United States v. Stewart

129 F. App'x 758
CourtCourt of Appeals for the Fourth Circuit
DecidedApril 14, 2005
Docket03-4775
StatusUnpublished
Cited by4 cases

This text of 129 F. App'x 758 (United States v. Stewart) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Stewart, 129 F. App'x 758 (4th Cir. 2005).

Opinion

PER CURIAM:

On May 31, 2001, a grand jury returned a second superseding indictment charging Appellant Terry W. Stewart (“Stewart”), with 37 counts of conspiracy, mail fraud, wire fraud, and money laundering. After •a trial in November 2001, in which Stewart appeared pro se, a jury convicted Stewart on 24 of the 37 counts. The district court thereafter sentenced him to 2,100 months (175 years) of imprisonment. Stewart appeals his conviction and sentence. We affirm Stewart’s conviction. However, consistent with United States v. Hughes, 401 F.3d 540 (4th Cir.2005), our recently published opinion giving guidance on the application of United States v. Booker, — U.S. -, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), we find plain error in sentencing, exercise our discretion to notice the error, vacate the sentence, and remand to the district court for resentencing.

I.

This case involves a “Ponzi” scheme 1 devised and carried out by Phillip Vaughan (“Vaughan”), Phillip Greer (“Greer”) and, Stewart. The premise of the scheme was the marketing of an investment opportunity involving what was represented to the victims as a secret method of trading options and futures in a “risk free” manner that produced consistently large returns and allowed the investment to grow tax free through the use of trusts. These representations were false.

In 1995, Vaughan formed a company named Banyan International Ltd. (“Banyan”) to solicit investments from individuals. From 1996 through March 2000, Banyan salesmen sold “note receivables” offering high fixed rates of return to unsophisticated individuals. Proceeds from new investors were used to make lulling payments to prior investors, and to pay money to Banyan insiders, allegedly including Stewart. Banyan owed over 500 investors more than $89 million when the scheme was uncovered. Only $4.4 million was seized from Banyan brokerage accounts. 2

*761 In 1994, Stewart and his wife, Jeni, began selling private trusts as independent contractors for Commonwealth Trust Company (“Commonwealth”), a California-based company. 3 In the latter part of 1996, Stewart met Vaughan and began a business relationship. Stewart, who was not an employee or officer of Banyan, claims that the relationship consisted of mutual referrals. However, the Government maintains that a key component of. the marketing of the “note receivables” in the Ponzi scheme was the representation that the earnings on the investments were non-taxable. In this regard, Banyan’s investors were told that to render their investment non-taxable, they needed to purchase a “pure trust organization,” (“PTO”) and were directed to Commonwealth to make the purchase. 4 Commonwealth sold three products to Banyan investors: (1) PTOs, (2) Internationally Business Corporations (“IBCs”), and (3) “Private Company Trusts” (“PCTs”).

Stewart offered his services at seminars throughout the country. At these seminars, he advised people how to transfer ownership of personal and business assets into one or more PTOs, IBCs, or PCTs and then issue fabricated hens against the same property to create the appearance that the property had no net value. 5 At some of these seminars, Banyan salesmen spoke, and Stewart promoted the Banyan investment vehicles. Stewart, through Commonwealth, paid Banyan a $200 referral for people it referred to Stewart.

Stewart charged $2,525 for the purchase of a PTO, which included trust documents from Maricopa County, Arizona and minutes of trustees meetings appointing the purchaser as “managing director” of the trust. The package also included a “trust identification number” to be used in place of a tax identification number. The “trust identification numbers” used the same state prefix and number of digits as tax identification numbers, but were not legitimate.

Vaughan, Greer, and the other co-defendants all pled guilty. Stewart was the only one to proceed to trial. This appeal from Stewart’s conviction and sentence follows.

II.

First, Stewart argues that he did not knowingly and intelligently waive his right to counsel. In the alternative, he argues that the district court judge should have appointed standby counsel given the *762 complexities of his criminal trial. We reject these arguments.

A.

Determination of a waiver of the right to counsel is a question of law, and we review it de novo. United States v. Singleton, 107 F.3d 1091, 1097 n. 3 (4th Cir.1997). The Supreme Court has held that under the Sixth Amendment a criminal defendant must be afforded the right to counsel, including court-appointed counsel if the defendant is financially unable to retain an attorney to defend himself. Gideon v. Wainwright, 372 U.S. 335, 341, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963). But the Supreme Court has also made clear that “although courts are commanded to protect the right to counsel zealously, the defendant can waive the right if the waiver is knowing, intelligent, and voluntary.” Singleton, 107 F.3d at 1095 (citing Brady v. United States, 397 U.S. 742, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970); Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938)).

Courts must take care not to force counsel upon a defendant, because in addition to the right to the assistance of counsel, the Sixth Amendment implicitly provides an affirmative right to self-representation. Faretta v. California, 422 U.S. 806, 807, 95 S.Ct. 2525, 45 L.Ed.2d 562 (1975). To preserve both the right to counsel and the right to self-representation, “a trial court must proceed with care in evaluating a defendant’s expressed desire to forgo representation and conduct his own defense.” Singleton, 107 F.3d at 1096. Indeed,

[a] trial court evaluating a defendant’s request to represent himself must “transverse ... a thin line” between improperly allowing the defendant to proceed pro se, thereby violating his right to counsel, and improperly having the defendant proceed with counsel, thereby violating his right to self-representation. A skillful defendant could manipulate this dilemma to create reversible error.

Fields v. Murray, 49 F.3d 1024, 1029 (4th Cir.1995) (en banc) (citations omitted).

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677 F.3d 190 (Fourth Circuit, 2012)
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Bluebook (online)
129 F. App'x 758, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-stewart-ca4-2005.