10-4544-pr (L)
United States v. Nicholson


                              UNITED STATES COURT OF APPEALS
                                  FOR THE SECOND CIRCUIT

                                        SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.

      At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 7th day of January, two thousand sixteen.

PRESENT: RALPH K. WINTER,
                 REENA RAGGI,
                 CHRISTOPHER F. DRONEY,
                                 Circuit Judges.
----------------------------------------------------------------------
UNITED STATES OF AMERICA,
                                 Appellee,
                                                                             No. 10-4544-pr;
                             v.                                              No. 14-3711-pr

JAMES NICHOLSON,
                                 Defendant-Appellant.
----------------------------------------------------------------------

APPEARING FOR APPELLANT:                         ANDREW J. FRISCH, ESQ. (Jeremy B. Sporn,
                                                 Esq., on the brief), New York, New York.

APPEARING FOR APPELLEE:                          JENNIFER L. BEIDEL, Assistant United States
                                                 Attorney (Justin Anderson, Assistant United
                                                 States Attorney, on the brief), for Preet Bharara,
                                                 United States Attorney for the Southern District
                                                 of New York, New York, New York.


                                                     1
       Consolidated appeal from judgments of the United States District Court for the

Southern District of New York (Richard J. Sullivan, Judge).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgments entered on November 2, 2010, and September 25,

2014, are AFFIRMED.

       Defendant James Nicholson, who over approximately six years defrauded more

than 250 people, causing a loss of more than $100,000,000, stands convicted, based on his

guilty plea, of securities fraud, see 15 U.S.C. §§ 78j(b), 78ff; investment adviser fraud, see

id. §§ 80b-6, 80b-17; and mail fraud, see 18 U.S.C. § 1341. On this consolidated appeal

from the judgment of conviction and from the denial of his habeas challenge to that

conviction, Nicholson argues (1) that his counsel was constitutionally ineffective at plea

and sentencing for failing to advise him that double jeopardy barred consecutive prison

sentences for mail and securities fraud based on the same conduct; and (2) that his total

40-year prison sentence was substantively unreasonable.           We assume the parties’

familiarity with the facts and the record of prior proceedings, which we reference only as

necessary to explain our decision to affirm.

1.     Ineffective Assistance of Counsel

       A defendant complaining of ineffective assistance of counsel bears the heavy

burden to show both that counsel’s conduct “fell below an objective standard of

reasonableness,” and “a reasonable probability that, but for counsel’s unprofessional


                                               2
errors, the result of the proceeding would have been different.” Strickland v. Washington,

466 U.S. 668, 688, 694 (1984); see also United States v. Kimber, 777 F.3d 553, 562 (2d

Cir. 2015); United States v. Arteca, 411 F.3d 315, 320 (2d Cir. 2005). Nicholson cannot

carry this burden with respect to counsel’s purported failure to identify a double jeopardy

challenge to consecutive sentences because the argument is foreclosed by precedent. In

United States v. Reed, 639 F.2d 896, 905 (2d Cir. 1981), this court held that the federal

mail and securities fraud statutes “properly exist ‘side by side’” in addressing different

harms and, therefore, do not admit a multiplicity challenge to the charging of both crimes

in a single indictment. More to the point of this case, Reed identified “no congressional

intent to preclude multiple penalties when a defendant has been convicted of both mail

fraud and securities fraud.”        Id. at 905–06.      Counsel can hardly be deemed

constitutionally ineffective for not pursuing an argument at odds with this controlling

precedent. See Tellado v. United States, 745 F.3d 48, 55 (2d Cir. 2014) (denying

ineffectiveness claim where counsel’s actions comported with “law as it then stood”).

       In urging otherwise, Nicholson suggests that mail fraud was effectively a lesser

included offense of the securities fraud in this case. We need not here decide whether this

argument, raised for the first time on appeal, is barred by Nicholson’s guilty plea because it

fails in any event.1 Mail fraud requires proof of an element—use of the mails—not


1
 The Supreme Court has left open the possibility that a double jeopardy violation apparent
on the face of the indictment or the record existing at the time a plea is entered is not

                                              3
required by securities fraud. See United States v. Reed, 639 F.2d at 905. Nicholson

submits that multiplicity should not be assessed by looking only to the elements of mail

and securities fraud, see Blockburger v. United States, 284 U.S. 299, 304 (1932), but by

looking to the “reality of the facts presented,” which he submits demonstrate that the

crimes were not distinct, Appellant’s Br. 33.            Even if such an argument could be

reconciled with the Supreme Court’s rejection of a “same conduct” approach in favor of

Blockburger’s “same offense” inquiry, see United States v. Dixon, 509 U.S. 688, 704

(1993), the record does not support it here. A number of Nicholson’s fraudulent mailings

reached beyond the purchase or sale of securities, and his own plea allocution

acknowledged      that   he   maintained     the   securities   scheme   through   fraudulent

communications made by means other than the mails.

       Thus, his multiplicity challenge fails on the merits, and counsel cannot be deemed

constitutionally ineffective for failing to pursue it.

2.     Substantive Reasonableness

       In challenging the substantive reasonableness of his 40-year prison sentence,

Nicholson confronts the significant hurdle of his plea agreement waiver of the right to

appeal any sentence less than 45 years. While Nicholson advances various arguments for

not enforcing this waiver, we need not address them here because he fails, in any event, to



waived. See United States v. Broce, 488 U.S. 563, 575–76 (1989). That, however, is not
this case.

                                               4
demonstrate that his within-Guidelines sentence fell outside the broad range of choices

available to the district court. See United States v. Cavera, 550 F.3d 180, 200 (2d Cir.

2008) (en banc) (“[F]or a sentence to be substantively unreasonable, it must fall outside the

‘broad range’ warranted by the totality of the circumstances.” (quoting United States v.

Jones, 531 F.3d 163, 174 (2d Cir. 2008))); United States v. Sero, 520 F.3d 187, 189 (2d Cir.

2008) (“We recognize that in the overwhelming majority of cases, a Guidelines sentence

will fall comfortably within the broad range of sentences that would be reasonable in the

particular circumstances.” (internal quotation marks omitted)).

       While Nicholson argues that his sentence affords too much weight to the

Guidelines’ loss calculations and too little weight to the need to avoid sentencing

disparities, the record is to the contrary. The district court specifically stated that it

viewed the loss Guidelines as only a “crude measure” of loss. Gov. Addendum 72.

Thus, in imposing sentence, it did not rely only on the $100 million total loss that triggered

Nicholson’s Guidelines enhancement, but also on its review of hundreds of victims’ letters,

and on the in-court statements of nine victims. It was this case-specific information that

put Nicholson’s crime in context, revealing the identified loss to have been sustained by

hundreds of individuals of modest means, many of whom lost their life savings. Further,

the district court considered that, as Nicholson’s scheme collapsed causing these losses, he

purchased a $25 million home in the Hamptons. Id. at 71. In sentencing Nicholson, the

district court acknowledged Nicholson’s favorable personal characteristics but explained


                                              5
that it kept “coming back to the victims,” observing that “there are very few crimes of this

magnitude that have inflicted this much pain.” Id. at 72, 76. It decided not to impose the

45-year sentence at the high end of Nicholson’s Guidelines range, as urged by the

government, in order to allow Nicholson “at least the hope of living the last years of his life

as a free man.” Id. at 75. But it concluded that a sentence less than 40 years “would be

inappropriate” both because “it would be unfair to the victims” and because “it would send

the wrong message” to others who might be tempted to engage in such fraud. Id. at 76.

       Such reasoning supports the challenged sentence, and Nicholson fails to

demonstrate otherwise by reference to any similarly situated comparators. See United

States v. Fernandez, 443 F.3d 19, 31–32 (2d Cir. 2006) (noting that sentencing statute

“mandates that sentencing judges take into account ‘unwarranted sentence disparities

among defendants with similar records who have been found guilty of similar conduct’”

(emphasis added by Fernandez) (quoting 18 U.S.C. § 3553(a)(6))); see also United States

v. Coppola, 671 F.3d 220, 254 (2d Cir. 2012) (stating that § 3553(a)(6) “is only one of

several factors that must be weighted and balanced and how the factor is weighed is a

matter firmly committed to the discretion of the sentencing judge” (internal quotation

marks omitted)). Thus, we conclude that Nicholson’s reasonableness challenge to his

sentence fails on the merits.




                                              6
3.     Conclusion

       We have considered Nicholson’s remaining arguments, including those in his

supplemental pro se submission, and conclude that they either fall outside the scope of this

court’s certificate of appealability, which we decline to expand, or are without merit.

Accordingly, the judgments of the district court are AFFIRMED.

                                   FOR THE COURT:
                                   CATHERINE O’HAGAN WOLFE, Clerk of Court




                                             7
