United States v. Ribaudo

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 17, 2009
No. 08-40320 Charles R. Fulbruge III
Clerk
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
CAROL RIBAUDO; SONJA RITZ
Defendants - Appellants
Appeals from the United States District Court
for the Eastern District of Texas
(06-CR-276)
Before JOLLY, PRADO, and SOUTHWICK, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:*
A jury found Carol Ribaudo and Sonja Ritz guilty of fifteen counts of mail
fraud, wire fraud, and conspiracy for a scam that left victims high and dry. The
defendants operated a travel agency. On this occasion, they sold cabins aboard
a cruise ship that never sailed. They kept the deposits and enhanced their
lifestyles. The district court sentenced Ribaudo to fifty-seven months in prison
and Ritz to thirty-seven months in prison. Finding no reversible error, we
AFFIRM.
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 08-40320
I.
Carol Ribaudo and her daughter, Sonja Ritz, worked as independent travel
agents, operating under the name Elite Business Services. In 2001, Ribaudo met
Lynn Newell, a potential client. Newell, in addition to her full-time job, was an
independent distributor for Market America. Market America is a pyramid-style
marketing company that operates, in part, through independent distributors.
The distributors earn commissions by selling Market America’s products and by
recruiting other distributors.
In July 2003, Ribaudo emailed to Newell advertising that her travel
services were available for the 2004 Market America Leadership Conference, a
conference held in Miami every February. The conference typically draws
thousands of distributors from all over the country. Ribaudo’s ad offered cruise
ship cabins as a fun and economic alternative to expensive Miami hotels.
Participating distributors would arrive in Florida a few days early, cruise to
Nassau, and then return to the Port of Miami where the cruise ship would serve
as a floating hotel for the duration of the conference. The cabin price purported
to include all meals, unlimited alcohol, and nightly entertainment. The ad
requested prompt payment and encouraged the distributors to make their
reservations immediately. Ribaudo asked Newell to forward the ad to her fellow
distributors. Ribaudo also sent the ad to several other contacts and requested
that they forward it to any other interested distributors.
In early September, Ritz set up several bank accounts under the name
Elite Business Services in which to deposit the cruise payments. Ritz also
applied for merchant accounts with American Express and Card Service
International. The distributors began making their reservations, and Ribaudo
and Ritz collected over $200,000.
Throughout this time, the defendants continued to send emails regarding
the details of the trip. Among other services, they arranged cabin assignments,
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suggested appropriate attire, and coordinated event schedules. To the
distributors, it appeared as if the February cruise was completely on track.
Alas, on January 29, 2004, ten days before the cruise was scheduled to
depart, Ribaudo notified the distributors that the cruise had been cancelled. She
blamed the cancellation on a “massive amount of credit card declines and
cancellations.” She offered the self-deflecting advice that those who paid by
credit card should seek a refund from their credit card company. Those who paid
by check made repeated attempts to contact the defendants, but most of them
heard not a word from Ribaudo or Ritz ever again.
The FBI initiated an investigation and soon learned that Ribaudo and Ritz
had never made any significant effort to charter a cruise ship. The numerous
emails regarding logistics were, it seemed, just a ruse. Bank records revealed
that Ribaudo and Ritz spent nearly all the money they received on cars, real
estate, and other personal items. When confronted, they both asserted, with
what appears as incredulous chutzpah, that they were entitled to keep the
money as a commission even though the cruise never occurred.
A grand jury was not persuaded and returned an indictment on November
8, 2006, charging Ribaudo and Ritz with conspiracy, wire fraud, and mail fraud.
After the trial, the jury returned a guilty verdict. The district court then
sentenced Ribaudo to fifty-seven months in prison and Ritz to thirty-seven
months in prison.
II.
On appeal, the defendants have raised the following issues: A) whether
the district court should have sua sponte ordered a continuance after the filing
of the superseding indictment; B) whether the district court erred by refusing to
grant a continuance despite Ritz’s impending wrist surgery; C) whether the
district court erred by excluding the suicide notes of Scott Willard, Ribaudo’s
fiancé; D) whether the government presented evidence sufficient to find Ritz
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guilty of wire fraud and mail fraud; and E) whether Ribaudo should have
received a two-level sentence enhancement for her role as the leader and
organizer of the scheme.1 We consider each of these issues in turn.
A.
The grand jury issued the superseding indictment only five days before
Ribaudo and Ritz’s trial was scheduled to begin. The defendants did not ask for
a continuance at the time, but they now argue that the district court should have
sua sponte ordered a continuance.
The district court has discretion “to grant a continuance for trial
preparation if it determines that the ends of justice so require.” United States
v. Jackson, 50 F.3d 1335, 1339 (5th Cir. 1995). And in United States v.
Rojas-Contreras, the Supreme Court held that the filing of a superseding
indictment does not automatically warrant a continuance. 474 U.S. 231, 236
(1985).
Because the defendants failed to ask for a continuance in the district court,
we review only for plain error. F ED. R. C RIM. P. 52(b). The changes made in the
1
The defendants raised two additional issues on appeal, but we consider them
abandoned because they are not adequately briefed. See United States v. Lindell, 881 F.2d
1313, 1325 (5th Cir. 1989).
The defendants challenge the district court’s decision to allow testimony regarding their
failure to file tax returns in 2003 and 2004. Concluding that the testimony was probative of
Ribaudo and Ritz’s knowledge of the fraud, the district court permitted the testimony
pursuant to Federal Rule of Evidence 404(b). The defendants, however, fail to address the
section of Rule 404(b) which permits the admission of evidence of other crimes to prove
knowledge.
The defendants also challenge the court’s application of a two-level sentencing
enhancement for abuse of a position of trust. See U.S.S.G. § 3B1.3. At the sentencing hearing,
the district court explicitly stated that it was applying § 3B1.3 pursuant to Application Note
2(B), which states that the § 3B1.3 sentencing adjustment shall apply to a “defendant who
exceeds or abuses the authority of his or her position in order to obtain unlawfully, or use
without authority, any means of identification.” Id., comment., n.2. If Application Note 2(B)
is satisfied, the sentencing adjustment applies notwithstanding “any other provision of this
guideline.” Id. The defendants, however, fail to discuss Application Note 2(B) in their briefs.
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superseding indictment were not so significant as to justify a grant of delay.2
Accordingly, the district court did not commit plain error by not sua sponte
ordering a continuance.
B.
On July 18, 2007, approximately a month before the trial was set to begin,
Ritz notified the district court that she was scheduled to have wrist surgery on
August 7, and she requested a continuance. The district court denied her
request, and Ritz now contends that this denial was an abuse of discretion.
“This court will reverse a district court’s decision denying a defendant’s
motion for continuance only when the district court has abused its discretion and
the defendant can establish that he suffered serious prejudice.” United States
v. Castro, 15 F.3d 417, 423 (5th Cir. 1994).
The district court denied the motion for several reasons. First, Ritz could
have made this conflict known at an earlier time. Second, Ritz failed to provide
an explanation for why her surgery could not take place at an earlier date.
Third, the government had already arranged travel for all of its witnesses.
These reasons are sufficient to demonstrate that the district court did not abuse
its discretion.
C.
Defendants also appeal the district court’s decision to exclude evidence
related to the suicide of Scott Willard. This court reviews a district court’s
decision to admit or exclude evidence for an abuse of discretion. United States
v. Guidry, 456 F.3d 493, 501 (5th Cir. 2006). An error in excluding evidence does
2
The superseding indictment made the following changes: 1) “Elite Travel” was
changed to “Elite Business Services”; 2) the dates of the offenses and the date the conspiracy
began were slightly adjusted; 3) the points of origin for several of the transactions were
changed; 4) several of the transaction dates were slightly changed; 5) an allegation was added
regarding Ritz’s control over a Wachovia bank account; and 6) the criminal forfeiture increased
from $172,844 to $205,736.
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No. 08-40320
not necessitate reversal unless the error affected the defendants’ substantial
rights. United States v. Kay, 513 F.3d 432, 455 (5th Cir. 2007).
Willard was Ribaudo’s fiancé, and, according to Ribaudo, he managed the
finances of Elite Business Services. Shortly after Ribaudo cancelled the cruise,
she discovered Willard lying dead in their bath tub. At trial, the defendants
sought to admit two suicide notes purportedly emailed from Willard to Ribaudo.
They argued that the notes suggested that Willard was responsible for the cruise
ship fraud. The notes do suggest that Willard was upset and wanted to die, but
beyond a vague reference to being a “con,” the cruise scheme is not mentioned
at all. The notes are, at best, tangentially relevant to the issues at trial, and
nothing argued by the appellants convinces us that their omission constituted
an abuse of discretion by the district court.
D.
Ritz challenges the sufficiency of the evidence used to convict her for mail
fraud and wire fraud. Because she moved for acquittal in the district court, we
ask whether a “rational jury could have found that the evidence established the
essential elements of the crime beyond a reasonable doubt.” United States v.
Guanespen-Portillo, 514 F.3d 393, 396 (5th Cir. 2008). “We consider the
evidence, all inferences drawn from it, and all credibility determinations in the
light most favorable to the verdict.” Id.
To prove mail fraud, the government must demonstrate (1) a scheme to
defraud; (2) use of the mails to execute the scheme; and (3) specific intent to
defraud. United States v. Arledge, 553 F.3d 881, 890 (5th Cir. 2008). To prove
wire fraud, the government must demonstrate (1) a scheme to defraud; (2) use
of interstate wire communications in furtherance of the scheme; and (3) specific
intent to defraud. United States v. Mann, 493 F.3d 484, 493 (5th Cir. 2007).
Moreover, a person who aids and abets a federal crime is punishable as a
principal. See 18 U.S.C. § 2. To prove aiding and abetting, the government must
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demonstrate that the defendant “(1) associated with the criminal enterprise; (2)
participated in the venture; and (3) sought by [her] action to make the venture
succeed.” Guanespen-Portillo, 514 F.3d at 397.
Ritz argues that there was only minimal evidence that she took part in the
actual wire transfers. The government, however, did not need to prove that Ritz
performed each act alleged in the indictment. United States v. Rivera, 295 F.3d
461, 466 (5th Cir. 2002). Indeed, the government submitted ample evidence
from which the jury could conclude that Ritz aided and abetted the scheme.
Several of the emails sent to the distributors were from Ritz’s account. The bank
account applications and merchant account applications all bore Ritz’s signature.
Ribaudo testified that Ritz was involved in the scheme. Agents with the Federal
Bureau of Investigation testified that Ritz told them that she was the owner of
Elite Business Services. And the day before Ribaudo sent the cancellation email,
Ritz withdrew all remaining balances from their bank accounts. Accordingly, we
find the evidence sufficient to sustain Ritz’s conviction.
E.
Ribaudo appeals the district court’s application of a two-level sentence
enhancement, pursuant to § 3B1.1(c) of the United States Sentencing
Guidelines, for her role as the leader and organizer of the scheme. In
considering possible sentencing errors, we review factual findings for clear error
and interpretations of the Sentencing Guidelines de novo. United States v.
Mauskar, 557 F.3d 219, 232 (5th Cir. 2009).
Ribaudo argues that she and Ritz were equally responsible for the scheme.
There was substantial evidence, however, to support the district court’s
conclusion that Ribaudo was the leader and organizer. Ribaudo had been a
travel agent for over three decades; Ritz had only been one for five years. Newell
testified that Ribaudo formulated the cruise idea, and the initial emails were
sent by Ribaudo. Ribaudo even testified that Ritz always obeyed her
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No. 08-40320
instructions. The district court, therefore, did not err in concluding that Ribaudo
was the leader and organizer.
III.
Because we find no reversible error, Ribaudo and Ritz’s convictions and
sentences are
AFFIRMED.
8