Forfeiture Order – Sentencing

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7^th Circuit Court of Appeals

Case Name: United States of America v. John T. Burns, III

Case No.: 15-2824

Officials: BAUER, KANNE, and HAMILTON, Circuit Judges.

Focus: Forfeiture Order – Sentencing

John Burns made fraudulent misrepresentations when soliciting investments for his employer, USA Retirement Services (“USARMS”). Burns told investors that he had experience managing investments and that he had personally invested in USARMS’s promissory notes. His statements were false. Moreover, without Burns’s knowledge, the investment opportunity was fraudulent. USARMS’s owners were operating a Ponzi scheme. With USARMS’s owners out of the picture for various reasons, the government filed a superseding indictment against Burns. The government alleged that Burns committed fraud by making material misrepresentations to investors. A jury convicted Burns on two counts of wire fraud and three counts of mail fraud. Despite not alleging that Burns knew of or participated in the Ponzi scheme, the government sought to hold Burns accountable for the entire $3.3 million the investors that he solicited lost as a result of the Ponzi scheme. The district court enhanced Burns’s sentence, ordered restitution, and ordered forfeiture based on the victims’ $3.3 million total loss. On appeal, Burns argues that there was insufficient evidence to convict him of making material misrepresentations. Burns also challenges the sentencing enhancement and the restitution order on grounds that the district court did not determine that he proximately caused the victims’ loss. Finally, Burns argues that the forfeiture order was improper because it was based on the victims’ loss and not on his gain. Because there was sufficient evidence to convict, we affirm Burns’s conviction. But because the district court erred in calculating the sentence, restitution order, and forfeiture order, we remand for resentencing.

Vacated and remanded for resentencing

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.