U.S. v. Rigas, Docket No. 08-3485-cr (L).

• Citation: 583 F.3d 108
• Decision Date: 05 October 2009
• Docket Number: Docket No. 08-3485-cr (L).,Docket No. 08-3592-cr (CON).,Docket No. 08-3597-cr (CON).,Docket No. 08-3500-cr (CON).
• Parties: UNITED STATES of America, Appellee, v. John J. RIGAS and Timothy J. Rigas, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

583 F.3d 108

UNITED STATES of America, Appellee, v. John J. RIGAS and Timothy J. Rigas, Defendants-Appellants.

Docket No. 08-3485-cr (L).

Docket No. 08-3500-cr (CON).

Docket No. 08-3592-cr (CON).

Docket No. 08-3597-cr (CON).

United States Court of Appeals, Second Circuit.

Argued: May 5, 2009.

Decided: October 5, 2009.

Stephen R. McAllister, Thompson Ramsdell & Qualseth, P.A., Lawrence, KS (Neal K. Katyal, Morgan Legal Consulting, Washington, D.C., and Lawrence G. McMichael, Dilworth Paxson, LLP, Philadelphia, PA, on the brief), for Defendants-Appellants.

William F. Johnson, Assistant United States Attorney (Michael J. Garcia, United States Attorney for the Southern District of New York, and Katherine Polk Failla, Assistant United States Attorney, on the brief), United States Attorney's Office for the Southern District of New York, New York, NY, for Appellee.

Douglas A. Berman, Stephanos Bibas, Marc Miller, Michael O'Hear, Mark Osler, Sandra Guerra Thompson, Amicus Curiae in support of Defendants-Appellants.

Before: FEINBERG, WINTER, and CABRANES, Circuit Judges.

JOSÉ A. CABRANES, Circuit Judge:

We consider several challenges to the trial and sentencing of John J. Rigas, the former CEO of Adelphia Communications Corp. ("Adelphia"), and his son Timothy J. Rigas, Adelphia's former CFO (together, the "Rigases"), including the Rigases' claims that their sentences were procedurally and substantively unreasonable.

BACKGROUND

The history of massive corporate fraud that forms the background of these proceedings has been set forth exhaustively in United States v. Rigas, 490 F.3d 208, 212-19 (2d Cir.2007). We supply here only a brief summary of the relevant procedural history.

Trial and Sentencing

In September 2002, the Rigases were indicted—along with Michael Rigas, James Brown, and Michael Mulcahey, who were also executives at Adelphia—on multiple counts of securities fraud, wire fraud, bank fraud, and criminal conspiracy. In June 2004, following a trial in the United States District Court for the Southern District of New York (Leonard B. Sand, Judge), a jury convicted the Rigases of conspiracy, bank fraud, and securities fraud but acquitted them of wire fraud. Michael Rigas was acquitted of conspiracy and wire fraud, with the jury remaining deadlocked on the other counts; he later pleaded guilty to a charge of making a false entry in the books and records of Adelphia in violation of 47 U.S.C. § 220(e). Brown pleaded guilty prior to trial and testified as a government witness. Mulcahey was acquitted of all charges. See Rigas, 490 F.3d at 219.

For each of the Rigases, the initial Presentence Investigation Reports ("PSR"), prepared by the United States Probation Office ("Probation Office"), calculated, under the United States Sentencing Guidelines ("Guidelines"), a base offense level of six and recommended multiple sentencing enhancements: (1) twenty-six levels because the loss exceeded $100 million; (2) four levels because the offense involved more than fifty victims; (3) two levels because the offense involved sophisticated means; (4) two levels because defendants derived more than $1 million in gross receipts from financial institutions as a result of their offenses; (5) two levels because defendants abused the public trust; and (6) four levels because appellants were leaders of criminal activity that involve five or more participants. Based on these calculations, the PSRs concluded that the total offense level for each of the Rigases was 46, their Criminal History Category was I, and the resulting sentencing range under the Guidelines was life imprisonment. However, the Probation Office recommended a term of ten years' imprisonment and five years' supervised release for John Rigas, and twenty years' imprisonment and five years' supervised release for Timothy Rigas.

At a sentencing hearing on June 20, 2004, the District Court announced that it would consider the Guidelines and the factors in 18 U.S.C. § 3553(a), and stated that, in its view, the PSR calculations were accurate. After hearing argument from counsel, the District Court imposed sentences that were more severe than those recommended in the PSR, but which nonetheless fell significantly below the recommended Guidelines ranges of life imprisonment. Specifically, the District Court sentenced John Rigas principally to an aggregate term of fifteen years' imprisonment. The Court divided his sentence as follows:

• 15 years on each of two counts of bank fraud, the sentences to run concurrently with each other;

• 5 years on one count of conspiracy and 10 years on one count of securities fraud, the sentences to run consecutively to each other and concurrently with the bank fraud sentence; and

• 10 years on one count of securities fraud, the sentences to run concurrently with each other and the other sentences.

The District Court sentenced Timothy Rigas principally to an aggregate term of twenty years' imprisonment, according to the following criteria:

• 20 years on each of two counts of bank fraud, the sentences to run concurrently with each other;

• 5 years on one count of conspiracy, 10 years on one count of securities fraud, and 5 years on another count of conspiracy, the sentences to run consecutively to each other and concurrently with the bank fraud sentence; and • 10 years on each of the other securities fraud counts, the sentences to run concurrently with each other and the other sentences.

In addition, the Rigas family and the government reached a settlement of other matters, under which the Rigases forfeited over $1 billion in assets to Adelphia. The liquidated value of these assets was $715 million.

Appeal and Resentencing

The Rigases appealed their convictions, and on May 24, 2007, another panel of our Court affirmed the convictions on all counts except one count of bank fraud — "Count 23"—for which it found insufficient evidence. See Rigas, 490 F.3d at 236, 239. However, the panel concluded that there was sufficient evidence to support a related count of bank fraud—"Count 22." Id. at 235-36. The panel remanded the cause for resentencing. Id. at 239.

No new PSR was prepared for resentencing, but at the District Court's request, the Probation Office informed the District Court by letter that the appropriate sentence under the Guidelines was still life imprisonment because the "aggregate of the statutory maximum terms of the [remaining] counts of conviction" was 185 years, reduced from 215 years. Special App. 17. The District Court conducted a resentencing hearing on May 22, 2008 and issued a written opinion and order on June 24, 2008. The District Court held that it was not required to resentence defendants de novo because Count 23 was a small part of the overall conviction and ran concurrently with Count 22, which this Court upheld. Accordingly, the District Court concluded that the reversal was akin to a "sentencing" error rather than a "conviction" error, and that only a "limited" resentencing was required. Special App. 18-19. The District Court expressly rejected the Rigases' argument that under United States v. Quintieri, 306 F.3d 1217 (2d Cir. 2002), resentencing had to be de novo because the reversal was based on a "conviction" error, not a "sentencing" error, and characterized this distinction as a "mechanical" test. Id.

Nevertheless, the District Court concluded in an alternative holding that even under de novo or "holistic" resentencing, there was "no basis for a reduction of [a] sentence which is broader than the relatively minor adjustment occasioned by the reversal of Count 23. Indeed, ... the sentence previously imposed was fully justified under all of the circumstances." Special App. 23. In reaching this conclusion, the District Court addressed and rejected the Rigases' challenges to the twenty-six level sentencing enhancement for loss in excess of $100 million. The Court also observed that the Rigases "made no claim that the reversal of [the conviction on] Count 23 ... [affects] the strength or substance of the convictions on the 17 other counts as to which the Court of Appeals noted there was ample evidence." Special App. 23-24. Indeed, the District Court concluded that the reversal on Count 23 altered neither the applicable Guidelines range, nor "the seriousness of the[ir] ... crimes, nor the suffering which their conduct inflicted on so many people." Special App. 24.

Despite observing that there was "no basis for a reduction" in the Rigases' sentences, Special App. 23, the District Court in fact applied a "minimal adjustment," reducing each sentence by three years, to 12 and 17 years for John and Timothy Rigas, respectively. Special App. 24.

Motion for a New Trial

On July 5, 2007—prior to resentencing—defendants filed a motion for a new trial pursuant to Rule 33 of the Federal Rules of Criminal Procedure on the basis of alleged "newly discovered evidence" of perjury by their former co-defendant James Brown, who had testified at the criminal trial as a government witness and later allegedly provided contradictory testimony in a civil proceeding. On November 20, 2007, the District Court denied the motion on the grounds that (1) Brown did not commit perjury, see United States v. Rigas, No. 02-CR-1236, 2007 WL 4145282, at *1-5, 2007 U.S. Dist. LEXIS 85590, at *4-11 (S.D.N.Y. Nov. 20, 2007); (2) the post-trial depositions of Brown and other witnesses in a civil proceeding were newly available, not newly discovered, since defendants could have pursued their testimony before or during the criminal trial, but did not do so, see id. at *5, 2007 U.S. Dist. LEXIS 85590, at *11-15; and (3) even if Brown's testimony were perjured or newly discovered, it would not have affected the outcome of the criminal trial, see id. at *5-6, 2007 U.S. Dist. LEXIS 85590, at *15-16.

Motion to Compel Discovery

On December 4, 2007, defendants filed a motion to compel the government to produce its notes from interviews with Carl...