## Facts

- Charles Smith created a fraudulent “investment” scheme and solicited money from multiple victims.
- Over more than four years, Smith obtained a total of about $315,020 from the victims.
- Smith used victim funds for personal purchases, including a house and a bar.
- After he was sued by two victims and later charged federally, Smith pleaded guilty to wire fraud.
- As part of the plea, Smith agreed to repay the victims’ original investments.
- Smith made repayment by selling the bar, which had doubled in value; he kept the house, which had also appreciated.
- Smith described significant mitigating circumstances, including a difficult childhood, serious medical conditions, and wheelchair use.
- Smith had no significant criminal history.
- During sentencing-related proceedings, Smith did not fully accept blame, sometimes shifting responsibility to the victims and his circumstances, and he made untrue statements under oath about the scheme and his finances.
- Under the Federal Sentencing Guidelines, Smith’s advisory imprisonment range was 21 to 27 months.
- Sentencing data indicated that, at the time, the average prison term for theft-related offenses for defendants aged 51–60 with a GED was 24 months.

## Issues

1. What sentence is “sufficient, but not greater than necessary” under 18 U.S.C. § 3553(a) for a defendant who pleaded guilty to wire fraud but showed limited acceptance of responsibility and repaid victims using proceeds from appreciated assets purchased with fraud funds?

## Decision

- The district court calculated the advisory Sentencing Guidelines range as 21 to 27 months’ imprisonment.
- The court evaluated Smith’s request for mitigation in light of his personal history, medical condition, and minimal criminal record.
- The court treated Smith’s repayment to victims as relevant, but assessed it in context—particularly that repayment came from selling an asset bought with fraud proceeds and that Smith retained another appreciated asset (the house).
- The court considered Smith’s courtroom conduct and credibility, including blame-shifting and untrue sworn statements, as bearing on remorse and the weight of mitigation.
- The court considered sentencing comparisons (including the reported 24-month average for certain similarly situated theft offenders) as part of assessing proportionality and disparity.
- Based on the total record, the court determined an appropriate custodial sentence within the framework of the advisory Guidelines and the statutory sentencing factors.

## Legal Principles

- Federal sentencing requires a court to (1) correctly compute the advisory Sentencing Guidelines range and then (2) select an individualized sentence under 18 U.S.C. § 3553(a).
- Restitution and repayment can affect the § 3553(a) analysis, but a court may consider timing and source of repayment—especially where repayment is enabled by assets acquired with offense proceeds and the defendant retains other benefits from the crime.
- A guilty plea does not, by itself, establish meaningful acceptance of responsibility for sentencing purposes; a court may weigh minimization, blame-shifting, and untruthful statements when evaluating remorse and the need for deterrence and just punishment.
- A defendant’s age, health, upbringing, and lack of criminal history may support mitigation, but those factors must be balanced against the seriousness, duration, and impact of the offense.
- Courts may consult comparative sentencing information to help avoid unwarranted disparities, while still basing the final sentence on the case-specific record.

## Conclusion

United States v. Smith addresses federal sentencing for a multi-year wire-fraud investment scheme in which Smith took about $315,020, used victim funds to buy a house and bar, repaid principal only after being caught by selling the appreciated bar, and retained the appreciated house; the court calculated a 21–27 month advisory range and weighed restitution context, personal mitigation (health and background), limited criminal history, and Smith’s lack of full responsibility and untruthful statements when determining the appropriate sentence under § 3553(a).


United States v. Smith, 680 F. Supp. 3d 1046 (2013)