United States v. Hoffecker ( 2008 )

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
6-16-2008
USA v. Hoffecker
Precedential or Non-Precedential: Precedential
Docket No. 06-3190
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 06-3190
UNITED STATES OF AMERICA
v.
CHARLES PAUL HOFFECKER
also known as
CHIP HOFFECKER
Charles Paul Hoffecker,
Appellant
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Crim. No. 03-cr-00120-1)
Honorable Katharine S. Hayden, District Judge
Argued March 6, 2008
BEFORE: FISHER, GREENBERG, and ROTH, Circuit Judges
(Filed: June 16, 2008)
Christopher J. Christie
United States Attorney
Sabrina G. Comizzoli (argued)
Assistant U.S. Attorney
George S. Leone
Chief Appeals Division
1
Office of the United States Attorney
970 Broad Street
Room 700
Newark, NJ 07102-0000
Attorneys for Appellee
Susan Dmitrovsky (argued)
Sale & Kuhne
Law Office of Benedict P. Kuehne
100 Southeast 2nd Street
Bank of America Tower, Suite 3550
Miami, FL 33131-0000
Attorneys for Appellant
OPINION OF THE COURT
GREENBERG, Circuit Judge.
I. INTRODUCTION
Following his indictment on the charges a jury convicted
Charles Paul Hoffecker of one count of conspiracy to commit mail
and wire fraud in violation of 18 U.S.C. § 371 and three counts of
mail fraud in violation of 18 U.S.C. § 1341. Based on these
convictions, the District Court sentenced Hoffecker to a total
custodial term of 210 months to be followed by three years of
supervised release. Hoffecker appeals making the following
claims: (1) the District Court erred in admitting the testimony of his
former attorney; (2) the prosecution was time-barred; (3) the
prosecutor engaged in prejudicial misconduct; (4) the District
Court erred in its instructions to the jury; (5) a Government witness
committed perjury; (6) the District Court erred in excluding expert
witnesses; (7) the District Court erred in admitting evidence of a
civil injunction entered against him; (8) the District Court erred in
excluding his out-of-court statements; (9) the prosecutor made
improper comments during closing argument; and (10) the District
Court erred in calculating his sentencing guideline range and his
2
sentence is unreasonable. After our examination of all of these
issues we have concluded that those concerning the testimony of
his former attorney and the statute of limitations are the most
significant and potentially of the greatest precedential importance.
In the end, however, we reject all of Hoffecker’s contentions and
will affirm the amended judgment of conviction and sentence in
this case entered July 24, 2006.
II. FACTS AND PROCEDURAL HISTORY
After a conviction predicated on a jury verdict, we set forth
the evidence in the light most favorable to the Government.1
United States v. Wood, 486 F.3d 781, 783 (3d Cir. 2007). In
November 1995, Hoffecker and his co-defendant Charles Edward
Myers formed Amitex Investment Services Limited, Inc.
(“Amitex”), a Bahamian corporation headquartered in Nassau,
purportedly to sell physical commodities on a financed basis. It
appears that Hoffecker contemplated that Amitex’s customers who
were actually its victims would be United States residents and, in
fact, they were. Hoffecker owned 65% of Amitex, Myers owned
30%, and a third party, Walid El-Houri, owned the remaining 5%.
Myers oversaw Amitex’s daily operations while Hoffecker
operated Amitex through daily phone contact and routine visits.
Hoffecker then incorporated Global Investment Corporation
(“Global”) in Florida in December 1995 but relocated Global to
1
We are struck by the circumstance that Hoffecker’s brief is
detached from the realities of the case as it hardly makes reference
to the facts that constitute the offenses involved and does not come
close to setting them forth in a light favorable to the Government.
This is unfortunate because the trial took more than two months
and produced 61 volumes of appendices and supplemental
appendices. In fact, after reading Hoffecker’s brief one might
wonder what had been going on here and what Hoffecker did to
warrant his conviction. Fortunately, the Government’s brief makes
up for this shortcoming and neither the Government nor Hoffecker
has been prejudiced by Hoffecker’s brief’s lack of factual detail.
3
Georgia in November 1996. Global was one of approximately ten
“boiler-rooms” in which telemarketers sold the Amitex Leveraged
Physical Commodity Investment Program (“LPCIP”) to individual
customers. Hoffecker owned and controlled Global, referred to
himself as its “administrator,” and took substantial amounts of
money from Global in cash. His activities with respect to Global
were extensive as he visited its offices, created promotional
documents for its customers, hired its employees, presided over
office-wide meetings and conference calls, brokered deals on its
behalf, authorized its materials to be provided to third parties, and
conducted sales presentations to the telemarketers.
Hoffecker instructed Global’s telemarketers to represent to
customers that the LPCIP would purchase actual tangible
commodities on a customer’s behalf, such as precious metals,
gasoline, and heating oil, and store them outside the United States.
The telemarketers also represented that the customers would pay
for their purchases in part by using “loans” and “loan financing”
that Amitex provided. Nevertheless, the LPCIP solicited a 20%
down payment from its customers with the agreement that Amitex
would advance the remaining 80% of the purchase price as a loan
at 12% annual interest. Of course, inasmuch as Amitex did not
purchase the commodities it hardly assumed a burden when it
engaged itself to make these “loans.”
The LPCIP was an elaborate and highly successful scam.
Customers made down payments and were charged interest for the
nonexistent fictional “loans” to purchase commodities that neither
Amitex nor anyone else acting on its behalf bought or stored.
Hoffecker enriched himself from the scam by siphoning off
millions of dollars from Bahamian bank accounts that he had set up
to conceal the fraud from United States law enforcement
authorities.
Amitex’s brochures and promotional materials falsely
represented that Amitex was a legitimate operation, touting
promises regarding its acquisition and storage of physical
commodities, company history, account executives, office
locations, and departments. A Global brochure extolled the
investment’s “tangibility,” and represented that “the commodity
[purchased would be] physically delivered to a lender for
4
safekeeping.” App. vol. 25 at 35, 159. The brochure listed, with
photographs, the types of commodities offered, including gold,
silver, platinum, heating oil, unleaded gasoline, and foreign
currencies.
Hoffecker instructed his telemarketers to emphasize to
potential clients that the investment in physical commodities was
safe and secure because it had “tangibility and liquidity,” app. vol.
14 at 18, 31; vol. 25 at 159, and the commodities were “actually
something you can hold and touch,” app. vol. 17 at 86. Global’s
telemarketers and Global’s account agreement represented that the
commodities themselves secured the Amitex loans and were being
held by Amitex as collateral in insured storage facilities outside the
United States.
In addition, Amitex sent investors a brochure touting its
“third party storage” facility. App. vol. 14 at 31; vol. 17 at 67. It
also advised customers that there was a storage fee, but that this fee
currently was not being charged. This aspect of the fraud was
significant as one customer thought of the fee waiver as a “great
perk.” App. vol. 26 at 44.
In reality, neither Amitex nor Global purchased or stored
physical commodities. In fact, Amitex did not have the physical
capability to store the physical commodities, and a Government
expert testified that the promise to “hold” and “store” several of
these commodities physically could not be fulfilled. In this regard,
as an example of Amitex’s inability to store the commodities,
heating oil and unleaded gasoline degrade and/or become
contaminated over a period of months, becoming unsalable.
Hoffecker falsely created the image that Global and Amitex
were thriving worldwide entities. Amitex’s brochures touted Walid
El-Houri as the original founder of Amitex and claimed that
Amitex had a 25-year history and had generated “several billion
dollars” from its global ventures, including worldwide oil and other
commodity transactions. App. vol. 25 at 164; vol. 17 at 60-69.
Hoffecker instructed his telemarketers to emphasize Amitex’s
“billions” of dollars of business to demonstrate that Amitex was a
large company which its clients could trust. App. vol. 17 at 62-63.
5
These representations were false. El-Houri was not an
original founder of Amitex; rather, he was briefly a 5% owner who
ceased his involvement with Hoffecker and Amitex only a few
months after its inception. El-Houri’s attempt to extract himself
from Amitex culminated in Amitex’s agreement on March 5, 1996,
at El-Houri’s insistence to destroy all marketing brochures and
public relations documents portraying him as a major principal in
Amitex. This agreement was, however, as worthless as all of
Amitex’s other undertakings as it continued to send its customers
brochures throughout 1996 and 1997 touting El-Houri as the
original founder of Amitex.
Of course, Amitex did not generate “several billion dollars”
over its supposed 25-year history. Amitex opened for business in
November 1995 and did no significant business prior to issuing the
brochure touting its 25-year history. Contrary to representations
contained in its brochures, Amitex was not engaged in any global
business ventures involving worldwide oil transactions,
international business transactions, or financing of major global
projects. Moreover, though Amitex brochures and envelopes
represented that it had offices in the Bahamas, London, Munich,
and Monaco,2 its only office was in the Bahamas.
Amitex’s and Global’s written materials and telemarketers
referenced various departments within the companies, such as
Amitex’s “New Accounts Department,” “Customer Service
Department,” “Traders,” and “Compliance Department.” App. vol.
14 at 72, 160; vol. 21 at 34-36, 93-94. These departments,
however, did not exist. Amitex’s staff consisted of approximately
five Bahamian office workers, whom Hoffecker described as “back
office” types who performed clerical and administrative tasks.
Supp. app. at 22. Thus, contrary to the brochures’ representations,
Hoffecker’s staff did not have “extensive international business
expertise,” “worldwide contacts,” or “a network of professional
men and women who have the uncompromising commitment,
integrity and motivation to achieve success.” App. vol. 21 at 73-
74.
2
The term Monte Carlo actually was used.
6
Global similarly represented that it had a “Trading
Department,” “Compliance Department,” and “Compliance
Director.” App. vol. 24 at 109, 111, 122. In reality, Global did not
have a Trading Department and its so-called Compliance
Department consisted of one person, the Compliance Director,
Francine Leone, who was a secretary who performed clerical and
administrative tasks. Leone testified that she had no training or
expertise in compliance-related matters, and did not interact with
any in-house or outside legal counsel. Her alleged
compliance-related duties were nothing of the kind as they
consisted of reading a short script to prospective investors. If
Leone was unavailable to read the script, other Amitex
telemarketers would read it for her. Leone spoke to virtually every
Global customer on the telephone throughout 1996. Her script
advised the customer: “I will go ahead and execute your trade . . .
.” Supp. app. at 42. But in reality neither Global nor anyone else
made the claimed trades or purchases. As Leone testified at trial,
Global’s Compliance Department was nothing more than an
“illusion.” App. vol. 24 at 124.
Global also sent the customers a brochure representing that
Global’s “account executives” had the requisite “expertise and
resources to guide and assist you in your journey through the
financial arena.” Id. at 91-92. In reality, however, Global hired
telemarketers without requiring any professional credentials or
expertise other than that they had to be “good talkers.” Id. at 101.
Global’s on-site manager, Jayson Kline, had followed Hoffecker
from his previous business ventures. Kline and other Global
telemarketers previously had lost their licenses to sell commodities
futures and options (though no license was required to sell
“physical” commodities).
Hoffecker’s scheme further involved duping customers with
written statements “confirming” trades and monthly account
statements. Thus, after each supposed purchase of a physical
commodity, Global sent the customer a written “Confirmation
Statement,” confirming that the customer “bought” a specified
quantity of a specific physical commodity at a specific price. App.
vol. 14 at 67. The written confirmation contained a “Trade Date”
and a “Loan Amount” and reflected the customer’s 20% down
payment. App. vol. 26 at 21-22. Amitex subsequently sent the
7
customers monthly account statements confirming the alleged
loans, the purchase of products, and the monthly interest charged.
Hoffecker fraudulently represented to customers that
Amitex and Global were “separate,” “independent,” and “not-
related” to each other. In furtherance of this false representation
Hoffecker created a Global brochure representing that Global and
Amitex were “independent” of each other. App. vol. 14 at 81. An
Amitex promotional brochure referred to itself as the “independent
lender” and to Global as the “independent broker dealer.” Id.
Global’s written Risk Disclosure Statement represented that
Amitex and Global were “separate” and “nonrelated,” that the
investor was “independent of your broker, Global Investment
Corp., entering into a collateral loan transaction with a separate
non-related financial institution [Amitex].” Id. at 50-53, 82.
Amitex’s Terms and Conditions booklet, which Hoffecker
approved, made approximately a dozen representations that Global
was “independent” and “not agents, employees, or affiliates of
Amitex Investment Services, Ltd.” Id. at 80. Amitex and Global
were, of course, not “separate,” “independent,” or “nonrelated.”
Rather, Hoffecker co-owned and controlled Amitex while
simultaneously co-owning and controlling Global, although he
attempted to conceal his ownership of both companies.
Hoffecker attempted to achieve plausible deniability by
placing a fraction of the customers’ funds in a supposed hedge fund
account called “Phoenix,” located in the Turks and Caicos Islands,
so that when customers eventually realized they were losing all, or
almost all, of their money, he could point a finger at the separate
hedge fund for the loss. Hoffecker at no time after Amitex and
Global ceased operations attempted to use the money he had sent
to Phoenix to compensate any customers for their losses.
Moreover, neither Hoffecker nor anyone else ever apprised any
customer of the so-called hedging.
Hoffecker and his entities routinely “reloaded” customers,
meaning that they subjected them to multiple solicitations for
additional investments after the initial solicitation on the logical
theory that a customer swindled in the first place was a likely mark
for a repeat performance. As examples of reloading, all of the four
victims who testified at trial made a series of purchases. There
8
were taped conversations in evidence at trial revealing Hoffecker
discussing the “loading” of customers, which further depleted their
“equity.” In recorded conversations, Hoffecker’s co-conspirator,
Myers, referred to the Amitex-Global victims as “bullion heads –
I call them bullion heads – I don’t know what the fuck else you’d
call ’em. . . . They just like to buy this shit.” Supp. app. at 21.
Global employees testified that, to their knowledge, none of
the Global customers made a profit. As former Global employee
Gregory Swarn testified, consistently with the testimony of the four
victims, no Global client ever made a profit, most lost everything,
and some were returned remittances of a small fraction of their
investment in order to lull them into believing that their losses were
attributable to the marketplace and not to fraud. Moreover, Myers
admitted in recorded conversations, “I’ll make the, the price up, so
at least he’s [the victim] got enough to take his wife out to dinner.
. . . I mean that’s just the cost of doing business.” Id. at 13. Myers
explained that he preferred to remit a small fraction to the customer
as soon as possible, preferably within 24 hours:
The reason for it is we want them to die as quick a
death as if they’re dying get them out of the way.
We do not want them calling you up saying how
come that son of bitch doesn’t send me my money.
. . . You’re a thief and a crook cause you don’t send
me my money. We don’t want that [to] occur. We
want to get that money to him immediately so he can
take his wife out to dinner and it’s all over with.
Id. at 29.
Global, reflecting Hoffecker’s indifference to the interests
of its victims, cynically targeted senior citizens and other persons
unsophisticated in investments. Clearly, of course, Global had to
target such vulnerable persons to be its victims as any reasonably
sophisticated investor who checked up on Amitex and Global with
financial services reporting agencies quickly would have
discovered that the scheme was a fraud. As an example of the type
of victim the scheme targeted, a boiler room employee solicited
Geraldine Conover, an 82-year-old mid-western great-great
grandmother in mid- to late-1995. Ms. Conover ultimately
9
invested approximately $125,000 in the scheme and lost it all.
After a telemarketer solicited her more than 20 times in one day,
Ms. Conover contacted law enforcement authorities who requested
that she record her telephone conversations with both the
boiler-room solicitors and Amitex. In a recorded conversation on
April 25, 1996, Ms. Conover expressed to the telemarketer her
concern about Amitex because she was “naive” and had invested
a lot of money, and the paperwork “didn’t really say who owned
[Amitex].” Id. at 115. The telemarketer repeatedly assured her
that Amitex had been in business for “many, many years,” id. at
114, and that Ms. Conover could confirm this with Amitex’s
written information packet that described “their history,” id. at 116.
Ms. Conover also recorded a conversation she had with Myers in
which Myers made a series of incriminating admissions regarding
the promised purchase of physical commodities, the purported
loans and interest charged for them, and the supposed storage of
the commodities.
Harriet Davis, another victim, was a 75-year-old widow on
a fixed income who invested with Global and Amitex. She told a
Global telemarketer that she was comfortable investing $5,000.
Over a span of a few months, however, and after calling her every
day or every other day, Global and Amitex swindled her out of
approximately $43,000. She eventually received a remittance of
$4,039. Stephen Miller invested $77,152 and received a remittance
of $7,488. Marie Walsh invested approximately $70,000 and lost
the entire amount.
Between 1996 and 1997, Amitex/Global defrauded more
than 600 victims of at least $14,151,596 by pocketing their
investments and interest payments and charging a 15% sales
commission, $100 new account fee, $100 annual fee, and a “spread
fee” of approximately 3% of the total value of the investment (the
20% down payment plus the 80% financing). Because
Amitex/Global did not purchase or store anything, and there were
no actual loans, all of these fees and commissions were merely
additional means to bilk the victims. Even as experienced federal
judges who naturally are not easily surprised by the evil that people
will do, we are stunned by the scope of the fraud here.
Hoffecker siphoned off much of the scam’s proceeds.
10
Indeed, early on in the scheme, Hoffecker told Jack Field, the
Government’s confidential informant who, as we will explain, is a
central figure in this case, that Hoffecker was “on target” to receive
“at least” $40,000 to $60,000 per month from the hoax. Supp. app.
at 27b. Throughout the life of the ruse, Global employees regularly
handed Hoffecker thousands of dollars in cash, sometimes as often
as three times a week. To conceal his money, Hoffecker kept one
million dollars in cash in the name of an alias in a Fort Lauderdale
bank vault. In addition, Hoffecker transferred more than two
million dollars from Amitex’s bank account in the Bahamas to his
personal off-shore bank account. Hoffecker siphoned off this
money, taking hundreds of thousands of dollars in cash outright,
and funneled the remainder to other off-shore accounts for other
businesses he operated.
Hoffecker’s telemarketers solicited customers from 1996
through 1997 until, with no advance notice, in an unsigned letter
dated December 24, 1997, Global advised its customers that it was
going out of business effective December 31, 1997, and that
Amitex would handle its accounts. Customers were informed that
they could register any complaints regarding Global’s closure to
Amitex’s non-existent “Compliance Department.” App. vol. 14 at
160.
Amitex abruptly closed down a few months later, effective
March 31, 1998, and, like Global, did so without advance notice.
A Bahamian company called “International Bullion Services”
(“IBS”) advised Amitex customers in an unsigned letter which did
not reference Amitex that it purchased their assets and loans. In
fact, Hoffecker paid IBS $400,000 to take Amitex off his hands.
Overall, after our intense study of this case and taking into account
our extensive experience in dealing with thieves, swindlers,
confidence men, charlatans, and the like, we conclude that
Hoffecker ranks high in the pantheon of thieves. He is utterly
devoid of principles.
On February 14, 2003, a grand jury indicted Hoffecker and
Myers on charges of mail fraud and conspiracy to commit mail and
wire fraud. Their first trial commenced on June 3, 2004, and
concluded with a hung jury on August 13, 2004. Their retrial
began on January 3, 2006, and resulted in the jury returning guilty
11
verdicts on March 17, 2006, convicting Hoffecker and Myers of
one count of conspiracy to commit mail or wire fraud and three
counts of mail fraud. Following the jury verdict, Hoffecker
unsuccessfully moved for a judgment of acquittal or a new trial.
The District Court ultimately sentenced Hoffecker to 210 months
of imprisonment to be followed by a three-year term of supervised
release and sentenced Myers to 108 months of imprisonment to be
followed by a term of supervised release. Hoffecker but not Myers
appeals.
The district court had jurisdiction under 18 U.S.C. § 3231and we have jurisdiction over this appeal pursuant to 28 U.S.C. §
1291.
III. DISCUSSION
As we set forth above, Hoffecker has raised a variety of
challenges to his conviction and sentence. We shall consider each
argument in turn. Significantly, however, Hoffecker does not
contend that the evidence did not justify the verdict.
1. Use of Hoffecker’s Former Lawyer as a Government
Witness
Hoffecker argues that the Government’s conduct in using
Jack Field, his one-time attorney, as an informant was so
outrageous that it violated the Due Process Clause of the Fifth
Amendment to the Constitution and that the District Court erred
when it rejected his requested jury instruction on the defense of
reliance on advice of counsel.
Field was Hoffecker’s long-time friend and former business
associate. Indeed, in July 1990, Field was his substitute counsel of
record in a Federal Trade Commission (“FTC”) action, FTC v.
Uni-Vest Financial Services & Charles P. Hoffecker, et al., No. 89-
6382 (S.D. Fla.), which was filed in 1989 and was settled on July
15, 1991. But Field was only one of Hoffecker’s attorneys as he
was sued in over 100 other actions brought by the National Futures
Association (“NFA”) and the Commodity Futures Trading
12
Commission (“CFTC”), and he hired attorneys other than Field to
represent him in those cases.
In June 1996, Field reestablished contact with Hoffecker so
that he could serve as a confidential informant for the Government.
This initiation of contact from the outside of the current
relationship between the confidential informant, Field, and the
defendant, Hoffecker, gave the Government and the informant the
opportunity to ensure that the informant kept his legal activities out
of his dealings with Hoffecker, and Field and the Government took
full advantage of this opportunity. Moreover, before this reunion,
Field and Hoffecker essentially had been out of contact for
approximately three years, a lapse of time that assisted Field in
renewing their relationship on a basis other than that of an attorney
and client. During their first renewed encounter, the two discussed
a potential business arrangement involving the Amitex scheme:
Hoffecker: Jack, I would like to do some business
with you.
Field: I’d like to do that, too.
Supp. app. at 2. Later that same day, Field rejected any suggestion
that he would be serving as an attorney to Hoffecker, Myers,
Global, or Amitex:
Field: . . . I’m sure I don’t want to be a
lawyer on this.
....
Hoffecker: Okay. Okay.
Field: I can find you. I know a good law
firm over there.
Hoffecker: . . . You don’t have to be a lawyer on
this, you could be a contributor,
partner, a uh you know.
Field: Consultant.
13
Hoffecker: Yeah.
Field: Business consultant.
Hoffecker: Oh, yeah.
Field: Business advisor.
Id. at 5. Excerpts from subsequent taped conversations
demonstrate that Hoffecker and Field both understood that Field
was not serving as a lawyer for Hoffecker or his entities. In fact,
on each occasion that Field made this clear, Hoffecker responded
by indicating that he understood. See, e.g., id. at 26 (Field: “I just
want to try and put a deal together so I don’t practice law
anymore.” Hoffecker: “Right, I understand.”); id. at 27d
(Hoffecker: “[Y]ou are a business man . . . . You’re not a lawyer
any more.”); id. at 33b (“Field: “I don’t want to get involved in
giving legal advice.” Hoffecker: “I understand.”). Hoffecker
indicated that he was obtaining legal advice elsewhere.
Instead of doing legal work, Hoffecker wanted Field to be
a recruiter, setting up telemarketing boiler-rooms in the United
States to solicit potential customers and generate income for
Amitex and Global, for which Field would be paid a commission:
Hoffecker: . . . [Y]ou, at this stage of the game
can get involved in us, it’s two ways,
one at the legal side, and the other . . .
.
Field: [Unintelligible.]
Hoffecker: Getting involved in dealer networking
with us. That’s where the money is.
Field: Okay. Okay. I don’t want to do any,
any legal work.
Id. at 23-24.
Hoffecker: My thought was that basically what I
14
would do, is I would put together a
retail sales organization and that I
would get someone like Jack [Field]
or get Jack to be involved from a, uh,
you know a business side. Where
Jack could go out and hustle dealers,
and sellers, basically.
Id. at 33.
Hoffecker arranged to compensate Field based on the
interest charges generated from the purported loans Amitex
extended to its customers, as well as the fees for the purported
purchase and sale of physical commodities in the boiler-rooms
Field set up. In short, Hoffecker and Field understood that Field
would derive his compensation exclusively from the business he
generated, apparently on the theory that you eat what you kill.
Thus, Field did not receive a legal retainer or have a fee
arrangement with Hoffecker or Amitex, and Hoffecker never paid
Field for any legal services in the Amitex-Global scheme.
During the course of the investigation, the Government,
which was aware of the potential attorney-client relationship
problem, instructed Field to state to Hoffecker clearly and
repeatedly that he was not serving as legal counsel to Hoffecker or
others. Hoffecker inadvertently accommodated the Government by
repeatedly affirming his understanding that Field was serving as a
business associate and not as legal counsel. Government
investigators ensured that Field’s prior legal work would not
become implicated in the case by not inquiring about any previous
privileged communications between Field and Hoffecker and by
instructing Field not to divulge any potentially protected previous
communications. To further ensure that such communications
were not divulged, the Government employed a “taint team” to
review all of the recorded conversations between Field and
Hoffecker.
Before the first trial, Hoffecker moved to dismiss the
indictment based on his claim that the Government had engaged in
15
outrageous conduct. In the alternative, Hoffecker moved to
suppress evidence of his conversations with Field. After several
days of hearings, the District Court issued oral and written findings
that there had not been an attorney-client relationship between
Field and Hoffecker and denied Hoffecker’s motions.
We review the District Court’s rulings on the outrageous
conduct claim recognizing that “[b]ecause outrageous government
conduct, a constitutional claim, is a mixed question of law and fact,
‘[w]e exercise plenary review over the district court’s legal
conclusions, and review any challenges to the court’s factual
findings for clear error.’” United States v. Lakhani, 480 F.3d 171,
181 (3d Cir. 2007) (second alteration in original) (quoting United
States v. Nolan-Cooper, 155 F.3d 221, 229 (3d Cir. 1998)). We
also are aware that we repeatedly have noted that we are
“extremely hesitant to find law enforcement conduct so offensive
that it violates the Due Process Clause.” United States v. Voigt, 89
F.3d 1050, 1065 (3d Cir. 1996). The Government’s conduct can be
regarded as so offensive that it requires the dismissal of an
indictment only if it is “most intolerable.” United States v.
Jannotti, 673 F.2d 578, 608 (3d Cir. 1982). Thus, a court should
not dismiss an indictment “‘each time the government acts
deceptively or participates in a crime that it is investigating.’”
Nolan-Cooper, 155 F.3d at 231 (quoting United States v. Mosley,
965 F.2d 906, 910 (10th Cir. 1992)).
To elevate a violation of the attorney-client privilege to a
constitutional claim of outrageous misconduct, a defendant must
demonstrate “(1) the government’s objective awareness of an
ongoing, personal attorney-client relationship between its
informant and the defendant; (2) deliberate intrusion into that
relationship; and (3) actual and substantial prejudice.” Voigt, 89
F.3d at 1067 (footnote omitted).
The District Court found that the Government did not
engage in outrageous conduct because there was not an attorney-
client relationship between Field and Hoffecker at the time of the
investigation when Field was pursuing his confidential activities.
Accordingly, the relationship between Hoffecker and any person
or entity involved in this case and Field could not satisfy the first
Voigt requirement for a finding of outrageous misconduct. Indeed,
16
the court stated that “there barely was a former relationship in the
traditional and understood sense of attorney-client . . . .” App. vol.
8 at 35. The court found that “the government was well aware of
a potential attorney-client relationship problem, took steps to avoid
it, or screen for it.” Id. at 37-38. Accordingly, the court found that
“notwithstanding a prior attorney-client relationship, Field could
nonetheless be a government informant without running afoul of
attorney-client law.” Id. at 34. The court found that the recorded
conversations among Hoffecker, Field, and others occurred in the
context of “build[ing] Field into the existing business entity,” id. at
12, and establishing Field as a business associate who would help
Amitex establish sales rooms, from which Field would earn a
commission. The court further found that Hoffecker could not
have had any objectively reasonable understanding that Field was
functioning as his attorney. The court found that, instead,
Hoffecker’s “objectively reasonable understanding” was that Field
was his “business partner,” who would be compensated as a
“business co-venturer, and that Field would not be taking the legal
end, but rather the networking room related end . . . .” Id. at 34.
The court noted that “[i]t would be clearly unreasonable for
Hoffecker to believe, based upon what was said, that Field was his
lawyer. Hoffecker made it clear he had lawyers.” Id. at 34.
Accordingly, the court found that Hoffecker had not shown that the
Government’s conduct was outrageous.
Notwithstanding the voluminous evidence showing that
Field repeatedly told Hoffecker that he did not want to act as his
lawyer, Hoffecker contends that there was an attorney-client
relationship between him and Field during the Government’s
investigation and points to a number of snippets of conversation
between the two men that he contends support his claim. For
example, Hoffecker claims that “Field acknowledged Field’s role
as a ‘legal counsel or legal consultant . . . .’” Appellant’s Br. at 21.
In context, however, Field actually was making clear that he was
not serving as Hoffecker’s legal counsel:
Hoffecker: So, basically, if we, if you could get us
some rooms and we could use, you
know, have you as a, as a, a legal
counsel or, or legal consultant, let’s
say . . . .
17
Field: As a business consultant. I don’t want
to, I don’t want to do law practice. I
don’t want to do legal shit.
Hoffecker: A business consultant from a, from a
legal standpoint.
Field: I can business consult on what I think
is the way to set it up and ways to set
it up. That’s just from strictly
business side. Once it’s set up, you
probably need somebody to look at it
and give you an opinion letter.
Hoffecker: Right.
....
Hoffecker: . . . [W]ell you can call it business
consulting, you can call it legal
consulting, I don’t care what you call
it, you know I mean we know that you
have a legal mind that’s, that’s one of
the better ones so we understand that
that’s, that, that any kind of business
consulting see would be from a legal
twist, I’m sure.
Field: It would be from my background
experience but it wouldn’t be real
legal advice, I just, I just don’t want to
get in that box, frankly. I don’t like
doing that, I’ve done it too damn long,
and I don’t want to be limited in
making money to what lawyers’ fees
are.
Hoffecker: I see.
18
Supp. App. at 17-18. The other pieces of conversation that
Hoffecker cites as support for his claim of outrageous Government
conduct similarly do not support his claim and, when viewed in
context, instead refute it and we see no reason to recount them
here.
Hoffecker also claims that the declaration of Christopher
Holly “confirms” Field’s status as a lawyer for Hoffecker. In fact,
Holly merely stated that he was present on five or six occasions
between June 1993 and May 1995 when Field and Hoffecker
purportedly had phone conferences involving a CFTC case against
Hoffecker. Holly’s declaration does not mention specific subjects
discussed, but generally states that Field offered legal advice to
Hoffecker in these 1993-1995 conversations. The District Court
found that Holly, like other persons surrounding Hoffecker, used
Field as a “strategist,” but that use did not create an attorney-client
relationship between Field and Hoffecker during the 1993-1995
period, let alone when Field cooperated with the Government in
1996-1998. The District Court’s finding surely is unassailable
under any standard of review.
Hoffecker next claims that the testimony of John Leubsdorf,
who was qualified as a professional responsibility expert,
demonstrates that Field’s and Hoffecker’s interactions “impacted”
on an existing legal representation. Appellant’s Br. at 24. In
analyzing Leubsdorf’s testimony, however, the District Court noted
that even Leubsdorf would agree that the professional
responsibility rules do not apply in the absence of an attorney-
client relationship. Because a past attorney-client relationship does
not establish that an attorney-client relationship continues until a
later time, United States v. Evans, 113 F.3d 1457, 1463 (7th Cir.
1997), Hoffecker’s claim only can succeed if he shows that he and
Field had an attorney-client relationship between 1996 and 1998.
Even if we exercised plenary review of all aspects of
Hoffecker’s outrageous conduct claim, we would conclude that the
District Court correctly determined that Hoffecker and Field had a
business relationship, not an attorney-client relationship, during the
Government’s investigation when Field was acting as its informant.
Indeed, we cannot help but wonder why Field’s extraordinary
efforts to keep an attorney-client relationship out of his dealings
19
with Hoffecker did not cause such an experienced confidence man
to be suspicious of Field but apparently they did not.
Surely there is a delicious irony in the circumstance that
Field and the Government conned the con man. Overall, to call the
evidence supporting Hoffecker’s claim “thin” would be generous
as “microscopic” would be the more appropriate word. There was
no evidence showing that Field acted as Hoffecker’s attorney; in
fact, at every opportunity Field reminded Hoffecker that he was not
his attorney and did not want to be his attorney. Their relationship
during the Amitex investigation was not that of an attorney and a
client, and did not come close to being one. Hoffecker has not
shown that Field acted as a legal advisor to him, Amitex, or Global,
or that it was reasonable for Hoffecker to believe that Field was
acting as his attorney. Accordingly, we conclude that that the
Government’s investigation did not interfere with an attorney-client
relationship between Hoffecker and Field as there was no
relationship with which to interfere and therefore the District Court
properly denied Hoffecker’s motion to dismiss the indictment or
suppress evidence.
We next consider whether the District Court erred in
refusing to give a jury instruction on the defense of reliance on
advice of counsel that Hoffecker requested. We consider this point
on an abuse of discretion basis. See United States v. Leahy, 445
F.3d 634, 642 (3d Cir. 2006). Certainly a district court is “bound
to give the substance of a requested instruction relating to any
defense theory for which there was any foundation in the
evidence.” United States v. Blair, 456 F.2d 514, 520 (3d Cir.
1972). But a court
also ha[s] to avoid diverting the jury by idle
speculation and frivolous considerations. A
confused jury can give as improper a verdict as one
which has failed to receive some significant
instruction. Therefore, the charge should direct and
focus the jury’s attention on the evidence given at
trial, not on far fetched and irrelated ideas that do not
sustain a defense to the charges involved.
Id. (citation omitted).
20
There was no evidence that Hoffecker and Field had an
attorney-client relationship between 1996 and 1998, or that Field
gave him legal advice, on which Hoffecker relied. As the District
Court found, Hoffecker’s argument that Field “performed a legal
function” was “specious.” App. vol. 53 at 84. Inasmuch as there
was no evidentiary support for the instruction, the court correctly
did not give the instruction which would have been unjustified and
confusing to the jury. Accordingly, the District Court did not
abuse its discretion when it rejected Hoffecker’s requested advice
of counsel instruction. Indeed, it would have been legal error for
the court to have given the charge and thus, even on a plenary
review basis, we would reach the same result that we reach on this
point.
2. Statute of Limitations Issues
Hoffecker next raises statute of limitations issues, primarily
with respect to the mail fraud charges in Counts Two and Three of
the indictment and the conspiracy to commit mail and wire fraud
charge in Count One, though he does contend that the statute of
limitations should have barred this entire case. These issues, as
will be seen, potentially raise the most far-reaching precedentially
significant legal matters on this appeal, but in the end the
application of conventional principles controls them.
The statute of limitations requires that indictments for mail
fraud and for conspiracy to commit mail and wire fraud must be
“found” within five years of the commission of the offenses. See
18 U.S.C. § 3282(a). “An indictment is found when it is returned
by a grand jury and filed.” United States v. Oliva, 46 F.3d 320,
324 (3d Cir. 1995). The statute begins to run for mail fraud when
a defendant “places, deposits, causes to be deposited, takes, or
receives mail, or knowingly causes mail to be delivered, as part of
the execution of a scheme to defraud,” United States v. Pharis, 298
F.3d 228, 234 n.3 (3d Cir. 2002) (citation and quotation marks
omitted), and for conspiracy when the conspirators commit the last
overt act in furtherance of the conspiracy, United States v. Jake,
281 F.3d 123, 129 n.6 (3d Cir. 2002).
There is, however, a critical variation in the calculation of
the limitations period when the Government requests assistance
21
from a foreign country to gather evidence of offenses for in such
situations it can apply to a district court to enter an order
suspending the running of the statute of limitations pursuant to 18
U.S.C. § 3292 which provides:
(a)(1) Upon application of the United States, filed
before return of an indictment, indicating that
evidence of an offense is in a foreign country, the
district court before which a grand jury is impaneled
to investigate the offense shall suspend the running
of the statute of limitations for the offense if the
court finds by a preponderance of the evidence that
an official request has been made for such evidence
and that it reasonably appears, or reasonably
appeared at the time the request was made, that such
evidence is, or was, in such foreign country. (2) The
court shall rule upon such application not later than
thirty days after the filing of the application.
(b) Except as provided in subsection (c) of this
section, a period of suspension under this section
shall begin on the date on which the official request
is made and end on the date on which the foreign
court or authority takes final action on the request.
(c) The total of all periods of suspension under this
section with respect to an offense – (1) shall not
exceed three years; and (2) shall not extend a period
within which a criminal case must be initiated for
more than six months if all foreign authorities take
final action before such period would expire without
regard to this section.
(d) As used in this section, the term ‘official request’
means a letter rogatory, a request under a treaty or
convention, or any other request for evidence made
by a court of the United States or an authority of the
United States having criminal law enforcement
responsibility, to a court or other authority of a
foreign country.
22
Congress enacted section 3292 in response to “[t]he use of offshore
banks to launder the proceeds of criminal activities and to evade
taxes,” which “ha[d] become an increasing problem for federal
prosecutors.” H.R. Rep. No. 98-907, at 2 (1984), reprinted in 1984
U.S.C.C.A.N. 3578, 3578. Congress explained that:
Once funds are traced to offshore banks, federal
prosecutors face serious difficulties in obtaining
records from those banks in both the investigative
and trial stages of a prosecution. . . . The
procedures that must be undertaken in other
countries in order to obtain the records generally
take a considerable period of time to complete. . . .
If the records are essential to the bringing of charges,
the delay in getting the records might prevent filing
an information or returning an indictment within the
time period specified by the relevant statute of
limitation.
Id. at 2-3, reprinted in 1984 U.S.C.C.A.N. 3578, 3578-79.
The indictment charged Hoffecker with three counts of mail
fraud and one count of conspiracy to commit mail and wire fraud.
The mail fraud charged in Count Two was based on a mailing sent
on June 23, 1997, the mail fraud charged in Count Three was based
on a mailing sent on August 31, 1997, and the mail fraud charged
in Count Four was based on a mailing sent on March 4, 1998. The
last overt act in furtherance of the conspiracy charged in Count
One was the March 4, 1998 mailing. Thus, absent a suspension of
the statute of limitations, the Government was required to obtain
indictments against Hoffecker no later than June 23, 2002, on
Count Two, August 31, 2002, on Count Three, and March 4, 2003,
on Counts One and Four.
On March 13, 2002, before the statute of limitations had
expired on any of these offenses, the Government sought assistance
from the government of the Bahamas to obtain Amitex’s banking
records invoking a Mutual Legal Assistance Treaty. Nearly eight
months later, on November 5, 2002, the Bahamas sent the
Government a portion of the requested documents.
23
On December 23, 2002, after the statute of limitations
absent suspension would have expired on Counts Two and Three
but before it would have expired on Counts One and Four, the
Government applied ex parte to the grand jury supervising judge to
suspend the statute of limitations pursuant to section 3292 for the
238-day period between March 13, 2002 and November 5, 2002.
The court granted the application and ordered a 238-day
suspension. The grand jury then indicted Hoffecker on Counts One
through Four on February 14, 2003. Clearly if the 238-day period
is excluded the entire indictment on its face was timely.
Hoffecker nevertheless contends that the conspiracy charge
in Count One was untimely because the March 4, 1998 mailing was
not in furtherance of the conspiracy and thus the last overt act of
the conspiracy occurred more than five years before the indictment
was found. Accordingly, he argues that we should dismiss Count
One because the District Court did not instruct the jury on the
limitations defense. Of course, this argument applies to Count
Four as well.
Hoffecker also argues that we should dismiss the mail fraud
charges in Counts Two and Three on the basis of the Government’s
application to suspend the running of the statute of limitations
having been improper (1) because the proceeding before the grand
jury judge was ex parte; (2) the Government filed the application
after it had received all of the evidence from the Bahamas; and (3)
the Government filed the application after the statute of limitations
already had expired on the mail frauds charged in Counts Two and
Three.
Before we can consider these claims on their merits,
however, we must address the procedural question of whether
Hoffecker has waived any of the issues he now advances for
purposes of this appeal. There are two ways by which Hoffecker
could have waived his claims: failing to raise an issue in the
District Court before or at trial, see United States v. Karlin, 785
F.2d 90, 92-93 (3d Cir. 1986), or failing to identify or argue an
issue in his opening brief on appeal, see United States v. Pelullo,
399 F.3d 197, 222 (3d Cir. 2005).
To consider the waiver issue, we have delved intensely into
24
the procedural history of the case by studying its massive record.
Before Hoffecker’s first trial, he moved to dismiss the indictment
as untimely. See Supp. app. vol. 61 at 1-15. In that motion, he
argued that the conspiracy charged in Count One was untimely
because the indictment was found more than five years after the
final overt act of the conspiracy. Hoffecker also argued that the
Government’s ex parte section 3292 suspension application was
improper and the District Court should have required the
Government to reveal to him the documents relevant to its
application. Finally, Hoffecker stated:
The court suspended the statute of limitations from
March 13, 2002 to November 5, 2002, a period of
some seven months. The order did so after the stated
period had already elapsed, in contravention with the
statutory language that permits suspending ‘the
running of the statute of limitations . . . .’ Once the
specific period has already run, an extension order
that attempts to reach back into time is inconsistent
with the statutory authorization.
Id. at 12-13. Clearly Hoffecker intends this paragraph to
correspond with his argument that the Government’s section 3292
suspension application was improper because the Government filed
it after the statute of limitations had expired on Counts Two and
Three. Significantly, however, in his motion Hoffecker did not
contend that the Government did not move properly to suspend the
statute of limitations pursuant to section 3292 because it filed the
suspension application after receiving all of the evidence from the
Bahamas. After oral argument, the District Court denied the
motion. App. vol. 2 at 1-26. The case then proceeded to trial and,
as we stated above, ended in a mistrial.
After the mistrial but before the retrial, we filed our opinion
in United States v. Atiyeh in which we held that a district court
may not suspend a statute of limitations pursuant to section 3292
when the Government applies for suspension after it already had
received all requested foreign evidence. 402 F.3d 354, 362-67 (3d
Cir. 2005). Hoffecker, however, did not renew his motion to
dismiss the indictment on statute of limitations grounds after the
mistrial and he did not bring Atiyeh to the District Court’s
25
attention. Hoffecker, however, did request a jury instruction on the
statute of limitations defense at the second trial. The District Court
rejected this request.
We find that because Hoffecker did not at any time in the
District Court contend that the Government’s suspension
application was improper because the Government filed the
application after it had received all of the evidence from the
Bahamas, he has waived the issue. See Karlin, 785 F.2d at 92-93.
In this regard we point out that in Brenner v. Local 514, United
Bhd. of Carpenters and Joiners of Am. we indicated that “[i]t is
well established that failure to raise an issue in the district court
constitutes a waiver of the argument.” 927 F.3d 1283, 1298 (3d
Cir. 1991); Jake, 281 F.3d at 129 (“the statute of limitations is an
affirmative defense that is waived unless properly preserved”).
In any event, even if we held that Hoffecker had not waived
this issue, we would not dismiss Counts Two and Three on
Hoffecker’s theory that the Government filed its suspension
application after it received all the requested evidence from the
Bahamas. In Atiyeh we determined that under section 3292 the
Government must indicate in its application that the evidence is in
a foreign country at the time of the application, and thus the
Government must file its application with the grand jury judge
before the Government “has received all requested foreign
evidence from foreign authorities . . . .” 402 F.3d at 362. In that
case, the Government’s section 3292 application represented that
it had received “all” of the requested foreign evidence at least two
months before it applied to the grand jury judge to suspend the
statute of limitations, and the application “did not precisely state
that evidence of offenses ‘is in a foreign country.’” Id. at 362-63.
Because in Atiyeh the Government in its application failed to make
the required assertion and filed its application after it had received
all of the requested documents, we dismissed as time-barred
several counts on which the statute of limitations had run.
In this case, by contrast, the Government filed its suspension
application after receiving some, but not all, of the requested
foreign evidence from the Bahamas. As the testimony of both
Government and defense expert witnesses confirmed, the
Bahamian bank documents sent to the Government were
substantially incomplete. Moreover, the Government never
26
represented in its suspension application that it had received “all”
of the evidence or that evidence was no longer in the Bahamas.
According to the Government, the application stated that “[t]he
undersigned [AUSA] believes that evidence of the indictable
offenses presently being investigated is located in a foreign
jurisdiction.” Appellee’s Br. at 53 (alterations in original). Thus,
the Government’s application here is unlike the application that fell
short in Atiyeh. Because the Government applied to suspend the
statute of limitations before it received all of the evidence from the
Bahamas and stated in its application that it believed that evidence
of the offenses “is” located in the Bahamas, we would not dismiss
Counts Two and Three on the basis of Atiyeh even if Hoffecker
had preserved the issue for appeal. Finally on this point we
mention the obvious: it does not matter whether the Government
receives any additional materials after it makes its request to the
foreign country. The question is whether at the time of its
application to suspend the running of the statute of limitations the
Government had received all the requested documents that were in
the foreign country.3
3
Although our opinion in Atiyeh primarily involved the
proper interpretation of section 3292(a)(1), which is concerned
with when a request for suspension of the running of the statute of
limitations must be made, we also indicated that when the
Government “has received all requested foreign evidence from
foreign authorities” there has been final action within section
3292(b) dealing with the period of the suspension. 402 F.3d at
362-63. It is appropriate for us to comment further on the meaning
of final action within section 3292.
We reiterate that unlike section 3292(a)(1), which sets out
the timing requirements for the Government to make its application
to suspend the statute of limitations and the findings that the district
court must make before it grants the application and does not use
the term “final action,” section 3292(b) is concerned with the start
and end dates for the period of suspension after the court grants the
Government’s application. It states in pertinent part that the period
of suspension “shall begin on the date on which the official request
is made and end on the date on which the foreign court or authority
takes final action on the request.” 18 U.S.C. § 3292(b). Of course,
27
section 3292(c) places a further limit on the length of the period of
suspension: “[t]he total of all periods of suspension under this
section with respect to an offense . . . shall not exceed three years
. . . .”
Other courts of appeals have concluded that the “final
action” for purposes of section 3292(b) occurs when the foreign
authority makes a dispositive response to each of the items listed
in the government’s official request. See United States v. Hagege,
437 F.3d 943, 955 (9th Cir. 2006) (“‘[F]inal action’ for purposes of
§ 3292 means a dispositive response by the foreign sovereign to
both the request for records and for a certificate of authenticity of
those records, [when] both [a]re identified in the ‘official request.’”
(second and third alterations in original) (quoting United States v.
Bischel, 61 F.3d 1429, 1434 (9th Cir. 1995)); United States v.
Torres, 318 F.3d 1058, 1065 (11th Cir. 2003) (“‘[F]inal action’ for
the purposes of § 3292(b) occurs when a foreign court or authority
provides a dispositive response to each of the items listed in the
government’s official request for information.”); but see United
States v. Meador, 138 F.3d 986, 992 (5th Cir. 1998) (concluding
more narrowly that “final action” occurs “when the foreign
government believes that it has completed its engagement and
communicates that belief to our government”). Under these cases,
a refusal to supply any evidence would be the foreign
government’s final action. We note that these cases apparently
adopt a meaning of final action that differs from Atiyeh’s definition
of “final action.” On the other hand, however, Atiyeh merely may
have set forth nonexclusively one basis for concluding that there
has been a “final action.”
In this case the Government in its brief stated that
November 5, 2002 – the date on which the government of the
Bahamas provided some of the requested evidence – was the date
of “final action,” even though the response was incomplete, and the
Government filed its application to suspend the statute after that
date. Appellee’s Br. at 46, 53. Thus, the Government’s
understanding of the meaning of final action might differ from that
in Atiyeh. If under Atiyeh the “final action” occurs only when the
Government receives all of the requested evidence, then the
28
Government’s statement that it filed its application after the “final
action” was incorrect because it had not received all of the
requested evidence when it filed its application. In these
circumstances, we would find that the Government’s application
was not improper because it was filed before it had received all of
the evidence, as required by section 3292(a)(1), and the period of
suspension would run from the date of the Government’s official
request for evidence until the date that the Government received all
of the requested evidence. Inasmuch as it never has received all of
the requested evidence, the period of suspension would have ended
three years after the Government made its request for evidence
pursuant to section 3292(c).
If, on the other hand, Atiyeh sets forth an exclusive basis for
a finding that there has been final action on its request and that
interpretation is incorrect, and the “final action” does not occur
when the Government has received all requested evidence, but,
instead, occurs when the foreign government makes a dispositive
response to the Government’s request, then the Government’s
statement that it filed its application after the “final action” was
correct because it filed the application after the foreign government
made its dispositive response. In these circumstances, we still
would find that the Government’s application was not improper
because the Government filed it before it had received all of the
evidence, as required by section 3292(a)(1), even though the period
of suspension would run from the date of the Government’s official
request for evidence until the date that the foreign government took
its “final action” by responding to the Government’s request on
November 5, 2002.
Inasmuch as under either definition the Government’s
application was not improper because regardless of when, if ever,
the foreign government took final action on its request, the
Government filed its suspension application when evidence sought
was within the foreign country, we conclude that it is not necessary
to decide when there has been a final action within section 3292(b).
Moreover, we point out that the parties in this case have not
litigated the issue of the proper definition of final action under
section 3292(b). Accordingly, we will refrain from discussing the
29
Next we will consider whether Hoffecker has waived his
contention that the Government’s section 3292 suspension
application was improper because the Government filed it after the
statute of limitations already had expired for Counts Two and
Three. Although Hoffecker may have raised this issue before the
District Court in his motion to dismiss the indictment, he did not
raise the issue in his opening brief before this Court. Instead, after
briefing by both parties had been concluded, he filed a letter in
which he appeared to raise the issue. See Appellant’s Letter (filed
Nov. 9, 2007). Hoffecker attempted to file this letter pursuant to
Federal Rule of Appellate Procedure 28(j), which provides in
pertinent part that:
[i]f pertinent and significant authorities come to a
party’s attention after the party’s brief has been filed
– or after oral argument but before decision a party
may promptly advise the circuit clerk by letter, with
a copy to all other parties, setting forth the citations.
The letter must state the reasons for the supplemental
citations, referring either to the page of the brief or
to a point argued orally.
In his letter, Hoffecker wrote that he wanted to bring to our
attention the decision in United States v. Kozeny, 493 F. Supp. 2d
693 (S.D.N.Y. 2007), in which the district court dismissed several
counts of an indictment because the Government filed its section
3292 suspension application after the statute of limitations already
had expired on those counts. In citing Kozeny it appears that
Hoffecker suggested – although he does not explicitly state as
much in his letter – that in this case Counts Two and Three were
time-barred because the Government filed the section 3292
suspension application after the statute of limitations period had
expired on these counts.
In yet another filing submitted to this Court after the briefs
were filed, Hoffecker claims that he did raise this issue in his
opening brief on appeal. Appellant’s Mot. to Strike Government’s
Unauthorized and Inaccurate Post-Argument Letter Submission to
matter further.
30
Appellate Panel at 3-4 (filed March 18, 2008). Hoffecker points to
a footnote in his opening brief that states: “The statute of
limitations expired for Counts 2 (mailing dated June 23, 1997) and
3 (mailing sent August 31, 1997).” Appellant’s Br. at 31 n.9. This
statement is the only one in the opening brief that Hoffecker
contends raised this issue.
This one-sentence footnote falls far short of meeting the
requirement that an appellant raise an issue in his opening brief or
else waive the issue on appeal. See Pelullo, 399 F.3d at 222 (“It is
well settled that an appellant’s failure to identify or argue an issue
in his opening brief constitutes waiver of that issue on appeal.”).
An appellant’s brief must contain his or her argument, which must
incorporate “appellant’s contentions and the reasons for them, with
citations to the authorities and parts of the record on which the
appellant relies . . . .” Fed. R. App. P. 28(a)(9)(A). See United
States v. DeMichael, 461 F.3d 414, 417 (3d Cir. 2006) (“An issue
is waived unless a party raises it in its opening brief, and for those
purposes a passing reference to an issue will not suffice to bring
that issue before this court.” (citation omitted)); United States v.
Irizarry, 341 F.3d 273, 305 (3d Cir. 2003) (“An appellant who falls
to comply with this requirement fails to preserve the arguments that
could otherwise have been raised.”); United States v. Dunkel, 927
F.2d 955, 956 (7th Cir. 1991) (per curiam) (“A skeletal ‘argument’,
really nothing more than an assertion, does not preserve a claim.
Especially not when the brief presents a passel of other arguments,
as [defendant]’s did. Judges are not like pigs, hunting for truffles
buried in briefs.” (internal citation omitted)). In his footnote,
Hoffecker does not explain his contention or the reason for it, and
does not include citations to authority or the parts of the record on
which he relies. Hoffecker makes no reference to section 3292 or
the issue of whether the Government’s suspension application was
improper because it was filed after the statute of limitations already
had expired on Counts Two and Three. Indeed, the footnote is
appended to text in which Hoffecker argues that the conspiracy
charged in Count One was time-barred because the final overt act
of the conspiracy occurred more than five years before the
indictment was found, an argument independent from the issue that
Hoffecker now seeks to raise.
For the same reasons, we cannot construe Hoffecker’s
31
opening brief’s statement that “[t]he procedure used by the
government to suspend the statute of limitations pursuant to 18
U.S.C. § 3292 to permit it to obtain evidence in a foreign country
did not satisfy the statute[,]” Appellant’s Br. at 27, as raising the
issue of whether the Government’s application was improper on the
basis that the Government filed it after the statute of limitations
already had expired for Counts Two and Three. Although this
sentence mentions section 3292, it does not construct any argument
about the limitation period already having expired.
Inasmuch as Hoffecker did not raise in his opening brief the
issue of whether the section 3292 suspension application was
improper because the Government filed it after the statute of
limitations had expired on Counts Two and Three, he has waived
the issue. Moreover, he cannot seek to raise the argument in a Rule
28(j) letter when he has not raised it in his opening brief.
Inasmuch as Hoffecker waived the issue, we need not consider
whether the Government’s section 3292 suspension application was
improper on the ground that the Government filed it after the
statute of limitations had expired on Counts Two and Three.4
4
Though we do not decide the case on this basis, Judge
Greenberg and Judge Roth point out that under section 3292 there
is no express requirement that the application to suspend the statute
of limitations must be made before the statute has run. In this
regard they point out that under section 3292(b) the period of
suspension begins to run when the official request for evidence is
made to a foreign country and not when the suspension application
is made. Accordingly, the order suspending the statute of
limitations necessarily must be retroactive as it cannot be entered
until after the request has been made to the foreign country and the
order when entered is effective as of the day the request was made.
Thus, as a matter of statutory construction there is no reason why
a case seemingly barred by the statute of limitations cannot be
revived by a section 3292 application made before the Government
has received all of the requested foreign evidence. In Judge
Greenberg’s and Judge Roth’s view, the plain language of section
3292 makes the indictment timely as to all counts here. In making
this observation Judge Greenberg and Judge Roth further point out
that what they regard as this clear application of the statute does
32
The Government contends that Hoffecker also has waived
the issues of whether Count One’s conspiracy charge was untimely
on Hoffecker’s theory that the indictment was found more than five
years after the final overt act of the conspiracy and the ex parte
nature of the Government’s § 3292 tolling application was
improper.
According to the Government, although Hoffecker raised
these issues before the District Court in his motion filed before the
first trial and also raised them in his opening brief on appeal,
Hoffecker needed to renew his motion in the District Court after
the mistrial before the second trial to preserve these claims for
appeal. The Government relies for this argument on United States
v. Akers, 702 F.2d 1145 (D.C. Cir. 1983), where the Court of
Appeals for the District of Columbia Circuit stated that a trial
court’s admission of evidence in a trial that ends in a mistrial does
not justify a defendant’s reliance that the judge would admit the
evidence in the retrial. In Akers the court stated:
No doctrine of the law of the case operates under
these circumstances. The evidentiary ruling at issue
was rendered in a new trial which was ordered
pursuant to a mistrial. When, as here, ‘the previous
trial [is] a nullity,’ the court in the new trial tries ‘the
case as if it were being tried for the first time . . . , as
if there had been no prior trial.’
Id. at 1148 (footnotes omitted) (emphasis and alterations in
original) (quoting Hobbs v. Maryland, 191 A.2d 238, 239 (Md.
1963)). The court concluded:
not mean that section 3292 effectively eliminates the statute of
limitations for cases it governs for the period of the suspension
begins to run when the request for the evidence is made. Thus, the
statute of limitations cannot be revived by an official request to a
foreign government made after the limitations period has run. In
any event, there is a three-year statutory limitation in section
3292(c) on the suspension period so there is a limit in all cases of
the possible length of an extension.
33
The mere fact that the same judge happened to be
sitting did not entitle counsel to assume that the
judge would rule the same way especially since the
judge’s exercise of his broad discretion on an
evidentiary ruling (which ultimately pertains to
relevancy) must turn upon the evidence as developed
in the particular trial.
Id. (footnote omitted); see also United States v. Gomez, 67 F.3d
1515, 1526 n.13 (10th Cir. 1995) (defendant’s objection to
admission of evidence made during first trial does not preserve
issue for appeal after retrial).
In this case, however, we are dealing with the District
Court’s ruling on Hoffecker’s motion to dismiss the indictment on
limitations grounds, not an evidentiary ruling. The District Court
made this ruling before the first trial started, and the ruling did not
“turn upon the evidence as developed in the particular trial.”
Akers, 702 F.2d at 1148.
Other courts have distinguished Akers on this basis. The
Court of Appeals for the District of Columbia Circuit itself later
rejected the argument that Akers stands for the proposition that
after a mistrial a defendant must re-raise every issue to preserve
those issues for appeal. See United States v. Sanders, 485 F.3d
654, 657 (D.C. Cir. 2007). In Sanders, prior to the trial the district
court declined to dismiss the case for violations of the Speedy Trial
Act. Id. at 656. After the jury was unable to reach a verdict, the
district court declared a mistrial. Id. at 655-56. The defendants did
not advance the Speedy Trial Act contention before the second
trial, and the jury found them guilty. Id. at 656-57. On appeal, the
Government contended that the defendants waived their rights
under the Speedy Trial Act by failing to renew the Speedy Trial
Act objection at the second trial. Id. at 657. The court found that
the defendants had not waived the issue:
Akers does not support a requirement to relitigate all
pretrial issues before a second trial. Although the
partial mistrial and partial grant of a new trial
nullified the original trial, those rulings did not
nullify all proceedings. For example, the indictment
34
underlying the speedy trial issue was not
compromised by the first jury’s failure to reach a
unanimous verdict on all counts. . . . In any event,
the law-of-the-case doctrine underlying Akers does
not support the government’s position. In
Christianson v. Colt Industries Operating Corp., 486
U.S. 800, 816, 108 S. Ct. 2166, 100 L. Ed. 2d 811(1988), the Supreme Court summarized the doctrine
as providing that ‘when a court decides upon a rule
of law, that decision should continue to govern the
same issues in subsequent stages [in] the same case.’
For mid-trial evidentiary rulings, a new trial will
result in different factual and evidentiary
circumstances occasioning a new exercise of the
district court’s discretion. However, an alleged
violation of the Speedy Trial Act will not change
between trials and is constrained by the principle that
‘the same issue presented a second time in the same
case in the same court should lead to the same
result.’ LaShawn A. v. Barry, 87 F.3d 1389, 1393
(D.C. Cir. 1996) (en banc). Thus, requiring a
defendant to re-raise the issue upon a retrial would
be an exercise in wasteful formality.
Id.We agree with the reasoning in Sanders and find that it
applies to this case. As with the alleged violation of the Speedy
Trial Act in Sanders, the statute of limitations issues that Hoffecker
raised in his motion before the District Court in this case did not
change between the two trials. Thus, requiring Hoffecker to re-
raise those issues before the retrial would have been “an exercise
in wasteful formality.” Id.The Government also contends that United States v. Palmer,
122 F.3d 215 (5th Cir. 1997), supports its argument. In Palmer, the
district court originally denied a defendant’s motion for severance
before the first of his two trials. Id. at 220. After that trial ended
in a mistrial, the defendant did not raise the severance issue again
until after her retrial began, which was too late under Federal Rule
of Criminal Procedure 12(b)(5). Id. On appeal, the Government
35
argued that the defendant had waived her severance claim because
“the mistrial invalidated all motions made by [the defendant] at her
first trial, requiring her to reassert them at the second in a timely
manner.” Id. The Government also argued that the defendant was
“on notice that her earlier-filed motions would not be carried to the
second trial” because of a colloquy before the retrial between her
counsel and the trial court. Id. The defendant argued that she had
not waived her claim because under the law-of-the-case doctrine,
“‘when a court decides upon a rule of law, that decision should
continue to govern the same issues in subsequent stages in the same
case.’” Id. (quoting Arizona v. California, 460 U.S. 605, 618, 103
S.Ct. 1382, 1391 (1983)).
The Court of Appeals for the Fifth Circuit agreed with the
Government, reasoning:
The law-of-the-case doctrine does not . . . set a trial
court’s prior rulings in stone, especially if revisiting
those rulings will prevent error. For example, we
have held that in civil cases a district court is not
precluded by the law-of-the-case doctrine from
reconsidering previous rulings on interlocutory
orders such as summary judgment motions, as those
rulings are not immutable and lack res judicata
effect. Moreover, we have noted that district courts
hearing criminal cases may revisit pretrial issues,
such as suppression motions, upon which they have
previously ruled. Even considering the
law-of-the-case doctrine, we agree with the
government and find waiver under these
circumstances. A retrial following a mistrial is both
in purpose and effect a new trial. Accordingly,
objections made at the aborted trial have no bearing
on the retrial, as the two are entirely separate affairs.
Although formal, written motions such as severance
motions may have more of a lasting effect than
simple objections, our previous analysis of the
law-of-the-case doctrine indicates that district courts
are not always bound by their prior rulings on
pretrial motions. Here, the trial court expressed in
unambiguous terms that it would not automatically
36
revive any of [the defendant’s] pretrial motions.
Given that the trial court had the authority to
reconsider these motions, the court’s statement
placed [the defendant] under the duty to reurge them.
Id. at 220-21 (citations omitted). The court concluded by stating:
the trial judge told [the defendant] it was not safe to
assume that the court would recognize all of its
previous rulings. Thus, [the defendant] was on
notice that the trial court was not going to apply the
law-of-the-case doctrine to preserve her previous
objections. Accordingly, [the defendant] had an
obligation to reassert her severance motion in a
timely fashion if she wished to preserve error.
Failing to do so, [the defendant] waived her
severance claim.
Id. at 221. The reasoning of the court in Palmer does not apply to
this case, however, because the Government does not point to any
colloquy before the retrial between Hoffecker and the District
Court that put Hoffecker “on notice” that he must renew all
motions that he had made before the first trial. Thus, to the best of
our knowledge, unlike the court in Palmer, the District Court here
never “expressed in unambiguous terms that it would not
automatically revive any of [the defendant’s] pretrial motions.” Id.
Thus, we conclude Hoffecker did not waive his claim that
we should dismiss the conspiracy charged in Count One on his
theory that it was untimely and his further contention that the
District Court should have instructed the jury on the limitations
defense or his claim that we should dismiss the mail frauds charged
in Counts Two and Three on the theory that the Government’s
suspension application was improper because the proceeding
before the grand jury judge was ex parte. Accordingly, we will
consider these claims on their merits.
First, we will consider the issue of whether we should
dismiss the conspiracy charge in Count One because it was
untimely and the District Court did not instruct the jury on the
limitations defense. Hoffecker claims that if the jury had been so
37
instructed, it would have found that the last overt act charged in the
conspiracy – a March 4, 1998 mailing by Amitex – was not “in
furtherance” of the conspiracy, and thus the conspiracy offense was
not committed within the five-year statute of limitations.
As we stated above, an indictment for conspiracy to commit
mail and wire fraud must be found within five years of the last
overt act of the conspiracy. Jake, 281 F.3d at 129 n.6. Here, the
Government alleged that the last overt act was a mailing by Amitex
on March 4, 1998, to one of its victims, and the indictment was
found on February 14, 2003, 18 days before the statute of
limitations would have expired if its running was measured from
March 4, 1998, without taking into account the 238-day suspension
of the running of the statute of limitations. The mailing, which also
formed the basis for the mail fraud charged in Count Four, was a
letter and a check for $4,039 to Harriet Davis, who had invested
$42,903 in the scheme, purporting to send her the balance left in
her account. The Government alleged that this mailing was the
final overt act of the conspiracy charged in Count One because the
mailing was a “lulling communication,” i.e., it was intended to lull
Davis into believing she merely was an unlucky investor so that she
would not complain to regulatory authorities or report a crime.
Before the first trial, Hoffecker filed a motion to dismiss the
indictment. During oral argument, he argued that the District
Court, not the jury, should determine whether the March 4, 1998
mailing was a lulling communication. Although “[t]he
determination of when the crime has been committed for statute of
limitation purposes . . . is ordinarily a question of fact for the jury,”
Oliva, 46 F.3d at 324-25, Hoffecker explicitly asked the District
Court to decide the issue because, according to him, “under no
interpretation of the facts could this be a lulling letter,” app. vol. 2
at 13. The District Court found that the mailing was a lulling
communication in furtherance of the conspiracy and that therefore
the conspiracy count was timely.
At the charge conference during the second trial, Hoffecker
reversed his position and contended that the nature of the letter was
a factual matter for the jury to decide. The District Court found
that it had ruled definitively on the issue prior to the first trial and
stood by its initial ruling. Accordingly, it denied Hoffecker’s
38
request for a jury instruction on the limitations defense for Count
One.
We review a district court’s decisions regarding jury
instructions for abuse of discretion. Leahy, 445 F.3d at 642. We
will order a new trial on account of a district court’s refusal to give
a proposed jury instruction “only when the requested instruction
was correct, not substantially covered by the instructions given,
and was so consequential that the refusal to give the instruction
was prejudicial to the defendant.” Id. at 651 (quoting United States
v. Phillips, 959 F.2d 1187, 1191 (3d Cir. 1992)). Although it is
“well settled that a criminal defendant is entitled to an instruction
on the applicable statute of limitations,” Jake, 281 F.3d at 129, we
conclude that the District Court’s refusal to give the proposed jury
instruction was not reversible error because it was not “so
consequential that the refusal to give the instruction was prejudicial
to the defense,” Leahy, 445 F.3d at 651.
The court did not prejudice Hoffecker by its refusal to give
the instruction because it properly instructed the jury on the
elements of the mail fraud charged in Count Four, which was based
on the same mailing alleged to be the last overt act of the
conspiracy charged in Count One. The court instructed the jury
that it could return a verdict of guilty on Count Four only if it
found beyond a reasonable doubt that the March 4, 1998 mailing
was “intended to further or assist in carrying out or continuing the
scheme to defraud.” App. vol. 49 at 10; see United States v.
Copple, 24 F.3d 535, 544 (3d Cir. 1994) (“The essential elements
of the crime of mail fraud are 1) a scheme or artifice to defraud; 2)
participation by the defendant with specific intent to defraud; and
3) use of the mail in furtherance of the scheme.”).
Thus, in convicting Hoffecker of the mail fraud charged in
Count Four, the jury necessarily found beyond a reasonable doubt
that the mailing was “in furtherance” of the conspiracy charged in
Count One. Inasmuch as the jury found the mailing was in
furtherance of the conspiracy and the indictment was found within
five years of that mailing, the jury necessarily effectively found
beyond a reasonable doubt that Count Four and thus, by extension,
Count One were both timely. In these circumstances, the District
Court’s refusal to give the limitations instruction with regard to
39
Count One did not prejudice Hoffecker.
Next, we consider the issue of whether we should dismiss
Counts Two and Three on the basis of Hoffecker’s contention that
the Government’s section 3292 suspension application was
improper because the proceeding before the grand jury judge who
granted the suspension order was ex parte. The Government urges
us to apply Federal Rule of Criminal Procedure 52(b)’s “plain
error” standard of review to this issue because “[e]ven if
Hoffecker’s failure to raise his limitations defense before his
second trial did not waive the claim, it forfeited it.” Appellee’s Br.
at 51; see United States v. Olano, 507 U.S. 725, 733, 113 S.Ct.
1770, 1777 (1993) (“Waiver is different from forfeiture. Whereas
forfeiture is the failure to make the timely assertion of a right,
waiver is the intentional relinquishment or abandonment of a
known right. . . . Mere forfeiture, as opposed to waiver, does not
extinguish an ‘error’ under Rule 52(b).”) (citations and quotation
marks omitted).
As we found above, Hoffecker has preserved this issue for
this appeal. Accordingly, in considering the issue we will apply a
de novo standard of review to the District Court’s denial of the
motion to dismiss on statute of limitations grounds and we will
review the court’s factual findings underlying the legal ruling for
clear error. See United States v. Grenier, 513 F.3d 632, 636 (6th
Cir. 2008); United States v. Hagege, 437 F.3d 943, 953-54 (9th Cir.
2006); Laurino v. Tate, 220 F.3d 1213, 1216 (10th Cir. 2000).
We find that there was nothing improper about the ex parte
nature of the proceeding before the grand jury judge. As the Court
of Appeals for the Ninth Circuit explained, “[n]owhere in [section
3292] does it state that the party whose statute of limitation is being
suspended is entitled to notice or a hearing.” DeGeorge v. United
States Dist. Court for Cent. Dist. of Cal., 219 F.3d 930, 937 (9th
Cir. 2000). Significantly, to interpret section 3292 to require notice
or a hearing for a defendant “would be to ignore the traditionally
non-adversarial and secret nature of grand jury investigations.” Id.;
see also United States v. Wilson, 249 F.3d 366, 371 (5th Cir. 2001)
(“An application to toll the statute of limitations under § 3292 is a
preindictment, ex parte proceeding.”). We also point out that it
might be critical that the existence of an ongoing grand jury
40
investigation be confidential so that a potential target of an
indictment will not be aware of it. A requirement that a section
3292 application be made on notice would undermine the
confidentiality of a grand jury’s inquiry and give a potential
defendant the opportunity to flee or destroy evidence.
Accordingly, we will not reverse the convictions on Counts Two
and Three on this basis.
3. Alleged Prosecutorial Misconduct
Hoffecker claims that cumulative prosecutorial misconduct
deprived him of a fair trial. “A new trial is required on this basis
only when ‘the [ ] errors, when combined, so infected the jury’s
deliberations that they had a substantial influence on the outcome
of the trial.’” Copple, 24 F.3d at 547 n.17 (alteration in original)
(quoting United States v. Thornton, 1 F.3d 149, 156 (3d Cir.
1993)). Hoffecker points to three separate acts of alleged
misconduct.
Hoffecker first claims that the Government “hand-picked the
transcripts it believed were most helpful to its case, and provided
only those transcripts to the jury, notwithstanding that numerous
transcripts supporting the defense position had been introduced into
evidence.” Appellant’s Br. at 38. Hoffecker contends that after the
jury had deliberated for two days, defense counsel discovered that
numerous admitted transcripts and tape recordings had not been
included among the exhibits taken to the jury.
This assertion is incorrect. On the first day of jury
deliberations, defense counsel asked the court to provide full tape
recordings and transcripts that had been admitted into evidence for
the jury, not merely excerpts. The District Court granted the
request and asked the Government to remove the excerpts from the
jury room, which the Government did in the presence of defense
counsel. At that point, the Government attorney began to remove
three tapes, in the presence of defense counsel, explaining that the
tapes contained recordings of conversations involving people who
were not witnesses in the case. Defense counsel objected and the
Government did not remove the tapes.
On the second day of deliberations, defense counsel filed a
41
brief contending that an additional 47 tapes and transcripts never
had been sent to the jury room. The items involved conversations
to which neither the Government nor the defense had referred
during trial. Many were inconsequential such as Field’s telephone
calls to Hoffecker in which Field simply left a message that he had
called. According to the Government, these tapes and transcripts
had not been sent to the jury room due to a misunderstanding of the
parties’ stipulation to enter certain tapes and transcripts into
evidence.
As the District Court made clear, the Government never
“unilaterally removed” any tapes or transcripts from the jury room.
App. vol. 53 at 93-94. The court stated that it had “a problem”
with defense counsel accusing “the government of some kind of
selective removal that was secretive, sly and otherwise
inappropriate,” given the “care and open process that’s been
utilized in identifying” the items to be sent to the jury room. Id. at
10. The court explained that “[t]he attorneys at all times were free
to work with my staff, work with each other and . . . satisfy
themselves that what was in evidence was going to [the jury
room.]” Id. at 9. The court pointed out that defense counsel was
not aware of the content of the tapes that it complained the jury did
not have. Instead, it appeared to the court that defense counsel was
attempting to “dump,” id. at 26, “relatively meaningless” material
on the jury, id. at 98.
During counsel’s argument on the issue, late in the
afternoon of the second day of deliberations, the jury sent the court
a note requesting to hear Tape 38 in its entirety. Because this tape
already was in the jury room, the court and the courtroom deputy
interpreted the note to mean that the jury was not aware that the
tapes and transcripts were already in the jury room.
On the morning of the third day of deliberations, the District
Court ruled in favor of the defense and instructed defense counsel
and the Government to bring the 47 additional tapes and transcripts
to the jury room. The court explained:
The jury clearly has not begun even approaching the
transcripts and the tapes . . . . So we have right now
an opportunity to simply put all of the tapes and
42
transcripts [in the jury room] while the jury is sitting
[in the courtroom] for 90 minutes and listening to
[Tape 38] and reading the transcripts that they
requested.
App. vol. 54 at 9. After depositing the tapes and transcripts in the
jury room, Hoffecker’s attorney reported to the court:
The government and defense counsel resolved the
matter of all the tapes and transcripts being presented
to the jury . . . . [I]ssues raised by the Defendants’
Trial Briefs . . . have been fully resolved with the
delivery of the tapes and transcripts discussed
therein, which would be the complete tapes and
transcripts to the jury for use and deliberation.
Id. at 12, 15.
Accordingly, we see no basis for Hoffecker’s claim that
there was prosecutorial misconduct. Moreover, given the full
context and resolution of this issue by the District Court, which
ensured that the jury had access to all the tapes and transcripts,
there could not have been an error, particularly an error that would
have affected the outcome of the proceedings. Hoffecker
complains that the jury was “hours away from the verdict,”
Appellant’s Br. at 39, but the jury was not required to revisit these
unimportant tapes. Indeed, it does not appear that the jury revisited
any of the tapes and transcripts sent to the jury room other than
Tape 38. Significantly, Hoffecker never has explained what
evidence the tapes and transcripts that were provided to the jury on
the third day of deliberations contained, much less explain why this
evidence “support[ed] the defense position . . . .” Id. at 38. In
these circumstances, we conclude that there was no error.
Hoffecker next contends that Field gave impermissible
opinion evidence. On direct examination, Field testified that in his
and Hoffecker’s meeting on June 12, 1996, Hoffecker admitted to
Field that Amitex was promoting an investment in “physical” metal
but did not actually purchase metal. App. vol. 28 at 102. Field
testified that as a result he concluded Amitex was a “scam.” Id. at
102. Hoffecker objected to this testimony but the District Court
43
ruled that it was admissible lay opinion testimony.
We review a district court’s decision to admit lay opinion
testimony for abuse of discretion. United States v. Leo, 941 F.2d
181, 192-93 (3d Cir. 1991). Under the Federal Rules of Evidence:
If the witness is not testifying as an expert, the
witness’ testimony in the form of opinions or
inferences is limited to those opinions or inferences
which are (a) rationally based on the perception of
the witness, (b) helpful to a clear understanding of
the witness’ testimony or the determination of a fact
in issue, and (c) not based on scientific, technical, or
other specialized knowledge within the scope of
Rule 702 [which governs expert testimony].
Fed. R. Evid. 701.
Two of our cases shed light on whether the District Court
abused its discretion when it permitted Field’s lay opinion
testimony. First, in United States v. De Peri we ruled that the trial
court did not abuse its discretion when it permitted the
Government’s witness to provide his lay opinion regarding his
understanding of the meaning of tape recorded conversations
between himself and one of the defendants. 778 F.2d 963, 977-78
(3d Cir. 1985). We found that the witness’s opinions were helpful
to the jury because the “language on the tapes is sharp and
abbreviated, composed with unfinished sentences and punctuated
with ambiguous references to events that are clear only to [the
defendant] and his audience. To the uninitiated listener, [the
defendant] speaks as if he were using code.” Id. at 977. We
further noted that “the trial court vigorously policed the
government’s examination of [the witness] to ensure that he was
not asked to interpret relatively clear statements.” Id. at 978.
Second, in United States v. Dicker we found that the district
court abused its discretion by permitting a Government agent to
testify regarding his understanding of his recorded conversations
with the defendant. 853 F.2d 1103, 1110 (3d Cir. 1988). In Dicker
we stated that “interpretation of clear conversations is not helpful
to the jury, and thus is not admissible under either [Rule 701 or
44
702].” Id. at 1108. We found that the Government witness
“simply ascribed his own, illicit meaning to straightforward,
potentially legitimate statements. This admission was surely
prejudicial, and was not helpful to a clear understanding of the
testimony. The recorded conversations, unlike those at issue in De
Peri, were perfectly clear without [the witness’s] ‘interpretations.’”
Id. at 1110.
Here the District Court found that the Government properly
laid a foundation under Rule 701 for Field’s statement that Amitex
was a “scam.” First, Field based the statement on his “rational
perceptions,” Hoffecker’s statements, and his previous interactions
with Hoffecker. Supp. app. at 52. The court found that Field’s
opinion was not based on specialized knowledge because he had
“first-hand knowledge and observation.” App. vol. 30 at 21.
Second, the statement was helpful to the jury because Field’s
perception that the Amitex program was a “scam” explained why
he was a Government cooperator. The court rejected defense
counsel’s suggestion that Field and Hoffecker’s recorded
conversations were “clear” and were “matters that this jury can
understand.” Id. at 19. The court found instead that it was “fair to
view the jury as uninitiated listeners,” id., and that Field’s
testimony was helpful to the jurors because Field interpreted his
conversations with Hoffecker, and the jury otherwise could not
have understood those conversations without Field’s testimony.
The court found that because the “deliberately” “guarded
responses” in the conversations which were “not clear to the
uninitiated observer” were akin to “coded words,” Field’s
explanation of the language used in the conversations was helpful
to the jury. Id. at 25. The court also noted that in Dicker the
Government agent improperly was mischaracterizing the
conversation while in this case Field was not mischaracterizing his
conversations with Hoffecker. Field also stated his belief that
Amitex was a “scam” only one time, as opposed to the agent in
Dicker who testified repeatedly in an objectional manner.
The District Court also found that the situation here was
unlike that in United States v. Scop, 846 F.2d 135 (2d Cir.), on
rehearing, 856 F.2d 5 (2d Cir. 1988), a case Hoffecker cited to
support his argument. In Scop, the court of appeals found that
Federal Rule of Evidence 704 was violated by the admission of
45
testimony of a Government expert witness who was an SEC
investigator and expert in securities trading practices to the extent
that his legal conclusion was that the defendants were “active” and
“material participants” in a “fraudulent scheme in furtherance of
[the] manipulation [of stock].” Id. at 138. The expert “drew
directly upon the language of the statute” and acknowledged that
his positive assessment of the testimony of other Government
witnesses was a basis for his opinion. Id. at 140-42.
This case, however, differs from Scop because the District
Court found that Field was not an expert witness, did not couch his
view that Amitex was a “scam” on the language of the mail fraud
statute, and did not base his opinion on the credibility or testimony
of others. The court found that calling Amitex a “scam” was
different from offering a legal opinion and, in any event, under
Rule 704(a) a lay opinion is not “objectionable because it embraces
an ultimate issue to be decided by the trier of facts.” Supp. app. at
53 (quoting Fed. R. Evid. 704(a)). Moreover, the court found that
Field was “a witness to the scam at the time of the scam, not
someone performing 20-20 hindsight analysis.” App. vol. 30 at 22.
Field’s testimony involved what he thought about Amitex in 1996,
not at the time of trial. Field “did not . . . attempt to be a thirteenth
juror,” because his testimony was not based upon what he had
heard at the trial. Id. at 22. In these circumstances, the District
Court did not abuse its discretion under Rule 701 in admitting
Field’s lay opinion testimony.
Furthermore, even if the court erred in allowing this
testimony, its error would not have “so infected the jury’s
deliberations” that it, combined with other alleged errors, “had a
substantial influence on the outcome of the trial.” Copple, 24 F.3d
at 547 n.17. Field’s one-time reference to Amitex as a “scam” on
direct examination was brief, and the Government did not refer to
Field’s testimony on this point again during the trial. In addition,
his brief comment that he believed Amitex was a “scam” was
hardly likely to shock the jury given Hoffecker’s own tape-
recorded admission that “[i]n America, Amitex cannot operate. It
would be a scam.” Supp. app. at 40. Indeed, it is surreal that
Hoffecker complains about a witness using Hoffecker’s own term
to describe his scheme.
46
Finally, Hoffecker argues that the Government improperly
bolstered Field’s credibility by asking him on redirect how many
convictions resulted from his cooperation. Hoffecker’s cross-
examination of Field elicited the following:
Defense Counsel: . . . [Y]ou were an informant in
a number of cases, were you
not?
Field: I think there were several, yes
sir.
Defense Counsel: Well, let’s quantify that. How
many other cases were you
involved in where you were . .
. acting in a capacity as an
informant for the government?
Field: Two directly.
Defense Counsel: Okay. And can you tell the
jury how many people, either
indicted or unindicted, that you
spoke to in your capacity as an
undercover informant?
Field: Probably two dozen maybe.
App. vol. 32 at 85. Defense counsel also attacked Field’s motive
to testify by questioning the benefits that resulted from Field’s
cooperation and suggesting that his conviction and 24-month
sentence were far less severe than what he should have faced given
the potential charges and his 35-year maximum statutory
sentencing exposure.
On redirect, the Government sought to clarify the
misleading inference that Field received a substantial reduction at
sentencing based only on his work in this case, when Field, in fact,
cooperated on many unrelated investigations:
Government: Both defense lawyers asked
47
you questions about your
cooperation with law
enforcement; do you recall
those questions, sir?
Field: Yes, sir.
Government: As part of your cooperation
with law enforcement, did you
provide information on a
number of people separate and
apart from Mr. Hoffecker and
Mr. Myers and [the] Amitex
program?
....
Field: Yes, sir.
Government: To your knowledge, Mr. Field,
how many individuals were
convicted or investigated as a
result of your cooperation?
Field: There were over [a] dozen
convicted. I don’t know how
many more were investigated,
sir.
App. vol. 34 at 67.
Hoffecker then objected and moved for a mistrial, citing
United States v. Sorondo, 845 F.2d 945 (11th Cir. 1988), as support
for his claim that the prosecutor improperly bolstered Field’s
credibility. In Sorondo the defendant, who was arrested after
supplying drugs to a Drug Enforcement Administration (“DEA”)
informant, claimed that the informant entrapped him. Id. at 947.
The Government called as a rebuttal witness a DEA agent who
testified regarding the number of cases in which the informant had
participated and the amount of money and property that had been
forfeited to the Government due to his assistance. Id. at 948. The
48
Government also elicited testimony that all of the 40 prosecutions
in which the informant had participated had resulted in convictions.
Id. On appeal, the court of appeals found that the admission of this
testimony was plain error because it “created a great danger that the
jury would simply credit [the informant’s] testimony and find in
favor of the government because many other juries had done so in
the past.” Id. at 949.
In this case, the District Court considered Sorondo and
found that it arose in a different context. There, a Government
agent was called on rebuttal to bolster the credibility of a
Government witness. Here, by contrast, the testimony of the
cooperator on re-direct “went to the usefulness of the cooperation,
the substantial assistance . . . as a basis for . . . sentencing
decisions. . . .” App. vol. 37 at 20. Defense counsel’s cross-
examination of Field risked leaving the jury with the misimpression
that Field received an extraordinary reduction in his sentence as a
result of his help only in one case, and Field’s re-direct simply
corrected that misimpression. The District Court found that the
“context dilutes the harmfulness of the testimony.” Id.Nevertheless, the Government requested the District Court
to instruct the jury to disregard any testimony by Field involving
convictions of other individuals which were not related to this case.
The court noted that because the matter was brought to its attention
in a timely fashion – unlike in Sorondo, where no timely objection
was made – it could fashion a curative instruction. The court
invited counsel to draft an instruction and carefully “tracked the
concerns of the defense that the jury instruction not appear to
highlight the testimony that was objected to.” Id. at 24. The court
then instructed the jury in pertinent part:
During its redirect examination of Mr. Field the
government asked Mr. Field how many people were
convicted as a result of his cooperation. At the time,
this was objected to. I am now sustaining the
defense objection. Whether or not Mr. Field’s
cooperation led to any prosecutions or convictions is
irrelevant to your consideration of the charges in this
case. I instruct you that you must disregard this
testimony. And it must not be considered by you in
49
any way in your deliberations.
Id. at 30.
We doubt that this curative instruction was needed because
Hoffecker opened up this whole line of inquiry himself but,
assuming that it was required, the instruction certainly was
sufficient to cure any error in the Government’s eliciting the
disputed testimony from Field. In light of this instruction,
combined with the ample evidence demonstrating Hoffecker’s
guilt, we find that the testimony did not have “a substantial
influence on the outcome of the trial.” Copple, 24 F.3d at 547
n.17. Accordingly, the three alleged errors Hoffecker raises do not
alone or in combination require reversal of his convictions.
4. Jury Instructions
Hoffecker next argues that he was denied a fair trial because
the District Court rejected several of his requested jury instructions
and overruled his objections to two other instructions. “We
exercise plenary review to determine whether jury instructions
misstated the applicable law, but in the absence of a misstatement
we review for abuse of discretion.” Cooper Distributing Co. v.
Amana Refrigeration, Inc., 180 F.3d 542, 549 (3d Cir. 1999).
First, the District Court rejected Hoffecker’s requested
instruction on “single or multiple conspiracies” which stated in
pertinent part that “[p]roof of separate or independent conspiracies
is not sufficient” for the Government to sustain its burden of proof
for the conspiracy charge in Count One. App. vol. 59 at 148. The
District Court rejected this instruction because it concluded it was
inapplicable to the evidence presented in the case and would
mislead and confuse the jurors. Hoffecker contends this decision
was incorrect because the Government’s proof of “multiple
business operations, the divisions between Global and Amitex, the
investments in other companies, and the distinctions between the
operations of the various sales rooms, among others, all combine
to provide factual support for a finding of multiple conspiracies.”
Appellant’s Rep. Br. at 38.
We recognize that “[i]f a defendant asks for a charge on
50
multiple conspiracies and there is sufficient evidence to support
such an instruction, the failure to grant the request can be reversible
error,” United States v. Curran, 20 F.3d 560, 572 (3d Cir. 1994),
but that principle is inapplicable here because the evidence did not
support the instruction. Despite the complexity of the scheme in
this case, the evidence could not support a conclusion that there
had been a conspiracy other than the one charged. All of the
business entities and divisions in labor existed to advance the
single conspiracy to dupe victims into investing in Amitex’s
LPCIP. In these circumstances, inasmuch as there was not an
evidentiary basis for Hoffecker’s requested instruction if it had
been given it only would have confused the jury. Moreover, the
District Court gave a clear instruction that the jury only could
convict Hoffecker if it found that he knowingly and willingly
joined the single charged conspiracy. We conclude that the District
Court did not abuse its discretion when it rejected Hoffecker’s
requested jury instruction on “single or multiple conspiracies.”
The District Court also rejected Hoffecker’s requested
instruction on “conjecture and speculation,” which stated:
Of course, a defendant is never to be convicted on
suspicion or conjecture. If, for example, you view
the evidence in the case as reasonably permitting
either of two conclusions – one that a defendant is
guilty as charged, the other that the defendant is not
guilty – you will find the defendant not guilty. It is
not sufficient for the Government to establish a
probability, though a strong one, that a fact charged
is more likely to be true than not true. That is not
enough to meet the burden of proof beyond
reasonable doubt. On the other hand, there are very
few things in this world that we know with absolute
certainty, and in criminal cases the law does not
require proof that overcomes every possible doubt.
App. vol. 59 at 150. The court rejected the instruction because it
duplicated the reasonable doubt instruction that it already had
given to the jury explaining:
The reasonable doubt instruction that I read to the
51
jury is an instruction that has been discussed and
approved of in Third Circuit cases . . . and I believe
that it is a fair depiction and expression of the law of
reasonable doubt. And the language [in Hoffecker’s
requested instruction] does not advance the ball . . .
. [and] might becloud what I have told the jurors.
App. vol. 48 at 102. The District Court was correct: we had
approved the District Court’s reasonable doubt instruction. See
United States v. Hernandez, 176 F.3d 719, 728-35 (3d Cir. 1999)
(mirroring our model instruction, Third Circuit Model Criminal
Jury Instructions § 3.06). Thus, there was no need for the court to
give Hoffecker’s requested instruction. Accordingly, the court in
rejecting the “conjecture and speculation” instruction did not abuse
its discretion.
The District Court also rejected Hoffecker’s requested
“theory of defense” instructions. The first of these stated:
It is the defense in this case that the Defendants
through its [sic] company Amitex employed the
services of Peter Hug and Associates, Phoenix, and
Perrigrine to hedge its customers’ positions in the
forward and futures markets. It is further the defense
that Amitex maintained as much as $2 million in its
bank accounts to cover the liquidation value of its
customers’ investment. I instruct you that if you find
that the Defendants in fact did protect their
customers[’] investments through hedging, you may
consider this as evidence of the Defendants[’] lack of
criminal intent.
App. vol. 59 at 155. The second instruction stated:
It is the defense in this case that the Defendants are
not responsible for any misrepresentations made by
brokers working at sales offices marketing
Amitex’[s] program. I hereby instruct you that if
you find that material misrepresentations were made
by brokers, you cannot consider there [sic]
misrepresentations as evidence of the Defendants[’]
52
criminal intent, unless you find that the
misrepresentations were made with the knowledge
and consent of the individual Defendant.
Id. at 156. The third instruction stated:
It is the defense in this case that the Defendants were
not required to take physical possession of any
commodity offered through the Amitex program
until such time as the customer paid for the
commodity in full. I hereby instruct you that if you
find that the Amitex documents provided to the
customers were consistent with this belief, you may
consider this as evidence of the Defendants[’] lack of
criminal intent.
Id. at 157. The fourth instruction stated:
It is the defense in this case that the Amitex Program
provided for physical delivery of a commodity upon
the payment for the commodity in full or upon the
repaying of the 80% loan value extended by Amitex.
It is further the defense that the loan Amitex made to
its customers was a genuine obligation Amitex
entered into binding Amitex to hedge either in cash
or in the future or forward markets the value of the
commodity equal to the customers 80%. I hereby
instruct you that if you find that Amitex had the
ability to deliver commodities to its customers and
hedged its obligations so as to guarantee delivery,
you may consider this evidence of the Defendants[’]
lack of criminal intent.
Id. at 158. The fifth instruction stated:
It is the defense in this case that the Defendants
disclosed all commissions, fees, and charges to its
customers and that the Defendants through Amitex
informed its customers that speculating in
commodities had a high degree of risk and that the
customer could lose their [sic] entire investment. I
53
hereby instruct you that if you find that these
expenses were disclosed and that the customers were
informed of the risks of speculating in commodities,
you may consider this in determining the
reasonableness of any customers[’] testimony that
they were misled. You may further consider this in
determining the materiality of any statements by the
Defendants alleged to have been false or misleading.
Id. at 159. The sixth instruction stated:
It is the defense in this case that the Defendants
reasonably believed that their program was not an
off exchange future subject to regulation by the
CFTC. As such, the defendants contend that they
did not intentionally mislead their customers by
claiming that Amitex was not a futures product. I
hereby instruct you that in determining the
reasonableness of this claim you may consider the
differences between the program marketed by
Amitex and that offered on the futures exchanges.
To that end you may consider evidence presented at
trial that the size of the contract offered on a futures
exchange was larger than that offered by Amitex
making delivery easier; that futures contracts are of
a limited duration, usually a matter of months,
requiring the customer to sell out of their position or
take delivery by a date certain; and that in a futures
contract, a customer could be forced out of the
market owing additional money to the exchange. I
further instruct you that if you find that these
differences are present you may consider this
evidence in determining whether the Defendants
acted with criminal intent.
Id. at 160. The seventh instruction stated:
An honest mistake of fact is a complete defense to
all charges in the indictment, because it is
inconsistent with the existence of wrongful intent,
which is an essential element of the charges. Such
54
an honest mistake negates the criminal intent of a
defendant when the defendant’s acts would be lawful
if the facts were as the defendant supposed them to
be. A defendant whose actions are based on an
honest belief that the defendant was acting lawfully
is not chargeable with intentional criminal conduct
– even if this belief was erroneous or mistaken. The
burden of proof is not on the defendant to prove the
defendant’s honest belief of a mistaken fact, since no
defendant has any burden to prove anything.
Id. at 161. The eighth instruction stated:
It is the position of the defendants that they never
entered or intended to enter into any conspiracy to
commit mail and wire fraud and that they never
engaged in, or agreed to engage in, fraudulent
activities. Further, the defendants maintain they
were honest businessmen whose interest was in
providing legitimate speculative investment
opportunities to customers.
Id. at 162.
“A defendant is entitled to a theory of defense instruction if
(1) he proposes a correct statement of the law; (2) his theory is
supported by the evidence; (3) the theory of defense is not part of
the charge; and (4) the failure to include an instruction of the
defendant’s theory would deny him a fair trial.” United States v.
Wren, 363 F.3d 654, 664 (7th Cir. 2004), vacated on other grounds,
Yarbor v. United States, 543 U.S. 1101, 125 S.Ct. 1021 (2005). As
the Court of Appeals for the Fifth Circuit has pointed out, however,
a defendant is not “entitled to a judicial narrative of his version of
the facts, even though such a narrative is, in one sense of the
phrase, a ‘theory of the defense.’” United States v. Barham, 595
F.2d 231, 244 (5th Cir. 1979). In Barham the court found that the
district court properly rejected the defendant’s proposed “theory of
the defense” instruction because it was
essentially a recounting of the facts as seen through
the rose-colored glasses of the defense – glasses that
55
[the defendant] hoped the jurors would wear when
they retired to the jury room. . . . As the Trial Judge
commented, the requested instruction was more in
the nature of a jury argument than a charge.
Id. at 244-45 (footnote omitted); see also United States v. Paradies,
98 F.3d 1266, 1287 (11th Cir. 1996) (“We find that the district
court was correct in finding that the requested jury charge was
partisan and that it aspired ‘to place the . . . defendants’ desired
factual findings into the mouth of the court.’”).
The District Court correctly refused to give Hoffecker’s
requested “theory of defense” instructions because they were
argument. When considering these proposed instructions, the court
stated:
I think that they stray . . . into a commentary on the
evidence and make[] the Court, as it were, stand
alongside arguments to come regarding how the
jurors view the evidence. And to insert myself in
that way, I think, would in somewise change my role
as the neutral giver of the law and turn me into some
what of . . . a commentator on argument and I’m not
only reluctant but it’s not my role to do that . . . .
App. vol. 48 at 105. The court was correct. Moreover, many of
Hoffecker’s “theory of the defense” instructions, such as the
“mistake of fact” instruction and the “lack of intent to enter a
conspiracy” instruction, duplicated other instructions that the
District Court gave on the subject of criminal intent, such as the
charges on “knowingly and willfully” and the “good faith defense”
to fraud. In these circumstances, Hoffecker was not entitled to
have the court charge the jury on his requested “theory of defense”
instructions and the court did not abuse its discretion when it
rejected the instructions.
Hoffecker also contends that the District Court erred by
giving two other instructions to the jury. First, the court gave an
instruction that the negligence of a victim was not a defense to the
charged crimes. The language of this instruction paraphrased our
statement of the law: in United States v. Rennert, we stated that a
56
“fraud victim’s negligence or lack of diligence in uncovering the
fraud is not a defense.” 374 F.3d 206, 213 (3d Cir. 2004) (citing
United States v. Coyle, 63 F.3d 1239, 1244 (3d Cir. 1995)),
vacated on other grounds, Miller v. United States, 544 U.S. 958,
125 S.Ct. 1744 (2005). Accordingly, the court did not abuse its
discretion when it chose to give this instruction to the jury.
The court also gave the following “absence of an attorney-
client relationship” instruction, to which Hoffecker objects:
You have heard testimony that Jack Field was a
practicing attorney. In addition, you heard that Jack
Field represented Charles “Chip” Hoffecker in the
FTC v. Uni-Vest, Hoffecker, et al. matter that
concluded in July 1991. As [a] matter of law, I am
instructing you that during the period charged in the
Indictment, Jack Field was not Mr. Hoffecker’s
lawyer. Furthermore, Jack Field was not Mr.
Myers’s lawyer, Global Investment’s lawyer or
Amitex’s lawyer at any time. As a result, for
purposes of your deliberation, I am instructing you
that Mr. Field did not have an attorney-client
relationship with Mr. Hoffecker, Mr. Myers, Global
or Amitex.
App. vol. 49 at 22-23.
Hoffecker argues this instruction prejudiced him because
Field was an attorney who “provided advice and counsel” to him,
and Field was a principal component of the Amitex operation.
Appellant’s Br. at 45. Accordingly, he contends that “the jury
should have been allowed to consider the impact of Field’s role as
a lawyer on his actions and intent.” Id. Hoffecker therefore
contends that this instruction “was reversible error based on the
evidence.” Appellant’s Rep. Br. at 44.
The Government responds that the instruction “was proper
given the facts of this case and defense counsel’s attempts to
mislead the jury.” Appellee’s Br. at 87. The Government notes
that “there was no evidence to support the theory that Field served
as Hoffecker’s counsel during the fraud, no legal advice was given
57
by Field, and none was relied upon by Hoffecker.” Id. The
Government further contends that throughout the trial “defense
counsel attempted to mislead and confuse the jury by suggesting
that Hoffecker lacked the criminal intent to commit fraud because
he relied on Field’s legal advice to purportedly run a legitimate
operation.” Id. at 88. The Government points out that even after
the District Court gave the “absence of an attorney-client
relationship” instruction to the jury, defense counsel argued at
closing that Hoffecker lacked the criminal intent to commit fraud
because he was following Field’s legal advice, an argument
prompting the court to repeat its instruction.
We conclude that the Government’s view of the evidence is
correct and that Hoffecker has no evidentiary support for his
argument that the instruction was improper on the theory that Field
acted as his attorney during the Amitex investigation or gave
Hoffecker legal advice, or that he relied on Field’s legal advice.
Therefore, we will not reverse his convictions on that basis.
Finally, in a letter submitted after oral argument, Hoffecker
raises the issue of whether the District Court’s “absence of an
attorney-client relationship” instruction infringed his Sixth
Amendment right to a jury trial by deciding an element of each the
charged offenses. Appellant’s Letter (dated April 1, 2008). In his
letter, Hoffecker contends:
[i]t is the jury’s responsibility to assess Mr.
Hoffecker’s belief and the reasonableness thereof in
evaluating whether he acted with the specific intent
to defraud. . . . The defense was unconstitutionally
deprived of the right to have the jury decide whether
Mr. Hoffecker reasonably relied on the advice of
counsel. The district court’s determination that no
attorney-client relationship existed cannot supplant
the constitutional mandate that the jury is to decide
fact issues, especially questions of intent.
Id. at 4-5.
After reviewing the record, however, we find that Hoffecker
did not raise this issue before the District Court or in his opening
58
brief on appeal. Indeed, there is very little discussion of this
instruction in the record. According to Hoffecker’s letter:
The complete discussion and argument on the jury
instructions took place during the charge conference,
a proceeding the district court conducted off the
record in the absence of the court reporter beginning
on March 6, 2006. . . . Following that conference,
the government submitted to the court and defense
counsel its proposed written Charge No. 54
[regarding the absence of an attorney-client
relationship] by email on March 7, 2006, the day
before the court instructed the jury.
Id. at 1-2. On March 8, 2006, the day after the Government
submitted its proposed charge, the District Court gave instructions
one through twenty-five to the jury before excusing the jury for the
day. The following exchange then occurred:
THE COURT: Counsel, initially I have
read jury instructions 1
through 25 to the jury.
Is there any objection to
the charge as it was read
thus far?
PROSECUTOR: No, your Honor.
THE COURT: Defense.
DEFENSE COUNSEL: Your Honor, we agree
that the charge as read
reflects the charge that
the Court advised you
would read during the
robing room
conference. Having
said that, there were a
number of items that we
requested or objected to
that the Court ruled on,
59
and the appropriate time
I can make a record of
that.
THE COURT: Well my suggestion is
that we attend to those
issues now less [sic] we
lose track of them. I
have no problems
dealing with motions
such as we’re going to
be addressing later on.
But this is right on point
so let’s get it done. And
I think, [defense
counsel], you indicated
that there were
additional charges, so
we’re not talking just
about language changes
but whole additional
charges you were going
to proffer to the Court,
and I would like to hear
from you on those as
well.
....
DEFENSE COUNSEL: Your Honor, there are
no further objections to
the instructions as read
for instructions 1
through and including
25. The remainder
would be items the
Court has not yet read
or are items dealing
with the requested
supplemental jury
instruction.
60
THE COURT: Let’s jump into that
number.
App. vol. 48 at 95-96, 98. The court and counsel then discussed
various proposed instructions.
Eventually, counsel for Hoffecker addressed the instruction
with which we are concerned, stating, “And we object to Charge
Number 54: Absen[ce] of [an] Attorney-Client Relationship. The
Court did make a change to the proposed language based on the
defense position. But in other respects [it] is including the
instruction and we object to it its institution [sic].” Id. at 117.
At no point in the record does Hoffecker explain the basis
for this objection, and the District Court’s ruling on the objection
is not in the record, although we believe that the court overruled
the objection because the court gave the instruction (renumbered
as Charge Number 44a) the next day to the jury. App. vol. 49 at
22-23.
After the court finished instructing the jury, it held the
following sidebar:
THE COURT: Counsel, was the
reading of the jury
instruction satisfactory?
PROSECUTOR: Yes, ma’am.
DEFENSE COUNSEL: It was, Judge. And we
reserve the objections
previously made, but
we have no additional
objection. . . . . I do
have a note, Judge, to
make. Since prior to
the start today, we had a
brief additional charge
conference that was not
reported. We did raise
a number of issues and
61
in some respects
objections and
alterations, as given to
the Court. I think the
procedure is, you will
allow us to put it on the
record at the appropriate
time, but the position
we took during the pre-
part two of the charge to
the charge will
otherwise be preserved?
THE COURT: We’ll take our time to
go through the charge
and you will have a
chance to put on the
record the alterations.
You asked for them and
I didn’t include them
and we’ll do that.
DEFENSE COUNSEL: Thank you.
Id. at 32-33. The Government and the defendants then made their
closing arguments to the jury.
At one point during Hoffecker’s closing argument, the
Government objected because “there were several attempts by
[defense counsel] to do an end run around your earlier ruling and
your instruction that Jack Field was not an attorney for purposes of
Amitex and Global.” App. vol. 50 at 117. The District Court then
instructed the jury: “I am reminding you that Mr. Field is not Mr.
Myers[’s] lawyer, Global Investment’s lawyer or Amitex’s lawyer
at any time, and for purposes of your deliberations, I instruct you
that Mr. Field did not have an attorney-client relationship with Mr.
Hoffecker or Mr. Myers or Global or Amitex . . . .” Id. at 121.
Later, during Myers’s closing argument, the Government again
objected for the same reason and the court told the jury:
Ladies and gentlemen, I remind you again of the
62
instruction concerning Jack Field. You heard that he
was a practicing attorney, but you also heard me tell
you, and I remind you again, that as a matter of law,
I instruct you that during the period charged in the
indictment Jack Field was not Mr. Hoffecker’s
lawyer, Mr. Myers’s lawyer, Global Investment’s
lawyer or Amitex’s lawyer at any time. And for
purposes of your deliberation, I instruct you that
Jack Field did not have an attorney-client
relationship with Mr. Hoffecker, Mr. Myers, Global
or Amitex.
App. vol. 51 at 29.
After closing arguments, but before the jury left to begin
deliberating, Hoffecker’s counsel stated: “I want to, we renew all
prior comments and objections in connection with the jury
instruction. . . . . I do want the record to reflect that the Court is
allowing us to preserve all the previous objections that we have
made and requests that we have made.” App. vol. 52 at 55. That
is the last statement in the record that we have located relating to
Hoffecker’s objections to the jury instructions.
As we noted, Hoffecker never stated the basis for his
objection to the “absence of an attorney-client relationship”
instruction on the record. Moreover, in his opening brief on this
appeal, Hoffecker’s entire discussion regarding the instruction was
the following:
The defendant was prejudiced by Charge 44a – Absence of
Attorney-Client Relationship (A59:172). At all times, Field
was a lawyer, Field provided advice and counsel to
Hoffecker, and Field was a principal component of the
Amitex operation. The jury should have been allowed to
consider the impact of Field’s role as a lawyer on the
defendant’s actions and intent.
Appellant’s Br. at 45. As we noted above, in his Reply Brief,
Hoffecker makes clear that his argument is that “based on the
evidence” the instruction was incorrect. Appellant’s Rep. Br. at 44.
63
Because Hoffecker did not raise before the District Court or
in his opening brief on appeal the issue of whether the District
Court’s “absence of an attorney-client relationship” instruction
infringed his Sixth Amendment right to a jury trial by deciding an
element of each of the charged offenses, he has waived it. See Fed.
R. Crim. P. 51(b) (“A party may preserve a claim of error by
informing the court – when the court ruling or order is made or
sought – of the action the party wishes the court to take, or the
party’s objection to the court’s action and the grounds for that
objection.”); Pelullo, 399 F.3d at 222 (“It is well settled that an
appellant’s failure to identify or argue an issue in his opening brief
constitutes waiver of that issue on appeal.”).
But even if we were to consider this issue, we would find
that Hoffecker has not shown plain error or, indeed, error at all in
its disposition. See Fed. R. Crim. P. 52(b) (“A plain error that
affects substantial rights may be considered even though it was not
brought to the court’s attention.”); United States v. Wise, 515 F.3d
207, 214 (3d Cir. 2008) (reviewing jury instructions for plain error
after defendant failed to raise an argument before the district court).
“Under the plain error standard, ‘before an appellate court can
correct an error not raised at trial, there must be (1) error, (2) that
is plain, and (3) that affect[s] substantial rights. If all three
conditions are met, an appellate court may then exercise its
discretion to notice a forfeited error, but only if (4) the error
seriously affect[s] the fairness, integrity, or public reputation of
judicial proceedings.’” United States v. Williams, 464 F.3d 443,
445 (3d Cir. 2006) (alterations in original) (quoting United States
v. Vazquez, 271 F.3d 93, 99 (3d Cir. 2001)). To affect substantial
rights, an error must be “prejudicial, i.e., it ‘must have affected the
outcome of the district court proceedings.’” United States v.
Nappi, 243 F.3d 758, 762 (3d Cir. 2001) (quoting Olano, 507 U.S.
at 734, 113 S.Ct. at 1778).
Here, the District Court clearly left to the jury the
determination of whether the Government established beyond a
reasonable doubt each of the elements of conspiracy and mail
fraud. For example, the court instructed the jury that to convict
Hoffecker of conspiracy it must find beyond a reasonable doubt
that he willfully participated in the unlawful plan charged with
intent to commit mail fraud and wire fraud:
64
So, if a defendant[], with understanding of [the]
unlawful character of a plan knowingly encouraged,
advise[d] or assist[ed] for the purpose of furthering
the undertaking or scheme, [he] thereby bec[a]me [a]
willful participant[], that is, [a] conspirator[]. . . .
[W]hether or not the defendants were members of
the conspiracy may be determined upon all of the
evidence in this case, including the reasonable
inferences that you draw from that evidence.
App. vol. 48 at 87-88.
The court also instructed the jury that to convict Hoffecker
of mail fraud it must find beyond a reasonable doubt that he
participated in the scheme knowingly, willfully and
with intent to defraud. Intent to defraud means to act
knowingly and with a specific intent to deceive, for
the purpose of causing some deprivation or loss to
another of money or property. The question of
whether a person acted knowingly, willfully and
with intent to defraud is a question of fact for you to
determine, like any other fact question. This
question involves a person’s state of mind.
App. vol. 49 at 8-9 (emphasis added). The court then elaborated on
the definition of “knowingly” and “willfully”:
A person acts knowingly if that person acts
consciously and voluntarily with an awareness and
realization of what was happening and not because
of mistake or accident or other innocent reason. The
purpose of adding the word ‘knowingly’ is to ensure
no one will be convicted for an act done because of
mistake or accident or other reason. A person acts
‘willfully’ if that person knowingly acts voluntarily,
deliberately and intentionally as contrasted with
acting accidently, carelessly or unintentionally. So,
if you find beyond a reasonable doubt that the acts
constituting the crime charged were committed by a
defendant voluntarily as an intentional violation of a
65
known legal duty, that is, with the specific intent to
do something that the law forbids, then the element
of willfulness [a]s defined in these instructions has
been satisfied. In determining whether a defendant
has acted knowingly and willfully, it is not necessary
for the government to establish that the defendant
knew that he was breaking a particular law.
Id. at 13-14. The court also instructed the jury:
Good faith is a complete defense to the charges in
the Indictment, since good faith on the part of a
defendant is inconsistent with intent to defraud or
with willfulness, which are essential parts of the
charges. The burden of proof is not on the
defendants to prove good faith, of course, since the
defendants have no burden to prove anything. The
government must establish beyond a reasonable
doubt that the defendants acted with the specific
intent to defraud as charged in the Indictment. One
who expresses an honestly held opinion or an
honestly formed belief, is not chargeable with
fraudulent intent even though the opinion is
erroneous or belief is mistaken; and similarly,
evidence which establishes only that a person made
a mistake in judgment or error in management or
was careless, does not establish fraudulent intent.
Id. at 16.
In light of the District Court’s instructions and the fact that
the Government produced overwhelming evidence to establish
Hoffecker’s intent to commit the charged crimes, we find that the
District Court’s “absence of an attorney-client relationship” charge
did not affect the outcome of the proceeding. Accordingly, we find
no plain error, or, as we have indicated, any error at all, in this
aspect of the District Court’s instruction.
5. Alleged Perjury by a Government Witness
Hoffecker next argues that his right to due process was
66
violated when a former Global employee, Gregory Swarn,
allegedly perjured himself during his trial testimony. In particular,
Hoffecker claims that Swarn testified falsely with respect to his
education on direct examination when he stated that he had
received a college degree. Hoffecker points out that on cross-
examination, when his attorney questioned Swarn about a transcript
that showed that he was five hours short of completing the degree,
Swarn explained that he had graduated from college and had
completed his requirements because course work from another
institution should have been credited to him.
Hoffecker also claims that Swarn testified falsely as to his
employment with Global. On cross-examination, defense counsel
produced broker/trader licensing applications in which Swarn did
not list Global as a prior place of employment. On re-direct, Swarn
explained that he had not admitted to having worked at Global and
several other companies because those companies had been scams,
not legitimate businesses. Also during cross-examination, defense
counsel noted that Swarn had not told the Federal Bureau of
Investigation (“FBI”) or the United States Probation Office in
Florida that he had worked at Global. Swarn explained that he had
not wanted to volunteer the information because he had not paid
taxes on income from Global and that the FBI did not ask him
specifically about Global. Finally, in response to defense counsel’s
questions about why there was no documentation showing that
Swarn had been on the Global payroll, Swarn testified that he had
been paid in cash.
Approximately three weeks after Swarn’s testimony had
concluded, Hoffecker filed a motion to dismiss the indictment or,
in the alternative, to strike Swarn’s testimony and a motion for the
appointment of a special prosecutor to investigate Swarn’s alleged
perjury. The District Court denied the motion.
A witness commits perjury if he or she “gives false
testimony concerning a material matter with the willful intent to
provide false testimony, rather than as a result of confusion,
mistake, or faulty memory.” United States v. Dunnigan, 507 U.S.
87, 94, 113 S.Ct. 1111, 1116 (1993). To establish a due process
violation, Hoffecker must show that: (1) Swarn committed perjury;
(2) the Government knew or should have known of Swarn’s
67
perjury; (3) Swarn’s testimony went uncorrected; and (4) there is
a reasonable likelihood that the false testimony could have affected
the verdict. See Lambert v. Blackwell, 387 F.3d 210, 242 (3d Cir.
2004). We review for clear error a trial court’s factual finding that
a witness’s testimony was not false and we will not disturb that
finding unless it is wholly unsupported by the evidence. United
States v. Johnson, 327 U.S. 106, 111-12, 66 S.Ct. 464, 466 (1946);
Gov’t of V.I. v. Lima, 774 F.2d 1245, 1251 (3d Cir. 1985).
The District Court found that Hoffecker failed to show that
Swarn had given false testimony or that the Government knowingly
had offered perjured testimony. The court found that Swarn’s
testimony that he had received a college degree was not
intentionally false because Swarn had offered an explanation for
his belief that he had graduated. The court also found that
Hoffecker could not show that Swarn was testifying falsely when
he stated that he had worked for Global, despite the lack of
documentation. The court found that Swarn’s admission that he
did not tell the Florida Probation Office about his employment at
Global did not demonstrate that he committed perjury and
appropriately could be addressed by defense counsel in his closing
argument when discussing Swarn’s credibility. Finally, the court
found that evidence that Swarn might have lied in filling out
regulatory or tax forms did not demonstrate that he had committed
perjury when he testified in this case.
We find that the District Court did not err when it found that
Hoffecker had not shown that Swarn committed perjury. Swarn
gave reasonable explanations for his alleged false testimony,
leading us to conclude that he testified truthfully. Although
defense counsel showed that Swarn previously had concealed his
employment with Global, this circumstance does not mean that he
lied about his employment on the witness stand and counsel was
free to comment on Swarn’s credibility during closing argument.
It must be remembered that we are concerned here with whether
Swarn’s testimony was false in this case, not whether he had been
forthright in other situations. Moreover, Hoffecker did not show
that the Government knew or should have known of Swarn’s
alleged perjury. In fact, we are surprised that Hoffecker has raised
these rather inconsequential matters as a basis for a reversal here
inasmuch as when Swarn’s allegedly false testimony is considered
68
within the context of the entire case we see no chance at all that,
even if false, it could have affected the verdict. In these
circumstances, the Government’s use of Swarn’s testimony did not
violate Hoffecker’s due process rights.
6. Exclusion of Expert Testimony
Hoffecker next contends that the District Court improperly
excluded three defense expert witnesses in violation of his
constitutional right to present relevant evidence. On December 13,
2005, three business days before jury selection in the second trial,
and 34 months after the indictment had been returned on February
14, 2003, Hoffecker notified the Government of his intent to call
three experts: Ian MacDonald, Rodney Stavert, and Sterling Quant.
App. vol. 59 at 72-90. According to the notices, MacDonald “may
provide testimony with respect the metals markets” and “about his
analysis of the program offered by Amitex . . . .” Id. at 73-74.
Quant “may provide general testimony with respect to the legal
framework that governs domestic and international businesses [sic]
entities in the Bahamas” and “about the framework of Amitex’s
business transactions under Bahamian law.” App. vol. 59 at 80.
Stavert “may provide testimony with respect to the metals market”
and “may analyze the program offered by Amitex . . . .” App. vol.
59 at 86. The District Court found that Hoffecker had failed to
comply with Federal Rule of Criminal Procedure 16(b)(1)(C)
because the notice was late and deficient. As a sanction for this
noncompliance, the court precluded the three experts from
testifying at trial.
The Sixth Amendment guarantees a defendant the right “to
have compulsory process for obtaining witnesses in his favor . . .
.” U.S. Const. amend. VI. But the right to present relevant
evidence is “subject to reasonable restrictions.” United States v.
Scheffer, 523 U.S. 303, 308, 118 S.Ct. 1261, 1264 (1998). The
Supreme Court explained in Scheffer that:
A defendant’s interest in presenting such evidence
may thus bow to accommodate other legitimate
interests in the criminal trial process. As a result,
state and federal rulemakers have broad latitude
under the Constitution to establish rules excluding
69
evidence from criminal trials. Such rules do not
abridge an accused’s right to present a defense so
long as they are not arbitrary or disproportionate to
the purposes they are designed to serve. Moreover,
we have found the exclusion of evidence to be
unconstitutionally arbitrary or disproportionate only
where it has infringed upon a weighty interest of the
accused.
Id. (citations and internal quotation marks omitted). In harmony
with the Supreme Court’s later decision in Scheffer, we earlier had
indicated that “[t]his court has upheld the exclusion of expert
witnesses as an appropriate sanction for a party’s violation of a
discovery order or some other pre-trial order.” United States v.
68.94 Acres of Land, 918 F.2d 389, 396 (3d Cir. 1990).
Federal Rule of Criminal Procedure 16(b)(1)(C) which
concerns reciprocal discovery of expert witnesses provides in
pertinent part:
The defendant must, at the government’s request,
give to the government a written summary of any
testimony that the defendant intends to use under
Rules 702, 703, or 705 of the Federal Rules of
Evidence as evidence at trial, if – (i) the defendant
requests disclosure under subdivision (a)(1)(G)
[providing for government disclosure of its expert
witnesses] and the government complies . . . . This
summary must describe the witness’s opinions, the
bases and reasons for those opinions, and the
witness’s qualifications.
Fed. R. Crim. P. 16(b)(1)(C). The rule is meant
to prevent the defendant from obtaining an unfair
advantage. For example, in cases where both
prosecution and defense have employed experts to
make psychiatric examinations, it seems as important
for the government to study the opinions of the
experts to be called by the defendant in order to
prepare for trial as it does for the defendant to study
70
those of the government’s witnesses.
Id., Advisory Committee Notes (1966 Amendment). Moreover, the
rule is “intended to minimize surprise that often results from
unexpected expert testimony, reduce the need for continuances, and
to provide the opponent with a fair opportunity to test the merit of
the expert’s testimony through focused cross-examination.” Id.,Advisory Committee Notes (1993 Amendment). Significantly,
“[a]lthough no specific timing requirements are included, it is
expected that the parties will make their requests and disclosures
in a timely fashion.” Id. If a party fails to comply with Rule
16(b)(1)(C), the court may:
(A) order that party to permit the discovery or
inspection; specify its time, place, and manner; and
prescribe other just terms and conditions; (B) grant
a continuance; (C) prohibit that party from
introducing the undisclosed evidence; or (D) enter
any other order that is just under the circumstances.
Fed. R. Crim. P. 16(d)(2).
Courts of appeals have upheld the exclusion of experts when
defendants fail to serve timely notice of their intent to call them as
witnesses. In United States v. Petrie, for example, the defendant,
who had been indicted for conspiracy to launder money after he
participated in a scheme to dupe persons interested in obtaining
venture capital funding, waited until the Friday afternoon prior to
the commencement of trial on the following Monday to disclose his
expert to the Government. 302 F.3d 1280, 1283, 1288 (11th Cir.
2002). The district court precluded the defendant’s expert from
testifying at trial as a sanction for the untimely disclosure. Id. at
1288-89. On appeal following his conviction, the defendant
claimed that his proposed expert witness’s testimony “would have
been highly relevant and extremely probative,” and that the witness
“would have explained the whole syndication world, and would
have talked about what a letter of credit is and why letters of credit
need to be confirmed from a top 50 or a top 100 bank.” Id. at 1288(quotation marks omitted). The Court of Appeals for the Eleventh
Circuit affirmed the conviction, noting that almost a year and a half
had passed between the return of the superseding indictment and
71
the defendant’s trial and that the expert’s testimony “would have
simply provided the jury with background information regarding
financial matters.” Id. at 1288-89.
The District Court here found that Hoffecker had violated
Rule 16(b)(1)(C) by filing a late and deficient notice. The court
first explained the context of its decision:
[T]he proceeding at hand is a retrial. The attorneys
for Mr. Hoffecker and Mr. Myers are the same
attorneys that . . . represented them at the first full
jury trial, and for all of the pretrial proceedings in
both trials. Second, there have been numerous
requests for adjournments, all made by the defense
over the vigorous objection of the government. . . .
[E]ighteen months have gone by since the retrial. At
no time was the issue of experts raised in the context
of the need for additional time. . . . [P]rotective
notice to rely on expert testimony, . . . was filed by
both [defense attorneys]. . . . [T]hat notice evidences
the defendants’ awareness of their Rule 16
obligations.
App. vol. 14 at 133-35. The court further noted that the record in
the case “shows a continuing series of requests by the United States
for material that these defendants were unequivocally required to
provide under Rule 16(b)(1)(C).” Id. at 135. The District Court
then stated that an expert witness may testify only if his testimony
is relevant and helpful to the jury, and asked, “How can a Court
make that determination? How can an adversary effectively cross-
examine absent that information? All of this takes predicate time
and exploration and investigation, and all of that would preclude a
late notice such as this.” Id. at 138. The court further found that
Hoffecker’s notices were facially deficient, stating that
“[c]onspicuously omitted from their notices . . . are the opinions
and basis and reasons for the opinions of [the] three proposed
experts. Merely the subjects of what they may discuss is offered.”
Id. at 139. Finally, the court found that there were “no factual
circumstances that [have] been presented by the defendants to
excuse the problems [with the notices],” and ordered that “[t]he
only and proper response of the Court is to exclude the proposed
72
testimony . . . .” Id. at 144.
Hoffecker makes several arguments to support his claim that
the District Court abused its discretion by excluding the three
expert witnesses. He cites United States v. Davis for the
proposition that “the compulsory process clause of the sixth
amendment forbids the exclusion of otherwise admissible evidence
solely as a sanction to enforce discovery rules or orders against
criminal defendants.” 639 F.2d 239, 243 (5th Cir. 1981). But the
Supreme Court effectively rejected the Davis holding in Taylor v.
Illinois, as it concluded that a preclusion sanction can be an
appropriate response to a criminal defendant’s discovery violation.
484 U.S. 400, 416, 108 S.Ct. 646, 656 (1988). The Court stated
that
a trial court may not ignore the fundamental
character of the defendant’s right to offer the
testimony of witnesses in his favor. But the mere
invocation of that right cannot automatically and
invariably outweigh countervailing public interests.
The integrity of the adversary process, which
depends both on the presentation of reliable evidence
and the rejection of unreliable evidence, the interest
in the fair and efficient administration of justice, and
the potential prejudice to the truth-determining
function of the trial process must also weigh in the
balance.
Id. at 414-15, 108 S.Ct. at 656. In light of the Supreme Court’s
decision in Taylor, we will not follow the earlier opinion in Davis.
Hoffecker also contends that United States v. Peters held
that exclusion of a defense expert for failure to provide timely
notice is impermissible in the absence of any discovery violation.
937 F.2d 1422, 1426 (9th Cir. 1991). In Peters, the district court
excluded the defendant’s expert witness for violation of a local
disclosure rule. Id. at 1424. The court of appeals reversed, finding
that the defendant had not violated any clear discovery rule and
thus exclusion of the testimony was inappropriate. Id. at 1426.
Here, unlike the defendant in Peters, Hoffecker violated the notice
requirement contained in Federal Rule of Criminal Procedure
73
16(b)(1)(C). See also United States v. Ramone, 218 F.3d 1229,
1237 n.5 (10th Cir. 2000) (distinguishing Peters because Ramone
violated Federal Rule of Evidence 412’s notice requirement).
Accordingly, the holding in Peters is inapplicable in this case.
Hoffecker also argues that the Government had notice of the
three experts for more than two months prior to the commencement
of the defense case. While this may be true, it is misleading
because it ignores the fact that the Government only received
notice of the experts three business days before jury selection.
Moreover, when Hoffecker gave his notice neither the court nor the
Government could have known how long the interval would be
between the giving of the notice and the start of the defense case.
Overall it is clear that the notice simply did not give the
Government enough time to prepare for these three experts,
especially considering the complexity of the case and the
circumstance that the Government had its attention and resources
focused on jury selection and its case-in-chief when Hoffecker
notified the Government of these proposed witnesses. Clearly,
admission of this testimony would have been an affront to the
public interests in the “integrity of the adversary process,” “the fair
and efficient administration of justice,” and “the truth-determining
function of the trial process . . . .” Taylor, 484 at 414-15, 108 S.Ct.
at 656.
Hoffecker also argues that the three witnesses were “vital”
and “would have altered the outcome of the trial” but fails to
support this argument. Appellant’s Br. at 48. In his brief,
Hoffecker states that “MacDonald would have testified regarding
the commodities market, including the legitimacy of the Amitex
program,” Stavert “would have focused on the pricing of
investments through a market maker,” and Quant “was proffered
to testify about the legality of Amitex as a Bahamian corporation.”
Id. Hoffecker’s generalized explanations do not provide us with
any real information about what these experts would have said at
trial or why their testimony “would have altered the outcome of the
trial.” Hoffecker has not offered their opinions or the basis for
those opinions, in violation of his obligation under Rule
16(b)(1)(C). Why, for example, was Amitex’s program
“legitimate”? For all we know from what we can discern from
Hoffecker’s deficient notice, like the defendant’s expert in Petrie,
74
these experts “would have simply provided the jury with
background information regarding financial matters.” 302 F.3d at
1289. Hoffecker clearly has failed to show us that the District
Court abused its discretion when it found that his notice of his
intention to call the witnesses was deficient and untimely.
Finally, in a letter submitted to this Court on March 25,
2008, Hoffecker cites United States v. Nacchio, 519 F.3d 1140(10th Cir. 2008), where the Court of Appeals for the Tenth Circuit
reversed a defendant’s conviction because the district court had
abused its discretion when it excluded the defendant’s expert under
the mistaken belief that the defendant’s Rule 16(b)(1)(C) disclosure
was required to contain extensive discussion of the expert’s
methodology. Id. at 1151. The court found that the error was not
harmless because “if credited by the jury, [the expert’s testimony]
might have changed the jury’s mind” and “[t]he record does not
otherwise contain overwhelming evidence of guilt . . . .” Id. at
1156 (citation and quotation marks omitted).
Nacchio is distinguishable from this case for several
reasons. Here, the District Court excluded Hoffecker’s experts
both for the insufficiency of the notice of their testimony and for
the inexcusable delay in providing notice while in Nacchio the
timing of the defendant’s notice was not at issue. Moreover,
Hoffecker’s notice was insufficient because it did not include the
experts’ opinions and the bases and reasons for those opinions
which Nacchio stated Rule 16 requires. Id. at 1150. Finally, we
cannot conclude that the District Court’s exclusion of his experts
prejudiced Hoffecker. He never has explained adequately how the
expert testimony would have been relevant and material, and unlike
in Nacchio, here there is “overwhelming evidence of guilt.”
In these circumstances, Hoffecker has not met his burden by
showing that the District Court’s action was arbitrary, fanciful, or
clearly unreasonable. See Stecyk v. Bell Helicopter Textron, Inc.,
295 F.3d 408, 412 (3d Cir. 2002). He has not attempted to explain
why his notice was late and deficient and we see no reason why he
could not have obtained these witnesses far sooner. After all, he
had 34 months after his indictment to obtain the testimony, as
compared to the 18 months the defendant in Petrie had between the
indictment and the trial, but nevertheless would have us believe
75
that on the eve of the second trial all three witnesses suddenly
became available. Neither his opening nor reply brief addresses the
reason for the delay. Moreover, we are struck by the circumstance
that not one or two but three witnesses suddenly became available.
How can we avoid believing that their availability reflected a
change or refinement of Hoffecker’s trial strategy? Inasmuch as
we are not as gullible as Hoffecker’s victims, we simply cannot
believe that it was not until that late date that all three of these
experts suddenly became available or could have become available.
Overall, we find it to be clear that the court did not abuse its
discretion when it excluded Hoffecker’s expert witnesses as a
sanction for violating Rule 16(b)(1)(C).
7. Admission of Evidence of the Civil Injunction
against Hoffecker
Hoffecker also argues that the District Court abused its
discretion when it admitted evidence of a civil injunction that had
been entered against him. As we discussed above, the Federal
Trade Commission brought an action in 1989 against Hoffecker
and a business named “Uni-Vest” alleging deceptive and unfair
acts and practices. App. vol. 9 at 11. The FTC action was
successful for in July 1991 a district court entered a permanent
injunction against him in the Southern District of Florida “forever
enjoin[ing] and restrain[ing him] from telemarketing precious
metals when the purchasing of precious metals is to be made in
whole or in part with financing.” Id. at 11-12.
Hoffecker moved prior to the first trial to exclude evidence
of the entry of permanent injunction but the District Court denied
his motion because it found that the evidence was “intrinsic” to the
offenses charged in this case. Hoffecker renewed the motion prior
to the second trial but the court denied the motion and made the
further finding that evidence of the injunction was relevant on the
question of whether Amitex’s customers would have invested in
Amitex’s LPCIP, particularly in light of Hoffecker’s likely defense
that the customers were not victims of a conspiracy but merely
were disappointed investors who had been given the information
they needed to make their investment decision.
During the second trial, the Government introduced
76
evidence of the injunction several times in its case-in-chief by
asking witnesses who were former customers of Amitex whether
they knew about the order imposing the lifetime ban on Hoffecker
and, if they had been unaware of it, whether they would have
wanted to know about the ban before deciding whether or not to
send money to Amitex to purchase physical commodities. Even
former Global employee, Fran Leone, who, after all, was in
frequent contact with Hoffecker, also testified that she was not
aware of the lifetime ban on Hoffecker when she worked for him
at Global. Clearly, Hoffecker was keeping quiet about the
injunction.
Hoffecker argues that the District Court abused its discretion
when it admitted evidence of the injunction, which he contends was
“irrelevant and prejudicial evidence of uncharged conduct” that
placed his character “in a bad light” and “conditioned” the jury to
conclude that Hoffecker and Myers were “fraudsters.” Appellant’s
Br. at 50-52. The Government answers that evidence of the
injunction was “intrinsic” to the charged offenses and thus was
admissible. The Government further argues that, even if this
evidence was not intrinsic, it was admissible under Federal Rule of
Evidence 404(b) because it was introduced to prove something
other than bad character. “We review a district court’s decision to
admit evidence for abuse of discretion.” United States v. Gibbs,
190 F.3d 188, 217 (3d Cir. 1999).
Rule 404(b) governs the admissibility of evidence of “other
acts” and states in pertinent part:
Evidence of other crimes, wrongs, or acts is not
admissible to prove the character of a person in order
to show action in conformity therewith. It may,
however, be admissible for other purposes, such as
proof of motive, opportunity, intent, preparation,
plan, knowledge, identity, or absence of mistake or
accident . . . .
Fed. R. Evid. 404(b). Thus, Rule 404(b) “does not apply to
evidence of uncharged offenses committed by a defendant when
those acts are intrinsic to the proof of the charged offense.” Gibbs,
190 F.3d at 217 (holding that the defendant’s participation in
77
uncharged acts of violence was admissible as direct proof of his
participation in cocaine conspiracy); see also Fed. R. Evid. 404,
Advisory Committee Notes (1991 Amendment). “[A]cts are
intrinsic when they directly prove the charged conspiracy.” United
States v. Cross, 308 F.3d 308, 320 (3d Cir. 2002). Even if the
evidence is “extremely prejudicial to the defendant,” “the court
would have no discretion to exclude it because it is proof of the
ultimate issue in the case.” Gibbs, 190 F.3d at 218 (quoting 22
Charles A. Wright & Kenneth W. Graham, Jr., Federal Practice and
Procedure § 5239, at 450-51 (1978)); see also United States v.
Bobb, 471 F.3d 491, 497-98 (3d Cir. 2006) (holding that evidence
of an uncharged assault by the defendant was admissible because
it was direct evidence of his participation in and enforcement of
conspiracy to distribute crack and cocaine).
Evidence of the lifetime ban on Hoffecker was part of the
charged offense. The indictment charged that “[i]t was part of the
conspiracy that . . . Hoffecker . . . intentionally concealed and
failed to disclose to investors in the LPCIP that, as a result of a
lawsuit brought by the Federal Trade Commission in 1991, . . .
Hoffecker was permanently prohibited from selling, or offering to
sell, precious metal on a financed basis. As a result of this
prohibition . . . Hoffecker . . . operated Amitex outside the United
States and claimed that [he] did not engage in transactions
involving commodity futures or options in order to avoid regulation
by the U.S. Commodity Futures Trading Commission and other
U.S. regulatory authorities.” App. vol. 1 at 18-19.
Moreover, the Government was required to prove
Hoffecker’s intent to commit the charged crimes of conspiracy to
commit mail fraud and mail fraud. During the second trial, in
anticipation of Hoffecker’s defense that he lacked the intent to
defraud and that he never intended to misrepresent or omit material
facts in developing his commodities program, the Government used
evidence of the lifetime ban against him to show that Hoffecker
purposefully was engaging in forbidden conduct and that he
structured Amitex off-shore to avoid regulatory and law
enforcement scrutiny. The ban further explained why Hoffecker
set up the fraud in a sophisticated manner, using at least two
companies: Amitex that was incorporated off-shore as a financial
institution and Global and other boiler rooms that were located
78
within the United States. The ban also explained why Hoffecker
created layers of false pretenses to hide his ownership of the two
companies. The Government also used the evidence to show that
Hoffecker had failed to disclose a material fact to potential Amitex
customers and that concealment of this material fact constituted
fraud. In the circumstances, the District Court properly admitted
the injunction evidence because it was “intrinsic” to the charged
offenses.
Hoffecker claims that the District Court’s decision to admit
the evidence of the injunction allowed the Government to “have it
both ways”: he argues that it was unfair that he was not permitted
to argue that Field was his attorney between 1996 and 1998 even
though the court allowed the Government to use evidence of the
1991 injunction entered in an action in which Field acted as his
attorney. Appellant’s Rep. Br. at 53. But the District Court
admitted the evidence that Field was Hoffecker’s lawyer during the
case that resulted in the 1991 injunction; there is no evidence
supporting his argument that Field still was acting as his lawyer
during the 1996-98 Amitex conspiracy. Accordingly, the District
Court did not err in admitting the evidence of the entry of the
injunction.
Hoffecker also argues that the admission of different
evidence regarding a different consent decree arising out of yet
another company called “Uni-Met” prejudiced him. But the court
admitted evidence of this consent decree exclusively against
Hoffecker’s co-defendant Myers. Only the person whose prior acts
are at issue may raise a Rule 404(b) challenge on appeal.
See United States v. Davis, 154 F.3d 772, 779 n.3 (8th Cir. 1998)
(defendants lack standing to challenge evidence of other
defendant’s other acts on Rule 404(b) grounds); United States v.
David, 940 F.2d 722, 736 (1st Cir. 1991) (“Objections based on
Rule 404(b) may be raised only by the person whose ‘other crimes,
wrongs, or acts’ are attempted to be revealed.”); see also United
States v. Washington, 12 F.3d 1128, 1135 n.2 (D.C. Cir. 1994).
Accordingly, Hoffecker cannot raise a Rule 404(b) challenge to the
admission of the Uni-Met consent decree against Myers.
Moreover, the District Court twice instructed the jury
regarding the Uni-Met evidence, making clear that this evidence
79
was “not admissible as to Mr. Hoffecker and cannot be considered
by you in evaluating the case involving Mr. Hoffecker.” App. vol.
49 at 21; vol. 15 at 12. These instructions minimized any
“spillover” prejudice to Hoffecker arising from the admission of
this evidence. See United States v. Johnson-Dix, 54 F.3d 1295,
1308 (7th Cir. 1995) (stating that “[e]ven if Rule 404(b) evidence
is properly admitted against one defendant in a joint trial, . . . the
district court must consider whether the evidence may have a
‘spillover’ effect that could deprive the other defendants to whom
the evidence does not apply of their right to a fair trial” and that a
limiting instruction would “minimize[ ] any spillover prejudice”);
David, 940 F.2d at 736 (limiting instruction to the jury is “the
proper course to ensure against prejudicial spillover”). In the
circumstances, the District Court did not err in admitting this
evidence at trial.
8. Exclusion of Hoffecker’s out-of-court statements
Hoffecker next contends that the District Court erred when
it did not permit co-defendant Myers to play the entirety of a tape
recording, portions of which the Government had played during its
case-in-chief, as admissions by a party-opponent. In the recording
made on February 24, 1997, Hoffecker was making a presentation
to CIC, a Government undercover operation in East Brunswick,
New Jersey, seeking to recruit CIC as an Amitex boiler-room.
Hoffecker asserts that he made statements on the tape that support
his claim at trial that Amitex was a legitimate operation.
The Government contends that Hoffecker has waived this
claim because although Myers raised the issue before the District
Court, Hoffecker never sought to play the CIC tape himself and did
not join in or adopt Myers’s motion. The Government suggests
that Hoffecker made a strategic decision not to join in Myers’s
motion because he feared that by offering his own purportedly
exculpatory out-of-court statements, he would trigger the
Government’s use of his own inculpatory statements he made to
the Government during two proffer sessions in May 1999.
Hoffecker entered into a proffer agreement with the Government
which permitted the Government to use his proffer statements
against him “to rebut any evidence or arguments offered on” his
behalf. Supp. app. at 102-04. The Government contends that by
80
offering his own exculpatory statements on the CIC tape to argue
that Amitex was a legitimate business, Hoffecker would have
contradicted the statements he made during his proffer sessions and
thus open the door to the Government using his proffer statements
to attack his credibility as a hearsay declarant on the CIC tape.
Accordingly, the Government contends that Hoffecker had
something to lose by raising this claim in the District Court and
thus by making the strategic choice not to join in Myer’s motion,
he has waived the claim.
Hoffecker responds that the Government’s argument
“ignores the strength of the operative trial agreement that bound
both defendants to all objections and evidence unless expressly
opting out, a protocol initiated by the district court at the first trial
and continued throughout the retrial.” Appellant’s Rep. Br. at 54.
Hoffecker does not, however, provide us with a citation to the
record to demonstrate this “operative trial agreement.” Hoffecker
contends that, under this agreement, Myers’s motion to admit the
CIC tape “fully preserved this evidentiary issue for appellate
review.” Id. at 55.
We question whether Hoffecker has preserved this issue for
the appeal. But even assuming that he has not waived the claim,
we conclude that the claim is without merit because the evidence
is inadmissible hearsay. See Fed. R. Evid. 801(c) (“‘Hearsay’ is a
statement, other than one made by the declarant while testifying at
the trial or hearing, offered in evidence to prove the truth of the
matter asserted.”); Fed. R. Evid. 802 (“Hearsay is not admissible
except as provided by these rules . . . .”).
Hoffecker claims that the CIC tape is not hearsay because
he did not offer it for the truth of the matter stated but as evidence
of his then existing state of mind. See Fed. R. Evid. 803(3)
(Hearsay rule does not apply to “[a] statement of the declarant’s
then existing state of mind, emotion, sensation, or physical
condition (such as intent, plan, motive, design, mental feeling, pain,
and bodily health), but not including a statement of memory or
belief to prove the fact remembered or believed . . . .”). He argues
that the tape is evidence of his state of mind because it “presents a
more complete picture of Hoffecker’s attitude toward his
customers, and his repeated emphasis that sales must be based on
81
correct information, that Amitex was a delivery program in which
deliveries would always be made upon the investor’s direction, and
that Amitex hedged all investor positions through hedging expert
Hug.” Appellant’s Br. at 54-55.
Hoffecker is incorrect. Of course, the mere fact that he
claimed he offered the tape for a different purpose does not change
the reality that he offered it for its truth, i.e., to show that Amitex
was a legitimate operation. The District Court characterized the
statements as his “description of how to sell in a way that is wholly
legal,” a characterization with which Myers agreed. App. vol. 34
at 16. The District Court found that the statements were
plain and simple exculpatory. This statement is a
sell about the legitimacy of the Amitex program.
This statement is being made to people that Mr.
Hoffecker believed would be agents of his program
and he had every reason to want them to sign on and
sell aggressively for his own personal gain.
Id. at 22. As the Government pointed out during oral argument
before the District Court, admitting his out-of-court statements
about the legitimacy of the Amitex operation would have been
tantamount to allowing Hoffecker to testify without being subject
to cross-examination. Indeed, in his Reply Brief Hoffecker states
that the CIC tape was “corroborative of the defense claims of actual
innocence and markedly inconsistent with government portrayals
of an ongoing fraud scheme . . . . [It] contained the very fabric of
the Amitex program as explained to brokers . . . .” Appellant’s
Rep. Br. at 54, 56. It is apparent that he offered these out-of-court
statements solely for their truth. In these circumstances, we agree
with the District Court and find that the court properly excluded the
tapes as inadmissible hearsay.
Hoffecker also takes issue with the District Court’s decision
to allow the Government to introduce and play portions of the CIC
tape for the jury. This decision, however, was not erroneous
because the Government could offer the statements as admissions
by a party-opponent. See Fed. R. Evid. 801(d)(2).
Hoffecker also contends that Myers should have been
82
allowed to play the entire CIC tape for the jury pursuant to the
doctrine of completeness. Federal Rule of Evidence 106 provides
that “[w]hen a writing or recorded statement or part thereof is
introduced by a party, an adverse party may require the
introduction at that time of any other part or any other writing or
recorded statement which ought in fairness to be considered
contemporaneously with it.” As we have explained, additional
portions of a recording may be played “if it is necessary to (1)
explain the admitted portion, (2) place the admitted portion in
context, (3) avoid misleading the trier of fact, or (4) insure a fair
and impartial understanding.” United States v. Soures, 736 F.2d
87, 91 (3d Cir. 1984) (citing United States v. Marin, 669 F.2d 73,
84 (2d Cir. 1982)). “The Rule does not require introduction of
portions of a statement that are neither explanatory of nor relevant
to the passages that have been admitted.” Id.Hoffecker argues that it was necessary to admit his
statements on the entirety of the CIC tape to rebut his statements on
another recording, the “Westin tape,” which the Government
played in its entirety, and to rebut his unrecorded statements that
two former Global employees testified that they recalled. The
Westin tape was a recording of Hoffecker’s sales tutorial to his
telemarketers at Westin, one of his telemarketing businesses. The
two former Global employees testified that they heard Hoffecker
give similar presentations to the Global sales force.
The context of the CIC tape, however, was very different
from the context of the Westin and Global presentations. At CIC,
Hoffecker sought to woo prospective boiler-room sales people to
join his Amitex sales force. Hoffecker did not own or control CIC
and was visiting CIC for the first time when he made these
statements. Hoffecker’s sales pitches to his employees at Westin
and Global, two companies that he owned and controlled, were
“much more frank and blatant, explaining to them how to talk to
and treat customers in order to defraud them.” Appellee’s Br. at
117. As the Government points out, his “instructions to his
telemarketers whom he had co-opted into his fraud . . . were
probative of [his] intent to defraud[, while] the CIC tape was
probative of how Hoffecker would attempt to recruit prospective
telemarketers (whom he had never met before, had no control over,
and had not yet co-opted into his scheme).” Id. at 117-18.
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Significantly, Hoffecker does not point to any specific statement on
the CIC tape to support his arguments.
In these circumstances, we find that Hoffecker has not
shown that the CIC tape was necessary to explain or place in
context the Westin tape or the testimony about the Global
presentation, avoid misleading the jury, or “insure a fair and
impartial understanding.” Soures, 736 F.2d at 91. Accordingly, we
conclude that the District Court did not err when it did not permit
Myers to play the CIC tape in its entirety at trial.
9. Alleged improper comments by the prosecutor during
closing argument
Hoffecker next argues that the prosecutor made improper
comments during closing argument by “becoming a trier of fact,”
misstating trial testimony, and alluding to criminal conduct not
analogous to the charged crimes. Appellant’s Br. at 56. “We
review a district court’s decision not to grant a mistrial on the
grounds that the prosecutor made improper remarks in closing
argument for abuse of discretion.” United States v. Dispoz-O-
Plastics, Inc., 172 F.3d 275, 282 (3d Cir. 1999) (citation and
quotation marks omitted).
First, Hoffecker contends that the prosecutor “repeatedly
took on the role as trier of fact.” Appellant’s Br. at 56. He points
to the following remarks the prosecutor made during rebuttal: (1)
when discussing testimony concerning Amitex’s financing
program, the prosecutor said, “I don’t know whether folks were
asleep or whatever,” and then, “I don’t know what other kind of
proof somebody might expect”; (2) in response to defense
counsel’s distinction between El Houri having an office and having
representations, the prosecutor said, “I guess they were what,
personal friends of Mr. Walid El Houri or what?” (3) addressing
the businesses attributable to El Houri, the prosecutor stated, “I still
haven’t heard any explanation for the lie that there were billions of
dollars in business with respect to which Mr. Pedro Rolle said that
there was absolutely no evidence of”; (4) discussing the Amitex
representations in documents, the prosecutor stated, “If that’s not
fraudulent intent, telling people one thing and then doing
something else, I don’t know what is”; (5) the prosecutor stated,
84
“All right, we know that Amitex lied to its customers”; (6)
responding to defense counsel’s argument regarding Amitex
storage, the prosecutor said, “Are we on the same planet? Did we
sit through the same two plus months of evidence?” (7) the
prosecutor stated, “Last time I checked, ‘held’ means in English –
of course, I don’t know about the Twilight Zone – holding on to
something”; (8) the prosecutor stated, “We’re still looking for that
magic word hedging. It’s like searching for the Holy Grail. Look
at all these documents, look for the word hedging. There’s going
to be a reward out for that”; and (9) when discussing a
Government’s witness’s analysis of hedging, the prosecutor stated,
“So if this doesn’t prove beyond any reasonable doubt that the
whole song and dance with respect to hedging is a charade, I’m not
sure what would.” App. vol. 51 at 108-28.
As the District Court found, the above-quoted comments
were mere “rhetorical devices” or “throw-away comments” and
“there is not the prosecutor standing in front of evidence or no
evidence or trying to create evidence by saying, ‘you have to find
this because I say so,’ or ‘this is what this says’ in the face of no
argument or no exposition of what the so-called evidence is.” App.
vol. 52 at 16-17. The court concluded that these remarks all
constituted proper argument, and we cannot find that the court
abused its discretion in reaching this conclusion. A prosecutor is
permitted – indeed, expected – to comment on the evidence that
was presented at trial and connect the dots for the jury by
explaining what each piece of evidence means and how it all fits
together to prove his or her case. Such comments are particularly
helpful after a long trial such as that here, particularly when the
indictment charges offenses committed in a complex, sophisticated
business context. The prosecutor’s comments were not improper
injections of personal opinion or facts not in evidence.
Next, Hoffecker argues that the prosecutor misstated the
trial testimony of defense expert Ed Strongin. During rebuttal
summation, the prosecutor quoted from the transcript of the
defense closing in which Myers’s attorney twice stated that,
according to Strongin, Hoffecker and Myers sent over one million
dollars to the Phoenix hedge fund. The prosecutor then compared
defense counsel’s claim to evidence admitted at trial that showed
that less than one million dollars actually went to Phoenix.
85
Defense counsel then requested a side bar conference and
explained to the court that while the evidence showed that less than
one million dollars went to Phoenix, additional money went to a
different hedge fund called Peregrine. Defense counsel stated that
he had misspoken during his closing argument and meant to say
that over one million dollars went to Phoenix and Peregrine
together. The District Court ruled that the prosecutor neither had
misquoted defense counsel nor misstated Strongin’s testimony
regarding how much money actually was sent to Phoenix. We
agree with the District Court, and find that this ruling rather than
being the product of an abuse of discretion was absolutely
appropriate. After all, it would be quite remarkable to hold that the
prosecutor made an improper comment when he accurately referred
to a defense attorney’s argument. In fact, it was the defense
attorney who misstated the testimony, not the prosecutor.
Finally, Hoffecker argues that during rebuttal, the
prosecutor twice alluded to violent crimes not analogous to the
charged offenses. First, in response to Hoffecker’s closing
argument that Field should have intervened as a lawyer to advise
him that Amitex was fraudulent, the prosecutor pointed out that
Field was a government informant who was infiltrating the fraud,
and analogized his role to that of an undercover informant
infiltrating a drug gang: “that’s like saying when the government
sends in an undercover into a drug gang, the undercover is
supposed to come in and approach the gang leader . . . and say, ‘no,
no, no, no, you’re a bad boy, you shouldn’t sell drugs.’” App. vol.
51 at 104-05. Second, in response to Hoffecker’s closing argument
that Amitex was a legitimate operation because it had an office and
employees, the prosecutor stated, “[i]f you’re running a
sophisticated scam or you’re hoping to scam people the second and
third and fourth and fifth time as these folks did, of course, you
have to have an operation. This isn’t like running down the street
and grabbing somebody’s pocketbook. Frauds are ongoing. This
fraud was ongoing.” Id. at 107.
The District Court found that the prosecutor properly had
rebutted Hoffecker’s closing argument without implying that he
had committed a violent crime. First, the court found that the
prosecutor’s reference to a drug gang was not a specific reference
to violence but, instead, was an attempt to analogize Field’s
86
situation to a more common or familiar context for undercover
activity. Moreover, the court noted that it “was not Jack Field’s job
at the time” to make Hoffecker’s recorded conversations less
incriminating, and that the prosecutor’s statement properly rebutted
Hoffecker’s closing argument to that effect. App. vol. 52 at 10-11.
In any event, Hoffecker’s argument that Field should have told him
that he was engaging in a fraudulent operation is nothing short of
bizarre. If one thing is obvious it is that Hoffecker’s activities were
not technically illegal as being in violation of some intricate
regulation but, as the evidence overwhelmingly demonstrated, were
a complete scam which is exactly what Hoffecker intended that
they be. We cannot find that the court abused its discretion in this
instance.
Furthermore, the prosecutor’s reference to purse-snatching
explicitly contrasted Hoffecker’s own crimes with that offense.
This statement clearly did not imply that he had committed a
violent act. Moreover, the jury surely knew that this case did not
involve violence.
Hoffecker cites United States v. Moore, 375 F.3d 259 (3d
Cir. 2004), to support his argument. In Moore we reversed the
defendant’s convictions when, on the eve of the first anniversary
of the September 11, 2001 terrorist attacks, the prosecutor referred
to the defendant as a “terrorist” because, according to evidence of
other bad acts that improperly had been admitted at trial, he was a
violent drug dealer who “inflicted terror” upon his girlfriend and
her family. Id. at 264. We noted in Moore that we have reversed
convictions where “‘[t]he object, or at least effect, of this
disproportionate emphasis by the prosecution . . . was to portray
[the defendant] as . . . violence-prone . . . [and] a danger to society
and who needed to be removed for the protection of the public.’”
Id. (alterations in original) (quoting United States v. Himelwright,
42 F.3d 777, 786 (3d Cir. 1994)).
In this case, by contrast, the prosecutor did not suggest that
Hoffecker engaged in any violent conduct. Instead, he alluded to
non-violent criminal conduct to rebut directly Hoffecker’s closing
argument. The prosecutor did not disproportionately emphasize an
uncharged violent crime to portray him as “violence-prone” or “a
danger to society who needed to be removed for the protection of
87
the public.”5 Id. We conclude that the District Court correctly
found that the prosecutor’s rebuttal was appropriate.
10. Hoffecker’s Sentence
Finally, Hoffecker challenges his sentence of 210 months of
imprisonment. We review sentences for procedural errors and for
substantive reasonableness. We first must ensure that a district
court did not commit a significant procedural error in arriving at its
decision, “such as failing to calculate (or improperly calculating)
the Guidelines range, treating the Guidelines as mandatory, failing
to consider the § 3553(a) factors, selecting a sentence based on
clearly erroneous facts, or failing to adequately explain the chosen
sentence – including an explanation for any deviation from the
Guidelines range.”6 Gall v. United States, 128 S.Ct. 586, 597
(2007). We review a district court’s decision under an abuse of
discretion standard. Id. “[A] district court will be held to have
abused its discretion if its decision was based on a clearly
erroneous factual conclusion or an erroneous legal conclusion.”
United States v. Wise, 515 F.3d 207, 217 (3d Cir. 2008).
If we determine that a district court did not make any
significant procedural errors, we then review the substantive
reasonableness of the sentence under an abuse-of-discretion
standard. Gall, 128 S.Ct. at 597. We may not reverse a district
court’s sentence simply because we would have imposed a
different sentence. “As long as a sentence falls within the broad
range of possible sentences that can be considered reasonable in
light of the § 3553(a) factors, we must affirm.” Wise, 515 F.3d at
218.
Hoffecker first contends that the District Court
unconstitutionally augmented the sentence because it took into
5
We do not intend to imply that only criminals engaged in
violent acts are dangers to society. Surely Hoffecker was a danger
to his victims on whom he intentionally inflicted grievous harm.
6
In making our Guidelines calculations we use the 1997
Guidelines Manual as it was in effect at the time of the offenses.
88
consideration facts the jury did not find. Hoffecker’s base offense
level was 6 pursuant to U.S.S.G. § 2F1.1(a). The District Court
applied several enhancements under the Guidelines and added 31
offense levels to his base offense level, resulting in a total offense
level of 37 and an advisory Guidelines range of 210 to 262 months
(capped at the 240-month statutory maximum). As we explained
in United States v. Grier, “[o]nce a jury has found a defendant
guilty of each element of an offense beyond a reasonable doubt, he
has been constitutionally deprived of his liberty and may be
sentenced up to the maximum sentence authorized under the United
States Code without additional findings beyond a reasonable
doubt.” 475 F.3d 556, 561 (3d Cir. 2007) (en banc). We went on
in Grier to explain:
Post-Booker, the punishments chosen by Congress in
the United States Code determine the statutory
maximum for a crime. The Code identifies the facts
necessary to establish an offense and any
aggravating circumstances (e.g., significant drug
quantity, use of a firearm, injury to a victim) that
increase the statutory maximum punishment. These
facts must be established beyond a reasonable doubt.
But, once these facts are found, triggering the
statutory maximum, the judge may impose a
sentence anywhere under that maximum without jury
determinations and proof beyond a reasonable doubt.
...
None of the facts relevant to enhancements or
departures under the Guidelines can increase the
maximum punishment to which the defendant is
exposed. The Due Process Clause thus affords no
right to have these facts proved beyond a reasonable
doubt.
Id. at 565-66 (citations omitted). Accordingly, the District Court
did not violate the Constitution when it enhanced Hoffecker’s base
offense level by taking into account facts the jury did not find.
Hoffecker next argues that the District Court erred when it
89
applied six different enhancements that increased his offense level
by 27. First, he contends that the District Court erred when it
applied a 15-level enhancement to his offense level pursuant to
U.S.S.G. § 2F1.1(b)(1)(P) because Hoffecker was responsible for
losses totaling $14,151,596. According to the Sentencing
Commission’s commentary,
For the purposes of subsection (b)(1), the loss need
not be determined with precision. The court need
only make a reasonable estimate of the loss, given
the available information. This estimate, for
example, may be based on the approximate number
of victims and an estimate of the average loss to each
victim, or on more general factors, such as the nature
and duration of the fraud and the revenues generated
by similar operations. The offender’s gain from
committing the fraud is an alternative estimate that
ordinarily will underestimate the loss.
U.S.S.G. § 2F1.1 cmt. 8. Hoffecker argues that the District Court’s
finding was mere speculation. The District Court arrived at the
$14,151,596 total by combining Amitex’s disbursements of
$9,944,655 and Global’s realization of $4,206,941 in
“commissions” and “fees.” Far from being speculative, bank
records supported the court’s calculation of these amounts and
expert testimony at the trial was a further basis for the court’s
conclusions. Furthermore, if anything, the $14,151,596 total was
a conservative estimate as it was based on incomplete Amitex
banking records and did not include losses attributed to Amitex’s
boiler-rooms other than Global. In these circumstances, we
conclude that the District Court did not err when it applied the 15-
level enhancement to Hoffecker’s offense level.
Second, Hoffecker argues that the District Court erred when
it applied a 2-level enhancement pursuant to U.S.S.G. §
2F1.1(b)(2) because the offense involved more than minimal
planning and defrauded more than one victim. The Guidelines
define “[m]ore than minimal planning” as:
more planning than is typical for commission of the
offense in a simple form. ‘More than minimal
90
planning’ also exists if significant affirmative steps
were taken to conceal the offense, other than conduct
to which § 3C1.1 (Obstructing or Impeding the
Administration of Justice) applies. ‘More than
minimal planning’ is deemed present in any case
involving repeated acts over a period of time, unless
it is clear that each instance was purely opportune.
Consequently, this adjustment will apply especially
frequently in property offenses.
U.S.S.G. § 1B1.1 cmt. n.1(f). The District Court found that:
The testimony is ample in this case. The scheme
was complex. . . . The defendants’ efforts to create
and operate it were substantial and extensive and
documented through the secretly recorded
conversations. The victim testimony made it clear
that there were provided with statements, brochures
and other indices of a legitimate scheme that were, in
fact, contrived and carefully so by Mr. Hoffecker
and Mr. Myers. The broad geographical scope of the
victims and the nationwide boiler-rooms that were
set up were demonstrated by the evidence. The
location off-shore to avoid oversight was a lynch pin
of the intended success and actual success of the
operation.
App. vol. 55 at 53-54. In these circumstances, the District Court
did not err when it applied the 2-level enhancement to Hoffecker’s
offense level. Indeed, it is rare for us to see a case involving as
much planning as there was here.
Third, Hoffecker claims that the District Court erred when
it applied a 2-level increase pursuant to U.S.S.G. § 2F1.1(b)(3)(B)
because he violated a prior lifetime injunction in committing his
offenses. As we discussed above, the injunction stated that
Hoffecker:
should not telemarket, sell, offer for sale, [engage in]
brokering a sale, promoting a sale, or promoting the
brokering of a sale, arranging for a sale, or arranging
91
the brokering of a sale over the telephone involving
precious metals when the purchase of precious metal
is to be made in whole or in part with financing.
App. vol. 55 at 21. The District Court found that the injunction
“applies on all fours on the type of investment activity that the jury
found he was engaged in.”7 Id. at 54. We conclude that the
District Court did not err when it applied this enhancement.
Fourth, Hoffecker contends that the District Court erred by
applying a 4-level enhancement pursuant to U.S.S.G. § 2F1.1(b)(6)
because the offense affected a financial institution and he derived
more than one million dollars in gross receipts from the offense.
Hoffecker does not dispute that he derived more than one million
dollars from the offense, but he claims that Amitex was not a
“financial institution” because it was a sham company with no
legitimate business.
There is little case precedent addressing the issue of whether
an entity which is alleged to be the vehicle of the fraud can
constitute a “financial institution” for purposes of the Sentencing
Guidelines. The Guidelines Commentary defines “financial
institution” to include a “any state or foreign bank, . . . credit union,
. . . investment company, . . . and any similar entity, whether or not
insured by the federal government.” U.S.S.G. § 2F1.1 cmt. n.14.
Two other courts of appeals have concluded that the
enhancement will apply when the fraud affected a financial
institution that was itself the vehicle for the fraud. The Court of
Appeals for the Seventh Circuit in United States v. Collins
concluded that “when it walks and talks like a financial institution,
even if it is a phony one, it is . . . covered by § 2F1.1(b)(6).” 361
F.3d 343, 348 (7th Cir. 2004) (quoting United States v. Randy, 81
F.3d 65, 69 (7th Cir. 1996) (emphasis in original)); see also United
States v. Dale, 374 F.3d 321, 328 (5th Cir. 2004), vacated on other
grounds, 543 U.S. 1113, 125 S.Ct. 1067 (2004) (agreeing with
Collins decision that an illegitimate financial institution constitutes
7
Of course, Hoffecker’s activities here involved precious
metals, the subject of the injunction, but went beyond such items.
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a financial institution for purposes of section 2F1.1(b)(6)). In
Collins, the defendant had incorporated a sham investment
company and fraudulently used it as a conduit to raise millions of
dollars from victim investors. 361 F.3d at 344. On appeal, he
argued that a financial institution created solely for the purpose of
defrauding investors cannot be considered a victim of a scheme to
defraud. Id. at 347. The court of appeals pointed out that the
defendant’s company “was fraudulently held out to investors as a
financial company that offered the opportunity to invest in high-
return, zero-risk investments. . . . [It] utilized a network of
‘employees’ to draw over 400 unwitting investors into the scheme,
accumulating millions of dollars in receipts, all of which would
eventually be siphoned out of the company by the company’s
president and owner.” Id. at 348. Thus, the company “walked and
talked” like the financial institution it purported to be. Id. The
court found support for its decision in the Sentencing
Commission’s
expansive interpretation of what it means to
substantially jeopardize the safety and soundness of
a financial institution. . . . [T]he Commission
interprets § 2F1.1(b)(6) broadly, to cover threats to
the fiscal security of a corporation as well as the loss
of individual investments. Because the Sentencing
Commission extends the protections of § 2F1.1(b)(6)
beyond institutions to individual investors, it follows
that the Commission would intend the guideline to
apply to conduct that victimizes both legitimate and
fraudulent corporations. In both cases investors lose
their investment due to fraudulent conduct. It makes
no difference to individual investors in the present
case whether [the defendant] stole their money from
a legitimate corporation or one created for fraudulent
purposes; the important fact to the investors is that
their investments will not be repaid.
Id.
One district court has disagreed with the Court of Appeals
for the Seventh Circuit’s interpretation of this enhancement.
United States v. Sirotina, 318 F. Supp. 2d 43, 45-48 (E.D.N.Y.
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2004). In Sirotina, the court reviewed the legislative history of the
enhancement, which proceeded as follows: after the 1980s savings
and loan crisis, Congress directed the Sentencing Commission to
“provide for a substantial period of incarceration” for certain
offenses that “substantially jeopardize[] the safety and soundness
of a federally insured financial institution,” id. at 45 (quoting Pub.
L. No. 101-73, 103 Stat. 183, 501 (1989)); in response, the
Commission drafted section 2F1.1(b)(6) – known as (b)(8) in the
2000 version of the Guidelines, which the Sirotina court was using
– which implemented the law in a broader form by expanding the
definition of “financial institutions” beyond federally insured
financial institutions to uninsured financial institutions. After
reviewing this history, the court stated that
the guideline was aimed at imposing additional
punishment for conduct that results in the destruction
of legitimate organizations, such as the savings and
loan associations that were pilfered in the 1980s. In
expanding the definition of ‘financial institutions,’
all the Sentencing Commission did was to include a
broader array of legitimate entities subject to
protection. There is no basis to conclude that the
Commission chose to ignore the goal of [Congress’s]
directive and included sham organizations within the
umbrella of covered institutions, thereby placing the
victim and victimizer on equal footing.
Id. at 46. The court then reasoned that “[w]hen a legitimate
institution is brought to its knees by fraud perpetrated on it, there
is a ripple effect greater than the loss to the individual investors.
To apply this guideline not to the victim but to the perpetrator
makes no sense.” Id. The court continued:
Nothing in the definition of ‘financial institution’ in
Application Note 19 suggests that it was meant to
apply to an organization whose raison d’être is to
perpetrate fraud. See U.S.S.G. § 2F1.1, cmt. n. 19
(2000). When the Commission intends to apply a
guideline to both legitimate and fraudulent activities,
it knows how to do so. For example, in U.S.S.G. §
3B1.3, the Commission drafted a guideline that
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imposes a two-level enhancement for someone who
abuses a position of trust. In 1998, long after the
definition of ‘financial institution’ was added to the
Guidelines, the application note to the abuse of trust
provision was amended to clarify that the guideline
applied both where a defendant actually holds a
position of trust and where he or she pretends to do
so. Id. § 3B1.3, cmt. n. 2 (‘This adjustment also
applies in a case in which the defendant provides
sufficient indicia to the victim that the defendant
legitimately holds a position of private or public trust
when, in fact, the defendant does not.’). No similar
change was made to the application notes
interpreting ‘financial institutions’ in § 2F1.1(b)(8)
to reflect its application to sham entities. Certainly,
had the Sentencing Commission intended for the
definition of ‘financial institution’ to encompass a
fraudulent one, it would have made plain such an
unorthodox application of an ordinary term.
Id. at 46-47. The court then stated that:
the Seventh Circuit’s analysis [in Collins]
misconstrues the guideline. It is of course true that
investors in both legitimate and illegitimate
corporations suffer losses as a result of fraud. One
can steal from a legitimate organization and cause
losses to investors, or one can create a sham
company and effect the same injury. The harm
caused by the money lost, however, is covered by a
different guideline provision, § 2F1.1(b)(1). . . .
The threat to which § 2F1.1(b)(8) is directed is not
the victim losses per se but to the separate harm
caused by the destruction of a viable legitimate
organization – a harm that is not necessarily
congruent with investor losses. Application Note 19
addresses the damage to the entity itself, not the
injury to the defrauded individuals. When viewed
from the perspective of harm to the institution, the
purpose of the guideline would not be served by
punishing defendants for the destruction of a vehicle
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of fraud, which itself served no public good.
Id. at 47-48. Accordingly, the court concluded that the Sentencing
Commission did not intend for the 4-level enhancement to apply
when a fraud affected a “sham” institution that was itself the
vehicle for the fraud. Id. at 48.
For several reasons, we disagree with the court’s reasoning
in Sirotina and we agree with the Courts of Appeals for the Fifth
and Seventh Circuits that the 4-level enhancement applies when a
fraud affects a financial institution that acted as the vehicle for the
fraud. First, it does not make sense that the Congress or the
Sentencing Commission would seek to punish more severely a
person who controlled an institution that was legitimate than a
person who had controlled a sham institution. One would think
that the criminal running a completely fraudulent financial
institution is more deserving of the harsher sentence. The “ripple
effect” that the Sirotina decision acknowledges happens when an
institution “is brought to its knees by fraud” is the same whether
the institution is legitimate or a sham – in either circumstance, the
damage is greater than the loss to the individual investors. In
addition, the Sentencing Commission’s background commentary
for section 2F1.1 supports the conclusion that the definition of
“financial institutions” includes sham institutions that hold
themselves out as legitimate:
This guideline is designed to apply to a wide variety
of fraud cases. . . . Empirical analyses of pre-
guidelines practice showed that the most important
factors that determined sentence length were the
amount of loss and whether the offense was an
isolated crime of opportunity or was sophisticated or
repeated. Accordingly, although they are imperfect,
these are the primary factors upon which the
guideline has been based.
U.S.S.G. § 2F1.1 cmt. background. This comment suggests that an
offender that uses a sham financial institution to commit his fraud
is engaging in a “sophisticated” crime and thus should be subject
to the enhancement. Moreover, there is nothing in the guideline to
suggest that the Commission intended to limit the enhancement
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only to apply to legitimate financial institutions; we will not read
that limitation into the language of the guideline. Finally, we think
it would be difficult for courts to distinguish between a financial
institution that solely functioned as a vehicle for the fraud and one
that was at least partially legitimate. Accordingly, we conclude
that section 2F1.1(b)(6) applies to a fraud that affected a financial
institution that was itself the vehicle for the fraud.
In this case, the District Court found that:
Amitex clearly held itself out in its literature as a
financial institution. It sought to engender customer
confidence in the loan scheme. . . . [It] was [held out
as] this separate financial institution that would in
fact make the initial investment mean oh so much
more and the return oh so much greater because of
the ability to obtain a loan on and buy much more of
the commodities than the investment would
otherwise have covered.
App. vol. 55 at 56. “The use of the apparent financial institution
framework was effective and integral to the program this jury has
determined was a fraud.” Id. at 63. Thus, Amitex “walked and
talked” like a financial institution. Moreover, the evidence
demonstrated that Hoffecker derived far more than one million
dollars in gross receipts from the offense. In these circumstances,
the District Court did not err when it applied the enhancement to
increase Hoffecker’s offense level by 4 levels.
Fifth, Hoffecker argues that the District Court erred when it
applied a 2-level enhancement to his offense level pursuant to
U.S.S.G. § 3A1.1(b) because he knew or should have known that
the victims of the offenses were unusually vulnerable or otherwise
particularly susceptible to criminal conduct by virtue of their
naiveté. The District Court found that the victims were
unsophisticated and without expertise:
These were folks whose naiveté was used as a basis
for getting them to invest both at the beginning and
again and again. And the government has proven
through the reloading factor alone that is a link
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among many of the victims’ testimony that the
defendants viewed them as susceptible . . . . And
that they lost money as a result of that exploitation of
their susceptibility.
App. vol. 55 at 65. Though we see no reason why the term could
not be used to describe repeated legitimate solicitations, we are
dealing here with a fraud case where “the repeated targeting of
[the] victim, a practice called ‘reloading,’ constitutes evidence that
the defendant knew the victim was particularly vulnerable to the
fraud scheme.” United States v. Day, 405 F.3d 1293, 1296 (11th
Cir. 2005). Thus, the District Court’s use of the term “reloading”8
was entirely appropriate. In these circumstances, we conclude that
the District Court did not err when it applied the 2-level
“vulnerable victim” enhancement to Hoffecker ’s offense level.
Sixth, Hoffecker contends that the District Court erred by
applying a 2-level enhancement because he “abused a position of
public or private trust . . . in a manner that significantly facilitated
the commission or concealment of the offense . . . .” U.S.S.G. §
3B1.3. We apply a three-part test to determine whether a defendant
occupied a position of trust: “(1) whether the position allows the
defendant to commit a difficult to detect wrong; (2) the degree of
authority which the position vests in defendant vis-a-vis the object
of the wrongful act; and (3) whether there has been reliance on the
integrity of the person occupying the position.” United States v.
Hart, 273 F.3d 363, 376 (3d Cir. 2001) (citation and quotation
marks omitted).
In this case, the District Court found that Hoffecker was a
“highly intelligent man, highly skilled and experienced in this
market,” abilities which allowed him to commit a wrong that was
difficult to detect. App. vol. 55 at 67. Second, Hoffecker derived
a great degree of authority from his position vis-à-vis the victims
8
“Reemptying” might be a better term than “reloading.” On
the other hand, perhaps what would be appropriate is to make
selection of the term used from the point of view of the swindler or
the victim, as the case may be, as the swindler is being reloaded but
his victims are being reemptied.
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of his crime. He was vested with authority to coordinate a fraud
that employed intentionally misleading sales scripts and boiler-
room pressure tactics to defraud investors. He also exercised the
authority to hire and train the employees he needed to carry out his
scheme. Third, the District Court concluded that Hoffecker had
erected a “shield” by training and using “an efficient and highly
effective sales force” “as the vehicle of gaining the reliance of
these victims.” Id. at 68. The court also pointed to the brochures
distributed to victims that falsely promoted Amitex’s 25 years of
experience and offices in London, Monaco, and Munich. The court
reasoned that “[a]ll of this effort to promote the viability [of the
scheme] and engender victim reliance . . . cannot be swept aside .
. . .” Id. at 69. The court concluded that “the abuse of trust is all
part and parcel of that deliberate effort that the jury found in
convicting the defendants of this fraud, to create a contrived but
nonetheless apparently sound investment opportunity that was in
fact fraudulent to the core as found by this jury.” Id. at 70. In
these circumstances, we conclude that the District Court did not err
in applying the 2-level enhancement to Hoffecker’s offense level
for abusing a position of trust.
Hoffecker next argues that the District Court did not give
meaningful consideration to the section 3553(a) factors when it
imposed his 210-month sentence of incarceration.
The section 3553(a) factors that a district court must
consider are:
(1) the nature and circumstances of the offense and
the history and characteristics of the defendant;
(2) the need for the sentence imposed – (A) to
reflect the seriousness of the offense, to promote
respect for the law, and to provide just punishment
for the offense; (B) to afford adequate deterrence to
criminal conduct; (C) to protect the public from
further crimes of the defendant; and (D) to provide
the defendant with needed educational or vocational
training, medical care, or other correctional
treatment in the most effective manner;
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(3) the kinds of sentences available;
(4) the kinds of sentence and the sentencing range
established for – (A) the applicable category of
offense committed by the applicable category of
defendant as set forth in the guidelines . . . ;
(5) any pertinent policy statement . . . issued by the
Sentencing Commission . . .;
(6) the need to avoid unwarranted sentence
disparities among defendants with similar records
who have been found guilty of similar conduct; and
(7) the need to provide restitution to any victims of
the offense.
18 U.S.C. § 3553(a).
There is ample evidence that the District Court considered
the section 3553(a) factors in imposing sentence. In particular, the
court stated:
Mr. Hoffecker told me today that everybody knows
that commodities are risky. And the fact is, that
what was sold this jury found was not risk but utter
and complete ruin to anyone who gave one dollar. .
. . The calculated life plan that Mr. Hoffecker
engaged in was persistent fraud. Fraud against
many, many people who lost much much money . .
..
App. vol. 55 at 120-21. The court continued:
[F]rom his own remarks as revealed in the secretly
recorded conversations, Mr. Hoffecker does not have
respect for the law. There are the comments
regarding the fact that the Department of Justice
could not pierce the veil, could not provide
regulatory oversight. There are the injunctions.
There’s the history of litigation between Mr.
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Hoffecker and the regulatory agencies. . . . And to
the extent that a sentence must promote respect for
the law and provide just deterrence, I don’t believe
that the guideline level of 210 months is a
punishment more severe than is necessary. . . .
Nothing has deterred Hoffecker. Nothing until now.
I can’t take seriously the remark that he doesn’t
know how all of this happened. It happened because
he is exceeding[ly] good at what he does or did. He
was a lot smarter than a lot of the government
regulators and he figured out how to dodge and
weave and interstitially get a scheme that this jury
found was fraudulent. . . . [T]he program was a
scam. . . . And therefore, incapacitation for a
considerable period of time is truly the only
reasonable way for a sentencing judge to approach
those issues.
App. vol. 55 at 123-26. Beyond these statements, the District
Court considered at remarkable length all of the section 3553(a)
factors at the sentencing hearing. The transcript of the hearing,
stretching over 135 pages, reflects a careful and thorough
consideration of section 3553(a) in all its aspects.
We find that the District Court gave meaningful
consideration to the section 3553(a) factors. Accordingly, we
conclude that the District Court’s sentencing decisions were
procedurally sound.
We next consider, under an abuse of discretion standard,
whether Hoffecker’s sentence of 210 months was substantively
reasonable. Gall, 128 S.Ct. at 597. In conducting this analysis,
“[t]he question is not . . . what sentence we ourselves ultimately
might have decided to impose on the defendant. We are not
sentencing judges. Rather, what we must decide is whether the
district judge imposed the sentence he or she did for reasons that
are logical and consistent with the factors set forth in section
3553(a).” United States v. Cooper, 437 F.3d 324, 330 (3d Cir.
2006) (quoting United States v. Williams, 425 F.3d 478, 481 (7th
Cir. 2005)).
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Hoffecker contends that the sentence was unreasonable
considering that he “never before transgressed the boundaries of
the law,” “committed his life in service to others,” and was
“singled out as the person responsible for investors losing money
in admittedly high risk ventures . . . .” Appellant’s Rep. Br. at 64-
65.
We disagree with Hoffecker that his sentence was
substantively unreasonable. Taken as a whole, and given the
deferential standard with which we review sentencing
determinations, we find the District Court’s sentence was
consistent with the factors set forth in section 3553(a) and was
substantively reasonable. In light of the seriousness of his
offenses, the number of victims, the staggering amount of money
taken, his utter disrespect for the law and refusal to acknowledge
his transgressions, and the fact that nothing – including a
permanent injunction – deterred him from operating the scam, we
cannot conclude that the District Court abused its discretion when
it imposed a sentence at the bottom of the advisory Guidelines
range. Surely it was necessary in the words of section 3553(a) to
separate Hoffecker from society for a long period “to protect the
public from further crimes of the defendant.”
Hoffecker’s attempt to characterize his victims’ losses as
nothing more than the result of their lack of success “in admittedly
high risk ventures” is really quite extraordinary as their losses were
the product of his scam rather than of the operation of the
marketplace. Moreover, it is clear that the District Court took
Hoffecker’s arguments for leniency into account when it fashioned
his sentence. Although we do not deem a within-Guidelines
sentence presumptively reasonable, it is “more likely to be
reasonable than one that lies outside the advisory guidelines
range.” Cooper, 437 F.3d at 331. This sentence was, if anything,
on the low side of the range of reasonable sentences.
IV. CONCLUSION
In closing we think that it is appropriate to comment on the
District Court’s management of this long and difficult case. The
102
court was required to deal with many complex issues and did so
with great patience and skill and ensured that Hoffecker and Myers
received fair trials. Our obligation to review this case in the
uncharged atmosphere of our chambers has been difficult enough
but really pales when compared to the District Court’s burden to
make ruling after ruling in the difficult circumstances facing it
when managing the complex and highly contested jury trial here.
The court’s efforts should not go unnoticed and they have not been.
The amended judgment of conviction and sentence entered July 24,
2006, will be affirmed.
103