U.S.A v. Hall

• Decision Date: 02 July 2010
• Docket Number: No. 06-3185.,06-3185.
• Citation: 610 F.3d 727
• Parties: UNITED STATES of America, Appelleev.Robert L. HALL, Jr., Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

610 F.3d 727

UNITED STATES of America, Appelleev.Robert L. HALL, Jr., Appellant.

No. 06-3185.

United States Court of Appeals, District of Columbia Circuit.

Argued Jan. 14, 2010.

Decided July 2, 2010.

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Appeal from the United States District Court for the District of Columbia (No. 05cr00030-01).

Lisa B. Wright, Assistant Federal Public Defender, argued the cause for appellant. With her on the brief was A.J. Kramer, Federal Public Defender.

Suzanne G. Curt, Assistant U.S. Attorney, argued the cause for appellee. With her on the brief were Roy W. McLeese III, Mary B. McCord, and Steven J. Durham, Assistant U.S. Attorneys.

Before HENDERSON, ROGERS and GARLAND, Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge:

Robert L. Hall, Jr. was convicted by a jury of operating a “Ponzi” scheme ¹ for more than two years involving over a million dollars in which more than seventy investors lost all or a large portion of their investment. He challenges his conviction primarily on the ground that the district court failed to conduct an adequate inquiry to determine whether his waiver of his right to counsel under the Sixth Amendment to the U.S. Constitution was voluntary and knowing. Specifically, he maintains the inquiry failed to dispel his belief that his counsel was unprepared for trial. We hold that the district court's inquiry was constitutionally adequate because the district court's findings that Hall's decision to represent himself (with standby counsel) was knowing and voluntary met the criteria in Faretta v. California, 422 U.S. 806, 95 S.Ct. 2525, 45 L.Ed.2d 562 (1975), for determining when a defendant may exercise his constitutional right to forgo his right to counsel. Viewing the proceedings as a whole, we reject Hall's assertion that he faced the constitutional dilemma of choosing between representing himself or accepting unprepared counsel. The district court's colloquy with Hall addressed his complaints by identifying Hall's false premise regarding discovery and by explaining how Hall's generalized complaints did not indicate defense counsel would not provide effective assistance.

We are further unpersuaded by Hall's contentions that a reversal of his conviction is required because plain error occurred when the prosecutor's erroneous closing argument allegedly affected the jury's understanding of the elements of mail, wire, and District of Columbia Code fraud, and when the district court constructively amended the indictment by instructing the jury on a third type of securities fraud not charged in the indictment. As to each error, Hall has failed to show a likelihood that the error affected the verdict or seriously affected the fairness, integrity, or public reputation of judicial proceedings. Regarding closing argument, the jury was instructed that arguments of counsel are not evidence and on the elements of the charged offenses. Regarding the third type of securities fraud, the jury necessarily had to find Hall engaged in a scheme to defraud to convict on the mail, wire, and D.C. fraud counts, and the evidence of his guilt was overwhelming.

However, as the government concedes, Hall's challenges to his sentence, save one, require a remand for resentencing. Accordingly, we affirm the judgment of conviction but remand the case to the district court for resentencing.

I.

The indictment alleged that from February 2001 to October 2003, Hall operated a Ponzi scheme through First United Financial Group, LLC, which Hall owned and operated. The scheme involved soliciting funds from investors by promising high rates of return on investments in properties to be developed for the benefit of low and middle-income African-Americans in the District of Columbia. The government's evidence showed that Hall made false representations to the investors, promised them extraordinarily high rates of return, made no real estate investments, and used money received from later investors to pay initial investors and to sustain the scheme. Hall was indicted on six counts of mail fraud and ten counts of wire fraud, in violation of 18 U.S.C. §§ 1341, 1343; id. § 2, one count of securities fraud, in violation of 15 U.S.C. §§ 77q(a), 77x, and one count of first degree fraud, in violation of D.C.Code §§ 22-3221(a), 22-3222(a)(1); and was subject to forfeiture of $747,169 allegedly obtained by mail or wire fraud, pursuant to 18 U.S.C. § 982(a)(2)(A).

Ten investors in First United who had entered into “asset placement agreements” calling for a set rate of return and payment schedule testified about representations made to them by Hall regarding First United, what if any payments they received, and their efforts to recover their principal. According to Hall's website, which he encouraged potential investors to read, First United was

[o]ne of the fastest growing consulting firms in the Washington DC area ... and has quickly positioned itself as a financial services powerhouse, with a strong focus on educating working class citizens. The keys to the firm's success are effective education and consultation methods, complimented [sic] by the proactive development of client-friendly solution systems. These services are designed to assist clients for whom professional wealth building consultation was previously unaffordable. First United ... envisions that its superior client education systems will secure its place as the icon in financial services for citizens who have been historically disenfranchised from the information that safeguards their financial future.

Gov't. Ex. 18. The website included Hall's photograph, showing a serious looking bespectacled young man in a business suit, who was described as “the twenty-nine year old President & CEO of a multi-million dollar DC based consulting firm,” who came from “humble beginnings” to “quickly ris[e] to national prominence as a young leader in the African-American community.” Id. The web site stated Hall was “[a] decorated Army veteran and former paratrooper.” Id.

Fairly typical of other investors' experience was that of United States Army Warrant Officer William McClain. He was contacted by Hall and First United employee Carletus Willis and told that First United used investor money to renovate properties in low-income neighborhoods in the Trinidad section of Washington, D.C., thereby benefitting African Americans by providing affordable housing and its investors by paying high rates of return. Hall told McClain he would be able to retrieve his investments, and that other investors had received their principal and interest. McClain received a six-page “prospectus” about the Trinidad project, a condominium conversion realty solution for those displaced by “gentrification.” It stated that “by assembling and representing a $21 million investment Buyer Pool (IBP), our firm [First United] acts as the facilitator of a community friendly real estate development system which provides affordable housing to low and moderate income earners.”

On four occasions McClain invested $27,000. His first two investments, both $5,000, promised the return of principal plus sixty percent interest in six months. McClain's wife also invested. When payment was not forthcoming, McClain received letters from First United stating that there had been a banking error delaying the checks and that First United was going to sell property to avoid liquidity problems. With Hall's encouragement, McClain reinvested his principal and the profits he thought he had earned. When he contacted Hall because he had not received any payments, Hall drafted a payment plan calling for payment in two weeks. McClain never received the payments. He also received no response to his October 2003 letter demanding payment. McClain and his wife lost all they had invested in First United. Hall never informed McClain that First United owned no real estate or had no assets to liquidate.

Similarly, Hall induced Villet Gethers, a graduate student at Howard University, to invest $7,000, telling her his investors were happy, she would lose no money, and that the return of her principal was “guaranteed.” He promised her an annual return of seventy-two percent and offered to pay her a commission for every new investor she recruited. Hall told Gethers he had attended Howard University, had experience in finance, and had community responsibilities and insights as an Advisory Neighborhood Commissioner. Gethers lost approximately $4,000 dollars.²

Two former employees of First United described its operations. Carletus Willis described First United's relentless focus on recruiting new investors rather than acquiring property. According to Willis, First United acquired no property. Money to pay early investors came from funds received from later investors, not from real estate investments. Investors' money paid First United's operating expenses, but it was not current on its utilities bills and its checks bounced even as Hall was driving a new Mercedes. Hall told Willis how to solicit business and what to tell investors about the Trinidad project. Willis was aware that the representations he was making to investors were false. When investors complained about not receiving interest payments they were sent a letter stating that property would be sold to pay investors; Hall personally signed the letters. When Willis voiced his discomfort with the operation, Hall complained Willis was not bringing in as much capital as he previously had. Willis also testified that although First United maintained a “virtual office” at 1050 Connecticut Avenue, N.W. (based on space rented at an hourly rate), its actual office was located in Hall's residence.

Lamont Bessicks, Jr., who worked for First United from June to November 2002, testified that Hall had developed the concept for the Trinidad project but it was never implemented. Bessicks had been hired by Hall to locate properties to develop into low and...