United States v. Rivernider

• Decision Date: 07 July 2016
• Docket Number: 14–4533–cr,Docket No. 13–4865–cr,August Term, 2015,14–452–cr,14–384–cr,14–4582–cr
• Citation: 828 F.3d 91
• Parties: United States of America, Appellee, v. Robert Rivernider, Robert Ponte, Defendant–Appellants.
• Court: U.S. Court of Appeals — Second Circuit

828 F.3d 91

United States of America, Appellee

v.Robert Rivernider, Robert Ponte, Defendant–Appellants.

Docket No. 13–4865–cr

14–384–cr

14–452–cr

14–4533–cr

14–4582–cr

August Term, 2015

United States Court of Appeals, Second Circuit.

Argued: December 7, 2015

Decided: July 7, 2016

Marjorie M. Smith, Law Office of Marjorie M. Smith, Brooklyn, New York, for Defendant–Appellant Robert Rivernider.

Jodi Zils Gagné, The Law Offices of Jodi Zils Gagné LLC, Bristol, Connecticut, for Defendant–Appellant Robert Ponte.

Christopher W. Schmeisser, Assistant United States Attorney (John H. Durham and Marc H. Silverman (of counsel), Assistant United States Attorneys, on the brief), for Deirdre M. Daly, United States Attorney for the District of Connecticut, New Haven, Connecticut.

Before: Livingston and Lynch, Circuit Judges, and Rakof f, District Judge.^*

Gerard E. Lynch

, Circuit Judge:

Defendants Robert Rivernider and Robert Ponte appeal from judgments of conviction in the United States District Court for the District of Connecticut (Robert N. Chatigny, Judge ), following their guilty pleas to multiple counts of wire fraud in violation of 18 U.S.C. § 1343

and conspiracy to commit wire fraud in violation of 18 U.S.C. § 1349. Ponte also pled guilty to two counts of tax evasion in violation of 26 U.S.C. § 7201.¹ The convictions arise from the defendants' orchestration of a Ponzi scheme and a related real estate scheme, in which the defendants induced victims to purchase properties using mortgages based on an inflated appraisal price while pocketing the difference between the actual sales price and appraisal price as a “marketing fee,” without disclosing the fee to the buyer. Both defendants proceeded to trial, but pled guilty prior to its conclusion.

Rivernider primarily argues that the district court erred by denying his pro se motion to withdraw his guilty plea on the ground that his plea lacked an adequate factual basis and was coerced, or, alternatively, by failing to appoint substitute counsel to make the motion to withdraw his plea. He additionally challenges his 144-month sentence as substantively unreasonable. Ponte does not challenge his conviction, but argues that his 90-month sentence is both procedurally unreasonable in that district court erroneously applied several enhancements in calculating his advisory Guidelines range and substantively unreasonable. Both defendants challenge the $22,140,765.99 restitution order entered by the district court.

We conclude that the district court did not err in failing to appoint new counsel to represent Rivernider with respect to his motion to withdraw, or in denying his pro se motion, because there was a sufficient factual basis for Rivernider's plea and because Rivernider did not sufficiently allege an actual conflict of interest between himself and his attorney. We also reject the defendants' challenges to their sentences and to the restitution order. Accordingly, for the reasons given herein, we affirm the judgments of conviction.

BACKGROUND

I. The Underlying Fraud

Rivernider and Ponte organized and ran two related fraudulent schemes. The first, which Rivernider began in 2005, was called the “No More Bills” (“NMB”) program. Through the NMB program, the defendants solicited funds from clients who were promised a 10% monthly return that would be used to pay off the client's debts. After receiving financial information from investors, the defendants generated investor plans, including graphs and tables setting forth expected returns. Although Rivernider engaged in some investment activity over the course of the fraud, the money used to make monthly payments to clients principally came from the principal or contributions of other clients, and the program thus functioned as a Ponzi scheme.

Rivernider controlled the administrative aspects of the scheme and the NMB bank accounts. Ponte brought in investors and also played an active role in creating and transmitting investor plans. Both defendants misled clients about the source and reliability of the promised returns. For example, Ponte told multiple clients that Rivernider was investing in offshore foreign currency trading and Panamanian real estate and natural resources. Rivernider represented to some clients that he had a hedge fund in Hong Kong that yielded high returns. All of those representations were false.

At some point in the scheme, the incoming funds became insufficient to cover the promised returns to NMB investors. Rivernider and Ponte were aware of problems with the NMB program by fall 2007. In an email dated September 11, 2007, Ponte told Rivernider that “[a]ll of [the promised 10% return on a client's] funds are coming from principal, not interest.” G.A. 243. Rivernider responded by stating that “[s]hould I ever actually make money on something else I can then pay profits but for now if I return princip[al] after losing it all, I should be a hero.” Id. at 245.

The defendants concealed the problems in the NMB program from current investors, and continued to solicit new clients, through the fall of 2007. For example, on September 10, Ponte provided wiring instructions for a new NMB client, and on October 23, told a client that the client could improve his investment return if he deferred receipt of the return then due. Rivernider and Ponte also discussed the possibility of altering payment plans for existing clients in order to reduce their current obligations.

As payments to clients became increasingly sporadic, Ponte's assistant sent Ponte an email asking what he should tell people who inquired about their monthly payments. Copying Rivernider on the email, Ponte responded that same day:

You can send the following only to people that ask:

Most of you are aware of the current mortgage industry crunch which in turn creates a large amount of foreclosures as well as fraud. This has caused many of our NMB clients being scrutinized, by mortgage companies and the client bank. Because of this and other lender issues NMB is responding as best we can. All of following is so we can keep our program working for many months and years to come. So in some cases we are slowing down payments and paying minimum amounts, in some cases we are waiting a few weeks to payout, but will make payments before they are late. NMB is under pressure right now to show that bills are being paid down and to make sure we are not an investment company, paying appropriate taxes and or not [l]aundering money. Thank you to the Patriot Act. Over the next few weeks when we show that we and our clients are in compliance, all bills w[ill] be updated and full payouts will get back on track.

G.A. 376. Payments to clients, which had become increasingly irregular in the fall of 2007, ceased altogether in early 2008.

The second fraud was a real estate scheme. Using a company owned by Rivernider called Cut Above Ventures, the defendants induced victims—including current and former investors in the NMB scheme—to buy condominiums in Florida and cabins in Tennessee as investment properties through an “incentive program.” Under the incentive program, Cut Above Ventures would provide the down payment, pay the mortgage for two years, and cover other costs relating to the property. To make money on this scheme, Cut Above Ventures would, prior to the sale, reach an agreement on price with the seller, seek an appraisal of the property at a figure in excess of the sale price, and procure a mortgage loan for the buyer based on the inflated appraisal price. Cut Above Ventures could then extract a “marketing fee” from the difference between the inflated mortgage loan and actual sale price without disclosing the fee to the buyer. The mortgage applications used to purchase properties did not disclose the incentive program or the true sale price of the property to lenders. Additionally, some mortgage loan applications contained other misrepresentations, such as inflated borrower income figures.

Rivernider again principally controlled the financial aspects of the scheme while Ponte principally recruited buyers. The scheme also involved Tosha Wade, a Florida real estate sales representative, and Shellie Kemp, a mortgage consultant with Wells Fargo. Wade helped sell properties for Rivernider. She testified at trial that the common steps taken to commit mortgage fraud included: (1) concealing from lenders the incentive deals used to recruit customers; (2) classifying an investment property as a primary or secondary residence on mortgage loan applications to improve financing terms; (3) pushing the purchase of multiple properties at the same time to conceal a borrower's true liabilities; (4) manufacturing income figures to qualify unqualified buyers; (5) hiding the source of the money provided by buyers at closing; and (6) pricing sale contracts so as to cover the cost of the undisclosed marketing fees. Wade also testified that Rivernider became angry when Wade disclosed the incentive plan to lenders.

Kemp, in her role as a Wells Fargo mortgage consultant, participated in the scheme by processing fraudulent loan applications. At one point, Wells Fargo investigated Kemp and temporarily suspended her from doing business with Rivernider; however, once the “marketing fee” extracted by Cut Above Ventures was no longer appearing on the loan documents, she was allowed to continue doing business with him. In total, Rivernider purchased 104 properties through Cut Above Ventures.

II. The Defendants' Guilty Pleas

Trial commenced on February 7, 2013. After about ten days of trial, Rivernider moved for leave to enter a guilty plea to all eighteen counts in the indictment. As part of that application, Rivernider signed an admission of offense conduct that described the NMB and real estate schemes in detail. In that statement, Rivernider admitted that he participated in both schemes knowing their fraudulent nature. At the change of plea hearing, Rivernider affirmed that he was satisfied with the services of his counsel...