Source: http://openjurist.org/324/f3d/330/united-states-v-griffin
Timestamp: 2017-06-29 13:23:27
Document Index: 267924270

Matched Legal Cases: ['§ 666', '§ 666', '§ 666', '§ 1956', '§ 371', '§ 666', '§ 666', '§ 666', '§ 1956', '§ 1341', '§ 1341', '§ 572', '§ 1956', '§ 572', '§ 36', '§ 1341', '§ 1341', '§ 1341', '§ 1341', '§ 42', '§ 1346', '§ 1341', '§ 1341', '§ 2', '§ 666', '§ 371', '§ 1956', '§ 2', '§ 2', '§ 666', '§ 666', '§ 1956', '§ 2', '§ 666', '§ 2', '§ 2', '§ 3', '§ 3', '§ 2', '§ 2', '§ 3663', '§ 3663']

324 F3d 330 United States v. Griffin | OpenJurist
324 F. 3d 330 - United States v. Griffin HomeFederal Reporter, Third Series324 F.3d
324 F3d 330 United States v. Griffin 324 F.3d 330
UNITED STATES of America, Plaintiff-Appellee,v.Florita Bell GRIFFIN, Terrence Bernard Roberts, Joe Lee Walker, Defendants-Appellants.
No. 01-20368.
Kathlyn Giannaula Snyder (argued), James Lee Turner, Asst. U.S. Attys., Houston, TX, for Plaintiff-Appellee.
Julian R. Murray, Jr. (argued), Chehardy, Sherman, Ellis, Breslin, Murray & Recile, Metairie, LA, for Griffin.
Robert Adren Swearingen, West, Webb, Allbritton, Gentry & Rife, College Station, TX, Lanny D. Ray (argued), Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim, Tacoma, WA, for Roberts.
Appellants Florita Bell Griffin (Griffin), Terrence Bernard Roberts (Roberts), and Joe Lee Walker (Walker) were tried before a jury and found guilty of conspiracy, bribery, money laundering, and mail fraud. On appeal, Griffin, Roberts, and Walker (referred to jointly as "Appellants") challenge the sufficiency of the evidence, a number of the district court's evidentiary rulings, and the calculation of their sentences. In addition, Roberts and Walker contend that they were constructively denied counsel. We AFFIRM in part, REVERSE in part, and REMAND to the district court for proceedings consistent with this opinion.
Mitchell and Roberts formed a partnership named "One Golden Oaks, Ltd.," with Roberts having a 51 percent ownership in the partnership. The record indicates that Mitchell was aware that by doing so, One Golden Oaks, Ltd. would be classified as a historically underutilized business (HUB) because Roberts is African-American, which would result in additional points being awarded to their tax credit application with the TDHCA. Mitchell was to serve as the financial partner, and Roberts was to serve as the managing partner. Mitchell agreed to pay Roberts a weekly salary of $1,250.00 from Mitchell's personal funds for Roberts' services to their partnership.
Subsequent to the incorporation of BHHI, Griffin, Walker, and Roberts held meetings to discuss building Mitchell's and Roberts' housing project, Golden Oaks On Sandy Point Apartments (hereinafter referred to as "the Golden Oaks project"). Those meetings took place on a weekly basis through October 1997. At one of the meetings, Griffin made a list of everyone's duties in the corporation. Hammond's duties were to act as a project supervisor, keep up with material costs, check off on every completed house, schedule tasks, and perform long range planning. Michelle Hammond's duties were administrative support. Roberts was responsible for marketing and sales. Walker's duties were to manage funds, do the bidding on jobs, handle legal work, participate in marketing, handle change orders, and policies and procedures. Griffin's duties were described as to "create opportunity." Significantly, there was never any written consulting agreement between Griffin and BHHI.
Mitchell and Roberts, acting as partners of One Golden Oaks, Ltd., submitted an application for a tax credit allocation for the Golden Oaks project in June 1997.1 The application was filled out in the name of One Golden Oaks, Ltd. as owner/developer. Roberts signed the application as the managing general partner and Mitchell signed as the financial general partner. BHHI was listed as the general contractor with Hammond's signature as president. The plan was to build forty two-story four-plexes consisting of 160 apartments.
BHHI paid back portions of the $19,167.00 to Griffin beginning on September 5, 1997, when it issued a check to Griffin's husband, Richard W. Griffin, from money it received from a construction draw. Griffin's signature was on the back of the check and the memorandum on the check read "soil investigation." An invoice dated August 1997, which was written on "Richard W. Griffin, Ph.D." letterhead, billed BHHI for $5,000.00 for soil investigation on a 108 acre tract in Bryan, Texas. The top of the document had the name of "Genesis Planning, Inc." written on it, which was Griffin's consulting company. Both Hammond and his wife Michelle testified that Richard Griffin never did any work for BHHI.
In early December 1997, Michelle Hammond overheard Roberts, Walker, and Griffin discuss the creation of Lee Commercial Construction Management (LCCM) for the purpose of replacing BHHI as general contractor. After learning of this, Hammond became afraid that he was going to be cut out of the Golden Oaks project. As a result, Hammond decided to tape record the next conversation he had with Roberts and Walker. Hammond first called Roberts and asked if LCCM had been created yet, and Roberts told him no. Hammond also asked if he and Michelle were going to be cut out of the Golden Oaks project or the Shadow Wood project. Roberts told him that they were not being cut out of the projects even though LCCM was being incorporated. Hammond reiterated that he was afraid that he was being cut out of the Golden Oaks project. Roberts responded that he should not be worried because Griffin had no control over who received profits. Roberts also stated that "all [Griffin] got control over is to [sic] keeping us from getting more projects."
Furthermore, Mitchell told Roberts that his attorney found out that the land BHHI purchased from Smith was no longer owned by the corporation, but that it had been deeded to four people. Mitchell noted that one of the deeds was in the name of Bryce Walker and the other was in the name of Johnnie Roberts. When Mitchell asked Roberts how his mother ended up with the land, Roberts said that Hammond owed him $96,000.00. Mitchell also noted that he was aware that Hammond and Arkofa had 21 acres of land. When asked, Roberts denied knowing who owned Arkofa. In response, Mitchell stated that if Arkofa was owned by Griffin or one of her family members, "it's not going to be good, let me tell ya." When Mitchell asked Roberts about the $28,890.65 left over from BHHI's land purchase from Smith, Roberts told Mitchell that he did not receive any of that money and he did not know who got the money.
Count 1 charged Griffin, Roberts, and Walker with conspiracy to: (1) violate 18 U.S.C. § 666(a)(1)(A) relative to theft by fraud of property valued at $5,000.00 or more, which was in the custody and control of the TDHCA; (2) violate 18 U.S.C. § 666(a)(1)(B) relative to accepting something valued at $5,000.00 or more, with the intent to corruptly influence business transactions of the TDHCA; (3) violate 18 U.S.C. § 666(a)(2) relative to corruptly giving something valued at $5,000.00 or more, with the intent to influence business transactions of the TDHCA; and, (4) violate 18 U.S.C. § 1956(a)(1)(B)(i) relative to money laundering; all in violation of 18 U.S.C. § 371 for conspiracy to defraud the United States.4 Count 2 charged Griffin, Roberts and Walker for theft or aiding and abetting a theft from an organization that receives benefits under a federal assistance program in violation of 18 U.S.C. §§ 666(a)(1)(A) and 2. Count 3 charged Griffin with soliciting and accepting a bribe in connection with the business of an organization that receives benefits under a federal assistance program in violation of 18 U.S.C. § 666(a)(1)(B). Count 4 charged Roberts and Walker with bribery of an agent of an organization that receives benefits under a federal assistance program in violation of 18 U.S.C. § 666(a)(2). Count 5 charged Griffin and Walker with money laundering proceeds that were obtained as part of the illegal transactions in Counts 1, 2, and 3, all in violation of 18 U.S.C. § 1956(a)(1)(B)(i). Count 6 charged Griffin, Roberts, and Walker with mail fraud in violation of 18 U.S.C. § 1341 for using the mail to deliver a pre-application for One Golden Oaks to the Honorable Lonnie Stabler, the Mayor of the City of Bryan, Texas. Count 7 charged Griffin and Walker with mail fraud in violation of 18 U.S.C. § 1341 for using the mail to deliver a pre-application for Glen Oaks Village to the Honorable Lonnie Stabler, the Mayor of the City of Bryan, Texas.
A. Whether the district court abused its discretion by allowing Daisy Stiner, director of the TDHCA, to testify on state law provisions; and, if so, whether it was harmless.
Stiner testified on behalf of the government as its first witness. Notably, she was never qualified as an expert witness. Stiner was asked to read from a number of state statutes. Although Griffin's counsel did not object to the reading of the statutes because they were relevant, her counsel did object when the government's lawyer asked Stiner hypothetical questions on the applicability of those statutes. The district court overruled the objection. Griffin asserts that Stiner's answers to the hypothetical questions amounted to giving expert testimony on the law without being qualified as an expert. Although Stiner was not qualified as an expert in the law, she was permitted to give opinion testimony as a lay witness under Rule 701 of the Federal Rules of Evidence, which allows a lay witness to give opinion or inference testimony that is: "(a) rationally based on the perception of the witness, (b) helpful to a clear understanding of the witness' testimony or the determination of a fact in issue, and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702." FED.R.EVID. 701.
We find any error that occurred from the district court allowing Stiner to testify as to the meaning of the law was harmless because her testimony was cumulative of other witnesses' testimony. For example, Karen Lundquist, general counsel for the Texas Ethics Commission, testified to the meaning of "personal or private interest" in a decision before the board under Tex. Govt.Code § 572.058, as did David Mattax, chief of the Financial Litigation Division of the Attorney General's Office. Lundquist also testified on the Ethics Commission's issuance of advisory opinions under the Texas Government Code. In addition, Griffin called Larry Paul Manley, an attorney and CEO of TDHCA, to testify on his opinion of state ethics law as to a board member's having an interest in the proposal before the board. Therefore, viewing the record in its entirety and the cumulative nature of Stiner's testimony, the error that occurred was harmless.
B. Whether the district court abused its discretion in allowing F.B.I. Agent Martin to testify and use a chart to give an overview of the case; and, if so, whether it was harmless.
Griffin also contends that the district court abused its discretion in allowing Martin to give "conclusionary hearsay testimony on ultimate jury issues that were crucial to the case." As noted above, we review a district court's evidentiary rulings for abuse of discretion. Miranda, 248 F.3d at 440. We consider any errors under the harmless error doctrine. United States v. Taylor, 210 F.3d 311, 314 (5th Cir.2000). We affirm evidentiary rulings "unless they affect a substantial right of the complaining party." Id.
As the government's second witness, Martin testified to the F.B.I.'s investigation in this case. In so doing, he used a chart containing pictures of persons and symbols for the entities involved in the alleged conspiracy. While Martin was testifying, the prosecutor referred to a picture of Roberts on the chart and asked Martin to explain Roberts' role in the alleged conspiracy. Martin's testimony also included the statement: "Dr. Griffin is on the TDHCA board, has voting authority over tax credit projects. She also is a 25-percent owner in B. Hammond Homes." On cross-examination, Martin admitted that his statement that Griffin owned 25 percent of BHHI was not based on personal knowledge but on what someone told him.
"There is an established tradition, both within this circuit and in other circuits, that permits a summary of evidence to be put before the jury with proper limiting instructions." United States v. Scales, 594 F.2d 558, 563 (6th Cir.1979) (citations omitted). However, "[t]he purpose of the summaries in these cases is simply to aid the jury in its examination of the evidence already admitted." Id. (citing United States v. Downen, 496 F.2d 314 (10th Cir. 1974)). Here, of course, the evidence had not yet been presented. Martin, therefore, was testifying more as an "overview witness" than a summary witness. See United States v. Cline, 188 F.Supp.2d 1287, 1299 (D.Kan.2002) (labeling the government's witness who defendant asserted was being called to "testify before there is any evidence admitted to summarize and who will give essentially a second opening statement" as an "overview witness").
This Court has never had the opportunity to address the use of an overview witness where the witness is put on the stand to testify before there has been any evidence admitted for the witness to summarize. We unequivocally condemn this practice as a tool employed by the government to paint a picture of guilt before the evidence has been introduced. Permitting a witness to describe a complicated government program in terms that do not address witness credibility is acceptable. However, allowing that witness to give tendentious testimony is unacceptable. Allowing that kind of testimony would greatly increase the danger that a jury "might rely upon the alleged facts in the [overview] as if [those] facts had already been proved," or might use the overview "as a substitute for assessing the credibility of witnesses" that have not yet testified. Scales, 594 F.2d at 564. We hold, therefore, that the district court abused its discretion in allowing the government to utilize Martin as an overview witness to testify to issues in dispute.
In Scales, we permitted the use of a summary chart in a complex case, noting that "[t]he facts summarized were entirely objective, and ... uncontested," there was no credibility issue, the summary was neutral, and the trial judge gave a limiting instruction. Id. at 564.
In United States v. Meshack, the government made use of a chart that presented the defendant's financial transactions and was used as an aid during a witness's testimony. 225 F.3d 556, 581 (5th Cir. 2000). Although the district court did not give a proper limiting instruction, we found that there was no plain error because: (1) the chart was not admitted into evidence; (2) the chart did not go to the jury room; (3) the defense had an opportunity to cross-examine the witness about the chart; and, (4) the defense did not show on appeal that the chart contained misleading or erroneous information. Id. at 582.
In Taylor, the government made use of an organizational chart similar to the one here that showed pictures of the people involved in a drug conspiracy and their relationships. 210 F.3d at 314. The government placed the chart before the jury during opening statements and when the witnesses were questioned about it. Id. at 314-315. However, at other times the chart was turned away from the jury. Id. at 315. At the close of the government's case, the chart was admitted into evidence as a summary of testimony. Id. Defense counsel objected to the chart both before opening statements and when the prosecutor moved its admission into evidence. Id. The district court gave two instructions on the chart's use. Id. The court instructed the jury after the government's opening statement that "the chart reflected what the government believed the facts to be, but that it would be up to them to evaluate whether it was an accurate depiction of the events." Id. The second instruction, which was given after the chart was admitted into evidence, instructed the jury that "the chart should be evaluated just like any other evidence and should be given whatever weight the jury deemed appropriate." Id.
We noted in Taylor:
[T]he use of charts as "pedagogical" devices intended to present the government's version of the case is within the bounds of the trial court's discretion to control the presentation of evidence under Rule 611(a) [of the Federal Rules of Evidence]. Such demonstrative aids typically are permissible to assist the jury in evaluating the evidence, provided the jury is forewarned that the charts are not independent evidence.
C. Whether the evidence is sufficient to support Griffin's money laundering conviction.
"In evaluating a challenge to the sufficiency of the evidence, we view the evidence in the light most favorable to the verdict and uphold the verdict if, but only if, a rational juror could have found each element of the offense beyond a reasonable doubt." United States v. Brown, 186 F.3d 661, 664 (5th Cir.1999). In order to find that the defendant committed the offense of money laundering under 18 U.S.C. § 1956(a)(1)(B)(i), "the government must prove that the defendant: (1)conducted or attempted to conduct a financial transaction, (2) which the defendant knew involved the proceeds of unlawful activity, and (3) which the defendant knew was designed to conceal or disguise the nature, location, source, ownership, or control of the proceeds of the unlawful activity." United States v. Burns, 162 F.3d 840, 847 (5th Cir.1998).
Griffin asserts there is insufficient evidence to support her conviction for money laundering. She moved for a judgment of acquittal at the close of the government's evidence, which was denied by the district court. The government argues that Griffin committed money laundering by concealing her ownership of the land she received from BHHI and placing it in the name of Arkofa, her brother-in-law Arlee Griffin's company. Although Griffin acknowledges that she put the land in Arkofa's name, she argues that she did not have the requisite "intent to conceal" because she had her brother-in-law deed the property back to her nine days later and because both Walker and Roberts were aware of this transaction. Notably, there is no evidence in the record that the property was ever deeded back to Griffin. Rather, the record indicates that she had her brother-in-law deed the property to Walker.
There is no doubt that Griffin engaged in a financial transaction, satisfying the first prong of the test. We also find that a jury could reasonably infer that she had knowledge that what she was doing was unlawful, which satisfies the second prong of the test. Under Texas law, as an officer of the state, Griffin had a duty to not "accept other employment or compensation that could reasonably be expected to impair [her] independence of judgment in the performance of [her] official duties...." TEX. GOVT.CODE ANN. § 572.051(3) (Vernon 2001). In addition, Griffin could not "intentionally or knowingly... accept[] ... any benefit as consideration for [her] decision, opinion, recommendation, vote, or other exercise of [her] discretion as a public servant...." TEX. PENAL CODE ANN. § 36.02 (Vernon 2001). Even if Griffin was only a consultant to BHHI as she claims, she accepted money from BHHI to work on the Golden Oaks project and then voted in favor of the project as a TDHCA board member without disclosing her indirect connection with it. We conclude, therefore, that a jury could reasonably infer that she accepted a benefit — ownership in BHHI and/or profits from BHHI's transactions — in exchange for her vote. Lastly, Griffin did deed property she received from BHHI to her brother-in-law. However, there is no public record of the property ever being transferred back to Griffin. Rather, even if Griffin had considered having the property deeded back to her, the record indicates that she had her brother-in-law deed the property to Walker so he could sell it. Thus, a jury could have reasonably interpreted Griffin's transfer of the property to her brother-in-law and then to Walker as an act of concealment, satisfying the third prong of the test.
Griffin argues that her co-conspirators' knowledge of this transaction shows she was not concealing anything. This Court, however, has held that "concealment can be established by showing that `the transaction is part of the larger scheme designed to conceal illegal proceeds.'" United States v. Pipkin, 114 F.3d 528, 534 (5th Cir.1997) (citation omitted). As we have already discussed above, the record indicates that all of the co-conspirators, including Griffin, participated in the larger scheme to obtain tax credits by bribing Griffin for her vote as a member of TDHCA's board of directors. Walker's and Roberts' knowledge of Griffin's transfer of property to her brother-in-law does not necessarily mean that she did not attempt to conceal the bribery scheme. Rather, the jury could have reasonably found that all of the Appellants participated in this concealment, as evidenced by the fact that they placed money and property they received from the Golden Oaks project in the names of people other than themselves. We conclude, therefore, that the evidence was sufficient to support Griffin's money laundering conviction.
D. Whether the evidence is sufficient to support the Appellants' mail fraud convictions.
Appellants moved for a directed verdict of acquittal on the charges of mail fraud at the close of the government's evidence, claiming that there was insufficient evidence to convict under Counts 6 and 7 of the indictment. Count 6 of the indictment charged that Griffin, Walker, and Roberts committed mail fraud by mailing a pre-application notification for tax credits for the Golden Oaks project to the City of Bryan, Texas, for the purpose of defrauding the TDHCA, State of Texas, United States, and to obtain money and property by false pretenses. Count 7 of the indictment charged that Griffin and Walker committed mail fraud by mailing a pre-application notification for tax credits for the Glen Oak Village project to the City of Bryan, Texas, for the purpose of defrauding the TDHCA, State of Texas, United States, and to obtain money and property by false pretenses. On appeal, the Appellants renew their argument that there was insufficient evidence of mail fraud to support a violation of 18 U.S.C. § 1341. Section 1341 of Title 18 of the United States Code prohibits the use of the mails in furtherance of "any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises...."
Walker and Roberts contend, as they do for all of the counts for which they were convicted, that there is no support for their mail fraud convictions because they were not aware of Griffin's intent to vote for their project. Griffin, however, relies on Cleveland v. United States in which the Supreme Court held that, for the purposes of 18 U.S.C. § 1341, state and municipal licenses are not property in the hands of the official licensor. 531 U.S. 12, 15, 121 S.Ct. 365, 148 L.Ed.2d 221 (2000).5 Griffin contends that tax credits are like licenses in that they do not exist until they are issued and, therefore, the district court should have dismissed Counts 6 and 7. The government, however, argues that tax credits are a valuable commodity and an economic incentive, unlike the licenses at issue in Cleveland, which mainly implicated a regulatory concern of the state.
Furthermore, the government contends on appeal that the district court instructed the jury that "[a] `scheme to defraud' included any scheme to deprive another of money, property, or of the intangible right to honest services by means of false or fraudulent pretenses, representations, or promises." The government, citing United States v. Powers, 168 F.3d 741 (5th Cir.1999), argues that because the jury was instructed on both the defrauding of property and honest services theories, and the evidence supports either, this Court should affirm because the jury had a right to consider both theories. Griffin, however, replies that the district court's instruction amounts to a constructive amendment of Counts 6 and 7. Section 1346, which provides that "the term `scheme or artifice to defraud' includes a scheme or artifice to deprive another of the intangible right of honest services," is not referred to in either Count 6 or 7 of the indictment; and the words "intangible right to honest services" do not appear anywhere in the indictment. Likewise, in its jury argument, the government did not refer in any manner to the provisions of section 1346 nor to the specific language of the district court's instructions. We first address whether tax credits can be property in the hands of the TDHCA and then whether the jury instructions amounted to a constructive amendment.
1. Tax credits as property.
We conclude that, in accordance with the Supreme Court's decision in Cleveland, there was insufficient evidence to support a conviction of mail fraud under 18 U.S.C. § 1341 because the low-income housing tax credits were not property until they had been issued. Cleveland involved a Louisiana law that authorizes the State to award nontransferable, annually renewable licenses to operate video poker machines. 531 U.S. at 15, 121 S.Ct. 365. Under the law, applicants for the licenses must meet certain requirements designed to ensure that they have good character and fiscal integrity. Id. The defendants were indicted on RICO charges in connection with a scheme to bribe state legislators to vote in a manner favorable to the video poker industry. Id. at 16, 121 S.Ct. 365. Included in the indictment was the predicate act of mail fraud in violation of 18 U.S.C. § 1341. Id. at 16-17, 121 S.Ct. 365. The indictment alleged the defendants fraudulently concealed in their applications that they were the true owners of a certain business establishment because they had financial and tax problems that could have undermined their chances to receive the video poker licenses. Id. at 17, 121 S.Ct. 365.
The Supreme Court in Cleveland agreed with the defendants and reversed their mail fraud convictions, holding that section 1341 does not reach fraud in obtaining a state or municipal license. The Court found that the gaming licenses were not property in the government regulator's hands and section 1341 speaks only to the protection of money and property. Id. at 20, 121 S.Ct. 365. Any benefit that the government derives from Section 1341 must be limited to the government's interests as a property holder. Id. at 19-20, 121 S.Ct. 365. In reaching this conclusion, the Court noted that it did not doubt that Louisiana had a substantial economic stake in the video poker industry. Id. at 22, 121 S.Ct. 365. Although the State collected up front processing fees for each license, the Court noted that the State received "the lion's share of its expected revenue not while the licenses remain in its own hands, but only after they have been issued to licensees." Id. (emphasis in original) The licenses, noted the Court, do not generate an ongoing stream of revenue before they are issued. Id. According to the Court, finding that the processing fees amounted to a property right would result in "the conclusion that States have property rights in any license or permit requiring an up front fee, including drivers' licenses, medical licenses, and fishing and hunting licenses," which the government conceded were "purely regulatory." Id.
The Court, in Cleveland, then addressed the government's contention concerning the State's right to control the issuance, renewal, and revocation of video poker licenses. The Court noted that the "intangible rights of allocation, exclusion, and control amount to no more and no less than Louisiana's sovereign power to regulate." Id. at 23, 121 S.Ct. 365.
Id. Thus, as it had in previous cases, the Court noted that "`unless Congress conveys its purpose clearly, it will not be deemed to have significantly changed the federal-state balance' in the prosecution of crimes.'" Id. at 25, 121 S.Ct. 365 (quoting Jones v. United States, 529 U.S. 848, 858, 120 S.Ct. 1904, 146 L.Ed.2d 902 (2000)). In addition, the Court noted that it has instructed that "`ambiguity concerning the ambit of criminal statutes should be resulted in favor of lenity.'" Id. (quoting Rewis v. United States, 401 U.S. 808, 812, 91 S.Ct. 1056, 28 L.Ed.2d 493 (1971)). Therefore, to the extent that the meaning of the word "property" might be ambiguous as used in section 1341, the Court concluded that "`it is appropriate, before [the Court] choose[s] the harsher alternative, to require that Congress should have spoken in language that is clear and definite.'" Id. (quoting United States v. Universal C.I.T. Credit Corp., 344 U.S. 218, 222, 73 S.Ct. 227, 97 L.Ed. 260 (1952)).
We conclude that Cleveland is controlling in this case. Unissued tax credits have zero intrinsic value. Therefore, tax credits are not property when they are in the TDHCA's possession. As a result, section 1341 does not reach fraud in obtaining the allocation of tax credits in this case. The tax credits at issue derive from Congress' Tax Reform Act of 1986. Each year, state and local agencies are granted low-income housing tax credits by the United States Treasury Department. Local entities then reallocate these tax credits to qualified low-income projects. TDHCA is the only entity in the State of Texas with the authority to reallocate tax credits under this program. Once tax credits have been allocated, they cannot be transferred from the property to which they were allocated. If the tax credits cannot be used because the property to which they were allocated does not become a low-income residence, the federal government reclaims the tax credits. The tax credits are not actually issued on a project involving new construction, as was the case for the Golden Oaks project, until the rental units actually have been constructed and placed in service at reduced rent for low-income occupants. Once the tax credits have been issued on a property, the owner can sell limited partnership interests in the property so that investors can take advantage of the tax credits allocated to that project. See generally 26 U.S.C. § 42.
2. Constructive amendment to Counts 6 and 7.
"A constructive amendment occurs when the trial court `through its instructions and facts it permits in evidence, allows proof of an essential element of a crime on an alternative basis permitted by the statute but not charged in the indictment.'" United States v. Arlen, 947 F.2d 139, 144 (5th Cir.1991) (quoting United States v. Slovacek, 867 F.2d 842, 847 (5th Cir.1989)). There is no doubt that the Fifth Amendment guarantees a criminal defendant that he will only be tried on the charges that have been alleged in an indictment handed down by a grand jury, which "cannot be `broadened or altered except by the grand jury.'" Id. (quoting United States v. Chandler, 858 F.2d 254, 256 (5th Cir.1988)). As the Supreme Court has explained:
Therefore, when a constructive amendment has occurred and error has been properly preserved, we have made it clear that "the conviction cannot stand; there is no prejudice requirement." United States v. Mikolajczyk, 137 F.3d 237, 243 (5th Cir.1998). However, neither Griffin's attorney nor counsel for Walker and Roberts objected to the district court's instruction that included the deprivation of an intangible right of honest services language. As a result, we must review this issue for plain error. United States v. Dixon, 273 F.3d 636, 639-40 (5th Cir.2001). Under this standard of review, we may correct forfeited errors only if (1) there was an error, (2) the error was clear or obvious, and (3) the error affected the defendant's substantial rights. See United States v. Olano, 507 U.S. 725, 731-34, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993); Dixon, 273 F.3d at 639-40. Even if these three conditions are met, this Court may correct a forfeited error only if it "`seriously affect[s] the fairness, integrity, or public reputation of the judicial proceedings.'" Olano, 507 U.S. at 736, 113 S.Ct. 1770 (quoting United States v. Atkinson, 297 U.S. 157, 160, 56 S.Ct. 391, 80 L.Ed. 555 (1936)).
We find that the requirements for granting relief under the plain error standard of review have been satisfied. There is no doubt that the district court erred by instructing the jury that a scheme to defraud includes "a scheme to deprive another of the intangible right to honest services" because the indictment did not contain a reference to 18 U.S.C. § 1346 or its language. And, that error was obvious. Furthermore, we can not permit the district court to second guess "what was in the mind[] of the grand jury at the time [it] returned the indictment." Russell, 369 U.S. at 770, 82 S.Ct. 1038. To do so would violate the Appellants' Fifth Amendment right to indictment by a grand jury and undermine the public's faith in the integrity of our judicial proceedings. Therefore, we hold that the district court's jury instruction amounted to a constructive amendment of Counts 6 and 7 of the indictment.
Based on the foregoing, we hold that unissued tax credits do not amount to economic property under 18 U.S.C. § 1341. We also hold that the district court's jury instruction constructively amended Counts 6 and 7 of the indictment. Therefore, the Appellants' mail fraud convictions must be reversed.
E. Whether the government failed to present sufficient evidence that Walker and Roberts were aware of Griffin's activities and, therefore, failed as a matter of law to present sufficient evidence to support their convictions of the specific intent crimes.
Walker and Roberts contend that the government failed to present sufficient evidence that they were aware of Griffin's criminal activities. Where counsel failed to move for a judgment of acquittal at the close of the government's case, the sufficiency of the evidence challenge is reviewed only to determine if the defendant's conviction constitutes a manifest miscarriage of justice. United States v. Maldonado, 735 F.2d 809, 817 (5th Cir. 1984). Although a motion for a judgment of acquittal was eventually filed by counsel for Griffin after both sides had closed, neither Walker's nor Roberts' counsel filed such a motion at the close of the government's case. Therefore, the standard of review here is the manifest miscarriage of justice standard. Id. In reviewing the record, this Court "must consider all the evidence, direct and circumstantial, in the light most favorable to the jury's verdict, accepting all reasonable inferences and credibility choices in favor of that verdict." Id.
As already discussed above, we have concluded that low-income housing tax credits are not property in the hands of the State for purposes of mail fraud under 18 U.S.C. § 1341. Rather, the tax credits become property only after they have been issued and are in the control of the developers and investors of the projects to which the tax credits have been allocated. Therefore, for the same reasons discussed above, Walker's and Roberts' mail fraud convictions must be reversed.
In addition to their mail fraud convictions, Walker and Roberts were convicted of (1) aiding and abetting Griffin in committing theft of tax credits in violation of 18 U.S.C. §§ 2 and 666(a)(1)(A); (2) aiding and abetting the bribery of Griffin with money and land with the intent to influence Griffin to vote to approve the Golden Oaks project's tax credit application in violation of 18 U.S.C. § 666(a)(2); and (3) with conspiracy to commit theft, bribery, and money laundering in violation of 18 U.S.C. § 371. In addition, Walker was convicted of aiding and abetting in the laundering of bribery proceeds in violation of 18 U.S.C. § 1956(a)(1)(B)(I).
A person who aids or abets the commission of an offense against the United States is punishable as a principal. 18 U.S.C. § 2. To establish aiding and abetting under 18 U.S.C. § 2, "the defendant `must have (1) associated with a criminal venture, (2) participated in the venture, and (3) sought by action to make the venture successful.'" United States v. Carreon-Palacio, 267 F.3d 381, 389 (5th Cir. 2001) (citation omitted). In order to convict on the theft of tax credits in violation of 18 U.S.C. § 666(a)(1)(A), the jury must find that the government agent knowingly converted government property valued at more than $5,000.00 to the use of another. To be guilty of bribery under 18 U.S.C. § 666(a)(2), a defendant must "corruptly give[], offer[], or agree[] to give anything of value to any person, with intent to influence or reward an agent of an organization or of a State ... in connection with any business, transaction, or series of transactions of such ... agency involving anything of value of $5000.00 or more." And, as previously noted, in order to convict for the laundering of bribery proceeds under 18 U.S.C. § 1956(a)(1)(B)(i), the government must prove that the defendant "(1) conducted or attempted to conduct a financial transaction, (2) which he knew involved the proceeds of unlawful activity, (3) with the intent either to conceal or disguise the nature, location, source, ownership, or control of the proceeds of unlawful activity." Pipkin, 114 F.3d 528, 534 (5th Cir.1997).
This Court also has held that guilty knowledge can be inferred from deception. See, e.g., United States v. Thomas, 120 F.3d 564, 570 (5th Cir.1997) (defendant's "patently false statement [was] circumstantial evidence of [defendant's] guilty knowledge"). The record in this case indicates that the government presented evidence that Walker and Roberts placed the land they received in third party names. Further, Roberts placed cash disbursements he received in the name of his mother; and he later placed $13,333.00 of the $50,000.00 check Mitchell wrote for Walker's services in the name of Ozell Roberts. Moreover, during the recorded conversation Roberts had with Mitchell, Roberts denied being one of the owners of BHHI when the evidence clearly shows that was not true. Also, Roberts claimed that he did not receive any of the $28,000.00 disbursement from the land sale when the record indicates that he did. We conclude that the above evidence is sufficient for a jury to impart knowledge to both Walker and Roberts as a result of deception.
F. Whether the district court erred in restricting Griffin's testimony of her out-of-court conversations.
Griffin contends that the district court erred in refusing to let her testify to the contents of conversations that she had with Walker and Roberts, though the court allowed her to testify regarding the topics of those conversations. Griffin's counsel did not object to this ruling by the district court, so plain error review applies. As noted above, to withstand plain error review (1) there must have been an error, (2) that was clear or obvious, and (3) that affected the defendant's substantial rights. Olano, 507 U.S. at 731-34, 113 S.Ct. 1770; Dixon, 273 F.3d at 639-40. Even if these conditions are met, the error must have seriously affected "the fairness, integrity, or public reputation of the judicial proceedings" before it will be corrected by this Court. Olano, 507 U.S. at 736, 113 S.Ct. 1770; Dixon, 273 F.3d at 640.
G. Whether the district court abused its discretion by allowing evidence of similar incidences of misconduct by Griffin.
FED.R.EVID. 404(b). We employ a two-part test to determine whether evidence is admissible under Rule 404(b): "(1) whether the evidence is relevant to an issue other than the defendant's character and (2) whether the evidence possesses probative value that is not outweighed substantially by the danger of unfair prejudice and is otherwise admissible under Rule 403." Route, 104 F.3d at 63. "Evidence that is `inextricably intertwined' with the evidence used to prove the crime charged is not `extrinsic' evidence under Rule 404(b)." "Such evidence is considered `intrinsic' and is admissible `so that the jury may evaluate all circumstances under which the defendant acted.'" United States v. Navarro, 169 F.3d 228, 233 (5th Cir.1999) (quoting United States v. Royal, 972 F.2d 643, 647 (5th Cir.1992) (citation omitted)).
Brenda Jenkins, executive director of the Texas Public Utility Commission in 1996, testified that the General Services Commission was planning on awarding a contract worth between $4 million and $10 million to move the Public Utility Commission from leased space to government-owned space. The process for awarding the contract involved issuing a state-wide request for bids. Jenkins stated that Griffin came to her office with two men to discuss the possibility of doing the work. Griffin identified herself as a commissioner with TDHCA and stated that as they were all "Aggies" from Texas A&M University, Jenkins should consider using her influence to help them get the contract. The record indicates that Jenkins did not enter any agreement to help Griffin obtain the contract.
In United States v. Gibson, James Gibson was charged with conspiracy to manufacture and to possess with intent to distribute methamphetamine, possession of methylamine and maintaining a place for the purpose of manufacturing and distributing a controlled substance. 55 F.3d 173, 175 (5th Cir.1995). Melvin Hazelton was indicted as part of the same conspiracy and pled guilty to one count pursuant to a plea agreement. Hazelton testified against Gibson. Id. Gibson's defense was that he was completely innocent of involvement in or even knowing of the production and distribution of methamphetamine, and that Hazelton was lying. Id. at 180. In rebuttal, the government called a witness to testify that Gibson had sold him "speed" several times, but there was no indication that these sales were related to any of the charged conduct. Id. at 179. The district court admitted the testimony, and we affirmed. We found that the evidence was relevant because it "merely completed the picture as to appellant's true involvement in and knowledge of the drug world, thereby correcting a distorted view of appellant's testimony." Id. at 180. We find Gibson to be akin to the case at hand in that Jenkins' rebuttal testimony refuted Griffin's claim that she never used her position to influence anyone.
Finally, Leslie Donaldson, manager of the credit underwriting department at TDHCA, testified that Griffin contacted her directly about a tax credit application for the Shadow Wood project. The record indicates that Griffin requested that Donaldson fax her a memorandum regarding the deficiencies in the application and that Donaldson keep her advised throughout the process. According to Donaldson, that form of contact by a TDHCA commissioner was "absolutely unheard of." The record, nevertheless, indicates that Donaldson did fax the requested information to Griffin, and followed up with Griffin throughout the process.
H. Whether the district court abused its discretion by limiting Griffin's attorney's closing argument.
Griffin's attorney then continued his closing argument, discussing Griffin's relationship with TDHCA and noting that the former employees of TDHCA who testified during the trial still had some form of business relationship with TDHCA. Griffin's attorney also stated that the ethical standards brought up by the government were for the state legislature to decide and that even if the jury did not agree with those laws, only the state legislature could change them, not the federal prosecutors. The district court then told Griffin's attorney that he needed to get back to the issues at hand and noted that Griffin was "not a former member [of TDHCA], she's not accused of being a former member. She is accused of being a member and then taking certain actions." Griffin's attorney responded: "Well, I certainly do know that, Your Honor, but this is my argument." The district court responded: "I understand. Let's not get off — I just don't want the jury to get off on any of —." Griffin's attorney then continued his argument moving on to a different topic.
Griffin contends that the protestation, "Your Honor, but this is my argument," is sufficient to constitute a viable objection. Griffin further argues that her attorney's statement should amount to an objection particularly considering the fact that the district court interrupted the closing argument and indicated that the lawyer was not properly addressing the issues. Thus, Griffin asserts that the district court abused its discretion by interrupting her attorney's closing argument in the manner it did.
I. Whether Walker and Roberts were constructively denied counsel.
Walker and Roberts did not argue to the district court that they were constructively denied counsel. Generally, this Court cannot determine a claim of inadequate representation on direct appeal when the claim has not been raised before the district court. United States v. Freeze, 707 F.2d 132, 138 (5th Cir.1983). "Only when the record is sufficiently developed with respect to such a claim, will we determine the merits of the claim." Id. (citing United States v. Phillips, 664 F.2d 971, 1040 (5th Cir.1981)).
Notably, Griffin's attorney filed "boilerplate" objections to Walker's sentencing on his behalf, which were the same as those filed for Griffin and not specific to Walker's interests. The district court, however, refused to allow Griffin's attorney to represent Walker because of his loyalty to Griffin, who had different legal and factual positions. The district court also questioned Roberts' attorney as to whether he truly was "comfortable that he has represented Roberts' interests without regard to Griffin." The district court then reiterated that it had told Walker and his counsel "in no uncertain terms, that Mr. Walker needed separate counsel, truly separate counsel."
Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). However, the defendant need not make a specific showing of prejudice in a limited number of cases. These include: (1) "the complete denial of counsel," such as "if the accused is denied counsel at a critical stage of his trial;" (2) situations in which "counsel entirely fails to subject the prosecution's case to meaningful adversarial testing;" and, (3) "on some occasions when although counsel is available to assist the accused during trial, the likelihood that any lawyer, even a fully competent one, could provide effective assistance is so small that a presumption of prejudice is appropriate without inquiry into the actual conduct of the trial." United States v. Cronic, 466 U.S. 648, 659-660, 104 S.Ct. 2039, 80 L.Ed.2d 657 (1984). "A constructive denial of counsel occurs in only a very narrow spectrum of cases where the circumstances leading to counsel's ineffectiveness are so egregious that the defendant was in effect denied any meaningful assistance at all." Gochicoa v. Johnson, 238 F.3d 278, 284 (5th Cir.2000) (citation omitted). Walker and Roberts allege that their representation at trial completely failed to subject the prosecution's case to meaningful adversarial testing and, therefore, they were constructively denied counsel.
we have refused to find a constructive denial where defense counsel investigated only certain issues, where counsel's trial presentation was "somewhat casual," where counsel failed to pursue a challenge based on racial bias in jury selection, to object to a variation between the indictment and the jury charge, or to raise a meritorious issue on appeal. Thus, prejudice is presumed, and Washington's second prong inapplicable, only when the defendant demonstrates that counsel was not merely incompetent but inert, distinguishing shoddy representation from no representation at all. When the defendant complains of errors, omissions, or strategic blunders, prejudice is not presumed; bad lawyering, regardless of how bad, does not support the per se presumption of prejudice.
Additionally, although Walker and Roberts argue that their attorneys were deficient in failing to seek separate trials, the Supreme Court has indicated that a severance of co-defendants' trials should be granted "only if there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence." Zafiro v. United States, 506 U.S. 534, 539, 113 S.Ct. 933, 122 L.Ed.2d 317 (1993). We have found that a defendant did not suffer prejudice from the joinder of his trial with a co-defendant when there was sufficient evidence to convict the defendant. See United States v. Broussard, 80 F.3d 1025, 1036-37 (5th Cir.1996). Lastly, Walker and Roberts have not shown prejudice in that the outcome of the trial would have been different absent any alleged errors. We find, therefore, that Walker and Roberts were not constructively denied counsel.
J. Whether the district court erred in sentencing the Appellants in its calculations of the benefits to be received from the bribes, the existence of multiple bribes, and the amount of restitution owed to Mitchell.
All three Appellants assert that the district court erred in calculating their sentences. In reviewing a sentence imposed by a district court under the federal sentencing guidelines, "`we review the trial court's findings of fact for clear error and review purely legal conclusions or interpretations of the meaning of a guideline de novo.'" United States v. Canada, 110 F.3d 260, 262-63 (5th Cir.1997) (quoting United States v. Kimbrough, 69 F.3d 723, 733 (5th Cir.1995)). Clear error exists if this court is left with a definite and firm conviction that a mistake has been made. Estate of Jameson v. Commissioner, 267 F.3d 366, 370 (5th Cir.2001).
As to Griffin's sentence, the district court applied a total offense level of 29 and a criminal history category of I. The district court began with a base offense level of 10 under U.S.S.G. § 2C1.1, which is applicable to offenses under 18 U.S.C. § 666(a)(1)(B). The court then increased the offense level by 2 under U.S.S.G. § 2C1.1(b)(1) because it found that there was more than one bribe. The court also increased the offense level by an additional 13 under U.S.S.G. § 2C1.1(b)(2)(A) because it found that the value of the benefit to be received from the offenses was $3.1 million. In addition, the court increased the offense level by 2 under U.S.S.G. § 3B1.1(c) for her role in the offense, and by 2 under U.S.S.G. § 3C1.1 for obstruction of justice. These increases resulted in a total offense level of 29. Walker's and Roberts' offense levels were similarly increased by two on a finding of more than one bribe, and by 13 on the calculation of approximately a $3.1 million benefit to be received from the offenses.
The amount of benefit to be received is a fact finding issue that is reviewed for clear error. United States v. Chmielewski, 196 F.3d 893, 894 (7th Cir. 1999); see also United States v. Bankston, 182 F.3d 296, 317 (5th Cir.1999), vacated on other grounds sub nom. Cleveland v. United States, 529 U.S. 1017, 120 S.Ct. 1416, 146 L.Ed.2d 309 (2000). The district court need not determine the value of the benefit with precision. United States v. Landers, 68 F.3d 882, 884 n. 2 (5th Cir. 1995). In fact, in determining the amount of benefit to be received, courts may consider the expected benefits, not only the actual benefits received. See, e.g., Chmielewski, 196 F.3d at 894-95; United States v. Thickstun, 110 F.3d 1394, 1400 (9th Cir.1997).
The guideline commentary defines the value of "the benefit received or to be received" as "the net value of such benefit." U.S.S.G. § 2C1.1(b)(2)(A), comment. (n. 2). The commentary provides two examples:
(1) A government employee, in return for a $500 bribe, reduces the price of a piece of surplus property offered for sale by the government from $10,000 to $2,000; the value of the benefit received is $8,000. (2) A $150,000 contract on which $20,000 profit was made was awarded in return for a bribe; the value of the benefit received is $20,000. Do not deduct the value of the bribe itself in computing the value of the benefit received or to be received. In the above examples, therefore, the value of the benefit received would be the same regardless of the value of the bribe.
U.S.S.G. § 2C1.1, comment. (n. 2). We have stated that these examples make clear that "direct costs should be deducted from the gross value of the contract." Landers, 68 F.3d at 884.
Third, we do not believe that the benefit received should have included Roberts' salary amounting to $61,5226 or his anticipated $400,000 expected bonus. Both the salary and bonus were negotiated with Mitchell before any bribery scheme came into being. And, Roberts would have received these amounts regardless of any bribes had the project been completed. Again, these amounts were negotiated with Mitchell, a sophisticated businessman, who clearly viewed the salary and bonus as part of the cost of doing business. These amounts cannot be included in the scope of the bribery scheme.
Similarly, we conclude that the district court erred in applying a two level increase as a result of concluding that there were two bribes in this case. Our reading of the indictment is that there was only one bribe charged — the bribe for Griffin's vote on the Golden Oaks project. As noted above, though there was some testimony concerning other intended projects such as Shadow Wood, they had nothing to do with the bribe charged in this case. Therefore, this two level increase should not have been applied.
Lastly, we question the district court's determination that Mitchell is owed $783,455.00 in restitution, which was based on the amount of restitution recommended in the Appellants' PSRs. There are two puzzling aspects of this determination in the PSRs. First, the PSRs suggest that Mitchell is qualified to receive restitution under 18 U.S.C. § 3663(a) because he is a "proximate victim," who suffered financial harm resulting from the Appellants' criminal conduct. Secondly, the PSRs indicate the amount of restitution owed to Mitchell by adding the $61,529.947 in salary that he paid to Roberts; the $328,133.87 for the land purchased for the Golden Oaks project; credit card charges totaling $2,570.22; and $391,221.05 for development costs including appliances, application fees and lumber.
We note that this Court has expressly held that a victim who is "directly and proximately harmed" in the context of 18 U.S.C. § 3663A may be entitled to restitution. See United States v. Mancillas, 172 F.3d 341, 343 (5th Cir.1999) (citing United States v. Hughey, 147 F.3d 423, 437 (5th Cir.1998)). However, we also have restricted "the award of restitution to the limits of the offense." Id. Our reading of the record indicates that any losses incurred by Mitchell resulted from the Golden Oaks project collapsing because of BHHI's or LCCM's inability to obtain interim financing and performance bonds. This collapse had nothing to do with the bribery scheme for which the Appellants were charged. Rather, Mitchell was a sophisticated businessman who should have been able to evaluate whether a construction company was capable of performing a particular project.
The record does not indicate that there was a separate hearing detailing whether Mitchell qualifies for restitution as a "proximate victim" and what amount he should receive if he does qualify. Therefore, on remand, the district court should conduct a hearing to determine Mitchell's status as a "direct and proximate" victim, and the amount of restitution that is "attributable to the specific conduct supporting the offense of conviction." Hughey, 147 F.3d at 437.
We REVERSE the Appellants' convictions on counts 6 and 7 for mail fraud. We AFFIRM the Appellants' convictions on the other counts for which they were indicted. We vacate the sentence of each Appellant and REMAND this case for resentencing in light of our opinion. The district court also should conduct a hearing for the purpose of determining whether Mitchell qualifies as "a direct and proximate victim" and for the purpose of determining the quantum of restitution, if any, to which he may be entitled.
The best evidence of what the parties in this case contemplated as the terms and conditions of the proposed Golden Oaks project can be found in the application that One Golden Oaks, Ltd. submitted to the TDHCAGovernment's Exhibit 3.
The Golden Oaks project is noted on the list as "Golden Oaks on Sandy."
Although the record indicates that LCCM replaced BHHI as the contractor for the Golden Oaks project, the record does not contain an amended TDHCA application evidencing this change
It should be noted that the conspiracy count (Count 1) does not contain any allegations about conspiracy to violate the Mail Fraud Statute as described in Counts 6 and 7 of the Indictment
Cleveland was decided five days after the end of appellants' trial, which explains why appellants did not mention it in their objections at trial.
The Appellants' PSRs indicated that Roberts received $61,529.94 in salary from Mitchell. During the Appellants' sentencing hearings, however, the district court stated that the amount of Roberts' salary was $61,522