Friday, January 29, 2010

U.S. v. Treadwell et al, No. 08-50562 (1-28-10). Defendants ran a Ponzi scheme that resulted in a $40 million loss. Defendants entinced investers to "loan" money to companies that were doing humanitarian projects, salvaging wrecks in the Caribbean, and other good deeds. Charged and convicted of wire fraud and conspiracy, co-defendants argued that the jury instructions failed to define "intent to deceive" adequately, and that the element required intent to do harm. The 9th rejected this argument, joining the other circuits, which only require deception and a loss. The 9th also affirmed the sentences, holding that the +22 adjustment for loss was not error, and that the standard of proof was preponderance. In this case, a jury found guilt, and the evdience presented at trial supported the court's findings. The court also did not err in adjusting for misrepresenting the charitable aim. The defendants did not have a fraudulent charitable organization, but they presented their business as providing humanitarian aid. The sentences were not unreasonable.


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