U.S. v. Petrie

• Decision Date: 22 August 2002
• Docket Number: No. 01-10262.,No. 01-13824.,01-10262.,01-13824.
• Citation: 302 F.3d 1280
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Robert PETRIE, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

302 F.3d 1280

UNITED STATES of America, Plaintiff-Appellee, v. Robert PETRIE, Defendant-Appellant.

No. 01-10262.

No. 01-13824.

United States Court of Appeals, Eleventh Circuit.

August 22, 2002.

COPYRIGHT MATERIAL OMITTED

Richard L. Rosenbaum, Law Offices of Richard L. Rosenbaum, Fort Lauderdale, FL, Donna R. Newman, Jersey City, NJ, for Defendant-Appellant.

Nancy J. Hess, Robert G. Davies, Pamela A. Moine, Asst. U.S. Atty., Pensacola, FL, Leah A. Butler, Tallahassee, FL, for Plaintiff-Appellee.

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

Before BARKETT and MARCUS, Circuit Judges, and HIGHSMITH^*, District Judge.

HIGHSMITH, District Judge:

Robert Petrie appeals his conviction and the imposition of a 188-month sentence of imprisonment for the offense of conspiracy to launder money. Petrie also seeks to vacate a preliminary forfeiture order issued by the district court approximately six months after sentencing.¹ We affirm Petrie's conviction and sentence. However, we vacate the preliminary forfeiture order because we conclude that the district court lacked jurisdiction to enter it.

PROCEDURAL AND FACTUAL BACKGROUND

On April 27, 1999, the grand jury returned a superseding indictment charging Petrie and eleven other individuals with the offense of conspiracy to launder funds, which were derived from a specified unlawful activity, namely, wire fraud, over a period of time extending from January 1, 1991, through the date of the indictment. A second count charged that all of the property involved in the criminal offense was subject to forfeiture. On October 19, 2000, a jury found Petrie guilty of the conspiracy count. The following day, the jury returned a special forfeiture verdict, finding that the sum of $1 million dollars in funds and other assets remaining at a bank in the Caribbean island of Antigua was property involved in the conspiracy offense or traceable to property so involved. The jury also found that additional property valued at $23 million was similarly involved in the conspiracy offense or traceable to property so involved.

The testimony presented at trial revealed that the members of the conspiracy advertised and promoted the availability of venture capital funding through the national and international news media. Persons who responded to these offers were initially instructed to submit financial information to a "broker" working for the organization. The broker made sure that the prospective borrower could afford an up-front fee, which typically ran into the thousands of dollars. Thereafter, the borrower was referred to a "syndicator" for the purpose of entering into a funding contract. Upon execution of the contract, the up-front fee was placed in an escrow account pending satisfaction of certain conditions. A key condition was that the borrower had to obtain a payment guarantee, in the form of a letter of credit, from a financial institution within several days of execution of the contract. Obtaining the guarantee required some form of collateral, which, in every instance, the prospective borrower was not able to provide. This resulted in a default on the contract and forfeiture of the up-front fee. At that point, the money was moved to an off-shore financial institution and distributed to the members of the conspiracy.

Testimony from victims and members of the organization established that Petrie participated fully in the scheme and that he profited from it. In addition, Petrie formed his own company in Saint Martin, Netherlands Antilles — "B&L Syndicators", also known as "B&L Securities" — as a vehicle to increase his profits from the criminal enterprise. For sentencing purposes, the district court determined that Petrie, individually and through his company, was responsible for laundering $22,968,446.00.

DISCUSSION

1. The forfeiture appeal:

We first address Petrie's appeal of the preliminary forfeiture order ("PFO"). We have an obligation to review, sua sponte, whether we have jurisdiction over this appeal. See Zatler v. Wainwright, 802 F.2d 397, 399 (11th Cir.1986). A PFO is a final and appealable order if the order finally determines the defendant's rights in the forfeited property. See United States v. Gross, 213 F.3d 599, 600 (11th Cir.2000). See also United States v. Pelullo, 178 F.3d 196, 202-03 (3rd Cir.1999); United States v. Bennett, 147 F.3d 912, 914 (9th Cir.1998); United States v. Christunas, 126 F.3d 765, 767-68 (6th Cir.1997); United States v. Libretti, 38 F.3d 523, 526-27 (10th Cir.1994), aff'd, 516 U.S. 29, 116 S.Ct. 356, 133 L.Ed.2d 271 (1995). Because the PFO entered in the present case finally determines Petrie's rights in the property, we find that we have jurisdiction to address Petrie's appeal.

We now turn to the question of whether the district court had jurisdiction to enter the PFO approximately six months after sentencing. Petrie accurately notes that the forfeiture verdict returned by the jury was not mentioned at the sentencing hearing. Moreover, the judgment and commitment order entered on January 8, 2001 merely states that Petrie "was subject to forfeiture as cited in count two." The government waited until June 11, 2001 to move for entry of a PFO. The government sought forfeiture of $1 million in funds and other assets remaining in the Caribbean American Bank located in St. Johns, Antigua, plus an additional $23 million. On June 22, 2001, the district court entered a PFO ordering that a total of $24 million dollars be forfeited to the United States and directing the government to publish notice of the order. The PFO contemplated that, upon adjudication of any third-party interests, a final order of forfeiture would be entered.

We review questions of subject matter jurisdiction de novo. See Milan Express, Inc. v. Averitt Express, Inc., 208 F.3d 975, 978 (11th Cir.2000). Rule 32 of the Federal Rules of Criminal Procedure states that forfeiture procedures are governed by Rule 32.2. Fed.R.Crim.P. 32(d)(2). Pursuant to this rule, upon finding that property is subject to forfeiture, the district court enters a PFO "setting forth the amount of any money judgment or directing the forfeiture of specific property." Fed.R.Crim.P. 32.2(b)(2). The entry of a PFO authorizes the government "to seize the specific property subject to forfeiture" and "to commence proceedings that comply with any statutes governing third-party rights." Fed.R.Crim.P. 32.2(b)(3). At sentencing, "the order of forfeiture becomes final as to the defendant" and "is made a part of the sentence and included in the judgment." Id. In ancillary proceedings, the district court may consider any petitions filed by third-parties claiming an interest in the property to be forfeited. Fed.R.Crim.P. 32.2(c)(1). At the conclusion of the ancillary proceedings, the court enters "a final order of forfeiture by amending the preliminary order as necessary to account for third-party rights." Fed.R.Crim.P. 32.2(c)(2). "If no third-party files a timely claim, the preliminary order becomes the final order of forfeiture." Id. "An ancillary proceeding is not part of sentencing." Fed.R.Crim.P. 32.2(c)(4).

As may be gleaned from the foregoing recitation, the forfeiture scheme prescribed in Rule 32.2 is detailed and comprehensive. Of special note is the fact that the procedure contemplates final disposition of forfeiture issues, as regards a defendant, at the time of sentencing. Indeed, the rule requires that the forfeiture order be made a part of the sentence and included in the judgment. Thus, all post-sentencing activities authorized by Rule 32.2 concern third-party interests. Moreover, nothing in Rule 35 of the Federal Rules of Criminal Procedure provides a basis for modifying the judgment for the purpose of entering an order of forfeiture against a defendant more than seven days after sentencing.² We conclude, therefore, that the district court lacked jurisdiction to enter the June 2, 2001 preliminary forfeiture order. Hence, we vacate said order.

2. The appeal of Petrie's conviction:

Having disposed of the forfeiture appeal, we now turn to Petrie's challenges to his conviction for the offense of conspiracy to launder money. Petrie argues that his federal constitutional rights to a fair trial and due process of law were violated as a result of the district court's rulings and that he was denied the right to present a meaningful defense. Petrie seeks reversal of his conviction and remand for a new trial.

a. Exclusion of lawyers' testimony and business records:

Petrie's main contention is that the trial court erred by excluding as irrelevant the testimony of two lawyers proffered by Petrie. Petrie also assigns error to the trial court's determination that a secretary at B&L Securities, through whom Petrie sought to introduce certain business records, was not qualified to testify as to the origination and compilation of the records. According to Petrie, these two issues go hand in hand. "A trial court has broad discretion in determining the admissibility of evidence; its ruling will not be disturbed on appeal absent an abuse of discretion." United States v. Ruiz, 253 F.3d 634, 639-40 (11th Cir.2001) (per curiam) (quoting United States v. Zapata, 139 F.3d 1355, 1357 (11th Cir.1998)). We review factual findings regarding the admissibility of business records under Rule 803(6) of the Federal Rules of Evidence under a clearly erroneous standard. United States v. Bazemore, 41 F.3d 1431, 1433 (11th Cir.1994) (citing United States v. Beale, 921 F.2d 1412, 1422 (11th Cir.1991)).

i. Exclusion of lawyers' testimony:

At trial, Petrie attempted to call Michael Stewart, Esq., a civil attorney practicing in Florida, and Carol Lashley, Esq., a B&L Securities attorney from the Bahamas. Petrie sought to introduce their testimony in support of his theory that the funding contracts prepared by B&L Securities were legal and in support of his defense of good faith reliance upon the...