Court Opinion

ID: 4181032
Source: CourtListenerOpinion
Date Created: 2017-06-26 21:06:33.395585+00
Date Added: 2024-06-11T14:39:11.914363
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 17a0371n.06

                                   Case Nos. 16-1774/1775

                         UNITED STATES COURT OF APPEALS
                              FOR THE SIXTH CIRCUIT                                FILED
                                                                              Jun 26, 2017
                                                                          DEBORAH S. HUNT, Clerk
UNITED STATES OF AMERICA,                           )
                                                    )
       Plaintiff-Appellee,                          )         ON APPEAL FROM THE
                                                    )         UNITED STATES DISTRICT
v.                                                  )         COURT FOR THE EASTERN
                                                    )         DISTRICT OF MICHIGAN
ROSCOE BENTON, III and                              )
DESI NAJUANA BENTON,                                )                  OPINION
                                                    )
       Defendants-Appellants.                       )

       BEFORE: SILER, CLAY and McKEAGUE, Circuit Judges.

       McKEAGUE, Circuit Judge.          Defendants Roscoe Benton, III, and his wife Desi

Najuana Benton stood trial in November 2014 on charges of bankruptcy fraud and mail fraud.

Each was found guilty of some but not all of the charged offenses. Roscoe Benton, joined by

Desi Benton, claims entitlement to a new trial, arguing the defense was unfairly prejudiced by

prosecutorial misconduct throughout the trial. Desi Benton also contends there was insufficient

evidence to sustain one of her bankruptcy fraud convictions. For the reasons that follow, we

reject both arguments and affirm each defendant’s judgment.

                                               I

       The Bentons resorted to bankruptcy protection when they were unable to keep up with

their residential rent payments.   In October 2006, the Bentons began renting a home at
Case Nos. 16-1774/1775, United States v. Benton, et al.

5322 Jamestown Place in Grand Blanc, Michigan, from the owner, Paul Carey, for $1,100 per

month. Carey had lived there for four years, but was transferred in his employment to Hawaii.

Carey later moved to California. From there, he continued to collect rent payments from the

Bentons. In 2008 or 2009, however, their payments became irregular. In late 2009, Carey took

action in state court to evict the Bentons for nonpayment of rent. In a judgment dated December

3, 2009, the Bentons were found to owe $12,635 in past due rent and costs and, barring payment

in full by December 14, 2009, they would be ordered to vacate the home.

       In response, the Bentons petitioned for relief under Chapter 13 of the Bankruptcy Code.

Their petition was filed on December 14, 2009, staying the impending eviction. The bankruptcy

court approved the Bentons’ Chapter 13 Plan on June 10, 2010. It required the Bentons to pay

the bankruptcy trustee $1,834 per month over the course of sixty months. The trustee would

then, among other things, pay the $1,100 monthly rental amount to Carey, plus $110 per month

to make up the arrears.

       Less than a month after confirmation of their bankruptcy plan, the Bentons applied for

homeowner’s insurance on the house they were continuing to rent from Paul Carey. The State

Farm homeowner’s insurance policy became effective July 16, 2010, affording coverage for

replacement value of the home in the amount of $267,000 and personal property coverage in the

amount of $200,250.

       On May 16, 2011, the Grand Blanc house on Jamestown Place was severely damaged by

fire. Within two months, State Farm had paid the Bentons $184,726 for damage to the dwelling

and the policy limit of $200,250 for loss of personal property.1 On August 8, 2011, the Bentons

       1
          Carey remained the owner of the house, but he didn’t learn of the house fire until
February 2012, when an attorney for Grand Blanc Township contacted him and requested that he
either repair the structure or tear it down.
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used the insurance proceeds to purchase a house in Desi’s name at 5260 Fairway Trail in Grand

Blanc for $180,574 in cash.

        Apparently, however, they did not use the insurance proceeds to make good on the

payments owed to the bankruptcy trustee. On August 3, 2011, the trustee moved to dismiss the

bankruptcy proceeding because the Bentons had not made required payments since May 27,

2011.   The Bentons responded to the motion on August 12 by admitting their default on

payments required by the plan. They explained that they’d been evicted from the Jamestown

Place residence because the landlord had defaulted on his mortgage payments, triggering

foreclosure proceedings which forced them to move. They assured the court that they would

correct their delinquency within 60 days and amend their plan or convert their petition to one

seeking relief under Chapter 7.

        This initial response was followed on October 17, 2011, by the Bentons’ request for

conversion from Chapter 13 to Chapter 7. The request for conversion was premised on the

Bentons’ statement that (1) they had filed for Chapter 13 relief “in an attempt to save their

house”; and (2) their attempt to purchase the house by land contract had failed because “Paul

Carey never paid the mortgage company and their residence was foreclosed on.” R. 109, Notice

of Voluntary conversion, Page ID 3201. Both of these bankruptcy court filings were prepared by

attorney Henry Sefcovic and the latter filing bears the electronic signatures of both Bentons.

        As a consequence of these actions, the Bentons were indicted in the Eastern District of

Michigan on four counts of bankruptcy fraud, in violation of 18 U.S.C. § 157(3), and one count

of mail fraud, in violation of 18 U.S.C. § 1341. Specifically, counts one and two charged the

Bentons with bankruptcy fraud for knowingly understating the value of their personal property in

their Chapter 13 filings in order to defraud creditors. Count three charged them with falsely

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representing that they were owners of the dwelling at 5322 Jamestown Place in Grand Blanc to

obtain homeowner’s insurance coverage and proceeds, causing State Farm to mail a check

payable to them in the amount of $184,726.72. Counts four and five charged the Bentons with

two more acts of bankruptcy fraud. Count four charged them with falsely representing in a

bankruptcy filing that they were forced to move from their residence due to foreclosure

proceedings, knowing the house and its contents had actually been destroyed by fire, for which

they had received at least $373,426.72 in insurance payments. Count five charged them with

falsely representing in a bankruptcy filing that they were making monthly rent payments of

$550 at a time when they were living in a Grand Blanc house they had purchased with cash and

were not actually making any rent payments.

       A jury trial was conducted over the course of eight days in November 2014. The jury

returned its verdict, finding both defendants not guilty of count one (understating the value of

motor vehicles in bankruptcy filings); finding Desi not guilty and Roscoe guilty of count two

(understating the value of personal property in bankruptcy filings); finding both defendants

guilty of mail fraud (misrepresentation of home ownership to State Farm); and finding both

defendants guilty of counts four and five (bankruptcy misrepresentations regarding the status of

their habitation following the house fire). Defendants were sentenced on May 5, 2016. Roscoe

Benton was sentenced to a prison term of 48 months on each convicted offense, to be served

concurrently, and was ordered to pay restitution to State Farm in the amount of $400,088.72.

Desi Benton was sentenced to a prison term of 24 months on each convicted offense, to be

served concurrently. She too was ordered to pay restitution in the amount of $400,088.72. The

court ordered the two defendants’ prison sentences to be served consecutively to each other:

Desi’s sentence to be served first, and Roscoe’s to commence upon Desi’s release.           The

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Case Nos. 16-1774/1775, United States v. Benton, et al.

staggering of the sentences was designed to allow one of the two defendants to remain in the

family household caring for Roscoe Benton’s infirm mother, who was living with them. Desi

began serving her sentence in the custody of the Bureau of Prisons on June 2, 2016. Her

estimated release date is April 19, 2018.

       Each defendant appealed separately and the appeals have been consolidated for briefing

and disposition. Both defendants contend they were denied a fair trial by virtue of prosecutorial

misconduct during trial. Specifically, they contend the Assistant United States Attorney made

repeated comments—unsupported by evidence—implying that defendants’ scheme to commit

bankruptcy fraud included plans to commit insurance fraud by arson. In addition, Desi Benton

contends there was insufficient evidence that she made a false representation necessary to sustain

her count four bankruptcy fraud conviction.

                                                II

       A. Prosecutorial Misconduct

       The indictment did not include any charges or even any allegation of insurance fraud by

arson against either defendant. No evidence presented at trial touched on the cause of the

Jamestown Place fire, much less that it was caused by arson. This, however, did not hinder

counsel for the government, the Bentons contend, from repeatedly and gratuitously alluding

during trial to “things could that could burn up in a house fire.” The characterization appeared

first in counsel’s opening statement, was referred to in examining witnesses, and was reiterated

in closing arguments. These references are said to have been part of a deliberate scheme to plant

the seed in the jurors’ minds that the house fire had been started intentionally. The Bentons

contend this prosecutorial misconduct prejudiced the defense and denied them a fair trial.

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Case Nos. 16-1774/1775, United States v. Benton, et al.

       To prevail on a claim of prosecutorial misconduct, it is not enough for the Bentons to

show that the prosecutor’s comments were improper; they must establish that the comments so

infected the trial with unfairness as to make the resulting conviction a denial of due process.

Wogenstahl v. Mitchell, 668 F.3d 307, 327–28 (6th Cir. 2012). If the comments were improper,

we then consider whether they were so flagrant as to result in such fundamental unfairness as to

warrant reversal. United States v. Lawrence, 735 F.3d 385, 431–32 (6th Cir. 2013). Four factors

guide our determination of flagrancy: “‘(1) whether the conduct and remarks of the prosecutor

tended to mislead the jury or prejudice the defendant; (2) whether the conduct or remarks were

isolated or extensive; (3) whether the remarks were deliberately or accidentally made; and

(4) whether the evidence against the defendant was strong.’” Id. at 432 (quoting United States v.

Carson, 560 F.3d 566, 574 (2009)). Ordinarily, a claim of prosecutorial misconduct is reviewed

de novo, but where, as the Bentons here concede, no objection was made during trial, the claim

is reviewed for plain error. Id.

       We may grant relief under plain-error review only if four requirements are met: (1) there

must be a legal error; (2) the error must be clear; (3) the error must have affected the appellant’s

substantial rights; and (4) the error must have seriously affected the fairness, integrity, or public

reputation of the proceedings. Lawrence, 735 F.3d at 401. “Meeting all four prongs is difficult,

‘as it should be.’” Puckett v. United States, 556 U.S. 129, 135 (2009) (quoting United States v.

Dominguez Benitez, 542 U.S. 74, 83 n. 9 (2004)). A conviction should be reversed under plain-

error review only in exceptional circumstances, such that the trial judge would be deemed

derelict in having countenanced the unobjected-to misconduct. United States v. Boyd, 640 F.3d

657, 669 (6th Cir. 2011).

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       Applying the above standards, we find that the Bentons’ prosecutorial misconduct claim

comes up woefully short. Counts one and two charged the Bentons with misrepresenting the

value of their personal property holdings when they filed for relief from their indebtedness in

Chapter 13 bankruptcy. In explaining this charge to the jury during his opening statement,

counsel for the government stated as follows:

              Schedule B, the Bentons declared their personal property. Now, lots of
       categories of personal property. Personal property means anything except your
       house and land. One of the categories is vehicles. The Bentons said they had a
       Yukon which they said was worth $2,500. And they said they had a Trailblazer
       that was worth a $1,000. And then also in the same schedule, they said they had
       household goods, et cetera, worth a total of $1,750. Now, that includes their
       clothing, their lawnmower, everything in their house. Basically, everything that
       could burn up in a fire, they said, was worth $1,750.

R. 99, Trial Tr. Vol. 2, Page ID 2087 (emphasis added). Just a year after the bankruptcy court

had approved the Bentons’ plan, counsel continued, the house they were renting and its contents

were destroyed by fire. Following the house fire, counsel explained that the Bentons submitted

an insurance claim for damage to their household goods:

       And that claim was that those goods were worth $277,000 in round numbers.
       Now, they had told the bankruptcy court that their household goods were worth
       $1,750. They tell State Farm, it was on the order of two hundred times that
       money.

Id., Page ID 2090. Thus, counsel’s characterization of personal property in the household goods

category as “everything that could burn up in a fire,” far from being “improper,” appears to have

been entirely appropriate, given the facts of the case. For it was the Bentons’ insurance claim

that they’d lost nearly $277,000 worth of personal property in the house fire (a claim that was

satisfied by State Farm up to the policy limit of $200,250) that strongly impugned the accuracy

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of their bankruptcy filing estimate just over a year earlier that they owned only $1,750 worth of

personal property.2

       Counsel repeated this characterization in his questioning of the Bentons’ bankruptcy

lawyer, Melissa DiGiamberdine, regarding the Bentons’ Schedule B listing of their personal

property holdings. To distinguish items of personal property properly included in the listing

(such as household goods) from items of personal property properly omitted (like money held in

bank accounts not maintained at the residence), counsel referred to the latter as “not things that

could burn up.” Id., Page ID 2217. This characterization was not strictly necessary, but neither

was it improper. Given that counsel had used the characterization, appropriately and without

objection, in his opening statement, it was a sensible way of distinguishing between types of

personal property in eliciting clear testimony from the Bentons’ attorney.

       Granted, counsel’s use of the characterization four times during closing arguments was a

bit much. R. 104, Trial Tr. Vol. 7, Page ID 2873–74, 2887. Yet, no objection was made. We

can hardly hold this use of a shorthand label that had become a matter of convention in the trial

was so flagrantly improper as to warrant a finding that the trial judge was derelict in failing to

strike the references.

       But the Bentons insist it’s not that simple. In addition to the “everything that could burn

up” comments, they point to other references tending to show a pattern, a deliberate effort to

improperly influence the jury. Early in his opening statement, they contend, counsel for the

government used a gratuitous illustration to subtly inject the notion of arson into the jurors’

       2
         The Bentons’ claim for personal property lost in the fire was supported by a 56-page
spreadsheet detailing their extensive possessions, see R. 101, Trial Tr. Vol. 4, Page ID 2423–29,
which stood in marked contrast to the personal property listing filed in the bankruptcy court.
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Case Nos. 16-1774/1775, United States v. Benton, et al.

thinking. In relation to the count three mail fraud charge, counsel used the illustration to explain

the concept of an “insurable interest”:

              Agent Jones may think I’m a pretty reckless driver and she may think that
       the chances are excellent that in the next year or two, Haviland [i.e., Assistant
       U.S. Attorney Robert Haviland] is going to be driving so badly that he is going to
       crash his car. So she might think, well, gee, why don’t I just take out insurance
       on Haviland’s car and when he does the inevitable and crashes it, I will collect the
       money.

                Well, you know that it doesn’t work that way. She cannot take out
       insurance on my car because she has no insurable interest in my car. If I crash my
       car, I lose and in order to avoid that risk, I am required to get insurance on my car.

              In exactly the same way, if -- if some of you perhaps know a neighbor
       who is a reckless smoker, sooner or later that person is going to burn their house
       down. You cannot take out insurance on their house and hope that they are going
       to burn the house down. Because you don’t have any insurable interest in their
       house. If their house burns down, you haven’t lost anything.

             That’s the concept of insurable interest.        You can’t get insurance on
       somebody else’s property.

R. 99, Trial Tr. Vol. 2, Page ID 2084. The Bentons concede the illustration was “plainly

pertinent” to explain the concept of insurable interest in relation to the mail fraud charge, but

suggest the choice of the illustration was not merely “adversarial rhetoric.”

       Without meaning to question government counsel’s “morals or honesty,” they point to

the government’s post-verdict objection to the original presentence report. The government

suggested the base offense level for both defendants should be increased because a

preponderance of the evidence showed the fire was deliberately set for the purpose of obtaining

insurance benefits.    Though they acknowledge that the objection was later withdrawn, the

Bentons imply that the objection smacks of a purpose to suggest suspicion of arson during the

earlier trial proceedings.

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        We remain unpersuaded. The Bentons’ suspicions about a nefarious scheme aside, the

fact remains that the comments now complained of did not have sufficient potential to mislead

the jury or prejudice the defense to even prompt an objection from either of their attorneys

during trial. This is likely due to the fact that each of the questioned comments, as the Bentons

concede, had a legitimate purpose in the trial. Even if it was not strictly necessary for the

prosecution to use the characterizations it did, the comments were not clearly improper. Nor

have the Bentons shown that their substantial rights were adversely affected or that the fairness

of the trial was seriously undermined. In sum, this case does not present the exceptional

circumstances that warrant relief under plain-error review.

       B. Sufficiency of Count Four Evidence Against Desi Benton

       At the close of the proofs, Desi Benton moved for judgment of acquittal on the count four

bankruptcy fraud charge against her. The count four charge is based on the Bentons’ August 12,

2011, bankruptcy court filing. In that filing, the Bentons falsely attributed their default in

making required payments to having been evicted from the Jamestown Place house due to

foreclosure, without mentioning that the house had been destroyed by fire two months earlier.

Desi Benton maintained there was no evidence of her involvement in that particular

misrepresentation: she did not sign the document prepared by the Bentons’ attorney, and the

evidence showed the information in the document was provided exclusively by Roscoe Benton.

The district court called this “a closer question”—i.e., closer than the question posed by Roscoe

Benton’s motion—but denied Desi’s motion as well.

        We review the denial of a motion for judgment of acquittal de novo, but we must

consider the evidence in the light most favorable to the prosecution. United States v.

Cunningham, 679 F.3d 355, 370 (6th Cir. 2012). We may not reweigh the evidence, reevaluate

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the credibility of witnesses, or substitute our judgment for that of the jury. Id. The conviction

must be upheld if “any rational trier of fact could have found the essential elements of the crime

beyond a reasonable doubt.” Id. (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979)). This

standard is so demanding that a defendant who challenges the sufficiency of the evidence is said

to face “a nearly insurmountable hurdle.” Davis v. Lafler, 658 F.3d 525, 534 (6th Cir. 2011)

(en banc) (quoting United States v. Oros, 578 F.3d 703, 710 (7th Cir. 2009)).

       In denying the motion from the bench, the district court recited the elements of the

offense provided in the jury instructions:

               And those elements include the following: That the defendant knowingly
       participated in, devised or intended to devise a scheme to defraud. Second, that
       the defendant knowingly made or caused a materially false or fraudulent
       representation to be made in relation to a bankruptcy proceeding. Third, that the
       defendant made or caused to be made such materially false or fraudulent
       representation for purposes of executing or concealing a scheme to defraud.
       Fourth, that the defendant acted with intent to defraud. Those are the elements
       that need to be proven to prove a violation of bankruptcy fraud.

R. 104, Trial Tr. Vol. 7, Page ID 2825–26; R. 35, Jury Instr. 2.02, Page ID 128. The court

acknowledged Desi Benton’s argument based on the second element that there was no evidence

that she “knowingly made or caused” the materially false or fraudulent representation contained

in the August 12, 2011 filing. But the court recognized that the August 12 filing was part of a

larger scheme to defraud in which, the evidence showed, “the Bentons were working together,

that they were cooperating with one another as a team.” R. 104, Trial Tr. Vol. 7, Page ID 2826–

27.

       Desi Benton contends the district court erred . She insists the misrepresentation charged

in count four must be found within the four corners of the August 12 filing. She does not dispute

the notion that the filing contains a materially false explanation, but contends the evidence

showed that the contents of the document were supplied exclusively by her husband. This

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argument is based on a plausible reading of count four and the record evidence. But the

argument neglects the standard of review the district court was obliged to apply. That is, the

argument is not so compelling as to warrant the finding that no reasonable juror could have

found her guilty.

       We note that the August 12 filing, on its face, purports to be made on behalf of “the

Debtor, Roscoe and Desi Benton, by and through their attorney.” R. 109, Debtor’s Response,

Page ID 3200. This, in itself, is some evidence of Desi Benton’s involvement that the jury was

obliged to consider. The facts that Desi did not sign the document and did not physically

participate in the meeting between Roscoe and their attorney do not compel a finding that she did

not participate in the misrepresentation. There was, after all, no evidence that Desi disagreed

with or disavowed the contents of the August 12 filing.

       Among other things suggesting Desi Benton’s involvement, as the district court noted,

was the Bentons’ October 17, 2011 bankruptcy court filing, the Notice of Voluntary Conversion.

This document was signed (electronically) by both Bentons. It complemented the August 12

filing by implementing its stated purpose and contains statements that could also be found to be

misrepresentations or material omissions. The court reasoned:

       [A] reasonable juror could conclude that although Ms. Benton was not, according
       to Mr. Sefcovic, a participant in the meetings that occurred prior to this debtor's
       motion, this Debtor’s Response to a Motion to Dismiss, a reasonable juror could
       conclude that Ms. Benton was nevertheless aware of the scheme to present false
       information to the bankruptcy court.

R. 104, Trial Tr. Vol. 7, Page ID 2828.

       Desi Benton correctly argues that mere awareness of the scheme is insufficient. Yet, a

fair reading of the trial court’s bench ruling discloses that it did not rely solely on evidence of

Desi’s awareness. Rather, the court effectively accepted the government’s position that Desi’s

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involvement in the October 17 filing evidenced her awareness and ratification of the August 12

filing. See R. 103, Trial Tr. Vol. 6, Page ID 2811–12.

       In response to a sufficiency-of-the-evidence challenge, the government “may meet its

burden through circumstantial evidence alone, and such evidence need not exclude every

possible hypothesis except that of guilt.” United States v. Parkes, 668 F.3d 295, 302 (6th Cir.

2012) (quoting United States v. Jackson, 55 F.3d 1219, 1225 (6th Cir. 1995)). In an eight-day

trial that witnessed abundant evidence of Roscoe’s and Desi’s cooperation in an ongoing scheme

to defraud—including collaborative acts in furtherance of the scheme immediately before and

after the August 12 filing—there were ample grounds, as the district court noted, for the jury to

reasonably infer that Desi participated in the misrepresentation.3

       Accordingly, on de novo review, we find that Desi Benton has failed to overcome her

“nearly insurmountable hurdle.” We find no error in the district court’s denial of the motion for

judgment of acquittal.

                                                III

       Having thus duly considered each of appellants’ challenges and finding no error, we

AFFIRM the judgments.

       3
          Desi Benton notes that, insofar as the district court, at one point, characterized the
material misrepresentation as a “material omission,” R. 104, Trial Tr. Vol. 7, Page ID 2827, there
is an open question whether mere “omissions” or “concealment”—in contrast to affirmative
misrepresentations—can make out a bankruptcy fraud violation under 18 U.S.C. § 157(3). This
is a question we need not address. As Desi Benton concedes, the jury instructions, without
objection from the parties, allowed the jury to find the “false or fraudulent representation”
element satisfied by evidence of “half-truths and the knowing concealment of material facts.”
R. 35, Jury Instr. 2.02, Page ID 129.
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