Court Opinion

ID: 1025764
Source: CourtListenerOpinion
Date Created: 2013-07-05 06:55:19.291326+00
Date Added: 2024-06-11T12:28:16.112725
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 07-4544

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

           v.

KEVIN L. GEDDINGS,

                Defendant - Appellant.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh.  James C. Dever III,
District Judge. (5:06-cr-00136-D)

Before NIEMEYER and SHEDD, Circuit Judges, and Patrick Michael
DUFFY, United States District Judge for the District of South
Carolina, sitting by designation.

Argued:   January 31, 2008                  Decided:   May 19, 2008

Affirmed by unpublished opinion. Judge Shedd wrote the opinion, in
which Judge Niemeyer and Judge Duffy joined.

ARGUED: Jonathan I. Edelstein, New York, New York, for Appellant.
John Stuart Bruce, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh,
North Carolina, for Appellee.      ON BRIEF: Abraham Abramovsky,
FORDHAM UNIVERSITY, School of Law, New York, New York, for
Appellant. George E. B. Holding, United States Attorney, Anne M.
Hayes, Assistant United States Attorney, Dennis M. Duffy, Assistant
United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY,
Raleigh, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.

                                2
SHEDD, Circuit Judge:

     A federal jury convicted Kevin Geddings of five counts of mail

fraud in violation of 18 U.S.C. §§ 1341 and 1346 based on his

failure to disclose a conflict of interest as a North Carolina

lottery commissioner. The district court sentenced Geddings to 48-

months’    imprisonment,    and    he    now    appeals    his   conviction    and

sentence.    We affirm.

                                         I.

     Viewing the evidence in the light most favorable to the

government, see Glasser v. United States, 315 U.S. 60, 80 (1942),

the following are the facts.            Geddings has long been involved in

the promotion of lotteries.         In 1998, South Carolina gubernatorial

candidate Jim Hodges hired Geddings’ public relations/political

consultant     firm,    Geddings     and      Phillips    Communications,      LLC

(“Geddings/Phillips”) for his campaign.                 Whether South Carolina

should adopt a lottery became a focus of that campaign, and

Geddings created advertisements highlighting incumbent Governor

David Beasley’s opposition to the lottery.                After Hodges defeated

Beasley,     Geddings   served     as    his    chief     of   staff   and   later

participated in his reelection campaign.

     During South Carolina’s lottery debate, Geddings developed a

business     relationship    with       lottery    vendor      Scientific    Games

                                         3
International,     Inc.    (“Scientific    Games”).1        Geddings    received

$163,545    from    Scientific     Games     over    the    course     of   their

relationship,      which   extended   from    2000    to    2005.      In   2000,

Scientific Games hired Geddings to create advertisements supporting

a referendum to amend the South Carolina Constitution and allow the

creation of a lottery.           On October 5, 2001, Scientific Games

contributed $35,000 to South Carolinians for an Effective Lottery,

LLC (“SC Effective Lottery”), a for-profit organization formed by

Geddings.       On October 22, 2001, Geddings emailed a negative

article regarding GTech’s operation of the Texas lottery to the

chairman of the South Carolina Lottery Commission and noted:

“[j]ust wanted you to be ready for an onslaught of bad press if

Gtech [sic] wins SC contract.”        J.A. 3996.       Three days later, SC

Effective Lottery distributed $29,500 to Geddings/Phillips.                    On

October 30, 2001, Scientific Games received the on-line portion of

the South Carolina lottery contract.

     Geddings moved to North Carolina in 2003, and he continued his

relationship with Scientific Games.          In 2004 and 2005, Scientific

Games retained Geddings to promote a lottery in North Carolina.

Geddings    prepared   elected    officials    for    debates    and    produced

advertisements in support of the lottery.                  In July 2005, Alan

     1
      According to the record, Scientific Games holds the market-
leading position in scratch or instant lottery tickets and is
second in online lottery games.    Its primary competitor, GTECH
Corporation (“GTech”), leads in online lottery games.

                                      4
Middleton,     Scientific   Games’   vice     president   for    government

relations, notified his accounting department that Scientific Games

would likely pay Geddings $5,000 per month for the next 6-18

months.2    North Carolina adopted a lottery in August 2005.

         In September 2005, Geddings sought appointment to the nine-

member North Carolina Lottery Commission (“Lottery Commission”).

He emailed Scientific Games’ lobbyist Meredith Norris and told her

to keep him in mind if she wanted “a foot soldier to serve [on the

Lottery Commission] who will be loyal to the Speaker.”           J.A. 3224.

Norris had formerly worked for James B. Black, Speaker of the North

Carolina House of Representatives.         On September 23, 2005, Speaker

Black appointed Geddings to the Lottery Commission.

     The executive order establishing the North Carolina Board of

Ethics     (“Ethics   Board”)   requires    public   officials   to   “fully

disclose any potential conflict of interest or appearance of

conflict.” N.C. Exec. Order No. 76 (2005). After his appointment,

Geddings submitted a “Long Form” Statement of Economic Interest

(“Ethics Form”) to the Ethics Board.                 Geddings provided no

response to Question 16, which is a broad catch-all question

requiring the disclosure of conflicts of interest.          Specifically,

Question 16 states:

     Having read the Order in general and the ‘Rules of
     Conduct for Public Officials’ in particular, provide any

     2
      Middleton is a close friend of Geddings who previously worked
for Scientific Games in South Carolina as a consultant.

                                     5
       other information which a reasonable person would
       conclude is necessary or helpful either to carry out the
       purposes of the Order or to fully disclose any potential
       conflict of interest or appearance of conflict. Identify
       any conflicts or potential conflicts you may have that
       are not fully or adequately covered elsewhere in this
       form. Include an explanation of how you would propose to
       resolve any conflicts or potential conflicts.

J.A.    3218.     After    the   Ethics     Board   requested   additional

information,    Geddings    supplied      the   following   answer,   which

indicated his friendship with Middleton, but omitted his financial

relationship with Scientific Games:

       I have a longstanding friendship and previous business
       relationship with Mr. Alan Middleton, a vice president
       with Scientific Games Corp. a potential N.C. Education
       Lottery vendor. Mr. Middleton and I have been friends
       since 1987.    Between 2000 and 2001 Mr. Middleton’s
       company, Carolina Public Affairs sublet office space from
       me. In 2002, he joined Scientific Games. I currently
       have no business relationship with Mr. Middleton,
       although he remains a friend.

       I should note as well, that as a former chief of staff to
       the Governor of South Carolina, I helped with that
       state’s    lottery   start-up    and   enjoyed    several
       opportunities to meet privately with GTech staff and
       representatives, including Mr. Don Sweitzer, Mr. Ted
       Riley and Mr. Chris Shaban. I have learned much from
       listening to the ‘lessons learned’ by executives from
       both major lottery system companies.

       In 2000, my company, Geddings & Phillips Communications,
       LLC also conducted focus groups of potential lottery
       customers in South Carolina for a lottery vendor company
       known then as IGT-Anchor Gaming. IGT-Anchor Gaming was
       later purchased by Scientific Games.

       My company, Geddings & Phillips Communications, along
       with my two radio stations WXNC-AM in Monroe, NC and
       WKMT-AM in Kings Mountain, NC have no current business
       relationships with any lottery vendor. Although I am in
       the process of selling my two radio stations, I pledge to

                                  6
     not accept any lottery advertising contracts for these
     stations or any others I may own during my term on the
     Education Lottery Commission.

     In addition, to avoid even the “appearance” of unfair
     vendor consideration, I will not vote on any final vendor
     contract award that involves Scientific Games or GTech.

J.A. 3229.     Based on the revised Ethics Form, the Ethics Board

reported on October 12, 2005, to Speaker Black and to the Lottery

Commission    that   Geddings    did   not    have     an   actual   conflict   of

interest but had “the potential for a conflict of interest.” J.A.

3221-22.     Had Geddings disclosed his financial relationship with

Scientific Games, the Ethics Board would have concluded that he had

an actual conflict of interest.          J.A. 1178.

     After his appointment as a commissioner, Geddings continued a

relationship with Scientific Games.            He emailed his secretary on

September 26, 2005, and instructed her never to acknowledge by

phone that Scientific Games “is a client.”                  J.A. 3856 (emphasis

added).    On October 7, 2005, Scientific Games paid him $9,500.

Three days later, Geddings’ secretary forwarded him the invoice for

the month of October for submission to Scientific Games.

     Geddings kept in almost daily contact with Middleton.                      He

communicated with Middleton even after the Lottery Commission

adopted a policy proposed by Geddings that prohibited lottery

commissioners    from   meeting      individually      with   lottery    vendors.

Geddings   was   appointed      to    the    Lottery    Commission      personnel

committee on October 4, 2005.                On that same day, when such

                                        7
information was confidential, Geddings informed Middleton of the

membership of the personnel committee.       The composition of the

committee did not become publicly available until October 6, 2005.

     Although Geddings had recused himself from lottery vendor

selection, he circulated negative articles regarding GTech, as he

had done in South Carolina.3         He sent one article regarding

allegations of corruption against GTech in Pennsylvania to the

Chairman of the Lottery Commission, Dr. Charles Sanders, with a

note: “The press everywhere loves these stories.” J.A. 3896.     He

sent another article detailing allegations of corruption in GTech’s

operation of the Texas lottery to Chairman Sanders’ assistant, with

a note: “It’s worth reading just to see what ‘ugly’ issues can

emerge with lottery operations over time.”     J.A. 4201.

     The United States Attorney’s Office for the Eastern District

of North Carolina began an investigation related to the passage of

the North Carolina lottery and requested certain records from

Scientific Games around October 26, 2005.      In response to that

inquiry, Scientific Games collected records of all payments made by

Scientific Games to Geddings over the course of their relationship.

Ira Raphaelson, outside counsel to Scientific Games, asked Geddings

if he had informed the Lottery Commission of his receipt of these

payments.   Geddings stated that he had not disclosed receiving the

     3
      The Executive Director of the Ethics Board, Perry Newson,
stated to the Lottery Commission that such a recusal prohibited
indirect lobbying.

                                 8
payments and that if he had, he would not have become a lottery

commissioner.   Furthermore,   Geddings   told   Raphaelson   that   if

Scientific Games turned over records of the payments that he would

be “done” as a lottery commissioner. J.A. 1090. Raphaelson stated

that Scientific Games intended to provide records of the payments

to the United States Attorney’s Office.          Four days later on

November 1, 2001, Geddings resigned from the Lottery Commission.

     Geddings was indicted for using the mails and wires to execute

a scheme to defraud the citizens of North Carolina of his honest

services in violation of §§ 1341 and 1346.   The indictment charges

that Geddings concealed his conflict of interest with Scientific

Games and aided that company’s efforts to obtain a contract from

North Carolina to operate the state’s lottery.    The jury convicted

Geddings of five counts of mail fraud,4 based on the following five

mailings: (1) a letter, which the Governor of North Carolina mailed

to appoint Geddings to the Lottery Commission; (2) Geddings’ Ethics

Form, which he sent to the Ethics Board; (3) a copy of the Ethics

Board’s finding that Geddings had no actual conflict of interest,

which the Ethics Board mailed to Chairman Sanders; (4) a copy of

the Ethics Board’s finding that Geddings had no actual conflict of

interest, which the Ethics Board mailed to Geddings; and (5)

Geddings’ oath of office, which he sent to the Governor of North

Carolina.

     4
      The jury acquitted Geddings of wire fraud.

                                9
      At sentencing, the district court used U.S.S.G. § 2C1.1 to

determine Geddings’ base offense level of 14.         Geddings received a

four-level enhancement for being a high-level public official and

a two-level enhancement for obstruction of justice, resulting in a

total offense level of 20.         See U.S.S.G. § 3C1.1; U.S.S.G. §

2C1.1(b)(3).     Because Geddings’ criminal history placed him in

Category I, the advisory Sentencing Guideline range was 33-41

months.   After considering the 18 U.S.C. § 3553(a) factors, the

district court applied a seven-month upward variance, for a total

sentence of 48 months.

                                   II.

      Geddings   first    argues    that   the   government     presented

insufficient evidence to support his conviction for mail fraud. In

reviewing such a claim, “[t]he verdict of a jury must be sustained

if there is substantial evidence, taking the view most favorable to

the   Government,   to   support   it.”    Glasser, 315 U.S.   at   80.

Substantial evidence is “evidence which a reasonable finder of fact

could accept as adequate and sufficient to support a conclusion of

a defendant's guilt beyond a reasonable doubt.”         United States v.

Newsome, 322 F.3d 328, 333 (4th Cir. 2003) (quotation omitted).

      The federal mail fraud statute prohibits using the mails5 for

the purpose of executing “any scheme or artifice to defraud.” §

      5
       Geddings does not contest the mailings in this case.

                                    10
1341. Congress defined “scheme or artifice to defraud” to include

“a scheme or artifice to deprive another of the intangible right of

honest services.”   § 1346.   Here, Geddings executed such a scheme

by concealing his conflict of interest with Scientific Games and

acting for its benefit as a lottery commissioner.6

     Geddings’ conflict of interest resulted from a substantial

financial relationship with Scientific Games, which he concealed

when submitting his Ethics Form.   Scientific Games paid Geddings a

total of $163,545, including $24,500 the year he became a lottery

commissioner, including $9,500 after he was appointed to the

Lottery Commission. As a lottery commissioner, Geddings instructed

his secretary to never acknowledge that Scientific Games “is a

client.” J.A. 3856 (emphasis added).   Regarding the concealment of

his conflict of interest, Geddings stated to Raphaelson that he

“did not disclose [his] work for Scientific Games” on his Ethics

Form because if he had made such a disclosure he “wouldn’t have

gotten the position [on the Lottery Commission].”    J.A. 1090.

     6
      Geddings argues that the government must demonstrate that he
received personal gain to sustain his conviction under §§ 1341 and
1346.   Neither the statute nor our case law requires that a
defendant receive personal gain. See generally United States v.
Bryan, 58 F.3d 933 (4th Cir. 1995) (upholding a conviction with no
evidence of personal gain) abrogated in part on other grounds by
United States v. O’Hagan, 521 U.S. 642, 650 (1997). To the extent
Geddings bases his argument on the panel opinion in United States
v. Mandel, 591 F.2d 1347 (4th Cir. 1979), on rehearing, 602 F.2d
653 (4th Cir. 1979)(en banc), that panel opinion has no legal
effect. Under Fourth Circuit rules, “[g]ranting of rehearing en
banc vacates the previous panel judgment and opinion.” 4th Cir. R.
35(c).

                                 11
     After becoming a lottery commissioner, Geddings took actions

benefiting Scientific Games. Before the Lottery Commission awarded

North Carolina’s lottery vendor contract, Geddings distributed to

Chairman Sanders articles critical of Scientific Games’ primary

competitor,    GTech.7     He     kept    in   almost   daily   contact   with

Middleton, and continued to communicate with him even after the

Lottery   Commission     adopted   a     policy   prohibiting   members   from

individually   meeting     with    lottery     vendors.    Furthermore,     he

provided confidential information to Middleton identifying the

membership of the Lottery Commission’s personnel committee.

     In short, a reasonable jury could find beyond a reasonable

doubt that Geddings deprived the citizens of North Carolina of his

honest services in violation of §§ 1341 and 1346.8

     7
      Geddings argues that the articles were not negative, but
Chairman Sanders testified that he interpreted them to be negative.
     8
      Geddings    contends   that    §§   1341    and   1346    are
unconstitutionally vague as applied to him.      We find that the
language of the statute provides notice of the wrongfulness of
Geddings’ conduct and adequately prevents arbitrary enforcement.
United States v. Klecker, 348 F.3d 69, 71 (4th Cir. 2003).
(explaining that the constitutional vagueness inquiry examines both
public notice and arbitrary enforcement).
     Geddings also challenges the district court’s admission of
testimony for the government, and the district court’s denial of
Geddings’ request for surrebuttal. We review these rulings for
abuse of discretion and find no error.       See United States v.
Achiekwelu, 112 F.3d 747, 753 (4th Cir. 1997).

                                         12
                                        III.

     Geddings next challenges the reasonableness of his 48-month

sentence.   We review a district court’s imposition of a sentence

for abuse of discretion.         United States v. Pauley, 511 F.3d 468,

473 (4th Cir. 2007)(citing Gall v. United States, 128 S. Ct. 586,

596 (2007)).

     We first review for procedural errors, such as “failing to

calculate   (or     improperly    calculating)     the    Guidelines    range,

treating the Guidelines as mandatory, failing to consider the §

3553(a) factors, selecting a sentence based on clearly erroneous

facts, or failing to adequately explain the chosen sentence --

including an explanation for any deviation from the Guidelines

range.”   Gall, 128 S. Ct. at 597.         Next, we consider the substantive

reasonableness of the sentence.           Id.   “Substantive reasonableness

review    entails    taking      into    account   the     totality    of   the

circumstances, including the extent of any variance from the

Guidelines range.”     Pauley, 511 F.3d at 473.          While we may presume

a sentence within the Guidelines range to be reasonable, we may not

presume a sentence outside the range to be unreasonable.                    Id.

Moreover, we must give due deference to the district court's

decision that the § 3553(a) factors justify imposing a sentence

outside the Guidelines range and to its determination regarding the

extent of any variance.          Id. at 473-74.      Even if we would have

reached a different sentencing result on our own, this fact alone

                                         13
is not sufficient to justify reversal of the district court.                   Id.

at 474.

     The    district    court   used    U.S.S.G.    §   2C1.1      to   determine

Geddings’ base offense level of 14.              Geddings argues that the

district court should have applied § 2C1.3 because that section

applies to conflict of interest offenses.                   We find no error

because the Guidelines’ statutory index lists § 2C1.1 as the

section corresponding to a violation of § 1341.

     The    district    court    notified    the    parties     that      it    was

considering an upward variance from the advisory 33-41 month

Guideline range.       In its 30-page order imposing a seven-month

upward    variance,    the   district    court   analyzed    all    the   §    3553

factors, including the fact that Geddings’ wife has type I diabetes

and that his son suffers from autism.            Based on the record, the

district court determined that two factors in particular supported

an upward variance: (1) the need for deterrence, and (2) the harm

caused to the lottery.       In light of all the facts of this case, we

conclude that the district court did not abuse its discretion in

applying a seven-month upward variance and sentencing Geddings to

48-months’ imprisonment.

                                        14
                               IV.

     We affirm Geddings’ conviction for five counts of mail fraud

and his 48-month sentence.

                                                         AFFIRMED

                               15