United States District Court, M.D. Pennsylvania
SYLVIA H. RAMBO, District Judge.
In this criminal case, Defendant Robert G. Bard, who was convicted of 21 counts related to his participation in an investment advisor fraud, filed a motion requesting his continued release from incarceration pending appeal (Doc. 141), which is opposed by the Government (Doc. 145). The court finds that Defendant has failed to demonstrate a valid basis to grant his request, and will accordingly deny the pending motion.
For the purposes of this motion, the court only briefly summarizes the relevant background; a more detailed version can be found in the court's opinion regarding the court's calculation of loss for sentencing purposes (the "Loss Opinion"). See United States v. Bard, Crim. No. 12-cr-0181, Doc. 124 (M.D. Pa. July 3, 2014).
Defendant was president and sole owner of Vision Specialist Group ("Vision Specialist"), an investment advisory firm registered in Pennsylvania and located in Defendant's hometown, Warfordsburg, Pennsylvania. In that capacity, Defendant perpetrated a fraudulent scheme wherein he solicited and obtained millions of dollars of his clients' funds under false pretenses. Defendant provided his clients with fee-based advisory services, and Vision Specialist calculated the fee amounts and requested payments from the custodial broker, TD Ameritrade. The fees were deducted directly out of the clients' accounts and transferred into Defendant's operating account. Defendant invested in highly speculative and risky securities, using margin loans to fund purchases, which had the effect of increasing his clients' risks and ultimately resulted in margin calls when the values of the securities declined.
Defendant used a variety of methods to mislead his clients into believing their account balances were much greater than they were and were actually increasing in value despite the downturn in the economy. For example, to conceal the losses, Defendant repeatedly provided clients with false verbal assurances and manufactured fraudulent account statements that grossly overstated the values in their accounts. He untruthfully told his clients that there were procedures in place that would guard against any significant losses to their accounts. Although his clients received account statements directly from the custodial broker that accurately reported the values, Defendant caused his clients to disregard the accurate statements by using the manufactured documents coupled with his explanations that the custodial broker's statements did not include the entirety of the client's investments. These continued misrepresentations caused his clients to continually invest with VSG.
Unbeknownst to the clients, Defendant caused them to lose, in some cases, the entire corpus of their savings, while collecting $852, 383.00 in fees for his services. Following an investigation which was prompted by a report by one of Defendant's victims, Defendant was charged in a 21 count indictment on November 19, 2009. (Doc. 1.) Defendant filed pre-trial motions, including a motion seeking to exclude evidence based on an alleged violation of the proffer agreement (Doc. 46), which the court denied on May 6, 2013, after finding that the terms of the proffer agreement did not cover the Bard Misrepresentations and that Defendant's belief of coverage was, even if sincere, unreasonable (Doc. 52). Defendant also filed motions in limine seeking to exclude evidence of and reference to his declaration of bankruptcy (Doc. 53) and to exclude evidence of and reference to any prior investigation by financial regulatory bodies (Docs. 53 & 55), which the court denied on June 20, 2013, after finding that the challenged evidence was intrinsic to the fraud, highly probative to prove that Defendant knowingly defrauded by materially false pretenses, not impermissible 404(b) propensity evidence, and not unfairly prejudicial (Doc. 66).
A trial on the charges commenced on August 12, 2013, and the jury returned a guilty verdict on all 21 counts on August 21, 2013. (Doc. 91.) On July 24, 2014, the court issued an opinion addressing Defendant's objections to the pre-sentence report, finding that the loss amount, for purposes of sentencing, was the amount that Defendant placed at risk through his fraudulent conduct and warranted an eighteen-level increase pursuant to U.S.S.G. § 2B1.1(b)(1)(J), and that the number of victims warranted a four-level increase pursuant to U.S.S.G. §2B1.1(b)(2)(B). (Doc. 124.) The court sentenced Defendant to a 262-month term of incarceration and ultimately ordered Defendant to pay restitution in the amount of $4, 204, 210.78. (Doc. 132, as amended Doc. 133.) Defendant filed a notice of appeal immediately after sentencing. (Doc. 134.) Trial counsel withdrew and the federal public defender was appointed to represent Defendant for purposes of appeal. Defendant is currently incarcerated at the Federal Correctional Institution at Loretto.
On October 30, 2014, Defendant filed the instant motion for release pending appeal. (Doc. 141.) The Government timely filed its brief in opposition on December 12, 2014. (Doc. 145; see also Doc. 144 (granting the Government's unopposed motion for extension of time to respond).) The matter has been sufficiently briefed and is appropriate for disposition.
II. Legal Standard
Defendant's motion is governed by 18 U.S.C. § 3143(b), which provides, in pertinent part, as follows:
(1) Except as provided in paragraph (2), the judicial officer shall order that a person who has been found guilty of an offense and sentenced to a term of imprisonment, and who has filed an appeal or a petition for a writ of certiorari, be detained, unless the judicial officer finds -
(A) by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any other person or the community if released under section 3142(b) or (c) of this title; and
(B) that the appeal is not for the purpose of delay and raises a substantial question of law or ...