United States v. Ellis E. Neder, Jr. , 268 F. App'x 887 ( 2008 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
MARCH 11, 2008
THOMAS K. KAHN
No. 07-12210
CLERK
Non-Argument Calendar
________________________
D. C. Docket No. 91-00175-CR-J-20-HTS
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ELLIS E. NEDER, JR.,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(March 11, 2008)
Before BIRCH, DUBINA and HULL, Circuit Judges.
PER CURIAM:
Ellis E. Neder, Jr. appeals the revocation of his supervised release
pursuant to 18 U.S.C. § 3583(e)(3) and his resulting sentence of nine months’
imprisonment and four years and three months of supervised release. After review,
we affirm.
I. BACKGROUND
In 1992, Neder, an attorney, was convicted on 73 counts connected to his
real estate development, including, inter alia, bank fraud, mail fraud, wire fraud
and conspiracy to defraud a financial institution. See United States v. Neder, 197
F.3d 1122, 1124-27 (11th Cir. 1999) (discussing Neder’s underlying convictions
involving over $25 million in fraud in fraudulent real estate deals). Neder was
sentenced to twelve years and three months’ imprisonment, five years’ supervised
release and restitution in the amount of $25,045,996.
As conditions of supervision, Neder was (1) forbidden to associate with a
convicted felon; (2) ordered to pay the court-ordered restitution upon his release;
(3) prohibited from incurring new credit charges, opening new lines of credit or
making major purchases without approval from the Probation Office unless he was
in compliance with the payment schedule; (4) ordered to provide the Probation
Office with requested financial information; and (5) prohibited from engaging in
employment relating to real estate development. Neder’s supervised release began
2
on October 11, 2001, and was scheduled to end on October 11, 2006.
On August 2, 2006, the Probation Office filed a petition for a warrant
alleging that Neder had violated his supervised release by failing to make
restitution payments to the best of his ability or to make restitution in full (“Charge
1”) and by obtaining new credit without prior approval (“Charge 2”). After an
arrest warrant was issued, the district court appointed counsel for Neder and set the
revocation hearing for September 19, 2006. The hearing was continued four times,
three of which were at Neder’s request.
On October 6, 2006, the Probation Office filed a superseding petition that
added charges that Neder had associated with a known convicted felon named
William Lilly (“Charge 3”) and had been involved in an attempted real estate
transaction (“Charge 4”).
On December 7, 2006, the Probation Office filed an amended petition that
dropped Charge 2, while retaining Charges 1, 3 and 4, and included new charges
that Neder had associated with a known convicted felon named Herb Gutpelet
(“Charge 5”) and had engaged in employment related to real estate development
involving San Marco Properties (“Charge 6”).1
1
Testimony at the revocation hearing established that Charge 5 involved Neder’s conduct
in 2002 and 2003 and that Charge 6 involved Neder’s conduct in March 2004. However, the
probation officer did not learn of the conduct until October 2006.
3
On March 28, 2007, the district court held a revocation hearing at which
witnesses testified. At the end of the testimony, the district court continued the
hearing to April 24 for closing arguments.
On April 17, 2007, the Probation Office filed a second amended petition that
added a new count charging Neder with engaging in employment related to real
estate development when, in January 2007, he contacted Charles Pickard to solicit
his contribution to a country club investment (“Charge 7”). The government also
moved to re-open the evidence for two additional witnesses. The district court
granted the government’s motion to re-open and held a second hearing on April 24
and 30, 2007. Over the course of the revocation hearings, the district court heard
testimony from eight witnesses and received numerous exhibits.
During the proceedings, Neder filed two motions to dismiss arguing that the
district court lacked jurisdiction over Charges 5, 6 and 7. The district court denied
Neder’s motions.
On May 3, 2007, the district court found that Neder had committed the
violations in Charges 1, 3, 4, 5, 6 and 7 and revoked Neder’s supervised release.
The district court found that Grade C was the highest violation, that Neder’s
original criminal history category was I, and that the guidelines range was three to
nine months’ imprisonment. After considering the advisory guidelines range and
4
the factors in 18 U.S.C. § 3553(a), the district court sentenced Neder to nine
months’ imprisonment, followed by four years and three months of supervised
release. The district court ordered Neder to make monthly minimum restitution
payments of $1,000, subject to change upon application by Neder or the
government. Neder filed this appeal.
II. DISCUSSION
A. District Court’s Jurisdiction
The original petition to revoke (Charge 1) and the superceding petition
(Charges 3 and 4) were filed before Neder’s supervised release term was scheduled
to expire on October 11, 2006. Thus, as a threshold issue, we conclude that the
district court had jurisdiction to revoke Neder’s supervised release on May 3, 2007
based on Charges 1, 3 and 4 filed before October 11, 2006. See United States v.
Bailey, 259 F.3d 1216, 1219 (10th Cir. 2001) (concluding that a district court has
jurisdiction to revoke a term of supervised release for a reasonable time after the
term expired if a summons was issued during the term); United States v. Jimenez-
Martinez, 179 F.3d 980, 981-82 (5th Cir. 1999) (same); United States v. Morales,
45 F.3d 693, 696-97 (2d Cir. 1995) (same); United States v. Barton, 26 F.3d 490,
491-92 (4th Cir. 1994) (same); United States v. Neville, 985 F.2d 992, 995-99 (9th
Cir. 1993) (same). Several circuits point out that immediate revocation of
5
supervised release would raise due process concerns. Barton, 26 F.3d at 492;
Neville, 985 F.2d at 996-97. “[I]n order to assure that late-term violators may have
their release revoked while ensuring that they receive adequate due process, the
district court’s jurisdiction must extend past the end of the supervisory term.”
Barton, 26 F.3d at 492.2
Further, any single Grade C violation can be the basis for revoking a term of
supervised release and imposing a term of imprisonment. See U.S.S.G.
§§ 7B1.3(a)(2) (permitting revocation “[u]pon a finding of a Grade C
violation . . . .”), 7B1.4(a) (setting out a range of imprisonment applicable upon
revocation). Charges 1, 3 and 4, each of which is a Grade C violation, see
U.S.S.G. § 7B1.1(a)(3)(B), therefore provide a sufficient basis for revocation and
the imposition of a sentence. Thus, we need not address the district court’s
jurisdiction over Charges 5, 6 and 7. See United States v. Brown, 656 F.2d 1204,
1207 (5th Cir. Sept. 1981) (providing that an appellate court need not address
2
In September 1994, after Neder was convicted, Congress enacted subsection (i) of
§ 3583 which now expressly states that the district court’s jurisdiction to revoke a term of
supervised release “extends beyond the expiration of the term of supervised release for any
period reasonably necessary for the adjudication of matters arising before its expiration if, before
its expiration, a warrant or summons has been issued on the basis of an allegation of such
violation.” 18 U.S.C. § 3583(i). We need not address the retroactivity of § 3583(i) because, like
every other circuit to address this question, we conclude that, even before enactment of
§ 3583(i), district courts retained jurisdiction to revoke supervised release for a reasonable time
after the scheduled end of the supervised release term if the revocation proceedings were
initiated within the supervised release term.
6
additional claims of error when the district court had an adequate basis for its
discretionary action).3
B. Charges 3 and 4 Relating to Beauclerc Bay Apartments4
Further, there was ample evidence to support the district court’s findings that
Neder associated with Lilly, a convicted felon (Charge 3), and engaged in
employment relating to real estate development (Charge 4). We review some of
the evidence.
After release from prison, Neder found contract work as a paralegal for
various attorneys, including Mark Tippins. Neder would search for and help set up
real estate deals that could be closed at Tippins’s firm. One witness referred to
Neder’s role as “bird-dogging” business for Tippins. More specifically, Neder
would locate real estate for sale, bring it to the attention of prospective buyers and
then act as a conduit between the prospective buyer and seller during negotiations.
Once a “handshake deal” was in place, attorney Tippins would step in to conduct
3
This Circuit has adopted as binding precedent all decisions of the former Fifth Circuit
handed down on or before September 30, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209
(11th Cir. 1981) (en banc).
4
We review a district court’s revocation of supervised release for an abuse of discretion.
United States v. Frazier, 26 F.3d 110, 112 (11th Cir. 1994). The district court’s findings of fact
with regard to violations of supervised release are binding unless clearly erroneous. United
States v. Almand, 992 F.2d 316, 318 (11th Cir. 1993).
7
the closing. Neder would then perform the paralegal work on the closing.5
In 2003, Neder, as part of his “bird-dogging” efforts, approached Bill Lilly,
a convicted felon whom Neder had met in prison. Lilly’s girlfriend, Valerie Kaan,
was a real estate developer. Both Lilly and Kaan were involved with J.W. Macara,
Inc., a real estate development company, and were looking for properties to
convert to condominiums.6 When Neder found property for sale with potential for
condominium development, Neder would bring it to Lilly and Kaan’s attention.
On behalf of Lilly, Kaan and J.W. Macara, Inc., Neder met with real estate
agent Kelly Lawhon four or five times looking for potential property. Lawhon
gave Neder information about the Beauclerc Bay Apartments, which the owner,
Jack Keiser, was offering for sale.7 Neder met with Mel Bryan, the owner of a
construction business, approximately three times to obtain an estimate to convert
the 106 units to condominiums. Neder also introduced Bryan to Bill Lilly, who
was acting as the principal for J.W. Macara, Inc.
5
Although Neder was not paid the proceeds of the real estate deal, Neder was paid for his
paralegal services relating to the real estate deal. In the case of condominium conversions,
Neder would perform paralegal services on both the sale of the apartments to the developer and
the closing for each individual condominium unit once it was converted.
6
Upon his release from prison, Neder initially asked the Probation Office if he could
reside with Kaan. Because Kaan was a real estate developer who lived with Bill Lilly, a
convicted felon, Neder’s request was denied.
7
In a follow-up meeting, Neder informed Lawhon that he had negotiated a contract on
Beauclerc Bay Apartments. A dispute arose between Lawhon and Neder about Lawhon’s
commission. Neder negotiated a settlement, which was paid by J.W. Macara, Inc.
8
Also on behalf of J.W. Macara, Inc., Neder met twice with Keiser’s attorney
and once with Keiser’s accountant to negotiate the terms of the sale of Beauclerc
Bay Apartments. According to Neder, J.W. Macara, Inc., planned to convert the
apartments to condominiums after the sale to the Blue Water Bay Condominiums.
The contract between Keiser and J.W. Macara, Inc. was signed in March 2003,
although the deal eventually fell through after a dispute arose about the legal
description of the property.
J.W. Macara, Inc. filed a lawsuit against Keiser over the Beauclerc Bay
Apartments deal. During a deposition in this civil suit, Neder testified that he was
involved in the formation of Blue Water Bay Condominiums, Inc., which was set
up to develop a piece of property. Neder admitted that he contacted Lilly and Kaan
about the Beauclerc Bay property because he knew they were interested in
condominium conversions. Lilly and Kaan expressed interest in the Beauclerc Bay
property, and Lilly came to Jacksonville to meet with Neder and Keiser to inspect
the property. Neder sent draft contracts to Lilly and Kaan, which he prepared in
his capacity as a paralegal.
In summary, the evidence indicates that Neder was actively associating with
Lilly and seeking to bring about a real estate development deal for the Beauclerc
Bay Apartments. For example, Neder contacted Lilly and Kaan because he knew
9
they were involved in condominium conversions and were interested in buying
properties in the Jacksonville area. After Neder made contact with Lilly, Lilly
traveled to Jacksonville and met with Neder and Keiser to examine the Beauclerc
Bay Apartments. Neder then facilitated a handshake deal between Lilly’s
company, J.W. Macara, Inc., and Keiser.
The condition prohibiting Neder from engaging in employment “related to
real estate development” does not merely restrict Neder from being a developer or
benefitting financially in a real estate development deal. Neder’s employment
need only “relate to” real estate development. Furthermore, Neder’s attempt to
cast himself as a mere paralegal working on a real estate closing is unpersuasive.
In addition to performing typical paralegal tasks, such as drafting closing
documents, Neder also actively generated his paralegal work by searching for real
estate with development potential, bringing it to the attention of a prospective
developer, and facilitating a deal between the seller and the prospective developer.
In the case of the Beauclerc Bay property, Neder’s activities included:
meeting with a real estate agent to scout prospective properties, including
Beauclerc Bay; obtaining an estimate from a construction company as to the cost
of a condominium conversion; and meeting with the seller’s accountant and
attorney to iron out the final terms of the handshake deal. There is also evidence
10
that Neder was involved in the formation of Blue Water Bay Condominiums, Inc.,
which was set up to develop that piece of property. Neder has shown no reversible
error in the district court’s finding that he committed the violations in Charges 3
and 4.
C. Charge 1 for Failure to Pay Restitution
We also reject Neder’s claims that the district court erred in finding that he
failed to pay adequate restitution.
Neder’s sentence ordered him to pay $25,045,996 in restitution. Neder paid
a total of $8,680 in restitution during the five-year supervision period from October
2001 to October 2006.
In December 2005, Neder was assigned a new probation officer, Ron West.
Neder’s outgoing probation officer advised West that Neder might be able to make
larger monthly payments. West conducted a financial investigation and learned
that, over the course of the supervision period, Neder’s income had exceeded his
expenses by approximately $45,000.
In June 2006, West and his supervisor met with Neder to discuss the excess
income of $45,000 and took the position that Neder should have been paying more
restitution. Neder offered to pay $33,900 by July 31, 2006 to ensure that his
supervision would terminate as scheduled in October 2006.
11
West contacted the district court, which agreed to wait until July 31, 2006 to
permit Neder to pay the additional sum. Although Neder continued to make his
monthly $300 payments, he did not pay the additional $33,900 by July 31. As a
result, West included Charge 1 in the initial petition, alleging that Neder failed to
make restitution payments “to the best of his ability” and failed to pay restitution in
full. After hearing West’s testimony and reviewing a summary of Neder’s income,
expenses and payment history, the district court concluded that Neder had not
made a “good faith attempt to comply with the restitution order.”
We conclude that Neder has shown no reversible error in the district court’s
determination. Although Neder complied with payment schedules agreed upon
with the Probation Office, the financial evidence at the revocation hearing showed
that he clearly had the ability to pay much more given his income. When the
Probation Office confronted Neder with this fact and Neder was faced with the
possibility of revocation of his supervised release, Neder offered to pay $33,900 by
July 31, 2006. However, Neder did not make this payment or any portion of it by
the agreed upon date (or afterward). Given Neder’s income shown in the record
and his unexplained failure to make the agreed upon lump sum payment by July
31, 2006, especially when his supervision period was set to expire in less than
12
three months, we cannot say the district court erred.8
D. Due Process
Neder argues that he was denied due process during the revocation
proceedings. Citing United States v. Tyler, 605 F.2d 851, 853 (5th Cir. 1979),
Neder argues that the Probation Office’s failure to notify him earlier that his
restitution payments were inadequate or that he might have to pay a lump sum at
the end of his supervised release term was fundamentally unfair.
Tyler involved a probation officer’s holding back of known violations in
preparing a first probation revocation petition and, when that petition failed, filing
a second petition containing the withheld violations. 605 F.2d 851, 852 (5th Cir.
1979). This Court concluded that the “lengthy delay, coupled with the probation
officer’s obvious decision not to file these charges in the first petition, [was]
fundamentally unfair.” Id. at 853.
After Tyler, we held that “a revocation of probation based on a series of
violations punctuating the probationary period is, without more, constitutional.”
United States v. Rice, 671 F.2d 455, 458 (11th Cir. 1982). In Rice, the probation
officer listed in the petition violations dating back two and a half years. Id. Noting
that it was “a building block case,” we rejected the defendant’s argument that a
8
Alternatively, we conclude that Charges 3 and 4 were adequate to support the district
court’s revocation.
13
probation officer must file a petition for revocation upon the first violation of
probation. Id. (quotation marks omitted)
In Neder’s case, probation officer West did not withhold any known
violations from a first petition and then allege them in a second petition. The
original petition filed by West alleged that Neder had failed to pay restitution to the
best of his ability. Thus, Tyler is inapposite.
Furthermore, West and his supervisor met with Neder before the petition
was filed and raised their concerns about Neder’s failure to pay more restitution
when he had excess income. In response, Neder offered to pay $33,900 by July 31,
2006. It was only after Neder failed to make good on his own offer that West filed
the petition. Under these circumstances, West’s treatment of Neder did not result
in a denial of due process.9
E. Neder’s Sentence
Neder argues that the district court’s sentence of nine months’ imprisonment
followed by four years and three months of supervised release is unreasonable and
violated his Eighth Amendment rights.
Upon finding that a defendant has violated a condition of supervised release,
a district court may revoke the term of supervised release and impose a term of
9
Neder’s other due process arguments, which were not raised in the district court, are
without merit.
14
imprisonment after considering the factors in § 3553(a). We review a defendant’s
sentence imposed upon revocation of supervised release for reasonableness.
United States v. Sweeting, 437 F.3d 1105, 1106-07 (11th Cir. 2006). The §
3553(a) factors include (1) the defendant’s history and characteristics, (2) the need
to promote respect for the law and provide just punishment, (3) the need for
deterrence, (4) protection of the public and (5) the need to provide restitution to the
victims. See 18 U.S.C. § 3553(a).
The district court must also consider the advisory policy statements in
Chapter 7 of the Sentencing Guidelines, one of which provides recommended
ranges of imprisonment. United States v. Brown, 224 F.3d 1237, 1242 (11th Cir.
2000). Neder’s recommended guidelines range was three to nine months’
imprisonment. See U.S.S.G. § 7B1.4(a).10 Stating that it had considered the §
3553(a) factors, the district court imposed a nine-month sentence.
Neder contends that the nine-month prison term and the lengthy term of
supervised release are unwarranted because he did not break any laws or engage in
criminal behavior. These facts do not show that the sentence was unreasonable.
The district court expressly found that Neder’s conduct in violating the terms of
supervised release was not criminal. However, Neder’s conduct of soliciting a
10
Neder does not challenge the district court’s calculation of the advisory guidelines
range.
15
known convicted felon to assist the felon’s development company in purchasing
real estate for a condominium conversion was serious in light of Neder’s
underlying offenses of fraud relating to real estate development. As the district
court stated, Neder was doing “what the court was trying to keep him from doing,
because of the convictions that he had and the Court knowing how he went about
with the convictions.” The district court also expressed concern about the ability to
trust Neder once he completed his nine-month sentence and whether Neder was
“supervisable.”
In addition, the record shows that the district court considered Neder’s age
and poor health, his contention that he got “carried away” while engaging in his
paralegal duties and did not intend to violate the terms of his supervised release,
and the effect of imprisonment on Neder’s future ability to pay restitution. On this
record, Neder has not shown that the district court’s sentence was unreasonable or
violated the Eighth Amendment.11
III. CONCLUSION
11
Neder also argues that the district court’s order that he pay $1,000 a month in restitution
upon his release is unreasonable because it will be impossible for him to comply. Neder’s
challenge to the district court’s restitution order is premature. Whether it will be impossible for
Neder to comply with the district court’s restitution payment schedule can be determined only
after Neder is released from prison. Furthermore, as the district court noted during the
revocation hearing, Neder can move the district court to modify the restitution schedule if, after
Neder is released, he is unable to obtain employment sufficient to make the monthly payments.
See 18 U.S.C. § 3583(e)(2).
16
For all the forgoing reasons, we affirm the district court’s revocation of
Neder’s supervised release and the imposition of a sentence of nine months’
imprisonment, followed by four years and three months of supervised release.
AFFIRMED.
17