United States v. Vibgyor Optical Systems Inc. ( 2020 )

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued December 4, 2019
Decided January 2, 2020
Before
DANIEL A. MANION, Circuit Judge
MICHAEL S. KANNE, Circuit Judge
AMY C. BARRETT, Circuit Judge
Nos. 18‐2920 & 18‐2921
UNITED STATES OF AMERICA, Appeal from the United States
Plaintiff‐Appellee, District Court for the
Northern District of Illinois,
v.
Eastern Division.
VIBGYOR OPTICAL SYSTEMS, INC.,
Nos. 15‐cr‐18‐1 & 15‐cr‐18‐2
and BHARAT VERMA,
Defendants‐Appellants.
Elaine E. Bucklo, Judge.
ORDER
Vibgyor Optical Systems supplied parts used in American military
equipment. For eight years, Vibgyor and its owner, Bharat Verma, breached
American import and export controls by sending specifications of those parts to
Chinese manufacturers and ordering from those manufacturers without a
license. Vibgyor and Verma both pleaded guilty to conspiracy to violate the
Arms Export Control Act, and Verma pleaded guilty to an additional charge of
Nos. 18‐2920 & 18‐2921 Page 2
international money laundering. As part of their pleas, the defendants agreed to
forfeit the proceeds traceable to their offenses in an amount that the district court
would determine at sentencing. The government initially proposed that the
defendants should be ordered to forfeit $690,513.00. The government then
offered an alternative calculation of $514,279.65. Defense counsel raised
substantive and procedural objections to the government’s calculations, and in
response, the district court ultimately lowered the forfeiture judgment to
$430,701.12. On appeal, defendants argue that their counsel’s performance at
sentencing was constitutionally ineffective. We disagree and affirm the sentence.
I.
Vibgyor Optical Systems was a supplier of parts used to produce military
equipment. Vibgyor did not itself manufacture the parts; instead, Vibgyor and its
owner, Bharat “Victor” Verma, ordered them from manufacturers based in
China. Vibgyor then sent the parts to contractors for the U.S. Department of
Defense. The contractors in turn sent the parts to DOD. Vibgyor and Verma
never disclosed to DOD that the parts had been manufactured in China.
Some of the parts manufactured in China were sensitive, critical components
listed on the United States Munitions List and the United States Munitions
Import List. Federal law requires anyone who imports or exports parts included
on those lists to have a license or permit to do so. Vibgyor, however, lacked a
permit. And not only that, Vibgyor and Verma also sent sample parts and
directions for constructing the necessary parts to the Chinese manufacturers
before ordering from them—a potential security breach. Predictably, Vibgyor’s
business in China landed it in hot water. In 2016, Vibgyor and Verma were
charged with several violations of federal law. Vibgyor ultimately pleaded guilty
to a charge of conspiracy to violate the Arms Export Control Act and to
knowingly defraud the United States. Verma pleaded guilty to the same as well
as to a charge of international money laundering. As part of their plea
agreements, the defendants agreed to forfeit the proceeds traceable to their
offenses in an amount that the district court would determine at sentencing.
Before sentencing, the government proposed that the defendants should
forfeit $690,513.00. Here’s how it arrived at that number: First, it looked at the
credits and deposits in the defendants’ bank accounts between January 2009 and
March 2014. Next, it eliminated any payments that came from a payor whose
business was not fully related to DOD contracts. It then further reduced the
Nos. 18‐2920 & 18‐2921 Page 3
number to include only the payments relating to parts listed on the Munitions
List and the Munitions Import List. Finally, it deducted the defendants’ costs so
that the forfeiture was limited to profits rather than proceeds.
Before sentencing, defense counsel raised several challenges to the
government’s methodology. First, she argued that the government had not
provided its forfeiture calculations in a timely manner. She also contended that
the government should have looked at individual contracts, rather than the bank
records that aggregated credits and payments from the defendants’ accounts.
Finally, she argued that the government had not met its burden of proving that
the calculated profits had come only from the relevant contracts. She maintained
that certain payments counted in the calculation were actually for American‐
made parts and that others were for parts not used for DOD contracts.
At sentencing, the government called IRS special agent Jason Gibson to testify
about its calculations. Gibson presented an exhibit, Gibson 1, that demonstrated
how he arrived at the $690,513.00 figure. He also presented a second exhibit,
Gibson 2, an alternative spreadsheet that used the same methodology but limited
the calculation to begin only in May 2010, after the government had confiscated
much of the defendants’ inventory. The alternative forfeiture calculation based
on Gibson 2 was $514,279.65.
Defense counsel cross‐examined Gibson and made affirmative arguments to
the court. Again she pressed the timeliness point. When the district court offered
her a continuance, she declined, explaining that she had raised the government’s
lateness to highlight the unreliability of its calculations. And once again, she
challenged the substance of Gibson’s calculation. She proposed a forfeiture
amount of $394,010.54. The district court ultimately adopted the figure from
Gibson 2 and then reduced it further in response to the defendants’ argument
that some of the calculated parts had been made in America. The district court
entered an order for a personal money judgment against defendants for
$430,701.12.
II.
On appeal, defendants argue that their counsel’s performance denied them
their Sixth Amendment right to effective assistance of counsel. To demonstrate
constitutionally ineffective assistance of counsel, the defendants have to prove
that (1) counsel’s performance was deficient, which is to say, it fell below an
objective standard of reasonableness, and (2) the deficient performance actually
Nos. 18‐2920 & 18‐2921 Page 4
prejudiced their defense. Strickland v. Washington, 466 U.S. 668, 688 (1984).
Presenting an ineffective assistance claim on direct appeal without the benefit of
record development is generally disfavored, and a defendant typically has only a
“trifling prospect of success.” United States v. Flores, 739 F.3d 337, 341–42 (7th Cir.
2014). But direct appeal is the only opportunity to raise a Strickland claim that
addresses forfeiture or restitution because a defendant cannot obtain collateral
relief for deprivations of property. See Barnickel v. United States, 113 F.3d 704, 706
(7th Cir. 1997). While Vibgyor and Verma have appropriately raised their claim
on direct appeal, they have failed to show that their counsel’s performance was
constitutionally deficient.
There is a “strong presumption that counsel’s conduct falls within the wide
range of reasonable professional assistance.” Strickland, 466 U.S. at 689.
Accordingly, a defendant has to identify specific actions or omissions that “could
not be the result of professional judgment.” Koons v. United States, 639 F.3d 348,
351 (7th Cir. 2011). This bar is very low: “a counsel’s representation ‘need not be
perfect, indeed not even very good, to be constitutionally adequate.’” Delatorre v.
United States, 847 F.3d 837, 845 (7th Cir. 2017) (citation omitted). Defendants
challenge several of their counsel’s actions, but none fall outside the objective
standards of the profession.
First, defendants argue that counsel should have sought a continuance to
familiarize herself with the government’s late disclosure of its calculations. At
sentencing, defense counsel argued that the late disclosure was not timely, in
violation of Federal Rule of Criminal Procedure 32.2(b)(2)(b). The court then
asked whether counsel’s objection to the timing was a request for a continuance.
Counsel responded that a continuance was unnecessary because her team
“worked tirelessly yesterday to examine these numbers.” Her objection on
timing grounds was not made because the late disclosure had left her
unprepared. Instead, she clarified that her procedural objection on timeliness
underscored the unreliability of the government’s calculations. She explained,
“[T]he point that we are trying to make, for the record, is that the government
continually changed its numbers throughout this process.”
It was not constitutionally deficient performance to decline a continuance. If
counsel is able to prepare for proceedings without the assistance of a
continuance, then the continuance is not necessary. And counsel’s performance
in the rest of the hearing made clear that she was prepared and had, in fact,
“worked tirelessly” to examine the late‐breaking disclosure. For example, she
Nos. 18‐2920 & 18‐2921 Page 5
asked detailed questions about Gibson’s decision to exclude from his calculations
those payments made to a particular business partner. Defendants now argue
that the court offered a continuance because some information that the
government provided was password protected, meaning that defense counsel
did not have access to all of the information that she needed to represent them. In
reality, the discussion of password protection came later in sentencing, when
defense counsel was challenging the government’s decision to rely on bank
records rather than individual contracts. That discussion also highlights the fairly
sophisticated arguments that defense counsel made, which underscore that it
was not deficient for her to forgo requesting a continuance. Further, as the
government points out, the decision not to request a continuance certainly could
be “the result of professional judgment,” Koons, 639 F.3d at 351, because delay
would also have given the government more time to prepare its responses to the
defense’s preferred calculation. Thus, a strategic decision to proceed without an
extension of time is not constitutionally deficient performance.
Defendants’ other candidates for defective performance fare no better. They
argue that there was a “reasonable probability that the forfeiture amount would
have been reduced” but for a handful of other “errors”: the failure to prove
arguments asserted in defendants’ Memorandum in Opposition to the
Government’s Forfeiture Calculation; the failure to call witnesses to refute the
government’s method of calculation; the failure to put on evidence that certain
military parts involved in the calculation were still usable; and the decision not
to call defendant Verma as a witness. But defendants address these actions only
in their discussion of the prejudice prong of Strickland, not in their discussion of
deficiency—they never explain why those actions constitute deficient
performance rather than strategic choices. To succeed on their claim, they must
demonstrate that those actions constituted deficient performance, not merely that
they influenced the outcome at sentencing. See Strickland, 466 U.S. at 700(“Failure to make the required showing of either deficient performance or
sufficient prejudice defeats the ineffectiveness claim.”). And it is easy to conceive
of legitimate strategic rationales for each of those decisions. See, e.g., Harrington v.
Richter, 562 U.S. 86, 110–11 (2011) (holding that the failure to put on a competing
expert does not constitute deficient performance); Toliver v. McCaughtry, 539 F.3d
766, 775 (7th Cir. 2008) (noting that “counsel may make a legitimate strategic
decision not to call a witness”). We conclude, therefore, that defendants have not
shown that their counsel’s assistance was ineffective.
AFFIRMED