United States v. Marcusse

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 08a0102n.06
Filed: February 14, 2008
Nos. 05-2556, 05-2586, 05-2666, 05-2667, 05-2668
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, :
:
Plaintiff-Appellee, :
:
v. :
: ON APPEAL FROM THE UNITED
WILLIAM EDWARD FLYNN (05-2556), : STATES DISTRICT COURT FOR
GEORGE TERRANCE BESSER : THE WESTERN DISTRICT OF
(05-2666), JANET MARCUSSE : MICHIGAN
(05-2586/2668), DONALD MAYNARD :
BUFFIN, JR. (05-2667), :
:
Defendants-Appellants. :
Before: ROGERS and SUTTON, Circuit Judges; BERTELSMAN, District Judge.*
BERTELSMAN, District Judge. Defendants-appellants, Janet Marcusse,
George Besser, Donald Buffin, Jr., and William Flynn, appeal their convictions on
charges of mail fraud, conspiracy to commit mail fraud, and money laundering in
connection with their operation of a fraudulent investment scheme. Finding no error in
*
The Honorable William O. Bertelsman, United States District Court Judge for the
Eastern District of Kentucky, sitting by designation.
the district court’s rulings at trial or in its sentencing determinations, we affirm.
I.
A. Access Financial and Defendants’ Roles
From about 1998 to 2002, defendants organized, operated, and promoted an
investment business called Access Financial (“Access”). Defendants represented that
Access was a successful investment organization with a history of returning large profits
to clients and that Access had connections to little-known, high-yield investment
opportunities in world markets, which were not available to the general public.
Defendants further represented to investors that their principal would be kept in
guaranteed accounts in a major world bank and would not be at risk. Defendants told
investors that Access operated as a tax-free church and that their returns would be
non-taxable if they purchased a “church sub-chapter” package from Access. Many of
the investors Access attracted were retirees who transferred their retirement accounts
to Access on the representation that Access was eligible to receive such rollovers and
that the investors’ profits would be tax-free.
Defendants, Janet Mavis Marcusse and George Terrance Besser, were the
original organizers and partners of Access. Defendant Diane Renae Boss was an
2
assistant and then office manager at Access from 1998 to 2001. She married Wesley
Boss in 1999, and he became a sales manager at Access. Wesley and Diane Boss ran
the Access office out of their basement from December 1999 to April 2001, when they
left the organization.
Defendant Donald Maynard Buffin, Jr. joined Access in 1999 as a salesman and
became the office manager in April 2001, when the Bosses left.
Defendant Jeffrey Alan Visser joined the Access sales staff in 2000 and helped
run the office when the Bosses left in 2001.
Defendant William Flynn met Marcusse in 1999, and he became her boyfriend.
Flynn was a promoter for Access and managed a group of investors from northern
Wisconsin.
Defendant David Rex Albrecht was also a promoter of Access and received
finder’s fees for steering clients to Access.
Between 1998 and 2001, Access took approximately $20.7 million from
approximately 577 investors. Investors were required to sign a non-disclosure and
confidentiality agreement before receiving details of the investment. Investors received
a prospectus-type brochure which described the markets in which Access invested and
stated that these alleged markets were recognized and regulated by the U.S.
government, Federal Reserve, and International Chamber of Commerce. Investors
3
were told that they would receive a return of as much as 20% on their principal.
Defendants mailed monthly “profit” checks to early investors in Access
representing an approximate 10% return on their principal. By 1999, these checks
approximated a 3% return. Defendants also told investors that their principal
investments were increasing for a total return of 20% per month. These
representations were made in periodic newsletters that Access mailed to investors.
Defendants also cautioned investors that they would be “thrown out” out of the program
if they talked about it to their accountant or the authorities.
By May 2001, defendants had spent almost all of the investors’ principal, and
Access was about to collapse. Nonetheless, defendants continued to receive additional
funds from new investors, based on the same promises of high returns. Defendants
received approximately $1 million in new investor funds after May of 2001. In May
2001, defendants held a two-day seminar for investors at which they made many of the
same assurances about the security of investors’ funds. Defendants also presented a
program and speaker conveying the message that the IRS and the income tax laws
were not really legal.
In August 2001, Marcusse, Buffin, and Visser went to the police to report that the
Bosses had embezzled a substantial sum of money from Access. The detective with
whom they met became suspicious of the nature of the organization and asked
4
defendants for financial records to substantiate their accusations against the Bosses.
The records were never produced.
Around the same time, Access began to default on the monthly “profit” payments
to investors. Through 2001 and 2002, Access represented to investors, orally and in
newsletters, that these delays were temporary and that Access was continuing to invest
their funds successfully.
Notwithstanding these assurances, some investors began to demand the return
of their principal, without success. Investors who expressed anger at Access staff were
told they were being “thrown out” of the program. In December 2001, the Access office
closed, leaving investors with no information.
B. The Federal Investigation
By late 2001, a criminal investigation into Access had begun in the Western
District of Michigan, and it became public knowledge in early 2002. Around this time,
Marcusse and Visser moved to Missouri but continued to send investors a periodic
newsletter, in which they asked investors to be patient. The newsletters threatened
investors who cooperated in the investigation that they would risk losing their profits
and principal. The newsletters also stated that the government and the courts were
conspiring to defraud the investors of their money.
When subpoenaed by the grand jury, Marcusse, Visser, Flynn, and Buffin filed
5
pleadings claiming that the grand jury had no jurisdiction over them. Marcusse filed
various papers challenging the authority of the federal courts and the validity of the
income tax laws. When served with a grand jury subpoena for Access’s business
records, Marcusse took all the Access records from the closed office and disappeared.
In July 2004, she was located living in a trailer in the woods in Branson, Missouri. The
Access records were never located.
When agents attempted to serve a grand jury subpoena on Besser, he fled into
his house and would not answer the door. Shortly thereafter, he sold his house and
moved to Mexico, leaving no forwarding address. He was later found living in a villa
resort there.
Following an extensive grand jury investigation, federal investigators determined
that, of the approximately $20.7 million in investors’ funds taken in by defendants,
approximately $8.4 million was used to make monthly “profit” payments to lull existing
investors and attract new ones. Approximately $4.8 million was diverted by defendants
for their personal use, and approximately $7.3 million was dissipated by defendants in
other transfers and payments. Defendants used investors’ funds to pay everyday bills
and to purchase homes, automobiles, airplanes, a bar, and real estate. Defendants
reported none of this income to the IRS.
Defendants opened numerous bank accounts into which they deposited
6
investors’ funds. The accounts bore church-like names such as “Sanctuary Ministries”
(a nonexistent organization with which defendants claimed Access was related),
Discovery Church, Freedom Church of Revelation, Phoenix Ministries, His Will
Ministries, and Promised Deliverance. Defendants also obtained group medical
insurance representing themselves to be employees of a church, ministers,
missionaries or church staff employees. However, Access had no church structure, no
building, no services, and no activities of a church or religious nature.
Defendants kept no records of their use of investors’ funds, and Access had no
accountant or financial officer. The investigation revealed that Access never received
any funds from successful investment activity, only from investors. Access did not keep
investors’ principal in safe accounts or trusts as represented.
Of the $20.7 million Access received in investors’ funds, none was recovered or
returned to investors other than the $8.4 million that had been redistributed in “profit”
checks.
C. The Charges Against Defendants and Trial Testimony
On July 29, 2004, defendants were charged in a 40-count indictment with mail
fraud and conspiracy to commit mail fraud. On October 27, 2004, the grand jury
returned an 83-count superseding indictment against defendants. Counts 1-39 charged
all defendants with mail fraud in violation of 18 U.S.C. § 1341. Count 40 charged all
7
defendants with conspiracy to commit mail fraud in violation of 18 U.S.C. § 1341.
Count 41 charged all defendants with conspiracy to commit money laundering in
violation of 18 U.S.C. § 1956(h). Count 42 charged all defendants with conspiracy to
defraud the United States in violation of 18 U.S.C. § 371. Counts 43-57 charged all
defendants with money laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(I). Count
58 charged Marcusse and Boss with money laundering in violation of 18 U.S.C. § 1957.
Counts 59-65 charged Diane Boss and Wesley Boss with money laundering in violation
of 18 U.S.C. § 1957. Counts 66-68 charged Buffin with money laundering in violation of
18 U.S.C. § 1956(a)(1)(B)(I). Counts 69-71 charged Visser with money laundering in
violation of 18 U.S.C. § 1956(a)(1)(B)(I). Counts 72-76 charged Albrecht with money
laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(I). Counts 77-80 charged Flynn
with money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(I). Counts 81-82
charged Marcusse and Flynn with money laundering in violation of 18 U.S.C. §
1956(a)(1)(B)(I). Count 83 charged all defendants with criminal forfeiture of $10 million.
Defendants were arraigned and all entered pleas of not guilty.1 Trial began on
May 16, 2005. Three of the defendants -- Albrecht, Diane Boss, and Wesley Boss --
pleaded guilty during the trial.
The testimony at trial included that of an expert, Leonard Zawistowski, a Senior
1
Marcusse refused to respond to the court’s inquiry as to her plea. The court
thus entered a plea of not guilty on her behalf.
8
Special Investigator at the Federal Reserve in Washington, D.C. He testified that the
investment programs described in the Access sales literature and newsletters do not
exist and bore many “badges of fraud,” i.e., characteristics common to other fraudulent
investment schemes throughout the country. These include extremely high promised
rates of return, secrecy, the use of certain terminology describing banks without
identifying actual institutions, the representation that the program is recognized by
governmental regulatory bodies, and the claim that the investments are not widely
available to the public.
Testimony also included that of IRS Special Agent James Flink, who testified in
the government’s case-in-chief, as well as in rebuttal. Victims of the Access scheme
testified about their meetings with defendants and the losses they incurred as a result
of their investments in Access.
Defendants Marcusse and Flynn testified in their defense.
Buffin’s counsel reserved his opening statement until the close of the
government’s case in chief. During his opening, Buffin’s attorney stated that Buffin
would testify that he genuinely believed Access was a legitimate venture and that
Marcusse left him “holding the bag” when the scheme collapsed. Buffin’s attorney also
cross-examined Marcusse along these same lines. Ultimately, however, Buffin did not
take the stand.
9
The trial lasted almost five weeks. On June 14, 2005, the jury returned a guilty
verdict on all counts against the five remaining defendants.
D. Sentencing Proceedings
In October 2005, defendants received the following sentences:
Marcusse: 25 years imprisonment, 3 years supervised release, and restitution of
$12,651,244.00;
Besser: 20 years imprisonment, 3 years supervised release, and restitution of
$12,100,000.00;
Buffin: 15 years imprisonment, 3 years supervised release, and restitution of
$8,175,511.00; and
Flynn: 9 years imprisonment, 5 years supervised release, and restitution of
$11,700,000.00.2
Each of these sentences reflected a downward departure from the Federal
Sentencing Guidelines range.
Defendants, Marcusse, Besser, Buffin and Flynn, filed timely notices of appeal.
These appeals were consolidated for briefing and argument.
II.
A. Appointment of Counsel Over Besser’s Objection
The first issue we address is Besser’s argument that the district court erred when
it appointed counsel to represent him over his objection.
2
Although convicted by the jury, Visser has not appealed, and his sentence is not
part of the record before us.
10
This court reviews a district court’s denial of a defendant’s request to proceed
pro se for an abuse of discretion. Robards v. Rees, 789 F.2d 379, 384 (6th Cir. 1986).
The question of whether a defendant waived a constitutional right is reviewed de novo.
United States v. Ross, 245 F.3d 577, 583 (6th Cir. 2001) (citation omitted).
The Supreme Court has held that a criminal defendant has a constitutional right
to waive counsel and to represent himself. Faretta v. California, 422 U.S. 806, 819, 836
(1975). However, the right to counsel “may be waived only by voluntary and knowing
action.” Martin v. Rose, 744 F.2d 1245, 1251 (6th Cir. 1984) (citations omitted).
“Although waiver may be implied and not express, [t]he particular facts and
circumstances of each case including the background, experience and conduct of the
accused determine whether an intelligent waiver had been made.” Id. (internal
quotations and citation omitted).
Waiver of the right to counsel will not be “lightly presumed,” and a trial judge
must “‘indulge every reasonable presumption against waiver.’” Boyd v. Dutton, 405 U.S.
1, 3 (1972) (citation omitted).
The trial judge here did not err in concluding that Besser had not made a
knowing and unequivocal waiver of his right to counsel. Besser’s statements and
conduct on this issue are characterized, favorably, as inconsistent, and, not so
favorably, as nonsensical.
11
In his initial appearance before the magistrate judge, Besser stated that he did
not understand the nature of the charges, and he made cryptic statements apparently in
reference to the fact that his name appeared in all capital letters in the indictment.
Beyond stating additionally that he would agree to appear only in a “common law
venue,” Besser refused to answer the magistrate judge’s questions on the right to
counsel waiver. Concluding that he could not find a knowing waiver, the magistrate
judge stated that the court would appoint counsel for Besser.
At his arraignment two days later, Besser stated:
For the record I am presenting myself and do not need to be represented by a
unionized bar card member. And I will select counsel of my choice even though
he may not well be a bar card member. I will represent myself. It’s my Sixth
Amendment right to have counsel. I’m retaining those rights.
The magistrate judge’s continued efforts to explain to Besser the nature of his
Sixth Amendment rights and the need for a knowing waiver were met with similarly
inconsistent and nonsensical remarks.
Similar exchanges took place during the initial pretrial appearance and detention
hearing. While the attorney then present on Besser’s behalf stated to the court that he
“thought” Besser understood the hazards of proceeding pro se, the magistrate judge
noted that, under applicable law, such a waiver could not be presumed. At a
subsequent status conference on the issue of counsel, the magistrate judge again
explained to Besser in painstaking detail the reasons the court could not allow him to
12
represent himself unless the court received a knowing and voluntary waiver of his right
to counsel. Besser responded first by stating that he did not understand “the nature
and the cause of this action.” He then digressed into various statements concerning
having been kidnapped in Mexico and the court’s lack of jurisdiction over him. The
court again ruled that it could not find that Besser had knowingly waived his Sixth
Amendment right to counsel.
Given this record, the district court did not err in concluding that Besser had not
knowingly waived his right to counsel, and it did not err in denying his request to
represent himself.
B. Denial of Motion to Withdraw by Besser’s Counsel
Besser next argues that the district court erred when it denied the motion by his
appointed counsel to withdraw from that representation.
We review the district court’s denial of defense counsel’s motion to withdraw for
abuse of discretion. United States v. Mack, 258 F.3d 548, 556 (6th Cir. 2001) (citation
omitted).
When reviewing a district court’s denial of a motion to withdraw or substitute
counsel, the court considers: “(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
13
preventing an adequate defense, and (4) the balancing of these factors with the public’s
interest in the prompt and efficient administration of justice.” Id. (citations omitted).
On March 9, 2005, Besser’s court-appointed attorney, Michael Dunn, filed a
motion to withdraw or to be re-designated as standby counsel. As grounds, Dunn cited
Besser’s refusal to communicate and to assist in preparation for trial.
The court heard this motion on March 14, 2005, during a hearing on a motion for
continuance filed by other defendants. Dunn stated that Besser would not
communicate with him, although he had visited Besser numerous times. In turn, Besser
stated that he did not want Dunn to represent him and that he wanted to represent
himself, but he then said that he did not understand the nature of the proceedings
against him and that he had been “kidnapped out of Mexico on drug charges.” The
district court judge stated that Dunn’s motion to withdraw would be denied.
This ruling was not an abuse of discretion. The only conflict between Besser and
counsel was one created by Besser himself. As the evidence discussed above on the
Sixth Amendment issue demonstrates, the court rightly concluded that Besser had not
knowingly waived his right to counsel and, notwithstanding his refusal to communicate
with Dunn, the court had no indication that Besser would behave differently with any
other appointed counsel.
As a sister circuit has stated, a “defendant, by unreasonable silence or
14
intentional lack of cooperation, cannot thwart the law as to appointment of counsel.”
Thomas v. Wainwright, 767 F.2d 738, 742 (11th Cir. 1985).
Given the nature of Besser’s conduct and the posture of the case before it, the
district court did not err in denying Dunn’s motion to withdraw.
C. The Sufficiency of the Evidence
When “‘the sufficiency of the evidence is challenged on appeal, the standard of
review is whether, after viewing the evidence in the light most favorable to the
prosecution, any rational trier of fact could have found the essential elements of the
crime.’” United States v. Clay, 346 F.3d 173, 176 (6th Cir. 2003) (citation omitted).
“‘[T]his court may conclude a conviction is supported by sufficient evidence even
though the circumstantial evidence does not remove every reasonable hypothesis
except that of guilt.’” Id. (citation omitted).
A defendant challenging the sufficiency of the evidence thus “bears a very heavy
burden.” United States v. Prince, 214 F.3d 740, 746 (6th Cir. 2000) (internal quotations
and citation omitted).
1. The Offenses of Conviction
The essential elements of mail fraud under 18 U.S.C. § 1341 are (1) a scheme to
defraud and (2) the mailing of material for the purpose of executing the scheme. United
States v. Stull, 743 F.2d 439, 441-42 (6th Cir. 1984) (citation omitted). “In order to
15
sustain a conviction, the government must also prove a defendant’s intent to defraud.”
Id. (citation omitted).
“Direct evidence of fraudulent intent is not necessary; where sufficient
circumstantial evidence is presented, the jury may properly infer that the defendant was
culpably involved from his conduct, statements, and role in the overall operation.” Id.
(citations omitted).
A scheme to defraud includes “any plan or course of action by which someone
uses false, deceptive, or fraudulent pretenses, representations, or promises to deprive
someone else of money.” United States v. Jamieson, 427 F.3d 394, 402 (6th Cir. 2005)
(citation omitted).
To justify a conspiracy to commit mail fraud conviction under 18 U.S.C. § 371,
the evidence must show that the defendant “‘knowingly and willfully joined in an
agreement with at least one other person to commit an act of mail fraud and that there
was at least one overt act in furtherance of the agreement.’” Id. (citation omitted).
Further, to establish a conspiracy, “the government need not show an explicit
agreement, but merely that the defendant knew the object of the conspiracy and
voluntarily associated himself with it to further its objectives.” Id. (internal quotations
and citation omitted).
The elements of the charged money laundering offenses are:
16
(1) use of funds that are proceeds of unlawful activity; (2) knowledge that the
funds are proceeds of unlawful activity; and (3) conduct or attempt to conduct a
financial transaction, knowing that the transaction is designed in whole or in part
to disguise the nature, location, source, ownership or control of the proceeds.
United States v. Prince, 214 F.3d 740, 747 (6th Cir. 2000) (citation omitted).
All four appealing defendants argue that there was insufficient evidence to
sustain their convictions. Each defendant will be discussed in turn.
2. Marcusse
The evidence adduced at trial was more than sufficient to sustain the jury’s
conviction of Marcusse on all counts. The evidence contained in the voluminous trial
record was aptly recounted by the district court in its opinion denying Marcusse’s
motion for judgment of acquittal. The following is a highly compressed summary.
The evidence introduced during the nearly five weeks of trial in this case
overwhelmingly showed that Marcusse created, managed, and directed the activities of
Access with the intent to defraud investors out of their money. Marcusse made false
representations to investors, both directly and through numerous written publications,
regarding the success, safety, and legality of the Access financial investments and the
church chapter accounts that investors were told to establish for the receipt of their
“profits.”
The evidence showed that neither Marcusse nor any of the other defendants
ever actually invested the victims’ money. Rather, in keeping with a classic Ponzi
17
scheme, investors were paid “returns” on their principal from money invested by
subsequent victims, and monies not so paid were diverted by defendants for their own
personal use. See In re Mark Benskin & Co., Inc., Nos. 94-5421, 94-5422, 1995 WL
381741, at *5 (6th Cir. June 26, 1995) (intent to defraud may be reasonably inferred
from nature of Ponzi scheme itself) (citing Conroy v. Shott, 363 F.2d 90, 92 (6th Cir.
1966)).
Marcusse’s claim of a good faith belief in the promises made to investors is
belied by the evidence. Despite representations that investors’ principal was
“guaranteed,” she knew that those monies were not kept in safe accounts and were not
invested in legitimate markets. Indeed, the evidence showed that the markets
described in Access’s literature did not even exist. When the government’s
investigation began, Marcusse threatened investors against cooperating with the
authorities and, ironically, accused the government of a conspiracy to take investors’
money. She further invoked the “nondisclosure” agreements which investors were
required to sign before learning details of the “investments.” Indeed, the jury could
reasonably have inferred that those agreements were a prophylactic attempt by
defendants to prevent their fraudulent scheme from coming to the attention of
accountants or lawyers who might otherwise have been consulted by would-be
investors, and who no doubt would have recognized the true nature of the operation.
18
Further, faced with a grand jury subpoena for Access’s records, Marcusse fled
with the records, which were never found. See United States v. Jamieson, 427 F.3d
394, 403 (6th Cir. 2005) (evidence that defendant ordered destruction of files after
learning of federal investigation supports finding of knowledge of and participation in
conspiracy to defraud).
The same evidence supports the finding that Marcusse diverted for her own
purposes funds which she knew to be proceeds from this unlawful scheme. Incredibly,
in a brief before this court, she states: “The fact that defendants used some of the
money invested to reward themselves is also irrelevant to the various charges of mail
fraud and money laundering.” Such an affront is consistent with Marcusse’s asserted
view that the federal courts lack jurisdiction over her, that the tax laws are invalid, and
that she can conduct herself in any manner she pleases. The jury no doubt perceived
this attitude from Marcusse’s trial testimony and concluded that, contrary to her
assertions of good faith, Marcusse had merely “thumbed her nose” at the law.
3. Besser
Besser argues that the evidence was insufficient to sustain his conviction
because it did not show that he participated in many of the overt acts in furtherance of
the mail fraud and the conspiracy and that, while he was a signatory on several bank
accounts used in the fraudulent scheme, he did not know that the proceeds were from
19
unlawful activity.
Besser’s arguments are not well taken. As to mail fraud, the “government is not
required to prove that each defendant was a mastermind of the scheme to defraud;
proof of a defendant’s willful participation in a scheme with knowledge of its fraudulent
elements is sufficient.” United States v. Stull, 743 F.2d 439, 442 (6th Cir. 1984)
(citations omitted). “Nor is a defendant exonerated by the fact that he may have
participated in the scheme to a lesser extent than others.” Id. (citations omitted).
The evidence showed that Besser had direct involvement in many of the
activities of Access directed at securing and processing funds from investors. He was a
joint signatory with other defendants in some of the church-named accounts used to
shuffle investors’ funds; he prepared and signed many of the forms sent to investors,
which listed him as “Trustee” and gave his phone number; and he signed some of the
fake “profit” checks sent to early investors in the scheme. Further, Besser dealt directly
with some of the investors, who testified to statements and promises he made to them.
Further, Besser withdrew approximately $1 million from investors’ funds, wiring
some of it to Nigeria. He filed a false affidavit in an action brought by authorities in
Texas in relation to another fraudulent investment scheme in which he claimed that
seized funds were his personal assets when, in fact, they were monies obtained from
Access investors. Besser also was notified by one bank that one of the church-named
20
accounts appeared to be a fraudulent tax shelter. That bank later closed the account.
Finally, when faced with the grand jury subpoena, Besser fled to Mexico.
This and other evidence was sufficient to support the jury’s conviction of Besser
on all counts charged.
4. Buffin
Buffin’s claim for lack of sufficiency of evidence is similarly without merit.
The evidence showed that Buffin was a sales manager for a large segment of
the Access investor pool. He personally told many investors that the “profits” from their
investments were tax-free because Access was a church, and that their principal was
guaranteed. Buffin embezzled thousands of dollars of new investor funds, reporting
none of that money on his income taxes. Buffin acknowledged to a FBI agent that he
realized in 2001 that Access “went bad” but that Marcusse was good at “dangling a
carrot” in front of you. Notwithstanding this realization, Buffin continued to receive new
investment funds and convert them to his and his co-defendants’ use.
Like Besser, Buffin too received a letter from a bank closing his account for
suspicious activity. Nonetheless, he opened a new account and continued shuffling
investors’ funds.
Buffin also participated in the two-day seminar in May 2001, at which defendants
falsely reassured investors that Access was earning large profits and that their principal
21
was safe.
Taken together, the evidence was thus sufficient for the jury to find Buffin guilty
beyond a reasonable doubt on all counts.
5. Flynn
Flynn argues that he lacked the specific intent to defraud the investors in Access
and that he himself was a victim of Marcusse’s fraud. The evidence belies this
assertion.
As accurately recounted in the government’s brief, the evidence showed that
Flynn actively solicited investors for Access; he falsely told them that he had heavily
invested in Access and had been highly successful; he set up some of the “church”
accounts; he embezzled investor funds for his own use and did not place them in
Access accounts; and he wired thousands of dollars to Nigeria, telling the agent that he
was a pastor doing missionary work there. Flynn too failed to file any tax returns during
the years he was involved with Access.
The jury thus had before it sufficient evidence on which to find Flynn guilty on all
counts.
D. The Testimony of IRS Special Agent James Flink
Buffin and Flynn assert as error on appeal the district court’s rulings allowing IRS
Special Agent James Flink to testify in rebuttal.
22
A trial judge’s determinations regarding the order of proof and scope of rebuttal
testimony are reviewed for abuse of discretion. Benedict v. United States, 822 F.2d
1426, 1428 (6th Cir. 1987) (citation omitted). See also United States v. Caraway, 411
F.3d 679, 683 (6th Cir. 2005).
“Evidence introduced on rebuttal serves to rebut new evidence or new theories
proffered in the defendant’s case-in-chief, and is not limited by the fact that the plaintiff
could have introduced the proffered evidence in his case-in-chief.” Id. (internal
quotations and citations omitted).
Buffin complains that Flink was allowed to testify about theories that were raised
in his counsel’s opening statement but about which Buffin never testified due to his
change in heart about taking the stand.
After the prosecution had rested, Buffin’s attorney gave his opening statement
during which he explained to the jury what Buffin would “tell them” when he took the
stand as his “main witness.” Counsel stated that Buffin would tell the jury that he had
truly believed in Marcusse and that Access was “genuine,” and that Marcusse had
made him “the fall guy.” Buffin’s attorney thereafter cross-examined Marcusse,
conveying the same theme. As it turned out, however, Buffin did not testify.
The government called Agent Flink in rebuttal. The court allowed some of Flink’s
testimony but also sustained some of defendants’ objections thereto. Through Flink,
23
the government introduced pleadings filed by Buffin expressing anti-government and
anti-tax views to rebut the assertion that he had held a good faith belief in the legitimacy
of Access’s activities. The court’s ruling allowing such testimony was not an abuse of
discretion. See United States v. Goodapple, 958 F.2d 1402, 1407 (7th Cir. 1992) (not
error for government to introduce in rebuttal evidence refuting defense raised in
defendant’s opening statement).
The court likewise did not abuse its discretion in allowing Flink to testify in
rebuttal to Flynn’s evidence. Flynn took the stand and testified on his behalf, asserting
various justifications for his involvement with Marcusse and Access and his use of
funds procured through the Access scheme. In rebuttal, Agent Flink testified how he
had traced various transactions made by Flynn using Access funds and how that
evidence showed that Flynn had used Access funds for his own benefit. This is clearly
proper rebuttal, and the court did not err in permitting this testimony.
E. Exclusion of Testimony as to Marcusse
A trial court’s ruling excluding evidence is reviewed for an abuse of discretion.
United States v. Stull, 743 F.2d 439, 445 (6th Cir. 1984).
Marcusse argues that the district court improperly denied her request to exclude
testimony by one of the victims of the Access scheme. This testimony, Marcusse
argues, constituted improper hearsay because the victim repeated statements made by
24
the Bosses, Marcusse’s co-defendants, in which they placed blame for the fraud on
Marcusse. In fact, however, Marcusse’s counsel objected before the witness gave the
anticipated testimony. Recognizing the direction in which the examination was headed,
the trial judge sustained counsel’s objection.
Thus, the court’s ruling on this issue did not prejudice Marcusse and was not an
abuse of discretion.
F. Marcusse’s Request for Subpoena Expenses
Rule 17(b) of the Federal Rules of Criminal Procedure provides that the court
shall order that a subpoena issue for service on a witness sought to be called by an
indigent defendant upon a satisfactory showing that the witness’s testimony is
necessary to an adequate defense. See Fed. R. Crim. P. 17(b).
In making its determination of whether or not issuance of a subpoena is
warranted, “the district court is vested with wide discretion.” United States v. Moore,
917 F.2d 215, 230 (6th Cir. 1990) (citation omitted). A reviewing court “should not
reverse unless the exceptional circumstances of the case indicate that defendant’s right
to a complete, fair and adequate trial is jeopardized.” Id. (internal quotations and
citation omitted).
The showing that a witness is “necessary” to a defendant’s case is not met by
general statements of need lacking in particular facts concerning the substance of the
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witness’s proposed testimony. United States v. Rigdon, 459 F.2d 379, 380 (6th Cir.
1972). Thus, the mere allegation that a witness is necessary for “alibi as well as
impeachment purposes” is insufficient. Id. (citation omitted).
On May 19, 2005, after trial began, Marcusse filed a request for payment of
witness fees for thirty individuals, but without explanation as to their necessity. She
subsequently filed an amended request, adding contact information but again providing
no facts regarding the witnesses’ proposed testimony. These lists included such
individuals as Attorney General John Ashcroft, Federal Reserve Chairman Alan
Greenspan, and other federal officials. The court denied Marcusse’s request.
Subsequently, Marcusse submitted another request, this time with explanations
of the proposed testimony. The district court granted in part and denied in part this
request.
On appeal, Marcusse challenges the denial of her subpoena request only as to
three people: Dr. Reede Hubert, Ed Terlesky, and Richard Williams. However, the
court correctly concluded that, inasmuch as these individuals were involved in matters
collateral to the Access scheme at issue in the case, their testimony was not necessary
to Marcusse’s defense. The testimony of Williams, who actually ultimately did testify,
bore this out, as the government accurately explains in its brief.
The district court thus did not abuse its discretion in denying Marcusse’s request
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for payment of fees as to these individuals.
G. The District Court’s Sentencing Determinations
This court reviews the district court’s sentencing determination under an abuse-
of-discretion standard. Gall v. United States, 128 S. Ct. 586, 597 (2007). We “first
ensure that the district court committed no significant procedural error,” and we then
consider the substantive reasonableness of the sentence imposed. Id.
To review for procedural error, this court examines the sentencing transcript to
ensure that the sentencing judge adequately considered the relevant factors set forth in
18 U.S.C. § 3553(a) and that he clearly stated his reasons for imposing the chosen
sentence. United States v. Thomas, 498 F.3d 336, 340 (6th Cir. 2007) (internal
quotations and citation omitted).
Section 3553(a) provides, in relevant part:
The court shall impose a sentence sufficient, but not greater than necessary to
comply with the purposes set forth in paragraph (2).... [and] shall consider –
(1) the nature and circumstances of the offense and the history and
characteristics of the defendant;
(2) the need for the sentence imposed –
(A) to reflect the seriousness of the offense, to promote respect for the
law, and to provide just punishment for the offense;
(B) to afford adequate deterrence to criminal conduct;
(C) to protect the public from further crimes of the defendant; and
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(D) to provide the defendant with needed educational or vocational
training, medical care, or other correctional treatment in the most effective
manner;
(3) the kinds of sentences available;
(4) the kinds of sentence and the sentencing range established for --
(A) the applicable category of offense committed by the applicable
category of defendant as set forth in the guidelines – [and]
....
(6) the need to avoid unwarranted sentence disparities among defendants with
similar records who have been found guilty of similar conduct . . . .
18 U.S.C. § 3553(a).
“A sentence may be considered substantively unreasonable when the district
court selects the sentence arbitrarily, bases the sentence on impermissible factors, fails
to consider pertinent § 3553(a) factors or gives an unreasonable amount of weight to
any pertinent factor.” United States v. Keller, 498 F.3d 316, 322 (6th Cir. 2007)
(internal quotations and citation omitted).
Finally, the Supreme Court has recognized that the sentencing judge “is in a
superior position to find facts and judge their import under § 3553(a) in the individual
case.” Gall, 128 S. Ct. at 597 (internal quotations and citation omitted).
When a defendant’s challenge is to the amount of loss under the sentencing
guidelines, this court reviews the district court’s calculation for clear error. United
States v. Sosebee, 419 F.3d 451, 455 (6th Cir. 2005) (citation omitted).
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Further, the district court’s interpretation of the United States Sentencing
Guidelines is reviewed de novo. United States v. Kosinski, 480 F.3d 769, 774 (6th Cir.
2007).
Defendants Marcusse, Besser, and Buffin appeal various aspects of their
sentences. Besser argues that the district court improperly found him accountable for
the loss caused to all victims. As outlined above, however, Besser actively participated
in the fraudulent activities of Access. As this court has held, it is clear under the
sentencing guidelines that “a conspirator is liable for the acts and omissions of his co-
conspirators that are reasonably foreseeable and in furtherance of the conspiracy.” Id.
(citation omitted). The total loss incurred by the victims of the conspiracy is thus
properly attributable to Besser. Id.
Likewise, Besser’s contention that the court erred in finding that he was an
“organizer or leader” is not well taken. As noted, Besser was a signatory on many of
the Access accounts, appeared personally at sales meetings where he was identified
as Marcusse’s “partner,” and dealt personally with large investors.
Besser’s objection that the scheme did not involve “sophisticated means” is
likewise belied by the evidence of the complex, carefully planned scheme involving
numerous bank accounts and financial transactions.
Finally, Besser’s objection that his sentence is unreasonable is without merit.
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The district court found Besser’s guideline level to be 43, which calls for a life sentence.
The court, noting Besser’s ill health and age and the need for proportionality with the
sentences imposed on his co-defendants, instead varied downward and sentenced him
to 20 years imprisonment.
Marcusse too argues that her sentence was unreasonable. Again, however, the
guideline calculation called for a sentence of life imprisonment, but the district court
sentenced Marcusse to 25 years imprisonment. The court reached this determination
after reviewing the pertinent factors under § 3553(a) and noting particular
characteristics of Marcusse’s situation. Its determination was not unreasonable.
Finally, Buffin challenges his sentence. He argues that he should have been
held responsible only for the money he actually received from the fraudulent scheme
rather than for the total loss incurred by the victim investors. Such an argument has
been rejected by this court. See United States v. Wolfe, 71 F.3d 611, 617 (6th Cir.
1995).
The record shows that the district court adequately calculated the loss
attributable to Buffin based on the time period during which he was involved in the
scheme. The court also correctly determined that Buffin was a “leader” based on his
role in the activities of Access. On the basis that Buffin was not as culpable as
Marcusse and Besser, however, the district court sentenced him to 15 years
30
imprisonment, substantially below the guideline range of 324 to 405 months. This
sentence clearly withstands “reasonableness” review.
III.
For the foregoing reasons, we affirm the judgment of the district court.
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