As most of the investors are aware from previous court filings and website information, there has been pending before the 11th Circuit Court of Appeals an important issue relating to the disposition of David Svete’s wire and mail fraud convictions. You may recall that a three-judge panel of the 11th Circuit previously reversed the four mail and wire fraud convictions based upon the longstanding judicial decision of the 11th Circuit in United States v. Brown, 79 F.3d 1550 (11th Cir. 1996).
In Brown, the 11th Circuit decided that in order to be convicted of mail fraud, the defendant must have participated in a scheme that was reasonably calculated to deceive persons of ordinary prudence and comprehension. The Brown decision was contrary to the pre-approved jury instructions for use in the 11th Circuit. Notwithstanding this fact, however, the three-judge panel of the 11th Circuit held that the trial court in Mr. Svete’s case should have given the requested instruction by the defense, consistent with the Brown decision. The failure to do so warranted reversal of the four mail/wire fraud convictions against Mr. Svete.
Both the Government and Mr. Svete then sought petitions for rehearing. These petitions were both granted, and oral argument was heard in October 2008 before all of the judges for the 11th Circuit Court of Appeals in what is known as an en banc proceeding.
On February 2, 2009, the Court of Appeals rendered its decision, finding that it was necessary they overturn their longstanding decision in United States v. Brown. The en banc Court specifically found that the imposition of a prudent investor standard in the context of mail/wire fraud was inconsistent with both the statute and more recent United States Supreme Court decisions. The Court concluded that the trial court in Mr. Svete’s case did not in fact err when it delivered the previously approved jury instruction. The Court remanded the case to the three-judge panel of the 11th Circuit for further proceedings and a formal opinion.
The net effect of this recent decision, a copy of which is attached, is that Mr. Svete’s mail and wire fraud convictions will be reinstated. It is also anticipated that since the three-judge panel previously addressed all the other alleged errors which were the subject of Mr. Svete’s appeal of his convictions, and found them to be without merit, this panel will affirm all of the other convictions against Mr. Svete. Thus, the recent decision of the 11th Circuit was clearly good news for the investors of LifeTime.