Wire Fraud and Plain Error

A federal jury convicted Roberto Trinidad del Carpio Frescas of engaging in wire fraud and then laundering the proceeds. He had cheated investors out of at least $5 million in a Ponzi scheme. The Fifth Circuit affirmed the conviction and restitution order, but reversed de Carpio Frescas’s sentence because the district court’s Guidelines calculation was off by a single point.

The probation officer, in preparing the presentence report, grouped all thirty-four counts together under Chapter 3, Part D of the 2015 Sentencing Guidelines. It then identified money laundering as the relevant offense guideline for the counts. Next, he identified the Base Offense Level for money laundering which actually derived from the underlying wire-fraud offense. Based on the wire-fraud provisions, he assigned a base level of seven, and then added various offense characteristics to arrive at a Total Offense Level of 40. The Guidelines yielded an advisory imprisonment range of 292 to 365 months’ imprisonment. The district court sustained one of del Carpio Frescas’s objections, and determined his offense level was 36 which yielded an advisory range of 188 to 235 months.

The sentencing error in the case stemmed from the district court’s use of the money-laundering guideline. The note to the guideline says the “application of any Chapter Three adjustment[s'] shall be determined based on the offense covered by this guideline (i.e., the laundering of criminally derived funds) and not on the underlying offense from which the laundered funds were derived.” U.S.S.G. 12S.1 application note 2(C). The district court imposed two adjustments—abuse-of-trust and leadership—but did not based on del Carpio’s wire-fraud conduct, not his money-laundering conduct. This was error. The error increased the total offense level by a single point, which increased the Guidelines range. This, the court said, affected del Carpio’s substantial rights and was reversible.

United States v. del Carpio Frescas