U.S. v. Gregoire

• Citation: 638 F.3d 962
• Decision Date: 30 March 2011
• Docket Number: No. 10–2203.,10–2203.
• Parties: UNITED STATES of America, Plaintiff–Appellee,v.David Earl GREGOIRE, Defendant–Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

638 F.3d 962

UNITED STATES of America, Plaintiff–Appellee,

v.David Earl GREGOIRE, Defendant–Appellant.

No. 10–2203.

United States Court of Appeals, Eighth Circuit.

Submitted: Dec. 14, 2010.Filed: March 30, 2011.

Eric L. Newmark, argued, Minneapolis, MN, for appellant.James Lackner, AUSA, argued, Lisa D. Kirkpatrick, AUSA, on the brief, St. Paul, MN, for appellee.Before LOKEN, ARNOLD, and BYE, Circuit Judges.LOKEN, Circuit Judge.

A jury convicted David Earl Gregoire of one count of interstate transportation of stolen property and five counts of mail fraud in violation of 18 U.S.C. §§ 2314 and 1341. The district court imposed a sentence of twenty-four months in prison, three years of supervised release, and $294,731.25 in restitution. It also ordered forfeiture of $252,521.17. Gregoire appeals, challenging the presence of third parties during a warrant search, the sufficiency of the evidence, the denial of a requested jury instruction, the fraud loss determination at sentencing, and the amount of restitution and forfeiture ordered. We reverse in part the restitution and forfeiture orders and otherwise affirm.

I. Suppression and Sufficiency Issues

Gregoire, a science teacher in Little Falls, Minnesota, also worked as a part-time contract employee of Reed's Family Outfitters (“Reed's”), a family-run sporting goods retailer with its main store in Walker, a second store in Baxter that closed in 2007, and a third store in Onamia that was being opened at the time of Gregoire's arrest. When Reed's management passed from father Jeff Arnold to son Adam Arnold in 2003, Gregoire continued to work on an as-needed basis in a number of different capacities. At trial, Adam Arnold testified that he trusted Gregoire to keep track of the hours he worked. Periodically, the two would “square up,” with Arnold paying Gregoire for the hours they agreed he had worked, either in cash at a rate of $10–12 an hour, or by “bartering” Reed's merchandise. Arnold testified that he had no record of the hours Gregoire worked, which varied widely, and no record of the merchandise that was bartered. No IRS W–2 forms were filed after 2000. Arnold testified that Reed's employees received twenty-percent employee discounts on most merchandise they purchased, and had been given “really crazy deals” on merchandise at an employee recognition event after the Baxter store was profitably sold in 2007.

In April 2008, a fishing tackle manufacturer's representative warned Adam Arnold that what appeared to be a large number of high-end products from Reed's were being sold on eBay at very low prices by “mrlatebid.” Arnold investigated and found that “mrlatebid” was an account apparently located in Minnesota that regularly sold items also sold at Reed's stores with no minimum bid, often below the manufacturer's minimum advertised price and even below wholesale cost. Using friends and acquaintances as anonymous buyers, Arnold purchased two items from “mrlatebid.” The return-address label on the packages listed Gregoire's name and home address. One item was a Nikon Rangefinder whose serial number was in the sequence of Nikon Rangefinders then stocked in Reed's warehouse. Arnold brought this information to the attention of local police.

Police investigators learned that Gregoire registered the user name “mrlatebid” in 2001 and had received over $140,000 from eBay sales of types of sporting goods also sold by Reed's. Little Falls police obtained a warrant to search Gregoire's home for items “mrlatebid” was listing for sale, for “other sporting goods that are still in the original packaging,” and for financial records and computers. In the home, police found a huge quantity of sporting goods in multiple locations, some in original Reed's packaging, some outside empty boxes, and some used items. Adam Arnold and his brother offered their assistance, and the officers allowed them to enter the home and identify products from Reed's. A few of these items were not in store packaging, such as promotional and novelty displays and high-end scopes mounted on rifles that Gregoire owned. Police seized 277 items identified as Reed's merchandise, and Gregoire's laptop computer. A subsequent warrant search of Gregoire's mother's home, again with Arnold assistance, resulted in the seizure of over 1000 items identified as having come from Reed's.

While his home was being searched, Gregoire was interviewed at the Little Falls police station. After being advised of his Miranda rights, he admitted taking merchandise from Reed's and selling it on eBay without the Arnolds' awareness or permission. Gregoire's laptop was eventually turned over to the United States Postal Service and searched without another warrant in May 2009, resulting in seizure of additional financial records of eBay transactions. Gregoire was indicted in September 2009. Count 1 charged him with stealing merchandise from Reed's and knowingly transferring it in interstate commerce. Counts 2 through 6 charged him with a scheme to defraud from August 2005 to June 2008 in which he knowingly took merchandise without Reed's knowledge or consent and offered it for sale over eBay. Each of these counts named a different transaction as part of the scheme to defraud. The indictment further sought forfeiture of any property “which constitutes or is derived from proceeds traceable to” these violations, or substitute property if “the above-described property is unavailable for forfeiture.”

At trial, six witnesses, including one out-of-state purchaser, testified they had purchased products from “mrlatebid” at prices significantly less than normal retail prices. Adam Arnold testified at length, explaining Reed's employment relationship with Gregoire, admitting he was sometimes paid in product, but denying knowing of or approving Gregoire's cut-rate eBay sales and insisting Gregoire did not work anywhere near the number of hours that would justify “bartering” the quantity of Reed's merchandise sold over eBay and found in the homes of Gregoire and his mother. Other government witnesses described the eBay auction process, the warrant searches of the homes, the Postal Service search of the laptop, and Gregoire's bank account records. The jury convicted him of all six counts. Facts relating solely to sentencing and forfeiture issues will be summarized in Part III of this opinion.

A. Search Issues. Gregoire appeals the district court's denial of his motion to suppress evidence seized during the search of his home and the subsequent search of his computer and evidence derived from these alleged Fourth Amendment violations. We review the district court's factual findings for clear error and its conclusions of law de novo. United States v. Clay, 618 F.3d 946, 956 (8th Cir.2010), cert. denied, ––– U.S. ––––, 131 S.Ct. 1540, 179 L.Ed.2d 309 (2011) (standard of review).

Gregoire first argues that having the Arnolds present during the search of his home violated his Fourth Amendment rights. The district court concluded that the Arnolds' presence was not impermissibly beyond the scope of the warrant. We agree.

In Wilson v. Layne, 526 U.S. 603, 611–12, 119 S.Ct. 1692, 143 L.Ed.2d 818 (1999), the Supreme Court noted: “Where the police enter a home under the authority of a warrant to search for stolen property, the presence of third parties for the purpose of identifying the stolen property has long been approved by this Court and our common-law tradition.” That is precisely what happened in this case. Citing no supporting authority, Gregoire argues the principle should not apply because the Arnolds' presence was not needed to identify the specific items named in the warrant. But this is not a constitutional prerequisite. When the police entered Gregoire's home to execute the warrant, they discovered a massive cache of items that appeared to fall within the universe of the suspected thefts. It was objectively reasonable for the officers to turn to the Arnolds, owners and managers of Reed's, a theft victim, for help in confirming which items there was probable cause to believe had been stolen. “The general touchstone of reasonableness which governs Fourth Amendment analysis ... governs the method of execution of the warrant.” United States v. Ramirez, 523 U.S. 65, 71, 118 S.Ct. 992, 140 L.Ed.2d 191 (1998). The execution of the warrant to search Gregoire's home was constitutionally reasonable.¹

Gregoire further argues that the government impermissibly seized items not in their original packaging and therefore not specifically named in the warrant. The district court concluded that the few items not specifically named were in plain view of officers properly executing the warrant, and their incriminating nature was immediately apparent. Gregoire argues that, even if these items were in plain view, their incriminating nature was not immediately apparent without improper help from the Arnolds. However, as we have explained, the Arnolds' presence did not violate the Fourth Amendment. Therefore, we agree with the district court that the Arnolds' identification of these items as having come from Reed's provided the officers with “probable cause to associate the property with criminal activity,” justifying their seizure. United States v. Garner, 907 F.2d 60, 62 (8th Cir.1990) (quotation omitted), cert. denied, 498 U.S. 1068, 111 S.Ct. 787, 112 L.Ed.2d 849 (1991); see Horton v. California, 496 U.S. 128, 135–42, 110 S.Ct. 2301, 110 L.Ed.2d 112 (1990). A third party's identification of property alleged to be stolen and the officer's inspection of the property “satisfied the need for the object's incriminating character to be immediately apparent.” PPS, Inc. v. Faulkner County, 630 F.3d 1098, 1105 (8th Cir.2011).

Gregoire next argues that the warrantless search of his laptop, and the one-year delay from its seizure to the subsequent search, violated his Fourth Amendment rights. The warrant authorized the seizure of “financial records ......