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Parties Involved:
Steven M. Bolla
Appellant
United States of America
Appellee

Document Text:

Notice: This opinion is subject to formal revision before publication in the

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 19, 2003 Decided October 24, 2003

No. 02-3085

UNITED STATES OF AMERICA,

APPELLEE

v.

STEVEN M. BOLLA,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 02cr00196–01)

Amy B. Jackson argued the cause for appellant. With her

on the briefs were Robert P. Trout and John M. Fedders.

David B. Goodhand, Assistant U.S. Attorney, argued the

cause for appellee. On the brief were Roscoe C. Howard, Jr.,

U.S. Attorney, and John R. Fisher, Roy W. McLeese III,

Craig S. Iscoe, and Patricia A. Heffernan, Assistant U.S.

Attorneys.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #02-3085 Document #780485 Filed: 10/24/2003 Page 1 of 9
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Before: ROGERS and ROBERTS, Circuit Judges, and

SILBERMAN, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge ROBERTS.

ROBERTS, Circuit Judge: Under the Sentencing Guidelines,

punishment for certain economic crimes depends in part on

the value of the accompanying loss. Appellant Stephen M.

Bolla disputes the district court’s computation of the loss

associated with his filing a false Statement of Financial

Condition in connection with a Securities and Exchange Commission (SEC) civil action. Concluding that Bolla lied on his

financial statement to evade the maximum penalty possible in

the SEC action, the district court found an intended loss of

$90,000, and enhanced Bolla’s sentence accordingly. Bolla

argues that the district court did not have an adequate basis

for concluding that he intended such a loss, and should have

relied on actual loss instead — alleged to be a lower amount

yielding less of an enhancement. We conclude that Bolla

failed to preserve below the objection to the use of intended

loss that he now seeks to present, and hold that the district

court’s use of intended loss was not plain error. We accordingly affirm the judgment.

I. Background

In the fall of 1999, Bolla was under investigation by the

SEC for violating federal securities laws in connection with

his role as an investment adviser at Trustcap Financial

(Trustcap). He submitted a sworn financial statement dated

November 5, 1999 to the SEC, purporting to reflect his

financial condition as of October 1, 1999. Bolla filed this

statement in anticipation of a settlement agreement with the

SEC.

The financial statement required Bolla to disclose, inter

alia, the following: (1) all assets that he owned, possessed, or

controlled, regardless of whether legal title was held by an

intermediary; (2) all money transfers of $1000 or more in the

last five years; (3) all money or other income earned on a

monthly basis; and (4) all securities or commodities accounts

he controlled or in which he had a beneficial interest. Bolla

completed the financial statement and, as required, acknowledged that any material misstatements or omissions would be

punishable under 18 U.S.C. § 1001. That provision makes it

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a crime, in connection with any matter within the jurisdiction

of the Federal Government, to ‘‘knowingly and willfully TTT

make[ ] any materially false, fictitious, or fraudulent statement or representation.’’ 18 U.S.C. § 1001(a)(2). On the

financial statement, Bolla listed $21,345 in cash and $8000

worth of furniture and household goods. He failed, however,

to disclose $941,228 in cash and securities that he had placed

in his wife’s brokerage account, which he controlled through a

general power of attorney. He also failed to disclose the full

amount of his monthly gross income, numerous cash transfers, other accounts that he controlled at various financial

institutions, and the power of attorney he held with respect to

his wife’s brokerage account.

On February 5, 2000, Bolla submitted a sworn declaration,

under penalty of perjury, in support of his financial statement. The declaration confirmed that the financial statement

accurately reflected his financial condition as of October 1,

1999.

On May 30, 2000, the SEC filed its anticipated complaint

against Bolla in the United States District Court for the

District of Columbia, alleging that he had violated federal

securities laws in connection with his job at Trustcap. Bolla

and the SEC entered into a settlement agreement to resolve

the civil complaint. The allegations in the complaint carried a

maximum penalty of $100,000 per violation. Based on his

sworn financial statement, however, the SEC determined that

Bolla had a negative net worth and sought a penalty of only

$10,000. The district court, although troubled by the low

amount of the penalty, accepted the settlement agreement

after the SEC explained that Bolla’s financial statement

showed an inability to pay a higher amount.

Bolla subsequently pled guilty to the charge of making a

materially false, fictitious, or fraudulent statement to the

SEC by filing the false financial statement in violation of 18

U.S.C. § 1001. The district court sentenced Bolla pursuant

to U.S.S.G. § 2F1.1.1

 Under that Guideline, the district court

1 The district court originally sentenced Bolla under U.S.S.G.

§ 2B1.1 of the November 1, 2002 Sentencing Guidelines, which was

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must calculate the amount of loss involved to determine the

proper sentence. The Application Notes to the Guideline

explain that ‘‘if an intended loss that the defendant was

attempting to inflict can be determined, this figure will be

used if it is greater than the actual loss.’’ U.S.S.G. § 2F1.1

application note 8. The district court found that Bolla hid his

assets to evade the maximum possible fine he faced in the

SEC proceeding — $100,000. The court determined the

intended loss to be $90,000 — the $100,000 Bolla sought to

evade, less the $10,000 penalty he paid. Based on this loss

amount, the district court sentenced Bolla to twelve months in

prison,2

 and ordered him to pay a $20,000 fine and to make

restitution to the SEC in the amount of $90,000. Bolla

appeals the sentence.

II. Analysis

A. Intended Loss

Bolla argues that the government failed to prove the

amount of intended loss by a preponderance of the evidence,

and that the district court should have used an actual loss

figure, because the intended loss could not be determined.

in effect as of the date of sentencing. U.S.S.G. § 1B1.11(a) requires

courts to apply the Guidelines in effect at the time of sentencing.

Under U.S.S.G. § 1B1.11(b)(1), however, courts must apply the

Guidelines in effect on the date the offense was committed if using

the Guidelines in effect at the time of sentencing would yield a

longer sentence. U.S.S.G. § 2B1.1 yielded an offense enhancement

of eight. The Guideline in effect at the time of Bolla’s offense,

U.S.S.G. § 2F1.1(b), established an offense enhancement of six.

Thus, the Guideline used in the sentencing hearing produced a

longer sentence than the one in effect at the time of the offense.

The district court, therefore, conducted a second sentencing hearing

and properly applied U.S.S.G. § 2F1.1.

2 The loss amount of $90,000 yielded an offense enhancement of

six, which (combined with the base offense level of six and a two

point downward adjustment for acceptance of responsibility) provided an adjusted offense level of ten. An adjusted offense level of ten

corresponds to a six to twelve month sentence for a Category I

(first time) offender. See U.S.S.G. Sentencing Table.

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He contends that there was no evidence before the court that

he intended any particular loss — that ‘‘the government has

failed to come forward with any evidence of what Bolla

actually had in mind,’’ Reply Br. at 11 — and that the court

erred in filling that gap by inferring that he intended to avoid

the maximum penalty to which he was subject.

Bolla did not raise this objection below. See Fed. R. Crim.

P. 51. The sentencing transcript shows that Bolla’s counsel

primarily challenged the appropriate calculation of an actual

loss figure and never advanced the argument that the evidence failed to support the court’s finding that he intended to

avoid the maximum possible penalty of $100,000. This despite the fact that the government’s sentencing memorandum

proposed using that figure, and the district court began the

sentencing hearing with the following:

It is my conclusion that the defendant intended to conceal as much of his net worth as possible as might be

[vulnerable] to the maximum penalty that the SEC could

levy and that sum was $100,000. So, that is the loss

figure that I am tentatively prepared to utilize unless

either of you have authority which tells me that I must

utilize some other figure.

Sentencing Tr. at 2–3. Counsel responded with an analysis of

the calculation of actual loss, but never objected to the district

court’s theory of intended loss. See id. at 3–9. In fact,

counsel stated later in the hearing, ‘‘I did not address the

intended loss. TTT How can intended loss be different than

actual loss? You can’t intend something that is not actually

going to happen TTTT’’ Id. at 12. The district court replied

‘‘[c]ertainly you can,’’ and counsel responded ‘‘I defer to Your

Honor’s judgment in that then.’’ Id. at 12–13; see United

States v. Studevent, 116 F.3d 1559, 1563 (D.C. Cir. 1997)

(explaining that intended loss is not ‘‘limited to an amount

that was possible or likely’’).

Counsel then stated:

[O]ne of the things that has been scoffed at in this case is

what was his intention. The government has never

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asked him that through the year and a half of investigation. Mr. Bolla, and while it is scoffed at, says that he

never focused on what the fine was going to be, he was

so overburden[ed] with the process. And if that is his

burden because of recklessness then that would be Your

Honor’s finding.

Sentencing Tr. at 13. Nothing in this statement can be read

as an objection preserving the argument raised on appeal —

that the district court may not infer from a defendant’s

concealment of large amounts of assets an intent to avoid the

maximum penalty to which he is subject. ‘‘An objection is not

properly raised if it is couched in terms too general to have

alerted the trial court to the substance of the [appellant’s]

point.’’ United States v. Breedlove, 204 F.3d 267, 270 (D.C.

Cir. 2000).

Bolla’s claim may therefore be considered only under a

plain error standard of review. See Fed. R. Crim. P. 52(b)

(‘‘A plain error that affects substantial rights may be considered even though it was not brought to the court’s attention.’’); Breedlove, 204 F.3d at 271. The Supreme Court

recently confirmed that ‘‘ ‘[u]nder that test, before an appellate court can correct an error not raised at trial, there must

be (1) error, (2) that is plain, and (3) that affects substantial

rights.’ ’’ United States v. Cotton, 535 U.S. 625, 631 (2002)

(quoting Johnson v. United States, 520 U.S. 461, 466–67

(1997); citation and other internal quotation marks omitted).

‘‘ ‘If all three conditions are met, an appellate court may then

exercise its discretion to notice a forfeited error, but only if

(4) the error seriously affect[s] the fairness, integrity, or

public reputation of judicial proceedings.’ ’’ Id. at 631–32

(same; alteration in original). In this case, it is only necessary to address whether the alleged error was ‘‘plain.’’

That question ‘‘is assessed from the perspective of the trial

court.’’ United States v. Saro, 24 F.3d 283, 286 (D.C. Cir.

1994). Although our application of plain error review in the

sentencing context allows a somewhat relaxed standard for

showing prejudice under the third prong of the plain error

test, see id. at 288 (‘‘[T]he burden of persuasion in showing

‘prejudice’ should be somewhat lighter in the sentencing

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context.’’), Bolla must still satisfy a difficult standard in order

to show that the alleged error was ‘‘plain’’ or ‘‘obvious.’’ He

must show the error to be ‘‘so ‘plain’ the trial judge and

prosecutor were derelict in countenancing it.’’ Id. at 286

(quoting United States v. Frady, 456 U.S. 152, 163 (1982))

(internal quotation marks omitted); see United States v.

Weaver, 281 F.3d 228, 232 (D.C. Cir. 2002) (‘‘Plain error

assumes that the court should have intervened sua sponte

because the error was so obvious.’’).

The alleged error in this case was the district court’s

finding of intended loss, based on the inference that Bolla

concealed his assets with the intent to avoid the maximum

possible penalty. The district court was certainly not ‘‘derelict’’ in inferring that Bolla concealed assets to avoid a penalty, and thereby inflict loss on the government. Intent to

inflict loss may be inferred from the concealment of large

amounts of assets. See United States v. Feldman, 338 F.3d

212, 223–24 (3d Cir. 2003); see also United States v. Schaffer,

183 F.3d 833, 843 (D.C. Cir. 1999) (jury may infer intent

based upon circumstances surrounding a defendant’s actions).

Here, the plea agreement and the government’s proffer of

evidence reveal that Bolla failed to disclose (1) the $941,228

transferred to his wife’s brokerage account, which he controlled, (2) more than 100 bank transfers of $1000 or more, (3)

six bank transfers of more than $75,000, (4) gross income of

approximately $104,500 per month, by understating his

monthly income as ‘‘ ‘various’ commissions totaling $11,045

per month,’’ (5) control over a checking account, and (6) the

power of attorney over his wife’s brokerage account. Statement of the Offense at 2–3. In accordance with his plea

agreement, Bolla affirmed the veracity of all facts in the

Statement of the Offense. ‘‘Absent indications TTT that a

sentencing court committed obvious error by relying on findings that are ‘internally contradictory, wildly implausible, or

in direct conflict with evidence presented at trial,’ uncontested contentions TTT are considered to be supported by indicia

of probable reliability and are sufficient to support factual

findings for sentencing purposes.’’ United States v. Booze,

108 F.3d 378, 381–82 (D.C. Cir. 1997) (quoting Saro, 24 F.3d

at 291).

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The only evidence contrary to the district court’s finding of

intent was Bolla’s own explanation. Bolla’s counsel explained

that Bolla ‘‘was not focused on the fine,’’ but filed the false

financial statement out of frustration with the length of the

SEC investigation, dissatisfaction with ‘‘being given limited

counsel by a junior associate,’’ and ‘‘his own sloth and anger.’’

Letter from John Fedders to George Neal, Jr., Aug. 5, 2002,

quoted in Gov’t Sentencing Mem. at 8. It is unclear how

lying about assets responds to any of these sources of frustration, but the district court was plainly entitled to dismiss

Bolla’s explanation. In United States v. Feldman, one of our

sister circuits refused to credit the appellant’s explanation for

hiding assets in a bankruptcy proceeding. 338 F.3d at 223.

The court explained that ‘‘it is appropriate for the [d]istrict

[c]ourt to consider the reason why most people would conceal

assets,’’ concluding that ‘‘it is simply unbelievable that [the

appellant] would hide over a million dollars in assets only to

achieve a faster discharge.’’ Id. The district court, in the

instant case, was not required to credit Bolla’s self-serving

explanation of his motives.

Nor was the district court ‘‘derelict’’ in relying on the

maximum penalty Bolla faced in determining the amount of

the loss intended. There is certainly nothing ‘‘wildly implausible’’ in inferring that a defendant who conceals assets in the

face of a penalty proceeding does so to avoid the penalty to

which he is subject — and as much of it as possible. Booze,

108 F.3d at 381–82. Bolla’s claim that ‘‘he was not focused on

the fine’’ makes it difficult for him to suggest that he only

intended to avoid some lesser amount, which he expected the

SEC to impose. The Third Circuit recently upheld much the

same approach in the bankruptcy context in Feldman. We

need not decide if this approach is correct; we need only

conclude, as we do, that the district court was plainly not

‘‘derelict in countenancing it.’’ Saro, 24 F.3d at 286.

B. Restitution

Bolla states that ‘‘[t]he flawed calculation also affected the

calculation of the restitution.’’ Appellant’s Br. at 16 n.7. The

only other reference to this argument appears in the final

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sentence of his brief: ‘‘The restitution amount, which was

based upon the amount of the loss, should be appropriately

adjusted.’’ Id. at 22. These two sentences provide no additional basis for attributing error to the district court’s determination of the amount of restitution, and accordingly we

reject Bolla’s challenge to that determination.

III. Conclusion

For the foregoing reasons, the judgment is affirmed.

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