USA v. Kasali

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
LOLA KASALI, §
§
Plaintiff, §
§
v. § CRIMINAL ACTION NO. H-21-54
§
UNITED STATES OF AMERICA, §
§
Defendant. §
MEMORANDUM OPINION AND ORDER
The Court has carefully considered Magistrate Judge Palermo’s
Report and Recommendation (“Report and Recommendation”) (Docket
Entry No. 464), dated April 23, 2026, Defendant’s Objections to the
Magistrate Judge’s Report and Recommendation on Supervised Release
Revocation and Recommended Sentence at DE 464 (“Defendant’s
Objections”) (Docket Entry No. 484), and the Government’s Response
to Defense Objections to the Magistrate Judge’s Report and
Recommendation (DE 464) (“Government’s Response”) (Docket Entry
No. 489). For the reasons stated below, Kasali’s objections to
Magistrate Judge Palermo’s recommendation that the court find she
violated the terms of her supervised release will be overruled, and
Kasali’s objections to Magistrate Judge Palermo’s recommendations
that her term of supervised release be revoked that she be
sentenced to three years imprisonment will be denied as moot
because the court will conduct a hearing at which it will determine
an appropriate remedy for Kasali’s violations.
1
United States District Court
Southern District of Texas
ENTERED
June 09, 2026
Nathan Ochsner, Clerk
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I. BACKGROUND
Pending before the court are the United States Probation
Office’s Petitions for Warrant or Summons for Offender Under
Supervision and Supplements to the Petition for Warrant or Summons
for Person Under Supervision dated October 28, 2025, December 9,
2025, and December 11, 2025 (Docket Entry Nos. 396, 413, and 414).
On December 1, 2025, the court entered an Order of Referral (Docket
Entry No. 411) referring the supervised release petition (Docket
Entry No. 396), and all pending motions and related matters to
Magistrate Judge Palermo. The petitions allege seven Grade C
violations:
(1) Failure to pay restitution as directed;
(2) Failure to follow U.S. Probation Officer’s
instructions;
(3) Failure to participate in mental health treatment;
(4) Failure to permit a U.S. Probation Officer to visit
at home or elsewhere;
(5) Failure to pay special assessment fee as directed;
(6) Incurring new credit charges without approval of
the Probation Officer; and
(7) Incurring or opening additional lines of credit
without approval of the Probation Officer.1
The Probation Officer recommended that Defendant’s supervision be
revoked.2
1Report and Recommendation, Docket Entry No. 464, p. 7 (citing
Docket Entry Nos. 396, 413, and 414). Page numbers for docket
entries refer to the pagination inserted at the top of the page by
the court’s electronic filing system.
2Id. at 10 (citing Docket Entry No. 414, p. 4).
2
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At a revocation hearing held on March 4 and 9, 2026, the
Defendant did not plead true to any of the charges, but the
Government stated that the fifth charge of failure to pay the
special assessment was moot because Defendant paid it.3 The
Government called two witnesses to support the remaining charges:
United States Probation Officer Azuree Jackson, and United States
Postal Inspector Kyle Shadowence.4 At the close of the hearing,
the United States Probation Office recommended a sentence of three
(3) years imprisonment, with no term of supervised release
following release.5 The Government agreed with the Probation
Office’s recommendation. Kasali opposed the recommended sentence
and asked the court to allow her to remain on supervised release
but to assign her a different Probation Officer and require her to
obtain mental health treatment.6 Magistrate Judge Palermo
recommends that the court find Kasali violated the terms of her
supervised release by committing violations one, two, three, four,
six, and seven; that Kasali’s term of supervised release be
revoked, and she be sentenced to three (3) years imprisonment, to
be served concurrently for all violations, with credit for time
served in federal custody; and with no supervised release following
her release from prison.7
3Id.
4Id.
5Id. at 21.
6Id.
7Id. at 21-22.
3
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II. STANDARD OF REVIEW
District courts review de novo those portions of a Magistrate
Judge’s Report and Recommendation to which timely objections are
filed. 28 U.S.C. § 636(b)(1)(C); Fed. R. Crim. P. 59(b)(3). See
also United States v. Wilson, 864 F.2d 1219, 1222 (5th Cir.) (per
curiam), cert. denied, 109 S. Ct. 3243 (1989) (recognizing that de
novo review requires an independent “determination based upon the
record . . . unrestrained by the findings and conclusion of the
magistrate”). The district court judge “may accept, reject, or
modify, in whole or in part, the findings or recommendations made
by the magistrate judge.” 28 U.S.C. § 636(b)(1)(C). See also Fed.
R. Crim. P. 59(b)(3) (“The district judge may accept, reject, or
modify the recommendation, receive further evidence, or resubmit
the matter to the magistrate judge with instructions.”).
III. ANALYSIS
Kasali objects to Magistrate Judge Palermo’s recommendation
that her supervised release be revoked based on Grade C technical
violations and argues that the court should decline to adopt the
sentencing recommendation because
[e]ven if this Honorable Court accepts as accurate the
factual findings in the magistrate Judge’s Recommendation
that this Honorable Court impose the statutory maximum
term of 36months’ imprisonment on a defendant — appearing
on revocation for the first time — for exclusively
Grade C technical violations, is both substantively and
procedurally unreasonable.8
8Defendant’s Objections, Docket Entry No. 484, pp. 2-3.
4
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A. Magistrate Judge Palermo’s Recommended Finding that Kasali
Violated the Terms of Her Supervised Release Will be Adopted
Asserting that “[t]he record is replete with evidence that
Defendant has refused to allow her P[robation] O[fficer] to
supervise her,”9 Magistrate Judge Palermo recommends that the court
find Kasali violated the terms of her supervised release by
committing violations one, two, three, four, six, and seven.10 For
the reasons stated below the court will overrule Kasali’s
objections to the factual findings in Magistrate Judge Palermo’s
Report and Recommendation, and adopt the recommended findings.
1. Failure to Pay Restitution as Directed
Without disputing that she has failed to pay restitution as
directed, Kasali argues that Magistrate Judge Palermo’s recommended
finding that she “refused to pay restitution as ordered,”11
mischaracterizes that violation by “leading with the original
judgment amount of $2,027,686.64 and Defendant’s failure to make
monthly payments,”12 because “[o]n July 28, 2025, the Government
applied a credit of $1,937,500.00 from seized funds to Ms. Kasali’s
restitution balance . . . [making t]he remaining balance at the
time of the final revocation hearing . . . $90,186.64 — less than
9Report and Recommendation, Docket Entry No. 464, p. 17.
10Id. at 17-19, and 21.
11Id. at 18. See also id. at 10-11.
12Defendant’s Objections, Docket Entry No. 484, p. 6.
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five percent of the original judgment.”13 Asserting that “[t]he
magnitude of an unpaid restitution balance is directly relevant to
assessing the willfulness and seriousness of the violation,”14
Kasali argues the Report and Recommendation fails to recognize that
[a] defendant who has had nearly $2 million seized and
applied to her restitution obligation, leaving a balance
of $90,186.64, and who is on supervised release with no
full-time employment income, is in a materially different
position than a defendant who has paid nothing against an
intact $2 million judgment.15
Kasali’s argument that the Report and Recommendation
mischaracterizes the restitution violation is not supported by the
record. The second sentence of the paragraph addressing the
restitution violation states that “[a]fter a credit of
$1,937,500.00 from funds that were seized, Defendant owed a balance
of $90,186.64.”16 The Report and Recommendation states that the
Probation Officer testified that although Kasali should have paid
$300.00 per month, she not only failed to make any payment, she
repeatedly said that she did not owe the money and that she would
not make any payments.17 Kasali does not dispute the truth of the
Probation Officer’s testimony on this issue. Kasali’s objection to
Magistrate Judge Palermo’s recommended finding that she refused to
pay restitution as ordered is OVERRULED.
13Id. at 6-7.
14Id. at 7.
15Id.
16Report and Recommendation, Docket Entry No. 464, p. 11.
17Id.
6
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2. Failure to Follow Probation Officer’s Instructions
Kasali objects to Magistrate Judge Palermo’s recommended
finding that she failed to follow her Probation Officer’s
instructions regarding employment because the Report and
Recommendation fails to account for the Probation Officer’s
testimony during cross-examination “that had she known . . .
Ms. Kasali was a student, the full-time employment condition would
have been waived.”18 Observing that the Report and Recommendation
acknowledges that before the Second Superseding Petition
was filed, Ms. Kasali had not informed her Probation
Officer that she was enrolled at the University of
Houston, and that after the petition was filed, she
represented that she was in school but did not provide
supporting documentation,19
Kasali argues that
if [she] was, in fact, a full-time student . . . then the
employment component of Violation 2 reflects a
communication failure and a documentation gap more than
a willful refusal to comply. This Court should find, or,
at a minimum, should adopt a finding that the record on
this violation is materially ambiguous.20
But missing from the record is any evidence that Kasali was, in
fact, a full-time student. Kasali’s objection to Magistrate Judge
Palermo’s recommended finding that she failed to follow the
probation officer’s instructions regarding employment is OVERRULED.
18Defendant’s Objections, Docket Entry No. 484, pp. 7-8.
19Id. at 8.
20Id.
7
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3. Failure to Participate in Mental Health Treatment
Asserting that she did not impede the mental health treatment
assessment, Kasali argues that she “appeared to her appointments as
requested and answered questions to some extent.”21 The Report and
Recommendation states that the Probation Officer testified that
although Kasali went to two mental health appointments, she did not
participate sufficiently for the therapists to be able to fully
assess her.22 Acknowledging that “[t]here were some subjects that
[she] declined to comment on,” Kasali argues that she “never
expressed unwillingness to return to the program,” and that “she
had not been provided with any follow-up appointments to continue
the process.”23 Because Kasali acknowledges that although the went
to her appointments, she declined to comment on some subjects,
Kasali’s objection to Magistrate Judge Palermo’s recommended
finding that she failed to participate in mental health treatment
is OVERRULED.
4. Failure to Permit Probation Officer Visits
Without disputing the Probation Officer’s testimony regarding
multiple failed attempts to complete unscheduled home visits with
her, Kasali argues that the Report and Recommendation
21Id. at 9.
22Report and Recommendation, Docket Entry No. 464, p. 12.
23Defendant’s Objections, Docket Entry No. 484, p. 9.
8
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mischaracterizes her noncompliance by failing to recognize that her
“conditions of supervision do not have a movement restriction
component[, and, therefore,] the notion that [she] is violating her
conditions of supervised release by not being present at her
dwelling during USPO Jackson’s unannounced visits cannot stand.”24
Acknowledging that “[t]he announced visits present a different
scenario,” Kasali argues that “[t]he Probation Office was able to
conduct all but one of her announced visits; in particular, on June
25, 2025. The rest of the visits transpired, albeit with
controversy, but in compliance with the conditions set forth in her
supervised release terms.”25 Because Kasali acknowledges both that
the Probation Officer was unable to conduct one scheduled visit,
and that although the other scheduled visits transpired, they
transpired with controversy, Kasali’s objection to Magistrate Judge
Palermo’s recommended finding that she failed to permit Probation
Officer home visits is OVERRULED.
6. Incurring New Credit Charges Without Approval
Kasali argues that the Report and Recommendation over
represents the alleged credit violations, but does not dispute that
she “obtained a credit card from Synchrony Bank — Amazon with a
credit limit of $150.00 [without her Probation Officer’s
24Id. at 6.
25Id.
9
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approval].”26 Asserting that the Report and Recommendation does not
note the $150.00 credit limit,27 Kasali argues that “[t]his Court
should adopt a finding that accurately reflects the de minimis
nature of the Synchrony account in assessing the weight of
Violation[] 6 . . .”28 Kasali’s contention that the Report and
Recommendation does not accurately reflect the de minimis nature of
the Synchrony account is not supported by the record. The second
sentence of the paragraph addressing the credit violations states
that “[i]n December 2025, the probation office conducted a credit
check and discovered that Defendant had obtained a credit card from
Synchrony Bank — Amazon with a credit limit of $150.00.”29 Because
Kasali does not dispute that she did not have permission to open
the Synchrony Bank account, Kasali’s objection to Magistrate Judge
Palermo’s recommended finding that she incurred new credit charges
without approval is OVERRULED.
7. Incurring or Opening Additional Lines of Credit
Without Approval
The Report and Recommendation states that in addition to the
Synchrony Bank credit card,
26Id. at 8.
27Id.
28Id. at 9.
29Report and Recommendation, Docket Entry No. 464, p. 9.
10
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probation discovered that Defendant had obtained at least
eight student loans from the Department of Education,
totaling $19,048.00. She did not have permission to
obtain these loans. She never informed her Probation
Officer that she was a student.30
Without disputing that she obtained at least eight student
loans from the Department of Education without permission from her
Probation Officer, Kasali argues that
the communication difficulties with her Probation Officer
. . . led to a misunderstanding of what financial actions
she is barred from engaging on without authorization.
Specifically USPO Jackson was not aware if Ms. Kasali
received money from those student loans, or, instead, if
the monies went directly to the educational institutions
to furnish payment for enrollment and materials. As a
result, Ms. Kasali believed that she was not engaging in
financial obligations when securing loans that were not
paid directly to her, but to the schools she was enrolled
in.31
Missing from the record is any supporting evidence showing either
that the loan proceeds went directly to the schools and not to
Kasali, or that Kasali was enrolled in school when she obtained the
loans. Because Kasali does not dispute that she obtained at least
eight student loans from the Department of Education, and that she
did not obtain her Probation Officer’s permission to secure those
loans, Kasali’s objection to Magistrate Judge Palermo’s recommended
finding that she incurred additional lines of credit without
approval is OVERRULED.
30Id.
31Defendant’s Objections, Docket Entry No. 484, p. 9.
11
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B. Magistrate Judge Palermo’s Recommendation that Kasali’s
Supervised Release be Revoked and that She be Sentenced to
Three Years Imprisonment Will be Denied as Moot because the
Court Will Hold a Hearing to Determine an Appropriate Remedy
Kasali objects to Magistrate Judge Palermo’s recommended
sentence of three (3) years imprisonment to be followed by no term
of supervised release as procedurally and substantively
unreasonable. Kasali argues that the three-year imprisonment
recommendation is procedurally unreasonable because it fails to
consider Amendment 835 to the United States Sentencing Guidelines,
which took effect on November 1, 2025, and rewrote Chapter 7's
supervised release provisions.32 Kasali argues that
[u]nder [the] new § 7C1.3, the Commission established an
explicit, graduated framework for revocation decisions:
Grade A violations (new crimes of violence, firearms,
drug trafficking): revocation “generally appropriate.”
Grade B violations (other felonies): revocation “often
appropriate.” Grade C violations (misdemeanors and
technical noncompliance): revocation “may be appropriate”
— the lowest tier, explicitly discretionary.33
Kasali argues that the Report and Recommendation neither
acknowledges this framework, nor “explain[s] why, under the tiered
standard, revocation and imprisonment at the statutory maximum are
the appropriate responses to [her] specific violations . . . at
this time.”34 Asserting that 18 U.S.C. §§ 3553(a)(5) and 3583(e)
require the court to consider applicable policy statements, Kasali
32Id. at 10.
33Id. at 10-11.
34Id. at 11.
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argues that Amendment 835’s absence from the Report and
Recommendation “is a procedural error that this Court should
correct in adopting its own findings on sentence.”35
Kasali argues that Magistrate Judge Palermo’s recommended
sentence of three (3) years is substantively unreasonable because
it is grossly above the recommended guidelines sentence of three
(3) to nine (9) months for Grade C violations,36 and because Fifth
Circuit decisions upholding statutory maximum sentences that are
grossly above the guidelines range involve new criminal conduct or
multiple prior violations; i.e., circumstances that do not exist in
this case.37
Kasali cites Esteras v. United States, 145 S. Ct. 2031, 2041
(2025), in which the Supreme Court held that supervised release
“is not a punishment in lieu of incarceration.” . . .
Rather it “fulfills rehabilitative ends” and “provides
individuals with postconfinement assistance.” . . . So
when a defendant violates the conditions of his
supervised release, it makes sense that a court must
consider the forward-looking ends of sentencing
(deterrence, incapacitation, and rehabilitation), but may
not consider the backward-looking purpose of
retribution,38
Kasali argues that the Report and Recommendation’s
35Id. at 12.
36See USSG § 7C1.5.
37Defendant’s Objections, Docket Entry No. 484, pp. 14-26
(citing cases).
38Id. at 1-2 (internal citations omitted).
13
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extended recitation of Ms. Kasali’s noncompliant behavior
— during pretrial supervision years before the violations
at issue, during the Faretta hearing, during interactions
with her Probation Officer — raises a substantial
question about whether the recommended sentence is an
exercise in permissible forward-looking sentencing or an
impermissible exercise in punishment for who Ms. Kasali
has been throughout this case. Esteras forbids the
latter, and this Court should ensure the sentence it
ultimately imposes is grounded exclusively in
permissible, forward-looking § 3553(a) factors.39
Finally, Kasali argues that the absence of any term of
supervised release following imprisonment requires independent
justification that the Report and Recommendation does not provide.40
Kasali explains that
[e]liminating the remaining supervision term entirely
means that when [she] is released she will receive no
transitional support, no monitoring, and no structured
assistance with reintegration. Given that the violations
at issue arose from Ms. Kasali’s difficulties navigating
the supervisory relationship, the appropriate response
may well be to restructure that relationship — a
different probation officer, clearer expectations,
targeted mental health treatment — rather than to
eliminate supervision entirely after extracting the
maximum prison term. The [Report and Recommendation]
offers no explanation for why the elimination of all
post-release supervision serves the permissible
sentencing goals applicable here. This Court should
decline to adopt that recommendation and should instead
impose an appropriate term of supervised release
following any period of imprisonment.41
Magistrate Judge Palermo’s Report and Recommendation correctly
states that “[t]he record is replete with evidence that Defendant
39Id. at 24.
40Id. at 26-27.
41Id. at 27.
14
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has refused to allow her P[robation] O[fficer] to supervise her,”42
cites cases supporting the recommendation to revoke Kasali’s
supervision, and cites the standards for crafting an appropriate
sentence.43 Since, however, Federal Rule of Criminal Procedure
32.1(b)(2)(E) and (c)(1) entitle Kasali to a hearing at which she
is able to make a statement and present any information in
mitigation, the court will hold a hearing to determine the
appropriate remedy for Kasali’s violations.
IV. CONCLUSIONS AND ORDER
For the reasons stated above in § III.B, Kasali’s objections
to the sentencing recommendations in Magistrate Judge Palermo’s
Report and Recommendation are DENIED as MOOT.
For the reasons stated above in § III.A, Kasali’s other
objections to Magistrate Judge Palermo’s Report and Recommendation
(Docket Entry No. 464) are OVERRULED. The court, therefore, ADOPTS
Magistrate Judge Palermo’s Report and Recommendation, and finds
that Kasali has violated the terms of her supervised release.
The court will conduct a hearing as to the appropriate remedy
for Kasali’s violations on Thursday, July 9, 2026, at 11:00 a.m.
The court will not permit argument or evidence from Kasali or
either counsel as to the correctness of any of the court’s rulings.
42Report and Recommendation, Docket Entry No. 464, p. 17.
43Id. at 20.
15
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The sole purpose of the hearing is for the court to determine an
appropriate remedy for the violations established by the court's
adoption of Magistrate Judge Palermo's Report and Recommendation.
SIGNED at Houston, Texas, this 9th day of June, 2026.
SIM LAKE
SENIOR UNITED STATES DISTRICT JUDGE
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