United States v. Anthony Diaz

• Court: Court of Appeals for the Third Circuit
• Decided: September 19, 2022
• Docket: 21-1709
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _______________

No. 21-1709 _______________

UNITED STATES OF AMERICA v.

ANTHONY DIAZ, Appellant _______________

On Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. No. 3:16-cr-00122-001) U.S. District Judge: Honorable Malachy E. Mannion _______________ Submitted Under Third Circuit L.A.R. 34.1(a) on March 21, 2022

Before: BIBAS, MATEY, and PHIPPS, Circuit Judges

(Filed: September 19, 2022) _______________

OPINION* _______________

BIBAS, Circuit Judge.

On appeal, parties sometimes throw everything against the wall to see what sticks. Here,

nothing does. Anthony Diaz challenges his federal convictions and sentence for mail and

wire fraud. Because none of his arguments has merit, we will affirm.

* This disposition is not an opinion of the full Court and, under I.O.P. 5.7, is not binding precedent. I. THE INVESTMENT-FRAUD SCHEME

Diaz was a financial planner. His clients were ordinary people who wanted to save for

retirement or their kids’ educations. Diaz promised to put their money into safe invest-

ments. Instead, he chose risky ones that netted him higher commissions. When those in-

vestments tanked, Diaz’s clients lost lots of money. Those losses forced many to delay

retirement. Some had to sell their homes. Meanwhile, Diaz took exotic vacations, built a

pool, and drove a Jaguar.

Diaz’s scheme was complex. Many of the investments he chose were so risky that or-

dinary people, like his clients, are barred from them. So he tricked his clients into signing

blank documents and then forged their information to make them look qualified. One client

was on unemployment, getting about $400 per week. Diaz wrote that her annual income

was $102,000.

Diaz’s lies kept things going for close to a decade. Several companies fired him. Each

time, Diaz told his clients that he had left for their benefit. Regulatory agencies started

investigating him, and a professional organization for financial planners suspended him.

Again, Diaz lied or said nothing to his clients.

Finally, the jig was up. The jury convicted him of seven counts of wire fraud and four

of mail fraud, and the judge sentenced him to 17 ½ years in prison. On appeal, he challenges

both his conviction and his sentencing. We review

• the District Court’s factual findings for clear error, with particular deference to

its credibility findings;

• its application of the statutory sentencing factors to the facts with deference;

2 • its legal reading of the rules of evidence and sentencing guidelines de novo;

• its rulings on evidentiary objections and the sentence’s procedural and substan-

tive reasonableness for abuse of discretion; and

• errors to which Diaz did not object for plain error.

United States v. Igbonwa, 120 F.3d 437, 440–41 (3d Cir. 1997) (factual findings); United

States v. Tomko, 562 F.3d 558, 567–68 (3d Cir. 2009) (en banc) (application of sentencing

factors; sentence’s procedural and substantive reasonableness); United States v. Bailey, 840

F.3d 99, 117, 126–27 (3d Cir. 2016) (legal reading of evidence rules; evidentiary objec-

tions); United States v. West, 643 F.3d 102, 105 (3d Cir. 2011) (legal reading of sentencing

guidelines); United States v. Brennan, 326 F.3d 176, 182 (3d Cir. 2003) (non-contemporaneous

objections).

II. AT TRIAL, THE COURT PROPERLY ADMITTED THE EVIDENCE AND STATEMENTS

Diaz objects that the District Court admitted evidence about his firings, suspension, and

disbarment, plus some testimony from his assistant. He also challenges two statements in

the prosecution’s closing argument.

Before taking those arguments one by one, we address a premise that recurs throughout

his briefs. Diaz says he was charged with “individual counts” of mail and wire fraud, not a

scheme to defraud. Reply Br. 4–5. Each count is tied to a particular wire or mailing on a

particular date. So, he says, only evidence that relates directly to these wires and mailings

is admissible.

That is wrong. The existence of a scheme to defraud is one of the elements of mail and

wire fraud. 18 U.S.C. §§ 1341, 1343. So the government had to prove an overarching 3 scheme, and any evidence showing it was admissible. Of course, the government also had

to show that Diaz used wires or mailings to execute that scheme. Id. (both sections). But

when proving the overarching scheme, the dates of those wires and mailings are “not of

any legal significance.” United States v. Pharis, 298 F.3d 228, 233–34 (3d Cir. 2002) (en

banc).

With that in mind, we turn to Diaz’s individual arguments.

A. The trial court properly admitted evidence of past disciplinary actions

Diaz’s fraud was noticed. He was investigated, fired, suspended, and disbarred. At trial,

the District Court admitted evidence of those disciplinary actions. Though Diaz protests,

that evidence was admissible as intrinsic to the charged offenses—it went straight to prov-

ing his fraud. See United States v. Green, 617 F.3d 233, 248–49 (3d Cir. 2010).

The government introduced evidence of the investigations, firings, and suspensions to

show that Diaz had concealed them from his clients. If they had known that he had been

investigated or disciplined, they would not have kept investing with him. So the evidence

proved his “scheme … for obtaining money … by means of false or fraudulent pretenses.”

18 U.S.C. §§ 1341, 1343. The same is true of the evidence about why he was investigated

and disciplined. He lied to his clients about that, presumably because telling the truth would

have driven them away. And all this concealment and deception showed his intent to de-

ceive: Diaz was told that his actions were problematic but carried on anyway.

Diaz objects that the evidence was far more prejudicial than probative. But the District

Court reasonably balanced the two and found otherwise. The evidence showed that his lies

were intentional and material. Plus, the court repeatedly instructed the jury not to use 4 evidence of investigations or discipline as proof that he had committed the crimes charged

here.

As for the evidence of the disbarments, Diaz elicited that testimony himself. And the

invited-error doctrine bars him from challenging any error that he introduced. United States

v. Maury, 695 F.3d 227, 256–57 (3d Cir. 2012).

Finally, Diaz challenges a smattering of statements elicited at trial: about how he treated

his clients; about signed, blank forms found during an employer’s investigation; and about

events that were investigated but did not result in discipline. But at trial, Diaz never spe-

cifically objected to those statements. So he forfeited his claims. We see no error, let alone

plain error.

B. The trial court properly admitted the testimony of Diaz’s assistant

Next, Diaz challenges the testimony of his former assistant. During trial, she told the

government for the first time that, after she and Diaz learned they were being investigated

by a regulatory agency, they had altered and destroyed documents. The government

promptly told the defense and the court. Over Diaz’s objections, the court let her testify

about these events.

Diaz now says that a witness should not be allowed to testify about things that she never

before told either party. But no rule bars such testimony. Indeed, at trial, Diaz conceded as

much. He says he needed more time to investigate her late-breaking statement. But the

District Court offered to discuss a continuance. Yet he did not take the court up on its offer.

And he never explains what he would have done with extra time to prepare.

5 Lastly, this testimony showed not uncharged bad acts but acts intrinsic to mail and wire

fraud. By altering documents, Diaz was able to avoid detection and keep defrauding his

clients. See Green, 617 F.3d at 249 (“[A]cts performed contemporaneously with the

charged crime may be termed intrinsic if they facilitate the commission of the charged

crime.” (quoting United States v. Bowie, 232 F.3d 923, 929 (D.C. Cir. 2000)).

C. The prosecution’s closing argument properly noted intrinsic evidence

In addition, Diaz challenges two of the government’s closing statements. First, the gov-

ernment said that “[e]very victim testified that Anthony Diaz never told them he was sus-

pended by” a professional organization. App. 2126. Second, it argued that if Diaz’s clients

had known that a regulatory agency was suing him, they would likely have invested differ-

ently. Diaz objects that the suspension and lawsuit postdated some of his wires and mail-

ings, and he could not have concealed something that had not happened yet. But once again,

this evidence was intrinsic to the overall scheme to defraud and suggests both materiality

and his intent.

In any event, any error would have been harmless beyond a reasonable doubt. These

were only two sentences out of forty-four pages. The court twice instructed the jury that

lawyers’ arguments are “not evidence.” App. 2087, 2089. And the evidence of guilt was

overwhelming, including forged documents and testimony of several employees plus more

than ten clients.

6 III. DIAZ’S SENTENCE WAS PROPER

So we move on to sentencing. Diaz challenges five sentencing enhancements and his

sentence’s substantive reasonableness. But all these were proper.

A. All five sentencing enhancements were proper

First, Diaz challenges his six-level enhancement for substantially financially harming

at least twenty-five victims. U.S.S.G. § 2B1.1(b)(2)(C). Though the court did not name

specific victims, it was entitled to “draw reasonable inferences from the factual record.”

United States v. Poulson, 871 F.3d 261, 269 (3d Cir. 2017). More than ten victims testified

at trial to suffering financial hardship. Some had spouses. Another victim testified at sen-

tencing. And twenty-nine more submitted victim-impact statements. Diaz claims that thir-

teen of these victims did not suffer any hardship. But even knocking out those thirteen still

leaves more than twenty-five.

Diaz also challenges his two-level enhancement for using sophisticated means.

U.S.S.G. § 2B1.1(b)(10)(C). He is right that fraud necessarily involves lying, so lying can-

not always count as a sophisticated means of committing fraud. But Diaz lied in a particu-

larly sophisticated way. He persuaded his many clients to sign blank documents, then

forged their information and sent the documents to supervisors and regulators. Those for-

geries helped him sidestep regulatory restrictions and evade detection. His long-term,

multi-step scheme was more complex than typical mail or wire fraud. See United States v.

Fountain, 792 F.3d 310, 319 (3d Cir. 2015) (listing “the duration of a scheme … and efforts

to avoid detection” as relevant factors).

7 Next, Diaz objects to his four-level enhancement for violating a securities law. U.S.S.G.

§ 2B1.1(b)(20)(A). He says he was convicted only of mail and wire fraud, not securities

fraud. But as long as the sentencing judge does not exceed the maximum sentence, he may

find facts that increase sentences. Apprendi v. New Jersey, 530 U.S. 466, 481 (2000). This

is true even if those facts amount to a “separate offense.” United States v. Grier, 475 F.3d

556, 565–68 (3d Cir. 2007).

In addition, Diaz challenges his two-level enhancement for being a leader or manager

in the crime. U.S.S.G. § 3B1.1(c). He attacks the sentencing court’s reliance on his assis-

tant’s testimony, arguing that she was his bitter ex-girlfriend and had changed her story.

But the District Court did not clearly err in crediting her testimony, particularly because

other employees’ testimony corroborated it.

Finally, Diaz attacks his two-level enhancement for obstructing justice. U.S.S.G.

§ 3C1.1. But the court did not clearly err in finding that Diaz had “lied through his teeth”

at trial. App. 2253. Although Diaz protests that the court burdened his constitutional right

to testify, that right “does not include a right to commit perjury.” United States v. Dunnigan,

507 U.S. 87, 96 (1993).

B. Diaz’s sentence is substantively reasonable

The District Court correctly calculated Diaz’s guidelines range and followed proper

procedures. So we must affirm his sentence as substantively reasonable “unless no reason-

able sentencing court would have imposed” it. Tomko, 562 F.3d at 568. Here, the District

Court discussed the egregiousness of Diaz’s crime, the length of his rap sheet, the number

of victims severely harmed, and the other 18 U.S.C. § 3553(a) factors. Though Diaz 8 rehashes the arguments he made below, the sentencing court reasonably rejected them. And

far from being harsh, it sentenced him more than four years below the advisory guidelines

range. That sentence was reasonable, indeed lenient.

*****

Diaz objects to a flurry of evidentiary and sentencing rulings. But the District Court

treated each one with care, ruled reasonably, and sentenced leniently. Finding no error, we

will affirm.