3rd Circuit: Estate Planning Attorney Sentenced to 18 Years in Prison May Not Withdraw Guilty Plea

In a precedential Dec. 8 opinion, the U.S. Court of Appeals for the Third Circuit held that a party must file a new or amended notice of appeal when seeking review of orders entered by a district court after the filing of an original appeal.

Michael Kwasnik, an estate planning attorney licensed in New Jersey and Pennsylvania, defrauded his clients and laundered their funds, according to the opinion. Kwasnik used his position as an attorney to name himself as a trustee with the authority to move assets in and out of the trust accounts.

“However, this all was a ruse,” Judge Jane Roth said.

“Kwasnik moved the funds from his clients’ trust accounts to accounts of entities that he controlled,” Roth said. “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.”

In 2017, a 22-count grand jury indictment against Kwasnik was returned, according to the opinion. One year later, Kwasnik pleaded guilty. But then in 2020, he moved to withdraw that plea. That motion was denied by the U.S. District Court for the District of New Jersey.

Kwasnik was sentenced to 216 months in prison, according to the opinion. After filing an appeal, Kwasnik brought three more motions to withdraw his guilty plea, all of which were denied.

“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,” Roth said.

Roth stated that the parties dispute whether the Third Circuit has appellate jurisdiction over the denial of the post-appeal motion, but cited LeBoon v. Lancaster Jewish Community Center Association, and concluded that the Third Circuit has jurisdiction to determine its own jurisdiction when it is in doubt.

The government and Kwasnik agreed that the Third Circuit has jurisdiction over both the district court’s order denying Kwasnik’s first motion to withdraw his guilty plea and the two sentencing issues that he failed to preserve, according to the opinion. But they disagree over whether Kwasnik needed to appeal the orders denying his post-appeal motions.

According to Roth, after Kwasnik filed a notice identifying the judgment of sentence, he filed three more motions in 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,’” Roth said. “A notice of appeal cannot, however, encompass any order concerning a motion filed in the district court after the notice of appeal was filed.

“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,” Roth said. “Fed. R. App. 4(b) governs criminal appeals and is an inflexible claims-processing rule.

“To appeal an order decided by a district court after the original notice is filed, a party must either file a new notice or amend the notice already filed,” Roth said.

According to Roth, Kwasnik did neither.

Roth dismissed Kwasnik’s arguments challenging the denials of the post-appeal motions because, under Rule 4(b), they are not part of this appeal. Kwasnik never appealed the district court’s post-appeal orders denying the motions and gave no reason as to why the court should allow him to make such arguments now, according to Roth.

Only three claims, Roth said, may be considered on the merits—whether the district court abused its discretion in denying 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.

Roth stated that, to permit a defendant to withdraw a guilty plea, a district court may consider whether the defendant is asserting his innocence, the strength of the defendant’s reasons for withdrawing the plea, and whether the government would suffer prejudice because of the withdrawn plea.

“Kwasnik’s pre-appeal motion to withdraw focused on evidence that Kwasnik says was newly discovered,” Roth said. ”The District Court rejected that contention, finding that it did not ‘think any of this evidence is newly discovered.’”

Roth said the the district court reached its decision to deny Kwasnik’s motion to withdraw “after briefing and extensive argument,” and found the court did not abuse its discretion.

Roth found no plain error in the district court’s application of an abuse-of-a-position-of-trust enhancement to his sentence for money laundering. The plea agreement provided that “the parties agree that Michael Kwasnik abused a position of trust in committing the offenses.”

“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 laundering and to drop the other 21 counts of wire fraud, mail fraud, and money laundering,” Roth said.

The sentence imposed was within the limits of the U.S. Sentencing Guidelines agreed to in the plea agreement, according to Roth, and therefore there is no plain error.

Kwasnik next argued that the district court plainly erred by using a purportedly void state-court judgment to calculate the amount of loss his offense caused, according to Roth.

“We reject Kwasnik’s argument because there was evidence that he knew of the judgment,” Roth said. “Moreover, the government presented testimony from three witnesses who established losses before the District Court.”

Roth concluded that as to claims the court addressed on the merits, there was no error. As to the appeal from the orders denying his post-appeal motions, Roth stated that Kwasnik never filed a timely notice of appeal and those arguments are dismissed.

Judges Thomas L. Ambro and Stephanos Bibas joined Roth in affirming in part and dismissing in part Kwasnik’s appeal.

Counsel to Kwasnik, solo attorney Jason M. Wandner, did not immediately response to a request for comment. The Office of the U.S. Attorney declined to comment for this article.