Case 1:11-cr-00069-RJL Document 12

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA : : : : : : : : : : CRIMINAL NO. 11-69 (RJL) VIOLATION: 18 U.S.C. 641 (Theft of Government Money) 18 U.S.C. 2 (Causing an Act to be Done) 18 U.S.C. 981(a)(1)(C) & 18 U.S.C. 2461(c) (Criminal Forfeiture)

v.

HAROLD S. HUGHES, Defendant.

GOVERNMENTS MEMORANDUM IN AID OF SENTENCING The United States of America, by and through its attorney, the United States Attorney for the District of Columbia, respectfully submits this memorandum in aid of sentencing. The government recommends a sentence of incarceration at the low end of the guidelines range, a threeyear period of supervised release, restitution in the amount of $218,636.21, and forfeiture in the amount of $218,636.21. I. BACKGROUND A. Procedural History On April 12, 2011, Harold S. Hughes (the defendant) pleaded guilty before this Court to an information charging one count of theft of government money, in violation of 18 U.S.C. 641, along with a criminal forfeiture provision. In the plea agreement, the defendant agreed to pay restitution in the amount of $218,636.21 to the United States. Plea Agreement at Part 7. Also in the plea agreement, the defendant agreed to a criminal forfeiture to the United States in the form of a money judgment in the amount of $218,636.21. Id. at Part 8. B. Factual Background From February 2009 to December 2010, the defendant was employed as a Supply Technician

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(i.e. supply clerk) with the Federal Trade Commission (FTC). The FTC, an agency of the federal government, was created in 1914 with the purpose of policing unfair methods of competition in commerce. The FTCs headquarters is located in Northwest Washington, D.C. In his position, the defendant was responsible for ordering office supplies for FTC employees. The defendant mostly worked alone in the basement of the headquarters building with little oversight. The other employees in the basement were contract employees who worked in the mailroom, photocopying center, or security guard post. In April 2009, the defendant began using FTC money to make unauthorized purchases. The vast majority of the unauthorized purchases were for electronics, including laptop computers, DVD players, and televisions. The defendant retained for personal use a small number of these electronics; most of them he sold for cash at a price below the retail price. In the beginning of the scheme, the defendant had the unauthorized items shipped directly from the vendor to FTC headquarters, and he used his proximity to the mailroom and his familiarity with its employees to avoid detection. The defendant removed some of the items from FTC headquarters himself but shipped other items via Federal Express using FTC funds. As the scheme continued, the defendant arranged for items to be shipped directly to his residence in Virginia and to the residences of people to whom he had arranged to sell the items. For instance, on three occasions, the defendant purchased laptop computers (nine in all) and arranged for them to be shipped directly to Person One, a mailroom employee to whom the defendant sold the computers at a price far below the retail price. From April 2009 to December 2010, when the FTC finally uncovered the defendants theft and removed him from his position as supply clerk, the defendant made unauthorized purchases

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from vendors totaling $217,372.11. In addition, the defendant accrued $1,264.10 in unauthorized Federal Express shipping charges associated with the scheme. The total loss to the FTC was $218,636.21. II. GOVERNMENTS POSITION ON SENTENCING The government recommends a sentence of incarceration at the low end of the guidelines range, a three-year period of supervised release, restitution in the amount of $218,636.21, and forfeiture in the amount of $218,636.21. A. The Guidelines Prior to entry of the plea, the parties stipulated that the offense level under the United States Sentencing Guidelines in this case was 15, based on a base offense level of six, plus a 12-level increase due to the loss of more than $200,000, minus a three-level adjustment for acceptance of responsibility. Plea Agreement at Part 3. The parties did not stipulate to a criminal history score or a specific guidelines range, due to the governments uncertainty about the defendants criminal history. The parties agreed not to seek a departure under the guidelines but agreed that either party could seek a sentence outside of the guidelines based upon the factors to be considered in imposing a sentence pursuant to 18 U.S.C. 3553(a). The Probation Office agreed with the parties offense level calculation of 15, and determined that the defendant is in criminal history category I. Therefore the defendants guidelines range is 18-24 months in Zone D. The government is recommending a sentence of incarceration at the low end of this guidelines range. B. Factors in 18 U.S.C. 3553(a) Support the Recommended Sentence The government respectfully submits that the factors under 18 U.S.C. 3553(a) support a

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sentence of incarceration at the low end of the guidelines range. 1. Nature of the offense

The offense in this case was egregious because it went on for over 19 months, involved the misuse of a government position, and resulted in the theft of a large amount of money from the government. This was not a case in which the defendant made a few unauthorized purchases and stopped; billing records show that from April 2009 to December 2010 he placed hundreds of orders. Starting in November 2009, not a month went by in which he did not place multiple orders. The defendant did not stop making purchases until he was caught in December 2010. By that time, he had spent an astonishing amount of FTC money $218,636.21 to enrich himself. These purchases included laptop computers, Ipods, DVD players, televisions, computer software, flash drives, computer hardware accessories, and space heaters. A complete list of the purchases is contained in Exhibit 1. The vast majority of the items purchased by the defendant can never be recovered because they were sold by the defendant to others, and the small number of items that were recovered either are of no use to the FTC or cannot be put to FTC use due to security concerns. The defendants theft from the government was not the act of a desperate man trying to support himself. The defendant, after all, had a sought-after government job. Instead, the defendant was motivated by greed and a drug habit. He took advantage of the lack of supervision of his work by the FTC. One can only imagine how much more FTC money the defendant would have stolen if he had not been caught in December 2010. The serious nature of the defendants offense supports a sentence that includes incarceration. 2. History and characteristics of the defendant

Not including traffic offenses, the defendant has three criminal convictions. He appears to

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have a long history of employment. He served in the military for several years. It should be noted that the defendant confessed when first interviewed by the undersigned prosecutor, and he accepted a pre-indictment plea offer. The defendants acceptance of responsibility, his employment history, and his military service support a sentence at the low end rather than the middle or the high end of the guidelines range. 3. The need for the sentence (A) to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense; (B) to afford adequate deterrence; (C) to protect the public from further crimes of the defendant; and (D) to provide defendant with appropriate education or vocational training

The governments recommended sentence, which includes incarceration, would reflect the seriousness of the defendants crime, would provide just punishment for his actions, would afford adequate deterrence to similar criminal conduct, and would protect the public from further crimes of the defendant. A sentence of incarceration is particularly necessary to punish the defendant for misusing his government position and to deter similar criminal conduct by others. The

governments recommended sentence would send a strong message that those who steal from the government will face serious consequences. The defendant has been employed for many years and it does not appear that he needs further education or vocational training. It appears that the defendant does need drug treatment, which is something he almost assuredly can receive in prison. 4. The need to provide restitution to any victims of the offense

The governments recommended sentence provides for full restitution to the United States.

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III. CONCLUSION The United States respectfully requests that the Court sentence the defendant at the low end of the guidelines range, and in accordance with the factors articulated in 18 U.S.C. 3553(a), to punish him for his conduct and to deter others who might consider engaging in similar behavior.

Respectfully submitted, RONALD C. MACHEN JR. United States Attorney for the District of Columbia

By:

____/s/______________________________ BRYAN SEELEY Assistant United States Attorney DC Bar Number 501681 555 4th Street, N.W., Room 5840 Washington, DC 20530 (202) 252-7822 Bryan.Seeley@usdoj.gov

CERTIFICATE OF SERVICE I HEREBY CERTIFY that I caused a copy of this pleading to be served upon defense counsel, via the electronic case filing system, this 5th day of July, 2011.

/s/ BRYAN SEELEY Assistant United States Attorney

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