700 F.3d 713 (4th Cir. 2012), 11-5218, United States v. Day
|Citation:||700 F.3d 713|
|Opinion Judge:||WILKINSON, Circuit Judge:|
|Party Name:||UNITED STATES of America, Plaintiff-Appellee, v. Roger Charles DAY, Jr., Defendant-Appellant.|
|Attorney:||Richard Hans Maurer, Maurer/Song PC, Philadelphia, Pennsylvania, for Appellant. Ryan Scott Faulconer, Office of the United States Attorney, Alexandria, Virginia, for Appellee. Neil H. MacBride, United States Attorney, Alexandria, Virginia, Elizabeth C. Wu, Assistant United States Attorney, Office...|
|Judge Panel:||Before WILKINSON, KING, and SHEDD, Circuit Judges. Judge WILKINSON wrote the opinion, in which Judge KING and Judge SHEDD joined.|
|Case Date:||November 29, 2012|
|Court:||United States Courts of Appeals, Court of Appeals for the Fourth Circuit|
Argued: Oct. 26, 2012.
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Affirmed by published opinion.
Roger Day Jr. was convicted of wire fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering, and conspiracy to commit smuggling for his role as the mastermind of a multi-million dollar scheme to defraud the Department of Defense (" DOD" ). The crux of Day's scheme involved the knowing supply of defective and nonconforming spare parts for use in U.S. military aircraft, vehicles, and weapons systems. Many of these were " critical application items" — that is, parts whose failure could jeopardize the lives of military personnel and the success of military operations. The district court imposed a sentence of 105 years in prison along with substantial fines, forfeitures, and restitution. Day now appeals his convictions and sentence on a variety of grounds. Finding his arguments without
merit, we affirm the judgment of the district court.
In late 2004 and early 2005, Day began running a business scheme involving his then-girlfriend, Susan Crotty Neufeld, and his friends, Nathan Carroll and Greg Stewart. Acting at Day's direction, Neufeld, Carroll, and Stewart would set up companies that could bid on parts-supply contracts for the Defense Logistics Agency (" DLA" ), the agency within the DOD responsible for acquiring parts for the military services. Using Day's custom-designed software program, the companies would then bid en masse on low-dollar value DLA contracts. When one of the newly formed companies won a contract, Day would purchase the necessary parts and have them shipped to Neufeld or Carroll, who would in turn deliver the parts to a packaging company for shipping to the DLA to complete the contract. Day would then share a portion of the profit with the others.
The arrangement between Day and his co-conspirators lasted three years, during which the various companies secured some 987 contracts worth approximately $8,670,380.78. Like all too many get-rich-quick ideas, however, this scheme was too good to be true. The trick was in the parts: rather than delivering parts that complied with the exacting military specifications called for in the various contracts, Day would purchase similar sounding— yet cheaper and nonconforming— items. For example, instead of the special military aircraft dome antennas that were the subject of one contract, Day obtained and directed his co-conspirators to deliver ordinary citizens band radio antennas. Similarly, rather than the valuable infrared halogen light filters requested by the DLA for nighttime use on F-16 fighter jets, Day and his co-conspirators delivered noncomplying recessed lighting components. Fifty-nine percent of the contracts obtained during the scheme involved " critical application items," or items that the military had determined to be essential to weapon system operation or the safety of operating personnel. When all was said and done, Day purchased the various nonconforming parts for, on average, just 3.77% of the amount that he received back in payment from the government.
The success of Day's scheme was predicated on the fact that, due to issues of cost and efficiency, the DLA could not individually inspect each delivered part for quality assurance prior to paying out many of its contracts. Thus, instead of rejecting noncomplying parts upon receipt and refusing to make payment, the DLA typically punished companies who had shipped such parts by debarring them from winning future awards. Yet when the DLA identified the companies used by Day and his co-conspirators as the proper subject of debarment orders, Day circumvented those orders through the simple expedient of instructing his co-conspirators to form new companies, which could place and win bids on parts-supply contracts anew.
Early on in the scheme, in May 2005, Day moved to Mexico, where he directed Neufeld, Carroll, and Stewart through emails, phone calls, and internet chats. He initially instructed the three to route the proceeds of the scheme to him in Mexico in the form of checks that he would deposit in a Belizean bank account. However, the bank eventually shut down Day's account, leaving him without an easy way to pocket the proceeds of his project. Day reacted by instructing Carroll to convert his funds into gold and to physically bring the gold to him in Mexico.
The task of purchasing and then transporting the gold to Day in Mexico involved several complicated steps. First, Day told Carroll to purchase a large quantity of gold— some 2,030 ounces in gold bars and 1,522 ounces in gold coins— from a gold dealer in Arizona and to have the gold shipped to Carroll's residence in New Jersey. However, because Day did not wish to enter the United States to transport the gold personally, he instead asked other individuals to transport the gold for him. Thus, in July 2006, Carroll drove 197 gold bars (worth more than $1.3 million) from New Jersey to Houston, Texas, where he met Juerg Mehr, an auto mechanic whom Day had asked to help hide the gold inside the hollow front bumper of a Toyota Land Cruiser. Once the gold was hidden, Carroll picked up Stewart and drove across the U.S.-Mexico border where they met up with Day. The three of them then drove to Day's home in Lo De Marcos, where after waiting until nighttime, they hand-sawed the gold out of the Land Cruiser's bumper and placed it inside Day's home.
The next effort to transport gold to Day in Mexico did not meet with the same success, as Carroll was arrested by Mexican authorities while attempting to cross the border in September 2006. Although he was released shortly thereafter, the arrest left Carroll unable to travel to Mexico and Day looking for a new courier. Day eventually recruited Glenn Teal, a former law enforcement officer. In February 2007, Teal flew to Houston where he met Carroll, Mehr, and a fourth individual. Together they hid roughly $850,000 worth of gold that Carroll had driven down from New Jersey inside the rear door panel of an Austrian Pinzgauer military transport vehicle that belonged to Day. Teal then drove the Pinzgauer into Mexico, where he met Day, and the two transported the gold together to Day's home in Lo De Marcos.
Within a month of this second delivery, however, the scheme began to unravel. Carroll and Stewart had run-ins with law enforcement officers in February 2007, after which Day sent Carroll an email instructing him to " stop bidding" on the DLA contracts. Carroll was arrested soon thereafter, on March 9. Day then abandoned his Mexican residence, assumed multiple fake identities, and began recruiting additional individuals to help him transport his gold, first from Mexico back to the United States and then to a gold dealer in Canada. Finally, after more than a year on the run, Day was arrested in July 2008 by Mexican authorities at the Cancun International Airport. He was subsequently detained at a Mexican prison where he awaited extradition to the United States.
In August 2008, a federal grand jury indicted Day for wire fraud conspiracy, 18 U.S.C. § 1349; wire fraud, 18 U.S.C. § 1343; aggravated identity theft, 18 U.S.C. § 1028A; money laundering conspiracy, 18 U.S.C. § 1956(h); smuggling conspiracy, 18 U.S.C. §§ 371, 554; and obstruction of justice, 18 U.S.C. § 1503. In December 2010, the Mexican government agreed to extradite Day to the United States on all charges other than the identity theft and obstruction counts.
After his extradition to the United States, Day was scheduled to be tried by a jury in the U.S. District Court for the Eastern District of Virginia in August 2011.
Prior to the trial, Day filed a motion in limine seeking to exclude a variety of evidence characterized as " uncharged money laundering and miscellaneous bad acts" on the grounds that such evidence would be unfairly prejudicial and irrelevant to the
offenses that were actually charged. In particular, Day's counsel sought to bar the government from introducing evidence concerning Day's use of his Belizean and other bank accounts to deposit proceeds from his scheme, his use of various false names and identifications, and his purchase of several expensive watches while living in Mexico. After considering Day's arguments, the trial court denied the motion to exclude those disputed items of evidence, reasoning that they were really " part and parcel of the money laundering scheme" and not " attempts to slam [Day's] character."
During the eight-day trial, the government introduced testimony from a number of witnesses. One was Tom Higginbotham, a DLA engineer who tested several of the nonconforming parts that the government purchased from Day and his co-conspirators. On cross-examination of Higginbotham, Day's counsel sought to admit into evidence an internal agency report that had concluded that some...
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