Court Opinion

ID: 8484234
Source: CourtListenerOpinion
Date Created: 2022-11-16 19:00:33.104076+00
Date Added: 2024-06-11T16:49:51.986092
License: Public Domain

USCA11 Case: 20-10543      Date Filed: 11/16/2022   Page: 1 of 13

                                           [DO NOT PUBLISH]
                             In the
         United States Court of Appeals
                  For the Eleventh Circuit

                    ____________________

                          No. 20-10543
                    ____________________

UNITED STATES OF AMERICA,
                                               Plaintiff-Appellee,
versus
ANNAMALAI ANNAMALAI,
a.k.a. Dr. Commander Selvam,
a.k.a. Swamiji Sri Selvam Siddhar,

                                           Defendant-Appellant.
                    ____________________

          Appeal from the United States District Court
             for the Northern District of Georgia
          D.C. Docket No. 1:13-cr-00437-TCB-CMS-1
                   ____________________
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2                     Opinion of the Court                20-10543

Before BRANCH, GRANT, and JULIE CARNES, Circuit Judges.
PER CURIAM:
        In 2014, following a lengthy trial, a jury convicted
Annamalai Annamalai of 34 criminal offenses, including conspiracy
to commit bank fraud, bank fraud, filing a false federal income tax
return, conspiracy to commit bankruptcy fraud, bankruptcy fraud,
money laundering, making a false statement in writing,
obstruction of justice, making false statements under oath during a
bankruptcy proceeding, and conspiracy to harbor a fugitive. See
United States v. Annamalai, 939 F.3d 1216, 1221–22 (11th Cir. 2019)
(Annamalai I). On appeal, we reversed his convictions for
conspiracy to commit bankruptcy fraud, bankruptcy fraud, money
laundering, and conspiracy to harbor a fugitive. Id. at 1225–35. We
affirmed his remaining convictions and remanded for resentencing.
Id. at 1221, 1238–39.
       Following our decision and prior to resentencing,
Annamalai filed a motion for attorney’s fees under the Hyde
Amendment for the counts that we reversed on direct appeal,
along with a related motion for summary judgment and a motion
to compel production of documents. The district court denied
these motions, and Annamalai appealed. After review and with the
benefit of oral argument, we affirm.
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20-10543              Opinion of the Court                        3

                         I.       Background
                A. Annamalai’s Trial and Direct Appeal
        Annamalai, “a self-proclaimed Hindu priest,” ran the Hindu
Temple and Community Center of Georgia, Inc. in Norcross,
Georgia from 2005 to 2009. United States v. Annamalai, 939 F.3d
1216, 1221 (11th Cir. 2019). “The Hindu Temple generated income
in part by charging fees for religious and spiritual products and
services, including religious ceremonies and horoscopes.” Id.
“The evidence at trial showed that Mr. Annamalai used the Hindu
Temple as part of a criminal scheme to defraud his followers and
commit bank fraud.” Id. Specifically, he made unauthorized
transactions on his followers’ credit cards, and then, if they
complained, he would cite to the temple’s “no refund” policy. Id.
He also submitted false documents and information to banks and
law enforcement to justify the charges. Id. He “used the fraud
proceeds to fund a lavish lifestyle, including multiple homes and
expensive cars.” Id. The Hindu Temple filed for Chapter 11
bankruptcy in 2009 and the bankruptcy trustee closed the temple.
Id. at 1221–22. Meanwhile, Annamalai incorporated a new temple,
which also provided religious and spiritual products and services
for a fee. Id. at 1222.
      In 2013, a grand jury in the Northern District of
      Georgia returned an indictment against Mr.
      Annamalai and others. The government
      subsequently obtained two superseding indictments.
      The second superseding indictment charged Mr.
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4                      Opinion of the Court                 20-10543

      Annamalai with 34 criminal offenses: conspiracy to
      commit bank fraud in violation of 18 U.S.C. §§ 1349
      and 1344 (Count 1); bank fraud in violation of 18
      U.S.C. §§ 1344 and 2 (Counts 2–8); filing a false federal
      income tax return in violation of 26 U.S.C. § 7206(1)
      (Count 9); conspiracy to commit bankruptcy fraud in
      violation of 18 U.S.C. §§ 371 and 152(1) (Count 10);
      bankruptcy fraud in violation of 18 U.S.C. §§ 152(1)
      and 2 (Counts 11–20); money laundering in violation
      of 18 U.S.C. §§ 1956(a)(1)(B)(i) and 2 (Counts 21–30);
      making a false statement in writing in violation of 18
      U.S.C. §§ 1001(a)(3) and 2 (Count 31); obstruction of
      justice in violation of 18 U.S.C. §§ 1503 and 2 (Count
      32); making false statements under oath in a
      bankruptcy proceeding in violation of 18 U.S.C.
      §§ 152(2) and 2 (Count 33); and conspiracy to harbor
      a fugitive in violation of 18 U.S.C. §§ 1071 and 371
      (Count 34).

Id. The monies received by the new temple served as the basis for
the bankruptcy fraud charges. Id. A jury convicted Annamalai of
all 34 counts. Id.
        On appeal, we reversed Annamalai’s convictions for
substantive bankruptcy fraud (Counts 11–20), conspiracy to
commit bankruptcy fraud (Count 10), money laundering (Counts
21–30), and conspiracy to harbor a fugitive (Count 34). Id. at 1228–
35. As to sentencing, we determined that the district court erred in
its loss-amount determination related to the bank fraud counts,
which affected the guidelines’ calculation and required
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20-10543                 Opinion of the Court                           5

resentencing. Id. at 1235–38. We affirmed the other sentencing
enhancements and remanded the case for further proceedings. Id.
at 1238–39 & n.5.
                  B. The Hyde Amendment Proceedings
          Following our decision in Annamalai I and prior to
resentencing, Annamalai filed a pro se motion for attorney’s fees
and expenses under the Hyde Amendment, seeking to recover fees
and expenses incurred in defending against the counts of
conviction that we reversed on direct appeal. He maintained that
the government’s prosecution on those counts was “frivolous,
[v]exatious, or in bad faith” and “utterly without foundation in law
or fact.” That same day, he filed a pro se notice stating that he had
served the government with a request for admissions under
Federal Rule of Civil Procedure 36.
       Approximately a month later, he filed a pro se motion for
summary judgment on the Hyde Amendment claim. He asserted
that the government had not answered his request for admissions,
and, therefore, all were deemed admitted, and he was entitled to
summary judgment on his Hyde Amendment motion.1
Annamalai also filed a motion to compel production of certain
documents, including any e-mails, excluding privileged materials,

1 One of the requests for admissions was that all of the charges against
Annamalai were “bogus, and brought with a vexatious and bad faith intent,”
and that the government had “orchestrated a massive malicious prosecution”
against him.
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6                          Opinion of the Court                      20-10543

that related to him, his wife, his former business partner, and any
Hindu temples or business entities with which any of those
individuals were involved—which he claimed was related to his
Hyde Amendment motion.
       The district court denied all three motions in an omnibus
order, explaining that the Hyde Amendment
       allows attorney’s fees if a prosecution is brought
       vexatiously, in bad faith, or so utterly without legal or
       factual foundation as to be frivolous. This is not the
       case here. A jury convicted Annamalai of [the
       reversed] counts and, although the Eleventh Circuit
       reversed the conviction[s], it is a far stretch from the
       type of prosecution for which the Hyde Amendment
       provides relief.

(internal citations omitted). Annamalai, proceeding pro se,
appealed. Meanwhile, he awaited resentencing. We appointed
counsel to represent Annamalai and held oral argument.
      During the pendency of this appeal, the district court held
the resentencing hearing and resentenced Annamalai to 216
months’ imprisonment, followed by five years’ supervised release.
     With this procedural background in mind, we turn to the
arguments on appeal. 2

2 We issued a jurisdictional question, asking the parties to address whether the
district court’s omnibus order was a final order or otherwise immediately
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20-10543                    Opinion of the Court                                7

                          II.      Standard of Review
       We review the district court’s award or denial of attorney’s
fees and costs under the Hyde Amendment for abuse of discretion.
United States v. Adkinson, 247 F.3d 1289, 1290 (11th Cir. 2001);
United States v. Gilbert, 198 F.3d 1293, 1296–98 (11th Cir. 1999).
“An abuse of discretion occurs if the judge fails to apply the proper
legal standard or to follow proper procedures in making the
determination, or bases an award or a denial upon findings of fact

appealable. We have appellate jurisdiction over only “final decisions of the
district courts.” 28 U.S.C. § 1291.
        Annamalai argued that the district court’s order was final and
appealable under § 1291 because a Hyde Amendment motion constituted a
separate, ancillary civil proceeding, and the order ended the litigation on the
Hyde Amendment motion. The government, on the other hand, argued that
we lacked jurisdiction to review the order because the Hyde Amendment
motion is part of the underlying criminal action and, therefore, the order
would be final only upon Annamalai’s resentencing.
        However, Annamalai’s resentencing is now complete. Accordingly,
we have jurisdiction under § 1291 to review the district court’s denial of the
Hyde Amendment motion. See United States v. Curry, 760 F.2d 1079, 1079–
80 (11th Cir. 1985) (explaining that, in a criminal case, a “premature notice of
appeal is effective to perfect an appeal as of the date the sentence is entered as
the judgment”); see also OFS Fitel, LLC v. Epstein, Becker & Green, P.C., 549
F.3d 1344, 1356, 1359 (11th Cir. 2008) (explaining that “when [an] appeal is
from a final judgment, the fact that the appeal substantively concerns an
interlocutory ruling is no bar to jurisdiction”). Therefore, we need not decide
whether the filing of a Hyde Amendment motion constitutes a separate civil
proceeding or is part of the underlying criminal action.
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8                      Opinion of the Court                 20-10543

that are clearly erroneous.” Gilbert, 198 F.3d at 1298 (alterations
adopted) (quotations omitted).
                           III.   Discussion
        Annamalai argues that the district court abused its discretion
in denying his Hyde Amendment motion because it applied the
wrong legal standard and because the government’s unanswered
request for admissions established that Annamalai was entitled to
relief.
      The Hyde Amendment provides in pertinent part:
      [T]he court, in any criminal case (other than a case in
      which the defendant is represented by assigned
      counsel paid for by the public) . . . may award to a
      prevailing party, other than the United States, a
      reasonable attorney’s fee and other litigation
      expenses, where the court finds that the position of
      the United States was vexatious, frivolous, or in bad
      faith, unless the court finds that special circumstances
      make such an award unjust. Such awards shall be
      granted pursuant to the procedures and limitations
      (but not the burden of proof) provided for an award
      under section 2412 of title 28, United States Code.

Pub. L. No. 105–119, § 617, 111 Stat. 2440, 2519 (1997) (reprinted in
18 U.S.C. § 3006A, historical and statutory notes). The criminal
defendant bears the burden of proving by a preponderance of the
evidence that he is entitled to the fee award. Adkinson, 247 F.3d at
1291. In order to be entitled to a Hyde Amendment award, the
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20-10543                Opinion of the Court                         9

defendant must do more than show that he “prevailed at the
pre-trial, trial, or appellate stages of the prosecution.” Gilbert, 198
F.3d at 1299. Rather, a defendant faces the “daunting obstacle” of
“show[ing] that the government’s position underlying the
prosecution amounts to prosecutorial misconduct—a prosecution
brought vexatiously, in bad faith, or so utterly without foundation
in law or fact as to be frivolous.” Id. at 1299, 1302.
       For Hyde Amendment purposes,
       [v]exatious means without reasonable or probable
       cause or excuse. A frivolous action is one that is
       [g]roundless . . . with little prospect of success; often
       brought to embarrass or annoy the defendant. [B]ad
       faith is not simply bad judgment or negligence, but
       rather it implies the conscious doing of a wrong
       because of dishonest purpose or moral obliquity; . . .
       it contemplates a state of mind affirmatively
       operating with furtive design or ill will.

United States v. Shaygan, 652 F.3d 1297, 1312 (11th Cir. 2011)
(second and third alterations in original) (internal citations and
quotations omitted). “[T]he Supreme Court has explained that, in
all but an exceptional case, ‘so long as the prosecutor has probable
cause to believe that the accused committed an offense defined by
statute, the decision whether or not to prosecute, and what charge
to file or bring before a grand jury, generally rests entirely in his
discretion.’” Id. at 1315 (quoting Bordenkircher v. Hayes, 434 U.S.
357, 364 (1978)).
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10                     Opinion of the Court                20-10543

       The district court denied Annamalai’s Hyde Amendment
related motions, concluding that his prosecution was not brought
vexatiously, in bad faith, or legally frivolous. The district court’s
decision was correct because Annamalai failed to demonstrate his
entitlement to a fee award.
       Although Annamalai argues that our opinion on direct
appeal reversing the bankruptcy fraud convictions demonstrated
that the government’s position was legally frivolous as a matter of
law, his argument is meritless. We reversed Annamalai’s
bankruptcy fraud convictions after determining that inclusion of
the post-bankruptcy petition monies received by the new temple—
the only basis for the bankruptcy fraud charges—would contravene
the plain language of relevant bankruptcy statutes that defined the
bankruptcy estate. Annamalai I, 939 F.3d at 1228–29. Accordingly,
the bankruptcy fraud charges could not stand. Id. But our
conclusion in Annamalai I does not demonstrate that the
government’s position was legally frivolous.
       As we noted in Annamalai I, the bankruptcy trustee
incorrectly opined that the receivables of the new temple were
property of the bankruptcy estate. Id. at 1229. Additionally, the
government believed that the Hindu temple and the new temple
were essentially alter egos—i.e., that they were the same business.
Id. at 1230–31. Although we determined on direct appeal that
those conclusions were incorrect and based on a misunderstanding
of bankruptcy law, id., an incorrect interpretation of the law or a
misunderstanding of the law does not make a prosecution legally
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20-10543               Opinion of the Court                       11

frivolous. Thus, because the government legitimately believed,
albeit erroneously, that the post-petition receivables of the new
temple were part of the bankruptcy estate and that the Hindu
temple and the new temple were alter egos, its prosecution was not
vexatious, in bad faith, or legally frivolous. Shaygan, 652 F.3d at
1315, 1317. Accordingly, the district court had no discretion to
award Annamalai fees or costs under the Hyde Amendment.
       Annamalai argues that the district court applied an improper
legal standard in denying his Hyde Amendment motion because
the district court based its denial on the fact that he was convicted
by a jury. He maintains that there is no limitation on Hyde
Amendment relief for defendants that were convicted by a jury but
later prevailed on appeal, and that it is entirely plausible that the
government can convince a jury to convict in a legally frivolous
case—as it did in his case. His argument is unpersuasive.
        Although the district court mentioned in the order denying
the Hyde Amendment motion that Annamalai had been convicted
by a jury, the court did not improperly apply that fact in its
determination of his entitlement to the fee award. Rather, the
district court properly identified that the Hyde Amendment
“allows attorney’s fees if a prosecution is brought vexatiously, in
bad faith, or so utterly without legal or factual foundation as to be
frivolous”—which is the correct legal standard. And it applied that
legal standard when it determined that Annamalai’s case was “a far
stretch from the type of prosecution for which the Hyde
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12                     Opinion of the Court                 20-10543

Amendment provides relief.” Accordingly, the district court did
not apply an improper legal standard.
       Alternatively, Annamalai argues that the district court erred
in denying his Hyde Amendment motion and his related motion
for summary judgment and motion to compel because it ignored
the fact that the government failed to respond to his Rule 36
request for admissions and therefore those admissions—which
included three statements that the government’s prosecution was
malicious, in bad faith, vexatious, and frivolous—were admitted.
Accordingly, he claims that he made the required showing for a fee
award. Annamalai’s argument is meritless. Even assuming that
Rule 36 applies to his case—a question on which we express no
opinion because we do not reach whether a Hyde Amendment
motion is a separate civil proceeding or part of the underlying
criminal action—a party cannot use Rule 36 to request admissions
to legal conclusions. See Fed. R. Civ. P. 36(a)(1) (authorizing a
party to request admissions to “facts, the application of law to fact,
or opinions about either”); see also Pickens v. Equitable Life
Assurance Soc’y of the U.S., 413 F.2d 1390, 1393 (5th Cir. 1969)
(holding that “requests for admissions as to central facts in dispute
are beyond the proper scope of [Rule 36]”). And, regardless, even
if the government were deemed to have made the alleged
admissions, we are not bound to accept the government’s
concessions. United States v. Watkins, 13 F.4th 1202, 1210 (11th
Cir. 2021); see also United States v. Colston, 4 F.4th 1179, 1187
(11th Cir. 2021) (explaining that courts are never bound by
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20-10543              Opinion of the Court                      13

concessions on questions of law). Rather, the determination of
whether a government’s prosecution was vexatious, frivolous,
malicious or in bad faith is reserved for the court.
      Accordingly, we affirm the district court’s order.
      AFFIRMED.