Source: http://www.shortcuts.ws/USCOURT-OF-APPEALS-pitiful-appeal--Thomas-FX-Dunne.htm
Timestamp: 2017-05-25 08:49:33
Document Index: 84205541

Matched Legal Cases: ['§ 3', '§ 3', '§ 3', '§ 3', '§ 2', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3']

Although Gordon’s companies promoted their listings as exclusive collections of leaders in various fields, potential members were actually solicited from ordinary mailing lists. Id. at *6. Worldwide and Sterling often distributed 100,000 letters at a time. The letters informed potential clients of their “nomination” for inclusion in one of the available registries even though most recipients were not nominated. Although at the time the letters were sent, the companies knew nothing about the intended recipients, a typical solicitation letter included language indicating that (i) Worldwide or Sterling was a leading publication of accomplished individuals, (ii) inclusion in the registry was limited to “exceptional” people who were highly successful in their fields, and (iii) inclusion in the registry was without cost to the “nominee.” An enclosed questionnaire encouraged the recipient to “apply” for membership. If the “nominee” responded by filling out a personal information card, telemarketers then contacted the person to conduct a false evaluation interview. During the interview, the marketers read from “pitch sheets” that laid out false and misleading information aimed at encouraging the customer to join and specified fraudulent answers to common questions. Gordon, 1999 U.S. Dist. LEXIS 183, at *6-*7. The marketers stressed the exclusivity of membership and the great networking value membership would provide. “Memberships” were actually sold to anyone wishing to purchase. After completing the interview, Gordon’s sales force would ask the customer to purchase a membership (ranging in price from $75 to $750) and informed the new member of additional “perks” of joining, such as the opportunity to purchase a CD-ROM with registry information, discounts on services from Airborne Express and other providers, and networking seminars.[1] Id. at *7-*8. By the end of 1994, over 60,000 people, swept along by Gordon’s scheme, had become members of the organizations, netting tens of millions of dollars for Gordon’s companies. Gordon v. United States (In re the Seizure of All Funds in Accounts in the Names Registry Publ’g, Inc.), 68 F.3d 577, 578-79 (2d Cir. 1995). Although Gordon claimed that his registries were composed of leaders in the international business community, many actual members were employed outside the big business arenas his promotional materials implied. Among the members of one registry were the manager of a Florida rental car agency, the owner of a Florida Dairy Queen, a nutritionist at a Virginia state prison, a Virginia high school teacher, a Massachusetts candy store owner, the manager of a Connecticut Radio Shack, and the manager of a Pennsylvania department store beauty salon. Notably, the employees of Worldwide and Sterling had no misconceptions about the true nature of the memberships they sold. The Worldwide employee assigned to “review” applications after conclusion of the telephone interviews admitted that she, at Gordon’s instruction, regularly altered members’ job titles so that the members would appear more prestigious in the publication, for example, listing the owner of a business as a “President” with expertise in “Corporate Management,” or a store manager as an “area manager” or “operations manager,” and making even small operations sound like large corporations. Furthermore, while telling potential customers that they, as nominees, were the “creme de la creme” or that the marketers rarely spoke with people who weren’t “multi-billionaires” or “CEO’s”, Gordon’s employees, among themselves, considered it a “running joke” that anyone with a credit card could become a member of one of the registries. At trial, the government presented twenty-three member witnesses who almost uniformly agreed that had they realized that the memberships they were offered were not prestigious, nor had they been nominated by their peers, they would not have been willing to pay for a membership and might not have purchased a membership at all. Even Gordon admitted that the value of his product lay in its appeal to customer egos. B. Gordon’s Financial Activities
The district court grouped Gordon’s mail fraud and tax evasion charges under U.S.S.G. § 3D1.2(c). In its cross-appeal, the government argues that grouping was inappropriate under § 3D1.2(c), but would have been proper under § 3D1.2(d).[2] The government asks this Court to vacate and remand Gordon’s sentence for adjustment under the proper Guidelines subsection. The government’s appeal centers on the appropriate interpretation of U.S.S.G. § 3D1.2 governing grouping of offenses. Section 3D1.2 provides in pertinent part: All counts involving substantially the same harm shall be grouped together into a single Group. Counts involve substantially the same harm within the meaning of this rule:
This Court affirms as harmless error the district court’s refusal to consider potential but unclaimed deductions in the calculation of tax loss under U.S.S.G. § 2T1.1. It vacates and remands, however, the district court’s use of U.S.S.G. § 3D1.2(c) rather than § 3D1.2(d) to group Gordon’s mail fraud and tax counts as challenged in the government’s cross-appeal and orders restructuring of the sentence as set forth in this opinion. The remaining issues on appeal are affirmed by separate order. [1] Notably, although two seminars were initially planned, none actually took place. [2] Notably, the government acknowledged during oral argument that it had abandoned its argument against any grouping on appeal because of its belief that under this Court’s decision in Fitzgerald, such an argument would be untenable. Thus, only the government’s challenge to which grouping provision should have applied remains before this Court. [3] Although the government has not supplied its calculation, it appears likely that it combined the fraud and tax losses, identified the appropriate level for the combined total loss from both the fraud and tax loss tables, added adjustments, including four levels for role in the offense, to each of the levels, and then used level 31, resulting from the tax guideline, because that was higher than level 29, resulting from the fraud guideline. One more level was then added for the money laundering offense, pursuant to § 3D1.4, resulting in an ultimate offense level for Gordon of 32. However, it is not clear that the four-level enhancement for role in the offense (leader of activity involving five or more participants, § 3B1.1(a)) may be applied in determining the offense level for the tax offense. If that enhancement is applied only to the fraud offense (as to which it unquestionably applies), the combined dollar loss would result in level 29 under the fraud guideline and level 27 under the tax guideline; in that event, the level for the group would be 29, and Gordon’s ultimate level, adjusted for the money laundering offense would be 31 (the money laundering offense, the level of which is 25, causes a two-level increase if the level for the combined fraud and tax group is 29, but only a one-level increase if the level for the combined group is 31. See § 3D1.4(a),(b)). We leave for consideration by the district court on remand, after receiving submissions from the parties, how the ultimate offense level should be calculated once the tax and fraud offenses are grouped under subsection (d). [4] Although the concurrence suggests that the government’s objection should have been sufficient to preserve its objection to grouping under § 3D1.2(c) rather than § 3D1.2(d) for appeal, we find the asserted objection to any grouping insufficient to alert the trial court of the need to consider a different grouping mechanism. To find the government’s objection adequate would require this Court to construe an objection seeking “no grouping” to mean “no grouping under subsection (c), but grouping is appropriate under subsection (d).” Even recognizing, as our colleague points out, that this Court has been “indulgent,” __ F.3d at __ (slip op. at 6), in allowing broad readings of sentencing objections, we decline to read the government’s objection to preserve the issue for appeal. [5] A few courts have chosen not to apply plain error review to errors the government raises on appeal when those errors could have been addressed in the district court and do not create a manifestly unjust sentence. See, e.g., United States v. Filker, 972 F.2d 240, 242 (8th Cir. 1992); United States v. Garcia-Pillado, 898 F.2d 36, 39 (5th Cir. 1990), disapproved in part on other grounds, United States v. Calverley, 37 F.3d 160, 163 (5th Cir. 1994).