IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA
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UNITED STATES OF AMERICA
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CRIMINAL NO. 08-CR-371 (PLF)v.
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STEWART D. NOZETTE
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Defendant.
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DEFENDANT STEWART D. NOZETTE’S SENTENCING MEMORANDUM
Bradford A. BerensonD.C. Bar No. 441981SIDLEY AUSTIN LLP1501 K Street, N.W.Washington, D.C. 20005Telephone: (202) 736-8000Fax: (202) 736-8711Email: bberenson@sidley.com
Case 1:08-cr-00371-PLF Document 43 Filed 03/12/12 Page 1 of 52
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TABLE OF CONTENTS
Page
INTRODUCTION
......................................................................................................................... 1
BACKGROUND
........................................................................................................................... 4
SENTENCING GUIDELINES CALCULATION
................................................................... 20
I.
THE SENTENCING GUIDELINES REQUIRE COUNTS I AND II TO BE GROUPED............................................................................................................................................ 21
A.
The Counts Must Be Grouped Under § 3D1.2(b) Because They Involve the SameVictim and Constitute Part of a Common Scheme or Plan ................................... 22
B.
The Counts Should be Grouped Under § 3D1.2(c) Because the ConductUnderlying Count One is a Specific Offense Characteristic in Count Two ......... 25
SENTENCING REQUEST
........................................................................................................ 26
I.
DR. NOZETTE SHOULD RECEIVE A SENTENCE BELOW THE GUIDELINESSENTENCING RANGE FOR INCARCERATION. ....................................................... 27
A.
Dr. Nozette Provided Substantial Assistance to Law Enforcement Authorities inthe Investigation of Other Offenses. ..................................................................... 28
B.
The Interests of Justice Warrant a Lenient Sentence ............................................ 30
II.
THE COURT SHOULD NOT IMPOSE FINES AS PART OF DR. NOZETTE’SSENTENCE. ..................................................................................................................... 35
III.
THE COURT SHOULD ORDER RESTITUTION NOT TO EXCEED $62,593.01 FORCOUNT ONE AND NO RESTITUTION FOR COUNT TWO. ..................................... 36
A.
The Court Should Order No More Than $62,593.01 in Restitution for Count OneBecause the Government’s Actual Net Losses Resulting from Dr. Nozette’sConduct Do Not Exceed $62,593.01 .................................................................... 37
B.
No Restitution Should be Ordered for Count Two Because it is Not StatutorilyAuthorized and Because it Would Unnecessarily Delay and Complicate theSentencing Proceedings ........................................................................................ 42
IV.
THE COURT SHOULD SET A SCHEDULE OF PERIODIC NOMINALRESTITUTION PAYMENTS THAT ACCOUNTS FOR DR. NOZETTE’S LACK OFFINANCIAL RESOURCES. ............................................................................................ 44
CONCLUSION
........................................................................................................................... 49
Case 1:08-cr-00371-PLF Document 43 Filed 03/12/12 Page 2 of 52
INTRODUCTION
Dr. Stewart Nozette is a research scientist who specializes in the design of satellites andspace-based instruments for lunar exploration. He holds a Ph.D in Planetary Science from theMassachusetts Institute of Technology, has served on the White House National Space Council,and has been a central player in the international effort to explore polar regions of the moon’ssurface. A satellite he designed hangs on public display at the Smithsonian Air and SpaceMuseum on the National Mall.
Dr. Nozette comes before the Court for sentencing having pled guilty in this case to onecount of conspiracy to defraud the United States through the submission of false claims, and onerelated count of tax evasion. These two offenses arise from a single course of conduct involvingmisadministration of a peculiar form of government contract known as an IntergovernmentalPersonnel Act (“IPA”) agreement. That conduct involved using IPA funds received by a small501(c)(3) organization Dr. Nozette owned and controlled, the Alliance for CompetitiveTechnology (“ACT”), to defray personal expenses that were incorrectly characterized oninvoices as fringe benefits paid to him by ACT. These expenses were not eligible forreimbursement under the IPA, thus resulting in the false claims to the contracting agencies, andthey should have been paid for out of personal funds Dr. Nozette otherwise would have receivedas salary from ACT, thus resulting in tax evasion. Dr. Nozette has accepted responsibility forthis conduct, pled guilty, paid his tax liability, and worked to make amends by assisting thegovernment in other investigations.We are of course mindful that, in September 2011, Dr. Nozette pled guilty to charges of attempted espionage for conduct post-dating his plea in this case. Dr. Nozette’s 11(c)(1)(C) pleaagreement in that case, which this Court accepted at the plea hearing on September 7, 2011,imposes an incarceration term of 156 months, far longer than any possible term of imprisonment
Case 1:08-cr-00371-PLF Document 43 Filed 03/12/12 Page 3 of 52
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