David Lonich, Sean Cutting, and Brian Melland were each convicted by a jury on several fraud and conspiracy counts related to a bank loan and real estate scheme. Lonich was sentenced to 80 months of incarceration, and Cuttin and Melland were each sentenced to 100 months. On appeal, the defendants argued that their convictions should be overturned for reasons including the violation of their speedy trial rights, problematic jury instructions, and sufficiency.
The Ninth Circuit rejected all these claims and upheld their convictions, but it also vacated each of their sentences and remanded the case for resentencing. During sentencing, the district court applied a 20-level enhancement under U.S.S.G. § 2B1.1(b)(1)(K) for the stated reason that the defendants’ conduct had caused the closure of a bank. Where, as here, a sentencing enhancement has “an extremely disproportionate effect on the sentence,” then the factual findings underlying it must be shown by the Government by clear and convincing evidence. Here, that burden was not met as to the question of whether the defendants caused the bank collapse, so the enhancement should not have been applied.
Appeal from the United States District Court for the Northern District of California
Opinion by Bress, joined by Hurtwiz and Corker (by designation from the Eastern District of Tennessee)
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