United States v. Gene A. Tyrrell , 269 F. App'x 922 ( 2008 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
___________________________________
MARCH 17, 2008
THOMAS K. KAHN
CLERK
No. 05-14492
__________________________________
D.C. Docket No. 02-0011-CR-T-17MAP
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
GENE A. TYRRELL,
DEAN A. SINIBALDI,
JOSEPH CUCINIELLO,
Defendants-Appellants.
___________________________________
Appeals from the United States District Court
for the Middle District of Florida
___________________________________
(March 17, 2008)
Before EDMONDSON, Chief Judge, CARNES and FAY, Circuit Judges.
PER CURIAM:
Dean A. Sinibaldi (“Sinibaldi”), Joseph Cuciniello (“Cuciniello”), and Gene
A. Tyrrell (“Tyrrell”), were part of a conspiracy group which sold false and
unregistered security offerings through the Millenium and Stonehedge Groups and
caused great losses to many elderly individuals. Appellants were convicted on
specific charges of securities fraud, mail fraud, money laundering, selling of
unregistered securities, and conspiracy. Sinibaldi, Cuciniello, and Tyrrell raise
numerous issues1 challenging evidentiary rulings, legal rulings, their convictions,
1
The issues are:
1. Whether the district court abused its discretion in denying the defendants’
motions for mistrial after the severance of the case against Schultz (Cuciniello’s
issue by adoption; Tyrrell’s issue by adoption);
2. Whether the district court abused its discretion in allowing the admission of
evidentiary rulings including: Miscellaneous Business Records, Abel Flores
Reyes’ Testimony, Albert Melchoir and expert witness Charles Stutts’ testimony,
Receiver Gary Lipson’s testimony, and Sinibaldi’s “RIA” certification status;
3.Whether the district court abused its discretion in declining to substitute juror
Bennett with an alternate juror;
4. Whether the district court correctly denied Sinibaldi judgments of acquittal as
to the mail fraud and other challenged counts of conviction;
5. Whether the district court correctly denied Sinibaldi a judgment of acquittal as
to the conspiracy charged in count one;
6. Whether Sinibaldi was entitled to a new trial based on asserted cumulative
error;
7. Whether the district court erred in calculating the loss attributable to Sinibaldi
pursuant to U.S.S.G. § 2F1.1 (b)(1) (1998) or plainly err in ordering restitution in
the amount of that loss;
8. Whether the district court correctly denied Cuciniello’s motions of judgments
of acquittal or a new trial;
9. Whether the district court abused its discretion in declining to dismiss the
indictment based on alleged prosecutorial vindictiveness;
10. Whether Cuciniello’s guidelines-range sentence was unreasonable;
11. Whether the district court correctly denied Tyrrell’s motions for judgments of
acquittal or a new trial; and
12. Whether the district court erred in failing to declare a mistrial as to all
2
and the sentences imposed.2 We affirm.
Factual Background
Millennium Investment, Inc. (“MII”) was created for the alleged purpose of
helping new businesses become publicly traded companies. Defendants Danny
Wey (“Wey”) and Gregory G. Schultz (“Schultz”) served as officers and directors
of MII. Shortly thereafter, Millennium Investment, Inc. Trust (“MIIT”) was
created to market and sell unregistered notes. The funds raised by MIIT were
remitted to MII. Schultz’s duties included serving as legal counsel to the
Millenium entities, drafting MIIT offering documents, and directing MIIT’s fund-
raising efforts. Wey’s duties included identifying the investments in which MIIT
could place its funds. Although Wey had a criminal background which included a
federal conviction of felony fraud offenses, MIIT investors were not so advised
despite MIIT disclosure documents with experience profiles for both Wey and
Schultz.
Once MIIT commenced its operations, Schultz informed Wey that MIIT
defendants when defendant Schultz was severed midway through the trial.
2
Sinibaldi was sentenced to a total of 168 months imprisonment, 36 months of
supervised release, and restitution of $5,333,374. Cuciniello was sentenced to total of 210
months’ imprisonment, 36 months of supervised release, and restitution of $15,290,601.38.
Tyrrell was sentenced to 136 months imprisonment, 36 months supervised release, and restitution
of $10,200,307.95.
3
notes which matured in less than nine months were exempt from state and federal
registration requirements under the “commercial note exemption.” Also, several
of the notes MIIT issued included a “banker’s acceptance” provision stating that
the Bank of Bermuda Limited, which is one of the largest banks in the Carribean,
would guarantee the notes in the event of default. As was ultimately discovered,
this bank had never issued a “banker’s acceptance” or any other guarantee to
MIIT. In fact, neither the bank nor any of its subsidiaries had ever had a
relationship with MIIT, its officials or entities.
Sinibaldi was the top seller at MIIT. For six months, he was involved in
fifty-eight MIIT transactions, valued at $1,655,235.68, that purported to be
secured by the banker’s acceptance provision. He assured investors that MIIT
notes were fully secured by the Bank of Bermuda and were a completely safe
investment. At first, Sinibaldi received a commission of up to ten percent of any
MIIT investments he secured, but in order to evade securities laws, Schultz
determined that this compensation should be characterized as “consulting or
advisory payments,” even though Sinibaldi never offered any marketing or
consulting services to the Millenium entities. Over a two year period, Sinibaldi
and his company, Delta Financial Services, Inc., received a total of $465,234.47 in
cash payments and additional securities from MII (which were sold for about
4
$85,000). From October 1996 to July 1999, individuals invested more than $6
million in MIIT securities; however, by July 1999, MIIT had more than $1 million
in past-due notes. Furthermore, despite the fact that MIIT had defaulted on its
obligations in October 1998, defendants falsely informed new investors that MIIT
notes offered “good security.” By mid-1999, MIIT stopped raising funds.
Defendants then formed the Stonehedge entities. Securities from these
entities were marketed through individuals in the financial or insurance business,
allegedly to provide funding to companies that were about to make public stock
offerings. The Stonehedge offering material stated that “Stonehedge invests their
portfolio in a company called Millenium as its vehicle for making the
investments.” Stonehedge also advised investors that Millennium principals had
over 40 years of experience in taking companies public.
From August 1998 to November 1999, Cuciniello incorporated eight
Stonehedge entities in Florida. Then in September and October 1999, despite
being aware of an ongoing investigation of defendants’ fraudulent activities by the
Florida Department of Banking and Finance (“DBF”), Cuciniello incorporated
another seven Stonehedge entities in New York. Cuciniello served as an officer of
several Stonehedge entities, was an authorized signator for ten Stonehedge-related
bank accounts, and participated in seminars to train others to market Stonehedge
5
securities. Between March 1998 and April 2001, Cuciniello and his family
received more than $850,000 from Stonehedge entities.
From March 1998 through November 2000, more than $12.5 million was
invested in the Stonehedge offerings. Only about twenty percent of this money
was invested as represented in the Stonehedge offering materials. However, up to
thirty-three percent of these invested funds were paid out as commissions to those
involved in the process.
In January 1998, Cuciniello brought co-defendant Robert Phillips
(“Phillips”) to the Stonehedge program. At a meeting held in Clearwater, Florida,
Schultz provided further detail to Phillips about the program. Phillips then agreed
to market the Stonehedge program through his network of insurance agents, West
Coast Distributors, Inc. (“West Coast”). Out of every Stonehedge investment
placed by Phillips’s agents, West Coast would receive a commission of up to
twenty-seven percent. In order to evade state and federal securities laws, Schultz
told Phillips that these payments must be characterized as “referral fees” rather
than “commissions.”
In the fall of 1998, Phillips recruited Tyrrell to sell Stonehedge securities.
After Tyrrell’s involvement in the Stonehedge securities, the funds invested
increased dramatically, from approximately $30,000 to $100,000 per month to as
6
much as $1,000,000 per month. His sales organization was the largest of all the
sales organizations engaged in the Stonehedge marketing effort. Tyrrell
participated in and created a training manual for seminars to train new agents to
market Stonehedge securities. Also, Tyrrell was the president, secretary, treasurer,
and sole shareholder of one of the entities–The Stonehedge Group, Inc.-X, and
thus executed the shares of stock issued in connection with this entity.
From March through July 1999, DBF served investigative subpoenas for
testimony and documents on MIIT, Sinibaldi, Global Research International, Inc.,
and many of the Stonehedge entities. Before responding to the subpoenas,
defendants tried to conceal their fraudulent activities by supplementing MIIT
investor files with backdated correspondence, and modifying and supplementing
Stonehedge investor files to give them the appearance of conforming to applicable
state and federal securities laws.
In October 1999, DBF filed a civil action in Pinellas County, Florida,
seeking an injunction and appointment of a receiver for MII, MIIT, various
Stonehedge entities, and First Dominion Venture Capital, Inc., and named as
“relief defendants” Schultz, Wey, Cuciniello, and Sinibaldi. The state circuit court
granted DBF’s requests, entered an injunction, and appointed attorney Gary
Lipson as receiver.
7
The defendants ceased using the Millennium and Florida based Stonehedge
entities and turned all of their attention to the New York-based Stonehedge
offerings. There they raised more than $3.2 million from November 1999 through
November 2000. Despite the millions of dollars raised through the sale of these
unregistered securities, Millenium investors lost more than $5.3 million and
Stonehedge investors lost more than $11.4 million. Sinibaldi, Cuciniello, and
Tyrrell invested none of their money in any of these entities.
After the state circuit court made its rulings, Cuciniello convinced Phillips
that the injunction did not prevent him from marketing Stonehedge securities
outside of Florida. Thereafter, the Stonehedge sales that Phillips and his agents
made were processed through Tyrrell’s Arizona-based company, Innovative
Financial Concepts, LLC (“IFC”). About seven weeks after the injunction was
entered, Phillips withdrew from the Stonehedge program.
Before Lipson’s appointment, Tyrrell received his commissions from West
Coast, through IFC. After the appointment, Tyrrell began to receive his
commissions from the New York-based Stonehedge XII entity through another
Arizona-based company recently registered by his wife–TMT Consulting.
Payments to TMT Consulting were typically remitted to IFC.
The jury convicted Sinibaldi on the overarching conspiracy count, two
8
counts of securities fraud, three counts of selling unregistered securities, four
counts of mail fraud, conspiracy to commit money laundering, eight counts of
engaging in illegal monetary transactions, and seven counts of money laundering.
Cuciniello was convicted on the overarching conspiracy count, one count of
securities fraud, three counts of selling unregistered securities, eight counts of
mail fraud, conspiracy to commit money laundering, seven counts of engaging in
illegal monetary transactions, and seven counts of money laundering. Tyrrell was
convicted on the overarching conspiracy count, one count of securities fraud,
seven counts of mail fraud, conspiracy to commit money laundering, and seven
counts of money laundering. This appeal followed.
Discussion
I. Defendants’ Motions for Mistrial after Severance and Challenge to Standby
Counsel
Schultz originally represented himself pro se, but due to apparent health
problems, he suffered a blackout and collapsed in court. Because of Schultz’s
illness and admittance to a hospital, the court appointed stand-by counsel on his
behalf. The court explained this change to the jury. On March 16, 2005, because
Schultz continued to suffer tremendous pain and had difficulty concentrating, the
district court severed his case and granted him a mistrial.
9
Appellants first challenge their motion for a mistrial based upon the
severance of Schultz from the remainder of the trial. The basis of this argument
was the prejudicial effect of the jury’s observation of Schultz’s apparent health
problems. Sinibaldi also challenges the district court’s appointment of standby
counsel for Schultz. After a thorough review of the record, we conclude that none
of these arguments provide any basis for relief.
We review a district court’s denial of a severance for abuse of discretion.
See U.S. v. Day, 405 F.3d 1293, 1297 n. 3 (11th Cir. 2005). First, the district court
was correct in initially denying a severance because “the general rule is that
defendants who are jointly indicted should be tried together, particularly in
conspiracy cases.” U.S. v. Baker, 432 F.3d 1189, 1236 (11th Cir. 2005) (citing
U.S. v. Pedrick, 181 F.3d 1264, 1272 (11th Cir. 1999)). Next, Sinibaldi has no
standing to challenge the district court’s appointment of Schultz’s standby
counsel, only Schultz has such standing. The jury observed Schultz’s health
problems before the appointment of counsel and the court properly explained the
appointment to them. The jury was fully instructed to draw no inferences from
such. Thus, Sinibaldi’s arguments that the jury would have interpreted the
appointment as an indication of guilt is without merit and there was no abuse of
discretion. Sinibaldi also argues that Schultz’s ultimate severance from the trial
10
deprived the remaining defendants of Schultz’s assistance in their joint defense.
We find this argument frivolous. Schultz was available as a witness, but was
never called by anyone.
Sinibaldi argues that the defendants were prejudiced because evidence of
events in which only Schultz had been involved was introduced at trial. Because
this case involves a conspiracy, all defendants involved in the conspiracy are liable
for the reasonably foreseeable consequences of the conspiracy including the acts
of co-conspirators. See U.S. v. Silvestri, 409 F.3d 1311, 1335 (11th Cir. 2005);
U.S. v. Alas, 196 F.3d 1250, 1251 (11th Cir. 1999); U.S. v. Mothersill, 87 F.3d
1214, 1218 (11th Cir. 1996) (“Hence, a court need not assess the individual
culpability of a particular conspirator provided the substantive crime was a
reasonably foreseeable consequence of the conspiracy.”) (internal quotation marks
omitted). The trial court gave the jury clear detailed instructions designed to
eliminate any confusion of “prejudicial spillover.” The jury was carefully
instructed to consider each defendant separately as to each count in the indictment.
There was no error.
II. Defendants’ Challenge to the District Court’s Evidentiary Rulings
We review the district court’s evidentiary rulings for abuse of discretion.
11
See U.S. v. Lyons, 403 F.3d 1248, 1250 (11th Cir. 2005).
A. Miscellaneous Business Records
The documents at issue are GX 115-1A– (a copy of the outside cover of a
MIIT file concerning investor Jack Overmire), GXs 112G, 115-1-G– (exhibits
containing investor correspondence), and GX 35– (past-due MIIT notes pertaining
to several investors). According to Wey’s testimony, these and a series of other
MIIT documents had been created and maintained by the defendants in the
ordinary course of their business. Thus because “a trial judge has broad discretion
to determine the admissibility of [business record] evidence[,]” the court properly
admitted these documents as business records pursuant to Fed. R. Evid. 803(6).
U.S. v. Bueno-Sierra, 99 F.3d 375, 378 (11th Cir. 1996). These business records
do not violate the Confrontation Clause because none of them are testimonial.3
B. Abel Flores Reyes’ Testimony
Sinibaldi argues that the district court abused its discretion by allowing the
former mayor of San Lorenzo, Nicaragua, Abel Flores Reyes, to testify over the
defendants’ objections, regarding a conversation he had before executing an
agreement which purported to establish a business relationship between the
3
A record would be testimonial if it was “made under circumstances which would lead
the declarant to believe the statement would be available for use at a later trial.” U.S. v.
Underwood, 446 F.3d 1340, 1347 (11th Cir. 2006).
12
government of San Lorenzo and the Millennium and Stonehedge entities. Reyes
stated that during this conversation, Claudia Garcia told him that attorneys in
Miami, Florida, would provide money to build housing for the impoverished in San
Lorenzo if he would execute the agreement at issue. According to Sinibaldi, this
testimony was inadmissible hearsay and a violation of the Confrontation Clause.
We disagree. Reyes’ testimony established that no business relationship existed
between the government of San Lorenzo and the Millennium and Stonehedge
entities. Furthermore, Reyes’ testimony about the conversation that prompted him
to execute the agreement explained why Reyes had signed it. This challenged
testimony was not offered to prove the truth of any matter asserted and therefore it
is not hearsay under Fed. R. Evid. 801(c). See Cargill v. Turpin, 120 F.3d 1366,
1373 n.15 (11th Cir. 1997) (“Hearsay is an out-of-court statement offered to prove
the truth of the matter asserted,” but evidence that is not offered or admitted for its
truth is not hearsay) (internal quotation marks omitted). Rather, it was offered to
show his mental state and why he signed the document.
C. The testimony of Albert Melchoir and Expert Witness Charles Stutts
Sinibaldi further argues that the district court abused its discretion in
allowing Albert Melchoir, an Assistant General Counsel for the State of Florida
Office of Financial Regulation, who was primarily responsible for dealing in cases
13
involving securities, to answer questions advanced by Schultz on cross-
examination in an “over responsive” manner. Melchoir explained why DBF had
sought ex parte injunctive relief in October 1999. He stated that as a result of his
investigation, he “was certain that Stonehedge had raised about $3 million and
were continuing to sell unregistered securities through unregistered agents.” The
defendants have never disputed that the Stonehedge offerings were unregistered.
They had always maintained that they were exempt from registration.
Sinibaldi next argues that Charles Stutts, the United States’ securities expert,
gave impermissible legal opinions during his testimony. The record convinces us
that the district court properly limited the scope of Stutt’s testimony, gave the jury
appropriate limiting instructions, instructed the jury on applicable securities law,
explained the role of an expert witness, and committed no error.
D. The Testimony of Receiver Gary Lipson
Sinibaldi argues that the district court abused its discretion by allowing Gary
Lipson, the receiver appointed by DBF, to make “improper commentary,” citing
comments from Lipson’s four days of trial testimony. The district court properly
sustained the defendant’s objection and instructed the jury to disregard the
14
“improper commentary”4 the defendant objected to. We assume they did.
E. Sinibaldi’s “RIA” Certification Status
Sinibaldi argues that the district court should have excluded as propensity
evidence a 1998 Lee County yellow pages advertisement, a 1999 brochure
advertising an estate planning seminar, and a business card, in which he falsely
held himself out to the public as a registered investment advisor or “RIA.”
Sinibaldi argues this evidence is inadmissible under Fed. R. Evid. 404(b).
However, this evidence demonstrated how Sinibaldi had conducted his fraudulent
marketing activities during the charged conspiracies. Furthermore, this evidence
was “inextricably intertwined with the evidence of the charged offense[s],” U.S. v.
Herre, 930 F.2d 836, 837 (11th Cir. 1991), and thus Rule 404(b) does not apply.
See U.S. v. Schlei, 122 F.3d 944, 989-90 (11th Cir. 1997) (concluding that
testimony of defendant’s unauthorized use of embassy letterhead to market forged
financial instruments was “admissible as intrinsic evidence” of the charged scheme
to defraud). Even though none of the Government’s witnesses indicated that they
had placed particular reliance on this specific misrepresentation in deciding
4
During Lipson’s cross-examination about a document he had recovered from the
defendants, Cuciniello’s counsel displayed a portion of the first page of the document on the
court’s projection system. After some heated questions regarding sections of the document,
Lipson made the challenged statement “You’re afraid to show the whole page, aren’t you?”
15
whether to invest in MIIT notes, this intrinsic evidence remains relevant and
admissible. Specific reliance is not required under the federal fraud statutes. See
Neder v. U.S., 527 U.S. 1, 24-25, 119 S. Ct. 1827, 1841 (1999). A scheme to
defraud must include a material misrepresentation, that is, “one having a natural
tendency to influence, or capable of influencing, the decision maker to whom it is
addressed.” U.S. v. Hasson, 333 F.3d 1264, 1271 (11th Cir. 2003), cert. denied,
541 U.S. 1056 (2004). Sinibaldi misrepresented that he was a registered RIA,
when in actuality, he did not even have a high school diploma. This
misrepresentation gave the false impression that he possessed a high level of
professional expertise and experience capable of influencing potential investors.
III. Whether the District Court Erred in Declining to Substitute Juror Bennet
Sinibaldi argues that the district court abused its discretion in declining to
substitute an alternate for juror Bennett. Under Fed. R. Crim. P. 24(c), “a trial
court may, in the exercise of its sound discretion, substitute an alternate juror for a
regular juror who has become unable or disqualified to perform h[er] duties.” U.S.
v. Holder, 652 F.2d 449, 451 (5th Cir. Unit B Aug. 1981).5
5
See Bonner v. Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc) (adopting as
binding precedent in the Eleventh Circuit, all decisions of the former Fifth Circuit announced
prior to October 1, 1981).
16
In a criminal case, any private communication, contact, or tampering
directly or indirectly, with a juror during a trial about the matter
pending before the jury is . . . deemed presumptively prejudicial, if not
made in pursuance of known rules of the court and the instructions and
directions of the court made during the trial, with full knowledge of
the parties.
Remmer v. U.S., 347 U.S. 227, 229, 74 S. Ct. 450, 451, 98 L. Ed. 654 (1954). “A
juror’s exposure to extraneous material or influence requires a new trial if the
exposure poses a reasonable possibility of prejudice to the defendant.” U.S. v.
Khanani, 502 F.3d 1281, 1291 (11th Cir. 2007) (internal quotations marks
omitted). To make a such a showing, “a defendant must establish that an extrinsic
contact with a jury, in fact, occurred.” Id. Once this showing is made, “the burden
shifts to the government to prove that the extrinsic contact was not prejudicial.” Id.
“The factual determination of whether consideration of extrinsic evidence caused
the defendant prejudice is committed to the trial court’s ‘large discretion.’”
BankAtlantic v. Blythe Eastman Paine Webber, Inc., 955 F.2d 1467, 1472 (11th
Cir. 1992). It must be noted that even though the juror states in her testimony “that
the extrinsic information was harmless, [it] is not controlling.” U.S. v. Bolinger,
837 F.2d 436, 440 (11th Cir. 1988). “The district court may consider such
testimony, but it must also consider other factors such as the nature of the extrinsic
evidence and the strength of the evidence properly presented by the government
against the defendant.” Id. (quoting U.S. v. Chastin, 198 F.3d 1338, 1351 (11th
17
Cir. 1999)).
Juror Bennett’s concern was a result of the lunch break on March 8, 2005.
Jurors Williams, Glandt, and Bennett were sitting at a table eating when the
defense attorneys arrived and sat at the table next to them. One of the lawyer’s
chair rubbed against the back of juror Bennett’s chair. The jurors then quickly
finished their lunch and returned to the courthouse. Immediately thereafter, the
court informed the defense that juror Williams had told the bailiff that she had a
concern about members of the defense who sat near her during the lunch break.
During voir dire, the district court properly questioned whether any of the jurors
had overheard anything said by the attorneys or anyone else at their table in the
restaurant. They all responded in the negative. The court then prohibited the
parties, counsel, and witnesses from eating lunch in a portion of the area
surrounding the courthouse and separated them from the jury.
The next day, juror Bennett addressed the district court stating that she did
not hear what the attorneys were talking about in the restaurant. The jurors were
already eating when the defense attorneys chose to sit next to them. She further
stated that her stress was because she had been instructed that jurors were not
supposed to be close to the attorneys on the case and that the attorneys in the
restaurant were “too close for comfort.” She had the utmost respect for the court
18
and wanted “to do the right thing” for everyone by reporting what had happened.
Juror Bennett further explained that she was stressed due to physical exhaustion
from commuting to and from the courthouse and performing her regular job
responsibilities after trial each day. Consequently, the court accommodated her by
allowing her to stay in a Tampa hotel any night she wanted to rest. The court then
assured juror Bennett that the restaurant incident would not be repeated, and that if
in the future she felt that she could not continue with her demands as a juror, she
should immediately tell the court. Juror Bennett affirmed that she felt better about
the situation. We believe these measures immediately resolved the situation.
Based on the foregoing, the district court committed no error by allowing juror
Bennett to remain on the panel.
IV. Defendants’ Motion for Acquittal on Mail Fraud and Other Challenged
Counts of Conviction
We review de novo the district court’s denial of a motion for judgment of
acquittal and view the evidence in the light most favorable to the verdict. U.S. v.
Byrd, 403 F.3d 1278, 1288 (11th Cir. 2005). “A conviction must be upheld unless
the jury could not have found the defendant guilty under any reasonable
construction of evidence.” Id.
“To prove mail fraud, the Government must show that the defendant (1)
19
intentionally participated in a scheme to defraud and (2) used the mails to execute
the fraudulent scheme.” U.S. v. Suba, 132 F.3d 662, 673 (11th Cir. 1998). “The
Government must establish only that the fraudulent scheme existed” and
circumstantial evidence of criminal intent can be sufficient. Id. Furthermore,
“[p]roof of a routine practice of using the mail to accomplish a business end is
sufficient to support a jury’s determination that mailing occurred in a particular
instance.” U.S. v. Waymer, 55 F.3d 564, 571 (11th Cir. 1995).
We find that there is sufficient evidence to prove use of the mails as to mail
fraud counts ten and twelve on which Sinibaldi was convicted. These two counts
concern MIIT investor Bernard Freund (“Freund”). Robert Freund, Freund’s
grandson, testified that the election form included with the letter that is the subject
of count ten had been completed by Freund, and also both that letter and the letter
that is the subject of count twelve had Freund’s home address at the time. The
form and substance of these letters is sufficient evidence to support the inference
that they were mailed. Furthermore, there is evidence that Millennium entities
typically had communicated with investors through the mail.6
6
Sinibaldi testified in a sworn statement that the Millenium entities’ “standard
procedure” was to send documents to and receive documents from investors through mail. Also,
Dan Wey testified that the Millenium entities typically had communicated with investors through
mail. Furthermore, numerous investors testified that the Millenium entities had communicated
with them through mail.
20
Sinibaldi further argues that the Government did not prove numerous overt
acts alleged in count one concerning the investment returns Sinibaldi falsely had
advised Millennium investors they could anticipate. However, for a defendant to
be convicted of a conspiracy to defraud pursuant to 18 U.S.C. § 371, the
government was only required to prove “an” overt act, not every overt act alleged.
See U.S. v. Ellington, 348 F.3d 984, 989 (11th Cir. 2003). There is direct evidence
of overt acts alleged in the paragraphs Sinibaldi is not now challenging. The
record also discloses circumstantial evidence supporting the overt acts in question.
The testimony of several investors made clear that Sinibaldi had falsely represented
that their MIIT notes would produce a twelve percent profit plus a five percent
bonus. This argument fails.
V. Defendants’ Motion for Acquittal on the Conspiracy Charged in Count One
This Court narrowly reviews an argument that the evidence failed to prove a
single, overarching conspiracy and “may reverse a jury’s finding that a single
conspiracy existed only if the evidence, viewed in the light most favorable to the
verdict, could not permit reasonable jurors to have found, beyond a reasonable
doubt, that there was a single conspiracy.” U.S. v. Anderson, 326 F.3d 1319, 1327
(11th Cir. 2003) (quoting U.S. v. Taylor, 17 F.3d 333, 337 (11th Cir. 1994).
21
Sinibaldi argues that Millenium and Stonehedge offerings evidenced two separate
conspiracies, rather than a single, overarching conspiracy. “Three relevant factors
determine whether a single conspiracy existed: (1) whether there was a common
goal, (2) the nature of the scheme, and (3) the overlap of the participants.” Id. “If
the proof shows the defendant knew the essential objective of the conspiracy, it
does not matter that he did not know all its details or played a very minor role in
the overall scheme.” Suba, 132 F.3d at 672. Furthermore, “[a] single conspiracy
may be found where there is a ‘key man’ who directs the illegal activities, while
various combinations of other people exert individual efforts toward the common
goal.” Taylor, 17 F.3d at 337 (quoting U.S. v. Gonzalez, 940 F.2d 1413, 1422
(11th Cir. 1991).
All of these factors are satisfied here. Among other things, the defendants
marketed an array of Millennium and Stonehedge offerings, whose common goal
was raising funds through the sale of unregistered securities that allegedly would
pay interest or other periodic monetary distributions. Furthermore, examples of
overlapping included the “Due-Diligence Worksheet” provided to Stonehedge
investors, which portrayed MIIT and Schultz as responsible for “help[ing] selected
companies go public” and Phillips, Tyrrell, and their respective companies, as
responsible for marketing the Stonehedge offerings. Finally, the district court
22
properly instructed the jury on single versus multiple conspiracies. There is ample
support for the jury’s finding that Millenium and Stonehedge offerings were part of
a single, unified conspiracy.
VI. Defendant’s Claim of a Cumulative Effect of Errors
We review any errors preserved for appeal, as well as any plain errors, to
determine whether the defendant’s substantial rights were affected. See U.S. v.
Adams, 74 F.3d 1093, 1099-1100 (11th Cir. 1996). Sinibaldi argues that the
“cumulative effect” of the errors he has alleged on appeal warrants a new trial.
“We have held that the cumulative effect of multiple errors may so prejudice a
defendant’s right to a fair trial that a new trial is required, even if the errors
considered individually are non-reversible.” U.S. v. Thomas, 62 F.3d 1332, 1343
(11th Cir. 1995) (internal quotation marks omitted). As discussed above, the
district court did not err as Sinibaldi contends; therefore, no cumulative errors
exist. See U.S. v. Waldon, 363 F.3d 1103, 1110 (11th Cir. 2004).
VII. Whether the District Court Erred in its Calculation of Loss Pursuant to
U.S.S.G. §2 F1.1(b)(1)
Sinibaldi contends that the district court erred in its calculation of the
$5,333,374 loss attributed to him and its order of restitution of the same amount.
We agree with the district court in holding Sinibaldi responsible for all of the
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losses attributed to the conspiracy. See U.S. v. Odom, 252 F.3d 1289, 1299 (11th
Cir. 2001) (explaining that in calculating restitution, “a defendant convicted of
participation in a conspiracy is liable not only for her own acts, but also those
reasonably foreseeable acts of others committed in furtherance of the conspiracy.”);
U.S. v. Dabbs,, 134 F.3d 1071, 1081 (11th Cir. 1998) (“The calculation of loss for
purposes of section 2F1.1 is not an exact science. [Under U.S.S.G. §2F1.1 cmt.,
n.8 (1994)] The loss need not be determined with precision. The court need only
make a reasonable estimate of the loss, given the available information.”)7. The
evidence supports the calculation made in this regard and, indeed the sum could
have been much larger.
VIII. Cuciniello’s Motions for Judgments of Acquittal or a New Trial
Cuciniello specifically argues that at the close of the evidence in the
Government’s case-in-chief, prosecutors had failed to establish ill will, or criminal
intent on the part of Appellant. This argument is without merit. “The Government
need not produce direct proof of scienter in a mail fraud case . . . circumstantial
evidence of criminal intent can suffice.” U.S. v. Hawkins, 905 F.2d 1489, 1496
(11th Cir. 1990). In fact, “[g]uilty knowledge can rarely be established by direct
7
We note that § 2F1.1 has been rolled into § 2B1.1 effective November 1, 2001;
however, that change does not affect our discussion of the claims being made in this case.
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evidence, especially in respect to fraud crimes which, by their very nature, often
yield little in the way of direct proof.” Suba, 132 F.3d at 673. Among other things,
Cuciniello incorporated eight of the sixteen Stonehedge entities, was an officer in
many of these entities, including being President of the Stonehege Group, Inc., was
an authorized signator for ten separate Stonehedge-related bank accounts, was a
cardholder of two Stonehedge-related American Express accounts, recruited co-
defendant Robert Phillips into the defendants’ scheme providing him with guidance
after DBF initiated its investigation into the defendants’ Florida-based operations,
and profitted from the sale of MIIT securities without ever investing his own
money into any securities. Because the evidence established that Cuciniello
actively participated in the organization and operation of the defendants’ fraudulent
investment scheme, the district court was correct in denying Cuciniello’s motions
for judgments of acquittal or a new trial.
IX. Defendants’ Motion to Dismiss Based on Prosecutorial Vindictiveness
We review the district court’s denial of a motion to dismiss an indictment
based on alleged prosecutorial vindictiveness for abuse of discretion. See U.S. v.
Barner, 441 F.3d 1310, 1315 (11th Cir. 2006). In May 2001, the United States sent
Cuciniello and his co-defendants letters informing them that they were targets of a
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pending grand jury investigation. On October 29, 2002, Schultz began a civil class
action lawsuit seeking more than $300,000,000 in damages against several of the
state and federal agencies and individuals involved in the investigation of the
defendants’ fraudulent investment scheme, including one of the federal prosecutors
assigned to handle this case. Then, on December 10, 2002, the grand jury returned
a superseding indictment, adding charges and defendants, including Cuciniello, to
the existing indictment. Cuciniello then filed a motion to dismiss the indictment
for prosecutorial vindictiveness because the United States had allegedly sought the
superseding indictment in retaliation for the civil action Schultz had filed. Because
“[a]s a general rule, the courts are not free to interfere with the prosecuting
officer’s discretionary decision to prosecute crime,” U.S. v. Spence, 719 F.2d 358,
361 (11th Cir. 1983), and because it is clear in the record that the grand jury
investigation that resulted in the indictment in this case was begun before Schultz
filed his class action lawsuit, see U.S. v. Corona, 849 F.2d 562, 567-68 (11th Cir.
1988) (prosecutorial vindictiveness claim fails when government’s investigation
preceded defendant’s exercise of procedural rights), there is no evidence of
prosecutorial vindictiveness.
X. Cuciniello’s challenge to the guidelines-range sentence
“We review the length of a sentence for reasonableness in light of the facts
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and circumstances of the defendant’s case reflecting the sentencing considerations
in [18 U.S.C.] § 3553(a).” U.S. v. Williams, 456 F.3d 1353, 1363 (11th Cir. 2006);
see U.S. v. Thomas, 446 F.3d 1348, 1351 (11th Cir. 2006). This review for
reasonableness is deferential and the weight accorded to any § 3553(a) factor is up
to the discretion of the district court. Williams, 456 F.3d at 1363. Cuciniello
argues that the massive sentence imposed by the district court was not necessary.
The party who challenges the sentence has both the burden of showing that the
sentence is unreasonable and the initial burden of establishing that the district court
considered an impermissible factor at sentencing. See id. at 1361. When reviewing
a sentence for reasonableness, this Court must evaluate whether the sentence
achieves the purposes of sentencing set out in 18 U.S.C. § 3553 (a)(2)(B) & (C).
Id. Here, Cuciniello has not identified a section 3553 factor that would support a
lesser sentence. Furthermore, because among other things, Cuciniello violated the
terms of his pretrial supervised release by attempting to market another investment
scheme while on pretrial release, and after a review of the entire record,
Cuciniello’s 210-month sentence was not unreasonable. The sentence was required
to “afford adequate deterrence to criminal conduct” and to “protect the public from
further crimes of the defendant.” 18 U.S.C. § 3553 (a)(2)(B) & (C).
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XI. Arguments waived because they were not properly raised-and supported-in
Cuciniello’s brief
Cuciniello concludes his brief as follows: “Cuciniello reasserts here any and
all objections made at trial, including, but not limited to the basis for his mistrial,
severance, and new trial motions, as stated at the district court level.” Because
Cuciniello has failed to identify and support these putative arguments in his brief
(other than by incorporating by reference the entire record in this case), he has
waived them. See Kelliher v. Veneman, 313 F.3d 1270, 1274 n.3 (11th Cir. 2002).
XII. Tyrrell’s Motions for Judgments of Acquittal or a New Trial
We review the district court’s denial of a Motion for Judgment of Acquittal
de novo. See U.S. v. Hansen, 262 F.3d 1217 (11th Cir. 2001). We review the
district court’s denial of a Motion for a New Trial for abuse of discretion. See U.S.
v. Ward, 274 F.3d 1320 (11th Cir. 2001). Tyrrell argues that his Motion for
Acquittal “was premised on the Government’s failure to prove scienter in support
of the various conspiracy claims raised against him.” Tyrrell also argues that “[t]he
evidence adduced at Trial did not include any direct or circumstantial evidence of
Mr. Tyrrell’s knowing participation in an agreement to defraud.” Because an
abundance of evidence adduced at trial proved Tyrrell’s knowing and voluntary
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participation in the charged conspiracies and because the existence of a conspiracy
may be proven by circumstantial evidence, see U.S. v. Guerra, 293 F.3d 1279,
1285 (11th Cir. 2002), we hold that the district court correctly denied Tyrrell’s
motions for judgments of acquittal or, in the alternative, for a new trial.
Conclusion
For the foregoing reasons, the challenged convictions and sentences are
AFFIRMED.
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