United States v. Qualls

25 F. Supp. 3d 248, 2014 WL 2558700
CourtDistrict Court, E.D. New York
DecidedJune 6, 2014
DocketNos. 07-cr-14 (S-1)(DLI), 09-cr-418 (DLI)
StatusPublished
Cited by2 cases

This text of 25 F. Supp. 3d 248 (United States v. Qualls) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Qualls, 25 F. Supp. 3d 248, 2014 WL 2558700 (E.D.N.Y. 2014).

Opinion

MEMORANDUM AND ORDER

DORA L. IRIZARRY, District Judge:

On November 5, 2008, defendant Thomas Qualls (“Defendant”) was found guilty by jury verdict on Count One, Conspiracy to Commit Mail and Wire Fraud, Count Two, Mail Fraud, Counts Three through Fourteen, Wire Fraud, Counts Eighteen and Nineteen, Obstruction of Justice, of a superseding indictment. (Violations of 18 U.S.C. §§ 1349, 1341, 1343, 1512(c)(1), and 1512(c)(2), respectively.) On April 4, 2013, Defendant pled guilty to one count of failure to appear in court as required by the conditions of his release in violation of 18 U.S.C. §§ 3146(a)(1), (b)(1)(A)®, and (b)(2), based upon his flight to Canada on the day closing arguments' were to be made at his trial. Defendant was arrested in Canada on March 17, 2009 and extradited to this district on July 23, 2012.

In preparation for sentencing, Defendant objected to: (1) the Probation Department’s determination that victims’ losses were over $400,000 and application of the resulting 14-point offense level enhancement pursuant to ■ United States Sentencing Guideline (“U.S.S.G.” or “Guidelines”) § 2Bl.l(b)(l)(H); (2) the application of the sophisticated means enhancement under U.S.S.G. § 2Bl.l(b)(10); (3) the application of the organizer-leader enhancement under U.S.S.G. § 3Bl.l(a); and (4) the application of the 2012 U.S. Sentencing Guidelines Manual (“Guidelines Manual”), in connection with the four-point commodities trade enhancement, as an ex post facto violation. (Objection to Presentence Investigation Report (“Obj. to PSR”) at 2-3, Dkt. Entry No. 218.).1 Additionally, Defendant sought a Fatico hearing to present evidence to support his claim that he should receive a downward departure pursuant to § 5K2.13 based on an alleged delusional disorder that purportedly caused him to have diminished mental capacity at the [251]*251time he committed the offense. (Def.’s Motion for Hrg., Dkt. Entry No. 232.)2 The government and the Probation Department (“Probation”) opposed Defendant’s objections emphasizing Defendant’s role in the scheme, the evidence adduced at trial, and the date of the actual sentencing. Substantial briefing by the parties on these issues was entertained by the Court.

On March 7, 2014, the Court held a sentencing hearing. As an initial matter, the Court adopted the Guidelines total offense level of 35 with a Criminal History Category of III recommended by the Probation Department, which corresponds to a Guidelines sentence range of 210-262 months’ imprisonment. (See Sent. Tr. 16:13-16:21, Dkt. Entry No. 245.) In calculating the offense level, the Court held, over the objections of Defendant, that Defendant’s conduct warranted a 14-point offense level enhancement pursuant to U.S.S.G. § 2B1.1(b)(1)(H) because Defendant caused losses greater than $400,000 but less than $1 million, as well as an enhancement for sophisticated means and his leadership role and denied a downward departure pursuant to U.S.S.G. § 5K2.13 for diminished mental capacity during the commission of the fraud scheme here.

The Court also heard arguments from defense counsel and the government, as well as statements from Defendant in connection with factors they sought the Court to consider in fashioning a reasonable sentence. After taking into account the parsimony clause of and the factors listed in 18 U.S.C. § 3553(a), the Court determined that a sentence within the Guidelines range was appropriate. Specifically, the Court imposed a sentence of 150 months’ imprisonment for each count under 07-cr-14 (S-l), to run concurrently with each other, plus three years’ supervised release on each count to run concurrently with each other. As to the conviction for failure to appear in 09-cr-M18, the Court imposed a sentence of 60 months’ imprisonment plus three years’ supervised release to run consecutively to the sentences imposed under Case Number 07-CR-14(S-1). The Court held, inter alia, that such sentences were sufficient but not greater than necessary to satisfy the purposes of Section 3553(a).

As detailed below, the Court finds that: (1) the proper calculation of the victims’ losses requires a 14-point offense level enhancement; (2) application of the sophisticated means and leadership role enhancements is appropriate, and (3) application of the 2013 Guidelines Manual does not violate the ex post facto clause. Additionally, for the reasons set forth below, Defendant’s request for a Fatico hearing to present additional evidence regarding whether the offenses were committed while Defendant was suffering from a significantly reduced mental capacity is denied and the Court finds that a departure from the Sentencing Guidelines range on that basis is not warranted.

BACKGROUND3

Between 2001 and 2003, Defendant was a principal of International Foreign Cur[252]*252rency, Inc. (“IFC”) and served as its president and treasurer. (Revised Presentence Investigation Report (“PSR”) ¶ 13, Dkt. Entry No. 216.)4 IFC was a firm that claimed to invest in the foreign currency exchange market for investors. Cold callers, at the direction of Defendant, used materially false information to induce customers to invest in IFC. (PSR ¶ 4.) Also at the direction of Defendant, investors were sent marketing materials for IFC that included false information. (Id.) Not only was investor money lost during the scheme, Defendant also stole investors’ money by withdrawing money from the investor account for personal use.. (Id.)

Defendant attempted to cover up the fraud and theft using various methods, including preparing falsified monthly statements that were faxed or mailed to investors, lying during a deposition before the United States Commodity Futures Trading Commission, and hiding documents at his mother-in-law’s house. (Id.)

The Court held a four-week trial in United States v. Qualls, No. 07-cr-14. (PSR ¶ 5.) The trial included expert testimony, as well as testimony from cooperating fact witnesses. '(Id.) A jury found Defendant guilty on sixteen counts of a nineteen-count superseding indictment. (Id.) In addition, on November 6, 2008, the jury returned a separate special verdict finding that the amount of loss to the victims as a result of this fraud scheme for forfeiture purposes was $922,382.00.

Defendant had absconded just prior to the commencement of closing arguments for case number 07-cr-14. (PSR ¶ 6.) A warrant was issued for his arrest and he was ultimately located and arrested on March 17, 2009 in Montreal, Canada. (Id.) He was extradited to the United States on July 27, 2012. (Id.) Defendant subsequently pled guilty to an indictment charging him with failure to appear and was sentenced for both cases on March 7, 2014.

DISCUSSION

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Cite This Page — Counsel Stack

Bluebook (online)
25 F. Supp. 3d 248, 2014 WL 2558700, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-qualls-nyed-2014.