Court Opinion

ID: 1023659
Source: CourtListenerOpinion
Date Created: 2013-07-04 23:41:15.833309+00
Date Added: 2024-06-11T15:37:53.982332
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                               No. 06-4631

UNITED STATES OF AMERICA,

                                                Plaintiff - Appellee,

          versus

MARUTHI MANNEY,

                                               Defendant - Appellant.

                               No. 06-4632

UNITED STATES OF AMERICA,

                                                Plaintiff - Appellee,

          versus

LAKSHMI MANNEY,

                                               Defendant - Appellant.

Appeals from the United States District Court for the District of
Maryland, at Greenbelt.    Deborah K. Chasanow, District Judge.
(8:04-cr-00560-DKC-1; 8:04-cr-00560-DKC-2)

Submitted:   August 27, 2007              Decided:   September 5, 2007

Before WILKINSON, TRAXLER, and DUNCAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.

William C. Brennan, Jr., BRENNAN, SULLIVAN & MCKENNA, LLP,
Greenbelt, Maryland; Robert C. Bonsib, MARCUS & BONSIB, Greenbelt,
Maryland, for Appellants.     Rod J. Rosenstein, United States
Attorney, Bryan E. Foreman, Assistant United States Attorney,
Greenbelt, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

           Dr. Maruthi Manney was convicted by a jury of wire fraud

in violation of 18 U.S.C.A. § 1343 (West 2000 & Supp. 2007)(Count

One) and of eight counts of mail fraud in violation of 18 U.S.C.A.

§ 1341 (West 2000 & Supp. 2007) (Counts Two through Nine).                        His

wife, Lakshmi Manney, was convicted on Counts Two through Nine and

acquitted on Count One.           The district court sentenced Maruthi

Manney to thirty-six months’ imprisonment and Lakshmi Manney to

twenty-one months’ imprisonment.           It imposed three-year terms of

supervised release for both the Manneys and ordered both to pay

$605,932.71 in restitution.          In these consolidated appeals, the

Manneys challenge (I) the district court’s denial of their motion

for continuance of the trial date, and (II) the district court’s

denial of their motion for a new trial.

           The   charges    arose       from   the       Manneys’    ownership    and

fraudulent     operation    of    SAI    Plus,       a    health    care   benefits

administration    company    located      in   Rockville,       Maryland.        With

respect to Count One, the Government’s evidence demonstrated that

Maruthi Manney used a wire communication in furtherance of a scheme

to   defraud   First   Odyssey     Resource      Management         (“Odyssey”),    a

professional employer organization.              Maruthi Manney represented

that SAI Plus would provide a fully-insured employee group health

plan that would pay routine claims to health care providers within

four weeks of receipt.           Odyssey paid SAI Plus premiums for the

                                     - 3 -
months of August, September and October 1999, until employees began

to recognize that certain health claims were not being paid.    In

fact, SAI Plus was never a licensed insurance company and failed to

provide Odyssey with a fully-insured health plan.

          With respect to Counts Two through Nine, the Government’s

evidence demonstrated that Maruthi and Lakshmi Manney used the

mail in furtherance of a scheme to defraud Troup Independent School

District, Sundown Ranch, Dusty Rhodes Ford, All Seasons Sash and

Door, Brock Independent School District, Pine Tree Independent

School District, Waskom Independent School District, and Gulf Coast

Transport, Inc. Maruthi Manney represented that SAI Plus would act

as Third Party Administrator (“TPA”) for these entities, providing

a variety of services including payment of routine claims to health

care providers within four weeks of receipt, and maintenance of

stop-loss insurance on behalf of each individual/entity.   Based on

these representations, each of the entities enrolled and paid

premiums to SAI Plus.

          In fact, SAI Plus was never licensed as a TPA in Texas.

By November 1999, the groups began to notice that certain claims

were not being paid.    SAI Plus employees testified that, at the

instruction of the Manneys, claims were continually processed but

an increasing volume of checks were printed and placed in a file

cabinet rather than mailed to the payee.       At times, after a

particular employer group or its broker complained repeatedly, the

                              - 4 -
unmailed checks for that group would be sent.                     In November 2000,

Federal agents executed a search warrant on the SAI Plus office,

and    seized   4902   printed      but    unmailed     health     insurance   claim

checks.1

             The Government’s evidence also demonstrated that for each

of    the   entities   named   in    Counts       Two   through    Nine,   stop-loss

insurance coverage was not in place on the effective date of their

health plan.      Each of the stop-loss policies became effective

between three and eight months late.                     In addition, stop-loss

coverage for several of the entities lapsed for three to five

months during the pendency of the health plan because SAI Plus

failed to pay the premium to the stop-loss insurance carrier.2                  The

Government’s evidence also indicated a mismanagement of funds.

                                           I.

             We review a district court’s denial of a motion for a

continuance for an abuse of discretion. United States v. Williams,

445 F.3d 724, 738 (4th Cir.), cert. denied, 127 S. Ct. 314 (2006).

An abuse of discretion in this context is “‘an unreasoning and

       1
      The 4902 unmailed checks related to other employer groups,
and were not limited to the eight entities named in the
indictment.
       2
      The uncontested evidence at trial demonstrated that no stop-
loss claims were presented to SAI Plus during the periods when
there was no coverage, therefore, these lapses did not result in
actual loss to any of the employer groups.

                                          - 5 -
arbitrary     insistence   upon    expeditiousness     in    the   face   of   a

justifiable request for delay’” and violates a defendant’s Sixth

Amendment right to counsel.        Id. at 739 (quoting      Morris v. Slappy,

461 U.S. 1, 11-12 (1983)).         In order to prove an infringement of

the   right    to   effective    assistance   of   counsel,    however,   “the

defendant must show that the error specifically prejudiced [his]

case in order to prevail.”           Id. (internal quotation marks and

citation omitted).

              A party’s substantial delay is also relevant to our

review of the denial of a motion for continuance.                  See United

States v. Badwan, 624 F.2d 1228, 1231 (4th Cir. 1980).              “The later

that a motion for a continuance is made, the more likely it is made

for dilatory tactics; hence, it is less likely that the district

court arbitrarily denied the continuance.”                  United States v.

LaRouche, 896 F.2d 815, 824 (4th Cir. 1990).

              The Manneys’ trial lawyers were both appointed in June

2005.   Discovery in this case included over 200 boxes of documents

seized from SAI Plus.           Despite having filed multiple pre-trial

motions, counsel did not even mention a continuance until the pre-

trial motions hearing just eleven days before trial.               A review of

the transcript reveals that the Manneys’ attorneys were actually

seeking to discover what evidence (witnesses and exhibits) the

Government intended to introduce at trial.           Only when it appeared

they may not prevail did counsel begin to argue for a continuance.

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In view of the timing of this oral motion, the district court may

have concluded that it was merely a dilatory tactic. See LaRouche,

896 F.2d at 823 (“the district court alone has the opportunity to

assess the candidness of the movant’s request”).

            In addition, as the hearing progressed, counsel received

concessions from the Government that ultimately mitigated their

stated need for a continuance of the trial date.3             At the district

court’s    urging,     the   Government   disclosed     the   categories   of

documents it intended to introduce as trial exhibits, and that its

witnesses and exhibits would be confined to the nine entities named

in the indictment as well as a few others.             The Government also

gave defense counsel its demonstrative exhibit summarizing the

evidence to be introduced regarding the Manneys’ various bank

accounts, as well as an index describing the contents of each of

the 204 boxes of SAI Plus documents.           After considering the nature

of   the   documents   produced,   and    in   light   of   the   Government’s

narrowing of the issues, the district court determined that a

continuance was not necessary and denied the motion.

      3
      Appellants contend that trial counsel did not fully
appreciate how much time they would need to access and review the
electronic records that the Government had produced to them. This
undermines the Manneys’ argument because the test for abuse of
discretion in denying a continuance “depends mainly on the reasons
presented to the district judge at the time the request is denied.”
LaRouche, 896 F.2d at 823.        The district court cannot be
accountable for information that the parties did not present to it.

                                    - 7 -
               We find that this was not an abuse of discretion.                   See

United States v. Stewart, 256 F.3d 231, 244-46 (4th Cir. 2001).                      In

LaRouche, the district court denied a continuance despite the fact

that counsel had only thirty-four days to review “voluminous

documents” and to prepare for a four-week trial on a thirteen-count

mail fraud indictment.           LaRouche, 896 F.2d at 822.          We affirmed the

denial,       in   part,     based    on    counsel’s    eighteen-day      delay     in

requesting a continuance, and because defense counsels’ pre-trial

submissions demonstrated familiarity with the case.                      Id. at 824.

Similarly, the Manneys’ numerous pretrial filings and significant

delay    in    requesting        a   continuance,   in    conjunction      with    the

narrowing of issues more than a week before trial, indicate that

the denial of a continuance was not an abuse of discretion.

               Moreover, even if the district court did abuse its

discretion in denying the motion for continuance, the Manneys have

not demonstrated that the denial “specifically prejudiced” their

case.      LaRouche, 896 F.2d at 823.               Rather than articulating

specific       errors      of    counsel    resulting     in    actual    prejudice,

Appellants contend that under the circumstances faced by trial

counsel, “the likelihood that any lawyer, even a fully competent

one,    could      provide      effective    assistance    is   so    small   that   a

presumption of prejudice is appropriate without inquiry into the

actual conduct of the trial.”                Appellants’ Brief at 14 (citing

                                           - 8 -
United States v. Cronic, 466 U.S. 648, 659 (1984); Glover v. Miro,

262 F.3d 268, 275 (4th Cir. 2001)).

          In Cronic, the Supreme Court held that while it is

normally inappropriate to presume ineffective assistance of counsel

without an inquiry into whether a defendant was actually prejudiced

by counsel’s performance at trial, circumstances may sometimes be

so egregious as to warrant a presumption of prejudice. Cronic, 466

U.S. at 659-60.    The Court noted, however, that the presumption of

prejudice does not arise in every case in which counsel belatedly

begins representation of a defendant.           See Morris v. Slappy, 461

U.S. 1 (1983); Avery v. Alabama, 308 U.S. 444 (1940).

          In fact, the Court refused to adopt the presumption in

the case before it, even though Cronic’s counsel had been appointed

just twenty-five days before the trial and was a young real estate

lawyer with no criminal law experience who had never previously

tried a case before a jury.     Cronic, 466 U.S. at 663-66.        The Court

rejected the argument that a presumption of prejudice followed from

the fact that the Government had years to review the relevant

documents while defense counsel had only twenty-five days.             Id. at

664-65.   There,    as   in   this    case,    “the   time   devoted   by   the

Government to the assembly, organization, and summarization of

thousands of written records . . . unquestionably simplified the

work of defense counsel in identifying and understanding the basic

character of defendants’ scheme.”        Id.    The Court also recognized

                                     - 9 -
that, like here, where the underlying facts are not in dispute, the

time was more than sufficient to consider “whether those facts

justify an inference of criminal intent.”        Id. at 664-65.

           We find that the circumstances of this case do not

warrant a presumption of prejudice.         The Manneys’ trial counsel

accepted their appointments with full knowledge of the trial date,

and with ten and twelve weeks respectively, to prepare.         There is

no suggestion that the attorneys were inexperienced or otherwise

ill-suited to defend these criminal charges.             While the case

involved   a   significant    volume   of   documents,   the   Government

described its evidence in advance of trial, simplifying the work of

defense counsel.     We have declined to presume prejudice under

circumstances more trying than these.         See Stewart, 256 F.3d at

246; Griffin v. Aiken, 775 F.2d 1226, 1229-30 (4th Cir. 1985); see

also United States v. Gaither, 527 F.2d 456, 457-58 (4th Cir.

1975).

                                   II.

           Federal Rule of Criminal Procedure 33(a) permits the

trial court to grant a motion for a new trial “if the interest of

justice so requires.”        A district court “‘should exercise its

discretion to grant a new trial sparingly,’ and . . . should do so

‘only when the evidence weighs heavily against the verdict.’”

United States v. Perry, 335 F.3d 316, 320 (4th Cir. 2003) (quoting

                                 - 10 -
United     States   v.    Wilson,   118    F.3d   228,   237   (4th   Cir.   1997)

(internal quotation marks omitted)).              We review the denial of a

Rule 33 motion for abuse of discretion.              United States v. Adam, 70

F.3d 776, 779 (4th Cir. 1995).            Under this standard, we “‘may not

substitute [our] judgment for that of the district court; rather,

we must determine whether the court’s exercise of discretion,

considering the law and the facts, was arbitrary or capricious.’”

United States v. Fulcher, 250 F.3d 244, 249 (4th Cir. 2001)

(quoting United States v. Mason, 52 F.3d 1286, 1289 (4th Cir.

1995)).

             In order to warrant a new trial based on newly discovered

evidence, a defendant must show that:              (1) the evidence is newly

discovered; (2) the defendant used due diligence; (3) the evidence

is   not   merely   cumulative      or    impeaching;    (4)   the    evidence    is

material;     and   (5)    the   evidence    would    probably    result     in   an

acquittal at a new trial.           United States v. Lofton, 233 F.3d 313

(4th Cir. 2000).          Unless the defendant demonstrates all five of

these factors, the motion should be denied.                    United States v.

Chavis, 880 F.2d 788, 793 (4th Cir. 1989).

             The district court found that the proffered testimony of

Kola and Kumar failed to satisfy at least four of the five factors

of this test.        These findings are entitled to great weight on

appeal.     See United States v. Johnson, 487 F.2d 1278, 1279 (4th

Cir. 1973) (district court’s findings “properly drew upon the

                                     - 11 -
knowledge      and     observations     gained   by    having   presided   at   the

original trial”).

               Kola’s and Kumar’s testimony that the Manneys infused

personal funds into SAI Plus when necessary is merely cumulative of

what the jury heard from Maruthi Manney.                 Their testimony that a

substantial number of medical claims were actually paid is both

immaterial and cumulative; the Government did not advance a theory

that   no   claims      were   paid,    and   numerous    Government   witnesses

testified about claims that were, in fact, paid.                Kola’s testimony

about the effect of the search warrant on the continued viability

of SAI Plus is also cumulative and not material to the charges in

the indictment.          Kumar’s testimony that he was “unaware of any

regular or ongoing problem with the payment of medical claims” is

immaterial and contradicts the testimony of Maruthi Manney.

               The only material, non-cumulative testimony comes from

Kola, relating his familiarity with the day-to-day accounting at

SAI    Plus.      He    states   that    he   “could    have    contradicted    the

government’s allegations which suggested that large amounts of

money were not handled properly and were not used to pay claims for

medical services.” In light of the Government’s evidence at trial,

we find that the district court did not abuse its discretion in

concluding that this testimony would not likely result in an

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acquittal.4    Even if a jury could find Kola’s testimony more

credible than that of the FBI’s financial analyst, such testimony

would not diminish the impact of the Government’s undisputed

evidence regarding drawers full of unmailed checks as well as stop-

loss insurance failures.      The accounting was only a small part of

the picture created by the Government’s evidence.

          In support of their demand for a new trial, Appellants’

remaining grounds, in essence, amount to an argument that the

Manneys’ trial attorneys were ineffective.      Appellants bemoan the

lack of a defense expert in forensic accounting and insurance, but

the record indicates that trial counsel did not seek leave to hire

any experts. Appellants purport to demonstrate the false testimony

of a Government witness regarding the signatures on the Dallas

General insurance policy, but do so based on documents that were in

possession    of   trial   counsel.   They   also   rely   on   allegedly

misleading testimony regarding payment of Odyssey claims at a time

when Odyssey had ceased to pay premiums, as well as alleged errors

by the FBI financial analyst, but such testimony was subject to

cross-examination at trial.

          “Although generally not raised in the district court nor

preserved for review on appeal, ineffective assistance claims

     4
      Notably, Kola’s affidavit, signed in New Zealand, does not
indicate why he failed to testify on behalf of the Manneys during
their first trial, nor does it include any statement that Kola is
willing to return to the United States to testify in the event of
a new trial.

                                 - 13 -
asserted in motions under Rule 33 — and ruled on by the district

court — may be considered on direct appeal.”                United States v.

Russell, 221 F.3d 615, 619 (4th Cir. 2000).              Here, the district

court correctly declined to rule on whether trial counsel was

actually ineffective because the Manneys failed to offer any

statement or testimony from those attorneys.          Without hearing from

trial counsel about the tactical decisions confronted, a court

cannot make a reasoned judgment as to whether or not representation

was ineffectual.      See United States v. DeFusco, 949 F.2d 114, 120-

21   (4th   Cir.    1991).     Moreover,   the   district    court   was   “not

persuaded that any competent attorney would have done more than

they did.”       For the reasons already discussed, we find that this

was not an abuse of discretion.

            We     therefore   affirm   the   Manneys’   convictions.       We

dispense with oral argument because the facts and legal contentions

are adequately presented in the materials before the court and

argument would not aid the decisional process.

                                                                     AFFIRMED

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