Case 1:15-cr-00058-CMA Document 127 Filed 11/17/16 USDC Colorado Page 1 of 10

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
CASE NO. 15-CR-00058-CMA
UNITED STATES OF AMERICA,
Plaintiff,
v.
MICHAEL TODD OSBORN,
Defendant.
_____________________________________________________________________________
DEFENDANT'S SENTENCING STATEMENT
____________________________________________________________________________
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW the Defendant, Michael Osborn, by and through his attorney of record,
Matthew K. Belcher, Assistant Federal Public Defender, and hereby requests that the Court
impose a sentence of 47 months imprisonment, followed by a three year term of supervised
release. In support thereof, Mr. Osborn would show as follows:
I.

Procedural History:

On May 12, 2015, Mr. Osborn was arrested based on a warrant issued by this Court upon
receipt of the Indictment filed by the Government on February 11, 2015. On May 15, 2015,
Mr. Osborn was released on conditions and has been on bond ever since. On January 21, 2016,
Mr. Osborn notified the Court of his intention to plead guilty pursuant to a written plea
agreement with the Government. A few weeks later, on February 9, 2016, Mr. Osborn did
indeed plead guilty pursuant to a plea agreement with the Government which included, among

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other things, an agreement to assist the Government in its further investigation and prosecution
of the case.
Over the next nine months, Mr. Osborn remained free on bond and assisted the
Government to the best of his ability. Mr. Osborn has debriefed with the Government, provided
the Government with additional leads, additional evidence, and has agreed, if need be, to testify
in any further proceedings related to the investigation and prosecution of his case. In doing so,
Mr. Osborn readily admitted to his role in the offenses charged, accepted responsibility for his
actions by opting to plead guilty early on in the matter instead of unnecessarily tying up both the
Government’s and the Court’s time and resources, and has worked hard in the process to put
himself in a position to begin to repay everyone the money that they lost.
Based on this cooperation, undersigned counsel has been informed by the Government
that, as anticipated in the Plea Agreement, a motion for downward departure will be filed by the
Government requesting that the Court depart ten months below the bottom of the applicable
guideline range. As stated in the Plea Agreement, Mr. Osborn has submitted that the applicable
Guideline range is 57 to 71 months. If the Court concurs and then applies the reduction
requested by the Government for his substantial assistance, the result would be a
recommendation of 47 months imprisonment. And, for the following reasons, Mr. Osborn would
submit that such a sentence is sufficient, but not greater than necessary, to achieve the goals and
purposes of sentencing set forth in 18 U.S.C. § 3553(a).
II.

The Sentencing Guidelines:

As indicated in the Plea Agreement, the parties are in dispute as to what the Guidelines
recommend in this particular case. The dispute involves the question of whether a two-level
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increase in the Guidelines should apply under § 3B1.1(c) based on Mr. Osborn’s role in the
offense. For the following reasons, Mr. Osborn would submit that the answer is a resounding no.
(1)

Mr. Osborn cannot be the leader of none:

As indicated in Mr. Osborn’s Objections to the Presentence Report, a leader/organizer
enhancement based on the facts and circumstances surrounding the wire fraud offense is
inappropriate because Mr. Osborn was the only criminal participant. No other individuals have
been identified by the Government as being criminally responsible for the fraud and, as such, no
aggravating or mitigating role enhancement under Chapter Three of the Guidelines is
appropriate.
(2)

Chapter Three enhancements have to be based on the laundering of
criminally derived funds, not the wire fraud:

Section 2S1.1, cmt. n. 2(C) clearly instructs that, when confronted with a case in which
subsection (a)(1) is applicable (which it is here), the application of any Chapter Three
adjustments (which includes aggravating role adjustments) shall be determined based on the
offense covered by this guideline (i.e. the laundering of criminally derived funds) and not on the
underlying offense from which the laundered funds were derived. Meaning, that in order for the
two-level enhancement to apply in Mr. Osborn’s case, it would have to be triggered based solely
on Count Ten of the Indictment.
On page 12 of Mr. Osborn’s Plea Agreement, Mr. Osborn stipulated that on June 2, 2010,
he requested that Mr. Engelen wire $44,915.76 from Mr. Engelen’s checking account to the
account of a car dealership in California. Mr. Osborn further stipulated that the funds he
requested to be transferred were criminally derived funds he had received as a result of his wire
fraud. Succinctly put, Mr. Osborn asked Mr. Engelen to transfer ill-gotten gains from Mr.
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Engelen’s account to a car dealerships account in order to purchase a vehicle. These are the facts
that the Court must view when determining if an aggravating role enhancement is appropriate.
(3)

The simple act of asking someone to transfer funds held in their personal
account to a third party’s account cannot support the necessary finding
that Mr. Osborn had control, organization, and responsibility for Mr.
Engelen’s actions.

The gravamen of the enhancement for an aggravating role in the offense is control,
organization, and responsibility for the actions of other individuals, because such an
enhancement is for organizers and leaders, not merely for individuals who can be deemed
important or even essential figures. United States v. Sallis, 533 F.3d 1218, 1223 (10th Cir. 2008).
As such, the Tenth Circuit looks to several factors when determining when such an enhancement
is applicable in a given case. These factors include (1) whether other criminal participants
worked for the defendant; (2) whether the other criminal participants were recruited by the
defendant; (3) whether the other criminal participants’ actions were controlled by the defendant;
(4) whether the criminal participants were paid by the defendant; (5) whether the defendant
limited or restricted the actions of the other criminal participants; and (6) whether the defendant
claimed the right to a larger share of the proceeds. Id.
Additionally, and closely relevant to the case at hand, in fraud cases the Tenth Circuit has
looked to such factors as (1) who exercised control over the funds, (2) who opened the
account(s) that held the funds; and (3) who had signatory authority to withdraw the funds for
distribution. United States v. Reed, 602 Fed. Appx. 436, 440 (10th Cir. 2015). In Reed, the Tenth
Circuit ultimately concluded that the Government had presented sufficient evidence to support
the aggravated role enhancement based, in large part, on the fact that the defendant exercised
control over all the criminally derived funds and mainly deposited those funds in accounts he
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created and, thus, possessed sole signatory authority to withdraw those funds and distribute them
as he saw fit. Id.
Mr. Osborn, in contrast to Reed, did not exercise control of the criminally derived funds,
did not open the bank account(s) that the funds were deposited in, did not possess signatory
authority to withdraw the funds as he saw fit, and, thus, did not have control over when and how
Mr. Engelen spent the money – which he did to the tune of approximately $229,000 (and
possibly as much as $300,000). See page 19 of Mr. Engelen’s Plea Agreement [Doc. #119].
Given the above, Mr. Osborn was at the mercy of Mr. Engelen, not the other way around. If
Mr. Engelen had denied Mr. Osborn’s request to transfer the money, Mr. Osborn would have
been left without recourse.
Furthermore, in Sallis, referenced above, the Tenth Circuit, in the context of a drug
conspiracy, looked to see exactly what control over the other criminal participants the defendant
had in determining whether an aggravating role enhancement applied. There, the Tenth Circuit
found that (1) the defendant exercised decision making authority over the other criminal
participants; (2) the defendant recruited other criminal participants; and (3) the defendant’s
participation in the offense was greater than others, i.e., the defendant determined what drugs to
buy, where to buy them from, who would distribute the drugs, for what price, and would
personally obtain the drugs and package them for resale himself. United States v. Sallis, 533
F.3d at 1223.
In contrast to Sallis, no evidence exists to show that Mr. Osborn recruited Mr. Engelen to
commit the offense of money laundering. This is evident from the facts that have been stipulated
to by the Government and Mr. Engelen. On page 6 of Mr. Engelen’s Plea Agreement, it states,
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in relevant part, that Mr. Osborn was recruited by a third party, who was a mutual friend of
Mr. Osborn’s and Mr. Engelen’s, who thought that Mr. Osborn would be interested in working
with Mr. Engelen and his associates in a financial transaction that was ongoing and involved the
purchasing of gold and diamonds in Africa. Mr. Osborn was recruited, not the other way around.
Additionally, in contrast to Sallis, there is no evidence to suggest that Mr. Osborn
exercised any decision making authority over Mr. Engelen. To the contrary, Mr. Engelen’s
factual stipulation contained in his Plea Agreement suggests the exact opposite. Mr. Engelen’s
factual stipulation is replete with examples of where Mr. Osborn had to rely on Mr. Engelen to
provide financial assistance. Furthermore, Mr. Engelen’s factual stipulation makes it clear that
Mr. Engelen had unfettered access to the money in his checking account and withdrew it at will
to pay for his and his wife’s personal expenses, as well as to finance his international travel and
quest for African gold and diamonds. Nothing in these facts suggests that Mr. Osborn controlled
or restricted Mr. Engelen’s actions with regard to the criminally derived funds.
Lastly, in contrast to Sallis, Mr. Osborn’s role in the money laundering offense was no
greater than that of Mr. Engelen’s. As the facts in both Mr. Osborn’s and Mr. Engelen’s Plea
Agreements attest, at times Mr. Osborn would ask Mr. Engelen to provide money by way of wire
to a third party account. At other times, Mr. Engelen would wire the funds or withdraw the
funds for his own personal benefit without any apparent restrictions placed on him by Mr.
Osborn. Nothing in these facts would suggest that one participant played a greater role than the
other in laundering criminally derived funds. If anything, Mr. Engelen’s actions in creating the
account, exercising control over the funds, have signatory authority to withdraw the funds, and

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having actually withdrawn the funds for his benefit at his discretion, would suggest that Mr.
Engelen, not Mr. Osborn, played a more critical role in the money laundering offense.
In summation, the facts underlying the money laundering offense do not support
Probation’s assertion that Mr. Osborn played an aggravating role in the offense. Mr. Osborn did
not control, organize, and have responsibility over Mr. Engelen. Mr. Osborn was recruited by a
friend of Mr. Engelen’s to assist Mr. Engelen and his crew with a financial transaction involving
African gold and diamonds, not the other way around. Mr. Engelen created the account that the
funds were deposited in, controlled the funds, had signatory authorization to withdraw the funds,
and did, in fact, withdraw the funds at his discretion for his personal benefit. Based on these
undisputed facts, an aggravating role enhancement would be inappropriate and unreasonable.
III.

Voluntary Surrender:

Mr. Osborn would request that the Court allow him to self-surrender to the designated
Bureau of Prisons facility. As noted above, Mr. Osborn has successfully remained on bond for
over a year and a half, a feat that his co-defendant could not duplicate. Furthermore, Mr. Osborn
has cooperated with the Government for a majority of that time and, as such, is anticipating a
motion for downward departure being filed on behalf the Government. Mr. Osborn’s conduct
since he was arrested in May of 2015 supports a finding by this Court that he is not a flight risk
or danger to the community if he is allowed to self-surrender to the Bureau of Prisons facility
where he is ultimately designated to serve his sentence.
In addition to his success while on bond, and in addition to his cooperation with the
Government, Mr. Osborn has worked diligently over the past 18 months in an attempt to put
himself in a position to begin repaying the individuals whose money he took in relation to the
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wire fraud offense. While Mr. Osborn had hoped to have all of the money available by the time
of sentencing, it appears now that he will not be able to repay the full amount until sometime in
late December 2016, or early January 2017. Nevertheless, these actions, post-indictment, are
signs that Mr. Osborn is remorseful and dedicated to repaying the victims of his offense in full.
In light of Mr. Osborn’s belief that he may be able to repay the full amount of restitution,
along with any fine and court costs, by the end of December or early January, Mr. Osborn would
request that the Court allow him to self-surrender on or after January 6, 2017. Mr. Osborn, in
line with 18 U.S.C. § 3553(a)(7), believes that he is currently in the best position possible to
repay the victims of his offense in a timely and efficient manner. Mr. Osborn would prefer not to
wait an additional four or more years to begin his attempt to repay the restitution, a position
which would undoubtedly be supported by the victims of the offense who are awaiting
repayment. In support of this particular request, attached is a letter that Mr. Osborn has written
the Court to further explain what he hopes to accomplish prior to surrendering to the Bureau of
Prisons.
IV.

Conclusion:

Mr. Osborn defrauded several individuals to the tune of $695,000. Without question, the
nature and circumstances of the offense warrant a sentence of imprisonment. Mr. Osborn’s
conduct post-indictment, however, militates against the sentence currently being recommended
by Probation. Contrary to many white collar clients, and contrary to his co-defendant, Mr.
Engelen, Mr. Osborn readily admitted to his fraudulent acts, readily accepted responsibility for
his actions, and went one step further, by substantially assisting the Government in the further
investigation and prosecution of Mr. Engelen.
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Given these factors, and in light of the anticipated motion for downward departure to be
filed by the Government, Mr. Osborn would request that the Court (1) impose a sentence of
imprisonment of 47 months, followed by three years of supervision; (2) allow Mr. Osborn to
self-surrender on or after January 6, 2017, in order to allow him one last effort to repay the
restitution in full; and (3) to recommend to the Bureau of Prisons that Mr. Osborn be designated
to serve his sentence at FCI Danbury in Danbury, Connecticut, which appears to be the closest
BOP facility to where his family resides and where he intends to release to after completion of
his sentence of incarceration. For the foregoing reasons, Mr. Osborn would submit that such a
sentence would be sufficient, but not greater than necessary, to achieve the goals and purposes of
sentencing.

Respectfully submitted,
VIRGINIA L. GRADY
Federal Public Defender

s/Matthew K. Belcher
MATTHEW K. BELCHER
Assistant Federal Public Defender
633 17th Street, Suite 1000
Denver, CO 80202
Telephone: (303) 294-7002
FAX: (303) 294-1192
matthew.belcher@fd.org
Attorney for Defendant

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CERTIFICATE OF SERVICE
I hereby certify that on November 17, 2016, I electronically filed the foregoing with the
Clerk of Court using the CM/ECF system which will send notification of such filing to the
following e-mail addresses:
Linda S. Kaufman, Assistant U.S. Attorney
Email: Linda.Kaufman@usdoj.gov
Justin Bishop Grewell, Assistant U.S. Attorney
Email: Bishop.Grewell@usdoj.gov
and I hereby certify that I have mailed or served the document or paper to the following non
CM/ECF participant in the manner (mail, hand-delivery, etc.) indicated by the non-participant’s
name:
Michael Todd Osborn
via mail

s/Matthew K. Belcher
MATTHEW K. BELCHER
Assistant Federal Public Defender
633 17th Street, Suite 1000
Denver, CO 80202
Telephone: (303) 294-7002
FAX: (303) 294-1192
matthew.belcher@fd.org
Attorney for Defendant

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November 17,2016
The Hcnrable Judge Christine M Arguello
U.S. District Court

A.A. Arraj USA Courthouse #A6Q2
90119^ Street

Denver, Colorado, 80294-3589

Dear Judge Argeilo,

I am writing you this letter in advance of my sentencing to request that I be permitted to voluntarily
surrender myself to the BOP facility where I will be serving my sentence. I have no delusions about the
crime Icommitted and that jail time is warranted for my actions. Iam however making this request based
on the following facts and for the following reasons:

First, I have been out on bond since May of 2015, and apart from my previous living conditions, I have
maintained ail bond conditions imposed upon me with no issues. I have presented myself to the court for
every required hearing and have not missed my required weekly web check-in with my pretrial officer
here in New York. Immediately following my arrest in May 2015,1 voluntarily resigned from the financial
services positions I held, which greatly impacted my ability to earn an Income. To earn money to support

my family, I began consulting to small and medium sized clients in developing their technology platforms
such as database design and management, mobile applications and web sites. If necessary, a list of the
work 1have completed as well as currently doing can be provided to your office. In the beginning of 2016,
I began with one client and as of today, I now represent over 30 individual clients. The income I have
received from this work has given me the ability to obtain permanent residency, support my family and
pay off previous business obligations that 1had agreed to after my arrest. The reason I bring this to the
courts attention, is I have several client projects that I have been working on since August 2016 that

completed in late December and Iam set to get paid for these services on January 6^^. The amount I am
to receive is more than what I owe in restitution. I have caused the victims in my case enough pain and
for them to wait until I am released from incarceration to potentially get paid back is something I do not
wish for them to have to endure. This Is the best opportunity I financially have to ensure the victims in

this case are paid back, as there Is not guarantee I can earn enough money to pay them back as quickly
upon my release.

Second, 1have been married for eleven years and have three small children ages 9, 7 and 3. I have no

delusions of how my actions have impacted myfamily physically, psychologically and financially. While I
will not be able to immediately repair the physical and physiological damage my actions have caused my
family, Ican assist from a financial perspective and the funds I am expected to receive in January for the
work Iam completing in December, would ensure that my not onlyare the victims paid but my family Is
financially stable during this difficult process.

Finally, Iam a New York resident and myfamily lives in the cityof Manhattan. Accordingly, Iwould request
that I be allowed to voluntarily surrender to FCI Danbury, as It is the closest facility to my family and to
the location I intend to be release to on my supervision.

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Thank you for your consideration in this matter.

Michael OsDorn