UNITED STATES of America, Plaintiff-Appellee, v. Louis VARGAS, Defendant-Appellant

Opinion by Chief Judge WALLACE; Dissent by Judge REINHARDT.

Vargas challenges the sentence imposed for his securities fraud conviction. The district court had jurisdiction pursuant to 18 U.S.C. § 3231 . We have jurisdiction pursuant to 18 U.S.C. § 3742 and 28 U.S.C. § 1291 . We affirm.

I

In 1985, Vargas began working for Reserve Financial Group, which was formed in 1984 by John Anthony Genetti for the purpose of creating, selling, and marketing bogus municipal bonds. Genetti masterminded the scheme in which Vargas and three others participated. Vargas falsely represented to prospective investors that the securities were backed by governmental agencies, that they were triple-A rated, and completely liquid, when in fact the securities did not even exist.

In October 1992, Vargas pleaded guilty to two counts of securities fraud, in violation of 15 U.S.C. §§ 77a and 78a, and to one count of submitting a false loan application to a federally insured institution, in violation of 18 U.S.C. § 1014 . The two counts of securities fraud charged Vargas with sales of bogus bonds on November 4 and November 19, 1987. The third count charged him with submitting a false loan application on or…

dissenting: This case is, pure and simple, an example of a district judge’s unwillingness to aeeept the strictures imposed by the Sentencing Guidelines. Although most frequently district judges are frustrated by the necessity to impose unreasonably harsh and unjust sentences as the result of the inflexible and mechanistic sentencing system that now binds the judiciary, in this ease the district judge surprisingly was motivated by a contrary concern. He thought that a sentence *827 of less than six years was too little for the securities fraud involved. Accordingly, he decided to disregard what the Guidelines clearly contemplate and created his own formula, one that he thought would justify the sentence he decided to impose. To make matters worse, he then erred by misapplying the newly created formula. When the district judge added four levels because the amount of loss substantially exceeded $5,000,000, he did not realize that the guideline offense level with which he started already included one of the levels he thought necessary to add. Therefore, he erroneously added one level more than even his own formula would permit.

While it is clear that the district court had the…

67 F.3d 823 95 Cal. Daily Op. Serv. 7734 , 95 Daily Journal D.A.R. 13,245 UNITED STATES of America, Plaintiff-Appellee, v. Louis VARGAS, Defendant-Appellant. No. 93-50236. United States Court of Appeals, Ninth Circuit. Argued and Submitted Oct. 7, 1994. Memorandum Nov. 9, 1994. Submitted July 20, 1995. Decided Oct. 3, 1995. Louis Vargas, Nellis Federal Prison Camp, North Las Vegas, Nevada, pro se. David J. Schindler, Assistant United States Attorney, Los Angeles, California, for plaintiff-appellee. Appeal from the United States District Court for the Central District of California. Before: WALLACE, Chief Judge, REINHARDT and BRUNETTI, Circuit Judges. Opinion by Chief Judge WALLACE; Dissent by Judge REINHARDT. WALLACE, Chief Judge: 1 Vargas challenges the sentence imposed for his securities fraud conviction. The district court had jurisdiction pursuant to 18 U.S.C. Sec. 3231 . We have jurisdiction pursuant to 18 U.S.C. Sec. 3742 and 28 U.S.C. Sec. 1291 . We affirm. 2 * In 1985, Vargas began working for Reserve Financial Group, which was formed in 1984 by John Anthony Genetti for the purpose of creating, selling, and marketing bogus municipal bonds. Genetti masterminded the scheme…