768 F.3d 509 (6th Cir. 2014), 12-4288, United States v. Snelling

Docket Nº:12-4288
Citation:768 F.3d 509
Opinion Judge:BOGGS, Circuit Judge.
Party Name:UNITED STATES OF AMERICA, Plaintiff-Appellee, v. JASEN SNELLING, Defendant-Appellant
Attorney:Kevin M. Schad, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Cincinnati, Ohio, for Appellant. Christopher K. Barnes, UNITED STATES ATTORNEY'S OFFICE, Cincinnati, Ohio, for Appellee.
Judge Panel:Before: BOGGS and ROGERS, Circuit Judges; and STEEH, District Judge.[*]
Case Date:September 22, 2014
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
SUMMARY

Snelling defrauded investors by soliciting funds for two fictitious financial companies, CityFund and Dunhill, which supposedly invested clients’ money in overseas mutual funds and overnight depository accounts, and promised investors an annual return of 10 to 15%. In reality, Snelling and his partner operated a Ponzi scheme in which “returns” on earlier investors’ capital were part of new... (see full summary)

 
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Page 509

768 F.3d 509 (6th Cir. 2014)

UNITED STATES OF AMERICA, Plaintiff-Appellee,

v.

JASEN SNELLING, Defendant-Appellant

No. 12-4288

United States Court of Appeals, Sixth Circuit

September 22, 2014

Appeal from the United States District Court for the Southern District of Ohio at Cincinnati. No. 1:12-cr-00058--Herman J. Weber, District Judge.

ON BRIEF:

Kevin M. Schad, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Cincinnati, Ohio, for Appellant.

Christopher K. Barnes, UNITED STATES ATTORNEY'S OFFICE, Cincinnati, Ohio, for Appellee.

Before: BOGGS and ROGERS, Circuit Judges; and STEEH, District Judge.[*]

OPINION

Page 510

BOGGS, Circuit Judge.

Defendant-Appellant Jasen Snelling appeals a 131-month prison sentence imposed pursuant to a plea agreement. In the agreement, Snelling admitted to charges of conspiracy to commit mail and wire fraud, obstruction of justice, and tax evasion for his part in an investment scheme that defrauded investors of nearly $9 million. Snelling challenges the sentence based on an allegedly faulty Guidelines-range calculation that employed a loss figure that did not take into account the sums paid back to his Ponzi scheme's investors in the course of the fraud.

For the reasons below, we vacate the sentence of the district court and remand the case for resentencing.

I

In June 2012, Snelling was named in an information for his part in a Ponzi scheme that defrauded investors by soliciting funds for two fictitious financial companies, CityFund and Dunhill. These companies supposedly invested their clients' money in overseas mutual funds and overnight depository accounts, activities that promised investors an annual return of 10-15%. In reality, Snelling and his partner operated a Ponzi scheme in which the " returns" on earlier investors' capital were simply a portion of new investors' deposits. The remainder of the new deposits were diverted to Snelling and his partner. The two of them used the money to buy vacation houses and boats, pay private-school tuition, and otherwise live extravagantly. Among the various tactics employed by the scheme were the intentional targeting of victims' IRA and 401(k) accounts, the issuance of false quarterly statements by mail and, when confronting their investors' suspicions, the production of false trading-account records. They also provided false documents, including the falsified trading-account statements, to a federal grand jury. Those documents reflected a balance of $8.5 million in CityFund / Dunhill's

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account when, in fact, it held just $995.88. Neither Snelling nor his partner paid taxes on the diverted funds.

The information contained three counts: conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. § 1349; obstruction of justice, in violation of 18 U.S.C. § § 1519 and 2; and tax evasion, in violation of 26 U.S.C. § 7201. Snelling signed a plea agreement, admitting all three of the charges in the information. The plea agreement contained reference to the very dispute that is at issue in this case: the parties' divergent offense-level calculations for the charge of mail and wire fraud. Depending upon the loss figure established at sentencing, different sub-sections of U.S.S.G. § 2B1.1(b)(1), corresponding to different offense-level enhancements, would apply. The plea agreement indicated that it was Snelling's position that he should receive credit for money returned to the victims during the scheme.

The probation office prepared a Presentence Investigation Report (PSR), which calculated the sentencing-guidelines range for the charge of mail and wire fraud according to the method proposed by the government in Snelling's plea agreement. That calculation reflected a total loss figure of over $7,000,000, which, in turn, yielded an offense-level enhancement of 20 levels under U.S.S.G. § 2B1.1(b)(1)(K). The PSR, like the plea agreement, duly recorded Snelling's objection to the government's calculations as well as his different reading of the Guidelines, which would have yielded a loss figure of less than $7,000,000, based on the Guidelines' requiring the deduction of sums returned to investors in the course of a fraud. Snelling also objected to the PSR's Guidelines calculation in a sentencing memorandum. The...

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