Judge won’t end Brandon Steven’s probation, blocking coronavirus relief for businesses

A federal judge has decided not to end Wichita businessman Brandon Steven’s probation early, blocking his companies from receiving financial relief during the coronavirus pandemic.

Steven, who has served less than a year of a three-year probation, had asked the court earlier this month to end his sentence early. His lawyer argued that his businesses and employees would be negatively affected because small businesses whose owners are on probation are not eligible for the Paycheck Protection Program.

Judge Gwynne Birzer rejected Steven’s motion in a 14-page order filed Friday in U.S. District Court.

“This Motion weighed heavy on the Court,” Birzer wrote. “The Court did not consider it lightly and analyzed the parties’ positions and the applicable law carefully and cautiously knowing that its decision would impact the livelihood of Defendant’s employees.”

Federal financial assistance could have protected the jobs and income of more than 4,000 people.

When Steven’s motion was filed, he had already furloughed 3,941 of his 6,329 employees due to the pandemic and expected to furlough an additional 279 if he didn’t get government help. He said all furloughed employees would be rehired if they got Paycheck Protection Program funds, and the rest of the workers would also be retained.

Birzer wrote that the law prohibits Steven’s businesses from applying for PPP funds and he would not get special treatment from the court.

“Defendant is no different than every other business owner on probation who is prohibited from seeking PPP funds,” Birzer wrote. “Thus, other similarity situated defendants would not receive the same relief Defendant requests.”

Steven pleaded guilty in June to one misdemeanor count of accessory after the fact to the unlawful transmission of wagering information. In addition to the three years of probation, he forfeited more than $1 million and was ordered to perform 200 hours of community service.

He has already paid the money, which represented the proceeds from his crime. His lawyer said he has served 183 hours of community service, has had no significant violations of probation and has remained gainfully employed.

“While the Court commends Defendant for being proactive regarding his sentence, this conduct is not exceptional such that it requires early termination of probation,” Birzer wrote. “It was ordered by the Court, and compliance is expected.”

The criminal case was part of a years-long probe by the Federal Bureau of Investigation into illegal gambling in Wichita. Steven admitted in court to hiding handwritten ledgers or other computerized records that detailed gambling credits, earnings and the obligations of a gambling business in an attempt to conceal who was involved in the poker games.

Steven, 46, is a business partner with one of his brothers, owning health clubs, auto dealerships and other business ventures around the city. He is also a professional gambler who is ranked No. 1 in Kansas with earnings of more than $3 million, according to the Hendon Mob.

The prosecution and defense attorneys had debated whether Steven’s businesses would have been eligible for federal aid even if he weren’t on probation.

Assistant U.S. Attorney Aaron Smith argued that Steven’s companies, with their common ownership, exceeded the 500 employee threshold for small businesses. Steven’s lawyer, James Hobbs of Kansas City, replied that his businesses may still be eligible for PPP funds as franchises, for which the affiliation rules have been waived.

The judge said the uncertainty of PPP funding eligibility was not an issue for the court to discuss. Instead, she said ending Steven’s probation did not serve the interests of justice and would have subverted the power of Congress.

“The legislative branch, not the judicial branch, makes the laws,” Birzer wrote. “Thus, the Court cannot endorse Defendant’s request to circumvent federal regulations. Defendant’s remedy lies with Congress, not with this Court.”

The judge added that Steven had already received a downward departure through his plea deal. The court could have imposed jail time or a five-year probation.

“Terminating Defendant’s probation after ten months served would downplay the seriousness of Defendant’s criminal conduct and would avoid providing just punishment for the offense,” she wrote. “Additionally, terminating a probation sentence after such a short time served would send the wrong message to would be offenders.”

This story was originally published April 21, 2020 at 9:31 PM.