Opinion ID: 77852
Heading Depth: 2
Heading Rank: 1

Heading: Foley's Cross Appeal

Text: In his cross-appeal, Foley argues that his order of forfeiture was defective, the district court erred when it included restitution for acquitted conduct and for harm that was not proved by a preponderance of the evidence, and four instances of prosecutorial misconduct entitled him to a mistrial. We discuss each issue in turn. Foley's arguments all fail.
Foley argues that the district court should not have forfeited the proceeds of his mail fraud because the fraud did not affect a financial institution. He cites a statute in support of this argument, see 18 U.S.C. § 982(a)(2)(A), but he was not charged under that statute. The third superseding indictment sought forfeiture based on other statutes, see 18 U.S.C. § 981(a)(1)(C); 28 U.S.C. § 246, which authorize forfeiture of proceeds from specified unlawful activity, including mail fraud, and contain no requirement about affecting a financial institution, 18 U.S.C. § 981(a)(1)(C); 28 U.S.C. § 2461; see also 18 U.S.C. § 1956(c)(7) (defining specified unlawful activity and incorporating the offenses listed in 18 U.S.C. § 1961(1), which include mail fraud, into this definition). Because Foley does not argue that forfeiture was improper under section 981, the statute upon which the government sought forfeiture, Foley's argument is frivolous. Cf. United States v. Jennings, 487 F.3d 564, 584-85 (8th Cir.2007) (holding that 28 U.S.C. § 2461(c) authorizes criminal forfeiture of proceeds from general mail fraud via 18 U.S.C. § 981(a)(1)(C)); United States v. Edelkind, 467 F.3d 791, 799 (1st Cir.2006); United States v. Vampire Nation, 451 F.3d 189, 200 (3d Cir. 2006).
Foley makes two arguments regarding restitution. First, Foley argues that the district court erred when it calculated restitution based in part on acquitted conduct. Second, Foley argues that the government did not prove by a preponderance of the evidence that the victims of his offense were directly harmed by his conduct.
The Mandatory Victims Restitution Act, 18 U.S.C. §§ 3663A,-3664, governs the restitution order. Under the Restitution Act, restitution for mail or wire fraud is not limited to the specific act of fraud underlying the mailing or use of the wires for which the defendant is convicted, but is available for any victim of the entire scheme or artifice to defraud furthered by the mailing or use of the wires. Hasson, 333 F.3d at 1275 n. 13; see also United States v. Dickerson, 370 F.3d 1330, 1338-41 (11th Cir.2004). The Restitution Act defines victim as any person directly harmed by the defendant's conduct in the course of the scheme, conspiracy, or pattern. 18 U.S.C. § 3663A(a)(2). Foley's reliance on our decision in United States v. McArthur, 108 F.3d 1350 (11th Cir.1997), to support his argument that restitution may not be ordered for acquitted conduct, is misplaced. In McArthur, we interpreted an earlier provision of the Victim and Witness Protection Act, 18 U.S.C. §§ 3663-3664, which allowed a court to order restitution to any victim of such offense for which the defendant was convicted. McArthur, 108 F.3d at 1357 & n. 18 (discussing 18 U.S.C. § 3663(a)(1)(A) (1988)). Both the Protection Act, which was amended in 1990, Pub.L. 101-647, § 2509, 104 Stat. 4789, 4863 (1990), and the Restitution Act, which was enacted in 1996, now define the term victim more broadly: [T]he term victim means a person directly and proximately harmed as a result of the commission of an offense for which restitution may be ordered including, in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the defendant's criminal conduct in the course of the scheme, conspiracy, or pattern. 18 U.S.C. § 3663A(a)(2). The Restitution Act provides relief for victims of a scheme or conspiracy so long as the defendant was convicted of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity. Id.; see also United States v. Washington, 434 F.3d 1265, 1269 (11th Cir.2006); Hasson, 333 F.3d at 1275 n. 13. Foley was convicted of mail fraud, one of the elements of which is intentional participation in a scheme to defraud a person of money or property. United States v. Sharpe, 438 F.3d 1257, 1263 (11th Cir. 2006) (internal quotation marks and citation omitted). The district court was correct to award restitution for any victim of the scheme furthered by Foley's offense of mail fraud.
Foley's argument that the government did not prove by a preponderance of the evidence that the alleged victims were directly harmed by Foley's conduct also fails. Foley argues that not every investor in Global necessarily was harmed. The government responds that all investors, other than those whose money was returned to them in full, were fraud victims nonetheless because Foley's fraud scheme jeopardized their investment and the entire Global enterprise was fraudulent. We agree with the government that there is substantial evidence that Foley harmed all investors. The district court did not clearly err when it found that all the investors identified by the government were directly harmed by Foley's conduct. The government deducted the returns and repayments that victims received from their investments from the restitution amount. See 18 U.S.C. § 3663A(b)(1)(B). Even if some investors who did not share machines were included in the restitution calculation, it is undisputed that Foley operated a scheme in which the money invested by later investors was used to pay earlier investors. That scheme deceived all investors. Although some investors entered the shared location program knowingly, they too were defrauded when that program was not executed as promised. Substantial evidence supports the finding of the district court, and we are not left with the definite and firm conviction that a mistake has been committed. Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985).
Foley contends that four instances of prosecutorial misconduct during his trial entitled him to a mistrial. Prosecutorial misconduct requires a new trial only if we find the remarks (1) were improper and (2) prejudiced the defendant's substantive rights. United States v. Hernandez, 145 F.3d 1433, 1438 (11th Cir.1998) (internal quotation marks omitted). Based on our review of the four comments, we conclude that the district court did not err when it denied Foley's motions for a mistrial.
Foley first argues that he was prejudiced by an improper question that the prosecutor asked his character witness, Herbert Lawrence, but even if the question was improper it did not prejudice Foley. During cross-examination, the prosecutor asked whether it would change Lawrence's opinion of Foley if he knew that Foley had used business funds to pay personal expenses and not reported that fact on his tax return. Foley argues that the government did not proffer a factual basis for the allegation that Foley committed tax fraud. When a witness has testified about a defendant's good character, it is permissible to inquire upon cross-examination about the defendant's prior misconduct so long as it is relevant and the government has some good-faith factual basis for the incidents inquired about. United States v. Wells, 525 F.2d 974, 977 (5th Cir.1976). There are problems with Foley's argument. First, the district court sustained Foley's objection to the question as irrelevant, after the government proffered its good-faith basis for the inquiry at sidebar. See id. (approving of such a procedure). Second, even if the question was improper, Foley cannot establish prejudice because this brief and isolated reference was unlikely to have affected the jury. The question did little to debilitate Lawrence's testimony about Foley's good character in the face of strong evidence of Foley's guilt.
Foley next complains that the prosecutor shifted the burden of proof during closing argument, but Foley's failure to object means that we review for plain error. For there to be plain error, there must (1) be error, (2) that is plain, (3) that affects the substantial rights of the party, and (4) that seriously affects the fairness, integrity, or public reputation of a judicial proceeding. Brough v. Imperial Sterling Ltd., 297 F.3d 1172, 1179 (11th Cir.2002). Foley cannot satisfy this burden. Foley complains about two parts of the prosecutor's argument. First, during his initial closing argument, the prosecutor argued that the jury would have to choose whether it would believe the government's version of the events or Foley's version: Like I said earlier, we bear the burden of proof. It's up to us to prove to you beyond a reasonable doubt the government's case. The defendant doesn't have to put on a case, doesn't have to say anything, doesn't have to put on any witnesses, certainly doesn't have to testify himself. In this case, obviously the defendant did put on a case and he did testify. He put out there his story, his explanation. So, as the jury, you now are left to choose. Do you choose the government's case, the government's evidence and facts and witnesses, Global['s] . . . own records; or do you take the story of the one person who has the most to gain by coming in here and making up a story? Let's be clear, if you are going to believe what the defendant says happened, then you have to believe that all the investors are lying. Second, during his rebuttal closing argument, the prosecutor asked the jury, [D]id you see one investor, one called by Mr. Foley, who came in here and said there was a shared location program before July of 2003? The prosecutor made this statement after he reminded the jury that the government bore the burden of proof. Foley's argument fails. Both of these comments in closing arguments were made in the context of the prosecutor's accurate reminder to the jury about the burden of proof. In that light, Foley cannot establish plain error.
Foley next argues that the district court erred when it denied him a mistrial after the prosecutor made a remark during closing argument that Foley contends was an attempt to impugn the integrity of his counsel. During the closing argument, the prosecutor stated, Tom Foley himself, when the FBI interviewed him, now this is months ago, before he has had a chance to hear the whole trial, before he has had a chance to meet with his lawyer. . . . Foley argues that the remark suggests that Foley changed his story after he met with his lawyer. This argument fails because the remark, when read in context, does not question the integrity of Foley's attorney. The prosecutor's remark did not allege or even imply that Foley's lawyer suborned perjury. See United States v. O'Keefe, 461 F.3d 1338, 1344, 1350 (11th Cir.2006) (concluding that the prosecutor's remark that defense counsel had spoon-fed a bogus theory of the case for the defendant to regurgitate[] on the stand was improper, but affirming because the defendant did not establish prejudice). After the challenged remark, the prosecutor argued that Foley had the opportunity to review discovery materials held by the government before Foley changed the story he had told the FBI. The court sustained Foley's objection to the argument and instructed the jury to disregard the remark. Foley cannot establish that this remark was objectionable or prejudicial.
Foley argues that the district court erred when it did not grant him a mistrial after the prosecutor compared Foley's conduct to that of other criminals, but Foley cannot show prejudice. During closing argument, the prosecutor responded to Foley's arguments about improper conduct of the agents of the Federal Bureau of Investigation in Foley's case and stated that the agents investigated Foley's case as they did any other case. The prosecutor finished this commentary with the remark, That's how they treat drug dealers, that's how they treat gun runners. The district court struck the comment sua sponte and reminded the jury that Foley was only on trial for the crimes charged in the indictment. We review the remark in the context of the entire trial in light of any curative instruction. United States v. Abraham, 386 F.3d 1033, 1036 (11th Cir.2004). The jury was immediately instructed to disregard the remark, and Foley has not explained how the remark affected the outcome of his trial.
Finally, Foley argues that the cumulative effect of the alleged errors entitled him to a new trial, but this argument also fails. As discussed above, it is debatable whether at least one, if not more, of the comments was improper, and Foley cannot establish that the combined errors affected his substantial rights. The jury acquitted Foley of several counts, which suggests that the jury was not prejudiced against Foley and returned its verdict based on the evidence.