Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-18-02921/USCOURTS-ca7-18-02921-0/pdf.json

Parties Involved:
United States of America
Appellee
Bharat Verma
Appellant

Document Text:

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with Fed. R. App. P. 32.1

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Argued December 4, 2019

Decided January 2, 2020

Before

DANIEL A. MANION, Circuit Judge

MICHAEL S. KANNE, Circuit Judge

AMY C. BARRETT, Circuit Judge

Nos. 18‐2920 & 18‐2921

UNITED STATES OF AMERICA,

Plaintiff‐Appellee,

    v.

VIBGYOR OPTICAL SYSTEMS, INC.,

and BHARAT VERMA,

Defendants‐Appellants.

Appeals from the United States

District Court for the  

Northern District of Illinois,  

Eastern Division.

Nos. 15‐cr‐18‐1 & 15‐cr‐18‐2

Elaine E. Bucklo, Judge.

ORDER

Vibgyor Optical Systems supplied parts used in American military

equipment. For eight years, Vibgyor and its owner, Bharat Verma, breached

American import and export controls by sending specifications of those parts to

Chinese manufacturers and ordering from those manufacturers without a

license. Vibgyor and Verma both pleaded guilty to conspiracy to violate the

Arms Export Control Act, and Verma pleaded guilty to an additional charge of

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Nos. 18‐2920 & 18‐2921    Page 2

international money laundering. As part of their pleas, the defendants agreed to

forfeit the proceeds traceable to their offenses in an amount that the district court

would determine at sentencing. The government initially proposed that the

defendants should be ordered to forfeit $690,513.00. The government then

offered an alternative calculation of $514,279.65. Defense counsel raised

substantive and procedural objections to the government’s calculations, and in

response, the district court ultimately lowered the forfeiture judgment to

$430,701.12. On appeal, defendants argue that their counsel’s performance at

sentencing was constitutionally ineffective. We disagree and affirm the sentence.

I.

Vibgyor Optical Systems was a supplier of parts used to produce military

equipment. Vibgyor did not itself manufacture the parts; instead, Vibgyor and its

owner, Bharat “Victor” Verma, ordered them from manufacturers based in

China. Vibgyor then sent the parts to contractors for the U.S. Department of

Defense. The contractors in turn sent the parts to DOD. Vibgyor and Verma

never disclosed to DOD that the parts had been manufactured in China.  

Some of the parts manufactured in China were sensitive, critical components

listed on the United States Munitions List and the United States Munitions

Import List. Federal law requires anyone who imports or exports parts included

on those lists to have a license or permit to do so. Vibgyor, however, lacked a

permit. And not only that, Vibgyor and Verma also sent sample parts and

directions for constructing the necessary parts to the Chinese manufacturers

before ordering from them—a potential security breach. Predictably, Vibgyor’s

business in China landed it in hot water. In 2016, Vibgyor and Verma were

charged with several violations of federal law. Vibgyor ultimately pleaded guilty

to a charge of conspiracy to violate the Arms Export Control Act and to

knowingly defraud the United States. Verma pleaded guilty to the same as well

as to a charge of international money laundering. As part of their plea

agreements, the defendants agreed to forfeit the proceeds traceable to their

offenses in an amount that the district court would determine at sentencing.  

Before sentencing, the government proposed that the defendants should

forfeit $690,513.00. Here’s how it arrived at that number: First, it looked at the

credits and deposits in the defendants’ bank accounts between January 2009 and

March 2014. Next, it eliminated any payments that came from a payor whose

business was not fully related to DOD contracts. It then further reduced the

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Nos. 18‐2920 & 18‐2921    Page 3

number to include only the payments relating to parts listed on the Munitions

List and the Munitions Import List. Finally, it deducted the defendants’ costs so

that the forfeiture was limited to profits rather than proceeds.  

Before sentencing, defense counsel raised several challenges to the

government’s methodology. First, she argued that the government had not

provided its forfeiture calculations in a timely manner. She also contended that

the government should have looked at individual contracts, rather than the bank

records that aggregated credits and payments from the defendants’ accounts.

Finally, she argued that the government had not met its burden of proving that

the calculated profits had come only from the relevant contracts. She maintained

that certain payments counted in the calculation were actually for American‐

made parts and that others were for parts not used for DOD contracts.  

At sentencing, the government called IRS special agent Jason Gibson to testify

about its calculations. Gibson presented an exhibit, Gibson 1, that demonstrated

how he arrived at the $690,513.00 figure. He also presented a second exhibit,

Gibson 2, an alternative spreadsheet that used the same methodology but limited

the calculation to begin only in May 2010, after the government had confiscated

much of the defendants’ inventory. The alternative forfeiture calculation based

on Gibson 2 was $514,279.65.

Defense counsel cross‐examined Gibson and made affirmative arguments to

the court. Again she pressed the timeliness point. When the district court offered

her a continuance, she declined, explaining that she had raised the government’s

lateness to highlight the unreliability of its calculations. And once again, she

challenged the substance of Gibson’s calculation. She proposed a forfeiture

amount of $394,010.54. The district court ultimately adopted the figure from

Gibson 2 and then reduced it further in response to the defendants’ argument

that some of the calculated parts had been made in America. The district court

entered an order for a personal money judgment against defendants for

$430,701.12.  

II.

On appeal, defendants argue that their counsel’s performance denied them

their Sixth Amendment right to effective assistance of counsel. To demonstrate

constitutionally ineffective assistance of counsel, the defendants have to prove

that (1) counsel’s performance was deficient, which is to say, it fell below an

objective standard of reasonableness, and (2) the deficient performance actually

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Nos. 18‐2920 & 18‐2921    Page 4

prejudiced their defense. Strickland v. Washington, 466 U.S. 668, 688 (1984).

Presenting an ineffective assistance claim on direct appeal without the benefit of

record development is generally disfavored, and a defendant typically has only a

“trifling prospect of success.” United States v. Flores, 739 F.3d 337, 341–42 (7th Cir.

2014). But direct appeal is the only opportunity to raise a Strickland claim that

addresses forfeiture or restitution because a defendant cannot obtain collateral

relief for deprivations of property. See Barnickel v. United States, 113 F.3d 704, 706

(7th Cir. 1997). While Vibgyor and Verma have appropriately raised their claim

on direct appeal, they have failed to show that their counsel’s performance was

constitutionally deficient.  

There is a “strong presumption that counsel’s conduct falls within the wide

range of reasonable professional assistance.” Strickland, 466 U.S. at 689.

Accordingly, a defendant has to identify specific actions or omissions that “could

not be the result of professional judgment.” Koons v. United States, 639 F.3d 348,

351 (7th Cir. 2011). This bar is very low: “a counsel’s representation ‘need not be

perfect, indeed not even very good, to be constitutionally adequate.’” Delatorre v.

United States, 847 F.3d 837, 845 (7th Cir. 2017) (citation omitted). Defendants

challenge several of their counsel’s actions, but none fall outside the objective

standards of the profession.  

First, defendants argue that counsel should have sought a continuance to

familiarize herself with the government’s late disclosure of its calculations. At

sentencing, defense counsel argued that the late disclosure was not timely, in

violation of Federal Rule of Criminal Procedure 32.2(b)(2)(b). The court then

asked whether counsel’s objection to the timing was a request for a continuance.

Counsel responded that a continuance was unnecessary because her team

“worked tirelessly yesterday to examine these numbers.” Her objection on

timing grounds was not made because the late disclosure had left her

unprepared. Instead, she clarified that her procedural objection on timeliness

underscored the unreliability of the government’s calculations. She explained,

“[T]he point that we are trying to make, for the record, is that the government

continually changed its numbers throughout this process.”

It was not constitutionally deficient performance to decline a continuance. If

counsel is able to prepare for proceedings without the assistance of a

continuance, then the continuance is not necessary. And counsel’s performance

in the rest of the hearing made clear that she was prepared and had, in fact,

“worked tirelessly” to examine the late‐breaking disclosure. For example, she

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Nos. 18‐2920 & 18‐2921    Page 5

asked detailed questions about Gibson’s decision to exclude from his calculations

those payments made to a particular business partner. Defendants now argue

that the court offered a continuance because some information that the

government provided was password protected, meaning that defense counsel

did not have access to all of the information that she needed to represent them. In

reality, the discussion of password protection came later in sentencing, when

defense counsel was challenging the government’s decision to rely on bank

records rather than individual contracts. That discussion also highlights the fairly

sophisticated arguments that defense counsel made, which underscore that it

was not deficient for her to forgo requesting a continuance. Further, as the

government points out, the decision not to request a continuance certainly could

be “the result of professional judgment,” Koons, 639 F.3d at 351, because delay

would also have given the government more time to prepare its responses to the

defense’s preferred calculation. Thus, a strategic decision to proceed without an

extension of time is not constitutionally deficient performance.

Defendants’ other candidates for defective performance fare no better. They

argue that there was a “reasonable probability that the forfeiture amount would

have been reduced” but for a handful of other “errors”: the failure to prove

arguments asserted in defendants’ Memorandum in Opposition to the

Government’s Forfeiture Calculation; the failure to call witnesses to refute the

government’s method of calculation; the failure to put on evidence that certain

military parts involved in the calculation were still usable; and the decision not

to call defendant Verma as a witness. But defendants address these actions only

in their discussion of the prejudice prong of Strickland, not in their discussion of

deficiency—they never explain why those actions constitute deficient

performance rather than strategic choices. To succeed on their claim, they must

demonstrate that those actions constituted deficient performance, not merely that

they influenced the outcome at sentencing. See Strickland, 466 U.S. at 700

(“Failure to make the required showing of either deficient performance or

sufficient prejudice defeats the ineffectiveness claim.”). And it is easy to conceive

of legitimate strategic rationales for each of those decisions. See, e.g., Harrington v.

Richter, 562 U.S. 86, 110–11 (2011) (holding that the failure to put on a competing

expert does not constitute deficient performance); Toliver v. McCaughtry, 539 F.3d

766, 775 (7th Cir. 2008) (noting that “counsel may make a legitimate strategic

decision not to call a witness”). We conclude, therefore, that defendants have not

shown that their counsel’s assistance was ineffective.

AFFIRMED

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