Court Opinion

ID: 76389
Source: CourtListenerOpinion
Date Created: 2010-04-26 23:58:21+00
Date Added: 2024-06-11T12:11:49.110874
License: Public Domain

[PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR TH E ELEV ENTH C IRCUIT
                                                                             FILED
                              ________________________ U.S. COURT OF APPEALS
                                                                      ELEVENTH CIRCUIT
                                                                        November 10, 2003
                                     No. 01-14746
                                                                        THOMAS K. KAHN
                               ________________________                     CLERK

                          D. C. Docket No. 99-00078-CR-T-25F

UNI TED STA TES OF A MER ICA,

                                                                   Plaintiff- Appe llee,

                                            versus

HAY WO OD E UDO N HA LL,
a.k.a. Do n Hall,

                                                                       Defen dant-A ppellant.

                               ________________________

                      Appeal from the United States District Court
                          for the Middle District of Florida
                           _________________________
                                (November 10, 2003)

Before BLACK and FAY, Circuit Judges, and HUCK *, District Judge.

FAY, Circuit Judge:

       In Ma rch 199 9, Defe ndant, H aywoo d Eudon Ha ll (“Hall”), w as charg ed in

*
 Honorable Paul C. Huck, United States District Judge for the Southern District of Florida,
sitting by designation.
17 counts of a 20 cou nt indictment along with six co-defend ants.1 The government

alleged that Hall and the co-defendants, as principals in Greater Ministries

International Church (GMIC), managed and promoted a fraudulent investment

scheme. Hall was subseq uently convicted of five counts: mail fraud consp iracy,

money laundering conspiracy, and three counts of mail fraud. In this appeal he

raises various challenges to both his convictions and sentencing. Hall first argues

that the dis trict court e rred in n ot requir ing the jury to find proof o f an ove rt act to

support his conviction for conspiracy to commit money laundering under 18

U.S.C. § 1956(h). Since we find that proof of an overt act is not an essential

element under § 1956(h), we affirm Hall’s money laundering conspiracy

conviction. Hall also claims that the district court erroneously applied a two-level

increase to his sentence pursuant to U.S.S .G. § 3B1.3 for abu se of position of trust

due to his status as a pastor. We conclude that Hall did not occupy a position of

trust under the Sentencing Guidelines, and therefore reverse this sentence

1
 Two co-defendants, James R. Chambers and Andrew J. Krishak, accepted plea agreements for
their role in the crime. The other four co-defendants, Gerald Payne, Betty Payne, David
Whitfield, and Patrick Talbert, were found guilty on all counts charged against them (except that
Count Five was dismissed with respect to all defendants on a motion for judgment of acquittal).
These four defendants appeal their convictions and sentences on various grounds, and some have
also adopted issues raised by co-defendants; however, we find no merit to any of the issues not
discussed in this opinion and they do not warrant discussion.

                                                2
enhanc ement. 2

                                               I.

       In early 1996, Hall joined GMIC as a director and pastor of the church, and

also became head of its World Missions program. When Hall came to GMIC, he

became involved in the “gifting” program that had been started by one of the co-

defendants, Gerald Payne. Though the name of the program changed from the

“Double Your Money Program,” to the “Double Your Blessings Program,” and

finally to th e “Faith P romises Progr am,” the g ifting pro gram re mained essentially

the same throug hout its life . Unde r the pro gram, in vestors w ould “gif t” mone y to

GMIC in increments of $250 and within 17 months the “giftors” were to get back

double their money in the form of “giftbacks.”

       Hall and some of the other defendants held “roadshow” meetings across the

country to promote the program. Despite using religious rhetoric to encourage

participation in the program, the main focus of the meetings was on how much

money could be m ade. Although there w ere disclaimers on the “gifting forms”

stating that there were no guarantees of a return, the defendants expressly or

impliedly promised giftbacks. The defendants told the giftors that profits were

2
 We are aware that Hall argues the government failed to present sufficient evidence to support
any of his convictions and that he has also adopted issues raised by co-defendants; however, we
find no merit in any of these issues and they do not warrant discussion.

                                               3
generated through investments in mining for precious metals and gems, in offshore

comm odities an d drilling , and in o verseas b anks tha t paid hig h interest r ates.

Aside from being led to b elieve that they would get back doub le their money,

potential in vestors w ere also to ld that som e of the p rofits gen erated w ould go to

feed the homeless, rehabilitate drug addicts, and suppo rt missionaries.

       However, GMIC never had any of the assets the defendants claimed to be

investing in. There is no record of GMIC or any one of the defendants having

gold, silver, or diamond mines in the United States from 1978 to the present. In

addition , the diam ond an d gold m ines GM IC wa s suppo sed to be operatin g in

Liberia never did fully get off the ground. Although a diamond mine there

produced tiny industrial grade diamonds of little value, the gold mines were never

even operational. GMIC, however, did buy gold and silver and then had a

compa ny mint g old and silver me dallions w ith the G MIC logo on them in o rder to

promote the gifting program to potential giftors and to appease already dissatisfied

investor s.

       Furthermore, the GMIC office supposedly located in the Cayman Islands

never existed. Similarly, the Greater International Bank of N auru was merely a

storefront inside GMIC’s Tampa building. No money was ever deposited into the

Bank of Nauru, as giftbacks were deposited purely on paper by the giftors through

                                              4
couriers. Giftors were encouraged to make their gifts through these courier

services, and this made it especially easy for already participating investors to “re-

gift” their giftbacks, or deposit them in this “offshore bank,” without ever seeing

the cash, thus allowing the defendants to perpetrate their fraud. If a giftor,

however, still wanted to withdraw money from his account, the bank

representative, a GMIC gospel singer, would have to go directly to Defendant

Payne to get money or gold.

      Notwithstanding the defendants’ promises of large amounts of money, many

investors received little or no return on their gifts. When giftors inquired about

their money, the defendants employed stalling techniques. Moreover, despite the

defendants’ claims that giftors’ investments were going to charity, only about one

percent of this money went to charitable purposes. In contrast, each director

received monthly “gas money,” which was a five percent commission of all money

gifted or re-gifted by an investor recruited by that director. All gas money was

paid in cash by Defendant Payne, and over the course of the fraud, Hall received

more than $539,00 0 of this money.

                                           II.

      Hall first claims that the district court erred in refusing to instruct the jury

that proof of an overt act was necessary to convict him under 18 U.S.C. § 1956(h)

                                            5
for conspiracy to commit money laundering. Although this Court reviews a refusal

to give a r equested jury instru ction for abuse o f discretio n, United States v.

Condon, 132 F.3d 653, 656 (11th Cir. 1998), if the refusal was based on an error of

law, then it is by defin ition an ab use of d iscretion. United States v. Govan, 293

F.3d 1248, 1250 (11th Cir. 2002). While neither this Court nor the Supreme Court

has determined whether commission of an overt act is an essential element of a

convictio n unde r § 195 6(h), oth er circuits a re split on the issue. See United States

v. God win, 272 F.3d 659, 669 n.9 (4th Cir. 2001) (noting that 18 U.S.C. § 1956(h)

does no t explicitly re quire pr oof of a n overt a ct); United States v. Tam, 240 F.3d

797, 80 2 (9th C ir. 2001 ) (findin g that § 1 956(h ) does n ot requir e the indic tment to

allege an o vert act). But see United States v. Wilson, 249 F.3d 366, 379 (5th Cir.

2001) (finding proof of an overt act is required for a conviction under § 1956(h));

United States v. Hildebrand, 152 F .3d 756 , 762 (8 th Cir. 19 98) (fin ding tha t §

1956(h) requires proof of an overt act for conviction).

       Those circuit courts that have found § 1956(h) to require proof of an overt

act have relied on case law interpreting the general conspiracy statute of 18 U.S.C.

§ 371. See Wilson, 249 F.3d at 379; Hildebrand, 152 F.3d at 762. Section 371

provides:

              If two or more persons conspire either to commit any
              offense against the United States, or to defraud the

                                              6
              United States, or any agency thereof in any manner or for
              any purpose, and one o r more of such person s do any act
              to effect the object of the conspiracy, each shall be
              fined under this title or imprisoned not more than five
              years, or both.

18 U.S .C. § 37 1 (emp hasis add ed). It is im portant to note that § 371 ex pressly

requires proof of an overt act in furtherance of the conspiracy to establish violation

of the statu te. How ever, the m oney lau ndering conspir acy statute, 1 8 U.S .C. §

1956(h), does not contain this express language:

               Any person who conspires to commit any offense defined
               in this section or section 1957 shall be subject to the
               same penalties as those prescribed for the offense the
               commission of w hich was the object of the conspiracy.

18 U.S.C. § 1956(h). In this respect, the language of § 1956(h) is not like § 371,

but instea d is nearly identical to the drug conspir acy statute, 2 1 U.S .C. § 84 6. See

Tam, 240 F .3d at 80 2; United States v. T hreadg ill, 172 F.3d 357, 366 n.5 (5th Cir.

1999). Section 846 p rovides:

               Any person who attempts or conspires to commit any
               offense defined in this subchapter shall be subject to the
               same penalties as those prescribed for the offense, the
               commission of which was the object of the attempt or
               conspiracy.

21 U.S .C. § 84 6. The Supreme Court, recognizing that the language of § 846 does

not call fo r an ove rt act, refus ed to infe r an ove rt act requ irement in to the statu te.

United States v. Shabani, 513 U.S. 10, 13 (1994). In reaching this conclusion, the

                                                7
Supre me Co urt com pared th e langua ge of 21 U.S.C . § 846 to that of 18 U.S.C . §

371:

              [W]e find it instructive that the general conspiracy
              statute, 18 U.S.C. § 371, contains an explicit requirement
              that a conspirator “do any act to effect the object of the
              conspiracy.” In light of this additional element in the
              general conspiracy statute, Congress’ silence in § 846
              speaks volumes.

Id. at 14. Sin ce the lang uage of the statute a t issue her e, 18 U .S.C. § 1 956(h ), is

nearly identical to 21 U.S.C. § 846, we are compelled to follow the Supreme

Court’s reasoning in Shabani. Given the absence of any language in § 1956(h)

requiring proof of an overt act, we find that an overt act is not an essential element

for conviction of conspiracy to commit money laundering. Accordingly, the jury

instructio ns appr oved b y the distric t court w ere indee d prop er.

                                              III.

       Hall next contends that the district court erroneously enhanced his sentence

under U .S.S.G . § 3B1 .3 for ab use of p osition o f trust du e to his statu s as a pasto r.

Pursuan t to the Sentenc ing Guidelines, this two-lev el increase is appro priate “[i]f

the defendant abused a position of public or private trust, ... in a manner that

significan tly facilitated th e comm ission or concealm ent of the offense .” U.S.S .G. §

3B1.3 . In orde r for the d istrict cour t to have a pplied th is increase , two elem ents

must have been established: (1) that the defendant occupied a position of public or

                                               8
private tru st; and (2 ) that the d efendan t abused that positio n in a sign ificant w ay to

facilitate the c ommis sion or c oncealm ent of the offense . United States v. Garrison,

133 F.3d 831, 837 (11th Cir. 1998). “We review the district court’s fact findings

for clear error, but its determination whether the facts justify an abuse-of-trust

enhancement we review de novo.” United States v. Ward, 222 F .3d 909 , 911 (1 1th

Cir. 2000) (quotation marks and citation omitted). Although we accept the district

court’s fin ding of fact with regard to Hall’s statu s as a pasto r, we co nclude th at this

fact alone is insufficient to support a determination that Hall occupied a position of

trust with respect to the victims.

       In finding that Hall’s status as a pastor put him in a position of trust, the

district court did not indicate whether it found Hall to have occupied a position of

public trust or of private trust. Nevertheless, it is of no consequence as to whether

we ana lyze this as a private o r public tr ust, for w e find the evidenc e in the rec ord to

be insufficient to support a finding that the relationships, if any, between Hall and

the victims were of the type to put Hall in any position of trust under the

Sentencing Guidelines. Within the context of fraud, this Court has found a

position of trust to exist in tw o instanc es: “(1) w here the d efendan t steals from his

employer, using his position in the company to facilitate the offense, and (2) where

a fiduciary or personal trust relationship exists with other entities, and the

                                              9
defendant takes advantage of the relationship to perpetrate or conceal the offense.”

Garrison, 133 F .3d at 83 7-38 (q uotation s omitted ). This ca se can on ly fall with in

the second situation. However, since the government does not allege the existence

of a fiduciary relationship, to conclude that Hall occupied a position of trust we

must find a “personal trust relationship” between H all and the victims.

       Hall’s status as a pastor does not necessarily create a personal trust

relationship between himself and the victims. 3 See Un ited States v. Mor ris, 286

F.3d 1 291, 12 97 (11 th Cir. 20 02). See also United States v. Caplinger, 339 F.3d

226, 236-38 (4th Cir. 2003) (finding that defendant’s representation as a physician

did not by itself mean he occupied a position of trust). In Morr is, though the

defendant was represented as an attorney to investors in an investment fraud

scheme , he was found not to ha ve abus ed a position of tru st. See id. at 1296 -97.

This C ourt exp lained:

               [I]t simply is not the case that an attorney holds a
               position of trust with respect to all people with whom he
               comes into contact solely by virtue of his status as an
               attorney. Morris did not have an attorney-client
               relationship with any of the victims. Although Morris’

3
 The district court cites the Seventh Circuit case, United States v. Lilly, 37 F.3d 1222 (7th Cir.
1994), as being instructive in determining that Hall occupied a position of trust by virtue of his
status as a pastor. Although Lilly dealt with an investment fraud scheme by a pastor, the Lilly
court specifically found that “regardless of the position Pastor Lilly held with respect to the non-
Church member investors, the Pastor undoubtedly held a position of trust within the Church.”
Id. at 1227. However, since all the victims presented by the government in this case were non-
church member investors, the district court’s reliance on Lilly is misplaced.

                                                 10
              status as an attorney may have been used to develop the
              trust of the victims, there are no facts to support the
              conclusion that as an attorney Morris occupied a position
              of trust in relation to these victims.

Id. at 1297. As in Morr is, the government concedes that there is no evidence in the

record in dicating th at Hall ha d a pasto r-clergy r elationsh ip with a ny of the victims.

Although Hall may have used his status as a pastor to develop the trust of

investor s, this doe s not dem onstrate th at Hall cre ated a per sonal tru st relations hip

with any of the victims. The government claims that evidence of Hall espousing

religious rhetoric a t the road show meeting s is sufficie nt to estab lish this

relationship. However, w e must be careful to “distinguish between those ar ms-

length com mercial relationsh ips where tru st is created by the d efendant’s

person ality or the v ictim’s cred ulity, and r elationsh ips in w hich the v ictim’s trus t is

based on defendant’s position in the transaction.” Garrison, 133 F.3d at 838

(citations omitted). Since Hall and the other elders traveled across the coun try,

these meetings were not regularly held in one locality, and listening to a meeting

over the course o f a few h ours is n ot enou gh to esta blish the ty pe of rela tionship

contem plated by the Sen tencing G uidelines . The go vernm ent attemp ts to equa te

Hall’s sp eeches at th ese meetin gs with the type o f preach ing a pas tor enga ges in

with members of h is church at regular church services. These ro adshow meetings,

however, were not regular church services, and the government concedes that there

                                              11
is no evid ence in th e record to indicate Hall pre ached ab out the g ifting pro gram to

victims at r egular ch urch ser vices w here he p resided a s a pastor .

       Most im portantly , in determ ining w hether H all occup ied a pos ition of tru st,

we must focus on the relationship between Hall and the victims from the

perspec tive of the victims. Garrison, 133 F.3d at 837. Th us, Hall’s status as a

pastor and his involvement in the roadshows are only as significant as the victims

indicate. It was the government’s burde n during sentencing, to show , by a

preponderance of the evidence, that Hall occupied a position of trust with respect

to his victim s. See United States v. Kummer, 89 F.3 d 1536 , 1545 ( 11th C ir. 1996 ).

How ever, inste ad of pr esenting any evid ence to in dicate that th ere was in fact a

personal trust relationship between Hall and even one victim, the government

relied solely on Hall’s status as a pastor. During trial, the government called

multiple victims as witnesses. None of these victims came to the roadshows for

spiritual guidance; rather, all of them testified that they came to invest money, not

because Hall was a pastor, but because they wanted to “double their money.” The

govern ment did not even present e vidence that Hall spoke o f the giftin g prog ram to

church members during regular church services, much less evidence that even one

church memb er was a victim of his fraud . Now the gov ernmen t asks this C ourt to

assume that at least one of the victims was a member of Hall’s church and

                                              12
considered Hall to be his pastor. We decline to assume facts that the government

had ample opportun ity to establish during either trial or sentencing. When these

victims d ecided to invest the ir mone y, they trus ted that this was a leg itimate

investm ent prog ram as re presente d by the d irectors, in cluding Hall; ho wever , this

relationship between Hall and his victims is no different than the relationship that

exists in ev ery succe ssful frau d. See id. at 838. With respect to the victims that the

govern ment pr esented, th ere was no pers onal trus t relationsh ip with H all so as to

place him in a position of trust under the Sentencing Guidelines, and therefore the

two-level enhancement under U.S.S.G. § 3B1.3 was in error. We are therefore

obliged to vacate the sentence imposed and remand for resentencing.

       AFFIRMED in part; REVERSED in part; Sentence Vacated and

remanded for resentencing.

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