United States v. John Robert Hasson, a.k.a. Heloneti Glaera, a.k.a. Jack Hasson ( 2003 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR TH E ELEV ENTH C IRCUIT
________________________ FILED
U.S. COURT OF APPEALS
ELEV ENTH CIRCU IT
Nos. 00-13180 & 00-14012 JUNE 12, 2003
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 99-08063-CR-JLK
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JOHN ROBERT HASSON,
a.k.a. Heloneti Galera,
a.k.a. Jack Hasson,
Defen dant-A ppellant.
________________________
Appeals from the United States District Court
for the Southern District of Florida
_________________________
(June 12, 2003)
Before EDMOND SON, Chief Judge, ANDERSON , Circuit Judge, and POGUE*,
Judge.
___________________
*Honorable Donald C. Pogue, United States Judge for the United States Court of
International Trade, sitting by designation.
ANDE RSON, Circuit Judge:
This case comes to us on direct appeal from a criminal conviction, forfeiture,
and sentencing. Defendant-appellant John Robert Hasson ("Hasson") was
convicted of conspiracy to commit wire fraud, wire fraud, conspiracy to launder
money, and conspiracy to obstruct justice. Hasson was sentenced to 480 months
impriso nment, o rdered to forfeit sev eral prop erties, and ordered to pay res titution.
On appeal, Hasson challenges the sufficiency of the evidence to demonstrate wire
fraud, conspiracy to commit wire fraud, and conspiracy to launder money, and the
legality of the restitution and forfeiture ordered against him. For the reasons stated
below, we hold that the convictions and sentence imposed should be affirmed.
I. BACKGROUND
A. Factual Background
Between 1981 and 1998, Hasson owned and operated an upscale jewelry and
gift store in North Palm B each, Flo rida. His store cater ed to the P alm Bea ch area's
wealthy and famous residents and visitors. His customers frequently spent
thousands or hundreds of thousands of dollars on fine gems and jewelry. Not all of
his customers, however, got what they bargained for. Hasson sold several
customers gems, jewelry, and decorative pieces that failed to match the descriptions
2
he gave . Hasso n frequ ently sup ported h is represe ntations w ith false appraisals
prepared by himself or by a co-conspirator falsely represented to have been
indepen dent. H asson als o misrep resented his ow n creden tials to give weigh t to
those appraisals and sometimes provided forged appraisals purporting to have been
prepared by third parties.
B. Procedural History
On May 24, 1999, Hasson was charged by superseding indictment with one
count of conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 371,
four counts of wire fraud in violation of 18 U.S.C. § 1343, two counts of mail fraud
in violatio n of 18 U.S.C . § 1341 , one cou nt of con spiracy to launder money in
violation of 18 U .S.C. § 1 956(h ), and on e count o f consp iracy to ob struct justic e in
violation of 18 U.S.C. § 371. Hasson and his confederates were alleged to have
conspired from 19841 through 1999 to devise a scheme "to enrich themselves by
defrauding diamond, jewelry and collectibles purchasers of their funds" by means
of misrepresenting Hasson's credentials; misrepresenting the various characteristics
of items s old; pro viding f alse and f orged a ppraisals ; misrepr esenting Hasso n's
clientele; billing for fictitious services; substituting flawed, synthetic, or simulant2
1
The government stipulated before trial that the conspiracy began in 1988.
2
A synthetic stone is man-made. A synthetic ruby is, chemically, a ruby, but it is
not natural. A simulant is a stone that is chemically different from, but visually similar to,
another gem. Cubic zirconium, for example, is a diamond simulant.
3
stones for more valuable gems; creating false scenarios to induce purchases; and
covering up the scheme by blaming employees and settling fraud claims under
confidentiality agreements. Four interstate wire transmissions and two uses of the
mails provided the bases for the substantive counts of mail and wire fraud, though
one count of wire fraud was dropped.3
The charged object of the conspiracy to launder money, alleged to exist from
1995 to 1999, w as to laun der the p roceeds of the mail and w ire fraud by enga ging in
financial transactions with such proceeds with the purpose of promoting mail and
wire fraud and with the purpose of concealing the source, location, or ownership of
proceeds of mail and wire fraud in violation of 18 U.S.C. § 1956(a)(1)(A)(i),
(a)(1)(B)(i), and (a)(2)(B)(i) and by engaging in financial transactions of $10,000 or
more with the proceeds of mail and wire fraud in violation of 18 U.S.C. §1957. The
charged object of the cons piracy to o bstruct ju stice was to conce al Hasso n's and h is
co-conspirators' involvement in mail and wire fraud and money laundering by
witness tamperin g in viola tion of 1 8 U.S .C. § 15 12(b) a nd obs tructing ju stice in
3
At trial, the government introduced evidence of other uses of the wires and uses
of the mails and private or commercial interstate carriers that were not charged as separate
substantive counts in the indictment. For example, Hasson and co-conspirators would order
gems and synthetics from out-of-state suppliers by phone, intending to fraudulently resell those
gems, and delivery of those stones to Hasson's store were by mail or by commercial carrier. (On
September 13, 1994, the mail fraud statute was amended to criminalize the use of private or
commercial interstate carriers for the purpose of executing a scheme to defraud. Pub. L. No.
103-322, Title XXV, § 250006, 108 Stat. 1796, 2087 (1994).)
4
violation of 18 U.S.C. § 1503.
Following a seven-week trial, the jury returned a guilty verdict convicting
Hasson of conspiracy to commit wire fraud, three counts of wire fraud, conspiracy
to launder money, and conspiracy to obstruct justice. The jury found that the
objects of the conspiracy to launder money were violations of 18 U.S.C. §§
1956(a)(1)(A)(i) (promotion of unlawful activity), (a)(1)(B)(i) (concealment of
unlawful activity), and 1957 (transaction involving more than $10,000 in unlawful
proceeds). The jury found that the object of the conspiracy to obstruct justice was a
violation of 18 U.S.C. § 1503.
Following the trial, a criminal forfeiture proceeding was held under 18 U.S.C.
§ 982. The jury found that $40 million in cash, the contents of seven bank and
brokerage accounts, and two parcels of real estate in Jupiter, Florida, and
Breckenridge, Colorado, were involved in or traceable to property involved in the
conspiracy to launder proceeds of mail and wire fraud. The properties were thus
ordered forfeited. Following a sentencing hearing, Hasson was sentenced to 480
months imprisonment and ordered to pay $78,408,691 in restitution to four victims
under 18 U.S.C. § 3663A.
We now turn to Hasson's challenges to his convictions, forfeiture order, and
sentence. He argues that the evidence is insufficient to prove wire fraud or
5
conspiracy to commit wire fraud, that the evidence is insufficient to prove a
conspir acy to laun der mo ney, that th e restitution ordered against h im fails to
account for amounts paid victims in civil settlements, and that the forfeiture order
and restitution are excessive fines. 4
II. SUFFICIENCY OF THE EVIDENCE
The sufficiency of the evidence to support a conviction is reviewed de novo.
United States v. Miles, 290 F .3d 134 1, 1355 (11th C ir.), cert. denied, ___ U.S. ___,
123 S.Ct. 707 (2002). The record is viewed in the light most favorable to the
verdict, d rawing all reason able infer ences an d resolv ing all qu estions o f credibility
in favor of the government. Viewed in such a light, the verdict will be affirmed if a
reasonable juror could conclude that the evidence establishes guilt beyond a
reasona ble dou bt. Id. We review de novo questions regarding the legality of a
restitution order. United States v. Cobbs, 967 F .2d 155 5, 1556 (11th C ir. 1992 ).
We rev iew factu al finding s under lying a res titution order for c lear error . United
States v. V aghela, 169 F .3d 729 , 736 n.6 (11th C ir. 1999 ). We re view th e legality
4
Hasson raises various other challenges to his convictions, including a challenge to
the sufficiency of the evidence to prove a conspiracy to obstruct justice in violation of 18 U.S.C.
§ 1503. Evidence introduced at trial that Hasson and a co-conspirator suborned perjured grand
jury testimony and that Hasson submitted false documents in response to a grand jury subpoena
is sufficient to support this conviction. We have carefully reviewed the remaining challenges
and, finding them without merit, reject them without further discussion.
6
of the forfeiture order de novo and the jury's factual findings for the sufficiency of
the evide nce. See United States v. Goldin Ind us., 219 F.3d 1271, 1278 (11th Cir.
2000) (reviewing RICO forfeiture for sufficiency of the evidence).
A. Sufficie ncy of th e Evide nce to P rove W ire Frau d and th e Cons piracy to
Commit Wire Fraud
The elements of wire fraud under 18 U.S.C. § 1343 are (1) intentional
participation in a scheme to defraud and (2) use of the interstate wires in furtherance
of the sch eme. United States v. Ross, 131 F.3d 970, 984 (11th Cir. 1997). 5 To
"cause" th e interstate w ires to be u sed, the u se of the w ires need not be ac tually
intended ; it need on ly be reaso nably fo reseeable . Id. at 985.
The elements of a conspiracy under 18 U.S.C. § 371 are (1) an agreement
among two or more persons to achieve an unlawful objective; (2) knowing and
volunta ry particip ation in th e agreem ent; and ( 3) an ov ert act by a c onspira tor in
furthera nce of th e agreem ent. United States v. Adkinson, 158 F.3d 1147, 1153
5
"Whoever, having devised or intending to devise any scheme or artifice to
defraud . . . transmits or causes to be transmitted by means of wire . . . in
interstate or foreign commerce, any . . . signals . . . for the purpose of executing
such scheme or artifice, shall be fined . . . or imprisoned . . . or both."
18 U.S.C. § 1343 (2000).
7
(11th Cir. 1998).6 To prove a conspiracy to commit wire fraud, the government
need not demonstrate an agreement specifically to use the interstate wires to further
the scheme to defraud; it is enough to prove that the defendant knowingly and
voluntarily agreed to participate in a scheme to defraud and that the use of the
interstate w ires in fur therance of the sch eme w as reason ably fore seeable. Ross, 131
F.3d at 9 81; United States v. S mith, 934 F.2d 270, 275 (11th Cir. 1991).
Hasso n challen ges his co nviction s for w ire fraud and con spiracy to comm it
wire fraud on the same bases. First, he argues that the government did not prove a
scheme to defrau d becau se the mis represen tations he made, if a ny, pertain ed solely
to the market values of the items sold, which, he claims, were easily verifiable or
were otherwise easily discernible to a person of ordinary prudence. Second, he
argues th at the gov ernmen t did not p rove the use of th e interstate w ires in
furtherance of the scheme to defraud because the uses of the wires were
unforeseeable and were made to make payments for items with regard to which no
material misrepresentations were made.
1. Scheme or artifice to defraud
6
"If two or more persons conspire . . . to commit any offense against the United
States . . . in any manner or for any purpose and one or more of such persons do
any act to effect the object of the conspiracy, each shall be fined . . . or
imprisoned . . . or both."
18 U.S.C. § 371 (2000).
8
A scheme to defraud requires proof of material misrepresentations, or the
omissio n or con cealmen t of mater ial facts, Neder v. United States, 527 U.S. 1, 25,
119 S.Ct. 1827, 1841 (1999), reasonably calculated to deceive persons of ordinary
pruden ce, United States v. Brown, 79 F.3d 1550, 1557 (11th Cir. 1996) (construing
the mail fraud statute).7 That is, not all misrepresentations or omissions constitute a
scheme to defraud; the misrepresen tation or omission must be material and it must
be one on which a person of ordinary prudence would rely. A material
misrepresentation is one having a natural tendency to influence, or capable of
influenc ing, the d ecision m aker to w hom it is a ddresse d. Neder, 527 U.S. at 16, 119
S.Ct. at 1 837. A person of ordin ary prud ence w ould no t rely on all
misrepresentations. Puffery, for example, is not part of a scheme to defraud
because a person of ordinary prudence would not rely on it; nor would a person of
ordinar y prude nce eng aged in a n arm's-length purchase rely on th e seller's
representations regarding the market value of the property when the market value
can be, an d shou ld be, easily verified b y consu lting othe r source s. Brown, 79 F.3d
at 1559.
The record in this case is replete with evidence of material misrepresentations
7
The "scheme or artifice to defraud" and "for the purpose of executing" language
in the mail and wire fraud statutes are construed identically. Pelletier v. Zweifel, 921 F.2d 1465,
1498 (11th Cir. 1991).
9
regardin g the ph ysical and objective character istics of the gems an d jewelr y sold.
The government established that Hasson repeatedly misrepresented the carat
weight, color grading, and clarity grading of gems; misrepresented semi-precious
gems, synthetic gems, or simulants as natural gems and diamonds; misrepresented
stones that had been color- or clarity-treated as natural stones; and misrepresented
the history or provenance of items sold. The hundreds of misrepresentations made
over the life of the conspiracy are too numerous to catalogue here.8 Hasso n's
condu ct simply c annot b e analog ized to the mere m isreprese ntation o f accessib le
market values which, as we held in Brown, could n ot be reas onably c alculated to
induce purchase by a person of ordinary prudence. These repeated affirmative
misrepr esentation s of phy sical chara cteristics of the items a lso defea ts Hasso n's
reliance on Langford v. Rite-Aid of Ala., 231 F .3d 130 8 (11th Cir. 200 0) (retail
seller's failure to disclose its pricing practices to customers is not a material
8
The following is a brief, and incomplete, summary. In a diamond broach sold to
Greg Norman, Hasson misrepresented 11 diamonds irradiated to enhance their color as natural
stones. In a sale to John Campbell, Hasson misrepresented a 24.89-carat yellow diamond with a
color grade of U to V and clarity grade of VS1 as an internally flawless fancy intense yellow
diamond. Hasson sold Lawrence Dixon several ivory carvings by misrepresenting their history
and provenance. Hasson sold James Cunningham two diamonds, misrepresenting a 29.85-carat
fancy light yellow diamond with a clarity grade of VS2 as an internally flawless 30.16-carat
fancy intense yellow diamond and misrepresenting a 13.16-carat diamond with a color grade of
X to Y and clarity grade of VS1 as an internally flawless 14.02-carat fancy intense yellow
diamond. In sales to Aben and Joan Johnson, Hasson misrepresented the type of gems or stones
in 314 items and the history and provenance of at least 80 items and gems. He also treated 53
stones sold to the Johnsons as natural and induced them to purchase hundreds of stones by
misrepresenting the interest of certain buyers in purchasing the Johnsons' gem and jewelry
collection. Most of these items were misrepresented in multiple characteristics.
10
omission that can support mail or wire fraud liability).
There was also ample testimony regarding the special training and equipment
required to evaluate the physical qualities of fine gems and jewelry from which the
jury cou ld reason ably con clude tha t the misre presenta tions w ere not ea sily
verifiable by the person of ordinary pru dence. Furthermore, H asson prepared false
appraisals and arranged for false appraisals prepared by co-conspirator posing as an
independent appraiser, creating the impression that his represen tations were
independently verified and making it unlikely that a person of ordinary prudence
would invest the time and expense to obtain second or third evaluations of the items
purcha sed. Cf. Brown, 79 F.3d at 1558 n.13 (considering factors influencing the
decision of a person of ordinary prudence to invest resources in independent
investigation).
2. Use of the Wires in Furtherance of the Scheme to Defraud
A scheme to defraud is not, by itself, a federal crime. To support the
convictio ns for w ire fraud , the gov ernmen t must prove no t only a sch eme to
defraud , but mu st also pro ve that the interstate w ires wer e know ingly use d in
furthera nce of th e schem e or that su ch use w as reason ably fore seeable. Ross, 131
F.3d at 984-85. In this case, Hasson was convicted of three substantive counts of
wire fra ud. Th e interstate w ires wh ich wer e the sub ject of the substantiv e counts
11
were three wire transfers made by Aben Johnson, the principal victim of the
scheme, from his M ichigan bank account to H asson's Florida bank accoun t. These
wire transfers took place on March 6, 1995, for $300,000; May 14, 1996, for
$287,500; and July 11, 1996, for $290,000.
a. Foreseeability of the Use of the Wires
An essential element of the scheme to defraud in Ross involved establishing a
shell corporation in Florida to purchase a piece of real estate from a Mississippi
corporation. We held that it was reasonably foreseeable that correspondence
necessary to effectuate the purchase would be sent over the wires from the
Mississippi office of the selling corporation's chief counsel to the consp irators'
attorney in Florida . Ross, 131 F.3d at 985.
We thin k that the w ire transfe rs in this ca se were also reaso nably fo reseeable .
Mr. and Mrs. Johnson maintained homes in both Florida and Michigan during the
time when they purchased gems and jewelry from Hasson and, as was clear from
many o f the chec ks writte n by the J ohnso ns, main tained ou t-of-state b ank acco unts.
It was foreseeable that these customers would at some point make use of the
interstate wires to transfer large sums of money to complete some of their many
expens ive purc hases. Accord Ross, 131 F.3d at 985.
b. For the Purpose of Executing the Scheme
12
We now turn to the question of whether these wire transfers were "cause[d]
to be transmitted . . . for the purpose of executing" the scheme to defraud. 18
U.S.C. § 1343 . Hasson contends that the w ire transfers were made to purch ase
items with regard to which no material misrepresentations were made. Because the
underlying sales were legitimate, Hasson argues, these wire transfers were not
caused "for the purpose of executing" the scheme to defraud.
To violate the wire fraud statute, it is not necessary that the transmitted
inform ation inclu de any m isreprese ntation. Schmuck v. United States, 489 U.S.
705, 71 5, 109 S . Ct. 144 3, 1450 (1989 ) (constr uing m ail fraud s tatute). The
transmission itself need not be essential to the success of the scheme to defraud. An
interstate wire transmission is "for the purpose of executing" the scheme to defraud
if it is "incident to an essential part of the scheme" or "a step in the plot." Id. at
710-11, 109 S.Ct. at 1447-48 (citations omitted).
The March 6, 1995, wire transfer was for the purchase of two items, one of
which was represen ted to the Johnsons as a diamon d ring featuring a flawless
22.11-carat diamond with a color grade of D. These representations were supported
with an appraisal prepared by a co-conspirator and provided by Hasson. This ring
in fact featured an 11.37-carat diamond with a clarity grade VS2 and a color grade
L to M. Several physical characteristics of this ring were misrepresented - the carat
13
weigh t, clarity, and color gr ade of th e diamo nd. W e think th e jury cou ld reason ably
have concluded that these misrepresen tations were material and that the purchase
was fraudulently induced. This wire transfer was an interstate transmission over the
wires caused for the purpose of executing the scheme to defraud.
The May 14 and July 11, 1996, wire transfers were made to purchase a
diamond necklace and pin. Hasson originally sold these pieces of jewelry to the
Johnsons on July 21, 1990, for $370,000. Hasson bought the two pieces back on
Decem ber 7, 19 94, as pa rt of a rep urchase of five item s he had sold the J ohnso ns.
Hasso n later ind uced the Johnso ns to rep urchase these tw o pieces, f alsely
representing that a potential buyer of the Johnsons' gem and jewelry collection, the
Sultan o f Brun ei, was in terested in comple ting this v ery subs tantial pur chase on ly if
these items were included in the transaction. The Johnsons repurchased the two
pieces of jewelry for $577,500.
Although Hasson is correct that the government introduced no evidence that
the physical and objective characteristics of these two pieces of jewelry were
misrepr esented, th e transactio n was p art of a larg er fraud ulent sch eme, and the sale
of even these two pieces was specifically induced by the misrepresentation about
the potential resale to the Sultan. The Sultan was at the center of an elaborate con
devised by Hasson to induce the Johnsons to purchase more misrepresented items
14
between 1995 and 1997. Hasson represented that the Sultan was a diamond
collector interested in purchasing the Johnsons' jewelry collection for a very
substantial sum of money. The con included paying co-conspirators to play the
roles of the Sultan's nephew and the nephew's entourage at a meeting between
Johnso n and th e "neph ew" he ld on H asson's p rivate jet, dis guised a s the nep hew's
jet, in late 1995, and at a similar meeting held in a limousine at the Palm Beach
airport in late 1996 . As a res ult of H asson's represen tations reg arding th e Sultan 's
interest and proposed purchase price, the Johnsons spent many millions of dollars
on gems to enhance the value of their collection to the Sultan. Almost all of the
gems p urchase d were misrepr esented a s to their p hysical co mpositio n, carat-w eight,
color grade, clarity grade, and/or provenance. Included in these purchases were the
necklace and pin paid for by the May 11 and July 14, 1996, wire transfers. Hasson
specifically represented that the Sultan wanted these two pieces of jewelry included
in the Joh nsons' collection b ecause th ey had b een stolen from th e Sultan 's mother.
Hasso n repres ented tha t the failure to includ e the jew elry was a potentia l deal-
breaker.
We readily conclude that the use of the wires to make payment for the two
pieces of jewelry whose purchase was fraudulently induced was "for the purpose of
executin g" the sch eme to d efraud. H asson's m isreprese ntations r egardin g a specif ic
15
interested buyer an d the ma gnitude of that bu yer's proposed p urchase and his
misrepr esentation that the de al was d epende nt on the numb er and q uality of item s in
the jewelry collection, were material to the Johnsons' decision to purchase the
jewelry. Unlike the misrepresentations in Brown, which related solely to market
value and were easily verifiable, the misrepresentations in the instant case were part
of a large scheme to defraud, including not only misrepresentations as to value but
also misrepresentations as to the physical and objective characteristics of jewelry
sold as part of the scheme, and misrepresentations with respect to the potential
resale to the Sultan. The wire transfers were caused for the purpose of executing
this scheme.
The instant case is unlike Brown in two additional respects. First, the nature
of the misrepresentations here was such that they were not easily verifiable. Also,
the Johnsons were fraudulently induced into believing that there was independent
verificatio n, both b y the app raisals false ly represe nted to h ave been indepen dent,
and by the fraudulent, elaborately-staged meetings w ith the "Sultan's nephew." A
reasona ble jury in this case co uld find that these tw o aspects of the sch eme to
defraud inhibited a person of ordinary prudence in discovering the truth, making the
Johnsons' reliance on Hasson's representations reasonable.
The convictions for the three counts of wire fraud and one count of
16
conspiracy to commit wire fraud are supported by sufficient evidence.
B. Sufficiency of the Evidence to Prove the Conspiracy to Launder Money
18 U.S.C. § 1956(h)9 makes it a federal crime to conspire to violate any
provision of §§ 1956 or 1957, the federal money laundering statutes. Hasson was
convicted of conspiring to promote specified unlawful activity using proceeds
derived from unlawful activity and conspiring to conceal proceeds derived from
specified unlawful activity in violation of § 1956(a)(1)(A)(i) and (a)(1)(B)(i),10 and
of cons piring to engage in a mon etary trans action in c riminally d erived p roperty
greater than $10,000 in value and derived from unlawful activity in violation of §
9
"Any person who conspires to commit any offense defined in this section or
section 1957 shall be subject to the same penalties as those prescribed for the
offense the commission of which was the object of the conspiracy."
18 U.S.C. § 1956(h) (2000).
10
"(a)(1) Whoever, knowing that the property involved in a financial transaction
represents the proceeds of some form of unlawful activity, conducts or attempts to
conduct such a financial transaction which in fact involves the proceeds of
specified unlawful activity--
(A)(i) with the intent to promote the carrying on of specified unlawful activity; or
...
(B) knowing that the transaction is designed in whole or in part--
(i) to conceal or disguise the nature, the location, the source, the ownership, or the
control of the proceeds of specified unlawful activity . . .
shall be sentenced to a fine . . . or imprisonment . . . or both."
18 U.S.C. § 1956 (2000).
17
1957.11 Mail and wire fraud constitute "specified unlawful activity" under the
statutes. 18 U.S.C. § 1956(c)(7)(A) (incorporating RICO predicate offenses listed
in 18 U.S.C. § 1961(1)).
Hasson's primary argument that the evidence is insufficient to demonstrate a
conspir acy to laun der mo ney relies o n his con tention th at the evid ence is
insufficie nt to dem onstrate th at the laun dered fu nds w ere proc eeds of w ire fraud .
For the reasons stated above, the evidence is sufficient to support the jury's finding
in this regard.
Hasson also argues that the evidence is insufficient to demonstrate his intent
to conce al the pro ceeds of mail and wire fra ud from anyone other tha n his ex- wife.
The evidence demonstrated that Hasson funneled the proceeds of mail and wire
fraud through several accounts held under fictitious names and opened with forged
docum ents, inclu ding an accoun t held in th e name o f a shell co rporatio n in the Is le
of Man. Hasson lied to FBI investigators and to an IRS agent about the nature of
his relation ship w ith this she ll corpor ation, w hich he o wned in fact (tho ugh no t in
name). T he evide nce is clear ly sufficien t to demo nstrate H asson's attempts to
11
"Whoever . . . knowingly engages or attempts to engage in a monetary transaction
in criminally derived property of a value greater than $10,000 and is derived from
specified unlawful activity, shall be punished as provided in subsection (b)."
18 U.S.C. § 1957(a) (2000).
18
conceal the source, ownership, location or control of the funds from the FBI and the
IRS. His argument furthermore fails to address the jury's finding that the
conspir acy also h ad the ob jects of pr omotin g unlaw ful activity a nd of en gaging in
financial transactions with criminally derived property with a value greater than
$10,000.
The conviction for conspiracy to launder money is supported by sufficient
evidence.
III. Forfeiture and Restitution
In addition to Hasson's 480-month prison sentence, he was ordered to pay
over $78 million in restitution to four victims of the scheme to defraud and ordered
to forfeit several accounts and properties, including a particular account in the
amount of $20,346,390.51. Hasson argues that the restitution order is in error
because it fails to off set for am ounts H asson h as paid v ictims of th e schem e to
defraud in civil settlements, that the restitution and forfeiture orders are based on
acquitted conduct, and that the restitution order and forfeiture of the $20 million12
are unconstitutional excessive fines.
12
Careful review of the briefs and the transcript of the oral argument reveals that
Hasson only challenges the portion of the forfeiture order forfeiting $20,346,390.51 from a
particular account held in the name of Heloneti Galera, Trustee for the benefit of Peter
Westbrook.
19
A. Restitution Offset
The restitution in this case was required by 18 U.S.C. § 3663A (2000), part of
the amendments to the Victim and Witness Protection Act ("VWPA"), Pub. L. No.
97-291, 96 Stat. 1248 (1982) (codified as amended at 18 U.S.C. §§ 1512 et seq.,
3579 et seq.) made by the Mandatory Victims Restitution Act ("MVRA"), Pub. L.
No. 104-132, 110 Stat. 1214 (1996). Section 3663A requires a court, "when
sentencing a defendant," to order the defendant to "make restitution to the victim of
the offen se," § 36 63A( a)(1), w heneve r the defe ndant is c onvicted of an of fense "in
which an identifiable victim or victims has suffered a physical injury or pecuniary
loss," § 3663A(c)(1)(B). In the case of a conviction for an offense that "involves as
an element a scheme, conspiracy, or pattern of criminal activity," a "victim" is "any
person directly harmed by the defendant's conduct in the course of the scheme,
conspiracy, or pattern." § 3663A(a)(2). 13 The court is required to order restitution
"in the full amount of each victim's losses," § 3664(f)(1)(A). Disputes over the
amoun t of the res titution are to be reso lved by a prepon derance of the ev idence. §
13
Section 3663A(a)(2) uses language identical to that found in 18 U.S.C. §
3663(a)(2). That language was added by Pub. L. No. 101-647, 104 Stat. 4789, 4863 (1990)
(amended without substantive changes by Pub. L. No. 104-132, 110 Stat. 1214, 1229 (1996)),
which supersedes our interpretation of § 3663(a) in United States v. Stone, 948 F.2d 700, 704
(11th Cir. 1991), that restitution for mail or wire fraud is limited to the specific act of fraud
underlying the mailing or use of the wires for which the defendant is convicted, rather than the
entire scheme or artifice to defraud furthered by the mailing or use of the wires. See United
States v. Obasohan, 73 F.3d 309, 311 (11th Cir. 1996).
20
3664(e).14
The probation officer prep aring the Presentence Investigation Repo rt ("PSR")
recomm ended r estitution to four vic tims of th e consp iracy and scheme to defrau d in
amounts totaling $78,408,691. In response to the PSR, Hasson filed several
objections, none of which contested the restitution order. On appeal, Hasson,
presumably relying on § 3664(j)(2),15 contends that the restitution order is in error
because it compensates three victims whom Hasson had already compensated
through civil settlements without offsetting by those amo unts.
Because the offset objection was not raised below, we review this aspect of
the restitutio n order for plain error. F ed. R. C rim. P. 5 2(b); United States v. Jones,
289 F .3d 126 0, 1265 (11th C ir.), cert. denied, ___ U .S. ___ , 123 S .Ct. 661 (2002 ).
14
"Any dispute as to the proper amount or type of restitution shall be resolved by
the court by the preponderance of the evidence. The burden of demonstrating the
amount of loss sustained by a victim as a result of the offense shall be on the
attorney for the Government. The burden of demonstrating the financial
resources of the defendant and the financial needs of the defendant's dependents,
shall be on the defendant. The burden of demonstrating such other matters as the
court deems appropriate shall be upon the party designated by the court as justice
requires."
18 U.S.C. § 3664(e) (2000).
15
"Any amount paid to a victim under an order of restitution shall be reduced by
any amount later recovered as compensatory damages for the same loss by the
victim in-- (A) any Federal civil proceeding; and (B) any State civil proceeding,
to the extent provided by the law of the State."
18 U.S.C. § 3664(j)(2) (2000).
21
We will reverse only if there is (1) error, (2) that is plain, and (3) affected the
defend ant's substantial righ ts. If these th ree cond itions are f ound, w e may rev erse if
we decide the error seriously affects the fairness, integrity, or public reputation of
the judicia l proceed ing. Id.In Jones, we held that a sentencing court does not commit plain error by
relying o n factual f indings containe d in the P SR reg arding a defendant's ability to
pay restitution when the defendant does not introduce evidence on the issue or
object to th e PSR 's finding s in that reg ard. Id. at 1266 . Hasso n's civil settlements
occurred before sentencing. The fact and amount of compensation paid by Hasson
to victims pursuant to civil proceedings and whether the compensation was for the
"same loss" are issues well within Hasson's ability to bring to the attention of either
the probation officer or the sentencing court, yet he failed to do so. We conclude
that the court below did not err by relying on the factual findings in the PSR and
ordering Hasson to p ay the full amount of the victims' losses.
B. Excessive Fine
Hasson argues that the forfeiture of $20,346,390.51 and the restitution of
$77,772,881 to the Johnsons are excessive fines16 because the jury convicted
Hasso n of on ly three su bstantive wire fra ud cou nts wh ere the am ount inv olved in
16
"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and
unusual punishments inflicted." U.S. Const. amend. VIII.
22
the wire transfers was $8 77,500 . Hasso n appar ently con tends tha t the amo unts
involved in the conspiracy to commit wire fraud and the conspiracy to launder
money must be proven beyond a reason able dou bt and th at the gov ernmen t only
proved that Hasson realized $877,500 in proceeds of wire and mail fraud beyond a
reasonable doubt. Because Hasson's Excessive Fines Clause challenge is founded
on an erroneous premise, and because he does not challenge the constitutionality of
the forfeiture and restitution orders on any other basis, we reject this challenge.
1. Forfeiture Order
The forfeiture in this case was authorized by 18 U.S.C. § 982 (2000), which
requires a court to order a defendant convicted of an offense in violation of 18
U.S.C . § 1956 to order the forfe iture of "a ny prop erty, real or person al, involv ed in
such of fense, or any pro perty trace able to su ch prop erty." 18 U .S.C. § 9 82(a)(1 ).
21 U.S .C. § 85 3 gove rns the p rocedu re for or dering th e forfeitu re. 18 U .S.C. §
982(b)(1).
The court instructed the jury that the government must prove the elements of
forfeiture under § 982(a) by a preponderance of the evidence. Hasson did not
object to this instruction, which his argument on appeal challenges. We review the
instructio n for pla in error. See United States v. H all, 312 F .3d 125 0, 1259 (11th
Cir. 2002) (jury instruction reviewed for plain error when the defendant did not
23
object). We conclude that the elements of fo rfeiture under 18 U.S.C . § 982(a) must
be proven by a preponderance of the evidence, and therefore this instruction was
not plain error.
a. Standard of Proof at the Forfeiture Hearing
We have held that the elements of forfeiture under 21 U.S.C. § 853(a)(1) and
(a)(2) m ust be pr oven u nder the prepon derance standard . See United States v.
Dicter, 198 F .3d 128 4, 1289 -90 (11 th Cir. 19 99) (§ 8 53(a)(2 )); United States v.
Elgersma, 971 F.2d 690, 697 (11th Cir. 1992) (en banc) (§ 853(a)(1)). We have
also said that, generally, criminal forfeiture is part of sentencing where the
prepon derance standard govern s. United States v. Cabeza, 258 F.3d 1256, 1257-58
(11th Cir. 2001) (rejecting a challenge to criminal forfeiture under the drug statutes
based on Apprendi v. New Jersey, 530 U .S. 466 , 120 S .Ct. 234 8 (200 0)). See also
Libretti v. United States, 516 U .S. 29, 3 9, 116 S .Ct. 356 , 363 (1 995) (" Forfeitu re is
an element of the sentence imposed following conviction . . . . Our precedents have
. . . characterized criminal forfeiture as an aspect of punishment imposed following
conviction of a substantive criminal offense.") (discussing applicability of Fed. R.
Crim. P roc. 11( f) to forf eiture cou nt unde r 21 U .S.C. § 8 53). But see Goldin Indus.,
219 F .3d at 12 78 n.10 (reservin g questio n of whether fo rfeiture u nder 18 U.S.C . §
1963(a)(1) and (a)(3) is governed by preponderance or reasonable doubt standard).
24
The stan dard of proof th at applies to a forfeitu re hearin g unde r 18 U .S.C. §
982(a) (1) is a qu estion of statutory c onstruc tion. Elgersma, 971 F.2d at 694. In
Elgersma, we relied primarily on 21 U.S.C. § 853(d) as evidence of Congressional
intent to require the elements of forfeiture under § 85 3(a)(1) to be proven by a
prepon derance . Id. at 694. Section 853(d) creates a rebuttable presumption that the
defendant's property is forfeitable when the government proves, by a preponderance
of the evidence, that the property was acquired by the defendant during or soon
after the commission of an offense that triggers the forfeiture provision and that
"there w as no like ly source for such proper ty other th an the vio lation." 21 U.S. C . §
853(d ); Elgersma, 971 F .2d at 69 4. Becau se the pro perty des cribed in § 853( d) is
the same type of property as that described in § 853(a)(1) ("property constituting, or
derived from, any proceeds obtained . . . as the result of such violation"), we
concluded that Congress contemplated demonstrating the elements of forfeiture
under § 853(a) (1) by a p repond erance o f the evid ence. Elgersma, 971 F.2d at 694.
In Dicter, we concluded that nothing in § 853 evinces an intent to apply a
higher s tandard of proo f to the elem ents of fo rfeiture u nder § 8 53(a)(2 ). Dicter, 198
F.3d at 1 289. W e also no ted that the introdu ctory lang uage of § 853( a) clearly
indicates th at forfeitu re unde r that pro vision is a n elemen t of senten cing. Id. The
statute requires the forfeiture to be ordered against a person already convicted of a
25
substance offense. The court is required to order the forfeiture when "imposing
sentence" on the defendant, "in addition to any other sentence imposed[.]" Noting
that the pr epond erance sta ndard g enerally ap plies to sen tencing m atters, Dicter, 198
F.3d at 1289 (citing United States v. Barakat, 130 F.3d 1448, 1452 (11th Cir.
1997) ), we co ncluded that Con gress inte nded th e prepo nderan ce standa rd to app ly
to § 853 (a)(2), as well. Id.
Our analysis in Dicter applies w ith equal f orce to th e langua ge of 18 U.S.C . §
982(a)(1). The subsection requires an order of forfeiture against "a person
convicted of [a money laundering] offense." The court is required to order
forfeiture "in imposing sentence" on the defendant. This language clearly indicates
Congressional intent that forfeiture under § 982(a)(1) is part of the sentencing
process , where the prep ondera nce stand ard gen erally app lies. See Barakat, 130
F.3d at 1 452; accord Dicter, 198 F .3d at 12 89. See also United States v. B ornfield ,
145 F.3d 1123, 1138 n.12 (10th Cir. 1998) (forfeiture under § 982 is a sentencing
issue).
The parallels between § 982 and 21 U.S.C . § 853 are reinforced by §
982(b)(1), which provides that forfeiture under § 982 "shall be governed by the
provisions of" 21 U.S.C. § 853. While the presumption described in § 853(d) does
not app ly to § 98 2 forfeitu res, see 18 U.S .C. § 98 2(b) (th e provisions of 2 1 U.S .C. §
26
853 govern, "other than subsection (d) of that section"), subsection (d) did not
create the preponderance standard governing § 853 forfeitures; it is simply clear
evidence of Congress's understanding that the preponderance standard governs such
forfeitures. It is perfectly reasonable for Congress to adopt the standard of proof
under 21 U.S.C. § 853 for forfeitures under 18 U.S.C. § 982(a), but not the
rebuttable presumption of § 853(d). Section 982(b)'s incorporation of a forfeiture
provision that applies a preponderance standard is clear evidence of Congressional
intent to apply the preponderance standard to forfeitures under § 982(a).17 Cf.
United States v. 1988 Chevrolet Silverado, 16 F.3d 660, 663-64 (5th Cir. 1994)
(burde n of pro of in for feiture un der 19 U .S.C. § 1 615 inc orpora ted by 18 U.S.C . §
512, which states that "[a]ll . . . procedures for summary and judicial forfeiture
applicab le to [custo ms law s] violation s [(19 U .S.C. § 1 615)] . . . sh all apply to
forfeitures under this section").
b. Sufficiency of the Evidence
The jury was properly instructed that the government was required to prove
the elements of forfeiture by a preponderance of the evidence. The jury returned a
17
This holding is consistent with the interpretation of 18 U.S.C. § 982 by other
circuits. See United States v. Rutgard, 116 F.3d 1270, 1293 (9th Cir. 1997) (preponderance
standard governs forfeitures under § 982(a)(1)); United States v. Voigt, 89 F.3d 1050, 1084 (3d
Cir. 1996) (same); United States v. Myers, 21 F.3d 826, 829 (8th Cir. 1994) (same).
27
detailed special verdict18 identifyin g each o f the forf eited pro perties an d accou nts
(including the $20,346,390.51) as property that "constitutes property involved in the
offense charged in Cou nt Eigh t of the In dictmen t and/or c onstitutes proper ty
traceable to such property." Count Eight charged a conspiracy to launder the
proceeds of mail and wire fraud. The special verdict, then, shows that the jury
found, by a preponderance of the evidence, that the $20 million was involved in, or
traceable to property involved in, the conspiracy to launder the proceeds of mail and
wire fraud.
Property is "involved in" a money laundering transaction if the transaction
involves the proceeds of mail or wire fraud and the transaction had the purpose of
concealing the proceeds or promoting mail or wire fraud, or involved more than
$10,000 in proceeds of mail or wire fraud. In determining what transactions
involved the proceeds of mail and wire fraud, the jury was not restricted to the three
substantive counts of wire fraud on which it returned a guilty verdict. The jury was
free to reconsider evidence of acquitted conduct under the preponderance standard,
cf. Barakat, 130 F.3d at 1452, and to consider evidence of mail and wire frauds
adduced by the government in support of the money laundering count, though not
18
Hasson did not object to the form of the special verdict below or to the inclusion
of the properties identified therein.
28
charged as separate substantive counts of mail or wire fraud.19
Hasson does not challenge the sufficiency of the evidence to demonstrate, by
a prepo nderan ce of the evidence , that the $2 0 million was inv olved in , or is
traceable to property involved in, the money laundering conspiracy, and we see no
defect in the government's proof. The jury had before it evidence of the three wire
fraud co unts on which it convicte d and th e two m ail fraud c ounts o n whic h it
acquitted, as well as evidence of other uses of the wires, mailings, and uses of
private an d comm ercial inters tate carriers during the cour se of the c onspira cy to
comm it wire an d mail fra ud char ged in th e indictm ent. It cou ld reason ably
conclude that these mailings and wirings were proven by a preponderance of the
evidence and that they were made or caused for the purpose of executing the
scheme to defraud. The jury also had before it abundant evidence of the extensive
19
The jury verdict acquitting Hasson of the two mail fraud counts does not preclude
a fact-finder from relying on the evidence introduced in support of those counts for other
purposes. As the Court noted in United States v. Watts, there is no constitutional prohibition
against relitigating acquitted conduct in a later proceeding governed by a lower standard of
proof, 519 U.S. 148, 156, 117 S.Ct. 633, 637 (1997) (per curiam) (citing Dowling v. United
States, 493 U.S. 342, 349, 110 S.Ct. 668, 672 (1990)), and it is well-established that sentencing
courts may consider both uncharged and acquitted conduct in determining the appropriate
sentence. Id. at 152-53, 117 S.Ct. at 635-36. We do not mean to imply that a court could impose
a forfeiture order based on a money laundering offense with which the defendant was not
charged or for which he was acquitted. See 18 U.S.C. § 982(a)(1) (requiring forfeiture of
property involved in or traceable to a convicted offense). Similarly, a court could not order
restitution based on an uncharged or acquitted offense. See 18 U.S.C. §§ 3663A, 3663
(providing restitution to victims of a convicted offense for losses caused by that offense). But,
money laundering conviction in hand, the government need only prove that property was
involved in or traceable to property involved in that offense by a preponderance of the evidence.
29
scheme to defraud furthered by these various mailings and uses of the w ires.
In sum, Hasson's contention that only $877,500 was demonstrated to be
proceeds of mail and wire fraud is incorrect and, because he advances no other
argument in support of his Excessive Fines Clause challenge, we reject that
challenge.
2. Restitution Order
Hasson's Excessive Fines Clause challenge to the restitution order is identical
to his challenge to the forfeiture order -- that the order is excessive in light of the
fact that the substan tive wire fraud co unts for which he was convicte d involv ed only
$877,500. Again, this argument is made with the apparent understanding that the
losses caused to victims of the wire fraud an d conspiracy to commit w ire fraud must
be dem onstrated beyond a reason able dou bt and th at only the $877,5 00 invo lved in
the three wire fraud counts were proven under this standard. The amount of the
losses caused to the victims of Hasson's wire fraud and conspiracy to commit wire
fraud w as prov ed at sente ncing b y a prepo nderan ce of the e vidence . See 18 U.S.C.
§ 3664(e). Hasson does not challenge the trial court's factual findings with respect
to the losses suffered by the victims under this standard of proof. Finding no other
argum ent offer ed in sup port of h is Exces sive Fin es Claus e challeng e, we reje ct it.
30
III. CONCLUSION
There is sufficient evidence in the record to support the convictions for wire
fraud, conspiracy to commit wire fraud, and conspiracy to launder money. The
sentencing court did not commit plain error in the restitution order, and the orders
of restitution and forfeiture are properly founded on facts proven with sufficient
evidence under a preponderance of the evidence standard. In light of the foregoing
discussion, Hasson's convictions, restitution and forfeiture orders are
AFFIRMED.
31