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Proceedings recorded by stenotype; transcript

produced by computer-aided transcription.

1

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

- - -

UNITED STATES OF AMERICA, : Case No. 1:18-cr-109-1

:

Plaintiff, : Sentencing

: Tuesday, May 10, 2022

- v - :

: 1:00 p.m.

ANDREY SHUKLIN, et al., :

:

Defendants. : Cincinnati, Ohio

- - -

TRANSCRIPT OF PROCEEDINGS

BEFORE THE HONORABLE DOUGLAS R. COLE, DISTRICT JUDGE

- - -

For the Plaintiff: MATTHEW C. SINGER, ESQ.

MEGAN GAFFNEY PAINTER, ESQ.

U.S. Department of Justice

U.S. Attorney's Office

221 E. Fourth Street, Suite 400

Cincinnati, Ohio 45202

For the Defendant: MARTIN S. PINALES, ESQ.

STEPHANIE F. KESSLER, ESQ.

ERIC G. ECKES, ESQ.

455 Delta Avenue, Suite 105

Cincinnati, Ohio 45226

Law Clerk: Brian S. Pollock, Esq.

Courtroom Deputy: Scott M. Lang

Court Reporter: M. Sue Lopreato, RMR, CRR

Potter Stewart U.S. Courthouse

Southern District of Ohio

100 East Fifth Street

Cincinnati, Ohio 45202

513.564.7679

- - -

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P R O C E E D I N G S

(In open court at 1:02 p.m.)

- - -

THE COURT: Good afternoon. We're here this

afternoon in open court and on the record in the matter of

United States of America versus Andrey Shuklin. It's case

number 1:18-cr-109, and it's defendant 1. It's the Court's

understanding we're here this afternoon for purposes of

sentencing.

Could I ask counsel to please enter their appearances for

the record.

MR. SINGER: Good afternoon, Your Honor. Matt Singer

and Megan Gaffney Painter for the United States.

THE COURT: Good afternoon.

MR. PINALES: For Mr. Shuklin, Your Honor, Mark

Pinales and Eric Eckes.

And we contacted the Court earlier, and Stephanie is in

my magic little box here. And she is plugged in, but I want

to advise the Court there is no recording going on.

THE COURT: Very good. I appreciate that. Thank

you, Mr. Pinales. Good afternoon.

And, sir, are you Andrey Shuklin?

THE DEFENDANT: Yes, sir.

THE COURT: How would I correctly pronounce your

name? Am I doing it right?

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THE DEFENDANT: You are.

THE COURT: Very good. And, sir, are you represented

in this proceeding by Martin Pinales, the attorney sitting

next to you?

THE DEFENDANT: Yes.

THE COURT: And, sir, we have an interpreter who is

present for you today. Do you need an interpreter to

understand English, sir?

THE DEFENDANT: In general, no, but if I will have

some problem, I will ask.

THE COURT: Very good. So there is an interpreter

who is available. If you have any questions about anything

I'm saying and would like a translation, he will be able to

provide it for you. But other than that, we won't use him

right from the get-go, all right, sir?

THE DEFENDANT: Thank you.

THE COURT: Very good. We better swear in the

interpreter just in case we need him, Scott.

(Interpreter sworn.)

THE COURT: Mr. Pinales, I'm correct, we're here for

sentencing in this matter?

MR. PINALES: Yes, Your Honor.

THE COURT: Okay. So I anticipate proceeding as

follows. It's first going to take me a few minutes to

establish the record for purposes of sentencing, and then

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there are a number of disputes with regard to the sentencing

guidelines calculation. I anticipate listening to the parties

with respect to those disputes and resolving those.

And then I anticipate listening to any statements that

the lawyers may wish to make with regard to sentencing once

we've determined the appropriate guideline range, as well as

any statement that Mr. Shuklin may wish to make, if he wishes

to make any.

So on January 25, 2021, the defendant, Andrey Shuklin,

appeared before this Court and pled guilty to one count of

Racketeer Influenced and Corrupt Organization, otherwise known

as RICO, Conspiracy, in violation of Title 18,

Section 1962(d), of the United States Code. This charge was

contained in Count 1 of a document called an indictment.

In doing so, Mr. Shuklin pled guilty to a Class C felony,

providing a sentence of up to 20 years' imprisonment, up to

three years of supervised release, restitution, a $100 special

assessment, and a fine that is the greater of $250,000, or not

more than the greater of twice the gross gain or twice the

gross loss. Mr. Shuklin's plea agreement also requires

forfeiture.

Mr. Shuklin pled guilty to that charge pursuant to a plea

agreement under Federal Rules of Criminal Procedure

11(c)(1)(A). And, Mr. Shuklin, what that means is that the

plea agreement did not include an agreed sentence or even a

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recommended sentence, but rather left sentencing to the

Court's discretion.

That said, the plea agreement did include some discussion

of the parties' view of the appropriate guidelines treatment,

a topic to which the Court will return in greater detail in a

bit.

Since the time the Court accepted Mr. Shuklin's plea, the

Court has received the probation office's initial presentence

investigation report filed on March 3, 2021, and the final

presentence investigation report filed on April 12, 2021.

The Court has also received sentencing memoranda from the

defense and the government, as well as their accompanying

exhibits, and a variety of victim impact statements.

Before proceeding further, I want to make sure that the

attorneys and Mr. Shuklin have received that information as

well.

Mr. Singer, have you received a copy of these documents?

MR. SINGER: Yes, Your Honor.

THE COURT: Mr. Pinales, have you received a copy of

these documents?

MR. PINALES: Yes, Your Honor, and we have shared

them with our client.

THE COURT: Very good. And, Mr. Shuklin, have you

received a copy of these documents?

THE DEFENDANT: Yes, Your Honor.

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THE COURT: And have you had an opportunity to

discuss these documents with Mr. Pinales?

THE DEFENDANT: Yes.

THE COURT: Very good. So at this point, I would

like to briefly discuss the factual findings that I will use

for Mr. Shuklin's sentencing.

First, I'll note Mr. Shuklin entered a Rule 11(c)(1)(C)

agreement, and that plea agreement contained a statement of

facts that Mr. Shuklin signed and admitted during the plea

hearing. So absent any objection, I will rely on those facts.

Any objection from the government?

MR. SINGER: No, Your Honor.

THE COURT: Any objection from the defense?

MR. PINALES: No, Your Honor.

THE COURT: The facts in the statement of facts

attached to the plea agreement shall be included as part of

the record for sentencing.

Beyond that, ordinarily, I would also rely on the facts

contained in the presentence investigation report. But before

doing so, I would note that Mr. Shuklin has objected to

certain factual findings in the report.

Some of those factual findings relate directly to the

guidelines calculations and, thus, might impact those

calculations.

The relevance of the other factual objections is less

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clear to the Court, but the Court's suggestion would be to

address all of Mr. Shuklin's factual objections after the

Court explains the probation officer's guidelines calculation,

and we can talk about the extent to which we need to resolve

any of those factual objections.

So is that approach acceptable to the defense,

Mr. Pinales?

MR. PINALES: Yes, Your Honor, but let me state to

the Court that we have spoken to Mr. Singer, and we're going

to submit on our objections and memorandum, Your Honor.

THE COURT: So you don't anticipate arguing further

on any of the sentencing guidelines issues, Mr. Pinales?

MR. PINALES: Yes, that is my understanding is that

both the government and I are submitting to the Court, because

I'm sure the Court has read it.

THE COURT: I have read it, that is true.

Any objection to that approach from the government,

Mr. Singer?

MR. SINGER: Your Honor, I had a conversation with

defense counsel. We are prepared to rest on the un-objected

to statement of facts in the plea agreement, the statement of

facts that is in the PSR that support the enhancements.

To the extent the Court -- we do have a witness that is

present.

THE COURT: Well, that's what I understood from your

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filings, that you intended potentially to put on a witness

this afternoon, so I'm a little confused as to where things

stand now.

MR. SINGER: We had intended to call the witness,

Your Honor, specifically to address the leadership enhancement

that is at issue.

After speaking with defense counsel, and our

understanding that they are not going to -- that they're going

to submit on the papers, we believe that what is before the

Court now is sufficient to support all of the enhancements.

However, if the Court would like additional facts to

support, in particular, the leadership enhancement, we do have

a witness that we're ready to put on.

But as we sit here, we are prepared to rest, given that

we believe that the facts that are before the Court are

sufficient to support the enhancement.

THE COURT: So I'm a little confused at this point,

then, Mr. Singer.

I mean, so you're saying you're willing to rest on the

papers if the Court's going to rule in your favor, but if the

Court's not going to rule in your favor, you would like the

opportunity to put on a witness, or what are you saying?

MR. SINGER: Well, Your Honor, we do have additional

facts that we are prepared to support. We do not think they

are necessary. We're in a position to rest on the facts as

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they are.

THE COURT: How long do you anticipate it would take

to put a witness on?

MR. SINGER: Ten minutes.

THE COURT: Oh, okay. Well, I mean, I'm sort of not

inclined to, sort of, announce the ruling and then have the

government say, well, we've got additional facts we can put on

if the ruling happens to be in favor of the defendant.

So I would encourage you to put on whatever record you

want to create with regard to these issues, and then the Court

will move on and we'll move forward.

So if you have a witness here, that's fine.

MR. SINGER: May I take a moment, Your Honor?

THE COURT: You may.

MR. SINGER: Okay. Your Honor, we would call Special

Agent in charge of the U.S. Department of Justice, Andrea

Kropf.

THE COURT: I think that's a good idea. I think it

would maybe be more appropriate in about five minutes, so why

don't we do that then.

MR. SINGER: Absolutely, Your Honor. I

misunderstood.

THE COURT: No. That's fine. I was just trying to

get our game plan here, so... all right.

So in terms of sentencing itself, under 18 United States

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Code, Section 3553, the Court's job is to impose a sentence

that is sufficient but not greater than necessary to comply

with the purposes of sentencing.

I'm required to consider a number of factors in making

that determination. For example, the statute requires me to

consider, among other factors, the nature and circumstances of

the offense, the history and characteristics of Mr. Shuklin,

the kinds of sentences available, and the sentencing range

proposed by the non-binding sentencing guidelines.

Before turning to the various other statutory sentencing

factors, I want to begin with the last example that I just

mentioned, which is the sentencing guidelines.

United States Sentencing Commission's sentencing

guidelines seeks to quantify the nature of the offense on one

hand and the defendant's criminal history on the other and,

based on that combination, it provides a recommended range of

sentences.

Although the sentencing guidelines do not bind my

decision, I'm still required to establish the guideline

calculations that the Court believes applies to Mr. Shuklin's

offense here.

Now, as my description suggests, this calculation rests

on what amounts to a graph with two axes. The horizontal axis

is for prior criminal convictions, if any; the more of them,

the further out along that horizontal axis we go.

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The vertical axis relates to the nature of the offense;

the more severe the offense, the further along that axis we

go. And the result, created by the combination of the two,

will identify a box on the graph that identifies a recommended

sentence.

And I need to establish on the record the guideline

calculation or, in other words, sort of that box that applies

to Mr. Shuklin's offense here.

Now, that's not an entirely straightforward undertaking,

as Mr. Shuklin objects to aspects of the presentence

investigation report's recommended sentencing guidelines

calculation.

So I intend to proceed as follows. First, I'll go

through the presentence investigation report's recommendation,

noting the areas of objection.

Then I'll discuss Mr. Shuklin's objections to the

presentence report and the government's responses. And then

I'm going to give the government an opportunity to put on the

witness, as they just mentioned, and then hearing further

argument, although from Mr. Pinales, it sounds like the

parties may be resting on the arguments in their papers.

The base offense to which Mr. Shuklin has pled guilty is

one count of RICO Conspiracy, in violation of Title 18,

Section 1962(d), of the United States Code. The guideline for

that violation is found in Section 2E1.1 of the sentencing

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guidelines.

Under that section, the base offense level is either 19,

or the offense level applicable to the underlying racketeering

activity, whichever is higher.

The underlying racketeering activity applicable to

Mr. Shuklin is wire fraud, as he engaged in the emailing of

fraudulent documents to other coconspirators.

Wire fraud is governed by the United States Sentencing

Guidelines, Section 2B1.1. And here the probation officer

found that the offense level applicable to wire fraud under

that section resulted in the higher guideline. Thus, that is

the guideline that the PSR used to calculate the conduct in

this case.

According to Section 2B1.1(a)(1) of the guidelines, the

base offense level for wire fraud is seven. Pursuant to

Section 2B1.1(b)(1)(I), 16 are added because of the loss at

issue here, which was a total of $2,467,807.39, exceeds

$1.5 million but was less than $3.5 million.

Pursuant to Section 2B1.1(b)(2)(A)(i), two levels are

added because the offense involved 10 or more victims. In

accordance to the above, the adjusted offense level, then, for

the wire fraud predicate offense is a 25.

The report indicates that a further two levels should be

added, under Section 2B1.1(b)(10)(C), if the offense involved

sophisticated means. Application Note 9(B) instructs that

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sophisticated means encompasses especially complex or

especially intricate offense conduct pertaining to the

execution or concealment of the offense. Here the report

found that the two-level increase was proper.

In that regard, the report notes that Mr. Shuklin

operated the moving enterprise out of the business address in

Hollywood, Florida. However, he also operated the affiliated

companies associated with the moving enterprise in Ohio,

Maryland, North Carolina, Illinois, Texas, California,

Connecticut, Colorado, and Missouri.

Because the report found that Mr. Shuklin concealed the

offenses committed against the victims as he opened new moving

companies once a previous company was shut down by federal

investigators, this offense involved sophisticated means. If

the Court accepts that application, that would increase the

offense level from 2 to 27.

As noted, Mr. Shuklin objects to this two-level

enhancement, and the Court will address that objection in a

moment.

Pursuant to Section 2B1.1(b)(ii), two levels are added if

the offense involved the production or trafficking of any

authentication feature. Application Note 10(A) states that

authentication feature as the meaning given in 18 United

States Code, Section 1028(d)(1). That statute, in turn,

defines authentication feature as any hologram, watermark,

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certification, symbol, code, image, sequence of numbers or

letters, or other feature that either individually or in

combination with another feature is used by an issuing

authority on an identification document, document-making

implement, or means of identification to determine if the

document is counterfeit, altered, or otherwise falsified.

18 United States Code, Section 1028(d)(7) further states

that the term "means of identification" means any name or

number that may be used, alone or in conjunction with any

other information, to identify a specific individual,

including name, Social Security number, date of birth,

official state or government driver's license or

identification number, alien registration number, government

passport number, employer or taxpayer identification number.

Here the report found that this two-level increase should

apply. Specifically, the report found that Mr. Shuklin, on at

least two occasions, and acting in concert with the other

members of the conspiracy, was altering other state-issued

driver's licenses in an effort to identify individuals as

owners of companies affiliated with the moving enterprise.

Therefore, according to the report, this offense,

involved with the production of an authentication feature and

a two-level increase, is appropriate, bringing the offense

level to 29. Again, Mr. Shuklin has objected to that

two-level enhancement.

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Finally, Section 3B1.1(a) instructs a four-level increase

is appropriate if the defendant was an organizer or a leader

of the criminal activity that involved five or more

participants.

And the report found that this four-level increase was

appropriate. Specifically, the report found that Mr. Shuklin

was identified as the president of the moving enterprise, and

the conspiracy involved 11 codefendants and a number of

unidentified coconspirators.

The report also states that Mr. Shuklin coordinated and

directed lower level of employees of the moving enterprise and

other members of the conspiracy and associates of the

affiliated companies in a moving enterprise.

The report further observes that Mr. Shuklin was aware of

the illegal activities associated with the moving enterprise,

and was involved in email communication with other members of

the conspiracy in order to facilitate and further that

conspiracy. Additionally, Mr. Shuklin benefitted financially

more than any other defendant.

Accordingly, the report found that a four-point increase

was appropriate, which would bring the total to 33.

Mr. Shuklin also objects to this four-point increase.

Finally, a three-level decrease is appropriate, pursuant

to Sections 3E1.1(a) and (b), based on Mr. Shuklin's

acceptance of responsibility and timely plea. That means the

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final offense level, as calculated by the probation officer,

is 30.

Next the Court observes that Mr. Shuklin has no previous

criminal history. That means his criminal history score is

zero, and his criminal history category is one, which is the

lowest of the six categories.

Based upon a total offense level of 30 and a criminal

history category of one, the recommended sentence would be

97 to 121 months. This range falls in Zone D of the

sentencing table.

United States Sentencing Guideline Section 5C1.1(f)

provides that if the applicable range is in Zone D of the

sentencing table, the minimum term shall be satisfied by a

sentence of imprisonment, meaning that the guidelines

recommend that Mr. Shuklin is ineligible for probation.

The maximum term of imprisonment, by statute, is

20 years. The recommended term of supervised release under

the guidelines is one to three years. By statute, the Court

may impose a term of supervised release of not more than three

years.

The statute also includes the potential for a fine. And

under Title 18, Section 3571(b) and (d), the maximum fine is

twice the loss at issue or, in other words, a total of

$4,935,614.78.

The guidelines, meanwhile, suggest a fine range for this

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offense from $30,000 to that $4.9 million number.

Under 18 United States Code, Section 3013, Mr. Shuklin

must pay a $100 mandatory special assessment. And under

18 United States Code, Section 3663A, Mr. Shuklin must pay

restitution. It's the Court's understanding that the total

amount of restitution remains under investigation at this

time.

Mr. Shuklin's plea agreement also provides for

forfeiture.

With that, I believe I've established on the record the

sentencing guidelines calculations and recommendations, and

with that, I now turn to Mr. Shuklin's objections.

First, as noted, Mr. Shuklin objects to a two-level

enhancement for use of sophisticated means. In particular, he

argues that he did not relocate or participate in the

relocation of the scheme to another jurisdiction to evade law

enforcement or regulatory officials and, thus, he argues that

his conduct did not involve sophisticated means.

So as to that objection, does defense counsel wish to be

heard beyond their papers, Mr. Pinales?

MR. PINALES: No, Your Honor.

THE COURT: Does the government wish to be heard on

that issue?

MR. SINGER: No, Your Honor.

THE COURT: Very good. So next Mr. Shuklin objects

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to the two-level enhancement the probation officer applied for

producing or trafficking of an authentication feature. That

enhancement was based on the probation officer's finding that

Mr. Shuklin altered state-issued driver's licenses in an

effort to identify individuals as owners of companies

affiliated with the moving enterprise.

Mr. Shuklin objects he did not alter state issued

driver's licenses and, thus, this enhancement is not

appropriate.

Mr. Pinales, do you wish to be heard further as to that

objection?

MR. PINALES: No, Your Honor.

THE COURT: Does the government wish to be heard

further?

MR. SINGER: No, Your Honor.

THE COURT: And, Mr. Pinales, am I correct that your

principal objection on that front is that Mr. Shuklin is not

personally involved in that activity, or what do you mean "he

wasn't involved"?

I mean, I've seen the emails in which he receives at

least one, I think it was two, driver's licenses that had been

altered to change the name of the person identified on the

driver's license.

MR. PINALES: Yes, Your Honor. He did receive them

but he didn't do them.

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THE COURT: I understand that, but does it have to be

the defendant, or isn't it just that the offense involved the

use of all of it?

MR. PINALES: I submit on our memorandum, Your Honor.

THE COURT: Okay. And, Mr. Singer, I take it it's

the government's position that it doesn't really matter if a

given conspirator was involved, but rather the question is

whether the offense involved the conduct?

MR. SINGER: That's correct, Your Honor.

THE COURT: Yes. I think that's correct, and I'm

going to apply that enhancement.

I should have also made clear on the first one that I do

believe that the enhancement for use of a sophisticated means

is appropriate, given the web of various companies that were

set up, and the ways in which they were located.

I think there was an effort made to sort of stay one step

ahead of the regulators by creating various fictitious

entities and/or non-fictitious entities as successors to

companies that were going out of business, changing locations,

and all of that, so I do believe that enhancement applies.

So then there's the final enhancement, which is

Mr. Shuklin objects to the four-level enhancement applied for

leading or organizing a criminal activity of five or more

participants. He argues that he was not the president of all

the affiliated companies. He acknowledges he had a leadership

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role in certain aspects of the moving enterprise, but notes

that this enhancement applies to organizers or leaders of,

quote, criminal activity.

He maintains that his involvement in and awareness of the

criminal activity varied and, overall, does not warrant an

organizer or leader enhancement.

Probation officer stated that Mr. Shuklin was the

president, and notes that he coordinated and directed

lower-level employees, other members of the conspiracy, and

associates of the affiliated companies, and that he was aware

of the illegal activities associated with the moving

enterprise, and was involved in email communications with

other members of the conspiracy in order to facilitate and

further the conspiracy.

And then he also benefitted financially more than the

other defendants, which is a fact that the Court also has to

take into account.

I take it, Mr. Pinales, you don't have anything further

you want to add on that topic?

MR. PINALES: I have nothing to add, but I would like

the ability of cross-examining the agent.

THE COURT: Absolutely.

And, Mr. Singer, now I believe would be an appropriate

time to call your witness if you wish to supplement the

factual record.

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MR. SINGER: Your Honor, I apologize for

flip-flopping on this and going back and forth. We're not

going to present additional evidence, but we'd like the

opportunity to present additional argument, if that's --

THE COURT: You may. This would be the appropriate

time for that as well.

MR. SINGER: Your Honor, the government has presented

evidence attached to the sentencing memos. I'm not going to

repeat that here, but I would like to highlight certain facts

that are in the statement of facts and certain facts in the

PSR that I think establish this enhancement.

The defendant admitted he owned the affiliated companies

that made up the moving enterprise while he was working there;

that the businesses were doing business in Florida, where he

was working.

He admitted that it was the practice and scheme of the

moving enterprise to provide material lists, material false

statements to regulators, to third-party customers, and this

facilitated the fraudulent scheme.

He admitted that the enterprise reincarnated into

numerous new companies while he was the owner and working for

the enterprise.

In paragraph 51 of the PSR, this is an uncontested

paragraph for the statement of facts. It makes clear that his

name is on the bank accounts; that he was benefiting more than

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any other member of the enterprise during the period. Again,

these are uncontested facts. And, in fact, he was using money

from the proceeds of the enterprise through the bank accounts

that he was -- had access to pay his mortgage.

So this is the owner of the enterprise, who is working at

the main business location, knowing that the enterprise is

committing fraud, having control over the bank records, and

using the bank records, the funds in the bank accounts for his

own personal needs, I think, one of the most material facts,

set of facts that are in the statement of facts.

So the defendant admits in the PSR objections that he

was -- had a leadership role in certain aspects of the

enterprise, but the statement of facts states that he made --

the enterprise made misrepresentations to federal authorities,

made misrepresentations to the fraudulent ideas that we've

already discussed in the other enhancements, made

misrepresentations to customers and the Department of

Transportation, lied about the cubic feet, extorted customers

and overcharged customers. That's the entire breadth of the

enterprise.

That is the functioning of the moving company;

interactions with the Department of Transportation,

interactions with customers, interactions with third parties

that they relied on to make the enterprise work.

He was the leadership. He was in a leadership role, and

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he admits he was in a leadership role with regard to the

company. That was the company.

The company was based on fraud. It was based on

misrepresentations. So I believe that, based on the facts

that are before the Court now, this enhancement is

sufficiently supported.

THE COURT: Thank you, Mr. Singer.

Mr. Pinales, do you wish to be heard?

MR. PINALES: Yes, briefly, Your Honor. I think, in

reading the agent's reports, in reading the PSR, and in

looking at the totality of this, we're not arguing with the

Court that he was a leader. We don't believe he was the

kingpin. And we note that it is --

THE COURT: Well, can't there be more than one

leader? Can't there be more than one person who --

MR. PINALES: I believe there certainly can be more

than one leader and, in this case, I think there was more than

one leader. But if we're going to stack them against each

other, he is a lesser leader than one of the other leaders.

THE COURT: And I appreciate that. But under the

guidelines, it seems to me the question is whether he falls

within the category of leader. And you've already admitted

more than one person may fall into that category. But I think

once you're in there, it isn't like somebody gets four,

somebody gets three, and somebody gets two, right? It's

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either you're in the category or you're not.

MR. PINALES: I hear you, but I want the Court to

understand that it's very uncontested, throughout all of the

reports that when he came and when he started into this

company, he didn't even speak English.

I mean, he came to this country not speaking English.

He's learned English since he's been here, but I believe that

he was used. That's about the best way I can relate that.

I'm not stating he wasn't a leader. I don't think he was the

leader.

THE COURT: And I think that that kind of comes

through. I don't know that I would even push back too hard

against that. I guess the question before the Court is

whether, under the sentencing guidelines, someone who is a

leader, even if not necessarily the leader, still qualifies

for a four-level enhancement.

And I think the way I read the sentencing guidelines, it

appears to me that anyone who is entitled the label of

"leader" qualifies for the four-level enhancement.

And so, Mr. Pinales, notwithstanding your argument, and

notwithstanding my appreciation for the facts that you've

raised, the Court concludes that the four-level enhancement

for being a leader was appropriately applied under the

presentence report.

So it's the Court's intention to use the presentence

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report calculation, and that the applicable offense level for

the offense here that the Court will use is 30, and the

criminal history category is one, as I've already noted. I

don't think there's any dispute about that.

So based on that, the Court concludes that the advisory

guideline sentencing range, and I stress it is only advisory,

is 97 to 121 months.

I don't believe there's any need to address any of the

other factual objections that have been raised in the parties'

papers, although to the extent the parties want to refer to

their versions of the facts in connection with any comments

they may wish to make about sentencing, they are certainly

free to do so.

But, Mr. Pinales, in your view, is there any reason we

need to go line by line through those factual objections?

MR. PINALES: Not at all, Your Honor.

THE COURT: Very good. So with that, I think I've

established the guidelines calculation that I intend to use on

the record, and I am prepared to hear from the parties with

regard to sentencing itself.

Mr. Singer, does the government wish to be heard on the

matter of sentencing?

MR. SINGER: Yes, Your Honor.

THE COURT: Very good.

MR. SINGER: Your Honor, the government believes that

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a guideline sentence is appropriate here. Like I just

mentioned, the fraud in this enterprise was pervasive. It was

part of every aspect of how it operated.

And I think stepping back and viewing what occurred

through the eyes of the customer is an important process here.

The Court has received victim impact statements from a number

of victims.

And I'll start that by saying this process of

reincarnation, reincarnate carriers, bumping after goods are

loaded, hostage-type situations, this is pervasive in the

industry.

And the individuals who started this, the defendant and

others, they didn't make this up, but they learned it. They

saw what the industry was doing, and they embraced it.

And they embraced it for many years, despite the fact

that they knew that regulators were looking at them, they knew

they were being investigated. There was a search warrant in

2017 at the premises.

FBI and Department of Transportation came in, took a

bunch of evidence, interviewed people and, despite that, they

continued doing the exact same thing. They continued

reincarnating into new entities, planning for the next

company.

Coming back to the customer. We have a person who has no

background in the moving industry. They don't know one

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company from the next. They all look the same. They all know

that it's going to be expensive, and they know that they're

going to be moving their most precious goods.

They are relying on the companies who are in this

position of authority who can, you know, charge what they

want, and the customer really has to rely on the

representations that they're getting from this company.

And they have to rely on what they read from the

Department of Transportation. Is this a legitimate company?

Is this DOT number that allows them to move household goods,

is this legitimate? Are they the type of company that I can

trust my goods with? Those are all lies.

Oftentimes, these customers picked this company because

they got a good deal on the front end. They got a nice load

quote, they beat the competition. And what they saw online

supported the fact that this was a legitimate company that was

going to do them well.

They signed the binding contract, which is what they

believed, based on what they knew and researched, that this

was not going to move. This was not going to change. I know

what I'm going to pay. I'm going to owe $5,000 for this move.

I've budgeted it. This is what I'm going to do.

What happens completely floors them. The company shows

up, they load the goods on to the truck, and all of the sudden

everything changes. They no longer have possession of all

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their worldly possessions. They no longer have possession of

the things that they care -- the possessions that they care

most about, and they're told that they have to pay more. They

have to pay an additional cost to get those goods back if they

want them.

And this happened time and time and time again. What

they didn't know is that the -- that price that they were

being charged wasn't even real, it was fake; that the whole

system that it had created incentivized the foreman, who was

on the scene, to bump that up because he was going to get paid

more. He was going to get paid based on the charged cubic

feet, the false cubic feet, so he's jacking up the price at

every turn.

The customer doesn't know that. A lot of these

customers, these victims, they don't know that now. They

don't even know that they paid more. But hundreds and

hundreds and hundreds of emails internally between the foremen

of the warehouses all over the country, going back to the

defendant, and he's seeing this is what they're charged, and

this is the cubic footage that they're charged for having, and

this is what they actually have.

All of this extortion, all of this fraud, the customers,

the ones who did know and were able to complain to get the

Department of Transportation to intervene and to place

entities out of service, it didn't really matter because they

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had another company in their back pocket that they were going

to reincarnate. And this was the business motto, and it

happened over and over and over again, and a lot of these

people, some of these people never got their goods.

THE COURT: Mr. Singer, in some ways -- you know, I

hear everything you're saying. In some ways, it strikes the

Court like these were commercial transactions done under

shady, false pretenses.

You know, part of me says, gosh, it seems more like a

civil wrong than a criminal wrong, you know, and we start

talking about putting people in prison for extended periods of

time.

I guess I just wanted to solicit your views as is the

RICO statute being used -- as you said, this is a common

practice in this industry.

Is the government sort of cracking down on this industry?

Is this an industry where RICO's being used more generally, or

is this, sort of, like an unfortunate example of somebody who

got caught in a RICO case that the government typically

wouldn't charge as a RICO case?

MR. SINGER: This case was charged as a RICO case,

Your Honor, because --

THE COURT: I know that.

MR. SINGER: I'm going to explain why it was charged

as a RICO case. It fits the model of -- first of all, the

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racketeering statute does not say it has to be a mob boss.

THE COURT: I understand.

MR. SINGER: There has to be certain factors that are

involved. And one of the factors, the reason it's appropriate

is because the people at the top aren't the ones who are

actually on the ground committing the crimes. They're just

overseeing all the crimes that are being committed and are

benefiting from it.

So when Congress drafted the RICO statute, they

anticipated that wire fraud would be an aspect of that, and so

yes, there are -- the RICO statute being used in fraud mover

cases like this? I don't know of any.

THE COURT: Well, I mean, I think your sentencing

memoranda referred to the practices that were at issue here

is, sort of, common and pervasive throughout this industry.

I guess I'm wondering if that's the case. Is the

government bringing other RICO cases against other moving

companies or not?

MR. SINGER: It's very fact specific, Your Honor,

whether or not -- there was a big case that was just brought

in the Eastern District of Pennsylvania several months ago. I

spoke to the prosecutor. She didn't bring it as a

racketeering case because the facts supported proving it

through a substantive wire fraud conspiracy. The facts in

this case supported a racketeering --

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THE COURT: Well, independent of the label, the

criminal label that's used, whether it be wire fraud or some

other kind of fraud, or RICO or whatever, I mean, are moving

companies that operate in this fashion being criminally

prosecuted?

MR. SINGER: Yes, they are, Your Honor. They are.

THE COURT: Okay. And, to your knowledge, one of the

factors the Court's going to talk about in a little bit is

that, you know, the Court has some responsibility to make sure

that similarly situated people who engage in similar conduct

receive somewhat similar sentences.

One thing that was notably absent from, I think, either

parties' sentencing memorandum was suggestions to the Court

about how similar conduct has been treated in other cases

around the country.

I know there's references to the sentencing guidelines.

But I mean more specifically to what's labeled in your

sentencing memorandum as a "common practice," I mean, what are

the typical sentences in cases like these?

MR. SINGER: I don't know, Your Honor. Honestly, I

don't know. There aren't a lot of examples. There aren't. I

mean, cases have been brought recently, but I can't say that

I'm aware of a lot of the sentences that have resulted from

them.

THE COURT: So there haven't been a lot of cases?

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MR. SINGER: There are pending cases.

THE COURT: I see.

MR. SINGER: But ones that have been -- worked their

way through the system, I'm sure there are, I'm just not

prepared to speak on them.

THE COURT: Very good. I'm sorry. I didn't mean to

interrupt where you were going, Mr. Singer.

MR. SINGER: No, Your Honor. I appreciate the

question.

I think it is important to note that this type of fraud,

it is -- I mean, aside from the facts that it satisfies the

elements of wire fraud, among others, the reason that it is

necessary to charge these as criminal cases, and it's

necessary to charge them based on the full scope of the

criminal activity, is because it's -- each individual customer

loses, on the worst case, a couple grand.

THE COURT: Sure.

MR. SINGER: Or on the best case, you know, a couple

grand. They get bumped a little bit, probably not worth their

time to even address it.

On the worst case, though, they never get any of their

goods, and they are left with little ability to ever get that

money back or their possessions. They're not going to get

their mementos, their household goods, their baby pictures.

That's gone.

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But they're also never going to be made whole from a

monetary standpoint. The companies, they reincarnated a newer

company. There is no civil mechanism to get this back. These

are customers who are victimized, and they have nowhere to

turn.

So I think that these are important cases. And I think a

sentence that recognizes the real issue that this is in the

moving industry throughout the country, and the real impact

that this is having on victims throughout the country, I think

it's an important fact that the Court --

THE COURT: And I noted that one of the things that

you described in your sentencing memorandum was -- I'll

paraphrase, but kind of the importance of signalling to others

engaged in similar conduct, sort of, the gravity of the

offense that they're committing.

I guess I wonder in that regard, I mean, you know, is a

72-month sentence, versus a 97-month sentence, versus an

84-month sentence, versus a 124-month sentence, I mean, I

would assume that for people engaged in this kind of conduct

in the moving industry generally, that any sentence measured

in terms of multiple of years is going to be seen as a, you

know, relatively stern signal about the potential consequences

of their behavior in which they're engaged.

Why 97 or 120 months? I know that's what the sentencing

guidelines recommends, I'm just not sure that when they put

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this all together, that the sentencing guidelines were

contemplating the losses being losses from certain fraudulent

moves, versus maybe other kinds of activity that we can think

of being engaged in through a RICO Conspiracy.

MR. SINGER: Your Honor, I think that's an issue

across the criminal code. I mean, you can find -- there are

lively debates about the value of deterrents as far as

sentencing goes, and whether or not it deters the drug dealer

in a drug case, or the guy who is running guns, or the

fraudulent mover, there are varying opinions on whether or not

that any one sentence is going to deter a criminal's behavior.

I do think, though, in this particular context, where we

have a -- you know, this is more of a white collar industry,

and I think that people who are involved in the moving

industry take note when one of their own, who are doing

activities that's similar to what they're doing, is faced with

a very stiff sentence.

THE COURT: No, I don't doubt that at all. I guess I

just wondered in the sentence, if you'll just excuse the pun

you just said, what does "very stiff sentence" mean?

MR. SINGER: Our guidelines are the guidelines,

Your Honor.

THE COURT: All right. Thank you, Mr. Singer.

Mr. Pinales, do you wish to be heard with regard to

sentencing?

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MR. PINALES: Yes, I do, Your Honor. We are not

arguing that this is not a RICO. The facts of this case can

be squeezed into the RICO statute. By that I mean we still

rely upon Your Honor to reach a sentence which is appropriate

but not greater than necessary.

I want to talk about the deterrents for a few moments and

advise the Court that in July, it will be four years since

Andrey has been arrested.

Now, he's been housed in the Butler County Jail. His

wife is in the courtroom today. Because of the distance and

the cost, this is the first time they have actually seen each

other in person.

She brought with her a picture, which I've given to

Andrey, which is of his daughter. And we talked about that in

the memorandum. She is five years old now. For four years,

he has not seen her.

The conditions in the Butler County Jail are county jail.

It is not a federal institution. And by that I mean there is

much difference. It is the equivalent of what would be, in a

federal institution, hard time.

And the reason it is hard time, he sees the light of day

when he comes to court. They do not have any outdoor

activity, or they're not allowed out. Yes, he can work out,

and he has worked out, but it is not the kind of incarceration

that we expect in a federal institution, nor is it the kind of

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incarceration that he will receive. And he knows that he is

going to receive a sentence, Your Honor.

And so he has had an extremely hard time in the Butler

County Jail. I know the Court's going to remedy that by

giving him a sentence and he's not going to be in the Butler

County Jail, but I would like the Court to take into

consideration that for all of four years, he has had hard

time.

And we have supplied in our memorandum the situation of

Andrey's status in the United States.

I'd like to state to the Court that he went to college in

Russia and received what would be somewhat the equivalent of a

law degree, but he's never taken a bar exam, so he's never

been a lawyer.

But it has placed him, when he was in Russia, in a

position of being around a group of people where he was, sort

of, advising them and helping them do demonstrations in the

Soviet Union and in Russia.

And because of that, he got out, fortunately, and

received status here under the consideration of the United

States Government, which is what he has now. He is not a

U.S. citizen.

Now, I have spoken to a number of immigration lawyers,

because that's an area well out of my range. When Andrey is

finished with his sentence, the government will make a

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determination as to what to do with him. I would say

normally, it would be a deportation. Under this status that

he has now, he can be deported back to Russia, which would be

a death sentence for him, he's convinced of that, particularly

with Russia today.

THE COURT: Actually, if I could stop you there,

Mr. Pinales. I mean, I'm wondering why are you asking for a

short sentence? It seems like, at least as long as he's

serving a term of imprisonment, he will be here.

MR. PINALES: I know, Your Honor. It's a two-way

sword. And I understand that. But I think it is more likely

than not, after his sentence is over, immigration will have a

determination as to, one, are they going to deport him, or are

they going to continue his status. And it could go either

way. If they decide to deport him, the next question is

where.

It's my understanding that he could be deported to

another country that this -- that our country has a

relationship with that is not part of the Soviet former union;

that it would be another country that is willing to accept

him. I don't know. We don't know. But that is certainly

something holding a greater punishment than if he was a

U.S. citizen, do your time, go home to your family. And I'd

like the Court to take that into some consideration. How it

plays, I don't know.

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And I thought the very question or comment that the Court

raised to me, give him the longest possible sentence and he

doesn't have to worry about being deported to Russia at that

point, but he's going to be. He's young enough that he's

going to be.

Now, I'm asking that the Court, as I said, take into

consideration the Butler County situation, the fact of his

really wonderful past.

I mean, I have seen a lot of letters from a lot of people

over my career, but I have rarely seen such genuine letters

that support and love and care for him, care for Andrey.

THE COURT: If I could interrupt you on that for a

second, Mr. Pinales. I mean, one thing that concerns the

Court that I'm trying to reconcile. So I get these, as you

said, letters from friends, neighbors, about what a wonderful

person Mr. Shuklin is, and then I get hundreds of pages of

victim impact statements from others who have had dealings

with Mr. Shuklin.

And I guess one thing that the Court is left with is this

impression that it's great to be Mr. Shuklin's friend, but not

so good to be Mr. Shuklin's customer; and, you know, that some

of the largesse that he demonstrates with his friends is sort

of underwritten by the unfortunate circumstances of many of

his customers. And I'm trying to reconcile those two things.

If you have thoughts in that regard, I'd appreciate it.

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MR. PINALES: I wish I had a magic wand that could

change the facts, but I can't. We recognize the injuries that

have been caused. We also recognize the law that states that

the Court -- whatever sentence the Court does give, he's going

to be under a supervised release.

And certainly, Andrey expects that under that supervised

release, he will begin working his backside off to do whatever

he can as to make proper restitution, Your Honor.

And will it make these people whole in the amounts that

have been there? I don't know. But I would hope he will do

his absolute best to compensate some of these victims. I

don't know if that answers your questions.

THE COURT: It does. I mean, I guess -- so one way,

you know, as I looked at the sentencing memorandum, I was

trying to take a holistic view of Mr. Shuklin's life.

One impression that kind of comes across is that he has

some reasons that he needed to leave Russia, and -- not

illicit. I mean, in some ways, good reasons, right? I mean,

he's involved in protests against some of the things that are

going on over there.

And so he ends up here and comes to our shores. And the

country kind of takes him in, and he responds by engaging in,

sort of, widespread fraudulent conduct that ended up not only

depriving people of money in certain circumstances, but

depriving them of memories, and photographs, and all the

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things that sort of document a family's history, some of their

dearest possessions, and it's just -- it's hard to reconcile

all these different visions of Mr. Shuklin from all these

different angles.

But I think you would agree, it's a little sad that

somebody who has the opportunity to come here, and has an

educational background that should put him in a position to be

a contributor in society, instead, chooses to pursue the path

that he pursued. I'm troubled by that, to be honest.

MR. PINALES: And I can't argue with the Court on

that. And I think my client can't argue with the Court on

that. But he can and certainly has, as I said, with his

incarceration to date, seen the errors of his ways.

And I submit, with the support of his family, this Court

won't see him again. Thank you.

THE COURT: Thank you, Mr. Pinales.

Mr. Shuklin, sir, you are not required to speak, but if

you would like to make a statement, this would be an

appropriate time to do so.

THE DEFENDANT: Yes, Your Honor. Thank you for

letting me speak, Your Honor.

First of all, I want to apologize to customers of the

company, to these people. I don't know if somebody here today

and, unfortunately, I cannot do it directly for everybody, but

I hope Mr. Singer will convey my words to these people.

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I want to say that I'm really sorry about all this

situation, what happened, what kind of experience they had.

I want to say that all this time when I spend in jail, I

was praying for forgiveness, and I really, really hope that

after these words, these words at least will make them feel

better.

I understand it's not enough, but I hope, in future, I

can do more to, I don't know, to cover what I -- the damage

happened to them, because I promise that I will try my best to

do.

I also want to apologize to Court, Your Honor, to

government, to my family, to my wife. I want to say I'm

really sorry for the hardship, what I brought to you, to our

family. And I also want to say thank you to you that, no

matter what, you standing by me, and it really means a lot to

me. I will never forget it.

Your Honor, I will not justify myself today because I

admit I made the wrong decisions in my life. And you check

and see that it's the biggest mistake what I make.

I just want to say that if purpose of jail is to make a

person realize what he did wrong and correct him, in this

case, I want to assure you that it's exactly what happened to

me.

I learned my lesson. I realized that it's no amount of

money can buy me a single second of time with the people who I

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love, my family, my wife, my daughters, especially the little

one, Paulina. Next month, she will turn five, and she doesn't

even know me. For her, I'm just a character on the phone.

And every time when she's asking me when I come back home,

it's just killing me inside.

And I know for sure that I will never, ever again

jeopardize her happiness and any, any member of my family

happiness never again.

You know, in one book, I read words each -- I want to

make, I'm not going to say mantra for all my life, the rest of

my life. The words says, "Better ask permission first than

forgiveness later." And I want to say that that is exactly

what I am going to do in the future. I will always ask

permission first.

Your Honor, I know my guidelines is high, and then I see

the government asking to give me a lot of time today. But I

know you are the person who deciding today, and that's why I'm

asking you.

And I know I'm asking big thing. I'm asking you to

believe in me, to believe in the person who made the mistake

and regret and will regret until the end of my life of the

damage what I made. But I'm asking you for a second chance;

second chance to return to society, to my family, to be good

examples for my kids, to dedicate my life to be a better

person, and to fix everything where I may.

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And if you give me this second chance, for me it's going

to be one of the biggest maturation of my life, knowing that

you trust me, and I will prove everybody that your decision

was right and accurate about me, and I promise you, Your

Honor, I will not let you down.

Thank you.

THE COURT: Thank you, Mr. Shuklin.

Are there any victims present in court who would like to

speak to sentencing?

Is there anyone who would like to speak to sentencing

generally? All right.

Mr. Pinales, did you say that this July would mark

48 months?

MR. PINALES: Yes, Your Honor. I believe it's the

31st. I could be wrong on the date, but it is this July.

THE COURT: Andrey Shuklin stands before the Court

after pleading guilty to Racketeering Influenced and Corrupt

Organizations Conspiracy, in violation of Title 18,

Section 1962(d), of the United States Code.

As noted, at this juncture, the Court's job is to impose

a sentence that is sufficient but not greater than necessary

to comply with the purposes of sentencing.

In doing so, the Court must look at the nature of the

offense, and the history and characteristics of the defendant

and, based on that, the Court must fashion a sentence that

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reflects the seriousness of the offense but adequately deters

criminal conduct, that protects the public from further crimes

by this defendant, and that provides the defendant with needed

educational or vocational training, medical care, or other

correctional treatment.

I'd like to talk about some of those factors a little bit

and start with the nature of the offense.

Here there's no doubt that criminal activity occurred.

The moving enterprise described in the indictment enriched its

owners, operators, employers, members, and associates by

defrauding, extorting, and stealing from customers who hired

the affiliated companies to move their household goods.

The individuals also worked to promote and perpetuate the

moving enterprise, and to shield its criminal affairs from law

enforcement and customers by concealing the true owners,

operators, employees, and operations of the affiliated

companies.

There's little question that Mr. Shuklin was aware of the

affiliated companies that made up the moving enterprise, that

they worked out of the moving enterprise's main business

office in Florida. In fact, it appears that Mr. Shuklin has

been with the moving enterprise right from its inception.

And in connection with his activities with the moving

enterprise, he knew that it was the practice and scheme of the

moving enterprise to provide materially false statements to

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federal regulators, to third-party companies, and to

customers.

He further knew it was the practice of the moving

enterprise to charge customers for moving more cubic footage

of household than were actually loaded by members of the

moving enterprise, and he furthered and facilitated this

fraudulent scheme.

He was also aware of the actual amount of space that was

used by the customers, which was less than what they were

charging the customers for. Email communications show his

knowledge of and participation in the fraudulent scheme.

In short, it appears that Mr. Shuklin occupied the

highest ranks of the moving enterprise, and it was a moving

enterprise that cost nearly 1,900 victims at least

$2.4 million.

And as the Court's already noted, I've received victim

impact statements from a whole host of people who have had the

unfortunate experience of dealing with the moving enterprise

in one guise or another or in one iteration or another, and

their stories were, frankly, troubling.

I mean, it was people who lost a lifetime's worth of

possessions, and not just possessions like beds and couches

and furniture, but possessions that were personal to those

people; pictures, photo albums, important family documents.

You know, Mr. Shuklin, the activities of the moving

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enterprise really had a detrimental effect on the lives of a

lot of people. And I get this wasn't a crime of violence but,

at the same time, it did in some ways do violence to the

families who were deprived of some of these very deeply

cherished goods. And the Court just doesn't think this is

something that can be taken lightly.

To a certain extent, I agree with the government. You

know, they point out this appears to be a common practice in

the industry, but it's so hard to know which way that cuts.

I mean, on the one hand, I guess, maybe it seemed like

less of a big step to walk down that path. At the same time,

though, it does seem like it's important that people

understand that -- and others engaged in these activities

understand it is significant, and it is criminal behavior, and

I think a significant sentence is warranted to try and send a

message to others who would do that as well.

And that's one of the purposes of sentencing under

18 United States Code, Section 3553, is to think about the

need for deterrence, and so that's an issue that has weighed

on the Court's mind.

With regard to Mr. Shuklin's background, as Mr. Pinales

noted, he was born in Russia. He's well educated. He has a

degree in jurisprudence from the Moscow Financial Academy. He

began work on a Ph.D. in economics, and then had to leave the

country when he sought political asylum in the United States

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due to his association with the opposition party in Russia.

And, you know, again, as I've pointed out to Mr. Pinales,

that's sort of a double-edged sword. I get that you come to a

new country, as Mr. Pinales said, you don't speak English as

well as you could. At the time, I'm sure it was difficult;

but, at the same time, given this real opportunity, you turn

around and start down a path of criminal behavior that extends

for years.

I mean, it wasn't an inadvertent choice that you

recognized and then corrected. This was conduct in which you

engaged for years.

It doesn't appear that Mr. Shuklin has any mental health

or substance abuse issues. And it does come through to the

Court that he has a loving family life, and that he is, as

Mr. Pinales noted this afternoon, well liked in his community.

But that's a double-edged sword too. Sometimes the Court

has before it people who had no advantages in childhood, and

they came out of desperate circumstances and made choices that

reflected that very limited choice set that they had. And in

some ways, that seems like a mitigating factor.

Here, Mr. Shuklin, it appears that you could have chosen

to contribute in this country in a variety of different ways,

and the one you chose was the one we've just discussed and,

you know, it's a little hard to understand how you ended up

where you were, given where you started.

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At the end of the day, I do think that a significant

sentence is warranted here. That being said, I do think the

guidelines are a little harsh considering the nature of the

offense at issue here.

As I noted, I think the RICO statute has -- the coverage

of the RICO statute has grown over the decades to include some

things that maybe Congress didn't originally contemplate.

But that being said, I have no doubt that a RICO

violation was proven here by the facts that were admitted in

the plea agreement.

But I do think that the sentencing -- the recommended

sentence under the sentencing guidelines is, perhaps, longer

than is necessary, in light of the conduct at issue here, in

part, because I think it's important that Mr. Shuklin get out

so that he can start attempting to do his part to repay the

customers who the moving enterprise has harmed through their

interactions with him.

So for all the reasons that I've mentioned during this

hearing, I find that a sentence of 78 months is sufficient but

not greater than necessary to comply with the purposes of

sentencing.

It's a relatively significant downward variance from the

sentencing guidelines but, for all the reasons I mentioned, I

do believe the downward variance is appropriate here.

I also find that a term of supervised release of three

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years is appropriate, in part, because some of the conditions

that I'm going to talk about are directed at Mr. Shuklin's

financial activities when he's released from prison, and I do

want to make sure that he is making efforts to undertake the

restitution that the Court will also order as a part of this

sentence.

But before I move on and describe the terms of supervised

release, Mr. Pinales, do you have a request for where I would

recommend to the Bureau of Prisons that he serve his term of

incarceration?

MR. PINALES: I do, Your Honor. If the Court would

recommend -- and I've explained that it's merely a

recommendation.

THE COURT: The Court is using the word "recommend"

in a very --

MR. PINALES: Yes, but they try and do the best they

can because keeping a family together is paramount. I would

ask that an institution in southern Florida, as close to his

home and to his wife as is possible.

THE COURT: Where is she located, sir?

MR. PINALES: In the Miami area.

THE COURT: Okay. So the Court will recommend that

he serve his term of incarceration at a facility located as

close to Miami, Florida as possible. As I noted, I'm also

sentencing Mr. Shuklin to a three-year term of supervised

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release.

And in that regard, Mr. Shuklin, I'll note that while on

supervised release, you must not commit another federal,

state, or local crime. You are prohibited from possessing a

firearm, ammunition, destructive device, dangerous weapon, or

unlawful controlled substance, and you are prohibited from the

unlawful use of any controlled substance.

That being said, the Court finds that there is a low risk

of future substance abuse on the part of this defendant and,

therefore, pursuant to 18 United States Code, Section 3583(d),

the Court waives the requirement of mandatory drug testing.

I should also note, since I failed to do that at the

outset and I apologize, that the 48-month sentence -- it's the

Court's intention that there be credit for time served on

that. And the sentence will reflect credit for time served,

which is the Court's understanding is roughly 48 months at

this point.

Certainly, back now to the supervised release,

Mr. Shuklin, you must also cooperate in the collection of your

DNA as directed by the probation office. And you must comply

with the standard conditions of supervised release that have

been adopted by this Court.

I believe that you have to report within 72 hours to the

probation office that's located in the district in which you

are incarcerated upon your release from incarceration, so I

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just advise you to do that.

Because of the nature of your crime here and the fact

that you owe mandatory restitution, the Court is going to add

certain special conditions that are directed at your finances

while on supervised release.

In particular, the Court orders that the defendant must

not incur any new credit charges or open additional lines of

credit without the approval of the probation officer.

The defendant must provide the probation officer with

access to any requested financial information, and authorize

the release of any requested financial information, which the

probation office may share with the United States Attorney's

Office.

The defendant shall comply with the orders of the

Department of Homeland Security, Immigration, and Customs

Enforcement. If deported, the defendant shall not illegally

reenter the United States.

With regard to fines and restitution, the Court starts by

noting that Mr. Shuklin is required to pay the mandatory

special assessment fee of $100.

Although the Court has the authority to impose a fine

under 18 United States Code, Section 3571, the Court finds

that Mr. Shuklin lacks the financial ability to pay that fine,

especially in light of the substantial restitution that the

Court is going to order and, therefore, the Court declines to

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impose an additional fine.

In particular, Mr. Shuklin, to the extent that you are

able to amass financial means through employment or otherwise,

the Court would prefer that money go to restitution to the

victims of the moving enterprise rather than to payment of a

fine.

As to restitution of the victims. Pursuant to Title 18,

Section 3663A of the United States Code, restitution is

mandatory. The Court thus orders such restitution, which

shall be due immediately, with any unpaid balance to be paid

as a condition of supervised release.

Mr. Shuklin shall pay restitution jointly and severally

with the other defendants in this case, but the Court does not

yet have an amount for that restitution and will amend the

sentence to include the amount upon its determination.

In that regard, I note the government has filed a motion

in this case to set the restitution at the completion of the

sentencing of all the conspirators in this case, and the Court

anticipates ruling on that motion shortly.

But it is the Court's intent to amend the sentence in

this case to include a specific amount of restitution, and the

timing of that amendment, I think, the Court will enter in

response to the government 's motion.

While Mr. Shuklin is incarcerated, if he's working in a

non-UNICOR or grade five UNICOR job, he shall pay $25.00 per

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quarter toward the restitution or special assessment

obligation.

If working in a grade one through four UNICOR job,

Mr. Shuklin shall pay 50 percent of his monthly pay toward

restitution obligation or special assessment. Any change in

this schedule shall be made only by the order of this Court.

Within 60 days of the commencement of the term of

supervised release, the probation officer shall recommend a

payment schedule to the Court to satisfy any unpaid balance of

the restitution, and the Court will enter an order at that

point establishing a schedule of payments.

In his plea agreement, Mr. Shuklin also agreed to forfeit

certain property. Specifically, he agreed to the immediate

forfeiture, pursuant to 18 United States Code, Section 1963,

of any interest acquired or maintained in violation of

18 United States Code, Section 1962, which interests are

subject to forfeiture to the United States pursuant to

18 United States Code, Section 1963(a)(1).

Any interest in, security of, claim against, or property

or contractual right of any kind affording a source of

influence over any enterprise which the defendant established,

operated, controlled, conducted, or participated in the

conduct of, in violation of 18 United States Code,

Section 1962, which interests, securities, claims, and rights

are subject to forfeiture to the United States pursuant to

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18 United States Code, Section 1963(a)(2).

And finally, any property constituting or derived from

any proceeds obtained, directly or indirectly, from

racketeering activity or unlawful debt collection, in

violation of 18 United States Code, Section 1962, which

property is subject to forfeiture to the United States under

18 United States Code, Section 1963(a)(3).

Pursuant to 18 United States Code, Section 3612(f)(3)(A),

the Court waives the requirement of interest on any balance of

restitution not paid within 15 days after judgment.

So with that, I have stated the sentence that I intend to

impose on Mr. Shuklin, and I must now ask if there are any

procedural or substantive objections to the sentence that have

not been raised.

Any objection from the government?

MR. SINGER: No objection, Your Honor. One point of

clarification?

THE COURT: Yes.

MR. SINGER: And I might have misheard. I apologize

if I did. I believe you made a reference to 48 months'

imprisonment.

THE COURT: 78.

MR. SINGER: It's 78 months?

THE COURT: Yes.

MR. SINGER: The 48 months is a reference to --

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THE COURT: The time that I believed he's already

served, and for which the Court's intent that he receive

credit for time served, yes.

MR. SINGER: Thank you, Your Honor.

THE COURT: I thought I said that, but if I didn't,

it's a 78-months sentence and credit for time served. Either

way, I should have said it in the first instance and didn't.

With that clarification, any objection from the

government, Mr. Singer?

MR. SINGER: No, Your Honor.

THE COURT: Mr. Pinales?

MR. PINALES: No, Your Honor. And I understood that

what the Court stated needed no clarification. I understood

that, so...

THE COURT: Thank you for that clarification,

Mr. Pinales.

MR. PINALES: Thank you.

THE COURT: Okay. So the Court's previously stated

sentence shall be docketed as a final judgment.

So, Mr. Shuklin, what happened here this afternoon is,

per your request, I have imposed a sentence that is below the

guideline sentence.

Please do not take that as any kind of indication by the

Court that I think your conduct was appropriate or okay or not

criminal, or anything of the like.

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As I said, I received an awful lot of letters from people

who, from what the Court can tell, were pretty significantly

damaged by the conduct that you undertook through your

participation in and leadership of the moving enterprise, and

I hope, hope, hope that you are being honest with the Court

when you say that you have learned your lesson and that you

will do what you can to try to repay the people who have been

harmed by your activity.

The Court does not impose a term of imprisonment lightly.

I understand you have a family. I understand you have a young

daughter, and I hope that you will be able soon to be back

with them.

The Court has imposed a term of imprisonment but with

credit toward -- sort of good time credit and credit for time

served, I think you will be able to be back with your family

relatively quickly.

I hope that you will not find yourself in a situation

where you need to be separated from your family again because

of poor choices, and I hope that this is a turning point.

I can't predict in any way what's going to happen with

regard to immigration consequences. That's just kind of

again, unfortunately, the reality of the situation in which

you've placed yourself. So that's another question that can

only be answered, I guess, in the fullness of time, but I hope

that things work out for you in that regard.

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With that, Mr. Shuklin, the last thing I'd like to talk

to you a little about this afternoon is your right to an

appeal. I know you may have waived your right to appeal in

your plea agreement, but I'm nonetheless required to inform

you that if you wish to appeal my sentence, you must file a

notice of appeal within 14 days of entry of judgement.

So subject to any waivers that are contained in the plea

agreement, I'm hereby notifying both parties that you have the

right to appeal this Court's sentence.

Mr. Shuklin, if you are indigent and cannot retain an

attorney, you may apply for one, which the Court will then

appoint to represent you on your appeal.

In accordance with the provisions of Rule 4(B) of the

Rules of Appellate Procedure, I'm advising you that you must

file your notice of appeal with the clerk of the United States

District Court; in other words, this Court, within 14 days of

the Court filing its judgment.

Mr. Pinales, are you retained or appointed? I'm sorry.

MR. PINALES: We, at this point, are appointed.

THE COURT: Very good. So if you request, I will ask

Mr. Pinales to help you with that one-page document and that

alone. So let me ask you, sir, do you request that I order an

appeal be filed?

THE DEFENDANT: No.

THE COURT: Mr. Pinales, if Mr. Shuklin changes his

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mind, will you protect his rights?

MR. PINALES: Absolutely.

THE COURT: Very good. The last topic on the Court's

agenda is Mr. Shuklin's custodial status. It's my

understanding, as we've discussed, that Mr. Shuklin is

currently detained.

Does the government wish to say anything further on the

matter regarding his custodial status pending assignment by

the Bureau of Prisons?

MR. SINGER: No, Your Honor.

THE COURT: Mr. Pinales, do you have anything you

wish to add?

MR. PINALES: No, Your Honor.

THE COURT: Very good. So the Court is going to

order that Mr. Shuklin be remanded to the marshals and

returned to detention pending his assignment by the Bureau of

Prisons.

With that, is there anything further that counsel wish to

place upon the record before we close the hearing this

afternoon?

MR. SINGER: No, Your Honor. Thank you.

MR. PINALES: No, Your Honor. Thank you.

(Proceedings concluded at 2:23 p.m.)

- - -

C E R T I F I C A T E

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- - -

I, M. SUE LOPREATO, RMR, CRR, certify that the foregoing

is a correct transcript from the record of proceedings in the

above-entitled matter.

/s/ M. Sue Lopreato______ June 2, 2022

M. SUE LOPREATO, RMR, CRR

Official Court Reporter

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