In pertinent part, EDWI offered this rationale for denying Lewis' Motion:
[AUSA] Roach was likewise trying to convince the court that a substantial prison term of ten years was a fair and just sentence in this case. Given the lack of a prior record and the tendency of courts to view white collar crime, even where the amount of loss is great, as less deserving of significant sentences than crimes of violence or drug crimes, his argument cannot be reasonably viewed as an attempt to undermine the promised recommendation of ten years. Lewis' real argument is not with Roach's argument, but with the court's sentence.I conclude that Lewis' effort to blame AUSA Roach for the sentence that the court found she deserved must fail. And with the failure of her claim that AUSA Roach breached the plea agreement, her requests that a new judge be assigned, the PSR and government's sentencing memorandum be struck and the transcript of her sentencing hearing sealed must be denied. Her motion seeking such relief (ECF No. 57) is therefore
DENIED.The Clerk is directed to set this matter on the court's calendar for resentencing pursuant to the mandate of the United States Court of Appeals for the Seventh Circuit.
On appeal, Lewis makes four arguments: (1) the district court erred when it concluded that Lewis waived her right to assert that the government had breached the plea agreement by failing to raise this argument at the original sentencing or on the original appeal; (2) the district court erred when it concluded that the government did not breach the plea agreement; (3) the district court erred when it applied the two‐level vulnerable‐victim enhancement; and (4) the district court's sentence of fifteen years' imprisonment was substantively unreasonable. We first address her arguments regarding the plea agreement. We then turn to her arguments regarding the district court's sentence.
We hold that the district court did not err by refusing to hear Lewis's argument, but it did err by not affirmatively acknowledging that it had the authority to do so. But because the district court alternatively rejected that argument, and because we believe that the argument is meritless, we hold that the district court's error is harmless. Finally, we hold that the district court did not err at sentencing because the vulnerable‐ victim enhancement was properly applied and the district court's sentence was substantively reasonable.
SIDE BAR: Slowly . . . ever so slowly knit those two findings together . . . 7Cir said that although EDWI did not err in refusing to hear the defendant's argument, the lower court did err when it did not acknowledge that it had, in fact, the authority to refuse to hear the defendant's argument. You got that? Really??
SIDE BAR: Getting out our judicial knitting needles yet again, we find that EDWI not only refused to hear Lewis's argument but apparently rejected that very argument it had refused to hear. Yeah, okay . . . sure . . . that make sense. Wading into that mess, 7Cir then explains that the argument that EDWI refused to hear but also rejected was meritless and, consequently, it's something like a dead-ball foul and let's pretend that nothing happened and unhear the blown whistles and unsee the dropped flags.
[T[hus, Lewis is correct that age alone can be insufficient to justify the application of the vulnerable‐victim enhancement. But because the district court did not base the application of the enhancement solely on the victims' ages, Lewis's argument ultimately fails.Although the district court did base the application of the vulnerable‐victim enhancement at least in part on the victims' ages, the court also looked to several other vulnerabilities that Lewis exploited during the course of her scheme. As the district court noted and the victim impact statements reflect, Lewis had established long‐term working relationships with at least some of her victims before commencing her fraudulent scheme. As one victim's family member stated, Lewis "[p]os[ed] as a friend and advisor" and methodically did "things to develop trust over many years." (R. 21 at 47.) Lewis "waited until [her victim]'s advanced age, illness and memory losses after chemotherapy, along with [her victim's husband]'s progressive forgetfulness and weakness gave her the opportunity to steal their life savings-trying to get every penny of it." (R. 21 at 47.)Other victims and their family members emphasized Lewis's knowledge that her victims lacked basic computer skills. Finally, as the district court noted at resentencing, at least one of Lewis's victims "was in the hospital with colon cancer when much of the money was taken away." (R. 77 at 21.) Lewis, who became acutely familiar with her victims by posing as a friend and advisor for years before and during her scheme, intentionally chose these people, not merely because of their ages but also because of their various other vulnerabilities she could readily exploit.
Page 13 of the 2016 7Cir OpinionAs previously mentioned, the plea agreement required the government to argue for no more than ten years' imprisonment. That is precisely what the government did throughout the sentencing process. The government repeated its ten‐year recommendation at the plea hearing, in its sentencing memorandum, and throughout the sentencing hearing. Strong advocacy in favor of the maximum sentence contemplated by a plea agreement does not constitute a breach, especially when the government reiterates its recommendation and the terms of the plea agreement throughout the sentencing process . . .
Page 18 of the 2016 7Cir Opinion[T]he district court concluded that Lewis's crime was "one of the most serious white collar crimes" it had ever seen. As such, the court rejected the "abstract mathematical calculation" of the guidelines because the guidelines didn't reflect the magnitude of Lewis's offense. (R. 77 at 45.)Moreover, the district court considered the impact Lewis's crime had on her victims and the need to provide restitution to them. The court further considered "the need for just punishment" and determined that "deterrence played a huge role here because white collar crimes, unlike so many, . . .are not impulsive." (R. 77 at 47-48.) To send a message that this type of crime would not be tolerated, the district court chose to impose an above‐guidelines sentence. Finally, in deciding on an appropriate sentence, the district court considered the need to protect the public.
FINRA found that from August 2006 until her fraud was discovered in May 2013, Lewis was running a conversion scheme by targeting former customers from another brokerage firm from which she had been fired. Lewis told the victims she was a Fidelity broker and urged them to establish accounts at the firm and also established joint accounts with her victims in which she was listed as an owner. She eventually established more than 50 accounts and converted assets from a number of these accounts for her own personal benefit. In June 2014, Lewis pleaded guilty to wire fraud, and was sentenced to 15 years in prison and was ordered to pay more than $2 million in restitution to her victims.FINRA found that Fidelity failed to detect or adequately follow up on multiple "red flags" related to Lewis's scheme. For example, though Lewis' victims were unrelated to one another, their various accounts shared a number of common identifiers tying them all to Lewis, such as a common email address, physical address or phone number. Fidelity also failed to detect Lewis' consistent pattern of money movements and overlooked red flags in telephone calls handled by its customer-service call center in which there were indications that Lewis was impersonating or taking advantage of her senior investor victims.Brad Bennett, FINRA's Executive Vice President and Chief of Enforcement, said, "Protection of senior investors is a core mission for FINRA and why we started the FINRA Securities Helpline for Seniors. This case is a reminder to firms to ensure their supervisory systems and procedures are designed to protect senior investors from harm and to adequately follow-up on red flags to detect potential fraudulent account activity."FINRA also found that Fidelity's inadequate supervisory systems and procedures contributed to the failure to detect and prevent Lewis's fraudulent activities. Though Fidelity maintained a report designed to identify common email addresses shared across multiple accounts, it failed to implement procedures regarding the report's use and dedicate adequate resources to the review and investigation of the reports. As a result, there was a backlog in reviewing thousands of reports, including a report in March 2012 showing that Lewis' email address was associated with dozens of otherwise unrelated accounts. The report was not reviewed by anyone at Fidelity until April 2013, more than a year after it was generated.
Bill Singer's CommentSince the unlawful acts of Lisa Lewis have come to light, Fidelity has taken a number of corrective actions to enhance its supervision, monitoring and surveillance.As a complement to its existing extensive surveillance, Fidelity has implemented two new systems. The first is multi-wire destination surveillance. This surveillance, which was already in development during the time of Lewis' misconduct, is aimed at identifying and preventing precisely the type of scheme perpetrated by Lewis.Second, Fidelity has implemented elder financial exploitation surveillance. This system monitors for a variety of different types of money movement in accounts owned by elder customers, and is aimed at identifying and preventing the kind of activity in which Lewis engaged.In addition, since Lewis' unlawful acts, Fidelity has enhanced its existing associate and employee training and awareness relating to senior investors generally, and elder financial exploitation specifically. Fidelity implements various techniques, training and programs to help its representatives identify and appropriately respond to instances of potential elder financial exploitation.