Opinion ID: 1384382
Heading Depth: 2
Heading Rank: 2

Heading: Sufficiency of the Evidence and Manifest Weight

Text: Stacy argues that the evidence at trial was insufficient to convict him and that his convictions were therefore against the manifest weight of the evidence for Count 1  conspiracy to insider trade, Count 23  conspiracy to obstruct justice, and Counts 33, 35 and 36  making false statements. Although Stacy's seventh stated issue raises a general claim of insufficiency against his convictions on all counts, he makes only argument on the specific counts listed above. Therefore, any other sufficiency challenges are waived. See United States v. Layne, 192 F.3d 556, 566 (6th Cir.1999). The district court, in its denial of the motion for judgment of acquittal pursuant to Rule 29 and motion for a new trial pursuant to Rule 33 of the Federal Rules of Criminal Procedure, found that sufficient evidence was presented for a rational trier of fact to find that all the elements of the offenses were proved beyond a reasonable doubt and that the evidence did not preponderate against the verdicts of guilt arrived at by the jury. Therefore, the court found that the convictions were not against the manifest weight of the evidence.
When considering a challenge to the sufficiency of evidence to sustain a conviction on direct appeal, the relevant question is whether  any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979). The appellate court must view all evidence and resolve all reasonable inferences in favor of the government. Id; see also United States v. Searan, 259 F.3d 434, 441 (6th Cir.2001). Because the issue is one of legal sufficiency, the court neither independently weighs the evidence, nor judges the credibility of witnesses who testified at trial. United States v. Talley, 164 F.3d 989, 996 (6th Cir.1999). An appellate court cannot substitute its judgment for that of the jury. United States v. Hilliard, 11 F.3d 618, 620 (6th Cir.1993). Finally, it must be remembered that circumstantial evidence alone can sustain a guilty verdict and . . . [such] evidence need not remove every reasonable hypothesis except that of guilt. United States v. Stone, 748 F.2d 361, 362 (6th Cir.1984). This standard is a great obstacle to overcome, United States v. Winkle, 477 F.3d 407, 413 (6th Cir.2007), and presents the appellant in a criminal case with a very heavy burden. United States v. Jackson, 473 F.3d 660, 669 (6th Cir.2007). A motion for a new trial under Rule 33 of the Federal Rules of Criminal Procedure may be premised upon the argument that the jury's verdict was against the manifest weight of the evidence. Generally, such motions are granted only in the extraordinary circumstance where the evidence preponderates heavily against the verdict. United States v. Turner, 490 F.Supp. 583, 593 (E.D.Mich.1979), aff'd, 633 F.2d 219 (6th Cir.1980). A district judge, in considering the weight of the evidence for purposes of adjudicating a motion for new trial, may act as a thirteenth juror, assessing the credibility of witnesses and the weight of the evidence. United States v. Lutz, 154 F.3d 581, 589 (6th Cir.1998). Our review of the trial court's ruling is limited to determining whether it was a clear and manifest abuse of discretion. United States v. Hernandez, 227 F.3d 686, 695 (6th Cir.2000).
Under 18 U.S.C. § 371, it is illegal for two or more persons [to] conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose. To prove conspiracy, the government must establish: (1) the existence of an agreement to violate the law; (2) knowledge and intent to join the conspiracy; and (3) an overt act constituting actual participation in the conspiracy. See, e.g., United States v. Martinez, 430 F.3d 317, 330 (6th Cir.2005); United States v. Jamieson, 427 F.3d 394, 402 (6th Cir.2005). A tacit or material understanding among the parties to a conspiracy is sufficient to establish the agreement [, and] conspiracy may be inferred from circumstantial evidence which may reasonably be interpreted as participation in a common plan. United States v. Walls, 293 F.3d 959, 967 (6th Cir.2002) (internal citations omitted).
We find that in its denial of the motion for judgment of acquittal/motion for a new trial, the district court provided an appropriate listing of the elements necessary for the Government to prove beyond a reasonable doubt the offense of insider trading: (1) that the defendant, in connection with the purchase or sale of [WF] stock, employed manipulative and deceptive devices and contrivances by employing a device, scheme or artifice to defraud, or engaging in acts, practices or courses of business which operated or would operate as a fraud and deceit upon other persons; (2) that the defendant acted knowingly and wilfully and with the intent to defraud; and (3) that the defendant knowingly used or caused to be used means or instrumentalities of interstate commerce or the facilities of a national securities exchange in connection with the purchase or sale of securities in furtherance of the fraudulent conduct. J.A. at 1194. Additionally the Government was also required to prove that Hughes and Stacy, as tippees: (1) received material, confidential, and non-public information from Blackwell knowing that he was the source; (2) knew or should have known that Blackwell breached his fiduciary duty; and (3) knowingly and wilfully purchased or caused to be purchased shares of WF stock based on that information. Dirks v. SEC, 463 U.S. 646, 660, 103 S.Ct. 3255, 77 L.Ed.2d 911 (1983). Stacy argues that the Government presented nothing but speculation and conjecture in support of its theory that Blackwell provided inside information to Hughes and/or himself. He points out that the Government presented nothing but circumstantial evidence and he, along with Blackwell and Hughes, took the witness stand and denied engaging in insider trading. Stacy also points to the reasonable explanations testified to at trial for both his and his wife's purchases of WF stock. However, [t]he government may meet its burden through circumstantial evidence alone, and such evidence need not exclude every possible hypothesis except that of guilt. United States v. Jackson, 55 F.3d 1219, 1225 (6th Cir.1995) (citing United States v. Peters, 15 F.3d 540, 544 (6th Cir.), cert. denied, 513 U.S. 883, 115 S.Ct. 219, 130 L.Ed.2d 146 (1994)). Additionally, it is well settled that when a defendant offer[s] an innocent explanation for the incriminating facts proved by the government, the jury is free to disbelieve [it]. United States v. Schreane, 331 F.3d 548, 562 (6th Cir.2003). At trial, the Government produced evidence that Blackwell found out about the proposed buyout in late July or early August 1999. This information was not public. It was only through Blackwell's position on the Board at WF that he gained this knowledge. On August 31, 1999, Hughes had a meeting with Blackwell at RBA. Hughes had a close relationship with Blackwell and had worked for him for a number of years. Hughes was a knowledgeable investor. Additionally, Stacy testified that it would be impossible for Hughes to have inside information and not tell him. Beginning on September 7, 1999, and continuing until September 29, 1999, just days before the buyout, Stacy and Hughes, previously cautious investors, bought thousands of shares of WF. Additionally, the couple received a check from Blackwell for $30,000 which they promptly used to purchase WF stock. By October 7, 1999, Hughes and Stacy had sold all of their WF stock, obtaining $110,010.22 in profits. Based on these facts, we find that there was sufficient circumstantial evidence to demonstrate that Blackwell obtained non-public information about the buyout and conveyed that information to Hughes, who in turn shared that information with her husband, Stacy, and that the couple purchased WF stock based on that information. As a knowledgeable investor, Hughes would have known that Blackwell was breaching his duty to the company, its shareholders, and the investing public by sharing this information. The jury could also infer that Appellants' close relationship would mean that Stacy was also aware, through Hughes, that Blackwell's conduct was improper. Stacy again asserts that each of the persons alleged to have conspired with Blackwell did not have a connection with the other alleged conspirators and thus had no common goal. This issue was discussed above and will not be discussed further. Based on the above, we find that, viewing the evidence in a light most favorable to the Government, a rational trier of fact could have found beyond a reasonable doubt that the Government had proven the essential elements of conspiracy to engage in insider trading with respect to Stacy. Additionally, because the amount of evidence presented was substantial, the denial of Stacy's Rule 33 motion was not a clear and manifest abuse of discretion.
Stacy argues that the evidence presented against him at trial on this charge was insufficient to sustain a conviction and, thus, that his conviction was against the manifest weight of the evidence. He points out that there was no evidence that he entered into an agreement with Stephans-Blackwell or Blackwell to delete names from RBA's database, an act Stephans-Blackwell admitted to on the witness stand. He further argues that he did not trade on inside information, thus making his statements to the SEC accurate. Finally, Stacy claims that even if it was found that he did make false statements, the Government presented no evidence that he conspired with anyone, including his wife, to obstruct justice. As stated above, a conspiracy can be shown through circumstantial evidence, that may reasonably be interpreted as participation in a common plan. Walls, 293 F.3d at 967. Additionally, even though there was no evidence that Stacy was involved in the deletion of names from the computer, that act was not the only overt act listed in the indictment. The indictment alleges that Stacy failed to provide copies of his brokerage account statements for the month of September 1999, when all the significant purchases of WF were made, and that he gave false statements to the SEC during his testimony, in an attempt to obstruct or to impede the SEC proceeding. During trial, the Government produced documents detailing Appellants' stock transactions. Those documents demonstrated that most of the WF shares were purchased by the couple during the month of September. A reasonable jury could infer, based on the close relationship between Hughes and Stacy, that the two agreed not to produce the September 1999 statements for their November 2000 testimony before the SEC. The jury could infer that they did so in an attempt to conceal the number of shares they had purchased during that month, thereby concealing the fact that they were trading based on inside information obtained from Hughes's boss, Blackwell, who also sat on the Board of Directors for WF. Additionally, because the jury found that Stacy had committed insider trading, it was necessary for them to determine that his statements to the SEC were false. Based on the above, we find that, viewing the evidence in a light most favorable to the Government, a rational trier of fact could have found beyond a reasonable doubt, that the Government had proven the essential elements of conspiracy to obstruct justice, and that Stacy was, therefore, guilty of the crime charged. Additionally, because the amount of evidence presented was substantial, we do not find that the district judge's decision to deny the Rule 33 motion was a clear and manifest abuse of discretion.
Under 18 U.S.C. § 1001, it is unlawful for any person to (1) knowingly and willfully (2) make any materially false, fictitious, or fraudulent statement or representation (3) in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States. On November 21, 2000, Stacy testified before the SEC and provided the following responses: Q. Did you talk with anyone regarding your purchase of Worthington Foods in the Advest account [on September 1, 1999]? A. No . . . . Q. Did you know about any possible business activities concerning Worthington Foods prior to the announcement on  in October of the deal with Kellogg? A. No . . . . Q. Any business deals involving any business combination, or any business deals involving Worthington Foods prior to the news announcement in October[?] A. No . . . . Q. So prior to the announcement in October of 1999 did you have any reason to believe that Worthington Foods was considering any business combinations, mergers, or acquisitions? A. No. Q. Did you have any idea prior to the announcement in October of 1999 that there was any significant business developments at Worthington Foods? A. No . . . . Q. Did Kelley [sic] [Hughes] ever tell you about anything she had heard at work regarding Worthington [Foods] in August of 1999? A. No. Q. Did Kelley [sic] [Hughes] ever tell you about anything she had heard at work regarding Worthington [Foods] in September of 1999? A. No. Stacy claims that the jury incorrectly found that he had made false statements to the SEC. He additionally contends that the verdicts on these counts were against the manifest weight of the evidence because the statements were only false if he actually did trade on inside information. The only proposition offered to support this argument is his insistence that he was telling the truth. It is assumed that Stacy is referring to both his and Hughes's testimony offering allegedly reasonable explanations for their stock purchases. However, the jury was free to disbelieve Appellants' explanation. Schreane, 331 F.3d at 562. As previously stated, there was sufficient evidence to support the jury's finding that Stacy conspired to and did commit insider trading. In finding that Stacy committed insider trading, the jury necessarily found his statements before the SEC  that he did not commit insider trading  to be false. Therefore, we conclude that the Government presented sufficient evidence to allow a reasonable juror to convict Stacy of making false statements as charged in Counts 33, 35, and 36.