Court Opinion

ID: 3167960
Source: CourtListenerOpinion
Date Created: 2016-01-07 20:00:43.777915+00
Date Added: 2024-06-11T11:55:45.007485
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                               No. 13-4828

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

           v.

JEFFREY A. MARTINOVICH,

                Defendant - Appellant.

Appeal from the United States District Court for the Eastern
District of Virginia, at Newport News. Robert G. Doumar, Senior
District Judge. (4:12-cr-00101-RGD-TEM-1)

Argued:   September 17, 2015                 Decided:   January 7, 2016

Before WYNN, FLOYD, and THACKER, Circuit Judges.

Affirmed in part, vacated in part, and remanded by published
opinion.   Judge Thacker wrote the majority opinion, in which
Judge Floyd joined.    Judge Wynn wrote a separate concurring
opinion.

ARGUED: Lawrence Hunter Woodward, Jr., SHUTTLEWORTH, RULOFF,
SWAIN, HADDAD & MORECOCK, PC, Virginia Beach, Virginia, for
Appellant.   V. Kathleen Dougherty, OFFICE OF THE UNITED STATES
ATTORNEY, Norfolk, Virginia, for Appellee.     ON BRIEF: Dana J.
Boente, United States Attorney, Alexandria, Virginia, Brian J.
Samuels, Assistant United States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Newport News, Virginia, for Appellee.
THACKER, Circuit Judge:

             During      the    course         of      a     four-week         jury    trial,     the

Government       sought        to        prove        that        Jeffrey       A.     Martinovich

(“Appellant”)         engaged       in    a    scheme        to    defraud       his     investment

firm’s    clients      out     of    millions          of    dollars.           The    jury      found

Appellant guilty of one count of conspiracy to commit mail and

wire    fraud,    four    counts          of   wire        fraud,       five    counts      of   mail

fraud, and seven counts of money-laundering.                                   On September 30,

2013, Appellant was sentenced to 140 months of imprisonment,

three years of supervised release, and monetary penalties.

             Appellant appeals his convictions, alleging a litany

of   errors.      Above      all,        Appellant          contends         that     the   district

court    improperly       interfered             with       the     trial       proceedings        and

misstated the law during his sentencing hearing.

            We conclude that the jury’s verdict must stand, but

because the district court treated the United States Sentencing

Guidelines (“Guidelines”) as mandatory, we vacate the sentence

and remand with instructions that the matter be assigned to a

different judge.

                                                 I.

                                                 A.

            In or around 2000, Appellant partnered with Witt Mares

&    Company,     a    public       accounting              firm,       to     form    Martinovich

Investment       Consulting         Group        (“MICG”),          a        financial      services

                                                  2
company that provided investment services to its clients.                            As a

broker-dealer, MICG was licensed by the Securities and Exchange

Commission and regulated by the Financial Industry Regulatory

Authority (“FINRA”).

              MICG    utilized       First         Clearing,      LLC,     a     non-bank

affiliate of Wells Fargo, to provide brokerage account services,

such as compiling and issuing investor statements and portfolio

information, to MICG’s clients.

              In 2005, Appellant became the sole owner and Chief

Executive Officer of MICG.               Thereafter, MICG rapidly expanded,

and as a result, incurred increased expenses for salaries, rent,

marketing, celebratory events, and corporate retreats.

              In November 2006, Bruce Glasser began employment with

MICG    as    managing     director      of       investment   banking.           Glasser

recommended        that   Appellant       invest       in   EPV     Solar,       Inc.,    a

privately     held    solar     energy    company.          Appellant      and    Glasser

expected      EPV’s    value    to   increase        with   EPV’s    initial       public

offering (“IPO”) in 2008.            In order to take advantage of the EPV

investment opportunity, MICG created a hedge fund for MICG’s

clients      and   launched     MICG     Venture      Strategies,        LLC   (“Venture

Fund”).       The Venture Fund consisted of only non-public assets

that were not otherwise tradeable.                    The governing document for

the Venture Fund was the Private Placement Memorandum (“PPM”).

The    PPM   defined      the   Venture       Fund’s    investment       strategy        and

                                              3
objectives, including defining the manager’s role.                       Pursuant to

the PPM, Appellant had sole authority for investment decisions,

asset valuations, incentive allocation, and management fees for

the Venture Fund.         EPV became its first investment with over 1.8

million     shares    purchased     at        $1.15   per   share    in     June     and

September 2007.

            As the Venture Fund manager, Appellant received both a

1% management fee and 20% incentive fee based on the Venture

Fund’s     performance.         First     Clearing      managed      the     brokerage

account services for the Venture Fund, and Appellant maintained

the only check writing privileges for receiving and disbursing

money related to the Venture Fund account.

            Pursuant to the PPM, Appellant needed an independent

valuation    of     EPV   in    order    to     calculate   his     management       and

incentive fees and value to the clients.                    In turn, Appellant,

through     First     Clearing,         would     provide    statements,           which

reflected the Venture Fund’s holdings and performance, to MICG’s

clients.     A rise in the value of the holding meant additional

incentive and management fees to Appellant.

            Despite       the   PPM’s     requirement       for     an     independent

valuation, Appellant, through Glasser and Steven Gifis (an EPV

shareholder and broker of the MICG/EPV deal), had Peter Lynch

(an EPV shareholder, consultant, and a solar industry expert)

                                           4
conduct     the      valuation. 1         During         the    course       of   the   valuation

process, Lynch was unaware of the true intent of the valuation.

Rather, Gifis told Lynch that the valuation was being done so

that EPV’s president could value his personal holdings.                                        Lynch

did   not      know       the    valuation       was      being      produced        pursuant       to

Appellant’s request, was to be used to value assets held in a

hedge fund, or that it would be used outside EPV.

               Under        these       false       pretenses,          Lynch        provided        a

valuation share price of $2.13 for end-of-year 2007.                                    Based on

this end-of-year valuation, Appellant took an incentive and/or

management fee of $357,019, withdrawn from First Clearing.

               In     early      2008,    Appellant            added    an    ownership        in   a

privately held soccer team, the General Sports Derby Partnership

(“Derby Rams”), and an interest in a construction bond to the

Venture     Fund.               In    September         2008,        when    EPV’s      financing

dissolved,          its    IPO       failed    to       launch,      thereby        damaging    its

forecasted growth potential.                    As a result, MICG clients sought a

return    of    their       money.        In    response,         Appellant         proceeded       to

deny, discourage, and delay his clients’ redemptions, yet in

October     2008,         he    redeemed       $100,000         of     his    own    investment.

Moreover,       even       with       EPV’s     decline,         Appellant        continued         to

      1Appellant did not compensate Gifis, Glasser, or Lynch to
produce these valuations.

                                                    5
encourage and recruit individuals to invest capital into the

Venture Fund.       In doing so, Appellant (1) sought unsophisticated

investors;      (2)     failed        to    disclose       EPV’s           dire     condition;

(3) misinformed       investors        about      their    redemption         ability;       and

(4) used new investment money to pay other investors.

            Needing     another        valuation         for    end-of-year          2008,    in

December 2008, Appellant again orchestrated an EPV share price

valuation.       From    a     share       price    of    $2.13       in    December      2007,

Appellant requested that EPV show an increased share value of

$2.16     for   end-of-year           2008,       and    this        $2.16        share   price

recommendation was submitted to Lynch.                     In order to support his

predetermined incentive and management fees, along with EPV’s

predetermined      valuation,         Appellant         also    represented          that    the

Derby Rams were valued at $7,595,000.                      However, the Derby Rams

were    actually      valued     at    $6,000,000.              On    January        2,   2009,

Appellant took three draws totaling $478,363.47 from the Venture

Fund’s First Clearing account to pay Appellant’s management and

incentive fees.

            Lynch     once     again       approved       Appellant’s         predetermined

price of $2.16, thinking it was only being used internally.                                   On

January    4,   2009,    Appellant          received       confirmation            that   Lynch

approved the $2.16 valuation.                 However, because of the decreased

value of Derby Rams, Appellant required even more inflation to

EPV’s valuation to justify the incentive and management fees of

                                              6
$478,363.47 that Appellant had already paid himself.                            Thus, on

January    7,    2009,     Appellant        authored    and     transmitted          another

increased EPV valuation at $2.42, which was signed by Lynch on

January 15, 2009.           But a $2.42 share price was still not high

enough    to    support    Appellant’s         incentive      and    management        fees.

So, several hours later, on January 15, 2009, Appellant authored

and transmitted yet another increased valuation at a $2.88 share

price.

               Appellant       was    aware       the   $2.88       share     value      was

excessive.       Even so, MICG clients received their statements from

First Clearing indicating this $2.88 share value, and Appellant

continued to assure investors of the Venture Fund’s security.

For instance, on January 16, 2009, Gifis sought MICG investors

to purchase EPV shares at $1.00 per share, well below the $2.88

share     value.         And    on     January 22, 2009,            Appellant        himself

identified      and   arranged        for   six    individuals       to     purchase     EPV

stock at $1.15 per share, at the same time he was promoting the

$2.88 per share value.               On or about January 23, 2009, Appellant

received Lynch’s revised EPV valuation of $2.88 per share value.

               The deception continued during the month of February

2009.     On February 6, 2009, Appellant received an email from

Michael    Feldman,        MICG’s      Chief      Financial     Officer,        in     which

Feldman disclosed that an independent auditor was concerned that

Appellant was selling shares for less than the $2.88 valuation.

                                              7
Nonetheless,       on   February     25,        2009,    Appellant      brokered      the

above-referenced deal to six investors for EPV stock at $1.15

per share.

            In     2009,    FINRA   opened       an     investigation       into    MICG,

Appellant, and the valuations within the Venture Fund holdings.

Meanwhile, EPV filed for bankruptcy in February 2010.                              In May

2010,    FINRA     forced   MICG    to   close        its   doors,    and    Appellant

surrendered his broker’s license.

            In February 2011, Appellant filed for bankruptcy under

Chapter 7 of the United States Bankruptcy Code.                             During his

bankruptcy proceedings, Appellant failed to disclose $5,800 in

income and approximately $21,100 in losses that he had incurred

while gambling.

            Ultimately,       in    October      2012,      Appellant      was   charged

with conspiracy to commit mail and wire fraud, multiple counts

of mail and wire fraud, and lying in a bankruptcy proceeding.

                                           B.

            At the jury trial held over four weeks in April and

May 2013, the district court frequently interrupted counsel and

questioned counsel’s tactics.                  For example, at one point the

district court asked Appellant’s counsel to clarify his line of

questioning.       But when Appellant’s counsel attempted to do so,

the     district    court    interrupted,         “No,      don’t    say    anything.”

                                           8
J.A. 2639. 2      Appellant’s counsel responded, “You asked me why,”

and the district court responded, “I did, and I made a mistake.”

Id.       On    another     occasion,   the   district       court    criticized

Appellant’s       counsel    for   developing     a    sequential      timeline.

Shortly     thereafter,      however,   the   district       court    reproached

Appellant’s counsel for proceeding in a non-sequential manner,

asserting, “Could we start trying to go in order?                     We’re now

switching      back   and   forth. . . .    So,   if   you   can,    can   you   go

forward so that we can follow chronologically?”                     Id. at 3012.

Although the Government voiced its concerns at one point with

regard to the district court’s conduct, 3 Appellant never timely

objected to any of the district court’s comments, questions, or

disruptions.

               After deliberating for over two and a half days, the

jury found Appellant guilty of one count of conspiracy to commit

mail and wire fraud, four counts of wire fraud, five counts of

      2Citations to the “J.A.” refer to the Joint Appendix filed
by the parties in this appeal.
      3After the district court repeatedly questioned a witness,
the Government, outside the presence of the witness, explained
“given the Court’s comments and concerns about [the witness],”
it “want[ed] to be certain that the record is clear that we will
raise these and object to those concerns when we feel they’re
appropriate and raise it during cross-examination.”   J.A. 2705.
The Government explained that it was protecting the record and
that it was “bring[ing] this up now in terms of the Court’s
concerns and the Court’s questions of [the witness].” Id.

                                        9
mail       fraud,   and   seven    counts      of    money-laundering; 4          found

Appellant not guilty of one count of wire fraud and two counts

of   money-laundering;      and    could      not   reach   a   verdict      on   three

counts of wire fraud and two counts of fraudulent oaths in a

bankruptcy proceeding.

                                         C.

              At    sentencing,    the     district     court     --    in    staunch

disagreement with both parties -- stated numerous times that it

viewed the Guidelines as mandatory and that its discretion was

restricted to a sentence that fit within the range set forth in

the Guidelines.        For example, the district court opined (1) that

the Guidelines were “no longer advisory,” J.A. 3645; (2) “It’s

all where do you fit [in the Guidelines],” id.; and (3) “I will

follow the Guidelines only because I have to.                          I find that

they’re not discretionary, they’re mandatory,” id. at 3646.

              In light of these comments, both parties reminded the

district court that the Guidelines are advisory.                        Appellant’s

counsel pointed out that the Guidelines were but one factor for

the district court to consider and that the district court had

“significant discretion . . . to depart significantly from the

[G]uidelines.”        J.A. 3654.     Likewise, the Government noted that

       4
       On September 11, 2013, the district court granted a motion
for judgment of acquittal on one money-laundering count.

                                         10
the   Guidelines      were    only    one    factor    to    consider,   see    id.

at 3700, and that the “[G]uidelines are absolutely advisory,”

id. at 3729.       Ultimately, the district court determined that the

Guidelines       range   for        Appellant    was        135-168    months   of

imprisonment and sentenced him to 140 months.

            Appellant now challenges his convictions and sentence,

asserting    a    multitude    of    errors.     However,       only   two   issues

warrant extended discussion on appeal. 5              First, Appellant alleges

that the district court’s interruptions and courtroom management

style deprived him of a fair trial.              Second, Appellant contends

that the district court erred when it treated the Guidelines as

mandatory.       We address each challenge in turn.

                                        II.

                                        A.

                             Judicial Interference

                                        1.

            We review the alleged judicial interference for plain

error because Appellant neglected to raise a timely objection at

trial.    See United States v. Smith, 452 F.3d 323, 330-31 (4th

Cir. 2006); United States v. Godwin, 272 F.3d 659, 673 (4th Cir.

      5For instance, Appellant argues that the evidence presented
at trial was insufficient to support his convictions for
conspiracy, wire fraud, and mail fraud.        We find that the
evidence was clearly sufficient, and thus do not address this
contention at length.

                                        11
2001).     Under this standard, we review the record for plain

error that affects substantial rights, such that “the error must

have been prejudicial: It must have affected the outcome of the

district court proceedings.”           United States v. Olano, 507 U.S.

725, 734 (1993).         And “we may not intervene unless the judge’s

comments    were    so   prejudicial    as     to    deny    the    defendant[]   an

opportunity for a fair and impartial trial.”                  Smith, 452 F.3d at

331 (internal quotation marks omitted).                 Furthermore, Appellant

--   not   the   Government   --   must      show    “that    the    jury   actually

convicted [him] based upon the trial error.”                   Godwin, 272 F.3d

at 680 (internal quotation marks omitted).

                                       2.

            Appellant      contends     the     district       court’s      improper

interference with his trial deprived him of a fair trial.                         We

agree that the district court crossed the line and was in error.

We disagree, however, that the conduct of the trial deprived

Appellant of a fair trial.

            Under    the   Federal     Rules    of    Evidence,      “[t]he   court

should exercise reasonable control over the mode and order of

examining witnesses and presenting evidence so as to: (1) make

those procedures effective for determining the truth; (2) avoid

wasting time; and (3) protect witnesses from harassment or undue

embarrassment.”      Fed. R. Evid. 611(a).           “The court may examine a

witness regardless of who calls the witness.”                       Fed. R. Evid.

                                       12
614(b).      “A party may object to the court’s calling or examining

a witness either at that time or at the next opportunity when

the jury is not present.”          Fed. R. Evid. 614(c).

             Appellant    argues     that      the   district   court’s    general

interference in the trial -- which included examining witnesses,

interrupting             counsel,              and         controlling           the

presentations -- deprived him of a fair trial, and but for this

interference,     he     would    not     have     been   convicted.      However,

Appellant did not object to the district court’s interference.

Although counsel may be reticent to object to such interference

by the court, failing to do so creates a high bar for appellate

review.      See Smith, 452 F.3d at 330 (“[F]ail[ing] to bring even

a   single     alleged    error     [of    judicial       interference]    to    the

district      court’s    attention        during     trial   . . .     [does    not]

preserve[] this issue for appeal.”).                 As such, this error “must

have affected the outcome of the district court proceedings.”

Olano, 507 U.S. at 734.

                                          3.

             Here, we are once again 6 confronted with a case replete

with the district court’s ill-advised comments and interference.

     6 See, e.g., United States v. Cherry, 720 F.3d 161, 167-69
(4th Cir. 2013); United States v. Ecklin, 528 F. App’x 357, 363
(4th Cir. 2013); United States v. Garries, 452 F. App’x 304,
309-11 (4th Cir. 2011) (per curiam); Murphy v. United States,
383 F. App’x 326, 334 (4th Cir. 2010) (per curiam); United
(Continued)
                                          13
          First,    the   district   court   unnecessarily    interrupted

defense counsel’s presentation of the defense at trial.               For

instance, when defense counsel was questioning a witness about

an email, the district court intervened:

          District    court:   Stop.      Did   he   get   this
          e-mail?

          Defense counsel: No, sir.

          District court: Then you’re asking him about
          an e-mail he did not get, correct?

          Defense counsel: Correct.

          District court: Why?

          Defense counsel: Because it says this should
          be totally --

          District court: No, don’t say anything.

          Defense counsel: You asked me why.

          District court: I did, and I made a mistake.
          I’m   sorry,   [defense   counsel],  but   I
          appreciate it.     This e-mail doesn’t have
          anything to do with [the witness].

J.A. 2639.     On another occasion, the district court interjected:

          Defense counsel [to the witness]: And why is
          the date --

          District court: Stop.     Have we got a date
          when this all took place?

          Defense counsel: That’s what I’m asking him.

Id. at 2640.

States v. Dabney, 71 F. App’x 207, 210 (4th Cir. 2003) (per
curiam).

                                     14
          Considering     the     numerous   witnesses      and    exhibits

involved in the case, we understand the district court’s desire

to keep the trial focused.          At times, however, the district

court became so disruptive that it impermissibly interfered with

the manner in which Appellant sought to present his evidence.

          Defense   counsel  [to   Appellant  who   was
          testifying]: All right.   Now, at that point
          in 2005 what number of offices did you have?

          District court: Can we get on to somewhere
          near here, get up to 2007.

                . . . .

          I don’t mind doing history, and it’s very
          nice, and I understand that, but I’d like to
          get to the case.

          Defense counsel: Yes, sir.     The expansion
          plan is part of the case, Your Honor.

                . . . .

          Defense counsel [to the defendant]: Could
          you tell us about the expansion plan you had
          to other offices?

          Appellant: Yes.       We had expanded --

          District court: We’re in 2007 now?

          Defense   counsel:     We’re   moving   up   to   that
          point.

          District court: Well, get there. Excuse me.
          I want to get there, okay?    We know he had
          expansion plans; he’s talked about it.
          Let’s get to 2007.

J.A. 2952-53.   Shortly thereafter, the district court chastised

defense counsel for not creating a succinct timeline:

                                    15
          District court: Could we start trying to go
          in order?     We’re now switching back and
          forth.   You’re now in -- the last one was
          February, and then there was some talk about
          June. So, if you can, can you go forward so
          that we can follow chronologically?

          Defense counsel: I’m doing my best up here,
          Judge. I promise you I’ll try very hard.

          District court: I’m not trying to interrupt
          you, I’m just trying to have some --

          Defense counsel: Continuity.         I understand.

          District court: -- continuity.

Id. at 3012.

          At   another    point,   the   district   court   expressed   its

concern over the defense counsel’s litigation tactics, accusing

him of going outside the trial court procedure:

          Defense counsel      [to the      witness]: Sure.
          Could you look       for that     letter for me,
          please.

          District court: Right now don’t you think a
          discovery deposition is not in order?

          Defense   counsel:  I’m        not    conducting     a
          deposition, Your Honor.

          District court: Yes, you are.

                . . . .

          District court: You’ve asked him to go look
          for something, and that is discovery.   Now,
          I don’t mind you discovering, but do it in a
          deposition before the trial.

                . . . .

          Okay.   That’s the end of that.   All right.
          If he’s got it I’ll let you refer to it, but

                                    16
              we’re not going to have any more discovery
              in this case.

J.A. 1946-47.

              In sum, the district court’s repeated comments were

imprudent and poorly conveyed.                      Considering the breadth of the

district court’s actions, from questioning witnesses and counsel

to interrupting unnecessarily, we find that the district court

strayed      too   far     from    convention.             Ultimately,          we     find   the

district court’s actions were in error.

              Appellant must now overcome the second prong of the

plain error standard of review.                     For us to overturn Appellant’s

convictions, the error must be so prejudicial that it affected

Appellant’s        substantial         rights,      i.e.,       it   had    to       change   the

outcome of the trial.              See Olano, 507 U.S. at 734; Smith, 452

F.3d at 331.        For several reasons, we cannot conclude the error

has prejudiced Appellant.

                                               4.

              First,       “[q]uestions              of     trial          management         are

quintessentially the province of the district courts.”                                   Smith,

452   F.3d    at    332;   see     also       id.   at    333    (“[E]ven        a    stern   and

short-tempered           judge’s         ordinary           efforts         at         courtroom

administration         . . .      do    not    establish         bias      or    partiality.”

(internal     quotation        marks     omitted)         (alteration       in       original)).

The district court, pursuant to the Federal Rules of Evidence,

                                               17
has the obligation to control the courtroom to make the case

clear for the jury.     See generally Fed. R. Evid. 611(a); Fed. R.

Evid. 614.

          Here, the district court was engaged and active in

controlling   a   multi-week    trial     that    involved    highly    complex

factual issues, private equity valuations, hedge fund audits,

business management structuring, numerous witnesses, and several

hundred exhibits.      Cf. United States v. Parodi, 703 F.2d 768,

776 (4th Cir. 1983) (analyzing the entire record rather than a

few   isolated    comments).         Moreover,       the     district     court

interrupted   and     interrogated      both      defense    and     Government

witnesses.

          Additionally,    we    have     held,    “[i]t     is    particularly

vital that the trial judge also instruct the jurors that his

comments are not binding upon them, but are only personal views

expressed for the purpose of assisting them, and that they are

the sole judges of the evidence.”           United States v. Tello, 707

F.2d 85, 88 (4th Cir. 1983).       Here, the district court gave such

an instruction, reminding the jury at both the beginning and end

of the jury charge that the district court’s opinion or comments

were not important:

          Do not assume that I hold any opinion of the
          matters to which my questions may have
          related.  Whatever you may think my opinion
          is or may be is not to be considered by you.
          What I think is not important.      What you

                                     18
          think    is   important.       It’s    not   my
          province -- and I emphasize this -- to
          judge   the   guilt   or   innocence   of   the
          defendant   in   this   case.     It’s   yours.
          Remember at all times you’re at liberty to
          disregard any comment I have made during the
          trial, any comment on the evidence, but you
          can’t disregard the instructions.

                   . . . .

          Lastly, I want to emphasize this: Don’t
          interpret anything I have said or done
          during the trial as suggesting to you what I
          think your verdict should be.    That is not
          my responsibility.    Certainly, I have an
          opinion. I heard the same evidence you did.
          What my opinion is doesn’t count, should not
          be considered under any circumstances.   The
          verdict in this case is your duty and your
          responsibility, not someone else’s.   I want
          to emphasize that.

Supp. J.A. 7-8, 53. 7

          We recognize that one curative instruction at the end

of an extensive trial may not undo the district court’s actions

throughout   the    entire    trial,   but   we    are   also   cognizant    that

Appellant failed to alert the district court of what Appellant

now perceives as improper.

          Beyond that, the evidence supporting the convictions

in this case is overwhelming.           Testimony from 28 witnesses and

approximately 250 exhibits revealed that Appellant engaged in a

manipulation   of     EPV’s    valuation     and    deceived     investors     in

     7 Citations to the “Supp. J.A.” refer to the Supplemental
Joint Appendix filed by the parties in this appeal.

                                       19
continuation of his fraudulent scheme.                     On several occasions

prior to actually receiving a share price valuation from Lynch,

Appellant reported increases of EPV’s valuation to his brokers

and clients.        The evidence showed clearly that Appellant knew

the    valuations    were      excessive,     and    that    Appellant       was   the

driving force behind them.           Ultimately, the Government presented

ample testimony and evidence that Appellant engaged in a scheme

to do what was necessary to enrich himself and that he concealed

this fraud from his associates and investors, among others.

             In contrast, Appellant has not demonstrated, and we

cannot conclude, that the district court’s comments throughout

several weeks of trial impacted the trial’s outcome.                          This is

evident,    in   part,    by   the   jury’s    divided      verdict.         The   jury

independently and thoroughly deliberated for nearly three days

and found Appellant guilty on seventeen charges, not guilty on

three charges, and could not reach a verdict on five charges.

Such    a   split   verdict     illustrates     that       the    district    court’s

comments     were   not   so    prejudicial     as    to    warrant       overturning

Appellant’s      remaining      convictions.          See        United   States    v.

Cornell, 780 F.3d 616, 627 (4th Cir. 2015) (concluding that a

long deliberation provides “adequate assurance” that the jury

was not coerced, and a split verdict “reflect[s] a thoughtful

and    deliberate    jury”     (citations     omitted)      (internal       quotation

marks omitted)).

                                        20
             Therefore, although the district court’s interferences

in this case went beyond the pale, in light of the plain error

standard     of     review     and    the    overwhelming      evidence       against

Appellant, the district court’s conduct did not create such an

impartial     and     unfair       environment     as    to   affect     Appellant’s

substantial rights and undermine confidence in the convictions.

Accordingly, we must uphold the jury’s verdict.

                                            B.

                                      Sentencing

                                            1.

            We      review     a    criminal     sentence     for   an    abuse    of

discretion.       See Gall v. United States, 552 U.S. 38, 41 (2007)

(“[C]ourts    of     appeals       must   review   all    sentences      --   whether

inside, just outside, or significantly outside the Guidelines

range --     under    a   deferential       abuse-of-discretion        standard.”);

United States v. Dodd, 770 F.3d 306, 309 (4th Cir. 2014); United

States v. McManus, 734 F.3d 315, 317 (4th Cir. 2013).

            In reviewing Appellant’s sentence, we must

            first   ensure   that   the    district   court
            committed no significant procedural error,
            such as . . . treating the Guidelines range
            as mandatory . . . .       Assuming that the
            district   court’s   sentencing   decision   is
            procedurally   sound,   the   appellate   court
            should   then    consider    the    substantive
            reasonableness of the sentence imposed under
            an abuse-of-discretion standard.

Gall, 552 U.S. at 51 (emphasis supplied).

                                            21
              Upon a finding of a procedural error, the error shall

be subject to harmlessness review.               See United States v. Dowell,

771    F.3d     162,      175     (4th   Cir.     2014);      United     States    v.

Montes-Flores, 736 F.3d 357, 370 (4th Cir. 2013); United States

v.    Hargrove,     701    F.3d   156,   161    (4th   Cir.    2012)     (explaining

“procedural errors at sentencing . . . are routinely subject to

harmlessness review”) (alteration in original) (quoting Puckett

v. United States, 556 U.S. 129, 141 (2009)).                  The government has

the burden to show that the error was harmless such that it “did

not affect a defendant’s substantial rights.”                          Hargrove, 701

F.3d    at    161   (internal      quotation     marks     omitted).        We    have

concluded, “if the resulting sentence [is] not longer than that

to which [the defendant] would otherwise be subject,” then the

error is harmless.              Dowell, 771 F.3d at 175 (alterations in

original).

              When a district court has treated the Guidelines range

as    mandatory,     the    sentence     is    procedurally      unreasonable      and

subject to vacatur.          See McManus, 734 F.3d at 318; United States

v. Clay, 627 F.3d 959, 970 (4th Cir. 2010) (pursuant to Gall,

holding that the improper calculation of the advisory guideline

range constitutes significant procedural error); see also United

States v. Mendoza-Mendoza, 597 F.3d 212, 220 (4th Cir. 2010)

(remanding     when       “left   only   to    speculate    as    to    whether   the

                                          22
sentence . . . was imposed as a matter of obligation or as an

exercise of judgment”).

              If we determine a procedural error exists, a review

for    the    second     prong     --   substantive     reasonableness      --     is

unnecessary.         See United States v. Lewis, 606 F.3d 193, 201 (4th

Cir.   2010)     (“[I]f      a   sentencing     court   commits    a   significant

procedural sentencing error[,] . . . our practice is to vacate

and remand for resentencing before reviewing the sentence for

substantive reasonableness.”).

                                          2.

              Appellant      claims     that   the   district     court   erred    in

treating the Guidelines as mandatory, and that error denied him

a variant sentence below the applicable Guidelines range.                          We

agree.       The district court repeatedly considered the Guidelines

as mandatory.

              From     the   outset      of    the   sentencing     hearing,      the

district court lectured on its inability to have discretion:

              It appears to me that the guidelines have
              now become more than guides.   You know, the
              Supreme   Court  indicates  that   they  are
              advisory; however, I find that they’re more
              than advisory.   They’re reversible error if
              you don’t follow them or give a good reason
              why you’re not following them, so they’re no
              longer advisory.

J.A. 3645 (emphasis supplied).

                                          23
          Thereafter, the district court continued to reference

what it viewed as the mandatory nature of the Guidelines:

          •   “This hearing here is a great example of
              the problems that -- or the difference
              between   the   non-guidelines  and   the
              guidelines.     The non-guidelines were
              discretionary sentencing depending upon
              the person and the commission of the
              offense.     Now it doesn’t make any
              difference who the person is.          It
              doesn’t make any difference.     It’s all
              where do you fit.”    J.A. 3645 (emphasis
              supplied);

          •   “I will follow the guidelines only
              because I have to. I find that they’re
              not discretionary, they’re mandatory,
              although     people     think    they’re
              discretionary and although the courts
              have said they’re only advisory. But if
              you don’t follow them you have to give
              so many reasons why you don’t follow
              them. It’s tough. It really is tough.”
              J.A. 3646 (emphasis supplied);

          •   “I’m saying that what [the probation
              officer/Government are] putting forth
              today is merely an outline of what the
              guidelines mandate, if the guidelines
              are to be considered. And I’m going to
              consider them. I don’t agree with them.
              I think they’re absolutely ridiculous,
              but   I’m  going   to   consider   them.”
              J.A. 3656 (emphasis supplied); and

          •   “What I’m alluding back to is what
              occurred   prior    to   1986  when   the
              guidelines started to work.      If this
              case had come up then, what would the
              sentence have been and why? And what is
              happening now?     The sentences now are
              draconian. What are we accomplishing by
              these extremely excessive sentences that
              seem   to   be   dictated?”     J.A. 3699
              (emphasis supplied).
                               24
             Although the district court at times alluded to the

fact that it had discretion, at the same time it bemoaned that

such discretion was highly disfavored.                   See J.A. 3654 (“I have

some discretion but hardly.”); id. at 3655-56 (“I will try to

use   some    discretion,    apply   the     factors     in   Title    18,    Section

3553(a),        and     give         some         consideration          to       the

guidelines. . . .      I’m going to consider them.”).                  But see id.

at 3733      (recognizing     that     the       court    “has   to     take    into

consideration . . . the nature and circumstances of the . . .

defendant,” but at the same time the court failed to “see any

attributes      that   are     given    point-wise         in    the    sentencing

guidelines for doing good”).

             In the end, we cannot gloss over the district court’s

repeated misstatements as to how it perceived the Guidelines --

that is, as mandatory.          And “treating the Guidelines range as

mandatory” is a “significant procedural error.”                   Gall, 552 U.S.

at 51.       Even though the district court analyzed other factors

during the sentencing hearing, the record indicates that such

analysis did not save the error.                  Thus, we conclude that the

district court’s treatment of the Guidelines as mandatory is a

“significant procedural error.”            Id.

                                        25
                                           3.

            Having     concluded        that    the   district     court     committed

procedural error in treating the Guidelines as mandatory, we

turn now to considering whether the error was harmless.                            See,

e.g., Dowell, 771 F.3d at 175.

            A review of the record reveals that, had the district

court    considered    the    Guidelines        as    discretionary,       Appellant’s

sentence    may     have   been    lower.       The    district    court     expressed

concern that the Guidelines did not provide an assignment of

points for Appellant “doing good.”                    J.A. 3733.     Likewise, the

Government     recognized      that       the   district    court        “agreed   with

defense    counsel     that       the    [G]uidelines      had     not    taken    into

consideration        [Appellant’s]          good      character      and      positive

attributes.”        Appellee’s Br. 45.           Yet, the district court then

sentenced Appellant to 140 months of imprisonment.                           This was

near, but not at, the bottom of the Guidelines range of 135-168

months of imprisonment.

            Thus, in consideration of the district court’s flawed

understanding of the Guidelines, we cannot say with certainty

that Appellant’s sentence was “not longer than that to which

[Appellant] would otherwise be subject.”                    Dowell, 771 F.3d at

175     (internal     quotation         marks   omitted).          Accordingly,     we

conclude that the district court’s treatment of the Guidelines

                                           26
as   mandatory     affected        Appellant’s      substantial     rights.        See

Hargrove, 701 F.3d at 161.           The error was not harmless.

           Therefore,         we    are   obliged      to     vacate      Appellant’s

sentence and remand for resentencing.                 See McManus, 734 F.3d at

318; see Mendoza-Mendoza, 597 F.3d at 219 (deciding that when

“there is a serious possibility the district court felt it was

under an obligation to impose a Guidelines sentence, . . . the

prudent   course    is   to    remand     th[e]     case    to   ensure    that    [the

defendant’s]     sentence,         whatever    it     may    ultimately      be,    is

procedurally sound.”).             Finally, in light of finding that the

sentence was procedurally unreasonable, we do not review the

sentence for substantive reasonableness.                   See Lewis, 606 F.3d at

201; United States v. Abu Ali, 528 F.3d 210, 260-61 (4th Cir.

2008).

                                          C.

            Appellant also asserts that the district court erred

in calculating the restitution, forfeiture, and loss amount and

by imposing a two-level enhancement for obstruction of justice

based on Appellant’s perjurious testimony.                       Because we vacate

Appellant’s sentencing on other grounds, we need not reach these

issues, but leave those for the re-sentencing court to decide in

the first instance.           Additionally, we have considered each of

Appellant’s other claims on appeal, and conclude that they lack

merit.

                                          27
                                         D.

            Finally, we consider whether, in light of the district

court’s demeanor at trial and its statements during sentencing

regarding the nature of the Guidelines, it is necessary for a

different   judge    to    be     assigned    to     handle   this    matter   upon

resentencing.       In    doing    so,   we   look    to   the    following    three

factors:

            (1) [W]hether the original judge would
            reasonably be expected upon remand to have
            substantial difficulty in putting out of his
            or her mind previously expressed views or
            findings determined to be erroneous or based
            on   evidence    that  must    be   rejected;
            (2) whether reassignment is advisable to
            preserve the appearance of justice; and
            (3) whether reassignment would entail waste
            and duplication out of proportion to any
            gain   in   preserving  the   appearance   of
            fairness.

United States v. Nicholson, 611 F.3d 191, 217 (4th Cir. 2010)

(internal quotation marks omitted).

            With these considerations in mind, we are compelled to

remand for resentencing by a different judge.                    See United States

v. Guglielmi, 929 F.2d 1001, 1008 (4th Cir. 1991), abrogated by

United States v. Pridgen, 64 F.3d 147, 150 n.3 (4th Cir. 1995).

            In   the  rare   case   where  a    judge  has
            repeatedly adhered to an erroneous view
            after the error is called to his attention,
            reassignment   to   another   judge    may  be
            advisable in order to avoid “an exercise in
            futility [in which] the Court is merely
            marching up the hill only to march right
            down again.”

                                         28
Id. at 1007-08 (alteration in original) (quoting United States

v. Robin, 553 F.2d 8, 11 (2d Cir. 1977)).                         This is that rare

case.   The district court was informed by both parties that the

Guidelines are not mandatory, and it claimed to be aware that

the Supreme Court has so held.                      The Supreme Court’s holdings,

moreover, are not ambiguous: “The Guidelines are not only not

mandatory on sentencing courts; they are also not to be presumed

reasonable.”        Nelson v. United States, 555 U.S. 350, 352 (2009)

(per curiam).        We have been clear on this matter as well: “[A]

court commits statutory error if it treats the Guidelines as

mandatory,      rather       than        as    advisory.”         United     States     v.

Rodriguez, 433 F.3d 411, 414 (4th Cir. 2006).                          When a district

court   can    still     conclude        that    the    Guidelines     are   “no   longer

advisory,”     J.A.      3645,      in    the       face   of   such   straightforward

dictates      and      the     parties’          unanimous       objection      to      its

misstatement of law, remanding the case to that court with our

own   reminder      of   the     correct        law    would    most   likely      be   “an

exercise in futility,” Guglielmi, 929 F.2d at 1007.

              We recognize that the district court judge is keenly

aware of Appellant’s case, having managed the four-week trial

and subsequent sentencing.                    Accordingly, assigning a new judge

will “wipe[] the slate clean,” but in light of what transpired

in the original trial, “[w]e do not believe that any waste or

                                               29
duplication   would   be   out   of   proportion    to   the   appearance   of

fairness a reassignment will preserve.”            United States v. Lentz,

383 F.3d 191, 222 (4th Cir. 2004); see also Nicholson, 611 F.3d

at 218.

                                      III.

          For the foregoing reasons, we affirm the convictions

on all counts, vacate the sentence as procedurally unreasonable,

and remand with instructions for further proceedings consistent

with this opinion.

                                                          AFFIRMED IN PART,
                                                           VACATED IN PART,
                                                               AND REMANDED

                                       30
WYNN, Circuit Judge, concurring:

      I concur in the majority opinion, including its holding

that “although the district court’s interferences in this case

went beyond the pale, in light of the plain error standard of

review    and   the    overwhelming      evidence    against       Appellant,     the

district     court’s    conduct       did   not    . . .       affect    Appellant’s

substantial rights.”          Ante at 21.         I write separately to make

clear    that   in    our   role   as    judges,    we    must    avoid    even   the

appearance of improper interference and excessive interruptions

of court proceedings.

      Here, there was much more than an appearance of improper

interference.        At its core, such conduct tends to undermine the

public’s confidence in the integrity of the judiciary.                     But more

importantly,     such       conduct     challenges       the    fairness    of    the

proceeding.

      In United States v. Cherry, for example, we noted that the

judge’s remarks about the defendant’s criminal history prior to

a poll of the jury may have influenced the jurors, and we found

those comments improper and in error.                720 F.3d 161, 167 (4th

Cir. 2013).     But in light of the “overwhelming” evidence and the

plain error standard, we concluded that the comments, though

prejudicial, ultimately did not affect the outcome.                     Id. at 168-

69.     Just a day later, in United States v. Ecklin, we again

recognized      that    the     judge       had    engaged       in     “problematic
questioning” that “undermine[d] the substance and credibility of

[the defendants’] testimonies.”           528 F. App’x 357, 363-64 (4th

Cir.    2013).    We    stated     that    “the       court’s    skepticism    or

disbelief” of the defendants were “sentiments that should not

have been expressed to the jury.”              Id. at 364.       Again, however,

we were constrained by plain error review.              Id. at 365.

       It is well accepted that we, as judges, “must maintain such

a demeanor that ‘every one shall recognize that what is said

from the bench is the cool and well-balanced utterance of an

impartial    judge,    and   has   in     it    naught      of   the   heat   and

partisanship of the advocate.’”            United States v. Godwin, 272

F.3d 659, 677 (4th Cir. 2001) (quoting Wallace v. United States,

281 F.2d 656, 665 (4th Cir. 1960)).                   In this matter, as in

Ecklin, the judge’s “problematic questioning” and impermissible

interferences constituted “sentiments that should not have been

expressed to the jury.”          528 F. App’x at 364.             And while the

judge’s   problematic    “interference”         may   not   have    changed   the

outcome here, it was, no doubt, plainly imprudent.                      At some

point, repeated injudicious conduct must be recognized by this

Court as a compelling basis for finding plain error.

                                     32