Court Opinion

ID: 200107
Source: CourtListenerOpinion
Date Created: 2011-02-07 04:44:12+00
Date Added: 2024-06-11T17:27:05.691185
License: Public Domain

[NOT FOR PUBLICATION--NOT TO BE CITED AS PRECEDENT]

          United States Court of Appeals
                       For the First Circuit

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 United States Attorney, and Ira Belkin,
Assistant United States Attorney, on brief for appellee.

                         September 3, 2002
           Per Curiam. Todd J. LaScola, a licensed stockbroker,

pled guilty to nine counts of a 55 count indictment, alleging

mail fraud, 18 U.S.C. §1341, wire fraud, 18 U.S.C. § 1343, and

embezzlement, 18 U.S.C. § 664.        His crimes comprised several

schemes involving two companies in which he was engaged, CPA

Advisors Network ("CPA") and CPI Investment Management, Inc.

("CPI").   LaScola was sentenced to 96 months imprisonment,

three   years   supervised      release,     and   restitution     of

approximately $8.1 million dollars.        He challenges 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),
asserting that none of the upward adjustments (apart from
minimal planning) was authorized because none was specifically

mentioned in the indictment or in the plea agreement.            This
argument was not raised in the district court and, thus, is
subject to the plain error standard.        There was no error, let

alone plain error.     Apprendi does not apply to guideline

findings that increase the sentence but do not elevate it
beyond the 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 imprisonment on Count 1 (mail fraud) and concurrent 36

months imprisonment on the remaining eight counts to be served
consecutive to the 60 month term imposed on Count 1 (for a

total term of 96 months).

                                -2-
 §2F1.1(b)(1) - Amount of loss1

             The Presentence Report ("PSR") calculated that the

 total loss amount generated by LaScola's criminal conduct was
 between $5 and $10 million dollars and thus 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, rather than 14, level increase.       See §2F.1.1(b)(1)(N).

 LaScola argued that he did not pocket the $6 million obtained

 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

 argued that, in fact, there was still some value to these
 Notes.     He analogized to fraudulent loan cases and suggested

 that, just as the value of the assets pledged to secure a

 fraudulent loan reduces the amount of loss in a fraudulent loan

     1
      We refer to the November 2000 Sentencing Guidelines. LaScola
did not 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 fact, 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-
 case, so too the "value" of the RBG Notes should reduce the

 amount of loss attributed to his conduct.    The court rejected

 that assessment, instead calculating the loss as the amount of
 money that LaScola improperly 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 States v.

 Blastos, 258 F.3d 25, 30 (1st Cir. 2001).    On appeal, LaScola

 contends that, although he was convicted of fraud, the court

 erroneously treated his conduct as a theft to determine the
 amount of loss.    There was no error.   The commentary to the

 fraud guideline 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 any loss to his victims.     Amazingly, although LaScola

 conceded in the district court that the loss was $2.5 and $5

 million, he now contends on appeal that the net loss to the

 victims was $0.2    "The Guidelines recognize loan fraud as a

 specific exception to the usual methods of calculating loss set

     2
      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-
forth in §§2F1.1 and 2B1.1."       United States v. Stein, 233 F.3d
6, 18 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 district

court's rejection of the attempt.

§2F1.1(b)(6)(C) - Sophisticated means

            In the district court, LaScola argued that there was

significant overlap between the "more than minimal planning"

adjustment, §2F1.1(b)(2)(A), and the "sophisticated means"

adjustment, §2F1.1(b)(6)(C), such that it amounted to double

counting. LaScola did not renew this contention in his initial

appellate    brief   and   the   government   contends   that   he   has

abandoned that argument. LaScola tardily attempts to resurrect
this double counting argument in his reply brief but, as we

have repeatedly stated, "a legal argument made for the first

time in an appellant's reply brief comes too late and need not
be addressed."    United States v. Brennan, 994 F.2d 918, 922 n.7

(1st Cir. 1993).

             On appeal, LaScola contends that the district court

determined    that   the   "sophisticated     means"   adjustment    was

warranted because he used a computer system to execute his

crimes and argues that this was error because operation of the

computer program took little skill or training.          LaScola also

argues that the computer software was used simply to carry out

the fraud and not to conceal it and, in fact, its use insured

the detection of the fraud because it would reveal the accounts

                                  -5-
 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"   adjustment   was

 warranted not because LaScola used a          computer system but
 because he not only stole the existing funds from CPA clients'

 accounts but converted those accounts to margin accounts,

 giving him the ability to borrow additional money in the

 clients' names.3   The emphasis and impetus for the finding of

 "sophisticated means" was not, as LaScola portrays it, on the

 use of a computer system itself but on how LaScola used that

 system in executing the offense by accessing his clients'
 accounts and converting them to margin accounts enabling him to

 steal more than the existing funds.       There was no error either

 in the court's factual finding or in its application of the
 sophisticated means 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 the

 application of this guideline on the ground that both CPI and

 CPA were purely sales organizations that, although may have

     3
      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
password to execute the transaction.       This is a meaningless
quibble.

                                 -6-
facilitated    trades,     never    actually    executed   trades   nor

custodied assets 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 transactions, relying upon

Wexford (the subsidiary of Prudential Securities), Fleet Bank

and other financial institutions to execute trades or custody

assets   and   those    financial    institutions,   argued   LaScola,

remained safe, sound and solvent. The district court concluded

that both CPI and CPA met the guideline definition of financial

institution and became insolvent as a result of LaScola's
conduct.       It      rejected     LaScola's   distinction    between

"introducing broker" and "clearing broker" as unavailing in

light of the clear language of the guideline definition.            See

U.S.S.G. §2F1.1, comment. (n.19).

           On appeal, LaScola renews his argument but provides

no persuasive authority. There was no error in the application

of this guideline adjustment.        See United States v. Ferrarini,

219 F.3d 145, 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 vulnerable victim adjustment.           LaScola was

personally questioned by the district court as to whether he

                                    -7-
understood that he was waiving his right to challenge that

adjustment and he replied in the affirmative and stated that he

had no questions about his waiver.       Sentencing Tr. of 5/22/01
at p.5.     Nonetheless, LaScola, on appeal, 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 sentencing

range of 87 to 108 months was far in excess of the sentences

imposed in other fraud cases in the districts of Rhode Island

and Massachusetts.      In support, he proffered information he
apparently had obtained simply from the face of the court

dockets, i.e., docket numbers, term of imprisonment imposed,

and amount of restitution ordered.         He conceded that he was
unaware of whether adjustment factors, such as vulnerable

victim and/or sophisticated means, were applied in these cases.

The district court rejected LaScola'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 argument," but,

as we have repeatedly held, a district court's refusal to

depart downward is not reviewable unless based on a mistake of

law.   See United States v. Bunnell, 280 F.3d 46, 50 (1st Cir.

                                 -8-
2002).   There was none here. The district court recited the

proper standard for finding a departure but found LaScola's

proffer insufficient to support one.   Moreover, we 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 used to justify a sentencing departure."   United States v.

Martin, 221 F.3d 52, 57 (1st Cir. 2000).

          The judgment of the district court is affirmed.

                             -9-