# Petition for Writ of Certiorari — Stern v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2006
- **Citation:** 546 U.S. 1095

## Text

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.)

* « *

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0519%3A1. Public record. Not legal advice.