United States v. Carpenter

781 F.3d 599

UNITED STATES of America, Appellee

v.Daniel E. CARPENTER, Defendant, Appellant.

No. 14–1286.

United States Court of Appeals, First Circuit.

March 30, 2015.

Martin G. Weinberg, with whom Kimberly Homan was on brief, for appellant.

Christopher J. Smith, Attorney, Appellate Section, Criminal Division, with whom Carmen M. Ortiz, United States Attorney, District of Massachusetts, Lesley R. Caldwell, Assistant Attorney General, Criminal Division, Kelly Begg Lawrence, Assistant United States Attorney, District of Massachusetts, and Sung–Hee Suh, Deputy Assistant Attorney General, Criminal Division, were on brief, for appellee.

Before TORRUELLA, HOWARD, and KAYATTA, Circuit Judges.

Opinion

KAYATTA, Circuit Judge.

We opine for the third time on the United States' prosecution of Daniel Carpenter for mail and wire fraud in connection with his mishandling of client escrow funds. In 2007, we affirmed a district court order setting aside a jury verdict of guilty in favor of a new trial. United States v. Carpenter, 494 F.3d 13 (1st Cir.2007). In 2013, after a second jury also found Carpenter guilty, we reversed a district court order setting aside that verdict, and remanded for sentencing. United States v. Carpenter, 736 F.3d 619 (1st Cir.2013). Now, post-sentencing, we consider Carpenter's direct appeal in which he argues, among other things, that the lengthy duration of this criminal proceeding violated his constitutional and statutory speedy trial rights. For the following reasons, we affirm the judgment of the district court on all grounds.

I. Background

Our 2013 opinion details the acts for which Carpenter stands convicted. In a nutshell, he told clients he would hold their money in escrow accounts for which the client would pay a fixed fee and which would cautiously generate returns of either three or six percent; then (unbeknownst to his clients) he invested the money in high-risk, high-return stock options, hoping to generate excess returns to keep for himself. His option trading fared poorly, and he lost nine million dollars in client funds. At trial, he argued unsuccessfully that he never promised that the client funds would be safe, and that he did not intend to defraud his clients when he failed to disclose his real strategy of using their money to make risky investments to see if he could hit a home run for himself.

Central to this appeal are the details of how this criminal proceeding has lasted so long.

A. The Indictment, First Trial, and Appeal (September 2004—July 2007)

The United States indicted Carpenter in September 2004. In July 2005, Carpenter's first trial ended with a conviction. He moved, among other things, for a new trial. In December 2005, the district court granted that motion for a new trial on the grounds that the government's repeated use of gambling metaphors had unfairly inflamed the jury's passions. United States v. Carpenter, 405 F.Supp.2d 85, 103 (D.Mass.2005). The government appealed, but our court affirmed the order in July 2007, remanding for a new trial. Carpenter, 494 F.3d at 13.¹

B. The Second Trial, Appeal, and Sentencing (August 2007—March 2014)

Following remand, Carpenter's second trial ended with another conviction in June 2008. The district court initially scheduled a sentencing hearing for September 23, 2008. The district court did not sentence Carpenter, though, until almost six years later, in March 2014. This lengthy interval provides the primary basis for Carpenter's Sixth Amendment argument.

1. Carpenter's Motions for Mistrial, Acquittal, and New Trial (June—November 2008)

On June 17, 2008, just before the end of the second trial, Carpenter moved for a mistrial and partial acquittal. On July 3, immediately after his second conviction, Carpenter filed a sixty-seven-page motion for acquittal or new trial.² Using a different legal team, he also filed two “supplemental” motions for acquittal and new trial, raising a number of additional arguments. During July and August 2008, the government and Carpenter filed eleven more motions adding to the arguments for acquittal, mistrial, and new trial, and seeking various rulings on page limits and deadlines. By August 2008, the government complained that Carpenter's briefing totaled over one hundred pages of opening briefs, and nearly eighty pages of reply briefs.

In September, Carpenter filed a second motion for a new trial based on newly discovered evidence. In November, he filed yet a third motion for a new trial based on different newly discovered evidence. (Neither motion concerns the newly discovered evidence at issue in this appeal.)

2. The District Court Hearing on the Post–Trial Motions (December 2008)

On December 3, 2008, the district court held a hearing focusing on the June 17 mistrial motion, which was based on the argument that the government had knowingly solicited false testimony from a witness in violation of Napue v. Illinois, 360 U.S. 264, 79 S.Ct. 1173, 3 L.Ed.2d 1217 (1959). The court also entertained argument on the July 3 motions for acquittal or new trial. The court indicated that it would decide the other pending motions based on the written submissions.

3. Motions Related to the Merrill Lynch Civil Litigation (March—June 2009)

Before the district court ruled on the numerous, often-lengthy motions before it, Carpenter began making additional filings. Understanding these new filings requires a bit of context.

Carpenter traded his clients' funds, in part, through an investment account with Merrill Lynch. At Carpenter's trial, the government solicited testimony from three Merrill Lynch employees about the riskiness of Carpenter's trading strategy. These employees, including one to whom we refer as “GL,” denied they knew Carpenter was trading third-party funds. However, GL's testimony was impeached when a lawyer for one of Carpenter's clients testified that Carpenter had arranged a phone call between that lawyer and GL. Phone and fax records corroborated the lawyer's version of events.³ Even when confronted with the phone records, however, GL continued to deny the conversation took place.

Carpenter's primary defense to the fraud charges was his good faith: i.e., that he lacked the specific intent to defraud because he genuinely thought he had investment discretion over the funds his company held.⁴ In his view, evidence showing he was open with Merrill Lynch about the source of the funds he was trading supported his good-faith defense on the logic that he would not have been open with Merrill Lynch if he knew he was doing something wrong. The government largely demurred, calling Merrill Lynch witnesses primarily to demonstrate the riskiness of Carpenter's approach, and devoting little attention to whether anyone at Merrill Lynch knew the source of the funds. As the prosecution told the jury, its position was that whatever Merrill Lynch employees knew was irrelevant because what mattered were the representations Carpenter made to his clients.

The district court, too, questioned the probative force of Carpenter's argument that Merrill Lynch knew the source of the funds. It rejected a motion to acquit for insufficient evidence based on a version of this argument after both trials. Carpenter, 405 F.Supp.2d at 93–94 ; United States v. Carpenter, 808 F.Supp.2d 366, 378 (D.Mass.2011). Nevertheless, Carpenter continued (and continues in this appeal) to argue that any evidence showing that Merrill Lynch was aware of the source of the funds was highly relevant to his claims.

With this background in mind, we now return to the procedural chronology. In early 2009, shortly after the hearing on Carpenter's various motions for mistrial, acquittal, and new trial, new documents began to emerge as part of a civil lawsuit against Merrill Lynch. Those documents further tended to show that Merrill Lynch employees were aware of the source of the funds Carpenter was trading.

Carpenter touted this unfolding information as bearing on his pending motions. See ECF No. 349 at 1, June 10, 2009 (noting that the new information has “a direct bearing on Carpenter's pending post-trial motions”). On March 19, 2009, Carpenter filed an emergency motion seeking, among other things, to compel the government to acquire and review those new documents. Between March and July, Carpenter filed five reports updating the district court on the developments in the civil lawsuit against Merrill Lynch, responding to the government's arguments, and reiterating his argument that the government should be ordered to seek out and review the new documents. This included a joint report submitted by the government and Carpenter, indicating that the government had agreed to review the new information and report “whether the government agrees that a new trial or dismissal of the charges is appropriate in light of the new evidence.” ECF No. 352 at 2, June 26, 2009.

4. Carpenter's Motion for Expedited Hearing (October 2009)

On October 28, 2009, Carpenter moved for expedited review of his pending motions, albeit by filing a thirty-three-page motion supported by over three hundred pages of exhibits. ECF No. 355, October 28, 2009. Although the government had not yet reported back on the new Merrill Lynch information pursuant to the June 26 agreement, Carpenter argued that there was now more than enough information available for a ruling on his initial motions from June and July 2008. Id. at 29. Carpenter stressed that fifteen months had elapsed since he filed those initial post-trial motions.Id. at 1–2, 26, 31–32.

5. Additional Delay and Additional Motions (October 2009—September 2011)

By June 2010, the district court had yet to rule, notwithstanding Carpenter's renewed expression of concern about the delay. See ECF No. 360 at 3–4, January 13, 2010. In a June 17 letter, Carpenter sent the court conflicting messages: he asked it to decide the pending motions for acquittal, mistrial, or new trial, but he also advised the court that such action likely would not be necessary because Carpenter...