U.S. v. Alston-Graves, No. 04-3095.

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtRandolph
PartiesUNITED STATES of America, Appellee v. Lois A. ALSTON-GRAVES, a/k/a Lois Austin, Appellant.
Docket NumberNo. 04-3095.
Decision Date27 January 2006
435 F.3d 331
UNITED STATES of America, Appellee
v.
Lois A. ALSTON-GRAVES, a/k/a Lois Austin, Appellant.
No. 04-3095.
United States Court of Appeals, District of Columbia Circuit.
Argued September 13, 2005.
Decided January 27, 2006.

Page 332

Appeal from the United States District Court for the District of Columbia (03cr00045-02).

W. Douglas Wham, appointed by the court, argued the cause and filed the briefs for appellant.

Chrisellen R. Kolb, Assistant U.S. Attorney, argued the cause for appellee. With her on the brief were Kenneth L. Wainstein, U.S. Attorney, and John R. Fisher and Thomas J. Tourish, Jr., Assistant U.S. Attorneys.

Before: RANDOLPH and ROGERS, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge.


This appeal from convictions on charges of conspiracy and wire fraud raises questions about a "willful blindness" jury instruction on knowledge. The instruction allowed the jury to find that the defendant acted knowingly if she deliberately closed her eyes to obvious facts. Questions about the propriety of such an instruction and the circumstances when it may be given

Page 333

have frequently been the subject of opinions in the other circuits, but have received little attention in this court. The appeal also presents an issue regarding sentencing in light of United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005).

I.

The indictment charged John H. Smith, Gwendolyn C. Jones, and Lois A. Alston-Graves with conspiracy to commit wire fraud, 18 U.S.C. § 371, and wire fraud, 18 U.S.C. § 1343, in connection with a scheme to defraud finance companies in Florida, Colorado, and the District of Columbia. Smith, Jones, and Alston-Graves allegedly carried out a scheme to induce lenders into making "factoring" loans to Accurate Computer Technicians, Inc. ("ACT"), a D.C. corporation Smith founded that was "supposed to... build computers and repair computers," but by his own admission "didn't do anything."

A "factoring" loan is a short-term commercial loan provided to a company in need of cash to perform a contract—in this case, a government contract. The amount loaned is a percentage of the money due from the government on outstanding invoices. In exchange for the loan, the company assigns to the factoring company the proceeds due on the contract. When a company applies for such a loan, the factoring company verifies that the contract exists, that the work is being performed, and that the government will assign the proceeds of the invoice. The views of the government officer who administers the contract and authorizes payment are obviously of critical importance to the prospective lender. The factoring company also verifies with the government's disbursing officer that the government will pay the factoring company. Upon receiving the assigned proceeds, the factoring company keeps an amount equal to the loan plus a fee based on a percentage of the invoice amount.

Smith pled guilty to conspiracy and testified for the government at the first trial. A jury acquitted Jones and convicted Alston-Graves on both counts. The district court set aside Alston-Graves's conviction and the government retried her. The evidence at the second trial, viewed in favor of the government, United States v. Butler, 924 F.2d 1124, 1126 (D.C.Cir.1991), showed as follows.

In July 1997, Smith filled out an invitation for bids issued by the District of Columbia on a computer-related contract. The paperwork was not something with which Smith was familiar. He soon decided to use the government contracting process to make money illegally. Smith consulted a person in his neighborhood with known expertise in shady dealings. The individual gave Smith the telephone number of Alston-Graves, who was employed in the District's child support enforcement division at the time. Smith called her, invoked the individual's name, and asked for her help with a "fake contract." Alston-Graves, suspicious of Smith, asked him to fax a copy of his driver's license, which he did. A few days later Smith and Alston-Graves met. Smith showed her an ACT contract with the District, saying it was fake and asking her for help in making money with it. Alston-Graves agreed to pose as the government contracting officer and told Smith to make a phony invoice and "shop it around" to finance companies. In return, she demanded twenty-five percent of the profits from the scheme.

At a second meeting in late summer 1997, Alston-Graves gave Smith "a certificate of award, a recommendation of award, payment schedule, and some blank government letterhead." She instructed Smith to fill out the portions for the offeror and sign the relevant documents. Smith then

Page 334

used the paperwork to convince potential investors to provide $5000 in loans to his company. In addition to showing the investors "all the paperwork" Alston-Graves had given him, Smith showed them two fake checks. The checks, which Alston-Graves prepared, purported to be partial payments on the contract. In a conference call with the investors, Alston-Graves acted the part of a government contracting officer and gave assurances that "the contract was real." After Smith received the $5000 in checks, Alston-Graves asked him to come to her house to cash the checks. Smith complied, and they cashed the checks at a nearby liquor store. Smith gave Alston-Graves $2500 to $3000, which was the amount she demanded.

Around October or November 1997, Smith called Paragon Financial Group, Inc., a Florida finance company engaged in factoring. Smith—who identified himself as the Chief Operating Officer of ACT—dealt with Jon Anselma, a Paragon partner. Among the documents Smith provided to Anselma were invoices listing "Lois Austin"—Alston-Graves's alias—as the contracting officer. Smith convinced Anselma that ACT had a five-year contract with the District of Columbia for $1 million annually. Smith began sending invoices to Anselma, who said he would need signatures from the government contracting officer-"Lois Austin"—and the disbursing officer. Gwendolyn Jones then pretended to be the District's disbursing officer, using the name "Mary Ann Whitaker"; Jones demanded $5000 from Smith for her services. Alston-Graves stayed in touch with Anselma by telephone, confirming that she was the District's contracting officer, that the contract existed, that ACT was performing under the contract, and that the disbursing officer would soon approve payment. These confirmations were crucial. Anselma testified that Paragon "would not [have loaned] money on the invoice had [Alston-Graves] not verified the contract, and the assignment, and the invoice." Alston-Graves also told Anselma about $120,000 monthly payouts to ACT for computer services. Anselma asked Smith for correct copies of certified invoices, a written amendment to the contract reflecting the monthly payouts, and a completed assignment of the proceeds.

Smith eventually forwarded to Anselma all the documents he needed, as well as copies of a worksheet reflecting the authorized work completed on the contract and two invoices signed by "Lois Austin" reflecting the $120,000 monthly payouts to ACT. Anselma testified that in reviewing these papers, he thought Lois Austin's signatures "looked a little bit different from each other" and "was concerned that [the signatures were] forged." When he called Alston-Graves about this, she assured him that she had signed the papers and said it was not necessary for him to fax them for her confirmation. Anselma insisted. After receiving the documents Alston-Graves told Anselma that "they were, indeed, her signatures on the invoices." Paragon then confirmed with Whitaker (i.e., Gwendolyn Jones) that the invoices "were being processed for payment and Paragon was scheduled to be paid," and independently confirmed that ACT was a corporation in good standing in D.C. In early February 1998, Paragon wired $83,740 to ACT. Smith used part of the money to repay ACT's investors and to pay Alston-Graves $5000.

Anselma testified that when the certified letters he had mailed to Mary Ann Whitaker and Lois Austin returned to Paragon in early March, he phoned Alston-Graves to inquire when Paragon would be paid on the invoice. She told him the "contract had been cancelled," to which he replied that he "knew the contract was bogus." At this, Alston-Graves "suddenly... got nervous and denied ever talking to [Anselma]."

Page 335

She asked him "who [he] was and said she had no idea what [he] was talking about." Paragon never received its money under the fake contract assignment.

Meanwhile, the conspirators attempted to carry out two other frauds. In November 1997, Smith began the same scam anew, this time with Norwest Business Credit, a Colorado finance company. Smith sent Norwest the same documents he had sent Paragon: "the certificate, award of certificate, the memorandum, and the recommendation for award," as well as phony October and November invoices. When Smith told Alston-Graves he "had gotten in contact with Norwest," she was pleased and said "[s]he would pose as a contracting officer." She told Smith to "get as much money as possible."

Smith called Cynthia Lynn Anderson of Norwest in January 1998, identifying himself as the CEO of ACT, Inc. and telling her he "had a government contract" that he wanted Norwest to factor. During that conversation, Anderson conveyed some concerns regarding the paperwork Smith had sent. When she challenged him about the paperwork, he told her to call "Lois Austin," the "contracting officer." Anderson called Alston-Graves "[i]mmediately" to ask her to verify the invoices Smith had sent. Alston-Graves made three comments that troubled Anderson. Without hesitation, Alston-Graves indicated that ACT "was a great company" and had "[d]one a very, very good job." It surprised Anderson that Alston-Graves, who purported to be part...

To continue reading

Request your trial
42 practice notes
  • U.S. v. Heredia, No. 03-10585.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • April 2, 2007
    ...previously mentioned, the D.C. Circuit has yet to fully endorse the deliberate ignorance instruction. See United States v. Alston-Graves, 435 F.3d 331, 339-41 Equally misplaced is the concurrence's concern about FedEx and similar package carriers. Concurrence at 3739. The fact that a tiny p......
  • U.S. v. Waseta, No. 10–2097.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • July 26, 2011
    ...Dupas, 419 F.3d at 919–21 (9th Cir.); United States v. Duncan, 400 F.3d 1297, 1306–08 (11th Cir.2005); United States v. Alston–Graves, 435 F.3d 331, 343 (D.C.Cir.2006). Thus, to the extent that Mr. Waseta could be understood as asserting that any application of the advisory Guidelines sente......
  • U.S. v. Heredia, No. 03-10585.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • April 2, 2007
    ...previously mentioned, the D.C. Circuit has yet to fully endorse the deliberate ignorance instruction. See United States v. Alston-Graves, 435 F.3d 331, 339-41 (D.C.Cir.2006). 12. Whether the evidence is sufficient to warrant giving a Jewell instruction is an issue that has divided several p......
  • State v. Elmore, No. 2007-0475.
    • United States
    • United States State Supreme Court of Ohio
    • July 28, 2009
    ...statutory maximums regardless of whether the federal sentencing guidelines were mandatory. United States v. Alston-Graves (C.A.D.C.2006), 435 F.3d 331, 343; United States v. Lata (C.A.1, 2005), 415 F.3d 107, 112; United States v. Vaughn (C.A.2, 2005), 430 F.3d 518, 524-525; United States v.......
  • Request a trial to view additional results
42 cases
  • U.S. v. Heredia, No. 03-10585.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • April 2, 2007
    ...previously mentioned, the D.C. Circuit has yet to fully endorse the deliberate ignorance instruction. See United States v. Alston-Graves, 435 F.3d 331, 339-41 Equally misplaced is the concurrence's concern about FedEx and similar package carriers. Concurrence at 3739. The fact that a tiny p......
  • U.S. v. Waseta, No. 10–2097.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • July 26, 2011
    ...Dupas, 419 F.3d at 919–21 (9th Cir.); United States v. Duncan, 400 F.3d 1297, 1306–08 (11th Cir.2005); United States v. Alston–Graves, 435 F.3d 331, 343 (D.C.Cir.2006). Thus, to the extent that Mr. Waseta could be understood as asserting that any application of the advisory Guidelines sente......
  • U.S. v. Heredia, No. 03-10585.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • April 2, 2007
    ...previously mentioned, the D.C. Circuit has yet to fully endorse the deliberate ignorance instruction. See United States v. Alston-Graves, 435 F.3d 331, 339-41 (D.C.Cir.2006). 12. Whether the evidence is sufficient to warrant giving a Jewell instruction is an issue that has divided several p......
  • State v. Elmore, No. 2007-0475.
    • United States
    • United States State Supreme Court of Ohio
    • July 28, 2009
    ...statutory maximums regardless of whether the federal sentencing guidelines were mandatory. United States v. Alston-Graves (C.A.D.C.2006), 435 F.3d 331, 343; United States v. Lata (C.A.1, 2005), 415 F.3d 107, 112; United States v. Vaughn (C.A.2, 2005), 430 F.3d 518, 524-525; United States v.......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT