U.S. v. Hartley
| Decision Date | 17 June 1982 |
| Docket Number | No. 80-5572,80-5572 |
| Parties | 11 Fed. R. Evid. Serv. 128 UNITED STATES of America, Plaintiff-Appellee, v. G. Cecil HARTLEY, Travis Dell and Treasure Isle, Inc., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Arnold D. Levine, Tampa, Fla., for G. Cecil Hartley and Travis Dell.
James M. Russ, I. Paul Mandelkern, Orlando, Fla., for Treasure Isle, Inc.
Lynn Hamilton Cole, Asst. U. S. Atty., Tampa, Fla., Breckinridge Wilcox, Dept. of Justice, Fraud Section, Washington, D. C., for the U. S.
Appeals from the United States District Court for the Middle District of Florida.
Before GODBOLD, Chief Judge, HILL and FAY, Circuit Judges.
Three defendants appeal from their convictions of conspiracy, mail fraud, violations of the National Stolen Property Act, and a violation of the Racketeer Influenced and Corrupt Organization Act (RICO). Their appeal has launched this Court into an extensive fishing expedition undertaken by the appellants. The defendants also appeal cumulative sentences imposed by Judge George C. Carr of the Middle District of Florida. The defendants, G. Cecil Hartley, Travis Dell, and Treasure Isle, Inc., baited their appellate hooks with a large assortment of tempting issues-fourteen by their count-in an attempt to land the prize catch-a reversal. 1 We found only two deserving of a judicial nibble, but none worthy of setting the hook. Upon reeling through this opinion, the appellants will unfortunately find their catch should be mounted as "the one that got away." Affirmed.
Treasure Isle, Inc., is a Florida corporation specializing in the production of breaded seafood products. Its production of frozen breaded shrimp for consumption by the military provided the basis of the thirty-three count indictment. 2 G. Cecil Hartley serves as one of Treasure Isle's vice presidents; Travis Dell occupies the position of plant manager. Count one charged the defendants with conspiring to defraud the United States Government by supplying After approximately ten weeks of trial, a jury convicted the three defendants of all thirty-three counts. 4 Treasure Isle was fined $167,000 for its participation in the first thirty-two counts and was sentenced to perform community service for its conviction under the RICO statute. The District Court sentenced Hartley and Dell to one year with three year's probation and a special condition of community service. Hartley additionally received a $25,000 fine.
breaded shrimp that did not conform to designated military specifications. 3 The shrimp contained too much breading, were of inadequate size, and had not been properly cleaned. Counts two through fifteen concerned mail fraud violations regarding invoices sent to the government seeking payment for the nonconforming shrimp. Counts sixteen through eighteen charged mail fraud violations for invoices directly related to sample production lots under investigation. Counts nineteen through thirty-two charged defendants with the interstate transportation of money obtained by fraud which consisted of United States Treasury checks corresponding to the invoices involved in counts two through eighteen. The RICO count charged that the activities outlined in the previous thirty-two counts established a pattern of racketeering
The District Court denied the defendants' post-trial motions for an arrest of judgment, a judgment of acquittal, and a new trial.
At the center of this case are the imaginatively deceptive schemes designed to circumvent the inspection procedures implemented by the government to assure the quality of the shrimp purchased. The indictment covered a time period prior to 1970 and continuing to July, 1978. During this period three inspection procedures were employed-each inducing the defendants to charter another vessel with which to defraud the government. 5
Apparently the government had begun purchasing shrimp from Treasure Isle in the late 1960's. Pre-1974, military inspectors made individual examinations of each box of raw shrimp as well as every tank of peeled shrimp. 6 If the shrimp satisfied the inspection criteria, an "accept" card was placed on the inspected box or tank. Nonconforming shrimp received a "reject" card.
Testimony revealed that Dell directed Treasure Isle employees to remove "reject" cards from inspected tanks, replace them with "accept" cards from other inspected tanks, and destroy the "reject" cards. In this manner, tanks which had already been "accepted" would be reinspected only to again be approved by the military inspector. Rejected tanks would now bear the "accept" cards and would be placed into the subsequent production process. Treasure Isle's cooler foreman implemented the same plan on the boxes of raw shrimp at the instigation of Dell and Hartley. But, switching cards was just the beginning.
At the direction of Dell and Hartley, a Treasure Isle employee modified a weight used by the inspectors in determining the Treasure Isle employees also falsified production sheets to allow for after-hour processing of shrimp, which would then be packed without having been inspected. And, employees were directed to inform the inspectors that they miscounted boxes of inspected shrimp permitting additional uninspected boxes to be added during the inspector's absence.
number of shrimp per pound. The modification was accomplished by cutting two and one-quarter ounces off of a five-pound weight. By doing so, less shrimp were required to balance out the five-pound weight, which now weighed in at four pounds, thirteen and three-quarter ounces.
The government changed its inspection system in October, 1974. Rather than inspecting each individual box, the inspectors began a random sampling of the "end product." Under this new system, inspectors selected thirteen boxes of breaded shrimp from each day's production. The boxes were stored overnight in a locked freezer for which only the inspectors supposedly possessed a key. Each box was marked by the inspectors prior to being placed in the locked freezer. The following day, the inspectors would retrieve the samples and conduct an analysis to determine the shrimp's conformance with the requisite specifications. If the sample shrimp conformed, the inspectors approved the entire production lot for that day.
Upon receiving notice that an entire lot had been rejected under the new system, the defendants created a new means by which to accomplish their goal. Not to be outdone by the government's selective sampling, Treasure Isle employees prepared their own sample lot. Each day a "sample run" was made in which the largest shrimp were meticulously processed. Great care was taken to peel and devein the largest shrimp; and extra caution was taken to insure no more than 40% of the shrimp's total weight was attributable to breading. The "sample run" was then set aside for special work later that evening. The production then returned to "normal". Smaller shrimp, less careful cleaning and deveining, extra breading, and sloppy freezing became the order of the day.
Reminiscent of Houdini, each night after the inspectors had departed, Treasure Isle employees would sneak into the locked freezer, 7 duplicate the inspector's markings on the "sample run" boxes, and substitute them for the sample lot selected by the inspectors earlier that day. Thus, the next day the inspectors would test only the best of Treasure Isle's production, which unsurprisingly met the military's specifications.
This was not the extent of the defendants' scheme, however. Testimony revealed that chemicals were added to large batches of shrimp which had developed a foul odor to enable the shrimp to be processed and frozen undetected. Rejected shrimp would be secretly added to other production lots. Shrimp received from abroad were also processed in the lots sold to the government. Once again, false counts were given to inspectors to enable Treasure Isle to include uninspected shrimp in government orders. And the company developed signals to alert employees of an inspector's approach.
The conspiracy reached beyond the officers and employees of the corporation, and included military inspectors assigned to the plant. Boxes of shrimp, liquor, and money were used on several occasions to bribe inspectors to falsify reports. The schemes appeared to grow and diversify until uncovered by one of the military inspectors.
Years elapsed before the government learned of the shenanigans being played by Treasure Isle, its officers and employees and the military inspectors. In December, 1977, military inspector David Klopp, noticed a difference in the markings of the sample boxes stored for inspection and those inspected the following day. This prompted him to conduct an experiment by specially marking boxes in an unusual location and checking the markings the next day. He found the boxes inspected lacked the special markings and always satisfied the military specifications. Two production lots were then designated for a more intensive investigation, the infamous lots F6968 and F7008.
Once assured that the switch had taken place, Klopp's supervisors reported to the Quality Assurance Officer at the Defense Personnel Support Center, who assigned a criminal investigator to the case. Soon thereafter the investigator interviewed a Treasure Isle employee, who revealed that the random samples selected by Klopp and bearing his special markings had been placed back into production lots F6968 and F7008. Arrangements were then made to secure these lots at their intended destinations to allow for proper testing.
Lot F6968 arrived in Watertown, Massachusetts, and was subsequently tested there by both military and civilian personnel. Sections of lot F7008 were secured and tested in Norfolk, Virginia, and Fort Worth and San Antonio, Texas. The government found the samples did not conform to the requisite specifications....
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