111 F.4th 637
5th Cir.2024Background:
- Lola Kasali was convicted on four counts (two bank fraud, two false statement) for submitting fraudulent PPP loan applications during COVID-19.
- She sought over $3.8 million for two businesses but failed to provide supporting documents; one loan was denied, the other seized before funds transferred.
- Kasali was represented by five different attorneys, repeatedly sought to substitute counsel, and clashed with court-appointed lawyers.
- On the first day of trial, Kasali refused to change into street clothes or participate, leading the court to deem her voluntarily absent; she listened in remotely and attended all other proceedings.
- The district court applied an 18-level sentencing enhancement based on intended (not actual) loss, sentenced Kasali to 70 months' imprisonment, and ordered over $2 million in restitution to the SBA.
- Kasali appealed on grounds related to counsel substitution, her absence from part of the trial, calculation of intended loss, and restitution award.
Issues:
| Issue | Kasali's Argument | Government's Argument | Held |
|---|---|---|---|
| Denial of motions to substitute counsel | Court failed to properly inquire into conflicts and denied her right to qualified counsel | No substantial conflict or breakdown; Kasali's own lack of cooperation caused issues | District court did not abuse discretion; denials affirmed |
| Proceeding with trial in her absence | She did not voluntarily waive her right to be present, just protested counsel | Her conduct was a voluntary waiver; court balanced need to proceed | Waiver was voluntary and proceeding was appropriate |
| Sentencing enhancement (intended loss) | Enhancement should not be based on intended loss; only actual loss counts | Guidelines allow enhancement based on greater of actual or intended loss | Enhancement proper; no error |
| Restitution award to SBA | No actual loss, so restitution improper and would result in double recovery | Restitution and forfeiture are separate remedies; both proper and supported by precedent | Both restitution and forfeiture appropriate; SBA was a direct victim |
Key Cases Cited
- United States v. Gonzalez-Lopez, 548 U.S. 140 (Sixth Amendment right to counsel of choice, but not to appointed counsel of choice)
- United States v. Stincer, 482 U.S. 730 (defendant must be present at critical stages of trial)
- Illinois v. Allen, 397 U.S. 337 (right to be present can be reclaimed if defendant behaves appropriately)
- United States v. Taylor, 582 F.3d 558 (restitution and forfeiture are both proper and not double recovery)
- Strickland v. Washington, 466 U.S. 668 (standard for conflict of interest and ineffective assistance of counsel)