U.S. v. Cannon, 93-8498

• Decision Date: 06 January 1995
• Docket Number: No. 93-8498,93-8498
• Citation: 41 F.3d 1462
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Jody CANNON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1462

41 F.3d 1462

UNITED STATES of America, Plaintiff-Appellee, v. Jody CANNON, Defendant-Appellant.

No. 93-8498.

United States Court of Appeals Eleventh Circuit.

Jan. 6, 1995.

Mitchel P. House, Jr., Doye E. Green, Jr., Sell & Melton, Macon, GA, for appellant.

Sharon T. Ratley, Miriam Wansley Duke, Asst. U.S. Attys., Macon, GA, for appellee.

Appeal from the United States District Court for the Middle District of Georgia.

Before COX, Circuit Judge, and FAY, Senior Circuit Judge, and NELSON ^*, District Judge.

FAY, Senior Circuit Judge:

This appeal arises from Cannon's two-count conviction for conspiring to defraud the United States government and for defrauding the government by using false documents. The jury acquitted Cannon on three other counts. The indicted activity involves improperly performed defense contracts for the United States Air Force ("USAF").

Cannon alleges many errors in the trial and at sentencing. First, Cannon alleges the trial judge abused his discretion by excluding evidence of metallurgical and ballistics testing by the government, in conjunction with this prosecution, long after the contracts had been performed. Cannon also alleges the trial judge abused his discretion in excluding evidence that the government accepted nonballistically tested titanium as conforming in later contracts with other parties that called for ballistically tested titanium. As to each of Cannon's allegations, we disagree.

Cannon alleges the evidence cannot support the conspiracy conviction on Count I under 18 U.S.C. Sec. 371. We disagree, and AFFIRM the conviction.

Cannon alleges the evidence cannot support the conviction on Count V for using false documents to defraud the government under 18 U.S.C. Sec. 1001. We agree, REVERSE the judgment, and REMAND with instructions to enter a not guilty judgment as a matter of law on Count V.

Cannon alleges the trial judge reversibly erred in admitting video-tape of a C-130 airplane and its connecting link presented at trial with live narration. We disagree.

Cannon alleges prosecutorial misconduct, spanning the grand jury proceeding through closing argument, requires a new trial. We disagree.

Cannon alleges the indictment failed to charge and the evidence cannot support a conviction on the theory of aiding and abetting. In light of our finding that the evidence does not prove the DD 250 forms submitted to the government were false, we do not reach the issue of whether Cannon would be guilty of aiding and abetting had they been false.

Cannon alleges the trial judge wrongly computed his offense level at sentencing, wrongly used the full contract price as the amount of government loss, and wrongly found more than minimal planning, conscious or reckless risk of serious bodily injury, and an aggravating role as an organizer, leader, manager or supervisor by Cannon. We disagree.

I. BACKGROUND

Jody Cannon was General Manager at Space Age Manufacturing, Inc. ("Space Age"), in Warner Robins, Georgia, for approximately twenty years. He was General Manager when the indicted activity occurred.

Space Age contracted with the United States Air Force to supply parts for military aircraft. Count I of the superseding indictment charges Mr. Cannon with conspiring to defraud the government and to use false documents to elicit payment on government contracts that Cannon knew Space Age had not performed to military specifications. The jury convicted Mr. Cannon of this count (Count I). The superseding indictment also charged, among other violations, a substantive count (Count V) of using false documents to elicit payment on contracts Cannon knew were not performed to military specifications. The jury convicted Mr. Cannon on this substantive count and acquitted him on all other counts.

Both Counts I and V involved defense contracts between Space Age and the USAF. Count I, the conspiracy count, involved two types of parts the prosecution alleged did not conform: First, a throttle link assembly, which is used to feather a propeller on a C-130 aircraft. ¹ Second, titanium armor plating for H-53 helicopters which the contract required to be ballistically tested--that is, to have defied penetration when shot with bullets. Space Age knowingly supplied nonballistically tested titanium.

The indictment charges that Cannon, as General Manager, submitted bids for government contracts and placed orders for goods to fill those contracts. Cannon admits ordering the nonconforming titanium charged in Counts I and V in March of 1990. (R3-59; Appellant's Br. at 5). After using materials that did not conform to contract specifications, Space Age submitted DD 250 forms to the government Quality Assurance Representative ("QAR") for payment. The QAR reviews other documents when receiving the DD 250 and signs the DD 250, certifying that the contractor has met contract specifications and deserves payment. The government argues that by presenting the DD 250 to the QAR, Cannon "took affirmative actions to cause the QAR to accept the items, and to certify that they met the contract specifications, thereby causing the false documents to be made." (Appellee's Br. at 26). The substantive count depends on whether this government argument is correct as a matter of law.

II. STANDARD OF REVIEW

This appeal requires review of findings of fact, conclusions of law, and discretionary rulings on whether to admit or exclude evidence.

We will not disturb the trial judge's decision to admit or exclude evidence absent a clear showing of abuse of discretion. United States v. Russell, 703 F.2d 1243, 1249 (11th Cir.1983).

We subject sufficiency of the evidence, a question of law, to de novo review. United States v. Kelly, 888 F.2d 732, 739 (11th Cir.1989). We view the evidence in the light most favorable to the government, including all reasonable inferences and credibility judgments. See Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942). We ask whether a reasonable trier of fact, when choosing among reasonable constructions of the evidence, could have found the defendant guilty beyond a reasonable doubt. Kelly, 888 F.2d at 740.

Prosecutorial conduct requires a new trial only if we find the remarks (1) were improper and (2) prejudiced Cannon's substantive rights. United States v. Cole, 755 F.2d 748, 767 (11th Cir.1985). We review them in context and assess the probable jury impact. United States v. Stefan, 784 F.2d 1093, 1100 (11th Cir.1986).

We review the indictment's sufficiency for whether it contains every element of the offense charged and adequately informs the accused of the charge being lodged. Stefan, 784 F.2d 1093, 1101-02 (11th Cir.1986).

We do not disturb the sentencing court's fact findings absent clear error. United States v. Davis, 902 F.2d 860, 861 (11th Cir.1990). Nonetheless, we review de novo the sentencing court's Federal Sentencing Guidelines application to those facts. United States v. Rodriquez, 959 F.2d 193 (11th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 649, 121 L.Ed.2d 563 (1992).

The sentencing court may consider defendant's conduct not covered by counts of conviction if the government proves their existence by the greater weight of the evidence. See United States v. Alston, 895 F.2d 1362, 1372-73 (11th Cir.1990).

III. ANALYSIS

A. Procedure

This Court at oral argument questioned whether Cannon had waived appeal on Counts I and V by failing to move for a judgment of acquittal on each of these counts. He did not. Cannon moved for judgment of acquittal on August 27, 1993, the seventh day after jury discharge. This motion is proper under Fed.R.Crim.P. 29(c) and preserved the issues for appeal.

B. Evidentiary Rulings

We find the trial judge did not abuse his discretion by excluding evidence of metallurgical ² and ballistics testing by the government. The record indicates the government, in connection with Cannon's prosecution, seized titanium from Space Age in January of 1991. This titanium passed government ballistics tests. Cannon argues that because the titanium passed the ballistics test, it negates a finding of his intent to defraud the government. We disagree.

First, Cannon did not show the titanium seized in the search came from the batch used to perform the contract implicated in Count V. Indeed, the government witness, a Space Age supplier, testified she had no way of knowing whence the titanium came, who bought it, who sold it, when or in connection with what contract it was sold. (R3-129-30). Second, even if Cannon had traced this titanium to the contract in Count V, it would not matter. That the nonballistically tested titanium supplied by Space Age later passed ballistics tests does not pardon the deceit of having supplied nonconforming, nonballistically tested titanium in a contract requiring ballistically tested titanium. In short, titanium that could pass the ballistics test is not equal to titanium that has passed the ballistics test. The government contracted and paid for the latter; Space Age's substitution of the former, without government consent, does not negate the government's showing of intent to defraud. The trial judge did not abuse his discretion in excluding evidence of these after-the-fact, government-conducted tests. Likewise, evidence of government condoned substitutions in later contracts with other, unrelated parties does not affect the government's showing of intent to defraud.

Further, we find the trial judge did not abuse his discretion in admitting the C-130 aircraft videotape with live narration.

C. Findings of Fact

Upon review of the sentencing court's fact findings, we find no clear error. The sentencing court found the government's monetary loss to be the contract value. The United States Sentencing Commission Guidelines Manual, Sec. 2F1.1 Application Note 7, states that "[f]requently, loss in a fraud case will be the same as in a theft case." Further, Sec. 2F1.1 refers "valuation of loss" to the...