United States v. Goldstein, 18-13321

• Decision Date: 26 February 2021
• Docket Number: No. 18-13321,18-13321
• Citation: 989 F.3d 1178
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. William A. GOLDSTEIN, Marc Bercoon, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

989 F.3d 1178

UNITED STATES of America, Plaintiff-Appellee,

v.William A. GOLDSTEIN, Marc Bercoon, Defendants-Appellants.

No. 18-13321

United States Court of Appeals, Eleventh Circuit.

February 26, 2021

Alana R. Black, Stephen H. McClain, Christopher Conrad Bly, Kelly Kathleen Connors, Assistant U.S. Attorney, Jane Elizabeth McBath, U.S. Attorney Service - Northern District of Georgia, U.S. Attorney's Office, Atlanta, for GA, Plaintiff - Appellee.

Robert F. Parsley, David M. Barnes, Miller & Martin, PLLC, Chattanooga, TN, James Wesley Bryant, Stephanie A. Kearns, Federal Defender Program, Inc., Atlanta, GA, William A. Goldstein, FCI Memphis - Inmate Legal Mail, Memphis, TN, Alexander C. Vey, Miller & Martin, PLLC, Atlanta, GA, for Defendant - Appellant William A. Goldstein.

Leigh Ann Webster, Strickland Webster, LLC, Atlanta, GA, Marc E. Bercoon, FPC Montgomery - Inmate Legal Mail, Montgomery, AL, for Defendant - Appellant.

Before WILSON, BRANCH, and JULIE CARNES, Circuit Judges.

JULIE CARNES, Circuit Judge:

Defendants William Goldstein and Marc Bercoon found themselves facing a 19-count indictment for conspiracy, mail fraud, wire fraud, securities fraud, and money laundering after profiting handsomely from a market-manipulation scheme involving shares of MedCareers Group, Inc. ("MCGI") and a scheme to defraud investors in Find.com Acquisition, Inc. ("Find.com"). The 19 counts were whittled down to 13 during the course of the proceedings. After a ten-day trial, a jury found Defendants guilty on 12 of the 13 counts, acquitting Defendants on the one remaining charge of money laundering but convicting them on two counts of conspiracy, two counts of mail fraud, seven counts of wire fraud, and one count of securities fraud.

Defendants now appeal their convictions, arguing that the district court erred in (1) denying their motions to suppress evidence obtained from wiretaps, (2) denying an evidentiary hearing concerning alleged omissions from a wiretap affidavit, (3) ruling that the trial evidence did not materially vary from the indictment, and (4) entering a $1.9 million forfeiture order against both Defendants. Separately, Defendant Bercoon argues that the Government engaged in prosecutorial misconduct by mischaracterizing the evidence during closing arguments, as well as before the grand jury. And Defendant Goldstein argues that the district court erred (1) in denying his motion to suppress statements he made during an informal telephone interview with an attorney from the Securities and Exchange Commission ("SEC") and (2) in denying an evidentiary hearing as to whether the SEC's civil investigation and the U.S. Attorney's criminal investigation improperly merged. We find Defendants’ arguments unpersuasive and affirm the decisions below.

I. BACKGROUND

Defendants’ convictions arise from two fraud schemes. The first was a "pump and dump" market-manipulation operation in March and May of 2010, which involved MCGI's publicly traded stock. Defendants executed a plan to artificially inflate the price of MCGI stock (i.e., "pump" the stock) by obtaining control of shares, promoting the stock with mass emails and misleading press releases, and making numerous small trades to generate interest. Then, Defendants profited by selling the artificially inflated shares (i.e., by "dumping" the stock). The second scheme involved a plan to sell shares of the privately traded company Find.com via misleading and fraudulent representations. Defendants provided potential investors with written materials—including a "Confidential Investor Information" sheet and a "Confidential Private Placement Memorandum"—falsely stating that five million shares of Find.com were being offered at $1.00 per share and that the proceeds (minus a selling commission of 12.5 cents per share) would be reinvested in the business. In fact, however, shares of Find.com had been sold for less than $1.00 each, sales commissions were higher than 12.5 cents per share, and Defendants used the investment proceeds for their own benefit rather than investing them in the business.

A. The SEC's Investigation and Interview of Goldstein

The Atlanta SEC office started investigating Defendants’ manipulative trades of MCGI stock in the spring of 2010. On June 30, 2010, Atlanta SEC attorney Natalie Brunson called Goldstein for an informal interview in connection with the investigation. By the time of trial in this case, Brunson no longer recalled her discussion with Goldstein, but her notes regarding the conversation reflected that Goldstein said he had received no compensation or shares from MCGI and he did not know whether Peter Veugeler, a co-conspirator in the MCGI scheme, was associated with MCGI.¹ Testimony at trial showed that Goldstein's statements were untrue.

After the June 30 call, Brunson sent Goldstein a follow-up letter enclosing a copy of SEC Form 1662. The letter thanked Goldstein for "taking time today to speak ... voluntarily, about [his] relationship with [MCGI]" and stated, "As I explained, this inquiry is nonpublic and confidential." Form 1662 provided information about a witness's rights, including the right to refuse to speak to the SEC, the right to contact an attorney, and the penalties for providing false information. It also provided information about the routine uses of information gathered by the SEC during an informal investigation, stating that the SEC "often makes its files available to other governmental agencies, particularly United States Attorneys," and that information supplied by a witness "will be made available to such agencies where appropriate."

B. The FBI's Investigation and Wiretap Affidavits

Brunson shared her notes with the Atlanta U.S. Attorney's Office, which began a criminal investigation into the MCGI scheme in August 2010. Two confidential sources, CS-1 (Marc Rosenberg) and CS-2 (Alan Weiner), provided the FBI information during the initial investigation.² Rosenberg was Goldstein's personal assistant and worked for Goldstein and Bercoon for many years prior to the MCGI scheme. He told FBI agents that Bercoon had instructed him to open brokerage accounts to trade MCGI stock and to open a bank account in the name of HMRZ Consulting, LLC ("HMRZ"). Defendants controlled the trading in Rosenberg's brokerage accounts, and they transferred proceeds from the sale of MCGI stock into the HMRZ bank account and their personal bank accounts.

In July 2010, Rosenberg discovered that he had incurred a substantial tax liability as a result of Defendants using his brokerage accounts to execute MCGI trades. Shortly thereafter, he retained a lawyer and agreed to cooperate with the FBI in the MCGI investigation. In recorded phone conversations in February, April, and May 2011, Rosenberg told Bercoon about his tax liability, and Bercoon tacitly acknowledged both that Defendants had used Rosenberg's accounts to trade MCGI stock and that they were responsible for Rosenberg's taxes.

CS-2 (Weiner) began working for Goldstein in 2009. In the summer of 2009, Weiner traveled to Florida with Goldstein to meet David and Donna Levy, two well-known stock promoters.³ Weiner reported that after this meeting, and on the advice of David Levy, Goldstein purchased a shell company that became MCGI. David Levy then introduced Goldstein to Peter Veugeler to promote MCGI's launch and used third party Eric Cusimano⁴ to send email blasts to thousands of potential investors.

Weiner traveled with Goldstein to Florida to meet Veugeler in March 2010. During this trip, and with Weiner present, Goldstein and Veugeler spent several days trading MCGI stock, with Goldstein using Rosenberg's brokerage accounts. Weiner again accompanied Goldstein to meet Veugeler in Florida in May 2010, when the two traded MCGI stock a second time. This time, Veugeler told Weiner and Goldstein that, earlier that day, he had been served with an SEC civil complaint alleging market manipulation in a similar but unrelated scheme. Nevertheless, Goldstein and Veugeler proceeded to trade MCGI stock, coordinating their trades with Levy and Cusimano's press releases and marketing emails.

In addition to the information that Rosenberg and Weiner provided, the FBI obtained data from the SEC that showed the trading volume and price of MCGI shares between January 25, 2010 and April 8, 2011. The FBI's analysis of the data corroborated the information provided by Rosenberg and Weiner concerning the March and May 2010 market manipulations.

Finally, the FBI obtained information suggesting that Defendants engaged in another market manipulation of MCGI stock in late March 2011. On March 28, 2011, Hotstocked.com, a Bulgarian website that reported on penny stock manipulations, announced that MCGI was starting a new promotional campaign. Trading data during the relevant timeframe corroborated this reporting, showing that on March 28, 2011 MCGI's price increased by 108% and its trading volume increased by more than 8,000%. The reporting was further corroborated by telephone records showing a high volume of contacts between Goldstein, Bercoon, and Veugeler during the last week of March 2011, as well as numerous contacts around the same time between Goldstein and Gerard Adams, the target of another SEC "pump and dump" investigation.

After gathering the above information, the Government applied for and obtained four Title III wiretap orders authorizing agents to intercept calls on phones used by Bercoon and Veugeler. The orders were dated June 24, July 26, August 25, and October 3, 2011. Special Agent R. Wallace Taylor, Jr. submitted affidavits in support of the wiretap applications, and each application was granted by a different district court judge.

Agent Taylor's affidavit in support of the June 24, 2011 wiretap application explained that the FBI was investigating Bercoon, Goldstein, Veugeler, and others for participating in a market-manipulation conspiracy involving MCGI stock. Taylor disclosed in the affidavit that the facts asserted...