# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 3- 11 62

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Uni te d S ta te s o f Am eri ca

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.

Ja so n B o- Alan Beck m an , als o k no wn as Bo Beck m an

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll an t

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No. 1 3- 11 63

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Uni te d S ta te s o f Am eri ca

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.

Geral d J os ep h Du ran d, al so kn own as J erry Duran d

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll an t

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No. 1 3- 26 03

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Uni te d S ta te s o f Am eri ca

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le ev.

Pat ric k J os ep h Ki le y , als o k no wn as Pat Kil ey

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll an t

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App eal s fr om

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of M in ne so ta - St. Pa ul

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Su bm it te d: Octo be r 8, 2 01 4
Fil ed : M ay

12 , 20 15

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Befo re RI LEY, Chi ef J ud ge , W OLLMAN and BYE, Circ ui t J ud ge s.

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RILEY, Chi ef J ud ge

.

Fi ve pl ay ers in a p a r t i a l P o nz i sc he m e rece iv ed ov er $1 93 m il li on fro m

un su sp ect in g in ve st or s. Trev or Co ok a n d Ch ris to ph er Pet te ng il l pl ed gu il ty, an d

de fen da nt s Ja so n Bo -Ala n Bec km an , Geral d Dur an d, an d Pat ric k Kil ey pr oc eed ed to

tri al

. Afte r a twen ty-ni ne da y tri al

, a jury fo un d th e de fen da nt s gu il ty on al l cou nt s,

in cl ud in g frau d, co ns pi racy, an d m on ey -la un de rin g, an d th e di st ric t co ur t se nt en ced 1

each to de cad es in pr is on

. The de fen da nt s ap pe al th ei r co nv ic ti on s an d se nt en ces

. W e aff irm. 2

The Hon or ab le Mi ch ael J. Dav is

, Ch ie f Ju dg e, Uni te d St at es Dis tri ct Co ur t fo r 1

th e Dis tri ct of Mi nn es ot a, ad op ti ng th e rep or t an d reco m m en da ti on of th e Hon or ab le

Je ffre y J. Keyes, Uni te d S ta te s M ag is tra te Ju dg e fo r th e Dis tri ct of M in ne so ta

.

W e p os se ss ap pe ll at e juri sd ic ti on un de r 28 U.S.C. § 1 29 1. 2

-2

-I. BACKGRO UND

A. Fac ts

“ W e pr es en t th e fact s in a li gh t m os t fav or ab le to th e ve rd i c ts

, dr awin g al l

reas on ab le in fere nc es f

r o m t h e ev id en ce th at su pp or t th e jury’ s ve rd ic ts .” Uni te d

St at es v. Ram on -Ro dr ig ue z, 49 2 F.3 d 93 0, 93 4 (8 th Ci r. 20 07 ). Fro m Ju ly 20 06

th ro ug h Sep te m

be r 20 09

, th e de fen da nt s’ pa rti al Po nz i sch em e rece iv ed ov er $1 93 3

m il li on fro m hu nd red s of in ve st or s. Onl y $4 9 m il li on was ret ur ne d to so m e in ve st or s,

al l of whi ch cam e fro m ne w in ve st or s’ m on ey

. So m e in ve st or s lo st th ei r li fe sa vi ng s.
The fiv e sc he m ers pr of

it ed in va ry in g am ou nt s: $1 2.2 m il li on fo r Co ok ; $4 .8 m il li on

fo r Bec km an ; $4 .3 m il li on fo r Pet te ng il l; $1 .9 m il li on fo r Dur an d; an d $4 32 ,00 0 fo r

Kil ey

.

The sc he m ers in du ced vi ct im s to in ve st in va rio us en ti ti es th ey crea te d, m an y

na m ed ei th er wit h t h e i n it ia ls “ UBS” (UBS en ti ti es ) or th e wor d “ Oxf or d” (Ox fo rd

en ti ti es ). Acco rd in g to SE C a c c o u n ta nt Sco tt Hlav acek

, th e sc he m ers de sc rib ed a

“ cu rren cy pr og ram ” to po t en ti al in ve st or s le ad in g in ve st or s to be li ev e “ th ey wou ld

be in ve st in g in f

o r e i g n cu rren cy tra di ng , whi ch was gu aran te ed an d

. . . ha d a

. . . fix ed rat e ev ery m on th .” So m e of th e m on ey “ was act ua ll y in ve s t e d i n fo rei gn

cu rren ci es ,” bu t no ne of th e m on ey was “ in ve s t e d in a co m pl et el y sa fe, se cu re, an d

gu aran te ed cu rren cy

pro du ct ,” as th e d efen da nt s p ro m is ed

.

Fo r ex am pl e, Bec km an ’s fir m , “ Oxf or d Glo ba l Adv is or s,” whi ch was “ on e of

th e

. . . pr im ary reci pi en ts o f i n v e s t o r fu nd s” in th e sc he m e, st at ed in a so li ci ta ti on

U.S. Secu rit ie s an d Exc ha ng e Co m m is si on (SEC) acco un ta nt Sco tt Hlav acek 3

te st ifi ed , “ In a tr ue Po nz i s ch em e[,] the m on ey

. . . is jus t u se d fo r th e b en efi t o f th e
pe op le rai si ng t h e mo n e y an d th en to m ak e pa y m en ts to ol de r in ve st or s wit h ne w in ve st or s’ m on ey .” I n c o n t r a s t, “ [i]n a pa rti al Po nz i sc he m e[,] so m e of th e m on ey

m ig ht be

. . . us e[d ] fo r so m et hi ng cl os e to wha t [th e sc he m ers are] sa y in g, bu t th e res t of th e m on ey

is us ed to pa y

ol d i nv es to rs wit h n ew in ve st or s’ m on ey an d t o b en efi t th e in di vi du al s ra is in g t he m on ey .”

-3

-br oc hu re th at it s “ Fed eral Fu nd s In co m e Adv an ta ge ” pr og ram ha d a cu rren t an nu al

y ie ld of 12 % an d pr om is ed “ in st an t[] li qu id [it y ]” an d “ zero flu ct ua ti on of pr in ci pa l.”

Each in ve st or ’s acco un t wou ld be “ se gr eg at ed ”—“ no t co -m i n g l e d [ si c] wit h th e

ge ne ral as se ts of th e cu st od ia n, ba nk or de al er,” an d fu nd s wou l d b e in ve st ed in

va rio us for ei gn cu rren ci es an d th en tra de d fo r ga in de pe nd in g o n fa vo rab le in te res t

rat es

. Bec km an to l d h i s v i ct im s th ey co ul d no t lo se m on ey in th e cu rren cy

pr og ram —t he in ve st m en t was “ ris k- free ” an d “ co m pl et el y sa fe”— an d th at it w a s a

“ fix ed in co m e pr od uc t” “ th at de li ve rs th is sa fe 10 to 12 p e r c e n t ret ur n on y ou r

m on ey .” Bec km an al so fal se ly in fla te d hi s own cred en ti al s. Fo r ex am pl e, Bec km an

c l a i med to be “ in th e to p- ran ke d ti er of po rtf ol io m an ag ers pe r a Mo rn in gs ta r

co m pa rat iv e st ud y ,” a st ud y an d ran ki ng th at di d no t ex is t. One vi ct im te st ifi ed th is

fal se cred en ti al “ fact or ed in to [he r] deci si on to m ak e th is in ve st m en t.”

Bec km an cl ai m s it was on ly in Apr il 20 08 th at he le arn ed th e in ve st or s’ m on ey

in th e cu rren cy pr og ram was no t he ld in se gr eg at ed acco un ts bu t was po ol ed to ge th er. Yet, Bec km an st il l ob ta in ed an ot he r $2 4 m il li on of in ve st or s’ m on ey fo r th e cu rren cy

pr og ram

. Fo r th e pe rio d Aug us t 20 06 to Ju l y 20 09

, Bec km an ’s pe rs on al cl ie nt s

in ve st ed m or e th an $4 7 m il li on

.

At tri al

, a se cu rit ie s ex ecu ti ve , Don al d Bi zu b, who ha d a pr of es si on al

rel at io ns hi p wit h Bec km an , te st ifi ed th at in Aug us t 20 08 he ha d se en “ an ad on an
Oxf or d rel at ed pa ge ta lk in g ab ou t a fix ed in co m e in ve st m en t pa y in g I be li ev e it was

10 an d a ha lf pe rcen t gu aran te ed .” Bi zu b was co nc ern ed be cau se “ typic al ly whe n y ou

se e ad s li ke th is , t he re’s al way s an as te ris k wit h a who le bu nc h of di sc la im er at th e
bo tt om ; and [h e di d no t] se e an as te ris k or an y di sc la im er.” Bi zu b cli ck ed a li nk on

th e web si te an d se nt an em ai l wit h th e su bjec t l i ne , “ How’s 10 .5% fix ed ret ur n

so un d,” an d req ue st ed

, “ Pl eas e te ll m e m or e ab ou t th is in ve st ment .” Bec km an ’s

c o ll eag ue , Gen e W al de n, fo rward ed Bi zu b’s em ai l to Bec km an , st at in g, “ Ju st go t

th is —h e m

us t h av e se en th is in ou r e-n ews le tt er o n t he web s it e.”

-4

-Bec km an fo rward ed th e em ai l to Co ok

, writ in g, “ Now th e sh ip be gi ns to si nk

.

Thi s is no t go od

. I w i l l n e e d l e s s to sa y ta ke care of it , I jus t wan te d y ou to kn ow.”

Co ok wro te ba ck to Bec km an , “ I am ve ry so rry ab ou t th is

. . . . I th in k th e go od ne ws
is th at

. . . we can bl am e it on a tra in ee sa le s rep who was fir ed

. . . sa y no th in g he di d

was ap pr ov ed

. . . al so sa y we ha ve op in io n let te rs fro m at to rn ey s abo ut th e pr od uc t

. . . . S o pl eas e se e m e if y ou wou ld li ke an y am m un it io n to res po nd

. . . . In di vi du al ly m an ag ed acco un ts is ve ry im [p ]orta nt

. . . rem em

be r th is bu ll et po in t.”

Eve n aft er t h e sh ip be ga n to si nk

, Bec km an st il l so li ci te d ov er $1 2 m il li on in

ad di ti on al in ve st or fun ds in to no n- se gr eg at ed acco un ts

.

So m e of th e vi ct im s le arn ed of th e cu rren cy pr og ram th ro ug h Geral d Dur an d’s

ra dio show s, “ E xpa

nd Y our W ea lth ” an d “ W eal th Su rv iv al ”—o n whi ch Bec km an wa s

a gu es t. Dur an d al so so li ci te d in ve st or s by ad ve rti si ng “ ed uc at io na l wor ks ho p[ s],”

st at in g he an d “ UBS Div ers ifi ed

, whi ch m an ag es ov e r 2 b i ll io n do ll ars in as se ts ,”

co ul d ad vi se ho w to “ do ub le y ou r m on ey in le ss th an 5 y ears ” an d “ earn 15 % pe r y ear
wit h no ris k.” Dur an d te st ifi ed at a he ari ng in a rel at ed ci vi l cas e th at Co ok ch os e th e

na m e “ UBS Div ers ifi ed ” “ to co nf us e pe op le .” Fo r ex am

pl e, Bec km an em ai le d to on e

of hi s in ve st or s th at th e “ fix ed in co m e al te rn at iv e” wou ld y ie ld “ 12 % fo r 12 m on th s

an d [was ] ba ck ed by UBS (n ot so m eo ne we m et on th e st reet ),” an d th e in ve st or was

l e d t o be li ev e “ UBS” m ean t th e Uni on Ban k of Swit zerl an d. Bec km an ’s br oc hu r e

in cl ud ed th e ge nu in e UBS lo go on th e la st pa ge , al on g wit h se ve ral ot he r in ve st m en t

ba nk s. Dur an d tes ti fie d th e sc he m ers st op pe d us in g th e fu nd na m e “ UBS” afte r th e
Swis s b an k s ue d t he m

.

One in ve st or vi ct im te st i f i ed th at aft er li st en in g to Dur an d’s rad io sh ow, he

at te nd ed si x or se ve n se m in ars whe re “ th e em cee wo ul d k ic k t hi ng s o ff . . . and say

th at th es e are so m e of th e m os t br il li an t pe op le th at he kn ows in th e fin an ci al in du st ry

. . . a nd th en

. . . he wo ul d h av e . . . Jerry Duran d co m e up an d gi ve a li tt le sp ie l fo r

15 m in ut es , th en [J as on ] Bec km an , th en Trev or Co ok

, an d th ey wou ld al l gi ve th ei r
de al

. . . . I th ou gh t th es e pe op le were th e be st an d th e br ig ht es t. And I’m us ua ll y a

-5

-ve ry co ns erv at iv e type pe rs on an d th ey real ly so ld m e.” The in ve st or an d hi s fam il y

lo st ov er $ 37 0,5 00

.

Dur an d, who was al so “ Man ag in g Dire ct or ” of Oxfor d G lob al A dviso rs , pl aced

h i s na m e on a UBS Div ers ifi ed ve rs io n of th e “ Fed eral Fu nd s In co m e Ad v a n t a g e ”

br oc hu re, whi ch pr om is ed “ [i]nt eres t rat es

. . . [c]red it ed at 12 % an nu al ly” an d st at ed

, “Th e en ti re co nt en ts of th is br oc hu re is so le ly th e res po ns ib il it y of UBS

Div ers ifi ed

. . . . Fo r m or e in fo rm at io n, pl eas e co nt act Geral d J. Dur an d.” Dur an d

wro te an in ve st or th at UBS Div ers ifi ed ’s cu st om er fu nd s were “ in su red by m eas ur es

en act ed by th e Fed eral Gov ern m en t” an d “ h e l d in se gr eg at ed acco un ts ,” an d th at

Dur an d’s “ pe op le ” at th e fir m were li c e ns ed br ok ers

. Bas ed on Dur an d’s

rep res en ta ti on s t ha t t he in ve st or ’s fun ds wou ld be he ld in a se gr eg at ed acco un t an d

th e pr in ci pa l co ul d no t be lo st

, th e in ve st o r mo r t g a g ed hi s ho m e, en tru st ed th e

pr oc eed s an d m or e to Dura nd , and lo st sev eral m il li on do ll ars

.

Kil ey al so ha d a rad io sh ow, “ Fo ll ow th e Mo ne y .” Kil ey ’s r ad io sh ow was
br oa dc as t on a Ch ris ti an rad i o st at io n, an d Kil ey de sc rib ed hi m se lf as a Ch ris ti an

m an —“ he al way s cl os ed hi s br oa dc as t wit h a pr ay er.” One of Kil ey ’s earl y in ve st or s,
Duk e Thi et

je, st at ed th is “ ha [d ] an im pa ct on [h is ] in ve st m en t de ci s i o n ” b e cau se [Thi et je] was “ a pe rs on of th e Bi bl e [h im ]self [an d] wan te d so m eo ne who was of

pe rs on al in te gr it y .” On th e rad io

, Kil ey ga ve a ph on e nu m be r th at li st en ers co ul d cal l

fo r m or e in fo rm at io n— Kil ey wou ld th en ta lk wit h th e cal le r an d se nd br oc hu res fro m

“ UBS,” cl ai m in g it was a “ reg is te red fin an ci al ad vi so ry fir m .” W hi le te ll in g po te nt ia l

i n v es to rs th ei r fu nd s wou ld be ke pt in se gr eg at ed acco un ts

, Kil ey pe rs on al l y
de po si te d m an y in ve st or s’ fu nd s in to th e sa m e acco un t an d al so wro te ch eck s to

sa ti sf y oc cas io na l wi th dr awal req ue st s.

Kil ey ’s rad io sh ow al so su gg es te d li st e n e r s co ns ul t hi s web si te

, www.pat ki le y .co m, whe re he li ed ab ou t hi s own cred en ti al s, st at in g he was “ an

in de pe nd en t fin an ci al an al y st fo r a m ul ti bi ll io n do ll ar co rp or at io n” an d “ [h ]is cl ie nt s

-6

-ran ge fro m to p in te rn at io na l fu nd s an d ba nk s to th e ev eryday in ve st or .” Kil ey ’s

web si te ad ve rti se d “ The W ea lth Ma na ge m en t Gro up ” th at “ cu rren tl y ov ers ees se ve ral

bi ll io ns in as se ts ” an d “ pr ov id es in di vi du al in ve st or s acce ss to arb it rag e,” kn own as

“ a ri sk -le ss tra ns act io n” wit h “ in di vi du al ly se gr eg at ed ” cu st om er ac co un ts th at are

“ to ta ll y li qu id .” Kil ey to ld Thi et je “ th e fu nd s wou ld be tra de d in fo rei gn cu rren ci es

an d it was a rat he r su cces sf ul pr og ram , ha vi ng st op s an d so on , s o t h ere wou ld be

li tt le ch an ce to real ly l os e a la rg e am ou nt .” Thi et je t es ti fie d Kil ey ’s r ep res e n t a t i o n

of “ co m pl et e sa fet y ” fo r hi s fu nd s “ was th e m os t de te rm in in g fact or ” in hi s de ci si on

to in ve st wit h Ki le y . Th ie tje st at ed Kil ey ’s r ep res en ta ti on s le d hi m to co nc lu de hi s

fu nd s “wo u l d b e s a fer in th e pr og ram th an wit h [h is ] ba nk .” Thi et je lo st

ap pr ox im at el y $3 40 ,00 0. Und et erre d aft er Th i e tje’s lo ss , Kil ey an d hi s

rep res en ta ti ve s rep eat ed th e sa m e pr o mi s e s on hi s rad io sh ow, hi s web si te

, an d in

br oc hu res an d le tt ers to cu rren cy pr og ram in ve s t o r s who lo st th ei r in ve st m en ts jus t

as Thi et je di d. Ki l ey “ was a m on ey m ach in e” who “ br ou gh t in th e va st

m ajor it y ”—a bo ut two th ird s— of th e m on ey

in ve st ed in th e cu rren cy

pro gr am

.

B. Pro cedu ra l H is to ry

A jury f o u n d th e de fen da nt s gu il ty on al l co un ts ch arg ed ag ai ns t th em in a

se co nd su pe rs ed in g in di ct m en t (in di ct m en t). As rel e v a n t t o th is ap pe al

, al l th ree
de fen da nt s wer e co nv ic te d of co m m it ti ng or a id in g a nd ab et ti ng th e co m m is si on of

wire frau d or m ai l fr au d i n v io la ti on of 1 8 U.S.C. § § 2 , 13 41 , and 13 43 ; con sp ira cy

to co m m it m a i l f

r au d an d wire frau d in vi ol at io n of 18 U.S.C. § 13 49 ; an d m on ey

la un de rin g in vi ol at io n of 18 U.S.C. §§ 2 an d 19 57

. Bec km an , in di vi du al ly, was al so

co n v i c te d of co m

m it ti ng or ai di ng an d ab et ti ng th e co m m is si on of wire frau d

reg ard in g hi s in te ract io ns wit h el de rly v i c t i ms Ch arl ot te an d Raym on d Ols on in

vi ol at io n of 18 U.S.C. §§ 2 an d 13 43 ; co m m it t i n g or ai di ng an d ab et ti ng th e

c o m m is si on of m ai l frau d, reg ard in g hi s at te m pt to pu rch as e an in te res t i n t h e

Mi nn es ot a W il d ho ck ey te am of th e Nati on al Hoc ke y Leag ue (NHL) in vi ol at io n of

18 U.S.C. §§ 2 an d 13 41 ; a n d f i l i n g fal se ta x ret ur ns in 20 07 an d 20 09 an d ta x

ev as io n in 20 08 in vi ol at io n of 26 U.S.C. §§ 7 2 0 1 a n d 7 2 0 6( 1)

. The di st ric t co ur t

-7

-se nt en ced Bec k man to 36 0 m on th s im pr is on m en t an d Dur an d an d Kil ey to 24 0

m on th s i m

pr is on m en t.

II

. DISCUSS IO N

A. Ev id enti ar y Rul in gs

“ W e rev ie w ev id en ti ary ru li ng s of a di st ric t co ur t fo r ab us e of di sc r et io n, gi vi ng su bs ta nt ia l de fere nc e to th e di st ric t co ur t’s de te rm in at io ns

. Th i s c o u rt m ay

rev ers e o nl y

if a n erro r ‘affect s th e su bs ta nt ia l rig ht s of the de fen da nt ’ or ha s ‘m or e

th an a sl ig ht in flu en ce on th e [jury’ s] ve rd ic t.’” Uni te d St at es v. Man ni ng , 73 8 F.3 d

93 7, 94 2 (8 th Ci r. 20 14 ) (al te rat io n in or ig in al ) (in te rn al ci ta ti on s om it te d) (q uo ti ng
Uni te d S ta te s v . Yarri ng to n, 6 34 F.3d 44 0, 4 47 (8t h C ir. 2 01 1) ).

1. Feder al Rule of E vi denc e 4 04 (b)

“ Evi de nc e of a cri m e, wro ng , or ot he r act is no t ad m is si bl e to pr ov e a pe rs on ’s

ch arac te r in or de r to sh ow th at on a pa rti cu la r oc cas io n th e pe rs on act ed in acco rd an ce
wit h th e ch arac te r.” Fed

. R. Evi d. 40 4( b) (1 ). Bu t “ [t]hi s ev id en ce m ay be ad m is si bl e

fo r an ot he r pu rp os e, su ch as pr ov in g m ot iv e, op po rtu ni ty, in te nt , p rep arat io n, pl an , kn owl ed ge , id en ti ty, ab se nc e of m is ta ke

, or la ck of acci de nt .” Id

. 40 4( b) (2 ). To be

ad m is si bl e at tri al , pri or act s m us t:

(1 ) be rel ev an t to a m at eri al is su e rai se d at tri a l

, (2 ) be si m il ar in ki nd

an d cl os e in ti m e to th e cr i me ch arg ed

, (3 ) be su pp or te d by su ffi ci en t

ev id en ce to su pp or t a fin di ng by a jury th at th e de fen da nt co m m it te d th e
ot he r act

, an d (4 ) no t ha ve a pr ejud ic ia l va lu e th at su bs ta nt ia ll y

ou twei gh s i ts pro ba ti ve va lu e.

Uni te d St at es v. Turn er, 58 3 F.3 d 10 62

, 10 66 (8 th Ci r. 20 09 ). W e rev ie w th e di st ric t

co ur t’s Ru le 40 4( b) de ci si on s fo r ab us e o f di sc ret io n. Se e id . at 1 06 5.

-8

-a. Bec k m an

Bec km an cl ai m s th e di st ric t co ur t im pr op erl y ad m it te d se ve ral pi eces of

da m ag in g ch arac te r ev id en ce. Fi rs t, Bec km an ad m it s he was “ in vo lu nt ari ly

di se nr ol le d” fro m th e Air Fo rce Acad em y “ fo r lying .” Seco nd

, th e go ve rn m en t st at ed

it in te nd ed to in tro du ce ev id en ce th at Bec km a n p u r p or te dl y fo rg ed hi s m ot he r’s

si gn at ur e on two st ud en t lo an ap pl ic at io ns

. The di st ric t co u r t gr an te d Bec km an ’s

m ot io n in li m in e to ex cl ud e bo th li ne s of i nq ui ry bu t s ta te d i n t he or de r—a nd ag ai n
be fo re Be ck m an to ok th e st an d— th at th e g ov ern m en t co ul d in tro du ce t he ev id en ce

“ fo r im pe ach m en t pu rp os es .” On Bec km an ’s cro ss -ex am in at io n, th e di st ric t c o u rt

pr op erl y ad m it te d bo th pi eces of ev id en ce un de r Fe de ral Ru le of Evi de nc e 60 8( b)

. See Ru le 60 8( b) (1 ) (“ [T]he co ur t m ay , on cro ss -ex am in at io n, al lo w [s pe ci fic

i n s t an ces of co nd uc t] to be in qu ire d in to if th ey are pr ob at iv e of th e ch arac te r fo r

tru th fu ln es s o r un tru th fu ln es s o f . . . the wit ne ss .”); cf. Ru le 40 4( b) (2 ).

Fi na ll y , at tri al

, Bec km an ’s m ot he r st at ed th at aro un d 20 0 2

, s h e s u ed hi m as

pe rs on al rep res en ta ti ve of hi s gr an df at he r’s es ta te af

t e r h e ( 1) m or tg ag ed hi s

gr an df at he r’s ho us e to pa y hi s own de bt s; (2 ) po ck et ed th e pr of it fro m th e la te r sa le

of th e h ou se ; an d (3 ) fai le d to di st rib ut e ot he r as se ts —t es ti m on y Bec km an al so ha d

at te m pt ed to ex cl ud e wit h a m ot io n in li m in e. Bec km an co m pl ai ns th e di st ric t co ur t

erre d by ad m it ti ng th is Ru le 40 4( b) ev id en ce be cau se th e ev en ts were rem ot e in ti m e

an d th e ev id en ce co ul d ha ve ha d “ an in cen di ary effe ct .” Alt ho ug h th e ev id en ce was
rel at iv el y rem ot e, th e go ve rn m en t ex am in ed Bec km an ’s m ot he r on th e s e p o i n ts to

refu te Bec km an ’s st at em en t to th e NHL th at he in ve st ed th e pr in ci pa l of hi s

gr an df at he r’s es ta te fo r th e be ne fit of hi s m ot he r. The ev id en ce was di rect ly rel ev an t

to th e ch arg es ag ai ns t Bec km an of de frau di ng th e NHL, an d “ ‘[t]his co ur t gi ve s gr eat

de fere nc e to th e di st ric t co ur t’s weig hi ng of th e pr ob at iv e va lu e of ev id en ce ag ai ns t

it s pr ejud ic ia l effe ct .’ ” Uni t e d St at es v. Gan t, 72 1 F.3 d 50 5, 51 0 (8 th Ci r. 20 13 )
(q uo ti ng Uni te d S ta te s v . Ty erm an , 70 1 F.3 d 55 2, 56 3 (8 th Ci r. 20 12 )); se e Fed . R.

Evi d. 40 3. The di st ric t co ur t d i d n o t ab us e it s di sc ret io n in ad m it ti ng Bec km an ’s

m ot he r’s te st im on y

.

-9

-b. Dura nd

In a pr et ria l or de r, th e m ag is tra te jud ge req ui red th e go ve rn m en t to di sc lo se an y

Ru le 40 4( b) ev id en ce “ no le ss th an thi rty da ys be fo re tri al .” The “ go ve rn m en t’s tri al

m em or an dum

, 40 4( b) no ti ce, m ot io ns in li m in e an d m em or an du m in su pp or t the re of

, ”

fil ed Mar ch 6, 20 12

, st a t e d

, “Th e tri al ev id en ce wil l sh ow th at Trev or Co ok an d

Geral d J. Dur an d an d th ei r as so ci at es – th e pe op le ru nn in g th e cu rren cy pr og ram th at

Mr. Bec km an rep eat ed ly pr om ot ed as a pr in ci pa l-p ro te ct ed

, le gi ti m at e, pr ud en t

in ve st m en t – ro ut in el y dr an k al co ho l an d/ or us ed dr ug s at th e m an si on to th e po in t

of m or bi d in to xi cat io n.” Thi s se nt en ce was in cl ud ed in a se ct io n of th e do cu m en t th at

ad dr es se d Bec km an , n o t D u r a n d, an d di d no t sp eci fic al ly refe r to Ru le 40 4( b)

. As

su ch

, Dur an d cl ai m s he was no t gi ve n no ti ce as req ui red by th e m ag is tra te jud ge , ev en

th ou gh tri al be ga n on Apr il 19

, 20 12

, m or e th an th irt y da y s aft er th e go ve rn m en t fil ed

it s no ti ce. W hi le th e go ve rn m en t di d no t in cl ud e th e ch al le ng ed dr ug in fo rm at io n

un de r a 40 4( b) he a d in g sp eci fic al ly ad dr es se d to Dur an d, th e do cu m en t st il l ga ve

Dur an d no ti ce of th e ev id en ce th e go ve rn m en t in te nd ed to in tro du ce, effe ct i v e ly

sa ti sf y in g t he m ag is tra te jud ge ’s ord er. 4

A t tr ial, th e go ve rn m en t in tro du ced wit ne ss St ep ha ni e Bo lt on , Dur an d’ s fo rm er

as si st an t. Bo lt on te st ifi ed

, ov er Dur an d’s ob jecti on , sh e wou ld sm ok e m ari juan a at

5

th e cu rren cy pr og ram pl ace of bu si ne ss th ree to fo ur d a ys a week

, on a da il y ba si s

Dur an d wou ld in te ract wit h cl ie nt s “ wh e n h e was st on ed ,” an d Dur an d kn ew Co ok

co nd uc te d bu si ne ss whi le dr un k. Dur an d no w arg ue s th e di st ric t co ur t e r red by

al lo win g t he tes ti m on y . See Fed . R. Evi d. 4 01 , 40 3, 4 04 (b ).

Befo re th e no ti ced wit ne ss te st ifi ed in fro nt of th e jury, th e di st ric t co ur t he ard 4

arg um en t o n Du ran d’s m ot io n.

Dur an d al so arg ue s he ha d no no ti ce be cau se th e go ve rn m en t’s m em o refe rred 5

to “ dr ug s,” an d no t sp eci fic al ly “ m ari juan a.” Dur an d’s arg um e n t i s sp eci ou s— he

, to o, us es th e te rm s in te rch an ge ab ly in h i s b rie f—a nd we reject th is di si ng en uo us
arg um en t.

-1 0-Afte r Bo lt on ’s te s t i mo n y , a juro r ad vi se d th e di st ric t co ur t th e juro r, to o,

sm ok ed m ari

juan a, an d he m ay ha ve be en “ m or e sym pa th et ic to ” Dur an d. The di st ric t

co ur t rem ov ed th e juro r on th e g ov ern m en t’s m ot io n. Lat er, Du ran d m ov ed to vo ir

di re th e rem ai ni ng jury m em be rs as to m ari

juan a us e, whi ch th e di st ric t co ur t de ni ed

. Dur an d a pp eal s t hi s d eci si on as we ll

.

The di st ric t co ur t di d no t ab us e it s di sc ret io n by de cl in in g to as k al read y

im pa ne ll ed juro rs qu es ti on s a bo ut th ei r vi ews co nc ern in g il le ga l dr ug us e on th e

se ve nt h da y of a l e n gt hy, co m pl ic at ed tri al

. Dur an d was on no ti ce fro m th e

go ve rn m en t’s tri al br ie f th at it in te nd ed to in tro du ce su ch ev id en ce, so Dur an d co ul d

ha ve fil ed a m ot io n to as k su ch qu es ti on s hi m se lf on vo ir di r e b e f o re th e jury’ s

im pa ne lm en t. W hi le it m ay st rai n cred ul it y to im ag in e th is dr ug an d al co ho l ev id en ce

was ne ces sa ry to th e go ve rn m en t’s cas e, we rev ers e “ ‘onl y whe n th e ev id en ce cl earl y
ha d no be ari ng on th e cas e an d was in tro du ced so le ly to sh ow de fen da nt ’s pr op en si ty

to en ga ge in cri m in al m is co nd uc t.’” Gan t, 72 1 F.3 d at 50 9 (q uo ti ng Uni te d St at es v.

F ari sh

, 53 5 F.3 d 81 5, 81 9 (8 th Ci r. 20 08 )). The di st ric t co ur t di d n o t a b u s e i t s

co ns id erab le di sc ret io n in ev id en ti ary m at te rs by al lo win g th e m ari juan a te st im on y

.

2. Hy po thet ic al Ques tio ns

Bec km an ob

jects to wha t h e c a l l s th e go ve rn m en t’s us e of “ gu il t as su m in g hypo th et ic al s” du rin g tri al

. See Uni te d St at es v. Bart a, 88 8 F.2 d 12 20

, 12 24 -2 5 (8 th

Ci r. 19 89 ) (h ol di ng th e di st ric t co ur t erre d by al lo win g “ qu es ti on s pr em is ed on an

as su m pt io n of gu il t” ). Bec km an ob jecte d to two su ch qu es ti on s earl y in th e tri al

, bu t

ad m it s he op te d no t to ob ject to th e qu es ti on s he ch al le ng es on ap pe al be cau se

“ fu rth er ob

jecti on s wou ld on ly hi gh li gh t [th e is su e] fo r th e jury.” W e no w rev ie w fo r pl ai n erro r

. S e e U ni te d St at es v. Bi g Eag le

, 70 2 F.3 d 11 25

, 11 30 (8 th Ci r. 20 13 ).

“ Und er pl ai n erro r rev ie w,” Bec km an “ m us t sh ow ‘tha t th e di st ric t co ur t co m m it te d

an erro r th at is cl ear or ob vi ou s, th at th e erro r affe ct ed hi s su bs ta nt ia l rig ht s, an d th at

th e erro r se rio us ly affe ct s th e fai rn es s, in te gr it y , or pu bl ic r e p u t a t i on of jud ic ia l

-1 1-pr oc eed in gs .’ ” Id

. (q uo ti ng Uni te d St at es v. Troyer, 67 7 F.3d 35 6, 35 8- 59 (8 th Ci r.

20 12 )).

The di st ric t co ur t di d no t err, pl ai nl y or ot he rwis e, by al lo win g wha t Bec km an
de sc rib es as th e hypo th et ic al qu es ti on s. Fi rs t, Bec km an do es no t ad eq ua te ly de ve lo p

an ar g u men t ab ou t m os t of th e ch al le ng ed hypo th et ic al qu es ti on s, m erel y reci ti ng

th em in fo ot no te s and co nc lu si ve ly st at in g t he qu es ti on s as su m e gu il t, so we do no t

ad dr es s th e un de ve lo pe d ch al le ng es he re. See Fed

. R. App

. P. 28 (a)( 8) (A); Ro ts ko ff

v. Co ol ey , 43 8 F.3 d 85 2, 85 4 (8 th Ci r. 20 06 ) (d ecl ari ng an arg um en t waiv ed whe n no t

de ve lo pe d i n a pp el la te bri ef).

Bec km an do es arg ue th e di st ric t co ur t cl earl y erre d by al lo win g th e fo ll owi ng

li ne of qu es ti on in g of Ji te sh Meh ta

, who wor ke d as an un li cen s e d b r o ke r fo r

Bec km an :

Q. I wan t to cal l y ou r at te nt io n to th e da te he re. The da te of th is

e-m ai l i s Oct ob er 2 1, 2 00 8; is th at co rrec t?

A. Tha t’s co rrec t.

Q. Pri or to th is ti m e ha d Mr. Bec km an in di cat ed to y ou at al l th at in Aug us t of 20 08 he was to ld th at th is was a Po nz i sc he m e or ve ry li ke ly a Pon zi sch em e?

A. No, I was no t t ol d.

Befo re Meh ta ’s te st im on y , Mar ti n Klo tz

, an at to rn ey wit h th e W il lk ie Farr la w

fi rm (Will ki e Farr ), te st ifi ed he ha d rep res en te d Oxf or d Glo ba l Adv is or s an d had be en

ret ai ne d “ to an al y ze th e [cu rren cy ] pr og ram an d gi ve ad vi ce on th e le ga li ty of it .”

Klo tz te st ifi ed he to ld Bec km an , “ [i]n su bs ta nc e,” th at he th ou gh t Co ok was “ a cro ok ”

who was “ li ke ly ru nn in g a Po n z i s ch em e.” So th e qu es ti on to Meh ta was no t a

-1 2-hypo th et ic al

, bu t rep eat ed an as se rti on al read y in ev id en ce. The di st ric t co ur t di d no t

pl ai nl y err i n a dm it ti ng Meh ta ’s tes ti m on y

.

3. In tern al Reve nue Se rv ic e (I RS) Age nt Ma tthe w Scho m m er On ap pe al , th ou gh no t at tri al , B eck m an ob jects to qu es ti on s t he go ve rn m en t

as ke d IR S Age nt Mat th ew Sch om m er. Aga in , we rev ie w fo r pl ai n erro r. Bec km an

sp eci fic al ly objec ts to th e u se of t he ter m “ in ve st ig at iv e si gn ifi can ce”:

Q. Bas ed on y ou r in ve st ig at io n in th e cas e, Age nt Sch om m er -- well

, wha t if any

, in ve st ig at iv e si gn ifi can ce did th is ha ve ? Let’s pu t it
th at way

.

A. The vi ct im in ve st or s th at are pu rp or te d he re to ge t wire tra ns fers

ne ve r rec ei ve d t he m on ey

.

Age nt Sch om m er m ad e a st at em en t of fact

, th at th e vi ct im s di d no t rece iv e th e m on ey ,

an d Bec km an cl ai m s Age nt Sch om m er was dr awin g in ap pr op ria te co nc lu si on s ab ou t

th e ev id en ce. Aga in in a fo ot no te

, Bec km an ci te s ov er a do zen ot he r in st an ces of us e

of th e te rm “ in ve st ig at iv e si gn ifi can ce,” to whi ch h e di d no t ob ject at tri al

. Bec km an ’s c on te nt io n is wit ho ut m eri t. Bec km an ha s no t sh own an y erro r (if on e

ex is te d) affe ct ed Bec km an ’s su bs ta nt ia l rig ht s or “ ‘seri ou sl y affe ct [ed ] th e fai rn es s,

in te gr it y , or pu bl ic rep ut at io n of jud ic ia l pr oc eed in gs .’ ” Bi g Eag le

, 70 2 F.3 d at 11 30
(q uo ti ng Troyer, 67 7 F .3d at 3 58 -5 9)

.

Bo th Bec km an an d Duran d als o cha ll en ge Age nt Sch om m er’s test im on y as a

la y wit ne ss

. The y cl ai m on ap pe al

, as Dur an d ob jec t e d a t tri al

, th e go ve rn m en t’s 6

On on e oc cas io n du rin g Age nt Sch om m er’s te st im on y sp an ni ng fiv e da y s, th e 6

di st ric t co ur t erra nt l y s t a t e d Age nt Sch om m er was an ex pe rt. So on th erea fte r, th e
go ve rn m en t ag reed wit h Dur an d th at Age nt Sch om m er was no t te st ifyin g a s a n

ex pe rt, bu t as a su m

m ary wit ne ss , whi ch Bec k man cl ari fie d at th e be gi nn in g of hi s

cro ss -ex am in at io n o f Age nt Sch om m er.

-1 3-qu es ti on s el ic it ed la y op in io n te st im on y in vi ol at io n of Fed eral Ru le of Evi de nc e 70 1.

Age nt Sch om m er’s te st im on y was ba se d up on hi s wor k as cas e ag en t in th is ca se , an d

“ th e ‘test im on y of a su m m ary wit ne ss m ay be rece iv ed s o lo ng as []he ba se s h[ is ]

su m m ary on ev id en ce rece iv ed in th e cas e a n d is av ai la bl e fo r cro ss -ex am in at io n,”

Uni te d St at es v. Ro bi ns on , 43 9 F.3 d 77 7, 78 1 (8 th Ci r. 20 06 ) (q uo ti ng Uni te d St at es

v. Kin g, 61 6 F.2 d 10 34

, 10 41 (8 th Ci r. 19 80 )). The di st ric t co ur t di d no t ab us e it s
di sc ret io n b y

ad m it ti ng Agen t Sc ho m

m er’s t es ti m on y

.

4. Atto rney -Cli ent Pri vi le ge

In Feb ru ary 2 00 8, Bec km an pe rs on al ly h ire d K a r i B e r m an of th e Bri gg s an d

Mo rg an la w fir m (Bri gg s) wit h reg ard to hi s ap pl ic at io n to pu rch as e an in te res t in th e

M i n n e s o ta W il d NHL te am

. In Feb ru ary or Mar ch 20 08

, “ th e Oxf or d Gro up ” al so

hi red Bri gg s fo r rep res en ta ti on in “ ge ne ra l c o r po rat e an d tra ns act io na l m at te rs .”

Afte r a du e di li ge nc e in ve st ig at io n, in May 20 08

, Bri gg s adv is ed th e Oxf or d Grou p

th at Pet te ng il l in fo rm ed Bri gg s th at no te s so ld by Oxf or d Gl o b al Adv is or s’ ag en ts (OGA Not es ) “ ha ve no t be en reg is te red un de r fed eral or st at e la w an d ha ve no t be en

qu al ifi ed fo r an y ex em

pt io n fro m reg is tra ti on .” Bri gg s ad vi se d th e Oxf or d Gro up to

“ im m ed ia te ly st op al l sa le s an d th e so li ci ta ti on of an y sa le s of OGA Not es .” Bri gg s

st at ed

, “ Bec au se of po te nt ia l co nf li ct s of in te res t be twee n va rio us in di vi du al s an d

en ti ti es an d th e po te nt ia l fo r cri m in al la w co ns eq ue nc es , w e reco m m en d th at y ou

pr om pt ly ret ai n ot he r le ga l co un s e l t o a d v i s e y ou reg ard in g th e pa st sa le s of OGA

Not es an d an y fu tu re act io ns y ou sh ou ld ta ke wit h res pe ct to su ch sa le s.” Bri gg s al so
ad vi se d, “ Dur in g th e co ur se of Bri gg s an d Mo rg an ’s le ga l rep res en ta ti on o f y ou , it

ha s al so co m e to ou r at te nt io n th at o t h e r O x f o r d bu si ne ss act iv it ie s ap pe ar to be in

vi ol at io n of nu m ero us fed eral st at ut es an d reg ul at io ns

. . . . [W] e reco m m en d th at y ou

pr om pt ly retai n o th er l eg al co un se l t o a dv is e y ou reg ard in g s uc h m at te rs .”

The reaf te r, at le as t as of May 20

, 20 08

, two of th e Oxf or d en ti ti es hi red Ro be rt

Men de ls on of th e Mo rg an , Lewis & Bo ck iu s la w fir m (Mo rg an Lewis ) fo r se cu rit ie s

la w ad vi ce. In res po ns e to th e qu es ti on , “ [W] ho was th e pr im ary face of th e cl ie nt ? ”

-1 4-Men de ls on te st ifi ed

, “ I pr im ari ly in te ract ed wit h Mr. Bec km an .” Mo rg an Lewis

wit hd rew it s se rv ic es f

r o m th e Oxf

or d en ti ti es on Ju ne 27

, 20 08

, se nd in g a “ no is y
wit hd rawal le tt er,” be cau se th e at to rn ey s “ reac he d th e co nc lu si on [th ei r] ad vi ce was 7

no t go in g to be fo ll owe d.” The su bjec t li ne of th e wit hd rawal le tt er read “ Ret en ti on

of Mo rg an , Lewis & Bo ck iu s LLP by Oxf or d Glo ba l Ad v i s o rs , LLC an d Oxf or d

PCG” an d rep or te d, “ W e co nc lu de d th at

, at a m in im um , th e in ve st m e n t was no t

m ark et ed in co m

pl ia nc e wit h reg ul at or y req ui rem en ts .” The le tt er li st ed th e rem ed ia l

m eas ur es Mo rg an Lewis ha d reco m m en de d an d st at ed

, “ Des pi te y ou r ag reem en t th at

th es e act io ns sh ou ld be ta ke n, th ey si m pl y ha ve no t.

. . . Giv en th e ci rcu m st an ces , we
be li ev e we ha ve no op ti on ot he r th an to wit hd raw.

. . . W e hi gh ly reco m m en d th at

th es e en ti ti es ob ta in le ga l co un se l to ev al ua te th e is su es we ha ve ou tl in ed he rei n.”

On Ju ly 17

, 20 08

, Oxf

or d Glo ba l Adv is or s, LLC ne xt en ga ge d Mar ti n Klo tz

at W il lk ie Farr

. The su bjec t li ne of W il lk ie Farr ’s en ga ge m en t le tt er read

, 8

“ Rep res en ta ti on of Oxf

or d Glo ba l Adv is or s, LLC,” an d th e le tt er de cl ared

, “ W e are
de li g h t e d t o ha ve th e op po rtu ni ty to rep res en t Oxf or d Glo ba l Adv is or s, LLC (th e
‘Clie nt ’).” Klot z te st ifi ed Beck m an “ was th e fac e o f [h is ] cl ie nt .”

Fi na ll y , Bec km an si gn e d an ot he r pe rs on al rep res en ta ti on le tt er wit h Bri gg s
da te d J ul y

21 , 20 08

.

Men de ls on te st ifi ed a “ no is y wit hd rawal le tt er” “ is a le tt er y ou se nd to a cl ie nt 7

whe n y ou are wit hd rawi ng as th ei r co un se l an d y ou wan t th e reas on s to be read il y
ap pa ren t.”

W it hi n a few week s, Klo tz “m ad e a co m m en t [to Bec km an ] to th e effe ct of 8

. . . [t]he no ti on th at y ou can b o rro w un li m it ed am ou nt s of m on ey in te res t-f ree an d

crea te a ris k- free in ve st m en t is rid ic ul ou s. Am on g ot he r th in gs , so m e cl ev er pe rs on

wou ld ha ve fig ur ed it ou t a lo ng ti m e ag o i f i t w a s t h a t eas y

. Thi s jus t m ak es no

se ns e.”

-1 5-Befo re tri al

, th e di st ric t co ur t de ni ed m ot io ns to qu as h su bp oe na s by la w fir m s

Bri gg s, Mo rg an Lewis

, an d W il lk ie Farr

, al on g wit h Bec km an ’s m ot io ns to ex cl ud e

at to rn ey -cl ie nt co m

m un ic at io ns

. The di st ric t co ur t no te d th e Oxf or d en ti ti es were in

rece iv e r s h i p , se e, e.g ., SEC v. Co ok

, No. 0: 09 -cv -3 33 3 (D. Mi nn

. Dec. 11

, 20 09 )
(s eco nd am en de d or de r ap po in ti ng rece iv er), a n d t h e rece iv er ha d waiv ed th e

at to rn ey -cl ie nt pr iv il eg e. The d i st ric t co ur t fo un d Mo rg an Lewis an d W il lk ie Farr

were hi red to repres en t Oxf or d en ti ti es , no t Bec km an , an d no at to rn ey -cl ie nt pr iv il eg e

a t t ach ed be twee n Bec km an an d ei th er Mo rg an Lewis or W il lk ie Farr

. Att or ne ys

Berm an , Men de ls on , and Klo tz tes ti fie d at tria l, and th e go ve rn m en t in tro du ced th e
le tt ers qu ot ed ab ov e, as well as o th er at to rn ey -cl ie nt co m m un ic at io ns . “ W e rev ie w [th e di st ric t co ur t’s pr iv il eg e] fin di ng fo r cl ear erro r.” Uni te d St at es v. Sp en cer, 70 0

F.3 d 3 17 , 32 0 (8 th Cir . 20 12 ).

Bec km an no w pr op os es th e di st ric t co ur t erre d by ad m it t i n g a t t or ne y -cl ie nt

pr iv il eg ed ev id en ce b ecau se Beck m an so ug ht le ga l adv ic e fro m Mo rg an Lewis an d

W il lk ie Farr fo r hi m se lf pe rs on al ly, as well as o n b eh al f of Oxf or d en ti ti es , a nd th e

pe rs on al rel at io ns hi p can no t be se pa rat ed fro m t he co rp or at e rel at io ns hi p. “ The

at to rn ey -cl ie nt pr iv il eg e pr ot ect s co nf id en ti al co m

m un ic at io ns be twee n a cl ie nt an d

hi s at to rn ey m ad e fo r th e pu rp os e of faci li ta ti ng th e ren de rin g of le ga l se rv ic es to th e
cl ie nt .” Id

. W hi le Bec km an m ay ha ve be en th e “ face of” th e cl ie nt , he was no t t he

cl ie nt it se lf. The May 20 08 Bri g g s l e tt er cl earl y ad vi se d th at th e se pa rat io n of

rep res en ta ti on of Bec km an pe rs on al ly an d th e Oxf or d en ti ti es was of pa ram ou nt

im po rta nc e, an d th e pu rp os e of ret ai ni ng Mo rg an Lewis

, an d th en W il l k i e F a r r,

os te ns ib ly was to acco m

pl is h th at se pa rat io n. The di st ric t co ur t pr op erl y fo un d, ba se d

on th e co rres po nd en ce int ro du ced

, th at Mo rg an Lewis an d W il lk ie Farr rep res en te d

Oxf or d e nt it ie s, n ot Beck m an

.

Si mila rly, th e di st ric t co ur t pr op erl y de ni ed Bec km an ’s m ot io n in li m in e to

ex cl ud e a Ju ly 31

, 20 08

, e mai l f r o m Klo tz to Bec km an —q uo te d in th e

in di ct m en t— th at read s, “ Und er th e m os t op ti m is ti c an al y si s of wha t ha pp en ed he re,

-1 6-. . . th e

. . . in ve st m en t pr og ram is rid dl ed wit h il le ga li ti es : il le ga l sa le of un reg is te red

se cu rit ie s, in ad eq ua te or m is le ad in g di sc lo su res to cl ie nt s, bo th ab ou t th e in ve st m en t

pr od uc t an d ab ou t th e fees

, an d tra ns act io ns by un li cen se d pe rs on s an d en ti t i e s , to

ta ke t h e m os t ob vi ou s ex am pl es .” Bec km an arg ue d to th e di st ric t co ur t th at th e

in tro du ct io n of th e em ai l vi ol at ed hi s at to rn ey -cl ie nt pr iv il e g e w i t h K lo tz

, bu t th e
di st ric t co ur t fo un d (1 ) Bec km an wa i v e d th e pr iv il eg e by di sc lo si ng th e

c o mm u ni cat io n to a th ird pa rty, an d (2 ) th e rece iv er waiv ed th e Oxf or d Gro u p ’s

p r i v il eg e wit h Klo tz

, an d Klo tz di d no t rep res en t Bec km an pe rs on al ly, so th e

pr iv il eg e d id no t ap pl y

.

As to Bri g g s , w h o di d rep res en t Bec km an pe rs on al ly, th e di st ric t co ur t

de te rm in ed th e cri m e-fr au d ex cep t io n to th e at to rn ey -cl ie nt pr iv il eg e ap pl ie d an d

ad m it te d Berm an ’s te st im on y

. See Uni te d St at es v. Zol in

, 49 1 U.S. 55 4, 56 2- 63
(1 98 9) (ex pl ai ni ng th e at to rn ey -cl ie nt pri vi le ge do es no t ext en d to co m m un ic at io ns

reg ard in g fu tu re wro ng do i n g ). W e rev ie w th e di st ric t co ur t’s de te rm in at io n “ fo r
ab us e of di sc ret io n, acco rd in g it s de te rm in at io n co ns id erab le de fere nc e.” In re Gran d

Ju ry Pro ceed in gs , G.S., F.S., 609 F.3d 90 9, 9 13 (8t h C ir. 2 01 0)

.

Bec km an su gg es ts th ere is no ev id en ce he in te nd ed to en ga ge in fu tu re

wro ng do in g whe n he hi red Bri gg s in Feb ru ary 20 08

. The go ve rn m en t in tro du ced

am pl e ev id en ce to th e co nt rary. Fi rs t, t he go ve rn m en t i nt ro du ced an affi da vi t fr om

Jo el Bart h, a fin an ci al an al y st

. The NHL hi red Bart h’s fir m “ to pe rfo rm fin an ci al du e
di li ge nc e on pe rs on s who ap pl y to acq ui re own ers hi p in te res ts in NHL te am s.” Afte r

Bec km an ap pl ie d to be co m e a pa rt own er of the Min ne so ta W il d, Bart h “ pe rfo rm ed

th e fin an ci al du e di li ge nc e on M r

. B e c k m an to as cert ai n if Mr. Bec km an ha d th e

fin an ci al res ou rces he rep or te d.” Bart h r e c e i v e d m os t of Bec km an ’s fin an ci al

in fo rm at io n di rect ly fro m Bri gg s. Fo r ex am pl e, Bec km an pr ov id ed a “ St at em en t of

Fi na nc ia l Con di ti on ” th at st at ed hi s net wor th

, to ge th er with hi s wife, was ov er $2 1

m il li on , in cl ud in g ov er $2 0 m il li on fro m an in ve st m en t in Oxf or d Gro up , LLC. Bart h

do ub te d th e le gi ti m acy of m os t of th e Oxf or d Gro up as se ts

. Bart h fo un d an “ erro r

. . .

-1 7-of su ch m ag ni tu de
– am ou nt in g to m il li on s of do ll ars – th at it ap pe ared to [h im ] th at

[h e] ha d be en m is le d.” Bec km an ha d al so “ rep or te d th ro ug h co un se l th at th e Oxf or d

Gro up ha d at le as t $4 .2 bi ll io n un de r m an ag em e n t

, ” bu t th is “ was st ro ng ly

co nt rad ic te d b y

ot he r rea di ly avai la bl e d at a.”

Seco nd

, IRS Sp eci al Age nt Jo hn Tsch id a al so rev ie wed th e m at eri al s Bec km an

ha d m ad e av ai la bl e to Bart h. Sp eci al Age nt Tsch id a co nc lu de d in hi s affi da vi t, “ W it h

th e as si st a n c e o f Bri gg s an d Mo rg an , Mr. Bec km an pr ep ared an d th en su bm it te d a

la rg e vo lu m e of fal se an d m is le ad in g in fo rm at io n to th e NHL in or de r to frau du le nt ly

in du c e i t t o acce pt hi s own ers hi p ap pl ic at io n an d ev en us ed th e sa m e Bri gg s an d

Mo rg an att or ne y s as refe ren ces on hi s ap pl ic at io n.”

Rel y in g on th e two affi da vi ts an d ad di ti on al ev id en ce rev ie wed in ca mer a , th e
di st ric t co ur t de te rm in ed th e ev id en ce sh owe d an on go in g effo rt to de frau d th e NHL

an d ap pl ie d th e cri m e-fr au d ex cep ti on

. The di st ric t co ur t di d no t ab us e it s di sc ret io n by fin di ng th e cri m e-fr au d ex cep ti on ap pl ie d an d rece iv in g in to ev id en ce th e at to rn ey

co m m un ic at io ns

.

5. Dura nd-Pet teng il l Vi deo Reco rdi ng

Dur i n g t h e go ve rn m en t’s in ve st ig at io n of Bec km an , Dur an d, an d Kil ey , Pet te ng il l ag reed to as si st th e go ve rn m en t by su rrep ti ti ou sl y us in g a vi de o- reco rd in g
de vi ce du rin g a m eet in g wit h Dur an d. The go ve rn m en t m ov ed in li m in e to ex cl ud e

th e ad m is si on of th e reco rd in g at t r i a l

. In res po ns e, Dur an d as ke d to in tro du ce th e

reco rd in g to im

pe ach Pet te ng il l. On May 10

, 20 12

, wit ho ut th e jury pr es en t, th e
di st ric t co ur t he ard arg um en t an d gr an te d th e go ve rn m en t ’s mo ti on , st at in g “ [th e

reco rd in g] wil l b e ex cl ud ed fro m be in g u se d a s i m

pe ach m en t.”

The ne xt da y , May 11

, 20 12

, th e di st ric t co ur t en te red a writ te n or de r gr an ti ng

th e go ve rn m en t’s m ot io n in li m in e as to st at em en ts by Dur an d on ly, st at in g th ey were

ex cu lp at or y an d th eref

or e in ad m is si bl e he ars ay be cau se th ey wou ld be ad va nc ed by

-1 8-Dur an d as pr oo f of “ th e tru th of th e m at te r as se rt e d

. ” F e d

. R. Evi d. 80 1( c)(2 ); se e

al so Fed

. R. Evi d. 80 2; Uni te d St at es v. Edwar ds

, 15 9 F.3 d 1 1 1 7, 11 27 (8 th Ci r.

19 98 ) (“ [E]xcu lp at or y ou t-o f-co ur t de cl arat io ns are no t ad m is si bl e he ars ay .”). In th e
writ te n or de r, th e di st ric t co ur t di d al lo w Dur an d to in tro du ce Pet te ng il l’s st at em en ts

fo r im pe ach m en t pu rp os es

. Tha t da y at tri al

, Dur an d co nf irmed he ha d rece iv ed th e
writ te n o rd er, b ut Dura nd di d n ot us e th e rec or di ng to im pe ach Pet te ng il l.

Day s la te r, du rin g Dur an d’s cro ss -ex am in at io n of Age nt Sc ho m m er, Age nt

Sch om m er ack no wled ge d he co ns id ered the D ur an d- Pe tte ngi ll re co rd in g in pr ep ari ng

fo r tri al

. At th at po in t, Dur an d ag ai n at te m pt ed to en te r th e en ti re reco rd i n g in to

ev id en ce, in cl ud in g Dur an d’s st at em en ts

. Afte r arg um en t at si de ba r, th e di st ric t co ur t

co nf irmed it s wri tt en ord er.

On ap pe al

, Dur an d arg ue s he sh ou ld ha ve be en ab le to p l a y th e reco rd in g
du rin g hi s cro ss -ex am in at io n of Age nt Sch om m er, whe n th e reco rd in g wou ld no t be

of fere d fo r t h e t ru th of th e m at te r as se rte d, bu t rat he r “ to rev eal th e effe ct on SA

Sch om m er who co ns id ered it in fo rm in g la y op in io ns .” Dur an d do es no t of fer an y

sp eci fic s as to ho w t he reco rd in g wou ld ha ve as si st e d th e tri er of fact in ev al ua ti ng Age nt Sch om m er’ s te sti m ony , m er el y co nc lu di ng th e jury wou ld ha ve se en th at Age nt

Sch om m er’s “ co nc lu si on s co ul d n ot ha ve be en ba se d u po n a real in ve st ig at io n.”

“ ‘A st at em en t of

fere d to sh ow it s effe ct on th e li st en er is no t he ars ay .’ ” Uni te d

St at es v. W rig ht

, 73 9 F.3 d 11 60

, 11 70 (8 th Ci r. 20 14 ) (q uo ti ng Uni te d St at es v. Dup ree, 70 6 F.3 d 13 1, 13 6 (2 d Ci r. 20 13 )). Bu t he re, Dur an d do es no t es ta bl is h th e
rel ev an ce of th e Dur an d- Pet te ng il l reco rd i n g in rel at io n to an y effe ct on Age nt

Sch om m er. Unl ik e o th er ca se s whe re we ha ve ad m it te d si m il ar ev id en ce, s ee, e.g ., id

. a t 1 1 7 1 ; Uni te d St at es v. Cl in e, 57 0 F.2 d 73 1, 73 4- 35 (8 th Ci r. 19 78 ), Dur an d

do es no t o f

fer an y hi nt as to ho w th e reco rd in g wou ld be rel ev an t to Age nt

Sch om m er’s in ve s t i g a t i o n. The di st ric t co ur t di d no t ab us e it s di sc ret io n by

ex cl ud in g Dur an d’s st at em en ts on th e reco rd in g as in ad m iss ibl e, ex cu lpa tor

y hears ay

.

-1 9-6. Ki le y’ s O bjec tio ns

Fo r th e fir st ti m e on ap pe al

, Kil ey arg ue s th e di st ric t cou rt erred by ad m it ti ng

im pr op er op in io n te st im on y fro m th ree wit ne ss es

. W e rev ie w fo r pl ai n erro r. See Bi g Eag le , 70 2 F .3d at 1 13 0.

Fi rs t, Kil ey ob

jects to Pet te ng il l’ s te sti m ony (1 ) ag re ei ng Pet te ng il l hi m se lf was “rig ht in th e m id dl e of th is frau du le nt m es s,” (2 ) st at in g th ere was “n o d o u b t i n [Pet te ng il l’s] m in d [th e in fo rm at io n Kil ey ‘put o n hi s web si te ab ou t hi m se lf’] was

fal se ,” an d (3 ) ag reei ng “ th at at so m e po in t in ti m e Mr. Kil ey kn ew th at th is cu rren cy

pr og ram was no t wha t [th e sc he m ers ] were te ll in g pe op le it was .” Kil ey al so ob jects

to at to rn ey Klo tz ’s te st im on y (1 ) th at Klo tz su sp ect ed Be c k man a nd Co ok were

op erat in g a Po nz i sc he m e, an d (2 ) im pl y in g Co ok an d “ Kil ey br ou gh t in bi ll io ns ” an d

to Age nt Sch om m er’s te st im on y th at (1 ) “ th e frau d was ex po se d” rig ht aft er Ju ne 29

, 20 09 , (2) Kil ey

pro vi de d a res po ns e in a ci vi l ca se “ po st th e ti m e th at th e fra ud ha d

be en di sc ov ered ,” an d (3) Kile y ’s de ni al s in an an swe r in th e ci vi l case were “ fal se

. The y are l ie s.”

In each cas e, Kil ey arg ue s th e di st ric t co ur t pl ai nl y erre d by ad m it ti ng im pr op er

op in io n te st im on y , pa rti cu la rly by st at in g “a de fen da nt ’s co nd uc t [w]as ‘fraud ’ or
‘fraud ul en t.’” Sp en cer, 70 0 F.3 d at 321- 22 (r ej ect in g th e de fen da nt ’s “ co nt en ti on th at [th e wit ne ss ’s] te st im on y u s u rp ed th e jury’ s ro le as fact fin de r, an d th ereb y crea te d

un fai r pr ejud ic e” whe n th e wit ne ss “ di d no t e x p r es s an op in io n ab ou t whe th er [th e
de fen da nt ] ha d th e req ui si te men s re a to co m m it f r a u d

. . . or whe th er [th e
de fen da nt ’s] act io ns were fra ud ul en t” ). Even if we a ss um e Sp en cer s ug ge st s t ha t a
wit ne ss who co nc lu de s a de fen da nt ’s act io ns were frau du le nt us ur ps th e jury’ s ro le

, he re, the wit ne ss es us ed th e wor d “ frau d” on ly as a s ho rth an d fo r th e Po nz i sch em e

it se lf, whi ch no on e de ni es

. The te st im on y di d no t “ ‘affect [Kil ey ’s] su bs ta nt ia l
rig ht s, an d

. . . se rio us ly affe ct [] th e fai rn es s, in te gr it y , or pu bl ic rep ut at io n of jud ic ia l

pr oc eed in gs .’ ” Bi g Eag l e , 7 0 2 F

. 3 d at 11 30 (q uo ti ng Troyer, 67 7 F.3 d at 35 8- 59 ).

The di st ric t co ur t d id no t p la in ly err by fail in g t o s tri ke th is tes ti m on y su a sp on te

.

-2 0-Kil ey al so as se rts th e di st ric t co ur t pl ai nl y erre d by al lo win g te st im on y fro m

an ex -wif e an d an ex -g irl fri en d as to hi s al le ge d dr ug us e an d in ab il it y to m an ag e hi s

fin an ces

. Kil ey cl ai m s th e ev id en ce vi ol at ed Fed eral Ru le s of Evi de nc e 40 3 an d 40 4.

The go ve rn m en t cl ai m s th e qu es ti on s ab ou t Kil ey ’s ab il it y to m a n a g e h i s fin an ces

were re le va nt to Kil ey ’s as se rti on s o f hi s fi na nc ia l ac um en , and th e co m m en t ab ou t

dr ug us e was bl ur te d ou t un ex pe ct ed ly fro m th e ex -g irl fri en d. The di st ric t co ur t di d

no t p la in ly err by fail in g t o s tri ke th e te st im on y su a sp on te

. 9

B. Suff

ic ie ncy of t he Ev id ence

Bec k m an an d Kil ey ap pe al th e di st ric t co ur t’s de ni al of th ei r m ot io ns fo r

acq ui tt al on th e gr ou nd s of in su ffi ci en t ev id en ce. “ W e rev ie w th e di st ric t co ur t’s 1 0

de ci si on to de ny th e m ot io n fo r jud gm en t of acq ui tt al de no vo

. ‘W he n rev ie win g th e

su ffi ci en cy

of t he ev id en ce, we co ns id er t he ev id en ce i n t he li gh t m os t fa vo rab le to

th e ve rd ic t ren de red an d acce pt al l reas on ab le i n f e ren ces whi ch te nd to su pp or t th e ju r y ve rd ic t.’” Uni te d St at es v. Bo rd eau x, 57 0 F.3 d 10 41

, 10 47 (8 th Ci r

. 2 0 0 9 )
(in te rn al ci ta ti on om it te d) (q uo ti ng Uni te d St at es v. Ram ire z, 36 2 F.3 d 52 1, 52 4 (8 th

Ci r. 20 04 )). “ E vid en ce supp or tin g co nv ic ti on ‘need no t pr ecl ud e ev ery ou tc om e ot he r

th an gu il ty.’ ” Uni te d St at es v. Pi ers on , 54 4 F.3 d 93 3, 93 8 (8 th Ci r. 20 08 ) (q uo ti ng

R a m ire z, 36 2 F.3 d at 52 4)

. “ If an y in te rp ret at io n of th e ev id en ce wo u l d a l l o w a

reas on ab le -m in de d ju ry

to fin d t he de fen da nt gu il ty b ey on d a rea so na bl e d ou bt , we

m us t up ho ld th e ve rd ic t. Thi s st an da rd of rev ie w is ve ry st ric t, ‘and th e jury’ s ve rd ic t

is no t to be li gh tl y ov ert ur ne d.’” Uni te d St at es v. Teag ue , 64 6 F.3 d 11 19

, 11 22 (8 th

The de fen da n t s c o nt en d th e di st ric t co ur t’s erro rs in ad m it ti ng im pr op er 9

ev id en ce, ev en if ha rm le ss in di vi du al ly, warra nt rev ers al whe n vi ewed cu m ul at iv el y

. “Be c a u s e we ha ve no t fo un d m ul ti pl e erro rs , ha rm le ss or ot he rwis e, we m us t al so reject th is co nt en ti on .” Uni te d St at es v. W il ke ns , 74 2 F.3 d 35 4, 36 4 (8 th Ci r. 20 14 ).

Dur an d st at es he do es no t ch al le ng e th e su ffi ci en cy of t h e e v id en ce, y et he 1 0

do es ap p e a l t h e di st ric t co ur t’s de ni al of a m ot io n of acq ui tt al

, st at in g th e di st ric t

co ur t co m

m it te d “ cu m

ul at iv e rev ers ib le erro r.”

-2 1-Ci r. 20 11 ) (in te rn al ci ta ti on om it te d) (q uo ti ng Uni te d St at es v. Hay es , 39 1 F.3 d 95 8,

96 1 (8 th Cir . 20 04 )).

1. Bec k m an

a. No K no w le dg e

Bec km an pr im ari ly cl ai m s he ha d no kn owl ed ge “ th at Co ok an d Pet te ng il l ran

a Po nz i sc he m e” un ti l “ th e Ph il li ps la wsu it ” hi t th e pa pe rs

. A reas on ab le jury co ul d 1 1

ha ve be li ev ed ev id en ce to th e co nt rary, in cl ud in g th e fo ll owi ng : th e Bri gg s la w fir m May 20 08 le tt er; th e Mo rg an Lewis la w fir m Ju ne 20 08 le t t e r; te st im on y fro m

Men de l s o n t ha t in Ju ne 20 08 he ad vi se d Bec km an “ th ere was th e ve ry st ro ng

po te nt ia l [th e cu rren cy pr og ram ] was an un reg is te red pu bl ic of feri ng ” an d m

us t be

res ci nd ed ; Klo tz ’s Ju ly 20 08 em ai l to Bec km an ad vi si ng th e “ in ve st m en t pr og ram is

rid dl ed wit h i l l e g a l it ie s” ; Klo tz ’s te st im on y he to ld Bec km an in Ju ly 20 08 th e

cu rren cy pr ogr am “ m ad e no se ns e wha ts oe ve r,” “ a ris k- free in ve st m en t is rid ic ul ou s,”

an d “ th e in it ia l of

feri ng to th e Oxf

or d Glo ba l Adv is or s in ve st or s was li ke ly il le ga l” ;

an d Co ok ’s Aug us t 20 08 em ai l to Bec km an ou tl in in g a pl an t o c o v e r th ei r tra ck s
whe n an ou ts id er qu es ti on ed th ei r web si te ’s pr om is e of a 10 .5% fix ed rat e. App lying

al l i nf eren ces su pp or ti ng th e v erd ic t, we ac cep t th e jury’ s con cl us io n th at Bec km an

was aware o f th e sc he m e as it un fo ld ed pri or to Ju ly 200 9.

b. The O ls on s

Bec kma n was fo un d gu il ty as ch arg ed in Co un ts 14 an d 15

, co m m it ti ng or

ai di ng an d ab et ti ng th e co m m is si on of wire frau d, reg a r d i n g h is in te ract io ns wit h

el de rly vi ct im s Ch arl ot te an d Raym on d Ols on , wh o s e t ru st lo st al m os t $5 m il li on

. Bec km an cl ai m s he ha d n o i nt en t to de frau d th e Ols on s. Am on g ot he r ev id en ce

In Ju ly 20 09

, nu m ero us in ve st or s su ed Co ok

, Dur an d, an d m an y of th e UBS 1 1

an d Oxf or d en ti ti es

. See Ph il li ps v. Co ok

, No. 0: 09 -cv -1 73 2 (D. Mi nn

. Ju ly 7, 20 09 ) (co m pl ai nt )

.

-2 2-su pp or ti ng th e ch arg es , th e go ve rn m en t pr od uc ed a le tt er os te ns ib ly writ te n by 1 2

Raym on d Ols on tra ns ferr in g $1 .97 5 m il li on th at ViaS ou rce F u n d i ng Gro up , LLC
(Via So ur ce) was to rece iv e fro m Ols on ’s Bea r St earn s Secur iti es Co rp

. (Bea r St earn s)

acco un t to a ne w acco un t no t n am ed in th e le tt er, al on g wi th a le tt er d at ed th e sa m e
da y fro m Bec km an to ViaS ou rce di rect in g th e wire tra ns fer of th e Bea r St earn s fu nd s

to Oxf or d Glo ba l Adv is or s, LL C. A su bs ta nt ia l part of th e $1 .97 5 m il li on was th en

tra ns ferr ed to ot he r Oxf

or d en ti ti es

. Mr

. O l s on te st ifi ed at tri al he di d no t reca ll

writ in g th e le tt e r an d di d no t reca ll ha vi ng he ard of ViaS ou rce. A reas on ab le jury

co ul d co nc lu de Bec km an in te nd ed to de f rau d th e Ols on s an d pr ep ared th e le tt er to

acce ss an d m is ap pr op ria te th e $ 1.9 75 m il li on

.

c. The NH L

Bec k man was fo un d gu il ty as ch arg ed in Co un ts 16 an d 17

, co m m it ti ng or

ai di ng an d ab et ti ng th e co m m is si on of mai l f

rau d, reg ard in g two ap pl ic at io ns

Bec km an su bm it te d in hi s effo rt to pu rch as e an in te res t in th e Mi nn es ot a W il d. The

fir st ap pl ic at io n as ke d, “ Hav e y ou ev er be en a pa rty to an y li ti ga ti o n , i n c l u d i ng

li ti ga ti on al le gi ng ha ras sm en t or di sc riminat io n?

. . . If y es , at ta ch Sch ed ul e G se tt in g

fo rth [ad di ti on al in fo rm at io n].” Bec km an an swe red “ y es ” an d at ta ch ed Sch ed ul e G,

bu t h e d id no t i nc lu de th e fact th at hi s m ot he r su ed hi m wit h reg ard to hi s h an dl in g

of hi s gr an df

at he r ’s e s ta te

, hi s em

pl oyer su ed hi m fo r refu si ng to pa y ba ck a

pr om is so ry n o t e , a nd two co nv ic ti on s fo r dr un k dr iv in g. Bec km an cl ai m s he act ed

un de r t he ad vi ce of co un se l an d th e erro rs were im m at eri al

. Bec km an ’s co un se l,

Berm an , di d no t co rro bo rat e Bec km an ’s cl ai m th at sh e ad vi s e d h i m to om it th e

in ci de nt s. As to th e de fic ie nc ie s in Bec km an ’s fin an ci al di sc lo su res , Bec km an ’s

ev id en ce fai ls to “ refu te ” th e st ro ng ev id en ce of hi s in te nt to de frau d. Bart h te st ifi ed

at tri al to su bs ta nt ia ll y th e sa m e fact s a v erre d in hi s affi da vi t, ou tl in in g th e se rio us

SEC accou nt an t Hlav acek te st ifi ed in de ta il ho w Bec km an m is ap pr op ria te d 1 2

th e pr oc eed s fro m th e vi at ic al sa le s of two s e p a rat e in su ran ce po li ci es , each fo r $1 .97 5 m il li on , as a ll eg ed in Co un ts 14 an d 1 5.

-2 3-fab ric at io ns Bec km an pr ov id ed as pu rp or te d ev id en ce of his se lf -w or th

. A reas on ab le
jury co ul d be li ev e Berm an an d Bart h, r a t h e r t h an Bec km an , an d fin d Bec km an ’s

om is si on s bo th in te nt io na l an d m at eri al

. See Uni te d St at es v. Gao na -Lop ez, 40 8 F.3 d

50 0, 5 05 (8t h Cir. 20 05 ) (fi nd in g cred ib il it y qu es ti on s are the pro vi nc e of th e jury).

d. Ta x Co unts

Fi na ll y , B eck m an di sp ut es th e su ffi ci en cy of th e ev id en ce su pp or ti ng hi s ta x
frau d co nv ic ti on s. Bec km an m ai nt ai ns th e g o v e r nm en t di d no t pr ov e he act ed 1 3

wil lfu ll y . IRS Sp eci al Agen t An na Jo hn so n t es ti fie d a s t o B eck m an ’s om is si on s o f

in co m e fo r hi s 20 07 an d 20 09 ret ur ns (Bec km an di d no t fil e a ret ur n in 20 08 ). A

reas on ab le jury co ul d c r e d i t Sp eci al Age nt Jo hn so n’s te st im on y an d co nc lu de

Bec km an ac t e d w il lfu ll y whe n in 20 07 he su bm it te d a ta x ret ur n rep or ti ng a

su bs ta nt i a l ne ga ti ve in co m e ba se d on a lo ss fro m hi s in te res t in Oxf or d Glo ba l

Adv is or s, LLC—ev en th ou gh he te st ifi ed in a de po si t i o n th at he di d no t co nt rib ut e

an y cap it al of hi s own in to th e en ti ty—res ul ti ng in a $3 28 ,12 6 ta x refu nd rat he r th an

a $1 65 ,20 4 ta x pa y m en t. A reas on ab le jury co ul d al so co nc lu de Bec km an act ed

wil lfu ll y whe n in 20 09

, in a se lf- pr ep ared ret ur n, Bec km an cl ai m ed a de du ct ib le th eft

lo ss of $ 1,4 98 ,85 3 d ue to a Po nz i sch em e, whi ch req ui red Beck m an to rep res en t h e

ha d “ no act ua l k no wled ge ” o f th e fra ud be fo re i t was m ad e p ub li c.

2. Ki le y

Kil ey ad m it s he m ad e “ se lf- ag gr a n di zi ng st at em en ts ” as to “ hi s pr of es si on al

c r e d e n t ia ls bo th on hi s web si te an d in hi s rad io sh ow” th at were “ no t tru e. ” Li k e

Bec k man , K i le y cl ai m s “ th e go ve rn m en t fai le d to pr ov e th at Mr. Kil ey kn ew or

un de rs to od th e frau du le nt na t u r e of Co ok ’s sc he m e,” m ak in g hi s li es as to hi s

fin an ci al su cces s an d ab il it ie s m erel y “ pu ffer y ,” no t frau d. A reas on ab le jury co ul d

ha ve be li ev ed ev id en ce to th e co nt r a r y , su ch as Kil ey ’s care fu ll y in te gr at ed

, fal se

Bec kma n al so su m

m ari ly di sp ut es hi s co nv ic ti on on th e m on ey -la un de rin g 1 3

co un ts

. W e do no t reac h th is un de ve lo pe d arg um en t. See Ro ts ko ff, 43 8 F.3 d at 85 4.

-2 4-st at em en ts on hi s web si te

, on th e rad io

, in br oc hu res , an d in co nv ers at io ns ab ou t th e

sa fet y of th e cu rren cy pr og ram

. Kil ey as su red po te nt ia l in ve st or s th ei r m on ey wou ld

be sa fe wit h hi m , in te nd in g to se cu re in ve st or s fo r t h e cu rren cy pr og ram wit ho ut

reg ard to whet he r th e p ro gr am wou ld de li ve r wha t Ki le y pro m is ed

.

To ta ke bu t on e ex am

pl e, in ve st or Jo se ph Kali na te st ifi ed he li st en ed to Kil ey ’s

rad io sh ow, “ Fo ll ow th e Mo ne y ,” in 20 08

. Kali na he ard Kil ey ad ve rti se a m in im um

ret ur n on in ve st m en t of te n to twel ve pe rcen t an d “ pr et ty m uc h gu aran te e” sa f

e t y,
wit h t he ab il it y

to wit hd raw any ti m e. Kali na cal le d t he ph on e n um be r gi ve n o n t he

rad io sh ow an d ta lk ed wit h Kil ey , who se nt Kali na “ a bi g fo ld er on al l th e go od

th in gs th at ’s [s ic ] go in g to ha pp en .” Kil ey wro te to Kali na on “ Uni ve rs al Bro ke rag e

F X ” le tt erh ead , “ The sa fet y an d in te gr it y of cu st om er fu nd s on de po si t are e n s u r e d
[s ic ] by m eas ur es en act ed by th e Fed eral Gov e rn m en t, va rio us ex ch an ge s, an d th e

fir m it se lf. Cu st om er fu n d s a re he ld in se gr eg at ed acco un ts pr ov id in g sa fet y ,

se cu rit y an d li qu id it y

. . . . Each an d ev ery br ok er ha s go ne th ro ug h ex te ns iv e te st in g,

ex am in at io n an d pe rs on al sc reen in g by Uni ve rs al Bro ke rag e FX be fo re he or sh e ha s

rece iv ed th ei r li cen se .” Kil ey se nt Kali na a b r o c h u re ad ve rti si ng th e “ Yiel d

Enh an cem en t Ana lysis Pro gr am ” (YEAP) th at “ of fers a fu ll y pr ot ect ed pr in ci pa l.

. . . The syste m ob

jecti ve is si m

pl e; th e st rat eg y ai m s to ta ke ad va nt ag e of t h e ‘f ree

mo n e y’ po li cy in Ja pa n.

. . . All cu rren cy ris k is in su red th ro ug h ot he r fin an ci a l

m ark et s.

. . . The YEAP si m pl y co ll ect s da il y in te res t an d ut il iz es ot he r fin an ci al

m ark et s to el im in at e cu rren cy flu ct ua ti on ris k.” Rel y in g on Kil ey ’s rep res en ta ti on s

m ad e in th e le tt er an d t he br oc hu re, on th e ph on e, an d in pe rs on th at hi s in ve st m en t

wou ld be sa fe an d in su red

, Kali na wit hd rew hi s m on ey fro m an in di vi du al ret ire m en t

acco unt—a

nd pa id al m os t a te n pe rcen t pe na lt y , whi ch Kil ey as su red Kali na he wou ld

earn ba ck in th e cu rren cy pr og ram

. At th e ti m e Kali na in ve st ed wit h Kil ey , Kil ey was

aware Kali na was ret ire d an d was i n v e s t i ng al l of hi s ret ire m en t sa vi ng s, jus t ov er $1 00 ,00 0. At th e ti m e of t r i a l

, $ 3 ,00 0 ha d be en ret ur ne d to Kali na

. Bas ed on th e

ev id en ce ad du ced at t r i a l

, a reas on ab le jury co ul d ha ve fo un d Kil ey kn ew of th e

-2 5-fal se ho od s he ad va nc ed —“ th e ‘free m on ey ’ po li cy in Ja pa n” —ab ou t th e sc he m e he

pr om ot ed

.

C. Ki le y’ s T ri al Atto rney

At th e di st ric t co ur t, K i l e y ret ai ne d at to rn ey H. Nas if Mah m ou d to rep res en t

hi m

. Kil ey no w as se rts he was de ni ed hi s S i x t h A m en dm en t rig ht to co m pe te nt

as si st an ce of co un se l at tri al be cau se “ Mah m ou d la bo red un de r m ul ti pl e co nf

li ct s of

in te res t whi le re p r e s e n t i ng ” Kil ey

. Kil ey al so arg ue s th e di st ric t co ur t’s fai lu re to

ad dr es s t he co nf

li ct s v io la te d h is Fif

th Am en dm en t ri gh t t o Du e Pro ces s.

Co un t 23 in th e in di ct m en t (Co un t 17 in th e or ig in al in di ct m en t) ch arg ed th at

on J u l y 7

, 20 09

, Kil ey en ga ge d in m on ey la un de rin g vi a a “ [w]ire tra ns fer of

$1 00 ,00 0.0 0 fro m th e Bas el Gro up , LLC, ba nk acco un t at A ss oc ia te d Ban k to th e

acco un t of an at to rn ey .” W el l be fo re tri al

, in a “ m ot io n fo r in qu iry,” th e go ve rn m en t

ap pr is ed th e di st ric t co ur t th at th e at to rn ey ci te d i n Co un t 23 was Kil ey ’s at to rn ey , Mah m ou d. The go ve rn m en t ad vi se d t he di st ric t co ur t (1 ) Mah m ou d m ig ht be a

ne ces sa ry wit ne ss be ca us e he at te nd ed m eet in gs an d pu rp or te dl y st ay ed at th e

m an si on whe re th e sc he m ers co nd uc te d th e bu si ne ss of th e cu rren cy pr og ram fo r as

m uc h as th ree week s in Ju ly 20 09 ; (2 ) du rin g th at ti m e, Co ok to ld Mah m ou d th at

Co ok in it ia te d th e Co un t 23 wire tra ns fer, no t Kil ey ; (3 ) Mah m o ud cu rren tl y

rep r es en te d “ In di vi du al A,” who wou ld “ cert ai nl y ” be cal le d as a tri al wit ne ss ; an d
(4 ) Mah mo u d fo rm erl y rep res en te d “ In di vi du al B,” a “ li ke ly” g ov ern m en t wit ne ss

. The go ve rn m en t ad vi se d t he di st ric t co ur t t o e xp lo re t he po te nt ia l co nf li ct is su es in

or de r to en su re Ki le y ’s Six th Am en dm en t ri gh t t o c ou ns el was p ro te ct ed

.

In a st ro ng res po ns e to th e go ve rn m en t’s m ot io n, Kile y st at ed Mah m ou d was

“ no t a ne ces sa ry wit ne ss ” be cau se ot he r at to rn ey s were pr es en t at th e m eet in gs , an d

th ey co ul d te st ify rat he r th an Mah m ou d. Kil ey st at ed th e go ve rn m en t’s m ot io n was

“ a tra ns pa ren t at te m

pt to pr ev en t Kil ey fro m se cu rin g th e at to rn ey of hi s ch oi ce” an d

on fiv e oc cas io ns su gg es te d th e d i s t r i ct co ur t “ co ns id er sa nc ti on s ag ai ns t th e

-2 6-go ve rn m en t.” Alt ho ug h Kil ey was al so rep res en te d by a lo cal at to rn ey , Dav id Zin s,

Kil ey su gg es te d di sq ua li fy in g Mah m ou d wou ld res ul t in ha rd sh ip be cau se Zin s was
le ss ex pe rie nc e d an d kn ew le ss ab ou t th e cas e th an Mah m ou d. Kil ey al so st at ed

In di vi du al A was no t a ne ces sa ry wit ne ss be cau se he was “ th e wro ng wit ne ss ” an d

Mah m ou d ha d rep res en te d “ In di vi du al B on a on e ti m e ba si s” “ y ears be fo re.” Kil ey

wen t so far as to su gg es t th e m on ey -la un de rin g co un t was in cl ud ed in th e in di ct m en t

in “ an effo rt to ke ep Kil ey ’s pr es en t de fen se co un se l [Mah m ou d] fro m rep res en ti ng

Kil ey .”

A m ag is tra te jud ge gr an te d th e go ve rn m en t ’s mo t io n fo r in qu iry an d he ard

arg um en t on th e m at te r. At th e h e a r i n g, aft er ex pl an at io n by th e m ag is tra te jud ge , K i l ey waiv ed hi s rig ht s as to an y co nf li ct wit h In di vi du al A, St ev e Nor t i e r , a n d

In di vi du al B, Thi et

je. Als o at th e he ari ng , Kil ey pe rs on al ly vo lu nt eere d, “ I ha ve th e

ut m os t co nf

id en ce in Mr. Mah m ou d in m an y area s. His ve raci ty, hi s co m m it m en t.”

Kil ey ex pr es sl y “ waiv e[d ] an y po te nt ia l co nf li ct of in te res t” an d de cl ared

, “ I wan t to

ke ep Mr. Ma hm ou d.”

Afte r th e he ari ng , Kil ey fil ed writ te n “ waiv ers of po te nt ia l co nf li ct s of in te res t”

as to Nor ti er an d Thi et

je. The m ag is t rat e jud ge reco m m en de d Mah m ou d no t be

di sq ua li fie d bec au se of Kil ey ’s waiv ers an d be cau se Mah m ou d was no t a ne ces sa ry
wit ne ss , and th e d is tri ct co ur t ag reed

.

Kil ey no w arg ue s th e di st ric t co ur t e r r e d by no t co ns id eri ng th e co nf li ct

in he ren t in Co un t 23 it se lf— th at Kil ey was co nv ic te d of a cri m e th at im pl ic at ed hi s

at to rn ey , Mah m ou d. Thi s po te nt ia l con fli ct was no t rai se d by th e go ve rn m en t in it s

m ot io n fo r in qu iry, no r rai se d by Kil ey at th e m ag is tra te jud ge ’s he ari ng , no r
ad dr es se d by t he m ag is tra te jud ge or t h e d is tri ct co ur t be fo re tri al

. At tri al , s ev eral

wit ne ss es te st ifi ed as to Mah m ou d’s rece ip t of th e ch arg ed wire tra ns fer. Mah m ou d

as ke d a wit ne ss ab ou t it hi m se lf, refe rri ng to hi m se lf in th e fir st pe rs on —M ah m ou d

as ke d Kil ey ’s ad m in is tra ti ve as si st an t, “ In Ju ly of 20 09

, ab ou t th e ti m e y ou se nt th at

-2 7-wire to m e, wha t was [Kil ey ’s] co nd it io n fro m wha t you ob se rv ed whe n he le arn ed

of th e frau d? ” Kil ey no w su gg es ts th e po t e n t i a l co nf li ct reg ard in g Co un t 23 was (1 ) so ob vi ou s th e di st ric t co ur t sh ou ld ha ve in ve st ig at e d th e m at te r whe th er or no t

Mah m ou d r a i s e d i t on Kil ey ’s be ha lf, an d (2 ) so gr av e it vi ol at ed Kil ey ’s Fi fth

Am en dm en t ri gh t t o d ue pro ces s.

“ W he re a co ns ti tu ti on al rig ht to co un se l e xi st s, ou r Si xt h Am en dm en t cas es
ho ld th at th ere is a co rrel at iv e rig ht to rep res en ta ti on th at is free f r o m co nf li ct s of

in te res t.” W oo d v. Geo rg ia

, 45 0 U.S. 26 1, 27 1, 27 2- 7 3 (1 98 1) (v acat in g an d

rem an di ng on du e pr oc es s gr ou nd s whe r e de fen da nt s “ were rep res en te d by th ei r

em pl oyer’s la wy er,” an d “ [a]ny do ub t as to whe th er th e co ur t sh ou ld ha ve be en aware

of th e pr ob le m [wa]s di sp el le d by t he fact th at th e St at e rai se d t he co nf li ct pr ob le m

ex pl ic it ly an d req ue st ed th at th e co ur t lo ok in to it ”). In th e co nt ex t of an as se rti on of

in effe ct iv e co un se l d ue to m ul ti pl e rep res en ta ti on of c o- de fen da nt s i n s ta te co ur t,

tri al co ur ts [m

us t] in ve st ig at e ti m el y ob jecti on s to m

ul ti pl e
rep res en ta ti on

. Bu t no th in g in ou r pr eced en ts su gg es ts th at th e Si xt h

Am en dm en t req ui res st at e co ur ts th em se lv es to in it ia te in qu iri es in to th e
pr op rie ty of m

ul ti pl e rep res en ta ti on in ev ery cas e. Defen se co uns el ha ve

an et hi cal ob li ga ti on to av oi d c on fli ct in g re pr es en ta ti on s and to ad vi se th e co ur t pr om

pt ly whe n a co nf

li ct of in te res t ari se s du rin g th e co ur se of
tri al

. Abs en t sp eci al ci rcu m st an ces , th eref or e, tri al co ur ts m ay

ass um e ei th er tha t m

ul ti pl e rep res en ta ti on en ta il s no co nf li ct or th at th e la wy er

an d hi s cli en ts kn owi ng ly accep t s uc h ri sk of co nf li ct as m ay ex is t. .

. . [T]rial co ur ts ne ces sa ril y rel y in la rg e m eas ur e up on th e go od fai th an d

go od jud gm en t of de fen se co un se l. . . . Un le ss th e tri al co ur t kn ows or

reas on ab ly sh ou ld kn ow th at a pa rti cu la r co nf li ct ex is ts

, th e co ur t ne ed

no t i ni ti at e an in qu iry.

Cu y le r v. Su ll iv an , 44 6 U.S. 33 5, 34 6- 47 (1 98 0) (fo ot no te s om it te d)

. Nev ert he le ss ,

as we ha ve st at ed

,

-2 8-The Su pr em e Co ur t [h as reject ed th e] a r g u men t th at

, whe re th e tri al

jud ge h a s fai le d to m ak e a Su ll iv an -type in qu iry no twi th st an di ng an
ap pa ren t at to rn ey co nf

li ct of in te res t, rev ers al is au to m at ic reg ard le ss of
whe th er th e c o n f

l i c t affe ct ed th e at to rn ey ’s pe rfo rm an ce.

. . . The
Su pr em e Co ur t [ h a s ] c on cl ud ed th at

, whe re th e tri al co ur t kn ew or

reas on ab ly sh ou ld h a v e kn own ab ou t a po te nt ia l at to rn ey co nf li ct of
in te res t an d y et fai le d to m ak e an in qu iry, th e pe ti ti on er, in or de r to vo id
th e co nv ic ti on , m

us t sh ow th at th e co nf

li ct of in t e res t ha d an ad ve rs e effe ct on hi s o r he r co un se l’s p erfo rm an ce.

Kos te v. Dor m ire

, 34 5 F.3 d 97 4, 97 5, 98 1- 82 (8 th Ci r. 20 03 ) (c it in g Mi ck en s v. Tay lo r, 53 5 U.S. 16 2, 17 2- 74 (2 00 2) ) (rev ie win g a pe ti ti on fo r rel ie f un de r 28 U.S.C.
§ 22 54 as se rti ng a co nf

li ct th at di d no t in vo lv e m ul ti pl e rep res en ta t i on ); se e al so

Aus le r v. Uni te d St at es , 54 5 F.3 d 11 01

, 11 02

, 11 04 (8 th Ci r. 20 08 ) ( rev ie win g a

m ot io n fo r rel ie f un de r 28 U.S.C. § 22 55 th at di d no t in vo lv e m ul ti pl e rep res en ta ti on

an d st at in g, “ [I]n cas es in vo lv in g a [d is tri ct co ur t’s] fai lu re to in qu ire in to

. . .
po te nt ia l co nf

li ct s [o th er th an on e at to rn ey rep res en ti ng co -d efen da nt s, a] de fen da nt
[m us t] sh ow th at ‘a co nf

li ct of in te res t act ua ll y affe ct ed th e ad eq ua cy o f’” hi s

attor ne y ’ s re pr es en ta tio n, as oppo se d to “ St ric kl an d pr ejud ic e” (q uo ti ng Mi ck en s, 53 5

U.S. at 1 70 -7 1 & nn .3, 4 )). 1 4

In th is c a s e , th e di st ric t co ur t rel ie d on (1 ) Mah m ou d’s as su ran ce th at no

co nf li ct ex is te d an d hi s ad am an t res po ns e to th e go ve rn m en t’s m ot io n fo r in qu iry an d
(2 ) Kil ey ’s cl ear st at em en t to th e m ag is tra te jud ge he wan te d Mah m ou d to rep res en t

h i m— “I wan t to ke ep Mr. Mah m ou d.” See Po well v. Alab am a, 28 7 U.S. 45

, 5 3
(1 93 2) (“ It is ha rd ly ne ces sa ry to sa y th at th e rig ht to co un se l be in g co nc ed ed

, a

To th e ex te nt la te r cas es co nf li ct wit h Aus le r, se e, e.g ., Noe v. Uni te d St at es , 1 4

60 1 F.3 d 78 4, 79 0 (8 th Ci r. 2 0 1 0 ) (“ [W] e ha ve no t y et de te rm in ed whe th er [Su ll iv an ’s] pr es um ed pr ejud ic e an al y si s ex te nd s be y on d co nf li ct s ari si ng f

r om

m ul t ip le rep res en ta ti on .”), we m us t fo ll ow th e earl ie st op in io n, Aus le r. See Mad er

v. Uni te d St at es , 65 4 F.3 d 79 4, 80 0 (8 t h C i r

. 20 11 ) (en ba nc ) (ex pl ai ni ng we are bo un d b y pri or pa ne l o pi ni on s)

.

-2 9-de fen da nt sh ou ld b e a f f o r d e d a fai r op po rtu ni ty to se cu re co un se l of hi s own
ch oi ce.”)

. Unl ik e W oo d, th e go ve rn m en t’s mo t i o n fo r in qu iry di d no t ap pr is e th e
di st ric t co ur t of th e Co un t 23 is su e Kil ey no w rai se s. W e th eref or e reject Kil ey ’s du e

pr oc es s ch al le ng e rai se d un de r th e Fi fth Am en dm en t, an d we fin d t he di st ric t co ur t

was no t req ui red to ad dr es s su a sp on te th e po te nt ia l Co un t 23 co nf li ct in th e m id st of

th is co m pl ex an d l en gt hy tria l.

As to Kil ey ’s in effe ct iv e-as si st an ce ch al le ng e, th e di st ric t co ur t ha s no t he ard

arg um en t on th e al le ge d in he ren t co nf l i c t in Co un t 23

. Bec au se Kil ey “ m us t sh ow

t h a t t h e” al le ge d “ co nf li ct of in te res t ha d an ad ve rs e effe ct on ” Mah m ou d’ s

pe rfo rm an ce, Kos te

, 34 5 F.3 d at 98 1, an d th e di st ric t co ur t ha s no t p a s s e d o n t hi s
is su e, we de cl in e to ad dr es s it on di rect ap pe al in th e fir st in st an ce. Cf. Uni te d St at es

v. Hub ba r d

, 63 8 F.3 d 86 6, 86 9 (8 th Ci r. 20 11 ) (“ ‘W e wil l co ns id er in effe ct iv eas si st a n c e c l a im s on di rect ap pe al on ly whe re th e reco rd ha s be en fu ll y de ve lo pe d,

whe re n ot to act wou ld am ou nt to a pl ai n m is carr ia ge of jus ti ce, or whe re co un se l’s

erro r is read il y

ap pa ren t.’” (qu ot in g Uni te d St at es v. Ram ire z-Her na nd ez, 44 9 F .3d

82 4, 82 7 (8 th Ci r. 20 06 ))); Uni te d St at es v. McAd or y , 50 1 F.3 d 86 8, 87 2- 73 (8 th Ci r.

20 07 ) (s ta ti ng in effe ct iv e-as si st an ce cl ai m s are or di na ril y de ferr ed to 28 U.S.C.
§ 2 25 5 p ro ceed in gs ). W he th er t he all eg ed Co un t 23 co nf li ct res ul te d i n i ne ffec ti ve

as si st an ce by Mah m ou d is m or e ap pr op ria te ly ad dr es se d in a § 22 55 pr oc eed in g wit h

th e be ne fit of th e fact -fi n d in g an d ap pr ai sa l by th e tri al jud ge , who is in a be tt er

po si ti on to ass es s M ah m ou d’s p erfo rm an ce.

D. New ly Dis co ve red E vi denc e—Mu rder Plo t

Sev eral m on th s be fo re th e st art of tri al

, Pet te ng il l m et wit h Fed eral Bu reau of

In ve st ig at io n (FBI ) ag en ts an d to ld th em Dur an d su gg es te d to Pet te ng il l th ey sh ou ld

arra ng e fo r Bec km an to be m ur de red in ord er t o c ol le ct on a ke y m an li fe ins ur an ce

po li cy on Bec km an

. Pet te ng il l’s co m m en ts were no te d on an FBI “ Fo rm 30 2,” da te d

Nov em be r 3, 2 01 1 (F or m

30 2)

.

-3 0-Ove r a y ear la te r, on Decem be r 21

, 20 12

, th e go ve rn m en t al lu de d to th e m ur de r pl ot in it s se nt en ci ng m em or an du m fo r Dur a n d

. On Decem be r 26

, 20 12

, th e

go ve rn m en t m ov ed fo r an ev id en ti ary he ari ng “ at whi ch th e Uni te d St at es wil l pr ov e by th e pr ep on de ran ce of th e ev id en ce th at

, in Decem be r of 20 09

, Mr. Dur an d

pr op os ed to Mr. Pe t t e ng il l th at th ey arra ng e fo r th e m ur de r of Ja so n Bo -Ala n

Bec kma n i n or de r to co ll ect an d sp li t th e pr oc eed s of a li fe in su ran ce po li cy on

Bec km an ’s li fe.”

The go ve rn m en t di d no t di sc lo se th e Fo rm 30 2 to Bec km an an d Duran d un ti l

Decem be r 28

, 20 12

, m or e th an si x m on th s aft er tri al

. In an em ai l to th e de fen da nt s’

at to rn ey s, th e go ve rn m en t st at ed it lo ok ed in it s fil es fo r th is Fo rm 30 2 in pr ep arat io n

fo r se nt en ci ng

. Not fin di ng th e Fo rm 30 2, t he go ve rn m en t as ke d t he FBI to rev ie w
it s fi le s. The FBI del iv ered th e Fo rm 30 2 o n Dec em

be r 27 , 20 12 . The g ov ern m en t

ex pl ai ns th e la ck of di sc lo su re “ was a m is ta ke ” an d “ it in te nd ed to tu rn ov er al l of it s

in te rv ie w m em or an da in th is en or m ou s cas e.” On Decem be r 28

, 20 12

, an d Decem

be r

30

, 20 12

, Dur an d an d Bec km an , res pe ct iv el y , m ov ed fo r a n e w t r ia l ba se d on th e

ne wly di sc ov ered Fo rm

30 2 e vi de nc e.

A few da y s la te r, on Ja nu ary 3, 20 13

, th e di st ric t co ur t h e ld an ev id en ti ary
he ari ng on th e m or ni ng of th e se nt en ci ng he ari ng s. The di st ric t co ur t de ni ed

Bec km an ’s an d Dur a nd ’s m ot io ns fo r a ne w tri al an d la te r is su ed a m em or an du m

op in io n t o t ha t ef

fect

.

1. Feder al Rule of Cr imina l Pro cedu re 3 3( b)

Thi s co ur t “ rev ie w[s] th e di st ric t co ur t’s de ni al of [a de fen da nt ’s] m ot io n fo r

a ne w tri al ba se d on ne wly di sc ov ered ev id en ce fo r ab us e of di sc re ti on .” Uni te d

St at es v

. H a sk el l, 46 8 F.3 d 10 64

, 10 76 (8 th Ci r. 20 06 ); se e al so Fed

. R. Cri m

. P.

33 (b )(1 ).

A su cces sf

ul Ru le 33 (b ) m ov an t m

us t s ho w th at :

-3 1-(1 ) th e ev id en ce [was ] un kn own or un av ai la bl e to th e de fen da nt at th e ti m e o f tr ia l;

(2 ) th e d efen da nt [was ] du ly dil ig en t i n a tt em pt in g t o u nc ov er i t;

(3 ) th e n ewly dis co ve red ev id en ce [i s] m at eri al ; an d

(4 ) th e ne wly di sc ov ered ev id en ce

. . . p r o b a b l y wil l res ul t in an
acq ui tt al up on ret ria l.

Uni te d St at es v. Ru ba sh ki n, 6 5 5 F

. 3 d 84 9, 85 7 (8 th Ci r. 20 11 ) (al te rat io ns an d

em ph as is in or ig in al ). “ [T]he st an da rd in ou r ci rcu it fo r a Ru le 33 m ot io n is cl ear an d
bi nd in g. The ru le re qu ir es th at th e ne wly di sc ov ered ev id en ce ‘pro ba bl y wil l res ul t in an acq ui tt al .’ ” Id

. at 85 8 (in te rn al ci ta ti on om it te d) (q uo ti ng U n i t e d S t at es v.
Bak er, 4 79 F.3d 57 4, 5 77 (8t h C ir. 2 00 7) ).

The di st ric t co ur t fo un d B eck m an fai le d t o s at is fy th e la st two ele m en ts for a

Ru le 33 (b ) m ot io n be cau se (1 ) th e al le ge d m ur de r pl ot oc cu rred aft er th e frau d en de d,

an d so was im m at eri al

, an d (2 ) th e Fo rm 30 2 co n ta in ed in cu lp at or y , rat he r th an

ex cu lp at or y , st at em en ts as to Bec km a n , i

. e

. , Pet te ng il l an d Bec km an “ kn ew th e

m on ey was go ne , an d th e pl an was to bl am e Co ok .” The di st ric t co ur t di d no t cl earl y
err i n i ts fin di ng s an d d id no t ab us e it s d is cret io n.

Bec km an al so st at es th e di st ric t co ur t erre d be cau se if Bec km an ha d acce ss to

th e Fo rm 30 2 be fo re tri al

, he m ay ha ve reco ns id ered “ hi s de ci si on no t to s e e k a

s e v e ran ce fro m Dur an d” an d m ig ht no t ha ve en ga ge d in “ ‘han ds of f’ tre at m e n t o f

Dur an d” at tri al

. The di st ric t co ur t di d no t e x p li ci tl y ad dr es s th is arg um en t in it s

or de r.

“ Fed e r a l R u l e of Cri m in al Pro ced ur e 14 (a) ve st s th e di st ric t co ur t wit h

au th or it y to or de r se ve ran ce if co ns ol id at io n fo r tri al ap pe ars to pr ejud ic e t he

go ve rn men t o r a de fen da nt

. Nev ert he le ss , th ere is a st ro ng pr es um pt io n ag ai ns t

-3 2-se ve rin g tri al s.” Uni te d St at es v. Kram er, 76 8 F.3 d 76 6, 77 0 ( 8 th Ci r. 20 14 ).

Bec km an do es no t a l l u d e t o an y pr ejud ic e he su ffer ed by be in g joi ne d as a co

de fen da nt wit h Dur an d, no r do es he d el in eat e jus t wha t ev id en ce he wou ld ha ve

pr od uc ed ab ou t Dur an d rel ev an t to th e ti m e fram e of th e frau d ha d Bec km an kn own
ab ou t th e al le ge d m

ur de r p l o t b e f

o re tri al

. Thu s, hi s arg um en t is un su pp or te d an d

wit ho ut m eri t.

2. Bra dy an d Gi gl io Vio la tio ns

Bec km an an d Dur an d arg ue th e go ve rn m en t’s fai lu re to pr od uc e th e Fo rm 30 2

vi ol at ed th e req ui rem en ts of Brad y v. Mar y la nd

, 37 3 U.S. 83

, 87 (1 96 3)

. “ ‘T o sh ow

a Brad y vi ol at io n, th e de fen da nt m us t e st ab li sh th at (1 ) th e ev id en ce was fav or ab le

t o t h e de fen da nt

, (2 ) th e ev id en ce was m at eri al to gu il t, an d (3 ) th e go ve r n men t

su pp res se d ev id en ce.

. . . Evi de nc e is m at eri al on ly if th ere is a reas on ab le pr ob ab il it y
th at

, ha d t h e e v i d e n c e be en di sc lo se d to th e de fen se , th e res ul t of th e pr oc eed in g

wou ld ha ve be en di ffer en t.’” Uni te d St at es v. Je an pi erre , 63 6 F.3 d 41 6, 42 2 (8 th Ci r.

20 11 ) (q uo ti ng Uni te d St at es v. Lad ou cer, 57 3 F.3 d 62 8, 63 6 (8 th Ci r. 20 09 )). “ ‘W e

rev ie w de no vo al le ga ti on s o f Bra dy vi ol at io ns .’ ” Man da ci na v. Unit ed St at es , 32 8

F.3 d 99 5, 10 01 (8 th Cir . 20 03 ) (q uo ti ng Uni te d S ta te s v. McEl hi ne y , 27 5 F.3d 92 8,

93 2 (1 0t h C ir. 2 00 1) ).

Bec km an al so arg ue s th e go ve rn m en t vi ol at ed th e req ui rem en ts o f G i gl io v.
Uni te d St at es , 40 5 U.S. 15 0, 15 3- 55 (1 97 2)

. “ ‘U nd er [Gig li o], th e go ve rn m en t m us t

di sc lo se m at te rs th at affe ct th e cred ib il it y of pr os ecu ti on wit ne ss es

. [F]or exam pl e,

a de fen da nt is en ti tl ed to kn ow of a pr om is e to dr op ch arg es ag ai ns t a ke y wit ne ss if

t ha t wit ne ss te st ifi es fo r th e go ve rn m en t.’ Howev er, th e no nd is cl os ur e o f G i g l i o

ev id en ce on ly ju s t i fie s a ret ria l if th e wit hh el d in fo rm at io n is de em ed m at eri al .”

Uni te d S ta te s v . Garci a, 56 2 F .3d 94 7, 95 2 n .7 (8 th Cir . 20 09 ) (s eco nd alt erat io n i n

or ig in al ) (in te rn al ci ta ti on s om it te d) (q uo ti ng Uni te d St at es v. Mo rto n, 41 2 F.3 d 90 1,

90 6 (8 th Cir . 20 05 )).

-3 3-a. Bec k m an

Bec km an cl ai m s th e Fo rm 30 2 was e x c u l p a t o r y be cau se th e ev id en ce of a

m ur de r pl ot wou l d “b u t t res s[ ] hi s arg um en ts ab ou t hi s la ck of kn owl ed ge of an y

ov eral l co ns pi racy.” Bu t th e Fo rm 30 2 act ua ll y is in cu lp at or y on th at is su e, so th is

ev id en ce was no t fa vo rab le to Beck m an , as B rad y req ui res

.

Seco nd

, Bec k man st at es th e “ fact th at Pet te ng il l ne ve r di sc lo se d th e m ur de r pl ot to Mr. Bec km an

. . . se rio us ly un de rm in es cred ib il it y a n d c h a ract er.” Bu t

Pet te ng il l’s ad m it te d ro le in th e sc he m e se rio us ly affe ct ed hi s cred ib il it y f r o m th e
be gi nn in g, an d it is un cl ear ho w th e rev el at io n of an ot he r pu rp or te d act of de cep ti on

wou ld ha ve m at eri al ly affe ct ed th e ju r y’s in te rp ret at io n of Pet te ng il l’s te st im on y

. Bec km an ha s no t es ta bl is he d th e wit hh el d in fo rm at io n is m at eri al

, as bo th Brad y an d
Gig li o re qu ire

.

b. Dura nd

Dur an d fir st co nt en ds Pet te ng il l’s st at em en t in th e Fo rm 30 2 th at th e “ fu nd was
do in g gr eat an d ha d $4 0 m il li on ” s u pp or ts hi s arg um en t th at th e en te rp ris e di d no t

be gi n as a sc am an d th at Dur an d r e a so na bl y be li ev ed th e pr og ram was le gi ti m at e.

Pet te ng il l su bs ta nt ia ll y te st ifi ed to th e $4 0 m il li on ba la nc e at tri al

, an d th e Fo rm 30 2

wou ld ha ve on ly am ou nt ed to cu m ul at iv e ev id en ce. S e c o n d

, in th e Fo rm 30 2,

Pet te ng il l st at ed

, “ Swis s FX [a fir m ru n by Pet te ng il l an d Dur an d] was pi tc he d m or e

co rrec tl y th an th e Oxf

or d cu rren cy pr og ram

. I t w as no t pi tc he d wit h a gu aran te ed

rat e.” Thi s in fo rm at io n, to o, cam e ou t at tri al whe n Pet te ng il l te st ifi ed as to Swis s FX

t h at he “ wan te d to ha ve an or ga ni zat io n th at was act ua ll y co m pl ia nt wit h th e la w

. ”

Neit he r as se rti on reas on ab ly wou ld h a v e pr od uc ed a di ffer en t ou tc om e, as Brad y

req ui res

.

Thi rd

, a nd “ [m ]ost im

po rta nt ly,” Dur an d co nc lu si ve ly st at es , “ [s ]howi ng th e jury wha t th e go ve r n men t kn ew an d whe n th ey wou ld ha ve kn own it

, was cru ci al

. Tha t m is si ng pi ece of pa pe r wou l d m or e li ke ly th an no t ha ve cau se d a di ffer en t

-3 4-ou tc om e wit h res pe ct to th e [c]on sp ira cy [c]ou nt [] ag ai ns t Mr. Dur an d.” Fi na ll y , in

hi s rep ly br ie f, Dur an d ci te s fo r th e fir st ti m e se ve ral m or e of Pet te ng il l’s st at em en ts

in th e Fo rm 30 2 th at Dur an d su rm is es m ig ht ha ve le d t o e x c u l p at or y st at em en ts by

Pet te ng il l on cro ss -ex am in at io n. Su ch co njec tu re do es no t m eet th e Brad y m at eri al it y

req ui rem en t.

3. Je nck s Act

Bec km an an d Dur an d arg ue th e go ve rn m en t’s fai lu re to pr od uc e th e Fo rm 30 2

al so vi ol at ed th e Je nc ks Act. See 1 8 U.S.C. § 35 00

. “ Afte r a wit ne ss cal le d by t he

U n it ed St at es ha s te st ifi ed on di rect ex am in at io n, th e co ur t sh al l, on m ot io n o f t h e
de fen da nt

, or de r th e Uni te d St at es to pr od uc e an y st at em en t (as he rei na fte r de fin ed )

o f t h e wit ne ss in th e po ss es si on of th e Uni te d St at es whi ch rel at es to th e s u b je c t

m at te r as to whi ch th e wit ne ss ha s tes ti fie d.” Id

. § 35 00 (b ). Thi s co ur t “ rev ie w[s] a

di st ric t co ur t’s ru li ng un de r th e Je nc ks Act fo r c l e a r e r ro r.” Uni te d St at es v. New,

49 1 F.3d 36 9, 37 6 (8t h Cir. 20 07 ). Ass um in g th e Fo rm 30 2 i s a “ st at em en t” wit hi n

t h e mea n i ng of 18 U.S.C. § 35 00 (e), “ [w]e wil l no t ov ert ur n a co nv ic ti on fo r

no nc om pl ia nc e wit h th e Je nc ks Act whe re t he re i s n o i nd ic at io n o f ba d fa it h o n t he

pa rt o f th e go ve rn m en t, no r an in di cat io n of pr ejud ic e to th e de fen da nt .” Uni te d

St at es v. Do ug la s, 9 64 F.2d 73 8, 7 41 (8t h C ir. 1 99 2)

.

Eve n if Bec km an or Dur an d co ul d es ta bl is h pr ejud ic e, ne it he r ha s es ta bl is he d

ba d fai th on th e pa rt of th e go ve rn m en t. Bec km an pr ov id es no arg um en t wha ts oe ve r

as to ba d fai th

. Dur an d as su m es ba d fai th si m pl y f ro m th e no n- di sc lo su re it se lf,

arg ui ng th e go ve rn m en t di d no t pr od uc e th e Fo rm 30 2 be cau se it was ex cu lp at or y as

to h im

. On th e co nt rary, it is ha rd to im ag in e Dur an d wou ld no t ha ve ob jecte d an d

fil ed a m ot io n in li m in e to ex cl ud e th e Fo rm 30 2 if it ha d be en ti mel y p r o d u c e d

,

co ns id eri ng th e r e v e l a t io n of a po ss ib le m ur de r-fo r-h ire

. Bec au se th e Fo rm 30 2 is

in cu lp at or y as to bo th Bec km an an d Dur an d, th e go ve rn m en t ha d no ob vi ou s m ot iv e

to ex cl ud e it

. Th e d i s t r i c t co ur t di d no t cl earl y err by de nyin g Bec km an ’s an d

Dur an d’s m ot io n fo r a n ew tr ia l b as ed on a Je nc ks Act v io la ti on

.

-3 5-4. Impea chment

Fi na ll y , bo th Bec km an an d Dur an d arg ue th e Fo rm 30 2 wou ld ha ve pr ov id ed

im pe ach m en t m at eri al du rin g cro ss -ex am in at io n of Pet te ng il l. Yet, ge ne ral ly, “ ne w

ev id en ce whi ch is m erel y cu m ul at iv e or im

p e a c hi ng is no t, acco rd in g to th e of te nrep eat ed st at em en t of th e c o ur ts

, an ad eq ua te ba si s fo r th e gr an t of a ne w tri al .”

Mes aro sh v. Uni te d St at es , 35 2 U.S. 1, 9 (1 95 6) (in te rn al qu ot at io n m ark s om it te d) ;

acco rd Uni te d St at es v. Bu rn s, 49 5 F.3 d 87 3, 87 5 (8 th Ci r

. 2 0 0 7 ) ( e xp la in in g

“ im pe ach m en t ev id en ce is rare ly su ffi ci en t to en ti tl e a de fen da nt to a ne w tri al ”). The

di st ric t co ur t p ro pe rly den ie d t he m ot io ns for a ne w tri al on th is ba si s.

E. Sent enci ng

“ W he n we rev i e w t h e im po si ti on of se nt en ces , whe th er in si de or ou ts id e th e [Un it ed St at es Sen te nc in g] Gui de li ne s [U.S.S

. G

. or Gui de li ne s] ran ge , we ap pl y ‘a

de fere nt ia l ab us e-o f-d is cret io n st an da rd .’ ” Uni te d St at es v. Hay es , 51 8 F.3 d 98 9, 99 5
(8 th Ci r. 20 08 ) (q uo ti ng Gall v. Uni te d St at es , 55 2 U.S. 38

, 41 (2 00 7) ). In rev ie win g

a di st ri c t c o u r t ’s se nt en ci ng de ci si on , an ap pe ll at e co ur t “ m us t fir st en su re th at th e
di st ric t co ur t co m

m it te d no si gn ifi can t p ro ced ur al erro r, su ch as f ai li ng to cal cu la te (o r im pr op erl y cal cu la ti ng ) th e Gui de li n e s ran ge , tre at in g th e Gui de li ne s as

m an da to ry , fai li ng to co ns id er th e [1 8 U.S.C.] § 35 53 (a) fact or s, se le ct in g a se nt en ce
ba se d on cl earl y er r o n e o u s fact s, or fai li ng to ad eq ua te ly ex pl ai n th e ch os en

se nt en ce.” Gall

, 55 2 U.S. at 51

. “ W he n rev ie win g th e di st ric t co ur t’s cal cu la ti on of

th e se nt en ci ng gu id el in es ad vi so ry se nt en ci ng ran ge , ‘[w] e rev ie w th e di st ric t co ur t’s

fact ua l fin di ng s fo r cl ear erro r an d it s co ns tru ct io n an d ap pl ic at io n of th e Gui de li ne s
de no vo .’ ” Uni te d St at es v. Pap pa s, 71 5 F.3 d 22 5, 22 8 (8 th Ci r. 20 13 ) (al te rat io n in

or ig i n a l ) ( q uo ti ng Uni te d St at es v. Rap li ng er, 55 5 F.3 d 68 7, 69 3 (8 th Ci r. 20 09 )).

“U nd er an ad vi so ry Gui de li ne s reg im e, se nt en ci ng jud ge s are on ly req ui red to fin d

s en te nc e-en ha nc in g fact s by a pr ep on de ran ce of th e ev id en ce.” Uni te d S t a t e s v

. Garci a-Go no n, 43 3 F.3 d 58 7, 59 3 (8 th Ci r. 20 06 ). Bu t se e All ey ne v. Uni te d St at es , 57 0 U.S.

__

_,

__ _, 13 3 S. Ct

. 21 51

, 21 55 (2 01 3) (h ol di ng “ an y fact th at in crea se s th e

m an da to ry

m in im um is an ‘ el em en t’ th at m

us t b e su bm it te d t o t he jury”).

-3 6-The Gui de li ne s ad vi se th e di st ric t co ur t to co ns id er “ al l reas on ab ly fo res eeab le

act s an d om is si on s of ot he rs in fu rth eran ce of [a] joi nt ly un de rta ke n cri m in al act iv it y ”

su ch as “ a cri m in al pl an , sc he m e, en de av or , or en te rp ris e un de rta ke n by th e de fen da nt

i n co nc ert wit h ot he rs , whe th er or no t ch arg ed as a co ns pi racy.” U.S.S. G

. § 1B 1.3 (a)( 1) (B) (N o v

. 2 0 1 2 ). “ [T]he em ph as is un de r § 1B 1.3 ,” ho wev er, “ is th e

sc op e o f t h e i n di vi du al de fe nd an t’s un de rta ki ng an d fo res eeab il it y in li gh t of th at

un de rta ki ng , rat he r th an th e sc op e of th e co ns pi racy as a who le .” Uni te d St at es v. Sp ot te d Elk

, 54 8 F.3 d 64 1, 67 4 (8 th Ci r. 20 08 ); se e U.S.S.G. § 1B 1.3

, cm t. n.2

. “ [A]

de fen da nt ’s co nv ic t i o n fo r co ns pi racy do es no t au to m at ic al ly m ean th at ev ery

c o n s p i r a t o r ha s fo res een th e” am ou nt of lo ss , nu m be r of vi ct im s, or nu m

be r of

in so lv en t vi ct im s “ in vo lv ed in th e en ti re co ns pi racy; in ad di ti on to m em be rs hi p in th e

co ns pi racy, th e di st ric t co ur t m us t fin d th e sc op e of th e in di vi du al de fen da nt ’s

co m m it m en t to th e co ns pi racy an d th e fo res eeab il it y o f p a r ti cu la r” frau du le nt

tra ns act io ns “ fro m th e in di vi du al de fen da nt ’s va nt ag e po in t.” Sp ot te d Elk

, 54 8 F.3 d

at 67 4. “ ‘W e rev ie w th e di st ric t co ur t’s fin di ng s as to sc o p e o f th e de fen da nt ’s

un de rta ki ng , fo res eeab il it y to th e de fen da nt

, an d fu rth er a n c e o f th e co ns pi racy fo r
cl ear erro r.’” Uni te d St at es v. Ade jum o, 77 2 F.3 d 51 3, 53 3 (8 th Ci r. 20 14 ) (q uo ti ng Sp ot te d El k, 5 48 F.3d at 6 77 ).

1. Bec k m an

a. Adv is or y G ui del in es Cal cul at io n

Bec km an m ai nt ai ns th e di s t r ic t co ur t pr oc ed ur al ly erre d in cal cu la ti ng hi s

a d v i s o r y Gui de li ne s ran ge

. Fi rs t, Bec km an cl ai m s th e di st ric t co ur t erre d i n
cal cu la ti ng th e am ou nt of lo ss

. At tri al

, th e go ve rn m en t in tro du ced a de ta il ed rep or t

li st in g th e am ou nt in ve st ed by each vi ct im

, to ta li ng ov er $1 93 mi l l i o n

. Bec km an

st at es he sh ou ld no t be acco un ta bl e fo r th e to ta l am ou nt be cau se he was no t

res po ns ib le fo r th e in ve st m en ts br ou gh t in vi a th e rad io sh ows or by an y of th e ot he r

sc he m ers . See U.S.S.G. § 2 B1 .1(b )(1 )(N) (i nc reas in g th e of fen se le ve l by 2 6 i f th e
lo ss ex ceed ed $1 00 m il li on ). Fo r th e sa m e reas on , Bec km an co nt en ds he sh ou ld no t

be res po ns ib le fo r ov er 25 0 vi ct im s ge ne r a l l y, no r fo r ov er 10 0 vi ct im s who se

-3 7-so lv en cy was t h r e at en ed

. See id

. § 2B 1.1 (b )(2 )(C)

, (b )(1 5) (B)( ii i). Bec km an al so

al le ge s hi s pe rs on al cl ie nt s were m or e so ph is ti cat ed th an th e ge ne ral po ol of vi ct im s
be cau se m an y were weal th y an d ha d in ve st ed wit h hi m be fo re th e cu rren cy pr og ram
be ga n.

Bec km an ’s arg um en ts are un av ai li ng

. To ge th er wit h hi s fel lo w sc he m ers , Bec km an ap pe ared on a rad io sh ow, gav e pu bl ic se m in ars , an d pro du ced bro ch ur es
ad ve rti si ng th e cu rren cy pr og ram wit h th e ob jecti ve of cas ti ng th e vi ct im -en sn ari ng

ne t as wid e as po ss ib le to al l reac he s of th e ge ne ral pu bl ic

. The ev id en ce in tro du ced

at tri al ren de rs in co nc ei va bl e Bec km an ’s pr es en t co nt en ti on th at he co ul d no t

reas on ab ly fo res ee, no r d i d h e c o m m it to

, th e sc op e of th e cu rren cy pr og ram

. The

di st ric t co ur t di d no t cl earl y err in at tri bu ti ng th e ag gr eg at e lo ss es cau se d by th e

co ns pi racy to B eck m an

.

Seco nd

, Bec km an arg ue s th e Ols on s, who were in th ei r ni ne ti es at th e ti m e of

th e tri al , were n ot vu ln erab le vi ct im s. See id . § 3 A1.1 (b )(1 ) & cm t. n.2 (in crea si ng

th e of fen se le ve l by two “ [i]f th e de fen da nt kn ew or sh ou ld ha ve kn own th at a vi ct im

of th e of fen se was a vu ln erab le vi ct im ,” in cl ud in g a vi ct im “wh o is un us ua ll y

vu ln erab le du e t o a g e ” ). W he th er th e Ols on s were vu ln erab le vi ct im s is a fact ua l

de te rm in at io n we rev ie w fo r cl ear erro r. See, e.g ., Uni te d St at es v. Fi or it o, 64 0 F.3 d

33 8, 35 1 (8 th Ci r. 20 11 ). “ As a gr ou p, ol de r pe rs on s are m or e ex pe rie nc ed in ve st or s,

so it wou ld be cl ear erro r to im po se a § 3A1 .1(b )(1 ) in crea se si m pl y be cau se so m e of

th e vi ct im s of a wid es pr ead in ve st m en t sc am were el de rly. ” Uni te d St at es v.
And ers on , 34 9 F.3 d 56 8, 57 2 (8 th Ci r. 20 03 ). Rat he r, “ th e en ha nc em en t

. . . req ui res

a fact -b as ed ex pl an at io n of why ad va nc ed ag e or so m e ot he r ch arac te ris ti c m ad e on e

or m or e vi ct im s ‘unu su al ly vu ln erab le ’ to th e of fen se co nd uc t, an d why th e de fen da nt

kn ew or sh ou ld ha ve kn own of th is un us ua l vu ln erab il it y .” Id

. In A n d e r s o n , we
de ci de d th e go ve rn m en t’s “b r e e z y as se rti on ” “ th at th e in st an t sc he m e feat ur in g th e

to o go od to be tru e, ta x free

, ris k free

, 12 % rat e of ret ur n in ve st m en t, wou ld ha ve

-3 8-li tt le ch an ce of su cces s wit ho ut su ch a vu ln erab le au di en ce” fel l “ far sh or t of th e

ne ces sa ry sh owi ng .” Id . at 5 73 n.3 (in te rn al qu ot at io n m ark s o m it te d)

.

Ch arl ot te Ols on te st ifi ed sh e he ld two co ll eg e de gr ees an d at on e ti m e ha d th e

“ kn owl ed ge an d ab il it y an d acu m en ” to m an ag e he r m on ey he rs el f. Bu t Mrs

. Ols on

su ffer ed a st ro ke in 19 98

, an d aft er th at sh e was no t “ ab le to m an ag e [h er] m on ey as [s he was ] be fo re.” The “ st ro ke rem ov ed [h er] m em or y [,] a n d [ s h e ] h ad a ve ry
di ffi cu lt ti m e ge tt in g it ba ck .” Sh e al so te st ifi ed “ th e st ro ke m a[d e he r] m or e fo gg y ”

an d m ad e it “ ha rd er fo r [h er] t o m ak e well -in fo rm ed de ci si on s ab ou t [h er] m on ey .”

The di st ric t co ur t d id no t cl earl y err by fi nd in g Mrs . Ol so n was a v ul ne rab le vi ct im

an d th at Bec km an , who de sc rib ed he r as “ a lo ng -s ta nd in g cl ie nt ,” kn ew or sh ou ld

ha ve kn own of h er v ul ne rab le st at us

.

Thi rd , Beck m an ob

jects to an en ha nc em en t for a vi ol at io n of a sec ur it ie s l aw by an in ve st m en t ad vi so r. See U.S.S.G. § 2B 1.1 (b )(1 8) (A)(i ii ) (req ui rin g a fo ur -le ve l

en ha n cem en t “ [i]f th e of

fen se in vo lv ed

. . . a vi ol at io n of se cu rit ie s la w an d, at th e

ti m e of th e of

fen se , th e de fen da nt was

. . . an in ve st m en t ad vi se r”). Bec km an do es 1 5

no t di sp ut e th e ch arg ed of fen se s in vo lv ed a vi ol at io n of se cu rit ie s la w or th at he was

an SEC-re gi st ered in ve st m en t ad vi so r. Rat he r, Bec km an cl ai m s he was no t act in g in

th e ro le of an SEC-re gi st ered in ve st m en t ad vi so r wit h reg ard to th e cu rren cy pr og ram
be cau se he di d no t ch arg e a fee, an d th us was “ an in de pe nd en t ag en t, a fu nc ti on th at

di d no t req ui re

. . . li cen si ng .” Bec km an ci te s no cas e la w in su pp or t of hi s cl ai m , no r
do we fin d an y

. W e are pe rs ua de d by t he reas on in g o f t h e Elev en th Ci rcu it , wh ic h

was no t co nv in ced by a de fen da nt ’s arg um en ts th at th e § 2B 1.1 (b )(1 8) en ha nc em en t

di d no t ap pl y be cau se th e de fen da nt was no t li cen se d. See Uni te d St at es v. Eli a, 57 9

F. App ’x 75 2, 75 5 (1 1t h Ci r. 20 14 ) (u np ub li sh ed pe r cu ria m ) (rea s o n i ng th at “ th e

“ A co nv ic t i o n u n d er a se cu rit ie s la w

. . . is no t req ui red in or de r fo r 1 5

su bs ect io n (b )(1 8) to ap pl y

. Thi s su bs ect io n wou ld ap pl y in th e cas e of a de fen da nt

co nv ic te d un de r a ge ne ral frau d st at ut e if th e de fen da nt ’s co nd uc t vi ol at ed a se cu rit ie s la w.” U.S.S.G. § 2B 1.1 (b )(1 8) , cm t. n .14 (B).

-3 9-te rm ‘inv es tm en t ad vi se r’ do es no t req ui re fo rm al li cen si ng ” in th e fir st in st an ce); se e

U.S.S.G. § 2B1 .1(b )(1 8) (A)(i )-(i ii ). The di st ric t co ur t di d no t clea rly err by fin di ng

Bec km an was a n i nv es tm en t ad vi so r an d a pp lying th e en ha nc em en t.

Fo ur th

, Bec km an de ni es th e co ns pi racy an d qu es ti on s whe th er it in vo lv ed

so ph is ti cat ed m ean s. See id

. § 2B 1.1 (b )(1 0) (C) (in crea si ng th e of fen se le ve l by two

if “ th e of fen se

. . . in vo lv ed so ph is ti c a t e d m ean s” ). “ Fo r pu rp os es of su bs ect io n (b )(1 0) (C), ‘sop hi st ic at ed m ean s’ m ean s es pe ci a l l y co m pl ex or es pe ci al ly in tri cat e

of fen se co nd uc t pe rta in in g to th e ex ecu ti on or co nc eal m en t of an of fen s e

. ” Id

. § 2B 1.1 (b )(1 0) (C), cm t. n.8 ( B )

. “ Co nd uc t su ch as hi di ng as se ts or tra ns act io ns , or
bo th

, th ro ug h th e us e of fic ti ti ou s en ti ti es [o r] co rp or at e sh el ls

. . . or di na ril y in di cat es

so ph is ti cat ed m ean s.” Id

. “ ‘E ve n if an y si ng le st ep is no t co m pl ic at ed

, rep et it iv e an d

co or di na te d co nd uc t can am ou nt to a so ph is ti cat ed sc he m e.’” Uni te d St at es v.

Hus to n, 74 4 F.3d 58 9, 59 2 (8t h Cir. 20 14 ) (q uo ti ng Fi or it o, 64 0 F.3 d at 35 1)

. “ The

en ha nc em en t ap pl ie s whe n th e of fen se co nd uc t, vi ewed as a who le

, was no ta bl y m or e

in tri cat e th an th at of th e ga rd en -v ari et y of fen se .” Ade

jum o, 77 2 F.3 d at 53 1 (q uo ti ng
Uni te d St at es v. Je nk in s, 57 8 F.3 d 74 5, 75 1 (8 th Ci r. 20 09 ) (in te rn al m ark s om it te d) ).

“ ‘W e rev ie w th e fact ua l fin di ng of whe th er a

. . . sc he m e qu al ifi es as so ph is ti cat ed fo r
cl ear erro r.’” Hus to n, 74 4 F.3 d at 59 2 (al te rat io n in or ig in al ) (q uo ti ng Uni te d St at es

v. Bro ok s, 17 4 F.3 d 95 0, 95 8 (8 th Ci r. 19 99 )). Giv en th e ob vi ou sl y co m pl ex na tu re

of th is fin an ci al cri m e, whi ch in vo lv ed “ ‘repet it iv e an d co or di na te d co nd uc t,’” se e id

. (q uo ti ng Fi or it o, 64 0 F.3d at 35 1)

, an d def rau de d hu nd red s of inv es to rs , th e di st ric t

co ur t di d no t cl earl y err by fin di ng th e de fen da nt s’ sc he m e in vo lv ed s o p h i s ti cat ed

m ean s.

Fi na ll y , Bec km an as se rts he di d no t o b s t r u c t jus ti ce. See U.S.S.G. § 3C 1.1
( i n crea si ng th e of

fen se le ve l by two fo r ob st ru ct io n “ rel at ed to

. . . th e de fen d a n t ’s

of fen se of co nv ic ti on ”); id

. cm t. n.4 (B) (s ta ti ng pe rjury is an ex am pl e of ob st ru ct io n)

.

“ A de fen da nt co m

m i t s p erju ry if, un de r oa th

, he or sh e gi ve s fal se te st im on y

co nc ern in g a m at eri al m at te r wit h th e wil lfu l in te nt to pr ov id e fal se te st im on y , rat he r

-4 0-th an as a res ul t of co nf us io n, m is ta ke

, or fau lt y m em or y .” Ade jum o, 77 2 F.3 d at 53 5
(in te rn al m ark s om it te d) (q uo ti ng Uni te d St at es v. O’ Dell

, 20 4 F.3 d 82 9, 83 6 (8 th Ci r.

20 00 )). “ ‘W e rev ie w a di st ric t co ur t’s fact ua l fin di ng s in su pp or t of an ob st ru ct io n

of jus ti ce en ha nc em en t fo r cl ear erro r an d it s ap pl ic at io n of th e se nt en ci ng gu id el in es

to th e fac ts de no vo

. ’” Id. (q uo ti ng O’ Dell , 20 4 F .3d at 8 36 ).

Dur in g th e Ph il li ps li ti ga ti on , Bec km an swo re in an affi da vi t an d te st ifi ed to

th e co ur t he an d hi s wife in ve st ed ov er $6 m il li on in th e cu rren cy pr og ram , of whi ch

al m os t $4 m il li on was hi s “ earn in gs .” At tri al

, Bec km an al so te st ifi ed he in ve st ed

m il li on s of do ll ars wit h th e cu rren cy pr og ram

. In co nt ras t, SEC acco un ta nt Hlav acek

te st ifi ed th at at th e m os t, Bec km an in ve st ed on ly $4 4,0 00 in to th e cu rren cy pr og ram

. The di st ric t co ur t di d no t err b y c r ed it in g Hlav acek ’s te st im on y an d th e ev id en ce

in tro du ced at tri al rat he r th an Bec km an ’s af f i da vi t an d te st im on y , an d pr op erl y

ap pl ie d t he ob st ru ct io n o f jus ti ce en ha nc em en t.

b. Compar is on w ith Coo k

Bec km an arg ue s th e di st ric t co ur t pr oc ed ur al ly erre d by fai li ng to ex pl ai n why

Bec km an ’s s en te nc e was si xt y m on th s lo ng er th an Co ok ’s, e ve n th ou gh , a cco rd in g

to Bec km an , Co ok was “ [t]he ack no wled ge d ki ng pi n of th e Po nz i sc he m e.” See

18 U.S.C. § 3 55 3( a)(6 ) (req ui rin g a sen te nc in g c ou rt t o c on si de r “ th e n eed to av oi d

un warra nt ed se nt en ce di sp ari ti es am on g de fen da nt s wit h si m il ar reco rd s w ho ha ve
be en fo un d gu il ty of si m il ar co nd uc t” ). Bec km an ’s arg um en t fai ls be cau se

“ av o i d a nc e of un warra nt ed di sp ari ti es was cl earl y co ns id ered by th e Sen te nc in g

Co m m is si on whe n se tt in g th e Gui de li ne s ran ge s,” an d a di st ri c t ju dg e “ ne ces sa ril y g[ iv es ] si gn ifi can t weig h t an d co ns id erat io n to th e ne ed to av oi d un warra nt ed

di sp ari ti es ” whe n he “ co r r e ct ly cal cu la te [s ] an d care fu ll y rev ie w[s] th e Gui de li ne s

ran ge .” Gall , 55 2 U.S. at 54

.

Bec km an al so ig no res Co ok ’s di ffer en t st at us wit h reg ard to se nt en ci ng

. Fi rs t,

Co ok pl ed gu il ty, whi le Bec km an p r o c e e d e d wit h a le ng th y , co m pl ex jury tri al

.

-4 1-Seco nd

, Co ok pl ed gu il ty to two cri m es , ai di ng an d ab et ti ng m a i l f r a u d a n d ta x

ev as io n, whi le a jury co nv ic te d Bec km an of m an y m or e, in cl ud in g cri m es un iq ue to

hi m co nc ern in g th e Ols on s an d th e NHL. As a res ul t, Co ok was no t si m il arl y si tu at ed

wit h Bec km an

. See Uni te d St at es v. W il li am s, 62 4 F.3 d 88 9, 89 7 (8 th Ci r. 20 10 )
(fi nd in g “ no pr oc ed ur al erro r in th e di st ric t co ur t’s co ns id erat io n of 18 U

. S

. C.
§ 3 55 3( a)(6 ) [wh en ] th e two de fen da nt s wer e n ot si m il arl y si tu at ed ”).

At Bec km an ’s se nt en ci ng he ari ng , th e di st ric t co ur t sa id

, “ I ha ve rev ie wed al l

th e cas e la w th at is pe rti ne nt to th is cas e fro m th e Eig ht h Ci rcu it Co ur t of App eal s an d

of co ur se th e Uni te d St at es Su pr em e Co ur t an d m os t as su red ly I ha ve rev ie wed Tit le

18

, 35 53 (a), an d th os e pr ov is io ns in fas hi on in g th e se nt en ce th at I wil l ha nd do wn in

a few m om en ts .” The di st ric t co ur t co nt in ue d, “ All fo ur of y ou th at I am go in g to be

se nt en ci ng to da y , fro m Pet te ng il l, to Dur an d, to Ki l e y t o y ou [Bec km an ], were

es se nt ia l to th e who le sc he m e, as was Trev or Co ok

, an d fo r th at y ou wil l be se nt en ced

to a te rm of im

pr is on m en t th at I be li ev e is ap pr o p r i a t e

. ” The di st ric t co ur t di d no t

pr oc ed ur al ly err whe n it co ns id ered § 35 53 (a)( 6)

, an d th e di st ric t co ur t ad eq ua te ly

e x p la in ed th e se nt en ces of th e de fen da nt s in rel at io n to each ot he r, pa rti cu l a r l y

co ns id eri ng th e o bv io us di sp ari ti es be twee n B eck m an an d C oo k. 1 6

Bec km an ur ge s us to rem an d fo r cl ari fic at io n of hi s se nt en ce in rel at io n to 1 6

Co ok

, ci ti ng Uni te d St at es v. Co le

, 72 1 F.3 d 10 16 (8 th C i r

. 20 13 ), whe re th e

se nt en ci ng co ur t se n t e n ced Co le to th ree y ears pr ob at io n whe n he r ad vi so ry Gui de li ne s ran ge was 13 5 to 16 8 m on th s im pr is on m en t an d he r co -co ns pi rat or s

rece iv ed “ m

uc h ha rs he r” se nt en ces of 18 0 m on th s an d 90 m on th s im pr is on m en t. Id

. at 10 19

, 10 25

. Not in g “ th e m ag ni tu de of th e do wnwar d va ria nc e” an d th at Co le ’s

se nt en ce was “ a ‘m ajor de pa rtu re’ fro m th e ad vi s o r y G u i de li ne s ran ge ,” we

“ rem an d[ ed ] fo r th e di st ric t co ur t to m or e fu ll y ex pl ai n th e de fen da nt -s pe ci fic fact s

an d po li cy de ci si on s up on whi ch it rel ie d in de te rm in in g th at th e pr ob at io na ry

se nt en ce [was ] ‘suf

fic ie nt

, b u t no t gr eat er th an ne ces sa ry ’

. . . to ach ie ve th e

se nt en ci ng ob

jecti ve s se t fo rth in se ct io n 35 53 (a).” Id

. at 10 25 (q uo ti ng Gall

, 55 2
U.S. at 50 an d 18 U.S.C. § 35 53 (a))

. Our rem an d in Co le was p red ic at ed up on th e

un iq ue fact s o f th at cas e an d d oe s n ot req ui re t he same res ul t h ere, wh ere B eck m an

rece iv ed a well -co ns id ered an d wel l-e xp la in ed sen te nc e o f im pr is on m en t.

-4 2-2. Dura nd

Dur an d arg ue s th e di st ric t co ur t pr oc ed ur al ly erre d in cal cu la ti ng hi s se nt en ce,
whi ch “ vi ol at e[s ] th e le tt er an d sp iri t of 18 U.S.C. § 35 53 ( a )

, ” be cau se hi s

“ cu lp ab il it y was ex po ne nt ia ll y le ss th an th at of th e ot he r de fen da nt s.” In rev ie win g

th e di st ric t co ur t’s se n t e n c i n g de ci si on , ag ai n, we em ph as iz e “ th e sc op e of th e

in di vi du al de

fe nd an t’s ”— Dur an d’s— “ un de rta ki ng an d fo res eeab il it y in li gh t of th at

un de rta ki ng , r at h er th an th e sc op e of th e co ns pi racy as a who le .” Sp ot te d Elk , 5 48

F

. 3 d a t 67 4; se e U.S.S.G. § 1B 1.3

, cm t. n.2

. W e “ fo cu s

. . . on act s, reas on ab ly

fo res eeab le to ” Dur an d “ ev en th ou gh co m m it te d by ot he rs , th at fu rth ered a cri m in al

act iv it y th at he ha d ag reed to un de rta ke joi nt ly wit h th os e ot he rs .” Dav is on , 76 1 F.3 d

at 68 5. Aga in

, “ ‘[w] e rev ie w

. . . fo r cl ear erro r.’” Ade jum o, 77 2 F.3 d at 53 3 (q uo ti ng Sp ot te d El k, 5 48 F.3d at 6 77 ).

Dur an d pr op os es he sh ou ld no t be res po ns ib le fo r al l th e lo ss es at tri bu te d to th e

co ns pi racy be cau se he cl ai m s he pl ay ed a sm al le r ro le th an hi s co -co ns pi rat or s. See

U.S.S.G. § 2B 1.1 (b )(1 )(N). Dur an d cl ai m s he “ was res po ns ib le fo r recr ui ti ng [o nl y ]

17 in di vi du al s who in ve st ed an d lo st le ss th an se ve n m il li on do ll ars .” Alt ern at iv el y , Dur an d su gg es ts th e di st ric t co ur t s ho ul d h av e cal cu la te d t he lo ss as Dur an d’s ga in

of $1 .9 m il li on

. See id

. § 2B 1.1

, cm t. n.3 (B). Dur an d co nt en ds

, “ if he was pa rt of a

co ns pi racy, he joi ne d it well in to 20 08 ,” an d he “ so l i c it ed zero in ve st or s fo r th e

Co ok -Kil ey

cu rren cy pro gr am aft er [h e] was fi red in earl y Ju ne of 2 00 8.”

The ev id en ce pr es en te d at tri al co nt rad i c t s Dur an d’s pr op os it io n. Dur an d

ad m it s he st art ed so li ci ti ng in ve st or s fo r Co ok th ro ug h hi s rad io sh ow an d by ho st in g

se m in ars as earl y as 20 05

. Dur an d pr od uc ed br o c h u r e s , pr act ic al ly id en ti cal to

Bec km an ’s, ad ve rti si ng th e cu rren cy pr og ram an d m ak in g ut te r l y fal se st at em en ts

ab ou t th e sa fet y an d li qu id it y of in ve st or s’ fu nd s. Dur an d fo rwar d e d n a mes of

in ve st or s t o C oo k, k no win g C oo k was a li ar wh o p ur po se ly m is le d p eo pl e b y

us in g

th e na m e “ UBS.” Alt ho ug h Duran d no w cl ai m s he was “ fir ed ” in Ju ne 20 08

, at th e

ti m e, he st at ed he ha d m ov ed ou t of t h e c u r ren cy pr og ram ’s pr in ci pa l pl ace of

-4 3-bu si ne ss bu t “ no th in g el se ha s ch an ge d .” (Em

ph as is ad de d)

. Dur an d st at ed he wou ld

“ st il l do th e rad io

, t h e n e w sl et te r, se m in ars an d oh y es

. . . st il l co nt in ue to be an

own er of Oxf

or d! !!” An Oxf

or d Glo ba l Adv is or ne wsl et te r da te d Aug us t 20 08

co nt ai ni ng art ic le s by Bec km an an d Dur an d li st s Dur a n d a s “ Man ag in g Dire ct or , Oxf or d Glo ba l Adv is or s” an d di rect s in ve st or s to “ [t]un e in ” to Dur an d’s rad io sh ow

“ to tu ne up [th ei r] po rtf

ol io [s ]. ” The di st ric t co ur t di d no t cl earl y err by fin di ng th e

1 7

ev id en ce ad du ced at tri al

, in cl ud in g Dur an d’s r a d io sh ows , br oc hu res , se m in ars ,

n e wsl et te rs , ad vi ce to in ve st or s an d pe rs on al ga in

, sh owe d Dur an d pe rs on al l y

un de rs to od an d fo res aw th e sc op e of th e sc he m e th at wro ug ht eco no m ic di sa st er on

th e in ve st or s. The di st ric t co ur t di d no t cl earl y err in fin di ng Dur an d res po ns ib le fo r

ov er $ 10 0 m il li on in act ua l l os se s. See U.S.S.G. § 2 B1 .1(b )(1 )(N).

3. Ki le y

“ Ass um in g th at th e di st ric t co ur t’s se nt en ci ng de ci si on is pr oc ed ur al ly so un d,

th e ap pe ll at e co ur t sh ou ld th en co ns id er t h e s u b s t an ti ve reas on ab le ne ss of th e

se nt en ce i mp o s e d un de r an ab us e-o f-d is cret io n st an da rd .” Gall

, 55 2 U.S. at 51

. Kil ey fir st arg ue s hi s “ se nt en ce was su bs ta nt iv el y un reas on ab le be cau se it pl aced to o

m uc h weig ht on th e Sen te nc in g Gui de li ne s’ ‘los s am ou nt ’ en ha n c e ment un de r § 2B 1.1 (b )(1 )(N), whi ch ad ds 26 po in ts to a de fen da nt ’s of fen se le ve l whe re ‘actu al

lo s se s’ ex ceed $1 00 ,00 0,0 00 .” Kil ey st at es , “ The go ve rn m en t di d no t pr ov id e an y

ev id en ce th at th e ‘actu al lo ss ’ su ffer ed by th e in ve st or s was ‘reaso na bl y fo res eeab le ’
by M r

. K i le y

. As su ch

, it is no t pr op er to at tri bu te th at lo ss to Mr. Kil ey un de r th e

gu id el in es .” Kil ey co nt en ds he was un aware th e pu rp os e of t h e s c h e me was to

de frau d th e in ve st or s an d “ he di d no t kn ow th at th e st at em en ts he m ad e ab ou t th e

In hi s art ic le

, Dur an d wro te

, “ My de si re to ad dr es s th e in ve st or is dwa rfed by 1 7

m y co nc ern fo r th e m as se s— th os e ha rd wor ki ng Am eri can s who ex is t fro m pa y ch eck

to pa y ch eck , b li ss fu ll y un aware of ho w c lo se to th e ed ge of eco no m ic di sa st er th ey

res id e.”

-4 4-cu rren cy pr og ram were

. . . fal se .” Bas ed on su ffi ci en t ev id en ce pr od uc ed at tri al

, th e

jury fou nd ot he rwis e.

Seco nd

, Kil ey th eo riz es hi s se nt en ce vi ol at es th e Eig ht h Am en dm en t be cau se

“ us e of th e lo ss am ou nt en ha nc em en t to pu ni sh in di vi du al s in vo lv ed in la rg e fin an ci al

cri m e s r e s ul ts in se nt en ces th at are ex ces si ve an d di sp ro po rti on at e to th e cri m e
ch arg ed

, an d th eref

or e se rv e no va li d le gi sl at iv e pu rp os e.” Yet, “ ev en ‘ass um in g th at

a se nt en ci ng co ur t may di sr eg ard [a gu id el in e] on pu re po li cy gr ou nd s,’” th e Uni te d

St at es Su pr em e Co ur t ha s no t he ld “ ‘th at a di st ric t co ur t mus t di sa gr ee wit h an y

se nt en ci ng gu id el in e, whe th er it refl ect s a po li cy jud gm en t of Co ng res s or th e [Sen te nc in g] Co m

m i s si on ’s ch arac te ris ti c em pi ric al ap pr oa ch .’ ” Uni te d St at es v.

O’ Co nn or , 56 7 F.3 d 39 5, 39 8 (8 th Ci r. 20 09 ) (fi rs t al te rat io n in or ig in al ) (q uo ti ng
Uni te d St at es v. Barr on , 55 7 F.3 d 86 6, 87 1 (8 th Ci r. 20 09 )). Kil ey ’s po li cy arg um en t

di d n ot co m

pe l t he di st ric t co ur t t o a ccep t h is th eo ry

.

“ ‘[W ]here a di st ric t co ur t ha s se nt en ced a de fen da nt be lo w th e ad vi so ry

gu id el in es ran ge , it is ne arl y in co nc ei va bl e th at th e co ur t ab us ed it s di sc ret io n in no t

va ry in g do wnwar d st il l fu rth er.’” Uni te d St at es v. McKa n r y, 62 8 F.3 d 10 10

, 10 22
(8 th Ci r. 20 11 ) (al te rat io n in or ig in al ) (q uo ti ng Uni te d St at es v. Mo or e, 58 1 F.3 d 68 1,

68 4 (8 th Ci r. 20 09 ) (p er cu ria m )). The di st ric t co ur t d id no t ab us e it s di sc ret io n by

ap pl y in g th e lo ss a m ou nt en ha nc em en t an d th en se nt en ci ng Kil ey to 24 0 m on th s

im pr is on m en t, well be lo w hi s ad vi so ry Gui de li ne s ran ge of 3,3 60 mo n t h s fo r al l

fif te en co un ts

.

F. Bec k m an ’s Mot io n to Stri k e
Twice in it s br ie f, th e go ve rn m en t st at es Ch ar lo tt e an d Raym on d Ols on are no w
de ceas ed

. Bec km an fil ed a m ot io n to st rik e th es e refe ren ces

. Bec au se th e st at em en ts pl ay ed no pa rt i n o ur an al y si s, we d en y Beck m an ’s m ot io n a s m oo t.

-4 5-II I. CONCLUSI ON

W e aff irm th e co nv ic ti on an d s en te nc e o f eac h d efen da nt

.

BYE, Cir cu it Ju dg e, co nc ur rin g i n p art an d d is se nt in g i n p art

.

I ag ree in al l res pe ct s wit h affi rm in g th e co nv ic ti on s an d se nt en ces of Ja so n

Bec km an an d Geral d Dur an d. I be li ev e Pat ric k Kil ey 's Si xt h Am en dm en t rig ht s were
vi ol at ed at tri al

, ho wev er, b e c a u s e hi s co un se l was la bo rin g un de r a co nf li ct of

in te res t th at ad ve rs el y a f f e ct ed hi s rep res en ta ti on of Kil ey

. As a res ul t, I wou ld

rev ers e Kil ey 's co nv ic ti on an d rem an d fo r a ne w tri al

. I th eref or e res pe ct fu ll y di ss en t

fro m Sect io n II .C. of

th e m ajor it y 's o pi ni on

. 1 8

The di st ric t co ur t ne ve r co ns id ered whe th er Kil ey 's tri al co un s e l

, H

. Nas if

Mah m ou d, was op erat in g un de r a co nf li ct of in te res t whi le rep res en ti ng Kil ey on th e

gr ou nd s th at Mah m ou d was d i r e ct ly i m pl ic at ed in on e of Kil ey 's cri m es

. Co un t 23

of th e Seco nd Su pe rs ed in g In di ct m en t ch arg ed Kil ey wit h m on ey la un de rin g in

co nn ect io n wit h a 20 09 wire tra ns fer of $1 00 ,00 0 fr o m o n e of Trev or Co ok 's

frau du le nt en te rp ris es

. The pu rp or te d pu rp os e of th e wire tra ns fer was to pa y
Mah m ou d to rep r e se nt th e frau du le nt en te rp ris e an d Kil ey in a rel at ed ci vi l cas e.

Ma hm ou d at te nd ed m eet in gs at th e cu rren cy pr og ram 's pl ace of bu si ne ss in Ju ly 2009

,
pu rp or te dl y to di sc us s th e ci vi l l i t i g a t io n. The go ve rn m en t cro ss -ex am in ed Ju li e
Gil sr ud

, Kil ey 's se cret ary, wit h th e in te nt to sh ow th e wire tra ns fer was do ne fo r

Kil ey 's be ne fit

, or at le as t wit h Kil ey 's ap pr ov al

. Mah m ou d ad m it te d du rin g tri al he

rece iv ed th e $1 00 ,00 0 wire tra ns fer. In cl os in g arg um en t, th e go ve rn m en t arg ue d th e
wire tra ns fer "was d ire ct ed by Trev or Co ok fo r th e be ne fit of Pat Kil ey

. Pat Kil ey

ha d ut il iz ed Mr. Mah m ou d in co nn ect io n wit h a ci vi l li ti ga ti on

. Tha t $1 00 ,00 0 was

fo r Kil ey 's be ne fit ." The jury de te rm in ed th e fu nd s Mah m ou d r e c e i v ed were

Bec au se I wou ld rev ers e Kil ey 's co nv ic ti on , I wou ld no t reac h th e ot he r tri al 1 8

an d s en te nc in g i ss ue s re le va nt to hi m

.

-4 6-la un de red fu nd s with in th e m ean in g o f 18 U.S.C. § 19 57

, an d fou nd Kil ey gu il ty of

Co un t 2 3.

Kil ey 's cu rren t co un se l
– ap po in te d to rep res en t Kil ey f o l l o w in g th e

po st po ne m en t of hi s in it ia l se nt en ci ng he ari ng – arg ue s Mah m ou d's rece ip t of th e

la un de red fu nd s (as well as hi s pr es en ce at th e cu rren cy pr og ram 's pl ace of bu si ne ss )

co ul d le ad reas on ab le juro rs to reg ard Mah m ou d as a co -co ns pi rat or in th e cu rren cy

pr og ram

. He fu rth er co nt en ds th at whe re an at to rn ey is im pl ic at ed in hi s own cl ie nt 's

cri m es , a co nf

li ct ne ces sa ril y ex is ts be cau se th e cl ie nt an d at to rn ey ha ve d i v e r ge nt

in te res ts wit h res pe ct to th e fact ua l an d le ga l un de rp in ni ng s of th e ch arg e, as well as

t h e c o u rs e of act io n to be ta ke n in de fen di ng ag ai ns t th e ch arg e. See, e.g ., Un i t e d

St at es v. Fu lt on , 5 F.3 d 60 5, 61 1- 13 ( 2 d C i r

. 1 9 9 3) (in di cat in g whe n an at to rn ey is

im pl ic at ed in cri m in al act iv it y su ffi ci en tl y rel at ed to cri m es ch arg ed ag ai ns t a cl ie nt

,

an un waiv ab le co nf

li ct of in te res t ex is ts an d a pe r se vi ol at io n of t h e Si xt h

Am en dm en t oc cu rs be cau se th e at to rn ey 's "fe ar of

, an d de si re to av oi d, c r i mi na l

ch arg es , or ev en th e rep ut at io na l da m ag e fro m an un fo un de d bu t os te ns ib ly pl au si bl e

accu sa ti on , wil l affe ct vi rt u a l ly ev ery as pe ct of hi s or he r rep res en ta ti on of th e
de fen da nt ").

App lying ou r de ci si on in Aus le r v

. U n i t e d St at es , 54 5 F.3 d 11 01 (8 th Ci r.

20 08 ), th e m ajor it y do es no t pres um e p reju di ce fr om Mah m ou d's im

pl ic at io n i n th e

m on ey la un de rin g ch arg e an d au to m at ic al ly rev ers e Kil ey 's co nv i c t i o n

. In st ead , i n

th is cas e whe re th e di st ric t co ur t fai le d to in qu ire in to th e po te nt ia l co nf li ct

, th e

m ajor it y co nc lu de s Kil ey m us t sh ow th e co nf

li ct act ua ll y af

fect ed th e ad eq ua cy of

Mah m ou d's rep res en ta ti on

. See id

. at 11 04 ( q u o t i ng Mi ck en s v. Tay lo r, 53 5 U.S.

16 2, 17 0- 71 & nn

. 3, 4 (2 00 2) ). Bas ed so le ly up on Mah m ou d's as su ran ce th at no

co nf li ct ex is te d, co up le d wit h Kil ey 's st at em en t to th e m ag is tra te jud ge th at he wan te d

M a h mo u d t o rep res en t hi m , th e m ajor it y co nc lu de s "t he di st ric t co ur t was no t

req ui red to ad dr es s t he po te nt ia l Co un t 2 3 c on fli ct in th e m id st of th is co m pl ex an d

le ng th y tri al ." Ant e at 30

.

-4 7-I do no t ag ree t he m ajor it y 's a na lysis is su ffi ci en t t o ad dr es s th e is su es rai se d

by Kil ey

. Fi rs t, I fai l to se e ho w a co nf li ct ed at to rn ey 's own as su ran ce th at no co nf li ct

ex is ts sh ou ld be rel ev an t. Bu t e v e n a s su m in g it is rel ev an t, Mah m ou d's as su ran ce

on ly pe rta in ed to th e two po te nt ia l con fli ct s th e go ve rn m en t rais ed in it s m ot io n for

in qu iry: 1) whe th er Mah m ou d was a ne ces sa ry wit ne ss be cau se he was pr es en t at th e

Ju ly 20 09 m eet in gs ; and 2) whe th er he ha d a po te nt ia l co nf li ct be cau se he cu rren tl y

rep res en te d on e go ve rn m en t wit ne ss (St ep he n Nor ti er) an d fo rm erl y rep res en te d

an ot he r go ve rn m en t witn es s (Duk e Thi et je). Mah m ou d's as su ran ce did no t add res s

th e co nf li ct th at m at te rs – whe th er Mah m ou d's im pl ic at i o n in Kil ey 's cri m e, as th e
reci pi en t of C o un t 23 's la un de red fu nd s, ad ve rs el y affe ct ed hi s rep res en ta ti on of

Kil ey

.

Si m il arl y , Kil ey 's st at em en t to th e m ag is tra te jud ge in di cat in g he "wan t[e d] to

ke ep Mah m ou d" a s hi s at to rn ey di d no t ad dr es s th e Co un t 23 im pl ic at io n co nf

li ct

. Kil ey 's st at em en t res po nd ed so le ly to qu es ti on s reg ard in g Mah m ou d's rep res en ta ti on

of Nort ie r an d Thi et

je. See Mo t. Tr. a t 14 -2 5, Dis tri ct Ct. Do ck et #1 27 . Kile y was

ne ve r qu es ti on ed ab ou t th e co nf li ct st em m in g fro m Mah m ou d's rece ip t of $1 00 ,00 0

i n l a u n d e red fu nd s, no r was he ev er gi ve n th e op po rtu ni ty to kn owi ng ly an d

vo lu nt ari ly waiv e th at co nf li ct

, as su m in g it co ul d be waiv ed

. See Uni te d St at es v. Lop es ie rra- Gut ie rrez , 70 8 F.3 d 19 3, 20 1- 02 (D.C. Ci r. 20 13 ) (co nc lu di ng th e co nf li ct

st em m in g fro m de fen se co un se l's rece ip t of la un de red fu nd s co ul d be kn owi ng ly an d

vo lu nt ari ly waiv ed

, bu t on ly "wh ere a st ip ul at io n ba rs pr es en ta ti on of in cri m in at in g

te st im on y " an d th us th e jury ne ve r le arn s th at de f e n s e c o un se l rece iv ed la un de red

fu nd s)

.

Kil ey co nt en ds th e po ss ib il it y th at Mah m ou d's im pl ic at io n in Co un t 23 crea te d

a c o n f l ic t "was su ffi ci en tl y ap pa ren t

. . . t o im po se up on th e co ur t a du ty t o i n q u i r e

fu rth er," suc h th at th e fai lu re to co nd uc t th e in qu iry vi ol at ed Kil ey 's Fi fth Am en dm en t

du e pr oc es s rig ht s. W oo d v . Geor gi a, 45 0 U.S. 2 61 , 27 2, 2 73 (1 98 1)

. I do no t fin d

th e m ajor it y 's an al y si s – whi ch ap pe ars to co ns is t so le ly of an ex am in at io n of th e

-4 8-di st ric t co ur t ' s i n qu iry in to ot he r po te nt ia l co nf li ct s – pa rti cu la rly he lp fu l in

ad dr es si ng th at du e p ro ces s i ss ue

.

W it h resp ect to Kil ey 's clai m th at hi s Si xt h Am en dm en t rig ht s were vi ol at ed

, th e m ajor it y

de fers rul in g o n Kile y 's in effe ct iv e-as si st an ce-o f-co un se l clai m un ti l i t

ha s be en pr es en te d in a su bs eq ue nt pr oc eed in g un de r 28 U.S. C

. § 22 55

. I wou ld

ad dr es s th e Si xt h Am en dm en t cl ai m no w. In m y vi ew, Mah m ou d's ab il it y to pr ov id e

co ns ti tu ti on al ly effe ct iv e rep res en ta ti on to hi s cl ie nt cam e to an en d w h e n t h e jury

le arn ed Mah m ou d was th e reci pi en t of Co un t 23 's la un de red fu nd s, was pr es en t at th e

cu rren cy pr og ram 's pl ace of bu si ne ss , an d pa rti ci pa te d in di sc us si on s wit h Kil ey 's co

co ns pi rat or s ab ou t t h e c u rren cy pr og ram

. The jury's kn owl ed ge of Mah m ou d's

im pl ic at io n in Co un t 23 is a be ll th at ha s be en ru ng , an d can no t be un d o n e fo r

pu rp os es of th is tri al by req ui rin g th e di st ric t co ur t to ho ld an ev id en ti ary he ari ng in
a § 22 55 pro ceed in g.

In th e si tu at io n we ha ve he re, whe re th e jury kn ew Mah m ou d rece iv ed th e

la un de red fu nd s an d was di rect ly im pl ic at ed in Kil ey 's ch arg ed co nd uc t, it is at le as t

de ba ta bl e whe th er th e co nf li ct sh ou l d b e v i e wed as a pe r se vi ol at io n of th e Si xt h

Am en dm en t an d req ui re au to m at ic rev ers al of Kil ey 's co nv ic ti on

. See Fu lt on , 5 F.3 d

at 61 1- 13 (ap pl y in g a p er se ru le ). Bu t ev en as su m in g Kil ey m us t de m on st rat e th e

co nf li ct ad ve rs el y affe ct ed Mah m ou d's pe rfo rm an ce un de r Cu y le r v. Su l l i v an , 44 6

U.S. 33 5, 3 50 (19 80 ), I be li ev e Kil ey sat is fie s t ha t s ta nd ard

.

In Dawan v. Loc kh art

, 31 F.3 d 71 8 (8 th Ci r. 19 94 ), ou r co ur t ad dr es se d a

co nf li ct crea te d by th e s a me at to rn ey rep res en ti ng bo th th e de fen da nt an d hi s

co -d efen da nt in a bur gla

ry an d the ft -o f- pr ope rt

y pr os ecu ti on

. St ou t, th e co -d efen da nt

, pl ead ed gu il ty an d ga ve a swo rn st at em en t im pl ic at in g Dawan

, th e de f e n d a n t

. A t

Dawan 's tri al

, aft er th e at to rn ey cal le d St ou t as a wit ne ss an d he te st ifi ed Dawan was

no t in vo lv ed in th e ch arg ed cri m es , th e pr os ecu to r cro ss -ex am in ed Dawan ab ou t hi s

pr io r swo rn te st im on y im pl ic at in g Dawan

, sp e c i f

i c a l ly "h ig hl ig ht [in g] th e fact th at

-4 9-Dawan 's co un se l was th e at to rn ey who ha d rep res en te d St ou t whe n th e st at em en t was

m ad e." Dawan

, 31 F.3 d at 72 0. St ou t th e n a d mi t te d he ha d pr ev io us ly im pl ic at ed

Dawan , bu t cl ai m ed he ha d l ie d u nd er o at h. Id

.

App lyi ng Cu y le r's ad ve rs e effe ct st an da rd

, ou r co ur t he ld Dawan 's Si xt h

Am en dm en t rig ht s were vi ol at ed be cau se th e jury le arn ed
– vi a th e pr os ecu to r's cro ss

ex am in at io n – th at Dawan 's co un se l ha d al so rep res en te d a wit ne ss who ch an ge d hi s

st or y

. W e sa id th e "p ro se cu to r's co m m en ts m ad e Dawan 's at to rn ey lo ok le ss cred ib le

an d, b y ex te ns io n, m ad e Dawan lo ok les s cr ed ib le as we ll ." Id . at 7 22

.

Si m il arl y , h e r e t he jury le arn ed th at Mah m ou d rece iv ed la un de red fu nd s
de riv ed fro m th e frau du le nt cu rren cy pr og ram

. The jury al so le arn ed Mah m ou d was

pr es en t at th e cu rren cy pr og ram 's pl ace of b u s in es s an d pa rti ci pa te d in di sc us si on s

reg ard in g ci vi l li ti ga ti on th e co -co ns pi rat or s face d. Bas ed on th es e fact s, it st rai ns
cred ul it y no t to ex pe ct a reas on ab le jury to co ns id er whe th er Mah m ou d hi m se lf was

pa rt of th e cri m in al co ns pi racy. If it was ev en o s t e n s i b l y p la us ib le fo r th e jury to

be li ev e Mah m ou d wa s i n v o lv ed in th e cri m in al co ns pi racy, I be li ev e we sh ou ld

pr es um e it wou ld ha ve "af fec t [ e d ] vi rtu al ly ev ery as pe ct of [Ma hm ou d's ]

rep res en ta ti on o f t h e de fen da nt ." Fu lt on , 5 F.3 d at 61 3. At a m in im um , ho wev er,

Mah m ou d's im

pl ic at io n in Co un t 23

, as th e ad m it te d reci pi en t of fu nd s th e jury fo un d

to be la un de red

, wou ld un do ub te dl y hu rt Mah m ou d's cred ib il it y wit h th e jury, an d by

ex te ns io n m ak e Kil ey lo ok le ss cred ib le as well

. "Th is is a su ffi ci en t adv ers e effe ct

fo r pu rp os es of C uyler." Dawan, 3 1 F .3d at 7 22

.

I res pe ct fu ll y

di ss en t fr om

Sect io n II .C. of

th e m ajor it y 's o pi ni on

.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-5 0-