10 Years Later, Man Convicted in $44M Ponzi Scheme Wants Sentence Tossed

MIAMI (CN) – The lawyer for a Florida man convicted of a $44 million currency-exchange investment scheme told an 11th Circuit panel Thursday that a lower court was “just blowing off” case precedent when it refused to grant an evidentiary hearing on a motion to vacate his sentence. 

Michael J. Riolo has tried and failed repeatedly to get the Southern District of Florida to vacate his fraud sentence on the grounds that he was misled to believe his plea deal would limit his prison term to 10 years. 

Riolo, who was accused of producing bogus financial statements to his investors and siphoning off money they entrusted to him, claims he pleaded guilty because he received assurances from his past defense counsel that federal prosecutors agreed to recommend a maximum 97-month prison term. 

He says he was blindsided back in 2009 when a probation office, not prosecutors, submitted a recommended sentence range of 235 to 293 months. Though he acknowledged during a 2009 plea colloquy that the probation office would be involved in the sentencing recommendation, he now says he believed government prosecutors controlled that process.  

After hearing from victims who had lost their life savings in Riolo‚Äôs fraud, a Florida judge sentenced him to 293 months, roughly 24 years. 

Riolo is housed at Coleman Low Federal Correctional Institution in Sumter County, about halfway through his prison term. 

In his latest effort to nix the sentence, now on appeal in the 11th Circuit’s Miami division, Riolo and his attorney Bryan DeMaggio say the lower court improperly denied him an evidentiary hearing and failed to consider affidavits he presented. 

DeMaggio told the appeals court Thursday that Southern District officials were “totally just blowing off this court’s precedent” in their handling of Riolo’s section 2255 motion to vacate.

An affidavit from Riolo’s past bankruptcy attorney — which supposedly substantiates the alleged legal missteps in advising Riolo on the plea deal —  did not appear in a list of documents that a magistrate reviewed while considering Riolo’s motion, he claims.

And the lower court “made no factual findings” regarding the affidavits, according to DeMaggio. 

The government’s appellate counsel bit back by recalling the extended plea exchange between Riolo and the criminal court judge before Riolo was sentenced. 

The old court record shows the criminal case judge had advised Riolo at length about uncertainties in the sentencing process. He warned Riolo that no matter what his attorneys had advised or suggested the prison term might be, the actual sentence might turn out much longer. 

“So do you understand until we go through that entire [sentencing] procedure … no one knows for sure what the correct advisory guideline sentencing range will be for your case, and no one knows for sure what the actual sentence will be for your case?” the judge asked during the plea colloquy a decade ago.

Riolo told the judge he understood all those uncertainties. 

At the Thursday hearing, the government’s appellate counsel said, “If this very thorough colloquy wasn’t enough, it’s hard to imagine what would suffice.”

It is unclear when the 11th Circuit panel will issue a ruling in the case.

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