U.S. v. Speakman

• Decision Date: 02 February 2010
• Docket Number: No. 08-1332.,08-1332.
• Citation: 594 F.3d 1165
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Lary Lee SPEAKMAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

594 F.3d 1165

UNITED STATES of America, Plaintiff-Appellee, v. Lary Lee SPEAKMAN, Defendant-Appellant.

No. 08-1332.

United States Court of Appeals, Tenth Circuit.

February 2, 2010.

Richard J. Banta, Denver, CO, for Defendant-Appellant Lary Lee Speakman.

Paul Farley, Assistant United States Attorney (David M. Gaouette, Acting United States Attorney and Andrew A. Vogt, Assistant United States Attorney, on the brief) Denver, CO, for Plaintiff-Appellee United States of America.

Before TYMKOVICH, ALARCON,^* and EBEL, Circuit Judges.

EBEL, Circuit Judge.

On June 13, 2008, Lary Lee Speakman pleaded guilty to one count of wire fraud, in violation of 18 U.S.C. § 1343. Mr. Speakman was sentenced to forty-seven months in prison and ordered to pay $1,419,205.77 in restitution. On appeal, Mr. Speakman challenges only the restitution orders entered by the district court, which we have jurisdiction to review under 28 U.S.C. § 1291. For the following reasons, we REVERSE.

I. BACKGROUND

The following facts were stipulated to in the plea agreement. Mr. Speakman became a financial consultant with Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") in its Denver office in about 1996. In September 1996, Mr. Speakman and his wife, Carolyn Speakman, opened a joint account at Merrill Lynch that Mr. Speakman managed as a Merrill Lynch financial consultant. In October 1998, Mrs. Speakman opened an account at Merrill Lynch in her name only, but managed by her husband. She deposited approximately $346,417 worth of stock into the account. In 2000, Mrs. Speakman made two additional deposits of stock she inherited into the same account, totaling over $2.1 million. Mrs. Speakman signed a limited power of attorney in relation to the account, granting her husband the authority to buy and sell securities in the account, but denying him use of those funds or the ability to transfer funds out of the account.

Despite lacking the authority to do so, Mr. Speakman transferred money and securities from Mrs. Speakman's account without her authorization numerous times from 1999 through 2005. On several occasions between 1999 and 2003, Mr. Speakman transferred securities from Mrs. Speakman's account to the joint account and then sold those securities for $225,370.29. On thirty-three additional occasions between 1999 and 2002, he transferred $1,126,300 from Mrs. Speakman's account to the joint account by forging her signature on Merrill Lynch forms. On an additional forty-three occasions from 1999 to 2004, Mr. Speakman wrote, or caused Merrill Lynch to write, checks totaling $257,015 on Mrs. Speakman's account payable to himself. Mr. Speakman forged his wife's signature either on the checks themselves or on the Merrill Lynch forms authorizing the checks.

Mr. Speakman transferred most of the money that went through the joint account to other accounts. In particular, Mr. Speakman wire transferred $1,308,135, in a series of fifty-three transfers, to an account for CDM Enterprises, Inc., an account he held at Evergreen National Bank in Evergreen, Colorado. Mr. Speakman controlled and possessed signatory authority over the account, which appears to have been funded largely, if not entirely, by these illegal transfers. Mr. Speakman used much of this money in the CDM account for the benefit of Roxanne Rouser. Ms. Rouser was a former martial arts student of Mr. Speakman's who had since opened her own self-defense instruction business. Mr. Speakman and Ms. Rouser also had a romantic relationship during this time, although Mr. Speakman claims it was brief and over by the mid-1990s. Mr. Speakman wrote forty-five checks from the CDM account directly to Ms. Rouser, totaling $439,050. He also wrote checks from the CDM account, totaling $115,940, to the United States Treasury and Colorado Department of Revenue to satisfy Ms. Rouser's tax obligations, as well as those of her self-defense business.

Mr. Speakman also bought Ms. Rouser a number of gifts with his wife's money. For instance, he wrote a CDM check for $6,554.10 to buy her a motorcycle on June 23, 2000. On March 11, 2002, he wrote another CDM check for $7,423.32 to pay for a vacation for Ms. Rouser and one of her friends. Mr. Speakman also bought Ms. Rouser larger gifts with his wife's money, including a house and a diamond ring. For the house, Mr. Speakman caused Merrill Lynch to transfer $485,000 out of Mrs. Speakman's account to the joint account by forging her signature on an authorization form in October 2002. Mr. Speakman then had Merrill Lynch transfer the money to the CDM account, which he accomplished by again forging Mrs. Speakman's name. Mr. Speakman wire-transferred most of the money from the CDM account to an account for Satori Group, L.P., a company founded by him and Ms. Rouser. Ms. Rouser used this money to purchase the house, and received an additional $54,000 from the CDM account to cover various insurance and tax payments for the house. Mr. Speakman claims that he and Ms. Rouser intended to "flip" the house for a profit, but that appears to have never happened, and the house became Ms. Rouser's residence. Later, in August 2003, Ms. Rouser made a $20,000 deposit on a diamond ring, and Mr. Speakman paid the remaining $63,000 owed on the ring by writing a check drawn on Mrs. Speakman's account. Mr. Speakman forged his wife's signature on the check and wrote her driver's license number on it.

Mr. Speakman also used money from the CDM account for reasons unrelated to Ms. Rouser. For instance, he used $260,275.92 from that account to reimburse some of his Merrill Lynch clients.¹ He also used approximately $202,300 from the account to make personal investments in several companies. In 2003, Mr. Speakman wrote two $5,000 checks from the CDM account as donations to the Golden Sun Foundation.

Mrs. Speakman eventually learned of her husband's fraud and recorded a telephone conversation with him on August 17, 2005. In that conversation, she accused him of forging her signature on the Merrill Lynch authorization forms, to which he replied, "I can't imagine I did all of that. Maybe I did." Mr. Speakman eventually admitted to forging her signature on the form transferring $485,000 from her account, as well as forging her signature on the check used to buy Ms. Rouser a diamond ring.

On October 23, 2007, a federal grand jury indicted Mr. Speakman on nine counts of wire fraud in violation of 18 U.S.C. § 1343, two counts of engaging in monetary transactions involving criminally derived property in violation of 18 U.S.C. § 1957(a), and one count of uttering and possessing a forged security in violation of 18 U.S.C. § 513(a). Mr. Speakman reached a plea agreement with the government, and, on June 13, 2008, pleaded guilty to one count of wire fraud. On September 8, 2008, the United States District Court for the District of Colorado entered judgment against Mr. Speakman and sentenced him to forty-seven months in prison, three years of supervised release, and a special assessment of $100.

In addition, the court ordered Mr. Speakman to pay $1,225,000 in restitution to Merrill Lynch, and $194,205.77 to the Crime Victims Fund (the "Fund"). According to the Presentence Investigation Report ("PSR"), the restitution owed to Merrill Lynch was the result of a National Association of Securities Dealers (NASD) arbitration proceeding initiated by Mrs. Speakman against both Merrill Lynch and Mr. Speakman. In that proceeding, Mr. Speakman was held liable for $1,242,100. As a result of the arbitration, Merrill Lynch paid Mrs. Speakman $1,225,000. As detailed below, the award does not explicitly state the basis of Merrill Lynch's liability. The district court apparently did not have a copy of the arbitration award at the time of sentencing, and was made aware of Merrill Lynch's liability only through the PSR. On this basis, the district court concluded that Merrill Lynch was a victim of Mr. Speakman's fraud, and, therefore, Mr. Speakman was obligated to pay Merrill Lynch $1,225,000 in restitution.

The $194,205.77 sum that Mr. Speakman was ordered to pay to the Fund is the amount of restitution the court calculated that Mrs. Speakman was owed, after subtracting the amount Merrill Lynch had paid her and subtracting a portion of the amount she had recovered from Mr. Speakman in a civil suit in state court.² 18 U.S.C. § 3664(j)(2)(B) ("Any amount paid to a victim under an order of restitution shall be reduced by any amount later recovered as compensatory damages for the same loss by the victim in ... any State civil proceeding...."). In a letter to the probation officer who prepared the Presentence Investigation Report, Mrs. Speakman expressly declined further restitution from Mr. Speakman:

I would not want to receive any restitution obtained at the expense of any other victim. Furthermore, I believe that a judgment in my favor against Mr. Speakman could set up a situation where he might pursue me with empty promises that he was going to make payments. I do not want to again be subjected to Mr. Speakman's emotional abuse.

The district court nevertheless felt compelled under the Mandatory Victim Restitution Act (MVRA), 18 U.S.C. § 3663A, to order Mr. Speakman to pay restitution for this loss. Because Mrs. Speakman disavowed her interest in the restitution, the court ordered Mr. Speakman to pay the amount that would be owed to Mrs. Speakman to the Crime Victims Fund. Mr. Speakman challenges both of these restitution awards, arguing that Merrill Lynch was not a victim of his fraud, and that the court lacked authority to award restitution to the Crime Victims Fund.

II. DISCUSSION

A. Restitution Order to Merrill Lynch

Mr. Speakman first objects to the district court's order that he pay Merrill Lynch $1,225,000 in restitution arising from the arbitration panel's award. We review the factual findings of the district court for clear error and its application of the MVRA de novo. United States v. Gallant, 537...