United States v. Reiner

United States Court of Appeals
For the First Circuit

No. 06-1451

UNITED STATES,

Appellee,

v.

GARY H. REINER,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. D. Brock Hornby, U.S. District Judge]

Before

Lynch, Circuit Judge,

John R. Gibson, Senior Circuit Judge*

and Howard, Circuit Judge.

James E. McCall was on brief for appellant.
F. Mark Terison, Senior Litigation Counsel, with whom Paula D.
Silsby, United States Attorney, was on brief for appellee.

August 20, 2007

*
Of the United States Court of Appeals for the Eighth Circuit,
sitting by designation.
 JOHN R. GIBSON, Circuit Judge. Gary H. Reiner appeals

his four count conviction for interstate travel to promote

prostitution, 18 U.S.C. § 1952 (the Travel Act); inducement to

interstate travel to engage in prostitution, 18 U.S.C. § 2422(a)

(the Mann Act); conspiracy to violate the Travel Act and the Mann

Act, 18 U.S.C. § 371; and conspiracy to launder money, 18 U.S.C. §§

1956(h) and 1957. Reiner argues that (1) the district court erred

in refusing to hold a Franks1 hearing concerning omissions in the

affidavit supporting the search warrant; (2) the district court

erred in denying Reiner's motion for a mistrial following

prejudicial testimony; (3) the district court miscalculated

Reiner's base offense level under the sentencing guidelines; and

(4) the district court erred in ordering forfeiture. We affirm.

Reiner was the attorney for Kittery Health Club, Inc.,

doing business as The Danish Health Club, Inc. ("DHC"), in Kittery,

Maine. The DHC advertised itself as a massage parlor for men, but

in reality it offered sexual services in exchange for money.

Reiner performed legal services for the DHC's original owner, Leo

Manzoli, dating back to 1990. Leo Manzoli died in 1996, and Joel

Lehrer, a business associate of his, took over the day to day

operations of the DHC. Following Leo Manzoli's death, his wife,

Mary Ann Manzoli ("Manzoli"), also took a more active role in the

business. Joel Lehrer died in 2001, and some time thereafter

1
Franks v. Delaware, 438 U.S. 154 (1978).

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Reiner became a co-trustee of K & D Realty Trust, which owned the

property used by the DHC. Susan Lehrer, Joel Lehrer's widow, began

to run the DHC in 2001, but was later relieved of her

responsibilities by Reiner. Reiner then ran the DHC between 2001

and 2004. In 2001, Reiner hired Russell Pallas, a former police

officer, to manage the front desk, and Reiner filled in for Pallas

on occasion. Reiner was responsible for all personnel decisions

concerning the female masseuses and handled the financial aspects

of the business. In late 2003 and early 2004, the DHC ran

advertisements in Xtreme Magazine, an adult periodical, and in the

adult section of two alternative newspapers, the Portland Phoenix

and the Boston Phoenix. Reiner was responsible for the content of

the advertisements.

On June 9, 2004, authorities executed a search warrant at

the DHC. Rodney Giguere, a Special Agent with the Internal Revenue

Service, prepared a thirty-five page affidavit in support of the

search warrant. The affidavit relied upon (1) police reports and

reports by the Federal Bureau of Investigation detailing

investigations of the club; (2) statements by several confidential

witnesses concerning occurrences of prostitution at the DHC; (3)

the adult advertisements placed by Reiner; (4) an internet search

by another IRS agent that revealed detailed descriptions of sexual

encounters at the DHC; and (4) reports as well as a first-hand

account of extensive visual surveillance conducted by the FBI.

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During the search authorities found numerous condoms located

throughout the club. They also found a customer of the club on a

massage table wearing a condom and a towel.

A grand jury indicted Reiner on April 27, 2005. Reiner

filed a motion to suppress, which the district court denied.

United States v. Reiner, 382 F. Supp. 2d 195 (D. Me. 2005). At

Reiner's trial, the jury heard testimony from Pallas, who testified

pursuant to a plea agreement with the government. At one point

during his testimony, when asked about surveillance at the DHC,

Pallas stated that he recalled a particular conversation with

Reiner in which Reiner explained that he had learned of the

surveillance by the FBI; it was apparently based upon complaints of

under-age girls at the club. The defense objected immediately to

Pallas's testimony and moved for a mistrial, which the district

court denied. The district court instead struck the testimony from

the record and gave a curative instruction. On September 30, 2005,

the jury returned guilty verdicts.

In its presentence report, the probation office

calculated a base offense level of nineteen. Reiner's violations

provide for an original base offense level of fourteen under

U.S.S.G. § 2G1.1(a), with a five level increase pursuant to

U.S.S.G. § 2G1.1(d)(1) since the offense involved multiple victims.

The presentence report calculated a total offense level of twenty-

eight and a criminal history category of I, resulting in a

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guidelines range for imprisonment of seventy-eight to ninety-seven

months.

At his sentencing hearing, Reiner did not object to the

presentence report's adjustment for multiple victims, but did

object to its adjustments for Reiner's leadership role in the

organization, the involvement of a minor, and obstruction of

justice for false testimony. Reiner also objected to the

presentence report's asset calculation. The district court

rejected the presentence report's adjustments for the involvement

of a minor and for false testimony, resulting in a total offense

level of twenty-four and a subsequent guideline range of fifty-one

to sixty-three months. The district court sentenced Reiner to

sixty months’ imprisonment. The district court also determined

that Reiner was responsible for $3,927,392.40 in proceeds to the

DHC from the illegal activity described in counts I and II. On

March 2, 2006, the district court ordered forfeiture in the amount

of $3,927,392.40 as a money judgment. Reiner now brings the

present appeal.

I.

Reiner argues that the district court violated his Fourth

Amendment rights by refusing to hold a Franks hearing and denying

his motion to suppress evidence seized during the search of the

DHC.

We review the denial of a Franks hearing for clear error.

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United States v. Nelson-Rodriguez, 319 F.3d 12, 34 (1st Cir. 2003).

A defendant is entitled to an evidentiary hearing under Franks

where the defendant "makes a substantial preliminary showing" that

both (1) "a false statement knowingly and intentionally, or with

reckless disregard for the truth, was included by the affiant in

the warrant affidavit" and (2) "the allegedly false statement is

necessary to the finding of probable cause." Franks v. Delaware,

438 U.S. 154, 155-56 (1978). Omission of a material fact from the

affidavit supporting a warrant is sufficient to trigger a Franks

hearing. United States v. Castillo, 287 F.3d 21, 25 (1st Cir.

2002). In the case of an omission, "suppression should be ordered

only if the warrant application, . . . clarified by disclosure of

previously withheld material, no longer demonstrates probable

cause." United States v. Stewart, 337 F.3d 103, 105 (1st Cir.

2003). Therefore, Reiner must make "a substantial preliminary

showing" that, considering the previously withheld material,

Giguere's affidavit fails to demonstrate probable cause, Franks,

438 U.S. at 155-56, and that the district court's denial of his

motion was clearly erroneous.

Reiner claims, and the government concedes, that

Giguere's affidavit omitted decades-old information concerning

previous investigations of the DHC by authorities. Specifically,

Giguere's affidavit neglected to explain that previous

investigations occurring in the 1980s and 1990s failed to result in

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any prosecution or conviction of individuals associated with the

DHC. Contrary to Reiner's argument, however, the previously

withheld information does nothing to alter whether Giguere's

affidavit demonstrates probable cause. The district court, because

of concerns regarding staleness, examined "whether probable cause

existed by looking primarily at the most recent relevant

information and then the other information in the context of the

contemporaneous information." United States v. Reiner, 382 F.

Supp. 2d 195, 197-98 (D. Me. 2005). The district court, therefore,

relied primarily on the adult advertisements run by the DHC in 2003

and 2004, statements by confidential informants, the extensive cash

deposits by the DHC through 2003, and the interstate nature of the

DHC's business in its determination that probable cause existed.

Thus, the omitted information was irrelevant, and the district

court did not commit clear error in refraining from ordering a

Franks hearing on the basis of such information. See United States

v. Rivera-Rosario, 300 F.3d 1, 20 (1st Cir. 1986) (holding that

because the information omitted from the affidavit "was immaterial

to the investigation," there was no error in denying defendant's

motion for a Franks hearing).

Ironically, after contending that the affidavit was

misleading for failing to include material from the 1980s and

1990s, Reiner next argues that the information contained in the

affidavit was stale and therefore could not support a showing of

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probable cause. Specifically, Reiner attacks the district court's

reliance upon information from confidential informants detailing

activity at the DHC between 2000 and 2002, which he claims is too

old.

Probable cause to issue a search warrant exists when

"given all the circumstances set forth in the affidavit . . . there

is a fair probability that contraband or evidence of a crime will

be found in a particular place." Illinois v. Gates, 462 U.S. 213,

238 (1983). "In determining the sufficiency of an affidavit

supporting a search warrant, we consider whether the 'totality of

the circumstances' stated in the affidavit demonstrates probable

cause to search the premises." United States v. Beckett, 321 F.3d

26, 31 (1st Cir. 2003). Factors to be considered in determining

whether an affidavit is stale include "the nature of the criminal

activity under investigation and the nature of what is being

sought." United States v. Dauphinee, 538 F.2d 1, 5 (1st Cir.

1976).

In this case, especially in light of the nature of the

criminal activity and the contraband sought, the affidavit did not

suffer from staleness. Illicit prostitution operating under the

guise of a legal and long-running business is precisely the type of

criminal enterprise that would most likely be unchanged over the

course of several years. Evidence cited by the affidavit that was

two to three years old was overwhelming in this case and more than

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sufficient to establish probable cause. The information provided

by confidential informants concerning illicit activity at the club

between 2000 and 2002, corroboration of such activity through

surveillance, an online description in 2000 of prostitution,

extensive cash deposits through 2003, and the placement of adult

advertising in 2003 and 2004 are all consistent with a prostitution

ring of long duration. While "no hard and fast rule can be

formulated as to what constitutes excessive remoteness," id., we

conclude that the district court was correct in disregarding

investigations by authorities dating from the 1980s and 1990s, and

instead relying on the more recent evidence submitted in the

affidavit.

II.

Next, Reiner argues that the district court erred in

denying his motion for a mistrial following Pallas’s statement

regarding suspicions by authorities of under-age girls at the DHC.

We review the denial of a motion for mistrial for an abuse of

discretion. United States v. Flecha-Maldonado, 373 F.3d 170, 177

(1st Cir. 2004). As is the case here, whenever "a curative

instruction is promptly given, a mistrial is warranted only in rare

circumstances implying extreme prejudice." United States v.

Torres, 162 F.3d 6, 12 (1st Cir. 1998).

Reiner contends that the testimony offered by Pallas was

especially prejudicial in light of information given by juror

-9-
nineteen. During voir dire, juror nineteen disclosed that she was

close to two individuals who had suffered from sexual abuse. When

asked whether her experiences would affect her impartiality, she

stated the following:

I can tell you [that with] prostitution I have a clean
slate, but with the sexual abuse, I don't know if it
would bring up emotions that I hadn't planned on . . . .
It might very well cause a problem just in the fact that
it will stir up old emotions, feelings, and thoughts that
have been laying [sic] there for a long time.

Reiner cites two cases in his argument that Pallas's

statement was so inflammatory that a mistrial was warranted even in

light of the curative instruction given by the district court.

First, Reiner relies on United States v. Fulmer, 108 F.3d 1486,

1497-98 (1st Cir. 1997), where we held that admission of statements

by an FBI agent as well as the prosecutor concerning the Oklahoma

City bombing constituted reversible error because the bombing was

unrelated to the defendant's alleged conduct. Second, Reiner

relies on United States v. Lehder-Rivas, 955 F.2d 1510 (11th Cir.

1992). In that case, the court held that admission of evidence

that the defendant planned to mark packages of cocaine with

swastikas constituted an abuse of discretion. Id. at 1518. The

court, however, then held that the swastika testimony was harmless

beyond a reasonable doubt. Id. at 1518-19.

Even considering juror nineteen's answers at voir dire,

neither of these cases provides much support for Reiner's

contention that the district court erred in refusing to declare a

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mistrial. Both cases involved extensive testimony of a highly

inflammatory nature that was only tangentially related to the

charges faced by the defendants. As well, in neither case did the

district court strike the testimony or give a curative instruction.

In this case, however, Pallas testified to one statement Reiner

allegedly made that authorities suspected there were under-age

girls at the DHC, which the district court immediately struck.

There is no reason to believe that an isolated comment by Pallas

about under-age girls constitutes the kind of "extreme prejudice,"

Torres, 162 F.3d at 12, that would warrant a mistrial. The

district court gave an appropriate and prompt curative instruction,

which we presume all jurors will follow. See United States v.

Sepulveda, 15 F.3d 1161, 1185 (1st Cir. 1993). Reiner has not

rebutted that presumption, and we conclude that the district court

did not abuse its discretion in denying his motion for a mistrial.

III.

Reiner raises two issues concerning his sentence. First,

Reiner contests the district court's calculation of his base

offense level. Because Reiner did not previously object to the

district court's calculation of multiple victims, we review the

district court's finding for plain error. See United States v.

Terry, 240 F.3d 65, 72-73 (1st Cir. 2001).

Reiner cites United States v. Camuti, 950 F.2d 72 (1st

Cir. 1991), to argue that because there was no evidence that Reiner

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himself transported any of the victims at the DHC, the five-level

increase to his base offense level is clearly erroneous. This

argument is without merit. In Camuti, we held that providing

motivation for travel was insufficient to constitute an offense

involving the transportation of an individual, and therefore

insufficient to trigger the sentencing enhancement provided by

U.S.S.G. § 2G1.1(c) (1990). 950 F.2d at 77. Reiner's case,

however, is governed by the 2005 edition of the United States

Sentencing Guidelines Manual; considering the differences between

the two editions, the decision in Camuti is inapposite.2

In this case, Reiner should have received an enhancement

under the guidelines if "the offense involved more than one

victim." U.S.S.G. § 2G1.1(d) (2005). The commentary explains that

for the purpose of calculating multiple victims, "each person

transported, persuaded, induced, enticed, or coerced to engage in,

or travel to engage in, a commercial sex act or prohibited sexual

conduct is to be treated as a separate victim." U.S.S.G. § 2G1.1,

cmt. n.5 (emphasis added). Reviewing the evidence, we conclude

that the district court did not commit plain error in determining

that the offense involved five or more victims. Reiner ran the

2
Typically, a sentencing court must use the edition of the
guidelines manual effective on the date of sentencing. See United
States v. Harotunian, 920 F.2d 1040, 1041-42 (1st Cir. 1990)
("Barring any ex post facto problem, a defendant is to be punished
according to the guidelines in effect at the time of sentencing.");
U.S.S.G. § 1B1.11.

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DHC, and there is ample evidence that most of the women involved in

the DHC either traveled or were transported, persuaded, induced, or

enticed for the purpose of engaging in a commercial sex act.3

Second, Reiner offers several arguments as to why his

sentence is unreasonable. First, he argues that, although his

sentence is within the guideline range, it is nevertheless

unreasonable because the district court failed to consider Reiner's

obligations to his family as well as his history as an "exceptional

person." Under United States v. Booker, 543 U.S. 220, 245-46, 259-

60 (2005), the district judge may adopt a non-guideline sentence

where appropriate in consideration of 18 U.S.C. § 3553(a) (2000).

Assuming that such factors are properly understood, our review of

the district court's judgment is deferential. See United States v.

Jiménez-Beltre, 440 F.3d 514, 519 (1st Cir. 2006) (en banc), cert.

denied, 127 S. Ct. 928 (2007).

In this case, the district court noted all of the

relevant circumstances concerning Reiner and his family. He

observed that Reiner's family "has confronted severe medical

issues." He also noted that "[i]t's a sad day when a pillar of the

community is sent to prison." The district court nevertheless

3
Reiner also contests the district court's conclusion
regarding his leadership role in the DHC. In light of Reiner's
extensive involvement with the DHC detailed thus far, we conclude
that the district court's determination was not clear error, see
United States v. Ventura, 353 F.3d 84, 89 (1st Cir. 2003), and
Reiner's argument is wholly without merit.

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chose to sentence Reiner to sixty months' imprisonment, stating

that such a sentence was necessary to achieve the objectives set

forth in 18 U.S.C. § 3553(a)(2)(A). Where, as here, there is "a

plausible explanation and a defensible overall result," we normally

respect the judgment of the district court as to whether to go

outside of the guidelines. Jiménez-Beltre, 440 F.3d at 519.

Considering all of the circumstances surrounding Reiner's case,

including his familial responsibilities and his previous history as

an upstanding citizen, we see no basis for disturbing the district

court's judgment.4

Reiner also argues that the district court's sentence is

unreasonable due to an unwarranted sentence disparity in light of

the six month sentence received by Pallas and the five years of

probation received by Manzoli. As Reiner acknowledges, however, we

have stated before that "the aim [of reducing unwarranted

disparity] was almost certainly a national uniformity focusing upon

a common standard." United States v. Saez, 444 F.3d 15, 18 (1st

Cir.) (emphasis in original), cert. denied, 127 S. Ct. 224 (2006).

Also problematic for Reiner is that, as the district

court noted, both Manzoli and Pallas accepted responsibility for

what they had done and then cooperated with the government.

4
Reiner also argues that the district court erred in refusing
to depart downward pursuant to U.S.S.G. § 5H1.6. Such a refusal to
depart, however, is not ordinarily reviewable by this court absent
a mistake of law. United States v. Melendez-Torres, 420 F.3d 45,
50-51 (1st Cir. 2005).

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Reiner, however, asserted both at trial and at his sentencing

hearing that he was not guilty of the charges against him. Reiner

cites our decision in United States v. Thurston, 456 F.3d 211 (1st

Cir. 2006), petition for cert. filed, No. 06-378 (Sept. 14, 2006),

to argue that he is still similarly situated to Pallas and Manzoli,

but his reliance is misplaced. In Thurston, we specifically noted

that a defendant who chooses to enter into a plea bargain is not

similarly situated to a defendant who contests the charges. Id. at

216-17. It is therefore not the case that the district court was

"required to reduce [the appellant's] sentence simply because

he—unlike the other defendants—chose to go to trial." United

States v. Navedo-Concepción, 450 F.3d 54, 60 (1st Cir. 2006).

Reiner argues that the district court's sentence violated

the parsimony principle—the statutory directive that sentences

ought to be no higher than is necessary to achieve the objectives

of sentencing. We have held before that it is "the rare case in

which a within-the-range sentence can be found to transgress the

parsimony principle." United States v. Turbides-Leonardo, 468 F.3d

34, 41 (1st Cir. 2006), cert. denied, 127 S. Ct. 3064 (2007). Upon

review of the sentencing transcript, it is evident that the

district court was careful in fashioning an appropriate sentence.

There is no basis for concluding that Reiner's sentence violates

the parsimony principle or is otherwise unreasonable.

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 IV.

Finally, Reiner contests the forfeiture award ordered by

the district court. We review questions of law de novo, but we

review mixed questions of fact and law for clear error. See United

States v. Ferrario-Pozzi, 368 F.3d 5, 8 (1st Cir. 2004).

Our analysis of Reiner's claim need not detain us long.

First, Reiner urges us to reconsider our holding in United States

v. Hurley, 63 F.3d 1 (1st Cir. 1995). In that case, we held that

the principle of finding members of a conspiracy substantively

liable for the foreseeable conduct of other members of the

conspiracy extended to forfeiture rules. Id. at 22. Reiner argues

that the district court erred by ordering him to pay the full value

of the DHC's proceeds when he never used or personally possessed

the money. However, regardless of the merits of Reiner's argument

that holding him vicariously liable for the total amount of the

conspiracy's windfall is unfair, we are bound by our decision in

Hurley. See United States v. Malouf, 466 F.3d 21, 26 (1st Cir.

2006) (noting that, except for circumstances not present here,

"newly constituted panels are bound by decisions of prior panels in

the same circuit"), cert. denied, 127 S. Ct. 1892 (2007).

Reiner also contests the district court's determination

that all of the DHC's proceeds were subject to forfeiture because

the entire enterprise functioned as nothing more than a front for

illegal prostitution. Reviewing the record, we conclude that the

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district court's determination regarding the nature of the DHC is

not clearly erroneous. The sole purpose of the DHC was

prostitution, and income derived from activities designed to

conceal the illegal nature of the enterprise are appropriately

subject to forfeiture.

V.

We affirm the judgment of the district court in all

respects.

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