Opinion ID: 73339
Heading Depth: 3
Heading Rank: 4

Heading: The Federal Prosecution

Text: In June 1996, the United States Attorney for the Southern District of Florida filed an information charging Brand with violating the CSRA, which proscibes the willful failure to pay past due support obligations with respect to children residing in another state. See 18 U.S.C.A. § 228(a). The CSRA defines a past due support obligation as any amount that (1) is owed pursuant to a state court order; (2) remains more than a year overdue or is greater than $5,000; and (3) is intended for support and maintenance of a child or of a child and the parent with whom the child is living[.] See 18 U.S.C.A. § 228(d)(1). Brand pleaded not guilty and consented to a trial before a magistrate judge. He subsequently moved to dismiss the information, arguing that the underlying state court order was invalid because it was unconstitutionally vague with respect to delineating what Brand owed as his support obligation for purposes of his compliance with the CSRA. The magistrate judge denied the motion and, on September 3, 1996, the case proceeded to trial without a jury.
The government presented its case through exhibits and the testimony of eight witnesses: Margrethe, Corporal Keenhold (the arresting officer), Joseph Tenhagen (a jewelry appraiser), Kenneth Annibale (one of Brand's former business partners), Philip Unterberg (a sales representative from a security systems company), Philip Disque (a lawyer and certified public accountant), Jessica Rohm (a real estate broker), and Robert Passero (a financial auditor with the United States Attorney's Office). The defense case consisted of the introduction into evidence of a transcript and order from a mid-1996 hearing before the circuit judge, wherein she attempted to clarify the financial distribution portion of the underlying dissolution order.4 Brand did not testify. The evidence adduced at trial largely involved Brand's finances and assets following the entry of the state circuit judge's 1992 order. That evidence may be summarized as follows:
Brand was a 60 percent equity partner of Audio Marketing International d/b/a Goldmund's (Audio Marketing) until the company's dissolution in 1995. Audio Marketing was a distributor for a high-end audio [equipment] manufacturer. From mid-1993 to March 1995, approximately $135,000 was deposited into Audio Marketing's bank account. Kenneth Annibale, a 40 percent equity partner, was an authorized signatory on that account. Brand instructed Annibale to write company checks to Patricia Pan, who did not work for Audio Marketing. As previously mentioned, Pan lived with Brand at Trump Tower and paid his American Express bills in 1993. More than half the checks drawn on Audio Marketing's account were paid to Brand or Pan.
Philip Unterberg, a residential sales representative for ADT Security Systems, testified that in April 1995 he visited a house in Leighton, Pennsylvania, in response to a call from Ed Maglione. Maglione had requested someone to survey the house and give him a cost estimate for the installation of a security system. When Unterberg arrived at the house he met Brand who introduced himself as Maglione.5 Brand said that he needed a security system for the home because he traveled ... back and forth to New York quite often. That day, Unterberg drew up an agreement for a system. On the agreement, Brand listed 4 Further details regarding this hearing are set forth in part II(B)(1) of this opinion. 5 At the time of his arrest in 1996, Brand was driving a van that had a New York license plate, but was registered in the name of Edward Maglione of Leighton, Pennsylvania. Brand told the arresting officer that Maglione was a friend. several persons to be contacted in the event of an emergency: Ed Maglione (i.e. Brand), Patricia who lived in New York (presumably Pan, his girlfriend), and Avis Maglione (whom Brand represented was his brother).6 Brand then wrote a check to ADT Security Systems for approximately $1,000. In response to another call, Unterberg again went to the Pennsylvania house in February of 1996. Unterberg's boss accompanied him on this occasion. Brand had apparently told Unterberg that he was dissatisfied with the security system and wanted an upgrade. During this visit, Unterberg and his boss went into the garage with Brand and saw approximately 35 to 40 BMW motorcycles. Brand said that he collected them. When Unterberg's boss inquired about purchasing a BMW motorcycle, Brand told him that he could obtain one for between $4,000 and $14,000. ADT Security Systems charged Brand another $1,000 for the upgrade at the Pennsylvania residence.
The testimony at trial linked Brand to two properties in New York that were sold for millions of dollars after the entry of the state court order. In 1989, Brand purchased property at 16 East 78th Street in New York City for $2.3 million. He then made capital improvements on the property, raising its value to $2.76 million. Approximately two years after the purchase, Brand sold this property to Fresh Image, Inc. for $950,000. At that time, one of the officers of Fresh Image was Alexander Curtis. Curtis would later become the administrator of Audio Marketing, Brand's distributorship, which also eventually occupied the ground floor of the building at 16 East 78th Street. Philip Disque, a certified public accountant who had previously been retained to assess Brand's financial situation in 1989 and 1992, testified that Brand's sale of this property at a loss of $1.8 million to Curtis, a business acquaintance, was questionable. Disque opined that Brand had 6 Brand's nickname is Avi. engineered this sale to retain control of the property. Jessica Rohm, a real estate broker, testified that she went to see the 16 East 78th Street property in 1993 (about two years after Brand sold it to Fresh Image). At that time, she met Brand, who said he was representing the owner. Rohm represented a group of Brazilian investors who ultimately purchased the property for $2.06 million in May of 1993. Rohm testified that the property yielded annual rental income of $200,000. Prior to the sale, Brand was the only person [Rohm] ever had any contact with and the only person she negotiate[d] with. At the closing, Curtis was present on behalf of the seller, Fresh Image. Brand was also present and surrendered Audio Marketing's leasehold interest in the property. Rohm characterized Brand as an interested party who was involved in the closing. In the fall of 1994, Brand called Rohm and told her I have another property for sale. He inquired about whether the Brazilian investors would be interested. Brand informed Rohm that a corporation owned this particular property and that she shouldn't let anybody know that he [Brand] [was] involved with the property. Brand showed Rohm the building, which was located at 22 East 78th Street-very close to the one previously sold. Brand negotiated the sale price with Rohm, and the property was ultimately sold in September of 1995 for $1.318 million. Rohm testified that the building at 22 East 78th Street had a single tenant. Brand told Rohm that we had given the tenant $100,000 so that she would vacate the premises before the closing. Annibale, Brand's former business partner, also testified that Brand had spoken of a townhouse that he owned that had one tenant. Brand told Annibale that the townhouse was located in New York on 78th Street. Brand and Rohm informally discussed other real estate deals while they were negotiating the sale of the 22 East 78th Street property. Brand said that he wanted to offer another property for sale that was on Long Island. He also expressed an interest in buying an apartment at Trump Tower or Olympic Tower for around $1 million.
Brand again raised his challenges to the validity of the underlying state court order in a motion for judgment of acquittal. He also argued in this motion that the government had not proved willfulness under the CSRA because the state court order was too vague and indefinite for him to have known how to comply with it. The magistrate judge denied this motion and issued an order finding Brand guilty of violating the CSRA. The magistrate judge also denied Brand's subsequent motion for a new trial. Brand's Presentence Investigation Report (PSI) initially set the amount of his restitution at $115,962, representing back child support. The government objected, however, and advised the probation office of its position that Brand's restitution amount should include the $3.935 million lump sum owing under the state court order. The probation office agreed and, in an addendum to the PSI, concluded that the lump sum appear[ed] [to be intended] for support of the children and [Brand]'s ex-wife, thereby falling within the CSRA's definition of a past due support obligation. Accordingly, the probation office adjusted the previous restitution figure to include the lump sum, and set the final amount at $4,050,963.41. Brand objected to the increase in restitution, arguing that the $3.935 million lump sum award was not child support in toto, but rather was meant to cover a multitude of non-support-related purposes. Brand raised this argument at his sentencing hearing and also claimed to be incapable of paying a multi-million dollar restitution obligation. The magistrate judge rejected Brand's contentions and agreed with the PSI's calculation of the restitution amount to include the monthly child support arrearage in addition to the lump sum award. With respect to Brand's ability to pay, the magistrate judge noted that there is no explanation for what happened to the trail of monies that the trial evidence linked to Brand. Accordingly, the magistrate judge ordered Brand to pay restitution in the amount of $4,050,963.41 to Margrethe and sentenced him to time served. This appeal followed.