Court Opinion

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Date Created: 2015-10-13 22:16:00.411991+00
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Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

3-9-2005

USA v. Benjamin
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-3076

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Recommended Citation
"USA v. Benjamin" (2005). 2005 Decisions. Paper 1463.
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                                                           NOT PRECEDENTIAL

                  IN THE UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                              _______________

                                    No. 03-3076
                                 ________________

                          UNITED STATES OF AMERICA

                                        v.

                             GILBERT BENJAMIN,

                                          Appellant
                     ____________________________________

                   On Appeal From the United States District Court
                             For the District of New Jersey
                                (D.C. No. 02-cr-00168)
                    District Judge: Honorable Mary Little Cooper
                   _______________________________________

                             Argued: May 4, 2004
            Before: SLOVITER, FUENTES and BECKER, Circuit Judges

                               (Filed: March 9, 2005)

GEORGE S. LEONE, ESQ.
SABRINA G. COMIZZOLI, ESQ. (Argued)
Office of the United States Attorney
970 Broad Street
Room 700
Newark, NJ 07102
       Attorneys for Appellee

DAVID E. SCHAFER, ESQ. (Argued)
Office of the Federal Public Defender
22 South Clinton Avenue
Station Plaza #4, 4 th Floor
Trenton, NJ 08609
       Attorney for Appellant

                                _______________________

                                       OPINION
                                _______________________

BECKER, Circuit Judge.

       This is an appeal by Gilbert Benjamin (“Benjamin”) from a judgment in a criminal

case in the wake of a jury verdict of guilty. It presents both an attack on the conviction

and on the sentence. The panel having resolved at conference that the appeal of the

conviction was lacking in merit, we held the case C.A.V. pending the decision of the

Supreme Court in United States v. Booker, — U.S. —, 125 S. Ct. 738 (2005). In the

wake of that decision, we will, after affirming the conviction, remand the matter for

resentencing in accordance with this Court’s post-Booker practice.

                              I. Facts and Procedural History

       The following are the facts developed in the trial record, viewed in the light most

favorable to the government. Between 1985 and 1998, Benjamin worked as a civilian

computer specialist in the Communications and Electronics Command (“CECOM”) of the

Department of the Army in Fort Monmouth, New Jersey. In his spare time, Benjamin ran

two side businesses. The first was Blue Sky Enterprises, Inc., a sexually-oriented

entertainment business which offered an internet-based, interactive, adult pornographic

                                             2
website with live sex shows for subscribers who paid a monthly membership fee. Blue

Sky operated out of a warehouse at Allaire Airport, a private airport in Farmingdale, New

Jersey, and was supported by a computer server linked to a high-speed data transmission

line supplied by MCI (the “T-1 line”) for internet access. Benjamin’s second side

business involved selling computers at discounted prices to friends and acquaintances,

mostly out of the garage at his home in Neptune, New Jersey, but also through his wife or

brother, Gary Benjamin, over the internet and to colleagues at work.

       In August 1998, CECOM employees discovered that the government had been

paying the MCI bills for the T-1 line linking Blue Sky at Allaire Airport to the internet;

that Blue Sky was a pornographic website operated by Benjamin; and that the T-1 line

served no governmental or military purpose. The investigations also determined that the

government had paid for computer merchandise ordered by Benjamin which had been

shipped to addresses in Florida and New Hampshire where the military had no presence,

including to Benjamin’s brother, Gary Benjamin, who owned an electronics store, A&B

Computers, Inc., in Berlin, New Hampshire, and who also spent time in Sarasota, Florida.

The computers were shipped to Gary Benjamin under the false military title “Colonel

Gary.” 1 Gary Benjamin sold the computers at discounted prices, but Gilbert Benjamin

retained the proceeds. Benjamin had even authorized computer shipments, claiming that

they were for either “new equipment training” or “Black Op,” apparently a secret

  1
  Shipping records also reflected that computers were shipped to Gary Benjamin’s
employee, Dennis Therrien, under the pseudonym “Sgt. Dennis.”

                                             3
operation.

       Benjamin was charged in three different fraudulent schemes: counts 1-17

addressed the “Blue Sky Mail Fraud” scheme in which Benjamin allegedly caused the

government to pay the MCI bills for a T-1 line that supported Blue Sky; counts 18-34

addressed the “Computer Mail Fraud” scheme in which Benjamin allegedly used his

government position to order computers and computer parts which were paid for by the

government but which he then sold privately for his own profit; and counts 35-68

addressed the “False Claim Upon the United States” scheme in which Benjamin allegedly

submitted claims for reimbursement to the government for the purchase of internet

services and computers which he had converted to his own personal use. Benjamin raises

four issues relative to the conviction.

                                          II. Discussion

                        A. Cross-examination of James Lockwood

       Benjamin contends that the District Court erred when it refused to let him cross-

examine government witness James Lockwood regarding personal financial difficulties

Lockwood had in 1989. Lockwood had been Benjamin’s civilian supervisor, and it was

he who explained to the jury the process that led to the discovery that the government was

paying for an unnecessary T-1 line that was supporting Benjamin’s pornographic web

site. Benjamin sought to impeach Lockwood on cross-examination with “reverse Fed. R.

Evid. 404(b)” evidence that, in 1988 and 1989, Lockwood had experienced personal

                                                4
financial difficulties and borrowed money from two subordinates. Defense counsel

suggested that this evidence was relevant because it was against regulations to borrow

money from an inferior and because the financial “motive” extended to the time of the

indictment, ten years later. But this lapse in time itself undermines the notion that the

District Court abused its discretion in excluding this evidence. At all events,

considerations such as undue waste of time and confusion of the issues under Rule 403

made the exclusion reasonable; additionally, any error resulting from the exclusion would

have been harmless because the evidence against Benjamin was overwhelming.

                                        B. Variance

       Counts 18-34 charged Benjamin with a scheme to defraud the United States by

profiting from the sale of computers paid for by the government. The District Court

allowed the government to introduce, as “intrinsic,” evidence that Benjamin sold

additional computers locally, other than those shipped to New Hampshire and Florida.

Benjamin claims that in so doing, the District Court created a variance between the proof

and the indictment. The indictment charged that the principal object of Benjamin’s

computer fraud scheme was: “to unjustly enrich himself by ordering computer products . .

. converting those products to his own use and then reselling them and keeping the

proceeds.” App. at 24. The District Court correctly ruled that the challenged evidence

was intrinsic to the government’s case because it demonstrated Benjamin’s overarching

scheme—he unjustly enriched himself by selling computers for which the government

                                              5
had paid. We have explained that “acts are intrinsic when they directly prove” the

charged offense. United States v. Cross, 308 F. 3d 308, 320 (3d Cir. 2002). The District

Court found that the local computer sales constituted evidence of the crime charged.

App. at 695. To show reversible error, Benjamin must show that (1) “there was a

variance between the indictment and the proof adduced at trial” and (2) “the variance

prejudiced some substantial right.” United States v. Balter, 91 F.3d 427, 441 (3d Cir.

1996). There is no variance because the unjust enrichment that resulted from the

computer sales was the type of conduct described in the indictment.

                         C. Cross-examination of Linda Smollen

       Benjamin called Smollen, who had been his administrative assistant at Fort

Monmouth in 1996, as a witness to testify that the army inventory system allowed Jerry

West free reign over the computers coming into and leaving the base. During cross-

examination, the government asked Smollen about past alcohol problems. The

government claims that it wanted to elicit testimony that she had abused drugs and

alcohol for purposes of attacking her perception and her recollection of the events about

which she testified. We find this stratagem troubling, but do not find reversible error.

As suggested above, the standard of review for admissibility of evidence is abuse of

discretion, see United States v. Serafini, 233 F. 3d 758, 768 n.14 (3d Cir. 2000), and the

inclusion of this evidence hardly rises to that level. Indeed, Smollen’s testimony had

little probative value: she merely testified that she once assisted Jerry West in loading

                                              6
computer software—hardly testimony that would have exculpated Benjamin of computer

theft even had her credibility been unchallenged.

                         D. Cross-examination of Eugene Samuel

       Samuel was Benjamin’s supervisor at Forth Monmouth and, at the time that he was

subpoenaed by Benjamin to testify, he was the plaintiff in a civil employment

discrimination suit against the Department of Defense. According to Benjamin, the Court

“severely hampered Benjamin’s ability to elicit information from Samuel, and violated his

Sixth Amendment right to call a witness in his defense” by permitting the government to

threaten to cross-examine Samuel about matters that might lead him to invoke his Fifth

Amendment right against self-incrimination. Benjamin also believes that the District

Court abused its discretion by not requiring the government to state on the record, outside

the presence of the jury, the supposed incriminating questions it wished to ask Samuel.

       We are frankly mystified by these arguments. It appears that Samuel had a prior

suspension for sexual harassment that he might have been trying to avoid being brought

to light. He may also have been worried that he would be cross-examined in such a way

that he would be implicated in criminal activity related to the charges against Benjamin.

To allay these concerns, the District Court informed Samuel that he could invoke his Fifth

Amendment right to silence and that if he was concerned that a particular question “might

implicate [his] own rights,” he should err “on the side of just quietly saying I think I

would like to have a recess now.” These considerations do not render the actions of the

                                              7
District Court erroneous.

       Benjamin also claims that “Samuel’s concern over the government’s threatening

cross-examination ballooned into anxiety about whether his direct testimony violated his

security clearance.” (Benjamin Br. at 21.) But this contention makes little sense,

especially in light of the District Court’s caution in this area. It seems that no questions

were asked that would have constrained Samuel to invoke his Fifth Amendment rights.

In sum, we fail to see where there was any conflict between Benjamin’s Sixth

Amendment right to procure testimony and Samuel’s Fifth Amendment right not to

incriminate himself.

                                        E. Restitution

       The District Court ordered Benjamin to make restitution in the amount of

$383,605 to the Department of the Army pursuant to the Mandatory Victim Restitution

Act (“MVRA”), 18 U.S.C. § 3663A. This figure included the cost of the T-1 line

servicing Blue Sky ($96,733), the cost of the computers which Benjamin stole and

shipped out of state ($221,431), and the cost of the computers which Benjamin stole and

sold locally in New Jersey ($65,441). Benjamin submits that the uncharged computers

constituted a variance, see supra Part II.B, and that it was therefore error to impose

restitution for them. He cites Hughey v. United States, 495 U.S. 411 (1990) for the

proposition that the court cannot order restitution for items not specifically listed in the

indictment. However, a post-Hughey amendment has expanded the power of district

                                               8
courts to order restitution and has enabled district courts to order restitution without

regard to whether the particular criminal conduct was charged in the indictment. See 18

U.S.C. § 3663(a)(2). As we have explained, the 1990 amendments “were intended to

change the Hughey interpretation of the statute by enlarging the courts’ power to order

restitution beyond that permitted by Hughey.” United States v. Seligsohn, 981 F.2d 1418,

1422 (3d Cir. 1992).

       Benjamin was charged with and convicted of mail fraud, a crime that includes a

scheme as an element of the offense. See 18 U.S.C. § 1341. As we have explained in

Part II.B, Benjamin’s local sales of computers fall within the overarching scheme

described in the indictment, and hence the losses from the locally sold computers resulted

directly from Benjamin’s criminal conduct, see United States v. Kones, 77 F.3d 66, 70 (3d

Cir. 1996). Accordingly, the District Court did not abuse its discretion in ordering that

Benjamin make restitution to the government for all the stolen computers, including those

he sold locally, see United States v. Crandon, 173 F.3d 122, 125 (3d Cir. 1999).

                                        III. Summary

       In view of the foregoing, the judgment of conviction and the order for restitution

will be affirmed. However, as noted above, Benjamin’s attacks on the sentence are

another matter. More specifically, Benjamin makes the following objections to the

sentence: (1) that the District Court erred in finding that the government had proven an

amount of loss equal to one hundred percent of the amount billed for two T-1

                                              9
communication lines; (2) that the District Court erred in giving him a two-level

enhancement for obstruction of justice in addition to an upward departure for obstruction;

and (3) that the District Court erred by giving him either an upward adjustment for

obstruction of justice or an upward departure for obstruction of justice.

       Because these points implicate the strictures of Booker, we will vacate Benjamin’s

sentence and remand to the District Court for resentencing.

                                             10