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United States v. Rothstein

United States Court of Appeals, Eleventh Circuit

September 30, 2019

SCOTT ROTHSTEIN, Defendant-Appellant.

          Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 0:09-cr-60331-JIC-1

          Before TJOFLAT, WILLIAM PRYOR and GRANT, Circuit Judges.

          TJOFLAT, Circuit Judge.

         Scott Rothstein, a federal prisoner, appeals the District Court's grant of the Government's motion to withdraw a prior motion made pursuant to Federal Rule of Criminal Procedure 35, which allows the Government to recommend a reduction in sentence if the defendant "provided substantial assistance in investigating or prosecuting another person." Rothstein argues (1) that his plea agreement with the Government did not give the Government any discretion to withdraw a Rule 35 motion, and (2) that he should have been entitled to an evidentiary hearing in the District Court on the Government's motion to withdraw. Neither of Rothstein's arguments are meritorious. We affirm the judgment of the District Court.


         A criminal information filed on December 1, 2009, charged Scott Rothstein, a former attorney and chairman of a law firm, with using his firm to perpetuate a Ponzi scheme. Rothstein was charged with: racketeering, in violation of 18 U.S.C. § 1962(d); conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); conspiracy to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 1349; and two counts of wire fraud, in violation of 18 U.S.C. § 1343.

         Rothstein would eventually plead guilty to all the above counts, but before doing so, he entered into a written cooperation agreement with the Government. In the agreement, Rothstein promised to cooperate by:

(a) providing truthful and complete information and testimony, and producing documents, records, and other evidence, when called upon by [the Government], whether in interviews, before a grand jury, or at any trial or other court proceeding;
(b) appearing at such grand jury proceedings, hearings, trials, and other judicial proceedings, and at meetings, as may be required by [the Government]; and
(c) if requested by [the Government], working in an undercover role to contact and negotiate with others suspected and believed to be involved in criminal misconduct under the supervision of, and in compliance with, law enforcement officers and agents.

Rothstein agreed that the Government would have "sole and unreviewable" discretion to determine the "quality and significance" of Rothstein's cooperation in any investigation or prosecution. The agreement stated that, if the Government evaluated Rothstein's cooperation favorably, it "may . . . make a motion . . . [under] Rule 35 of the Federal Rules of Criminal Procedure subsequent to sentencing . . . recommending that the defendant's sentence be reduced, " but noting that "nothing in this Agreement may be construed to require [the Government] to file any such motion." Rothstein moved to have the cooperation agreement filed under seal, and stated in his motion that the agreement "is intended to be part of the Plea Agreement in this matter."

         On June 9, 2010, the District Court sentenced Rothstein to 600 months' imprisonment and three years of subsequent supervised release. Almost one year later, on June 8, 2011, the Government filed a motion for reduction of sentence under Rule 35. The motion stated that while Rothstein's "cooperation is not yet complete and will not be complete within one year of [his] initial sentencing, " the Government was filing this motion "in an abundance of caution" to "preserve this Court's jurisdiction under Fed. R. Crim. P. 35(b)(1)."[1] Accordingly, the Government asked the Court not to rule on this motion until the Government filed a motion to hold a hearing to "advise the Court of the nature, extent, and value of [Rothstein's] cooperation." Further, the motion indicated that the Government "expressly reserves the right to withdraw this motion if, in the judgment of the [Government], [Rothstein] should fail to comply with the terms of his plea agreement, fail to testify truthfully, or falsely implicate any person or entity." Rothstein's attorney joined in the filing of the motion.

         More than six years passed. At some point during this period, the Government concluded that Rothstein "provided false material information to [the Government] and violated the terms of his plea agreement." Accordingly, on September 26, 2017, it moved to withdraw the Rule 35 motion that had not yet been considered by the District Court. The Government reiterated its "sole discretion" to evaluate Rothstein's cooperation and its "expressly reserved . . . right to withdraw" the Rule 35 motion, which it described as a "placeholder motion" intended to prevent the expiration of the one-year time limit after sentencing for Rule 35(b)(1) motions. Rothstein disputed that the Government had the power to withdraw the motion and requested, at a minimum, that the District Court hold an evidentiary hearing on the matter. The District Court granted the Government's request and withdrew the substantial-assistance motion over Rothstein's objections.

         Rothstein appealed. He principally contends that the Government breached the cooperation agreement because any discretion that the Government reserved for itself in that agreement ended when the Government filed its "placeholder" Rule 35 motion in June 2011. If the Government wanted to give itself the right to withdraw a Rule 35 motion, Rothstein argues, it "should have included [it]" in the cooperation agreement. He contends that because the word "withdraw" is not to be found within the language of the cooperation or plea agreements, the Government could not, consistent with the agreement, withdraw an already-filed Rule 35 motion. Without such language, Rothstein says, he was not adequately warned that the Government could withdraw a substantial-assistance motion. Finally, Rothstein argues that the District Court needed to hold an evidentiary hearing to determine whether Rothstein had actually breached the cooperation agreement, in light of his assertion that he provided "extraordinary assistance" to the Government's ...

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