Case: 1:21-cr-00491-JPC Doc #: 594 Filed: 04/23/25 1 of 9. PageID #: 11888
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`UNITED STATES OF AMERICA,
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`Plaintiff,
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF OHIO
`EASTERN DIVISION
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`OPINION AND ORDER
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`Case No. 1:21-cr-491-3
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`Judge J. Philip Calabrese
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`Magistrate Judge
`Jonathan D. Greenberg
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`v.
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`CHARLES SCOTT,
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`Defendant.
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`On February 12, 2025, Defendant Charles Scott was sentenced to a term of 42
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`months of imprisonment followed by a term of supervised release of 24 months. His
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`report date was initially set for April 21, 2025. Defendant filed a notice of appeal on
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`February 19, 2025 then moved for release pending appeal on April 7, 2025. To allow
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`for adequate time to consider the motion, the Court extended Mr. Scott’s report date
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`to May 12, 2025.
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`ANALYSIS
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`Pursuant to 18 U.S.C. § 3143(b), a defendant who has been sentenced shall be
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`detained unless the court makes two findings. First, the court must find “by clear
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`and convincing evidence that the person is not likely to flee or pose a danger to the
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`safety of any other person or the community if released.” Id. § 3143(b)(1)(A). Rule 46
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`of the Federal Rules of Criminal Procedure places the burden of making each of these
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`showings on the defendant. “The burden of establishing that the defendant will not
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`flee or pose a danger to any other person or to the community rests with the
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`UNITED STATES OF AMERICA,
`
`
`Plaintiff,
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF OHIO
`EASTERN DIVISION
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`OPINION AND ORDER
`
`Case No. 1:21-cr-491-3
`
`Judge J. Philip Calabrese
`
`Magistrate Judge
`Jonathan D. Greenberg
`
`
`v.
`
`CHARLES SCOTT,
`
`
`Defendant.
`
`
`
`
`
`On February 12, 2025, Defendant Charles Scott was sentenced to a term of 42
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`months of imprisonment followed by a term of supervised release of 24 months. His
`
`report date was initially set for April 21, 2025. Defendant filed a notice of appeal on
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`February 19, 2025 then moved for release pending appeal on April 7, 2025. To allow
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`for adequate time to consider the motion, the Court extended Mr. Scott’s report date
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`to May 12, 2025.
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`ANALYSIS
`
`Pursuant to 18 U.S.C. § 3143(b), a defendant who has been sentenced shall be
`
`detained unless the court makes two findings. First, the court must find “by clear
`
`and convincing evidence that the person is not likely to flee or pose a danger to the
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`safety of any other person or the community if released.” Id. § 3143(b)(1)(A). Rule 46
`
`of the Federal Rules of Criminal Procedure places the burden of making each of these
`
`showings on the defendant. “The burden of establishing that the defendant will not
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`flee or pose a danger to any other person or to the community rests with the
`
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`
`
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`Case: 1:21-cr-00491-JPC Doc #: 594 Filed: 04/23/25 2 of 9. PageID #: 11889
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`defendant. Fed. R. Crim. P. 46(c). Second, the court must find that that the appeal
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`is not for purposes of delay and raises a substantial question of law or fact likely to
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`result in some disposition favorable to the defendant, ranging from reversal to a
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`lesser sentence. 18 U.S.C. § 3143(b)(1)(B).
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`The statute “creates a presumption against release pending appeal.” United
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`States v. Sutherlin, 84 F. App'x 630, 631 (6th Cir. 2003). Subsection (A) presumes
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`dangerousness, which the defendant must overcome with clear and convincing
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`evidence. United States v. Vance, 851 F.2d 166, 168 (6th Cir. 1988). Under subsection
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`(B), the defendant must raise a substantial question that is likely to result in reversal,
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`a new trial, or other favorable disposition. Sutherlin, 84 F. App’x at 630 (citations
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`omitted); see also United States v. Sittenfeld, No. 23-3840, 2024 WL 3025509, at *1
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`(6th Cir. May 15, 2024). A substantial question means a “close question” on appeal
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`that is “so integral to the merits of the conviction that it is more probable than not
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`that reversal or a new trial will occur if the question is decided in the defendant's
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`favor.” United States v. Pollard, 778 F.2d 1177, 1182 (6th Cir. 1985) (citing United
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`States v. Powell, 761 F.2d 1227, 1233–34 (8th Cir.1985)).
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`To determine whether a question is substantial, “a judge must essentially
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`evaluate the difficulty of the question he previously decided.” Sutherlin, 84 F. App'x
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`at 631 (United States v. Shoffner, 791 F.2d 586, 589 (7th Cir.1986)). “Since the district
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`court is familiar with the case, the district court is in an excellent position to
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`determine in the first instance whether the defendant raises a substantial question
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`on appeal.” Pollard, 778 F.2d at 1182.
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`2
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`Case: 1:21-cr-00491-JPC Doc #: 594 Filed: 04/23/25 3 of 9. PageID #: 11890
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`I.
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`Flight Risk and Dangerousness
`Mr. Scott has no criminal history and has complied with all conditions of his
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`pretrial release. On March 27, 2025, Mr. Scott surrendered his passport. (ECF
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`No. 562.) His compliance with pretrial conditions and the non-violent nature of his
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`offenses provide clear and convincing evidence that he is not a flight risk and poses
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`no danger to the community.
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`II.
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`Substantial Question Under § 3143(b)
`Notwithstanding some concern that Defendant brings this motion for purposes
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`of delay, particularly after not raising the issue at sentencing, the Court gives
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`Mr. Scott the benefit of the doubt and turns to whether Defendant’s appeal raises a
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`substantial question within the meaning of the statute. Mr. Scott’s motion focuses
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`on the application of the new acquitted conduct guideline, so the Court begins its
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`analysis there.
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`II.A. Guideline Calculation
`Mr. Scott was sentenced to 42 months imprisonment. Defendant argues that
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`his acquittal of wire fraud reflects the jury’s finding that Mr. Scott lacked an intent
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`to defraud investors, making his conviction based on improper trading practices as
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`opposed to intent to deprive investors of their money. (ECF No. 571, PageID
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`#11087–88.) He maintains that proper application of the newly enacted guideline for
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`acquitted conduct in Section 1B1.3(c) would lower the loss amount, resulting in a
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`guideline range of 10 to 16 months, instead of the guideline range of 87 to 108 months,
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`which the Court calculated at sentencing. (Id., PageID #11072.)
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`3
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`Case: 1:21-cr-00491-JPC Doc #: 594 Filed: 04/23/25 4 of 9. PageID #: 11891
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`II.A.1. Acquitted Conduct
`The Court agrees that the language of this new guideline and its interplay with
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`a conviction for a conspiracy charge presents difficult questions of first impression.
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`At sentencing, the Court recognized the tension between conspiracy liability and the
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`guideline’s exclusion of acquitted conduct as relevant conduct.
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`II.A.1.a. The Acquitted Conduct Guideline
`Section 1B1.3 of the United States Sentencing Guidelines addresses the
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`relevant conduct a court may consider in determining the guideline range for a
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`particular defendant. Until recently, conduct of which a defendant was acquitted at
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`trial could serve as relevant conduct because of the different standards of proof for
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`finding guilt (proof beyond a reasonable doubt) and at sentencing (preponderance).
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`See United States v. Watts, 519 U.S. 148, 156 (1997) (per curiam).
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`Effective November 1, 2024, Amendment 826 modified Section 1B1.3 to
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`prohibit the consideration of acquitted conduct in determining a defendant’s
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`guideline range, adding subsection (c), which provides that “[r]elevant conduct does
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`not include conduct for which the defendant was criminally charged and acquitted in
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`federal court.” U.S.S.G. § 1B1.3(c). This new guideline comes with an important
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`qualification: “unless such conduct also establishes, in whole or in part, the instant
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`offense of conviction.” Id. The amended guideline provides, in its entirety:
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`Acquitted Conduct.—Relevant conduct does not include conduct for
`which the defendant was criminally charged and acquitted in federal
`court, unless such conduct also establishes, in whole or in part, the
`instant offense of conviction.
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`Id.
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`4
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`Case: 1:21-cr-00491-JPC Doc #: 594 Filed: 04/23/25 5 of 9. PageID #: 11892
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`In the run of cases, the line between acquitted conduct and “the instant offense
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`of conviction” might prove fairly straightforward or, at least, manageable. In a case
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`involving a conspiracy, however, matters quickly become more complicated. In
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`conspiracy offenses, relevant conduct embraces “all acts and omissions committed . . .
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`and in the case of a jointly undertaken criminal activity all acts and omissions of
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`others that [are] [1] within the scope of the jointly undertaken criminal activity, [2]
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`in furtherance of that criminal activity, and [3] reasonably foreseeable in connection
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`with that criminal activity.” U.S.S.G. § 1B1.3 cmt. n.3(A)–(B). Even without
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`accounting for acquitted conduct, identifying relevant conduct in a conspiracy can
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`prove difficult because relevant conduct and the scope of a conspiracy are not
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`necessarily the same. Id. cmt. n.3(B). To determine a defendant’s accountability
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`under the guidelines, “the court must first determine the scope of the criminal activity
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`the particular defendant agreed to jointly undertake (i.e., the scope of the specific
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`conduct and objectives embraced by the defendant's agreement).” Id. “Acts of others
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`that were not within the scope of the defendant's agreement, even if those acts were
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`known or reasonably foreseeable to the defendant, are not relevant conduct.” Id.
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`Against this backdrop, the new acquitted conduct guideline in Section 1B1.3(c)
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`makes what might appear to be a modest change, removing from the equation
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`responsibility for conduct for which a defendant was federally charged and acquitted.
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`For a defendant such as Mr. Scott, however, whose conduct the record shows extends
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`to the ends of the conspiracy, the jury’s verdict of guilty on the conspiracy stands in
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`some tension with acquittal on underlying substantive offenses. To be clear, that
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`5
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`Case: 1:21-cr-00491-JPC Doc #: 594 Filed: 04/23/25 6 of 9. PageID #: 11893
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`tension arises only for guideline purposes—specifically, determining the loss amount.
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`Put another way, a conspiracy may—as in this case—subsume underlying
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`substantive counts such that, when determining the guideline range, not taking that
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`conduct into account understates the conduct at issue in the conspiracy,
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`notwithstanding an acquittal on an underlying charge. Recognizing the complexity
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`of the issue, the Sentencing Commission explained in a podcast that it did not “try
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`and come up with a resolution to every single murky case. [The Commission] actually
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`left it to the discretion of the federal judge who hopefully sat through that trial and
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`will be able to better parse through” the record. Sentencing Practice Talk: Episode
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`27, Part 2, United States Sentencing Commission (Oct. 31, 2024).
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`Based on its study and analysis of this issue since the jury returned its
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`verdicts, the Court determines that the “unless” clause in the new acquitted conduct
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`guideline in Section 1B1.3(c) does a lot of work to address this problem. That is,
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`where the offense of conviction also establishes what would otherwise be acquitted
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`conduct, then the sentencing court may take the acquitted conduct into account in its
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`guideline calculation. A new application note confirms this reading of the guideline:
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`Subsection (c) provides that relevant conduct does not include conduct
`for which the defendant was criminally charged and acquitted in federal
`court, unless such conduct establishes, in whole or in part, the instant
`offense of conviction. There may be cases in which certain conduct
`underlies both an acquitted charge and the instant offense of conviction.
`In those cases, the court is in the best position to determine whether
`such overlapping conduct establishes, in whole or in part, the instant
`offense of conviction and therefore qualifies as relevant conduct.
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`6
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`Case: 1:21-cr-00491-JPC Doc #: 594 Filed: 04/23/25 7 of 9. PageID #: 11894
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`U.S.S.G. § 3B1.3(c) cmt. n.10. In short, when calculating the guideline range, a court
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`may consider any evidence of the total loss within the scope of the conspiracy, even if
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`a jury acquitted a defendant of some conduct accounting for some specific losses.
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`II.A.1.b. Conduct Underlying the Count 2 Conspiracy
`At trial, Mr. Scott was convicted of conspiracy to commit securities fraud
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`(Count 2) and securities fraud (Count 20) but acquitted on two counts of wire fraud
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`(Count 45 and Count 47). The jury was instructed that intent to defraud is an
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`essential element of securities fraud and that good faith is a complete defense. By
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`returning guilty verdicts on both securities fraud and conspiracy to commit securities
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`fraud, then, the jury necessarily found that Mr. Scott acted with the intent to defraud
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`or engaged in a fraud. At trial, the evidence established that the fraud involved
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`artificially manipulating the price of USLG stock. This conduct subsumes the specific
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`transactions involved in the two wire fraud counts, and it is difficult to tease out those
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`transactions
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`for guideline purposes.
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` Therefore, the record supports the
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`determination that Mr. Scott’s conduct establishes his participation in the Count 2
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`conspiracy and responsibility for its full intended loss amount such that Section
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`1B1.3(c) does not bar its use in calculating the loss amount.
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`II.A.2. Intended Loss
`Relatedly, Defendant takes issue with the Court’s calculation of the loss
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`amount. Under U.S.S.G. § 2B1.1 cmt. n.3(B), the court “need only make a reasonable
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`estimate of the loss.” The loss amount determined by the court “is entitled to
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`appropriate deference.” Id.
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`7
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`Case: 1:21-cr-00491-JPC Doc #: 594 Filed: 04/23/25 8 of 9. PageID #: 11895
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`At sentencing, the Court heard arguments on the intended loss amount in the
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`presentence investigation report, which added 18 points to Mr. Scott’s offense level
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`based on a loss exceeding $3.5 million. (ECF No. 549, PageID #10471–93.)
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`Notwithstanding the acquitted conducted guideline, the Court found based on the
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`record that the conspiracy intended the totality of the loss. The Court calculated that
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`amount as approximately $3.25 million, based on the number of shares Mr. Scott and
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`one of his co-Defendants contributed to the scheme and a $0.30 per-share value from
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`the time, reducing the enhancement to 16 levels.
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`II.A.3. Harmless Error
`Defendant’s reliance on the wire fraud acquittals does not change the analysis.
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`The applicable Guidelines range for Mr. Scott was 87 to 108 months, based on a total
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`offense level of 29 and a Criminal History Category of I. (ECF. No 549, PageID
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`#10529.) And he argued for a guideline range of 10 to 16 months. However one
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`calculates the guideline range for Mr. Scott, the Court made clear at sentencing that
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`the appropriate sentence in this case is a variance. (ECF No. 549, PageID #10557.)
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`Under 18 U.S.C. § 3553(a), the Court found that a sentence of 42 months was
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`sufficient but not greater than necessary. (ECF No. 549, PageID #10551–57.)
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`Further, the Court found that it “would have imposed the same sentence even if that
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`might have involved an upward variance.” (Id., PageID #10563.)
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`“If the record shows that the district court would have imposed its sentence
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`regardless of the Guidelines range, then an error in calculating the Guidelines range
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`is harmless.” United States v. Morrison, 852 F.3d 488, 491 (6th Cir. 2017); see also
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`Molina-Martinez v. United States, 578 U.S. 189, 200 (2016). Based on the record as
`8
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`Case: 1:21-cr-00491-JPC Doc #: 594 Filed: 04/23/25 9 of 9. PageID #: 11896
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`a whole, including from presiding at trial, the Court cannot say that Mr. Scott’s
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`appeal is likely to result in a sentence that does not involve a term of imprisonment
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`or one shorter than the amount of time Mr. Scott will spend in custody between May
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`12, 2025 and the conclusion of his appeal. See 18 U.S.C. § 3143(b)(1)(B)(iii) & (iv).
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`II.B. Other Issues
`Defendant indicates that he will also challenge his conviction based on the
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`“deliberate ignorance” jury instruction and certain evidentiary issues arising from his
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`co-conspirator’s guilty plea on the morning of trial. (Id., PageID # 11072.) Because
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`the trial transcript is not yet available, Mr. Scott does not develop an argument based
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`on either issue. (Id.) Without the benefit of arguments developed in the motion or in
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`a post-trial motion, the Court is unable to assess whether Defendant presents any
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`substantial question. Therefore, he fails to carry his burden on these issues.
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`CONCLUSION
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`For the foregoing reasons, the Court DENIES Defendant’s motion for release
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`pending appeal.
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`SO ORDERED.
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`Dated: April 22, 2025
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`
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`J. Philip Calabrese
`United States District Judge
`Northern District of Ohio
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`9
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