Court Opinion

ID: 1031314
Source: CourtListenerOpinion
Date Created: 2013-07-05 08:29:23.686732+00
Date Added: 2024-06-11T08:58:32.160549
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                              No. 08-4237

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

           v.

GIUSEPPE PILEGGI,

                Defendant - Appellant.

Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte.   Frank D. Whitney,
District Judge. (3:06-cr-00151-FDW-1)

Argued:   October 29, 2009                   Decided:      January 20, 2010

Before TRAXLER,     Chief   Judge,   and   GREGORY   and    DAVIS,   Circuit
Judges.

Vacated and remanded with instructions by unpublished opinion.
Judge Gregory wrote the opinion, in which Judge Davis joined.
Chief Judge Traxler wrote a dissenting opinion.

ARGUED:   Frank Alan Abrams, LAW OFFICE OF FRANK ABRAMS, PLLC,
Asheville, North Carolina, for Appellant.    Ellen Ruth Meltzer,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellee. ON BRIEF: Ed R. Ryan, Acting United States Attorney,
Charlotte,   North  Carolina;   Patrick  M.   Donley,  Peter  B.
Loewenberg, Fraud Section, Criminal Division, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.

                                2
GREGORY, Circuit Judge:

      Following his extradition to the United States, Appellant

Giuseppe Pileggi was convicted of numerous counts of fraud based

on operating a fraudulent sweepstakes scheme out of Costa Rica

targeting    U.S.    citizens.           The       district      court    then   sentenced

Pileggi to 600 months in prison.                      Pileggi now argues that the

district court arrived at this sentence by relying on clearly

erroneous        facts,        thus   making         his     term       of     imprisonment

procedurally unreasonable.               For the reasons set forth below, we

vacate Pileggi’s sentence and remand for resentencing.

                                           I.

      Pileggi, a fifty year-old Canadian citizen who lived in San

Jose, Costa Rica, and more than four dozen co-conspirators ran

an   elaborate      fraudulent        sweepstakes          scheme      operating    out   of

Costa     Rica    that    primarily      targeted          elderly     citizens     of    the

United    States.         In    total,   at        least   600    to     650   people    were

victimized, and the scheme grossed $8,381,962 from April 2003

until May 2006.          (J.A. 48, 554, 764.) 1

      On May 16, 2006, Costa Rican authorities searched sixteen

sites for evidence relating to the fraud, including Pileggi’s

      1
       Citations herein to “(J.A. __)” refer to the contents of
the Joint Appendix filed by the parties in this appeal.

                                               3
home and car accessory business.                 At the request of the United

States,   Pileggi      was     then    taken    into      custody    by    Costa     Rican

authorities on May 16, 2006.               Pileggi remained in Costa Rican

jail until the United States reached an agreement with Costa

Rica for his extradition.

     The agreement, dated October 27, 2006, between Costa Rica

and the United States was reflected in a diplomatic note.                              The

“Diplomatic Note of Assurances between the United States and

Costa Rica” provided that “Costa Rica requested assurances that,

upon extradition to the United States . . . Giuseppe Pileggi

. . .    will    not   be      subjected   to     the      death    penalty     or    life

imprisonment.”         (J.A.     16.)      In    response,         the   United     States

assured “the Government of Costa Rica that if extradited . . . .

Giuseppe Pileggi . . . will not receive a penalty of death or

one that requires that [he] spend the rest of [his] natural

[life] in prison.”          (J.A. 17.) 2

     On   December       5,    2006,    Pileggi      was    indicted      in   the   U.S.

District Court for the Western District of North Carolina for

one count of conspiracy to commit wire fraud, mail fraud and

travel    fraud,   in     violation      of     18    U.S.C.   § 371       (2006),     and

twenty-two      counts    of    wire    fraud,       in   violation       of   18   U.S.C.

     2
       Both parties agree that diplomatic assurances reflecting
agreement between parties to an extradition treaty are to be
enforced by the courts.

                                           4
§§ 1343 & 2. 3        On January 31, 2008, Pileggi was convicted on all

counts, 4 and sentencing was set for September 24, 2008.

        Prior    to    sentencing,        a    Presentence          Investigation          Report

(“PSR”)       was     generated      by       the     United       States     Department         of

Probation.          The PSR stated that “based on a total offense level

of 43 and a criminal history category of I [Pileggi had no prior

convictions],         the    guideline        range     for    imprisonment          is    life.”

(J.A. 826.)           The PSR section entitled “Circumstances That May

Warrant Departure” mentions that an extradition treaty between

the     United      States    and     Costa          Rica   governs         the    extradition

relationship          between       the        two     countries.                 (J.A.        828.)

Additionally,         the    PSR     accurately         stated       the     terms        of    the

Diplomatic Note.            At the same time, the PSR suggested “imposing

a sentence where a portion of these counts run concurrently in

order to achieve a sentence of 540 months (or 45 years) which is

essentially a life sentence for this defendant.”                             (Id.)

        At      sentencing,         the       Government           made      the     following

misrepresentation           about    the       assurances      it     provided        to       Costa

Rica:        “the United States, we gave a sentencing assurance to the

government of Costa Rica that we would not seek a sentence in

        3
        The         indictment       also      included        a     criminal        forfeiture
allegation.
        4
            The Government dismissed Count 18.

                                                5
excess of 50 years.”             (J.A. 756.)      When the court asked if this

bound      the     court    or    the    executive    branch,         the    Government

responded, “I think technically what it says is that the United

States, the executive branch will not seek a sentence in excess

of fifty years or death.”            (Id.)

      At    the     conclusion      of    the    hearing,      the    district        court

determined that it was unable to render a life sentence based on

the   statutory       maximums     for    the    counts   on    which       Pileggi    was

convicted.          (J.A.    762-63.)       Rather,    it   found         that   it    must

sentence him to a term of months.                 After a review of the factors

set out in 18 U.S.C. § 3553 and the Government’s representation

that it assured Costa Rica that it could not seek a sentence

greater than fifty years, the court sentenced fifty year-old

Pileggi to 600 months (fifty years) of incarceration, followed

by three years of supervised release. 5

                                           II.

      Pileggi        contends      that     his     sentence         is     procedurally

unreasonable.        We review a sentence for reasonableness under an

abuse of discretion standard.                Gall v. United States, 552 U.S.

38, 51 (2007).             When reviewing reasonableness, we “must first

ensure      that     the     district     court     committed         no    significant

      5
       Additionally, Pileggi was ordered to pay restitution of
$3,952,985 and to forfeit $8,381,962 to the United States.

                                            6
procedural error,” which includes:                    “failing to calculate (or

improperly       calculating)        the    Guidelines        range,   treating      the

Guidelines       as     mandatory,    failing      to   consider       the   § 3553(a)

factors, selecting a sentence based on clearly erroneous facts,

or failing to adequately explain the chosen sentence-including

an explanation for any deviation from the Guidelines range.”

Id.

      Pileggi did not, however, raise the issue of his sentence’s

procedural      reasonableness        below.       When   a    defendant     fails    to

object to the procedural reasonableness of a given sentence,

appellate       courts     are   split      over   whether      plain-error    review

applies. 6      To prevail under plain error review, Pileggi must

demonstrate that:           (1) an error occurred; (2) the error was

plain;    and     (3)     the    error     affected     his    substantial     rights.

      6
        The First, Second, Sixth, Eighth, Ninth, Tenth, and
District of Columbia circuits agree that plain-error review
applies.   See, e.g., United States v. Pakala, 568 F.3d 47, 56
(1st Cir. 2009); United States v. Eads, No. 07-3923, 2009 WL
1324230, at *1 (8th Cir. May 14, 2009); In re Sealed Case, 527
F.3d 188, 191-92 (D.C. Cir. 2008); United States v. Ciappetta,
284 Fed App’x 854, 855 (2d Cir. 2008); United States v. Cook,
550 F.3d 1292, 1297-98 (10th Cir. 2008); United States v.
Vonner, 516 F.3d 382, 385-86 (6th Cir. 2008); United States v.
Waknine, 543 F.3d 546, 549 (9th Cir. 2008).       The Third and
Seventh circuits, however, apply the reasonableness review that
typically applies to sentencing.    See, e.g., United States v.
Sevilla, 541 F.3d 226, 230-31 (3d Cir. 2008); United States v.
Castro-Juarez, 425 F.3d 430, 433-34 (7th Cir. 2005). This Court
has previously held in unpublished opinions that plain-error
review is appropriate.    United States v. Flores-Ansencio, 297
Fed. App’x 226, 227 (4th Cir. 2008); United States v. Garcia,
233 Fed. App’x 311, 312 (4th Cir. 2007).

                                             7
United States v. Olano, 507 U.S. 725, 732 (1993).                               If these

three elements are met, this Court may exercise its discretion

to    notice   error    only    if   the    error       “seriously      affect[s]       the

fairness,        integrity      or     public       reputation          of         judicial

proceedings.”          Id.    (internal     quotation          marks    and     citations

omitted); United States v. Hughes, 401 F.3d 540, 547-48, 550

(4th Cir. 2005).             We need not decide whether plain-error or

reasonableness         review    applies         here     because       under       either

standard, Pileggi’s sentence is procedurally unreasonable.

                                        III.

       Pileggi    contends      that   the       district       court       committed     a

significant procedural error when it sentenced him to 600 months

of imprisonment.        Specifically, Pileggi argues that the district

court    relied    on    clearly     erroneous       facts      to     arrive      at   the

sentence, namely the Government’s misrepresentation concerning

the     diplomatic      assurances     given       to    Costa       Rica     to    secure

Pileggi’s extradition.          We agree.

       The United States provided the Costa Rican authorities with

diplomatic     assurances,       one   of       which    was    that     a    number     of

suspects, including Pileggi, would not receive the death penalty

or a sentence that requires he spend the rest of his natural

life in prison.         Rather than providing this information to the

court, the Government informed the court that the United States

                                            8
had assured Costa Rican authorities that “the executive branch

will not seek a sentence in excess of fifty years or death.”

(J.A.    756.)          Although      we    accept          that    the    misstatement      was

inadvertent,          the    statement      put       indisputably        false     information

before the district court during sentencing.                              Furthermore, at no

time was the error corrected.                     The Government instead sought a

fifty-year sentence, arguing that “a sentence of 50 years in a

crime     so      extraordinarily           heinous          warrants        this     kind   of

sentence.”       (J.A. 760.)

        The    district       court    then       considered         that    the     Guidelines

provided a sentencing range of life, but that the court was

bound by statutory maximums to sentence Pileggi to a term of

months.         The    PSR    did   not     mention         or     recommend   that     Pileggi

receive a sentence of fifty years.                          Rather, it noted that “the

Court may wish to consider imposing a sentence where a portion

of [the] counts run concurrently in order to achieve a sentence

of 540 months (or 45 years) which is essentially a life sentence

for this defendant.”                (J.A. 799.)              The court then sentenced

Pileggi to 600 months (fifty years) of imprisonment.                                  The only

mention of a fifty-year sentence came during the Government’s

misrepresentation of the diplomatic assurances.                                Therefore, in

sentencing Pileggi to a term of fifty years, the court relied on

clearly       erroneous       facts,       which       is    a     significant      procedural

error.        Gall, 552 U.S. at 51.

                                                  9
       Under     plain-error       review,      there       is   no    doubt     that   this

significant procedural error is plain.                           Moreover, this error

affected Pileggi’s substantial rights because it affected his

sentence.        See United States v. Basham, 561 F.3d 302, 334 (4th

Cir. 2009) (noting that an error that affects “the outcome of

the penalty phase” is an error affecting a substantial right).

Given      the     Government’s        misrepresentation,               we      have    zero

confidence that had the district court known the true content of

the assurances provided to Costa Rica, it would have sentenced

Pileggi to 600 months in prison.                       The only reference during

sentencing       to    the     assurances       provided         to     Costa    Rica    was

erroneous, and the sentence arrived at by the court mirrored the

Government’s          misstatement.          In       addition,         no      information

independent       from   the      misstatement        was    before      the    court   that

suggested a sentence of fifty years in prison.

       Finally, while we harbor no doubt as to Pileggi’s guilt or

the seriousness of his crimes, there is no question that this

sentencing error “seriously affect[s] the fairness, integrity or

public reputation of judicial proceedings.”                           Olano, 507 U.S. at

732.    The district court relied on false information given to it

by   the   Government        to   arrive   at     a   term       of   imprisonment      that

exceeded       Pileggi’s     life    expectancy.             This      reliance    by    the

district court on the Government’s misstatement is a fundamental

affront to the fairness and integrity of judicial proceedings.

                                           10
The   Government   contends   that      the   district   court   properly

calculated Pileggi’s Guidelines range, treated the Guidelines as

advisory, considered the applicable 18 U.S.C. § 3553(a) factors,

and explained its reasoning.         This argument entirely neglects

that the Supreme Court has unambiguously held that a sentence is

procedurally unreasonable if “based on clearly erroneous facts.”

Gall, 552 U.S. at 51.

                                  IV.

      Because the district court found that it “just [did] not

believe a man that could target elderly individuals and deprive

them of their life savings [would] be a productive citizen at

any time in his life,” (J.A. 763-65), and then arrived at a de

facto life sentence using clearly erroneous facts, we vacate

Pileggi’s 600-month sentence and remand with instructions that

the case be reassigned for resentencing.

                              VACATED AND REMANDED WITH INSTRUCTIONS

                                  11
TRAXLER, Chief Judge, dissenting:

     Giuseppe       Pileggi     argues     that      we     ought       to     vacate     his

sentence    because    the     government       misstated         the    terms       of   the

diplomatic       assurances    provided       to    Costa       Rica    by     the   United

States in connection with his extradition.                      Because he failed to

correct the government’s incomplete description or even object

to his sentence as inconsistent with the extradition assurances

between    the    United   States    and    Costa     Rica,       Pileggi       faces     the

substantial task of demonstrating plain error.                         I do not believe

Pileggi     carried    his     burden      in      this    regard        and     therefore

respectfully dissent.

        In order to satisfy the plain error standard, Pileggi must

show: (1) an error was made; (2) the error is plain; and (3) the

error affects substantial rights.                  See United States v. Olano,

507 U.S. 725, 732 (1993).           Significantly, the defendant, not the

government, “bears the burden of satisfying each of the elements

of the plain error standard.”              United States v. Massenburg, 564

F.3d 337, 343 (4th Cir. 2009) (citing United States v. Vonn, 535

U.S. 55, 59 (2002)).           Moreover, “[t]he decision to correct the

error     lies    within      our   discretion,           and    we     exercise          that

discretion only if the error ‘seriously affects the fairness,

integrity or public reputation of judicial proceedings.’”                                 Id.

(quoting Olano, 507 U.S. at 732).

                                         12
      In   my    view,     Pileggi      failed        to    establish         the    primary,

fundamental      requirement       that      an     error    by    the    judge      in    fact

occurred.       See United States v. Hastings, 134 F.3d 235, 239 (4th

Cir. 1998) (“In reviewing for plain error, our initial inquiry

is whether an error occurred.”).                     It is difficult to discern,

even from a careful reading of Pileggi’s brief, precisely what

error or errors he believes the district court committed.                                   His

primary claim seems to be that the government misled the court,

albeit inadvertently, as to the terms of extradition, and that

the   district     court       committed       an    error       when    it    “t[ook]      the

government’s statement as true.”                    Brief of Appellant at 18.                To

the   extent     that    Pileggi      is     arguing       that    the    district        court

imposed a sentence based on clearly erroneous factual findings,

he    cannot     demonstrate          that     the       district        court’s      factual

conclusions were not “plausible in light of the record as a

whole.”     United States v. Trujillo, 502 F.3d 353, 356 (5th Cir.

2007).      Although the presentence report accurately summarized

the   diplomatic        assurances,          the    materials       submitted        to     the

district    court       for    sentencing          did     not    include      the     actual

correspondence          from    the     State        Department          to    Costa      Rica

containing the diplomatic assurances.                      Thus, it appears the only

information before the district court relating to the diplomatic

assurances consisted of brief summaries by the Assistant United

States Attorney and the Probation Officer.                              Such a record is

                                              13
hardly enough to conclude that the district court made clearly

erroneous factual findings and I am not “left with the definite

and firm conviction that a mistake has been committed.”                          United

States v. Hill, 473 F.3d 112, 115 (4th Cir. 2007) (internal

quotation marks omitted).

       Pileggi also fails to establish an error to the extent he

is arguing simply that the district court sentenced him based on

false information, which is essentially a due process argument.

See, e.g., U.S. v. Clanton, 538 F.3d 652, 655 (7th Cir. 2008)

(“There is no doubt that a criminal defendant has a due process

right to have the court consider only accurate information when

imposing sentence, and that this right may be violated when the

court    considers      information       which       is     inaccurate.”     (internal

quotation      marks        omitted)).         “A     due       process   violation    is

established only if the defendant shows that the district court

relied on materially false information and that the information

is demonstrably the basis for the challenged sentence.”                           United

States v. Carr, 66 F.3d 981, 983 (8th Cir. 1995) (per curiam).

Pileggi does not carry his burden merely by pointing out the

fact    that    the    district     court      was     presented       with   inaccurate

information.          See    Clanton,    538     F.3d      at    655   (explaining    that

there is no “due process right to have a PSR free of [materially

untrue, inaccurate information]” and there is no error unless

“the    judge    .     .     .   [relied]        on    the       allegedly    inaccurate

                                            14
information”).           In       imposing       a    sentence       within     the   advisory

guideline      range,         the      district         court       during      its   thorough

explanation of the selected sentence did not refer in any way to

the terms of extradition.                   Pileggi is simply speculating that

the   district        court       relied    on       the     government’s       misstatement.

Because   the     burden          is   allocated        to    him    in   the      plain   error

context, I would conclude that Pileggi failed to establish an

error that is plain.

      Even assuming there is plain error here, Pileggi clearly

has   failed     to    show       that     the       error    affected       his   substantial

rights.     An error that affects substantial rights is an error

that has a prejudicial effect on the outcome, meaning there is

“a reasonable probability that, but for [the error claimed], the

result of the proceeding would have been different.”                                       United

States v. Dominguez Benitez, 542 U.S. 74, 82 (2004) (alteration

in    original)       (internal          quotation           marks    omitted).            Unlike

harmless error analysis, which requires the government to show

that the error did not have a prejudicial effect on the outcome,

the plain error doctrine places the burden with the defendant to

make an affirmative showing of prejudice.                             See Massenburg, 564

F.3d at 343.

      In light of the sentence ultimately imposed, Pileggi simply

cannot    make    such        a     showing.           First,       the   district     court’s

sentence, stiff though it may have been, was consistent with the

                                                 15
diplomatic assurance given to the government of Costa Rica that

Pileggi         and   his   co-conspirators,       if    convicted,    would       “not

receive a penalty of death or one that requires that they spend

the rest of their natural lives in prison.”                     J.A. 17.      Pileggi

claims that at his age (he was 48 years old at sentencing), a

600-month sentence is no different than a life sentence.                               But

that       is   incorrect;     a   sentence      that    is   effectively     a    life

sentence is still not a life sentence.                    Pileggi refers to the

mortality tables and invites us to do some sort of actuarial

analysis to determine if, in fact, he received a life sentence.

The problems with such an “effective life sentence” approach are

obvious, beginning with the fact that a court would have to make

an ad hoc determination regarding whether a substantial prison

term       should     be    regarded   as    a    life    sentence    based       on    a

defendant’s age and health factors. *

       Second, and more importantly, Pileggi points to absolutely

nothing in the record from which I can conclude that, had the

       *
       I recognize, of course, the equitable appeal of the
“effective life sentence” argument.     The problem is where to
draw the line in a case like this in which it is conceivable
that the entire sentence could be served; we should refrain from
doing so.   Indeed, I am not certain how the district court on
remand is to determine whether the sentence is effectively one
for life or not.      In the end, the solution lies with the
executive branches of the parties to a given extradition treaty
which could, if so desired, account for the possibility of an
“effective life sentence” during the extradition process.

                                            16
district    court    been       accurately          informed      about    the    diplomatic

assurances, there is a reasonable probability that the court

would     have     imposed       a    lesser        sentence.           Without        anything

concrete,    Pileggi       is    just       speculating.           In    the    plain    error

review context, it is not the government’s burden to convince

the court that, had the accurate information been available, the

district court would have imposed the same sentence.                              Rather, it

is Pileggi’s burden to establish a reasonable probability that

he would have received a more favorable sentence.

        Finally,    even   when       there     is    a    plain    error       that   affects

substantial rights, the court should exercise its discretion to

correct the error only if it “seriously affect[s] the fairness,

integrity or public reputation of judicial proceedings,” Olano,

507 U.S. at 732 (alteration in original) (internal quotation

marks    omitted),    or     “in      the    case     of    actual      innocence       of   the

defendant,” United States v. David, 83 F.3d 638, 647 (4th Cir.

1996).     Pileggi makes no claim of actual innocence, and these

circumstances, in my view, clearly do not undermine the fairness

or reputation of our judicial process.                          Indeed, on at least one

previous    occasion,       we       refused    even       to    address    a    defendant’s

argument     that      his       sentence           violated       the     terms        of    an

international extradition treaty to which the United States was

party.     See United States v. Davis, 954 F.2d 182, 186 (4th Cir.

1992).     Significantly, we explained that the violation of the

                                               17
relevant terms of extradition “does not rise to the level of

fundamentality that this court has traditionally demanded before

addressing a question of law not argued at the district court

level.”      Id.       Thus, I would not exercise our discretion to

correct such an error.

       For   the       foregoing     reasons,     I     respectfully          dissent.

Furthermore, I see no reason to reassign this case to another

district     judge,     particularly    in     light    of   the     fact    that   the

alleged error was one created by the parties’ combined failure

to    correctly    inform     the   district    judge    about      the     diplomatic

assurances related to Pileggi’s extradition.                   In explaining his

basis for imposing Pileggi’s sentence as the law requires him to

do,    the   district      judge    revealed     no    bias    or     other     reason

suggesting he is unable or unwilling to impose a proper sentence

on    remand.      I   fear   a   reassignment    under      these    circumstances

sends a confusing and troublesome message to the district judges

in this circuit.

                                        18