United States v. Williams

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
1-7-2003
USA v. Williams
Precedential or Non-Precedential: Non-Precedential
Docket 02-1649
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos.: 02-1649 & 02-1650
___________________
UNITED STATES OF AMERICA
v.
LARRY WILLIAMS,
Appellant in 02-1649
UNITED STATES OF AMERICA
v.
JOSEPH VIGGIANO,
Appellant in 02-1650
__________________
On Appeal from the United States District Court
For the Middle District of Pennsylvania
(D.C. No. 00-CR-00338)
District Judge: Honorable Yvette Kane
__________________
Argued December 3, 2002
Before: ROTH, SMITH and *CUDAHY, Circuit Judges
________________
______________________
*Hon. Richard D. Cudahy, United States Court of Appeals for the Seventh Circuit, sitting by
designation
Dennis E. Boyle, Esq. (Argued)
Nauman, Smith, Shissler & Hall, LLP
200 N. 3rd Street, 18th Floor
P.O. Box 840
Harrisburg, PA 17108-0840
Counsel for Appellant Larry Williams
Joshua D. Lock, Esq. (Argued)
Goldberg, Katzman & Shipman, P.C.
320 Market Street
P.O. Box 1268
Harrisburg, PA 17108-1268
Counsel for Appellant Joseph Viggiano
Thomas A. Marino, United States Attorney
Gordon A.D. Zubrod, Assistant United States Attorney (Argued)
Federal Building
228 Walnut Street
Harrisburg, PA 17108
Counsel for Appellee
(Filed: January 7, 2003)
OPINION OF THE COURT
D. BROOKS SMITH, Circuit Judge
Appellants in this case each pled guilty to one count of conspiracy to commit mail
and wire fraud, a violation of 18 U.S.C. § 371. Disappointed with the sentences they
received, appellants seek to reverse the District Court’s sentencing order. We have
jurisdiction over an appeal from a final judgment of conviction and sentencing pursuant to
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28 U.S.C. § 1291. The factual findings of a district court are subject to review for clear
error. United States v. Roman, 121 F.3d 136, 140 (3d Cir. 1997). A district court’s
interpretation and application of the Sentencing Guidelines are subject to plenary review.
Id. Because the factors the District Court considered were appropriate and the factual
findings were not clearly erroneous, we will affirm.
I.
Larry Williams founded and incorporated MICOM, Inc., a telemarketing firm which
offered and sold “licensed application preparation services” for paging and mobile radio
Federal Communication Commission (“FCC”) licenses. Mr. Williams later recruited
Joseph Viggiano to run the day-to-day operations of the firm. In November of 1994,
MICOM began to advertise to potential investors that the firm would assist them in
acquiring the FCC licenses, alleging that the licenses would lead to huge profits through
either lease or resale to large telecommunications firms. In fact, the licenses had no resale
value and telecommunications companies do not lease such licenses from individuals.
Nonetheless, approximately 175 investors gave MICOM about $1,650,000 based on these
false representations.
After initially founding MICOM and developing its fraudulent licensing concept, in
1995, Mr. Williams entered into negotiations with Mr. Viggiano to sell his interest in
MICOM. Once a deal was reached, Williams transferred his interest in the on-going
conspiracy to Viggiano for $60,000, an amount that represented “one-half the value of the
business.” Between August 10 and November 17, 1995, Viggiano proceeded to wire
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transfer a total of $62,000 to Williams, who had taken up residence in Brazil.
A few months later, the Federal Trade Commission (“FTC”) closed MICOM
following an investigation by that agency and instituted civil proceedings against Viggiano.
In anticipation of this litigation, Viggiano made efforts to conceal his role in the conspiracy
and was not fully forthcoming with investigators. However, once a later criminal
investigation was begun, Viggiano ultimately admitted to his role in the conspiracy and
provided the government with information that led to the apprehension of his co-defendant
Williams.
In December of 2000, a federal grand jury returned an indictment against both
Williams and Viggiano. After a plea agreement, Williams was sentenced to 40 months
imprisonment and three years of supervised release. He was also ordered to pay
restitution. Although Williams asserted he had withdrawn from the conspiracy prior to
most of the victims suffering any loss, his sentence was based on the total loss resulting
from the fraud perpetrated by MICOM. Viggiano was sentenced to 44 months
imprisonment and three years of supervised release. He, too, was ordered to pay
restitution. For his efforts in assisting in the apprehension of Williams, Viggiano was
granted a downward departure pursuant to U.S.S.G. § 5K1.1; however, the District Court
concluded that his overall conduct did not entitle him to a downward adjustment for
acceptance of responsibility.
II.
Appellant Williams asserts that the District Court erred in sentencing him based on
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the total fraud of $1,650,000 committed by MICOM because Williams voluntarily
withdrew from the conspiracy before most of the damages occurred. As there was not a
“severance of all ties to the business,” it was appropriate for the District Court to find that
Williams had not abandoned the conspiracy. See United States v. Lowell, 649 F.2d 950,
955-56 (3d Cir. 1981). The sentence was therefore based on a reasonable estimate of the
loss Williams caused.
The evidence considered by the District Court indicates that Williams never
“abandoned the enterprise and its goals.” United States v. Steele, 685 F.2d 793, 803-04 (3d
Cir. 1982) (emphasis added). The word “abandon” is commonly defined as to “desert,
surrender, forsake, or cede.” Black’s Law Dictionary 9 (4th ed. 1957). Williams did
nothing of the sort. Rather, he sold his interest in MICOM, an interest that represented
one-half the present value of the conspiracy, for $60,000.1 That alone eviscerates any
assertion of abandonment, and distinguishes this case from cases such as Steele and
Lowell.
The record shows that Williams continued to receive payments from Viggiano and
MICOM as late as November 17, 1995. That was a mere two months before the FTC shut
down MICOM and instituted proceedings in January 1996. Unlike Lowell, there was not a
“severance of all ties to the business,” but a continuing interest by Williams in the success
1
Perhaps if Williams had truly abandoned MICOM, walking away without taking any
compensation for his ownership interest in the criminal conspiracy, this case would present
a more difficult question. However, selling one’s interest is hardly equivalent to
abandoning that interest.
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of MICOM. See Lowell, 649 F.2d at 955-56. While the defendant in Lowell “no longer
derived any income from the transactions,” 649 F.2d at 957, Williams received incremental
payments that depended upon the revenue and profits of MICOM until shortly before the
FTC caused MICOM to cease operations.
After reasonably concluding that Williams had not withdrawn from the conspiracy,
the District Court correctly applied the Guidelines to its findings. Where there is “a clear
causal connection between the fraud and the [victims’] losses,” a district court should
sentence based on the total losses the fraud has caused. See United States v. Neadle, 72
F.3d 1104, 1110 (3d Cir. 1995). “An intervening force that increases a fraud-related loss
will not decrease the loss valuation but will only provide possible grounds for a downward
departure.” Id. Williams founded the company, developed the fraudulent plan and sales
pitch, and recruited the manager for MICOM, a fraudulent conspiracy resulting in
$1,650,000 in loss. He never abandoned the conspiracy, but sold his interest and continued
to receive payments from the profits of the conspiracy almost until its end. Based on this
record, it was not clearly erroneous for the District Court to conclude that a “causal
connection” existed between Williams and the total loss from the MICOM conspiracy.
We will affirm the judgment and sentence of the District Court as to appellant
Williams.
III.
Appellant Viggiano argues that the District Court erred in refusing to grant him a
sentence reduction for his acceptance of responsibility pursuant to U.S.S.G. § 3E1.1(a).
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Appellant bases this assertion on three grounds: (1) that the District Court improperly
considered his pre-indictment conduct in determining whether Viggiano cooperated with
authorities; (2) that the District Court improperly considered Viggiano’s failure to
voluntarily make restitution because he lacked the financial means to do so; and (3) that his
post-indictment conduct was forthcoming and not evasive.
Appellant first argues that the District Court erred as a matter of law in considering
any conduct by Viggiano that preceded the formal criminal indictment on December 13,
2000. Although the case is neither precisely on point nor controlling, appellant primarily
relies upon United States v. Jeter, 191 F.3d 637 (6th Cir. 1999). In Jeter, the Sixth Circuit
determined, as a matter of law, that the District Court erred in considering state law charges
that preceded the defendant’s federal indictment and subsequent federal guilty plea. We
believe that Jeter is inconsistent with the precedent of this Circuit and decline to adopt here
its bright-line rule. See United States v. Ceccarani, 98 F.3d 126, 130 (3d Cir. 1996)
(rejecting the argument that Ҥ 3E1.1(a) of the Guidelines directs that examination of the
defendant’s acceptance of responsibility correlates only to conduct related to the specific
offense before the sentencing court”).
As noted by the District Court, appellant Viggiano was not always forthcoming with
the government concerning his role in the conspiracy at issue. In addition to his conduct
before the FTC, Mr. Viggiano’s evasiveness continued into the early stages of the criminal
investigation. In Mr. Viggiano’s initial meeting with the agents investigating the criminal
charges, he was not forthcoming, and denied any wrongdoing. While Mr. Viggiano
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subsequently made a full admission of his involvement in the conspiracy and assisted the
agents in locating his co-defendant, Larry Williams, we do not believe it was erroneous for
the District Court to have considered his pre-indictment conduct where, as here, the prior
denials were of the same conduct at issue in the criminal offense and the denials continued
into the criminal investigation.
Appellant also asserts that the District Court erred in considering Appellant’s failure
to pay any portion of the $1.6 million in restitution Appellant owed. Appellant contends
that he lacked the financial ability to pay the fine; and that it was therefore an error for the
District Court to hold that failure to pay against him. We do not believe the District Court
was in error.
Counsel for Viggiano admitted at sentencing that his client had paid no restitution
“since January of 1996.” While the record at sentencing indicated that Viggiano then
lacked the means to pay a substantial fine, there was no explanation provided for why he had
made no effort to pay restitution over the prior five years. In fact, Viggiano had sought to
have his civil restitution obligations from the FTC proceeding discharged through
bankruptcy. While a failure to pay restitution might not, by itself, justify a denial of an
acceptance of responsibility reduction when a defendant lacks the financial means to pay,
where such a failure was combined with what could be interpreted as an effort to avoid
responsibility for those frauds and apparent indifference to the victims of the crime, it was
not an error for the District Court to consider that fact in sentencing.
Viggiano’s final argument is that his post-indictment conduct was not, in fact,
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evasive based on United States v. Halper, 490 U.S. 435 (1989). Although Viggiano claims
he had a potentially valid constitutional basis for resisting the criminal prosecution,
specifically that the criminal prosecution subjected him to “double jeopardy” in light of his
prior civil penalty, he asserts that he pled guilty and cooperated. However, our reading of
the Supreme Court’s decision in Hudson v. United States, 522 U.S. 93 (1997), indicates
that Viggiano’s proposed constitutional argument would have had little chance of success.
See id. at 102 (noting that United States v. Halper, 490 U.S. 435 (1989), proved
“unworkable” and refusing to bar a subsequent criminal prosecution after the government
secured an initial civil penalty). Therefore, Viggiano’s alleged “forbearance from
asserting” this argument need not be given significant weight.
A final point worth noting is that the District Court did credit Mr. Viggiano’s role in
the investigation and apprehension of co-defendant Larry Williams through a downward
departure under U.S.S.G. § 5K1.1. Moreover, the District Court did not appear to give
excessive weight to the factors Viggiano claims were inappropriately considered. The
primary impetus for the District Court’s denial of the reduction for acceptance of
responsibility seemed to be a belief that Viggiano failed both to acknowledge the harm
caused to the victims of his crime and to demonstrate remorse for those harms. We
therefore conclude that, despite his assistance in the apprehension of his co-defendant, it
was not clear error for the District Court to reason that Mr. Viggiano had not sufficiently
exhibited an acceptance of responsibility so as to justify an additional sentence reduction
under § 3E1.1(a) of the Guidelines.
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We will therefore affirm the judgment and sentence of the District Court as to
appellant Viggiano.
TO THE CLERK:
Please file the foregoing opinion.
/s/ D. Brooks Smith
Circuit Judge
DATED: January 7, 2003
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