U.S. v. Bailey

Decision Date24 September 1997
Docket NumberNo. 94-2314,94-2314
Citation123 F.3d 1381
Parties11 Fla. L. Weekly Fed. C 568 UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant, v. Thomas G. BAILEY, Defendant-Appellant, Cross-Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

Robert E. Sanders, Washington, DC, Defendant-Appellant, Cross-Appellee.

Vicki L. Johnson, Assistant U.S. Attorney, Tamra Phipps, Tampa, FL, David S. Kris, U.S. Dept. of Justice, Washington, DC, for Plaintiff-Appellee, Cross-Appellant.

Appeals from the United States District Court for the Middle District of Florida.

Before BIRCH, Circuit Judge, GODBOLD, Senior Circuit Judge, and O'KELLEY *, Senior District Judge.

BIRCH, Circuit Judge:

In this appeal, a firearms dealer challenges his conviction for mail fraud relating to his purchase and sale of automatic and semiautomatic weapons to law enforcement agencies and to private customers, operation of his firearms business without a license, and possession of machineguns in violation of 18 U.S.C. § 922(o) on the bases of sufficiency of the evidence, the constitutionality of section 922(o), and prosecutorial misconduct. We affirm his conviction. His sentence, which was imposed under the incorrect version of the Sentencing Guidelines and is the subject of the government's cross appeal, is vacated, and the case is remanded for resentencing.


In the summer of 1986, appellant, cross appellee, Thomas G. Bailey, became a federally licensed firearms dealer 1 and obtained additional authority to sell machineguns to law enforcement agencies. 2 In February, 1989, Bailey contracted with Heckler and Koch ("H & K"), a firearms manufacturer based in Germany, which makes machineguns and semiautomatic assault rifles, 3 to become a law enforcement firearms dealer for the company. Under the terms of this contract, Bailey was not permitted to stock weapons for future sale to police departments; he had authority to act only as a middleman, who ordered from H & K the particular weapons requested by his law enforcement customers. 4 The contract further specified that H & K would sell weapons to Bailey without including federal excise tax in the price, because the weapons were to be sold to law enforcement customers solely. 5 Bailey testified that he understood that his contract with H & K and federal law prohibited his selling machineguns and assault rifles to civilians and that he understood the federal excise tax scheme, which subjected all firearms, except those sold to law enforcement agencies, to federal excise tax.

In July, 1989, Bailey met Wayne Bass, the Acting Chief of Police of Wauchula, Florida. Chief Bass told Bailey that he might want to buy a small number of assault rifles for his eight-man police department, and Bailey offered to obtain the weapons. Because of the ATF assault weapons ban and the restrictive terms of Bailey's contract with H & K, Bailey instructed Bass to write a letter authorizing Bailey to buy weapons on behalf of the Wauchula Police Department from H & K. Bailey mailed to Chief Bass a sample letter that authorized Bailey " 'to place any order for any H & K full or semi-auto firearm, provided they are shipped directly to the department. The weapons and/or accessories will be used for law enforcement purposes.' " 1 Supp. R5-45-46 (quoting letter). When he read the sample letter, Chief Bass testified that he "was a little bit concerned--or not a little bit, I was quite concerned with the way it stated--its open-endedness." Id. at 46. Chief Bass particularly objected to the reference in the letter to automatic weapons, because he had told Bailey from the outset that the Wauchula Police Department "was not interested in full automatic firearms." Id. at 47.

When Chief Bass telephoned Bailey to express his concerns, Bailey told him that H & K wanted the letters to be open-ended to encompass all H & K products. Bailey then suggested that Chief Bass modify the letter to allow the weapons to be shipped directly to him rather than to the Wauchula Police Department. Chief Bass agreed and sent Bailey a letter of authorization, but he warned Bailey that "he must fully understand that we would only be liable for any weapon that was specifically ordered." Id. at 49. Furthermore, Chief Bass made it "crystal clear" that the Wauchula Police Department would be interested in buying such weapons only in the future, if at all, "because our budget was so small that there were a lot of much more needed equipment to be bought for that department than ... these exotic firearms." Id. at 50. Wauchula's total budget for new equipment for that year was approximately $5,000. The Wauchula Police Department never ordered any weapons from Bailey.

On September 29, 1989, Bailey used the letter of authorization sent by Chief Bass to order $30,000 of weapons from H & K, including twenty-five assault rifles (two HK 91s, two HK 93s, and twenty-one HK 94s), two pistols, a shotgun, a sniper rifle, and $6,000 of accessories. He informed H & K that the weapons were for the Wauchula Police Department. While the shotgun, sniper rifle, and pistols were sent immediately to Bailey, H & K requested and obtained approval from ATF to import assault rifles to the Wauchula Police Department. In November, 1989, H & K called Chief Bass to confirm the order of the twenty-five assault rifles for the police department. Chief Bass told H & K "that the Wauchula Police Department had not ordered any guns from H & K and I had no idea why that order was in the Wauchula Police Department's name." Id. at 54. He also called the ATF Tampa office. Based on Chief Bass's message, H & K did not ship the assault weapons. Bailey's conduct regarding the Wauchula Police Department resulted in his conviction on mail fraud charges in Counts II through IV of the amended, second superseding indictment.

Also in mid 1989, Joel Hodges, Assistant Commander of the Clay County, Florida Sheriff's Department SWAT team, met Bailey. At that time, the Clay County SWAT team was using HK MP5s, machineguns manufactured by H & K. Because these weapons had been manufactured and lawfully possessed prior to 1986, and, thus, could be sold to and possessed by individuals under the provisions of 18 U.S.C. § 922(o)(2)(B), Bailey offered to trade three new MP5s for three of the Clay County Sheriff's Department old MP5s, and Sergeant Hodges agreed. He also expressed interest in looking at a single HK 91 assault rifle, although he did not authorize Bailey to buy this weapon for him.

In September, 1989, Bailey dictated to Sergeant Hodges an open-ended letter of authorization allowing Bailey to purchase weapons from H & K on behalf of Clay County Sheriff's Department. Sergeant Hodges signed the letter, which authorized Bailey " 'to place on [Sergeant Hodges's] behalf an order for H & K restricted [automatic] firearms and accessories which will be used for law enforcement purposes only.' " Id. at 94 (quoting letter). Sergeant Hodges wrote a similar letter authorizing Bailey to obtain semiautomatic weapons and accessories from H & K. In addition to the three MP5s actually requested by Clay County Sheriff's Department, Bailey ordered the following weapons from H & K and represented that they also had been requested by Clay County Sheriff's Department: one HK 91 AZ assault rifle, four 20-round magazines and four 30-round magazines for the rifle, one HK 94 AZ assault rifle, and two magazine clamps. Bailey ordered the weapons and accessories to be shipped to his address. H & K sought and obtained ATF approval for the sale, but it did not ship the weapons and accessories. Bailey's actions relating to the Clay County Sheriff's Department resulted in his conviction on the mail fraud charge in Count V of the indictment.

In October, 1989, Bailey mailed a letter to Sergeant Stuart Otto of the Titusville, Florida, Police Department. In this letter, Bailey offered to trade two new HK MP5s and one HK 33 rifle for three of the Titusville Police Department's pre-1986 machineguns. Bailey requested a letter of authorization to purchase the H & K weapons on behalf of the Titusville Police Department and stated that such an authorization letter "is a requirement of the BATF." Id. at 71. The Titusville Police Department accepted Bailey's offer to trade the three machineguns and provided the authorization letter. Bailey used the letter to order the three MP5s requested by the Titusville Police Department as well as four assault rifles, three pistols, one shotgun, and one rifle, valued at more than $12,000, and he falsely represented that the Titusville Police Department had ordered these weapons also. H & K submitted the paperwork on the sale to ATF, but the transfer was disapproved on January 19, 1990. Bailey's conduct concerning the Titusville Police Department resulted in his conviction for mail fraud as charged in Counts VI and VII of the indictment.

In addition to law enforcement agencies, Bailey also was convicted for mail fraud involving individuals. On February 15, 1990, Bailey mailed a letter to Charles Schaaf, a gun collector in Ft. Lauderdale, Florida, and offered to sell him his "personal original 1921ac Colt thompson submachine gun," and represented that the "weapon is in 97% plus condition." Government Exhibit 10E. 6 Schaaf testified that an "original" gun was a gun "just like it was made at the manufacturer .... original in every detail. It couldn't be retouched, it couldn't be refinished, it couldn't be reblued [a process in which the weapon is colored gun-metal blue]"; the weapon would have to be "as originally made in 1921 and just like it left the factory." 1 Supp. R8-54. Schaaf's testimony was confirmed by the testimony of a professional gunsmith hired by Bailey to repair the Thompson submachinegun, and by the National Rifle Association's gun quality standards.

Unbeknownst to Schaaf, Bailey sent the gun to be repaired by a gunsmith, who testified that the gun was pitted or...

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