Opinion ID: 656149
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 2 Macey was the president and half-owner of Asbestos Real Estate Consultants, Inc. (ARC), a company which inspected buildings for asbestos and consulted with building owners concerning asbestos removal. When ARC discovered asbestos contamination in a building, another company, Three Way Environmental, Inc. (Three Way), was often called to perform the actual asbestos removal. Although no formal referral agreement existed between ARC and Three Way, they had a close business relationship; ARC found asbestos problems and Three Way fixed them. Three Way's president, David Souser, was friendly with Macey, and the two often talked about going into business together. In the summer of 1989, ARC provided Three Way with office space in its building. 3 Business boomed for ARC from early 1988 through the spring of 1989. Federal law required that all public schools be inspected for asbestos by April 1989. Due to the impetus of the government mandate, asbestos inspection businesses thrived. For a time, school administrators scrambled to comply with the federal law. By the spring of 1989, however, most schools had complied, and the demand for asbestos inspection services dropped off sharply. 4 To accelerate its cash flow, in March 1989, ARC entered into a contract with Sunmark. Basically, Sunmark agreed to pay cash for ARC invoices. ARC would offer to sell invoices for completed work to Sunmark, which would make appropriate inquiries to confirm that the invoices were legitimate. After verifying an invoice, Sunmark would immediately pay ARC seventy percent of its value up front. The debtor who owed on the invoice was then notified that payment should be made to Sunmark. When Sunmark eventually received full payment, it would pay a portion of the remaining thirty percent to ARC. Sunmark withheld an agreed-upon portion of the thirty percent as its fee for providing this financing service. 5 From April 1989 through August 1989, Sunmark purchased numerous legitimate invoices from ARC. During this time, the asbestos inspection business remained languid. ARC began having trouble paying its bills. In late August and the first week of September 1989, ARC's bank account had a negative balance. Macey then concocted a scheme to gain funds from Sunmark. Macey had his office manager, Kim Kaiser, execute an invoice in the amount of $97,000 for inspection services ARC claimed to have provided Three Way. The invoice identified three projects ARC purportedly worked on for Three Way: Port Clinton, Olds Center, State of Michigan, and Records Danville. But, in fact, ARC had never done any of the work. Macey then had the sham invoice sent to Sunmark. When Sunmark attempted to verify it, David Souser, president of Three Way, related that ARC had provided the inspection services. 1 Successfully duped, Sunmark paid ARC 70% of the invoice--$67,900. 2 6 Sunmark required Three Way to make its first payment for the invoice by October 7, 1989. Three Way never made this payment and Mark Kraus, Sunmark's general manager, began to investigate. Eventually, Kraus discovered the truth about the sham invoice. He immediately stopped payments to ARC on other invoices. On September 18, 1991, a grand jury returned a 7-count indictment charging Macey with mail fraud and wire fraud, in violation of 18 U.S.C. §§ 1341 and 1343. The grand jury made minor changes in the original charges and issued a superseding indictment on February 14, 1992. 7 Before trial, the government filed a motion to introduce the testimony of Scott Plesniak, a disgruntled former ARC employee. In an offer of proof, Plesniak proffered that he had been an asbestos inspector for ARC, and he was paid one cent per square foot for conducting inspections. In February 1989, he left his job with ARC claiming the company owed him $30,000 for past inspection work. He threatened to hire a lawyer to recover his money. According to Plesniak, Macey then altered ARC work records to make it appear that Plesniak was wilfully exaggerating the square footage of each inspection in order to inflate his compensation. Macey presented these altered work records to state authorities, who arrested and charged Plesniak with theft from ARC. The charges eventually were dropped, because Macey failed to appear in court to prosecute Plesniak. The district court decided to allow this testimony during trial under Federal Rule of Evidence 404(b) to prove Macey's intent to defraud Sunmark. 3 8 Trial was held on the superseding indictment from July 23-30, 1992. The government presented evidence that Macey had executed a false invoice for three projects which ARC in fact never performed. The government also presented Plesniak's 404(b) testimony over Macey's objection. The court provided the jury with two limiting instructions concerning this testimony, restricting its purpose to proof of Macey's intent to defraud Sunmark. 9 In his defense, Macey never attempted to argue that ARC actually performed the inspection work identified in the invoice. Instead, Macey argued that the invoice covered recordkeeping services which ARC did for Three Way. Macey never presented any work product generated by the recordkeeping services; rather, he called two witnesses--Sam Cosentino and Chris Lambesis--to bolster his argument. Cosentino, ARC's treasurer, testified that he had an understanding that ARC employee Evan Horton was paid for some recordkeeping work he performed for Three Way. Lambesis, an employee of a separate company, testified that he once delivered a copy of Three Way's daily log from a construction project to ARC. Macey also sought to elicit testimony from ARC office manager Kim Kaiser to support the recordkeeping defense. Kaiser proffered that about four hours after the invoice was executed she asked Macey what it covered and he answered that it was for recordkeeping services. The court disallowed this testimony as impermissible hearsay. 10 On cross-examination and rebuttal, the government picked apart Macey's recordkeeping defense. Lambesis acknowledged on cross-examination that the daily log he delivered to ARC was less than 100 pages long--hardly the source of a $97,000 recordkeeping bill. Evan Horton testified in the government's rebuttal that contrary to Cosentino's understanding, he never performed recordkeeping services for ARC. He also testified that ARC's computers lacked the capacity for storing customer records. Kaiser testified that during her tenure as office manager, which ended in April 1990, ARC had never used its computers to do any recordkeeping work for Three Way. 11 After closing argument, the court instructed the jury on the seven counts of mail fraud and wire fraud charged in the indictment. Count IV concerned a fraudulent letter which co-conspirator Souser had sent to Sunmark. The letter referred to the work covered by the false invoice, thus creating the impression that the work actually had been completed. Even though Macey did not send this letter, the court instructed the jury that he was responsible for the actions of his co-conspirator. See Pinkerton v. United States, 328 U.S. 640, 647-48, 66 S.Ct. 1180, 1184-85, 90 L.Ed. 1489 (1946). The court provided the following instruction: 12 A conspirator is responsible for offenses committed by his fellow conspirators if he was a member of the conspiracy when the offense was committed and if the offense was committed in furtherance of or as a natural consequence of the conspiracy. Therefore, if you find beyond a reasonable doubt that defendant Thomas E. Macey was a member of a conspiracy at the time that one of his fellow conspirators committed the offense charged in Count 4, in furtherance of or as a natural consequence of that conspiracy, then you should find him guilty of Count 4. 13 The jury returned a guilty verdict on the first six counts charged in the indictment. 14 Before sentencing, the government filed a motion to increase Macey's criminal history category from I to III, pursuant to Guidelines Section 4A1.3. The government took the position that Macey's criminal history did not adequately reflect the seriousness of his past criminal conduct or the likelihood that he would commit other crimes. The district court increased Macey's criminal history category from I to II based on the government's assertions. The court relied primarily on the government's assertion that Macey had twice filed false charges against Plesniak. Macey's Guideline range was fifteen to twenty-one months. The district court sentenced Macey to twenty-one months of incarceration, followed by thirty-six months of supervised release. As a condition of supervised release, the district court ordered Macey to perform one-thousand hours of community service and to pay $29,000 restitution to Sunmark. 15 Macey appeals, making four arguments: 1) that the district court abused its discretion by allowing Plesniak to testify about Macey's prior bad acts; 2) that the district court abused its discretion by prohibiting Kaiser's testimony about Macey's statements made four hours after the invoice was executed; 3) that the district court erred by giving the Pinkerton instruction; and 4) that the district court erred by increasing Macey's criminal history category.