Court Opinion

ID: 3061783
Source: CourtListenerOpinion
Date Created: 2015-10-14 00:53:57.071629+00
Date Added: 2024-06-11T10:37:03.068013
License: Public Domain

[DO NOT PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS
                                                             FILED
                  FOR THE ELEVENTH CIRCUITU.S. COURT OF APPEALS
                    ________________________ ELEVENTH CIRCUIT
                                                         SEPT 14, 2010
                          No. 07-10718                    JOHN LEY
                    ________________________                CLERK

                 D. C. Docket No. 04-60206-CR-JIC

UNITED STATES OF AMERICA,

                                                         Plaintiff-Appellee-
                                                           Cross-Appellant,

                                versus

STEVE HEIN,
BERNARD ROEMMELE,
a.k.a. Bernie,

                                                    Defendants-Appellants-
                                                          Cross-Appellees.

                    ________________________

             Appeals from the United States District Court
                 for the Southern District of Florida
                   _________________________

                        (September 14, 2010)
Before BARKETT and MARCUS, Circuit Judges, and HOOD,* District Judge.

PER CURIAM:

I.     BACKGROUND

       Steve Hein seeks review of his convictions for RICO conspiracy, conspiracy

to commit mail and/or wire fraud, and conspiracy to commit money laundering.

Hein contends the government did not provide sufficient evidence to support the

jury’s conviction of him on all counts and that the district court failed to define

proceeds correctly as receipts to the jury in light of the money laundering charge.

       The jury also convicted Bernard Roemmele of RICO conspiracy, conspiracy

to commit mail and/or wire fraud, conspiracy to commit money laundering, and

securities fraud. He makes a similar argument regarding the failure of the court to

correctly define receipts in light of his money laundering charge.                  Although

interwoven with his discussion of the jury instructions on his RICO conspiracy

conviction, Roemmele also raises a claim regarding the sufficiency of the evidence

on this charge. Roemmele also requests reversal on the basis of the district court’s

denial of a continuance, refusal to authorize assistance to court-appointed counsel,

and a violation of his Due Process rights resulting from evidentiary hearings

throughout the course of the trial. Roemmele also argues the district court erred by

       *
        Honorable Joseph M. Hood, United States District Judge for the Eastern District of
Kentucky, sitting by designation.

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inappropriately enhancing the Sentencing Guidelines for obstruction of justice as

applied to his sentence.

      The convictions arise from Hein’s role as the executive vice president of

CitX Corporation (CitX) and Roemmele’s role as chief executive officer and

founder of CitX. CitX claimed to have created internet-based technology and other

software used by clients around the world.          CitX partnered with Professional

Resource Systems International, Inc. (“PRSI”) to market its software. In reality,

however, the two companies operated as a Ponzi scheme. Roemmele and Hein

also participated in investment fraud using resources from PRSI.

      The government challenges the defendants’ assertions and has filed a cross-

appeal contending that the district court erred by relying only on the jury forfeiture

verdict when establishing the value of loss for purposes of the Sentencing

Guidelines. U.S. Sentencing Guidelines § 2S1.1 (2009).          The jury returned a

special verdict of $0 forfeiture as to Hein and $480,000 as to Roemmele. No

findings were made as to the value of the losses.

      For the reasons stated below, as to the errors assigned by Appellants, the

Court holds that the district court’s actions constituted harmless error, at worst,

without effect on the trial. The district court, however, did err by relying solely on

the forfeiture award in establishing loss under the Sentencing Guidelines § 2S1.1.

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Accordingly, we AFFIRM the convictions of Defendants, but VACATE the

judgment of the district court as to sentencing and REMAND this matter to the

district court for further proceedings in accord with this opinion.

II.   DISCUSSION

      A.     The district court was presented with sufficient evidence to prove
             Hein and Roemmele guilty on all three counts at issue.

      We review claims of sufficiency of the evidence de novo. United States v.

Lumley, 135 F.3d 758, 759 (11th Cir. 1998). In doing so, we view the evidence “in

the light most favorable to the government and drawing all reasonable inferences

and credibility choices in favor of the jury’s verdict.” Id. at 759 (citing United

States v. Chirinos, 112 F.3d 1089, 1095 (11th Cir. 1997)). Thus, if a reasonable

person could have found the appellants guilty beyond a reasonable doubt, the

verdict will stand. United States v. Jones, 933 F.2d 1541, 1546 (11th Cir. 1991)

(citing United States v. Migueles, 856 F.2d 117, 118 (11th Cir. 1988)).

      Taking into consideration the oral arguments, the record, and the parties’

briefs, we conclude sufficient evidence does exist to convict Hein as well as

Roemmelle for both RICO conspiracy and conspiracy to commit mail and/or wire

fraud. In order to conspire to commit mail and/or wire fraud, the defendant must

agree “to engage in a scheme to defraud in which they contemplated that the mails

[or wire service] would likely be used.” United States v. Ross, 131 F.3d 970, 981

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(11th Cir. 1997) (quoting United States v. Massey, 827 F.2d 995, 1002 (5th Cir.

1987)). Both Hein and Roemmele state they had no knowledge of the criminal

activities and made no agreement to engage in such a scheme. Taken in a light

most favorable to the government, however, and drawing all inferences in favor of

the jury verdict, the Court finds sufficient evidence exists to uphold their

convictions.

      As to the RICO conspiracy charge, this Court has held the government can

show an agreement to participate in a RICO conspiracy “1) by showing an

agreement to an overall objective; or, 2) by showing that a defendant agreed

personally to commit two predicate acts and therefore to participate in a single

objective conspiracy.” United States v. Abbell, 271 F.3d 1286, 1299 (11th Cir.

2001) (citing United States v. Church, 955 F.2d 688, 694 (11th Cir. 1992)). Upon

review of the record, the parties’ briefs, and oral arguments of counsel, we again

find a reasonable person could find Hein and Roemmele guilty of RICO

conspiracy.    Based upon the evidence discussed above, in addition to other

evidence in the record, the Court holds the government has not only shown an

agreement to commit two predicate acts but an agreement to the overall objective

of the conspiracy as well.

      With regard to the conviction on conspiracy to commit money laundering,

                                        5
appellants Hine and Roemmele base their appeal primarily on the district court’s

failure to define proceeds as receipts. This issue will be addressed in a subsequent

section of this opinion. See infra Part II.C. This Court, however, holds based on

the record, oral argument of counsel, and the parties’ briefs that sufficient evidence

also existed for a reasonable person to believe beyond a reasonable doubt that both

committed money laundering under the instruction given by the district court. As a

result, we AFFIRM their convictions for RICO conspiracy, conspiracy to commit

money laundering, and conspiracy to commit mail and/or wire fraud.

       B.    The jury is not required to come to a unanimous agreement on
             predicate acts that form a RICO conspiracy.

      Defendants argue for the first time on appeal that the district court must

receive unanimous agreement by the jury on the predicate acts that form a RICO

conspiracy. Accordingly, we review this issue for plain error. United States v.

Demarest, 570 F.3d 1232, 1241 (11th Cir. 2009) (citing United States v. Olano,

507 U.S. 725, 732 (1993)). We will not reverse based on a jury instruction “unless

‘the charge considered as a whole, is so clearly erroneous as to result in a

likelihood of a grave miscarriage of justice,’ or the error ‘seriously affects the

fairness, integrity or public reputation of judicial proceedings.’” United States v.

Pepe, 747 F.2d 632, 675 (11th Cir. 1984) (quoting United States v. Thevis, 665

F.2d 616, 645 (5th Cir. Unit B 1982)).

                                          6
       The jury convicted the appellants under the RICO conspiracy statute which

states “[i]t shall be unlawful for any person to conspire to violate the provisions of

[the prohibited activity stated in the RICO statute.]” 18 U.S.C. § 1962(d) (2006).

While the defendants wish to extend the United States Supreme Court’s ruling in

Richardson v. United States, 526 U.S. 813 (1999), requiring unanimous agreement

as to violations under the Continuing Criminal Enterprise (CCE) statute, we refuse

to do so in recognition of a prior holding that 18 U.S.C. § 1962(d) requires

violators to knowingly join a conspiracy that violates the substantive part of the

statute but does not require “overt acts, nor specific predicate acts that the

defendant agreed personally to commit . . . for a section 1962(d) offense.” United

States v. Glecier, 923 F.2d 496, 500 (11th Cir. 1991) (citations omitted).

       When the district court instructed the jury on the law of RICO conspiracy

and specifically with regard to “pattern of racketeering activity,” it stated that the

jury

       must find beyond a reasonable doubt that the defendant agreed that at
       least one member of the conspiracy would commit at least two acts of
       ‘racketeering activity,’ sometimes called predicate offenses, as
       described in the indictment, within ten years of each other. . . . You
       must also unanimously decide on what type of racketeering acts were
       involved in the conspiracy. (emphasis added)

       The trial court further explained that “the government does not have to prove

                                          7
that any racketeering acts were actually committed at all, or that the defendant

agreed to personally commit any such acts.”

      The defendants’ claim as to the jury instruction on the RICO conspiracy is

not about whether or not there must be unanimous agreement on the predicate acts,

but rather what it is that the jury must unanimously agree upon. Roemmele and

Hein believe the law required the district court to instruct the jury that it had to

unanimously agree on the specific and individual acts that the conspirators

intended to engage in (or in fact did engage in) during the conspiracy.           This,

however, is more than the law requires. To establish a RICO conspiracy the

government must show that the defendant agreed to participate in an enterprise

whose purpose was to engage in a pattern of racketeering activity.             Thus in

explaining this law to the jury, the district court correctly instructed the jurors that

they had to agree that the enterprise would involve a “pattern of racketeering

activity,” which it further instructed would require unanimous agreement on the

type of predicate acts, i.e., money laundering, mail or wire fraud, or obstruction of

justice to name a few, that constituted a pattern of racketeering. Roemmele’s and

Hein’s argument that the jury had to unanimously agree on particular and

individual acts and not just the general types of predicate offenses is not supported

by the law and thus was not required in a jury instruction.

                                           8
       C.   The district court did not err by failing to define proceeds as
            receipts.

      Defendants argue for the first time on appeal that the district court erred by

not defining proceeds as receipts with regard to their conspiracy to commit money

laundering convictions. Accordingly, we review this issue for plain error. United

States v. Demarest, 570 F.3d 1232, 1241 (11th Cir. 2009) (citing United States v.

Olano, 507 U.S. 725, 732 (1993)).      This Court has defined plain error as “so

obvious that failure to notice it would seriously affect the fairness, integrity and

public reputation of judicial proceedings.”   United States v. Walther, 867 F.2d

1334, 1343-44 (11th Cir. 1989) (citations omitted). While Defendants argue that

the United States Supreme Court’s decision in United States v. Santos, 553 U.S.

507 (2008), requires under the money laundering statute that the term proceeds

means profits and not receipts, this Court has long held otherwise. Demarest, 570

F.3d at 1241-42. For the following reasons, we decline to depart from precedent.

      To begin, the Supreme Court decided significant portions of Santos by a

plurality decision requiring this Court to consider the holding “on the narrowest

grounds.” Id. at 1242 (quoting Marks v. United States, 430 U.S. 188, 193 (1976));

Santos, 553 U.S. 507. As a result, this Court has limited application of Santos

solely to the “gross receipts of an illegal gambling operation.” Demarest, 570 F.3d

at 1242.    The district court, therefore, did not commit plain error, in failing to

                                         9
define proceeds as receipts, and we AFFIRM the decision of the district court on

this issue.

       D.     The district court did not commit an abuse of discretion by
              refusing to issue a continuance for Roemmele.

       We review denials of a continuance under an abuse of discretion standard

“which resulted in specific substantial prejudice.” United States v. Verderame, 51

F.3d 249, 251 (11th Cir. 1995) (citing United States v. Bergouignan, 764 F.2d

1503, 1508 (11th Cir. 1985)). Roemmele, therefore, must “identify relevant, non-

cumulative evidence that would have been presented if [his] request for a

continuance had been granted.” United States v. Valladares, 544 F.3d 1257, 1262

(11th Cir. 2008) (quoting United States v. Saget, 991 F.2d 702, 708 (11th Cir.

1993)). Having considered the oral arguments of counsel, the briefs of the parties,

and the record, we find Defendant has not identified evidence that resulted in

specific substantial prejudice and find no violation of Roemmele’s constitutional

rights for failure to grant a continuance. We, therefore, AFFIRM the decision of

the district court with respect to the denial of a continuance.

       E.     The Court declines to vacate Roemmele’s sentence on the district
              court’s refusal to grant assistance to court-appoitned counsel.

       We will not hear an ineffective assistance of counsel claim on direct appeal,

“except in the rare instance when the record is sufficiently developed.” United

                                           10
States v. Verbitskaya, 406 F.3d 1324, 1337 (11th Cir. 2005) (citing United States v.

Tyndale, 209 F.3d 1292, 1294 (11th Cir. 2000)). The record typically will not be

sufficiently developed to deal with an ineffective assistance claim since the

criminal trial record focuses solely on the guilt or innocence of the defendant, not

the reasonableness of counsel’s actions. Massaro v. United States, 538 U.S. 500,

505-06 (2003). Upon review of the parties’ briefs, oral arguments of counsel, and

the record, the Court does not find the record sufficiently developed to make this

determination on direct appeal.     While Roemmele points to many issues in his

brief, including the failure to file pretrial motions, failure to review discovery

documents, and other alleged incompetence, the record does not show the extent of

these errors or their effect on the trial itself.   As a result, we find the record

insufficient to review the claim of ineffective assistance of counsel at this time.

      F.     The district court did not violate Roemmele’s Due Process rights
             with its evidentiary rulings.

      We review the district court’s evidentiary rulings for “a clear abuse of

discretion.” United States v. US Infrastructure, Inc., 576 F.3d 1195, 1208 (11th

Cir. 2009) (quoting United States v. McLean, 138 F.3d 1398, 1403 (11th Cir.

1998)). Upon review of the briefs of the parties, the oral argument of counsel, and

the record, we do not find a clear abuse of discretion. Roemmele makes a number

of claims regarding excluded evidence and other evidentiary rulings but fails to

                                           11
provide any legal argument or citations to show “a clear abuse of discretion” as

required. As a result, we AFFIRM the district court’s actions as to the evidentiary

rulings.

      G.    Enhancement of Roemmele’s Sentencing Guidelines Level was
            appropriate for obstruction of justice.

      The Court reviews the interpretation and application of the Sentencing

Guidelines de novo and the underlying factual findings for clear error. United

States v. Foley, 508 F.3d 627, 632 (11th Cir. 2007) (citing United States v. McVay,

447 F.3d 1348, 1352-53 (11th Cir. 2006)). The Sentencing Guidelines specifically

provide a two level increase in the offense level for a defendant that wilfully

obstructs an investigation or prosecution by, among other things, “producing or

attempting to produce a false, altered, or counterfeit document or record during an

official investigation or judicial proceeding.” U.S. Sentencing Guidelines Manual

§ 3C1.1, cmt. n.4 (2009).

      Having reviewed the briefs of the parties, heard oral arguments of counsel,

and reviewed the record, we conclude that the underlying factual findings are not

clearly erroneous and that the evidence supports the district court’s obstruction of

justice enhancement to appellant Roemmele.        Roemmele’s presentence report

pointed out his participation in creating false documents to mislead the grand jury

as well as other actions meant to conceal fraudulent activities.    Roemmele has

                                        12
given this Court no indication of clear error, and the district court’s application of

those facts to the guidelines is correct.      The Court, therefore, AFFIRMS the

application of these notations in the district court’s two level enhancement for

obstruction of justice under Sentencing Guidelines § 3C1.1.

      H.      The district court erred by not making an independent factual
              determination when sentencing appellants.

      As stated above, the Court will review the interpretation and application of

the Sentencing Guidelines de novo.       Foley, 508 F.3d at 632 (11th Cir. 2007)

(citation omitted).   While the United States Supreme Court in United States v.

Booker made sentencing guidelines advisory, the Supreme Court still required

district courts to refer to them and take them into consideration during sentencing.

543 U.S. 220, 264 (2005). This Court has subsequently held “[t]his consultation

requirement, at a minimum, obliges the district court to calculate correctly the

sentencing range prescribed by the Guidelines.” United States v. Crawford, 407

F.3d 1174, 1178 (11th Cir. 2005). These guidelines include a table that enhances

the level appropriate for the crime based on losses that exceed $5000. U.S.

Sentencing Guidelines § 2B1.1 (2009).

      The Court has noted the similarities between forfeiture and loss but has held

district courts must calculate each one distinctly as part of its calculations used for

sentencing.   United States v. Hamaker, 455 F.3d 1316, 1337 (11th Cir. 2006)

                                          13
(noting that forfeiture deals with punishment of the defendant while loss focuses

on the harm suffered by the victim).      In adopting the forfeiture amount as the

amount of loss, the district court “failed to take into account all relevant conduct or

explain why certain conduct was not relevant, failed to understand the difference

between forfeiture and loss, and abdicated its responsibility to make independent

findings under the Guidelines.” United States v. Foley, 508 F.3d 627, 633 (11th

Cir. 2007). While the appellants argue the decision in Foley applies solely to fraud

cases, this Court notes neither the Guidelines nor previous precedent relied on in

our decision in Foley make that distinction. See U.S. Sentencing Guidelines §

2B1.1 (2009); Foley, 508 F.3d at 633; Hamaker, 455 F.3d at 1336-39. Though this

Court must disregard harmless errors in calculating the appropriate level using the

Sentencing Guidelines, the district court’s adoption of the amount of the forfeiture

as the loss under § 3C1.1 hardly qualifies as harmless.          This becomes more

apparent when considering Hein, who the jury stated was responsible for $0 in

forfeiture but could be considered to have caused more substantial losses. We,

therefore, VACATE the judgment of the district court as to Defendants’ sentences

and REMAND this case to the district court for sentencing applying 1) an

independent calculation of loss and 2) consideration of all relevant conduct for the

purposes of the Sentencing Guidelines.

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III.   CONCLUSION

       Accordingly, for the above-stated reasons, we AFFIRM the convictions of

Defendants, but we VACATE the judgment of the district court as to Defendants’

sentences and REMAND this matter to the district court for further sentencing

proceedings.

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