Is 23 years an appropriate sentence for a business opporunity fraud case?

That's the question posed by Vanessa Blum in this Sun-Sentinel article:

"A once in a lifetime opportunity." "A part time business that earns a full time income." "Call now!" "Don't miss out!"The late night television ads for the Box Office Express DVD rental machine peddled a dream. But it didn't take long for customers of the Hollywood firm to realize they'd been sold an empty promise.In some cases the machines never came. Sometimes they arrived but didn't work properly. Those that functioned would never yield impressive profits.Today federal prosecutors are asking a Miami federal judge to sentence the founder of American Entertainment Distributors Inc. to 23 years in prison for conspiracy, fraud and violating a court order banning him from selling business opportunities. Russell MacArthur, 43, pleaded guilty to those charges in February.

Prosecutors contended the false statements and inflated profit forecasts MacArthur, used to sell the DVD vending machines at American Entertainment amounted to a massive fraud that cost 400 investors a total of nearly $20 million. His plan all along, according to prosecutors, was to make as much money as possible and then declare bankruptcy and fold.It's an area where federal authorities in South Florida have been cracking down. A string of recent cases targeting so-called "business opportunity fraud" have involved the sale of debit card dispensers, Internet kiosks, payphones and anti-aging devices.So far, 14 individuals affiliated with American Entertainment have been convicted, not including MacArthur's partner, Anthony "Rocco" Andreoni, who died in March just hours before he was set to plead guilty.The defendants had worked for at least 16 other business ventures in which most customers lost almost all their investment, prosecutors alleged.In a recent court filing, MacArthur's attorney, Frank Rubino, asserted that prosecutors have exaggerated financial losses tied to American Entertainment. Most customers received the DVD rental machines they paid for, if not the profits they expected, Rubino said.But prosecutor Patrick Jasperse of the Justice Department's consumer fraud section responded that the machines, which sold for $28,000 to $40,000, had no value because American Entertainment failed to provide locations for them and other services that were promised.

This afternoon, Judge Martinez sentenced MacArthur to 23 and 1/2 years.

UPDATED -- Here's the story of the sentencing by Blum. A couple of reasons for the lengthy sentence:

[Judge] Martinez said MacArthur deserved extra punishment for violating a court order banning him from selling business opportunities and for fleeing to Costa Rica after his indictment in 2005. He pleaded guilty in February.The judge called the DVD rental machine, which sold for $28,000 to $40,000, "a worthless piece of junk."

The defense lawyer responds:
Defense attorney Frank Rubino called the 23-year prison term "excessive" and a sentence more suitable for a drug lord or a terrorist."I'm not making light of this crime, but my god, 10, 12, 13 years is a long time," Rubino said.

The prosecutor:
But prosecutor Patrick Jasperse asked for harsh punishment, saying MacArthur was responsible for stealing the life savings and college funds of retirees and hardworking individuals."Russell MacArthur is a danger to the public," Jasperse said.

Ben Kuehne to receive award from FACDL-Miami this weekend

Saturday night the Florida Association of Criminal Defense lawyer will be having its annual banquet. Ben Kuehne will be receiving the Daniel S. Pearson-Harry W. Prebish Founder's Award, FACDL's highest honor. The Jose Padilla defense team will be receiving the Rodney Thaxton "Against All Odds" award, and Judge Steve Leifman will receive the Gerald Kogan Judicial Distinction Award.

Julie Kay writes about it here.

"The beagle is basically a stomach on four feet."

Why does Tom Watts-Fitzgerald have to disrespect the beagle like that?

Okay, okay -- he was just explaining how the beagles find illegal cavier at the airport (via the Daily Business Review):

Watts-FitzGerald said in some ways the illegal caviar trade is just as dangerous as the illicit drug market. Since Russia began protecting sturgeon and limiting caviar exports, caviar fishermen from surrounding republics struck back. "They blew up the barracks of what was essentially the equivalent of the old KGB. They were trying to make a point," he said. "The M.O. is very similar [to the drug trade]. Illicit wildlife smuggling is an $8 (billion) to $10 billion business." Caviar smugglers use mules to hide shipments just like drug traffickers. In the 1990s, 500 grams of Beluga caviar was discovered at Miami International Airport in a carry-on bag by the Food and Drug Administration's version of drug-sniffing dogs: the beagle brigade. "The beagle is basically a stomach on four feet," Watts-FitzGerald said. "When he smelled the caviar, he just went crazy." Caviar smugglers sometimes simply re-use old paperwork from legitimate shipments to try to import illegal goods. But distributors have been charged millions of dollars in fines.

Here is what the case is about:

With a worldwide shortage of premium caviar due to a shrinking sturgeon population, some black market importers have turned to an American cousin: a prehistoric-looking river creature, the paddlefish.

Paddlefish roe has qualities similar to Russian caviar — arguably the finest in the world. But the fish also is protected in many U.S. states due to overfishing and habitat loss. Federal prosecutors charged a Plantation man and his company, Bemka House of Caviar, with flouting the strict permitting laws protecting the paddlefish by buying it illegally.

And the indictment (assigned to Chief Judge Moreno) is here.

You Tube dude sentenced to 6 1/2 years

You remember this crazy guy -- the one who taunted the cops on You Tube. "We's out here, we fighting a cold war," Rudy Villanueva said on the video. "Metro Dade Gang Unit, here I am baby." Judge Cooke sentenced him to 6 1/2 years over his objection that he was just messing around. Honestly, I just like posting the picture of the guy.

Judge Gold at the Fed Bar luncheon

Judge Gold spoke today at the Federal Bar Luncheon about ethics and used Mark Giminez's "The Color of Law" as the basis for the discussion. It was a very entertaining speech and it was well received. Judge Gold's premise: You can do good and do well as a lawyer. Those ideas are not mutually exclusive. Here are a couple of pictures from the event.

Should Judge Hoeveler recuse in the rock-mining case?

Judge Hoeveler says he doesn't "consider [himself] biased" in the rock-mining case in which he was just reversed. (Read the 2-1 opinion here). Although the 11th Circuit did not remove "the respected" Judge Hoeveler from the case, it did say that he had "predetermined" to ban the practice at issue. And as John Pacenti points out in his Daily Business Review article, the Judge has had his issues with environmental cases before.
So should he recuse? Or do we give him the benefit of the doubt? The appellate court did not take Judge Hoeveler off the case, so unless he thinks he should recuse, he will continue to be the judge.

The Herald had on op-ed yesterday saying that Judge Hoeveler has the opportunity to strengthen his opinion:

In lifting an injunction banning three rock mining permits in Northwest Miami-Dade County and remanding the case back to U.S. District Judge William Hoeveler for reconsideration, an appellate panel left the door open for the judge to review and strengthen his decision. A three-judge panel of the U.S. 11th Circuit Court of Appeals found that Judge Hoeveler didn't show proper deference to the U.S. Army Corps of Engineers' decisions to issue more rock-mining permits in a case pitting rock miners against environmental groups.


Here's the rest of the op-ed, which gets a couple facts wrong (including that it was a 3-2 decision instead of a 2-1 decision) but it provides an interesting argument nonetheless:

In July, Judge Hoeveler issued an injunction against permits requested by three of nine mining companies. The Corps hadn't given enough consideration to the proximity of mining activities to Miami-Dade's drinking-water wellfield, the judge said. He wanted a new environmental study, which the Corps agreed to conduct. But the miners appealed, and in doing so launched personal attacks against the judge, perhaps hoping that he would be removed from the case.
The 11th Circuit panel wisely kept Judge Hoeveler on the case. After reading the ruling, our advice to both sides: Don't pop the Champagne corks just yet. The 3-2 appellate-court majority said Judge Hoeveler appeared to have made up his mind, regardless of the evidence, in finding that rock mining in Miami-Dade's Lake Belt ''is a bad thing.'' The judges also said that he misread the scope of the National Environmental Policy Act and how the Corps interpreted it in permitting more mining in the Lake Belt. NEPA, said the panel, allows the Corps to determine that, even though an activity like mining may damage or even destroy an environment, economic value can outweigh environmental concerns.
That said, the appellate judges took pains to make it clear that Judge Hoeveler had not erred in his ruling. In fact, the panel's third judge, Phyllis Kravitch, dissented, writing that Judge Hoeveler's ban on mining in the Lake Belt to protect the water supply was justified under the Clean Water Act.
Which will it be, NEPA or the Clean Water Act? In addition to its concerns for wellfield protection, the U.S. Fish and Wildlife Service had questions regarding the endangered wood stork during the permitting process. There were other issues about wetlands destruction, too. Ultimately, the Corps shortened the lifetime of the permits and required mitigation via wetlands acquisition by the miners.
Judge Hoeveler nevertheless found reason to want more information on what threat mining could pose for wellfield contamination. We don't find that unreasonable, nor for that matter, did the appellate panel. The appellate court said that Judge Hoeveler would have to find firmer ground upon which to uphold a ban on the three permits. That's fair to both sides.

Here's the original Herald article explaining the 11th Circuit's opinion in more detail.

New Building

STOP THE PRESSES! There have been court proceedings in the new building. Some of the judges have moved in, others are moving this week, and the most junior judges.... well.... it's still going to be a while. But progress is progress. Here's a picture of the inside.

So, who's going to have the first trial?

And a reminder: Judge Gold will be speaking this Wednesday at the Federal Bar Association luncheon at the Banker's Club at noon. RSVP to Lourdes_Fernandez@flsd.uscourts.gov

Uma

I'm always fascinated by reports on deliberations. In the recent high-profile trial of the Uma Thurman stalker, a Wall Street Journal reporter was on the jury. Here is her description of the trial and deliberations.

In local news, Jose Padilla co-defendant isn't happy with the jail he's been assigned to. From Curt Anderson's article:

A man convicted along with one-time "dirty bomb" suspect Jose Padilla of supporting al-Qaida wants a federal judge to block the government from sending him to a prison unit where his telephone calls, mail and visitors would be closely monitored.
A lawyer for Kifah Wael Jayyousi, 46, claims that the Communications Management Unit at the federal prison in Terre Haute, Indiana, amounts to "cruel and unusual punishment" and that his inclusion in that unit is discriminatory because it is based partly on his Muslim faith and Arab ethnicity.
Jayyousi is "due to be transferred at any time to this unlawful place of confinement, where he will suffer irreparable harm," attorney William Swor said in court documents filed this week.
Bureau of Prisons spokeswoman Traci Billingsley said Thursday that Jayyousi's religion or ethnicity have nothing to do with the designation at the unit that currently houses 46 inmates. Having all the inmates in one unit ensures that no communication is slipped out by a prisoner not subject to the restrictions.
"They are placed in the unit because their communications need to be closely monitored," Billingsley said.

U.S. District Judge Marcia Cooke, who presided over the trial last year of Padilla, Jayyousi and Adham Amin Hassoun, issued an order Tuesday temporarily preventing the U.S. Bureau of Prisons from transferring Jayyousi from Miami. Cooke scheduled a hearing May 22 on the matter.