Today's
squib focuses mostly on a 94-page opinion, issued 17 months after oral
argument, in a securities-fraud case, but also includes a short nod to an issue
of Fourth Amendment standing decided in a § 1983 case.
1. United
States v. Lloyd et al., Nos. 12-50499, -50500, -50509, -50514, -50526, and
-50566 (Rosenthal (S.D. Tex.) with Berzon and Clifton)) --- The Ninth Circuit
affirmed the sentence imposed following their guilty pleas on the manager of a
telemarketing "boiler rooms" but vacated the conviction of the
other. The Ninth Circuit also addressed
appeals brought by three employees who went to trial -- it vacated the
conviction of one employee but affirmed the conviction of a second; the third
employee who went to trial did not properly challenge his conviction on
appeal. Of the two employees whose
convictions survived, the court vacated the sentence on one and affirmed the
sentence on the other. The securities
fraud revolved around raising money for various filmmakers; none of the films
that were actually made turned a profit, and all of the unsophisticated
investors lost their money.
The
fraud scheme took place in two states, California and Florida, using scripts
and resources provided by the mastermind of the fraud scheme (who committed
suicide shortly after the indictments were handed down). The court held that the district court erred
in this case by attributing to the manager of the Florida boiler room the
solicitation and sales activity of the California boiler room, because the
evidence showed that they were managed independently and the two managers did
not share information, resources, or profits.
Thus the district court did not correctly compute the Florida manager's
loss amount and restitution, and so he had to be resentenced. As to the manager of the California scheme,
the court found his sentence to be procedurally and substantively reasonable.
The
trial judge properly allowed the victims to testify about their financial
situations and the impact of losing their investments. This testimony was relevant to proving how
the fraud scheme was perpetrated and not overly prejudicial.
Another
boiler-room manager was allowed to testify as a layperson about management,
activity, and strategy. His testimony
was based on "statements he heard from unidentified telemarketers and
investors, well beyond his own personal experience," and thus lacked
proper foundation for lay expert testimony under Rule 701, and was not
admissible hearsay.
The
trial judge improperly admitted evidence of one defendant's subsequent
employment at another telemarketing operation that also proved to be
fraudulent, because that testimony did not relate to any of the permissible
purposes under Rule 404(b).
The
trial judge properly admitted testimony from another employee of the California
boiler room about what they would say to potential investors in order to get
them to invest in the films. This was
admissible hearsay from a coconspirator.
An
email about one of the defendants sent by another manager at the California
boiler room was inadmissible hearsay.
The
trial judge properly excluded one defendant's testimony about his family
situation, because it was not relevant to proving (or disproving) the fraud
scheme and was overly prejudicial.
Excluding this testimony did not violate the defendant's right to
present a defense.
The
jury instructions were not faulty because they failed to define "reckless
disregard."
As
to one employee, the court found overwhelming evidence of guilt, and thus found
the evidentiary errors harmless. As to
the other, the court did not find overwhelming evidence of guilt, and thus
vacated his conviction in light of the cumulative evidentiary error. But as to that defendant, the court found the
evidence sufficient to sustain the conviction, and so ruled that he could be
retried without creating a double-jeopardy problem.
As
to the employee whose conviction was affirmed, the court held that the
sentencing judge properly applied a vulnerable-victim enhancement but that the
record was unclear whether his criminal-history score was correctly calculated. Thus the court vacated and remanded for
resentencing.
With
respect to the remaining employee, the court held that the amount of loss and
victim-related adjustments under both Chapters 2 and 3 were properly applied,
and affirmed the sentence and the restitution award.
Congratulations
to Deputy Federal Public Defender Kathryn Young of the Central District of
California, whose client's conviction was vacated.
The
opinion is here:
2. Lyall
v. City of Los Angeles, No. 13-56122 (Bybee with Bea and Foote (W.D. La.))
--- The Ninth Circuit reversed a grant of summary judgment in favor of the City
of Los Angeles and two of its police officers in a civil-rights action under 42
U.S.C. § 1983 in which two organizers of a concert sued for a violation of
their Fourth Amendment rights when the police entered the concert venue without
a warrant and ordered the organizers to submit to a field lineup relating to
the investigation of some shoplifting at a nearby convenience store. Under United
States v. Jones, 132 S. Ct. 945 (2012), the organizers had standing to
challenge the warrantless entry into the concert venue because they had leased
the space and thus were the "owners" of the property onto which the
police had trespassed.
The
opinion is here:
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