264 F.3d 391 (4th Cir. 2001), 00-4337, United States v. Bollin

Docket Nº:00-4337, No. 00-4347 No. 00-4406
Citation:264 F.3d 391
Party Name:UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, v. GARY D. BOLLIN, DEFENDANT-APPELLANT. UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, v. ERNST N. TIETJEN, DEFENDANT-APPELLANT. Page 392 UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, v. JAMES GORMLEY, DEFENDANT-APPELLANT.
Case Date:June 07, 2001
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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264 F.3d 391 (4th Cir. 2001)

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,

v.

GARY D. BOLLIN, DEFENDANT-APPELLANT.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,

v.

ERNST N. TIETJEN, DEFENDANT-APPELLANT.

Page 392

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,

v.

JAMES GORMLEY, DEFENDANT-APPELLANT.

No. 00-4337, No. 00-4347 No. 00-4406

United States Court of Appeals, Fourth Circuit

June 7, 2001

Argued: March 2, 2001

Corrected September 6, 2001

Corrected September 19, 2001

Appeals from the United States District Court for the Southern District of West Virginia, at Huntington. Robert C. Chambers, District Judge. (CR-98-152)

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Counsel Argued: Jane Moran, Jane Moran Law Offices, Williamson, West Virginia, for Appellant Bollin George A. Mills, III, Huntington, West Virginia, for Appellant Tietjen Mark Jeffery Kadish, The Law Office OF Mark J. Kadish, Atlanta, Georgia, for Appellant Gormley. Philip Henry Wright, Assistant United States Attorney, Charleston, West Virginia, for Appellee. ON Brief: Rebecca A. Betts, United States Attorney, Charleston, West Virginia, for Appellee.

Before Wilkinson, Chief Judge, Motz, Circuit Judge, and Cynthia Holcomb Hall, Senior Circuit Judge of the United States Court of Appeals for the inth Circuit, sitting by designation.

Affirmed by published opinion. Senior Judge Hall wrote the opinion, in which Chief Judge Wilkinson and Judge Motz joined.

OPINION

Hall, Senior Circuit Judge

Appellants raise numerous challenges to their convictions and sentences stemming from their involvement in an investment fraud scheme and the subsequent coverup. We conclude that their challenges lack merit and therefore affirm the judgments below. We also conclude that pursuant to the Supremacy Clause, federal forfeiture law supersedes the garnishment protections that Georgia state law provides for funds in an individual retirement account.

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I. FACTUAL AND PROCEDURAL BACKGROUND

This case arose out of a wide-ranging investment fraud scheme, carried out by a network of conspirators, who bilked millions of dollars from investors across the country. The investments were programs that promised enormous profits, supposedly derived from secret trading in debentures issued by European"prime" banks. The conspirators included Stephen Oles, a self-described"trader" in the fraudulent investment programs; appellant Ernst Tietjen, another trader; Ramona Holcombe and Stanie Benz, who served as "project managers" or "directors" for the programs; appellant Gary Bollin, a "broker" for the fraudulent investments; Roger Damron, who offered the investments in and near Huntington, West Virginia; David Raimer and his wife, Jennifer, who conducted numerous bank transactions involving investors' funds; and appellant James Gormley, an attorney from Atlanta, Georgia, who advised and assisted Oles, David Raimer, Bollin, and Damron with the fraudulent investments and money laundering. The cast of characters relevant to Appellants also included Finbar F. Dempsey & Company, a law firm in the Turks and Caicos Islands; Robert Edwards, an escrow agent and attorney in Atlanta; Dr. Ralph and Rita Touma, investors; and other investors in the programs.1

In mid-1995, David Raimer and Oles began offering investment programs under the name "Exodus International." The programs involved supposed trading of European "prime bank" debentures and promised very high rates of return with little or no risk to investors. According to the Exodus literature that they distributed, the programs were available on a limited basis to groups of investors whose money would be pooled and delivered to a "prime" bank. The investment principal was supposedly secured by a bank guarantee and, therefore, was never at risk. Millions of dollars in profits were to be generated within a few months from the trading of debentures. For example, one program, "Program 39," offered a profit of $73,000,000 in ten months, based on an investment of $400,000.

To carry out the scheme, bank accounts were established with the guidance and assistance of Oles's attorney, appellant Gormley. Raimer established an escrow account in Orlando, Florida, under the name "Exodus International." Per Gormley's advice, the account was to be non-interest bearing so as to avoid attracting the IRS's attention. The account was to be used ostensibly to deliver investors' funds into a debenture trading program. Gormley also helped establish an offshore account in the Turks and Caicos Islands in the name of "BCI Corporation," which was part of a so-called "three-tiered" offshore trust. According to Gormley, the offshore trust would shield income from taxation and was the "vehicle" through which the debenture trading program was to be conducted.

Appellant Bollin learned about Exodus International Program 39 in May 1995. At Oles' suggestion, Bollin discussed the program with Gormley. Gormley explained to Bollin how the program worked and drew a sketch for him showing how funds would move through the program. Gormley told Bollin that debenture trading programs work "if they're handled right" and that "once they start paying, they pay forever." After Bollin gave Gormley literature about Program 39, Gormley told him that the program looked "pretty good."

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Gormley also recommended the Exodus International Program to Stanie Benz. Gormley told Benz that he had extensive experience reviewing debenture trading programs and that he had reviewed the Exodus Program and found it to be a good investment. Gormley explained the relationship between debenture trading programs and offshore trust accounts, and described how such an account could be used as a holding point for pooling investors' funds and for transferring funds without their being traceable.

Bollin introduced the Exodus Program 39 to Roger Damron. At Bollin's recommendation, on July 20, 1995, Damron met with Gormley. Gormley advised Damron concerning the Program 39 literature and debenture trading programs in general, and advised him on foreign grantor trusts to facilitate the investments and avoid tax liability. Gormley had Finbar F. Dempsey & Company set up foreign grantor trusts in the Turks and Caicos Islands for Damron and Bollin. Gormley also established international business corporations for Damron and Bollin and advised them about their use in conducting business for the trusts. In addition, Gormley prepared several documents for Bollin and Damron, such as profit sharing agreements. The idea was that Damron would bring investors into the programs, Bollin would act as the broker, and Ramona Holcombe would serve as the program manager and link to the trader, Stephen Oles, who would conduct the actual trading.

Damron approached a couple with whom he had a previous investment relationship, Dr. Ralph and Rita Touma, and sought money to place in Exodus Program 39.2 The Toumas decided to invest, and, in late July 1995, gave Damron $750,000. Damron put $400,000 in an escrow account held by Robert Edwards, another Atlanta attorney, awaiting an opening in Program 39. Unbeknownst to the Toumas, Damron paid Bollin $75,000 from this money.

On September 13, 1995, Holcombe faxed to Gormley the wire coordinates to transfer funds into Program 39. Gormley forwarded the fax to Bollin, who then faxed it to Damron.3 Then, on September 19, 1995, Gormley drafted a letter for Damron's signature, directing the transfer of the $400,000 from Edwards' escrow account to Bollin's foreign grantor trust in the Turks and Caicos Islands, an account set up by Gormley. Damron signed the letter and sent it to Edwards. Edwards wired the money as instructed on September 20, 1995.4 A few days later, the money was again transferred, this time from Bollin's trust account to Damron's trust account, also set up by Gormley in the Turks and Caicos Islands. From Damron's account, the money was sent to the BCI Corporation account in the Turks and Caicos Islands, an account controlled by Oles and Raimer.

After the Toumas' money was sent off, Damron began collecting money from other people for investment in another, similar trading program, the "second deal." Bollin told Damron that the second deal would again involve Oles as the trader, but would involve Benz as the "project director." Oles later "lateraled" his role as the trader to appellant Tietjen. Although the second deal was similar to Exodus Program 39, instead of the money going to Oles' BCI Corporation account in the

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Turks and Caicos Islands, the money was transferred to an account in England.

Oles had introduced Tietjen to Benz. Tietjen was the head of a church known as the Apostolic Order of the Remnant House of Israel (AORHI). According to Tietjen, AORHI existed wherever he lived, supposedly for the purpose of funding humanitarian projects. To fulfill its purpose, AORHI created other entities, which Tietjen called limited trusts, to hold assets, and an entity called General Securities, Ltd. (GSL), to "assist in the money-making." Under cover of these entities, Tietjen created official-looking financial documents, such as a "Zero Coupon Prime Capital Note," and offered debenture trading programs with very high rates of return. In all, Tietjen received, or expected to receive, $2.4 million of investors' funds for placement in his debenture trading program.

After Damron sent the money for the second deal, he collected another $140,000 from investors in November and December 1995 for placement in yet...

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