United States v. Brandel, Case No. 2:13-cr-439-KJD-VCF

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Nevada
Writing for the CourtKENT J. DAWSON UNITED STATES DISTRICT JUDGE
PartiesUNITED STATES OF AMERICA, Plaintiff, v. ANTHONY BRANDEL and JAMES WARRAS, Defendants.
Decision Date13 May 2019
Docket NumberCase No. 2:13-cr-439-KJD-VCF

UNITED STATES OF AMERICA, Plaintiff,
v.
ANTHONY BRANDEL and JAMES WARRAS, Defendants.

Case No. 2:13-cr-439-KJD-VCF

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

May 13, 2019


OPINION, ORDER on RESTITUTION and FINAL ORDER of FORFEITURE

Presently before the Court is the Government's Motion for Forfeiture as to James Warras (#296). Defendant Warras filed a response in opposition (#311) to which the Government replied (#322). Also before the Court is the Government's Motion for Forfeiture as to Anthony Brandel (#298). Defendant Brandel filed a response in opposition (#314) to which the Government replied (#323). Also before the Court is the Government's Motion in Support of Restitution (#297). Defendant Warras filed a response in opposition (#312) as did Defendant Brandel (#315) to which the Government replied (#321).1 Defendant Brandel filed a Supplemental Response (#365) to the Government's motions which the Government replied to (#367).

The Government also moved to Strike Government's Statement in Closing Argument Based on a Mathematical Miscalculation of Exhibit K (#366).

Also before the Court is Defendant Brandel's late filed Motion to Adjust Restitution and

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Forfeiture (#371). The Government filed a response in opposition (#373).

Also before the Court is the Government's Motion to Add GW's Loss to Restitution and to Replace EG with JE, as the actual victim of the monetary loss (#372). Defendant James Warras filed a response in opposition (#375) to which the Government replied (#376/379). Defendant Brandel filed a late opposition (#381).2 The Government also filed a Motion for Entry of Opinion, Restitution Order and Final Order of Forfeiture (#374). Defendant Warras filed a response in opposition (#377) to which the Government replied (#378/380).

I. PROCEDURAL HISTORY and FACTUAL FINDINGS

A jury found Anthony Brandel guilty of Counts 1, 3, 4, 6, 7, 9-13, 15-18, 21-24 of the Indictment, and Defendant James Warras guilty of Counts 1, 3-5, 11-13, 15-17, 19, and 23-24 of the Indictment. See Minutes of Jury Trial, ECF No. 208; Jury Verdict, ECF No. 215. The Court found that Anthony Brandel shall pay the in personam criminal forfeiture money judgment of $4,920,000 pursuant to Fed. R. Crim. P. 32.2(b)(1) and (2); Title 18, United States Code, Section 981(a)(1)(C) with Title 28, United States Code, Section 2461(c); and Title 21, United States Code, Section 853(p). Indictment, ECF No. 1; Minutes of Jury Trial, ECF No. 208; Jury Verdict, ECF No. 215; Amended Preliminary Order of Forfeiture, ECF No. 237. The Court found that James Warras shall pay the in personam criminal forfeiture money judgment of $4,920,000 pursuant to Fed. R. Crim. P. 32.2(b)(1) and (2); Title 18, United States Code, Section 981(a)(1)(C) with Title 28, United States Code, Section 2461(c); and Title 21, United States Code, Section 853(p). Indictment, ECF No. 1; Minutes of Jury Trial, ECF No. 208; Jury Verdict, ECF No. 215; Preliminary Order of Forfeiture, ECF No. 276.

On January 16, 2018, the Court held the evidentiary hearing and oral argument for the sentencing on restitution and forfeiture, with testimony from Federal Bureau of Investigation (FBI) Special Agent Gene Tierney and FBI Forensic Account Gary Daniel Marsh and admitted exhibits that the Court found relevant and reliable (ECF Nos. 368, 369). The Court finds the rules of evidence do not apply and relevant and reliable hearsay can be used in restitution and forfeiture. See U.S. Sentencing Guidelines (U.S.S.G.) § 6A1.3(a); Fed. R. Crim. P.

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32.2(b)(1)(B); United States v. Newman, 659 F.3d 1235, 1245 (9th Cir. 2011), cert. denied, 566 U.S. 915 (2012), abrogated on other grounds, Honeycutt v. United States, 137 S. Ct. 1626, 1632 and 1635 (2017); United States v. Huckins, 53 F.3d 276, 279 (9th Cir. 1995); United States v. Petty, 982 F.2d 1365, 1369 (9th Cir.), amended, 992 F.2d 1015 (9th Cir. 1993); United States v. Riley, 143 F.3d 1289, 1292 (9th Cir. 1998); United States v. Grice, 319 F.3d 1174, 1178-79 (9th Cir.); United States v. Brock-Davis, 504 F.3d 991, 999 (9th Cir. 2007); In re Her Majesty the Queen in Right of Canada, 785 F.3d 1273, 1276 (9th Cir. 2015).

The Court finds the guilt phase of the government's witnesses' testimonies and the trial admitted exhibits are relevant and reliable. The Court finds the sentencing witnesses and exhibits are relevant and reliable evidence: A, A-1, A-1-a, A-1-b, A-1-c, A-1-d, A-1-e, A-1-f, A-1-g, A-1-h, B, C, C-1, D, D-2, E, E-1, E-2, F, F-1, F-2, F-3, F-4, F-4-a, F-4-b, F-4-c, F-4-d, F-4-e, F-4-f, F-5, F-6, F-7, G, G-1, G-2, G-2-a, G-2-b, G-2-c, G-2-d, G-2-e, G-2-f, G-2-g, G-2-h, G-7, G-7-a, G-7-b, H, H-1, H-1-a, H-1-b, H-1-c, H-1-d, H-1-e, H-1-f, H-1-g, H-1-h, 801, 802, 803, 805, I, J, K, M, and N. The Court finds the statements of the SEC attorneys explaining how they obtained the information, made the exhibits, and only Brandel's statements that are against his interest in Ex. M are relevant and reliable evidence.

II RESTITUTION

A. The victims' actual losses are $6,475,000 under the Mandatory Victim Restitution Act.

The Court finds the following are victims with actual losses of Brandel's and Warras's wire fraud scheme and conspiracy to commit wire fraud: GL lost $225,000, N&NA lost $350,000, JS lost $300,000, JH lost $150,000, EK lost $430,000, MB lost $250,000, GD lost $200,000, MK lost $200,000, TF lost $1,000,000, JA lost $540,000, WB lost $330,000, LB lost $300,000, DM lost $400,000, JE lost $500,000, W&CG lost $1,200,000, and GW lost $100,000 because of Brandel's and Warras's criminally convicted conduct. The located victims' actual loss is $6,475,000.3 Admitted exhibits at trial and at sentencing and testimony at trial and

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sentencing.

B. The Mandatory Victim Restitution Act applies to this case.

The Mandatory Victim Restitution Act ("MVRA") requires a restitution order at sentencing where defendants' criminal conduct caused the victims' losses, including offenses committed by fraud or deceit. See 18 U.S.C. §§ 3663A(a)(1) and (c)(1)(A)(ii) and 3664(e) and (f)(1)(A); United States v. Lo, 839 F.3d 777, 788-789 (9th Cir. 2016); United States v. Eyraud, 809 F.3d 462, 467 and 469 (9th Cir. 2015); United States v. Hymas, 780 F.3d 1285, 1293 n.4 (9th Cir. 2015); United States v. Hunter, 618 F.3d 1062, 1064 (9th Cir. 2010); United States v. Gossi, 608 F.3d 574, 578-79 (9th Cir. 2010); United States v. Peterson, 538 F.3d 1064, 1074-75 (9th Cir. 2008); United States v. De La Fuente, 353 F.3d 766, 769 (9th Cir. 2003). The Court finds that since the jury found Brandel and Warras committed a scheme of wire fraud and securities fraud and a conspiracy to commit a scheme of wire fraud and securities fraud, the MVRA requires the Court order restitution to the victims.

1. The Defendants are jointly and severally liable for restitution of $6,475,000.

The Court must impose the full amount of restitution for the identifiable victims' losses without consideration of the defendant's economic circumstances (18 U.S.C. § 3664(f)(1)(A)), or when more than one defendant contributed to the victims' losses, may apportion the restitution amounts among the defendants to reflect their level of contribution to the victims' losses and the economic circumstances of each defendant (18 U.S.C. § 3664(h)), and has discretion to decide the monthly payment towards the restitution (18 U.S.C. § 3664(f)(3)(B)). See 18 U.S.C. § 3664(f)(1)(A), (f)(3)(B), and (h); United States v. Hankins, 858 F.3d 1273, 1276 (9th Cir. 2017); Grice, 319 F.3d at 1177; United States v. Matsumaru, 244 F.3d 1092, 1108-09 (9th Cir. 2001); United States v. Dubose, 146 F.3d 1141, 1148 (9th Cir. 1998), as amended on denial of reh'g (Aug. 31, 1998); United States v. Hymas, 582 F. App'x, 770, 770-71 (9th Cir. 2014); United States v. Reed, 84 F. App'x 983, 987 (9th Cir. 2004).

When the Court asked the defendants if they wanted apportionment at sentencing regarding restitution, they wanted joint and several liability rejecting apportionment. Even if the

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defendants were to request apportionment, and it certainly appears that Warras has requested apportionment, the Court has discretion to apportion the restitution amounts or not to apportion and to order joint and several liability. 18 U.S.C. § 3664(h); United States v. Booth, 309 F.3d 566, 575-76 (9th Cir. 2002); Hymas, 582 F. App'x at 770-71.

The Court may deny apportionment when the defendants are blameworthy regarding their convicted crimes, play essential roles in the scheme to commit wire fraud and securities fraud and conspiracy to commit such scheme of fraud, have culpability, and are partially responsible for the victims' losses. Id. The Court may also deny apportionment because restitution is to make the victims whole, not punish the defendants. Hymas, 582 F. App'x at 771; Newman, 659 F.3d at 1241, abrogated on other grounds, Honeycutt, 137 S. Ct. at 1632 and 1635; Hunter, 618 F.3d at 1064. The Court finds the defendants are jointly and severally liable for restitution of $6,475,000.

2. Preponderance of the Evidence is the Standard of Proof for Restitution.

"The standard of proof for restitution proceedings is preponderance of the evidence as opposed to the standard of clear and convincing evidence required of a sentencing enhancement with a disproportionate impact." Hymas, 780 F.3d at 1293 n.4; 18 U.S.C. §§ 3663A(a)(1) and (c)(1)(A)(ii) and 3664(e) and (f)(1)(A); In re Her Majesty the Queen in Right of Canada, 785 F.3d at 1276; Peterson, 538 F.3d at 1075. The Court finds that the government has met its burden of proof as to the amount of loss sustained by the victims and the Court finds by a preponderance of the evidence that restitution should be ordered, jointly and severally, against defendants.

3. The victims are defined under the MVRA.

Under the MVRA, a victim is (1) "a person" directly and proximately harmed as a result of the commission of an offense for which restitution may be ordered; or (2) in the case of an...

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