United States v. Nicholson

10-4544-pr (L)
United States v. Nicholson
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 7th day of January, two thousand sixteen.
PRESENT: RALPH K. WINTER,
REENA RAGGI,
CHRISTOPHER F. DRONEY,
Circuit Judges.
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UNITED STATES OF AMERICA,
Appellee,
No. 10-4544-pr;
v. No. 14-3711-pr
JAMES NICHOLSON,
Defendant-Appellant.
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APPEARING FOR APPELLANT: ANDREW J. FRISCH, ESQ. (Jeremy B. Sporn,
Esq., on the brief), New York, New York.
APPEARING FOR APPELLEE: JENNIFER L. BEIDEL, Assistant United States
Attorney (Justin Anderson, Assistant United
States Attorney, on the brief), for Preet Bharara,
United States Attorney for the Southern District
of New York, New York, New York.
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Consolidated appeal from judgments of the United States District Court for the
Southern District of New York (Richard J. Sullivan, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgments entered on November 2, 2010, and September 25,
2014, are AFFIRMED.
Defendant James Nicholson, who over approximately six years defrauded more
than 250 people, causing a loss of more than $100,000,000, stands convicted, based on his
guilty plea, of securities fraud, see 15 U.S.C. §§ 78j(b), 78ff; investment adviser fraud, see
id. §§ 80b-6, 80b-17; and mail fraud, see 18 U.S.C. § 1341. On this consolidated appeal
from the judgment of conviction and from the denial of his habeas challenge to that
conviction, Nicholson argues (1) that his counsel was constitutionally ineffective at plea
and sentencing for failing to advise him that double jeopardy barred consecutive prison
sentences for mail and securities fraud based on the same conduct; and (2) that his total
40-year prison sentence was substantively unreasonable. We assume the parties’
familiarity with the facts and the record of prior proceedings, which we reference only as
necessary to explain our decision to affirm.
1. Ineffective Assistance of Counsel
A defendant complaining of ineffective assistance of counsel bears the heavy
burden to show both that counsel’s conduct “fell below an objective standard of
reasonableness,” and “a reasonable probability that, but for counsel’s unprofessional
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errors, the result of the proceeding would have been different.” Strickland v. Washington,
466 U.S. 668, 688, 694 (1984); see also United States v. Kimber, 777 F.3d 553, 562 (2d
Cir. 2015); United States v. Arteca, 411 F.3d 315, 320 (2d Cir. 2005). Nicholson cannot
carry this burden with respect to counsel’s purported failure to identify a double jeopardy
challenge to consecutive sentences because the argument is foreclosed by precedent. In
United States v. Reed, 639 F.2d 896, 905 (2d Cir. 1981), this court held that the federal
mail and securities fraud statutes “properly exist ‘side by side’” in addressing different
harms and, therefore, do not admit a multiplicity challenge to the charging of both crimes
in a single indictment. More to the point of this case, Reed identified “no congressional
intent to preclude multiple penalties when a defendant has been convicted of both mail
fraud and securities fraud.” Id. at 905–06. Counsel can hardly be deemed
constitutionally ineffective for not pursuing an argument at odds with this controlling
precedent. See Tellado v. United States, 745 F.3d 48, 55 (2d Cir. 2014) (denying
ineffectiveness claim where counsel’s actions comported with “law as it then stood”).
In urging otherwise, Nicholson suggests that mail fraud was effectively a lesser
included offense of the securities fraud in this case. We need not here decide whether this
argument, raised for the first time on appeal, is barred by Nicholson’s guilty plea because it
fails in any event.1 Mail fraud requires proof of an element—use of the mails—not
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The Supreme Court has left open the possibility that a double jeopardy violation apparent
on the face of the indictment or the record existing at the time a plea is entered is not
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required by securities fraud. See United States v. Reed, 639 F.2d at 905. Nicholson
submits that multiplicity should not be assessed by looking only to the elements of mail
and securities fraud, see Blockburger v. United States, 284 U.S. 299, 304 (1932), but by
looking to the “reality of the facts presented,” which he submits demonstrate that the
crimes were not distinct, Appellant’s Br. 33. Even if such an argument could be
reconciled with the Supreme Court’s rejection of a “same conduct” approach in favor of
Blockburger’s “same offense” inquiry, see United States v. Dixon, 509 U.S. 688, 704
(1993), the record does not support it here. A number of Nicholson’s fraudulent mailings
reached beyond the purchase or sale of securities, and his own plea allocution
acknowledged that he maintained the securities scheme through fraudulent
communications made by means other than the mails.
Thus, his multiplicity challenge fails on the merits, and counsel cannot be deemed
constitutionally ineffective for failing to pursue it.
2. Substantive Reasonableness
In challenging the substantive reasonableness of his 40-year prison sentence,
Nicholson confronts the significant hurdle of his plea agreement waiver of the right to
appeal any sentence less than 45 years. While Nicholson advances various arguments for
not enforcing this waiver, we need not address them here because he fails, in any event, to
waived. See United States v. Broce, 488 U.S. 563, 575–76 (1989). That, however, is not
this case.
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demonstrate that his within-Guidelines sentence fell outside the broad range of choices
available to the district court. See United States v. Cavera, 550 F.3d 180, 200 (2d Cir.
2008) (en banc) (“[F]or a sentence to be substantively unreasonable, it must fall outside the
‘broad range’ warranted by the totality of the circumstances.” (quoting United States v.
Jones, 531 F.3d 163, 174 (2d Cir. 2008))); United States v. Sero, 520 F.3d 187, 189 (2d Cir.
2008) (“We recognize that in the overwhelming majority of cases, a Guidelines sentence
will fall comfortably within the broad range of sentences that would be reasonable in the
particular circumstances.” (internal quotation marks omitted)).
While Nicholson argues that his sentence affords too much weight to the
Guidelines’ loss calculations and too little weight to the need to avoid sentencing
disparities, the record is to the contrary. The district court specifically stated that it
viewed the loss Guidelines as only a “crude measure” of loss. Gov. Addendum 72.
Thus, in imposing sentence, it did not rely only on the $100 million total loss that triggered
Nicholson’s Guidelines enhancement, but also on its review of hundreds of victims’ letters,
and on the in-court statements of nine victims. It was this case-specific information that
put Nicholson’s crime in context, revealing the identified loss to have been sustained by
hundreds of individuals of modest means, many of whom lost their life savings. Further,
the district court considered that, as Nicholson’s scheme collapsed causing these losses, he
purchased a $25 million home in the Hamptons. Id. at 71. In sentencing Nicholson, the
district court acknowledged Nicholson’s favorable personal characteristics but explained
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that it kept “coming back to the victims,” observing that “there are very few crimes of this
magnitude that have inflicted this much pain.” Id. at 72, 76. It decided not to impose the
45-year sentence at the high end of Nicholson’s Guidelines range, as urged by the
government, in order to allow Nicholson “at least the hope of living the last years of his life
as a free man.” Id. at 75. But it concluded that a sentence less than 40 years “would be
inappropriate” both because “it would be unfair to the victims” and because “it would send
the wrong message” to others who might be tempted to engage in such fraud. Id. at 76.
Such reasoning supports the challenged sentence, and Nicholson fails to
demonstrate otherwise by reference to any similarly situated comparators. See United
States v. Fernandez, 443 F.3d 19, 31–32 (2d Cir. 2006) (noting that sentencing statute
“mandates that sentencing judges take into account ‘unwarranted sentence disparities
among defendants with similar records who have been found guilty of similar conduct’”
(emphasis added by Fernandez) (quoting 18 U.S.C. § 3553(a)(6))); see also United States
v. Coppola, 671 F.3d 220, 254 (2d Cir. 2012) (stating that § 3553(a)(6) “is only one of
several factors that must be weighted and balanced and how the factor is weighed is a
matter firmly committed to the discretion of the sentencing judge” (internal quotation
marks omitted)). Thus, we conclude that Nicholson’s reasonableness challenge to his
sentence fails on the merits.
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3. Conclusion
We have considered Nicholson’s remaining arguments, including those in his
supplemental pro se submission, and conclude that they either fall outside the scope of this
court’s certificate of appealability, which we decline to expand, or are without merit.
Accordingly, the judgments of the district court are AFFIRMED.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
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