United States v. Annamalai

• Decision Date: 24 September 2019
• Docket Number: No. 15-11854,15-11854
• Citation: 939 F.3d 1216
• Parties: UNITED STATES of America Plaintiff - Appellee, v. Annamalai ANNAMALAI, Defendant - Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

939 F.3d 1216

UNITED STATES of America Plaintiff - Appellee,

v.Annamalai ANNAMALAI, Defendant - Appellant.

No. 15-11854

United States Court of Appeals, Eleventh Circuit.

September 24, 2019

Steven D. Grimberg, John Andrew Horn, Samir Kaushal, Lawrence R. Sommerfeld, Jenny R. Turner, U.S. Attorney's Office, ATLANTA, GA, for Plaintiff-Appellee.

Lynn Fant Merritt, Strickland Webster, LLC, ATLANTA, GA, Annamalai Annamalai, USP Marion - Inmate Legal Mail, MARION, IL, Leigh Ann Webster, Strickland Webster, LLC, ATLANTA, GA, for Defendant-Appellant.

Before WILSON and JORDAN, Circuit Judges, and MOORE,^* District Judge.

JORDAN, Circuit Judge:

Annamalai Annamalai appeals his convictions and 327-month sentence for numerous offenses related to his operation of a Hindu temple in Georgia. After reviewing the record, and with the benefit of oral argument, we reverse his convictions for bankruptcy fraud, conspiracy to commit bankruptcy fraud, money laundering (which were based on the underlying specified unlawful activity of bankruptcy fraud), and conspiracy to harbor a fugitive. We also conclude that the government established by a preponderance of the evidence that the loss resulting from Mr. Annamalai’s bank fraud scheme was just over $100,000, but did not prove that it exceeded $400,000. We affirm in all other respects and remand for resentencing.

I

Mr. Annamalai is a self-proclaimed Hindu priest. In 2005, he opened the Hindu Temple and Community Center of Georgia, Inc. in an office building in Norcross, Georgia. The Hindu Temple generated income in part by charging fees for religious and spiritual products and services, including religious ceremonies and horoscopes. See generally Laurence R. Iannaccone & Feler Bose, Funding the Faiths: Toward a Theory of Religious Finance , in The Oxford Handbook of the Economics of Religion 9 (2010) ("[E]ven in the United States, where Hindu temples are more congregationally oriented, fee-for-service financing remains the norm. Visit an[y] Hindu temple or website and you will almost always encounter an explicit menu of price and products.").

The Hindu Temple advertised its services online and in magazines (including one that Mr. Annamalai published) that were distributed in Indian grocery stores and other temples. In typical transactions, followers called the advertised phone number for the Hindu Temple and spoke with Mr. Annamalai or one of the priests he employed. Followers who agreed to purchase a service (like a horoscope reading or prayers) would then provide a credit card number to complete the transaction.

A

The evidence at trial showed that Mr. Annamalai used the Hindu Temple as part of a criminal scheme to defraud his followers and commit bank fraud. Mr. Annamalai used the fraud proceeds to fund a lavish lifestyle, including multiple homes and expensive cars.

For example, Mr. Annamalai charged unauthorized amounts—for services not requested or provided—on his followers’ credit cards. If the followers complained about the unauthorized charges, he would claim that the charges fell under the Hindu Temple’s "no refund" policy. If the followers then disputed the charges with their banks, he would submit false documents with the followers’ signatures—which he had obtained by sending magazines to their homes through certified mail—to the banks. He would tell the banks that the signatures were proof that the followers had ordered the disputed services.

Sometimes, Mr. Annamalai would publish detailed stories of the followers’ confidential personal struggles in his magazine. He would also create altered audio recordings of conversations with the followers and submit them to law enforcement to justify the disputed charges.

In August of 2009, the Hindu Temple filed for Chapter 11 bankruptcy. On November 4, 2009, the bankruptcy court appointed a trustee who became the administrator of the Hindu Temple’s bankruptcy estate. Following his appointment, the trustee quickly closed the Hindu Temple, shut its doors, and did not conduct any more business on its behalf.

A few days after the trustee’s appointment, Mr. Annamalai caused the incorporation and registration of a new temple called the Shiva Vishnu Temple of Georgia, Inc. Mr. Annamalai had previously used that name in magazine advertisements and other documents as an alternative name for the Hindu Temple.

Like the Hindu Temple, the Shiva Vishnu Temple provided religious and spiritual products and services for a fee. A number of followers paid the Shiva Vishnu Temple for religious and spiritual services it provided to them after the Hindu Temple filed for bankruptcy and was shut down by the trustee. These payments formed the basis for the bankruptcy fraud charges against Mr. Annamalai.

B

In 2013, a grand jury in the Northern District of Georgia returned an indictment against Mr. Annamalai and others. The government subsequently obtained two superseding indictments. The second superseding indictment charged Mr. Annamalai with 34 criminal offenses: conspiracy to commit bank fraud in violation of 18 U.S.C. §§ 1349 and 1344 (Count 1); bank fraud in violation of 18 U.S.C. §§ 1344 and 2 (Counts 2–8); filing a false federal income tax return in violation of 26 U.S.C. § 7206(1) (Count 9); conspiracy to commit bankruptcy fraud in violation of 18 U.S.C. §§ 371 and 152(1) (Count 10); bankruptcy fraud in violation of 18 U.S.C. §§ 152(1) and 2 (Counts 11–20); money laundering in violation of 18 U.S.C. §§ 1956(a)(1)(B)(i) and 2 (Counts 21–30); making a false statement in writing in violation of 18 U.S.C. §§ 1001(a)(3) and 2 (Count 31); obstruction of justice in violation of 18 U.S.C. §§ 1503 and 2 (Count 32); making false statements under oath in a bankruptcy proceeding in violation of 18 U.S.C. §§ 152(2) and 2 (Count 33); and conspiracy to harbor a fugitive in violation of 18 U.S.C. §§ 1071 and 371 (Count 34).

Mr. Annamalai sought to dismiss several of the charges, and/or to sever some of the counts, but the district court denied his motions and the case proceeded to trial. After an 11-day trial, and four hours of deliberations, the jury convicted Mr. Annamalai of all 34 charges.

At sentencing, the district court determined that Mr. Annamalai had a total offense level of 39 (based in part on a loss amount of over $400,000 for the bank fraud offenses) and a criminal history category of I, which under the 2013 Sentencing Guidelines produced an advisory recommended imprisonment range of 262 to 327 months. The district court sentenced Mr. Annamalai to 327 months in prison, to be followed by five years of supervised release. It also ordered him to pay restitution in the amount of $550,527.92.

II

Mr. Annamalai challenges the joinder of the 34 offenses and the district court’s denial of his motion to sever several charges that he asserts were unrelated. "We undertake a two-step analysis to determine whether separate charges were properly tried at the same time." United States v. Hersh , 297 F.3d 1233, 1241 (11th Cir. 2002). First, we review de novo whether the charges were properly joined under Federal Rule of Criminal Procedure 8(a). Id. Second, we review the district court’s denial of the defendant’s motion to sever for abuse of discretion. Id.

Rule 8(a) permits an indictment to charge a defendant with multiple offenses when they "are of the same or similar character, or are based on the same act or transaction, or are connected with or constitute parts of a common scheme or plan." We construe Rule 8(a) "broadly in favor of initial joinder" so that charges that are similar may be tried together "even if [the] offenses do not arise at the same time or out of the same series of acts or transactions." Hersh , 297 F.3d at 1241. We reverse only if improper joinder "affect[ed] substantial rights" and "result[ed] in actual prejudice because it had substantial and injurious effect or influence in determining the jury’s verdict." United States v. Zitron , 810 F.3d 1253, 1257 (11th Cir. 2016) (quotations omitted).

Separate charges in complex cases are properly joined as long as they arise out of the same underlying conduct. For example, in United States v. Dominguez , 226 F.3d 1235, 1237 (11th Cir. 2000), we refused to reverse the joinder of 28 counts—conspiracy to possess cocaine with intent to distribute, conspiracy to commit money laundering, money laundering, use of a telephone facility in commission of a felony, and mortgage fraud. Although the charges were seemingly unrelated, the government theorized and later proved at trial that the defendant "submitted fraudulent income tax returns when applying for mortgage loans in order to conceal the fact that his income had been derived from drug activity." Id. at 1239.

Given Dominguez , Mr. Annamalai’s improper joinder argument fails. We determine whether joinder is proper by looking at "the allegations stated on the face of the indictment," id. at 1238 (quoting United States v. Weaver , 905 F.2d 1466, 1476 (11th Cir. 1990) ), and here the grand jury charged that Mr. Annamalai used the Hindu Temple—which later filed for bankruptcy—to carry out a fraudulent scheme and then committed a number of offenses related to that scheme. The indictment alleged that Mr. Annamalai defrauded followers of the Hindu Temple, misled the financial institutions that charged those followers, moved the fraud proceeds (proceeds which he failed to report on his income tax return) to a foreign bank account, improperly concealed property belonging to the Hindu Temple’s bankruptcy estate, committed money laundering with the proceeds of that bankruptcy fraud, and committed a number of illegal acts related to the criminal investigation into his fraudulent activities (submitting a false document to the IRS, obstructing justice, providing false statements under oath, and conspiring to conceal a fugitive). All of these claims arose out of and were connected to the same general fraudulent scheme. Where, as here, there is an "explicit connection between the groups of...