CEDAR RAPIDS – A man who defrauded investors out of more than $1,000,000 appealed his sentenced of more than four years in federal prison and lost.
Jeffrey J. Kinseth, age 58, from Cedar Rapids, Iowa, received a 51-month prison term after a July 11, 2013, guilty plea to one count of wire fraud. He then appealed the sentence, arguing that his sentence is substantively unreasonable.
Kinseth argued that the district court placed undue weight on the nature and effect of his crime in imposing his sentence without considering a number of mitigating factors, including the unlikelihood that he will recidivate, his lack of criminal history, and the “aberrant” nature of his crime. The district court was not persuaded by these arguments and instead gave particular weight to Kinseth’s failure to make efforts to repay his victims prior to sentencing in addition to the “horrible impact” of his crime. The appeals court ruled that the district court did not err in considering these factors nor assigning them greater weight than others in determining an appropriate sentence, and upheld his 51-month sentence.
According to court documents, between approximately March 2008 and September 2009, Kinseth used his company, Virtual Vision, to solicit and accept hundreds of thousands of dollars from at least eleven individual investors. Kinseth represented to the investors that they would receive substantial returns knowing in many instances that he would not invest the money and would use it instead to make payments to earlier investors. Kinseth also used at least $405,295 of investor funds to pay personal bills and expenses, such as his monthly mortgage payment. Additionally, the investor funds that Kinseth actually traded consistently sustained losses. Kinseth would at times conceal losses and misappropriation by issuing statements to investors that falsely reflected profits. Kinseth also sent several email messages to investors falsely promising them returns on their money. In all, Kinseth’s conduct resulted in total victim losses of over $1,000,000.
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