Court Opinion

ID: 9366541
Source: CourtListenerOpinion
Date Created: 2023-01-26 23:00:38.049363+00
Date Added: 2024-06-11T17:15:53.310152
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 22-1327

                    UNITED STATES OF AMERICA,

                            Appellee,

                               v.

                       CHRISTOPHER OCHOA,

                      Defendant, Appellant.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                    FOR THE DISTRICT OF MAINE

       [Hon. John A. Woodcock, Jr., U.S. District Judge]

                             Before

                   Kayatta, Selya, and Gelpí,
                        Circuit Judges.

     Robert C. Andrews, with whom Robert C. Andrews Esquire P.C.
was on brief, for appellant.
     Brian S. Kleinbord, Assistant United States Attorney, with
whom Darcie N. McElwee, United States Attorney, was on brief, for
appellee.

                        January 26, 2023
           SELYA, Circuit Judge.           Defendant-appellant Christopher

Ochoa,   formerly   a   practicing      attorney      and   now   a   convicted

fraudster, challenges the district court's restitution order,

which held him jointly and severally liable for all sums illicitly

obtained by the charged conspiracy.           In the defendant's view, his

restitution obligation should have been limited to the portion of

the proceeds that went into his own pocket.            Concluding, as we do,

that the restitution order falls within the encincture of the

district court's discretion, we affirm.

                                       I

           We briefly rehearse the facts and travel of the case.

Because this "appeal follows a guilty plea, 'we glean the relevant

facts from the change-of-plea colloquy, the unchallenged portions

of the presentence investigation report (PSI Report), and the

record of the disposition hearing.'"              United States v. Dávila-

González, 595 F.3d 42, 45 (1st Cir. 2010) (quoting United States

v. Vargas, 560 F.3d 45, 47 (1st Cir. 2009)).

           Beginning in March of 2017, the defendant — a lawyer

formerly licensed in the state of Florida — and his co-conspirators

orchestrated a scheme designed to defraud investors of millions of

dollars.     To     execute     the     scheme,      the    conspirators    (or

intermediaries    acting   to   their      behoof)    contacted    prospective

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victims and induced them to invest in standby letters of credit.1

The conspirators pitched the investments as a win-win opportunity.

          On the one hand, if the standby letters of credit were

issued, the investors would reap huge returns within days or weeks

(or so they were promised).2         On the other hand, if the standby

letters of credit were not issued, the investors would not lose a

dime (or so they were promised); each investor would simply receive

a full refund of his initial investment.

          Over   the   course   of    a   few   months,   the   conspirators

convinced at least five people to invest substantial sums of money

in the scheme.   The defendant played a significant role in bilking

the investors.      At the direction of two of his co-conspirators

(Russell Hearld and Herbert Caswell), he drafted agreements to

memorialize   the    investments,     delineate    the    handling   of    the

investors' funds, and limn the terms of the transactions.                 Among

other things, the agreements represented that investor funds would

be held in escrow in the client trust account of the defendant's

     1 A standby letter of credit is an agreement through which a
financial institution commits to "serve as a guarantor of a certain
amount of money in a transaction between" a debtor and a third-
party beneficiary. F.D.I.C. v. Plato, 981 F.2d 852, 854 n.3 (5th
Cir. 1993); see Mago Int'l v. LHB AG, 833 F.3d 270, 272 (2d Cir.
2016).

     2 For example, one victim who invested $50,000 was promised a
$6,200,000 return within ten weeks. Another victim was promised
that his $250,000 investment would yield a $10,000,000 return
within seven to twelve days.

                                    - 3 -
law firm unless and until the defendant received confirmation that

a standby letter of credit had been issued.

           Trusting that the drafted agreements said what they

meant and meant what they said, each of the five investors wired

funds to the defendant to be held in escrow.        The defendant,

though, did not retain the investors' money in his trust account.

Instead, he quickly withdrew some funds for his personal use and

disbursed other funds to his co-conspirators.

           A few examples help to illustrate the defendant's role.

On April 10, 2017, two investors wired a total of $1,500,000 to

the defendant's trust account.     That same day, the defendant

transferred $50,000 from the trust account to his personal account

and $50,000 to his business account.       In addition, he wired

$750,000 to Hearld and $300,000 to Caswell's company.     The next

day, the defendant transferred another $10,000 to his personal

account and transferred $200,000 to Hearld.

           Essentially the same pattern was repeated a few weeks

later after a different investor wired $1,250,000 to the trust

account.   Within hours, the defendant transferred $50,000 to his

personal account and $10,000 to his business account.     He also

wired $900,000 to Hearld and $250,000 to Caswell.

           The five victims of the fraudulent scheme invested a

total of $3,550,000.   Individual investments ranged from $50,000

to $1,500,000.   After sending their money to the defendant, the

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investors were kept in the dark:   no investor was informed by any

of the conspirators (including the defendant) that any of his funds

had been withdrawn from the trust account.

          In point of fact, not a red cent of the investors' money

was ever used to obtain standby letters of credit.     Nor was any of

that money ever refunded to any investor.

          The   conspirators   bought   time    by   playing   on   the

investors' fears.   For instance, one of the conspirators (Arthur

Merson) threatened the investors that they could be precluded from

future investment opportunities if they sought the return of their

funds.

          Patience has its limits and — after some time had passed

— one of the victims contacted Florida authorities.      That contact

started a chain reaction that brought the matter to the attention

of the Federal Bureau of Investigation.        A probe ensued and, on

April 25, 2019, a federal grand jury sitting in the District of

Maine handed up an indictment charging the defendant and his three

co-conspirators with a single count of conspiracy to commit wire

fraud.3   See 18 U.S.C. §§ 1343, 1349.         Although the defendant

     3 Although none of the defendants resided in Maine, one of
the victims was a resident of that state. Moreover, that victim
had wired funds from his in-state bank account to the defendant's
trust account. In a federal criminal case, venue may be laid in
any district in which an act in furtherance of a charged conspiracy
has taken place. See 18 U.S.C. § 3237(a); see also United States
v. Rutigliano, 790 F.3d 389, 395-97 (2d Cir. 2015). Consequently,
venue in this case was properly laid in the District of Maine.

                               - 5 -
initially maintained his innocence, he later entered into a plea

agreement with the government. On July 22, 2021, he pleaded guilty

to the single count charged in the indictment.               The district court

accepted his plea.

               The disposition hearing was held on February 11, 2022,

and the court sentenced the defendant to a twenty-nine-month term

of immurement, to be followed by a three-year term of supervised

release. The court also determined that restitution was "mandatory

in the amount of $3,473,701," which was the total amount of the

loss       caused   by    the    fraudulent   scheme.4    The     court   deferred,

however, in entering a defendant-specific restitution order, see

18 U.S.C. § 3664(d)(5), and directed the parties to furnish further

briefing as to whether to apportion restitution or, conversely, to

hold the defendant jointly and severally liable for the entire

amount of the loss.

               In due course, the parties filed their supplemental

submissions.          The district court reviewed those submissions, and

on   April      15,      2022,    rejected    the   defendant's    entreaty   that

restitution be limited to $230,000 — the amount that the defendant

"personally received from the fraud."               United States v. Ochoa, No.

       Although the conspirators had obtained $3,550,000 from the
       4

victims, the district court found that one of the victims had
managed to recoup $76,299. The court, therefore, subtracted that
sum from the amount of the loss for purposes of restitution. This
overall loss calculation is not challenged on appeal.

                                         - 6 -
19-00077, 2022 WL 1127858, at *3 (D. Me. Apr. 15, 2022).          Instead,

the court ruled that the defendant should be held jointly and

severally liable (along with his co-conspirators) for the full

amount of the victims' loss:        $3,473,701.   See id. at *1, *5.       In

reaching this result, the court observed that the defendant:

              played a major role in carrying . . . out [the
              scheme], and its success turned on [his]
              position as an attorney.    Mr. Ochoa induced
              trusting victims to deposit their money in his
              law office's trust account, drafted related
              agreements, and, as the [c]ourt raised during
              the sentencing hearing, disbursed the victims'
              funds in direct violation of the agreements
              that he himself drafted.    Moreover, each of
              the victims wired money to Mr. Ochoa's
              attorney trust account and Mr. Ochoa disbursed
              the money to his co-conspirators and to
              himself. . . . In other words, all of the
              losses subject to restitution passed through
              Mr. Ochoa's trust account and none is
              attributable to activity in which he was not
              involved.

Id. at *4.     The court found it unpersuasive that the defendant had

"retained less of the proceeds" than two of his co-conspirators,

noting   that     such    an   argument   "improperly    conflate[d]     [the

defendant's] gain with the victims' losses."         Id. at *5.   Finally,

the   court    declined    the   defendant's   invitation   to   apply    the

reasoning of Paroline v. United States, 572 U.S. 434 (2014), a

child pornography case, to the case at hand.            See Ochoa, 2022 WL

1127858, at *3.

              This timely appeal followed.

                                    - 7 -
                                         II

            This is a rifle-shot appeal:           the sole issue on appeal

focuses on the district court's decision to hold the defendant

jointly    and     severally    liable    for   the   full    amount      of    loss

attributable to the fraud scheme.             The defendant argues that the

court should have limited his restitution obligation to $230,000

—   the   amount    that   he   personally      garnered     from   the    scheme.

Relatedly, he argues that holding him liable for the full amount

of the sums extracted by the conspiracy would impose a crushing

burden and foreclose any prospect of rehabilitation.                Because the

defendant preserved this claim of error below, our review is for

abuse of discretion.       See United States v. Carrasquillo-Vilches,

33 F.4th 36, 45 (1st Cir. 2022).                 Within that framework, we

"examin[e] the court's subsidiary factual findings for clear error

and its answers to abstract legal questions de novo."                          United

States v. Chiaradio, 684 F.3d 265, 283 (1st Cir. 2012).

            The restitution order in this case is grounded upon the

Mandatory Victims Restitution Act (MVRA), 18 U.S.C. § 3663A.                      The

MVRA requires a district court to order a defendant convicted of

"an offense against property . . . including any offense committed

by fraud or deceit," 18 U.S.C. § 3663A(c)(1)(A)(ii), "to 'make

restitution to the victim of the offense,'" United States v. Soto,

799 F.3d 68, 97 (1st Cir. 2015) (quoting 18 U.S.C. § 3663A(a)(1)).

What is more, the MVRA requires the court to "order restitution to

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each   victim    in   the   full   amount    of   each    victim's   losses   as

determined by the court and without consideration of the economic

circumstances of the defendant."           United States v. Morán-Calderón,

780    F.3d     50,   51    (1st    Cir.     2015)       (quoting    18   U.S.C.

§ 3664(f)(1)(A)).      This mandate is easy to apply when a defendant,

acting alone, caused all of a victim's losses:              in that event, the

defendant must be ordered to pay the entire amount of the losses.

See United States v. Yalincak, 30 F.4th 115, 121 (2d Cir. 2022).

              The situation is more nuanced, however, when — as in

this case — more than one miscreant has contributed to the victims'

losses.   In that event, the MVRA gives the court a choice between

two options.      See United States v. Salas-Fernández, 620 F.3d 45,

49 (1st Cir. 2010).         The court may "apportion liability among

defendants according to culpability or capacity to pay, or, in the

alternative, [may] make each defendant liable for the full amount

of restitution by imposing joint and several liability."                  United

States v. Wall, 349 F.3d 18, 26 (1st Cir. 2003); see 18 U.S.C.

§ 3664(h).      In making this choice, a sentencing court enjoys broad

discretion.      See Morán-Calderón, 780 F.3d at 52; Salas-Fernández,

620 F.3d at 48-49.

              The short of it is that the court may weigh an individual

defendant's role in the offense when deciding whether to apportion

restitution — but it is generally free to decide the issue either

way.   See Salas-Fernández, 620 F.3d at 49-50.                This freedom of

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choice is especially appropriate in conspiracy prosecutions.                       In

that context, "it is well established that defendants can be

required    to       pay   restitution    for    the     reasonably       foreseeable

offenses of their co-conspirators."              United States v. Newell, 658

F.3d 1, 32 (1st Cir. 2011); see United States v. Collins, 209 F.3d

1, 4 (1st Cir. 1999).         Put another way, under the MVRA, members of

a conspiracy may be "held jointly and severally liable for all

foreseeable losses within the scope of their conspiracy regardless

of   whether     a    specific   loss    is   attributable     to     a   particular

conspirator."         United States v. Moeser, 758 F.3d 793, 797 (7th

Cir. 2014).

            With these tenets in mind, it is readily apparent that

the district court acted within the encincture of its discretion

in entering a restitution order that held the defendant jointly

and severally liable to each of the victims for the full amount of

the losses suffered by that victim as a result of the scheme.

Although not obligated to do so, see Salas-Fernández, 620 F.3d at

48-49, the district court went the extra mile, sought supplemental

briefing,   and       thoroughly   considered      the    degree    to     which   the

defendant's actions contributed to the victims' losses.                       In the

district court's judgment, this review reinforced — rather than

weakened — the appropriateness of holding the defendant jointly

and severally liable for all of the losses.

                                        - 10 -
          The court supportably found that the defendant played an

instrumental part in the conspiracy:    he took advantage of his

position as a lawyer to entice investors to entrust him with their

money; he drafted the agreements used to facilitate the scheme; he

served as a de facto intake valve for the bilked funds; he falsely

promised to hold those funds in escrow; and he siphoned off the

money and disbursed it — in varying amounts — to himself and to

his co-conspirators.   And as the district court astutely noted,

the defendant's actions created a facade of legitimacy that formed

an essential part of the conspiracy.

          To be sure, the defendant received a smaller share of

the booty than some of his co-conspirators.   But his able counsel

made that argument to the district court, which rejected it.

Nothing in the record fairly suggests that we should second-guess

the district court and disturb that quintessential exercise of its

discretion.

          In an effort to blunt the force of this reasoning, the

defendant strives to convince us that a district court's exercise

of discretion under the MVRA should be guided by "a standard that

place[s] some restriction" on the district court's exercise of

that discretion.   Although the defendant does not provide much

detail as to what the contours of that standard should be, he

suggests that this new standard should be derived from the Supreme

Court's decision in Paroline, 572 U.S. 434.   Based on the logic of

                             - 11 -
that case, he submits that a district court should be obliged to

give weight to a defendant's "conduct" and relative "culpability"

in determining whether to apportion restitution.                       We are not

convinced.

              Paroline is not a fair congener.             There, the defendant

pleaded guilty to possessing child pornography, and the Court was

faced   with    "the   question     of   how    to   determine   the    amount   of

restitution a possessor of child pornography must pay to the victim

whose   childhood      abuse   appears    in     the    pornographic    materials

possessed."     Paroline, 572 U.S. at 439.             The governing statute was

not the MVRA but, rather, 18 U.S.C. § 2259 — a restitution statute

specific to offenses enumerated in 18 U.S.C. chapter 110.                        The

Fifth Circuit held that the defendant could be adjudged jointly

and severally liable for the full amount of restitution owed to

the victim, approximately $3,400,000.                See id. at 441-43.        That

holding was premised in part on the notion that section 2259 "did

not   limit    restitution     to    losses     proximately      caused   by     the

defendant" so that "each defendant who possessed the victim's

images should be made liable for the victim's entire losses from

the trade in her images."           Id. at 442-43.

              The Supreme Court took a different view, rejecting the

Fifth Circuit's conclusion that section 2259 did not "limit[]

restitution to those losses proximately caused by the defendant's

offense conduct."        Id. at 443.           The Court held that "a court

                                      - 12 -
applying [section] 2259 should order restitution in an amount that

comports with the defendant's relative role in the causal process

that underlies the victim's general losses."              Id. at 458.   The

Court   described   the   "causal    process"   between    the   defendant's

offense and the victim's losses as "atypical," and it was careful

to explain that its holding applied only to the "special context"

before it — a context that embodied cases in which the defendant

was "one of thousands" who contributed to the victim's loss by

possessing her images and where, as a result, "it [wa]s impossible

to trace a particular amount of [the victim's] losses to the

individual defendant."     Id. at 449, 458.

           The case at hand is at a far remove from Paroline.           This

case involves a fraud scheme in which there is nothing either

atypical or difficult to trace about the causal nexus between the

offense conduct and the investors' losses.         Nor is there anything

about the context that can fairly be described as "special":             the

defendant took part in a garden-variety fraud scheme in which he

and his co-conspirators obtained millions of dollars from five

individuals by hoodwinking them into pursuing a bogus investment

opportunity.   Apples should be compared with apples and — given

the starkly different factual settings — we decline to transplant

the reasoning of Paroline into the inhospitable soil of this case.

See United States v. Kolodesh, 787 F.3d 224, 242-43 (3d Cir. 2015)

(declining to extend Paroline to "case involv[ing] straightforward

                                    - 13 -
consideration of moneys obtained by fraud"); see also United States

v. Sheets, 814 F.3d 256, 261 (5th Cir. 2016) ("Paroline solely

involves the issue of whether restitution may be imposed under the

circumstances of that case . . . .").

              Three     decades   ago,   we   wrote    that   "[i]n    making

discretionary judgments, a district court abuses its discretion

when   a     relevant    factor   deserving   of   significant     weight   is

overlooked, or when an improper factor is accorded significant

weight, or when the court considers the appropriate mix of factors,

but commits a palpable error of judgment in calibrating the

decisional scales."         United States v. Roberts, 978 F.2d 17, 21

(1st Cir. 1992); accord United States v. Soto-Beníquez, 356 F.3d

1, 30 (1st Cir. 2003); Indep. Oil & Chem. Workers, Inc. v. Procter

& Gamble Mfg. Co., 864 F.2d 927, 929 (1st Cir. 1988).               Here, the

district court did not overlook a relevant factor.                Nor has the

defendant argued that the court gave significant weight to any

irrelevant factor.         And, finally, the district court's careful

handling of the issue belies any suggestion that it made a palpable

error of judgment.

              We hold that where, as here, a defendant is convicted as

a   member    of   a    wire-fraud   conspiracy,   a   district    court    has

discretion to order him to reimburse the victims of the scheme,

jointly and severally with his co-conspirators, for all reasonably

foreseeable losses engendered by the scheme.           See Newell, 658 F.3d

                                     - 14 -
at 32; Collins, 209 F.3d at 4.         Such a holding is consistent with

the   principle    that   a   defendant      may   be    held   liable    "for   all

foreseeable losses within the scope of [a] conspiracy."                    Moeser,

758 F.3d at 797.     And the court's discretion does not vanish into

thin air simply because a particular defendant received a smaller

share   of   the   swindled    funds   than    was      received   by    other   co-

conspirators.      See United States v. Rodriguez, 915 F.3d 532, 536-

37 (8th Cir. 2019).

                                       III

             We need go no further. For the reasons elucidated above,

the district court's restitution order is

Affirmed.

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