United States v. Maurya

• Decision Date: 01 February 2022
• Docket Number: No. 19-12108, No. 19-11040, No. 19-12140,No. 19-10746,19-10746
• Citation: 25 F.4th 829
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Asha R. MAURYA, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Nathan E. Hardwick, IV, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Asha R. Maurya, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Nathan E. Hardwick, IV, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

25 F.4th 829

UNITED STATES of America, Plaintiff-Appellee,

v.Asha R. MAURYA, Defendant-Appellant.

United States of America, Plaintiff-Appellee,

v.Nathan E. Hardwick, IV, Defendant-Appellant.

United States of America, Plaintiff-Appellee,

v.Asha R. Maurya, Defendant-Appellant.

United States of America, Plaintiff-Appellee,

v.Nathan E. Hardwick, IV, Defendant-Appellant.

No. 19-10746

No. 19-11040

No. 19-12108

No. 19-12140

United States Court of Appeals, Eleventh Circuit.

Filed: February 1, 2022

Rebeca Ojeda, John Russell Phillips, William Gavin Traynor, Jane Elizabeth McBath, U.S. Attorney Service - Northern District of Georgia, U.S. Attorney's Office, Atlanta, GA, for Plaintiff-Appellee.

Jeffrey W. Chen, Naveen Ramachandrappa, Bondurant Mixson & Elmore, LLP, Atlanta, GA, for Defendant-Appellant in Docket Nos. 19-10746, 19-12108.

Edward T.M. Garland, Kristen W. Novay, Garland Samuel & Loeb, PC, Atlanta, GA, for Defendant-Appellant in Docket No. 19-11040.

Edward T.M. Garland, Kristen W. Novay, Robin N. Loeb, Garland Samuel & Loeb, PC, Atlanta, GA, for Defendant-Appellant in Docket No. 19-12140.

Before William Pryor, Chief Judge, Grant, and Anderson, Circuit Judges.

Opinion of the Court

GRANT, Circuit Judge:

This case concerns two defendants found guilty of orchestrating large-scale corporate fraud. Nathan Hardwick was convicted at trial on counts of conspiracy, making a false statement to a financial institution, and wire fraud. The district court sentenced him to 15 years in prison and required him, along with his alleged co-conspirator Asha Maurya, to pay over $40 million in restitution. Hardwick argues on appeal that the district court failed to support its restitution order with the reasoning required by law. He also attacks his convictions on a number of grounds and contends that his sentence is substantively unreasonable. We agree with Hardwick that the district court must vacate and reissue its restitution order, but we otherwise affirm Hardwick's convictions and sentence.

Hardwick's case has been consolidated with Maurya's on appeal. Maurya pleaded guilty to conspiracy to commit wire fraud. She joins Hardwick's challenge of the restitution order, and further argues that the district court violated the Ex Post Facto Clause of the U.S. Constitution by applying a sentencing enhancement issued after she committed the offense. The government concedes that the district court made these errors, and we agree: Maurya must be resentenced.

I.

In 2005, Nathan Hardwick helped found a real estate law firm called Morris Hardwick Schneider (MHS). Hardwick managed MHS's "closing side," including its client trust and operating accounts. After two years, MHS sold part of its foreclosure operation to a private equity group, and Hardwick received $14 or $15 million in compensation. Even so, Hardwick soon found himself mired in both public and private misfortune: the 2008 financial crisis and an acrimonious divorce. His assets were hit hard. Within three years, the $15 million was gone—and Hardwick owed millions in loans he couldn't repay, many of them gambling debts.

Hardwick eventually turned to unscrupulous methods to satisfy his creditors. When a bank and a casino sued him to recover unpaid debts, Hardwick lied to a different bank in a line-of-credit application, claiming that there were no suits pending against him. But a single line of credit wasn't enough to solve Hardwick's money problems, so he turned to a more fertile source of income: his law firm. From 2011 to 2014, Hardwick siphoned off about $26.5 million from MHS while carefully hiding the withdrawals from other shareholders. Around $19 million of this money came from MHS's trust accounts.

Hardwick relied heavily on the help of Asha Maurya, who initially worked at MHS as a controller. Maurya had no accounting experience when MHS hired her. But unbeknownst to her new supervisor, she did have a history of embezzling from her previous employers. Maurya's duties included managing, setting up, and monitoring client trust accounts. She oversaw the staggering cash flow—millions, sometimes billions, of dollars—that went in and out of those trust accounts. Although her position in the firm hierarchy meant she did not directly report to Hardwick, Maurya often went straight to him to discuss issues and concerns. Soon enough, Hardwick promoted Maurya to CFO, giving her even broader authority over the trust accounts.

When Maurya received her promotion, she also got something else—a vital role in Hardwick's embezzlement scheme. At Hardwick's request, she repeatedly sent money from MHS to Hardwick or his creditors and significantly underreported distributions to Hardwick. In return, Hardwick assured Maurya that she had "earned [his] trust and respect" and was "now part of [his] small inner circle."

With so much money draining out of MHS accounts, someone was bound to notice. The scheme began to unravel in summer 2014, when an internal audit by one of MHS's business partners revealed an altered bank statement. When confronted, Hardwick was quick to distance himself from Maurya—in spite of his private accolades to her. He claimed that she had "duped" him by stealing money from MHS, altering the firm's records to cover her tracks, and sending him payouts to hide the firm's real financial situation. After further investigation revealed large payments from MHS to Hardwick and his casino creditors, however, it became clear that "the jig was up."

A grand jury indicted Hardwick and Maurya. After Maurya pleaded guilty, the grand jury issued a superseding indictment against Hardwick. He went to trial, where he was convicted of wire fraud, conspiracy to commit wire fraud, and making false statements to a federally insured financial institution. The district court sentenced him to 180 months in prison—an upward variance from the Guidelines range of 108 to 135 months. Maurya received a sentence of 84 months. The court also issued a restitution order requiring Maurya and Hardwick to "pay restitution, jointly and severally, in the amount of $40,307,431.00."

Both defendants now appeal. Maurya asks the court to vacate both the restitution order and her sentence. Hardwick requests the same relief, but he also directly challenges his convictions.

II.

We begin with Maurya's appeal. Maurya first argues that her sentence must be vacated because the district court applied a sentencing enhancement that did not exist when her offense was committed. The sentence, she says, thus violated the Constitution's prohibition against ex post facto laws. See U.S. Const. art. I, § 9. The government agrees.

Maurya did not raise this argument below, so we review it for plain error. United States v. Abraham , 386 F.3d 1033, 1037 (11th Cir. 2004). Under that standard, Maurya must establish (1) an error, (2) that is plain, (3) that affects her substantial rights, and (4) that, "if left uncorrected, would seriously affect the fairness, integrity, or public reputation of a judicial proceeding." Id. at 1036 n.1 (quotation omitted).

Each prong is satisfied here. Though courts typically apply the Guidelines in effect at the time of sentencing, the Ex Post Facto Clause prohibits the use of Guidelines issued after the offense that create a higher applicable sentencing range. See United States v. Elbeblawy , 899 F.3d 925, 939 (11th Cir. 2018) ; Peugh v. United States , 569 U.S. 530, 533, 133 S.Ct. 2072, 186 L.Ed.2d 84 (2013). Here, the district court used the 2018 Guidelines, which included a two-level substantial financial hardship enhancement added in 2015—that is, after Maurya's offense, which ended "in or about August 2014." See U.S.S.G. § 2B1.1(b)(2)(A)(iii) (2018). Applying the 2018 Guidelines was thus error. And that error was unmistakably plain: it was "obvious" and "clear under current law" that the district court could not apply an enhancement issued after Maurya committed the offense. United States v. Madden , 733 F.3d 1314, 1322 (11th Cir. 2013) (quotation omitted).

Using the wrong Guidelines meant that the district court calculated the wrong Guidelines range. And the application of an incorrect Guidelines range is almost always enough "to show a reasonable probability of a different outcome absent the error." Rosales-Mireles v. United States , ––– U.S. ––––, 138 S. Ct. 1897, 1907, 201 L.Ed.2d 376 (2018) (quotation omitted). With no extenuating circumstances to suggest otherwise, we hold that the error here affected Maurya's substantial rights. And while defendants usually face an uphill climb in showing that an error seriously affects the fairness, integrity, or reputation of a judicial proceeding, "proof of a plain Guidelines error that affects the defendant's substantial rights is sufficient to meet that burden." Id. at 1909 n.4 ; see also id. at 1908. The district court's error thus requires Maurya to be resentenced.¹

Maurya (joined by Hardwick) also challenges the district court's restitution order. "To enable meaningful appellate review," though, "a district court's calculation of restitution must be supported by specific factual findings." United States v. Singletary , 649 F.3d 1212, 1222 (11th Cir. 2011). And the district court—as the government concedes—gave us no factual findings to consider. The only course open to us, then, is to vacate the order and remand the case for the district court to correct its oversight. Id.

III.

A.

We now turn to Hardwick's lengthy series of challenges to his convictions. To begin, Hardwick argues that he was "prevented from effectively meeting the Government's case" because the district court denied his request for a bill of particulars before trial.

We review a denial of a motion for a bill of particulars for abuse of discretion. United States v. Davis , 854 F.3d 1276, 1293 (11th Cir. 2017). "To show an abuse of discretion, a defendant must establish that he actually was surprised at trial and that the denial of the request for a bill of particulars prejudiced his substantial rights." Id.

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