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Law360 (April 3, 2020, 4:59 PM EDT ) An Illinois federal court on Friday denied former investment manager and convicted fraudster Shawn Baldwin's bid to be released from prison over COVID-19 fears, finding he didn't have a compelling medical reason to enjoy home confinement ahead of his sentencing.
Judge Matthew F. Kennelly said the prison where Baldwin is housed is currently locked down and taking appropriate measures to contain the spread of the novel coronavirus. No facilities in the Northern District of Illinois have any confirmed COVID-19 cases yet, he added.
"The court is aware of the risk that detention facilities face when individuals become ill especially due to an infectious disease and closely monitors the situation at every facility at which detainees are housed in this district," Judge Kennelly wrote.
Baldwin faces 27 years in prison for blowing around $10 million gathered from at least 15 investors on personal expenses and Ponzi payments. He argued the lockdown at the Chicago Metropolitan Correctional Center, where he is jailed, prevents him from conferring with counsel ahead of his sentencing, scheduled for May.
The MCC is not permitting outside visitors for nearly three weeks, is quarantining new admissions and is providing medical treatment to prisoners, according to Judge Kennely's order.
Judge Kennelly said he could simply push Baldwin's sentencing hearing to a later date if the coronavirus pandemic truly prevents him from adequately preparing.
"In addition, defendant cites no factors particular to him that indicate that he is at a greater risk of serious harm from the coronavirus," Judge Kennelly noted, adding that Baldwin was deemed a possible flight risk after his conviction.
Baldwin, an occasional TV commentator and subject of several glossy magazine profiles detailing his supposed investment prowess, was found guilty of seven counts of wire fraud for bilking investors and corporate lenders in February 2019.
From 2006 to 2017, Baldwin claimed to be a successful financier and entrepreneur and defrauded more than 20 victims, including friends and acquaintances, with promises to invest on their behalf in equities or in his own businesses, according to the government.
Baldwin instead used the money to line his pockets and pay earlier investors while making the rounds as a commentator on CNBC and CNN, the government said. At the height of his popularity, he was featured in a BlackBerry ad, and his site once featured a photo of him with President Barack Obama.
Baldwin started getting questions about his dealings as early as 2005, and he was later disciplined by the National Association of Securities Dealers, which expelled his firm and banned him from the industry for two years, according to court documents.
The Illinois secretary of state permanently barred him from selling securities or giving investment advice in the state, saying he had misled and stolen from investors.
In his sentencing memorandum, Baldwin said the failure of his firm was not tantamount to fraud. He also claimed the government's calculation of the fraud amount was inflated by $5.5 million. A 27-year sentence would be "a serious injustice," Baldwin said, asking for a significantly lower term.
Prosecutors, however, said in their memorandum that Baldwin deserved between 21.8 and 27.2 years because he was a serial liar who deceived investors "with no hesitation and with no remorse."
Counsel for Baldwin did not immediately respond to a request for comment Friday, nor did the U.S. Attorney's Office for the Northern District of Illinois.
Baldwin is represented by Carolyn P. Gurland, Thomas Cull and Chris Jeske of White & Case LLP.
The government is represented by John R. Lausch Jr., Matthew M. Getter, Heidi Manschreck and Michelle Petersen of the U.S. Attorney's Office for the Northern District of Illinois.
The case is U.S. v. Baldwin, case number 1:17-cr-00787, in the U.S. District Court for the Northern District of Illinois.
--Additional reporting by Stewart Bishop. Editing by Jack Karp.
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