Federal Trade Commission (FTC) (CLOSED)
Most recent update 5/2/06 (See end of document)
United States v. Ronald T. Schaefer, No. IP 99-109-CR-01 D/F (S.D.
Indiana)
1/01 Update:
On January 19, 2001, Ronald T. Schaefer, 68, of Indianapolis, Indiana,
was sentenced to 37 months’ imprisonment by U.S. District Judge S. Hugh
Dillin following his conviction at trial of mail and wire fraud. This
case was the result of an investigation by the Federal Bureau of Investigation
and the Federal Trade Commission.
Judge Dillin also imposed 3 years supervised release following Schaefer’s
term of imprisonment. During the period of supervised release Schaefer
is prohibited from selling animation art or other collectibles, the
business that led to his fraud conviction. Schaefer was also ordered
to pay restitution to three consumers and one corporation that had compensated
a consumer.
Schaefer was indicted in August 1999 for mail and wire fraud in connection
with his sale of animation art, such as purported cels used to make
or promote motion pictures such as Lady and the Tramp and The
Lion King. The Indictment charged that Schaefer had misrepresented
the identity and value of these and other items of animation art.
The case was tried to a jury in Indianapolis in April 2000. The trial
testimony showed that Schaefer ran a business out of his home selling
animation art. He was convicted in connection with misrepresentations
about the origin and rarity of the pieces he sold. The jury also acquitted
Schaefer of certain counts in the Indictment.
At the January 19, 2001, sentencing hearing, the Court adopted the
findings of the Probation Office, which had found that Schaefer inflicted
over $200,000 in losses on consumers during the years of his scheme.
The Court also found that Schaefer had obstructed justice by his pretrial
conduct, and that his mail and wire fraud scheme violated an order of
the Federal District Court in Los Angeles that had been entered against
him in 1993.
6/01 Update:
On April 3, 2001, Schaefer served a notice of appeal to the 7th Cir.
from his judgment and conviction. The docket number in the appeals court
is Case No. 01-1837. The briefing of the appeal will be complete by
August 2001.
9/01 Update:
The briefs have been filed. Oral argument has been scheduled for the
Seventh Circuit Court of Appeals in Chicago on October 23, 2001, at
11:00 a.m. The courthouse is located at U. S. Court of Appeals 219 S.
Dearborn Street Chicago, IL 60604. Each side has been allotted 10 minutes
for argument.
10/01 Update:
The Seventh Circuit Court of Appeals heard oral argument of the defendant's
appeal on October 23, 2001. The court took the case under advisement,
which means nothing further will be required before the court issues
its decision. The case is being decided by a three judge panel of the
7th Circuit, consisting of Circuit Judge Harlington Wood, Circuit Judge
Richard D. Cudahy, and Circuit Judge Michael S. Kanne.
12/01 Update:
No change in status from 10/01 Update above, still awaiting decision.
3/02 Update:
No change in status from 10/01 Update above, still awaiting decision.
7/02 Update:
On May 28, 2002, the Seventh Circuit issued its opinion on defendant's
appeal from his sentencing. The Seventh Circuit vacated the sentence,
and remanded for further proceedings consistent with the court's opinion.
This means that the original sentence is no longer in effect. The Seventh
Circuit directed the district court to make additional findings before
entering a sentence. A copy of the Seventh
Circuit opinion is available at this link.
10/02 Update:
The case is now assigned to Judge Barker in the District Court. On
September 27, 2002, Judge Barker heard argument from both the government
and the defendant on the issue remaining in the case, in light of the
Court of Appeals' decision. The Court will review the matter further,
make findings, and reschedule the sentencing hearing for a later date.
12/02 Update:
On November 25, 2002, the Court issued its findings for the sentencing.
Among other things, the Court found that under the United States Sentencing
Guidelines, the following ranges will be applied at defendant's sentencing:
for incarceration, 37 - 46 months; for the fine, $7,500 to $75,000;
and for supervised release, 2 to 3 years. The Court also stated that
a sentencing hearing would be set to allow the parties an opportunity
to address the Court's findings and conclusions preparatory to a final
resolution of the issues relating to loss computations. The Court later
scheduled the sentencing hearing for December 16, 2002, at 2:30 p.m.
in Room 216 of the Federal Courthouse in Indianapolis.
See 12/13/02 Addendum below, rescheduling hearing for January 8, 2003.
12/13/02 Addendum:
On December 13, 2002, the District Judge granted an emergency motion
that defendant Ronald Schaefer filed to continue the sentencing due
to health problems. The sentencing was rescheduled for January 8, 2003,
at 2:00 p.m.
1/03 Update:
The District Court's November 25, 2002, Order
regarding the amount of loss for purposes of sentencing is available
at this link.
On January 3, 2003, defendant Ronald T. Schaefer submitted a Motion
To Continue Sentencing. The motion was supported by a letter from a
cardiologist regarding Schaefer's health. On January 7, 2003, the government
opposed the motion for a continuance. The government argued that the
doctor who signed the letter was not treating Schaefer, but was a social
acquaintance. The government also stated that, based on information
obtained from the doctor, Schaefer was not the doctor's patient, that
the doctor had never examined Schaefer, and that the doctor did not
know who was Schaefer's cardiologist. The government said that the doctor
had signed a letter that Schaefer presented to him as a favor, based
solely on information that Schaefer provided. On January 7, 2003, the
Court denied the motion to continue sentencing.
On January 8, 2003, the Court held a sentencing hearing. The Court
overruled objections defendant had filed to the Court's November 25,
2002, Order, and used the findings in that order in determining defendant
Ronald Schaefer's offense level under the United States Sentencing Guidelines.
The Court also denied defendant's request for a downward departure based
on health considerations.
The Court imposed the same sentence on defendant that Judge Dillin
had imposed in 2001. That is, the Court sentenced the defendant to imprisonment
of 37 months, restitution in the amount of $41,574, and three years
of supervised release upon completion of his term of incarceration.
During the period of supervised release, Schaefer is prohibited from
selling animation art or other collectibles. No fine was imposed, due
to inability to pay. The Court ordered that Schaefer begin serving his
prison sentence immediately.
6/03 Update:
On January 17, 2003, Schaefer filed a notice of appeal from the sentence
imposed on January 13, 2003. The docket number in the Seventh Circuit
is case No. 03-1189. Briefing is scheduled to be completed by August
13, 2003.
11/03 Update:
Briefing on the appeal is complete as of 9/24/03.
12/12/03 Update:
Oral argument has been scheduled for the Seventh Circuit Court of Appeals
in Chicago for the morning of January 5, 2004. The courthouse is located
at U.S. Court of Appeals, 219 S. Dearborn Street, Chicago, IL 60604.
Each side has been allotted 10 minutes for argument.
2/04 Update:
Oral argument held January 5, 2004, Seventh Circuit Court of Appeals
has not yet ruled.
9/04 Update:
Oral argument held January 5, 2004, Seventh Circuit Court of Appeals
has not yet ruled.
4/05 Update:
On September 13, 2004, the Seventh Circuit issued its opinion on defendant's
second appeal. The court remanded the case for resentencing because
after Schaefer was sentenced and while his appeal was pending, the Supreme
Court had decided Blakely v. Washington, 124 S.Ct. 2531 (2004).
That case overturned the sentencing system for the State of Washington,
and raised concerns over the constitutionality of the Federal Sentencing
Guidelines. In United States v. Booker, 375 F.3d 508 (7th Cir.
2004), the Seventh Circuit had applied Blakely to the Federal
Sentencing Guidelines. In light of these decisions, the Seventh Circuit
remanded Schaefer's case for resentencing.
In addition to remanding for resentencing, the Seventh Circuit said
that the district court's loss calculation at Schaefer's second sentencing
was affirmed. The Seventh Circuit also affirmed two of the district
court's three one-level upward departures, and reversed with respect
to the third upward departure. This placed Schaefer in the same Guidelines
sentencing range as Judge Dillin employed in Schaefer's initial sentencing.
The court said that absent the developments in Blakely and Booker,
remand for resentencing would have been unnecessary. The court's
opinion is available at this link.
Subsequently, the Supreme Court issued its opinion in the Booker
case, United States v. Booker, 125 S.Ct. 738 (2005), which held
that the Federal Sentencing Guidelines could not constitutionally be
mandatory. The Supreme Court held that while courts must consider the
Guidelines in imposing sentences, the Guidelines were now advisory rather
than mandatory. The district court had issued an order setting Schaefer's
case for resentencing on Wednesday, April 20, 2005. However, the sentencing
was rescheduled, and is now set for Friday, April 29, 2005, at 10:00
in Room 216 of the United States Courthouse in Indianapolis.
5/6/05 Update:
On April 29, 2005, Judge Barker held the third sentencing hearing in
this case, necessitated by the Supreme Court ruling discussed above
that made the sentencing guidelines advisory rather than mandatary.
At the sentencing hearing, Judge Barker imposed a 37-month sentence
on the defendant, the same sentence that had been imposed twice before.
The Court found that this sentence was reasonable and appropriate both
under Federal Sentencing Guidelines and in light of other statutory
factors which are relevant to sentencing. In all other respects (for
example, restitution, supervised release, and fine) the sentence previously
imposed was reimposed.
11/22/05 Update:
Schaefer filed an appeal with the Seventh Circuit on May 12, 2005. The Seventh Circuit established a briefing schedule which requires Schaefer to file his brief on December 12, 2005. The Government's reply is due January 4, 2006. Any reply brief from Mr. Schaefer must be filed by January 18, 2006. The Court has not yet decided whether or not there will be oral argument on the appeal.
3/8/06 Update:
The Seventh Circuit vacated the district court’s restitution order and remanded the case to the district court for entry of a restitution payment schedule.
4/28/06 Update:
The district court amended the judgment of restitution to include a payment schedule. Under federal law, restitution is ordered in criminal cases, in general, on the basis of losses a defendant causes and without regard to the defendant's ability to pay the restitution. See 18 U.S.C. Sec. 3664(f)(1)(A), which provides: "In each order of restitution, the court shall order restitution to each victim in the full amount of each victim's losses as determined by the court and without consideration of the economic circumstances of the defendant."
Any payments made by the defendant will go to the Court and will then be shared among the victims. Any amount due a victim shall be reduced by any amount the victim recovers for the same loss from any other source. If you have any questions regarding the restitution order, please contact the Federal Probation Office for the Southern District of Indiana.
5/2/06 Update:
Ronald Schaefer was released from prison.
