UNITED STATES of America, Plaintiff-Appellee, v. George David GORDON, a/k/a “G. David Gordon“, Defendant-Appellant.
Nos. 10-5146, 11-5009.
United States Court of Appeals, Tenth Circuit.
March 15, 2013.
Claire McCusker Murray, Criminal Division, Appellate Section, U.S. Department of Justice, Washington, D.C. (Thomas Scott Woodward, United States Attorney, Catherine J. Depew, Assistant United States Attorney, Northern District of Oklahoma; Kevin B. Muhlendorf and Andrew H. Warren, Trial Attorneys, Lanny A. Breuer, Assistant Attorney General, Criminal Division, Greg D. Andres, Acting Deputy Assistant Attorney General, Criminal Division, and Joseph Palmer, Attorney, Criminal Division, Appellate Section, U.S. Department of Justice, Washington, D.C., on the brief), for Plaintiff-Appellee.
HOLMES, Circuit Judge.
Defendant-Appellant George David Gordon is a former securities attorney convicted of multiple criminal charges relating to his alleged participation in a “pump-and-dump” scheme where he, along with others, violated the federal securities laws by artificially inflating the value of various stocks, and then turning around and selling them for a substantial profit. The government also restrained some of his property before the indictment was handed down and ultimately obtained criminal forfeiture of that property. We affirm Mr. Gordon‘s conviction and sentence, as well as the accompanying forfeiture orders.
I. Factual and Procedural Background
Mr. Gordon was a securities attorney in Tulsa, Oklahoma. The government charged that Mr. Gordon and Richard Clark,1 a Tulsa businessman, engaged in a “pump-and-dump” scheme.2 As part of their scheme, Messrs. Gordon and Clark, along with other alleged co-conspirators, “acquired millions of shares in ‘penny stock’ companies[,] . . . used false and backdated documents to make their shares publicly tradeable[,] . . . [and] coordinated trading among themselves and nominees they controlled to create the false appearance of an active market for the stock[s].” Aplee. Br. at 3.
The government further claimed that the conspirators initiated false and misleading advertising campaigns to promote the stocks, sold the stocks through “an array of bank accounts and nominee[s],” and engaged in a subsequent cover-up to conceal their conduct from the Securities and Exchange Commission (“SEC“). Id. at 3–4.
The scheme can be traced back to 2004 when Mr. Gordon began dealing with
A. National Storm
National Storm was a roofing and siding company in Illinois with annual revenues of around $8 million. Mr. Gordon and Mr. Lindberg met with National Storm‘s president in 2005 to discuss financing options. The parties agreed to take the company public. In pursuit of that goal, Mr. Gordon and an associate (New York businessman Richard Singer) arranged for a merger between National Storm and The 18th Letter—a public “shell company . . . that had been incorporated and had issued stock in 2002.” Aplt. Opening Br. at 9.
Mr. Gordon forwarded to Mr. Singer a legal opinion letter pursuant to SEC Rule 144, signed by an associate attorney, Robert Bertsch, stating that The 18th Letter‘s shares were freely tradeable under Rule 144‘s criteria because the shares had been purchased by the respective owners two years ago. See
Mr. Singer testified that because he was the only shareholder in The 18th Letter, Mr. Gordon instructed him to “offer some friends a thousand dollars each to falsely claim that they were shareholders.” Aplee. Br. at 6. Mr. Gordon‘s office transmitted to Mr. Singer “backdated corporate records . . . that purported to memorialize Singers’ [sic] friends’ purchase of shares two years previously“—i.e., seemingly with the aim of satisfying Rule 144‘s requirements. Id.; see R., Vol. VIII, at 1494–98 (Trial Test. of Richard Singer, dated Apr. 14, 2010) (“[The documents] were backdated to show that the shareholders owned the stock longer than they actually did, so upon becoming a public company those
The opinion letter was transmitted to a transfer agent so that the shares at issue could be traded publicly on an “over-the-counter” (“OTC“) market. See generally Black‘s Law Dictionary 1214 (9th ed. 2009) (defining “over-the-counter market” as “[t]he market for securities that are not traded on an organized exchange“). The merged company consisted of six million freely-tradeable shares—or 15% of the total shares. National Storm‘s president held the remaining interest in the form of restricted shares (i.e., non-trading shares).
In 2005, several storms pelted the Gulf of Mexico, causing “severe damage” throughout the Southern states. Aplt. Opening Br. at 6. Because National Storm was a building company, Messrs. Gordon, Lindberg and Lankford wanted to take advantage of the potential for increased share performance, so they employed a stock promoter named Dean Sheptycki (a charged co-conspirator) “who could write and send . . . millions of fax advertisements each day about a company.” Id. at 10. A “fax blast” campaign was initiated subsequently; thousands of faxes were sent out touting strong market expectations for National Storm‘s future growth. A similar “e-mail blast” campaign followed.
The distributed material was misleading in many ways. For instance, an August 31, 2005, fax represented that “Wall Street expectations” for the company‘s growth were “207% now” and “450% in the next 12 months“—this, despite the fact that no Wall Street “analysts” were covering the company. Aplee. Br. at 7 (citation omitted) (internal quotation marks omitted); see also Aplt. Addendum, ex. 4 (Nat‘l Storm Fax Advertisement, dated Aug. 31, 2005). Evidence also was introduced at trial that the faxes included misleading statements regarding the source of the information in order to “conceal the fact that the blast had been prepared by Sheptycki, reviewed by Gordon, and paid for from Gordon‘s client trust account.” Aplee. Br. at 8; see also R., Vol. VIII, at 3049–50 (Trial Test. of Mark Lindberg, dated Apr. 6, 2010) (noting that a marketing company included in the fax blast disclosures actually had no involvement with their dissemination, and that a statement suggesting that nonaffiliated shareholders paid for the advertisements was untrue). Similarly, one mass e-mail that contained information regarding National Storm‘s purported significant expected growth referred readers to the SEC‘s website for investor information. But, because National Storm was a so-called “Pink Sheet” OTC company, it was not required to file periodic reports with the SEC. See generally SEC v. Whittemore, 659 F.3d 1, 5 (D.C. Cir. 2011) (describing the Pink Sheet system as “a trading system that lists small companies that do not meet the requirements of the major stock exchanges“); SEC v. Platforms Wireless Int‘l Corp., 617 F.3d 1072, 1081 (9th Cir. 2010) (noting that the defendant‘s “stock has been traded on the Pink Sheets, now known as Pink Quote, an inter-dealer electronic quotation and trading system for registered and unregistered securities“); Black‘s Law Dictionary 1265 (defining “pink sheet” as “[a] daily publication listing over-the-counter stocks, their market-makers, and their prices“); R., Vol. I, at 53 (describing “Pink Sheets” as “a quotation service for over-the-counter stocks“).
Throughout the advertising campaign, Mr. Gordon, along with other co-conspirators, including Mr. Lindberg, used various “nominee” accounts to disguise ownership of National Storm shares and coordinate trading. National Storm‘s stock began to rise. As the prices rose, the conspirators began selling their shares. Ultimately, the conspirators made more than $5 million from the manipulation of National Storm.
The conspirators conducted another promotion, this time of Deep Rock, a Tulsa-based oil company. See Aplt. Opening Br. at 12 (“The rise in natural gas prices during the early part of 2005 caused Lindberg to want to do a similar promotion with Deep Rock. . . .“). Mr. Clark had held a majority of the “non-insider” shares of Deep Rock for many years. The government presented testimony that, similar to what had occurred with National Storm, Mr. Gordon arranged for Mr. Clark‘s shares to be transferred to various nominees in order to disguise their ownership. See R., Vol. VIII, at 3138–39 (noting that shares were “parked” with others in order “to not disclose who actually control[led] all the shares“). Mr. Gordon prepared an opinion letter stating that the nominees had fulfilled Rule 144‘s requirements in order for the stock to be assigned a symbol for public trading.
The conspirators began coordinated trading in Deep Rock stock, some of which occurred via separate nominee accounts. See id. at 3140 (discussing how the conspirators were able to “prime” Deep Rock stock—i.e., create the appearance of high-volume trading before promotions began). In September 2005, they sent out a series of fax and e-mail blasts hyping Deep Rock and touting its potential for astronomical profits in the wake of the chaos created by Hurricane Katrina and in light of rising energy prices. These faxes, like those in the National Storm blast, contained many misleading assertions. Also, in support of their efforts, the conspirators caused to be prepared certain promotional “magalogs“—i.e., catalogue-type brochures. Mr. Gordon personally reviewed some of the promotional material. On one occasion, he responded on Deep Rock‘s behalf to a complaint about the fax blasts, denying knowledge of the source of the faxes, and noting that Deep Rock “would consider joining a lawsuit against the perpetrators.” Aplee. Br. at 14.
Deep Rock‘s stock price rose. See Aplt. Opening Br. at 13 (noting that “[i]t spiked in September, 2005, then began a steady decline into 2006“). Mr. Gordon, along with his co-conspirators, made around $5 million in gross proceeds from Deep Rock sales.
C. Global Beverage
In 2005, Mr. Lindberg and other co-conspirators became involved with a sport drink company (Rudy Beverages) founded by Rudy Ruettiger, a former Notre Dame athlete, and the subject of the major motion picture, Rudy. Mr. Ruettiger wanted to expand his business, and in the summer of 2005, conspirators, including Mr. Lindberg, put a plan into action to help finance the company. Global Beverage, a company in which certain conspirators controlled a substantial stake, acquired Rudy Beverages in the fall of 2005. While financing issues were worked out, Mr. Gordon permitted the conspirators to “park” millions of corporate shares in his client trust account.
Shares of Global Beverage became publicly tradeable. And Mr. Lindberg and other co-conspirators devised a plan to manipulate the stock. See R., Vol. VIII, at 178 (Trial Test. of Mark Lindberg, datеd Apr. 7, 2010) (noting that there was no difference between the “manipulation of Global Beverage . . . [and] National Storm and Deep Rock“).5 Mr. Lindberg testified that, as part of the plan, the conspirators placed many shares with nominees and began a promotional campaign for the company. Mr. Sheptycki composed and
The price of Global Beverage stock spiked during the end of 2005 and beginning of 2006, but, due in part to disappointing financials, eventually dropped. The conspirators, including Mr. Gordon, made roughly $25 million total from the manipulation of Global Beverage.
D. International Power Group6
Sometime in 2004 or 2005, Mr. Gordon approached Mr. Lindberg about getting a trading symbol for a private company that he and Mr. Singer had discovered: IPG. Mr. Gordon used a company called “Ednet“—an entity that was controlled by his “longtime friend and business associate,” Mark White—to serve as a shell for a reverse merger with IPG. Id. at 251. See generally M & A West, 538 F.3d at 1046 (“A reverse merger is a transaction in which a privately-held corporation acquires a publicly-traded corporation, thereby allowing the private corporation to transform into a publicly-traded corporation without the necessity of making an initial stock offering.“). Mr. Gordon prepared a Rule 144 opinion letter and instructed Mr. Singer to have his attorney, Robert Bertsch, sign it on his firm‘s letterhead, “even though [Mr. Bertsch] had never communicated with the purported shareholders.” Aplee. Br. at 13; see R., Vol. VIII, at 1604 (answering, “No. Not at all,” to the question, “Did Mr. Bertsch have any conversations with any of [the shareholders]?“). Mr. Singer and Mr. Bertsch were given IPG shares.
Mr. Gordon advised Mr. Lindberg‘s assistant, Chasity Thompson, to prepare backdated corporate documents for Ednet, including bylaws and board meeting notes, because Mr. White ostensibly had “lost all the [original] documents.” R., Vol. VIII, at 907–08 (Trial Test. of Chasity Thompson, dated Apr. 12, 2010). After the Rule 144 opinion that Mr. Gordon drafted was transmitted to a transfer agent, unrestricted shares were issued. Mr. Singer gradually sold shares on Mr. Gordon‘s behalf, and at one point in November 2005, wire-transferred roughly $1.7 million of the proceeds to “pay off the mortgage on [Mr. Gordon‘s] house.” Id. at 1610. The government also presented evidence that Mr. Singer later prepared a false, backdated document purporting to memorialize a sale of IPG stock between Mr. Gordon and Mr. Singer that never actually took place. This document allegedly was created in an attempt to stop the government from obtaining forfeiture of Mr. Gordon‘s home.
E. The Investigation and Prosecution
In 2004, SEC official Samuel Draddy began looking into an unrelated Pink Sheet company that had some “unusual trading surrounding its stock аnd appeared to be the subject of a promotional campaign.” Id. at 1753 (Trial Test. of Samuel Draddy, dated Apr. 15, 2010). This case led to further investigations of other “similarly-situated issuers” with unusual trading patterns and promotional campaigns. Id. After taking a deeper look, investigators noticed that the companies under consideration revealed similar patterns where “the people involved owned shells, [which] were publicly-traded issuers that had no legitimate business purpose, . . . [and t]hey would then get private com-
SEC investigators called Mr. Gordon on September 20, 2005. Before commencing the discussion, they informed Mr. Gordon that he could speak with counsel before answering their questions, and that he could choose whether or not to answer the questions as a general matter. They also informed him that “there [were] potential penalties, both civil and criminal, for giving false answers to government officials.” Id. at 1772. During the conversation, Mr. Gordon was asked about, and denied any knowledge of, the source of the National Storm and Deep Rock promotions.7
In 2007, roughly two years before the indictment was filed, the government placed a caveat on two lots that Mr. Gordon had previously acquired as a part owner of the Delvest Corporation (the “Delvest lots“). See generally Black‘s Law Dictionary 252 (defining “caveat” as “[a] warning or proviso“). Further, a caveat was placed on Mr. Gordon‘s personal residence. The government also seized two of his law firm‘s bank accounts. The government filed a civil forfeiture action against the residential property in 2007 and replaced the caveat with a lis pendens. Upon the response of Mr. Gordon‘s wife—who was listed as the primary owner of the home—the government obtained a stay pending the resolution of its criminal investigation. When the indictment was returned in 2009, it sought forfeiture of both the residence and the law firm accounts.
At trial,8 the government called various witnesses (and co-conspirators) to summarize the details of the conspiracy, including Mr. Lindberg and Mr. Singer. Investigator Draddy also testified about the promotional campaigns and Mr. Gordon‘s discussion with the SEC. Other witnesses were called to summarize volumes of documentary evidence.
Late in the trial, the district court excused a petit juror. Specifically, after the government rested its case, a juror informed a court staff member that she wanted to serve as an alternate because her continued presence on the jury “could affect the outcome of the case,” R., Vol. VIII, at 2468 (Trial Tr., dated Apr. 29, 2010), because of, among other things, her “take on [certain] persоnalities,” id. at 2478 (Trial Test. of Juror, dated Apr. 29, 2010). After an investigation, the court decided, over Mr. Gordon‘s objection, that it would excuse her “out of an abundance of caution.” Id. at 2505.
Ultimately, Mr. Gordon was convicted on all counts that were submitted to the jury.9
F. Post-Trial Proceedings
The U.S. Probation Office prepared a Presentence Report (“PSR“), recommend-
Agreeing with the government, the district court determined that it would be too difficult to determine the losses suffered by each individual investor. Consequently, it calculated an illicit gain of $46,642,313 as an alternative measure of loss, resulting in a twenty-two-level increase in Mr. Gordon‘s offense level under
The district court also ordered forfeiture of, inter alia, up to $1.702 million in equity in Mr. Gordon‘s home and the full amount in his law firm bank accounts as directly forfeitable assets. The Delvest lots, along with some of Mr. Gordon‘s other accounts and property, were later ordered forfeited as “substitute” assets. See generally
II. Discussion
On appeal, Mr. Gordon raises multiple issues relating to the validity of his conviction and sentence, and the propriety of the government‘s conduct (both before and after trial) related to the forfeiture of his assets. In the end, we find no reversible error and affirm Mr. Gordon‘s conviction and sentencе, as well as the district court‘s forfeiture orders.
Mr. Gordon first argues that the government improperly seized his assets and, as a consequence, substantially deprived him of his Sixth Amendment right to counsel. However, we hold that, even assuming arguendo that the government acted improperly, Mr. Gordon‘s Sixth Amendment rights were not violated.
The Sixth Amendment provides that “the accused shall enjoy the right . . . to have the Assistance of Counsel for his defence.”
In Caplin & Drysdale, the Supreme Court rejected any contention that “the Sixth Amendment puts limits on the forfeiture statute[s].” 491 U.S. at 625–26. Assets that are properly forfeitable are not the defendant‘s rightful property. See id. at 626. As ill-gotten gains, they are “another person‘s money.” Id. Indeed, these assets may belong to the government by virtue of the “relation-back” provision of
Practical considerations, such as a defendant‘s relative wealth or penury, can of course impose constraints on a defendant‘s ability to exercise his right to counsel of choice—that is, to hire the attorney that he prefers. A defendant‘s ability in this regard also may be limited by the claims of other parties to his resources. One such party may be the government. For instance, with regard to a defendant who is prosecuted by the government for certain crimes and convicted, “[t]he court . . . shall order that the person forfeit to the United States any property, real or personal, involved in such offense, or any property traceable to such property.”
In 2007, before Mr. Gordon was indicted, the government filed caveats on the Delvest lots, and a lis pendens and a caveat on his residential property; it also seized two of his law firm bank accounts. In 2009, the government pursued forfeiture before the grand jury of the residence аnd the law office accounts. As returned by the grand jury, the indictment did not mention the Delvest lots. Furthermore, the grand jury found that the bank accounts were only substitute assets—in other words, it determined that they were not directly forfeitable. The grand jury did find, however, that Mr. Gordon‘s residence was directly forfeitable, to the extent that it was connected to the IPG scheme. The government subsequently filed a Bill of Particulars that not only alleged that the residence was directly forfeitable, but also that the bank accounts were too, notwithstanding the grand jury‘s findings.
Mr. Gordon later filed a motion to dismiss on the grounds that the government‘s forfeiture conduct violated his constitutional rights, and the district court scheduled a hearing on the issue of forfeiture. However, the case was reassigned to a different judge, who struck all of the scheduling dates, and after ordering a surreply from the government, denied Mr. Gordon‘s motion to dismiss.
The gravamen of Mr. Gordon‘s claim is that the government wrongfully placed common law impediments on his property and thereby prevented him from accessing funds necessary to pay for his counsel of choice, in violation of the Sixth Amendment. As best as we can tell, his argument plays out as follows. First, some of the “restrained” property was not directly forfeitable; rather, it was “substitute” property that was off-limits to the government unless and until he is convicted, per our decision in Jarvis.14
Second, even if his property was forfeitable, the applicable provisions of the criminal forfeiture statute,
At bottom, then, Mr. Gordon contends that, through its intentional and wrongful circumvention of the proper procedures for imposing pretrial restraints or impediments on his property, the government violated his Sixth Amendment right to counsel of choice. In making this argument, Mr. Gordon heavily relies on United States v. Stein, 435 F.Supp.2d 330 (S.D.N.Y. 2006). Specifically, he reasons, that like Stein, this case involves a situation where the government‘s wrongful conduct resulted in a total deprivation of his right to counsel of choice. We disagree. Even assuming arguendo that the government acted improperly in imposing pretrial restraints on his property, Mr. Gordon cannot establish that this conduct violated his Sixth Amendment rights.
In particular, Mr. Gordon‘s attempt to establish a Stein-type violation is unavailing. In Stein, the court considered whether the government‘s actions in “interfer[ing] with the . . . Defendants’ right to be represented as they choose, subject to the constraints imposed by the resources lawfully available to them,” violated their Sixth Amendment right to counsel and the right to a fair trial. 435 F.Supp.2d at 369; see id. at 360. The court concluded that the government‘s conduct in that case—which involved essentially convincing an employer to renege on prior legal-fee agreements with the defendants (its former employees)—violated the defendants’ rights because, among other reasons, the government had directly interfered with
On appeal, the Second Circuit affirmed the district court, concluding first that the district court properly considered “pre-indictment state action that affected defendants post-indictment,” even though the Sixth Amendment right to counsel attaches “only upon indictment.”16 United States v. Stein, 541 F.3d 130, 153 (2d Cir. 2008). More pertinently for this case, the Second Circuit agreed with the district court that the government‘s conduct violated the defendants’ right to counsel, insofar as it directly “intrude[d] on the attorney-client relationship.” Id. at 154.
However, even if Stein provided an appropriate guidepost in certain cases of governmental interference with the right to counsel of choice, Stein is patently distinguishable from the instant case. First of all, the Stein defendants had demonstrably “limited resources” and had made a showing that their trial strategy was diminished significantly by the government‘s conduct. See 435 F.Supp.2d at 371–72. Even though Mr. Gordon‘s assets may have been incidentally constricted by the government‘s conduct, he has not demonstrated that he was denied access to funds to pay for his defense in any substantial sense; certainly, he has not demonstrated a magnitude of financial deprivation anywhere close to that experienced by the Stein defendants.
As the district court found in denying his motion to dismiss the indictment,
[c]ontrary to Gordon‘s claims of financial hardship, he has paid defense counsel over $900,000 in attorneys’ fees and costs since being indicted. Additionally, the government has submitted a loan application from November 2006, wherein Gordon stated his net worth was over $8.8 million ($8,816,000), including $2.8 million in a CD and $398,000 in cash. Thus, irrespective of his allegations that the Government‘s preservation of assets prevented him from hiring counsel of his choice, Gordon has not established he lacks funding to secure defense counsel.
R., Vol. X, at 504–05 (Dist. Ct. Order, filed as sealed Feb. 8, 2010) (citation omitted).
We agree with the district court that Mr. Gordon has not shown that he “ha[d] no assets, other than those restrained, with which to retain private counsel.” See Jones, 160 F.3d at 647. Mr. Gordon does not meaningfully dispute that hе did have other resources to fund his defense, only noting in conclusory fashion that “he did not” have such resources, Aplt. Reply Br. at 14, and that “the Sixth Amendment guarantees him the right to use the assets he has lawfully available,” id. at 14 n. 3. This will not suffice.17
Furthermore, unlike Stein, it is quite significant that Mr. Gordon‘s counsel remained fully and actively engaged in the case throughout the entire trial court proceedings.18 Indeed, our searching review of the record demonstrates that Mr. Gordon was represented in a thorough and vigorous fashion by the attorney he originally retained. Mr. Gordon‘s allegations of prejudice come down to statements in which he suggests that “[p]reparing the defense to this action would require a team of experienced white collar and securities lawyers” who would have to sort through the thousands of documents prepared during the investigation—i.e., documents in his own war room. Id. at 16 (citation omitted) (internal quotation marks omitted). However, Mr. Gordon does not identify any concrete facts that would explain what was actually done in preparation for his defense and what additional steps his counsel would have taken, if Mr. Gordon had not been denied access to his funds through the government‘s allegedly wrongful conduct.
In light of the district court‘s findings regarding Mr. Gordon‘s access to considerable financial resources to pay his counsel, we will not engage in speculative ping-pong about the potential for harm to his defense resulting from the government-initiated restraints on his property—even assuming that those restrains were improperly imposed.19 See
B. Sufficiency of the Evidence
Mr. Gordon challenges the sufficiency of the evidence as to all of the substantive counts relating to the scheme to defraud with respect to the promotional campaigns for National Storm, Deep Rock, and Global Beverage. In addition, he challenges the counts that are predicated on the allegedly fraudulent nature of the opinion letters
“In reviewing the sufficiency of the evidence and denial of a motion for judgment of acquittal, this court reviews the record de novo to determine whether, viewing the evidence in the light most favorable to the government, any rational trier of fact could have found the defendant guilty of the crime beyond a reasonable doubt.” United States v. Irvin, 682 F.3d 1254, 1266 (10th Cir. 2012). In conducting this inquiry, the court may “not ‘weigh conflicting evidence.‘” Id. (quoting United States v. Evans, 318 F.3d 1011, 1018 (10th Cir. 2003)). Moreover, the “court considers the entire record, including both direct and circumstantial evidence, together with the reasonable inferences to be drawn from it.” United States v. Mendez, 514 F.3d 1035, 1041 (10th Cir. 2008).
1. The scheme to defraud
Mr. Gordon makes various arguments that challenge the sufficiency of the government‘s evidence regarding the counts associated with the charged scheme to defraud. First, without identifying the specific legal shortcomings of any particular count, he makes a global argument that “the fax blasts, e-mails and the brochures were [not] illegal,” Aplt. Opening Br. at 33, for the National Storm, Deep Rock and Global Beverage promotions under
However, as the government correctly notes, Mr. Gordon was not charged with violating
In support of this assertion, Mr. Gordon cites United States v. Schiff, 602 F.3d 152 (3d Cir. 2010), a Third Circuit case that affirmed the dismissal of multiple Rule 10b-5 charges upon the theory that a corporate executive had an affirmative fiduciary duty to correct material misstatements made by another executive. In concluding that the government‘s theory was too broad, the court in Schiff pointed out that § 10b gives rise to a duty to disclose in three separate and distinct circumstances: (1) where there is insider trading, (2) where a statute requires disclosure, or (3) where there has been an “inaccurate, incomplete or misleading prior disclosure.” 602 F.3d at 162 (quoting Oran v. Stafford, 226 F.3d 275, 285–86 (3d Cir. 2000)) (internal quotation marks omitted).
However, despite the holding in Schiff, “where a party without a duty elects to disclose material facts, he must speak fully and truthfully, and provide complete and non-misleading information.” Curshen, 372 Fed.Appx. at 880 (emphasis added); see also Schiff, 602 F.3d at 162 (“When you speak, however, and it is material, you are ‘bound to speak truthfully.‘” (quoting Shapiro v. UJB Fin. Corp., 964 F.2d 272, 282 (3d Cir. 1992))); Thomas Lee Hazen, The Law of Securities Regulation § 12.9[10], at 471–72 (6th ed. 2009) (“[O]nce a statement of fact . . . has been made, the person making the statement is then under a duty to correct any misstatements. . . .“).
In this case, the government offered substantial evidence that many aspects of the information disseminated in the promotional campaigns were false and misleading, and that misleading statements went uncorrected by numerous material omissions. See, e.g., R., Vol. VIII, at 3045–46 (noting that, despite an advertisement representing that “Wall Street expectations” were good for National Storm, the statement was incorrect and was made
Significantly, the evidence also tended to establish that there was a group of shareholders (of which Mr. Gordon was a part) who disguised their stake in the applicable stocks by using nominee accounts, and who fraudulently manipulated the price in order to make a profit, all at the expense of the general shareholders.21 See, e.g., id. at 3139–40 (noting that the “plan” as to Deep Rock “was to start the stock at four or five cents and gradually walk it up before the promotional effort started” and that the priming was “substantially . . . controlled“).
On this record, we conclude that any rational trier of fact could have found that
Finally, the government charged Mr. Gordon with a violation of
In any event, to establish “materiality” under
In other words, any rational trier of fact could have concluded that Mr. Gordon‘s denial was capable of influencing the SEC‘s investigation of the underlying scheme. See R., Vol. VIII, at 1777 (Investigator Draddy responding, “Absolutely” to the question, “Was the information about fax promotions for Deep Rock relevant [(and important)] to the SEC‘s investigation?“); see also United States v. Oldbear, 568 F.3d 814, 825 (10th Cir.2009) (holding that a false statement made to an FBI agent that the defendant had “no information” regarding the matter under investigation was “material” under
2. Legality of the opinion letters
Mr. Gordon also lodges a challenge to the sufficiency of the evidence with respect to the allegations that he prepared or endorsed “false” opinion letters for Deep Rock, National Storm, and IPG.24 According to Mr. Gordon,
Robert Bertsch never appeared to testify that the two opinion letters he wrote [for Ednet, the company IPG had merged with, and National Storm] were forgeries or that the companies he wrote about had not been formed at least two years earlier or that he had not deter-
mined that the shareholders listed in the opinion letters had not obtained their stock as Rule 144 required. Similarly, the opinion letter written by [Mr. Gordon] involved a company, Deep Rock, whose stock, the testimony established, had been distributed to numerous parties, many in the Clark family [and could thus be transferrable thrоugh “tacking“], more than a decade before. There was no evidence [Mr. Gordon] knew that any shares of stock ultimately traded as a result of his opinion letter should not have done so or that the opinion letter failed to qualify for theRule 144 exemption.
Aplt. Opening Br. at 34. These assertions, however, are refuted by the record. There was ample evidence for a rational jury to determine that the information in the opinion letters was false, and that Mr. Gordon knew it. In fact, there was evidence that he laid the groundwork for many of the false representations. See, e.g., R., Vol. VIII, at 1493 (“[Mr. Gordon] told me that I should go talk to a couple of my friends, offer them money, a thousand dollars a piece or something in that range, and ask them to do me a favor to say they were shareholders of the company.“); id. at 1303-07 (Trial Test. of Donald Clark, dated Apr. 13, 2010) (referencing a transfer document issued by Mr. Gordon‘s law office that purported to establish that Mr. Clark (as a shareholder-seller) had acquired Deep Rock shares “more than two years prior” despite the fact that Mr. Clark had never advised Mr. Gordon or anyone in his law office to this effect (internal quotation marks omitted)); id. at 1495 (stating that share transfer documents “were backdated to show that the shareholders owned the stock longer than they actually did, so upon becoming a public company those shares would be freely tradable to sell in the market“); id. at 1279 (Trial Test. of Tom Klenda, dated Apr. 13, 2010) (noting that, despite the fact that he was listed as trustee for a trust that owned 2,000,000 shares of Deep Rock stock, which Mr. Gordon indicated that he wanted to transfer in a
Mr. Gordon, under Proposition Four, also argues that the government‘s evidence regarding the IPG transaction was insufficient, and thus, “there is no wire fraud [as to Count 23].” Aplt. Opening Br. at 40. Specifically, he claims that the witness testimony established that the opinion letter prepared for IPG—along with backdated corporate documents that Mark White signed—was accurate, and that backdating corporate documents to bolster the letter was not illegal in this context.
“Conviction for wire fraud under
Even assuming, as a general proposition, that backdating corporate documents is not necessarily illegal, see generally United States v. Reyes, 577 F.3d 1069, 1073 (9th Cir.2009) (“Backdating is not itself illegal....“), the opinion letter that served as the basis for Count 23 in this case relied on more than mere backdated corporate records; it falsely represented
Given the reference to the shareholders actually providing the “advice” regarding their holding status, it is not surprising that the transfer agent was misled into issuing the non-restrictive legends for IPG. See R., Vol. VIII, at 1034-35 (Trial Test. of Jason Freeman, dated Apr. 12, 2010) (testifying that he relied on the representations made in the IPG opinion letter in order to “issue free-trading shares“). We are obliged when reviewing the sufficiency of the evidence to give the government the “reasonable inferences to be drawn from it.” Mendez, 514 F.3d at 1041. And here, the government offered evidence that Mr. Gordon intended to mislead by creating this letter and directing Mr. Bertsch to sign it. See R., Vol. VIII, at 1604 (answering, “Yes. It came from his office,” when asked, “Did Mr. Gordon have an understanding this was a false document when he sent it to you?“); id. (noting that Mr. Bertsch “sign[ed] a false opinion letter” in order to “complete the transaction“). Any rational trier of fact could have found the misrepresentations to be false and fraudulent. Cf. Cooper, 654 F.3d at 1118-19 (concluding that the evidence was sufficient to sustain a wire fraud conviction where the government presented
3. Attempted Obstruction of an Official Proceeding
Mr. Gordon also challenges Count 24, which charged him with a violation of
As we noted in Part I, supra, Mr. Singer gradually sold IPG shares on Mr. Gordon‘s behalf, and at one point in November 2005, wire-transferred roughly $1.7 million of the proceeds to “pay off the mortgage on [Mr. Gordon‘s] house.” R., Vol. VIII, at 1610. This allegedly fraudulent IPG-related conduct was the predicate for the government‘s forfeiture action regarding Mr. Gordon‘s house. According to Mr. Singer, around December 2007, Mr. Gordon directed him to endorse a false, backdated document that purported to memorialize a sale of IPG stock between Mr. Gordon and Mr. Singer. This sale supposedly took place in October 2005—prior to the November 2005 wire transfer—and the documents evinced a purchase price of approximately $1.9 million, an amount that somewhat exceeded, but was similar to, the wire-transfer amount of $1.7 million. Mr. Singer testified that, at Mr. Gordon‘s request, he returned to Mr. Gordon a signed copy of the purported agreement and a blank copy. Mr. Singer identified for the jury a record of a contemporaneous electronic communication from Mr. Gordon in which he informed Mr. Singer that he was “going to go w/unsigned version and let them no [sic] that the original [was] lost but this was the agreement.” R., Vol. VIII, at 1665 (internal quotation marks omitted). It is undisputed that the jury never heard evidence relative to whether Mr. Gordon ever presented either the signed or blank version of the purported purchase agreement to the government or in an official proceeding.27 Mr. Singer confirmed, how-
“Under
Mr. Gordon essentially makes two arguments. First, he argues that “[t]he testimony never established that any ‘official proceeding’ was set or even contemplated during this time [because the] in rem action against [the] residence ... [was] stayed” in November 2007 and remained so at the time the alleged “obstruction” occurred, and the product of the alleged acts was intended to be presented to governmеnt lawyers, not the court. Aplt. Reply Br. at 23. Second, he suggests that the evidence simply did not show that he is guilty under
“[O]fficial proceeding” in this context is defined as, inter alia, “a proceeding before a judge or court of the United States.”
Mr. Gordon did not specifically present these arguments in his opening brief; rather, he attempts to formulate them for the first time in his reply brief. It is well settled that “[t]his court does not ordinarily review issues raised for the first time in a reply brief.” Stump v. Gates, 211 F.3d 527, 533 (10th Cir.2000). Even then, the arguments are presented in a perfunctory and conclusory fashion, and we are rightly hesitant to definitively opine on such legally significant issues when they have received such cursory treatment. See, e.g., Cooper, 654 F.3d at 1128 (“It is well-settled that ‘[a]rguments inadequately briefed in the opening brief are waived.‘” (alteration in original) (quoting Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 679 (10th Cir.1998))). Consequently, to the extent that Mr. Gordon purports to raise these arguments as a separate basis for error, we conclude that they are waived.
Second, Mr. Gordon appears to contest whether the evidence actually showed that the creation of the false purchase agreement constituted an “obstruction,” where there was no evidence before the jury that the document was actually given to a government official or to the court. However, in addition to its substantive provisions,
“An attempt [generally] requires both (1) an ‘intent to commit the substantive offense,’ and (2) the ‘commission of an act which constitutes a substantial step towards commission of the substantive offense.‘” United States v. Washington (Deandre Washington), 653 F.3d 1251, 1264 (10th Cir.2011) (quoting United States v. Vigil, 523 F.3d 1258, 1267 (10th Cir.2008)); accord United States v. Irving, 665 F.3d 1184, 1195 (10th Cir.2011).
“A substantial step must be something more than mere preparation, yet may be less than the last act necessary before the actual commission of the substantive crime.” United States v. Fleming, 667 F.3d 1098, 1107 (10th Cir.2011) (quoting Deandre Washington, 653 F.3d at 1264) (internal quotation marks omitted). “The fact that further, major steps remain ‘before the crime can be completed does not preclude a finding that the steps already undertaken are substantial.‘” Irving, 665 F.3d at 1196 (quoting
Thus, the government was required to prove beyond a reasonable doubt (1) that Mr. Gordon intended to “corruptly” obstruct an official proceeding (here, the civil forfeiture proceeding), and (2) that he committed a substantial step toward the commission of the intended “obstruction.” Acting “corruptly” within the meaning of
Any rational trier of fact could have concluded that Mr. Gordon was guilty of attempting to violate
Any rational jury could have determined that the creation of these false documents was for the corrupt purpоse of redirecting the government, based upon false pretenses, away from property that it was trying to seize (i.e., Mr. Gordon‘s home) in an official proceeding and that Mr. Gordon could foresee that the document would have this effect. See Friske, 640 F.3d at 1293 (noting that, in making this showing, the government must establish that the “[defendant] knew that his actions were likely to affect a forfeiture proceeding“); United States v. Reich, 479 F.3d 179, 186 (2d Cir.2007) (concluding that the defendant had “failed to show that the evidence was insufficient to establish a nexus between his actions and obstruction of [a] proceeding” where he completed “[a] forged Order [that] appeared to render moot [a litigation opponent‘s] application to
Furthermore, any rational jury could conclude that the evidence sufficiently established that Mr. Gordon took a “substantial step” toward the obstruction. Mr. Singer‘s testimony suggested that Mr. Gordon intended to imminently use the false documents. See R., Vol. VIII, at 1665-66, 1668 (discussing text messages where Mr. Gordon implies that he was going to soon present a version of the unsigned (and false) document to the government after its receipt). As noted, even if “major steps remain,” a rational finder of fact may determine that the steps already completed are substantial. Irving, 665 F.3d at 1196; see Deandre Washington, 653 F.3d at 1266 (noting that a “substantial step” may be established even though “several steps ... remain before the planned [crime] ... [actually] take[s] place“).
More specifically, “[i]f the activity ha[s] proceeded to a further length, that is, if a tangible act which constituted proximate and tangible evidence of a real effort had emerged, the government‘s [charge] [is] more tenable.” Deandre Washington, 653 F.3d at 1265 (first and third alterations in original) (quoting United States v. Monholland, 607 F.2d 1311, 1317 (10th Cir.1979)) (internal quotation marks omitted). And we look to see whether the act or acts strongly corroborate the firmness of the defendant‘s intent to carry out the substantive offense. See Irving, 665 F.3d at 1198. Here, any rational finder of fact could have found that Mr. Gordon‘s direction to Mr. Singer to endorse a backdated share-purchase agreement and Mr. Gordon‘s actual creation of such an agreement (with Mr. Singer‘s help) amounted to a tangible act. And that this act strongly corroborated the firmness of Mr. Gordon‘s corrupt intent to obstruct an official proceeding. In particular, there was no evidence before the jury that Mr. Gordon expressed second thoughts about his corrupt plan, or in any other respect changed his mind about the criminal endeavor.
Unlike in Monholland, this is not a situation where a defendant just engaged in “mere abstract talk.” 607 F.2d at 1318; cf. Irving, 665 F.3d at 1200-01 (concluding that defendant‘s conduct, “viewed in the aggregate” amounted to more than abstract talk, where he “active[ly] solicit[ed]” an undercover agent to secure a killer for а murder-for-hire contract, achieved the “actual consummation of a murder-for-hire contract,” and took “concrete actions to facilitate the completion of the contract“). In responding to Mr. Gordon‘s motion for judgment of acquittal, the government forcefully hammered this point home:
[T]he fact that Mr. Gordon never lied to [the] court[] doesn‘t matter. The count alleges that he endeavored to obstruct justice. He endeavored, not by thinking about it, not by walking around and talking to himself about it ... but by doing something, by talking to Rick Singer about it, by sending him documents, and by instructing ... Rick Singer to backdate the document and create a false document [and that] is sufficient.
R., Vol. VIII, at 2378-79. Thus, taking account of all of the circumstances, we conclude that the government presented sufficient evidence for a rational factfinder to conclude that Mr. Gordon possessed the requisite corrupt intent to obstruct or impede an official proceeding and took a substantial step to accomplish that end. Accordingly, we reject Mr. Gordon‘s sufficiency-of-the-evidence challenge to his conviction of Count 24.28
Mr. Gordon complains that the district court erred in permitting the government to insinuate guilt by introducing evidence that infringed upon his Fifth Amendment right to remain silent. At trial, the government offered the testimony of Mr. Lindberg (over objection), which established that he and Mr. Gordon had discussed who should be permitted to testify in the proceedings before the SEC. Moreover, two witnesses—who were incidentally involved in the scheme—testified that Mr. Gordon advised them to take the Fifth Amendment. The testimony was offered to corroborate Mr. Lindberg‘s testimony that he and Mr. Gordon had essentially calculated a cover-up strategy. Mr. Gordon claims that this tactic tainted the invocation of his own Fifth Amendment right not to testify at trial, which he in fact exercised.
“We review a district court‘s evidentiary rulings for an abuse of discretion, considering the record as a whole.” United States v. Ledford, 443 F.3d 702, 707 (10th Cir.2005). However, “[w]e review de novo the extent of constitutional rights.” Jones, 160 F.3d at 645; see United States v. Rivas-Macias, 537 F.3d 1271, 1278 (10th Cir.2008) (“Whether an individual may properly invoke the privilege against self-incrimination is a question of law, which we review de novo.“); see also United States v. Bright, 596 F.3d 683, 690 (9th Cir.2010) (collecting cases and noting that it “review[s] de novo a district court‘s application of the Fifth Amendment privilege against self-incrimination“).
“The Fifth Amendment provides, in relevant part, that no person ‘shall be compelled in any criminal case to be a witness against himself.‘” United States v. Mike, 632 F.3d 686, 697 (10th Cir.2011) (quoting
Mr. Gordon contends that the government‘s evidence tainted his own invocation of the Fifth Amendment privilege during trial.29 He reasons that the evidence
Mr. Gordon has pointed to no statement in the record that comes close to meeting this standard. Instead, he simply asserts conclusorily that the government‘s conduct indirectly satisfies it. See Aplt. Opening Br. at 44 (“By its action, [the government] indirectly accomplished what has routinely been held justification for a mistrial—commenting on a defendant‘s right to remain silent.“). That is not enough. Cf. In re Martinez, 126 Fed.Appx. 890, 899 (10th Cir.2005) (“[Appellants] simply continue to assert a general Fifth Amendment claim that answering the certified questions would impinge on their rights against self-incrimination. This is insufficient to invoke the Fifth Amendment.“).
To the contrary, the evidence related to Mr. Gordon‘s discussions with others about their testimony in an SEC proceeding; it did not pertain to Mr. Gordon‘s invocation of his own Fifth Amendment right in his criminal trial. The Fifth Amendment prevents a prosecutor from “comment[ing] on the failure of the defendant to provide evidence,” or to speak. Rahseparian, 231 F.3d at 1274 (emphasis added); see United States v. Hamilton, 587 F.3d 1199, 1217 (10th Cir.2009). It does not prevent the evidence elicited in this case because that evidence did not reasonably (or necessarily) refer to Mr. Gordon‘s invocation of his own Fifth Amendment right not to testify. See Nelson, 450 F.3d at 1212 (“The general rule of law is that once a defendant invokes his right to remain silent, it is impermissible for the prosecution to refer to any Fifth Amendment rights which defendant exercised.” (quoting United States v. Burson, 952 F.2d 1196, 1201 (10th Cir.1991)) (internal quotation marks omitted)); see also United States v. Hanrahan, 508 F.3d 962, 968 (10th Cir.2007) (rejecting an argument that the prosecution‘s use of the defendant‘s prior testimony was in some way an effort to comment on his decision not to testify at the trial at which it was introduced, because the “prosecutor revealed nothing that ... would cause the jury to consider it a comment on [the defendant‘s] choice not to testify“). It is
D. Juror Dismissal
Mr. Gordon argues that the district court erred in excusing a petit juror without adequate cause. At trial, after the government rested its case, a member of the court‘s staff was informed by a juror that she wanted to serve as an alternate because her continued presence on the jury “could affect the outcome of the case.” R., Vol. VIII, at 2468. The juror further commented that, “perhaps” in light of her “take on personalities ... and [her] take on some of the bits of th[e] case ... [she] may be a roadblock.” Id. at 2478. After carefully conducting a one-on-one inquiry with each member of the panel—during which time the court asked whether this particular juror had made comments that could have contaminated the jury30—it decided, over Mr. Gordon‘s objection, that it would excuse her “out of an abundance of caution.” Id. at 2505.
“We have stated that the determination of ‘whether to excuse a juror rests on whether the juror can remain impartial.‘” United States v. Brothers, 438 F.3d 1068, 1071 (10th Cir.2006) (quoting United States v. Black, 369 F.3d 1171, 1176 (10th Cir.2004)), abrogated in part on other grounds as recognized in United States v. Soza, 643 F.3d 1289, 1291 (10th Cir.2011); see also United States v. Wood, 299 U.S. 123, 145-46 (1936) (“Impartiality is not a technical conception. It is a state of mind. For the ascertainment of this mental attitude of appropriate indifference, the Constitution lays down no particular tests and procedure is not chained to any ancient and artificial formula.“). “This rule is based on a defendant‘s
The district court has broad discretion in determining whether to excuse a juror for potential bias. See United States v. Bornfield, 145 F.3d 1123, 1132 (10th Cir.1998) (“It is well settled that the district court has broad discretion in determining how to handle allegations of juror bias.“); United States v. McIntyre, 997 F.2d 687, 697 (10th Cir.1993) (“Whether an individual is qualified to serve as a fair and impartial juror is a decision that is firmly within the discretion of the district court.“); see also Black, 369 F.3d at 1176. And the decision to dismiss—or not to dismiss—a juror is reviewed only for an abuse of discretion. See Black, 369 F.3d at 1176-77; see also Skilling v. United States, 561 U.S. 358, 386, 130 S. Ct. 2896, 2918, 177 L. Ed. 2d 619 (2010) (“Reviewing courts are properly resistant to second-guessing the trial judge‘s estimation of a juror‘s impartiality, for that judge‘s appraisal is ordinarily influenced by a host of factors impossible to capture fully in the record—among them, the prospective juror‘s inflection, sincerity, demeanor, candor, body language, and apprehension of duty.“); United States v. Bolden, 596 F.3d 976, 980-81 (8th Cir.2010) (affirming the district court‘s dismissal of a juror that was made largely out of an abundance of caution in light of the juror‘s brief conversation with the defendant‘s girlfriend); Bornfield, 145 F.3d at 1132-33 (affirming the district court‘s dismissal of a juror as an alternate
“Under the abuse of discretion standard, a trial court‘s decision will not be disturbed unless the appellate court has a definite and firm conviction that the lower court has made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances.” United States v. Chanthadara, 230 F.3d 1237, 1248 (10th Cir.2000) (quoting United States v. Thompson, 908 F.2d 648, 650 (10th Cir.1990)) (internal quotation marks omitted); cf. United States v. Warner, 498 F.3d 666, 689 (7th Cir.2007) (“[A] district court abuses its discretion in the context of juror removal only if the juror was discharged without factual support or for a legally irrelevant reason.” (quoting United States v. Edwards, 303 F.3d 606, 631 (5th Cir.2002))). Compare Brothers, 438 F.3d at 1071-72 (applying an abuse-of-discretion standard to the district court‘s decision to remove a juror for cause), with Black, 369 F.3d at 1176-77 (applying an abuse-of-discretion standard to the district court‘s decision not to remove a juror for medical reasons).
Mr. Gordon contends that the district court essentially lacked good cause for excusing the juror. However, we need not address whether the district court erred in discharging the juror. Even if it did so, we will not reverse “unless it resulted in prejudice to the defendant.” Brothers, 438 F.3d at 1072; see 2 Charles Alan Wright & Peter J. Henning, Federal Practice and Procedure § 388, at 659 (4th ed. 2009) (“Defendant is entitled to a new trial because of the substitution of an alternate juror prior to the start of deliberations only if he can demonstrate that he was prejudiced by the substitution.” (emphasis added)); id. at 659 n. 22 (collecting cases); see also id. at 659-60 (noting that, in showing prejudice, “it is not enough that the juror who was excused was thought by the defendant to be biased in his favor“). And we conclude that there was no such prejudice to Mr. Gordon.
Here, the juror in question “gave no indication [as to] which side she favored,” Aplee. Br. at 59, and Mr. Gordon “fails to point to any concrete factor that moves [his] assertion [of prejudice] beyond the realm of mere speculation,” Brothers, 438 F.3d at 1073. More specifically, although Mr. Gordon suggests that he was denied the participation of a “highly conscientious juror,” he fails to demonstrate that the remaining jurors were not just as conscientious or fair. See Brothers, 438 F.3d at 1072 (“[T]here is no indication that the court‘s replacement of the juror in question with an alternate juror resulted in a biased jury or an otherwise unfair trial.“); see also United States v. Thompson, 528 F.3d 110, 121 (2d Cir.2008) (“[The defendant] points to no evidence that the substitution [of a juror] created bias or prejudiced his defense.“); United States v. Vega, 72 F.3d 507, 512 (7th Cir.1995) (“[W]e will not overturn a conviction for a Rule 24(c) violation unless appellant can show prejudice.“). And Mr. Gordon offers no allegation, much less any evidence, that the resulting juror pool was tainted or otherwise adversely affected. See United States v. Bradley, 644 F.3d 1213, 1282 (11th Cir.2011) (“Conjecture about the impact the replacement of a juror had on the jury‘s verdicts is ... insufficient evidence of prejudice.“). For these reasons, we reject his claim related to the district court‘s dismissal of the juror.
E. Speedy Trial Act
Mr. Gordon contends that certain provisions of the Speedy Trial Act,
As alluded to in Part I, supra, on February 26, 2009, the government filed an unopposed motion to declare the case complex pursuant to the provisions of
After the case was reassigned to another district court judge (i.e., Judge Payne), he struck the pretrial conference and January 19th trial date. On March 17, 2010, Mr. Gordon filed a motion to dismiss under the Speedy Trial Act, arguing that the continuances in the case were inadequately explained and were not supported by a basis for exclusion under the Act. The court denied this motion, and the trial began on April 5, 2010.
“The Speedy Trial Act ... requires that a criminal defendant‘s trial commence within 70 days after he is charged or makes an initial appearance, whichever is later....” 32 Bloate v. United States, 559 U.S. 196, 130 S. Ct. 1345, 1349, 176 L. Ed. 2d 54 (2010); accord United States v. Larson, 627 F.3d 1198, 1203 (10th Cir.2010). The Act excludes “certain enumerated events” from this time period. Bloate, 130 S. Ct. at 1349 (discussing
We review the district court‘s decision to grant a continuance for the “ends of justice” for an abuse of discretion. See United_States_v._Toombs, 574 F.3d 1262, 1268 (10th Cir.2009) (“We apply an abuse of discretion standard to a district court‘s decision to grant an ends-of-justice continuance....” (quoting United States v. Gonzales, 137 F.3d 1431, 1433 (10th Cir.1998)) (internal quotation marks omitted)). “This court [otherwise] reviews de novo ... the district court‘s compliance with the legal requirements of the Speedy Trial Act.” Id.
In this case, the district court‘s original order granting the government‘s request for a continuance noted the voluminous discovery in the case, including documents detailing the hundreds of financial transactions that formed the basis for the charges. Further, the government‘s motion set forth in detail the hundreds of thousands of documents that needed to be catalogued and separated, so that the parties could “identify[]” the relevant ones. R., Vol. I, at 105 (Unopposed Mot. of United States to Declare this Case a Complex Matter, filed Feb. 26, 2009). We conclude that the district court‘s findings were sufficient to justify the ends-of-justice continuance up to January 19, 2010, because it is obvious “what factors [it] relied upon in making its determination.” Larson, 627 F.3d at 1206; cf. id. (concluding that the ends-of-justice continuаnce was inadequate where the district court did not make clear the factors it relied upon in making its determination).
Indeed, the record is clear that the district court‘s decision was based on the fact that the transactional evidence was extensive and complex, and that it would take additional time to sufficiently analyze and organize the evidence before trial. These facts were identified both in the court‘s order, see, e.g., R., Vol. I, at 118 (“In this case, the number of defendants, the voluminous discovery [previously referenced in the order] and the ongoing nature of the investigation render the matter so complex as to warrant the grant of an ends-of-justice continuance....“), and by reference to the government‘s motion, see, e.g., id. at 104-05; cf. Toombs, 574 F.3d at 1271 (“[T]he district court need not articulate facts that are obvious and set forth in the motion to continue in granting an ends-of-justice continuance.“).
While we have previously held that “[s]imply identifying an event, and adding the conclusory statement that the event requires more time for counsel to prepare, is not enough,” Toombs, 574 F.3d at 1271-72, the district court‘s findings here explained “why the mere occurrence of the event identified ... necessitat[ed] the continuance,” id. at 1271, and it is “clear from the record that the trial court struck the proper balance [under the Speedy Trial Act] when it granted the continuance,”33 Larson, 627 F.3d at 1206 (quoting United States v. Williams, 511 F.3d 1044, 1056 (10th Cir.2007)) (internal quotation marks omitted); see United States v. O‘Connor, 656 F.3d 630, 639-40 (7th Cir.2011) (read-
Finally, from the record, it appears that much of the time between January 19, and April 5, 2010, was excludable under the Act because of pending motions and due to Mr. Gordon‘s filing of an interlocutory appeal. As a threshold matter, Mr. Gordon has short-changed this portion of the analysis. Notably, he broadly claims in a conclusory and unsupported fashion that a total of 240 days passed “when no motions had been filed and no adequate justification had been given for the ... delay.” Aplt. Opening Br. at 49. But he does not adequately identify whether this argument relates to any of the allegedly non-excludable days between January 19, and April 5, 2010, or only the period before that. Because it is not cleаr whether Mr. Gordon is specifically challenging the time period after January 19—viz., the time after the first ends-of-justice continuance ended—we would be well within our discretion to reject any of his nonspecific, unsupported assertions when considering this period. See Burrell, 603 F.3d at 835.
In any event, even were we to focus on the period from January 19 to April 5, 2010, Mr. Gordon would not be entitled to relief. The Act excludes periods of delay “resulting from any interlocutory appeal,”
For the foregoing reasons, Mr. Gordon has not shown a violation of the Speedy Trial Act.
F. Sentencing
Mr. Gordon lodges numerous challenges to his sentence, specifically relating to the district court‘s loss and gain calculations and its imposition of joint and several liability for the illicit stock sales. Broadly, Mr. Gordon appears to make two, separate procedural challenges to his sentence. First, he contends that the district court inappropriately based its measure of harm in this case “exclusively on the differences in the cost of the four stocks purchased by a group of persons oftentimes loosely linked to [him] and the amount each of those various parties sold their stock for,” Aplt. Opening Br. at 51, and failed to take into consideration “other economic factors unrelated to the defendant‘s fraudulent activity that may have caused the stock to increase or decrease,” id. at 52.35 This, he reasons, was “procedural error” in the determination of his sentence, insofar as it concerns the application of the twenty-two-level enhancement under
“[S]entencеs are reviewed ‘under an abuse of discretion standard for procedural and substantive reasonableness.‘” United States v. Snow, 663 F.3d 1156, 1160 (10th Cir.2011) (quoting United States v. Washington (Wildor Washington), 634 F.3d 1180, 1184 (10th Cir.2011)). “[W]e review the district court‘s legal conclusions de novo and its factual conclusions for clear error.” Gallant, 537 F.3d at 1234. “A sentence is procedurally unreasonable if the district court incorrectly calculates or fails to calculate the Guidelines sentence, treats the Guidelines as mandatory, fails to consider the [
1. Section 2B1.1(b)(1)
In this case, the district court determined that it would be too difficult to determine the actual losses suffered by each individual investor affected by the conspirators’ manipulation scheme. Thus, consistent with
In calculating the loss estimates, the court utilized two separate methods. First, it subtracted the average price of each stock after disclosure of the fraud from the stock‘s average price during the promotional period. Then, it multiplied by the total number of shares sold. This method yielded a loss estimate of $55,150,000. Alternatively, the court subtracted the inherent value of the stocks from their average value during the promotional period, yielding a loss estimate of $47,240,000.36
The court then went on to calculate the total conspiratoriаl gain from the manipulation of National Storm, Deep Rock, and Global Beverage to be $43,927,809.95, and Mr. Gordon‘s gain attributable to sales of IPG to be $2,714,504,37 and determined that those calculations corresponded to the loss estimates, see Snow, 663 F.3d at 1161 (“The defendant‘s gain may be used only as an alternate estimate of ... loss; it may not support an enhancement on its own if there is no actual or intended loss to the victims.” (quoting Wildor Washington, 634 F.3d at 1184) (internal quotation marks omitted)). We have endorsed the base approach utilized by the district court in analogous contexts—viz., using gain as an alternative measure of loss where loss cannot be reliably ascertained, provided that the court first makes a reasonable estimate of loss. See United States v. Galloway, 509 F.3d 1246, 1252 (10th Cir.2007) (“[B]efore using gain as an alternate estimate of loss, the district court must first estimate the actual and intended loss due to a defendant‘s fraudulent conduct, and then consider whether the defendant‘s gain is a reasonable estimate of the actual or intended loss.“); cf. Gallant, 537 F.3d at 1236-38 (holding that the district court improperly failed to calculate reasonable estimates of loss in arriving at an alternative gain figure in a financial-fraud scheme).
In Nacchio, we held that, when calculating a gain amount under the Guidelines in insider trading cases, the district court should utilize “[a]n approach that focuses on arriving at a figure that approximates the gain specifically resulting from [the] offense,” which necessitates an inquiry into “the myriad of factors unrelated to [the] criminal fraud that could have contributed to the increase in the value of the securities.” 573 F.3d at 1074 (emphasis added). More specifically, we held that “district courts must undertake ‘thorough analyses grounded in economic reality.‘” Id. at 1086 (quoting Olis, 429 F.3d at 547). Here, in arriving at its conclusions, the district court explicitly cited Nacchio, and stated that it was in fact considering the “economic reality” of the transactions at issue in its underlying analysis. See R., Vol. VIII, at 2795 (applying “[m]ultiple methods of calculating loss ... [which we]re rooted in ‘economic reality‘“). Mr. Gordon concedes as much. See Aplt. Reply Br. at 28 (“Appellant acknowledges the district court stated at sentencing [that] it had considered this court‘s sentencing factors for a securities fraud case in [Nacchio].“).
To be sure, the district court did not explain how any of the extraneous factors that Mr. Gordon identifies on appeal affected the stock sales of National Storm, Deep Rock, and Global Beverage.39 How-
Significantly, in Nacchio, we suggested that unrelated market events were material only insofar as they “c[ould] be identified” and assessed. See id. In this re-
In any event, even if the district court committed some error, as the government argues, it would be harmless. See Aplee. Br. at 64 (“In any event, the loss calculation did not affect Gordon‘s sentence.“). Although Mr. Gordon points to some factors that the district court conceivably could have considered, he does not explain how those factors would have materially affected the district court‘s sentencing calculations. In this vein, the district court found that the government had made an adequate showing of the conspiratorial
2. Joint Liability and Relevant Conduct
Mr. Gordon also contends that the district court should have held him responsible at most for his own trading profits, and not the profits linked to other alleged co-conspirators. In that respect, he argues that “this is a good case for the court to find that the damage calculation should be individual, rather than joint.” Aplt. Opening Br. at 54.
Our review of the record demonstrates that Mr. Gordon did raise a version of this argument below, though he certainly has not helped himself in his cursory treatment of the issue on appeal. In any event, we may easily dispose of Mr. Gordon‘s challenge to the district court‘s decision to attribute to him the gains of alleged co-conspirators in determining his offense level under
Application Note 3(B) to
Thus, to the extent that Mr. Gordon contests as a matter of law the district court‘s use of a joint calculation in computing his gain, his argument lacks merit. Indeed, courts have consistently held that reasonably foreseeable gains attributable to co-conspirators’ acts are properly tabulated in
G. Final Order of Forfeiture
Mr. Gordon lastly argues that the district court failed to follow the dictates of
On January 11, 2011, upon the government‘s motion, the district court ordered the forfeiture of various interests Mr. Gordon held in real property and financial instruments as “substitute property” pursuant to Federal Rule of Criminal Procedure 32.2 and
as a result of an act or omission of the defendant [the forfeited property]—(A) cannot be located upon the exercise of due diligence; (B) has been transferred or sold to, or deposited with, a third party; (C) has been placed beyond the jurisdiction of the court; (D) has been substantially diminished in value; or (E) has been commingled with other property which cannot be divided without difficulty.
In support of its second motion for forfeiture, the government offered the affidavit of Litigation Financial Analyst William Robert Taylor, who averred that he had conducted a full financial investigation of Mr. Gordon‘s business and personal accounts. Section 853(p)(1), by its express terms, permits the forfeiture of substitute assets, when directly traceable assets cannot be located despite the exercise of due diligence, because of an act or omission of the defendant. See, e.g., Bornfield, 145 F.3d at 1139 (“The substitute assets provision allows the forfeiture of other assets not already forfeitable when the forfeitable asset is unavailable due to some act or omission of the defendant.“). Mr. Taylor specifically averred that “[d]ue to acts or omissions of [Mr. Gordon], additional property directly traceable to the conspiracy ... is unavailable for forfeiture.” R., Vol. VI, at 1101 (Aff. of William Robert Taylor, signed Nov. 19, 2010). Similarly, the affidavit set forth that law enforcement personnel “have been unable to locate, through the exercise of due diligence, any other assets ... that are traceable to the offenses.” Id. at 1101-02.
Because the directly forfeitable “assets” previously identified consisted largely of a now uncontested money judgment, and the money could not be found in Mr. Gordon‘s accounts, it was reasonable for Mr. Taylor to infer, and the district court to find, that the money was dissipated due to Mr. Gordon‘s conduct. Indeed, given the transactional nature of a large-scale securities fraud conspiracy, vast sums of money are easily transferred or hidden. The evidence in this case demonstrated that, as part of the conspiratorial plan, funds used to purchase stocks were frequently decentralized and concealed.
“The Government generally has little difficulty in making the necessary showing [under
Mr. Gordon further contends that the district court erred in finding in its preliminary orders of forfeiture that the government had satisfied the requirements of
Contrary to Mr. Gordon‘s suggestions, the Gordon residence was not ordered forfeited entirely as “substitute property.” Rather, the court found $1,702,000 of equity in the home directly forfeitable under
III. Conclusion
For the foregoing reasons, we AFFIRM Mr. Gordon‘s conviction and sentence, including the district court‘s orders of forfeiture.
Notes
A pump and dump scheme involves the artificial manipulation of the price and volume of a particular stock in order to later sell that stock at an artificially inflated price. Generally, the perpetrators of a pump and dump scheme obtain control over a substantial portion of free trading shares of the company. Free trading shares are shares of stock that the owner can trade without restriction on a national exchange, e.g., the New York Stock Exchange or NASDAQ, or are traded in the over-the-counter market via the Pink Sheets. To obtain the free trading shares, the perpetrators may orchestrate a reverse merger, which occurs when a privately held company with no publicly traded stock merges with a publicly listed shell company that has no assets or revenue but has stock available for public trading, resulting in a public company. The pump usually involves artificially inflating a company‘s stock price by engaging in coordinated trading of the stock in order to create the appearance of a more active market for that stock. The pump also usually involves disseminating false and misleading promotional materials—unsolicited advertisements touting a particular stock and encouraging others to purchase the stock, which are often sent to millions of recipients by fax or email “blasts.” After pumping the stock, the perpetrators dump their shares, meaning they sell large volumes of the shares that they own and control to unsuspecting investors. The dumping often occurs soon after the dissemination of the promotional materials touting the particular company. The perpetrators of a pump and dump scheme will often “park” their shares by depositing or transferring them into different accounts, including nominees’ accounts, and then trade the manipulated stock using the different accounts in order to conceal their trading activity.
R., Vol. I, at 55–56 (Indictment, filed Jan. 15, 2009).To the extent that there are arguments in Mr. Gordon‘s trial briefing that he has failed to press on appeal, we will not accord him the benefit of those arguments, despite his apparent request for a complete incorporation of his trial briefings, see, e.g., Aplt. Opening Br. at 22 (“In this case, Appellee totally ignored the provisions of
Here, Mr. Gordon “was represented by his counsel of choice through the end of trial,” Aplee. Br. at 38, and the record clearly suggests that he had other available assets—including the equity in his home above the $1.7 million, which was the amount the government focused on in imposing the impediment on the Gordon residence—but did not elect to use those resources, see id.; R., Vol. X, at 281 (Letter from Steven A. Tyrrell to Thomas O. Gorman & William McGrath, dated Oct. 29, 2009) (setting forth the government‘s position that it was “amenable to any mortgage that would allow equity in [Mr. Gordon‘s home] over and above the amount of traceable proceeds to be used for attorney fees“). Mr. Gordon claims that the government‘s offer to make additional equity in his residence available for funding was essentially hollow in light of the fact that it asserted “open-ended claims” against his property, making it unlikely that a lender would provide a mortgage. See Aplt. Reply Br. at 4 n. 1. But he provides no explanation for why this would necessarily be the case if the government‘s interest—if any—in the property was only (at most) $1.7 million.
This approach has merit. Where the right to counsel of choice is not fully denied, but rather the situation is that counsel‘s representation may have been constrained or limited by some external governmental factor (as is alleged here), the crux of the dеfendant‘s claim is really that he has been denied the right to constitutionally effective representation. Cf. Gonzalez-Lopez, 548 U.S. at 148 (warning against “confus[ing] the right to counsel of choice—which is the right to a particular lawyer regardless of comparative effectiveness—with the right to effective counsel—which imposes a baseline requirement of competence on whatever lawyer is chosen or appointed“). Ordinarily, a defendant cannot establish a Sixth Amendment violation based upon deficient performance “until the defendant is prejudiced.” Id. at 147; see United States v. Gaya, 647 F.3d 634, 638–39 (7th Cir. 2011) (“The defendant who has a lawyer, even an incompetent one, must to establish a violation of his constitutional right to effective assistance of counsel prove that he was prejudiced by the lawyer‘s incompetence. . . .“); United States v. Lewis, 611 F.3d 1172, 1177 (9th Cir. 2010) (“Defendant fails to identify any actual prejudice that occurred as a result of being represented by other counsel, who mounted a highly competent and vigorous defense.“); cf. United States v. Morrison, 449 U.S. 361, 365 (1981) (“The premise of our prior cases is that the constitutional infringement identified has had or threatens some adverse effect upon the effectiveness of counsel‘s representation or has produced some other prejudice to the defense. Absent such impact . . . there is no basis for imposing a remedy in that proceeding. . . .“).
He also makes a general contention that the use of nominee accounts was not illegal, and it was not improper to engage in “[t]imed sequences of buying and selling” in the stocks at issue. Aplt. Reply Br. at 19 (discussing evidence that suggested Pink Sheet stocks are often made up of a small group of investors). However, even assuming that the buying and selling of stock by a small group of individuals is not per se illegal, Mr. Gordon does not explain how it necessarily follows that the same is true where the transactional purpose is to create the false appearance of an active market for the shares in order to induce people to rely on that impression and buy the stock. And the testimony at trial tended to establish that these were the reasons for many of the conspirators’ nominee accounts, promotional campaigns, and the transaction sequences. See, e.g., R., Vol. VIII, at 3140–42 (suggesting as much with respect to Deep Rock).