Court Opinion

ID: 50041
Source: CourtListenerOpinion
Date Created: 2010-04-26 00:43:36+00
Date Added: 2024-06-11T09:03:14.610242
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                   IN THE UNITED STATES COURT OF APPEALS
                                                                                    FILED
                             FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                             ___________________________ ELEVENTH CIRCUIT
                                                                              AUG 4, 2006
                                      No. 05-13288                          THOMAS K. KAHN
                              ___________________________                       CLERK

                           D.C. Docket No. 03-20139 CR-MGC

UNITED STATES OF AMERICA,

                                                                      Plaintiff-Appellant,

       versus

MORAN SHEPKARU,
a.k.a. Lorain S.
a.k.a. Moran S.,

                                                                      Defendant-Appellee.

                              ___________________________

                       Appeal from the United States District Court
                           for the Southern District of Florida
                          ____________________________

                                        (August 4, 2006)

Before ANDERSON, FAY and SILER,* Circuit Judges.

SILER, Circuit Judge:

       *
         Honorable Eugene E. Siler, Jr., United States Circuit Judge for the Sixth Circuit, sitting by
designation.
      The United States appeals the district court’s post-jury verdict of acquittal of

Moran Shepkaru (a.k.a. Loraine S. or Moran S.) and the district court’s alternative

granting of a motion for a new trial. The government contends that the district court

erred in finding insufficient evidence to support the jury’s verdict of guilty to

conspiracy to commit wire fraud. Because there was sufficient circumstantial

evidence of a conspiracy to commit wire fraud, we REVERSE and VACATE the

post-verdict judgment of acquittal. However, we AFFIRM the district court’s order

granting a new trial.

                                       FACTS

      In 2003, Shepkaru and ten other defendants were indicted for: (1) conspiracy

to commit wire fraud, in violation of 18 U.S.C. § 1343; (2) wire fraud, in violation of

18 U.S.C. §§ 1842 and 3; (3) extortion, in violation of 18 U.S.C. §§ 1951 and 2; (4)

making a false bill of lading, in violation of 49 U.S.C. § 80116 and 18 U.S.C. § 2; and

(5) conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h).

      The indictment charged all defendants with having been members of a

conspiracy that represented to the public that they were reputable, long-established

moving companies that provided low-cost estimates to customers in order to induce

the consumers to hire the company to move their furnishings. Shepkaru’s indictment

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alleged that she communicated moving estimates to customers via telephone,

facsimile, and e-mail.

      The indictment further alleged that several co-conspirators supervised loading

foremen who would rush the customer through the company’s paperwork, often

causing the unsuspecting customer to sign blank or incomplete bills of lading and

other documents that did not inform the customer of the total price for their move.

Once the customer’s furnishings were loaded onto the moving truck, the foremen

would fraudulently inflate the price of the move by claiming that the customer had

many more cubic feet of cargo than initially estimated or by overcharging the

customer for material used for packing.

      When a customer would contact the moving company regarding delivery of

their furnishings, the company would refuse to deliver the customer’s furnishings

until the customer paid the inflated price for the move. United States Department of

Transportation regulations require that all of a customer’s furnishings must be

returned upon payment of 110 percent of the original price quote. See 49 C.F.R. §

375.405(b)(1)-(10). Nevertheless, co-conspirators ignored complaints about the

fraudulently inflated prices and lied to customers about the delivery of their

furnishings, sometimes using false names when speaking with customers over the

phone or in writing.

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         On October 14, 2004, Shepkaru was convicted of conspiring to commit wire

fraud, but acquitted of the remaining substantive counts, which included wire fraud.

The district court subsequently granted her motion for acquittal and motion for a new

trial.

                                         ANALYSIS

         I. Acquittal

         We review de novo a district court’s grant of acquittal under Federal Rule of

Criminal Procedure 29(c) and give no deference to the district court’s decision.2

United States v. Williams, 390 F.3d 1319, 1323 (11th Cir. 2004). We must determine

whether the evidence at trial was sufficient to permit a reasonable trier of fact to find

the defendant guilty beyond a reasonable doubt. See United States v. Allen, 302 F.3d

1260, 1262 (11th Cir. 2002) (citing Jackson v. Virginia, 443 U.S. 307, 319 (1979)).

We view the evidence in the light most favorable to the government, accepting the

jury’s reasonable inferences and credibility determinations. Glasser v. United States,

315 U.S. 60, 80 (1942), superseded by rule on other grounds, Bourjaily v. United

States, 483 U.S. 171 (1987).

         2
         The United States’s appeal of a judgment of acquittal may be reviewed on appeal. United
States v. Shelley, 405 F.3d 1195, 1200 (11th Cir. 2005).

                                               4
      To prove conspiracy under 18 U.S.C. § 371, the government must establish the

existence of an agreement to achieve an unlawful objective, the defendant’s knowing

and voluntary participation in the conspiracy, and the commission of an overt act in

furtherance of the conspiracy. United States v. Suba, 132 F.3d 662, 672 (11th Cir.

1998). To prove conspiracy to commit wire fraud, the government must further show

a defendant’s intent to devise any scheme to defraud another of money or property

and use of the wire for purposes of executing the scheme. 18 U.S.C. § 1343;

Pelletier v. Zweifel, 921 F.2d 1465, 1498 (11th Cir. 1991). The scheme need not be

carried out but if the scheme had been executed, it would deceive a reasonably

prudent person. Id. at 1498-99.

      The existence of an agreement may be proven by circumstantial evidence,

including “inferences from the conduct of the alleged participants or from

circumstantial evidence of a scheme.” United States v. Silvestri, 409 F.3d 1311, 1328

(11th Cir. 2005). The government may establish knowledge of an illegal agreement

by showing that the defendant “knew the essential object of the conspiracy.” Id.

Moreover, in reviewing the prosecution’s case, we draw no distinction between

circumstantial and direct evidence. United States v. Navarro-Ordas, 770 F.2d 959,

966 (11th Cir. 1985). “It is not necessary for the evidence to exclude every

reasonable hypothesis of innocence or be wholly inconsistent with every conclusion

                                         5
except that of guilt, provided a reasonable trier of fact could find that the evidence

establishes guilt beyond a reasonable doubt.’” United States v. Ward, 197 F.3d 1076,

1079 (11th Cir. 1999) (citations omitted).

         The government asserts that the district court committed several factual and

legal errors that included overlooking probative evidence of Shepkaru’s knowing

participation in the scheme. Shepkaru responds that there was no evidence of an

express agreement between her and anyone else.              She acknowledges that

circumstantial evidence may establish the existence of a conspiratorial agreement but

only where the inferences are reasonable. She asserts that there is no evidence

suggesting conspiratorial meetings, proof that she received the three percent of the

total move price, or records reflecting the employee payment schedules and amounts.

         The evidence established that Shepkaru worked at the moving company with

constantly changing names for over two years and that she earned commissions from

the amount collected from some moves. At a minimum, Shepkaru would have been

aware that customers’ bills had been increased and that some fraudulent scheme was

afoot.

         Indeed, the government may establish knowledge of an illegal agreement by

showing that the defendant knew the essential object of the conspiracy. Shepkaru

originated the low bids. The victims’ testimony established that Shepkaru negotiated

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the original offers without receiving assistance from others. Matthew Nassbaum

testified that his original quote from Shepkaru was escalated from $2,900 to $8,400.

He also testified that he realized he had been duped on his original move and called

the moving company, posing as a new customer. He stated he spoke to Shepkaru who

provided the same quote and reiterated that he would not be charged for additional

cubic footage unless an extra truck was required. Ben Gersh also testified that his

initial quote from Shepkaru at $750 was increased to $5,300.

      Although coconspirator Toledano’s testimony did not unequivocally state that

Shepkaru agreed to participate in wire fraud, some of his testimony was sufficient to

permit a reasonable jury to conclude that Shepkaru knew of and participated in the

scheme. He testified that Shepkaru was working with the moving company before

he arrived and continued to work as the company constantly changed names due to

its bad reputation. He stated that even though other employees, including himself,

quit working for the company due to their disgust with its business practices,

Shepkaru continued working. He stated that Shepkaru was compensated by a weekly

salary plus a three percent commission of the total the customer paid as evidenced by

multiple job reports. He specifically testified that the moving company changed its

name because of its bad reputation, customer complaints, and fraud. He stated that

Shepkaru knew of and was paid by commissions of the total amount collected from

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the moves because each salesperson maintained a list of the original estimates and the

amount collected.

      The government presented several documents in Shepkaru’s handwriting

showing a substantial difference between the original estimate and the amount

collected, and that 99 percent of the customers were overcharged for moves.

Toledano testified that several of the moving estimate original bids were in

Shepkaru’s handwriting and that he spoke with Shepkaru about “how much the

customer actually paid for the move.” In addition, Toledano testified that the moving

company owner, van drivers, he, and Shepkaru met in the office to discuss making

more money. A jury could reasonably infer that such meetings concerned the

fraudulent business practices given the nature of the business.

      Shepkaru argues that she only provided the quotes and did not increase the

prices, thus absolving her from the conspiracy to defraud. For instance, as part of the

FBI’s undercover move, Shepkaru competitively negotiated a lower price after the

agent claimed that a rival mover offered a lower price. The responsive email was

signed by Loran S., which was Shepkaru’s alias. Contrary to the district court’s

conclusion, there is evidence to permit a jury to reasonably find that Shepkaru

originated the low ball bids.

                                          8
      The evidence presented at trial shows that Shepkaru’s offers to consumers

were inconsistent and involved misstatements. On multiple occasions, the prices

were almost double the initial quote. For instance, Onsgard/Lenz quoted “all

inclusive” $850 and charged $1940 for a handling fee; an $880 moving fee based on

cubic footage was increased because it was calculated on weight contrary to the terms

of Shepkaru’s price quote; an all-inclusive $750 offer increased to $5,300 due to

additional labor and insurance charges, which later were discovered to be false; and

Nassbaum’s $2,900 all-inclusive offer was increased to $8,400 by pick up costs

despite Shepkaru’s assurances that the initial quote was the complete cost unless an

additional van was required. Moreover, Toledano testified that he and Shepkaru

discussed the amount that the customer paid for the move and that customers were

being lied to. He also said that Shepkaru was the only one who stayed with the

company. Based upon these statements, the jury could reasonably infer that she was

placing a low ball bid to lure customers into a transaction. From Toledano’s

testimony that Shepkaru received a commission for the amount charged each

customer, the jury could impute knowledge of the fraud.

      A jury could reasonably infer by the follow-up calls that Shepkaru had agreed

to participate in the conspiracy. Evidence established that Shepkaru received calls

placed by disgruntled customers – sometimes the same customers she extended an

                                         9
offer to – that she often ignored. She did not inform the customers that their

possessions could be redeemed on payment of 110 percent of the initial estimate,

although she was personally notified of this requirement by FBI Agent William

Schurek. A jury could reasonably believe from Shepkaru’s conduct that she

knowingly participated in a conspiracy to defraud those customers. The elements of

conspiracy do not require a showing that Shepkaru received her three percent

commission even though Toledano testified that she received commissions from

fraudulent moves.

      The district court was legally incorrect in finding that direct evidence of a

conspiratorial agreement is required. See Silvestri, 409 F.3d at 1328; Williams, 390

F.3d at 1324. Moreover, the district court incorrectly ignored the jury findings

against Shepkaru’s version of events and dismissed all reasonable circumstantial

evidence. Williams, 390 F.3d at 1324 (reversing acquittal where the district court did

not apply the correct standard requiring resolution of facts “in favor of the

government” and acceptance of all reasonable inferences in support of the

government’s case); see also United States v. Miranda, 425 F.3d 953, 961-62 (11th

Cir. 2005) (reversing post-trial judgment of acquittal).

      In conclusion, the government showed that Shepkaru was engaged in a

systematic scheme to provide low offers to induce customers of the moving company

                                         10
to use their services by use of the electronic mail and telephone. Though the

government’s more specific theories failed for lack of evidence, the record was

sufficient to allow a reasonable finder of fact to conclude that Shepkaru conspired to

engage in a fraudulent scheme to defraud customers of both money and property by

using the wires.

      II. New Trial

      A search warrant executed at Shepkaru’s work place yielded a substantial

number of records, including bills. The documents were disclosed in pretrial

discovery and introduced into evidence at trial. The government created a chart from

the seized records showing each individual moving contract initial quote, the ultimate

bill, 110 percent of the original bid, and a percentage and actual difference between

110 percent of the initial quote and the final bill.

      The grant of a new trial is reviewed for abuse of discretion but the abuse of

discretion standard employed in this situation is more exacting. See United States v.

Hernandez, 433 F.3d 1328, 1335-36 (11th Cir. 2005). A district court may weigh the

evidence and assess the credibility of witnesses, but it may not set aside the verdict

unless allowing the verdict to stand would result in a miscarriage of justice. Butcher

v. United States, 368 F.3d 1290, 1297 (11th Cir. 2004).

                                           11
      The district court found that the summary chart and the commission sheets

were vital to the government’s proof that Shepkaru was aware of and benefitted from

the fraud occurring at the place of employment. As such, the district court’s ruling

that Shepkaru’s substantial rights were “affected to such a degree by the

government’s introduction of the summary chart and underlying business records”

and grant of a new trial were not an abuse of discretion.

      The government downplays the chart as only having the potential for misuse

even though its information is accurate. The government does not address the fact

that accurate information can be used to create inaccurate inferences, which was the

case here. Providing a jury with a chart that lists 144 “victims,” without showing that

each listed person was actually a victim, is sufficient to support the district court’s

finding of prejudice for a new trial. Moreover, the insinuation that Shepkaru received

a commission from the total amount billed for each of the 144 so-called “victims” –

even though it was not the amount actually collected in each case – may likewise be

prejudicial.

      Therefore, the judgment of acquittal is REVERSED and VACATED, and the

district court’s granting of a new trial is AFFIRMED.

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