U.S. v. Huber
| Decision Date | 21 April 2005 |
| Docket Number | No. 03-2510.,No. 03-2520.,No. 03-2517.,No. 03-2854.,03-2510.,03-2517.,03-2520.,03-2854. |
| Citation | 404 F.3d 1047 |
| Parties | UNITED STATES of America, Appellee, v. Duane HUBER, Appellant. United States of America, Appellee, v. Huber Farms, Inc., Appellant. United States of America, Appellee, v. Huber Farms General Partnership, Appellant. United States of America, Cross-Appellant, v. Duane Huber; Huber Farms, Inc.; Huber Farmers General Partnership, Cross-Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Irvin B. Nodland, argued, Bismarck, ND, for appellant.
Clare R. Hochhalter, Asst. U.S. Attorney, argued, Bismarck, ND, for appellee.
Before SMITH, BEAM, and COLLOTON, Circuit Judges.
Duane Huber, Huber Farms General Partnership (HFGP), and Huber Farms, Inc. (HFI) were convicted of violating various federal laws dealing with fraudulent statements to the government, tax fraud, and money laundering. The district court sentenced Huber to sixty-months' imprisonment, and it sentenced HFGP and HFI to terms of probation. The court also ordered that Huber forfeit approximately $5.9 million in the form of a money judgment for the money-laundering charge. The court declined to impose a fine or restitution on any defendant. Huber, HFGP, and HFI assign five errors to the district court in this appeal. Huber also appeals the forfeiture judgment. The government cross-appeals, assigning approximately eight sentencing errors. We affirm in part, reverse in part, and remand for resentencing.
Duane Huber, doing business as HFGP and HFI, operated a large farming operation in North Dakota. Steven Huber, Jeff Greff, Douglas Bergan, and Chad Bickett were involved with Huber in what Huber claimed was a "coordinated farming" operation. According to Huber, he, HFGP, and HFI facilitated these individuals' farming efforts by renting or sub-leasing land to them, providing the machinery that was used on their farms, providing the labor force that worked the land, and cosigning the individuals' operating notes. Like many farmers, Steven Huber, Greff, Bergan, and Bickett enrolled in the federal farm program by submitting a form (Form 502) to the local Farm Services Administration (FSA) office, representing their eligibility to participate in the program.1 Once enrolled, these individuals could receive payments under a variety of federal-farm-program mechanisms. The four also insured their crops against loss through federally subsidized crop insurance, again representing their eligibility to purchase such policies. During the typical year, they received income from the government through the federal farm program, from private insurers through claims on their crop-insurance policies, and through grain sales. This money was then paid to Huber, HFGP, HFI, or third parties. Huber claimed these payments were for the land, machinery, and labor he provided to them.
The government viewed these four individuals' involvement with Huber's farming operation differently. According to the government, Huber enlisted them to defraud government programs of millions of dollars in benefits in the form of farm-program payments and federally subsidized crop-insurance benefits. This belief rested on the notion that these individuals were not eligible to receive such benefits because they had no farms of their own. More specifically, the government believed that the group had set things up to look as though they were eligible to enroll in the federal farm program — i.e, to look like they were "actively engaged in farming." Once the four had fraudulently enrolled by submitting false Form 502s, the government believed they funneled the ensuing farm-program payments (along with crop-insurance benefits and grain-sales proceeds) to Huber and others in the form of expenses — land, labor, machinery, etc. — the individuals never incurred. By structuring things this way, Huber could avoid the payment limitations that applied to him under the farm program. The government also believed that the crop-insurance benefits the four individuals received were fraudulently obtained because none of the them had an insurable interest in the crops they insured — i.e., they were ineligible to purchase federally subsidized crop-insurance policies. Finally, the government believed that Huber allocated expenses and income amongst the four individuals, Huber, HFGP and HFI as part of the scheme, violating various tax-reporting laws.
The government presented its case to a grand jury, which returned a twenty-count indictment, charging Huber, HFGP, and HFI with various violations of federal law. The indictment also included a forfeiture allegation. At trial, the government produced witnesses that were allegedly part of Huber's operation and experts on federal-farm-program and crop-insurance eligibility, as well as tax-reporting requirements. The jury found Huber, HFGP, and HFI guilty of all charges.
The jury, in a subsequent forfeiture proceeding, was also charged with determining the amount of funds involved in the conspiracy to launder money that was charged in Count Eighteen of the indictment. The jury concluded, by a preponderance of the evidence, that Huber was accountable for $5,876,970. This amount reflected the value of federal-farm-program payments, crop-insurance benefits, and crop-sales proceeds received by Greff, Bergan, Steven Huber, and Bickett from 1994 through 1999.
The district court sentenced Huber to sixty-months' imprisonment, declining to enhance Huber's sentence as requested by the government. And the district court entered a money judgment against Huber for the $5,876,970 the jury found should be forfeited.
Huber, HFGP, and HFI appeal their convictions. Huber also assigns error with regard to the forfeiture phase of the proceeding. The government cross-appeals with regard to sentencing.
Huber's brief2 raises approximately six assignments of error: the district court erred in concluding that (1) Dawn Rose's involvement in the investigation did not render her testimony or the evidence she helped procure inadmissible, (2) Rose's testimony about what Bergan told her was admissible, (3) Huber had not been selectively prosecuted, (4) sufficient evidence supported the jury's verdict, (5) the amount of the forfeiture judgment was proper, and (6) Huber's due process rights had not been violated by a late disclosure of incriminating evidence. Huber raised the first two purported errors below in an appropriate motion to suppress. The remaining claims were raised in a Rule 29 motion for a judgment of acquittal, but the only proper basis for such a motion is insufficient evidence of guilt. Fed.R.Crim.P. 29. The district court construed Huber's motion as one under Rule 33 (new trial) to the extent such a motion was the proper method of asserting his late-disclosure claim,3 and it addressed his selective-prosecution claim even though it was raised for the first time in the Rule 29 motion.
Dawn Rose kept Huber's books in conjunction with the farming operation. Special Agent Ward, the government's main investigating officer in Huber's case, approached her on August 5, 1999, and asked her some questions about Huber's operation. On that day, she offered to turn over the financial data she had in her possession. Agent Ward declined the offer, advising her to wait until he could present her with a grand-jury subpoena. He returned with that subpoena on August 9, 1999, along with an offer of immunity for her cooperation. Rose then gave him the information.
At trial the government offered evidence gleaned from this information — the allocation of expenses and income with regard to Huber and each of the individuals allegedly involved in the conspiracy. Huber moved to suppress the evidence and the court held a hearing out of the jury's presence. At that hearing, the district court questioned Rose extensively about her motivation to assist the government. She testified that she turned over the information voluntarily and that she collected no information at the government's behest. Even though she continued to enter data into the bookkeeping software from August 5 until August 9, she said she did this at Huber's direction.
The district court denied Huber's motion to suppress, citing a lower expectation of privacy in business records, the grand-jury subpoena, and inevitable discovery. The court concluded that Rose was not an agent of the government and "she was trying to protect herself." Huber renewed his challenge to the evidence in his Rule 29 motion. The district court again addressed the issue, restating its conclusion that Rose was not an agent of the government and, thus, the information she gave to the government was not obtained improperly under the Fourth Amendment.
Huber challenges the district court's ruling on his motion to suppress, claiming Rose was a government agent for purposes of the Fourth Amendment after she spoke with Agent Ward on August 5. We review the denial of a motion to suppress for clear error when the appellant challenges the district court's factfinding, and de novo with regard to its "interpretation of the protections afforded by the Fourth Amendment." United States v. Smith, 383 F.3d 700, 704 (8th Cir.2004). A private citizen's conduct4 can nonetheless implicate the Fourth Amendment if the private citizen is acting as a government agent. The Fourth Amendment analysis with regard to whether a private citizen acted as a government agent includes several factors — "whether the government had knowledge of and acquiesced in the intrusive conduct; whether the citizen intended to assist law enforcement agents or instead acted to further his own purposes and whether the citizen acted at the government's request." Id. at 705.
Agent Ward did ask Rose to turn over the data in her...
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