United States v. Lascola ( 2002 )

[NOT FOR PUBLICATION--NOT TO BE CITED AS PRECEDENT]
United States Court of Appeals
For the First Circuit
No. 01-1819
UNITED STATES,
Appellee,
v.
TODD J. LASCOLA,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Mary M. Lisi, U.S. District Judge]
Before
Boudin, Chief Judge,
Torruella and Howard, Circuit Judges.
Todd J. Lascola on brief pro se.
Margaret E. Curran, United States Attorney, Donald C.
Lockhart, Assistant United States Attorney, and Ira Belkin,
Assistant United States Attorney, on brief for appellee.
September 3, 2002
Per Curiam. Todd J. LaScola, a licensed stockbroker,
pled guilty to nine counts of a 55 count indictment, alleging
mail fraud, 18 U.S.C. §1341, wire fraud, 18 U.S.C. § 1343, and
embezzlement, 18 U.S.C. § 664. His crimes comprised several
schemes involving two companies in which he was engaged, CPA
Advisors Network ("CPA") and CPI Investment Management, Inc.
("CPI"). LaScola was sentenced to 96 months imprisonment,
three years supervised release, and restitution of
approximately $8.1 million dollars. He challenges several of
the sentencing guideline calculations. We affirm.
As an initial matter, LaScola makes an Apprendi type
argument, see Apprendi v. New Jersey, 530 U.S. 466 (2000),
asserting that none of the upward adjustments (apart from
minimal planning) was authorized because none was specifically
mentioned in the indictment or in the plea agreement. This
argument was not raised in the district court and, thus, is
subject to the plain error standard. There was no error, let
alone plain error. Apprendi does not apply to guideline
findings that increase the sentence but do not elevate it
beyond the statutory maximum. United States v. Caba, 241 F.3d
98, 101 (1st Cir. 2001). The statutory maximum for each count
of conviction was five years. LaScola received a 60 month term
of imprisonment on Count 1 (mail fraud) and concurrent 36
months imprisonment on the remaining eight counts to be served
consecutive to the 60 month term imposed on Count 1 (for a
total term of 96 months).
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§2F1.1(b)(1) - Amount of loss1
The Presentence Report ("PSR") calculated that the
total loss amount generated by LaScola's criminal conduct was
between $5 and $10 million dollars and thus proposed a 14 level
increase in the base offense level. See §2F1.1(b)(1)(O). In
the district court, LaScola argued that the appropriate amount
of loss was between $2.5 and $5 million dollars, reflecting a
13, rather than 14, level increase. See §2F.1.1(b)(1)(N).
LaScola argued that he did not pocket the $6 million obtained
from the CPA clients to "purchase" the RBG Notes from Local
99's Plan and that he did not intend the loss to the CPA
clients. Rather, he hoped that the RBG Notes would mature and
argued that, in fact, there was still some value to these
Notes. He analogized to fraudulent loan cases and suggested
that, just as the value of the assets pledged to secure a
fraudulent loan reduces the amount of loss in a fraudulent loan
1
We refer to the November 2000 Sentencing Guidelines. LaScola
did not object to the use of this version in the district court.
On appeal, he refers to the November 1998 version of the
Guidelines, contending that "[e]xcept for clarifications, the
Guidelines in effect as of the last date of criminal activity, in
this case 1998 Guidelines, are to be used." Reply brief at p.15,
n.1. In fact, however, "[b]arring any ex post facto problem, a
defendant is to be punished according to the guidelines in effect
at the time of sentencing." United States v. Harotunian, 920 F.2d
1040, 1041-42 (1st Cir. 1990). In any event, for purposes of this
case, there is no dispositive distinction between the 1998 and 2000
versions.
We note that, effective November 2001, the Sentencing
Commission deleted the separate fraud guideline (§2F.1),
consolidating it with the theft guideline (§2B1.1), and resulting
in a completely rewritten §2B1.1. We use the former designations
of §2F1.1.
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case, so too the "value" of the RBG Notes should reduce the
amount of loss attributed to his conduct. The court rejected
that assessment, instead calculating the loss as the amount of
money that LaScola improperly transferred from the various
accounts -- well in excess of $5 million -- and concluding that
LaScola's purported expectation that the Notes would mature was
irrelevant.
"We review the district court's interpretation of the
loss provisions of the Guidelines de novo and review its
factual findings only for clear error." United States v.
Blastos, 258 F.3d 25, 30 (1st Cir. 2001). On appeal, LaScola
contends that, although he was convicted of fraud, the court
erroneously treated his conduct as a theft to determine the
amount of loss. There was no error. The commentary to the
fraud guideline itself provides for such cross-reference. See
U.S.S.G. §2F1.1, comment. (n.8). Further, LaScola continues to
assert that his case is analogous to a fraudulent loan case and
thus he should be credited with the "value" of the RBG Notes to
offset any loss to his victims. Amazingly, although LaScola
conceded in the district court that the loss was $2.5 and $5
million, he now contends on appeal that the net loss to the
victims was $0.2 "The Guidelines recognize loan fraud as a
specific exception to the usual methods of calculating loss set
2
He relies on purported property appraisals of the real estate
developments supported by the RBG Notes, the worthiness of which is
unknown, and, more importantly, are not properly before this court
as they are not part of the district court record.
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forth in §§2F1.1 and 2B1.1." United States v. Stein, 233 F.3d
6, 18 n.8 (1st Cir. 2000), cert. denied, 532 U.S. 943 (2001).
LaScola's attempt to mark his scheme as analogous to loan fraud
is a grievous misfit. There was no error in the district
court's rejection of the attempt.
§2F1.1(b)(6)(C) - Sophisticated means
In the district court, LaScola argued that there was
significant overlap between the "more than minimal planning"
adjustment, §2F1.1(b)(2)(A), and the "sophisticated means"
adjustment, §2F1.1(b)(6)(C), such that it amounted to double
counting. LaScola did not renew this contention in his initial
appellate brief and the government contends that he has
abandoned that argument. LaScola tardily attempts to resurrect
this double counting argument in his reply brief but, as we
have repeatedly stated, "a legal argument made for the first
time in an appellant's reply brief comes too late and need not
be addressed." United States v. Brennan, 994 F.2d 918, 922 n.7
(1st Cir. 1993).
On appeal, LaScola contends that the district court
determined that the "sophisticated means" adjustment was
warranted because he used a computer system to execute his
crimes and argues that this was error because operation of the
computer program took little skill or training. LaScola also
argues that the computer software was used simply to carry out
the fraud and not to conceal it and, in fact, its use insured
the detection of the fraud because it would reveal the accounts
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affected, by how much, and to where the missing funds had been
sent.
LaScola's description of the basis of the court's
ruling is deliberately myopic. The district court found the
application of the "sophisticated means" adjustment was
warranted not because LaScola used a computer system but
because he not only stole the existing funds from CPA clients'
accounts but converted those accounts to margin accounts,
giving him the ability to borrow additional money in the
clients' names.3 The emphasis and impetus for the finding of
"sophisticated means" was not, as LaScola portrays it, on the
use of a computer system itself but on how LaScola used that
system in executing the offense by accessing his clients'
accounts and converting them to margin accounts enabling him to
steal more than the existing funds. There was no error either
in the court's factual finding or in its application of the
sophisticated means adjustment. See United States v. Humber,
255 F.3d at 1308, 1311 (11th Cir. 2001) (reciting standard of
review).
§2F1.1(b)(8)(A) - Failure of a financial institution
In the district court, LaScola argued against the
application of this guideline on the ground that both CPI and
CPA were purely sales organizations that, although may have
3
LaScola contends that the district court "erred" in stating
that he "took" the passwords. LaScola says that he did not take
the passwords; rather, he says, he instructed an employee with the
password to execute the transaction. This is a meaningless
quibble.
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facilitated trades, never actually executed trades nor
custodied assets resulting from such trades. He argued for a
distinction between an "introducing broker" which has a limited
capacity to perform functions and a "clearing broker" which is
the custodian of securities and can clear and settle trades in
a client's accounts. According to LaScola, CPI simply managed
assets and CPA simply processed transactions, relying upon
Wexford (the subsidiary of Prudential Securities), Fleet Bank
and other financial institutions to execute trades or custody
assets and those financial institutions, argued LaScola,
remained safe, sound and solvent. The district court concluded
that both CPI and CPA met the guideline definition of financial
institution and became insolvent as a result of LaScola's
conduct. It rejected LaScola's distinction between
"introducing broker" and "clearing broker" as unavailing in
light of the clear language of the guideline definition. See
U.S.S.G. §2F1.1, comment. (n.19).
On appeal, LaScola renews his argument but provides
no persuasive authority. There was no error in the application
of this guideline adjustment. See United States v. Ferrarini,
219 F.3d 145, 159 (2d Cir. 2000) (reciting standard of review),
cert. denied, 532 U.S. 1037 (2001).
§3A1.1(b)(1) - Vulnerable victim
At sentencing, LaScola withdrew any objection to the
application of the vulnerable victim adjustment. LaScola was
personally questioned by the district court as to whether he
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understood that he was waiving his right to challenge that
adjustment and he replied in the affirmative and stated that he
had no questions about his waiver. Sentencing Tr. of 5/22/01
at p.5. Nonetheless, LaScola, on appeal, now argues that the
application of this guideline was error. This challenge is
waived. See United States v. Ciocca, 106 F.3d 1079, 1085 (1st
Cir. 1997) (refusing to review waived issue).
Departure
At sentencing, LaScola made an oral motion for
departure, arguing that the resulting guideline sentencing
range of 87 to 108 months was far in excess of the sentences
imposed in other fraud cases in the districts of Rhode Island
and Massachusetts. In support, he proffered information he
apparently had obtained simply from the face of the court
dockets, i.e., docket numbers, term of imprisonment imposed,
and amount of restitution ordered. He conceded that he was
unaware of whether adjustment factors, such as vulnerable
victim and/or sophisticated means, were applied in these cases.
The district court rejected LaScola's proffered material as
insufficient to find that his case lay outside the heartland of
cases and denied a downward departure.
On appeal, LaScola reiterates his downward departure
argument, albeit in the guise of a "heartland argument," but,
as we have repeatedly held, a district court's refusal to
depart downward is not reviewable unless based on a mistake of
law. See United States v. Bunnell, 280 F.3d 46, 50 (1st Cir.
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2002). There was none here. The district court recited the
proper standard for finding a departure but found LaScola's
proffer insufficient to support one. Moreover, we have held
"the fact that the national median for a broadly stated offense
type may be above or below a particular defendant's GSR cannot
be used to justify a sentencing departure." United States v.
Martin, 221 F.3d 52, 57 (1st Cir. 2000).
The judgment of the district court is affirmed.
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