Case Name: UNITED STATES of America, Plaintiff-Appellee, v. Paul E. PODHORN, Jr., Defendant-Appellant
Court: United States Court of Appeals for the Seventh Circuit
Jurisdiction: United States
Decision Date: 2008-12-08
Citations: 549 F.3d 552
Docket Number: No. 06-2139
Parties: UNITED STATES of America, Plaintiff-Appellee, v. Paul E. PODHORN, Jr., Defendant-Appellant.
Judges: Before FLAUM, RIPPLE, and WOOD, Circuit Judges.
Reporter: Federal Reporter 3d Series
Volume: 549
Pages: 552–565

Head Matter:
UNITED STATES of America, Plaintiff-Appellee, v. Paul E. PODHORN, Jr., Defendant-Appellant.
No. 06-2139.
United States Court of Appeals, Seventh Circuit.
Argued Sept. 17, 2007.
Decided Dec. 8, 2008.
Thomas Edward Leggans (argued), Office of the United States Attorney, Benton, IL, for Plaintiff-Appellee.
Thomas L. Shriner, Jr., Paul Bargren (argued), Foley & Lardner, Milwaukee, WI, for Defendant-Appellant.
Before FLAUM, RIPPLE, and WOOD, Circuit Judges.

Opinion:
WOOD, Circuit Judge.
Permission to sell firearms is not open to all comers; people wanting to engage in that business must obtain a Federal Firearms License from the Department of Treasury's Bureau of Alcohol, Tobacco, Firearms and Explosives. See 18 U.S.C. § 923; see generally http://www.atf.gov/ firearms/faq/faq2.htm# al (last visited November 12, 2008). Paul Edward Podhorn had such a license, but he misused it. A grand jury accordingly charged him with two counts of making false statements, in violation of 18 U.S.C. § 1001(a)(2), two counts of selling stolen firearms, in violation of 18 U.S.C. § 922(j), 22 counts of selling firearms without maintaining proper records, in violation of 18 U.S.C. § 922(b)(5), and one count of failing to maintain proper firearm records, in violation of 18 U.S.C. § 922(m). The Government dismissed one of the 22 counts of selling firearms without maintaining proper records (count 26SS), and a jury convicted Podhorn of all remaining charges.
On appeal, Podhorn's central claim is that evidence critical to his conviction should have been suppressed. Additionally, he argues that the district court erred in its calculations under the Sentencing Guidelines when it imposed several sentencing enhancements, that the court should have instructed the jury on a lesser included offense, and that the court abused its discretion when it allowed the prosecution to display a particularly menacing firearm throughout the trial even though the prosecution ended up dropping that weapon from the case.
I
Podhorn and the Government gave rather different accounts of the facts relating to the motion to suppress — indeed, the district court described the two versions as "diametrically oppose[d] . in many ways." In the end, however, the court decided that the Government's witnesses were more credible. It specifically stated that "Defendant Podhorn at times was vague, nonresponsive, argumentative, inconsistent in his answers, had selective recollection, and was coy." For the record, the court also presented Podhorn's version of the facts, based on what it could "glean as best as possible" from his contentions. We review the district court's findings of historical fact under the deferential clear error standard. United States v. Tyler, 512 F.3d 405, 409 (7th Cir.2008); United States v. Groves, 470 F.3d 311, 317-18 (7th Cir.2006). Because Podhorn has offered no persuasive reason why we should reject the district court's findings, we accept that court's findings for purposes of this appeal.
After Podhorn's business contacts complained of improper dealing, Special Agent Robert Nosbisch of the Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") obtained a federal search warrant for Podhorn's business premises. The complaints also resulted in state warrants for Podhorn's arrest. While the search warrant was being executed, ATF Investigator Lisa Storey telephoned Podhorn at his brother's house and asked if she could come speak with him about his federal firearms license. He agreed. Storey soon arrived with two ATF Special Agents, Nosbisch and Jeffrey Matthews, and they spoke with Podhorn on the front lawn for about ten minutes. They then asked if he would accompany them to his business premises. Once again, he agreed. After spending ten to twenty minutes at Pod-horn's store, Nosbisch asked Podhorn if he would go to the Jersey County Sheriffs Department for an interview. Yet again, he agreed.
Upon Podhorn's arrival at the Sheriffs Department, Jersey County officers arrested him on the state warrants and advised him of his Miranda rights. He signed an ATF Miranda acknowledgment and waiver form. He was then interviewed, and during the course of the interview, Nosbisch asked Podhorn if he was willing to consent to a search of his car and his personal effects located at his brother's house and at his daughter's house in Virginia. At that point, rather than consenting right away, Podhorn asked to speak with an attorney. The officers gave him contact information for three attorneys. Podhorn spoke with two of them by telephone; one actually came and talked with him in person. After speaking with the third attorney, Podhorn told the officers that he wanted to cooperate, and he signed the search consent forms. The statements Podhorn made to Nosbisch and the items found in Podhorn's place of business, his car, and among his personal effects gave rise to the charges in the second superseding indictment.
II
Despite the strong evidence of consent, Podhorn maintains on appeal that all of this evidence should have been suppressed, and that his conviction must be reversed because it was not. He begins by asserting that the district court erred in admitting evidence obtained in violation of Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), and Edwards v. Arizona, 451 U.S. 477, 101 S.Ct. 1880, 68 L.Ed.2d 378 (1981). In his view, the Miranda warnings he received came too late, after the damage was already done. The correct time, he asserts, would have been at the start of the encounter at his brother's house, because from that moment on he was under de facto arrest and was being interrogated. He also claims that, once arrested, the search consent forms he signed were tainted because they were obtained through further interrogation initiated by the government after he had requested but before he had received the advice of counsel, in violation of Edwards.
Under Miranda, warnings are required only when a suspect is undergoing custodial interrogation. In deciding whether a suspect was in custody during an interrogation, we must ascertain whether the suspect's freedom of action was curtailed to a degree associated with formal arrest. United States v. Smith, 3 F.3d 1088, 1097 (7th Cir.1993). As the district court noted, this determination must be made in light of the totality of the circumstances surrounding the encounter. United States v. Jones, 21 F.3d 165, 170 (7th Cir.1994). We look to see how "a reasonable man in the suspect's position would have understood his situation"; relevant factors to consider include the "freedom to leave the scene and the purpose, place and length of interrogation." Id.
Applying this standard, the district court was "unable to conclude that Pod-horn was in custody during his encounter with ATF personnel until he was formally arrested as it appears he was free to leave." Podhorn was never told he could not leave, nor did he ask or attempt to leave; he was never physically restrained; no threatening gestures or statements were made to him; the agents did not display weapons; and Podhorn was able to walk by himself back into his brother's house to drop off his car keys before returning to accompany Nosbisch in Nos-bisch's minivan. Although the minivan was used for ATF purposes, it was unmarked, had no separation between the front and back seats, and did not otherwise resemble a police ear. The fact that Pod-horn was not free to leave the car once it was in motion (as is always true of any rider in any car driven by any party) is not relevant because the evidence indicates that he voluntarily agreed to ride in Nos-bisch's car. The district court also noted the brevity of the encounter ("five to ten minutes" at Podhorn's brother's house and "ten to twenty minutes" at Podhorn's business premises) and Podhorn's subjective awareness of his rights ("at the suppression hearing, Podhorn testified that he knew he could refuse to answer Nosbisch's questions or requests, and did in fact not answer some questions").
Podhorn's contention that the officers acted wrongfully in seeking his consent to search after he requested an attorney is unfounded. As noted above, when Podhorn asked to speak with a lawyer, "Nosbisch assisted Podhorn in contacting two private attorneys via telephone, and then arranged for Podhorn to speak privately with a state public defender. After speaking with the state public defender, Podhorn consented to [the] searches" at issue.
Having found that "there was no custodial interrogation of Podhorn prior to the time he was placed under arrest and read his Miranda rights," the district court, citing United States v. Ienco, 182 F.3d 517 (7th Cir.1999), ruled that "subsequent statements and consents given could not have been tainted." We have no reason to second-guess the district court's credibility determinations, under which it accepted Agent Nosbisch's testimony and rejected Podhorn's. The court's findings easily support its conclusion that, apart from the Miranda question, Podhorn's statements and waivers were voluntary. The court added that, "while in no way outcome dis-positive," its conclusion on voluntariness was reinforced by the facts that Podhorn "had attended law school for two years and briefly worked in the legal field" and that the encounter had no indicia of compulsion or government overreaching, such as violence, threats, promises, or unduly protracted interrogation.
Ill
Podhorn next argues that the district court erred in allowing Government Exhibit 37 (a firearm with a bipod—the subject of Count 27SS) to be displayed during the trial, because it was menacing and not probative. A district court's evi-dentiary rulings are reviewed for an abuse of discretion. United States v. Gougis, 432 F.3d 735, 742 (7th Cir.2005).
At the post-trial forfeiture hearing, the Government announced its intention not to pursue forfeiture of that weapon because documentation the Government had received from the defense prior to trial revealed that this gun belonged to an associate of Podhorn's and that Podhorn was merely storing it. This meant that it was not subject to the reporting requirements at issue in the case.
Podhorn may well have forfeited this argument, as his brief mentions only comments that he made during the forfeiture hearing and does not show where he raised this ground at trial. It is possible, however, that he may not have been aware of the possible objection at trial, because he did not know that the Government would eventually abandon its effort to pursue charges based on that firearm. Giving Podhorn the benefit of the doubt, we will address the issue.
The firearm labeled Exhibit 37 was among the items seized from the Virginia residence. As a general matter, that evidence was relevant and its probative value was not substantially outweighed by any unfair prejudice to the defendant. Pod-horn does not claim that, at the time of trial, the district court was aware that this particular weapon would be dropped from the Government's case. Thus, given the information available to the district court at the time of trial, it was not an abuse of discretion to allow Exhibit 37 to be displayed. See United States v. Clark, 989 F.2d 1490, 1499 (7th Cir.1993) ("We determine whether the trial court abused its discretion in refusing to grant severance by viewing the record at the time the motion was made.").
IV
Podhorn next claims that the district court erred in failing to instruct the jury on the lesser included charge of knowingly failing to keep firearms records (a misdemeanor), where Podhorn was charged with willfully failing to keep firearms records (a felony).
If a defendant requests an instruction on a lesser included offense, he is entitled to the instruction if he can prove that "(1) the offense on which he seeks an instruction is a lesser-included offense of the one charged, and (2) a rational jury could find him guilty of the lesser offense but not guilty of the greater offense." United States v. McCullough, 348 F.3d 620, 624 (7th Cir.2003). Podhorn admits that "despite earlier discussions" of the possibility of charging on the lesser included offense, that issue "does not appear to have been raised at the time of the jury instruction conference." Podhorn has thus forfeited the claim, which means that our review is only for plain error. To establish plain error, Podhorn must show: (1) an error; (2) that is plain; (3) that affected his substantial rights; and (4) that seriously affects the fairness, integrity, or public reputation of the judicial proceedings. United States v. Montgomery, 390 F.3d 1013,1017 (7th Cir.2004).
We must first determine whether the lesser included offense instruction should have been given. As Podhorn points out, and as the Government concedes, McCullough held that "knowingly" selling firearms without maintaining proper records, 18 U.S.C. § 922(m), is a lesser included offense within the offense of willfully selling firearms without maintaining proper records in violation of 18 U.S.C. § 922(b)(5). 348 F.3d at 628.
We therefore move to the question whether, from the evidence presented at trial, a rational jury could find that Podhorn knowingly failed to keep firearms records, but that this failure was not willful. The only support that Podhorn offers for this assertion sinks his claim. He cites to his own testimony that he "never failed to complete a Form 4473 when required to do so," "did not fail to keep proper A & D logs," and "was not guilty of failing to keep proper records." He concludes that "had it been offered the opportunity to do so, the jury could have found that any records omissions were misdemeanors, not felonies." Id. But, on this record, we cannot agree with him. If the jury were to credit Podhorn's testimony, they could not find that he knowingly failed (but did not willfully fail) to keep proper records. In other words, if the jury found at all that he failed to keep records, the evidence could support only the conclusion that he did so willfully: there was no possibility of an inadvertent failure. This is well illustrated by the following excerpt of the Government's cross-examination of Podhorn:
Q. Inspector Storey did sit down with you and explained all of the rules and regulations that would pertain to your firearms business, correct?
A. Yes.
Q. You understood when she left what you were supposed to do with regard to an Acquisition and Disposition book?
A. Yes.
Q. With regards to 4473's?
A. Yes.
Q. You don't dispute in this case at all that you knew what records you were supposed to keep as an FFL, correct?
A. No, I don't dispute that.
Q. So you would agree with me, would you not, that if you failed to keep an Acquisition and Disposition log that that would have been a willful failure because you knew what you were supposed to do?
A. I didn't fail to keep my A & D logs.
This shows that Podhorn was challenging the basic question whether he failed to keep the required logs, not whether any omissions were willful. He cannot satisfy the second step of McCullough because no rational jury could have found him guilty of the lesser offense but not guilty of the greater offense. There was thus no error in failing to give the jury instruction on the lesser included offense, much less plain error.
y
Last, Podhorn challenges two aspects of his sentence. First, he claims that he should not have received an enhancement under U.S. Sentencing Guidelines § 2K2.1(b)(4) based on the fact that some firearms were stolen, because the offense with which he was charged, 18 U.S.C. § 922(j), already includes as an element the fact that the firearm is stolen. Applying the enhancement, he argues, would thus amount to double-counting. His other sentencing argument is directed at the district court's decision to enhance his Guidelines level for abusing a position of trust or using a special skill, under § 3B1.3.
We first address the stolen firearms enhancement. Section 2K2.1(b)(4) provides that, in calculating the offense level, "if any firearm (A) was stolen, increase by two levels." Application Note 9 qualifies that rule, however:
If the only offense to which § 2K2.1 applies is 18 U.S.C. § 922(i), (j), or (u), or 18 U.S.C. § 924(£) or (m) (offenses involving a stolen firearm or stolen ammunition) and the base offense level is determined under subsection (a)(7), do not apply the adjustment in subsection (b)(4) unless the offense involved a firearm with an altered or obliterated serial number. This is because the base offense level takes into account that the firearm or ammunition was stolen.
U.S.S.G. § 2K2.1, app. n. 9 (2004).
According to the presentence report ("PSR"), Podhorn's base offense level was determined under subsection (a)(7). PSR at ¶ 32. There was no allegation or finding that Podhorn had altered or obliterated the serial number of any of those weapons. Thus, at least as an initial matter, the two-level enhancement could not be imposed for Counts 3 and 4, each of which charged that Podhorn sold stolen firearms in violation of 18 U.S.C. § 922(j).
The Government and our dissenting colleague counter that Application Note 9 does not apply to Podhorn because he has not shown that the enhancement applied only to his § 922(j) counts. The jury found that the firearms involved in Counts 3 and 4 were stolen, as it had to do in order to convict. PSR at ¶ 10. An examination of the jury verdict forms reveals, as the dissent notes, that the particular firearm involved in Count 3 was also the one identified in Count 5, which charges failure to keep proper records in violation of 18 U.S.C. § 922(b)(5), and the firearm at issue in Count 4 was the one identified in Count 6, which also charges a violation of § 922(b)(5). Our dissenting colleague takes the position that the inclusion of these firearms in Counts 5 and 6 is enough to justify the enhancement described in § 2K2.1(b)(4). He stresses the fact that Application Note 9 advises against the enhancement "[i]f the only offense to which § 2K2.1 applies is . § 922(j)." Here, in his view, the indictment includes two offenses involving the stolen weapons, and the enhancement is precluded for only one of them.
The question for us is whether Application Note 9 applies in the situation before us, where the very same firearm supports both the § 922(j) convictions on different counts and the § 922(b)(5) conviction. It speaks in terms of the "offense" to which § 2K2.1 applies, not to the precise factual basis for any given offense. We have no doubt that the enhancement would be permissible, following the logic of our dissenting colleague, if in a different count the Government had relied upon a third stolen weapon as to which Podhorn failed to keep proper records. It would also be permissible if Counts 3 and 4 had been dropped altogether. Here, however, the only weapons that were shown to be stolen were the ones identified in Counts 3 and 4. We are left, therefore, with a situation similar to the one described in United States v. Jackson, 103 F.3d 561, 569 (7th Cir.1996), where we noted that it would be double-counting to convict a defendant for use of a firearm during and in relation to a drug crime, in violation of 18 U.S.C. § 924(c), and at the same time to enhance a drug sentence under 21 U.S.C. § 841(a)(1) and 846 for possession of a firearm in connection with the same drug offense, using U.S.S.G. § 2D1.1(b)(1). The problem is that "the same conduct cannot be described in two different ways to justify two different enhancements when each leads to a separate upward adjustment." United States v. Schmeilski, 408 F.3d 917, 919 (7th Cir.2005). By the same token, "although premising multiple enhancements on 'identical facts' constitutes impermissible double counting, the presence of some overlap in the factual basis for two or more upward adjustments does not automatically qualify as double counting." Id. (emphasis added) (internal citation omitted).
The fact that the Hess Arms Model 47 rifles, serial numbers 991068107 and 991067293, were stolen is the only thing that makes the sales charged in Counts 3 and 4 illegal. The fact that Podhorn failed to keep proper records of those sales is certainly independently criminal and independently punishable, but, by analogy to Jackson, we conclude that it would be double-counting to use the fact that the same weapons were stolen to enhance the advisory guideline range for the records offense. This is more than the presence of some overlap in the factual basis; the district court "really drew from the same well." United States v. Kopshever, 6 F.3d 1218, 1224 (7th Cir.1993). If the district judge believes that the advisory guidelines, properly computed, do not yield a reasonable sentence, it is free to select a higher sentence, or to order that the sentences run consecutively, in whole or in part. See Kimbrough v. United States, — U.S. -, 128 S.Ct. 558, 574, 169 L.Ed.2d 481 (2007) ("district courts must treat the Guidelines as the 'starting point and the initial benchmark' "), citing Gall v. United States, — U.S. -, 128 S.Ct. 586, 596, 169 L.Ed.2d 445 (2007). See U.S.S.G. § 5G1.2 (outlining advisory rules for concurrent and consecutive sentences). The district court in this case erroneously applied the § 2K2.1(b)(4) stolen weapons enhancement, which entitles Podhorn to a remand for resentencing.
Podhorn's challenge to the application of the "special skill" enhancement is not so persuasive. The provision reads, in relevant part, as follows: "If the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense, increase by 2 levels." U.S.S.G. § 3B1.3. The PSR recommended application of this enhancement based on Podhorn's violation of the terms of his Federal Firearms License. We therefore do not find useful the nonprece-dential disposition from the Tenth Circuit to which he referred, United States v. Hinshaw, 166 F.3d 1222, 1999 WL 9762, at *4, 1999 U.S.App. LEXIS 378, at *13 (10th Cir.1999), because it addressed only the special skill portion of § 3B1.3 and explicitly declined to address the "abuse of trust" portion. Id. 166 F.3d 1222, 1999 WL 9762, at *3, 1999 U.S.App. LEXIS 378, at *8-9.
Podhorn argues nevertheless that the jury instructions in his case were flawed in that they referred disjunctively to a position of trust or a special skill, and it was impossible to tell from the jury's special verdict which of these two possible findings the jury made. Whether either of these grounds for enhancement is satisfied is a question of fact, and so Podhorn is really arguing that there was insufficient evidence to support a finding of special skill. As this court has said before,
It is one thing to negate a verdict that, while supported by evidence, may have been based on an erroneous view of the law; it is another to do so merely on the chance — remote, it seems to us — that the jury convicted on a ground that was not supported by adequate evidence when there existed alternative grounds for which the evidence was sufficient.
Griffin v. United States, 502 U.S. 46, 59-60, 112 S.Ct. 466, 116 L.Ed.2d 371 (1991) (quoting United States v. Townsend, 924 F.2d 1385, 1414 (7th Cir.1991)). The refusal to give an instruction removing an insufficiently supported theory from the jury's consideration "does not provide an independent basis for reversing an otherwise valid conviction." Id. at 60, 112 S.Ct. 466. In Podhorn's case, each and every charge in the second superseding indictment that invokes § 3B1.3 (Counts 3-25, 27) refers only to a position of trust and not to special skill, so there is no reason to suppose that the jury based its special verdict on the special skill component. Thus, the § 3B1.3 enhancement was properly applied.
For these reasons, we AffiRM the court's judgment of conviction, but we VaCate the sentence and Remand for resen-tencing in accordance with this opinion.