[NOT FOR PUBLICATION--NOT TO BE CITED AS PRECEDENT]



# United Stat es Court of Appeals

For the First C ircuit

No. 01-1819 UNITED STATES, Appellee,

v. TODD J. LASCOLA, Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND [Hon. Mary M. Lisi, U.S. District Judge ]

Before Boudin, Chief Judge , Torruella and Howard, Circuit Judges .

Todd J. Lascola on brief pro se. Margaret E. Curran , United States Attorney, Donald C. Lockhart , Assistant Uni ted States Attorney, and Ira Belkin , Assistant United States Attorney, on brief for appellee.

September 3, 2002-2- Per Curiam . Todd J. LaScola, a licensed stockbroker, pledguilty to nine counts of a 55 count indi ctment, alleging mail fraud, 18 U.S.C. §1341, wire fraud, 18 U.S.C. § 1343, and embezzlement, 18 U.S.C. § 664. His crimes com pri sed several scheme s i nvolving two companies in which he was engaged, CPA Advisors Network ("CPA") a nd CP I Investment Management, Inc. ("CPI"). LaScol a w as sentenced to 96 months imprisonment, three years supervised rel eas e, and restitution of approximately $8.1 million dollars. He chal lenges several of the sentencing guideline calculations. We affirm.

As an initial matter, LaScola makes an Apprendi type argument, see Apprendi v. New Jersey , 530 U.S. 466 (2000), asserti ng that none of the upward adjustments (apart from minimal planning) was authorized because none was specifically mentionedin the indictment or in the plea agreement. This

a rgume nt was not raised in the district court and, thus, is subject to the plain error standard. There was no erro r, let alone plain error. Apprendi does not apply to guideline findings t hat increase the sentence but do not elevate it beyondthe statutory maximum. United States v. Caba , 241 F.3d 98, 101 (1st Cir. 2001). The statutory maximum for each count of conviction was five years. LaScola received a 60 month term of imprisonm ent on Count 1 (mail fraud) and concurrent 36 months imprisonment on the remaining eight counts to be served consecutive to the 6 0 month term imposed on Count 1 (for a total term of 96 months).1 We refer to the November 2000 Sentencing Guidelines. LaScola

didnot object to the use of this version in the district court. On appeal, he refers to the November 1998 version of the Guidelines, contending that "[e]xcept for clarifications, the Guidelines in effect as of the last date of criminal activity, in this case 1998 Guidelines, are to be used." Reply brief at p.15, n .1. In fa ct, however, "[b]arring any ex post facto problem, a defendant is to be punished according to the guidelines in effect at the time of sentencing." United States v. Harotunian , 920 F.2d 1040, 1041-42 (1st Cir. 1990). In any event, for purposes of this case, there is no dispositive distinction between the 1998 and 2000 versions. We note that, effective November 2001, the Sentencing Commission deleted the separate fraud guideline (§2F.1), consolidating it with the theft guideline (§2B1.1), and resulting in a completely rewritten §2B1.1. We use the former designations of §2F1.1. -3- §2F1.1(b)(1) - Amount of loss 1

The Presentence Report ("PSR") calcu lat ed that the total loss amount genera ted by LaScola's criminal conduct was between $5 and $10 million dollars andthus proposed a 14 level increase in the base offense level. See §2F1.1(b)( 1)(O) . In the district court, LaScola argued that the appropriate amount of loss was between $2.5 and $5 million dollars, reflecting a 13 , r ather than 14, level increase. See §2F.1.1(b)(1)(N). LaS cola argued that he did not pocket the $6 million obtai ne d from the CPA clients to "purchase" the RBG Notes from Local 99's Plan and that he did not intend the loss to the CPA clients. Rather, he hoped that the RBG Notes would mature and arguedthat, in fact, th ere w as still some value to these Notes. He analogized to f rau dulent loan cases and suggested that, just as the value o f the assets pledged to secure a fraudulent loan reduces the amount of loss in a fraudulent loan2 He relies on purported property appraisals of the real estate

developments supported by the RBG Notes, the worthiness of which is unknown, and, more importantly, are not properly before this court as they are not part of the district court record. -4- case, so too the "value" of t he RBG Notes should reduce the

amoun t of loss attributed to his conduct. The court rejected that assessment, instead calculating the loss as the amount of money that LaS cola i mproperly transferred from the various accounts -- well in excess of $5 million -- and concluding that LaScola's purported expectation that the Notes would mature was irrelevant.

"We review the district court's interpretation of the loss provisions of the Guidelines de novo and review its factual findings only for clear error." United Sta tes v. Blastos , 258 F.3d 25, 30 (1st C ir. 2001). On appeal, LaScola contends that, although he was convicted of fr aud , the court erroneously treated his conduct as a theft to determine the amount of loss. There was no err or. The commentary to the fraudguideline itself provides for such cross-reference. See U.S.S.G. §2F1.1, comment. (n.8). Further, LaScola continues to assert that his case is analogous to a fraudulent loan case and thus he should be credited with the "value" of the RBG Notes to offset an y loss to his victims. Amazingly, although LaScola concededin the district c ourt that the loss was $2.5 and $5 million, he now c ont ends on appeal that the net loss to the victims was $0. 2 "The Guidelines recogn ize loan fraud as a specific exception to the usual methods of calculating loss set-5-

forth in §§2F1.1 and 2B1.1." United States v. Stein , 233 F.3d 6, 1 8 n.8 (1st Cir. 2000), cert. denied , 532 U.S. 943 (2001). LaScola's attempt to mark his scheme as analogous to loan fraud is a grievous misfit. There was no error in the d istrict court's rejection of the attempt. §2F1.1(b)(6)(C) - Sophisticated means

In the district court, LaScola argued that there was significant overlap betwee n the "more than minimal planning" adjustment, §2F1.1(b)(2)(A), and the "sophisticated means" adjust ment, §2F1.1(b)(6)(C), such that it amounted to double counting. LaScola did not renew this contention in his initial appellate b rief an d the government contends that he has abandonedthat argument. LaScola tardily attempts to resurrect this double counting argument in his r eply brief but, as we have repeatedly stated, "a legal argument made fo r the first time in an appellant's reply brief comes too late andneed not be addressed." United States v. Brennan , 994 F.2d 918, 922 n.7 (1st Cir. 1993).

On appeal, LaScola contends that the di s trict court determinedthat the "sophisticatedme ans" adjustment was warrantedbecause he used a computer system to exe cute h is crimes andargues that this was error because operation of the computer program took little skill or training. LaS cola a lso argues that the computer software was usedsimply to carry out the fraud and not to conc eal it and, in fact, its use insured the detection of the fraud because it would reveal the accounts3 LaScola contends that the district court "erred" in stating

that he "took" the passwords. LaScola says that he did not take the passwords; rather, he says, he instructed an employee with the passwordto execute the transaction. This is a meaningless quibble. -6- affected, by how much, and to where the missing funds had been sent. LaScola's description of the basis of the court's ruling is deliberately myopic. The district court found the application of the "sophisticated means" adj ustment was warrantednot because LaScola useda computer system but because he not only stole the existing funds from CPA clients' accounts but converted those accounts to margin ac cou nts, giving him the ability to borrow additional money in the clients' names . 3 The e mphasis and impetus for the finding of "sophisticatedmeans" was not, as LaS cola portrays it, on the

use of a computer system itself but on how LaS cola used that systemin executing the offense by accessing his clients' accounts and converting them to margin accounts enabling himto steal more than the existing funds. There was no error either in the court's factu al fi nding or in its application of the sophisticat ed mean s adjustment. See United States v. Humber , 255 F.3d at 1308, 1311 (11th Cir. 2001) (reciting standard of review). §2F1.1(b)(8)(A) - Failure of a financial institution

In the district court, LaScola argued against t he application of this guideline on th e gro und that both CPI and CPA were pu rely sales organizations that, although may have-7-

facilitatedtrades, never actually e xec uted trades nor custo diedassets resulting from such trades. He argued for a distinction between an "introducing broker" which has a limited capacity to perform functions and a "clearing broker" which is the custodian of securities and can clear and settle trades in

a client's accounts. According to LaScola, CPI simply managed assets and CPA simply processed tr ansact ions, relying upon Wexford(the subsidiary of Prudential Sec u rities), Fleet Bank and o ther financial institutions to execute trades or cust od y assets and those financial institutions, argued La Sco la, remainedsafe, soundand solvent. The district court concluded that both CPI and CPA met the guideline definition of financial institution and became i nsolven t as a result of LaScola's conduct. I t rejected LaScola's distinction between "introducing broker" and "clearing broker" as unavailing i n light of the clear language of the guideline definition . Se e U.S.S.G. §2F1.1, comment. (n.19).

On appeal, LaScola renews his argument but p rovides

no persuasive authority. There was no error in the application of this guideline adjustment. See United States v. Ferrarini , 219 F.3d145, 159 (2d Cir. 2000) (reciting standard of review), cert. denied , 532 U.S. 1037 (2001). §3A1.1(b)(1) - Vulnerable victim

At sentencing, LaScola withdrew any objection to the application of the vulner able vi ctim adjustment. LaScola was personally questioned by t he district court as to whether he-8-

u nderstoodthat he was waiving his right to challeng e tha t adjustment andhe replied in the affirmative and stated that he hadno questions about his waiver. Sentencing Tr. of 5/22/01 at p.5. Nonetheless, LaScola, on appea l, now argues that the application of this guideline was error. This challenge is waived. See United States v. Ciocca , 106 F.3d 1079, 1085 (1st Cir. 1997) (refusing to review waived issue). Departure At sentencing, LaScola made an oral motion for departure, arguing that the resulting guideline senten cin g range of 87 to 108 months was far in excess of the sentences imposedin other fraud cases in the districts of Rhod e Island andMassac husetts . In support, he proffered information he apparently had obtained simply from the face of the c our t dockets, i.e., docket numbers, term of impriso nment imposed, andamount of restit ution ordered. He conceded that he was

unaware of whether adjustm ent factors, such as vulnerable victimand/or sophisticatedmeans, were applied in these cases. The district court rejected La Sc ola's proffered material as insufficient to find that his case lay outside the heartland of cases and denied a downward departure.

On appeal, LaScola reiterates his downward departure argument, albeit in the guise of a "heartland argume nt," b ut,

a s w e have repeatedly held, a district court's refusal to depart downwardis not reviewable unless basedon a mistake of law. See United States v. Bunnell , 280 F. 3d 46, 50 (1st Cir.-9-

2002). There was none here. The d istrict court recited the p roper standard for finding a departure but found La Scola' s proffer insufficient to support one. Moreover , w e have held "the fact that the national median for a broadly stated offense type may be above or below a particular defendant's GSR cannot be usedto j ustify a sentencing departure." United States v. Martin , 221 F.3d 52, 57 (1st Cir. 2000).

The judgment of the district court is affirmed .