A man convicted of defrauding the federal government has won an appeal of his sentence’s condition that he not employ himself, meaning the restriction will get a second look.
Nathan Reardon, a former businessman and property manager in the Bangor area, was arrested in August 2023 for violating the conditions of his supervised release after a Bangor Daily News investigation found that he continued to operate as a landlord despite a court order barring him from self employment. U.S. District Court Judge Lance Walker sentenced Reardon in October to serve nine months in prison for this violation and others.
But last week a federal appeals court vacated the self-employment ban imposed by the judge on Reardon. The decision, which split the panel of three judges from the U.S. Court of Appeals for the First Circuit, said Walker didn’t properly justify the ban at the time of sentencing.
The appeals court’s ruling remands the case back to the U.S. District Court in Maine to reconsider the scope of the restriction.
Because the three appeals judges could not “readily discern” the district court’s reasoning, it was “incumbent upon us to vacate, though not necessarily to reverse” the decision and provide the district court an opportunity to explain its reasoning at resentencing, the panel’s majority opinion said.
Reardon’s sentencing last October marked the conclusion of his second criminal case in about two years. In 2022, he was convicted of fraud for falsifying payroll information for one of his businesses to get a $60,000 Paycheck Protection Program loan. Walker sentenced Reardon to 20 months in federal prison and three years of supervised release — which included a provision banning Reardon from employing himself during that time — on Nov. 3, 2022.
Following the November 2022 sentencing, Reardon and his attorney then, Hunter Tzovarras, filed the appeal, arguing that the self-employment ban was overly restrictive. Oral arguments were heard in December 2023.
Walker was obligated to explain why he felt the ban was the least restrictive way possible to protect the public from Reardon, but he failed to do so, judges O. Rogeriee Thompson and Julie Rikelman said in their May 23 opinion.
The other judge, William Kayatta, dissented and said Walker did not abuse his discretion.
“My colleagues appear bothered by the court’s caution. But the district court’s point was simple and obvious: Given Reardon’s remarkable post-arraignment record of skirting court supervision and filing dubious applications for government assistance, 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 on Reardon’s cases in federal court, said the First Circuit’s remand is limited and will only require the district court to look again at whether the self-employment ban was truly the minimum restriction needed to protect the public.
“As the First Circuit noted, because ‘Reardon’s status as a business owner was central to and inseparable from his bank fraud,’ the record already supports a finding that the self-employment restriction was warranted,” Lizotte said.
Tzovarras said he feels the appellate court made the right decision in vacating the “blanket restriction” on self employment.
“[Reardon] had been self-employed his entire adult life and the restriction was too burdensome and prevented Mr. Reardon from making a living and obtaining an income for paying back the restitution owed,” he said in an email.
To reexamine the ban, the court will eventually hold a new hearing. One had not been scheduled as of Tuesday afternoon.
Reardon has a second appeal that is still pending. In that case, Reardon is appealing his nine-month prison sentence for violating the special conditions of his release. Although the appeal has not been heard, Reardon served the nine-month sentence and was released on April 8.
Reardon and his new, court-appointed attorney, Matthew Winchester, did not immediately respond to a request for comment Tuesday.
