United States v. Lawrence Foster
878 F.3d 1297
| 11th Cir. | 2018Background
- Lawrence Foster, president of Paradise Is Mine, Inc. (PIM), solicited investments in purported Rum Cay, Bahamas, real estate through website claims, emails, celebrity endorsements (e.g., Joe Montana), and press-materials that represented national press coverage.
- PIM induced purchases or loans by offering land parcels, option contracts, or security interests while the disputed title was held by Sunward Holdings (a Bahamian company) and subject to litigation; investors never obtained title.
- Some promotional "articles" were produced by Foster or a PR firm; major newspapers cited had not actually covered PIM.
- PIM paid large sales commissions and Foster diverted substantial funds to personal withdrawals and unrelated purchases; little or no development occurred and tax returns were not filed.
- Foster was convicted (conspiracy and wire fraud), retried after a trial-exhibit error, convicted again, sentenced to 152 months, and ordered to pay restitution of $8,190,110; he appealed denial of acquittal motions, loss/restitution and sentence determinations, and denial of a verdict-vacatur motion based on alleged juror misconduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for wire-fraud convictions | Government: evidence of material misrepresentations/omissions (ownership, press coverage, celebrity purchases) and intent inferred from patterns and transfers | Foster: government failed to prove he made the misrepresentations or had criminal intent | Affirmed — viewing evidence for government, a reasonable jury could find material misrepresentations/omissions and intent beyond reasonable doubt |
| Loss amount — whether investors received offset credit for options/security interests | Government: loss equals money transferred to PIM; no offset because investors received no realizable value and documents were used to perpetuate fraud | Foster: option contracts/security agreements conferred value that should reduce loss | Affirmed — court did not clearly err in finding those interests practically valueless and that any documents were used to perpetuate the fraud, so no offset |
| Restitution amount calculation and scope | Government: restitution follows proven loss less returned funds; defendant must prove value of any goods/services provided | Foster: restitution should be reduced by collateral value of lots/security | Affirmed — restitution properly based on net loss after credit for small loan repayments; collateral held no value for victims |
| Juror-misconduct / motion to vacate verdict based on juror letter | Foster: juror letter alleging bullying and coercion warrants vacatur due to extraneous/influencing matter | Government: letter describes internal deliberation matters, barred by Fed. R. Evid. 606(b) | Affirmed — letter concerned internal deliberations (non-extraneous); Rule 606(b) barred inquiry and no exception applied |
Key Cases Cited
- United States v. Maxwell, 579 F.3d 1282 (11th Cir. 2009) (elements of wire-fraud scheme and material misrepresentation analysis)
- United States v. Campbell, 765 F.3d 1291 (11th Cir. 2014) (treating transfers into a sham entity as loss when the entity was inserted solely to perpetrate fraud)
- United States v. Liss, 265 F.3d 1220 (11th Cir. 2001) (government bears burden to prove loss for restitution)
- United States v. Huff, 609 F.3d 1240 (11th Cir. 2010) (mandatory restitution obligation for certain convictions)
- Gall v. United States, 552 U.S. 38 (2007) (standard for appellate review of sentences: procedural and substantive reasonableness)
- Warger v. Shauers, 135 S. Ct. 521 (2014) (Rule 606(b) bars juror testimony about internal deliberations; definition of extraneous information)
- Tanner v. United States, 483 U.S. 107 (1987) (juror misconduct like alcohol use during deliberations is an internal matter for which post-verdict inquiry is limited)
- Peña-Rodriguez v. Colorado, 137 S. Ct. 855 (2017) (juror statements about racial bias as narrow exception to no-impeachment rule)
- United States v. Kieffer, 621 F.3d 825 (8th Cir. 2010) (intent to defraud can be inferred from a pattern of deceit)
- United States v. Sayakhom, 186 F.3d 928 (9th Cir. 1999) (value rendered may reduce loss but not when transfers solely perpetuate fraud)
- United States v. Irey, 612 F.3d 1160 (11th Cir. 2010) (appellate review of substantive reasonableness of sentence)
- United States v. Leung, 796 F.3d 1032 (9th Cir. 2015) (Rule 606(b) imposes a near-categorical bar on juror testimony about deliberations)