Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-2-2004

USA v. Wallace
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-3994




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Recommended Citation
"USA v. Wallace" (2004). 2004 Decisions. Paper 627.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/627


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                                                                NOT PRECEDENTIAL


                         IN THE UNITED STATES COURT
                                  OF APPEALS
                             FOR THE THIRD CIRCUIT


                              NOS. 03-3994 and 03-3995


                           UNITED STATES OF AMERICA

                                           v.

                               RICHARD C. WALLACE
                                    Appellant




                           On Appeal From the United States
                                      District Court
                        For the Middle District of Pennsylvania
                        (D.C. Crim. Action Nos. 02-cr-00299-1
                                   and 02-cr-00310-1)
                       District Judge: Hon. William W. Caldwell


                    Submitted Pursuant to Third Circuit LAR 34.1(a)
                                    May 25, 2004

                  BEFORE: ROTH and STAPLETON, Circuit Judges,
                        and SCHWARZER,* District Judge

                                  (Filed: June 2, 2004)




* Hon. William W. Schwarzer, United States District Judge for the Northern District of
California, sitting by designation.
                                OPINION OF THE COURT




STAPLETON, Circuit Judge:

       Appellant Richard A. Wallace pled guilty to mail fraud and bank fraud pursuant to

a plea agreement. He was sentenced to serve 37 months of incarceration on each

conviction to be served concurrently. He now appeals both sentences.

       Section 2F1.1(b)(4)(C) of the sentencing guidelines requires a two-level

enhancement “if the offenses involved . . . a violation of any prior, specific judicial or

administrative order, injunction, decree, or process not addressed elsewhere in the

guidelines . . .” U.S.S.G. § 2F1.1(b)(4)(C) (2000 Ed.). Wallace’s presentence

investigation report (“PSI”) indicated that the Pennsylvania Securities Commission

(“PSC”), on January 25, 2001, entered a cease and desist order against Apacor Financial,

Inc., Wallace and others prohibiting the further sale of certain Apacor notes to the public.

The PSI further evidences that Apacor continued to sell the notes until the end of March,

2001, with $114,000 worth of notes being sold during the January to M arch period.

These portions of the PSI were not challenged.

       At the sentencing hearing, Wallace took the position that the § 2F1.1(b)(4)(C)

enhancement was not applicable to him because a violation of the order must be a

knowing one and he was not aware of the existence of the cease and desist order “until

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long after it was entered.” App. at 141. According to his own testimony, however, he

was aware of the order as of early March, 2001, and two or three notes were sold later in

March. Moreover, Wallace’s testimony about only learning of the order in early March

was impeached (1) by a statement given by him to the FBI in October 2002 admitting that

he became aware of the order in February, 2001; and (2) by the statements of two former

Apacor employees, Gina DeMarco and Arthur Carlson, who told the FBI that Wallace

was aware of the order as soon as it was entered. There thus was ample record support

for the District Court’s conclusion that Wallace had knowingly violated the PSC order

and that there should be a two-level enhancement.

       To the extent that Wallace is arguing that his mental state was so compromised

during February and March 2001 that he couldn’t knowingly violate the cease and desist

order, his argument is inconsistent with the District Court’s denial of Wallace’s

downward departure motion based upon alleged diminished capacity. After a hearing on

Wallace’s mental state, the District Court denied the motion and found that Wallace did

not suffer from any significantly reduced mental capacity during the course of the crime.

       The judgment of the District Court will be affirmed.




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