United States v. Dowdell

272 F. Supp. 2d 583, 2003 WL 21710499
CourtDistrict Court, W.D. Virginia
DecidedJuly 23, 2003
DocketCRIM.A.3:02CR00107
StatusPublished
Cited by2 cases

This text of 272 F. Supp. 2d 583 (United States v. Dowdell) is published on Counsel Stack Legal Research, covering District Court, W.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Dowdell, 272 F. Supp. 2d 583, 2003 WL 21710499 (W.D. Va. 2003).

Opinion

OPINION

MICHAEL, Senior District Judge.

Before the court are the defendant’s Objections to the Presentence Beport, submitted April 22, 2003, and “Motion for Downward Departure Based on Mitigating Circumstances,” filed May 29, 2003. The court held a hearing on these matters on May 30, 2003 during which the court heard a full exposition of the pertinent issues. For the reasons expressed herein, the court will overrule the defendant’s objections and deny the defendant’s motion for downward departure.

I.

Beginning in April 1998 and continuing through 2001, the defendant, Terry L. Dowdell, orchestrated and operated a classic Ponzi or pyramid scheme. The defendant solicited investors for an investment and trading program marketed by Vavass-eur Corporation (Vavasseur), a Bahamian corporation owned and operated by the defendant. The Vavasseur program entailed trading of medium term debentures and other private bank debt. Clients were promised returns of at least four percent per week for a minimum of forty weeks of trading activity for their investments, an annual return of 160 percent. The defendant would simply use the money put in by the newest investors to pay earlier investors their promised “profits.” Defendant would then misappropriate the remaining funds, transferring at least $29 million to business associates, family, and friends. In January 2001, the Securities and Exchange Commission (“SEC”), later joined by the Federal Bureau of Investigation (“FBI”), initiated an investigation into the Vavasseur program. The investigation to date has identified at least seventy-six di *586 rect investors, with an undetermined number of sub-investors, who contributed to the defendant’s fraudulent investment program. While the exact amount of investors’ loss is as yet unknown, it is estimated to be in excess of $121 million.

In November 2001, in connection with the ongoing investigation, the defendant’s assets were frozen. In April 2002 and September 2002, while the SEC’s investigation proceeded, the defendant violated this court’s order by directing the transfer of over $850,000 from unidentified overseas accounts to Mark and Gregory Smyth in California and then back to himself. For this activity, ón February 5, 2003, this court found the defendant in contempt of the court’s order.

On December 19, 2002, the defendant pled guilty to twenty counts of an information pursuant to the terms of a written plea agreement. Count One charged him with execution of a securities fraud scheme in violation of 15 U.S.C. § 78j(b). Counts Two through Nine charged him with individual acts of wire fraud in violation of 18 U.S.C. §§ 1843 & 1342, while Counts Ten through Twenty charged specific acts of money laundering in violation of 18 U.S.C. § 1957. In exchange for his guilty plea, the government agreed to for go any further prosecution of the defendant in the Western District of Virginia for any matters arising from the investigation of the named charges. The government also agreed that the defendant’s sentence should be determined by reference to the 2000 edition of the United States Sentencing Guidelines Manual. Based on the calculations within that manual, the government agreed to recommend a total offense level of twenty-eight, with the possibility of a two-level reduction for acceptance of responsibility should the defendant comply with the terms of the plea agreement. The defendant also agreed to a four-level increase in offense level for his role in leading and managing the charged criminal activity. The plea agreement specifies that the agreed-upon total offense level of twenty-eight is solely a recommendation and expressly recognizes that “the Court is not bound by this recommendation and may sentence up to the maximum provided by law.”

II.

As an initial matter, the court must determine whether the plea agreement entered into by the defendant is of a type, or includes elements of a type, requiring the court either to accept or to reject its terms. Rule ll(c)(l)(A)-(C) of the Federal Rules of Criminal Procedure specifies three types of plea agreements through which the government and the defendant may agree that, upon the entry of a guilty plea, the government will:

(A) not bring, or will move to dismiss, other charges;
(B) recommend, or agree not to oppose the defendant’s request, that a particular sentence or sentencing range is appropriate or that a particular provision of the Sentencing Guidelines, or policy statement, or sentencing factor does or does not apply (such a recommendation or request does not bind the court); or
(C) agree that a specific sentence or sentencing range is the appropriate disposition of the case, or that a particular provision of the Sentencing Guidelines, or policy statement, or sentencing factor does or does not apply (such a recommendation or request binds the court once the court accepts the plea agreement).

Fed.R.Crim.P. ll(c)(l)(A)-(C). To the.extent that a plea agreement is of the type specified in 11(c)(1)(B), the court must advise the defendant that he has no right to withdraw the plea if the court does not follow the government’s recommendation. *587 Fed.R.Crim.P. 11(c)(8)(B). To the extent that a plea agreement is of the type specified in subsection (A) or (C), the court may accept the agreement, reject it, or defer a decision until the court has reviewed the presentence report. Fed.R.Crim.P. 11(c)(3)(A). If the court chooses to reject a plea agreement of type (A) or (C), the court must so inform the parties and must give the defendant an opportunity to withdraw his guilty plea. Fed.R.Crim.P. 11(c)(5).

The court, in this instance, is presented with a plea agreement which concededly incorporates language embodying elements of both type 11(c)(1)(A) and 11(c)(1)(B) plea agreements. Defendant argues that these provisions render the plea agreement a “hybrid,” incorporating both a binding promise of nonprosecution and a nonbinding sentencing recommendation to the court. In the defendant’s view, that portion of the plea agreement in which the government agrees to decline further prosecution qualifies as a type 11(c)(1)(A) provision which the court must either accept or reject. The remaining provisions of the agreement, the defendant contends, may be treated as mere nonbinding recommendations entered pursuant to Rule 11(c)(1)(B).

Whether a plea agreement can be characterized as hybrid is a matter of first impression.

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Cite This Page — Counsel Stack

Bluebook (online)
272 F. Supp. 2d 583, 2003 WL 21710499, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-dowdell-vawd-2003.