Federal Trade Commission (FTC) (CLOSED)
Most Recent Update 8/3/06 (See end of document)
United States v. Vaughan, Crim. No. 01-20077-01-KHV (D. Kansas)
8/28/01 Update:
The Consumer Protection Branch of the United States Department of
Justice, in coordination with the Federal Trade Commission ("FTC"),
conducted a nationwide investigation into conduct by Dennis W. Vaughan,
III., that amounted to criminal contempt of a court order for the United
States District Court for the District of Kansas. That order, entered
on January 7, 1998, banned Mr. Vaughan from promoting, offering and
selling business ventures and required him to notify the FTC within
30 days of changing his business or employment.
On June 26, 2001, Mr. Vaughan was indicted on four charges of criminal
contempt of court. The indictment was sealed (i.e., not made public)
until July 18, 2001, when the indictment was unsealed. Mr. Vaughan voluntarily
surrendered and appeared for his initial appearance and arraignment
in Kansas City, Kansas, on July 26, 2001. At that hearing, he pled not
guilty and was released on $100,000 bond. Among other conditions of
release, Mr. Vaughan was required to turn in his passport.
According to the charges against him in the indictment, Mr. Vaughan
promoted, offered and sold business ventures on behalf of Government
Careers Center, Inc., to numerous consumers across the country from
approximately January 1999 to February 2000, and sold business ventures
on behalf of Government Careers Center of Greater Philadelphia, L.L.C.,
to consumers in Pennsylvania in approximately September 1999. In addition,
the indictment charges Mr. Vaughan with changing his business and employment
on at least two occasions without notifying the FTC.
The next scheduled event in this matter is a hearing on pre-trial motions,
set for September 24, 2001.
9/25/01 Update:
On August 30, 2001, the defendant filed a motion to dismiss the Indictment,
to which the Government responded on September 13, 2001. A hearing on
that motion was held on September 24, 2001. The Court heard argument
from the defense and Government, and took the matter under advisement.
The trial date in this matter has been set for November 7, 2001, at
9:30 a.m.
It should be remembered that an indictment is not evidence of criminal
activity, and all defendants are presumed innocent unless and until
proven otherwise.
10/29/01 Update:
On October 18, 2001, Judge Kathryn H. Vratil issued a Memorandum and
Order denying Mr. Vaughan's motion to dismiss the indictment. In doing
so, Judge Vratil stated that the government had set forth sufficient
allegations that the defendant willfully violated the court order, and
that the court order was clear and specific.
On October 24, 2001, the Court granted the defendant's request to postpone
the trial in this matter to January 22, 2002, at 9:30 a.m.
12/01 Update:
No change in status from 10/29/01 Update above.
1/02 Update:
On January 22, 2002, the defendant pled guilty to the four counts of
criminal contempt of court charged in this case. Mr. Vaughan admitted
that he had sold business ventures in violation of a court order. He
also pled guilty to four counts of a related case, charging him with
conspiracy to commit wire fraud and money laundering. A consolidated
sentencing proceeding, at which the defendant will be sentenced for
both cases, will be held on April 8, 2002.
The U.S. Probation Officer is required to prepare a presentence investigation
report which includes a section assessing the financial, social, psychological,
and medical impact of the crime on any individual against whom the offense
was committed. A package of materials will be sent to each person identified
by the government as a victim of the offense. If you receive such materials,
please complete them as soon as possible and return them to the government
representative identified in the paperwork.
3/02 Update:
On March 7, 2002, the government requested that the Court postpone
the defendant's sentencing proceeding to allow more time for the Probation
Officer to complete the pre-sentence investigation report. The Court
granted that request, and the sentencing has been rescheduled for May
6, 2002 at 10:30 a.m.
5/1/02 Update:
On April 26, 2002, the defendant's attorney filed a motion to withdraw
his appearance as an attorney in the case and a motion by the defendant
to have new counsel appointed by the Court to represent him. On April
30, 2002, the government opposed the defendant's and his attorney's
motions and asked that the Court set a hearing to cross-examine the
defense witnesses. The Court granted the government's request for a
hearing, which will be held on May 20, 2002.
The government also requested that the Court postpone the defendant's
sentencing proceeding to allow time for the previously-mentioned hearing
to take place and for the Probation Officer to complete the pre-sentence
investigation report. The Court granted that request, and the sentencing
has been rescheduled for June 17, 2002 at 10:30 a.m.
5/28/02 Update:
On May 20, 2002, a hearing was held in connection with the request
of the defendant's attorney to withdraw his appearance and the defendant's
motion to have new counsel appointed. The Court denied both motions.
Sentencing is scheduled for June 17, 2002 at 9:30 a.m.
6/4/02 Update:
On June 3, 2002, the defendant requested that the Court postpone the
sentencing hearing to allow more time for review of the pre-sentence
investigation report. The government did not oppose the defendant's
request. If the defendant's request is granted, the new date and time
for the sentencing hearing will be posted on this page.
6/17/02 Update:
On June 12, 2002, the Court rescheduled the defendant's sentencing
hearing for July 16, 2002, at 9:30 a.m.
7/16/02 Update:
On July 12, 2002, the defendant requested that the Court postpone the
sentencing hearing to allow more time for review of the revised pre-sentence
investigation report. The Court granted the defendant's request, and
the new sentencing date is August 5, 2002, at 9:30 a.m.
8/2/02 Update:
On August 1, 2002, the defendant moved the Court to withdraw his guilty
pleas and to postpone his sentencing hearing. The government opposed
both motions. As of Friday, August 2, 2002, the defendant's sentencing
hearing remained scheduled for August 5, 2002, at 9:30 a.m. in the Robert
Dole Courthouse, Kansas City, Kansas, Judge Kathryn H. Vratil's courtroom.
8/6/02 Update:
On August 5, 2002, the Court held a hearing on the defendant's motion
to withdraw his guilty plea. After hearing arguments from both sides,
the Court denied the defendant's motion. The Court then held a sentencing
hearing at which both sides presented arguments regarding the appropriate
sentence. After hearing these arguments, the Court ordered the defendant
to serve 84 months in prison, three years on supervised release, and
to pay approximately $13,000,000, in restitution to the victims of his
offenses. Under federal law, restitution is ordered in criminal cases,
in general, on the basis of losses a defendant causes and without regard
to the defendant's ability to pay the restitution. See 18 U.S.C. Sec.
3664(f)(1)(A), which provides: "In each order of restitution, the court
shall order restitution to each victim in the full amount of each victim's
losses as determined by the court and without consideration of the economic
circumstances of the defendant."
The Court also ordered that the U.S. Marshals immediately take the
defendant into custody to begin serving his prison term, after the Court
learned that the defendant had violated the terms of his supervised
release by leaving the jurisdiction without the permission of the Court.
Any payments made by Vaughan will go to the Court and will then be
shared equally among the victims. Any amount due a victim shall be reduced
by any amount the victim recovers for the same loss from any other source.
If you have any questions regarding the restitution order, please contact
the Probation Officer.
10/02 Update:
Vaughan filed a Notice of Appeal with the Court of Appeals for the
Tenth Circuit. Dkt. Nos. 02-3307 & 02-3312. No briefing schedule
has yet been established.
2/03 Update:
Appeal in the Tenth Circuit still ongoing.
6/03 Update:
Appeal in the Tenth Circuit still ongoing.
11/03 Update:
Appeal in the Tenth Circuit still ongoing.
2/04 Update:
Appeal in the Tenth Circuit still ongoing.
9/04 Update:
Appeal in the Tenth Circuit still ongoing.
12/21/04 Update:
The Tenth Circuit Court of Appeals affirmed Vaughan’s sentence, and remanded the case to the district court for correction of a clerical error.
4/05 Update:
Appeal in the Tenth Circuit still ongoing.
9/9/05 Update:
Vaughan filed a motion to vacate his sentence. The government responded on January 31, 2006.
11/22/05 Update:
Appeal in the Tenth Circuit still ongoing.
4/3/06 Update:
The district court denied Vaughan’s motion to vacate.
4/4/06 Update:
Vaughan noticed an appeal with the Tenth Circuit Court of Appeals.
7/11/06 Update:
Vaughan’s appeal is ongoing.
8/3/06 Update:
On August 1, 2006, Vaughan's appeal was procedurally terminated after he failed to file a brief.
The U.S. Bureau of Prisons website provides information on Dennis Vaughan's release date.
