U.S. v. Isaiah

• Decision Date: 20 January 2006
• Docket Number: No. 04-4343.,04-4343.
• Citation: 434 F.3d 513
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Sharmila B. ISAIAH, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

434 F.3d 513

UNITED STATES of America, Plaintiff-Appellee, v. Sharmila B. ISAIAH, Defendant-Appellant.

No. 04-4343.

United States Court of Appeals, Sixth Circuit.

Argued: December 9, 2005.

Decided and Filed: January 20, 2006.

COPYRIGHT MATERIAL OMITTED

ARGUED: Jacob A. Cairns, Kravitz, Gatterdam & Brown, LLC, Columbus, Ohio, for Appellant. Dale E. Williams, Jr., Assistant United States Attorney, Columbus, Ohio, for Appellee. ON BRIEF: Max Kravitz, Kravitz, Gatterdam & Brown, LLC, Columbus, Ohio, for Appellant. Dale E. Williams, Jr., Assistant United States Attorney, Columbus, Ohio, for Appellee.

Before: MOORE, ROGERS, and McKEAGUE, Circuit Judges.

OPINION

ROGERS, Circuit Judge.

Defendant Sharmila Isaiah, who was judicially acquitted of two criminal charges, appeals the district court's denial of her request for expenses and attorneys' fees arising from her criminal defense. The United States charged Isaiah with participation in a money-laundering conspiracy and with bank fraud. After the government rested its case, the district court, pursuant to Fed.R.Crim.P. 29, acquitted Isaiah because it determined that the government had failed to present sufficient evidence of Isaiah's specific intent to enter into a conspiracy and to defraud a financial institution. Isaiah then moved to recover costs and attorneys' fees under the Hyde Amendment, Pub.L. No. 105-119, § 617, 111 Stat. 2519 (1997) (reprinted in 18 U.S.C. § 3006a, Statutory Notes). The district court, however, denied her request because, as "the question of Isaiah's intent was a close one," the government had not engaged in a vexatious, frivolous, or bad faith prosecution. We affirm.

I.

In the summer of 2002, Packaging Materials, an Ohio company that manufactures plastic bags sold throughout the United States, discovered a counterfeit check among the items drawn on its accounts-payable checking account with Firstar Bank in Cambridge, Ohio. The check was to the order of "Sharmie Isaiah" in the amount of $38,894.74.

Isaiah is a resident of Indiana with a bank account at Indiana Members Credit Union. She was romantically involved with Ikenna Myers, and Myers introduced her to his high school friend Mitch Yanni when the two men traveled from Columbus to Indianapolis to visit Isaiah. Myers testified that Yanni asked him whether Isaiah had a bank account, but Myers stated that he did not know and that Yanni would have to ask Isaiah. Myers testified that he later heard Isaiah agree to Yanni's request for Isaiah to deposit a check made to her order. After Isaiah agreed to negotiate the check, Myers and Yanni returned to Columbus. While the pair traveled, Yanni called Isaiah and asked for her name, bank-account number, and the name of her bank.

Approximately two weeks later, Myers, Yanni, and two of Yanni's friends returned to Indianapolis. Myers testified that, to the best of his knowledge, Yanni and Isaiah had made arrangements for the deposit of the check that Yanni had brought with them. After the group assembled and arrived at Isaiah's bank, Yanni handed Isaiah the check to her order for $38,894.74, and she went inside the bank to deposit it. She handed the deposit receipt to Yanni.

Yanni and Myers asked Isaiah to write some checks to their order, and she mailed the checks to them. Check number 1021 was to the order of Myers in the amount of $5000, and check number 1022 was to the order of Yanni in the amount of $4000. Yanni and Myers were not able to negotiate the checks in Columbus, so they drove to Indianapolis to cash the checks at Isaiah's bank. The bank contacted Isaiah when the checks were presented, and Isaiah verified that the checks were good.

A week or two later, Yanni and Myers returned to Indianapolis with Justin Alles to meet Demetrius Bynum, one of Yanni's schoolmates. As the three men traveled to Indianapolis, Yanni telephoned Isaiah and had her write checks from her account to the order of Alles and Bynum, neither of whom Isaiah knew. The three men went to Isaiah's apartment, where she gave the men the checks, and they left. The three men then picked up Bynum. Check 1028 was to the order of Alles for $5000, and Check 1029 was payable to Bynum for $5000. These checks were cashed at Isaiah's bank after the tellers obtained confirmation from Isaiah that the checks were good.

Soon after, an investigator from Firstar Bank contacted Isaiah and told her that the check drawn on Packaging Materials' account was counterfeit. The investigator testified that Isaiah sent him a written statement, a copy of the checks to the order of Myers and Yanni, and her bank statement for the relevant period. In her statement to the investigator, Isaiah identified Yanni as "Yani Michel" and failed to mention the checks made to the order of Alles and Bynum. She wrote that Myers (not Yanni, as Myers later testified at trial) asked her to negotiate the check from a settlement because Myers did not have a checking account. Myers' request for checks "did not make sense since he said he couldn't get the check in the first place but he said that he would cash it at my bank." She continued, "This made me think something was wrong with the whole situation but all I could do at that point was get the money out and give it to Ikenna [Myers]." Her bank statement revealed that Isaiah had used some of the money from the counterfeit check.

In August 2003, a federal magistrate judge issued several criminal complaints and arrest warrants, including a complaint and warrant for Isaiah. The complaint charged her with knowingly aiding and abetting a scheme to defraud a financial institution. Several persons pled guilty to various offenses and testified at Isaiah's trial. In December 2002, a federal grand jury returned an indictment, charging Issa Conteh, Yanni, Keith Edward Walker, Deepika Benjamin, Isaiah, Joshua Ingram, and Heather Watkins with various offenses. Isaiah was charged with participating in a money-laundering conspiracy, in violation of 18 U.S.C. § 1956(h), and aiding and abetting bank fraud, in violation of 18 U.S.C. § 1344(1) and (2). Two of these criminal defendants entered guilty pleas before the trial began. The remaining criminal defendants elected to go to trial.

At the joint trial, the evidence revealed that Conteh managed a nationwide counterfeiting operation. According to Mahamdou Tunkara, an individual involved in the counterfeiting who pled guilty, Conteh recruited and relocated individuals so that they could open bank accounts under assumed names around the United States. The individuals would then deposit counterfeit checks into the bank accounts. The individual would next receive instructions for withdrawing the money in multiple transactions. Once the individual had withdrawn all of the counterfeit check proceeds from the account, the organization relocated the individual so that the counterfeit scam could begin in a new location.

The evidence reflected that Conteh and Yanni knew each other and that Yanni oversaw counterfeiting operations in the Columbus area. Instead of recruiting individuals to relocate to various parts of the United States, Yanni or his confederates in the counterfeiting operation convinced other individuals, mostly young women, to negotiate checks in their personal bank accounts. Several trial witnesses, who had pled guilty to crimes related to the same counterfeiting scheme, testified that they did not know that the checks were counterfeit at the time that they negotiated them.

Two aspects of the testimony of one of these witnesses, Haniya Sabir, figure in this appeal. Sabir testified that she had given Yanni her bank account number and that Yanni had at least once obtained her account balance. Sabir testified, however, that she did not know how Yanni did so without her account password, which she had not given to him. Isaiah now contends that the government's failure to investigate this discrepancy demonstrates that the government prosecuted Isaiah in bad faith.

Also, on recross of Sabir, Isaiah's defense counsel asked Sabir whether she had known that the check that she deposited was counterfeit, and Sabir answered no. Presumably, the purpose of the question was to demonstrate that the government knowingly accepted Sabir's guilty plea despite evidence that she had been tricked into participating in the counterfeiting scheme. The government followed up by presenting Sabir with the Information that charged her with uttering a counterfeit instrument and asking her whether that Information included any language referring to "intent to defraud." Sabir answered that it did not. After Isaiah's defense counsel objected that the government's inquiry was irrelevant and misleading, the government explained that its purpose was to demonstrate that 18 U.S.C. § 513, the statute that Sabir pled guilty to violating, does not require intent to defraud. Instead, section 513 requires only intent to deceive, a mental state that is easier to prove than intent to defraud. The district court noted that intent was at issue and overruled defense counsel's objection. However, the district court, over the government's objection, then permitted Isaiah's defense counsel to ask Sabir clarifying questions as to whether she understood the terms contained in her plea agreement and Information.

At the conclusion of the government's case, Isaiah moved for judgment of acquittal pursuant to Fed.R.Civ.P. 29 because, she argued, the government had not produced sufficient evidence for the jury to find that she had specific intent to defraud or to join a money-laundering conspiracy. The government countered that reckless indifference was sufficient to satisfy the scienter requirement and that the government had offered sufficient circumstantial evidence of Isaiah's reckless indifference to satisfy its burden. Isaiah replied that United States v. DeSantis, 134 F.3d 760 (6th Cir. 1998), stands for the proposition that recklessness is relevant only to whether...