Court Opinion

ID: 9486308
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:43:54.680226+00
Date Added: 2024-06-11T17:51:38.132234
License: Public Domain

MANION, Circuit Judge,
dissenting.
During a period of over six years, Richard Holiusa enticed “investors” to give him a total of over $11 million, supposedly so he could invest their money in silver futures and high-yield government securities. Instead, he lived high on the hog. He perpetuated his lavish lifestyle by placating earlier investors with periodic payments of money he collected from more recent victims of his scheme. When his six-year odyssey ended, he apparently had spent only $3.5 million on himself; the rest he returned to his victims, keeping them at bay.
This ease involves a straightforward application of “loss” under U.S.S.G. § 2F1.1. The district court found that at the time Holiusa solicited funds from the investors, “he never intended to invest the money taken from the victims,” and “that the intent of this defendant was to defraud all the victims of their money.” At 1045 (quoting Tr. at 164-65). Given this finding — which we are not free to disregard unless clearly erroneous, see U.S.A. v. Boyle, 10 F.3d 485, 490 (7th Cir.1993) — Holiusa has caused a “loss” under § 2F1.1 for the full amount of the money as soon as he took it from his victims. How he planned to use the money is irrelevant under the Guidelines because each time he took money from investors, he put their money “at risk” and left them without a “ready source of recompense.” See United States v. Mount, 966 F.2d 262, 266 (7th Cir.1992).
True, Holiusa did redistribute $8.6 million to many of his victims before his scheme fell apart; but in line with the district court’s finding, the money was stolen the day he received- it from his victims. Instead of corralling money from a few investors, then skipping town, Holiusa extended his scheme by giving back some money and taking in more. But all the while the money was totally “at risk.” He literally robbed Peter to pay Paul (whom he had defrauded earlier). As the district court found, in this case, robbing someone like Paul created the loss; using Peter’s money to temporarily buy off Paul did not eradicate the fact that Paul was robbed in the first place. “An embezzler who abstracts $10,000 to invest in the stock market causes a ‘loss’ of $10,000 even if he plans to repay before the next audit (to avoid detection) and even if he invests only in blue chip stocks.” Mount, 966 F.2d at 266. Therefore, for purposes of enhancement under § 2F1.1, the loss was the full $11.6 million, the total amount wrongfully taken from each investor and which had been put at risk when first taken.
The court compares the return of some of the fraudulently taken funds to the giving of a security or pledge of an asset. But a pledged asset is presumably not stolen property. If it were, it would not be treated as an offset; instead, it would be treated as part of a loss. The only “security” these investors had was Holiusa’s need to periodically transfer some money back in order to con the investors into thinking they were getting a good return on their money. In fact, the only “return” was money he defrauded from someone else. The investors held no independent asset as security while Holiusa maneuvered their money around. This process of partial return was an essential part of Holiusa’s “Ponzi” scheme,1 and any compari*1049son to a legitimate pledge or security is unfounded.
This case is no different than a series of thefts or embezzlements. Just as an embezzler causes loss under § 2F1.1 for the full amount taken, irrespective of his intention to repay, see Mount, 966 F.2d at 266, here too, each time Holiusa obtained money from an investor he caused an immediate loss for the full amount he took because he left each investor at risk without a ready source of recompense. Therefore, I would affirm the district court’s determination that the loss in this ease was the full $11,625,739.00, the amount Holiusa fraudulently took from his victims in the first place.

. This scheme derives its name from the notorious swindler, Charles Ponzi, who, starting in 1919, received $9,582,000 within a period of eight months by inducing investors to give him $100 for the promised repayment of $150. See United States v. Boula, 932 F.2d 651, 652 n. 1 (7th Cir.1991). See also, Bosco v. Serhant, 836 F.2d 271, 274 (7th Cir.1987) (Noting that the modus operandi of a Ponzi scheme is to use newly invested money to pay off old investors and convince them that they are "earning profits rather than losing their shirts.").