Filed: Jul. 23, 2008
Latest Update: Mar. 28, 2017
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 06-4303 UNITED STATES OF AMERICA, Plaintiff - Appellee, v. DANIEL WATLINGTON, a/k/a Gator Slim, Defendant – Appellant. No. 06-4304 UNITED STATES OF AMERICA, Plaintiff - Appellee, v. THOMAS PATRICK MCGLON, Defendant – Appellant. Appeals from the United States District Court for the Eastern District of North Carolina, at Raleigh. James C. Fox, Senior District Judge. (5:05-cr00004-F) Argued: May 16, 2008 Decided: July 23, 2008 Be
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 06-4303 UNITED STATES OF AMERICA, Plaintiff - Appellee, v. DANIEL WATLINGTON, a/k/a Gator Slim, Defendant – Appellant. No. 06-4304 UNITED STATES OF AMERICA, Plaintiff - Appellee, v. THOMAS PATRICK MCGLON, Defendant – Appellant. Appeals from the United States District Court for the Eastern District of North Carolina, at Raleigh. James C. Fox, Senior District Judge. (5:05-cr00004-F) Argued: May 16, 2008 Decided: July 23, 2008 Bef..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-4303
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
DANIEL WATLINGTON, a/k/a Gator Slim,
Defendant – Appellant.
No. 06-4304
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
THOMAS PATRICK MCGLON,
Defendant – Appellant.
Appeals from the United States District Court for the Eastern
District of North Carolina, at Raleigh. James C. Fox, Senior
District Judge. (5:05-cr00004-F)
Argued: May 16, 2008 Decided: July 23, 2008
Before NIEMEYER, KING and GREGORY, Circuit Judges.
Affirmed by unpublished opinion. Judge Gregory wrote the
opinion in which Judge Niemeyer and Judge King joined.
ARGUED: Geoffrey Wuensch Hosford, HOSFORD & HOSFORD, PC,
Wilmington, North Carolina; Sue Ann Genrich Berry, BOWEN, BERRY
& POWERS, Wilmington, North Carolina, for Appellants. Banumathi
Rangarajan, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North
Carolina, for Appellee. ON BRIEF: George E. B. Holding, United
States Attorney, Anne M. Hayes, Assistant United States
Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North
Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
GREGORY, Circuit Judge:
In this case, two white-collar criminal defendants
challenge the denial of their motions for acquittal, the amount
of the intended loss calculated by the district court, and the
issuance of restitution orders. One of the defendants also
challenges a four-level enhancement for his role in the offense.
Because the district court acted properly with respect to all
four of these issues, we affirm.
I.
Daniel Watlington (―Watlington‖) and Thomas McGlon
(―McGlon‖), along with others, worked together in several
complicated, money-making schemes. Watlington and Bill
Muwwakkil (―Muwwakkil‖) operated the company We Do It All
(―W.D.I.A.‖), through which they arranged financing as loan
brokers. (J.A. 1564.) Watlington also operated Financial
Consultant Services (―FCS‖). McGlon owned Villei International
Trust, a business that offered collateral in the form of
certificates of enhancement, as well as Villei International.
The co-defendants engaged in four distinct money-making schemes:
an advance fee scheme,1 a counterfeit check scheme,2 a fictitious
1
Often times the clients serviced were individuals who had
been incapable of obtaining a loan through conventional means
who then sought financing with the defendants. The victims
(Continued)
3
Japanese bond scheme,3 and a counterfeit certificate of deposit
scheme.4
included Alvice and Janice Hunter, Juanita McNair, Jorge
Rodriguez, Dr. Kathryn Kepes and Dr. Pamela Maraldo, Dr. Gayle
Gibson, Penny Brooks and Tom Baker, Kevin Schullstrom and his
partner, Harold Hill, III, Lester Kaltenecker, and John Johnson.
2
Watlington and Muwwakkil gave clients cashier‘s checks
purported to be drawn on Continental Investment Bank. Victims
testified that they had to pay up front and that the loan checks
they received did not clear. They were not refunded.
3
T.P. Jones worked for Watlington, Muwwakkil, and McGlon.
When he attempted to sell a series of Japanese bonds, he was
arrested. (J.A. 1563.) The FBI confiscated twenty-four
counterfeit bonds. The bonds had a total face value of twelve
billion yen. (J.A. 467-68.) The FBI also confiscated a series
of documents authenticating the bonds. The FBI‘s investigation
revealed that the bonds had been deposited by an individual who
received them from Northeast Investment Institutions, Inc.
(―Northeast Investment‖), a company in which McGlon, Watlington,
and Muwwakkil were officers. Among the authenticating documents
was a letter from Northeast Investment describing the bonds‘
history that included McGlon‘s name, passport number, and
initials. There was also a letter of authenticity signed by
McGlon, Muwwakkil, and Watlington. Rickie Jessie, an employee
of Watlington, testified to creating the authenticating
documents. (J.A. 1557.)
4
Diether Heidenreich sought a loan. Watlington told him
that Villei International Trust could issue a certificate of
deposit (―CD‖) that could be used as collateral against a loan.
Heidenreich wired Villei International Trust‘s attorney Clifton
West $25,000 and was given a CD from the Cayman Islands issued
by the Union Bank of Hong Kong. (J.A. 1968-69.) Heidenreich
tried to open a brokerage account with O‘Ryan Financial Services
(―OFS‖). (J.A. 2076-79.) He wished to borrow against the CD,
but banks would not accept it without insurance. (J.A. 2080.)
Finally, a businessman named Leslie Edelman agreed to loan
Heidenreich money against the CD. (J.A. 2081.) Edelman‘s
lawyer, Heidenreich‘s representative, and an employee of OFS
participated in a conference call with someone representing
(Continued)
4
Watlington, McGlon, Muwwakkil, Clifton West (―West‖),5 Rick
Jessie (―Jessie‖),6 and Gary DeBellonia (―DeBellonia‖)7 were
indicted with conspiracy (Count I), and wire fraud (Counts II-
X).8 Watlington, West, DeBellonia, and McGlon were also indicted
with conspiracy to commit money laundering (XVIII) and fifteen
counts of money laundering (Counts XIX-XXXIII). Additionally,
Watlington and Muwwakkil were indicted with bank fraud (Counts
XI-XIV).
himself as a senior officer of ICBC Bank named Kim To Wong.
(J.A. 2085.) In fact, Wong was a fictitious person. A man who
worked with Watlington, acting at the direction of Watlington,
Muwwakkil, and McGlon, affected a Chinese accent and provided
false information during the call to build confidence in the
legitimacy of the CD. (J.A. 839-45.) After the phone call,
Edelman agreed to make the loan and transferred 1.78 million
dollars. (J.A. 2090.) When Heidenreich defaulted, the CD was
found to be fraudulent and Edelman lost his investment.
5
West was a lawyer who acted as the trust attorney for
Villei International Trust.
6
Jessie was one of Watlington‘s employees and occasionally
the recipient of money from West‘s trust account.
7
DeBellonia was the owner and operator of Management
Concepts, Inc., Corporate Capital Group, and Financial Solution
Resources, as well as a co-defendant in the indictment.
DeBellonia owned and operated multiple companies. He allegedly
operated six businesses between 1982 and 2004 with offices in
multiple states and one briefly in Mexico. Watlington and
DeBellonia routinely referred clients to one another.
8
Watlington, West, and McGlon were indicted with a second
set of wire fraud charges (Counts XVI and XVII).
5
Watlington and McGlon entered pleas of not guilty to all
counts. On motion from the Government, the district court
dismissed Count XXXIII with respect to Watlington and Counts X,
XXVII, XXIX, XXXII, and XXXIII with respect to McGlon. The jury
found both men guilty of all the remaining charges. The
district court sentenced McGlon to 360 months of imprisonment,
based on a calculated offense level of forty-three and a
criminal history of two, and Watlington to 420 months, based on
his calculated offense level of forty-three and his criminal
history of three. Watlington and McGlon appealed to this Court.
II.
Rule 29 of the Federal Rules of Criminal Procedure allows
defendants to file motions for judgments of acquittal. See Fed.
R. Crim. P. 29. We review the denial of such motions de novo.
United States v. Smith, 451 F.3d 209, 216 (4th Cir. 2006).
A. McGlon’s Challenges
McGlon challenges his convictions on Counts II-X, XVI, and
XVII (Wire Fraud and Aiding and Abetting); Counts XIX-XXXIII
(Money Laundering); and Counts I and XVIII (Conspiracy to Commit
Wire Fraud, Bank Fraud, False Statements/Perjury). With respect
to his convictions for wire fraud, for money laundering, and for
conspiracy to commit money laundering, wire fraud, and bank
6
fraud, McGlon argues that the Government failed to prove he had
the requisite intent to defraud.
1. Wire Fraud
Wire fraud under § 1343 is defined as occurring when a
defendant
having devised or intending to devise any scheme or
artifice to defraud, or for obtaining money or
property by means of false or fraudulent pretenses,
representations, or promises, transmits or causes to
be transmitted by means of wire, radio, or television
communication in interstate or foreign commerce, any
writings, signs, signals, pictures, or sounds for the
purpose of executing such scheme or artifice, shall be
fined under this title or imprisoned not more than 20
years, or both.
18 U.S.C. § 1343. Wire fraud has ―two essential elements:
(1) the existence of a scheme to defraud and (2) the use of
. . . wire communication in furtherance of that scheme.‖ United
States v. Curry, 461 F.3d 452, 457 (4th Cir. 2006) (citing
United States v. Godwin,
272 F.3d 659, 666 (4th Cir. 2001);
United States v. ReBrook,
58 F.3d 961, 966 (4th Cir. 1995)). To
establish a scheme to defraud, the Government must prove that
McGlon acted with the specific intent to defraud, which ―may be
inferred from the totality of the circumstances and need not be
proven by direct evidence.‖ United States v. Ham,
998 F.2d
1247, 1254 (4th Cir. 1993) (citing United States v. Saxton,
691
F.2d 712, 714 (5th Cir. 1982); United States v. Rhoads,
617 F.2d
7
1313, 1316 (8th Cir. 1980); United States v. Beecroft,
608 F.2d
753, 757 (9th Cir. 1979)).
Here, the totality of the circumstances indicates that
McGlon intended to defraud the victims. West, the trust
attorney for McGlon‘s company Villei International Trust,
received the funds from many of the advance fee schemes and for
the fraudulent CD scheme into his attorney trust account. West
would then wire the proceeds to various recipients, often
including Villei International and McGlon & Associates, both
McGlon‘s companies. Furthermore, McGlon testified that he would
use Villei International‘s money for his personal expenses.
McGlon explained, ―Well, I didn‘t pay myself any money. You
know, it was borrowed money, so I just--all I did was borrow it
from the partnership. All of the money in Villei is borrowed
money.‖ (J.A. 2199.) Additionally, Villei International Trust
was often held out to victims as the source for either funding
or for collateral. Even McGlon‘s brief states that ―Villei
International Trust offered collateral in the form of
certificates of deposit that were credit enhancements.
Mr. McGlon was introduced as the owner of Villei International
Trust. Clifton West was the trust lawyer for Villei Trust.‖
(Appellants‘ Br. 6.) McGlon himself encouraged these
misconceptions. He produced several fraudulent documents, such
as stand-by letters of credit and CDs, that were then used to
8
gain the trust of the fraud victims. At trial, Lou Ann Jackson,
an employee of Federated Business Services, testified that
McGlon personally directed her to prepare several documents that
proved to be misleading and/or fraudulent. (J.A. 1648.)
Although many of the victims dealt more directly with Muwwakkil,
Watlington, and West, McGlon‘s involvement in and benefit from
the wire fraud is clear. As a result, we affirm the district
court‘s denial of McGlon‘s motion for a judgment of acquittal on
multiple wire fraud counts.
2. Money Laundering
Money laundering, as conceived by § 1956(a)(1), prohibits a
much broader range of conduct than what constitutes the popular
concept of money laundering. United States v. Bolden, 325 F.3d
471, 486 (4th Cir. 2003). Both McGlon and Watlington were
charged with money laundering under § 1956(a)(1)(B)(i)9 and
conspiring to commit money laundering under § 1965(h). Section
1956(a)(1) provides:
Whoever, knowing that the property involved in a
financial transaction represents the proceeds of some
form of unlawful activity, conducts or attempts to
conduct such a financial transaction which in fact
involves the proceeds of specified unlawful activity--
. . .
(B) knowing that the transaction is designed
in whole or in part–
9
Counts XIX-XXXIII charged McGlon with money laundering
pursuant to Section 1956(a)(1)(B)(i). As stated, the district
court dismissed Counts XXVII, XXIX, XXXII, and XXXIII.
9
(i) to conceal or disguise the
nature, the location, the source,
the ownership, or the control of
the proceeds of specified unlawful
activity
18 U.S.C. § 1956(a)(1)(B)(i). In short, to be convicted of
money laundering, a defendant must first know that the property
involved in the financial transaction represents the proceeds of
some specified unlawful activity. Although McGlon maintains he
was not aware that the funds he received were laundered fraud
proceeds, the evidence that he was aware of and participated in
the fraud contradict this assertion. Moreover, McGlon‘s
multiple companies with multiple offices and his employment of
West, as well as his efforts to send and receive mail at several
locations, such as the Mailboxes, Etc.10 and Edward Jones
Investment,11 indicate an attempt to divert attention from who
was receiving the funds. DeBellonia testified that when he
10
McGlon would receive mail addressed to both him
personally and Villei International at a Mailboxes, Etc. in
Dalton, GA.
11
McGlon had an account with Edward Jones Investment in
Calhoun, GA. In 1997, he met with investment representative
Frances Burton Cochran (―Cochran‖). (J.A. 500-01.) He told
Cochran that he was receiving money from some bonds and wanted
to invest it with her company. (J.A. 502.) He asked her to
prepare and sign a letter on Edward Jones‘ letterhead, stating
that Edward Jones had received twenty-four Japanese bonds from
Dean Witter Reynolds. (J.A. 511-15.) He also asked Cochran if
he could receive a package at that address and subsequently have
it picked up and sent by Fed-Ex. (J.A. 503-09.)
10
first began working with Villei International Trust and McGlon,
―Mr. West wanted me to be very clear that all fees that would be
paid would be paid by my clients to Villei International Trust
[and] would be going to his trust account. . . .‖ (J.A. 231.)
Because the record demonstrates that the use of West‘s attorney
trust account and the wiring of funds to several separate
recipients was an attempt ―to conceal or disguise the nature,
the location, the source, the ownership, or the control of the
proceeds of specified unlawful activity,‖ we affirm the district
court‘s denial of McGlon‘s motion for a judgment of acquittal
with respect to his money laundering convictions.
3. Conspiracy
Section 371, the general conspiracy statute, criminalizes
agreements to commit substantive offenses. 18 U.S.C. § 371. To
establish that a conspiracy took place, the Government must
prove that there was ―an agreement to commit an offense, willing
participation by the defendant, and an overt act in furtherance
of the conspiracy.‖ United States v. Tucker, 376 F.3d 236, 238
(4th Cir. 2004) (citing United States v. Edwards,
188 F.3d 230,
234 (4th Cir. 1999)).
Count I charged McGlon with a multiple object conspiracy:
to commit wire fraud, to commit bank fraud, and to make false
11
statements under oath.12 (The Government also charged McGlon
with a separate count for conspiracy to commit money laundering,
which appeared in Count XVIII.) Courts have ―uniformly upheld
multiple-object conspiracies, and they have consistently
concluded that a guilty verdict must be sustained if the
evidence shows that the conspiracy furthered any one of the
objects alleged.‖ Bolden, 325 F.3d at 492 (citing Griffin v.
United States, 502 U.S. 46 (1991) (emphasis added)). Although
McGlon challenges each of these objects separately, they are all
associated with the single conspiracy in Count I. Thus, despite
what McGlon argues, the evidence need only show that a
conspiracy furthered one of the three objects for the guilty
verdict in Count I to be sustained. While the Court recognizes
we need only to hold that one object was sufficiently proven to
sustain the verdict, we address each of the objects in turn.
a. Wire Fraud
Above, we affirmed the district court‘s denial of McGlon‘s
motion for a judgment of acquittal for his substantive wire
fraud charge. Similarly, the evidence of substantive wire fraud
likewise indicates McGlon‘s participation in the conspiracy to
commit that object. For example, McGlon produced fraudulent
12
Count I includes the conspiracy charge, as well as overt
acts in furtherance of the conspiracy and to effect its
objectives. (J.A. 67-71.)
12
documents which were then held out by other members of the
conspiracy, such as Watlington and Muwwakkil, to defraud the
victims. McGlon‘s lawyer, West, received the wired proceeds of
the fraud and then transferred the money to McGlon or one of
McGlon‘s companies. We, therefore, conclude that McGlon entered
into an agreement to commit wire fraud, that he willingly
participated in that conspiracy, and that he committed overt
acts in order to further the conspiracy.
b. Bank Fraud
Section 1344 prohibits knowingly defrauding or attempting
to defraud a financial institution. It provides:
Whoever knowingly executes, or attempts to execute, a
scheme or artifice—
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds,
credits, assets, securities, or other
property owned by, or under the custody or
control of, a financial institution, by
means of false or fraudulent pretenses,
representations, or promises;
shall be fined not more than $1,000,000 or imprisoned
not more than 30 years, or both.
18. U.S.C. § 1344. McGlon does not challenge his conviction for
substantive bank fraud. He only attacks bank fraud as an object
of the Count I conspiracy charge.
In committing bank fraud, McGlon acted in concert with
other individuals, including Watlington and Muwwakkil. While
other members of the conspiracy played more visible roles,
McGlon agreed to commit the offense, willingly participated, and
13
committed overt acts in furtherance of the conspiracy. For
example, McGlon met with a victim of the counterfeit check
scheme, who sought a refund of the returned check, and
represented himself as an associate of Continental Investment
Bank. The victim never received his money. Additionally,
McGlon had documents made, such as stand-by letters of credit
and CDs, which were then used in the fraud.13 Although
Watlington and Muwwakkil dealt with the fraud victims more
directly, McGlon participated in the bank fraud willingly and
committed overt acts to perpetuate that fraud.
c. Perjury
McGlon also challenges the perjury object of Count I. A
person has committed perjury when he or she
13
From 1999-2005, McGlon was a regular customer of
Federated Business Services, a company that provides business
services. One of the employees, Lou Ann Jackson (―Jackson‖)
testified that McGlon had her scan an image of an Asian
signature and then create a signature stamp using the scan.
(J.A. 1668-69.) Jackson also typed documents. She recalled
that McGlon would tape signatures to finished documents and make
copies. (J.A. 1634-35.) Later, Jackson would insert electronic
signatures, as directed by McGlon. McGlon kept the original
documents. During the trial, Jackson identified several
documents she had prepared for McGlon, including stand-by
letters of credit and CDs. While awaiting trial, McGlon filed a
criminal complaint against Jackson, alleging she committed fraud
and made a fraudulent statement under oath during the FBI
investigation. (J.A. 2297-2300.) He denied giving her any
instructions or signatures. Villei International also obtained
business services from a Bahamas-based business named
Presidential Services. (J.A. 1059-61.) The company sent and
received faxes. The company also prepared a document with the
Union Bank name and address.
14
(1) having taken an oath before a competent tribunal,
officer, or person, in any case in which a law of the
United States authorizes an oath to be administered,
that he will testify, declare, depose, or certify
truly, or that any written testimony, declaration,
deposition, or certificate by him subscribed, is true,
willfully and contrary to such oath states or
subscribes any material matter which he does not
believe to be true; or
(2) in any declaration, certificate, verification, or
statement under penalty of perjury as permitted under
section 1746 of title 28, United States Code,
willfully subscribes as true any material matter which
he does not believe to be true.
18 U.S.C. § 1621. Again, McGlon does not challenge a
substantive perjury conviction,14 but rather the perjury object
of his conspiracy conviction.
As mentioned, one of the schemes perpetrated by the
defendants consisted of passing off fraudulent Japanese bonds as
genuine. During a deposition with the SEC, McGlon denied any
knowledge of the counterfeit bonds:
Q: Did the fact that the other bonds were seized
concern you?
A: No, it had nothing to do with it.
Q: Why did you think they were seized?
A: I guess because they were phoney. I have no idea.
Q: Did the notion that Northeast was working on some
phoney bonds concern you?
A: Not at all.
Q: Why not?
14
There was no independent, substantive perjury charge.
15
A: Why would it, you know? It has nothing to do with
me, period.
(J.A. 1123.) Watlington similarly claimed the bonds were
authentic. (J.A. 1114.)
Yet contrary to McGlon‘s and Watlington‘s depositions, at
trial, the owner of a printing and graphics company testified
that McGlon had contacted him about producing a certificate with
a hand-drawn border. (J.A. 528-30.) The printer referred
McGlon to a graphic designer who took the project. (J.A. 530.)
McGlon later gave the graphic designer foreign characters to add
to the design, telling him that the certificates were part of a
gift to twelve Japanese salesmen reflecting the amount of
product they had sold. When the graphic designer was finished
the printer printed and embossed the certificates using a
special paper provided by McGlon. Additionally, the FBI‘s
investigation revealed that the bonds had been deposited by an
individual who received them from Northeast Investment, a
company in which McGlon, Watlington, and Muwwakkil were
officers. Among the authenticating documents was a letter from
Northeast Investment describing the bonds‘ history that included
McGlon‘s name, passport number, and initials. There was also a
letter of authenticity signed by McGlon, Muwwakkil, and
Watlington.
16
This evidence indicates that McGlon was well-aware that the
bonds were fraudulent at the time he was deposed. Thus, while
it is clear that both McGlon and Watlington lied under oath,
whether they coordinated those untruths is unknown. That said,
although there is not as much evidence supporting the false
statement object as that which supports the wire and bank fraud
conspiracy objects, the Court need only establish one of the
objects to affirm the conspiracy conviction in Count I.
In sum, given McGlon‘s relationship with Muwwakkil,
Watlington, West, and other members of the conspiracy
established by the record, as well as his own actions in
furtherance of the conspiracy, we sustain the guilty verdict
against McGlon on Count I. We, therefore, affirm the district
court‘s denial of McGlon‘s motion for a judgment of acquittal
for Count I.
d. Money Laundering
Above, we affirmed the district court with respect to
McGlon‘s substantive money laundering convictions. However,
McGlon also challenges the associated conspiracy conviction
pursuant to § 1956(h), found in Count XVIII. Section 1956(h)
provides that ―[a]ny person who conspires to commit any offense
defined in this section or § 1957 shall be subject to the same
penalties as those prescribed for the offense the commission of
which was the object of the conspiracy.‖ 18 U.S.C. § 1956(h).
17
Again, West acted as Villei International Trust‘s trust attorney
and West‘s attorney trust account was a major situs of the money
laundering. Because McGlon‘s companies received the laundered
money and he paid personal expenses with the money he received,
we conclude that McGlon entered into an agreement to receive the
laundered funds from West‘s attorney trust account. As a
result, we likewise affirm the denial of the motion for judgment
of acquittal with respect to McGlon‘s Count XVIII.
B. Watlington
Watlington challenges his conviction of conspiracy to make
materially false statements in Count I and his conviction of
money laundering in Counts XIX-XXXII.
1. Conspiracy to Make Materially False Statements/Perjury
Unlike McGlon, who challenged the conspiracy alleged in
Count I with respect to all three objects, Watlington challenges
only the third object, perjury. As stated, courts have
consistently sustained guilty verdicts in multiple-object
conspiracy charges when evidence demonstrates that the
conspiracy furthered just one of those objects. Bolden, 325
F.3d at 492 (citing Griffin v. United States, 502 U.S. 46
(1991); United States v. Hudgins,
120 F.3d 483, 487 (4th Cir.
1997)). Moreover, Watlington does not challenge his substantive
convictions for bank and wire fraud. Because only one of those
objects need be established as furthered by the conspiracy, and
18
Watlington challenges only one of three of the objects, we
affirm the verdict in Count I.
2. Money Laundering
As stated previously, the crime of money laundering under
§ 1956 is rather broad. Watlington argues that it was not
West‘s intent to launder money but to distribute earned funds
and that if West, as the principal, had no criminal intent,
neither could Watlington as an aider and abettor. The
foundational premise of Watlington‘s argument, mainly that West
had no intent to launder money as defined in § 1956, is patently
false. Channeling the funds for various schemes through West‘s
attorney trust account is a clear attempt ―to conceal or
disguise the nature, the location, the source, the ownership, or
the control of the proceeds of specified unlawful activity.‖
18 U.S.C. § 1956(a)(1)(B)(i). Moreover, according to West‘s
records, Watlington directly received the laundered funds from
West‘s accounts. Thus, we affirm the district court‘s denial of
Watlington‘s motion for a judgment of acquittal for money
laundering.
III.
Although issues regarding the definition of intended loss
are subject to de novo review, we review the factual
determination of the intended loss for clear error. United
19
States v. Wells, 163 F.3d 889, 900 (4th Cir. 1998). Only a
preponderance of the evidence must support the findings.
An intended loss is ―the pecuniary harm that was intended
to result from an offense,‖ including a harm that would have
been impossible or unlikely to occur. U.S.S.G. § 2B1.1 cmt.
n.3(A)(ii). ―[T]he Guidelines permit courts to use intended
loss in calculating a defendant‘s sentence.‖ United States v.
Miller, 316 F.3d 495, 502 (4th Cir. 2003). Additionally,
intended losses, according to former United States Sentencing
Guidelines Section 2F1.1 (deleted by consolidation with U.S.S.G.
§ 2B1.1), do not need to be determined with precision: a court
must only make a reasonable estimate of loss, given the
available information. See U.S.S.G. § 2B1.1 cmt. n.3(C) (―The
court need only make a reasonable estimate of the loss.‖); see
also United States v. Jackson,
524 F.3d 532, 547 (4th Cir.
2008).
The district court calculated intended loss according to
the face value of the counterfeit CDs and Japanese bonds and
according to the actual loss of the advance fees. McGlon and
Watlington argue that the district court erred in using the face
value of the counterfeit documents in making its calculation.
They assert that ―[n]o one would pay the face value of the CDs
when Watlington and West attempted to borrow against them.‖
(Appellants‘ Br. 52.) They also maintain that ―[a]dding the
20
face value of the CDs artificially inflates the intended loss
figure.‖ (Appellants‘ Br. 53.) Although it may have been
unlikely that the members of the conspiracy could have borrowed
up to the face value amount of the fraudulent certificate of
deposit, intended loss, as defined, can encompass the unlikely
as well as the impossible. See U.S.S.G. § 2B1.1 cmt.
n.3(A)(ii). It, therefore, was not clear error on the part of
the district court to have valued the fraudulent CDs at their
face value for the purposes of calculating the intended loss.
Further, McGlon and Watlington attack the calculated worth
of the fraudulent Japanese bonds, arguing that the district
court should have valued them at four and a half million
dollars, as testified by Special Agent Tong. (Appellants‘ Br.
54.) Tong calculated the value using the conversion rate at the
time of trial. However, the conspirators intended to profit
from the bonds when they were generated in 1997, not when Tong
made his assessment in 2005. Thus, the district court used the
exchange rate at the time the bonds were produced, which yielded
a higher number than if the value had been calculated at the
time of the trial. ―A finding is ‗clearly erroneous‘ when
although there is evidence to support it, the reviewing court on
the entire evidence is left with the definite and firm
conviction that a mistake has been committed.‖ United States v.
United States Gypsum Co., 333 U.S. 364, 396 (1948). Because the
21
district court did not make such a mistake by using the exchange
rate at the time of the crimes when calculating of intended
loss, we affirm the district court.
IV.
McGlon and Watlington also challenge the restitution
ordered by the district court. This Court reviews criminal
restitution orders for abuse of discretion. United States v.
Henoud, 81 F.3d 484, 487 (4th Cir. 1996) (citing United States
v. Hoyle,
33 F.3d 415, 420 (4th Cir. 1994)).
McGlon and Watlington challenge several aspects of the
district court‘s restitution order. They assert that the
district court erred in ordering restitution to entities who
were not actually ―victims‖ under the law. Moreover, McGlon and
Watlington argue that the restitution figure itself was higher
than that found in the presentencing reports. McGlon asserts
that RBC Centura, Bank of America, and Richmond Savings Bank
cannot, by definition, be victims under the Mandatory Victim
Restitution Act (―MVRA‖), as they are not ―persons.‖15
(Appellants‘ Br. 58.) Additionally, with regard to the
financial institutions, McGlon alleges that there is no
15
The banks were looking into returned checks from
Continental Investment Bank in conjunction with the counterfeit
check scheme.
22
connection between the counts of the conviction and the
institutions. Lastly, in reference to RBC Centura Bank, they
argue that the district court increased the restitution outlined
in the presentencing report without justification.
McGlon also challenges the restitution ordered to Gayle,
Gibson, Leslie Edelman, Alvin and Janice Hunter, Joseph Norman,
and Elijah Stevenson. (Appellants‘ Br. 58-60.) With regard to
Gibson, he argues that the district court increased the
restitution amount from that in the presentencing report by
$24,000. He asserts that Edelman, who loaned money to
Heidenreich based on the fraudulent CD and the phone call in
which one of Watlington‘s associates impersonated a Chinese
banker, was not a victim of any of the offenses. He argues
nothing is owed to the Hunters because they merely gave
cashier‘s checks to Watlington. Moreover, McGlon maintains that
Norman was not a victim and that there was an unexplained
increase in the amount of restitution from the presentencing
report. Lastly, McGlon maintains that Stevenson is not a victim
under the statute, as he gave checks directly to Watlington.
Similarly, Watlington objects to restitution with respect to
several victims.16
16
Watlington objects to the restitution to Roderick Mims,
Jimtown First Baptist Church c/o Bill Bingham, Danny E. Elkins,
Jr., James Harrison, Leslie Edelman d/b/a Kimber Manufacturing,
(Continued)
23
The MVRA provides for crimes of violence, offenses against
property, and crimes related to tampering due to which a victim
has suffered either a physical or pecuniary loss, ―the court
shall order, in addition to, or in the case of a misdemeanor, in
addition to or in lieu of, any other penalty authorized by law,
that the defendant make restitution to the victim of the offense
or, if the victim is deceased, to the victim‘s estate.‖
18 U.S.C. § 3663A(a)(1). The MVRA defines a victim as
a person directly and proximately harmed as a result
of the commission of an offense for which restitution
may be ordered including, in the case of an offense
that involves as an element a scheme, conspiracy, or
pattern of criminal activity, any person directly
harmed by the defendant‘s criminal conduct in the
course of the scheme, conspiracy, or pattern.
Id. § 3663A(a)(2). Thus, both those who are directly harmed and
those who are proximately harmed are entitled to restitution.
Moreover, this Circuit has upheld the payment of restitution
pursuant to the MVRA when the victims are financial
institutions. See, e.g., United States v. Alalade, 204 F.3d 536
(4th Cir. 2000). As a result, Watlington‘s argument that banks
do not meet the definition of victim under the MVRA fails.
Inc., Carlos Sanchez, Lennox Slinger, Richard Lamos, Wayne
Adams, Bennett J. Severson, the Hunters, Stevenson, Bank of
America, Richmond Savings Bank, and RBC Centura. (Appellant‘s
Br. 61.)
24
―In order to assure effective appellate review of
restitution orders, this circuit requires sentencing courts to
make specific, explicit findings of fact on each of the factors
set forth in § 3664(a).‖ United States v. Molen, 9 F.3d 1084,
1086 (4th Cir. 1993). Section 3664(a) states that
the court shall order the probation officer to obtain
and include in its presentence report, or in a
separate report, as the court may direct, information
sufficient for the court to exercise its discretion in
fashioning a restitution order. The report shall
include, to the extent practicable, a complete
accounting of the losses to each victim, any
restitution owed pursuant to a plea agreement, and
information relating to the economic circumstances of
each defendant.
18 U.S.C. § 3664(a). In United States v. Molen, we explained
that ―these findings of fact must key a defendant‘s financial
resources, financial needs, and earning ability to the type and
amount of restitution.‖ Molen, 9 F.3d at 1086 (citing United
States v. Bruchey, 810 F.2d 456, 459 (4th Cir. 1987)). A
district court may satisfy these requirements in one of two
ways: by making factual findings or by adopting an adequate
presentencing report.
With respect to restitution, the presentencing report for
both defendants stated:
restitution must be ordered in this case without
regard for the defendant‘s ability to pay. However,
the exact amount of restitution owed in this case has
not been determined at this time. Due to the
complexity of the issue, the matter of restitution is
still under investigation by this office and the
25
government. A separate restitution hearing has been
requested to address the issue of restitution pursuant
to 18 U.S.C. § 3666A.
(J.A. 2653, ¶88; J.A. 2718, ¶72.) The district court held
restitution hearings for both McGlon and Watlington.
Before the hearings, both McGlon and Watlington had the
opportunity to submit written objections to the probation
officer‘s findings in the presentencing reports. While both
filed objections with the district court, neither defendant
submitted any new evidence in support of their challenges. The
probation officer filed addenda to the reports. The probation
officer then filed additional addenda to the presentencing
reports on the issue of restitution. During the restitution
hearings, neither Watlington nor McGlon presented any additional
evidence in support of their objections. Ultimately, the
district court accepted the presentencing reports‘ findings.
Because the district court may adopt the factual findings
in the presentencing report and neither defendant brought forth
any evidence to the contrary in his objections, the district
court did not abuse its discretion by ordering restitution based
on the findings found in the report.
V.
Finally, we address McGlon‘s challenge to the four-level
sentencing enhancement for his role in the offense. To give the
26
proper deference to the district court‘s application of the
Sentencing Guidelines, this Court reviews factual determinations
for clear error and legal questions de novo. United States v.
Blake, 81 F.3d 498, 503 (4th Cir. 1996) (citing United States v.
Singh,
54 F.3d 1182, 1190 (4th Cir. 1995)).
The United States Sentencing Guidelines allow for a four-
level enhancement if the defendant was the leader, or organizer,
of criminal activity that involves five or more participants or
was in some other way extensive. U.S.S.G. § 3B1.1(a). The
presentencing report, thus, recommended that McGlon‘s offense
level be adjusted by four, alleging that ―McGlon organized the
offense and directed the activities of Watlington, additionally,
the offense was extensive and involved more than five persons.‖
(J.A. 2715.)
However, in its statement of reasons, the district court
found that ―the defendant should not receive 4 points for his
rose [sic] in the offense and therefore reduces the 4 points to
zero. However the offense level of 43 does not change as the
offense level cannot go below 43 in this matter.‖ (J.A. 2732.)
Additionally, the Government points out a four-point reduction
would have had no effect on McGlon‘s sentencing range, as after
subtracting four points from his offense level of 48, his
offense level would have been 44, and the Guidelines limited his
27
total offense level to 43. (Appellee‘s Br. 2, n.2.) We,
therefore, dismiss this issue as moot.
VI.
Given the evidence against them, the denial of McGlon‘s and
Watlington‘s motions for judgments of acquittal was proper.
Furthermore, the district court‘s calculation of the intended
loss was not clearly erroneous. Because Watlington and McGlon
failed to present any evidence in opposition to the findings
contained in the presentencing report, the district court did
not abuse its discretion in ordering restitution based on those
findings. Accordingly, we affirm the district court.
AFFIRMED
28
