435 F.3d 612 (6th Cir. 2006), 04-5101, United States v. Blood

Docket Nº:George William BLOOD (04-5101) and Stephen L. Crittenden (04-5261), Defendants-Appellants.
Citation:435 F.3d 612
Party Name:UNITED STATES of America, Plaintiff-Appellee, v.
Case Date:January 24, 2006
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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435 F.3d 612 (6th Cir. 2006)

UNITED STATES of America, Plaintiff-Appellee,

v.

George William BLOOD (04-5101) and Stephen L. Crittenden (04-5261), Defendants-Appellants.

Nos. 04-5101, 04-5261.

United States Court of Appeals, Sixth Circuit.

January 24, 2006

Argued: Nov. 1, 2005.

Appeal from the United States District Court for the Middle District of Tennessee at Nashville. No. 02-00151—Thomas A. Higgins, District Judge.

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COUNSEL

ARGUED:

David L. Cooper, the Law Office of David L. Cooper, Nashville, Tennessee, Peter J. Strianse, Tune, Entrekin & White, Nashville, Tennessee, for Appellants.

Darryl A. Stewart, Assistant United States Attorney, Nashville, Tennessee, for Appellee.

ON BRIEF:

David L. Cooper, the Law Office of David L. Cooper, Nashville, Tennessee, Peter J. Strianse, Tune, Entrekin & White, Nashville, Tennessee, for Appellants.

Darryl A. Stewart, Assistant United States Attorney, Nashville, Tennessee, for Appellee. Before: MOORE and SUTTON, Circuit Judges; BUNNING, District Judge.[*]

OPINION

KAREN NELSON MOORE, Circuit Judge.

This case presents a question of first impression for this court: the meaning of the phrase "with intent to deceive another" found in 18 U.S.C. § 513(a), which prohibits possession of counterfeit and forged securities with this deceptive intent. The Defendants-Appellants George Blood and Stephen Crittenden appeal their convictions and sentences for violation of 18 U.S.C. § 513(a) on a number of grounds. Defendant Blood appeals his conviction based on insufficiency of the evidence, improper jury instructions, prosecutorial misconduct, judicial bias, and outrageous government conduct, and his sentence in light of United States v. Booker, 543 U.S. 220, 125 S.Ct. 738 (2005). Defendant Crittenden appeals his conviction based on insufficiency of the evidence and a faulty jury charge, as well as his sentence under Booker.

For the reasons set forth below, we AFFIRM the convictions on all grounds, VACATE the Defendants' sentences, and REMAND for resentencing of both Defendants consistent with Booker.

I. BACKGROUND

Defendants George Blood and Stephen Crittenden were two of five defendants named in a two-count indictment filed in the U.S. District Court for the Middle District of Tennessee on September 11, 2002. Count One of the indictment charged that Blood and Crittenden and several others aided and abetted each other in knowingly possessing and affecting commerce with $489,500 in counterfeit and forged securities ("the money orders") purportedly issued by the Travelers Express Company with the intent to deceive another person or organization in violation of 18 U.S.C. § 513(a) and § 2. Count Two of the indictment charged that Blood and Crittenden and others aided and abetted each other in knowingly possessing and affecting commerce with $1,550,000 in counterfeit and forged securities ("the cashier's checks") purportedly issued by the Union Bank of California with the intent to deceive another person or organization

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in violation of 18 U.S.C. § 513(a) and § 2.

In short, the investment plan in which the Defendants engaged began in June 2002 when Blood and Crittenden met in California with several men, including Vinnie Pham and Tah Kir "Tosh" Khraishi, who offered to sell them the money orders (purportedly issued by the Travelers Express Company, Inc.) and the cashier's checks (purportedly issued by the Union Bank of California) for less than their face value. Blood and Crittenden agreed to buy the securities. Shortly thereafter, Crittenden contacted an acquaintance, Jesse Phipps, to see if he wanted to participate in the transaction. After agreeing to make the investment, in June of 2002, Phipps contacted Lyle Smith to inquire into the propriety of the program and ways to improve the yield. Smith operated an "international recovery company" specializing in recovering investors' funds from off-shore investments that have been misplaced or misappropriated. After several conversations between Phipps and Smith, Phipps faxed Smith a copy of a money order to see if Smith was interested in making a purchase. Smith contacted Travelers Express, which notified Smith that the money order might be counterfeit. Smith then alerted the FBI to these fraudulent securities, reporting that there were approximately ten million dollars in fraudulent securities being transported, and the FBI decided to pursue the case, making Smith an FBI confidential informant.

Thereafter, Smith developed an investment program to bring Defendants from California to Nashville. Essentially, Smith proposed taking the counterfeit securities to a Nashville Bank for transmission to Cyprus1 for "hypothecation," which Crittenden's attorney described as "the trade practice for high yield investments of compounding the principal amount of the collateral at a rate of 100% interest per year." Crittenden Br. at 9-10. Smith shared his plan with Phipps, who discussed it with Crittenden, and Crittenden agreed to participate.

On July 2, 2002 Phipps, Crittenden, and Richard Neuman, who was hired by Crittenden to provide security, brought $200,000 worth of counterfeit money orders to Nashville and gave them to Smith. Smith testified that Phipps and Crittenden wanted Smith to give back the money orders or pay them $50,000. Smith instead kept the money orders without paying for them and turned them over to the FBI. Smith testified that he told Phipps and Crittenden at this meeting that the money orders were counterfeit. The following day, Smith tape recorded a conversation he had with Blood and Crittenden, both of whom wanted Smith to return the money orders he had received the day before. Smith testified that during this conversation he made clear that the money orders were counterfeit. Phipps also testified that, through his conversations with Blood and Crittenden, he was aware that they knew that the money orders and cashier's checks were fraudulent.

On August 13, 2002, Blood, Crittenden, Neuman, and Phipps returned to Nashville, bringing $300,000 worth of money orders and $1,500,000 worth of cashier's checks to Smith. Neuman testified that he saw Blood wipe his fingerprints off the fraudulent securities. Phipps and Neuman met Smith for the exchange and were arrested by the FBI. They immediately agreed to cooperate with the FBI to arrest Blood and Crittenden, and the FBI then arrested the Defendants.

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A representative from the Union Bank of California, the entity that purportedly issued the counterfeit cashier's checks, testified that her institution would not have honored the cashier's checks because of their glaring deficiencies. A representative from Travelers Express, the entity that purportedly issued the forged money orders, similarly testified that if the money orders had been presented for payment, they would have been returned unpaid, both because they were subject to a stop payment and because they were obviously forged.

Blood and Crittenden were tried by a jury and, on July 2, 2003, were found guilty on both counts of the indictment. The Defendants then filed a motion for judgment of acquittal, or, in the alternative, for a new trial; these motions were denied. In early 2004, Blood and Crittenden were sentenced, Blood to a term of sixty months followed by three years of supervised release and Crittenden to a term of seventy-eight months followed by three years of supervised release. They now challenge the judgments as well as the sentences imposed by the district court.

II. ANALYSIS

A. Insufficiency of the Evidence

" 'This court will reverse a judgment for insufficiency of evidence only if this judgment is not supported by substantial and competent evidence upon the record as a whole ....' " United States v. Chavis, 296 F.3d 450, 455 (6th Cir. 2002) (quoting United States v. Beddow, 957 F.2d 1330, 1334 (6th Cir. 1992)). We must uphold a jury verdict if " 'viewing the evidence in the light most favorable to the prosecution, 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)).

The Defendants' first challenge to the sufficiency of the evidence is based on their claim that the district court erred in its interpretation of 18 U.S.C. § 513(a). We review de novo a district court's statutory construction. United States v. Morgan, 216 F.3d 557, 561-62 (6th Cir. 2000). The provision under which the Defendants were convicted reads:

Whoever makes, utters or possesses a counterfeited security of a State or political subdivision thereof or of an organization, or whoever makes, utters or possesses a forged security of a State or political subdivision thereof or of an organization, with intent to deceive another person, organization, or government shall be fined under this title or imprisoned for not more than 10 years, or both.

18 U.S.C. § 513(a). The gravamen of Defendants' insufficiency of the evidence claim is their contention that "with intent to deceive another person, organization, or government" means an intent to deceive an entity other than the one that purportedly issued the counterfeit or forged securities. Defendants argue that because the Government offered proof only of their intent to deceive Union Bank of California and Travelers Express Company, the purported issuers of the securities, Defendants were not found guilty of the requisite intent, and thus there was not sufficient evidence to convict them. The contours of § 513(a)'s intent-to-deceive requirement is a question of first impression for this...

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