It seemed to be done and gone, a multi-million dollar federal mortgage fraud case landed a Norwalk man a 16-year prison sentence back in 2010.
But an appellate court decision has thrown the case back for resentencing on a procedural error, capturing the attention of local white collar lawyers once again.
The U.S. Court of Appeals for the Second Circuit recently considered an argument by William Trudeau’s lawyers that the 2010 sentence he is currently serving went against the jury’s verdict, which found him guilty of two charges for fraud and conspiracy, but acquitted him of nine more serious counts for bank and wire fraud.
In his appeal of Trudeau’s sentence, Hartford white collar defense lawyer Ross Garber of Shipman & Goodwin argued the punishment handed down by U.S. District Court Judge Janet C. Hall was disproportionate to the crimes of conspiracy and fraud and “ran afoul of constitutional protections.”
The appellate court rejected Garber’s most substantial argument. After all, the sentence was well below the manximum time allowed under the law. But it remanded the case back for resentencing by Hall, based on her understanding at the time of sentencing that the maximum Trudeau faced was 20, instead of 40 years.
The madate for resentencing, the court wrote, is “solely for the district court to consider whether it would have sentenced Trudeau differently if it had understood the statutory maximum was 20 years for each count.”
Even though the appellate court rejected the argument that Trudeau’s sentence was unconstitutional, the remand was seen as a partial victory for some white collar defense lawyers, who said it helps bolster their call for sentencing reform measures.
The Trudeau case, they say, illustrates that federal judges should not be permitted to consider facts beyond what the defendant is convicted of. Supporters for such a change include Richard D. Willstatter, a White Plains N.Y. lawyer who is on a national committee of lawyers who supported Trudeau’s appeal.
“It should be up to a jury to decide whether a person is guilty of an offense, not judges,” Willstater, who serves on a sentencing committee with the National Association of Criminal Defense Lawyers said. “I think sooner or later, the Supreme Court should take a look at this issue.”
It’s too early to say whether this case in particular will lead to a look by the high court, but it’s not likely, because the Second Circuit rejected the argument that the sentence was disproportionate or improper, said David Ring, a partner in the white collar defense practice at Wiggin and Dana.
Ring, who was familiar with but not involved in the case, said because the decision to remand Trudeau’s case for resentencing was limited to one particular issue of what the judge understood was the maximum under sentencing guidelines were, there will very likely be no difference in the outcome.
“She might find there was no difference, and not even bring him in,” Ring said.
At the same time, Ring said, some defendants he’s encountered have ended up getting more time after winning similar appeals. “There are a lot of different ways this could turn out.”
Likewise, Alan Sobol, a partner in the white collar practice group at Pullman & Comley, said that any time a case is sent back for resentencing “all bets are off.”
Trudeau’s lawyer, Garber, declined to comment on the appeal and resentencing, because the matter is still pending. A hearing has not yet been scheduled.
Trudeau’s legal troubles began in 2005, according to prosecutors, when he and childhood friend and Wilton lawyer, Joseph Kriz, began developing and selling high end properties together in lower Fairfield County.
In 2010, Trudeau was charged by indictment with 11 counts, including allegations that he engaged in a broad scheme to defraud bank and mortgage lenders out of millions by submitting false loan documents.
Trudeau went to trial on all 11 counts, but he was only convicted of the two counts for fraud and conspiracy. When he appeared at his sentencing hearing, Trudeau, who had paid back the $50,000 loan he was convicted of accepting, was expecting to receive just a few months in prison, his lawyer said.
Hall told Trudeau in court that she considered the totality of the evidence, including testimony from more than 20 victims. At the sentencing hearing, Hall told Trudeau she found “by a preponderance of the evidence” that he had in fact committed all of the offenses for which he was acquitted.
With that, she slapped him with the 16 years.
Jonathan J. Einhorn, a New Haven criminal defense lawyer who practices in federal court, said that under the current law, federal judges are allowed to rely on information beyond what a person is convicted of, which Einhorn and others say tramples on a defendant’s rights and should be changed.
“I think it’s blatantly unfair,” Einhorn said. “My thought is, if a person’s sentence is going to be enhanced over considerations of what a jury has found, the sentencing should go back to the jury for their consideration.”
Federal prosecutors declined to comment on what recommendations they will make to the court. In spite of “respectfully” declining to comment, Tom Carson, a spokesman for the U.S Attorney’s Office, said, “we just want to draw your attention to the summary order, which clearly states that the sentence was substantively reasonable.”