UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY UNITED STATES OF AMERICA v. Hon. Kevin McNulty Crim. No. 15-576 KEILA RAVELO SENTENCING MEMORANDUM OF THE UNITED STATES CRAIG CARPENITO United States Attorney 970 Broad Street Newark, New Jersey 07102 (973) 645-2700 On the Memorandum: Andrew Kogan Brian Urbano Assistant U.S. Attorneys TABLE OF CONTENTS PRELIMINARY STATEMENT ............................................................................ 1 I. Factual Background ............................................................................ 2 A. Ravelo and Feliz Begin Their Conspiracy to Scam Ravelo's Firms and Client out of Millions ........................................................................... 2 B. Ravelo Moves to Law Firm 2 and Alternative Litigation Solutions LLC is Formed ................................................................................................ 4 C. Ravelo Singlehandedly Keeps the Conspiracy Going ............................. 5 D. Ravelo Implements an End Run to Obtain Even More Money from Law Firm 2 and Client- I ............................................................................. 7 E. Ravelo and Feliz Live the Good Life - and Don't Even Pay Taxes on It ... 9 F. The Wide Ranging Impact of Ravelo's Conduct ................................... 11 II. Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Step 1. A. Ravelo was a Manager and Supervisor ............................................... 16 Step 2. Step 3. A. B. The Advisory Guideline Range Is 87 to 108 Months' Imprisonment ............................................................................. 14 No Guidelines Departure Is Warranted ....................................... 20 The Only Warranted Variance is That Which Brings the Court's Sentence Into the Range Stipulated By the Parties ............................................................ 20 The § 3553(a) Factors Support a Sentence at the Top of the Stipulated Range ............................................................... 20 1. Seriousness of the Offense .......................................................... 24 2. History and Characteristics of the Defendant .............................. 27 3. General and Specific Deterrence ................................................. 29 4. Need to Avoid Unwarranted Sentencing Disparities ..................... 30 5. Additional Factors ...................................................................... 33 The Court Should Explain the Reasons for its Sentence ..................... 33 CONCLUSION ............................................................................................... 35 PRELIMINARY STATEMENT Defendant Keila Ravelo engaged in a multi-year, multi-act, multi-victim conspiracy to defraud her fellow law firm partners, the law firms where she worked ("Law Firm l" and "Law Firm 2"), and her client ("Client-I"). Through repeated, calculated, illegal actions, Ravelo and her husband Melvin Feliz ("Feliz") stole approximately $8,000,000. Ravelo and Feliz then decided to keep all of their illicit gains by intentionally failing to pay one cent of truces on their illegally obtained windfall. Even more striking than the size, duration, and nature of Ravelo's crimes are the lengths to which Ravelo went to further the wire fraud conspiracy. When Ravelo's crime was almost detected by Law Firm 2, Ravelo engaged in a complex series of manipulations to deceive Law Firm 2, and make sure that her criminal activity continued unfettered. As set forth below, a sentence including 72 months' imprisonment, the top of the parties' agreed-upon sentencing range, is warranted. Such a sentence is below the applicable advisory sentencing Guidelines range and is supported by a consideration of the relevant Section 3553(a) factors, including the nature and circumstances of Ravelo's offense, the need for deterrence (general and specific), Ravelo's characteristics, the need to avoid unwarranted sentencing disparities, and the need to promote respect for the law and to provide just punishment. I. Factual Background Ravelo pied guilty to a wire fraud conspiracy that began in 2008 and continued through 2014. The conspiracy involved dishonest emails, fake vendors, fraudulent invoices, and a cover-up. The scheme led to losses of approximately $8,000,000. Ravelo and Feliz then compounded the effects of their actions by not paying taxes on any of their ill-gotten gains. By doing so, Ravelo and Feliz evaded paying more than $2,000,000 in taxes. A. Ravelo and Feliz Begin Their Conspiracy to Scam Ravelo's Firms and Client out of Millions The wire fraud conspiracy began at least as early as 2008. Indictment, Crim. No. 15-576, Count One. At that time, Ravelo was a partner at Law Firm I, an international law firm. Presentence Report ("PSR"), 'Il'Il 17-18. Ravelo's "core" responsibility at Law Firm 1 was representing Client- I in a class action lawsuit ("the Interchange Fee Litigation"). See PSR, 'Il'Il 21, 104. In or about January 2008, Feliz formed Elit Litigation Solutions, LLC ("Elit"). PSR, 'Il 23. To establish this shell company, Feliz flew Redacted ("Individual-I") to Nevada. PSR, 'Il 38. While there, and at Feliz's instruction, Individual- I opened a bank account for Elit and provided signed blank checks to Feliz. PSR, 'Il 39. Ravelo then fraudulently caused Law Firm I to hire Elit, purportedly to provide vendor services. On or about January 9, 2008, Ravelo wrote an email to fellow colleagues at Law Firm 1: "Elite [sic] Litigation Solutions was 2 recommended to me by a colleague in San Francisco to support this project at a ve:ry reasonable cost, and I have a call later to follow up." In reality, there was neither a colleague in San Francisco who recommended Elit nor a follow-up call. More tellingly, Ravelo's deceptive email came after Ravelo and Feliz had already caused Elit to submit invoices for approximately $225,000 for work allegedly performed, but before Law Firm 1 paid those invoices. PSR, CJ[ 104. As a result, between January 25, 2008 and December 2, 2010, Law Firm 1 made approximately 21 payments to Elit based on the submission of fraudulent invoices. PSR, CJ[ 31. These dishonest invoices billed Law Firm 1 for services for Client-I that were never rendered. Ravelo, acting as a trusted partner, approved payments to Elit. Id. Through the submission of fraudulent invoices, Ravelo and Feliz conned Law Firm 1 and ultimately Client 1 out of approximately $2,918,155. Id. Despite billing for and being paid millions of dollars by Law Firm 1, Elit actually provided no work whatsoever to Law Firm 1. Ravelo's partners and associates, including those who worked closely on the Interchange Fee Litigation with Ravelo at Law Firm 1: "expected to review vendor work product and to have been involved in the outsourcing of vendors; however they were not involved in the hiring of Elit or ALS 1 as vendors. Additionally, they did not 1 As explained more fully below, "ALS" stands for "Alternative Litigation Solutions, LLC" and is a second shell company Ravelo and Feliz formed in furtherance of the wire fraud conspiracy. 3 review any work product generated by Elit or ALS in connection with work they performed on behalf of Client-I." PSR, qr 47. Further, a review of communications revealed only a small handful of communications involving Elit - communications that did not show or include actual work product. In stark contrast, Law Firm 1 possessed hundreds of electronic communications, correspondences, and work product where legitimate vendors performed actual services for Law Firm 1. PSR, qr 104. B. Ravelo Moves to Law Firm 2 and Alternative Litigation Solutions LLC in Formed Ravelo left Law Firm 1 and joined Law Firm 2 as a partner in October 2010. 2 In April 2011, Ravelo and Feliz formed ALS. PSR, qrqr 24 and 32. Specifically, an individual ("Individual-2") has stated, in substance and in part, that: (a) Ravelo caused ALS to be incorporated in April 2011; (b) Individual-2 opened bank accounts for ALS; and (c) at Ravelo's instruction, Individual-2 gave blank signed checks for the ALS bank account to Ravelo. PSR, qr 42. Individual-2 further stated that Ravelo ordered Individual-2 to transfer money from the ALS bank account for the benefit of Ravelo and Feliz. Id. There was no need to form a second company to supposedly do the same vendor work for Law Firm 2 and Client 1. The obvious reason why Ravelo and Feliz created ALS was to avoid detection by spreading the millions of dollars in 2 Law Firm 2 is an international law firm with its headquarters in New York, NewYork. PSR, qr 17 4 fraudulent invoices between two companies instead of only one. C. Ravelo Singlehandedly Keeps the Conspiracy Going In or about July 2012, Ravelo and Feliz submitted ALS invoices to Law Firm 2 that sought significantly larger payments than Law Finn 2 had previously approved. Consequently, Redacte d Redacted Law Finn 2 questioned Ravelo about the legitimacy of ALS and the invoices. In response, Ravelo led the charge to conceal and maintain the conspiracy. First, Ravelo personally and directly tried to make ALS appear as a legitimate company. To this end, Ravelo sent text messages to an individual ("Individual3") wherein she instructed Individual-3 to turn the substance of the texts messages into a fraudulent e-mail that was to be then sent to Law Firm 2 R Reda . cted Ravelo further directed that the fraudulent McCollum ("Rob McCollum"), the supposed head e d email be addressed from aRob ct of ALS. PSR, CJ[ 52. This e-mail e d sought to legitimize ALS and support its invoices. In short, Ravelo posed as the head of ALS and lied to her law firm and each of her partners in order to cover up and extend the conspiracy. Second, Ravelo used people over whom she had influence to help hide her illegal activity. In fact, Ravelo caused an associate at Law Firm 2 - an employee whose professional life Ravelo essentially controlled - to submit a summary chart detailing alleged ALS work product to Law Firm 2's CJ[ Reda . cted PSR, 54. The chart and accompanying e-mail made it appear to Law Firm 2 that the associate had first-hand knowledge of ALS's work product. The associate, 5 though, had no personal knowledge of any ALS work product to support the summary chart. Id. Third, Ravelo dangled the carrot of potential work with Law Finn 2 and the large amount of money that would come with it to keep the conspiracy going and the money flowing to her and her husband's bank account. In or about July 2012, Ravelo contacted Individual-4, a a friend and former colleague who worked in the litigation support field, and asked lndividual-4 to vouch for the credibility of ALS and Rob McCollum. PSR CJ[