Case Information
cr In the
United States Court of Appeals
For the Second Circuit
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A UGUST T ERM No.
U NITED S TATES OF A MERICA ,
Appellee,
I RA R UBIN ,
Defendant Appellant, D ANIEL T ZVETKOFF , I SAI S CHEINBERG , R AYMOND B ITAR , S COTT T OM , B RENT B ECKLEY , N ELSON B URTNICK , P AUL T ATE , R YAN L ANG B RADLEY F RANZEN C HAD E LIE J OHN C AMPOS Defendants . [*]
________ Appeal District Southern New York. CR 336(10) ― Lewis A. Kaplan, Judge ________
A RGUED : D ECEMBER D ECIDED : F EBRUARY ________
3777 Before: C ABRANES H ALL AND C HIN Circuit Judges
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Defendant Appellant Ira appeals from August judgment District Southern District New York (Lewis A. Kaplan, Judge ), sentencing him principally months’ imprisonment for: (1) conspiracy Unlawful Internet Gambling Enforcement Act (the “UIGEA”), violation U.S.C. and U.S.C. 5363; (2) conspiracy commit bank fraud wire fraud violation U.S.C. §§ 1349; (3) conspiracy commit money laundering violation §§ 1956(a)(2)(A), 1956(h), 1957(a). Rubin’s principal contention alleges exempt prosecution UIGEA—a so called “non offense”—depriving District accept guilty plea. hold that, light (2002), purported defect Rubin’s ‐ nature, therefore could be, was, waived unconditional plea. Accordingly, we AFFIRM judgment Court.
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T IMOTHY J. S TRAUB (James A. Cohen, Ian S. Weinstein, Laura Jereski, on brief ), Fordham University School of Law, Lincoln Square Legal Services, Inc., New York, NY, for Ira Rubin. J ARED L ENOW (Brent S. Wible, on brief ), Assistant United States Attorneys, for Preet Bharara, Attorney, United States Attorney’s Office for Southern District of New York, NY, of America
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J OSÉ A. C ABRANES Circuit Judge :
Defendant Appellant Ira appeals from judgment District Southern District New York (Lewis A. Kaplan, Judge ), sentencing him principally months’ imprisonment for: (1) conspiracy Unlawful Internet Gambling Enforcement Act (the “UIGEA”), violation U.S.C. U.S.C. 5363, (2) conspiracy commit bank fraud wire fraud, violation U.S.C. §§ (3) conspiracy launder money, violation §§ 1956(a)(2)(A), 1956(h), 1957(a). principal contention alleges exempted prosecution under UIGEA—a so called “non ‐ offense”—depriving accept plea. 12 ‐ 3777 ‐ hold that, in light United States (2002), purported defect Rubin’s non ‐ nature, and therefore could be, and was, waived by unconditional plea.
BACKGROUND
On March 10, Government filed nine count Superseding Indictment (the “Indictment”), One charging others with conspiring to UIGEA, U.S.C. §§ 5361–5367, violation U.S.C. § 371. Section UIGEA makes it offense for gambling businesses to “knowingly accept” most forms payment “in connection participation another person unlawful Internet gambling.” See U.S.C. The Indictment alleged from three leading internet poker companies doing business United States (the “Internet Poker Companies”) violated prohibition by deceiving banks financial institutions into processing billions dollars payments illegal gambling activity their sites. Internet Poker Companies accomplished
deception hiring third party payment processors, such Rubin, disguise payments gamblers payments hundreds purportedly legitimate, but non existent, online merchants other gambling businesses. mid instance, others allegedly created dozens phony e ‐ commerce websites purporting sell clothing, jewelry, sporting equipment, which Rubin knew would be used to conceal gambling transactions. Rubin then opened bank accounts to process transactions on behalf Internet Poker Companies using names these phony companies falsely claiming to banks these accounts would used to process transactions legitimate e commerce merchants. The Indictment alleged Rubin thereafter disguised gambling transactions payments to dozens these phony web stores, payments to medical billing company, payments related to payroll marketing expenses.
On January 2012, Rubin pleaded guilty to conspiracy to violate UIGEA Count One, pursuant to an unconditional, written plea agreement Government. Rubin also pleaded guilty to Counts Eight Nine Indictment, charging, respectively, conspiracy to commit bank fraud wire fraud conspiracy to launder money. As set forth plea agreement, Guidelines range offenses which Rubin pleaded guilty was months’ imprisonment. On July sentenced principally aggregate term months’ imprisonment, upward variance. This timely appeal followed.
DISCUSSION
I principal argument he was convicted “non offense” when he pleaded One. prosecuted conspiring Section UIGEA, applies anyone “engaged business betting wagering.” See statute does directly define phrase “business betting wagering,” but states it “ does not include activities of a financial transaction provider,” id. § 5362(2) (emphasis supplied), such as activities of those entities or individuals engaged business of transferring or transmitting credit or funds, see id. 5362(4). A financial transaction provider may charged under Section however, if such individual has, among other requirements, “actual knowledge and control of bets and wagers.” Id.
Rubin contends Count One charged a because it alleged he did nothing more than handle gambling funds— i.e. engage “the activities a financial transaction provider”—which are expressly excluded from “business betting wagering” and thus generally exempted prosecution UIGEA. According Rubin, order to charge him a financial transaction provider, Count One needed allege he had actual knowledge control bets wagers. Government responds did fact conspire business betting wagering within meaning proscription Section because his limited activities a “financial transaction provider,” understood routine processing financial transactions between gamblers internet gambling companies. need resolve dispute because, even assuming
arguendo One so called “non offense,” unconditional guilty plea precludes argument appeal. Generally, “in order reserve issue appeal after plea, defendant must obtain approval consent government, he must reserve right appeal writing.” Coffin 1996) (citing Fed. R. Crim. P. 11(a)(2)). did reserve right here. Absent such reservation, “a who knowingly *7 7 12 ‐ 3777 ‐ voluntarily enters guilty plea waives all ‐ defects the prior proceedings.” United States v. Garcia , 339 116, 117 2003) (emphasis supplied); see also Tollett v. Henderson 411 U.S. 258, 267 (1973) (“When criminal has solemnly admitted open he fact guilty of offense he is charged, he may thereafter raise independent claims relating deprivation constitutional rights occurred prior entry guilty plea.”).
II attempts circumvent bar contending
Indictment’s supposed failure state under UIGEA deprived Court subject matter jurisdiction enter plea One, defects subject matter jurisdiction “can never forfeited waived,” U.S. 630. disagree purported defect affects Court’s subject matter jurisdiction.
The Supreme most recently addressed effect defects court’s jurisdiction United v. *8 8 12 3777 Cotton . [5] Following Supreme Court’s decision in Apprendi v. New Jersey , 530 U.S. 466 (2000)—which held that, in federal prosecutions, any fact that increases penalty for a crime beyond prescribed statutory maximum must be charged in indictment, id. at 476— Fourth Circuit sua sponte vacated Cotton defendants’ sentences basis that “an indictment setting forth all essential elements of an offense,” such drug quantities resulting in an enhanced penalty, “is both mandatory jurisdictional.” v. Cotton , 261 397, 404 (4th 2001).
The Supreme reversed. It clarified that “jurisdiction” refers “‘the courts’ statutory or constitutional power adjudicate case.’” Cotton , 535 U.S. at 631 (quoting Steel Co. Citizens Better Env’t 523 U.S. 89 (1998)). The then held “defects indictment do not deprive a court of its power adjudicate a case,” id. at question whether “‘the indictment does not charge a crime against goes only merits case,’” id . at 630 31 (quoting Lamar U.S. (1916)). argues Cotton stands limited proposition omissions, such missing element inadequate factual basis, do not deprive district court subject ‐ matter jurisdiction, that appeal rests on a separate basis— namely, that the conduct as charged One was simply not a crime under UIGEA. do not read so narrowly. The Court did not speak merely omissions; rather, it invoked broader concept “indictment defects.” See id. at (“ [D]efects indictment do not deprive a court its power adjudicate a case.” (emphasis supplied)); id. at (“[T]hat indictment is defective does not affect jurisdiction trial court determine case presented indictment.” (emphasis supplied) (internal quotations omitted)); id. (“[T]his some time ago departed [the] view that indictment defects are ‘jurisdictional.’” (emphasis supplied)); id. (“Insofar as [ Ex parte Bain , U.S. (1887)] held a defective indictment deprives a court jurisdiction, Bain overruled.” (emphasis supplied)).
The two cases upon Supreme relied Cotton—Lamar , U.S. (1916), United Williams U.S. (1951)—confirm challenges indictments on basis alleged does constitute charged statute are also non challenges. Lamar a jury convicted defendant, who had impersonated U.S. Representative, falsely pretending a officer. Lamar U.S. at argued lacked because Congressman “an officer States” as indictment— i.e. charged offense. Id. Justice Holmes, writing Court, rejected argument, noting “[j]urisdiction matter power covers wrong well right decisions,” “[t]he objection does charge crime against goes only merits case.” Id. 64–65.
In Williams the Court rejected a similar argument. The district court there dismissed the defendants’ perjury charges under the theory that the court presiding over the conspiracy trial in the perjury had allegedly occurred had “no jurisdiction”—and hence was not a competent tribunal required by the perjury statute— because the conspiracy alleged the earlier indictment was not proscribed by the charged conspiracy statute. Williams at 59–61, 65. The Supreme Court reversed the holding, stating that the court the conspiracy case “had jurisdiction the subject matter, wit, an alleged violation a federal conspiracy statute, and, course, the persons charged.” Id. at 66. That a higher court ultimately held the indictment defective did “not affect jurisdiction trial court determine the case presented indictment.” Id. Court concluded that, “[t]hough trial court or an appellate court may conclude that statute wholly unconstitutional, facts stated indictment do constitute crime are proven, [the court] has proceeded jurisdiction . . . .” Id. at 68–69. In sum, precedents Supreme Court make clear district court has “jurisdiction” even where an indictment alleges does state an offense under statute purportedly violated.
Sister Courts Appeals have considered issue have rejected similar arguments failure state an offense charged statute deprives jurisdiction. In *11 11 12 3777 United States v. De Vaughn , 694 F.3d 1141 (10th Cir. 2012), the of Appeals held that, by unconditionally pleading guilty, the had waived argument that threatening letters alleged in the charging documents were not, as a matter of law, “threats” prohibited by 18 U.S.C. § 876(c). [7] Id. at 1143–44, 1148. In Vanwinkle v. United States , 645 F.3d 365 (6th Cir. 2011), the of Appeals held that the had to accept a defendant’s guilty plea to the unauthorized use of an access device, notwithstanding the defendant’s claim on appeal that the device, as alleged in the indictment, did not constitute an “access device” within the meaning of 18 U.S.C. § 1029(a). [8] Id. at 368–69. Finally, v. Delgado Garcia 374 F.3d 1337 (D.C. Cir. 2004), Judge Sentelle, writing himself, asserted that the defendants had waived their argument the charged statute did not apply extraterritorially, as alleged indictment, unconditionally pleading guilty. Id. at 1340–41.
pleaded guilty must establish face of discloses count or counts to he pleaded failed to charge a federal offense.” Id. at (internal quotations omitted). However, Kumar did purport to undertake jurisdictional inquiry. Moreover, Kumar relied on Hayle F.2d (2d Cir. 1987), proposition that, where an “indictment alleges all statutory elements of offense defendant’s contention fact certain those elements are lacking, challenge goes merits prosecution.” Id. instant case, Hayle One all statutory elements conspiracy Section UIGEA. contention all elements charged offense are satisfied because allegations establish he only acted “financial transaction provider.” U.S.C. 876(c) makes it knowingly mail any communication
“containing any threat kidnap any person or any threat injure person addressee another.” 1029(a) generally prohibits fraud related activity connection production, use, trafficking counterfeit unauthorized access devices. Third Circuit charted alternative course Hedaithy 2004), holding defendant’s challenge does
concern any grounds, but could heard first time based 12 3777
In order to invoke a district court’s jurisdiction, an indictment need only allege that a defendant committed a federal criminal offense at a stated time place in terms plainly tracking the language the relevant statute. See United States v. Frias F.3d Cir. 2008) (holding that an indictment that “plainly tracks the language the statute states the time place the [crime]” is “sufficient to invoke the district court’s jurisdiction”); see also United Jacquez Beltran F.3d n.1 (5th Cir. 2003) (“To confer subject matter jurisdiction upon a federal court, an indictment need only charge a defendant with an offense against the language similar to used by relevant statute.”); González (1st 2002) (“[A] federal criminal case is within subject matter jurisdiction district court if indictment charges . . committed crime described Title or one other statutes defining crimes.”). When such jurisdiction established, court has authority to decide all other issues presented within framework case, including whether to accept plea. this case, One Indictment invoked
Court’s jurisdiction charging Rubin an against States—conspiring to UIGEA, violation U.S.C. 5363—at specified time place on language Federal Rule Criminal Procedure 12(b)(3)(B). Id. at 589; see also Fed. R. Crim. P. 12(b)(3)(B) (stating “at any time while case pending, may hear claim information fails invoke court’s state an offense”). briefly mentions Rule opening brief, but only proposition jurisdictional challenges may raised any time, including first time on appeal. Accordingly, has waived any argument Rule 12(b)(3)(B) allows him challenge first time Indictment fails state offense—a challenge prosecution. terms tracking language of relevant statutes. Whether
Rubin’s conduct amounted nothing more than “activities financial transaction provider” concerns merits case, District Court’s over action. Accordingly, pleading guilty unconditionally, Rubin waived his challenge that Indictment failed state offense.
III
Rubin also challenges reasonableness his sentence procedural and substantive grounds. review his claim procedural unreasonableness plain error because Rubin failed raise claim below. Cassesse F.3d (2d Cir. 2012) (reviewing plain error unpreserved claim inadequately explained its reasons sentence); cf. Villafuerte 2007) (holding “rigorous plain error analysis” applies unpreserved claims procedural sentencing error 3553(a) and (c)). Rubin argues District Court failed justify adequately, except conclusory terms, upward variance.
At sentencing, District Court explained upward variance by stating nature was particularly reprehensible, Pre Sentence Investigation Report prepared Probation Office, adopted by without objection, had revealed strong likelihood recidivism light extensive criminal past string fraudulent over course more than years. specifically found offenses pleaded were “brazen, quite deliberate, deceptive,” “an unreformed con man fraudster” who would “cook up some new scheme” upon release incarceration. ‐ ‐ This explanation was not inadequate, error, much less plain error. See Fairclough F.3d (2d Cir. 2006) (“upward departure from Guidelines range might have been warranted on basis range represented [defendant’s] past criminal likelihood recidivism”). examining substantive reasonableness sentence, we
review length sentence imposed to determine whether it “cannot located within range permissible decisions.” Watkins 2012) (internal quotations omitted). Rubin argues his sentence disproportionate minor role he played in scheme as
CONCLUSION
To summarize, we hold that: (1) light (2002), question whether Rubin’s constitutes conspiracy UIGEA challenge prosecution. Count One Indictment sufficiently invoked District Court’s alleging had committed criminal stated time place terms plainly tracking language relevant statute.
(2) Rubin’s unconditional plea One Indictment precludes argument he was convicted so called “non offense” UIGEA. (3) sentence neither substantively nor procedurally unreasonable.
For reasons stated above, we AFFIRM August judgment Court.
[*] Clerk directed amend caption case conform listing parties above.
[1] Timothy J. Straub, law student, argued case supervision attorney Lincoln Square Legal Services, Inc. Fordham Law School pursuant Local Rule 46.1(e).
[2] Under it crime “two more persons [to] conspire either commit any against . . one more such persons [to] do any act effect object conspiracy.”
[3] quoted passages from Garcia Tollett are absolute, inasmuch Supreme itself has recognized narrow exceptions two constitutional claims— due process claims vindictive prosecution, see Blackledge Perry U.S. (1974), double jeopardy claims are evident face indictment, see Menna New York n.2 (1975). does argue either exception applicable here.
[4] Article III confers upon courts subject matter jurisdiction over all cases arising laws States. Const. art. III, cl. By statute, Congress has conferred upon “district courts . . . original . . all offenses against laws .” See (emphasis supplied).
[5] The Cotton charged defendants with drug involving “detectable amount” cocaine cocaine base under U.S.C. § 841(b)(1)(C), which, at time, established “a term imprisonment more than years.” U.S. at 628. The district court Cotton did sentence defendants under provision, however. “Consistent practice courts at time,” district court made finding drug quantity at sentencing triggered enhanced penalties U.S.C. 841(b)(1)(A), prescribed “a term imprisonment which may . . more than life” drug offenses involving at least grams cocaine base. Cotton U.S. at 628. then sentenced defendants principally terms imprisonment excess year statutory limit provided 841(b)(1)(C).
[6] No Second Circuit case has previously addressed issue squarely wake Cotton . Moloney F.3d (2d Cir. 2002), held “a claim charges implicates courts.” Id. Yet Moloney decided April roughly month before Supreme decided More recently, Kumar 2010), reviewing whether sufficiently offense, we stated that, “[t]o challenge court’s jurisdiction, who has
compared his co conspirators. He notes sentence months’ imprisonment twice long as imposed any other co conspirator, he asserts he was merely payment processor contrast those actively involved in gambling enterprise. agree District Rubin not similarly situated his co conspirators. Rubin’s personal characteristics were considerably different those co defendants, his co ‐ defendants did have lengthy criminal records corresponding high likelihood recidivism. With regard role offense, although he did run gambling website himself, made it possible Internet Poker Companies operate disguising gambling payments legitimate transactions so banks would block them. also played central role fraud money laundering conspiracies charged Counts Eight Nine. Accordingly, acted well within its discretion imposing above ‐ guideline sentence months’ imprisonment.