Court Opinion

ID: 4149076
Source: CourtListenerOpinion
Date Created: 2017-02-28 21:01:06.845369+00
Date Added: 2024-06-11T14:22:00.455067
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            FEB 28 2017
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                        Nos. 15-50059
                                                      15-50206
              Plaintiff-Appellee,
                                                 D.C. No. 2:14-cr-00282-R-2
 v.

CHRISTOPHER JAMES BLAUVELT,                      MEMORANDUM*
AKA Christopher Blauvelt,

              Defendant-Appellant.

UNITED STATES OF AMERICA,                        No.    15-50066

              Plaintiff-Appellee,                D.C. No. 2:14-cr-00282-R-1

 v.

DAVID PRITCHARD,

              Defendant-Appellant.

                    Appeal from the United States District Court
                       for the Central District of California
                     Manuel L. Real, District Judge, Presiding

                     Argued and Submitted February 14, 2017
                              Pasadena, California

      *
        This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: D.W. NELSON, TALLMAN, and N.R. SMITH, Circuit Judges.

      Following a jury trial, David Pritchard and Christopher Blauvelt appeal their

convictions and sentences for mail fraud, wire fraud, and the sale of unregistered

securities. We have jurisdiction under 28 U.S.C. § 1291. We affirm in part, and

vacate and remand in part.

      1.     The evidence supporting Pritchard’s convictions far exceeds the

quantum that a rational trier of fact would find sufficient to convict. See United

States v. Pelisamen, 641 F.3d 399, 409 n.6 (9th Cir. 2011). With respect to

Pritchard’s fraud convictions, the government presented sufficient evidence that he

intended to defraud and knowingly participated in a scheme to defraud. See United

States v. Sullivan, 522 F.3d 967, 974 (9th Cir. 2008) (per curiam). The evidence

showed Pritchard knew of, and allowed telemarketers to make, material

misrepresentations. The evidence also showed Pritchard made misrepresentations

to, and omitted material facts from, potential and existing investors through phone

conversations, in-person meetings, and investor newsletters.

      Concerning the securities violations, the government presented sufficient

evidence to show Pritchard knew the securities were unregistered and willfully

sold them. Pritchard knew of the cease and desist orders, deduced that the company

was selling unregistered securities, agreed to hide the regulatory problems from

investors, and allowed the company to continue selling unregistered securities.

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      2.     The district court did not abuse its discretion in ruling on Defendants’

requests for continuances. See United States v. Flynt, 756 F.2d 1352, 1358–59 (9th

Cir.), amended by 764 F.2d 675 (9th Cir. 1985).

      First, the district court did not abuse its discretion when it granted

Pritchard’s requested continuance only in part. Although Pritchard blames the

volume of discovery for his failure to find exculpatory evidence, the vast majority

of the documents were nearly identical forms, and the allegedly exculpatory

documents were in his own possession. Pritchard also did not carry his burden to

show that a few more weeks would likely have helped the situation, and the

inconvenience that a longer continuance would have imposed on the court and

other parties was significant. Finally, Pritchard fails to show actual prejudice or

demonstrate how any specific documents would be likely to have changed the

result. See United States v. Wilkes, 662 F.3d 524, 543 (9th Cir. 2011).

      Second, the district court did not abuse its discretion when it denied

Blauvelt’s request to continue trial for one day. Because the district court ordered

Pritchard to present his defense first, Blauvelt actually had more time before his

presentation than he requested from the district court. Therefore, Blauvelt cannot

show prejudice from the denial, which is fatal to his argument. See id.

      3.     Defendants argue they were denied a fair trial because of (1) certain

evidentiary rulings, (2) the government’s statements in closing argument, and (3)

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the manner in which the district court conducted the trial. These allegations did not

individually, or in combination, result in an unfair trial.

      First, Defendants identify only one objection at trial to the government’s

leading questions. Given our deferential standard of review on such rulings, see

United States v. Archdale, 229 F.3d 861, 865 (9th Cir. 2000), we cannot say on this

record that the district court abused its discretion by allowing these questions. The

district court also did not commit plain error by allowing Walker’s lay opinion

testimony about the film industry, which was based on his understandings and

experiences from working in that industry. See United States v. Simas, 937 F.2d

459, 464 (9th Cir. 1991). Furthermore, we find no reversible error in the district

court’s evidentiary rulings regarding Blauvelt’s (1) connection to Gigapix’s

background check; (2) unpaid taxes; and (3) drinking, drug use, and attending strip

clubs. See United States v. Ramirez, 537 F.3d 1075, 1086–87 (9th Cir. 2008).

      Second, reviewing for plain error, the government’s statements in closing

argument did not amount to misconduct and did not prejudice Defendants. There

was ample evidence in the record to support the government’s reasonable inference

that Pritchard knew the Gigapix and OZ3D investments were unlikely to be

profitable. Moreover, to the extent the challenged statements were inaccurate, the

record does not suggest they were anything other than “inadvertent mistakes.” See

United States v. Lloyd, 807 F.3d 1128, 1167–68 (9th Cir. 2015).

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      Third, the district court’s conduct during the proceedings did not result in an

unfair trial. None of the challenged circumstances, singly or cumulatively, leave us

with “an abiding impression that the jury perceived an appearance of advocacy or

partiality.” United States v. Marks, 530 F.3d 799, 806 (9th Cir. 2008); see also

United States v. Scott, 642 F.3d 791, 799–800 (9th Cir. 2011) (per curiam).

      4.     Pritchard has not shown circumstances that justify an exception to our

usual practice of reserving ineffective assistance of counsel claims for collateral

review, after the record has been more fully developed.1 See United States v.

McGowan, 668 F.3d 601, 605–06 (9th Cir. 2012).

      5.     Because the facts proven at trial fell within the scheme alleged in the

indictment––concentrating on Defendants’ misrepresentations and omissions to

defraud victims or obtain their money––the government’s trial theory did not

constructively amend, or materially vary from, the indictment. See United States v.

Mancuso, 718 F.3d 780, 792 (9th Cir. 2013) (constructive amendment); United

States v. Bhagat, 436 F.3d 1140, 1146–47 (9th Cir. 2006) (material variance).

      6.     The challenged jury instructions accurately stated the law. The first

correctly instructed that the jury “may consider evidence of . . . a loss in

determining whether the scheme existed.” See Farrell v. United States, 321 F.2d

      1
        Therefore, Pritchard’s motion to take judicial notice, filed February 8,
2016, is DENIED as moot.
                                           5
409, 419 (9th Cir. 1963); United States v. Rasheed, 663 F.2d 843, 850 (9th Cir.

1981). The second accurately instructed that “[a] defendant’s belief in the ultimate

success of a venture, even if that belief is honestly held, is not in itself a defense

and does not justify or excuse knowingly making false or misleading statements or

knowingly concealing material facts.” See United States v. Hickey, 580 F.3d 922,

931 (9th Cir. 2009) (“[E]ven if [the defendant] genuinely believed his investment

scheme would be profitable and would result in gains for his investors, he would

still be guilty of securities fraud and mail fraud if he knowingly lied to investors

about the risks associated with his plan.”).

      7.     In a mail or wire fraud conviction, the district court must “order

restitution in the amount of the victim’s actual loss,” United States v. Thomsen,

830 F.3d 1049, 1065 (9th Cir. 2016); 18 U.S.C. § 3663A(a)(1)–(2), which the

government must show by a preponderance of the evidence, United States v.

Waknine, 543 F.3d 546, 556 (9th Cir. 2008). The FBI forensic accountant used a

reasonably reliable method of calculating the victims’ actual losses. However, the

district court ordered Pritchard to pay $6 million less than Blauvelt. Blauvelt joined

in Pritchard’s restitution arguments, and the court provided no explanation for this

substantial difference. Therefore, we vacate Pritchard’s and Blauvelt’s restitution

orders and remand for the district court to explain or eliminate the disparity.

      AFFIRMED in part, VACATED and REMANDED in part.

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