Filed: Nov. 29, 2019
Latest Update: Mar. 03, 2020
Summary: NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS NOV 29 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT UNITED STATES OF AMERICA, No. 18-10323 Plaintiff-Appellee, D.C. No. 2:13-cr-00018-JCM-GWF-1 v. LEON BENZER, MEMORANDUM* Defendant-Appellant. Appeal from the United States District Court for the District of Nevada James C. Mahan, District Judge, Presiding Argued and Submitted November 13, 2019 San Francisco, California Before: BENNETT and LEE, Circuit Judges, and
Summary: NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS NOV 29 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT UNITED STATES OF AMERICA, No. 18-10323 Plaintiff-Appellee, D.C. No. 2:13-cr-00018-JCM-GWF-1 v. LEON BENZER, MEMORANDUM* Defendant-Appellant. Appeal from the United States District Court for the District of Nevada James C. Mahan, District Judge, Presiding Argued and Submitted November 13, 2019 San Francisco, California Before: BENNETT and LEE, Circuit Judges, and P..
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NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS NOV 29 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 18-10323
Plaintiff-Appellee, D.C. No.
2:13-cr-00018-JCM-GWF-1
v.
LEON BENZER, MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Argued and Submitted November 13, 2019
San Francisco, California
Before: BENNETT and LEE, Circuit Judges, and PIERSOL,** District Judge.
Leon Benzer appeals his 151-month sentence for his role in a conspiracy that
defrauded a homeowner association of millions of dollars. Benzer argues that the
district court, among other things, committed procedural error by miscalculating
his loss figure. We affirm.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Lawrence L. Piersol, United States District Judge for
the District of South Dakota, sitting by designation.
1. Factual background: Leon Benzer and his cabal of co-conspirators
concocted a sophisticated scheme to defraud homeowner associations of new
condominium developments in the Las Vegas area. Using straw purchasers, Benzer
packed association boards with members who would hire a co-conspirator lawyer
to handle construction defect litigation and would also steer millions of dollars of
remediation work to his company, which ended up performing only minimal work.
For the Vistana homeowner association, Benzer directed the board to replace the
law firm handling Vistana’s construction defect litigation with his co-conspirator
attorney Nancy Quon. Quon settled the suit, securing $19 million for Vistana.
Quon received over $5 million of that amount as compensation.
Benzer was eventually arrested, charged, and pleaded guilty, though his
original sentence was vacated by this court and his case was remanded for
resentencing. See United States v. Ball, 711 F. App’x 838, 845–46 (9th Cir. 2017)
(unpublished). At resentencing, the court found Benzer to have caused a loss of
$12.4 million in the course of his conspiracy. This resulted in a 20-level
enhancement to his sentence. Benzer was sentenced to 151-months in prison, the
high-end of the resulting Guidelines range.
2. Miscalculation of loss figure: Benzer initially argues that the district
court committed reversible procedural error by miscalculating his loss figure. He
claims that the court failed to offset his loss amount by the fair market value of the
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services provided by his attorney co-conspirators to the victims as required by the
United States Sentencing Guidelines Manual, § 2B1.1, application note 3(E)(i).
The claimed value of these services was over $5 million dollars, though most of
that figure derives from Quon’s fees for negotiating the settlement. The district
court disagreed, expressly finding that the services were “skewed,” illegitimate,
and lacking any value, and set Benzer’s loss figure at $12.4 million.
On appeal, the government argues for the first time — and Benzer agrees —
that the district court applied the wrong (2016) Guidelines version at resentencing.
Because this court vacated Benzer’s original sentence and remanded, the
resentencing proceedings should have been conducted using the 2014 Guidelines.
See 18 U.S.C. § 3742(g)(1) (the district court must “apply the guidelines . . . that
were in effect on the date of the previous sentencing of the defendant prior to the
appeal”); see also United States v. Door,
917 F.3d 1146, 1150 n.2 (9th Cir. 2019).
Because the issue was raised for the first time on appeal, we review for plain
error. See Fed. R. Crim. P. 52(b); see also United States v. Pelisamen,
641 F.3d
399, 404 (9th Cir. 2011). Under this standard, “reversal is warranted only where
there has been (1) error; (2) that is plain; (3) that affects substantial rights; and (4)
where the error seriously affects the fairness, integrity, or public reputation of
judicial proceedings.”
Pelisamen, 641 F.3d at 404 (citing United States v. Olano,
507 U.S. 725, 732 (1993)).
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By applying the wrong Guidelines version, there was both error and it was
plain. But the error does not affect Benzer’s substantial rights because his
enhancement would have been identical under the proper 2014 Guidelines.
Compare U.S. Sentencing Guidelines Manual § 2B1.1(b)(1)(K) (U.S. Sentencing
Comm’n 2016) (20-level enhancement if loss is between $9.5 million and $25.0
million), with U.S. Sentencing Guidelines Manual § 2B1.1(b)(1)(K) (U.S.
Sentencing Comm’n 2014) (20-level enhancement if loss is between $7.0 million
and $20.0 million). This court has held that where a district court applies an
incorrect Guidelines version, but the error does not cause the enhancement to
differ, such error does not affect a defendant’s substantial rights. See United States
v. Benitez-Perez,
367 F.3d 1200, 1205–06 (9th Cir. 2004). That is the case here.
Furthermore, Benzer’s argument on the merits still fails because the district
court did not commit reversible error by finding that Benzer’s co-conspirator
attorneys’ services lacked any value. For factual findings made at sentencing,
including amounts of loss in fraud cases, we review for clear error. See United
States v. Popov,
742 F.3d 911, 914 (9th Cir. 2014).
It is self-evident that Benzer’s attorney co-conspirators violated the duty of
loyalty owed to their client-victims. Where an attorney violates that duty, fees
received are subject to disgorgement. See Restatement (Third) of The Law
Governing Lawyers § 37 (Am. Law Inst. 2000); see also Rodriguez v. Disner, 688
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F.3d 645, 653 (9th Cir. 2012) (“In determining what fees are reasonable, a district
court may consider a lawyer’s misconduct, which affects the value of the lawyer’s
services.”); Silbiger v. Prudence Bonds Corp.,
180 F.2d 917, 920 (2d Cir. 1950)
(Learned Hand, J.) (noting that where an attorney represents opposing interests,
“the usual consequence has been that he is debarred from receiving any fee from
either, no matter how successful his labors”).
Because fees are subject to disgorgement when an attorney represents
opposing interests, those services rendered may be deemed valueless.
Consequently, we cannot say that the court clearly erred by finding Benzer’s co-
conspirator attorneys’ services lacking in fair market value.
3. Reliance on clearly erroneous facts: Benzer also claims that the court
committed procedural error by relying on clearly erroneous facts at resentencing.
Claims of procedural error at sentencing are reviewed for abuse of discretion. See
United States v. Carty,
520 F.3d 984, 993 (9th Cir. 2008). “[A] finding is clearly
erroneous if it is illogical, implausible, or without support in the record.” United
States v. Burgos-Ortega,
777 F.3d 1047, 1056 (9th Cir. 2015) (internal quotation
marks and citation omitted).
The supposed erroneous facts relied upon include several references by the
court to a jury trial despite Benzer pleading guilty, as well as an allegedly mistaken
belief by the court that Benzer was originally sentenced at the high-end of the
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Guidelines range, when it had sentenced Benzer at the low-end of the range. But
the district court’s misstatements were immediately corrected by counsel and
acknowledged by the court.
4. Substantive unreasonableness: Finally, Benzer claims that his
sentence is substantively unreasonable because the court failed to sufficiently
account for Benzer’s mitigating circumstances. Claims of substantive
unreasonableness are evaluated under an abuse of discretion standard that requires
this court to “take into account the totality of the circumstances.” Gall v. United
States,
552 U.S. 38, 51 (2007). The record shows that the district court did not
abuse its discretion in weighing the sentencing factors. The court considered the
mitigating factors proffered by Benzer, but it also considered the nature and
circumstances of the offense and the need for a sentence to reflect the crime.
AFFIRMED.
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