United States v. Rubbo ( 2020 )

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS January 27, 2020
Christopher M. Wolpert
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 18-1342
PASQUALE RUBBO, a/k/a Patsy Rubbo,
a/k/a Anthony Rubbo,
Defendant - Appellant.
_________________________________
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:17-CR-00417-RBJ-3)
_________________________________
Rick E. Bailey, Conlee, Schmidt & Emerson, L.L.P., Wichita, Kansas, for the Appellant
Pasquale Rubbo.
Marissa R. Miller, Assistant United States Attorney (Jason R. Dunn, United States
Attorney, with her on the brief), Office of the United States Attorney for the District of
Colorado, Denver, Colorado, for the Appellee.
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Before MORITZ, McKAY, and CARSON, Circuit Judges.
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CARSON, Circuit Judge.
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This case arose out of a fraudulent business scheme involving the sale of the
“Scrubbieglove” cleaning product. Defendant Pasquale Rubbo (“Defendant”) and
other co-conspirators lied to investors to solicit money, ultimately defrauding them of
more than six million dollars. Defendant pleaded guilty to two fraud-related charges,
but now appeals his sentence because the government breached the Plea Agreement.
Our jurisdiction arises under 28 U.S.C. § 1291. We hold the government did
not breach the Plea Agreement and, therefore, dismiss Defendant’s appeal.
I.
A grand jury returned an indictment against Defendant for fraud, conspiracy to
commit fraud, use of interstate commerce to conduct fraud, and engaging in monetary
transactions with funds derived from fraud.
The conspirators lured potential investors to the “Scrubbieglove” by lying
about high returns on investment, potential and ongoing business deals, and how they
would use and invest funds. 1 They also misrepresented the Scrubbieglove’s
production demand. They falsely told investors that the Scrubbieglove required
substantial financing because of deals with QVC, Wal-Mart, Walgreens, and other
major retailers. In reality, beyond producing a few samples, the conspirators never
manufactured any Scrubbiegloves. Instead, the conspirators transferred investor
funds to their own personal bank accounts.
Defendant’s primary role in the scheme involved intimidating and threatening
investors to ensure their silence. Defendant, for example, called investors and
threatened to sue and take away their investment money if they spoke with law
enforcement.
1
As reflected in the indictment, the conspirators originally named the
Scrubbieglove “Spongebuddy”, but they later rebranded it “Scrubbieglove.”
2
Defendant ultimately pleaded guilty to conspiracy to commit fraud and to
engaging in a monetary transaction involving the proceeds of criminal activity.
Defendant also waived his right to appeal the sentence. In exchange, the government
dismissed the remaining counts and, if Defendant “fully and truthfully” cooperated,
agreed to file a motion for a downward departure at sentencing. The government
specified that “based on the facts known to the government as of the date of the Plea
Agreement,” it expected to recommend a twenty-percent departure “from the high-
end of the applicable guideline range.”
After being released on bond, however, Defendant communicated with a
known witness in the case—participating in phone calls, email exchanges, and wire
transfers to license the Scrubbieglove through the witness’s company. Defendant’s
actions violated the conditions of his bond, which prohibited him from contacting any
victim or witness in the case. Defendant neither informed the government of his
unpermitted contact with the witness, nor of his ongoing efforts to license the
Scrubbieglove.
After the government learned of Defendant’s conduct, it recommended only a
fifteen-percent departure rather than twenty percent at sentencing. Defendant did not
object to the recommendation and did not respond to the government’s motion for
downward departure. 2 The district court accepted the recommendation and sentenced
Defendant to 106 months’ imprisonment.
2
Defendant admits he did not preserve his objection below, so we review for
plain error only. Under the plain error standard, Defendant must first demonstrate an
3
Afterward, Defendant appealed, arguing the government could not enforce the
appellate waiver in his Plea Agreement because it breached the agreement by not
recommending a twenty-percent departure. We review the question de novo. United
States v. Guzman, 318 F.3d 1191, 1195 (10th Cir. 2003).
II.
“[A]n appellate waiver is not enforceable if the Government breaches its
obligations under the plea agreement.” United States v. Rodriguez-Rivera, 518 F.3d
1208, 1212 (10th Cir. 2008). We must therefore determine whether the government
breached. To do so, “we apply a two-step process: (1) we examine the nature of the
government’s promise; and (2) we evaluate this promise in light of the defendant’s
reasonable understanding of the promise at the time the guilty plea was entered.”
United States v. Brye, 146 F.3d 1207, 1210 (10th Cir. 1998). To evaluate the
government’s promise, we “apply general principles of contract law” based on “the
express language used in the [plea] agreement.” Id. And because the government
drafted the Plea Agreement, we construe all ambiguities against the government. Id.
A.
Defendant contends the government breached the Plea Agreement because it
promised – and later refused – to recommend a twenty-percent downward departure.
actual error. United States v. Kearn, 863 F.3d 1299, 1305 (10th Cir. 2017). Because
we conclude the government did not breach the Plea Agreement, Defendant fails at
step one. We therefore do not address the remaining elements of plain error review.
4
To determine the government’s obligations, we examine the express language used in
the agreement. The agreement states:
Provided that the defendant continues to fully and truthfully cooperate
with the government as described above, as determined in the
government’s sole discretion, the government agrees that it will file . . .
a motion for downward departure, pursuant to Section 5K1.1 of the
Sentencing Guidelines and Title 18, United States Code, Section
3553(e). Based on the facts known to the government as of the date of
the Plea Agreement, the government expects to file a motion for
downward departure pursuant to Section 5K1.1 recommending a
departure of twenty percent to be calculated from the high-end of the
applicable guideline range.
ROA, Vol. 1 at 36–37 (emphasis added). The government agreed to file a motion for
downward departure so long as Defendant “fully and truthfully” cooperated with the
government. The government also stated that it expected to recommend a twenty-
percent departure “based on the facts known to the government as of the date of the
Plea Agreement.” Thus, the express language shows the government did not
unequivocally promise to recommend a departure of a certain percentage. United
States v. Robertson, 45 F.3d 1423, 1443 (10th Cir. 1995) (reasoning that the
government did not breach plea agreement where the promise of a specific sentencing
recommendation was “expressly premised on the [defendant’s] ‘tentative’ criminal
history”). Instead, the government conditioned its obligations on Defendant’s full
and truthful cooperation, as well as facts known to it at the time of execution. The
government also retained sole discretion to evaluate Defendant’s cooperation. The
government consequently made no promise to make a specific sentencing
recommendation.
5
Defendant next argues the government breached the agreement because it
made a smaller downward departure recommendation for reasons unrelated to
Defendant’s cooperation. The Plea Agreement states:
The defendant agrees to cooperate fully, honestly, without reservation,
and affirmatively with the government relating to any matter being
investigated by the government about which the defendant may possess
knowledge, information, or materials.
ROA, Vol. 1 at 35. The agreement obligated Defendant to cooperate affirmatively
with the government on any matter under investigation. Defendant concedes that
while out on bond, he and his co-conspirators attempted to license the
Scrubbieglove—the product at the center of the government’s case. Defendant also
does not dispute that he contacted a known witness in the case, which violated his
bond conditions. Defendant withheld this information from the government despite
his affirmative obligation to cooperate on any matter relating to the government’s
investigation. United States v. Lezine, 166 F.3d 895, 904 (7th Cir. 1999) (holding
that the defendant failed to “fully and truthfully cooperate with Government” where
he made “misrepresentations to probation officers”).
Defendant’s attempts to license the Scrubbieglove, and his communications
with a witness relate to a “matter being investigated by the government” as described
in the Plea Agreement. The government unsurprisingly determined that Defendant’s
conduct warranted a reduced departure recommendation. Given that Defendant
withheld information relating to the government’s investigation, it did not breach the
Plea Agreement by recommending a fifteen-percent departure at sentencing.
6
Because the government did not breach the Plea Agreement, the appellate-
waiver provision in the agreement bars Defendant’s appeal.
APPEAL DISMISSED.
7