United States v. Richard Altomare
673 F. App'x 956
| 11th Cir. | 2016Background
- Altomare, a former CEO previously sanctioned by the SEC, agreed to assist Sunset Capital (a low‑priced OTC Pink Sheets company) by drafting press releases and finding investors.
- He reconnected with former partner Robert Weidenbaum (an FBI informant and barred penny‑stock trader) and discussed plans to "pump" Sunset stock via buy‑ratio arrangements and timed press releases, then "dump" shares for profit.
- Altomare arranged for 70,000 discounted shares to be issued (to a nominee controlled by the FBI) and coordinated purchases intended to create artificial liquidity; he sought to disguise involvement (handwritten releases, forgivable‑loan guise, issuance to a third party to evade bans).
- Recordings, texts, emails, and Weidenbaum’s testimony captured Altomare describing the scheme and saying they would "pump the shit out of the stock and make money." A jury convicted him of one count of mail fraud and three counts of securities fraud.
- At sentencing the district court applied enhancements for intended loss (+8 levels, estimated ~$75,650) and for sophisticated means (+2 levels), producing an advisory Guidelines range of 30–37 months and imposing 37 months.
Issues
| Issue | Plaintiff's Argument (Gov.) | Defendant's Argument (Altomare) | Held |
|---|---|---|---|
| Sufficiency of evidence for securities and mail fraud | Record (recordings, texts, purchases, Weidenbaum testimony) proves scheme, interstate means, and fraudulent intent | Evidence rests on inferences; statements were puffery or bona fide fundraising; insufficient to prove fraud beyond reasonable doubt | Convictions affirmed: evidence sufficient when viewed in light most favorable to verdict |
| Constructive amendment of the indictment | Indictment charged scheme to manipulate securities; government presented evidence of scheme including 70,000 shares theft as intrinsic to charged theory | Prosecutor shifted theory at trial to convict Altomare for stealing 70,000 shares not alleged in indictment | No constructive amendment; trial evidence matched indictment theory; claim reviewed for plain error and failed |
| Loss calculation for Guidelines (eight‑level enhancement) | Intended loss measured by shares controlled × contemplated per‑share inflation (~75,560 shares × $1 increase ≈ $75,650) supports enhancement | No actual loss; intended‑loss estimate is speculative and overstates foreseeable harm | District court did not err; intended loss can be used and estimate was reasonable (Reifler persuasive) |
| Sophisticated means enhancement (+2 levels) | Multiple concealment steps (nominees, ratio‑buying, handwritten releases, forgivable‑loan scheme) show especially complex execution/concealment | Conduct was routine promotion / fundraising, not sufficiently complex to warrant enhancement | Court did not clearly err; enhancement upheld given overall complexity and concealment efforts |
Key Cases Cited
- Aaron v. Sec. & Exch. Comm’n, 446 U.S. 680 (establishes scienter as element of § 78j/Rule 10b‑5 claims)
- United States v. Reifler, 446 F.3d 65 (2d Cir.) (approves using intended gain from an unexecuted pump‑and‑dump to calculate intended loss under Guidelines)
- United States v. Barrington, 648 F.3d 1178 (discusses standard for district court loss calculations and prohibition on pure speculation)
- United States v. Olano, 507 U.S. 725 (sets standards for plain‑error review)
- United States v. Menichino, 989 F.2d 438 (intended loss may be used for guideline enhancement even if no actual loss occurs)
- Jaffee & Co. v. Sec. & Exch. Comm’n, 446 F.2d 387 (interstate commerce / market facilities can satisfy means element for securities claims)
- United States v. Copeland, 20 F.3d 412 (jury credibility determinations and appellate review standard)
- United States v. Brown, 53 F.3d 312 (disbelieved defendant statements may be considered substantive evidence)