United States v. Scott
2011 U.S. App. LEXIS 19322
7th Cir.2011Background
- From 2000 to 2009, Scott ran a pyramid scheme involving high-speed printers, defrauding at least 60 investors of about $4.5 million.
- Scott was president and sole owner of Glesco, Inc., and raised $28 million by falsely claiming he bought and resold printers for profit.
- Investors were given fabricated documents, including false purchase orders and promissory notes.
- Scott pled guilty to one count of mail fraud under 18 U.S.C. § 1341 and received a 120-month sentence, well above the calculated guidelines range.
- In the plea agreement, Scott stipulated that the offense warranted a 4-level adjustment for defrauding more than 50 victims under U.S.S.G. § 2B1.1(b)(2)(B).
- The district court accepted the PSR adjustment but concluded that the range did not reflect the long duration and number of transactions; thus, an above-range sentence was imposed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 2B1.1(b)(2)(B) applied | Scott stipulated to >50 victims, supporting the adjustment. | Waived challenge, but even if considered, the count of victims is incorrect. | Waived; district court properly applied the adjustment based on stipulation. |
| Whether the sentence within (or above) the calculated range was reasonable | Within-range sentence was adequate; above-range sentence was unwarranted. | Above-range sentence necessary due to exploitation of victims and long scheme. | Affirmed; district court gave reasons for an above-range sentence based on multiple aggravating factors. |
| Whether victim-loss calculations affected the sentence | Discrepancies in reported losses do not alter the sentencing range due to stipulation and PSR figures. | Loss figures for certain victims were inflated or misrepresented to justify the sentence. | Waived; court relied on restitution figures in the PSR and the stipulation. |
Key Cases Cited
- United States v. Siegler, 272 F.3d 975 (7th Cir. 2001) (waiver when defendant stipulates to facts in a plea agreement)
- United States v. Newman, 148 F.3d 871 (7th Cir. 1998) (waiver effect of stipulations in plea agreements)
- United States v. Serrano-Beauvaix, 400 F.3d 50 (1st Cir. 2005) (plea stipulations can waive challenges to district court reliance on facts)
- United States v. Abbas, 560 F.3d 660 (7th Cir. 2009) (use of PSR restitution figures to determine loss without contradiction)
- United States v. Schlueter, 634 F.3d 965 (7th Cir. 2011) (affirming above-range sentence for substantial fraud against vulnerable victims)
- United States v. Tockes, 530 F.3d 628 (7th Cir. 2008) (above-range sentence for defrauding elderly clients)
- United States v. King, 506 F.3d 532 (7th Cir. 2007) (above-range sentence for misappropriated Katrina relief funds)
- United States v. Leahy, 464 F.3d 773 (7th Cir. 2006) (affirming above-range sentence for long-term duping)