1

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA, )

)

Plaintiff, )

) Case No. 12-cr-290-2

v. )

) Hon. James B. Zagel

MIGUEL LEAL, )

)

Defendant. )

DEFENDANT’S RESPONSE TO THE 

GOVERNMENT’S OBJECTIONS TO THE PSR

Defendant, Mr. Leal Leal, by his attorneys, responds as follows, in parallel format, to the 

Government’s Objections to the PSR:

I. INTRODUCTION

In 2013, the USDA recalled more than 13 million pounds of food because the food 

contained various adulterants ranging from listeria to undeclared allergens.1 Meanwhile, its 

sister agency, the FDA, initiated recalls on 2,194 food products during the same time period, 

accounting for various issues with food products, ranging from Listeria, to the presence of metal 

shavings, to other adulterants.2 Food recalls are part of commercial life in the United 

States. They are not desirable but they are unavoidable.

This case, as it applies to Miguel Leal, tangentially involves a recall of cincho cheese. 

Mr. Leal purchased cincho cheese from Hot Peppers, Inc., a company controlled by Jose Zurita, 

and linked to Zurita’s Mexican cheese production operation, for over a year. The crime that Mr. 

 

1 See USDA Summary of Recall Cases in Calendar Year 2013, available 

at: http://www.fsis.usda.gov/wps/portal/fsis/topics/recalls-and-public-health-alerts/recall-summaries (last 

visited October 15, 2014).

2 See FDA 2013 Recall Summary, available 

at: http://www.accessdata.fda.gov/scripts/enforcement/enforce_rpt-ProductTabs.cfm?action=Expand+Index&w=01022013&lang=eng#food.

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Leal committed occurred in April 2007 when Mr. Leal believed he had permission to sell a 

shipment of the cheese and started to do so, but subsequently learned that the FDA had not yet 

released it. When contacted by Zurita and told of this administrative hiccup, Mr. Leal agreed to 

lie to the FDA about the location of the 311 boxes he had already sold if the FDA ever asked 

about the cheese, and he agreed to take additional steps to “verify” the lie if asked. Mr. Leal was 

scared that he had done something wrong and thought a simple lie would make it go away. The 

crime began and ended in April 2007, after which he did not hear again about the FDA or April 

Shipment for months.

As it turned out, the cheese about which Mr. Leal agreed to lie was “adulterated.” 

Unbeknownst to Mr. Leal, FDA samples from the April Shipment later revealed the presence of 

adulterants in some of the cheese that he had shipped, and the FDA initiated a recall of that 

cheese. Rather than seeing the recall for what it is – an undesirable but common phenomenon –

the government has conflated the fact of the recall with Mr. Leal’s lie and concocted a theory of 

this case in which Mr. Leal knew that he was selling cheese that was adulterated and subject to 

recall, and lied to cover up this scheme. 

As explained below, this theory is entirely inaccurate, and is premised on the government 

drawing inferences from inaccurate facts and seeing sinister motives in otherwise innocent 

conduct. In contrast to the government’s view of the case, the plea agreement and the 

Presentence Report (PSR) both accurately set forth Mr. Leal’s discrete conspiracy to lie to the 

FDA. And following an extensive presentence investigation, the PSR finds a guidelines sentence 

of 10 to 16 months is applicable, within Zone C of the Guidelines. In reaching this conclusion, 

the probation officer considered and rejected the majority of the government’s sentencing 

positions, which had advocated for an applicable guideline range of 168 to 210 months’ 

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incarceration. The probation officer found the government’s efforts to impose certain 

enhancements to be “unfounded and approaching unjust.” PSR, ¶15. Nevertheless, the 

government, for its part, continues to see this as a grand and wide-sweeping conspiracy.

This is Mr. Leal’s first encounter with the criminal justice system. Until his interaction 

with Probation Officer Sandy DeNicholas, Mr. Leal had experienced a system that lacked any 

semblance of fairness and justice. Ms. DeNicholas’s thoughtful consideration of the facts and 

the sentencing issues presented were Mr. Leal’s first affirmation that our justice system, in fact, 

seeks just results. And Mr. Leal trusts that this Court will also see through the government’s 

“unfounded and approaching unjust” version of events, and impose on him a just and fair 

sentence. 

II. RESPONSE TO THE GOVERNMENT’S FACTUAL BACKGROUND

Mr. Leal has set forth in his Sentencing Memorandum the narrative of his offense 

conduct. He has explained what happened, and why it happened. He will not repeat that 

narrative here. In its place, Mr. Leal will do two things: (1) highlight three key facts that the 

government obfuscates in its “factual background,”3and (2) undertake to explain why the 

government’s “factual” narrative of his offense conduct does not hold water. 

A. The government obfuscates three key facts

The government’s factual background includes pages and pages – indeed, entire sections 

– devoted to notices sent by the FDA to Jose Zurita, his company HPI, and the importer Camelot, 

 

3

It is procedurally improper for the government to offer as fact his personal view of the case. His 

musings are not reliable evidence. At this stage of the proceedings, the only facts are those admitted in 

the plea agreement or found by the PSR. To the extent the government wishes to introduce additional 

facts, or counter those in the PSR, it must do more. “When a [party] has failed to produce any evidence 

calling the report's accuracy into question, a district court may rely entirely on the PSR.” United States v. 

O'Doherty, 643 F.3d 209, 219 (7th Cir. 2011) (quoting United States v. Artley, 489 F.3d 813, 821 (7th 

Cir.2007))

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informing them that the April, May and June Shipments were subject to hold orders and could 

not be sold, and later that samples taken from them revealed adulterants in the cheese which 

needed to be destroyed. The government’s motive for doing so is clear: to suggest that Mr. Leal 

was aware of this information and should be held accountable for it. That is simply false.

1. Mr. Leal Never Received Notice of Any FDA Hold Orders: Integral to this case is 

whether Mr. Leal knew that the shipments of cincho cheese he received in April, May 

and June 2007 were each subject to an FDA hold order. But nowhere in its objections 

does the government present any concrete evidence that Mr. Leal knew a hold order had 

been placed on any of the cincho cheese shipments. See R. 128, pp. 5 – 7. In fact, he did 

not. The PSR correctly concludes that there is no evidence Mr. Leal was aware of the 

existence of a hold order issued by the FDA. See PSR, ¶42.

2. Mr. Leal Never Received Notice of the FDA Testing Results: From April 2007 

through August 2007, the FDA sampled and tested the three shipments that MCP 

received from HPI. As the FDA conducted its testing, the results slowly trickled out to 

HPI and Camelot. Again, Mr. Leal was never made aware of these results. 

3. Mr. Leal Believed, Based on Representations Made by Jose Zurita, That the Cincho 

Cheese Had Been Cleared by the FDA Prior to Delivery to MCP: Throughout Mr. 

Leal’s business dealings with Jose Zurita, Mr. Leal understood that the cheese delivered 

to MCP had been cleared by the FDA for sale into the United States at the time he sold it. 

Even as to the 311 boxes about which he agreed to lie, Mr. Leal only found out that the 

sales should not have occurred after the cheese had been sold. Mr. Leal will present 

evidence of emails wherein Jose Zurita and/or Roberto Garcia discuss the need for the 

cheese to be cleared by the FDA, or the fact that the FDA and/or U.S. Customs had 

cleared the cheese.4 

B. The Inferences Drawn by the Government Are Simply Wrong

In addition to obfuscating these key facts, the inference of sweeping criminal conduct the 

government draws from just a small handful of facts is simply wrong. The government’s view of 

this case is that Mr. Leal knowingly and intentionally distributed three shipments of cincho 

cheese that he knew were adulterated, and that his agreement to lie to the FDA was part of a 

 

4 Despite changing her story across multiple interviews, Cynthia Gutierrez, an apparent 

government witness, has steadfastly maintained that she believed all the cheese had been released by the 

FDA before it was sold. 

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grand conspiracy to cover up that the cincho cheese was adulterated. As support for this 

conspiracy, the government relies almost entirely on four relatively undisputed facts:

1. Mr. Leal visited one of Zurita’s factories in Mexico and believed that the working 

conditions were terrible.

2. Mr. Leal was told on April 19, 2007, that the FDA wanted to check some pallets of 

cheese and that DQM could not sell the April shipment for now, and he agreed to lie 

to the FDA about the location of 311 boxes that had already been sold.

3. Later that summer, cheese from April, May and June shipments of cincho cheese was 

being returned by customers because it contained mold and other physically apparent 

abnormalities.

4. Mr. Leal attempted to recondition some this cincho cheese through a process called 

“washing.”

Simply put, these facts do no support – and indeed contradict – the government’s grand 

conspiracy theory that Mr. Leal knew he was selling adulterated cheese and lied to the FDA to 

further this grand conspiracy. 

1. The factories in Mexico

Mr. Leal’s visit to Mexico to view one of Zurita’s factories is a sign that Mr. Leal took 

his job seriously, not evidence that he knew the cheese he was buying was adulterated. 

First, Mr. Leal’s statement to the government was that the “working conditions” of the 

one factory he visited in Mexico were terrible – not that Zurita’s cheese-making process was 

terrible. The difference is significant. Dr. Catherine Donnelly, a professor of microbiology, will 

testify at the sentencing hearing, among other things, that some of the best artisanal cheese in the 

world is made in damp dark caves without resulting in adulterated product. Furthermore, the 

evidence shows that Zurita made cheese in multiple factories throughout Mexico. The evidence 

therefore suggests that the cheese in question came from multiple factories, whose condition is 

not known.

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Second, by latching on to this single phrase, (“terrible working conditions”), the 

government ignores other contrary evidence. For example, there is evidence that Mr. Leal

worked with Zurita to test the cheese he produced and to improve the cheese-making process

from the beginning. Among other things, in May 2006, Mr. Leal requested that Zurita run tests 

on the cheese being made in one of his factories. Zurita did so, and reported to Mr. Leal on May 

16, 2006, that the tests revealed he had a problem with “fecal coliforms.”5 Fecal coliforms are 

non-pathogenic bacteria and do not cause illness but indicate the presence of fecal matter in the 

milk used to make cheese which can be a precursor to other pathogenic organisms. Zurita then 

indicated that he was taking steps to prevent any contamination of the product and asked Mr. 

Leal if he had any other recommendations beyond those steps. See also Mr. Leal’s Letter to the 

Court (attached as Exhibit A to his Sentencing Memorandum).

Third, by April 2007, Mr. Leal had been importing and distributing Zurita’s cincho 

cheese for well over one year. That cheese was sold throughout the country and enjoyed by 

thousands of people. Nobody got sick from it. Nobody reported any problems of adulteration. 

To Mr. Leal’s knowledge, all of the cheese had been inspected by the FDA and approved for 

distribution. In fact, people loved it and orders for the cheese only increased. Thus, Mr. Leal

had strong evidence and every reason to believe that the cincho cheese Zurita was producing in 

his factories in Mexico was a high quality, safe product.

2. Mr. Leal agrees to lie in April 2007

 

5 The government asserts that this email, dated May 16, 2006 on its face, was actually sent in 

2007. But all credible evidence is to the contrary as the Court will learn at the sentencing hearing. This 

completely undermines the government’s argument that Mr. Leal was told that there was a problem with 

fecal coliforms and then turned around and ordered the May 2007 Shipment just “four days later.” (Mr. 

Leal will also put on evidence explaining why the translation of this email as “bacteria” instead of 

“coliforms” is materially inaccurate.) 

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The fact that Mr. Leal was told the FDA wanted to see the cincho cheese in April 2007, 

and thereafter agreed to lie to cover up the fact that 311 boxes had already been shipped, is not 

evidence that he knew it was adulterated.

First, Zurita emailed DQM on April 15, 2007, and told DQM that the FDA had cleared 

the cincho cheese for distribution in the United States. This was the same process that Zurita had 

followed for the year prior and on which DQM had been relying without problem. In fact, the 

only cheese made outside of the United States that MCP or DQM ever sold was this cincho 

cheese. The business deal made with Zurita and his company, Hot Peppers, Inc. (HPI), was that 

HPI would be responsible for importing the cheese and clearing customs and any other 

regulatory requirements because DQM and MCP had no experience with that process at all. 

This is significant for a few reasons: (1) it means that at the time the 311 boxes about 

which Mr. Leal agreed to lie were actually shipped, Mr. Leal had absolutely no basis to know or 

otherwise believe that he was supposed to hold on to them; and (2) it means that when he was 

subsequently told the FDA wanted to see the cheese, he understood that this was a decision made 

after the FDA had already inspected and cleared the cheese when it first crossed the border.

Second, while Mr. Leal was told by Cynthia Gutierrez that they could not sell “for now,” 

he was never sent the actual hold order issued by the FDA. The hold order and all subsequent 

communications were issued to HPI and the importer Camelot, but not MCP or DQM. In fact, 

the FDA never spoke directly to Mr. Leal or sent any information or notice to MCP stating that 

the cheese had to be held. To the contrary, Mr. Leal got word of the FDA’s intentions only thirdhand, and the information he got was incomplete and inaccurate. Indeed, the very next day, and 

contrary to what the FDA had said to Zurita and HPI, Zurita told Mr. Leal: the FDA came to see 

the product, “the product was very good” and Zurita would “take care of the details with the 

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FDA.” Not “hold the cheese,” or “wait for the FDA to runs its tests” (despite Zurita being well 

aware the cheese should be held until released).

Third, in addition to not knowing about the hold order or any other FDA concerns, when 

Mr. Leal learned in April 2007 that the FDA wanted to see the cheese, he had absolutely no 

reason to believe there was something wrong with it or that it was adulterated. He had been 

selling Zurita’s cheese for over year without problem and with only increased demand from 

consumers. Thus, contrary to the government’s spin, he had every reason to believe that the 

cheese was fine and that the FDA inspection was merely an administrative hiccup – not a 

concern about the safety of the cheese. 

3. The cheese had problems

The government relies most heavily on the fact that wholesalers and other retailers who 

bought cincho cheese from the April, May and June Shipments started to return the cheese in the 

summer of 2007, reporting mold and other physical abnormalities on the cheese. The 

government infers from this that Mr. Leal knew or should have known that the cheese he was 

selling was adulterated. This inference is simply wrong.

First, whatever Mr. Leal may have learned about physical problems with the cincho 

cheese, he learned about them for the first time at the end of June – months after he had agreed to 

lie to the FDA and well after he had ordered, received and started shipping the cincho cheese at 

issue in this case. At sentencing Mr. Leal will provide the Court with a timeline of the various 

emails on which the government relies to show that Mr. Leal should have known there were 

physical problems with the cheese. 

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The first email is dated June 4, 2007. It reports only that employees at DQM had notices 

that some of the cheese was moldy6and had small green spots. Notably, the email was sent by 

Cynthia to Zurita and not copied to Mr. Leal. (Mr. Leal does not work at the DQM facility in 

Elmhurst. He works at the MCP factory in Darlington, Wisconsin. So the only way for him to 

know what was seen by workers at the facility in Elmhurst is if someone emails or calls him).

The next emails are from the end of June. They are emails between Mr. Leal and Zurita 

talking about returned cheese and whether Zurita is going to reimburse Mr. Leal for the returned 

cheese. They say nothing about mold or other problems – only that the cheese is being returned. 

The remaining emails are all dated in late July, August or September. And at this point, 

the cheese with problems is not being sold to consumers – it is being held and either 

reconditioned or returned to Zurita. As Mr. Leal states to Zurita on September 4, 2007, “it’s 

been over a month without having cheese that I can sell.”

Second, the pathogens and other microbiological findings the FDA discovered are not 

visible from the outside. You cannot see salmonella when you look at cheese. Nor can you see 

staphylococcus aureus, or E. coli. And because Mr. Leal never received any of the FDA test 

results that were sent to Zurita (and kept from Mr. Leal), Mr. Leal had no way to know what the 

FDA had discovered about the cheese.7

 

6 Mr. Leal will present expert testimony reflecting that the government’s translation of the 

Spanish word “enlamado” as “slimy” is inaccurate. The word means “moldy.” Relatedly, the email 

reports small green specks or freckles, not spots. 

7 Relatedly, the government’s factual background in this section is filled with all of the dates of 

communications sent by the FDA to HPI and Zurita concerning test results and the changed status of the 

various hold orders. This includes a whole section about efforts by HPI to obstruct and delay orders from 

the FDA to destroy the April and May Shipments. See Gov. Objections, at 17-18. While Mr. Leal has no 

reason to dispute these facts, nor can the government dispute that Mr. Leal never saw or received or 

learned about those communications or their contents until the FDA knocked on his door in September 

2007 and told him to recall the cheese. Which he did willingly.

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Third, conversely, the reported problems of mold and other physical abnormalities do not 

equate to problems with adulterants in the cheese. Dr. Donnelly will testify that the fact that 

mold grows on cheese is not an indication that it is adulterated. Indeed, mold growth in some 

cheeses is a desired characteristic. High quality cheese provides an excellent environment for 

mold growth. Moreover, other reported observations of the physical characteristics of some of 

the cincho cheese in this case – such as small green spots, a strong smell, the softness of the 

surface of the cheese, and deformity of shape – are all defects that arise in the artisanal cheese 

making process. These defects do not themselves indicate that the cheese was made in 

unsanitary conditions. 

Moreover, the government’s assertion that the cheese he was selling was so obviously 

adulterated due to the “rancid smell, large quantities of mold and fungus, moisture, softness, and 

slime” (Gov. Objections, at 33) defies logic. Mr. Leal sold primarily to wholesalers and 

knowledgeable intermediaries who inspected the cheese they bought before accepting it. Why 

on earth would they buy (or Mr. Leal, a wildly successful cheese producer, believe they would 

buy) cheese so apparently defective?

In fact, the various problems reported by customers say nothing more than the cincho 

cheese was bad. Bad in the same way cheddar cheese made by Kraft grows mold if left too long 

in your refrigerator. Bad in the same way yogurt starts to smell if opened and then left too long 

before finished. Bad in the same way apples grow soft over time or oranges grow fungus or 

bananas turn brown and attract fruit flies.

4. Mr. Leal attempted to have the cheese washed.

The government’s favorite fact is that Mr. Leal asked Zurita and his employees to “wash” 

some of the cheese that was returned with mold on it. While there is no dispute this occurred, 

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the government’s attempt to paint this as a sinister – let alone criminal – act is astounding. 

Indeed, the government treats “washing” cheese as if it were “cooking methamphetamine” or 

“laundering money” – a sinister act that its name alone suggests evil motive. This is simply not 

the case. See e.g. “Cheese Washing,” by LeAnnaBodyByVi, available at: 

https://www.youtube.com/watch?v=x5JNTKxKwo4 (last visited 10/16/14). The fact of the 

matter is that washing 60 pound wheels of hard cheese to prepare them for sale is part of the 

artisanal cheese making process. It is a common, well-accepted practice, and not an indication 

that someone is trying to cover up the existence of adulterants hidden in the cheese. (Mr. Leal

will supplement You Tube videos with expert testimony on this process as well.)

The government’s expert disclosure suggests that their real position is that washing 

cheese does not remove the microbiological pathogens found in some of the samples taken by 

the FDA. On this point, Mr. Leal agrees. But that fact is irrelevant here, because Mr. Leal did 

not know that the cheese he was washing contained microbiological pathogens. He was told by 

customers and Ms. Gutierrez that the cheese contained mold. And removing mold and washing 

cheese are part of the affinage process in artisanal cheese making. 

This is not the only instance of the government inferring evil intent from common and 

respectable business practices. One other example: the government makes much of the fact that 

Mr. Leal refused to store Zurita’s cheese in his factory. But again, this is simply good business 

practice, not evidence of criminal intent. Dr. Donnelly will testify that no respectable factory 

(especially one as well run as Mr. Leal’s) would allow in its doors cheese made in any other 

factory because doing so risks cross-contamination.

Indeed, contrary to the government’s suggestions, Mr. Leal ran a very clean factory. Mr. 

Leal will introduce at sentencing an FDA investigation of his factory conducted in June 2007, 

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revealing that Mr. Leal went above and beyond the requirements imposed on him by the FDA 

and that the FDA found no violations or other problems at his factory. 

C. The inferences the government draws directly contradict the conclusions of the 

lead investigator in this case

FDA Special Agent Ronne Malham is the lead investigator on this case. He was 

interviewed by USPO Sandra DeNicholas in her efforts to understand the government’s evidence 

and position on this case. What he told Ms. DeNicholas stands in stark contrast to the arguments 

advanced by the government and the inferences the governments is asking this Court to draw. 

He said:

According to Special Agent Malham, the regulatory branch of the FDA 

communicates with importers and their brokers--not the distributors--when 

imported products are subject to hold orders and further investigation. A hold 

order requires that the product remain at the port of entry and not transported to 

distributors. 

SA Malham affirmed that if an importer or its broker neglect to communicate the 

FDA’s order to the distributor and/or the distributor receives a shipment at its 

facility--both of which occurred in this case--the distributor would have no reason 

to suspect FDA involvement, and it would not be improper for them to introduce 

the product into commerce. 

SA Malham stated that the investigation did not reveal any evidence of any 

conspiratorial agreements between Defendants Leal and/or Gutierrez with Jose 

Zurita to obstruct an FDA investigation, other than that related to the 311 

missing cartons of cheese in April, or to knowingly distribute adulterated 

cheese. The distribution of the cheese throughout the spring and summer of 2007 

was done by the defendant prior to learning of the FDA’s restrictive orders and of 

the FDA’s findings regarding the presence of harmful pathogens.

PSR, ¶18.

In sum, for more than one year Mr. Leal purchased cincho cheese made by Zurita and 

sold it in the United States. His customers loved it and wanted more. Mr. Leal had no reason to 

believe that the FDA’s request to hold “for now” the cincho cheese in the April Shipment, 

relayed to him third-hand, had anything to do with adulteration or other health problems with the 

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cheese. And when, months later, he learned that there were observable physical problems with 

subsequent shipments of the cheese, he still had no reason to believe the cheese was adulterated. 

He properly treated it as a quality problem, reconditioning what he could and seeking refunds for 

the rest. His crime was nothing simply the agreement to lie to the FDA about the location of 311 

missing cartons of cincho cheese in April – cheese he had no reason to know was adulterated. 

While illegal and regrettable, Mr. Leal’s crime was not the grand conspiracy to distribute 

adulterated cheese that the government asserts.

III. RESPONSE TO THE GOVERNMENT’S “FACTUAL” OBJECTIONS

The government’s “factual” objections to the PSR are anything but. Repeatedly, the 

government states that it objects to the PSR because the USPO infers from an agreed upon fact 

something different than the government infers. That is, the government does not dispute the 

facts in the PSR – only the conclusions reached by the USPO based upon those facts. That is 

argument, not objection. It is improper and not a legitimate basis to object to specific facts in the 

PSR. See Fed. R. Crim. P. 32(f)(1). “To invoke the district court's Rule 32 fact-finding 

obligation, the [objecting party] is required to make specific allegations of factual inaccuracy. 

An objection to the ultimate conclusions in the presentence report does not necessarily imply that 

a ‘controverted matter’ exists.” United States v. Chee, 514 F.3d 1106, 1115 (10th Cir. 2008)

(internal citations omitted).

To the extent what the government really means is that the PSR fails to include additional 

facts that the government believes to be important, that is a legitimate objection. See Fed. R. 

Crim. P. 32(f)(1) (allowing for objection to material information omitted from report). But if 

that is the case, the government is obligated to introduce evidence that is, in fact, missing or 

otherwise omitted. While it may do so at the hearing, it did not do so in its Objections. But bald 

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statements of the government do not suffice See United States v. Mustread, 42 F.3d 1097, 1102 

(7th Cir. 1994) (a party “must produce more than a bare denial, or the judge may rely entirely on 

the PSR.”)

IV. RESPONSE TO THE GOVERNMENT’S GUIDELINES OBJECTIONS

The PSR properly determined that Mr. Leal’s offense level, after acceptance of 

responsibility, is 12, resulting in an advisory guideline range of 10 to 16 months. The 

government disagrees, asserting that the proper offense level is 31, resulting in an advisory 

guideline range of 108 to 135 months. Not only is the government wrong, but its aggressive 

position on some of the guidelines is confounding, given that it has informed defense counsel 

and this Court that it believes a sentence in the range of 108 months is too high and that it 

permitted Ms. Gutierrez to enter into an unusual plea agreement in which the government 

refused to take a position on the applicable guidelines. 

Mr. Leal is mindful of the Court’s comments to all parties on October 16 that a 

technically correct Guidelines calculation post-Booker is more of a procedural necessity than a 

substantive one. Nevertheless, it is imperative to Mr. Leal that this Court appreciates how the 

government’s positions on guidelines reflect a deeper misunderstanding of the facts and law 

applicable to this case. And that to the extent the Guidelines have anything to say about Mr. 

Leal’s actual offense conduct, it is that he deserves a sentence closer to a Zone C range of 10 to 

16 months – not 10 to 16 years.

Count 1

A. Loss Amount 

The PSR correctly concluded that there was no loss involved in this case. The 

government argues that the total value of all three shipments of cheese constitutes a loss that was 

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reasonably foreseeable to Mr. Leal. The government’s theory of loss valuation is wrong on 

multiple counts.

To establish loss under §2B1.1, the government must present evidence to establish 

“reasonably foreseeable pecuniary harm” or “intended loss.” Id., Note 3(A). And there is no 

evidence here that anybody actually suffered a loss or that Mr. Leal intended for that to happen. 

The government is unable to identify one retailer who was either unable to sell the cheese and 

therefore suffered a loss, or one retailer who was not fully refunded for the cheese that was 

purchased. PSR, ¶22 (no identifiable victims). 

The government’s factual support for a loss amount is simply a recitation of the facts that 

show the cincho cheese had apparent quality issues, causing the cheese to be returned by 

customers, and had other apparent quality problems such as mold and softness. R. 128, p. 50. 

But this is not loss. It is commerce. Sometimes cheese, like any other perishable product, is bad 

and gets returned by buyers for a refund or other credit. That does not make the product a total 

loss. Here, there is absolutely no evidence that any MCP customer suffered a loss. In fact, the 

government’s own recitation of facts shows that MCP was accepting the cheese back from 

customers, which necessarily avoided the customers suffering any actual pecuniary loss. See R. 

128, p. 50. 

Even if this Court accepted that Mr. Leal knew the cheese was adulterated when he sold 

(which he did not), Mr. Leal’s ill-gotten gains do not mean the customers suffered a “pecuniary 

loss.” The government’s contrary opinion “stem[s] from the faulty supposition that ill-gotten 

gains must have caused someone a loss, but as [the Seventh Circuit has] stated before, ‘intended 

losses are intended losses, not bookkeeping entries.’ It is not enough that a criminal expect a 

pecuniary gain—he must foresee that his victim will actually suffer pecuniary loss.” United 

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States v. Johns, 686 F.3d 438, 457 (7th Cir. 2012), citing United States v. Peel, 595 F.3d 763, 773 

(7th Cir.2010). Here, none of Mr. Leal’s customers lost money from the purchase of cincho 

cheese. 

The government fares no better under its “no value” argument, which is both factually

and legally flawed. See Gov. Objections, at 53. As an initial matter, on the facts, the 

government overstates its evidence. Two of six samples taken from 3 different shipments 

contained Salmonella. This means that four of the six samples did not contain Salmonella. That 

is, in each instance where there was a positive Salmonella test result, there was also a negative 

Salmonella test result. The government’s assertion that the “cheese contained a pathogen, 

Salmonella, as well as extremely high levels of e. Coli and Staphylococcus aureus” simply is not 

accurate. Id., at 53. 

More importantly, there is absolutely no evidence that Mr. Leal was aware of these test 

results. In fact, he was not. Mr. Leal is only responsible for “reasonably foreseeable pecuniary 

harm,” which requires that the “pecuniary harm that the defendant knew or, under the 

circumstances, reasonably should have known, was a potential result of the offense.” §2B1.1, 

Note 3(A)(iv). The government ignores this requirement and attributes to Mr. Leal information

that was unknown to him (as discussed above) in an effort to impermissibly attempt to broaden 

the scope of reasonable foreseeability. Simply put, even if the microbiological adulterants found 

in some of the cheese made it valueless, the fact that Mr. Leal did not know they were there 

means any lost value was not intended or reasonably foreseeable to him. See United States v. 

Domnenko, 763 F.3d 768, 770 (7th Cir. 2014) (remanding case for sentencing loss determination 

because “involve[ment] in a fraudulent scheme does not necessarily mean it was reasonably 

foreseeable that all the subsequent economic damages would occur, especially when there was 

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no evidence that” defendants knew all the relevant circumstances surrounding the illegal 

conduct). 

Relatedly, the government recites a series of obvious external quality issues the 

government alleges existed at the time of the cheese sales to suggest Mr. Leal should have 

known it was internally adulterated. Gov. Objections, at 50. From a simple common sense 

standpoint, the government’s argument fails the straight-face test. If the cheese “had large 

amounts of mold and fungus, had a putrid smell and taste, was soft, deformed, and had slimy 

formations,” it defies common sense that any retailer or consumer would purchase the cheese. 

Moreover, there is absolutely no evidence that any retailer or consumer ever received cheese 

from MCP that had all of these apparent defects. It simply cannot be true that the cheese was so 

apparently adulterated on the outside that Mr. Leal should have been aware of its microbiological 

adulterated state, but that his sophisticated customers would have nonetheless accepted and paid 

for the cheese (or Mr. Leal would even have believed or foreseen that they would).

Beyond these deficiencies, the government’s “no value” approach is not supported by its 

cited legal authority. The government relies in part on United States v. Gonzalez-Alvarez, 277 

F.3d 73 (1st Cir. 2002) to support its position. Gonzalelz-Alvarez is inapposite to the instant case 

because the defendant, Gonzalez-Alvarez, was engaged in and intimately aware of the 

adulteration involved in the product at hand (Grade A milk). Thus, the loss to consumers was 

reasonably foreseeable to that defendant. Here, there is no evidence that Mr. Leal knew the 

cheese to be adulterated. To the contrary, he knew that some of the cincho cheese had quality 

issues, but he believed that the cheese had been cleared by the FDA for sale to the public; was 

not subject to a hold order; and was being readily purchased by some of his customers. Thus, 

Mr. Leal did not have reason to believe that the cheese he sold to his customers had “no value.”

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The government also relies on United States v. Bhutani, 266 F.3d 661 (7th Cir. 2001) 

(“Bhutani II”). Bhutani similarly fails to help the government’s case. First, in Bhutani, the 

defendant was aware of the adulterated nature of the drugs being sold. See United States v. 

Bhutani, 175 F.3d 572, 574 (7th Cir. 1999) (“Bhutani I”) (adulteration of drug occurred at the 

direction of the defendant). Second, the rationale for the Court’s holding was that the adulterated 

prescription drug denied the consumers the “benefit of their bargain” “because consumers bought 

drugs under the false belief that they were in full compliance with the law.” Bhutani II ̧ 266 F.3d 

at 669. In contrast, Mr. Leal sold the cheese reasonably believing it had been cleared by the 

FDA for sale in the United States. Additionally, unlike prescription drugs sold in the United 

States, beyond the border inspections, the FDA has no authority to approve imported cheese for 

sale in the United States. PSR, ¶35. That is, imported cheese is not marketed nor reasonably 

understood to be “FDA Approved.” Thus, the Bhutani “benefit of the bargain” loss calculation 

is not facially applicable. 

Finally, the government’s reliance on United States v. Vitek Supply Corp., 144 F.3d 476 

(7th Cir. 1998) is not only misplaced, but demonstrates a fundamental misunderstanding by the 

government of its own case. In Vitek, the Seventh Circuit found no loss to Vitek’s customers 

based, in part, on the fact that both the defendant seller and some of the customers who 

purchased the defendant’s livestock feed were aware that the product had not been FDA 

approved. According to the government, that fact distinguishes Vitek from the instant case 

because “Leal’s customers did not know that the cheese they purchased contained Salmonella 

and extremely high levels of E. coli and Staphylococcus aureus, nor were they aware that the 

cheese could not be lawfully resold in the United States.” Gov. Objections, at 56. What the 

government fails to acknowledge in its argument, however, is that the following is similarly true

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and also distinguishable from Vitek: “Leal’s customers did not know that the cheese they

purchased contained Salmonella and extremely high levels of E. coli and Staphylococcus aureus, 

nor were they [was he] aware that the cheese could not be lawfully resold in the United States.” 

Absent Mr. Leal knowing this, Vitek does not support the government’s position. 

Moreover, Vitek explained that it is difficult to predict consumers’ willingness to 

purchase goods that may have adverse health effects, and in such cases, concluding that all the 

goods sold were valueless is improper. Vitek, 144 F.3d at 491. The exact same conclusion is 

true here. As the Court will hear at the sentencing hearing through a professor of microbiology 

and expert in artisanal cheese production, consumers’ tastes and demands for artisanal cheese is 

quite different from the standards that the FDA imposes on large-scale domestic cheese makers. 

Thus, the government’s presumption that the cincho cheese sold by MCP was of no value is not a 

sound a proposition considering the market demand for this artisanal cheese. 

Finally, with respect to loss, the government objects to the PSR’s recognition that many 

of MCP’s customers received refunds for the cheese, and to the extent there is any loss it should 

be reduced by the refunds to customers. PSR, ¶34. According to the government, those returns

do not count because they were made after the offense was detected. Gov. Objections, at 57. 

But that grossly distorts and exaggerates the offense, and what Mr. Leal’s “victims” knew. As 

Agent Malhalm has made clear, there was no conspiracy to sell adulterated cheese. There was 

only a conspiracy to hide the location of the 311 boxes. Neither Mr. Leal nor any of customers 

knew that the cheese they were returning was adulterated until the recall happened in September. 

The government’s assertion to the contrary, that the “victims” were aware of the criminal 

conduct because the cheese Mr. Leal delivered was moldy or otherwise of bad quality, ignores 

the reality that this exchange occurs routinely in the cheese industry (see Letter from Phil 

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Calhoun, Exhibit E to the Mr. Leal’s Sentencing Memorandum) and that Mr. Leal issued his 

refunds before he knew the cheese was adulterated.8 

B. Victims 

The PSR correctly finds that this offense involved no victims. The government objects to

this finding, arguing that “92 victims suffered an actual loss.” Gov. Objections, at 59. As 

previously noted, “actual loss” means a “pecuniary harm, which means harm that is monetary or 

that otherwise is readily measurable in money.” §2B1.1, Note 3(A)(iii). Here, there is no 

evidence that any person who purchased cincho cheese from Mr. Leal suffered an actual 

pecuniary loss. The government acknowledges that many of Mr. Leal’s customers sold the 

cheese that they received from MCP to their consumers without incident. The rest either rejected 

the cincho cheese or returned it for a refund. Thus, MCP’s customers cannot be considered 

victims under the Guidelines. 

Moreover, the Guidelines make clear that there must be an “actual loss” for a victim to be 

identified. See USSG §2B2.1, Note 1 (defining victim as “any person who sustained any part of 

the actual loss determined under subsection (b)(1)”) (emphasis added). “In cases involving the 

general definition of victim, not only must an individual sustain actual loss (i.e., reasonably 

foreseeable pecuniary harm) in order to be considered a victim, but that loss must also have been 

included in the court’s loss calculation under the guidelines.” (Emphasis added.) “Victim 

Primer (§2B1.1(b)(2),” prepared by Office of General Counsel, U.S. Sentencing Commission 

(March 2013), available at: 

http://www.ussc.gov/sites/default/files/pdf/training/primers/Primer_Victims.pdf (last viewed 

 

8 Moreover, as explained below, the PSR found there are no victims. PSR, ¶22. Thus, the 

government’s argument that victims detected the criminal conduct is unsupported at an even more 

fundamental level than the timing of any discovery. See Johns, 686 F.3d at 460 (discussing the need that 

a “victim” suffer an actual loss for vulnerable victim enhancement to apply). 

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7/8/14). Consequently, even if the Court were to accept the government’s view that the intended 

loss were the entire value of the cincho cheese delivered, a victim only exists if the individual 

suffered an actual loss. See United States v. Kimoto, 588 F.3d 464, 496 (7th Cir. 2009) (“whereas 

the loss calculation can be based on either actual or intended loss, the estimation of the number 

of victims is limited to those who incurred part of the actual loss”) (emphasis added). 

C. Violation of an Administrative Order 

The PSR correctly finds that no enhancement under §2B1.1(b)(9)(C) for violation of an 

administrative order should be applied. The government’s argument is unavailing. From a 

factual standpoint, the government glosses over the fact that Mr. Leal never knew a hold order 

was placed on any of the shipments of cheese involved. While Mr. Leal has readily admitted he 

learned (after the fact) that the first 311 boxes in the April Shipment should not have been sold 

when Ms. Guttierez relayed to him that it had not been cleared by the FDA, there is no concrete 

evidence to suggest that Mr. Leal was ever aware that a hold order had been issued. 

The government writes: “Leal then directed his employee, Gutierrez, to create a false bill 

of lading to cover up the fact that he had sold the cheese in violation of the FDA’s order.” Not 

so. There is no factual support for the assertion that Mr. Leal believed the false bill of lading 

was being used to “ cover up the fact that he had sold the cheese in violation of the FDA’s 

order.” To the contrary, as the PSR correctly found, it is undisputed that the April 2007 hold 

order was never sent to Mr. Leal and no communication came to him from the FDA or otherwise 

stating that a hold order had been issued for the entire April Shipment. PSR, ¶42; see also PSR, 

¶18 (statement of SA Malhalm). 

The government relies on United States v. Mantas, 274 F.3d 1127 (7th Cir. 2001). 

Mantas is inapplicable because in Mantas, unlike here, the defendant received notice of the 

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administrative order. Mr. Leal had no contact with the FDA until September 2007, well after the 

administrative hold orders had been issued, and well after the cheese had been sold. As the 

Seventh Circuit suggested in Mantas, an essential consideration for application of this 

enhancement is whether the defendant received notice of the official order because a knowing 

violation of the order demonstrates “substantial evidence of [the defendant’s] aggravated 

criminal intent.” Id., at 1132. The government cites to no authority for the proposition that 

“meaningful interaction” with a co-conspirator (who was actively hiding that interaction from 

Mr. Leal) is a sufficient basis to impose this enhancement, or that interaction with a coconspirator is suggestive of another defendant’s “aggravated criminal intent.”

D. Substantial Portion of the Fraud Occurred Outside the United States

The PSR correctly determined that a substantial portion of the conduct did not occur 

outside the United States. USSG §2B.1(b)(10)(B) requires that “a substantial part of a 

fraudulent scheme was committed from outside the United States.” (Emphasis added.) Here, 

while it is true that the cincho cheese was made in Mexico, the “fraudulent scheme” described by 

the government does not involve making the cheese. Rather, it involves the steps taken to 

deceive the FDA about where that cheese was in the stream of commerce. All of that conduct 

occurred in the United States. 

The government’s argument to the contrary applies this enhancement as if it read – “a 

condition precedent to the fraudulent scheme occurred outside of the United States” – but the 

enhancement requires “a substantial part of [the] fraudulent scheme” to occur outside the United 

States. Cases that have applied this Guideline illustrate what courts consider to be a "substantial 

part" of the fraud. Compare United States v. Anderson, 580 F.3d 639 (7th Cir. 2009) 

(enhancement appropriately applied where conduct involved up to 250 telemarketers making up 

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to 10,000 calls per week from Canada to further fraud); United States v. Arnaout, 431 F.3d 994 

(7th Cir. 2005) (enhancement appropriately applied where fraud occurred in Chechnya when 

donated funds intended for humanitarian purposes were directed to support Chechen soldiers). 

These cases do not support the government's aggressive application of the Guidelines.9 

E. Sophisticated Means Enhancement 

The PSR correctly concluded that the sophisticated means enhancement is not applicable. 

This enhancement should be applied when “especially complex or especially intricate offense 

conduct pertaining to the execution or concealment of [the] offense” is done. See USSG §2B1.1, 

Note 9(B). The government identifies only the creation of a false bill of lading and boxes of 

cheese. But this type of conduct is not a basis to apply the sophisticated means enhancement. 

See United States v. Baxter, 2006 WL 1155872 (N.D. Ill. 2006) (creation of one false document 

related to an IRS audit does not constitute sophisticated means). As SA Malhalm reported to the 

USPO, a bill of lading is a “standard form” that was altered in this case with correction fluid. 

PSR, ¶10. Again, Mr. Leal does not contest that his agreement to deceive the FDA through these 

artifices constitutes criminal conduct. But, Mr. Leal does not agree that this simple, 

unfortunately conceived fraudulent conduct comes near the threshold of being “especially 

complex or especially intricate.” The PSR correctly concludes that this enhancement should be 

not be applied. 

F. Enhancement for the Defendant’s Role in the Offense 

The PSR correctly concludes that no enhancement should be applied under §3B1.1(b). 

The government disagrees, arguing that “Leal supervised Gutierrez’s role in the criminal 

 

9 The fact that Zurita made some phone calls and sent some emails from Mexico directing Ms. 

Gutierrez and others as to how to handle the FDA does not suffice either. The false statements made to 

the FDA, and the falsified bill of lading, took place in Elmhurst. And distribution of the 311 boxes for 

which the lie was meant to cover all took place in the United States.

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activity.” R. 128, p. 64. From a factual standpoint, there is myriad evidence that Gutierrez’s 

purported criminal activity was directed by Jose Zurita. Just as an example of this issue, SA 

Malhalm, under oath in April 2012 (almost 5 years into the FDA investigation of this case), 

stated that “Gutierrez said that Jose Zurita told her to change information on the bill of lading

and provide it to the FDA inspector who was asking for the whereabouts of the shipment.” See 

Search Warrant, 12M212, at 28 (emphasis added). SA Malham further affirmed under oath that 

“Gutierrez said that Jose Zurita told her not to worry, that there was nothing wrong with 

changing the information on the bill of lading, and that he had already told her that the cheese 

had been released by the FDA.” Id. And, he stated under oath that according to Cynthia 

Gutierrez when cheese was returned by dissatisfied customers, “Jose Zurita and Baldemar Zurita 

told Gutierrez they could ‘wash’ the cheese.” Id., p. 29. This information was corroborated by 

Baldemar Zurita, who told the government that when he and Ms. Gutierrez met with the FDA in 

April 2007 and she needed information to support the lie, Ms. Gutierrez called Jose Zurita on the 

telephone – not Mr. Leal.10 

All of these facts, which were adopted as true by the case agent after five years of 

investigation, contradict the government’s current assertions that:

Leal told Gutierrez to lie to investigators and to create a false bill of lading. Leal 

also directed her to work with Tony Zurita and Flavio Maldonado to ensure that 

returned cheese was “washed” for redistribution to his customers.

 

10 Mr. Leal is prepared to make available Baldemar “Tony” Zurita’s proffer statement sould the 

Court wish to see it, He will not be called as a witness at the sentencing hearing because his change of 

plea has been reset to January 2015.

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Gov. Objections, at 65. They also contradict the government’s argument that “Gutierrez would 

not have lied to a FDA investigator or created a false bill of lading at the behest of a foreign 

vendor.” Id.11 

In addition to these factual issues, the government’s position suffers from legal 

deficiencies. The government argues that the offense involved “at least five participants in this 

offense,” and proceeds to identify Flavio Maldonado as a fifth participant. Yet a “participant,” 

by definition, “is a person who is criminally responsible for the commission of the offense.” 

§3C1.1, Note 1. See, e.g., United States v. Causey, 748 F.3d 310, 322 (7th Cir. 2014) (§3C1.1 

enhancement properly applied in mortgage fraud case because an uncharged participant 

knowingly engaged in fraud by signing false HUD-1 application). The government’s sole basis 

for concluding that Maldonado is a “participant” (as that term is used by the Guidelines) is that 

he assisted in the washing of cheese. As Mr. Leal will demonstrate at the sentencing hearing, 

“washing” of cheese is part of “affinage,” which is the process of artisanal cheese making that 

creates a hard finish to cheese. 

Alternatively, the government argues that the criminal conduct was “otherwise 

extensive.” The government’s error in this approach is that the criminal activity to which Mr. 

Leal pled was not “otherwise extensive.” He agreed to lie to the FDA about the location of 311 

boxes of cincho cheese. The government presumes a larger conspiracy exists. As the case agent 

stated to the probation officer, there was no evidence of a larger conspiracy beyond the 

agreement to lie regarding the location of the 311 boxes of cincho cheese. PSR, ¶18. Compare 

 

11 On October 16, Ms. Gutierrez entered into a plea agreement with a factual basis that flatly 

contradicts in material ways what she previously told the government, and what the government in turn 

reported as true, under oath. She will apparently be called to testify for the government at Mr. Leal’s 

sentencing and will testify to her new version of events. As will become clear, her change in story comes 

only after Mr. Leal pled guilty and after she had been promised substantial benefits for her cooperation, 

and it should not be credited.

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United States v. Figueroa, 682 F.3d 694 (7th Cir. 2012) (noting that otherwise extensive can 

include geographic scope or purposeful inclusion of non-participants in the criminal conduct). 

The PSR correctly concluded that there is no basis to enhance Mr. Leal’s offense conduct based 

on his role in the offense. 

G. Acceptance of Responsibility 

The PSR correctly concludes that Mr. Leal is entitled to a Guideline reduction based on 

acceptance of responsibility. The government, in arguing against acceptance, ignores that Mr.

Leal is the first defendant to plead guilty, well in advance of trial; Mr. Leal provided three 

statements to government agents without having counsel present and two additional statements to 

the government pursuant to proffer protection (each of these sessions produced multiple-page 

reports); and that he offered and took significant steps to assist the government in its 

investigation. See Mr. Leal’s Sentencing Memo. Even after his guilty plea, Mr. Leal has offered 

to assist the government in its efforts to locate Jose Zurita.

Against this ignored backdrop, the government argues that Mr. Leal obstructed justice 

after the commission of the instant offense and therefore does not deserve acceptance. Gov. 

Objections, at 66. The government identifies three statements as obstructive. We address them 

in turn. 

1. “Mr. Leal denied ever working to secure FDA release of imported cheese that he 

purchased from HPI.” Id. The government does not identify any piece of evidence, 

circumstantial or otherwise, that Mr. Leal ever worked to secure the FDA release of 

imported cheese. Mr. Leal’s statement to the government on this point was true at the 

time made, and remains true today. 

2. “On May 19, 2009, agents confronted Leal with emails regarding the false bill of 

lading that was created to trick the FDA investigator into believing that the 311 

cartons of cheese were located in MCP’s Darlington plant. After the agents 

confronted Leal with the emails, Leal said that ‘the cheese was probably shipped to 

Darlington, probably to be shipped to another plant,’ even though Leal admitted in 

subsequent interviews that he knew that the cheese was not in the Darlington plant 

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but had, in fact, been sold to customers. . . . It wasn’t until Leal’s third interview with 

agents, on June 23, 2009, that he admitted that MCP never put any HPI cheese in the 

Darlington plant.” R. 128, p. 66 (emphasis added). In fact, the report prepared by 

the interviewing agent read: 

“Leal initially stated the cheese was ‘probably shipped to Darlington, 

probably to be shipped to another plant.’ Leal then stated it was not stored in 

Darlington, as he ‘did not want it in the plant.’ Leal then stated Zurita, at one 

point stated FDA requested if [MCP] could store some cheese, and Leal told 

him no.”

Leal’s honest admissions in the May 2009 interview that “[the cheese] was not stored 

in Darlington,” and that Leal had told Zurita that MCP would not store cheese for 

him, were admissions that the cheese was never stored in MCP’s Darlington plant. 

As SA Malham stated to the USPO, “Leal participated in multiple investigative 

interviews, through which he was cooperative. Although the defendant was not 

entirely forthcoming during the first interview with authorities . . .the defendant was 

forthcoming in subsequent interviews.” PSR, ¶21. The government’s position to the 

contrary is completely unsubstantiated. 

 

3. Finally, the government argues that Mr. Leal’s failure to disclose (not denial of) the 

“washing” of cheese in an early interview is another basis for denying acceptance of 

responsibility. R. 128, p. 66. The government does not suggest that agents had asked 

Mr. Leal about “washing” cheese, so it is unclear how Mr. Leal’s failure to tell agents 

everything about the instant conduct can be a basis for denying acceptance of 

responsibility. 

Perhaps more disturbing is that the government had acknowledged that Mr. Leal was entitled to 

acceptance of responsibility under an earlier plea agreement offered to Mr. Leal – an agreement 

that also included an agreement for a recommendation of 66% of the low end of the applicable 

guideline range, and Mr. Leal’s ability to argue for any appropriate sentence. None of the 

conduct to which the government now points occurred after that offer was made, meaning there 

is no basis for the government’s about face. 

Equally as disturbing is the unwarranted difference in the government’s treatment of Mr. 

Leal compared to Ms. Gutierrez. The government intimates that Mr. Leal’s aggressive attack of 

the government’s sentencing approach calls into question his acceptance of responsibility. See 

PSR, ¶67. Yet, as this Court knows, the government entered into a plea agreement with Ms. 

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Gutierrez that does not require her to accept the government’s guidelines approach, yet still 

offers her the ability to gain acceptance of responsibility. Apparently offended by Mr. Leal’s 

counsels’ decision to question the government’s view of the Guidelines, the government has 

effectively punished Mr. Leal by, inter alia, arguing that he is not entitled to acceptance of 

responsibility despite pleading guilty to three counts; being the first defendant to plead guilty; 

presenting himself for multiple, protracted interviews (three of which were not proffer 

protected); voluntarily providing emails to the government that served to further its 

investigation; voluntarily producing his laptop for government examination; and, offering to 

assist the government in locating Jose Zurita, and stemming the continuing flow of cheese into 

the United States. 

The PSR correctly determined that Mr. Leal is entitled to acceptance of responsibility. 

The government’s objection should be overruled. The government’s position is completely 

unjustified and demonstrates the lack of fairness with which Mr. Leal has been treated by the 

government. 

Count Five

A. Substantial Interference 

The PSR correctly concludes that Mr. Leal’s conduct did not result in a substantial 

interference with the administration of justice, and therefore, §2J1.2(b)(2) is not applicable. The 

government disagrees, arguing that Mr. Leal’s conduct resulted in the government expending 

“significant resources” to investigate the case. R. 128, p. 69. But the government’s relies on 

misstatement of facts, and ignores the lead case agent’s candid – and contrary –

acknowledgement that Mr. Leal’s conduct did not result in a substantial expenditure of 

government resources. PSR, ¶51.

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As an initial matter, the government falsely states “Leal and his co-conspirators lied to 

the FDA investigators on April 20, 2007, claiming that 311 cartons of cheese that Leal had 

previously sold were in MCP’s Darlington plant.” Gov. Objections, at 68. As the government 

well knows, Mr. Leal did not speak with the FDA regarding these issues until September 2007. 

Second, in defending assertions that the “FDA expended significant resources,” the government 

falsely states that the FDA made “many fruitless attempts to communicate with HPI and MCP.” 

Id., at 60 (emphasis added). As the government well knows, there is no evidence or information 

(reliable or otherwise) that the FDA attempted to contact MCP to discuss the cincho cheese issue 

(other than Ms. Gutierrez’s encounter with the FDA inspector on April 20, 2007 – which was not 

“fruitless”). Moreover, as the PSR correctly notes, the government identifies a litany of events 

that other individuals did that may have caused delay, but Mr. Leal had no control over their 

conduct. PSR, ¶16. Nor did he even know about it. 

Finally, from a legal standpoint, all of the “substantial resources” identified by the 

government are typical costs associated with conducting a criminal investigation (PSR, ¶51), 

and, from a legal standpoint, are generally not considered an appropriate basis for applying this 

enhancement. See United States v. Johnson, 485 F.3d 1264, 1271-72 (11th Cir.2007) (noting 

that upward adjustment could not be based on “expenses associated with prosecuting [the] 

underlying perjury offense”); United States v. Norris, 217 F.3d 262, 273 (5th Cir.2000) 

(concluding that “expenses incurred with the investigation and prosecution” of defendant's 

perjury offense may not be considered, “[o]therwise, every perjury conviction would carry this 

enhancement”); United States v. Sinclair, 109 F.3d 1527, 1539 (10th Cir.1997); United States v. 

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Duran, 41 F.3d 540, 546 (9th Cir.1994); United States v. Jones, 900 F.2d 512, 522 (2d 

Cir.1990).12 

B. Enhancement for Altering an Essential or Especially Probative Document

The PSR correctly concludes that no enhancement should be applied for the “selection of 

an essential or especially probative record, document, or tangible object.” §2J1.2(b)(3). 

Focusing on the bill of lading, the government unpersuasively disagrees with the PSR’s correct 

conclusion. The government cites to Mr. Leal’s plea agreement as support for its position that 

Mr. Leal was engaged in a wide-spread scheme, and the bill of lading was “especially probative” 

as it obstructed the FDA from finding the location of known adulterated cheese. R. 128, p. 70. 

As the government well knows, however, Mr. Leal did not plead to a wide-ranging scheme to 

sell adulterated cheese. He pled to a simple conspiracy to lie to the FDA. Additionally, the 

government again misstates facts when it alleges: “[b]ecause Leal and his co-conspirators lied to 

the investigator . . ..” As has been made readily apparent, Mr. Leal never communicated with the 

FDA inspectors in April 2007, and therefore, could not have lied to the investigator. 

The background note to §2J1.2 states that “[t]he specific offense characteristics 

[including this enhancement] reflect the more serious forms of obstruction.” The undersigned 

has identified three cases where this enhancement has even been discussed by an appellate court. 

None is helpful in discerning when this enhancement is appropriately applied. However, a onepage standard business document that can be prepared and executed by a low level clerk clearly 

cannot be the type of “essential” and “especially probative” record to which this Guideline is 

intended to apply. Cf. Baxter, 2006 WL 1155872 (creation of one false document related to an 

IRS audit does not constitute sophisticated means). As is apparent, Mr. Leal made a horribly 

 

12 Mr. Leal notes that this position is contrary to a Seventh Circuit holding on this issue as applied 

in a different factual setting. United States v. Hayes, 358 Fed.Appx. 685 (7th Cir. 2009).

Case: 1:12-cr-00290 Document #: 140 Filed: 10/17/14 Page 30 of 32 PageID #:938
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misdirected decision as to how to handle an FDA inquiry. Rather, than addressing this issue 

directly, Mr. Leal agreed to deceive the FDA if they sought inspection of the cheese at the 

Monroe, WI facility. While illegal, this is not the “more serious forms of obstruction” to which 

this enhancement is intended to apply. 

V. CONCLUSION

Not a single person was injured or otherwise harmed as a result of the conduct in this 

case. Not a single wholesaler, store owner, or consumer lost money as a result of the conduct in 

this case. Indeed, tens of thousands of pounds of cincho cheese were sold through retailers to 

customers in the United States, and thousands of people ate it and enjoyed it – including the three 

shipments of “adulterated” cheese at issue here.

This is not a case of an avaricious cheese producer knowingly selling adulterated cheese 

to line his own pockets. Instead, this is a case of the government misconstruing certain 

undisputed facts and seeing a malicious grand conspiracy where none exists. Fortunately, the 

PSR properly assessed the evidence and facts presented and reached the correct conclusion – that 

an advisory guideline range somewhere around 10 to 16 months is the appropriate place to begin 

when imposing a sentence on Mr. Leal.

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For all the reasons noted above, and set forth in Mr. Leal’s sentencing memorandum, Mr. 

Leal respectfully requests this Court to categorically reject the government’s objections to the 

PSR, and for this Court to accept the PSR’s factual findings and sentencing conclusions.

Respectfully submitted, 

MIGUEL LEAL

By: s/ M. David Weisman

One of his attorneys

M. David Weisman

ARDC #6230714

Miller Shakman & Beem LLP

180 N. LaSalle St., Suite 3600

Chicago, IL 60601

Telephone: (312) 263-3700

Fax: (312) 263-3270

dweisman@millershakman.com

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