Court Opinion

ID: 4460340
Source: CourtListenerOpinion
Date Created: 2019-11-29 21:00:25.005174+00
Date Added: 2024-06-11T14:53:05.031033
License: Public Domain

NOT FOR PUBLICATION                        FILED
                    UNITED STATES COURT OF APPEALS                       NOV 29 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                              FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                       No.    18-10323

                Plaintiff-Appellee,             D.C. No.
                                                2:13-cr-00018-JCM-GWF-1
 v.

LEON BENZER,                                    MEMORANDUM*

                Defendant-Appellant.

                   Appeal from the United States District Court
                            for the District of Nevada
                    James C. Mahan, District Judge, Presiding

                    Argued and Submitted November 13, 2019
                            San Francisco, California

Before: BENNETT and LEE, Circuit Judges, and PIERSOL,** District Judge.

      Leon Benzer appeals his 151-month sentence for his role in a conspiracy that

defrauded a homeowner association of millions of dollars. Benzer argues that the

district court, among other things, committed procedural error by miscalculating

his loss figure. We affirm.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
              The Honorable Lawrence L. Piersol, United States District Judge for
the District of South Dakota, sitting by designation.
      1.     Factual background: Leon Benzer and his cabal of co-conspirators

concocted a sophisticated scheme to defraud homeowner associations of new

condominium developments in the Las Vegas area. Using straw purchasers, Benzer

packed association boards with members who would hire a co-conspirator lawyer

to handle construction defect litigation and would also steer millions of dollars of

remediation work to his company, which ended up performing only minimal work.

For the Vistana homeowner association, Benzer directed the board to replace the

law firm handling Vistana’s construction defect litigation with his co-conspirator

attorney Nancy Quon. Quon settled the suit, securing $19 million for Vistana.

Quon received over $5 million of that amount as compensation.

      Benzer was eventually arrested, charged, and pleaded guilty, though his

original sentence was vacated by this court and his case was remanded for

resentencing. See United States v. Ball, 711 F. App’x 838, 845–46 (9th Cir. 2017)

(unpublished). At resentencing, the court found Benzer to have caused a loss of

$12.4 million in the course of his conspiracy. This resulted in a 20-level

enhancement to his sentence. Benzer was sentenced to 151-months in prison, the

high-end of the resulting Guidelines range.

      2.     Miscalculation of loss figure: Benzer initially argues that the district

court committed reversible procedural error by miscalculating his loss figure. He

claims that the court failed to offset his loss amount by the fair market value of the

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services provided by his attorney co-conspirators to the victims as required by the

United States Sentencing Guidelines Manual, § 2B1.1, application note 3(E)(i).

The claimed value of these services was over $5 million dollars, though most of

that figure derives from Quon’s fees for negotiating the settlement. The district

court disagreed, expressly finding that the services were “skewed,” illegitimate,

and lacking any value, and set Benzer’s loss figure at $12.4 million.

      On appeal, the government argues for the first time — and Benzer agrees —

that the district court applied the wrong (2016) Guidelines version at resentencing.

Because this court vacated Benzer’s original sentence and remanded, the

resentencing proceedings should have been conducted using the 2014 Guidelines.

See 18 U.S.C. § 3742(g)(1) (the district court must “apply the guidelines . . . that

were in effect on the date of the previous sentencing of the defendant prior to the

appeal”); see also United States v. Door, 917 F.3d 1146, 1150 n.2 (9th Cir. 2019).

      Because the issue was raised for the first time on appeal, we review for plain

error. See Fed. R. Crim. P. 52(b); see also United States v. Pelisamen, 641 F.3d

399, 404 (9th Cir. 2011). Under this standard, “reversal is warranted only where

there has been (1) error; (2) that is plain; (3) that affects substantial rights; and (4)

where the error seriously affects the fairness, integrity, or public reputation of

judicial proceedings.” Pelisamen, 641 F.3d at 404 (citing United States v. Olano,

507 U.S. 725, 732 (1993)).

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      By applying the wrong Guidelines version, there was both error and it was

plain. But the error does not affect Benzer’s substantial rights because his

enhancement would have been identical under the proper 2014 Guidelines.

Compare U.S. Sentencing Guidelines Manual § 2B1.1(b)(1)(K) (U.S. Sentencing

Comm’n 2016) (20-level enhancement if loss is between $9.5 million and $25.0

million), with U.S. Sentencing Guidelines Manual § 2B1.1(b)(1)(K) (U.S.

Sentencing Comm’n 2014) (20-level enhancement if loss is between $7.0 million

and $20.0 million). This court has held that where a district court applies an

incorrect Guidelines version, but the error does not cause the enhancement to

differ, such error does not affect a defendant’s substantial rights. See United States

v. Benitez-Perez, 367 F.3d 1200, 1205–06 (9th Cir. 2004). That is the case here.

      Furthermore, Benzer’s argument on the merits still fails because the district

court did not commit reversible error by finding that Benzer’s co-conspirator

attorneys’ services lacked any value. For factual findings made at sentencing,

including amounts of loss in fraud cases, we review for clear error. See United

States v. Popov, 742 F.3d 911, 914 (9th Cir. 2014).

      It is self-evident that Benzer’s attorney co-conspirators violated the duty of

loyalty owed to their client-victims. Where an attorney violates that duty, fees

received are subject to disgorgement. See Restatement (Third) of The Law

Governing Lawyers § 37 (Am. Law Inst. 2000); see also Rodriguez v. Disner, 688

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F.3d 645, 653 (9th Cir. 2012) (“In determining what fees are reasonable, a district

court may consider a lawyer’s misconduct, which affects the value of the lawyer’s

services.”); Silbiger v. Prudence Bonds Corp., 180 F.2d 917, 920 (2d Cir. 1950)

(Learned Hand, J.) (noting that where an attorney represents opposing interests,

“the usual consequence has been that he is debarred from receiving any fee from

either, no matter how successful his labors”).

      Because fees are subject to disgorgement when an attorney represents

opposing interests, those services rendered may be deemed valueless.

Consequently, we cannot say that the court clearly erred by finding Benzer’s co-

conspirator attorneys’ services lacking in fair market value.

      3.     Reliance on clearly erroneous facts: Benzer also claims that the court

committed procedural error by relying on clearly erroneous facts at resentencing.

Claims of procedural error at sentencing are reviewed for abuse of discretion. See

United States v. Carty, 520 F.3d 984, 993 (9th Cir. 2008). “[A] finding is clearly

erroneous if it is illogical, implausible, or without support in the record.” United

States v. Burgos-Ortega, 777 F.3d 1047, 1056 (9th Cir. 2015) (internal quotation

marks and citation omitted).

      The supposed erroneous facts relied upon include several references by the

court to a jury trial despite Benzer pleading guilty, as well as an allegedly mistaken

belief by the court that Benzer was originally sentenced at the high-end of the

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Guidelines range, when it had sentenced Benzer at the low-end of the range. But

the district court’s misstatements were immediately corrected by counsel and

acknowledged by the court.

      4.     Substantive unreasonableness: Finally, Benzer claims that his

sentence is substantively unreasonable because the court failed to sufficiently

account for Benzer’s mitigating circumstances. Claims of substantive

unreasonableness are evaluated under an abuse of discretion standard that requires

this court to “take into account the totality of the circumstances.” Gall v. United

States, 552 U.S. 38, 51 (2007). The record shows that the district court did not

abuse its discretion in weighing the sentencing factors. The court considered the

mitigating factors proffered by Benzer, but it also considered the nature and

circumstances of the offense and the need for a sentence to reflect the crime.

      AFFIRMED.

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