U.S. v. Baldwin

• Decision Date: 12 July 2005
• Docket Number: No. 03-3721.,03-3721.
• Citation: 414 F.3d 791
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Lloyd BALDWIN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

414 F.3d 791

UNITED STATES of America, Plaintiff-Appellee, v. Lloyd BALDWIN, Defendant-Appellant.

No. 03-3721.

United States Court of Appeals, Seventh Circuit.

Argued November 3, 2004.

Decided July 12, 2005.

Brandon Fox (argued), Office of the United States Attorney, Chicago, IL, for Plaintiff-Appellee.

Thomas M. Staunton (argued), Fredrick E. Vars, Miller, Shakman & Hamilton, Chicago, IL, for Defendant-Appellant.

Before FLAUM, Chief Judge, and EASTERBROOK and SYKES, Circuit Judges.

SYKES, Circuit Judge.

Lloyd Baldwin was convicted of four counts of wire fraud for his involvement in a phony "prime bank funding program" that successfully separated Joe Piscopo from $3 million of his money. Baldwin's first contention on appeal is that one count of the indictment was returned one day after the statute of limitations on that offense had expired. No one noticed this at the time, although the parties now agree that Count 1 was untimely. Because the statute of limitations argument was never raised in the district court, our review is for plain error. Baldwin's sentence on Count 1 is concurrent to the other counts, so the only additional punishment imposed on the admittedly untimely count is the $100 special assessment, which is not serious enough to warrant correction as plain error. See United States v. McCarter, 406 F.3d 460, 464 (7th Cir.2005).

Baldwin also challenges the sufficiency of the evidence to convict, but he has not carried his heavy burden on this argument. Finally, Baldwin challenges aspects of his sentence and the district court's restitution order. The district court initially sentenced Baldwin to four concurrent 78-month terms of imprisonment, well below the 20-year statutory maximum in effect when Baldwin was before the court. But Baldwin's frauds occurred in the mid-1990s when the statutory maximum for wire fraud was only five years. Realizing its mistake, the court corrected the sentence, but it did so well beyond the seven-day time period for correcting an erroneous sentence under Federal Rule of Criminal Procedure 35(a). We therefore vacate Baldwin's sentence and remand for resentencing. Not everything needs to be redone, however. We reject Baldwin's challenge to the district court's imposition of a two-level sentence enhancement under the Sentencing Guidelines for abuse of a position of trust. We also reject his argument that the district court's $3 million restitution order violates the Ex Post Facto Clause of the Constitution.

I. Background

Joseph Piscopo met Lloyd Baldwin at a trade show in the early 1970s when both men were working in the computer software industry. Piscopo later hired Baldwin as a vice president in the firm he owned; after two years in that position, Baldwin left on good terms. The two men kept in touch and in 1993 Baldwin approached Piscopo with an investment opportunity that he called a "prime bank funding program." The pitch was simple and, it turned out, completely fraudulent. Baldwin said he would raise $40 million from various individuals and loan the money to unnamed "large-scale" European banks, which would use it to fund their cash reserves. Baldwin promised Piscopo that if he agreed to invest, he would reap a 12% return on a three-week investment or a 36% return on a nine-week investment. Baldwin offered his "personal guarantee" of the investment and assured Piscopo that his principal would "never be at risk." Baldwin also told Piscopo that by channeling the proceeds through various corporate entities Baldwin set up in the Cayman Islands, profits on the plan would be tax free. Piscopo fell for it.

Piscopo signed a joint venture agreement with one Floyd Reeves, an associate of Baldwin, and agreed to invest $1 million in the "program" for a minimum of three weeks and a maximum of nine weeks, for an expected maximum return of 36%. He wired the funds to a bank account in Spain owned by Reeves. Within days more than $950,000 of the money was transferred from Reeves' account to two accounts in New York, and within a week only 8¢ remained in the Spanish bank account. Where the money went from there is unclear.

As the end of the investment period approached, Baldwin told Piscopo that the "program" had done even better than expected and that Piscopo stood to earn a 40.4% profit. Encouraged by the good news, Piscopo agreed to reinvest his $1,404,000 and invest an additional $2 million in a new "program" on the same terms. To that end Piscopo signed another joint venture agreement, this time with Daric Corporation, one of the Cayman Islands companies set up and controlled by Baldwin. The terms of the agreement were the same as before. In addition, Piscopo was promised that the $2 million principal was guaranteed by a company called Equity Funding, another entity controlled by Baldwin. On October 20, 1993, Piscopo wired $2 million from a bank account in Chicago to an offshore European bank account owned by Daric Corporation. Unbeknownst to Piscopo, the funds were then immediately wired to a bank account controlled by Baldwin in the Cayman Islands. No money was ever invested in European bank reserve funds.

Near the end of the second investment period, in January 1994, Piscopo told Baldwin that he did not want to roll over his earnings again and instructed Baldwin to return the funds. Over the next 21 months Baldwin prevaricated, offering Piscopo a slew of excuses why the money, though perfectly "safe," could not yet be returned. Near the end of 1995 Piscopo told Baldwin that he was considering legal action and Baldwin then disappeared. Piscopo never received a return of his $3 million investment.

A grand jury was convened to investigate Baldwin's activities. The investigation required evidence from Spain, so the government requested a court order pursuant to 18 U.S.C. § 3292 suspending the five-year statute of limitations prescribed by 18 U.S.C. § 3282. See 18 U.S.C. § 3292 (empowering the district courts to suspend statutes of limitations during the time required for the United States to gather evidence from foreign countries). On October 29, 1998, Acting Chief Judge Charles Kocoras issued a sealed, ex parte order suspending the running of the statute of limitations from September 29, 1997 (the date the government formally requested Spain's assistance), to June 1, 1998 (the date on which Spain took final action on the government's request). On April 21, 1999, the grand jury issued an indictment charging Baldwin with four counts of wire fraud in violation of 18 U.S.C. § 1343 in connection with his scheme to defraud Piscopo. The offense charged in Count 1 occurred on October 20, 1993; Count 2 on April 14, 1994; Count 3 on May 24, 1994; and Count 4 on July 15, 1994. As the government now concedes, and as will be discussed more fully below, the indictment was returned one day after the expiration of the extended statute of limitations on Count 1.

Baldwin did not raise the statute of limitations argument in the district court. He waived a jury trial and the case was tried to the court, United States District Judge Blanche Manning, presiding. On May 30, 2003, Judge Manning issued a written decision convicting Baldwin on all four counts. On October 2, 2003, the case proceeded to sentencing and the court applied U.S.S.G. § 2F1.1 (1995), applicable to offenses involving fraud or deceit. To a base offense level of 6 the judge added 13 levels for the amount of loss (it being more than $2.5 million but less than $5 million). The judge also added two levels each for Baldwin's role in the offense, more than minimal planning, violation of a position of trust, and providing false testimony at trial, yielding a total adjusted offense level of 27. In light of Baldwin's criminal history category of I, the Guidelines prescribed a sentencing range of 70 to 87 months. Declining the government's request for an upward departure based on uncharged relevant conduct, the district court selected a sentence roughly in the middle of the guidelines range and imposed four concurrent 78-month terms of imprisonment followed by a three-year term of supervised release.

Although this sentence was far below the 20-year maximum set by the version of 18 U.S.C. § 1343 in effect at the time he was sentenced, Baldwin's convictions stemmed from acts that occurred when the statutory maximum was only five years. See 18 U.S.C. § 1343 (1995); Pub.L. No. 107-204, § 903(b) (2002). Baldwin's sentence was therefore illegal. The government informed the court of the mistake; on January 16, 2004, the judge amended the sentence. She imposed a 60-month term of imprisonment on Count 1 and three concurrent 18-month terms of imprisonment on the remaining counts, to run consecutive to the 60 months on Count 1. In this way the judge preserved the original total of 78 months' imprisonment while staying within the statutory maximum on each count. Baldwin timely appealed.

II. Discussion

A. Challenges to Convictions

1. Statute of Limitations on Count 1

The statute of limitations for wire fraud is five years and begins to run on the date the illegal communication is sent. 18 U.S.C. § 3282; United States v. Tadros, 310 F.3d 999, 1006 (7th Cir.2002) (each wire is a separate offense). Count 1 of Baldwin's indictment was based on Baldwin's October 20, 1993, wire transmission of the $2 million he fraudulently induced Piscopo to transfer to the Daric Corporation account. As noted earlier, Acting Chief Judge Kocoras ordered a suspension of the statute of limitations pursuant to 18 U.S.C. § 3292 for a period of approximately seven months. Under 18 U.S.C. § 3292(c)(2), however, when foreign authorities take final action on the United States' request for evidence before the untolled statute of limitations would have expired, the judicial suspension cannot exceed six months. The Spanish authorities took final action on the government's request before the statute of limitations would otherwise have expired, so the limitations...