Defendant was found guilty of intentionally defrauding Binary Traders (“Binary”), an 1

options trading firm, of approximately $2.8 million in 1999. Binary bought and sold stock through D&D

Securities, a company that trades on the floor of the Philadelphia Stock Exchange (PHLX). Defendant

was employed by D&D as a stock execution clerk, and handled Binary’s stock orders. During this time,

Defendant also worked as a trader for Bearcat, another PHLX company. Defendant was stationed on the

floor of the PHLX, where he took “buy and sell” orders from Binary’s traders. 

Prior to the hearing, the parties filed supplemental sentencing memoranda. 2

Indeed, the Court expressly noted: “We are in the process of considering the 3553(a) 3

factors, and the question whether [letters submitted from family and friends] are relevant to the issue of

1

IN THE UNITED STATES COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA :

: CRIMINAL ACTION 

v. :

: NO. 04-66

SALVATORE DIAMBROSIO :

MEMORANDUM

Kauffman, J. March 13, 2008

On March 11, 2005, a jury convicted Defendant Salvatore DiAmbrosio of ten counts of

wire fraud. On June 8, 2005, this Court sentenced Defendant to five years of probation, 1

including a one-year term of home confinement, $2.1 million in restitution, and a $1,000 special

assessment. The Government appealed, and on October 24, 2007, the Third Circuit vacated the

sentence and remanded for resentencing. In compliance with the Third Circuit’s directive, on

January 15, 2008, the Court held a resentencing hearing. 

2

I. Background

The original sentencing hearing, held on June 8, 2005, lasted over three hours. The Court

heard lengthy arguments from counsel for the Government and for Defendant regarding the

advisory Guidelines and relevant 18 U.S.C. § 3553(a) factors. The Government sought sentence 3

Case 2:04-cr-00066-BWK Document 76 Filed 03/17/08 Page 1 of 11
rehabilitation and protection of the public, and some of the other factors of 3553(a).” June 8, 2005

Hearing Transcript, at 51. 

The Government did not appeal the Court’s denial of the enhancements for abuse of

4

trust/use of special skill, and affecting a financial institution.

At no time during the June 8, 2005 hearing was it suggested by anyone that Defendant in 5

any way cooperated with the Government in the investigation and prosecution of others. The transcript

of the over three-hour hearing is totally devoid of any such language. A clerical error in the judgment

order did include (in brackets) a reference to the investigation and prosecution of others. See October 25,

2007 Memorandum from Deputy Clerk to Judge Kauffman (“Upon review of the Judgement of Sentence

in the above-referenced matter, I noticed a clerical error in the ‘Statement of Reasons’ section of the

Judgment. The bracketed section, which reads ‘as well as his substantial cooperation with the

government in the investigation and prosecution of others’ was included in error, and does not accurately

reflect your statements in court.”). Instead of alerting the Court to this obvious clerical error, the

Government chose to state in its appellate briefs “the Court entered the written judgment, which included

language stating that the sentence was imposed, in part, because DiAmbrosio cooperated with the

Government in the investigation and prosecution of others, which is not true.” App. Brief. at 7. The

Government’s characterization, which led the Third Circuit to conclude that this Court acted “in true

boilerplate fashion,” misstates the Court’s thorough process in imposing the sentence, as indisputably

reflected in the hearing transcript. At no time during the sentencing process did the Court ever factor

into its sentencing consideration any non-existent cooperation of Defendant with the Government, and

the transcript of the June 8, 2005 hearing is unambiguously clear on this point. 

2

enhancements for obstruction of justice, abuse of trust/use of special skill, and affecting a

financial institution. This Court declined to apply the enhancements, and concluded that the

applicable offense level was 21. On appeal, the Third Circuit determined that the Court erred in

refusing to impose the obstruction of justice enhancement. The Opinion directed the Court to 4

recalculate the applicable Sentencing Guidelines range, fully consider the sentencing factors set

forth in 18 U.S.C. § 3553(a), and specifically state the reasons that support the sentencing

determination in order to permit review for reasonableness. 

5

II. Legal Standard

In a recent decision, Gall v. United States, 128 S. Ct. 586 (2007), the Supreme Court

explicitly rejected the notion that a sentence outside the Guidelines range is presumptively

unreasonable, or that a departure from the Guidelines must be justified by “extraordinary”

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3

circumstances:

We reject, however, an appellate rule that requires ‘extraordinary’ circumstances to

justify a sentence outside the Guidelines range. We also reject the use of a rigid

mathematical formula that uses the percentage of a departure as the standard for

determining the strength of the justifications required for a specific sentence. As an

initial matter, the approaches we reject come too close to creating an impermissible

presumption of unreasonableness for sentences outside the Guidelines range. Even the

Government has acknowledged that such a presumption would not be consistent with

Booker. 

Id. at 595. 

The Gall Court instructed that a district court should begin all sentencing proceedings by

correctly calculating the applicable Guidelines range. Id. at 596. Next, the court must give both

parties “an opportunity to argue for whatever sentence they deem appropriate.” Id. After

hearing from the parties, the district judge must consider the § 3553(a) factors “to determine

whether they support the sentence requested by a party.” Id. The more significant the deviation

from the Sentencing Guidelines, the more substantial the justification must be. Id. at 597 (“[W]e

find it uncontroversial that a major departure should be supported by a more significant

justification than a minor one.”). After determining the appropriate sentence, the district judge

must adequately explain the chosen sentence to allow for meaningful appellate review. Id. 

In another recent decision, Kimbrough v. United States, 128 S. Ct. 558 (2007), the

Supreme Court held that the crack and powder cocaine ratio is advisory, and district courts are

free to deviate from the cocaine Sentencing Guidelines. As the Court explained, “[a] district

judge must include the Guidelines range in the array of factors warranting consideration. The

judge may determine, however, that in the particular case, a within-Guidelines sentence is

‘greater than necessary’ to serve the objectives of sentencing.” Id. at 564. The Court instructed

Case 2:04-cr-00066-BWK Document 76 Filed 03/17/08 Page 3 of 11
The Dunnigan Court recognized that not every defendant whose testimony is rejected by 6

the jury will incur a perjury enhancement:

A witness testifying under oath or affirmation violates this statute if she gives false testimony

concerning a material matter with the willful intent to provide false testimony ... As we have just

observed, an accused may give inaccurate testimony due to confusion, mistake, or faulty

memory. In other instances, an accused may testify to matters such as lack of capacity, insanity,

duress, or self-defense. Her testimony may be truthful, but the jury may nonetheless find the

testimony insufficient to excuse criminal liability or prove lack of intent. 

4

that “district courts must treat the Guidelines as the starting point and the initial benchmark,” but

recognized that the sentencing judge has “greater familiarity with the individual case and the

individual defendant before him than the [sentencing] commission or the appeals court,” and is

therefore “in a superior position to find facts and judge their import under § 3553(a) in each

particular case.” Id. at 574. 

III. Discussion

A. Advisory Guidelines Range

The Government has withdrawn its request for enhancements on the basis of abuse of

position of trust and affecting a financial institution. The only enhancement requested at this

time is a two-level upward adjustment for obstruction of justice. In United States v. Dunnigan,

507 U.S. 87 (1993), the Supreme Court rejected a constitutional challenge to 

U.S.S.G. § 3C1.1, which provides, “If the defendant willfully impeded or obstructed, or

attempted to impede or obstruct the administration of justice during the investigation or

prosecution of the instant offense, [the court shall] increase the [defendant's] offense level by 2

levels.” See Dunnigan, 507 U.S. at 98; United States v. Williamson, 154 F.3d 504, 506 (3d Cir.

1998) (same). The burden of proof applicable to the enhancement is preponderance of the

evidence. United States v. Kim, 27 F.3d 947, 961 (3d Cir. 1994).6

Case 2:04-cr-00066-BWK Document 76 Filed 03/17/08 Page 4 of 11
Dunnigan, 507 U.S. at 95. None of the circumstances discussed by the Dunnigan Court are present in

this case. 

5

At trial, Defendant testified that the stock trades in question had been authorized by Dan

Bigelow, president of Binary, and that therefore he had not defrauded the company. Because the

jury concluded that Defendant intentionally defrauded Binary, and because intent is a necessary

element of the offense of which he was convicted, Defendant’s testimony that the stock trades

were authorized cannot be reconciled with the jury verdict. See United States v. Boggi, 74 F.3d

470, 478-79 (3d Cir. 1996) (affirming the application of the perjury enhancement after

concluding that “in convicting [the defendant], the jury necessarily rejected his testimony that he

was innocent of the extortion offenses charged. In sentencing [the defendant], the district court

properly considered this fact and properly reasoned that a guilty verdict, not set aside, binds the

sentencing court to accept the facts necessarily implicit in the verdict.”); United States v. Gricco,

277 F.3d 339, 362 (3d Cir. 2002); United States v. Ortiz, 91 Fed. Appx. 224, 225-26 (3d Cir.

2004) (holding that the enhancement was appropriate because “[Defendant’s] claim that his

testimony was not perjurious is belied by the record, which indicates that, in convicting

[Defendant], the jury necessarily rejected his testimony that he was not involved in the crime, and

credited the testimony of three witnesses who testified to the contrary.”); United States v.

Freeman, 139 F. Supp. 2d 1364, 1373 (S.D. Fla. 2001) (explaining that a “guilty verdict requires

the sentencing judge to accept facts necessarily implicit in the verdict”).

Accordingly, a two-level obstruction of justice enhancement is mandatory pursuant to

Dunnigan and Williamson. See DiAmbrosio, No. 05-3317, Slip Op. at 5 (3d Cir. Oct. 24, 2007)

(noting that a two-level enhancement for obstruction of justice is “specifically required by the

Case 2:04-cr-00066-BWK Document 76 Filed 03/17/08 Page 5 of 11
Defendant acknowledges that the two-level enhancement is mandatory. See Defendant’s 7

Sentencing Memorandum (docket no. 68), at 5. The parties are in agreement as to the relevant advisory

Sentencing Guidelines range.

On January 4, 2008, the Probation Officer, Christine Rennie, submitted a case update to 8

the Court reporting on DiAmbrosio’s compliance with the terms of his probation. She reported that

DiAmbrosio completed his twelve-month term of home confinement without incident on July 17, 2006.

6

Guidelines”). With a criminal history category of I and an adjusted offense level of 23, the

advisory Sentencing Guidelines range applicable to this case is 46-57 months of imprisonment.7

B. The § 3553(a) Factors

Section 3553(a) requires the Court to impose a sentence “sufficient, but not greater than

necessary,” to reflect the seriousness of the offense, to promote respect for the law, to provide

just punishment for the offense, to afford adequate deterrence to the criminal conduct, to protect

the public, and to provide the defendant with needed educational and vocational training or other

correctional treatment. 

1. The nature of the offense

Defendant was found guilty of intentionally defrauding Binary of approximately $2.8

million in 1999. The illegal conduct lasted from April to September 1999, and was completely

non-violent. In mitigation of his offense, Defendant paid federal income taxes on his illicit gains,

which significantly reduced his profits. See Presentence Report, Recommendation, at 1. 

2. Defendant’s history and characteristics

The conduct for which Defendant was convicted represents a marked exception to an

otherwise law-abiding life. Defendant had no prior criminal history. Moreover, his post-offense

record has been virtually unblemished. See January 15, 2008 Hearing Transcript, at 31-34.8

Case 2:04-cr-00066-BWK Document 76 Filed 03/17/08 Page 6 of 11
On August 10, 2006, it was discovered that DiAmbrosio had fallen behind in his restitution payments and

applied for a credit card without the permission of the Probation Office. Since that time, he has been in

full compliance with the terms of probation, and the Probation Office is in the process of transferring his

supervision to its Low Intensity Caseload, designed for offenders who are compliant and pose a minimal

risk of recidivism. See January 4, 2008 Case Update. 

A few significant quotations: “Sal is someone I would trust my life with, and anyone 9

who knows him would say the same thing. Sal is a great family man whose three children worship and

adore him.” “My son is a good man, a good father, and a good son.” “Family always comes first with

him. The love he has for his children is unbelievable. The children love him so much and depend on him

financially and for support and love ... Little Sal has ADHD and it was Sal that kept taking him back to

the doctor until they could get him on the proper dosage of medicine ...” The Court also received a letter

from his former lawyers, C. Clark Hodgson and Patricia Casperson, of the firm of Stradley Ronon. The

letter stated, in relevant part: “Beginning with the SEC’s investigation [DiAmbrosio] has experienced

dramatic and life changing events in his personal life, including, of course, the loss of his job, loss of any

opportunity to work in the securities industry, loss of friends, and a divorce ... He is not a person for

whom incarceration is either desirable or necessary. Mr. DiAmbrosio is a devoted father and primary

source of financial support for three young children. He has certainly learned an extremely difficult and

punishing lesson ...” Another letter was received from Andrew Micklin, an attorney practicing in New

Jersey, whose wife is DiAmbrosio’s cousin. The letter states, in relevant part: “when considering Sal’s

sentence I urge your Honor to consider all victims, including the innocent ones. Sal’s children are in

need of their father more than words can describe.” 

7

Defendant has strong family and community ties, as evidenced by the numerous letters submitted

to the Court on his behalf from family, friends and colleagues, praising his character and

devotion to his family. He is the father of three young children. He shares custody of two of his 9

children with his former wife, and is raising his third child with his current wife. Defendant has

a history of consistent employment and unwavering emotional and financial support of his

family. See January 15, 2008 Hearing Transcript, at 38-43. Similarly, in a recent opinion, the

Fourth Circuit upheld a thirty-six-month downward departure from the Sentencing Guidelines on

the basis of such factors as devotion to family and profession, loss of teaching certificate and

state pension, potential for rehabilitation, and a low chance of recidivism. See United States v.

Pauley, 511 F.3d 468 (4th Cir. 2007). 

3. The need for the sentence imposed 

Case 2:04-cr-00066-BWK Document 76 Filed 03/17/08 Page 7 of 11
Moreover, under the circumstances, a sentence of incarceration would not promote

10

respect for the law, but may accomplish the opposite result. See Gall, 128 S. Ct. at 599 (“[A] sentence of

imprisonment may work to promote not respect, but derision, of the law if the law is viewed as merely a

means to dispense harsh punishment without taking into account the real conduct and circumstances

involved in sentencing.”).

Although certain offender characteristics are taken into account in the advisory

11

guidelines range, “[i]f Booker means anything at all, it must mean that the court was permitted to give

further weight to a factor covered by a specific guidelines adjustment, especially where ... that factor ... in

some other way makes the case different from the ordinary case where the factor is present.” United

States v. Wachowiak, 496 F.3d 744, 753 (7th Cir. 2007). 

8

Section 3553(a)(2) requires the Court to impose a sentence that reflects the seriousness of

the offense, promotes respect for the law, and provides just punishment for the offense. It also

requires the Court to fashion a sentence that affords adequate deterrence and protects the public

from future crimes of the defendant. The Court is mindful of the seriousness of the offense and

the substantial financial losses incurred by Binary as a result of Defendant’s actions. However,

having examined the individual characteristics of Defendant, the Court is persuaded that a

sentence of incarceration would be greater than necessary to promote the purposes set forth in §

3553(a). Defendant already has paid a heavy price for his offense. He has lost his job, is forever

barred from the securities industry, was fined $1 million by the Philadelphia Stock Exchange,

and has a $2.1 million restitution obligation. In addition, Defendant was divorced and as a result,

lost daily contact with two of his children, one of whom suffers from ADHD. See January 15,

2008 Hearing Transcript, at 38-40. There is no evidence that Defendant is violent or that he

poses any danger to the community. See January 15, 2008 Hearing Transcript, at 45-46. A

sentence of incarceration would have an exceptionally adverse effect on Defendant’s family, and

particularly his three young children, who are dependent on him.10

The Court affords substantial weight to Defendant’s post-offense rehabilitation.11

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9

Defendant’s ability to remain crime-free for over eight years since the misconduct is a

manifestation of his self-rehabilitation, and demonstrates both that he is unlikely to engage in

future criminal activity and that he is not a danger to the public. See Gall, 128 S. Ct. at 600

(“The District Court quite reasonably attached great weight to Gall’s self-motivated

rehabilitation, which was undertaken not at the direction of, or under supervision by, any court,

but on his own initiative. This also lends strong support to the conclusion that imprisonment was

not necessary to deter Gall from engaging in future criminal conduct or to protect the public from

his future criminal acts.”); see January 15, 2008 Hearing Transcript, at 45-46 (“THE COURT: I

think you have established that other than the serious ... aberrational conduct during the period in

1999 when he was guilty of the acts which the jury found him guilty of, he has a clear record, and

subsequent to ending that conduct, he had a completely clear record, which helps according to

the language of Gall to establish that he has self-rehabilitated and that that helps to satisfy both

the deterrence and the protection of the public considerations or factors of 3553(a).”). 

4. The kinds of sentences available

Section 3553(a)(3) requires the Court to consider the kinds of sentences available,

including non-incarcerative alternatives. See Gall, 128 S. Ct. at 602 (“The Guidelines are only

one of the factors to consider when imposing [a] sentence, and § 3553(a)(3) directs the judge to

consider sentences other than imprisonment.”). In the instant case, a sentence of probation

including a one-year term of home confinement with electronic monitoring and restitution in the

amount of $2.1 million would provide just punishment for the offenses and is a viable alternative

to imprisonment that would adequately achieve the goals of Section 3553(a). As the Gall Court

observed, a probationary sentence is “not granted out of a spirit of leniency:” 

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10

We recognize that custodial sentences are qualitatively more severe than probationary

sentences of equivalent terms. Offenders on probation are nonetheless subject to several

standard conditions that substantially restrict their liberty. See United States v. Knights,

534 U.S. 112, 119 (2001) (“Inherent in the very nature of probation is that probationers do

not enjoy the absolute liberty to which every citizen is entitled.”). Probationers may not

leave the judicial district, move, or change jobs without notifying, and in some cases

receiving permission from, their probation officer or the court. They must report regularly

to their probation officer, permit unannounced visits to their homes, refrain from

associating with any person convicted of a felony, and refrain from excessive drinking. 

Most probationers are also subject to individual “special conditions” imposed by the court.

Gall, 128 S. Ct. at 595-96 (citations omitted); see also January 15, 2008 Hearing Transcript, at 21. 

Having considered the types of sentences available, the Court is persuaded that a sentence of five

years probation including a one-year term of home confinement with electronic monitoring and

restitution in the amount of $2.1 million is sufficient, but not greater than necessary, to

accomplish the goals of sentencing, including deterrence and protection of the public. A

probationary sentence would significantly limit Defendant’s liberty and impose restrictions on his

activities while allowing him to continue supporting his family and paying his substantial

restitution obligation.

5. The Need to Avoid Unwarranted Sentencing Disparities

The Government urges the Court to avoid a substantial departure from the advisory

Guidelines, arguing that it would create unwarranted sentencing disparities. The Court addressed

a similar Government concern in Kimbrough. While stressing that sentencing uniformity

“remains an important goal of sentencing,” the Court noted that “some departures from uniformity

[are] a necessary cost of the remedy.” Kimbrough, 128 S. Ct. at 574. Thus, while the imposition

of a probationary sentence may result in a sentencing disparity, the Supreme Court has recognized

this as an inevitable consequence of Booker. 

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11

6. The Need to Provide Restitution to Victims

A non-incarcerative sentence will enable Defendant to continue making payments on his

$2.1 million restitution obligation. See January 15, 2008 Hearing Transcript, at 42.

IV. Conclusion

For the foregoing reasons, the Court concludes that under the particular circumstances of

this case, a sentence of five years probation including a one-year term of home confinement with

electronic monitoring and a restitution obligation of $2.1 million would provide just punishment

sufficient, but not greater than necessary, to reflect the seriousness of the offenses and to afford

adequate deterrence, protection of the public and respect for the law. The Court’s previouslyimposed Order regarding conditions of probation, restitution and special assessment shall remain

in effect. An appropriate judgment order will follow. 

BY THE COURT:

_S/ BRUCE W. KAUFFMAN__ 

BRUCE W. KAUFFMAN, J.

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