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Click here for the full text of this decision FACTS:In October 2003, authorities indicted Francisco Loya Jr. and Carlos Jorge Hinojosa on multiple charges including conspiracy to commit securities fraud in violation of 18 U.S.C. �371 (count one), securities fraud in violation of 15 U.S.C. ��77q(a) and 77x, as well as aiding and abetting the same in violation of 18 U.S.C. �2 (count two), wire fraud in violation of 18 U.S.C. ��2 and 1343 (counts three through six), mail fraud in violation of 18 U.S.C. ��2 and 1341 (counts seven through 30) and money laundering in violation of 18 U.S.C. ��2 and 1956(a)(1)(A)(i) (counts 31-45). In August 2005, Hinojosa pleaded guilty to Count 31 of the indictment, which alleged that Hinojosa had committed the crime of money laundering by conducting a financial transaction with the proceeds of the charged conspiracy, specifically the writing of a check on a bank account on July 14, 1998, payable to one of the named victims of the conspiracy in the amount of $4,000. The prosecutor offered the following summary as a factual basis for the plea at Hinojosa’s rearraignment/guilty plea proceeding: 1. Hinojosa operated a fraudulent investment program through the entities Economic Solutions and El Crucero in which he promised investors high rates of return and security of principal through investment in secret offshore trading accounts through various banks; 2. the program offered by Hinojosa did not exist; 3. Hinojosa represented falsely that his co-defendant Loya was a certified public accountant; 4. Hinojosa and Loya collected money from investors and sent the funds to another entity, which would return the investors funds to be distributed to earlier investors as purported profits in the form of a Ponzi scheme; 5. Hinojosa, as part of this scheme, caused a purported profits check to be sent to a named victim on July 14, 1998, as recited in the indictment; and 6. Hinojosa operated this investment scheme from January 1998 through Nov. 15, 1998, when the Texas Securities Board ordered the operations to cease. The prosecutor further stated that Hinojosa operated a second fraudulent investment scheme under the company name Solegasa del Norte during 2002. Authorities never filed criminal charges in connection with this scheme. At rearraignment, the district court admonished Hinojosa that restitution in the amount of $3,559,493.90 could be ordered. In its presentencing report (PSR), federal probation authorities, using the 1998 Sentencing Guidelines, began with a base offense level of 23 under U.S. Sentencing Guideline �2S1.1(a)(1), because Hinojosa was convicted of violating 18 U.S.C. �1956(a)(1)(A)(i). The PSR applied an enhancement of nine offense levels because the value of the funds involved in the two schemes exceeded $10,000,000. As a basis for this amount, the PSR stated that Texas officials “confirmed the total amount of relevant conduct attributable to Hinojosa is $11,068,502.57.” It is clear from the record, the court stated, that this amount includes losses attributable to the 2002 Solegasa del Norte fraud. The PSR also included an attached list of victims and the amounts of their losses. The PSR further added a four-level enhancement for Hinojosa’s role as a leader or organizer of a criminal activity involving more than five participants or that is otherwise extensive, pursuant to U.S. Sentencing Guideline �3B1.1(a). The PSR reduced the offense level by two levels for acceptance of responsibility under �3E1.1(a). As a consequence, Hinojosa had a total offense level of 34. With Hinojosa’s criminal history, this produced a guideline imprisonment range of 151 to 188 months. The PSR further recommended restitution in the amount of $6,659,493.90, which is based on losses resulting from the scheme underlying the indictment and the amount attributed to the 2002 Solegasa del Norte scheme. At sentencing, the district court stated that Solegasa del Norte losses were properly treated as relevant conduct in determining the sentence, because it was a common scheme with the charged conduct. The district court imposed a sentence of imprisonment of 169 months, followed by three years of supervised release, a $100 special assessment and ordered restitution in the amount of $6,659,493.90, which included net losses attributable both to the conspiracy charged in the indictment and to the Solegasa del Norte scheme. Hinojosa appealed. HOLDING:Reversed and remanded. The court first noted that U.S. Sentencing Guideline �2S1.1, which applies to money laundering offenses, provides for an enhancement based on the value of the funds involved in the offense. In addition, the court stated, U.S. Sentencing Guideline �1B1.3 groups offenses: 1. that occurred during the commission of the offense of conviction, in preparation for that offense or in the course of attempting to avoid detection or responsibility for that offense; and 2. acts that were part of the same course of conduct or common scheme or plan as the offense of conviction. Authorities grouped Hinojosa’s offenses under the second category. Hinojosa, the court stated, argued that the 2002 Solegasa del Norte transactions were not relevant conduct to the 1998 offense of conviction. He pointed to the three to four year interval between the two schemes and that the two schemes did not involve the same victims or accomplices. Hinojosa conceded that the purpose and modus operandi were similar but contended that there was no evidence that the two schemes were jointly planned or that the commission of one entailed the commission of the other. But the court disputed Hinojosa’s arguments. The guidelines, the court stated, only require that the two offenses “be substantially connected to each other by at least one common factor.” The district court satisfied this requirement in sentencing Hinojosa, the court stated. In this case, the court further explained, the Solegasa del Norte scheme and the charged frauds were linked by two factors: a common purpose and a similar modus operandi. The purpose of both schemes, the court stated, was to defraud victims in an investment scheme. Based on these facts, the court found that the district court did not clearly err in its conclusion that the charged offense and the Solegasa Del Norte scheme were part of a common scheme or plan. The court, however, did find error in the amount of restitution charged. The district court’s judgment ordered restitution of net losses attributable to the offense of conviction plus $3.1 million attributable to the Solegasa del Norte transactions in 2002, for a total of $6,659,493.90. Hinojosa argued that the district court erred in including the $3.1 million from the Solegasa scheme, because that scheme was outside the scope of the indictment and inconsistent with the understanding of the parties to the oral plea. The government conceded error on this point at oral argument, the court noted. Accordingly, the court vacated the sentence to permit the district court to reduce the restitution order by deleting the amount involved in the Solegasa del Norte scheme. OPINION:Davis, J.; Davis and Stewart, J.J., and Crone, D.J.

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