United States v. Michael Hickson , 506 F. App'x 227 ( 2013 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-4701
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
MICHAEL ANTHONY HICKSON,
Defendant – Appellant.
No. 11-4708
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
ALVITA KAREN GUNN,
Defendant - Appellant.
No. 11-4711
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
ISAAC JEROME SMITH,
Defendant – Appellant.
Appeals from the United States District Court for the District
of Maryland, at Greenbelt. Roger W. Titus, District Judge.
(8:09-cr-00213-RWT-2; 8:09-cr-00213-RWT-4; 8:09-cr-00213-RWT-3)
Argued: December 6, 2012 Decided: January 24, 2013
Before SHEDD, DIAZ, and THACKER, Circuit Judges.
Affirmed by unpublished opinion. Judge Shedd wrote the opinion,
in which Judge Diaz and Judge Thacker joined.
ARGUED: Andrew Robert Szekely, LAW OFFICES OF ANDREW R. SZEKELY,
LLC, Greenbelt, Maryland; Matthew McGavock Robinson, ROBINSON &
BRANDT, PSC, Covington, Kentucky, for Appellants. Adam Kenneth
Ake, OFFICE OF THE UNITED STATES ATTORNEY, Greenbelt, Maryland,
for Appellee. ON BRIEF: Michael Lawlor, LAWLOR & ENGLERT, LLC,
Greenbelt, Maryland, for Appellant Isaac Jerome Smith; Elita C.
Amato, Arlington, Virginia, for Appellant Alvita Karen Gunn.
Rod J. Rosenstein, United States Attorney, Baltimore, Maryland,
for Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
SHEDD, Circuit Judge:
A jury convicted Michael Hickson, Isaac Smith, and Alvita
Gunn of money laundering, conspiracy to commit wire fraud, and
multiple counts of wire fraud based on their participation in a
massive Ponzi scheme. On appeal, Hickson, Smith, and Gunn
challenge the district court’s decisions to give the jury a
willful-blindness instruction, admit an email from an
unavailable declarant into evidence, and deny their motion for
recusal. Individually, Hickson challenges the district court’s
decision to deny his motion to continue the trial to obtain
substitute counsel, while Smith and Gunn challenge the court’s
refusal to sever their trial from Hickson’s trial. For the
following reasons, we reject these contentions and affirm.
I.
A.
This case arises out of a massive Ponzi scheme that
originated in the Washington, D.C., metropolitan area. Metro
Dream Homes (“MDH”) 1 promised investors that it would pay off
their mortgages in five to seven years if the investors would
1
The scheme involved related companies as well, including
POS Dream Homes and Metropolitan Grapevine LLC. We refer to all
of the companies as MDH for simplicity.
3
enroll their home for a one-time investment of $50,000. 2 MDH
told investors that it invested in automated teller machines,
point-of-sale vending machines (selling items such as calling
cards), and electronic billboards (essentially flat-screen
televisions that displayed advertisements) to generate revenue
to pay the investors’ mortgages. Eventually, the scheme grew
from giving small talks to local investors to making
presentations to more than 500 people in luxury hotels in New
York and Los Angeles.
Hickson, Smith, and Gunn all worked for MDH. Hickson
served as the chief financial officer from December 2006, Smith
as the president from mid-2006 until summer 2007, and Gunn as
the chief financial officer and then as a senior vice president
after Hickson’s arrival. All three worked under Andrew
Williams, the chief executive officer who was also charged for
his role in MDH. 3
In reality, MDH generated virtually no revenue from its
investments and was instead dependent on new investors to pay
the amounts due to previous investors. In August 2007, the
2
Additional homes could also be enrolled, each for an
additional $50,000. The more homes an investor enrolled, the
more benefits (such as sitting on the Junior Board of Directors)
an investor would receive.
3
The case against Williams was severed from the cases
against Hickson, Smith, and Gunn.
4
Washington Post ran a story about MDH that raised questions
about the validity of MDH’s business model. Later that same
month, Maryland officials began investigating the company and
ultimately issued a cease-and-desist order prohibiting the
enrollment of new investors. MDH went to federal court to
enjoin the state from enforcing this order, but the district
court refused to do so because the court believed MDH may in
fact have been a Ponzi scheme. A Maryland state court
eventually ordered MDH into receivership, which revealed debts
of at least $44 million, liquid assets of less than $500,000,
sixty-six automobiles, and that MDH’s investments were
essentially worthless. An Internal Revenue Service
investigation revealed that the scheme had over 1,000 victims
and that of the $78 million received from investors, $42 million
was paid back to other investors.
B.
Based on their roles with MDH, Hickson, Smith, and Gunn
were all charged with one count of conspiracy to commit wire
fraud, in violation of 18 U.S.C. § 1349; fifteen counts of wire
fraud, in violation of 18 U.S.C. §§ 1343 and 2; and one count of
money laundering, in violation of 18 U.S.C. § 1956(h).
5
Additionally, Hickson was charged with making a false
declaration before a court, in violation of 18 U.S.C. § 1623. 4
A week into trial, Hickson told the court that his
relationship with his lawyer, Anthony Martin, was broken and
that he had lost confidence in Martin. Hickson asked the court
to dismiss Martin as his attorney and grant a short continuance
for Hickson to obtain substitute counsel. Hickson explained
that he did not believe Martin adequately understood the
financial complexities of the case and appeared not to know the
witnesses. The district court, outside the presence of the
Government’s lawyers, made further inquiries. Martin denied
being unprepared 5 or unavailable. 6 On multiple occasions,
Hickson raised his objections to having Martin represent him,
and each time the district court noted that Martin was
4
Smith was also charged with bank fraud, in violation of 18
U.S.C. §§ 1344 and 2. This count was severed from the other
counts, and the Government eventually dismissed that count at
sentencing after Smith’s convictions on the other counts.
5
Martin had spent hundreds of hours preparing this case,
examined more than one hundred boxes of documents, and worked
with a forensic accountant in preparing for trial.
6
Hickson notes that Martin was unavailable for over a month
before trial but acknowledges that Martin was involved in a
capital-eligible trial during that time. As for the weekend
preceding Hickson’s attempt to dismiss Martin, Hickson claims
that Martin was unavailable to meet, a position with which
Martin disagreed before the district court, as Martin stated
that he offered to meet with Hickson that Saturday, despite that
day being Martin’s birthday and anniversary.
6
effectively representing Hickson and Hickson needed to work with
Martin. Martin eventually stated that he had never seen this
side of Hickson before and that their relationship appeared to
have broken down. Martin told the court, however, that he would
be willing to continue representing Hickson if that was what the
court wanted him to do. The district court denied Hickson’s
motion for a continuance, noting that no lawyer could adequately
prepare for such a complex trial in just a few days and that the
trial would not be postponed for a new lawyer to prepare.
The next day, Hickson sought to dismiss Martin and proceed
pro se. The district court engaged in a thorough colloquy with
Hickson and ultimately told Hickson that he could either proceed
pro se or with Martin as his attorney. Hickson chose to
represent himself. Martin was appointed as stand-by counsel
with Hickson’s approval.
After Hickson made this decision, Smith moved to sever his
trial from Hickson’s. He repeatedly renewed this motion later
in the trial, joined once by Gunn, and Smith also moved for a
mistrial, based on Hickson’s performance. The district court
denied the motion, observing that Hickson’s allegedly deficient
performance was no worse than some lawyers who appeared in court
and that Hickson had “not done anything terribly extraordinary
that . . . would rise up to the level that would mandate a
mistrial or severance.” J.A. 1669.
7
During trial, Hickson testified in his own defense, the
only one of the three defendants to do so. Hickson stated that
he warned Williams and others, including Smith and Gunn, of the
problems at MDH but that no one heeded his warnings. Along with
this testimony, he also introduced presentations he had prepared
in November 2006 and July 2007 about the situation at MDH.
The jury convicted Hickson, Smith, and Gunn of conspiracy
to commit wire fraud, wire fraud, and money laundering, and
Hickson of making a false declaration before a court. All three
defendants moved for new trials: Hickson on the basis of not
being granted a continuance to obtain new counsel and Smith and
Gunn on the basis of not having their trials severed from
Hickson’s. The district court denied these motions, and it
sentenced each defendant to a term of imprisonment: Hickson to
120 months, Smith to 70 months, and Gunn to 60 months. All
three defendants timely appealed.
II.
On appeal, Hickson, Smith, and Gunn first challenge the
district court’s decision to give the jury a willful blindness
instruction, arguing that the instruction was not supported by
any evidence that they deliberately ignored information that MDH
was a fraud. We disagree.
8
We review a district court’s decision to give a willful
blindness instruction and the content of that instruction for
abuse of discretion. United States v. Jinwright, 683 F.3d 471,
478 (4th Cir. 2012). The Government can prove the knowledge
element of a crime by showing that the defendant either had
actual knowledge or was willfully blind to facts he should have
known. See United States v. Abbas, 74 F.3d 506, 513 (4th Cir.
1996). “A willful blindness instruction is appropriate when the
defendant asserts a lack of guilty knowledge but the evidence
supports an inference of deliberate ignorance.” Id. (quoting
United States v. Gruenberg, 989 F.2d 971, 974 (8th Cir. 1993)).
For a district court to give this instruction, “all that is
necessary is evidence from which the jury could infer deliberate
avoidance of knowledge.” United States v. Whittington, 26 F.3d
456, 463 (4th Cir. 1994).
Here, the Government offered ample evidence from which the
jury could infer that Hickson, Smith, and Gunn “deliberately
avoided learning of the scheme” that MDH was running. See
United States v. Mancuso, 42 F.3d 836, 846 (4th Cir. 1994). For
example, the Government introduced an email from Richard
Lipsman, who represented a company that provided payroll
services to MDH, stating that based on the documents he had
reviewed, MDH “can easily be characterized as a fraudulent
scheme.” J.A. 393. Another example is the “Tactical
9
Solution!!!” presentation by Hickson from July 2007 that
highlighted the financial problems at MDH, including the lack of
revenue and massive debt. J.A. 2996—3010. A third example is
the “Metro Dream Home Accounting Overview” that Hickson
presented to Williams and Smith in November 2006. J.A. 3026—32.
This evidence, as well as the testimony of many witnesses,
provided a sufficient basis for a willful blindness instruction.
Accordingly, the district court acted within its discretion when
it gave this instruction to the jury.
III.
Next, Hickson raises two related challenges regarding his
counsel. First, he argues that the district court abused its
discretion by denying his motion for a continuance. Second, he
argues that the district court deprived him of his Sixth
Amendment right to counsel and then abused its discretion by
allowing him to proceed pro se. We disagree with both
arguments.
A.
We review the denial of a motion to continue trial for
abuse of discretion. United States v. Williams, 445 F.3d 724,
739 (4th Cir. 2006). Although the Sixth Amendment guarantees
every criminal defendant right to counsel, it does not guarantee
a defendant court-appointed counsel of his choice. United
10
States v. Gonzalez-Lopez, 548 U.S. 140, 151 (2006). Rather, the
Amendment guarantees that he will have counsel who can provide
assistance for his defense at trial. United States v. Smith,
640 F.3d 580, 588–89 (4th Cir. 2011) (citing Gonzalez-Lopez, 548
U.S. at 153 (Alito, J., dissenting)). In reviewing the denial
of a substitution-of-counsel claim, we focus on three inquiries:
“(1) the timeliness of the motion; (2) the adequacy of the
court’s subsequent inquiry; and (3) whether the attorney/client
conflict was so great that it had resulted in total lack of
communication preventing an adequate defense.” Smith, 640 F.3d
at 588 (internal quotation mark omitted). This third inquiry
focuses not on whether the lawyer and defendant speak at all,
but rather on whether their relationship is so broken “that the
principal purpose of the appointment—the mounting of an adequate
defense incident to a fair trial—has been frustrated.” Id.
When the relationship reaches that point, the defendant is
effectively denied his Sixth Amendment right to counsel and the
district court should grant the motion for substitute counsel.
Id.
Here, the district court did not abuse its discretion in
denying Hickson’s motion. First, Hickson’s motion was untimely.
He tries to cast the motion as timely because he claims that he
raised the issue as soon as he became aware of it. Before the
district court, however, Hickson admitted that for a two-month
11
period before trial he had no contact with Martin. J.A. 844.
Thus, when Hickson waited until a week into trial to make his
motion, it was untimely because he raised his concerns about
Martin long after they first arose. That Hickson offered a
justification for his delay—that is, that Hickson thought Martin
had provided assurance that he would be ready for trial—does not
change the timeliness of the motion, and the district court did
not have to accept this justification for the delay.
Additionally, in considering Hickson’s motion, the district
court was “entitled to take into account the countervailing
public interest in proceeding on schedule.” United States v.
West, 877 F.2d 281, 286 (4th Cir. 1989); see also United States
v. Mullen, 32 F.3d 891, 895–96 (4th Cir. 1994). Given the delay
that granting a continuance would have caused and the fact that
the district court was “skeptical that [Hickson’s motion was
not] anything other than a strategy move” to delay the trial,
J.A. 907, the district court was within its discretion in
considering the motion to be untimely.
Additionally, the district court’s inquiry was adequate.
Hickson argues that the inquiry was inadequate because the
district court appeared to focus on the sufficiency of Martin’s
performance as counsel under the framework of Strickland v.
Washington, 466 U.S. 668 (1984). This argument misses the mark.
Although the district court did comment on the sufficiency of
12
Martin’s performance, 7 the district court’s inquiry ultimately
went to the relationship between Hickson and Martin, as
evidenced by the district court’s questions and comments that
focused on the status of their attorney-client relationship.
See, e.g., J.A. 850, 907–08.
Finally, the relationship between Hickson and Martin was
not so broken as to require the district court to have granted
substitute counsel to preserve Hickson’s Sixth Amendment right
to counsel. Hickson points to his statements and a statement
from Martin that their relationship was severely strained. J.A.
864–65, 906–07. But the relationship was not nearly so
fractured as Hickson claims, as evidenced by the fact that
Hickson wanted Martin to be his stand-by counsel after Hickson
chose to represent himself and the fact that when Martin was out
sick, Hickson wanted to delay the trial until Martin was back
instead of having another stand-by counsel. J.A. 1007, 1955.
These facts belie Hickson’s characterization of the relationship
as so broken that Hickson could not have an adequate defense
through Martin. Thus, this was not a case in which the district
court had “a myopic insistence upon expeditiousness in the face
7
Hickson also fails to admit that much of his argument in
the district court on this issue focused on Martin’s alleged
unpreparedness for trial. That the district court would also
thus focus on Martin’s performance is understandable. See,
e.g., J.A. 857–61.
13
of a justifiable request for delay [that] render[ed] the right
to defend with counsel an empty formality.” See Ungar v.
Sarafite, 376 U.S. 575, 589 (1964). Rather, the district court
was within its discretion to determine that substitute counsel
was not warranted because Hickson’s relationship with Martin was
not so broken as to deny Hickson’s right to counsel. See Smith,
640 F.3d at 588.
B.
Whether a defendant waives his right to counsel is reviewed
de novo. United States v. Singleton, 107 F.3d 1091, 1097 n.3
(4th Cir. 1997). As noted above, the Sixth Amendment guarantees
a criminal defendant the right to counsel. U.S. Const. amend.
VI. A waiver of that right must be knowing and voluntary.
Singleton, 107 F.3d at 1095. “The determination of whether
there has been an intelligent waiver of the right to counsel
must depend, in each case, upon the particular facts and
circumstances surrounding that case, including the background,
experience, and conduct of the accused.” Johnson v. Zerbst, 304
U.S. 458, 464 (1938).
We review a district court’s decision to allow a defendant
to proceed pro se after a trial has started for abuse of
discretion. Singleton, 107 F.3d at 1096. When a defendant
asserts his right to represent himself after a trial has begun,
that right “may be denied, limited, or conditioned.” Id.
14
Here, Hickson’s waiver was voluntary. The district court
undertook a long colloquy with Hickson to inquire whether
Hickson was aware of his rights, was familiar with criminal law
and courtroom procedure, and understood what he was doing. J.A.
1007–11. At the end of this discussion, Hickson stated,
“Nobody’s forced me to [waive my right to counsel], Your Honor.”
J.A. 1011. Under these circumstances, Hickson’s waiver was
voluntary.
Faced with this admission, Hickson frames the issue as a
Hobson’s choice. He argues that because he wanted substitute
counsel after the relationship with Martin allegedly broke down,
and once he was faced with keeping Martin or proceeding with no
counsel, he had no meaningful choice. The problem with this
argument is that the relationship with Martin was not so
irrevocably broken. Thus, Hickson did have a choice, and he
made a voluntary choice to waive his right to counsel and
represent himself. See Johnson, 304 U.S. at 464; United States
v. Gallop, 838 F.2d 105, 109 (4th Cir. 1988) (“Since the trial
judge properly exercised his discretion in finding that the
defendant did not have justifiable reasons for requesting a
further substitution of counsel, [the defendant’s] argument that
his waiver was not voluntary is without merit.”).
Having determined that Hickson’s waiver was voluntary, we
next turn to the district court’s decision to allow Hickson to
15
proceed pro se. The district court engaged in a thorough
colloquy with Hickson about his decision, and only after that
discussion did the district court allow Hickson to represent
himself. The district court therefore acted within its
discretion when it allowed Hickson to proceed pro se. See
Gallop, 838 F.2d at 109 (“[O]nce the trial court has
appropriately determined that a substitution of counsel is not
warranted, the court can insist that the defendant choose
between continuing representation by his existing counsel and
appearing pro se.”).
IV.
Finally, Smith and Gunn argue that the district court
abused its discretion by denying their motions to sever, for a
mistrial, and for a new trial after Hickson began representing
himself because of Hickson’s theory of the case. 8 We disagree.
We review a district court’s decision to deny a motion for
a new trial, to sever, and for a mistrial for abuse of
8
Smith and Gunn also argue that they should not have been
tried with Hickson because of Hickson’s deficient performance
representing himself. This argument fails because being tried
with a pro se codefendant is not prejudicial per se, Person v.
Miller, 854 F.2d 656, 665 (4th Cir. 1988), and our review of the
record leads us to agree with the district judge that Hickson’s
performance was not sufficiently prejudicial to Smith and Gunn
as to deny them their right to a fair trial, see J.A. 3546.
16
discretion. United States v. Chong Lam, 677 F.3d 190, 203 (4th
Cir. 2012) (new trial); United States v. Dinkins, 691 F.3d 358,
367 (4th Cir. 2012) (severance); United States v. Johnson, 587
F.3d 625, 631 (4th Cir. 2009) (mistrial).
“The Supreme Court has indicated that ‘[t]here is a
preference in the federal system for joint trials of defendants
who are indicted together.’” United States v. Najjar, 300 F.3d
466, 473 (4th Cir. 2002) (quoting Zafiro v. United States, 506
U.S. 534, 537 (1993)). This preference exists because “[j]oint
trials are more efficient, and ‘generally serve the interests of
justice by avoiding the . . . inequity of inconsistent
verdicts.’” Dinkins, 691 F.3d at 368 (quoting Richardson v.
Marsh, 481 U.S. 200, 210 (1987)) (omission in original).
Based on this preference, “when an indictment properly has
joined two or more defendants under the provisions of Rule 8(b),
severance pursuant to Rule 14 is rarely granted.” Id. A case
should be severed under Federal Rule of Criminal Procedure 14
only when “there is a serious risk that a joint trial would
compromise a specific trial right of one of the defendants, or
prevent the jury from making a reliable judgment about guilt or
innocence.” Zafiro, 506 U.S. at 539. For a court to sever a
trial, the defendant must “establish that actual prejudice would
result from a joint trial, and not merely that a separate trial
would offer a better chance of acquittal.” United States v.
17
Reavis, 48 F.3d 763, 767 (4th Cir. 1995) (internal citation,
quotation mark, and alteration omitted).
Applying these standards, Hickson’s theory of the case did
not warrant the district court severing the trials or granting a
mistrial or new trial. Generally, “mutually antagonistic
defenses are not necessarily prejudicial. Hostility among
defendants, and even a defendant’s desire to exculpate himself
by inculpating others, do not of themselves qualify as
sufficient grounds to require separate trials.” Dinkins, 691
F.3d at 369 (internal citation omitted). Conflicting defenses
warrant separate trials only when there exists “such a stark
contrast presented by the defenses” that the jury must
necessarily disbelieve one defense if it believes the other.
Najjar, 300 F.3d at 474.
In this case, Hickson’s defense was not so mutually
antagonistic to Smith and Gunn’s defense as to require separate
trials. Hickson argued that he told people, including Smith and
Gunn, that MDH had problems but was repeatedly assured that
everything was fine. 9 Smith and Gunn argued that they relied on
9
On this point, Smith and Gunn focus much of their argument
on the “Tactical Solution!!!” presentation from November 2006,
known as Hickson Exhibit 17 at trial. Their arguments are
unpersuasive. Because they did not object to the admission of
this evidence at trial, see J.A. 2476, we review for plain
error, United States v. Brewer, 1 F.3d 1430, 1434 (4th Cir.
1993). Even assuming error, we refuse to recognize it because
(Continued)
18
Williams’s assertions that MDH was fine. That Hickson had some
evidence of having raised his concerns does not make the
defenses inherently contradictory such that the jury could
believe one defense only if it rejected the other. If the jury
had wanted, it could have believed that Hickson, Smith, and Gunn
all relied on Williams’s statements and that Hickson had at some
point raised concerns that were then alleviated and that if
Smith or Gunn were aware of these concerns, their worries were
likewise alleviated. Thus, these defenses were not inherently
at odds such that Hickson, Gunn, and Smith could not be tried
together. See United States v. Allen, 491 F.3d 178, 190 (4th
Cir. 2007) (“Focusing on the efficacy of the defense, however,
overlooks the salient fact that both Reinhardt and Allen
employed essentially the same defense: that neither were
actually engaged in the charged fraudulent scheme and that
Washington and others were the true wrongdoers.”). The district
court therefore did not abuse its discretion in denying the
motions to sever, for a mistrial, and for a new trial.
had Smith and Gunn objected, Hickson could have testified as to
who was present for this meeting and the topic of conversation
at the meeting, thereby putting before the jury evidence of the
fact that Smith and Gunn had knowledge of the financial
condition of MDH.
19
V.
Based on the foregoing, we affirm the convictions of
Hickson, Smith, and Gunn. 10
AFFIRMED
10
We have examined the remaining issues that Hickson,
Smith, and Gunn raise in their brief and find them to be without
merit.
20