Eleventh Circuit Court of Appeals - Published Opinions

Tuesday, September 24, 2019

Annamalai: Reversing Bankruptcy Fraud Convictions, Fugitive Harboring Convictions, and Loss Amount

In United States v. Annamalai, No. 15-11854 (Sept. 24, 2019) (Jordan, Wilson, Moore (S.D. Ga.)), the Court affirmed in part and reversed in part the defendant's fraud convictions and sentences.

First, the Court rejected the defendant's argument that the government improperly joined 34 offenses and the court erred by denying his motion to sever some of the charges.  The Court reasoned that the charges arose out of the same general fraudulent scheme, and the defendant could not show prejudice just because the jury convicted him of several counts despite insufficient evidence.

Second, the Court rejected the defendant's argument that the prosecution, conviction, and sentencing violated his First Amendment right to freedom of religion.  The government's case was not an impermissible attack on the defendant's Hindu religion but rather involved a scheme where the defendant abused his position as a Hindu priest and engaged in fraud.

Third, the Court reversed the defendant's bankruptcy fraud convictions because the funds at issue were acquired after the Hindu temple filed for bankruptcy and after the trustee shut it down.  Similarly, a post bankruptcy petition check did not constitute property of the bankruptcy estate and thus was not prosecutable.  The evidence was therefore insufficient.  And because the conspiracy and money laundering counts were based on the substantive bankruptcy fraud counts, the Court reversed those too.

Fourth, the Court reversed the defendant's conviction for conspiracy to harbor a fugitive.  The Court found insufficient evidence of an agreement to commit an act to help harbor or conceal a person for whom a warrant was issued.  The defendant told his wife to tell the fugitive to use cash, but that mere provision of advice was insufficient without providing some sort of material or physical assistance.  The wife then gave false statements to agents about the fugitive and his whereabouts, but that too was insufficient to constitute harboring or concealing.  Lastly, the fact that the fugitive purchased a plane ticket out of the US was insufficient to show that the defendant or his wife harbored or concealed him.

Fifth, the Court found insufficient evidence to support the loss amount at sentencing.  That finding was based on the speculative assumption that every one of 467 credit card disputes filed against the Hindu temple involved a fraudulent charge, even though only 85 of them included records of fraud, from which a government agent extrapolated.  While extrapolation may be permissible in some scenarios, the methodology here assumed absolute fraud in every instance and was based on too much speculation: the government assumed that all 467 disputes involved fraud even without any indication that it did; the government did not know whether any of the disputes were resolved in favor of the Hindu temple; and the defense presented evidence that some of the disputes had been resolved.