United States v. Stinson

Stinson’s scheme began in 2006 when he founded a fund, Life’s Good, with an alleged purpose to originate mortgage loans. Stinson advertised a “risk free” 16 percent annual return to investors with individual retirement accounts. He hired telemarketers to “cold call” potential investors and later produced a fraudulent prospectus and worked through investment advisors. Stinson did not use investors’ money to make mortgage loans, but diverted it to various personal business ventures that employed his family and friends without requiring them to work. In 2010, the SEC initiated a civil enforcement action. Stinson was charged with wire fraud, 18 U.S.C. 1343; mail fraud, 18 U.S.C. 1341; money laundering, 18 U.S.C. 1957; bank fraud, 18 U.S.C. 1344; filing false tax returns, 26 U.S.C. 7206(1); obstruction of justice, 18 U.S.C. 1505; and making false statements, 18 U.S.C. 1001. The SEC’s analysis showed that Life’s Good solicited $17.6 million from at least 262 investors and returned approximately $1.9 million. Many individuals lost retirement savings. Stinson entered an open guilty plea. The district court sentenced him to 400 months and ordered restitution of $14,051,246. The Third Circuit vacated, finding that the court erroneously applied U.S.S.G. 2B1.1(b)(15)(A), which increases the offense level by two points when “the defendant derived more than $1,000,000 in gross receipts from one or more financial institutions.” The enhancement applies only when financial institutions are the source of a defendant’s gross receipts. View "United States v. Stinson" on Justia Law