Opinion
The panel unanimously finds this case suitable for decision without oral argument. See Fed. R.App. P. 34(a)(2)
D.C. No. CR-94-01030-JGD
Editorial Note:This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)
Appeal from the United States District Court for the Central District of California, John G. Davies, District Judge, Presiding.
Before PREGERSON, NOONAN, and O'SCANNLAIN, Circuit Judges.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as may be provided by 9th Cir. R. 36-3.
Appellant Judith Lee Collins appeals her conviction and sentence for offenses arising out of her involvement in a scheme to fraudulently solicit and induce persons to invest thousands of dollars in nearly worthless retail distributorships. A jury convicted Collins, along with her codefendant, on eight counts of mail fraud and aiding and abetting in mail fraud in violation of 18 U.S.C. §§ 1341, 2 and four counts of inducing transportation of persons in interstate commerce in violation of 18 U.S.C. § 2314. Because the parties are familiar with the factual and procedural history of this case, we will not recount it here except as necessary to clarify our decision.
Collins's codefendant Herbert Schachter also claimed errors on appeal, which we address in a separate unpublished disposition.
Collins's claims of error are five-fold: (1) that the district court erred in admitting into evidence her out-of-court statements to postal inspectors because the postal inspectors violated her Fifth Amendment rights under Miranda v. Arizona, 383 U.S. 436 (1966), (2) that the evidence was insufficient to sustain her conviction, (3) that the district court erred in denying her motion for mistrial and motion for recusal of the prosecutor for ethical violations, (4) that the district court erred in sustaining the government's objection to the admission of a witness's alleged hearsay statement, and (5) that the district court erred at sentencing. We have jurisdiction to review the district court's final judgment under 28 U.S.C. § 1291 and to review the sentence imposed under the Sentencing Guidelines under 18 U.S.C. § 3742, and we affirm.
I. Alleged Miranda Violation
Collins claims that her statements to the postal inspectors, which were used to incriminate her at trial, were improperly admitted into evidence because they were obtained in violation of her rights under Miranda. Collins's failure to move pretrial to suppress her statements as required by FED. R.CRIM. P. 12(b)(3) constitutes a waiver of this objection, absent cause. See FED. R.CRIM. P. 12(f); see also United States v. Restrepo-Rua, 815 F.2d 1327, 1329 (9th Cir.1987) (so holding). She has shown no cause why her failure to do so should not bar her appeal on this issue. Therefore, we can review the admission of the testimony at issue only for plain error. See FED. R.CRIM. P. 52(b); United States v. Olano, 507 U.S. 725, 733 (1993)). Collins has shown no such error.
The postal inspectors were under no obligation to administer Miranda warnings to Collins when they interviewed her in her home because she was not "taken into custody or otherwise deprived of [her] freedom of action in any significant way." Stansbury v. California, 511 U.S. 318, 322 (1994) (quoting Miranda, 384 U.S. at 444). Uncontroverted testimony established that Collins voluntarily agreed to the interview and that a reasonable person in her circumstances would have understood that she was free to terminate the interview with the postal inspectors at any time. Cf . United States v. Melvin, 91 F.3d 1218, 1222 (9th Cir.1996) (holding that a reasonable person would not have believed that he was in custody when interviewed in an office by two postal inspectors who testified that the defendant came "willingly" and "voluntarily," despite the defendant's testimony to the contrary); cf. also Beckwith v. United States, 425 U.S. 341, 347 (1976) (holding that an interview with internal revenue agents in a defendant's home was not "so inherently coercive as to require" Miranda warnings, even though the "focus" of the interview and investigation was clearly on the defendant at the time). Accordingly, we hold that the district court did not err in admitting Collins's out-of-court statements against her at trial.
II. Sufficiency of the Evidence
Collins contends that the evidence was insufficient to sustain her conviction because it failed to establish that she possessed the requisite criminal intent for aiding and abetting a mail fraud. "A conviction for aiding and abetting requires proof that the accused had the intent required for the underlying substantive offense." United States v. Olson, 925 F.2d 1170, 1176 (9th Cir.1991). The underlying substantive offense in this case is mail fraud. To sustain a conviction under the mail fraud statutes, "there must be sufficient evidence to show that the defendant 'willfully participated in a scheme with knowledge of its fraudulent nature and with intent that these illicit objectives be achieved." ' United States v. Lothian, 976 F.2d 1257, 1267 (9th Cir.1992) (quoting United States v. Price, 623 F.2d 587, 591 (9th Cir.1980), overruled on other grounds, United States v. De Bright, 730 F.2d 1255 (9th Cir.1984)).
Viewing the evidence in the light most favorable to the prosecution, we hold that "any rational trier of fact could have found the essential elements of [Collins's] crime beyond reasonable doubt." United States v. Litteral, 910 F.2d 547, 550 (9th Cir.1990). Collins's statements to the postal inspectors alone constitute sufficient evidence to sustain her conviction. She admitted that she lied repeatedly to investors in order to convince them to invest in the scheme. Moreover, at least seven victim investors testified that Collins made false and misleading representations to them that factored into their decision to purchase a distributorship. Thus, the evidence of Collins's guilt was overwhelming.
III. Alleged Ethical Violations
Collins argues that the district court erred in denying her motion for mistrial and motion to recuse the Assistant U.S. Attorney essentially because the prosecutor improperly advised a witness in the case on the need to amend his pretrial diversion agreement. A district court's denial of a motion for mistrial and its refusal to disqualify a prosecutor is reviewed for abuse of discretion. See United States v. George, 56 F.3d 1078, 1082 (9th Cir.1995); United States v. Plesinski, 912 F.2d 1033, 1035 (9th Cir.1990). To the extent that Collins's contention is based on alleged prosecutorial misconduct, she must show that it is "more probable than not that the [prosecutorial] misconduct materially affected the verdict," United States v. Hinton, 31 F.3d 817, 824 (9th Cir.1994), or that she was deprived of a fair trial because of it, see United States v. Yarbrough, 852 F.2d 1522, 1539 (9th Cir.1988).
Collins's claim is without merit. She has shown no prejudice whatsoever as the result of the prosecutor's alleged misconduct. Moreover, her claim of prosecutorial misconduct is based on purported violations of California Rule of Professional Conduct 2-100, which bars ex parte communications with a party, and Rule 3-300, which bars an attorney from entering into a business transaction with a client. The witness with whom the prosecutor spoke at the district court's direction was not a party to this action. Moreover, it is absurd to characterize a pretrial diversion agreement between the government and a witness as a "business" transaction within the meaning of the rules of professional conduct. Accordingly, we hold the district court did not err in denying Collins's motions for mistrial and recusal of the prosecutor.
IV. Evidentiary Challenge
Collins contends that the district court erred in precluding a witness from testifying to a purported hearsay statement by a third party that constituted a declaration against interest under FED.R.EVID. 804(b)(3). Collins failed to properly preserve this issue on appeal, we therefore must review the district court's evidentiary decision for plain error, see Arizona v. Elmer, 21 F.3d 331, 334 (9th Cir.1994), rather than for abuse of discretion as is generally required, see United States v. Rubio-Topete, 999 F .2d 1334, 1337 (9th Cir.1993).
Collins failed to establish that the purported hearsay statement of the declarant qualified as a declaration against interest. She did not show that the declarant was "unavailable" within the meaning of FED.R.EVID. 804(b)(3). Collins contended that the declarant was "unavailable" because he previously testified "to a lack of memory of the subject matter of the declarant's statement." FED.R.EVID. 804(a)(3). She mischaracterized the declarant's testimony. The declarant did not claim a lack of memory; he denied ever making the statement.
Moreover, a reasonable person in the declarant's position would not have concluded that the purported hearsay statement could have subjected him to criminal liability. Therefore, the statement was not against the declarant's penal interest within the meaning of Rule 804(b)(3). Accordingly, we hold that the district court did not err in sustaining the government's objection to the admission of this evidence.
V. Alleged Sentencing Errors
Collins contends that the district court erred in sentencing her on three grounds: (1) the district court used an erroneous loss calculation to determine her base offense level; (2) the district court failed to make the necessary factual findings to support its restitution order; and (3) the district court erroneously found that she violated an administrative order and therefore improperly enhanced her sentence. We review de novo a district court's interpretation and application of the Sentencing Guidelines. See United States v. Mullins, 992 F.2d 1472, 1479 (9th Cir.1993). The factual findings underlying a sentence, including the amount of loss, are reviewed for clear error. See id. A district court's restitution order is reviewed for abuse of discretion. See United States v. English, 92 F.3d 909, 916 (9th Cir.1995). Collins's contentions have no merit.
A. The Loss Calculation
At sentencing, an IRS Special Agent's uncontroverted testimony established the total verified loss amount used by the district court to determine Collins's offense level and to set the restitution amount to be paid. Both Collins's counsel and the government agreed that the amount was correct and properly determined. Her claim on appeal that the amount used was not actually proven is therefore specious.
Moreover, her claim that she could not have foreseen the total amount of losses incurred by the scheme's victims within the meaning of U.S.S.G. 1B1.3(a)(1)(A) and (B) and U.S.S.G. § 2F1.1 is similarly without merit. She points to no evidence in the record supporting her contention. Cf. United States v. Avila, 905 F.2d 295, 298-99 (9th Cir.1990) (rejecting an appellant's contention that the aggregate loss calculation was erroneous where he put forth no evidence in support of his assertion). Given the extensive evidence in the record supporting her convictions, including her confession, we conclude that the district court did not err in finding Collins liable for the total verified losses sustained by all victims of the scheme during the years that she was a party to it.
B. The Restitution Order
Collins claims for the first time on appeal that the district court abused its discretion in ordering her to pay restitution because it failed to make a specific finding on her ability to pay restitution. She is mistaken. The district court did make a finding regarding her current and future ability to pay restitution when it adopted the relevant factual findings contained in the Presentence Report (PSR). As long as the record reflects "that the district judge had at his disposal information bearing on the[se] considerations," no error is made. United States v. Cannizzaro, 871 F.2d 809, 810, 811 (9th Cir.1989). Where, as here, the district court makes "specific reference" to the findings stated in the PSR, the statements in the PSR provide a sufficient basis for ordering restitution. See id. at 811-12.
The fact that the probation officer stated in the PSR that Collins had a negative net worth at the time of sentencing and, on that basis, that "it would appear that the [she] would not be able to pay both a fine and restitution" does not defeat the validity of the restitution order. "Indigence and a present inability to pay do not preclude imposition of restitution." United States v. English, 92 F.2d 909, 916-17 (9th Cir.1996). There must only be a "possibility" that the defendant could pay the restitution amount within the time period required. See United States v. Ramilo, 986 F.2d 333, 335-36 (9th Cir.1993). Moreover, if Collins cannot pay the full amount in the time prescribed, she can obtain an extension of time or a remittitur from the court if she shows at the end of the three-year supervised period that she has "made a good faith effort at payment, but is unable to pay the full amount." United States v. Jackson, 982 F.2d 1279, 1284-85 (9th Cir.1992). For these reasons, we hold that the district court did not abuse its discretion in ordering Collins to pay restitution.
C. The Sentencing Enhancement for Violation of an Administrative Order
Collins argues on appeal that the district court improperly enhanced her offense level under U.S.S.G. § 2F1.1(b)(3)(B) because the government failed to prove that she engaged in "offering or selling a franchise" to an investor in violation the Cease and Desist Order issued by the California Department of Corporations. Her argument is without merit.
The evidence clearly established that Collins engaged in "offering or selling" the scheme's distributorships. Moreover, the district court correctly determined that the scheme's distributorships constituted "franchises" within the meaning of California Corporation Code § 31005(a), which California courts have "liberally construed." Gentis v. Safeguard Business Systems, Inc ., 60 Cal.App. 4th 1294, 1302 (Ct.App.1998) (citing Kim v. Servosnax, Inc., 10 Cal.App. 4th 1346, 1356 (Ct.App.1992)). The scheme involved a marketing plan to distribute goods, the goods were associated with a specific trade name, and the victims had to pay a fee for the distributorships. See CAL. CORP.CODE § 31005(a) (West 1990); see also Gentis, 60 Cal.App. 4th at 1302 (deeming the distributor-manufacturer relationship to be a franchise where the distributor solicited, recruited, and serviced customers for the manufacturer).
Accordingly, we hold that the district court did not err in enhancing Collins's offense level by two points pursuant to U.S.S.G. § 2F1.1(b)(3)(b) because her offense conduct involved the violation of the administrative order issued by the California Department of Corporations.
AFFIRMED