Friday, May 18, 2012

Bankruptcy-related fraud scheme conviction upheld

US v. R. Powell, Jr.:  A grand jury named Powell in one count of a fifteen count Indictment, alleging he aided and abetted the making of a false entry in a bankruptcy-related document, as part of an associate, Pavlock’s, larger scheme to defraud. A jury convicted Powell of this one count. Powell raised four issues in his appeal, none of which the Fourth Circuit found meritorious: 1) the district court failed to provide several requested jury instructions; 2) the prosecutor referred to Powell and Pavlock as ‘liars,’ committing reversible misconduct; 3) defense counsel provided ineffective assistance; and 4) the district court declined to apply a mitigating role adjustment at Powell’s sentencing.

Powell’s first argument centers around the statute he was charged with violating, specifically whether it contains a materiality requirement. He argued that materiality is an element of the offense, in 18 U.S.C. sect. 1519; the Fourth Circuit disagreed under a plain reading of the statute; the 11th and 8th circuits have similarly held that sect. 1519 lacks a materiality element. Powell also wanted an advice-of-counsel defense instruction; the Fourth Circuit rejected this argument, finding that there was a lack of evidence supporting the application of this instruction. Lastly with this appeal issue, Powell wanted the jury to be instructed that his statement concerning the ownership of several limousines was true as a matter of law. The Fourth Circuit held that there was sufficient evidence presented at trial that Powell obtained title to these vehicles by fraud or theft by deception, so the titles did not establish ownership.

For Powell’s second appeal issue, Powell failed to object at trial to the prosecutor’s comment about him as a ‘liar,’ so under the plain error standard, he could not show that the remarks were improper, and so prejudiced his substantial rights that he was denied a fair trial. Previously, the Fourth Circuit held that calling a defendant a liar is not, per se, improper. In light of this and similar authority from some other circuits, Powell could not establish plain error.

The Fourth Circuit found that Powell’s ineffective assistance of counsel claim was premature, and that he could re-assert this claim in a sect. 2255 habeas petition.

Finally, Powell argued that he should have received a mitigating role adjustment. The critical inquiry for a sentencing court in considering this adjustment, according to the Fourth Circuit, is whether the ‘defendant’s conduct is material or essential to committing the offense,’ not just whether the defendant committed fewer ‘bad acts’ than a co-defendant. Here, the Fourth Circuit held that it would be reasonable to find that Powell’s conduct was essential and material, so this issue, like the others, failed.

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