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United States v. George

decided: November 17, 1989.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
RAJAN GEORGE, DEFENDANT-APPELLANT



Appeal from the United States District Court for the Eastern District of Wisconsin. No. 88-CR-158--Terence T. Evans, Judge.

Wood, Jr., Easterbrook, and Ripple, Circuit Judges.

Author: Ripple

Rajan George pleaded guilty to two counts of mail fraud in violation of 18 U.S.C. ยง 1341. The district court sentenced Mr. George to five years imprisonment on each count, to be served consecutively, and ordered him to pay restitution. Mr. George challenges the length and consecutive nature of the sentence. We now affirm the sentence imposed by the district court.

I.

Background

A. Facts

Rajan George was Chief Executive Officer of The Rajan Group, a group of several investment companies, from August, 1982 to May, 1987. In that capacity, he conceived and carried out a plan to defraud investors and obtain money by false pretenses, using the United States mails to accomplish his purpose. Mr. George represented to the public that investments made in The Rajan Group would yield a substantial return within a relatively short period. He used the mail to send promotional material to actual and potential investors, receive funds from investors, and provide investor with forms indicating the amount of their interest income. Between April, 1984 and May, 1987, Mr. George received $3,683,030.80 from 71 investors located in 15 states and Saudi Arabia. He restored $727,770.60 to the investors*fn1 and used the remainder for corporate purposes. Specifically, Mr. George used $2,955,260.20 to pay corporate expenses, fund an advertising campaign to promote the companies, and pay some investors a partial return on their investments.

B. The District Court

1. Arraignment and plea

On January 3, 1989, Mr. George was charged with and pleaded guilty to two counts of mail fraud. The specific mailing charged in count one occurred in November, 1986, when Pattiyil Lukose sent Mr. George a check through the United States mail in the amount of $25,000.00.*fn2 The specific mailing charged in count two occurred in September, 1986, when George Phillip sent the defendant a letter and check in the amount of $5,000.00 through the United States mail.*fn3 Mr. George admitted his guilt and conceded that the facts presented by the government were substantially correct. He reminded the court, however, that he derived no direct benefit from his activities.

In return for his guilty plea, the government charged Mr. George with only two of the potential seventy-one fraud counts, and agreed not to seek federal criminal tax charges. The two mail fraud charges carried a maximum period of imprisonment of ten years. Mr. George acknowledged in his plea that he understood he could be sentenced to the maximum term, and that the government would be free to recommend any sentence it deemed appropriate.

2. Sentencing

Prior to sentencing, the government sent questionnaires to the victims of Mr. George's scheme. The questionnaires inquired about the impact of Mr. George's activities on their lives. Forty-two investors responded; almost unanimously, the victims requested that he be given a harsh sentence. The government noted at sentencing that most of the victims were not sophisticated business persons, but invested in The Rajan Group based on their relationship with and trust in Mr. George. The government then asked that the court consider the maximum sentence of ten years.

Defense counsel argued that the basis of Mr. George's business was legitimate, although it was illegally funded. In mitigation of the seriousness of the offense, counsel noted that Mr. George cooperated fully with the government. He admitted taking more money than the government investigation revealed and provided a full accounting of funds. Counsel also claimed that most investors were not contacted directly, but wrote to Mr. George offering investment funds. In his personal statement to the court, Mr. George elaborated on what he considered to be mitigating factors in the case. He submitted that, though the means of raising funds to run his business were not correct, his goals were commendable. "But now I have learned the hard way that how noble the cause may be means do not justify the ends." R.17 at 24. He ...


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