U.S.A v. Clay

• Decision Date: 27 August 2010
• Docket Number: No. 09-3134.,09-3134.
• Citation: 618 F.3d 946
• Parties: UNITED STATES of America, Plaintiff-Appellee,v.Alvin CLAY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

618 F.3d 946

UNITED STATES of America, Plaintiff-Appellee,v.Alvin CLAY, Defendant-Appellant.

No. 09-3134.

United States Court of Appeals Eighth Circuit.

Submitted: April 16, 2010.

Filed: Aug. 27, 2010.

Rehearing and Rehearing En Banc Denied Oct. 20, 2010.

COPYRIGHT MATERIAL OMITTED

Shirley Baccus-Lobel, argued, Dallas, TX, for appellant.

Steven Northup Snyder Sr., AUSA, argued, Fort Smith, AR, for appellee.

Before LOKEN, BRIGHT, and MELLOY, Circuit Judges.

PER CURIAM.

A jury convicted Alvin Clay of conspiracy to commit wire fraud in violation of 18 U.S.C. § 371, and four counts of money laundering in violation of 18 U.S.C. § 1957. The district court ¹ sentenced him to five months' imprisonment and ordered him to pay $16,265.26 in restitution. Clay appeals, challenging the sufficiency of the evidence to support his convictions. He also argues the district court erred: (1) by denying his motion for a new trial; (2) in its jury instructions; (3) in admitting evidence; (4) in excluding evidence; and (5) in denying his motion to suppress. We affirm the judgment of the district court.

I. Background ²

This case concerns a conspiracy to defraud purchasers of five homes in Little Rock, Arkansas. The government charged three individuals for their roles in the conspiracy: Clay, Raymond Nealy, and Donny McCuien (collectively referred to as “the conspirators”). During the period of the conspiracy, Clay worked as a licensed attorney in the State of Arkansas and also held a real estate and contractor's license. Nealy worked as a mortgage broker and owned a mortgage company. McCuien managed a Burger King and owned a property management and construction corporation.

Each of the five fraudulent home purchases proceeded in a similar manner. Usually McCuien would find a purchaser for an inexpensive residential property. The purchaser would be promised a no-risk transaction, wherein he or she would receive some cash from closing. Nealy would then obtain financing in an amount substantially greater than the asking price. Using fraudulent information and frequently forging signatures, he would arrange for appraisals of the homes and prepare contracts for sale. The contracts showed a sale price greater than the asking price. The difference between the asking price and sale price would go to Clay Construction Company for the renovation of the property.

At closing, the conspirators would fax a Clay Construction invoice to the closing agent, even though the work claimed on the invoice had not been completed. The invoice showed a difference between the amount loaned to the borrower and the amount paid to the seller. The closing agent would send Clay Construction Company a check for the invoice amount. In total, the conspirators submitted five invoices to title companies, and title companies subsequently issued five checks to Clay Construction totaling $133,142.23. Clay received the checks, deposited them into Clay Construction's bank account, and divided the money among Nealy, McCuien, and himself. The conspirators did not complete any work on any of the homes.

The FBI learned of this scheme when Kenny Wright, a tax preparer, became concerned that he had unlawfully assisted the conspirators with preparing false documents. Wright, accompanied by his attorney, approached the government, admitting that he had falsified tax documents and participated in the fraudulent scheme by preparing false construction invoices. Wright provided the FBI with the conspirators' names, the names of the conspirators' businesses, Clay's social security number, and documentation of the illegal activity.

FBI agents subsequently executed a search warrant for Clay's law office and Nealy's mortgage company, seizing twenty boxes of documents and seven computers. As a result of the search, the government sought a federal grand jury indictment.

The grand jury returned an indictment in December 2004, a first superseding indictment in November 2005, and a second superseding indictment in June 2007. The second superseding indictment alleged that Nealy and McCuien solicited individuals to purchase five homes and used fraudulent documentation when applying for financing through Nealy's mortgage company. According to the indictment, the conspirators caused false offers to purchase and false invoices to be delivered to the title companies. The invoices claimed that work had been completed on the homes, even though no work had been done. It also alleged that Nealy and Clay had defrauded the purchasers of the five homes. ³

Before trial, Clay moved to suppress evidence seized in the search of his office and to dismiss the indictment on the grounds that it failed to state an offense and was the product of prosecutorial retaliation. In support of his retaliation claim, Clay alleged he had been involved in a contentious litigation with the same prosecutor who initiated the criminal investigation of Clay. After Clay filed these motions, the Western District of Arkansas assumed responsibility for the Eastern District of Arkansas's case. Following a hearing, the district court denied Clay's motions.

The government tried Clay separately from Nealy. More than thirty witnesses testified during the seven-day trial. The court denied Clay's motions for judgment of acquittal at the close of the government's case-in-chief and at the close of the trial. After the jury returned a guilty verdict, Clay moved for a judgment of acquittal and for a new trial. The district court held a hearing on these motions. At the hearing, Clay argued that McCuien had perjured himself at trial. The district court denied both motions. Clay appeals his convictions.

II. Sufficiency of the Evidence

Clay argues the government failed to introduce sufficient evidence to support the conviction for conspiracy to commit wire fraud.

This court reviews sufficiency of the evidence de novo and reverses only if no reasonable jury could have found the defendant guilty. United States v. Elzahabi, 557 F.3d 879, 885 (8th Cir.2009). “Evidence is sufficient to sustain a conviction if, when viewed in the light most favorable to the government, it offers substantial support for the verdict.” United States v. Slaughter, 128 F.3d 623, 627 (8th Cir.1997). “It is axiomatic that we do not pass upon the credibility of witnesses or the weight to be given their testimony.” Id. (citations and quotations omitted).

To convict Clay of conspiracy to commit wire fraud, the government needed to prove: “(1) a conspiracy with an illegal purpose existed; (2) [Clay] knew of the conspiracy; and (3) [Clay] knowingly joined and participated in the conspiracy.” United States v. Price, 542 F.3d 617, 620 (8th Cir.2008).

Clay raises two arguments. We address each in turn.

A.

Clay first argues he did not participate in the delivery, nor did he know about the fraudulent documents Nealy and McCuien sent to lenders and title companies. Clay maintains that he was only connected to the lenders through the Clay Construction invoices which he contends were immaterial to the lenders' decisions to loan money to the purchasers. Therefore, he argues, no loan proceeds were transmitted by wire communications as a result of his involvement.

We disagree with Clay that he needed to be directly involved in the transmission of loan proceeds from the lenders to the title companies. To be guilty of a conspiracy, he need not have knowledge of every detail of the conspiracy. Rather, the government needed to establish that the participants agreed to the essential nature of the conspiracy. See Slaughter, 128 F.3d at 628 (requiring that the government prove that the defendant knew the essential object of the conspiracy).

The government introduced evidence that Clay received $27,500 as a result of his partnership with McCuien and Nealy, yet he did not complete any work on any of the homes. Clay admitted at trial that he listed himself as the “supervisor” of a construction project on one of the Clay Construction invoices that the conspirators sent to a title company even though he was not present on any job sites, nor did he supervise any subcontractors or workers. The evidence further established that the title companies relied on these invoices to send a check to Clay Construction for the difference between the amount loaned to the borrower and the amount paid to the seller, and Clay admitted that he bore responsibility for the invoices. Clay then deposited the checks from the title companies into his Clay Construction Company checking account and immediately wrote checks to himself, Nealy, and McCuien.

Clay may not have known every detail of the conspiracy. But the law does not require such knowledge. See Blumenthal v. United States, 332 U.S. 539, 557, 68 S.Ct. 248, 92 L.Ed. 154 (1947) (“[T]he law rightly gives room for allowing the conviction of those discovered upon showing sufficiently the essential nature of the plan and their connections with it, without requiring evidence of knowledge of all its details or of the participation of others.”). The evidence, taken in the light most favorable to the verdict, showed that Clay intended to assist McCuien and Nealy with defrauding others out of money, he knew the essential object of the conspiracy, and that it was reasonably foreseeable that interstate wire communications would be used. See Slaughter, 128 F.3d at 627 (providing for the insufficiency of the evidence standard). We reject Clay's sufficiency of the evidence claim.

B.

Clay next argues that the government failed to prove he conspired to commit wire fraud because the government only proved that he defrauded the purchasers. He asserts that the purchasers were not victims because they knowingly participated in the fraud by falsely representing their intention to live in the homes they were purchasing and provided false information about their finances.

But the purchasers' testimony negates Clay's claim. The purchasers testified that they purchased the homes because McCuien...