U.S. v. Marks

• Decision Date: 13 June 2008
• Docket Number: No. 05-30218.,05-30218.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Richard Ernest MARKS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

530 F.3d 799

UNITED STATES of America, Plaintiff-Appellee, v. Richard Ernest MARKS, Defendant-Appellant.

No. 05-30218.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 16, 2007.

Filed June 13, 2008.

William C. Broberg (argued), Seattle, WA, for the defendant-appellant.

Alan Hechtkopf, Gregory V. Davis (argued), Tax Division, Department of Justice, Washington, D.C., Jeffrey C. Sullivan (of counsel), United States Attorney, Seattle, WA, for the plaintiff-appellee.

Appeal from the United States District Court for the Western District of Washington; John C. Coughenour, District Judge, Presiding. D.C. No. CR-02-00423-002-JCC.

Before: B. FLETCHER, C. ARLEN BEAM,^* and PAMELA ANN RYMER, Circuit Judges.

BETTY B. FLETCHER, Circuit Judge:

Defendant Richard Marks ("Marks") was convicted of numerous offenses arising from his involvement in Anderson's Ark and Associates ("AAA"), an organization that created, promoted, and implemented schemes to assist U.S. taxpayers in the evasion of their income tax liabilities and that also defrauded its own clients. Marks was sentenced to serve a prison term and to pay restitution.

Marks appeals his conviction and sentence on several grounds: that the district court denied him a fair trial because it was biased against him and the other pro se defendants; that the court erred in failing to address Marks' jurisdictional challenges; that the court's restitution order is invalid because it was not entered until after the ninety-day statutory period set forth in 18 U.S.C. § 3664(d)(5); that the court's ex parte entry of the restitution order violated Marks' right to be present at a critical stage of the proceeding and his right to allocute; that the court erred in failing to sua sponte examine Marks' competence to stand trial; and that the court erred in allowing Marks to proceed to trial pro se.

We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

I.

In December 2002, the government indicted Marks and nine other defendants in the Western District of Washington. The government filed a superseding indictment in December 2003 and a second superseding indictment in August 2004. The second superseding indictment charged the defendants with various counts of conspiracy, aiding and assisting in the preparation and filing of false tax returns, mail fraud, wire fraud, international money laundering, and conspiracy to commit money laundering.

In October 2003, at Marks' first arraignment, the district court appointed counsel to represent Marks. Soon thereafter Marks filed a motion to proceed pro se and his appointed counsel likewise filed a motion to allow Marks to proceed pro se with standby counsel. At a hearing on the motions, Marks stated that while he wanted "effective assistance of counsel," he did not wish to be represented by someone whose "primary obligation" was to the court. Marks also stated that he was not requesting standby counsel. The court denied both motions.

In March 2004, the district court held a hearing on appointed counsel's motion to withdraw. Marks repeated that he wished to have "effective assistance of counsel," but told the court that he found his attorney "not qualified in the law to be counsel" and stated that he "would rather go pro se than have the Court appoint an attorney." The court granted the motion to withdraw but appointed new counsel to represent Marks.

Marks' new counsel subsequently filed a motion to withdraw on the grounds that Marks had twice refused to meet with him, had informed him that he did not wish to be represented by him, and had signed a statement that he wanted to represent himself so he could speak and argue for himself. At a hearing on the motion, Marks' counsel repeated that Marks wished to act as his own attorney and informed the court that Marks had already acted as his own attorney by "filing numerous pleadings on his own." Marks complained that both appointed counsel were "incompetent" and stated that he wanted to represent himself.

The court subsequently held a hearing, pursuant to Faretta v. California, 422 U.S. 806, 95 S.Ct. 2525, 45 L.Ed.2d 562 (1975), on Marks' request to proceed pro se. After explaining to Marks the dangers and disadvantages of representing himself, the court asked Marks whether he still wished to represent himself and waive his right to counsel. Marks responded: "Oh, I think no matter what I can represent myself better than anybody you've provided me. It's entirely voluntary." The court granted counsel's motion to withdraw and allowed Marks to proceed pro se.

Throughout the proceedings, Marks filed several pretrial motions in which he moved to dismiss the case against him for lack of subject matter and personal jurisdiction. The court denied the motions without a hearing.

During a 37-day jury trial, in which Marks and two of the other ten defendants proceeded pro se, the government presented evidence about AAA and Marks' role in it. AAA was founded in 1996 by Keith Anderson and was administered and controlled by Keith and Wayne Anderson. Marks was AAA's lead accountant, supervising nine other AAA-affiliated accountants. AAA was essentially an offshore trust program, based in Costa Rica, that sold "membership" to wealthy individuals as a mechanism to move untaxed funds belonging to those individuals offshore to Costa Rican bank accounts. The bank accounts were set up to create the appearance that these AAA clients neither owned nor controlled the funds, whereas in fact they did own and control them. AAA helped its clients repatriate the funds in various ways, giving them access to the untaxed funds for personal use.

The government also presented evidence that while AAA purported to provide investment, tax, and financial services to thousands of clients, it functioned primarily to enrich the defendants and their co-conspirators. For example, AAA defrauded its own clients through a Ponzi scheme in which AAA promised substantial tax-free investment returns on funds deposited with AAA. In reality, however, AAA never invested those funds, and clients who believed they were making withdrawals from their individual investment accounts with AAA were in fact withdrawing funds deposited by other AAA clients.

The jury found Marks guilty of one count of conspiracy to defraud the United States in violation of 18 U.S.C. § 371, one count of conspiracy to commit wire and mail fraud in violation of 18 U.S.C. § 371, twenty-three counts of aiding and assisting in the preparation and filing of false income tax returns in violation of 26 U.S.C. § 7206(2), ten counts of mail fraud in violation of 18 U.S.C. § 1341, and nine counts of wire fraud in violation of 18 U.S.C. § 1343.

On April 22, 2005, the district court sentenced Marks to fifteen years imprisonment followed by three years of supervised release, and imposed a $25,000 fine and a $4,400 penalty assessment. During the sentencing hearing, the government stated that it was seeking restitution in the amount of $42,311,742 as to all defendants. However, the government indicated that the restitution amount could become less because some of the government's letters mailed to victims of AAA's fraud were being returned "address unknown." Accordingly, the government requested an additional ninety days before the court would enter a final order of restitution. The court granted the government's request but indicated both at the hearing and on Marks' judgment and commitment order that the final restitution amount could be as much as $42,311,742.

On September 26, 2005, Marks received a copy of the government's proposed amended judgment order showing a restitution amount of $30,738,395.28, with $23,942,282.28 due the IRS and $6,796,113 due 145 defrauded AAA clients. On October 14, 2005, Marks filed a written objection to the proposed amended judgment order, in which he argued, among other things, that the government had failed to provide evidence supporting the calculation of the restitution amount. On October 20, 2005, well beyond ninety days after entry of judgment, the district court signed and filed an amended judgment in which it ordered Marks to pay restitution in the amount proposed by the government.¹ The court did not hold a hearing before filing the amended judgment.

Marks timely appealed.

II.

A.

Marks argues that the district court violated his right to a fair trial and due process by treating him and the pro se defendants collectively in a manner that was biased or created the appearance of being biased.

1. Applicable Standards

"`A fair trial in a fair tribunal is a basic requirement of due process.'" Tracey v. Palmateer, 341 F.3d 1037, 1048 (9th Cir.2003) (quoting In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623, 99 L.Ed. 942 (1955)). A judge's conduct justifies a new trial if the record shows actual bias or leaves an abiding impression that the jury perceived an appearance of advocacy or partiality. See United States v. Parker, 241 F.3d 1114, 1119 (9th Cir.2001); United States v. Scholl, 166 F.3d 964, 977 (9th Cir.1999). However, "[a] federal judge has broad discretion in supervising trials, and his or her behavior during trial justifies reversal only if [he or she] abuses that discretion." United States v. Laurins, 857 F.2d 529, 537 (9th Cir.1988) (citations omitted).

The Supreme Court has recognized that certain courtroom practices are so inherently prejudicial that they deprive the defendant of a fair trial. Carey v. Musladin, 549 U.S. 70, 127 S.Ct. 649, 651, 166 L.Ed.2d 482 (2006). "[T]he Constitution prohibits any courtroom arrangement or procedure that `undermines the presumption of innocence and the related fairness of the fact-finding process.'" United States v. Larson, 495 F.3d 1094 (9th Cir. 2007) (en banc), adopting in part United States v. Larson, 460 F.3d 1200, 1214 (9th Cir.2006) (quoting Deck v. Missouri, 544 U.S. 622, 630, 125 S.Ct. 2007, 161 L.Ed.2d 953 (2005)). "The presumption is so...