U.S. v. Leahy

• Decision Date: 24 April 1996
• Docket Number: No. 94-20611,94-20611
• Parties: 44 Fed. R. Evid. Serv. 440 UNITED STATES of America, Plaintiff-Appellee, v. Jeremiah Joseph LEAHY, IV, David D. Nece and Sherry Lynn Flanagan, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 624

82 F.3d 624

44 Fed. R. Evid. Serv. 440

UNITED STATES of America, Plaintiff-Appellee, v. Jeremiah Joseph LEAHY, IV, David D. Nece and Sherry Lynn

Flanagan, Defendants-Appellants.

No. 94-20611.

United States Court of Appeals, Fifth Circuit.

April 24, 1996.

Jeremiah J. Leahy, IV, San Antonio, TX, pro se.

W.E. Herman, III, Houston, TX, for Nece.

R. Christopher Goldsmith, Houston, TX, for Flanagan.

Cynthia DeGabrielle, James L. Powers, Paula C. Offenhauser, Asst. U.S. Attys., Gaynelle Griffin Jones, U.S. Atty., Houston, TX, for appellee.

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

Before JOLLY, DAVIS and EMILIO M. GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Defendants Jeremiah Joseph Leahy IV, David D. Nece, and Sherry Lynn Flanagan appeal their convictions for various crimes arising out of their involvement in a scheme to defraud the Veterans Administration. Leahy also appeals his sentence. Finding no reversible error, we affirm.

I

Nece owned and operated Great Western Roofing ("GWR") in Houston, Texas. Flanagan was Nece's chief assistant, and Leahy served as bonding agent for GWR. GWR successfully bid on a $1.1 million roofing project for a Veterans Administration ("VA") building in Hines, Illinois. The contract required GWR to obtain surety bonding, and the VA to make progress payments to GWR on a monthly basis, as the work proceeded. ¹ The contract gave GWR ninety days to complete the roofing project.

Unbeknownst to the VA, GWR was having financial problems. GWR had filed for Chapter 11 bankruptcy protection just days before receiving the contract on the Hines project. In addition, GWR had a poor record of paying two of its main suppliers, Alphaguard ("AGR") and Railton. Because of GWR's past record, AGR and Railton would not do business with GWR unless GWR set up an escrow account. The escrow agreement required MBank, the escrow agent, to transfer all the funds coming from the VA according to set percentages: forty-five percent to GWR, thirty-seven percent to AGR, and eighteen percent to Railton.

About a month-and-a-half after receiving instructions to begin the project, GWR presented invoices to the VA requesting a progress payment in the amount of $541,385.92, approximately half the contract price. According to testimony at trial, this first request was fraudulent in several respects. The invoice for the bond was false, and GWR had altered two invoices, one from AGR and one from Railton, to make it appear that materials had been purchased for the Hines project. In fact, GWR had not paid for these materials, and they had not been delivered to the job site. Unaware of the fraud, the VA wired $450,972.31 to GWR's escrow account in Houston as payment on this first request. As per the escrow agreement, MBank transferred $81,175.02 to Railton, $166,859.75 to AGR, and $202,937.54 to GWR's business account.

About ten days after making the first progress payment, the VA became concerned because GWR was falling behind on the project, and the quality of the work being done appeared to be deficient. The VA sent a "cure notice" to GWR addressing the fact that only eight percent of the project had been completed, as opposed to the estimated twenty-five percent that should have been done by that date. Two weeks later, GWR sent the VA a request for the second progress payment for $422,163.20. Comparing this set of invoices with the invoices contained in the request for the first progress payment, the Chief Engineer noticed some striking dissimilarities in the pricing of materials. After phoning some of the suppliers listed on the invoices, it became clear that the first set of invoices had contained significant misrepresentations. The VA sent a second "cure notice" to GWR noting that it was substantially behind on the project. Shortly thereafter, GWR walked off the job.

A grand jury indicted Nece and Flanagan for conspiracy to defraud the VA, in violation of 18 U.S.C. § 286 (count one); making and presenting false claims to an agency of the United States, in violation of 18 U.S.C. § 287 (counts two and three); wire fraud, in violation of 18 U.S.C. § 1343 (count four); and money laundering, in violation of 18 U.S.C. § 1957 (count five). Leahy was indicted on all counts except count three. The defendants were tried before a jury, and found guilty of all charged offenses. All filed timely notices of appeal.

II

The defendants argue that the district court erred when it removed a juror, Charles Lawrence Orr, on the grounds that his hearing impairment, discovered only after deliberations had begun, made him incompetent to deliberate. The defendants contend that this particular juror was a hold out on at least some counts. According to the defendants, the other jurors, desiring to end the trial more quickly, conspired to have this juror removed from the group. ²

The Federal Rules of Criminal Procedure state that "if the court finds it necessary to excuse a juror for just cause after the jury has retired to consider its verdict, in the discretion of the court a valid jury verdict may be returned by the remaining eleven jurors." FED.R.CRIM.P. 23(b); United States v. O'Brien, 898 F.2d 983, 986 (5th Cir.1990). The district court has the discretion to remove a juror "whenever the judge becomes convinced that the juror's abilities to perform his duties becomes impaired." United States v. Huntress, 956 F.2d 1309, 1312 (5th Cir.1992), cert. denied, 508 U.S. 905, 113 S.Ct. 2330, 124 L.Ed.2d 243 (1993) (internal quotation marks omitted). We will not disturb the district court's decision to remove a juror unless it has prejudiced the defendant, and we will only find prejudice if the juror was discharged without factual support or for a legally irrelevant reason. Id.

Despite the defendants' suppositions concerning the removal of this juror, the record provides ample support for the district court's decision to dismiss juror Orr. Not only did the juror admit his partial deafness, but all eleven other jurors testified that juror Orr's hearing impairment precluded meaningful deliberation. ³ Juror Orr apparently refused to discuss the case in deliberations. Testimony indicated that juror Orr had not heard significant amounts of testimony, and could not participate in deliberations because he could not hear, and thus could not follow the conversations in the jury room. ⁴ The district court's decision to remove juror Orr was further supported by juror Orr's confusion and need for clarification when the judge instructed the jury, except juror Orr, to return to the jury room. ⁵ We therefore conclude that juror Orr was not discharged for irrelevant or factually insufficient reasons. ⁶ See United States v. Speer, 30 F.3d 605, 611 (5th Cir.) (upholding district court's decision to dismiss juror based on "her inability to understand or communicate effectively in English"), cert. denied, --- U.S. ----, 115 S.Ct. 603, 130 L.Ed.2d 514 (1994); United States v. Quiroz-Cortez, 960 F.2d 418, 419 (5th Cir.1992) (noting that a juror was dismissed after deliberations had begun because the juror "was hard of hearing and may not have heard all of the trial testimony"); Huntress, 956 F.2d at 1313 (upholding district court's decision to dismiss mentally ill juror even though juror's mental illness did not appear during voir dire or during the trial); accord United States v. Acker, 52 F.3d 509, 515 (4th Cir.1995) (upholding district court's decision to dismiss juror due to an ankle injury because "[t]he court did not know when this juror was likely to return," and the "remaining jurors were present, ready to resume deliberations, and the alternate jurors had been excused"). Accordingly, we find that juror Orr's dismissal in no way prejudiced the defendants.

III

The defendants argue that the district court's instructions to the jury constructively amended the indictment. They contend that the instructions regarding the conspiracy allowed the jury to convict them of conspiring with someone other than their co-defendants. ⁷ Additionally, the defendants argue that this instruction allowed the jury to convict them for prior frauds against the "United States" rather than for defrauding the Veterans Administration as charged.

A constructive amendment occurs, "when the jury is permitted to convict the defendant upon a factual basis that effectively modifies an essential element of the offense charged." United States v. Holley, 23 F.3d 902, 912 (5th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 635, 130 L.Ed.2d 542 (1994). If an instruction constructively amends the indictment, we must reverse the conviction. United States v. Restivo, 8 F.3d 274, 279 (5th Cir.1993), cert. denied, --- U.S. ----, 115 S.Ct. 54, 130 L.Ed.2d 13 (1994); United States v. Ylda, 653 F.2d 912, 914 (5th Cir. Unit A 1981). ⁸

Reviewing the charge as a whole, we find that the district court's instructions did not constructively amend the indictment. As to the conspiracy instruction, the defendants argue that the language requiring the jury to find that "two or more persons made an agreement to defraud the government" allowed the jury to convict the defendants for the conduct of "persons" not charged in the indictment. This argument disregards the balance of the instructions, which focused the jury's attention squarely on the conduct of the three charged defendants. Indeed, the language the defendants point to is the only such "general" reference in the instruction. Further, the jury was instructed that the defendants were "not on trial for any act, conduct, or offense not alleged in the indictment" and that the jury should not be concerned with "the guilt of any other person or persons not on trial as a defendant in this case." Finally, the jury received a copy of the indictment for use during deliberations. Based on this record, we hold that the instructions did not constructively amend the indictment on the conspiracy...