USA v. Maldonado-Vargas

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
UNITED STATES OF AMERICA 	)
)
v. 	) 	No. 3:16-cr-661-01-JAW
)
CARLOS MALDONADO-VARGAS 	)
ORDER ON DEFENDANT’S MOTION RE: AMENDEMENT 821
The court dismisses without prejudice an inmate’s motion to reduce his
sentence 	under 	Amendment 	821 	of 	the 	United 	States 	Sentencing 	Guidelines,
concluding that the defendant is ineligible for a reduction in accordance with
U.S.S.G. § 4C1.1 because he caused substantial financial hardship under U.S.S.G.
§ 4C1.1(6).
I. 	BACKGROUND
A. 	Procedural History
On October 20, 2016, a federal grand jury for the District of Puerto Rico issued
a sixteen-count indictment against Carlos Maldonado-Vargas, alleging that he
engaged in securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff(a) and bank
fraud in violation of 18 U.S.C. § 1344(2). Indictment (ECF No. 1). On December 10,
2019, at the end of an eight-day trial, a federal jury convicted Mr. Maldonado on all
sixteen counts. 	Jury Verdict (ECF No. 117). 	On July 15, 2021, the United States
Probation Office completed a comprehensive, revised Presentence Investigation
Report (PSR).1 Presentence Investigation Report (ECF No. 156) (PSR).
1 	On July 20, 2021, then Chief Judge Gustavo Gelpí reassigned this case to this Judge. Order
(ECF No. 160).
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On September 12, 2022, the Court held a sentencing hearing at the United
States District Court for Puerto Rico, Sentencing Tr. at 1-114, and imposed sentence.
At the sentencing hearing, the Court imposed a six-level enhancement under
U.S.S.G. § 2B1.1(b)(2)(C) “because the offenses resulted in substantial financial
hardship to twenty-five or more victims.” 	Findings Affecting Sentencing at 1. 	The
Court ordered Mr. Maldonado incarcerated for 135 months on all counts, placed him
on supervised release for three years on Count One and for five years on Counts Two
through 	Sixteen, 	imposed 	a 	total 	special 	assessment 	of 	$1,600, 	and 	ordered
restitution in the total amount of $1,986,734.26. J. (ECF No. 193); Am. J. (ECF No.
205). It imposed no fine. Id.
On September 21, 2022, Mr. Maldonado appealed the Court’s securities fraud
conviction and sentence. 	Notice of Appeal (ECF No. 195). 	On November 14, 2025,
the Court of Appeals for the First Circuit affirmed his conviction and sentence.2
United States v. Maldonado-Vargas, 159 F.4th 69, 90 (1st Cir. 2025). In its opinion,
the First Circuit rejected Mr. Maldonado’s claim that the Court erred in calculating
the amount of the loss and determining the number of victims. Id. at 85-87.
On December 17, 2025, Mr. Maldonado filed a motion seeking to reduce his
sentence. Mots. Re: Amend. 821 (ECF No. 215) (Def.’s Mot.). On December 19, 2025,
the Government filed its opposition. 	The United States of America’s Resp. in Opp’n
to Mot. re: Amend. 821 (ECF No. 218) (Gov’t’s Opp’n). 	On March 10, 2026, the
2 	At the Government’s request, the First Circuit vacated Mr. Maldonado’s bank fraud
convictions but affirmed his securities fraud conviction and sentence, including the Court’s restitution
order. Maldonado-Vargas, 159 F.4th at 90.
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Defendant filed a motion for status, seeking an estimated timeframe for the Court’s
decision. Mot. (ECF No. 220).
B. 	The Crimes
Carlos 	Maldonado 	was 	the 	principal 	and 	owner 	of 	Business 	Planning
Resources International Corporation (BPRIC), a corporation organized under the
laws of the commonwealth of Puerto Rico and the state of Florida. PSR ¶¶ 6, 13. As
early as 2007, Mr. Maldonado began soliciting and receiving money transfers from
investors into the BPRIC bank account, which he promised to invest on their behalf.
PSR ¶¶ 12-13. Mr. Maldonado, however, did not invest these funds as promised and
instead diverted them for his own personal use, and when his original investors
sought returns, he paid them not with returns from investments but with new money
from new investors. 	PSR ¶ 13. 	Mr. Maldonado, thus, perpetrated a classic “Ponzi
scheme,” where funds from new investors are used to pay previous investors in the
absence of any legitimate investments. PSR ¶¶ 13, 18, 25.
To carry out his Ponzi scheme, Mr. Maldonado used a bank account at Banco
Popular de Puerto Rico, of which he was the only authorized user, as the repository
of investments BPRIC received. PSR ¶ 23-25. The investments that Mr. Maldonado
and his promoters solicited were paid to the Banco Popular de Puerto Rico bank
account through financial institutions whose deposits were insured by the Federal
Deposit Insurance Corporation, including Banco Popular de Puerto Rico, First Bank,
BBVA, PNC Bank, Scotiabank, Doral Bank USAA Federal Savings Bank, Western
Bank, and Banco Santander. 	PSR ¶ 22. 	Between May 7, 2007 and December 23,
2010, 	ten 	investors 	sent 	funds 	totaling 	$561,133.21 	through 	their 	financial
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institutions to the BPRIC bank account at Banco Popular de Puerto Rico. PSR ¶ 25.
Mr. Maldonado’s false and fraudulent representations defrauded Banco Popular de
Puerto Rico and the other financial institutions through the loss or transfer of monies
under their custody and control. PSR ¶ 26.
Mr. Maldonado used promoters to solicit so-called Investment Contracts for
individual investors to invest their money with BPRIC. 	PSR ¶ 15. 	Each promoter
received a commission for each BPRIC Investment Contract that the promoter
induced. Id. The Investment Contracts promised investors returns from 15% to 100%
and guaranteed the principal amount of the investment if the client did not make the
maximum productive development. 	PSR ¶ 17. 	From February 23, 2011 through
December 16, 2011, ten investors signed Investment Contracts and invested a total
of $482,000 in BPRIC. PSR ¶ 19.
Mr. Maldonado represented that the investment proceeds would be invested in
various 	companies, 	including 	Pet 	Card 	Systems, 	Inc., 	Glorimar 	Fashions 	and
Tailoring, LLC, Global Business Insurance Agency, Inc., and Datavos Corporation.
PSR ¶ 16. Mr. Maldonado failed to disclose that the investment funds would be used
to buy and trade stocks and commodities on a Scottrade account, other personal
trading accounts, and with Forex Capital Markets, LLC. 	Id. 	Mr. Maldonado also
failed to disclose that he would divert these investment funds for his personal use,
including for personal travel, rent, entertainment, and automobile loan payments.
PSR ¶¶ 13, 16.
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Upon receiving these investment funds, to promote the investments and give
investors a false sense of security that their investments were safe and performing
as promised, Mr. Maldonado distributed lulling payments to investors. 	PSR ¶ 18.
These payments were not actual returns on investment but instead were diverted
from new investors’ funds. Id.
In 2012 and continuing until 2016, as Mr. Maldonado and BPRIC provided
neither the promised returns nor their principal investment to investors, Mr.
Maldonado communicated with investors through telephone and mass emails, using
his Gmail, Yahoo!, and Hispano Grupo accounts. 	PSR ¶ 20. 	In these mass and
personalized emails, Mr. Maldonado attempted to deter investors from taking legal
action and promised to return money through investments in Chinese bonds, a
Brazilian gold mine, or recycling company machinery. PSR ¶ 21. During the life of
this scheme, Mr. Maldonado extracted more than $6,000,000 from investors for
fraudulent investments. PSR ¶ 35.
The PSR contained a section addressing the devastating impact on the victims
of Mr. Maldonado’s crime. 	PSR ¶¶ 37-79. 	All the victims were individuals, few
appear to have substantial assets, many lost their life savings, inheritances, and
retirement funds. Id. The losses ranged from a low of $7,000 taken from the victim’s
savings account for her children, id. ¶ 67, to a high of $1,000,000 from a linked but
indirect loss. Id. ¶ 62. The Probation Office (PO) estimated that there were “at least
50 [victims] outside the Indictment, plus the 14 included in the Indictment,” and
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noted that the United States Attorney’s Office’s Victim and Witness Coordinator
interviewed “in excess of sixty victims.” Id. ¶ 39.
The PO described in detail the severe financial hardship suffered by many of
the victims of Mr. Maldonado’s crime. 	Id. ¶¶ 41-79. One woman lost all the money
she had inherited from her deceased husband, resulting in a “total wipeout” of her
assets and forcing her to rely only on social security, ultimately causing her to file for
bankruptcy. Id. ¶ 42. One man had to delay his retirement from 2020 to 2025 due to
Mr. Maldonado’s crime. Id. ¶ 46. One man has attempted suicide four times and has
been diagnosed with major depressive disorder due to losing $50,000 from Mr.
Maldonado’s crime. Id. ¶ 51. One woman lost $100,000 of the money she had received
from her husband’s life insurance when he committed suicide, causing her to have
trouble getting credit, curtailing her lifestyle, and having as little as $200 in her bank
account. Id. ¶ 57. One man invested his entire retirement savings of $150,000 with
Mr. Maldonado and ended up losing the entire sum and having to seek psychiatric
treatment due to the loss. Id. ¶ 61. At the advice of her father, one victim took $7,000
from her children’s savings account to invest with Mr. Maldonado, causing her to lose
the entire amount and resulting in tension in her relationship with her father. 	Id.
¶ 67. 	One man lost $200,000 that he had saved over thirty-three years for his
retirement, resulting in his inability to meet his monthly expenses. 	Id. ¶ 72. 	One
woman lost $100,000, which she was using to pay medical bills for a serious illness,
and she has had to switch from private to government medical insurance and to rely
on church donations to pay her utilities and food. Id. ¶ 76. These are only examples.
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Mr. Maldonado harmed each of his victims in different, but individually significant
ways. Id. ¶¶ 41-79.
II. 	THE PARTIES’ POSITIONS
A. 	The Defendant’s Motion
Mr. Maldonado explains that Amendment 821 to the Sentencing Guidelines,
made retroactive by Congress, creates a new U.S.S.G. § 4C1.1 guideline that allows
for a two-point reduction for zero-point offenders—defendants with no criminal
history points as calculated in the PSR. 	Def.’s Mot. at 1. 	Mr. Maldonado contends
that because he had no prior criminal history points, he is a zero-point offender thus
making him eligible for a modification of sentence under 18 U.S.C. § 3582(c)(2),
relating to Amendment 821. Id.
B. 	The Government’s Opposition
The Government opposes Mr. Maldonado’s motion. Gov’t’s Opp’n at 1. While
it agrees that Mr. Maldonado is a zero-point offender and Amendment 821 is
retroactive, the Government explains that Mr. Maldonado “is nonetheless ineligible
for 	an 	adjustment 	under 	U.S.S.G. 	§ 4C1.1(a)(6) 	because 	he 	personally 	caused
substantial financial hardship” to at least the 34 victims detailed in the PSR. Even
if Mr. Maldonado were eligible under U.S.S.G. § 4C1.1, the Government would still
oppose a sentence reduction under 18 U.S.C. § 3553(a) factors.
III. 	DISCUSSION
A. 	The Court’s Guideline Findings at Sentencing
At 	sentencing 	on 	September 	12, 	2022, 	the 	Court 	made 	its 	guidelines
calculations and determined that Mr. Maldonado’s total offense level was thirty-three
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and fixed his criminal history category as Category I, resulting in a guideline
sentence range of 135 to 168 months and, one to three years of supervised release on
Count One and two to five years on Counts Two through Sixteen, and a fine from
$35,000 to $5,000,000. 	Statement of Reasons at 1 (ECF No. 56). 	In fixing the
guideline range, the Court found that the offenses had resulted in a substantial
financial hardship to 25 or more victims, causing six levels to be added to Mr.
Maldonado’s guideline calculations. Tr. Sentencing Hr’g 87:5-7 (ECF No. 204). The
Court ordered Mr. Maldonado incarcerated for 135 months on all counts, placed him
on supervised release for three years on Count One and for five years on Counts Two
through 	Sixteen, 	imposed 	a 	total 	special 	assessment 	of 	$1,600, 	and 	ordered
restitution in the total amount of $1,986,734.26. J.; Am. J.
B. 	Amendment 821 and United States v. Dillon
On April 27, 2023, the United States Sentencing Commission voted to publish
Amendment 821 to the Sentencing Guidelines; this new version of the Guidelines
took effect on November 1, 2023. 	Def.’s Mot. at 1. 	Amendment 821 added § 4C1.1,
which, in relevant part, allows for a two-level reduction for so-called zero-point
Offenders. See U.S.S.G. § 4C1.1(a) (2023) (amended 2024). To be eligible for such a
reduction, a defendant must “meet [ ] all of the following criteria” listed in U.S.S.G.
§ 4C1.1(a). 	Id. 	Mr. Maldonado posits that he qualifies for the two-level reduction
under U.S.S.G. § 4C1.1(a), which he argues should be retroactively applied to reduce
his sentence pursuant to 18 U.S.C. § 3582(c)(2). Def.’s Mot. at 1.
In United States v. Dillon, 560 U.S. 817 (2010), the United States Supreme
Court described the basis for a sentence reduction under 18 U.S.C. § 3582(c)(2) as a
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“two-step inquiry.” Id. . at 826. “At step one, § 3582(c)(2) requires the court to follow
the Commission’s instructions in § 1B1.10 to determine the prisoner’s eligibility for a
sentence modification and the extent of the reduction authorized.” 	Id. at 827. 	“At
step two of the inquiry, § 3582(c)(2) instructs a court to consider any applicable
§ 3553(a) factors and determine whether, in its discretion, the reduction authorized
by reference to the policies relevant at step one is warranted in whole or in part under
the particular circumstances of the case.” Id.
C. 	U.S.S.G § 4C1.1 is Unavailable
As instructed in Dillon, beginning with U.S.S.G. § 1B1.10, the Guidelines
provide that “[a] reduction in the defendant’s term of imprisonment is not consistent
with 	this 	policy 	statement 	and 	therefore 	is 	not 	authorized 	under 	18 	U.S.C.
§ 3582(c)(2)” if the amendment is not “applicable to the defendant” or “does not have
the 	effect 	of 	lowering 	the 	defendant’s 	applicable 	guideline 	range.” 	U.S.S.G.
§ 1B1.10(a)(2).
Under § 4C1.1(a)(6), a defendant is entitled to a zero-point offender reduction
only if he “did not personally cause substantial financial hardship.” 	U.S.S.G.
§ 4C1.1(a)(6). Application Note 3 states that in determining whether a defendant has
caused a substantial financial hardship, the sentencing court “shall consider, among
other things, the non-exhaustive list of factors provided in application Note 4(F) of
the Commentary to § 2B1.1.” Id. Application Note 3. Application Note 4(F) provides:
In determining whether the offense resulted in substantial financial
hardship to a victim, the court shall consider, among other factors,
whether the offense resulted in the victim—
(i) becoming insolvent;
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(ii) filing for bankruptcy under the Bankruptcy Code (title 11,
United States Code);
(iii) suffering substantial loss of a retirement, education, or other
savings or investment fund;
(iv) making substantial changes to his or her employment, such
as postponing his or her retirement plans;
(v) making substantial changes to his or her living arrangements,
such as relocating to a less expensive home; and
(vi) suffering substantial harm to his or her ability to obtain
credit.
U.S.S.G. § 2B1.1 Application Note 4(F). A comparison between these criteria and the
impact of Mr. Maldonado’s crime on his victims compels the conclusion that he caused
substantial financial hardship to nearly all his victims. It is also true, however, that
“as a matter of law, courts are not strictly limited to considering the enumerated facts
under U.S.S.G. § 2B1.1 n.4(F) when determining whether a defendant has caused
substantial financial hardship.” United States v. Hanson, 124 F.4th 1013, 1017 (6th
Cir. 2025).
As the Government points out, despite not incurring criminal history points,
Mr. 	Maldonado 	was 	nonetheless 	ineligible 	for 	an 	adjustment 	under 	U.S.S.G.
§ 4C1.1(a)(6) 	because 	he 	personally 	caused 	substantial 	financial 	hardship.
Substantial 	financial 	hardship 	is 	“more 	than 	minimal 	or 	trivial” 	even 	if 	not
“devastating.” United States v. Minhas, 850 F.3d 873, 878, (7th Cir. 2017).
Furthermore, courts across the country have applied the § 2B1.1(b)(2)(C)
enhancement in situations similar to the facts in this case. United States v. Day, 117
F.4th 622, 626 (5th Cir. 2024) (a substantial financial hardship is a loss that
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significantly impacts the victim’s resources); United States v. George, 949 F.3d 1181,
1185 (9th Cir. 2020); United States v. Castaneda-Pozo, 877 F.3d 1249, 1252-53 (11th
Cir. 2017) (although monetary losses were minimal, the defendant’s actions made his
victims insecure in life’s basic necessities); United States v. Brandriet, 840 F.3d 558,
561-62 (8th Cir. 2016); United States v. Poulson, 871 F.3d 261, 268 (3d Cir. 2017)
(between 	a 	minimal 	and 	devastating 	loss, 	district 	courts 	have 	discretion 	in
determining whether there has been a substantial financial hardship).
In fact, the Court has already determined that Mr. Maldonado has caused
substantial financial hardship to his victims. 	At the sentencing hearing, the Court
imposed a six-level enhancement under U.S.S.G. § 2B1.1(b)(2)(C) because his offenses
resulted in “substantial financial hardship to twenty-five or more victims,” along with
a two-level enhancement under § 2B1.1(b)(10) because he used “sophisticated means”
to perpetrate his crimes. 	Id. ¶¶ 86-87. 	As the PSR details, Mr. Maldonado
perpetrated a Ponzi scheme for about five years, raising over five million dollars
($5,000,000) in Investment Contracts on behalf of BPRIC, from over one hundred
individuals, resulting in losses to investors exceeding three million and seven-
hundred thousand dollars ($3,700,000).” 	PSR ¶¶ 6, 12, 13, 14, 39. 	Many of Mr.
Maldonado’ victims were individuals who could ill afford to lose the money they
entrusted to him. Id. ¶¶ 41-79. As noted earlier, in Mr. Maldonado’s case, the First
Circuit rejected his challenge to the Court’s guideline finding that his offense resulted
in substantial financial hardship to twenty-five or more victims. Maldonado-Vargas,
159 F.4th at 85-87.
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D. 	Failing to meet step one, the Court does not examine the
second Dillon step
As § 4C1.1(a) requires a defendant to meet “all of the following criteria,” and
he fails to meet one of them, the amendment “does not have the effect of lowering the
defendant’s applicable guideline range.” 	U.S.S.G. § 4C1.1(a) (2024) (amending
U.S.S.G. § 4C1.1 (2023)); U.S.S.G. § 1B1.10(a)(2). As Mr. Maldonado cannot meet the
first step of the inquiry under Dillon, it is irrelevant whether he can meet the second.
Dillon, 560 U.S. at 827 (“Because reference to § 3553(a) is appropriate only at the
second step of this circumscribed inquiry, it cannot serve to transform the proceedings
under § 3582(c)(2) into plenary resentencing proceedings”).
IV. 	CONCLUSION
The Court DISMISSES without prejudice Carlos Maldonado-Vargas’ Motions
Re: Amendment 821 (ECF No. 215). 	The Court DISMISSES as moot Carlos
Maldonado-Vargas’ Motion for Status of Motion (ECF No. 220).
SO ORDERED.
/s/ John A. Woodcock, Jr.
JOHN A. WOODCOCK, JR.
UNITED STATES DISTRICT JUDGE
Dated this 16th day of March, 2026
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