to start a Christian
business or advance the cause of Christ, he used the
funds to live lavishly in a million dollar home which he
used to show his work to prospective investors; to enjoy
frequent vacations; anniversary trips and a lifestyle of
luxury on other people's money.
Financially I have lost 70,000. I also lent my
brother 10,000 who gave an additional 50,000 to Carson,
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as there was always a need for more money to "close the
deal."
I had no more money to give so I introduced
Mr. Carson to a lifelong friend whose initial investment
was 75,000. My friend and his relationships were a new
revenue source for Carson.
Socially I have suffered. My marriage has
suffered the stress that debt brings. My wife has lost
faith in the decisions I have made for the family
waiting for Mr. Carson to move us to Nashville. I lost
four years waiting for Mr. Carson to move us and the
last three years trying to restore my wife's confidence
in me.
My children have suffered as a result of
uncertainly, not knowing if or when we would move. Two
of my children suffered the embarrassment of being
financially withdrawn from college. Family ties have
strained as debts to one another go unpaid. Friends of
a lifetime have distanced themselves because they were
told that they had lost their money because I had gone
to the authorities.
My family and friends have lost their savings.
Some have lost homes and some their marriages, as a
result of losing money to Mr. Carson. I have carried
the burden of losing my family savings. My family lost
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four years of stability, as I waited on Carson to hire
me. I also carried the fear that a lifelong friend
might be indicted along with Carson.
I worried for my family when Pastor Baker and a
close friend passed on a threat that if I went to the
authorities that terrible things would happen to me and
my family. I ended up filing a police report against my
friend in case anything happened to us.
Your Honor, it is in this arena that we seek
justice and equity. My family and I have suffered, as a
result of my dealings with Mr. Carson. I cannot regain
the lost money or lost time with my family. I
respectfully ask that you give Mr. Carson the longest
sentence that the law will allow. It would be an
injustice for victims to suffer longer than the one who
caused their suffering.
Please execute a just judgment.
Thank you.
THE COURT: All right. Thank you, Mr. Young.
Ms. Kolman, seeing no further victims that wish
to address the Court or any witnesses the parties wish
to present, then we'll hear from the government
regarding sentencing at this time.
MS. KOLMAN: All right. Your Honor, I think it
is just important to point out a few things to put what
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happened in perspective. I think a lot of times with
these white collar cases sometimes in our rush to get
justice done, we forget the pain and the stress that
these victims are under. I think Mr. Young wrapped that
up well to let the Court understand that.
As the Court knows through its Presentence
Report, we have close to 24 victims that we have agreed
to with the defendant for over a million dollars.
Your Honor, it is more than that. It was years
of deceit. It was multiple people. It was involving
multiple states. It was involving multiple
"businesses." He was given options to stop through
civil cases where he was given cease and desist orders
and chose to continue to do these things.
The worse part was that he went through the
most deep and cherished part of people, which is their
religions, and he was good at it. He had a talent. He
certainly could have been a good salesperson because
over and over again these people were asked for money
and they would do this through their trust with the
religion. He would keep on them and bond a friendship
with them and literally get every single dime out of
these people who these were their savings. These were
not necessarily well to do people.
He had victims from California, Colorado, South
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Carolina, Tennessee, North Carolina, Minnesota,
Mississippi, Texas, Wisconsin and Virginia.
He has a college education. He has a musical
talent. He has a family that he loves and four
children. As I said, throughout this theft that he did
of these people he showed that if he had chosen to go on
the right path, he probably could have been a very
successful legitimate person, but he chose to take the
cheap way out and to ruin multiple people's lives over
and over and over again.
For that, Your Honor -- I know that we are
basically arguing over nine months. Because of those
reasons, Your Honor, and we see a lot of people coming
in through this court that don't have a lot of options
in life and not a lot of chances. He had them. He
chose to not take them. Because of that, Your Honor,
the government is asking that he be given the top of the
guidelines. Thank you.
THE COURT: Thank you.
Mr. Hutson, anything you would like to say or
present on defendant's behalf?
MR. HUTSON: Just briefly, Your Honor.
Your Honor, first, I would like to identify for
the Court that Mr. Carson does have some support here
today. His wife is here. She is in the back along with
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some family friends. He has four beautiful children
that are here today, but he found it to be more
appropriate that the children were left outside the
courtroom during the proceedings today.
Your Honor, in terms of his history and
characteristics, which we would ask the Court to
consider in addition to the testimony presented today
and the government's argument, Mr. Carson is a very well
educated defendant. He is middle aged. He has no
history of drug abuse and he has no current issues with
substance abuse. He has no criminal history that the
Court could consider in terms of a sentence and he has a
solid foundation of family and friends that are ready to
support him as he rehabilitates himself from this case.
Most importantly, Your Honor, Mr. Carson, and I
suspect that he will say something similar to this
today, but he is exceptionally anxious to begin the
process of rectifying some of the harm that his actions
have caused in this case.
Ms. Kolman spoke about his intelligence and him
being a very well-educated individual and using that to
his advantage. While he has pled guilty to these
offenses, and truly his intelligence level did play a
part in his ability to carry out some of those actions,
those same abilities give him an opportunity to find
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opportunities to help rectify the financial harm that he
has caused to these families. He certainly is ready to
do that.
In terms of the procedural posture of this
case, a lot of the information is filed under seal, but
Mr. Carson has taken steps since his arrest to make
amends for some of his actions that were carried out
prior to the Indictment. It is just the beginning
though, Your Honor. He has a lot of work to do and he
acknowledged that he has that work to do.
Your Honor, when considering his history and
characteristics, Mr. Carson would respectfully submit
that a sentence of 37 months would be sufficient under
the statute, when evaluating a sentence in this case.
His history of being a well-educated individual with no
criminal history, no drug abuse, are indicators that he
has a chance to meaningfully contribute to society upon
the conclusion of this case.
Lastly, Your Honor, Mr. Carson would ask for a
recommendation, if the Court finds a term of
imprisonment is appropriate, to the camp at Manchester,
Kentucky. He would also asked to be allowed to
self-report to a facility once housing has been cleared
up.
He has been compliant with all terms of
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probation, to my knowledge in this case, and he thanks
you for your consideration.
THE COURT: Thank you, Mr. Hutson.
Finally, Mr. Carson, sir, if there is anything
you would like to say on your behalf before sentence is
imposed. If you would, I would ask you to come back up
to the podium along with your counsel. Thank you.
MR. CARSON: I just want to say that I am
accepting full responsibility for everything I have
done. I am extremely sorry for all the harm that has
occurred to the families and the victims I have caused.
Upon completion of my sentence I will do everything in
my power to use my skills to pay the debt that I owe
them, restitution that is due them back. That's all.
THE COURT: Why don't you return to counsel
table along with your counsel. We'll proceed forward
with sentencing.
Again the Court appreciates the statement of
the defendant, as well as the statement offered by
Mr. Young as a victim in this case. The Court also
notes the presence of other victims, as noted by counsel
for the government, as well as the presence of defendant
's family and friends in court today.
The Court has carefully reviewed the
Presentence Report and the filings and the entire record
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in this case. In a manner intended to comply the Sixth
Circuit jurisprudence since the Booker case rendered the
Sentencing Guidelines advisory, and Gall v. United
States' requirement that the court make an individual
assessment based on the facts presented, and adequately
explain the chosen sentence, the Court will explain its
reasons for the sentence to be imposed in this case.
The Court will discuss the advisory guideline
calculation and the factors discussed in 18 United
States Code § 3553 relevant to this case. Based on
those factors and in consideration of the guideline
range, the Court will then impose a sentence sufficient,
but not greater than necessary, to comply with the
purposes discussed in 18 United States Code § 3553.
The Court also notes in the record the
submission of the letter from Ms. Laura Baker on
defendant's behalf which the Court has reviewed and
takes into consideration.
Beginning with the guideline range, and the
counsel for the parties have made reference to the
applicable range, but as set forth in Paragraph 56 of
the Presentence Report based on the total of offense
level of 21 and criminal history category of I, the
guideline imprisonment range is from a low end of 37
months to a high end of 46 months.
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Turning next to the § 3553 factors. Beginning
with the nature and circumstances of the offense, as has
already been discussed, the defendant has pled guilty to
the counts of wire fraud and money laundering against
him. His specific offense conduct has been again
discussed in court today and set forth in the
Indictment, and more particularly set forth in the
offense conduct provisions of the Presentence Report,
specifically Paragraphs 8 through 15, which the Court
has reviewed and takes into consideration as part of its
analysis of defendant's offense conduct.
In brief fashion, the defendant moved to Powell
in Knox County, Tennessee in 2005, held himself out as a
business person, specifically from February, 2007, until
December of 2011. As noted in Paragraph 9, the
defendant perpetrated a scheme whereby committing
multiple acts of wire fraud and money laundering.
Specifically, the defendant ingratiated himself
into religious communities and used the religious
affiliations to perpetrate his scheme by lulling people
into investing in or making loans to his company.
Among other things, the defendant would inform
his victims if they invested in securities in
Masterworks, the money would be used for business
activities and neither Masterworks, as a company, nor
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the defendant were registered to sell securities.
For other victims the defendant presented the
investment scheme under the guise of a short-term loan
guaranteeing high rates of return, as well as the
initial investment. Once the money was wired into the
Masterworks' account by the victim, the defendant
immediately diverted the funds for his own personal use.
Specific examples of defendant's activities are
set forth in Paragraphs 10 through 14 of the Presentence
Report.
Paragraph 17 from a victim impact statement
notes that the loss in the case, as counsel for the
government noted, is over a million dollars, as
reflected in the Plea Agreement. Paragraph 17 further
notes it appears the defendant owes a total amount of
restitution of $717,372.32.
Paragraph 68 sets forth by victim named
initials the amount of loss of various victims which the
Court notes ranges from amounts as low as $1,500 up to
amounts exceeding $65,000 per victim.
With respect to the history and characteristics
of the defendant, as noted, the defendant has no
previous criminal history thereby resulting in a
criminal history category of I.
He is currently, I believe, 45-years old. He
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has a bachelor's degree education. The defendant is
married and has four children. He graduated from high
school in South Carolina in 1984, attended Johns Hopkins
University, graduated from Texas Baptist College in
Longview, Texas.
He has a work history including self
employment, employment with two different churches and
employment related to the instant offense. He is
currently, according to the Presentence Report, working
as custodian for a department store in Indiana.
The defendant has no history of mental or
emotional problems. He has been diagnosed with deep
vein thrombosis and a pulmonary embolism and takes blood
thinners to treat these conditions, which appear to be
controlled by medication.
The defendant from a substance abuse history
reports using alcohol in college, but states he does not
currently drink alcohol and denies any use or abuse of
controlled substances.
With that background in mind, the Court turns
to the need for the sentence imposed to reflect various
factors, including the seriousness of the offense.
Having reviewed the Presentence Report, heard
from one victim who may be considered an example, if you
will, of the effect not only on that individual but on
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other victims in this case, and having heard the outline
from both parties as to defendant's offense conduct,
certainly the defendant's offense is a serious one in
which he ingratiated himself into certain communities,
in this case religious communities, and used those
affiliations to, as the Court has already noted, to
perpetrate his scheme into in effect in lulling people
into investing in or making loans to his company thereby
certainly causing harmful impact to those who made such
investments.
The Court considers the need to promote respect
for the law and provide just punishment, again taking
into consideration the seriousness of and extent of
defendant's offense conduct, again noting the loss of
over a million dollars, the multiple victims in multiple
states, and as counsel for the government noted, options
or opportunities to stop his conduct at several
intervals.
The Court also does consider in this regard
also defendant's lack of criminal history and his
acceptance of responsibility in this case.
The Court considers the need to afford adequate
deterrence, both from a general standpoint and a
specific standpoint, that is, specific to this
defendant, again taking into consideration his offense
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conduct and lack of criminal history.
The Court also considers the need to afford
adequate general deterrence, that is, to fashion a
sentence that will act as a general deterrence to others
similarly situated to this defendant who may contemplate
the undertaking of similar crimes in the future. The
Court having had before it in the past other instances
of similar types of fraud and schemes that have had a
harmful impacts on other individuals and businesses.
The Court considers the need to protect the
public from further crimes of the defendant. Again,
taking into consideration defendant's offense conduct,
his lack of criminal history and his acceptance of
responsibility.
The Court considers the need to provide the
defendant with needed training, education and medical
treatment. The Court would find in this case, or it has
already reviewed in this case defendant's lack of
substance abuse history and his employment history and
educational background.
The Court considers the need to avoid sentence
disparities, noting that the advisory guidelines are
intended in part to carry out the national policies, as
articulated by Congress, intended to be uniform across
the country to the extent possible and be based on the
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offender's actual conduct and history. In essence, as
both counsel have noted, the guideline range before the
Court is not a lengthy one, if you will, from low end to
high end, only nine months. The defendant through
counsel urges a low end guideline sentence. The counsel
for the government urges a high end guideline sentence.
After considering all the things I have
discussed, including the guideline range and relevant
§ 3553 factors and considering the arguments and
positions of the parties and considering all the § 3553
factors including, but not limited to, the seriousness
of defendant's offense conduct and the need to afford
adequate and general deterrence, the Court does find a
guideline sentence at the high end of the guidelines of
46 months to be appropriate in this case.
For all the reasons discussed, the Court finds
this sentence to be sufficient, but not greater than
necessary, to comply with the purposes of 18 United
States Code § 3553.
Accordingly, and pursuant to the Sentencing
Reform Act of 1984, it is the judgment of the Court as
to Counts 1 and 7 of the Indictment that the defendant,
Freddie Marshal Carson, is hereby committed to the
custody of the Bureau of Prisons for a term of
imprisonment of 46 months.
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It's further ordered you shall make restitution
to the victims listed in the Presentence Report in an
amount totalling $717,372.32. Restitution shall be paid
in full immediately. Any payment made that is not
payment in full shall be divided proportionally among
the persons named. The government may enforce the full
amount of restitution ordered at any time pursuant to
Title 18 United States Code § 3612, 3613 and 3664(m).
The U.S. Bureau of Prisons, the U.S. Probation
Office and the U.S. Attorney's Office shall monitor the
payment of restitution and reassess and report to the
court any material change in your ability to pay.
You shall make restitution payments from any
wages you may earn in prison in accordance with the
Bureau of Prisons Inmate Financial Responsibility
Program. Any portion of restitution not paid in full at
time of your release from imprisonment shall become a
condition of supervision.
The Court finds you do not have the ability to
pay interest on the restitution ordered and interest is
waived.
Upon release from imprisonment you shall be
placed on supervised release for a term of three years
as to each of the Counts 1 and 7 to run concurrently.
Within 72 hours of release from the custody of
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the Bureau of Prisons you shall report in person to the
probation office in the district to which you are
released.
While on supervised release you shall not
commit another federal, state or local crime, shall
comply with the standard conditions adopted by this
court in local rule 83.10 and shall not illegally
possess a controlled substance.
You shall not possess a firearm, destructive
device or dangerous weapon.
You shall cooperate in the collection of DNA,
as directed by the probation officer.
In addition, you shall comply with the
following special conditions while on supervised
release.
One, you shall pay any financial penalty
imposed by this judgment and that remains unpaid at
commencement of the term of supervised release.
Two, you shall provide the probation officer
with access to any requested financial information.
Three, you shall not incur new credit charges
on existing accounts or apply for additional lines of
credit without permission of the probation officer until
restitution has been paid in full.
In addition, you shall not enter into any
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contractual agreements obligating funds without
permission of the probation officer.
Four, you shall pay any financial penalty
imposed by this judgment. Any amount that remains
unpaid at the commencement of the term of supervised
release shall be paid on a monthly basis at the amount
of at least ten percent of your net monthly income.
Title 18 USC § 3565(b) and 3583(g) require
mandatory revocation of probation or supervised release
for possession of a controlled substance or firearm or
for refusal to comply with drug testing. The mandatory
drug testing condition is suspended in this case based
on the Court's determination the defendant poses a low
risk of future substance abuse.
Pursuant to Title 18 USC § 3013 you shall pay a
special assessment fee in the amount of $200, which
shall be due immediately. The Court finds you do not
have the ability to pay a fine and will waive the fine
in this case.
The Plea Agreement in this case is accepted.
Pursuant to the Plea Agreement the remaining counts are
dismissed.
Pursuant to Rule 32 of the Federal Rules of
Criminal Procedure, the Court advises you may have the
right to appeal the sentence imposed in this case.
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Notice of appeal must be filed within 14 days
of entry of judgment. If you request and so desire, the
Clerk of Court can prepare and file a notice of appeal
for you.
Ms. Kolman, any objection to the defendant
remaining on bond pending designation by the Bureau of
Prisons?
MS. KOLMAN: The government is fine with that
as long as he remains on the ankle bracelet monitoring.
THE COURT: Is that part of existing bond
conditions?
MR. HUTSON: It is and he is fine with that.
THE COURT: The Court will order defendant to
be released on his existing bond pending designation by
the Bureau of Prisons. The Court will include a
recommendation at the defendant's request such
designation be to the Manchester, Kentucky Federal
Prison Facility.
Ms. Kolman, does the government have any
objection to the sentence just pronounced that has not
previously been raised?
MS. KOLMAN: No. I want to clarify. I might
have misheard you. The restitution amount, the agreed
upon amount is 1,078,722.32.
You actually said the right amount. I am
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sorry. Withdraw that.
THE COURT: The total loss before the Court is
over a million dollars. The restitution amount is the
717, correct?
MS. KOLMAN: That is correct, that is my
mistake.
THE COURT: Let me repeat that again. With
that clarification, any objections to the sentence
pronounced not previously --
MS. KOLMAN: No, Your Honor.
THE COURT: Thank you.
Mr. Hutson, does the defendant have any
objection to the sentence just pronounced that has not
previously been raised?
MR. HUTSON: He does not, Your Honor.
THE COURT: Anything further on behalf of
defendant?
MR. HUTSON: No, Your Honor. Thank you.
THE COURT: Any further from the government?
MS. KOLMAN: No, Your Honor.
THE COURT: The Court appreciates everyone's
attendance and/or participation this afternoon.
(Court was recessed.)
I CERTIFY THAT THE FOREGOING IS AN ACCURATETRANSCRIPT OF THE RECORD OF PROCEEDINGS IN THEABOVE-ENTITLED MATTER.
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