Opinion ID: 2653405
Heading Depth: 2
Heading Rank: 1

Heading: sufficiency of the evidence

Text: Here, Leitner did not move the district court for a judgment of acquittal, which triggers review for only a miscarriage of justice. See Perez, 661 F.3d at 573–74. However, even under de novo review, there was overwhelming evidence of Leitner’s guilt, and we affirm his conviction. 9 Case: 10-13826 Date Filed: 02/14/2014 Page: 10 of 18 The conspiracy statute under which the jury convicted Leitner criminalizes conspiracies to either: (1) commit any offense against the United States; or (2) defraud the United States. 18 U.S.C. § 371. At trial, the government was required to prove: “(1) the existence of an agreement to achieve an unlawful objective; (2) the defendant’s knowing and voluntary participation in the agreement; and (3) the commission of an act in furtherance of the agreement.” United States v. Adkinson, 158 F.3d 1147, 1153 (11th Cir. 1998). The indictment charged Leitner and his co-defendants conspired: (1) to defraud the United States by impeding and defeating the lawful functions of the IRS in the assessment and collection of taxes; and (2) to commit other offenses against the United States, specifically wire fraud in violation of 18 U.S.C. § 1343. Here, the jury convicted Leitner of the dual object conspiracy to impede the IRS’s assessment and collection of taxes and to defraud PQI customers. As for the conspiracy to defraud the United States, the indictment alleged that Leitner and his co-defendants conspired to do so by defeating the lawful functioning of the IRS. In such a case, the government must show: “there was an agreement whose purpose was to impede the IRS (the conspiracy), and that each defendant knowingly participated in that conspiracy.” Id. at 1154. “[F]ailure to properly report income can constitute the require act in furtherance of” such a conspiracy. Id. 10 Case: 10-13826 Date Filed: 02/14/2014 Page: 11 of 18 At trial, the government’s evidence showed that Leitner and his codefendants voluntarily formed PQI or joined with the purpose of distributing information on schemes to avoid taxes. Leitner does not dispute his role in PQI, or PQI’s stated mission. Leitner’s primary argument is that he did not intend to defraud the United States because he thought the products he sold were legal. The evidence at trial refuted this argument too. Evidence showed that Leitner sent emails to prospective PQI customers, such as Agent Hampton and Cordova, filled with statements about the illegality of the IRS. Although Leitner now argues that he honestly believed the truthfulness of his assertions, this argument is specious at best. The evidence also proved that the speakers at PQI conferences advocated for defiance of tax laws. Leitner required that Agent Hampton sign a confidentiality agreement before Agent Hampton attended a PQI conference. A reasonable jury could infer that Leitner knew that the conference speakers advocated illegal activity, and insisted that Hampton sign the confidentiality agreement so as to prevent law enforcement from learning about the agendas of these conferences. There was also ample evidence that Leitner committed at least two overt acts in furtherance of the conspiracy to defraud the United States—he recruited individuals like Agent Hampton and Cordova to purchase PQI memberships and then avoid tax liability; and he personally failed to pay taxes for at least nine years. 11 Case: 10-13826 Date Filed: 02/14/2014 Page: 12 of 18 As for the wire fraud conspiracy, the elements are: “(1) intentional participation in a scheme to defraud, and (2) the use of the interstate mails or wires in furtherance of that scheme.” United States v. Maxwell, 579 F.3d 1282, 1299 (11th Cir. 2009). “A scheme to defraud requires proof of a material misrepresentation, or the omission or concealment of a material fact calculated to deceive another out of money.” Id. Moreover, “to prove a conspiracy to commit wire fraud, the government need not demonstrate an agreement specifically to use the interstate wires to further the scheme to defraud.” United States v. Broughton, 689 F.3d 1260, 1277 (11th Cir. 2012) (internal quotation marks and alteration omitted). Rather, “it is enough to prove that the defendant knowingly and voluntarily agreed to participate in a scheme to defraud and that the use of the interstate wires in furtherance of the scheme was reasonably foreseeable.” Id. (internal quotation marks omitted). Viewing the evidence in the light most favorable to the government, the evidence showed that Leitner participated in a scheme to defraud PQI customers by keeping from customers the fact that PQI memberships were essentially worthless. Ample evidence showed that Leitner and his co-defendants knew that the PQI vendors’ products did not work. Nevertheless, the conspirators charged high rates for the right to purchase those ineffective products. A reasonable jury could thus infer, then, that the conspirators sold these memberships without 12 Case: 10-13826 Date Filed: 02/14/2014 Page: 13 of 18 disclosing the uselessness of the PQI vendors’ products in order to deceive the consumers out of money. There was extensive evidence that Leitner himself knew that the PQI memberships were of no use to consumers. For example, the government’s evidence showed that Leitner made promises to Agent Hampton about the usefulness of the IMF Decoder product and encouraged her to purchase that product. But, Leitner did not reveal to Agent Hampton that he had a personal financial incentive to persuade her to buy the product. A reasonable jury could infer from this evidence that Leitner knew his claims about the IMF Decoder product were false, and that he only made them because he wanted to receive a commission from IMF Decoder. A reasonable jury could also infer that Leitner knew that the PQI vendors’ products did not work from Cordova’s testimony that he (Cordova) told Leitner about his substantial financial losses as a result of using a PQI vendor product, that Leitner promised to investigate, and then promptly stopped communicating with Cordova. Cordova indicated that this occurred sometime in 2003. However, Agent Hampton testified that between 2003 and 2005, Leitner made numerous sales pitches to her and promises about the value of PQI memberships. A reasonable jury could conclude from this evidence that Leitner encouraged Agent 13 Case: 10-13826 Date Filed: 02/14/2014 Page: 14 of 18 Hampton to buy a PQI membership and use PQI vendors’ products knowing that at least one PQI member, Cordova, had lost $100,000 as a result of those products. On the use of interstate wires element, the government introduced numerous emails that Leitner wrote and sent to individuals in other states to further the conspiracy’s fraudulent scheme. The government also introduced evidence of traditional wire transfers of cash made by Leitner’s co-conspirators in furtherance of the conspiracy. Thus, this element was satisfied too. See Merino, --- F. App’x at ----, 2013 WL 5996040, at . In sum, there was extensive evidence to support defendant Leitner’s conviction for knowingly and voluntarily joining and participating in the dual object conspiracy to defraud the United States by impeding the government’s assessment and collection of taxes and to commit wire fraud by defrauding PQI’s customers. We thus reject Leitner’s sufficiency of the evidence challenge to his conviction. B. Admission of Evidence About PQI’s Predecessor Organization For the first time on appeal, Leitner also argues that the district court erred in admitting the government’s evidence about the arrests and prosecutions of individuals associated with PQI’s predecessor organization, Institute for Global Prosperity (“Global”). Leitner maintains that the probative value of this evidence 14 Case: 10-13826 Date Filed: 02/14/2014 Page: 15 of 18 was substantially outweighed by the danger of unfair prejudice in violation of Rule 403 of the Federal Rules of Evidence. See Fed. R. Evid. 403. Evidence showed that Global was formed in 1996 and operated until 2002. Global’s business model was very similar to the one PQI later adopted. Global sold access to written materials and offshore seminars espousing the view that “there was no requirement to file income taxes.” There were also four levels of Global memberships a customer could buy, similar to PQI’s three-level membership structure. Moreover, Global’s salesmen received commissions on each new membership they sold, much like the commissions PQI’s salesmen (including Leitner) later received. Global disbanded in 2002 after coming under investigation by the IRS. As one witness testified, in response to the IRS investigation, some of Global’s leaders decided “Global was going to disappear, and it was going to become another company called [Pinnacle] Quest International.” One former Global executive stated that the plan was “that they were just going to take all the people from Global and grandfather them in.” Leitner, who had been a Global member and salesman, was grandfathered into PQI on May 17, 2002. The government offered evidence at trial to show that the founders and owners of Global, as well as several Global employees were convicted of taxrelated offenses. Evidence also showed that several of Leitner’s co-defendants 15 Case: 10-13826 Date Filed: 02/14/2014 Page: 16 of 18 specifically knew about the convictions of these Global owners and employees. This evidence countered the defendants’ arguments that they did not know that PQI’s activities were illegal. Leitner did not object at trial to the introduction of this evidence. Normally, “when a party raises a claim of evidentiary error for the first time on appeal, we review it for plain error only.” United States v. Baker, 432 F.3d 1189, 1202 (11th Cir. 2005). In order to reverse for plain error, there must be (1) error, (2) that is plain, and (3) that affects substantial rights, but only if (4) the error seriously affects the fairness, integrity, or public reputation of judicial proceedings. Id. at 1202–03. However, Leitner’s co-defendants did object to the evidence. Leitner apparently asks us to treat his co-defendants’ objections as effectively preserving the issue for him on appeal and thus triggering abuse of discretion review. We need not decide whether to apply plain error or abuse of discretion review. Even if we adopt Leitner’s position, the district court did not abuse its discretion by admitting the evidence about the Global owners and employees. The government did not offer the evidence to show propensity or guilt by association. Rather, the evidence showed that Leitner and his co-defendants knew that the products they were selling (which were substantially similar to those sold by the Global employees previously) were fraudulent. The evidence was particularly probative as to the guilt of a co-defendant like Leitner, who had worked for Global 16 Case: 10-13826 Date Filed: 02/14/2014 Page: 17 of 18 and was grandfathered into PQI. Because Leitner argued that he did not know that what he did for PQI was illegal, the evidence about Leitner’s affiliation with Global, and the prosecution of the Global individuals was extremely probative in rebutting Leitner’s defense. Leitner emphasizes that the government “failed to establish whether Leitner had any connection to these [Global] individuals; whether he even knew them, whether he knew about any of their activities, whether he had known of their associations with other codefendants, and whether they were part of the alleged conspiracy here.” However, it does not matter that the government did not offer direct evidence of Leitner’s knowledge of the prosecutions of the Global individuals. The government’s evidence showed Leitner’s involvement in Global and in PQI, and from this evidence, a reasonable jury could infer that Leitner knew the reason Global was stopping operations and was being replaced by a new entity, PQI. Moreover, each defendant was free to argue that he or she was not aware of those arrests, prosecutions, and convictions. Furthermore, the district court provided a lengthy and highly specific limiting instruction immediately after the evidence was introduced, which Leitner’s co-defendants approved of. 17 Case: 10-13826 Date Filed: 02/14/2014 Page: 18 of 18 In light of this record, we cannot say that the evidence about the Global individuals violated Rule 403. See Fed. R. Evid. 403. Accordingly, the district court did not commit plain error, or abuse its discretion by admitting the evidence. In light of the foregoing, we affirm Leitner’s conviction. AFFIRMED. 18