United States v. Howard Eugene Liner ( 2006 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 04-2497
___________
United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* District of Minnesota.
Howard Eugene Liner, *
*
Appellant. *
___________
Submitted: November 18, 2005
Filed: January 31, 2006
___________
Before WOLLMAN, LAY, and MELLOY, Circuit Judges.
___________
WOLLMAN, Circuit Judge.
Howard Eugene Liner was convicted of one count of making a false statement
to a federal officer, a violation of 18 U.S.C. § 1001; seventeen counts of wire fraud,
violations of 18 U.S.C. § 1343; and one count of money laundering, a violation of 18
U.S.C. § 1957. The district court1 sentenced Liner to 135 months’ imprisonment and
ordered Liner to pay $1,625,666.67 in restitution. On appeal, Liner challenges certain
trial court rulings, the sufficiency of the evidence, and the propriety of the restitution
award. We affirm.
1
The Honorable Ann D. Montgomery, United States District Judge for the
District of Minnesota.
I.
In 1999, Liner devised a wire fraud scheme involving several purported
investment trading programs. He held informational meetings in Minnesota to solicit
investments from his wife’s relatives and his father-in-law’s friends. To induce
attendees to invest, he claimed that he had connections to high-ranking military and
government officials and access to exclusive investment opportunities. Liner assured
potential investors that federal agencies supervised these programs. Liner explained
that their money would fund humanitarian projects, while earning them a high rate of
return. Because these trading programs were secret, he required potential investors
to sign nonsolicitation agreements. Relying on these representations, investors wired
more than $1.6 million to Liner’s Bank of America account in Texas.
Liner told the investors that the first trade had been successful and made other
assurances, but he never invested the money. Instead, he repaid previously defrauded
investors, made certain lulling payments, bought vehicles, remodeled his home, and
paid for his daughter’s wedding. When investors became suspicious and demanded
proof that the trading programs were legitimate, Liner reassured them. When that
failed, he stalled them. Liner told them that the government had frozen the accounts,
that the funds had been stolen, that Liner was the victim of a large-scale fraud, that
Liner was suspended from participating in the programs, and that a flood in Texas had
destroyed bank records.
On October 21, 2002, Liner, aware of an investigation by the Federal Bureau
of Investigation in Minnesota, contacted an FBI agent. During this phone call, Liner
admitted that he had not invested the money but instead had swapped the investors’
funds with personal funds held in a Swiss bank account. Further, he claimed that
another person had absconded with the money and that he (Liner) had had to sue for
the funds. Liner claimed that he had already received a judgment in England. Months
later, Liner admitted that he had no funds in Switzerland.
-2-
On appeal, Liner challenges certain trial court rulings, the sufficiency of the
evidence, and the propriety of the restitution award.
II.
We first address the district court’s denial of Liner’s motion for transmittal of
letters rogatory to depose a foreign citizen. We review this denial for abuse of
discretion. United States v. Adcock, 558 F.2d 397, 406 (8th Cir. 1977); United States
v. Kelley, 36 F.3d 1118, 1124 (D.C. Cir. 1994).
Liner contends that the district court erred when it denied his motion for letters
rogatory to depose Gabriel MacEnroe, a Swiss citizen who purportedly ran an
investment program. In exceptional circumstances, a district court may issue letters
rogatory to depose a witness in a criminal case. Fed. R. Crim. P. 15(a); Fed. R. Civ.
P. 28(b)(3). To establish exceptional circumstances, the moving party must show the
witness’s unavailability and the materiality of the witness’s testimony. See Adcock,
558 F.2d at 406; accord Kelley, 36 F.3d at 1124. MacEnroe’s unavailability is not
disputed. Liner has failed to show, however, that MacEnroe’s testimony would be
material. In his motion, Liner argued that MacEnroe’s testimony might show that
Liner invested the victims’ money in a legitimate investment program in Switzerland,
but Liner offered no evidence to support this claim. Accordingly, we conclude that
the district court did not abuse its discretion in denying Liner’s motion.
III.
Next, Liner argues that the district court erred in admitting the expert testimony
of Herbert Biern, Senior Associate Director at the Federal Reserve Board, contending
that Biern testified to the ultimate issue to be decided by the jury. We review the
district court’s evidentiary ruling for abuse of discretion. United States v. Walker, 393
F.3d 842, 848 (8th Cir. 2005). Biern testified that the prospectus Liner provided to
investors contained some of the twelve indices of fraudulent high-yield investment
-3-
schemes. Biern expressed no opinion as to whether Liner had the requisite mens rea
to commit wire fraud or whether Liner’s program was, in fact, fraudulent.
Rule 704(b) prohibits an expert from rendering an opinion as to whether the
defendant had the mental state constituting an element of the crime charged.
“Testimony that, when combined with other evidence, might imply or otherwise cause
a jury to infer this ultimate conclusion, however, is permitted under the rule.” United
States v. Vesey, 338 F.3d 913, 916 (8th Cir. 2003). Here, although Biern implied that
Liner’s program was fraudulent, he did not directly address Liner’s intent to defraud.
We conclude that the district court did not abuse its discretion in admitting Biern’s
testimony. In any event, any error in admitting Biern’s testimony was harmless in
light of the strength of the government’s other evidence against Liner.
IV.
Liner challenges the sufficiency of the evidence with respect to all counts on
which he was convicted. We review de novo the sufficiency of the evidence and view
the evidence in a light most favorable to the verdict, giving it the benefit of all
reasonable inferences. United States v. Hill, 410 F.3d 468, 471 (8th Cir. 2005). We
uphold the verdict if a reasonable jury could find the defendant guilty beyond a
reasonable doubt. Id.
A.
Liner first argues that the evidence was insufficient to support his conviction
on Count I, making false statements to a federal officer. Liner contends that he did
not make the statement alleged in the indictment, and, even if he did, the statement
was neither false nor material. Title 18, Section 1001, prohibits making “any
materially false, fictitious or fraudulent statement or representation” regarding any
matter within the jurisdiction of any department or agency of the United States. 18
U.S.C. § 1001(a). To sustain a conviction under this section, the government must
-4-
prove that the defendant’s false statements were material to the governmental inquiry.
U.S. v. Robertson, 324 F.3d 1028, 1030 (8th Cir. 2003).
The indictment alleged that Liner told an FBI agent that “another person had
absconded with all the money invested by Minnesota investors.” At trial, the agent
testified that Liner made the following statements: (1) Christopher Herron had taken
the investment money and Liner had to pursue him through the courts in order to get
a remedy in England; (2) Liner used the victims’ funds for personal expenses; (3)
Liner swapped the victims’ money with other money he had invested in Switzerland,
crediting the victims with other monies under Liner’s possession and control; and (4)
the account in Switzerland was under the name “Gabriel MacEnroe” because only
Swiss citizens could maintain Swiss accounts. Liner later admitted to the agent that
he had no funds in Switzerland. From this testimony, a jury could reasonably find that
Liner made the statement alleged in the indictment and that the statement was false
and material to the government’s investigation. Thus, the evidence was sufficient to
support Liner’s conviction on Count I.
B.
Liner next contends that the evidence was insufficient to support his conviction
on seventeen counts of wire fraud and one count of money laundering. Specifically,
Liner argues that he lacked the requisite intent. Liner’s wire fraud conviction required
that the government prove beyond a reasonable doubt that he intended to defraud.
United States v. Frost, 321 F.3d 738, 741 (8th Cir. 2003). On the money laundering
count, the government was required to prove that Liner knowingly engaged or
attempted to engage in monetary transactions in criminally derived property of a value
greater than $10,000. United States v. Pizano, 421 F.3d 707, 722 (8th Cir. 2005). We
conclude that the evidence overwhelmingly supported the jury’s verdict. For example,
one victim testified that Liner promised a fifty-percent return on his investment each
month, that there was little or no risk, and that Alan Greenspan, Chairman of the
Federal Reserve Board, supervised the programs. Based on these and other
-5-
assurances, the victim wired $290,000 to Liner’s bank account, but the victim received
only one payment of $50,000. The victim explained to the jury, as best he could, the
mechanics of Liner’s trading program. Further, the jury heard testimony regarding
Liner’s lavish expenditures during the relevant time period. Having considered this
and other evidence, a jury could reasonably conclude that Liner intended to defraud
the victims and that he knowingly engaged in money laundering.
V.
Liner challenges the sentence imposed by the district court. He contends that
Blakely v. Washington, 542 U.S. 296 (2005), and United States v. Booker, 543 U.S.
220 (2004), render his sentence invalid. Because Liner raises this issue for the first
time on appeal, we review for plain error, and we remand for resentencing only if
Liner establishes that there was error that was plain and that affected his substantial
rights. United States v. Olano, 507 U.S. 725, 732 (1993); United States v. Pirani, 406
F.3d 543, 549 (8th Cir. 2005) (en banc). To show that the sentence affected his
substantial rights, Liner must show that the district court likely would have granted
a lesser sentence had the district court not treated the Sentencing Guidelines as
mandatory. Pirani, 406 F.3d at 552.
In this case, the district court’s sentencing enhancements were plainly erroneous
in light of Booker because they were imposed on the basis of judge-found facts in a
mandatory guidelines regime. Pirani, 406 F.3d at 550. This error did not affect
Liner’s substantial rights, however, for the record reflects that the sentence likely
would have been the same had the district court treated the guidelines as advisory.
The district court denied the government’s request for an upward departure and
sentenced Liner at the top of the guidelines range. The district court expressed its
satisfaction with the sentence:
I think 135 months, considering your age, is an appropriate sentence
under the circumstances. I do find that this sentence of 135 months
-6-
comports with the statutory objectives for sentencing as expressed in 18
U.S.C. § 3553. You’ve fooled a lot of people for a long time, but this
sentence is entirely appropriate, and the jury spoke loudly and clearly in
your case.
Sentencing Tr. at 99. Accordingly, we conclude that Liner is not entitled to
resentencing.
VI.
Finally, Liner argues that the district court erred in awarding $155,000 in
restitution to victims not specified in the indictment. We review the district court’s
restitution order for abuse of discretion and review de novo its application of the
Mandatory Victims Restitution Act. United States v. Ross, 210 F.3d 916, 924 (8th
Cir. 2000). So long as the indictment details a broad scheme encompassing
transactions beyond those alleged in the counts of conviction, the district court may
order restitution to victims who suffered from defendant’s criminal activity beyond
what was described with particularity in the indictment. United States v. Bush, 252
F.3d 959, 963 (8th Cir. 2001); see 18 U.S.C. 3663(a)(1)(A). Accordingly, we look to
the indictment to determine whether the award constitutes a permissible restitution
order.
Liner’s indictment alleged a scheme to defraud that encompassed victims and
losses beyond those specified in Counts 2 through 18. Liner’s entire scheme,
therefore, brings the unspecified victim’s losses within the outer limits of the
restitution order, and thus the district court properly afforded those victims relief.
The sentence and restitution order are affirmed.
______________________________
-7-