U.S. v. Fern, s. 95-4099

• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)
• Writing for the Court: Before HATCHETT, Chief Judge, COX; HATCHETT
• Citation: 117 F.3d 1298
• Parties: 27 Envtl. L. Rep. 21,526, 11 Fla. L. Weekly Fed. C 234 UNITED STATES of America, Plaintiff-Appellee, v. Daniel J. FERN, Defendant-Appellant.
• Docket Number: 95-4596,Nos. 95-4099,s. 95-4099
• Decision Date: 24 July 1997

Page 1298

117 F.3d 1298 27 Envtl. L. Rep. 21,526, 11 Fla. L. Weekly
Fed. C 234 UNITED STATES of America, Plaintiff-Appellee,
v.
Daniel J. FERN, Defendant-Appellant. Nos. 95-4099, 95-4596. United States Court of Appeals,
Eleventh Circuit. July 24, 1997.

Page 1300

Benedict P. Kuehne, Sale & Kuehne, P.A., Miami, FL, for Appellant.

William A. Keefer, U.S. Atty., Dawn Bowen, Marc Fagelson, Madeleine R. Shirley, Asst. U.S. Attys., Miami, FL, for Appellee.

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

Before HATCHETT, Chief Judge, COX, Circuit Judge, and MESKILL ^*, Senior Circuit Judge.

HATCHETT, Chief Judge:

In this consolidated appeal, we affirm the convictions of Daniel Fern for mail fraud, attempted witness tampering and violations of the Clean Air Act.

FACTS

The events leading up to Fern's indictment and eventual convictions began on October 3, 1993. Early that morning, a fire partially damaged the Monte Carlo Oceanfront Resort Hotel, a thirteen-story building on Miami Beach. The Monte Carlo was insured for up to two million dollars under a fire loss policy the Lexington Insurance Company issued. Under the fire loss policy, Lexington agreed to pay for asbestos removal and contamination

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at the Monte Carlo, but only if the asbestos-related contamination occurred as a result of a fire.

Shortly after the fire, Waquar Ahmed Khan, the president of the company which owned the Monte Carlo, contracted with Fern to determine whether the Monte Carlo's conference room and suites were contaminated with asbestos as a result of the fire. At the time, Fern owned an asbestos testing and consulting firm known as Air Environmental Research Services (AER). Fern then orchestrated a fraudulent scheme to (1) convince Lexington that the Monte Carlo was contaminated thoroughly with asbestos; and (2) profit from a bogus asbestos abatement project at the Monte Carlo.

The scheme unfolded, in part, as follows. Fern directed the Monte Carlo project manager, Jerry Joyner, to take a piece of "Mag Block"--a material containing chalky, crushable asbestos--from a crawl space at the Monte Carlo. Fern then directed Jerry Joyner to take some "hot" air samples from the Monte Carlo using the Mag Block to spike the samples. (In total, Jerry Joyner spiked over twenty samples, often in the presence of Fern, Fern's wife or other AER employees.) After Jerry Joyner spiked the samples, he labeled some of them--at Fern's request--as if they came from the Monte Carlo's pipe-chases. Fern made this request in order to support a claim of asbestos contamination within the entire Monte Carlo resort.

After receiving test results from the spiked air samples, Fern's company, AER, proceeded to prepare an emergency action plan detailing a proposed asbestos abatement project for the Monte Carlo. Neither Fern nor AER was licensed to conduct asbestos abatement or removal work. Consequently, Fern needed to list the name of an authorized asbestos abatement company on the asbestos abatement project paperwork required under 42 U.S.C. § 7413, a provision of the Clean Air Act. ¹

On October 13, 1993, Fern, or one of his employees, filed the first of three Ten-Day Notices completed during the course of the proposed Monte Carlo asbestos abatement project. This Ten-Day Notice--as well as subsequent notices filed on December 14, 1993, and April 4, 1994--contained false responses indicating that a company named Action Systems Unlimited, Inc., was responsible for the asbestos abatement project at the Monte Carlo, and that Judy Joyner--Jerry Joyner's sister-in-law and the president of Action Systems--was the on-site supervisor. ² The Ten-Day Notice also contained Judy Joyner's forged signature on the notice lines indicating that the information on the notice was correct and that an appropriately trained individual would be on-site at the Monte Carlo during the asbestos abatement project. ³ The first and third Ten-Day Notices also contain references to Judy Joyner's Florida asbestos removal license number.

Neither Judy Joyner nor Action Systems ever did any work at the Monte Carlo. Moreover, Judy Joyner testified at trial that she never authorized anyone to sign her name, use Action Systems's name or use her asbestos removal license number on a Ten-Day Notice for the Monte Carlo asbestos abatement project. Nevertheless, Fern instructed Jerry Joyner to tell anyone who inquired that he worked for Action Systems and that Action Systems was the actual asbestos removal contractor at the Monte Carlo.

At trial, two officials with the Metropolitan Dade County Department of Environmental Resources Management (DERM) testified about the significance of the Ten-Day Notices. According to Hugh Wong, chief of DERM's Air Pollution Control section, Ten-

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Day Notices are federally required notices that provide information on sites so that regulators can make sure that work is going to be done properly. Wong testified that he "absolutely" relied on the information contained in Ten-Day Notices and that it is important for the information to be accurate. Wong also indicated that DERM uses the information in Ten-Day Notices to determine if the contractor is certified or not, and stated that "if we have not inspected that contractor's work before, we try and target the inspections [to that contractor]." Ray Gordon, a DERM asbestos supervisor, testified that before employees in his office input information from Ten-Day Notices into their computers, they check to make sure that the contractor has a license number listed on the Ten-Day Notice and that the contractor is familiar to them. According to Gordon, the only way DERM officials can know if the individual removing asbestos is properly trained is "if they have the appropriate license."

In addition to submitting false Ten-Day Notices, Fern, and/or AER, also filed documents representing that the contents of the Monte Carlo (e.g., room furnishings and equipment) had to be destroyed because of asbestos contamination. In actuality, Fern gave away, sold or kept most of the Monte Carlo's furnishings and equipment.

Ultimately, Fern submitted a bill for over five hundred thousand dollars to the Monte Carlo for the cost of the bogus asbestos abatement project. The bill was converted into a proof-of-loss and submitted to Lexington via the mail. At trial, Daniel Corbeil, a former co-owner of Action Systems, testified that Fern bragged to him about how he fooled Lexington with spiked samples and with the Action Systems license.

In 1994, the Environmental Protection Agency (EPA) started investigating Fern's work at the Monte Carlo. Jerry Joyner and other AER employees cooperated with the EPA. Jerry Joyner played a critical role in the investigation; he taped his conversations with Fern. During those conversations, Fern offered Jerry Joyner ten thousand dollars to mislead investigators and told him to lie to the grand jury.

PROCEDURAL HISTORY

A grand jury indicted Fern on June 16, 1994, charging him with one count of witness intimidation. The government obtained a superseding indictment from the grand jury on August 12, 1994, charging Fern with eight other counts: three counts of making false statements, four counts of mail fraud and one count of witness tampering.

Fern's first trial began on November 28, 1994. Prior to the testimony of the government's first witness, Fern moved to dismiss the three false statement counts of the indictment for failure to allege essential elements of the charged crime. Fern argued that the indictment was insufficient because it did not allege that the statements were made willfully or that the statements were material. Fern also argued that the indictment did not inform him of the specific statements which were allegedly false. The district court denied Fern's motion and allowed the government to proceed with its presentation of evidence on all counts of the indictment. ⁴

On November 28, 1994, the government called its first witness, Bureau of Alcohol, Tobacco and Firearms (ATF) Special Agent Nelson Vasquez. Two days after Vasquez testified, on December 1, 1994, the prosecutor received a sworn statement dated December 1, 1994, from ATF Internal Affairs. The statement revealed that Vasquez misused his government credit card and was under investigation for theft of government property. The next day, Friday, December 2, 1994, the prosecutor produced a Brady disclosure regarding the Vasquez misconduct. The following trial day, Monday, December 5, 1994, Fern sought to recall Vasquez to the stand for further examination. The prosecutor informed Fern that Vasquez would invoke the

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Fifth Amendment and decline to answer defense questions. After verifying this, Fern asked for a mistrial, which the district court granted.

Fern subsequently moved to dismiss the case based on the Double Jeopardy Clause. Fern based his motion on the fact that Thomas Mulvihill, an Assistant United States Attorney (AUSA) in the Public Corruption Section, knew about the Vasquez investigation as early as November 15, 1994, but never shared his knowledge with the prosecutor in Fern's case.

The district court conducted an evidentiary hearing on the mistrial motion during which the district court questioned the prosecutor and AUSA Mulvihill, and heard arguments from the prosecutor and Fern regarding applicable case law. The district court also allowed Fern to question Mulvihill. During questioning, Mulvihill testified that he learned about allegations against Vasquez as a result of a conversation with an ATF Internal Affairs agent. During the conversation, the ATF agent told Mulvihill that it was possible that a "totally innocent explanation" existed for Vasquez's actions. Mulvihill also indicated that he and the ATF agent agreed that the matter should initially proceed through the ATF's administrative process. Mulvihill then stated that he did not even hear about the...