United States v. Joshua Louis Rupp

CourtCourt of Appeals for the Sixth Circuit
DecidedJanuary 24, 2023
Docket22-1240
StatusUnpublished

This text of United States v. Joshua Louis Rupp (United States v. Joshua Louis Rupp) 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. Joshua Louis Rupp, (6th Cir. 2023).

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 23a0050n.06

Case No. 22-1240

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

FILED Jan 24, 2023 ) UNITED STATES OF AMERICA, DEBORAH S. HUNT, Clerk ) Plaintiff-Appellee, ) ) ON APPEAL FROM THE UNITED v. ) STATES DISTRICT COURT FOR ) THE WESTERN DISTRICT OF JOSHUA LOUIS RUPP, ) MICHIGAN Defendant-Appellant. ) ) OPINION

Before: STRANCH, MURPHY, and DAVIS, Circuit Judges.

MURPHY, Circuit Judge. Pretending to be a licensed securities broker, Joshua Rupp

defrauded his in-laws and friends of a total of $2.7 million. Among other tricks, Rupp downloaded

an app onto his victims’ phones so that they could monitor “dummy” accounts showing excellent

(but fictitious) gains. Rupp pleaded guilty to securities fraud. During plea negotiations, the

government estimated that his guidelines range would be about 10 to 12 years’ imprisonment. Yet

the district court calculated his range to be significantly higher and sentenced him to 16 years.

Rupp argues that he entered an unknowing and involuntary plea because his decision to

plead guilty turned on the government’s mistaken estimate of his guidelines range. Rupp next

argues that the district court should not have increased his guidelines range with an enhancement

that covers those who use “sophisticated means” to commit fraud. He lastly argues that the court

imposed a substantively unreasonable sentence. But his plea agreement and plea colloquy both No. 22-1240, United States v. Rupp

show that Rupp knew that he could not void his plea simply because the district court chose a

higher-than-expected guidelines range. Rupp also used plenty of “sophisticated” means, including

the creation of the dummy accounts. And his plea agreement waived his right to bring a

substantive-reasonableness challenge to his sentence. We affirm.

I

Rupp grew up in a loving home in western Michigan. By 2011, he appeared to be on a

relatively successful path both personally and professionally. He had married his wife and had

two kids. He had also obtained a builder’s license and started a home-building company in Texas.

In that year, Rupp and his family returned to Michigan. While back in his home state, he began

working as an RV salesperson.

Things changed significantly in 2015 when Rupp turned to securities fraud. He swindled

family and friends alike of millions of dollars over the next four years. Rupp targeted his wife’s

parents as his first victims. His in-laws initially gave him a small sum after he led them to believe

that he had connections with a fictitious broker at an established financial-services firm. Rupp’s

father-in-law later allowed Rupp to manage the substantially more money in his IRA (about

$465,000). Rupp’s in-laws also helped to convince his wife’s grandmother to invest with him.

Rupp almost took $1.2 million from her, but the bank suspected Rupp of elder fraud and placed a

hold on the check that she had written. When his in-laws went to the bank to discuss the situation,

they learned that Rupp had withdrawn all of the funds from his father-in-law’s IRA. Rupp wasted

all of these funds, causing his wife’s parents to suffer significant tax consequences in the process.

His marriage did not survive his fraud.

That fraud soon expanded outside his family. He would promote his (fake) qualifications

to people that he met at places like his family’s church. Once these friends agreed to make

2 No. 22-1240, United States v. Rupp

investments with him, he would install a trading app on their phones to allow them to track their

investments. The app showed extraordinary gains from week to week, which led his victims to

spread the word about Rupp’s investment prowess. Like Rupp’s father-in-law, some of these

investors gave Rupp access to their retirement accounts, including accounts worth over $400,000.

Apart from the app that he downloaded onto his victims’ phones to monitor the “dummy

accounts” that he had created, Rupp engaged in many other fraudulent acts to persuade them to

invest with him. Plea Agreement, R.6, PageID 15–17. He claimed to be a licensed broker. (He

was not.) He claimed to work for established financial-service firms. (He did not.) He claimed

that the victims could not lose the principal that they entrusted to him because of the nature of his

investments. (They lost nearly all of it.) And he showed his victims many authentic-looking

documents, including a broker’s license and account statements with letterhead and logos from the

established financial-service firms. (He had forged these documents.)

Ultimately, Rupp’s mounting investment losses and growing addiction to cough syrup took

a toll on his mental health. His fraud scheme unraveled when he suffered a mental breakdown one

day in late July 2019. After overconsuming cough syrup, a naked Rupp trespassed into the homes

of strangers, assaulted the residents, and engaged in other bizarre behavior. He fled in his car from

one of the homes, swerved into an approaching vehicle, and hit its trailer. The police had to use a

taser to subdue him. While in custody, Rupp admitted to his fraud.

All told, Rupp took more than $2.7 million from 19 people. He spent at least $500,000 of

this money on vacations, groceries, and other personal expenses. He frittered away the rest on bad

stock trades.

The government charged Rupp with securities fraud in violation of 18 U.S.C. § 1348(1).

He pleaded guilty. As part of his plea agreement, Rupp acknowledged that the parties had not

3 No. 22-1240, United States v. Rupp

reached a consensus on how to calculate his guidelines range. He also recognized that neither the

government nor his counsel nor even the court could make a “binding prediction or promise”

concerning the length of the court’s sentence and that he could not withdraw his plea even if the

court imposed the statutory maximum. Plea Agreement, R.6, PageID 22. And he agreed to waive

his right to appeal except on a few specified grounds, including that his plea was unknowing and

involuntary and that the district court had miscalculated his guidelines range.

At Rupp’s plea hearing, a magistrate judge found that he had entered a knowing and

voluntary guilty plea. Before doing so, the judge confirmed that Rupp understood the nature of

the charges and the potential punishment. Rupp recognized that only the district court could

determine his guidelines range. He also conceded that nobody had promised him what sentence

the court would choose. And he agreed that he could not withdraw his plea if it turned out that the

court chose a sentence longer than he anticipated.

Rupp’s presentence report recommended that the court impose four enhancements to his

base offense level. It recommended a two-level enhancement because Rupp had used

“sophisticated means” to commit the fraud. U.S.S.G. § 2B1.1(b)(10)(C). It recommended an 18-

level enhancement because of the amount of the loss. Id. § 2B1.1(b)(1)(J). It recommended a

four-level enhancement because Rupp’s crime had caused “substantial financial hardship” to at

least five victims. Id. § 2B1.1(b)(2)(B). And it recommended a four-level enhancement because

Rupp’s crime had involved “securities law” and he qualified as an “investment adviser.” Id.

§ 2B1.1(b)(20)(A)(iii).

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