United States v. Clark , 717 F.3d 790 ( 2013 )

FILED
United States Court of Appeals
Tenth Circuit
June 18, 2013
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
No. 10-5152
v.
RICHARD CLARK, a/k/a Rick Clark,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Oklahoma
(D.C. No. 4:09-CR-00013-JHP-2)
Scott A. Graham (Anthony L. Allen, with him on the briefs), of Graham, Allen &
Brown, PLLC, Tulsa, Oklahoma, for Defendant-Appellant.
Claire McCusker Murray, 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.
Before HARTZ, O’BRIEN, and HOLMES, Circuit Judges.
HOLMES, Circuit Judge.
Defendant-Appellant Richard Clark was charged and convicted of multiple
counts relating to his participation in a “pump-and-dump” securities fraud
scheme. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm Mr. Clark’s
conviction.
I. Factual and Procedural Background
This case arises from a classic pump-and-dump scheme that was
orchestrated principally by Mr. Clark’s co-defendant, George David Gordon. In a
separate opinion, we recently affirmed Mr. Gordon’s convictions and sentence.
See United States v. Gordon, 710 F.3d 1124 (10th Cir. 2013). In doing so, we set
forth in considerable detail the relevant factual and procedural background related
to the government’s prosecution of the pump-and-dump scheme. See id. at
1128–33. Consequently, we will not fully reiterate that discussion here. Instead,
we offer at the outset a factual and procedural overview, and then in connection
with the resolution of Mr. Clark’s specific legal challenges, we explicate
necessary additional facts. 1
1
In Gordon, we quoted in part the indictment’s description of the
general nature of a pump-and-dump scheme, 710 F.3d at 1128 n.2; it is also useful
to do so here:
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
(continued...)
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In summary, the government alleged that Messrs. Gordon and Clark and
other co-conspirators manipulated the shares of several “penny-stock” companies
by using false and backdated documents to make those shares publicly tradeable,
engaged in coordinated trading among themselves to create the false appearance
of an active market for the shares, and promoted the shares through misleading
promotional campaigns. See, e.g., id. at 1128 & n.2. The shares were sold to
1
(...continued)
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).
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unsuspecting buyers after their prices had surged, and the conspirators laundered
the proceeds through an array of bank accounts and nominees. The conspirators
subsequently covered up their misconduct in interactions with the Securities and
Exchange Commission (“SEC”).
A. Investigation and Pretrial Proceedings
The conduct in this case can be traced back to 2004 when Mr. Gordon
began dealing with Mark Lindberg and Joshua Lankford, two Dallas stock
promoters—both co-conspirators—and collaboratively targeting with them
various companies for the fraudulent scheme’s purposes. Through a sequence of
transactions, the conspirators established and fraudulently promoted the stock of
three companies: National Storm Management (“National Storm”), Deep Rock Oil
& Gas (“Deep Rock”), and Global Beverage Company (“Global Beverage”). See
id. at 1129–32.
In 2004, SEC official Samuel Draddy began looking into an unrelated Pink
Sheet 2 company that had “unusual trading surrounding its stock and appeared to
be the subject of a promotional campaign.” R., Vol. VIII, at 1753 (Test. of
Samuel Draddy, dated Apr. 15, 2010). This led to further investigation of other
2
“The Pink Sheets are a daily publication of the National Quotation
Bureau (NQB), a private company. Printed on pink paper, the pink sheets list
penny stocks, their marketmakers, and their price.” United States v. Sneed, 34
F.3d 1570, 1575 n.7 (10th Cir. 1994); see also Gordon, 710 F.3d at 1130
(describing the Pink Sheet system and noting that Pink Sheet companies are “not
required to file periodic reports with the SEC”).
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“similarly-situated [stock] issuers” with unusual trading patterns and promotional
campaigns. Id.
After taking a deeper look, investigators noticed that the companies under
consideration evinced similar patterns where “the people involved owned shells,
[that] were publicly-traded issuers that had no legitimate business purpose, . . .
[and] [t]hey would . . . get private companies to reverse-merge into these shells so
they could get publicly traded.” Id. at 1754; see also id., Vol. I, at 55 (noting in
the instant indictment that “[t]o 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”). Based on this discovery, the investigators turned their
attention to the activities of the companies involved in this case. During that
investigation, Mr. Clark testified before the SEC. He made various statements,
including an allegedly false denial that he controlled nominee entities involved in
the Deep Rock trading scheme.
In July 2007, approximately eighteen months prior to the commencement of
criminal proceedings against Mr. Clark, the government placed a caveat on his
residence. See generally Black’s Law Dictionary 252 (9th ed. 2009) (defining
“caveat” as “[a] warning or proviso”). No notice was given to Mr. Clark at that
time, and he was not aware of the caveat until July 2008 “when he was attempting
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to obtain funds to retain counsel.” Aplt. Opening Br. at 2. The government
temporarily lifted the caveat in June 2009 to allow Mr. Clark to renew an existing
loan on his home, and reimposed it in July 2009. The government then
completely lifted the caveat in October 2009.
On January 15, 2009, the grand jury returned a twenty-four-count
indictment against the members of the conspiracy, including Mr. Clark. Mr.
Clark was named in Counts 1–21: specifically, conspiracy (Count 1), in violation
of 18 U.S.C. § 371; wire fraud (Counts 2–10), in violation of 18 U.S.C. §§ 1343and 2(a); securities fraud (Counts 11–15), in violation of 15 U.S.C. §§ 78j(b),
78ff, 17 C.F.R. § 2401.10b-5, and 18 U.S.C. § 2(a); and money laundering
(Counts 16–21), in violation of 18 U.S.C. §§ 1957(a) and 2(a).
B. Trial
At trial, 3 the government called witnesses to summarize the details of the
conspiracy, including Mr. Lindberg and Richard Singer (another co-conspirator);
both men had pleaded guilty to criminal offenses related to the conspiracy. SEC
Investigator Draddy testified about the promotional campaigns and Mr. Clark’s
testimony before the SEC. Other witnesses were called to summarize
3
The district court ordered a continuance under the Speedy Trial Act
and set the trial date for January 19, 2010. The presiding judge later recused
himself in late 2009, and Judge James Payne was assigned to the case. Judge
Payne then reset the trial date to March 29, 2010. The trial ultimately began on
April 5, 2010.
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documentary evidence. Mr. Clark unsuccessfully moved to sever his trial from
Mr. Gordon’s due to the alleged potential for a prejudicial spillover of evidence
that was admitted concerning both Mr. Gordon and the other co-conspirators. Mr.
Clark ultimately was convicted of fourteen of the twenty-one counts for which he
was indicted. He was sentenced to 151 months’ imprisonment. 4
II. Discussion
Mr. Clark asserts numerous grounds of error. He claims that the pretrial
placement of the caveat on his property violated his constitutional rights and that
the evidence was insufficient to convict him. He further contests the district
court’s refusal to appoint an additional or a substitute defense counsel who was
well versed in complex securities matters and the court’s failure to sever his trial
from Mr. Gordon’s. He also contends that his rights under the Speedy Trial Act
were violated by the roughly fourteen-month delay between the filing of the
indictment and commencement of trial. We address each contention but discern
4
The government seeks to supplement the record under seal with
multiple sentencing documents that are not included in the parties’ appendices.
Most of these documents are interim versions of Mr. Gordon’s pre-sentence
investigation report and the district court’s Statement of Reasons for imposing
sentence in his case. One document in particular relates to Mr. Clark’s appeal: an
addendum to his pre-sentence report. We already have resolved the motion as it
pertains to Mr. Gordon’s case, granting it in part. See Gordon, 710 F.3d at 1160
n.35. Mr. Clark does not object to supplementing the record with his pre-sentence
addendum. With this in mind, we grant in part the motion with respect to the
addendum. The rest of the motion does not directly implicate Mr. Clark or our
resolution of his appeal and, therefore, we deny the remainder of the motion as
moot.
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no reversible error.
A. Constitutional Challenges Arising from the Government’s Caveat
Mr. Clark claims that “[t]he government violated [his] constitutional rights
to due process and a fair trial” in its pre-indictment decision to place a caveat on
his home, without notice. Aplt. Opening Br. at 6. By the time the government
lifted the caveat on Mr. Clark’s home, he claims that he had no income because of
the government’s other post-indictment restrictions on his business
activities—viz., restrictions concerning his ability to liquidate various stock
holdings. Therefore, Mr. Clark allegedly was unable to pay for chosen counsel
and unable to secure a loan against his house for the same purpose. 5
Mr. Clark claims that the government acted wrongfully in imposing the
caveat on his house. He reasons that his house was not forfeitable property. 6 As
5
Mr. Clark contends that the October 2009 release of the caveat was
done “with the express condition that no new funds could be advanced on the
home.” Aplt. Opening Br. at 6. The government counters that Mr. Clark is
“wrong” and that the condition of which he speaks applied to the earlier,
temporary release in June 2009, not the release in October 2009, which was
unconditional. See Aplee. Br. at 46. The government’s position is supported by
the record (indeed, by a motion filed by Mr. Clark’s attorneys in the district
court). See R., Vol. I, 178 (Am. Mot. & Br. to Withdraw as Counsel, filed Nov.
18, 2009) (“On October 2, 2009, the Government lifted the caveat on Mr. Clark’s
home.”).
6
“The key to whether property is forfeitable is whether it is ‘involved
in’ or ‘traceable to’ the offense.” United States v. Bornfield, 145 F.3d 1123, 1135
(10th Cir. 1998) (quoting 18 U.S.C. § 982(a)(1)). Mr. Clark contends that, at
most, his house was “substitute property” that was off-limits to the government
unless and until he was convicted, citing our decision in United States v. Jarvis,
(continued...)
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a consequence, once the caveat was imposed, he contends, the Due Process
Clause of the Fifth Amendment, as interpreted in our decision in United States v.
Jones, 160 F.3d 641 (10th Cir. 1998), required a post-restraint, pretrial hearing on
whether the house was in fact forfeitable property—a hearing that Mr. Clark says
he was wrongfully denied.
6
(...continued)
499 F.3d 1196 (10th Cir. 2007). In resolving Mr. Gordon’s appeal, we had
occasion to explicate the concept of substitute property and the contours of
Jarvis’s holding regarding it. We stated:
[I]n order for the government to forfeit substitute property, it
must establish that through “any act or omission of the
defendant” one of five things has occurred—for example,
forfeitable property cannot be located through the exercise of due
diligence, or such property has been placed beyond the
jurisdiction of the court. 21 U.S.C. § 853(p)(1). Furthermore,
we reasoned in Jarvis that because the government has no pre-
conviction interest in substitute property, it may not impose pre-
trial restraints on a defendant’s substitute property.
Gordon, 710 F.3d at 1136 n.14. In contrast, as we further noted in Gordon:
Assets that are properly forfeitable are not the defendant’s
rightful property. As ill-gotten gains, they are another person’s
money. Indeed, these assets may belong to the government by
virtue of the relation-back provision of 21 U.S.C. § 853(c), which
by operation of law vests title to forfeitable property in the
government upon the commission of the act giving rise to
forfeiture.
Id. at 1135 n.13 (quoting Caplin & Drysdale, Chartered v. United States, 491
U.S. 617, 625–26 (1989), and Jarvis, 499 F.3d at 1203) (internal quotation marks
omitted).
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“We review de novo the extent of constitutional rights . . . .” Jones, 160
F.3d at 645; see United States v. Rivas-Macias, 537 F.3d 1271, 1276 (10th Cir.
2008). However, when a defendant does not properly raise a challenge in the
district court, and “there is no suggestion of a knowing, voluntary failure to raise
the [claim],” it is forfeited and our “rigorous plain-error standard governs our
review.” United States v. Cooper, 654 F.3d 1104, 1117 (10th Cir. 2011). Under
this rigorous standard, a defendant must demonstrate: “(1) an error, (2) that is
plain, which means clear or obvious under current law, and (3) that affects
substantial rights. If he satisfies these criteria, this Court may exercise discretion
to correct the error if [4] it seriously affects the fairness, integrity, or public
reputation of judicial proceedings.” Id. (alteration in original) (quoting United
States v. Goode, 483 F.3d 676, 681 (10th Cir. 2007)) (internal quotation marks
omitted).
Jones was decided in the post-indictment, pretrial context. See 160 F.3d at
645 (“[W]e next address whether due process nevertheless requires a pre-trial
hearing at which defendants may challenge the grand jury’s findings.”). There,
we concluded that “[t]he procedural aspect of the Fifth Amendment Due Process
Clause,” id., provides a defendant with some ability to “test the [government’s]
forfeiture allegations,” id. at 646. Pertinently, we reasoned that the “private
interests” at stake when access to property is impeded—specifically, the Sixth
Amendment right to counsel of choice and the payment of living
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expenses—together with the “risk of an erroneous deprivation through [pretrial
restraint procedures,]” weighed in favor of a post-restraint, pretrial adversarial
hearing “at which the government must establish probable cause to believe that
the restrained assets are traceable to the underlying offense.” Id. at 646–47.
We noted, however, that “[d]ue process does not automatically require”
such a hearing. Id. at 647. A hearing should be held “only upon a properly
supported motion by a defendant,” wherein he must (1) “demonstrate to the
court’s satisfaction that []he has no assets, other than those restrained, with which
to retain private counsel and provide for [him]self and [his] family”; and (2)
“make a prima facie showing of a bona fide reason to believe the grand jury erred
in determining that the restrained assets” are forfeitable property. Id.; see also
United States v. Kaley, 579 F.3d 1246, 1254–55 (11th Cir. 2009) (conducting a
similar inquiry).
In this case, the government imposed a caveat under Oklahoma law on Mr.
Clark’s house roughly eighteen months prior to his indictment, but Mr. Clark was
never provided notice or a subsequent hearing. We assume without deciding that
an Oklahoma caveat constitutes a pretrial restraint of assets sufficient to trigger a
defendant’s procedural due process rights under Jones. 7 Cf. Jarvis, 499 F.3d at
7
To be sure, it is not clear that common law, public impediments like
caveats (or lis pendens) are functionally equivalent to the type of restraints
triggering our inquiry in Jones. For instance, in Jones, the government obtained a
(continued...)
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1198–1200 (implying that a New Mexico lis pendens may constitute a
“restraint”). However, even if it does, Mr. Clark faces a formidable—and,
ultimately, insurmountable—obstacle in pursuing this claim: Mr. Clark did not
properly seek a hearing prior to trial to vindicate his interests related to the
imposition of the caveat, much less make an adequate showing for a hearing
under Jones’s standards. 8
7
(...continued)
restraining order under 21 U.S.C. § 853(e)(1)(A) to freeze assets named in the
indictment. See 160 F.3d at 643. Furthermore, on a continuum of constraints,
common law impediments—like a lis pendens or caveat—plainly do not amount
to a full scale seizure of the underlying property, where the defendant has no
residual control over it. Cf. United States v. James Daniel Good Real Prop., 510
U.S. 43, 62 (1993) (holding that due process requires the government to “afford
notice and a meaningful opportunity to be heard before seizing real property
subject to civil forfeiture”). However, we are content to assume without deciding
that the placement of the Oklahoma caveat implicates our dictates in Jones—viz.,
that it constitutes a “restraint” presenting the right to a post-restraint, pretrial
hearing. But cf. Stefan D. Cassella, Asset Forfeiture Law in the United States
§ 17-8, at 526 & n.77 (2007) (collecting cases and noting that the “[t]he filing of
a lis pendens is not a restraint within the meaning of § 853(e)”).
8
We recognize that Mr. Clark contends that he did seek a Jones
hearing. But he did not properly do so, if at all. In his opening brief, he claims
that “[a] post-restraint, pretrial hearing was requested by co-defendant David
Gordon (Dkt. 79) and incorporated by reference by Clark (Dkt. 78).” Aplt.
Opening Br. at 8. The document to which Mr. Clark refers (i.e., the district
court’s document 78) is his attorneys’ first motion to withdraw, or in the
alternative, to sever or continue the trial. See R., Vol. I, at 171 (Mot. & Br. to
Withdraw as Counsel, filed Nov. 17, 2009). There, his attorneys complained to
the court that the caveat on Mr. Clark’s home was “a proximate cause of Mr.
Clark’s inability to raise sufficient funds for his defense in this case.” Id. While
the motion noted that the government imposed the caveat without notice, see id.,
nowhere in the document was a hearing requested, and it certainly did not make
the showing for a hearing mandated by Jones. As for the purported incorporation
(continued...)
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8
(...continued)
by reference, this document does not even reference Mr. Gordon’s hearing
request. The incorporation by reference that Mr. Clark presumably seeks to direct
us to is actually found on the third page of his amended motion to withdraw, or in
the alternative, to sever or continue the trial. Specifically, the motion states, “The
Government’s heavy hand in the imposition of caveats is not restricted to its
actions in respect of Mr. Clark. See motion of co-defendant David Gordon filed
in this case November 17, 2009.” Id. at 179 (Am. Mot. & Br. to Withdraw as
Counsel, filed Nov. 18, 2009). That is it. Nothing more. And Mr. Clark’s
counsel confirmed in oral argument that this is the extent of his purported
incorporation by reference. See Oral Arg. at 21:15–22:35. However, in the
document that Mr. Clark references, Mr. Gordon sought at least three forms of
relief, including an evidentiary hearing before the district court, citing Jones as
supportive authority. See R., Vol. X, at 29–31 (Def. David Gordon’s Mot. to
Dismiss, filed Nov. 17, 2009). Mr. Clark’s single, vague, and enigmatic sentence
referencing the whole document should not be deemed sufficient to have captured
Mr. Gordon’s specific Jones argument and placed it before the district court.
Indeed, the sentence does not even amount to a bare-bones “me too” form of
argument adoption (which would be questionable in itself here because it would
not offer a particularized showing regarding Mr. Clark’s circumstances). More
specifically, the sentence does not even mention a hearing request, or for that
matter any other specifics that might be found in Mr. Gordon’s filing.
Significantly, our independent examination of the district court’s
documents suggests that the magistrate judge remarkably did manage to divine in
Mr. Clark’s filings a request for an evidentiary hearing “apparently to examine
the Government’s conduct in this and other cases relating to pretrial restraints on
a criminal defendant’s assets,” id, Vol. I, at 347 (Order, dated Dec. 9, 2009), and
denied relief. However, Mr. Clark is not well-postured on appeal to avail himself
of the benefits of the magistrate judge’s impressive industriousness. Not only
does Mr. Clark not discuss the magistrate judge’s order in connection with his due
process/Jones challenge, he also fails (in his opening brief or otherwise) to
fashion an argument for why this challenge should be deemed preserved for
review, based upon the magistrate judge’s decision to rule on his purported
hearing request. And we certainly will not attempt to craft an argument of this
sort for him. Accordingly, any such preservation argument is waived. See, e.g.,
United States v. Bader, 678 F.3d 858, 894 (10th Cir. 2012) (noting that defendant
“devotes only a single sentence to [his] argument” in his opening brief and “[t]hat
(continued...)
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Consequently, for this reason (and possibly another, see supra note 8), Mr.
Clark may have waived his due process challenge. Cf. Sandoval v. City of
Boulder, 388 F.3d 1312, 1329 (10th Cir. 2004) (“Sandoval has waived any
argument that she was denied due process by failing to request the hearing to
which she now claims she was entitled.”); cf. also Kaley, 579 F.3d at 1261 n.5
(Tjoflat, J., specially concurring) (discussing a prior Eleventh Circuit decision in
which the “defendants had waived their challenge to the constitutionality of . . .
ex parte restraints [on property] by not presenting it to the district court”).
However, going to great lengths to ensure that Mr. Clark receives his full day in
8
(...continued)
is not enough”). Furthermore, even if Mr. Clark had referenced the magistrate
judge’s order and attempted before us to make a preservation argument based
upon it with respect to his due process/Jones challenge, he would have another
problem: he did not file an objection to the magistrate judge’s denial of his
purported request for a hearing. See R., Vol. I, at 348–51 (Objection to
Magistrate’s Order, dated Dec. 15, 2009) (failing to address the hearing ruling).
Therefore, under our firm waiver rule, appellate review of the hearing denial
would be barred. See, e.g., Morales-Fernandez v. INS, 418 F.3d 1116, 1119 (10th
Cir. 2005); In re Carpenter, 205 F.3d 1249, 1253 (10th Cir. 2000). When all is
said and done, then, the best that Mr. Clark could ever hope for is plain-error
review of his due process claim—that is, his claim predicated on the district
court’s purported failure to give him the opportunity to have a Jones hearing
regarding the government’s imposition of a caveat. Going to great lengths to
ensure that, to the extent reasonably feasible and consistent with the adversary
process, Mr. Clark has his day in court, as noted infra, we afford him this best-
case, plain-error scenario. Cf. Abernathy v. Wandes, 713 F.3d 538, 552 (10th Cir.
2013) (noting that “the decision regarding what issues are appropriate to entertain
on appeal in instances of lack of preservation is discretionary” and proceeding to
consider petitioner’s argument “even though [it was] not obliged to do so” where
“certain factors militate[d] in favor of considering [the argument at issue], but
only under the demanding plain-error standard”).
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court, we assume that Mr. Clark’s failure to properly seek a post-restraint, pretrial
hearing under Jones amounted to a forfeiture. Even affording him this best-case
scenario, Mr. Clark’s circumstances are rather grim: in order to prevail, he must
“successfully run the gauntlet created by our rigorous plain-error standard of
review.” United States v. McGehee, 672 F.3d 860, 876 (10th Cir. 2012). This he
cannot do. Mr. Clark cannot even establish the first prong of the plain-error test;
in other words, he cannot demonstrate that the district court committed error at
all.
Mr. Clark learned about the caveat in July 2008—a year after it had been
imposed and six months prior to his indictment. But he never properly asked the
district court for a post-restraint hearing regarding the caveat under our decision
in Jones. That is, he never filed the motion that Jones requires, never properly
alerted the district court to his desire for a Jones hearing, and nowhere sought to
demonstrate that he could satisfy the test that Jones sets forth. Accordingly, the
district court had no reason to conclude that Mr. Clark’s interests were in
jeopardy and required protection through a hearing. See Jones, 160 F.3d at 647(“[A] post-restraint, pretrial hearing [is required] only upon a properly supported
motion by a defendant. Due process does not automatically require a hearing
. . . .”).
The procedures required by our decision in Jones are in place to protect a
defendant from an intrusion upon his property interest without due process. See
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id. at 645–46 (“[A] restraining order issued under section 853(e)(1)(A) deprives
one of property even though the assets named in the indictment are only frozen
and may eventually be returned.”); cf. 21 U.S.C. § 853(e)(1). A defendant cannot
successfully establish that a district court’s decision deprived him of the
affirmative protections inherent in a Jones hearing when the defendant has not
properly alerted the court to the need for such a hearing. Cf. Kirkland v. St. Vrain
Valley Sch. Dist. No. Re-1J, 464 F.3d 1182, 1195 (10th Cir. 2006) (“Although
[the plaintiff] could have immediately filed a grievance challenging his
suspension, he chose not to do so. In light of that, he cannot now allege that the
individual Defendants deprived him of post-suspension due process.”); Luellen v.
City of E. Chicago, 350 F.3d 604, 616 (7th Cir. 2003) (noting that because “[the
litigant] was provided with the opportunity for additional procedures to vindicate
his rights but did not avail himself of those opportunities, . . . the requirements of
due process were satisfied”). Accordingly, we conclude that Mr. Clark has not
satisfied the first prong of the plain-error test—viz., he has not shown that the
district court erred at all.
Mr. Clark suggests that he had no opportunity to lodge a challenge to the
caveat because he was not given adequate notice of its placement. However, the
record demonstrates that Mr. Clark had notice of the caveat by July 2008, nearly
two years before trial. Mr. Clark has not established that the government’s failure
to give notice of placement of the caveat in 2007 affected his ability to vindicate
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his interests in a timely fashion so as to facilitate retaining counsel.
Consequently, we reject his due process claim—predicated upon the notion that
the district court wrongly failed to afford him a post-restraint, pretrial hearing in
order to contest the caveat.
Finally, we note that Mr. Clark claims in passing that the placement of the
caveat “deprived [him] of his Sixth Amendment right to a fair trial,” and
“violated [his] right to counsel.” Aplt. Opening Br. at 11–12. We reject these
arguments. First, we interpret Mr. Clark’s claim that he was denied a fair trial
under the Sixth Amendment as a duplicative pulsation of his arguments under
Jones. He provides nothing in his brief that would suggest that the argument
supports a separate averment of error on appeal.
Second, we also reject Mr. Clark’s claim that the government’s conduct
impermissibly infringed on his Sixth Amendment right to counsel of choice. Mr.
Clark failed to raise this claim in a legally cognizable manner before the district
court. To be sure, in the amended motion to withdraw of Mr. Clark’s trial
counsel, counsel did suggest that the government’s conduct violated Mr. Clark’s
Sixth Amendment right to counsel. And, in positing a possible “solution” to the
dilemma, Mr. Clark’s attorney set forth a number of hypothetical resolutions,
including “dismissal of the charges against Mr. Clark at least for all of the
reasons set forth in the David Gordon motion.” R., Vol. I, at 179.
However, the motion of Mr. Clark containing this comment was geared
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primarily toward seeking either withdrawal of counsel because of Mr. Clark’s
failure to pay legal fees, or remedies so that Mr. Clark could obtain the necessary
income to compensate current counsel, i.e, severance or a continuance of trial.
See id. at 177 (seeking “withdraw[al],” “severance,” or “continuance”). This
single, unadorned statement alluding to a separate, potential Sixth Amendment
right-to-counsel claim could not reasonably alert the district court to such a claim,
at least in the form that the claim is presented here. Indeed, both the magistrate
judge (in resolving the motion) and the government (in responding) expressly
declined to speculate on the contours of Mr. Clark’s allegations. See, e.g., id., at
344 n.1 (“The Court declines to address this one-sentence unsupported suggestion
that the charges should be dismissed.”).
In sum, the district court was not afforded the “opportunity to consider the
question.” United States v. Norman T, 129 F.3d 1099, 1106 (10th Cir. 1997).
Consequently, we review it only for plain error, as we did Mr. Clark’s due
process claim. See United States v. Lamirand, 669 F.3d 1091, 1098 n. 7 (10th
Cir. 2012).
Under plain-error review, at the very least, Mr. Clark’s claim fails under
the third prong. In making his skeletal right-to-counsel argument, like (his co-
defendant) Mr. Gordon, Mr. Clark relies on the district court and Second Circuit
decisions in the Stein criminal case. See United States v. Stein, 541 F.3d 130 (2d
Cir. 2008); United States v. Stein, 435 F. Supp. 2d 330 (S.D.N.Y. 2006); see also
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Gordon, 710 F.3d at 1137 (noting that Mr. Gordon “heavily relies” on Stein).
Similar to the fate of Mr. Gordon’s argument, Mr. Clark’s right-to-counsel
argument fails under the third prong for two principal reasons. First, Mr. Clark
“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.” Gordon,
710 F.3d at 1138.
In this regard, it is significant that the district court found $225,214.81 of
equity in Mr. Clark’s house—the property subject to the government’s caveat—to
be forfeitable property because certain “payments for remodeling and the
mortgage” were proceeds “traceable . . . to the conspiracy.” R., Vol. VI, at 1047
(Order for Criminal Forfeiture, filed Sep. 15, 2010). That finding has support in
the record. See id., Vol. II, at 45 (Aff. of William Robert Taylor, filed June 25,
2010) (stating that a “significant amount” of the proceeds of stock sales directly
at issue in the case “were paid directly out of [Mr. Clark’s] brokerage account for
residence related expenses”). And it significantly undercuts any suggestion that
Mr. Clark’s substantial rights were affected by any district court error in
addressing the government’s caveat on his home.
In particular, nothing in the Constitution “requires Congress to permit a
defendant to use assets adjudged to be forfeitable to pay . . . legal fees.” United
States v. Monsanto, 491 U.S. 600, 614 (1989); see Caplin & Drysdale, 491 U.S. at
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632 (rejecting the “claim of a Sixth Amendment right of criminal defendants to
use assets that are the Government’s—assets adjudged forfeitable . . . —to pay
attorneys’ fees”). And, in his threadbare argument, Mr. Clark has not attempted
to demonstrate that any remaining equity in his home—beyond the amount subject
to forfeiture—would have materially assisted him in employing or paying
counsel. Accordingly, in light of the district court’s forfeiture finding regarding
the home, we would be hard-pressed to conclude that Mr. Clark satisfied the third
prong of plain-error review.
Second, as in Gordon, Mr. Clark’s claim of prejudice is nigh eviscerated (if
not completely so) by his ongoing, active representation throughout his trial by
the counsel that he initially retained. See 710 F.3d at 1139 (“[U]nlike Stein, it is
quite significant that Mr. Gordon’s counsel remained fully and actively engaged
in the case throughout the entire trial court proceedings.”). More specifically, as
we recount in further detail infra (Part II.C), even prior to his indictment, Mr.
Clark retained a very experienced criminal defense attorney, Allen Smallwood,
and Mr. Smallwood represented Mr. Clark throughout the trial proceedings. And,
even a cursory examination of the trial transcript would reveal that Mr.
Smallwood advocated for Mr. Clark “in a thorough and vigorous fashion.” Id.
Accordingly, for this reason as well, Mr. Clark cannot demonstrate that any error
by the district court affected his substantial rights (i.e., satisfied the third prong of
plain error). In sum, for the foregoing reasons, we reject Mr. Clark’s
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constitutional challenges that stem from the government’s imposition of a caveat
on his home.
B. Sufficiency of the Evidence
Mr. Clark challenges the sufficiency of the evidence on all of his counts of
conviction. Mr. Clark was convicted of one count of conspiracy to commit wire
fraud, securities fraud, and money laundering; seven counts of wire fraud; five
counts of securities fraud; and one count of money laundering. The district court
denied Mr. Clark’s motion for judgment of acquittal. We conclude that Mr.
Clark’s sufficiency-of-the-evidence challenges are without merit.
“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).
The court may “not weigh conflicting evidence” in its review. Id. (quoting
United States v. Evans, 318 F.3d 1011, 1018 (10th Cir. 2003)) (internal quotation
marks omitted). We must “consider[] 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. Conspiracy
Mr. Clark first asserts that the government failed to establish that he was
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involved in “an agreement to commit an unlawful act,” as required to support the
conspiracy charge. See, e.g., United States v. Weidner, 437 F.3d 1023, 1033 (10th
Cir. 2006) (quoting United States v. Morehead, 959 F.2d 1489, 1500 (10th Cir.
1992)) (internal quotation marks omitted).
The evidence need not show an express agreement to support a conspiracy
charge. See Cooper, 654 F.3d at 1115–16. “[T]he agreement requirement may be
satisfied entirely through circumstantial evidence,” id. at 1116; that is, it “may be
inferred from the facts and circumstances of the case,” id. at 1115–16 (quoting
United States v. Sells, 477 F.3d 1226, 1236 (10th Cir. 2007)) (internal quotation
marks omitted). Such facts and circumstances include “the joint appearance of
defendants at transactions and negotiations furthering the conspiracy, the
relationship among co-defendants, and their mutual representations to third
parties.” United States v. Dowlin, 408 F.3d 647, 657 (10th Cir. 2005).
Furthermore, “[i]n order to sustain a jury’s determination of guilt, the record need
show only ‘slight evidence of a particular defendant’s connection with a
conspiracy that has already been established through independent evidence.’”
United States v. Dickey, 736 F.2d 571, 583 (10th Cir. 1984) (quoting United
States v. Petersen, 611 F.2d 1313, 1317 (10th Cir. 1979)); see also United States
v. Hamilton, 587 F.3d 1199, 1207 (10th Cir. 2009) (noting that “[t]he connection
of the defendant to the conspiracy need only be slight, if there is sufficient
evidence to establish that connection beyond a reasonable doubt” (alteration in
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original) (quoting United States v. Tranakos, 911 F.2d 1422, 1430 (10th
Cir.1990)) (internal quotation marks omitted)).
Based upon record evidence quite apart from Mr. Clark, it is beyond
peradventure that Mr. Gordon and others were involved in a pump-and-dump
conspiracy. See Gordon, 710 F.3d at 1129–32. Focusing then on Mr. Clark’s
alleged role in that conspiracy, taken in the light most favorable to the
government, there was ample record evidence that he was an active participant in
it. Mr. Clark was installed as Global Beverage’s president because he was “in
with the plan” to manipulate the stock. See R., Vol. VIII, at 186–87 (Test. of
Mark Lindberg, dated Apr. 7, 2010). In that role, he approved a misleading
brochure touting Global Beverage’s financial prospects; then, only a few months
later, he filed a report with the SEC questioning whether the company could
continue as a going concern. See id. at 2291–93 (Test. of Jarom Gregory, dated
Apr. 26, 2010).
Furthermore, Mr. Clark and the nominee individuals or entities operating at
his behest were engaged in the bulk of the pre-promotion trading of Deep Rock
shares that was designed to signal to the market a genuine interest in the stock in
order to effect an artificial inflation of its price. He later profited significantly
from the sale of the stock. Moreover, according to the testimony of Mr. Lindberg,
Mr. Clark was an active member of the conspiracy. And the evidence supported
the government’s charge that Mr. Clark lied to the SEC concerning a nominee
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account that he used to buy and sell Deep Rock stock.
In sum, this evidence demonstrates both Mr. Clark’s extensive involvement
in the conspiracy’s activities and his related intent to defraud investors. See
United States v. Jenkins, 633 F.3d 788, 804 (9th Cir. 2011) (holding that there
was sufficient evidence of intent to defraud investors, relating to an alleged
pump-and-dump conspiracy, where the defendant “helped create . . . offshore
corporations holding [the target company’s] stock, helped to sell the stock, and
helped to move the various proceeds to accounts controlled by [other
co-conspirators], and, further, . . . [disseminated] false and misleading [online
posts]” regarding the stock); Dowlin, 408 F.3d at 658 (concluding that the jury
could have found that the defendant participated in a fraudulent scheme, where
the evidence suggested that she knew the purpose of the scheme and willingly
participated); see also United States v. Whiteford, 676 F.3d 348, 357–58 (3d Cir.
2012) (concluding that there was sufficient evidence of a defendant’s
participation in a conspiracy, where he intended the conspiracy to continue so that
he could “reap personal benefits” from it); United States v. Whitney, 229 F.3d
1296, 1301–02 (10th Cir. 2000) (holding that the evidence was sufficient to
sustain a conspiracy conviction where the government showed, among other
things, that the defendant shared a motive to complete the conspiracy’s ultimate
object and provided false evidence to effect a cover-up).
Mr. Clark highlights the fact that, at one point, he sold Deep Rock stock
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“out of line,” which he calls “strong evidence that he was not involved in any
alleged conspiracy.” Aplt. Opening Br. at 25 (quoting R., Vol. VIII, at 207–09)
(internal quotation marks omitted). By way of background, consistent with the
overall approach of the charged conspiracy, the conspirators were engaged in the
manipulation of Deep Rock’s stock price through the “coordinated trading” of its
stock, and “part of the coordinated trading was to make sure that the stock [price]
kept gradually going upwards.” R., Vol. VIII, at 207; see id. at 153 (noting that it
was the conspirators’ “plan for the steady, gradual growth of the stock price of
Deep Rock”). Mr. Clark was detected by some of the conspirators selling Deep
Rock stock “out of turn” (presumably to make more short-term profits)—meaning
that he “sold more shares than what he should have and the stock actually stalled
out” at a certain price, instead of continuing to gradually climb upward. Id. at
207.
We conclude, however, that this fact—standing alone—does little to
undercut the potency of the other evidence establishing Mr. Clark’s culpability
for the charged conspiracy. This is particularly true because Mr. Clark’s alleged
act of rebellion was short-lived and pusillanimous. In this regard, the evidence
shows that Mr. Clark did not continue selling out of turn; shortly after his
co-conspirators learned of his conduct, Mr. Gordon, “took care of it” by
contacting Mr. Clark and getting him to “get back in line” with the conspirators’
plan. Id. at 209, 211. Therefore, rather than suggesting to a rational factfinder
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that Mr. Clark was not involved in the unlawful conspiratorial plan, this stock-
trading incident easily could have indicated that Mr. Clark’s knowing adherence
to, and cooperation with, the conspiratorial plan was the rule, not the exception.
See United States v. Jackson, 482 F.2d 1167, 1173 (10th Cir. 1973) (“If the
conspiracy is established and the convicted persons knowingly contributed their
efforts in furtherance of it, then the convictions must stand.”); cf. United States
Thornburgh, 645 F.3d 1197, 1205–07 (10th Cir. 2011) (rejecting argument that
defendant withdrew from the conspiracy, where evidence showed that defendant
“continued to participate in the conspiracy” but just “no longer communicated”
with one of his co-conspirators); United States v. Maldonado-Rivera, 922 F.2d
934, 963 (2d Cir. 1990) (“The goals of all the participants need not be congruent
for a single conspiracy to exist, so long as their goals are not at cross-purposes.”).
In other words, this stock-trading incident may well have reflected the obverse of
Mr. Clark’s suggested inference and thus militated in favor of the jury’s
determination that Mr. Clark was guilty of the charged conspiracy. See United
States v. Rutland, 705 F.3d 1238, 1251 (10th Cir. 2013) (“A person is a member
of a conspiracy if he was aware of the common purpose, willingly participated in
the conspiracy, and intended to advance the purpose of the conspiracy.”).
In sum, there was sufficient evidence for any rational factfinder to
determine that Mr. Clark was a member of the charged pump-and-dump
conspiracy. Accordingly, we reject Mr. Clark’s sufficiency-of-the-evidence
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challenge to the conspiracy charge. 9
2. Wire Fraud
Mr. Clark claims that the evidence on the wire fraud charge was
insufficient to support his conviction because the government failed to prove that
he intended to defraud investors through his participation in the scheme. See
United States v. Welch, 327 F.3d 1081, 1104 (10th Cir. 2003) (explaining that the
elements of wire fraud include “an intent to defraud”). However, the evidence
already set forth is more than sufficient to support a rational jury’s finding that
Mr. Clark had an intent to defraud. 10
Mr. Clark makes much of the fact that, in the promotional materials that
were sent to potential buyers, he had no duty to disclose his intent to sell shares.
Duty or not, the promotional materials contained false and misleading
information. See, e.g., R., Vol. VIII, at 3144–48 (Test. of Mark Lindberg, dated
Apr. 6, 2010). Moreover, Mr. Clark was engaged in coordinated selling to inflate
9
Similarly, we reject Mr. Clark’s hollow assertion that “the evidence
presented at trial . . . indicates that the price of the stock in the various companies
increased because of market events.” Aplt. Opening Br. at 26. While there were
other factors apart from the fraudulent conduct of Mr. Clark and his
co-conspirators that could have affected the stock prices, the jury was not
required to necessarily conclude that they did. See Gordon, 710 F.3d at 1144
n.22; cf. Jenkins, 633 F.3d at 802 (“Materiality in securities fraud does not
depend on demonstration of a market reaction to the misstatements.”).
10
The magnitude of the evidence—which implicates Mr. Clark, as well
as Mr. Gordon—is further explicated in our decision resolving the Gordon appeal.
See, e.g., Gordon, 710 F.3d at 1142–44.
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the sales price of stock, id. at 207–12; and he later profited significantly, id. at
174–75. Any rational trier of fact could infer easily that Mr. Clark possessed a
fraudulent intent based on this evidence. See Jenkins, 633 F.3d at 804.
3. Securities Fraud
Mr. Clark further challenges the sufficiency of the evidence on the
securities fraud counts (Counts 11–15). “Under 15 U.S.C. § 78j(b), any person
who uses or employs a manipulative or deceptive device in connection with the
sale of any security commits securities fraud.” Id. at 801–02. And Rule 10b-5,
which implements § 78j(b), “forbids the making of ‘any untrue statement of a
material fact.’” Id. at 802 (quoting 17 C.F.R. § 240.10b-5(b)).
Mr. Clark does not allege that the evidence was insufficient on any specific
element of the securities fraud offense. Rather, he claims that the government
failed to establish securities fraud because (1) “there is always risk involved” in
trading penny stocks, (2) Mr. Clark had no duty to disclose in the promotional
materials his intention to sell shares, and (3) the fact that he sold shares out of
line with the rest of the group suggests that “he was not connected to any
agreement to defraud.” Aplt. Opening Br. at 28. We reject the latter two
contentions for the reasons that we articulated supra in disposing of Mr. Clark’s
challenges to his conspiracy and wire fraud convictions.
As for the first contention, it may be quite true that trading in penny stocks
is risky. See Hoxworth v. Blinder, 74 F.3d 205, 207 n.1 (10th Cir. 1996) (“‘Penny
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stocks’ are low-priced, high risk equity securities. The securities are frequently
traded outside well-established trading markets.” (emphasis added)); accord
Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 175 n.14
(3d Cir. 2001). However, on this record, this fact is completely irrelevant. The
magnitude of the risk accompanying an investment does not mean its investors are
any less harmed by fraudulent conduct; even investors who are inclined to tolerate
a great deal of risk are legally entitled under the securities laws to be protected
from fraudulent conduct that distorts their picture of the material variables
associated with the investment. See, e.g., United States v. Russo, 74 F.3d 1383,
1393–95 (2d Cir. 1996) (rejecting multiple challenges to defendants’ mail fraud
and securities fraud convictions, stemming from defendants’ unlawful scheme to,
inter alia, manipulate the price of penny stocks). Mr. Clark and his
co-conspirators engaged in manipulations of penny stock that had just such a
distorting effect. Put simply, in light of the evidence against Mr. Clark, any
rational trier of fact could conclude that he, along with others in the conspiracy,
committed securities fraud.
4. Money Laundering
Finally, of the six counts in the indictment relating to money laundering,
the jury convicted Mr. Clark of only one—Count 18; it alleged that the defendants
transmitted $245,000 of funds derived from the conspiracy. Mr. Clark challenges
the sufficiency of the evidence regarding this count, contending that there was no
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evidence that any transfer of funds forming the basis for this money laundering
charge directly involved him. The government concedes that Mr. Clark “was not
personally involved in the transaction on which his money laundering conviction
. . . was based.” Aplee. Br. at 28. Instead, the government argues that Mr. Clark
is liable under a Pinkerton theory.
Under the Supreme Court’s decision in Pinkerton v. United States, 328 U.S.
640, 646–48 (1946), “a defendant [may be held] responsible for the crimes of his
co-conspirators, if those crimes are committed to help advance the conspiracy and
are within the reasonably foreseeable scope of the conspiracy.” Irvin, 682 F.3d at
1274; see also United States v. Rosalez, 711 F.3d 1194, 1206 (10th Cir. 2013)
(discussing Pinkerton and noting that the Court “explained the basic notion
behind coconspirator liability” in that case). As noted, the evidence supports the
reasonable inference that Mr. Clark was an active member of the fraudulent
pump-and-dump conspiracy. Laundering the proceeds of such a conspiracy would
“help advance the conspiracy,” Irvin, 682 F.3d at 1274, in that it would facilitate
the concealment of the source of the funds. See United States v. Massey, 48 F.3d
1560, 1567 n.3 (10th Cir. 1995) (“[T]he jury could reasonably conclude that the
acts of mail fraud and money laundering were both in furtherance of the
[fraudulent loan] conspiracy and reasonably foreseeable.”); see also United States
v. Pretty, 98 F.3d 1213, 1220 (10th Cir. 1996) (holding, in the context of a
bribery conspiracy, that “the jury’s inference that the intent of these [financial]
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transactions was at least in part to conceal the source of the funds was a
reasonable one”). Consequently, a reasonable factfinder could have determined
that it was reasonably foreseeable to Mr. Clark—as an active participant in the
pump-and-dump conspiracy—that money laundering activities would be
undertaken to further the conspiracy. And, more specifically, such a factfinder
could have concluded that the fund transfer at issue in Count 18 was reasonably
foreseeable to Mr. Clark and that, under a Pinkerton theory, he was accountable
for it.
Thus, we reject Mr. Clark’s suggestion that he could not be found
criminally liable for Count 18 because he did not personally participate in the
monetary transaction at issue. See United States v. Moreland, 622 F.3d 1147,
1169 (9th Cir. 2010) (“Pursuant to the Pinkerton doctrine, sufficient evidence
exists in this case to uphold [the defendant’s] convictions for the substantive
money laundering charges provided that: (1) there is sufficient evidence to uphold
his conviction for conspiracy, (2) the money laundering offenses were committed
in furtherance of the conspiracy while [the defendant] was a member of the
conspiracy, and (3) the actions providing the basis for the substantive charges
were reasonably foreseeable to [the defendant].”); United States v. Sullivan, 522
F.3d 967, 977 (9th Cir. 2008) (“Even if [the defendant] was not directly involved
in the wire transfers [to conceal proceeds of an unlawful bankruptcy fraud
scheme], a rational juror could have found that the transfers were reasonably
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foreseeable to him as part of the conspiracy . . . .”); see also Rosalez, 711 F.3d at
1207 (holding that a defendant convicted of conspiracy to assault the victim could
be held responsible under Pinkerton for the victim’s murder, even though he was
not present during the assault, because “the murder of [the victim] was not an act
that occurred separately from the assault [i.e., the object of the conspiracy], but
rather was a direct, and entirely foreseeable, result of the vicious assault carried
out on him”); United States v. Silvestri, 409 F.3d 1311, 1336 (11th Cir. 2005)
(“[T]he Pinkerton doctrine has been applied to money laundering conspiracy
cases; a defendant who joins a money laundering conspiracy may be found
substantively liable for money laundering offenses committed by
co-conspirators.”). Accordingly, Mr. Clark’s sufficiency-of-the-evidence
challenge to Count 18 is unavailing.
C. Refusal to Appoint Attorney
Mr. Clark claims that he was denied a fair trial when the district court
rejected his request under provisions of the Criminal Justice Act (“CJA”), 18
U.S.C. § 3006A, to appoint substitute or additional counsel with expertise in
securities law.
In November 2009, Mr. Clark’s attorney, Allen Smallwood, sought to
withdraw from his representation of Mr. Clark, citing Mr. Clark’s inability to pay
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his legal fees. 11 The district court denied Mr. Smallwood’s request, noting his
extensive involvement with the case for over two years. In February 2010, Mr.
Smallwood filed a motion under the CJA and asked the court to appoint an
attorney with securities-law experience as either substitute counsel or co-counsel
for Mr. Clark. The district court denied the motion.
Mr. Clark argues that this denial violated his right to a fair trial. He draws
our attention to two things: first, that the CJA requires that more than one
attorney be appointed in an extremely difficult case; and second, that the
government moved successfully for a declaration under the Speedy Trial Act that
the case was “complex” and required more extensive preparation and a
continuance of the trial, see R., Vol. I, at 103 (Unopposed Mot. of United States
to Declare This Case a Complex Matter, filed Feb. 26, 2009) (referencing 18
U.S.C. § 3161(h)(7)(A)–(B) 12). In essence, Mr. Clark claims that he was entitled
11
In this same motion, three other attorneys representing Mr. Clark
also sought to withdraw. These attorneys were R. Thomas Seymour, Scott A.
Graham, and Anthony L. Allen of Seymour & Graham, LLP. They entered their
appearance as “additional counsel” for Mr. Clark on October 1, 2009. R., Vol. I,
at 346. They did not replace Mr. Smallwood, and, at least as the district court
saw it, “their involvement was limited.” Id. Specifically, they were brought in
for two purposes: to oppose the government’s motion to revoke Mr. Clark’s
release pending trial and to persuade the court to permit the liquidation of assets
for the purpose of paying attorneys’ fees. See id. at 152 (Entry of Appearance,
filed Oct. 1, 2009) (“This appearance is, at present, limited to representation of
Mr. Clark in respect of the Government’s Motion to Revoke Release and in
respect of the issue of payment of attorneys’ fees in the case.”).
12
The motion actually cites 18 U.S.C. §§ 3161(h)(8)(A)–(B). In 2008,
(continued...)
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to a securities-law expert either as a substitute for, or in addition to, Mr.
Smallwood.
1. Standard of Review
We review the district court’s denial of a motion to substitute counsel for
an abuse of discretion. See United States v. Hutchinson, 573 F.3d 1011, 1024
(10th Cir. 2009); United States v. Anderson, 189 F.3d 1201, 1210 (10th Cir.
1999). To warrant substitution, a defendant must demonstrate “good cause, such
as a conflict of interest, a complete breakdown of communication or an
irreconcilable conflict which leads to an apparently unjust verdict.” Hutchinson,
573 F.3d at 1024 (quoting United States v. Beers, 189 F.3d 1297, 1302 (10th Cir.
1999)) (internal quotation marks omitted); see United States v. Byrum, 567 F.3d
1255, 1265–66 (10th Cir. 2009) (discussing factors applicable in addressing this
issue). The overriding question is whether the district court’s decision was one of
the “rationally available choices given the facts and the applicable law in the case
at hand.” Hutchinson, 573 F.3d at 1024 (quoting Shook v. Bd. of Cnty. Comm’rs,
543 F.3d 597, 603 (10th Cir. 2008)) (internal quotation marks omitted).
12
(...continued)
however, “Congress redesignated 18 U.S.C. § 3161(h)(8) as 18 U.S.C.
§ 3161(h)(7).” United States v. Hernandez-Mejia, 406 F. App’x 330, 331 n.2
(10th Cir. 2011); see Judicial Administration and Technical Amendments Act of
2008, Pub. L. No. 110-406, § 13, 122 Stat. 4291, 4294 (2008). We utilize the
current numbering of the applicable provisions of § 3161(h) in addressing Mr.
Clark’s contentions in this appeal.
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“As CJA matters rarely generate published decisions,” United States v.
Romero-Gallardo, 245 F.3d 1159, 1160 (10th Cir. 2001), there is little authority
on the standard of review applicable to a district court’s decision to deny
appointment of additional, expert counsel under the CJA. Other circuits have
reviewed somewhat analogous decisions for an abuse of discretion. See, e.g.,
United States v. Ensign, 491 F.3d 1109, 1113–15 (9th Cir. 2007); United States v.
Reed, 658 F.2d 624, 628 (8th Cir. 1981); see also 3B Charles Alan Wright &
Peter J. Henning, Federal Practice and Procedure § 737, at 113 (4th ed. 2013)
(“The number of counsel to be assigned is . . . in the discretion of the appointing
authority . . . .”).
Guided by these authorities, 13 we conclude that the district court’s decision
to refuse appointment of additional counsel for a defendant, like its refusal to
substitute counsel, see Hutchinson, 573 F.3d at 1024, is reviewable only for an
abuse of discretion. The abuse-of-discretion standard is appropriate because the
decision we are tasked with reviewing is at bottom a judgment call, given the
factual circumstances of the case. Where the court is tasked with evaluating the
prejudice that would befall a defendant absent additional counsel, it must consider
a vast array of contextually specific matters related to the way the proceedings
13
Mr. Clark’s brief is silent regarding the appropriate standard of
review to assess the propriety of the district court’s decision on this matter,
whereas the government suggests that we should review for an abuse of
discretion, see Aplee. Br. at 47.
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have advanced. Consequently, there “will not necessarily be a single right
answer, but a range of possible outcomes the facts and law at issue can fairly
support.” Big Sky Network Can., Ltd. v. Sichuan Provincial Gov’t, 533 F.3d
1183, 1186 (10th Cir. 2008); see United States v. Gabaldon, 91 F.3d 91, 93–94
(10th Cir. 1996) (applying an abuse-of-discretion standard to motions which
required the district court to “examin[e] . . . the prejudicial impact of an error or
errors when viewed in the context of an entire case”). And, “rather than pick and
choose among [those outcomes] ourselves, we will defer to the district court’s
judgment so long as it falls within the realm of these rationally available
choices.” Big Sky Network, 533 F.3d at 1186.
As for the scope and content of the district court’s inquiry concerning
requests to add counsel, we find instructive decisions addressing whether to
permit CJA funding for “investigative, expert, and other services necessary for
adequate representation,” United States v. Solon, 596 F.3d 1206, 1209 (10th Cir.
2010) (quoting 18 U.S.C. § 3006A(e)(1)) (internal quotation marks omitted); cf.
United States v. Kennedy, 64 F.3d 1465, 1473–74 (10th Cir. 1995) (“An indigent
defendant is not entitled to all the assistance that a wealthier counterpart might
buy, but rather only to the basic and integral tools.”), a decision that we also
review for an abuse of discretion, see Solon, 596 F.3d at 1210 (“‘Appointing an
expert is within the discretion of the [c]ourt,’ therefore, we review the denial of a
CJA funding request for an abuse of discretion.” (alteration in original) (citation
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omitted) (quoting United States v. Ready, 574 F.2d 1009, 1015 (10th Cir. 1978))).
And in such instances, “the defendant must do more than allege that [an expert’s]
services would be helpful.” Kennedy, 64 F.3d at 1470. Rather, he “must
convince the court that the [additional] services are ‘necessary to an adequate
defense.’” Solon, 596 F.3d at 1209–10 (quoting United States v. Greschner, 802
F.2d 373, 376 (10th Cir. 1986)).
We note that, unlike a defendant’s right to spend his own money ad
infinitum on counsel of his choosing, see United States v. Gonzalez-Lopez, 548
U.S. 140, 144 (2006), the right to court-appointed counsel is geared toward the
goal of ensuring constitutionally adequate representation, see United States v.
Flanders, 491 F.3d 1197, 1216 (10th Cir. 2007) (citing Caplin & Drysdale, 491
U.S. at 624); see also 18 U.S.C. § 3006A(a) (“Representation under each [CJA]
plan shall include counsel and investigative, expert, and other services necessary
for adequate representation.” (emphases added)). Indeed, the federal judiciary’s
model CJA plan contemplates that a defendant might request the appointment of
an “additional attorney,” but suggests that such appointment is available only in
“extremely difficult case[s] . . . [and] in the interest of justice.” 7A Guidelines
for Administering the CJA and Related Statutes § 230.53.20 (2013) [hereinafter
CJA Guidelines]; see Romero-Gallardo, 245 F.3d at 1160 (suggesting that the
guidelines “do not allow for multiple counsel” outside of limited circumstances).
In all cases, we consider whether the denial of CJA funding for an additional
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attorney impeded the defendant’s defense, not incidentally, but directly enough to
undermine a constitutionally “adequate” defense. 14 See Kennedy, 64 F.3d at1470–73.
2. Application to Mr. Clark’s Claim
Applying the abuse-of-discretion standard to the district court’s denial of
Mr. Smallwood’s motion for appointment of substitute or additional counsel, we
conclude that the district court acted within its discretion. The record shows that
Mr. Smallwood is a highly experienced criminal defense attorney. Further, Mr.
Clark hired him even prior to the return of the indictment, while the government
was investigating the activities of Mr. Clark and his alleged co-conspirators.
Thus, by the time of Mr. Smallwood’s CJA motion, he had represented Mr. Clark
for approximately two-and-a-half years—ample time to become familiar with the
facts and law applicable to Mr. Clark’s case.
There is no indication of a breakdown in communication between Mr. Clark
and Mr. Smallwood, nor a conflict of interest on Mr. Smallwood’s part, that
would justify substitution of counsel, see Hutchinson, 573 F.3d at 1024, even
considering the fact that Mr. Clark could ostensibly no longer pay the balance of
14
We assume without deciding that Mr. Clark meets the CJA’s
financial eligibility requirements for the appointment of counsel and that a
defendant like Mr. Clark may request the appointment of an additional attorney
under the CJA where, like here, he has allegedly run out of funds to pay for
privately retained counsel who is otherwise obliged to remain active in the case.
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his legal fees, see United States v. O’Neil, 118 F.3d 65, 71–72 (2d Cir. 1997)
(“There is little question that a defendant’s failure to pay fees may cause some
divisiveness between attorney and client, but we presume that counsel will
continue to execute his professional and ethical duty to zealously represent his
client, notwithstanding [a] fee dispute.”).
Furthermore, in light of Mr. Smallwood’s criminal-defense experience and
his conduct in the case, the district court could quite reasonably conclude that Mr.
Smallwood’s representation was sufficient for an adequate defense. In other
words, it could reasonably conclude that an additional attorney—even one more
familiar with securities law—was not “necessary to an adequate defense.” See
Solon, 596 F.3d at 1209–10 (emphasis added) (quoting Greschner, 802 F.2d at
376) (internal quotation marks omitted); United States v. Porter, 405 F.3d 1136,
1141–42 (10th Cir. 2005) (concluding that there was no abuse of discretion in the
district court’s denial of the defendant’s motion to substitute counsel because,
inter alia, there was nothing in the record demonstrating that the attorney could
not provide an adequate defense).
This is particularly true where the charges in this case, at their essence,
concerned general allegations of fraud, and did not, for instance, present the need
to synthesize highly technical securities regulations. And, although the charges
were premised on voluminous, finance-related discovery, Mr. Clark has failed to
point to any problems with Mr. Smallwood’s representation that would undermine
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the soundness of the district court’s decision to deny his motion for substitute or
additional counsel. For these reasons, the district court did not abuse its
discretion in denying Mr. Clark’s motion for appointment of substitute or
additional counsel.
Finally, we reject as unpersuasive Mr. Clark’s facile attempt to link the
concept of a “complex” case under the Speedy Trial Act to the concept of an
“extremely difficult” case contemplated by the CJA Guidelines. See CJA
Guidelines § 230.53.20. The CJA Guidelines and the Speedy Trial Act serve
wholly different purposes. Compare, e.g., id. § 110.10 (noting that the goal of the
Defender Services program is to “ensure that the right to counsel guaranteed by
the Sixth Amendment, the [CJA], and other congressional mandates is enforced
on behalf of those who cannot afford to retain counsel and other necessary
defense services”), with Speedy Trial Act of 1974 § 101, 18 U.S.C. § 3161(suggesting that the Act was passed “so as to assure a speedy trial” in line with
the defendant’s Sixth Amendment right). In sum, for the reasons noted, we
conclude that Mr. Clark’s appointment-of-counsel challenge fails.
D. Severance
Mr. Clark asserts that the district court erred in refusing to allow him to
stand trial alone. Principally, he objects to the district court’s decision not to
sever his trial from that of Mr. Gordon, his co-defendant. He reasons that the
admission of inculpatory out-of-court statements by Mr. Gordon violated Bruton
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v. United States, 391 U.S. 123 (1968). He also challenges the district court’s
decision on three other grounds. Specifically, Mr. Clark contends that the
prejudicial effects of the district court’s refusal not to allow him to stand trial
alone were that (1) he was prevented from compelling Mr. Gordon to testify, (2)
evidence that was relevant to the culpability of his co-defendants unfairly spilled
over onto him, and (3) he was forced to stand trial with co-conspirators who were
unavailable for cross-examination or confrontation. We conclude that the district
court did not commit reversible error.
1. Bruton Claim
Mr. Clark argues that the government—through Mr. Lindberg’s
testimony—presented evidence that Mr. Gordon often referred to Mr. Clark as
“heat-resistant,” meaning that he was “somebody who would not buckle under the
pressure of an SEC investigation.” R., Vol. VIII, at 2974; see id. at 186. The
admission of these statements at his joint trial, reasons Mr. Clark, violated his
Sixth Amendment right of confrontation as explicated in Bruton.
“We review de novo the legal issue of whether the admission of the
non-testifying codefendant’s statements/confession in a joint trial violated the
defendant’s Sixth Amendment right to confrontation.” United States v.
Sarracino, 340 F.3d 1148, 1158–59 (10th Cir. 2003) (quoting United States v.
Verduzco-Martinez, 186 F.3d 1208, 1212 (10th Cir.1999)) (internal quotation
marks omitted).
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The Confrontation Clause provides: “In all criminal prosecutions, the
accused shall enjoy the right . . . to be confronted with the witnesses against him
. . . .” U.S. Const. amend. VI. “In Bruton, the Court held that it would violate
the Confrontation Clause to allow the confession of a non-testifying co-defendant
that implicated the defendant to be used against that defendant [at their joint
trial].” United States v. Patterson, 713 F.3d 1237, 1247 (10th Cir. 2013); see
United States v. Smalls, 605 F.3d 765, 768 n.2 (10th Cir. 2010) (“In Bruton, the
Court held that [the] defendant was deprived of his Sixth Amendment right to
confrontation where his accomplice’s confession . . . was introduced at their joint
trial.”); see also Greene v. Fisher, 132 S. Ct. 38, 42–43 (2011) (noting that
Bruton establishes that “the Confrontation Clause forbids the prosecution to
introduce a nontestifying codefendant’s confession implicating the defendant in
the crime”).
Bruton applies “even if the jury is instructed to consider that confession
only against the codefendant.” Richardson v. Marsh, 481 U.S. 200, 201–02
(1987); see Dickerson v. United States, 530 U.S. 428, 458 (2000) (Scalia, J.,
dissenting) (noting that Bruton “was based . . . upon the self-evident proposition
that the inability to cross-examine an available witness whose damaging
out-of-court testimony is introduced violates the Confrontation Clause, combined
with the conclusion that in these circumstances a mere jury instruction can never
be relied upon to prevent the testimony from being damaging” (emphases added)).
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We have cautioned that Bruton’s rule is “a narrow one”; it applies only
when the co-defendant’s statement is “so inculpatory as to the defendant that the
practical and human limitations of the jury system cannot be ignored.” Sarracino,
340 F.3d at 1160 (quoting United States v. Rahseparian, 231 F.3d 1267, 1277
(10th Cir. 2000)) (internal quotation marks omitted); see United States v. Nash,
482 F.3d 1209, 1218 (10th Cir. 2007) (“[T]he rule announced in Bruton is a
limited one.”). However, Bruton provides the foundation for affirmative remedial
measures—most notably, severance—upon a proper showing that a co-defendant’s
statement offered into evidence would inculpate the defendant. See Nash, 482
F.3d at 1217–18 (discussing the Bruton process). These measures are meant to
avoid the extrinsic (i.e., collateral) damage to a defendant from the jury’s undue
consideration of a co-defendant’s facially inculpatory statement—a factor that the
jury would be highly unlikely to “disregard” and one that cannot be remedied by a
curative instruction. See Bruton, 391 U.S. at 128–29. When evidence is admitted
in violation of Bruton, “we must reverse unless we can conclude beyond a
reasonable doubt that the constitutional error was harmless.” Sarracino, 340 F.3d
at 1161 (citing Chapman v. California, 386 U.S. 18, 24 (1967)).
Since Bruton was decided, the Supreme Court’s Confrontation Clause
jurisprudence has evolved, beginning with Crawford v. Washington, 541 U.S. 36(2004), and extending through Davis v. Washington, 547 U.S. 813 (2006), to the
Court’s more recent Confrontation Clause decisions: specifically, Melendez-Diaz
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v. Massachusetts, 557 U.S. 305 (2009); Michigan v. Bryant, 131 S. Ct. 1143(2011); and Bullcoming v. New Mexico, 131 S. Ct. 2705 (2011). “In Crawford,
the Supreme Court held that the Sixth Amendment precluded the admission of
out-of-court statements that are testimonial, unless the witness is unavailable and
the defendant had a prior opportunity to cross-examine the witness.” Patterson,
713 F.3d at 1246–47; see Crawford, 541 U.S. at 53–54; see also Bryant, 131 S.
Ct. at 1153 (“[Crawford] limited the Confrontation Clause’s reach to testimonial
statements and held that in order for testimonial evidence to be admissible, the
Sixth Amendment ‘demands what the common law required: unavailability and a
prior opportunity for cross-examination.’” (quoting Crawford, 541 U.S. at 68)).
Like our sister circuits, we have recognized the need to interpret Bruton
“consistent[ly] with the present state of Sixth Amendment law.” Smalls, 605 F.3d
at 768 n.2; see, e.g., United States v. Figueroa-Cartagena, 612 F.3d 69, 85 (1st
Cir. 2010); United States v. Johnson, 581 F.3d 320, 325–26 (6th Cir. 2009);
United States v. Avila Vargas, 570 F.3d 1004, 1008–09 (8th Cir. 2009).
Notably, Crawford made clear that the Confrontation Clause applies only if
a statement is “testimonial” in nature, for “[o]nly statements of this sort cause the
declarant to be a ‘witness’ within the meaning of the Confrontation Clause.”
Davis, 547 U.S. at 821 (citing Crawford, 541 U.S. at 51). Indeed, reflecting on
the text and history of the Confrontation Clause, the Court in Crawford explained
that out-of-court testimonial statements, or the “‘bear[ing of] testimony,’” were
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the core “evil[s] at which the Confrontation Clause was directed.” 541 U.S. at50–51 (quoting 2 N. Webster, An American Dictionary of the English Language
(1828)); see id. at 50 (noting the Founders’ concern with the “use of ex parte
examinations as evidence against the accused”); see also Bullcoming, 131 S. Ct.
at 2713 (“[F]idelity to the Confrontation Clause [does not] permit[] admission of
[t]estimonial statements of witnesses absent from trial,” absent a showing that
“the declarant is unavailable, and only where the defendant has had a prior
opportunity to cross-examine.” (fourth alteration in original) (quoting Crawford,
541 U.S. at 59) (internal quotation marks omitted)). 15
Crawford indicates that the class of testimonial statements that fall within
the protective ambit of the Confrontation Clause includes, but is not limited to,
statements covered also by Bruton. See Crawford, 541 U.S. at 51–52 (listing as
examples of testimonial statements “extrajudicial statements . . . contained in
15
The Crawford Court also opined that the clause generally “does not
bar the use of testimonial statements for purposes other than establishing the truth
of the matter asserted.” 541 U.S. at 59 n.9. In other words, as we have clarified,
“A defendant’s confrontation rights are implicated by the admission of
testimonial statements against the defendant . . . only when they are admitted to
establish the truth of the matter asserted in the statement.” United States v.
Pablo, 696 F.3d 1280, 1287 (10th Cir. 2012); accord United States v. Walker, 673
F.3d 649, 657–58 (7th Cir. 2012). That is, the Confrontation Clause’s scope
generally extends no further than testimonial hearsay. The upshot is that the
clause “constitute[s] an absolute bar to the admissibility of a testimonial hearsay
statement where the declarant was unavailable to testify at trial and the defendant
had no prior opportunity to cross-examine the declarant.” Smalls, 605 F.3d at
774.
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formalized testimonial materials, such as affidavits, depositions, prior testimony,
or confessions” (emphasis added) (quoting White v. Illinois, 502 U.S. 346, 365
(1992) (Thomas, J., concurring in part and concurring in judgment)) (internal
quotation marks omitted)); see also Jones v. Basinger, 635 F.3d 1030, 1049 n.6
(7th Cir. 2011) (“The use of a non-testifying accomplice’s confession . . . in
seventeenth century England set in motion the series of legal reforms eventually
resulting in the Confrontation Clause itself.” (citing Crawford, 541 U.S. at44–46)); cf. Smalls, 605 F.3d at 768 n.2 (noting that “the Bruton rule, like the
Confrontation Clause upon which it is premised, does not apply to nontestimonial
hearsay statements”). Thus, we are obliged to “view Bruton through the lens of
Crawford” and, in doing so, we consider “whether the challenged statement is
testimonial.” Figueroa-Cartagena, 612 F.3d at 85.
In Smalls, based upon our synthesis of Crawford, Davis, and our own
Confrontation Clause precedent, we posited two possible definitions of a
“testimonial” statement: (1) “a formal declaration made by the declarant that,
when objectively considered, indicates the primary purpose for which the
declaration was made was that of establishing or proving some fact potentially
relevant to a criminal prosecution”; or (2) “[a] formal statement [such that] a
reasonable person in the position of the declarant would objectively foresee that
the primary purpose of the statement was for use in the investigation or
prosecution of a crime.” 605 F.3d at 778; cf. United States v. Solorio, 669 F.3d
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943, 953 (9th Cir. 2012) (“[S]tatements made out-of-court with a primary purpose
other than possible prosecutorial use are nontestimonial.”). We did not choose in
Smalls between the two definitions because we found the statement at issue in
Smalls to be nontestimonial “regardless of which of the foregoing definitions we
apply.” 605 F.3d at 778. We employ the same approach here and conclude that
the statement at issue is not testimonial under either definition.
Mr. Clark contends that the evidence—through Mr. Lindberg’s
testimony—of Mr. Gordon’s out-of-court statements referring to Mr. Clark as
“heat-resistant” violates Bruton. However, because the statement is not
testimonial, we disagree. The statement was made to Mr. Lindberg, a
co-conspirator, in furtherance of the underlying conspiracy. In particular, the
group wanted to install Mr. Clark as president of Global Beverage so that, if
necessary, he could withstand the psychological pressure of a federal
investigation and not disclose the conspirators’ illegal endeavors. Mr. Gordon’s
statements were not made to law enforcement investigators, nor could a
reasonable person in Mr. Gordon’s position have objectively foreseen that the
primary purpose for his statements was for use in the investigation or prosecution
of the pump-and-dump conspiracy. See Bryant, 131 S. Ct. at 1154. Thus, we
conclude that they fall outside the protective ambit of the Confrontation Clause
and, by extension, Bruton.
In considering a Confrontation Clause challenge—predicated on Crawford
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and Bruton—to the admission of two statements made in the context of a
narcotics-conspiracy prosecution, we recently reached a very similar conclusion.
Specifically, in Patterson, we succinctly reasoned as follows: “The admission of
these two statements violated neither Crawford nor Bruton because both
statements were made in furtherance of a conspiracy and were therefore
nontestimonial.” 713 F.3d at 1247. Likewise, our decision in United States v.
Townley, 472 F.3d 1267 (10th Cir. 2007), bolsters our holding here. There,
following Crawford and Davis, we determined that certain out-of-court
co-conspirator statements were not testimonial because “[n]one of [them] was
made at a hearing or trial or as a result of police interrogation, and no reasonable
person in the position of the[] declarants would have objectively foreseen that
these statements would be used in the investigation or prosecution of the[]
conspiracy.” Townley, 472 F.3d at 1275 (citation omitted); see Melendez-Diaz,
557 U.S. at 324 (suggesting that “business records or statements in furtherance of
a conspiracy” are “statements that by their nature [a]re not testimonial” (quoting
Crawford, 541 U.S. at 56) (internal quotation marks omitted)); see also Bourjaily
v. United States, 483 U.S. 171, 181–83 (1987) (discussing the co-conspirator
exception to the hearsay rule and its relationship to the protections afforded by
the Confrontation Clause). We thus concluded in Townley that the Confrontation
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Clause did not apply. 16 472 F.3d at 1275. For like reasons, the clause does not
apply here either. In sum, based upon the foregoing, we conclude that, because
Mr. Gordon’s statements were not testimonial, Mr. Clark’s Bruton claim must
fail.
2. Other Severance Issues
Mr. Clark makes three remaining arguments concerning the district court’s
failure to allow him to stand trial alone. Mr. Clark argues that the prejudicial
effect of this decision was that (1) he was prevented from compelling Mr. Gordon
to testify, (2) evidence that was relevant to the culpability of his co-defendants
unfairly spilled over onto him, and (3) he was forced to stand trial with
co-conspirators who were unavailable for cross-examination or confrontation. We
reject each argument and conclude that the district court did not abuse its
discretion in denying severance.
16
We also recognized that the Supreme Court’s Confrontation Clause
jurisprudence, specifically Crawford and Davis, “le[ft] longstanding interpretation
of the Federal Rules of Evidence untouched,” and we rejected the contention that
Crawford “somehow eviscerated Federal Rule of Evidence 801(d)(2)(E),”
applicable to co-conspirator statements. Townley, 472 F.3d at 1273. “Rule
801(d)(2)(E) provides that ‘[a] statement is not hearsay if . . . [t]he statement is
offered against a party and is . . . a statement by a coconspirator of a party during
the course and in furtherance of the conspiracy.’” Id. (alterations in original)
(quoting Fed. R. Evid. 801(d)(2)(E)). In order for a statement to be “in
furtherance of the conspiracy” it must be “intended to promote the conspiratorial
objectives.” United States v. Reyes, 798 F.2d 380, 384 (10th Cir. 1986) (quoting
United States v. Hamilton, 689 F.2d 1262, 1270 (6th Cir. 1982)) (internal
quotation marks omitted).
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a. Standard of Review
There are two significant provisions that frequently are implicated by
severance claims. The first is Federal Rule of Criminal Procedure Rule 8(b),
which “permits an indictment to charge two or more defendants ‘if they are
alleged to have participated in the same act or transaction, or in the same series of
acts or transactions, constituting an offense or offenses.’” United States v.
Pursley, 577 F.3d 1204, 1215 (10th Cir. 2009) (quoting Fed. R. Crim. P. 8(b)); cf.
Fed. R. Crim. P. 13 (“The court may order that separate cases be tried together as
though brought in a single indictment or information if all offenses and all
defendants could have been joined in a single indictment or information.”). Rule
8(b) embodies a “preference in the federal system for joint trials of defendants
who are indicted together,” Pursley, 577 F.3d at 1215 (quoting Zafiro v. United
States, 506 U.S. 534, 537 (1993)) (internal quotation marks omitted); see Marsh,
481 U.S. at 209 (“Joint trials play a vital role in the criminal justice system
. . . .”), and it is broadly construed so as “to enhance the efficiency of the judicial
system,” United States v. Morales, 108 F.3d 1213, 1219 (10th Cir. 1997).
Moreover, we indulge a presumption that co-conspirators in a conspiracy trial
should be tried together. See Pursley, 577 F.3d at 1215; see also United States v.
Stiger, 413 F.3d 1185, 1197 (10th Cir. 2005) (“[I]n a conspiracy trial it is
preferred that persons charged together be tried together.” (quoting United States
v. Scott, 37 F.3d 1564, 1579 (10th Cir. 1994)) (internal quotation marks omitted)).
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The second provision is Federal Rule of Criminal Procedure 14(a). It
provides that “a court ‘may’ sever the trials of more than one defendant if joinder
‘appears to prejudice a defendant or the government.’” Pursley, 577 F.3d at 1215(quoting Fed. R. Crim. P. 14(a)). Prejudice for Rule 14(a) purposes means
“actual prejudice.” United States v. Caldwell, 560 F.3d 1214, 1221 (10th Cir.
2009). Thus, “a district court should grant a severance under Rule 14 only if
there is a serious risk that a joint trial would compromise a specific trial right of
one of the defendants, or prevent the jury from making a reliable judgment about
guilt or innocence.” Zafiro, 506 U.S. at 539. That risk is present when the jury
considers evidence against a defendant that is admissible only against a
co-defendant, and is increased when multiple defendants are tried together “in a
complex case” and “have markedly different degrees of culpability.” Sarracino,
340 F.3d at 1165 (quoting Zafiro, 506 U.S. at 539) (internal quotation marks
omitted). However, “neither ‘a mere allegation that defendant would have a
better chance of acquittal in a separate trial’ nor an argument that evidence
against one defendant would have a ‘spillover effect’ on another defendant
demonstrates prejudice.” United States v. Jones, 530 F.3d 1292, 1303 (10th Cir.
2008) (quoting United States v. Small, 423 F.3d 1164, 1182 (10th Cir. 2005)).
The district court is the primary referee on severance claims, for we, as an
appellate court, have only a distant view of the ring. “Rule 14 leaves the
determination of risk of prejudice and any remedy for such prejudice to the sound
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discretion of the district court,” Morales, 108 F.3d at 1220, and “[a] defendant
seeking to vacate a conviction based upon the denial of a motion to sever faces a
steep challenge,” Pursley, 577 F.3d at 1215; see United States v. Wardell, 591
F.3d 1279, 1299 (10th Cir. 2009). “We review the district court’s denial of a
motion to sever for an abuse of discretion.” Pursley, 577 F.3d at 1215 (quoting
United States v. Hall, 473 F.3d 1295, 1302 (10th Cir. 2007)) (internal quotation
marks omitted).
b. Inability to Compel Mr. Gordon’s Testimony
Mr. Clark asserts that his inability to compel Mr. Gordon’s testimony at
their joint trial violated his confrontation rights. He argues that, without Mr.
Gordon as a witness, he “did not have the opportunity to rebut [Mr.] Gordon’s
otherwise hearsay statement about [Mr.] Clark being ‘heat resistant,’” which was
“the most significant statement” used against him. Aplt. Opening Br. at 19. He
also states that the joint trial “greatly affected” his own decision not to testify in
his defense. Id.In this context, to determine whether the district court abused its discretion
in denying a severance motion, we look to a nonexhaustive list of factors dubbed
the “McConnell factors.” See Pursley, 577 F.3d at 1215 (internal quotation marks
omitted). These are:
1) the likelihood that the co-defendant would in fact testify at the
movant’s severed trial and waive his Fifth Amendment privilege;
2) the significance of the testimony in relation to the defendant’s
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theory of defense; 3) the exculpatory nature and effect of such
testimony; 4) the likelihood that the co-defendant’s testimony
would be impeached; 5) the extent of prejudice caused by the
absence of the testimony; 6) the effect of a severance on judicial
administration and economy; [and] 7) the timeliness of the
motion.
Id. at 1215–16 (alteration in original) (quoting United States v. McConnell, 749
F.2d 1441, 1445 (10th Cir. 1984)) (internal quotation marks omitted).
Under this rubric, Mr. Clark offers nothing that would permit us to
meaningfully evaluate the district court’s severance decision. For instance, he
makes no argument concerning the likelihood that Mr. Gordon would have agreed
to testify at Mr. Clark’s separate trial. Nor does he explain what the significance
or exculpatory value of that testimony would have been, or articulate how he was
prejudiced by the absence of such testimony.
Mr. Clark provides only the conclusory, unilluminating assertions that he
could have “rebut[ted]” Mr. Gordon’s reference to him as being “heat resistant”
and that the joint trial “greatly affected” his own decision not to testify. Aplt.
Opening Br. at 19 (internal quotation marks omitted). As to the latter contention,
he does not explain whether he would have actually testified, or as to what
matters his testimony would have been relevant. Cf. United States v. Lindsey, 782
F.2d 116, 118 (8th Cir. 1986) (concluding that the defendant failed to show that
he was prejudiced by the district court’s failure to sever his counts of conviction,
even though he argued that he would have testified at a separate trial, because he
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failed to make “a convincing showing that he ha[d] both important testimony to
give concerning one count and a strong need to refrain from testifying on the
other”).
Furthermore, Mr. Clark has pointed to no basis for a conclusion that Mr.
Gordon’s admitted comments would have been subject to an effective counter-
attack in a separate trial. “[S]peculation is insufficient to require severance.”
Pursley, 577 F.3d at 1216; see Hall, 473 F.3d at 1302 (holding that the district
court did not abuse its discretion in denying a motion for severance where the
defendant had not shown that the exculpatory value of a co-defendant’s testimony
in a separate trial could have made a material difference); United States v. Powell,
982 F.2d 1422, 1433 (10th Cir. 1992) (concluding that there was no abuse of
discretion in the district court’s denial of severance even where a co-defendant
signed an affidavit indicating that he would testify because the “testimony would
totally lack credibility” in light of “[t]he overwhelming evidence at trial” against
the co-defendant that would impeach him). With effectively nothing to go on
from Mr. Clark, and in light of our preference for joint co-conspirator trials, see
Pursley, 577 F.3d at 1215, we conclude that the district court did not abuse its
discretion in denying severance on this ground.
c. Spillover Effect of Evidence Against Co-defendants
Mr. Clark further argues that evidence introduced against his co-defendants
had a spillover effect that prejudiced his defense. He points in particular to Mr.
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Lindberg’s testimony that persistently referred to “the group” but “barely
mentioned” Mr. Clark. Aplt. Opening Br. at 15 (internal quotation marks
omitted). However, Mr. Lindberg specifically described Mr. Clark’s involvement
in the conspiracy at several points during his testimony. See, e.g., R., Vol. VIII,
at 174–75 (noting that Mr. Clark was “one of those people” that “kept money”
when the conspirators started dumping Deep Rock stock); id. at 186 (noting that
Mr. Gordon recommended installing Mr. Clark as president of the company that
was ultimately called Global Beverage because “he’s been a good soldier in the
past and he’s heat-resistant”); id. at 212 (responding to a question asking whether
Mr. Clark sold Deep Rock stock out of turn again, after Mr. Gordon admonished
him, “I don’t believe he did”). The evidence shows that Mr. Clark was involved
and cooperated with his co-defendants in, and substantially profited from, the
illegal scheme. Simply put, the evidence against Mr. Clark and his co-defendants
was “overlapping and intertwined.” Morales, 108 F.3d at 1220; see United States
v. Zapata, 546 F.3d 1179, 1192 (10th Cir. 2008) (concluding that there was no
prejudice stemming from a risk of “spillover” evidence in a conspiracy trial
because “there was clear and direct testimony at trial that specifically implicated
[the defendant] in the conspiracy”); see also Wardell, 591 F.3d at 1300 (“[T]he
nearly insuperable rule in this circuit is that a defendant cannot obtain severance
simply by showing that the evidence against a co-defendant is more damaging
than the evidence against herself.” (quoting United States v. Dazey, 403 F.3d
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1147, 1165 (10th Cir. 2005)) (internal quotation marks omitted)).
Finally, although Mr. Gordon was charged with three additional counts in
the twenty-four count indictment, the facts relating to the separate counts did not
render null the jury’s ability “to segregate the evidence associated with each
defendant’s individual actions.” Zapata, 546 F.3d at 1191. The district court
instructed the jury to segregate out evidence that was not directed at Mr. Clark,
see R., Vol. VIII, at 2516–17 (Jury Instructions, given Apr. 29, 2010), and Mr.
Clark has not articulated any reason why the jury was unable to follow the
instructions in this respect, see Zapata, 546 F.3d at 1191–92 (suggesting that the
district court’s instruction limited the prejudice of any “spillover” to a defendant
that might result from counts concerning his co-defendants); see also Caldwell,
560 F.3d at 1213 (“We presume that the jury obey[s] [its] instructions.”).
We thus reject Mr. Clark’s claim of prejudicial spillover and conclude that
the district court did not abuse its discretion in denying severance on this ground.
d. Absent Co-defendants
Finally, Mr. Clark claims that conducting the trial with absent
co-defendants—specifically, Dean Sheptycki, the creator of much of the
promotional material, and Josh Lankford—violated his rights. Under indictment
for the pump-and-dump conspiracy, Mr. Sheptycki was apprehended in the
Bahamas, but the Bahamian government declined to honor the government’s
extradition request, so he was not present for the trial. Also indicted,
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co-conspirator Lankford’s whereabouts were unknown at the time of trial and the
government classified him as a fugitive. Neither Mr. Sheptycki nor Mr. Lankford
was actually tried by the government in absentia in the case, but there was
considerable evidence detailing their roles in the charged conspiracy. Mr. Clark
complains that his legal rights were infringed because he was “unable to cross-
examine or otherwise confront” Mr. Lankford and Mr. Sheptycki. Aplt. Opening
Br. at 18. We reject this claim.
Standing alone, Mr. Clark’s assertions do not satisfy his “‘heavy burden’ of
showing ‘real prejudice.’” Wardell, 591 F.3d at 1299 (quoting McConnell, 749
F.2d at 1444). He does not explain how the absence of Messrs. Sheptycki and
Lankford “compromise[d] a specific trial right” of his—including his right of
cross-examination under the Confrontation Clause 17—or “prevent[ed] the jury
from making a reliable judgment about [his] guilt or innocence.” Stiger, 413 F.3d
at 1197 (emphasis added) (quoting United States v. Edwards, 69 F.3d 419, 434
(10th Cir. 1995)) (internal quotation marks omitted).
Simply pointing out that certain co-defendants were absent does not suffice.
Cf. United States v. Edmonson, 962 F.2d 1535, 1545 (10th Cir. 1992) (holding
17
Mr. Clark’s arguments on this issue are decidedly speculative. See,
e.g., Aplt. Opening Br. at 18 (“[Mr.] Clark, at the very least, deserves a trial
where either evidence of statements or actions that could be considered
statements by Lankford and/or Sheptycki are excluded.” (emphasis added)). He
points to no evidence offered by the government that would violate his
confrontation rights.
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that absence of co-defendant tried in absentia “did not have a significant adverse
impact upon the case” and thus “it would obviously [have been] unnecessary for
the trial judge to grant a severance”); cf. also United States v. Tarango, 396 F.3d
666, 674 (5th Cir. 2005) (“[A defendant is] not prejudiced simply by the fact that
her co-defendant [i]s being tried in absentia.”); Murr v. United States, 200 F.3d
895, 904 (6th Cir. 2000) (“Petitioner has not made the required showing of
factually specific and compelling prejudice as a result of the joint trial. He offers
absolutely no evidence in support of his claim that [the co-defendant’s] absence
constituted extreme prejudice to him in that the jury assumed that [the
co-defendant’s] absence indicated that Petitioner was guilty.”). 18 We conclude
that the district court did not abuse its discretion in denying severance on this
ground.
18
We pause briefly to note that Mr. Clark also intimates that he was
prejudiced because his name appeared on the jury verdict forms along with
Messrs. Sheptycki and Lankford. See Aplt. Opening Br. at 19–20. We do not
construe Mr. Clark as presenting a distinct ground of error by this suggestion, in
that it appears as a tangential remark in the section of his brief addressing the
alleged prejudicial spill-over effect caused by the introduction of evidence related
to his co-conspirators. However, even if it were an assertion of error, we would
conclude that it is waived. When the issue of verdict forms came up before the
district court, Mr. Clark specifically requested, over the government’s insistence
to the contrary, that Mr. Sheptycki’s and Mr. Lankford’s names remain on the
forms. See R., Vol. VIII, at 2403–06 (Trial Tr., dated Apr. 27, 2010). Thus, Mr.
Clark would have invited any error associated with the inclusion of the two men’s
names on the verdict form and, consequently, waived any appellate challenge
regarding the matter. See, e.g., United States v. Teague, 443 F.3d 1310, 1317–18
(10th Cir. 2006) (holding that a party waives an issue for appeal when he
“‘invites’ an error by suggesting that the court take particular action”).
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E. Speedy Trial Act
Mr. Clark claims that the district court erred in refusing to dismiss the
indictment pursuant to the Speedy Trial Act, 18 U.S.C. §§ 3161–3174, primarily
because the court’s March 10, 2009, ends-of-justice continuance “was
inadequate.” Aplt. Opening Br. at 23.
Roughly two weeks after the indictment was unsealed, the government filed
an unopposed motion to declare the case “complex” under 18 U.S.C. § 3161(h) in
light of the massive pending discovery and complex legal issues presented. On
March 10, the district court granted the motion, concluding that the “ends of
justice” outweighed the public’s interest in a speedy trial. More specifically,
noting that it had considered the statutory factors and our precedent, the court
stated:
The substantial volume of discovery supports the government’s
argument that this case is unusually complex and, with counsel
exercising due diligence, will require more than the 70 days
provided by the Act for the parties to prepare for trial. It would
not be reasonable to expect defense counsel to review the
voluminous evidence, prepare pretrial motions, and adequately
represent their clients at trial in less than 70 days. Failure to
treat this case as a complex case would deny counsel for all
parties time to prepare, and this consideration outweighs
defendant’s interest in a speedy trial.
. . . While a speedy resolution of criminal cases serves the public
interest, it does not benefit the public if a complex criminal case
is rushed and a miscarriage of justice results. Given the complex
nature of these proceedings, the ends-of-justice served by treating
this as a complex case outweigh the public’s interest in a speedy
trial.
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R., Vol. I, at 121 (Order Granting Unopposed Mot. of the United States to Declare
This Case a Complex Matter, filed Mar. 10, 2009). In that order, it struck the
initial trial date. Then, through entry of a minute order one week later, the court
set the trial date for January 19, 2010.
After reassignment, the new district judge (i.e., Judge Payne) struck the
January 19 trial date. On March 17, 2010, Mr. Clark and Mr. Gordon filed a joint
motion to dismiss the indictment under the Speedy Trial Act, challenging, inter
alia, the validity of the court’s ends-of-justice continuance. The district court
denied the 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 . . . .” 19 Bloate v. United States, 559 U.S. 196, 198–99 (2010);
accord United States v. Loughrin, 710 F.3d 1111, 1119 (10th Cir. 2013); United
States v. Larson, 627 F.3d 1198, 1203 (10th Cir. 2010). The Act excludes
“certain enumerated events” from this time period, see Bloate, 559 U.S. at 199(discussing 18 U.S.C. § 3161(h)), such as “proceedings concerning the
defendant,” 18 U.S.C. § 3161(h)(1), and time which the court determines should
19
Mr. Clark agrees that the seventy-day clock under the Act
commenced on the day the indictment was unsealed, because that was when he
first appeared before the court. See 18 U.S.C. § 3161(c)(1) (noting “the trial of a
defendant charged in an information or indictment . . . shall commence within
seventy days from the filing date (and making public) of the information or
indictment” (emphasis added)).
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be excluded because “the ends of justice served by the granting of such
continuance outweigh the best interests of the public and the defendant in a
speedy trial,” id. § 3161(h)(7)(A). See also Loughrin, 710 F.3d at 1119 (noting
that “not every day counts towards the seventy-day limit because of a multitude
of statutory exclusions”). The Act permits exclusion of time under
§ 3161(h)(7)(A) to serve the ends of justice where “the case is so unusual or so
complex . . . that it is unreasonable to expect adequate preparation for pretrial
proceedings or for the trial itself within the time limits established by [the Act].”
Id. § 3161(h)(7)(B)(ii).
We review the district court’s decision to grant a continuance in 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)). “At the same time, we review the district court’s compliance
with the Act de novo and its findings of fact for clear error.” Loughrin, 710 F.3d
at 1117; see Toombs, 574 F.3d at 1268 (noting that we “review[] de novo . . . the
district court’s compliance with the legal requirements of the Speedy Trial Act”).
Mr. Clark narrowly frames his argument, challenging the district court’s
March 10 ends-of-justice order, claiming that the order did not “set[] forth and
justify[] any specific time period for the continuance,” Aplt. Opening Br. at
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22–23, and was otherwise conclusory and lacking in the detail required by the
Act. We are not persuaded by Mr. Clark’s arguments.
First, Mr. Clark does not explain why the district court’s failure to specify
immediately a trial date when it entered the March 10 ends-of-justice continuance
order constituted legal error, and we discern no foundation for that notion.
Indeed, we have expressly held that “while it is preferable to set a specific ending
date for a continuance, . . . an open-ended continuance for a reasonable time
period is permissible.” United States v. Spring, 80 F.3d 1450, 1458 (10th Cir.
1996); see, e.g., United States v. Santiago-Becerril, 130 F.3d 11, 18 (1st Cir.
1997) (“Open-ended continuances are not prohibited per se.”). In assessing
whether an open-ended continuance was terminated (i.e., delimited by a definite
end date) in a reasonable time frame, courts naturally look beyond the
continuance order itself to other documents in the record associated with it. See
Spring, 80 F.3d at 1458; see also United States v. Ross, 703 F.3d 856, 877 (6th
Cir. 2012) (“[T]he latter order’s reference to ‘the new trial date’ was not an
‘open-ended period’ but was merely a reference to the new, June 24, 2008 trial
date specified in the former order. These orders satisfy the statutory
requirements.”).
To the extent that the March 10 order created an open-ended continuance, a
survey of the record reveals that the district court supplied a concrete end date
(i.e., a trial date of January 19) in its minute order with virtually no delay—viz.,
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one week later. This week was clearly a reasonable period. See Spring, 80 F.3d
at 1458 (“The new trial date was set, thereby providing a specific ending date to
the continuance, eleven days later . . . . Given the circumstances of this case, the
open-ended continuance initially granted was reasonable in length.”).
Furthermore, focusing on Mr. Clark’s challenge to the adequacy of the
district court’s findings, we reject Mr. Clark’s assertion that they were conclusory
and insufficient under our case law. When analyzing the terms of the same order
in our Gordon decision, we concluded that the district court properly struck the
ends-of-justice balance to justify the continuance of the trial date to January 19,
2010, and that conclusion is controlling here. See 710 F.3d at 1158–59.
In sum, we find no merit in Mr. Clark’s speedy trial challenges and reject
them.
III. Conclusion
For the foregoing reasons, we AFFIRM Mr. Clark’s conviction.
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