10-3945-cr(L)11-4040-cr (Con)
United States v. Butler
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 Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of
New York, on the 23rd day of October, two thousand twelve.
PRESENT:
GERARD E. LYNCH,
CHRISTOPHER F. DRONEY,
Circuit Judges.*
____________________________________________________________
UNITED STATES OF AMERICA,
Appellee,
v. Nos. 11-3945-cr (L)
11-4040-cr (Con)
ERIC BUTLER,
Defendant-Appellant.
___________________________________________________________
FOR APPELLANTS: YVONNE SHIVERS, Levitt & Kaizer, New York,
New York, for Eric Butler.
*
The Honorable Raymond J. Lohier, originally a member of the panel, recused
himself shortly before or argument. The two remaining members of the panel, who are in
agreement, have determined the matter. See 28 U.S.C. § 46(d); 2d Cir. IOP E(b); cf.
United States v. Desimone, 140 F.3d 457 (2d Cir. 1998).
FOR APPELLEES: DANIEL A. SPECTOR, Assistant United States Attorney
(Peter A. Norling, John P. Nowak, Assistant United States
Attorneys, on the brief), for Loretta E. Lynch, United States
Attorney for the Eastern District of New York, Brooklyn,
New York, for Appellee.
UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
In 2009, Defendant-Appellant Eric Butler and a co-conspirator were convicted by
jury of one count of securities fraud and one count each of conspiracy to commit
securities and wire fraud. The United States District Court for the Eastern District of
New York (Jack B. Weinstein, J.) sentenced Butler principally to a term of five years of
imprisonment, with the sentence stayed pending appeal. A panel of this court affirmed
the conspiracy convictions, see United States v. Tzolov, 642 F.3d 314 (2d Cir. 2011), and
Butler’s sentence, see United States v. Tzolov, 435 F. App’x 15 (2d Cir. 2011), but
vacated the wire fraud conviction on the basis of improper venue, see 642 F.3d at 318-19,
and remanded for resentencing. On remand, Butler waived his objection to venue and
pled guilty to securities fraud and seven counts of wire fraud. The district court held a
new hearing, after which it once again sentenced Butler to five years of imprisonment.
Butler now appeals his new sentence. We assume familiarity with the facts of Butler’s
criminal conduct, which are detailed more fully in the panel’s original opinion. See 642
F.3d at 314-18.
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Butler argues first that based on newly available evidence, this Court should
overrule the original appellate panel’s approval of the district court’s use of Butler’s gain
as a substitute for loss in calculating the Guidelines range for his sentence. Under
U.S.S.G. § 2B1.1 cmt. 3(A), only loss that is either intended or foreseeable qualifies as
loss. U.S.S.G. § 2B1.1 cmt. 3(B) permits the perpetrator’s gain to stand in for loss when
“there is a loss but it reasonably cannot be determined.” Thus, Butler argues, if there is
no actual or intended loss, gain is not a proper substitute, since it is not true that “there is
a loss” within the meaning of the Guidelines. Here, the district court found that Butler
did not intend a loss, so if the new evidence demonstrates that no actual loss was
foreseeable as a result of Butler’s conduct, neither loss nor gain may factor into his
Guidelines calculation.
This argument faces several hurdles, the most basic of which is that the original
panel already rejected essentially the same argument. See 434 F. App’x at 16. Under the
law of the case doctrine, this panel will stand by that decision unless moved by “cogent
and compelling reasons such as an intervening change of controlling law, the availability
of new evidence, or the need to correct a clear error or prevent manifest injustice.”
United States v. Quintieri, 306 F.3d 1217, 1230 (2d Cir. 2002) (internal quotation marks
omitted). The purportedly new evidence upon which Butler relies – which, read in the
light most favorable to him, suggests that even sophisticated players did not fully
understand the risks in the housing market in 2006 – does not meet that exacting standard.
Butler manifestly placed his victims at risk of loss by lying about the type of securities he
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was purchasing on their behalf. Butler told clients that he was purchasing securities
created from government-guaranteed student loans, when in fact he was purchasing
instruments tied to the housing market, in which loans were not government-guaranteed.
Both the district court and the prior panel found that his victims’ losses were foreseeable,
and Butler’s evidence, even if credited, does not call that finding into question. We
therefore decline to reconsider our earlier ruling.
Butler’s second argument is that the district court did not appreciate his extensive
post-sentencing rehabilitation efforts when, on remand, it sentenced him again to a five-
year term of imprisonment. This argument is also meritless. Although we do not
question Butler’s newly reflective attitude toward his criminal conduct or the steps he has
taken to help children in his community, he presents no evidence that the district court
failed to consider these facts in violation of its duties under 18 U.S.C. § 3553(a). Indeed,
the district court’s approach to the resentencing – including hearing live testimony from
Butler, his attorney, and four witnesses on the subject of his rehabilitation – was laudably
thorough. Despite Butler’s displeasure with the district court’s weighing of the § 3553(a)
factors, there is no basis for us to conclude that the district court’s below-Guidelines
sentence, which also included seven new additional counts of wire fraud, was
procedurally or substantively unreasonable. Pepper v. United States, 131 S. Ct. 1229
(2011), is not to the contrary. That decision held that a court may consider
post-conviction rehabilitation, which the district court did amply in this case, but did not
hold that a lesser sentence is required after such consideration. Id. at 1249 n.17.
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We have considered all of appellant’s arguments and found them without merit.
Accordingly, the judgment of the district court is AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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