Court Opinion

ID: 1042531
Source: CourtListenerOpinion
Date Created: 2013-10-01 19:36:52.336403+00
Date Added: 2024-06-11T12:59:54.775522
License: Public Domain

NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                                ____________

                                      No. 11-4612
                                      No. 11-4613
                                     ____________

                          UNITED STATES OF AMERICA

                                           v.

                                   PAUL J. LOPAPA,
                                                 Appellant
                                     ____________

                   On Appeal from the United States District Court
                             for the District of New Jersey
             (D.C. No. 2-09-cr-00556-001 & D.C. No. 2-10-cr-00814-001)
                    District Judge: Honorable Susan D. Wigenton
                                     ____________

                      Submitted Under Third Circuit LAR 34.1(a)
                                 September 27, 2013

             Before: AMBRO, FISHER and HARDIMAN, Circuit Judges.

                               (Filed: September 30, 2013)
                                      ____________

                               OPINION OF THE COURT
                                    ____________

HARDIMAN, Circuit Judge.

      Paul LoPapa appeals the District Court’s judgments of sentence for his fraud

convictions. We will affirm.

                                            I
       In November 2010, LoPapa pleaded guilty to two separate indictments. The first

charged him with six counts of wire fraud and one count of conspiracy to commit wire

fraud, in violation of 18 U.S.C. §§ 2, 1343, and 1349. The second charged him with one

count of social security and disability fraud, in violation of 42 U.S.C. § 408(a)(4) and 18

U.S.C. § 2.

       The wire fraud charges arose from an investment fraud scheme perpetrated by

LoPapa and two others. In 2007, LoPapa and his coconspirators formed a company

called Skyline Equities, Inc. Although Skyline professed to be a holding company with

30 years of investment experience with offices in Zurich, Moscow, and Miami, it was in

fact a front company operated out of LoPapa’s home in Livingston, New Jersey. Through

telephone conversations, written materials, and face-to-face meetings, LoPapa and his

coconspirators duped unsuspecting individuals to invest in their “Bank Guarantee

Program,” which was purportedly guaranteed by international financial institutions such

as Credit Suisse and UBS and promised investors extraordinary rates of return. Between

December 2007 and July 2008, LoPapa and his coconspirators raised $815,000 from

investors in multiple states. The money was transferred via wire to a Skyline bank

account at JPMorgan Chase and then quickly rerouted by LoPapa and his coconspirators

to various other accounts where the conspirators accessed the money to buy several

Mercedes-Benz automobiles, to pay mortgages and property taxes, and to make personal

expenditures at various retail stores. Of the $815,000 originally taken, only $50,000 was

                                             2
returned, resulting in a loss of $765,000.

       The social security and disability fraud charge arose from LoPapa’s scheme to

defraud the Social Security Administration (SSA). In August and September 2001,

LoPapa filed various documents with the SSA, claiming that he had sustained an accident

in December 1990 which rendered him unable to return to work. He also alleged that he

was unable to manage money due to memory loss and a stroke, and that he was unable to

leave his home because of his medical condition. Based on these representations, in

January 2003 the SSA granted LoPapa disability benefits, retroactive to October 1998. In

November 2006, the SSA discovered that LoPapa had in fact been working and

determined that his entitlement to benefits was based on a concealment of his work

activity. That determination was upheld by an Administrative Law Judge in September

2007 and benefits were thereafter terminated. By that time, LoPapa had received

$149,923 for the time period between October 1998 and October 2007.

       Following LoPapa’s guilty plea, the U.S. Probation Office prepared a Presentence

Investigation Report (PSR). The PSR calculated a total offense level of 25 from a base

offense level of seven, see USSG § 2B1.1(a)(1), a fourteen-level increase for the amount

of loss, see USSG § 2B1.1(b)(1)(H), a two-level increase because the offense had more

than ten victims, see USSG § 2B1.1(b)(2)(A)(i), and a two-level increase because LoPapa

used sophisticated means, see USSG § 2B1.1(b)(10)(C).1 Combined with a criminal

       1
           The two convictions were grouped pursuant to USSG § 3D1.2(d).
                                             3
history category of VI, LoPapa’s advisory United States Sentencing Guidelines range was

110 to 137 months’ imprisonment. LoPapa objected to the PSR, arguing that the two-

level enhancements for the number of victims and for the use of sophisticated means were

unwarranted, that he should be given an acceptance of responsibility reduction, and that

his criminal history category should have been II because several of his prior convictions

were over 15 years old. Accordingly, LoPapa argued for an advisory Guidelines range of

33 to 41 months’ imprisonment. In addition, LoPapa argued for leniency because of

medical problems.

       The District Court held a sentencing hearing on December 16, 2011. A week

prior, LoPapa’s counsel, Steven Roth, sent a letter to the Court requesting leave to

substitute Moses Rambarran to stand in on Roth’s behalf at sentencing because of a death

in Roth’s family. The letter stated that LoPapa had consented to Rambarran’s appearance

on his behalf. At the outset of the hearing, however, Rambarran requested that the

hearing be postponed because he had not had adequate time to meet with LoPapa. The

District Court denied that request, noting that sentencing had already been postponed

several times before at LoPapa’s request. Nevertheless, the District Court adjourned the

hearing for fifty minutes to allow for additional consultation between Rambarran and

LoPapa.

       When the hearing resumed, the District Court revised the Guidelines calculation to

reflect a total offense level of 23 after it determined that the two-level enhancement for

                                              4
the number of victims was improper, a finding that the Government conceded. Although

LoPapa renewed his arguments regarding an acceptance of responsibility reduction, the

sophisticated means enhancement, and the criminal history category, the District Court

rejected them. The resulting Guidelines range was 92 to 115 months’ imprisonment. The

Government argued for an upward variance to at least 120 months’ imprisonment based

on the seriousness of LoPapa’s crimes and his long history of fraud convictions. After

consideration of the factors enumerated in 18 U.S.C. § 3553(a), the Court determined that

an upward variance was appropriate and sentenced LoPapa to concurrent terms of 120

months’ imprisonment on the wire fraud conviction and 60 months’ imprisonment on the

social security fraud conviction, followed by a two-year term of supervised release. The

Court also ordered restitution of $630,000 for the wire fraud and $145,923 for the social

security fraud.

                                            II2

       LoPapa took separate appeals from each sentence, which we consolidated for

disposition. He argues: (1) that his investment fraud scheme did not qualify for a

sophisticated means enhancement; (2) that he was entitled to an acceptance of

responsibility reduction; (3) that the upward variance was unwarranted and his sentence is

substantively unreasonable; and (4) that the request to postpone the sentencing hearing

       2
         The District Court had jurisdiction pursuant to 18 U.S.C. § 3231. We have
jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a).

                                            5
should have been granted. We address each argument in turn.

                                               A

       LoPapa first argues that the District Court should not have applied a two-level

enhancement for the use of sophisticated means pursuant to USSG § 2B1.1(b)(10)(C).

We review a district court’s decision to apply a sophisticated means enhancement for

clear error. United States v. Cianci, 154 F.3d 106, 109 (3d Cir. 1998).

       Application Note 8(B) to § 2B1.1 defines “sophisticated means” as

       especially complex or especially intricate offense conduct pertaining to the
       execution or concealment of an offense. . . . Conduct such as hiding assets or
       transactions, or both, through the use of fictitious entities, corporate shells, or
       offshore financial accounts also ordinarily indicates sophisticated means.

USSG § 2B1.1 app. n.8(B). “Application of the adjustment is proper when the conduct

shows a greater level of planning or concealment than a typical fraud of its kind.” United

States v. Fumo, 655 F.3d 288, 315 (3d Cir. 2011) (quoting United States v. Landwer, 640

F.3d 769, 771 (7th Cir. 2011)). For example, we have found the sophisticated means

enhancement appropriate in cases where the fraud “involved the use of a shell corporation

[and] falsified documents.” Cianci, 154 F.3d at 110. Our sister circuits have similarly

found the enhancement appropriate when the fraudster has taken extensive actions to

conceal the scheme, see, e.g., United States v. Snow, 663 F.3d 1156, 1164 (10th Cir.

2011), or when the fraudster has engaged in the repeated use of fictitious identities and

other deceptive practices, see, e.g., United States v. Crosgrove, 637 F.3d 646, 667 (6th

Cir. 2011).
                                               6
       Here, LoPapa used a newly formed corporation, Skyline, to perpetrate the fraud,

falsely claiming that the company had thirty years of investment experience and had

offices in multiple countries when in fact the company was a front operated out of

LoPapa’s New Jersey home. LoPapa lured individuals using fabricated investment

agreements which promised high rates of return on investments made with international

financial institutions, including UBS and Credit Suisse, that would guarantee their

investments. LoPapa then deposited funds into multiple Skyline bank accounts at myriad

banks from which he promptly redirected funds to his and his coconspirators’ personal

bank accounts. When investors later became suspicious, LoPapa deployed coconspirators

to assume the roles of LoPapa’s supposed family members or adopt other fictitious names

and tell skeptical victims seeking information about their investments that LoPapa was

unavailable because he had supposedly left the business, suffered health problems, or

died. He also sent emails falsely assuring investors of forthcoming payments that had

been supposedly held up by the banks or blaming losses on fraud committed by others.

These facts amply support the District Court’s application of the sophisticated means

enhancement.

                                             B

       LoPapa’s second argument is that the District Court erred by denying his request

for an acceptance of responsibility reduction pursuant to USSG § 3E1.1. LoPapa argues

that his decision to plead guilty to all charges qualified him for the reduction. We review

                                             7
a district court’s determination of whether the defendant is entitled to an acceptance of

responsibility reduction for clear error. United States v. Ceccarani, 98 F.3d 126, 129 (3d

Cir. 1996).

       Application Note 3 to § 3E1.1 states that although a guilty plea “will constitute

significant evidence of acceptance of responsibility . . . this evidence may be outweighed

by conduct of the defendant that is inconsistent with such acceptance of responsibility. A

defendant who enters a guilty plea is not entitled to an adjustment under this section as a

matter of right.” USSG § 3E1.1 app. n.3. In addition, the Guidelines make clear that

“[t]he sentencing judge is in a unique position to evaluate a defendant’s acceptance of

responsibility. For this reason, the determination of the sentencing judge is entitled to

great deference on review.” Id. app. n.5; see also United States v. King, 604 F.3d 125,

141 (3d Cir. 2010).

       Here, the District Court found that LoPapa’s conduct following his guilty plea

indicated that he did not truly accept responsibility for what he did and had not shown any

contrition or remorse for his crimes. For example, during his formal pre-sentence

interview with the Probation Office, LoPapa repeatedly deflected blame for his crimes,

telling the probation officer that he pleaded guilty because he did not want anything to

happen to his girlfriend and never admitting that the facts to which he pleaded guilty were

true. Indeed, LoPapa even asked whether the probation officer “really wanted to know”

whether he truthfully admitted his guilt. Instead, he minimized his responsibility for the

                                              8
investment fraud scheme by saying that he “knew about it” and “didn’t stop it.” With

regard to his social security fraud, he told the probation officer that he was “not sure”

whether he collected benefits legally or not, continuing to maintain that he was

“completely disabled.” Given LoPapa’s refusal to take full responsibility for his crimes,

the District Court did not clearly err in rejecting an acceptance of responsibility reduction.

See, e.g., United States v. Dullum, 560 F.3d 133, 142 (3d Cir. 2009) (affirming the denial

of acceptance of responsibility reduction where the defendant “refused to take full

responsibility for his behavior based on his pre-sentencing letter to the Probation Office”

and made statements indicating that he did not believe that his actions were fully

criminal).

                                              C

       LoPapa next argues that the District Court failed to adequately consider his health

problems in sentencing him to 120 months’ imprisonment, an upward variance of five

months. Although it is unclear whether LoPapa is making a procedural or substantive

reasonableness argument, either would be unpersuasive. We review both procedural and

substantive challenges for abuse of discretion. Gall v. United States, 552 U.S. 38, 51

(2007).

       There is no question that the District Court was aware of LoPapa’s medical

condition and considered it in its evaluation of the § 3553(a) factors, especially the

defendant’s history and characteristics. Prior to the sentencing hearing, both the PSR and

                                              9
LoPapa’s sentencing memorandum listed his various ailments in painstaking detail and

the sentencing memorandum argued at length for a lenient sentence because of them. At

the hearing, defense counsel renewed these arguments and read aloud a clinical report that

further detailed LoPapa’s health problems. Unsurprisingly, therefore, the District Court

noted that it was “fully aware” of LoPapa’s medical condition. App. 58. The District

Court then explicitly referenced LoPapa’s medical condition in its consideration of the

§ 3553(a) factors. It stated, for example, that it was “very clear” that LoPapa’s “medical

situation does not prohibit you or stop you from engaging in criminal activity,” App. 84–

85, and that

       you may not be in the best physical health, but you’re obviously very mentally
       capable of creating schemes of falsely representing yourself, creating
       documents to support whatever profession you’ve chosen at that particular
       time . . . or whatever it is you need to be to effectuate your fraud, your mental
       capacity allows you to do that. And you’re very much alert when it comes to
       basically ridding people of their money.

App. 85. Finally, the District Court observed that it was “confident that the Bureau of

Prisons [was] capable of taking care of whatever your medical situation is” and would

“provide the necessary care and attention.” App. 86–87.

       Despite LoPapa’s health problems, the District Court found that other factors

justified a five-month upward variance. It observed that LoPapa had a long history of

fraud schemes, was on probation for another state fraud conviction when he perpetrated

his investment and social security fraud, and seemingly had learned nothing from his prior

acts. Based on these facts and others, the District Court concluded that an above-
                                              10
Guidelines sentence served the sentencing purposes of providing just punishment for the

offense, protecting the public from future crimes, and promoting respect for the law.

Once again, the District Court’s conclusion is well supported by the record, so we find no

abuse of discretion.

                                             D

       Finally, LoPapa argues that the District Court should have granted his request to

postpone the sentencing hearing. We review a district court’s refusal to grant a

continuance for abuse of discretion. United States v. Olfano, 503 F.3d 240, 245 (3d Cir.

2007). We will “only vacate a sentence based on a refusal to continue a sentencing

hearing where the denial was arbitrary and it substantially impaired the defendant’s

opportunity to receive a fair sentence.” Id. at 246.

       LoPapa has shown neither that the denial was arbitrary nor that it substantially

impaired his opportunity to receive a fair sentence. The District Court had already

postponed sentencing multiple times at LoPapa’s request, and stated that it would not

have permitted Rambarran to appear in place of Roth if it had known LoPapa was going

to request an additional continuance. Sentencing in the case had been pending for over a

year since LoPapa’s guilty plea. Under these circumstances, the District Court’s denial of

a continuance was not arbitrary. See, e.g., United States v. Midgett, 488 F.3d 288, 301

(4th Cir. 2007). Furthermore, LoPapa has not identified any additional evidence or

arguments that he would have presented at a later sentencing hearing, and thus has not

                                             11
shown that that the denial substantially impaired his opportunity to receive a fair sentence.

See, e.g., Olfano, 503 F.3d at 246.

                                             III

       For the foregoing reasons, we will affirm the judgments of the District Court.

                                             12