United States v. Landersman

• Citation: 886 F.3d 393
• Decision Date: 28 March 2018
• Docket Number: No. 16-4067,No. 16-4066,16-4066
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Mark Stuart LANDERSMAN, a/k/a Mark Stuart, Defendant–Appellant. United States of America, Plaintiff–Appellee, v. Lee Hall, Defendant–Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

886 F.3d 393

UNITED STATES of America, Plaintiff–Appellee,

v.Mark Stuart LANDERSMAN, a/k/a Mark Stuart, Defendant–Appellant.

United States of America, Plaintiff–Appellee,

v.Lee Hall, Defendant–Appellant.

No. 16-4066

No. 16-4067

United States Court of Appeals, Fourth Circuit.

Argued: December 6, 2017

Decided: March 28, 2018

ARGUED: Stuart A. Sears, SCHERTLER & ONORATOR, LLP, Washington, D.C., for Appellant Lee Hall. Cary Citronberg, ZWERLING/CITRONBERG, PLLC, Alexandria, Virginia, for Appellant Mark Stuart Landersman. Morris Rudolph Parker, Jr., Patricia Marie Haynes, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee. ON BRIEF: John Zwerling, ZWERLING/CITRONBERG, PLLC, Alexandria, Virginia, for Appellant Mark Landersman. Dana J. Boente, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria Virginia, for Appellee.

Before KING and THACKER, Circuit Judges, and SHEDD, Senior Circuit Judge.

Affirmed by published opinion. Judge Thacker wrote the opinion, in which Judge King and Senior Judge Shedd joined.

THACKER, Circuit Judge:

In this consolidated appeal, Lee Hall, former Director of Intelligence for the Deputy Undersecretary of the Navy, and Mark Landersman, a machinist from California (collectively, "Appellants"), appeal guilty verdicts for criminal conspiracy and, as to Hall, unlawful conversion of government funds. Specifically, following a bench trial, the district court found that Hall facilitated the purchase of hundreds of firearm suppressors from Mark Landersman, Hall's boss's brother, for over $1.6 million in government funds. The district court concluded that this transaction was illegal because, inter alia, Hall did not use the proper channels for government funding approval; Mark Landersman was an untested and unlicensed firearm manufacturer; and upon arrival, the suppressors did not meet government performance standards.

Appellants raise a host of challenges to the manner in which their bench trials were conducted and the sufficiency of the evidence against them. Because some of these challenges relied on classified government records, the district court and this court conducted proceedings pursuant to the Classified Information Procedures Act ("CIPA"), see 18 U.S.C. app. 3, §§ 1 – 16. For the reasons that follow, we find no reversible error in the classified and unclassified proceedings below and therefore affirm Appellants' convictions.

I.

A.

We recount the facts in the light most favorable to the Government, the prevailing party at trial. See United States v. Garcia–Ochoa , 607 F.3d 371, 376 (4th Cir. 2010). In late 2012 and early 2013, Hall facilitated the Navy's purchase of 349 unattributable (i.e., unserialized and untraceable) firearm suppressors for approximately $1,657,750. At that time, Hall worked directly for David Landersman, Senior Director of Intelligence for the Navy's Office of Plans, Policy, Oversight and Integration ("PPOI").¹

As background, sometime during the summer of 2012, David Landersman and Hall approached Robert Martinage, Deputy Undersecretary for PPOI and David's superior, to seek funds for "intelligence studies." J.A. 373.² Martinage approved their request to approach Carla Lucchino, Department of the Navy Assistant for Administration ("DON/AA"), and ask for authorization to seek funding for this purpose.

On June 6, 2012, David sent an email to Lucchino, asking for a total of $3 million from the PPOI Senior Director's operational budget for the following: intelligence studies, a program integration assessment, an anti-submarine warfare research project, an assessment of the Navy's participation in the Defense Clandestine Service program,³ and "an overall assessment of how well D[epartment] O[f] N[avy] intelligence requirements are being satisfied." J.A. 1185. Lucchino forwarded the request to David Nugent, the Director of the Financial Management Division of DON/AA.

Nugent then began working with Hall on David Landersman's budget request. During the time that Hall and Nugent discussed the funding request, Hall emphasizedto Nugent that this was "an Under Secretary priority," which "would move [it] up on the [priority] list." J.A. 439–40. On August 13, 2012, Nugent indicated to Lucchino that he had been working with Hall and explained that the budget for the studies was reduced from $3 million to $2.2 million. Lucchino authorized Nugent to disburse $2.2 million to David Landersman. Notably, Lucchino testified that she could not authorize the purchase of "weapons or small arms." Id. at 349.

Also on August 13, 2012, David Landersman sent an email to his brother Mark, the erstwhile owner of an automobile machinery company in California called "Advanced Machining and Engineering," or "AME." J.A. 1191–92. Mark had been in dire straits, as he "couldn't keep up the overhead" at AME, id . at 723; he was forced to file for Chapter 7 bankruptcy on July 9, 2012; and a 2011 tax return showed that another of his businesses owed his brother David $50,000 in unpaid loans.

In that August 13 email, David asked Mark for the proper name of his company. The next day, Mark responded to David with the name and phone number of his company: "Advanced Machining and Engineering (951) 852 1653." J.A. 1192. About an hour later, David forwarded this information to Hall, noting, "Lee, Info a[s] follows ...." Id . at 1193. Later that same day, David sent his brother Mark an email with the subject line "300BLK Suppressor," which included a link to a website entitled "How I Built a 300 AAC Blackout Suppressor." Id. at 1195, 1447. Under the link, David wrote, "Look this over ... Looks very much like what we're going to send you." Id. at 1195. Mark responded, "Wow! [V]ery simple." Id. at 1194.

Five weeks after Lucchino authorized Hall to spend $2.2 million for studies and assessments, on September 17, 2012, Hall met with Tedd Shellenbarger, a counterdrug director within PPOI; Sherri Donahue, the Navy Contracting Officer Representative; and Gail Williams, a senior program manager at CACI International, Inc. ("CACI"), a government contractor. The purpose of the meeting was to discuss what Hall wanted to be done with the money.⁴

During that meeting, Hall asked about procuring materials, as opposed to studies as he previously represented to DON/AA. Donahue recalled that "the conversation ha[d] to do with ... alterations on guns." J.A. 480. Williams also recalled that Hall was seeking to procure equipment or materials. She did not recall Hall mentioning "anything about using [the money] to support intelligence studies." Id . at 499. During the meeting, Hall and Williams "discuss[ed] ... what was required for CACI to do a sole source justification," meaning that the contract would not have to be put out for bid, but rather, CACI would award the contract to a preselected vendor. Id .

As a follow up to that meeting, on October 19, 2012, Hall emailed Williams, providing her with the name of the vendor he proposed to use for the contract. He stated:

Gail,

We are finally ready to move. Here is the information you need to get started:

Poc: Mark Stuart of Applied Engineering and Materials Phone: 951–851–1653.

What else do you need? Also, if at all possible, we'd like this rolling by the end of November. I understand you have internal hurdles, but we have accelerated interest in delivering the products.

J.A. 1208. Notably, Mark's middle name is Stuart, but his full name is Mark Stuart Landersman ; the company name is actually Advanced Machining and Engineering; and this phone number is one off from the actual number David Landersman forwarded to Hall, which was 951–852–1653.

Williams responded by email the same day, stating, "[I] will need some information in order to justify a 'sole source' purchase." Id . For example, "Why is Applied Engineering and Materials the vender [sic] of choice?" Id . (parentheses omitted). Thereafter, Hall sent Williams an email stating in relevant part:

Other subcontractors were not considered due to the fact that they do not possess the expertise required to do the job nor posses [sic] the unique proprietary tooling systems created by AME to produce the required enhancements needed. Their proprietary system is wholly, and solely exclusive to AME and therefore unavailable by any other subcontractor.

...

[ ] AME currently has sole proprietary expertise that is not commercially offered by other companies or individuals. It is the only responsible source for the engineering expertise sought and no other services will satisfy requirements [sic]. Their product is the first that incorporate [sic] a unique design that significantly reduces the decibel ratings to near background noise levels. All technologies are developed and owned exclusively by AME and no licensing agreements currently exist, providing a unique opportunity for CACI and the end customer to utilize proprietary engineering and services not readily available elsewhere.

J.A. 1207. At CACI's request, Hall then sent an Statement of Work, proposing that CACI would pay AME 50% up front and 50% "upon delivery, inspection and acceptance trials" of the product. Id. at 1206. In addition, each suppressor was to be billed at a cost of around $5,000.

In finalizing the contract and performing the required due diligence, a CACI officer asked Mark to "provide a detailed breakout of [his] costs, i.e., labor and materials," and also to "provide ... a copy of an invoice and/or PO" demonstrating that he "suppl[ied] this product ... to [a] client of [his] within one year." J.A. 1215. Mark replied, "I am not be able [sic] to provide this information," and told the CACI officer to contact Hall. Id .; see also id . at 1247 (November 8, 2012 email from Mark Landersman to CACI procurement director explaining, "[Hall] has instructed me to direct any and all requests for information" to Hall). In turn, Hall claimed the information CACI requested was confidential, citing "increased questioning on the[ ] vendor issues," and explaining, "[T]he...