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United States v. Silvious

January 4, 2008

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
OWEN F. SILVIOUS, DEFENDANT-APPELLANT.



Appeals from the United States District Court for the Eastern District of Wisconsin. No. 05 CR 74-William C. Griesbach, Judge.

The opinion of the court was delivered by: Sykes, Circuit Judge

SUBMITTED FEBRUARY 14, 2007*fn1

Before KANNE, ROVNER, and SYKES, Circuit Judges.

Owen Silvious pleaded guilty to five counts of mail fraud, 18 U.S.C. § 1341, and was sentenced to 105 months' imprisonment and three years' supervised release with several special conditions. The district court also ordered restitution of approximately $1.2 million and criminal forfeiture of the proceeds of the fraud. Silvious had counsel in the district court but is representing himself on appeal. He argues that he should have been permitted to withdraw his guilty pleas and also challenges several aspects of his sentence. We affirm.

I. Background

Silvious contracted to supply 6500 metric tons of wheat to Toan Hung Flour Mills ("TH Flour"), a flour mill in Vietnam. He gave TH Flour, its bank, and the broker of the deal, Akhtar Khwaja, numerous documents purporting to demonstrate that the wheat had been inspected, certified, and loaded onto a freighter in Houston, Texas. Silvious accepted nearly $700,000 in payment from the $1.17 million the flour mill paid Khwaja on the contract. The shipment did not arrive as promised, and after first giving assurances, Silvious ultimately claimed that the wheat had spoiled due to poor ocean conditions and delays at the Panama canal. A subsequent FBI investigation prompted by a complaint from the owner of TH Flour revealed that all of the documents Silvious had provided were fraudulent and that no shipment had ever been arranged. As a result of Silvious's fraud, TH Flour defaulted on a high-interest loan and became the target of an investigation by Vietnamese authorities.

In March 2005 Silvious was charged with five counts of mail fraud. The indictment also included notice that the government would seek criminal forfeiture of certain assets that were specifically identified as proceeds of the crime. The indictment stated that the government sought forfeiture pursuant to 18 U.S.C. § 982 and § 2314, and 21 U.S.C. § 853.

Silvious and his attorney, Thomas Phillip, began plea negotiations with the government. At the first change-of-plea hearing, Phillip reported to the district court that the parties had been unable to reach terms acceptable to Silvious, but that Silvious was contemplating entering blind pleas. A second change-of-plea hearing was held on August 16, 2005, but when that hearing commenced, Silvious told the court he was reluctant to plead guilty because (he argued) § 982 does not authorize forfeiture of the proceeds of mail fraud. The district court replied that any objection to the forfeiture would be taken up at sentencing.

During the ensuing plea colloquy, Silvious told the court he would seek to withdraw his guilty pleas "if the Government should do anything between now and the day I'm sentenced that would interfere with my being able to accomplish what has to be accomplished." When the judge told him that a guilty plea "disposes of" the case, Silvious expressed his concern that the government would renege on an oral promise to recommend a downward adjustment for acceptance of responsibility and a prison sentence within the guidelines range. The government vowed to keep its promise but noted that the district court had the final authority to select a sentence. After Silvious stated he understood and still wanted to proceed, the court accepted his guilty pleas to the five counts of mail fraud.

A hearing on sentencing and forfeiture was then scheduled for November 17, 2005. In the meantime, the district court entered a preliminary order of forfeiture. Silvious, through counsel and in a pro se brief, again objected to the statutory basis of the forfeiture. In its written response, the government conceded that the statutes cited in the indictment did not authorize forfeiture of the proceeds of Silvious's fraud. The government argued, however, that forfeiture nevertheless was appropriate under another statute, 28 U.S.C. § 2461(c). The government argued that § 2461(c) authorizes criminal forfeiture in connection with any crime for which civil forfeiture would be authorized-and civil forfeiture for simple mail fraud may be pursued under 18 U.S.C. § 981. See 18 U.S.C. §§ 981(a)(1)(C), 1956(c)(7), 1961(1)(B).

At the sentencing hearing, the district court concluded that the statutory basis for the forfeiture as listed in the indictment was incorrect but agreed with the government that § 2461(c) permitted the forfeiture. The court determined that correcting the statutory basis of the forfeiture would not prejudice Silvious because the indictment had contained the requisite notice that the government intended to seek forfeiture. FED. R. CRIM. P. 32.2(a). Silvious objected to the district court's conclusion and requested a recess.

When the hearing resumed, Silvious requested a continuance so he could file a motion to withdraw his guilty pleas. When asked to explain the basis of his request, Silvious replied that he had always maintained that he is "innocent of this crime" and that he never intended for TH Flour to lose any money. He also accused the government of withholding from "the Vietnamese people" funds it already had seized. The district court concluded that Silvious had not established good cause for withdrawing his pleas. See FED. R. CRIM. P. 11(d)(2)(B). The court reasoned that his claims of innocence contradicted his sworn statements at his change-of-plea hearing and that his motion appeared to be an attempt to delay the proceedings.

The court then proceeded to sentencing, and the government, as agreed, recommended a three-level reduction in Silvious's offense level for acceptance of responsibility. U.S.S.G. ยง 3E1.1(a)-(b). But the district court was skeptical, in particular because Silvious had not accounted for all the proceeds of his fraud and because he had not truthfully acknowledged his criminal conduct. The court thus concluded that acceptance points were not war- ranted. The court calculated a guidelines imprisonment range of 84 to 105 months and imposed a sentence of 105 months based in part on what it characterized as the "extremely aggravated" nature of the offense. The district court also imposed ...


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