Court Opinion

ID: 2968360
Source: CourtListenerOpinion
Date Created: 2015-09-22 04:56:54.544313+00
Date Added: 2024-06-11T11:43:18.400157
License: Public Domain

Filed:   September 15, 2006

                     UNITED STATES COURT OF APPEALS

                         FOR THE FOURTH CIRCUIT

                              No. 05-5090(L)
                                 (CR-05-3)

UNITED STATES OF AMERICA,

                                                       Plaintiff - Appellant,

           versus

KENNETH W. CURRY, II,

                                                       Defendant - Appellee.

                                   O R D E R

     The   court    amends   its   opinion     filed   August   28,   2006,   as

follows:

     On page 2, the third line of the attorney information section

is amended by deleting the word “Special” following the name of

“Robert John Krask.”

                                               For the Court - By Direction

                                                  /s/ Patricia S. Connor
                                                          Clerk
                           PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,               
                 Plaintiff-Appellant,
                 v.                             No. 05-5090
KENNETH W. CURRY, II,
              Defendant-Appellee.
                                        
UNITED STATES OF AMERICA,               
                 Plaintiff-Appellee,
                 v.                             No. 05-5173
KENNETH W. CURRY, II,
             Defendant-Appellant.
                                        
           Appeals from the United States District Court
          for the Eastern District of Virginia, at Norfolk.
                Walter D. Kelley, Jr., District Judge.
                            (CR-05-3)

                       Argued: May 26, 2006

                      Decided: August 28, 2006

    Before MOTZ, GREGORY, and DUNCAN, Circuit Judges.

Affirmed in part, vacated in part, and remanded by published opinion.
Judge Gregory wrote the opinion, in which Judge Motz and Judge
Duncan joined.
2                      UNITED STATES v. CURRY
                             COUNSEL

ARGUED: John Staige Davis, V, Assistant United States Attorney,
OFFICE OF THE UNITED STATES ATTORNEY, Richmond, Vir-
ginia; Robert John Krask, Assistant United States Attorney,
OFFICE OF THE UNITED STATES ATTORNEY, Norfolk, Vir-
ginia, for the United States. William Todd Watson, HARGETT &
WATSON, P.L.C., Glen Allen, Virginia, for Kenneth W. Curry, II.
ON BRIEF: Paul J. McNulty, United States Attorney, Alexandria,
Virginia, for the United States.

                             OPINION

GREGORY, Circuit Judge:

   On May 31, 2005, after a six-day trial, a jury convicted Kenneth
W. Curry, II of thirteen counts of mail fraud, nine counts of wire
fraud, and three counts of engaging in unlawful monetary transac-
tions, in violation of 18 U.S.C. §§ 1341, 1343, and 1957, respectively.
Thereafter, the district court sentenced Curry to twelve-month terms
of incarceration on each count, to be served concurrently and fol-
lowed by twelve months of home detention and three years of super-
vised release. The government appealed, claiming that the sentence
was unreasonable. Curry cross-appealed, challenging the district
court’s denial of his motion for judgment of acquittal. For reasons set
forth below, we affirm Curry’s conviction, but vacate his sentence
and remand for resentencing.

                                  I.

   In 2000, Curry began using the Internet auction site eBay to buy
and sell items. Between 2003 and 2004, Curry sold large volumes of
coins on eBay under the account name "kwciicoins." Curry engaged
in thousands of successful transactions, earning an eBay positive feed-
back rating of over 96%.

   In the summer and fall of 2004, Curry was on the verge of financial
ruin. His security system installation company was over ninety days
                       UNITED STATES v. CURRY                         3
past due on a $138,000 debt, and he owed the IRS $98,000. The gov-
ernment contends that Curry turned to his "hobby" of dealing in coins
to get out of his financial straits.

   At the end of summer 2004, Curry placed up for auction on eBay
large volumes of one-ounce gold coins, known as "Gold Eagles."1
Between August and October 2004, Curry sold 381 Gold Eagles to
twenty-one different buyers. According to the government, Curry
made a series of false representations in his advertisements of the
coins. For example, he represented that (1) the coins were located in
Virginia Beach, J.A. 786; (2) the coins were "part of a larger estate
auction that [would] take about three months to complete," id. at 777;
(3) the coins were of exceptional quality and likely only to have been
seen by the mint or the original buyer, id.; and (4) he would provide
a full refund to all unhappy buyers, id. at 787. The twenty-one buyers
paid Curry approximately $148,000 for the 381 coins. Of the 381
coins purchased, Curry delivered only 44 of the coins, which repre-
sented only partial deliveries to two purchasers.

   In September 2004, one buyer, Charles Clarkson, took Curry to
task. Clarkson had paid $16,811 for 43 gold coins in late August
2004. When he discovered that his check had been cashed on Septem-
ber 1, 2004, Clarkson began emailing and telephoning Curry. On Sep-
tember 25, 2004, Clarkson spoke with Curry, telling Curry that if he
did not receive a refund, he would come to Virginia Beach and "swear
out a complaint and have [Curry] arrested." J.A. 109. Within ten min-
utes of the call, Curry used PayPal2 to refund Clarkson’s money. Id.
at 115. Curry paid Clarkson an additional $1,362, purportedly to com-
pensate Clarkson for his troubles, to cover PayPal fees, and to accom-
modate the increase in the price of gold. Id.

   Following his interaction with Clarkson, Curry composed an email
to most of the remaining gold coin buyers. He wrote, "UPS is still
  1
    Curry advertised Gold Eagles that had a $50 face value. However, the
coins were actually valued at or above the spot market price for gold,
which ranged between $390 and $420 per ounce during the relevant
period.
  2
    PayPal is an Internet service that allows individuals to send and
receive funds electronically.
4                       UNITED STATES v. CURRY
dealing with 83 some odd missing shipments, a solution . . . is not yet
available. Other shipments have been delayed while they work this
out." See, e.g., J.A. 780. He offered buyers either a refund of their
payments, shipping fees, and PayPal fees; or a Gold Maple Leaf coin
and Silver Eagle coin for each Gold Eagle ordered. See, e.g., id. at
780, 807. In response, some buyers requested refunds and others
asked for substitute coins. Rather than send refunds or substitute
coins, however, Curry cut off nearly all communication with the buyers.3

   After receiving a number of complaints, Federal Bureau of Investi-
gation agents conducted a search of Curry’s home on December 16,
2004. During the search, agents found a single $20 gold coin. No $50
Gold Eagles were located. Further, the agents discovered records to
support the 44 gold coin shipments and various silver coin shipments,
but did not locate records showing that Curry had bought coins from
an estate. Two receipts, however, showed that he had bought coins
from two local coin shops.

   The owners of those coin shops testified at trial. They authenticated
their respective receipts. Additionally, they testified to the approxi-
mate number of coins that they had sold Curry during the interval
between August and November 2004. They both denied having sold
Curry 381 Gold Eagles.

   At trial, Curry explained how UPS was allegedly to blame for the
purchasers’ non-receipt of the Gold Eagles. Curry attributed all of the
problems to events occurring on September 4, 2004. On that day,
according to Curry, he took four bags filled with gold coins to a UPS
store in Virginia Beach. J.A. 722. He estimated that the bags con-
tained approximately 240 to 416 Gold Eagles, id. at 723, presumably
worth between $96,000 and $166,000 (assuming a value of $400 per
coin). Curry testified that he turned the coins over to store employee
Doramae Wright, but that he never received any shipping receipts or
tracking information because the store’s computer system was then
failing. Curry claimed that several weeks later the UPS store owner
notified him that his coins had been lost. Nonetheless, Curry never
    3
    Curry, however, maintains that full or partial refunds were given to
a host of buyers. Most of those individuals, however, are not involved in
this action.
                       UNITED STATES v. CURRY                        5
availed himself of UPS’s formal complaint procedures. And, a search
of the store’s and UPS’s computerized records did not locate any
shipments from Curry to the buyers, save the partial shipments, and
the records revealed that all of Curry’s shipments between June and
December 2004 had been delivered.

   At the close of trial, the government moved to dismiss two counts,
and the jury returned a guilty verdict on the remaining counts. There-
after, Curry filed a motion for judgment of acquittal under Rule 29 of
the Federal Rules of Criminal Procedure, which the district court sub-
sequently denied.

   On September 19, 2005, the district court conducted a lengthy sen-
tencing hearing. At that time, the court heard arguments regarding the
Presentence Investigation Report (PSR), which calculated an offense
level of 24 and criminal history category of one, resulting in a U.S.
Sentencing Guidelines range of 51 to 63 months. The court overruled
most of Curry’s objections to the PSR, including Curry’s objection to
the obstruction of justice enhancement, finding by a preponderance of
the evidence that Curry committed perjury in his testimony regarding
his delivery of several hundred gold coins to a UPS store on Septem-
ber 4, 2004. The court, however, sustained Curry’s objection to the
enhancement for representing that he was acting on behalf of a chari-
table organization, stating that the enhancement is typically reserved
for instances in which the representation induced a purchase or a gift.
Accordingly, the district court adjusted the offense level to 22, which
resulted in a Guidelines range of 41 to 51 months. J.A. 1103-04,
1204.

   The United States argued for a sentence within the Guidelines
range, whereas Curry asked that his efforts toward restitution be taken
into account in arriving at a sentence. Curry turned over a $42,000
check derived from the sale of his house and agreed to have the funds
from his posting of bond applied to restitution.

   Although the Guidelines recommended a term of imprisonment
between 41 and 51 months, the district court sentenced Curry to
twelve-month concurrent sentences on each count; twelve months of
home confinement following his release from prison; supervised
release for three years; $122,965.46 in restitution; a $7500 fine; and
6                      UNITED STATES v. CURRY
a $2500 special assessment. The court arrived at this variance sen-
tence because it was impressed with Curry’s payment of restitution,
J.A. 1123, and believed that Curry did not "set out to run a scam," id.
at 1121, and "had every intention of giving the money back," id. at
1122. Although the government had strenuously argued for a within-
Guidelines sentence during the sentencing hearing, it did not raise a
formal objection after the district court imposed its below-Guidelines
sentence. This appeal and cross-appeal followed.

                                  II.

   In reviewing Curry’s sufficiency of the evidence claim, this Court
must determine whether, construing the evidence in the light most
favorable to the government, any reasonable trier of fact could have
found Curry guilty beyond a reasonable doubt. United States v. Tres-
vant, 677 F.2d 1018, 1021 (4th Cir. 1982). In making this determina-
tion, the government is given "the benefit of all reasonable inferences
from the facts proven to those sought to be established." Id. Thus, "if
the record reflects that the Government presented substantial evidence
from which a reasonable jury could convict, we must uphold the ver-
dict." United States v. Godwin, 272 F.3d 659, 666 (4th Cir. 2001).
Moreover, "[w]here there are conflicts in the testimony, it is for the
jury and not the appellate court to weigh the evidence and judge the
credibility of the witnesses." Id.

   When viewed in the light most favorable to the government, the
evidence is sufficient to sustain the jury verdict. Mail fraud under 18
U.S.C. § 1341 and wire fraud under 18 U.S.C. § 1343 have two essen-
tial elements: (1) the existence of a scheme to defraud and (2) the use
of the mails or wire communication in furtherance of the scheme. See
Godwin, 272 F.3d at 666; United States v. ReBrook, 58 F.3d 961, 966
(4th Cir. 1995). The logical conclusion to be drawn from the absence
of any proof that Curry ever possessed 381 Gold Eagles and Curry’s
failure to file a formal complaint when UPS allegedly lost $96,000 to
$166,000 in Gold Eagles, is that Curry never possessed a large vol-
ume of Gold Eagles for sale. Thus, each time Curry sent a wire com-
munication to facilitate the sale of a phantom Gold Eagle or accepted
a payment by mail for a nonexistent Gold Eagle, he committed wire
or mail fraud. Likewise, when he engaged in well-documented mone-
tary transactions involving sums in excess of $10,000 derived from
                        UNITED STATES v. CURRY                         7
his sale of fictitious Gold Eagles, he violated 18 U.S.C. § 1957.
United States v. Smith, 44 F.3d 1259, 1270 (4th Cir. 1995) ("Section
1957 requires a showing that [the defendant] knowingly engaged in
a monetary transaction involving criminally derived property with a
value greater than $ 10,000 . . . ."). Therefore, we believe a reasonable
jury could have convicted Curry of the crimes charged based on the
evidence adduced at trial.

   None of Curry’s arguments on appeal persuade us otherwise. Curry
argues that his convictions must be set aside because there was insuf-
ficient evidence to support a finding of intent to defraud, an essential
element of his mail and wire fraud convictions. He contends that two
facts undermine the assertion that he intended to defraud the purchas-
ers: (1) the government did not show when the alleged scheme was
devised, and (2) he issued refunds to several buyers. Both of these
arguments fail.

   Curry misstates the law when he suggests that the government had
a burden of proving precisely when the scheme to defraud was con-
cocted. As set forth above, mail fraud and wire fraud have only two
essential elements—the existence of a scheme to defraud and the use
of the mails or wire communication in furtherance of the scheme.
Thus, neither the wire fraud nor mail fraud statute requires that the
government prove precisely when the intent to defraud first material-
ized. Moreover, even if an individual had an innocent intent at the
outset, a mail or wire fraud conviction can be sustained if that individ-
ual used the mails or wire communication to disseminate falsehoods
designed to calm nervous buyers, as Curry did here. See, e.g., God-
win, 272 F.3d at 667 ("[A] reasonable jury could conclude that even
if Godwin and Curry-Robinson had originally harbored good inten-
tions, when their financial expectations soured they engaged in fraud-
ulent activity to placate unhappy investors and prolong their scheme
to defraud.").

   Curry’s contention that his refund history suggests good faith also
fails. The intent to repay eventually is irrelevant to the question of
guilt for fraud. See United States v. Painter, 314 F.2d 939, 943 (4th
Cir. 1963) ("[N]o amount of honest belief that his corporate enterprise
would eventually succeed can excuse the willful misrepresentations
by which the investors’ funds were obtained. An investor may be
8                       UNITED STATES v. CURRY
defrauded if his reliance is induced by deliberately false statements of
fact, and the defendant’s optimism as to the future is no defense.");
United States v. Rossomando, 144 F.3d 197, 201 (2d Cir. 1998)
("[W]here a defendant deliberately supplies false information to
obtain a bank loan, but plans to pay back the loan and therefore
believes that no harm will ‘ultimately’ accrue to the bank, the defen-
dant’s good-faith intention to pay back the loan is no defense because
he intended to inflict a genuine harm upon the bank . . . ."). Because
it appears that Curry never possessed the coins, he committed fraud
each time he represented otherwise and accepted money from buyers.
And, his subsequent refunds cannot absolve him of responsibility for
consummated acts of fraud.4

   Accordingly, we conclude that the district court did not err in deny-
ing Curry’s motion for judgment of acquittal. As the district court
noted via its rhetorical question, "there [were] circumstances here,
everything from the jury not believing the story about dropping the
coins off to telling people that they had been mailed and so on, that
[led] the jury to conclude that he had set out to do this all along[.]"
J.A. 1023-24. We affirm Curry’s convictions.

                                   III.

                                   A.

   We now consider whether the district court erred in assigning a
sentence well below the Guidelines range. We begin with the thresh-
old question of standard of review. Curry argues that we should
review the sentence for plain error, because the government did not
object to the sentence when announced. We disagree.
    4
   Curry also vaguely asserts that the fact that UPS mishandled one
package of coins shipped on September 4, 2004, somehow renders the
evidence insufficient to sustain the jury’s verdict. We are not persuaded.
The fact that UPS mishandled, but ultimately delivered, a single ship-
ment of three gold coins does not require a jury to believe that UPS per-
manently lost eighty other shipments that collectively contained several
hundred coins. Indeed, as discussed above, the evidence suggests that
Curry never possessed a large volume of Gold Eagles.
                         UNITED STATES v. CURRY                            9
   The government preserved its objection to the sentence by vigor-
ously arguing for a sentence within the Guidelines range throughout
the sentencing hearing. See Fed. R. of Crim. P. 51(b) ("A party may
preserve a claim of error by informing the court—when the court rul-
ing or order is made or sought—of the action the party wishes the
court to take, or the party’s objection to the court’s action and the
grounds for that objection." (emphasis added)). During a three-hour
sentencing hearing, the government responded to every argument the
defendant offered for a sentence below that recommended in the PSR.
The government requested a "substantial" sentence, because Curry
engaged in serious Internet crimes that disrupted the lives of many
different individuals from varied walks of life. J.A. 1108.

   Further, the government made its position known with respect to
the effect of restitution. Although the government indicated that Curry
deserved some credit for his restitution, J.A. 1109, it noted that Curry
did not pay restitution before being charged and convicted, and did
not turn over proceeds from the sale of his house without prompting,
id. at 1110. Given all the sentencing factors, "including Mr. Curry’s
background, the seriousness of his crime, the restitution to be paid,
the fact that he took the stand and lied at trial and even now is unable
to come to grips with his misconduct, [the government] ask[ed] the
Court to sentence the defendant within the guideline range." Id.

   In this regard, the government made unmistakably clear its position
regarding Curry’s sentence. That the government did not restate its
position after the sentence was announced, by lodging a futile objec-
tion at the end of the sentencing colloquy, is without consequence.
See United States v. Shumard, 120 F.3d 339, 340 (2d Cir. 1997)
("Appellee argues that the government has waived these claims by
failing to object to the district court’s ruling at sentencing. . . . In this
case, the government argued each of these claims at the sentencing
hearing prior to the district court’s disputed ruling. In these circum-
stances, the government clearly preserved these claims for appellate
review."); see also United States v. Clark, 434 F.3d 684, 686 n.1 (4th
Cir. 2006). Indeed, the district court knew that the government would
be displeased with the sentence, saying "I may aggravate the govern-
ment by [announcing a variance sentence], but it seems to me under
these circumstances the issue seems to be doing some time rather than
how much time." J.A. 1123 (emphasis added). Thus, we conclude that
10                       UNITED STATES v. CURRY
the government properly preserved its claim and reject Curry’s con-
tention that plain error review applies.5

                                    B.

   In the wake of United States v. Booker, 543 U.S. 220 (2005), which
rendered the Sentencing Guidelines advisory, see id. at 245, a district
court must:

      (1) properly calculate the sentence range recommended by
      the Sentencing Guidelines; (2) determine whether a sentence
      within that range and within statutory limits serves the fac-
      tors set forth in [18 U.S.C.] § 3553(a) and, if not, select a
      sentence that does serve those factors; (3) implement man-
      datory statutory limitations; and (4) articulate the reasons for
      selecting the particular sentence, especially explaining why
      a sentence outside of the Sentencing Guideline range better
      serves the relevant sentencing purposes set forth in
      § 3553(a).

United States v. Green, 436 F.3d 449, 456 (4th Cir. 2006). An appel-
late court, in turn, reviews a district court’s sentence for unreason-
ableness, see Booker, 543 U.S. at 261, which "will largely depend
upon the specific facts of each case and the district court’s consider-
ation and application of the § 3553(a) factors to those facts." United
States v. Hampton, 441 F.3d 284, 287 (4th Cir. 2006). A sentence
"based on an error in construing or applying the Guidelines, . . . will
be found unreasonable and vacated." Green, 436 F.3d at 457. Like-
wise, a sentence will be vacated if it is "imposed outside the Guide-
line range and the district court provides an inadequate statement of
reasons or relies on improper factors in departing from the Guide-
lines’s recommendation." Id. Finally, we have instructed that

      when the variance is a substantial one—such as the two-
      thirds reduction from the bottom of the advisory guideline
  5
    Curry’s reliance on United States v. Barajas-Nunez, 91 F.3d 826 (6th
Cir. 1996) is misplaced because in that case, "the government failed to
give the district court any inkling that it disagreed with the departure."
Id. at 830.
                        UNITED STATES v. CURRY                        11
    range that is at issue here—we must more carefully scruti-
    nize the reasoning offered by the district court in support of
    the sentence. The farther the court diverges from the advi-
    sory guideline range, the more compelling the reasons for
    the divergence must be.

United States v. Moreland, 437 F.3d 424, 434 (4th Cir. 2006).

   It is against this backdrop that we consider the district court’s rea-
sons for assigning a variance sentence. First, the district court
expressed its view that Curry did not at the outset intend to defraud
the buyers. The court stated, "it was my conclusion from listening to
the facts that this didn’t start out as a scam, but somehow or another
it ended up as one from the standpoint of using people’s money that
had been given to you for other purposes." J.A. 1122. The court
explained that "in looking at the sentencing factors, I think I need to
consider the case differently . . . than where somebody had come up
with a scheme to use [eBay] from the inception to scam a bunch of
people out of money . . . ." Id. at 1122. Second, the court also gave
great weight to Curry’s efforts at restitution, saying "I’m also guided
by the need to pay restitution. I think it’s very important that you have
stepped forward to do that. That impresses me a great deal, because
amazingly enough, most people don’t. . . . You have stepped forward
and done that, so I think that’s very meaningful." Id. at 1123. As set
forth below, we find these reasons insufficient to support the variance
sentence assigned here.

   First, we agree with the government’s assertion that the court’s
sentence runs counter to the weight of the evidence and the jury’s ver-
dict. By basing its decision to vary downward in large part on a belief
that Curry did not set out to defraud the buyers, the court contradicted
the weight of evidence and the verdict. See United States v. Weston,
960 F.2d 212, 218 (1st Cir. 1992) ("[A] guilty verdict, not set aside,
binds the sentencing court to accept the facts necessarily implicit in
the verdict."); see also United States v. Hourihan, 66 F.3d 458, 465
(2d Cir. 1995).

   By ruling as it did, the jury necessarily decided that Curry did not
leave a large volume of coins at the UPS store on September 4, 2004.
Indeed, as the court observed, "if the jury had believed the UPS story,
12                      UNITED STATES v. CURRY
that would have been completely exculpatory, wouldn’t it?" J.A.
1082. The court explained that Curry "couldn’t have possibly had a
scheme to defraud if he actually sent the coins, could he?" Id. at 1083.
Thus, implicit in the jury’s verdict is the conclusion that Curry did not
deliver coins to UPS on September 4, 2004, and thus never had 381
Gold Eagles at his disposal for sale. The district court was bound "to
accept th[is] fact[ ] necessarily implicit in the verdict." Weston, 960
F.2d at 218. The court erred, therefore, in sentencing Curry based on
a conclusion that contravened the jury’s verdict.

   Second, we find that Curry’s restitution is by itself insufficient to
justify the 70% variance at issue. As we have previously stated, "[t]he
farther the court diverges from the advisory guideline range, the more
compelling the reasons for the divergence must be." Moreland, 437
F.3d at 434. On this record, we do not find the payment of restitution
so compelling. Curry did not begin making restitution until the jury
convicted him of the charges. Thus, in paying restitution, he was not
accepting responsibility for his actions, far from it. Curry always
maintained his innocence, even at the risk of perjuring himself, and
required the government to undertake a time-consuming trial. Further,
in making some payments of restitution before sentencing, Curry
merely complied with an order of restitution that he likely knew was
forthcoming. And, even if defendants rarely make full restitution, we
nonetheless expect—and need not substantially reward—compliance
with court orders. Thus, although Curry’s restitution may be worthy
of some consideration in the sentencing determination, it does not jus-
tify so large a variance from the advisory Guidelines range.

                                  IV.

  For the reasons stated above, we affirm Curry’s conviction, but
vacate his sentence and remand for resentencing.

                                    AFFIRMED IN PART, VACATED
                                       IN PART, AND REMANDED