Telemarketing Fraud - a TRUE life story; the top guy got 19 long years in federal prison

OPINION OF THE COURT

I. INTRODUCTION

Following his indictment on the charges a jury convicted Charles Paul Hoffecker of one count of conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 371 and three counts of mail fraud in violation of 18 U.S.C. § 1341.   Based on these convictions, the District Court sentenced Hoffecker to a total custodial term of 210 months to be followed by three years of supervised release.   Hoffecker appeals making the following claims:  (1) the District Court erred in admitting the testimony of his former attorney;  (2) the prosecution was time-barred;  (3) the prosecutor engaged in prejudicial misconduct;  (4) the District Court erred in its instructions to the jury;  (5) a Government witness committed perjury;  (6) the District Court erred in excluding expert witnesses;  (7) the District Court erred in admitting evidence of a civil injunction entered against him;  (8) the District Court erred in excluding his out-of-court statements; (9) the prosecutor made improper comments during closing argument;  and (10) the District Court erred in calculating his sentencing guideline range and his sentence is unreasonable.  After our examination of all of these issues we have concluded that those concerning the testimony of his former attorney and the statute of limitations are the most significant and potentially of the greatest precedential importance.   In the end, however, we reject all of Hoffecker's contentions and will affirm the amended judgment of conviction and sentence in this case entered July 24, 2006.

II. FACTS AND PROCEDURAL HISTORY

After a conviction predicated on a jury verdict, we set forth the evidence in the light most favorable to the Government.¹ United States v. Wood, 486 F.3d 781, 783 (3d Cir.2007).   In November 1995, Hoffecker and his co-defendant Charles Edward Myers formed Amitex Investment Services Limited, Inc. (“Amitex”), a Bahamian corporation headquartered in Nassau, purportedly to sell physical commodities on a financed basis.   It appears that Hoffecker contemplated that Amitex's customers who were actually its victims would be United States residents and, in fact, they were.   Hoffecker owned 65% of Amitex, Myers owned 30%, and a third party, Walid El-Houri, owned the remaining 5%. Myers oversaw Amitex's daily operations while Hoffecker operated Amitex through daily phone contact and routine visits.

Hoffecker then incorporated Global Investment Corporation (“Global”) in Florida in December 1995 but relocated Global to Georgia in November 1996.   Global was one of approximately ten “boiler-rooms” in which telemarketers sold the Amitex Leveraged Physical Commodity Investment Program (“LPCIP”) to individual customers.   Hoffecker owned and controlled Global, referred to himself as its “administrator,” and took substantial amounts of money from Global in cash.   His activities with respect to Global were extensive as he visited its offices, created promotional documents for its customers, hired its employees, presided over office-wide meetings and conference calls, brokered deals on its behalf, authorized its materials to be provided to third parties, and conducted sales presentations to the telemarketers.

Hoffecker instructed Global's telemarketers to represent to customers that the LPCIP would purchase actual tangible commodities on a customer's behalf, such as precious metals, gasoline, and heating oil, and store them outside the United States.   The telemarketers also represented that the customers would pay for their purchases in part by using “loans” and “loan financing” that Amitex provided.   Nevertheless, the LPCIP solicited a 20% down payment from its customers with the agreement that Amitex would advance the remaining 80% of the purchase price as a loan at 12% annual interest.   Of course, inasmuch as Amitex did not purchase the commodities it hardly assumed a burden when it engaged itself to make these “loans.”

The LPCIP was an elaborate and highly successful scam.  Customers made down payments and were charged interest for the nonexistent fictional “loans” to purchase commodities that neither Amitex nor anyone else acting on its behalf bought or stored.   Hoffecker enriched himself from the scam by siphoning off millions of dollars from Bahamian bank accounts that he had set up to conceal the fraud from United States law enforcement authorities.

Amitex's brochures and promotional materials falsely represented that Amitex was a legitimate operation, touting promises regarding its acquisition and storage of physical commodities, company history, account executives, office locations, and departments.   A Global brochure extolled the investment's “tangibility,” and represented that “the commodity [purchased would be] physically delivered to a lender for safekeeping.”   App. vol. 25 at 35, 159.   The brochure listed, with photographs, the types of commodities offered, including gold, silver, platinum, heating oil, unleaded gasoline, and foreign currencies.

Hoffecker instructed his telemarketers to emphasize to potential clients that the investment in physical commodities was safe and secure because it had “tangibility and liquidity,” app. vol. 14 at 18, 31;  vol. 25 at 159, and the commodities were “actually something you can hold and touch,” app. vol. 17 at 86.  Global's telemarketers and Global's account agreement represented that the commodities themselves secured the Amitex loans and were being held by Amitex as collateral in insured storage facilities outside the United States.

In addition, Amitex sent investors a brochure touting its “third party storage” facility.   App. vol. 14 at 31;  vol. 17 at 67.   It also advised customers that there was a storage fee, but that this fee currently was not being charged.   This aspect of the fraud was significant as one customer thought of the fee waiver as a “great perk.”   App. vol. 26 at 44.

In reality, neither Amitex nor Global purchased or stored physical commodities.   In fact, Amitex did not have the physical capability to store the physical commodities, and a Government expert testified that the promise to “hold” and “store” several of these commodities physically could not be fulfilled.   In this regard, as an example of Amitex's inability to store the commodities, heating oil and unleaded gasoline degrade and/or become contaminated over a period of months, becoming unsalable.

Hoffecker falsely created the image that Global and Amitex were thriving worldwide entities. Amitex's brochures touted Walid El-Houri as the original founder of Amitex and claimed that Amitex had a 25-year history and had generated “several billion dollars” from its global ventures, including worldwide oil and other commodity transactions.   App. vol. 25 at 164;  vol. 17 at 60-69.   Hoffecker instructed his telemarketers to emphasize Amitex's “billions” of dollars of business to demonstrate that Amitex was a large company which its clients could trust.   App. vol. 17 at 62-63.

These representations were false.   El-Houri was not an original founder of Amitex;  rather, he was briefly a 5% owner who ceased his involvement with Hoffecker and Amitex only a few months after its inception.   El-Houri's attempt to extract himself from Amitex culminated in Amitex's agreement on March 5, 1996, at El-Houri's insistence to destroy all marketing brochures and public relations documents portraying him as a major principal in Amitex.   This agreement was, however, as worthless as all of Amitex's other undertakings as it continued to send its customers brochures throughout 1996 and 1997 touting El-Houri as the original founder of Amitex.

Of course, Amitex did not generate “several billion dollars” over its supposed 25-year history.  Amitex opened for business in November 1995 and did no significant business prior to issuing the brochure touting its 25-year history. Contrary to representations contained in its brochures, Amitex was not engaged in any global business ventures involving worldwide oil transactions, international business transactions, or financing of major global projects.   Moreover, though Amitex brochures and envelopes represented that it had offices in the Bahamas, London, Munich, and Monaco,²its only office was in the Bahamas.

Amitex's and Global's written materials and telemarketers referenced various departments within the companies, such as Amitex's “New Accounts Department,” “Customer Service Department,” “Traders,” and “Compliance Department.”   App. vol. 14 at 72, 160;  vol. 21 at 34-36, 93-94.   These departments, however, did not exist.   Amitex's staff consisted of approximately five Bahamian office workers, whom Hoffecker described as “back office” types who performed clerical and administrative tasks.   Supp. app. at 22.   Thus, contrary to the brochures' representations, Hoffecker's staff did not have “extensive international business expertise,” “worldwide contacts,” or “a network of professional men and women who have the uncompromising commitment, integrity and motivation to achieve success.”   App. vol. 21 at 73-74.

Global similarly represented that it had a “Trading Department,” “Compliance Department,” and “Compliance Director.”   App. vol. 24 at 109, 111, 122.   In reality, Global did not have a Trading Department and its so-called Compliance Department consisted of one person, the Compliance Director, Francine Leone, who was a secretary who performed clerical and administrative tasks.   Leone testified that she had no training or expertise in compliance-related matters, and did not interact with any in-house or outside legal counsel.   Her alleged compliance-related duties were nothing of the kind as they consisted of reading a short script to prospective investors.   If Leone was unavailable to read the script, other Amitex telemarketers would read it for her.   Leone spoke to virtually every Global customer on the telephone throughout 1996.   Her script advised the customer:  “I will go ahead and execute your trade․” Supp. app. at 42.   But in reality neither Global nor anyone else made the claimed trades or purchases.   As Leone testified at trial, Global's Compliance Department was nothing more than an “illusion.”   App. vol. 24 at 124.

Global also sent the customers a brochure representing that Global's “account executives” had the requisite “expertise and resources to guide and assist you in your journey through the financial arena.”  Id. at 91-92.   In reality, however, Global hired telemarketers without requiring any professional credentials or expertise other than that they had to be “good talkers.”  Id. at 101.   Global's on-site manager, Jayson Kline, had followed Hoffecker from his previous business ventures.   Kline and other Global telemarketers previously had lost their licenses to sell commodities futures and options (though no license was required to sell “physical” commodities).

Hoffecker's scheme further involved duping customers with written statements “confirming” trades and monthly account statements.   Thus, after each supposed purchase of a physical commodity, Global sent the customer a written “Confirmation Statement,” confirming that the customer “bought” a specified quantity of a specific physical commodity at a specific price.   App. vol. 14 at 67.   The written confirmation contained a “Trade Date” and a “Loan Amount” and reflected the customer's 20% down payment.   App. vol. 26 at 21-22.   Amitex subsequently sent the customers monthly account statements confirming the alleged loans, the purchase of products, and the monthly interest charged.

Hoffecker fraudulently represented to customers that Amitex and Global were “separate,” “independent,” and “not-related” to each other.   In furtherance of this false representation Hoffecker created a Global brochure representing that Global and Amitex were “independent” of each other.   App. vol. 14 at 81.   An Amitex promotional brochure referred to itself as the “independent lender” and to Global as the “independent broker dealer.”  Id. Global's written Risk Disclosure Statement represented that Amitex and Global were “separate” and “nonrelated,” that the investor was “independent of your broker, Global Investment Corp., entering into a collateral loan transaction with a separate non-related financial institution [Amitex].”  Id. at 50-53, 82.   Amitex's Terms and Conditions booklet, which Hoffecker approved, made approximately a dozen representations that Global was “independent” and “not agents, employees, or affiliates of Amitex Investment Services, Ltd.” Id. at 80.   Amitex and Global were, of course, not “separate,” “independent,” or “nonrelated.”   Rather, Hoffecker co-owned and controlled Amitex while simultaneously co-owning and controlling Global, although he attempted to conceal his ownership of both companies.

Hoffecker attempted to achieve plausible deniability by placing a fraction of the customers' funds in a supposed hedge fund account called “Phoenix,” located in the Turks and Caicos Islands, so that when customers eventually realized they were losing all, or almost all, of their money, he could point a finger at the separate hedge fund for the loss.   Hoffecker at no time after Amitex and Global ceased operations attempted to use the money he had sent to Phoenix to compensate any customers for their losses.   Moreover, neither Hoffecker nor anyone else ever apprised any customer of the so-called hedging.

Hoffecker and his entities routinely “reloaded” customers, meaning that they subjected them to multiple solicitations for additional investments after the initial solicitation on the logical theory that a customer swindled in the first place was a likely mark for a repeat performance.   As examples of reloading, all of the four victims who testified at trial made a series of purchases.   There were taped conversations in evidence at trial revealing Hoffecker discussing the “loading” of customers, which further depleted their “equity.”   In recorded conversations, Hoffecker's co-conspirator, Myers, referred to the Amitex-Global victims as “bullion heads-I call them bullion heads-I don't know what the fuck else you'd call 'em․ They just like to buy this shit.”   Supp. app. at 21.

Global employees testified that, to their knowledge, none of the Global customers made a profit.   As former Global employee Gregory Swarn testified, consistently with the testimony of the four victims, no Global client ever made a profit, most lost everything, and some were returned remittances of a small fraction of their investment in order to lull them into believing that their losses were attributable to the marketplace and not to fraud.   Moreover, Myers admitted in recorded conversations, “I'll make the, the price up, so at least he's [the victim] got enough to take his wife out to dinner․ I mean that's just the cost of doing business.”  Id. at 13.   Myers explained that he preferred to remit a small fraction to the customer as soon as possible, preferably within 24 hours:

The reason for it is we want them to die as quick a death as if they're dying get them out of the way.   We do not want them calling you up saying how come that son of bitch doesn't send me my money․ You're a thief and a crook cause you don't send me my money.   We don't want that [to] occur.   We want to get that money to him immediately so he can take his wife out to dinner and it's all over with.

Id. at 29.

Global, reflecting Hoffecker's indifference to the interests of its victims, cynically targeted senior citizens and other persons unsophisticated in investments.   Clearly, of course, Global had to target such vulnerable persons to be its victims as any reasonably sophisticated investor who checked up on Amitex and Global with financial services reporting agencies quickly would have discovered that the scheme was a fraud.   As an example of the type of victim the scheme targeted, a boiler room employee solicited Geraldine Conover, an 82-year-old mid-western great-great grandmother in mid- to late-1995.   Ms. Conover ultimately invested approximately $125,000 in the scheme and lost it all.   After a telemarketer solicited her more than 20 times in one day, Ms. Conover contacted law enforcement authorities who requested that she record her telephone conversations with both the boiler-room solicitors and Amitex.   In a recorded conversation on April 25, 1996, Ms. Conover expressed to the telemarketer her concern about Amitex because she was “naive” and had invested a lot of money, and the paperwork “didn't really say who owned [Amitex].”   Id. at 115.   The telemarketer repeatedly assured her that Amitex had been in business for “many, many years,” id. at 114, and that Ms. Conover could confirm this with Amitex's written information packet that described “their history,” id. at 116.   Ms. Conover also recorded a conversation she had with Myers in which Myers made a series of incriminating admissions regarding the promised purchase of physical commodities, the purported loans and interest charged for them, and the supposed storage of the commodities.

Harriet Davis, another victim, was a 75-year-old widow on a fixed income who invested with Global and Amitex.   She told a Global telemarketer that she was comfortable investing $5,000.   Over a span of a few months, however, and after calling her every day or every other day, Global and Amitex swindled her out of approximately $43,000.   She eventually received a remittance of $4,039.   Stephen Miller invested $77,152 and received a remittance of $7,488.   Marie Walsh invested approximately $70,000 and lost the entire amount.

Between 1996 and 1997, Amitex/Global defrauded more than 600 victims of at least $14,151,596 by pocketing their investments and interest payments and charging a 15% sales commission, $100 new account fee, $100 annual fee, and a “spread fee” of approximately 3% of the total value of the investment (the 20% down payment plus the 80% financing).   Because Amitex/Global did not purchase or store anything, and there were no actual loans, all of these fees and commissions were merely additional means to bilk the victims.   Even as experienced federal judges who naturally are not easily surprised by the evil that people will do, we are stunned by the scope of the fraud here.

Hoffecker siphoned off much of the scam's proceeds.   Indeed, early on in the scheme, Hoffecker told Jack Field, the Government's confidential informant who, as we will explain, is a central figure in this case, that Hoffecker was “on target” to receive “at least” $40,000 to $60,000 per month from the hoax.   Supp. app. at 27b.   Throughout the life of the ruse, Global employees regularly handed Hoffecker thousands of dollars in cash, sometimes as often as three times a week.   To conceal his money, Hoffecker kept one million dollars in cash in the name of an alias in a Fort Lauderdale bank vault.   In addition, Hoffecker transferred more than two million dollars from Amitex's bank account in the Bahamas to his personal off-shore bank account.   Hoffecker siphoned off this money, taking hundreds of thousands of dollars in cash outright, and funneled the remainder to other off-shore accounts for other businesses he operated.

Hoffecker's telemarketers solicited customers from 1996 through 1997 until, with no advance notice, in an unsigned letter dated December 24, 1997, Global advised its customers that it was going out of business effective December 31, 1997, and that Amitex would handle its accounts.   Customers were informed that they could register any complaints regarding Global's closure to Amitex's non-existent “Compliance Department.”   App. vol. 14 at 160.

Amitex abruptly closed down a few months later, effective March 31, 1998, and, like Global, did so without advance notice.   A Bahamian company called “International Bullion Services” (“IBS”) advised Amitex customers in an unsigned letter which did not reference Amitex that it purchased their assets and loans.   In fact, Hoffecker paid IBS $400,000 to take Amitex off his hands. Overall, after our intense study of this case and taking into account our extensive experience in dealing with thieves, swindlers, confidence men, charlatans, and the like, we conclude that Hoffecker ranks high in the pantheon of thieves.   He is utterly devoid of principles.

On February 14, 2003, a grand jury indicted Hoffecker and Myers on charges of mail fraud and conspiracy to commit mail and wire fraud.   Their first trial commenced on June 3, 2004, and concluded with a hung jury on August 13, 2004.   Their retrial began on January 3, 2006, and resulted in the jury returning guilty verdicts on March 17, 2006, convicting Hoffecker and Myers of one count of conspiracy to commit mail or wire fraud and three counts of mail fraud.   Following the jury verdict, Hoffecker unsuccessfully moved for a judgment of acquittal or a new trial.  The District Court ultimately sentenced Hoffecker to 210 months of imprisonment to be followed by a three-year term of supervised release and sentenced Myers to 108 months of imprisonment to be followed by a term of supervised release. Hoffecker but not Myers appeals.

The district court had jurisdiction under 18 U.S.C. § 3231 and we have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291.

III. DISCUSSION

As we set forth above, Hoffecker has raised a variety of challenges to his conviction and sentence.  We shall consider each argument in turn.  Significantly, however, Hoffecker does not contend that the evidence did not justify the verdict.

1. Use of Hoffecker's Former Lawyer as a Government Witness

Hoffecker argues that the Government's conduct in using Jack Field, his one-time attorney, as an informant was so outrageous that it violated the Due Process Clause of the Fifth Amendment to the Constitution and that the District Court erred when it rejected his requested jury instruction on the defense of reliance on advice of counsel.

Field was Hoffecker's long-time friend and former business associate.  Indeed, in July 1990, Field was his substitute counsel of record in a Federal Trade Commission (“FTC”) action, FTC v. Uni-Vest Financial Services & Charles P. Hoffecker, et al., No. 89-6382 (S.D.Fla.), which was filed in 1989 and was settled on July 15, 1991.   But Field was only one of Hoffecker's attorneys as he was sued in over 100 other actions brought by the National Futures Association (“NFA”) and the Commodity Futures Trading Commission (“CFTC”), and he hired attorneys other than Field to represent him in those cases.

In June 1996, Field reestablished contact with Hoffecker so that he could serve as a confidential informant for the Government. This initiation of contact from the outside of the current relationship between the confidential informant, Field, and the defendant, Hoffecker, gave the Government and the informant the opportunity to ensure that the informant kept his legal activities out of his dealings with Hoffecker, and Field and the Government took full advantage of this opportunity.   Moreover, before this reunion, Field and Hoffecker essentially had been out of contact for approximately three years, a lapse of time that assisted Field in renewing their relationship on a basis other than that of an attorney and client.  During their first renewed encounter, the two discussed a potential business arrangement involving the Amitex scheme:

Hoffecker:  Jack, I would like to do some business with you.

Field:  I'd like to do that, too.

Supp. app. at 2. Later that same day, Field rejected any suggestion that he would be serving as an attorney to Hoffecker, Myers, Global, or Amitex:

Field:  I'm sure I don't want to be a lawyer on this.

Hoffecker:  Okay. Okay.

Field:  I can find you. I know a good law firm over there.

Hoffecker:  ․ You don't have to be a lawyer on this, you could be a contributor, partner, a uh you know.

Field:  Consultant.

Hoffecker:  Yeah.

Field:  Business consultant.

Hoffecker:  Oh, yeah.

Field:  Business advisor.

Id. at 5. Excerpts from subsequent taped conversations demonstrate that Hoffecker and Field both understood that Field was not serving as a lawyer for Hoffecker or his entities.  In fact, on each occasion that Field made this clear, Hoffecker responded by indicating that he understood.  See, e.g., id. at 26 (Field:  “I just want to try and put a deal together so I don't practice law anymore.”   Hoffecker:  “Right, I understand.”);  id. at 27d (Hoffecker:  “[Y]ou are a business man․ You're not a lawyer any more.”);   id. at 33b (Field:  “I don't want to get involved in giving legal advice.”   Hoffecker:  “I understand.”).   Hoffecker indicated that he was obtaining legal advice elsewhere.

Instead of doing legal work, Hoffecker wanted Field to be a recruiter, setting up telemarketing boiler-rooms in the United States to solicit potential customers and generate income for Amitex and Global, for which Field would be paid a commission:

Hoffecker:  ․ [Y]ou, at this stage of the game can get involved in us, it's two ways, one at the legal side, and the other ․

Field:  [Unintelligible.]

Hoffecker:  Getting involved in dealer networking with us.  That's where the money is.

Field:  Okay. Okay. I don't want to do any, any legal work.

Id. at 23-24.

Hoffecker:  My thought was that basically what I would do, is I would put together a retail sales organization and that I would get someone like Jack [Field] or get Jack to be involved from a, uh, you know a business side.   Where Jack could go out and hustle dealers, and sellers, basically.

Id. at 33.

Hoffecker arranged to compensate Field based on the interest charges generated from the purported loans Amitex extended to its customers, as well as the fees for the purported purchase and sale of physical commodities in the boiler-rooms Field set up.   In short, Hoffecker and Field understood that Field would derive his compensation exclusively from the business he generated, apparently on the theory that you eat what you kill. Thus, Field did not receive a legal retainer or have a fee arrangement with Hoffecker or Amitex, and Hoffecker never paid Field for any legal services in the Amitex-Global scheme.

During the course of the investigation, the Government, which was aware of the potential attorney-client relationship problem, instructed Field to state to Hoffecker clearly and repeatedly that he was not serving as legal counsel to Hoffecker or others. Hoffecker inadvertently accommodated the Government by repeatedly affirming his understanding that Field was serving as a business associate and not as legal counsel.   Government investigators ensured that Field's prior legal work would not become implicated in the case by not inquiring about any previous privileged communications between Field and Hoffecker and by instructing Field not to divulge any potentially protected previous communications. To further ensure that such communications were not divulged, the Government employed a “taint team” to review all of the recorded conversations between Field and Hoffecker.

Before the first trial, Hoffecker moved to dismiss the indictment based on his claim that the Government had engaged in outrageous conduct.  In the alternative, Hoffecker moved to suppress evidence of his conversations with Field.  After several days of hearings, the District Court issued oral and written findings that there had not been an attorney-client relationship between Field and Hoffecker and denied Hoffecker's motions.

We review the District Court's rulings on the outrageous conduct claim recognizing that “[b]ecause outrageous government conduct, a constitutional claim, is a mixed question of law and fact, ‘[w]e exercise plenary review over the district court's legal conclusions, and review any challenges to the court's factual findings for clear error.’ ” United States v. Lakhani, 480 F.3d 171, 181 (3d Cir.2007) (second alteration in original) (quoting United States v. Nolan-Cooper, 155 F.3d 221, 229 (3d Cir.1998)).   We also are aware that we repeatedly have noted that we are “extremely hesitant to find law enforcement conduct so offensive that it violates the Due Process Clause.”  United States v. Voigt, 89 F.3d 1050, 1065 (3d Cir.1996).   The Government's conduct can be regarded as so offensive that it requires the dismissal of an indictment only if it is “most intolerable.”  United States v. Jannotti, 673 F.2d 578, 608 (3d Cir.1982).   Thus, a court should not dismiss an indictment “ ‘each time the government acts deceptively or participates in a crime that it is investigating.’ ” Nolan-Cooper, 155 F.3d at 231 (quoting United States v. Mosley, 965 F.2d 906, 910 (10th Cir.1992)).

To elevate a violation of the attorney-client privilege to a constitutional claim of outrageous misconduct, a defendant must demonstrate “(1) the government's objective awareness of an ongoing, personal attorney-client relationship between its informant and the defendant;  (2) deliberate intrusion into that relationship;  and (3) actual and substantial prejudice.”   Voigt, 89 F.3d at 1067 (footnote omitted).

The District Court found that the Government did not engage in outrageous conduct because there was not an attorney-client relationship between Field and Hoffecker at the time of the investigation when Field was pursuing his confidential activities.   Accordingly, the relationship between Hoffecker and any person or entity involved in this case and Field could not satisfy the first Voigt requirement for a finding of outrageous misconduct.   Indeed, the court stated that “there barely was a former relationship in the traditional and understood sense of attorney-client․” App. vol. 8 at 35.   The court found that “the government was well aware of a potential attorney-client relationship problem, took steps to avoid it, or screen for it.”  Id. at 37-38.   Accordingly, the court found that “notwithstanding a prior attorney-client relationship, Field could nonetheless be a government informant without running afoul of attorney-client law.”  Id. at 34.  The court found that the recorded conversations among Hoffecker, Field, and others occurred in the context of “build[ing] Field into the existing business entity,” id. at 12, and establishing Field as a business associate who would help Amitex establish sales rooms, from which Field would earn a commission.   The court further found that Hoffecker could not have had any objectively reasonable understanding that Field was functioning as his attorney.   The court found that, instead, Hoffecker's “objectively reasonable understanding” was that Field was his “business partner,” who would be compensated as a “business co-venturer, and that Field would not be taking the legal end, but rather the networking room related end․” Id. at 34.   The court noted that “[i]t would be clearly unreasonable for Hoffecker to believe, based upon what was said, that Field was his lawyer.   Hoffecker made it clear he had lawyers.”  Id. at 34.   Accordingly, the court found that Hoffecker had not shown that the Government's conduct was outrageous.

Notwithstanding the voluminous evidence showing that Field repeatedly told Hoffecker that he did not want to act as his lawyer, Hoffecker contends that there was an attorney-client relationship between him and Field during the Government's investigation and points to a number of snippets of conversation between the two men that he contends support his claim.   For example, Hoffecker claims that “Field acknowledged Field's role as a ‘legal counsel or legal consultant․’ ” Appellant's Br. at 21.  In context, however, Field actually was making clear that he was not serving as Hoffecker's legal counsel:

Hoffecker:  So, basically, if we, if you could get us some rooms and we could use, you know, have you as a, as a, a legal counsel or, or legal consultant, let's say․

Field:  As a business consultant. I don't want to, I don't want to do law practice.  I don't want to do legal shit.

Hoffecker:  A business consultant from a, from a legal standpoint.

Field:  I can business consult on what I think is the way to set it up and ways to set it up.  That's just from strictly business side.  Once it's set up, you probably need somebody to look at it and give you an opinion letter.

Hoffecker:  Right.

Hoffecker:  ․ [W]ell you can call it business consulting, you can call it legal consulting, I don't care what you call it, you know I mean we know that you have a legal mind that's, that's one of the better ones so we understand that that's, that, that any kind of business consulting see would be from a legal twist, I'm sure.

Field:  It would be from my background experience but it wouldn't be real legal advice, I just, I just don't want to get in that box, frankly.   I don't like doing that, I've done it too damn long, and I don't want to be limited in making money to what lawyers' fees are.

Hoffecker:  I see.

Supp.App. at 17-18.   The other pieces of conversation that Hoffecker cites as support for his claim of outrageous Government conduct similarly do not support his claim and, when viewed in context, instead refute it and we see no reason to recount them here.

Hoffecker also claims that the declaration of Christopher Holly “confirms” Field's status as a lawyer for Hoffecker.   In fact, Holly merely stated that he was present on five or six occasions between June 1993 and May 1995 when Field and Hoffecker purportedly had phone conferences involving a CFTC case against Hoffecker.   Holly's declaration does not mention specific subjects discussed, but generally states that Field offered legal advice to Hoffecker in these 1993-1995 conversations.   The District Court found that Holly, like other persons surrounding Hoffecker, used Field as a “strategist,” but that use did not create an attorney-client relationship between Field and Hoffecker during the 1993-1995 period, let alone when Field cooperated with the Government in 1996-1998.   The District Court's finding surely is unassailable under any standard of review.

Hoffecker next claims that the testimony of John Leubsdorf, who was qualified as a professional responsibility expert, demonstrates that Field's and Hoffecker's interactions “impacted” on an existing legal representation.   Appellant's Br. at 24.   In analyzing Leubsdorf' s testimony, however, the District Court noted that even Leubsdorf would agree that the professional responsibility rules do not apply in the absence of an attorney-client relationship.   Because a past attorney-client relationship does not establish that an attorney-client relationship continues until a later time, United States v. Evans, 113 F.3d 1457, 1463 (7th Cir.1997), Hoffecker's claim only can succeed if he shows that he and Field had an attorney-client relationship between 1996 and 1998.

Even if we exercised plenary review of all aspects of Hoffecker's outrageous conduct claim, we would conclude that the District Court correctly determined that Hoffecker and Field had a business relationship, not an attorney-client relationship, during the Government's investigation when Field was acting as its informant.   Indeed, we cannot help but wonder why Field's extraordinary efforts to keep an attorney-client relationship out of his dealings with Hoffecker did not cause such an experienced confidence man to be suspicious of Field but apparently they did not.

Surely there is a delicious irony in the circumstance that Field and the Government conned the con man.  Overall, to call the evidence supporting Hoffecker's claim “thin” would be generous as “microscopic” would be the more appropriate word.   There was no evidence showing that Field acted as Hoffecker's attorney;  in fact, at every opportunity Field reminded Hoffecker that he was not his attorney and did not want to be his attorney.   Their relationship during the Amitex investigation was not that of an attorney and a client, and did not come close to being one.   Hoffecker has not shown that Field acted as a legal advisor to him, Amitex, or Global, or that it was reasonable for Hoffecker to believe that Field was acting as his attorney.   Accordingly, we conclude that that the Government's investigation did not interfere with an attorney-client relationship between Hoffecker and Field as there was no relationship with which to interfere and therefore the District Court properly denied Hoffecker's motion to dismiss the indictment or suppress evidence.

We next consider whether the District Court erred in refusing to give a jury instruction on the defense of reliance on advice of counsel that Hoffecker requested.   We consider this point on an abuse of discretion basis.   See United States v. Leahy, 445 F.3d 634, 642 (3d Cir.2006).   Certainly a district court is “bound to give the substance of a requested instruction relating to any defense theory for which there was any foundation in the evidence.”  United States v. Blair, 456 F.2d 514, 520 (3d Cir.1972).   But a court also ha[s] to avoid diverting the jury by idle speculation and frivolous considerations.   A confused jury can give as improper a verdict as one which has failed to receive some significant instruction.   Therefore, the charge should direct and focus the jury's attention on the evidence given at trial, not on far fetched and irrelated ideas that do not sustain a defense to the charges involved.

Id. (citation omitted).

There was no evidence that Hoffecker and Field had an attorney-client relationship between 1996 and 1998, or that Field gave him legal advice, on which Hoffecker relied.   As the District Court found, Hoffecker's argument that Field “performed a legal function” was “specious.”   App. vol. 53 at 84.   Inasmuch as there was no evidentiary support for the instruction, the court correctly did not give the instruction which would have been unjustified and confusing to the jury.   Accordingly, the District Court did not abuse its discretion when it rejected Hoffecker's requested advice of counsel instruction.   Indeed, it would have been legal error for the court to have given the charge and thus, even on a plenary review basis, we would reach the same result that we reach on this point.

2. Statute of Limitations Issues

Hoffecker next raises statute of limitations issues, primarily with respect to the mail fraud charges in Counts Two and Three of the indictment and the conspiracy to commit mail and wire fraud charge in Count One, though he does contend that the statute of limitations should have barred this entire case.   These issues, as will be seen, potentially raise the most far-reaching precedentially significant legal matters on this appeal, but in the end the application of conventional principles controls them.

The statute of limitations requires that indictments for mail fraud and for conspiracy to commit mail and wire fraud must be “found” within five years of the commission of the offenses.   See 18 U.S.C. § 3282(a).  “An indictment is found when it is returned by a grand jury and filed.”  United States v. Oliva, 46 F.3d 320, 324 (3d Cir.1995).   The statute begins to run for mail fraud when a defendant “places, deposits, causes to be deposited, takes, or receives mail, or knowingly causes mail to be delivered, as part of the execution of a scheme to defraud,” United States v. Pharis, 298 F.3d 228, 234 n. 3 (3d Cir.2002) (citation and quotation marks omitted), and for conspiracy when the conspirators commit the last overt act in furtherance of the conspiracy, United States v. Jake, 281 F.3d 123, 129 n. 6 (3d Cir.2002).

There is, however, a critical variation in the calculation of the limitations period when the Government requests assistance from a foreign country to gather evidence of offenses for in such situations it can apply to a district court to enter an order suspending the running of the statute of limitations pursuant to 18 U.S.C. § 3292 which provides:

(a)(1) Upon application of the United States, filed before return of an indictment, indicating that evidence of an offense is in a foreign country, the district court before which a grand jury is impaneled to investigate the offense shall suspend the running of the statute of limitations for the offense if the court finds by a preponderance of the evidence that an official request has been made for such evidence and that it reasonably appears, or reasonably appeared at the time the request was made, that such evidence is, or was, in such foreign country.  (2) The court shall rule upon such application not later than thirty days after the filing of the application.

(b) Except as provided in subsection (c) of this section, a period of suspension under this section shall begin on the date on which the official request is made and end on the date on which the foreign court or authority takes final action on the request.

(c) The total of all periods of suspension under this section with respect to an offense-(1) shall not exceed three years;  and (2) shall not extend a period within which a criminal case must be initiated for more than six months if all foreign authorities take final action before such period would expire without regard to this section.

(d) As used in this section, the term ‘official request’ means a letter rogatory, a request under a treaty or convention, or any other request for evidence made by a court of the United States or an authority of the United States having criminal law enforcement responsibility, to a court or other authority of a foreign country.

Congress enacted section 3292 in response to “[t]he use of offshore banks to launder the proceeds of criminal activities and to evade taxes,” which “ha [d] become an increasing problem for federal prosecutors.”  H.R.Rep. No. 98-907, at 2 (1984), reprinted in 1984 U.S.C.C.A.N. 3578, 3578.   Congress explained that:

Once funds are traced to offshore banks, federal prosecutors face serious difficulties in obtaining records from those banks in both the investigative and trial stages of a prosecution․ The procedures that must be undertaken in other countries in order to obtain the records generally take a considerable period of time to complete․ If the records are essential to the bringing of charges, the delay in getting the records might prevent filing an information or returning an indictment within the time period specified by the relevant statute of limitation.

Id. at 2-3, reprinted in 1984 U.S.C.C.A.N. 3578, 3578-79.

The indictment charged Hoffecker with three counts of mail fraud and one count of conspiracy to commit mail and wire fraud.   The mail fraud charged in Count Two was based on a mailing sent on June 23, 1997, the mail fraud charged in Count Three was based on a mailing sent on August 31, 1997, and the mail fraud charged in Count Four was based on a mailing sent on March 4, 1998.   The last overt act in furtherance of the conspiracy charged in Count One was the March 4, 1998 mailing.   Thus, absent a suspension of the statute of limitations, the Government was required to obtain indictments against Hoffecker no later than June 23, 2002, on Count Two, August 31, 2002, on Count Three, and March 4, 2003, on Counts One and Four.

On March 13, 2002, before the statute of limitations had expired on any of these offenses, the Government sought assistance from the government of the Bahamas to obtain Amitex's banking records invoking a Mutual Legal Assistance Treaty.   Nearly eight months later, on November 5, 2002, the Bahamas sent the Government a portion of the requested documents.

On December 23, 2002, after the statute of limitations absent suspension would have expired on Counts Two and Three but before it would have expired on Counts One and Four, the Government applied ex parte to the grand jury supervising judge to suspend the statute of limitations pursuant to section 3292 for the 238-day period between March 13, 2002 and November 5, 2002.   The court granted the application and ordered a 238-day suspension.   The grand jury then indicted Hoffecker on Counts One through Four on February 14, 2003.   Clearly if the 238-day period is excluded the entire indictment on its face was timely.

Hoffecker nevertheless contends that the conspiracy charge in Count One was untimely because the March 4, 1998 mailing was not in furtherance of the conspiracy and thus the last overt act of the conspiracy occurred more than five years before the indictment was found.   Accordingly, he argues that we should dismiss Count One because the District Court did not instruct the jury on the limitations defense.   Of course, this argument applies to Count Four as well.

Hoffecker also argues that we should dismiss the mail fraud charges in Counts Two and Three on the basis of the Government's application to suspend the running of the statute of limitations having been improper (1) because the proceeding before the grand jury judge was ex parte;  (2) the Government filed the application after it had received all of the evidence from the Bahamas;  and (3) the Government filed the application after the statute of limitations already had expired on the mail frauds charged in Counts Two and Three.

Before we can consider these claims on their merits, however, we must address the procedural question of whether Hoffecker has waived any of the issues he now advances for purposes of this appeal.   There are two ways by which Hoffecker could have waived his claims:  failing to raise an issue in the District Court before or at trial, see United States v. Karlin, 785 F.2d 90, 92-93 (3d Cir.1986), or failing to identify or argue an issue in his opening brief on appeal, see United States v. Pelullo, 399 F.3d 197, 222 (3d Cir.2005).

To consider the waiver issue, we have delved intensely into the procedural history of the case by studying its massive record.   Before Hoffecker's first trial, he moved to dismiss the indictment as untimely.   See Supp. app. vol. 61 at 1-15.   In that motion, he argued that the conspiracy charged in Count One was untimely because the indictment was found more than five years after the final overt act of the conspiracy.   Hoffecker also argued that the Government's ex parte section 3292 suspension application was improper and the District Court should have required the Government to reveal to him the documents relevant to its application.   Finally, Hoffecker stated:

The court suspended the statute of limitations from March 13, 2002 to November 5, 2002, a period of some seven months. The order did so after the stated period had already elapsed, in contravention with the statutory language that permits suspending ‘the running of the statute of limitations․' Once the specific period has already run, an extension order that attempts to reach back into time is inconsistent with the statutory authorization.

Id. at 12-13.  Clearly Hoffecker intends this paragraph to correspond with his argument that the Government's section 3292 suspension application was improper because the Government filed it after the statute of limitations had expired on Counts Two and Three. Significantly, however, in his motion Hoffecker did not contend that the Government did not move properly to suspend the statute of limitations pursuant to section 3292 because it filed the suspension application after receiving all of the evidence from the Bahamas.   After oral argument, the District Court denied the motion.   App. vol. 2 at 1-26.  The case then proceeded to trial and, as we stated above, ended in a mistrial.

After the mistrial but before the retrial, we filed our opinion in United States v. Atiyeh in which we held that a district court may not suspend a statute of limitations pursuant to section 3292 when the Government applies for suspension after it already had received all requested foreign evidence.   402 F.3d 354, 362-67 (3d Cir.2005).   Hoffecker, however, did not renew his motion to dismiss the indictment on statute of limitations grounds after the mistrial and he did not bring Atiyeh to the District Court's attention.   Hoffecker, however, did request a jury instruction on the statute of limitations defense at the second trial.   The District Court rejected this request.

We find that because Hoffecker did not at any time in the District Court contend that the Government's suspension application was improper because the Government filed the application after it had received all of the evidence from the Bahamas, he has waived the issue.   See Karlin, 785 F.2d at 92-93.   In this regard we point out that in Brenner v. Local 514, United Bhd. of Carpenters and Joiners of Am. we indicated that “[i]t is well established that failure to raise an issue in the district court constitutes a waiver of the argument.”  927 F.2d 1283, 1298 (3d Cir.1991);  Jake, 281 F.3d at 129 (“the statute of limitations is an affirmative defense that is waived unless properly preserved”).

In any event, even if we held that Hoffecker had not waived this issue, we would not dismiss Counts Two and Three on Hoffecker's theory that the Government filed its suspension application after it received all the requested evidence from the Bahamas.   In Atiyeh we determined that under section 3292 the Government must indicate in its application that the evidence is in a foreign country at the time of the application, and thus the Government must file its application with the grand jury judge before the Government “has received all requested foreign evidence from foreign authorities․” 402 F.3d at 362.   In that case, the Government's section 3292 application represented that it had received “all” of the requested foreign evidence at least two months before it applied to the grand jury judge to suspend the statute of limitations, and the application “did not precisely state that evidence of offenses ‘is in a foreign country.’ ”Id. at 362-63.   Because in Atiyeh the Government in its application failed to make the required assertion and filed its application after it had received all of the requested documents, we dismissed as time-barred several counts on which the statute of limitations had run.

In this case, by contrast, the Government filed its suspension application after receiving some, but not all, of the requested foreign evidence from the Bahamas.   As the testimony of both Government and defense expert witnesses confirmed, the Bahamian bank documents sent to the Government were substantially incomplete.   Moreover, the Government never represented in its suspension application that it had received “all” of the evidence or that evidence was no longer in the Bahamas.   According to the Government, the application stated that “[t]he undersigned [AUSA] believes that evidence of the indictable offenses presently being investigated is located in a foreign jurisdiction.”   Appellee's Br. at 53 (alterations in original).   Thus, the Government's application here is unlike the application that fell short in Atiyeh.   Because the Government applied to suspend the statute of limitations before it received all of the evidence from the Bahamas and stated in its application that it believed that evidence of the offenses “is” located in the Bahamas, we would not dismiss Counts Two and Three on the basis of Atiyeh even if Hoffecker had preserved the issue for appeal.   Finally on this point we mention the obvious:  it does not matter whether the Government receives any additional materials after it makes its request to the foreign country.   The question is whether at the time of its application to suspend the running of the statute of limitations the Government had received all the requested documents that were in the foreign country.³

Next we will consider whether Hoffecker has waived his contention that the Government's section 3292 suspension application was improper because the Government filed it after the statute of limitations already had expired for Counts Two and Three.   Although Hoffecker may have raised this issue before the District Court in his motion to dismiss the indictment, he did not raise the issue in his opening brief before this Court.   Instead, after briefing by both parties had been concluded, he filed a letter in which he appeared to raise the issue.   See Appellant's Letter (filed Nov. 9, 2007).   Hoffecker attempted to file this letter pursuant to Federal Rule of Appellate Procedure 28(j), which provides in pertinent part that:

[i]f pertinent and significant authorities come to a party's attention after the party's brief has been filed-or after oral argument but before decision a party may promptly advise the circuit clerk by letter, with a copy to all other parties, setting forth the citations.   The letter must state the reasons for the supplemental citations, referring either to the page of the brief or to a point argued orally.

In his letter, Hoffecker wrote that he wanted to bring to our attention the decision in United States v. Kozeny, 493 F.Supp.2d 693 (S.D.N.Y.2007), in which the district court dismissed several counts of an indictment because the Government filed its section 3292 suspension application after the statute of limitations already had expired on those counts.   In citing Kozeny it appears that Hoffecker suggested-although he does not explicitly state as much in his letter-that in this case Counts Two and Three were time-barred because the Government filed the section 3292 suspension application after the statute of limitations period had expired on these counts.

In yet another filing submitted to this Court after the briefs were filed, Hoffecker claims that he did raise this issue in his opening brief on appeal.   Appellant's Mot. to Strike Government's Unauthorized and Inaccurate Post-Argument Letter Submission to Appellate Panel at 3-4 (filed March 18, 2008).   Hoffecker points to a footnote in his opening brief that states:  “The statute of limitations expired for Counts 2 (mailing dated June 23, 1997) and 3 (mailing sent August 31, 1997).”   Appellant's Br. at 31 n. 9. This statement is the only one in the opening brief that Hoffecker contends raised this issue.

This one-sentence footnote falls far short of meeting the requirement that an appellant raise an issue in his opening brief or else waive the issue on appeal.   See Pelullo, 399 F.3d at 222 (“It is well settled that an appellant's failure to identify or argue an issue in his opening brief constitutes waiver of that issue on appeal.”).   An appellant's brief must contain his or her argument, which must incorporate “appellant's contentions and the reasons for them, with citations to the authorities and parts of the record on which the appellant relies․” Fed. R.App. P. 28(a)(9)(A).   See United States v. DeMichael, 461 F.3d 414, 417 (3d Cir.2006) (“An issue is waived unless a party raises it in its opening brief, and for those purposes a passing reference to an issue will not suffice to bring that issue before this court.” (citation omitted));  United States v. Irizarry, 341 F.3d 273, 305 (3d Cir.2003) (“An appellant who falls to comply with this requirement fails to preserve the arguments that could otherwise have been raised.”);  United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.1991) (per curiam) (“A skeletal ‘argument’, really nothing more than an assertion, does not preserve a claim.   Especially not when the brief presents a passel of other arguments, as [defendant]'s did.   Judges are not like pigs, hunting for truffles buried in briefs.” (internal citation omitted)).   In his footnote, Hoffecker does not explain his contention or the reason for it, and does not include citations to authority or the parts of the record on which he relies.   Hoffecker makes no reference to section 3292 or the issue of whether the Government's suspension application was improper because it was filed after the statute of limitations already had expired on Counts Two and Three.   Indeed, the footnote is appended to text in which Hoffecker argues that the conspiracy charged in Count One was time-barred because the final overt act of the conspiracy occurred more than five years before the indictment was found, an argument independent from the issue that Hoffecker now seeks to raise.

For the same reasons, we cannot construe Hoffecker's opening brief's statement that “[t]he procedure used by the government to suspend the statute of limitations pursuant to 18 U.S.C. § 3292 to permit it to obtain evidence in a foreign country did not satisfy the statute[,]” Appellant's Br. at 27, as raising the issue of whether the Government's application was improper on the basis that the Government filed it after the statute of limitations already had expired for Counts Two and Three.   Although this sentence mentions section 3292, it does not construct any argument about the limitation period already having expired.

Inasmuch as Hoffecker did not raise in his opening brief the issue of whether the section 3292 suspension application was improper because the Government filed it after the statute of limitations had expired on Counts Two and Three, he has waived the issue.   Moreover, he cannot seek to raise the argument in a Rule 28(j) letter when he has not raised it in his opening brief. Inasmuch as Hoffecker waived the issue, we need not consider whether the Government's section 3292 suspension application was improper on the ground that the Government filed it after the statute of limitations had expired on Counts Two and Three.⁴

The Government contends that Hoffecker also has waived the issues of whether Count One's conspiracy charge was untimely on Hoffecker's theory that the indictment was found more than five years after the final overt act of the conspiracy and the ex parte nature of the Government's § 3292 tolling application was improper.

According to the Government, although Hoffecker raised these issues before the District Court in his motion filed before the first trial and also raised them in his opening brief on appeal, Hoffecker needed to renew his motion in the District Court after the mistrial before the second trial to preserve these claims for appeal. The Government relies for this argument on United States v. Akers, 702 F.2d 1145 (D.C.Cir.1983), where the Court of Appeals for the District of Columbia Circuit stated that a trial court's admission of evidence in a trial that ends in a mistrial does not justify a defendant's reliance that the judge would admit the evidence in the retrial.   In Akers the court stated:

No doctrine of the law of the case operates under these circumstances.   The evidentiary ruling at issue was rendered in a new trial which was ordered pursuant to a mistrial.   When, as here, ‘the previous trial [is] a nullity,’ the court in the new trial tries ‘the case as if it were being tried for the first time ․, as if there had been no prior trial.’

Id. at 1148 (footnotes omitted) (emphasis and alterations in original) (quoting Hobbs v. Maryland, 231 Md. 533, 191 A.2d 238, 239 (1963)).   The court concluded:

The mere fact that the same judge happened to be sitting did not entitle counsel to assume that the judge would rule the same way especially since the judge's exercise of his broad discretion on an evidentiary ruling (which ultimately pertains to relevancy) must turn upon the evidence as developed in the particular trial.

Id. (footnote omitted);  see also United States v. Gomez, 67 F.3d 1515, 1526 n. 13 (10th Cir.1995) (defendant's objection to admission of evidence made during first trial does not preserve issue for appeal after retrial).

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