from the United States District Court for the District of New
Mexico (D.C. No. 1:15-CR-04265-JCH-1)
J. Federici, United States Attorney's Office,
Albuquerque, New Mexico (James D. Tierney, United States
Attorney's Office, Albuquerque, New Mexico, with him on
the briefs), for Plaintiff-Appellant.
Twohig, Albuquerque, New Mexico for Defendant-Appellee.
LUCERO, HARTZ, and HOLMES, Circuit Judges.
LUCERO, CIRCUIT JUDGE.
United States government appeals the sentence of Matthew
Sample, following his guilty plea to one count of frauds and
swindles under 18 U.S.C. § 1341 and two counts of wire
fraud under 18 U.S.C. § 1343. In sentencing Sample to a
five-year term of probation on the rationale that such a
sentence would allow him to repay his victims, the district
court essentially sentenced Sample based on his income. We
conclude that this sentence was unreasonable. Exercising
jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. §
3742(b), we reverse and remand for resentencing.
began working as a licensed investment advisor and registered
broker in 1995. He worked for several large brokerage firms
and was recognized as a top advisor. In 2006, Sample began
operating the Vega Opportunity Fund (the "Vega
Fund"). One year later, in 2007, he closed the fund
after it had lost sixty-five percent of its value. Sample had
been diverting funds invested in the Vega Fund for his own
personal expenses, and had been providing investors with
false account statements and quarterly updates on their
closing the Vega Fund, Sample moved from Chicago, Illinois,
to Albuquerque, New Mexico. In October of 2009, he began a
hedge fund called the Lobo Volatility Fund, LLC (the
"Lobo Fund"). He reverted to form. In a scheme
similar to that perpetrated on investors in the Vega Fund,
Sample provided false monthly statements showing appreciation
in value, engaged in misleading email correspondence about
market strategies, and provided false tax reports to Lobo
Fund investors. All the while, Sample diverted a total of $1,
086, 453.62 from investors for his personal use.
December of 2015, Sample was charged with one count of
defrauding and swindling in violation of 18 U.S.C. §
1341 and two counts of wire fraud, in violation of 18 U.S.C.
§ 1343. He pled guilty to all charges.
sentencing, the government requested a sentence at the low
end of Sample's Guidelines range, which was 78 to 97
months' imprisonment. It argued that the impact upon
Sample's victims had been profound: some lost their
entire life savings, others were unable to retire as planned,
and many expressed profound emotional distress as a result of
Sample's betrayal. Sample's conduct was cast by the
government as selfish, callous, and dishonest. The government
referenced his attempts to convince investors to testify for
him before the Securities and Exchange Commission and in his
criminal case as evidence of his selfishness.
government noted Sample's previous unadjudicated conduct
in Illinois, regarding the Vega Fund, now imported to New
Mexico, and argued that Sample's betrayal of his
fiduciary obligations and the trust placed in him as a
financial professional demanded a significant sentence. It
reasoned that Sample's sentence should reflect the
seriousness of white collar crime and deter other financial
professionals from similar conduct. Although the government
acknowledged that less prison time would aid in victim
restitution, restitution was unlikely to occur because Sample
had filed a petition in bankruptcy. Even were he able to
enhance the opportunity for restitution, the government urged
Sample should serve the same prison time for his crimes as
another defendant with a lower earning capacity would suffer.
contrary, Sample argued that he should receive consideration
for probation based on his unblemished record in the
securities industry before 2008, his charity and volunteer
work during that time, and his previous financial support of
his family and friends. Sample construed his crimes as an
aberration resulting from stress. That stress arose from, in
part, the 2008 financial crisis, the collapse of his
financial practice, his divorce, acceptance of his gay
identity, and his move to New Mexico. He began using alcohol,
cocaine, and ecstasy, which he claimed contributed to his
reckless behavior. Essentially, Sample rationalized that he
swindled his clients in order to provide for his family and
entertain his friends. He sought acknowledgement that at the
time of sentencing, he was gainfully employed, engaged, and
was free of drugs and alcohol. Continued employment with a
six-figure annual income, Sample told the court, would allow
him to make significant restitution payments to his former
Sample's sentencing, the district court acknowledged that
Sample's crimes were "quite shameful" and
indicated that it was ignoring Sample's statements as the
usual "right things" most defendants mouthed at
sentencing. The court chose instead to focus on the impact
that the crimes had upon the victims. Every defrauded
investor "wants their money back," said the court.
"A prison term would end the current job that you have,
with no guarantee that you would have this job or one like it
when you got out of jail," the court ...