That restriction will be reconsidered after a man convicted of defrauding the federal government won an appeal against a condition of his sentence that barred him from employing himself.
Former Bangor-area businessman and property manager Nathan Reardon was arrested in August 2023 for violating the terms of his probation after a Bangor Daily News investigation found he continued to operate as a landlord despite a court order banning him from self-employment. U.S. District Judge Lance Walker sentenced Reardon to nine months in prison in October for that violation and other charges.
But last week, a federal appeals court overturned Reardon's ban on self-employment. A split decision by three judges on the First Circuit Court of Appeals said Walker had failed to properly justify the ban in his ruling.
The appeals court's decision sent the case back to the U.S. District Court in Maine to reconsider the scope of the limitations.
The three-judge panel did not “easily understand” the district court's reasons and therefore were “obliged to set aside, but not necessarily reverse” the ruling and give the district court an opportunity to explain its reasons in the resentencing, the appeals panel majority opinion said.
Reardon's October sentencing marked the end of his second criminal case in nearly two years. In 2022, he was convicted of fraud for falsifying payroll information for his business to obtain a $60,000 Paycheck Protection Program loan. On November 3, 2022, Judge Walker sentenced Reardon to 20 months in federal prison and three years of probation, which includes a clause prohibiting Reardon from working during that time.
After the November 2022 ruling, Reardon and his then-lawyer, Hunter Tsovalas, appealed the ruling, arguing that the self-employment ban was too restrictive. Oral arguments are scheduled for December 2023.
Walker was obligated to explain why he believed the ban was the least restrictive way to protect the public from Reardon, but he did not, Judges O. Rogerie Thompson and Julie Likelman wrote in their May 23 ruling.
The other judge, William Kayatta, dissented and said Walker had not abused his discretion.
“My colleagues seem troubled by the court's caution, but the district court's argument was simple: given Reardon's astonishing record of evading court supervision and making questionable applications for government assistance after his indictment, a more cautious approach was necessary to protect the public during Reardon's supervised release,” Kayatta said.
Assistant U.S. Attorney Andrew Lizotte, the lead prosecutor in Reardon's case in federal court, said the 1st Circuit's remand was limited and that the district court would only have to reconsider whether the ban on self-employment was truly the minimum restriction necessary to protect the public.
“As the First Circuit noted, 'Mr. Reardon's position as a business owner was central to and inseparable from the bank fraud,' so the record already supports a finding that the self-employment restriction was warranted,” Lizotte said.
Tsovalas said he felt the appeal court had made the right decision to strike down the “blanket restriction” on self-employment.
“[Reardon] “Mr Reardon has been self-employed his entire adult life and the restrictions were too burdensome, preventing him from making a living or earning an income to repay the compensation,” he said in an email.
The court will eventually hold a new hearing to reconsider the ban. As of Tuesday afternoon, no hearings had been scheduled.
Reardon has a second appeal still pending. In that case, Reardon was sentenced to nine months in prison for violating special conditions of his release, but although the appeal has yet to be heard, Reardon served the nine months of his sentence and was released on April 8th.
Reardon and his newly court-appointed attorney, Matthew Winchester, did not immediately respond to requests for comment Tuesday.
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