United States v. Gowing and Scheringer

10-4073-cr(L) 11-683-cr (Con)
United States v. Gowing and Scheringer
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
Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York,
on the 6th day of June, two thousand twelve.
PRESENT:
RALPH K. WINTER,
CHESTER J. STRAUB,
GERARD E. LYNCH,
Circuit Judges.
____________________________________________________________
UNITED STATES OF AMERICA,
Appellee,
v. Nos. 10-4073-cr (L)
11-683-cr (Con)
DELMER GOWING, EMIL SCHERINGER,
Defendants-Appellants.
___________________________________________________________
FOR APPELLANTS: MARSHA R. TAUBENHAUS, New York, New York, for Delmer
Gowing.
KIM P. BONSTROM, Bonstrom & Murphy, Shelter Island, New
York, for Emil Scheringer.
FOR APPELLEES: LEE RENZIN, Assistant United States Attorney (Brent S. Wible,
Assistant United States Attorney, on the brief), for Preet Bharara,
United States Attorney for the Southern District of New York,
New York, New York.
UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
Defendants-Appellants Delmer Gowing and Emil Scheringer were convicted by a jury in
the United States District Court for the Southern District of New York (George B. Daniels, J.)
principally for operating a years-long, multimillion-dollar fraudulent investment scheme in
violation of the wire fraud statute, 18 U.S.C. § 1343, and the conspiracy statute, 18 U.S.C.
§ 1349. In addition, both defendants were also convicted of committing the charged crimes
while on pre-trial release, in violation of 18 U.S.C. § 3147, and Scheringer was convicted of
failing to appear, in violation of 18 U.S.C. § 3146. Gowing appeals his conviction and sentence;
Scheringer appeals only his sentence. In a separate opinion filed along with this order, we
address Gowing’s argument that he was improperly sentenced to a consecutive term of
imprisonment under 18 U.S.C. § 3147 for continuing to participate in the conspiracy after he was
arrested and released on bail. This order addresses the defendants’ remaining arguments: first,
Gowing’s argument that the district court erroneously admitted excerpts from the transcript of
another proceeding; second, Gowing’s challenge to the district court’s calculation of loss
attributable to him for sentencing purposes; and third, Scheringer’s various challenges to the
reasonableness of his sentence. We assume familiarity with the facts and history of this case,
which are set out more extensively in our parallel opinion.
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DISCUSSION
I. Admissibility of Transcript
In the only challenge either defendant makes to his conviction, Gowing argues that the
district court erred by permitting the prosecution to read aloud to the jury portions of the
transcript of a civil proceeding unrelated to this case. Assuming without deciding that Gowing
did not affirmatively waive this argument, it was not error for the district court to admit the
evidence.
Gowing was subject to a default judgment in a civil RICO case in the Northern District of
Ohio arising out of a high-yield investment program. See generally Cline v. Gowing, No. 1:04-
CV-00833, 2007 WL 978098 (N.D. Ohio March 29, 2007). After mediation, Gowing entered
into a settlement agreement, but he failed to make the agreed-upon payments and was held in
civil contempt of court. He was released only after representing to the court that he no longer
believed that certain contracts were legitimate and expected no payment on them. Portions of
Gowing’s statements to the Ohio court were relevant to the instant case insofar as they shed light
on Gowing’s defense that he had relied in good faith on misrepresentations made to him by co-
defendant Scheringer. Before trial, the district court in the instant case determined, in a ruling
not challenged on appeal, that certain portions of the transcript would be admitted, and others
excluded from evidence.
At trial, Gowing’s attorney attempted to cross-examine a witness who had testified about
the Ohio case. The prosecution argued that counsel’s questions about the Ohio proceedings
misled the jury and opened the door to admission of more of the transcript. Gowing’s counsel
did not object; rather he sought to include more of the transcript, including incriminating
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references to Scheringer that had been redacted in accordance with United States v. Bruton, 391
U.S. 123 (1968). Gowing now argues that the transcript was so damaging that the district court
in this case should not have allowed them in. He argues that the incredulity of the judge in the
Ohio case, apparent from the transcript, effectively turned that judge into a witness against
Gowing.
This argument is meritless. The district court had “broad discretion” to determine
whether cross examination questions created a “false impression[].” United States v. Vasquez,
267 F.3d 79, 85 (2d Cir. 2001), quoting United States v. Diaz, 176 F.3d 52, 80 (2d Cir. 1999).
The district court’s determination that jurors would be misled without more of the transcript was
not “arbitrary and irrational,” United States v. Dhinsa, 243 F.3d 635, 649 (2d Cir. 2001), and
thus not an abuse of discretion. By permitting jurors to hear more, the court allowed the jury –
the proper judge of the facts – to decide whether Gowing’s Ohio statements acknowledged only,
as his counsel implied, that the single Yukos contract was not valid, leaving open the possibility
that he had believed in good faith in the validity of Scheringer’s other purported contracts. Thus,
whether or not Gowing waived any objection to the admission of the additional excerpts, the
district court’s ruling was well within its discretion.
II. Gowing’s sentence
Gowing next argues that the district court erred in calculating his guideline sentence
range by finding a greater loss than was properly attributable to him. His argument is in two
parts.
First, Gowing argues that the district court ignored part of the legal standard for loss. As
Gowing notes, the loss calculation must be based on the amount which (1) was reasonably
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foreseeable to the defendant and (2) falls within the scope of his agreement with his co-
conspirators. United States v. Studley, 47 F.3d 569, 573-75 (2d Cir. 1995). Gowing argues that
the district court focused only on what was reasonably foreseeable and ignored the “scope of
[his] particular agreement with the conspirators.” United States v. Garcia-Sanchez, 189 F.3d
1143, 1147 (9th Cir. 1999). But at the sentencing hearing, the district court expressly stated, “I
think it is fairly clear that, from the evidence in this case, clearly from January 2004, Mr.
Gowing . . . knew pretty much the details of the type of activity that Mr. Scheringer was
involved in and that Mr. Gowing was agreeing to be involved in.” Particularly given that at the
hearing, Gowing contested how much loss was foreseeable to him, but not the scope of the
agreement, the court’s statement found that Gowing knowingly agreed to join the full scope of
Scheringer’s scheme. The losses attributed to him thus fell within the scope of that agreement.
Second, Gowing argues that the court erred in finding certain losses foreseeable to
Gowing. Specifically, he argues that any amount of money collected by Jay Merkle and lost in
the Scheringer scheme was not reasonably foreseeable to Gowing. The district court did not
clearly err in finding to the contrary. At sentencing, the parties agreed that Gowing’s deep
involvement in the scheme began in early 2004. The district court was entitled to infer that, by
the time Gowing met Merkle at Scheringer’s residence in 2007, Gowing would have understood
that someone spending a great deal of time in close contact with Scheringer and with access to
Scheringer’s computer must be involved in the scheme. On this basis, the court properly found
the loss reasonably foreseeable. “In reviewing findings for clear error, we are not allowed to
second-guess the trial court’s choice between permissible competing inferences, because in that
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case, the factfinder’s choice cannot be clearly erroneous.” Arch Ins. Co. v. Precision Stone, Inc.,
584 F.3d 33, 39 (2d Cir. 2009) (internal quotation marks and citations omitted).
III. Scheringer’s sentence
Finally, Scheringer challenges his forty-year sentence, a downward departure from the
Guideline range of life imprisonment, in three ways. He argues that the district court based its
sentence on its personal view of the charged crime, rather than a reasoned analysis; that the court
gave flawed or incorrect weight to the need to protect the public from further crimes; and that the
court misunderstood its authority to depart downward based on on Scheringer’s alleged
diminished capacity. All three arguments lack merit.
First, the district court’s lengthy discussion at the sentencing of the severity of
Scheringer’s crimes was unremarkable given the huge losses sustained by investors and the
scope and duration of the conspiracy. There is no evidence that the district court, which actually
departed downward from the Guideline range, based its sentence on animosity of the type that
the Third Circuit found impermissible in United States v. Olhovsky, 562 F.3d 530, 550-53 (3d
Cir. 2009) (vacating a below-Guidelines sentence for possession of child pornography), the case
on which Scheringer principally relies.
Second, the district court did not err by considering the need to protect the public in
determining an appropriate sentence. To the contrary, Congress has expressly directed courts to
consider this factor in imposing sentences. See 18 U.S.C. § 3553(a)(2)(C) (a sentencing court
“shall consider . . . the need for the sentence imposed . . . to protect the public from further
crimes of the defendant”). As the district court reasonably found, the fact that Scheringer
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continued to conduct aspects of the scheme while incarcerated supported the conclusion that he
would pose a significant future danger to the public.
Third, this Court may not review the district court’s discretionary decision to depart
downward; we may only vacate “when a sentencing court misapprehended the scope of its
authority to depart or the sentence was otherwise illegal.” United States v. Stinson, 465 F.3d
113, 114 (2d Cir. 2006). Here, Scheringer has not presented “clear evidence of a substantial risk
that the judge misapprehended the scope” of his authority to depart downward based on
diminished mental capacity. Id., quoting United States v. Gonzalez, 281 F.3d 38, 42 (2d Cir.
2002). The court declined to depart not because it misunderstood its authority, but because it
found Scheringer’s argument factually false. Because the court understood he scope of its
authority, its discretionary decision is not reviewable. United States v. Valdez, 426 F.3d 178,
184 (2d Cir. 2005).
CONCLUSION
We have considered all of the appellants’ arguments and find them to be without merit.
Accordingly, the judgment of the district court is AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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