United States v. Malcolm Segal
687 F. App'x 192
| 3rd Cir. | 2017Background
- Malcolm Segal, a long-time financial advisor and president of National CD Sales, pled guilty to 11 counts of mail fraud and 3 counts of wire fraud for misappropriating client CD funds.
- Segal redeemed clients’ CDs for himself, provided fabricated documentation (false CD numbers, maturity dates, rates) and sent handwritten monthly interest checks to conceal the theft.
- With Aegis clients, Segal solicited purchases, pocketed funds, used some to pay earlier investors, and created Aegis-letterhead documents bearing an FDIC seal to perpetuate the fraud; he also wired funds from several investor accounts to himself.
- At sentencing the District Court applied a U.S.S.G. § 2B1.1(b)(10) sophisticated-means enhancement, producing a total offense level of 28 and a guideline range of 78–97 months.
- The District Court imposed a 126-month sentence (29 months above the guideline range) after an upward variance, citing betrayal of vulnerable victims and the need for general deterrence.
- Segal appealed, arguing (1) the sophisticated-means enhancement was improper and (2) the court failed to meaningfully consider § 3553(a) factors; the Third Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the U.S.S.G. § 2B1.1(b)(10) "sophisticated means" enhancement was proper | Segal: scheme was a garden-variety Ponzi; not sufficiently complex to warrant enhancement | Government/District Court: use of falsified Aegis letterhead, FDIC seal, fabricated CD details and ongoing checks showed planning/concealment | Affirmed — clear-error review; evidence supported enhancement and thus not clearly erroneous |
| Whether the District Court procedurally erred by failing to meaningfully consider 18 U.S.C. § 3553(a) factors when upwardly varying | Segal: court inadequately considered sentencing factors and failed to justify 29-month variance | Government/District Court: court analyzed § 3553(a), noted victim vulnerability, motive (greed), and need for general deterrence | Affirmed — no abuse of discretion; court provided thoughtful explanation for upward variance |
Key Cases Cited
- United States v. Fountain, 792 F.3d 310 (3d Cir. 2015) (defines and guides application of the "sophisticated means" enhancement)
- Anderson v. City of Bessemer City, 470 U.S. 564 (1985) (where two permissible views of evidence exist, factfinder’s choice is not clearly erroneous)
- United States v. Tomko, 562 F.3d 558 (3d Cir. 2009) (standard of review and principles for appellate review of sentencing decisions)