author: LIPEZ, Circuit Judge.

text:
    UNITED STATES of America, Appellee, v. Sirewl COX, Defendant, Appellant.
    No. 14-1033
    United States Court of Appeals, First Circuit.
    March 20, 2017

      Leslie Feldman-Rumpler, Boston, MA, for appellant.
    Ryan M. DiSantis, Assistant United States Attorney, with whom Carmen M. Ortiz, United States Attorney, was on brief, for appellee.
    Before HOWARD, Chief Judge, SELYA and LIPEZ, Circuit Judges.
   LIPEZ, Circuit Judge.

Between 2006 and 2008, Sirewl Cox — a real estate developer, agent, and broker— orchestrated a mortgage fraud scheme in Massachusetts. After his scheme was exposed, Cox was charged with multiple counts of bank and wire fraud and money laundering. A jury subsequently found Cox guilty on some of the charged counts, and he was sentenced to a below-guidelines term of 150 months of imprisonment.

Cox now appeals his sentence on both procedural and substantive grounds. Specifically, he raises a flurry of objections related to the district court’s use of uncharged and acquitted conduct to calculate his Guidelines Sentencing Range, and further contends that the length of his sentence was substantively unreasonable. Cox also challenges the district court’s statutory authority to order the forfeiture of assets related to uncharged relevant conduct, an issue of first impression in this circuit. For the following reasons, we affirm.

I. Factual Background

We provide here only a brief synopsis of the essential facts of this case, reserving additional detail for the analysis that follows.

To carry out his fraudulent scheme, Cox recruited nominal or “straw” buyers to purchase multi-family “triple-decker” homes for sale. Once Cox had control of the buildings, he would perform a “triple-decker flip” — that is, he would split the properties into condominium units and then sell those units to individual buyers, paying off the mortgages on the buildings with the proceeds. Cox promised the straw buyers a portion of the profits from the sale of condominium units.

To persuade people to purchase these units, Cox and his associates told potential buyers that they would help arrange mortgage financing for the deals. Cox also promised the buyers that they would not need to put down any of their own money for the purchase. Instead, Cox generally paid the buyers a cash “incentive fee” to purchase the condominium units. Once a buyer agreed to purchase a unit, Cox used his understanding of the mortgage industry to make the otherwise unqualified buyers appear eligible for loans. Specifically, Cox submitted false information — such as the purchase price of the properties, borrower income, borrower assets, intent to occupy the unit, down payments, and cash paid by borrowers at closing — to mortgage lenders.

Once these unqualified buyers received preliminary approval for loans, Cox worked with an associate, Rebecca Kon-sevick — who acted as both a real estate agent on building sales to straw buyers and a closing agent on unit sales — to close the deals. During the closing process, Cox had Konsevick submit additional false information to lenders. Cox further told Konsevick how to disperse the proceeds from the sale between himself, the straw buyers, or one' of Cox’s business entities.

In 2011, a federal grand jury in the District of Massachusetts returned a sixteen-count indictment charging Cox with wire and bank fraud, in violation of 18 U.S.C. §§ 1843 and 1344, and unlawful monetary transactions, in violation of 18 U.S.C. § 1957. Four triple-decker flips formed the basis of the counts in the indictment: the Roxton, River, Stanwood, and 111 Fuller properties.

After a twelve-day trial, a jury found Cox guilty on eight of the sixteen counts in the indictment: Counts One through Four (wire fraud), Counts Six, Seven, and Nine (bank fraud), and Count Eleven (unlawful monetary transaction). Cox was found not guilty on seven counts: Count Five (wire fraud), Counts Eight and Ten (bank fraud), and Counts Twelve, Thirteen, Fourteen, and Sixteen (unlawful monetary transactions).

The Probation Office subsequently prepared and issued a Presentence Investigation Report (“PSR”)- The PSR concluded that Cox’s total offense level was 37, his Criminal History Category (“CHC”) was III, and his Guidelines Sentence Range (“GSR”) was 262-327 months. The PSR’s calculation of Cox’s total offense level and GSR was based, among other information, on both the convicted and acquitted conduct related to the four triple-decker flips identified in the indictment, as well as on uncharged conduct related to seven additional triple-decker flips. Cox raised several objections to the PSR’s conclusions, including the use of acquitted and uncharged conduct in the GSR calculation.

At sentencing, the district court adopted the PSR’s base offense level calculation, but found that the GSR of 262-327 months was longer than necessary to satisfy the goals of sentencing as specified -by 18 U.S.C. § 3553(a). The court thus imposed a below-Guidelines term of 150 months. The court also entered an order of forfeiture in the amount of $2,966,344.37. Cox now appeals both his sentence and the forfeiture amount.

II. Standard of Review

“We review sentencing decisions imposed under the advisory Guidelines, whether outside or inside the applicable GSR, for reasonableness.” United States v. Pantojas-Cruz, 800 F.3d 54, 58 (1st Cir. 2015). This review occurs in two phases. See Gall v. United States, 552 U.S. 38, 51, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007). First, we “examine whether the district court committed any procedural missteps.” United States v. Rossignol, 780 F.3d 475, 477 (1st Cir. 2015). Such missteps include “failing to calculate (or improperly calculating) the Guidelines range, treating the Guidelines as mandatory, failing to consider the § 3553(a) factors, selecting a sentence based on clearly erroneous facts, or failing, to adequately explain the chosen sentence — including an explanation for any deviation from the Guidelines range.” Gall, 552 U.S. at 51, 128 S.Ct. 586. “We have described our abuse of discretion standard in this context as ‘multifaceted,’ as we apply clear error review to factual findings, de novo review to interpretations and applications of the guidelines, and abuse of discretion review to judgment calls.” United States v. Nieves-Mercado, 847 F.3d 37, 42 (1st Cir. 2017). Where a defendant failed to object in the district court on the ground asserted on appeal, however, we review only for plain error. United States v. Ruiz-Huertas, 792 F.3d 223, 226 (1st Cir. 2015).

In the second phase of our review, we appraise the substantive reasonableness of the sentence, “tak[ing] into account the totality of the circumstances, including the extent of any variance from the Guidelines range.” United States v. Bermúdez-Meléndez, 827 F.3d 160, 163 (1st Cir. 2016) (alteration in original) (quoting Gall, 552 U.S. at 51, 128 S.Ct. 586). “In determining substantive reasonableness, substantial respect is due to the sentencing court’s discretion.” Bermúdez-Meléndez, 827 F.3d at 163. This deferential approach recognizes that although “[a] sentencing court is under a mandate to consider a myriad of relevant factors, ... the weighting of those factors is largely within the court’s informed discretion.” United States v. Clogston, 662 F.3d 588, 593 (1st Cir. 2011). Our review demands only “a plausible sentencing rationale and a defensible result.” United States v. Martin, 520 F.3d 87, 96 (1st Cir. 2008). Hence, “we limit our review to the question of whether the sentence, in light of the totality of the circumstances, resides within the expansive universe of reasonable sentences.” United States v. King, 741 F.3d 305, 308 (1st Cir. 2014).

III. Procedural Reasonableness

Cox makes a multi-pronged attack on the district court’s calculation of the advisory GSR, objecting to the district court’s finding of facts by a preponderance of the evidence, as well as the imposition of three sentencing enhancements that significantly increased his GSR. We address each argument in turn.

A. Preponderance of the Evidence Standard

Cox contends that the district court’s finding of facts at sentencing by a preponderance of the evidence — -rather than under a reasonable doubt standard— violated his Fifth Amendment right to due process and his Sixth Amendment right to trial by jury. Our law, however, is to the contrary: the preponderance-of-the-evidence baseline for considering sentencing facts has long been established in this circuit. See United States v. Lombard, 72 F.3d 170, 175-76 (1st Cir. 1995). Indeed, as Cox acknowledges, we have previously considered, and rejected, arguments that the Fifth Amendment’s Due Process Clause and the Sixth Amendment right to a jury trial prohibit the finding of sentencing facts by a preponderance of the evidence. See, e.g., United States v. Munyenyezi, 781 F.3d 532, 544 (1st Cir. 2015) (“[A] judge can find facts for sentencing purposes by a preponderance of the evidence, so long as those facts do not affect either the statutory minimum or the statutory maximum.” (citations omitted)); see also United States v. Watts, 519 U.S. 148, 156, 117 S.Ct. 633, 136 L.Ed.2d 554 (1997). In short, the district court properly applied the preponderance of the evidence standard to its fact-finding at sentencing.

B. Sentencing Enhancements

Cox’s procedural objections are based on the district court’s application of three Guidelines sentencing enhancements under U.S.S.G. § 2B1.1: a two-level enhancement for deriving gross receipts of more than $1,000,000 from one or more financial institutions, see § 2Bl.l(b)(16)(A); a two-level enhancement for an offense involving ten or more victims, see § 2B1.1(b)(2)(A); and a twenty-level enhancement for engendering losses of more than $7,000,000, see § 2Bl.l(b)(l)(K). Cox argues that the district court’s misapplication of these enhancements resulted in either a six or eight-level increase in his total offense level. At the core of Cox’s objection to each of these enhancements, however, is a single contention: that the district court relied, in part, on uncharged or acquitted conduct that lacked adequate evidentiary support to be considered relevant conduct under the Guidelines.

Under § 2B1.1, a defendant’s offense level is increased both on the basis of the conduct for which he was convicted and on the basis of the “relevant conduct” for which he is found responsible by a preponderance of the evidence. See United States v. Pennue, 770 F.3d 985, 992-93 (1st Cir. 2014). The Guidelines define “relevant conduct” as:

(A) all acts and omissions committed, aided, abetted, counseled, commanded, induced, procured, or willfully caused by the defendant ] ...
that occurred during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense.

U.S.S.G. § 1B1.3(a)(1); see also United States v. St. Hill, 768 F.3d 33, 34 (1st Cir. 2014). Relevant conduct may include both acquitted and uncharged conduct. See United States v. Watts, 519 U.S. 148, 152-53, 117 S.Ct. 633, 136 L.Ed.2d 554 (1997); United States v. DeSimone, 699 F.3d 113, 128 (1st Cir. 2012) (“A court ‘may consider acquitted conduct in determining the applicability vel non of a sentencing enhancement. ...’ ” (quoting United States v. Paneto, 661 F.3d 709, 715 (1st Cir. 2011))); see also St. Hill, 768 F.3d at 37 (“[T]o be ‘relevant conduct,’ uncharged conduct must be connected to the offense of conviction.”).

In the context of an. extended scheme, uncharged and acquitted conduct is “relevant conduct” if it is part of the same “course of conduct or common scheme or plan” as the conduct underlying the counts of conviction. United States v. Eisom, 585 F.3d 552, 557 (1st Cir. 2009) (discussing U.S.S.G. §§ 1B1.3 and 3D1.2(d)). A district court’s finding on the scope of a particular scheme “represents a practical, real-world assessment of probabilities, based on the totality of proven circumstances.” Id. (quoting United States v. Sklar, 920 F.2d 107, 111 (1st Cir. 1990)). The court’s finding that uncharged or acquitted conduct is part of a common course of conduct, scheme, or plan, is reviewed for clear error. Sklar, 920 F.2d at 110-11.

Furthermore, we have repeatedly held that a district court may rely on a PSR’s relevant conduct determinations absent specific, supported challenges to its recommendations. As we have explained:

“Generally, a PSR bears sufficient indi-cia of reliability to permit the district court to rely on it at sentencing.” The defendant is free to challenge any assertions in the PSR with countervailing evidence or proffers, in which case the district court is obliged to resolve any genuine and material dispute on the merits. But if the defendant’s objections to the PSR are merely rhetorical and unsupported by countervailing proof, the district court is entitled to rely on the facts in the PSR.

United States v. Cyr, 337 F.3d 96, 100 (1st Cir. 2003) (quoting United States v. Taylor, 277 F.3d 721, 724 (5th Cir. 2001)); see also United States v. Acevedo, 824 F.3d 179, 184 (1st Cir. 2016); United States v. Olivero, 552 F.3d 34, 40 (1st Cir. 2009).

Here, Cox contends that the district court erred by simply adopting the PSR’s sentencing recommendations without specific factual findings regarding each relevant conduct transaction. Indeed, on appeal, Cox now asserts that neither the Probation Office nor the district court ever reviewed any of the voluminous sentencing materials filed by the government. The record is to the contrary.

The initial PSR, dated January 2, 2013, listed Cox’s total offense level as 37 and his GSR as 262-327 months based on all relevant conduct attributable to Cox. However, Cox made no specific objections to the factual basis for the PSR’s relevant conduct determination. Instead, Cox made the following general objection to the PSR’s list of relevant conduct transactions:

The defendant objects to this paragraph in its entirety. The report provides no factual basis for the [sic] supporting the statement, “the fraudulent ' property transactions in which Cox has been implicated [sic] are detailed below.” The chart lists properties which were the basis for Counts on which Mr. Cox was acquitted. Mr. Cox objects to the inclusion of acquitted Counts in the loss calculation. It lists other properties, purported “relevant conduct,” though not so identified, for which no evidence is offered to prove Mr. Cox was even involved in the sale of the properties, much less that there was fraud involved, and that he participated in the fraud. It appears the prosecution simply burdened Probation with an offense conduct narrative, devoid of factual specifics or substantiating documentation, vitiating Probation’s ability to conduct an independent review of the offense conduct, as required by F. R. Crim. P. 32.

(second alteration in original). In addition to filing its own objections to the PSR, the government subsequently filed a binder on August 16, 2013, labeled “Supporting Documents for Loss Calculation,” which contained a chart calculating the loss the government alleged was caused by Cox’s scheme, as well as more than 300 pages of registry of deeds documents supporting the chart’s calculations.

The revised PSR, issued on August 21, 2013, addressed the parties’ objections. In responding to Cox’s objection to the factual basis for the PSR’s loss calculation, it stated:

When computing a loss calculation, it is proper to include all of the loss (charged conduct, acquitted conduct, and relevant conduct where a preponderance of the evidence supports the inclusion) as was done in this instance. It is not practical for the Probation Officer to provide the details of every transaction in which the defendant was involved for purposes of the [PSR]. Counsel for the government has provided the Probation Officer, the Court, and defense counsel, with a large binder that includes supporting documentation for the loss calculation. The increase for 10 or more victims is proper and the loss calculation is accurate. It is noted that this Court found the increase for 10 or more victims applicable in related defendant Rebecca Konsevick’s case.

The PSR continued:

The Probation Office maintains that the loss calculation is an [sic] accurately computed in this instance as is the offense level calculation. Defense counsel, if he chooses, can argue that this calculation over-represents the defendant’s culpability/conduct. No change is made to the report.

On September 12, 2013, three weeks after the revised PSR was issued, the government filed its sentencing memorandum, along with a second binder, labeled “Relevant Conduct,” containing more than 500 pages of documents providing evidentiary support for the relevant conduct determination. In its memorandum, the government argued that, based on the evidence presented, the PSR had correctly calculated Cox’s GSR.

Cox filed his own sentencing memorandum on December 17, 2013, in which he challenged various aspects of the PSR. In his memorandum Cox did not, however, raise specific objections to the PSR’s relevant conduct determination. Instead, Cox repeated his general objections to the PSR’s recommendation, specifically referencing the documentation filed by the government:

In the present case, the government provided Probation and the defense with a binder of exhibits consisting of deeds of various properties, and a chart entitled “Loss of Specific Properties.” In most of the deeds, Mr. Cox’s name does not appear. There is no indication in the exhibit what, if any role he played in the purchase or sale of the properties. There is no indication whether fraud was involved in the purchase or sale of the properties, or the reason the properties were foreclosed upon. On the basis of the foregoing defendant contends that “loss” falls between $400,000 and $1,000,000 and a 14 level increase under U.S.S.G. § 2Bl.l(b)(l)(H) is applicable.

The district court convened Cox’s sentencing hearing on December 19, 2013. After hearing lengthy argument from counsel regarding the Guidelines enhancements — including a specific inquiry into the factual support for the uncharged transactions included as relevant conduct in the PSR — the district court stated the basis for its factual decisions:

Counsel, ... I did have the benefit, as you know, of presiding over Mr. Cox’s trial, and I have also had the benefit of reviewing materials, both that were offered as exhibits at the trial, were the subject of some pretrial motion practice, and as are before the Court at sentencing.

The court then rejected Cox’s objections to the PSR’s relevant conduct determination:

I respectfully disagree with [Cox’s counsel] in terms of the basis of the numbers that are provided by the government here based on the trial record and the PSR. I think it’s certainly under the Guidelines appropriate to include relevant conduct and acquitted conduct....

Based on this record, we discern no error in the district court’s decision to adopt the PSR’s sentencing recommendations, which were fully supported by the evidence presented at trial and the voluminous supporting materials submitted by the government. Cox’s various objections — as to the PSR, as well as those made in his sentencing memorandum and at his sentencing hearing — are too general and unsupported to require the district court at sentencing to engage in a transaetion-by-transaction analysis of the PSR’s relevant conduct determination. See Cyr, 337 F.3d at 100 (“[I]f the defendant’s objections to the PSR are merely rhetorical and unsupported by countervailing proof, the district court is entitled to rely on the facts in the PSR.”); United States v. Prochner, 417 F.3d 54, 66 (1st Cir. 2005) (upholding reliance on a PSR’s listing of victims and loss amounts “[i]n the absence of rebuttal evidence beyond defendant’s self-serving words”).

Indeed, there is no genuinely disputed evidence at issue in this case. Cox’s objections, at bottom, are merely rhetorical assertions that the evidence before the court was insufficient to support the relevant conduct determination. Rule 32(i)(3)(A) explicitly states that a district court “may accept any undisputed portion of the PSR as a finding of fact.” Olivero, 552 F.3d at 39 (citing Fed. R. Crim. P. 32(i)(3)(A)). Merely asserting, without more, that the evidence before a sentencing court was insufficient, does not raise a dispute as to the validity of a PSR’s recommendations. See id. 'at 39-40 (“If the facts plausibly support competing inferences, ... a sentencing court cannot clearly err in choosing one.”). Here, the district court adequately explained that it was adopting the PSR’s relevant conduct determination based on the evidence in the record. Thus, in the absence of genuinely controverted evidence, the court’s decision to credit the facts underlying the PSR was not clearly erroneous.

Cox’s present challenges to individual relevant conduct transactions — each of which is made for the first time on appeal and is thus subject only to plain error review — fare no better. First, Cox argues that three transactions involving one straw buyer — Larneshia Bryant-Alexander — were not supported by sufficient evidence. The record before the district court at sentencing, however, indicates that, as to two of the properties, Bryant-Alexander’s stated income on the mortgage application was false. As for the third property, Bryant-Alexander’s application contained false claims about her employment status, as well as a representation that she paid more than $17,000 at closing, when Cox actually made that payment.

Cox also argues that the district court erred in including five separate transactions as relevant conduct because they involved straw buyers who were not involved in any of the transactions listed in the indictment. However, the record shows that each of these transactions involved the same types of false statements in mortgage applications that underlay the convicted and acquitted conduct. Moreover, Cox himself received the majority of the proceeds from each of these transactions, additionally supporting the district court’s determination that these transactions were relevant conduct under U.S.S.G. § 1B1.3.

Cox’s last specific objection involves one property that Cox purchased himself. However, his mortgage application for this property contained the same type of false statements as those made on behalf of straw buyers. The fact that Cox made these statements himself, rather than through a straw buyer, does not place them outside “the same course of conduct or common scheme or plan as the charged conduct.” Eisom, 585 F.3d at 557.

Hence, despite Cox’s protestations to the contrary, the record reveals no error in the district court’s relevant conduct determinations, plain or otherwise. Having determined that these factual findings were procedurally sound, we can easily dispose of Cox’s objections to each of the § 2B1.1 enhancements. As to the two-level enhancement for an offense involving ten or more victims, the loss chart adopted by the district court identified far more than ten lenders (or their successors-in-interest) who suffered financial losses as a result of Cox’s fraud. Similarly, the district court’s decision to impose a two-level enhancement for deriving gross receipts of more than $1,000,000 was supported by ample evidence.

With respect to the court’s loss calculation, Cox does make one additional objection based on the court’s methodology. Although we review the application of the court’s loss-calculation methodology for clear error, determining the correct methodology is “a prototypical question of legal interpretation” that we review de novo. United States v. Walker, 234 F.3d 780, 783 (1st Cir. 2000).

In calculating the amount of actual loss caused by Cox’s scheme to defraud, the district court stated that it was applying the formula set forth in United States v. Appolon, 695 F.3d 44 (1st Cir. 2012). There, we held that

[i]n cases where a defendant has pledged collateral to secure a fraudulent loan, actual loss usually can be calculated by “subtracting the value of the collateral — or, if the lender has foreclosed on and sold the collateral, the amount of the sales price — from the amount of the outstanding balance on the loan.”

Id. at 67 (emphasis added) (quoting United States v. James, 592 F.3d 1109, 1114 (10th Cir. 2010)). Cox points out that the loss chart adopted by the district court calculated loss by subtracting the value of the properties from the original loan amount, rather than from the outstanding loan balance. He reasons that, because Appolon instructs that “actual loss is always the difference between the original loan amount and the final foreclosure price (less any principal repayments),” the failure to ascertain the outstanding balance for every loan at issue was procedural error. Id. (emphasis added). Cox misconstrues our instructions in Appolon.

We did not hold in Appolon that a court may only determine actual loss if the government has presented evidence of the outstanding principal balance on every alleged fraudulent loan. Such a requirement would run afoul of the Guidelines’s clear instruction that a district court need not establish loss with precision, but rather, may make a reasonable estimate of the loss, based on the available information. See United States v. Adorno-Molina, 774 F.3d 116, 126 (1st Cir. 2014); U.S.S.G. § 2B1.1, cmt. n.3(C). See also United States v. Alphas, 785 F.3d 775, 783 (1st Cir. 2015) (noting that the Guidelines use the amount of loss as a rough proxy for “the seriousness of the crime and the relative culpability of the offender” in determining a GSR). Indeed, we discussed this issue in Appolon, noting that, given the “relatively short lifespan of the loans” in that case, and the fact that the defendant’s “scheme was based on allowing the loans to default, any difference between the original loan amounts and the outstanding balances [was] probably not significant.” Appolon, 695 F.3d at 68 n.13.

Here, too, the short period of time before Cox’s unqualified straw buyers defaulted on their mortgages means that any principal payments would be unlikely to impact the district court’s loss calculation. In fact, we reached a similar conclusion in United States v. Foley, 783 F.3d 7, 25 (1st Cir. 2015), where we rejected a defendant’s claim that the district court failed to account for certain loan principal payments because the defendant had “offer[ed] no figure for the borrowers’ principal repayments.” Hence, we concluded, the defendant’s argument amounted “to no more than mere speculation, which we need not credit on appeal.” Id Cox’s contention is no less speculative. His only support for this claim is trial testimony from a few straw purchasers who recalled having made a small number of mortgage payments before lenders foreclosed on the properties. Thus, like the defendant in Foley, the absence of any specific figures regarding principal repayments dooms this argument.

C. Variant Sentence

Cox’s final claim of procedural error is somewhat puzzling. He argues that the district court improperly imposed a sentence based on an “alternative” GSR that was “commensurate with a GSR- using only the counts of conviction to assess loss amounts and gross receipts,” but which relied on uncharged and acquitted conduct to apply the two-level enhancement for crimes involving ten or more victims. According to Cox, this “alternative calculation” should have resulted in a base offense level of 31 and a GSR of 108-135 months, instead of a GSR of 135-168 months. In other words, after vigorously contending that the GSR of 262-327 months adopted by the court was procedurally unreasonable, Cox alleges that he was actually sentenced under a lower, but still procedurally inadequate, GSR.

This purported “alternative” GSR is not supported by the record. The court did note, in passing, that “even if [the court] excluded acquitted conduct ... [it] would still be appropriate” to impose a twenty-level enhancement under U.S.S.G. § 2B1.1(b)(1)(E) for engendering losses greater than $7 million. That single remark hardly demonstrates that the court adopted, implicitly or otherwise, a different Guidelines calculation than the one it did. Indeed, the district court explicitly stated the GSR and offense level it chose: “I will adopt the base level of offense of 37” and “I will adopt ... an advisory guideline[s] range [of] 262 to 327 months.” And, as we have explained in rejecting Cox’s other procedural objections to his sentence, this advisory GSR was properly calculated. Hence, the district court committed no procedural error.

IV. Substantive Reasonableness

Cox also contends that his sentence was substantively unreasonable because it was “significantly and unjustifiably higher” than sentences imposed on other defendants for similar crimes. We do not agree.

We have repeatedly emphasized that “[a] challenge to the substantive reasonableness of a sentence is particularly unpromising when, the sentence imposed comes within the confines of a properly calculated GSR.” United States v. Demers, 842 F.3d 8, 15 (1st Cir. 2016). Less promising still is a defendant’s challenge to a sentencing court’s substantial downward variance from a properly calculated GSR. See United States v. Floyd, 740 F.3d 22, 39-40 (1st Cir. 2014) (noting that, when a district court provides a substantial downward variance from a properly calculated GSR, “a defendant’s claim of substantive unreasonableness will generally fail”); King, 741 F.3d at 310. This ease is no exception to the general rule.

After properly calculating Cox’s GSR of 262-327 months, the district court allowed both parties to present arguments, permitted Cox to address the court himself, thoroughly reviewed all of the § 3553(a) factors, and, in light of that review, rejected the government’s recommendation of a 180-month sentence and imposed a 150-month sentence. Cox now argues that the 112-month downward variance from the low-end of the properly-calculated GSR— imposed, in part, to avoid unwarranted sentencing disparities under 18 U.S.C. § 3553(a)(6) — did not go far enough.

Under 18 U.S.C. § 3553(a)(6), a sentencing court must consider, inter alia, the need to “avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct.” Cox identifies three fraud cases in this circuit in which defendants received sentences shorter than the one imposed here, but makes no serious effort to explain why he is similarly situated to the defendants in those cases. As we recently explained in United States v. Nuñez, 840 F.3d 1, 7 (1st Cir. 2016), “[m]erely pointing to a coconspirator’s [lower] sentence, without more, does not prove the existence of an impermissible sentencing disparity,” because “ ‘a defendant is not entitled to a lighter sentence merely because his co-defendants received lighter sentences.’ ” Id. (quoting United States v. Gomez-Pabon, 911 F.2d 847, 862 (1st Cir. 1990)). Merely pointing to the sentences of unrelated defendants sentenced by different judges is even less persuasive. See Foley, 783 F.3d at 26. Here, because Cox fails to develop his conclusory argument, he has failed to demonstrate that the below-guidelines sentence imposed by the district court was substantively unreasonable.

V. Forfeiture

Finally, Cox contests the forfeiture award ordered by the district court. The court granted the government’s motion for forfeiture of property in the amount of $2,966,334.37. This amount included all proceeds Cox received from the convicted transactions — $860,210.52, according to the loss chart adopted by the district court — as well as all proceeds Cox received from uncharged relevant conduct. Cox contends that the district court erred by including proceeds from uncharged relevant conduct in the forfeiture order because, he claims, “the criminal forfeiture statute does not authorize the forfeiture of funds based on uneonvicted conduct.” Although we have not directly addressed this argument before, we join the other circuits that have concluded that a court may order forfeiture of the proceeds from uncharged conduct that was part of the same fraudulent scheme alleged in the counts of conviction.

In this case, the government sought forfeiture under 18 U.S.C. §§ 981(a)(1)(C), 982(a)(1), 982(a)(2)(A), and 28 U.S.C. § 2461. The relevant language from these statutes is broadly framed to reach property beyond “the amounts alleged in the count(s) of conviction.” United States v. Venturella, 585 F.3d 1013, 1017 (7th Cir. 2009); see also United States v. Lo, 839 F.3d 777, 793 (9th Cir. 2016). Specifically, 18 U.S.C. § 982(a)(2) subjects to forfeiture “any property constituting, or derived from, proceeds the person obtained directly or indirectly, as a result of’ certain specified offenses, including bank fraud under 18 U.S.C. § 1344. See also id. § 982(a)(1) (requiring forfeiture of “any property ... involved in” a violation of 18 U.S.C. § 1957 and of “any property traceable to such property.”). Similarly, 18 U.S.C. § 981(a)(1)(C) authorizes forfeiture for “[a]ny property, real or personal, which constitutes or is derived from proceeds traceable to” the commission of certain crimes, including bank fraud under 18 U.S.C. § 1344. The term “proceeds” is defined as “property of any kind obtained directly or indirectly, as the result of the commission of the offense giving rise to forfeiture, and any property traceable thereto, and is not limited to the net gain or profit realized from the offense.” 18 U.S.C. § 981(a)(2)(A).

Both the Seventh and Ninth Circuits relied on this inclusive statutory language to conclude that, in the case of crimes that involve a scheme to defraud, funds “obtained ... as a result” of the offense “consist of the funds involved in that fraudulent scheme, including additional executions of the scheme that were not specifically charged or on which the defendant was acquitted.” Lo, 839 F.3d at 793; see Venturella, 585 F.3d at 1017 (noting that, because defendants “pled guilty to one count of mail fraud that also, alleged a fraudulent scheme,” the amount of the single mailing “does not adequately account for the proceeds obtained from their crime of conviction”); see also United States v. Fruchter, 411 F.3d 377, 384 (2d Cir. 2005) (holding, under RICO forfeiture provisions, that “proceeds derived from conduct forming the basis of a charge of which the defendant was acquitted can be counted as ‘proceeds’ of racketeering activity”). We agree with this reading of the forfeiture statutes and find that it applies here.

As we already have held, the district court properly concluded by a preponderance of the evidence that all of the uncharged and acquitted conduct was part of the same scheme to defraud. Although Cox asserts that, for purposes of forfeiture, the court was required to find beyond a reasonable doubt that the uncharged conduct was part of the same scheme, we disagree. We have previously observed that a forfeiture award “is a part of the sentence rather than the substantive offense.” United States v. Ferrario-Pozzi, 368 F.3d 5, 8 (1st Cir. 2004); see also Libretti v. United States, 516 U.S. 29, 38-39, 116 S.Ct. 356, 133 L.Ed.2d 271 (1995). As such, the preponderance of the evidence standard applies. See Munyenyezi, 781 F.3d at 544; see also Hasson, 333 F.3d at 1277 (“[C]riminal forfeiture is part of sentencing where the preponderance standard governs.”).

Hence, the district court did not err in including the proceeds of the uncharged relevant conduct in its forfeiture award.

Affirmed.

      . Because Cox does not contest the sufficiency of the evidence supporting his conviction, "we narrate the facts in a 'balanced way, without favoring either side.’ ” United States v. Arias, 848 F.3d 504, 508-09 n.1 (1st Cir. 2017) (quoting United States v. Rodríguez-Soler, 773 F.3d 289, 290 (1st Cir. 2014)).

      . Konsevick pleaded guilty to counts of bank fraud (in violation of 18 U.S.C. § 1344) and unlawful monetary transactions (in violation of 18 U.S.C. § 1957). On January 24, 2013, she was sentenced to 30 months of imprisonment to be followed by two years of supervised release.

      .Cox’s half-brother, Lord Allah, was also charged in the indictment. He pleaded guilty to two counts of wire fraud, in violation of 18 U.S.C. § 1343; one count of bank fraud, in violation of 18 U.S.C. § 1344; and two counts of unlawful monetary transactions, in violation of 18 U.S.C. § 1957. On December 19, 2012, he was sentenced to 18 months of imprisonment and two years of supervised release.

      . We refer to the properties at issue in this appeal by the street name where each property is located, but omit the specific address, with the exception of the two Fuller properties at issue.

      . The uncharged conduct was based on the following seven properties: Whitfield, Vinson, Warren, Moreland, Bailey, Stellman, and 15 Fuller.

      . The PSR adopted by the district court used the 2012 Guidelines Manual to determine Cox's offense level.

      . Specifically, the court asked counsel for the government to discuss the basis for the relevant conduct listed in the PSR. The government, in a lengthy response, detailed how the relevant conduct transactions involved "the same straw buyers [and] the same false statements,” as well as the same “netting of funds because buyers did not bring cash to closings,” and the same false employers, as well as the fact that Cox .received proceeds from the transactions.

      . The government contends that our review should be for plain error because Cox failed to make an objection to the district court's loss methodology. See United States v. Mitrano, 658 F.3d 117, 123-24 (1st Cir. 2011). Because Cox’s claim fails under either standard, we do not resolve this disagreement.

      . Although not addressed by either party, Cox’s argument here requires that we assume the mortgage loans at issue were not interest-only or negatively amortizing loans, a type of mortgage loan that was not uncommon before the subprime mortgage crisis. See generally, Nat'l Comm'n on the Causes of the Fin. & Econ. Crisis in the U.S., The Financial Crisis Inquiry Report 124 fig. 7.3 (2011). Such loans, if at issue here, could result in actual losses equal to or greater than the amount of the original loans, even if the straw purchasers had timely made some mortgage payments to the lenders.

      . Furthermore, even if Cox was able to put forth some evidence of principal repayments by straw buyers, failing to deduct these amounts from the loss total would likely be harmless error. The district court found actual loss of more than $7.8 million, and the threshold for a twenty-level enhancement under § 2Bl.l(b)(l)(K) was $7 million at the time Cox was sentenced. Thus, to demonstrate prejudicial error, Cox would have to show that more than $800,000 in principal was repaid to lenders. Absent such a showing, he cannot demonstrate he suffered any prejudice. See Foley, 783 F.3d at 25.

      . In discussing the need to avoid unwarranted sentencing disparities, the district court explained:
      I do think a substantial sentence is warranted, and I’ve given consideration ... to unwarranted sentencing disparities. I think' the submission by the government appropriately reflects other serious cases involving financial fraud in this district, some that are in some degree different from yours in terms of the scope of the crime, in terms of the total loss amount, but I think it's appropriate for me to consider those in gauging what an appropriate sentence is here.
      For all of these reasons, given all of the goals of sentencing, all of the factors under 3553(a), I don’t adopt the government’s recommendation of 180 months, but I do adopt a significant sentence of 150 months, Mr. Cox.

      . The government’s forfeiture motion excluded funds from transactions based on acquitted conduct. Although the government provides no explanation for its decision to exclude these funds from its motion, it asserts that there would have been no legal obstacle to requesting funds based on acquitted conduct in this case. For the reasons set forth below, we can find no basis for drawing a distinction between the uncharged and acquitted conduct in the context of a broader scheme to defraud. See United States v. Capoccia, 503 F.3d 103, 117-18 (2d Cir. 2007) (stating that, "[wjhere the conviction itself is for executing a scheme, engaging in a conspiracy, or conducting a racketeering enterprise,” the proceeds for purposes of forfeiture include the proceeds of "that scheme, conspiracy, or enterprise”); see also United States v. Hasson, 333 F.3d 1264, 1279 (11th Cir. 2003) (holding, for purposes of forfeiture, that "[i]n determining what transactions involved the proceeds of mail and wire fraud, the jury was not restricted to the three substantive counts of wire fraud on which it returned a guilty verdict” and could consider evidence of fraud offered in support of an additional money laundering count).

      . More specifically, the government sought forfeiture of property related to Cox's violations of 18 U.S.C. § 1957 (money laundering) under 18 U.S.C. § 982(a)(1), violations of 18 U.S.C. § 1344 (bank fraud) under 18 U.S.C. § 982(a)(2)(A), and violations of 18 U.S.C. § 1343 (wire fraud) under 18 U.S.C. 981(a)(1)(C) and 28 U.S.C. § 2461. In his brief, however, Cox refers to “the criminal forfeiture statute,” citing only 18 U.S.C. § 982. He does not mention 18 U.S.C. § 981 and 28 U.S.C. § 2461, the statutes under which the government sought forfeiture of property derived from Cox’s violations of 18 U.S.C. § 1343.

      . Although 18 U.S.C. § 981 is titled "Civil forfeiture,” it applies in criminal cases pursuant to 28 U.S.C. § 2461, which authorizes criminal forfeiture of the proceeds of any offense for which there is no specific statutory basis for criminal forfeiture as long as civil forfeiture is permitted for that offense. See Venturella, 585 F.3d at 1016 (discussing § 2461). The criminal forfeiture statute, 18 U.S.C. § 982, covers only certain forms of wire fraud, such as those that affect a financial institution. Id. at § 982(a). Hence, forfeiture in cases of wire fraud not involving financial institutions falls under 28 U.S.C. § 2461 and 18 U.S.C. § 981.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    UNITED STATES of America, Appellee, v. Trezjuan THOMPSON, Defendant, Appellant.
    No. 13-1822
    United States Court of Appeals, First Circuit.
    March 22, 2017

      Mary Davis, with whom Tisdale & Davis, P.A., Portland, ME, was on brief, for appellant.
    Renée M. Bunker, Assistant United States Attorney, with whom Thomas E. Delahanty II, United States Attorney, was on brief, for appellee.
    Before HOWARD, Chief Judge, LYNCH and BARRON, Circuit Judges.
   PER CURIAM.

Defendant-Appellant Trezjuan Thompson pled guilty to drug conspiracy and arson charges. Before sentencing, he moved to withdraw his plea, primarily arguing that he did not have the opportunity to review personally certain discovery materials.

The district court denied Thompson’s motion, United States v. Thompson, No. 2:10-cr-200-DBH, 2013 WL 1809659 (D. Me. Apr. 29, 2013), and sentenced him to 327 months’ imprisonment based, in part, on its finding that Thompson was a career offender under the sentencing guidelines. See U.S.S.G. § 4B1.1. One of the predicate offenses supporting Thompson’s career offender designation was a 2006 Massachusetts conviction for assault and battery with a dangerous weapon (“ABDW”). See Mass. Gen. Laws ch. 265, § 15A(b). The court held that the ABDW conviction qualified as a “crime of violence” under the so-called “residual clause” of U.S.S.G. § 4B1.2(a)(2).

Thompson’s opening brief raises only a single issue, namely, the correctness of the district court’s denial of the motion to withdraw his guilty plea. This challenge need not detain us long. In short, we perceive no abuse of discretion in the district court’s thorough treatment of the matter. See United States v. Gates, 709 F.3d 58, 69 (1st Cir. 2013). And, contrary to his contention on appeal, Thompson was not entitled to a hearing because “[t]he district judge had everything that he needed in the paper record” to dispose of the motion. United States v. Chambers, 710 F.3d 23, 30 (1st Cir. 2013).

During the pendency of Thompson’s appeal, another issue arose. The Supreme Court, in Johnson v. United States, — U.S. -, 135 S.Ct. 2551, 192 L.Ed.2d 569 (2015), held that the residual clause of the Armed Career Criminal Act’s (“ACCA”) definition of “violent felony” was unconstitutionally vague. The district court’s finding that Thompson qualified as a career offender was predicated upon the applicable guideline’s identical residual clause. Thompson’s opening brief, which was filed before Johnson, did not challenge any aspect of his sentence, much less argue that the residual clause was unconstitutionally vague. Thompson raised the issue for the first time in a citation of supplemental authority pursuant to Federal Rule of Appellate Procedure 28(j), requesting remand in light of Johnson. We ordered supplemental briefing. In response, the government conceded that Johnson invalidated the career offender guideline’s residual clause, but argued that Thompson’s ABDW conviction fell within the separate “elements” or “force” clause.

Subsequently, in Beckles v. United States, — U.S -, 137 S.Ct. 886, 197 L.Ed.2d 145 (2017), the Supreme Court squarely held that Johnson does not apply to the career offender guideline. This is because the sentencing guidelines, unlike the ACCA, “are not subject to a vagueness challenge under the Due Process Clause.” Id. at 892, 2017 WL 855781 at *5. We are not bound by the government’s concession, which, while understandable before Beckles, turned out to be incorrect. See United States v. Sánchez-Berríos, 424 F.3d 65, 81 (1st Cir. 2005) (“A concession by either party in a criminal case as to a legal conclusion is not binding on an appellate court.”). In deciding whether to accept a concession, we consider: (1) “whether the issue is recurrent so [a] decision would give guidance to the district courts”; (2) “whether it would be unseemly to accept, even arguendo, a mistaken legal proposition and reason from it to decide the case”; and (3) “whether the issues are technical and complex and not explored carefully in existing decisions so that adversary briefing would be critical.” United States v. Mescual-Cruz, 387 F.3d 1, 8 n.2 (1st Cir. 2004). Johnson’s applicability to the career offender guideline has proven to be a frequently recurring issue in this circuit and, in light of Beckles, the proper resolution of this issue is crystal clear. Accordingly, we “ignore the government’s concession” and “follow [the Supreme Court’s] clear precedent.” United States v. Vega-Ortiz, 425 F.3d 20, 22 (1st Cir. 2005).

For the foregoing reasons, we AFFIRM Thompson’s convictions and sentence.

      . The relevant subsection defined “crime of violence” to include an offense that "is burglary of a dwelling, arson, or extortion, involves use of explosives, or otherwise involves conduct that presents a serious potential risk of physical injury to another.” U.S.S.G. § 4B 1.2(a)(2) (2013) (emphasis added). The underscored language, often referred to as the residual clause, has since been stricken from the guideline. See Sentencing Guidelines for United States Courts, 81 Fed. Reg. 4741, 4742 (Jan. 27, 2016).

      . Thompson has also filed a supplemental pro se brief. Because the claims raised therein "lack arguable merit,” we decline to address them specifically. United States v. Rose, 802 F.3d 114, 117 (1st Cir. 2015).

      . The force clause includes any offense punishable by imprisonment for more than one year that "has as an element the use, attempted use, or threatened use of physical force against the person of another.” U.S.S.G. § 4B1.2(a)(1).

      . The Supreme Court’s decision in Beckles resolved a four to one circuit split on Johnson's applicability to the career offender guideline. Four circuits had applied Johnson, while only one had declined to do so. See United States v. Hurlburt, 835 F.3d 715, 725 (7th Cir. 2016) (applying Johnson); United States v. Pawlak, 822 F.3d 902, 911 (6th Cir. 2016) (same); United States v. Madrid, 805 F.3d 1204, 1211 (10th Cir. 2015) (same); United States v. Townsend, 638 Fed.Appx. 172, 178 (3d Cir. 2015) (unpublished) (same). But see United States v. Matchett, 802 F.3d 1185, 1194-95 (11th Cir. 2015) (declining to apply Johnson). And, in the lone decision holding that Johnson did not apply, four judges dissented from the court’s subsequent denial of rehearing en banc. See generally United States v. Matchett, 837 F.3d 1118 (11th Cir. 2016).
      Moreover, prior to Beckles, several district courts in our circuit had applied Johnson to the career offender guideline. See, e.g., United States v. Flannery, No. 11-cr-79-M, — F.Supp.3d -, -, 2017 WL 462145, at *1 (D.R.I. Feb. 1, 2017); United States v. Ramirez, 189 F.Supp.3d 290, 296-97 (D. Mass. 2016); Tosi v. United States, No. 16-cv-05-GZS, 2016 WL 5107078, at *2 (D. Me. Sept. 20, 2016) (noting “growing consensus” in favor of applying Johnson); Carmona v. United States, No. 16-cv-282-LM, 2016 WL 3962897, at *2 n.1 (D.N.H. July 21, 2016) ("assuming] without deciding” that Johnson applied).

      . Indeed, it is worth noting that in Beckles itself the government "agree[d] ... that the Guidelines are subject to vagueness challenges.” 137 S.Ct. at 892, 2017 WL 855781 at *6. This concession did not prevent the Court from holding to the contrary.


author: KEARSE, Circuit Judge:

text:
    SECURITIES AND EXCHANGE COMMISSION, Plaintiff-Appellee, v. John B. FROHLING, Defendant-Cross-Claimant-Cross-Defendant-Appellant, Hisao Sal Miwa, Defendant-Cross-Claimant-Cross-Defendant, Virginia K. Sourlis, Defendant-Cross-Claimant, Daniel D. Starczewski, Joe V. Overcash, Jr., Frank J. Morelli, III, Thomas F. Pierson, Defendants-Cross-Defendants, Active Stealth, LLC, BAF Consulting, Inc., Bluewater Executive Capital, LLC, Emerging Markets Consulting, LLC, KCS Referal Services, LLC, MBA Investors, Ltd., New Age Sports, Inc., Power Network, Inc., Project Development, Inc., Seville Consulting, Inc., Starr Consulting, Inc., Tuscany Consulting, Inc., YT2K, Inc., Relief-Defendants-Cross-Defendants; Greenstone Holdings, Inc., James S. Painter, III, Defendants.

    Docket No. 13-3191-cv
    August Term, 2016
    United States Court of Appeals, Second Circuit.
    Argued: October 19, 2016
    Decided: December 6, 2016

      ALLAN A. CAPUTE, Special Counsel to. the Solicitor, Washington, D.C. (Anne K. Small, General Counsel, Michael A. Conley, Deputy General Counsel, Jacob H. Stillman, Solicitor, Securities and Exchange Commission, Washington, D.C., on the brief), for Plaintiff-Appellee.
    JOHN B. FROHLING, pro se, Jersey City, New Jersey, Defendant-Cross-Claimant-Cross-Defendant-Appellant. '
    Before: KEARSE, POOLER, and DRONEY, Circuit Judges.

       The Clerk of Court is directed to amend the official caption in this appeal to conform with the above.

       Originally filed as a summary order on November 8, 2016, this decision is now being published as an opinion on motion of the Securities and Exchange Commission dated November 14, 2016, granted on December 1, 2016.

   KEARSE, Circuit Judge:

In this appeal, which was reinstated following a remand for final resolution of pending claims, see SEC v. Frohling, 614 Fed.Appx. 14 (2d Cir. 2015), defendant-cross-claimant-cross-defendant-appellant John B. Frohling pro se appeals from a November 25, 2015 Superseding Final Judgment of the United States District Court for the Southern District of New York, Miriam G. Cedarbaum, Judge, in this enforcement action 'brought by the Securities and Exchange Commission (“SEC”) in connection with public offerings of unregistered shares of stock of defendant Greenstone Holdings, Inc. (“Green-stone”). The district court granted a motion by the SEC for summary judgment on issues of liability, holding Frohling — who as Greenstone’s securities counsel in 2006-2008 wrote, approved, or concurred in 11 opinion letters relating to all of the relevant offerings — liable for violating § 17(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. § 77q(a); § 5 of the Securities Act, 15 U.S.C. § 77e; and § 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5. The Superseding Final Judgment orders Frohling to pay a total of $204,161.86 as a civil penalty, disgorgement, and prejudgment interest, and permanently bars him from participating in so-called “penny stock” offerings, ie., offerings of “any equity security that has a price of less than five dollars, except as provided in Rule 3a51-l under the Exchange Act,” Superseding Final Judgment at 4.

On appeal, Frohling contends principally that he had no knowledge that the opinion letters he issued, approved, or concurred in were false, nor any knowledge of facts to alert him that the opinion letters were false, and that the district court erred in ruling that there was no genuine issue to be tried as to his knowledge. For the reasons that follow, we find no basis for reversal. We assume the parties’ familiarity with the underlying facts and procedural history of the case.

A. Liability

Section 5 of the Securities Act makes it unlawful, directly or indirectly, to publicly offer or sell unregistered stock, see 15 U.S.C. § 77e, unless the offering is covered by an exemption. The stock certificate for unregistered shares not covered by an exemption — “restricted” stock — normally bears a legend stating that the shares have not been registered and cannot lawfully be sold until they are registered. The pertinent exemption in this case, as it existed at the relevant time, allowed stock to be issued without the restricted-stock legend if the recipients were persons unaffiliated with the stock’s issuer at the time of the sale or during the preceding three months, and if at least two years had elapsed since the shares were-owned by the issuer or a person affiliated with the issuer, see SEC Rule 144(k), 17 C.F.R. § 230.144(k) (2005) (“Rule 144(k) exemption”)- The two-year requirement was satisfied if unaffiliated persons acquired the shares in exchange for “consideration consisting solely of other securities of the same issuer” that had been received at least two years earlier, as the shares were deemed to have been acquired from the issuer at the time the surrendered securities had been acquired. Id. § 230.144(d)(3)(ii) (2005) (emphasis added). “To state a cause of action under Section 5, one must show ‘(1) lack of a [required] registration statement as to the subject securities; (2) the offer or sale of the securities; and (3) the use of interstate transportation or communication and the mails in connection with the offer or sale.’ ” SEC v. Cavanagh, 445 F.3d 105, 111 n.13 (2d Cir. 2006) (quoting Europe & Overseas Commodity Traders, S.A. v. Banque Paribas London, 147 F.3d 118, 124 n.4 (2d Cir. 1998)). A person not directly engaged in transferring title of the security can be held liable under § 5 if he or she “engaged in steps necessary to the distribution of [unregistered] security issues.” SEC v. Chinese Consolidated Benevolent Ass’n, 120 F.2d 738, 741 (2d Cir. 1941).

Section 10(b) of the Exchange Act and Rule 10b-5, which prohibit fraud in the purchase or sale of a security, are violated if a person has “ ‘(1) made a material misrepresentation or a material omission as to which he had a duty to speak, or used a fraudulent device; (2) with scienter; (3) in connection with the purchase or sale of securities.’ ” SEC v. Pentagon Capital Management PLC, 725 F.3d 279, 285 (2d Cir. 2013) (quoting SEC v. Monarch Funding Corp., 192 F.3d 295, 308 (2d Cir. 1999)), cert. denied, — U.S. -, 134 S. Ct. 2896, 189 L.Ed.2d 834 (2014). A false statement was made with the requisite scienter if it was made with the “intent to deceive, manipulate, or defraud.” SEC v. Obus, 693 F.3d 276, 286 (2d Cir. 2012) (internal quotation marks omitted). “[S]cienter may be established through a showing of reckless disregard for the truth, that is, conduct which is highly unreasonable and which represents an extreme departure from the standards of ordinary care.” Id. (internal quotation marks omitted).

The elements of a claim under § 17(a) of the Securities Act, which prohibits fraud in the “offer or sale” of a security, 15 U.S.C. § 77q(a), are “[e]ssentially the same” as the elements of claims under § 10(b) and Rule 10b-5. SEC v. Monarch Funding Corp., 192 F.3d at 308.

Summary judgment may be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine dispute exists when the evidence is such that, if the party against whom summary judgment is sought is given the benefit of all permissible inferences and all credibility assessments, a rational factfin-der could resolve all material factual issues in favor of that party. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate when “there can be but one reasonable conclusion as to the verdict,” id. at 250, 106 S.Ct. 2505, i.e., “it is quite clear what the truth is,” Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962) (internal quotation marks omitted), and no rational factfinder could find in favor of the nonmovant. We review the district court’s grant of summary judgment de novo, applying the same standards that govern the district court’s consideration of the motion. See, e.g., Aulicino v. New York City Department of Homeless Services, 580 F.3d 73, 79 (2d Cir. 2009).

It is undisputed that the Green-stone shares in question were not registered. It is undisputed that Frohling wrote, approved, or concurred in 11 opinion letters relying explicitly or implicitly-on the Rule 144(k) exemption, stating that the shares could lawfully be transferred to the recipients as unrestricted shares on the ground that they were acquired by persons unaffiliated with Greenstone solely in exchange for othér Greenstone securities they had received more than two years earlier. The record shows that Frohling himself wrote eight of these letters; six of the eight expressly cited the Rule 144(k) exemption; and Frohling subsequently wrote a letter revising the other two to invoke the Rule 144(k) exemption expressly. It is undisputed that those statements were untrue. For example, certain owners — the “Morelli Group” — which purported to be receiving the to-be-offered shares from Greenstone in exchange for old convertible promissory notes agreed that at least half of the proceeds from the sale of the shares would be paid to Greenstone, thus making it false to represent that the Morelli Group was acquiring the to-be-offered shares “solely” in exchange for the promissory notes. Frohling nonetheless wrote or approved opinion letters stating, inter alia, that the unregistered Green-stone shares “may be issued without restriction” (Frohling letter dated August 31, 2006) and without a legend identifying them as restricted shares. Public offerings of the shares ensued, and the district court concluded that Frohling’s participation in those unlawful offerings was substantial because without those opinion letters, Greenstone’s transfer agent “would not have issued any unregistered shares.” SEC v. Greenstone Holdings, Inc., No. 10 Civ. 1302, 2012 WL 1038570, at *11 (S.D.N.Y. Mar. 28, 2012) (“Greenstone I”). Frohling has provided no basis for disturbing that conclusion. We affirm the ruling that Frohling violated § 5 substantially for the reasons stated by the district court in Greenstone I.

With respect to the SEC’s fraud claims against Frohling under § 17(a), § 10(b), and Rule 10b-5, Frohling challenges the propriety of summary judgment, arguing, as he did below, that he did not know the 11 opinion letters’ representations — that Greenstone shares to be offered to the public were exempt under Rule 144(k) from the registration requirement — were false and that his knowledge could not be determined as a matter of law. The district court concluded that no rational factfinder could fail to find that Frohling knew of, inter alia, the Morelli Group’s agreement to share the proceeds of the offerings with Greenstone:

[A]s to the letters Frohling wrote, the record contains numerous e-mails sent by Miwa [defendant Hisao Sal Miwa, Greenstone’s founder and chief officer] to Frohling in which Miwa discusses the Morelli Group’s plan to sell shares to the public and remit the proceeds to Greenstone. Miwa explicitly states that portions of the shares were to be used for “funding the company,” that is, in exchange for new consideration. Furthermore, Frohling admitted at his deposition that he knew of the Morelli Group’s commitment to transfer to Greenstone at least half of the proceeds of the public sale of the unregistered shares. Thus, he knew that the shares were being improperly sold for new consideration.

Greenstone I, 2012 WL 1038570, at *6 (emphases added).

In addition, Frohling wrote two of his false opinion letters to receive unrestricted shares himself, in exchange for a promissory note. Frohling opined that the Rule 144(k) exemption applied, despite knowing that it did not because, inter alia, he had received the note less than the required two years earlier. See id. at *4. As to one such letter, “[t]he undisputed facts show that Frohling received 10 million Green-stone shares as a result of th[e] opinion-letter and shortly thereafter sold at least 2.9 million of those shares.” Id. at *7.

The court also found that Frohling fraudulently approved of a January 11, 2006 opinion letter by defendant Virginia K. Sourlis (“Sourlis Letter”) leading to the issuance of more than 6 million Greenstone shares as unrestricted stock. See id. at *3. Sourlis opined that the shares could lawfully be issued as unrestricted shares because the recipients were acquiring them in exchange for certain convertible notes. See id. In her letter, Sourlis stated that she was relying on “information and representations furnished by ... the Original Note Holders to me,” and that “I have been informed by the Original Note Holders” that none of them were affiliated with the issuer and that the Original Note Holders had owned the notes for at least two years. (Sourlis Letter at 2.) The record established, however, that “the convertible notes described by Sourlis did not even exist.” SEC v. Greenstone Holdings, Inc., 954 F.Supp.2d 211, 218 (S.D.N.Y. 2018) (“Greenstone II”). Frohling concurred in the Sourlis Letter, and 6,150,000 shares were issued as unrestricted shares under the claim of a Rule 144(k) exemption for convertible promissory notes that in fact did not exist, allowing the shares to be sold to the public although unregistered. Because the notes did not exist, many of the statements in the Sourlis Letter were necessarily false. See id. The district court found that “Frohling adopted Sourlis’s statement[s] in full[,] ... even though he knew the true facts.” Greenstone I, 2012 WL 1038570, at *3.'

Although Frohling argues that there was a fact issue to be tried because he testified in deposition that he did not know the opinion letters he wrote, approved, or concurred in were false in their statements that the Rule 144(k) exemption applied, it is indisputable that he also admitted in that deposition that he knew that the Mor-elli Group had agreed to share the proceeds of the offerings with Greenstone. Given that admission, together with the documentary evidence consisting of emails sent to him stating that Greenstone was to receive part of the proceeds of the offerings, we see no error in the district court’s conclusion that Frohling’s later testimony that he did not know that fact did not create an issue that was genuine.

We conclude that the record was ample to support the district court’s determination that there was no genuine issue to be tried as to Frohling’s knowledge that the representations as to the applicability of the Rule 144(k) exemption were false, and to support its conclusion that Frohling violated § 17(a) of the Securities Act, § 10(b) of the Exchange Act, and Rule 10b-5 because the opinion letters he wrote, approved, or concurred in “all falsely claimed registration exemptions under Rule 144(k),” Greenstone I, 2012 WL 1038570, at *6.

B. Relief

Finally, we reject Frohling’s challenges to the relief ordered by the district court, i.e., disgorgement, prejudgment interest, civil penalties, and injunc-tive relief. “Once the district court has found federal securities law violations, it •has broad equitable power to fashion appropriate remedies.... ” SEC v. First Jer sey Securities, Inc., 101 F.3d 1450, 1474 (2d Cir. 1996) (“First Jersey”), cert. denied, 522 U.S. 812, 118 S.Ct. 57, 139 L.Ed.2d 21 (1997).

“The primary purpose of disgorgement as a remedy for violation of the securities laws is to deprive violators of their ill-gotten gains, thereby effectuating the deterrence objectives of those laws.” Id. Prejudgment interest may be awarded on sums ordered disgorged in order to fully compensate the wronged party .for actual damages suffered. See, e.g., id. at 1476. Civil monetary penalties are authorized by the Securities Act and the Exchange Act for both deterrent and punitive purposes. See, e.g., SEC v. Razmilovic, 738 F.3d 14, 38-39 (2d Cir. 2013). And injunc-tive relief is

particularly within the court’s discretion where a violation was founded on systematic wrongdoing, rather than an isolated occurrence, ... and where the court views the defendant’s degree of culpability and continued protestations of innocence as indications that injunc-tive relief is warranted, since “persistent refusals to admit any wrongdoing ma[k]e it rather dubious that [the offenders] are likely to avoid such violations of the securities laws in the future in the absence of an injunction.”

First Jersey, 101 F.3d at 1477 (quoting SEC v. Lorin, 76 F.3d 458, 461 (2d Cir. 1996) (other internal quotation marks omitted) (emphases ours)). The court’s choice of remedies is reviewed for abuse of discretion. See, e.g., First Jersey, 101 F.3d at 1474-77; SEC v. Contorinis, 743 F.3d 296, 301 (2d Cir. 2014), cert. dismissed, — U.S. -, 136 S.Ct. 531, 193 L.Ed.2d 419 (2015).

We see no abuse of discretion here, given the record in this case as to the moneys received by Frohling either through fees received by him or his firm for his fraudulent opinion letters or received by Frohling personally from an unlawful stock offering, and given Frohling’s continued manifestation of a lack of concern for his responsibilities under the federal securities laws. (See, e.g., Hearing Transcript, March 21, 2013, at 6-8, 9-10 (Frohling’s acknowledgement that he did not “say anywhere in [his 11 written or endorsed] opinion [letters] that” his opinion “was not based on any personal knowledge of [his own]” and that he was “simply relying on the opinions of other people”; and his continued insistence that he was entitled to give, approve, and concur in the opinions he gave without knowing, and without investigating to find out, whether they were true or false).)

CONCLUSION

We have considered all of Frohling’s arguments on this appeal and have found in them no basis for reversal. The district court’s Superseding Final Judgment against Frohling is affirmed.


text:
    SECURITIES AND EXCHANGE COMMISSION, Plaintiff-Appellee-Cross-Appellant, v. Virginia K. SOURLIS, Defendant-Cross-Claimant-Appellant-Cross-Appellee, John B. Frohling, Hisao Sal Miwa, Defendants-Cross-Claimants-Cross-Defendants, Daniel D. Starczewski, Thomas F. Pierson, Defendants-Cross-Defendants, Greenstone Holdings, Inc., Joe V. Overcash, Jr., Frank J. Morelli, III, James S. Painter, III, Defendants, Active Stealth, LLC, BAF Consulting, Inc., Bluewater Executive Capital, LLC, Emerging Markets Consulting, LLC, KCS Referal Services, LLC, MBA Investors, Ltd., New Age Sports, Inc., Power Network, Inc., Project Development, Inc., Seville Consulting, Inc., Starr Consulting, Inc., Tuscany Consulting, Inc., YT2K, Inc., Relief-Defendants.

    Docket Nos. 14-2301-cv(L), 14-2937-cv(XAP), 15-3978-cv
    August Term, 2015
    United States Court of Appeals, Second Circuit.
    Submitted: April 27, 2016
    Decided: December 6, 2016

      ALLAN A. CAPUTE, Special Counsel to the Solicitor, Washington, D.C. (Anne K. Small, General Counsel, Michael A. Conley, Deputy General Counsel, Jacob H. Stillman, Solicitor, Securities and Exchange Commission, Washington, D.C., on the brief), for Plaintiff-Appellee-Cross-Appellant.
    VIRGINIA K. SOURLIS, pro se, Red Bank, New Jersey, Defendant-Cross-Claimant-Appellant-Cross-Appellee.
    Before: KEARSE, POOLER, and DRONEY, Circuit Judges.

       The Clerk of Court is directed to amend the official caption in these appeals to conform with the above.

       Originally filed as a summary order on July 8, 2016, this decision is now being published as an opinion on motion of the Securities and Exchange Commission dated November 14, 2016, granted on December 1, 2016.

   KEARSE, Circuit Judge:

In these consolidated appeals, filed or reinstated following a remand for final resolution of pending claims, see SEC v. Frohling, 614 Fed.Appx. 14 (2d Cir. 2015), defendant-cross-claimant-appellant-cross-appellee Virginia K. Sourlis pro se appeals from a November 25, 2015 Superseding Final Judgment of the United States District Court for the Southern District of New York, Miriam G. Cedarbaum, Judge, in this enforcement action brought by the Securities and Exchange Commission (“SEC”) in connection with public offerings of unregistered shares of stock of defendant Greenstone Holdings, Inc. (“Green-stone”). The district court granted ta motion by the SEC for summary judgment on issues of liability, holding Sourlis — an attorney who wrote a January 11, 2006 opinion letter (“Sourlis Letter”) relating to one of the offerings — liable for violating § 5 of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. § 77e; violating § 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5; and aiding and abetting violations of § 10(b) and Rule 10b-5, in violation of § 20(e) of the Exchange Act, 15 U.S.C. § 78t(e). The Superseding Final Judgment orders Sourlis to pay a total of $57,284.83 as a civil penalty, disgorgement, and prejudgment interest, and permanently bars her from participating in so-called “penny stock” offerings, ie., offerings of “any equity security that has a price of less than five dollars, except as provided in Rule 3a51-l under the Exchange Act,” Superseding Final Judgment at 4.

In Nos. 14-2301 and 15-3978, Sourlis principally contends that she was entitled to summary judgment in her favor, arguing that she “did not owe a duty to protect the interests of the investing public” (e.g., Sourlis brief on appeal at 1, 26), and that the actual offering, of the stock that was the subject of her opinion letter was intervening fraudulent conduct by other defendants that relieved her of responsibility. She also challenges the court’s imposition of a civil penalty and its injunctive order. For the reasons that follow, we find no error in the district court’s determinations of liability and no abuse of discretion in its remedial order. We assume the parties’ familiarity with the underlying facts and procedural history of the case.

A. Liability

Section 5 of the Securities Act makes it unlawful, directly or indirectly, to publicly offer or sell unregistered stock, see 15 U.S.C. § 77e, unless the offering is covered by an exemption. The stock certificate for unregistered shares not covered by an exemption — “restricted” stock — normally bears a legend stating that the shares have not been registered and cannot lawfully be sold until they are registered. The pertinent exemption in this case, as it existed at the relevant time, allowed stock to be issued without the restricted-stock legend if the recipients were persons unaffiliated with the stock’s issuer, and if at least two years had elapsed since the shares were owned by the issuer or a person affiliated with the issuer, see SEC Rule 144(k), 17 C.F.R. § 230.144(k) (2005). The two-year requirement was satisfied if unaffiliated persons acquired the shares in exchange for “consideration consisting solely of other securities of the same issuer” that had been received at least two years earlier, as the shares were deemed to have been acquired from the issuer at the time the surrendered securities had been acquired. Id. § 230.144(d)(3)(h) (2005) (emphasis added). “To state a cause of action under Section 5, one must show ‘(1) lack of a [required] registration statement as to the subject securities; (2) the offer or sale of the securities; and (3) the use of interstate transportation or communication and the mails in connection with the offer or sale.’ ” SEC v. Cavanagh, 445 F.3d 105, 111 n.13 (2d Cir. 2006) (quoting Europe & Overseas Commodity Traders, S.A. v. Banque Paribas London, 147 F.3d 118, 124 n.4 (2d Cir. 1998)). A person not directly engaged in transferring title of the security can be held liable under § 5 if he or she “engaged in steps necessary to the distribution of [unregistered] security issues.” SEC v. Chinese Consolidated Benevolent Ass’n, 120 F.2d 738, 741 (2d Cir. 1941).

Section 10(b) of the Exchange Act and Rule 10b-5, which prohibit fraud in the purchase or sale of a security, are violated if a person has “ ‘(1) made a material misrepresentation or a material omission as to which he had a duty to speak, or used a fraudulent device; (2) with scienter; (3) in connection with the purchase or sale of securities.’ ” SEC v. Pentagon Capital Management PLC, 725 F.3d 279, 285 (2d Cir. 2013) (quoting SEC v. Monarch Funding Corp., 192 F.3d 295, 308 (2d Cir. 1999)), cert. denied, — U.S. ——, 134 S.Ct. 2896, 189 L.Ed.2d 834 (2014). A false statement was made with the requisite scienter if it was made with the “intent to deceive, manipulate, or defraud.” SEC v. Obus, 693 F.3d 276, 286 (2d Cir. 2012) (internal quotation marks omitted). “[SJcienter may be established through a showing of reckless disregard for the truth, that is, conduct which is highly unreasonable and which represents an extreme departure from the standards of ordinary care.” Id. (internal quotation marks omitted).

Summary judgment may be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine dispute exists when the evidence is such that, if the party against whom summary judgment is sought is given the benefit of all permissible inferences and all credibility assessments, a rational factfin-der could resolve all material factual issues in favor of that party. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate when “there can be but one reasonable conclusion as to the verdict,” id. at 250, 106 S.Ct. 2505, i.e., “it is quite clear what the truth is,” Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962) (internal quotation marks omitted), and no rational factfinder could find in favor of the nonmovant. We review the district court’s grant of summary judgment de novo, applying the same standards that govern the district court’s consideration of the motion. See, e.g., Aulicino v. New York City Department of Homeless Services, 580 F.3d 73, 79 (2d Cir. 2009).

The district court concluded that there was no genuine issue of material fact as to Sourlis’s liability under § 5 of the Securities Act with respect to more than 6 million Greenstone shares to which her January 11, 2006 opinion letter pertained. It is undisputed that the Greenstone shares in question were not registered. Sourlis opined that shares could lawfully be issued as unrestricted shares to recipients who were acquiring them in exchange for certain convertible notes. The Sourlis Letter stated that she was relying on “information and representations furnished by ... the Original Note Holders to me,” and that “I have been informed by the Original Note Holders” that none of them were affiliated with the issuer and that the Original Note Holders had owned the notes for at least two years. (Sourlis Letter at 2.) The record established, however, that “the convertible notes described by Sourlis did not even exist.” SEC v. Greenstone Holdings, Inc., 954 F.Supp.2d 211, 213 (S.D.N.Y. 2013). Accordingly, many of the statements in the Sourlis Letter were necessarily false. See id. On the basis stated in the Sourlis Letter, which was approved by defendant John B. Frohling, Greenstone’s securities counsel, 6,150,000 Greenstone shares were issued in February 2007 as unrestricted shares, allowing them to be sold to the public despite the fact that they were unregistered. The court concluded that Sourlis’s role

satisfie[d] the requirement that she directly or indirectly offered to sell securities. [Greenstone’s transfer agent] required a legal opinion letter providing the authority to issue the unregistered shares without a restrictive legend. It would not have issued the shares without Sourlis’s letter. This is sufficient to hold an attorney liable under Section 5.

Id. at 214. We see no error in this conclusion.

The district court also found Sour-lis liable under § 20(e) of the Exchange Act because her letter aided and abetted violations of § 10(b) and Rule 10b-5 by others. See Order dated November 16, 2012, entered November 20, 2012 (“November 20 Order”), incorporated in the Superseding Final Judgment. Sourlis challenges this conclusion, arguing, as she did in the district court, that she had no actual knowledge that her January 2006 letter would be used for the issuance of unrestricted stock a year later, and that she had no knowledge of the exhibit that was eventually attached to the letter. The court found that the attachment (which specified the persons who were to receive the shares and the number of shares each was to receive) was not the problem; the problem “was the contents of the letter” (Hearing Transcript, November 16, 2012 (“Tr.”), at 32). Although § 20(e) as it existed at the time of the Sourlis Letter pertained to “any person that knowingly provide[d] substantial assistance” to a primary violator of the securities laws, 15 U.S.C. § 78t(e) (2000), it did not, unlike certain other sections of the Exchange Act, state that in order to be liable the person must have had actual knowledge, see, e.g., Exchange Act § 21E, 15 U.S.C. § 78u-5(c)(1)(B) (for claims of fraud in forward-looking statements, requiring proof that the statements were made with “actual knowledge” of falsity). See generally SEC v. Big Apple Consulting USA Inc., 783 F.3d 786, 798-801 (11th Cir. 2015). The district court concluded that the requirements of § 20(e) weré met because Sour-lis’s election not to insist on seeing the notes discussed in her opinion letter was at the very least reckless (see Tr. 36-37 (“even if it were not intentionally done, it was so reckless,” in light “of its importance to the transaction”)), and that her misrepresentations that she had spoken to the original note holders were misrepresentations as to her knowledge and hence were knowingly false (see id. at 35-36).

We see no error in the district court’s rejection of Sourlis’s arguments. Sourlis’s letter began by stating that her “opinion has been requested with respect to the issuance of shares (the ‘Shares’) ... upon the conversion of [certain] ... Convertible Notes” (Sourlis Letter at 1), and it concluded that “the Shares underlying the Note ⅛⅛] may be issued ... without a legend pursuant to the Securities Act” (id. at 2 (emphasis in original)). Between stating its purpose and its legal conclusion, the “letter represented as fact matters that were contrary to fact”; Sourlis represented in the letter more than once that she “had spoken to the original note-holders,” a representation as to her own “knowledge,” although “there is no dispute that in fact she did not speak to those original note-holders”; thus, a “critical statement of fact underpinning the opinion” was false because “no original note-holders existed and indeed no notes existed” (Tr. 35). The Sourlis Letter itself makes clear that its purpose was to state whether unrestricted stock could be issued in exchange for the supposed notes. Its misrepresentations underlying its conclusion that such shares could, consistent with the Securities Act, be issued without a restrictive legend plainly enabled Frohling to instruct Green-stone’s transfer agent to issue, in exchange for nonexistent notes, unrestricted stock that was then sold by the recipients. The district court did not err in ruling as a matter of law that Sourlis, in violation of § 20(e), aided and abetted violations of § 10(b) and Rule 10b-5.

The district court subsequently ruled that Sourlis’s knowingly false statements that she had spoken to the note holders, along with her misrepresentations as to facts she had not verified, also warranted holding her liable as a primary violator of § 10(b) and Rule 10b-5. (See Hearing Transcript July 21, 2015, at 4, 21-22.) That ruling, reflected in the Superseding Final Judgment, is amply justified by the record described above.

In No. 14-2937, the SEC cross-appealed to challenge so much of the district court’s November 20 Order as had denied its motion for. partial summary judgment holding Sourlis liable under § ' 10(b) and Rule 10b-5 as a primary violator. Since the Superseding Final Judgment holds Sourlis liable under those provisions as a primary violator, the SEC’s cross-appeal is moot.

B. Relief

“Once the district court has found federal securities law violations, it has broad equitable power to fashion appropriate remedies,” SEC v. First Jersey Securities, Inc., 101 F.3d 1450, 1474 (2d Cir. 1996) (‘‘First Jersey”), cert. denied, 522 U.S. 812, 118 S.Ct. 57, 139 L.Ed.2d 21 (1997), and its choice of remedies is reviewable for abuse of discretion, see, e.g., id. at 1474-77; SEC v. Contorinis, 743 F.3d 296, 301 (2d Cir. 2014), cert. dismissed, — U.S. -, 136 S.Ct. 531, 193 L.Ed.2d 419 (2015). Sourlis, in addition to denying any responsibility in connection with the unlawful issuance of the 6,150,000 shares to which her opinion letter pertained, argues that that letter was a onetime occurrence that did not warrant a civil penalty or injunctive relief.

Civil monetary penalties are authorized by the Securities Act and the Exchange Act for both deterrent and punitive purposes. See, e.g., SEC v. Razmilovic, 738 F.3d 14, 38-39 (2d Cir. 2013). And injunctive' relief is

particularly within the court’s discretion where a violation was founded on systematic wrongdoing, rather than an isolated occurrence, ... and where the court views, the defendant’s degree of culpability and continued protestations of innocence as indications that injunc-tive relief is warranted, since “persistent refusals to admit any wrongdoing ma[k]e it rather dubious that [the offenders] are likely to avoid such violations of the securities laws in the future in the absence of an injunction.”

First Jersey, 101 F.3d at 1477 (quoting SEC v. Lorin, 76 F.3d 458, 461 (2d Cir. 1996) (other internal quotation marks omitted) (emphases ours)).

We see no abuse of discretion here, given the record in this case as to Sour-lis’s lack of concern as to whether her representations of fact were true or false and her continued manifestation of a lack of concern for her responsibilities under the federal securities laws. (See, e.g., Hearing Transcript, April 2, 2014, at 8, 13, 15 (district court’s references to Sour-lis’s “untruths,” her willingness to make statements — with “absolutely no reason” to believe them correct — “on which other people’s money depends,” and her “failure to accept any responsibility”).)

CONCLUSION

We have considered all of Sourlis’s appellate arguments and have found in them no basis for reversal. The district court’s Superseding Final Judgment against Sour-lis is affirmed. The SEC’s cross-appeal in No. 14-2937 is dismissed.