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11th Circuit upholds Atlanta attorney’s conviction in embezzlement scheme

The former attorney failed to convince the appeals court that his conviction was not supported by evidence or that his 15-year sentence was excessive, but the panel ordered his co-conspirator to be resentenced due to an error by the district court.

ATLANTA (CN) — The 11th Circuit on Tuesday upheld the conviction of an attorney found guilty of orchestrating large-scale corporate fraud but vacated his restitution order along with that of his former law firm's accounting manager, whose sentence was remanded.

Atlanta real estate attorney Nathan Hardwick was charged with 34 counts, including wire fraud, conspiracy, bank fraud, and false statements to federally insured financial institutions. A federal jury convicted him on most of the charges in October 2018 after prosecutors presented evidence that millions of client dollars were spent on gambling, private jets and personal loans.

Hardwick served as managing partner Morris Hardwick Schneider LLC and CEO of LandCastle Title LLC, which are collectively referred to as MHS.

He was sentenced in 2019 to 15 years in prison and six years of supervised release by U.S. District Judge Eleanor Louise Ross, who also ordered Hardwick and his alleged co-conspirator Asha Maurya to pay over $40 million in restitution.

Maurya managed the business's accounting operations under Hardwick's supervision and was also charged with wire fraud, conspiracy and mail fraud, resulting in a sentencing of seven years in prison with three years of supervised release.

Hardwick's attorneys, Kristen Novay and Edward Garland, argued to the 11th circuit in December that the district court's restitution order was not supported with the reasoning required by law and that it had rejected vital evidence. It asked the court to overturn his conviction and remand for a new trial, or alternatively to remand for resentencing.

Although Maurya pleaded guilty to conspiracy to commit wire fraud, she joined Hardwick’s challenge of the restitution order. Her attorney, Jeffrey Chen, argued that the district court violated the ex post facto clause of the U.S. Constitution by applying a sentencing enhancement passed after she committed the offense.

The Atlanta-based 11th Circuit on Tuesday ordered for Maurya to be resentenced, agreeing that the district court made an error by using the 2018 sentencing guidelines, which included a substantial financial hardship enhancement added in 2015, considering Maurya’s offense took place around August 2014.

"With no extenuating circumstances to suggest otherwise, we hold that the error here affected Maurya’s substantial rights. And while defendants usually face an uphill climb in showing that an error seriously affects the fairness, integrity, or reputation of a judicial proceeding, 'proof of a plain guidelines error that affects the defendant’s substantial rights is sufficient to meet that burden',” wrote U.S. Circuit Judge Britt Grant.

Due to lack of support from "specific factual findings," the three-judge panel also vacated the district court's restitution order requiring Maurya and Hardwick to pay $40.3 million.

However, Hardwick's conviction was upheld by the panel, which ruled that "the government offered substantial evidence to support its allegations that Hardwick intentionally participated in a scheme to defraud MHS."

At trial, Hardwick argued that Maurya deceived him and that she was the mastermind behind the scheme by forging bank statements to transfer money to herself. To prove his claim, Hardwick attempted to use a suicide note from a former romantic partner and co-worker, a video of Maurya lying to a former employer, and testimonies from four of her employers from each company where she worked.

Hardwick argued the district court "gutted" his defense by limiting this evidence to testimony from two of Maurya’s former employers, but the 11th Circuit disagreed.

“‘A district court may limit the number of defense witnesses’ when the proposed testimony ‘would be cumulative,’” wrote Grant, a Donald Trump appointee. “That’s what happened here.”

The panel further rejected Hardwick's contention that the district court allowed evidence it should not have when it admitted a chart showing the company's net income from 2011 to 2013 and payments made to Hardwick during that same period. The former attorney also came up short on his claim that he was not sufficiently informed of the charges against him.

"He was fully aware of the crimes he was being charged with and had adequate time and information to plan his defense," the ruling states.

The appeals court also upheld Hardwick's sentence, dismissing his claim that the lower court failed to properly weigh his “overwhelming positive characteristics."

"Ultimately, the court found that the factors in Hardwick’s favor simply did not outweigh those supporting a longer sentence.
It imposed an upward variation in light of Hardwick’s 'egregious behavior,' his 'lack of remorse,' and the fact that his crimes 'affected so many other people who suffered so many losses as a result,'" Grant wrote.

Grant was joined on the panel by Senior U.S. Circuit Judge Lanier Anderson III, a Jimmy Carter appointee, and U.S. Circuit Judge William Pryor Jr., appointed by George W. Bush.

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Categories / Appeals, Business, Criminal, Law

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