United States v. Eck

11 F. App'x 527
CourtCourt of Appeals for the Sixth Circuit
DecidedMay 29, 2001
DocketNos. 99-6061, 99-6156, 99-6179
StatusPublished
Cited by1 cases

This text of 11 F. App'x 527 (United States v. Eck) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Eck, 11 F. App'x 527 (6th Cir. 2001).

Opinion

PER CURIAM.

In this criminal case involving a scheme to defraud persons and entities seeking-business loans, we affirm the jury rendered convictions. However, in the matter [528]*528of defendant Sachs’s sentence, we reverse and remand for resentencing.

I. BACKGROUND

Defendants, Thomas Eck and Melvin Sachs, duped financially pressed entrepreneurs into paying large advance fees in exchange for worthless promises to secure business loans. The government described the scheme as follows:

First, there were the “finders”, persons who located the victims or entities and persons needing business loans. Usually, these victims already had exhausted primary lending sources and were desperate and willing to take a chance. Second, there were the “brokers” or person [sic] who claimed to be able to locate a suitable lender. Third, there were the fictitious “lenders”, who supposedly had committed funds to loan the client. Another group was [sic] the “underwriters”, who supposedly put together and collated the loan package. They made it difficult for the client to satisfactorily put together a loan package, giving the scammers an excuse for non-performance. Finally, there were the lawyers that gave a sense of legitimacy to the scam, collected money in escrow, and handled complaints and inquiries from regulators. From time to time, the various perpetrators would alternate roles.
The scheme worked in four different phases. First, came the confidence phase where the loan brokers and finders used a myriad of ways to give credibility and legitimacy to the operation. Letterhead was concocted to create the impression that the perpetrators provided references for each other, vouching that this or that broker had successfully placed loans. They made up funding sources that sounded complicated and exotic. They used attorneys and escrow accounts for holding fees so that the client felt comfortable with handing over an advance fee.
Once the victim’s confidence was established, the urgency phase began. In this phase, either the fake lender or broker expressed some urgent reason why the client needed to pay an advance fee of thousands of dollars so that the borrowing opportunity would not be lost. Usually, this involved a statement that the lender had committed or set aside a sum of money to loan the particular client, but that they could only hold it for a limited time.
Once the fee was obtained, the stalling phase began. This phase involved going through the motions of placing the loan. Legitimate lenders might be contacted with the full expectation and belief that the application would be denied. On the occasions, fake lenders were used, who actually issued worthless “loan commitments”, leading clients to believe the loan was imminent. Underwriters repeatedly and constantly requested additional information from the client in order to place the loan. The clients could never satisfy the underwriters, thereby giving the perpetrators an excuse to blame the lack of funding on the borrower.
The stall would continue as long as the client allowed. Once the client realized that no money was forthcoming and began to complain loudly, the “blowout” phase began. This might involve a partial refund in some cases. More likely though, the perpetrators had a lawyer write or call the client and express dissatisfaction with the client’s efforts to satisfy the underwriters, thereby causing the perpetrators to lose out on the prospect of a fee at closing. The lawyer would threaten to sue the client for malfeasance. In this way, generally, the clients were scared or coerced into drop[529]*529ping the issue of the perpetrators’ [sic] nonperformance.

Appellee’s Br. at 5-7.

The scheme in this case involved an entity known as WorldVest. Mr. Sachs, who owned and operated his own loan brokering firm known as Sandberg Investments, began to refer his customers to WorldVest in 1992. Mr. Sachs was contracted to receive a “percentage of all deals” he referred to WorldVest. Generally, Mr. Sachs would negotiate an “administrative costs fee” with his client. Without his client’s knowledge, he would then receive a portion of the fraudulently obtained advance fee from WorldVest. Of the approximately fifteen victims Mr. Sachs referred to WorldVest, only one received financing. In 1996, McCready Manor, a defrauded entity, sued WorldVest and numerous individuals involved with World-Vest, including Mr. Sachs. During a deposition related to this civil action, Mr. Sachs made several false statements regarding his relationship with WorldVest. These false statements later became the basis of his perjury counts in the underlying criminal matter.

Mr. Eck was an attorney and corporate officer for WorldVest. Mr. Eck regularly fielded calls from disgruntled customers and inquiring regulatory agencies. Moreover, on at least four cited occasions Mr. Eck served as a reference for WorldVest, telling potential victims that WorldVest had successfully funded his Carribean condominium project. At trial the government presented evidence demonstrating that while Mr. Eck was involved in a condominium project, WorldVest had no involvement in the project’s funding. Even after learning that the principal members of WorldVest had been indicted for fraud, Mr. Eck continued to provide references for the bogus entity.

In a letter dated June 23, 1993, the principal member of the conspiracy, Anthony Conti, informed all of the various co-conspirators that WorldVest was going to “cease ... operations.” (J.A. at 323.) Mr. Sachs sent a similar letter, renouncing his participation in the enterprise, in September, 1993.

Messrs. Eck, Sachs and Conti were indicted by a federal grand jury on October 1, 1998. Subsequently, Conti entered a plea agreement and agreed to testify on behalf of the government. On March 24, 1999, a jury returned a verdict of guilty against Melvin Sachs and Thomas Eck for conspiring to engage in a scheme to defraud through the use of mail and interstate wire communications (Count One), in violation of 18 U.S.C. § 371, and devising a scheme to defraud through the use of interstate wire communications in furtherance of the scheme (Count Two), in violation of 18 U.S.C. § 1343. Mr. Sachs was also convicted of three counts of perjury (Counts Four, Five and Eight). Following a hearing on the defendants’ respective motions for judgment of acquittal, the district court dismissed two of the perjury counts against Mr. Sachs (Counts Five and Eight), but upheld the verdict in all other respects.

Prior to sentencing, a presentence investigation report was prepared for Messrs. Eck and Sachs. Pursuant to the United States Sentencing Guidelines Manual (“guidelines”), Mr. Eck received a guideline range of imprisonment of 37 to 46 months; Mr. Sachs’s guideline range of imprisonment was 27-33 months. Subsequently, at separate hearings, the defendants were both sentenced to one year and one day. Defendant Sachs’s sentence was the result of his motion for downward departure based upon “proportionality” concerns.1 Specifically, the principal member of the conspiracy, Anthony Conti, had re[530]*530ceived a sentence of 30 months for his role in various advance fee schemes.

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11 F. App'x 527, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-eck-ca6-2001.