United States v. MacCaull , 431 F. App'x 23 ( 2011 )

10-1192-cr
United States v. MacCaull
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals for the Second Circuit, held at the
2 Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York, on
3 the 16th day of June, two thousand eleven.
4
5 PRESENT: JON O. NEWMAN,
6 JOSEPH M. MCLAUGHLIN,
7 DEBRA ANN LIVINGSTON,
8 Circuit Judges.
9
10
11 UNITED STATES OF AMERICA,
12 Appellee,
13
14 -v.- No. 10-1192-cr
15
16 BRADLEY DAVID EISNER,
17
18 Defendant,
19
20 MICHAEL RICHARD MACCAULL,
21 Defendant-Appellant.
22
23
24 MARK C. FANG, Esq., White Plains, NY, for Defendant-Appellant.
25
26 PAUL TUCHMANN, Assistant United States Attorney (Susan
27 Corkery and Sarah Coyne, Assistant United States Attorneys, on the
28 brief), for Loretta E. Lynch, United States Attorney, Eastern District
29 of New York, Brooklyn, NY, for Appellee.
1 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
2 DECREED that the judgment of the district court be AFFIRMED.
3 Defendant-Appellant Michael Richard MacCaull (“MacCaull”) appeals from a judgment of
4 the United States District Court for the Eastern District of New York (Irizarry, J.), entered March
5 30, 2010, convicting him, pursuant to a plea agreement, of conspiracy to commit mail and wire
6 fraud, in violation of 18 U.S.C. §§ 1341 and 1349, sentencing him to 188 months’ incarceration and
7 a 3-year term of supervised release, and ordering him to pay restitution for the fraud in the amount
8 of $66,254,694.60. MacCaull appeals from the sentence imposed by the district court on both
9 procedural and substantive grounds. We assume the parties’ familiarity with the underlying facts,
10 procedural history of the case, and issues on appeal.
11 In an appeal from a sentence imposed by the district court, “ the role of the Court of Appeals
12 is limited to examining a sentence for reasonableness, which is akin to review under an
13 ‘abuse-of-discretion’ standard.” United States v. Hasan, 586 F.3d 161, 167 (2d Cir. 2009). We
14 apply this deferential standard “both to the [substantive reasonableness of the] sentence itself and
15 to the procedures employed in arriving at the sentence.” Id. at 168 (alteration in original) (quoting
16 United States v. Verkhoglyad, 516 F.3d 122, 127 (2d Cir. 2008)). We seek first to “ensure that the
17 district court committed no significant procedural error, such as failing to calculate (or improperly
18 calculating) the Guidelines range, treating the Guidelines as mandatory, failing to consider the
19 § 3553(a) factors, selecting a sentence based on clearly erroneous facts, or failing to adequately
20 explain the chosen sentence — including an explanation for any deviation from the Guidelines
21 range.” United States v. Dorvee, 616 F.3d 174, 179 (2d Cir. 2010) (quoting Gall v. United States,
22 552 U.S. 38, 51 (2007)). When no such procedural error has occurred, “substantive reasonableness
2
1 reduces to a single question: ‘whether the District Judge abused his discretion in determining that
2 the § 3553(a) factors supported’ the sentence imposed.” United States v. Jones, 531 F.3d 163, 170
3 (2d Cir. 2008) (quoting Gall, 552 U.S. at 56). In conducting this inquiry, “we will not substitute our
4 own judgment for the district court’s,” United States v. Cavera, 550 F.3d 180, 189 (2d Cir. 2008)
5 (en banc), and will set aside its decision only when it “cannot be located within the range of
6 permissible decisions,” id. (quoting United States v. Rigas, 490 F.3d 208, 238 (2d Cir. 2007)).
7 MacCaull asserts on appeal that the district court committed procedural error in determining
8 his Guidelines range calculation on the basis of actions committed by his co-defendant, Bradley
9 David Eisner (“Eisner”), without first making a required particularized finding as to whether that
10 criminal activity was within the scope of the conspiracy in which MacCaull had agreed to
11 participate. See United States v. Studley, 47 F.3d 569, 574 (2d Cir. 1995). As a preliminary matter,
12 the government argues that we may review this issue only for plain error. We agree. MacCaull
13 asserts that he sufficiently raised this objection with two passing references during sentencing that
14 implied he erroneously believed he knew “the size and the scope” of his conspiracy to engage in a
15 Ponzi scheme with Eisner. However, it is clear in the context of the hearing that those references
16 were directed not at the district court’s supposed failure to make a finding as to the scope of the
17 conspiracy in which he had agreed to engage, but at whether the extent of the losses caused by
18 MacCaull’s and Eisener’s fraud were foreseeable to MacCaull, which was the primary objection
19 MacCaull raised at sentencing to his being held liable for the full amount of the harm caused by the
20 Ponzi scheme. Thus, to prevail on this claim, MacCaull must show “(1) error, (2) that is plain, and
21 (3) that affect[s] substantial rights. If all three conditions are met, an appellate court may then
22 exercise its discretion to notice a forfeited error, but only if (4) the error seriously affect[s] the
3
1 fairness, integrity, or public reputation of judicial proceedings.” United States v. Paul, 634 F.3d
2 668, 674 (2d Cir. 2011) (alterations in original) (quoting Johnson v. United States, 520 U.S. 461,
3 466-67 (1997)).
4 Proceeding to the merits of MacCaull’s procedural claim, we note that under U.S.S.G.
5 § 1B1.3 the relevant conduct on the basis of which the district court is to determine a defendant’s
6 Guidelines range for a particular offense includes:
7 (B) in the case of a jointly undertaken criminal activity (a criminal plan,
8 scheme, endeavor, or enterprise undertaken by the defendant in concert with
9 others, whether or not charged as a conspiracy), all reasonably foreseeable
10 acts and omissions of others in furtherance of the jointly undertaken criminal
11 activity,
12
13 that occurred during the commission of the offense of conviction, in preparation for
14 that offense, or in the course of attempting to avoid detection or responsibility for
15 that offense.
16
17 U.S.S.G. § 1B1.3(a)(1). An Application Note for this section of the Guidelines then provides that
18 “[i]n order to determine the defendant’s accountability for the conduct of others under subsection
19 (a)(1)(B), the court must first determine the scope of the criminal activity the particular defendant
20 agreed to jointly undertake (i.e., the scope of the specific conduct and objectives embraced by the
21 defendant’s agreement).” Id. § 1B1.3, Application Note 2. Thus, in order for a defendant to be held
22 accountable for the acts of a co-conspirator, “this Court requires a district court to make two
23 particularized findings[:] . . . ‘1) that the acts were within the scope of the defendant’s agreement
24 and 2) that they were foreseeable to the defendant.’ ” United States v. Johnson, 378 F.3d 230, 238
25 (2d Cir. 2004) (quoting Studley, 47 F.3d at 574).
26 Here, despite MacCaull’s contention on appeal, the district court did make the required
27 finding that the “scope of the defendant’s agreement” extended to the whole of the Ponzi scheme
4
1 he devised and executed with Eisner. As an initial matter, this case is already distinct from Studley
2 and many of the other cases on which MacCaull relies in that, rather than claiming that the Razor
3 FX operation was not “jointly undertaken criminal activity,” MacCaull admitted during the
4 sentencing proceeding that he “started Razor FX” with Eisner and made a “conscious decision” to
5 turn it into a Ponzi scheme.1 He acknowledged that he and Eisner “stole [the victims’] money and
6 lied to them about it for seven years, by using fraudulent statements, fake confirmations, bogus
7 predictions and outright lies” and challenged only whether the full extent of the losses was
8 foreseeable to him.
9 While many of the findings made by Judge Izirarry below were thus directed at the degree
10 to which the losses caused by his Ponzi scheme were foreseeable (a byproduct of the focus of
11 MacCaull’s argument at sentencing), her discussion was predicated on her finding that, in operating
12 the fraudulent scheme, MacCaull and Eisner “were in business together.” Speaking of MacCaull’s
13 family and friends in the courthouse, she noted that none of them was “sitting with Mr. Eisner or
14 with Mr. MacCaull when they were hatching their plot to create Razor FX and were hatching their
15 plans to continue with really what was a massive fraud here in terms of the number of victims and
16 the amount of money that spanned over a period of eight years.” The judge noted that MacCaull’s
17 “knowhow of the industry” was crucial to the development of the scheme and that he had been a
18 necessary part of “get[ting] this business off the ground.” Having concluded that the “scope of the
19 defendant’s agreement” included the whole of the Razor FX scheme that he hatched with Eisner,
20 the district court further found that, even while MacCaull was incarcerated, he “g[ave Eisner] tips
1
This account was in dispute at sentencing only to the extent that the district court noted
that the government’s proof suggested that the Razor FX operation had been a Ponzi scheme
from the outset.
5
1 on how to conduct the business, what to do, and [he] still did that while [he was] out.” While
2 MacCaull suggests to this Court that the money taken in by Eisner and allegedly hidden from him
3 in 2007 can be analogized to a “side deal” distinct from the pair’s Ponzi scheme, the district court
4 rejected this speculative account of Eisner’s actions, noting that, to the extent MacCaull profited less
5 during this period, it was not because he was unable to profit more as he remained “critical to the
6 operation.” At the same time, the district court also rejected MacCaull’s argument at sentencing that
7 the extent of the losses caused was not reasonably foreseeable, an argument he abandons on appeal.
8 While MacCaull notes that courts have distinguished between the scope of a defendant’s
9 knowledge and the scope of his or her agreement to, or participation in, a conspiracy, the district
10 court here found not simply that MacCaull knew the extent of the losses caused by his and Eisner’s
11 scheme but also that he created the Ponzi scheme in question with Eisner, was instrumental in its
12 initial development, and continued to participate in and profit from the scheme throughout the time
13 in which it was in existence. Particularly in light of the fact that here MacCaull had already
14 acknowledged in his plea allocution that “[f]rom approximately January 2001 to January 2008, [he]
15 agreed with another individual to devise a scheme to defraud investors in Razor FX” and failed
16 subsequently to raise a challenge at sentencing to the conclusion that the actions of the Razor FX
17 Ponzi scheme were thus clearly within the scope of his agreement, we see no plain error in the
18 degree of particularity with which the district court set out its finding that the subsequent fraudulent
19 activity was within the scope of MacCaull’s agreement.
20 MacCaull also challenges the substantive reasonableness of his sentence. In particular, he
21 asserts that the district court “failed to properly assess” both the findings by the probation
22 department regarding its recommendation that he be given a minor role adjustment and his claims
6
1 regarding the allegedly diminished role he played in the later years of the conspiracy. However, not
2 only did the district court spend a significant amount of time discussing the contention that
3 MacCaull may not have made use of the Ponzi scheme’s funds to the same extent Eisner did, it in
4 fact granted him the minor role adjustment recommended in his Pre-Sentence Report. Moreover,
5 the district court also addressed and rejected his claim that he was unaware of the fraudulent
6 activities being undertaken in the later years of the conspiracy and simply refused to give him a
7 lesser sentence based on the allegedly smaller role he played during this period in light of this
8 conclusion. It is clear here that the district court fully considered the “nature and circumstances”
9 of MacCaull’s offense, 18 U.S.C. § 3553(a)(1), and we perceive no abuse of discretion in the
10 sentence it imposed following this consideration.
11 MacCaull’s second substantive challenge asserts that his sentence was unreasonable “in light
12 of Eisner’s non-jail sentence and the disparate treatment the court displayed at the two sentencing
13 hearings.” This Court has recognized that district courts, while not barred from considering
14 sentencing disparities among co-defendants, are also not required to consider any such disparities
15 under 18 U.S.C. § 3553(a)(6). See United States v. Wills, 476 F.3d 103, 110 (2d Cir. 2007),
16 abrogation on other grounds recognized by United States v. Cavera, 550 F.3d 180 (2d Cir. 2008)
17 (en banc). Moreover, as the government notes, even though the district court was under no
18 obligation to consider any such disparity between MacCaull and Eisner, the co-defendants here
19 cannot in any case be termed similarly situated in light of the substantial assistance Eisner provided
20 to the government in the investigation and the subsequent conviction of MacCaull, a distinction the
21 district court recognized in sentencing Eisner. While MacCaull asserts that his sentence was made
22 to serve as deterrence for both his and Eisner’s crime, it is clear that the district court in Eisner’s
7
1 proceeding was simply recognizing that, given MacCaull’s conviction and sentence, it could take
2 into account the assistance provided by Eisner and encourage people to confess their wrongdoing
3 without suggesting that serious offenses such as the fraud at issue here would go unpunished. We
4 simply cannot conclude on this basis that the sentence imposed on MacCaull was substantively
5 unreasonable.
6 We have considered all of Appellant’s remaining arguments and find them to be without
7 merit. For the foregoing reasons, the judgment of the district court is hereby AFFIRMED.
8
9 FOR THE COURT:
10 Catherine O’Hagan Wolfe, Clerk
11
8