United States v. James Lloyd
807 F.3d 1128
| 9th Cir. | 2015Background
- Five defendants worked in telephone telemarketing "boiler rooms" in CA and FL selling partnership units to finance independent films; ~650 victims invested >$23M and mostly lost their money. Two related indictments charged mail/wire fraud, conspiracy, and sale of unregistered securities.
- Lloyd (CA manager) pleaded guilty to two wire fraud counts; Keskemety (FL manager) pleaded guilty to one mail fraud count; both appealed only their sentences. Baker, Nelson, and Greenhouse were tried together; Baker and Nelson were convicted on multiple counts (conspiracy, mail/wire fraud, offer/sale of unregistered securities); Greenhouse convicted only on unregistered-securities counts.
- Key factual patterns: scripts and private placement memoranda promised presale distribution contracts, quick returns, and no or deferred commissions — representations the court found were false or unsupported; “reloading” conference calls used shills to induce further investments.
- Sentencing disputes centered on attribution of fraud losses among separate boiler rooms (relevant conduct/reasonable foreseeability), application of vulnerable-victim enhancement, and correct criminal-history scoring under U.S.S.G. rules.
- Evidentiary disputes at trial focused on admission of (1) lay-opinion testimony by a former closer (Agler) that relied on hearsay, (2) Rule 404(b) evidence of subsequent employment at another telemarketing firm (Big Gunn), (3) an internal email offered to show state of mind, and (4) victim-impact/financial-condition testimony.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Keskemety may be held accountable at sentencing for fraud losses from Lloyd’s CA boiler room (relevant conduct/foreseeability) | Gov: Keskemety knew Sellers’s overall scheme and had interconnection with Lloyd; losses from both offices are reasonably foreseeable and within jointly undertaken activity | Keskemety: he ran an independent FL boiler room, did not pool customers/resources/profits with Lloyd, and did not participate in or benefit from Lloyd’s reloading activity | Reversed district court as to loss attribution; FL manager’s relevant conduct cannot be expanded to include CA losses absent particularized findings of jointly undertaken activity (remanded for resentencing) |
| Admissibility of former-closer Agler’s testimony as lay opinion (Rule 701) and notice for expert testimony (Rule 16/702) | Gov: Agler’s extensive boiler-room experience supports lay-opinion testimony; any notice defect was harmless or Agler would qualify as an expert | Defendants: Agler’s opinions rested on hearsay from unidentified telemarketers and investors, so testimony exceeded permissible lay opinion and violated expert-disclosure rules | Abuse of discretion: Agler’s testimony improperly admitted as lay opinion because it relied on hearsay/unidentified sources; error contributed to undermining Nelson’s conviction (harmless as to Baker given overwhelming other evidence) |
| Admissibility of Rule 404(b) evidence about Nelson’s subsequent telemarketing employment (Big Gunn) | Gov: Subsequent employment probative of intent/knowledge (not remote), and similar acts admissible to rebut defendant’s claimed lack of knowledge | Nelson: Government failed to show Big Gunn was fraudulent or that Nelson committed similar misrepresentations there; admission unfairly prejudicial | Abuse of discretion: evidence of Big Gunn and the Slanaker check improperly admitted against Nelson because record lacked sufficient proof Big Gunn engaged in fraud; error not harmless as to Nelson (reversed) |
| Criminal-history calculation for Baker under U.S.S.G. §4A1.2(k), cmt. n.11 (revocation of multiple probationary sentences) | Gov: Two prior revocations may be counted separately under §4A1.2(a)(2) and the PSR calculation was reasonable | Baker: Application Note 11 requires adding revocation term only to the sentence that yields greatest increase in points; PSR double-counted the revocation and overstated criminal-history points | Remanded: District court didn’t apply Note 11; record unclear whether a 3- or 6-point increase applies — vacated sentence and remanded for recalculation and resentencing |
Key Cases Cited
- United States v. Carty, 520 F.3d 984 (9th Cir. 2008) (standard of review for sentencing; abuse of discretion when Guidelines miscalculated or based on clearly erroneous facts)
- United States v. Treadwell, 593 F.3d 990 (9th Cir. 2010) (defendant accountable only for loss within scope of his agreement and reasonably foreseeable; telemarketer joint-activity factors)
- United States v. Blitz, 151 F.3d 1002 (9th Cir. 1998) (telemarketing conspiracies where sales force pooled resources and relied on collective success support broad loss attribution)
- United States v. Studley, 47 F.3d 569 (2d Cir. 1995) (knowledge of other participants’ acts insufficient to attribute those acts as relevant conduct without joint undertaking)
- United States v. Nevils, 598 F.3d 1158 (9th Cir. en banc 2010) (two-step sufficiency-of-evidence framework under Jackson)
- Burks v. United States, 437 U.S. 1 (1978) (conviction reversed for insufficient evidence bars retrial on same charge)
- United States v. Love, 535 F.2d 1152 (9th Cir. 1976) (reckless indifference can substitute for knowing falsity in mail-fraud instruction)
- United States v. Reyes, 577 F.3d 1069 (9th Cir. 2009) ("willfully" in securities context does not require knowledge that conduct violates law)
- United States v. Flores, 93 F.3d 587 (9th Cir. 1996) (interpretation of U.S.S.G. §4A1.2(k) and treatment of probation revocation terms in criminal-history calculation)