USA. v. Vinyard

• Decision Date: 08 May 2001
• Docket Number: No. 00-4442,00-4442
• Citation: 266 F.3d 320
• Parties: (4th Cir. 2001) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. MICHAEL CHARLES VINYARD, Defendant-Appellant. Argued:
• Court: U.S. Court of Appeals — Fourth Circuit

Page 320

266 F.3d 320 (4th Cir. 2001)

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. MICHAEL CHARLES VINYARD, Defendant-Appellant.

No. 00-4442

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

Argued: May 8, 2001

Decided: September 11, 2001

Appeal from the United States District Court for the District of South Carolina, at Florence. Cameron McGowan Currie, District Judge.

(CR-99-429)

[Copyrighted Material Omitted] COUNSEL ARGUED: Robert Eugene Breckenridge, II, JOHNSON, HESTER, WALTER & BRECKENRIDGE, L.L.P., Ottumwa, Iowa, for Appellant. Thomas Ernest Booth, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: J. Rene Josey, United States Attorney, Alfred W. Bethea, Jr., Assistant United States Attorney, District of South Carolina, for Appellee.

Before NIEMEYER, WILLIAMS, and KING, Circuit Judges.

Affirmed by published opinion. Judge King wrote the opinion, in which Judge Niemeyer and Judge Williams joined.

OPINION

KING, Circuit Judge:

Michael Vinyard was convicted by a jury in the District of South Carolina of fourteen counts of mail fraud and twelve counts of money laundering. He was sentenced to seventy months imprisonment, followed by three years of supervised release, and ordered to pay restitution in a sum exceeding $1.4 million. In his appeal, Vinyard challenges the validity of his convictions and sentence. For the reasons explained below, we affirm.

I.

Michael Vinyard ("Michael"), a practicing attorney in Iowa, was invited by his brother, James Vinyard ("James "), in the fall of 1990, to enter into a joint business venture. At that time, James was employed in South Carolina by the Sonoco Products Corporation ("Sonoco"). Sonoco's high density film products division, which manufactures plastic grocery bags, had decided to explore opportunities to use recycled materials, and had installed James as Recycling Manager. Believing that it would be most efficient to handle Sonoco's recycling efforts internally, James actively campaigned to form a new recycling division within the company, which he proposed to head. Sonoco, however, did not want the industry or consumers to know that it was using scrap or recycled materials, and instead it directed James to employ an independent broker to research potential sources of recycled resins and to negotiate deals for Sonoco on a confidential basis. Rather than locate such a broker, James devised a more personally lucrative solution: the creation of his own brokerage. James enlisted the services of his brother, Michael, and together they created the entity Charles Stewart Enterprises ("CSE"). CSE was incorporated in the State of Iowa, with the incorporation documents naming Michael's law partner as the incorporator and President.

James took charge of CSE's operations from its inception, while administrative matters were relegated to Michael. Michael's responsibilities consisted chiefly of providing CSE with office space in his law firm, arranging the installation of separate phone and fax lines, and retaining secretarial and accounting services. ¹ Under James's direction, CSE presented itself to Sonoco and plastic vendors as an independent broker; it purchased recycled resins from various vendors and sold them to Sonoco, collecting a commission on each sale. Sonoco was led to believe that Charles Stewart was an actual person at CSE and also that CSE was a legitimate broker of recycled plastic pellets that could provide such pellets at the lowest possible price. In addition to its brokering operations, CSE became involved in the enterprise of collecting used grocery bags from Sonoco customers and selling them for an unlawful commission (i.e., a kickback) to companies that would reuse or recycle them. Between 1991 and 1997, Sonoco paid CSE over $12 million, yielding the brokerage a net profit of more than $2.8 million.

In carrying out the fraud scheme, James consistently misrepresented the relationship between CSE and Sonoco. He advised outside vendors that CSE had been established to protect Sonoco's confidentiality, with Sonoco's full knowledge. Similarly, CSE employees Brenda Westvold and Martha Harrison were told that Sonoco was aware of James's involvement in CSE, but they were warned not to disclose the Vinyard name to others. Both James and Michael funneled their CSE earnings through another entity, Birchwood Enterprises, so that there would be no mention of CSE on their income tax returns.

In April 1997, a disgruntled CSE client informed Sonoco of James's practice of exacting unlawful commissions in the resale of used Sonoco bags. An investigation followed, leading to the discovery of James and Michael's CSE operation and the issuance, on May 15, 1999, of an indictment charging Michael Vinyard with multiple counts of mail fraud and money laundering.² More specifically, the indictment charged that Michael "knowingly and willfully did devise and intend to devise a scheme and artifice to defraud Sonoco . . . out of (1) the intangible right of honest services of its employee, James Stewart Vinyard, and (2) out of money and property[.]" J.A. 14. The indictment also alleged that Michael had established CSE in cooperation with James, and that they had utilized CSE to overcharge Sonoco for recycled plastic pellets, "keeping the amount of the `mark up' for themselves." J.A. 15. Additionally, the indictment alleged that Michael and James caused Sonoco to pay substantial fees to them in connection with its grocery bag collection program, even though James bore a preexisting duty to handle the recycling program in his capacity as a Sonoco employee.

In response to the threat of prosecution for mail fraud and money laundering, James pleaded guilty, cooperated with the Government, and testified against Michael. Following a jury trial in August 1999, Michael was convicted of fourteen counts of mail fraud and twelve counts of money laundering. Michael was sentenced to seventy months imprisonment, ordered to pay $1,418,419.65 in restitution, and directed to serve three years of supervised release. He timely filed this appeal, and we possess jurisdiction pursuant to 28 U.S.C. S 1291.

II.

Michael Vinyard assigns multiple errors to the proceedings in the district court. First, and most fundamentally, he challenges the applicability of the federal mail fraud statute to his case. Michael asserts that his conduct cannot violate 18 U.S.C. SS 1341 and 1346, because he neither intended to cause economic harm, nor caused actual economic harm, to Sonoco. Although Michael contends that he is challenging the district court's denial of his motion to dismiss the mail fraud charges, his argument more substantively constitutes a challenge to the denial of his motion for judgment of acquittal. See Fed. R. Crim. P. 29. In any event, the specific ruling he is contesting is not controlling, because we would affirm the district court in both situations.

We review challenges to the sufficiency of an indictment de novo, and we review the denial of a motion for judgment of acquittal for whether, when viewed most favorably to the Government, there is sufficient evidence to sustain a conviction on the charge in question. United States v. Butler, 211 F.3d 826, 829 (4th Cir. 2000); United States v. Darby, 37 F.3d 1059, 1062 (4th Cir. 1994); see also United States v. Glasser, 315 U.S. 60, 80 (1942) ("It is not for us to weigh the evidence or determine the credibility of witnesses. The verdict of the jury must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it.").

Second, Michael asserts that he was denied a fair trial because of prosecutorial misconduct. Specifically, he posits that the prosecution suppressed material, exculpatory evidence in violation of Brady v. Maryland, 373 U.S. 83 (1963), and that the prosecution made use of evidence at trial that the prosecutor had agreed would not be presented.³ Because Michael failed to raise either of these issues in the district court, we review these contentions for plain error. See Fed. R. Crim. P. 52(b); United States v. Fisher, 58 F.3d 96, 100 (4th Cir. 1995). To meet the standard of review for plain error, Michael must demonstrate to us that there was (1) an error, (2) that it was plain, and (3) that it affected substantial rights. United States v. Olano, 507 U.S. 725, 732 (1993)(construing the requirements of Fed. R. Crim. P. 52(b)). Furthermore, the correction of plain error lies within the discretion of this Court, and is not to be exercised "unless the error `seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings.'" Id. (quoting United States v. Young, 470 U.S. 1, 15 (1985)).

Third, Michael contends that his sentence violated the Sentencing Guidelines because the district court misapplied the Guidelines' loss enhancement provisions. When addressing an application of the Guidelines, we review the district court's "factual findings for clear error and legal interpretations de novo." United States v. Colton, 231 F.3d 890, 911 (4th Cir. 2000).

Fourth, Michael contests the validity of the district court's order of restitution. Although he does not challenge the magnitude of the restitution award, Michael asserts that the payment schedule developed by the court did not properly consider his financial status and prospects as required by the Mandatory Victims Restitution Act of 1996 (MVRA). We review a district court's order on restitution for an abuse of discretion. United States v. Henoud, 81 F.3d 484, 487 (4th Cir. 1996).

Fifth, Michael contends that he was denied a fair trial due to ineffective assistance being rendered by his counsel. Such claims are reviewed on direct appeal "if and only if it conclusively appears from the record that his attorney did not provide effective assistance." United States v. Martinez, 136 F.3d 972, 979 (4th Cir. 1998); United States v. Smith, 62 F.3d 641, 651 (4th Cir. 1995). Inef...