Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-06-03076/USCOURTS-caDC-06-03076-0/pdf.json

Parties Involved:
Brittian Perry Day
Appellee
United States of America
Appellant

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 25, 2008 Decided May 9, 2008

No. 06-3063

UNITED STATES OF AMERICA,

APPELLEE

v.

BRITTIAN PERRY DAY,

APPELLANT

Consolidated with

06-3076

Appeals from the United States District Court

for the District of Columbia

(No. 04cr00358-01)

John W. Karr argued the cause for appellant. With him on

the briefs was Theodore S. Allison.

Sarah T. Chasson, Assistant U.S. Attorney, argued the

cause for appellee. With her on the briefs were Jeffrey A.

Taylor, U.S. Attorney, and Roy W. McLeese, III, Assistant U.S.

Attorney.

Before: TATEL and GARLAND, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

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Opinion for the Court filed by Senior Circuit Judge

EDWARDS.

EDWARDS, Senior Circuit Judge: Appellant Brittian Perry

Day was indicted on multiple counts of mail fraud, wire fraud,

and theft/embezzlement in violation of federal law, and one

count of first degree fraud in violation of the District of

Columbia Code. He was charged with stealing more than $1.5

million by defrauding various employee benefit plans and one

charity after he was retained by these institutions as an insurance

broker. Day claimed that he lacked the requisite mens rea,

because physical and emotional damage to his body and brain

had rendered him unable to form the intent to defraud or

deceive, and he proffered expert testimony to support this

defense. The District Court, however, declined to admit certain

of this expert testimony. United States v. Day, Crim. No. 04-

0358, slip. op. (D.D.C. Mar. 29, 2005); United States v. Day,

Crim. No. 04-0358, slip. op. (D.D.C. Feb. 25, 2005). On April

20, 2005, after a jury trial, appellant was found guilty on six

counts of mail fraud under 18 U.S.C. § 1341; ten counts of wire

fraud under 18 U.S.C. § 1343; five counts of theft or

embezzlement from an employee benefit plan under 18 U.S.C.

§ 664; and one count of fraud in the first degree under D.C.

Code §§ 22-3221 and 22-3222. See United States v. Day, 433

F. Supp. 2d 54 (D.D.C. 2006). The District Court denied the

Government’s request to subject appellant to criminal forfeiture

for his mail and wire fraud offenses, and refused to order a

forfeiture money judgment on the theft/embezzlement offenses.

United States v. Day, 416 F. Supp. 2d 79 (D.D.C. 2006).

Appellant was sentenced to an aggregate term of imprisonment

of 108 months, after which the District Court denied his motion

for release pending appeal. 433 F. Supp. 2d at 55 (denying

Day’s motion “because his appeal . . . [did] not raise a

substantial question of law or fact likely to result in reversal, a

new trial, or a reduced sentence of imprisonment”). 

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Appellant now challenges the District Court’s decisions to

exclude the expert testimony relating to his mental state; he also

contests his sentence on the ground that the District Court

incorrectly calculated his base and adjusted offense levels. The

Government cross-appeals, claiming that the District Court erred

in holding that the Government was not entitled to forfeiture on

the mail and wire fraud charges, and also in denying entry of a

money judgment on the charges to which the Government was

entitled to forfeiture. We reject appellant’s appeals, and uphold

both the District Court’s decisions to exclude the disputed expert

testimony and the sentence imposed by the court. However, we

reverse the District Court decisions denying the Government’s

requests for forfeiture and a money judgment. 

BACKGROUND

Over a 10-year period starting in 1994, Brittian Perry Day

caused losses of $1.5 million to multiple employee benefit plans

(“the Plans”) and to a charity called Food and Friends (“F&F”).

Appellant was retained by the Plans and by F&F to procure

insurance for them and their trustees. The Plans mailed

appellant checks, payable to appellant’s wholly-owned

insurance company (the “A&D Insurance Agency”), to cover the

cost of purchasing the policies that he recommended to them.

However, instead of actually obtaining insurance policies for the

Plans or F&F, appellant deposited the proceeds into an account

held in the name of the A&D Insurance Agency and spent the

money on himself. When the Plans asked appellant for evidence

of their coverage, he faxed them fake coverage declarations. He

also sent the Plans fake renewal applications and reminders to

the Plans, and contacted the Plans’ billing departments to

request prompt payment. Appellant also created fake

declaration pages by covering over the old policy terms with

correction fluid and retyping them with new policy numbers.

When the Federal Bureau of Investigation (“FBI”) searched

appellant’s home, where his business was located, it found blank

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declaration pages, declaration pages with “wite-out” on them,

and notebooks documenting his activities. 

In July 2002, after one of the Plans incurred a claim that

should have been, but was not, covered by the insurance it had

obtained from appellant, it quickly discerned that it had no

insurance. The Plan notified the Department of Labor, which

began investigating appellant’s business conduct. 

In December 2003, F&F purchased what it thought was a

pre-paid, three-year insurance policy through appellant. By

February 2004, F&F had written $300,000 in checks to A&D

Insurance Agency, unaware that appellant had obtained only a

one-year policy for F&F that cost approximately $100,000.

F&F did not learn until August 2004 that appellant was the

subject of a criminal investigation. 

The evidence at trial also indicated that appellant had taken

steps to protect his ill-gained assets. In July 2002, appellant

directed his sister to open a bank account under the name of a

fictitious company called Northern Cape Insurance Associates,

because he was afraid the FBI was going to seize his other

accounts. Thereafter, appellant did business through that bank

account. Appellant asked another individual to conceal the

existence of his ownership of several beach homes in Rehoboth

Beach, Delaware by hiding documents revealing his ownership

interests in the homes and saying nothing to the FBI about his

interests. The Government contended that these actions “helped

appellant hide his assets from forfeiture, minimized his civil

liability to the Plans, and gave the appearance of

impoverishment, which, in his mind, might persuade the

Government not to take significant criminal action against him.”

Br. for Appellee at 6. 

Appellant’s defense was that “the depression that followed

his [business and domestic] partner’s death [in 1990], coupled

with business reverses . . . and severe physical and emotional

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damage to his body and brain associated with the depression,

vascular dementia, three strokes, in 1996, 1999 and 2001, left

him sufficiently impaired that he lacked the mens rea to form the

specific intent to commit the crimes of which he was convicted.”

Br. for Appellant at 5. To bolster his defense, appellant

proffered the testimony of four expert witnesses who he claimed

would attest to his inability to form the requisite mens rea to

commit the crimes as charged. On February 24, 2005, after a

three-day Daubert hearing, see Daubert v. Merrell Dow

Pharmaceuticals, Inc., 509 U.S. 579 (1993), to determine

whether the proffered expert testimony was relevant and reliable

enough to be admitted as evidence, the District Court excluded

the first three witnesses – Drs. Abbas Alavi, Arthur Horton, and

Edgar Garcia-Rill. On March 25, 2005, after a two-day Daubert

hearing, the District Court excluded the testimony of the final

expert witness, Dr. Michael Spodak. However, the trial judge

allowed some friends, relatives, and associates of appellant to

testify at trial about “their observations of [appellant’s] physical,

mental and emotional deterioration over the decade following

his partner’s death and the apparent changes in his capacity to

deal with routine business and social activities after his strokes

began in 1996.” Br. for Appellant at 17. On April 20, 2005, the

jury found appellant guilty on all counts.

The Government’s superseding indictment filed on August

27, 2004 included forfeiture allegations; the Government

originally sought forfeiture of appellant’s primary residence in

Washington, D.C., his beach home in Rehoboth Beach,

Delaware, and his Mercedes-Benz automobile. The Government

also sought entry of a money judgment against appellant in the

amount of $1.5 million – the total sum of money allegedly

constituting or derived from proceeds of appellant’s crimes.

After the jury rendered its guilty verdict on the substantive

charges, appellant waived his right to a jury trial on the

Government’s forfeiture claims. The Government asked the

District Court to enter the money judgment of $1.5 million and

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to order the forfeiture of appellant’s primary residence as a

substitute asset under 21 U.S.C. § 853(p) in satisfaction of the

money judgment. Counsel for Mr. Day did not challenge the

total amount sought by the Government in forfeiture, arguing

instead that there was no basis in criminal forfeiture law for the

Government to obtain a personal money judgment against

appellant, and that the mail and wire fraud statutes cited in

support of the Government’s forfeiture claim did not apply to

the offenses of which appellant had been convicted. 

On February 22, 2006, the District Court ruled in

appellant’s favor on the forfeiture issues, holding that the mail

and wire fraud statutes did not support a criminal forfeiture

action against appellant for his crimes, and that although

criminal forfeiture was appropriate for the money stemming

from the theft/embezzlement charges, the applicable statutes did

not allow the District Court to enter a money judgment. 416 F.

Supp. 2d at 87, 91. On April 6, 2006, the District Court

sentenced appellant to an aggregate term of 108 months’

imprisonment. This appeal and cross-appeal followed. Day

appeals the District Court’s decisions to exclude the disputed

expert testimony and the District Court’s calculation of his

sentence. The Government cross-appeals the District Court’s

decisions rejecting forfeiture and denying it a money judgment,

claiming that criminal forfeiture is available for the mail and

wire fraud charges, and also that entry of a money judgment is

appropriate when criminal forfeiture is involved.

ANALYSIS

I. STANDARDS OF REVIEW

We have made it clear that, under Federal Rule of Evidence

702, “[a] district court has broad discretion regarding the

admission or exclusion of expert testimony, and reversal of a

decision on these matters is appropriate only when that

discretion has been abused.” Joy v. Bell Helicopter Textron,

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Inc., 999 F.2d 549, 567 (D.C. Cir. 1993). This standard of

review complies with the Supreme Court’s admonition that in

reviewing challenges to the admissibility or exclusion of expert

testimony, appellate courts must afford trial judges great

discretion. See Gen. Elec. Co. v. Joiner, 522 U.S. 136, 142-43

(1997). The Court has also made it clear that, under Daubert,

trial judges have “broad latitude to determine” the “reliability”

of expert testimony. Kumho Tire Co., Ltd. v. Carmichael, 526

U.S. 137, 153 (1999). Even when a trial court’s decision to

exclude expert testimony is based on a party’s failure to comply

with rules of discovery, the matter still requires “an exercise of

discretion by the trial court.” United States v. Johnson, 970 F.2d

907, 910 (D.C. Cir. 1992). 

Our review of the District Court’s sentencing decisions is

guided by a three-part test. “Purely legal questions are reviewed

de novo; factual findings are to be affirmed unless ‘clearly

erroneous’; and we are to give ‘due deference’ to the district

court’s application of the guidelines to facts.” United States v.

Goodwin, 317 F.3d 293, 297 (D.C. Cir. 2003) (alteration, other

internal quotation marks omitted).

The District Court’s constructions of the applicable statutes

covering criminal forfeiture – which implicate when criminal

forfeiture is an appropriate penalty and whether money

judgments are an appropriate means of enforcing criminal

forfeiture – are legal conclusions that we review de novo. See

United States v. Vampire Nation, 451 F.3d 189, 198 (3d Cir.

2006); United States v. Casey, 444 F.3d 1071, 1073 (9th Cir.

2006).

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II. THE DISTRICT COURT’S EXCLUSION OF EXPERT

TESTIMONY

A. Exclusion of Testimony Under Federal Rule of

Evidence 702

On February 25, 2005, the District Court issued an order

excluding the testimony of Drs. Horton, Alavi, and Garcia-Rill

on the grounds that it was 

unreliable and unhelpful (or irrelevant) under the

requirements embodied in Rule 702 of the Federal Rules of

Evidence and the Supreme Court’s decision in

[Daubert]. . . . [T]he Court also finds that the proffered

testimony fails to pass muster under the case law governing

the limited circumstances in which mens rea testimony is

permitted by the courts, as articulated by this Circuit in

United States v. Childress, 58 F.3d 693 (D.C. Cir. 1995).

Day, slip. op. at 1-2 (Feb. 25, 2005). Because we find that the

exclusion was appropriate under the Federal Rules of Evidence

(“FRE”), we need not address the District Court’s alternative

rationale for the exclusion. 

The exclusion of Dr. Garcia-Rill’s testimony was the

primary issue in the District Court. As the trial judge explained,

“Dr. Alavi and Dr. Horton[] did not purport to offer any

diagnosis of Mr. Day, but simply reported and explained the

results of examinations . . . they had conducted on him. Their

expert testimony thus did not stand alone; rather, Dr. Garcia-Rill

incorporated their results into his ‘diagnosis’ of Mr. Day.” Day,

433 F. Supp. 2d at 56 n.2. Put another way, the trial judge

described the three experts as “three legs of a stool, and the stool

cannot stand unless all three legs are there. And Dr. Garcia-Rill

is the weak leg in the stool.” Hearing Tr. (2/24/05) at 39. Day

does not dispute that if, as the District Court found, Dr. GarciaRill’s testimony was properly excluded under FRE 702, then it

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follows a fortiori that the proffered testimony from Dr. Alavi

and Dr. Horton was also properly excluded. 

FRE 702 states: 

If scientific, technical, or other specialized knowledge will

assist the trier of fact to understand the evidence or to

determine a fact in issue, a witness qualified as an expert by

knowledge, skill, experience, training, or education, may

testify thereto in the form of an opinion or otherwise, if (1)

the testimony is based upon sufficient facts or data, (2) the

testimony is the product of reliable principles and methods,

and (3) the witness has applied the principles and methods

reliably to the facts of the case. 

FED. R. EVID. 702. In Daubert, the Supreme Court explained

that, in applying FRE 702, “the trial judge must ensure that any

and all scientific testimony or evidence admitted is not only

relevant, but reliable.” 509 U.S. at 589. Scientific testimony is

reliable if it is based on “‘scientific . . . knowledge.’ The

adjective ‘scientific’ implies a grounding in the methods and

procedures of science. Similarly, the word ‘knowledge’

connotes more than subjective belief or unsupported

speculation.” Id. at 590 (footnote omitted). In short,

“[p]roposed testimony must be supported by appropriate

validation – i.e., ‘good grounds,’ based on what is known.” Id.

Daubert does not require that “judges become scientific

experts, much less evaluators of the persuasiveness of an

expert’s conclusion.” Ambrosini v. Labarraque, 101 F.3d 129,

134 (D.C. Cir. 1996). However, in applying FRE 702, trial

judges should focus on experts’ “principles and methodology,

not on the conclusions that they generate.” Daubert, 509 U.S.

at 595. Although Daubert lists a number of factors that a court

may consider in determining whether to admit or exclude expert

testimony, the Supreme Court made it clear that “[t]he inquiry

envisioned by Rule 702 is . . . a flexible one. Its overarching

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subject is the scientific validity – and thus the evidentiary

relevance and reliability – of the principles that underlie a

proposed submission.” Id. at 594-95. 

Finally, a district court’s admission or exclusion of evidence

under FRE 702 is subject only to limited review:

The trial court must have the same kind of latitude in

deciding how to test an expert’s reliability, and to decide

whether or when special briefing or other proceedings are

needed to investigate reliability, as it enjoys when it decides

whether that expert’s relevant testimony is reliable. Our

opinion in Joiner makes clear that a court of appeals is to

apply an abuse-of-discretion standard when it “review[s] a

trial court’s decision to admit or exclude expert testimony.”

522 U.S. at 138-139. That standard applies as much to the

trial court’s decisions about how to determine reliability as

to its ultimate conclusion. Otherwise, the trial judge would

lack the discretionary authority needed both to avoid

unnecessary “reliability” proceedings in ordinary cases

where the reliability of an expert’s methods is properly

taken for granted, and to require appropriate proceedings in

the less usual or more complex cases where cause for

questioning the expert’s reliability arises. . . . Thus, [under

Daubert, an assessment of the reliability of expert

testimony] in a particular case is a matter that the law grants

the trial judge broad latitude to determine.

Kumho Tire, 526 U.S. at 152-53. Given these legal standards,

we find that the District Court’s decision to exclude Dr. GarciaRill’s testimony was not an abuse of discretion. 

Dr. Garcia-Rill’s report concluded that

Mr. Day’s clinical Depression, demonstrated brain damage,

and decreased blood flow contributed to impaired critical

judgment in daily decisions. . . . There is considerable

evidence showing that the frontal lobes in man are

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responsible for volition, that is, the performance of

deliberate actions. . . . These are precisely the parts of the

cortex affected by the Major Depression and

“hypofrontality” in Mr. Day, in whom volition and conflict

decisions are impaired. Volition is the scientific

equivalent[] of the legal term “intent.” Therefore, I

conclude that Mr. Day’s voluntary and deliberate actions

were substantially impaired by his medical condition, to the

extent that to a high probability [he] could not have

appreciated the repercussions of his actions or purposely

intended to violate the law.

Joint Appendix (“JA”) (Vol. 1) at 165 (Garcia-Rill Report).

However, the bases underlying Dr. Garcia-Rill’s conclusions

were tenuous at best. The doctor’s report and findings were

premised in large part on the idea that appellant suffered from

“Major Depression” – a conclusion that was not supported by

appellant’s medical records nor established by the other two

experts. Dr. Garcia-Rill admitted on cross-examination that

there was no psychiatric evidence of depression, such as an

actual diagnosis from a clinician or evidence that appellant was

prescribed antidepressants. As a neuroscientist (as opposed to

a psychologist or psychotherapist), Dr. Garcia-Rill was unable

himself to diagnose Day as having depression. Hearing Tr.

(2/23/05) at 85-97. The trial judge thus found that Dr. GarciaRill’s testimony was generally unreliable, stating that “[t]here’s

no predicate that’s reliable for his conclusions. They don’t exist

in what he says he relies on. . . . He made basic mistakes in his

report, [mistakes about] the kind of medication that Mr. Day was

on, [his] refusal to consider [Day’s] past behavior in the outside

world, the definition of the kind of depression it was.” Hearing

Tr. (2/24/05) at 55.

Most important, the District Court found that Dr. GarciaRill’s testimony failed to illuminate Day’s condition prior to any

of the experts’ examinations of Day in 2004. The indictment

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against Day alleged that “[f]rom in or about March, 1994, and

continuing through in or about August, 2004, [Day] devised and

intended to devise a scheme and artifice to defraud and to obtain

money and property by means of false and fraudulent pretenses,

representations, and promises.” JA (Vol. 1) at 52 (Superseding

Indictment). The specific crimes of which appellant was

convicted involved fraudulent behavior spanning 1999-2004.

Even assuming, arguendo, that Dr. Garcia-Rill’s conclusions

were an accurate assessment of Day’s mental capabilities in

2004, there was no concrete physical evidence of any specific

impairment (or the degree of impairment) Day suffered during

the earlier years of his unlawful scheme. The trial judge thus

found that Dr. Garcia-Rill “does nothing more than surmise or

speculate as to what Mr. Day’s condition may have been at any

time prior to his November, 2004, exam by Dr. Horton.”

Hearing Tr. (2/24/05) at 55. The trial judge noted further that

“all of the testimony, as Dr. Alavi and Dr. Horton candidly

admit, all relate to Day’s condition in 2004 and 2005. . . . Dr.

Alavi categorically declined to make any assessment of Mr.

Day’s brain condition at any time before [Dr. Alavi conducted

his Positron Emission Tomography] scan.” Id. at 57. In other

words, even if the experts had made a compelling case that Day

lacked the ability to form the intent to deceive as of 2004, they

were unable to say that Day lacked this ability in 1994, when the

scheme first originated, or in 1999, when the earliest fraud

specifically alleged in the indictment began. 

Given the problems with Dr. Garcia-Rill’s conclusions –

and the temporal limitations of the expert testimony from Drs.

Alavi and Horton, on which Dr. Garcia-Rill’s conclusions were

based – the District Court concluded that the experts’ testimony

had to be excluded under FRE 702 and Daubert. The trial judge

found that the expert testimony would “confuse the trier-offact,” that it was not “the product of reliable principles and

methods,” and that the witnesses had not “appl[ied] the

principles and methodology reliably to the facts of the case.” Id.

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at 59-60. The trial judge’s determination that the proffered

expert testimony “really goes beyond anything that would meet

the Daubert test and be reliable,” id. at 60, was not an abuse of

discretion. 

B. Exclusion of Testimony Under Federal Rule of

Criminal Procedure 16

On March 29, 2005, the District Court issued an order

excluding the testimony of Dr. Michael Spodak on the grounds

that the defense had failed to comply with Federal Rule of

Criminal Procedure 16(b)(1)(C)(ii), and, in the alternative, held

that “the proffered evidence fails to comply with the standards

for admissibility set forth . . . in . . . United States v. Childress,

58 F.3d 693, 730 (D.C. Cir. 1995).” Day, slip. op. at 1 (Mar. 29,

2005). The District Court has made clear, however, that “the

primary ground for exclusion was defendant’s failure to comply

with Rule 16.” Day, 433 F. Supp. 2d at 58. Because we find

that the District Court did not abuse its discretion in excluding

the expert testimony under Rule 16, we need not address the

alternative basis for the exclusion.

Rule 16 governs discovery and disclosure in criminal

proceedings, and states in relevant part that if “the defendant has

given notice under [Federal Rule of Criminal Procedure] 12.2(b)

of an intent to present expert testimony on the defendant’s

mental condition,” FED. R. CRIM. P. 16(b)(1)(C)(ii), then the

defendant also “must, at the government’s request, give to the

government a written summary of any testimony that the

defendant intends to use under Rules 702, 703, or 705 of the

Federal Rules of Evidence as evidence at trial.” FED. R. CRIM.

P. 16(b)(1)(C). This summary “must describe the witness’s

opinions, the bases and reasons for those opinions, and the

witness’s qualifications.” Id.

After appellant filed his notice under Rule 12.2 on

November 17, 2004, the Government repeatedly requested

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discovery regarding appellant’s mental condition. Nevertheless,

it was only at the status conference on January 25, 2005 that the

Government learned the names of the three experts that

appellant intended to call as witnesses. Hearing Tr. (1/25/05) at

35-37. The Government then filed a motion on January 26,

2005 to compel production of the expert reports submitted by

Drs. Horton, Alavi, and Garcia-Rill because the defendant had

not made them available. JA (Vol. 1) at 88-93. The

Government received Dr. Garcia-Rill’s report only

approximately 48 hours before the scheduled Daubert hearing.

See Hearing Tr. (3/25/05) at 6-7. After the District Court

excluded the testimony of the first three experts, the

Government filed a motion on March 7, 2005 to strike

appellant’s Rule 12.2 Notice and to exclude expert testimony

concerning appellant’s mental condition, because appellant had

not yet identified an expert who could testify at the trial that was

scheduled to begin three weeks later. A week later, at a March

14, 2005 hearing on the Government’s motion, defense counsel

announced that appellant had retained Dr. Spodak to testify

instead of Dr. Garcia-Rill. The Government received Dr.

Spodak’s report on March 17 and moved to strike it because the

two-page report was so vague that it did not meet the standards

set forth in Rule 16. See JA (Vol. 1) at 203-04 (Spodak Report).

The District Court proceeded to hold a Daubert hearing on

March 21 and 24, 2005, to determine whether to admit Dr.

Spodak’s testimony. It was only during the Government’s

cross-examination on March 24, 2005 that Dr. Spodak finally

offered a diagnosis of appellant’s mental condition. Hearing Tr.

(3/24/05) at 16-17, 53. The District Court granted the

Government’s motion to exclude Dr. Spodak’s testimony on

March 25, 2005, primarily as a sanction for violating Rule 16.

We hold that the District Court did not abuse its discretion

when it excluded Dr. Spodak’s testimony. There are several

compelling reasons that support this conclusion. First, Dr.

Spodak’s report did not meet the requirements of Rule 16. The

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District Court correctly pointed to the Advisory Committee

comments to the 1993 Amendments to Rule 16 – amendments

that had included the addition of Rule 16(b)(1)(C) – during his

discussion of the deficiencies of Dr. Spodak’s report. Hearing

Tr. (3/25/05) at 11-12. The Advisory Committee stated that

under the new amendments, “the requesting party is to be

provided with a summary of the bases of the expert’s

opinion. . . . That should cover not only written and oral reports,

tests, reports, and investigations, but any information that might

be recognized as a legitimate basis for an opinion under [FRE]

703, including opinions of other experts.” FED. R. CRIM. P. 16

advisory committee’s note (1993 amendments). Although Dr.

Spodak’s report provided a page-long list of tests he had

performed on Day, interviews he had conducted, and other

expert reports he had read, the report failed to state what Dr.

Spodak had concluded from any individual test result, interview,

or expert report. That failure, in combination with the absence

of a clinical diagnosis in the report, made it virtually impossible

for the Government to engage in meaningful cross-examination

at the Daubert hearing. “Upon receipt of Dr. Spodak’s report,

the government knew no more about appellant’s alleged mental

deficiencies than it did when appellant filed his Rule 12.2 notice

four months earlier.” Br. for Appellee at 32. Given that the

purpose of Rule 16(b)(1)(C) is to “minimize surprise that often

results from unexpected expert testimony, reduce the need for

continuances, and to provide the opponent with a fair

opportunity to test the merit of the expert’s testimony through

focused cross-examination,” FED. R. CRIM. P. 16 advisory

committee’s note (1993 amendments), the District Court did not

err when it determined that Dr. Spodak’s report violated Rule

16. 

Second, it was not an abuse of discretion for the District

Court to conclude that the appropriate sanction for the Rule 16

violation was the exclusion of Dr. Spodak’s testimony. Trial

courts have the discretion to weigh various options in deciding

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how to address a party’s violation of a discovery rule. “If a

sanction is thought necessary [under Rule 16], it is for the court

to decide whether to order a continuance, or to prohibit the party

from introducing in evidence the material not disclosed, or to

make whatever other order it deems just under the

circumstances.” CHARLES ALAN WRIGHT,2FEDERAL PRACTICE

& PROCEDURE: CRIMINAL § 260, at 196-201 (3d ed. 2000)

(footnotes omitted). The Supreme Court has held that exclusion

of evidence and testimony can be a proper sanction, even against

a criminal defendant. Taylor v. Illinois, 484 U.S. 400, 414-16

(1988). Moreover, we have rejected the suggestion that Taylor

requires a trial court to conduct “some sort of ‘least restrictive

alternative’ analysis” before excluding evidence as a sanction.

Johnson, 970 F.2d at 911. 

In Johnson, we specifically held that, in order to justify the

exclusion of evidence as a sanction for failure to comply with a

discovery rule, the trial judge need not find that the

noncomplying counsel acted in “bad faith.” Id. We remanded

the case in Johnson only because the trial court judge had gone

out of his way to praise the good faith efforts of the

noncomplying attorney. Although this court stated that it “could

normally affirm on [the Johnson] record,” the fact that “the

[trial] judge’s only factual finding (good faith of counsel) [was]

slightly counter to the decision to exclude” caused us to remand

the case to allow the trial judge to expressly exercise the

discretion afforded under Taylor. Id. at 912. 

In this case, unlike the circumstances under review in

Johnson, the District Court did not believe that Day’s counsel

had acted in good faith. Indeed, when he granted the

Government’s motion to exclude Dr. Spodak’s testimony, the

trial judge stated that this case involved “willful conduct on the

part of the defense. And judgments were made along the way

that were either intended to or had to be understood as having

the effect of putting the government in a box that was prejudicial

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and unfair and which had an impact [on] the integrity of the

adversary process.” Hearing Tr. (3/25/05) at 14; see also Day,

433 F. Supp. 2d at 57 (stating that the defendant had “failed

manifestly to comply” with Rule 16). As noted above, Dr.

Spodak’s tardy report did not meet the standards of Rule 16 and

he offered no diagnosis until less than a week before trial. In

these circumstances, the District Court did not abuse its

discretion in excluding Dr. Spodak’s testimony.

III. SENTENCING

Appellant claims that the District Court made several errors

in calculating his sentence under the United States Sentencing

Guidelines (“U.S.S.G.”). For the reasons indicated below, we

find that none of appellant’s claims has any merit.

A. Base Offense Level

Under U.S.S.G. § 2B1.1(a)(1), appellant’s base offense

level was 7. However, the District Court increased the offense

by 16 levels under U.S.S.G. § 2B1.1(b)(1)(I) after finding that

appellant was responsible for losses of more than $1 million.

Appellant contends that, because the trial judge’s loss

determination was substantially more than the total loss alleged

in the counts included in the superseding indictment, the base

sentencing level was erroneous and violated his Fifth

Amendment right to due process. Appellant’s claim fails for

two reasons. 

First, the Supreme Court’s decision in United States v.

Booker, 543 U.S. 220 (2005), rendered the Sentencing

Guidelines advisory, and stated that “when a trial judge

exercises his discretion to select a specific sentence within a

defined range, the defendant has no right to a jury determination

of the facts that the judge deems relevant.” Id. at 233.

Appellant’s sentence of nine years fell considerably below the

statutory maxima for mail and wire fraud (thirty years) and was

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well within the District Court’s sentencing discretion. 18 U.S.C.

§§ 1341 and 1343. 

Second, after the trial judge determined the “appropriate

offense guideline” under U.S.S.G. § 1B1.2(b), he had discretion

to reasonably determine “relevant conduct” as defined in

U.S.S.G. § 1B1.3. “Relevant conduct,” for the purposes of the

base offense that appellant was charged with, includes conduct

that is “part of the same course of conduct or common scheme

or plan as the offense of conviction.” U.S.S.G. § 1B1.3(a)(2).

We defer to the District Court’s determination of what

constitutes “the same course of conduct or common scheme,”

“[b]ecause the question of whether conduct in a given case

constitutes a ‘course of conduct’ is inherently fact intensive.”

United States v. Jackson, 161 F.3d 24, 28 (D.C. Cir. 1998).

Moreover, “relevant conduct” only needs to be established by a

preponderance of the evidence for the trial judge to permissibly

take said conduct into account in a sentencing determination.

United States v. Dorcely, 454 F.3d 366, 371-3 (D.C. Cir. 2006).

The trial judge’s findings were neither clearly erroneous,

contrary to law, nor an abuse of discretion. We therefore hold

that the trial judge committed no error in determining that

appellant had caused a loss greater than $1 million and in

increasing appellant’s base offense level.

B. Obstruction of Justice

The Sentencing Guidelines advise that a trial judge may

increase a defendant’s sentence by two levels if it is determined

that the defendant “willfully obstructed or impeded, or

attempted to obstruct or impede” the administration of justice

with respect to the investigation. U.S.S.G. § 3C1.1. It does not

matter that a defendant was not separately charged with

obstruction of justice. U.S.S.G. § 1B1.4 states that, “[i]n

determining the sentence to impose within the guideline range

. . . the court may consider, without limitation, any information

concerning the background, character and conduct of the

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defendant, unless otherwise prohibited by law.” Given the

testimony by Government witnesses about the lengths to which

appellant had gone to hide his income and assets, the District

Court’s determination that appellant was guilty of the

obstruction of justice was not error under the due deference

standard. 

C. Abuse of Trust

The Sentencing Guidelines also advise that a trial judge

may increase a defendant’s sentence by two levels if it is

determined that the defendant “abused a position of public or

private trust . . . in a manner that significantly facilitated the

commission or concealment of the offense.” U.S.S.G. § 3B1.3;

see also U.S.S.G. § 3B1.3 app. n.1. Whether Day abused a

position of trust within the meaning of U.S.S.G. § 3B1.3 is a

question of law that we review de novo. United States v. West,

56 F.3d 216, 219 (D.C. Cir. 1995). We have already determined

that appellant operated as a fiduciary of the employee benefit

plans he embezzled from, under both the common law and

statutory definitions of “fiduciary.” Chao v. Day, 436 F.3d 234

(D.C. Cir. 2006) (stating in part that “[a]s the plans’ agent, Day

was bound by a broker’s common law fiduciary duty to

faithfully deliver the plans’ assets to the insurer,” id. at 237, and

noting that “Day was far more than a mere custodian [of the

plans’ assets]; he was a broker who solicited, accepted, and then

pilfered the plans’ assets by reneging on his promise to purchase

insurance for the plans’ members,” id. at 238). In light of our

earlier decision, we uphold the District Court’s determination

that appellant abused a position of trust and thus warranted the

sentencing enhancement contained in U.S.S.G. § 3B1.3.

D. Number of Victims

The Government sought to have appellant’s sentence

increased by four levels under U.S.S.G. § 2B1.1(b)(2)(B),

because it alleged that there were more than 50 victims of

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appellant’s embezzlement. However, the District Court only

increased appellant’s sentence by two levels under U.S.S.G.

§ 2B1.1(b)(2)(A) (more than 10 victims), because the trial judge

counted only the individual plans, not every member of said

plans, as “victims.” Although fewer than 10 plans were

identified in the superseding indictment, the District Court found

that, when all of his “relevant conduct” was considered,

appellant had in fact stolen from more than 10 plans. See

Hearing Tr. (4/6/06 PM) at 14-17. The District Court’s

determination of appellant’s “relevant conduct” was not clearly

erroneous.

IV. CRIMINAL FORFEITURE

After the jury found appellant guilty of the substantive

charges and appellant waived his right to have a jury determine

whether the Government was entitled to the forfeiture sought,

the Government decided that, in lieu of seeking specific property

from appellant, it would pursue a $1.5 million money judgment.

The Government relied only on the first forfeiture allegation in

the superseding indictment to support its $1.5 million request.

This allegation incorporated the entire mail and wire fraud

scheme alleged in Counts 1-16 of the indictment. JA (Vol. 1) at

50-73 (Superseding Indictment); Br. for Appellee at 44-46.

Appellant did not challenge the amount of money that the

Government sought to recover, though he challenged the

Government’s ability to claim forfeiture on the mail and wire

fraud counts and the Government’s request for a money

judgment in the amount of the forfeited property. The District

Court held that forfeiture was appropriate on the embezzlement

charges, but agreed with appellant that criminal forfeiture was

unavailable on the mail and wire fraud counts. Day, 416 F.

Supp. 2d at 85-88.

Determining whether forfeiture is an appropriate sanction

for mail and wire fraud involves unraveling a series of tangled

statutes. During the time period encompassing appellant’s trial

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and sentencing, 28 U.S.C. § 2461(c) stated that, “[i]f a forfeiture

of property is authorized in connection with a violation of an

Act of Congress, and any person is charged . . . with such

violation but no specific statutory provision is made for criminal

forfeiture upon conviction, the Government may include the

forfeiture in the indictment . . . and upon conviction, the court

shall order the forfeiture of the property in accordance with the

procedures set forth in [21 U.S.C. § 853].” 28 U.S.C. § 2461(c)

has since been amended so that its application to general mail

and wire fraud charges can no longer be disputed. See USA

PATRIOT Improvement and Authorization Act of 2005, Pub. L.

No. 109-177, § 410, 120 Stat. 192 (2006). However, the newly

amended statute was not in effect when Day was arrested, tried,

and sentenced. The Government argues that this is no

impediment to forfeiture, because § 2461(c) “requires the Court

to order criminal forfeiture where a civil forfeiture is authorized,

and [18 U.S.C. §] 981(a)(1)(C) in turn supplies the necessary

authorization in this case.” Day, 416 F. Supp. 2d at 86. 

18 U.S.C. § 981(a)(1)(C) subjects property to civil

forfeiture if it is obtained in violation of various listed statutes

or if it is obtained as a result of “any offense constituting

‘specified unlawful activity’ (as defined in section 1956(c)(7) of

this title).” Meanwhile, 18 U.S.C. § 1956(c)(7)(A) defines

“specified unlawful activity” as including “any act or activity

constituting an offense listed in § 1961(1) of this title.” And,

finally, 18 U.S.C. § 1961(1)(B) – part of the Racketeer

Influenced and Corrupt Organizations (“RICO”) statute –

defines “racketeering activity” to include any act that is

“indictable under any of the following provisions of title 18,”

including sections 664 (the embezzlement/theft from employee

benefit plans statute), 1341 (the mail fraud statute) and 1343 (the

wire fraud statute). In short, the Government argues that

criminal forfeiture is authorized for general violations of the

mail and wire fraud statutes, as well as for embezzlement from

employee benefit plans.

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The District Court disagreed, noting that 28 U.S.C.

§ 2461(c) allowed the Government to seek criminal forfeiture

only when “no specific statutory provision is made for criminal

forfeiture upon conviction.” The District Court found that there

was a specific statutory provision applicable to criminal

forfeiture in mail and wire fraud cases: 18 U.S.C.

§ 982(a)(2)(A) states that “[t]he court, in imposing sentence on

a person convicted of a violation of [the mail or wire fraud

statutes, §§ 1341 or 1343], affecting a financial institution, shall

order that the person forfeit to the United States any property

constituting, or derived from, proceeds the person obtained

directly or indirectly, as the result of such violation.” According

to the District Court, since appellant’s mail and wire fraud

unquestionably did not affect financial institutions,

§ 982(a)(2)(A) would not authorize criminal forfeiture in

appellant’s case; by the same token, according to the District

Court, § 982(a)(2)(A)’s specific application to mail and wire

fraud also prevented § 2461(c) from being used to secure

criminal forfeiture in cases of this sort, involving general mail

and wire fraud. As the District Court stated,

The plain language of 28 U.S.C. § 2461(c) permits the

government to seek criminal forfeiture of the property of a

convicted person that would be subject to civil forfeiture,

provided that “no specific statutory provision is made for

criminal forfeiture upon conviction.” Here, 18 U.S.C.

§ 982(a)(2)(A) is just such a specific statutory provision,

authorizing criminal forfeiture upon conviction of mail and

wire fraud. By its terms, therefore, Section 2461(c) does

not authorize criminal forfeiture of mail and wire fraud

proceeds.

Day, 416 F. Supp. 2d at 86. 

We disagree with the District Court’s reading of the

relevant statutes. We find that criminal forfeiture is available

for general mail and wire fraud violations, not merely those

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affecting financial institutions. We note that the District Court’s

decision in Day relied heavily on another district court’s opinion

– United States v. Croce, 345 F. Supp. 2d 492 (E.D. Pa. 2004)

(Croce II) – which was overruled by the Third Circuit in

Vampire Nation, 451 F.3d 189 (3d Cir. 2006). We agree with

the Third Circuit’s interpretation of the relevant statutes:

To interpret the statute, we begin with its plain language.

Ascribing plain meaning to the words of 28 U.S.C.

§ 2461(c), criminal forfeiture is not permitted unless (1) a

substantive provision exists for civil forfeiture of the

criminal proceeds at issue; and (2) there is no specific

statutory provision that permits criminal forfeiture of such

proceeds. Thus, we read the statute, enacted eight years

after Congress last amended 18 U.S.C. § 982(a)(2), as a

“bridge” or “gap-filler” between civil and criminal

forfeiture, in that it permits criminal forfeiture when no

criminal forfeiture provision applies to the crime charged

against a particular defendant but civil forfeiture for that

charged crime is nonetheless authorized. Accordingly,

under our reading, § 2461(c) permits criminal forfeiture for

general mail fraud because (1) 18 U.S.C. § 981(a)(1)(C)

authorizes civil forfeiture for general mail fraud; and (2) no

statutory provision specifically authorizes criminal

forfeiture for general mail fraud.

Vampire Nation, 451 F.3d at 199 (internal citation, footnote

omitted). See also United States v. Jennings, 487 F.3d 564, 584-

85 (8th Cir. 2007) (holding that § 2461 allows for criminal

forfeiture of the proceeds of general mail fraud). We find

support for this reading of the applicable statutes in the

legislative history of the Civil Asset Forfeiture Reform Act of

2000 (“CAFRA”), which added subsection (c) to 28 U.S.C.

§ 2461. The House Report that accompanied an earlier version

of CAFRA stated that:

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Current law limits civil forfeiture to certain enumerated

federal crimes, and by doing so excludes a number of

federal crimes that frequently generate criminal proceeds.

Because [CAFRA] makes civil forfeiture procedures fair,

and civil forfeiture generally should be available to combat

federal crimes, it makes sense to extend the availability of

forfeiture to these other crimes. Rather [than] simply

making civil forfeiture available for all federal crimes,

some of which do not generate criminal proceeds, the bill

would amend sections 981(a)(1) and 982(a)(2) of title 18 to

extend . . . forfeiture (both civil and criminal) to the crimes

enumerated in the money laundering statute, 18 U.S.C.

§ 1956(c)(7).

. . . .

[CAFRA] would [also] amend section 2461 of title 28

to give the government the option of pursuing criminal

forfeiture as an alternative to current civil forfeiture if civil

forfeiture is otherwise authorized.

H.R. REP. NO. 105-358, pt. 1, at 35 (1997). This legislative

history clarifies that the civil and criminal forfeiture statutes

were intended to be largely coterminous. 

Criminal forfeiture is therefore available for general mail

and wire fraud under 18 U.S.C. §§ 1341 and 1343, and not only

for mail and wire fraud affecting financial institutions under 18

U.S.C. § 982(a)(2)(A). We find the District Court’s

interpretation of the statutes to be contrary to both their plain

language and congressional intent.

V. MONEY JUDGMENT

Although the District Court held that the Government was

not entitled to criminal forfeiture as a form of relief on the first

forfeiture allegation for the general mail and wire fraud charges

under 18 U.S.C. §§ 1341 or 1343, it found that the Government

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was entitled to forfeiture on the second forfeiture allegation for

appellant’s theft/embezzlement charges under 18 U.S.C. § 664.

Nevertheless, the District Court refused to enter a money

judgment against appellant for the amount of the total

embezzlement charges (approximately $40,000) because it

found that the applicable forfeiture statutes did not authorize the

court to enter money judgments. The Government appeals this

ruling. 

As noted above, 18 U.S.C. § 2461(c) states that, in

circumstances where criminal forfeiture is appropriate, “the

court shall order the forfeiture of the property in accordance

with the procedures set forth in . . . 21 U.S.C. § 853,” and 18

U.S.C. § 981(a)(1)(C) requires the forfeiture of “[a]ny property,

real or personal, which constitutes or is derived from proceeds

traceable to” the violations in question. Neither of these

statutory provisions specifically authorizes money judgments,

which the trial judge believed to be fatal to the Government’s

argument. The District Court stated that the Government

“[i]mplicitly acknowledg[ed] the lack of support for its position

in the statutory language” by arguing that “the practice of

entering forfeiture money judgments is established in the case

law as a unique aspect of in personam criminal forfeiture. . . .

[T]he Court finds no such authority emanating from the inherent

nature of criminal forfeiture.” Day, 416 F. Supp. 2d at 89. The

District Court’s decision once again rested on another district

court opinion – United States v. Croce, 334 F. Supp. 2d 781

(E.D. Pa. 2004) (Croce I) – which was also overruled by the

Third Circuit in Vampire Nation. 

We hold that the District Court erred in denying the

Government’s request for a money judgment. Nothing in the

relevant statutes suggests that money judgments are forbidden.

Rather, “the open-ended nature of an order forfeiting the

proceeds of an offense is implicit in both the mandatory nature

of forfeiture and in the procedures Congress created for locating

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the forfeitable property itself, or for satisfying the forfeiture

judgment with substitute assets.” Br. for Appellee at 51; see

also 21 U.S.C. § 853(b)(2) (property subject to criminal

forfeiture includes “tangible and intangible personal property,

including rights, privileges, interests, claims, and securities”);

§ 853(m) (authorizing courts to order depositions “to facilitate

the identification and location of property declared forfeited”);

§ 853(p) (stating that “substitute property” is also subject to

forfeiture if, “as a result of any act or omission of the

defendant,” the directly forfeitable property “(A) cannot be

located upon the exercise of due diligence; (B) has been

transferred or sold to, or deposited with, a third party; (C) has

been placed beyond the jurisdiction of the court; (D) has been

substantially diminished in value; or (E) has been commingled

with other property which cannot be divided without

difficulty.”). We find it instructive that 21 U.S.C. § 853

contains no language limiting the amount of money available in

a forfeiture proceeding to those assets in the defendant’s

possession at the time forfeiture is ordered. As the Ninth Circuit

recently noted, “[c]riminal forfeiture under § 853, by definition,

bears a direct relation to the proceeds of the crime. [It] is

concerned not with how much an individual has but with how

much he received in connection with the commission of the

crime.” Casey, 444 F.3d at 1077. Additionally, § 853(o) states

that “[t]he provisions of this section shall be liberally construed

to effectuate its remedial purposes.” 

The First Circuit recently noted: 

There are two primary reasons for permitting money

judgments as part of criminal forfeiture orders. First,

criminal forfeiture is a sanction against the individual

defendant rather than a judgment against the property itself.

Because the sanction follows the defendant as a part of the

penalty, the government need not prove that the defendant

actually has the forfeited proceeds in his possession at the

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time of conviction. Second, permitting a money judgment,

as part of a forfeiture order, prevents a [convicted

defendant] from ridding himself of his ill-gotten gains to

avoid the forfeiture sanction.

United States v. Hall, 434 F.3d 42, 59 (1st Cir. 2006) (internal

quotation marks, citations omitted). Both the Third Circuit and

the Ninth Circuit recently have held that money judgments are

appropriate where the Government is entitled to criminal

forfeiture, even where the amount of the money judgment

exceeds the defendant’s current assets. See Vampire Nation,

451 F. 3d at 201-03; Casey, 444 F.3d at 1077. In each case, the

court noted the liberal construction required by § 853(o) (see

Vampire Nation, 451 F.3d at 202 n.12; Casey, 444 F.3d at 1073),

and rejected the contrary view because it “would permit

defendants who unlawfully obtain proceeds to dissipate those

proceeds and avoid liability for their ill-gotten gains.” Vampire

Nation, 451 F.3d at 202; see also Casey, 444 F.3d at 1074.

Furthermore, in the context of criminal forfeiture under the

similar RICO forfeiture statute, 18 U.S.C. § 1963(a), the

Second, Seventh, and Eleventh Circuits all agree that money

judgments are available. See, e.g., United States v. Robilotto,

828 F.2d 940, 948-49 (2d Cir. 1987); United States v. Ginsburg,

773 F.2d 798, 799-803 (7th Cir. 1985) (en banc); United States

v. Conner, 752 F.2d 566, 575-78 (11th Cir. 1985). We now join

our sister circuits and hold that money judgments are

appropriate in the criminal forfeiture context. 

CONCLUSION

For the reasons indicated in the foregoing opinion, the

judgments of the District Court are affirmed in part and reversed

in part.

So ordered.

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