FILED U.S. COURT OF AP P EALS E LEVEN T HC IRC U IT SEPTEMBER 10, 2008 THOMAS K. KAH

N CLERK [ DO NO T P UB L I S H]

I N THE UN I TE D STATE S C OU RT OF APPE ALS F O R T H E E L E V E N T H C IR C U IT

________________________ N o. 08- 10786 N on -A rgum entC al endar

________________________ D . C . D o c k e tN o . 0 4 - 1 4 0 0 3 - T P - D MM U N I T E D S T A T E S O F A M E R I C A , P la in tif f - A p p e lle e , v ersu s R A N D Y S C O T T S Y R O P , D e f e n d a n t- A p p e lla n t.

________________________ A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f orthe S outhe rn D i s tr i c tof F l or i da

_________________________ ( S e p t e m b e r 10, 2008) B efo re T JO F L A T , D U B IN A an d B L A C K , C i rcu i tJu d g es. P E R C U R I A M: A p p e lla n t R a n d y S c o tt S y r o p ( “S y r o p ” ) ap p e a ls th e r e v o c a tio n o f h is2

p r o b a t i o n a n d th e s e n t e n c e i mp o s e d b y th e d i s tr i c tc o u r t . W e a f f i rm. I . B AC KG RO UN D I n 2 0 0 2 , Sy r o p p l e a d e d g u i l ty t o ma i l a n d w i r e f r au d a r i s i n g f

r o m a“ p u mp and d um p” sc hem e i n w hi ch he w i l l ful l y f i l ed fa l se do cum ent s w i th the S ec uri t i es and E xchang e C om m i ss i on and d i ss em i nat ed fa l se pres s r el ea se s i n o rdert o b ol st er a ch o sen st o ck ’ s v al u e. T h e sch em e resu l t ed i n i n v est o r l o sses t o t al i n g al m o st s e ve n m i l l i on dol l a r s . N one the l e s s , be c aus e of hi s s ubs t a nt i a l c oope r a t i on w i th the Go v e rn m e n t , th e d i s tr i c tc o u r ts e n t e n c e d S y r o p o n l y t o f i v e y e a r s ’ p r o b a t i o n . T wo cond i t i on s pl ac ed on S yr op w er e thathe no t“ engag[e] i n any em pl oym entre l at ed di re ct l y or i nd i re ct l y t o i nv es tm ent s or s ec uri t i es bu si ness op po rtun i t i es , ” D E 1 at 11 , and thathe “ answ ertruthful l y a l l i nq ui ri es by the prob at i on offi ce r, ” i d. a t 1 0 . I n N o v e m b e r2 0 0 7 , S y r o p ’s p r o b a tio n o f f ic e r , R o n M a n g a n ie llo , f ile d an o tic e w ith th e d i stri ctco u rtth atS yro p h ad v i o l at ed th ese co n d i t i o n s. S y r op’ s pr i m a ry e m pl oy m e ntdur i ng hi s pr oba t i on w a s w i th B r oa dvi s i on G r oup, a n i nt e rne ta dve r t i s i ng c om pa ny ow ne d by J ohn G r a ndi ne tt i . S y r op co n si st en t l y m ai n t ai n ed th ath i s o n l y fu n ct i o n w as w eb m ark et i n g — sp eci fi cal l y, s e llin g b a n n e ra d v e r tis e m e n ts . M a n g a n ie llo r e c e iv e d n o tic e f r o m s e v e r a l p e o p le thatS yr op engaged i n o ther s al es ac t i vi t i es . F i rs t , B re ttF ri edm an se nta l ett er s t a t i ng tha the “ m e tw i th R a ndy S y r op on appr oxi m a t e l y 5 oc c a s i ons r e ga r di ng3

i nve s t i ng i n T ube M e di ac orpor a t i on. ” D E 16 a t2 ( e xh. 1) . A tone m e e t i ng, a c c or di ng t o F r i e dm a n, S y r op a nd G r a ndi ne tt i pr e s e nt e d as a l e s pi t c h f orthe s t oc k,

“ ent i ci ng [F ri edm an and tw o o thers ] t o b uy st ock i n the com pany. ” I d. F ri edm an lo s t $ 1 6 0 ,0 0 0 . I

d. S e c ond, D a ni e l D r apa c z w r ot e tha tS y r op c a l l e d hi m of f e r i ng an i nv es tm entop po rtun i ty i n “ P yr am i d R ec ords/ T U B E M edi a C orpo ra t i on . ” I d. at 3 (exh. 2). S yr op offe re d $ 50 , 00 0 i n p ub l i c s hare s, and $ 48 , 00 0 i n res tri ct ed shar es h e ld in S y r o p ’s m o th e r ’s n a m e . I d. D r ap a c z p u r c h a s e d th e s to c k

— th e p u b lic s h a r e s o v e rth e I n te rn e t, a n d th e p r iv a te s h a r e s f r o m S y r o p ’s m o th e r . I

d. A c c or di ng t o D r apa c z , S y r op a l s o s ol i c i t e d the 2004 s a l e of one - thi r d of B r o a d v is io n to D r ap a c z a n d h is c o u s in , H a rry B ru n e r , f o r$ 6 5 0 ,0 0 0 . I

d. ; see a l so i d. at12 -18 (sa l es contra ctbetw ee n G ra nd i nett i and B runer) . W hen B runer be c a m e di s s a t i s f

i e d w i th B r oa dvi s i on’ s pe r f orm a nc e a nd thr e a t e ne d t o c ont a c tthe au th o r itie s , S y r o p th r e a te n e d h im . I d. at3 (exh. 2). B as ed on these al l egat i on s, M angani el l o fi l ed a not i ce w i th the di stri ctcourt tha tS y r op ha d vi ol a t e d hi s pr oba t i on c ondi t i ons by e nga gi ng i n e m pl oy m e nt r e l a t e d t o i nve s tm e nt s a nd s e c ur i t i e s , a nd by l y i ng t o M a nga ni e l l o by nott e l l i ng hi m abou ttho se ac t i vi t i es . A m agi stra t e j ud ge hel d a F eder al R ul e of C ri m i nal P r oc e dur e 32. 1( b) ( 1) ( a ) pr e l i m i na ry he a r i ng i n w hi c h M a nga ni e l l o t e s t i f i e d about th e F r ie d m a n a n d D r ap a c z s ta te m e n ts . Se e g e n e r a lly D E 23 (T ra nscr i ptof P re tri al4

D e t e nt i on & P r e l i m i na ry H e a r i ng) . S y r op pr e s e nt e d r e butt a l e vi de nc e , i nc l udi ng a sa l es contra ctbetw ee n B runer and G ra nd i nett i , and a ci vi l com pl ai ntby B runer a ga i ns tG r a ndi ne tt i , w hi c h s how e d tha tG r a ndi ne tt i , notS y r op, w a s r e s pons i bl e f or the B roadvi si on sa l e. D E 16 at12 -18 (contra ctbetw ee n G ra nd i nett i and B runer; S y r o p n o t m e n tio n e d ) ; i d. a t 5 - 1 1 ( c iv il c o m p la in t b y B ru n e ra g a in s t G r a n d in e tti; S yr op no tm ent i on ed). T h e m ag i strat e j u d g e n o t ed “ i n co n si st en ci es” i n th e ev i d en ce— sp eci fi cal l y, tha tthe c ontr a c ta nd c i vi l c om pl a i ntc ontr a di c t e d D r apa c z ’ s a l l e ga t i on tha tS y r op w a s in v o lv e d in th e B r o a d v is io n s a le

— b u t f o u n d “s u f

f ic ie n t p r o b ab le c au s e ” to c o n c lu d e th a t S y r o p v io la te d h is p r o b a tio n c o n d itio n s b y e n g a g in g in in v e s tm e n tre l at ed em pl oym entand l yi ng t o h i s probat i on offi ce r abo utthatac t i vi ty. D E 18 at 6. T he m agi stra t e j ud ge re fe rr ed the ca se t o the di stri ctcourtfor a n evi dent i ary he a r i ng w i th l i ve w i tne s s e s t o r e s ol ve the i nc ons i s t e nc y a nd a doptorr e j e c tthe r e c o m m e n d a tio n . I

d. T he di stri ctcourthel d an evi dent i ary hea ri ng i n w hi ch si m i l arevi dence w as pres ent ed, w i th the except i on thatD rapacz and F ri edm an t es t i fi ed l i ve, ra ther than h a v in g th e irs ta te m e n ts r e a d . Se e g e n e r a lly D E 47 ( T r a ns c r i ptof P r oba t i on V i ol at i on P roce edi ng s) . F ri edm an t es t i fi ed thatS yr op i nv i t ed hi m t o a shar ehol der m e e tin g f

o rT u b e M e d iaC o rp o r a tio n . I d. at10 . H e und er st oo d S yr op t o b e a5

“ consul t antfor the com pany. ” I d. a t19. A f

t e rs i tt i ng thr ough the m e e t i ng, S y r op t ook F r i e dm a n a nd a nothe rpot e nt i a l i nve s t ort o ac onf e r e nc e r oom , w he r e S y r op p r e s e n te d as a le s p itc h f o rin v e s tm e n t in T h e T u b e . I d. a t 1 0 . F ri edm an t es t i fi ed tha the the n de c i de d t o i nve s ti n T he T ube by pur c ha s i ng publ i c s ha r e s on the in te rn e t, a n d p r iv a te s h a r e s f r o m o th e r s th r o u g h S y r o p . I d. a t11, 24. T he T ube f a ile d , a n d F r ie d m a n lo s t o v e r$ 1 6 0 ,0 0 0 . I d. a t10. O n c r os s e xa m i na t i on, F ri edm an t es t i fi ed abou tthe re as on s f or hi s c on t i nu ed i nv es tm enti n T he T ub e: L es G a r l a nd, apr i nc i pa l i n m a j ort e l e vi s i on ne tw orks M T V a nd V H 1, w a s i nvol ve d; T he T ube ha d at e l e vi s i on c ha nne l i n m i l l i ons of hom e s ; a nd F r i e dm a n ha d m a de s u b s ta n tia l g a in s o n a n e a r lie rs m a lle rin v e s tm e n t in T h e T u b e . I d. a t 2 0 - 2 1 . N e ve r the l e s s , de s pi t e de c i di ng tha tT he T ube w a s al e gi t i m a t e bus i ne s s ba s e d on hi s ow n due di l i ge nc e , F r i e dm a n f e l ti n r e tr os pe c ttha ti tw a s a“ pum p a nd dum p” s c h e m e , a n d S y r o p s o u g h t h im o u t to c o n v in c e h im to in v e s t in th e c o m p a n y . I d. at 2 1 , 2 3 . D rapacz al so expo un ded h i s s t at em entdu ri ng l i ve t es t i m on y. H e t es t i fi ed thatS yr op w as ful l y i nv ol ved i n the sa l e of B roadvi si on , and thatS yr op w as G ra nd i nett i ’ s partner i n B roadvi si on bu tcoul d n otow n anythi ng “ on paper” b e c au s e h e w a s o n p r o b a tio n . I d. a t 3 4 . S y r o p ’s a tto rn e y s o u g h t to d is c r e d it D rapacz on cr oss- exam i nat i on by no t i ng thatD rapacz i s aconv i ct ed fe l on and that6

the B r oa dvi s i on c ontr a c ta nd s ubs e que ntc i vi l s ui tbe l i e d hi s a c c us a t i on tha tS y r op s o ld B r o a d v is io n . I

d. a t 4 3 - 4 4 , 4 8 - 4 9 . S yr o p p re se n ted h is o w n w itn es se s, in clu d in g T h e T u b e’s a n d B ro ad v isio n ’s l a w y e r , w ho t e s t i f

i e d tha the ha d no i ndi c a t i on tha tS y r op he l d a ny ki nd of ow ne r s hi p i nt e r e s ti n B r oa dvi s i on, a nd S y r op di d notha ve ac ons ul t i ng a gr e e m e nt w ith T h e T u b e . I

d. a t77- 78. A f t e rhe a r i ng the t e s t i m ony a nd a r gum e nt , the di s tr i c tc our tf ound tha tS y r op h a d v io la te d h is p r o b a tio n c o n d itio n s . I d. at99 -100 . T he di stri ctcourtcr edi t ed both F r i e dm a n a nd D r apa c z , not i ng tha tboth t e s t i f i e d t o S y r op pr om ot i ng in v e s tm e n t in T h e T u b e w h ile h o ld in g h im s e lf o u t a s ac o n s u lta n t. I

d. a t100. T he di stri ctcourtfoun d i ti rr el evantthatthe offe ri ng s w er e nota partof hi s f orm al e m p lo y m e n t w ith B r o a d v is io n ; “T h e id e aw a s th a t h e s h o u ld n ’t b e in v o lv e d in o f f e r i n g s e c u r i t i e s t o p e o p l e b e c a u s e o f h i s p r i o ri n v o l v e me n ti n ap u mp a n d d u mp sc hem e. ” I

d. a t 1 0 1 . S y r o p in s is te d th a t h e “w a s ju s t b e in g p o lite in ta lk in g to pe opl e about[ T he T ube ] , ” a nd “ a tno t i m e di d [ he ] c a r e i f a ny body boughtthe st ock o r not . ” I

d. at10 2. N on ethel es s, the di stri ctcourtfoun d thatS yr op engaged i n s e c ur i t i e s - r e l a t e d e m pl oy m e nta nd l i e d t o hi s pr oba t i on of f i c e rabouti t . T he c our tc a l c ul a t e d the G ui de l i ne s r a nge a s thr e e t o ni ne m onths ’ i m pr i s onm e nt , but s e nt e nc e d S y r op t o 24 m onths ’ i m pr i s onm e ntbe c aus e the pr oba t i on vi ol a t i on7

r e p e a te d th e o r ig in a l c r im in a l a c ts . I d. a t105. I I . STA N D A R D S O F R EVI EW

“ [ T ] hi s c our tge ne r a l l y r e vi e w s adi s tr i c tc our t ’ s r e voc a t i on of pr oba t i on f

or an abuse of di sc re t i on . ” U ni ted Stat es v. Mi t

sv en , 45 2 F . 3d 12 64 , 12 65 (11th C i r. 20 06 ). In re vi ew i ng a r evocat i on proceedi ng , “ [a ] di stri ctcourt ’ s f i nd i ng s of f

ac t ar e bi nd i ng on thi s c ou rtun l es s c l ea rl y e rr on eous. ” U ni te d State s v . A lm and , 992 F . 2d 316, 318 ( 11th C i r . 1993) ( quot i ng U ni te d State s v . G r ande rs on , 969 F . 2d 98 0, 98 2 (11 th C i r. 19 92 )) . W e r e v ie w th e r e a s o n ab le n e s s o f as e n te n c e f

o ra n ab u s e o f

d is c r e tio n . G a ll v. U ni ted Stat es , 1 2 8 S . C t. 5 8 6 , 5 9 7 ( 2 0 0 7 ) . III. A N A L Y S IS T h e th ru s t o f

S y r o p ’s a r g u m e n t is th a t th e c o n d itio n a g a in s t “e n g a g in g in e m pl oy m e ntr e l a t e d t o s e c ur i t i e s a nd i nve s tm e nt s ” di d note xt e nd t o S y r op’ s gi vi ng a d v ic e ab o u t in v e s tm e n ts to p e o p le o rin v e s tin g in s e c u r itie s h im s e lf . A c c or di ng t o S y r op, the G ove rnm e ntm us tpr e s e ntdi r e c te vi de nc e tha the ga i ne d a b e n e f it f r o m atr a n s a c tio n f

o rth a t tr a n s a c tio n to c o n s titu te “e n g a g in g in em pl oym entre l at ed t o sec uri t i es and i nv es tm ent s. ” F urtherm ore, S yr op ar gu es that be c aus e the a dvi c e he ga ve F r i e dm a n a nd the s m a l l r ol e he pl a y e d i n the B r o a d v is io n s a le to B ru n e rw e r e n o t “e m p lo y m e n t,” it w a s n o t alie to te ll h isSy rop also argues that it was er ror f or the Government to fail to call Bruner to the stand 1 beca use the magistrate judg e’s report a nd rec ommendation stated that “F riedman, D rapacz and B r un er . . . n e e d tob ep er s o n ally

p re s ent at a

ny f in al ev identi ar

y h e aring . ”D E1 8 at 6 . We reje ct this argument; if Sy rop wa nted B runer

to testify , he could have called Br uner to the stand. 8 p ro b at i o n o ffi cer h i s o n l y em p l o ym en tw as sel l i n g b an n er ad v ert i sem en t s. W e r e je c t S y r o p ’s a r g u m e n ts . “I n ap r o b a tio n r e v o c a tio n p r o c e e d in g , a ll 1 tha ti s r e qui r e d i s tha tthe e vi de nc e r e a s onabl y s a t i s f y the j udge tha tthe c onduc tof the pr oba t i one rha s notbe e n a s good a s r e qui r e d by the c ondi t i ons of pr oba t i on; e v id e n c e th a t w o u ld e s tab lis h g u ilt b e y o n d ar e a s o n ab le d o u b t is n o t r e q u ir e d .” U ni te d State s v . O ’ Q ui nn , 689 F . 2d 1359, 1361 ( 11th C i r . 1982) ( quot i ng U ni ted Stat es v. R i ce , 67 1 F . 2d 45 5, 45 8 (11 th C i r. 19 82 )) . W e hol d thatthe di stri ctcourt c o u ld e a s ily c o n c lu d e f

r o m th e e v id e n c e p r e s e n te d th a t S y r o p e n g a g e d in em pl oym entre l at ed t o sec uri t i es and i nv es tm ent s a tl ea sttw i ce . F i rs t , the di stri ct co u rtco u l d reaso n ab l y co n cl u d e fro m D rap acz’s t est i m o n y th atS yro p w as a shadow partner i n B roadvi si on , di re ct l y i nv ol ved i n the sa l e that , on paper, w as b e tw e e n G r a n d in e tti a n d B ru n e ro n ly . S e c o n d , th e d is tr ic t c o u r t c o u ld r e a s o n ab ly i nferthatS yr op st oo d t o g ai n from F ri edm an’ s i nv es tm enti n T he T ub e, gi ven that S yr op hel d h i m se l f outas a c on sul t antand act i vel y prom ot ed the st ock. M oreover, because the di stri ctcourtcoul d con cl ud e thatS yr op w as engaged i n act i vi t i es beyond bann er -a dv ert i si ng sa l es , the courtcoul d al so re as on abl y c on cl ud e that S yr op l i ed t o h i s probat i on offi ce r w hen h e s t at ed thathi s onl y e m pl oym entw as9

sel l i n g b an n er ad v ert i sem en t s. We a l s o c o n c l u d e th a tth e two - y e a rs e n t e n c e wa s r e a s o n ab l e . T o r e v i e w a s e nt e nc e , a n appe l l a t e c our t“ m us tf i r s te ns ur e tha tthe di s tr i c tc our tc om m i tt e d no s i gni f i c a ntpr oc e dur a l e rr or , ” a nd “ the n c ons i de rthe s ubs t a nt i ve r e a s onabl e ne s s of the se nt ence i m po se d u nd eran abuse- of-di sc re t i on st andard. ” G a ll , 12 8 S . C t . at 597. S y r op f

i r s ta r gue s tha tthe di s tr i c tc our t ’ s s e nt e nc e w a s pr oc e dur a l l y uns ound because i tfoun d thatS yr op ’ s f i rs tconv i ct i on w as for apu m p-and-du m p schem e, w he n the c onvi c t i on w a s onl y f orc aus i ng f

a l s e f i l i ngs t o be m a i l e d. T he r e l e va nt c onduc tf

ors e nt e nc i ng purpos e s e xt e nds f a rbe y ond the s pe c i f

i c c r i m e of

w hi c h the d e f e n d a n t w a s c o n v ic te d . See U . S . S . G . § 1B 1. 2 ( “ R e l e va ntC onduc t ” ) . T he d istrict co u rt co n clu d ed fr o m th e P re se n ten ce In v es ti g atio n R ep o rt th at S yr o p ’s r e le v a n t c o n d u c t in c lu d e d ap u m p - a n d - d u m p s c h e m e ; th a t f in d in g w a s n o t c le a r ly e rr o n e o u s . M o r e o v e r , w e c o n c lu d e th a t it w a s r e a s o n ab le f o rth e d is tr ic t c o u r t to ex ceed th e n i n e-m o n th u p p er b o u n d reco m m en d ed b y th e G u i d el i n es. R eci d i v i st c onduc tt ouc he s m ul t i pl e 18 U . S . C . § 3553( a ) s e nt e nc i ng f a c t or s : i ta f

f e c t s “ the na tur e a nd c i r c um s t a nc e s of the of f e ns e a nd the hi s t ory a nd c ha r a c t e r i s t i c s of the d efen d an t ”; i tsu g g est s a g reat er “ seri o u sn ess o f th e o ffen se”; an d i tsh o w s a g r e a te rn e e d “to p r o m o te r e s p e c t f o rth e la w ,” “d e te r [ ] c r im in a l c o n d u c t,” a n d “to p r o te c t th e p u b lic f

r o m f u r th e rc r im e s o f

th e d e f e n d a n t.” T h e r e f

o r e , a2 4 - m o n th10

s e nt e nc e w a s r e a s onabl e gi ve n the r e c i di vi s tna tur e of S y r op’ s pr oba t i on vi ol a t i on. I V . CONCL US I ON T h e d istrict co u rt d idn o t ab u se it s d iscr etio n w h en itre v o k ed S yr o p ’s prob at i on , and the 24 -m on th sent ence w as re as on abl e. A FFI R M ED

.