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with mail fraud, in violation of Title 18, United States Code, Section 1341. In 

addition, as further provided below, defendant agrees to the entry of a forfeiture 

judgment. 

Factual Basis 

6. Defendant will plead guilty because he is in fact guilty of the charge 

contained in Count One of the indictment. In pleading guilty, defendant admits the 

following facts and that those facts establish his guilt beyond a reasonable doubt, and 

establish a basis for forfeiture of the property described elsewhere in this Plea 

Agreement: 

 Beginning no earlier than in or about October 2011, and continuing until no 

earlier than in or about May 2018, in the Northern District of Illinois and elsewhere, 

defendant ROBERT DIMEO devised, intended to devise, and participated in a 

scheme to defraud and to obtain money and property by means of materially false 

and fraudulent pretenses, representations, and promises, and by concealment of 

material facts, which scheme is further described below. 

 Specifically, DIMEO, along with his co-schemers James Collins and Michael 

Walsh, fraudulently misappropriated at least about $5.3 million from Honor Finance, 

LLC by diverting to LHS Solutions money owing to Honor Finance, LLC. Honor 

Finance Corporation and Honor Finance, LLC were in the business of sub-prime 

automobile financing. Collins and DIMEO controlled and managed both of those 

entities. DIMEO and his co-schemers created and controlled LHS Solutions for the 

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purpose of carrying out this scheme in two ways. First, they caused LHS Solutions 

to purchase GPS devices from GPS Seller A and then resell those GPS devices to 

Honor Finance, LLC at a significant markup, with LHS Solutions keeping the 

markup. Second, they caused vehicle warranty issuers to send commission payments 

on Honor Finance, LLC’s sale of vehicle warranties to LHS Solutions, rather than to 

Honor Finance, LLC. The defendants did not reveal to Private Equity Firm A and to 

others at Honor Finance, LLC that they had created and controlled LHS Solutions 

and were using it to misappropriate money from Private Equity Firm A and Honor 

Finance, LLC. DIMEO, Collins, and Walsh then used the money they 

misappropriated from Honor Finance, LLC and Private Equity Firm A to benefit 

themselves. 

 Prior to and including 2011, Collins and DIMEO controlled Honor Finance 

Corporation. Walsh had done some work for Honor Finance Corporation and was paid 

for his work. In about October 2011, Private Equity Firm A purchased certain assets 

of Honor Finance Corporation and created Honor Finance, LLC, an entity that 

Private Equity Firm A agreed Collins and DIMEO would manage. At around the 

time Honor Finance, LLC was created, Collins told Walsh that Private Equity Firm 

A and the newly formed Honor Finance, LLC no longer would need his services. But 

Collins planned to establish an entity that would serve as a middleman in Honor 

Finance, LLC’s purchase of GPS devices from GPS Seller A, and that the new entity 

would mark up the prices of the GPS devices and resell them to Honor Finance, LLC. 

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Collins also planned for the new entity to handle vehicle warranty work on behalf of 

Honor Finance, LLC. The new entity paid Walsh a salary. At Collins’ direction, 

Walsh incorporated LHS Solutions and DIMEO arranged to open a corporate bank 

account for LHS Solutions with Walsh as the sole authorized signer on the account. 

 DIMEO directed Walsh how to manage LHS Solutions, including details 

regarding how to purchase GPS devices from GPS Seller A and then mark them up 

and sell them to Honor Finance, LLC, as well as how to obtain and process 

commission payments from vehicle warranty providers. Walsh was the only person 

on LHS Solutions’ payroll, and LHS Solutions did no legitimate work as a distributor 

of GPS devices. LHS Solutions’ only function was to serve as a middleman between 

Honor Finance, LLC and GPS Seller A, and to collect and keep vehicle warranty 

commissions that rightfully belonged to Honor Finance, LLC. 

GPS Devices 

 After LHS Solutions was incorporated, DIMEO directed GPS SELLER A to 

send invoices to LHS Solutions, rather than to Honor Finance, LLC. DIMEO paid 

GPS Seller A invoices using his own personal credit cards. DIMEO directed Walsh 

to take the invoices received from GPS Seller A and create corresponding LHS 

Solutions invoices to Honor Finance, LLC using a template DIMEO had supplied 

Walsh and including the same GPS serial numbers, quantities, prices and invoice 

numbers, but marking up the prices at which LHS Solutions would sell them to Honor 

Finance, LLC. DIMEO provided Walsh with the specific directions on how to mark 

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up these GPS devices, and DIMEO told him to have the invoices addressed to DIMEO 

at Honor Finance, LLC. Honor Finance, LLC then paid LHS Solutions for the GPS 

devices. DIMEO caused LHS Solutions to pay his personal credit card bills so as to 

reimburse him for the GPS devices he had charged, and remaining money from the 

mark-up was used to personally benefit DIMEO and his co-schemers. 

 As a result of marking up and reselling to Honor Finance, LLC the GPS devices 

purchased from GPS Seller A, defendants misappropriated approximately $3.1 

million. 

Vehicle Warranty Commissions 

 Honor Finance, LLC was entitled to receive commissions from certain vehicle 

warranty companies on the sale of warranties they issued to certain vehicle 

purchasers. DIMEO arranged with warranty companies that they would send 

commission payments to LHS Solutions, rather than to Honor Finance, LLC. DIMEO 

directed Walsh to sign certain documents, including IRS Forms W-9 and Direction of 

Pay Authorizations, directing that the warranty issuers pay LHS Solutions, rather 

than Honor Finance, LLC. DIMEO told Walsh that some of these vehicle warranty 

issuers would send commission payments to LHS Solutions. Upon receiving the 

warranty commission checks, DIMEO directed Walsh to cause the checks to be 

deposited into the LHS Solutions bank account, and the money was used to personally 

benefit DIMEO and his co-schemers. 

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 As a result of causing the warranty commissions to be directed to LHS 

Solutions, rather than to Honor Finance, LLC, defendants misappropriated 

approximately $2.2 million. 

Disposition of the Misappropriated Funds 

 The defendants used the misappropriated funds for their own benefit. 

Approximately $2.8 million was transferred from LHS Solutions’ account to the 

account of Honor Capital—an entity established with Private Equity Firm A’s consent 

for the purpose of collecting on loans and lines of credit that Private Equity Firm A 

had not purchased from Honor Capital Corporation, but for which Honor Capital 

Corporation was still responsible. But defendants knew Honor Finance, LLC’s funds 

could not be used to pay down Honor Finance Corporation’s debts, so they did not 

disclose to Private Equity Firm A and to others at Honor Finance, LLC that funds 

were misappropriated from Honor Finance, LLC and were used to pay down Honor 

Finance Corporation’s debts. 

 Defendants also caused approximately $800,000 in funds that had been 

misappropriated from Honor Finance, LLC to be transferred from LHS Solutions’ 

account to the accounts of 49 Salem Lane and BGB Management, LLC, entities that 

Collins and DIMEO owned and controlled. At DIMEO’s direction, Walsh signed on 

behalf of LHS Solutions lease agreements between LHS Solutions and BGB 

Management for at least three properties, even though neither Walsh nor LHS 

Solutions lived in or used any of those properties. 

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 Defendants also caused approximately $80,000 in funds that had been 

misappropriated from Honor Finance, LLC to be transferred from LHS Solutions to 

help purchase a lake house located in Dowagiac, Michigan. DIMEO directed Walsh 

to authorize the $80,000 payment because Collins had arranged to purchase the home 

from Collins’ relative and because Collins wanted the money to come from LHS 

Solutions. 

 In total, defendants misappropriated at least about $5.3 million from Private 

Equity Firm A and Honor Finance, LLC. 

On or about August 20, 2015, in the Northern District of Illinois, Eastern 

Division, and elsewhere, defendant ROBERT DIMEO, for the purpose of executing 

the above-described scheme, did knowingly cause to be delivered to Evanston, Illinois, 

by FedEx, a commercial interstate carrier, 120 GPS devices sold by GPS Seller A to 

LHS Solutions, in violation of Title 18, United States Code, Section 1341. 

7. Defendant, for purposes of computing his sentence under Guideline 

§ lBl.2, stipulates to having committed the following additional offense: 

 Between no later than approximately May 2015, and continuing until no 

earlier than in or about approximately May 2018, in the Northern District of Illinois, 

Eastern Division, and elsewhere, defendant ROBERT DIMEO knowingly 

participated in a scheme to defraud a financial institution, and to obtain money and 

property from the financial institution by means of materially false and fraudulent 

pretenses, representations, and promises. 

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 Specifically, ROBERT DIMEO was the Chief Operating Officer of Honor 

Finance, LLC, which was an Evanston, Illinois company that was engaged in the 

business of subprime automobile financing. In about May 2015, Honor Finance, LLC 

entered into a financing agreement with Financial Institution 1 referred to as a 

Warehouse Line. The Warehouse Line provided for a $200 million line of credit for 

Honor Finance, LLC’s use in its lending operations. The Warehouse Line Agreement 

set forth eligibility requirements for loans made by Honor Finance, LLC that were to 

be funded by the Warehouse Line. 

 The Warehouse Line Agreement placed limits on the amount of funds Honor 

Finance, LLC could use at any one time. The funding limits were subject to an 

Advance Rate representing the percentage of money outstanding on the Warehouse 

Line in relation to the principal balance of Honor Finance, LLC’s loan portfolio. The 

Advance Rate could change if certain triggers were met. For instance, if the 

delinquency ratio of the loans in the portfolio or the average extension ratio exceeded 

a certain figure, then the Advance Rate could change, which could have required that 

Honor Finance, LLC increase its collateral for the Warehouse Line or reduce the 

amount of funding it had outstanding on the Line. 

 Under the Warehouse Agreement, Honor Finance, LLC was required to submit 

monthly servicer reports to Financial Institution 1 that set forth data about Honor 

Finance, LLC’s loan portfolio and the use of funds from the Warehouse Line. The 

monthly servicer reports included information relevant to the possible application of 

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triggers for the Advance Rate. The information contained in the monthly servicer 

reports was meant to enable Financial Institution 1 to evaluate the health of Honor 

Finance, LLC’s loan portfolio, and, as a result, the risk to the Warehouse Line that 

Honor Finance, LLC was utilizing. 

 ROBERT DIMEO and James Collins, who was the Chief Executive Officer of 

Honor Finance, LLC, caused the monthly servicer reports submitted to Financial 

Institution 1 to be false by improperly utilizing bookkeeping techniques referred to 

as “Allowable Delinquencies” and “Honor Payments” to make Honor Finance, LLC’s 

loan portfolio look healthier and more current than it was. An “Allowable 

Delinquency” was a mechanism whereby Honor Finance, LLC gave one of their 

subprime borrowers what essentially amounted to a 30-day extension on a loan 

payment. While granting extensions to borrowers was not in itself improper where 

the borrower was temporarily unable to make a payment due to a situation such as a 

job loss or health problem, Honor Finance, LLC frequently applied Allowable 

Delinquencies without any contact with the borrower. In other words, Honor 

Finance, LLC granted Allowable Delinquencies not knowing the reasons for the 

borrower’s failure to pay and with little to no assurance that the allowable 

delinquency would make it more likely that the loan ultimately would not need to be 

charged off. 

 An “Honor Payment” was a code Honor Finance, LLC entered into its books to 

indicate that a borrower had made a payment (either full or partial) toward the 

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borrower’s loan for a particular month when, in fact, the borrower had not made any 

or all of the payment. Honor Payments were a technique that Honor Finance, LLC 

used to falsely record in the books that a full payment had been made. 

 DIMEO and Collins caused the improper application of Allowable 

Delinquencies and Honor Payments in order to convince Financial Institution 1 that 

many more of its loans were less delinquent than they actually were in order to avoid 

charging off loans. Their actions resulted in the monthly servicer reports submitted 

to Financial Institution 1 being false. Specifically, for instance, the monthly servicer 

reports made it seem that many of the loans Honor Finance, LLC had made were not 

more than 30 days past due and were not subject to being charged off, when in fact 

they were. Honor Finance LLC’s loan portfolio funded by the Warehouse Line was in 

a far different (and worse) condition than the false monthly servicer reports made it 

seem. The information provided to Financial Institution 1 in the monthly servicer 

reports was material to Financial Institution 1. 

 The practical effect of improperly using Allowable Delinquencies and Honor 

Payments was to avoid the application of triggers in the Warehouse Agreement that 

could have required Honor Finance, LLC to increase the amount of collateral it 

needed to post or to return or reduce the amount of funds it had drawn from the 

Warehouse Line. Either of those outcomes would have had a significant effect on 

Honor Finance, LLC’s cash flow and its ability to fund its lending operations. 

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 The poor conditions of the loan portfolio ultimately led to the default of many 

loans funded by the Warehouse Line and resulted in a loss of approximately 

$50,200,000 to Financial Institution 1. 

 In about December 2016, Financial Institution 1 and Honor Finance, LLC 

agreed to securitize thousands of subprime loans from Honor Finance LLC’s loan 

portfolio to be sold as bonds. An entity known as Honor Automobile Trust 

Securitization 2016-1 (“HATS”) was established as the entity for this purpose. Honor 

Finance, LLC was the Servicer of the Trust, and Financial Institution 1 underwrote 

the issuance of the bonds. An Offering Memorandum was issued in about December 

2016, and an investor presentation was created and provided to potential investors. 

More than 14,000 subprime loans from Honor Finance, LLC’s portfolio were 

moved from Honor Finance, LLC’s existing loan portfolio into HATS and packaged or 

securitized into bonds to be sold to the public. The bonds were funded by a stream of 

income from Honor Finance, LLC’s loan portfolio, and the bonds were collateralized 

by that portfolio of loans. The Offering documents set forth the procedures by which 

various interested parties, including the different classes of bond holders and Honor 

Finance, LLC itself, would be paid from the HATS Trust. The offering documents 

provided that Honor Finance, LLC could receive money from the HATS Trust if 

certain conditions were met, including the payment of bond holders with higher 

priority and the satisfaction of an overcollateralization ratio that compared the HATS 

loan portfolio to the remaining balance of the bonds. Honor Finance, LLC provided 

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information about the portfolio of loans to certain ratings agencies that rated the 

bonds for the investing public. 

The offering documents for the bonds set forth the eligibility requirements for 

loans to be included in the HATS portfolio. For instance, loans could not be placed 

into the HATS portfolio if they were more than 30 past due or if they had funds 

advanced to them by Honor or its affiliates to keep them from becoming more than 

30 days past due. They also said that extensions would be granted only for temporary 

relief to borrowers and not more than once every 3 months for any particular loan. 

These requirements were meant to assure investors that the HATS portfolio 

contained only current and performing loans. The offering materials also set forth 

requirements for how Honor Finance, LLC would repossess vehicles where loans were 

in arrears, and they described when Honor Finance, LLC would charge off nonperforming loans in the HATS portfolio. 

As with the Warehouse Line, Honor Finance, LLC was required to prepare 

monthly reports that provided information about the status of loans in the HATS 

portfolio. These monthly reports, sometimes called “Servicer’s Certificates,” were 

submitted to Financial Institution 1, as well as to ratings agencies and the bond 

investors, to keep them informed about the status of the portfolio and the bonds 

backed by the portfolio. These monthly reports were material to Financial Institution 

1, the ratings agencies, and the bond holders. 

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Despite the eligibility requirements for loans in the HATS portfolio, DIMEO 

and Collins caused many loans to be placed in the HATS portfolio that already were 

more than 30 days past due. Some loans already had been given more than one 

extension every 3 months. Many of those loans already had Honor Payments applied 

to them to make them seem current when they were not current, and they violated 

the eligibility requirement that funds not have been advanced to them to keep them 

from becoming more than 30 days past due. 

 After loans were moved into the HATS portfolio, DIMEO and Collins continued 

to cause Allowable Delinquencies and Honor Payments to be used to make many of 

the loans appear to be current or less delinquent than they actually were, as they had 

done with loans in the Warehouse Line. DIMEO and Collins kept many of these loans 

in the 30-day past due category—rather than the 60-day past due category—by their 

use of one or more improper applications of Allowable Delinquencies and/or Honor 

Payments. Most of these Allowable Delinquencies and Honor Payments were applied 

without any communication with, and without the knowledge of, the borrowers in 

question. 

With respect to the Warehouse Line, the primary purpose of their fraudulent 

actions was to maintain the appearance of a more current loan portfolio and forestall 

having to charge off loans, because avoiding the triggers in the Warehouse Line 

Agreement meant Honor Finance, LLC could keep more cash from the Line. With 

respect to the HATS deal, the primary purpose of their fraudulent actions was to keep 

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the loans in the HATS loan portfolio from being charged off, because charging off 

loans affected the overcollateralization rate and, consequently, negatively affected 

Honor Finance, LLC’s ability to receive money from the HATS Trust that it wanted 

in order to maintain and grow its business. 

DIMEO and Collins also delayed the entry of vehicles into their books for 

repossession processes. The offering materials for the HATS deal governed when 

vehicles must be repossessed and charged off. However, DIMEO and Collins knew 

that delaying the entry into the books of the repossession process meant that the time 

for charging off the loans was delayed. When the time for charging off the loans was 

delayed, Honor Finance, LLC could continue to obtain and maintain cash from the 

Warehouse Line and the HATS Trust. To secure and keep more cash, DIMEO and 

Collins knowingly misrepresented the status of repossessed vehicles to Financial 

Institution 1, the ratings agencies, and bond holders, so Honor Finance, LLC could 

falsely show fewer accounts where charge-offs needed to be made. 

The poor conditions of the HATS loan portfolio ultimately led to Financial 

Institution 1 having to write off approximately $4,300,000. 

The cumulative loss to Financial Institution 1 from the fraud in connection 

with both the Warehouse Line and the HATS deal was approximately $54,500,000. 

 On or about June 9, 2017, in the Northern District of Illinois, Eastern Division, 

and elsewhere, ROBERT DIMEO knowingly executed the scheme to defraud by 

submitting and causing to be submitted to Financial Institution 1 a monthly 

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Servicer’s Certificate that contained false information about the status of loans in the 

HATS Trust, in violation of Title 18, United States Code, Section 1344. 

8. The foregoing facts are set forth solely to assist the Court in determining 

whether a factual basis exists for defendant’s plea of guilty and criminal forfeiture, 

and are not intended to be a complete or comprehensive statement of all the facts 

within defendant’s personal knowledge regarding the charged crimes and related 

conduct. 

Maximum Statutory Penalties 

9. Defendant understands that the charge to which he is pleading guilty 

carries the following statutory penalties: 

a. A maximum sentence of 20 years’ imprisonment. This offense also 

carries a maximum fine of $250,000, or twice the gross gain or gross loss resulting 

from that offense, whichever is greater. Defendant further understands that the 

judge also may impose a term of supervised release of not more than three years. 

b. Defendant further understands that the Court must order 

restitution to the victims of the offense in an amount determined by the Court. The 

Court also may order restitution to any persons as agreed by the parties. 

c. Pursuant to Title 18, United States Code, Section 3013, defendant 

will be assessed $100 on the charge to which he has pled guilty, in addition to any 

other penalty or restitution imposed. 

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Sentencing Guidelines Calculations 

10. Defendant understands that in determining a sentence, the Court is 

obligated to calculate the applicable Sentencing Guidelines range, and to consider 

that range, possible departures under the Sentencing Guidelines, and other 

sentencing factors under 18 U.S.C. § 3553(a), which include: (i) the nature and 

circumstances of the offense and the history and characteristics of the defendant; (ii) 

the need for the sentence imposed to reflect the seriousness of the offense, promote 

respect for the law, and provide just punishment for the offense, afford adequate 

deterrence to criminal conduct, protect the public from further crimes of the 

defendant, and provide the defendant with needed educational or vocational training, 

medical care, or other correctional treatment in the most effective manner; (iii) the 

kinds of sentences available; (iv) the need to avoid unwarranted sentence disparities 

among defendants with similar records who have been found guilty of similar 

conduct; and (v) the need to provide restitution to any victim of the offense. 

11. For purposes of calculating the Sentencing Guidelines, the parties agree 

on the following points: 

a. Applicable Guidelines. The Sentencing Guidelines to be 

considered in this case are those in effect at the time of sentencing. The following 

statements regarding the calculation of the Sentencing Guidelines are based on the 

Guidelines Manual currently in effect, namely the November 2021 Guidelines 

Manual. 

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b. Offense Level Calculations. 

Offense of Conviction 

i. The base offense level is 7, pursuant to Guideline 

§ 2B1.1(a)(1). 

ii. The offense level is increased by 18 levels, pursuant to 

USSG § 2B1.1(b)(1)(J), because the actual loss amount was approximately 

$5,300,000, which is more than $3,500,000 but not more than $9,500,000. 

iii. The offense level is increased by 2 levels, pursuant to 

USSG § 2B1.1(b)(10)(C), because a substantial part of the offense involved 

sophisticated means and the defendant intentionally engaged in or caused the 

conduct constituting sophisticated means. 

iv. The offense level for the offense of conviction is 27. 

Stipulated Offense 

v. The base offense level is 7, pursuant to Guideline 

§ 2B1.1(a)(1). 

vi. The offense level is increased by 22 levels, pursuant to 

USSG § 2B1.1(b)(1)(L), because the actual loss amount was approximately 

$54,500,000, which is more than $25,000,000 but not more than $65,000,000. 

vii. The offense level is increased by 2 levels, pursuant to 

USSG § 2B1.1(b)(10)(C), because a substantial part of the offense involved 

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sophisticated means and the defendant intentionally engaged in or caused the 

conduct constituting sophisticated means. 

viii. The offense level for the stipulated offense is 31. 

Grouping 

ix. Pursuant to USSG § 3D1.2(d), the Offense of Conviction 

and the Stipulated Offense are grouped together into a single group. 

x. Pursuant to USSG § 3D1.3(b), the offense level applicable 

to the Group is the offense level corresponding to the aggregated quantity, which is 

approximately $59,800,000, which corresponds to an increase in the offense level of 

24 levels, as $59,800,000 is between $25,000, 000 and $65,000,000. When combined 

with the base level of 7 and the other applicable enhancements, the result is a 

combined offense level of 31. 

Acceptance of Responsibility 

xi. Defendant has clearly demonstrated a recognition and 

affirmative acceptance of personal responsibility for his criminal conduct. If the 

government does not receive additional evidence in conflict with this provision, and 

if defendant continues to accept responsibility for his actions within the meaning of 

Guideline § 3E1.1(a), including by furnishing the United States Attorney’s Office and 

the Probation Office with all requested financial information relevant to his ability to 

satisfy any fine or restitution that may be imposed in this case, a two-level reduction 

in the offense level is appropriate. 

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xii. In accord with Guideline § 3E1.1(b), defendant has timely 

notified the government of his intention to enter a plea of guilty, thereby permitting 

the government to avoid preparing for trial and permitting the Court to allocate its 

resources efficiently. Therefore, as provided by Guideline § 3E1.1(b), if the Court 

determines the offense level to be 16 or greater prior to determining that defendant 

is entitled to a two-level reduction for acceptance of responsibility, the government 

will move for an additional one-level reduction in the offense level. 

c. Criminal History Category. With regard to determining 

defendant’s criminal history points and criminal history category, based on the facts 

now known to the government, defendant’s criminal history points equal zero and 

defendant’s criminal history category is I. 

d. Anticipated Advisory Sentencing Guidelines Range. 

Therefore, based on the facts now known to the government, the anticipated offense 

level is 28 which, when combined with the anticipated criminal history category of I, 

results in an anticipated advisory sentencing guidelines range of 78 to 97 months’ 

imprisonment, in addition to any supervised release, fine, and restitution the Court 

may impose. 

e. Defendant and his attorney and the government acknowledge 

that the above guidelines calculations are preliminary in nature, and are non-binding 

predictions upon which neither party is entitled to rely. Defendant understands that 

further review of the facts or applicable legal principles may lead the government to 

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conclude that different or additional guidelines provisions apply in this case. 

Defendant understands that the Probation Office will conduct its own investigation 

and that the Court ultimately determines the facts and law relevant to sentencing, 

and that the Court’s determinations govern the final guideline calculation. 

Accordingly, the validity of this Agreement is not contingent upon the probation 

officer’s or the Court’s concurrence with the above calculations, and defendant shall 

not have a right to withdraw his plea on the basis of the Court’s rejection of these 

calculations. 

f. Both parties expressly acknowledge that this Agreement is not 

governed by Fed. R. Crim. P. 11(c)(1)(B), and that errors in applying or interpreting 

any of the sentencing guidelines may be corrected by either party prior to sentencing. 

The parties may correct these errors either by stipulation or by a statement to the 

Probation Office or the Court, setting forth the disagreement regarding the applicable 

provisions of the guidelines. The validity of this Agreement will not be affected by 

such corrections, and defendant shall not have a right to withdraw his plea, nor the 

government the right to vacate this Agreement, on the basis of such corrections. 

Cooperation 

12. Defendant agrees he will fully and truthfully cooperate in any matter in 

which he is called upon to cooperate by a representative of the United States 

Attorney’s Office for the Northern District of Illinois. This cooperation shall include 

providing complete and truthful information in any investigation and pre-trial 

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preparation and complete and truthful testimony in any criminal, civil, or 

administrative proceeding. Defendant agrees to the postponement of his sentencing 

until after the conclusion of his cooperation. 

Agreements Relating to Sentencing 

13. At the time of sentencing, the government shall make known to the 

sentencing judge the extent of defendant’s cooperation. If the government determines 

that defendant has continued to provide full and truthful cooperation as required by 

this agreement, then the government shall move the court, pursuant to Guideline 

§ 5Kl.l, to depart downward from the low end of the applicable guideline range in an 

amount to be determined by the government at the time of sentencing. Defendant 

shall be free to recommend any sentence. 

14. If the government does not move the Court, pursuant to Guideline 

§ 5K1.1, to depart from the applicable guideline range, as set forth above, the 

preceding paragraph of this Agreement will be inoperative, both parties shall be free 

to recommend any sentence, and the Court shall impose a sentence taking into 

consideration the factors set forth in 18 U.S.C. § 3553(a) as well as the Sentencing 

Guidelines without any downward departure for cooperation pursuant to § 5K1.1. 

Defendant may not withdraw his plea of guilty because the government has failed to 

make a motion pursuant to Guideline § 5K1.1. 

15. It is understood by the parties that the sentencing judge is neither a 

party to nor bound by this Agreement and may impose a sentence up to the maximum 

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penalties as set forth above. Defendant further acknowledges that if the Court does 

not accept the sentencing recommendation of the parties, defendant will have no right 

to withdraw his guilty plea. 

16. Regarding restitution, defendant acknowledges that pursuant to Title 

18, United States Code, Section 3663A, the Court must order defendant, together 

with any jointly liable co-defendants, to make full restitution to victims in an amount 

to be determined by the Court at sentencing, which amount shall reflect credit for 

any funds repaid prior to sentencing. Defendant also agrees to pay additional 

restitution, arising from the stipulated offense conduct set forth above, in an amount 

to be determined by the Court at sentencing, pursuant to Title 18, United States 

Code, Sections 3663(a)(3) and 3664. 

17. Restitution shall be due immediately, and paid pursuant to a schedule 

to be set by the Court at sentencing. Defendant acknowledges that pursuant to Title 

18, United States Code, Section 3664(k), he is required to notify the Court and the 

United States Attorney=s Office of any material change in economic circumstances 

that might affect his ability to pay restitution. 

18. Defendant agrees to pay the special assessment of $100 at the time of 

sentencing with a cashier’s check or money order payable to the Clerk of the U.S. 

District Court. 

19. Defendant agrees that the United States may enforce collection of any 

fine or restitution imposed in this case pursuant to Title 18, United States Code, 

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Sections 3572, 3613, and 3664(m), notwithstanding any payment schedule set by the 

Court. 

20. After sentence has been imposed on the count to which defendant pleads 

guilty as agreed herein, the government will move to dismiss the remaining counts of 

the indictment as to defendant. 

Forfeiture 

21. Defendant understands that by pleading guilty, he will subject to 

forfeiture to the United States all right, title, and interest that he has in any property 

constituting or derived from proceeds obtained, directly or indirectly, as a result of 

the offense. 

22. Defendant agrees to forfeiture of the following specific property to the 

United States: The real property commonly known as 50001 W. Lakeshore Drive, 

Dowagiac, Michigan, 49047. In doing so, defendant admits that the property 

described above represents proceeds defendant obtained as a result of the offense, as 

alleged in the indictment. Defendant consents to the immediate entry of a 

preliminary order of forfeiture as to this specific property, thereby extinguishing any 

right, title, or interest defendant has in it. If any of the specific property is not yet in 

the custody of the United States, defendant agrees to seizure of that property so that 

it may be disposed of according to law. 

23. In addition, defendant agrees to the entry of a personal money judgment 

in the amount of $5,300,000, which represents the total amount of proceeds traceable 

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24 

to the offense. Defendant consents to the immediate entry of a preliminary order of 

forfeiture setting forth the amount of the personal money judgment he will be ordered 

to pay. 

24. Defendant admits that because the directly forfeitable property, other 

than the specific property noted above, is no longer available for forfeiture as 

described in Title 21, United States Code, Section 853(p)(1), the United States is 

entitled to seek forfeiture of any other property of defendant, up to the value of the 

personal money judgment, as substitute assets pursuant to Title 21, United States 

Code, Section 853(p)(2). 

25. Defendant understands that forfeiture shall not be treated as 

satisfaction of any fine, restitution, cost of imprisonment, or any other penalty the 

Court may impose upon defendant in addition to the forfeiture judgment. In this case, 

however, the United States Attorney’s Office will recommend to the Attorney General 

that any net proceeds derived from any forfeited assets be remitted or restored to 

eligible victims of the offense pursuant to Title 18, United States Code, Section 981(e), 

Title 28, Code of Federal Regulations, Part 9, and other applicable law. 

26. Defendant agrees to waive all constitutional, statutory, and equitable 

challenges in any manner, including but not limited to direct appeal or a motion 

brought under Title 28, United States Code, Section 2255, to any forfeiture carried 

out in accordance with this agreement on any grounds, including that the forfeiture 

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25 

constitutes an excessive fine or punishment. The waiver in this paragraph does not 

apply to a claim of involuntariness or ineffective assistance of counsel. 

Acknowledgments and Waivers Regarding Plea of Guilty

Nature of Agreement 

27. This Agreement is entirely voluntary and represents the entire 

agreement between the United States Attorney and defendant regarding defendant’s 

criminal liability in case 20 CR 232. 

28. This Agreement concerns criminal liability only. Except as expressly set 

forth in this Agreement, nothing herein shall constitute a limitation, waiver, or 

release by the United States or any of its agencies of any administrative or judicial 

civil claim, demand, or cause of action it may have against defendant or any other 

person or entity. The obligations of this Agreement are limited to the United States 

Attorney’s Office for the Northern District of Illinois and cannot bind any other 

federal, state, or local prosecuting, administrative, or regulatory authorities, except 

as expressly set forth in this Agreement. 

29. Defendant understands that nothing in this Agreement shall limit the 

Internal Revenue Service in its collection of any taxes, interest or penalties from 

defendant and his spouse or defendant’s partnership or corporations. 

Waiver of Rights 

30. Defendant understands that by pleading guilty he surrenders certain 

rights, including the following: 

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a. Trial rights. Defendant has the right to persist in a plea of not 

guilty to the charges against him, and if he does, he would have the right to a public 

and speedy trial. 

i. The trial could be either a jury trial or a trial by the judge 

sitting without a jury. However, in order that the trial be conducted by the judge 

sitting without a jury, defendant, the government, and the judge all must agree that 

the trial be conducted by the judge without a jury. 

ii. If the trial is a jury trial, the jury would be composed of 

twelve citizens from the district, selected at random. Defendant and his attorney 

would participate in choosing the jury by requesting that the Court remove 

prospective jurors for cause where actual bias or other disqualification is shown, or 

by removing prospective jurors without cause by exercising peremptory challenges. 

iii. If the trial is a jury trial, the jury would be instructed that 

defendant is presumed innocent, that the government has the burden of proving 

defendant guilty beyond a reasonable doubt, and that the jury could not convict him 

unless, after hearing all the evidence, it was persuaded of his guilt beyond a 

reasonable doubt and that it was to consider each count of the indictment separately. 

The jury would have to agree unanimously as to each count before it could return a 

verdict of guilty or not guilty as to that count. 

iv. If the trial is held by the judge without a jury, the judge 

would find the facts and determine, after hearing all the evidence, and considering 

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27 

each count separately, whether or not the judge was persuaded that the government 

had established defendant’s guilt beyond a reasonable doubt. 

v. At a trial, whether by a jury or a judge, the government 

would be required to present its witnesses and other evidence against defendant. 

Defendant would be able to confront those government witnesses and his attorney 

would be able to cross-examine them. 

vi. At a trial, defendant could present witnesses and other 

evidence in his own behalf. If the witnesses for defendant would not appear 

voluntarily, he could require their attendance through the subpoena power of the 

Court. A defendant is not required to present any evidence. 

vii. At a trial, defendant would have a privilege against selfincrimination so that he could decline to testify, and no inference of guilt could be 

drawn from his refusal to testify. If defendant desired to do so, he could testify in his 

own behalf. 

viii. With respect to forfeiture, defendant understands that if 

the case were tried before a jury, he would have a right to retain the jury to determine 

whether the government had established the requisite nexus between defendant’s 

offense and any specific property alleged to be subject to forfeiture. 

b. Waiver of appellate and collateral rights. Defendant further 

understands he is waiving all appellate issues that might have been available if he 

had exercised his right to trial. Defendant is aware that Title 28, United States Code, 

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Section 1291, and Title 18, United States Code, Section 3742, afford a defendant the 

right to appeal his conviction and the sentence imposed. Acknowledging this, if the 

government makes a motion at sentencing for a downward departure pursuant to 

Guideline § 5K1.1, defendant knowingly waives the right to appeal his conviction, 

any pre-trial rulings by the Court, and any part of the sentence (or the manner in 

which that sentence was determined), including any term of imprisonment and fine 

within the maximums provided by law, and including any order of restitution or 

forfeiture, in exchange for the concessions made by the United States in this 

Agreement. In addition, if the government makes a motion at sentencing for a 

downward departure pursuant to Guideline § 5K1.1, defendant also waives his right 

to challenge his conviction and sentence, and the manner in which the sentence was 

determined, in any collateral attack or future challenge, including but not limited to 

a motion brought under Title 28, United States Code, Section 2255. The waiver in 

this paragraph does not apply to a claim of involuntariness or ineffective assistance 

of counsel, nor does it prohibit defendant from seeking a reduction of sentence based 

directly on a change in the law that is applicable to defendant and that, prior to the 

filing of defendant’s request for relief, has been expressly made retroactive by an Act 

of Congress, the Supreme Court, or the United States Sentencing Commission. 

31. Defendant understands that by pleading guilty he is waiving all the 

rights set forth in the prior paragraphs. Defendant’s attorney has explained those 

rights to him, and the consequences of his waiver of those rights. 

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Presentence Investigation Report/Post-Sentence Supervision 

32. Defendant understands that the United States Attorney’s Office in its 

submission to the Probation Office as part of the Pre-Sentence Report and at 

sentencing shall fully apprise the District Court and the Probation Office of the 

nature, scope, and extent of defendant’s conduct regarding the charges against him, 

and related matters. The government will make known all matters in aggravation 

and mitigation relevant to sentencing, including the nature and extent of defendant’s 

cooperation. 

33. Defendant agrees to truthfully and completely execute a Financial 

Statement (with supporting documentation) prior to sentencing, to be provided to and 

shared among the Court, the Probation Office, and the United States Attorney’s 

Office regarding all details of his financial circumstances, including his recent income 

tax returns as specified by the probation officer. Defendant understands that 

providing false or incomplete information, or refusing to provide this information, 

may be used as a basis for denial of a reduction for acceptance of responsibility 

pursuant to Guideline § 3E1.1 and enhancement of his sentence for obstruction of 

justice under Guideline § 3C1.1, and may be prosecuted as a violation of Title 18, 

United States Code, Section 1001 or as a contempt of the Court. 

34. For the purpose of monitoring defendant’s compliance with his 

obligations to pay a fine and restitution during any term of supervised release or 

probation to which defendant is sentenced, defendant further consents to the 

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disclosure by the IRS to the Probation Office and the United States Attorney’s Office 

of defendant’s individual income tax returns (together with extensions, 

correspondence, and other tax information) filed subsequent to defendant’s 

sentencing, to and including the final year of any period of supervised release or 

probation to which defendant is sentenced. Defendant also agrees that a certified copy 

of this Agreement shall be sufficient evidence of defendant=s request to the IRS to 

disclose the returns and return information, as provided for in Title 26, United States 

Code, Section 6103(b). 

Other Terms 

35. Defendant agrees to cooperate with the United States Attorney’s Office 

in collecting any unpaid fine and restitution for which defendant is liable, including 

providing financial statements and supporting records as requested by the United 

States Attorney’s Office. 

36. Regarding matters relating to the Internal Revenue Service, defendant 

agrees as follows (nothing in this paragraph, however, precludes defendant and his 

spouse or defendant’s partnerships or corporations from asserting any legal or factual 

defense to taxes, interest, and penalties that may be assessed by the IRS): 

a. Defendant agrees to cooperate with the Internal Revenue Service 

in any tax examination or audit of defendant and his spouse and defendant’s 

partnerships or corporations which directly or indirectly relates to or arises out of the 

course of conduct that defendant has acknowledged in this Agreement, by 

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31 

transmitting to the IRS original records or copies thereof, and any additional books 

and records that the IRS may request. 

37. Defendant will not object to a motion brought by the United States 

Attorney’s Office for the entry of an order authorizing disclosure of documents, 

testimony and related investigative materials which may constitute grand jury 

material, preliminary to or in connection with any judicial proceeding, pursuant to 

Fed. R. Crim. P. 6(e)(3)(E)(i). In addition, defendant will not object to the 

government’s solicitation of consent from third parties who provided records or other 

materials to the grand jury pursuant to grand jury subpoenas, to turn those materials 

over to the Civil Division of the United States Attorney’s Office, or an appropriate 

federal or state agency (including but not limited to the Internal Revenue Service), 

for use in civil or administrative proceedings or investigations, rather than returning 

them to the third parties for later summons or subpoena in connection with a civil or 

administrative proceeding involving, or investigation of, defendant and his spouse or 

defendant’s partnerships or corporations. Nothing in this paragraph or the preceding 

paragraph precludes defendant and his spouse or defendant’s partnerships or 

corporations from asserting any legal or factual defense to taxes, interest, and 

penalties that may be assessed by the IRS. 

38. Defendant understands that, if convicted, a defendant who is not a 

United States citizen may be removed from the United States, denied citizenship, and 

denied admission to the United States in the future. 

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Conclusion 

39. Defendant understands that this Agreement will be filed with the Court, 

will become a matter of public record, and may be disclosed to any person. 

40. Defendant understands that his compliance with each part of this 

Agreement extends throughout the period of his sentence, and failure to abide by any 

term of the Agreement is a violation of the Agreement. Defendant further 

understands that in the event he violates this Agreement, the government, at its 

option, may move to vacate the Agreement, rendering it null and void, and thereafter 

prosecute defendant not subject to any of the limits set forth in this Agreement, or 

may move to resentence defendant or require defendant’s specific performance of this 

Agreement. Defendant understands and agrees that in the event that the Court 

permits defendant to withdraw from this Agreement, or defendant breaches any of 

its terms and the government elects to void the Agreement and prosecute defendant, 

any prosecutions that are not time-barred by the applicable statute of limitations on 

the date of the signing of this Agreement may be commenced against defendant in 

accordance with this paragraph, notwithstanding the expiration of the statute of 

limitations between the signing of this Agreement and the commencement of such 

prosecutions. 

41. Should the judge refuse to accept defendant’s plea of guilty, this 

Agreement shall become null and void and neither party will be bound to it. 

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