United States v. Fiumano ( 2018 )

16-3250-cr
United States v. Fiumano
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 23rd day of January, two thousand eighteen.
PRESENT: REENA RAGGI,
GERARD E. LYNCH,
RAYMOND J. LOHIER, JR.,
Circuit Judges.
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UNITED STATES OF AMERICA,
Appellee,
v. No. 16-3250-cr
DIONYSIUS FIUMANO,
Defendant-Appellant,
PED ABGHARI, AKA TED ALLEN, JUSTIN
ROMANO,
Defendants.
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APPEARING FOR APPELLANT: DONNA NEWMAN, Law Offices of Donna R.
Newman, PA, New York, New York.
APPEARING FOR APPELLEE: EDWARD IMPERATORE, Assistant United
States Attorney (Patrick Egan, Diane Gujarati,
Assistant United States Attorneys, on the brief),
for Geoffrey S. Berman, United States Attorney
for the Southern District of New York,
New York, New York.
1
Appeal from final judgment of the United States District Court for the Southern
District of New York (John F. Keenan, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment entered on September 16, 2016, is VACATED and
REMANDED IN PART as to forfeiture, and AFFIRMED in all other respects.
Defendant Dionysius Fiumano was convicted after a jury trial of substantive and
conspiratorial wire fraud, see 18 U.S.C. §§ 1343, 1349, and 2, in connection with an
advance-fee mortgage modification scheme involving thousands of victims, many of
whom lost their homes as a result of the fraud. On appeal, Fiumano challenges only his
sentence, which ordered concurrent 16-year prison terms as well as forfeiture and
restitution, each in the amount of $11,975,404.13. We assume the parties’ familiarity
with the facts and record of prior proceedings, which we reference only as necessary to
explain our decision to affirm in part and vacate in part.
1. The Prison Terms
Fiumano argues that his total 16-year prison sentence is procedurally and
substantively unreasonable. We first address his procedural challenge, which asserts
Guidelines calculation error. See United States v. Cavera, 550 F.3d 180, 190 (2d Cir.
2008) (en banc).
a. Procedural Error
(1) Sophisticated Means Enhancement
Because Fiumano first challenges the application of a sophisticated means
enhancement on appeal, see U.S.S.G. § 2B1.1(b)(10)(C), we review only for plain error,
2
see United States v. Hertular, 562 F.3d 433, 449 (2d Cir. 2009), which is not evident
here. The district court’s purported failure to explain its application of this
enhancement, see 18 U.S.C. § 3553(c), warrants no remand because the court expressly
adopted the findings in Fiumano’s Pre-Sentence Report (“PSR”), which provided
satisfactory factual support, see United States v. Espinoza, 514 F.3d 209, 212 (2d Cir.
2008). Indeed, the Guidelines’ own example of sophisticated means—a telemarketing
scheme in which the main office and soliciting operations are in separate jurisdictions,
see U.S.S.G. § 2B1.1 cmt. n.9(B)—precisely mirrors the conduct here.
Fiumano cannot urge otherwise by arguing that he was a mere “salesman.”
Appellant Br. at 28. Although this court has held that sophisticated means is an offense
characteristic, not a characteristic of an individual defendant, see United States v. Lewis,
93 F.3d 1075, 1084 (2d Cir. 1996), for purposes of this decision we assume arguendo
that the Sentencing Commission’s 2015 amendment of the sophisticated means
enhancement requires us to look to Fiumano’s own conduct in assessing the
appropriateness of this enhancement, see U.S.S.G. § 2B1.1(b)(10)(C) (requiring
defendant himself to have “intentionally engaged in or caused conduct constituting
sophisticated means”). When we do so, we have no difficulty concluding that there was
sufficient evidence of Fiumano’s intentional conduct that the district court’s application
of the enhancement was not plain error. Specifically, Fiumano’s orchestration of, and
participation in, the “company flips,” used by the schemers to evade victims and law
enforcement, demonstrates his personal engagement in conduct constituting sophisticated
means.
3
(2) Abuse-of-Private-Trust Enhancement
As for Fiumano’s challenge to the application of an abuse-of-private-trust
enhancement, see U.S.S.G. § 3B1.3, we need not resolve the parties’ dispute as to
whether our review is also limited to plain error because Fiumano fails to show any error
at all. The district court’s adoption of the PSR obviates the need to remand for an
explanation of reasons for this enhancement, and Fiumano’s substantive challenge to the
enhancement is meritless. He argues that because he did not deal directly with victims,
they did not view him as personally holding a position of trust. But Fiumano does
not—and cannot—dispute trial evidence showing that telemarketers, acting at his
direction and using scripts he prepared, induced victims by falsely telling them that they
would be represented by a lawyer. See U.S.S.G. § 3B1.3 cmt. n.3 (applying
enhancement to false representations of trust); United States v. Walker, 191 F.3d 326, 338
(2d Cir. 1999) (recognizing attorney to hold position of trust with regard to clients).
Indeed, several victims testified that they understood from these representations that they
had retained an attorney. Fiumano is responsible for confederate actions in a jointly
undertaken scheme, see U.S.S.G. § 1B1.3(a)(1)(B) (stating that in case of “jointly
undertaken criminal activity,” defendant is responsible for all acts and omissions of
others “reasonably foreseeable” to have been within scope and in furtherance of that
jointly undertaken activity), most particularly when taken at his direction, see generally
18 U.S.C. § 2. Accordingly, we identify no error in application of the § 3B1.3
enhancement.
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(3) Role Enhancement
Fiumano challenges application of the four-level enhancement for organizers and
leaders of criminal activities involving five or more participants, see U.S.S.G. § 3B1.1(a),
arguing that only a two-level role enhancement was warranted, see id. § 3B1.1(c),
particularly given the purported greater roles of other co-conspirators. The argument
merits little discussion. Fiumano does not dispute that the scheme involved five or more
participants, and the Guidelines themselves make clear that more than one person can
qualify as a leader or organizer of a criminal scheme. See id. § 3B1.1 cmt. n.4; United
States v. Wisniewski, 121 F.3d 54, 58 (2d Cir. 1997). The record easily admits a
preponderance finding that Fiumano was an organizer or leader of the scheme. See
United States v. Salazar, 489 F.3d 555, 557–58 (2d Cir. 2007). Evidence showed that
Fiumano did more than manage or supervise the telemarketers and sales managers
essential to the scheme. He recruited a significant number of such participants and
exercised considerable discretion in instructing them on the misrepresentations they were
to make to victims, conduct indicative of a leader or organizer. See U.S.S.G. § 3B1.1
cmt. n.4; United States v. Chavez, 549 F.3d 119, 136 (2d Cir. 2008) (holding four-level
enhancement appropriate where defendant instructed lower level co-conspirator on
dilution of narcotics); United States v. Parker, 903 F.2d 91, 104 (2d Cir. 1990) (holding
four-level enhancement appropriate where defendant recruited accomplices). Further,
he earned more than a half-million dollars from the scheme, which, even if not the
highest amount earned by any participant—a point disputed by the parties—was “a larger
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share of the fruits of the crime” than that of most other participants. U.S.S.G. § 3B1.1
cmt. n.4. Accordingly, a four-level role enhancement was warranted.
(4) Loss Amount
Fiumano argues that the district court committed procedural error in applying a
20-level enhancement to his Guidelines calculation based on the PSR’s loss report of
$11,975,404.13. See U.S.S.G. § 2B1.1(b)(1)(K) (pertaining to losses exceeding $9.5
million up to $25 million). He contends that only an 18-level enhancement was
warranted. See id. § 2B1.1(b)(1)(J) (pertaining to losses exceeding $3.5 million up to
$9.5 million).1 The point merits little discussion because this loss argument was made
to the district court, which plainly chose not to resolve it because the precise loss figure
was “immaterial” to its decision to vary substantially below either Guidelines range to
impose a total 16-year prison term. JA 316, 324. Where the district court makes such
an explicit and unambiguous declaration that a particular enhancement did not affect its
ultimate sentence, we need not decide a procedural challenge to the enhancement’s
application. See United States v. Jass, 569 F.3d 47, 68 (2d Cir. 2009) (“Where we
identify procedural error in a sentence, but the record indicates clearly that the district
court would have imposed the same sentence in any event, the error may be deemed
harmless, avoiding the need to vacate the sentence and to remand the case for
resentencing.” (internal quotation marks omitted)); accord United States v. Feldman, 647
1
The higher enhancement, considered together with all other Guidelines factors, resulted
in a recommended term of life imprisonment, which was capped by the statutory
maximum prison sentence of 40 years. The lower enhancement would yield a
Guidelines sentencing range of 324–405 months’ imprisonment. See U.S.S.G. ch. 5, pt.
A.
6
F.3d 450, 459 (2d Cir. 2011). Fiumano’s arguments urging us not to take the district
court at its word are unconvincing. The record amply manifests the district court’s
careful consideration of all relevant factors—mitigating as well as aggravating—in
exercising its ultimate discretion to sentence Fiumano not within any Guidelines range,
but to the 16-year term of incarceration that it thought best served the sentencing goals of
18 U.S.C. § 3553(a). See Gall v. United States, 552 U.S. 38, 50 (2007) (stating that
sentencing court “may not presume that the Guidelines range is reasonable” but must
itself determine sentence that serves interests stated in 18 U.S.C. § 3553(a)); United
States v. Jones, 531 F.3d 163, 182 (2d Cir. 2008).
b. Substantive Unreasonableness
Fiumano argues that his 16-year prison sentence is substantively unreasonable.
We will identify substantive unreasonableness only in those “exceptional cases,” United
States v. Cavera, 550 F.3d at 189, where the sentence is “so ‘shockingly high, shockingly
low, or otherwise unsupportable as a matter of law’ that allowing [it] to stand would
‘damage the administration of justice,’” United States v. Broxmeyer, 699 F.3d 265, 289
(2d Cir. 2012) (quoting United States v. Rigas, 583 F.3d 108, 123 (2d Cir. 2009)). A
Guidelines sentence will rarely raise such concerns; a below-Guidelines sentence even
less so. See United States v. Perez-Frias, 636 F.3d 39, 43 (2d Cir. 2011).2 This is not
an exceptional case warranting a different conclusion.
2
Fiumano’s 16-year (192-month) sentence is significantly below both the capped
40-year Guidelines range derived from the application of a 20-level loss enhancement
and the 324- to 405-month range derived from the application of an 18-level
enhancement.
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As the district court reasonably observed, Fiumano played a leadership role over a
number of years in “a callous and heartless mortgage modification scheme” in which
thousands of victims were defrauded by misrepresentations crafted by Fiumano and
conveyed by scores of people whom he supervised. JA 314–15. Many of the victims
lost their homes as a result of the fraud, suffering “enormous” emotional as well as
financial harm. Id. at 318. Meanwhile, Fiumano earned more than a half-million
dollars from his crime. On this record, and mindful of the “due deference” owed to the
sentencing judge’s exercise of discretion, United States v. Cavera, 550 F.3d at 190, we
cannot conclude that a total prison sentence of 16 years is so shocking as to be
substantively unreasonable.
No different conclusion is compelled by lesser sentences imposed in other fraud
cases or on certain of Fiumano’s co-defendants. While a district court is statutorily
required to consider “the need to avoid unwarranted sentence disparities among
defendants with similar records who have been found guilty of similar conduct,” 18
U.S.C. § 3553(a)(6), the weight to give this, or any other § 3553(a) factor, is a matter
committed to the district court’s discretion and generally unreviewable on appeal. See
Gall v. United States, 552 U.S. at 56; United States v. Cavera, 550 F.3d at 191 (stating
that appellate courts “do not consider what weight we would ourselves have given a
particular factor,” but decide only whether factor “can bear the weight assigned” by
district court). Such deference is particularly warranted here, where Fiumano has failed
to show that his crime is clearly analogous to those involved in the comparator cases he
cites, whether in terms of his particular leadership role, the scope of the fraud, and the
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particularly serious harm—emotional as well as financial—inflicted on thousands of
victims. See United States v. Coppola, 671 F.3d 220, 254 (2d Cir. 2012) (rejecting
disparity challenge where there was no showing that defendants were “similarly
situated”). Much less can Fiumano complain of disparity with his co-defendants, see
United States v. Johnson, 567 F.3d 40, 54 (2d Cir. 2009) (stating that district court
“may—but is not required to—consider sentencing disparity among co-defendants under
18 U.S.C. § 3553(a)(6)”), whose guilty pleas and cooperation with the government make
them not similarly situated to Fiumano, see United States v. Fernandez, 443 F.3d 19, 30–
33 (2d Cir. 2006) (holding that disparity among non-similarly situated co-defendants
manifests no § 3553(a)(6) error).
Accordingly, because Fiumano’s prison sentence is neither procedurally nor
substantively unreasonable, his argument for vacatur and remand fails.
2. Forfeiture
The parties agree that the forfeiture order imposing joint and several liability on
Fiumano in the amount of $11,975,404.13, representing the entire amount of the
scheme’s proceeds, must be vacated in light of Honeycutt v. United States, 137 S. Ct.
1626, 1630 (2017) (holding that defendant cannot be held “jointly and severally liable for
property that his co-conspirator derived from the crime but that the defendant himself did
not acquire”).3 But while the government asks us to direct the district court, on remand,
3
In light of the government’s concession, we need not here decide whether Honeycutt’s
ruling, made with respect to a forfeiture order under 21 U.S.C. § 853(a)(1), applies
equally in all respects to forfeiture orders under other statutes, including 18 U.S.C.
§ 981(a)(1)(C), applicable here.
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to order forfeiture in the reduced amount of $593,605.88, constituting the amount
Fiumano was paid during his employment with PMG, Fiumano contends that the district
court should be ordered to conduct a new hearing as to the proper forfeiture amount, but
with a cap of $593,605.88. He does not dispute that he was paid this amount, or that all
PMG revenues came from victims of the fraud scheme. Rather, he argues that a hearing
is necessary because certain victims received legitimate document preparation services,
such that Fiumano’s forfeiture should be reduced by the amount these victims paid to
PMG.4
Fiumano’s argument is defeated by trial testimony showing that
document-preparation victims were falsely told that an “underwriter” had reviewed the
victims’ loan files and that they would likely qualify for loan modifications, when
Fiumano and his co-conspirators knew that no such review had occurred and that these
victims were poor candidates for loan modification. Because document-preparation
victims thus parted with their $595 based on lies concocted by Fiumano and his
confederates, these victims most assuredly did not receive the services for which they
bargained. See United States v. Binday, 804 F.3d 558, 579 (2d Cir. 2015) (holding that
victim sustains loss from fraud if defendant intends his misrepresentation to induce
victim to enter transaction without relevant facts necessary to make informed economic
4
PMG purported to offer its victims two types of services: full modification service for a
fee of $3,000, and document preparation service for a fee of $595. As to the former,
victims were told that an attorney would submit loan modification documents to and
negotiate with the bank on the victim’s behalf. As to the latter, victims were told PMG
would prepare an application that the victim would submit.
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decision). Accordingly, because the only conclusion admitted by the evidence is that all
of Fiumano’s compensation “constituted or derived from proceeds traceable to [the
fraud],” it is subject to forfeiture. 18 U.S.C. § 981(a)(1)(C).
3. Restitution
The Mandatory Victims Restitution Act (“MVRA”) requires a district court to
order a defendant to make restitution to identifiable victims of the crime of conviction
who have suffered a pecuniary loss. 18 U.S.C. § 3663A(a)(1), (c)(1)(B). Such
restitution can be ordered jointly and severally. See United States v. Zangari, 677 F.3d
86, 96–97 (2d Cir. 2012). Fiumano nevertheless urges us to vacate the $11,975,404.13
restitution order in his case, arguing that it (1) holds him responsible for losses occurring
before he joined the charged conspiracy, (2) includes payments made by
document-preparation victims who sustained no loss, and (3) fails to identify victims and
their losses individually. Because Fiumano did not object to the restitution order before
the district court, we review only for plain error, which is not evident here. See United
States v. Boyd, 222 F.3d 47, 49 (2d Cir. 2000).
Fiumano’s first argument is defeated by the very case on which he relies: United
States v. Bengis, 783 F.3d 407 (2d Cir. 2015). Bengis reaffirmed the principle that if a
defendant who joins a conspiracy “knew or reasonably should have known about some or
all of the conspiracy’s past [criminal conduct], his restitution order should encompass”
past loss amounts. Id. at 413. The trial record here shows that, prior to joining PMG,
Fiumano worked for co-conspirator Pedram Abghari at Clear Blue, where they and others
ran a nearly identical fraud scheme to the one they would conduct at PMG. Indeed, it
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was when Abghari left Clear Blue to open his new fraudulent enterprise, PMG, that he
selected Fiumano to run Clear Blue’s sales staff. Thus, when Abghari recruited
Fiumano to join the PMG fraud scheme, Fiumano knew or reasonably should have
known that fraudulent activity had transpired there prior to his arrival. On these facts,
we identify no plain error in the district court’s decision to order Fiumano to make
restitution for the entire length of the charged conspiracy.
Fiumano’s second challenge warrants no different conclusion because, as we have
already held, trial evidence compels the conclusion that fraudulent representations
induced document-preparation victims to part with their money, and thus they are entitled
to restitution. We need not address Fiumano’s arguments as to the availability of data
about such victims in PMG’s file storage system, because nothing in his arguments
suggests that the data would alter the fact of misrepresentation.5
Fiumano argues that the $11,975,404.13 restitution order represents losses
suffered by all fraud victims, who number in the thousands. He submits that, at
sentencing, the government identified only 100 victims of the fraud, thereby violating
precedent prohibiting lump-sum restitution orders. See United States v. Zakhary, 357
F.3d 186, 190 (2d Cir. 2004) (“A lump sum restitution order entered without any
identification of victims and their actual losses is not permissible.”); United States v.
Catoggio, 326 F.3d 323, 328 (2d Cir. 2003) (holding “that restitution can only be
imposed to the extent that the victims of a crime are actually identified”). At
5
For this reason, Fiumano’s motion to expand the record on appeal to include an
affidavit concerning the availability of this data, see Dkt. No. 40, is hereby DENIED.
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sentencing, the district court stated that it had “received victim impact statements from
over 100 victims.” JA 314. But the restitution order itself states that “the names,
addresses, and specific amounts owed to the victims are set forth in the Schedule of
Victims and Restitution attached hereto.” SPA 8. Thus, while the 100 victims who
submitted victim impact statements may be among those included on the Schedule of
Victims and Restitution, this does not mean that only 100 victims are there identified.6
Having failed to produce the Schedule of Victims and Restitution as part of the appellate
record, Fiumano can hardly show clear, much less plain, error in the district court’s
restitution order.
We have considered Fiumano’s remaining arguments and conclude that they are
without merit. Accordingly, we VACATE only so much of the judgment of conviction
as orders forfeiture, and we REMAND to the district court for the limited purpose of
ordering forfeiture in the amount of $593,605.88. In all other respects, the judgment is
AFFIRMED.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
6
Indeed, at oral argument, the government produced the Schedule of Victims and
Restitution, which in fact listed, by name and address, thousands of victims of the scheme
and the amount of their losses, which more than justified the restitution amount
determined by the district court, and counsel for Fiumano acknowledged the accuracy of
the document presented by the government. Fiumano’s argument thus appears to be
entirely inaccurate.
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