United States v. Emor (850 F. Supp. 2d 176, 2012)

OPINION, FINDINGS OF FACT, AND CONCLUSIONS OF LAW

PAUL L. FRIEDMAN, District Judge.

I. INTRODUCTION

Charles I. Emor founded SunRise Academy, a private school for special needs students in the District of Columbia, and ran the school for ten years. After coming under investigation for misuse of SunRise funds, he pled guilty in August 2011 to a single count of wire fraud. In his plea agreement, Mr. Emor and the United States agreed that the Court would consider evidence presented by the parties at an evidentiary hearing and then determine the amount of loss, the amount of restitution owed and the identify of the victim(s), the amount of a forfeiture money judgment, and whether specific property that had been seized by the government was subject to criminal forfeiture. The Court conducted a lengthy evidentiary hearing on these issues and received pre-hearing and post-hearing briefs from the parties. The Court now issues its findings of fact and conclusions of law.

II. PROCEDURAL BACKGROUND

On May 18, 2010, the United States obtained seizure warrants from Magistrate Judge Alan Kay based on probable cause to believe that over $2 million contained in the two bank accounts held in the name of Core Ventures, LLC, and a 2006 Lexus were proceeds of criminal activity by Mr. Emor and, therefore, subject to forfeiture. See Docket No. 1, 10-266-M01; Docket No. 1, 10-267-M-01; Docket No. 1, 10-268-M-01.

On November 3, 2010, a federal grand jury returned a 37-count Indictment against Mr. Emor charging wire and mail fraud, theft, money laundering, interstate transportation of stolen property, and D.C.Code theft and fraud violations. See Indictment (Nov. 3, 2010) [Dkt. No. 3]. The Indictment also notified Mr. Emor that the government was seeking forfeiture of the seized funds and vehicle as well as a money judgment. Id.

On August 9, 2011, pursuant to a plea agreement entered under Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure, Mr. Emor pled guilty to a Superseding Information charging him with one count of wire fraud under 18 U.S.C. § 1343. See Superseding Information (Jul. 22, 2011) [Dkt. No. 44] (“Sup.Info.”). The Information charged that from in or about January 2006 through in or about November 2010, Mr. Emor, “assisted by others, did devise and intend to devise a scheme and artifice to defraud and to obtain money by means of materially false and fraudulent pretenses.” Id. at 3. “A goal of the scheme and artifice was for defendant Emor to fraudulently obtain money, from SunRise’s bank accounts, for his own use and benefit, and for the use and benefit of his friends and relatives, and to further the scheme by various means, including omissions of material fact, false material pretenses, representations and promises.” Id. “It was part of the scheme and artifice that defendant Emor, through various misrepresentations and omission of material facts, used the money obtained from SunRise’s bank accounts in a manner unrelated to the education of students with disabilities at SunRise.” Id.

The Superseding Information also charged that as part of the scheme, Mr. Emor used a PayPal account to facilitate internet purchases on eBay, and that it was a further part of the scheme for Mr. Emor to cause to be transmitted by means of wire communication the transfer of funds from SunRise’s bank accounts to pay for his personal expenditures through his PayPal account. Sup. Info, at 3-4.

The Information contained a forfeiture allegation notifying Mr. Emor that he would be required to forfeit the criminal proceeds of the wire fraud scheme, in the form of a money judgment of between $30,000 and $2,470,000 and through forfeiture of specific property, including: (a) $1,810,165.29 seized from BB & T Bank account number #xxxxx9526, held in the name of Core Ventures; (b) $225,141.98 seized from BB & T Bank account number #xxxxx3943, held in the name of Core Ventures; and (c) a 2006 Lexus LX470, registered to Core Ventures. Id. at 4-5.

In his plea agreement, Mr. Emor agreed that the Statement of the Offense, prepared by the government and signed by Mr. Emor, fairly and accurately described his actions and his involvement in the offense to which he pled guilty. Plea Agreement (Jul. 21, 2011) [Dkt. No. 47] (“Plea Agr.”), ¶ 4. The Statement of the Offense described Mr. Emor’s fraud scheme identically with the count of wire fraud in the Superseding Information, described above. See Statement of the Offense (Aug. 9. 2011) [Dkt. No. 48] (“Stmnt. Offense”), ¶¶ 6-10.

Mr. Emor and the government agreed that the Court would determine the amount of loss under the Sentencing Guidelines. The parties understood that Mr. Emor would argue that the loss amount ranged between $30,000 and $70,000, while the government would argue that the loss amount was $2,470,000, as alleged in the Indictment. Plea Agr. ¶ 6. Mr. Emor agreed to pay restitution of at least $30,000, with the understanding that the Court would determine the full amount of restitution pursuant to 18 U.S.C. §§ 3663 and 3663A. Id. ¶ 10. Finally, Mr. Emor consented to the forfeiture set forth in the Superseding Information, agreeing to forfeiture of a money judgment of at least $30,000, with the understanding that the government would request a money judgment of $2,470,000 and forfeiture of the property seized from Core Ventures (funds held in two BB & T Bank accounts and a 2006 Lexus LX470). Id. ¶ 11(a). The government understood that Mr. Emor would argue at sentencing that the assets seized from Core Ventures were not derived from any wire fraud scheme and are not properly the subject of forfeiture. Id.

The evidentiary hearing was scheduled to last for three days, but instead stretched over eleven days from September through December 2011. Before the hearing was completed, Mr. Emor proposed that the Court sentence him — pursuant to the terms of the Rule 11(c)(1)(C) plea agreement, under which the parties had agreed to a sentencing range of eight to eighteen months' — and make its final determination of the loss, restitution, and forfeiture amounts later, so that he might have the opportunity to benefit from any time already served and so that he could be moved to a federal facility. The government consented. By Memorandum Opinion and Order of October 21, 2011, and based on the evidence it had heard to date, the Court made a preliminary determination that the amount of loss exceeded $200,000 (preliminarily $230,281.40) and calculated Mr. Emor’s Guideline sentencing range accordingly — a range that exceeded the agreed upon sentence under the plea agreement. See Memorandum Opinion and Order (Oct. 21, 2011) [Dkt. No. 61] at 3.

On November 10, 2011, the Court sentenced Mr. Emor to eighteen months’ incarceration (the maximum permitted under the Rule 11(c)(1)(C) plea agreement) with credit for time already served, and three years of supervised release. See Judgment (Nov. 17, 2011) [Dkt. No. 73], at 2-3. At sentencing, the Court stated that it would impose both restitution and forfeiture but that it needed additional time to determine the identity of the victims, the amount of restitution, the amount of the forfeiture money judgment, and whether the seized properties were subject to forfeiture. See Judgment at 4-5; Preliminary Order of Forfeiture (Nov. 10, 2011) [Dkt. No. 72],

After sentencing, Mr. Emor requested transfer to the Bureau of Prisons and waived his right to be present for the remainder of the evidentiary hearing and the Court’s determination of restitution and forfeiture. See Minute Entry (Dec. 19, 2011); Hr’g Tr. (12/19/11) at 17.

III. FINDINGS OF FACT

As noted, the evidentiary hearing lasted eleven days. The Court admitted over two hundred documents in evidence and heard testimony from eleven witnesses. The following witnesses were called by the government to testify: Jamila Negatu, account specialist for SunRise Academy; John McNair, Jr., Special Agent of the FBI; Paula Travers, former placement specialist monitor for the District of Columbia Public Schools; Amy Maisterra, Interim Assistant Superintendent for the Division of Special Education at the Office of the State Superintendent of Education; Louis Leibowitz, outside accountant for SunRise Academy; and Ryan Clark, former business services representative at LegalZoom, Inc. At least one of these witnesses, Jamila Negatu, was a reluctant witness for the government, testifying under subpoena and with a grant of immunity from prosecution. Hr’g Tr. (9/19/11) at 14-15.

The following witnesses testified on behalf of Mr. Emor: Leonard Ozoemena, former and current member of the SunRise Academy Board of Directors; Erica Monique Hamer, former teacher, program manager, and student welfare coordinator at SunRise Academy; Elena Nicole Viola Roberts, former lead teacher at SunRise Academy; Ava Hughes Booker, former Executive Director of Residential and Interagency Programs for the District of Columbia Public Schools and later outside educational consultant for SunRise Academy; and Esteban Morales, former educational director and current member of the Board of Directors at SunRise Academy.

After carefully considering all of the evidence before it, and making credibility findings as necessary, the Court makes the following findings of fact.

A. Special Education in the District of Columbia

The Public Education Reform Amendment Act of 2007, effective June 12, 2007, created the District of Columbia’s Office of the State Superintendent of Education (“OSSE”) and entrusted it with authority over all state special education functions in the District. Since its creation, OSSE has served as the state education agency (“SEA”) in the District of Columbia that manages the state-level education functions required by federal and local law. Hr’g Tr. (10/13/11 a.m.) at 50. Before the advent of OSSE, the District of Columbia Public Schools (“DCPS”) served as both the SEA and as the local education agency (“LEA”). Id. at 52.

Beginning in 2007, in order for a nonpublic school to provide special education services to District of Columbia students, a school was required to submit an application and receive a Certificate of Approval from the SEA. Hr’g Tr. (10/13/11 a.m.) at 52. The purpose of the approval process for non-public schools is to ensure compliance with federal and local education requirements. Id. at 54.

The District of Columbia is obligated to pay non-public schools for providing special education programs and related services to District of Columbia students placed in its care. Hr’g Tr. (10/13/11 a.m.) at 51. Dr. Amy Maisterra, the Interim Assistant Superintendent for Special Education for the District of Columbia, explained: “The government provides funds to support the implementation of each child’s individualized education program or IEP,” a requirement of federal law. Hr’g Tr. (10/13/11 a.m.) at 51; Hr’g Tr. (10/13/11 p.m.) at 37. An IEP is “a program of services that’s created for the [particular] student, that’s based on the student’s need and their disability as defined in the law.” Hr’g Tr. (10/6/11 a.m.) at 90.

Payments to non-public schools are “for education purposes,” specifically “tuition and related services.” Hr’g Tr. (10/13/11 a.m.) at 55. These payments are comprised of two components: (1) basic tuition; and (2) related services for Medicaid-eligible students based on a student’s IEP. Hr’g Tr. (10/13/11 a.m.) at 54-55, 57-58. The District of Columbia is reimbursed by the federal government for a portion of the Medicaid-eligible expenses it pays to non-public schools for related services that are provided to special needs students. See Indictment ¶¶ 9-11.

In January 2009, OSSE assumed responsibility for payment of invoices submitted by non-public schools; before then, DCPS received and processed the monthly invoices. Hr’g Tr. (10/13/11 a.m.) at 59, 61. While the methodology used to determine the amount of reimbursement for special education services changed when OSSE assumed payment responsibilities, the invoice payment system and basis for payment of special education were the same during the period that DCPS served as the state education agency. Id. at 57-58, 61.

When asked about “the expectation in terms of how these funds are used by the schools,” Dr. Maisterra testified that the funds are “used for education and related services.” Hr’g Tr. (10/13/11 a.m.) at 57-58, 61. She also indicated that fixed costs incurred by a school, such as rent or utility payments, make up part of the cost of the education and related services for which the school is reimbursed: while cautioning that she had not previously thought deeply about the issue, she testified that she believed “expenses that are related to running an educational program ... would be part of the tuition rate” and properly would come out of the money that is paid to a school pursuant to its invoices. Hr’g Tr. (10/13/11 p.m.) at 69; see id. at 70 (“I would think that ... any operational costs that support[ ] the education program could be considered as part of the tuition rate.”). Dr. Maisterra testified, however, that she “wouldn’t expect” a nonprofit school that receives its funding exclusively from the District of Columbia through the reimbursement program to earn any type of profit. Id. at 70. When asked why, she responded: “Because I guess under the auspices of a nonprofit you wouldn’t expect to see a significant profit margin.” Id.

B. SunRise Academy

Mr. Emor founded SunRise Academy in 1999 as a nonprofit corporation under the laws of the District of Columbia. Def. Ex. 3. The Articles of Incorporation for SunRise state that its purpose is “to serve the special needs of students diagnosed as having learning and emotional deficits or disabilities, and needing special education services in the District of Columbia from ages six to twenty-one.” Id. The Articles state that the corporation “is organized exclusively for educational purposes,” and further provide:

No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to its members, trustees, directors, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of Section 501(c)(3) purposes.

Id. Nearly identical provisions — limiting SunRise’s activities exclusively to educational purposes, and prohibiting earnings of the corporation from benefitting any private person — -were included in the bylaws ratified by SunRise in April 1999. Def. Ex. 2 at 1, 6.

By 2007 SunRise had over 150 students enrolled in two campuses: the Intermediate Campus was located at 1501 11th Street NW, and it served male youths aged 7 through 15; the Thurgood Marshall campus was located at 1816 12th Street NW, and it served male youths aged 14 through 22. SunRise’s administrative offices were located at 1130 6th Street NW. Supers. Info. ¶ 3.

Over the ten years in which Mr. Emor was involved with SunRise, he held several titles, including President, Executive Director, Founder, and Consultant. Stmnt. Offense ¶ 1; Gov. Exs. 1, 3, 8, 9-17, 19; Hr’g Tr. (9/19/11) at 25, 41-43.

C. SunRise’s Contract with the District of Columbia

In July 2007, SunRise filed an application with DCPS — which at that time served as the District’s state education agency — for a Certificate of Approval to provide educational and related services to District of Columbia special needs students as a non-public school. SunRise’s application was approved. Gov. Exs. 1, 2; Hr’g Tr. (9/19/11) at 181-82; Hr’g Tr. (10/5/11 a.m.) at 32-35; Hr’g Tr. (10/13/11 a.m.) at 52.

SunRise students did not pay any tuition to attend the school, and the only sources of funding for Sunrise during the period relevant to this case were the District of Columbia and the federal government. Stmnt. Offense ¶ 4. Sunrise received payment for the provision of education and related services after it submitted monthly invoices to the state education agency (first DCPS, and later OSSE) “on a reimbursement basis, representing that it had provided special education services to a certain number of qualifying students.” Id.; Hr’g Tr. (9/19/11) at 32. SunRise was reimbursed with a flat fee according to the number of students that were enrolled the previous month. Id. at 181-82; Hr’g Tr. (9/20/11) at 137-39; see Gov. Ex. 206. From October 2005 through November 2010, the District of Columbia reimbursed SunRise more than $30 million for special education and related services for District of Columbia students. Stmnt. Offense ¶ 4.

Payments by the District of Columbia to SunRise were comprised of two components: a fixed tuition based on the number of students enrolled and reimbursement for Medicaid-eligible related services that varied based on a particular student’s IEP. Hr’g Tr. (9/19/11) at 32-34; Hr’g Tr. (10/13/11 a.m.) at 54-55, 57-58. SunRise submitted monthly invoices for tuition and related services to the District of Columbia for payment, Hr’g Tr. (10/13/11 a.m.) at 64-65, 72; Gov. Ex. 206, and it also submitted monthly forms to the DCPS Medicaid Recovery Unit in order to track Medicaid-reimbursable expenses. Hr’g Tr. (9/19/11) at 32-34; Indictment ¶ 11. The District of Columbia reimbursed SunRise for the educational and related services that the school indicated it had provided. Hr’g Tr. (9/19/11) at 149-50, 181; Gov. Ex. 215. The federal government, in turn, reimbursed the District of Columbia for a portion of the Medicaid-eligible expenses it paid to SunRise. Indictment ¶¶ 9-11.

During the time period covered by Mr. Emor’s fraud scheme, the District of Columbia paid SunRise approximately $400,000 to $600,000 per month, based upon the invoices submitted by SunRise. Hr’g Tr. (9/19/11) at 181. These payments were deposited directly into SunRise’s bank accounts. Id. at 149; Hr’g Tr. (10/5/11) at 38-39.

D. The SunRise Board of Directors

Since its incorporation in 1999, SunRise was governed by a Board of Directors (technically a Board of Trustees) comprised of Mr. Emor and other individuals. The Board’s membership fluctuated between three and four directors. Def. Exs. 2, 3; Gov. Exs. 9-20. SunRise Board members during the period encompassing Mr. Emor’s fraud scheme were Mr. Emor, and, at various times, Chinedu Chukwudozie, Gertrude Edwards (longtime principal of SunRise), Melissa Jean-Baptiste (teacher and vice-principal at SunRise), Faustina Okolo (Mr. Emor’s sister), Nicholas Anuforoh (Mr. Emor’s college-age son), and Jámila Negatu (SunRise employee and family friend of Mr. Emor). Gov. Exs. 16-20.

During the year 2008, the Board kept no records of any meetings. Gov. Ex. 18. From January 2009 through early 2010 (a critical period in this case), the Board consisted of Mr. Emor, Nicholas Anuforoh and Jamila Negatu. Id; Def. Ex. 3; Hr’g Tr. (9/19/11) at 46-47.

Ms. Negatu has known Mr. Emor since she was 12 years old. Hr’g Tr. (9/19/11) at 20. Upon completing college in 2006, she was hired by SunRise as an administrative assistant, and her title later changed to account specialist. Id at 18, 27-28, 41. Ms. Negatu appears to have joined SunRise’s Board in December 2008, although no meetings were held that month. Id at 46, 137-38. At the time she joined the Board, Ms. Negatu had not previously served on a Board of Directors and was unfamiliar with the type of work that a Board performs. Id at 137-38.

Mr. Anuforoh, Mr. Emor’s son, also appears to have joined SunRise’s Board in 2008, and was elected President of the Board in January 2009. Gov. Exs. 18-19. At the time, he was around twenty years old and was enrolled in college at the University of Maryland. Hr’g Tr. (9/19/11) at 47. He also worked part-time doing physical maintenance and IT work for SunRise. Id at 61.

Ms. Okolo, Mr. Emor’s sister, served as a Board member from 1999 to January 2009. Def. Ex. 3; Gov. Exs. 9-18. She recently returned to the Board for a period of time. Hr’g Tr. (12/20/11) at 42-43; Def. Ex. 3.

Ms. Edwards — also known as Makini Niliwaambieni and referred to by SunRise students and staff as “Mama Makini”— served on the Board from 2002 through 2007. Def. Ex. 3. Prior to the establishment of SunRise, Ms. Edwards and Mr. Emor worked together as co-founders of another school, and she was the principal of both SunRise campuses until sometime around 2008. Hr’g Tr. (9/19/11) at 72; Hr’g Tr. (9/20/11) at 109.

In January 2010, just before Mr. Emor reported to prison to serve his sentence for a prior conviction (described below), former SunRise Vice Principal Melissa Jean-Baptiste joined the Board and served until June 2010. Gov. Ex. 20; Def. Ex. 3; Hr’g Tr. (9/19/11) at 140-41; Hr’g Tr. (10/14/11) at 37-38.

Mr. Leonard Ozoemena was an original Board member, serving from 1999 to 2002. Mr. Ozoemena has lived with Ms. Okolo, Mr. Emor’s sister, for years. Hr’g Tr. (10/14/11 a.m.) at 35; see Gov. Ex. 5; Def. Ex. 1. Mr. Ozoemena testified that he stopped serving on SunRise’s Board in 2002 because he believed that the directors should receive compensation. Hr’g Tr. (10/14/11 a.m.) at 19. In June 2010, Mr. Ozoemena returned to the Board and currently serves as Board President. Id. at 7, 42. In addition to knowing Mr. Emor through Ms. Okolo, Mr. Ozoemena purchased some of the stolen computers from Mr. Emor that were involved in Mr. Emor’s prior criminal case, although he testified that he believed Mr. Emor was legitimately selling the computers. Id. at 45^7. Mr. Ozoemena has no direct knowledge of anything with respect to the events at issue in this case, since he was not involved with SunRise from 2002 until June 2010, id. at 19-20, and the Court found his testimony respecting the relationship between SunRise and Core Ventures wholly incredible. Hr’g Tr. (10/14/11 p.m.) at 50-51.

In December 2011, Esteban Morales, a former educational director at SunRise from 2009-2010, joined the Board. Hr’g Tr. (12/20/11) at 38. He was never a director during the period of Mr. Emor’s fraud scheme and has no direct knowledge of most of the events at issue.

E. Mr. Emor’s Prior Conviction

On March 7, 2006, a federal grand jury indicted Mr. Emor in the prior case of United States v. Emor, Criminal No. 06-0064-02(JR), on charges of conspiracy to commit mail fraud and other offenses. See Indictment, United States v. Emor, Criminal No. 06-0064-02 (Mar. 7, 2006) [Dkt. No. 1], In that matter, Mr. Emor was convicted of conspiring with others to steal Gateway computers and resell them. See Gov. Ex. 163 (Presentence Investigation Report) ¶ 11. Mr. Emor received multiple shipments of stolen computers from a co-conspirator who worked.at Gateway; Mr. Emor had at least two stolen computers shipped to SunRise. Id. ¶ 13.

On December 21, 2006, a jury found Mr. Emor guilty of conspiracy to commit mail fraud. Verdict Form, United States v. Emor, Criminal No. 06-0064-02 (Dec. 21, 2006) [Dkt. No. 37]. Mr. Emor was found accountable for sixty-nine stolen computers, and the loss attributed to Mr. Emor was $138,000. Gov. Ex. 163 ¶ 17. On August 16, 2007, Mr. Emor was sentenced to serve a term of incarceration of twelve months and one day and a term of thirty-six months of supervised release. Gov. Exs. 39, 207. At sentencing, Mr. Emor— who was born in Nigeria and is not a U.S. citizen — was informed by the Court of his potential deportation as a result of his conviction. Gov. Ex. 207. Mr. Emor was released on bond pending appeal. Order, United States v. Emor, Criminal No. 06-0064-02 (Aug. 30,2007) [Dkt. No. 76],

On July 17, 2009, the United States Court of Appeals for the District of Columbia Circuit affirmed Mr. Emor’s conviction. Gov. Ex. 40. On January 7, 2010, the District Court ordered Mr. Emor to report to prison on January 20, 2010. Gov. Ex. 41; Hr’g Tr. (9/19/11) at 45.

F. OSSE Investigation and Revocation of SunRise’s Certificate of Approval

In April 2009, Dr. Richard Nyankori, the Deputy Chancellor for Special Education at DCPS, requested that OSSE conduct an investigation of SunRise “due to our perception that the school has not been fully nor consistently implementing the IEPs of the DCPS students which attend the school at public expense.” Gov. Ex. 209. The letter noted that “[o]ur initial findings suggest that the school, especially the campus located at the Thurgood Marshall Center, is not operationally stable to meet students’ needs nor has it addressed significant student truancy issues.” Id.

Upon receiving Dr. Nyankori’s letter, OSSE began conducting an on-site monitoring process at SunRise, which lasted approximately two weeks. Hr’g Tr. (10/13/11 a.m.) at 77-79. Dr. Amy Maisterra coordinated OSSE’s on-site monitoring process, and visited the school herself on one occasion. Id. at 78. OSSE’s monitoring team reviewed the school’s facilities, interviewed staff members, parents, and students, and reviewed school records. Id. at 77.

On May 7, 2010, OSSE issued a report with its investigative findings and revoked SunRise’s Certificate of Approval. The revocation was based on a set of related violations, including failure to keep accurate daily attendance records, failure to fully report absenteeism and truancy, provision of information to OSSE and DCPS “that was false, misleading or, at best, incomplete” regarding student attendance, “Submission of false student records as a basis for receiving payment from the District for services not actually rendered,” along with “false claims” regarding the attendance of one student and “[fjabrication and maintenance of student records for a student which represented him attending more than three months after his transfer to another school.” Gov. Ex. 205 at 1.

OSSE did not base its revocation of SunRise’s certifícate on any findings related to the quality of education provided at the school. Gov. Ex. 205 at 1; Hr’g Tr. (10/13/11 a.m.) at 87-88. While “not making any findings on which it bases a decision” on this matter, the investigative report did state that OSSE “observed conditions that raised significant concerns about the school’s ability to provide a Free Appropriate Public Education consistent with federal requirements.” Gov. Ex. at 1; see id. at 11-14 (describing findings on program quality). Dr. Maisterra testified that the basis for OSSE’s revocation was related to findings that were “black and white issues” regarding truancy and attendance records, whereas assessments of SunRise’s program quality would require more time and be “more subjective.” Hr’g Tr. (10/13/11 a.m.) at 89. Dr. Maisterra further explained that OSSE’s report reflected great concern regarding the quality of SunRise’s academic program, notably, the lack of curriculum and educational materials available to students. Id. at 82, 88; Hr’g Tr. (10/13/11 p.m.) at 69; Gov. Ex. 205. She further testified about the monitoring team’s observations regarding a lack of appropriate curriculum materials. Hr’g Tr. (10/13/11 a.m.) at 83; Gov. Ex. 205.

SunRise did not appeal OSSE’s decision to revoke its Certificate of Approval. Hr’g Tr. (10/13/11 a.m.) at 59.

G. Mr. Emor’s Fraud Scheme

From January 2006 through November 2010, Mr. Emor engaged in a continuing wire fraud scheme, the goal of which was the exploitation of funds provided to SunRise Academy for educational purposes for his personal benefit. Mr. Emor carried out this fraud scheme through three primary methods. He used his authority and control over SunRise to use and divert funds from SunRise’s bank accounts to enrich himself, his family, and his associates by personally or directing others to: (1) withdraw funds from SunRise’s bank accounts by check, wire transfer, or debiVcredit card purchases; (2) use SunRise’s bank accounts to pay for Mr. Emor’s personal PayPal account for purchases made through the online vendor website eBay; and (3) divert $2,087,000 from SunRise’s bank accounts to Core Ventures, LLC, a for-profit company formed and owned by Mr. Emor and operated under his exclusive control. Although his methods varied, Mr. Emor’s individual acts are all part of a common scheme to exploit SunRise funds for his personal benefit and thus to defraud the District of Columbia out of money that it paid for the reimbursement of educational services. The evidence before the Court conclusively demonstrates that Mr. Emor personally benefitted using all three means of implementing his fraud scheme.

The Court’s findings with respect to the three primary methods through which Mr. Emor executed his fraud scheme are described below.

1. Direct Use of SunRise Bank Accounts For Mr. Emor’s Personal Benefit

The first method of theft comprising Mr. Emor’s fraud scheme was his direct withdrawal of funds from SunRise’s bank accounts by check, wire transfer, or debit/credit card purchase. The Court finds that Mr. Emor obtained $178,076.08 from SunRise’s bank accounts to pay for personal expenditures, including support of his children and female companions, jewelry, clothing, liquor, vehicles, custom tailoring, and dating services. See Gov. Exs. 45-46, 61, 74-76, 78-79, 88-90, 92-94, 98-99, 100, 143-62, 202-03.

a. Payments for Personal Purchases

Mr. Emor used a debit/credit card that drew directly from SunRise’s bank accounts to purchase $11,362.94 of personal items, including alcohol, retail goods, and retail and custom-tailored clothing. Hr’g Tr. (10/5/11 p.m.) at 11-13; Gov. Exs. 143-62, 204A.

In addition, in January 2010, Mr. Emor directed Ms. Negatu to wire money to his commissary account at the prison in which he was incarcerated. The total amount for those two wire transfers, which were made from SunRise’s bank accounts, was $1,050. Gov. Exs. 89, 90; Hr’g Tr. (9/19/11) at 82-84. At the time of these transfers, Ms. Negatu had full power of attorney over Mr. Emor’s personal bank account, but she used SunRise’s funds instead; she testified that Mr. Emor had told her to wire the money from the SunRise account. Id. at 83,152-53.

b. Payments to Benefit Family Members and Associates

In addition to purchasing items for his own use, Mr. Emor caused SunRise funds to be spent for the benefit of his family members and associates.

Between December 2009 and June 2010, Mr. Emor directed Ms. Negatu to make rent and utility payments out of SunRise’s bank accounts on behalf of Becky Coker, the mother of three of Mr. Emor’s children, totaling $13,217.70. Gov. Exs. 92, 93, 94, 204A; Hr’g Tr. (9/19/11) at 73-77, 86-92. In addition, SunRise’s records show a February 24, 2009 check in the amount of $6,100 made payable to Louise Pierson that was for Ms. Coker’s rent. Gov. Exs. 78, 204A, Hr’g Tr. (10/5/11) at 48-49. SunRise also paid for Ms. Coker’s monthly Verizon Fios bills and provided her with two cars. Gov. Ex. 94, Hr’g Tr. (9/19/11) at 155-56. At Mr. Emor’s request, SunRise’s Board approved using SunRise’s funds for Ms. Coker’s rent and utility payments. Gov. Ex. 19; Hr’g Tr. (9/19/11) at 77-78, 186. Ms. Negatu explained the Board’s actions by stating that “[it] kind of make[s] sense providing service to the family ... since she is the mother of his child and he’s a founder of the school[.]” Hr’g Tr. (9/19/11) at 77.

At Mr. Emor’s request, Ms. Negatu wrote a $2,500 check from SunRise’s bank accounts to Rene Isaacs — the mother of another of Mr. Emor’s children, because “she needed help with their child.” Hr’g Tr. (9/19/11) at 78-79; Gov. Ex. 88.

On or about March 11, 2009, Mr. Emor signed a $1,000 handwritten check drawn on one of SunRise’s bank accounts made payable to Aissata Traore, who appears to be the mother of one of Mr. Emor’s children; the memo line reads for “support services.” Gov. Ex. 79.

Several checks were drawn upon SunRise’s bank accounts and made payable to Mr. Emor’s adult son, Nicholas Anuforoh, which were unrelated to Mr. Anuforoh’s seasonal employment at SunRise. Specifically, Mr. Anuforoh received a July 28, 2006 check for $1,500; the memo line of the check states “gift.” Gov. Ex. 74. Similarly, on or about August 13, 2008, Mr. Emor drew upon SunRise’s Wachovia bank account, writing two handwritten checks to his son in the amounts of $2,505 and $3,005, with memo lines reading “program Sves”; these checks were in addition to Mr. Anuforah’s paycheck for the pay period ending on August 22, 2008. Gov. Ex. 75; Hr’g Tr. (9/19/11) at 108-11.

Mr. Emor also directed that two checks (dated June 16, 2008 and December 9, 2008 in the amounts of $1,952.79 and $1,324.58, respectively) be issued to the University of Maryland in payment of Mr. Anuforoh’s college tuition. Gov. Ex. 76; Hr’g Tr. (9/19/11) at 99-100. Ms. Negatu acknowledged that Mr. Anuforoh’s seasonal work in SunRise’s maintenance and IT departments should not have qualified him to receive tuition payment benefits. Hr’g Tr. (9/19/11) at 100.

c. Payments for Vehicles and Related Expenses

Mr. Emor used funds totaling $119,910.07 from SunRise’s bank accounts to purchase, register, and maintain a number of vehicles that were unrelated to SunRise’s mission as a special education school and that were driven exclusively by Mr. Emor.

Ms. Negatu testified regarding Mr. Emor’s direct use of SunRise’s bank accounts to purchase, insure, maintain, and repair multiple automobiles, of which he was the sole user. Hr’g Tr. (9/20/11) at 93-97; see Gov Ex. 204A. Specifically, in April 2008, Mr. Emor purchased a Mercedes GL SUV for $47,500. Gov. Ex. 99. In July 2008, Mr. Emor purchased an Infiniti G35 for $16,000. Gov. Ex. 98. In September 2008, Mr. Emor purchased a convertible Mini Cooper for $31,700. Gov Ex. 100; Hr’g Tr. (9/20/11) at 93-96. These vehicles were purchased using funds from SunRise’s bank accounts and were initially registered in SunRise’s name. Gov. Ex. 61 (automobile titles); Hr’g Tr. (9/20/11) at 55-58, 60. The vehicles were never used by other SunRise staff or for educational purposes. Hr’g Tr. (9/20/11) at 73-77; Hr’g Tr. (10/14/11 p.m.) at 100; Hr’g Tr. (12/19/11) at 136. In January 2010, shortly before Mr. Emor reported to prison to serve the sentence for his prior conviction, he ordered these vehicles and others to be stored on blocks in a shed on the grounds of “Edgemeade,” a former school located in Maryland and owned by SunRise. Hr’g Tr. (9/20/11) at 48, 73-77; Hr’g Tr. (10/5/11 p.m.) at 8-9.

In May 2009, Mr. Emor ordered the transfer of the titles for the Mercedes, the Mini Cooper, and the Infiniti from SunRise to Core Ventures, the for-profit LLC created and owned by Mr. Emor. Hr’g Tr. (9/20/11) at 54-60, 68-70; see Gov. Exs. 61, 66. In addition, Mr. Emor caused the title transfer taxes and fees to be paid from SunRise’s bank accounts, not Core Ventures’ bank accounts. Hr’g Tr. (9/20/11) at 63-64, 67. Core Ventures did not provide any compensation to SunRise Academy for the vehicles. Hr’g Tr. (9/20/11) at 64; Gov. Exs. 61, 64-65,102-03.

Mr. Emor told Ms. Negatu that he bought these vehicles to sell them for a profit. Hr’g Tr. (9/20/11) at 25, 59. But at the time Mr. Emor reported to prison in January 2010, at which point he ordered the vehicles stored on blocks and well over a year after the vehicles were purchased, none of the cars had ever been listed for sale. Id. at 59-60. All told, Mr. Emor used $24,710.07 of funds from SunRise’s bank accounts for vehicle-related ownership and maintenance costs, including title transfers, in addition to the $95,200 that he spent on the purchase of the three vehicles. Gov. Exs. 61, 64-65, 102-09, 113-14, 198-99.

d. Sale of SunRise-Owned Property for Personal Benefit

In November 2008, Mr. Emor sold a SunRise-owned 2003 Volvo XC90 for $12,000. Instead of depositing the money from the sale into SunRise’s bank account, Mr. Emor deposited it into his own personal account. Gov. Exs. 61,101; Hr’g Tr. (9/20/11) at 62.

e. Payment to Incorporate Core Ventures

Mr. Emor used a debit card attached to SunRise’s bank account to pay $648 to the online legal service provider LegalZoom, Inc. (“LegalZoom”) for the incorporation of Core Ventures, LLC. Hr’g Tr. (10/5/11 p.m.) at 23; Gov. Exs. 45, 46, 212.

2. Mr. Emor’s Personal PayPal Account and His eBay Purchases

Mr. Emor also exploited funds from SunRise’s bank accounts for his own benefit by having SunRise pay for his personal PayPal account. Hr’g Tr. (10/15/11 a.m.) at 39-89; Hr’g Tr. (10/5/11 p.m.) at 2-13. Mr. Emor used his PayPal account to purchase thousands of dollars’ worth of merchandise from eBay. See Gov. Ex. 115. Because some of the merchandise could have been purchased either for personal use or for school-related purposes, the government excluded from the Court’s consideration, among other items, electronic equipment, computer equipment, food purchases, restaurant bills, and certain retail clothing, because “they possibly could be school expenses.” Hr’g Tr. (10/5/11 a.m.) at 45; see id. at 44-47.

Mr. Emor provided gifts, such as inexpensive watches, cufflinks and gift baskets, to staff members during at least one holiday party. Hr’g Tr. (10/14/11 p.m.) at 97; Hr’g Tr. (10/6/11 a.m.) at 32-37, 42. The Court therefore has excluded from its loss, restitution, and forfeiture calculations all watches, cufflinks, and jewelry that cost less than $150, along with certain other items that might have been gifts to staff or students. See Memorandum Opinion and Order (Oct. 21, 2011) [Dkt. No. 61],

The Court finds that Mr. Emor obtained for his personal use $94,108.32 worth of expensive watches, jewelry, cufflinks, clothing, shoes and boots, dating services, personal entertainment videos, and other items through PayPal and eBay purchases. Hr’g Tr. (10/5/11 a.m.) at 39-89; Hr’g Tr. (10/5/11 p.m.) at 2-13; Gov. Exs. 115-41, 204A. Specifically, Mr. Emor spent the following: $71,008.91 on watches, $8,214.75 on jewelry, $6,721.74 on cufflinks, $4,436.44 on clothing, $1,911.53 on boots and shoes, $444.63 on dating services, $70.46 on personal entertainment videos, and $1,299.86 on miscellaneous items. During the three months before he reported to prison in January 2010 to serve the sentence for his conspiracy conviction, Mr. Emor spent over $50,000 on seven watches. Gov. Ex. 204A.

3. Monetary Transfers to Core Ventures

The Court finds that Mr. Emor used Core Ventures as another means of implementing his fraud scheme, and that the monetary transfers of $2,087,000 from SunRise to Core Ventures were part of that scheme.

Mr. Emor maintains that Core Ventures is a for-profit corporate affiliate of SunRise, that SunRise owns Core Ventures, that the transfers of funds from SunRise to Core Ventures were legitimate business loans, and that these loans were designed to provide start-up funds for a coffee shop and vocational school to be operated by Core Ventures that would earn profits to help fund SunRise in the face of declining revenue from the District of Columbia. See Mr. Emor’s Post-Hearing Sentencing Brief (“Emor Br.”) [Dkt. No. 92] at 12-17. The Court does not find these claims credible. While the record shows that Mr. Emor made similar claims about Core Ventures’ purpose to SunRise’s Board of Directors and to others, the evidence before the Court indicates that Core Ventures is owned exclusively by Mr. Emor, that it has no formal affiliation with SunRise, that the transfers of funds to Core Ventures were not accompanied by any loan documentation, that Core Ventures never engaged in any of the activities it was purportedly formed to carry out, and that the few transactions in which the company did engage were unrelated to those activities and had the effect of personally benefitting Mr. Emor and placing large amounts of money within his exclusive control.

a. Formation and Ownership of Core Ventures

In June 2008 Mr. Emor formed Core Ventures, a for-profit limited liability company, through the online legal services provider LegalZoom. Gov. Exs. 46, 212, 223. Mr. Emor provided all of the information utilized by LegalZoom in its preparation of the incorporation documents. Hr’g Tr. (12/21/11) at 10, 30-31.

An Operating Agreement for Core Ventures introduced by the government lists Charles Emor as the sole initial member of the company. The Operating Agreement states that Mr. Emor provided a $100,000 capital contribution and owns a one hundred percent interest in the company. Gov. Ex. 212. The document also lists only Charles Emor as a signatory. Id. ,

Ryan Clark, a former employee of LegalZoom, testified that he processed Mr. Emor’s service request and took information from Mr. Emor over the phone about Core Ventures on June 6, 2008. Mr. Clark took contemporaneous notes, which were entered into LegalZoom’s computer system. Hr’g Tr. (12/21/11) at 8, 11; Gov. Exs. 45, 212, 223. According to Mr. Clark’s notes, Mr. Emor stated that he was the only contributor to Core Ventures, that he owned one hundred percent of the business, and that he had made a capital contribution of $100,000. In the evidentiary hearing, Mr. Clark explained: “That means that the hundred thousand dollars was coming from the person who was forming the business, which was Charles Emor [and that] he has not allocated the ownership of his company to anyone but himself.” Hr’g Tr. (12/21/11) at 13-14. These notes and Mr. Clark’s explanation of them are consistent with the certified business records subsequently produced by LegalZoom. Gov. Exs. 45, 212, 223. But there is no evidence that any of Mr. Emor’s personal funds were used to capitalize Core Ventures. Gov. Exs. 48-50. Rather, as both parties acknowledge, all Core Ventures’ funds came from SunRise.

In the incorporation documents for Core Ventures, Mr. Emor listed SunRise’s address as Core Ventures’ business location. Hr’g Tr. (9/20/11) at 70-71; Gov. Exs. 46, 212, 223. In addition, records kept with BB & T bank and papers filed with the District of Columbia provided SunRise’s address as that for Core Ventures. Gov. Exs. 44, 48-49. For at least one purpose, however, Mr. Emor used an address on North Capital St. NE, Washington, D.C., as Core Ventures’ address. See Gov. Ex. 67 (automobile insurance paperwork for vehicles titled in Core Ventures’ name). This address was a townhouse owned by SunRise and used by Mr. Emor as his personal residence, and it was Mr. Emor who directed that this address be used. Hr’g Tr. (9/20/11) at 70-71.

The parties in this case have sharply contested who owns Core Ventures. Mr. Emor urges the Court to conclude that SunRise owns Core Ventures. No documentation supports this claim, however, and the evidence before the Court indicates that Mr. Emor is the sole owner of the company. As described above, the Operating Agreement produced for Core by LegalZoom names Mr. Emor as the sole member, owning a one hundred percent interest in the company. Mr. Clark’s database notes indicate that this information was conveyed to him by Mr. Emor himself. An application for reinstatement of LLC status filed by Core Ventures, in January 2010, is signed by Mr. Emor and designates him as the member executing the form. Gov. Ex. 43. None of Core Ventures’ incorporation or other documents, including the Articles of Incorporation filed with the District of Columbia, mentions any other member besides Mr. Emor or refers to SunRise in any manner. Gov. Exs. 42-45, 212, 223. Although the documentary record is slim, it tells a consistent story: that Charles Emor formed Core Ventures and is the sole owner.

In attempting to rebut this conclusion, Mr. Emor offers no documentation to the contrary but instead relies on testimony that ultimately derives entirely from his own representations. To that end, Mr. Emor highlights the testimony of Ms. Negatu, “[t]he only person who testified with actual knowledge of the ownership of Core Ventures.” Emor Br. at 26. Ms. Negatu’s testimony makes abundantly clear, however, that she had no independent knowledge of who owned Core Ventures other than what Mr. Emor told her. When asked by the Court whether she had ever seen any document indicating that SunRise owned Core Ventures, Ms. Negatu testified, “I believe we filled out some document regarding the member of Core Venturefs],” and that “I think SunRise was going to own Core Venture[s],” but she could cite no supporting documents. Hr’g Tr. (9/26/11) at 44, 48. In response to a government subpoena for all documents relating to Core Ventures, SunRise provided only minutes from two Board of Directors meetings (discussed below). Hr’g Tr. (10/5/11 p.m.) at 33-34; Gov. Exs. 19, 193-94. Ms. Negatu’s belief that Core Ventures was owned by SunRise was predicated in part on her understanding that the members of an LLC are like the board of directors of a corporation — rather than individuals with an ownership interest in the company — and that the individuals comprising SunRise’s Board of Directors therefore were members of Core Ventures because they also ran Core Ventures. Hr’g Tr. (9/26/11) at 43-44.

Mr. Emor also points to tax documents prepared for SunRise by Louis Leibowitz, SunRise’s outside accountant, which purportedly imply that Mr. Leibowitz “clearly did not consider Mr. Emor the owner of Sunrise.” Emor Br. at 92 at 28. The Court does not believe that this implication follows from the documents. More important, as discussed below, Mr. Leibowitz also lacked any independent knowledge of who owned Core Ventures, see Hr’g Tr. (10/18/11 p.m.) at 74-75, and he testified before this Court that he has “never been able to determine” the answer to that question. Id at 27. Mr. Emor’s arguments regarding the ownership of Core Ventures amount to little more than sophistry: the record before the Court indicates unequivocally that he, and he alone, owns the company.

b. Transfer of Funds from SunRise to Core Ventures

Beginning in March 2009, in a series of wire transactions, Ms. Negatu, at Mr. Emor’s direction, transferred $2,087,000 from SunRise’s bank accounts to Core Ventures’ bank accounts. Hr’g Tr. (9/20/11) at 17-18; Gov. Exs. 52, 53, 56, 57, 58, 59, 204A. Mr. Emor approved and directed each transaction. Hr’g Tr. (9/20/11) at 18. Indeed, Ms. Negatu testified that it was Mr. Emor who determined that $2 million was the proper amount to transfer to Core Ventures from SunRise, and that he decided the amount of each transfer based on how much “extra” money was available after SunRise’s most recent payments by the District of Columbia. Id at 17-19.

On March 9, 2009, Mr. Emor opened a bank account in the name of Core Ventures at BB & T, account no. xxxxx9526. Mr. Emor was the sole signatory on the account. Hr’g Tr. (9/20/11) at 9; Gov Ex. 48. This Core Ventures account was initially funded by a $100,000 in-branch wire transfer from one of SunRise’s bank accounts. Hr’g Tr. (9/20/11) at 13-14; Gov. Exs. 50, 52.

On May 12 and May 28, 2009, Mr. Emor directed Ms. Negatu to make two more transfers from SunRise’s bank accounts to Core Ventures’ account no. xxxxx9526, totaling $250,000. Gov. Ex. 56.

On July 21, 2009, a second Core Ventures bank account was opened at BB & T Bank, account no. xxxxx3943. Gov. Ex. 49. That same day, Mr. Emor directed Ms. Negatu to become a signatory on both Core Ventures bank accounts. Hr’g Tr. (9/20/11) at 9; Gov. Ex. 49.

Between August and December 2009, Mr. Emor directed Ms. Negatu to make the following transfers of funds from SunRise’s bank account to one of the Core Ventures bank accounts: (a) $400,000 was transferred on August 13, 2009; (b) $600,000 was transferred on August 19, 2009; (c) $600,000 was transferred on November 5, 2009. Gov. Exs. 57, 58, 59.

On January 10, 2010, Mr. Emor caused the last transfer of funds from SunRise to Core Ventures, in the amount of $100,000. Gov. Ex. 59.

In addition to these wire transfers, as explained above, SunRise also transferred the titles of three vehicles from SunRise to Core Ventures: a Mercedes SUV, an Infíniti G35, and a convertible Mini Cooper. Hr’g Tr. (9/20/11) at 54-60, 63-64, 67-70; see Gov. Exs. 61, 66. Core Ventures did not provide any compensation to SunRise for these vehicles. Id.

c. Documentation and Business Formalities Regarding Transfer of Funds from SunRise to Core Ventures

Mr. Emor contends that the monetary transfers from SunRise to Core Ventures were loans for the creation of a business that would earn profits to benefit SunRise. Conspicuously absent from the record is any substantive documentation memorializing these purported loans. In fact, the only documentation regarding the monetary transfers from SunRise to Core Ventures are minutes from two SunRise Board meetings created by Ms. Negatu and financial documents prepared for SunRise by Mr. Leibowitz that characterize the transfers as loans; Mr. Leibowitz testified that he booked the transfers as loans only because Ms. Negatu told him that they were loans — he never saw any supporting documentary evidence. Gov. Exs. 19, 193, 194; Hr’g Tr. (10/18/11 p.m.) at 26-27, 39.

In response to a government subpoena for all documents relating to Core Ventures, SunRise provided only the minutes of the two Board meetings. Hr’g Tr. (10/5/11 p.m.) at 33-34; Gov. Exs. 19, 193, 194. When Ms. Negatu was asked whether she had any documentation of the purported loans other than those Board minutes, she admitted: “No, I don’t have any documentation.” Hr’g Tr. (9/20/11) at 19. As discussed further below, the discussion of Core Ventures at those two meetings exclusively comprised Mr. Emor’s representations to Ms. Negatu and his son about the purpose of the company and the activities in which it would engage. Mr. Emor did not provide the Board with any documentation regarding the costs of the endeavors he proposed or any written loan agreement. Id. The exact terms of the alleged $2 million loan were never discussed by the Board, put in writing, or signed by the alleged parties to the loan. Id. at 42; Hr’g Tr. (10/5/11 p.m.) at 35^41. Mr. Emor failed to provide SunRise with a business plan or other documentation to justify the alleged loan or the amount of the loan. Hr’g Tr. (9/20/11) at 19. Ms. Negatu did not conduct any research related to establishing a vocational school or coffee shop before the government’s seizure of the funds in Core Ventures’ bank accounts. Id. at 19-20; Hr’g Tr. (9/26/11) at 151.

d. Activity of Core Ventures

At the time that the government seized Core Ventures’ funds, the only activity in which the company had engaged was the purchase of two vehicles and the payment of auto insurance premiums.

On May 1, 2009, less than two months after Core Ventures’ first bank account was opened, Mr. Emor directed Ms. Negatu to transfer $37,000 from SunRise’s bank account to Core Ventures’ account, no. xxxxx9526, specifically for the purchase of a 2006 Lexus SUV. Hr’g Tr. (9/20/11) at 24-25; Gov. Exs. 53, 54, 61. According to Ms. Negatu, Mr. Emor was the only individual who drove the Lexus, for “a week or so,” before it was placed in storage, and the vehicle was not used for any school-related purpose. Hr’g Tr. (9/20/11) at 48-49; Hr’g Tr. (9/26/11) at 85-86.

On July 20, 2009, a wire transfer of $7,000 from Core Ventures’ bank account was made for the purchase of a 2001 Isuzu NQR, a four-by-two “box truck.” Hr’g Tr. (9/20/11) at 50-51, 60; Gov. Ex. 55. Although Ms. Negatu testified that “we need that because we do a lot of construction and moving,” her testimony did not make clear whether SunRise actually used the vehicle or whether it was merely a type of vehicle that would have been useful to SunRise. Hr’g Tr. (9/20/11) at 51, 53.

Core Ventures also paid insurance on the vehicles titled in its name. Gov. Exs. 50, 67. In addition, it paid the insurance on a 1999 Lexus owned by SunRise and used by Mr. Emor as his personal vehicle. Gov. Exs. 61, 67; Hr’g Tr. (9/20/11) at 51, 61, 65-66.

e. Purpose of Core Ventures

The primary dispute about Core Ventures centers on whether it was, as contended by Mr. Emor, a legitimate enterprise designed to earn profits for SunRise that the school was precluded from earning itself because of its nonprofit status, or whether it was a device contrived by Mr. Emor to create an extra layer disguising his personal exploitation of SunRise funds and making those funds potentially available to him in the event of his incarceration or deportation. The Court finds that the evidence supports the latter theory.

As described above, Ryan Clark from LegalZoom worked with Mr. Emor to create Core Ventures’ incorporation documents in June 2008. Mr. Clark’s contemporaneous database notes of his conversation with Mr. Emor state that Core Ventures’ purpose was “consulting new businesses on how to set up their biz plans, etc.” Gov. Exs. 45; 212. An unsigned application for an Employer Identification Number for Core Ventures, generated by LegalZoom, lists the same consulting activity as the principal service to be provided by Core Ventures. Gov. Ex. 212.

Some time later in 2008, Mr. Emor and Ms. Negatu had an impromptu discussion with Louis Leibowitz, SunRise’s outside accountant, in which they discussed Core Ventures. Mr. Emor relies heavily on this meeting in support of his narrative about Core Ventures, but it provides scant support for his contentions.

After Mr. Emor and SunRise came under investigation, Mr. Leibowitz was interviewed by IRS agents regarding Mr. Emor, SunRise, and Core Ventures; he later testified before the grand jury investigating Mr. Emor and in the evidentiary hearing before this Court. Before the grand jury, Mr. Leibowitz stated that at some point in 2008 he had an impromptu meeting with Mr. Emor and Ms. Negatu (after dropping off some financial documents at SunRise) in which they discussed Core Ventures. Mr. Leibowitz could not recall exactly when this meeting took place, although he thought it was “just a couple of months maybe after [Core Ventures] started.” Gov. Ex. 219 at 28. At the meeting, Mr. Leibowitz told the grand jury, Mr. Emor informed him that Core Ventures would be a for-profit company that “will provide services to the school.” Id. at 29. Specifically, Mr. Leibowitz testified that he was told: “They would provide books and educational equipment and transport — they would buy vehicles for transport equipment.” These vehicles would be used to transport “[t]he children to various programs and things.” Id.. Mr. Leibowitz was asked before the grand jury: “Were you ever told that Core Ventures was going to be opening coffee shops or smoothie, shops?” He responded: “No. I was never told that.... [Later] I saw something about that on the website, but I was never told about it.” Id. at 51.

At the evidentiary hearing before this Court, Mr. Leibowitz testified that some time in 2008 he was part of a conversation in which Mr. Emor and Ms Negatu “discussed the aims of Core Ventures, and ... threw out a lot of projects that they intended like a coffee shop and talking, about other things, maybe buying fruit juices from Sweden and various other things. I think they mentioned they could be buying a transport bus, but these were also thrown out.” Hr’g Tr. (10/18/11 a.m.) at 33. During cross-examination, Mr. Leibowitz was again asked what he was told about the purpose of Core Ventures, and he answered: “Open a coffee shop, buy food from Sweden, fruit juice from Sweden, buy equipment for the school, service — services for the school, I’m not sure.” Hr’g Tr. (10/18/11 p.m.) at 42-43. Mr. Leibowitz was then confronted with his grand jury testimony, in which he had' stated that the purpose of Core Ventures was to provide educational equipment and transport, and in which he expressly disclaimed that anyone had told him Core Ventures would be opening a coffee shop or smoothie shop. When asked to explain the discrepancy, Mr. Leibowitz stated: “I thought the coffee shop came up [in the meeting], but I may be wrong. I don’t know.” Id. at 44. He also acknowledged that his recollection of the meeting was better when he testified before the grand jury, nearly a year earlier. Id.

Mr. Leibowitz’s vague recollection of his 2008 impromptu meeting with Mr. Emor and Ms. Negatu does not help Mr. Emor establish the truth of his assertions about the intended purpose of Core Ventures. First, the discrepancies between Mr. Leibowitz’s grand jury testimony and his testimony before this Court amply demonstrate that he simply does not recall the meeting in great detail. The evidence suggests that during this meeting Mr. Emor informed Mr. Leibowitz about Core Ventures, which he had already incorporated, and “threw out” a variety of vague plans for the company that did not include operating a coffee shop. Contrary to Mr. Emor’s assertion in his post-hearing brief, Mr. Leibowitz did not testify that he advised Mr. Emor at this meeting that “formation of a separate, for-profit company ... was necessary because Sunrise, as a tax exempt, nonprofit, ‘could not operate a for profit business.’ ” Emor Br. at 25 (quoting Hr’g Tr. (10/18/11 a.m.) at 33-34). Rather, Mr. Leibowitz testified that he was presented with the idea of Core Ventures as a for-profit entity by Mr. Emor, at a meeting that took place after Mr. Emor had already formed Core Ventures. Hr’g Tr. (10/18/11 a.m.) at 33-34; Hr’g Tr. (10/18/11 p.m.) at 24. The extent to which Mr. Emor seeks to wrench significance from this single unplanned meeting is an indication of just how thin the evidence is supporting his narrative about Core Ventures.

In support of his version of events, Mr. Emor also relies on the minutes of two SunRise Board meetings and the testimony of Ms. Negatu. Mr. Emor first discussed Core Ventures with the SunRise Board on February 25, 2009. At that time, the Board consisted of Mr. Emor, Ms. Negatu, and Mr. Anuforah ' (Mr. Emor’s son). According to Ms. Negatu, at this meeting Mr. Emor explained the idea behind Core Ventures and requested a loan from SunRise to the new company in order to fund the development of a coffee shop or vocational school. Hr’g Tr. (9/20/11) at 16, 40-43. Handwritten Board minutes taken by Ms. Negatu at this meeting state: “Emor introduced Core Venture and how [illegible] to have incorporated for more income to come to SunRise Academy. Core Ventures can have deli coffee shop, vocational school, internet café. Residential Program in the future. SRA [illegible] Core money for year. [Illegible] paid for the 100K.” Gov. Ex. 193; Hr’g Tr. (9/20/11) at 41-42.

Hand-written minutes for a Board meeting on August 27, 2009, also prepared by Ms. Negatu, refer to “the idea of Core Ventures providing services to SunRise if Core Ventures will charge SunRise for service provide”, and state: “When the coffee shop open Core will hire SRA students to work[.]” Gov. Ex. 194. The typed minutes for that meeting include as an agenda item “Engage in Business/Contract with Core Ventures” and resolve that “SunRise Academy will engage in a business contract with Core Ventures effective September 1st, 2009.” Gov. Ex. 19.

At the evidentiary hearing, Ms. Negatu testified to her belief that Core Ventures was created and funded for the purposes described in these Board minutes. But her testimony and the Board minutes are of little help to Mr. Emor, because both derive entirely from Mr. Emor’s own representations to Ms. Negatu and to his son. Mr. Emor formed Core Ventures in 2008, a year in which SunRise did not hold any Board meetings and before Ms. Negatu and Mr. Anuforah had joined the Board. Gov. Ex. 18; Def. Ex. 3. Ms. Negatu had no knowledge of Core Ventures independent of what Mr. Emor told her, and she could identify no documentation regarding the ownership of Core Ventures or the “loans” it received from SunRise.

Mr. Emor also cites tax returns and financial statements prepared for SunRise by Mr. Leibowitz that designate the transfers to Core Ventures as loans. This evidence is unavailing because it similarly rests entirely on Mr. Emor’s own representations about Core Ventures. The records created by Mr. Leibowitz, like his testimony about the 2008 meeting, simply cannot bear the weight that Mr. Emor places upon them. Mr. Leibowitz was not a SunRise employee, nor did he conduct audits of SunRise. Hr’g T