ATLANTA (CN) — The 11th Circuit heard arguments Tuesday in an appeal from an attorney and his former law firm's accounting manager, who were charged for conspiring to defraud the firm out of millions of dollars.
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.
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 to forfeit over $19.9 million in proceeds.
Hardwick served as managing partner Morris Hardwick Schneider LLC and CEO of LandCastle Title LLC, which are collectively referred to as MHS.
Asha Maurya managed the business's accounting operations under Hardwick's supervision. She was also charged with wire fraud, conspiracy and mail fraud, resulting in a sentencing of seven years with three years of supervised release and a forfeiture of $900,000.
The jury found that from 2011 to 2014, Hardwick directed Maurya to make distributions, bonuses, and other payments to and forth for his benefit from MHS's bank accounts. Payments included were made to casinos, private jet charter companies, credit card issuers and payments on his personal loans.
These payments were made by interstate wire transfers of funds from MHS's accounts. Prosecutors said Hardwick and Maurya created and distributed false financial information and false shareholder distribution reports. Hardwick then attempted to hide the fact, by falsifying applications to obtain loans to repay the stolen money.
Hardwick appealed his conviction to the Atlanta-based 11th Circuit. His attorneys Kristen Novay and Edward Garland argue that Maurya was also responsible for schemes of her own that their client was not aware of.
"There is a lack of substantial evidence, viewed in the light most favorable to the government, from which a reasonable fact-finder could find beyond a reasonable doubt, that a conspiracy ever existed, much less that Hardwick willfully joined a
conspiracy with Maurya," according to Hardwick's brief submitted to the court.
The brief alleges Maurya deceived employees into signing checks for business expenses when they were actually issued to her.
Hardwick claims that he put Maurya on administrative leave after she forged a bank statement and moved $680,000 into an operating account from an escrow account, without his knowledge.
He also says that Maurya directed two employees to mask shortages in the escrow accounts, and that after this discovery, he notified his minority partners, Mark and Gerard Wittstadt, about it and offered to pay them back out of his own money.
"Mr. Hardwick was deceived by Asha's scheme," Novay said during oral arguments Thursday.
Novay also argued that the district court had "denied vital evidence" in the case, including a video of Maurya lying to a prior employer as "an example of how she manipulated her bosses" and a note from Maurya’s lover and fellow co-worker, stating that although he received money from her scheme, he had not realized she was stealing.
Senior U.S. Circuit Judge Lanier Anderson III, a Jimmy Carter appointee, said the excluded evidence seems "irrelevant." He was joined on the appellate panel by U.S. Circuit Judges William Pryor Jr. and Britt Grant, appointed by George W. Bush and Donald Trump, respectively.
Hardwick's 180-month sentence was handed down after he unsuccessfully asked the lower court to sentence him to 96 months based on "the nature and circumstances of the offense, in that it occurred mainly due to bad business decisions and his failure to
impose proper oversight over his and his firm’s finances." He also pointed to "his favorable personal background and attributes, such as his lengthy and esteemed legal background, close community ties and support, and his lack of a previous criminal past."
Novay said Thursday she hopes the 11th Circuit will overturn the conviction and remand for a new trial. Alternatively, Hardwick requests that the court vacate his prison term and restitution order and remand for resentencing.
Maurya and her defense attorney, Jeffrey Chen, presented a different argument to the court, arguing for the judges to reduce her prison sentence.
Chen argued that Maurya's sentence violated her constitutional rights under the ex post facto clause because the version of the sentencing guidelines used at the time of her sentencing hearing included a higher punishment range than the version in place at the time of the offense.
According to Maurya’s brief, her “total offense level would have been 18 under the 2013 guidelines, but the substantial financial
hardship enhancement—which was added to the guidelines in 2015—boosted her total offense level to 20 under the 2018 guidelines. And as a result, the 2018 guidelines provided a higher sentencing range for Maurya (33 to 41 months) than the 2013 guidelines (27 to 33 months)." (Parentheses in original.)
Chen argued that the 11th Circuit should vacate his client's sentence and remand for resentencing under the 2013 guidelines. Maurya’s attorneys also contend she fully cooperated with the government by pleading guilty and that she had a smaller role in the underlying scheme than Hardwick.
U.S. Assistant Attorney Rebeca Ojeda argued that the government's discovered evidence of more than 4.7 million pages of emails, bank and business records from numerous sources were presented fairly to the district court.
The judges did not indicate when they would issue a ruling.
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