## Facts

- Lennox Parris and Lester Parris, brothers and directors of a publicly traded company (Queénch), participated in a pump-and-dump securities scheme.
- The company issued false and misleading press releases about finances and business prospects, increasing stock price and trading volume.
- The defendants authorized issuance of over 28 million new shares to stock-promotion entities; the shares were sold for nearly $5 million.
- Approximately $2.56 million was wired to an entity controlled by Lester Parris.
- The SEC investigated; a criminal prosecution followed.
- A jury convicted both defendants of conspiracy to commit securities fraud, multiple counts of securities fraud, conspiracy to commit witness tampering, and witness tampering.
- The Probation Department calculated an advisory Guidelines range of 360 months to life, driven largely by fraud enhancements tied to monetary loss and related factors.

## Issues

1. Whether the court could impose a sentence far below the advisory Guidelines range in a securities-fraud case where loss-driven enhancements produced an exceptionally high range.
2. How the § 3553(a) factors should be applied to avoid unwarranted disparity and excessive punishment when the Guidelines treat comparatively smaller frauds similarly to large corporate frauds.

## Decision

- The court accepted that the following U.S.S.G. § 2B1.1 enhancements applied: loss amount (using gain because victim loss could not be reasonably determined), number of victims (more than 250), sophisticated means, and officer/director status.
- The court concluded that the resulting advisory range (360 months to life) did not reasonably reflect the statutory sentencing factors.
- Each defendant was sentenced to 60 months’ imprisonment, a substantial downward variance from the advisory range, supported by a written statement of reasons under 18 U.S.C. § 3553(c)(2).

## Legal Principles

- Post-*Booker*, the Sentencing Guidelines are advisory; the court must impose a sentence “sufficient, but not greater than necessary” under 18 U.S.C. § 3553(a).
- A major variance requires a more substantial justification than a minor variance, tied to the record and the § 3553(a) factors.
- In fraud cases, loss-driven and overlapping enhancements may yield ranges disproportionate to culpability and harm; a court may vary when the advisory range fails to reflect § 3553(a) considerations.
- Where actual victim loss cannot be reasonably determined, gain to the defendant may be used as a proxy for loss in calculating the Guidelines.
- Avoiding unwarranted sentencing disparities under § 3553(a)(6) may be supported by comparisons to sentences in materially similar white-collar cases, including consideration of the scale of losses and typical custodial terms.

## Conclusion

The court applied the fraud Guideline enhancements but held that the resulting 360-months-to-life range overstated the offense’s seriousness relative to § 3553(a) and comparable cases, warranting a downward variance to 60 months for each defendant.


United States v. Parris, 573 F. Supp. 2d 744 (E.D.N.Y. 2008)