United States v. Balagia

Case: 21-40366 Document: 00516636585 Page: 1 Date Filed: 02/06/2023
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
February 6, 2023
No. 21-40366
Lyle W. Cayce
Clerk
United States of America,
Plaintiff—Appellee,
versus
James Morris Balagia,
Defendant—Appellant.
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 4:16-CR-176
Before Elrod, Haynes, and Willett, Circuit Judges.
Per Curiam:*
A jury found James Morris Balagia guilty of five crimes related to his
legal representation of various drug traffickers. Through appointed counsel
on appeal, Balagia challenged: (1) the sufficiency of the evidence for four
convictions; (2) the propriety of a jury instruction on willful ignorance; and
(3) the length of his sentence. Balagia then moved to terminate his counsel,
and his counsel withdrew. Proceeding pro se, he raised thirteen issues on
*
This opinion is not designated for publication. See 5th Cir. R. 47.5.
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appeal. For the reasons set forth below, we AFFIRM Balagia’s convictions
and accompanying sentences. 1
I
Balagia worked as a police officer for ten years before obtaining his law
degree and opening a criminal defense practice. Balagia promoted himself as
the “DWI Dude” and mostly represented clients charged with drunk driving
or marijuana possession. However, he also handled some federal cases
involving drugs, money laundering, or both. The facts relevant for this
appeal arise out of Balagia’s involvement in two separate matters: (A) the
McKeown case and (B) the Colombian drug-trafficking cases.
A
Jill McKeown was arrested for traveling interstate to buy large
quantities of marijuana. The Drug Enforcement Agency seized $50,000 in
cash that she planned on using for the transaction. McKeown then retained
Balagia as her criminal defense attorney. Balagia told McKeown that “he
knew judges,” “he knew prosecutors,” and “it wasn’t a problem” to get her
charges dismissed. McKeown was surprised to hear a lawyer make such a
claim.
Balagia’s insinuations about his supposed ability to get McKeown’s
charges dropped ended up being unneeded, as she was placed on a pretrial
diversion program. But she also wanted to seek return of the $50,000 in
seized funds. Balagia helped her prepare an affidavit wherein she stated that
1
The factual summaries below are written with all reasonable inferences fairly
raised by the evidence drawn in the light most favorable to the verdict. United States v.
Frye, 489 F.3d 201, 207 (5th Cir. 2007). For this reason, phrases such as “Person testified
that [assertion]” or “the evidence suggests that [assertion]” are omitted from the factual
recitation.
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she was merely an “innocent owner” of the money and that her possession
of it was “not in violation of the law.” Balagia would later admit to the State
Bar of Texas that he had reason to know these sworn statements were false.
Based on the statements in McKeown’s affidavit, the DEA told
Balagia it would return the funds. But instead of providing the DEA with
McKeown’s banking information, he supplied his own law office’s account
numbers. He claimed this was to recoup unpaid legal fees. That was a lie.
McKeown had already paid all fees owed. And rather than sharing the news
of the DEA’s agreement with McKeown, Balagia sent her a letter through
an intermediary asking, “[I]f we could at least get you back 9,000 or $10,000,
would you be happy with that?” Not knowing she was being swindled,
McKeown agreed. Balagia then received the $50,000 by wire and
subsequently transferred $9,500 to McKeown’s intermediary. 2
B
Balagia’s indictment also stems from activity he engaged in related to
representing certain Colombian drug traffickers in a drug-importation case.
In sum, Balagia accepted drug money from cocaine producers and
distributors on the pretense that he and his team would bribe American law-
enforcement and/or judicial officials to get their criminal charges dismissed. 3
The three primary traffickers involved are Ordonez, Segundo, and
Aldemar. 4 Segundo and Aldemar are brothers who controlled a Colombian
2
He later returned another $7,000 or $7,500, but only “after the State Bar
intervened.” .
3
The complete details are lengthy and complex, spanning over twenty pages of the
United States’ principal brief. The factual recitation here has been edited for clarity and
brevity.
4
The traffickers’ full names are Hermes Alirio Casanova Ordonez, also known as
“Megatron”; Segundo Villota-Segura; and Aldemar Villota-Segura.
3
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cocaine lab that could produce 2,000 kilograms of cocaine each week (2,000
kilograms could be worth up to tens of millions of dollars). Before the
prosecution began, Segundo and Aldemar’s cocaine lab was, by some
estimates, the largest in the world. Ordonez also produced cocaine in
Colombia. All three traffickers were high-priority targets of United States
law enforcement.
Those three men were among a group of other individuals who were
indicted by a grand jury in Texas for offenses related to their importing of
cocaine into the United States. Following that indictment, the Treasury
Department’s Office of Foreign Assets Control designated Ordonez,
Segundo, and Aldemar as significant foreign narcotics traffickers under the
Foreign Narcotics Kingpin Designation Act, 21 U.S.C. § 1901 et seq. For an
attorney in the United States to accept payments from an OFAC-designated
person, the lawyer must get a case-specific license. 5 See 21 U.S.C. § 1904(c)
(“Prohibited transactions”).
1
The relevant facts begin with Balagia’s representation of Ordonez and
Segundo. A Colombian attorney introduced Ordonez and Segundo to
Balagia. In agreeing to represent Ordonez and Segundo, Balagia promised to
bribe federal officials to drop the charges. Balagia charged Ordonez
$700,000 for this, and he charged Segundo $900,000. Balagia and the
Colombian attorney agreed to split the fees between themselves and several
others that were assisting.
5
However, such a license is not difficult to procure. A lawyer can apply through
OFAC’s website, and OFAC almost always grants the request.
4
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Using structured deposits of amounts all below $10,000 (and spread
across various states), Balagia began depositing funds received from Ordonez
and Segundo. By the time he had deposited at least $172,000, Balagia was
explicitly informed by an Assistant United States Attorney that Ordonez and
Segundo had been identified by OFAC and that Balagia would need a license
to accept payments from them. Balagia ignored this information and
continued his representation without a license. Sometime after that warning,
Balagia and his assistants picked up cash in parking lots in Houston from
carriers that were moving the money in paper bags. The paper-bag cash
deliveries led to Balagia making bank-account deposits in the amounts of
$78,000; $84,000; and $42,300.
At this point, Ordonez was arrested in Colombia by Colombian law
enforcement. Balagia met with him and assured Ordonez not to worry
because Balagia could still get the U.S. charges dropped. Instead, Balagia
tricked Ordonez—a Spanish-language speaker—into signing a plea
agreement written in English. Balagia then met with the same AUSA who
provided him with the OFAC warning and presented the AUSA with the
agreement. This struck the AUSA as “really odd” because Ordonez had not
been extradited, which is when plea discussions usually begin.
At the same meeting, Balagia told the AUSA that Segundo wanted to
cooperate too. The AUSA noted that timely cooperation would be helpful.
However, Balagia’s promised cooperation never materialized, as Balagia
always canceled the scheduled meetings shortly before they were to occur.
After months of failing to cooperate, Segundo was also arrested in
Colombia. Balagia and his assistants went to Colombia to meet with him.
Segundo expressed concerns that Balagia’s promises to bribe federal officials
were not showing any results. One of Balagia’s associates said that thanks to
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the money Segundo had provided, he “was able to pay four people . . . in
Washington, D.C.” This was a lie. No bribery payments had been made.
However, Balagia continued his charade of carrying through his
bribery promises. At the meeting, Balagia explained how the payments were
allegedly going on. Balagia’s non-lawyer associate was the “meat in the
sandwich” between Balagia and Segundo. Balagia told Segundo that using a
non-lawyer associate as an intermediary would allow him to “stay very, very
clean” as the payments were occurring. Balagia said, “it gives me the ability
to close my ears sometimes, if I need to, and it protects all of us.” Balagia
then left the room so that his non-lawyer associate could talk with Segundo
and Balagia could “pretend to be deaf with some things,” like bribery
proposals.
At that same meeting, Balagia or his associates told Segundo that he
should provide 30 or so names to the DEA. However, the names were not
to be real leads on identifying who was leading the cocaine operations in
Colombia. They were to be people “already under investigation” or
“picking out names just to pick them” so that Segundo could give the
appearance of cooperating while gumming up the DEA’s investigation.
Ordonez was then extradited to the United States. Balagia hounded
Ordonez for payment, saying that “the prosecutor has to see a fat wallet. If
not, I can’t work it.” Ordonez seemed to realize that Balagia was not going
to be able to get the charges removed, so he pleaded guilty. Balagia continued
to say that he needed more money to help Ordonez get a lighter sentence. He
told Ordonez, “We have a saying up here. Money talks. You know the rest
of it?” Balagia also said that he could not obtain results for Ordonez until he
was paid in full.
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2
The second part of the relevant facts relates to Balagia’s attempt to
represent Aldemar, Segundo’s brother. Following all the above events with
Ordonez and Segundo, Aldemar made his initial appearance in the
importation case. At that point, Balagia sought to recruit him as a client.
Aldemar knew who Balagia was because Segundo had relayed the way that
representation was going. Aldemar was not pleased with Balagia’s treatment
of his brother. Aldemar told the government that he would pretend to be
interested in Balagia’s services so he could record conversations with Balagia
and his team.
Aldemar and an undercover agent (posing as an accountant for the
cocaine operation) then met with Balagia and two of Balagia’s associates.
Aldemar recorded the conversations that occurred therein. The undercover
agent asked Balagia if it was okay that all money Aldemar would use to pay
him would be drug money. Balagia replied, “I have paperwork I have to fill
out. That’s on me.” The undercover agent also stated that Balagia was “able
to pay some people in Washington” on behalf of Segundo, which Balagia did
not deny. And one of Balagia’s associates said that he “might have been
generous with some things, but — maybe an extra scoop of ice cream on a
sundae.” 6
Following that meeting, the undercover agent followed Balagia and his
associates outside and said, “[Y]ou understand what [Aldemar] was looking
for, right? . . . [H]is understanding was basically like this money was given to
the right people to get him off the charge. And that’s what he was looking
for.” Balagia replied by saying it was nice to meet Aldemar and his
accountant. Balagia then left, but one of Balagia’s associates stayed to
6
Filler words have been removed from this quotation.
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continue talking to the undercover officer. In that further discussion,
Balagia’s associate told the undercover officer, “I don’t have a problem with
one word that you said.”
Balagia agreed to represent Aldemar for $1.2 million. The undercover
agent who had been in the initial meeting agreed to meet one of Balagia’s
associates and make a $300,000 down payment. The undercover agent gave
Balagia’s associate a bag with $300,000 in cash. The associate took the bag,
walked away, and was arrested. In his possession was a signed affidavit from
Balagia wherein Balagia averred that Aldemar had hired him and that
Balagia’s firm employed the associate who had just been arrested for taking
payment from the undercover agent.
II
Based on the actions described above, a jury convicted Balagia of five
crimes: Money-laundering conspiracy, 18 U.S.C. § 1956(h) (Count One);
obstruction of justice, 18 U.S.C. § 1503 (Count Two); willful violation of the
Kingpin Act, 21 U.S.C. §§ 1904(c) and 1906(a) (Count Three); wire-fraud
conspiracy, 18 U.S.C. § 1349 (Count Four); and conspiracy to obstruct
justice, 18 U.S.C. § 371 (Count Five). The district court sentenced Balagia
to 188 months in prison, a special assessment of $500, and supervised release
for a term of 3 years.
In Balagia’s first two briefs on appeal, which were submitted by
appointed counsel, Balagia raised the following issues:
1. Whether the evidence was sufficient to sustain his
convictions for Counts 2, 3, 4, and 5.
2. Whether the district court reversibly erred in giving a
willful blindness instruction.
3. Whether the district court imposed an unreasonable
sentence.
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We then granted Balagia’s motion to proceed pro se. He filed a second
supplemental brief that raised 13 claims for relief, 11 of which bore no relation
to the claims presented by his attorneys. Those issues, consolidated where
possible, are as follows:
1. Whether the district court violated Balagia’s qualified right
to counsel of choice. (Issues 1 and 2).
2. Whether the district court abused its discretion in denying
trial counsel’s motions to continue. (Issues 3 and 5).
3. Whether the district court abused its discretion in declining
to strike Agent Rennie’s testimony after he said that he was
not an expert. (Issue 4).
4. Whether the district court limited the impeachment of
Anthony Felsing and, if so, whether it plainly erred. (Issue
6).
5. Whether the district court abused its discretion in its
handling of alleged “jury misconduct.” (Issues 7 and 8).
6. Whether the district court correctly calculated Balagia’s
advisory Guidelines range. (Issues 11 and 12).
7. Whether Balagia’s prison term, which was nearly four years
below the advisory range, was unreasonably severe. (Issue
13).
8. Whether Balagia shows any error in the forfeiture of his
house and office. (Issues 9 and 10).
A
We first address the issues raised by Balagia through counsel.
1
Balagia argues that the record lacks sufficient evidence to sustain his
convictions for obstructing justice, willfully violating the Kingpin Act, wire-
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fraud conspiracy, and conspiracy to obstruct justice (Counts 2, 3, 4, and 5).
Because Balagia fails to meet the high bar of showing that no rational jury
could have found guilt beyond a reasonable doubt, we affirm. United States
v. Beacham, 774 F.3d 267, 272 (5th Cir. 2014).
a
The convictions for obstructing justice and conspiring to obstruct
justice are supported by similar evidence. On the substantive Count, the
government was required to prove: “(1) that a judicial proceeding was
pending; (2) that [Balagia] had knowledge of the judicial proceeding; and (3)
that [Balagia] acted corruptly with the specific intent to influence, obstruct,
or impede that judicial proceeding in its due administration of justice.”
United States v . Richardson, 676 F.3d 491, 502 (5th Cir. 2012); 18 U.S.C.
§ 1503(a). The associated conspiracy claim requires a showing that Balagia
joined an agreement between two or more people to pursue that unlawful
objective and that Balagia possessed “the same degree of criminal intent as is
necessary for proof of the underlying substantive offense.” United States v.
Fisch, 851 F.3d 402, 407 (5th Cir. 2017) (quoting United States v. Peterson, 244
F.3d 385, 389 (5th Cir. 2001)).
The evidence recounted above shows that a reasonable jury could
have found all those elements to have been proved beyond a reasonable
doubt. Balagia knew that the United States had indicted 17 defendants,
including Ordonez, Segundo, and Aldemar. Balagia’s promises to his clients
to bribe federal officials ensured that those clients would not cooperate with
the governmental investigation (as they previously had done) because, as the
jury could infer, the clients would believe they were immune from normal
prosecution and had no reason to cooperate. Not only did Balagia act
corruptly by promising to bribe federal officials and defrauding his clients, he
also devised a plan to affirmatively mislead the government by having
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Segundo provide red-herring names to the DEA. All along the way, Balagia
made agreements with his clients, his associates, and the Colombian attorney
to further these unlawful objectives.
b
A reasonable jury could have delivered a guilty verdict for conspiracy
to commit wire fraud. To prove that offense, the government had to show
that “(1) two or more persons made an agreement to commit wire fraud; (2)
the defendant knew the unlawful purpose of the agreement; and (3) the
defendant joined in the agreement willfully, i.e., with specific intent.” United
States v. Kuhrt, 788 F.3d 403, 414 (5th Cir. 2015). Here, Balagia conspired
with at least one or more of his associates and the Colombian attorney to
defraud all four of McKeown, Ordonez, Segundo, and Aldemar.
Balagia’s handling of the partial return of McKeown’s seized funds is,
itself, enough to sustain a conviction on this Count. In that matter, Balagia
and his associate received all $50,000 of McKeown’s funds from the DEA
but misrepresented that information to McKeown and her representatives so
that Balagia could fraudulently retain most of that money.
Balagia’s involvement in the Colombian drug trafficking case also gave
rise to enough evidence to sustain his wire fraud conviction. The basis of that
representation, for all three Colombian drug traffickers, was that Balagia
would work with others to bribe federal officials and get the charges dropped.
The lawyers and their teams would transmit messages over phone and
receive money payments to be electronically deposited or transferred into
their bank accounts. This is supported by audio recording, multiple
witnesses’ testimony, and Balagia’s own admission that he was present for
discussions with the defendants about paying people off (though Balagia
claimed to have been “shocked” to hear that brought up during those
meetings). Because the evidence shows that Balagia did not actually bribe
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officials (which would have given rise to other forms of criminal liability), the
evidence supports a conviction for conspiracy to defraud his clients on the
basis of the false promise to engage in such bribery.
c
Evidence also supports Balagia’s conviction for violating the Kingpin
Act. That law prevents any United States person, including attorneys, from
dealing with individuals identified by OFAC without obtaining the proper
license. 21 U.S.C. § 1906(a)(1). The Act provides criminal penalties for
failing to comply with that requirement. At no time did Balagia obtain or even
seek a license to represent his OFAC-designated clients. The only question
is whether this failure was willful. The jury had good reason to find it was.
The district court instructed the jury that for this purpose, to
“willfully” violate the act means “voluntarily and purposely, with the
specific intent to do something the law forbids; that is to say, with bad
purpose either to disobey or disregard the law.” The evidence reveals that
Balagia either knew that his clients were designated by OFAC or Balagia
willfully avoided knowing that. First, Balagia was an experienced criminal
defense attorney. Second, he received multiple notices from an AUSA that
his clients were designated by OFAC and required additional paperwork to
be represented. Third, even a cursory Google search of Balagia’s clients’
names reveals near the top of the search results that they have been
designated as drug traffickers by OFAC. As the government argues, that is
“willfulness on stilts.”
2
Balagia also contends that the district court erred in instructing the
jury on “deliberate ignorance.” We review the district court’s decision to
do so for abuse of discretion. Fisch, 851 F.3d at 411. While it is true that the
circumstances properly giving rise to such an instruction are “rare,” United
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States v. Lara-Velasquez, 919 F.2d 946, 951 (5th Cir. 1990), this is one such
case where it was appropriate.
A district court may provide a deliberate-ignorance instruction when
the evidence at trial raises two inferences: “(1) the defendant was
subjectively aware of a high probability of the existence of the illegal conduct;
and (2) the defendant purposely contrived to avoid learning of the illegal
conduct.” Id. (quoting United States v. Alvarado, 838 F.2d 311, 314 (9th Cir.
1987)). Both inferences are raised here.
First, Balagia was subjectively aware of a high probability of illegal
conduct. As he admitted at trial, he heard his associate telling Segundo that
he had paid off four officials in Washington, D.C. And even though the bribes
did not actually happen, Balagia’s hearing that comment would have put him
on alert that it was highly likely something unlawful was occurring. See
United States v. Araiza-Jacobo, 917 F.3d 360, 366 (5th Cir. 2019) (noting that
subjective awareness “often overlaps with” actual knowledge).
Second, Balagia took steps to avoid gaining knowledge of what was
really occurring in his representation of the Colombian drug traffickers.
Balagia’s associate told Segundo, in Balagia’s presence, that the team’s
tactics would be “messy,” that Balagia had to stay “clean.” Balagia’s
associate said he would be the “meat in the sandwich” between Segundo and
Balagia. As Balagia himself then told Segundo, running the representation
this way would “give[] me the ability to close my ears sometimes.” The
government correctly argues that “[c]onsciously closing one’s ears is the
definition of deliberate ignorance.”
Because the evidence gives rise to both necessary inferences, the
district court was within its discretion to instruct the jury on deliberate
ignorance.
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3
Balagia’s final argument raised through counsel is that the district
court “sentenced Balagia based upon an improperly calculated advisory
Guidelines range that should have been multiple offense levels lower.”
Because the district court did not commit clear error, we affirm.
Using the 2018 Sentencing Guidelines, the probation office prepared
a presentence report that calculated an offense level of 38, a criminal history
category of I, and an imprisonment range of 235 to 293 months. The PSR
also recommended a four-level leadership enhancement under U.S.S.G. §
3B1.1(a) and a two-level abuse-of-trust enhancement under U.S.S.G. § 3B1.3.
The district court adopted the PSR’s calculations but varied downward from
the applicable range because of Balagia’s age, lack of criminal history, good
works, and family ties. The district court also wanted to avoid disparity
between Balagia’s sentence and the sentence of one of Balagia’s associates,
who did not receive a leadership enhancement but possibly should have.
Without the four-level leadership enhancement, the Guidelines range was
151 to 188 months. The court imposed a term of 188 months.
Balagia makes three challenges to the district court’s calculations. He
disputes the sum of laundered funds, argues against the leadership
enhancement, and rejects the abuse-of-trust enhancement. We review each
of the district court’s findings for clear error. United States v. Tansley, 986
F.2d 880, 884 (5th Cir. 1993) (value of laundered funds); United States v.
Alaniz, 726 F.3d 586, 622 (5th Cir. 2013) (leadership); United States v. Miller,
607 F.3d 144, 147–48 (5th Cir. 2010) (abuse of trust). “A factual finding is
not clearly erroneous if it is plausible in light of the record as a whole.”
Alaniz, 726 F.3d at 618 (quoting United States v. Johnston, 127 F.3d 380, 403
(5th Cir. 1997)).
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First, the district court did not clearly err in determining the amount
of funds laundered. Balagia’s team charged or attempted to charge Ordonez,
Segundo, and Aldemar a total of $700,000; $1,500,000; and $300,000 for
the “legal services” provided. Based on these numbers, the PSR calculated
a total value of funds intended to be laundered at $2.5 million. This total
number, which came from Balagia’s team’s own proposed fees, is a
“reasonable estimate.” Alaniz, 726 F.3d at 623 (quoting commentary to
Section 2B1.1). And adopting this method for calculating the sum of funds
intended to be laundered fits within the district court’s “broad discretion”
in “determining value.” United States v. Tencer, 107 F.3d 1120, 1137 (5th Cir.
1997).
Even if Balagia could dispute that he is singularly responsible for that
sum of money intended to be laundered, it is important that Balagia was
convicted of conspiracy to launder funds. In a conspiracy case, a district court
can include in its calculations the actions of a coconspirator that were
reasonably foreseeable and that were within the scope of the conspiracy.
U.S.S.G. § 1B1.3(a). And for conspiracy prosecutions and sentencing, even
the “intention of laundering the entire amount is enough for sentencing
purposes.” Tansley, 986 F.2d at 884. Regardless of whether the conspirators
were adept enough at defrauding their clients to obtain the full amount
sought, they still conspired to procure that amount of money. The conspiracy
itself is a crime.
Second, the district court did not err in its leadership-enhancement
calculations. Section 3B1.1 prescribes a four-level enhancement if “the
defendant was an organizer or leader of a criminal activity that involved five
or more participants or was otherwise extensive.” U.S.S.G. § 3B1.1(a).
Balagia’s conspiracy involved more than five people. And he was
undoubtedly a leader in the agreement. Taking the evidence in the light most
favorable to the verdict, Balagia was the leader of a firm that was involved in
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an organized attempt to defraud criminal defendants and accept their
unlawfully obtained funds in contravention of the Kingpin Act. The law firm
was Balagia’s, and the employees followed Balagia’s direction.
The commentary lists several factors bearing on the leadership-
enhancement inquiry: “exercise of decision making authority”; “nature of
participation”; “recruitment of accomplices”; “the claimed right to a larger
share of” proceeds; “degree of participation in planning or organizing”;
“nature and scope of the illegal activity”; and “degree of control and
authority exercised over others.” U.S.S.G. § 3B1.1 cmt. (n.4). We look at
these factors as a whole. United States v. Warren, 986 F.3d 557, 568 (5th Cir.
2021). On balance, the evidence supports the district court’s identification
of Balagia as a leader in the crime for sentencing-enhancement purposes.
Third, the district court did not err in applying an abuse-of-trust
enhancement. Section 3B1.3 prescribes a two-level enhancement if “the
defendant abused a position of public or private trust, or used a special skill,
in a manner that significantly facilitated the commission or concealment of
the offense.” An abuse-of-trust enhancement is warranted if the defendant
(1) “occupied a position of trust,” and (2) used it “to significantly facilitate
the commission or concealment of the offense.” United States v. Ollison, 555
F.3d 152, 165 (5th Cir. 2009).
We have routinely held that attorneys occupy a position of trust, so
the first requirement is satisfied. See, e.g., United States v. Harrington, 114
F.3d 517, 519 (5th Cir. 1997). “The integrity of our judicial system
inextricably is intertwined with the integrity of our trial lawyers.
Consequently, it cannot be gainsaid that lawyers occupy a position of public
trust.” Id.The second requirement is satisfied too. Balagia used his position as
an attorney to significantly facilitate the commission of his offense because
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the very premise of Balagia’s operation was that Balagia would recruit
McKeown and the Colombian drug traffickers as clients in his capacity as a
lawyer. Cf. U.S.S.G. § 3B1.3 cmt. (n.1) (“This adjustment . . . applies in the
case of an embezzlement of a client’s funds by an attorney serving as a
guardian, a bank executive’s fraudulent loan scheme, or the criminal sexual
abuse of a patient by a physician under the guise of an examination.”).
Here are just two examples of culpable actions Balagia undertook
while purporting to act as his client’s faithful attorney. Balagia accepted the
DEA’s repayment of McKeown’s seized funds and fraudulently withheld a
portion from her. And as counsel for Ordonez and Segundo, Balagia accepted
client payments made on false assurances of dismissal while pocketing their
funds instead. The facts recounted above provide numerous additional
examples that the district court could have relied on in determining that
Balagia abused his position of trust to significantly facilitate his criminal
behavior. As such, the district court committed no clear error in its
calculations.
B
After moving to withdraw his second court-appointed counsel,
Balagia raised a litany of additional, difficult-to-construe issues in his pro se
supplemental brief. Normally, we apply a liberal standard in construing the
arguments briefed by defendants who elect to proceed pro se in a direct
criminal appeal. United States v. Diehl, 775 F.3d 714, 719 (5th Cir. 2015).
That duty flows from the principle that a litigant should “not suffer simply
because he did not attend law school or find a suitable attorney.” Id. (citation
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omitted). Here, however, the pro se defendant did in fact go to law school. 7
We therefore do not accord his briefing the advantage of liberal construction.
Olivares v. Martin, 555 F.2d 1192, 1194 n.1 (5th Cir. 1977).
Normally, we consider an appellant to have abandoned “all issues not
raised and argued in its initial brief on appeal.” Cousin v. Trans Union Corp.,
246 F.3d 359, 373 n.22 (5th Cir. 2001) (citation omitted). We retain
discretion to consider any arguments Appellant raises after that point. Id.While we do not consider as waived the 11 additional issues Appellant raises
in his third supplemental brief (submitted pro se), we do not accord them the
liberal construction typically provided to pro se litigants. Because none have
merit, we dispose quickly of each argument below.
1&2
In Balagia’s first and second issues for review, he argues that the
district court violated his Sixth Amendment right to counsel by preventing
him from using his counsel of choice. As Balagia admits, his first-preferred
counsel was disqualified after being suspended from practice in the Eastern
District of Texas for disciplinary reasons. Balagia’s second-preferred
counsel could not represent Balagia because she had breast cancer. She
moved to withdraw her representation after the trial had already been
continued for months to accommodate her medical condition. The court
then appointed another counsel (who joined a second counsel who had
previously been appointed co-counsel to Balagia’s second-preferred lawyer).
We review for abuse of discretion the district court’s decision to
disqualify Balagia’s first counsel and the district court’s denial of an
7
Not only that, but he testified that his LSAT score was “in the top one and a half
percent of the nation” and that his attendance at the University of Texas School of Law
was funded by a “full scholarship for academics.”
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additional medical-related continuance for Balagia’s second-preferred
counsel. United States v. Dinitz, 538 F.2d 1214, 1219–20 & n.7 (5th Cir. 1976)
(en banc) (disqualification); United States v. Hughey, 147 F.3d 423, 431 (5th
Cir. 1998) (denial of continuance). Although criminal defendants do have a
“qualified right to retain counsel of the defendant’s own choosing,” this
right is not limitless. Hughey, 147 F.3d at 428. The district court did not
abuse its discretion in managing the trial as it did, which resulted in Balagia’s
having two separately appointed, competent co-counsel.
3
Balagia’s third issue for review is whether the district court erred in
denying Balagia’s additional motions for continuance because that made
Balagia “not ready for trial.” “We review the denial of a motion for
continuance for abuse of discretion.” United States v. Barnett, 197 F.3d 138,
144 (5th Cir. 1999). Balagia’s single-paragraph argument on this point does
not identify the required “‘specific and compelling’ or ‘serious’ prejudice”
needed to secure reversal. Id. (quoting United States v. Krout, 66 F.3d 1420,
1436 (5th Cir. 1995).
4
Balagia’s fourth issue for review objects to the district court’s refusal
to strike certain expert testimony. “We can overturn the ruling only if it was
‘manifestly erroneous.’” United States v. Lee, 966 F.3d 310, 322 (5th Cir,
2020) (quoting Kuhrt, 788 F.3d at 418). “Even then, as is true for other
evidentiary issues, the government can salvage the convictions by proving
any error was harmless.” Id.The testimony in question was from an FBI Agent who spoke about
money laundering. The witness stated he was familiar with “money
laundering techniques and transmission of currency including structuring
techniques.” At some later point, the Agent said on the stand that he was
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not an expert on whether a hypothetical fact scenario would violate statutes
criminalizing money laundering. A witness’s disclaiming of expertise in one
area does not prevent the district court judge from identifying the witness as
an expert with regard to other testimony under Daubert v. Merrell Dow
Pharms., Inc., 509 U.S. 579, 597 (1993). Thus, the district court did not err
in making its own independent determination of the witness’s qualifications.
And any error was harmless, as the record contains voluminous transcripts
of testimony on which a reasonable jury could have reached the same result.
5
Balagia’s fifth issue for review argues that the district court’s denial
of his motion for continuance violated his Sixth Amendment right to
adequate counsel because it left 19 days for trial preparation. This argument
fails. See United States v. Lewis, 476 F.3d 369, 387 (5th Cir. 2007) (10 days
between appointment and trial).
6
Balagia’s sixth issue is that the trial court wrongfully prevented him
from impeaching a witness. This issue is unreviewable as Balagia made no
objection at trial and there is no written record of any decision by the district
court to limit impeachment. Parliament Ins. Co. v. Hanson, 676 F.2d 1069,
1074 (5th Cir. 1982).
7
Balagia’s seventh issue asserts that the district court erred in denying
a mistrial after a man was removed from the audience for allegedly making
threatening motions at the jury. Balagia argues both that the district court’s
removing of the man and the court’s subsequent increase in security tainted
the trial:
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This created a visual and psychological appearance that there
was a distinct barrier in the courtroom with the jury,
prosecution table and prosecution audience/spectators side of
the courtroom and a separate side consisting of the defense
table and defense spectators/family/friends/supporters.
There was a good side and a bad side for the jury to pick from
and you can guess which side I was sitting on.
Balagia’s argument as to the removal being improper fails because at
trial he consented to the removal. And his argument about the prejudice of
creating a “good side” and “bad side” fails to specifically identify any
specific harm suffered. The adversarial nature of courtroom proceedings is
a feature, not a bug, of criminal prosecution. See Jones v. Davis, 890 F.3d 559,
571 (5th Cir. 2018).
8
Balagia’s eighth issue for review asserts that the district court also
erred in not granting a mistrial based on allegedly disruptive activity during
trial. The second disruption (after the first disruption caused by the
threatening motions) was an anonymous caller who claimed to be the
husband of a juror. The caller said that the jurors feared if they did not
convict Balagia, they would face retribution from the Colombian drug
traffickers. The district court determined that the caller was an uninvolved
outsider attempting to assist Balagia by creating circumstances that would
lead to a mistrial.
We review the district court’s decision for abuse of discretion. United
States v. Kelley, 140 F.3d 596, 608. Because Balagia does not show that the
district court failed to address “a colorable showing that an extrinsic
influence was actually made on the jury,” the district court committed no
error, reversible or otherwise. Id.21
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9 & 10
Balagia’s ninth and tenth issues for review relate to an interlocutory
motion for sale of his house and office. First, he says his appointed counsel
who handled the motion was not qualified. He cites no law in support of this
complaint. Nor is it clear what law he could cite. The issue is not presented
as an ineffective assistance of counsel claim, and no alternative theory of
relief is provided either. See United States v. Isgar, 739 F.3d 829, 841 (5th Cir.
2014). Accordingly, this claim fails.
Second, Balagia argues that the court erred in allowing the forfeiture
of his office building because the value of unlawful, commingled funds could
not justify sale of the entire building. Again, he cites no law under which such
a complaint is legally cognizable.
11 & 12
Balagia’s eleventh and twelfth issues restate the arguments previously
made by Balagia’s counsel that the district court erred in calculating his
sentences. For the reasons discussed previously, this argument fails. See
supra Section II.A.3.
13
Balagia’s thirteenth, and final, issue for review is that the district court
erred in making Balagia’s sentence excessively severe. Balagia points to 18
U.S.C. § 3553, but he cites no cases nor makes any explanation in law as to
how the sentence was unreasonably severe. He notes that he “has missed his
son’s wedding, his son’s swearing in as a member of the State Bar of Texas
as a licensed attorney, and the graduation ceremony from the University of
Texas School of Law.” These are the normal incidents of being incarcerated.
They do not show that his sentence was unlawfully severe.
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Balagia also argues that it was unusually severe to force him to forfeit
certain property related to his crimes. Whether Balagia’s property was
forfeitable was a fact question presented to the jury. The jury decided that
Balagia’s office had the “required connection” to his offenses but that his
house did not. However, Balagia was also required to forfeit $1.5 million in
cash proceeds. When that sum could not be located, the district court
ordered Balagia to forfeit his house as a substitute asset. The district court
held a hearing on Balagia’s motion to reconsider the preliminary order of
forfeiture and the government’s motion for interlocutory sale. The defense
said that Balagia no longer had any interest in either property. The court
asked the defense for confirmation that “you’re agreeing to the interlocutory
sale” of the house and office. Defense counsel said yes. The court then
entered an order authorizing interlocutory sale of both properties. There is
no error to reverse.
* * *
Having reviewed all issues raised by Balagia’s multiple counsel and
then later in his pro se brief, we find no reversible error in any part of Balagia’s
convictions or related sentences. As such, we AFFIRM.
23