United States v. Thomas Jackson

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 16a0619n.06
Case No. 15-4070
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Nov 21, 2016
UNITED STATES OF AMERICA, ) DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE SOUTHERN DISTRICT OF
THOMAS JACKSON, ) OHIO
)
Defendant-Appellant. )
) OPINION
)
BEFORE: GRIFFIN, WHITE, and DONALD, Circuit Judges.
BERNICE BOUIE DONALD, Circuit Judge. A federal jury convicted Thomas
Jackson of wire fraud, money laundering, and conspiracy to commit wire fraud and money
laundering. Jackson’s applicable Guidelines range was 97–121 months, based on an offense
level of 30 and a criminal history category of I, but the district court sentenced him below that
range, to a prison term of eighty-three months. On appeal, Jackson challenges the effectiveness
of his trial counsel, the procedural and substantive reasonableness of his sentence, and the district
court’s failure to provide him with substitute court-appointed counsel. For the reasons that
follow, we AFFIRM Jackson’s convictions and sentence.
Case No. 15-4070
United States v. Thomas Jackson
I. BACKGROUND
Jackson and his business partner, Preston Harrison (“Harrison”), founded Imperial
Integrative Health and Research Development, LLC (“Imperial”) to develop and market a sports
beverage called “OXYwater.” Jackson was the founder and CEO of Imperial, while Harrison
was the president and founder. In 2010, Jackson and Harrison began looking for investors for
OXYwater. Toward the beginning of their search for investors, Jackson and Harrison met with
Robert Smith (“Smith”), who at the time owned a consulting company called Investors Capital
Edge. Smith’s job involved consulting with clients on how to build proper business plans,
corporate credit, etcetera. During the initial meeting with Smith, Jackson told Smith that
OXYwater was oxygen-enhanced, and that their goal was to raise about $8.5 million in capital.
Jackson and Harrison initially contracted with Smith for him to perform consulting services for
Imperial and OXYwater. Upon joining Imperial, Smith suggested that they increase the start-up
amount to $9.5 million and recommended other changes to the Private Placement Memorandum
(“PPM”)—the document that provided the overview of Imperial, how funds would be raised, and
how much each share would cost. Smith subsequently took on the more formal role of Chief
Financial Officer of Imperial, where his focus was primarily on recruiting investors for
OXYwater.
The PPM, which was given to a number of Imperial’s investors, contained false
information. The PPM listed as National Sales Manager Daniel Couts, a former employee of
Coke and Vitaminwater, and also listed Kevin Waddle, Michael Skelton, and Matthew Godsey,
all former Coke and Vitaminwater employees, as members of the OXYwater sales team, and
included their resumes. None of these individuals, however, were ever employed by or
associated with Imperial. The PPM further included a section on celebrity endorsements that
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listed OXYwater’s official endorsers as well-known athletes, Manny Pacquiao and Gregory
Jennings. These athletes were never officially affiliated with OXYwater or Imperial. Even
further, the PPM indicated that in the first year, Jackson would receive a salary of $90,000 and
Harrison a salary of $60,000. These numbers were subject to increase in subsequent years.
Contrary to these representations, Jackson and Harrison were never officially on Imperial’s
payroll. Rather, Jackson used the Imperial accounts for his personal use, funneling significantly
higher amounts than disclosed in the PPM to himself and Harrison. Finally, the PPM stated that
the funds raised would be used for marketing, inventory, payroll, office warehouse lease, and to
purchase machinery and commercial vehicles for local delivery to retail accounts. While some
of the funds were used for legitimate business purposes, bank records indicated that the invested
funds were also used by Jackson and Harrison for personal expenses. Based on the
misrepresentations in the PPM and other oral communications, Jackson and Harrison received
approximately $9.3 million in investments for Imperial and OXYwater.
In 2011, Jackson—who controlled all of Imperial’s finances—transferred over one
million dollars from Imperial accounts into an account listed under the name of ForeverNow,
LLC (“Forever Now”). Forever Now listed Harrison and his wife, Lovena, as the only
signatories to the account. The Harrisons used the Forever Now account as their personal
account, purchasing personal items and paying for home improvement projects out of the
account.
Following a joint investigation by the Federal Bureau of Investigation and the Internal
Revenue Service, a federal grand jury, in May 2014, returned an indictment against Jackson and
Harrison on various counts of wire fraud and money laundering. The grand jury also indicted
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Preston and Lovena Harrison for tax fraud and tax fraud conspiracy, and indicted Lovena for
structuring currency transactions to evade reporting requirements.
Jackson was tried in an eight-day joint trial with co-defendants Preston and Lovena
Harrison. In its case in chief, the prosecution presented evidence from twenty witnesses,
including six investor victims. Following the prosecution’s case, the defense rested without
presenting any proof. The jury convicted Jackson of one count of wire fraud conspiracy, in
violation of 18 U.S.C. § 1349; eight counts of wire fraud, in violation of 18 U.S.C. § 1343; one
count of money laundering conspiracy, in violation of 18 U.S.C. § 1956(h); and twelve counts of
money laundering, in violation of 18 U.S.C. § 1957. The district court sentenced him to eighty-
three months in prison and ordered restitution in the amount of $8,840,706.
II. APPOINTMENT OF NEW COUNSEL
Jackson first argues that the district court erred in denying his motion for a new court-
appointed attorney, effectively forcing him to be represented by a lawyer with whom he had a
conflict. For the reasons below, we hold that the district court properly denied Jackson’s motion.
A. FACTS
On the first day of Jackson’s trial, counsel for co-defendant Harrison, Mr. Gatterdam,
informed the district court that they had just learned that Jackson had filed a disciplinary
complaint against his counsel, Ms. Menashe, and that Jackson did not want to proceed with her
as counsel. Ms. Menashe stated that she had not received a copy of the complaint, and that she
had no prior knowledge of it. In response to questions from the court, Jackson stated that while
he had only filed the disciplinary complaint approximately a week before, he felt like he had not
had adequate counsel from the start. Jackson stated that there was a lack of communication
between him and Ms. Menashe and that he had lost trust in her. Particularly, Jackson stated that
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he believed Ms. Menashe thought that he was guilty because of the way she spoke to him, that
she was refusing to investigate and introduce financial information that would give him
“credibility in terms of the company financials,” and that he thought she was working with the
prosecution against him because of a plea agreement that she presented him within a week of his
arraignment.
Upon inquiry by the court, Ms. Menashe stated that while she received a plea offer early
on in the case, it was not within a week of the arraignment, and that it was submitted so early
because the AUSA assigned to the case at the time was leaving the office and there were time
constraints. Ms. Menashe also stated that she has an “aggressive personality” and that while she
tends to not use the most flowery language, she had never told Jackson that she was “going to
nail his butt.” With respect to the breakdown in communication, Ms. Menashe stated that while
verbal communication had slowed down, she had exchanged voluminous emails with Jackson,
Harrison, and Mr. Gatterdam. According to Ms. Menashe, she would have liked to discuss with
Jackson certain documents produced by the prosecution and whether he should testify, but in the
past week Jackson had skipped a planned meeting and stopped returning her calls. Regardless,
Ms. Menashe stated that there was ample time to do those things before the defense would have
to present its case, and that she believed she was prepared to go forward with trial despite the
communication issues. Finally, Ms. Menashe stated that with regards to the ledgers and financial
documents that Jackson referred to, she did not believe that she could ethically introduce those
documents because she could not properly authenticate them.
Mr. Gatterdam, Harrison’s lawyer, also spoke to the court. Importantly, he noted that he
too had concerns with introducing the ledgers, which were supposedly prepared by Mr. Kevin
Foster, who at one point was going to be considered an unindicted co-conspirator, and who was
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also a named defendant in a related civil suit. Mr. Gatterdam also noted that he had been in
meetings with Ms. Menashe and the defendants, and while she was direct, he did not believe that
she had ever been unprofessional.
The court also heard from the prosecution that it had “devoted tremendous resources to
getting this case ready to go today” and that the prosecution believed that Jackson’s complaint
was a ploy to not go forward at that time. Following the prosecution’s statement, the district
court made the following findings:
Well, as many cases have stated in the past in Court of Appeals decisions,
the right to counsel of choice, unlike the right to counsel, is not absolute. And the
[c]ourt generally goes through several considerations when this issue arises. And
the first one is the timeliness of any motion or request. And this comes the
morning of trial. The timeliness of this is, first of all, dilatory and, second of all,
suspect.
From, or, with regard to what it is that the defendants are complaining of,
well, my notes indicate that they believe they’re, whatever this means,
underrepresented or they believe that their attorneys believed that they were guilty
from the start; there was this issue concerning plea agreements; that there have
been harsh words as far as dialogue between counsel and the defendants are
concerned. They indicate – defendants indicate that communication has broken
down, that there has been a lack of investigation. And then there is this issue of
financial ledgers. That seems to encapsulate that which the defendants are
complaining of here this morning.
First of all, with regard to the defendants feeling guilty – feeling that their
attorneys believe they were guilty from the start, that’s not an unusual position for
defendants to find themselves in when they discuss matters with their counsel. In
fact, I’d be surprised if many times that doesn’t happen simply because counsel
has to be critical with regard to the presentation of their case to make sure that
they don’t fall into a trap.
With regard to the plea agreements, well – yeah. I’m glad to know that
counsel has presented the plea agreements as they come along to counsel, or, to
the defendants. The fact that those plea agreements were not accepted kind of
speaks to itself, but the bigger problem I’ve had in the past is when plea
agreements and negotiations from the government to defense counsel have not
been forwarded to the defendants. And that’s not the case here. In fact, I don’t
see any issue here with regard to these plea agreements being presented to the
defendants.
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On the other hand, I find that they have – the defense counsel has tried to
get these to counsel and to the defendants in a timely manner because they were
under a deadline, apparently to get an answer.
With regard to the dialogue between the defendants and counsel, I’m
familiar with all three counsel, all three defense counsel. I’m very familiar with
Ms. Menashe and Mr. Gatterdam’s representation of clients not only in the state
court proceedings but in federal court proceedings. I have had them appear before
me, for probably the last 15 years, in different cases, including murder cases.
I consider the two of them, [Ms.] Menashe and Mr. Gatterdam, to be two
of the best criminal attorneys, defense attorneys, in central Ohio. I have noticed
in the past, but I don’t find this to be a criticism, that they are very blunt with
regard to their representation of the defendants because they have to be. And
whether the defendants like that dialogue or not is of little consequence here
today.
Let me just say defense counsel are not – are not to be lackeys for the
defendants.
With regard to the breakdown in communication, I find this to be almost
laughable. The breakdown of the communication has been self imposed [sic].
The defendants, themselves, have stopped talking to the defense counsel. I don’t
see that as a problem here. I mean, I see that as a problem, but it’s not a problem
of counsel.
There seems to be this whole issue of corporate financial ledgers. I will
say, just for the defendants’ sake, there are issues involved with regard to
evidentiary matters. And I’m not sure what these ledgers are or what we’re
referring to, but I trust defense counsel when they tell me that there are issues in
their mind with regard to the presentation of these corporate financial ledgers.
They are schooled and trained in the rules of evidence. The defendants are not.
So, I have tried to go through each of these complaints, if you want to call
them that, that the defendants have made; and I don’t see where this is a problem
of defense counsel. I think there is more of an issue here involving the self-
imposed communication breakdown that the defendants have created. And I
would suggest that they begin to communicate with their counsel in this matter.
I have to balance the public’s interest in a prompt and efficient
administration of justice. And that balance tips in favor of not granting any
request of the defendants for new counsel at this time.
As Mr. Young [counsel for the government] has stated, you have
witnesses coming in from all over the United States. The parties have worked
hard, and that includes the defense counsel. I’m aware of that because I have
reviewed their exhibit books, their witness lists and so forth, and I understand that
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they have met on several occasions with the government to discuss evidentiary
issues and try to resolve some of those.
But what I’m getting at is, we’re set for trial today. We have prospective
jurors, many more than I normally have, ready to go here. And we have witnesses
coming in and matters lined up for the next two weeks. I have to balance that
against the defendants’ what appears to be a right to counsel of choice, and the
balance tips quickly and convincingly on behalf of proceeding here today.
The request, if that’s what this is, and I believe it is – the request of the
defendants for a continuance to obtain new counsel is denied.
(R. 139, PageID # 3522–26.)
B. ANALYSIS
We review a district court’s denial of a motion to substitute counsel for abuse of
discretion. United States v. Marrero, 651 F.3d 453, 464 (6th Cir. 2011) (citing United States v.
Mooneyham, 473 F.3d 280, 291 (6th Cir. 2007)). The Court will consider the following four
factors to determine if a reversal is warranted:
(1) the timeliness of the motion, (2) the adequacy of the court’s inquiry into the
matter, (3) the extent of the conflict between the attorney and client and whether it
was so great that it resulted in a total lack of communication preventing an
adequate defense, and (4) the balancing of these factors with the public’s interest
in prompt and efficient administration of justice.
United States v. Trujillo, 376 F.3d 593, 606 (6th Cir. 2004) (quoting United States v. Mack,
258 F.3d 548, 556 (6th Cir. 2001)).
All four factors weigh heavily against Jackson and in favor of the district court’s decision
to deny substitution of counsel. First, timeliness: Jackson filed his disciplinary complaint against
counsel approximately a week before the first day of trial. However, he did not inform the court
or his counsel about this complaint. Instead, Jackson waited until the day of trial to inform the
court that he wanted substitute counsel. This Court has repeatedly upheld the finding of
untimeliness in cases involving longer periods than is present here. See, e.g., Trujillo, 376 F.3d
at 606–07 (finding that a motion for substitution of counsel filed three days before the start of
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trial was untimely); United States v. Williams, 176 F.3d 301, 314 (6th Cir. 1999) (upholding a
finding of untimeliness where the defendant requested new counsel two weeks before trial);
United States v. Jennings, 83 F.3d 145, 148 (6th Cir. 1996) (concluding that a motion for
substitution of counsel, filed the day before trial, was untimely). Jackson attempts to justify the
delay in requesting substitute counsel by stating that he did not know until the eve of trial that his
lack of communication with his attorney would have an unfavorable impact on his case.
(Appellant Br., at 46.) This argument is unpersuasive for two reasons: (1) Jackson informed the
district court that he felt like he had not had adequate counsel from the start; and (2) even after
filing the disciplinary complaint, Jackson still waited over a week to inform the court of his
dissatisfaction with counsel. Despite appellate counsel’s laudable attempt at oral argument to
minimalize the failure to satisfy this factor, it is clear that the district court did not abuse its
discretion in finding that the motion was untimely.
Second, the Court looks at the adequacy of the district court’s inquiry into the matter.
“[T]o meet this requirement, the district court simply must allow a defendant the opportunity to
explain the attorney-client conflict as he perceives it.” Marrero, 651 F.3d at 465 (citing United
States v. Vasquez, 560 F.3d 461, 467 (6th Cir. 2009)). The record indicates that the district court
engaged in a lengthy discussion with Jackson and gave him the opportunity to detail the alleged
conflict between him and his attorney and his concerns with her representation of him. The
district court also heard from Jackson’s attorney, co-defendant Harrison, and Harrison’s attorney.
During these exchanges, Jackson was given the opportunity to air his grievances and counsel was
given an opportunity to respond. It appears from the record before the Court that the district
court satisfied its obligation to inquire into Jackson’s complaint.
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The Court next looks at the nature of the conflict between the attorney and the client.
Jackson listed, as reasons for his dissatisfaction with counsel, lack of communication and trust
stemming from his belief that his counsel thought he was guilty, her use of harsh words to him,
her presentation of a plea agreement to him early on in the case, and her refusal to introduce
evidence at trial that he wanted her to. The district court addressed each of defendant’s
complaints, finding it was not unusual for defendants to feel like their lawyers believe they are
guilty; that because defense counsel are not supposed to be lackeys for defendants, counsel’s
blunt nature is not a reason for substitution of counsel; and that because counsel are schooled in
matters of evidence, Ms. Menashe’s and Mr. Gatterdam’s conclusions regarding the ledgers
defendants wanted them to introduce were persuasive. Ultimately, the district court discounted
defendant’s claim of a breakdown in communication, finding that it was completely self-
imposed. This Court has previously held that “a lack of communication resulting from a
defendant’s refusal to cooperate with his attorney does not constitute good cause for substituting
counsel.” Marrero, 651 F.3d at 466 (citation omitted). The district court’s conclusions here
were not unreasonable or an abuse of discretion.
Finally, the Court must weigh the first three factors against the public’s interest in the
prompt and efficient administration of justice. That Jackson loses in this balancing of factors is
clear. Given that the motion was made on the day trial was set to begin, the jurors were already
present and the prosecution had already expended resources to have witnesses and members of
its prosecution team—who were not from Ohio—present and ready to begin trial. Even further,
Jackson’s counsel stated that she was prepared to proceed with trial, and that there was still
enough time for her and Jackson to complete their unfinished collaborative tasks, since it would
be a week before the defense presented its case in chief. As such, the district court did not abuse
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its discretion in concluding that the public’s interest in the prompt efficient administration of
justice weighed in favor of denying the motion to substitute counsel. See Trujillo, 376 F.3d at
607. For these reasons, we find that the district court’s denial of Jackson’s motion to substitute
counsel was not an abuse of discretion.
III. INEFFECTIVE ASSISTANCE OF COUNSEL
Jackson next argues that his trial counsel was ineffective in two ways: (1) before trial for
failing to move for a severance; and (2) after trial for failing to file a motion for mistrial.
According to Jackson, the jury heard prejudicial evidence about Preston and Lovena that would
not have been admissible against him had he been tried separately.
This Court, as a general rule, does “not consider on direct appeal whether defense
counsel’s performance constituted constitutionally ineffective assistance, primarily because
‘there has not been an opportunity to develop and include in the record evidence bearing on the
merits’ of that issue.” United States v. Herrera-Zuniga, 571 F.3d 568, 592 (6th Cir. 2009)
(quoting United States v. Wunder, 919 F.2d 34, 37 (6th Cir. 1990)). We have recognized an
exception to this general rule where “the parties have adequately developed the record.” United
States v. Foreman, 323 F.3d 498, 502 (6th Cir. 2003) (quoting United States v. Pierce, 62 F.3d
818, 833 (6th Cir. 1995)). This exception, however, is inapposite here. As it stands, the record
does not contain any factual basis that will allow the Court to do more than speculate. Because
we find that the record is not sufficiently developed, we decline to address this claim, without
prejudice to Jackson’s right to raise it in a proper post-conviction proceeding.
IV. LOSS CALCULATION
Jackson argues that the district court erred in determining an amount of loss of
$9.3 million for two reasons: (1) the investment from Shaffer Smith should not have been
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included in this amount because he did not rely on any of the materials prepared by Jackson, nor
did he have any direct communication with Jackson before deciding to invest; and (2) the
investments of the thirteen investor victims that did not testify at trial should not have been
included in the loss calculation because the prosecution did not provide any evidence that they
relied on false statements from Jackson, or on materials prepared by Jackson.
A. FACTS
At trial, the prosecution presented testimony from investors Kendrick Gregory, Aaron
Stumpf, Joseph Crispin, Shaun Stonerook, William Culman, and Shaffer Smith. Kendrick
Gregory testified that he invested a total of $680,000; Aaron Stumpf invested $125,000; Joseph
Crispin invested a total of $175,000; Shaun Stonerook invested a total of $750,000; and William
Culman invested $500,000. These five investors testified that they relied on either the PPM or
communications with Jackson, Harrison, and/or Smith in making their investments.
Shaffer Smith testified that he heard of OXYwater through his then business manager,
Kevin Foster. He further testified that at the time, he relied on Foster to manage his finances and
conduct due diligence into potential investments. Foster essentially told him that OXYwater was
going to overtake Vitaminwater, replace sugary drinks in schools, and become the official drink
of a certain basketball team. Based on Foster’s representations and recommendations about
OXYwater, Shaffer Smith invested a total of $2.5 million. The prosecution also introduced
evidence that in October 2012, Foster made an additional investment of $500,000 from Shaffer
Smith’s accounts without his knowledge or authorization. Ultimately, IRS Agent David
Gosiewski testified that total amount of investments made into Imperial was approximately
$9 million.
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The presentence investigation report (“PSR”) found that Jackson was responsible for a
total loss to investors of $8,840,706, and that the scheme included a total of nineteen investor
victims. Based on these findings, the PSR increased Jackson’s base offense level by twenty
points—for an actual loss amount greater than $7 million, but less than $20 million—and by an
additional two points—for more than ten victims, but less than fifty. During Jackson’s
sentencing hearing, the prosecution argued that since the trial, they had discovered more loss
which increased the total amount invested to $9,342,200. The prosecution further argued that
this amount was the proper loss amount because Jackson’s claims were “demonstrably rife with
fraud” and thus, “the minute any penny came in, it was ill-gotten gains because it was premised
on the fraud.”
Following arguments from the defense and the prosecution, the district court concluded
that the increased amount was correctly calculated, but even so, it did not change the Guidelines
calculation.
B. ANALYSIS
Our review of the reasonableness of a sentence is for abuse of discretion. United States v.
Collins, 828 F.3d 386, 388 (6th Cir. 2016) (citing Gall v. United States, 552 U.S. 38, 51 (2007)).
“A district court abuses its discretion in the sentencing context if it ‘commits a significant
procedural error,’ ‘selects a sentence arbitrarily, bases the sentence on impermissible factors,
fails to consider relevant sentencing factors, or gives an unreasonable amount of weight to any
pertinent factor.’” Id. (quoting Gall, 552 U.S. at 51; United States v. Conaster, 514 F.3d 508,
520 (6th Cir. 2008)) (alterations removed). We review a challenge to the district court’s loss
calculation for clear error. United States v. Martinez, 588 F.3d 301, 326 (6th Cir. 2009) (citing
United States v. Blackwell, 459 F.3d 739, 772 (6th Cir. 2006)). The defendant has the burden of
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“demonstrating ‘that the court’s evaluation of the loss was not only inexact but outside the
universe of acceptable computations.’” Id. (citing United States v. Raithatha, 385 F.3d 1013,
1024 (6th Cir. 2004)).
First, Jackson argues that the amount invested by Shaffer Smith should not be included in
the loss amount calculation. “When determining the amount of loss for sentencing purposes, ‘a
defendant will be held accountable for the actual or intended loss to a victim, whichever is
greater, or a combination thereof.’” Id. (citing Raithatha, 385 F.3d at 1024). Actual loss is
defined as “the reasonably foreseeable pecuniary harm that resulted from the offense.” USSG
§ 2B1.1 cmt. 3(A)(i). Intended loss, on the other hand, is “the pecuniary harm that the defendant
purposefully sought to inflict and includes intended pecuniary harm that would have been
impossible or unlikely to occur.” USSG § 2B1.1 cmt. 3(A)(ii). Additionally, “[t]he loss must be
‘caused’ by the defendant’s fraud.” United States v. Turner, 615 F. App’x 264, 268 (6th Cir.
2015) (quoting United States v. Rothwell, 387 F.3d 579, 583 (6th Cir. 2004)).
At trial, Robert Smith testified that he, Jackson, and Harrison met with Foster in 2011 and
gave him a presentation on OXYwater, told him what they wanted to do with the product, and
how much capital they wanted to raise. Smith also testified that they provided Foster with the
same presentation that they typically showed investors—i.e., that the product was oxygen-
enhanced and that they had former Vitaminwater employees on their team. Foster then informed
them that he had a lot of “high-net-worth” clients and could raise all the money they needed.
Smith further testified that after meeting with Foster, they knew who some of Foster’s clients
were and knew that Shaffer Smith—award-winning recording artist known by the stage name
“Ne-Yo”—was one. Based on this, the district court did not err in including the investments
made by Shaffer Smith in the amount of loss calculation. Although Shaffer Smith did not have
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any direct interaction with Jackson, Harrison, or Smith, he was induced to invest by the false
representations made by them to his financial manager, Foster. Even further, Foster was given a
presentation about OXYwater with the intention of seeking investments from his clients. That
the amount invested by Foster on behalf of Shaffer Smith, both with and without his permission,
was a reasonably foreseeable pecuniary loss is clear.
Jackson’s second argument concerns the district court’s inclusion of amounts invested by
non-testifying investors. Jackson argues that these amounts should not be included not just
because these investors did not testify at trial, but because the prosecution failed to prove that but
for Jackson’s misrepresentations, these investors would not have invested. However, when fraud
permeates an entire investment enterprise, a district court may find that the loss amount includes
the entire amount invested. See Turner, 615 F. App’x at 268–69; United States v. Healy, 553 F.
App’x 560, 565–67 (6th Cir. 2014). Such a finding is sufficiently supported by the record. The
testimony presented at trial indicated that Jackson began making fraudulent misrepresentations
very near the time he began soliciting investments. According to Robert Smith, Kendrick
Gregory, who testified at trial, was one of their first significant investors. At this point, Jackson
and Harrison were already making misrepresentations about the composition of OXYwater and
disseminating the materially false PPM. This Court has upheld amount of loss calculations such
as this where the defendant made fraudulent misrepresentations from the onset. See Healy,
553 F. App’x at 566; see also Turner, 615 F. App’x at 268.
This conclusion is not changed by the fact that OXYwater was actually an existing
product and that it, in fact, incurred some legitimate business expenses. In Healy, this Court
noted that because the district court determined that the defendant intended to defraud his
investors from the outset, the entire amount was properly included, and none of the expenses
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could be described as “legitimate.” 553 F. App’x at 566–67. This reasoning is equally
applicable here. Upon finding that the fraud permeated the entire enterprise from its inception, it
was within the district court’s discretion to find that the amount of loss included every amount
that was invested into the enterprise. In making loss estimates, “the ‘sentencing judge is in a
unique position to assess the evidence and estimate the loss based upon that evidence,’ and [] the
district court’s loss determination is due ‘appropriate deference.’” Turner, 615 F. App’x at 268
(quoting United States v. McCarty, 628 F.3d 284, 290 (6th Cir. 2010)). For all of the foregoing
reasons, the district court did not err in calculating the loss amount.
V. SUBSTANTIVE UNREASONABLENESS OF SENTENCE
Finally, Jackson argues that his sentence is substantially unreasonable because it is
overwhelmingly based on the loss amount, and because it is greater than necessary to achieve the
statutory goals of sentencing.
A. FACTS
Following the arguments from the defense and the prosecution at Jackson’s sentencing
hearing, the district court heard impact statements from three investor victims and one former
OXYwater employee, and heard statements from twelve people speaking on behalf of Jackson.
The court also heard a statement from Jackson. In a monologue spanning approximately seven
pages, the district court separately considered each of the seven 18 U.S.C. § 3553(a) factors
before announcing Jackson’s sentence.
For the first factor, the court found that Jackson was convicted of very serious crimes
which were compounded by the fact that people lost their life savings as a result of his actions.
Although the court noted that Jackson had good characteristics and no criminal history, the court
found that the seriousness of the offenses outweighed any positive history. For the second
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factor, the court stated that Jackson did not need educational or correctional treatment and that he
had a low risk of recidivism; however, the court found that a severe sentence was necessary to
reflect the seriousness of the offense and promote general deterrence. The district court noted for
the third and fourth factors that a prison sentence was the only option, but also stated that it
would take into consideration that Jackson’s applicable Guideline range would be only 78–97
months under the forthcoming November 2015 Guidelines amendments.1 The fifth factor
required the court to take into consideration pertinent policy statements, and the court found that
the policy statements regarding family and children were considerably outweighed by the policy
statements involving the theft of money from other people and fraud. For the sixth factor, the
court found that a good example of similar conduct was co-defendant Harrison, and that his
conduct and resulting sentence were directly on point, so there were no unwarranted sentencing
disparities. Finally, the district court found that there was a need to make restitution to the
victims.
Following these findings, the district court sentenced Jackson to a total term of eighty-
three months in prison with three years of supervised release, and ordered him to pay restitution
in the amount of $8,840,706. Jackson’s sentence was therefore fourteen months below the then-
applicable Guidelines range, and within the range established by the forthcoming Guidelines
amendments.
B. ANALYSIS
We review the substantive reasonableness of a sentence for abuse of discretion. United
States v. Jeter, 721 F.3d 746, 757 (6th Cir. 2013) (citing Gall, 552 U.S. at 46). “A sentence is
substantively unreasonable if the district court selects a sentence arbitrarily, bases the sentence
1
Jackson’s sentencing hearing was held in October 2015.
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United States v. Thomas Jackson
on impermissible factors, fails to consider relevant sentencing factors, or gives an unreasonable
amount of weight to any pertinent factor.” Id. (quoting United States v. Shaw, 707 F.3d 666, 674
(6th Cir. 2013)). A below-Guidelines sentence, like a within-Guidelines sentence, is
“presumptively reasonable.” United States v. Sierra-Villegas, 774 F.3d 1093, 1103 (6th Cir.
2014) (citing United States v. Curry, 536 F.3d 571, 573 (6th Cir. 2008) (per curiam)); United
States v. Graham, 622 F.3d 445, 464 (6th Cir. 2010) (citation omitted). And the presumption is
stronger for a below-Guidelines sentence than for a within-Guidelines sentence. Curry, 536 F.3d
at 573 (“[S]imple logic compels the conclusion that, if a [within-Guidelines sentence] would
have been presumptively reasonable in length, a defendant’s task of persuading us that the more
lenient [below-Guidelines sentence] is unreasonably long is even more demanding.”).
18 U.S.C. § 3553(a) outlines the factors to be considered in imposing a sentence. The
statute further provides that “[t]he court shall impose a sentence sufficient, but not greater than
necessary, to comply with the purposes” of § 3553(a)(2). As outlined above, the district court
considered all seven factors set forth in § 3553(a) and thoroughly detailed the reasons for its
findings.
It is true, as Jackson argues, that the district court placed emphasis on the amount of loss,
but the record does not indicate that this assignment of weight was unreasonable. The district
court reviewed the § 3553(a) factors, placing great weight on the severity of the offense, and the
fact that the effects of Jackson’s actions were far-reaching. The district court did not assign an
unreasonable weight to the amount of loss; instead, the record in its entirety indicates that the
district court considered the amount of loss along with the pertinent § 3553(a) factors and
concluded that the seriousness of the offense and the need for punishment required a sentence of
eighty-three months.
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United States v. Thomas Jackson
This Court has upheld the reasonableness of sentences where the court did not explain
each § 3553(a) factor that it considered to arrive at a sentence. See, e.g., United States v.
Collington, 461 F.3d 805, 809 (6th Cir. 2006) (citing United States v. Vonner, 452 F.3d 560 (6th
Cir. 2006)) (“[A] reasonable sentence based on consideration of the factors does not require a
rote listing.”). The reasonableness of the sentence imposed is even more persuasive where, as
here, the district court thoroughly identified its reasoning on each factor, and then actually
imposed a sentence below the then-applicable Guidelines range. Jackson has not sufficiently
rebutted the presumption that his sentence is reasonable.
VI. CONCLUSION
For the reasons detailed above, we AFFIRM Jackson’s convictions and sentence.
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