Filed: Jun. 10, 2004
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit 6-10-2004 USA v. Rennert Precedential or Non-Precedential: Precedential Docket No. 03-1511 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "USA v. Rennert" (2004). 2004 Decisions. Paper 561. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/561 This decision is brought to you for free and open access by the Opinions of the United States C
Summary: Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit 6-10-2004 USA v. Rennert Precedential or Non-Precedential: Precedential Docket No. 03-1511 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "USA v. Rennert" (2004). 2004 Decisions. Paper 561. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/561 This decision is brought to you for free and open access by the Opinions of the United States Co..
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Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
6-10-2004
USA v. Rennert
Precedential or Non-Precedential: Precedential
Docket No. 03-1511
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004
Recommended Citation
"USA v. Rennert" (2004). 2004 Decisions. Paper 561.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/561
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PRECEDENTIAL (D.C. Crim. No. 96-cr-00051)
District Judge: Hon. Clarence C.
UNITED STATES COURT OF Newcomer
APPEALS FOR THE THIRD CIRCUIT
Argued December 5, 2003
NO. 03-1511
Before: SLOVITER, ALITO, Circuit
Judges and OBERDORFER * , District
UNITED STATES OF AMERICA Judge
v. (Filed: June 10, 2004)
PHILIP ANDRE RENNERT,
Appellant James H. Feldman, Jr. (Argued)
Law Offices of Alan Ellis
Ardmore, PA 19003-2276
NO. 03-1518
Attorney for Appellant,
Philip Andre Rennert
UNITED STATES OF AMERICA
Peter Goldberger
v. Law Office of Peter Goldberger
Ardmore, PA 19003-2276
GEORGE RAYMOND JENSEN,
Appellant Attorney for Appellant,
George Raymond Jensen
NO. 03-1519 Christopher D. Warren (Argued)
Philadelphia, PA 19103
UNITED STATES OF AMERICA Attorney for Appellant,
Michael Lewis Miller
v.
*
MICHAEL LEWIS MILLER, Hon. Louis F. Oberdorfer, United States
Appellant District Court for the District of
Columbia, sitting by designation.
On Appeal from the United States
District Court for the
Eastern District of Pennsylvania
Patrick L. Meehan In essence, Teale represented the
United States Attorney worthless leased stocks as valuable assets
Laurie Magid that could be liquidated to pay claims
Deputy United States Attorney pursuant to reinsurance contracts entered
for Policy and Appeals into with World Life and Health Insurance
Robert A. Zauzmer Company (“World Life”), a Pennsylvania
Assistant United States Attorney insurance company that was already in
Senior Appellate Counsel financial difficulty. When World Life
Andrea G. Foulkes(Argued) attempted to liquidate these assets to pay
Assistant United States Attorney its outstanding medical reinsurance claims,
Office of United States Attorney the stocks were found to be worthless.
Philadelphia, PA 19106
World Life became insolvent at
some point during or before 1988, but did
Attorneys for Appellee
not reveal its financial difficulty to
regulators or to its insureds. In 1989 and
1990, World Life issued four group
OPINION OF THE COURT
medical policies. Teale entered into
contracts reinsuring World Life’s policies
SLOVITER, Circuit Judge.
from November 1989 to November 1990.
I. Pursuant to these agreements, Teale
assumed 100 percent of the liability
Appellants Michael Miller and
associated with World Life’s four group
Philip Rennert were convicted by a jury of
medical insurance policies in exchange for
conspiracy, wire fraud, and securities
receipt of 92 percent of the premiums paid
fraud; Appellant George Jensen was
by World Life’s insureds on those policies.
convicted by a jury of securities fraud.
Appellants supplied Teale with stocks
Their convictions resulted from their
from offshore companies that Teale could
involvement in a complex scheme under
list as putatively valuable collateral
which they leased the worthless stocks of
backing the company, though the stocks
several public companies to the Teale
were essentially worthless. Yeaman, 194
Network (“Teale”), a fraudulent network
F.3d at 447.
of offshore and domestic companies. The
details of the operation of the Teale In 1990, Rennert created Forum
Network, through its principal Alan Teale, Rothmore to serve as an intermediary
are set forth in our earlier opinion in between Teale and the publicly traded
United States v. Yeaman, 194 F.3d 442 corporations that desired to lease their
(3d Cir. 1999), and we repeat only such stock to Teale. This arrangement created
details as are necessary to decide the issues the appearance of legitimacy in two ways.
before us in this appeal. First, Forum Rothmore helped the Teale
Network comply with Pennsylvania
2
reinsurance regulations that require Teale. Although Ecotech’s shares were
u n l i c e n s e d o f f s h o r e r e i n s u r a n ce virtually wo rthless, A ppellants
companies, such as Teale, to deposit in fraudulently over-valued Ecotech’s shares
escrow accounts collateral (in the form of on the company’s financial statements.
corporate stocks) equal to the liability Members of the conspiracy manipulated
associated with its reinsurance contacts. the market for Ecotech and other
Second, Forum Rothmore entered into corporations’ stock in order to maintain
“surplus contribution agreements” with the inflated trading prices.
Teale, which gave Teale the appearance of
Miller, a lawyer, was corporate
b e i n g b a c k e d b y in d e p e n d e n t
counsel for Forum Rothmore and a
stockholdings. Id.
shareholder in Ecotech. The Ecotech
Teale and Rennert first met and stock at issue was not tradeable and carried
discussed this fraudulent scheme in August a restrictive legend to that effect. Miller
1990 and executed the first of their surplus issued opinion letters stating that Forum
contribution agreements on September 1, Rothmore could remove that legend from
1990. Under the terms of these stock certificates so that it falsely appeared
agreements, public shell corporations that the stock could be freely traded and
leased their stock to Teale and authorized leased to Teale. The Government
the sale of the stock, if necessary, to pay submitted evidence that Miller was paid
claims under insurance policies that Teale $130,208 for representing the company
had reinsured. Teale then listed these and $104,000 from leasing Ecotech stock
shares at inflated values on the financial to Teale.
statements presented to World Life. After
In 1991, the Pennsylvania Insurance
receiving insurance premiums from World
Department discovered W orld Life’s
Life, Teale paid monthly leasing fees to
insolvency and ordered its liquidation.
Forum Rothmore, which in turn split the
Because Teale had been paying insurance
fees with the stock providers. Id. The
claims with recently-received premiums
Teale Network was Forum Rothmore’s
and had no other significant assets to draw
sole client, and Forum Rothmore was the
upon, this liquidation deprived Teale of the
Teale Network’s only consistent source of
ability to pay further insurance claims.
assets.
World Life’s policyholders thus were
In particular, Forum Rothmore unable to receive insurance payments as
entered into surplus c ontribu tion needed.
agreements with Ecotech Corporation
Following World Life’s liquidation,
(“Ecotech”). Jensen was at various times
the Pennsylvania Life and H ealth
in control of and president of Ecotech. On
Insurance Guarantee Fund, a state fund
December 15, 1990, Jensen manipulated
through which Pennsylvania insurance
Ecotech’s stock price and then leased one
companies pay the outstanding liabilities
million dollars worth of Ecotech’s stock to
3
o f i n s o l v e n t c a r r ie r s , p r o v i d ed Court had erred in finding that there was
approximately $6.4 million for group no loss caused by the fraud, in failing to
medical reinsurance claims left unpaid as increase Miller’s offense level because he
a result of the fraud. had used special (legal) skills in
furtherance of the conspiracy, and in
II.
failing to increase all Appellants’ offense
Appellants were indicted on levels for causing a substantial effect on a
February 6, 1996 and were convicted by a financial institution.
jury on April 16, 1997. At the sentencing
In Miller, we rejected Miller’s
hearing held January 22, 1998, the District
argument that he acted “only as an
Court assigned each Appellant a one-point
attorney.” Instead, we held that Miller’s
upward departure for loss of confidence in
involvement went “beyond the role of
an important institution, but found no
legal representation” and could not “be
mon etary loss attributable to the
categorized as simple legal advice,”
Appellants because World Life was
especially given Miller’s ownership of
insolvent at the time it entered into
Ecotech stock and his letters regarding
reinsurance contracts with Teale. The
removal of restrictive legends. Miller, slip
District Court also rejected the application
op. at 6. In Rennert and Jensen, we also
of additional sentencing enhancements for
upheld Rennert and Jensen’s convictions
use of special skills and substantially
and affirmed the imposition of a one-point
jeopardizing a financial institution.
upward departure based on loss of
Appellants appealed their individual confidence to an important institution.
verdicts and sentencing calculations to this However, we remanded all three cases for
court in 1998 and we set out the full re-sentencing to consider 1) whether there
factual and procedural history of their was a causal connection between the
cases in prior unpublished opinions. See Appellants’ misrepresentations and the
United States v. Rennert, Nos. 98-1145 & fraud loss caused by Teale’s collection of
98-1101, slip op. (3d Cir. Oct. 15, 1999); premiums, and 2) in Miller’s case, whether
United States v. Jensen, Nos. 98-1148 & an enhancement would be appropriate for
98-1104, slip op. (3d Cir. Oct. 15, 1999); Miller’s use of special (legal) skills. With
and United States v. Miller, Nos. 98-1147 respect to fraud loss, we clarified that the
& 98-1103, slip op. (3d Cir. Oct. 15, fraud loss calculation should be based on
1999). Appellants challenged the District the dates of Appellants’ agreement to the
Court’s instructions to the jury, the conspiracy, rather than the dates of their
sufficiency of the evidence supporting misrepresentations. Also, in a related case,
their convictions, and the upward we suggested that the loss calculation
adjustment for loss of confidence in an might be based on the net gain to Teale or
important institution. The Government the balance of unpaid claims. See
cross-appealed, arguing that the District Yeaman, 194 F.3d at 458-59 (involving
4
another co-defendant in the conspiracy a representative from the Liquidations and
who is not a party to the instant appeal).1 Rehabilitation Section of the Pennsylvania
Department of Insurance and a general
On February 3, 2003, the District
counsel to a third-party administrator.
Court held a re-sentencing hearing for
They stated that, had their organizations
Miller, Jensen, and Rennert. Miller
known that Appellants’ assets were
attempted to present testimony and
worthless, they would have halted the flow
documents in support of his argument that
of premiums months earlier and forced
the scope of his involvement in the
World Life to obtain a solvent reinsurer.
conspiracy was less than that of his co-
conspirators and that the extent of the total On February 13, 2003, the District
loss caused by the fraud was not Court issued a sentencing opinion
foreseeable to him. In particular, Miller concluding that Miller, Rennert, and
attempted to contest the Government’s Jensen entered into an agreement
arguments that he was present at the conspiring to defraud World Life and its
August 1990 Teale-Rennert meeting, that policyholders no later than August 30,
he prepared opinion letters in support of 1990. The District Court held that the total
the conspiracy, that he received payments fraud loss caused by the Appellants was
for services as a stock provider, and that he approximately $3.2 million: the difference
falsified records bearing the date of between the total premiums paid to Teale
Ecotech’s merger with a gold mine to minus the claims paid by Teale to World
create additional stock shares for Teale. Life’s policyholders. The District Court
The District Court declined to permit further found that there was “a causal
Miller to submit additional evidence that connection between the misrepresentations
was not already presented at trial because of the Defendants and the continued
the issue was “subsumed” by the jury’s payment of premiums to World Life . . .
verdict and was therefore immaterial to and the Defendants.” App. at 12-13.
sentencing. See App. at 350-53 (finding Finally, the District Court increased
Miller’s factual allegations were “matters Miller’s sentence based on his use of
of defense for the trial, not for special skills and more than minimal
sentencing”). planning. The Appellants also received
upward departures for causing the loss of
On the issue of fraud loss causation,
confidence in an important institution (the
the Government presented two witnesses,
stock market). The District Court
sentenced Miller to 51 months, Rennert to
63 months, and Jensen to 30 months of
1
Yeaman again appealed to this court imprisonment.
in United States v. Yeaman, 248 F.3d 223
All three Appellants contest the
(3d Cir. 2001), and we remanded for re-
District Court’s factual finding of a causal
sentencing. He was re-sentenced on
connection between their
February 5, 2003 and did not appeal.
5
misrepresentations and the fraud loss to premiums to Teale Network if it had
the victims of $3.2 million. Miller known Appellants were over-valuing
challenges the District Court’s order stock, Rennert only should have been held
barring him from submitting additional liable for the approximately $1.3 million in
testimony and documents to demonstrate losses that occurred on or after December
the “limited” scope of his involvement in 29, 1990, rather than counting losses
the conspiracy. We will affirm. beginning in September 1990. Because
this lower fraud loss amount would have
III.
reduced Rennert’s sentence, he argues that
The District Court had jurisdiction a remand for re-sentencing is required.
under 18 U.S.C. § 3231 and this court has
1. Rela tio n s h i p B e t w e en
jurisdiction over the appeal pursuant to 28
A p p e l l a n t s ’
U.S.C. § 1291 and 18 U.S.C. § 3742. We
Misrepresentation of Stock
review the District Court’s factual findings
Values and World Life’s
for clear error. United States v. Weaver,
Continued Paymen t of
267 F.3d 231, 235 (3d Cir. 2001). We
Premiums
review the District Court’s decision to
admit or deny evidence for abuse of Appellants contend that the victim,
discretion. United States v. Serafini, 233 World Life, did not rely on their
F.3d 758, 768 n.14 (3d Cir. 2000). misrepresentations of stock assets as
valua ble a n d t h e r e fo r e t h eir
A. Fraud Loss Causation
misrepresentations did not cause the fraud
Appellants assert two primary loss. Moreover, they contend that it was
challenges to the District Court’s finding World Life’s own obstruction of the
that their conspiracy caused approximately investigation by the Pennsylvania
$3.2 million in fraud loss. First, all Department of Insurance – not their
Appellants argue that the District Court misrepresentations – that prevented the
erroneously found that their Department from discovering the fraud
misrepresentations of stock values actually and immediately halting the flow of
caused Teale to continue receiving premiums to Teale. Appellants thus argue
premiums from World Life policyholders that the District Court committed clear
b y p r e v e n t in g t h e P e n n s yl v a n ia error. The Government responds that
Department of Insurance from discovering World Life and its policyholders paid
the fraud and halting the flow of Teale millions of dollars for reinsurance in
premiums. This is one of the issues we reliance on the Appellants’ fraudulent
directed the District Court to consider on representations that their stocks were
remand. Second, Rennert contends that valuable and redeemable as assets, as they
even if the District Court were correct that purported.
the Pennsylvania Department of Insurance
We have addressed the issue of
would have stopped the flow of insurance
6
fraud loss causation in connection with the policies had not been issued,
Teale conspiracy in Yeaman, where we th e em p lo ye rs w ho
stated, “[w]ithout the assets of the purchased the policies from
defendants and the resulting appearance of World Life would have
solvency, the most reasonable inference is obtained group medical
that World Life would have ceased paying coverage from another
premiums to Teale long before it source and all claims of the
eventually did.” Yeaman, 194 F.3d at 458. beneficiaries would have
We explained the causality analysis as been paid in full. In either
follows: event . . . there would have
been a causal nexus between
Teale could not have
the fraud and all unpaid
entered and remained in the
claims.
business of reinsuring
World Life but for its Id. at 459. In short, we found that the
f r a u d u l e n t most reasonable inference is that World
m i s r e p re s e n t a ti o n s. L i f e relie d on the A ppella nts ’
Although the District Court misrepresentations about the value of their
made no finding on the issue stock assets when it paid Teale additional
[before], the record would premiums.
also appear to us to support
On remand, the District Court
the proposition that World
concluded that there was “a causal
Life was not capable of
connection between the misrepresentations
insuring any of the four
of the Defendants and the continued
group medical policies
payment of premiums to World Life, and
without having received a
. . . Teale and the Defendants.” App. at
commitment for 100%
12, 34. In particular, the District Court
reinsurance. It follows that
made the following findings:
if the Teale fraudulent
reinsurance contracts had -Had the true value of the
not been available, World Defendants’ stocks been
Life would either have known, at the very least, the
secured other reinsurance or Pennsylvania Department of
would not have issued the Insurance would have
group policies involved. If stopped the payment of
reinsurance from a solvent premiums to the Teale
reinsurer had been obtained, Network.
all claims under the policies
would have been paid to the
reinsurer; if the group -In addition, because World
7
Life was insolvent, Appellants next challenge the
had the reinsurance sufficiency of the evidence supporting the
contracts been District Court’s finding that the flow of
termin ated, the insurance premiums would have been
company would have halted but for their misrepresentations. At
been liquidated much the Appellants’ re-sentencing hearing, two
sooner than it was, Government witnesses testified that but for
and the policyholders Appellants’ misrepresentations about the
would have never value of the stock assets Teale claimed as
made those premium collateral, World Life would not have
payments at all. continued paying its policyholders’
premiums to Teale – that is, the
App. at 13, 35.
Department of Insurance or various
Although Appellants argue that the policyholders would have halted the flow
District Court’s findings do not answer the of premiums if they had known the true
question of whether their value of Appellants’ stocks. One witness,
misrepresentations caused the fraud loss, it the Director of Liquidations and
is apparent that the Department of Rehabilitation for the Pennsylvania
Insurance did not intercede because it did Department of Insurance, testified that the
not know “the true value of the Department could have halted the flow of
[Appellants’] stocks.” App. at 13. That insurance payments had it known that
lack of knowledge was the result of Appellants’ assets were worthless.3
Appellants’ misrepresentations of the
value of those stocks. This, in turn, caused
the Department of Insurance to permit because their reinsurance contract did not
World Life’s continued operation and provide for termination based on Teale’s
caused World Life to continue providing insolvency. We do not accept this
Teale insurance premiums in reliance on argument. If Teale were insolvent, it no
A p p e l l a n t s ’ m i s r e p re s e n t a ti o n s. longer could meet its contractual
Appellants’ attempt to sever the obligations to provide reinsurance to
connection between their World Life. Because Appellants have
misrepresentations and the Department of identified no contract provision requiring
Insurance’s delayed intervention is World Life to continue providing
unpersuasive.2 premiums after Teale has materially
breached their contract, we have no reason
to assume that World Life would be bound
to continue honoring a contract that Teale
2
Ap pella nts suggest that Teale’s had breached.
insolvency would not have provided
3
World Life with automatic grounds to Appellants emphasize that the
terminate its relationship with Teale Insurance Director stated that the
8
B e c a u s e A p p e l l a n t s f raud ulentl y testified that he recommended that World
misrepresented their assets’ value and Life partner with Teale based, in part, on
made it appear that Teale was solvent, Appellants’ misrepresentations of the
however, the Department was not value of their assets based on the
authorized to intervene.4 manipulated market prices. The general
counsel analyzed the A ppella nts’
Similarly, the general counsel to a
fraudulent market valuations of their assets
third-p arty insura nce a dm inistrato r
and inferred that the Teale Network was a
legitimate, solvent business based on those
representations. He further testified that if
Department “could . . . have acted months he had known that the stocks backing
sooner . . . to stop the flow of premiums,” Teale were worthless, he would have
App. at 386-87, but did not state that it removed his company’s group policies and
would have done so. The District Court reinvested them with a solvent carrier.
did not clearly err in concluding that the
Department would have acted if it had We come then to Appellants’
known the true value of the assets argument that it was World Life’s failure
Appellants misrepresented, given its later to cooperate with the Pennsylvania
investigation and liquidation of World Department of Insurance – not Appellants’
Life. We also reject Appellants’ argument misrepresentations – that delayed the
that the Department could not have discovery of Teale’s fraud. But the fraud
stopped World Life from continuing to victim’s negligence or lack of diligence in
provide Teale with premiums “months uncovering the fraud is not a defense.
sooner” based on administrative hurdles to United States v. Coyle, 63 F.3d 1239, 1244
the investigatory and liquidation processes. (3d Cir. 1995) (“The negligence of the
The District Court did not err in crediting victim in failing to discover a fraudulent
the Director’s statement that it could have scheme is not a defense to criminal
mobilized its administration to act quickly. conduct.”) (citations omitted); see also
United States v. Bennett, 9 F. Supp. 2d
4
Appellants suggest that the 513, 523 (E.D. Pa. 1998) (“Taking
Department of Insurance did not begin advantage of a victim’s self-interest does
investigating World Life until January not mitigate the seriousness of fraudulent
1 9 9 1 a n d t h er e f o r e Ap pellan ts’ conduct.”) (quotations and citations
misrepresentations had no effect prior to omitted). Nor do the Appellants cite any
that date. This argument assumes that the case law suggesting that courts may not
Department would not have begun find fraud loss causation where the victim
investigating World Life if it were known has not immed iately assisted the
that its reinsurer, Teale, lacked collateral authorities in investigating the fraud.
assets as of 1990. This argument is
In addition, the Government
without support and is directly contrary to
properly notes that even assuming that
the Director’s testimony.
9
World Life could be held to be In his separate appeal, Miller
contributorily negligent, such an argument asserts that the District Court erroneously
ignores our prior finding that the fraud conflated the jury’s “general” conspiracy
victims also included Wo rld Life conviction with the court’s conclusion that
policyholders, wh o cou ld not be Miller should be held liable for all losses
reimbursed for their medical costs until the related to the conspiracy under the relevant
Commonwealth’s bail-out. Yeaman, 194 conduct provision of the United States
F.3d at 458. Nothing in the record Sentencing Guidelines, U.S.S.G. § 1B1.3.
suggests that the policyholders acted Miller contends that even if a defendant
negligently or that they should have been has been convicted of a conspiracy charge,
expected to be suspicious of the true value the trial court must make particularized
of its reinsurance agent’s assets. findings as to the scope of each
conspirator’s involvement in order to
In light of the evidence from the
increase the conspirator’s sentence under
trial as well as the re-sentencing hearing,
Section 1B1.3.
the District Court did not clearly err in
finding a causal connection between the Under the Sentencing Guidelines, a
Appellants’ misrepresentations and the defendant’s offense level is subject to
losses incurred by World Life and its increase depending on the amount of loss
policyholders. caused by the fraud. Section 1B1.3(a)
provides that the district court should
2. Rennert’s Sentence and the
adjust the specific offense level by taking
Beginning Date of the Fraud
into account all conduct relevant to the
Rennert also argues that the District offense. U.S.S.G. § 1B1.3(a). This
Court should have calculated the fraud loss includes “all reasonably foreseeable acts
for the period after December 1990 and omissions of others in furtherance of
because the Department of Insurance [a] jointly undertaken criminal activity.”
Director stated that had it known of the U.S.S.G. § 1B1.3(a)(1)(B).
true value of Appellants’ stocks in
Miller asserts that United States v.
December 1990, it would have halted the
Collado, 975 F.2d 985 (3d Cir. 1992),
flow of premiums. Rennert did not assert
requires that we remand this case in light
this alternative loss calculation during the
of the District Court’s lack of findings as
District Court’s sentencing hearing and,
to the precise scope and timing of his
thus, has waived the argument. See United
agreement to join the conspiracy. 5 In
States v. Bethancourt, 65 F.3d 1074, 1082
(3d Cir. 1995).
B. Miller’s Claim Regarding the Scope of 5
Miller also cites United States v.
His Involvement
Studley, 47 F.3d 569 (2d Cir. 1995).
1. Relevant Conduct However, Studley is not a binding
precedent on this court and we have made
10
Collado, we stated that the district court of the brothers’ involvement in the
must consider whether the loss resulting conspiracy or in each other’s transactions,
from the actions of co-conspirators was 1) but instead only adopted the findings of
“in furtherance of the . . . jointly- the presentence report in attributing to
undertaken . . . activity,” 2) within “the each of them the drug quantity from the
scope of the defendant’s agreements,” and conspiracy. Although we required
3) “reasonably foreseeable in connection individualized inquiry, we did not impose
with the criminal activity the defendant an immutable requirement that the district
agreed to undertake.” 975 F.3d at 995 court hold extensive hearings to make
(citing U.S.S.G. § 1B1.3, application note explicit, particularized findings as to the
1); see also United States v. Duliga, 204 exact date on which each defendant
F.3d 97, 100 (3d Cir. 2000). We held that committed to the conspiracy or the precise
the relevant conduct provision depends contours of each conspirator’s agreement.
upon each defendant’s role in the We instead employed a more flexible
conspiracy and stated that courts must approach. We remanded the case to the
conduct “a searching and individualized district court to determine when the
inquiry into the circumstances surrounding defendants had joined the larger
each defendant’s involvement in the conspiracy because the district court had
conspiracy” in order to “ensure that the made no finding on the issue and the
defendant’s sentence accurately reflects record was not clear on this issue.
his or her role” in the conspiracy. Collado,
Critically, however, we also
975 F.3d at 995. We added that district
affirmed the district court’s attribution to
courts also should consider other factors,
one brother the amounts the other brother
such as whether the defendant profited or
supplied to the conspiracy. We affirmed
assisted others in the conspiracy. Id. at
this finding based on our review of the
991-94. We further clarified that a
record, despite the district court’s lack of
conspiracy conviction does not obviate the
explicit findings on this issue. Because the
need for analysis under the relevant
record was clear on its face, the district
conduct provision. Id. at 993, 997.
court’s lack of particularized findings was
Collado dealt with the liability of not dispositive. We instead concluded that
two brothers involved in a larger drug the district court’s accomplice attribution
conspiracy. The district court had not conclusion between the brothers was
made any factual findings as to the scope supported by the record evidence of their
awareness of and assistance to each other
in drug transactions. See id. at 997.
clear that the resolution of such issues is
More recently, in Duliga, we
governed by this Court’s decision in
reaffirmed the proposition that even absent
Collado. United States v. Duliga, 204 F.3d
explicit findings on the precise scope of a
97, 101 n.1 (3d Cir. 2000). Accordingly,
defendant’s involvement, a district court’s
our analysis focuses on Collado.
11
decision may be affirmed if it is adequately see no reason to remand the case only to
supported by the trial court record. 204 have the district court reach the same
F.3d at 101 n.2. Although the district sentencing decision.” 204 F.3d at 101 n.2.
court in that case “did not necessarily
2. Evidentiary Issues
undertake a searching and individualized
inquiry before attributing the entire Miller also contends that the
amount of [fraud] loss . . . to Duliga,” we District Court abused its discretion by
affirmed without remanding because we denying his request to submit additional
were convinced that the attribution of the evidence that allegedly would have had a
fraud loss was “firmly supported by the direct bearing on the scope and timing of
record.” Id. his involvement in the conspiracy and his
inability to foresee the total fraud loss
Here, the record evidence suffices
caused by the conspiracy. In particular,
to support the conclusion that Miller had
Miller attempted to submit evidence to
agreed to the conspiracy by at least August
dispute 1) his presence at the first meeting
1990 and should be held liable for the full
between Rennert and Teale in August
amount of loss caused by the conspiracy.
1990 (the time at which the Government
In contrast to Collado’s under-developed
suggested that Miller joined th e
record, the record in this case included
conspiracy); 2) Forum Rothmore’s
Miller’s opinion letters on fraudulent stock
designation of payments to Miller as legal
transactions, his demand letters to protect
fees or leasing fees in its financial records;
artificially inflated stock quotes, and his
and 3) the timing of Miller’s first
letters advising the removal of restrictive
discussion with the owners of the gold
stock certificate legends so that non-
mine corporation (with which Ecotech
marketable shares would appear to be
merged) about receiving Ecotech stock in
tradeable. Miller played a critical role,
order to bolster Ecotech’s financial
enabling the conspiracy to function and
statements. Because the District Court
providing it an imprimatur of legitimacy.
found that the issue of foreseeability was
The record evidence of Miller’s extensive
subsumed in the jury verdict, it stated that
involvement in the conspiracy supports the
it would not permit Miller to re-try an
District Court’s application of the relevant
issue that the jury had already determined.
conduct provision.6 As with Duliga, “we
We consider each piece of Miller’s
evidence below.
6
Because we rely on the record Even assuming Miller was not
evidence of Miller’s agreement and present at Rennert and Teale’s August
complicity, we need not reach Miller’s 1990 meeting, several of Miller’s other
claim that the District Court may have actions evidence his involvement in the
improperly conflated the jury’s conspiracy conspiracy by August 1990. For example,
verdict with a finding of full liability under in June 1990, two months before the
the relevant conduct provision.
12
Rennert-Teale meeting, Miller provided attempt to submit evidence regarding his
Rennert with an opinion letter to support presence at the Rennert-Teale meeting.
Forum Rothmore’s practice of leasing
Miller also attempted to submit
worthless assets. On July 13, 1990, Miller
evidence from his personal records and
authored an opinion letter recommending
journals that he contended showed that he
the re-issue of the restricted Ecotech stock
was not paid to provide stock to Forum
held by Jensen, Rennert, and Miller
Rothmore with knowledge of his co-
without a restrictive legend. This made it
defendants’ fraudulent activities, but only
appear that Forum Rothmore could
received legal fees and a loan. Miller
provide Teale with millions of marketable
emphasizes that Forum Rothmore’s faulty
shares. In an August 28, 1990 letter, one
a c c o u n t in g sys t e m i m p r o p e r l y
week after the Rennert-Teale meeting,
denominated his payments as stock
Miller wrote to Teale expressing his
provider fees, rather than traditional
interest and commitment to what he
payments for legal fees.
termed the “credit enhancement program”
that forms the basis of the fraud charges As the Government points out, the
against the defendants, along with a $25 designation of F orum Rothmore’s
million offer of stocks from Ecotech and payments as “leasing fees” or “legal fees”
other corporations. Supp. App. at 638-47. is inconsequential because the payment
Regardless of whether he was present at was made in exchange for M iller’s
the Rennert-Teale meeting, the remainder services in advancing a fraudulent scheme.
of Miller’s actions strongly support the Because Miller does not contest the
District Court’s conclusion that he had District Court’s finding that he used his
joined the conspiracy by or before August legal skills in furtherance of the fraud, the
1990. fact of payment for fraudulent services is
the critical point while the form of his
Miller responds that he undertook
payment is irrelevant. Moreover, as we
the aforementioned actions “in good
noted in Miller, Miller’s services could not
faith.” Miller Reply Br. at 8-9. Yet, the
“be categorized as simple legal advice.”
c u m u l a t iv e e f f e c t o f M i l l e r ’s
Miller, slip op. at 7.
aforementioned actions (the June opinion
letter, the July letter recommending re- Although Miller responds that he
issue of stock, and the August letter to was acting in good faith when he rendered
Teale) suggests that Miller was too central the legal services for which he received
to the operation to believe naïvely that he remuneration and was not aware that his
and his associates were all within the legal services were being misused for a
bounds of the law. Based on the record criminal conspiracy, the record does not
evidence, Miller’s explanation is not support his contention. We also note that
credible and the District Court did not Miller’s argument that Forum Rothmore
abuse its discretion in rejecting Miller’s only paid him for good-faith legal services,
13
rather than fraudulent stock-leasing permitted to submit his proffered evidence,
activities, goes to whether or not he acted Miller’s evidence would not have been
in furtherance of the conspiracy. The sufficient to undermine the basis in the
jury’s verdict shows that it decided that record for imposing accomplice liability.
issue adversely to Miller. Despite Miller’s We hold the District Court did not abuse
insistence that his new evidence only its discretion in denying Miller’s proffer of
pertained to the timing or scope of his the evidence.
commitment, Miller also attempted to
IV.
argue that he was entitled to submit
evidence to attempt to nullify the jury’s We will affirm the judgment of the
conspiracy connection, especially in his District Court for the reasons set forth.
earlier pleadings. We emphasize that
Collado does not entitle a defendant to re-
litigate his or her guilt or innocence and
thus, the issue of whether he was paid to
fraudulently provide stock is not the
subject of a Collado analysis.
Lastly, Miller attempted to submit
evidence to counter the Government’s
allegation that he falsified records to
deceive his accountant and regulatory
authorities regarding the value and
marketability of Ecotech’s assets. In
particular, Miller states that in September
and October of 1991 or earlier, he
discussed providing restricted, non-
marketable Ecotech stock to the gold mine
corporation with which Ecotech merged.
As such, Miller suggests that he should
only be accountable for losses incurred
after fall 1991, but not before.
Even if Miller did not falsify
records until late 1991, there were still
enough other indicia of his involvement in
1990, discussed above, to support the
conclusion that he already had committed
to the conspiracy in 1990, regardless of
whether he committed additional frauds in
connection with Ecotech’s merger with the
gold mine corporation. In sum, even
assuming that Miller would have been
