Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 1 of 32 BURKE, MIELE, GOLDEN 8: NAUGHTON, LLP 40 MATTHEWS STREET SUITE 209 POST OFFICE BOX 216 $23131; 5553;? GOSI-IEN, NEW YORK 10924 PATRICK T. BURKE (845) 294?4080 NEW CITY, NY 10956 ASHIM. PLEASE REPLY TO COSHEN OFFICE ALEC R. GLADD FAX (845) 294-7673 JOHN E. AHEARN, JOSEPH P. (1941-2000) ADMITTED IN NEW YORK NEW JERSEY ADMIITED IN NEW YORK AND November 6, 20 1 7 Honorable Cathy Seibel BY EMAIL AND ECF United States District Court Judge United States District Court Southern District of New York 300 Quarropas Street White Plains, New York 10601 Re: United States v. Christopher St. Lawrence 16 CR 259 (CS) Dear Judge Seibel: I submit this memorandum on behalf of Christopher St. Lawrence who is scheduled for sentencing on November 27, 2017. Mr. St. Lawrence was found guilty of twenty of the twenty? two counts after trial. Probation has recommended a downward variance to a sentence of 24 months. We agree with Probation that a downward variance is appropriate in this case. However, we do not believe that a sentence of incarceration is necessary. This a fraud case where Mr. St. Lawrence did not ?nancially bene?t in any way. All of the bonds have been or are being paid. All the bond proceeds were used for their intended purposes. All the contractors have been paid. No victim has come forward to claim that they have been economically harmed. (See, PSR 1123 p. 7) The Town and RLDC, the entities who bene?ted from the issuances of these bonds were not required by the SEC to pay anything back to the investors in settling the companion civil Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 2 of 32 enforcement action. The stadium has been an economic success and 122 families now have homes in the Town of Ramapo. There is simply no cognizable harm in this case. 1. FAMILY HISTORY AND PERSONAL BACKGROUND Christopher St. Lawrence is a life long resident of Ramapo. He, similar to his parents before him, has devoted his life to service of others in his community. His father was a member of the State Assembly and County legislature; his mother an active volunteer for Good Samaritan Hospital and other causes. Christopher St. Lawrence also gives of himself for others. There is no hint that anything he did produced a personal bene?t. He sought nothing more than to serve his Town. . He went to school in Suffern and college in Boston before returning home to Rockland County to start a family and his life in public service. He had served the Town of Ramapo as its supervisor for 16 years. As much as his opponents attack him, his supporters honored him with their votes in the largest town in Rockland County. Under his leadership the Town of Ramapo was continually voted as one of the best places to live in America. According to CNN Money Magazine?s listings in 2003, Ramapo was listed as the 2nd Best Town to Live in on the east coast. In 2006, Ramapo was listed as the 49th Best Place to Live in America. And in 2010, Ramapo was listed as the 88th Best Place to Live in America. See New_York (last visited Nov. 3, 2017). It is a desirable place to live because of the services it provides to the residents?police, highway, garbage collection, water, sewer lighting, ambulance, and fire departments. Also a big component to its desirability for the Town of Ramapo is recreation? where the town has a beautiful public golf course, ?ve pools, summer camps, pedestrian greenways, a 2,500 acre park system and trails. Under Mr. St. Lawrence?s terms as the supervisor the Town Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 3 of 32 Board approved and built a state of the art 200,000 square foot Recreation center with basketball courts, a with a lighted arti?cial turf ?eld and an indoor sports bubble with tennis courts. While he was Town Supervisor'the Town purchased a senior center, an equestrian center, a cultural arts center and the Spaceship Challenger Center. These actions were all done for the residents of the Town of Ramapo to make it a better place to live. Along same lines, the Town of Ramapo Board voted that through its related entity the Ramapo Local Development Corporation it would built a state of the art baseball stadium. That stadium has housed a minor league team for the past seven years and committed to at least 18 more years. See Robert Brum Steve Liberman, Boulder GM: Despite political headwinds, we ?re not going anywhere, The Journal News, June 21, 2017, local/rockland/ramapo/201 7/ 06/22/rockland-boulders? gm-were-not? goin g-anywhere/ 4 1 2 402001/ (last visited Nov. 6, 2017). The RLDC also built the Ramapo Commons housing development. 122 Ramapo resident families now have affordable homes through the construction of the Ramapo Commons. These homes are now paying taxes revenue of approximately $900,000 a year. However, serving as long as he did as Town of Ramapo?s supervisor he developed both political allies and enemies. The enemies were more vocal and divisive. Primarily, the divisiveness stemmed from the changing population in the Town of Ramapo that saw a dramatic increase in the Hasidic-Jewish community. Over the years, the Hasidic community politically supported Christopher St. Lawrence. Because of that support, many of the non-Hasidic populace in Ramapo perceived that Mr. St. Lawrence was favoring the Hasidic community. Their perceptions were misplaced, biased and unfair. He did not favor one community over another. He did not see people based upon their religion or race. He holds no biases. Christopher St. Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 4 of 32 Lawrence just displayed an unwavering willingness to serve the residents of the Town of Ramapo no matter what ethnicity, race or religion. The only love and devotion that Christopher St. Lawrence held that was greater than the Town of Ramapo for which he served was that for his family. I attach the following letters for the Court?s consideration in connection with sentencing outlining his service to his community and his devotion to his family: John T. Tormey, Esq. (Exhibit A) Jacqueline Eisen (Exhibit B) David Baum (Exhibit C) Phil Tisi (Exhibit D) Binyomin Mermelstein (Exhibit E) Dr. Chuck Stead (Exhibit F) Mayor Bernard Rosenfeld (Exhibit G) Teresa Reeck (Exhibit H) Rabbi Aryeh Zaks (Exhibit I) Randall Vilord (Exhibit J) Rabbi Yechiel Steinmetz (Exhibit K) Charles eroloman (Exhibit L) Bracha Gobioff (Exhibit M) Anthony Karlovich (Exhibit N) Christopher T. St. Lawrence (Exhibit 0) Meredith Kosh (Exhibit P) Elizabeth St. Lawrence (Exhibit Q) Nanci St. Lawrence (Exhibit R) Joseph St. Lawrence, Jr. (Exhibit S) George St. Lawrence (Exhibit T) David Kosh (Exhibit U) Mitchell A. Kosh, (Exhibit V) Denise St. Lawrence (Exhibit W) Sheila St. Lawrence (Exhibit X) Peter St. Lawrence (Exhibit Y) St. Lawrence (Exhibit Z) II. THE PRE-SENTENCE REPORT The United States Department of Probation prepared a Pre-sentence Report using the November 1, 2016 edition of the Guidelines (PSR ll 26; page 4.) The Guideline Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 5 of 32 calculations in fraud cases begin by establishing the base offense level which is then upwardly enhanced according to a quantitatively measurable aspect of the offense. In fraud cases, the largest upward enhancement relate to the amount of loss attributable to the offense. As the loss increases, the guideline level increases as does the potential term of imprisonment. In this case, the PSR applied level 7 as the Base Offense Level for security fraud. See U.S.S.G. (2016). The Department of Probation adopted the Government?s estimate that the offense conduct ?caused customer losses of at least $2,923,000.00.? (PSR {l 29; page 8) According to the corresponding provision of the guidelines, the amount of the loss resulted in a 16-level enhancement. See U.S.S.G. The PSR also applied a 2 level enhancement ?nding that it was a scheme to defraud more than ten persons and was committed through mass?marketing, see id. and and 2 levels were added because the offense involved sophisticated means. See id. 4 levels were added for Mr. St. Lawrence?s role in the offense as an organizer or leader of a criminal activity that involved ?ve or more participants or was otherwise extensive, see id.? and 2 levels were added for breach of a position of trust as he was the Town Supervisor, see id. 3Bl.3; for a total Adjusted Offense Level of 33 and a Criminal History Category of 1 resulting in. a Guidelines sentencing range of 135 to 168 months imprisonment. a. Burden and Standard of Proof USSG 2B1.1 increases the offense level by adding points for ?loss? that was caused by Mr. St. Lawrence. The Government has the burden of proof to establish loss. The Court should apply a ?beyond a reasonable doubt? standard to the determination of loss or, in the alternative, Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 6 of 32 the ?clear and convincing evidence? standard. See United States v. Gigante, 94 F.3d 53, 56?57 (2d Cir. 1996): In our view, the preponderance standard is no more than athreshold basis for adjustments and departures, and the weight of the evidence, at some point along a continuum of sentence severity, should be considered with regard to both upward adjustments and upward departures. With regard to upward adjustments, a sentencing judge should require that the weight of the factual record justify a sentence within the adjusted Guidelines range. In doing so, the Court may examine whether the conduct underlying multiple upward adjustments was proven by a standard greater than that of preponderance, such as clear and convincing or even beyond reasonable doubt where appropriate. Where a higher standard, appropriate to a substantially enhanced sentence range, is not met, the court should depart downwardly. See also United States v. Romero, 482 F. App'x 215, 217 (9th Cir. 2012) (?It is now settled that when a sentencing factor has an extremely disproportionate impact on the sentence relative to the offense of conviction, due process requires that the government prove the facts underlying the enhancement by clear and convincing evidence?) (citation omitted). The proposed 16-level enhancement takes Christopher St.?Lawrence?s offense level from 17 to 33: This 16-level enhancement increases the Guideline imprisonment range from 24-30 months to 135-168 months, (or from 225 years to 1125-14 years). This is an additional 9.25? 11.5 years of imprisonment based solely on the loss enhancement. This is precisely the type of ?extremely disproportionate effect on the sentence relative to the offense of conviction? that warrants a higher burden of proof for the enhancement. United States v. Gonzalez, 492 F.3d 1031, 1039 (9th Cir. 2007) (citation omitted). At the every least, the Government must be required to prove loss by clear and convincing evidence. See id. at 1039?40 (9th Cir. 2007) (applying clear and convincing evidence standard for 9-level enhancement that increased Guideline range from 0-6 months to 21-27 months). Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 7 of 32 Ordinarily the standard is a preponderance of the evidence, but where a potentially disproportionate adjustment is at issue, due process may require the prosecution to satisfy a heightened burden. See McMillan v. 477 U. S. 79, 88 (1986) (higher standard of proof than a preponderance of the evidence may apply where sentencing enhancement is the ?tail which wags the dog of the substantive offense?). Where, as here, the Government proposes a loss adjustment that is greater than four levels that has a substantial impact on the sentence, the clear and convincing standard is appropriate. See United States v. Jordan, 256 F.3d 922, 929 (9th Cir. 2001) (clear and convincing standard applies where 9?1evel adjustment would approximately double Guideline range); id, at 934 appear to have consistently held that when the enhancement is greater than four levels and more than doubles the applicable sentencing range, then. the enhancements must be proved under ?clear and convincing standard of proof?) (O?Scannlain, ., concurring); United States v. Zolp, 479 F. 3d 715, 718 (9th Cir. 2007 (government concedes clear and convincing standard applies to 20-level loss adjustment). There is no ?bright line? rule, however, and the ?totality of the circumstances? will determine whether the heightened standard of proof applies. United States v. Pike, 473 F.3d 1053, 1057-58 (9th Cir. 2007) (error to apply heightened standard to 5-1eve1 adjustment without ?rst considering ?totality of circumstances?), cert. denied, 128 256 (2007). Relevant considerations in a securities fraud case ordinarily will support an argument that the clear and convincing standard should be applied. See id. (enumerating relevant factors); USSG 4? to 30?1evel adjustments for losses exceeding $5,000). Where, as here, the court is estimating loss, the bene?t of any doubt should be given the defendant. See United States v. Kilby, 443, F.3d 1135, 1141 (9th Cir. 2006) (where ?sentence depend(ed) in large part Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 8 of 32 upon the amount of court must err on the side of caution? in approximating quantity). Here, the Court should ?nd that because the fraud loss has a disproportionate impact on the offense level and guideline sentence range, the burden of proof should be heightened to beyond a reasonable doubt or, at the very least, clear and convincing evidence. Neither burden can the Government establish. b. Second Circuit Decision and Law of Loss Calculation The Second Circuit held that after United States v. Booker, 543 US. 220 (2005), which made the sentencing guidelines advisory, a sentencing court must correctly calculate the guidelines. See United States v. Crosby, 397 F.3d 103, 113 (2d Cir. 2005). In calculating the loss enhancement in a criminal securities fraud case, the Second Circuit rejected the Government's method of determining the loss and held that: considerations relevant to loss causation in a civil fraud case should apply, at least as strongly, to a sentencing regime in which the amount of loss caused by a fraud is a critical determinant of the length of a defendant's sentence. United States v. Rutkoske, 506 F.3d 170, 179 (2d Cir. 2007). It is well established in this Circuit that to prevail in a civil securities fraud action, a plaintiff must prove both transactional causation and loss causation. Transactional causation is the ?causal link between the defendant?s misconduct and the plaintiffs decision to buy or sell securities. Transactional causation can be established by showing that, but for the claimed misrepresentations or omissions, the plaintiff would not have entered into the detrimental securities transaction.? Emergent Capital Invest. Mgmt., LLC v. Stonepath Grp, Inc, 343 F.3d 189, 197 (2d Cir. 2003). Loss causation is the ?causal link between the alleged misconduct and the economic harm ultimately suffered by the plaintiff.? Id. at 197. See also Suez Equity Investors. LP. v. The Toronto-Dominion Bank, 250 F.3d 87, 96 (2d Cir. 2001); Silver Top Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 9 of 32 Limited v. Monterey Industries Inc, 1995 US. Dist. LEXIS 462, (S.D.N.Y. McKenna, J.) The Seventh Circuit, relying on the Supreme Court decision on Dara Pharmaceuticals, Inc. v. Broudo, 544 US 336 (2005), held in Ray v. Citigroup, 482 F.3d 991, 994 (7th Cir. 2007), that the plaintiff cannot prove ?loss causation? -that is, the fact that the defendant's actions had something to do with the drop in value?then the claim must fail.? The factors to be considered in determining loss causation in a civil securities fraud matter are that the loss must be caused by the fraud as shown by the' impact that the revelation of the fraud has on the market, that the amount of the loss be determined using an economic analysis and that loss be reduced by market factors other than the fraud that may have caused a drop in the value of the stock for reasons independent of the fraud. Under the principles related to loss causation, the appropriate method for determining loss that the Circuit determined should be applied in a criminal sentencing proceeding is as follows: First, determine the price of the stock at the time, or just before, the fraud is revealed. Second, determine how the price of the stock is impacted by the revelation of the fraud. Third, determine what other market factors may have caused a drop in the price of the stock. See Dara, 544 US. at 342. In Dara, the Supreme Court outlined the elements of a civil security fraud action as (1) a material misrepresentation or omission; (2) scienter; (3) in connection with the purchase or sale of a security; (4) reliance, often referred to as ?transaction causation?; (5) economic loss; (6) loss causation ?a causal connection between the material misrepresentation and the loss.? Dara, 544 US. at 342. The Supreme Court in Dara reversed a Ninth Circuit decision holding that the loss occurred at the time the securities were purchased at a price that was in?ated due to the defendant's misrepresentations. The Court held the purpose of the securities statutes was to Case Document 180 Filed 11/08/17 Page 10 of 32 35 ?6 ?maintain public con?dence in the marketplace not to provide investors with broad insurance against market losses, but to protect them against those economic losses that misrepresentations actually cause.? Id. at 345. The Government?s method for determining the loss in this matter was rejected in Dura: For one thing, as a matter of pure logic, at the moment the transaction takes place, the plaintiff has suffered no loss; the in?ated purchase payment is offset by ownership of a share that at that instant possesses equivalent value. Moreover, the logical link between the in?ated share purchase price and any later economic loss is not invariably strong. Shares are normally purchased with an toward a later sale. But if, say, the purchaser sells the shares quickly before the relevant truth begins to leak out, the misrepresentation will not have led to any loss. If the purchaser sells later after the truth makes its way into the marketplace, an initially in?ated purchase price might mean a later loss. But that is far from inevitably so. When the purchaser subsequently resells such shares, even at a lower price, that lower price may re?ect, not the earlier misrepresentation, but changed economic circumstances, changed investor expectations, new industry?speci?c or ?rm-speci?c facts, conditions, or other events, which taken separately or together account for some or all of that lower price. (The same is true in respect to a claim that a share's higher price is lower than it would otherwise have been--a claim we do not consider here.) Other things being equal, the longer the time between purchase and sale, the more likely that this is so, the more likely that other factors caused the loss. Id. at 342-343 (emphasis in the original) United States v. Otis, 429 F.3d 540, 547 (5th Cir. 2005) illustrates the economic principles that the Second Circuit requires to be employed in determining the loss enhancement under the Guidelines. In 011's, the defendant fraudulently manipulated $300 million, borrowed for a natural gas Dynegy Corporation transaction, to appear to have been generated from positive cash ?ow. On April 25, 2002, the SEC required Dynegy to restate its cash ?ow and the price of the company?s stock dropped. Relying on the Supreme Court decision in Dura, the Fifth Circuit held that, in determining the loss: Useful guidance appears in the applicable principles for recovery of civil damages for securities fraud. The civil damage measure should be the backdrop 10 Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 11 of 32 for criminal responsibility both because it furnishes the standard of compensable injury for securities fraud victims and because it is attuned to stock market complexities. In civil cases, the principle of loss causation is well established. Thus, there is no loss attributable to a misrepresentation unless and until the truth is subsequently revealed and the price of the stock accordingly declines. Where the value of a security declines for other reasons, however, such decline, or component of the decline, is not a ?loss? attributable to the misrepresentation. Otis, 429 F.3d at 546 (internal citations omitted.)1 The Ninth Circuit has also concluded that Dura requires the Government to prove loss causation for criminal sentencing purposes. In United States v. Zolp, 479 F. 3d 715, 719 (9th Cir. 2007), the Ninth Circuit held that ?the court may not assume that the loss in?icted equals the full pre-disclosure value of the stock; rather, the court must disentangle the underlying value of the stock, in?ation of that value due to the fraud, and either in?ation or de?ation of that value due to unrelated causes.? Thus an error in sentencing would be the failure to apply ?a realistic, economic approach to determine what losses the defendant truly United States v. West Coast Aluminum Heat Treating Ca, 265 F.3d 986, 991 (9th Cir. 2001) (emphases in the original, internal quotations deleted). c. Analysis 1 The date that the fraud was revealed to the market is an essential condition precedent to the determination of the economic loss. As noted by the Supreme Court in Dara, ?before the relevant truth begins to leak out, the misrepresentation will not have led to any loss? Dara, 544 US. at 342. ?There is no loss attributable to a misrepresentation unless and until the truth is subsequently revealed and the price of the stock accordingly declines? Olis, 429 F.3d at 546. 1 The method to determine the loss employed by the Fifth Circuit in Olts and endorsed by the Second Circuit in its decision in Rutkoske, 506 F.3d at 180, is derived from the Private Securities Litigation Reform Act, 15 U.S.C. Olis 429 F.3d at 546 n. 8. 11 Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 12 of 32 In its August 21, 2017 sentencing letter, counsel for the Government offers no precise evidence of the date the fraud was revealed to the market. The Government references the date of indictment, April 14, 2016, as the disclosure date that the fraud was mostly disclosed. (See Ex. AA, attached, Wilcox letter at p. 2). But the Government also hedges when it inexplicably claims that the fraud was ?disclosed incrementally beginning with execution of a search warrant at Ramapo?s Town Hall by the FBI on May 15, 2013 [and] the fraud was My disclosed to the market by April 14, 2016 when the Indictment was unsealed and the SEC complaint was ?led.? (Emphasis added)2. Dara and its progeny require a greater degree of precision than the Government is willing to provide. See also Rutkoske, 506 F. 3d. at 180. In fact, there is no evidence that the fraud was ever revealed to the market. Even the arrests in this case, which arguably were a public revelation of the fraud, did not occur until nearly a year after the last overt act charged in the Indictment. See Indictment [Dkt. No. 4] at 11 28(ii) (last overt act identified was the execution of the placement memorandum for the May 2015 bonds on May 19, 2015). The Government has not and cannot point to any evidence that the market ever learned of the fraud. It is therefore impossible for the Government to establish the required economic basis for any loss enhancement in this matter. Despite these economic missing links, the Government attempted to calculate the loss in this matter based on the use of economically irrelevant dates. It is respectfully submitted the Government has not and cannot establish ?a realistic, economic approach to determine what losses the defendant truly United States v. West Coast Aluminum Heat Treating 265 F.3d 986, 991 (9th Cir. 2001) (emphasis in the original). The evidence introduced at trial and anticipated at the Fatico hearing, viewed in a light 2 Defense counsel doesn?t have most of the data that Mr. Wilcox relied upon. I requested by letter and email on that the Government provide that information as to annual average debt of $163.852 million among other material. The Government refused to provide that information until required to by way of the prior court schedule. Since this submission and our expert letter had to be ?led by today without the needed information, Counsel reserves the right to amend his expert letter and sentencing memorandum once the Government provides the requested materials. 12 Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 13 of 32 most favorable to the Government, establishes that investors purchased Town of Ramapo and RLDC bonds through municipal bond brokers. There was no evidence introduced at trial or proffered by the Government to suggest, much less prove beyond a reasonable doubt, by clear and convincing evidence or even a preponderance of the evidence, that Mr. St. Lawrence did anything to cause a change in the Town of Ramapo and RLDC bond prices. In short, the Government is ?confusing loss transaction causation.? Ray v. Citigroup, 482 F.3d 991, 995 (7th Cir. 2007). The fact that the Government cannot prove that the fraud caused a loss does not mean that Mr. St. Lawrence will escape punishment. He has already been removed from of?ce and lost his only source of income. The Government?s failure to prove an economic loss merely means that Mr. St. Lawrence will not be facing an enhancement based on a proven economic loss. The Probation Department seemingly agrees that the 16 level fraud loss enhancement is unwarranted. No loss enhancement should be applied in this case. There was no loss caused by Christopher St. Lawrence. Without the 16 level enhancement for loss, and assuming no other changes to the guideline calculations (see in?a at the ?nal correctly calculated guideline level is Level 17. At Criminal History Category I, the resulting advisory sentencing range would be 24 to 30 months. This sentencing range should be the starting point of the guideline analysis. While the PSR states that the Government?s loss calculation of $2,923,000.00 warrants a 16- level enhancement, the sentence recommendation of 24 months is consistent with the applicable guideline range for an offense level of 17, which is what Mr. St. Lawrence?s level would be without the 16-1evel ?loss? enhancement(Recommendation).3 3 The PSR also recognizes that Mr. St. Lawrence ?may be a candidate for a downward departure under USSG Application Note in the event that the Court determines that the $2,923,000.00 loss ?gure ?substantially overstates the seriousness of the offense.? PSR at 1] 98. In the event the Comt ?nds that the 13 Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 14 of 32 In this case, the Government brought an indictment charging Mr. St. Lawrence with a violation of the securities laws of the United States. He was tried by a jury which convicted him of twenty of the twenty-two counts. It is disquieting to realize that had this action been brought by the investors in the Town of Ramapo municipal bond for a violation of the same statutes in a civil proceeding for damages where the proof need only be established by a preponderance of the evidence, that law suit would almost certainly have been dismissed either on a pretrial motion for summary judgment or on a motion for a directed verdict at the end of the plaintiffs case for a failure to suf?ciently allege loss causation. See Lentell v. Merrill 396 F.3d 161 (2d Cir. 2005); First Nationwide Bank v. Gelt Funding Corp, 27 F.3d 763 (2d Cir. 1994). IV. NUMBER OF VICTIMS The PSR states that a 2-level enhancement is warranted under because the offense involved more than 10 victims. See PSR at ii 39. The PSR states that ?[m]ore than 10 persons or entities bought the Town?s and bonds.? Id. However, the number of investors does not equate to the number of victims. ?Victim? is de?ned in Application Note 1 as follows: (A) any person [including individuals, corporations, companies, associations, ?rms, partnerships, societies, and joint stock companies) who sustained any part of the actual loss determined under subsection or (B) any individual who sustained bodily injury as a result of the offense. Relevant here, to be a victim the investor must have sustained part of the actual loss that was caused by the fraud. An investor who was not harmed is not a victim. Because there was no loss or harm to investors, nor gain to Mr. St. Lawrence, there were no Victims. Without proof of actual loss to a specific person, there is no victim. See United States v. Skys, 637 F.3d 146, 153 (2d Cir. 2011): Government proved loss in this amount by, at the very least, clear and convincing evidence then a downward departure is warranted under USSG Application Note 14 Case Document 180 Filed 11/08/17 Page 15 of 32 while the court's loss determination under subsection of 2B1.1 is to be based on the amount of intended loss if that is greater than the amount of actual loss, ?victims,? within the meaning of subsection are only those persons or entities who sustained ?actual loss determined? by the court ?under subsection See also United States v. Abtodun, 536 F.3d 162, 169 (2d Cir. 2008) (holding that the District Court erred as a matter of law by counting as Victims certain individuals whose losses ?were not included in the loss calculation?). The lack of victims is further demonstrated by the fact that the Government has noti?ed the potential victims on its website but has not yet identi?ed any victim that has submitted a response or otherwise contacted the Government about any loss. See PSR 1123, p. 7. Accordingly, there can be no enhancement for the number of victims under V. MASS-MARKETING The PSR states that a 2-level enhancement is warranted under because the offense was committed through mass marketing. The Sentencing Commission's Application Note de?nes ?mass-marketing? as: ?a plan, program, promotion, or campaign that is conducted through solicitation by telephone, mail, the Internet, or other means to induce a large number of persons to purchase goods or services; (ii) participate in a contest or sweepstakes; or invest for ?nancial pro?t.? Application Note The Note explains that mass-marketing includes ?a telemarketing campaign that solicits a large number of individuals to purchase fraudulent life insurance policies.? The Second Circuit has held ?that the mass?marketing enhancement is properly applied only when the targets of the mass-marketing are also in some way victims of the scheme.? United States v. Lacey, 699 F.3d 710, 714 (2d Cir. 2012). ?It is not enough that a scheme may be advanced by the use of mass marketing techniques; a scheme is committed through mass? 15 Case Document 180 Filed 11/08/17 Page 16 of 32 marketing only when the mass marketing is directed toward individuals who will be harmed by the scheme.? Id. at 714-15. Insofar as there were no victims identi?ed that have suffered actual loss, the Court cannot ?nd that there was mass-marketing targeted at the victims. Nor was there any conduct that could constitute mass-marketing in this case. While the PSR generally references ?marketing efforts by the underwriters and others,? the only speci?c conduct identi?ed in the PSR is ?posting the Of?cial Statements for each bond issued that contained ?nancial and other information about the Town on the Internet to be ready by potential investors.? PSR at 1i 30. There was no advertising or solicitation. The bonds offering documents were simply posted to the EMMA website and thereafter sold. This is not marketing this is how municipalities sell bonds. There was no solicitation. Accordingly, there can be no enhancement for committing the offense through mass- marketing under VI. SOPHISTICATED MEANS The PSR states that a 2-level increase is warranted because the offense involved sophisticated means. ?Sophisticated means? is de?ned in the Application Notes as follows: especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. For example, in a telemarketing scheme, locating the main of?ce of the scheme in one jurisdiction but locating soliciting operations in another jurisdiction ordinarily indicates sophisticated means. Conduct such as hiding assets or transactions, or both, through the use of ?ctitious entities, corporate shells, or offshore ?nancial accounts also ordinarily indicates sophisticated means. Application Note The Second Circuit has recognized that certain conduct, such as ?the creation and use of false documents, and other tactics to conceal offense conduct, are indicia of the sophistication of an offense.? United States v. Fofanah, 765 F.3d 141, 146 (2d Cir. 2014). See also United States 16 Case Document 180 Filed 11/08/17 Page 17 of 32 v. Lewis, 907 F. Supp. 683, 686 (S.D.N.Y. 1995) (?Because there was nothing about this scheme that prevented the identi?cation of the criminal or the discovery of the fraud, the court found that sophisticated means had not been used?). Here, there was no false documents or forgery nor other actions taken to conceal the offense conduct or identity of Mr. St. Lawrence. Accordingly, a sophisticated means enhancement is not warranted. VII. ROLE IN OFFENSE In the PSR Mr. St. Lawrence?s offense level was raised 4 levels due to his leadership role in the offense. (PSR ll 34). Mr. St. Lawrence objects to the enhancement for role in the offense. A role enhancement is not proper in this case. Enhancing Mr. St. Lawrence?s sentenced based on his role in the offense would be manifest injustice. Guideline section 3Bl.1 states: ?Based on the defendant's role in the offense, increase the offense level as follows: If the defendant was an organizer or leader of a criminal activity that involved ?ve or more participants or was otherwise extensive, increase by 4 levels.? The PSR gave a 4 level enhancement for Mr. St. Lawrence?s role in the offense. (PSR 11 34; page 8.) It is respectfully submitted that this enhancement for role in the offense is in error. ?Before imposing a role adjustment, the sentencing court must make speci?c ?ndings as to why a particular subsection of [the] 3B1.1 adjustment applies.? United States v. Skys, 637 F.3d 146, 156?57 (2d Cir. 2011) (quoting United States v. Ware, 577 F.3d 442, 451 (2d Cir. 2009). Here, there are insuf?cient facts from which the Court can make the requisite ?nding that (1) Mr. St. Lawrence was an organizer or leader or a criminal activity that either involved 5 or more participants or was otherwise extensive. 17 Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 18 of 32 a. Leader or Organizer First, the Government has not proven that Mr. St. Lawrence was the leader or organizer of the criminal activity. Mr. St. Lawrence?s titles of Town Supervisor, Director of Finance and President of the RLDC do not themselves provide a basis for applying a leadership enhancement under Application Note 4 to 3B 1.1 states: In distinguishing a leadership and organizational role from one of mere management or supervision, titles such as ?kingpin? or ?boss? are not controlling. Factors the court should consider include the exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others. There can, of course, be more than one person who quali?es as a leader or organizer of a criminal association or conspiracy. This adjustment does not apply to a defendant who merely suggests committing the offense Applying these factors to this case, the fact that there were no ?fruits of the crime? of which Mr. St. Lawrence claimed a right to have a larger share. Defendant was not involved in the day-to- day operations of the Town?s ?nancial department. Under Second Circuit case law, the owner of a corrupt company can have his sentenced enhanced for a leadership role in the offense but none of those cases support such an enhancement in this case. United States v. Duncan, 42 F.3d 97 (2d Cir. 1994) (defendant was President of company that made corrupt political payoffs, evidence that defendant was directly involved in dispensing some payments and favors); United States v. DeRiggi, 72 F.3d 7 (2d Cir. 1995) (defendant was supervising inspector in a New York City Taxi and Limousine Commission inspection station where bribes were regularly accepted. Defendant's sentence was enhanced for leadership role due to his control of the inspection station and his participation in the scheme); United States v. Wisniewski, 121 F.3d 54 (2d Cir. 1997) (defendant was owner of 18 Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 19 of 32 car dealership that sold cars to drug dealers for cash by means designed to avoid reporting cash transactions. Defendant actively participated in the crime, played a day-to-day role in the conspiracy, hired and supervised other co-conspirators and was the principal bene?ciary of the crime); United States v. Escotto, 121 F.3d 81 (2d Cir. 1997), (the scheme consisted of three ?boiler room? companies that defrauded mostly elderly people. Defendant was part owner of all three companies, managed two of the companies, signed payroll checks for one of the companies, helped hire salesmen, provided leads and trained employees); United States v. Kilkenny, 493 F.3d 122 (2d Cir. 2007) (defendant received leadership enhancement due to the fact that he supervised the company bookkeeper who prepared false documents used in defendant's bank fraud.) Other Circuits have distinguished between a defendant's role in the corporate hierarchy and his role in the offense. In United States v. DeGovanni, 104 .3d 43 (3rd Cir. 1997) the Third Circuit held that a police sergeant who was the supervisor of a group of police of?cers who assaulted and seized money from suspected drug dealers, made arrests without probable cause, conducted illegal searches and fabricated evidence, should not have his sentence enhanced for having played a leadership role in the offense. DeGovanni participated and pro?ted from the illegal activity but claimed that, while he was a supervisor within the Police Department, he was a rank and ?le member of the conspiracy. The Third Circuit found that the ?defendant's role in the criminal activity is the operative issue.? (emphasis in the original) Id. 46, and held that for a defendant?s sentence to be properly enhanced for leadership in the offense, the defendant must ?have an active supervisory role in the actual criminal conduct of others to justify the enhancements contained in this section [3Bl.1] of the Guidelines.? (emphasis in the original) Id. 46. 19 Case Document 180 Filed 11/08/17 Page 20 of 32 In United States v. Litch?eld, 959 .2d 1514, 1521 (10th Cir. 1992), the defendant was i the leader of a gold mining operation that was marketed by fraudulent means. The district court found that the defendant was essential to the success of the fraud and enhanced his sentence for having played a leadership role in the offense. The Tenth Circuit remanded for re-sentencing. The Tenth Circuit found that ?[a]1though defendant may have recruited unwitting investors, he did not recruit accomplices. Defendant did not control distribution of the pro?ts; nor does it appear that he took a larger division of the pro?ts. Defendant did not exercise decision making authority over his coconspirators.? Id. 1523. Accordingly, the defendant was held not to qualify for an enhanced sentence as a leader of the offense. The facts of the instant case are more in line with the Third Circuit decision in DeGovarmi and the Tenth Circuit decision in Litch?eld then with the line of Second Circuit cases outlined above. The trial evidence also establishes that Mr. St. Lawrence did not receive any personal ?nancial bene?t from the sales of the Town of Ramapo and RLDC bonds. AppliCation Note 4 to Guideline Section 38 1.1 states, in relevant part, that in determining if a defendant had a leadership role in the offense, the ?factors the court should consider include the exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to ?a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others.? Mr. St. Lawrence did not share in any fruits of the crime. The only benefactors were the Town residents who have roads, bridges and other vital infrastructure that has been built, repaired or maintained through the issuance of public improvement bonds while not increasing taxes. The residents have a beautiful 20 Case Document 180 Filed 11/08/17 Page 21 of 32 baseball stadium for minor league baseball and other events. And 122 residents now have homes through the building of the Ramapo Commons. Applying those factors to this case requires the conclusion that it would be improper to enhance Mr. Lawrence?s sentence based on his role in the offense. While Mr. St. Lawrence was the supervisor, he did not play a leadership role in the offense. It is respectfully submitted that it would be inappropriate to enhance Mr. St. Lawrence?s sentence pursuant to Guideline section 3B1 . 1. b. Number of Participants Second, the Government has not proven that the criminal activity involved ?ve or more participants. The Government identi?ed Aaron Troodler, and - - as the other four ?participants? involved in the criminal activity. The Application Notes de?ne ?participant? as ?a person who is criminally responsible for the commission of the offense, but need not have been convicted.? ?3Bl.1, Application Note 1. Three of these individuals were never charged. Although being charged criminally is not a prerequisite for a ?participant? Within the meaning of 0. Otherwise Extensive Criminal Activity Third, the criminal activity was not ?otherwise extensive.? The Application Notes provide that assessing whether an organization is ?otherwise extensive,? all persons involved during the course of the entire offense are to be considered. Thus, a fraud that involved only three participants but used the unknowing services of many outsiders could be considered extensive.? Application Note 3. The Government has argued that the criminal activity was ?otherwise extensive? because ?it lasted for several years and involved several complex sub? 21 Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 22 of 32 schemes within the larger scheme, several bond issues, and a substantial number of acts and false statements to carry out the scheme.? (Govt. Letter to Probation 8/17/17). The length of time over which the criminal activity occurs is insuf?cient to establish that the activity is ?otherwise extensive.? United States v. Ware, 577 F.3d 442, 454 (2d Cir. 2009). The Second Circuit has set forth the proper inquiry for an ?otherwise extensive? leadership role enhancement: ?an adjustment under Guidelines 3B1.1 is based primarily on the number of people involved, rather than other possible indices of the extensiveness of the activity.? Id. at 802. In determining the number of participants, a district court considers: (1) the number of knowing participants in the criminal activity; (2) the number of unknowing participants whose activities were organized or led by the defendant with speci?c criminal intent; and (3) the extent to which the services of the unknowing participants were peculiar and necessary to the criminal scheme.? With that, a district court can determine whether the scheme at issue was ?otherwise extensive,? that is, whether the scheme was ?the functional equivalent of one involving ?ve or more knowing participants.? United States 12. Kent, 821 F.3d 362, 369 (2d Cir. 2016) (citation omitted). None of these factors are present in Christopher St. Lawrence?s case, nor were they considered by the Government. RELEVANT CASE LAW FACTORS The Supreme Court?s decision in United States v. Booker, 543 U.S. 220, 245-246 (2005) rendered the federal Sentencing Guidelines advisory, thereby changing ?the decision-making process of every district judge in determining every sentence.? United States Crosby, 397 F.3d 103, 116 (2d Cir. 2005). Booker and the subsequent case law have returned to trial judges the authority to impose sentences that are, according to ?3553(a), ?suf?cient but not greater than necessary, to comply with the purposes [of sentencing] set forth in? ?3553(a)(2). Simon v. United States, 361 F. Supp.2d 35, 39, 47 (E.D.N.Y. 2005). They leave in place a system where the Guidelines are another of the seven considerations spelled out in 18 U.S.S.C. 3553(a) that courts are required to take into account. 22 Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 23 of 32 In discussing the type and degree of consideration that courts are required to give to the Guidelines, in United States v. Fleming, 397 F.3d 95, 100 (2d Cir. 2005), the Second Circuit noted that no speci?c verbal formulations should be prescribed to demonstrate the adequate discharge of the duty to ?consider? matters relevant to sentencing. As long as the judge is aware of both the statutory requirements and the sentencing range or ranges that are arguably applicable, and nothing in the record indicates misunderstanding about such materials or misperception about their relevance, we will accept that the requisite consideration has occurred. Id.4 Thus, while sentencing judges must still consider the Guidelines, there is no basis for treating the Guidelines as more controlling of the court's sentencing decision than any of the other factors the court must "consider" pursuant to ?3553(a). United States 12. Lake, 419 F.3d 111, 114 (2d Cir. 2005), explaining United States v. Crosby, 397 F.3d 103, 111 (2d Cir. 2005). See United States v. Rattoballi, 452 F.3d 127, 137 (2d Cir. 2006) sentence must re?ect consideration of the balance of the? 3553(a) factors; unjusti?ed reliance upon any one factor is a of an unreasonable sentence.? See also United States v. Fernandez, 443 F.3d 19, 34-35 (2d Cir. 2006) (?we will not second guess the weight (or lack thereof) that the judge accorded to a given factor [under as long as the sentence ultimately imposed is reasonable in light of all the circumstances presented? (emphasis added by Court in Rattoballi). Similarly, the Court need not determine whether Mr. St. Lawrence is entitled to a ?downward departure? because, as Crosby explained there is a distinction between a "departure" and a sentence outside the Guidelines range. 4 The Court in Crosby did not eviscerate the substance of ?consider? altogether: [i]n order to ful?ll this statutory duty to ?consider? the Guidelines, a sentencing judge will normally have to determine the applicable Guidelines range. A judge cannot satisfy this duty by a general reference to the entirety of the Guidelines Manual, followed by a decision to impose a ?non?Guidelines sentence.? 397 F.3d at 111. 23 Case 7:16-cr-00259-CS Document 180 Filed 11/08/17 Page 24 of 32 We think it advisable to refer to a sentence that is neither within the applicable Guidelines range nor imposed pursuant to the departure authority in the Commission's policy statements as a "non-Guidelines sentence" in order to distinguish it from the term "departure.? A "departure," in the jurisprudence of the mandatory Guidelines regime, meant a sentence above or below the applicable Guidelines range when permitted under the standards governing departures. A "departure" was not a sentence within the applicable Guidelines range, but it was nonetheless a "Guidelines sentence," imposed pursuant to the departure provisions of the policy statements in the Guidelines, as well as the departure authority of subsection 3553(b)(l). United States v. Crosby, 397 F.3d at 112 n.9. See also Booker, 543 US. at 301 (Stevens, J., dissenting in part) (?there can be no ?departure? from a mere suggestion?); United States v. Ranum, 353 F. Supp.2d 984, 986-87 (ED. Wis. 2005). IX. APPLICATION OF THE 3553(a) MANDATE AND FACTORS WARRANTS A NON- GUIDELINE SENTENCE FOR CHRISTOPHER ST. LAWRENCE The challenge in this case, like all cases, is to determine a fair sentence that is suf?cient but not greater than necessary. A sentence'that is too lenient deprecates the seriousness of the crime and fails to promote respect for the law. At the other extreme, a sentence that is too severe is unjust and also fails to promote respect for the law. We can start with the general agreement that crimes involving wire and securities fraud are serious. In the instant case, however, Mr. St. Lawrence did not ?nancially gain or bene?t from the fraudCavanagh, 155 F.3d 129 (2d Cir. 1998), the Second Circuit discussed, among other things, the freezing of assets of a third-party bene?ciary of the violations of the Securities Act of 1933. The SEC sought and received an injunction freezing the proceeds of the alleged violation of the Security Act of a ?nominal? defendant, who the SEC did not accuse of any wrongdoing. The Second Circuit held that ?[f]ederal courts may order equitable relief against a person who is not accused of wrongdoing in a securities enforcement action where that person: (1) has received ill- gotten ?mds; and (2) does not have a legitimate claim to those funds.? Id. at 136. Thus, in the Second Circuit, a party who receives a bene?t that is incidental to the securities fraud being prosecuted, through no wrongdoing of his own, may have such ill~gotten bene?t disgorged. See also, US. v. Contorinis, 692 F.3d 136, 146 (2d Cir. 2012). In Contorz'nis, the govenment sought disgorgement of pro?ts and losses as a result of the fraud in question from the Defendant was a fund manager and never personally received any of the pro?t. The Court held that disgorgement is improper ?where the proceeds go directly to an innocent third party and are never possessed by the defendant.? Id. at 147. Similar to the cases above, Mr. St. Lawrence never personally bene?ted by any of his actions in this case. Mr. St. Lawrence did not receive nor did he possess any proceeds or other ill-gotten bene?ts as are customary in 24 Case Document 180 Filed 11/08/17 Page 25 of 32 Almost all defendants who charged with securities and wire fraud ?nancially bene?ted in some way, Mr. St. Lawrence did not ?nancially bene?t at all. The overriding principle of 3553(a) requires a district court to impose a sentence "suf?cient, but not greater than necessary," to satisfy the four purposes of sentencing set forth in 3553(a)(2). The four purposes of sentencing set forth in 3553(a)(2) are: (A) to re?ect the seriousness of the offense, to promote respect for the law and to provide just punishment for the offense; (B) to afford adequate deterrence to criminal conduct; (C) to protect the public from further crimes of the defendant and (D) to provide the defendant with the needed educational or vocational training, medical care or other correctional treatment in the most effective manner. In determining whether the sentence is suf?cient to comply with the 3553(a)(2) purposes of sentencing factors listed in 3553(a). These factors are: (1) the nature and circumstances of the offense and the history and characteristics of the defendant; (2) the kinds of sentences available; (3) the now advisory sentencing guidelines and policy statements; (4) the need to avoid unwarranted sentencing disparity; and (5) the need to provide restitution where applicable. None of these factors are to be given greater emphasis than another. However, all of the factors are subservient to the overriding mandate to impose a sentence not greater than necessary. similar cases. Rather, the only entities which could have possibly bene?tted, by way of the Government?s argument, was the Town of Ramapo or the RLDC. Yet no action by the SEC to recover the claimed loss ?om the Town or the RLDC as a third-party bene?ciary in the settlement of the SEC civil enforcement action. The reason that the Government is not seeking disgorgement or restitution to the investors from the Town of Ramapo or the RLDC is simple. It is because a loss did not occur in this case. 25 Case Document 180 Filed 11/08/17 Page 26 of 32 a. 3553(a)(1) Nature of the Offense and Characteristics of the Defendant When analyzing the characteristics of the defendant one must read 3553(a)(1) in conjunction with 18 U.S.C. 3661 which provides that "no limitation shall be placed on the information concerning the background character and conduct of [the defendant] which a court of the United States may receive and consider for the purpose of imposing an appropriate sentence.? Thus, the court can consider a variety of factors regarding the defendant's background and character such as: his age, his mental and emotional maturity level, and educational or vocational skills. b. The sentences available (3553(a)(3)) and the need to avoid unwarranted sentencing disparity (3553(a)(6)) The need to avoid unwarranted sentencing disparities is also a factor that can be considered where there is no loss. See United States v. Tennant (where Judge Batts found that the Government failed to establish a fraud loss and sentenced the defendant to time-served and three years supervised release). Moreover, the deterrent purpose of sentencing will be suf?ciently met by the Probation Department?s oversight during supervised release. The defense believes that the adjusted sentencing range of 135 to 168 months for a person with no criminal history who did not receive a thin dime is beyond greater than necessary to re?ect either the seriousness of the offense, the need for deterrence, to protect the public from further crimes of this defendant, or to provide any treatment which may be appropriate. We agree with Probation that a variance to a non-guideline is warranted, however, we are asking that Court go even further than Probation is recommending and sentence Mr. St. Lawrence to a sentence of time served and a period of home con?nement followed by supervised release of 3 years. This is a man who was found by the jury to have violated the law. Since committing this crime, his conduct has been everything one would hope for in a productive citizen: he has 26 Case Document 180 Filed 11/08/17 Page 27 of 32 accepted his fate as a convicted felon and disgraced politician but has continued to maintain a loving relationship with his family. Rather than seeking a departure under any of the bases set forth in the Guidelines, Mr. St. Lawrence requests the Court to review the driving factors behind how the suggested sentencing range was arrived at, whether those factors adequately address risk factors presented by this individual defendant, and to sentence Mr. St. Lawrence accordingly. c. The offense level in this case overstates the severity of the offense Mr. St. Lawrence disagrees with the severity of the suggested punishment for this particular offense as a potential basis for a sentence below the suggested Guidelines range. We are in no way attempting to minimize the jury?s conviction of Mr. St. Lawrence but to point out all of the sentencing enhancements that should not be applied and are only being applied by the Government to drive up the years of incarceration. d. The offense level overstates the need to protect the public from further crime and the need for deterrence Mr. St. Lawrence falls into Criminal History Category I because he has no prior criminal history points. He has no points because he has no prior convictions. In fact Mr. St. Lawrence has no prior contact with the criminal justice system and his criminal history would be more aptly referred to as criminal history category if there was such a category. This is an area in which the Sentencing Commission has done a bit of homework. In its 15-year report, it found that defendants who fall into Category I due to no prior criminal history points are the least likely to re-offend. See United States Sentencing Commission, Recidivism and the First Offender at 13?14 (May, 2004) (re?ecting recidivism rate of 11.7 percent for offenders with 0 criminal history points, as opposed to a 22.6 percent rate for those with one criminal history point), available online at 27 Case Document 180 Filed 11/08/17 Page 28 of 32 An older ?rst-time offender like Christopher St. Lawrence warrants a non-Guidelines sentence because defendants who are over the age of forty ?exhibit markedly lower rates of recidivism in comparison to younger defendants.? United States v. Carmona?Rodriguez, No. 04 CR. 667 (RWS), 2005 WL 840464, at *4 (S.D.N.Y. Apr. 11, 2005); United States v. Hernandez, No. 03 CR. 1257 (RWS), 2005 WL 1242344, at *5 (S.D.N.Y. May 24, 2005). The demographic information, including a signi?cant work history, lack of drug use, education, and other socially bene?cial traits, tend to describe those who have no criminal history points. See Recidivism_FirstOffenderpdf at 6?8. Therefore, it appears that a sentence to protect the public is not a factor that weighs against Mr. St. Lawrence. Rather, it is one which indicates that a sentence is not necessary in this case. As for deterrence, Mr. Lawrence?s conviction will preclude him from ever serving in the of?ce that he held for 16 years, so the conviction has served a speci?c deterrent. As for a general deterrent, any public of?cial are likely deterred from municipal bonding and preparing of Of?cial Statements that may be found to contain incorrect or misleading information. Moreover, ?there is a considerable evidence that even relatively short sentences can have a strong deterrent effect on prospective ?white collar? offenders.? United States v. Adelson, 441 F. Supp. 2d 506, 514 (S.D.N.Y. 2006). Therefore, the statutory factors of protecting the public and deterrence are overwhelmingly undermined by imposing the sentence suggested by the Guidelines computation in this case. X. RESTITUTION Relevant here, the mandatory restitution provisions apply for an offense that is ?an offense against property under [Title any offense committed by fraud or deceit? 28 Case Document 180 Filed 11/08/17 Page 29 of 32 and ?in which an identi?able victim or victims has pecuniary loss? unless the Court ?nds that (A) the number of identifiable victims is so large as to make restitution impracticable; or (B) determining complex issues of fact related to the cause or amount of the victim's losses would complicate or prolong the sentencing process to a degree that the need to provide restitution to any victim is outweighed by the burden on the sentencing process. 18 U.S.C.A. 3663A As a threshold matter, the securities fraud counts Mr. St. Lawrence was convicted of are not Title 18 offenses but are offenses under Title 15; the mandatory restitution provisions of are thus inapplicable for these convictions. Notwithstanding whether or not the mandatory restitution could apply to the securities fraud convictions, there are no identi?able victims that have suffered pecuniary loss. Under the statute, the term ?victim? means a person directly and proximately harmed as a result of the commission of an offense for which restitution may be ordered including, in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the defendant's criminal conduct in the course of the scheme, conspiracy, or pattern. 18 U.S.C.A. 3663A The MVRA is applicable only to the extent that ?an identi?able victim or victims has suffered a physical injury or pecuniary loss.? In this case, as discussed above, the Government has not identi?ed any victims that suffered actual pecuniary loss from the offenses of conviction. The Government has not identi?ed any victim or their speci?c loss amount. The Court cannot order mandatory without identifying the speci?c victims and their loss. See United States v. Catoggio, 326 F.3d 323, 328?29 (2d Cir. 2003) The MVRA is clear that restitution can only be imposed to the extent that the victims of a crime are actually identi?ed, 18 U.S.C. Identi?cation of victims is a statutory prerequisite to the application of the MVRA. Additionally, 29 Case Document 180 Filed 11/08/17 Page 30 of 32 identifying victims prior to imposing restitution ensures that those victims receive the pro-rata share of the restitution funds to which they are entitled. Therefore, although we believe the victims of Ageloffs fraud are identi?able, the court erred in not identifying them before ordering restitution. United States v. Catoggio, 326 F.3d 323, 328?29 (2d Cir. 2003). Here, the Probation Department has recommended restitution in the amount of $2,923,000.00 based on the Government?s loss calculation. See PSR at 1i 91?92 and p. 20 (Recommendation). The Government has failed to identify any individual victim and instead has ?represented that restitution payments should be made to the Depository Trust Corporation or directly to brokerage ?rms upon which the victims? bonds are held in street PSR at 1i 92. This type of lump sum restitution order is improper. See United States v. Zakhary, 357 F.3d 186, 190 (2d Cir. 2004) lump sum_ restitution order entered without any identi?cation of victims and their actual losses is not permissible?). To be sure, ?even where a defendant's complex fraud scheme results in many victims whose identities and losses are dif?cult to ascertain, the district court should identify the victims and their actual losses prior to imposing restitution under the Catoggio, 326 F.3d at 329. Accordingly, restitution is not appropriate without identi?able victims and losses. XI. NO FORFEITURE In the Indictment the Government sought forfeiture of ?all property, real and personal, that constitutes or is derived from proceeds traceable to the commission of the offenses.? Indictment [Dkt. No. 4] at 37. The PSR similarly acknowledged forfeiture, though it did not actually recommend forfeiture as part of the recommended sentence. See PSR at 93-94 and p. 20 (Recommendation). No property or money was obtained by Christopher St. Lawrence to result in forfeiture for the conspiracy. It is the Government?s burden to prove that property is subject to forfeiture. See Fed. R. Crim. The Government previously advised the 30 Case Document 180 Filed 11/08/17 Page 31 of 32 defense by letter on December 2016 that it did not intend to seek forfeiture. To the extent the Government submits the basis for its contention that any property constitutes forfeitable proceeds of the offense, Mr. St. Lawrence will respond at that time. XII. CONCLUSION Mr. St. Lawrence was found guilty after trial. He realizes that the jury?s determination requires a sentencing hearing to arrive at some form of punishment. However, as expressed in all of the attached letters before this Court Mr. St. Lawrence has been punished already. Given Christopher St. Lawrence?s unlikelihood of recidivism, and the collateral ?nancial impact on him and his children it is respectfully requested that, for these reasons and the other reasons set forth above, we urge the Court to sentence Mr. St. Lawrence to a reasonable sentence of time served which would serve as a sentence a but not greater than necessary to address his conduct. If the Court feels that some amount of incarceration is warranted it is respectfully requested that the court consider a few months incarceration and six months home con?nement followed by three years supervised release. Respectfully submitted, 2 ICHAEL K. BURKE 31 To: Case Document 180 Filed 11/08/17 Page 32 of 32 James McMahon, Esq. (Via email and ECF) Assistant United States Attorney United States Courthouse Southern District of New York 300 Quarropas Street White Plains, New York 10601 Nicole Brown?Morin U.S. Probation Of?cer United States Probation Of?ce Southern District of New York 300 Quarropas Street White Plains, New York 10601 32