382 F.3d 1110 (11th Cir. 2004), 01-17064, United States v. Blankenship

Docket Nº:01-17064.
Citation:382 F.3d 1110
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Randy W. BLANKENSHIP, Tammy J. Blankenship, a.k.a. Tammy Blankenship Northrup, a.k.a. Tammy Northrup, a.k.a. Tammy Owens, Tarand Transport, Inc., Howard L. Glover, Defendants-Appellants.
Case Date:August 26, 2004
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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382 F.3d 1110 (11th Cir. 2004)

UNITED STATES of America, Plaintiff-Appellee,

v.

Randy W. BLANKENSHIP, Tammy J. Blankenship, a.k.a. Tammy Blankenship Northrup, a.k.a. Tammy Northrup, a.k.a. Tammy Owens, Tarand Transport, Inc., Howard L. Glover, Defendants-Appellants.

No. 01-17064.

United States Court of Appeals, Eleventh Circuit

August 26, 2004

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William Frederic Jung, Black & Jung, Frank William Zaremba, Asst. Federal Public Defender, Tampa, FL, Craig L. Crawford, R. Fletcher Peacock, Federal Public Defender, Orlando, FL, for Defendants-Appellants.

Linda Julin McNamara, Tampa, FL, for Plaintiff-Appellee.

Appeals from the United States District Court for the Middle District of Florida.

Before TJOFLAT and BLACK, Circuit Judges, and GOLDBERG[*], Judge.

TJOFLAT, Circuit Judge:

The defendants in this case--Randy Blankenship, Tammy Blankenship, Howard Glover, and Tarand Transport, Inc.--were convicted of a variety of federal offenses stemming from an affirmative action fraud scheme they perpetrated regarding federally funded road construction projects. We conclude that the district court acted properly in conducting a joint trial of the defendants and that the defendants did not suffer undue prejudice due to the prosecution's closing arguments to the jury. However, we reverse the Blankenships' convictions for money laundering and most of Glover's convictions for making false statements, and remand this case to the district court so that the defendants may be resentenced.

I.

Because the defendants are challenging their convictions, we interpret the facts in the light most favorable to the government. See United States v. Pendergraft, 297 F.3d 1198, 1200 n. 1 (11th Cir. 2002). The Florida Department of Transportation (the "FDOT") received grants from the United States Department of Transportation (the "USDOT") to subsidize construction of Interstate Highway 4 ("I-4"). As a condition of receiving these grants, the FDOT was contractually obligated to ensure that at least 12% of the USDOT's funds ultimately went to "disadvantaged business enterprises" ("DBEs"). A DBE is a small firm owned and controlled by a woman or minority. See Fla. Admin. Code Ann. § 14-78.002(9).

The construction of I-4 was broken down into several smaller segments, including the "3430 project" and the "3431 project." The FDOT contracted with Granite Construction, one of the largest construction companies in the nation, to be its prime contractor on both projects. As part of its agreement with the FDOT, Granite was required to ensure that at least 12% of its subcontracts for both projects were set aside for DBEs. To help fulfill this requirement, Granite hired H.J. Trucking, a licensed DBE owned by Howard Glover (an African-American) to provide hauling services at the 3431 project construction site.

H.J. Trucking, however, never owned more than one dump truck or had any

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employees, and so was unable to perform such a large project. Consequently, Glover entered into an oral agreement with Randy and Tammy Blankenship ("the Blankenships"), who owned Tarand Transport, Inc. The Blankenships agreed to use Tarand's equipment and employees to do all the work on the 3431 project, while making Granite believe that it was being done by H.J. Trucking. Tammy Blankenship prepared various documents, including EEO forms, subcontracts, leases, and certified payroll records, to help foster the appearance that H.J. Trucking's employees and owner-operators1 were performing the hauling at the construction sites, when the people doing the work were really under Tarand's control.2

Glover gave Granite the address of Tarand Transport as H.J. Trucking's address, to which Granite sent its payments for the 3431 project. The checks Granite sent to H.J. Trucking's purported address were, appropriately enough, made out to H.J. Trucking. To cash these checks, Randy Blankenship opened an account at his bank in the name of "Randy Blankenship d/b/a H.J. Trucking." He would then deposit the checks into this account, and within a day withdraw most or all of the deposited funds and deposit them into Tarand's account. The Blankenships kept most of this money, giving Glover a payment each month for using his DBE license.

As this plan was being executed, Randy Blankenship (posing as an H.J. Trucking representative) entered into another agreement with Granite to have H.J. Trucking provide hauling services on the 3430 project as well. Blankenship signed Glover's name to the contract and submitted a variety of documents to Granite to make it seem as if H.J. Trucking was actually performing the work on this project, although it was really being done by Tarand. The record does not suggest that Glover knew anything of this second project; Granite sent payment directly to the address it had been given for H.J. Trucking (which, as noted above, was really Tarand's address). Tammy Blankenship prepared several documents in connection with the 3430 project to make it appear as if H.J. Trucking, rather than Tarand, was fulfilling this contract, as well.

For reasons not apparent from the record, Glover went to the authorities and confessed to his involvement with the Blankenships regarding the 3431 project. A federal grand jury thereafter returned a multicount indictment against the Blankenships, Tarand, and Glover. Count 1 charged Glover, the Blankenships, and Tarand with violating 18 U.S.C. § 3713 for

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conspiring to defraud the federal government with regard to the 3431 project. Counts 4 through 154 charged these same parties under 18 U.S.C. § 10015 with making various false writings that were intended to give Granite (and, ultimately, the USDOT) the impression that H.J. Trucking, and not Tarand, was coordinating the work on the 3431 project. Among the allegedly false writings were subcontracts6 and leases7 that H.J. Trucking had entered into that made it appear that H.J. Trucking had the employees and equipment necessary to fulfill its responsibilities. These counts also included the false wage and hour records provided by H.J. Trucking that made it appear as if the people working on the project 3431 construction site were affiliated with H.J. Trucking instead of Tarand.8 Glover, the Blankenships, and Tarand were also charged with three counts of mail fraud under 18 U.S.C. § 1341 (counts 20-22), because Granite mailed H.J. Trucking (really Tarand) three separate checks as payment for the 3431 project.9

Count 2 of the indictment charged the Blankenships and Tarand with another violation of 18 U.S.C. § 371 for conspiring to defraud the United States government about the 3430 project.10 Counts 16-19 charged the Blankenships and Tarand with making false statements in violation of 18 U.S.C. § 1001 to conceal their fraud regarding the 3430 project.11 Specifically, they were charged with forging Glover's name on the subcontract for the 3430 project purportedly between Granite and H.J. Trucking,12 as well as submitting false wage and hour records.13 Counts 23-25 of the indictment charged them with mail fraud under 18 U.S.C. § 1341 because Granite separately mailed them three checks as payment for the 3430 project.14

The remainder of the indictment focused on Randy Blankenship's bank transactions. Count 3 of the indictment charged the

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Blankenships and Tarand under 18 U.S.C. § 1956(h) with conspiracy to launder money.15 Counts 26-34 went on to charge them with various acts of money laundering under 18 U.S.C. § 1956(a)16 for transactions associated with the H.J. Trucking account Randy opened.

The defendants pled not guilty to each count. They were tried together, and with the exception of counts 4,17 8,18 and 9,19 the jury found them guilty as charged. Following sentencing, the defendants took these appeals.

This opinion is organized as follows. In Part II, we assess the defendants' claims that the district court abused its discretion in conducting a joint trial, rather than granting their motions for severance. Part III examines Glover's argument that the Government, in its closing argument to the jury, impermissibly commented on his decision not to testify. Part IV considers the sufficiency of the evidence to support the Blankenships' money laundering convictions under counts 26-34 (and, by extension, their conviction for conspiracy to commit money laundering under count 3), while Part V looks to the legitimacy of the defendants' convictions under counts 5-15 for making false statements.

II.

Glover and the Blankenships filed two joint pretrial motions to have their trials severed from each other, claiming that their defenses were mutually antagonistic. Midtrial, the Blankenships made what they labeled a third motion for severance.20 The district court denied all of these motions.

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The permissibility of joint trials is governed by Rules 8 and 14 of the Federal Rules of Criminal Procedure. Rule 8(b) states that two or more defendants may be charged in the same indictment or information "if they are alleged to have participated in the same act or transaction, or in the same series of acts or transactions, constituting an offense or offenses." Fed.R.Crim.P. 8(b). Because neither party challenges the structure of the indictment under this rule, we need not consider it.

Rule 14(a) states, "If the joinder of offenses or defendants in an indictment, an information, or a consolidation for trial appears to prejudice a defendant or the government, the court may order separate trials of counts, sever the defendants' trials, or provide...

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