United States v. Johnson ( 2018 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT April 19, 2018
_________________________________
Elisabeth A. Shumaker
Clerk of Court
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 16-4146
(D.C. No. 2:11-CR-00501-DN-PMW-1)
JEREMY DAVID JOHNSON, (D. Utah)
Defendant - Appellant.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before PHILLIPS, McHUGH, and MORITZ, Circuit Judges.
_________________________________
After a jury trial—during which he represented himself—Jeremy Johnson was
convicted of eight counts of making a false statement. See 18 U.S.C. § 1014. In this
direct appeal, Johnson advances numerous challenges to both his convictions and the
resulting 135-month sentence. But Johnson has waived many of these arguments: his
opening brief neither identifies where he raised them below nor attempts to establish
plain error on appeal. Thus, we decline to address these arguments. And we also
decline, based on various other briefing deficiencies, to address several subsidiary
arguments Johnson presents in support of his remaining challenges.
*
This order and judgment isn’t binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. But it may be cited for its
persuasive value. See Fed. R. App. P. 32.1; 10th Cir. R. 32.1.
To the extent that Johnson has adequately briefed any challenges to his
convictions, we reject those arguments on the merits. We do the same with most of
Johnson’s adequately briefed sentencing challenges. But we agree with Johnson that
the district court erred in assessing a two-level enhancement based on its finding that
Johnson received more than $1 million as a result of his offenses. Accordingly,
although we affirm Johnson’s convictions, we reverse his sentence and remand for
resentencing.
Background
Johnson’s convictions and sentence arise from his role as the former President
and sole owner of the now-defunct IWorks, Inc. (IWorks). The facts underlying
Johnson’s crimes are complex, familiar to the parties, and—for the most part—not
particularly relevant to our evaluation of Johnson’s arguments on appeal.
Accordingly, we provide only a brief overview of those facts here and discuss
additional historical and procedural facts below as they pertain to our analysis of the
legal issues before us.1
Part of IWorks’ business plan involved processing credit-card payments for
items that customers purchased online. To process those payments, IWorks needed
what’s known as a “merchant account,” App. vol. 38, 9875—“a type of business bank
account that allows a business to accept and process debit[-] and credit[-]card
transactions,” Aplt. Br. 4 n.1. But in 2008, IWorks’ ability to maintain a merchant
1
We note that Johnson’s opening brief employs the same approach.
2
account was threatened when it was placed on the Member Alert to Control High
Risk (MATCH) list after IWorks incurred more than $3 million in fines arising from
excessive chargebacks.
A chargeback occurs when a buyer who used a credit card to make a purchase
becomes dissatisfied with the selling merchant’s refund or return policy and reverses
payment to that merchant through his or her credit card. Such chargebacks will result
in fines if a merchant incurs more than 100 of them in a single month, or if at least
one percent of the merchant’s sales result in chargebacks. After three months of such
fines, a merchant will typically find itself on the MATCH list. And placement on the
MATCH list will generally result in an inability to acquire a new merchant account,
without which a merchant can’t process credit-card payments.
Thus, Johnson and other members of the IWorks team devised a strategy: they
would set up multiple merchant accounts in names other than Johnson’s. So long as
no single merchant account’s chargebacks exceeded 100 per month or one percent of
sales, no fees would be assessed. And so long as no fees were assessed against any
one merchant account for more than three months, no accounts would end up on the
MATCH list.
In 2009, Wells Fargo Bank (WFB) began processing most of IWorks’ credit-
card transactions. WFB is a merchant-acquiring bank: it holds merchant accounts,
thus enabling merchants to process credit-card transactions. Merchant-acquiring
banks work with Independent Sales Organizations (ISOs), who market credit-card-
3
processing accounts to merchants. Here, the ISO that began opening IWorks’ new
merchant accounts with WFB was an entity called CardFlex.
Eventually, Johnson and his associates completed 281 merchant-account
applications with CardFlex’s assistance. Some of the new merchant accounts ended
up on the MATCH list. When that happened, Johnson and his associates simply
abandoned them and moved processing to different accounts. But those abandoned
accounts continued to accrue chargebacks. As a result, WFB eventually became
suspicious and terminated several accounts after an investigation revealed that those
accounts were all associated with Johnson. In the meantime, though, Johnson
personally received at least $1,125,000 in profits from IWorks.
As a result of this scheme, in 2010, the Federal Trade Commission (FTC)
initiated a civil consumer-fraud complaint against Johnson, IWorks, and various other
individuals and entities in the United States District Court for the District of Nevada. And
in 2011, the government indicted Johnson and several of his associates in the District
of Utah for, among other things, multiple counts of making a false statement for the
purpose of influencing a federally insured bank. See § 1014. After a joint trial at
which Johnson represented himself, the jury found him guilty of making false
statements on eight merchant-account applications. The district court ultimately
sentenced Johnson to 135 months in prison. Johnson appeals.2
2
Although Johnson proceeded pro se below, he is represented by counsel on
appeal.
4
Analysis
I. General Principles of Waiver and Forfeiture
Before turning to the arguments that Johnson presents on appeal, we pause to
discuss some general principles of forfeiture and waiver. As we explain more fully
below, our application of these general principles to Johnson’s specific arguments
leads us to decline to address several of those arguments altogether.
First, “[i]t is the general rule . . . that a federal appellate court does not
consider an issue not passed upon below.” Singleton v. Wulff, 428 U.S. 106, 120
(1976). Thus, when a litigant fails to raise a particular argument below, we typically
treat that argument as forfeited. Richison v. Ernest Grp., Inc., 634 F.3d 1123, 1128
(10th Cir. 2011). And when an appellant raises a forfeited argument or issue for the
first time on appeal, we will reverse only if the appellant can satisfy our rigorous test
for plain error. See United States v. Kearn, 863 F.3d 1299, 1305 (10th Cir. 2017),
petition for cert. filed Dec. 21, 2017 (No. 17-7210); Richison, 634 F.3d at 1130 (“It
would be wasteful, and an invitation for potential abuse, to permit a second trip to the
district court on the basis of any lesser showing.”). Critically, this rule applies not
only when a litigant raises a completely new argument on appeal, but also “when ‘a
litigant changes to a new theory on appeal that falls under the same general category
as an argument presented at trial.’” United States v. Nelson, 868 F.3d 885, 891 & n.4
(10th Cir. 2017) (quoting Lyons v. Jefferson Bank & Tr., 994 F.2d 716, 722 (10th Cir.
1993)).
5
To avoid having us treat its claims as forfeited, an appellant must, in its
opening brief, “cite the precise reference in the record where [each] issue was raised
and ruled on” below. 10th Cir. R. 28.2(C)(2). In the absence of such a citation, we
may assume the appellant failed to raise the issue below—an assumption that will
trigger plain-error review. See Harolds Stores, Inc. v. Dillard Dep’t Stores, Inc., 82
F.3d 1533, 1540 n.3 (10th Cir. 1996) (noting litigants’ obligation to identify in
opening brief where each issue was raised and ruled on below; declining to “sift
through” voluminous record after appellant failed to do so); United States v.
Williamson, 53 F.3d 1500, 1514 n.7 (10th Cir. 1995) (independently reviewing record
to determine whether defendant raised issue below, but warning that “all counsel
should understand the potentially serious consequences that could result from
noncompliance with the applicable rules of appellate procedure”); United States v.
Barber, 39 F.3d 285, 287 (10th Cir. 1994) (assuming that defendant didn’t object to
jury instruction and reviewing instructional challenge for plain error because
defendant “fail[ed] to state in his brief whether he raised an objection to the jury
instruction and where in the record any objection c[ould] be found”).
Moreover, when an appellant fails to affirmatively establish that it preserved a
particular issue by raising it below and also fails to make a plain-error argument on
appeal, we typically treat the issue as waived (rather than merely forfeited) and
decline to review the issue at all—for plain error or otherwise. In that instance, we
have explained, “the failure to argue for plain error and its application on appeal . . .
6
marks the end of the road for” that argument. Kearn, 863 F.3d at 1313 (alteration in
original) (quoting Richison, 634 F.3d at 1131).
Taken together, these general principles doom several of Johnson’s arguments.
As we discuss below, Johnson repeatedly either (1) fails to address whether he raised
certain arguments below or (2) asserts that he raised arguments below but then
provides record citations that don’t support those assertions. Thus, we would
normally treat his arguments as forfeited and review them only for plain error. See
United States v. Ibarra-Diaz, 805 F.3d 908, 916 (10th Cir. 2015); cf. Barber, 39 F.3d
at 287–88. But Johnson also repeatedly fails to argue for plain error. And that failure
“marks the end of the road for” any arguments that Johnson fails to establish he
raised below.3 Kearn, 863 F.3d at 1313 (quoting Richison, 634 F.3d at 1131)).
Moreover, even when Johnson manages to establish that he raised below the
arguments he now presents to us on appeal, he fails to adequately develop several of
3
The parties dispute whether Johnson can rely, for purposes of preservation,
on objections and arguments that his codefendants raised below. Compare, e.g.,
United States v. Irving, 665 F.3d 1184, 1207 (10th Cir. 2011) (“Insofar as evidentiary
issues are concerned, this court has yet to take a position on vicarious objections.”),
with Fortier v. Dona Anna Plaza Partners, 747 F.2d 1324, 1331 (10th Cir. 1984)
(“The objections by the co-defendants were clearly not made on behalf of [appellant],
and [appellant] cannot now use the objections of his co-defendants to cure his own
failure to object.”). We need not resolve this disagreement because its result doesn’t
alter the outcome of this appeal. Instead, we simply assume that Johnson can avoid
plain-error review by sufficiently demonstrating that either he or at least one of his
codefendants raised below each of the arguments that Johnson now advances on
appeal. Thus, when we say Johnson fails to demonstrate that he raised a particular
argument below, we mean he fails to demonstrate that either he or any of his
codefendants did so. Likewise, when we say Johnson advanced certain arguments
below, we mean that either Johnson or at least one of his codefendants advanced
them.
7
those arguments in his opening brief. See Fed. R. App. P. 28(a)(8)(A) (requiring
argument section of appellant’s opening brief to contain “appellant’s contentions and
the reasons for them, with citations to the authorities and parts of the record on which
the appellant relies”). Were Johnson proceeding pro se on appeal, we might be
willing to overlook some of these briefing deficiencies. See Reedy v. Werholtz, 660
F.3d 1270, 1274 (10th Cir. 2011) (“If [p]laintiffs were pro se, we would construe
their pleadings liberally.”). But Johnson is “represented by counsel, and we expect
attorneys appearing before this court to state the issues on appeal expressly and
clearly, with theories adequately identified and supported with proper argument.” Id.
Accordingly, to the extent Johnson fails to adequately brief several of his arguments
on appeal, we decline to address them. See Bronson v. Swensen, 500 F.3d 1099, 1104
(10th Cir. 2007).
II. Challenges to Johnson’s Conviction
A. Sufficiency of the Indictment
Johnson first challenges the sufficiency of the indictment. Specifically, he
complains that the indictment failed to allege he communicated any false statements
to (1) a bank or (2) a third party that subsequently communicated them to a bank.
Johnson maintains that he advanced this argument below. But the only record
citation he provides in his opening brief to support this assertion—App. vol. 67,
18141–53—provides no actual support for it. True, this citation establishes that he
8
challenged the sufficiency of the indictment below.4 But in discussing the sufficiency
of the § 1014 charges in particular, he argued only that the indictment failed to allege
(1) what the defendants “intended to influence [WFB] to do”; (2) “whether the
statements had the tendency to influence any decision by [WFB]”; and (3) “who
made each statement at issue.” Id. at 18146–47. Johnson said nothing about the
indictment’s failure to allege actual communication to a bank. Accordingly, this
citation is insufficient to demonstrate that Johnson raised below the specific argument
he now presents on appeal. See Nelson, 868 F.3d at 891 & n.4.
So too is the citation that Johnson offers in his reply brief. There, he points out
for the first time that he “joined in a motion for bill of particulars.” Rep. Br. 1 n.1.
But this is too little, too late. First, Johnson failed to provide this citation in his
opening brief. See 10th Cir. R. 28.2(C)(2); Harolds Stores, Inc., 82 F.3d at 1540 n.3
(noting litigants’ obligation to identify in opening brief where each issue was raised
and ruled on below); cf. Reedy, 660 F.3d at 1274 (“[A] party waives issues and
arguments raised for the first time in a reply brief.” (quoting M.D. Mark, Inc. v. Kerr-
McGee Corp., 565 F.3d 753, 768 n.7 (10th Cir. 2009))).
Second, the motion Johnson identifies didn’t raise the specific argument he
now advances on appeal. The motion did ask, “In what way were [the alleged
statements] made to a federally insured bank?” Supp. App. vol. 6, 902. But nowhere
4
The citation Johnson provides is to a motion filed by his codefendant, Scott
Leavitt, who was represented by counsel at trial. We assume Johnson can rely on this
motion for issue-preservation purposes. See supra note 3.
9
in the motion did Johnson request dismissal of the indictment or allege that a
statement isn’t “made to” a bank, id., unless it was received by a bank. Instead, the
motion simply asked the magistrate judge to order the government to provide a bill of
particulars. Thus, this naked question—devoid of argument, analysis, or citations to
legal authority—was insufficient to preserve below the specific argument that
Johnson now advances on appeal. See Nelson, 868 F.3d at 891 & n.4.
Accordingly, Johnson forfeited this challenge to the indictment by failing to
raise it below. See Richison, 634 F.3d at 1128. And although Johnson does at least
mention the plain-error test in his opening brief, he does so only in a single-sentence
footnote in which he neither articulates all four of the plain-error test’s requirements
nor makes any meaningful argument that he can satisfy them. See id. (listing steps in
plain-error inquiry). Accordingly, we find Johnson’s challenge to the indictment
waived and decline to consider it. See Kearn, 863 F.3d at 1313; United States v.
Hardman, 297 F.3d 1116, 1131 (10th Cir. 2002) (“Arguments raised in a perfunctory
manner, such as in a footnote, are waived.”).
B. Sufficiency of the Evidence
In a related argument, Johnson next asserts that the government presented
insufficient evidence to support his § 1014 convictions because the government failed
to prove that any of the statements were “communicated to a bank.” Aplt. Br. 9.
Instead, he maintains, the statements “were communicated (if at all) to . . . CardFlex,
and went no further.” Id. at 11.
10
At the outset, we note that Johnson once again fails to assert that he raised this
specific argument in district court. And he makes no plain-error argument on appeal.
Moreover, our independent review of the record indicates that Johnson explicitly
conceded below that the government wasn’t required to prove he or anyone else
actually communicated the false statements to a bank: in his motion for new trial,
Johnson argued that “[b]ecause the statements were” made to CardFlex rather than to
WFB, the government could alternatively obtain a conviction by proving that
Johnson “intended [for] or reasonably should have known” the statements “would be
transmitted to [WFB].” App. vol. 9, 1961.
Thus, Johnson’s “argument on appeal”—i.e., that the government must prove
actual communication to a bank—“is a complete reversal from the position” Johnson
advanced in his motion for new trial—i.e., that in the absence of actual
communication, it’s sufficient to show a defendant merely intended or reasonably
should have known that the statements would reach a bank. United States v. LaHue,
261 F.3d 993, 1013 (10th Cir. 2001). Accordingly, we could treat Johnson’s
sufficiency argument, which turns on his argument that actual communication to a
bank is an essential element of § 1014, as waived and decline to consider it. See id.
(noting that invited-error doctrine precludes review on appeal of argument when that
argument is “directly contradictory” to appellant’s position in district court).
Of course, Johnson didn’t explicitly argue below that communication to a bank
is not an element of § 1014. But “[w]hat he did argue” in his motion for new trial
nevertheless “directly contradicts his argument on appeal.” United States v. Jereb,
11
882 F.3d 1325, 1341 (10th Cir. 2018); cf. id. at 1336–41 (holding that although
defendant didn’t explicitly argue below that assault isn’t an element of every
conviction under 18 U.S.C. § 111(a)(1), he nevertheless invited any error in district
court’s failure to instruct jury on assault as an element by, among other things,
requesting instruction that indicated jury “need not find assault in every case”).
Nevertheless, because the government doesn’t argue that Johnson waived or forfeited
his sufficiency argument, we opt to consider its merits.5 See United States v.
Heckenliable, 446 F.3d 1048, 1049 n.3 (10th Cir. 2006) (“The [g]overnment,
however, does not argue [d]efendant waived his present challenge, and accordingly,
has waived the waiver.”).
We review Johnson’s sufficiency argument de novo, viewing the evidence in
the light most favorable to the government. And “[w]e will reverse only if no rational
trier of fact could have found the essential elements of the crime beyond a reasonable
doubt.” United States v. Dewberry, 790 F.3d 1022, 1028 (10th Cir. 2015) (quoting
United States v. Hale, 762 F.3d 1214, 1222–23 (10th Cir. 2014)). Thus, the first step
in our analysis is to determine the essential elements of Johnson’s crime: violating
§ 1014 by making a false statement.
5
Before we do, we pause to note just how little attention Johnson gives this
argument in his opening brief. There, he devotes a scant two paragraphs to his
discussion of the cases that—according to him—establish that actual communication
to a bank is an element § 1014. Cf. Fed. R. App. P. 28(a)(8)(A); Reedy, 660 F.3d at
1274 (“[W]e expect attorneys appearing before this court to state the issues on appeal
expressly and clearly, with theories adequately identified and supported with proper
argument.”).
12
In relevant part, § 1014 prohibits “mak[ing] any false statement . . . for the
purpose of influencing in any way the action of . . . any institution the accounts of
which are insured by the Federal Deposit Insurance Corporation.” And the Supreme
Court has stated that to convict a defendant under § 1014, the government must
establish only “two propositions: it must demonstrate (1) that the defendant made a
‘false statement or report,’ . . . and (2) that he did so ‘for the purpose of influencing
in any way the action of’” a bank. Williams v. United States, 458 U.S. 279, 284
(1982) (quoting § 1014). But according to Johnson, “the offense . . . is not completed
until the statement is, in fact, communicated to a bank.” Aplt. Br. 9 (emphasis
added). And before a statement can be communicated to a bank, he asserts, the bank
must actually receive that statement.
If § 1014 prohibited “mak[ing] any false statement” to a federally insured bank
“for the purpose of influencing [it] in any way,” we might agree. But § 1014 contains
no such language. And we must “ordinarily resist reading words or elements into a
statute that do not appear on its face.” United States v. Handley, 678 F.3d 1185, 1189
(10th Cir. 2012) (quoting United States v. Sturm, 673 F.3d 1274, 1279 (10th Cir.
2012)). Nevertheless, despite the fact that such language doesn’t “appear on [the]
face” of § 1014, id., Johnson suggests we have long recognized that actual
communication to—i.e., receipt by—a bank is an element of this offense. In support,
Johnson cites United States v. Jordan, 890 F.2d 247, 250 (10th Cir. 1989), and
United States v. Zwego, 657 F.2d 248, 251 (10th Cir. 1981). But neither of these
13
cases indicates that we have read, or should read, an actual-communication
requirement into § 1014.
For instance, the defendant in Jordan delivered a “fictitious copy of his tax
return” to a bank in February 1983—more than five years before his March 8, 1988
indictment for violating § 1014. 890 F.2d at 249. On appeal, he asserted that the five-
year statute of limitations therefore barred his prosecution. We rejected this
argument, noting that while the defendant delivered an initial round of documents to
the bank in February 1983, he later delivered a second round of documents, including
a fictitious tax return, sometime “on or after March 17, 1983.” Id. at 250. And
because the defendant made “[t]his second delivery” fewer than five years before the
government indicted him, we concluded that the statute of limitations didn’t bar the
defendant’s prosecution. Id. At best, therefore, Jordan establishes that actual
communication to a bank is sufficient to satisfy § 1014; it doesn’t indicate that actual
communication is necessary, as Johnson suggests.
Neither does our opinion in Zwego. True, we said there that “[t]he proper
venue for the offense of making false statements to a federally insured bank may be
either where the false statements were prepared, executed, or made, or where the
offense was completed upon receipt of the false information by the bank.” 657 F.2d
at 251 (emphasis added). But the question of § 1014’s essential elements simply
wasn’t before us in Zwego. See Webster v. Fall, 266 U.S. 507, 511 (1925)
(“Questions [that] merely lurk in the record, neither brought to the attention of the
court nor ruled upon, are not to be considered as having been so decided as to
14
constitute precedents.”). Moreover, to the extent we might find Zwego instructive, it
actually undercuts Johnson’s position. At oral argument, Johnson clarified that his
analysis turns on § 1014’s requirement that an individual must “make[]” a false
statement: according to Johnson, a statement is only made once it is received. But in
Zwego, we said that venue lies “where the false statements were . . . made, or . . .
upon receipt of the false information by the bank.” 657 F.2d at 251 (emphasis added).
And by stating these events in the alternative, we necessarily indicated that the
former can occur in the absence of the latter.6
6
We recognize that Johnson’s opposite view finds support in dicta from other
circuits. See, e.g., Reass v. United States, 99 F.2d 752, 755 (4th Cir. 1938)
(“[C]ommunication of the false statements to the corporation constitutes the very
essence of the crime. . . . [I]t is only when [the statements] are communicated to the
lending bank that the crime takes place.”). But so too does the government’s. See,
e.g., United States v. Cavallo, 790 F.3d 1202, 1231 (11th Cir. 2015) (“[T]he
[g]overnment does not have to show that the defendant directly presented the
document containing the false statement to [a bank]. Instead, the [g]overnment need
only prove that the defendant was on ‘notice sufficient to create a reasonable
expectation that the statement would reach [a bank].’” (quoting United States v.
Greene, 862 F.2d 1512, 1517 (11th Cir. 1989))). Because we conclude that the plain
language of § 1014 unambiguously indicates that actual receipt by a bank isn’t an
element of the offense, we see no need to parse such nonbinding statements.
Likewise, we recognize that dicta from our own cases might arguably provide
some support for Johnson’s position. See, e.g., United States v. Copus, 110 F.3d
1529, 1534–35 (10th Cir. 1997) (“Under [§ 1014] . . . , the jury must have found
[defendant] made a false statement to a federally insured bank knowing the statement
was false and intending to influence the bank.” (emphasis added)); United States v.
Grissom, 44 F.3d 1507, 1510 (10th Cir. 1995) (listing “ma[king] a false statement to
a bank” as an element of § 1014 (emphasis added)). But Johnson doesn’t cite these
cases in his opening brief. Nor does he contest in his reply brief the government’s
assertion that these cases demonstrate “actual communication of the false statements
to a bank is not an element of § 1014.” Aplee. Br. 88. Accordingly, Johnson has
waived any reliance on this line of cases, and we therefore decline to address them.
15
In any event, even if we assume that a statement must be received in order to
be made, that doesn’t help Johnson. As discussed above, § 1014 doesn’t proscribe
making a false statement to a bank; it simply proscribes making a false statement.
Thus, even if we accept as true Johnson’s assertion that a statement must be received
in order to be made, his sufficiency argument fails: Johnson doesn’t dispute that
CardFlex received the false statements.
C. Seized and Frozen Funds
Johnson next argues that the district court violated his Sixth Amendment right
to counsel when it denied him access to certain assets seized and frozen by the
government—assets that Johnson insists he could have used to obtain counsel of
choice. Those assets fall into two general categories: (1) assets that were seized from
the home of Johnson’s parents pursuant to a search warrant the government obtained
as part of the criminal case against him (the silver); and (2) assets that were frozen
pursuant to a preliminary injunction that the government obtained in the civil action
the FTC initiated against Johnson. We address each category in turn. But first, we
provide some relevant background information.
In 2010, before the government initiated the criminal case against Johnson, the
FTC filed a civil consumer-fraud complaint against IWorks, Johnson, and various other
individuals and entities in the United States District Court for the District of Nevada (the
Nevada court). The complaint alleged that Johnson and others “deceptively enroll[ed]
unwitting consumers into memberships for products or services and then repeatedly
charge[d] their credit cards or debit[ed] funds from their checking accounts without
16
consumers’ knowledge or authorization.” App. vol. 12, 2704. As a result of this
complaint (the FTC Action), the Nevada court issued a preliminary injunction freezing
Johnson’s assets and appointing a receiver. The following year, the government seized
the silver from the home of Johnson’s parents. The government then provided the silver
to the court-appointed receiver in the FTC Action.
1. The Silver
One month before trial, Johnson filed a motion asking the district court to
release the silver. In that motion, Johnson didn’t invoke the Sixth Amendment. Nor
did he suggest he would use the silver to retain counsel. Instead, Johnson represented
that if the silver was “returned to [him],” he would use it “to pay [for] items and
services to assist in his defense in this case as a pro se defendant.” App. vol. 4, 841
(emphasis added). Specifically, he asserted that he “would put the property towards
legal aids, trial exhibits, and other resources for trial.” Id. The magistrate judge
denied Johnson’s motion.
On appeal, Johnson argues that “[t]he denial of access to these funds was a
clear violation of [his] Sixth Amendment rights.”7 Aplt. Br. 17. But according to the
government, Johnson waived this argument by failing to timely object to the
magistrate judge’s order denying his motion to release the silver. See Fed. R. Crim.
7
We question whether Johnson’s request for money to fund his pro se defense
was sufficient to preserve his argument on appeal that the district court erroneously
deprived him of funds to pay for retained counsel. But we need not resolve this issue;
even assuming that Johnson’s motion sufficiently invoked the Sixth Amendment
right to counsel, we conclude—for the reasons discussed in the text—that he
nevertheless waived this Sixth Amendment argument on other grounds.
17
P. 59(a) (allowing party to “file objections to” magistrate judge’s order “within 14
days”; requiring district court to “consider timely objections and modify or set aside
any part of the order that is contrary to law or clearly erroneous”; and warning that
“[f]ailure to object in accordance with this rule waives a party’s right to review”);
Fed. R. Crim. P. 59(a) advisory committee’s note to 2005 adoption (explaining that
Rule 59(a)’s “waiver provision is intended to establish the requirements for objecting
in a district court in order to preserve appellate review of magistrate judges’
decisions”); United States v. Kelley, 774 F.3d 434, 439 (8th Cir. 2014) (holding that
defendant “waived his right to appeal . . . by failing to file objections with the district
court, as required by [Rule] 59(a)”).
In his reply brief, Johnson advances three responses to the government’s
waiver argument. First, he points out that the magistrate judge didn’t issue a decision
until just days before trial began. And he argues he therefore had “insufficient time to
object” to that decision. Rep. Br. 5. But even assuming Johnson didn’t have time to
object to the magistrate judge’s order before trial started, he doesn’t explain why the
start of trial subsequently rendered him unable to object and thereby preserve the
issue for appeal. And we see no reason it should have. Thus, we reject this argument.
Second, Johnson asserts that Rule 59(a)’s waiver provision doesn’t apply
“when a pro se litigant is not informed of the time for objecting and the consequences
of failing to object.” Rep. Br. 5. But the lone authority he cites to support this
argument predates Rule 59(a)’s 2005 enactment. Compare Moore v. United States,
950 F.2d 656, 659 (10th Cir. 1991) (“We join those circuits that have declined to
18
apply the waiver rule to a pro se litigant’s failure to object when the [magistrate
judge’s] order does not apprise the pro se litigant of the consequences of a failure to
object to findings and recommendations.”), with Kelley, 774 F.3d at 439 n.4
(explaining that Rule 59(a)’s “explicit notice[] of waiver” alleviated court’s previous
“concerns regarding notice” to litigants that failing to object would preclude raising
issue on appeal). More importantly, Johnson doesn’t actually assert that he wasn’t
“informed of the time for objecting and the consequences of failing to object.” Rep.
Br. 5. Thus, we need not resolve whether the exception Moore identifies survives the
enactment of Rule 59(a)’s express waiver provision; even assuming it does, Johnson
fails to demonstrate that he’s entitled to invoke that exception here.
Third, Johnson suggests that we should decline to treat this argument as
waived because “the ‘interests of justice’ require review.” Morales-Fernandez v.
I.N.S., 418 F.3d 1116, 1119 (10th Cir. 2005). But even assuming that Morales-
Fernandez’ interests-of-justice exception survives the enactment of Rule 59(a),8 we
would only review Johnson’s argument for plain error. See id. at 1122 (applying
plain-error test where appellant failed to timely object to magistrate judge’s findings
and recommendations). And because Johnson fails to make a plain-error argument,
the interests-of-justice exception offers him no shelter. Cf. Kearn, 863 F.3d at 1313
(“Generally, ‘the failure to argue for plain error and its application on appeal . . .
8
We decided Morales-Fernandez on August 9, 2005. Rule 59(a) didn’t take
effect until December 1, 2005.
19
marks the end of the road for an argument for reversal not first presented to the
district court.’” (alteration in original) (quoting Richison, 634 F.3d at 1131)).
In short, Johnson (1) failed to timely object to the magistrate judge’s order;
(2) offers no valid explanation for his failure to do so; (3) doesn’t assert that the
magistrate judge neglected to inform him of the time for objecting or the
consequences of failing to object to its order; and (4) doesn’t make a plain-error
argument on appeal. Accordingly, even assuming that the waiver-rule exceptions we
identified in Moore, 950 F.2d at 659, and Morales-Fernandez, 418 F.3d at 1119,
remain viable after Rule 59(a)’s enactment, Johnson fails to demonstrate he can
invoke those exceptions to his benefit here. Thus, we treat as waived and decline to
consider his argument that denying him access to the silver violated his Sixth
Amendment right to counsel.
2. The Frozen Assets
For related reasons, we also decline to consider Johnson’s argument that the
district court violated his Sixth Amendment right to counsel when it denied him
access “to funds frozen in” the FTC Action. Aplt. Br. 17; see also Luis v. United
States, 136 S. Ct. 1083, 1088 (2016) (plurality opinion) (“[T]he pretrial restraint of
legitimate, untainted assets needed to retain counsel of choice violates the Sixth
Amendment.”); id. at 1096 (Thomas, J., concurring in the judgment).9 Here, Johnson
9
The Supreme Court decided Luis five days after Johnson’s jury trial ended.
Because we decline to address this issue for the reasons discussed in the text, we
need not resolve whether Luis—a case involving the seizure of a criminal defendant’s
20
challenges (1) the magistrate judge’s failure to “make any assessment of Johnson’s
[Luis] rights,” Aplt. Br. 20; and (2) the district court’s subsequent rejection of the
Luis argument that Johnson made in his motion for new trial.
In denying Johnson relief, both the magistrate judge and the district court
expressly noted a critical obstacle to Johnson’s request: the civil and criminal actions
pending against Johnson were proceeding in different jurisdictions. Specifically, the
criminal prosecution was proceeding in Utah, while the FTC Action was proceeding
in Nevada. Thus, the magistrate judge declined to hold a hearing on this issue, in part
because it concluded that it had no “authority or jurisdiction to make determinations
about the frozen assets in the [FTC Action].” App. vol. 2, 318. Likewise, the district
court noted that the preliminary injunction arising from the FTC Action gave the
Nevada court, rather than the district court, “exclusive jurisdiction . . . over the
Assets or Documents of the Receivership Defendants.” App. vol. 38, 9917 (alteration
in original) (quoting App. vol. 12, 2847). And as the government points out, Johnson
actually conceded this point below: he initially acknowledged that the district court
lacked authority to modify the Nevada court’s order freezing his assets in the FTC
Action.10
assets under a criminal forfeiture statute, see 136 S. Ct. at 1087–88 (citing 18 U.S.C.
§ 1345(a)(2))—extends to cases where, as here, a criminal defendant’s assets are
frozen as part of an independent civil proceeding.
10
Johnson also implicitly recognized the Nevada court’s jurisdiction over the
frozen assets when, before trial, he petitioned the Nevada court to release the assets
so that he could use them to fund his defense in this criminal case. The Nevada court
denied Johnson’s motion, and it doesn’t appear that Johnson appealed that ruling.
21
Curiously, despite the emphasis that the magistrate judge, the district court,
and the government placed on this critical aspect of the analysis, Johnson fails to
even mention this obvious barrier to relief in his opening brief. In fact, he never
specifically acknowledges this basis for the district court’s rejection of his argument.
Instead, he only vaguely asserts in a footnote that “[b]ecause the criminal prosecution
was taking place in Utah, it was not the Nevada court’s role to affirmatively protect
Johnson’s Sixth Amendment rights.” Aplt. Br. 20 n.8. But Johnson neither cites any
authority nor provides any argument establishing that the district court presiding over
the criminal prosecution in Utah—rather than the district court presiding over the
FTC Action in Nevada—should have or could have (1) conducted a Luis hearing and
(2) ordered, if appropriate, the release of the frozen funds. Thus, Johnson has waived
any argument on this point. See Fed. R. App. P. 28(a)(8)(A) (requiring argument
section of appellant’s brief to contain “appellant’s contentions and the reasons for
them, with citations to the authorities . . . on which the appellant relies”); Hardman,
297 F.3d at 1131 (“Arguments raised in a perfunctory manner, such as in a footnote,
are waived.”).
Indeed, given the district court’s and magistrate judge’s express reliance on
this factor in denying him relief, Johnson had an obligation to argue in his opening
brief either that (1) the district court had authority to order release of the funds;11 or
11
Johnson attempts to address this issue in his reply brief, where he suggests
for the first time that the “Nevada court [didn’t have] exclusive jurisdiction o[ver] the
assets.” Rep. Br. 9. But arguments advanced for the first time in a reply brief are
22
(2) even assuming it lacked such authority, the district court nevertheless had an
obligation to perform some other act to ensure protection of Johnson’s Sixth
Amendment right to counsel. Cf. United States v. Fisher, 805 F.3d 982, 991 (10th
Cir. 2015) (“[T]he ‘first task of an appellant is to explain to us why the district
court’s decision was wrong.” (emphasis added) (quoting Nixon v. City & Cty. of
Denver, 784 F.3d 1364, 1366 (10th Cir. 2015))); Nixon, 784 F.3d at 1366 (explaining
that in order to adequately challenge district court’s ruling, appellant’s opening brief
must address “reasons that were given by the district court” to support that ruling).
And his failure to do so waives any argument to that effect. See Nixon, 784 F.3d at
1369 (refusing to address appellant’s challenge to district court’s ruling because
“opening brief contain[ed] nary a word to challenge the [district court’s] basis” for
that ruling). Accordingly, we decline to address whether the district court erred in
failing to order the release of the funds or in denying Johnson a new trial on that
basis.
waived. See United States v. Beckstead, 500 F.3d 1154, 1163 (10th Cir. 2007).
Moreover, even in his reply brief, Johnson doesn’t establish that he advanced before
the district court or the magistrate judge the jurisdictional arguments he now presents
on appeal. See 10th Cir. R. 28.2(C)(2) (requiring briefs to “cite the precise reference
in the record where the issue was raised and ruled on”); Harolds Stores, Inc., 82 F.3d
at 1540 n.3 (declining to consider appellant’s argument where appellant failed to
provide record citation in opening brief establishing it raised argument below). Nor
does he make a plain-error argument on appeal. Thus, we decline to address the
arguments he does present. See Kearn, 863 F.3d at 1313 (explaining that failure to
make plain-error argument on appeal “marks the end of the road for an argument for
reversal not first presented to the district court’” (quoting Richison, 634 F.3d at
1131)).
23
D. Fifth Amendment Right to be Present
Johnson next argues that the district court violated his Fifth Amendment right
to be present at critical stages of the proceedings. Although Johnson ultimately
decided to represent himself at trial, he initially had appointed counsel. And
according to Johnson, the district court violated his rights under the Fifth
Amendment by failing to ensure his presence at two hearings—one in July 2015 and
one in September 2015—addressing a potential conflict of interest that arose from
appointed counsel’s previous representation of an individual named Justin Lund.12
See United States v. Beierle, 810 F.3d 1193, 1198 (10th Cir. 2016) (“For trial
proceedings other than the presentation of evidence, the Due Process Clause
governs.”). We review this argument de novo. Larson v. Tansy, 911 F.2d 392, 394
(10th Cir. 1990).
12
In part, Johnson asserts that appointed counsel was, in fact, actually
conflicted; according to Johnson, “Lund’s interests were materially adverse to [his] in
several respects.” Aplt. Br. 24. But in alleging an actual conflict, Johnson doesn’t
appear to be making a separate Sixth Amendment argument; instead, it appears his
actual-conflict argument is simply part of his Fifth Amendment right-to-be-present
argument. For instance, he asserts that an actual conflict isn’t “a prerequisite to
showing a constitutional violation.” Aplt. Br. 31. But such a showing would be a
prerequisite if Johnson were attempting to establish a violation of his Sixth
Amendment right to conflict-free counsel, as opposed to a violation of his Fifth
Amendment right to be present.
In any event, even if we assumed that Johnson intended to raise a separate
Sixth Amendment argument, we would find it waived and decline to address it.
Johnson neither cites the applicable legal test for determining whether an actual
conflict exists, nor explains how he satisfies it. See Fed. R. App. P. 28(a)(8)(A)
(requiring argument section of appellant’s brief to contain “appellant’s contentions
and the reasons for them, with citations to the authorities . . . on which the appellant
24
Under the Fifth Amendment, a criminal defendant has a “right to be present at
a proceeding ‘whenever his presence has a relation, reasonably substantial, to the
ful[l]ness of his opportunity to defend against the charge.’” United States v. Gagnon,
470 U.S. 522, 526 (1985) (quoting Snyder v. Massachusetts, 291 U.S. 97, 105–06
(1934)). “That is, ‘[t]he presence of a defendant is a condition of due process to the
extent that a fair and just hearing would be thwarted by his absence, and to that
extent only.’” Beierle, 810 F.3d at 1198 (alteration in original) (quoting Gagnon, 470
U.S. at 526). Thus, “this privilege of presence is not guaranteed ‘when presence
would be useless, or the benefit but a shadow.’” Kentucky v. Stincer, 482 U.S. 730,
745 (1987) (quoting Snyder, 291 U.S. at 106–07).
Here, Johnson cites the Connecticut Supreme Court’s decision in State v.
Lopez, 859 A.2d 898, 902 (Conn. 2004), for the proposition that an “in-chambers
inquiry regarding [a] potential conflict of interest [i]s a critical stage of the
defendant’s prosecution at which the defendant ha[s] a constitutional right to be
present.” But as the government points out, the Lopez court distinguished between
cases where a defendant lacks “a fair opportunity to question the sufficiency of the
[court’s conflict] inquiry or to . . . object[] to [counsel’s] representation of the
defendant’s interests,” id. at 905, and those in which an “in-chambers conference
subsequently is put on the record in open court with the defendant present,” id. at 905
n.13.
relies”); Bronson, 500 F.3d at 1104 (explaining that we routinely decline to address
arguments that fail to comply with these requirements).
25
Here, the magistrate judge conducted just such a hearing. In November 2015,
Johnson filed a motion to proceed pro se in which he cited the potential Lund
conflict. In response, the magistrate judge conducted a hearing on December 3, 2015.
There, in Johnson’s presence, the magistrate judge recounted its previous discussion
with appointed counsel about the potential Lund conflict. And appointed counsel then
detailed “the nature of [her] representation” of Lund. App. vol. 41, 10525. At no
point during this hearing did Johnson suggest he was in possession of additional
information that might change the magistrate judge’s conflict analysis. On the
contrary, Johnson conceded that if he had been present for the earlier discussion
about the Lund conflict, he “probably maybe . . . would have come to the same
conclusion” as the magistrate judge. Id. at 10552–53. Moreover, at this same hearing,
Johnson withdrew his motion to proceed pro se, thereby acquiescing to appointed
counsel’s continuing representation.
Notably, Johnson can’t prevail on this issue unless his absence—even
assuming it gave rise to a Fifth Amendment violation—created a “reasonable
possibility of prejudice.” See Larson, 911 F.2d at 396 (quoting United States v.
Fontanez, 878 F.2d 33, 37 (2d Cir. 1989)) (reviewing error arising from defendant’s
absence during “critical junctures in his trial” for harmlessness). And the only
potential prejudice that Johnson suggests arose from his absence at the conflict
hearings was that he lacked an opportunity to share with the magistrate judge certain
additional information. But Johnson had an opportunity to share that information
with the magistrate judge at the December 3 hearing: there, the magistrate judge
26
encouraged Johnson to “speak freely” and repeatedly asked if Johnson had “anything
else” he wanted to discuss. App. vol. 41, 10529, 10558–59.
Accordingly, even if we assume that Johnson had a Fifth Amendment right to
attend the conflict hearings, any violation of that right was later rendered harmless
beyond a reasonable doubt. Once the magistrate judge conducted the December 3
hearing—a hearing that Johnson attended—no “reasonable possibility of prejudice”
from his absence at the earlier hearings remained. Larson, 911 F.2d at 396 (quoting
Fontanez, 878 F.2d at 37). Thus, we decline to reverse on this basis. And for identical
reasons, we decline to reverse based on Johnson’s assertion that his absence from the
conflict hearings violated Federal Rule of Criminal Procedure 43. See United States
v. Gomez, 67 F.3d 1515, 1528 (10th Cir. 1995) (explaining that constitutional right to
be present “is further protected by” Rule 43); United States v. Oles, 994 F.2d 1519,
1525 (10th Cir. 1993) (resolving constitutional question and Rule 43 question
simultaneously).
In a related argument, Johnson also asserts the district should have conducted
an evidentiary hearing to determine whether the magistrate judge directed appointed
counsel not to tell Johnson about the potential Lund conflict. But again, even
assuming that (1) the district court abused its discretion in refusing to hold such a
hearing and (2) the magistrate judge in fact informed appointed counsel not to tell
Johnson about the potential conflict, Johnson nevertheless learned of the potential
Lund conflict and had an opportunity to address his concerns about it at a hearing.
Accordingly, any potential error in failing to conduct an evidentiary hearing on the
27
magistrate judge’s alleged (and ultimately unsuccessful) attempt to conceal that
potential conflict was also harmless. Cf. Wyoming v. Livingston, 443 F.3d 1211,
1225–26 (10th Cir. 2006).
E. Allegedly Privileged Emails
Next, Johnson asserts that the district court violated his Sixth Amendment
right to counsel by allowing the government to seize allegedly privileged emails.
Johnson suggests by implication that he “preserved” this argument: he cites the
standard of review that would apply if he had. Aplt. Br. 40. But he neither explicitly
asserts that he raised the argument below nor provides a precise citation to the record
establishing as much. And he doesn’t argue for plain error on appeal. That “marks the
end of the road for” this argument.13 Kearn, 863 F.3d at 1313 (quoting Richison, 634
F.3d at 1131).
F. Evidence of the False Statements’ Alleged Immateriality
As discussed above, Johnson was convicted of violating § 1014 by making
false statements for the purpose of influencing a federally insured bank. Johnson next
13
The government advances an alternative reason for treating Johnson’s email
argument as waived: it asserts that (1) Johnson did raise this argument below; (2) the
magistrate judge rejected it; and (3) Johnson waived appellate review by failing to
object to the magistrate judge’s ruling. See Fed. R. Crim. P. 59(a) (explaining that
failure to timely object to magistrate judge’s ruling “waives a party’s right to
review”). Johnson fails to respond to the government’s waiver argument in his reply
brief. Thus, he has “waive[d], as a practical matter anyway,” any non-obvious
reasons for rejecting it. Hardy v. City Optical Inc., 39 F.3d 765, 771 (7th Cir. 1994).
Accordingly, even assuming that Johnson raised his email argument below, we would
nevertheless decline to address it.
28
asserts that we must reverse those convictions because the district court erred in
excluding evidence of the false statements’ alleged immateriality.
Johnson concedes that materiality isn’t an element of § 1014. But he cites
United States v. Phillips, 731 F.3d 649, 652 (7th Cir. 2013), for the proposition that
evidence of immateriality can nevertheless demonstrate that a defendant never
intended for the false statement to influence a bank. See § 1014 (prohibiting making
false statement “for the purpose of influencing” certain institutions). And he then
cites various instances in which the district court refused to admit testimony or
evidence that would have allegedly demonstrated the false statements’ immateriality.
The problem is that Johnson doesn’t assert or establish that he argued to the
district court his theory that the testimony and evidence he sought to admit was
relevant to prove immateriality. Nor does he assert or establish that he cited Phillips,
731 F.3d 649, or otherwise argued that evidence of immateriality was in any way
relevant to prove that he lacked the requisite intent to influence. Thus, Johnson has
once again failed to demonstrate that he advanced below the specific argument he
now raises on appeal. See Nelson, 868 F.3d at 891 & n.4.
In fact, Johnson essentially concedes as much in his reply brief. There, he
suggests he didn’t have to raise this precise argument below because the evidence’s
“relevance to immateriality was evident on its face.” Rep. Br. 20. But we know of no
authority indicating that our plain-error test doesn’t apply to forfeited arguments so
long as those arguments are obvious or “evident,” id., and Johnson cites none. And in
any case, the record citations that Johnson does provide in his opening brief suggest
29
that his materiality argument wasn’t “evident,” id., to the district court: the court
indicated that it thought Johnson was trying to elicit evidence of WFB’s negligence,
not the alleged immateriality of the false statements. Even if we assume this was a
misapprehension, Johnson did nothing to correct it.
Moreover, Johnson makes no plain-error argument in his opening brief. In fact,
Johnson doesn’t even advance a plain-error argument in his reply brief—despite
essentially conceding there that he forfeited this argument below. Cf. United States v.
Courtney, 816 F.3d 681, 684 (10th Cir.) (reviewing for plain error where appellant
“argued plain error fully in his reply brief”), cert. denied, 137 S. Ct. 238 (2016).
Accordingly, we treat Johnson’s immateriality argument as waived and decline to
consider it. See Richison, 634 F.3d at 1131. And we likewise decline to address his
related suggestion that the district court erred in failing to instruct the jury “that it
could consider immateriality in assessing Johnson’s intent.” Aplt. Br. 46. Johnson
neither demonstrates that he objected to the instruction on this specific basis below
nor argues for plain error on appeal. See Richison, 634 F.3d at 1131.
G. Expert-Witness Testimony
Johnson next asserts that the district court erred in excluding the testimony of
his expert witness, Gene Hoffman Jr. We review this argument for abuse of
discretion. See United States v. Avitia-Guillen, 680 F.3d 1253, 1256 (10th Cir. 2012).
“A district court abuses its discretion only if its ruling is ‘arbitrary, capricious,
whimsical[,] or manifestly unreasonable or when we are convinced that the district
court made a clear error of judgment or exceeded the bounds of permissible choice in
30
the circumstances.’” United States v. Garcia, 635 F.3d 472, 476 (10th Cir. 2011)
(quoting Norris v. Baxter Healthcare Corp., 397 F.3d 878, 883 (10th Cir. 2005)).
Nevertheless, despite this deferential standard of review, the Federal Rules of
Evidence have a “liberal thrust,” Daubert v. Merrell Dow. Pharms., Inc., 509 U.S.
579, 588 (1993) (quoting Beech Aircraft Corp. v. Rainey, 488 U.S. 153, 169 (1988)),
and there is a “strong and undeniable preference for admitting any evidence having
some potential for assisting the trier of fact,” United States v. Valasquez, 64 F.3d
844, 849 (3d Cir. 1995) (quoting DeLuca ex rel. DeLuca v. Merrell Dow Pharm.,
Inc., 911 F.2d 941, 956 (3d Cir. 1990)).
Here, the district court excluded Hoffman’s testimony after determining that
he lacked the requisite “knowledge, skill, experience[,] or training.” App. vol. 65,
17544; see also Fed. R. Evid. 702. The district court based that ruling on several
factual findings, e.g., that Hoffman had only “infrequent[]” experience with “the
underwriting and application processes,” App. vol. 65, 17543–44; that his
“involvement with the card payment system” was “relatively intermittent,” id. at
17544; that his “experience” with “the relationships of acquiring banks, ISOs, and
third-party processors and merchants” was “intermittent and limited,” id. at 17545–
46; and that he lacked “familiarity with the industry standards in the disclosure area,”
id. at 17546.
Johnson acknowledges some of these factual findings in his opening brief. But
he makes no attempt to establish they are clearly erroneous. See Cartier v. Jackson,
59 F.3d 1046, 1048 (10th Cir. 1995). Nor does he directly engage with the district
31
court’s conclusion that Hoffman was unqualified. True, he recites Hoffman’s
background and experience. And he lists the testimony Hoffman would have offered.
But he fails to explain how the former rendered Hoffman qualified to offer the
latter—especially in light of the district court’s unchallenged factual findings.14
“The first task of an appellant is to explain to us why the district court’s
decision was wrong.” Nixon, 784 F.3d at 1366. To accomplish that task, an appellant
can’t allow “the reasons that were given by the district court” for a particular ruling
to “go unchallenged.” Id. Instead, an appellant must “explain what was wrong with
the reasoning that the district court relied on in reaching its decision.” Id.
Johnson makes no effort to do that here. The district court excluded Hoffman’s
testimony because it found him unqualified. And Johnson fails to “explain what was
wrong with th[at] reasoning.” Id. Instead, as the government points out, Johnson
appears to argue that the district court erred in excluding Hoffman’s testimony
because that testimony “would have supported [Johnson’s] theory of the case.”
Aplee. Br. 122. But Johnson cites no authority suggesting that a witness can offer
expert testimony simply because the testimony might “assist the defendants in
presenting their theory of the case.” Aplt. Br. 50. Rather, the witness must be
“qualified as an expert by knowledge, skill, experience, training, or education.” Fed.
R. Evid. 702. The district court concluded that Hoffman wasn’t so qualified. And
14
Perhaps recognizing the problems inherent in this approach, Johnson argues
in his reply brief that the district court’s “characterization of Hoffman’s experience
as inadequate is belied by” the record. Rep. Br. 24. But arguments advanced for the
first time in a reply brief are waived. Beckstead, 500 F.3d at 1163.
32
because Johnson fails to challenge the district court’s reasoning on that point, he fails
to demonstrate reversible error. See Nixon, 784 F.3d at 1366, 1369.
H. Johnson’s Confrontation Clause Argument
Johnson next alleges that the district court violated his rights under the
Confrontation Clause by prohibiting him from cross-examining certain witnesses
about topics the government allegedly opened the door to when it broached those
topics on direct.
“[W]here a Confrontation Clause objection is not explicitly made below we
will not address the constitutional issue in the absence of a conclusion that it was
plain error for the district court to fail to raise the constitutional issue sua sponte.”
United States v. LaHue, 261 F.3d 993, 1009 (10th Cir. 2001) (alteration in original)
(emphasis added) (quoting United States v. Perez, 989 F.2d 1574, 1582 (10th Cir.
1993) (en banc)). Here, Johnson not only fails to assert or establish that he made an
explicit Confrontation Clause argument below; he again concedes in his reply brief
that he failed to do so. Moreover, Johnson doesn’t argue for plain error in his reply
brief, even after the government suggests in its response brief that he forfeited this
argument below. Accordingly, we treat this argument as waived and decline to
consider it. See Richison, 634 F.3d at 1131.15
15
Perhaps we could read Johnson’s opening brief as advancing an alternative
argument on this point: that the district court instead made a mere evidentiary error in
refusing to allow the defendants to explore certain topics on cross-examination. But
even assuming Johnson has adequately briefed this alternative argument, we would
reject it.
33
I. Johnson’s Due Process Clause Arguments
We likewise treat as waived Johnson’s arguments that the district court
violated his due-process rights by (1) suggesting, in the jury’s presence, that Johnson
would ultimately appeal—a statement he says conveyed that the district court thought
the jury would convict him; (2) making objections on the government’s behalf; and
(3) making comments that suggested hostility towards the defendants and defense
counsel.16 Once again, Johnson fails to provide any record citations establishing that
he objected to the district court’s actions or otherwise raised these arguments below.
Johnson suggests that the district court was required to allow him to cross-
examine witnesses about any subject the government explored on direct examination
because the government “open[ed] the door” to the admission of that evidence. Aplt.
Br. 54. But “[w]hen a party opens the door to a topic, the admission of rebuttal
evidence on that topic” merely “becomes permissible”; it doesn’t become mandatory.
Tanberg v. Sholtis, 401 F.3d 1151, 1166 (10th Cir. 2005); see also id. (“[T]he
decision to admit or exclude rebuttal testimony remains within the trial court’s sound
discretion.”).
Here, Johnson doesn’t dispute that admission of the testimony he sought to
elicit was “prohibited by” the district court’s pretrial orders. Aplt. Br. 52. Nor does
he dispute that he failed to object when the government successfully elicited similarly
barred testimony on direct. And critically, he fails to challenge the district court’s
suggestion that the defendants were attempting to use the open-the-door doctrine to
circumvent the court’s pretrial orders by intentionally refusing to object to the
government’s questions. Under these circumstances, the district court didn’t abuse its
discretion in refusing to allow the defendants to “waive [themselves] into a position
where” the court would admit evidence it had previously ruled was inadmissible.
App. vol. 48, 12474.
16
Johnson also makes a single passing reference to the district court’s
suggestion that certain evidence established an element of the government’s case. But
stray sentences like this one are insufficient to adequately present an argument on
appeal. Accordingly, we don’t address this statement. See Murrell v. Shalala, 43 F.3d
1388, 1389 n.2 (10th Cir. 1994) (“[S]uch perfunctory complaints fail to frame and
develop an issue sufficient to invoke appellate review.”).
34
And he likewise fails to make a plain-error argument in his opening brief. Moreover,
even though the government repeatedly asserts in its brief that plain-error review is
appropriate, Johnson neither challenges these assertions nor makes any attempt to
argue for plain error in his reply brief. Cf. Courtney, 816 F.3d at 684. Accordingly,
we treat these Due Process Clause arguments as waived and decline to consider
them.17 See Richison, 634 F.3d at 1131.
J. Denial of Evidentiary Hearings
Johnson next argues that the district court erroneously denied him evidentiary
hearings on certain matters. But Johnson’s “[a]rgument” on this issue consists solely
of a list of subjects upon which the district court allegedly failed to conduct hearings,
followed by a single sentence: “Considering the severity of the charges and the
importance of the issues raised, the lack of evidentiary hearings deprived Johnson of
a fair trial and due process.” Aplt. Br. 64–65. The deficiencies in this approach are
manifest.
First, with the exception of his motion for new trial, Johnson doesn’t even
suggest—let alone provide citations establishing—that (1) he actually requested
hearings on these matters and (2) the district court subsequently denied those
17
Our independent review of the record indicates that Johnson raised these
arguments in his motion for new trial. But even if Johnson asserted that this was
sufficient to avoid plain-error review on appeal—and, to be clear, he does not—we
would reject that assertion. See United States v. Toro-Pelaez, 107 F.3d 819, 828 (10th
Cir. 1997) (“[Defendant] failed to contemporaneously object regarding the first of the
two reasons he asserts as justification for a new trial. Thus, we are again constrained
in our review of this asserted error, and may only reach the issue if we find plain
error.”).
35
requests. Second, even assuming that Johnson made (and the district court denied)
such requests, we would review those denials only for abuse of discretion. See United
States v. Nichols, 169 F.3d 1255, 1263 (10th Cir. 1999) (“[O]ur general rule [is] that
decisions on the propriety of evidentiary hearings are reviewed for an abuse of
discretion.”). And a single sentence that nakedly cites “the severity of the charges
and the importance of the issues raised,” Aplt. Br. 65, is insufficient to demonstrate
that the district court’s failure to conduct evidentiary hearings on any of the matters
listed was “arbitrary, capricious, whimsical, or manifestly unreasonable.” United
States v. Lewis, 594 F.3d 1270, 1277 (10th Cir. 2010) (quoting United States v.
Munoz-Nava, 524 F.3d 1137, 1146 (10th Cir. 2008)). Accordingly, we find this
argument waived and decline to address it. See Fed. R. App. P. 28(a)(8)(A); Bronson,
500 F.3d at 1104.
III. Challenges to Johnson’s Sentence
In addition to the challenges he advances to his convictions—which we reject
or decline to address for the reasons discussed above—Johnson also advances various
challenges to his sentence.
A. The Relevant Loss
First, Johnson alleges that the district court erred in determining the relevant
loss for purposes of increasing his base offense level under U.S.S.G. § 2B1.1. In
support, he advances four separate arguments: (1) the government waived any
reliance on actual, as opposed to intended, loss to the banks; (2) the district court
violated his Fifth and Sixth Amendment rights by relying on uncharged or acquitted
36
conduct; (3) the district court relied on unsupported and unwarranted factual
assumptions; and (4) the district court failed to offset certain fees paid by IWorks.
“We review the district court’s loss[-]calculation methodology de novo and its
factual finding of loss for clear error.” United States v. Evans, 744 F.3d 1192, 1196
(10th Cir. 2014).
1. Waiver
In asserting that the government waived any reliance on actual loss for
sentencing purposes, Johnson relies on a single statement the government made at a
July 7, 2015 hearing. There, the government stated, “There is no loss to the bank
here, we concede that. But the way I read the case law is that we don’t have to prove
loss, we can prove intended loss.”18 App. vol. 40, 10392.
Citing this statement, Johnson argues the district court subsequently erred in
relying on actual loss to the card-issuing banks for purposes of § 2B1.1. But Johnson
makes no effort in his opening to brief to explain why we should conclude that, when
the government stated there was “no loss to the bank,” App. vol. 40, 10392, the
government was referring to the multiple card-issuing banks, rather than solely to
WFB. And in the absence of any reasoned argument to that effect, we decline to
reach that conclusion. On the contrary, the government referred to a singular “bank,”
18
At the outset, we note that Johnson doesn’t provide a record citation
establishing that he brought this specific statement to the district court’s attention as
part of his waiver argument. Moreover, he doesn’t argue for plain error. Thus, we
could treat this argument as waived and decline to consider it. But because the
government doesn’t ask us to do so, we proceed to the merits. See Heckenliable, 446
F.3d at 1049 n.3.
37
id., rather than to multiple “banks” when it made the statement that Johnson relies on.
Specifically, it stated, “There is no loss to the bank here.” Id. (emphasis added).
Thus, to the extent we interpret this statement as a concession at all, the government
conceded only that there was “no loss to” WFB. Id. And this renders inapposite the
authorities that Johnson cites.
For instance, the government’s July 7, 2015 statement that there was no actual
loss to WFB isn’t “contrary” to the government’s later position that other banks—
i.e., the card-issuing banks—in fact suffered actual losses. Steagald v. United States,
451 U.S. 204, 209 (1981). Likewise, the government didn’t “forsw[ear] reliance on”
actual loss to those other banks by stating there was no loss to WFB. United States v.
Latimore, No. 1:13-CR-287-TCB-AJB, 2014 U.S. Dist. LEXIS 91777, *20 n.17
(N.D. Ga. May 29, 2014). Nor did it explicitly “disclaim[]” reliance on actual loss to
those banks. United States v. Kutz, Nos. CR-10-0217-F, CIV-15-1153-F, 2016 U.S.
Dist. LEXIS 176894, *5–13 (W.D. Okla. May 5, 2016). Thus, the district court didn’t
abuse its discretion in rejecting Johnson’s waiver argument.
Johnson also raises the specter that the government’s statement about actual
loss violated his due-process rights by (1) rendering involuntary his decision to go to
trial rather than accepting a plea, and (2) punishing him for exercising his
constitutional right to a jury trial. But he doesn’t cite any authority to support either
argument. Accordingly, we find them waived and decline to consider them. See Fed.
R. App. P. 28(a)(8)(A); Bronson, 500 F.3d at 1104.
38
2. Uncharged and Acquitted Conduct
Johnson next argues that the district court violated his Fifth and Sixth
Amendment rights by considering “uncharged or acquitted conduct” at sentencing.
Aplt. Br. 70. But “a jury’s verdict of acquittal does not prevent the sentencing court from
considering conduct underlying the acquitted charge, so long as that conduct has been
proved by a preponderance of the evidence.” United States v. Watts, 519 U.S. 148, 157
(1997); see also United States v. Lewis, 594 F.3d 1270, 1289 (10th Cir. 2010) (noting that
defendant’s challenge to use at sentencing of “evidence of losses caused by conduct of
which he had been acquitted” could “be disposed of summarily” under Watts). Absent en
banc rehearing or an intervening Supreme Court opinion, we remain bound by our
decision in Lewis.19 See United States v. Brooks, 751 F.3d 1204, 1209 (10th Cir. 2014).
We therefore reject this argument.
We likewise reject Johnson’s cursory suggestion—which he addresses only in a
footnote—that an as-applied challenge to the district court’s use of uncharged conduct
remains viable under Watts. Specifically, Johnson argues that “[i]f the use of acquitted or
uncharged conduct produces a sentence that would be unreasonable in light of the actual
offenses of conviction, such outcome violates the Sixth and Fifth Amendments.” Aplt.
Br. 71. But “the Courts of Appeals have uniformly taken [the Supreme Court’s]
19
In a letter of supplemental authority, see Fed. R. App. P. 28(j), Johnson
suggests that Nelson v. Colorado, 137 S. Ct. 1249 (2017), constitutes such
intervening authority. But Nelson doesn’t even mention Watts. And the Supreme
Court doesn’t typically “overturn . . . earlier authority sub silentio.” Shalala v. Ill.
Council on Long Term Care, Inc., 529 U.S. 1, 18 (2000). We see no reason to
presume that it did so here.
39
continuing silence to suggest that the Constitution does permit otherwise unreasonable
sentences supported by judicial factfinding, so long as they are within the statutory
range.” Jones v. United States, 135 S. Ct. 8, 9 (2014) (Scalia, J., dissenting from denial of
cert.); see also United States v. Redcorn, 528 F.3d 727, 745 (10th Cir. 2008) (rejecting
argument “that it is unconstitutional for the sentencing judge to rely upon a fact not found
by the jury or admitted by the defendant in determining a sentence, where the sentence
would not be reasonable in the absence of that fact”). Until the Supreme Court indicates
we should do otherwise, we continue to adhere to this approach.
Alternatively, Johnson argues that even assuming the district court could rely on
uncharged or acquitted conduct, it failed to make a finding that the conduct at issue
caused the relevant harm. We again disagree. As the government points out, the district
court expressly found that “the other merchant accounts gave rise to [the relevant] harm.”
App. vol. 38, 9900.
Johnson also suggests—although he doesn’t explicitly state—that any finding of
causation would be clearly erroneous because it would necessarily rely on the assumption
that, for example, every merchant-account application contained false statements. But
Johnson’s three-sentence argument on this point overlooks a critical proposition: “[i]n
calculating loss under the Guidelines, the district court does not limit itself to conduct
underlying the offense of conviction, but rather may consider all of the defendant’s
‘relevant conduct.’” United States v. Griffith, 584 F.3d 1004, 1011 (10th Cir. 2009)
(quoting U.S.S.G. § 1B1.3). And § 1B1.3 defines relevant conduct broadly: it includes
not just the “criminal activity” itself, but “all acts and omissions” committed “within the
40
scope of the jointly undertaken criminal activity.” § 1B1.3(a)(1)(B)(i). Because Johnson
doesn’t explain why only the merchant-account applications that contained false
statements fall within this definition, we reject this argument.
3. Chargebacks
Johnson next argues that the district court erred in relying on unsupported factual
assumptions to determine that each chargeback cost the card-issuing bank $25.
Specifically, he asserts that this finding depends on the assumption that “each chargeback
was by a different customer for a different card,” and ignores the possibility that some of
the chargebacks were associated with one customer and one card. Aplt. Br. 74. Johnson
suggests that where one customer initiated multiple chargebacks on one card, the
overhead cost to the card-issuing bank was less than $25 per chargeback because the $25
amount includes the cost of issuing a new credit card, and a single customer would only
need one new card. Relatedly, Johnson asserts that the district court wrongly assumed
that every customer who initiated a chargeback also canceled his or her card and received
a reissued one.
Johnson’s arguments aren’t without intuitive appeal. But the district court heard
testimony indicating that (1) each chargeback costs the card-issuing bank between $25
and $35; and (2) this amount arises not only from the cost of reissuing the cards, but also
from the cost of staffing a call center that processes the chargebacks and provides
customer service. Thus, by choosing an amount at the low end of this range, the district
court made a “reasonable estimate of the loss” caused by each chargeback: while some
chargebacks may have cost less than $25, some apparently cost more. United States v.
41
Mullins, 613 F.3d 1273, 1292 (10th Cir. 2010) (noting that “district court ‘need only
make a reasonable estimate of the loss,’ not make a perfect accounting” (quoting
§ 2B1.1(b)(1), cmt. n.2(C)); see also id. (explaining that district court’s factual finding of
loss isn’t clearly erroneous simply because it’s “possibly or even probably wrong; the
error must be pellucid to any objective observer” (quoting Watson v. United States, 485
F.3d 1100, 1108 (10th Cir. 2007))).
Affording the district court “‘appropriate deference,’ in recognition of [its] ‘unique
position to assess the evidence and estimate the loss based upon that evidence,’” we
conclude the district court didn’t err in calculating the cost of each chargeback. Id.
(quoting § 2B1.1(b)(1), cmt. n.2(C)).
4. Fines and Fees
Johnson next complains that the district court erroneously failed to deduct from its
loss calculation certain fines and fees that IWorks allegedly paid to the card-issuing
banks. But Johnson fails to identify in his opening brief where he raised below the fact-
based arguments he now advances on appeal. And as the government points out, “failure
to assert a factual dispute at sentencing waives the challenge because it prevent[s] . . . the
district court from resolving the fact issue.” United States v. Wright, 848 F.3d 1274, 1285
(10th Cir.) (second alteration in original) (quoting United States v. Shengyang Zhou, 717
F.3d 1139, 1154 (10th Cir. 2013)), cert. denied, 138 S. Ct. 115 (2017).
In response, Johnson asserts for the first time in his reply brief that he lacked an
adequate opportunity to object to the district court’s factual findings. There, he argues
that (1) the district court required the parties to submit any sentencing memoranda by
42
July 22, 2016; (2) the district court didn’t issue its preliminary loss ruling until July 28,
2016; and (3) by then, “Johnson was prohibited from submitting evidence to dispute the
court’s loss determination.” Rep. Br. 35.
We could decline to address Johnson’s late-blooming preservation argument. See
Beckstead, 500 F.3d at 1163 (explaining that arguments advanced for the first time in a
reply brief are waived). Johnson was required to provide, in his opening brief, a “precise
reference in the record where [each] issue was raised and ruled on.” 10th Cir. R.
28.2(C)(2). If Johnson thought good cause existed for us to overlook his inability to
comply with that requirement, he should have stated as much in his opening brief and
provided there a reasoned basis for that assertion. His failure to do so highlights the very
reason we treat such arguments as waived: when an appellant raises an argument for the
first time in a reply brief, “[i]t robs the appellee of the opportunity to demonstrate that the
record does not support an appellant’s factual assertions and to present an analysis of the
pertinent legal precedent that may compel a contrary result.” Stump v. Gates, 211 F.3d
527, 533 (10th Cir. 2000).
Here, the government had no opportunity to respond to Johnson’s belated
preservation argument. And for reasons the government likely would have pointed out if
it had been afforded such an opportunity, Johnson’s preservation argument fails on its
merits. The district court conducted a sentencing hearing on July 29, 2016. At that
hearing, Johnson had an opportunity to challenge the district court’s preliminary loss
calculation. In fact, he did challenge it, albeit on grounds he doesn’t pursue on appeal.
Moreover, although Johnson may have lacked the ability to present additional evidence at
43
that point, he doesn’t identify what additional evidence he might have presented to
support the arguments he now advances. And indeed, as we read Johnson’s opening brief,
his arguments rely on evidence that was already before the district court. Accordingly, we
see no reason Johnson couldn’t raise at the sentencing hearing the same fact-based
challenges he now raises on appeal. Because his failure to do so “prevented . . . the
district court from resolving” those issues, Johnson has waived any argument that the
district court failed to offset certain fees and fines. Wright, 848 F.3d at 1285 (alteration in
original) (quoting Shengyang Zhou, 717 F.3d at 1154).
B. Sophisticated Means
Johnson next asserts that the district court erred in imposing a “sophisticated[-]
means” enhancement under § 2B1.1(b)(10)(C). Section 2B1.1(b)(10)(C) provides for
a two-level increase if “the offense otherwise involved sophisticated means and the
defendant intentionally engaged in or caused the conduct constituting sophisticated
means.” The term “sophisticated means” encompasses “especially complex or
especially intricate offense conduct pertaining to the execution or concealment of an
offense.” § 2B1.1 cmt. n.9(B). “For example, in a telemarketing scheme, locating the
main office of the scheme in one jurisdiction but locating soliciting operations in
another jurisdiction ordinarily indicates sophisticated means,” as does “[c]onduct
such as hiding assets or transactions, or both, through the use of fictitious entities,
corporate shells, or offshore financial accounts.” Id.
In imposing the enhancement, the district court reasoned that “something as
simple as [a] multi-state location may constitute ‘sophisticated means.’” App. vol.
44
38, 9885 (quoting § 2B1.1(b)(10)(C)). And it pointed, as an example, to evidence that
one of the underlying merchant-account applications in this case “show[ed] a Nevada
corporation with a business address in Las Vegas, Nevada; the nominee owner’s
address in Alpine, Utah; and a bank account in St. George, Utah.” Id. The district
court also noted the complexity of the system the defendants employed to avoid
detection and the high level of planning and coordination their scheme required:
Establishment of each merchant account required a nominee
owner, a corporate entity, an out-of-state address using a maildrop
service, an agreement to forward mail from the fictitious addresses to
[I]Works’ address in St. George, out-of-state telephone service with a
prefix number corresponding to the state of incorporation, designation
of employee population on the applications, a depository bank account
in the nominee’s name with Scott Leavitt’s signatory authority to enable
fund transfer, transfer of funds from the nominee depository accounts
directly to [I]Works and Johnson bank accounts, a tax identification
number, and tax returns in the name of the nominee owners and
corporations.
Id. at 9886.
Johnson doesn’t appear to dispute that the scheme as a whole involved
sophisticated means. Instead, he argues that “[t]he ‘offense’ here” wasn’t the scheme
as a whole, but rather the unsophisticated act of “writing incorrect information on a
merchant account application.” Aplt. Br. 80 (quoting § 2B1.1(b)(10)(C)).
But the Guidelines don’t “require every step of the defendant’s scheme to be
particularly sophisticated; rather, . . . the enhancement applies when the execution or
concealment of a scheme, viewed as a whole, is ‘especially complex or especially
intricate.’” United States v. Weiss, 630 F.3d 1263, 1279 (10th Cir. 2010) (emphasis
added) (quoting § 2B1.1 cmt. n.9(B)); see also United States v. Jenkins-Watts, 574
45
F.3d 950, 962 (8th Cir. 2009) (“Even if any single step is not complicated, repetitive
and coordinated conduct can amount to a sophisticated scheme.” (quoting United
States v. Bistrup, 449 F.3d 873, 882 (8th Cir. 2006))). Thus, the district court didn’t
err in failing to confine its analysis to the act of “writing incorrect information on a
merchant account application,” as Johnson asserts. Aplt. Br. 80.
And nothing in United States v. Rice, 52 F.3d 843 (10th Cir. 1995), suggests
otherwise. There, we held that U.S.S.G. § 2T1.3(b)(2) (1989)’s sophisticated-means
enhancement didn’t apply to a defendant who “merely claimed to have paid
withholding taxes he did not pay.” Rice, 52 F.3d at 849. But even assuming that
Johnson’s conduct here was similar to the defendant’s conduct in that case, the
applicable Guidelines commentary in Rice clarified that the sophisticated-means
enhancement at issue there only applied to conduct that was “more complex or
demonstrate[d] greater intricacy or planning than a routine tax-evasion case.” Id. at
849 (quoting § 2T1.3 (1989) cmt. n.2). Because the commentary to § 2B1.1(b)(10)(C)
contains no similarly restrictive language, Johnson’s reliance on Rice is misplaced.
Accordingly, the district court didn’t err in imposing the sophisticated-means
enhancement.
C. Gross Receipts
Johnson also challenges the district court’s decision to impose a two-level
enhancement under § 2B1.1(b)(16)(A). That enhancement applies if a “defendant
derived more than $1,000,000 in gross receipts from one or more financial
institutions as a result of the offense.” § 2B1.1(b)(16)(A). Likewise, the relevant
46
commentary defines “gross receipts” to include property “obtained directly or
indirectly as a result of such offense.” § 2B1.1(b)(16)(A) cmt. n.12(B).
Citing this language, Johnson argues there’s no evidence that he received more
than $1 million “as a result of his actual offenses”—that is, as a result of the false
statements on the account applications. Aplt. Br. 83. In support, he points out that the
government failed to demonstrate WFB ever received the false statements, let alone
relied on them in releasing any funds. The government doesn’t disagree with this
assertion. But in a one-paragraph argument, it nevertheless asks us to affirm the
enhancement, arguing that (1) the false statements appeared on applications; (2) without
those applications, the merchants wouldn’t have received accounts; (3) without accounts,
the merchants couldn’t process credit-card payments; and (4) if the merchants couldn’t
process credit-card payments, then Johnson wouldn’t have received the funds.
We think the government’s argument reads § 2B1.1(b)(16)(A) too broadly.
Instead, we agree with the Fifth Circuit: § 2B1.1(b)(16)(A)’s “simple language
requires that the money be derived as a result of the violation of the statute.” See
United States v. Sandlin, 589 F.3d 749, 757 (5th Cir. 2009). And in the context of
§ 1014, that means the enhancement applies only if WFB released the funds “because
of [Johnson’s] false statements.” Id. Here, the government doesn’t dispute that it
failed to present any evidence that would indicate WFB received or relied on
Johnson’s false statements. Accordingly, the district court erred in assessing a two-
47
level enhancement under § 2B1.1(b)(16)(A), and therefore we reverse Johnson’s
sentence and remand for resentencing.20
IV. The Government’s Motion to Seal
As a final matter, we grant the government’s motion to maintain Volumes 36
and 37 of its Supplemental Appendix under seal. And we also grant its motion to
strike Volumes 76 and 77 of Johnson’s Appendix; Johnson doesn’t dispute the
government’s assertion that these volumes comprise documents that aren’t part of the
district-court record. See Fed. R. App. P. 10(a) (explaining that only certain items—
including “original papers and exhibits filed in the district court”—“constitute the
record on appeal”); United States v. Kennedy, 225 F.3d 1187, 1191 (10th Cir. 2000)
(“This court will not consider material outside the record before the district court.”).
Because we grant the government’s motion to strike Volumes 76 and 77 of Johnson’s
Appendix, we deny as moot Johnson’s motion to seal those volumes.
20
Because the government failed to demonstrate that Johnson “obtained” more
than $1 million “directly or indirectly as a result of [his] offense[s],”
§ 2B1.1(b)(16)(A) cmt. n.12(B) (emphasis added), we need not address whether the
gross receipts were “derived . . . from one or more financial institutions,”
§ 2B1.1(b)(16)(A). Compare United States v. Huggins, 844 F.3d 118, 122–23, 123
n.6 (2d Cir. 2016) (“Applying the enhancement to all cases where a defendant merely
withdraws money from his own bank account at a financial institution cuts too
broadly and is inconsistent with the primary purpose of the enhancement . . . .”), with
United States v. Stinson, 734 F.3d 180, 186 (3d Cir. 2013) (“The word ‘derived’
directs us to determine the source of the funds. . . . [A] financial institution is a
source of the gross receipts when it exercises dominion and control over the funds
and has unrestrained discretion to alienate the funds.”).
48
Conclusion
For the reasons discussed above, we affirm Johnson’s convictions. But because
the district court erred in assessing a two-level enhancement under
§ 2B1.1(b)(16)(A), we reverse his sentence and remand for resentencing.
Entered for the Court
Nancy L. Moritz
Circuit Judge
49