United States v. Pileggi

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 08-4237

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v.

GIUSEPPE PILEGGI,

Defendant - Appellant.

Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Frank D. Whitney,
District Judge. (3:06-cr-00151-FDW-1)

Argued: October 29, 2009 Decided: January 20, 2010

Before TRAXLER, Chief Judge, and GREGORY and DAVIS, Circuit
Judges.

Vacated and remanded with instructions by unpublished opinion.
Judge Gregory wrote the opinion, in which Judge Davis joined.
Chief Judge Traxler wrote a dissenting opinion.

ARGUED: Frank Alan Abrams, LAW OFFICE OF FRANK ABRAMS, PLLC,
Asheville, North Carolina, for Appellant. Ellen Ruth Meltzer,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellee. ON BRIEF: Ed R. Ryan, Acting United States Attorney,
Charlotte, North Carolina; Patrick M. Donley, Peter B.
Loewenberg, Fraud Section, Criminal Division, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.

2
GREGORY, Circuit Judge:

Following his extradition to the United States, Appellant

Giuseppe Pileggi was convicted of numerous counts of fraud based

on operating a fraudulent sweepstakes scheme out of Costa Rica

targeting U.S. citizens. The district court then sentenced

Pileggi to 600 months in prison. Pileggi now argues that the

district court arrived at this sentence by relying on clearly

erroneous facts, thus making his term of imprisonment

procedurally unreasonable. For the reasons set forth below, we

vacate Pileggi’s sentence and remand for resentencing.

I.

Pileggi, a fifty year-old Canadian citizen who lived in San

Jose, Costa Rica, and more than four dozen co-conspirators ran

an elaborate fraudulent sweepstakes scheme operating out of

Costa Rica that primarily targeted elderly citizens of the

United States. In total, at least 600 to 650 people were

victimized, and the scheme grossed $8,381,962 from April 2003

until May 2006. (J.A. 48, 554, 764.) 1

On May 16, 2006, Costa Rican authorities searched sixteen

sites for evidence relating to the fraud, including Pileggi’s

1
Citations herein to “(J.A. __)” refer to the contents of
the Joint Appendix filed by the parties in this appeal.

3
home and car accessory business. At the request of the United

States, Pileggi was then taken into custody by Costa Rican

authorities on May 16, 2006. Pileggi remained in Costa Rican

jail until the United States reached an agreement with Costa

Rica for his extradition.

The agreement, dated October 27, 2006, between Costa Rica

and the United States was reflected in a diplomatic note. The

“Diplomatic Note of Assurances between the United States and

Costa Rica” provided that “Costa Rica requested assurances that,

upon extradition to the United States . . . Giuseppe Pileggi

. . . will not be subjected to the death penalty or life

imprisonment.” (J.A. 16.) In response, the United States

assured “the Government of Costa Rica that if extradited . . . .

Giuseppe Pileggi . . . will not receive a penalty of death or

one that requires that [he] spend the rest of [his] natural

[life] in prison.” (J.A. 17.) 2

On December 5, 2006, Pileggi was indicted in the U.S.

District Court for the Western District of North Carolina for

one count of conspiracy to commit wire fraud, mail fraud and

travel fraud, in violation of 18 U.S.C. § 371 (2006), and

twenty-two counts of wire fraud, in violation of 18 U.S.C.

2
Both parties agree that diplomatic assurances reflecting
agreement between parties to an extradition treaty are to be
enforced by the courts.

4
§§ 1343 & 2. 3 On January 31, 2008, Pileggi was convicted on all

counts, 4 and sentencing was set for September 24, 2008.

Prior to sentencing, a Presentence Investigation Report

(“PSR”) was generated by the United States Department of

Probation. The PSR stated that “based on a total offense level

of 43 and a criminal history category of I [Pileggi had no prior

convictions], the guideline range for imprisonment is life.”

(J.A. 826.) The PSR section entitled “Circumstances That May

Warrant Departure” mentions that an extradition treaty between

the United States and Costa Rica governs the extradition

relationship between the two countries. (J.A. 828.)

Additionally, the PSR accurately stated the terms of the

Diplomatic Note. At the same time, the PSR suggested “imposing

a sentence where a portion of these counts run concurrently in

order to achieve a sentence of 540 months (or 45 years) which is

essentially a life sentence for this defendant.” (Id.)

At sentencing, the Government made the following

misrepresentation about the assurances it provided to Costa

Rica: “the United States, we gave a sentencing assurance to the

government of Costa Rica that we would not seek a sentence in

3
The indictment also included a criminal forfeiture
allegation.
4
The Government dismissed Count 18.

5
excess of 50 years.” (J.A. 756.) When the court asked if this

bound the court or the executive branch, the Government

responded, “I think technically what it says is that the United

States, the executive branch will not seek a sentence in excess

of fifty years or death.” (Id.)

At the conclusion of the hearing, the district court

determined that it was unable to render a life sentence based on

the statutory maximums for the counts on which Pileggi was

convicted. (J.A. 762-63.) Rather, it found that it must

sentence him to a term of months. After a review of the factors

set out in 18 U.S.C. § 3553 and the Government’s representation

that it assured Costa Rica that it could not seek a sentence

greater than fifty years, the court sentenced fifty year-old

Pileggi to 600 months (fifty years) of incarceration, followed

by three years of supervised release. 5

II.

Pileggi contends that his sentence is procedurally

unreasonable. We review a sentence for reasonableness under an

abuse of discretion standard. Gall v. United States, 552 U.S.

38, 51 (2007). When reviewing reasonableness, we “must first

ensure that the district court committed no significant

5
Additionally, Pileggi was ordered to pay restitution of
$3,952,985 and to forfeit $8,381,962 to the United States.

6
procedural error,” which includes: “failing to calculate (or

improperly calculating) the Guidelines range, treating the

Guidelines as mandatory, failing to consider the § 3553(a)

factors, selecting a sentence based on clearly erroneous facts,

or failing to adequately explain the chosen sentence-including

an explanation for any deviation from the Guidelines range.”

Id.

Pileggi did not, however, raise the issue of his sentence’s

procedural reasonableness below. When a defendant fails to

object to the procedural reasonableness of a given sentence,

appellate courts are split over whether plain-error review

applies. 6 To prevail under plain error review, Pileggi must

demonstrate that: (1) an error occurred; (2) the error was

plain; and (3) the error affected his substantial rights.

6
The First, Second, Sixth, Eighth, Ninth, Tenth, and
District of Columbia circuits agree that plain-error review
applies. See, e.g., United States v. Pakala, 568 F.3d 47, 56
(1st Cir. 2009); United States v. Eads, No. 07-3923, 2009 WL
1324230, at *1 (8th Cir. May 14, 2009); In re Sealed Case, 527
F.3d 188, 191-92 (D.C. Cir. 2008); United States v. Ciappetta,
284 Fed App’x 854, 855 (2d Cir. 2008); United States v. Cook,
550 F.3d 1292, 1297-98 (10th Cir. 2008); United States v.
Vonner, 516 F.3d 382, 385-86 (6th Cir. 2008); United States v.
Waknine, 543 F.3d 546, 549 (9th Cir. 2008). The Third and
Seventh circuits, however, apply the reasonableness review that
typically applies to sentencing. See, e.g., United States v.
Sevilla, 541 F.3d 226, 230-31 (3d Cir. 2008); United States v.
Castro-Juarez, 425 F.3d 430, 433-34 (7th Cir. 2005). This Court
has previously held in unpublished opinions that plain-error
review is appropriate. United States v. Flores-Ansencio, 297
Fed. App’x 226, 227 (4th Cir. 2008); United States v. Garcia,
233 Fed. App’x 311, 312 (4th Cir. 2007).

7
United States v. Olano, 507 U.S. 725, 732 (1993). If these

three elements are met, this Court may exercise its discretion

to notice error only if the error “seriously affect[s] the

fairness, integrity or public reputation of judicial

proceedings.” Id. (internal quotation marks and citations

omitted); United States v. Hughes, 401 F.3d 540, 547-48, 550

(4th Cir. 2005). We need not decide whether plain-error or

reasonableness review applies here because under either

standard, Pileggi’s sentence is procedurally unreasonable.

III.

Pileggi contends that the district court committed a

significant procedural error when it sentenced him to 600 months

of imprisonment. Specifically, Pileggi argues that the district

court relied on clearly erroneous facts to arrive at the

sentence, namely the Government’s misrepresentation concerning

the diplomatic assurances given to Costa Rica to secure

Pileggi’s extradition. We agree.

The United States provided the Costa Rican authorities with

diplomatic assurances, one of which was that a number of

suspects, including Pileggi, would not receive the death penalty

or a sentence that requires he spend the rest of his natural

life in prison. Rather than providing this information to the

court, the Government informed the court that the United States

8
had assured Costa Rican authorities that “the executive branch

will not seek a sentence in excess of fifty years or death.”

(J.A. 756.) Although we accept that the misstatement was

inadvertent, the statement put indisputably false information

before the district court during sentencing. Furthermore, at no

time was the error corrected. The Government instead sought a

fifty-year sentence, arguing that “a sentence of 50 years in a

crime so extraordinarily heinous warrants this kind of

sentence.” (J.A. 760.)

The district court then considered that the Guidelines

provided a sentencing range of life, but that the court was

bound by statutory maximums to sentence Pileggi to a term of

months. The PSR did not mention or recommend that Pileggi

receive a sentence of fifty years. Rather, it noted that “the

Court may wish to consider imposing a sentence where a portion

of [the] counts run concurrently in order to achieve a sentence

of 540 months (or 45 years) which is essentially a life sentence

for this defendant.” (J.A. 799.) The court then sentenced

Pileggi to 600 months (fifty years) of imprisonment. The only

mention of a fifty-year sentence came during the Government’s

misrepresentation of the diplomatic assurances. Therefore, in

sentencing Pileggi to a term of fifty years, the court relied on

clearly erroneous facts, which is a significant procedural

error. Gall, 552 U.S. at 51.

9
 Under plain-error review, there is no doubt that this

significant procedural error is plain. Moreover, this error

affected Pileggi’s substantial rights because it affected his

sentence. See United States v. Basham, 561 F.3d 302, 334 (4th

Cir. 2009) (noting that an error that affects “the outcome of

the penalty phase” is an error affecting a substantial right).

Given the Government’s misrepresentation, we have zero

confidence that had the district court known the true content of

the assurances provided to Costa Rica, it would have sentenced

Pileggi to 600 months in prison. The only reference during

sentencing to the assurances provided to Costa Rica was

erroneous, and the sentence arrived at by the court mirrored the

Government’s misstatement. In addition, no information

independent from the misstatement was before the court that

suggested a sentence of fifty years in prison.

Finally, while we harbor no doubt as to Pileggi’s guilt or

the seriousness of his crimes, there is no question that this

sentencing error “seriously affect[s] the fairness, integrity or

public reputation of judicial proceedings.” Olano, 507 U.S. at

732. The district court relied on false information given to it

by the Government to arrive at a term of imprisonment that

exceeded Pileggi’s life expectancy. This reliance by the

district court on the Government’s misstatement is a fundamental

affront to the fairness and integrity of judicial proceedings.

10
The Government contends that the district court properly

calculated Pileggi’s Guidelines range, treated the Guidelines as

advisory, considered the applicable 18 U.S.C. § 3553(a) factors,

and explained its reasoning. This argument entirely neglects

that the Supreme Court has unambiguously held that a sentence is

procedurally unreasonable if “based on clearly erroneous facts.”

Gall, 552 U.S. at 51.

IV.

Because the district court found that it “just [did] not

believe a man that could target elderly individuals and deprive

them of their life savings [would] be a productive citizen at

any time in his life,” (J.A. 763-65), and then arrived at a de

facto life sentence using clearly erroneous facts, we vacate

Pileggi’s 600-month sentence and remand with instructions that

the case be reassigned for resentencing.

VACATED AND REMANDED WITH INSTRUCTIONS

11
TRAXLER, Chief Judge, dissenting:

Giuseppe Pileggi argues that we ought to vacate his

sentence because the government misstated the terms of the

diplomatic assurances provided to Costa Rica by the United

States in connection with his extradition. Because he failed to

correct the government’s incomplete description or even object

to his sentence as inconsistent with the extradition assurances

between the United States and Costa Rica, Pileggi faces the

substantial task of demonstrating plain error. I do not believe

Pileggi carried his burden in this regard and therefore

respectfully dissent.

In order to satisfy the plain error standard, Pileggi must

show: (1) an error was made; (2) the error is plain; and (3) the

error affects substantial rights. See United States v. Olano,

507 U.S. 725, 732 (1993). Significantly, the defendant, not the

government, “bears the burden of satisfying each of the elements

of the plain error standard.” United States v. Massenburg, 564

F.3d 337, 343 (4th Cir. 2009) (citing United States v. Vonn, 535

U.S. 55, 59 (2002)). Moreover, “[t]he decision to correct the

error lies within our discretion, and we exercise that

discretion only if the error ‘seriously affects the fairness,

integrity or public reputation of judicial proceedings.’” Id.

(quoting Olano, 507 U.S. at 732).

12
 In my view, Pileggi failed to establish the primary,

fundamental requirement that an error by the judge in fact

occurred. See United States v. Hastings, 134 F.3d 235, 239 (4th

Cir. 1998) (“In reviewing for plain error, our initial inquiry

is whether an error occurred.”). It is difficult to discern,

even from a careful reading of Pileggi’s brief, precisely what

error or errors he believes the district court committed. His

primary claim seems to be that the government misled the court,

albeit inadvertently, as to the terms of extradition, and that

the district court committed an error when it “t[ook] the

government’s statement as true.” Brief of Appellant at 18. To

the extent that Pileggi is arguing that the district court

imposed a sentence based on clearly erroneous factual findings,

he cannot demonstrate that the district court’s factual

conclusions were not “plausible in light of the record as a

whole.” United States v. Trujillo, 502 F.3d 353, 356 (5th Cir.

2007). Although the presentence report accurately summarized

the diplomatic assurances, the materials submitted to the

district court for sentencing did not include the actual

correspondence from the State Department to Costa Rica

containing the diplomatic assurances. Thus, it appears the only

information before the district court relating to the diplomatic

assurances consisted of brief summaries by the Assistant United

States Attorney and the Probation Officer. Such a record is

13
hardly enough to conclude that the district court made clearly

erroneous factual findings and I am not “left with the definite

and firm conviction that a mistake has been committed.” United

States v. Hill, 473 F.3d 112, 115 (4th Cir. 2007) (internal

quotation marks omitted).

Pileggi also fails to establish an error to the extent he

is arguing simply that the district court sentenced him based on

false information, which is essentially a due process argument.

See, e.g., U.S. v. Clanton, 538 F.3d 652, 655 (7th Cir. 2008)

(“There is no doubt that a criminal defendant has a due process

right to have the court consider only accurate information when

imposing sentence, and that this right may be violated when the

court considers information which is inaccurate.” (internal

quotation marks omitted)). “A due process violation is

established only if the defendant shows that the district court

relied on materially false information and that the information

is demonstrably the basis for the challenged sentence.” United

States v. Carr, 66 F.3d 981, 983 (8th Cir. 1995) (per curiam).

Pileggi does not carry his burden merely by pointing out the

fact that the district court was presented with inaccurate

information. See Clanton, 538 F.3d at 655 (explaining that

there is no “due process right to have a PSR free of [materially

untrue, inaccurate information]” and there is no error unless

“the judge . . . [relied] on the allegedly inaccurate

14
information”). In imposing a sentence within the advisory

guideline range, the district court during its thorough

explanation of the selected sentence did not refer in any way to

the terms of extradition. Pileggi is simply speculating that

the district court relied on the government’s misstatement.

Because the burden is allocated to him in the plain error

context, I would conclude that Pileggi failed to establish an

error that is plain.

Even assuming there is plain error here, Pileggi clearly

has failed to show that the error affected his substantial

rights. An error that affects substantial rights is an error

that has a prejudicial effect on the outcome, meaning there is

“a reasonable probability that, but for [the error claimed], the

result of the proceeding would have been different.” United

States v. Dominguez Benitez, 542 U.S. 74, 82 (2004) (alteration

in original) (internal quotation marks omitted). Unlike

harmless error analysis, which requires the government to show

that the error did not have a prejudicial effect on the outcome,

the plain error doctrine places the burden with the defendant to

make an affirmative showing of prejudice. See Massenburg, 564

F.3d at 343.

In light of the sentence ultimately imposed, Pileggi simply

cannot make such a showing. First, the district court’s

sentence, stiff though it may have been, was consistent with the

15
diplomatic assurance given to the government of Costa Rica that

Pileggi and his co-conspirators, if convicted, would “not

receive a penalty of death or one that requires that they spend

the rest of their natural lives in prison.” J.A. 17. Pileggi

claims that at his age (he was 48 years old at sentencing), a

600-month sentence is no different than a life sentence. But

that is incorrect; a sentence that is effectively a life

sentence is still not a life sentence. Pileggi refers to the

mortality tables and invites us to do some sort of actuarial

analysis to determine if, in fact, he received a life sentence.

The problems with such an “effective life sentence” approach are

obvious, beginning with the fact that a court would have to make

an ad hoc determination regarding whether a substantial prison

term should be regarded as a life sentence based on a

defendant’s age and health factors. *

Second, and more importantly, Pileggi points to absolutely

nothing in the record from which I can conclude that, had the

*
I recognize, of course, the equitable appeal of the
“effective life sentence” argument. The problem is where to
draw the line in a case like this in which it is conceivable
that the entire sentence could be served; we should refrain from
doing so. Indeed, I am not certain how the district court on
remand is to determine whether the sentence is effectively one
for life or not. In the end, the solution lies with the
executive branches of the parties to a given extradition treaty
which could, if so desired, account for the possibility of an
“effective life sentence” during the extradition process.

16
district court been accurately informed about the diplomatic

assurances, there is a reasonable probability that the court

would have imposed a lesser sentence. Without anything

concrete, Pileggi is just speculating. In the plain error

review context, it is not the government’s burden to convince

the court that, had the accurate information been available, the

district court would have imposed the same sentence. Rather, it

is Pileggi’s burden to establish a reasonable probability that

he would have received a more favorable sentence.

Finally, even when there is a plain error that affects

substantial rights, the court should exercise its discretion to

correct the error only if it “seriously affect[s] the fairness,

integrity or public reputation of judicial proceedings,” Olano,

507 U.S. at 732 (alteration in original) (internal quotation

marks omitted), or “in the case of actual innocence of the

defendant,” United States v. David, 83 F.3d 638, 647 (4th Cir.

1996). Pileggi makes no claim of actual innocence, and these

circumstances, in my view, clearly do not undermine the fairness

or reputation of our judicial process. Indeed, on at least one

previous occasion, we refused even to address a defendant’s

argument that his sentence violated the terms of an

international extradition treaty to which the United States was

party. See United States v. Davis, 954 F.2d 182, 186 (4th Cir.

1992). Significantly, we explained that the violation of the

17
relevant terms of extradition “does not rise to the level of

fundamentality that this court has traditionally demanded before

addressing a question of law not argued at the district court

level.” Id. Thus, I would not exercise our discretion to

correct such an error.

For the foregoing reasons, I respectfully dissent.

Furthermore, I see no reason to reassign this case to another

district judge, particularly in light of the fact that the

alleged error was one created by the parties’ combined failure

to correctly inform the district judge about the diplomatic

assurances related to Pileggi’s extradition. In explaining his

basis for imposing Pileggi’s sentence as the law requires him to

do, the district judge revealed no bias or other reason

suggesting he is unable or unwilling to impose a proper sentence

on remand. I fear a reassignment under these circumstances

sends a confusing and troublesome message to the district judges

in this circuit.

18