United States v. Michael Kwasnik

                                   PRECEDENTIAL

    UNITED STATES COURT OF APPEALS
         FOR THE THIRD CIRCUIT
              ____________

                  No. 20-3551
                 ____________

        UNITED STATES OF AMERICA

                       v.

             MICHAEL KWASNIK,

                               Appellant


   Appeal from the United States District Court
           for the District of New Jersey
  (D.C. Criminal Action No. 1-17-cr-00052-001)
    District Judge: Honorable Robert B. Kugler


    Submitted under Third Circuit LAR 34.1(a)
               on January 14, 2022

Before: AMBRO, BIBAS and ROTH, Circuit Judges
         (Opinion filed December 8, 2022)
Jason M. Wandner
100 North Biscayne Boulevard
Suite 1607
Miami, FL 33132

             Counsel for Appellant


Mark E. Coyne
Office of United States Attorney
970 Broad Street
Room 700
Newark, NJ 07102
Norman Gross
Office of United States Attorney
Camden Federal Building & Courthouse
401 Market Street
Camden, NJ 08101

             Counsel for Appellee




                OPINION OF THE COURT


ROTH, Circuit Judge.

      In 2018, Michael Kwasnik pleaded guilty to one count
of money laundering, in violation of 

(a)(1)(B)(i). After pleading guilty, he moved to withdraw
his plea, and the District Court denied the motion and




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sentenced him. Kwasnik then filed a notice of appeal. He later
filed three more post-appeal motions in the District Court
concerning his guilty plea. The court denied them.

       The primary question here is whether a party must file
a new or amended notice of appeal when he seeks appellate
review of orders entered by a district court after he filed his
original appeal. Our answer is yes. We do not consider any of
Kwasnik’s arguments concerning those post-appeal orders
because his arguments are not part of this appeal under Fed. R.
App. P. 4(b). As for the issues we may consider, Kwasnik’s
arguments all lack merit. We therefore will affirm in part and
dismiss in part.

                               I.

       Kwasnik was an estate-planning attorney who
defrauded his clients and then laundered their funds.
Specifically, he used his position as an attorney to convince
certain clients to open irrevocable family trusts in order to
avoid federal and state taxes and to ensure that they earned
interest on the funds. As part of his representation, Kwasnik
described how he would form the trusts and name himself as a
trustee. He made sure that he had authority to move assets into
and out of the trust accounts and that he received the account
statements.

       However, this all was a ruse. Kwasnik moved the funds
from his clients’ trust accounts to accounts of entities that he
controlled. Within a matter of days, the funds transferred by
Kwasnik to his own entities’ accounts would be depleted.
Clients were defrauded of approximately $13 million.




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       In 2017, a grand jury returned a twenty-two-count
indictment against Kwasnik. A year later, he pleaded guilty to
just one count of money laundering. In 2020, he moved to
withdraw that plea. The District Court denied the motion and
sentenced Kwasnik to 216 months in prison. He appealed.
After filing the appeal, Kwasnik brought three more motions
in the District Court to withdraw his guilty plea. The District
Court denied all three. He never filed a notice of appeal of the
orders denying his post-appeal motions, nor did he amend his
original notice to include these post-appeal orders.

                                II.

        The District Court had subject-matter jurisdiction under

. The parties dispute whether we have
appellate jurisdiction over the denial of the post appeal
motions. We have jurisdiction to determine our own
jurisdiction.1

       The government and Kwasnik agree that we have
appellate jurisdiction over the District Court’s order denying
Kwasnik’s first motion to withdraw his guilty plea. The parties
also agree that we have appellate jurisdiction over two
sentencing issues that Kwasnik failed to preserve. We agree
with the parties that we have jurisdiction over these claims, and
we will exercise our appellate jurisdiction under 

 and 

(a).

1
 See, e.g., LeBoon v. Lancaster Jewish Cmty. Ctr. Ass’n, 

 (3d Cir. 2007) (“We have jurisdiction to review
our own jurisdiction when it is in doubt.”); see also Fed. R.
App. P. 4(b)(5) (“The filing of a notice of appeal under this
Rule 4(b) does not divest a district court of jurisdiction . . ..”).




                                 4
        The parties disagree, however, about whether Kwasnik
needed to appeal the orders denying his post-appeal motions.
Kwasnik filed his only notice of appeal on December 16, 2020.
In the notice, he identified the judgment of sentence. After
Kwasnik filed that notice, he filed three more motions in the
District Court. A notice of appeal naming the final judgment
in its text, as done here, supports “review of all earlier orders
that merge in the final judgment.”2 A notice of appeal cannot,
however, encompass any order concerning a motion filed in the
district court after the notice of appeal was filed.3

       Following logic’s commands and our sister circuits’
lead, we hold that a notice of appeal can encompass only those
orders decided before the notice was filed. Fed. R. App. 4(b)
governs criminal appeals and is an inflexible claims-processing
rule.4 To appeal an order decided by a district court after the

2
  Siloam Springs Hotel, L.L.C. v. Century Sur. Co., 

 (10th Cir. 2018) (emphasis added).
3
  See, e.g., United States v. Sadiq, 

 (6th
Cir. 2014) (“When a notice of appeal is filed before the district
court’s order denying the defendant’s motion to withdraw his
guilty plea, the notice of appeal is . . . ineffective with respect
to appealing the order deciding the motion to withdraw the
plea.” (emphases added)); United States v. Naud, 

 (7th Cir. 1987) (per curiam) (dismissing appeal when
appellant never filed a new or amended notice of appeal
concerning a motion decided after appellant filed the original
notice of appeal).
4
  See Fed. R. App. P. 4(b); Virgin Islands v. Martinez, 

, 326–29 (3d Cir. 2010); see also United States v. Randall,

 (10th Cir. 2011) (holding that “[u]nlike
in civil cases, a timely appeal in a criminal case is not




                                5
original notice is filed, a party must either file a new notice or
amend the notice already filed.

       Here, Kwasnik did neither. Thus, he never appealed the
District Court’s post-appeal orders denying the motions.5 And
he offers no reason why we should permit him to make such
arguments now. For that reason, Kwasnik’s arguments
challenging the denials of those post-appeal motions will be
dismissed because they are not part of this appeal under Rule
4(b).

                               III.

       Next, we turn to the claims that we consider on the
merits. There are three: whether the District Court abused its
discretion when it denied Kwasnik’s pre-appeal motion to
withdraw his plea; whether it plainly erred when it applied the
abuse-of-a-position-of-trust enhancement to his sentence; and
whether it plainly erred when it used a purportedly void default
judgment to calculate the loss caused by Kwasnik.

                               A.

      We begin with Kwasnik’s challenge to the District
Court’s order denying his pre-appeal motion to withdraw.6 To


jurisdictional, but rather an ‘inflexible claim-processing [sic]
rule’”).
5
  See Fed. R. App. P. 4(b); see also United States v. Randall,

 (10th Cir. 2011); Lizardo v. United States,

 (3d Cir. 2010).
6
  We review such orders for abuse of discretion. See, e.g.,
United States v. Martinez, 

 (3d Cir. 1986).




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permit a defendant to withdraw his guilty plea, the defendant
must “show a fair and just reason for requesting the
withdrawal.”7 Factors that a district court may consider
include whether the defendant is asserting his innocence, the
strength of the defendant’s reasons for withdrawing his plea,
and whether the government would suffer prejudice because of
the withdrawn plea.8 “Bald assertions of innocence . . . are
insufficient to permit a defendant to withdraw [his] guilty plea.
Assertions of innocence must be buttressed by facts in the
record that support a claimed defense.”9 Additionally, a
defendant seeking to withdraw his guilty plea must “give
sufficient reasons to explain why contradictory positions were
taken before the district court and why permission should be
given to withdraw the guilty plea.”10

        Kwasnik’s pre-appeal motion to withdraw focused on
evidence that Kwasnik says was newly discovered.
Specifically, he contends that the purportedly new evidence
shows that someone other than him was responsible for losses
suffered by at least one of the victims. The District Court
rejected that contention, finding that it did not “think any of
this evidence is newly discovered.”11 Instead, it found that the
evidence Kwasnik claimed was newly discovered was “the


7
  Fed. R. Crim. P. 11(d)(2)(B).
8
  See United States v. Jones, 

 (3d Cir. 2003).
9
   United States v. Brown, 

 (3d Cir. 2001)
(cleaned up).
10
   United States v. Jones, 

 (3d Cir. 1992),
superseded on other grounds by United States v. Roberson, 

 (3d Cir. 1999).

.




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same stuff that [he has] been preaching about for years.”12 In
addition, the District Court found that Kwasnik failed to make
“a legitimate assertion of innocence here. He has not rebutted
a single fact he testified to under oath in this matter.”13 The
lower court reached that conclusion after briefing and
extensive argument. We cannot say that its “action was
arbitrary, fanciful, or clearly unreasonable.”14 In short, it did
not abuse its discretion. We will affirm its properly appealed
order denying Kwasnik’s motion to withdraw his guilty plea.

                               B.

        We turn to Kwasnik’s two attacks on his sentence.
Because he never preserved them in the District Court, we
review for plain error.15 To satisfy the rigorous plain-error
standard, a defendant must show that (1) the district court
erred, (2) the district court’s error was plain—obvious under
the law at the time of the error, and (3) the error affected his
substantial rights—meaning, the proceeding’s outcome.16
When all three elements are satisfied, we have discretion to
remedy the error only if it “seriously affects the fairness,
integrity, or public reputation of judicial proceedings.”17

       First, Kwasnik contends that the District Court plainly
erred by applying the two-level abuse-of-a-position-of-trust

12
   

13
   

14
   Stich v. United States, 

 (3d Cir. 1984)
(cleaned up).
15
   United States v. Jabateh, 

 (3d Cir. 2020).
16
   Johnson v. United States, 

 (1997).
17
   

 (internal quotation marks omitted).




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enhancement under U.S.S.G. § 3B1.3 to his money-laundering
offense. He contends that he agreed to the enhancement before
our decision in United States v. Capps,18 in which we held that
the enhancement can be applied to money-laundering offenses
only when “the abuse of a position of trust has [been]
manifested in how the money is laundered, not in how the
money [is] gained.”19 According to Kwasnik, the enhancement
applied to him is improper under Capps because he used his
position of trust as an attorney and trustee to gain the funds
from his clients, not to launder those funds.

       We will first note that a “guilty plea does not
automatically become tainted if a change in the law alters a
variable that the defendant considered when he decided to
plead guilty.”20 On that basis alone, there is no plain error.
Moreover, the Plea Agreement here provided that “[t]he parties
agree that Michael Kwasnik abused a position of trust in
committing his offenses.”21 This admission by Kwasnik was
one condition, among other terms, that induced the government
to agree to accept a guilty plea from him on one count of money

18
   

 (3d Cir. 2020).
19
   

.
20
   United States v. Robinson, 

 (D.C. Cir.
2009); see also United States v. Sahlin, 

 (1st
Cir. 2005) (noting that “the possibility of a favorable change in
the law occurring after a plea is one of the normal risks that
accompany a guilty plea”); cf. Brady v. United States, 

 (1970) (noting that a “defendant is not entitled to
withdraw his plea merely because he discovers long after the
plea has been accepted that his calculus misapprehended . . .
the likely penalties attached to alternative courses of action.”).
21
   Plea Agreement with Michael Kwasnik, Schedule A, ¶ 6.




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laundering and to drop the other 21 counts of wire fraud, mail
fraud, and money laundering.          In addition, Kwasnik
acknowledged in the Plea Agreement that the United States
Sentencing Guidelines are advisory and that the sentencing
judge “may impose any reasonable sentence up to and
including the statutory maximum term of imprisonment and
the maximum statutory fine.”22 The sentence imposed was
within those limits. Under these circumstances, we do not find
error—much less plain error—in the inclusion by the District
Court of breach of trust as an element in determining
Kwasnik’s sentence.

        Second, Kwasnik argues that the District Court plainly
erred when it used a purportedly void state-court default
judgment to calculate the amount of the loss that his offense
caused. On appeal, he claims that the default judgment against
him by the New Jersey and the Pennsylvania Client Funds was
void because he never received notice of it due to defects in
service. We reject Kwasnik’s argument because there was
evidence that he knew of the judgment. Moreover, the
government presented testimony from three witnesses who
established losses before the District Court. Given that
testimony, there was sufficient evidence to support the loss
calculation, regardless of whether the default judgment was
considered or not. Kwasnik has not made any attempt on
appeal to address the testimony of these three witnesses or to
demonstrate that, without consideration of the default
judgment, the amount of loss would be different. Again, there
is no error—and it follows that there is no plain error.




22
     Plea Agreement with Michael Kwasnik, page 2.




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                             IV.

       Kwasnik never filed a timely notice of appeal from the
orders denying his post-appeal motions. We will therefore
dismiss those arguments pursuant to Fed. R. App. P. 4(b). As
for Kwasnik’s claims that we address on the merits, we
conclude that there was no error. Thus, for the reasons stated
above, we will affirm in part and dismiss in part Kwasnik’s
appeal.




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