Submitted: October 19, 2018
from United States District Court for the District of
Minnesota - Minneapolis
SHEPHERD, KELLY, and STRAS, Circuit Judges.
Reichel appeals from his convictions for wire fraud, filing
for bankruptcy for the purpose of executing a scheme to
defraud, and making false statements in relation to
bankruptcy proceedings. Upon careful consideration of the
issues presented, we affirm the judgment of the district
case stems from Reichel's operation of PureChoice, Inc.,
a business that developed indoor air quality monitoring
systems. Reichel founded PureChoice in 1992. During his
tenure as president and CEO, Reichel obtained millions of
dollars in bank loans for the company. PureChoice, having not
yet turned a profit, was unable to pay back these loans.
Reichel approached private investors, seeking and obtaining
bridge loans, many of which he personally guaranteed. Reichel
told the investors that PureChoice would use the money to
restructure its debt and to fund its operations until it
could reach profitability. What Reichel didn't tell the
investors was that PureChoice was already in default on many
of its bank loans, with collection actions threatened or
pending against the company and himself-which is the type of
information that PureChoice's lawyer urged him to
disclose and that several investors indicated would have
caused them to rethink their decisions to invest.
obtaining bridge loans under false pretenses, Reichel did not
attempt to pay them back until threatened with collection
actions. Nor did he primarily use the loans to fund
PureChoice operations, as he had promised. Instead, he paid
off earlier loans, paid himself a large salary and bonuses,
and occasionally instructed PureChoice employees to simply
write him checks for tens of thousands of dollars in company
funds. He did the same with the millions of dollars in stock
sales that he collected from some of the same investors.
2010, Reichel was forced out of the company after an employee
discovered that he had been stealing money. Soon after, one
of PureChoice's investors, George Anderson, filed suit
against Reichel to recover $1.5 million in unpaid loans.
Reichel's stated defense was that payment on the loans
was not due until May 2011. Anderson's counsel agreed to
delay filing his summary judgment motion until May, giving
Reichel an opportunity to pay off the debt. But on April 29,
2011, Reichel filed for bankruptcy under Chapter 7, thus
automatically staying Anderson's collection action.
the course of the bankruptcy proceedings, the trustee
discovered that Reichel had failed to disclose household
goods worth at least $97, 000, the sale of utility equipment,
the transfer of $212, 000 to an account in the name of
"Reichel Investments, LP," and the fact that he was
using the Reichel Investments account to pay his personal
expenses. The trustee asked the bankruptcy court to deny
discharge due to fraudulent activity. In 2012, Reichel waived
his right to discharge.
2014, Reichel was indicted on seven counts of wire fraud in
connection with the PureChoice investments, in violation of
18 U.S.C. § 1343. In 2015, the government filed a
superseding indictment, which added five new counts related
to Reichel's failed bankruptcy proceedings: one count of
filing for bankruptcy for the purpose of executing a scheme
to defraud, in violation of 18 U.S.C. § 157; three
counts of making a false statement in relation to bankruptcy
proceedings, in violation of 18 U.S.C. § 152(3); and one
count of concealing a tax refund that was bankruptcy estate
property, in violation of 18 U.S.C. § 152(1).
found Reichel guilty on all counts except the concealment of
a tax refund. At sentencing, the district court applied
multiple enhancements to Reichel's offense level,
resulting in a Guidelines range of 262 to 327 months. It
sentenced Reichel to 264 months of imprisonment. Reichel
appeals, challenging several of the district court's
decisions before and after trial and at sentencing.
first contends that the district court erred in denying his
pretrial motion to sever the wire fraud counts from the
bankruptcy-related counts. He argues that the counts were
misjoined under Federal Rule of Criminal Procedure 8(a),
which allows for joinder of separate counts only where the
offenses "are of the same or similar character, or are
based on the same act or transaction, or are connected with
or constitute parts of a common scheme or plan."
"The propriety of joinder is . . . determined from the
face of the indictment." United States v.
Massa, 740 F.2d 629, 644 (8th Cir. 1984), overruled
on other grounds by United States v. Inadi, 475 U.S. 387
(1986). Rule 8(a) is "broadly construed in favor of
joinder." United States v. Colhoff, 833 F.3d
980, 983 (8th Cir. 2016) (quoting United ...