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United States v. Cohen

United States Court of Appeals, Fourth Circuit

April 25, 2018

UNITED STATES OF AMERICA, Plaintiff-Appellee,
v.
JEFFREY BRIAN COHEN, Defendant-Appellant.

          Argued: January 25, 2018

          Appeal from the United States District Court for the District of Maryland, at Baltimore. William D. Quarles Jr., District Judge. (1:14-cr-00310-WDQ-1)

         ARGUED:

          Brian Joseph Kornbrath, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Clarksburg, West Virginia, for Appellant.

          Harry Mason Gruber, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee.

         ON BRIEF:

          Rod J. Rosenstein, United States Attorney, Joyce K. McDonald, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee.

          Before KING, FLOYD, and THACKER, Circuit Judges.

          KING, CIRCUIT JUDGE.

         Jeffrey Brian Cohen appeals the criminal judgment entered against him in the District of Maryland in December 2015. Cohen, who represented himself pro se during most of the protracted criminal proceedings in the district court, pleaded guilty in June 2015 to the offenses of wire fraud, aggravated identity theft, making false statements to insurance regulators, and obstruction of justice. Those offenses were among thirty-one charges lodged against him by the grand jury, all stemming from a massive insurance scam that caused losses exceeding $100, 000, 000. Cohen was sentenced to an aggregate term of 444 months in prison. Notwithstanding the appeal waiver in his plea agreement with the United States Attorney, Cohen pursues this appeal. The issues we must resolve include the applicability of Cohen's appeal waiver, plus a right-to-counsel contention relating to his sentencing. As explained below, we dismiss in part and affirm in part.

         I.

         A.

         During the relevant period, Cohen was the president and chairman of an entity named Indemnity Insurance Corporation RRG, and he had previously controlled its predecessor, Indemnity Insurance Corporation of DC, RRG (collectively "IIC"). IIC marketed and sold general liability and other types of insurance to individuals and businesses in the entertainment industry. As such, IIC was obliged to submit quarterly and yearly financial statements to insurance regulators. Such regulators are responsible for protecting policyholders and the public through their oversight of the insurance industry and by making certain that insurers such as IIC are able to perform their coverage obligations.

         Beginning in 2008 and continuing through at least 2013, Cohen engaged in a multi-faceted scheme to defraud IIC policyholders and the public by misrepresenting the financial status of IIC. In furtherance thereof, Cohen created a web of false and fraudulent financial documents, including bank statements, letters of credit, reinsurance documents, financial statements, and account balances. In carrying out his fraud scheme, Cohen sent misleading and fraudulent representations to auditing firms and others, seeking and securing favorable opinions on the financial standing of IIC. Cohen then touted IIC's false financial standing and inflated ratings to current and potential policyholders. As a result of the scheme, IIC received more than $100, 000, 000 in insurance premiums.

         On June 24, 2014, after ferreting out Cohen's fraud scheme and related criminal activities, the FBI and the federal prosecutors in Maryland secured an indictment against Cohen from the grand jury in Baltimore. According to the authorities, that indictment and Cohen's arrest upended his intentions to harm public officials. During their investigation, federal agents discovered that Cohen had purchased such items as a long range tactical rifle, plus ammunition and a night vision device. The agents also ascertained that Cohen had researched homemade bombs, purchased ammonium nitrate, and made audio recordings about plans to attack public officials. As a result, Cohen has been in federal custody since his arrest in June 2014.

         The third superseding indictment of December 2, 2014 - the operative indictment in this appeal - charged Cohen with thirty-one offenses (the "Indictment"). J.A. 68-92.[1]According to the Indictment, Cohen transmitted by wire a vast number of false and misleading communications in furtherance of his fraud scheme. Cohen also fraudulently used the identities of other persons to lend credibility to false financial documents. To conceal the actual financial condition of IIC, Cohen presented fraudulent financial statements to insurance regulators in both Delaware and the District of Columbia. As his fraud scheme began to unravel, Cohen threatened witnesses in an endeavor to obstruct their communications of his wrongdoing to the authorities. The Indictment exposed Cohen to the forfeiture of more than $100, 000, 000.

         B.

         Cohen initially retained his defense counsel, but those lawyers withdrew after the grand jury returned its initial indictment. The district court then appointed the federal public defender to represent Cohen. In early November 2014, Cohen moved to terminate his counsel and to represent himself pro se. The public defender then moved to withdraw from the representation, advising the court that Cohen's request to represent himself was unequivocal.

         The district court referred the representation motions to a magistrate judge. During a so-called Faretta hearing, [2] Cohen confirmed to the magistrate judge the following:

• he had studied law and previously represented himself in court;
• he understood the charges in the Indictment, the maximum permissible penalties, and that the Sentencing Guidelines applied;
• he understood that the trial judge could not provide legal advice or assist him on how to proceed; and
• he knew that the proceedings would be complex, conducted according to the rules of evidence and criminal procedure, and that a trained lawyer might better represent him.

See J.A. 97-100. Cohen advised the magistrate judge that he had decided to represent himself voluntarily "after much thought and deliberation." Id. at 100. At the hearing's conclusion on November 17, 2014, the judge granted the public defender's motion to withdraw and authorized Cohen to represent himself pro se. Nevertheless, the judge appointed a "standby counsel" to assist Cohen's pro se efforts during the proceedings.[3]

         C.

         1.

         In late November 2014, after the district court authorized his pro se self-representation, Cohen challenged the pretrial seizures of his assets by the federal authorities and sought relief therefrom. Cohen asserted, inter alia, that the grand jury had been rigged and contended that there was no nexus between the alleged offenses and the seized assets. The government, on the other hand, emphasized that the seizures had been made pursuant to duly issued warrants and were predicated on judicial findings of probable cause. On January 22, 2015, the magistrate judge conducted proceedings on several pending issues, including the seized property questions. The judge then recommended the denial of that challenge, concluding that the pretrial seizures had been properly made. Although Cohen sought reconsideration, the court adopted the magistrate judge's recommendation.

         2.

         Cohen made other efforts to gain access to the seized assets. In February 2015, he moved for another hearing on the propriety of those seizures, relying on our decision in United States v. Farmer, 274 F.3d 800 (4th Cir. 2001).[4] Cohen requested the district court to rule that the government had restrained his untainted assets without probable cause, thereby undermining his use of those assets to hire standby counsel of his choice. Cohen argued that he was entitled to a Farmer hearing because he wanted to terminate his appointed standby counsel, and he could not afford to hire a standby counsel of his choice without the seized assets.

         The government opposed Cohen's Farmer hearing request, explaining that the asset seizures were supported by probable cause and that Cohen had failed to show that the seized assets would not be subject to forfeiture should he be convicted. The prosecutors emphasized that Cohen had already waived his right to counsel. Acknowledging that Cohen could change his mind and again request an appointed lawyer, the prosecutors asked the district court to assess whether Cohen intended to abandon his pro se status and reassert his right to counsel. The government thus suggested that an additional Faretta inquiry would best ensure that Cohen understood his right to counsel and his waiver of that right.

         Cohen opposed another Faretta hearing being conducted by the district court, arguing that the prosecutor's suggestion was simply an effort to "obstruct [his] right to self representation." J.A. 2280. Cohen maintained that the prosecutors had "no right to question [his] ability to properly defend himself" and that "any further action . . . on [the Faretta] issue would be a waste of court resources." Id. Cohen explained that he would continue to represent himself and that he was fully aware of his rights and the risks of self-representation. Id. Cohen emphasized that, by his Farmer hearing request, he sought "funds to pay for a new standby counsel" of his choice. Id. Cohen also asserted that he needed the Farmer hearing because his appointed standby counsel was "incompetent" and "unprofessional." Id.

         On April 17, 2015, the magistrate judge authorized Cohen's standby counsel to withdraw, but denied his Farmer hearing motion. The judge explained that Cohen had failed to make a prima facie showing that the seized assets were untainted. When again asked if he wanted to continue to represent himself, Cohen reconfirmed that position. Cohen then appealed those rulings to the district court which, in early May 2015, sustained the magistrate judge and denied the Farmer hearing request. In so ruling, the court explicitly recognized that Cohen was seeking only to hire his standby counsel, and emphasized that Cohen was not seeking to retain an attorney to actually defend him. In the court's view, the Farmer decision was unavailing for Cohen because, as the Supreme Court has recognized, there is no constitutional right to a standby counsel of a defendant's choosing. See United States v. Cohen, No. 1:14-cr-0310 (D. Md. May 7, 2015), ECF No. 324 at 90 (relying on Mckaskle v. Wiggins, 465 U.S. 168, 183 (1984)). On April 20, 2015, the court nevertheless appointed a new standby counsel to assist Cohen in the district court proceedings.[5]

         D.

         1.

         On June 1, 2015, Cohen went to trial before a jury in Baltimore. Four days later, Cohen entered into a plea agreement with the United States Attorney, agreeing to plead guilty to Counts One, Twenty, Twenty-Four, and Twenty-Eight of the Indictment (the "Plea Agreement"). J.A. 322-36. Those offenses included wire fraud, in violation of 18 U.S.C. § 1343 (Count One); aggravated identity theft, in violation of 18 U.S.C. § 1028A (Count Twenty); making false statements to an insurance regulator, in violation of 18 U.S.C. § 1033(a) (Count Twenty-Four); and obstruction of justice, in violation of 18 U.S.C. § 1512(b) (Count Twenty-Eight). The Plea Agreement contains a fulsome statement of admitted facts that readily establish Cohen's guilt on each of the four offenses.[6]

         The Plea Agreement contains two sentencing stipulations. That is, Cohen was subject to a base offense level of 7 on Count One and a mandatory consecutive sentence of two years on Count Twenty. There are no stipulations as to sentencing on Counts Twenty-Four and Twenty-Eight. The right of the parties to seek Guidelines adjustments was reserved, including possible adjustments for loss amount, number of victims, sophisticated means, leadership role, and obstruction of justice.

         The Plea Agreement includes two waiver provisions. First, Cohen waived his trial related rights by pleading guilty. The Plea Agreement also explains Cohen's waiver of appeal by specifying that if he

were found guilty after a trial, [Cohen] would have the right to appeal the verdict and the [c]ourt's pretrial and trial decisions on the admissibility of evidence. . . . By pleading guilty, [Cohen] knowingly gives up the right to appeal the verdict and the [c]ourt's decisions.

J.A. 325-26 (emphasis added). The Plea Agreement provides that, "[b]y pleading guilty, [Cohen] will be giving up all of these rights, except the right set forth in the 'Waiver of Appeal' paragraph below, to appeal an illegal sentence." Id. at 326. That waiver of appeal paragraph provides in relevant part as follows:

In exchange for the concessions made by [the United States Attorney], the defendant waives his rights to appeal as follows: the defendant knowingly waives all right, pursuant to 28 U.S.C. § 1291, or otherwise, to appeal the ...

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