United States v. Robert Brown, Jr.

Indicted for operating a Ponzi scheme, Robert Brown pleaded guilty to one count of wire fraud. His partner in the scheme, Duane Eddings, proceeded to trial and was convicted of six counts of mail fraud, one count of wire fraud, three counts of money laundering, and three counts of tax evasion. Some of Eddings’s convictions arose from the Ponzi scheme and others from a bankruptcy fraud. Brown appeals his sentence; Eddings appeals his convictions and sentence.

We have jurisdiction under 28 U.S.C. § 1291 , and we affirm in part, vacate in part, and remand for resentencing.

I. Factual Background

A. The Ponzi scheme.

In 2000, after a Vallejo, California newspaper article touted Robert Brown’s investment capabilities, he organized a public seminar. Some attendees requested that Brown invest for them, and he agreed to do so. Unfortunately, Brown invested only some of the investors’ money and took the rest “off.the top” for his own use. Brown’s investments were initially successful enough to mask his wrongdoing, but they soon turned south.

Brown then began a classic Ponzi scheme: he would “lie to [investors] and make them feel that everything was still going well,” and use…