United States v. Thomas Jackson
662 F. App'x 416
| 6th Cir. | 2016Background
- Thomas Jackson (CEO of Imperial) and partner Preston Harrison solicited investments for OXYwater using a Private Placement Memorandum (PPM) that included materially false statements (fake sales team members, false celebrity endorsers, and misstated payroll/use of funds). Investors provided roughly $9.3 million.
- Jackson controlled Imperial’s finances and transferred large sums for personal use (including transfers to ForeverNow LLC used by the Harrisons).
- A federal grand jury indicted Jackson and the Harrisons on wire fraud, money laundering, and related counts; Jackson was convicted after an eight‑day joint trial.
- At trial Jackson declined to present a defense; the jury convicted him of conspiracy and multiple wire‑fraud and money‑laundering counts.
- The PSR calculated loss at about $8.84 million (later argued by prosecution to be $9.34 million). The district court sentenced Jackson to 83 months (below the then‑Guidelines range) and ordered restitution of $8,840,706.
- On appeal Jackson challenged: denial of substitute appointed counsel, ineffective assistance of trial counsel, loss‑amount calculation, and substantive reasonableness of his sentence. The Sixth Circuit affirmed.
Issues
| Issue | Appellant (Jackson) Argument | Government / District Court Argument | Held |
|---|---|---|---|
| Denial of motion to substitute court‑appointed counsel | Motion was justified by breakdown in communication, alleged conflict, and disciplinary complaint against counsel | Motion was untimely (filed on trial day), court sufficiently inquired, conflict not so severe as to prevent adequate representation, and public interest favored proceeding | Denial affirmed; district court did not abuse discretion (timeliness, adequate inquiry, nature of conflict, public‑interest balance weigh against substitution) |
| Ineffective assistance of counsel (failure to move severance; failure to move mistrial) | Counsel erred by not severing or moving mistrial when co‑defendant evidence prejudiced Jackson | Record is undeveloped for a direct‑appeal ineffective‑assistance review; remedy is post‑conviction proceedings | Court declined to address on direct appeal for lack of developed record; claim left for collateral review |
| Loss amount (inclusion of Shaffer Smith’s investment and non‑testifying investors) | Shaffer Smith’s investment shouldn’t be counted because he didn’t rely directly on Jackson; non‑testifying investors weren’t shown to have relied on misrepresentations | Investments solicited via the PPM and presentations permeated the enterprise; investments through intermediaries were reasonably foreseeable losses; pervasive fraud justifies inclusion of entire invested amount | Inclusion affirmed; district court’s loss calculation not clearly erroneous—investments induced via third parties and pervasive fraud support total loss figure |
| Substantive reasonableness of sentence | Sentence is excessive and overweights loss; greater than necessary to satisfy §3553(a) goals | District court considered all §3553(a) factors, imposed a below‑Guidelines sentence after detailed reasoning; sentence is presumptively reasonable | Affirmed as substantively reasonable; no abuse of discretion in weighing factors or relying on loss magnitude |
Key Cases Cited
- United States v. Trujillo, 376 F.3d 593 (6th Cir. 2004) (four‑factor test for substitution of counsel and timeliness analysis)
- United States v. Marrero, 651 F.3d 453 (6th Cir. 2011) (standards for counsel substitution inquiry)
- Gall v. United States, 552 U.S. 38 (2007) (standard of review and considerations for reasonableness of sentence)
- United States v. Raithatha, 385 F.3d 1013 (6th Cir. 2004) (loss calculation principles and defendant’s burden to show error)
- United States v. Martinez, 588 F.3d 301 (6th Cir. 2009) (review of loss calculation for clear error)
- United States v. McCarty, 628 F.3d 284 (6th Cir. 2010) (deference to district court’s loss estimation)
- United States v. Curry, 536 F.3d 571 (6th Cir. 2008) (presumption of reasonableness for below‑Guidelines sentences)
- United States v. Healy, 553 F.3d 1 (6th Cir. 2009) (upholding inclusion of full investor losses where fraud permeated enterprise)