Court Opinion

ID: 2998639
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:45:47.351008+00
Date Added: 2024-06-11T11:17:51.784556
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

Nos. 04-4232, 05-1539
UNITED STATES OF AMERICA,
                                            Plaintiff-Appellee,

                              v.

DANIEL E. DANFORD,
                                        Defendant-Appellant.
                        ____________
          Appeals from the United States District Court
               for the Western District of Wisconsin
         No. 04-CR-28—Barbara B. Crabb, Chief Judge.
                        ____________
ARGUED SEPTEMBER 13, 2005—DECIDED DECEMBER 20, 2005
                AMENDED JANUARY 18, 2006
                     ____________

  Before BAUER, MANION, and WILLIAMS, Circuit Judges.
  BAUER, Circuit Judge. Defendant-Appellant Daniel E.
Danford appeals his convictions on three counts of mail
fraud under 18 U.S.C. § 1341 and two counts of interstate
transportation of a security taken by fraud under 18 U.S.C.
§ 2314. Danford argues that the district court abused its
discretion in four ways: (1) by denying his motion for
mistrial; (2) in admitting evidence under the FRE 803
exception to the hearsay rule; (3) by responding to jurors’
questions during their deliberations; and (4) in calculating
2                                    Nos. 04-4232, 05-1539

restitution. Further, Danford contends that his sentence
was unreasonable. We affirm the decision of the district
court and find that Danford’s sentence was reasonable.

                       Background
  Danford was the owner of Danford Jewelers, a jewelry
store in Madison, Wisconsin. On June 18, 1998, police
responded to an alarm at the store, where Danford reported
that he had been robbed at gunpoint. Danford told the
police that the robber had taken almost all of the store’s
inventory.
  Danford said that early the morning of June 18, 1998, he
went to his office alone. Danford’s office was located in the
same building as Danford Jewelers, but the office was on
the second-floor and was not connected to the store. He said
that a robber came into his second-floor office and forced
him at gunpoint to go downstairs and unlock the store.
Danford said that the robber forced him to disarm the
alarm system, open the safe, and empty the jewelry from
the safe into a bag.
  Normally, Danford did not open the store nor deactivate
the alarm. A few weeks prior to the reported robbery,
Danford had asked the store manager to refresh him on
how to disarm the alarm because he had lost his password.
  After reporting the robbery, Danford filed an insurance
claim. The store employees compiled a list of all the stolen
items. The final list of stolen items was signed under oath
by Danford in front of his attorney, notarized, and then
mailed to the insurance company to support his claim.
  For reasons not pertinent to this appeal, the insurance
company did not pay Danford’s claim immediately. After
some litigation, in March of 1999 the insurance company
finally paid Danford for the entire claim amount, totaling
$1,235,464.
Nos. 04-4232, 05-1539                                      3

  Starting about eight months after the claim was paid,
during the busy holiday shopping season in November of
1999, Danford began slipping into the store’s inventory
items that had been reported stolen. When Danford re-
introduced these items he did not follow the store’s typical
inventory procedures. Instead, Danford brought the jewelry
back to the store in batches and directed his bookkeeper to
put them in inventory. Unlike the standard procedures for
new inventory at the store, these batches of jewelry had no
accompanying invoices. Moreover, the re-introduced items
did not have their original inventory tags. Thus, nothing on
the jewelry pieces indicated that they had ever been in the
store before.
  From time to time, as a shareholder of Danford Jewelers,
Danford had borrowed money from the company. With the
re-introduced batches, Danford gave his bookkeeper a
handwritten list (rather than the typical invoice), with
dollar amounts listed that Danford had assigned to the
pieces himself. Explaining that the items came either from
him personally or from a partnership that Danford and his
father-in-law had established to buy jewelry at estate sales,
he directed the bookkeeper to “trade” the value of the
jewelry against the shareholder debt that he owed to the
company.
  Each time Danford re-introduced a batch of jewelry with
the handwritten sheet, the bookkeeper would put the item
back into inventory, give it a new number, and then offset
the value of each item against the debt that Danford owed
to the business. In total, Danford introduced more than
$170,000 of the stolen jewelry back into the store and
directed his bookkeeper to credit the outstanding debt on
his account with the “new” pieces.
  During the holiday season of 1999 employees began
recognizing that some items previously reported stolen were
re-appearing in the store. Some employees started to talk
4                                     Nos. 04-4232, 05-1539

about these suspicions. Finally, Danford heard about the
rumors and called an employee into his office to confront
her about the accusations. She explained to an angry
Danford that she was not accusing him of robbing the store
but rather she was confused as to where the jewelry that
had been reported stolen was coming from. Danford lied to
his employee and explained that he had bought the jewelry
items from the store himself so that the books would look
good for the bank.
  Danford strung together several other lies to cover-up his
scheme. He even went so far as to threaten a goldsmith who
was leaving the company, warning him not to say anything
about what went on in the store. Eventually, in the spring
of 2000, Danford went an extra step and began melting
down some jewelry in the store’s goldsmith shop after work
hours.
  In June of 2000, agents executed federal search warrants
at both Danford Jewelers and Danford’s house. They found
several items of jewelry in both locations and found the
inventory records at the store. Not remarkably, the items
recovered at Danford’s home and his store matched the
items described on Danford’s list of stolen items. Further,
at trial, several vendors testified that some of the recovered
jewelry carried unique serial numbers or were one-of-a-kind
items, making identification of these items as pre-robbery
pieces easy.
  Danford first argues that the district court abused its
discretion by denying his motion for a mistrial. He contends
that prejudicial evidence was published to the jury and that
the district court failed to determine fully what jurors were
exposed to that evidence. Further, Danford asserts the
district court failed to give a proper curative instruction to
the jury regarding the prejudicial information.
 We review a district court’s denial of a motion for mistrial
under an abuse of discretion standard. United States v.
Nos. 04-4232, 05-1539                                       5

Smith, 308 F.3d 726, 739 (7th Cir. 2002). Our review is
highly deferential because the trial judge “is in the best
position to determine the seriousness of the incident in
question, particularly as it relates to what has transpired
in the course of the trial.” United States v. Clarke, 227 F.3d
874, 881 (7th Cir. 2000). We will reverse a district court’s
denial of a mistrial only if “we have a strong conviction that
the district court erred.” Id. The ultimate inquiry “is
whether the defendant was deprived of a fair trial.” Id.
  After the prosecutor inadvertently published to the jury
a letter containing the prejudicial (but irrelevant) infor-
mation, defense counsel moved for a mistrial, contending
that the mistake prejudiced the entire jury. The district
court judge surveyed the jury in an attempt to resolve the
problem. The letter was re-published in redacted form and
the judge inquired as to whether any of the jurors had read
the letter in its entirety. One juror responded that she had
read the entire letter; the judge admonished her not to
discuss that information with any of the jurors and to
disregard its content completely. Further, the judge offered
to strike the juror in question and replace her with an
alternate juror but Danford declined.
  This Court has noted before “that jurors are presumed to
follow limiting and curative instructions unless the matter
improperly before them is so powerfully incriminating that
they cannot reasonably be expected to put it out of their
minds.” Smith, 308 F.3d at 739 (citing Richardson v. Marsh,
481 U.S. 200, 207-08 (1987)). In this case, we assume no
different. The irrelevant information was before the jury for
a relatively short period of time (about one minute) and was
published during testimony of the prosecution’s witness.
Additionally, the judge gave a curative and limiting instruc-
tion to the jury and even offered to remove the juror who
had read the irrelevant information. From this vantage
point we see no abuse of discretion on the district court’s
part when it denied Danford’s motion for mistrial.
6                                       Nos. 04-4232, 05-1539

  Danford contends that the district court erred when it
admitted hearsay evidence at his trial that was testimonial
in nature and violated his Sixth Amendment right to
confront a witness under the Supreme Court’s holding in
Crawford v. Washington, 541 U.S. 36 (2004). We review de
novo district court rulings that affect a defendant’s Sixth
Amendment right to confront a witness. United States v.
Castelan, 219 F.3d 690, 694 (7th Cir. 2000).
  At trial, Stephanie Kurka, a former Danford Jewelers
employee, testified that approximately two weeks before the
robbery occurred she witnessed the Danford Jewelers store
manager with Danford talking in front of the store’s alarm
system. Immediately following that conversation (less than
60 seconds later), Kurka asked the manager what had
happened. The manager explained that she was demon-
strating to Danford how to disarm the alarm because
Danford had lost his password.
  While the Court in Crawford declined to “spell out a
comprehensive definition of ‘testimonial,’” it did offer
clarifying examples of what testimonial hearsay covers.
Crawford, 541 U.S. at 68. Testimonial hearsay includes
prior testimony from a preliminary hearing or testimony in
response to police interrogations. Id. When nontestimonial
hearsay is offered, however, the Court maintains that a
judicial determination of reliability is sufficient. Id. See also
Ohio v. Roberts, 448 U.S. 56 (1980). The Court further noted
that “[a]n accuser who makes a formal statement to govern-
ment officers bears testimony in a sense that a person who
makes a casual remark to an acquaintance does not.”
Crawford, 541 U.S. at 51.
  In this case, the conversation between Ms. Kurka and the
store manager is more akin to a casual remark than it is to
testimony in the Crawford-sense. Id. Accordingly, we hold
that the district court did not err in admitting this testi-
Nos. 04-4232, 05-1539                                        7

mony under FED. R. EVID. 803(1), the present-sense impres-
sion exception to the hearsay rule.
  Danford next argues that the district court abused its
discretion when it answered questions posed by the jury
during deliberations. The jury sent two questions to the
judge seeking clarification of the initial instructions.
Danford contends that the district court’s answers were
inconsistent, and thus served to confuse the jury. He
objected to the district court’s answer to the jury’s first
question; the second answer, however, Danford approved.
  The Court reviews a district court’s response to jury
questions for abuse of discretion. United States v. Young,
316 F.3d 649, 661 (7th Cir. 2000). His “right to object to jury
instructions on appeal is waived if the record illustrates
that the defendant approved of the instructions at issue.”
United States v. Griffin, 84 F.3d 912, 924 (7th Cir. 1996).
Therefore, Danford waived his right to appeal the second
answer.
  When reviewing supplemental instructions given by a
district court to the jury, this Court examines three factors:
(1) whether the instructions as a whole fairly and ade-
quately treat the issues; (2) whether the supplemental
instruction is a correct statement of the law; and (3)
whether the district court answered the jury’s questions
specifically. United States v. Sims, 329 F.3d 937, 943 (7th
Cir. 2003); Young, 316 F.3d at 662.
  The jury specifically sought clarification of whether
Danford’s scheme had to begin on the date charged in the
indictment. In response, the judge issued two instructions
telling the jury that the scheme did not have to begin on the
date alleged in the indictment. But, the judge explained,
before convicting Danford on any specific count, the jury
must find that a scheme was in existence at the time of the
mailing at issue. This is a correct statement of law. Further,
since the jury did not read the answers in a vacuum, when
8                                      Nos. 04-4232, 05-1539

the supplemental instructions are read together with the
original instructions, it is clear that the court did not abuse
its discretion in its answers to the jury.
  Danford next argues that his case should be remanded for
resentencing in light of United States v. Booker, 125 S. Ct.
738 (2005). He contends that his sentence was unreason-
able. Under Booker, this Court reviews a defendant’s
sentence for reasonableness. Id. at 765-66.
  The district court, however, understood the potential
problems posed by the Supreme Court’s pending Booker
decision. The district judge proceeded by viewing the
Sentencing Guidelines as suggestive rather than manda-
tory. After determining proper restitution and finding of
loss, the district judge sentenced Danford to a 60-month
sentence. If the court had followed the Guidelines, it would
have sentenced Danford to the statutory range of 70 to 87
months. Danford does not argue that there was any basis
for a downward departure.
  Booker did not precisely define “reasonableness,” but it
did state that the factors listed in 18 U.S.C. § 3553(a)
should guide appellate courts in ascertaining if a sentence
is unreasonable. As this Court has held, “Judges need not
rehearse on the record all of the considerations that 18
U.S.C. § 3553(a) lists; it is enough to calculate the range
accurately and explain why (if the sentence lies outside it)
this defendant deserves more or less.” United States v.
George, 403 F.3d 470, 472-73 (7th Cir. 2005).
  Here, the district judge found several important factors
that led to the sentence she imposed: the substantial loss to
the insurance company, Danford’s attempts to obstruct
justice (which included at least one threat to a witness and
false trial testimony), Danford’s staging of the robbery, his
highly sophisticated and carefully planned course of conduct
in planning the scheme, and his prior criminal conduct.
Because of the judge’s thorough record at sentencing, we
Nos. 04-4232, 05-1539                                      9

feel a Paladino remand is unnecessary. United States v.
Paladino, 401 F.3d 471, 482-83 (7th Cir. 2005). When these
factors are combined with the district judge’s use of the
guidelines as suggestive rather than mandatory, we find
that Danford’s sentence is reasonable.
  Lastly, Danford challenges the district court’s calculation
of restitution. According to Danford, the restitution amount
should have been between $120,000 and $200,000 based on
the jury’s post-verdict finding. Instead, the district court
awarded restitution equal to the insurer’s loss, which was
$1,235,464. This Court reviews the district court’s calcula-
tion of restitution for abuse of discretion. United States v.
Swanson, 394 F.3d 520, 526 (7th Cir. 2005).
  Danford’s argument is wrong. As this Court has noted,
restitution “is not a criminal punishment but a civil remedy
administered for convenience by courts that have entered
criminal convictions.” United States v. George, 403 F.3d 470,
473 (7th Cir. 2005). Restitution is determined by the judge
using the lower preponderance of the evidence standard.
See Swanson, 394 F.3d at 526; 18 U.S.C. § 3664(e). As a
result, the jury’s post-verdict findings were not binding on
the district court. A civil remedy included with a criminal
judgment does not make it a “penalty of a crime” that must
be established by a jury beyond a reasonable doubt. United
States v. Behrman, 235 F.3d 1049, 1054 (7th Cir. 2000).
  In this case, Danford was convicted of mail fraud based on
a scheme to defraud. The district court, using a preponder-
ance of the evidence standard, found that Danford staged
the robbery as part of an elaborate scheme to defraud his
insurance company. The district court determined that
Danford ultimately fleeced the insurance company of
$1,235,464. Given these findings, we do not believe the
judge abused her discretion in setting the restitution
amount.
10                                Nos. 04-4232, 05-1539

                    Conclusion
  For the reasons stated above, we AFFIRM Danford’s
conviction and sentence.

A true Copy:
      Teste:

                     ________________________________
                     Clerk of the United States Court of
                       Appeals for the Seventh Circuit

                USCA-02-C-0072—1-18-06