United States v. Singh
| Decision Date | 17 June 2016 |
| Docket Number | Criminal Action No. 15-173 (RBW) |
| Citation | 195 F.Supp.3d 25 |
| Parties | UNITED STATES of America, v. Tarsem SINGH, Defendant. |
| Court | U.S. District Court — District of Columbia |
Matthew Michael Graves, John Peter Marston, U.S. Attorney's Office, Washington, DC, for United States of America.
Gary H. Nunes, Womble Carlyle Sandridge & Rice, Vienna, VA, for Defendant.
On December 17, 2015, the defendant in this criminal matter pleaded guilty to Conspiracy to Commit Major Fraud on the United States in violation of 18 U.S.C. §§ 371, 1031 (2012), see Information at 6, as a result of "execut[ing] a scheme to defraud the Small Business Administration [ (‘SBA’) ] and the General Services Administration (‘GSA’)," Statement of Offense at 5. The defendant is now pending sentencing and the parties have submitted memoranda in aid of sentencing, drawing into question the sentencing range applicable to the defendant under the United States Sentencing Guidelines ("the Guidelines").See Government's Memorandum in Aid of Sentencing ("Gov.'s Mem."); Defendant Tarsem Singh's Memorandum in Aid of Sentencing ("Def.'s Mem."). Specifically, the parties disagree as to the value of the loss sustained by the government resulting from the defendant's conduct, Gov.'s Mem. at 11; Def.'s Mem. at 9, as well as to the propriety of imposing a sentencing enhancement for the defendant's purported aggravated role as an organizer, leader, manager, or supervisor in the conspiracy to which he pleaded guilty, Gov.'s Mem. at 25; Def.'s Mem. at 22. Upon careful consideration of the parties' submissions, the Court concludes that the amount of loss that must be used in calculating the defendant's guidelines is the full amount of the contracts that the defendant fraudulently procured, and that the Guideline enhancement for playing an aggravated role in the conspiracy is not applicable in this case.1
The following factual allegations are drawn from the Statement of Offense submitted by the government, which the defendant agreed to, pursuant to Federal Rule of Criminal Procedure 11. Statement of Offense at 1.
The SBA operates what is referred to as the "8(a) program,"2 which "is a development program that was created to help small, disadvantaged businesses compete in the American economy and access the federal procurement market." Id. at 1. Under the program, federal agencies award contracts to 8(a)-qualified firms "on either a set-aside basis, where the only competitive bidding is among similarly eligible firms, or on a sole-source basis, without competitive bidding." Id. at 1-2. To qualify for the program, a firm must be a small business and be at least fifty-one percent-owned and controlled by a United States citizen "of good character who meet[s] the SBA's definition of socially and economically disadvantaged." Id. at 1. Firms "must apply and qualify for participation in the 8(a) program through a formal SBA-administered application process" and "submit annual reviews" to demonstrate continued eligibility. Id. at 2. Firms may participate in the 8(a) program for up to nine nears, at which point they are considered by the SBA to have "graduated" and are "no longer eligible" for government contracts issued under the program. Id. Once a firm has graduated from the program, it may still "provide business development assistance to firms who are in the development stage of the 8(a) Business Development Program" through a related mentor-protégé program. Id. at 4.
From at least January 12, 2000, the defendant acted as the Vice President of "Company A"3 which "specialize[d] in construction and renovating and altering buildings" from at least January 12, 2000 to December 2006. Id. at 4-5. Company A received its 8(a) certification on January 12, 2000, and "was lawfully awarded approximately $23 million in contracts from [the] GSA ..." Id. at 5-6. After nine years, Company A graduated from the 8(a) program on January 12, 2009. Id. at 5. On that same day, a second company—"Company B"—submitted an application for 8(a) certification. Id. at 6. "Company A loaned Company B the registration fee and referred Company B to a SBA Consultant to assist with the application." Id. In June 2009, Company B named the defendant as a Vice President of that company and with Company A. Id.
Id. at 7-8. Furthermore, the defendant "used a combination of Company A personnel and subcontractors to staff projects awarded to Company B on which Company A was working." Id. at 8. "On the contracts for which it made a profit, Company A's profits were, at least, $90,397.15," and the defendant's personal compensation attributable to those contracts was, at least, $28,768.28. Id. at 10.
In assessing what sentence a defendant should receive, "[a] district court begins by calculating the appropriate Guidelines range, which it treats as ‘the starting point and the initial benchmark’ for [the] sentenc [e]." United States v. Akhigbe, 642 F.3d 1078, 1084 (D.C.Cir.2011) (quoting Gall v. United States, 552 U.S. 38, 49, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007) ). When making the Guidelines calculation, the "commentary in the Guidelines Manual that interprets or explains a guideline is authoritative unless it ... is inconsistent with, or a plainly erroneous reading of, that guideline." Stinson v. United States, 508 U.S. 36, 38, 113 S.Ct. 1913, 123 L.Ed.2d 598 (1993). "Then, after giving both parties an opportunity to argue for whatever sentence they deem appropriate," the court considers all of the sentencing factors listed in 18 U.S.C. § 3553(a) and undertakes "an individualized assessment based on the facts presented." Akhigbe, 642 F.3d at 1084 (citing Gall, 552 U.S. at 49–50, 128 S.Ct. 586 ).
According to the Guidelines, the base offense level for the defendant's fraudulent conduct is six. See U.S.S.G. § 2B 1.1 (a)(2). This base offense level is then enhanced by a graduated tier of increases based upon the amount of "loss" involved in the fraud, see U.S.S.G. § 2B 1.1(b), with the commentary defining actual loss as "the reasonably foreseeable pecuniary harm that resulted from the offense," id. cmt. n.3(A)(i). For purposes of identifying the correct adjustment, the amount of the loss is typically reduced by "the services rendered[ ] by the defendant or other persons acting jointly with the defendant[ ] to the victim before the offense was detected." Id. cmt. n.3(E)(i). Notwithstanding this adjustment, the commentary prescribes "Special Rules" for determining the amount of the loss, one requiring that "[i]n a case involving government benefits ... loss shall be considered to be not less than the value of the benefits obtained by unintended recipients or diverted to unintended uses ...." Id. cmt. n.3(F)(ii). The government argues that the "loss [in this case] is the full value of the contracts obligated in connection with the scheme, which the parties have agreed is $8,533,562.86," "result[ing] in an [eighteen]-level adjustment." Gov.'s Mem. at 11; see also U.S.S.G. § 2B11.1(b)(1)(J). In contrast, the defendant contends that he "provided valuable services to the government, gaining only $28,768.28 [in profit] from the relevant contracts," Def.'s Mem. at 8, resulting in only a four-level adjustment, U.S.S.G. § 2B 1.1 (b)(1)(C).
This Circuit has not considered whether the Special Rule pertaining to government benefits applies to set-aside procurement programs administered by the SBA, but decisions from three circuits support this conclusion. See United States v. Blanchet, 518 Fed.Appx. 932, 956–57 (11th Cir.2013) ; United States v. Leahy, 464 F.3d 773, 790 (7th Cir.2006) ; United States v. Bros. Constr. Co., 219 F.3d 300, 317–318 (4th Cir.2000). In Blanchet, two criminal defendants were convicted of fraudulently procuring a "$100 million, small business set-aside contract with the federal government" after it was revealed that their "company did not meet the necessary federal standards to be considered a small business." 518 Fed.Appx. at 934. Citing the Special Rule regarding government benefits, the Eleventh Circuit concluded that "the amount of loss in cases involving government benefits programs equals the entire amount of the contract at issue" and therefore it was appropriate to attribute "the entire amount of the contract issue—$100 million—to the [d]efendants as loss." Id. at 957. That Circuit reasoned that:
the small business set-aside contract at issue ... was set aside to provide exclusive opportunities to small businesses .... Despite the [d]efendants' argument that the government benefitted from the contract rather than losing from it, Congress has emphasized that there is a concern in ensuring that small businesses have a fair...
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