Free Sentencing Statement - District Court of Colorado - Colorado

Case 1:04-cr-00103-REB

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Filed 07/19/2007

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Case Number: 04-cr-000103-REB

UNITED STATES OF AMERICA, Plaintiff,

v.

4. CHARLES LEWIS Defendant. ________________________________________________________________________ DEFENDANT CHARLES LEWIS' SENTENCING STATEMENT ________________________________________________________________________

Comes Now the Defendant, Charles Franklin Lewis, pursuant to the Court's General Order 2002-3-B and through undersigned counsel, Ronald Gainor, who submits this Sentencing Statement and, in support, would allege the following objections to the Government's Sentencing Statement and would offer the following factors to be considered under Title 18 U.S.C. Section 3553(a). OBJECTIONS TO GOVERNMENT'S SENTENCING STATEMENT The Government contends in its Sentencing Statement (doc #1291) that a loss amount of $24,709,954.02 should be attributable to Defendant Lewis. This figure,

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translates to a 22-level increase under Section 2B1.1(b)(1) of the United States Sentencing Guidelines, and is based on a "total amount of loss, as measured by deposits from known investors into purported non-depleting accounts minus monies returned to the same investors, computed from the date of each defendant's first respective conviction forward." In Lewis' case, that first date of conviction (Count 3) is January 2, 2002. The government seeks to hold him responsible for all investor monies from this date forward until June 30, 2003. Defendant Lewis objects to this approach as it attempts to hold him responsible for acquitted conduct and for acts not otherwise proven at trial. On May 29, 2007, Charles Lewis was acquitted of twelve of 22 charges by the Jury after an 8-week trial. Lewis was specifically acquitted of Wire Fraud, in connection with a $45,000 wire transfer of funds from Carol J. Hall to the Rocky Mountain Sports Promotions, LLC account on April 30, 2003 (Count 17) and Securities Fraud in connection with $50,000 of deposits made by Carol and Clarence Hendrikson into the Capital Holdings LLC account on October 31, 2002 and November 4, 2002 (Counts 26 and 27) and $25,000 in deposits made by Cliff Seigneur into the Rocky Mountain Sports Promotion, LLC account on May 20, 2003 (Count 29). Defendant Lewis was also acquitted of other charges relating to Wendy Delaney (Count 6), Darren McGee (Count 9), Shirley Lehr (Count 20) and William DellaPenna (Count 23). This acquitted conduct, all of which occurred after the January 2, 2002 commencement date for loss attribution, should not be included in the U.S.S.G. Section 2B1.1 loss calculation. Likewise, the government should not be allowed to attribute monies to the loss calculation on behalf of investors who did not testify at trial. The defense believes the most equitable approach would be to total the loss amounts actually proven at trial which include $30,000 (Count

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16, Gregory Hector ); $25,000 (Count 21, Linden Lee Markham); $50,000 (Count 22, Gregory Hector); $350,000 (Count 24, Mike Jones) $5,000 (Count 25, Lambros Gianos) and $55,000 (Count 40), for a total of $515,000, then add to that figure any additional monies these victims/individuals subsequently invested minus monies they received back during the course of the program. A review of spreadsheets provided by the government indicates that Hector, Gianos and Jones invested additional sums totaling $220,009.85, which when added to the previous figure, yields a preliminary loss amount of $735,009.85. This total should be reduced by $360,000 to reflect monies returned during the operation of the program. This results in a final loss amount of $375,009.85 which corresponds to a 12 level increase pursuant to U.S.S.G. Section 2B1.1(b)(1). The defense believes that this loss analysis fairly and accurately reflects the Jury's verdict and avoids any miscarriage which will result by adding tens of millions of undocumented dollars to the calculation based on nothing more than a government representation in a spreadsheet. Defendant Lewis would also object to the government's request for a two (2) level increase under U.S.S.G. Section 2B1.1(b)(7)(C) because the offense involved violations of a prior, specific administrative order namely the Cease and Desist Order issued by the Nebraska Department of Banking and Finance on March 12, 2002. Mr. Lewis contends that this 2-level increase does not apply to him because (1) he was acquitted of any conduct connected to Nebraska resident Carol Hall (Count 8); (2) his solicitation of Nebraska resident Warren Peterson occurred prior to the issuing of the Cease and Desist Order; (3) he had no contact with Nebraska resident and investor Abhirjun Dutta and (4) he was acquitted of any conduct connected to correspondence which occurred between Norman Schmidt and Thomas Sindelar (Count 4). Violations of

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this order were not reasonably foreseeable to Mr. Lewis and should, therefore, not be applied to his guideline calculation. Defendant Lewis would also object to the imposition of a 2-level increase, pursuant to U.S.S.G. Section 2B1.1(b)(8)(C), on the assumption that the offense involved sophisticated means. Lewis never rented any office space, never created any of the corporate entities involved in the fraud, didn't engage an attorney for the purpose of lending legitimacy to program operations and never hid transactions through any entities or corporate shells. The defendant, likewise, never instructed other people to be

signatories on accounts nor did he attempt to disguise receipt of investor money through the Summit Ventures or Miloka Holdings accounts. To the contrary, the Jury specifically found that Lewis was not guilty of money laundering allegations in connection to one of those accounts (Count 36). Lastly, Lewis would object to the government's request for a 4-level increase, pursuant to U.S.S.G. Section 2B1.1(b)(2)(B), because the offense involved more than 50 victims. The defense believes it is inappropriate to apply this increase in the absence of a specific finding made by the Jury as to the amount of victims involved and in light of the fact that the government had less than 50 victims testify as a matter of record. Based on the Jury's verdict, Lewis should only be held accountable for five victims, Warren Peterson, Gregory Hector, Linden Lee Markham, Mike Jones and Lambros Gianos. Based on these objections, the defense maintains that an adjusted offense level of 19 is appropriate. Assuming a criminal history category III is accurate, the resulting guideline range would be 37-46 months.

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FACTORS TO BE CONSIDERED UNDER TITLE 18 U.S.C. 3553(a) Title 18 United States Code Section 3553(a) instructs the Court to "impose a sentence sufficient, but not greater than necessary to comply with the purposes set forth in paragraph 2 of this subsection." That section requires consideration of the nature and circumstances of the offense and the history and characteristics of the defendant as appropriate factors to be considered by the Court. In this case, the evidence established that Charles Lewis was hired by Norman Schmidt, who was the primary leader and organizer of the criminal activity. Mr. Schmidt maintained control of all bank accounts, managed the entities on a day-to-day basis (see testimony of Susan Viek) and was ultimately responsible for directing Lewis' activities in both the Smitty's and Capital Holdings programs. Lewis had no independent authority in the investment program, which was created and in operation well before he ever solicited investor Warren Peterson sometime in 2001. The evidence adduced during trial also demonstrated that Lewis, through the L&M Partnership, was an investor in the program. This investment occurred well before he persuaded any other person to put their money into the Smitty's entity. This lesser role should be considered as a Section 3553(a) factor in determination of an appropriate sentence. Equally significant in the Section 3553(a) analysis are the unique characteristics of this defendant including his age and medical condition. Rita v. U.S. 127 S.Ct. 2456, 2473 (2007) (concurring opinion). Charles Lewis will be 72 years old in October, 2007. He currently suffers from a colitis condition requiring him to utilize a colostomy bag, a bleeding stomach, a partially paralyzed leg due to polio, and a prostrate condition

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requiring a biopsy.

Lewis is also currently on several medications to treat these

conditions and has underwent surgery within the past 12 months to treat a hernia. According to National Center for Health Statistics February 2005 Release, the average life expectancy for a white male in the United States is 75.4 years. With all his health concerns, it is hard to conceive that Lewis will survive beyond this 75.4 average. The defense maintains that a sufficient but not greater than necessary sentence should contemplate the defendant's age and physical condition and result in a sentence that does not exceed this life expectancy estimate. Wherefore, based on the above and foregoing, undersigned counsel for the Defendant, Charles Franklin Lewis, respectfully requests that this Honorable Court determine a just sentence which is sufficient but not greater than necessary to reflect an adequate punishment in this case. Dated this 20th day of July, 2007 Respectfully submitted, s/ Ronald Gainor RONALD GAINOR 6414 Fairways Drive Longmont, CO 80503 (303) 448-9646(phone) (303) 447-0930 (Facsimile) [email protected] Attorney for Charles Lewis

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CERTIFICATE OF SERVICE (CM/ECF)

I hereby certify that I have electronically filed the foregoing Sentencing Statement on this 20th day of July, 2007 with the Clerk of the Court using the ECF system which will send notification of such filing to the following e-mail addresses:

Matthew Kirsch [email protected] Wyatt B. Angelo [email protected] Peter Bornstein [email protected] Thomas Hammond [email protected] Thomas Goodreid [email protected] Daniel Smith [email protected] Declan O'Donnell [email protected] Mitchell Baker

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[email protected] Richard Kornfeld [email protected] Richard Stuckey [email protected]

s/ Ronald Gainor

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