Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca2-14-00270/USCOURTS-ca2-14-00270-0/pdf.json

Parties Involved:
Peter Iovino
Appellant
United States of America
Appellee USA

Document Text:

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

_______________

August Term, 2014

(Argued: January 13, 2015 Decided: February 2, 2015)

Docket No. 14-270

_______________

UNITED STATES OF AMERICA,

Appellee,

—v.—

PETER IOVINO,

Defendant-Appellant.

_______________

Before:

KATZMANN, Chief Judge, KEARSE and RAGGI, Circuit Judges.

_______________

Appeal from a judgment of conviction entered in the United States District 

Court for the Southern District of New York (Vincent L. Briccetti, J.), which 

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sentenced the defendant principally to 60 months’ imprisonment. We conclude 

that the district court properly applied the four-level Sentencing Guidelines 

enhancement for crimes involving more than fifty victims, because Iovino 

defrauded a condominium association whose 70-odd members were 

consequently required to pay higher common charges. Accordingly, the 

judgment of the district court is AFFIRMED.

_______________

ANDREW BAUER (Justin Anderson, on the brief), for Preet Bharara, 

United States Attorney for the Southern District of New York, 

New York, New York, for Appellee.

JEREMY GUTMAN, New York, New York, for Defendant-Appellant.

_______________

PER CURIAM:

This case calls on us to clarify how sentencing courts should count the 

number of victims of a fraud when deciding whether to apply a multiple-victim 

enhancement under section 2B1.1(b)(2) of the U.S. Sentencing Guidelines. 

Appellant Peter Iovino appeals from a judgment of conviction entered on 

January 6, 2014 by the United States District Court for the Southern District of 

New York (Briccetti, J.). Iovino, who was employed as the property manager of a 

condominium association, was charged with one count of wire fraud for

embezzling funds from the condominium association and one count of bank 

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fraud for taking out an unauthorized loan in the condominium association’s 

name. Iovino pleaded guilty to both counts, and was principally sentenced to 60 

months’ imprisonment.

On appeal, Iovino contends that the district court miscalculated his 

Sentencing Guidelines range when it increased his offense level by four levels 

pursuant to United States Sentencing Guidelines § 2B1.1(b)(2)(B), which applies 

to offenses that ‚involve*+ 50 or more victims.‛ Iovino argues that the district 

court erred by finding that each owner of a unit in the condominium (hereinafter 

‚tenant‛) qualified as a victim, rather than just the condominium association 

itself.

Because we conclude that the district court properly counted the 

individual tenants as victims, and therefore properly applied the § 2B1.1(b)(2)(B) 

enhancement, we AFFIRM the judgment and sentence of the district court.

I. BACKGROUND

Beginning in 2000, Peter Iovino was employed as the property manager of 

the Bedford Terrace Condominium Association (‚Bedford Terrace‛), which is 

occupied by more than 70 tenants. As property manager, Iovino was responsible 

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for paying Bedford Terrace’s vendors, managing its finances, and reporting to 

the association’s Board of Managers at the Board’s monthly meetings. Although 

Iovino had access to Bedford Terrace’s bank accounts, he was not allowed to 

withdraw funds without the signed approval of at least two Board members. 

In 2011, the Board discovered that Iovino had taken out an unauthorized 

loan in the name of Bedford Terrace. Further investigation revealed that Iovino 

had also made several unauthorized withdrawals from Bedford Terrace’s bank 

accounts. Iovino concealed his withdrawals by providing the Board with forged 

bank statements that hid the true balance of the accounts. 

Iovino was charged with a single count of wire fraud, based on his 

unauthorized withdrawals from the Bedford Terrace bank accounts, and a single 

count of bank fraud, based on the unauthorized loan. On January 16, 2013, 

Iovino pleaded guilty to both counts. 

As relevant here, the district court quantified the loss caused by Iovino’s 

illicit withdrawals from the Bedford Terrace accounts as $139,292.00. At a Fatico

hearing, the district court heard testimony from the president of Bedford 

Terrace’s Board of Managers, who explained that the bank accounts from which 

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Iovino had stolen were funded by the common charges paid by the tenants of the 

condominium association. The Board president further testified that, after 

Iovino’s fraud was uncovered, Bedford Terrace raised its common charges by 

roughly $100 per month in order to replenish the accounts depleted by Iovino’s 

fraud. Based on this testimony, the district court found that each of the tenants 

of Bedford Terrace had been a victim of Iovino’s fraud because each was forced 

to pay these higher common charges as a result of the theft from the Bedford 

Terrace bank accounts. Accordingly, the district court increased Iovino’s offense 

level by four levels pursuant to United States Sentencing Guidelines 

§ 2B1.1(b)(2)(B), which applies to offenses that ‚involve*+ 50 or more victims.‛ 

II. DISCUSSION

Iovino’s sole argument on appeal is that the district court erred by 

counting each of the individual tenants of Bedford Terrace as a separate victim of 

his fraud. Because Iovino’s argument depends on the Sentencing Guidelines’ 

definition of ‚victim,‛ we begin by reviewing the interlocking provisions of the 

Guidelines. Section 2B1.1(b)(2)(B) of the Sentencing Guidelines instructs 

sentencing courts to increase a defendant’s offense level by four levels when the 

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offense ‚involved 50 or more victims.‛ Application note 1 to § 2B1.1 defines 

‚victim‛ as, inter alia, ‛any person who sustained any part of the actual loss 

determined under subsection (b)(1).‛ ‚*S+ubsection (b)(1),‛ in turn, refers to the 

provision of the Sentencing Guidelines that charges sentencing courts with 

calculating the loss caused by the defendant’s crime, and setting the offense level 

accordingly.1

Because a victim must have sustained part of the ‚actual loss determined 

under subsection (b)(1),‛ U.S. Sentencing Guidelines Manual § 2B1.1 cmt. n.1, we 

have previously held that a victim must have suffered some part of the loss 

actually calculated by the district court. In United States v. Abiodun, 536 F.3d 162 

(2d Cir. 2008), the defendant pleaded guilty to defrauding hundreds of 

individuals by obtaining credit card advances in their names. Although in most 

cases the individuals suffered no direct financial loss because they were 

reimbursed by their banks, the district court nonetheless counted them as victims 

because they ‚had spent an appreciable amount of time securing reimbursement 

for their financial losses.‛ Id. at 166. On appeal, we vacated and remanded, 

 

1 The ‚loss‛ is calculated as ‚the greater of actual loss or intended loss.‛ 

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holding that these individuals had not been properly counted as victims. Id. at 

169. Although the lost time was cognizable as a loss under the Sentencing 

Guidelines, the district court had not quantified the monetary value of this lost 

time when calculating the ‚actual loss‛ caused by the fraud. See id. at 169. 

Instead, the district court had focused solely on the total value of the fraudulent

credit card advances procured by the defendant. See id. at 165. Because the lost 

time was not ‚part of the actual loss determined under subsection (b)(1),‛ U.S.

Sentencing Guidelines Manual § 2B1.1 cmt. n.1, we held that the individual 

account-holders were not victims as defined by the Sentencing Guidelines. 

Abiodun, 536 F.3d at 169.

Similarly, in United States v. Skys, 637 F.3d 146 (2d Cir. 2011), the defendant 

unsuccessfully attempted to defraud several banks by falsely representing that his 

business owned substantial assets, and by seeking to take out an 83 million dollar 

loan secured against those assets. The defendant was charged with securities, 

bank, and wire fraud after his deception was discovered. At sentencing, the 

district court considered evidence that the defendant had also perpetrated several 

 

U.S. Sentencing Guidelines Manual § 2B1.1 cmt. n.3(A).

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other, uncharged frauds. The district court calculated the ‚intended loss‛ of the 

fraud as $83 million, the size of the loan the defendant attempted to procure from 

Citigroup; the district court did not calculate the ‚actual loss‛ caused by the 

defendant’s various frauds. See id. at 153—55. Nonetheless, the district court 

counted both the banks and the targets of the uncharged frauds as victims under 

the Sentencing Guidelines. Id.

Again, we remanded. Citing Abiodun, we explained that ‚‘victims,’ within 

the meaning of subsection (b)(2), are only those persons or entities who sustained 

‘actual loss determined’ by the court ‘under subsection (b)(1).’‛ Id. at 153. 

Because the district court had not calculated the actual loss caused by the 

defendant’s schemes, the banks and targets of the uncharged frauds could not 

have suffered a ‚part of the actual loss determined under subsection (b)(1).‛ Id. at 

154-55. Accordingly, we remanded to the district court to calculate the actual loss 

caused by the defendant’s frauds and, if necessary, to recount the number of 

victims who had suffered part of this actual loss. Id. at 155—56.

Relying on Abiodun and Skys, Iovino argues that the district court erred by 

counting the individual tenants of Bedford Terrace as victims. As relevant here, 

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the district court calculated that the actual loss caused by Iovino’s theft was 

$139,292.00, the amount that Iovino withdrew from the condominium 

association’s bank accounts. Because this amount was taken from Bedford 

Terrace’s accounts, Iovino contends that the only person or entity that ‚sustained

. . . part of the actual loss determined‛ by the district court was Bedford Terrace 

itself. Although Iovino acknowledges that the individual tenants had to pay 

higher common charges as a result of his theft, he argues that these higher 

common charges were not included in the actual loss calculated by the district 

court. Accordingly, he reasons, the individual tenants do not qualify as victims 

under the reasoning of Abiodun and Skys.

Iovino’s argument is without merit. The district court found—and Iovino 

does not dispute—that Bedford Terrace increased its common charges because it 

needed to ‚replenish‛ the bank accounts depleted by Iovino’s fraud. Appellant’s 

App. 72. The individual tenants therefore sustained actual, out-of-pocket losses 

when they were required to pay these higher charges as a result of Iovino’s fraud. 

Moreover, these losses were ‚part of the actual loss determined under subsection 

(b)(1)‛ because, as the district court found, the higher common charges directly 

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replaced the funds that Iovino had stolen from the condominium association’s 

bank accounts. 

This case is thus distinguishable from Abiodun and Skys, both of which

involved victims who had suffered ‚losses‛ entirely separate from the losses that 

the district court ‚determined under subsection (b)(1).‛ In Abiodun, the district 

court focused on the strictly financial loss caused by the defendants’ fraud. But it 

did not include in its calculation the monetary value of the time the individuals 

expended to secure reimbursement from the banks. Had it done so, adding the 

value of the individuals’ lost time would have increased the total actual loss, and 

the individual victims would therefore have qualified as victims. And the district 

court in Skys did not calculate any actual loss at all, instead relying solely on the 

‚intended loss‛ of the defendant’s scheme. 

Here, by contrast, Iovino concedes, as he must, that the district court 

correctly totaled the actual loss as $139,292.00, the amount that Iovino stole from 

the Bedford Terrace accounts. The individual tenants paid higher common 

charges to replenish these accounts. But this replenishment does not change the 

‚actual loss‛ caused by Iovino’s fraud. Instead, every dollar paid by a tenant in 

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the form of higher common charges was one dollar reimbursed to Bedford 

Terrace. As such, the total loss—the sum of the increased common charges paid 

by the individual tenants and the loss absorbed by Bedford Terrace to the extent 

that the tenants have not fully replenished the accounts—remains $139,292.00.

And while Iovino is right that the district court did not calculate this amount by 

totaling up the higher common charges paid by the individual tenants, the district 

court nonetheless correctly measured the loss collectively sustained by Bedford 

Terrace and the individual tenants.

Because it is undisputed that the tenants paid higher common charges to 

replenish the association’s depleted bank accounts, the individual tenants 

‚sustained *a+ part of the actual loss determined under subsection (b)(1),‛ and 

were properly counted as victims.2 Accordingly, the judgment and sentence of the 

district court are hereby AFFIRMED.

 

2 The government urges us to find that the individual tenants qualify as 

victims because they suffered a loss based on their shared interest in the money 

Iovino stole from the Bedford Terrace bank accounts. Because the tenants here 

sustained direct, out-of-pocket losses when they were forced to pay higher 

common charges, we do not reach this argument.

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