Petition for Writ of Certiorari — Stern v. United States

5

In his direct appeal to the First Circuit, Stern pre-

sented the following issue:

WHETHER THE DISTRICT COURT WAS

DEPRIVED OF JURISDICTION TO TRY,

CONVICT AND SENTENCE STERN WHERE

ALL OF THE ELEMENTS OF THE OF-

FENSES CHARGED WERE NOT INCLUDED

IN THE INDICTMENT OR PRESENTED TO

THE TRIER OF FACT OR PROVEN AT

TRIAL BEYOND A REASONABLE DOUBT AS

REQUIRED UNDER APPRENDI v. NEW

JERSEY, 530 U.S. 466 (2000)?

On February 19, 2004, the First Circuit Court of

Appeals affirmed the Judgment of the district court,

saying in relevant part:

Stern acknowledges that this court has already

rejected his argument invoking Apprendi... .

“Apprendi simply does not apply to guideline

findings that increase the defendant's sentence,

but do not elevate the sentence to a point beyond

the lowest applicable statutory maximum.”

United States v. Caba, 241 F. 3d 98, 101 (ist

Cir. 2001). “Nothing in Apprendi or |other]

cases” — including Ring v. Arizona, 536 U.S.

291 (2002), the grant of certiorari in Blakely »v.

Washington, 124 S.Ct. (Oct.- 20, 2003), and

United States ovo. R.L.C., 503 US. 291

(1992).... — “calls into question the validity of

the Sentencing Guidelines.” ... For the present

we have no reason to think that Apprendi

will be applied to the federal guidelines. App

1-2 (emphasis added).

6

On March 25, 2004, Stern filed a Petition for Panel

Rehearing and En Banc Determination which was denied

on April 22, 2004. App. 5-6. :

On September 16, 2004 Stern filed his Petition for

Writ of Certiorari with this Court relying on Apprendi v.

New Jersey and Blakely v. Washington, 542 U.S. 296

124 S.Ct. 2531 (2004), which had just been decided by this

Court as authority to set asi_e the sentence and conviction

which had been entered against him.

On January 24, 2005, this Court granted the Petition

for Writ of Certiorari, vacated the Judgment of the First

Circuit Court of Appeals of February 19, 2004, and re-

manded the case for further consideration in light of

United States v. Booker. App. 13.

Upon remand the First Circuit directed the parties to

file supplemental briefs dealing with the issue of whether

Booker error had been preserved and whether the plain

error doctrine enunciated by the First Circuit in United

States v. Antonakopoulos, 399 F. 3d 68 (ist Cir. 2005)

warranted remand to the district court for resentencing.

Nowhere in the order was there any discussion or directive

relative to the Fifth and Sixth Amendment issues previ-

ously raised by the Petitioner that the district court was

deprived of jurisdiction to try, sentence and convict him

under the facts of the instant case.

On May 31, 2005 Petitioner submitted his Supple-

mental Brief asserting that the plain error doctrine was

inapplicable, that Booker had affirmed the due process

jurisprudence recited in In Re Winship, 397 U.S. 358

(1970) and culminating with this Court’s decision in

Blakely. Petitioner further contended that the First Circuit

was obligated to take up his jurisdictional challenge which

7

had not been addressed in the First Circuit's original

decision affirming the Petitioner’s conviction.

The First Circuit, without addressing the Fifth

Amendment challenge to his conviction, affirmed without

hearing and further briefing, the district court’s sentence

and Judgment of Conviction. The First Circuit in its

Judgment of June 29, 2005 stated that Petitioner’s argu-

ments in the Supplemental brief “misapprehend|[s] both

the remedial opinion in Booker and circuit precedent and

we reject them out of hand.” App. 13.

To preserve his challenge to the Judgment of Convic-

tion the Petitioner seeks review by submission of this

Petition for Writ of Certiorari.

>

REASONS FOR GRANTING THE WRIT

The primary reason for granting Petitioner’s Writ of

Certiorari is to clarify the application of Apprendi to the

constitutional claim that the failure of the government to

include money amounts in the indictment violated the

Fifth Amendment right to a valid “presentment or indict-

ment of a Grand Jury,” and violated his due process rights

as well. Further support for Petitioner’s contentions was

expressed in this Court’s teachings in Blakely v. Wash-

ington.

Petitioner has exhausted every means available to

bring these issues before the Court of Appeals for the First

Circuit. On two separate occasions, once in his direct

appeal in the initial Brief filed on September 12, 2003 and

later on May 31, 2005 in his Supplemental Brief filed after

this Court’s grant of Certiorari, he presented this Fifth

8

Amendment challenge to his conviction and sentence. On

both occasions the First Circuit failed to address the

question presented.

The First Circuit’s failure to address Petitioner's

arguments has created a conflict with other Circuits who

have held that the failure of an indictment to charge an

offense may be treated as a jurisdictional defect and raised

at any time.

This case presents an excellent vehicle for the Court

to address and decide the open question as to whether the

failure of the government to allege and prove at trial

money amounts which result in a criminal defendant’s

sentence and conviction violates the Fifth Amendment of

the Constitution, and resolve the conflict in the Circuit

Courts of Appeal described above.

+

SUMMARY OF ARGUMENT

The First Circuit has continued in its persistence in

refusing to address the Fifth Amendment challenge to

Petitioner’s conviction. As evidenced from the Trial Tran-

scripts (App. 22-25) and continuing with his reliance upon

Apprendi in his direct appeal, the Petitioner raised a

serious Fifth Amendment challenge to his conviction. He

suggested that the district court was deprived of the

jurisdiction to try, sentence and convict him where all of

the elements of the offenses charged were not included in

the indictment or presented to the trier of fact or found at

trial by the constitutional standard of beyond a reasonable

doubt.

9

This failure was further exacerbated by the refusal of

the First Circuit to follow the mandate of this Court in

reassessing this issue subsequent to the grant of Certio-

rari following this Court’s decision in Booker. Just as all

the “ircuit Courts of Appeal did following this Court’s

holding in Apprendi, the First Circuit refused to consider

the open question of whether the due process clause

requires that an indictment contain all of the facts and

elements necessary to establish the crime with which a

defendant is charged.’

After Booker was decided, and the Judgment of the

First Circuit vacated, the Petitioner again presented his

position asserting that the due process jurisprudence

recited in Winship had been reaffirmed in both Blakely

and Booker thereby casting the instant case, not one

addressed only to a sentencing error, but one which

required the First Circuit to examine and decide the

challenge and the contention of constitutional magnitude

that the Fifth and Sixth Amendment notice and grand jury

rights were implicated sufficient to warrant the setting

aside the Petitioner’s conviction.

The facts of the instant case are relatively clear and

simple. The Apprendi issue was framed and presented,

albeit unsuccessfully, at trial. (App. 22-25). The Judgments

of the First Circuit are succinct in their rejection of Ap-

prendi and their refusal to address the core Fifth

* In Apprendi v. New Jersey, this Court did not address the Fifth

Amendment question that the omission of any reference to facts which

might enhance a sentence might implicate the application of the Grand

Jury clause in connection with the validity of an indictment and

ultimate judgment of conviction. Apprendi, 530 U.S. at 490 fn. 3.

10

Amendment challenge to Petitioner’s conviction.’ Accord-

ingly, this case is an excellent vehicle for considering the

questions presented.

oe

4

ARGUMENT

A. The Indictment in the Instant Case Was Consti-

tutionally Infirm in Failing to Charge a Federal

Offense.

The Indictment (App. 22-25) fails in the charging

portion to recite to any factual allegations relating to

money amounts which purportedly are the grounds for the

Mail and Wire Fraud Counts 1 thru 15. The factual state-

ments in Counts 1 thru 15 pertain to “interest” checks

which Petitioner remitted to the individual who claimed

that he had committed acts of fraud upon her. Counts 16-

18 recite no money amounts at all. Nowhere in the indict-

ment is there a statement of the alleged loss or money

amounts which formed the basis for the jury's ultimate

decision to find the Petitioner guilty.

* At the time Petitioner submitted his Petition for Writ of Certio-

rari he was still in custody and was challenging the length of his

sentence. Petitioner contended then and continues to posit the argu-

ment that the constitutionally mandated maximum sentence that could

have been imposed under the authority of Winship, Apprendi, Ring,

Blakely, and Booker was 0-6 months. Although, the Petitioner has

completed his custodial sentence this issue is not moot since the

supervised release portion of his Judgment of Conviction remains in

doubt if this question is resolved in his favor. Moreover, the First

Circuit, as asserted infra, failed to follow its own precedent in United

States v. Antonakopoulos, 399 F. 3d 68 (1st Cir. 2005) in not remand-

ing for review by the district court of a constitutionally infirm sentence.

11

In criminal proceedings, the indictment provides the

court with jurisdiction. See United States v. Stirone, 361

U.S. 212 (1960). The Sixth Amendment to the Constitution

requires that in all criminal proceedings, the accused shall

have the right to be informed of the nature and cause of

the accusations brought against him. This right has been

upheld in many instances by this Court as being funda-

mental in the law of criminal procedure.

The constitutional pedigree of this protection is

founded upon the holding in United States v. Cruik-

shank, where this Court stated:

“The object of the indictment, is, first, to furnish

the accused with such description of the charge

against him as will enable him to make his de-

fence, and avail himself of his conviction or ac-

quittal for protection against a further prosecution

for the same cause; and, second, to inform the court

of facts alleged, so that it may decide whether

they are sufficient in law to support a conviction,

if one should be had. 92 U.S. 542, 558 (1876).

It was the intention of the Framers of the Constitu-

tion under the Fifth Amendment to protect defendants

from the imposition of unjust punishment by ensuring

that the accused in criminal proceedings were afforded the

opportunity to defend against a charge upon which the

government would attempt to impose punishment. Rus-

sell v, United States, 369 U.S. 749, 763-64 (1962). Thus,

if the government fails to include facts upon which pun-

ishment may be imposed, and does not prove these facts to

a jury beyond a reasonable doubt, the conviction is constitu-

tionally flawed. This rule has been restated and amplified

upon on numerous occasions by this Court. In the case of In

Re Winship, 397 U.S. 358 (1970), this Court reiterated

12

that a defendant was entitled to a finding on each and

every fact necessary to constitute the crime with which he

is charged and for such findings to be found by the fact

finder at trial beyond a reasonable doubt. 397 U.S. at 364.

Subsequently, this Court in United States v.

Gaudin, 515 U.S. 506 (1995) held that a criminal convic-

tion must rest upon the fact finder’s determination that

the defendant is guilty of every element of the crime with

which he is charged beyond a reasonable doubt. 515 U.S.

at 510. This protection is especially important with respect

to findings that would dramatically change the sentence

that a defendant would face. See United States v. Jones,

526 U.S. 222, 223 (1999).

Most recently, in the trilogy of cases beginning with

Apprendi v. New Jersey, and followed by Ring v. Ari-

zona, 536 U.S. 584 (2002), and finally in Blakely v.

Washington, this Court reaffirmed the vital Sixth

Amendment protections afforded the criminally accused

defendants. In Apprendi, Justice Stevens writing for a

majority of the Court stated:

“{Ijt is unconstitutional for a legislature to re-

move from the jury assessment of facts that in-

crease the prescribed range of penalties to which

a criminal defendant is exposed. It is equally

clear that such facts must be established by proof

beyond a reasonable doubt.”

530 U.S. at 490.

13

Subsequently, in Ring v. Arizona, Justice Scalia in

his concurring opinion which reaffirmed his position in

Apprendi’ declared:

“I believe that the fundamental meaning of the

jury trial guarantee of the Sixth Amendment is

that all facts essential to the imposition of the

level of punishment that the defendant receives —

whether the statute calls them elements of the

* Petitioner contended at trial and later in his initial direct appeal

that all of the Circuit Courts of Appeal had relied upon the statement in

Apprendi that “other than the fact of a prior conviction, any fact that

increased the penalty for a crime beyond the prescribed statutory

maximum must be submitted to the jury and proved beyond a reason-

able doubt” as the primary teaching and holding which should be

applied in connection with sentencing enhancements. This of course

overlooked the primary constitutional holding which was later clarified

in Blakely. 124 S.Ct. at 2537. This clarification had been on-going in

the various Circuits when Petitioner filed his direct appeal brief in

September of 2003. Petitioner cited to United States v. Quinones, 313

F.3d 49, 53 (2d Cir. 2002) where the Second Circuit indicated that

pursuant to Ring aggravating factors were required to be alleged in. @

indictment and found by the jury at trial beyond a reasonable doubt.

Further, in Daniels v. Lee, 316 F.3d 477, 492 (4th Cir. 2003), the

Fourth Circuit held that “the Apprendi, Jones a Harris decisions

establish the principle that, in order to pass constitutional muster, the

elements of a criminal offense must be submitted to the jury and proven

beyond a reasonable doubt.” In addition, several other decisions

appeared to implicate the proposition set forth by the Petitioner. In

United States v. Rebmann, 321 F.3d 540, 545 (6th Cir. 2003), the

Sixth Circuit held that Ring “has clearly re-emphasized the necessity

for courts to distinguish sharply between elements of a crime requiring

the full panoply of due process protections and mere sentencing facts

that avoid the rigors of due process.” In United States v. Matthews,

312 F. 3d 652, 662 (5th Cir 2002), the Fifth Circuit indicated that the

Supreme Court in Apprendi had rejected the preponderance standard

for enhancements. Thus, the First Circuit's reliance upon United

States v. Caba, 241 F. 3d 98, 101 (1st Cir. 2001) could not form the

basis for rejecting the Petitioner’s constitutional argument that his

sentence and conviction should be set aside.

14

offense, sentencing factors, or Mary Jane — must

be found by the jury beyond a reasonable doubt.”

536 U.S. at 602. (Concurring Opinion, Scalia, J.).

Justice Scalia’s reasoning reached its nadir in

Blakely. In applying the above recited rule expressed in

Apprendi, he indicated that “two long standing tenets of

common law jurisprudence” were reflected in this princi-

ple:

“that the ‘truth of every accusa..on’ against a de-

fendant ‘should afterwards be confirmed by the

unanimous suffrage of twelve of his equals and

neighbors.’ ... and that ‘an accusation which

lacks any particular fact which the law makes

essential to the punishment is .. . no accusation

within the requirements of the common law, and

is no accusation in reason.” 124 S.Ct. at 2536.

Justice Scalia, went on further in Blakely in reliance

upon Ring v. Arizona to declare that:

“Our precedents make clear ... that the ‘statu-

tory maximum’ for Apprendi purposes is the

maximum sentence a judge may impose solely

on the basis of the facts reflected in the jury

verdict or admitted by the defendant... In

other words, the relevant ‘statutory maximum’ is

not the maximum sentence a judge may impose

after finding additional facts, but the maximum

he may impose without any additional findings.

When a judge inflicts punishment that the jury’s

verdict alone does not allow, the jury has not

found all of the facts which the law makes essen-

tial to the punishment ... and the judge exceeds

his proper authority.” 124 S.Ct. at 2537. (empha-

sis in original).

15

Lest there be any doubt as to the holding in Blakely,

and its implication to the facts of the instant case and the

support it gives to Petitioner's Fifth Amendment asser-

tions, one need only look to Justice O’Connor’s dissent in

Blakely, where she stated:

“Under the majority's approach, any fact that

increases the upper bound on a judge’s sentenc-

ing discretion is an element of the offense.

Thus, facts that historically have been taken into

account by sentencing judges to assess a sen-

tence within a broad range — such as drug quan-

tity, role in the offense, risk of bodily harm — all

must now be charged in an indictment and

submitted to a jury... .” 124 S.Ct. 2546 (dissent-

ing opinion, O’Connor, J.). (emphasis added).

This is a clear acknowledgement that the over 100

year precedent and rationale expressed in Cruikshank

and followed in numerous other cases with respect to

indictments being required to contain allegations of every

fact which is legally essential to the punishment to be

inflicted, remains viable, and supports the Petitioner’s

Fifth Amendment challenge to his conviction.

B. The First Circuit’s Failure to Address Peti-

tioner’s Fifth Amendment Challenge to His Con-

viction Creates a Further Conflict in the Circuit

Courts Of Appeals Relative to this Issue.

To the extent that an indictment fails to allege all of

the elements of the offense charged, the Court lacks

jurisdiction to convict the defendant. See United States v.

Spinner, 180 F. 3d 514, 516 (3rd Cir. 1999). The failure of

the indictment to charge an offense may be treated as a

16

jurisdictional defect. United States v. Foley, 73 F. 3d 484,

488 (2d Cir. 1996).

Thus, any fact necessary to subject a defendant to

punishment is properly considered an element of the

offense. See Apprendi v. New Jersey, 530 U.S. at 500-

501 (concurring opinion, Thomas, J.). Justice Thomas in

his Apprendi concurrence pointedly explained:

“The aggravating fact is an element of the aggra-

vated crime ... If the legislature rather than

creating grades of crimes has provided for setting

the punishment of a crime based on some fact —

such as a fine that is proportional to the value of

stolen goods — that fact is an element.” Id.

This Court has subsequently reaffirmed the necessity

of subjecting facts necessary to the imposition of punish-

ment to the Fifth and Sixth Amendment protections. See

Ring v. Arizona, 536 U.S. at 602, 609; Blakely, 124 S.Ct.

at 2537; Booker, 125 S.Ct. at 749.

The Petitioner’s argument is premised on the concept

that a defendant’s challenge to an indictment for failure to

charge an offense may be broughi at any time. United

States v. Panarella, 277 F. 3d 678, 686 (3rd Cir. 2002).

This contention is based on the view that the mail and

wire fraud statutes in relation to the punishment author-

ized under the sentencing guidelines requires that money

amounts be alleged in the indictment. A number of Circuit

Courts of Appeal have held that an objection that the

relevant criminal statute did not reach the specific facts

alleged in the charging document shall be allowed to be

raised on appeal. United States v. Spinner, 180 F. 3d

514, 516 (3rd Cir. 1999); United States v. Cabrera-

Teran, 168 F. 3d 141, 143 (5th Cir. 1999); United States

17

v. Caprell, 938 F. 2d 975, 977-78 (9th Cir. 1991), United

States v. Tomey, 144 F. 3d 749, 751 (11th Cir. 1998). At

least one Circuit has held to the contrary. See United

States v. Borden, 10 F. 3d 1058 (4th Cir. 1993).

In Spinner, the Third Circuit stated: “happily, the

rule that the indictment, to be sufficient, must contain all

the elements of a crime ... is still a vital part of our

federal criminal jurisprudence.” 180 F. 3d at 516. Further,

in Spinner, the Third Circuit indicated that “The inclu-

sion of all elements . . . derives from the Fifth Amendment,

which requires that the grand jury have considered and

found all of the elements to be present.” Id. This Court in

Apprendi indicated that a Fifth Amendment challenge

involves a constitutional protection “of surpassing impor-

tance: the proscription of any deprivation of liberty with-

out ‘due process of law.’” Apprendi, 530 U.S. at 477.

The Due Process Clause is implicated whenever there

are facts established by a standard less than “beyond a

reasonable doubt” if the lawful punishment is increased

above a lawful sentence that could have been imposed

absent those facts. Apprendi, 530 U.S. at 494. Petitioner

acknowledges that a number of Courts of Appeal have

interpreted this Court’s holding in Booker that “but for

the mandatory nature of the Guidelines, fact-findings by

the district court will not offend the Sixth Amendment.”

See United States v. Ryder, 414 F. 3d 908, 917 (8th Cir.

2005).

Whether such facts would pass constitutional muster

under the Fifth Amendment remains an open question.

While this Court in Booker, limited its holding to the

Sixth Amendment right to a jury trial and did not address

the requirement of proof beyond a reasonable doubt which

18

has its roots in the Fifth Amendment’s Due Process

Clause, and to the extent that making the Guidelines

advisory obviated the constitutional concerns raised in

that case, there is a clear distinction to be drawn between

the Fifth and Sixth Amendment guarantees. See United

States v. Pimental, 367 F.Supp. 2d 143, 152 (D. Mass.

2005) (stating that “even if the Sixth Amendment’s jury

trial guarantee is not directly implicated because the

regime is no longer a mandatory one, the Fifth Amend-

ment’s Due Process requirement is”). See also Booker, 125

S.Ct. at 798 fn. 6 (Thomas, J., dissenting in part) (“[t)he

Fifth Amendment requires proof beyond a reasonable

doubt, not by a preponderance of the evidence, of any fact

that increases the sentence beyond what could have been

lawfully imposed on the basis of facts found by a jury or

admitted by defendant.”).

Thus, it remains true that after Blakely and Booker

“a judge’s role in sentencing is constrained at its outer

limits by the facts alleged in the indictment and found

by the jury,” or by a judge with defendant’s consent to

judicial fact finding. See Apprendi, 430 U.S. at 483 fn. 10.

The refusal by the First Circuit to address the Fifth

Amendment challenge to Petitioner’s conviction creates a

conflict between the Circuits with respect to the issue of a

defendant’s entitlement to make such a challenge as

recited by the above authority. This Court should take this

case to resolve the Circuit conflict as to this important

issue.

19

C. The First Circuit’s Decision to Apply Plain Error

Review and Affirm Petitioner’s Sentence Vio-

lates the Teachings Announ<ed in Blakely and

Booker.

The June 29, 2005 Judgment (App. 13) from the First

Circuit is clearly erroneous in light of this Court’s holdings

enunciated in Blakely and Booker as described above.

First, reliance upon United States v. Vazquez-

Rivera, 407 F.3d 476 (ist Cir. 2005) was misplaced.

Initially, the principle adopted by the First Circuit that the

Booker error “is not that a judge (by a preponderance of

the evidence) determined facts under the Guidelines which

increased a sentence beyond that authorized by the jury

verdict or an admission by the defendant; the error is only

that the judge did so in a mandatory Guidelines system,”

is not a correct interpretation of both the remedial and

merits opinions in Booker.

In addition, the First Circuit's analysis of the applica-

tion of the “harmless-error doctrine” is not consistent with

this Court’s distinguishing such error in Booker where a

constitutional violation occurred. According to the First

Circuit the “harmless-error” doctrine would still apply

since not all errors of constitutional dimension require

automatic reversal, citing Chapman v. California, 386

U.S. 18, 22 (1967).

Essentially, the First Circuit rejected the challenge by

Petitioner to his unconstitutional sentence which was

enhanced on the basis of aggravating factors not charged

in the indictment, presented to the jury and found beyond

a reasonable doubt.

Secondly, in relying upon Vazquez-Rivera, the First

Circuit accepted the concept that there were only two

20

options available where Booker error was preserved and

not proved harmless. Those options were to vacate the

sentence and remand for resentencing or remand to the

sentencing judge for a determination of whether a differ-

ent sentence could be imposed under an advisory regime.

See Vazquez-Rivera, 407 F. 3d at p. 490. This analysis is

faulty in that it overlooks the other options which Peti-

tioner presented in his first Petition for Writ of Certiorari

to this Court.

Petitioner respectfully suggests that in those cases

where a defendant’s Fifth Amendment grand jury and due

process rights and Sixth Amendment notice rights have

been abridged resentencing is impossible. Humpty

Dumpty cannot be put back together again. The sentenc-

ing judge has already rendered a penalty decision based on

less than a reasonable doubt standard and based on facts

which were not submitted to the jury. One appropriate

solution would be to retry any defendant whose sentence

was impermissibly enhanced.

Although, the group of cases envisioned by this

method, while meaningful, is not so large that it would

create the chaos envisioned by the dissenters in Apprendi

and Blakely. Until this Court acts to correct these consti-

tutionally infirm sentences, the liberty interests described

above will be undermined and the principle that “a defen-

dant is entitled to have a jury decide by proof beyond a

reasonable doubt, every fact relevant to the determination

of a sentence” will remain unfulfilled. Apprendi, 530 U.S.

at 550 (O’Connor, J., dissenting).

In order to deal with the Gordian Knot caused by

impermissible enhancements in violation of the Constitu-

tion, the Petitioner urges this Court to be guided by its

21

holding in Blakely that “Apprendi carries out this design

by ensuring that the judge’s authority to sentence derives

wholly from the jury’s verdict. Without that restriction,

the jury would not exercise the control that the Framer’s

intended.” Blakely, 124 S.Ct. at 2539 (emphasis added).

Like an artichoke, the impermissible enhanced sen-

tences must be stripped away leaf by leaf until such time

as “the maximum he [the judge] may impose without any

additional findings is reached. Blakely, 124 S.Ct. at 2537

(emphasis in original). In the present case, the maximum

sentence the judge could have imposed without such

“additional findings” was 0-6 months."

In the post-Booker environment the Circuit Courts of

Appeal! have failed miserably in adjusting those sentences

which occurred “post-Apprendi but pre-Blakely which

were unconstitutionally enhanced. The effort at utilizing

“plain error” or “harmless error” review has led to incon-

sistent results and undermined the liberty interests

preserved by the Constitution.

In the instant case, “plain error” review was not

applicable in that Petitioner had preserved his Fifth and

* The significance of this arguinent should not be lost by this Court

when examining the language of the First Circuit’s Judgment of June

29, 2005 which was premised upon the District Judge’s reliance on facts

outside the record. There was no opportunity for the Petitioner to rebut

or object to those facts. This clearly implicates the reason why a

sentence should not be imposed based on facts not brought before the

jury and found beyond a reasonable doubt. The District Judge’s position

that she considered the sentence she imposed as reasonable suggests a

predisposition which precludes any consideration of facts or arguments

which would rebut such a presumption: ermore, this position is

contrary to and inconsistent with her written pronouncements in

United States v. Pimental, 367 F Supp. 2d 143, 152 (D. Mass. 2005).

22

Sixth Amendment objections at trial and later on appeal.

Petitioner’s contention that at post-Booker sentencing

hearings, district judge’s are required to determine the

applicable guideline range and apply the appropriate

factors under 18 U.S.C. § 3553(a) is clearly undermined by

the First Circuit’s Judgment of June 29, 2005. This Court

should remand this case again to the First Circuit for their

proper determination of the application of Booker which

they failed to do after the remand order of January 24,

2005.

D. The Opinions Announced by this Court in

Booker Were Not Followed by the First Circuit

in the Instant Case Thereby Undermining the

Sentencing Process.

As Petitioner has argued above, constitutional error

plagues the entirety of the case as it relates to his convic-

tion and more succinctly undermines the sentence which

was imposed by the district court.

In United States v. Booker, 543 U.'S.__, 125 S.Ct.

738 (2005) this Court invalidated the United States

Sentencing Guidelines to the extent that they were ap-

plied as mandatory. 125 S.Ct. at 764. Thus, the Guidelines

were now to be construed as advisory and sentences would

be subject to appellate review for “reasonableness.” Jd. at

757, 765-66 (Breyer, J., opinion of the Court).

In imposing a sentence post-Booker, district court

judges must follow certain prescribed sentencing proce-

dures. United States v. Crosby, 397 F. 3d 103, 113 (2d

Cir. 2005); United States v. Mashek, 406 F. 3d 101, 106

fn. 4 (8th Cir. 2005). District judges must continue to

determine the appropriate Guidelines sentencing range,

23

and “must consult those Guidelines and take them into

account when sentencing.” Booker, 125 S.Ct. 757, 767. In

addition, to consulting the guidelines, district courts must

also look to the factors set forth in 18 U.S.C. § 3553(a) for

guidance in imposing a “reasonable” sentence. Id. 764-65,

766.

To satisfy the Sixth Amendment concerns addressed

in Booker, the Circuit Courts of Appeal have now held

that the district judges are now charged under the Sen-

tencing Reform Act with the duty to “impose a sentence

sufficient but not greater than necessary,” to comply with

the sentencing purposes under the Act and to “consider the

nature and circumstances of the offense and the history

and characteristics of the defendant” in determining a

reasonable sentence. See 18 U.S.C. § 3553(a)(1). See also

United States v. Haack, 403 F. 3d 997, 1002 (8th Cir.

2005).

Those same Appellate Courts have suggested that

nothing in Booker indicates that district courts are

required to determine the appropriate Guidelines sentenc-

ing range in any manner other than the way the sentence

would have been determined pre-Booker. Crosby, 397

F. 3d at 112.°

Applying those principles to the Petitioner’s sentence

in the instant case, he was convicted of mail and wire

fraud which was punishable by a fine and up to five years

of imprisonment. 18 U.S.C. § 1341 and 18 U.S.C. § 1343.

Prior to Booker, he could not have been sentenced to that

maximum of five years because 18 U.S.C. §§ 3553(a) and (b)

* As discussed in Section B, this does not take into account the

Fifth Amendment issues raised by the Petitioner.

24

required that his sentence be determined pursuant to the

U.S.S.G. As described above, based solely on his conviction

for violating 18 U.S.C. § 1341 and § 1343, and without

any additional findings, Petitioner’s total offense level

under the Guidelines would have been a level 6, corre-

sponding to a sentencing range of 0-6 months or possibly

even Probation. This would have been as a result of the

Government not charging in the indictment and the jury

not finding beyond a reasonable doubt those enhance-

ments which ultimately increased Petitioner's sentence.

It is Petitioner’s averment that after Booker, and

even with the Guidelines being advisory, with the re-

quirement of the district judges determining an applicable

guideline range would have led to the same resuit, i.e., 0-6

months. If the district judge wished to make additional

findings he/she would have faced the Fifth Amendment

arguments expressed above. Some courts have persua-

sively argued that in calculating a sentencing range under

the Guidelines, courts should only rely on facts charged in

the indictment and proven to a jury beyond a reasonable

doubt. See United States v. Huerta-Rodriguez, 355

F.Supp. 2d 1019, 1027 (D. Neb. 2005). That approach

would result in the offense level calculation and imposition

of the sentence noted above.

As clearly stated in Apprendi, a Fifth Amendment

challenge involves a constitutional protection “of surpass-

ing importance: the proscription of any deprivation of

liberty without ‘due process of law.’” 530 U.S. at 477. The

contention by the Government and the acceptance by

many of the Circuit Courts of Appeal that by making the

Guidelines merely advisory, that the statutory maximum

set forth in the United States Code, is again the maximum

sentence faced by a defendant, would contravene the

25

holdings in Blakely. 124 S.Ct. at 2537. See also Ring v.

Arizona, 536 U.S. at 602.

The problem relates to how the Circuit Courts of

Appeal are applying the merits and remedial opinions in

Booker. Petitioner’s view comports with what one jurist

has suggested:

“In Booker, the Supreme Court stated that en-

hancements resulting from judge found (rather

than jury found or admitted) facts violate the

Sixth Amendment. 125 S.Ct. at 755-56. Impor-

tantly, Booker’s companion petitioner, Fanfan,

had received a sentence that did not violate the

Sixth Amendment but was nonetheless deemed

unconstitutional because it was imposed under a

mandatory guideline regime. Id. at 768. Any sen-

tence handed down under a mandatory guideline

regime is unconstitutional.” United States v.

Paladino, 401 F. 3d 471, 490 (7th Cir. 2005)

(Kanne, J., dissenting opinion).

The First Circuit has entirely misinterpreted the

application of Blakely and Booker to the facts of this

case. Blakely broadened the teachings enunciated in

Apprendi by mandating that all of the facts “which the

law makes essential to the punishment” be subject to

Sixth Amendment protections. 124 S.Ct. at 2537. In

Booker, this Court made clear the nature of the Sixth

Amendment right that was violated: “the defendant’s right

to have the jury find the existence of ‘any particular fact’

that the law makes essential to punishment... That right

is implicated whenever a judge seeks to impose a sentence

that is not solely based on ‘facts reflected in the jury

verdict or admitted by the defendant.’” Booker, 125 S.Ct.

at 749.

26

The separate determination by this Court to make the

Guidelines advisory was a forward-looking remedy that

does not change the fundamental Fifth and Sixth Amend-

ment errors that are at issue in the instant case.

The First Circuit was therefore incorrect in analyzing

the case from the perspective of “plain-error” review when

here as unlike what occurred in Antonakopoulous, the

constitutional error was preserved. The Court of Appeals

also erred in focusing primarily on the question of whether

Petitioner’s sentence would have been different under a

discretionary sentencing regime. As several Circuits have

indicated, it is sufficient for a defendant to establish that

his pre-Booker sentence under the Guidelines would have

been lower in the absence of unconstitutional judicial

factfinding.

See United States v. Hughes, 396 F. 3d 374 (4th Cir.

2005); United States v. Ameline, 2005 WL 350811 (9th

Cir. 2005); United States v. Milan, 2005 WL 309934 (6th

Cir. 2005); United States v. Davis, 2005 WL 334370 (3rd

Cir. 2005). Again, the First Circuit’s requirement that a

defendant must establish what might have happened if

the sentencing judge had been given post-Booker-style

discretion is erroneous. See United States v. Hughes,

396 F. 3d 374, 380 fn. 6 (4th Cir. 2005).

The First Circuit’s premise that “plain-error” review

applies is not only erroneous, it overlooks the Fifth and

Sixth Amendment constitutional errors which are not

subject to this type of review. Petitioner and other defen-

dants similarly situated should not be denied the imposi-

tion of a constitutional sentence by the application of a

review standard not contemplated or expressed in the

holdings in Blakely and Booker.

27

The sentence imposed against the Petitioner in the

instant case violates the Constitution and should be

reversed.

+

CONCLUSION

For the above recited reasons the Petition for Writ of

Certiorari should be granted.

Respectfully submitted,

DAVID G. STERN

Petitioner Pro Se

24 Elm Street

Newport, RI 02840

App. i

APPENDIX

Page

Judgment First Circuit Court of Appeals February

By ee Bavnseverceresinientenietenneneviatantianiaitiansiniahdameniiiie App. 1-4

Order Denying Petition for Rehearing and En Banc

Determination April 22, 2004 .00........ceeccccceseseeeees App. 5-6

Letter from William Suter - Supreme Court Clerk

Authorizing Extension of Time to File Petition

for Writ of Certiorari July 7, 2004 .00........cceceeeeeeeee App. 7

Order Denying Motion for Recall Mandate From First

Circuit Court of Appeals August 16, 2004.............. App. 8-9

Judgment of U.S. Supreme Court January 24,

STUD scvenscsncescitentsictiitinpaincatenamiiinaiiiaanmadniianiaideall App. 10-11

Order of First Circuit Court of Appeals May 11,

[IIIG? ccncnsnicapiccmiiuninniinndaiaienamananaaaeunida App. 12-13

Judgment Affirming Petitioner’s Conviction From

First Circuit Court of Appeals June 29, 2005.... App. 14-15

Letter from William Suter — Supreme Court Clerk

Authorizing Extension of Time to File Petition

for Writ of Certiorari August 24, 2006 ................. App. 16

Indictment — United States v. Stern Docket No.

1:0lcr 10266 United States District Court Dis-

trict of Massachusetts July 18, 20011 .............. App. 17-24

Trial Transcript, April 4, 2003 Pages 250-252.... App. 25-28

App. 1

MANDATE

United States Court of Appeals

For the First Circuit

No. 02-2289

UNITED STATES,

Appellee,

Vv.

DAVID G. STERN,

Defendant, Appellant.

Before

Boudin, Chief Judge,

Lipez and Howard, Circuit Judges.

JUDGMENT

Entered: February 19, 2004

Appellant David Stern moves for bail pending appeal.

Because briefing is complete, we reach the merits of the

appeal, affirm the judgment of the district court, and deny

the motion for bail as moot. See Ist Cir. R. 27(c).

Stern acknowledges that this Court has already

rejected his argument invoking Apprendi v. New Jersey,

530 U.S. 466 (2000). “Apprendi simply does not apply to

guideline findings that increase the defendant’s sentence,

but do not elevate the sentence to a point beyond the lowest

App. 2

applicable statutory maximum.” United States v. Caba, 241

F.3d 98, 101 (1st Cir. 2001). “Nothing in Apprendi or other]

cases” — including Ring v. Arizona, 536 U.S. 584 (2002),

the grant of certiorari in Blakely v. Washington, 124 S.Ct.

429 (Oct. 20, 2003), and United States v. R.L.C., 503 U.S.

291 (1992), the trio of cases cited by Stern — “calls into

question the validity of the Sentencing Guidelines.” United

States v. Goodine, 326 F.3d 26, 33 (1st Cir. 2003), pet. for

cert. filed (Oct. 16, 2003). For the present we have no

reason to think that Apprendi will be applied to the

federal guidelines.

We are unpersuaded by any of Stern’s challenges te

his sentence. Stern cultivated a position of trust that grew

out of, but extended beyond, his formal representation of

Dvorah Nagiel. Without that position (and the insider

knowledge he gleaned from it), he could not have so easily

convinced her to entrust him with half of her divorce

settlement. Stern concealed the offense with tax counsel

and promissory notes that he claimed would be honored by

“any court in America.” The district court supportably

found that the “relationship of trust” between Stern and

Nagiel “facilitated his commission of the offense.”

The court also correctly calculated the amount of loss

from Stern’s scheme. “Loss is a proxy for the seriousness of

the offense”; a loss of zero in this case would be “presump-

tively wrong” because “it does not even remotely approxi-

mate [Stern’s] wrongdoing.” United States v. Parsons, 141

F.3d 386, 392 (Ist Cir. 1998). The court observed, and

Stern does not seriously dispute, that he took his former

client’s money even as he was being disbarred for misap-

propriating funds from other clients. The loss determina-

tion would be justified even if Stern had intended to repay

Nagiel.

App. 3

Finally, we find the indictment and the evidence

sufficient on all counts. The fourteen mailings of “interest”

payments (Counts 1-14) were not “incidental to the

scheme,” as Stern argues. They were the secure hook that

kept Nagiel invested. The evidence showed that Stern

procured the gold certificate confirmation letter by calling

Alan Sugar (Counts 16-17). The letter encouraged Nagiel

to contact Sugar or Stern if she had questions. Thus, it

was foreseeable to Stern that she might use the wires to

remind Sugar of his representations (Count 18).

The one close question is whether Stern caused the

fax charged in Count 18 to be sent “for the purpose of

executing” his scheme, as the wire fraud statute requires.

We find it significant that Nagiel contacted Sugar as the

letter had counseled her to do; that the fax itself, as Stern

notes, bespeaks no awareness of the fraud; and that she

informed Stern of her efforts, giving him a final opportu-

nity to put her fears to rest by having her slip the gold

certificate “under [her] pillow.” For the purposes of the

scheme, it was better that she follow the instructions of

the letter rather than go directly to the authorities

“[A]lthough potentially dangerous to the continuation of

defendant’s ... scheme,” the fax “was still in furtherance

of the scheme” in that it “engender[ed) .. . circumstances

in which [Stern] could do [something] to forestall discov-

ery.” United States v. Pietri Giraldi, 864 F.2d 222, 226 (1st

Cir. 1988). For these reasons, the fax is distinguishable,

from other communications by victims, the overt purpose

of which is to oppose the fraud. See United States v.

Castile, 795 F.2d 1273, 1279 (6th Cir. 1986) (“To the extent

that the insurance investigation tended to produce evi-

dence of Castile’s involvement [in arson], it conflicted with

Castile’s purpose and would not have furthered his

Ap +. 4

scheme.”); United States v. .aFerriere, 546 F.2d 182, 186-

87 (Sth Cir. 1977) (where the “victim strongly suspected

that he was victim of a fraud,” the “only likely effect” of

demand letter by his lawyer threatening suit “would be to

further detection of the fraud or to deter its continuation”).

We think it useful to observe that Count 18 is unques-

tionably a stretch and is barely sustainable. In this in-

stance there is no reason to think that it makes any

difference to the sentence and the appeal as to it would

probably be moot but for the small monetary penalty

imposed for each count of conviction. Also, there is at least

some basis to argue about whether the defendant fully

preserved all aspects of the objection to it now pressed on

appeal. If the central case against Stern hung significantly

upon this count, we would be far more hesitant tv affirm

summarily.

By the Court:

RICHARD CUSHING DONOVAN

Richard Cushing Donovan, Clerk.

(Cert. Copies to Hon. Nancy Gertner and Tony Anastas,

Clerk, United States District Court for the District of

Massachusetts]

[cc: Messrs. Stern, Pineault and Ms’s Chaitowitz and

Young}

App. 5

United States Court of Appeals

For the First Circuit

No. 02-2289

UNITED STATES,

Appellee,

v.

DAVID G. STERN,

Defendant, Appellant.

Before

Boudin, Chief Judge,

Toruella, Selya, Lynch, Lipez and

Howard, Circuit Judges.

ORDER OF COURT

Entered: April 22, 2004

The petition for panel rehearing having been denied

by the panel of judges who decided the case and the

petition for rehearing en banc having been submitted to

the active judges of this court and a majority of the judges

not having voted that the case be heard en banc, it is

App. 6

ordered that the petition for rehearing and petition for

rehearing en banc be denied.

By the Court:

Richard Cushing Donovan, Clerk

By: MARK R. SYSKA

Chief Deputy Clerk.

icc: Messrs. Stern, Pineault, Ms’s Chaitowitz and Young]

App. 7

Supreme Court of the United States

Office of the Clerk

Washington, DC 20543-0001

William K. Suter

Clerk of the Court

(202) 479-3011

July 7, 2004

Mr. David Stern

Prisoner ID 23799-038 Unit I

P.O. Box 879

Ayer, MA 01432

Re: David G. Stern

v. United States

Application No. 04A17

Dear Mr. Stern:

The application for an extension of time within which

to file a petition for a writ of certiorari in the above-

entitled case has been presented to Justice Souter, who on

July 7, 2004 extended the time to and including Septem-

ber 19, 2004.

This letter has been sent to those designated on the

attached notification list.

Sincerely,

William K. Suter, Clerk

by /s/ |Illegible]

Sandy Spagnolo

Case Analyst

App. 8

United States Court of Appeals

For the First Circuit

No. 02-2289

UNITED STATES,

Appellee,

Vv.

DAVID G. STERN,

Defendant, Appellant.

Before

Boudin, Chief Judge,

Lipez and Howard, Circuit Judges.

ORDER OF COURT

Entered: August 16, 2004

The motions to recall mandate and to reconsider

application for bail are denied. We are not persuaded that

our decision was “demonstrably wrong,” Legate v. Ma-

loney, 348 F.2d 164, 166 (1st Cir. 1965), in light of Blakely

v. Washington, 124 S.Ct. 2531 (2004); and in any event the

appellant may petition the Supreme Court for a writ of

certiorari. Even assuming that the Supreme Court invali-

dates the Federal Guidelines in a pending case, the appel-

lant has not shown that he is “likely to [obtain] ... a

App. 9

reduced sentence ... less than the totai of the time al-

ready served plus the expected duration of the appeal

process.” 18 U.S.C. § 3143(b\ 1) B\iv).

By the Court:

Richard Cushing Donovan, Clerk

Cae ete

Chief Deputy Clerk

lec: Messrs: Stern, Pineault, Ms. Chaitowitz and Ms.

Young)

App. 10

Supreme Court of the United States

Office of the Clerk

Washington, DC 20543-0001

William K. Suter

Clerk of the Court

(202) 479-3011

January 24, 2005

Mr. David Stern

Prisoner ID 23799-038

24 Elm Street

Newport, RI 02840

Re: David G. Stern

v. United States

No. 04-385

Dear Mr. Stern:

The Court today entered the following order in the

above-entitled case:

The petition for a writ of certiorari is granted. The

judgment is vacated and the-case is remanded to the

United States Court of Appeals for the First Circuit, for

further consideration in light of United States v. Booker,

543 U.S. __ (2005).

The judgment or mandate of this Court will not issue

for at least twenty-five days pursuant to Rule 45. Should a

petition for rehearing be filed timely, the judgment or

App. 11

mandate will be further stayed pending this Court’s action

on the petition for rehearing.

Sincerely,

/s/ William K. Suter

William K. Suter, Clerk

App. 12

United States Court of Appeals

For the First Circuit

No. 02-2289

UNITED STATES,

Appellee,

v.

DAVID G. STERN,

Defendant, Appellant.

ORDER OF COURT

Entered: May 11, 2005

In view of the Supreme Court's January 24, 2005

judgment vacating and remanding for further considera-

tion in light of United States v. Booker, 125 S. Ct. 738

(2005), we invite supplemental briefing as follows.

If defendant is seeking a remand to the district court

for resentencing in light of Booker and United States v.

Antonakopoulos, 399 F.3d 68 (1st Cir. 2005), defendant is

directed to file and serve a supplemental brief, not to

exceed 10 pages, within 10 calendar days of this order, in

compliance with applicable rules concerning briefing, and

addressing the following issues:

1. The brief should indicate, with references to the

record, whether and, if so, how the alleged Booker error

was preserved below. See Antonakopoulos, 399 F.3d at 76.

2. If the error was not preserved below or there is a

dispute about whether the error was preserved, defendant

App. 13

should specify, in accordance with the standards set forth

in Antonakopoulos, the circumstances warranting a

remand including in particular those creating a reasonable

probability that the district court would impose a more

favorable sentence under non-mandatory Guidelines and

other applicable factors.

3. The government shall file a response, in compli-

ance with the applicable rules, not to exceed 10 pages,

within 10 calendar days of service of the defendant’s

supplemental brief. If the government concedes that the

alleged error was preserved below but does not concede

that the sentence should be vacated and remanded, the

government should demonstrate why the alleged error was

harmless.

4. In both filings, citations to the record should be

included where possible. The defendant’s brief is free to

proffer pertinent facts not in the record and the govern-

ment is free to counter proffer. This invitation is without

prejudice to a decision by the panel as to what significance

should be attached to such proffers.

By the Court:

Richard Cushing Donovan, Clerk.

By: MARGARET CARTER [Stamp]

Chief Deputy Clerk.

{cc: Michael J. Pineault, AUSA, Dina Michael Chaitowitz,

AUSA, Cynthia A. Young, AUSA, David G. Stern]

App. 14

United States Court of Appeals

For the First Circuit

MANDATE

No. 02-2289

UNITED STATES,

Appellee,

v.

DAVID G. STERN,

Defendant, Appellant.

Before

Boudin, Chief Judge,

Lipez and Howard, Circuit Judges.

JUDGMENT

Entered: June 29, 2005

The defendant’s conviction and sentence are affirmed.

See 1st Cir. R. 27(c). His arguments in the supplemental

brief misapprehend both the remedial opinion in Booker

and circuit precedent, and we reject them out of hand. In

light of the district court’s statements at sentencing and in

its Order of March 23, 2005, denying his motion for re-

lease, we are “convinced that a lower sentence would not

have been imposed had the Guidelines been advisory.”

United States v. Vazquez-Rivera, 407 F.3d 476, 489 (1st

Cir. 2005). The Sixth Amendment error was therefore

harmless beyond a reasonable doubt. Id.

App. 15

Affirmed.

Certified and issued as

Mandate under Fed. R.

App. P. 41.

Richard Cushing Donovan,

Clerk

/s/ Linda Barry

Deputy Clerk

By the Court:

Richard Cushing Donovan, Clerk

By: MARGARET CARTER [Stamp]

Chief Deputy Clerk

Date: Jul. 20, 2005

[cc: Messrs: Stern, Pineault, Ms. Chaitowitz and Ms. Young]

App. 16

Supreme Court of the United States

Office of the Clerk

Washington, DC 20543-0001

William K. Suter

Clerk of the Court

(202) 479-3011

August 24, 2005

Mr. David Stern

Prisoner ID 23799-038

24 Elm Street

Newport, RI 02840

Re: David G. Stern

v. United States

Application No. 05A-182

Dear Mr. Stern:

The application for an extension of time within which

to file a petition for a writ of certiorari in the above-

entitled case has been presented to Justice Souter, who on

August 24, 2005 extended the time to and including

November 26, 2005.

This letter has been sent to those designated on the

attached notification list.

Sincerely,

William K. Suter, Clerk

by /s/ [Ilegible] .

Sandy Spagnolo

Case Analyst

App. 17

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

UNITED STATES )CRIMINAL NO.

OF AMERICA ) 1:01 [illegible] 10266 ng

v. VIOLATIONS:

18 U.S.C. § 1341 (Mail Fraud)

DAVID G. STERN, 18 U.S.C. § 1343 (Wire Fraud)

Defendant. ) 18 U.S.C. § 2 (Aiding and Abetting)

INDICTMENT

The Grand Jury charges that:

GENERAL ALLEGATIONS

1. At all times material to this Indictment, Defen-

dant DAVID G. STERN (hereafter, “STERN”) was an

individual who resided at 29 Woodbine Road, Belmont,

Massachusetts.

2. At times material to this Indictment, STERN was

an attorney licensed to practice law in the Commonwealth

of Massachusetts.

3. At times material to this Indictment, STERN

provided legal representation to a client named Dvorah

Nagiel (hereafter, “Nagiel”) in a divorce action then

pending in the Commonwealth of Massachusetts.

4. At times material to this Indictment, Nagiel

received financial payments from her former husband in

connection with the settlement of her divorce action.

5. Following Nagiel’s divorce settlement, STERN

contacted Nagiel and informed her of an investment

opportunity that was supposedly available through a

pension fund manager that STERN knew at BayBank

App. 18

(hereafter, the “BayBank fund”). STERN stated, among

other things, that he intended to invest money in the

BayBank fund himself and that if Nagiel wished to par-

ticipate in the BayBank fund as well, she should give her

money to him. STERN stated that the investment would

be held in his name and that he would write personal

checks to Nagiel for the dividends generated by the in-

vestment.

6. On or about January 10, 1996, Nagiel gave

STERN two $10,000 checks to be invested in the BayBank

fund. Over the course of the next six months, STERN

periodically contacted Nagiel to inform her of further

opportunities to invest in the BayBank fund. In response

to these solicitations, Nagiel gave STERN four additional

checks to be invested in the BayBank fund. The total

amount of the checks that Nagiel gave to STERN between

January, 1996 and July, 1996 for investment in the

BayBank fund was $200,000.

7. Ina letter to Nagiel dated June 10, 1996, STERN

confirmed “the current status of those funds which you

(Nagiel] asked me to invest.” The letter set forth, inter

alia, the interest payments due on the invested amounts.

8. In a second letter to Nagiel dated July 30, 1996,

STERN again confirmed “the current status of those funds

which you [Nagiel] asked me to invest as of August 1,

1996.” STERN ’s second letter also set forth, inter alia, the

interest payments due on the invested amounts.

9. Beginning on or about June 10, 1996, STERN

began sending Nagiel checks representing the interest

payments supposedly generated by Nagiel’s investment in

the BayBank fund. The amount of each check ranged from

App. 19

$1,250 to $3,750. Stern sent the checks to Nagiel via

United States Postal Service mail.

10. Contrary to his statements to Nagiel, STERN

never invested Nagiel’s funds in the BayBank fund, if such

an investment fund ever existed. Instead, STERN depos-

ited Nagiel’s checks into his personal and law firm bank

accounts and spent the money on a variety of expenses.

11. In or about June, 1997, STERN contacted Nagiel

regarding a second investment opportunity. STERN stated

that the second opportunity involved a gold certificate

being offered by a friend of STERN’S named Alan Sugar.

STERN stated, among other things, that his family in-

tended to invest one million dollars in the certificate and

that as a “favor” to Nagiel, STERN was offering her the

opportunity to join them for $250,000.

12. On or about June 25, 1997, Nagiel gave STERN

a $250,000 check for this gold investment. At or about the

same time, Nagiel received a letter from Alan Sugar at

First Fidelity Surety, Inc., dated June 24, 1997, confirm-

ing that Nagiel had been “assigned an undivided 25%

interest in gold certificate GO1025AU.” Sugar sent the

letter to Nagiel as the result of a telephone cal] made by

STERN to Sugar requesting that the letter be sent.

13. Contrary to STERN’s representations, however,

there was no gold, and Nagiel had no enforceable owner-

ship interest in any certificate. The gold certificate refer-

enced in Sugar’s June 24, 1997 letter (No. GO1025AU)

listed Sugar’s company, First Fidelity Surety, Inc. as the

registered owner; stated on its face that First Fidelity had

no right to transfer ownership in the certificate excerpt

pursuant to the terms set forth in the certificate; and also

stated on its face that the certificate did not grant First

App. 20

Fidelity an enforceable entitlement to receive gold coin or

bullion but instead could be satisfied through the delivery

of 2,500 tons of rock (“gold ore”).

14. STERN never invested Nagiel’s money in gold or

in a gold certificate. Rather, STERN deposited Nagiel’s

$250,000 check into his personal bank account and spent

the money on a variety of expenses.

15. In or about February, 1998, Nagiel telephoned

Sugar to inquire about her $250,000 “gold” investment. In

connection with that inquiry, on or about February 12,

1998, Nagiel faxed to Sugar a copy of Sugar’s June 24,

1997 letter.

16. Neither Sugar nor STERN returned Nagiel’s

$250,000 “gold” investment to her in February or March,

1998. STERN also failed to return to Nagiel in February or

March, 1998 the $200,000 that Nagiel had given him to

invest in the BayBank fund.

17. In or about March, 1998, Nagiel filed a civil

lawsuit against STERN seeking the return, inter alia, of

the $450,000 that she had given to him to invest in the

BayBank fund and in the gold investment. Thereafter, the

United States commenced a criminal investigation of

STERN’s financial transactions with Nagiel.

18. On or about Avgust 6, 1998, agents from the

Federal Bureau of Investigation (“FBI”) interviewed

STERN concerning his dealings with Nagiel.

19. In or about December, 1998, STERN entered into

a settlement agreement with Nagiel pursuant to which he

agreed to repay the money that Nagiel had given to him.

At the time that STERN entered into the settlement

agreement, Nagiel had obtained judicial attachments and

App. 21

liens against STERN’s personal residence and bank

accounts. In addition, STERN was aware of the FBI's

investigation.

O Oo oO

(Mail Fraud - 18 U.S.C. § 1341)

20. The Grand Jury re-alleges and incorporates by

reference paragraphs 1-19 of this Indictment and further

charges that:

21. On or about the dates set forth below, in the

District of Massachusetts and elsewhere, the defendant

DAVID G. STERN, having devised and intending to devise

a scheme and artifice to defraud and for obtaining money

and property by means of false and fraudulent pretenses,

representations, and promises, for the purpose of execut-

ing and attempting to do so, did cause persons to place in

post offices and authorized depositories for mail matter,

matters and things to be sent and delivered by the United

States Postal Service or by private or commercial carrier,

and caused to be deposited matters and things to be sent

or delivered by the United States Postal Serice or by a

private or commercial interstate carrier, and took and

received therefrom, such matters and things, and know-

ingly caused to be delivered by the United States Postal

Service mail or by private or commercial carrier according

to the directions thereon, such matters and things, as

follows:

Count Date Mailing

1 9/16/96 Check to Dvorah Nagiel in the

amount of $3,750.

2 10/7/96 Check to Dvorah Nagiel in the

amount of $1,250.

App. 22

3 11/12/96 Check to Dvorah Nagiel in the

amount of $1,250.

4 12/9/96 Check to Dvorah Nagiel in the

amount of $2,500.

5 2/5/97 Check to Dvorah Nagiel in the

amount of $2,500.

6 3/19/97 Check to Dvorah Nagiel in the

amount of $2,500.

7 5/8/97 Check to Dvorah Nagiel in the

amount of $2,500.

8 6/11/97 Check to Dvorah Nagiel in the

amount of $2,500.

9 7/28/97 Check to Dvorah Nagiel in the

amount of $1,250.

10 8/11/97 Check to Dvorah Nagiel in the

amount of $2,500.

11 9/19/97 Check to Dvorah Nagiel in the

amount of $2,500.

12 11/18/97 Check to Dvorah Nagiel in the

amount of $1,250.

13 1/13/98 Check to Dvorah Nagiel in the

amount of $2,500.

14 2/13/98 Check to Dvorah Nagiel in the

amount of $1,250.

15 3/4/98 Check to Dvorah Nagiel in the

amount of $2,500.

i6 6/24/97 Letter from Alan Sugar to

Dvorah Nagiel

All in violation of Title 18, United States Code, Sec-

tion 1341 and Title 18, United States Code, Section 2.

App. 23

COUNTS SEVENTEEN and EIGHTEEN

(WIRE FRAUD - 18 U.S.C, § 1343)

22. The Grand Jury re-alleges and incorporates by

reference paragraphs 1-19 of this Indictment and further

charges that:

23. On or about the dates set forth below, in the

District of Massachusetts and elsewhere, the defendant

DAVID G. STERN, having devised and intending to devise

a scheme and artifice to defraud, and for obtaining money

and property by means of false and fraudulent pretenses,

representations, and promises, did transmit and cause to

be transmitted by means of wire communication in inter-

state and foreign commerce, writings, signs, signals,

pictures, and sounds for the purpose of executing such

scheme and artifice, as follows:

Count Date Wire Communication

17. 6/24/97 Telephone call from STERN in

Massachusetts to Alan Sugar

in North Carolina regarding

letter to Dvorah Nagiel.

18 2/12/98 Facsimile from Dvorah Nagiel

in Massachusetts to Alan

Sugar in North Carolina

regarding 6/24/97 letter to

Nagiel.

All in violation of Title 18, United States Code, Sec-

tion 1343 and Title 18, United States Code, Section 2.

A TRUE BILL

/s/ (Megible}

FOREPERSON OF THE

GRAND JURY

App. 24

/s/ (Illegible]

Assistant United States

Attorney

DISTRICT OF MASSACHUSETTS July 18, 2001 at 3:35

P.M.

Returned into the District Court by the Grand Jurors and

filed.

/s/ \Iegible]

DEPUTY CLERK

App. 25

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

UNITED STATES

OF AMERICA Criminal No. 01-10266-NG

v. April 4, 2002

Boston, Massachusetts

DAVID STERN

FOURTH DAY OF TRIAL

TRANSCRIPT OF THE EVIDENCE

BEFORE HONORABLE NANCY GERTNER,

UNITED STATES DISTRICT JUDGE,

AND A JURY

APPEARANCES:

For the Government:

For the Defendant:

Court Reporter:

[250] Counsel?

Michael J. Pineault

Assistant United States Attorney

Office of the U.S. Attorney

John J. Moakley U.S. Courthouse

1 Courthouse Way, Suite 9200

Boston, Massachusetts 02210

Stephen B. Hrones, Esq.

Hrones & Harwood

Lewis Wharf — Bay 232

Boston, MA 02110

Harold M. Hagopian, RDR, CRR

John J. Moakley U.S. Courthouse

1 Courthouse Way, Suite 3204

Boston, MA 02210

Telephone: (617) 946-0900

* bad

App. 26

SIDEBAR CONFERENCE:

MR. HRONES: Your Honor, it just struck me

that I should make an Apprendi objection now, because

the loss, if he’s convicted, it’s going to be a question of

ammount of loss.

THE COURT: Right.

MR. HRONES: That’s a jury question under

Apprendi.

THE COURT: Uh-huh.

MR. HRONES: And as to basic offenses like six

months, but it can be kicked up to years in prison based on

loss. So it’s my position that the jury should be — has to

determine loss in this case.

THE COURT: Mr. Pineault?

MR. HRONES: [Id also object to the fact that

they don’t have the loss amount in the indictment. In

other words, because he didn’t indict on that, the most — I

mean, the loss cannot figure into the sentence in any way,

so the maximum he can get is six months.

MR. PINEAULT: I disagree, your Honor. The

loss computation is to be performed pursuant to the

sentencing guidelines by the Court, and I don’t have the

indictment right in front of me, but it does allege with

particularity each of the frauds, the BayBank fraud and

the gold.

THE COURT: And the verdict slip will — if they

— check off a particular count, since it’s a particular [251]

check, to some degree, would wind up with loss in any

event.

App. 27

MR. HRONES: That’s not the loss, though,

that’s the amount he paid in interest.

THE COURT: Right.

MR. HRONES: So the verdict slip doesn’t

determine the amount of loss.

MR. PINEAULT: But the — I mean, the verdict

they return on a particular count will indicate whether

they found a particular fraud scheme has been established

beyond a reasonable doubt and the loss flows from that.

MR. HRONES: But it doesn’t because he just told -

THE COURT: I know you're trying to put it on

the record, but I will give you an opportunity, if you think

the jury slip should have loss on it, I'll give you an oppor-

tunity to put that on the jury slip.

MR. HRONES: Oh, you will?

THE COURT: Yes.

MR. HRONES: Fine. Then — then I want that on

the jury slip.

THE COURT: Okay. Does the government have

an objection to that?

MR. PINEAULT: I don’t — I haven’t researched,

your Honor. I'm not sure whether that would simply be

advisory at that point.

THE COURT: Right.

[252] MR. PINEAULT: I don’t see any harm in

putting it down, and we can research later whether it’s

simply advisory or not.

App. 28

THE COURT: So, what we would do is we would

say — well, I just came up with this.

MR. HRONES: As the last question.

THE COURT: Total amount of loss, did you, in

fact include testimony of the total amount?

MR. PINEAULT: Your Honor, I don’t think we

should go down this road.

THE COURT: lI agree.

MR. PINEAULT: Because that may get into the

issue of how you define a loss.

THE COURT: And how you define payment.

Okay, we'll leave it as it is. Anything else, Mr. Hrones?

MR. HRONES: No, your Honor.

MR. PINEAULT: Nothing from the government,

your Honor.

THE COURT: Okay.

END OF SIDEBAR CONFERENCE:

THE COURT: There was nothing further, ladies

and gentlemen. At this point you can take your notes, and

all rise for the jury.

(The jury retired to deliberate at 11:15 a.m.)

* « *