United States v. David Hagen

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 09-5096

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v.

DAVID A. HAGEN, a/k/a Antonio Diez, a/k/a David DeFusco,

Defendant - Appellant.

Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. W. Earl Britt, Senior
District Judge. (3:08-cr-00093-WEB-2)

Argued: December 9, 2011 Decided: March 12, 2012

Before AGEE, DAVIS, and KEENAN, Circuit Judges.

Affirmed by unpublished opinion. Judge Davis wrote the opinion,
in which Judge Agee and Judge Keenan joined.

ARGUED: Philip Urofsky, SHEARMAN & STERLING, Washington, D.C.,
for Appellant. Amy Elizabeth Ray, OFFICE OF THE UNITED STATES
ATTORNEY, Asheville, North Carolina, for Appellee. ON BRIEF:
David A. Brown, Richard Lee Edwards, Assistant United States
Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Asheville, North
Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
DAVIS, Circuit Judge:

Following a jury trial in May 2009, Appellant David A.

Hagen was convicted of conspiracy to commit securities fraud, in

violation of 18 U.S.C. § 371 (“Count One”); conspiracy to commit

mail fraud and wire fraud, in violation of 18 U.S.C. § 1349

(“Count Two”); and conspiracy to commit money laundering, in

violation of 18 U.S.C. § 1956 (“Count Three”). The convictions

arose out of Hagen’s role in a so-called “pump-and-dump”

securities fraud scheme, in which he and his co-conspirators

acquired control of a company known as GTX Global, made

successful efforts to artificially increase its stock price, and

then sold the stock at a higher price, bringing in proceeds of

approximately $27 million. The district court imposed

consecutive sentences on each count of conviction summing to a

540-month term of imprisonment.

On appeal, Hagen contends that his convictions are tainted

by the district court’s erroneous refusal to appoint substitute

counsel to represent him (and to postpone the trial in

connection with the requested appointment of counsel) after his

relationship with his retained counsel deteriorated. He also

argues that the district court committed various errors at

sentencing, including a miscalculation of the total loss that

resulted from his offense behavior and an unreasonable failure

to depart (or vary) from the Guidelines sentencing range. Having

2
carefully examined Hagen’s contentions in the light of the

record presented to us, and for the reasons that follow, we

discern no reversible error; accordingly, we affirm the

judgment.

I.

A.

At the time of the proceedings in this case, Hagen was an

experienced financial fraud schemer, and the record suggests

that deep knowledge of his background informed both his retained

attorney’s and the district court’s handling of many of his pro

se filings, requests, objections, and assertions of unfairness.

Specifically, in 1990, Hagen was convicted of mail fraud and

conspiracy to commit mail and wire fraud in the United States

District Court for the Eastern District of Texas arising out of

a fraudulent time-share marketing operation. Also, in early 1990

he was convicted of money laundering and conspiracy to commit

bankruptcy fraud in the United States District Court for the

Eastern District of Virginia. He was sentenced to a total of 100

months in prison on those convictions. 1 Hagen was released from

federal prison in April 1997.

1
See United States v. DeFusco, 949 F.2d 114 (4th Cir. 1991)
(affirming conviction in E.D. Va.); United States v. DeFusco,
930 F.2d 413 (5th Cir. 1991) (affirming conviction in E.D.
Tex.); see also United States v. DeFusco, No. 94-6144, 1994 WL
396351 (4th Cir. Aug. 1, 1994) (unpublished order affirming
denial of relief under 28 U.S.C. § 2255).

3
 In January 2007, following an extensive investigation,

which included (among other techniques) interceptions of Hagen’s

telephone conversations with a co-defendant who was, unbeknownst

to Hagen, cooperating with the government, the FBI filed a

criminal complaint under seal charging Hagen with conspiracy to

commit securities fraud and conspiracy to commit money

laundering. The government’s allegations were that Hagen,

together with others, conducted a series of “pump-and-dump”

securities fraud schemes in which they would buy stock in a

company, make efforts to artificially increase its price, and

then sell the stock at the elevated price. At the time the

complaint was filed, Hagen had been living in the Bahamas since

in or about March 2006.

In September 2007, he returned to the United States from

the Bahamas, apparently in connection with an unsuccessful

effort to become a diplomat for the Southern African nation of

Swaziland and thereby avoid prosecution for potential criminal

offenses and/or execution on civil judgments that had been

entered against him. 2 Upon his arrival at JFK airport in New

2
At trial Hagen described his efforts to become a diplomat
for Swaziland as a way to secure “asset protection”: “if you
become a Consulate General of a Consulate of a diplomatic corps,
they can no longer come in and attach your bank accounts.” J.A.
1463. He also explained that he was “pursuing alternatives,
which would include . . . a camouflaged passport, which
basically gives you a new identity.” J.A. 1466.

4
York, he was arrested and detained. At the time, he had been

represented for some months (in connection with the government’s

investigation) by Kieran Shanahan, Esq., a North Carolina

attorney whom Hagen had retained. In due course, Shanahan

successfully negotiated a plea agreement with the government on

Hagen’s behalf and Hagen signed the plea agreement on October

22, 2007. The plea agreement called for Hagen’s cooperation with

the government’s ongoing investigation. Pursuant to the plea

agreement, Hagen and counsel met with government investigators

and prosecutors and Hagen made numerous disclosures and

admissions demonstrating his knowing involvement in the “pump-

and-dump” conspiracy. 3

3
A critical (and rather unusual) feature of the plea
agreement executed by Hagen provided that upon his breach of the
agreement, the government would be permitted to use against
Hagen “any and all information, in whatever form” Hagen had
provided to the government:

In any such prosecution, the prosecuting
authorities, whether federal, state, or local, shall
be free to use against him, without limitation, any
and all information, in whatever form, that he has
provided pursuant to his plea agreements or otherwise.
The defendant shall not assert any claim under the
United States Constitution, any statute, Fed.R.Crim.P.
11(f), Fed.R.Evid. 410, or any other provision of law,
to attempt to bar such use of the information. . . .

The defendant acknowledges that Federal Rule of
Criminal Procedure 11(f) and Federal Rule of Evidence
410 are rules which ordinarily limit the admissibility
of statements made by a defendant in the course of
plea discussions or plea proceedings if a guilty plea
is later withdrawn. The defendant knowingly and
(Continued)
5
 There followed several postponements of the scheduled

guilty plea proceedings, ostensibly due to defense counsel’s

scheduling conflicts. By December 2007, however, Hagen had

discharged Shanahan as his counsel upon Hagen’s learning that

Shanahan had worked as an Assistant United States Attorney in

the U.S. Attorney’s Office for the Eastern District of North

Carolina while Sam Currin, Esq., one of Hagen’s co-defendants,

served as the United States Attorney in that district. Shanahan

filed a motion to withdraw, which the district court granted on

December 4, 2007. That same day Steven Meier, Esq., whom Hagen’s

wife had retained, entered his general appearance. Hagen soon

decided not to go forward with his long-anticipated guilty plea.

Accordingly, a federal grand jury returned an indictment against

Hagen and others on April 23, 2008.

voluntarily waives the rights which arise under these
Rules. As a result of this waiver, he understands and
agrees that any statements which are made in the
course of his guilty plea or in connection with his
cooperation pursuant to this plea agreement will be
admissible against him for any purpose in any criminal
or civil proceeding if his guilty plea is subsequently
withdrawn.

S.J.A. 29, 31. After a hearing, the district court granted the
government’s motion in limine and admitted at trial Hagen’s
admissions of his knowing participation in the charged
conspiracies. Hagen does not challenge on appeal the district
court’s ruling in this regard.

6
 B.

In light of Hagen’s assertion that the combination of his

counsel’s lack of diligence and the district court’s

acquiescence in such deficient performance (by failing to

appoint successor counsel) denied Hagen a fair trial, we set

forth in some detail the pre-trial proceedings that took place

below.

A magistrate judge held an initial appearance on May 8,

2008, at which Attorney Meier asked to be heard on the issue of

his representation of Hagen. Meier explained that although Hagen

had paid a “not insubstantial retainer” to Meier’s firm, it had

been negotiated under the belief Hagen was likely to plead

guilty. According to Meier, because Hagen had declined to plead

guilty and had withdrawn his consent to, and declined to perform

his obligations under, the plea agreement, and because of the

complexity of the case and the large number of documents

involved, the retainer was going to “run short pretty quickly,”

and there was “some question” as to whether Hagen would have any

funds to pay Meier in that event, as Hagen’s funds had been

frozen as subject to forfeiture. Thus, Meier requested

permission to file an affidavit to demonstrate Hagen’s indigence

and explain the status of the retainer. The government did not

specifically oppose the request, but stated its “concern” that

“once someone has been paid a retainer, it’s difficult to be

7
appointed.” The magistrate judge stated that Meier could file

such an affidavit if he so wished. No such affidavit ever was

filed, however.

Approximately four weeks later, on June 3, 2008, the

magistrate judge conducted an arraignment, detention and bond

review hearing. S.J.A. 80-111. Meier again brought up the issue

of his representation of Hagen. He explained that he expected to

face “somewhere between 500,000 and upwards of 22 million pages

of discovery,” but had received only “partial payment” of his

retainer. S.J.A. 102. Meier asked for the magistrate judge’s

“guidance on that,” later clarifying that “ultimately” his

request was to be appointed as Hagen’s counsel under the

Criminal Justice Act (“CJA”), once the retainer Hagen had

previously paid had been exhausted. S.J.A. 103-04. Meier

recognized that such an appointment would be unusual, but stated

that given the “extraordinary amount of discovery” and the

likely need for investigators, expert witnesses, and

depositions, his representation of Hagen presented an

“extraordinary situation.” S.J.A. 104.

In response to these expressions of concern by Meier, the

magistrate judge explained that although appointing counsel who

had previously been retained would be a “great departure,” he

appreciated the situation in which Meier found himself. Thus, he

8
stated, “If you want to make a motion at some point, I’ll be

glad to address it.” S.J.A. 104, 110.

Meier never filed a motion to be appointed under the CJA as

Hagen’s counsel. Nor did Meier seek funds for investigative and

related services, as presumably he would have been entitled to

seek under 18 U.S.C. § 3006A(e)(1). 4 Indeed, during a telephone

conference with the presiding district judge on June 12, 2008,

no mention was made of the possibility that Meier might move to

be appointed or seek reimbursement for investigative and other

expenses. The parties and the court agreed to set May 4, 2009,

as a firm date for trial. Another nearly ten months went by,

during which Meier filed a number of pretrial motions on Hagen’s

behalf, including motions to suppress evidence, and he responded

to the government’s motions in limine, and during which the

4
Section 3006A(e)(1)(e) provides as follows for
investigative or other services:

Services other than counsel.--

(1) Upon request.--Counsel for a person who is
financially unable to obtain investigative, expert, or
other services necessary for adequate representation
may request them in an ex parte application. Upon
finding, after appropriate inquiry in an ex parte
proceeding, that the services are necessary and that
the person is financially unable to obtain them, the
court, or the United States magistrate judge if the
services are required in connection with a matter over
which he has jurisdiction, shall authorize counsel to
obtain the services.

18 U.S.C. § 3006A(e)(1).

9
grand jury returned a second superseding indictment on February

19, 2009.

On March 26, 2009, five and a half weeks before trial,

Hagen filed a pro se motion to discharge Meier. He lodged

numerous complaints regarding Meier’s representation, including

that Meier had not filed pre-trial motions that Hagen had

requested that he file; that he failed to “professionally

assess” Hagen’s “culpability” and “bargaining position”; that he

had not interviewed certain “relevant participants and

witnesses”; and that he had not filed a motion to suppress that

Hagen had requested that he file. Hagen explained that he had

prepared a “97-page Trial Guide” describing how he wished Meier

to proceed with “every aspect of the case,” but Meier had not

followed his instructions. J.A. 158. Thus, he requested that the

court permit him to proceed pro se, “[o]r, in the alternative .

. . in recognition of his indigence . . . appoint a suitable

defense counsel.” J.A. 165.

A few days later, Meier filed a motion to withdraw. In

light of Hagen’s motion to discharge Meier, Meier stated,

“various conflicts and irreconcilable differences have arisen

between counsel and Defendant making counsel’s continued

representation of Defendant impossible.” J.A. 170. Neither Meier

nor Hagen requested a continuance, however.

10
 The district court held a hearing on Hagen’s and Meier’s

motions on April 6, 2009, one month before the long-scheduled

trial date. The court addressed Hagen, stating, “obviously [you

and Meier] have some differences of opinion as to how best for

him to go about representing you,” although “that’s not

unusual.” J.A. 174. The court noted, however, “I don’t know what

the problems are between you and your lawyer.” Id. The court

explained to Hagen the perils of proceeding pro se, but

acknowledged, “if that’s what you want to do, you are entitled

to do it.” J.A. 176. Hagen responded by reiterating his

complaints about Meier’s representation. He then requested leave

to proceed pro se, although he acknowledged that preparing for

trial from detention in the local jail in this document-

intensive case would be extraordinarily difficult.

Alternatively, he requested that an attorney be appointed to

replace Meier, noting that he could no longer afford to pay an

attorney.

For his part, Meier explained to the court that the

retainer Hagen had paid would soon run out, but that he had

assured Hagen that he would “honor [his] commitment to represent

him regardless,” even knowing Hagen was unlikely to pay

subsequent costs. J.A. 179. The government, for its part, also

countered Hagen’s accusations against Meier, describing the

extensive work Meier had done on the case -- work of which Hagen

11
almost certainly was not aware -- including multiple exchanges

with the government about discovery, the law, and the facts.

Moreover, although Hagen had complained that Meier had not filed

a motion for discovery, the government explained there was no

need for such a defense motion because the government had

already “provided open file” discovery in the case. J.A. 187.

The district court stated, “I don’t want to get into a

swearing match between you [Hagen] and your lawyer and I’m not

going to do that.” J.A. 178. With respect to the witnesses Hagen

believed Meier should have subpoenaed, the court explained to

Hagen, “If you tell [Meier] to subpoena whatever witnesses to

come and testify on your behalf, he’ll do that.” Id. When Hagen

complained again that Meier’s performance had been inadequate,

the court stated, “That’s beyond the point. I’m not going to

continue this trial.” J.A. 181. “We’re going to start a month

from today one way or the other.” Id. “If I were to give you

another year, if I were to continue the case to give you longer

to be prepared, without any legal training you will not be able

to do it.” J.A. 182.

Hagen then reiterated his request, as an alternative to

proceeding pro se, that the court allow Meier to withdraw and

then appoint “somebody who will be competent in my

representation.” J.A. 183. In response, the court stated that

even “assuming” Hagen could prove that he was “now indigent,”

12
 [I]f I were to allow you to discharge Mr. Meier[,] . .
. appoint another lawyer and continue the case, it
would take six months for that lawyer to get up to
snuff and be ready for trial. Now, at the end of that
six months I’ll be having another motion before me by
David Hagen wanting another lawyer because that lawyer
too does not want to do it like you want it done. . .
. You’ve had two privately retained lawyers now that
you can’t get along with and you want the court to
appoint you a third one, and I’m not going to do it.
I’m going to deny the motion, both motions. You either
make peace with your lawyer or, Mr. Meier, when we go
to trial a month from today, if Mr. Hagen insists on
going pro se, you’ll be standby counsel.

Id. Meier reiterated his concern that Hagen’s complaints about

Meier’s performance had created an “extraordinary conflict of

interest,” but stated that even if Hagen were to proceed pro se,

he would be willing to serve as standby counsel and assist Hagen

with subpoenas and other “things of that nature.” J.A. 185.

Finally, the government expressed its opposition to Hagen’s

request to proceed pro se, because providing discovery to the

defendant while he was incarcerated in the Mecklenburg County

Jail would be “a huge logistical nightmare.” Id.

After engaging in an extended colloquy with Hagen to

confirm that his decision to proceed pro se was knowing and

voluntary, the court granted the request. The court denied

Hagen’s request for appointed counsel, largely because it would

be “impractical, impossible, and a travesty to this court’s time

and the efforts that have been put into this case over the last

two-and-a-half years to delay further the trial of this action,”

which the court concluded would have been necessary if it were
13
to appoint new counsel. J.A. 199-200. Importantly, the court

also denied Meier’s motion to withdraw. Rather, Meier was

instructed to remain as standby counsel, to continue to prepare

for trial, and “in terms of trial preparation” to “act on Mr.

Hagen’s orders.” J.A. 203.

When Hagen again argued that Meier had been ineffective,

the court stated, “I don’t know how much communication you and

he have, that’s between the two of you,” but did observe that

the government had represented that Meier had done “everything

any defense counsel would be doing up until this point.” J.A.

204. The court entered an order allowing Hagen to proceed pro se

at trial and instructing Meier to “continue preparing for trial

as if he were trying the case” and to “remain in the case as

standby counsel for trial to assist defendant if and when and to

the extent called upon by defendant.” J.A. 171A. Hagen filed a

motion for reconsideration, which the district court denied.

During a status hearing before a magistrate judge on April

23, 2009, a week and a half before the trial date, Meier

described the tasks he had undertaken on Hagen’s behalf. He had

offered to Hagen to have his office type any motions he wished

to file, “even to the extent that they reflect negatively upon

me.” J.A. 235. Notably, Meier explained he would be prepared for

trial, and had instructed his staff to accept any call from

Hagen. In addition, the government explained some of what it had

14
undertaken to do in order to address some of Hagen’s concerns.

For example, it had waived its usual policy of prohibiting

defense counsel from leaving discovery materials with defendants

who are detained, and had created binders of trial exhibits

which it sent to Meier to provide to Hagen. Hagen reiterated

some of his complaints about Meier’s representation but noted

that ever since the district judge granted the motion to proceed

pro se, “the cooperation did go way up,” and he was “comfortable

that we are now moving, at least, in a direction that I can at

least communicate with [Meier and his staff].” J.A. 261. “[N]ow

-- he is indeed, he is sending his person over, I spent about 2

hours a day with him the last three days.” Id. With respect to

Hagen’s difficulties preparing for trial without a private cell

or access to the prison library, the magistrate judge instructed

the Marshals Service to communicate to the Mecklenberg County

Jail that Hagen was going to trial in a week and would be

representing himself, and to instruct the jail “to make sure

that he’s getting adequate access to what he needs.” J.A. 277.

On May 4, 2009, the first day of trial, Hagen again

objected to “the unfair and unjust manner in which I’ve been

forced to proceed pro se” and requested a continuance. Id. The

district court explained that Hagen could, at any time before or

during the trial, ask Meier to step in to represent him,

although he could not “go back and forth.” J.A. 303. Hagen then

15
explained that he had decided to accept Meier’s representation,

though “under duress.” J.A. 305. He argued the court should not

force him to choose between proceeding with Meier and proceeding

pro se. But given what he saw as an “unconscionable” choice,

Hagen agreed to proceed represented by Meier. J.A. 311. The

court then heard argument on several motions in limine. Meier

made detailed arguments on each. Trial began the next day.

C.

Over the course of the two-week trial, Meier gave an

opening statement and vigorously cross-examined the government’s

witnesses, including investigating agents, cooperating co-

conspirators, and an expert on securities trading. He also

conducted a direct examination of Hagen that took several hours,

made a number of arguments about jury instructions, and gave an

extensive and detailed closing argument. Indeed, after the jury

retired to deliberate, the district court commended counsel for

both parties “for the very professional way in which [they]

carried out [their] duties” and for being “well versed” in the

facts and the law. S.J.A. 434. The court specifically commended

Meier for his grasp of complex questions of stock trading and

his cross-examination of the government’s expert witness.

1.

Briefly summarized, the evidence at trial showed the

following. Hagen owned a company known as Gatelinx Corporation

16
that was working to develop software for secure online video

communications. Gatelinx, in turn, owned another company that

marketed satellite television subscriptions for Direct TV and

employed 90 to 100 people in a call center. Gatelinx’s revenue

was almost entirely derived from those marketing operations, as

Hagen admitted at trial. In 2004, Gatelinx’s contract with

Direct TV was terminated. Gatelinx was left without a revenue

stream, and began to “run out of money”; Hagen “could see the

end coming” for Gatelinx. J.A. 1212, 1389.

Hagen started looking for other sources of revenue. In late

2004, one of Hagen’s co-conspirators, Howell Woltz, proposed a

reverse merger between Gatelinx and a publicly held shell

company called autoleasecheck.com, which was listed through Pink

Sheets, an electronic quotation system that displays quotes from

broker dealers for certain “over-the-counter” securities. This

would allow Gatelinx to sell shares to the public but avoid many

of the disclosure requirements that apply to initial public

offerings. Hagen and Woltz executed the reverse merger and

renamed the merged company GTX Global Corp. (“GTX Global” or

“GTX”). At that point, Hagen and his co-conspirators controlled

approximately 91.4 percent of the company’s 31,150,000

outstanding shares of stock, or approximately 28.5 million

shares, which they held through several offshore companies.

17
 Eventually, Hagen and his co-conspirators agreed on a plan

to begin selling GTX shares to the public through Canadian

brokerage firms and fraudulently “pump” up the stock price and

trading volume by engaging in a fraudulent promotional campaign.

Their goal was to drive the stock price from $4 to over $20 and

then to “dump” the stock, keeping the proceeds. They began the

promotional campaign in October 2005, primarily by creating

websites that fraudulently touted the company’s business

prospects and misstated the company’s financial condition. For

example, one press release described GTX Global as a

“[f]inancially stable company with strong balance sheet,” “an

established leader in direct response marketing, with average

annual sales over $12 million, de[ri]ved primarily from sales of

residential satellite television services,” which was “utilizing

these marketing capabilities to launch proprietary patented

video conferencing software technology,” on which it held

“numerous patents.” J.A. 597-99. The release continued, “By the

end of 2007, sales are expected to hit nearly [$]360 million,

with earnings of [$]64 million.” J.A. 600. In reality, although

the company had begun developing software for online video

communications, the company did not own any patents, had not

completed development of any software, had no customers, and,

having lost the Direct TV contract, had no revenue. At times,

the company did not even have funds to pay its electric bill.

18
 The conspirators also issued press releases designed to

mislead the public into believing that Hagen, who (as previously

mentioned) had twice previously been convicted of federal fraud

felonies, was not involved in the management of the company, and

that no one person controlled more than 5 percent of the

company’s stock. In addition, one of GTX’s lead software

developers had stolen a copy of the code for the software the

company had been developing. Hagen and the others decided not to

disclose that theft to investors. Moreover, throughout this

period, Hagen and his co-conspirators took steps to avoid

detection of the scheme, including by working to prevent the

price from rising “too fast, because it would attract regulatory

attention.” J.A. 591.

In the months before the promotional campaign began in

October 2005, no shares of the company had been traded. During

the “pump” phase of the scheme, the trading volume skyrocketed,

up to 500,000 shares per day, as did the share price, up to $10

per share in December 2005. Within two months, the conspirators

sold over half of their holdings, or a total of approximately 14

million shares. By August 2006 Hagen and the others had sold

approximately 19 million GTX shares to the public, generating

proceeds of between $32 and $35 million. Although they re-

invested approximately $2 million in the company, the remaining

proceeds went into the “pocket[s]” of Hagen and his co-

19
conspirators. J.A. 554. Hagen’s percentage share of the proceeds

was 22.4 percent. Approximately $27.6 million of the

approximately $32 to $35 million they had derived from the sale

of GTX stock were wired from the Canadian brokerage firms to

bank accounts in the Bahamas, Curacao, Panama and Cyprus, among

other places, that were held by Hagen and his co-conspirators.

The promotional campaign continued until in or about June

2006. By mid-August 2006, the share price dropped to

approximately $1, and continued to drop after that. One investor

testified that on February 13, 2006, he bought 1,000 shares for

$7.09 per share, shares he sold later, just to get them “off the

paperwork,” for 0.06 cents per share. J.A. 1099. Another

investor testified that on June 9, 2006, having read the

promotional materials, he bought 3,000 shares of GTX stock at

$3.31 per share. By the time of Hagen’s trial, the entire

investment -- all 3,000 shares -- was worth just 75 cents. The

stock price had dropped to just 0.025 cents per share. 5

2.

After the two-week trial, and after deliberating for

thirty-three minutes, the jury returned guilty verdicts on all

counts: conspiracy to commit securities fraud; conspiracy to

5
By that time the company had changed its name again, this
time to Vision Technology Corporation. That company filed for
bankruptcy in February 2007.

20
commit mail fraud and wire fraud; and conspiracy to commit money

laundering. After the jury returned the verdicts, the district

court instructed the jury to deliberate on a requested special

forfeiture verdict. The jury was instructed to determine “the

amount of money representing the criminally derived proceeds, if

any, which the defendant himself received directly and/or which

he received indirectly, due to the reasonably foreseeable

conduct of his co-conspirators.” J.A. 1768. The court defined

this amount as “property that the defendant and other

conspirators would not have received, but for their involvement

in the conspiracy.” Id. The jury found this amount to be $27.6

million.

D.

The court held a sentencing hearing on November 2, 2009.

The primary issue at sentencing was the amount of loss caused by

the fraud. The probation officer who prepared the Pre-Sentence

Report (“PSR”) determined that an upward adjustment for a loss

more than $20 million should apply, resulting in a 22-level

upward adjustment. The basis for that upward adjustment was the

jury’s finding that the proceeds received as a result of the

conspiracies were $27.6 million. Hagen objected, contending the

correct loss amount for Guidelines purposes was $15,160.38,

corresponding to just a 4-level upward adjustment. The district

court overruled Hagen’s objection, and adopted the PSR’s

21
recommendation of a 22-level increase based on loss. The court

also concluded that the offenses of conviction were to be

grouped for Sentencing Guidelines purposes, and applied the

Guidelines section applicable to money laundering offenses,

which was the Guideline that carried the sentence with the

longest term of imprisonment: life. Having calculated the

advisory Guidelines ranges, the district court imposed terms of

imprisonment of five years on Count One, twenty years on count

Two, and twenty years on Count Three, each corresponding to the

statutory maximum on each count and to be served consecutively,

for a total of forty-five years in prison.

E.

Hagen timely appealed. On appeal, he argues he is entitled

to a new trial for two reasons: because the district court

should have appointed counsel and permitted Meier to withdraw,

and in any event because the court should have granted a

continuance to permit Hagen to fully prepare a pro se defense.

Alternatively, he seeks a re-sentencing, for two reasons:

because the district court applied the Guideline for money

laundering convictions rather than the Guideline for mail fraud

convictions, and because the district court erred in calculating

the loss attributable to the stock fraud scheme. As we explain

within, we reject each of these contentions.

22
 II.

Hagen’s first argument on appeal is that the district court

abused its discretion in denying his motion to discharge his

privately retained lawyer, Meier, and to replace him with a

court-appointed lawyer. He argues he was entitled to appointment

of counsel both by virtue of the Sixth Amendment right to

adequate representation and the Criminal Justice Act, 18 U.S.C.

§ 3006A. For the following reasons, we hold the district court

did not abuse its discretion in denying Hagen’s motion. 6

A.

We first consider Hagen’s claim under the Sixth Amendment,

which provides that “[i]n all criminal prosecutions, the accused

shall enjoy the right ... to have the Assistance of Counsel for

his defence.” U.S. Const. amend. VI. In cases where a district

court has denied a request by a defendant to replace one court-

appointed lawyer with another court-appointed lawyer, we

consider three factors to determine whether the initial

appointment “ceased to constitute Sixth Amendment assistance of

counsel”: “(1) the timeliness of the motion; (2) the adequacy of

the court’s subsequent inquiry; and (3) ‘whether the

6
Although prior to trial Hagen also requested to proceed
pro se, immediately before trial he elected to re-assert his
right to counsel and have his attorney represent him at trial.
Thus, on appeal we are not faced with a denial of a defendant’s
right to proceed pro se, and Hagen does not so contend.

23
attorney/client conflict was so great that it had resulted in

total lack of communication preventing an adequate defense.’”

United States v. Smith, 640 F.3d 580, 588 (4th Cir. 2011)

(quoting United States v. Gallop, 838 F.2d 105, 108 (4th Cir.

1988)).

In United States v. Mullen, 32 F.3d 891 (4th Cir. 1994), we

applied those same factors in an appeal, after a jury verdict of

guilty, from the denial of a request to substitute retained

counsel with appointed counsel. In Mullen, there had been a

total breakdown in attorney-client communications that made “an

adequate defense unlikely had [the retained lawyer] handled the

trial,” and the defendant’s request had been timely made and

accompanied by a financial affidavit demonstrating eligibility

for court-appointed counsel. Id. at 897. Moreover, the request

to substitute counsel was Mullen’s first, and the request was

denied largely because the government had forgotten to take the

steps necessary to arrange a hearing earlier than the first day

of trial. Id. at 896-98. Under those circumstances, we held the

district court had abused its discretion by not appointing a

lawyer to replace the one Mullen had retained, and remanded the

case for the appointment of a new lawyer and a new trial. Id. at

897-98.

Here, Hagen argues the three factors weigh in favor of our

finding an abuse of discretion. We disagree. We assume without

24
deciding that Hagen’s request was timely made, although we note

the district court was entitled to consider the complexity of

the case in deciding whether granting the request would have

“obstruct[ed] orderly judicial procedure” and deprived the court

of “the exercise of [its] inherent power to control the

administration of justice.” Id. at 895.

We next examine the adequacy of the district court’s

inquiry into the bases for the motion. Although the district

court’s questioning of Meier with respect to his trial

preparations and the level of communication between him and

Hagen could have been more probing, we conclude the court’s

extensive dialogue with the parties and counsel, considered in

its totality, satisfied the court’s duty to evaluate the reasons

for Hagen’s motion. The court also indicated that it had read

and considered Hagen’s motion, which set forth the factual bases

for his request in great detail. See United States v. Reevey,

364 F.3d 151, 157 (4th Cir. 2004) (concluding the district

court’s inquiry into the basis for the motion was sufficient

when the court was informed of counsels’ consultations with

Reevey and was assured that attorneys were ready for trial).

In addition, the district court concluded, albeit

implicitly, that Hagen’s request was at least in part a

“transparent ploy for delay,” which the Supreme Court has held

is a proper basis for denying a request for change in counsel.

25
Morris v. Slappy, 461 U.S. 1, 13 (1983) (holding that the

district court “could reasonably have concluded that

respondent’s belated requests [for change of counsel] were not

made in good faith but were a transparent ploy for delay”); see

also Gallop, 838 F.2d at 108 (“A request for change in counsel

cannot be considered justifiable if it proceeds from a

transparent plot to bring about delay.”). Appointing counsel

would have required delaying the trial for months, which in the

court’s view would have been “a travesty” not only to “th[e]

court’s time” but also to the “efforts that have been put into

this case [by Hagen’s counsel] over the last two-and-a-half

years.” J.A. 199-200. The court believed, and not without

reason, that, even if the court were to appoint counsel and

postpone the trial, Hagen was likely to file another motion

shortly before the new trial date, complaining about the new

lawyer’s performance and “wanting another lawyer.” J.A. 183.

Although the district court could have been more explicit

in finding that Hagen’s request was a ploy for delay, the record

and the surrounding circumstances make clear that the district

court so found. Hagen had been granted multiple opportunities to

air his grievances about his representation in open court over

the course of the year before trial. The district court, at

times with the assistance of a magistrate judge, had conducted a

series of extensive pre-trial hearings involving Hagen’s

26
periodic complaints about Meier’s representation. Moreover, the

court would have been justified in taking into account (as it

surely did) the nature of the charges Hagen was facing, Hagen’s

familiarity with the federal criminal justice system, and

importantly, the fact that Hagen’s aborted guilty plea

negotiations had resulted in the execution by Hagen of a written

plea agreement and the court’s earlier ruling admitting the

numerous oral admissions by Hagen of his knowing and willful

participation in the “pump-and-dump” scheme at the root of the

prosecution. The above circumstance no doubt accounts in large

measure for the fact that the jury deliberated for less than an

hour after a two-week trial. For these reasons, we conclude the

district court’s inquiry into the reasons for Hagen’s request

for appointed counsel was adequate.

In assessing the third factor, we consider whether the

breakdown in communications was “so great” that it precluded the

presentation of an adequate defense. Mullen, 32 F.3d at 895.

Hagen focuses on the breakdown in communications that

precipitated the motion for Meier’s discharge, arguing there was

little or no communication between him and Meier between July

2008 and February 2009. The record reveals, however, that in

this period, Meier filed two pre-trial motions to suppress and

responded appropriately to the government’s motions in limine.

Moreover, Hagen acknowledged that Meier consulted with him on

27
several occasions. Although Hagen believed other motions should

have been filed, his disagreement with his attorney’s trial

strategies and tactics does not constitute a communication

breakdown sufficient to warrant the substitution of counsel.

United States v. Johnson, 114 F.3d 435, 443-44 (4th Cir. 1997).

Indeed, the court’s finding that communications between

Hagen and Meier were not impeding Hagen’s defense was confirmed

by subsequent events: by the day trial was to start, Hagen

expressed that the “cooperation” between them had gone “way up,”

and he was “comfortable that we are now moving, at least, in a

direction that I can at least communicate with [Meier and his

staff].” J.A. 261. As we have explained, “A total lack of

communication simply does not exist where the attorney and the

client communicate significantly during trial.” United States v.

DeTemple, 162 F.3d 279, 288-89 (4th Cir. 1998). Accordingly, on

this record, we cannot say that the lack of communication was so

serious as to impact the adequacy of Meier’s pre-trial

preparation. For these reasons, we hold the district court did

not abuse its discretion in denying the motion to discharge

Meier and to replace him with a court-appointed attorney.

B.

Independent of the three-part inquiry, Hagen argues he was

entitled to appointed counsel by virtue of the Criminal Justice

Act itself, which provides that, “[i]f at any stage of the

28
proceedings, including an appeal, the United States magistrate

judge or the court finds that the person is financially unable

to pay counsel whom he had retained, it may appoint counsel as

provided in subsection (b) and authorize payment as provided in

subsection (d), as the interests of justice may dictate.” 18

U.S.C. § 3006A(c). Hagen argues that by declining to determine

whether he was “financially unable to pay counsel,” the district

court abused its discretion.

We disagree, because § 3006A(c) expressly incorporates a

discretionary aspect into the analysis it requires. Even if a

person is financially eligible for such “mid-case appointment,”

United States v. Rivera-Corona, 618 F.3d 976, 981 (9th Cir.

2010), the Act does not mandate that the district court appoint

counsel. Rather, the district court “may” appoint counsel, and

only “as the interests of justice may dictate.” 18 U.S.C. §

3006A(c). Here, for the same reasons as those discussed above,

the district court was entitled, within its discretion, to find

that appointing counsel to represent Hagen was not dictated by

“the interests of justice.”

The two cases Hagen cites are unavailing. In Rivera-Corona,

the district court failed to advise the defendant, who had

retained a lawyer and pled guilty, that he had a right to be

represented by counsel at sentencing. 618 F.3d at 977. When the

defendant asked to withdraw his guilty plea and be appointed

29
counsel, the district court “summarily reject[ed]” the

defendant’s request for appointed counsel to replace retained

counsel “simply because of the expense and the stage of the

proceedings.” Id. at 981. The Ninth Circuit held that “requiring

a retained counsel to continue to represent the defendant even

if the defendant cannot pay him and no longer wants him . . . is

no substitute for appointed counsel paid with public funds and

so could not, without more, be in the ‘interests of justice.’”

Id. at 982 (emphasis added).

The problem for Hagen is that here, there is “more,” most

notably indicia that the request was a ploy for delay, and

evidence concerning Meier’s performance as counsel. This is not

a case where a judge “summarily decide[d]” that a defendant was

not eligible for appointed counsel “merely because he has

previously retained an attorney,” or rejected a request for

appointed counsel in part based on the “public expense” such an

appointment would incur. Cf. id. at 978, 982. Nor is this a

case, as apparently Rivera-Corona was, where a retained lawyer

attempted to “influence the defendant’s litigation choices by

expressing an intention to seek fees from relatives or friends.”

Id. at 982. Rather, Meier had apparently recognized that he

likely would never be paid beyond the initial retainer, but

nonetheless committed (as required by widely applicable

professional norms) to represent Hagen through trial, and

30
proceeded to conduct a full and vigorous defense. Those

considerations, among others, render the district court’s denial

of his request a proper exercise of its discretion.

The other case Hagen relies upon, United States v. Parker,

439 F.3d 81 (2d Cir. 2006), is also unavailing. There, the

Second Circuit considered whether the district court had erred

in determining that the defendant was financially ineligible for

CJA counsel. The court held the district court had made an

“appropriate inquiry” into the defendant’s financial

eligibility, and had not clearly erred in determining that

Parker had sufficient income to render him financially

ineligible. Id. at 93-99. This finding made an analysis of the

“interests of justice” unnecessary, because “a finding of

financial eligibility is a necessary (although not sufficient)

condition for mid-case appointment under the Act.” Id. at 99

(emphasis added). Here, the question is a different one:

whether, even assuming the defendant was financially eligible,

the district court abused its discretion in finding that the

appointment of counsel was not dictated by the interests of

justice. The Parker court acknowledged that in some cases the

answer to that question can be “no.” This is such a case.

Our holding does not mean, of course, that a defendant’s

financial eligibility is irrelevant to whether a district court

should, in the appropriate case, appoint counsel even if a

31
defendant had previously retained counsel. To the contrary: if

the “interests of justice” do not weigh against mid-case

appointment of counsel in a particular case at a particular

time, then a defendant may request, and a district court may

grant, appointment of counsel under 18 U.S.C. § 3006A(c).

Moreover, the exercise of that discretion is subject to

constraints. In the appropriate case, such as if there were no

or few considerations weighing against mid-case appointment, or

if a district court were to “summarily decide” that a defendant

was not eligible for appointed counsel “merely because he has

previously retained an attorney,” see Rivera-Corona, 618 F.3d at

978-82, then perhaps (though we need not decide now) a district

court’s failure to consider a defendant’s financial eligibility

could constitute an abuse of discretion. In any event, it could

not be clearer here that the district court did not abuse its

discretion.

III.

Hagen further assigns error to the district court’s denial

of his motion for a continuance in order to (1) allow appointed

counsel to prepare for trial or (2) allow Hagen to prepare a pro

se defense. The district court’s denial of a continuance is

reviewed for abuse of discretion. United States v. Williams, 445

F.3d 724, 739 (4th Cir. 2006). A trial court abuses its

32
discretion when its denial of a motion for continuance is an

“unreasoning and arbitrary insistence upon expeditiousness in

the face of a justifiable request for delay.” Morris, 461 U.S.

at 11-12 (internal quotation marks omitted). Moreover, even if a

defendant demonstrates that the district court abused its

discretion in denying a motion for a continuance, the defendant

must show that the ruling “specifically prejudiced” his case in

order to prevail. United States v. Hedgepeth, 418 F.3d 411, 419

(4th Cir. 2005).

To the extent Hagen argues a continuance was warranted for

appointment of counsel, the district court did not abuse its

discretion for the reasons stated above. To the extent he argues

he should have been given time to prepare for his pro se

representation at trial, even assuming without deciding that the

district court abused its discretion, this claim fails. Prior to

jury selection, Hagen agreed to allow Meier to handle the

defense. Because Hagen’s pro se representation at trial never

came to pass, we discern no prejudice resulting from the denial

of the requested continuance for additional preparation time.

IV.

We now turn to Hagen’s claims of procedural sentencing

error. In reviewing the district court’s calculations under the

Guidelines, “we review the district court’s legal conclusions de

33
novo and its factual findings for clear error.” United States v.

Manigan, 592 F.3d 621, 626 (4th Cir. 2010) (internal quotation

marks omitted).

A.

The Sentencing Guidelines provide that if a defendant is

convicted of multiple counts “involving substantially the same

harm,” U.S.S.G. § 3D1.2, the counts “shall be grouped together,”

with the Guidelines range applicable to the group being the one

for “the most serious of the counts comprising the Group, i.e.,

the highest offense level of the counts in the Group.” Id. §

3D1.3. The district court here adopted the PSR’s recommendation

to group the three counts of which Hagen was convicted --

conspiracy to commit securities fraud, conspiracy to commit mail

and wire fraud, and conspiracy to commit money laundering. On

appeal, Hagen does not challenge the decision to group the

offenses. Nor does he challenge the district court’s calculation

of the Guidelines range for each offense, nor its conclusion

that the highest offense level was on the money laundering

count, for which the Guidelines recommend a life sentence.

Rather, he argues that, after calculating the advisory

imprisonment range for each offense, the district court erred in

applying the money laundering offense level as the one

applicable to the group, because Hagen’s conduct “fell outside

the ‘heartland’ of money laundering.” Appellant’s Br. at 26. He

34
argues the district court should have instead applied the

offense level for securities fraud, which, all else equal, would

have generated a Guidelines range of 324 to 405 months.

Despite the severity of the advisory imprisonment range on

the money laundering count, Hagen’s argument fails. The

Guidelines are clear that when the advisory term of imprisonment

on one count is higher than the advisory term on other counts in

a “Group” the offense level for the group is the highest offense

level of the counts in the Group. U.S.S.G. § 3D1.3. Prior to

2000, the Guidelines provided that “[i]f, in an atypical case,

the guideline section indicated for the statute of conviction is

inappropriate because of the particular conduct involved, use

the guideline section most applicable to the nature of the

offense conduct charged in the count of which the defendant was

convicted.” See United States Sentencing Commission, Guidelines

Manual, Appendix A at 417, introductory cmt. (1998); see also

United States v. Smith, 186 F.3d 290, 297 (3d Cir. 1999)

(applying the “atypical case” analysis to grouped counts that

included a money laundering count). In 2000, however, the

Guidelines were amended to eliminate that analysis. See

Amendment 591 (“clarify[ing]” that “the sentencing court must

apply the offense guideline referenced in the Statutory Index

for the statute of conviction” unless a defendant has stipulated

a more serious offense). Indeed, in 2001 the Third Circuit

35
confirmed that the Amendment rendered the “atypical case”

analysis, and therefore the test in Smith, “no longer good law.”

United States v. Diaz, 245 F.3d 294, 303 (3d Cir. 2001). The

court continued: “[S]entencing courts may not conduct an inquiry

into the heartland of § 2S1.1 and courts have no discretion to

decide that the money laundering guideline is inappropriate or

not the most applicable guideline on the facts of a given case.”

Id. Therefore, the district court correctly chose U.S.S.G. §

2S1.1 as the starting point for calculating Hagen’s offense

level under the Guidelines.

B.

Hagen’s next challenge to his sentence is that the district

court erred in calculating the loss attributable to the conduct

for which he was convicted. As stated above, the district court

applied a 22-level upward adjustment to Hagen’s sentence based

on a finding that the loss resulting from the fraud was over $20

million.

The Guidelines instruct that for a defendant convicted of

fraud, the offense level should be adjusted upward to varying

degrees depending on the amount of “loss.” U.S.S.G. §

2B1.1(b)(1). District courts are instructed to apply either

“actual loss” or “intended loss,” whichever is greater. Id. §

2B1.1, cmt. n.3(C). “Actual loss” is defined as “the reasonably

foreseeable pecuniary harm that resulted from the offense.” Id.

36
§ 2B1.1, cmt. n.3(A). “Intended loss” is defined as “the

pecuniary harm that was intended to result from the offense.”

Id. Whether using actual or intended loss, a district court

“need only make a reasonable estimate of the loss.” Id. § 2B1.1,

cmt. n.3(C). In cases involving equity securities, the

“reduction” in such securities’ value “that resulted from the

offense” is relevant to calculating the amount of loss. Id.

Moreover, if both actual loss and intended loss “reasonably

cannot be determined,” then courts “shall use the gain that

resulted from the offense as an alternative measure of loss.”

Id. § 2B1.1(b)(a), cmt. n.3(B).

The government argued at sentencing that $27.6 million, the

amount the jury found constituted the “criminally derived

proceeds,” was a proper measure of loss for three reasons.

First, it argued that GTX Global was “an essentially worthless

company,” and thus the entire amount investors lost from their

investments in the company was caused by the fraud. J.A. 1805.

Second, it argued that even if GTX was not a “worthless company”

and even if other factors contributed to the drop in the value

of its stock, the 22-level increase in the Guidelines applies to

any losses greater than $20 million, and the evidence showed by

a preponderance that at least $20 million in losses were caused

by the defendants’ conduct. Third, it argued that, regardless of

investors’ actual losses, the district court could calculate

37
loss based on “intended loss,” and Hagen and his co-conspirators

intended to bilk investors of between $80 million and $142

million. J.A. 1806. As evidence of “intended loss” the

government relied upon an October 26, 2005, handwritten

agreement between Hagen and two of his co-conspirators, Mark

Brecher and Jeremy Jaynes, describing the two “phases” of the

planned fraud, each 30 days long. In Phase I, they intended to

sell 12 million GTX shares at $4 to $8 each, and during Phrase

II they intended to sell another 4.5 million shares at $8 to $12

each. Thus, the government argued, they intended to take in

between $84 million and $150 million.

Hagen disputed, and continues to dispute, each of those

assertions. First he argues the company was not “worthless” and

in fact had substantial assets, in the form of technology it had

developed, physical infrastructure, and revenue. Second, he

argues, because the company was not “worthless,” the district

court was required to (1) disaggregate the amount investors lost

from the residual value they retained after the fraud was

disclosed, and (2) to further disaggregate the amount investors

lost between how much of their total loss was caused by the

fraud and how much was caused by other factors. Only the amount

investors actually lost, and lost because of the fraud, could

constitute “the reasonably foreseeable pecuniary harm that

resulted from the offense” under U.S.S.G. § 2B1.1, cmt.

38
n.3(A)(i). Hagen also argues that any reliance on “intended”

loss was speculative and therefore not a “reasonable estimate of

the loss.” Further, he argues, the alternative of using “the

gain that resulted from the offense” would be improper because

the amount of loss is not such that it “reasonably cannot be

determined.” See id. § 2B1.1(b)(a), cmt. n.3(B). We should

remand, he argues, for the district court to conduct the proper

fact-finding and calculations.

Having fully reviewed the trial proceedings and sentencing

hearing, we conclude the district court did not err in declining

to disaggregate the amount investors lost from the residual

value of their shares. The jury found that the defendants

obtained proceeds of $27.6 million, and there was undisputed

evidence at trial that once the fraudulent scheme was made

public, the value of the shares dropped essentially to zero. The

evidence thus clearly showed that investors lost the entire

amount they put into the company, i.e., the proceeds from the

stock sales.

As to the question whether a material portion of the

investors’ losses was caused by factors other than the fraud, we

also conclude the district court did not clearly err. As stated,

the “actual loss” for Guidelines purposes is limited to the loss

that “resulted from the offense,” U.S.S.G. § 2B1.1(b)(1), cmt.

n.3(A), and therefore only losses caused by the fraud may be

39
attributed to Hagen for Guidelines purposes. The record amply

supported the district court’s conclusion that the fraud

perpetrated by Hagen and his co-conspirators caused at least $20

million of the $27.6 million loss suffered by investors. Within

a short period of time after the fraud was disclosed, GTX stock

became essentially worthless, less than $0.01 per share. Hagen’s

argument that general market decline in 2006 and 2007

contributed to a substantial portion of this decrease in value

is untenable on this record. Thus, the district court did not

clearly err in determining that the loss caused by the

defendants’ fraud was at least $20 million. Having made that

factual finding, the district court did not err in applying the

22-level enhancement called for by U.S.S.G. § 2B1.1(b)(1)(L),

which applies to losses greater than $20 million.

The cases upon which Hagen relies do not support his

argument for resentencing. In United States v. Olis, 429 F.3d

540, 545 (5th Cir. 2005), although the court vacated a sentence

due to the district court’s failure to exclude from the loss

calculation the effects of “extrinsic factors” on the stock’s

decline in price, it noted that, “[i]n cases where defendants

promoted worthless stock in worthless companies,” a district

court would properly calculate the amount of loss caused by a

fraudulent scheme as “the entire amount raised by the schemes.”

Id. at 546-48. Here, the district court did not clearly err in

40
determining that GTX was a “worthless compan[y]” at the time the

defendants sold GTX stock to investors, and therefore at least

$20 million of the funds raised by the schemes constitute the

loss caused by the fraud.

Similarly, in United States v. Rutkoske, 506 F.3d 170 (2d

Cir. 2007), unlike here, there was no suggestion that the

defendant “‘promoted worthless stock in worthless companies,’

which would [have] justif[ied] attributing the entire loss

amount to Rutkosky’s fraud.” Id. at 180 n.4 (quoting Olis, 429

F.3d at 546). Moreover, the court observed that “cases might

arise where share price drops so quickly and so extensively

immediately upon disclosure of a fraud that the difference

between pre- and post-disclosure share prices is a reasonable

estimate of loss caused by the fraud.” Id. at 179. This is such

a case, for the reasons explained above. And while the court

observed that even in such cases “a coincidentally precipitous

decline in shares of comparable companies would merit

consideration,” id., here the evidence supported the district

court’s finding that the amount of loss caused by the fraud was

at least $20 million, the threshold for the 22-level

enhancement. See United States v. Ebbers, 458 F.3d 110, 128 (2d

Cir. 2006) (affirming former WorldCom CEO’s sentence for

securities fraud because, even if some portion of the loss may

have been caused by factors other than the fraud, “no reasonable

41
calculation of loss to investors” would have brought the loss

amount below the $100 million threshold for the 26-level

enhancement that applied).

For these reasons, the district court’s determination of

the actual loss caused by the fraud and attributable to Hagen

was not clearly erroneous, and therefore supported the district

court’s application of a 22-level upward adjustment of Hagen’s

offense level. 7

V.

For the reasons set forth in this opinion, the judgment is

AFFIRMED.

7
Because the actual loss supported the district court’s
application of the 22-level adjustment, we need not address the
government’s alternative arguments that the sentence was
supported by the “intended loss” and/or by the “gain that
resulted from the offense.”

42