Appeals Court Affirms 30-Year Sentence for Louisiana Ponzi Schemer

The Fifth Circuit Court of Appeals today affirmed the sentence given to a man prosecutors alleged orchestrated the largest Ponzi scheme in Louisiana's history.  A federal judge had sentenced Matthew Pizzolata, 27, to thirty years in federal prison in for masterminding a scheme that took in nearly $20 million from 160 victims, most of whom were senior citizens.  While the plea agreement between Pizzolata and prosecutors called for a recommended sentence of 151 to 180 months, United States District Judge Lance Africk doubled the maximum recommendation, basing his decision on the emotional harm and advanced age of many of Pizzolata's victims.  Pizzolata appealed the sentence, contending that facts and argument supplied to the sentencing judge by the Government supporting a longer sentence breached the plea agreement.

Pizzolata was charged with sixty-four federal offenses in connection with the scheme he ran from 2005 to 2009.  Claiming to be one of the top 10 financial planners in the country, Pizzolata told investors that their money would be invested in conservative securities.  Investors were also told that Pizzolata was a certified estate planner and had graduated from law school, and were provided with fictitious account statements purporting to show account growth.  None of these representations were true.  Instead, Pizzolata used investor funds to conduct high-risk futures and commodities trading, as well as to pay fictitious returns on investments.  Pizzolata also misappropriated funds to sustain a lavish lifestyle that included luxury cars and vacations.

Rather than go to trial, Pizzolata entered a (c)(1)(B) plea agreement in which he agreed to plead guilty to twenty-one counts  of  mail  fraud,  one  count  of  wire  fraud,  three  counts  of  money laundering,  one  count  of  securities fraud,   and one  count  of  witness tampering.  Prosecutors agreed to recommend a sentence of 151-180 months of imprisonment.  However, the Pre-Sentencing Report issued by the Probation Department suggested that an upward departure from the recommended sentencing range might be appropriate based on the non-monetary and emotional harm inflicted on investors.   Because Pizzolata entered into a (c)(1)(B) plea agreement, which is not binding on the court, and not a binding (c)(1)(C) agreement, this upward departure was permissible.  The district court, after reviewing victim letters and testimony, then issued a sentence of thirty years in prison.  

The Fifth Circuit evaluated Pizzolata's objections to the sentence, noting that the dispositive question was whether the Government breached its obligations under the plea agreement.  Noting that the agreement was a (c)(1)(B) agreement, the Court found that


The district court was correct, therefore, when it determined that the Government agreed only that a particular sentencing range was appropriate, not that a particular sentence was appropriate.  The district court was correct, therefore, when it determined that the Government agreed only that a particular sentencing range was appropriate, not that a particular sentence was appropriate.  


Concluding that the record was clear that the district court independently decided to depart upwardly from the recommended sentencing guidelines, the Fifth Circuit affirmed Pizzolata's sentence.

A Copy of the Fifth Circuit's Order is here.