Court Opinion

ID: 161234
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:03:05+00
Date Added: 2024-06-11T17:16:10.366352
License: Public Domain

F I L E D
                                                                    United States Court of Appeals
                                                                            Tenth Circuit

                                                                           JUN 20 2001
                      UNITED STATES COURT OF APPEALS
                                                                      PATRICK FISHER
                                                                                Clerk
                                   TENTH CIRCUIT

 UNITED STATES OF AMERICA,

          Plaintiff - Appellee,
                                                         No. 00-6082
 v.
                                                  (D.C. No. 98-CR-164-R)
                                                (Western District of Oklahoma)
 JESSE JOSEPH MAYNARD,

          Defendant - Appellant.

                             ORDER AND JUDGMENT *

Before LUCERO and McKAY, Circuit Judges, and BROWN, ** District Judge.

      This matter involves appellant Jesse Joseph Maynard’s appeal from his

convictions for conspiracy, 18 U.S.C. § 371, concealment of the assets of a

bankruptcy estate, 18 U.S.C. §§ 152 & 2, and embezzlement against a bankruptcy

estate, 18 U.S.C. §§ 153 & 2. As in the related case, United States v. Love, No.

00-6083 (10th Cir. 2001), the parties are familiar with the facts, or at least with

      *
        This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This Court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      **
          The Honorable Wesley E. Brown, United States District Judge for the
District of Kansas, sitting by designation.
their respective versions, thus we need not set them forth here. Exercising

jurisdiction pursuant to 28 U.S.C. § 1291, we affirm.

                                         I

      In this appeal, Maynard contends that the evidence was insufficient to

support his convictions and that the district court erred in denying his motion for

judgment of acquittal. 1 Maynard makes two arguments in support of this

contention: that the government’s sole proof of a conspiracy, Jim Ray’s

testimony, was deficient; and that there could be no concealment of assets

because the reinsurance refund was listed on the initial report filed with the

bankruptcy court, as were the disbursements to Impact III (“Impact”). 2

      1
         The jury found Maynard guilty, and the district court entered judgment,
on counts 1, 3, 4, 5, 6, 7, 9 and 10 of the indictment. Those counts were as
follows: count 1, conspiracy to commit bankruptcy fraud in violation of 18 U.S.C.
§ 371; count 3, aiding and abetting concealment of $270,000 of the bankruptcy
estate in violation of 18 U.S.C. §§ 152 & 2; count 4, aiding and abetting
concealment of $38,000 of the bankruptcy estate in violation of 18 U.S.C. §§ 152
& 2; counts 5 ($20,000), 6 ($9519.13), 7 ($32,275.31), 9 ($10,000), and 10
($5000), aiding and abetting embezzlement against estate in violation of 18
U.S.C. §§ 153 & 2.
      2
         In addition, Maynard appears to argue that because he did not have
substantial influence over the operation of First Assurance & Casualty Company
(“FACC”) and because he was just a “figurehead” for Dick Jones, he can not be
liable for the resulting demise of the corporation or for any fraudulent transfers.
As an initial matter, we consider Maynard’s own statement that he “ultimately
made the decision to place [FACC] in Chapter 11 bankruptcy” an admission of his
true authority in the corporation (Appellant’s Br. at 4) and, most importantly, of
his substantial role in FACC’s bankruptcy. Moreover, even without that
admission, our review of the record shows copious evidence demonstrating
Maynard’s important role in FACC’s operations.

                                         -2-
      We review de novo the district court’s ruling on a motion for judgment of

acquittal and the sufficiency of the evidence to support such judgment. United

States v. McKissick, 204 F.3d 1282, 1289 (10th Cir. 2000). We inquire “‘only

whether taking the evidence—both direct and circumstantial, together with the

reasonable inferences to be drawn therefrom—in the light most favorable to the

government, a reasonable jury could find the defendant guilty beyond a

reasonable doubt.’” Id. (quoting United States v. Hanzlicek, 187 F.3d 1228, 1239

(10th Cir. 1999)). The scope of our review is limited; we may “‘neither weigh

conflicting evidence nor consider the credibility of witnesses.’” Id. (quoting

United States v. Pappert, 112 F.3d 1073, 1077 (10th Cir.1997)). “Defendants

challenging a conviction on sufficiency of the evidence grounds face a difficult

standard of review as we reverse only if no rational trier of fact could have found

the essential elements of the crime beyond a reasonable doubt.” United States v.

Spring, 80 F.3d 1450, 1459 (10th Cir. 1996) (citations and quotations omitted).

We will not, however, uphold a conviction “obtained by nothing more than ‘piling

inference upon inference’ or where the evidence raises no more ‘than a mere

suspicion of guilt.’” United States v. Rahseparian, 231 F.3d 1257, 1262 (10th

Cir. 2000) (citations omitted).

      We reject Maynard’s argument that Ray’s testimony merely supported the

existence of a discussion and was insufficient to prove the existence of an

                                        -3-
agreement for purposes of the conspiracy charge. According to Ray’s testimony,

Maynard stated at a meeting that he “wanted to move the money offshore. He

didn’t want to bring it back, because this is what they could use to start — or

continue their new operations [such as ICS].” (IV Trial Tr. at 571 (emphasis

added).) Ray also testified that Dick Jones and Maynard stated that it was time

for FACC to file bankruptcy and that the “Sphere-Drake refund . . . was going to

not be included in that bankruptcy because it was offshore.” (Id. at 570–71

(emphasis added).) According to Ray, each of the meeting participants, except

himself, expressed that he was on the same page regarding the refund. As for his

own role at the meeting, Ray testified that his stated opinion was that the plan to

keep the refund out of the bankruptcy estate “sounds like bankruptcy fraud.” (Id.

at 572.)

      Importantly, Maynard’s actions following the meeting were consistent with

Ray’s account of Maynard’s expressed intentions and with the meeting

participants’ agreement regarding the refund. Maynard had the refund sent to his

personal address and went to Panama to form “Asset Protection Services

Corporation” for the sole purpose of opening a foreign bank account under the

corporation’s name to hold the $270,000 refund. Although Maynard argues that

he brought that “money back into the United States and deposited [it] into an

account for the benefit of [FACC]” and listed the refund on the bankruptcy filings

                                         -4-
(Appellant’s Br. at 16–17), the evidence at trial was sufficient to support a

different story—namely that the refund was never transferred into a FACC

account, but went directly to an Impact account. The Impact account, in turn, was

not disclosed until FACC and Impact were declared alter egos. Moreover, the full

$270,000 was never transferred from Panama; by the time the money was

allegedly transferred back into the United States it was only $234,960. Based on

the evidence, the jury also could have found that when the bankruptcy trustee,

Janice Loyd, finally obtained the funds from the Impact account for the benefit of

the bankruptcy estate, the funds were almost entirely depleted. Maynard himself

received more than $29,000 in payments from that account. Under these

circumstances, we simply cannot conclude that the evidence was insufficient to

prove the agreement element of conspiracy beyond a reasonable doubt (count 1)

or to demonstrate concealment of the refund from the bankruptcy estate (count 3).

      We also reject Maynard’s assertion that there was no concealment because

each of the transfers forming the basis for the counts in the indictment was

eventually disclosed to the bankruptcy court. As we discuss more fully in the

related appeal, Love, No. 00-6083, mere disclosure of the fact of the

disbursements forming the basis for counts 3–10 does not mean that Maynard and

the other FACC principals did not conceal the actual assets of the bankruptcy

estate from the court and from FACC’s creditors. In this case, the disclosures

                                         -5-
themselves misrepresented the original stated purposes of the transfers (e.g., by

deeming transfers of funds as “reimbursements” or “reimbursements” as

“consulting fees”). Additionally, the Impact accounts to which the FACC funds

were transferred were not included by Maynard in the original filings with the

bankruptcy court as assets of the bankruptcy estate. As such, a reasonable jury

could have concluded beyond a reasonable doubt that transferring money from

FACC accounts to Impact accounts worked to conceal or embezzle the assets of

the bankruptcy estate from the court and the creditors in violation of 18 U.S.C.

§§ 152 and 153. 3

                                         II

      Maynard argues that the “bankruptcy conspiracy charged in the indictment

was at variance with the insurance fraud conspiracy presented at trial.”

(Appellant’s Br. at 17.) We review this claim de novo. United States v.

Williamson, 53 F.3d 1500, 1512 (10th Cir. 1995). “[W]here a single conspiracy

is charged in the indictment, and the government proves only multiple

      3
         We find the following combination of facts particularly telling with
regard to the sufficiency of the evidence supporting Maynard’s convictions for
concealment and embezzlement: (1) Maynard’s admission that he brought the
reinsurance refund “back into the United States and deposited the money into an
account for the benefit of [FACC]” (Appellant’s Br. at 16–17); (2) his testimony
that the reinsurance refund was wired into an Impact, not FACC, account; and (3)
his failure, as debtor-in-possession, to disclose the funds in the Impact accounts
as assets of the bankruptcy estate.

                                         -6-
conspiracies, a defendant who suffers substantial prejudice must have his

conviction reversed.” United States v. Edwards, 69 F.3d 419, 432 (10th Cir.

1995) (citing Kotteakos v. United States, 328 U.S. 750, 773–74 (1946)).

      We have reviewed the record and the indictment 4 and conclude that there

was no fatal variance. “[T]he prohibition against variances is designed to insure

notice of the charges” and derives from the Sixth Amendment right that an

accused “be informed of the nature and cause of the accusation.” Williamson, 53

F.3d at 1513, 1512 n.4. “A variance is fatal only when the defendant is

prejudiced in his defense because he cannot anticipate from the indictment what

evidence will be presented against him or is exposed to the risk of double

jeopardy.” Id. (quotation omitted). Maynard’s indictment made clear that the

government intended to offer, as proof of the conspiracy to commit bankruptcy

fraud, evidence of the management or mismanagement of FACC. Thus, Maynard

was not prejudiced in his ability to defend himself because he had notice of the

evidence the government intended to admit.

      Additionally, we reject Maynard’s argument that there was prejudicial

spillover created by the admission of evidence regarding insurance fraud on the

part of the other actors. As best we can assess, the “insurance fraud” evidence

      4
         Despite his variance claim, appellant did not provide us with a copy of
the indictment. Under 10th Cir. R. 10.3(B) we may therefore decline to consider
the issue. To assure ourselves, we nevertheless consider the claim.

                                        -7-
Maynard claims was improperly admitted actually was evidence regarding the

solvency of FACC prior to its filing for bankruptcy. This evidence did not tend to

establish a separate insurance fraud conspiracy on the part of other actors, but

directly related to Maynard because, as president, he held a substantial position of

authority in the bankrupt corporation. We agree with the district court’s

conclusion that evidence of FACC’s financial condition and the timing of its

insolvency were “highly relevant” for assessing intent where FACC was making

large transfers of money prior to the filing of bankruptcy. (I Trial Tr. at 17.)

                                         III

      Maynard’s final argument is that the district court improperly enhanced his

sentence under U.S.S.G. § 2F1.1(b)(1) (1993) for a loss of $7 million. We review

de novo the district court’s interpretation of the Sentencing Guidelines. United

States v. Burridge, 191 F.3d 1297, 1301 (10th Cir. 1999). We review for clear

error the factual findings supporting a district court’s offense level calculation

and will reverse “only if we have a definite and firm conviction that a mistake has

been made.” United States v. Messner, 107 F.3d 1448, 1456 (10th Cir. 1997)

(quotation omitted).

      Sentencing Guideline § 2F1.1 (1993) provides for an increase in the base

offense level dependent on the amount of loss in a crime of fraud. Application

note 7 states that “loss is the value of the money [or] property . . . unlawfully

                                         -8-
taken” and that “if an intended loss that the defendant was attempting to inflict

can be determined, this figure will be used if it is greater than the actual loss.”

U.S.S.G. § 2F1.1, cmt. 7 (1993).

      The district court’s finding of loss was reasonable. Because the court’s

estimate was founded on the record and in economic reality, we reject Maynard’s

argument that the government failed to meet its burden of proving loss by a

preponderance of the evidence. As the application notes state, “loss need not be

determined with precision. The court need only make a reasonable estimate of the

loss, given the available information.” U.S.S.G. § 2F1.1, cmt. 8. Indeed,

appellant cites authority that supports the proposition that the government’s

burden in proving loss for purposes of § 2F1.1 is “not onerous, and a loss need

not be calculated with exactitude” but rather must be based in economic reality.

United States v. Santiago, 977 F.2d 517, 526 & n.9 (10th Cir. 1992). The district

court heard testimony that the amount concealed in bankruptcy, including the

amount associated with the bankruptcy conspiracy charge, was upwards of $7

million. The court also heard testimony that the intended loss was on the order of

$81 million. Against this background, and viewed in the context of the more than

$150 million in claims filed by creditors, we conclude that the district court’s loss

finding was economically realistic and not clearly erroneous.

                                          -9-
                              IV

For the foregoing reasons, we AFFIRM.

                            ENTERED FOR THE COURT

                            Carlos F. Lucero
                            Circuit Judge

                              -10-