Opinion ID: 2978287
Heading Depth: 3
Heading Rank: 1

Heading: RPC was never in default;

Text: 2. The security interest of NFO was never extinguished; 3. The cheese was always subject to NFO’s security interest; and 4. The market value of the cheese was never established. The truth or falsity of the first three claims is irrelevant. The value of NFO’s collateral was reduced by $700,000 as a result of the scheme to defraud. Grisel confuses the government’s case with that of a private, secured creditor. As to the fourth claim, it is significant that the actions of the defendants and the coconspirator alone provide abundant evidence that the value of the cheese was between $1.36 and $1.40 per pound, since arms-length sales were made at these prices shortly after the sham sale for a price of $0.25 per pound. Moreover, the government presented other testimony regarding prices recorded by the Green Bay Exchange, a market-place for cheese, together with that of others in the market, all establishing that $0.25 per pound was a “joke.” 24 Grisel also contends that a new trial is warranted, given the allegedly perjured testimony of Green and Purtell, both attorneys at one time for NFO who both testified at trial. The trial court found that both Green and Purtell gave testimony later found to be false. During the trial, Green testified that he never recommended that NFO accept $188,000, representing $0.25 per pound of cheese. After trial, Green gave a statement on behalf of NFO that was incorporated into the presentence report. In the post-trial statement, Green said that NFO was actually paid the amount of $188,000. Grisel contends that the jury should have heard testimony that the check was cashed, as evidence that acceptance of the monies represented settlement and extinguished NFO’s security interest. The district court correctly held that such evidence was immaterial to the case. Even if NFO lost its security interest by negotiating the check, it does not follow that there was no scheme to defraud. The sham sale and deliberate concealment are the basis of the government’s case, not the purported extinguishment of the security interest. Purtell testified at trial that he was at one time involved in the civil litigation brought against RPC. He also testified on March 8, 1999 that, “I’m not involved in that case anymore.” (JA 3877.) On remand, the Defendants demonstrated that on January 13, 1999, Purtell had actually filed a lawsuit against RPC on behalf of NFO. The district court described the trial testimony as “more strongly suggest[ing] perjury (or incorrect testimony at a minimum).” (JA 3888.) Nonetheless, the district court correctly noted that the false testimony was not material to any triable issue. Had the jury known of the correct information regarding Purtell’s representation, at best, it would have had additional information that NFO was pursuing its economic interests and sought assistance from the government in pursuing criminal charges. As the district court correctly 25 held, whether NFO or its counsel had such motivation was not probative evidence of whether a criminal fraud had been committed. The district court correctly concluded that the claimed newly discovered evidence regarding the trial testimony of Green and Purtell would not have likely resulted in an acquittal. Grisel contends that because “the proceeds of the liquidation sale were paid to RPC’s creditors . . . there has been a constructive amendment to the nature of the charges in this case. As applied here, there can have been no crime.” (Grisel Br. 34.) The issue was not presented to the district court and is not properly before this Court. Moreover, the contention is without merit. Grisel contends that the proceeds received from the market-based price of $1.36 to $1.40 per pound of cheese, totaling over $1 million, were thereafter paid only to creditors of RPC. This argument overlooks the fact that NFO, which received only $188,000, had a first-position security interest in all the cheese. The other creditors paid from the proceeds included InnoQuest, an entity owned by Grisel. InnoQuest also distributed funds to Mikell and paid Harris $35,000 in attorneys fees. All of these facts are consistent with the indictment and the government’s theory that Grisel and Mikell engaged in a scheme to defraud NFO of the value of its security interest. Grisel’s contentions do not establish that a constructive amendment to the indictment occurred. Instead, he essentially argues that, because the proceeds of the sale of the cheese went to creditors of RPC, no crime was committed, a contention which is false. A constructive amendment occurs “when the terms of an indictment are in effect altered by the presentation of evidence and jury instructions which so modify essential elements of the offense charged that there is a substantial likelihood that the defendant may have been convicted of an 26 offense other than the one charged in the indictment.” United States v. Smith, 320 F.3d 647, 656 (6th Cir. 2003) (citing Stirone v. United States, 361 U.S. 212 (1960)). The indictment clearly alleges the same scheme to defraud that the government pursued at trial. Grisel’s only claim of variance concerns his incorrect contention that no crime was established. No constructive amendment occurred.