Lead Opinion
Opinion by Judge MCKEOWN; Concurrence by Judge REINHARDT.
This appeal stems from a massive fraud scheme that resulted in protracted civil and criminal proceedings spanning more than ten years. John A. Hickey (“Hickey”) and his business partner, Mamie Tang (“Tang”), induced over 700 individuals to invest approximately $20 million in two real estate development funds. Their plan was to purchase land in Northern California, prepare the land for residential development, and then resell the properties to developers at а profit. As it turned out, however, the investors were duped by false representations regarding land title, guarantees, and securitization of the funds. Forensic accounting also showed that Hickey and Tang appropriated money from the funds for personal use.
As the investment scam progressed, it devolved into a Ponzi scheme. Hickey used the money from later investors to pay earlier investors the “interest” they were owed. When the money ran out and the fraud was exposed, the investors had lost approximately $18.5 million.
When the investment scheme fell apart in mid-1994, the Securities and Exchange Commission (“SEC”) filed a civil enforcement action against Hickey, resulting in a consent decree that included a $1.1 million disgorgement payment. The investors also obtained an as-yet-unpaid $10 million civil judgment. Hickey was indicted in July 1997.
Hickey challenges his conviction for mail fraud and securities fraud on multiple grounds, including jurisdiction, statute of limitations, and claimed evidentiary errors. He also appeals his 97-month sentence. We affirm his conviction and sentence.
Analysis
I. Jurisdiction
We consider first whether the district court lost jurisdiction to proceed because of Hickey’s two interlocutory appeals to this court related to double jeopardy. Hickey asserts that his conviction must be reversed because the district court was without jurisdiction to conduct pretrial proceedings and trial. This argument stems from the general рroposition that “[o]rdinarily, if a defendant’s interlocutory claim is considered immediately appealable ..., the district court loses its power to proceed from the time the defendant files its notice of appeal until the appeal is resolved.” See United States v. Claiborne,
We turn to Hickey’s first interlocutory appeal. Hickey filed a motion tо dismiss on the ground that trying him criminally after the SEC civil enforcement action would amount to double jeopardy. Although the district judge originally assigned to the case, Judge Chesney, ruled in March 2002 that there was no double jeopardy problem with trying Hickey criminally, she declined to find that Hickey’s double jeopardy claim was frivolous, which allowed Hickey to immediately appeal to this court. See Abney v. United States,
On April 30, 2004, we dismissed Hickey’s appeal for lack of appellate jurisdiction because his double jeopardy claim was not colorable. United States v. Hickey,
Meanwhile, in February 2004, Judge Alsup took over the case and, in the fall of that year, Hickey obtained new counsel. On December 14, 2004, Judge Alsup found that Hickey’s double jeopardy claim was frivolous and ruled that the district court retained jurisdiction to proceed despite the recall of the mandate. Hickey then filed his seсond interlocutory appeal, this time challenging the December 14, 2004 ruling. This second interlocutory appeal was consolidated with Hickey’s post-conviction appeal and is now before us. Hickey argues that not only did the district court lack jurisdiction between the time the mandate was recalled and reissued- — October 18, 2004-May 27, 2005 — but that it also lacked jurisdiction to try him because his second interlocutory appeal — challenging the December 14, 2004 jurisdictional ruling — was still pending during his trial. Although the district court heard some pretrial matters during the period between the mandate being recalled and then reissued, the case did not proceed to trial until well after the mandate had been reissued.
As we noted in Claiborne, the notion that a pending appeal strips the trial court of jurisdiction is a judicially-crafted rule designed “to avoid confusion or waste of time resulting from having the same issues before two courts at the same time.”
The period relating to Hickey’s first interlocutory appeal involved only pretrial matters and thus closely mirrors the scenario in Claiborne, in which the trial judge issued pre-trial rulings while an interloсutory appeal was pending. Although Hickey challenges the court’s jurisdiction to continue with pretrial matters, he offers no specifics and claims no prejudice. The reality is that the district court in Hickey’s case made no pathbreaking rulings during this period. A review of the trial court docket sheet reveals that most of October 2004-May 2005 was taken up with scheduling and case management matters, counsel substitution and payment issues, and a plan for the identificatiоn of experts. Hickey contested none of these rulings when he proceeded to trial.
Like Claiborne, because Hickey’s interlocutory appeal was ultimately a losing one, any claimed error in proceeding with limited pretrial matters was harmless and “no useful purpose would be served by requiring that court to redecide the pretrial motions.” Id. at 851. We decline to apply the divestiture rule in a slavish manner that ignores the reality of what happened in the trial сourt.
Although the error was harmless in this case, we want to impress upon district courts that acting before the mandate hás issued or after the mandate has been recalled risks acting without jurisdiction and wasting judicial resources. See United States v. DeFries,
Hickey’s effort to supplant the district court’s jurisdiction through his second interlocutory appeal fares no better. The district court’s December 14, 2004 ruling that it had jurisdiction to proceed with pretrial matters was not subject to inter
II. Speedy Trial Act
Hickey claims that his Speedy Tidal Act rights were violated because the district court retroactively excluded time from the Speedy Trial Act “clock,” resulting in his trial beginning after the 70-day limitation period. When Hickey was initially brought befоre a magistrate judge on July 17, 1997, the magistrate granted an “ends of justice” continuance under 18 U.S.C. § 3161(h)(7)(A), which excluded time from July 17, 1997, through August 12, 1997. Although the parties dispute whether there was a violation of the Speedy Trial Act, we do not need to figure out the timing details because Hickey acknowledges that there is no error if this stop clock period is credited.
The “ends of justice” exclusion of time under the Speedy Trial Act requires the court to “set[ ] forth, in the record of the cаse, either orally or in writing, its reasons for finding that the ends of justice served by granting such continuance outweigh the best interests of the public and the defendant in a speedy trial.” 18 U.S.C. § 3161(h)(7)(A). Among other factors, the court must consider “[w]hether the case is so unusual or so complex, due to the number of defendants, the nature of the prosecution, or the existence of novel questions of fact or law, that it is unreasonable to expect adequate preparatiоn for pretrial proceedings or for the trial itself within the time limits established by this section.” 18 U.S.C. § 3161(h)(7)(B)(ii). In the order excluding time, the magistrate stated that Hickey’s “counsel cannot reasonably be expected to be ready for trial within the Speedy Trial Act’s seventy day period” because the 77-page indictment charged Hickey with “massive fraudulent securities offerings and with misapplying and embezzling a substantial portion of the $20,000,000 raised in those offerings.”
Despite these findings, Hickey argued to the district court that the magistrate judge had failed to properly justify the continuance. In response and out of caution, the district court asked the magistrate judge to clarify his earlier findings, which he did in detail, consistent with his initial ruling. Because the magistrate judge did, in fact, consider the statutory factors in granting an “ends of justice” exclusion, allowing the magistrate to clarify those findings was not in error: “ ‘[Simultaneous [‘ends of justice’] findings [are] unnecessary so long as the trial court later shows that the delay was motivated by proper considerations.’ ” United States v. Ramirez-Cortez,
III. Superseding Indictments and the Statute of Limitations
Four indictments were filed against Hickey. Hickey was originally in-
The answer to Hickey’s challenge is found in our precedent on tolling and indictments. It is well accepted that an indictment tolls the statute of limitations as to all charges contained in the indictment. United States v. Clawson,
It follows from these cases that so long as the original indictment remains pending, a superseding indictment that omits a charge contained in the first indictment does not stop the tolling of the statute of limitations as to that charge. The central question is whether Hickey was fairly on notice of the charges. As we explained in Pacheco,
Notice to the defendant is the central policy underlying the statutes of limitation. If the allegations and charges are substantially the same in the old аnd new indictments, the assumption is that the defendant has been placed on notice of the charges against him. That is, he knows that he will be called to account for certain activities and should prepare a defense.
Apart from the fact that an indictment is pending until dismissed, here the intervening indictments contained the same factual allegations as the original indictment. Although the third superseding indictment reincorporated securities fraud allegations, it did not brоaden or substantially amend the original indictment. Italiano, 894 F.2d at 1282 (“A superseding indictment brought after the statute of limitations has expired is valid so long as the original indictment is still pending and was timely and the superseding indictment does not broaden or substantially amend the original charges.”).
Hickey’s assertion that a superseding indictment that omits a charge against a defendant is essentially the same as dismissing that charge is inconsistent with criminal procedure. Under Federal Rule of Criminal Procedure 48(a), “the government may, with leave of the court, dismiss an indictment .... ” (emphasis added). The requirement that the government obtain leave of the court to dismiss would be superfluous if the government could, in effect, dismiss a charge by simply omitting it from a subsequent indictment. Hickey’s theory is premised on the view that the initial charges were no longer pending and had been “dropped” once they were omitted from the subsequent indictment. There is, however, no intermediate status
Our conclusion is сonsistent with case law from our sister circuits holding that the government may elect to proceed on any pending indictment, whether it is the most recently returned superseding indictment or a prior indictment. See, e.g., in addition to the Eleventh Circuit’s opinion in Italiano cited above, United States v. Walker,
IY. Trial Issues
A. Exclusion of Expert Testimony
Hickey’s expert witness, Stephen Roulac, testified at length about real estate finance — about the topic generally, market conditions, the reasonableness of Hickey’s plan for the funds, whether the amount of money Hickey raised was reasonable given his stated plan, and whether the plan was likely to succeed. However, the district court barred him from testifying that he believed that if the SEC had not intervened, Hickey’s investments wоuld have been profitable and the investors would not have lost money. Hickey urges that this testimony would have established that he did not have an intent to defraud investors.
The district court did not abuse its discretion in excluding this limited portion of Roulac’s proffered expert testimony. See United States v. Prime,
B. Jury Instructions
Hickey argues that the district court “impermissibly invaded the province of the jury” by giving instructions that allowed the jury to convict Hickey even if the prosecution did not prove mens rea, and that the court compounded this рroblem by refusing to give a good faith instruction.
Hickey takes three individual jury instructions out of context and insists that they misstate the law, ignoring our case law that “ ‘[i]n reviewing jury instructions, the relevant inquiry is whether the instructions as a whole are misleading or inadequate to guide the jury’s deliberation.’” United States v. Garcia-Rivera,
The district court gave a proper mens rea instruction and it was clear that, in order to convict, the jury was required to find that Hickеy had the requisite intent. Nothing in the jury instructions Hickey finds objectionable negates the mens rea instruction. Those instructions simply stated the law and did not relieve the government of its burden.
Hickey’s related argument that he was entitled to a separate “good faith” instruction, in addition to the district court’s other instructions on specific intent, is foreclosed by Ninth Circuit precedent: “[o]ur case law is well settled that a criminal defendant has no right to any good faith instruction when the jury has been adеquately instructed with regard to the intent required to be found guilty of the crime charged....” United States v. Shipsey,
Y. Sentencing
Hickey offers four separate grounds to overturn his sentence, none of which we embrace. Hickey argues the district court improperly applied a presumption that a within-guidelines sentence was reasonable. See Gall v. United States,
Hickey argues that his sentence will result in a significant overpayment to investors because the total amount of restitution he and Tang were ordered to pay exceeds the amount of loss by investors, less the disgorgement payment Hickey already made — $17,454,581. Tang was ordered to pay $12,266,090, and Hickey was ordered to pay $17,454,000. However, Tang and Hickey were ordered to pay joint and several restitution, a рoint that Hickey ignores in his brief, and hence there will be no windfall to investors.
The district court ordered Hickey to pay restitution of $5,000 per quarter while incarcerated and $500,000 per month upon release. Hickey did not object to the restitution schedule at trial, so we review district court’s finding for plain error. See United States v. Zink,
AFFIRMED.
Notes
. In addition to the statute of limitations argument discussed below, Hickey also claims that none of the conduct that resulted in his conviction for securities fraud relating to Fund I occurred within the five year statutory period before July 16, 1997, rendering his
. This court, however, has declined to adopt a presumption of reasonableness for within-guidelines sentences on appellate review. See United States v. Carty,
Concurrence Opinion
concurring:
I reluctantly concur in Judge McKeown’s opinion. I recognize that, under the precedent cited in the opinion, both in and out-of-circuit, “superseding” has been given a meaning in the context of a criminal indictment that is the direct opposite of its meaning in every othеr known context.
. See, e.g., Random House Dictionary of the English Language 1428 (1979) (defining "supersede” as “to replace ... set aside ... [or] supplant”).
. See Alden v. Maine,
. See United States v. Sarbia,
. See Opinion at 929-30 (collecting cases).
. Other ways, of course, would be to describe our function more honestly than representing that we simply apply law to facts and nothing more, and by acknowledging frankly that empathy is truly an essential quality for a jurist.