United States v. Ronald Allen

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 11-3175
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UNITED STATES OF AMERICA
v.
RONALD ALLEN,
Appellant
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
(D.C. Crim. Action No. 1-09-cr-00892-001)
District Judge: Honorable Jerome B. Simandle
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Submitted Under Third Circuit LAR 34.1(a)
April 10, 2012
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Before: HARDIMAN, GREENAWAY, JR., and GREENBERG, Circuit Judges.
(Opinion Filed: July 11, 2012)
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OPINION
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GREENAWAY, JR., Circuit Judge.
Ronald Allen (“Allen”) appeals the District Court‟s July 27, 2011 Judgment and
Conviction, sentencing him to a term of seventy months of imprisonment. Allen was
convicted of conspiracy to commit mail and wire fraud. For the following reasons, we
will affirm the District Court‟s Order.
I. BACKGROUND
We write primarily for the benefit of the parties and shall recount only the
essential facts. Allen served as the owner and president of Universal Pacific Insurance
Company (“UPIC”), which was formed on the Fijian island of Rotuma. UPIC had no
employees, no claims processing department, and no licenses to do business in the United
States. The Company also had limited funds and could not pay most claims.
The fraudulent scheme involved selling insurance to unsuspecting businesses with
the inducement that policy costs were 25-30% below market rate.1 Allen‟s co-
conspirator, Gilbert Morgan (“Morgan”)2, would sell and issue the policies, which bore
Allen‟s signature. Morgan kept a percentage of the premiums and would wire the
remainder of the money to RRG Business Development Corporation (“RRG”), one of
Allen‟s other companies. Over the course of the scheme, Morgan forwarded
approximately $366,918.93 to Allen‟s RRG account.
Allen and Morgan devised other ways to sell the fraudulent insurance, and in June
2004, Allen authorized Morgan to “bind” commercial liability insurance policies from
1
Morgan‟s clients were largely bars, nightclubs, and strip clubs, who needed liability
insurance to protect against alcohol related injuries and altercations. (Appellee‟s Br. at
4.)
2
Morgan was a Texas insurance broker, who had previously engaged in fraudulent
insurance sales. He specialized in providing insurance policies to night clubs and strip
clubs.
2
Prime Insurance Syndicate (“Prime”), a legitimate insurer that Allen claimed to be in the
process of purchasing.3 Allen never purchased Prime and Prime never authorized any
broker affiliated with Allen to bind its policies. As a result, Prime issued a cease and
desist letter to Morgan regarding the illegal binding activities. Allen directed Morgan to
ignore the cease and desist letter and continue to bind insurance policies. Although
Morgan initially heeded Allen‟s directive, he later switched the insureds from Prime to
UPIC.
Allen and Morgan also used other brokers to market UPIC policies to their clients.
Those brokers would receive a share of the premiums and then forward the remainder to
Morgan, who took his share and wired the balance to Allen‟s RRG account.
Allen and Morgan worked together through December 2004, when the last UPIC
policy was sold.4 At that point, Allen and Morgan ceased working together because of
mutual distrust.
In December 2007, Allen was interviewed by FBI Special Agent Samuel Mayrose.
During the interview, Allen conceded that he was President of UPIC and acknowledged
that UPIC was not licensed to do business in the United States. Allen stated that he did
3
Certain brokers are granted the ability to “bind” an insurance company. The resulting
“binder” is evidence that insurance coverage is going to be issued, and binds the
company to issuing a policy.
4
Allen‟s role in the conspiracy was reportedly short-lived, although a large number of
businesses purchased UPIC policies and paid tens of thousands of dollars in premiums.
When business insureds attempted to contact UPIC at its Belize, Mexico or California
addresses, their claims were ignored. Those businesses were forced to hire their own
attorneys, forced to pay out-of-pocket claims, or, forced to close their offices.
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not know much about UPIC‟s operations and that Morgan sold UPIC policies for
nightclubs. Allen did admit that he received money from Morgan as insurance
commissions and claimed that he did not personally follow up on policyholder inquiries,
but instead referred them to Morgan.
A federal grand jury returned a one-count Indictment against Allen on December
3, 2009, charging him with conspiracy to commit mail and wire fraud, contrary to 18
U.S.C. § 1341 and § 1343, and in violation of 18 U.S.C. § 1349. Allen filed an omnibus
pre-trial motion, requesting that the Indictment be dismissed because he was not involved
in the conspiracy during the five-year statute of limitations period. The Government
opposed the motion and stated that it would prove at trial that additional UPIC policies
were sold by Allen within the limitations period.
The District Court denied Allen‟s motion seeking to dismiss the Indictment.
Jury trial commenced on December 3, 2010. Allen‟s theory of defense throughout
the trial was that he only agreed with Morgan to sell fake insurance to businesses that
were aware of the illegitimacy of the policies that they were purchasing. The jury
rejected this theory and returned a guilty verdict against Allen. He was sentenced to 70
months of imprisonment, the bottom of the sentencing Guidelines range, and ordered to
pay restitution in the amount of $692,736.28. Allen then filed this appeal.
II. JURISDICTION AND STANDARD OF REVIEW
The District Court had jurisdiction, pursuant to 18 U.S.C. § 3231. We have
jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a).
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An appellate court reviews de novo a district court‟s interpretation and application
of the statute of limitations. United States v. Harriston, III, 329 F.3d 779 (11th Cir.
2003). In most cases, we review a district court‟s refusal to give a requested jury
instruction under an abuse of discretion standard. United States v. Gross, 961 F.2d 1097,
1101 (3d Cir. 1992), cert. denied, 506 U.S. 965 (1992). However, a district court‟s
refusal to give a jury instruction on a defendant‟s theory of his defense is reviewed de
novo where the defendant objects to the district court‟s refusal. United States v. Stewart,
185 F.3d 112, 124 (3d Cir. 1999).
If a defendant does not object to the jury instruction at trial, we review the District
Court‟s instructions to the jury for plain error. United States v. Antico, 275 F.3d 245,
265 (3d Cir. 2001); see also United States v. Lee, 612 F.3d 170, 191 (3d Cir. 2010)
(unraised challenges to the jury instructions are reviewed for plain error). “We review a
district court‟s determination that the trial evidence justified the instruction for abuse of
discretion, and view the evidence and the inferences drawn therefrom in the light most
favorable to the [G]overnment.” United States v. Stadtmauer, 620 F.3d 238, 252 (3d Cir.
2010) (internal citations omitted).
Review of a verdict for sufficiency of the evidence is plenary. United States v.
Mussare, 405 F.3d 161, 166 (3d Cir. 2005). We reverse a jury verdict for insufficiency of
the evidence “only when the record contains no evidence, regardless of how it is
weighted, from which the jury could find guilt beyond a reasonable doubt.” Id.5
III. ANALYSIS
Allen raises six arguments related to his conviction, - - 1) that the charges against
him were barred by the Statute of Limitations (“SOL”); 2) that there was insufficient
evidence of his membership in the conspiracy during the SOL period, which requires a
reversal of his guilty verdict; 3) that the District Court committed plain error by not
instructing the jury sua sponte regarding unanimity as to an underlying factual issue; 4)
that the District Court committed structural error when it gave a jury instruction
regarding multiple conspiracies and containing his theory of defense; 5) that the District
Court abused its discretion by instructing the jury on willful blindness, and that the
evidence did not support the instruction; and 6) that he is entitled to a new trial based on
ineffective assistance of counsel. These issues will be addressed seriatim below.
Statute of Limitations
Allen contends that the charges against him were barred by the SOL and the
District Court erred by not dismissing the indictment on this basis. The December 3,
2009 indictment alleges that Allen‟s conspiracy began in March 2004 and ended “in or
about December 2004”. (Supp. App., Vol. I, 100.) The SOL for conspiracy to commit
mail or wire fraud is five years, pursuant to 18 U.S.C. § 1349. Allen argues that this case
is untimely because “the conspiracy was concluded and perfected . . . on November 24,
2004, when the last policy was bought and sold by UPIC, [] the moneys [] disbursed by
coconspirators was not in furtherance of the conspiracy, but the conspiracy in fact was
completed in total upon the last sale of the UPIC policy, which was prior to December
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3rd, about ten days earlier.” (Id. at 98.) Although Allen received a wire transfer from
Morgan on December 7, 2004, he contends that “the conspiracy was not about
disbursement of moneys between the coconspirators but was about selling those policies
to the victims of these policies and that the last act in this Indictment is named as
November 24, 2004.” (Id. at 100.)
The Government argues that the conspiracy was about collecting money, and
claims that Allen‟s participation in the conspiracy extended beyond December 3, 2004.
In addition, the Government stated that it would prove at trial that additional UPIC
policies were sold within the limitations period. In addition, Morgan testified at trial that
five businesses had insurance coverage that became effective after December 3, 2004.
We have held that:
1) resignation from the enterprise does not, in and of itself, constitute
withdrawal from a conspiracy as a matter of law; (2) total severing of ties
with the enterprise may constitute withdrawal from the conspiracy;
however (3) even if the defendant completely severs his or her ties with the
enterprise, the defendant still may remain a part of the conspiracy if he or
she continues to do acts in furtherance of the conspiracy and continues to
receive benefits from the conspiracy‟s operations.
United States v. Antar, 53 F.3d 568, 583 (3d Cir. 1995).
Here, there was sufficient evidence of activity that falls within the SOL and
activity in furtherance of the conspiracy after December 3, 2004 that Allen‟s argument
must fail. The District Court committed no error on this point.
On December 3, 2010, the District Court denied Allen‟s omnibus motion and the
jury trial began.
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Evidence of Allen’s Participation in the Conspiracy during the SOL Period
The Government satisfies the requirements of the statute of limitations for a non-
overt act conspiracy if it alleges and proves that the conspiracy continued into the
limitations period. Harriston, 329 F.3d at 783. The Government only has to show, either
directly or circumstantially, that a conspiracy existed; that the defendant knew of the
conspiracy; and that with knowledge, the defendant became a part of the conspiracy. Id.A conspiracy is deemed to have continued as long as the purposes of the conspiracy have
neither been abandoned nor accomplished and the defendant has not made an affirmative
showing that the conspiracy has terminated. Id. A defendant can overcome this
presumption of continued participation only by showing that he affirmatively withdrew
from the conspiracy or that the final act in furtherance of the conspiracy has occurred. Id.During trial, Allen requested that the District Court instruct the jury regarding the
duration of the conspiracy and his theory that he had withdrawn from the conspiracy
before the SOL had run. In its instructions, the District Court discussed both the
conspiracy and Allen‟s theory of withdrawal from the conspiracy, as Allen had requested.
Allen did not object to the jury instruction before the jury retired for deliberations, but
later claimed that the District Court should have sua sponte given the jury an instruction
that “the dividing up of the money gained in a conspiracy, after the conspiracy is over,
does not extend the ending date of the conspiracy.” (Appellant Br. at 11.) While Allen
concedes that the District Court properly instructed the jury on the statute of limitations
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for the conspiracy, he now argues that the District Court committed error by not sua
sponte giving the above jury instruction.
When a defendant does not raise objections to the jury instructions before the jury
begins deliberations, he bears the burden of proving plain error. See Lee, 612 F.3d at
191. In order to prove plain error, a defendant must show: “(1) there is an error; (2) the
error is clear or obvious, rather than subject to reasonable dispute; (3) the error affected
the appellant‟s substantial rights, which in the ordinary case means it affected the
outcome of the district court proceedings; and (4) the error seriously affect[s] the fairness,
integrity or public reputation of judicial proceedings.” United States v. Marcus, 130 S.
Ct. 2159, 2164 (2010). (Internal citations and quotations omitted.) However, Fed. R.
Crim. Pro. 52(B) authorizes no remedy unless the error affects substantial rights. If the
error is found to be plain and to affect substantial rights, the court of appeals “has
authority to order correction, but is not required to do so.” United States v. Olano, 507
U.S. 725, 735 (1993).
Allen has not satisfied the requisites of plain error. The facts necessary to argue
that the District Court erred when it issued jury instructions related to the conspiracy are
not present here. The District Court instructed the jury that the Government bore the
burden of proving that Allen committed the crime charged within the five-year SOL
period, and that in order to find Allen guilty, the jury would have to also find that the
conspiracy extended beyond December 3, 2004. The District Court also pointed out that
in order for the jury to find that Allen withdrew from the conspiracy, they must find that
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he “must have taken some clear, definite, and affirmative action to terminate his
participation, to abandon the illegal objective, and to disassociate himself from the
agreement.” (Supp. App., Vol. II, 758-59.)
Although Allen claims that he withdrew from the conspiracy before December 3,
2004, five years before the government obtained the Indictment charged in the
conspiracy, we find that Allen did not affirmatively withdraw from the conspiracy prior
to the SOL. There was testimony from one of the FBI Special Agents that RRG received
wire transfers for funds from March 23, 2004 to December 7, 2004. “[I]n order to
establish a prima facie case, he [the defendant] must demonstrate either that he gave
notice to his co-conspirators that he disavows the purpose of the conspiracy or that he did
acts inconsistent with the object of the conspiracy.” Antar, 53 F.3d at 583.
Allen did not demonstrate that he had given notice to Morgan or any other co-
conspirators that he would no longer be involved in the conspiracy. By accepting money
from the proceeds of the conspiracy, Allen acted consistently with the intent of the
conspiracy. The Indictment charges Allen with, among other crimes, “collecting
premiums as payment for such false and fraudulent policies, and using such premium
payments for their own personal use.” (Emphasis added.) The proofs at trial support this
statement in the indictment. We find that Allen was still a participant in the conspiracy
during the SOL period.
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Unanimity Jury Instruction
Allen argues that the District Court committed plain error by not sua sponte
instructing the jury regarding unanimity as to an underlying factual issue. Allen wanted
the District Court to direct the jury that it needed to unanimously agree as to whether he
and Morgan agreed to use UPIC or Prime to defraud insureds. Allen argues that both the
Indictment and the Government‟s proof presented at trial describe two separate
conspiracies, UPIC and Prime, and contends that the jury needed to unanimously agree
on which conspiracy had been proven. We disagree.
The Indictment describes only one conspiracy between Allen and Morgan. The
conspiracy is described as “a scheme and artifice to defraud Insureds, and to obtain
money and property, by means of false and fraudulent pretenses, representations and
promises,” and lists the methodologies of the crime, including the agreement to sell and
the sale of “false and fraudulent UPIC and Prime policies.” (Supp. App., Vol. 1, 2-4.) In
addition, the District Court instructed the jury as to the necessity for a unanimous verdict,
stating that “you must all find” that the government proved that Allen engaged in a
conspiracy with Morgan. (Supp. App., Vol. 1, 196.) This instruction complies with the
law of this Circuit.
While it is true that a defendant in a federal criminal trial has a constitutional right
to a unanimous verdict, United States v. Yeaman, 194 F.3d 442, 453 (3d Cir. 1999), it
does not mean that a defendant has a right to insist on an instruction requiring unanimous
agreement on the means by which each element is satisfied. See id. The District Court
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did not err. There is no requirement that the Court, sua sponte, render a jury instruction
regarding unanimity as to the means by which he engaged in the conspiracy.
Structural Error
Allen next argues that the District Court committed structural error when it gave a
jury instruction regarding multiple conspiracies and containing his theory of defense,
“mistakenly reliev[ing] the jury of the duty of finding an essential element of the
offense.” Appellant‟s Br. 12-17.
The Supreme Court of the United States has concluded “that various forms of
instructional error are not structural but instead trial errors subject to harmless-error
review.” Hedgpeth v. Pulido, 555 U.S. 57, 60-61 (2008) (internal citations omitted).
Further, “Neder [v. United States, 527 U.S. 1 (1999)], makes [it] clear that harmless-error
analysis applies to instructional errors so long as the error at issue does not categorically
„vitiat[e] all the jury‟s findings.‟” (Internal quotations and citations omitted). “An
instructional error arising in the context of multiple theories of guilt no more vitiates all
the jury‟s findings than does omission or misstatement of an element of the offense when
only one theory is submitted.” Hedgpeth, 555 U.S. at 61.
Allen requested the jury instruction on multiple conspiracies. We have held that
we will not entertain a defendant‟s challenge to jury instructions that were requested by
the defendant. See United States v. Ozcelik, 527 F.3d 88, 97 n.6 (3d Cir. 2008). Under
the „invited error doctrine,‟ because Allen requested the jury instruction, he waived his
right to raise this issue on appeal. Id. (“Because Ozcelik made a joint request in favor of
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the very instructions he now challenges, he waived his right to raise these instructional
issues on appeal under the invited error doctrine.”) There is no error here.
Willful Blindness Jury Instruction
Allen argues that the District Court abused its discretion by instructing the jury on
willful blindness, because the evidence did not support the instruction.
A willful blindness instruction is often described as sounding in deliberate
ignorance. Such instructions must be tailored . . . to avoid the implication
that a defendant may be convicted simply because he or she should have
known of facts of which he or she was unaware. Willful blindness is not to
be equated with negligence or a lack of due care, for willful blindness is a
subjective state of mind that is deemed to satisfy a scienter requirement of
knowledge. The instruction must make clear that the defendant himself
was subjectively aware of the high probability of the fact in question, and
not merely that a reasonable man would have been aware of the probability.
United States v. Wert-Ruiz, 228 F.3d 250, 255 (3d Cir. 2000) (internal citations and
quotations omitted).
Allen insists that there was no evidence presented at trial indicating that he denied
knowing that the object of the conspiracy was to sell UPIC and Prime insurance to
business owners to defraud them. However, at Allen‟s trial, the District Court placed an
oral opinion on the record, addressing the willful blindness charge. The District Court
stated that Allen “has taken the position that while there may be proof that he and
Morgan conspired to issue false insurance certificates requested by the insureds and, thus,
defrauding landlords or regulatory bodies that required these businesses to be covered by
insurance, that he did not become aware that Morgan, Petrillo, and others were
13
defrauding the insureds. This defense, thus, denies knowledge of the object of the
charged conspiracy.” Supp. App. Vol. II, 715-16. We agree.
We also agree with the District Court‟s conclusion that “there is ample evidence
that defendant Allen took deliberate steps to not confirm the facts of defrauding the
insureds that were otherwise obvious to him.” Id. at 716. Therefore, we find that the
District Court did not abuse its discretion in instructing the jury on willful blindness.
Ineffective Assistance of Counsel
Finally, Allen argues that he is entitled to a new trial based on ineffective
assistance of counsel. “Under Strickland v. Washington, 466 U.S. 668 (1984), to
establish ineffective assistance of counsel a criminal defendant must show that counsel‟s
conduct was deficient (i.e. „outside the wide range of professionally competent
assistance‟)”, id. at 690, and that the deficiency resulted in prejudice to the defense (i.e.,
“there is a reasonable probability that, but for counsel‟s unprofessional errors, the result
of the proceeding would have been different”). Id. at 694.
This Court has repeatedly held that “the proper avenue for pursuing such claims is
through a collateral proceeding in which the factual basis for the claim may be
developed.” United States v. Olfano, 503 F.3d 240, 246 (3d Cir. 2007); United States v.
Theodoropoulos, 866 F.2d 587, 598 (3d Cir. 1989). “There is, however, a narrow
exception to the rule that defendants cannot attack the efficacy of their counsel on direct
appeal. Where the record is sufficient to allow determination of ineffective assistance of
counsel, an evidentiary hearing to develop the facts is not needed.” United States v.
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Headley, 923 F.2d 1079, 1083 (3d Cir. 1991); see also Government of Virgin Islands v.
Zepp, 748 F.2d 125, 133 (3d Cir. 1984) (defendant‟s counsel was ineffective because of a
conflict of interest); Theodoropoulos, 866 F.2d at 598 (no direct review “unless the
record sufficiently establishes a basis for our review”). A sufficient record would
include Allen‟s disagreement with his trial counsel regarding his court strategy and
factual evidence on the prejudice Allen suffered as a result of his trial counsel‟s actions.
See e.g., Olfano, 503 F.3d at 246-47 (“without a record . . . the court could not determine
whether counsel failed to effectively represent his client. Nor is it clear that Olfano was
prejudiced by counsel‟s performance.)
Here, Allen‟s counsel represented him throughout trial and sentencing. The record
is not sufficient to allow us to determine whether there was ineffective assistance of
counsel. Therefore, we conclude that Allen‟s argument regarding ineffective assistance
of counsel should be addressed by the District Court if and when Allen seeks collateral
review.
IV. CONCLUSION
For the above reasons, we affirm the July 27, 2011 Judgment and Conviction of
the District Court.
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