Court Opinion

ID: 809814
Source: CourtListenerOpinion
Date Created: 2012-10-10 14:31:02+00
Date Added: 2024-06-11T18:00:35.824780
License: Public Domain

11-3474-cr
     United States v. Roy Ageloff
 1
 2                        UNITED STATES COURT OF APPEALS
 3
 4                              FOR THE SECOND CIRCUIT
 5
 6
 7
 8                                    August Term, 2012
 9
10   (Argued: September 14, 2012                  Decided: October 10, 2012)
11
12                                  Docket No. 11-3474-cr
13
14
15
16                          UNITED STATES OF AMERICA,
17
18                                                               Appellee,
19
20                                         -v.-
21
22     ROBERT CATOGGIO, DONALD MESSINGER, BARRY MIELE, ALAN KOOP,
23        MARCELO QUINTERO, MICHAEL TROCCHIO, DOMINICK FRONCILLO,
24    STEPHEN AGNESE, ARTHUR ALONZO, JOHN ASARO, RANDY ASHENFARB,
25      ROCCO BASILE, WILLIAM JOSEPH BATTISTA, MICHAEL A. BENGEN,
26         JOHN BESARANY, NICHOLAS BOSCO, FABIO BORGOGNONE, NEIL
27          BRAUNER, NICHOLAS BRIGANTI, RONALD CATAGGIO, ANTHONY
28         CAVICCHIO, JOHN CLAUDINO, DAMON GERARD COHEN, WILLIAM
29         COSIDENTE, RONALD CROPPER, JR., JOSEPH DIBELLA, DAVID
30         DUNHAM, JONATHAN DURINDA, RUI REIS FIGUEIREDO, ROBERT
31        FIGUEROA, VITO GILI, VALERY GOLDBERG, GREGORY GROELLER,
32        THOMAS GUCCIARDO, JOHN LEMBO, III, RICO LOCASCIO, BRENT
33   CALDERONE LONGO, MARK MANCINO, PAUL MEDAGLIA, CHRISTOPHER L.
34      MIANO, VINCENT MINERVA, CHRISTOPHER MORMANDO, JAIME SCOTT
35    MORRILL, JOEL NAZARENO, VITO PADULO, MICHAEL PERRINE, SCOTT
36           PICCININNI, AKA SCOTT PALMER, AKA SCOOTER, FRANK J.
37       PIZZOLATO, AKA FRANKIE THE FISH, THOMAS PLAMENCO, JOSEPH
38    ROSETTI, KEITH RUFFLER, KIRK RUFFLER, MICHAEL SCARAMELLINO,
39   JOSEPH SCARFONE, JR., RICHARD SCARSELLA, PAUL TAHAN, JEFFREY
40                       VAN BLARCOM, VICTOR VERNACI,
41
42                                                              Defendants,
43
44
 1                               ROY AGELOFF,
 2
 3                                               Defendant - Appellant.
 4
 5
 6
 7
 8   Before:
 9                   POOLER, WESLEY, LOHIER, Circuit Judges.
10
11
12
13        Appeal from the August 19, 2011 Memorandum and Order of
14   Restitution from the United States District Court for the
15   Eastern District of New York (Dearie, J.) resentencing
16   Defendant-Appellant Roy Ageloff to pay $190 million in
17   restitution to the victims of a massive fraud scheme
18   perpetrated by Ageloff and his co-conspirators. Ageloff
19   challenges this order on four grounds: (1) the district
20   court erred by not holding an evidentiary hearing prior to
21   resentencing; (2) the eight-year delay in resentencing
22   violated Ageloff’s constitutional and statutory rights; (3)
23   the district court should have released some or all of the
24   $536,000 of Ageloff’s money held by the court from the time
25   of his initial sentencing; and (4) Ageloff was entitled to
26   CJA funding for expert services. Should we remand, Ageloff
27   requests that the case be reassigned and CJA counsel
28   relieved. We affirm and hold that the district court
29   properly exercised its authority under the All Writs Act to
30   restrain Ageloff’s funds in anticipation of resentencing.
31
32
33       AFFIRMED.
34
35
36
37
38
39             SCOTT L. FENSTERMAKER, Law Office of Scott L.
40                  Fenstermaker, P.C., New York, NY, for
41                  Defendant-Appellant.
42
43             DANIEL A. SPECTOR, Assistant United States
44                  Attorney (David C. James, Assistant United
45                  States Attorney, on the brief), for Loretta E.

                                       2
 1                    Lynch, United States Attorney for the Eastern
 2                    District of New York, New York, NY, for
 3                    Appellee.
 4
 5
 6
 7
 8
 9   PER CURIAM:

10        Defendant-Appellant Roy Ageloff appeals from the August

11   19, 2011 Memorandum and Order of Restitution by the United

12   States District Court for the Eastern District of New York

13   (Dearie, J.) resentencing Ageloff to pay $190,339,436.65 in

14   restitution to the victims of a massive fraud scheme he and

15   his co-conspirators designed and executed.      Ageloff

16   contends, inter alia, that the district court should have

17   released some or all of the $536,000 of Ageloff’s money held

18   by the court pending his resentencing.      Whether a district

19   court may exercise its authority under the All Writs Act to

20   restrain a convicted defendant’s funds in anticipation of

21   sentencing is a question of first impression in this

22   Circuit.      We answer it in the affirmative and affirm the

23   district court’s restitution order.

24

25                               Background

26        Ageloff and his partner, Robert Catoggio, were the

27   leaders of a massive “pump-and-dump” securities fraud

                                      3
 1   scheme.   From 1991 to 1998, Ageloff and Catoggio owned and

 2   controlled four brokerage firms through which they defrauded

 3   the firms’ customers in connection with the purchase and

 4   sale of different “House Stocks.”   Ageloff and Catoggio

 5   acquired these securities cheaply and then sold their shares

 6   at a substantial profit after creating artificial market

 7   demand by offering incentives to brokers to aggressively

 8   market the House Stocks.   After this scheme unraveled,

 9   Ageloff pled guilty to one count of racketeering and

10   stipulated to a sentence enhancement of eighteen levels for

11   fraud that amounted to losses exceeding $80 million.1

12       The district court sentenced Ageloff to 96 months’

13   imprisonment, three years’ supervised release and $80

14   million in restitution pursuant to the Mandatory Victims

15   Restitution Act (“MVRA”), 18 U.S.C. § 3663A.   At the time of

16   his initial sentencing, Ageloff deposited approximately

17   $536,000 with the clerk of the court for the purpose of

18   paying restitution.   Ageloff subsequently appealed the

         1
          At the time Ageloff pled guilty, $80 million was the
     highest possible loss bracket under the 1997 Federal
     Sentencing Guidelines Manual. See U.S.S.G. §
     2F1.1(b)(1)(S); United States v. Catoggio, 326 F.3d 323, 325
     (2d Cir. 2003). The highest possible loss bracket under the
     2011 Federal Sentencing Guidelines Manual is $400 million.
     See U.S.S.G. § 2B1.1(b)(1)(P).
                                   4
 1   district court’s 2001 restitution order to this Court,

 2   arguing, among other things, that the district court could

 3   not order restitution without first identifying the victims

 4   and their losses.   See United States v. Catoggio, 326 F.3d

 5   323, 324 (2d Cir. 2003).    We agreed and remanded to the

 6   district court for the limited purpose of resentencing in

 7   accordance with the MVRA.    Id. at 330; 18 U.S.C. §

 8   3664(f)(1)(A).

 9       On remand, the government submitted a report prepared

10   by the National Association of Securities Dealers (“NASD

11   Report”) that synthesized trade-sheet data to identify and

12   tabulate the estimated $190 million in losses suffered by

13   more than 9,000 victims.    Although armed with the NASD

14   Report, eight years elapsed before the district court

15   resentenced Ageloff.   The delay is partly traceable to

16   Ageloff’s 2008 Florida prosecution for conspiracy to commit

17   money laundering in connection with the conviction at issue

18   here, as well as to a stay issued while Ageloff’s petition

19   for a writ of certiorari was pending before the Supreme

20   Court.   However, as the district court noted, the eight-year

21   delay on remand is not solely attributable to Ageloff.      Over

22   the years, there were several changes of counsel on both

23   sides.   And, indeed, the district court recognized that

                                    5
 1   responsibility “ultimately lies, as it must, with the

 2   Court.”     See United States v. Ageloff, 809 F. Supp. 2d 89,

 3   107 n.17 (E.D.N.Y. 2011).

 4       In 2011, after reviewing Ageloff’s objections to the

 5   NASD Report, the district court incorporated the loss

 6   information into its restitution order and sentenced Ageloff

 7   to pay just over $190 million.       Id. at 97-98, 112.   In its

 8   order, the court also affirmed its prior rejection of

 9   Ageloff’s request to access some of his money held by the

10   court.     Id. at 106.   On appeal, Ageloff argues that the

11   district court improperly refused to release any of his

12   funds and consequently denied him the right to secure

13   counsel of his choice.

14

15                               Discussion2

16       The All Writs Act enables federal courts to “issue all

17   writs necessary or appropriate in aid of their respective

18   jurisdictions and agreeable to the usages and principles of

19   law.”     28 U.S.C. § 1651(a).   The broad power conferred by

         2
           Whether 28 U.S.C. § 1651 authorizes post-conviction,
     pre-sentencing restraint of a defendant’s property is a
     legal issue. We therefore engage in de novo review. See,
     e.g., United States v. Razmilovic, 419 F.3d 134, 136 (2d
     Cir. 2005).
                                      6
 1   the All Writs Act is aimed at achieving “‘the rational ends

 2   of law.’”   United States v. N.Y. Tel. Co., 434 U.S. 159, 172

 3   (1977) (quoting Harris v. Nelson, 394 U.S. 286, 299 (1969)).

 4   Thus, courts have significant flexibility in exercising

 5   their authority under the Act.    See id. at 173.

 6       Although this Court has never addressed whether the All

 7   Writs Act enables a court to restrain a convicted

 8   defendant’s property in anticipation of ordering

 9   restitution, courts in this Circuit and beyond have

10   uniformly answered this question in the affirmative.     See

11   United States v. Hatfield, No. 06-CR-0550, 2010 WL 4235815,

12   at *1 (E.D.N.Y. Sept. 27, 2010); United States v. Numisgroup

13   Int’l Corp., 169 F. Supp. 2d 133, 138-39 (E.D.N.Y. 2001);

14   United States v. Ross, No. 92-CR-1001, 1993 WL 427415, at *1

15   (S.D.N.Y. Oct. 15, 1993); see also United States v.

16   Sullivan, No. 5:09-CR-302-FL-1, 2010 WL 5437243, at *5-*7

17   (E.D.N.C. Nov. 17, 2010); United States v. Simmons, No. 07-

18   CR-30, 2008 WL 336824, at *1 (E.D. Wis. Feb. 5, 2008);

19   United States v. Runnells, 335 F. Supp. 2d 724, 725-26 (E.D.

20   Va. 2004); United States v. Abdelhadi, 327 F. Supp. 2d 587,

21   598-601 (E.D. Va. 2004).

22

                                   7
 1        In reaching this conclusion, courts explain that a

 2   sentencing court may use the All Writs Act to prevent the

 3   defendant from frustrating collection of the restitution

 4   debt.   For instance, in Ross, a district court for the

 5   Southern District of New York issued an order restraining

 6   the convicted defendant’s assets pending sentencing pursuant

 7   to the All Writs Act.   1993 WL 427415, at *1.   The

 8   restraining order furthered the court’s exercise of its

 9   jurisdiction over sentencing by ensuring that the defendant

10   would have some assets available to satisfy the pending

11   restitution order.    See id. at *1.   Even though the exact

12   amount of restitution to be ordered was unclear, the

13   district court determined that there was “a real question as

14   to whether or not [the defendant] currently has sufficient

15   liquid assets to satisfy any judgment of restitution ordered

16   by the Court,” and it therefore “seem[ed] totally

17   appropriate to restrain [the defendant] from dissipating his

18   assets prior” to sentencing.    Id. (emphasis added).

19       Relying on Ross, the Eastern District of New York used

20   the All Writs Act to restrain the defendants’ 26,600 coins

21   (valued somewhere between $430,000 and $860,000) in

22   anticipation of sentencing.    Numisgroup Int’l Corp., 169 F.

23   Supp. 2d at 136-38.   The court reasoned that “‘[t]here is no

                                    8
 1   logic to the position that the Court is powerless to enter a

 2   restraining order after a jury has found a defendant guilty

 3   of participating in a large-scale fraud simply because

 4   sentencing has been delayed.’”     Id. at 138 (quoting Ross,

 5   1993 WL 427415, at *1).   In explaining its order, the court

 6   also expressed concern over one defendant’s lack of assets

 7   available to satisfy the court’s future order of

 8   restitution. See id. at 138.

 9        Similarly, in Sullivan, the Eastern District of North

10   Carolina determined that a restraining order was warranted

11   pursuant to the All Writs Act because the defendant, who had

12   previously pled guilty to eleven counts of manufacturing

13   child pornography and one count of possession of child

14   pornography, was attempting to dispose of his assets prior

15   to sentencing and a probable order of restitution.     2010 WL

16   5437243, at *1, *7.   The court explained that it would be

17   “‘without any meaningful ability to impose a proper

18   sentence’” if it could not issue an order stopping a

19   convicted defendant awaiting sentencing from disposing of

20   assets in an effort to avoid paying restitution or other

21   fines and court costs.    Id. at *6 (quoting United States v.

22   Gates, 777 F. Supp. 1294, 1296 n.7 (E.D. Va. 1991)).

23

                                    9
 1       The Eighth Circuit recently issued a set of decisions

 2   that strongly suggest it takes a similar position regarding

 3   a sentencing court’s ability to restrain a defendant’s funds

 4   pursuant to the All Writs Act.     See United States v.

 5   Yielding, 657 F.3d 688 (8th Cir. 2011) (“Yielding I”); see

 6   also United States v. Yielding, 657 F.3d 722 (8th Cir. 2011)

 7   (“Yielding II”).   In Yielding I, the Eighth Circuit vacated

 8   and remanded the district court’s approximately $1 million

 9   restitution order after finding that the court below erred

10   in presuming that restitution was mandatory.     See 657 F.3d

11   at 718-19.   In Yielding II, decided on the same day, the

12   court affirmed the district court's issuance of a TRO to

13   prevent the defendant from spending or transferring any of

14   the $160,000 he was likely to receive as a settlement in an

15   unrelated civil case.   657 F.3d at 727-28.    The Eighth

16   Circuit confirmed the district court's authority to issue

17   the TRO pursuant to the All Writs Act because the

18   restraining order was appropriate in aid of the court's

19   exercise of jurisdiction to ensure that the defendant's

20   assets were available for paying restitution.     See id. at

21   726-28.   "We agree that a sentencing court has jurisdiction

22   to enforce its restitution order and may use the All Writs

23   Act, when necessary and appropriate, to prevent the

                                   10
 1   restitution debtor from frustrating collection of the

 2   restitution debt."    Id. at 727.    Because the Eighth Circuit

 3   vacated the restitution order itself on the same day it

 4   affirmed the TRO, the court effectively held that the All

 5   Writs Act gave the district court the power to issue a

 6   restraining order for the purpose of ensuring that

 7   sufficient funds would be available to satisfy any future

 8   order of restitution.

 9       Aided by the relevant case law, we conclude that the

10   district court properly exercised its authority under the

11   All Writs Act to restrain Ageloff’s assets in anticipation

12   of resentencing.3    Ageloff pled guilty to committing a crime

13   for which restitution is mandatory under the MVRA.       See 18

14   U.S.C. § 3663A(c)(1)(A)(ii).    Given that Ageloff agreed to a

15   sentencing enhancement for fraud causing losses of $80

16   million or more, the eventual restitution order was certain

17   to exceed $536,000.     See Catoggio, 326 F.3d at 329.

18   Although we believe that this circumstance alone would be

19   sufficient to justify the district court’s exercise of its

          3
           That the district court did not cite to the All Writs
     Act in reaching its decision is of no consequence; we are
     free to affirm on any legal basis for which there is
     sufficient support in the record. See, e.g., Alfaro Motors,
     Inc. v. Ward, 814 F.2d 883, 887 (2d Cir. 1987).
                                     11
 1   power under the All Writs Act, other facts highlight the

 2   need to ensure compliance with the district court’s

 3   anticipated order of restitution: specifically, Ageloff’s

 4   2008 conviction for conspiring to launder millions of

 5   dollars in proceeds from this fraud scheme.

 6       Moreover, Ageloff’s argument that the district court’s

 7   refusal to release any of his money denied him the right to

 8   counsel of his choice in violation of the Sixth Amendment is

 9   without merit.   In United States v. Monsanto, the Supreme

10   Court held that a pretrial restraining order freezing the

11   defendant’s assets did “not ‘arbitrarily’ interfere with a

12   defendant’s ‘fair opportunity’ to retain counsel.”    491 U.S.

13   600, 616 (1989) (quoting Powell v. Alabama, 287 U.S. 45, 69,

14   53 (1932)).   This reasoning applies with “even greater

15   force” here because Ageloff had already pled guilty to both

16   the underlying fraud scheme and later to attempting to

17   launder its proceeds from his prison cell.    See Numisgroup

18   Int’l Corp., 169 F. Supp. 2d at 139.   In any event, Ageloff

19   was ably represented by CJA counsel at the time of

20   resentencing and for purposes of this appeal.

21        Ageloff’s remaining arguments on appeal are without

22   merit.   For example, contrary to Ageloff’s assertions, the

23   district court was not required to hold an evidentiary

                                   12
 1    hearing prior to resentencing provided that Ageloff was

 2    afforded sufficient opportunity to be heard.   See United

 3    States v. Slevin, 106 F.3d 1086, 1091 (2d Cir. 1996).     He

 4    was.   Finally, Ageloff cannot make out any constitutional or

 5    statutory claim based on the eight-year delay in

 6    resentencing because he did not suffer prejudice.   Cf.

 7    United States v. Ray, 578 F.3d 184, 202 (2d Cir. 2009).

 8

 9                               Conclusion

10       For the foregoing reasons, the order of the district

11   court is hereby AFFIRMED.

                                    13