On Appeal from the United States District Court for the Western District of Pennsylvania, (D.C. Criminal No. 03-cr-00245), District Judge: Honorable Thomas M. Hardiman.
The opinion of the court was delivered by: Van Antwerpen, Circuit Judge
Before: RENDELL, VAN ANTWERPEN, and WEIS, Circuit Judges.
On October 14, 2004, a jury in the Western District of Pennsylvania convicted Frederick Banks on charges of mail fraud, criminal copyright infringement, uttering and possessing counterfeit or forged securities, and witness tampering. These convictions stemmed from Banks's sales of illegally copied ("pirated") versions of copyrighted Microsoft software products through an Internet marketplace website, Amazon.com. Following his conviction, the District Court, on February 25, 2005, imposed on Banks a sentence that varied upward by three months from the advisory sentence range set forth in the United States Sentencing Guidelines ("Guidelines"), and, on the Government's motion, also issued an in personam forfeiture judgment in the amount of Banks's mail fraud proceeds.
Before us now is Banks's appeal from his conviction and sentence, in which he asserts numerous claims of error based on the District Court's actions before his trial, on events occurring at his trial, and on the District Court's actions at his sentencing. Banks was sentenced after the Supreme Court announced its landmark decision in United States v. Booker, 543 U.S. 220 (2005).
Of the seven issues Banks raises on appeal, two are novel to this Court. First, Banks raises the question whether the District Court was obligated to provide him with advance notice under Federal Rule of Criminal Procedure 32(h) of its intent, under Booker, to vary its sentence from the advisory sentence range set forth in the Guidelines. Second, Banks questions whether the District Court had statutory authority to order an in personam forfeiture judgment against him for the amount of the proceeds he obtained through his mail fraud.
As we explain below, we find no error in the District Court's actions before, during, or after Banks's trial or at his sentencing. Furthermore, we conclude the District Court had statutory authority to issue the in personam forfeiture judgment and was not obligated to provide advance notice of its intent to vary from Banks's Guidelines sentencing range. Accordingly, we will affirm Banks's convictions and sentence in their entirety.
In setting forth the facts of this case, we construe them in the light most favorable to the Government, as we must following the jury's guilty verdict. Glasser v. United States, 315 U.S. 60, 80 (1942). According to the evidence adduced at trial, in 2002 Banks opened a seller's account on Amazon.com, an on-line marketplace, using the names Rick Burgess and John Cain. When Banks opened these accounts, Amazon.com informed him that only full retail versions of software products could be sold through his account and that sales of copied or duplicated software were prohibited.
Banks then posted for sale on his account various Microsoft products, for which products he set prices and posted additional information concerning the products' condition. Through his seller's account, Banks sold copies of Microsoft products to a variety of buyers from 2002 into 2003. These buyers suspected that the software they purchased from Banks was illegally copied because the compact discs ("CDs") they received from Banks contained generic white CDs with fake labels and fake package inserts.
By 2003, Amazon.com had received several complaints about Banks's activities. In January, 2003, Amazon.com informed Banks it was blocking his account because of reports of buyers receiving "recopied" Microsoft software.
Banks then opened a new seller's account on Amazon.com under the name Mark Howard. Using this new account, Banks posted additional advertisements offering various Microsoft products for sale. One buyer, Action Software, Inc., purchased a total of $294,859.00 of Microsoft products from Banks. Action Software expected to receive 50 boxes of product, but only 5 boxes of product arrived via United Parcel Service ("UPS"), which boxes contained CDs with the IBM name on them. After opening one of these boxes, Action Software's representative, Samantha Belfer, concluded the company had been defrauded. However, because Banks had sent the CDs cash-on-delivery, Belfer had already given UPS a check for $49,000.00 made out to Banks in exchange for the CDs.
After Banks denied knowledge of the IBM CDs, Belfer contacted the Federal Bureau of Investigation ("FBI"), which initiated an investigation. FBI agents went to Banks's residence, whereupon Banks informed them he had no knowledge of why Action Software did not receive its Microsoft products.
In May, 2003, the FBI obtained a search warrant for Banks's residence. A search of the residence revealed computers, blank CDs, a CD duplicating machine, and empty boxes from Microsoft and IBM software. The FBI also searched the contents of Banks's computers, which contents included images of the front and back sides of Microsoft software boxes.
Meanwhile, Banks continued to sell alleged Microsoft software and approached VioSoftware, a Colorado-based reseller of software from which Banks had purchased a Microsoft product in 2002. Banks convinced Warren Do, the chief executive officer of VioSoftware, to sell him $58,661 of Microsoft software. Banks told Do he needed the products immediately, and Do agreed to accept cash on delivery in lieu of advance payment.
VioSoftware then sent Banks a partial shipment via Federal Express on August 28, 2003, and Banks presented Federal Express with a check for $58,661 and made payable to VioSoftware, which check was actually fake. When Do received the fake check, he contacted Banks to tell him that he wanted VioSoftware's products returned and that he knew the check was a fake and had spoken to the FBI. On September 3, 2003, Banks responded that he would return the products if Do would return the fake check to him. Do agreed to return Banks's fake check upon receipt of VioSoftware's products.
On that same date, Do received a subpoena from a grand jury in the Western District of Pennsylvania. The next day, Do received only a partial shipment from Banks. Do then emailed Banks to inform him that he had been subpoenaed, that he had spoken with the FBI, and again requested the return of VioSoftware's products. On September 17, Do emailed Banks:
"I spoke to them on Monday again and told them the truth. I told them I was trying to work it out with you and if you paid me back for everything you owe I would send the check back to you. I'm supposed to call them in a few days to give them a status."
S. App. 55. Banks responded:
"Please don't give them any information they can still supeana [sic] you if you do! and this would all be for nothing. it's up to you of course but I would prefer that. let's consider that we owe you and are working off a credit."
S. App. 55. Banks eventually sent Do a package, but the package contained only damaged materials. In the meantime, Banks sold to other buyers some of the software he had obtained from VioSoftware.
Based on information that Do supplied, the FBI searched Banks's residence a second time on September 29, 2003. That search uncovered additional evidence of software piracy, including computers and Microsoft software products and packages.
On October 7, 2003, a grand jury returned a five-count indictment against Banks. A superseding indictment issued on May 4, 2004, adding counts of uttering and possessing counterfeit or forged securities, and on August 10, 2004, a grand jury returned a second superseding indictment charging Banks with three counts of mail fraud, 18 U.S.C. § 1341 (Counts One, Two, and Three); one count of copyright infringement, 17 U.S.C. § 506(a)(1) and 18 U.S.C. § 2319(b)(1) (Count Four); one count of money laundering, 18 U.S.C. § 1957 (Count Five); one count of uttering and possessing counterfeit and forged securities, 18 U.S.C. § 513(a) (Count Six); and one count of witness tampering, 18 U.S.C. § 1512(b)(2)(A) (Count Seven). The second superseding indictment also contained forfeiture allegations relating to, inter alia, Banks's alleged mail fraud.
The case then proceeded to trial, and after ten days of testimony, on October 14, 2004, the jury found Banks guilty on all seven counts. At the close of trial, Banks moved for acquittal, which motion the District Court denied. Before sentencing, the Government filed a motion for an in personam money judgment against Banks, alleging Banks had "acquired the sum of $70,708.59 from his violation of 18 U.S.C. § 1341." App. 1442-43.
At sentencing on February 25, 2005, the District Court heard oral argument on the in personam forfeiture judgment issue, at which Banks's counsel claimed the District Court lacked statutory authority to impose such a judgment. The District Court observed that there was no controlling case law on the question whether the Government was entitled to an in personam money judgment without specific reference to any forfeitable property.
Following argument, the District Court sentenced Banks. Banks's advisory Guidelines sentence range was 46-57 months, but the District Court, after considering this advisory range, the grounds raised by the parties and the factors set forth in 18 U.S.C. § 3553(a), sentenced Banks to 60 months imprisonment and three years' supervised release. App. 2. The District Court also ordered an in personam forfeiture judgment against Banks for $70,708.59, the amount of Banks's mail fraud proceeds. App. 1444. This timely appeal followed.
We have jurisdiction over the District Court's Order of judgment and conviction pursuant to 28 U.S.C. § 1291. We have jurisdiction to review Banks's sentence pursuant to 28 U.S.C. § 3742(a). ...