MEMORANDUM & ORDER On June 24, 2014, Defendant William Moran pleaded guilty to Conspiracy to Commit Bank Fraud and Tax Evasion. (See Information (Dkt. 3); June 24, 2024 Min. Entry.) Prior to sentencing, the parties disputed the appropriate restitution amount owed to the victim in relation to the bank fraud charge as well as the appropriate loss amount for this charge under the United States Sentencing Guidelines (“U.S.S.G.”) §2B1.1(b)(1). This court determined that a Fatico hearing was necessary to resolve this dispute and referred the hearing and related findings to Magistrate Judge Vera M. Scanlon for a Report and Recommendation (“R&R”), pursuant to 28 U.S.C. §636(b). (See Sept. 13, 2023 Min. Entry; see also Transcript of October 20, 2023 Fatico Hearing Before the Honorable Vera M. Scanlon (“Fatico Tr.”).) Now before the court are: Magistrate Judge Vera M. Scanlon’s R&R, which recommends that the court find that $1,767,206.97 is the appropriate amount for both restitution and loss under U.S.S.G. §2B1.1(b)(1); Defendant’s objections to the R&R; and the Government’s response to Defendant’s objections. (See R&R (Dkt. 44); Def. Objections (Dkt. 46); Gov. Resp. (Dkt. 47).) Upon de novo review, the court ADOPTS the R&R in part and REJECTS the R&R in part. The court adopts the analysis concerning foreseeability and calculation methodology. Upon review, however, the court finds that the Government has not provided sufficient evidence to meet its burden to demonstrate that $1,767,206.97 is the proper amount for restitution and loss as to Defendant’s bank fraud count and therefore sets these amounts at $0. The court DIRECTS the Probation Department to amend the PSR in accordance with this Memorandum and Order and the parties to contact the court’s deputy to schedule a date for sentencing. I. BACKGROUND The court assumes familiarity with this case’s background which is reviewed in the annexed R&R. (See R&R at 2-8.) In brief, in his role as comptroller of USA United Holdings, Inc. and several subsidiary companies (the “United Entities”), Defendant prepared false and fraudulent financial statements in connection with two loans (referred to herein as the “2004 Loan” and the “2007 Loan”) made to the United Entities by Comerica Bank (“Comerica” or the “Bank”). (Id. at 2-4.) In 2011, the United Entities stopped making payments on these loans, which led to default, acceleration of the amounts due, Chapter 7 bankruptcy and a sale of the loans’ collateral. (Id. at 3-4.) For these activities, the Defendant pleaded guilty to Conspiracy to Commit Bank Fraud in violation of 18 U.S.C. §1349, and Tax Evasion, in violation of 26 U.S.C. §7201. (See Information; June 24, 2014 Min. Entry.) Subsequent to his plea, the Defendant provided substantial assistance to the Government pursuant to a cooperation agreement. (Gov. Sent’g Mem. dated Sept. 8, 2023 (“Gov. Sent’g Mem.”) (Dkt. 36) at 5-7.) The Government notes that his cooperation “was essential to the government’s bringing criminal charges against Laraine Castellano” at whose direction Defendant engaged in the fraudulent scheme for which he was charged. (Id. at 5 (citing United States v. Castellano, 15-CR-523 (NGG) (E.D.N.Y.).) The information provided also led to the conviction of Castellano’s two sons, Thomas Scialpi and Dennis Scialpi, as well as an accountant who worked for United Entities. (Id. (citing Castellano, 15-CR-523 and United States v. Silverman, 15-CR-125, (NGG) (E.D.N.Y.).) At sentencing for Castellano and her sons, the relevant offense conduct included bank fraud related to the 2004 and 2007 Loans made to United Entities by Comerica Bank. See Scialpi Presentence Investigation Report
16-17, Castellano, 15-CR-523, Dkt. 150 [hereinafter "Scialpi PSR"]; Castellano Presentence Investigation Report
