Walter Marion Williams pleaded guilty to one count of mail fraud, in violation of 18 U.S.C. § 1341, and was sentenced to a term of 108 months' imprisonment to be followed by 3 years of supervised release. Williams appealed from his sentence, which he argued was an unreasonable upward variance from his guidelines range of 51 to 63 months' imprisonment. The Eleventh Circuit dealt with the appeal in United States of America v. Walter Marion Williams, No. 10-13577 (11th Cir. 11/14/2011).
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From 1992 until 2009, Williams, who was a licensed insurance broker, took over 1.9 million dollars from several of his friends, relatives, and congregants at the church he attended, promising that he would invest their money in annuities and viatical settlements. But instead of investing their money, Williams used it to pay gambling debts and support a relatively luxurious lifestyle. Toward the end of this scheme several of the "investors" grew suspicious of Williams and asked that he return their money. Williams gave them cash in attempt to appease them, but only compounded his fraud, because he "refunded" them by taking more money from other victims emulating, in a small way Mr. Ponzi and Mr. Madoff.
108 Months In Prison
After hearing testimony at sentencing from several victims of Williams's scheme and considering the sentencing factors in 18 U.S.C. § 3553(a), the district judge imposed a sentence of 108 months' imprisonment. The judge noted at sentencing that he did not think that the guidelines range adequately reflected the seriousness of Williams's conduct.
The Eleventh Circuit reviews all sentences, whether they are imposed inside or outside the guidelines, only for reasonableness under an abuse of discretion standard. In reviewing the substantive reasonableness of a sentence the court looks at the totality of the circumstances including the extent of any variance from the guidelines range. The district judge noted the length of the defendant's scheme, the financial burden it imposed on its victims and their families, the small likelihood of recovering any of the defrauded funds, the age of the victims, and Williams's use of personal and familial relationships to defraud the victims.
Since the last element (abuse of trust) was taken into account in the guidelines calculations, the Eleventh Circuit concluded that the district court did not abuse its discretion by concluding the defendant's abuse of trust was more egregious than what was contemplated by the guidelines.
Sentencing for insurance fraud, as the Deputy Attorney General has said, is haphazard at best. The trial judge in this case must be commended for using discretion to sentence this corrupt insurance agent and broker to nine years in prison. The sentence will not make his victims whole nor give them any joy in losing their assets to a person in whom they placed trust. It will, at best, give them some comfort that the person who stole from them while acting in a fiduciary capacity, to cover gambling debts and live well. Hopefully he will serve his time in a serious prison.
Reprinted with Permission from Zalma on Insurance, (c) 2011, Barry Zalma.
Barry Zalma, Esq., CFE, is a California attorney, insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud. Mr. Zalma serves as a consultant and expert, almost equally, for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and serves as its senior consultant. He recently published the e-books, "Heads I Win, Tails You Lose - 2011," "Zalma on Rescission in California," "Zalma on Diminution in Value Damages," "Arson for Profit" and "Zalma on California Claims Regulations," "Murder and Insurance Fraud Don't Mix" and others that are available at Zalma Books.
Mr. Zalma can be contacted at Barry Zalma, email@example.com and you can access his free "Zalma on Insurance Fraud" newsletter at Zalma's Insurance Fraud Letter.
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