17 F.3d 865 (6th Cir. 1994), 93-5373, United States v. Griffith
|Citation:||17 F.3d 865|
|Party Name:||UNITED STATES of America, Plaintiff-Appellee, v. Steven Lynn GRIFFITH, Defendant-Appellant.|
|Case Date:||February 28, 1994|
|Court:||United States Courts of Appeals, Court of Appeals for the Sixth Circuit|
Argued Nov. 12, 1993.
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Joseph M. Whittle, Terry Cushing (argued) and Alan E. Sears (briefed), Asst. U.S. Attys., Office of the U.S. Atty., Louisville, KY, for plaintiff-appellee.
Mark A. Smedal, John L. Smith (argued and briefed), John H. Harralson, III (briefed), Alagia, Day, Trautwein & Smith, Louisville, KY, Julian M. Carroll, Frankfort, KY and Charles B. Lembcke (argued), Datz, Jacobson, Lembcke & Garfinkle, Jacksonville, FL, for defendant-appellant.
Before: GUY and RYAN, Circuit Judges; and MILES, Senior District Judge. [*]
RYAN, Circuit Judge.
Steven Lynn Griffith appeals his conviction for conspiracy to commit wire fraud, mail fraud, and interstate transportation of property obtained by fraud; and for substantive counts of wire fraud; mail fraud; interstate transportation of property taken by fraud; bankruptcy fraud; and money laundering. He also challenges the district court's failure to grant a mistrial based on alleged juror misconduct and appeals the sentence imposed.
We must answer five questions: (1) Was there sufficient evidence to support the defendant's convictions for wire and mail fraud and transportation of fraudulently obtained goods, pursuant to 18 U.S.C. Secs. 1341, 1343, and 2314; (2) did the government properly aggregate shipments into a single violation of interstate transportation of goods taken by fraud, pursuant to 18 U.S.C. Sec. 2314; (3) was the inventory obtained through the defendant's fraud "criminally derived property" for purposes of the money laundering statute, 18 U.S.C. Sec. 1957; (4) did the district court abuse its discretion in failing to hold a more comprehensive hearing on potential juror misconduct; and (5) did the district court err in sentencing the defendant by imposing a supervisory role increase, and by rejecting
his self-rehabilitation as a basis for a downward departure.
In addition, the defendant challenges, on jurisdictional grounds, his conviction on four counts charging interstate shipment of property obtained by fraud.
We affirm all the challenged convictions except the four counts challenged on jurisdictional grounds and we affirm the sentence, with minor exceptions.
In the early 1980's, the defendant, Steven Griffith, entered into a business partnership with Terry Lea Griffith, his former and present wife. 1 The business revolved around credit sales of photographic equipment and film processing, and was operated under several names, including S & T Photo, Photo Mart, and Griffith Acceptance which handled the chattel paper created by the sales contracts. All of the businesses were headquartered in Paducah, Kentucky.
Terry Griffith was primarily responsible for handling the books, and the defendant handled organizational and sales responsibilities. The partnership did approximately $1.36 million in gross sales in 1985, and $1.16 million in 1986.
Things began to change, however, in 1987. The partnership closed down distributorships in sales territories that had "run dry." Gross sales for 1987 plummeted by more than one-third, to less than $800,000. At about the same time, the Griffiths' primary lender, Bank of Paducah, called in the partnership's $550,000 credit line. In the last quarter of 1987, the defendant and Terry Griffith agreed to the bulk sale of the partnership's commercial paper, to reduce outstanding indebtedness to $185,500. In addition, the Griffiths agreed to convert the partnership's balance to long-term debt.
In the meantime, the partnership was branching out. In January 1988, the defendant and Terry Griffith met Joseph Salamon, a manufacturers' representative who sold primarily to home shopping networks and mail order companies. En route to a consumer electronics show in Las Vegas, the Griffiths told Salamon that "they were in direct ... marketing of goods to consumers on a door-to-door basis and that they also were acting as a distributor for certain companies or manufactures [sic]." During the course of the conversation, the defendant mentioned that he might have some merchandise for sale.
Later that month, the defendant told Salamon that he was interested in selling 100 Fuji 35-millimeter cameras of a recently discontinued vintage. The defendant also told Salamon he would like to sell a large number of VCRs, perhaps as many as 1,000 units. Salamon subsequently arranged to sell the cameras to a home shopping network.
At about the same time the defendant was negotiating with Salamon, the partnership was stepping up its ordering activity. On January 26, 1988, the Griffiths telephoned a $47,000 order to Fuji Photo Film, U.S.A., for 300 Fuji AX-Multi-Program cameras with lenses and auto winders. In addition, Fuji received a February 25, 1988 letter from Terry Griffith advising that Photo Mart was expanding its product line and would be using Fuji as a credit reference. Terry Griffith wrote a similar letter to another creditor, Symphonic Corporation, and requested an additional credit line of $25,000, based on Photo Mart's projected need for monthly shipments of 125 VCRs. The Griffiths also contacted Kalimar, Inc., another established creditor, to request an increased credit line, and opened lines of credit with Elmo Manufacturing Corporation, Minolta Corporation, Yashica, Inc., Canon, U.S.A., Sansui, U.S.A., Chinon America, Inc., Ansco Photo Optical Products, Regency Electronics, Inc., Vivitar Corporation, Hart Distributing, and Major Distributing.
Dun & Bradstreet reporter William Harlow telephoned the defendant on March 4, 1988, for an annual financial performance update. Despite his knowledge of the partnership's poor 1987 financial condition, the
defendant informed Harlow that the partnership's 1987 gross sales exceeded previous years, totalling almost $2 million. Harlow was careful to obtain the requisite identifying information to ensure that he was talking to the defendant, and even called the defendant a second time to verify that the defendant had provided actual, rather than estimated, figures.
In addition to the defendant's misrepresentations to Harlow, the partnership took other steps to conceal its dismal financial picture. For example, along with its credit applications, the partnership forwarded outdated impressive 1986 financial statements, even though the defendant had possession of more recent, and much more ominous, financial reports. When a Minolta credit representative requested updated financial information, the defendant promised to send the more current statement within two weeks, but never did so. Even though by April 1, 1988, the partnership had stopped paying its inventory creditors and the dunning had started, the Griffiths continued to open new inventory accounts through at least April 8, 1988, and attempted to place inventory orders through May 20, 1988.
Meanwhile, in March and April 1988, the defendant was selling Symphonic VCRs in bulk to a home shopping network in Newport, Tennessee, at below-wholesale prices. He was also conducting business with Glen Ladenheim, sales manager for Mason Camera in New York. Ladenheim's "specialty [wa]s to try and find closeouts from major manufacturers or retailers, to buy them at favorable price[s] and resell them." Ladenheim, who had heard about the Griffiths from Salamon, called the defendant to ask if he had any merchandise to sell. The defendant responded that he was willing to sell cameras, VCRs, camcorders, and other merchandise. By April 5, 1988, Ladenheim and the defendant had negotiated the first of many deals, with the defendant agreeing to sell Ladenheim 200 of the Fuji camera kits that the partnership had purchased two months earlier. Ladenheim's cost was only $125 per unit, more than $40 below unit wholesale price. In payment, Ladenheim wire transferred more than $25,000 to a Photo Mart account at Peoples First National Bank in Paducah.
The Peoples account was one of several secret bank accounts opened by the defendant and Terry Griffith in April and May 1988. A subsequent wire transfer from Mason, in the amount of $40,000, provided additional funding for the Peoples account. This deposit was in partial payment for a $140,000 transfer of merchandise, which included more than 350 VCRs and 100-plus camcorders of various makes and models. The defendant personally made more than $25,000 in cash withdrawals from this account. In addition, Terry Griffith made cash withdrawals totalling $40,000 before closing the account in July 1988.
On April 26, 1988, the partners opened a second secret account, this one with City Bank of Carbondale, Illinois. Mason Camera made wire transfers totalling over $120,000 to this account in payment for large quantities of Fuji and other cameras, zoom lenses, camera bags, VCRs, microwave ovens, cordless telephones, and other items. The defendant personally withdrew more than $40,000 in cash from this account, and Terry Griffith made cash withdrawals totalling $80,000.
During May 1988, the partners opened similar accounts with King City Savings Bank and Peoples Bank, both in Marion, Illinois, and with City National Bank of Metropolis, Illinois. As with the first two accounts, these accounts received large cash infusions from below-wholesale purchasers, and were depleted by the Griffiths' cash withdrawals.
In the midst of these surreptitious financial transactions, on May 3, 1988, the defendant contracted with Lyon Van Lines to move his household goods from...
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