United States v. Rangel, — F.3d—, No. 11-50062, 2012 WL 2948544 (9th Cir. July 20, 2012).

Defendant pled guilty to charges of mail fraud and money laundering in connection with his operation of a Ponzi-type scheme whereby investors were offered a guaranteed rate of return supposedly backed by profits earned through the purchase and sale of real estate and through high interest loans to homeowners facing foreclosure.  At the sentencing hearing, the district court was informed that defendant was not in a position to pay any restitution toward the victims’ losses and, as a result, the victims of his crime would never receive the $20 million in restitution to which they were entitled.  Defendant was then sentenced to a 264-month prison term, which exceeded the sentence proposed by the parties in the plea agreement as well as the range recommended by the sentencing guidelines.  Defendant appealed his sentence, arguing, inter alia, that the district court erred by considering the unmitigated impact on the victims in its sentencing decision.  On appeal the court affirmed the district court’s sentencing decision, holding that the district court did not abuse its discretion in considering the serious financial impact defendant’s crimes had on his victims, including the fact that they were unlikely to ever receive any compensatory payments from him.  The court explained that the district court “did not consider [defendant’s] inability to pay restitution itself as an aggravating factor in imposing a longer sentence, but focused instead on the impact on the victims of [defendant’s] crimes.  Because [defendant] was not expected to make restitution payments, the impact on the victims stood unmitigated.”  The court also pointed approvingly to the fact that during the sentencing hearing, the district court had noted that “one of the factors for the Court to consider under [18 U.S.C. §] 3553 is restitution to the victims[,]” and that the district court repeatedly referred to the financial ruin that defendant caused his victims, and the length of time it would take them to recover their losses.  Because the district “court’s discussion made clear that its concern over restitution was based on the impact defendant’s crime had on the victims and was not designed to punish defendant for his inability to pay[,]” consideration of the unmitigated impact on the victims was proper.