United States v. Olson
867 F.3d 224
| 1st Cir. | 2017Background
- Olson operated unlicensed investment businesses (AEO, then KMO), soliciting funds from friends, family, and clients and later converting the business into a Ponzi scheme when investments failed.
- He comingled and misappropriated investor funds (about $2.6 million converted for personal use) and produced false earnings statements to attract new investments.
- Olson also attempted to evade taxes on income from his operations; he self-reported to authorities in March 2012 and cooperated thereafter.
- He pleaded guilty under a Rule 11(c)(1)(C) plea agreement to four counts of tax evasion; the agreement stipulated a 42–60 month sentencing range and reserved restitution amounts for sentencing.
- The district court calculated Guidelines of 37–46 months, rejected parties’ joint 42-month recommendation, and imposed a 60-month above-Guidelines variance sentence based on § 3553(a) factors.
- At a later restitution hearing the court ordered Olson to pay $22,811,405.26 in restitution, rejecting Olson's argument that some investor losses were legitimate (i.e., would have occurred absent the fraud).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appellate jurisdiction exists given the plea agreement and appeal waiver | Gov't: Some claims barred by statute and plea stipulation; appeal waiver/enforcement limits review | Olson: Appeal waiver inapplicable because sentence (60 mo.) exceeded Guidelines range; may appeal sentence and restitution | Court assumed jurisdiction for merits and resolved appeal on substance, avoiding complex jurisdictional ruling |
| Procedural validity of the 60‑month sentence (departure vs. variance; notice; proper factors) | Gov't: District court properly applied § 3553(a) factors and imposed a variance | Olson: District court improperly characterized the sentence (used "departure") and relied on improper factors | Court: No procedural error — court in fact imposed a variance based on § 3553(a), notice not required, and relied on permissible factors |
| Substantive reasonableness of the 60‑month sentence | Gov't: Variance reasonable given scope, duration, harm, deterrence, and limited remorse | Olson: Above-Guidelines sentence substantively unreasonable | Court: Sentence substantively reasonable — plausible rationale and defensible result given aggravating factors |
| Whether restitution must exclude "legitimate" investment losses that would have occurred absent the fraud | Gov't: Entire investor loss amount is restitution because misrepresentations induced investments | Olson: Some losses (~$5.5M) were legitimate investment losses and not caused by fraud, so should be excluded | Court: Rejected Olson's but‑for argument — misrepresentations induced investment, so full agreed loss amount ordered as restitution |
Key Cases Cited
- United States v. Figueroa-Ocasio, 805 F.3d 360 (1st Cir. 2015) (vacating plea that was not knowing and voluntary)
- United States v. Woods, 210 F.3d 70 (1st Cir. 2000) (permitting courts to forgo jurisdictional parsing when merits resolve appeal)
- United States v. Santini-Santiago, 846 F.3d 487 (1st Cir. 2017) (basing a sentence on § 3553(a) indicates a variance despite use of "departure" language)
- United States v. Nelson, 793 F.3d 202 (1st Cir. 2015) (review of above-Guidelines variance; degree of variance considered)
- Gall v. United States, 552 U.S. 38 (2007) (reasonableness review of sentences and consideration of variance magnitude)
- United States v. Cutter, 313 F.3d 1 (1st Cir. 2002) (restitution requires but-for causation and non-attenuated causal link)
- United States v. Vaknin, 112 F.3d 579 (1st Cir. 1997) (discussing causal nexus for restitution)
- United States v. Aponte-Vellón, 754 F.3d 89 (1st Cir. 2014) (no Rule 32(h) advance notice obligation for a variance)