- Court: 9th Circuit Court of Appeals Archives
- Area(s) of Law: Criminal Law
- Date Filed: 12-04-2015
- Case #: 12-50499
- Judge(s)/Court Below: District Judge Rosenthal for the Court; Circuit Judges Berzon and Clifton
- Full Text Opinion
James Lloyd, Robert Keskemety, Paul Baker, David Nelson, and Albert Greenhouse (collectively, “Defendants”) appealed their convictions and sentences for selling unregistered securities in connection with their work in “boiler rooms” in California and Florida, where Defendants solicited investments in partnerships in order to finance the distribution and production of movies. Lloyd appealed his sentence of 156 months and over $22 million in restitution, and Keskemety appealed his sentence of 80 months and restitution for the fraud losses incurred by the California boiler room. On appeal, the Ninth Circuit found that Lloyd’s sentence was not substantially unfair given the totality of the circumstances and that Lloyd’s sentence was less than the maximum sentence possible. However, the panel overturned Keskemety’s sentence given a lack of evidence that Keskemety designed, developed, or furthered the scheme that Lloyd conducted in California. Baker and Nelson appealed their convictions. The panel agreed with Baker that some of the evidence that was admitted was inadmissible, but the panel ultimately held these admissions to be harmless error in light of the overwhelming permissible evidence against Baker. The panel did however vacate Baker’s sentence, because the district court did not take into account all required factors under the sentencing guidelines. The panel did not find the evidence to be as overwhelming in Nelson’s case, and found that the procedural errors were not harmless. The panel therefore vacated Nelson’s sentence and remanded for a new trial. Lastly, Greenhouse appealed his sentence, which the panel affirmed. The panel held that Greenhouse sold securities to vulnerable individuals and that the enhancements of his sentence were supported by his actions and the amount of restitution was awarded solely to compensate for the losses that Greenhouse was responsible for. AFFIRMED in Part, REVERSED in Part, VACATED in Part, and REMANDED in Part.