## Facts

- Peter J. Rumsavich ran multiple short-lived, unprofitable businesses and sought new funds as his ventures neared collapse.
- He marketed $750,000 in “D’Martine Food Services, Inc. Zero Coupon Corporate Bonds” through mass mailings and “financial seminars” in Chicago-area suburbs.
- He mailed over 150,000 brochures and postcards to neighborhoods with high concentrations of senior citizens on fixed incomes.
- The mailers and seminar presentations falsely portrayed him as a former Dean Witter vice president and as holding financial-planning credentials that did not exist or that he did not possess.
- Seminar attendees completed detailed financial questionnaires, which Rumsavich used to identify and pursue investors for one-on-one meetings.
- The scheme focused largely on elderly, financially unsophisticated individuals (including widows) with fixed incomes and heightened concerns about outliving savings or paying for care.
- He misrepresented the safety and character of the investment and exploited investors’ fears to induce purchases.
- Rather than using proceeds for legitimate bond purposes, he diverted investor funds to business and personal debts and paid substantial salaries to himself and his wife.
- A jury convicted him of five counts of mail fraud (18 U.S.C. § 1341) and two counts of perjury (18 U.S.C. § 1623).
- The district court imposed 75 months’ imprisonment, three years’ supervised release, $571,700 restitution, and a $550 special assessment, including Guidelines enhancements for vulnerable victims and for abuse of trust/special skill.

## Issues

1. Whether the district court properly applied the two-level vulnerable-victim enhancement under U.S.S.G. § 3A1.1(b).
2. Whether the district court properly applied the two-level enhancement under U.S.S.G. § 3B1.3 for abuse of a position of trust or use of a special skill in committing the fraud.

## Decision

- The Seventh Circuit affirmed the conviction and sentence.
- The court upheld the § 3A1.1(b) vulnerable-victim enhancement because the evidence showed deliberate targeting and exploitation of victims particularly susceptible to the scheme.
- The court upheld the § 3B1.3 enhancement because Rumsavich cultivated investor reliance by presenting himself as a qualified financial professional and providing individualized advice based on solicited financial information.

## Legal Principles

- U.S.S.G. § 3A1.1(b) applies when the defendant knew or should have known a victim was unusually vulnerable and exploited that vulnerability; the enhancement does not require that every victim be vulnerable.
- Targeted marketing toward senior citizens on fixed incomes, coupled with screening tools (such as questionnaires) and individualized solicitation, supports a finding of knowing exploitation of vulnerability.
- U.S.S.G. § 3B1.3 applies when the defendant abuses a trust relationship characterized by victim reliance and defendant discretion, or uses a special skill to facilitate the offense.
- A defendant may occupy a de facto position of trust in a fraud scheme by holding himself out as a financial adviser and obtaining personal financial information to give individualized recommendations, even if claimed credentials are false.

## Conclusion

The Seventh Circuit affirmed Rumsavich’s 75-month sentence for mail fraud and perjury, holding that the record supported Guidelines enhancements for targeting vulnerable victims and for abusing a position of trust or using a special skill created through his assumed role as a financial professional.


United States v. Rumsavich, 313 F.3d 407 (7th Cir. 2002)