The Tenth Circuit published its opinion in United States v. Gordon on Friday, March 15, 2013.
Defendant-Appellant George David Gordon is a former securities attorney convicted of multiple criminal charges relating to his alleged participation in a “pump-and-dump” scheme where he, along with others, violated the federal securities laws by artificially inflating the value of various stocks, and then turning around and selling them for a substantial profit. He was sentenced to 188 months in prison and was ordered to pay $6,150,136 in restitution. The government also restrained some of his property before the indictment was handed down and ultimately obtained criminal forfeiture of that property.
Gordon raised numerous arguments on appeal. He argued that the he was deprived of the Sixth Amendment right to counsel because the government placed restraints on various property, including two of his law firm accounts, so he lacked the funds to pay for counsel of his choice. In deciding against Gordon on this issue, the Tenth Circuit refused to consider trial brief arguments he attempted to incorporate into his appellate brief by reference as that is disapproved. After reviewing his appellate arguments, the court agreed with the trial court that Gordon failed to show he was denied access to funds to pay for his defense in any substantial sense. He paid his defense counsel over $900,000 and “counsel remained fully and actively engaged in the case throughout the entire trial court proceedings.”
Next, Gordon challenged the sufficiency of the evidence. In connection with misleading promotional material sent or paid for by the conspirators, Gordon contended that under Rule 10b-5 he had no liability because he had no duty to disclose. Once a party elects to disclose material facts, however, the party has a duty to speak truthfully and correct misstatements. The Tenth Circuit found “substantial evidence that many aspects of the information disseminated in the promotional campaigns were false and misleading, and that misleading statements went uncorrected by numerous material omissions.” The court also found sufficient evidence that Gordon prepared or endorsed false opinion letters and that he violated 18 U.S.C. § 1512(c)(2) when he had a friend sign backdated documents to present to the government in an attempt to prevent the forfeiture of his home.
Gordon complained that the district court erred in permitting the government to insinuate guilt by introducing evidence that infringed upon his Fifth Amendment right to remain silent. At trial, the government offered the testimony of Lindberg to establish that he and Gordon had discussed who should be permitted to testify in the proceedings before the SEC. Two additional witnesses testified that Gordon advised them to take the Fifth Amendment. The testimony was offered to corroborate Lindberg’s testimony that he and Gordon had essentially calculated a cover-up strategy. The Tenth Circuit rejected Gordon’s claim that this tactic tainted the invocation of his own Fifth Amendment right not to testify at trial because it did not refer to his right.
The court rejected Gordon’s argument that the district court erred by excusing a juror without adequate cause. The juror had informed court staff that her continued presence on the jury could affect the outcome of the case. The district court determined the juror had not contaminated the rest of the jury and dismissed her for potential bias. The court did not address whether the trial court abused its discretion because even if it had, the juror’s dismissal did not cause any prejudice to Gordon.
The court also rejected Gordon’s claim that the trial court violated the Speedy Trial Act. The trial court properly identified the complex nature of the case and the voluminous records that would take additional time for the parties to organize and analyze when it granted an ends-of-justice continuance. Gordon’s interlocutory appeal and pending trial court motions created additional periods of delay that were excludable from the Act.
Gordon’s challenges to his sentencing also failed. In fraud cases where loss cannot be accurately calculated, a sentence may be based on gain. The court found no error in the trial court’s calculations, but even if it had, the error would be harmless because of the court’s downward variance from the sentencing guidelines. The court also properly included Gordon’s co-conspirators gains in making sentencing calculations.
Finally, the district court did not err in making its forfeiture orders. The defendant’s conviction and sentence were affirmed.