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United States District Court, S.D. New York

June 7, 2005.


The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge


Defendant Todd Eberhard ("Eberhard") appeared in this Court on September 14, 2004, and pled guilty to eleven counts of a twelve-count indictment against him: one count of conspiracy to commit investment advisor fraud, wire fraud and mail fraud in violation of 18 U.S.C. § 371; seven counts of investment advisor fraud in violation of 15 U.S.C. §§ 80b-6, 80b-17; one count of wire fraud in violation of 18 U.S.C. §§ 1343, 1346; one count of mail fraud in violation of 18 U.S.C. §§ 1341, 1346; and one count of obstruction of justice in violation of 18 U.S.C. § 1512(c). Eberhard will be sentenced to 151 months of imprisonment to be followed by three years of supervised release. A fine in the amount of $15,000 is ordered, and restitution in an amount to be determined within 90 days of the imposition of this sentence is mandated. A special assessment fee of $1,100 is mandatory and is due immediately. Prior Proceedings

On February 4, 2003, the government filed a complaint against Eberhard, and an arrest warrant was issued on that day. Eberhard was arrested the same day and subsequently released, after posting a personal recognizance bond subject to specific court-ordered pretrial supervision conditions pending trial.

  Explicit conditions of Eberhard's release prohibited Eberhard from having any contact with his former clients except through counsel and required him to comply with all orders entered by the Honorable Richard M. Berman of this district, who has been presiding over a parallel civil `proceeding initiated by the Securities and Exchange Commission (hereinafter, the "S.E.C.") against Eberhard. The government moved to revoke Eberhard's bail at a bail hearing before this Court on June 16, 2003, citing Eberhard's violation of these two conditions of his pretrial supervision. The Court declined to revoke Eberhard's bail, instead opting to modify his pretrial supervision conditions to include home detention with electronic monitoring. Subsequently, on September 23, 2003, the Court removed the conditions of home detention with electronic monitoring and has not made any further amends to Eberhard's pretrial supervision conditions thereafter. On September 14, 2004, Eberhard appeared before this Court and pleaded guilty in accordance with the terms of a plea agreement reached with the government. He currently is scheduled to be sentenced in this Court on June 7, 2005.

  The Sentencing Framework

  In accordance with the Supreme Court's decision in United States v. Booker, 125 S. Ct. 738 (2005), and the Second Circuit's decision in United States v. Crosby, 397 F.3d 103 (2d Cir. 2005), the sentence to be imposed was reached through consideration of all of the factors identified in 18 U.S.C. § 3553 (a), including the advisory Sentencing Guidelines (the "Guidelines") established by the United States Sentencing Commission. Thus, the sentence to be imposed here is the result of a consideration of:

(1) the nature and circumstances of the offense and the history and characteristics of the defendant;
(2) the need for the sentence imposed —
(A) to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense;
(B) to afford adequate deterrence to criminal conduct;
(C) to protect the public from further crimes of the defendant; and
(D) to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner; (3) the kinds of sentences available;
(4) the kinds of sentence and the sentencing range established for —
(A) the applicable category of offense committed by the applicable category of defendant as set forth in the guidelines . . .;
(5) any pertinent policy statement . . . [issued by the Sentencing Commission];
(6) the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and
(7) the need to provide restitution to any victims of the offense.
18 U.S.C. § 3553(a). A sentencing judge is permitted to find all the facts appropriate for determining a sentence, whether that sentence is a so-called Guidelines sentence or not. See Crosby, 397 F.3d at 114-15.

  The Defendant

  Eberhard was born on April 2, 1964, the younger of two children. He reports an enjoyable childhood and close relationships with his strict but loving and hard-working parents.

  Currently, his mother lives in Millbrook, New York, and his sister lives in Mexico City, Mexico. He claims a close relationship with both. His father passed away after a bout with cancer in 1979, when the defendant was fourteen years old. Although the defendant was enrolled in a boarding school during his father's illness, he returned home to help care for his father and support his mother in his father's last days. After his father's death, the family business declared bankruptcy and Eberhard's family struggled through difficult economic times. Thereafter Eberhard assumed greater financial responsibility for his family, attempting to earn money wherever possible.

  The defendant graduated from Skidmore College in 1986 with a business administration degree and since has been employed in the securities business. In 1989, he started Eberhard Investment Association, based in New York City, and in 1999, he opened Park South Securities with offices in New Jersey, Texas and Florida. Eberhard was operating these businesses at the time of his arrest in 2003.

  Eberhard married in September 1998 and has fathered one child with his wife. He had been living with his wife and child in New York City until recently, when he and his wife moved to separate residences due to marital strife. Eberhard's son currently lives with his mother.

  Eberhard is in good health and claims no use of controlled substances or alcohol. He has been under the care of a mental health professional for approximately two years but does not take any prescribed medications.

  The defendant reports no assets, as all have been liquidated already or are in the process of being liquidated at this time. All of Eberhard's bank accounts, securities holdings and other assets, including real estate, have been seized as a result of his conviction in the instant offense. His corporate assets also have been frozen.

  Eberhard has no prior criminal convictions.

  The offense Conduct

  The investigation of the instant offense was initiated upon several complaints received by the NASD, NASDAC's regulations enforcement agency, regarding the brokerage practices of Eberhard. Eberhard purported to be in the business of providing investment advice to, and managing the funds of, individual investors. He held Series 7, 24, 63 and 65 licenses with NASD, and, at various times relevant to this Indictment, was registered with NASD as a general securities principal and representative.

  Eberhard Investment Associates and its predecessor entity, Eberhard Investment Advisers (collectively "EIA"), were entities incorporated and located in the State of New York through which Eberhard rendered investment advice for the trading of securities and general advice regarding investment strategies and financial planning for his clients. At all times relevant to this Indictment, Eberhard was the president of EIA.

  Because EIA was not a securities broker-dealer, it entered into relationships with securities broker-dealers to enable EIA to place securities transactions and otherwise manage the funds clients entrusted to it. The securities broker-dealers with which EIA was affiliated included the following:

a) From 1993 through 1998, EIA maintained relationships with the following entities, in succession, all of which were securities broker-dealers registered with the S.E.C. and members of the NASD: (1) Nathan & Lewis Securities Inc. (Nathan & Lewis), located in New York, NY; (2) Linsco/Private Ledger (LPL), located in San Diego, CA; and (3) Royal Alliance Associates, Inc. (Royal Alliance), located in New York, NY. Eberhard was registered as a general securities representative employed by Nathan & Lewis and LPL, and as both a general securities representative and general securities principal employed by Royal Alliance. Because of his excessive and improper trading activity, Nathan & Lewis, LPL and Royal Alliance each terminated its relationship with EIA and Eberhard.
b) From November 1998 through December 2001, EIA used the brokerage services of Clearing Services of America, Inc. (CSA), a securities broker-dealer registered with the S.E.C. and a member of NASD. Eberhard was registered both as a general securities principal and a general securities representative employed by CSA.
  Park South Securities, LLC (Park South) was a limited liability company organized under the laws of the State of New York with several places of business, including one in Manhattan. Park South was registered with the S.E.C. as an investment adviser and a securities broker-dealer. From July 1999 through at least February 2003, Eberhard was Chairman of the Board and part owner of Park South. In late 2001, Eberhard caused his clients' accounts to be transferred from CSA to Park South. Park South used the clearing services of Correspondent Services Corporation ("CSC"), an entity owned and controlled by UBS Paine Webber and located in Weehawken, New Jersey. CSC, in its capacity as Park South's clearing broker, provided a number of services for Park South clients, including the issuance of monthly account statements.

  From at least 1993, through May 2003, Eberhard and others engaged in a scheme to defraud certain clients for whom he provided investment advisory and securities brokerage services. As part of the scheme, Eberhard misappropriated funds entrusted to him by his clients through a variety of means, including "churning" their accounts to generate millions of dollars in commissions and compensation for himself and his firms, and by making unauthorized and improper withdrawals and transfers from client accounts.

  As commonly understood in the securities industry, the term churning refers to a pattern of excessive and unsuitable trading conducted by a broker with discretion over a client's account, or caused by a broker's bad faith recommendations to a client for the purpose of generating commissions for the broker. Typically, the more trades Eberhard conducted, the higher the commissions were that he received. Between November 1998 and December 2001, for example, Eberhard earned an average of approximately $400,000 per month in commissions from the combined trading in his clients' accounts.

  From at least 1993 through February 5, 2003, Eberhard exercised investment discretion over various client accounts. On behalf of these clients, he bought and sold securities, including shares of mutual funds. In some instances, the clients knowingly provided him with discretionary authority, permitting him to purchase and sell securities in their accounts without prior approval of the client. In a number of instances, however, Eberhard improperly exercised discretion over client funds by forging client signatures on forms granting him such discretion. In other cases, Eberhard simply exercised discretion over accounts without the appropriate authority, or appearance of authority, to do so. He exercised discretion over client accounts notwithstanding that such discretionary accounts were not permitted by the rules of certain broker-dealers with which EIA was affiliated, including CSA.

  Eberhard engaged in churning which caused him to earn excessive commissions, fees and other compensation, and caused substantial losses in his clients' accounts. He conducted his most excessive churning in client accounts with the most funds; however, even accounts with relatively low balances were churned. He churned not only personal investment accounts but also trust accounts and Individual Retirement Accounts. Over time, as his client base grew, and as his financial obligations grew, including his obligations to repay clients in whose accounts he had engaged in fraudulent activity, Eberhard's churning became more extensive.

  Eberhard maximized the benefit he personally received from churning his clients' accounts by inappropriately buying and selling Class B Shares of mutual funds. Class B Shares typically carry high "back-end loads," i.e., the owner is required to pay a substantial fee, which determines, in part, the broker's commission, upon the sale of the mutual fund. These back-end loads, which can be as high as seven percent of the value of the investment, typically decline over time. Consequently, investments in Class B Shares are designed for long-term investment strategies, such as retirement accounts. Because of the high transaction costs associated with their premature sale, Class B Shares are generally viewed within the securities industry as an unsuitable vehicle for active trading. Eberhard frequently engaged in short-term transactions in Class B Shares of mutual funds on behalf of his clients, which, as he well knew, were intended solely to earn commissions for himself to the detriment of his clients, and were in violation of his fiduciary duties to his clients. In addition to depleting client accounts through churning, Eberhard and others misappropriated money directly from client accounts by transferring funds from the account of one client to the account of another, or from client accounts to accounts in which Eberhard had a beneficial interest. He made and directed these transfers and withdrawals without the authorization of his clients, knowing that he did not have authorization to do so, and in violation of his fiduciary duties to his clients.

  Eberhard employed several other persons at EIA, some of whom were aware of and, at his direction, participated in and knowingly took steps to further his fraudulent scheme. Among the acts that Eberhard directed these employees to perform were: (1) making unauthorized journals of funds from one client's account to the account of an unrelated client; (2) making unauthorized wire transfers from client accounts; (3) distributing false or doctored account statements; (4) negotiating settlement agreements with clients requiring the clients to forego filing claims with NASD; and (5) forging client signatures, including on letters causing the issuance of checks from client accounts.

  In order to ensure these EIA employees' continued participation in the fraudulent activity, and to obtain their tacit agreement not to report his fraudulent conduct, Eberhard paid exorbitant salaries to employees that were far above market rate for the services provided. For example, one co-conspirator not named as a defendant herein, who by 2001 was a part-time EIA employee, was responsible for processing trades made by Eberhard, such as calling trades into EIA's broker-dealer and maintaining records of such transactions in EIA's files. As of November 2001, that co-conspirator's annual salary was approximately $180,000, not including the large cash bonuses also typically awarded by Eberhard.

  Certain clients discovered Eberhard's fraudulent conduct and confronted him. In several instances, Eberhard entered into agreements in which he paid clients sums of money to compensate them for losses he caused. However, in order to conceal his fraudulent conduct from law enforcement as well as other clients, he required that clients who accepted settlement payments agree to refrain from notifying the authorities of his conduct or to otherwise publicize the fact that a settlement had been made.

  From 1999 through 2003, Eberhard entered into agreements to make payments totaling in excess of approximately $4.5 million to clients. These payments were made via lump sums or, more typically, in monthly installments. Many of these payments were made with funds misappropriated from other client accounts.

  Eberhard knew he was required to report these settlements to NASD. However, he purposely failed to make the required notification in order to conceal his fraudulent conduct from both securities regulatory and law enforcement authorities, as well as from his other clients who had not yet discovered his fraudulent activity.

  He also used misappropriated investor funds to pay Jeff Zisselman, a former EIA employee and co-conspirator, who had threatened to disclose his criminal activities to law enforcement authorities and his marital infidelities to his wife.

  Eberhard and others made numerous materially false statements and misrepresentations to clients designed to: (a) persuade clients to entrust and continue to entrust funds to Eberhard for management; (b) hide his churning and looting of their accounts; (c) prevent clients from withdrawing funds and/or terminating their investment advisory relationships with him; and (d) prevent clients from pursuing civil remedies for their losses, reporting his conduct to authorities or otherwise publicizing his fraudulent activity.

  Eberhard's materially false statements and misrepresentations primarily took the following forms: (1) oral and written statements designed to conceal the depletion of funds within client accounts and the true reason for such depletion; (2) creation and issuance of fraudulent account statements which reflected inflated balances; and (3) preventing accurate account statements prepared by independent securities broker-dealers which revealed Eberhard's fraudulent activity from being sent to clients.

  In addition to making oral and written misrepresentations regarding genuine account statements issued by independent securities broker-dealers, Eberhard and others also defrauded investors by creating and providing to clients fraudulent account statements reflecting artificially high account balances. He and his co-conspirators utilized two principal types of false account statements: (1) fabricated statements issued directly by EIA and (2) statements generated by the clearing broker or other financial institution which were subsequently altered by Eberhard and others acting at his direction.

  Another means by which Eberhard concealed his fraudulent activity was acting without authorization from his clients, and in breach of his fiduciary duties to them, in order to change the clients' addresses of record at the broker-dealer which issued account statements so that the clients simply would not receive account statements during periods in which Eberhard looted their accounts. Specifically, Eberhard, and EIA employees acting at his direction, changed the address of record from the client's address to the address of Eberhard's residence, or to the residence of another EIA employee, without the client's knowledge or authorization. In at least one instance, when questioned by the client about why the client had not received account statements, Eberhard lied to the client and falsely represented that no statements had been issued during that period. In truth, account statements had been issued and had been sent to Eberhard's residence rather than to the client's.

  In February 2003, the S.E.C. sued Eberhard and his affiliated entities and obtained a temporary restraining order. In connection with the S.E.C.'s action, the Honorable Richard M. Berman of this district ordered that Eberhard provide a list of all assets belonging to him and his affiliated entities, and that all such assets be frozen so that they could be preserved for later distribution to victims of his fraud (hereinafter, the "Freeze Order").

  In order to provide an innocent explanation for his theft of funds from certain victims, to obstruct the S.E.C.'s investigation and action against him, and to obtain access to funds that otherwise should have been subject to the Freeze Order, Eberhard created and submitted fraudulent documentation to the S.E.C.

  Specifically, in April 2003, Eberhard created a document which purported to transfer his interest in certain real property located in Atlanta, Georgia (hereinafter, the "Atlanta Property") to certain clients as well as to his sister. The document also expressly provided that any income derived from the Atlanta Property could be used "by Todd Eberhard at his sole discretion for any need or desire." According to the document, the transfer of the Atlanta Property became effective on April 2, 2000, and the document purported to be executed and notarized on the same day.

  Eberhard, his mother and the clients, all of whom had purportedly signed the document on April 2, 2000, created the document in 2003, and falsely represented that the document had been executed and signed in 2000. Indeed, the individual who purportedly notarized the document is in fact related to Eberhard, although they do not share the same last name.

  Based on the information noted above, the U.S. Postal Inspection Service was notified. The postal inspector found probable cause to execute search warrants at three separate offices that were operated by Eberhard under Park South Securities. The locations of the offices were: 5 East 59th Street, New York, NY; 425 Broad Hollow Road, Melville, NY; and 120 Wood Avenue South, Suite 406, Iselin, NJ. Seized during these searches were various documents, including computer files, hard discs, client lists and files, investment brochures, marketing materials and copies of correspondence sent to or received from clients. Also recovered were bank account statements, brokerage account statements, transaction records, cash receipt journals, copies of checks received by clients, notes, ledgers and other documents relating to the movement of funds. As a result of the investigation, Eberhard was arrested on February 4, 2003. The Relevant Statutory Provisions

  The statutory maximum term of imprisonment for Counts 1 through 8 of the Indictment is five years, and the statutory maximum term of imprisonment for Counts 11, 12, and 16 is twenty years, pursuant to 18 U.S.C. §§ 371, 1343, 1341, 1512(c) and 15 U.S.C. §§ 80b-6, 80b-17. If a term of imprisonment is imposed, the Court subsequently may impose a term of supervised release of not more than three years pursuant to 18 U.S.C. § 3583(b)(2). Such terms of supervised release run concurrently, pursuant to 18 U.S.C. § 3624(e).

  Eberhard is eligible for not less than one nor more than five years of probation, pursuant to 18 U.S.C. § 3561(c)(1), with a fine, restitution, or community service imposed as a mandatory condition of such probation, pursuant to 18 U.S.C. § 3563(a)(2).

  For Counts 1 through 8, 11 and 12, the statutory maximum fine is $40 million, pursuant to 18 U.S.C. § 3571(d). The maximum fine for Count 16 is $250,000, pursuant to 18 U.S.C. § 3571(b)(3). A special assessment of $1,100 is required. See 18 U.S.C. § 3013.

  Full restitution to the victims of Eberhard's fraudulent activities is required under 18 U.S.C. §§ 3663(A), 3664. The Guidelines

  The November 1, 2002 edition of the United States Sentencing Commission, Guidelines Manual ("U.S.S.G.") has been used in this case for calculation purposes, in accordance with U.S.S.G. § 1B1.11(b)(1).

  Counts 1 through 8, and Counts 11, and 12, are grouped pursuant to § 3D1.2(d) because the offense level for these counts is determined largely by the amount of loss involved. Count 16, which charges Obstruction of Justice, is grouped with the aforementioned counts pursuant to § 3D1.2(c), because Eberhard obstructed the investigation of the underlying offenses of which he has been convicted.

  The guideline for a violation of 18 U.S.C § 371 is found in U.S.S.G. § 2X1.1, the section that refers to the guideline applicable to the underlying offense. The underlying offenses of Wire Fraud, Mail Fraud, and Investment Adviser Fraud, are all covered by U.S.S.G. § 2B1.1, which provides for a base offense level of six. Eberhard caused a loss of at least $7 million but less than $20 million. As a result, a 20-level enhancement is applicable pursuant to U.S.S.G. § 2B1.1(b)(1)(K).*fn1

  The offense committed by Eberhard involved at least 20 victims. As a result, a two-level increase is applicable, pursuant to U.S.S.G. § 2B1.1(b)(A).

  Eberhard was the organizer and leader of the conspiracy. By virtue of Eberhard's founding and ownership of his companies, EIA and Park South Securities, he is viewed as the leader and/or organizer of this fraudulent scheme, as he masterminded, orchestrated, carried out, and directed his employees to commit acts in furtherance of the fraudulent scheme. Pursuant to U.S.S.G. § 3B1.1(a), the offense is increased four levels.

  In using his position as broker and investment advisor to commit the aforementioned crimes, Eberhard abused his position of trust by exploiting his position of expertise to take his clients' funds and use them for his personal benefit. Pursuant to U.S.S.G. § 3B1.3, a two-level increase is applied. Eberhard obstructed justice by submitting false documents regarding ownership of real estate during the S.E.C. investigation. As a result, a two-level enhancement is applicable, pursuant to U.S.S.G. § 3C1.1.

  Based on the defendant's plea allocution, Eberhard has shown recognition of responsibility for the offense. Pursuant to U.S.S.G. § 3E1.1(a), the offense is reduced two levels. Because he failed to give timely notice of his intention to enter a plea of guilty, did not permit the government to avoid preparing for trial, and did not permit the Court to allocate its resources efficiently, no additional reduction is warranted pursuant to U.S.S.G. § 3E1.1(b).

  The adjusted offense level resulting from the foregoing calculations and discussion is 34.

  Based on the offense level of 34 and a Criminal History Category of I, the guideline range for imprisonment is 151 to 188 months.*fn2 The authorized term for supervised release under the guidelines is at least two years but not more than three years, pursuant to U.S.S.G. § 5D1.2(a)(2). Supervised release is required if the Court imposes a term of imprisonment of more than one year or when required by statute, pursuant to U.S.S.G. § 5D1.1(a).

  Eberhard is not eligible for probation because the applicable guideline range is in Zone D of the Sentencing Table, pursuant to U.S.S.G. § 5B1.1(b)(2), comment. n. 2.

  The fine range for the instant offense under the guidelines is from $17,500 to $40 million, pursuant to U.S.S.G. §§ 5E1.2(c)(3)(A) and 5E1.2(c)(4).

  Subject to Eberhard's ability to pay, the expected costs to the government of any imprisonment, probation, or supervised release shall be considered in imposing a fine, pursuant to U.S.S.G. § 5E1.2(d)(7). The most recent advisory from the Administrative Office of the United States Courts suggests a monthly cost of $1,933.80 to be used for imprisonment, a monthly cost of $287.73 for supervision, and a monthly cost of $1,675.23 for community confinement.

  Pursuant to U.S.S.G. § 5E1.1(a)(1), in the case of an identifiable victim, restitution shall be ordered for the full amount of the victim's loss if such order is authorized under 18 U.S.C. § 3663A.

  The Remaining Factors of 18 U.S.C. § 3553(a)

  Having engaged in the Guideline analysis, this Court also gives due consideration to the remaining factors identified in 18 U.S.C. § 3553(a) in order to impose a sentence "sufficient, but not greater than necessary" as is required in accordance with the Supreme Court's decision in United States v. Booker, 125 S.Ct. 738 (2005) and the Second Circuit's decision in United States v. Crosby, 397 F.3d 103 (2d Cir. 2005). In particular, section 3553(a)(1) asks that the sentence imposed consider both "the nature and circumstances of the offense and the history and characteristics of the defendant," while section 3553(a)(2)(A) demands that the penalty "provide just punishment for the offense" that simultaneously "afford[s] adequate deterrence to criminal conduct" as required by § 3553(a)(2)(B).

  Eberhard's criminal conduct has harmed a significant number of people, not only causing tremendous financial loss and emotional stress to his clients but also burdening his clients' families and loved ones with the financial uncertainty that comes with having one's financial security abruptly and irrevocably eliminated. Many of Eberhard's clients have written letters to the Court informing of their continued financial and emotional hardship, of having their dreams of retirement built up over a lifetime of hard work and diligent saving slip away in a moment, of having to return to work to make ends meet only to find that they cannot be employed in well-paying jobs comparable to the careers they once held before retiring.

  Eberhard's carefully crafted and executed criminal conduct has devastated his former clients, many of whom are senior citizens, and left them in financial ruin. Eberhard, consciously and over an extended period of time, exploited his experience in the securities industry and his friendships — many of his former clients were friends of his or had been referred to him by his friends — to enrich himself with total disregard for the consequences of his actions. He enlisted his employees into his fraudulent scheme, enticing them to act illegally and to remain silent by paying exorbitant salaries; he paid large sums of money to those clients who discovered his unlawful acts to buy their silence; and he engaged in numerous activities, including altering account statements, wire fraud and mail fraud, to conceal his criminal conduct from unsuspecting clients.

  After the S.E.C. commenced its investigation and suit against him, Eberhard obstructed justice by violating Judge Berman's Freezing Order, attempting to hide assets by filing forged documents with the S.E.C. Given Eberhard's age*fn3 and his lack of prior criminal conviction, he is not a likely candidate for future criminal conduct, a factor to consider under 18 U.S.C. § 3553 (a) (2) (C). Additionally, section 3553 (a) (7) asks the Court to weigh Eberhard's need to provide restitution to his victims. See 18 U.S.C. § 3553(a)(7). However, given the "nature and circumstances of the offense," 18 U.S.C. § 3553 (a) (1), and the need for the sentence imposed "to afford adequate deterrence to criminal conduct," 18 U.S.C. § 3553(a) (2)(B), a Guideline sentence is warranted in this case. A sentence at the bottom of the Guideline range will give Eberhard, who today is still a young man at forty-one years old, time to make the necessary restitution payments to his victims upon his release from prison. Prison time in exchange for the theft of life savings is an unequal equation, but it is the only penalty available. The Sentence

  For the instant offense, Eberhard is sentenced to 151 months imprisonment and three years supervised release. A fine of $15,000 is imposed, and restitution, in an amount to be determined within 90 days of the imposition of this sentence pursuant to 18 U.S.C. § 3664 (d) (5), is ordered. A special assessment fee of $1,100 payable to the United States is mandatory and due immediately.

  As Eberhard has kept all court appearances and is not viewed as a flight risk or a danger to the community, he is deemed a good candidate for voluntary surrender, pursuant to 18 U.S.C. § 3143(a) (2).

  If the defendant is engaged in a BOP non-UNICOR work program, the defendant shall pay $25 per quarter toward the criminal financial penalties. However, if the defendant participates in the BOP's UNICOR program as a grade 1 through 4, the defendant shall pay 50% of his monthly UNICOR earnings toward the criminal financial penalties, consistent with BOP regulations at 28 C.F.R. § 545.11. Any payment made that is not payment in full shall be divided proportionately among the persons named.

  As mandatory conditions of supervised release, Eberhard shall (1) abide by the standard conditions of supervision (1-13); (2) not commit another federal, state, or local crime; (3) not illegally possess a controlled substance; and (4) not possess a firearm or destructive device.

  Special conditions of supervised release include: (1) Eberhard shall provide his probation officer with access to any requested financial information; and (2) Eberhard shall not incur new credit charges or open additional lines of credit without the approval of his probation officer unless he is in compliance with the installment payment schedule.

  The mandatory drug testing condition is suspended based on the Court's determination that the defendant poses a low risk of future substance abuse.

  Eberhard shall cooperate in the collection of DNA as directed by his probation officer.

  Eberhard shall report to the nearest Probation Office within 72 hours of release from custody and shall be supervised by the district of residence. This sentence is subject to modification at the sentencing hearing now set for June 7, 2005.

  It is so ordered.

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