Court Opinion

ID: 804086
Source: CourtListenerOpinion
Date Created: 2012-07-11 16:29:08+00
Date Added: 2024-06-11T18:00:10.823128
License: Public Domain

NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                                _____________

                                    No. 11-3175
                                   _____________

                          UNITED STATES OF AMERICA

                                          v.

                                 RONALD ALLEN,
                                                       Appellant
                                 _______________

            APPEAL FROM THE UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF NEW JERSEY
                  (D.C. Crim. Action No. 1-09-cr-00892-001)
                 District Judge: Honorable Jerome B. Simandle
                               _______________

                     Submitted Under Third Circuit LAR 34.1(a)
                                  April 10, 2012
                                _______________

    Before: HARDIMAN, GREENAWAY, JR., and GREENBERG, Circuit Judges.

                            (Opinion Filed: July 11, 2012)
                                 _______________

                                     OPINION
                                 ________________

GREENAWAY, JR., Circuit Judge.

      Ronald Allen (“Allen”) appeals the District Court‟s July 27, 2011 Judgment and

Conviction, sentencing him to a term of seventy months of imprisonment. Allen was
convicted of conspiracy to commit mail and wire fraud. For the following reasons, we

will affirm the District Court‟s Order.

                                  I.      BACKGROUND

       We write primarily for the benefit of the parties and shall recount only the

essential facts. Allen served as the owner and president of Universal Pacific Insurance

Company (“UPIC”), which was formed on the Fijian island of Rotuma. UPIC had no

employees, no claims processing department, and no licenses to do business in the United

States. The Company also had limited funds and could not pay most claims.

       The fraudulent scheme involved selling insurance to unsuspecting businesses with

the inducement that policy costs were 25-30% below market rate.1 Allen‟s co-

conspirator, Gilbert Morgan (“Morgan”)2, would sell and issue the policies, which bore

Allen‟s signature. Morgan kept a percentage of the premiums and would wire the

remainder of the money to RRG Business Development Corporation (“RRG”), one of

Allen‟s other companies. Over the course of the scheme, Morgan forwarded

approximately $366,918.93 to Allen‟s RRG account.

       Allen and Morgan devised other ways to sell the fraudulent insurance, and in June

2004, Allen authorized Morgan to “bind” commercial liability insurance policies from

1
  Morgan‟s clients were largely bars, nightclubs, and strip clubs, who needed liability
insurance to protect against alcohol related injuries and altercations. (Appellee‟s Br. at
4.)
2
  Morgan was a Texas insurance broker, who had previously engaged in fraudulent
insurance sales. He specialized in providing insurance policies to night clubs and strip
clubs.

                                             2
Prime Insurance Syndicate (“Prime”), a legitimate insurer that Allen claimed to be in the

process of purchasing.3 Allen never purchased Prime and Prime never authorized any

broker affiliated with Allen to bind its policies. As a result, Prime issued a cease and

desist letter to Morgan regarding the illegal binding activities. Allen directed Morgan to

ignore the cease and desist letter and continue to bind insurance policies. Although

Morgan initially heeded Allen‟s directive, he later switched the insureds from Prime to

UPIC.

        Allen and Morgan also used other brokers to market UPIC policies to their clients.

Those brokers would receive a share of the premiums and then forward the remainder to

Morgan, who took his share and wired the balance to Allen‟s RRG account.

        Allen and Morgan worked together through December 2004, when the last UPIC

policy was sold.4 At that point, Allen and Morgan ceased working together because of

mutual distrust.

        In December 2007, Allen was interviewed by FBI Special Agent Samuel Mayrose.

During the interview, Allen conceded that he was President of UPIC and acknowledged

that UPIC was not licensed to do business in the United States. Allen stated that he did

3
  Certain brokers are granted the ability to “bind” an insurance company. The resulting
“binder” is evidence that insurance coverage is going to be issued, and binds the
company to issuing a policy.
4
  Allen‟s role in the conspiracy was reportedly short-lived, although a large number of
businesses purchased UPIC policies and paid tens of thousands of dollars in premiums.
When business insureds attempted to contact UPIC at its Belize, Mexico or California
addresses, their claims were ignored. Those businesses were forced to hire their own
attorneys, forced to pay out-of-pocket claims, or, forced to close their offices.

                                             3
not know much about UPIC‟s operations and that Morgan sold UPIC policies for

nightclubs. Allen did admit that he received money from Morgan as insurance

commissions and claimed that he did not personally follow up on policyholder inquiries,

but instead referred them to Morgan.

       A federal grand jury returned a one-count Indictment against Allen on December

3, 2009, charging him with conspiracy to commit mail and wire fraud, contrary to 18

U.S.C. § 1341 and § 1343, and in violation of 18 U.S.C. § 1349. Allen filed an omnibus

pre-trial motion, requesting that the Indictment be dismissed because he was not involved

in the conspiracy during the five-year statute of limitations period. The Government

opposed the motion and stated that it would prove at trial that additional UPIC policies

were sold by Allen within the limitations period.

       The District Court denied Allen‟s motion seeking to dismiss the Indictment.

       Jury trial commenced on December 3, 2010. Allen‟s theory of defense throughout

the trial was that he only agreed with Morgan to sell fake insurance to businesses that

were aware of the illegitimacy of the policies that they were purchasing. The jury

rejected this theory and returned a guilty verdict against Allen. He was sentenced to 70

months of imprisonment, the bottom of the sentencing Guidelines range, and ordered to

pay restitution in the amount of $692,736.28. Allen then filed this appeal.

              II.    JURISDICTION AND STANDARD OF REVIEW

       The District Court had jurisdiction, pursuant to 18 U.S.C. § 3231. We have

jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a).

                                             4
       An appellate court reviews de novo a district court‟s interpretation and application

of the statute of limitations. United States v. Harriston, III, 329 F.3d 779 (11th Cir.

2003). In most cases, we review a district court‟s refusal to give a requested jury

instruction under an abuse of discretion standard. United States v. Gross, 961 F.2d 1097,

1101 (3d Cir. 1992), cert. denied, 506 U.S. 965 (1992). However, a district court‟s

refusal to give a jury instruction on a defendant‟s theory of his defense is reviewed de

novo where the defendant objects to the district court‟s refusal. United States v. Stewart,

185 F.3d 112, 124 (3d Cir. 1999).

       If a defendant does not object to the jury instruction at trial, we review the District

Court‟s instructions to the jury for plain error. United States v. Antico, 275 F.3d 245,

265 (3d Cir. 2001); see also United States v. Lee, 612 F.3d 170, 191 (3d Cir. 2010)

(unraised challenges to the jury instructions are reviewed for plain error). “We review a

district court‟s determination that the trial evidence justified the instruction for abuse of

discretion, and view the evidence and the inferences drawn therefrom in the light most

favorable to the [G]overnment.” United States v. Stadtmauer, 620 F.3d 238, 252 (3d Cir.

2010) (internal citations omitted).

       Review of a verdict for sufficiency of the evidence is plenary. United States v.

Mussare, 405 F.3d 161, 166 (3d Cir. 2005). We reverse a jury verdict for insufficiency of

the evidence “only when the record contains no evidence, regardless of how it is

weighted, from which the jury could find guilt beyond a reasonable doubt.” Id.

                                               5
                                    III.   ANALYSIS

       Allen raises six arguments related to his conviction, - - 1) that the charges against

him were barred by the Statute of Limitations (“SOL”); 2) that there was insufficient

evidence of his membership in the conspiracy during the SOL period, which requires a

reversal of his guilty verdict; 3) that the District Court committed plain error by not

instructing the jury sua sponte regarding unanimity as to an underlying factual issue; 4)

that the District Court committed structural error when it gave a jury instruction

regarding multiple conspiracies and containing his theory of defense; 5) that the District

Court abused its discretion by instructing the jury on willful blindness, and that the

evidence did not support the instruction; and 6) that he is entitled to a new trial based on

ineffective assistance of counsel. These issues will be addressed seriatim below.

       Statute of Limitations

       Allen contends that the charges against him were barred by the SOL and the

District Court erred by not dismissing the indictment on this basis. The December 3,

2009 indictment alleges that Allen‟s conspiracy began in March 2004 and ended “in or

about December 2004”. (Supp. App., Vol. I, 100.) The SOL for conspiracy to commit

mail or wire fraud is five years, pursuant to 18 U.S.C. § 1349. Allen argues that this case

is untimely because “the conspiracy was concluded and perfected . . . on November 24,

2004, when the last policy was bought and sold by UPIC, [] the moneys [] disbursed by

coconspirators was not in furtherance of the conspiracy, but the conspiracy in fact was

completed in total upon the last sale of the UPIC policy, which was prior to December

                                              6
3rd, about ten days earlier.” (Id. at 98.) Although Allen received a wire transfer from

Morgan on December 7, 2004, he contends that “the conspiracy was not about

disbursement of moneys between the coconspirators but was about selling those policies

to the victims of these policies and that the last act in this Indictment is named as

November 24, 2004.” (Id. at 100.)

        The Government argues that the conspiracy was about collecting money, and

claims that Allen‟s participation in the conspiracy extended beyond December 3, 2004.

In addition, the Government stated that it would prove at trial that additional UPIC

policies were sold within the limitations period. In addition, Morgan testified at trial that

five businesses had insurance coverage that became effective after December 3, 2004.

       We have held that:

       1) resignation from the enterprise does not, in and of itself, constitute
       withdrawal from a conspiracy as a matter of law; (2) total severing of ties
       with the enterprise may constitute withdrawal from the conspiracy;
       however (3) even if the defendant completely severs his or her ties with the
       enterprise, the defendant still may remain a part of the conspiracy if he or
       she continues to do acts in furtherance of the conspiracy and continues to
       receive benefits from the conspiracy‟s operations.

United States v. Antar, 53 F.3d 568, 583 (3d Cir. 1995).

       Here, there was sufficient evidence of activity that falls within the SOL and

activity in furtherance of the conspiracy after December 3, 2004 that Allen‟s argument

must fail. The District Court committed no error on this point.

       On December 3, 2010, the District Court denied Allen‟s omnibus motion and the

jury trial began.

                                              7
       Evidence of Allen’s Participation in the Conspiracy during the SOL Period

       The Government satisfies the requirements of the statute of limitations for a non-

overt act conspiracy if it alleges and proves that the conspiracy continued into the

limitations period. Harriston, 329 F.3d at 783. The Government only has to show, either

directly or circumstantially, that a conspiracy existed; that the defendant knew of the

conspiracy; and that with knowledge, the defendant became a part of the conspiracy. Id.

A conspiracy is deemed to have continued as long as the purposes of the conspiracy have

neither been abandoned nor accomplished and the defendant has not made an affirmative

showing that the conspiracy has terminated. Id. A defendant can overcome this

presumption of continued participation only by showing that he affirmatively withdrew

from the conspiracy or that the final act in furtherance of the conspiracy has occurred. Id.

       During trial, Allen requested that the District Court instruct the jury regarding the

duration of the conspiracy and his theory that he had withdrawn from the conspiracy

before the SOL had run. In its instructions, the District Court discussed both the

conspiracy and Allen‟s theory of withdrawal from the conspiracy, as Allen had requested.

Allen did not object to the jury instruction before the jury retired for deliberations, but

later claimed that the District Court should have sua sponte given the jury an instruction

that “the dividing up of the money gained in a conspiracy, after the conspiracy is over,

does not extend the ending date of the conspiracy.” (Appellant Br. at 11.) While Allen

concedes that the District Court properly instructed the jury on the statute of limitations

                                              8
for the conspiracy, he now argues that the District Court committed error by not sua

sponte giving the above jury instruction.

       When a defendant does not raise objections to the jury instructions before the jury

begins deliberations, he bears the burden of proving plain error. See Lee, 612 F.3d at

191. In order to prove plain error, a defendant must show: “(1) there is an error; (2) the

error is clear or obvious, rather than subject to reasonable dispute; (3) the error affected

the appellant‟s substantial rights, which in the ordinary case means it affected the

outcome of the district court proceedings; and (4) the error seriously affect[s] the fairness,

integrity or public reputation of judicial proceedings.” United States v. Marcus, 130 S.

Ct. 2159, 2164 (2010). (Internal citations and quotations omitted.) However, Fed. R.

Crim. Pro. 52(B) authorizes no remedy unless the error affects substantial rights. If the

error is found to be plain and to affect substantial rights, the court of appeals “has

authority to order correction, but is not required to do so.” United States v. Olano, 507

U.S. 725, 735 (1993).

       Allen has not satisfied the requisites of plain error. The facts necessary to argue

that the District Court erred when it issued jury instructions related to the conspiracy are

not present here. The District Court instructed the jury that the Government bore the

burden of proving that Allen committed the crime charged within the five-year SOL

period, and that in order to find Allen guilty, the jury would have to also find that the

conspiracy extended beyond December 3, 2004. The District Court also pointed out that

in order for the jury to find that Allen withdrew from the conspiracy, they must find that

                                              9
he “must have taken some clear, definite, and affirmative action to terminate his

participation, to abandon the illegal objective, and to disassociate himself from the

agreement.” (Supp. App., Vol. II, 758-59.)

       Although Allen claims that he withdrew from the conspiracy before December 3,

2004, five years before the government obtained the Indictment charged in the

conspiracy, we find that Allen did not affirmatively withdraw from the conspiracy prior

to the SOL. There was testimony from one of the FBI Special Agents that RRG received

wire transfers for funds from March 23, 2004 to December 7, 2004. “[I]n order to

establish a prima facie case, he [the defendant] must demonstrate either that he gave

notice to his co-conspirators that he disavows the purpose of the conspiracy or that he did

acts inconsistent with the object of the conspiracy.” Antar, 53 F.3d at 583.

       Allen did not demonstrate that he had given notice to Morgan or any other co-

conspirators that he would no longer be involved in the conspiracy. By accepting money

from the proceeds of the conspiracy, Allen acted consistently with the intent of the

conspiracy. The Indictment charges Allen with, among other crimes, “collecting

premiums as payment for such false and fraudulent policies, and using such premium

payments for their own personal use.” (Emphasis added.) The proofs at trial support this

statement in the indictment. We find that Allen was still a participant in the conspiracy

during the SOL period.

                                             10
       Unanimity Jury Instruction

       Allen argues that the District Court committed plain error by not sua sponte

instructing the jury regarding unanimity as to an underlying factual issue. Allen wanted

the District Court to direct the jury that it needed to unanimously agree as to whether he

and Morgan agreed to use UPIC or Prime to defraud insureds. Allen argues that both the

Indictment and the Government‟s proof presented at trial describe two separate

conspiracies, UPIC and Prime, and contends that the jury needed to unanimously agree

on which conspiracy had been proven. We disagree.

       The Indictment describes only one conspiracy between Allen and Morgan. The

conspiracy is described as “a scheme and artifice to defraud Insureds, and to obtain

money and property, by means of false and fraudulent pretenses, representations and

promises,” and lists the methodologies of the crime, including the agreement to sell and

the sale of “false and fraudulent UPIC and Prime policies.” (Supp. App., Vol. 1, 2-4.) In

addition, the District Court instructed the jury as to the necessity for a unanimous verdict,

stating that “you must all find” that the government proved that Allen engaged in a

conspiracy with Morgan. (Supp. App., Vol. 1, 196.) This instruction complies with the

law of this Circuit.

       While it is true that a defendant in a federal criminal trial has a constitutional right

to a unanimous verdict, United States v. Yeaman, 194 F.3d 442, 453 (3d Cir. 1999), it

does not mean that a defendant has a right to insist on an instruction requiring unanimous

agreement on the means by which each element is satisfied. See id. The District Court

                                              11
did not err. There is no requirement that the Court, sua sponte, render a jury instruction

regarding unanimity as to the means by which he engaged in the conspiracy.

       Structural Error

       Allen next argues that the District Court committed structural error when it gave a

jury instruction regarding multiple conspiracies and containing his theory of defense,

“mistakenly reliev[ing] the jury of the duty of finding an essential element of the

offense.” Appellant‟s Br. 12-17.

       The Supreme Court of the United States has concluded “that various forms of

instructional error are not structural but instead trial errors subject to harmless-error

review.” Hedgpeth v. Pulido, 555 U.S. 57, 60-61 (2008) (internal citations omitted).

Further, “Neder [v. United States, 527 U.S. 1 (1999)], makes [it] clear that harmless-error

analysis applies to instructional errors so long as the error at issue does not categorically

„vitiat[e] all the jury‟s findings.‟” (Internal quotations and citations omitted). “An

instructional error arising in the context of multiple theories of guilt no more vitiates all

the jury‟s findings than does omission or misstatement of an element of the offense when

only one theory is submitted.” Hedgpeth, 555 U.S. at 61.

       Allen requested the jury instruction on multiple conspiracies. We have held that

we will not entertain a defendant‟s challenge to jury instructions that were requested by

the defendant. See United States v. Ozcelik, 527 F.3d 88, 97 n.6 (3d Cir. 2008). Under

the „invited error doctrine,‟ because Allen requested the jury instruction, he waived his

right to raise this issue on appeal. Id. (“Because Ozcelik made a joint request in favor of

                                              12
the very instructions he now challenges, he waived his right to raise these instructional

issues on appeal under the invited error doctrine.”) There is no error here.

       Willful Blindness Jury Instruction

       Allen argues that the District Court abused its discretion by instructing the jury on

willful blindness, because the evidence did not support the instruction.

       A willful blindness instruction is often described as sounding in deliberate
       ignorance. Such instructions must be tailored . . . to avoid the implication
       that a defendant may be convicted simply because he or she should have
       known of facts of which he or she was unaware. Willful blindness is not to
       be equated with negligence or a lack of due care, for willful blindness is a
       subjective state of mind that is deemed to satisfy a scienter requirement of
       knowledge. The instruction must make clear that the defendant himself
       was subjectively aware of the high probability of the fact in question, and
       not merely that a reasonable man would have been aware of the probability.

United States v. Wert-Ruiz, 228 F.3d 250, 255 (3d Cir. 2000) (internal citations and

quotations omitted).

       Allen insists that there was no evidence presented at trial indicating that he denied

knowing that the object of the conspiracy was to sell UPIC and Prime insurance to

business owners to defraud them. However, at Allen‟s trial, the District Court placed an

oral opinion on the record, addressing the willful blindness charge. The District Court

stated that Allen “has taken the position that while there may be proof that he and

Morgan conspired to issue false insurance certificates requested by the insureds and, thus,

defrauding landlords or regulatory bodies that required these businesses to be covered by

insurance, that he did not become aware that Morgan, Petrillo, and others were

                                             13
defrauding the insureds. This defense, thus, denies knowledge of the object of the

charged conspiracy.” Supp. App. Vol. II, 715-16. We agree.

       We also agree with the District Court‟s conclusion that “there is ample evidence

that defendant Allen took deliberate steps to not confirm the facts of defrauding the

insureds that were otherwise obvious to him.” Id. at 716. Therefore, we find that the

District Court did not abuse its discretion in instructing the jury on willful blindness.

       Ineffective Assistance of Counsel

       Finally, Allen argues that he is entitled to a new trial based on ineffective

assistance of counsel. “Under Strickland v. Washington, 466 U.S. 668 (1984), to

establish ineffective assistance of counsel a criminal defendant must show that counsel‟s

conduct was deficient (i.e. „outside the wide range of professionally competent

assistance‟)”, id. at 690, and that the deficiency resulted in prejudice to the defense (i.e.,

“there is a reasonable probability that, but for counsel‟s unprofessional errors, the result

of the proceeding would have been different”). Id. at 694.

       This Court has repeatedly held that “the proper avenue for pursuing such claims is

through a collateral proceeding in which the factual basis for the claim may be

developed.” United States v. Olfano, 503 F.3d 240, 246 (3d Cir. 2007); United States v.

Theodoropoulos, 866 F.2d 587, 598 (3d Cir. 1989). “There is, however, a narrow

exception to the rule that defendants cannot attack the efficacy of their counsel on direct

appeal. Where the record is sufficient to allow determination of ineffective assistance of

counsel, an evidentiary hearing to develop the facts is not needed.” United States v.

                                              14
Headley, 923 F.2d 1079, 1083 (3d Cir. 1991); see also Government of Virgin Islands v.

Zepp, 748 F.2d 125, 133 (3d Cir. 1984) (defendant‟s counsel was ineffective because of a

conflict of interest); Theodoropoulos, 866 F.2d at 598 (no direct review “unless the

record sufficiently establishes a basis for our review”). A sufficient record would

include Allen‟s disagreement with his trial counsel regarding his court strategy and

factual evidence on the prejudice Allen suffered as a result of his trial counsel‟s actions.

See e.g., Olfano, 503 F.3d at 246-47 (“without a record . . . the court could not determine

whether counsel failed to effectively represent his client. Nor is it clear that Olfano was

prejudiced by counsel‟s performance.)

       Here, Allen‟s counsel represented him throughout trial and sentencing. The record

is not sufficient to allow us to determine whether there was ineffective assistance of

counsel. Therefore, we conclude that Allen‟s argument regarding ineffective assistance

of counsel should be addressed by the District Court if and when Allen seeks collateral

review.

                                  IV.    CONCLUSION

       For the above reasons, we affirm the July 27, 2011 Judgment and Conviction of

the District Court.

                                             15