U.S. v. Hasson, No. 00-13180.

• Decision Date: 12 June 2003
• Docket Number: No. 00-14012.,No. 00-13180.
• Citation: 333 F.3d 1264
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. John Robert HASSON, a.k.a. Heloneti Galera, a.k.a. Jack Hasson, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

333 F.3d 1264

UNITED STATES of America, Plaintiff-Appellee, v. John Robert HASSON, a.k.a. Heloneti Galera, a.k.a. Jack Hasson, Defendant-Appellant.

No. 00-13180.

No. 00-14012.

United States Court of Appeals, Eleventh Circuit.

June 12, 2003.

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Rhonda Anne Anderson, Rhonda A. Anderson, P.A., Coral Gables, FL, for Defendant-Appellant.

Kathleen M. Salyer, Suzan H. Ponzoli, Jeanne Marie Mullenhoff, Anne R. Schultz, Miami, FL, for Plaintiff-Appellee.

Appeals from the United States District Court for the Southern District of Florida.

Before EDMONDSON, Chief Judge, ANDERSON, Circuit Judge, and

POGUE^*, Judge.

ANDERSON, Circuit Judge:

This case comes to us on direct appeal from a criminal conviction, forfeiture, and sentencing. Defendant-appellant John Robert Hasson ("Hasson") was convicted of conspiracy to commit wire fraud, wire fraud, conspiracy to launder money, and conspiracy to obstruct justice. Hasson was sentenced to 480 months imprisonment, ordered to forfeit several properties, and ordered to pay restitution. On appeal, Hasson challenges the sufficiency of the evidence to demonstrate wire fraud, conspiracy to commit wire fraud, and conspiracy to launder money, and the legality of the restitution and forfeiture ordered against him. For the reasons stated below, we hold that the convictions and sentence imposed should be affirmed.

I. BACKGROUND

A. Factual Background

Between 1981 and 1998, Hasson owned and operated an upscale jewelry and gift store in North Palm Beach, Florida. His store catered to the Palm Beach area's wealthy and famous residents and visitors. His customers frequently spent thousands or hundreds of thousands of dollars on fine gems and jewelry. Not all of his customers, however, got what they bargained for. Hasson sold several customers gems, jewelry, and decorative pieces that failed to match the descriptions he gave. Hasson frequently supported his representations with false appraisals prepared by himself or by a co-conspirator falsely represented to have been independent. Hasson also misrepresented his own credentials to give weight to those appraisals and sometimes provided forged appraisals purporting to have been prepared by third parties.

B. Procedural History

On May 24, 1999, Hasson was charged by superseding indictment with one count of conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 371, four counts of wire fraud in violation of 18 U.S.C. § 1343, two counts of mail fraud in violation of 18 U.S.C. § 1341, one count of conspiracy to launder money in violation of 18 U.S.C. § 1956(h), and one count of conspiracy to obstruct justice in violation of 18 U.S.C. § 371. Hasson and his confederates were alleged to have conspired from 1984¹ through 1999 to devise a scheme "to enrich themselves by defrauding diamond, jewelry and collectibles purchasers of their funds" by means of misrepresenting Hasson's credentials; misrepresenting the various characteristics of items sold; providing false and forged appraisals; misrepresenting Hasson's clientele; billing for fictitious services; substituting flawed, synthetic, or simulant² stones for more valuable gems; creating false scenarios to induce purchases; and covering up the scheme by blaming employees and settling fraud claims under confidentiality agreements. Four interstate wire transmissions and two uses of the mails provided the bases for the substantive counts of mail and wire fraud, though one count of wire fraud was dropped.³

The charged object of the conspiracy to launder money, alleged to exist from 1995 to 1999, was to launder the proceeds of the mail and wire fraud by engaging in financial transactions with such proceeds with the purpose of promoting mail and wire fraud and with the purpose of concealing the source, location, or ownership of proceeds of mail and wire fraud in violation of 18 U.S.C. § 1956(a)(1)(A)(i), (a)(1)(B)(i), and (a)(2)(B)(i) and by engaging in financial transactions of $10,000 or more with the proceeds of mail and wire fraud in violation of 18 U.S.C. § 1957. The charged object of the conspiracy to obstruct justice was to conceal Hasson's and his co-conspirators' involvement in mail and wire fraud and money laundering by witness tampering in violation of 18 U.S.C. § 1512(b) and obstructing justice in violation of 18 U.S.C. § 1503.

Following a seven-week trial, the jury returned a guilty verdict convicting Hasson of conspiracy to commit wire fraud, three counts of wire fraud, conspiracy to launder money, and conspiracy to obstruct justice. The jury found that the objects of the conspiracy to launder money were violations of 18 U.S.C. §§ 1956(a)(1)(A)(i) (promotion of unlawful activity), (a)(1)(B)(i) (concealment of unlawful activity), and 1957 (transaction involving more than $10,000 in unlawful proceeds). The jury found that the object of the conspiracy to obstruct justice was a violation of 18 U.S.C. § 1503.

Following the trial, a criminal forfeiture proceeding was held under 18 U.S.C. § 982. The jury found that $40 million in cash, the contents of seven bank and brokerage accounts, and two parcels of real estate in Jupiter, Florida, and Breckenridge, Colorado, were involved in or traceable to property involved in the conspiracy to launder proceeds of mail and wire fraud. The properties were thus ordered forfeited. Following a sentencing hearing, Hasson was sentenced to 480 months imprisonment and ordered to pay $78,408,691 in restitution to four victims under 18 U.S.C. § 3663A.

We now turn to Hasson's challenges to his convictions, forfeiture order, and sentence. He argues that the evidence is insufficient to prove wire fraud or conspiracy to commit wire fraud, that the evidence is insufficient to prove a conspiracy to launder money, that the restitution ordered against him fails to account for amounts paid victims in civil settlements, and that the forfeiture order and restitution are excessive fines.⁴

II. SUFFICIENCY OF THE EVIDENCE

The sufficiency of the evidence to support a conviction is reviewed de novo. United States v. Miles, 290 F.3d 1341, 1355 (11th Cir.), cert. denied, 537 U.S. 1089, 123 S.Ct. 707, 154 L.Ed.2d 634 (2002). The record is viewed in the light most favorable to the verdict, drawing all reasonable inferences and resolving all questions of credibility in favor of the government. Viewed in such a light, the verdict will be affirmed if a reasonable juror could conclude that the evidence establishes guilt beyond a reasonable doubt. Id.

A. Sufficiency of the Evidence to Prove Wire Fraud and the Conspiracy to Commit Wire Fraud

The elements of wire fraud under 18 U.S.C. § 1343 are (1) intentional participation in a scheme to defraud and (2) use of the interstate wires in furtherance of the scheme. United States v. Ross, 131 F.3d 970, 984 (11th Cir.1997).⁵ To "cause" the interstate wires to be used, the use of the wires need not be actually intended; it need only be reasonably foreseeable. Id. at 985.

The elements of a conspiracy under 18 U.S.C. § 371 are (1) an agreement among two or more persons to achieve an unlawful objective; (2) knowing and voluntary participation in the agreement; and (3) an overt act by a conspirator in furtherance of the agreement. United States v. Adkinson, 158 F.3d 1147, 1153 (11th Cir. 1998).⁶ To prove a conspiracy to commit wire fraud, the government need not demonstrate an agreement specifically to use the interstate wires to further the scheme to defraud; it is enough to prove that the defendant knowingly and voluntarily agreed to participate in a scheme to defraud and that the use of the interstate wires in furtherance of the scheme was reasonably foreseeable. Ross, 131 F.3d at 981; United States v. Smith, 934 F.2d 270, 275 (11th Cir.1991).

Hasson challenges his convictions for wire fraud and conspiracy to commit wire fraud on the same bases. First, he argues that the government did not prove a scheme to defraud because the misrepresentations he made, if any, pertained solely to the market values of the items sold, which, he claims, were easily verifiable or were otherwise easily discernible to a person of ordinary prudence. Second, he argues that the government did not prove the use of the interstate wires in furtherance of the scheme to defraud because the uses of the wires were unforeseeable and were made to make payments for items with regard to which no material misrepresentations were made.

1. Scheme or artifice to defraud

A scheme to defraud requires proof of material misrepresentations, or the omission or concealment of material facts, Neder v. United States, 527 U.S. 1, 25, 119 S.Ct. 1827, 1841, 144 L.Ed.2d 35 (1999), reasonably calculated to deceive persons of ordinary prudence, United States v. Brown, 79 F.3d 1550, 1557 (11th Cir.1996) (construing the mail fraud statute).⁷ That is, not all misrepresentations or omissions constitute a scheme to defraud; the misrepresentation or omission must be material and it must be one on which a person of ordinary prudence would rely. A material misrepresentation is one having a natural tendency to influence, or capable of influencing, the decision maker to whom it is addressed. Neder, 527 U.S. at 16, 119 S.Ct. at 1837. A person of ordinary prudence would not rely on all misrepresentations. Puffery, for example, is not part of a scheme to defraud because a person of ordinary prudence would not rely on it; nor would a person of ordinary prudence engaged in an arm's-length purchase rely on the seller's representations regarding the market value of the property when the market value can be, and should be, easily verified by consulting other sources. Brown, 79 F.3d at 1559.

The record in this case is replete with evidence of material misrepresentations regarding the physical and objective characteristics of the gems and jewelry sold. The government established that Hasson repeatedly misrepresented the carat weight, color...