Petition for Writ of Certiorari — Crase v. United States

Supreme Court, U.

FILED ye.

No. 5G°350 SEP 10 2010

OFFICE OF THE CLERK

In The

Supreme Court of the Anited States

KATHERINE CRASE,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Eleventh Circuit

PETITION FOR A WRIT OF CERTIORARI

¢

JOHN DVD. CLINE

Counsel of Record

LAW OFFICE OF JOHN D. CLINE

115 Sansome Street

Suite 1204

San Francisco, CA 94104

(415) 322-8319

cline@johndclinelaw.com

Counsel for Petitioner

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

Does the Fifth Amendment. Due Process

Clause limit the power of undercover federal agents

to create crimes for the purpose of prosecuting

otherwise innocent persons?

‘A If so, is it a deprivation of due process

for an undercover agent to target a person whom he

has no reason to believe has committed a crime,

devise a scheme in which to ensnare her, pressure

her to participate, and insist that she go through

with the scheme even when she tells him that she

has decided to withdraw?

PARTIES TO THE PROCEEDING

The parties to the proceeding in the United

States Court of Appeals for the Eleventh Circuit

were Petitioner Katherine Crase, Respondent United

States. and appellants Violette Gail Eldridge and

Paul D. Kuhn

11]

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ...... io

PARTIES TO THE PROCEEDING... 1]

TABLE OF AUTHORITIES ............ a

OPINIONS BELOW ...... RMS eerie

JURISDICTION .......

CONSTITUTIONAL PROVISIONS...

STATEMENT OF THE CASE

l. PROCEEDINGS BELOW .....

Il. STATEMENT OF THE FACTS.

A. The Beginning of the Sting

Investigation ...............

B. Firo Requests Payment 6

C. Colvin Receives the LOM re,

D. Ms. Crase Walks Away.

REASONS FOR GRANTING THE WRIT 16

THE CIRCUITS ARE DEEPLY SPLIT

OVE : WHETHER THE DUE PROCESS

CLAUSE LIMITS THE POWER OF

FEDERAL AGENTS TO CREATE

CRIMES FOR THE PURPOSE OF

PROSECUTING OTHERWISE

INNOCENT PERSONS.. 17

A. Russell and Hampton..... Ll’

B. The Circuit Split Since Hampton era -

HE COURT SHOULD GRANT TH]

WRIT TO END THE CIRCUIT SPLIUI

AND CLARIFY THE LIMITS ON

OVERNMENT CRIME CREATIO?S

V

TABLE OF AUTHORITIES

Page

CASES

Casey v. United States,

Fe ee 8 cic ch ers ees ctectyceiveincncenseneesens 27

Hampton v. United States,

425 U.S. 484 (1976).....ccccccccecesceseseessesessseeseeees3, 18

Jacobson v. United States,

Oe ere ds oko as cin di.cvnnei-ddavcuvl vvtercacvacteoves) 27

Rochin v. Caiifornia,

342 U.S. 165 (1952).....ccccccccccccesceseccescscescecesenses: 18

United States v. Astbor,

100 FSG 1028 (BGR Civ. 1987) onncivcsccccccdccecvessass 11

United States v. Boyd,

55 F.3d 239 (7th Cir. 1995) ....ccccceccecceceeceeeeeeees 20

United States v. Garcia,

S13 F268 1175 CARD UiP.. 2008) eis secsccdiscsecciccenss 21

United States v. Gaviria,

136 7.36 2498 (OC. Cor. 1967) .ccscccdssisicsiicenss, ye |

United States v. Hunt,

172 F.08 1382 tte Ut. 1008) wicicciccidicccccnw 21

United States v. Jackson,

S40 Fe BO (2a Civ, ZOO) onic cccccesscaseccdevecderincss 21

United States v. Jones,

18 F.3e 1145 (4th Cir. 1994) .......6.06.000505.0005052-. 21

United States v. Lakhani,

480 F.3d 171 (3d Cir. 2007) ......ccccccccceesesseseseees 21

United States v. Lard,

734 F.2d 1290 (8th Cir. 1984) ..................... 25, 26

United States v. Russell,

ORE eRe be PEt yy | ere 2, L¢, 19, 20> 20

l/nited States v. Sanchez,

138 F.3d 1410 (ilth Cir. 1998).. , 21

United States v. Santana,

6 F.3d 1 (1st Cir. 1993).... wwe 2

United States v. Tobias,

662 F.2d 381 (Sth Cir. 1981) BO, 24

United States v. Twigg,

588 F.2d 373 (3a Cir. 19°78)............ 22, 23, of

United States v. Warwick,

167 F.3d 965 (6th Cir. 1999) . | me

United States v. Williams,

547 F.3d 1187 (9th Cir. 2008) ......... > >}

CONSTITUTION AND STATUTES

LJ, 2e. CIOS, FREIOINE, VY vevcccssscsscecsenseese passim

28 U.S.C. § 1254(1).... een oe

PETITION FOR A WRIT OF CERTIORARI

Katherine Crase petitions for a wnt of

certiorari to review the judgment of the United

States Court of Appeals for the Eleventh Circuit in

this case.

OPINIONS BELOW

The opinion of the court of appeals (App. 1-14)

is unreported. The court of appeals’ order denying

Ms. Crase's petition for rehearing (App. 17) is

unreported. The district court's order (App. 15-16) is

unreported.

JURISDICTION

The court of appeals entered judgment on

April 21, 2010. App. 1. The court denied a timely

petition for rehearing on June 16, 2010. App. 17.

The jurisdiction of this Court ts invoked under 28

U.S.C. § 1254(1).

CONSTITUTIONAL PROVISION INVOLVED

The Due Process Clause of the Fifth Amend-

ment to the United States Constitution provides:

No person shall be. . . deprived of life,

liberty, or property, without due process

oflaw....

ho

STATEMENT OF THE CASE

The government manufactured this case. It

targeted petitioner Katherine Crase, a lawyer with

an unblemished record. An undercover FBI agent

undertook a nine-month campaign to get Ms. Crase

and one of her clients to commit a crime. When that

effort failed, the agent developed a second ruse. The

agent--posing as a hedge fund manager, complete

with NASD credentials--pressed Ms. Crase to help

him obtain money from an investor (played by a

second undercover FBI agent). When Ms. Crase

appeared to lose interest in the plan, the agent

hounded her until she responded. Each time she

pulled back, the agent redoubled his efforts,

barraging her with telephone calls.

In the end, Ms. Crase refused to go through

with the plan. When the purported hedge fund

manager told her that he had $100,000 from the

purported investor and was ready to wire it to Ms.

Crase's company, she instructed him to return the

money to the investor. Even then the undercover

agent pressured her to complete the transaction.

But she resisted; she sent back the investor's

subscription agreement unexecuted and rebuffed the

agent's efforts to involve her in a further scheme.

Three years later, the government indicted

Ms. Crase for mail fraud, convinced a jury to convict

her, and obtained a thirty-month prison sentence,

which she is now serving. A panel of the Eleventh

Circuit found that these facts did not give rise to a

due process violation and affirmed Ms. Crase's

conviction. App. 6-8.

This case squarely presents a fundamental

question left open in United States v. Russell, 411

U.S. 423 (1973), and Hampton v. United States, 425

U.S. 484 (1976): whether the Fifth Amendment Due

Process Clause imposes limits on government

involvement in manufacturing crime for the purpose

of prosecuting otherwise innucent persons. That

question has produced a deep and entrenched circuit

split. Four circuits--the Second, Sixth, Seventh, and

District of Columbia Circuits--hold that due process

imposes no such limits. The remaining circuits

purport to recognize limits on government crime

creation but have set the bar so high that, in the

thirty-four years since Hampton, only two reported

court of appeals decisions have found dismissal

appropriate on this basis. The due process limits on

government crime creation should either be given

real meaning, to protect the liberty of innocent

persons whom overzealous agents target. or formally

abandoned.

i PROCEEDINGS BELOW.

The government indicted Ms. Crase and her

co-defendants, Violette Gail Eldridge and Paul D.

Kuhn, on August 29, 2007. The indictment charged

Ms. Crase with conspiracy to commit mail fraud and

six counts of mail fraud.

Ms. Crase moved before trial to dismiss the

indictment for outrageous government conduct. Doc.

91.1 The district court denied the motion without

1 Pleadings are cited by the district court docket number.

Transcripts are cited by date or volume and page. Government

and defense exhibits are cited as "GX" and "DX," respectively.

4

explanation. App. 15. The jury found Ms. Crase

guilty on all counts. The district court sentenced her

to 30 months incarceration. On April 21, 2010, a

panel of the Eleventh Circuit affirmed, rejecting Ms.

Crase's contention that the government's conduct in

creating the alleged offenses violated her right to

due process. App. 1, 6-7. The court of appeals

denied a timely petition for rehearing en banc on

June 16, 2010. App. 17.

II. STATEMENT OF FACTS.

Katherine Crase was an attorney in Tampa,

Florida with a solo civil practice. Her problems

began when she represented Violette Eldridge in a

civil fraud action brought agairfst her by the SEC in

federal court in Indiana. Ms. Crase obtained

dismissal of the Indiana suit on venue grounds. Doc.

115 at 4n.3; 2 TI’. 340-41. She continued to represent

Ms. Eldridge when the SEC refiled the suit in

federal court in Atlanta. 2 ‘I’. 329-32.

A. The Beginning of the Sting

Investigation.

In May 2003, while the SEC action against

Ms. Eldridge was pending, FBI agent John Osa

began an undercover investigation of Ms. Crase and

Ms. Eldridge. 2 T. 346, 349. The FBI had no reason

to suspect Ms. Crase of wrongdoing when it began

(continued...)

The Excerpts of Record from the court of appeals are cited as

"ER."

investigating her.*? Agent Osa posed as a hedge fund

manager named “John Kiro.". To make the deceit

convincing, Firo obtained credentials on the NASD

"Broker Check," and the FBI created a website for

his purported fund, Talon Holdings. 2 T. 348; 3 T.

491-94. ‘he NASD website showed that Iiro was an

accredited broker with no disciplinary problems. 3

T. 492. The Talon Holdings website represented

that Firo was Executive Vice President and had a

Bachelor's of Business Administration degree in

international finance. 3 ‘IT. 493. Using these false

credentials, Firo spent nine months trying to

convince Ms. Crase and Ms. Eldridge to place money

in ‘Talon Holdings or to find other investors for the

fund. ‘l'hey never did so. 2 ‘I’. 350, 500, 507

In early 2004, having produced no evidence of

criminal conduct despite months of investigation,

Firo tned another tactic. At a meeting in February

2004, he told Ms. Crase that he had an investor

later identified as "Grant Colvin," played by

undercover FBI agent Vince Pankoke--with $750,000

to invest. hiro proposed that Colvin invest hi:

money through Ms. Crase and Ms. Eldridge. When

Ms. Crase did not pursue Firo's proposal, he

telephoned her repeatedly until she responded. 3 T

512-16. This pattern repeated itself over the

following months; between February 2004 and July

The prosecutor's pretrial account of how Agent Osa’

investigation began in 2003 said nothing about any suspected

wrongdoing by Ms, Crase According to the prosecutor, a

"cooperating witness" introduced Ms. Eldridge to Agent Osa (in

his undercover role as Firo) because “around the end of 2002.

beginning of 2003, [the cooperating witness] began to believ

that [Ms Kldridge| may be involved in fraudulent activitie

‘l’. 7/9/08 at 6

In a March 24 conversation, Ms. Crase

proposed that rather than paying F iro a commission,

she could invest a portion of Colvin's money in Firo's

hedge fund--a fact of which Colvin would become

aware, because Ms. Crase offered him access to the

books so he could track his investments. 2 T. 456-59;

3 T. 539-43, 622: see GX 20A at 24 (Ms. Crase tells

Colvin: "We sic down face to face and I have no

problem just throwing open the books."). As Ms.

Crase put it to Firo, "If we have the option of paying

a commission or making an investment, and we're

representing to [Colvin] that we're not paying

commissions, then we better make an investment."

3 T. 542; see GX 14A at 5.

In a further discussion on April 12, with the

matter still unresolved, Ms. Crase suggested paying

Firo as a broker "and we disclose that up front to

the, to the investor" or, alternatively, “hav[ing] you

on the company." GX 17A at 4. She explained that

because of the scrutiny Ms. Eldridge's SEC problems

had attracted, "I want to do it the squeakiest,

cleanest most up front way. Because if there's

anything even hinting at gray with the, with the

microscope she's under right now it can bite all of

us." Id. at 4. Ms. Crase told Firo: "Paying the

commission straight up front is easy but then we

have to be able to disclose it.". When F iro responded,

"Right and I don't know," Ms. Crase added: "And |

don't have a problem sitting down with this guy

saying look John has not asked for a commission

because you haven't. But we built a structure in like

this and we will be paying John a commission." Firo

immediately protested, "Well Kit hey... ." Ms.

Crase asked, "Js that a deal breaker?" F iro

responded, "Yeah," and tried to steer Ms. Crase back

toward agreeing to an up-front, undisclosed payment

to Firo out of Colvin's principal. Jd. at 5.

On April 26, with the matter still under

discussion, Firo rejected the idea that, in lieu of a

commission, Ms. Crase would invest a portion of

Colvin's money in his hedge fund. Firo proposed

instead that the money be paid under an

independent consulting agreement. 3 'T. 614-26. Ms.

Crase noted that such an agreement would create a

conflict of interest, and she and Firo decided to seek

a conflict waiver from Colvin. 4 T. 647, 659-62. As

Agent Osa acknowledged at trial, the waiver arose

from the need to disclose to Colvin any payment to

KF iro:

Q Okay. So you can receive a

commission from two different people if

it's disclosed to the investor?

A Yes.

Q Okay. And a disclosure would be

something like a waiver of conflict of

interest?

A That's what Ms. Crase was

getting at when she sent me over that

walver, yes.

Q Okay. Wanting to disclose it to

Mr. Colvin?

A Y cs.

9

3 T. 494.

On May 7, Colvin executed a waiver of all

conflicts of interest arising from Firo's work with Ms.

Crase's investment company, Precision Explorations,

Inc. GX 7; 3 T. 494-95. As late as May 26, however,

Ms. Crase and Firo still had not agreed on how F iro

would receive the money he requested. 4 T. 711-13.

Colvin Receives the LOM.

On April 14, at Firo's urging, Ms. Crase had

her sole meeting with Colvin. She enlisted her

friend and business associate, Paul Kuhn, to attend

and pitch the investment opportunity. The meet-

ing--which Firo attended as well--was held in the

office of Florida State Representative Murman, for

whom Mr. Kuhn's wife worked. At the meeting, Mr.

Kuhn touted his connections with Representative

Murman and with other politicians and the access

those connections gave him to potentially valuable

information.? Although Murman's | testimony

suggested that Mr. Kuhn exaggerated the benefits of

his association with her, 5 T. 869-77, Murman

conceded that he had a close relationship with her

and other Florida politicians, 5 T. 914-52.

During the April 14 meeting, Ms. Crase

presented Colvin with the Limited Offering

Memorandum she had _ prepared for Precision

3 At a preparation meeting the day before the meeting with

Colvin, Firo encouraged Ms. Crase and Mr. Kuhn to let Colvin

know "that we have political clout." GX 18B at 48; see 3 T. 588-

86. Firo also resisted Mr. Kuhn's suggestion that the meeting

with Colvin be held at a hotel rather than at Murman's office.

3 T. 581-82, 586-87.

10

Explorations' offer of unsecured debentures. 3 T.

428-36; 5 T. 1046. The LOM--GX _ 1--contains

extensive, repeated disclosures of the risks of the

potential investment. Among other warnings, the

LOM declares that "[n]o market exists for the sale of

the Unsecured Debentures and none is anticipated

to develop," GX 1 at 1; that "AN INVESTMENT IN

THE UNSECURED DEBENTURES IS SPECU-

LATIVE AND INVOLVES RISK FACTORS," td.;

that "IN MAKING AN INVESTMENT DECISION,

INVESTORS MUST RELY ON THEIR OWN

EXAMINATION OF THE ISSUER AND THE

TERMS OF THE OFFERING, INCLUDING THE

MERITS AND RISKS INVOLVED," id. at 2; that

"THIS OFFERING INVOLVES CONFLICTS OF

INTEREST AND THE PAYMENT OF CERTAIN

FEES TO THE CORPORATION OFFICERS AND

THEIR AFFILIATES," id. at 4; that "[p]ersons or

entities contemplating investment with the

Corporation should give careful consideration to the

risks involved in such an investment, including

those summarized below," id. at 5; that "[t]here can

be no assurance that the Corporation will sell all of

the Unsecured Debentures offered hereby. ... To

the extent that substantially less than all of the

Unsecured Debentures offered hereby are sold, the

ability of the Corporation to achieve its objective

could be adversely affected," itd. at 6; that

"lijnvestment in the Unsecured Debentures is

suitable only for investors who are financially able to

commit to an illiquid or long term investment," Id.;

that "|t]here is no relationship between the offering

price of the Unsecured Debentures and_ the

Corporation's assets, earnings, book value or any

1]

other objective criteria of value," id. at 7; and that

"It]he Corporation is relatively new and has httle

history of operations on which an investor can base

an evaluation of the Corporation. The Corporation

has limited net worth," id. at 9.

Significantly, given the emphasis _ the

government placed at trial on oral representations

that Mr. Kuhn and Ms. Crase made to Colvin at the

April 14 meeting, the LOM admonishes potential

investors that "laJny oral or written information

provided by any party, including representatives of

Precision Explorations, Inc., other than in the form

of an amendment to this Memorandum, is not in any

way to be considered a part of this Limited Offering

Memorandum. Reliance should be placed only upon

the contents of this Memorandum when considering

an investment in the Unsecured Debentures offered

herein." Jd. at 11. In case potential investors missed

the significance of this caution, the LOM adds that

"Injo one has been authorized to give any

information or to make any representation with

respect to the Corporation or the Unsecured

Debentures which is not contained in this

Memorandum or furnished by the Corporation at the

request of a prospective investor. If given, made or

used, any other information, representation or

offering literature must not be considered as part of

this Limited Offering Memorandum." /d. at 4. And

again: "No person has been authorized to give any

information or to make any representations with

respect to the Unsecured Debentures other than as

set out in this Limited Offering Memorandum, and,

if given or made, such _ information © or

representations should not be relied upon by a

12

prospective investor in deciding whether to invest In

the Unsecured Debentures." /d. at 12.

Agent Osa acknowledged at trial that, in light

of this language, "[the LOM] is the entire agreement

between the parties, if such an agreement is going to

exist." 4 T. 747. He conceded that, according to the

LOM, "anything that somebody says that's not

contained in this document ts irrelevant, don't rely

on it." 4 T. 750; see id. at 751 ("Q. So at least three

times in this document here, this memorandun,, it's

telling you, do not rely on any oral representations

that may have been made, correct? <A. That's

correct.").

Perhaps because the disclosures in the LOM

could destroy the criminal case he was trying to

construct, Agent Osa (in his role as F iro) repeatedly

suggested to Ms. Crase that she keep the LOM

"simple." See, e.g., GX 12A at 3; GX 14A at 4. On

March 19, 2004, for example, Firo urged Ms. Crase

to "keep it [the LOM] fairly simplified in the fact

that I don't want this guy to say okay well let me

have uh a team of lawyers to look this over and, and

this and that." GX 12A at 3. Despite Firo's request,

the LOM Ms. Crase presented to Colvin contained

extensive disclosures concerning the risks of the

investment--as outlined above--and recommended

that "EACH PROSPECTIVE INVESTOR SHOULD

CONSULT PROFESSIONAL ADVISORS THAT

ARE INDEPENDENT OF PRECISION EXPLOR-

ATIONS, INC., AS TO THE ECONOMIC, LEGAL,

TAX AND OTHER ASPECTS" of the investment.

GX 1 at 4; see id. at 8 ("Prior to purchasing, each

prospective investor is urged to consult with their

13

attorney and their personal business and _ tax

advisors to determine the legal, tax, and business

ramifications of purchasing Unsecured

Debentures.").

On April 26, 2004, Colvin signed a

subscription agreement that reflected his

understanding and acceptance of the terms of the

LOM and his agreement to invest. GX 5. In that

agreement, he certified (among other things) that he

had read and understood the LOM; that he was a

person of substantial means; that he was "capable of

evaluating the merits and risks of the prospective

investment" and, in_ general, sophisticated in

financial matters; and that he understood that "the

Unsecured Debentures is a speculative investment

that involves a high degree of risk of loss of the

entire investment of the undersigned in the

Corporation." GX 5; see, e.g., 3 T. 487-91. Colvin

further warranted that he had

relied solely upon the |LOM], the

documents and materials submitted

therewith, and independent invest-

igations made by the undersigned or his

Purchaser Representatives, in making

the decision to purchase the Unsecured

Debentures, and acknowledges that no

representations or agreements other

than those set forth in_ the

Memorandum have been made to the

undersigned in respect thereto.

GX 5 at A-3; see, e.g., 5 T. 1016-19. As Agent

Pankoke testified at trial:

14

Q. Okay. So you're representing [in

the subscription agreement}! that you're

a wealthy individual?

A. Yes.

(). Who has sufficient knowledge to

understand these investments, risks,

merits, everything else?

3 Yes.

Q. You're also representing that you

have relied solely, solely on the limiting

offering memorandum?

A. Yes.

5 'T. 1018.

D. Ms. Crase Walks Away.

Despite constant badgering from _ Firo

following the April 14 meeting, Ms. Crase decided to

abandon the proposed transaction. When Firo told

her on May 21, 2004 that he was ready to send her

$100,000 of Colvin's money in accordance with the

April 26 subscription agreement, she directed him to

return it. Agent Osa testified:

Q. Okay. And during this con-

versation on May 21st, you advised Ms.

Crase that you had some of Grant's

money ready to send?

A. Yes, I did advise that.

15

Q. And she advised you to return it

to him.

A. That's correct.

Q. Return the whole amount to him?

A. That's correct.

4 'T. 681-82. Despite Ms. Crase's directive to return

Colvin's money, F iro tried to "keep the Grant deal on

track." 4 T. 682. Agent Osa testified:

Q. So the deal, this whole deal, is

dying on the vine, and you're trying to

keep it alive?

A. That's correct.

Q. ... So in an effort to try to keep it

alive you kept calling, correct?

A. That's correct.

Q. You continued to call?

A. Yes, that's correct.

4 'T. 685. Firo became "upset" in a May 25

p tf

conversation with Ms. Crase because the deal was

not done. 4 T. 685-87. He called her repeatedly in

late May to try to convince her to go through with

the Colvin transaction. E.g., 4 T. 687-91, 694-97,

701-09, 713-15; DX 1. But Firo's efforts to pressure

16

Ms. Crase failed. On June 1, she returned Colvin's

subscription agreement unexecuted. GX 10, 10A; 5

T. 1046, 1053. When Firo contacted her in July 2004

about another potential investor with millions of

dollars to invest, Ms. Crase told Firo that his broker

fee would have to be disclosed up front and made no

effort to pursue the investment. 4 T. 721-23. She

"blew [Firo} off twice" when he tried to meet with her

about the wealthy potential investor. 4 T. 723, 731-

32.

In August 2007, more than three years after

Ms. Crase's last interaction with Firo and Colvin, the

government obtained an indictment against her for

mail fraud.

REASONS FOR GRANTING THE WRIT

This case squarely presents an important

question that has produced a deep and enduring

circuit split: Does the Due Process Clause impose

limits on crime creation by federal undercover

agents for the purpose of prosecuting otherwise

innocent persons--and, if so, what are those limits?

This case, with its egregious and largely undisputed

facts, offers the perfect vehicle for resolving that

question.

|/

I. THE CIRCUITS ARE DEEPLY SPLIT

OVER WHETHER THE DUE PROCESS

CLAUSE LIMITS THE POWER OF

FEDERAL AGENTS TO CREATE

CRIMES FOR THE PURPOSE OF

PROSECUTING OTHERWISE INNO.

CENT PERSONS.

A. Russell and Hampton.

The principle that the Fifth Amendment Due

Process Clause places limits on crime creation by

federal agents has its modern roots in two decisions

from this Court. In United States v. Russell, 411

U.S. 423 (1973), the respondent had been convicted

of manufacturing methamphetamine. On appeal he

asserted a due process violation because undercover

federal agents had supplied an essential ingredient

of the drug. The lower courts agreed

This Court reversed in a 5-4 decision It

refused to adopt a "fixed rule[]," as a matter of due

process, that prosecution is barred "when it is shown

that the criminal conduct would not have been

possible had not an undercover agent supplied an

indispensable means t» the commission of the crime

that could not have been obtained otherwise,

through legal or illegal channels." Id. at 43]

(quotation omitted). The Court added: "While we

may some day be presented with a situation in which

the conduct of law enforcement agents is. so

outrageous that due _ process. principles would

absolutely bar the government from invoking judicial

processes to obtain a conviction, cf. Rochin v

California, 342 U.S. 165 (1952), the instant case 1:

lx

distinctly not of that breed." /d. at 431-32. The

Court added that "|t]he law enforcement conduct

here stops far short of violating that fundamental

fairness, shocking to the universal sense of fairness,

mandated by the Due Process Clause of the Fifth

Amendment." Id. at 432 (quotation omitted)

Justice Douglas (joined by Justice Brennan) and

Justice Stewart (joined by Justices Brennan and

Marshall) dissented

The Court next confronted the due proce

limits on government crime creation in /lampton |

United States, 425 U.S. 484 (1976). In Hampton, the

petitioner had sold heroin to DEA agents that

allegedly had been supplied to him by an informant,

who also facilitated the sales. See id. at 486-87

Invoking the suggestion in /fussell that law

enforcement conduct might be sufficiently

outrageous to bar prosecution, the _ petitioner

contended that due process required dismissal of the

charges against him

This Court disagreed, but without a majority

opinion. Justice Rehnquist, in an opinion joined by

Chief Justice Burger and Justice White, concluded

that "the remedy of the criminal defendant with

respect to the acts of Government agents, which, far

from being resisted, are encouraged by him, lies

solely in the defense of entrapment." Jd. at 490

(Rehnquist, J.) (plurality opinion).* The plurality

added that "[t]he limitations of the Due Process

Clause come into play only when the Government

activity in question violates some protected right of

‘Ms. Crase did not request an entrapment instruction in thi

Cast

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21

coercion, violence, or brutality to the person."

United States v. Gaviria, 116 F.3d 1498, 1534 (D.C.

Cir. 1997) (quotation omitted); see United States v.

Jackson, 345 F.3d 59, 67 (2d Cir. 2003). The

remaining circuits hold that the Due Process Clause

limits government crime creation for the purpose of

prosecuting otherwise innocent persons. As

discussed below, however, those limits are largely

undefined. ®

C. The Courts of Appeals' Failure to

Give Meaning to the Due Pro-

cess Limits on Government Crime

Creation.

The circuits that recognize due _ process

constraints on government crime creation have

failed to give meaningful content to those limits. In

the words of the First Circuit, the so-called "due

process defense," although alive in theory, is "mori-

bund in practice" and rejected by the courts of

appeals "with almost monotonous _ regularity."

United States v. Santana, 6 F.3d 1, 4 (1st Cir. 1993);

see, e.g., United States v. Lakhani, 480 F.3d 171, 181

(3d Cir. 2007) (due process limits on government

crime creation "hanging by a thread") (quotation

omitted).

§ See, e.g., United States v. Williams, 547 F.3d 1187, 1199-1201

(9th Cir. 2008); United States v. Lakhani, 480 F.3d 171, 177-78,

180-83 (3d Cir. 2007); United States v. Garcia, 411 F.3d 1173,

1181 (10th Cir. 2005); United States v. Hunt, 171 F.3d 1192,

1195 (8th Cir. 1999); United States v. Sanchez, 138 F.3d 1410,

1413 (11th Cir. 1998); United States v. Asibor, 109 F.3d 1023,

1039-40 (5th Cir. 1997); United States v. Jones, 18 F.3d 1145,

1154 (4th Cir. 1994); United States v. Santana, 6 F.3d 1, 4 (ist

Cir. 1993).

ze

In the decade following Hampton the courts of

appeals appeared ready to adopt a robust, flexible

due process doctrine that curbed government

involvement in manufacturing crime while

preserving legitimate undercover’ investigative

techniques. In United States v. Twigg, 588 F.2d 373

(3d Cir. 1978), for example, the court found that "the

nature and extent of police involvement in the crime

was so overreaching as to bar prosecution of the

defendants as a matter of due process." Jd. at 377.

The court found significant not only that the

government supplied the necessary ingredients for

the manufacture of narcotics, but also that the crime

was "conceived and contrived by government

agents." /d. at 378. Quoting an earlier case, Twigg

observed that "when the government's own agent

has set the accused up in illicit activity by supplying

him with narcotics and then. introducing him to

another government agent as a prospective buyer,

the role of government has passed the point of

toleration.” Jd. at 379 (quoting United States uv.

West, 511 F.2d 1083, 1085 (3d Cir. 1975)). Summing

up its analysis, the court observed that

the DEA agents deceptively implanted

the criminal design in_ [defendant

Neville's] mind. ‘They set him up,

encouraged him, provided him the

essential supplies and __ technical

expertise, and when he and a

cooperating witness] encountered diffi-

culties in consummating the crime, they

assisted in finding solutions. This

egregious conduct on the part of

government agents generated new

to

LJ

crimes by the defendant merely for the

sake of pressing criminal charges

against him when, as far as the record

reveals, he was lawfully and peacefully

minding his own affairs.

Td. at 381

A second post-Hampton court of appeals

decision--United States v. Tobias, 662 F.2d 381 (5th

Cir. Unit B 1981)--similarly constrained government

crime creation as an investigative technique. Tobias

purported to “set the outer limits to which the

rovernment may go in the quest to ferret out and

prosecute crimes in this circuit." Jd. at 387. In

Tobias, the DEA established a sham chemical supply

company and advertised in High Times magazine.

Tobias contacted the company and ordered supplies

He later canceled his order because (he told an

undercover DEA agent) he had discovered that

manufacturing cocaine was harder than he had

thought. The agent suggested that Tobias try

manufacturing PCP. Tobias agreed and ordered the

necessary supplies. He was later prosecuted for

‘ This case resembles Twigg in several respects. Agent Osa

"conceived and contrived" the scheme involving Colvin. He “set

[Ms. Crase] up in illicit activity" by “introducing [her] to

another government agent [Pankoke, posing as Colvin] as a

prospective [client].". Agent Osa "encouraged" Ms. Crase to

engage in unlawful activity--by, for example, urging her

repeatedly to give him 30% of Colvin's money without

disclosing the payment to Colvin--and did everything he could

to "generate[] new crimes by [Ms. Crase] merely for the sake of

pressing criminal charges against [her] when, as far as the

record reveals, [she] was lawfully and peacefully minding [her]

own affairs." 588 F.2d at 379, 381. Ms. Crase, unlike Twigg,

ultimately rejected the government's efforts to draw her into

criminal activity.

24

conspiracy to manufacture and possess PCP with

intent to distribute. See id. at 383-84.

The court of appeals declined to find a due

process violation because, it noted, Tobias and his

wife initiated each of the contacts with the DEA

undercover agents. See id. at 387. Thus, instead of

being a "predisposed inactive participant" in the

PDP scheme, Tobias was a "predisposed active

participant, motivated solely by a desire to make

money. It is this predisposition plus active and

insistent participation that sets this case apart" from

cases In which a due process violation was found. /d.

The court of appeals observed pointedly that "[t}his

would be a more difficult case if the DEA had

pursued Tobias by repeated phone calls and

encouragement." Id.°

The Eighth Circuit performed a_= similar

analysis in United States v. Lard, 734 F.2d 1290 (8th

Cir. 1984). An undercover agent and an informant

This case has precisely the elements of government

overreaching that the court of appeals found lacking in Tobias.

Ms. Crase was not predisposed at all when she encountered

Agent Osa in May 2003, much less actively so. Indeed, Agent

Osa's first ruse (from April or May 2003 to February 2004) did

not produce any unlawful conduct. Unlike Tobias, Ms. Crase

did not initiate contact with Agent Osa; on almost every

occasion he contacted her. And, unlike the DEA agents in

Tobias, Agent Osa "pursued [Ms. Crase] by repeated phone

calls and encouragement." Tobias, 662 F.2d at 387. By his own

admission, Agent Osa made the "vast majority of the calls in

this case," and Ms. Crase "did not call [him] back in connection

with the vast majority of his messages." 3 T. 548. If Tobias

"set[s] the outer limits to which the government may go in the

quest to ferret out and prosecute crimes in this circuit," 662

l’.2d at 387, this case certainly exceeds those limits. Oddly, the

court of appeals panel below, although bound by Tobias, never

cited that decision.

8

é2

visited Lard to buy a shotgun. Lard declined to sell

the shotgun but offered to sell a small detonator

instead. The agent implored Lard to sell him a more

powerful pipe bomb. Lard initially demurred but

eventually relented and, several hours later, pro-

duced the bomb in exchange for $100. Lard was

prosecuted for transferring, and conspiring to

transfer, a destructive device. He asserted both an

entrapment defense and a due process violation.

The Eighth Circuit reversed Lard's conviction.

It noted that before meeting the undercover officer,

Lard had no criminal record and no history of

dealing in destructive devices. Lard did not raise the

subject of the pipe bomb and initially resisted the

undercover agent's suggestion that he sell such a

device. The court found entrapment established,

based on Lard's lack of predisposition to sell the pipe

bomb and the agent's inducement. The court also

concluded that "the undercover agent's] over-

involvement in conceiving and contriving the crimes

here approached being ‘so outrageous that due

process principles should bar the government from

invoking judicial processes to obtain a conviction."

734 F.2d at 1298 (quoting Russell, 411 U.S. at 411-

32). The court concluded that "[w]hile law enforce-

ment officials may use strategy, stealth, and even

deception to catch the unwary criminal, they may

not arbitrarily select an otherwise law abiding

person, gain his confidence, and then proceed to

beguile or lure him to commit a crime he would not

have otherwise attempted. It is the government's

26

duty to prevent crime, not to instigate or create it."

9

Id. at 1295.

Despite the early promise of Twigg, Tobias,

and Lard, the circuits which hold that the Due

Process Clause establishes hmits on government

crime creation have retreated over the last twenty-

five years. Since Lard, not a single court of appeals

decision has found a due process violation and

reversed a conviction where undercover federal

agents have manufactured a crime for the purpose of

prosecuting an otherwise innocent person.

IT. THE COURT SHOULD GRANT THE

WRIT TO END THE CIRCUIT SPLIT AND

CLARIFY THE DUE PROCESS LIMITS

ON GOVERNMENT CRIME CREATION.

The Court should grant the writ to end the

entrenched circuit split between the Second, Sixth,

Seventh, and D.C. Circuits--which hold that due

process does not limit government crime creation--

and the First, Third, Fourth, Fifth, Eighth, Ninth,

Tenth, and Eleventh Circuits--which hold that due

process does impose such limits. Resolution of the

circuit split is particularly important because,

despite the scarcity of dismissals, defendants

° Here, the government did precisely what the court of appeals

found proscribed in Lard: Agent Osa arbitrarily selected Ms.

Crase, an otherwise law abiding person; he gained her

confidence; and then he hounded her into participating in the

plan to convince Colvin to invest in Precision Explorations--

conduct in which she would not otherwise have engaged. This

case is even more egregious than Lard (and Twigg and Tobias)

in that even after Ms. Crase told Agent Osa (as Firo) to return

the investor's money, the undercover agent spent another week

pressuring her to go through with the transaction.

27

regularly raise the due process argument in

prosecutions that arise from undercover

investigations. There is thus a pressing need for a

uniform national standard placing outer limits on

government crime creation.

The Court should adopt the view of five

Justices in Hampton--and of the majority of circuits--

that due process bars overzealous federal agents

from manufacturing crimes for the purpose of

prosecuting otherwise innocent persons, and _ it

should give meaning to that principle by holding

that it requires dismissal of the contrived charges

against Ms. Crase. This Court has declared that

"I!wlhen the Government's quest for convictions leads

to the apprehension of an otherwise law-abiding

citizen who, if left to [her] own devices, likely would

have never run afoul of the law, the courts should

intervene." Jacobson v. United States, 503 U.S. 540,

553-54 (1992); see Casey v. United States, 276 U.S.

413, 423 (1928) (Brandeis, J., dissenting) ("The

Government may set decoys to entrap criminals.

But it may not provoke or create a crime and then

punish the criminal, its creature."). That is exactly

what happened here. Had Ms. Crase never

encountered Agent Osa, she would never have run

afoul of the law. The record contains no hint that

she engaged in (or even contemplated) criminal

conduct before Agent Osa trained his sights on her

in May 2008 or after he moved on to other targets in

July 2004. The Fifth Amendment Due Process

Clause should protect an innocent citizen such as

Ms. Crase, who has the misfortune to find herself

targeted by a federal agent determined _ to

28

manufacture a crime with which to charge, convict,

and imprison her

CONCLUSION

The petition for a writ of certiorari should be

eranted.

Respectfully submitted,

JOHN D. CLINE

Counsel of Record

Law Office of

John D. Cline

115 Sansome Street,

Suite 1204

San Francisco, CA 94104

(415) 322-8319

Counsel for Petitioner

Katherine Crase

September 2010

App. l

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 08-17222

D.C. Docket No. 07-80123-CR-KAM

UNITED STATES OF AMERICA,

Plaintiff Appellee,

versus

VIOLETTE GAIL ELDRIDGE,

PAUL D. KUHN,

KATHERINE CRASE,

Defendants-Appellants.

Appeals from the United States District Court

for the Southern District of Florida

(April 21, 2010)

Before CARNES, ANDERSON and STAHL,* Circuit

Judges.

STAHL, Circuit Judge.

Defendants-appellants Violette Gail Eldridge,

Paul] D. Kuhn, and Katherine Crase were tried and

* Honorable Norman H. Stahl, United States Circuit Judge

for the First Circuit, sitting by designation.

App. 2

convicted of conspiracy to commit mail fraud, in

violation of 18 U.S.C. § 371, and mail fraud,’ in

violation of 18 U.S.C. § 1341 and 18 U.S.C. § 2. On

appeal, they primarily argue that the FBI investiga-

tion that resulted in their prosecution and conviction

amounted to outrageous government conduct and

that sufficient evidence does not support their con-

victions. Having carefully considered the record, we

affirm on both issue as to all three appellants. We

also affirm as to several subsidiary issues raised by

the various appellants, including the district court’s

jury instructions, estimation of the amount of loss,

and sentencing.

I. Background

We recite the facts of the case in the light most

favorable to the government. See United States v.

Gray, 367 F.3d 1263, 1266 n.3 (llth Cir. 2004). In

2003, the FBI began an undercover investigation

upon receiving a tip from a cooperating witness

that Eldridge was involved in fraudulent financial

dealings. As part of the investigation, an FBI agent

posed as a hedge fund manager named John Firo’ and

' Eldridge and Crase were convicted of six counts of mail

fraud, while Kuhn was convicted of one count of mail fraud and

acquitted on the remaining five counts. Eldridge and Crase were

sentenced to 30 months’ imprisonment while Kuhn received a

24-month sentence.

* This opinion will refer to the FBI agents using their

aliases.

App. 3

met with Eldridge and Crase several times during

2003, proposing to create fraudulent hedge fund

statements for a financial entity that the two women

were in the process of creating. They declined

involvement in the scheme.

In February 2004, Firo again approached Eldridge

and Crase, telling them he was advising a potential

investor who was seeking to invest $750,000 with a

financial entity that would enable him to avoid

paying taxes on the investment amount. This sup-

posed wealthy investor was in fact another FBI agent

using the alias Grant Colvin. Firo told Eldridge and

Crase that in return for delivering the investor, he

expected to receive a kickback payment out of the

money invested by Colvin. Crase replied that such a

payment would not be a problem, whether or not the

investor knew about the arrangement.

Firo met with Crase the next month, in March

2004, to discuss Colvin’s investment further; Eldridge

participated in the discussion over the telephone. At

the meeting, the kickback was discussed again, with

Firo emphasizing that the potential investor could

not know about the kickback; Eldridge and Crase

assured him that the investor would not know of the

arrangement. Eldridge and Crase also told Firo that

they would prepare a private placement package for

the investor that would promise a minimum annual

App 4

return of ten percent. Later that same month, Firo

confirmed in a phone call with Crase that his kick

back would amount to 30 percent of Colvin’s initial

investment.

Also in March, F iro told Eldridge and Crase that

his investor, Colvin, was ready to meet with them to

discuss the potential deal. Crase decided to bring in a

third person, Paul D. Kuhn, to pitch the investment

to Colvin in exchange for a financial payment of some

sort. For the pitch meeting, Kuhn secured the use of

the office of a Florida state representative with whom

he had a personal relationship. As it turned out, that

use was not authorized by the representative

On April 13, 2004, Firo, Crase, and Kuhn held a

planning meeting in order to rehearse for the pitch

meeting, which was to be held the next day. During

the planning meeting, Firo informed Kuhn _ that

Colvin did not know that Firo stood to gain anything

from the deal, and Kuhn agreed to conceal that fact

from Colvin. Kuhn and Firo also rehearsed pre

tending to meet each other for the first time so that

the investor would not know that Firo was involved

Kidridge and Crase also told Firo that the investor would

not be informed of Eldridge’s involvement in the investment

entity because Eldridge was then the subject of an SEC action

regarding other alleged financial misconduct. Indeed, though

Eldridge apparently drafted the proposed investment agreement

and was to have been primarily responsible for the financial

manayement of the funds, her name did not appear on any

documents given to the proposed investor, nor did she attend

any meetings where the investor was present

\pp

in the deal. Also, Crase and Kuhn rehearsed ways of

pressuring Colvin to invest in the deal, including

telling him that other investor had already been

approached, that the offering was close to being sold

out. and that Colvin might be the last one allowed in

on the deal

At the pitch meeting the following day, Kuh

explained to the potential investor that his politica

connections allowed the investment team to get in on

business opportunities before the general public knev

of them. He also explained that the investment would

ruarantee a ten percent annual return and would bi

“under the radar,” enabling Colvin to avoid payin

taxes on his investment amount. Crase told Colvin

that the investment would be limited to thirty offer

and twenty-five investors and that he was the seven

teenth. In reality the investment had apparently only

been offered to Colvin and there were never any other

investors, real or imagined. Crase also implied that

many of her past and current chents had already

signed up for the investment. Kuhn confirmed to

Colvin that he wasn’t “the only guy” involved in the

investment and made various other statement

regarding other supposed investor Also, Colvin

asked Crase whether Firo had requested a comm:

sion and she replied in the negative

After the meeting, the parties exchanged variou

documents and signed agreements through the mai!

including documents intended to facilitate the pay

ment of the kickback to Firo without running afoul of

conflict of interest rules or revealing the kickback to

App. 7

conduct grounds. See United States v. Edenfield, 995

F.2d 197, 200 (llth Cir. 1993). On appeal, Crase

posits that she was neither predisposed to engage in

criminal conduct nor an active participant in the mail

fraud conspiracy. Rather, she argues, the FBI agents

hounded her, attempting unsuccessfully to lure her

into numerous illegal schemes.

However, Crase’s actions suggest otherwise. The

undercover agents presented Crase with an oppor-

tunity to pitch an investment to a fake investor.

Crase took that opportunity by, among other things,

creating an investment scheme apparently intended

solely for this one investor, organizing the pitch

(including bringing Kuhn into the deal under the

false pretense that he would be in charge of seeking

out investment opportunities), making numerous

false statements to the investor in order to induce his

investment, and agreeing to provide and conceal a

kickback to Firo. A review of the transcripts of the

planning meeting and the pitch meeting, in par-

ticular, convince us that Crase was far from an

innocent victim of a government attempt to dupe

her into criminal activity. See United States ov.

Ciszkowski, 492 F.3d 1264, 1270 (11th Cir. 2007)

(“Outrageous government conduct occurs when law

enforcement obtains a conviction for conduct beyond

the defendant’s predisposition by employing methods

that fail to comport with due process guarantees.

Under this standard, the conduct must be so

outrageous that it is fundamentally unfair.”) (internal

App. 8

citation omitted). We therefore affirm the district

court’s denial of Crase’s motion.”

2. Sufficiency of the Evidence

All three appellants contest the sufficiency of the

evidence on the counts for which they were convicted.

We review a sufficiency claim de novo, viewing the

evidence “in the light most favorable to the govern-

ment with all reasonable inferences and credibility

choices made in favor of the government.” United

States v. Campa, 529 F.3d 980, 992 (11th Cir. 2008),

cert. denied, 129 S. Ct. 2790 (2009). We are tasked

with concluding whether a reasonable jury could

have concluded beyond a reasonable doubt that the

defendants were guilty of the crimes charged. United

States v. Lopez-Ramirez, 68 F.3d 438, 440 (11th Cir.

1995).

Having reviewed the record carefully, we affirm

the district court’s denial of the defendants’ post-

judgment motions for acquittal. As a preliminary

matter, we reject the argument that acquittal was

required because the defendants allegedly did not

intend to abscond with Colvin’s investment but

rather intended to create a legitimate investment

vehicle that would provide healthy returns to the

investor. The record is replete with evidence that a

reasonable jury could have construed to support the

We would also reject Eldmdge’s unpreserved argument on

the same ground if it were properly before us

App. 9

conclusion that the coconspirators’ aim was not to

create a legitimate investment vehicle but to secure

access for personal gain to the large sum of money

that Colvin was reportedly interested in investing

with them. Particularly given our standard of review,

this argument is a non-starter.

Second, the defendants face an extraordinarily

high burden in seeking to overturn the verdicts in

this case. In order to sustain the convictions on the

substantive mail fraud counts, we need only deter-

mine that a reasonable jury could have concluded

that the defendants used the United States mail

system to attempt to carry out a financial scheme

involving materially false representations intended to

defraud Colvin. See United States v. Svete, 556 F.3d

1157, 1161-62 (11th Cir. 2009); United States v.

Ellington, 348 F.3d 984, 990 (llth Cir. 2003).

Further, to sustain the conspiracy charge, we need

only find that there was enough evidence for a jury to

conclude that there was an agreement to devise a

mail fraud scheme, that the defendants knowingly

participated in the conspiracy, and that they com-

mitted one overt act in furtherance thereof. See

United States v. Suba, 132 F.3d 662, 672 (11th Cir.

1998). Finally, the defendants in this case must

reckon with an extensive record that contains

numerous detailed and suggestive transcripts of the

meetings and conversations that took place among

the defendants and the undercover agents.

Having reviewed those transcripts carefully, we

agree with the district court that the evidence was

App. 10

sufficient to support the guilty verdicts as to each

defendant. Reading the transcripts in the light most

favorable to the verdicts, we easily conclude that a

reasonable jury could have determined that defen-

dants' Eldridge and Crase made numerous materially

false statements intended to fraudulently induce

Colvin’s investment. A reasonable jury could have

read Eldridge’s recorded conversations from March

15, 2004 and April 14, 2004, as persuasive evidence

that she intended to pressure Colvin into an

investment that she knew to be fraudulent. Similarly,

Crase’s statements at the planning meeting and the

pitch meeting were also inculpatory and a reasonable

jury could have viewed those statements as indicating

unscrupulous financial behavior aimed at using false

statements to convince Colvin to invest in a fraudu-

lent investment vehicle.

The evidence against Kuhn is also sufficient to

sustain the jury’s verdict. While he argued to this

court that he was merely the pitchman, brought in for

two days to make the pitch, and was otherwise

ignorant of the details of the deal, his recorded

statements from the planning meeting and the pitch

meeting belie that argument. The transcript of the

planning meeting reveals that a reasonable jury could

have concluded that he had prior knowledge of the

fraudulent nature of the deal and that he intended to

make materia! misrepresentations to Colvin at the

pitch meeting in order to induce his investment. His

behavior the following day at the pitch meeting

provided further evidence for a reasonable jury to

App. 11

render a guilty verdict. At the pitch meeting, he did

not engage in mere puffing and seller’s talk, as

alleged, but made materially false representations

about the nature of the deal that were intended to

induce Colvin’s investment.

We therefore affirm as to the sufficiency claims

presented by all three defendants.

3. Jury Instructions

Crase’ raises on appeal an argument regarding

the jury instructions which was not preserved below.

We therefore review the matter for plain error. See

Fed. R. Crim. P. 52(b); United States v. Monroe, 353

F.3d 1346, 1349 (11th Cir. 2003) (plain error requires

a showing of error that is plain and that affects

defendant’s substantial rights). Essentially, Crase

argues that the jury instruction as to fraudulent

omissions was incomplete because it did not state

that such omissions constitute fraud only where there

is a duty to disclose. She argues that because she

allegedly did not have a duty to disclose, her failures

to disclose could not have constituted fraudulent

omissions. However, we conclude that we need not

determine whether a duty to disclose instruction was

required because a fair reading of the record reveals

numerous instances of fraudulent misrepresentations

by Crase, as well as by her co-defendants. The

6

Eldridge and Kuhn adopt Crase’s jury instruction argu-

ment.

App. 12

affirmative misrepresentations alone are sufficient

grounds upon which to rest the guilty verdicts and we

thus discern no plain error in the jury instructions

that would have affected defendants’ substantial

nghts.

4. Loss Amount

The district court calculated the loss amount to

be $225,000, which was equivalent to the 30 percent

kickback promised to the undercover agent (in other

words, 30 percent of the proposed investment total of

$750,000). At sentencing, the government argued

that defendants should be held responsible for the

total proposed investment amount ($750,000) while

the defendants argued for a loss amount of zero

because the defendants never accepted any money

from the agents. On appeal, Eldridge’ argues that the

loss amount should have been zero because no money

changed hands, or, in the alternative, 30 percent of

$100,000 because the purported investor eventually

proposed transferring a preliminary sum of $100,000

to the defendants.

We review a district court’s determination of the

amount of loss under the Sentencing Guidelines for

clear error. See United States v. Grant, 431 F.3d 760,

762 (11th Cir. 2005). We find no such error here. The

district court was quite reasonable in choosing an

' Kuhn adopts Eldridge’s argument on loss amount.

App. 13

intermediate intended loss amount given that the

record supported the conclusion that there was an

agreement for a 30 percent kickback and that the

defendants anticipated receiving $750,000 from the

investor. See United States v. Lee, 427 F.3d 881, 893

(11th Cir. 2005) (“A sentencing court need only make

a reasonable estimate of the loss, given the available

information.”).

5. Sentencing

On appeal, Eldridge alone contests the length of

her sentence. She argues that the district court’s

sentence of 30 months in prison was substantively

unreasonable due to erroneous consideration of the

sentencing factors under 18 U.S.C. § 3553(a). She

contends that the court did not adequately consider

the alleged outrageous conduct of the government,

along with her age and health, and that “the district

court should have given greater consideration to a

sentence which did not include imprisonment, or that

was below the advisory guideline range.”

We review the sentence only for reasonableness,

United States v. Talley, 431 F.3d 784, 788 (11th Cir.

2005), and note that the district court sentenced

Eldridge at the low end of the advisory guideline

range of 30 to 37 months. We do not find Eldridge’s

* Eldridge, who is 65-years-old, asserts that she suffers

from asthma, heart murmurs, diabetes, diverticulitis, sleep

apnea, and chronic kidney infection.

App. 14

30-month sentence to be unreasonable, particularly

given that the disirict court explicitly considered

Eldridge’s age and that we have already concluded

that the outrageous government conduct argument is

meritless.

Ill. Conclusion

For the forgoing reasons we affirm as to all

issues raised on appeal by all defendants.

App. 15

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 07-80123-CR-MARRA

UNITED STATES OF AMERICA,

Ve

VIOLETTE GAIL ELDRIDGE,

KATHERINE CRASE AND

PAUL D. KUHN,

DEFENDANTS.

ORDER DENYING DEFENDANT’S MOTION TO

DISMISS INDICTMENT, MOTION FOR ADDI-

TIONAL DISCOVERY AND MOTION FOR

HEARING ON MOTION TO DISMISS

These matters came before the Court on Defen-

dant Katherine Crase’s Motion to Dismiss Indictment

[DE 91], Defendant’s Motion for Additional Discovery

[DE 90] and Defendant’s Motion for Hearing on

Motion to Dismiss [DE 150]. Upon considering the

motions and otherwise being duly advised in the

premises, it is hereby ordered and adjudged that

Defendant’s Motion to Dismiss Indictment, Defen-

dant’s Motion for Additional Discovery and Defen-

dant’s Motion for Hearing on Motion to Dismiss are

DENIED.

in Chambers. in West

1 day of December. 2008

[Illegible}

KENNETH A. MARR,

UNITED STATES

DISTRICT JUDGE

Palm

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

O8-17299-C\

UNTTED STATES OF AMERICA

Versus

VIOLETTE GAIL ELDRIDGI

PAUL D. KUHN,

KATHERINE CRASH

iJeTendant

on Appeal from the United State istrict ¢

for the Southern District of Florida

Filed Jun. 16, 2010

ON PETITION(S) FOR REHEARING AND PETI

TION(S) FOR REHEARING EN BANC

Before: CARNES. ANDERSON and STAH]

Judges

PER CURIAM

Honorabli Norm iti H tant | niLteqd tA yf pure

for the First Circuit ittinyg by designation

TE