Filed: Dec. 07, 2012
Latest Update: Feb. 12, 2020
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 11-4335 _ UNITED STATES OF AMERICA v. BRIAN M. CAMPBELL, Appellant _ On Appeal from the United States District Court for the District of New Jersey (No. 2-10-cr-00372-001) District Judge: Honorable Dickinson R. Debevoise Submitted Pursuant to Third Circuit L.A.R. 34.1(a) November 15, 2012 _ Before: RENDELL, FUENTES, and CHAGARES, Circuit Judges. (Filed: December 7, 2012) _ OPINION _ CHAGARES, Circuit Judge. Brian Campbel
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 11-4335 _ UNITED STATES OF AMERICA v. BRIAN M. CAMPBELL, Appellant _ On Appeal from the United States District Court for the District of New Jersey (No. 2-10-cr-00372-001) District Judge: Honorable Dickinson R. Debevoise Submitted Pursuant to Third Circuit L.A.R. 34.1(a) November 15, 2012 _ Before: RENDELL, FUENTES, and CHAGARES, Circuit Judges. (Filed: December 7, 2012) _ OPINION _ CHAGARES, Circuit Judge. Brian Campbell..
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 11-4335
_____________
UNITED STATES OF AMERICA
v.
BRIAN M. CAMPBELL,
Appellant
____________
On Appeal from the United States District Court
for the District of New Jersey
(No. 2-10-cr-00372-001)
District Judge: Honorable Dickinson R. Debevoise
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
November 15, 2012
____________
Before: RENDELL, FUENTES, and CHAGARES, Circuit Judges.
(Filed: December 7, 2012)
____________
OPINION
____________
CHAGARES, Circuit Judge.
Brian Campbell appeals his conviction for 33 counts of mail fraud under 18 U.S.C.
§ 1341. He also appeals the forfeiture and restitution orders entered by the District Court.
For the reasons stated below, we will affirm the District Court.
I.
We write solely for the parties and will therefore recount only those facts that are
essential to our disposition. Brian Campbell was the managing director of Pamrapo
Service Corporation (the “Service Corporation”), the investment arm of Pamrapo
Savings Bank, located in Bayonne, New Jersey. Because the Service Corporation could
not sell financial products directly to the public, it offered products through two third-
party broker-dealers called Prime Capital Services, Inc. and Asset & Financial Planning,
Ltd. Campbell was the Service Corporation‟s registered representative with both of the
broker-dealers.
The Service Corporation earned a commission when its clients used the broker-
dealers, and Campbell received a portion of those commissions. In 2006, the Service
Corporation‟s Board of Directors reduced Campbell‟s commissions such that the
commissions would only be paid after the bank‟s expenses and overhead were deducted.
After Campbell‟s commissions were reduced, he contacted the broker-dealers in
an attempt to persuade them to pay their commission checks directly to him instead of to
the Service Corporation. As a part of his plan, he told the broker-dealers that the bank
hoped to get out of the investment advisory business entirely. Eventually, the broker-
dealers sent a letter to William Campbell (Campbell‟s father and the bank‟s president)
asking for his signed approval of the new terms that Campbell had requested. Though
he later denied knowledge of the agreement, William Campbell apparently signed the
letter stating the new terms.
2
In the summer of 2007, Campbell began to receive checks directly, substantially
increasing his commissions. According to testimony at trial, he successfully concealed
the fact that he was receiving the commissions directly for about a year. In September
of 2008, the bank‟s CFO Kenneth Walter approached William Campbell with evidence
demonstrating the existence of Campbell‟s scheme. William Campbell expressed shock
and demanded that the money be returned to the bank. Eventually, a settlement
agreement was reached between Campbell and the bank.
In October of 2010, Campbell was indicted on 33 counts of mail fraud
(corresponding to the 33 commission checks he received) pursuant to 18 U.S.C. § 1341,
and four counts of money laundering under 18 U.S.C. § 1957(a). The jury convicted
Campbell on the 33 mail fraud counts, but deadlocked on the money laundering charges.
Based on the convictions, the District Court sentenced Campbell to six months of
imprisonment, ordered him to pay $300,758.35 in restitution, and ordered a forfeiture of
$571,104.96. Campbell now appeals, claiming that the District Court (1) improperly
allowed hearsay evidence; (2) violated his Sixth Amendment rights by limiting cross-
examination and documentary evidence that would have assisted his defense; (3)
improperly denied his request to have the jury determine the monetary loss suffered by
the bank as a result of the scheme; and (4) erred in ordering restitution and forfeiture.
3
II.1
A.
At trial, the Government asked Walter and bank consultant Robert Hughes about
the meeting at which William Campbell apparently learned of his son‟s commission
scheme.2 Defense counsel made numerous objections to the related testimony, which
included descriptions of William Campbell‟s demeanor and recollections of the meeting
participants‟ comments. The District Court overruled the objections. Campbell now
argues that the District Court was mistaken on the hearsay question, and also maintains
that his Sixth Amendment Confrontation Clause right was violated by introduction of
the evidence. We exercise plenary review for Confrontation Clause challenges. United
States v. Berrios, 676 F.3d 118, 125 (3d Cir. 2012). We review a district court‟s
decision whether to admit or exclude hearsay evidence for abuse of discretion, but our
review of a district court‟s interpretation of the Federal Rules of Evidence is plenary.
United States v. Riley, 621 F.3d 312, 337 (3d Cir. 2010).
1.
As part of his hearsay argument, Campbell asserts that the “statements . . . of
William Campbell as recounted by Mr. Walter and Mr. Hughes . . . are testimonial” and
their introduction violated the Sixth Amendment‟s Confrontation Clause. Campbell Br.
18. Though Campbell does not clearly identify the statements at issue, we will assume
1
The District Court had jurisdiction under 18 U.S.C. § 3231. We have appellate
jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a).
2
The meeting involved William Campbell, Walter, and Hughes, and eventually Campbell
was called to join the meeting.
4
his argument encompasses all statements earlier listed in the hearsay portion of his brief.
See Campbell Br. 13-14. The alleged statements in question all took place during the
September 2008 meeting in which Walter informed William Campbell that Campbell
was receiving commissions directly. At trial, Walter and Hughes testified that William
Campbell said “[t]his is wrong,” demanded an explanation from Campbell, instructed
Campbell to retrieve the letter agreement that changed the course of the commission
payments, and demanded return of the money. Id.
In Crawford v. Washington,
541 U.S. 36, 59 (2004), the Supreme Court clarified
that if a declarant‟s statements are testimonial in nature, the Sixth Amendment requires
an opportunity for confrontation unless the witness is unavailable and there was prior
opportunity for cross-examination. Campbell cites Crawford, but limits his substantive
argument to the unsupported assertion that William Campbell‟s statements “are
testimonial and fall squarely within the restrictions of [Crawford].” Campbell Br. 18.
Campbell‟s argument fails because there is no indication that William Campbell‟s
statements at the meeting were testimonial. His statements at the meeting could only be
considered testimonial if they were “made under circumstances which would lead an
objective witness reasonably to believe that the statement would be available for use at a
later trial.” Crawford, 541 U.S. at 52 (quotation marks omitted). There was no reason
for William Campbell to believe that his statements at a meeting would be made
available for use at a trial. See
id. (explaining why statements to police interrogator are
testimonial); United States v. Hinton,
423 F.3d 355, 359 (3d Cir. 2005) (concluding that
5
surreptitiously recorded comments are not considered testimonial because participants
do not believe comments are being heard by authorities).
2.
Campbell also argues that the District Court‟s decision to allow testimony about
William Campbell‟s demeanor in the meeting violates the Federal Rules of Evidence.
The court allowed Walter to testify that when William Campbell heard the news about
his son, he was angry and in shock. Campbell acknowledges that nonverbal conduct is
only hearsay if it is intended as an assertion, but claims that requirement is met here.
He provides a lengthy quotation from the Advisory Committee Notes to Federal Rule of
Evidence 801, which in part state that “nonverbal conduct . . . [that] may be offered as
evidence that the person acted as he did because of his belief in the existence of the
condition sought to be proved” is “arguably, in effect an assertion of the existence of the
condition and hence properly includable within the hearsay concept.” Campbell Br. 19.
Contrary to Campbell‟s assertion, the Rules of Evidence and our case law make
clear that testimony concerning a person‟s nonverbal emotional reaction does not qualify
as an assertion. Campbell‟s quotation from the Advisory Committee Notes is misleading:
despite the fact that such nonverbal conduct is “arguably includable within the hearsay
concept,” the next sentence of the Notes explains that “[a]dmittedly evidence of this
character is untested with respect to the perception, memory, and narration (or their
equivalents) of the actor, but the Advisory Committee is of the view that these dangers
are minimal in the absence of an intent to assert and do not justify the loss of the evidence
on hearsay grounds.” This Court has taken the same view. Kerry Coal Co. v. United
6
Mine Workers of Am., 637 F.2d 957, 967 (3d Cir. 1981) (affirming district court‟s
rejection of hearsay challenge to witness‟s testimony that his employees were afraid
because it constituted first-hand knowledge of employees‟ physical and mental
condition).
3.
Campbell also complains that in several instances, Walter and Hughes were
allowed to testify as to what William Campbell said in the meeting.3 As with his other
arguments, Campbell merely provides several excerpts of the testimony of Walter and
Hughes and concludes that “it is obvious that these are inadmissible hearsay and their
admission alone requires a new trial.” Campbell Br. 20.
Campbell cannot succeed because most of the comments he lists were not
declarations of fact, and therefore are not capable of being true or false. See, e.g., United
States v. Reilly, 33 F.3d 1396, 1410 (3d Cir. 1994) (“Instructions to an individual to do
something are . . . not hearsay . . . because they are not declarations of fact and therefore
are not capable of being true or false.”) (quotation marks omitted). The only remaining
statement, William Campbell‟s declaration that “[t]his is wrong,” was allowed by the
District Court as an adoptive admission under Fed. R. Evid. 801(d)(2)(B). We will not
disturb this conclusion because, regardless of whether the exception applies, any error in
admission of this statement was harmless. The inclusion of that alleged statement had no
3
Generally, the statements related to William Campbell‟s reaction to hearing the
information about his son‟s crime. The witnesses claimed that William Campbell
(1) stated “[t]his is wrong”; (2) wanted an explanation from Campbell; (3) asked what
agreement Campbell was referring to; (4) ordered Campbell to retrieve the signed
agreement; and (5) demanded the money be returned. Campbell Br. 13-14.
7
prejudicial effect on Campbell. The rest of the testimony concerning William
Campbell‟s reaction to learning about his son‟s scheme clearly indicates that (according
to Walter and Hughes) he believed Campbell‟s conduct was wrong and needed to be
rectified. Accordingly, introducing the additional statement “[t]his is wrong” almost
certainly did not contribute to the judgment against Campbell. See United States v.
Cunningham, 694 F.3d 372, 391-92 (3d Cir. 2012) (“The test for harmless error is
whether it is highly probable that the error did not contribute to the judgment.”)
(quotation marks omitted).
In sum, the District Court did not commit reversible error by admitting testimony
concerning William Campbell‟s statements and demeanor.
B.
Campbell also asserts that reversal is required because the District Court prevented
him from fully demonstrating the extent to which William Campbell controlled the bank.
By making this showing, Campbell argues, he could have persuaded the jury that William
Campbell had the actual or apparent authority to approve the change to his son‟s
commissions.
One manner in which Campbell sought to achieve his goal was by attempting to
demonstrate that his father had caused the bank to violate the Bank Secrecy Act, and that
he concealed this violation from the bank‟s board of directors. Ultimately, Campbell
states, the concealment caused the federal Office of Thrift Supervision (“OTS”) to
require William Campbell‟s removal from the bank and levy a $5 million fine against the
bank. At trial Campbell began to question Walter about the bank‟s violation of the Act,
8
but the District Court sustained the Government‟s objection on Rule 403 grounds,
concluding that its introduction could confuse the jury. Campbell asked similar questions
of the chairman of the board of the bank and the Service Corporation, Daniel Massarelli,
but Massarelli denied knowledge of the issue. When Campbell sought to introduce
documentary evidence of William Campbell‟s correspondence with the OTS, the District
Court refused because of the documents‟ lack of probative value and their capacity to
distract the jury. Appendix (“App.”) 554-55.
We review a district court‟s Rule 403 decision for abuse of discretion; we will
only conclude that a decision based on Rule 403 is an abuse of discretion if it was
“arbitrary and irrational.” United States v. Lee, 612 F.3d 170, 184-85 (3d Cir. 2010)
(quotation marks omitted).
Here, the District Court was not arbitrary and irrational in preventing the defense
from delving into William Campbell‟s correspondence with the OTS and the resulting
legal action. While there may have been some probative value to the evidence, it was
minimal: its explanation would have done nothing to show William Campbell‟s actual
authority over bank operations, and it would have done little to show his apparent
authority. Although the evidence may have demonstrated that William Campbell was
willing to conceal his actions from the board of directors, Campbell makes no proffer of
evidence showing that he was aware of his father‟s deceit.4 More likely, as the District
4
The probative value is also lessened by the fact, as the District Court mentioned, that
Campbell had already established that William Campbell was essentially in complete
control of the bank. App. 555.
9
Court held, allowing a diversion into the details of William Campbell‟s actions on a
wholly unrelated issue would have caused confusion and distraction.
In conclusion, the District Court did not abuse its discretion in limiting
introduction of evidence regarding William Campbell‟s correspondence with the OTS
and other actions relating to violation of the Bank Secrecy Act.
C.
Campbell also maintains that the District Court orders awarding restitution and
forfeiture were improper, arguing that the “loss amount for the purposes of the advisory
federal sentencing guidelines is $0.00.”5 Campbell Br. 29.
1.
The District Court ordered Campbell to pay $300,758.35 in restitution to Bayonne
Community Bank, the successor in interest to Pamrapo Savings Bank. Campbell urges us
to reverse the restitution order, arguing that the amount of a restitution order cannot
exceed the bank‟s actual loss, which was zero. He asserts that the loss was zero because
Campbell entered into a settlement agreement with the bank in which he agreed to repay
5
In a related argument, Campbell claims that the jury, not the District Judge, was
required to determine the bank‟s loss amount for purposes of sentencing. The basis of his
argument is not exactly clear, principally because his brief does little more than provide a
three-page block quotation from United States v. Leahy, 438 F.3d 328, 335-38 (3d Cir.
2006), which summarizes the Supreme Court‟s line of cases that culminated with United
States v. Booker,
543 U.S. 220 (2005). As Leahy confirmed, Booker held that “„[a]ny
fact (other than a prior conviction) which is necessary to support a sentence exceeding the
maximum authorized by the facts established by a plea of guilty or a jury verdict must be
admitted by the defendant or proved to a jury beyond a reasonable doubt.‟”
Leahy, 438
F.3d at 336 (quoting
Booker, 543 U.S. at 244). There is no serious contention here that
determination of the loss amount did cause or could have caused Campbell‟s sentence to
exceed the statutory maximum punishment for a violation of 18 U.S.C. § 1341.
10
the amounts owed and paid an additional $300,000 to purchase the bank‟s investment
division. We review the District Court‟s factual conclusions as to the amount of loss for
clear error, such that the appellant must establish that the “restitution figure is completely
devoid of a credible evidentiary basis or bears no rational relationship to the supporting
data.” United States v. Vitillo, 490 F.3d 314, 330 (3d Cir. 2007) (quotation marks
omitted). The appropriateness of the restitution figure in general is reviewed for abuse of
discretion.
Id.
The District Court‟s calculation of the loss amount was not clearly erroneous.
Starting with the original $571,104.96 received by Campbell pursuant to the scheme, the
judge reduced the loss amount to $300,758.35 because of payments made to the bank by
Campbell and his father. The District Court was justified in refusing to take into account
retroactive salary increases for purposes of calculating the loss amount, see App. 931, and
concluding that once Campbell attempted to convert the broker-dealers into his personal
clients, the amount of commission payments he would have received absent the existence
of the scheme should not offset to the bank‟s loss.
2.
The District Court ordered forfeiture of $571,104.86. However, the District Judge
stated that he would not have ordered any forfeiture if not for the fact that he believed
the statute required it. App. 904-05. Campbell argues that forfeiture was inappropriate
because it was not required by statute. We exercise plenary review over a district court‟s
interpretation of a statute. United States v. Soto, 539 F.3d 191, 194 (3d Cir. 2008).
11
Under 18 U.S.C. § 982(a)(2)(A), a court “shall order” a person convicted of an
offense in violation of 18 U.S.C. § 1341 to forfeit property received as a result of the
violation. See also United States v. McGinty, 610 F.3d 1242, 1246 (10th Cir. 2010).
Despite the seemingly clear language of the statute, Campbell argues that this Court held
in United States v. Vampire Nation,
451 F.3d 189 (3d Cir. 2006), that criminal
forfeitures are permitted in connection with mail fraud crimes, but not required. Though
that case did concern mail fraud, it did not apply § 982(a) “[b]ecause no financial
institution was involved.”
Id. at 198-99. Instead, the case “resolve[d] whether 28
U.S.C. § 2461(c) authorizes criminal forfeiture of mail fraud proceeds that are not the
result of mail fraud perpetrated against a financial institution.”
Id. at 199.
Any forfeiture orders made pursuant to 18 U.S.C. § 982 are “governed by the
provisions” of 21 U.S.C. § 853. Subsection 853(a)(1) states that property constituting
proceeds of the criminal violation are subject to forfeiture, and § 853(p) provides for
forfeiture of substitute property if property derived from the crime is for some reason
unavailable for forfeiture. Without explanation, Campbell asserts that § 853(a)(1) does
not apply, then seems to argue that because § 853(p) is inapplicable here, forfeiture is
inappropriate.
We will not reverse the order of forfeiture on these grounds. First, Campbell has
provided no reason for us to hold that the $571,104.86 is not “property constituting, or
derived from, any proceeds . . . obtained . . . as the result of [the] violation.”
§ 853(a)(1). Second, though some mention of seeking substitute assets was made at the
sentencing hearing, App. 891, Campbell has failed to establish that resort to substitute
12
property is necessary, or that a failure to meet the requirements of § 853(p) means that a
forfeiture order should be reversed.
Campbell‟s other contentions concerning the forfeiture order are without merit.
III.
For the foregoing reasons, we will affirm the judgment of the District Court.
13
