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US v. Ronald Schaefer

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US v. Ronald Schaefer


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.


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Updated October 27, 2014