United States v. Sobral ( 1998 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 96-4770
ANTONIO ALVAREZ SOBRAL, JR.,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
James C. Cacheris, Senior District Judge.
(CR-96-89-A)
Argued: April 10, 1998
Decided: May 29, 1998
Before LUTTIG and WILLIAMS, Circuit Judges, and
BUTZNER, Senior Circuit Judge.
_________________________________________________________________
Affirmed in part, vacated in part, and remanded by unpublished per
curiam opinion.
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COUNSEL
ARGUED: Brian William Shaughnessy, SHAUGHNESSY,
BOROWSKI & GAGNER, Washington, D.C., for Appellant. Daniel
Locke Bell, II, Assistant United States Attorney, OFFICE OF THE
UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.
ON BRIEF: Helen F. Fahey, United States Attorney, OFFICE OF
THE UNITED STATES ATTORNEY, Alexandria, Virginia, for
Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
A jury convicted Antonio Sobral of four counts of mail fraud, see
18 U.S.C.A. § 1341 (West Supp. 1998); and one count of engaging
in a monetary transaction in criminally derived property, see 18
U.S.C.A. § 1957 (West Supp. 1998). As a result of these convictions,
Sobral was sentenced to 44 months imprisonment. Sobral appeals
both his convictions and his sentence. We affirm the convictions but
vacate the sentence and remand for resentencing.
I.
Between 1987 and 1993, Sobral, a licensed securities broker and
lawyer, received more than $300,000 from eight individuals. In 1993,
several of the individuals complained to the Virginia State Corpora-
tion Commission (VSCC) that they had been swindled by Sobral. At
the same time, an unrelated criminal investigation into Sobral's finan-
cial dealings was launched by the Prince William County Police
Department.
On June 16, 1994, Sobral pleaded guilty in Prince William Circuit
Court to "wrongfully and fraudulently, with the intent to permanently
deprive, use, embezzle, dispose of or conceal money or property . . .
belonging to Joseph Lyon, Jr., which money or property he had by
virtue of his office, trust, or employment." (J.A. at 24.) Four days
later, Sobral entered into a settlement with the VSCC in which he
admitted that he had knowingly defrauded five of his clients. In par-
ticular, Sobral stipulated that he had "misrepresent[ed] that funds pro-
vided by [victims] would be used for investment purposes." (J.A. at
188.) As a part of the settlement, Sobral agreed to make restitution to
the five victims of more than $314,000. In the fall of 1995, Sobral
stopped making the required payments.
2
On March 14, 1996, a federal grand jury returned a six-count
indictment against Sobral. The indictment alleged four counts of mail
fraud, see 18 U.S.C.A. § 1341 (West Supp. 1998); one count of inter-
state transportation of money taken by fraud, see 18 U.S.C.A. § 2314(West Supp. 198); and one count of engaging in a monetary transac-
tion in criminally derived property (money-laundering), see 18
U.S.C.A. § 1957 (West Supp. 1998).1
Prior to trial, Sobral moved to dismiss the indictment on the
grounds that it violated the Department of Justice's dual prosecution
policy and his Fifth Amendment right to Due Process. On May 3,
1996, the district court denied Sobral's motion. On May 21, 1996,
Sobral issued subpoenas duces tecum to Bing Wu, Sheue Su, George
Tsui, Eddie Tsui, and the Peking Gourmet, requesting certain finan-
cial records. The witnesses/victims filed motions to quash or modify
the subpoenas, which the Government joined. At a hearing on the
motions to quash, the Government argued that the subpoenas were
overly broad, unreasonable, unjustified, and oppressive. The district
court agreed and quashed the subpoenas.
On June 10, 1996, Sobral's trial began. At trial, it was undisputed
that Sobral used the money he received for personal purposes. Sobral
contended, however, that the individuals in question loaned him the
money. As a result, he argued that he could spend the money as he
saw fit. In contrast, the Government introduced evidence that the
funds provided to Sobral were not loans but investments that Sobral
had a fiduciary duty to invest in fixed securities. At the close of evi-
dence, Sobral moved pursuant to Rule 29 of the Federal Rules of
Criminal Procedure for judgment of acquittal, which the district court
denied. On June 14, 1996, Sobral was convicted by a jury on all four
counts of mail fraud and the one count of money-laundering. The jury
acquitted Sobral on the count charging interstate transportation of
money taken by fraud. The district court sentenced Sobral to 44
months imprisonment.
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1 The district court dismissed the single money-laundering count
because it was improperly pleaded. On May 9, 1996, the grand jury
returned a superseding indictment that corrected the defect in the money-
laundering count.
3
On appeal, Sobral contends that the district court erroneously
(1) quashed the subpoenas duces tecum, (2) denied his Rule 29
motion for judgment of acquittal, (3) failed to dismiss the indictment,
and (4) applied the Sentencing Guidelines. We address Sobral's argu-
ments in turn.
II.
First, Sobral contends that the district court erred in quashing the
subpoenas duces tecum that he served on certain Government wit-
nesses. Rule 17(c) of the Federal Rules of Criminal Procedure gov-
erns the issuance of subpoenas duces tecum in federal criminal
proceedings. In so doing, Rule 17(c) "implements the Sixth Amend-
ment guarantee that an accused have compulsory process to secure
evidence in his favor." In re Martin Marietta Corp., 856 F.2d 619,
621 (4th Cir. 1988). Rule 17(c) provides, in pertinent part: "The [dis-
trict] court on motion made promptly may quash or modify the sub-
poena if compliance would be unreasonable or oppressive." Fed. R.
Crim. P. 17(c). The Supreme Court has determined that to be reason-
able,
the moving party must show: (1) that the documents are
evidentiary and relevant; (2) that they are not otherwise
procurable reasonably in advance of trial by exercise of due
diligence; (3) that the party cannot properly prepare for trial
without such production . . . ; and (4) that the application
is made in good faith and is not intended as a general "fish-
ing expedition."
United States v. Nixon, 418 U.S. 683, 699-700 (1974) (footnote omit-
ted). For the reasons that follow, we conclude that Sobral has simply
failed to satisfy the standards established in Nixon.
First, Sobral has not adequately explained the relevancy of the
requested records. The subpoenas made sweeping requests for bank,
credit, tax, and other financial records. According to Sobral, he sought
these records to expose (1) the relationship of the alleged victims and
(2) the source of the funds allegedly invested with him by Tsui.
Without a more specific proffer, we fail to see the relevancy of the
requested records to any of the Six Counts in the indictment.
4
Second, Sobral had already received all of the information on the
victims in the Government's possession. In addition, Sobral's counsel
admitted during the hearing on the motions to quash that he did not
need all of the subpoenaed records. Even more telling, Sobral's coun-
sel conceded that, with the exception of Tsui, he did not know what
the records would reveal. As such, the subpoenas amounted to noth-
ing more than a fishing expedition. As to Tsui, the district court per-
mitted Sobral the defense to subpoena his tax records. For reasons
that are not entirely clear, however, Sobral failed to do so.
III.
Next, Sobral contends that there was insufficient evidence for the
jury to find that he committed mail fraud. Instead, Sobral argues that
the evidence established that the financial transactions in question
were loans and, as a result, he could use the money as he saw fit.
When assessing the sufficiency of the evidence of a criminal convic-
tion on direct review, "[t]he verdict of a jury must be sustained if
there is substantial evidence, taking the view most favorable to the
Government, to support it." Glasser v. United States, 315 U.S. 60, 80
(1942). We believe, for the reasons that follow, that there was suffi-
cient evidence supporting the jury's verdict.
First, the Government introduced Sobral's admission (made during
his settlement of the civil case) that he had made false representations
to investors.2 Second, the Government introduced Sobral's guilty plea
to embezzling funds from one of the victims.3 Third, six of Sobral's
_________________________________________________________________
2 On June 20, 1994, Sobral entered into a settlement with the VSCC in
which he admitted that he had knowingly defrauded five of his clients.
In particular, Sobral stipulated that he had "misrepresent[ed] that funds
provided by [victims] would be used for investment purposes." (J.A. at
188.) As a part of the settlement, Sobral agreed to make restitution to the
five victims of more than $314,000, but he stopped making the required
payments in the fall of 1995.
3 On June 16, 1994, Sobral pleaded guilty in Prince William Circuit
Court to "wrongfully and fraudulently, with the intent to permanently
deprive, use, embezzle, dispose of or conceal money or property . . .
belonging to Joseph Lyon, Jr., which money or property he had by virtue
of his office, trust, or employment." (J.A. at 24, 28.) Although Sobral's
plea did not involve any of the other victims of his scheme, he "admitted
to essentially doing what he is charged with here." (J.A. at 175.)
5
victims testified that Sobral presented himself as an expert in financial
affairs and solicited them for money to invest, not borrow.4 Fourth,
Sobral regularly mailed each victim a letter on his corporate letter-
head updating them on the status of their "trust accounts."5 Given the
overwhelming evidence of guilt, including Sobral's guilty plea to sim-
ilar charges in state court and his stipulation in the civil proceeding,
the district court properly denied Sobral's Rule 29 motion for judg-
ment of acquittal.
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4 The following testimony of Kathy Wu is consistent with the other vic-
tims who testified:
Q. You used the word investment. Who used the word at that
meeting?
A. Antonio Sobral.
Q. And how much money did your parents decide to invest at
that meeting?
A. [$]22,000, around $22,000.
Q. Now, what did Mr. Sobral say about how he would invest
that money?
A. He didn't say. He said don't worry about what kind of
investment because he is a professional, he knew how to do
investment, but he guaranteed 18 percent interest rate.
Q. Now, did he make any mention at all of using that money
to pay his own debts or to use it for his own personal purposes?
A. Never.
Q. Was the word "loan" or the idea of a loan ever mentioned
at that meeting?
A. Never.
(S.A. at 187.)
5 For example, Sobral sent Mrs. Su a letter stating, in part, that he had
deposited her $50,000 in a "trust account." In reality, Sobral deposited
the $50,000 into his personal bank account. Sobral used the $50,000 to
cover a $46,000 personal check that he wrote to his brother in California
to repay a personal loan.
6
IV.
Sobral also contends that the three year delay in bringing the
indictment violated his Fifth Amendment right to Due Process and the
Government's own policy against dual prosecutions. 6 As a result,
Sobral argues that the district court erred in failing to dismiss the
indictment. For the reasons that follow, we disagree.
A.
"[A] defendant may invoke due process to challenge delay both
before and after official accusation." See Doggett v. United States,
505 U.S. 647, 655 n.2 (1992). "[I]n order to establish a due process
violation, the defendant must show that the delay`caused him actual
prejudice in presenting his defense.'" Jones v. Angelone, 94 F.3d 900,
906 (4th Cir. 1996) (quoting United States v. Gouveia, 467 U.S. 180,
192 (1984)). Here, the district court found that Sobral's right to due
process had not been violated because his defense was not impaired
by the delay. We agree.
On appeal, Sobral has not identified any witness that was unavail-
able as a result of the delay. Nor has he alleged that any witness was
unable accurately to recall the events in question. Although Sobral
contends that certain documents were unavailable because of the
delay, he does not say what those records consisted of or how they
would have assisted the defense. Because Sobral does not contend
that any exculpatory evidence was lost, we cannot say that the district
court was clearly erroneous in finding that his defense was not
impaired by the delay. See United States v. Burns, 990 F.2d 1426,
1435 (4th Cir. 1993).
B.
Sobral's claim that the federal indictment violates the Justice
Department's policy against dual prosecutions is also without merit.
That internal policy states as follows:
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6 Sobral does not contend that the delay violated his Sixth Amendment
right to a speedy trial.
7
The Department of Justice's dual prosecution policy pre-
cludes the initiation or continuation of a federal prosecution
following a state prosecution based on substantially the
same act or acts unless there is a compelling federal interest
supporting the dual prosecution. The policy is intended to
regulate prosecutorial discretion in order to promote effi-
cient utilization of the Department's resources and to protect
persons charged with criminal conduct from the unfairness
associated with multiple prosecutions and multiple punish-
ments for substantially the same act or acts.
United States Attorney's Manual, § 9-2, 142 (1990). It is well estab-
lished that the policy is not constitutionally mandated. See, e.g.,
Rinaldi v. United States, 434 U.S. 22, 29 (1977); United States v.
Booth, 673 F.2d 27, 30 (1st Cir. 1982). Moreover, the policy does not
confer any substantive rights on a criminal defendant. See, e.g.,
United States v. Simpkins, 953 F.2d 443, 444-45 (8th Cir. 1992);
United States v. Rodriguez, 948 F.2d 914, 915 (5th Cir. 1991); United
States v. Pungitore, 910 F.2d 1084, 1120 (3d Cir. 1990); United
States v. Heidecke, 900 F.2d 1155, 1157 n.2 (7th Cir. 1990). Thus, the
"dual prosecution" policy simply cannot be invoked by a criminal
defendant to bar prosecution. See, e.g., United States v. McCoy, 977
F.2d 706, 712 (1st Cir. 1992).
V.
Finally, Sobral appeals his sentence. Specifically, Sobral contends
that the district court (1) miscalculated the funds he laundered under
§ 2S1.1, (2) erred in concluding that he obstructed justice under
§ 3C1.1, (3) erred in finding that he held a position of trust under
§ 3B1.3, and (4) miscalculated the loss to the victims under § 2F1.1.
To give due deference to a district court's application of the Sentenc-
ing Guidelines, we review factual determinations for clear error and
legal questions de novo. See United States v. Blake, 81 F.3d 498, 503
(4th Cir. 1996). Moreover, at sentencing, a district court need support
its findings of fact only by a preponderance of the evidence. See
United States v. Morgan, 942 F.2d 243, 246 (4th Cir. 1991).
A.
Initially, Sobral contends that the district court erroneously calcu-
lated the value of the funds he laundered, which, in turn, resulted in
8
an unwarranted increase in his offense level. Sobral was convicted of
violating 18 U.S.C.A. § 1957 (monetary transaction in criminally
deprived property). The Sentencing Guidelines provide a base offense
level of 17 for this offense. See U.S. Sentencing Guidelines Manual
§ 2S1.2(a) (1995). However, if the value of the laundered funds
exceeds $100,000, the Sentencing Guidelines incrementally increase
the base offense level according to the amount of money laundered.
See U.S.S.G. § 2S1.1(b)(2)(A)-(N). Finding that Sobral was responsi-
ble for laundering more than $100,000, the district court increased his
base offense level by one point. See U.S.S.G. § 2S1.1(b)(2)(A).
On appeal, Sobral contends that the district court erred by includ-
ing financial transactions under $10,000 when it calculated the
amount of money laundered.7 Specifically, Sobral points out that
transactions under $10,000 do not violate 18 U.S.C.A. § 1957. As a
result, Sobral argues that amounts under $10,000 should not have
been included when the district court determined the value of the
funds laundered.
This issue turns on the meaning of the phrase "the value of the
funds." U.S.S.G. § 2S1.1(b)(2). In context, we believe that "funds"
refers to "laundered funds." As a result, only the value of the laun-
dered funds should have been counted. The Government argues that
the district court properly concluded that the funds associated with
uncharged instances of money laundering were relevant conduct
under § 1B1.3. We agree that uncharged instances of money launder-
ing would constitute relevant conduct. See, e.g. , United States v.
Johnson, 971 F.2d 562, 575-76 & n.10 (10th Cir. 1992) (so holding).
The problem here, however, is that the transactions in question did
not constitute money laundering -- perhaps explaining why they were
uncharged. Accordingly, the district court erred in increasing the
offense level by one point.
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7 There were only three transactions greater than $10,000. Combined,
these three transactions total $94,107.62. Thus, if the additional transac-
tions are not included, the one level increase was erroneous. See
U.S.S.G. § 2S1.1(b)(2)(A) (no increase for transaction under $100,000).
9
B.
Next, Sobral contends that there was insufficient evidence that he
obstructed justice. We disagree. Section 3C1.1 provides for a two-
level adjustment if the defendant "willfully obstructed or impeded . . .
the administration of justice during the investigation, prosecution, or
sentencing of the instant offense." U.S.S.G.§ 3C1.1. In United States
v. Dunnigan, 507 U.S. 87 (1993), the Supreme Court held that an
adjustment under § 3C1.1 is mandatory where the defendant commits
perjury at trial. Here, the district court found that Sobral perjured him-
self at trial on six separate matters.8
A defendant commits perjury by giving testimony concerning a
material matter with the willful intent to provide false testimony. See
United States v. Castner, 50 F.3d 1267, 1279 (4th Cir. 1995). The dis-
trict court's findings during sentencing support its determination that
Sobral perjured himself at trial. The testimony of several witnesses
(and other evidence) contradicted Sobral's version of facts upon
which he could not have been simply confused or mistaken. For
example, Sobral testified that he had already paid about $150,000 in
restitution to the victims. In contrast, Alex Laufer, the escrow agent
for the restitution payments, testified that Sobral had made restitution
payments of only $57,953. Similarly, Sobral testified at trial that his
transactions with all of the victims were loans. In contrast, Sobral
stipulated before the VSCC that each one of the named victims was
an "investor" to whom he sold "investment contracts." (J.A. at 36.)
Sobral explains the latter inconsistency by stating that he knew the
stipulation was untrue when he signed it. Based upon the foregoing,
we conclude that the district court was not clearly erroneous in find-
ing, by a preponderance of the evidence, that Sobral perjured himself
at trial. Accordingly, the district court did not err by increasing
Sobral's offense level by an additional two points.
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8 The six instances include: (1) his testimony concerning his state court
guilty plea to defrauding Mr. Lyon; (2) his testimony concerning his
stipulation in the civil case; (3) his testimony concerning whether he
intended to defraud the victims; (4) his testimony denying his traveling
to Maryland to get Ms. Su to endorse her life insurance proceeds; (5) his
testimony concerning his employment at the Derand brokerage; and
(6) his testimony concerning the amount of restitution that he had paid
to the victims.
10
C.
Sobral argues that there was insufficient evidence that he held a
position of trust. Again, we disagree. Section 3B1.3 provides that "[i]f
the defendant abused a position of public or private trust . . . in a
manner that significantly facilitated the commission or concealment
of the offense," his offense level should be enhanced by two levels.
U.S.S.G. § 3B1.3 (emphasis added). The Official Commentary to that
provision states that the phrase "position of public or private trust,"
refers to positions "characterized by professional or managerial dis-
cretion (i.e., substantial discretionary judgment that is ordinarily
given considerable deference)." U.S.S.G. § 3B1.3, comment. (n.1).
The Official Commentary also states that "[p]ersons holding such
positions ordinarily are subject to significantly less supervision than
[other] employees," and that, for the provision to apply, the position
must have significantly aided the offender, such as"by making the
detection of the offense . . . more difficult." Id. Whether a person
holds a position of trust must be determined from the perspective of
the victim. See United States v. Moore, 29 F.3d 175, 180 (4th Cir.
1994).
In light of the Official Commentary, the Tenth Circuit in United
States v. Williams, 966 F.2d 555 (10th Cir. 1992), set forth the follow-
ing factors for determining whether a particular position constituted
a position of trust:
[T]he extent to which the position provides the freedom to
commit a difficult-to-detect wrong, and whether an abuse
could be simply or readily noticed; defendant's duties as
compared to those of other employees; defendant's level of
specialized knowledge; defendant's level of authority in the
position; and the level of public trust.
Id. at 557; see also United States v. Pascucci, 943 F.2d 1032, 1037
(9th Cir. 1991) (noting that "[t]he primary trait that distinguishes a
person in a position of trust is the extent to which the position pro-
vides the freedom to commit a difficult-to-detect wrong" (internal
quotation marks omitted)). Based upon these factors, we readily con-
clude that Sobral's position as a broker constituted a position of trust.
As the Tenth Circuit found in a similar case:
11
There is no question that, had the defendant actually been an
investment advisor/broker as he represented to his victims,
he would have occupied a position of trust . . . . An invest-
ment advisor/broker is typically an individual who is
entrusted with the discretionary authority to manage the
assets of his or her clients through the application of special-
ized knowledge. Such a person is well positioned to commit
a difficult-to-detect wrong. This is especially true where the
investment advisor/broker is his own employer, as[the
defendant] was in the instant case, and is therefore subject
to no internal supervision or authority.
United States v. Queen, 4 F.3d 925, 929 (10th Cir. 1993). As such,
the district court did not err by increasing Sobral's offense level pur-
suant to § 3B1.3.
D.
Finally, Sobral argues that the district court's calculation of the
financial loss was erroneous.9 In particular, Sobral contends that the
"loss" to the victims should not include the money he has since
repaid. Once again, we disagree. The Official Commentary to § 2F1.1
states that "if [the] intended loss that the defendant was attempting to
inflict can be determined, this figure will be used if it is greater than
the actual loss." U.S.S.G. § 2F1.1 comment. (n.7). Since Sobral made
the repayments only after his fraud had been reported to the authori-
ties, those repayments had nothing to do with the amount of loss that
he intended to inflict. Thus, the money Sobral has since repaid was
correctly included in the loss calculation.
VI.
For the foregoing reasons, we affirm Sobral's convictions but
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9 The district court calculated the "total intended loss" to the victims as
$277,653.78. The district court arrived at this number by adding
$237,653.78 (the amount stipulated to by Sobral in the civil settlement)
to $40,200 (the additional amount fraudulently obtained from the Lyons).
12
vacate the sentence and remand for resentencing.
AFFIRMED IN PART, VACATED IN PART, AND REMANDED
13