US v. Giuseppe Pileggi

Filing 920100120

UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 08-4237

UNITED STATES OF AMERICA, Plaintiff - Appellee, v. GIUSEPPE PILEGGI, Defendant - Appellant.

Appeal from the United States District Court for the Western District of North Carolina, at Charlotte. Frank D. Whitney, District Judge. (3:06-cr-00151-FDW-1)

Argued:

October 29, 2009

Decided:

January 20, 2010

Before TRAXLER, Judges.

Chief

Judge,

and

GREGORY

and

DAVIS,

Circuit

Vacated and remanded with instructions by unpublished opinion. Judge Gregory wrote the opinion, in which Judge Davis joined. Chief Judge Traxler wrote a dissenting opinion.

ARGUED: Frank Alan Abrams, LAW OFFICE OF FRANK ABRAMS, PLLC, Asheville, North Carolina, for Appellant. Ellen Ruth Meltzer, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Ed R. Ryan, Acting United States Attorney, Charlotte, North Carolina; Patrick M. Donley, Peter B. Loewenberg, Fraud Section, Criminal Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.

2

GREGORY, Circuit Judge: Following his extradition to the United States, Appellant Giuseppe Pileggi was convicted of numerous counts of fraud based on operating a fraudulent sweepstakes scheme out of Costa Rica targeting U.S. citizens. The district court then sentenced

Pileggi to 600 months in prison.

Pileggi now argues that the

district court arrived at this sentence by relying on clearly erroneous facts, thus making his term of imprisonment

procedurally unreasonable.

For the reasons set forth below, we

vacate Pileggi's sentence and remand for resentencing.

I. Pileggi, a fifty year-old Canadian citizen who lived in San Jose, Costa Rica, and more than four dozen co-conspirators ran an elaborate Rica fraudulent sweepstakes targeted at least scheme elderly 600 to operating citizens 650 out of of the were

Costa United

that

primarily In total,

States.

people

victimized, and the scheme grossed $8,381,962 from April 2003 until May 2006. (J.A. 48, 554, 764.) 1

On May 16, 2006, Costa Rican authorities searched sixteen sites for evidence relating to the fraud, including Pileggi's

Citations herein to "(J.A. __)" refer to the contents of the Joint Appendix filed by the parties in this appeal.

1

3

home and car accessory business. States, Pileggi was then taken

At the request of the United into custody by Costa Rican

authorities on May 16, 2006.

Pileggi remained in Costa Rican

jail until the United States reached an agreement with Costa Rica for his extradition. The agreement, dated October 27, 2006, between Costa Rica and the United States was reflected in a diplomatic note. The

"Diplomatic Note of Assurances between the United States and Costa Rica" provided that "Costa Rica requested assurances that, upon extradition to the United States . . . Giuseppe Pileggi . . . will not be subjected 16.) to In the death penalty the or life

imprisonment."

(J.A.

response,

United

States

assured "the Government of Costa Rica that if extradited . . . . Giuseppe Pileggi . . . will not receive a penalty of death or one that requires that [he] spend the rest of [his] natural [life] in prison." On December (J.A. 17.) 2 5, 2006, Pileggi was indicted in the U.S.

District Court for the Western District of North Carolina for one count of conspiracy to commit wire fraud, mail fraud and travel fraud, in violation of wire of 18 U.S.C. in § 371 (2006), of 18 and

twenty-two
2

counts

fraud,

violation

U.S.C.

Both parties agree that diplomatic assurances reflecting agreement between parties to an extradition treaty are to be enforced by the courts.

4

§§ 1343 & 2. 3

On January 31, 2008, Pileggi was convicted on all

counts, 4 and sentencing was set for September 24, 2008. Prior ("PSR") to sentencing, generated by a Presentence the United Investigation States Report of

was

Department

Probation.

The PSR stated that "based on a total offense level

of 43 and a criminal history category of I [Pileggi had no prior convictions], (J.A. 826.) the guideline range for imprisonment is life."

The PSR section entitled "Circumstances That May

Warrant Departure" mentions that an extradition treaty between the United States and Costa the two Rica governs the extradition (J.A. terms of 828.) the

relationship Additionally,

between the PSR

countries. stated the

accurately

Diplomatic Note.

At the same time, the PSR suggested "imposing

a sentence where a portion of these counts run concurrently in order to achieve a sentence of 540 months (or 45 years) which is essentially a life sentence for this defendant." At sentencing, about the the Government assurances made it (Id.) the following to Costa

misrepresentation Rica:

provided

"the United States, we gave a sentencing assurance to the

government of Costa Rica that we would not seek a sentence in

The allegation.
4

3

indictment

also

included

a

criminal

forfeiture

The Government dismissed Count 18.

5

excess of 50 years." bound the court or

(J.A. 756.) the

When the court asked if this branch, the Government

executive

responded, "I think technically what it says is that the United States, the executive branch will not seek a sentence in excess of fifty years or death." At the conclusion (Id.) of the hearing, the district court

determined that it was unable to render a life sentence based on the statutory maximums for the counts on which Pileggi it was must

convicted.

(J.A.

762-63.)

Rather,

it

found

that

sentence him to a term of months.

After a review of the factors

set out in 18 U.S.C. § 3553 and the Government's representation that it assured Costa Rica that it could not seek a sentence greater than fifty years, the court sentenced fifty year-old Pileggi to 600 months (fifty years) of incarceration, followed by three years of supervised release. 5

II. Pileggi unreasonable. contends that his sentence is procedurally

We review a sentence for reasonableness under an Gall v. United States, 552 U.S.

abuse of discretion standard. 38, 51 (2007). ensure
5

When reviewing reasonableness, we "must first district court committed no significant

that

the

Additionally, Pileggi was ordered to pay restitution of $3,952,985 and to forfeit $8,381,962 to the United States.

6

procedural error," which includes: improperly Guidelines calculating) as mandatory, the

"failing to calculate (or range, treating the the

Guidelines to

failing

consider

§ 3553(a)

factors, selecting a sentence based on clearly erroneous facts, or failing to adequately explain the chosen sentence-including an explanation for any deviation from the Guidelines range." Id. Pileggi did not, however, raise the issue of his sentence's procedural reasonableness below. When a defendant fails to

object to the procedural reasonableness of a given sentence, appellate applies. 6 courts are split over whether plain-error review

To prevail under plain error review, Pileggi must (1) an error occurred; (2) the error was the error affected his substantial rights.

demonstrate that: plain;
6

and

(3)

The First, Second, Sixth, Eighth, Ninth, Tenth, and District of Columbia circuits agree that plain-error review applies. See, e.g., United States v. Pakala, 568 F.3d 47, 56 (1st Cir. 2009); United States v. Eads, No. 07-3923, 2009 WL 1324230, at *1 (8th Cir. May 14, 2009); In re Sealed Case, 527 F.3d 188, 191-92 (D.C. Cir. 2008); United States v. Ciappetta, 284 Fed App'x 854, 855 (2d Cir. 2008); United States v. Cook, 550 F.3d 1292, 1297-98 (10th Cir. 2008); United States v. Vonner, 516 F.3d 382, 385-86 (6th Cir. 2008); United States v. Waknine, 543 F.3d 546, 549 (9th Cir. 2008). The Third and Seventh circuits, however, apply the reasonableness review that typically applies to sentencing. See, e.g., United States v. Sevilla, 541 F.3d 226, 230-31 (3d Cir. 2008); United States v. Castro-Juarez, 425 F.3d 430, 433-34 (7th Cir. 2005). This Court has previously held in unpublished opinions that plain-error review is appropriate. United States v. Flores-Ansencio, 297 Fed. App'x 226, 227 (4th Cir. 2008); United States v. Garcia, 233 Fed. App'x 311, 312 (4th Cir. 2007).

7

United States v. Olano, 507 U.S. 725, 732 (1993).

If these

three elements are met, this Court may exercise its discretion to notice error only if or the error "seriously reputation marks affect[s] of and the

fairness,

integrity Id.

public

judicial citations

proceedings."

(internal

quotation

omitted); United States v. Hughes, 401 F.3d 540, 547-48, 550 (4th Cir. 2005). reasonableness We need not decide whether plain-error or applies here because under either

review

standard, Pileggi's sentence is procedurally unreasonable.

III. Pileggi contends that the district court committed a

significant procedural error when it sentenced him to 600 months of imprisonment. court relied on Specifically, Pileggi argues that the district clearly erroneous facts to arrive at the

sentence, namely the Government's misrepresentation concerning the diplomatic assurances given to Costa Rica to secure

Pileggi's extradition.

We agree.

The United States provided the Costa Rican authorities with diplomatic assurances, one of which was that a number of

suspects, including Pileggi, would not receive the death penalty or a sentence that requires he spend the rest of his natural life in prison. Rather than providing this information to the

court, the Government informed the court that the United States

8

had assured Costa Rican authorities that "the executive branch will not seek a sentence in excess of fifty years or death." (J.A. 756.) Although the we accept put that the misstatement false was

inadvertent,

statement

indisputably

information

before the district court during sentencing. time was the error corrected.

Furthermore, at no

The Government instead sought a

fifty-year sentence, arguing that "a sentence of 50 years in a crime so extraordinarily (J.A. 760.) court then considered that the Guidelines heinous warrants this kind of

sentence." The

district

provided a sentencing range of life, but that the court was bound by statutory maximums to sentence Pileggi to a term of months. The PSR did not mention or recommend that Pileggi

receive a sentence of fifty years.

Rather, it noted that "the

Court may wish to consider imposing a sentence where a portion of [the] counts run concurrently in order to achieve a sentence of 540 months (or 45 years) which is essentially a life sentence for this defendant." (J.A. 799.) The court then sentenced The only

Pileggi to 600 months (fifty years) of imprisonment.

mention of a fifty-year sentence came during the Government's misrepresentation of the diplomatic assurances. Therefore, in

sentencing Pileggi to a term of fifty years, the court relied on clearly error. erroneous facts, which is a significant procedural

Gall, 552 U.S. at 51.

9

Under

plain-error

review,

there

is

no

doubt

that

this

significant procedural error is plain.

Moreover, this error

affected Pileggi's substantial rights because it affected his sentence. See United States v. Basham, 561 F.3d 302, 334 (4th

Cir. 2009) (noting that an error that affects "the outcome of the penalty phase" is an error affecting a substantial right). Given the Government's misrepresentation, we have zero

confidence that had the district court known the true content of the assurances provided to Costa Rica, it would have sentenced Pileggi to 600 months in prison. sentencing to the assurances The only reference during to Costa Rica was

provided

erroneous, and the sentence arrived at by the court mirrored the Government's independent misstatement. from the In addition, was before no the information court that

misstatement

suggested a sentence of fifty years in prison. Finally, while we harbor no doubt as to Pileggi's guilt or the seriousness of his crimes, there is no question that this sentencing error "seriously affect[s] the fairness, integrity or public reputation of judicial proceedings." 732. by Olano, 507 U.S. at

The district court relied on false information given to it Government Pileggi's to arrive at a term of This imprisonment reliance by that the

the

exceeded

life

expectancy.

district court on the Government's misstatement is a fundamental affront to the fairness and integrity of judicial proceedings.

10

The

Government

contends

that

the

district

court

properly

calculated Pileggi's Guidelines range, treated the Guidelines as advisory, considered the applicable 18 U.S.C. § 3553(a) factors, and explained its reasoning. This argument entirely neglects

that the Supreme Court has unambiguously held that a sentence is procedurally unreasonable if "based on clearly erroneous facts." Gall, 552 U.S. at 51.

IV. Because the district court found that it "just [did] not believe a man that could target elderly individuals and deprive them of their life savings [would] be a productive citizen at any time in his life," (J.A. 763-65), and then arrived at a de facto life sentence using clearly erroneous facts, we vacate Pileggi's 600-month sentence and remand with instructions that the case be reassigned for resentencing.

VACATED AND REMANDED WITH INSTRUCTIONS

11

TRAXLER, Chief Judge, dissenting: Giuseppe sentence Pileggi the argues that we ought the to vacate of his the

because

government provided

misstated to Costa

terms by the

diplomatic

assurances

Rica

United

States in connection with his extradition.

Because he failed to

correct the government's incomplete description or even object to his sentence as inconsistent with the extradition assurances between the United States and Costa Rica, Pileggi faces the

substantial task of demonstrating plain error. Pileggi carried his burden in this regard

I do not believe and therefore

respectfully dissent. In order to satisfy the plain error standard, Pileggi must show: (1) an error was made; (2) the error is plain; and (3) the error affects substantial rights. 507 U.S. 725, 732 (1993). See United States v. Olano,

Significantly, the defendant, not the

government, "bears the burden of satisfying each of the elements of the plain error standard." United States v. Massenburg, 564

F.3d 337, 343 (4th Cir. 2009) (citing United States v. Vonn, 535 U.S. 55, 59 (2002)). error lies within Moreover, "[t]he decision to correct the our discretion, and we exercise that

discretion only if the error `seriously affects the fairness, integrity or public reputation of judicial proceedings.'" (quoting Olano, 507 U.S. at 732). Id.

12

In

my

view,

Pileggi

failed an

to error

establish by the

the judge

primary, in fact

fundamental occurred.

requirement

that

See United States v. Hastings, 134 F.3d 235, 239 (4th

Cir. 1998) ("In reviewing for plain error, our initial inquiry is whether an error occurred."). It is difficult to discern,

even from a careful reading of Pileggi's brief, precisely what error or errors he believes the district court committed. His

primary claim seems to be that the government misled the court, albeit inadvertently, as to the terms of extradition, and that the district court committed an error when it "t[ook] the To

government's statement as true." the extent that Pileggi is

Brief of Appellant at 18. that the district

arguing

court

imposed a sentence based on clearly erroneous factual findings, he cannot demonstrate that the district court's factual

conclusions were not "plausible in light of the record as a whole." 2007). the United States v. Trujillo, 502 F.3d 353, 356 (5th Cir. Although the presentence report accurately summarized assurances, for from the materials did not submitted include to the Costa to the

diplomatic court

district

sentencing the State

actual Rica

correspondence

Department

containing the diplomatic assurances.

Thus, it appears the only

information before the district court relating to the diplomatic assurances consisted of brief summaries by the Assistant United States Attorney and the Probation Officer. Such a record is

13

hardly enough to conclude that the district court made clearly erroneous factual findings and I am not "left with the definite and firm conviction that a mistake has been committed." United

States v. Hill, 473 F.3d 112, 115 (4th Cir. 2007) (internal quotation marks omitted). Pileggi also fails to establish an error to the extent he is arguing simply that the district court sentenced him based on false information, which is essentially a due process argument. See, e.g., U.S. v. Clanton, 538 F.3d 652, 655 (7th Cir. 2008) ("There is no doubt that a criminal defendant has a due process right to have the court consider only accurate information when imposing sentence, and that this right may be violated when the court considers marks information omitted)). which "A is due inaccurate." process (internal is

quotation

violation

established only if the defendant shows that the district court relied on materially false information and that the information is demonstrably the basis for the challenged sentence." United

States v. Carr, 66 F.3d 981, 983 (8th Cir. 1995) (per curiam). Pileggi does not carry his burden merely by pointing out the fact that the district See court 538 was presented at 655 with inaccurate that

information.

Clanton,

F.3d

(explaining

there is no "due process right to have a PSR free of [materially untrue, inaccurate information]" and there is no error unless "the judge . . . [relied] on the allegedly inaccurate

14

information"). guideline range,

In

imposing the

a

sentence court

within during

the its

advisory thorough

district

explanation of the selected sentence did not refer in any way to the terms of extradition. the district the court burden relied is Pileggi is simply speculating that on the to government's him in the misstatement. plain error

Because

allocated

context, I would conclude that Pileggi failed to establish an error that is plain. Even assuming there is plain error here, Pileggi clearly has failed to show that the error affected his substantial

rights.

An error that affects substantial rights is an error

that has a prejudicial effect on the outcome, meaning there is "a reasonable probability that, but for [the error claimed], the result of the proceeding would have been different." United

States v. Dominguez Benitez, 542 U.S. 74, 82 (2004) (alteration in original) (internal quotation marks omitted). Unlike

harmless error analysis, which requires the government to show that the error did not have a prejudicial effect on the outcome, the plain error doctrine places the burden with the defendant to make an affirmative showing of prejudice. F.3d at 343. In light of the sentence ultimately imposed, Pileggi simply cannot make such a showing. First, the district court's See Massenburg, 564

sentence, stiff though it may have been, was consistent with the

15

diplomatic assurance given to the government of Costa Rica that Pileggi and his co-conspirators, if convicted, would "not

receive a penalty of death or one that requires that they spend the rest of their natural lives in prison." J.A. 17. Pileggi

claims that at his age (he was 48 years old at sentencing), a 600-month sentence is no different than a life sentence. that is incorrect; a sentence that is effectively a But life

sentence is still not a life sentence.

Pileggi refers to the

mortality tables and invites us to do some sort of actuarial analysis to determine if, in fact, he received a life sentence. The problems with such an "effective life sentence" approach are obvious, beginning with the fact that a court would have to make an ad hoc determination regarding whether a substantial prison term should be regarded as a life sentence based on a

defendant's age and health factors. * Second, and more importantly, Pileggi points to absolutely nothing in the record from which I can conclude that, had the

I recognize, of course, the equitable appeal of the "effective life sentence" argument. The problem is where to draw the line in a case like this in which it is conceivable that the entire sentence could be served; we should refrain from doing so. Indeed, I am not certain how the district court on remand is to determine whether the sentence is effectively one for life or not. In the end, the solution lies with the executive branches of the parties to a given extradition treaty which could, if so desired, account for the possibility of an "effective life sentence" during the extradition process.

*

16

district

court

been

accurately

informed

about

the

diplomatic

assurances, there is a reasonable probability that the court would have imposed is a lesser sentence. In Without the anything error

concrete,

Pileggi

just

speculating.

plain

review context, it is not the government's burden to convince the court that, had the accurate information been available, the district court would have imposed the same sentence. Rather, it

is Pileggi's burden to establish a reasonable probability that he would have received a more favorable sentence. Finally, even when there is a plain error that affects

substantial rights, the court should exercise its discretion to correct the error only if it "seriously affect[s] the fairness, integrity or public reputation of judicial proceedings," Olano, 507 U.S. at 732 (alteration in original) (internal quotation marks omitted), or "in the case of actual innocence of the

defendant," United States v. David, 83 F.3d 638, 647 (4th Cir. 1996). Pileggi makes no claim of actual innocence, and these

circumstances, in my view, clearly do not undermine the fairness or reputation of our judicial process. previous argument occasion, that we refused sentence even to Indeed, on at least one address the a defendant's of an

his

violated

terms

international extradition treaty to which the United States was party. 1992). See United States v. Davis, 954 F.2d 182, 186 (4th Cir. Significantly, we explained that the violation of the

17

relevant terms of extradition "does not rise to the level of fundamentality that this court has traditionally demanded before addressing a question of law not argued at the district court level." Id. Thus, I would not exercise our discretion to

correct such an error. For the foregoing reasons, I respectfully dissent.

Furthermore, I see no reason to reassign this case to another district judge, particularly in light of the fact that the

alleged error was one created by the parties' combined failure to correctly inform the district judge about the diplomatic

assurances related to Pileggi's extradition.

In explaining his

basis for imposing Pileggi's sentence as the law requires him to do, the district judge revealed no bias or other reason

suggesting he is unable or unwilling to impose a proper sentence on remand. I fear a reassignment under these circumstances

sends a confusing and troublesome message to the district judges in this circuit.

18