United States v. Zane Balsam

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
September 4, 2008
No. 07-12946 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 99-08125-CR-DTKH
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ZANE BALSAM,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(September 4, 2008)
Before CARNES, WILSON and PRYOR, Circuit Judges.
PER CURIAM:
This is Zane Balsam’s appeal of his conviction and sentence for engaging in
financial transactions with criminally derived property in violation of 18 U.S.C. §
1957 and his sentences for money laundering with intent to conceal the proceeds in
violation of 18 U.S.C. § 1956(a)(1)(B) and conspiring to commit a money
laundering offense in violation of 18 U.S.C. § 1956(h).
I.
In 1996 Zane Balsam and another man founded what they represented to be
a viatical investment company—a company that buys life insurance policies at a
discounted rate from terminally ill policy holders. In fact, the company was simply
a vehicle to steal its investors’ money. Balsam and several others were charged
with and tried for various offenses related to the scheme. During the trial Balsam
made a motion for a judgment of acquittal or, in the alternative, a new trial. The
district court denied his motion. At the close of evidence, Balsam renewed his
motion, and the court again denied it. The jury convicted him of one count of
conspiracy to commit a money laundering offense in violation of 18 U.S.C. §
1956(h), one count of engaging in a financial transaction with criminally derived
proceeds in excess of $10,000 in violation of 18 U.S.C. § 1957, and nine counts of
money laundering with the intent to conceal or disguise the nature, source or
ownership of the proceeds in violation of 18 U.S.C. § 1956(a)(1)(B)(i).
Before sentencing, the probation office prepared a presentence investigation
report on Balsam. In the PSR the probation office first grouped all of Balsam’s
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offenses under U.S.S.G. § 3D1.2 because they “involv[ed] substantively the same
harm.” The money laundering charges carried the highest offense level, so
U.S.S.G. § 3D1.3 required that the probation office use that offense level in
calculating Balsam’s guideline range. The probation office assigned Balsam a base
offense level of twenty-three for the money laundering charges under U.S.S.G. §
2S1.1(a). It went on to assign him an eleven level enhancement for laundering
over $50 million under U.S.S.G. § 2S1.1(b)(2)(L). Finally, it assigned Balsam a
four level increase under U.S.S.G. § 3B1.1(a) on the ground that he organized or
led a criminal activity involving five or more participants. This resulted in an
adjusted offense level of thirty-eight. Combined with a criminal history category
of I, the probation office calculated Balsam’s guideline range to be between 235
and 293 months imprisonment.
Balsam made numerous objections to the PSR, some of which were resolved
before sentencing, and the remainder of which were overruled at sentencing. At
the sentence hearing, Balsam objected that two of the changes that had already
been agreed upon were not included in the PSR. The government conceded the
mistake, and, after striking those sentences, the court adopted the PSR. The
government then moved for an upward departure under U.S.S.G. § 5K2.0 because
of the large number of vulnerable victims involved. The court granted the motion,
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which increased Balsam’s guideline range to 360 months to life imprisonment.
The court sentenced Balsam to 360 months imprisonment, three years supervised
release, and $50 million in restitution. He appealed, and we affirmed his
conviction and sentence. United States v. Arroya, No. 02-10368, slip. op. at 51
(11th Cir. June 24, 2004) (unpublished).
Following that decision, the Supreme Court issued United States v. Booker,
543 U.S. 220, 125 S. Ct. 738 (2005), which held that it is unconstitutional to apply
the sentencing guidelines as mandatory. Id. at 245, 125 S. Ct. at 756–57. As a
result, the Supreme Court granted certiorari, vacated our opinion, and remanded for
us to consider Balsam’s appeal in light of Booker. Balsam v. United States, 546
U.S. 801, 126 S. Ct. 41 (2005). We again affirmed his convictions, but we vacated
his sentence and remanded for resentencing. United States v. Arroya, No.
02-10368, 2007 WL 30034, at *2 (11th Cir. Jan. 5, 2007).
Before Balsam’s second sentence hearing, he filed four pro se motions: (1)
a motion to vacate or set aside the restitution order; (2) a motion to subpoena
witnesses and testimony; (3) a motion to amend, correct, or redo the PSR; and (4) a
motion to reverse his conviction for engaging in financial transactions with
criminally derived property. The district court denied all four but denied the
motion for subpoena “without prejudice to renewal by counsel.” Balsam also filed
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two resentencing memoranda, one pro se and one through counsel. In those
memoranda, he argued, among other things, that: (1) his original sentence was
unreasonable; (2) his objections to the PSR at the first sentence hearing were
sustained but not reflected in the PSR; (3) it was unconstitutional to enhance his
sentence for facts not admitted by him or found by a jury beyond a reasonable
doubt; (4) he did not deserve an aggravating-role enhancement; and (5) he was not
guilty of engaging in financial transactions with criminally derived property. At
sentencing Balsam also introduced additional evidence of his good character and
remorse.
The district court sustained Balsam’s objection to the PSR and instructed the
probation office to make sure that the PSR reflected its earlier ruling. The court
went on to reaffirm its earlier findings, including its calculation of Balsam’s
guideline range, and explicitly considered the 18 U.S.C. § 3553(a) sentencing
factors. After acknowledging that the guidelines were only advisory, the court
sentenced Balsam to 120 months imprisonment for conspiracy to commit money
laundering and 120 months imprisonment for engaging in a financial transaction
with criminally derived proceeds in excess of $10,000, with the sentences to run
concurrently. The court also sentenced Balsam to 240 months imprisonment for
each of the nine counts of money laundering with the intent to conceal or disguise
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the nature, source or ownership of the proceeds, with those sentences to run
concurrently. The 120 month sentences and the 240 month sentences, however,
were to run consecutively for a total of 360 months imprisonment. In addition,
Balsam was again sentenced to three years of supervised release and $50 million in
restitution.
Balsam now appeals his conviction for engaging in financial transactions
with criminally derived property, his sentences for all of his convictions, and the
denials of the motions he made before resentencing.
II.
First, Balsam contends that the district court erred in denying five of the
motions that he made before being resentenced. These were: (1) a motion to
vacate or set aside the restitution order; (2) a motion to correct the PSR; (3) a
motion to subpoena witness testimony; (4) a motion to recalculate the guideline
range based on exceptions to the mandate rule; and (5) a motion to reverse the jury
verdict on his conviction for engaging in a financial transaction with criminally
derived proceeds in excess of $10,000.
The first three of these motions are listed in one of the subheadings of the
argument section of his brief but not mentioned anywhere else. Because he failed
to explain why he believes the district court erred by denying these motions, he has
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waived these issues on appeal. See Flanigan’s Enters. v. Fulton County, 242 F.3d
976, 987 n.16 (11th Cir. 2001) (A bare allegation will waive an issue on appeal if
the party “fail[s] to elaborate or provide any citation of authority in support of the .
. . allegation.”).
His two remaining arguments are scantily briefed, but we will address them.
Balsam argues that the district court erred by denying his motion to recalculate his
guideline range before resentencing, however we conclude below that the district
court did not err in calculating Balsam’s sentencing guideline range. Therefore, it
could not have erred in denying his motion to recalculate it.
The law of the case doctrine also obligates us to reject Balsam’s argument
that the district court erred by denying his motion for acquittal. That doctrine
“holds that subsequent courts will be ‘bound by the findings of fact and
conclusions of law made by the court of appeals in a prior appeal of the same
case.’” Culpepper v. Irwin Mortg. Corp., 491 F.3d 1260, 1271 (11th Cir. 2007).
Following Booker, we affirmed Balsam’s convictions and remanded only on the
sentencing issues, Arroya, No. 02-10368, 2007 WL 30034, at *2, so our decision
affirming his convictions are binding as the law of the case. “We will not be
barred from reconsidering the law-of-the-case ‘when (1) a subsequent trial
produces substantially different evidence[,] (2) controlling authority has since
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made a contrary decision of law applicable to that issue[,] or (3) the
law-of-the-case is clearly erroneous and will work manifest injustice if not if not
reconsidered.’” Culpepper, 491 F.3d at 1271 (quoting Wheeler v. City of Pleasant
Grove, 746 F.2d 1437, 1440 (11th Cir.1984)). However, Balsam has not even
asserted that any of these exceptions apply, much less explained why any would,
so we are bound by the earlier panel’s affirmance of his convictions.
Balsam raises this issue again by arguing that the district court erred in
denying his first motion for acquittal after trial, but the law of the case also
forecloses this argument.
III.
Balsam next contends that the district court erred by commenting on the
record at his resentencing that it believed him to be the mastermind behind the
fraud. This was a well-supported factual finding by the district court, particularly
in light of the uncontested fact that Balsam was a co-founder of the fraudulent
viatical investment company. Balsam, however, does not argue that the finding
was clearly erroneous, but instead asserts that the comment itself was somehow
inappropriate. It is entirely appropriate for a district court to inform the parties of
its findings and explain its reasoning for the sentence it imposes on the defendant.
See Gall v. United States, 552 U.S. ___, ___, 128 S. Ct. 586, 597 (2007) (stating
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that it is a procedural error to fail to adequately explain the defendant’s sentence).
This does not even approach the extraordinarily high threshold for a judge’s
comments during sentencing to be reversible error. See United States v.
Greenman, 700 F.2d 1377, 1379 (11th Cir. 1983) (holding that, for a district
judge’s comments at sentencing to be error, they must “compel[] us to conclude
that the district judge closed his mind to evidence favorable to appellant before the
sentencing proceedings were concluded.”); see also Liteky v. United States, 510
U.S. 540, 555, 114 S. Ct. 1147, 1157 (1994) (holding that a judge’s comments
during a trial will only be per se error “if they reveal such a high degree of
favoritism or antagonism as to make fair judgment impossible.”).
IV.
Balsam also contends that the district court made several errors in
calculating his sentencing guideline range. We review de novo the district court’s
application of the guidelines, and we review its factual findings only for clear
error. United States v. Westry, 524 F.3d 1198, 1218 (11th Cir. 2008).
A.
Balsam first argues that the district court erred in calculating his sentencing
guideline range because it relied on facts to which he did not admit and that were
not found by the jury beyond a reasonable doubt. Our case law makes it clear that
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this is not error. See United States v. Smith, 480 F.3d 1277, 1281 (11th Cir.), cert.
denied, 128 S. Ct. 175 (2007) (“When the district court applies the Guidelines in an
advisory manner, nothing in Booker prohibits district courts from making, under a
preponderance-of-the-evidence standard, additional factual findings that go beyond
a defendant’s admisssions.”).
B.
Balsam next argues that the district court erred by applying a four-level
aggravating role enhancement under U.S.S.G. § 3B1.1 on the ground that it was
unsupported by the evidence.1 The district court specifically found that “Balsam
was, in fact, an organizer of criminal activity” because “[h]e worked in tandem
with [a co-conspirator] to develop the overall criminal activity and to develop the
forms and other representations that would be made to induce people to invest” in
his viatical insurance company. This finding is well-supported by the trial record.
Moreover, Balsam’s PSR stated that he was involved in the conspiracy for
more than three years, during which he taught co-conspirators about the viatical
business, recruited at least three people to help in the scheme, and used several
1
Balsam also asserts that, because he was not charged with fraud, he could not be a
leader or organizer of the fraudulent viatical insurance scheme. This argument is meritless. The
PSR makes it clear that he led and organized money laundering activities. Also, in calculating
the applicable guideline range, a sentencing court can take into account relevant uncharged
conduct. See United States v. Amedeo, 370 F.3d 1305, 1314 (11th Cir. 2004).
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others to hide his illicit gains. Although he objected to other portions of the
paragraph describing his role in the scheme, he did not object to these statements.
He is therefore deemed to have admitted them. See United States v. Wade, 458
F.3d 1273, 1277 (11th Cir. 2006) (“It is the law of this circuit that a failure to
object to allegations of fact in a PS[R] admits those facts for sentencing
purposes.”). These actions alone would support a §3B1.1 aggravating role
enhancement. See United States v. Thomas, 446 F.3d 1348, 1355 n.2 (11th Cir.
2006) (holding that a four level role enhancement was supported by evidence that
the defendant recruited others to participate in the crime).
C.
Balsam’s third argument is that the district court erred in two ways by
departing upward due to the large number of vulnerable victims. One, he asserts,
is that the guidelines for money laundering do not allow it. We cannot find any
support for this argument. The district court departed upward under U.S.S.G. §
5K2.0, which is equally applicable to all offenses. Insofar as Balsam’s argument is
that the victims of the fraudulent viatical insurance scheme were not victims of
money laundering, we again note that a district court can consider all relevant
conduct—including uncharged or acquitted conduct—in applying the sentencing
guidelines. See United States v. Amedeo, 370 F.3d 1305, 1314 (11th Cir. 2004).
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Balsam’s other argument on this point is that he did not receive sufficient
notice that the district court was considering a departure. Federal Rule of Criminal
Procedure 32(h) states:
Before the court may depart from the applicable sentencing range on a
ground not identified for departure either in the presentence report or
in a party’s prehearing submission, the court must give the parties
reasonable notice that it is contemplating such a departure. The notice
must specify any ground on which the court is contemplating a
departure.
While this argument might have had some merit in his first appeal, it
has none here. The latest that Balsam could have been aware that the district
court was contemplating an upward departure was in April 2002 at his initial
sentence hearing, when the government made its motion. Balsam did not
object at that time, and we affirmed the district court’s departure on
Balsam’s first appeal. Balsam was sentenced again in June 2007, more than
five years after the government first indicated that it was seeking an upward
departure and more than five years after the district court explained why it
was receptive to that motion. Five years is “reasonable notice.” Fed. R.
Crim. P. 32(h); see United States v. Meeker, 411 F.3d 736, 744 (6th Cir.
2005) (holding that, under the facts of that case, less than three days notice
was not unreasonable).
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D.
Balsam’s fourth argument asserts that the district court let the jury
return a general verdict form on the conspiracy charge that did not specify
which substantive offense the jury found Balsam to have conspired to
commit. As a result of this, Balsam argues, is that the district court
arbitrarily assumed that the conviction was for conspiracy to commit a
substantive offense under § 1956, which carries a base offense level of
twenty-three, instead of a conspiracy to commit a substantive offense under
§ 1957, which carries a base offense level of seventeen. U.S.S.G. §§ 2S1.1,
2S1.2; U.S.S.G. App. A.
This argument is without merit because the guidelines actually require
the court to treat a conviction for a multi-object conspiracy “as if the
defendant had been convicted on a separate count of conspiracy for each
offense that the defendant conspired to commit.” U.S.S.G. § 1B1.2(d). The
district court was also required to make its calculations based on the
conviction with the highest base offense level. U.S.S.G. § 3D1.3. This
means that, because Balsam’s convictions for money laundering came with a
base offense level of twenty-three, his guideline range calculation would be
the same regardless of what the object of the conspiracy count was.
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E.
Finally, Balsam argues that the district court erred by relying on the
statements in his PSR that it had earlier struck. The record simply does not
support this allegation. The PSR was revised in response to objections made
and sustained at his sentencing. Balsam’s assertion is baseless.
Even if the presentence report had not been changed following his
first sentencing, Balsam has not identified anything in the record indicating
that the district court considered the allegedly incorrect statements on
resentencing. To the contrary, the court explicitly stated that it would
instruct the probation office to make sure that the PSR reflected all of the
ordered changes. Balsam has not met his burden of showing that the district
court imposed his sentence based on clearly erroneous facts. See Gall, 552
U.S. at ___, 128 S. Ct. at 597.
V.
Finally, Balsam contends that the district court erred in sentencing him to
360 months imprisonment. He argues both that this sentence violates the Sixth
Amendment and that it is unreasonable. Balsam’s Sixth Amendment argument is
that his sentence is unconstitutional because, in total, it exceeds the statutory
maximum for either offense. However, we have held that consecutive sentences
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are not unconstitutional as long as the sentence for each offense does not exceed
the applicable statutory maximum, and neither of Balsam’s sentences did. United
States v. Davis, 329 F.3d 1250, 1254 (11th Cir. 2003).
We turn now to Balsam’s arguments that his sentence was unreasonable.
We review the total sentence imposed by the district court for reasonableness under
an abuse of discretion standard. Gall, 552 U.S. at ___, 128 S. Ct. at 594. After
“ensur[ing] that the district court committed no significant procedural error,” we
consider the substantive reasonableness of the sentence. Gall, 552 U.S. at ___, 128
S. Ct. at 597. The party “challeng[ing] the sentence bears the burden of
establishing that the sentence is unreasonable in the light of both [the] record and
the factors in section 3553(a).” United States v. Talley, 431 F.3d 784, 788 (11th
Cir. 2005).
Balsam argues that his sentence was unreasonable because: (1) the total
sentence was the result of consecutive terms of imprisonment; and (2) he
“submitted . . . credible arguments and detailed factors and comparisons to other
sentences for other obviously more serious crimes” showing that 120 months
would be a reasonable sentence. Neither of these arguments supports a conclusion
that his sentence was unreasonable.
The district court sentenced Balsam to consecutive terms because when the
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guideline range is higher than the statutory maximum for the offense with the
highest offense level, the guidelines recommend making the sentences consecutive.
See U.S.S.G. § 5G1.2. The statutory maximum for Balsam’s money laundering
conviction was only twenty years, 18 U.S.C. § 1956(a)(1)(B)(ii), but his guideline
range was thirty years to life. The district court’s decision to follow U.S.S.G. §
5G1.2 does not make the total sentence unreasonable or in any other way improper.
See United States v. Magluta, 418 F.3d 1166, 1185 (11th Cir. 2005).
Balsam’s second argument that his sentence is unreasonable is also
unpersuasive. The district court has broad discretion in sentencing, Gall, 552 U.S.
at ___, 128 S. Ct. at 591, and the fact that it was unconvinced by Balsam’s
arguments in favor of a sentence substantially below the guideline range does not
mean that it abused that discretion, see Talley, 431 F.3d at 788. “There is a range
of reasonable sentences from which the district court may choose, and when the
district court imposes a sentence within the advisory Guidelines range, we
ordinarily will expect that choice to be a reasonable one.” Id. Here, the district
court sentenced Balsam to 360 months imprisonment, the lowest sentence within
the guideline range. Balsam has not shown that the district court abused its
discretion by doing so.
AFFIRMED.
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