Court Opinion

ID: 2997265
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:35:05.006353+00
Date Added: 2024-06-11T12:13:54.461500
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 03-3557
UNITED STATES OF AMERICA,
                                                Plaintiff-Appellee,
                                 v.

PETER A. LOUTOS, SR.,
                                            Defendant-Appellant.

                          ____________
          Appeal from the United States District Court for
         the Northern District of Illinois, Eastern Division.
             No. 01 CR 852—William T. Hart, Judge.
                          ____________
   ARGUED APRIL 14, 2004—DECIDED SEPTEMBER 8, 2004
                     ____________

  Before BAUER, COFFEY, and KANNE, Circuit Judges.
  BAUER, Circuit Judge. On October 30, 2002, Peter Loutos
pleaded guilty to knowingly aiding and abetting an indi-
vidual in making a false statement for the purpose of open-
ing an account at the First of America Bank in violation of
18 U.S.C. §§ 1014 and 2. The district court imposed a 37-
month custodial sentence. For the reasons stated herein, we
affirm his conviction but remand to the district court for re-
sentencing.
2                                                 No. 03-3557

                      BACKGROUND
I. The Offense
   In June of 1996, Loutos and his co-defendant Daniel
Benson went to the First America Bank in Park Ridge,
Illinois. Loutos accompanied Benson to the bank to aid him
in opening a bank account for a corporation named Lennox
Investment Group, Ltd. (“Lennox”). At that time, Loutos
knew that Benson was not an owner, officer, or employee of
Lennox, and that Benson did not have the authorization
documents from Lennox that would enable Benson to open
a bank account on behalf of Lennox. At the bank, Loutos
and Benson met with a bank employee to open the Lennox
account. Loutos, an attorney who had a long relationship
with the bank, convinced the bank employee to open the
Lennox account without the usual corporate authorization
documents. As part of the application process, Benson and
Loutos each completed a deposit account signature card and
Benson completed a sole owner certification. To influence
the bank in opening the account, and in Loutos’ presence
and with his knowledge, Benson falsely represented that he
[Benson] was the sole owner of Lennox and he identified
Loutos as a signatory on the account.

II. The Guilty Plea
  On October 21, 2001, an indictment was returned, charg-
ing Loutos with eight counts of wire fraud in violation of 18
U.S.C. §§ 1343 and 2, one count of conspiring to commit
money laundering offenses in violation of 18 U.S.C. § 1956(h),
and seven counts of money laundering in violation of 18
U.S.C. §§ 1956(a)(1)(B)(i), 1957, and 2.1 However, on October
30, 2002, shortly before trial, a superseding information was

1
  The wire fraud scheme and related offenses will be referred to
as “investment fraud.”
No. 03-3557                                                        3

filed and, in accordance with a written plea agreement,
Loutos pleaded guilty to one count of making a false state-
ment on an application for the purpose of influencing a
federally insured bank in violation of 18 U.S.C. §§ 1014 and
2.2
  The provisional Sentencing Guidelines calculations con-
tained in the Plea Agreement indicated a Guideline sentenc-
ing range of 0-6 months of incarceration. At the time of the
plea, the court deferred its decision to accept or reject the
Plea Agreement. As had been scheduled, the trial of Loutos’
co-defendants began on November 4, 2002. On December
11, 2002, the jury returned a verdict of guilty as to all
counts against each defendant, except that they returned a
verdict of not guilty as to one count of violating § 1957.
  After receiving a copy of the presentencing report (“PSR”),
the district court requested that the parties address some
additional sentencing issues and indicated that Loutos’
sentencing range may exceed 0-6 months. Specifically, the
district court asked the parties to address the following
issues: (1) whether any of the fraud proven at the trial of
the other defendants was relevant conduct for Loutos’ of-
fense; (2) assuming relevant conduct, what amount of loss
should be calculated; and (3) assuming relevant conduct,
whether any of adjustment should be made based on
Loutos’ role in the offense.

III. Loutos’ Motion to Withdraw his Plea
  On February 27, 2003, Loutos filed a motion to vacate his
guilty plea based on four grounds: (1) that he has the
absolute right to withdraw his guilty plea because the court
has not actually accepted his plea in that U.S.S.G. § 6B1.1
precludes accepting the plea until after the supplemental or

2
    This charge and conduct will be referred to as “bank fraud.”
4                                                No. 03-3557

revised PSR has been considered; (2) that under Fed. R.
Crim. P. 11, he was not properly advised by the court prior
to pleading guilty; (3) that he has a fair and just reason for
withdrawing the plea because of a mutual mistake of the
parties as to the correct guideline calculation; and (4) that
he has a fair and just reason for withdrawing the plea
because he is legally innocent of the bank fraud. On April
3, 2003, the district court denied the defendant’s motion to
vacate his guilty plea in a forty-five page memorandum
opinion and order that addressed each of the claims raised
by Loutos.

IV. Sentencing
  On July 2, 2003, the district court entered another mem-
orandum and order concerning Loutos’ sentence. In his
opinion, the district court concluded that the $11 million in-
vestment fraud proven during the trial of Loutos’ co-defen-
dants should be considered as relevant conduct for the bank
fraud to which Loutos pleaded guilty. Based on this determi-
nation, the district court recalculated the defendant’s total
offense level under the Sentencing Guidelines to reflect this
relevant conduct. This resulted in a total offense level of 21.
A total offense level of 21 and a criminal history category of
I provided for a sentencing range of 37 to 46 months. The
district court sentenced Loutos to a term of 37 months in
prison. The question before this court is whether Loutos was
entitled to withdraw his guilty plea.

                       DISCUSSION
  Loutos argues on appeal that the district court abused its
discretion when it denied his motion to withdraw his guilty
plea. Federal Rule of Criminal Procedure 11(d)(2)(B)
permits a defendant to withdraw a guilty plea upon show-
ing any “fair and just reason.” United States v. Schuh, 289
No. 03-3557                                                  5
F.3d 968, 974 (7th Cir. 2002). It is the defendant’s burden
to demonstrate a fair and just reason. United States v.
Milquette, 214 F.3d 859, 861 (7th Cir. 2000). We review the
decision to deny a motion to withdraw for an abuse of dis-
cretion and the district court’s factual findings as to whether
the defendant has demonstrated a fair and just reason for
withdrawal under Rule 11(d)(2)(B) is reviewed for clear
error. United States v. Wallace, 276 F.3d 360, 366 (7th Cir.
2002).
  In a case where the defendant has filed a motion to vacate
his guilty plea before the district court and has appealed
the denial of that motion, we apply harmless-error analysis
to determine whether any errors at the time the plea was
taken justified relief under Rule 11(d)(2)(B). United States
v. Driver, 242 F.3d 767, 770 (7th Cir. 2001). “The harmless-
ness inquiry naturally should focus on ‘whether the defen-
dant’s knowledge and comprehension of the full and correct
information would have been likely to affect his willingness
to plead guilty.’ ” United States v. Fernandez, 205 F.3d 1020,
1024 (7th Cir. 2000) (quoting United States v. Padilla, 23
F.3d 1220, 1221 (7th Cir. 1994)).
  Loutos argues that the court failed to provide the required
Rule 11 warnings. In particular, Loutos objects to the
district court’s failure to specifically discuss appellate and
collateral review waivers contained in paragraph 12 of the
plea agreement as required by the Rule 11(b)(1)(N). While
not stated specifically, Loutos essentially argues that the
district court’s failure to satisfy this subsection of Rule 11
rendered his guilty plea involuntary. The law of this circuit
and the record in this case undermines Loutos’ argument.
  A plea of guilty is a “grave and solemn act.” United States
v. Ellison, 798 F.2d 1102, 1106 (7th Cir. 1986). “Entry of a
plea of guilty is not some empty ceremony, and statements
made to a federal judge in open court are not trifles that
defendants may elect to disregard.” United States v. Stewart,
198 F.3d 984, 987 (7th Cir. 1999). “A guilty plea admits, in
6                                                No. 03-3557

legal effect, the facts as charged.” United States v. Rietzke,
279 F.3d 541,545 (7th Cir. 2002).
  The purpose of a Rule 11 colloquy is to expose coercion or
mistake, and the district judge must be able to rely on the
defendant’s sworn testimony at that hearing. United States
v. Gwiazdzinski, 141 F.3d 784, 788 (7th Cir. 1998). Repre-
sentations and admissions made by a defendant in a plea
agreement and during a change of plea hearing are there-
fore entitled to “a presumption of verity.” United States v.
Pike, 211 F.3d 385, 389 (7th Cir. 2000). The validity of a
Rule 11 colloquy is based on the totality of the circumstances,
including such factors as “the complexity of the charge, the
defendant’s level of intelligence, age, and education, whether
the defendant was represented by counsel, the judge’s in-
quiry during the plea hearing and the defendant’s statements,
as well as the evidence proffered by the government.”
United States v. Blalock, 321 F.3d 686, 688-89 (7th Cir.
2003).
  In this case, the totality of the circumstances surrounding
Loutos’ October 30, 2002 plea colloquy establishes that his
plea of guilty was knowing and voluntary. The district court
properly noted in its April 3, 2003 memorandum opinion and
order addressing Loutos’ plea withdrawal motion, that the
background of the defendant may be considered as part of
the circumstances surrounding his guilty plea. Specifically,
the district court made the following factual findings
regarding Loutos’ age, experience, and education:
    Loutos was 70 years old, graduated from law school in
    1964, and also had an undergraduate degree in phar-
    macy. As had been disclosed during prior proceedings in
    this case. . . , Loutos was still a practicing attorney.
    Loutos should be considered to have a substantial level
    of sophistication, including some familiarity with the
    legal and court proceedings. Though there was no in-
    dication that his legal experience included working on
No. 03-3557                                                    7

    criminal matters, Loutos may be presumed to be fa-
    miliar with contracts and the need to carefully read
    documents that are contractual in nature and signed by
    the party.
Br. of Respondent at 18.
  Therefore, an examination of the totality of the circum-
stances surrounding Loutos’ Rule 11 plea colloquy reveals
that, despite the district court’s omission of a specific ap-
pellate waiver warning, his plea of guilty was knowing and
voluntary. Moreover, Loutos acknowledged under oath that
he understood the consequences of his guilty plea, that he
had not been pressured or coerced to plead guilty, and that
his plea was voluntary. These representations are pre-
sumed truthful. See Gwiazdzinski, 141 F.3d at 788. The
record clearly establishes that the district court’s omission
of an appellate waiver warning during the plea colloquy was
harmless, and the district court did not abuse its discretion.
  In addition to challenging the Rule 11 colloquy, Loutos
also claims that the district court abused its discretion in
denying his motion to withdraw his guilty plea because the
court rejected the parties’ plea agreement. This argument
comes from the defendant’s view that the district court com-
mitted error when it determined the $11 million investment
fraud proved during the trial of the co-defendants should be
considered relevant conduct during his sentencing on the
superseding information. Based on this ruling the district
court made a significant change to the sentencing guideline
calculations. The district court determined that fifteen
levels should be added to the guideline calculations as a
specific offense characteristic.
  The district court’s decision here does not effect the validity
of the defendant’s plea agreement nor does it effect the
court’s decision to deny his motion to withdraw because the
plea agreement itself says “it is understood by the parties
that the sentencing judge is neither a party to nor bound by
8                                                    No. 03-3557

this Agreement and, subject to the limitations of the
sentencing guidelines, may impose the maximum penalties as
set forth. . . .” Br. of Respondent at 24. However, as this
court recently determined in United States v. Booker, 2004
WL 1535858 (7th Cir. July 9, 2004), the Supreme Court’s
decision in Blakely v. Washington, 2004 WL 1402697 (U.S.
June 24, 2004), calls into question the constitutionality of
the U.S. Sentencing Guidelines. United States v. Ohlinger,
2004 WL 1714890 (7th Cir. Aug. 2, 2004). Under Blakely as
interpreted in Booker, a defendant has the right to have a
jury decide factual issues that will increase his sentence. Id.
at 3. “As Booker holds, the Guidelines contrary assertion
that the district judge may make such factual determina-
tions based upon the preponderance of the evidence runs
afoul of the Sixth Amendment.” Id. While here the district
judge based his findings on the jury’s verdict from Loutos’
co-defendant’s trial, which was beyond a reasonable doubt,
he still had to make additional factual findings that went
beyond Loutos’ admitted conduct.3 We therefore remand
Loutos’ case to the district judge for resentencing in light of
Booker.

3
  We have no need to determine whether it is proper under
Blakely to use jury findings from a co-defendant’s trial at all for
purposes of sentencing; we need only to note that the judge went
beyond the verdict here and made additional findings that raised
the defendant’s offense level and significantly raised his sentence.
No. 03-3557                                         9

A true Copy:
      Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit

               USCA-02-C-0072—9-8-04