Court Opinion

ID: 181482
Source: CourtListenerOpinion
Date Created: 2010-12-21 17:44:38+00
Date Added: 2024-06-11T17:25:55.643627
License: Public Domain

NOT PRECEDENTIAL
                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                                _____________

                                    No. 09-2628
                                   _____________

                          UNITED STATES OF AMERICA

                                          v.

                                 RAFAEL ROMERO
                                    aka known as
                                  RALPH ROMERO

                                       Rafael Romero,
                                               Appellant
                                  _______________

                   On Appeal from the United States District Court
                             for the District of New Jersey
                              (D.C. No. 07-cr-00910-001)
                   District Judge: Hon. Joseph A. Greenaway, Jr.
                                   _______________

                      Submitted Under Third Circuit LAR 34.1(a)
                                 December 16, 2010

      Before: JORDAN, HARDIMAN and VAN ANTWERPEN, Circuit Judges.

                             (Filed December 21, 2010 )
                                  _______________

                             OPINION OF THE COURT
                                 _______________

JORDAN, Circuit Judge.

      Rafael Romero appeals from a judgment entered by the United States District

Court for the District of New Jersey imposing a sentence of 150 months’ imprisonment
following his conviction for wire and mail fraud. Romero argues that the District Court

erred at sentencing by finding that the amount of loss from Romero’s fraud exceeded one

million dollars, that some of Romero’s victims were vulnerable, and that Romero abused

a position of trust. Romero also challenges the District Court’s decision that a two-level

upward departure was appropriate under U.S. Sentencing Guidelines Manual

(“U.S.S.G.”) § 5K2.3 for causing extreme psychological injury. We will affirm.

I.     Background

       From 1998 to 2006, Romero held himself out to be an astute investment advisor

who could guarantee risk-free, high rates of return. During that time, he convinced

dozens of victims to give him money to invest from their retirement savings, cash

advance lines on their credit cards, equity in their homes, and brokerage accounts.

Instead of faithfully investing his victims’ money, Romero spent the vast majority of it on

gambling, drinking, renting cars, going to night clubs, and, as the District Court found,

generally “letting the good times roll.”

       A jury convicted Romero on ten counts of wire fraud under 18 U.S.C. § 1343 and

one count of mail fraud under 18 U.S.C. § 1341. At Romero’s sentencing hearing, the

District Court considered evidence that established the following points: bank and

brokerage records showed that Romero received over two million dollars from victims;

checks from Romero to victims showed that he may have returned up to $780,000 to his

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victims;1 an estimate by a special agent of the Federal Bureau of Investigation put

collective net losses of Romero’s victims at $1,884,874.25; at least one victim invested

with Romero because of a “false sense of trust and camaraderie” based on a shared

nationality, youth, and past; certain older victims could no longer retire after losing all of

their retirement savings to Romero; several victims faced financial insolvency because of

Romero’s fraud; one victim suffered continued insomnia and mood problems after losing

his family’s money to Romero’s scheme; and one victim was so sickened by losing her

family’s money that she had to seek medical treatment and suffered depression.

       Based on that evidence, the District Court sentenced Romero to 150 months’

imprisonment, a special assessment of $1,100, and restitution in the amount of

$1,884,874.25. When determining Romero’s sentence, the District Court applied a 16-

level enhancement pursuant to U.S.S.G. § 2B1.1(b)(1)(I) because the amount of loss from

Romero’s fraud exceeded one million dollars, a two-level enhancement pursuant to

U.S.S.G. § 3A1.1(b)(1) because at least one of Romero’s victims was a vulnerable

victim, and a two-level enhancement pursuant to U.S.S.G. § 3B1.3 because Romero

abused a position of trust to conduct his fraud. In addition to those sentencing

enhancements, the District Court agreed with the government that a two-level upward

   1
     Romero asserted that he returned $780,000 to his investors. However, many of the
checks he wrote to investors bounced, so the exact amount returned to investors was not
established.

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departure was appropriate under § 5K2.3 because Romero’s offense caused extreme

psychological injury to his victims.2 Romero timely appealed.

II.    Standard of Review

       We review for clear error the District Court’s factual findings regarding the

amount of loss and its application of the vulnerable victim enhancement. United States v.

Brennan, 326 F.3d 176, 194 (3d Cir. 2003) (District Court’s finding regarding amount of

loss is reviewed for clear error); United States v. Monostra, 125 F.3d 183, 188 (3d Cir.

1997) (application of the vulnerable victim enhancement to factual findings is reviewed

for clear error). While we also review the District Court’s determination of whether the

defendant abused a position of trust for clear error, we review de novo the District

Court’s determination that the defendant occupied a position of trust under U.S.S.G.

§3B1.3. United States v. Iannone, 184 F.3d 214, 222 (3d Cir. 1999). We review for

abuse of discretion the District Court’s decision to depart upward from the applicable

guideline range. See Koon v. United States, 518 U.S. 81, 99-100 (1996); Iannone, 184

F.3d at 225.

2
 That departure added 15 months to Romero’s Guidelines range. The District Court also
applied a four-level enhancement pursuant to U.S.S.G. § 2B1.1(b)(2)(B) because Romero
defrauded more than 50 victims. Romero does not challenge that enhancement.

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III.   Discussion3

       We find no clear error or abuse of discretion in the District Court’s sentencing of

Romero. First, given the uncertainty that Romero returned $780,000 to his victims, the

District Court did not clearly err in finding the loss to exceed one million dollars. The

Court only had to make a reasonable estimate of the loss. See U.S.S.G. § 2F1.1 cmt.

n.3(C) (2008) (“The court need only make a reasonable estimate of the loss.”). The

District Court heard testimony from a special agent of the FBI that the loss to victims

exceeded one million dollars even accounting for the return of $780,000 to the victims.

It was not clear error to credit that testimony. United States v. Napier, 273 F.3d 276,

279-80 (3d Cir. 2001) (finding no clear error where, in the face of conflicting evidence

regarding the amount of loss, the District Court found the Government’s evidence more

reliable).

       Second, the District Court did not clearly err in finding that certain investors were

vulnerable victims. The Sentencing Guidelines provide that “[i]f the defendant knew or

should have known that a victim of the offense was a vulnerable victim, increase by 2

levels.” U.S.S.G. § 3A1.1(b)(1). If one of Romero’s victims was vulnerable based on his

or her individual characteristics, the enhancement could properly be applied. See United

States v. Zats, 298 F.3d 182, 188-90 (3d Cir. 2002). The District Court rejected the

government’s broad argument that all of Romero’s Hispanic victims were vulnerable to

   3
    The District Court had jurisdiction under 18 U.S.C. § 3231. We have jurisdiction
under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a).

                                             5
Romero’s fraud. It instead found that one of Romero’s victims, Ms. Pajaro, was

vulnerable because she shared her nationality, youth, and past with Romero, which

induced her to invest her money with him. That was not clear error. See Iannone, 184

F.3d at 220 (“[T]he court did not base its finding of [the victim’s] vulnerability merely on

broad, unsupported generalizations ... . [The victim] testified at length at the sentencing

hearing, and, based on his testimony, the court made express, specific findings as to his

particular susceptibility ... .”).

       Third, the District Court did not err in holding that Romero occupied and abused a

position of trust.

       We consider three factors in determining whether a defendant occupies a
       position of trust for the purposes of § 3B1.3: (1) whether the position
       allows the defendant to commit a difficult-to-detect wrong; (2) the degree
       of authority which the position vests in the defendant vis-a-vis the object of
       the wrongful act; and (3) whether there has been reliance on the integrity of
       the person occupying the position.

Id. at 223 (internal quotations omitted). The District Court correctly concluded that

Romero occupied a position of trust. Romero’s victims turned over investment control of

significant financial assets to him; they relied on his integrity to invest their money; and

they could not easily detect his fraud because of the discretion he exercised when

managing their money. Romero then abused that position of trust to accomplish his

fraud, using his managerial position to divert his victims’ money to himself for personal

gain. Id. at 224-25 (finding that Iannone’s position as head of the company in which the

victims invested allowed him to conceal use of the victims’ investment money).

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         Last, the District Court did not abuse its discretion when departing upward from

the Sentencing Guideline range for Romero pursuant to § 5K2.3. “If a victim or victims

suffered psychological injury much more serious than that normally resulting from

commission of the offense, the court may increase the sentence above the authorized

guideline range.” U.S.S.G. § 5K2.3. Romero’s fraudulent scheme caused victims to

suffer emotional trauma sufficient to justify the upward departure in this case. See

United States v. Jarvis, 258 F.3d 235, 241 (3d Cir. 2001) (affirming departure when

victims had to take depression medication and see a mental health professional). The

record in this case is replete with evidence of that trauma. Victims testified that they

suffered depression, had to seek medical attention, stopped eating, and suffered from

continuing insomnia – all as a result of the extreme financial hardship caused by

Romero’s actions. The District Court was within its discretion in concluding that the

extent of those injuries placed Romero’s crimes outside the heartland of wire and mail

fraud cases addressed in the Guidelines.

IV.      Conclusion

         For the foregoing reasons, we will affirm the sentence imposed by the District

Court.

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