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Untied States v. Wilson

October 17, 1996

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,

v.

GREGORY D. WILSON, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Central District of Illinois. No. 95 CR 30013 Richard Mills, Judge.

Before CUMMINGS, EASTERBROOK and ROVNER, Circuit Judges.

ROVNER, Circuit Judge.

ARGUED APRIL 1, 1996

DECIDED OCTOBER 17, 1996

Illinois security broker Gregory Wilson conducted a Ponzi scheme that defrauded forty-eight victims of more than three million dollars. Representing to investors that their funds were being placed into certificates of deposit, annuities, and mutual funds, Wilson actually deposited the funds into a personal checking account and used them both for personal expenses and to cover interest and dividend payments owed to previous investors. After federal agents uncovered the scheme, Wilson pled guilty to charges of mail fraud and money laundering.

Wilson was then sentenced under the 1994 United States Sentencing Guidelines. The charges of mail fraud and of money laundering each produced an offense level of 23 under Guidelines sections 2F1.1 and 2S1.1 respectively. Because the district court did not group the counts together (U.S.S.G. sec. 3D1.2), Wilson received a two-level multiple count adjustment under section 3D1.4, so that his adjusted offense level was 25. That level was reduced by three levels for Wilson's timely acceptance of responsibility. With a criminal history category of I, Wilson's sentencing range was 41 to 51 months. The district court sentenced Wilson at the top of that range to 51 months of incarceration. The court also ordered Wilson to pay restitution in the amount of $3,114,334. On appeal, Wilson argues that the court erred in refusing to group the mail fraud and money laundering charges together; he also challenges the order of restitution. *fn1

I.

Guidelines section 3D1.2 deals with the grouping of "closely related counts." It provides that "[a]ll counts involving substantially the same harm shall be grouped together into a single Group" and then sets out in four subsections the circumstances under which that condition is met:

(a) When counts involve the same victim and the same act or transaction.

(b) When counts involve the same victim and two or more acts or transactions connected by a common criminal objective or constituting part of a common scheme or plan.

(c) When one of the counts embodies conduct that is treated as a specific offense characteristic in, or other adjustment to, the guideline applicable to another of the counts.

(d) When the offense level is determined largely on the basis of the total amount of harm or loss, the quantity of a substance involved, or some other measure of aggregate harm, or if the offense behavior is ongoing or continuous in nature and the offense guideline is written to cover such behavior. U.S.S.G. sec. 3D1.2.

As the underlying facts are not disputed and our task primarily is to interpret the guideline, we review the district court's decision not to group the mail fraud and money laundering counts de novo. United States v. McDuffy, 90 F.3d 233, 235 (7th Cir. 1996).

The central purpose of this section, as the Eleventh Circuit has pointed out, "is 'to combine offenses involving closely related counts' " (United States v. Mullens, 65 F.3d 1560, 1564 (11th Cir. 1995) (quoting United States v. Harper, 972 F.2d 321, 322 (11th Cir. 1992) (per curiam)) (emphasis in Harper), cert. denied, 116 S. Ct. 1337 (1996)), and Wilson's convictions for mail fraud and money laundering without question meet that criterion. All of the money that Wilson laundered was money defrauded from his investors, so "[w]ithout the fraud there would have been no funds to launder." Mullens, 65 F.3d at 1564. Moreover, the money laundering took place in an effort to conceal the fraud and keep the entire scheme afloat. For example, Wilson would take money that he received from his investors and purchase cashier's checks to make payments to earlier investors, in classic Ponzi fashion. See Information Count II; Plea Agreement at 3-4; Plea Hearing Tr. 39-40; Presentence Report para. 15. The use of a cashier's check concealed the source of the money (his personal bank account) and helped keep the fraudulent scheme afloat by lulling investors into a false sense of security. *fn2 (Indeed, the authorities were alerted to the scheme when Wilson made the mistake of paying one of his investors with a personal check. Presentence Report para. 15.) Wilson's commission of mail fraud arose from similar efforts to ...


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