Court Opinion

ID: 2963287
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:08:09.645581+00
Date Added: 2024-06-11T11:42:40.606612
License: Public Domain

USCA1 Opinion

	

          March 28, 1995                                [NOT FOR PUBLICATION]                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 94-1725                               UNITED STATES OF AMERICA,                                 Plaintiff, Appellee,                                          v.                                  STANLEY LABOVITZ,                                Defendant, Appellant.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Nathaniel M. Gorton, U.S. District Judge]
                                              ___________________                                 ____________________                                        Before                                Torruella, Chief Judge,
                                           ___________                          Boudin and Stahl, Circuit Judges.
                                            ______________                                 ____________________            Stanley Labovitz on brief pro se.
            ________________            Donald  K. Stern, United  States Attorney, and Mark J. Balthazard,
            ________________                               __________________        Assistant United States Attorney, on brief for appellee.                                 ____________________                                 ____________________

                 Per Curiam.   On  December  6, 1993,  appellant  Stanley
                 __________            Labovitz  pleaded guilty  to  thirteen  counts of  bankruptcy            fraud.    Approximately  eleven  weeks  later,  still  before            sentencing, appellant moved to withdraw his plea pursuant  to            Fed.  R.  Crim. P.  32(d).   The  district court  denied this            motion  and  subsequently  imposed  sentence.    This  appeal            followed.  For the following reasons, we affirm.                                      BACKGROUND                 During the 1980's, appellant  was an attorney practicing            bankruptcy and debt-collection law.   Appellant also invested            in  real  estate, and  he  owned or  controlled  various real            estate   entities   including  Hartwell   Realty  Corporation            ("Hartwell"), 316 Main Street, Inc. ("316 Main"), and S.S.L.,            Inc. ("S.S.L.").   On April  27, 1993, a  federal grand  jury            returned  an indictment charging  appellant with twenty-three            counts  of bankruptcy  fraud.   See  18  U.S.C.    152.    In
                                            ___            particular, the indictment charged appellant with engaging in            a scheme  to  defraud  by  filing  bankruptcy  petitions  for            Hartwell,  316  Main,  S.S.L.,  and  himself  personally, and            thereafter   transferring   and  concealing   assets.     The            indictment also charged him  with providing materially  false            information in connection with these petitions.                   On  December  3, 1993,  appellant  entered  into a  plea            agreement with the government under  which he agreed to plead            guilty  to counts 1, 3, 7-8, 10, and 16-23 of the indictment.            The change of plea hearing was held on December 6,  1993.  At            the hearing,  the  prosecutor  summarized  the  evidence  the            government would have presented at trial.  The district court

            accepted  the change of plea  and set a  date for sentencing.            On  February 24, 1994,  appellant filed a  motion to withdraw            his guilty plea.  In his motion, he primarily argued that the            district  court's plea  colloquy  failed to  comply with  the            requirements of Fed.  R. Crim. P. 11.  Following a hearing on            March 25, 1994, the district court orally denied  this motion            on  the grounds that  there is no  "fair and just  reason" to            allow the withdrawal.                   A  sentencing hearing was  conducted, and sentence was            imposed, on June 16, 1994.  In the course of the hearing, the            district court made specific findings that the amount of loss            was $137,217.00 on Count 1; $34,356.67 on Count 7; $26,758.26            on Count 20, $5,206.89  on Count 21; and $25,000.00  on Count            22.   As  a result,  the district  court, acting  pursuant to            U.S.S.G.   2F1.1, adjusted  appellant's base offense level of            6 upward by 8 levels to reflect a loss of between $200,000.00            and  $350,000.00.1    The   court  imposed  a  fifteen  month            sentence of  imprisonment, the  bottom end of  the applicable            guideline range, followed by  a period of supervised release.            The court also ordered restitution of $231,573.67.                                          DISCUSSION                                
            ____________________            1.  The  court then made a two level increase to reflect more            than minimal planning and a two level downward adjustment for            acceptance of responsibility, to  reach a total offense level            of 14.  Based on appellant's criminal history category I, his            sentencing range was fifteen to twenty-one months.                                         -3-
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            A.   THE DENIAL OF  APPELLANT'S MOTION  TO WITHDRAW  HIS                 GUILTY PLEA.                 A district  court "may  permit" a defendant  to withdraw            his guilty plea prior  to sentencing for any "fair  and just"            reason.   United States v. Daniels, 821 F.2d 76, 78 (1st Cir.
                      _____________    _______            1987); Fed. R. Crim.  P. 32(d).  We have  recently reiterated            that:                 There   are   several   factors  to   consider   in                 determining  whether  a  defendant  has   met  this                 burden, the  most significant  of which is  whether                 the  plea was  knowing,  voluntary and  intelligent                 within the meaning  of Rule 11.   The other factors                 include:   1)  the  force and  plausibility of  the                 proffered reason; 2) the  timing of the request; 3)                 whether  the  defendant  has  asserted   his  legal                 innocence; and 4) whether the parties had reached a                 plea agreement.              United  States v. Cotal-Crespo, 1995 WL 27378 at *1 (1st Cir.
            ______________    ____________            Jan.  30, 1995)  (citations omitted).   We  will reverse  the            district court only for  an error of law or  for demonstrable            abuse of  discretion.   Id.  at *3.   We  do  not think  that
                                    ___            reversal is warranted here.2                 Appellant  argues  that  the  district  court  erred  in            requiring him to  provide a  "strong" rather  than "fair  and            just" reason for withdrawal, and that it unfairly held him to            this  higher standard because he was an attorney.  We find no            error.   Appellant had  argued  below, inter  alia, that  the
                                                   _____  ____                                
            ____________________            2.  Arguably, an outright violation  of Rule 11 might require            the court to allow the withdrawal of a guilty plea unless the            violation was found  to be  harmless.  See  United States  v.
                                                   ___  _____________            Raineri, 42 F.3d 36,  41 (1st Cir. 1994).   Here, however, we
            _______            find no violation of Rule 11 at all.                                         -4-
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            district  court  failed  to  adequately inform  him  of,  and            determine that he understood, the nature of the charges.  See
                                                                      ___            Fed. R. Crim.  P. 11(c).  The district court  was entitled to            consider   appellant's   background  and   sophistication  in            determining  whether  these core  concerns  of  Rule 11  were            satisfied.   See United States v. Allard, 926 F.2d 1237, 1245
                         ___ _____________    ______            (1st Cir. 1991) ("The manner in which the charge is explained            and the method for determining  the defendant's understanding            necessarily  vary  from  case  to  case  depending  upon  the            capacity of the defendant and the attendant circumstances.").            The  court's ruling on the motion to withdraw leaves no doubt            that  it  evaluated  the   motion  under  the  correct  legal            standard, and that it  denied the motion because it  found no            "fair and just" reason for withdrawal.                 Appellant also  argues that he should  have been allowed            to withdraw  his guilty  plea because there  was insufficient            factual  basis  for it.   See  Fed. R.  Crim.  P. 11(f).   In
                                      ___            support of this argument,  he draws our attention to  various            statements  he made at the change of plea hearing which could            be  construed as denials  by him  that he  had the  intent to            defraud.   See United States v. Grant, 971 F.2d 799, 802 (1st
                       ___ _____________    _____            Cir.  1992) (discussing  elements of  bankruptcy fraud).   In            addition,  appellant cites to  various documents, appended to            his brief,  which he  suggests demonstrates his  innocence of            the crimes charged in counts 1 and 20.                                         -5-
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                 It is well-settled  that the  prosecutor's statement  of            facts  on the record can satisfy the requirement of a factual            basis for  the plea.   See, e.g.,  United States v.  Ray, 828
                                   ___  ____   _____________     ___            F.2d  399, 405-06 (7th Cir. 1987), cert. denied, 485 U.S. 964
                                               ____________            (1988).  This statement of  facts need not be uncontroverted.            A  court may accept a  plea even when  the defendant protests            his innocence if there is a strong evidence in the record  of            the defendant's actual guilt.  North Carolina  v. Alford, 400
                                           ______________     ______            U.S. 25, 37 (1970); United States v. Walsh, 7 F.3d 1064, 1066
                                _____________    _____            (1st  Cir.  1993).     Similarly,  when  the  district  court            establishes  a sufficient factual  basis for the  plea at the            Rule  11 hearing,  the  guilty plea  may  stand even  if  the            defendant  later claims  innocence and  challenges the  plea.            See United States v. Keiswetter, 860 F.2d 992, 998 (10th Cir.
            ___ _____________    __________            1988)  (Moore, J.,  dissenting); United  States v.  Owen, 858
                                             ______________     ____            F.2d 1514, 1516-17 & n.2 (11th Cir. 1988).                  In the  instant case, the  prosecutor's proffer provided            ample factual basis for  accepting the guilty plea.   In this            proffer,  the   prosecutor  detailed  a  lengthy  pattern  of            omissions,   material   misstatements,   and   transfers   of            bankruptcy  estate property  by appellant.   Given  the sheer            number of  "mistakes," the size of the  assets concealed, and            appellant's  many years  of experience  practicing bankruptcy            law,  we  think the  judge was  entitled  to conclude  that a                                         -6-
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            substantial  basis existed  for  believing  that  appellant's            actions were knowing and fraudulent.3                 The  documents that  appellant  cites do  not alter  our            conclusion.     Count  1,  which  relates   to  the  Hartwell            bankruptcy,  charged  appellant  with  failing   to  disclose            approximately  $350,000.00 in  loans owing  to Hartwell  from            appellant and his business  partner.  Appellant contends that            there can be no fraudulent intent since the final decision to            treat the  $350,000.00 as  a loan  to  officers (rather  than            compensation) was  not made until November  1991, roughly ten            months  after  he  filed  Hartwell's   bankruptcy  petition.4            However, appellant  should have  disclosed the asset  even if            its status at the time  of filing was uncertain.   See United
                                                               ___ ______            States v. Cherek, 734 F.2d 1248, 1254 (7th Cir. 1984) ("It is
            ______    ______            a reasonable reading of 18 U.S.C.   152 to conclude  that the                                
            ____________________            3.  We  add that  the district  judge made  a finding  on the            record  that defendant's plea  of guilty is  "supported by an            independent  basis  in  fact"  for  each  of  the  "essential            elements" of the offense charged.   We do not think that  the            judge's   question  about  the  requisite  mental  state  for            bankruptcy fraud,  asked at  a later proceeding,  warrants an            inference that he was confused about this element and did not            fulfill his duty under Rule 11(f).            4.  In support  of this claim, appellant  draws our attention            to two affidavits of Curtis Feldman, accountant for Hartwell.            Although these affidavits are outside the record, we consider            the information  they contain because it was proffered to the            district court  at sentencing.   We  note, however,  that the            remaining documents appellant cites in connection  with count            1--Hartwell's   bankruptcy  petition   and  amendment--cannot            inform our decision because  they are not part of  the record            on direct appeal.  See Fed. R. App. P. 10(a).
                               ___                                         -7-
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            statute  requires a  bankrupt  to disclose  the existence  of            assets whose immediate status is uncertain."),  cert. denied,
                                                            ____________            471 U.S. 1014  (1985).  Moreover, appellant  did not disclose            the  asset  even  after  November 1991,  and  the  indictment            charged him  with a "continuing failure"  to disclose through            October 1992.   Under  the circumstances, the  district court            could reasonably conclude that he was guilty.                 Count   20,  which   relates  to   appellant's  personal            bankruptcy,   charged   him    with   failing   to   disclose            approximately  $25,000 worth  of  Keystone Fund  money market            shares  which  he owned.    Appellant  contends that  various            documents,  submitted to  the district  court  at sentencing,            prove  his  lack  of  fraudulent  intent.    These  documents            indicate  that in  February  1986,  appellant requested  that            these shares  be  transferred  to  his wife.    However,  the            government proffered evidence that appellant received monthly            statement and interest payments  from Keystone, mailed to his            law  office,  both before  and  after  filing his  bankruptcy            petition in May 1992.   Under the circumstances, there  was a            strong basis for concluding  that appellant knew the transfer            had not occurred and intended to conceal the asset.  The fact            that appellant  reported the asset to  the bankruptcy trustee            in February  1993, two months  prior to his  indictment, does            not  alter our conclusion.   There is evidence  in the record            which  suggests  that  he knew  by  then  that  he was  under                                         -8-
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            criminal  investigation in connection with several bankruptcy            filings.                 Finally,  having  determined that  appellant's principal            points are without merit, we consider the traditional factors            relevant  to the  review of  a change  of plea request.   The            record reveals that appellant understood the substance of the            charges  against him, and suggests  that he made a calculated            decision that it was  in his interest to  plead guilty.   The            plea  was  part  of  a  quid  pro  quo  negotiated  with  the
                                    ____  ___  ___            government.  See United  States v. Pellerito, 878  F.2d 1535,
                         ___ ______________    _________            1541  (1st  Cir.  1989).   A  defendant  is  not entitled  to            withdraw  his  guilty  plea   simply  because  he  asserts  a            subjective  belief in  his innocence.   See United  States v.
                                                    ___ ______________            Ramos, 810 F.2d 308, 312 (1st Cir. 1987).  Given the totality
            _____            of the circumstances, we cannot say the district court abused            its  discretion  in finding  no  "fair and  just  reason" for            retraction.             B.  INEFFECTIVE ASSISTANCE OF COUNSEL.                 Ordinarily, we  do not address ineffective assistance of            counsel  arguments  on  direct  appeal.    This  case  is  no            exception.     Appellant  argues   that  trial   counsel  was            ineffective because he pressured him into pleading guilty and            misinformed him that it was too late to change his mind after            signing  the  plea  agreement.   These  charges  depend  upon            evidentiary matters which are best considered by the district                                         -9-
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            court in  the first instance.   See United States  v. Mala, 7
                                            ___ _____________     ____            F.3d  1058,  1063  (1st   Cir.  1993)  (holding  that  absent            extraordinary circumstances, fact  specific claims  asserting            ineffective assistance  of  counsel  are  not  cognizable  on            direct  appeal),  cert.  denied,  114  S.  Ct.  1839  (1994).
                              _____________            Accordingly,  appellant's claim  of inadequate  assistance is            not properly before us.            C.   SENTENCING.                 1.  The District Court's Loss Calculation.                 Appellant  argues  that  the  district  court  erred  in            determining  the amount  of loss.   He  does not  contest the            district court's loss determination  of $34,456.67 for  count            7.   However, he  contends  that there  was  no loss  at  all            involved in counts  1, 20, 21, and 22.   Based on appellant's            own calculation, the district  court should have adjusted the            base offense level  upward by 4 levels  to reflect a  loss of            between $20,000.00  and $40,000.00,  rather than 8  levels to            reflect a  loss of between  $200,000.00 and $350,000.00.   We            find no basis for a remand.                 The  district court's loss  determination of $137,217.00            for  count  1  was  based   on  appellant's  portion  of  the            $350,000.00  loan,  owing to  Hartwell,  which  he failed  to            disclose in Hartwell's bankruptcy documents.   Appellant does            not dispute that he  owed this amount to Hartwell.   Instead,            he contends that there was no  intended loss since it was not                                         -10-
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            finally determined that the $137,217.00 was a loan and, thus,            a  corporate   asset,  until  some  months   after  he  filed            Hartwell's bankruptcy petition.  He further argues that there            was no actual loss to creditors because Hartwell's assets, at            least at the time of filing, exceeded its debts.                 We  think the  district court  could properly  determine            that   there  was  both  an   intended  and  actual  loss  of            $137,217.00.    The  court  could find  an  intended  loss of            $137,217.00 because appellant continued to conceal this asset            even  after,  by  his  own admission,  the  final  accounting            determination  was made.  The court could find an actual loss            of $137,217.00 because, independent of any loss to creditors,            that much remained owing to the debtor and bankruptcy  estate            at the time  of sentencing.  See United States  v. Edgar, 971
                                         ___ _____________     _____            F.2d  89, 95 (8th Cir. 1992)  (recognizing that in bankruptcy            fraud, the three entities that can be injured are the debtor,            the bankruptcy estate, and the creditors).5                 The district court's loss determination of $26,758.26 on            count  20 was  based  on the  value  of the  Keystone  shares            appellant  failed  to  disclose in  his  personal  bankruptcy            documents.   Appellant does  not dispute  the value  of these                                
            ____________________            5.  There might  be some complications with  the loss finding            because  of appellant's  own stake  in Hartwell,  although we            think  those complications  might be  answered in  this case.            The  issue need  not  be pursued  because appellant  does not            advance  his ownership interest  in Hartwell as  a ground for            limiting the amount of loss.                                         -11-
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            shares.   Rather, he argues  that there was no  loss since he            disclosed  the  Keystone  Fund  to the  bankruptcy  court  in            February 1993,  two months before  his indictment.   We think            the district court  could properly find  an intended loss  of            $26,758.26  for the  same reasons,  discussed above,  that it            could properly find an intent to defraud.                   Since appellant did not object at sentencing to the loss            determination  of $5,206.89 on  count 21, we  review only for            plain error.   Fed. R. Crim. P. 52(b).   Based on facts which            were uncontested below, the  court was entitled to  find that            appellant  concealed his  one hundred  per cent  ownership of            Bass  River  Management,  Inc.   when  filing  for   personal            bankruptcy, and  that he  later transferred this  amount from            Bass River for  his personal use.6   Under the circumstances,            there  was no  plain error in  determining the  loss to  be $            5,206.89.                   We need not reach appellant's argument that the district            court erred  in finding a loss  of $25,000 on count  22.  The            total amount  of loss  involved in  counts 1,  7, 20, and  22                                
            ____________________            6.  Appellant  does  attempt to  dispute  on  appeal that  he            transferred  these funds  from  Bass River.   This  challenge            comes too late.   We have repeatedly held that  "facts stated            in presentence reports  are deemed admitted  if they are  not            challenged  in  the  district   court."    United  States  v.
                                                       ______________            O'Connor, 28  F.3d 218, 222  (1st Cir. 1994)  (quoting United
            ________                                               ______            States v. Bregnard, 951 F.2d  457, 460 (1st Cir. 1991)).   We
            ______    ________            add that  the documents  appellant cites, copies  of canceled            checks written on Bass  Rivers' account, are not part  of the            record on direct appeal.                                          -12-
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            already   falls   between   $200,000.00    and   $350,000.00.            Accordingly, any error  in determining the loss for  count 22            is harmless.                 2.  Restitution.                 Appellant  argues  that  the  district  court  erred  in            failing   to  determine   that  he   could  afford   to  make            restitution.   He  points out  that he  is  currently without            employment  and has limited assets.  Since this issue was not            preserved below, we review  for plain error.  When  issuing a            restitution  order, the  district  court must  "consider" the            financial condition of  the defendant.  18 U.S.C.    3664(a).            However, there is no requirement  that the defendant be found            able to pay now.  United States v. Lombardi, 5  F.3d 568, 573
                              _____________    ________            (1st  Cir.  1993).   Appellant  is  well-educated and  worked            successfully for many years.  There is every reason to expect            that he will be gainfully employed  in the future even if  he            is unable to return  to the practice of law.   Significantly,            the district court left the payment schedule to be determined            by  probation.   We  are  satisfied that  the  district court            considered appellant's  financial situation, and that  it did            not abuse its considerable  discretion.  Accordingly, we find            no plain error in the court's restitution order.                 Affirmed.
                 ________                                         -13-
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