U.S. v. Fruchter

• Decision Date: 14 June 2005
• Docket Number: No. 02-1422(L).,No. 02-1542(CON).,No. 02-1561(CON).,No. 02-1474(CON).,No. 02-1552(CON).,No. 02-1451(CON).,02-1422(L).,02-1451(CON).,02-1474(CON).,02-1542(CON).,02-1552(CON).,02-1561(CON).
• Citation: 411 F.3d 377
• Parties: UNITED STATES of America, Appellee, v. Philip FRUCHTER, Lawrence Braun, Dauda Yague, Mamadou Sylla, Samba William and Frank Singh, Defendants-Appellants, Steven Fruchter, Mitchell Grand, Miguel Mercedes and Muninauth Pulchan, Defendants.
• Court: U.S. Court of Appeals — Second Circuit

411 F.3d 377

UNITED STATES of America, Appellee, v. Philip FRUCHTER, Lawrence Braun, Dauda Yague, Mamadou Sylla, Samba William and Frank Singh, Defendants-Appellants, Steven Fruchter, Mitchell Grand, Miguel Mercedes and Muninauth Pulchan, Defendants.

No. 02-1422(L).

No. 02-1451(CON).

No. 02-1474(CON).

No. 02-1542(CON).

No. 02-1552(CON).

No. 02-1561(CON).

United States Court of Appeals, Second Circuit.

Argued June 14, 2004.

Decided June 14, 2005.

Joshua L. Dratel (Marshall A. Mintz, on the brief), Joshua L. Dratel, P.C., New York, NY, for Defendant-Appellant Lawrence Braun.

Maurice H. Sercarz, New York, NY, for Defendant-Appellant Daouda Yague.

William J. Stampur, Hurwitz Stampur & Roth, New York, NY, for Defendant-Appellant Mamadou Sylla.

Daniel Noble, New York, NY, for Defendant-Appellant Samba William.

Arthur J. Viviani, New York, NY, for Defendant-Appellant Frank Singh.

Robin W. Morey, Assistant United States Attorney (David N. Kelley, United States Attorney for the Southern District of New York, Sarah Lai, Barbara A. Ward, Laura Grossfield Birger, and Gary Stein, Assistant United States Attorneys, on the brief), New York, NY, for Appellee.

Before: WALKER, Chief Judge, B.D. PARKER and WESLEY, Circuit Judges.

JOHN M. WALKER, JR., Chief Judge.

Defendants-appellants¹ Lawrence Braun, Daouda Yague, Mamadou Sylla, Samba William, and Frank Singh appeal their convictions in the United States District Court for the Southern District of New York (Michael B. Mukasey, Chief Judge), following an eleven-week jury trial, for violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., the federal mail fraud statute, 18 U.S.C. § 1341, and the federal conspiracy statute, 18 U.S.C. § 371.

Appellants raise numerous challenges to their convictions and sentences, all but one of which we address in a summary order, filed today, that affirms the district court in part and remands for proceedings consistent with United States v. Booker, 543 U.S. ___, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), and United States v. Crosby, 397 F.3d 103 (2d Cir.2005). The sole issue addressed in this opinion is the constitutionality under the Sixth Amendment² of the district court's imposition, pursuant to 18 U.S.C. § 1963, of a forfeiture order against appellant Braun, in light of the Supreme Court's decisions in Blakely v. Washington, 542 U.S. 296, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004), and Booker, where the forfeiture amount was based in part on facts found by the district judge by a preponderance of the evidence. The disposition of this appeal was delayed to accommodate the legal developments that followed upon Blakely and culminated in Booker. We now affirm.

BACKGROUND

From at least 1994 until 1997, Braun — along with Steven and Philip Fruchter — owned and operated a mail sorting and metering company in Manhattan called American Presort, Inc. ("API"). API acted as a kind of middleman between the Postal Service and private companies engaged in bulk mailings. The companies would send large numbers of letters to API for sorting and (in some cases) metering. API would then either transport the processed mail to the post office or have the postal employees pick it up. In theory, this arrangement benefitted everyone concerned. Pursuant to the Postal Service's "work share" regulations, API — in return for doing preliminary mail processing work — received discounted postage rates. It then, in theory, passed some of those savings on to its customers, achieving a profit by charging a rate somewhere between the standard rate and the discounted rate. The customers saved money, and the Postal Service was spared a considerable amount of work.

In practice, however, API was overcharging its customers, passing off unsorted mail as sorted mail, using defective postage meters to get free postage, bribing postal employees and customer employees, and under-representing to the Postal Service the number of letters it had processed. Braun, a one-third co-owner of API, was in charge of finances and garnered substantial proceeds from API's illegal activities.

The government charged Braun in a multi-count indictment. After an eleven-week jury trial, Braun was convicted of (1) racketeering, based on mail fraud against API's customers; (2) RICO conspiracy; (3) general conspiracy; and (4) mail fraud against customers. The jury, however, acquitted Braun of mail fraud against the Postal Service and of making false statements to the Postal Service, and deadlocked on the charge of postage meter fraud.

On July 9, 2002, the district court sentenced Braun principally to sixty months' incarceration and ordered criminal forfeiture, pursuant to 18 U.S.C. § 1963, of approximately $20.7 million. That amount, like certain sentencing enhancements imposed by the district court, was based in part on proceeds derived from conduct with which Braun had been charged, but of which he was ultimately acquitted. This appeal followed.

DISCUSSION

Braun claims that the district court's imposition of criminal forfeiture pursuant to 18 U.S.C. § 1963 violated the Sixth Amendment.³ Specifically, Braun contends that under the Supreme Court's decisions in Blakely and Booker, the district court was required to determine the forfeiture amount only by reference to conduct that had been proved to the jury beyond a reasonable doubt.

I. Preliminary Issues

Before discussing the merits of Braun's claim, we address two preliminary matters. First, the parties dispute the proper standard of review. The government contends that Braun's forfeiture claim is reviewable only for plain error because he did not raise a Sixth Amendment challenge to the forfeiture order below.⁴ See Johnson v. United States, 520 U.S. 461, 466-67, 117 S.Ct. 1544, 1548-49, 137 L.Ed.2d 718, 727 (1997). Braun, however, maintains that he expressly preserved before the district court a Sixth Amendment challenge to the inclusion of acquitted conduct in his sentence and forfeiture amount, and, therefore, that the harmless error standard applies. See, e.g., United States v. Beverly, 5 F.3d 633, 639 (2d Cir.1993). Determining the appropriate standard of review to apply to claims of constitutional error, however, is crucial only when an error actually exists. See United States v. Dinome, 86 F.3d 277, 282 (2d Cir.1996). Because we conclude that the district court committed no error, it is unnecessary to determine the applicable standard of review.

Second, we note that our consideration of Braun's claim is somewhat unusual. The Supreme Court has held that there is no Sixth Amendment jury trial right to a forfeiture determination. Libretti v. United States, 516 U.S. 29, 49, 116 S.Ct. 356, 367-68, 133 L.Ed.2d 271, 289 (1995). Relying on Libretti, we have previously rejected claims that proof beyond a reasonable doubt is required in forfeiture proceedings. See, e.g., United States v. Bellomo, 176 F.3d 580, 595 (2d Cir.1999). Because Libretti has direct application in this case, we are bound by its holding even if it might appear "to rest on reasons rejected in some other line of decisions." Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 484, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989). Nevertheless, we consider Braun's forfeiture argument at some length because of the change wrought by Blakely and Booker in the law of criminal punishment. Although we are bound by Libretti, we decline to rely solely on that case's reasoning in affirming the district court's forfeiture order.

In Libretti, the Supreme Court held that "the right to a jury verdict on forfeitability does not fall within the Sixth Amendment's constitutional protection." Libretti, 516 U.S. at 49, 116 S.Ct. at 367-68. Specifically, the Court found that criminal forfeiture was "an aspect of sentencing" and thus fell beyond the Sixth Amendment's purview. Id. at 48, 116 S.Ct. at 367-68; see also Bellomo, 176 F.3d at 595 ("[C]riminal forfeiture is part of the process of criminal sentencing. Fact-finding at sentencing is made by a preponderance of the evidence." (internal citation omitted)). In other words, Libretti and its progeny relied on a distinction between determinations of guilt and determinations of punishment. The latter, under Libretti, simply were not subject to the Sixth Amendment's requirements.

Braun argues that the distinction between guilt and sentencing determinations, however, has been undermined by three subsequent Supreme Court cases that have revolutionized criminal sentencing. In essence, Braun contends that Apprendi and its progeny have so undercut Libretti as to have overruled it sub silentio. In Apprendi, the Court held that "[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt." 530 U.S. at 490, 120 S.Ct. at 2362-63 (emphasis added). Four years later, the Court extended Apprendi's reach to Washington State's determinate sentencing regime, finding that "the relevant `statutory maximum' is not the maximum sentence a judge may impose after finding additional facts [beyond what the jury has found], but the maximum he may impose without any additional findings." Blakely, 124 S.Ct. at 2537 (emphasis in original). Accordingly, the Blakely Court reiterated that the maximum sentence a judge may impose is the sentence authorized "solely on the basis of the facts reflected in the jury verdict or admitted by the defendant." Id. (emphasis omitted). In Booker, the Supreme Court applied Blakely's logic to the federal Sentencing Guidelines and found them unconstitutional because they mandated sentencing enhancements above the Guidelines range authorized solely by the jury's verdict, where the sentencing judge found certain facts by a preponderance of the evidence. 125 S.Ct. at 756.

Braun argues that in extending Apprendi's Sixth Amendment holding to the sentencing...