U.S. v. Sassanelli

• Decision Date: 03 July 1997
• Docket Number: No. 95-2074,95-2074
• Parties: 47 Fed. R. Evid. Serv. 515 UNITED STATES of America, Plaintiff-Appellee, v. William D. SASSANELLI, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 495

118 F.3d 495

47 Fed. R. Evid. Serv. 515

UNITED STATES of America, Plaintiff-Appellee, v. William D. SASSANELLI, Defendant-Appellant.

No. 95-2074.

United States Court of Appeals, Sixth Circuit.

Submitted March 13, 1997.

Decided July 3, 1997.

Christopher P. Yates (briefed), Federal Public Defenders Office, Grand Rapids, MI, for Plaintiff-Appellee.

Douglas R. Mullkoff (briefed), Ann Arbor, MI, for Defendant-Appellant.

Before: BOGGS and BATCHELDER, Circuit Judges; and FORESTER, District Judge. ^*

OPINION

BOGGS, Circuit Judge.

The defendant below, William Sassanelli, appeals his conviction on twenty-six counts all of which stem from his participation in a scheme to defraud his employer, Budget Rent A Car. He also appeals the resulting sentence. For the reasons explained below, we affirm his conviction but reverse his sentence, and remand the case to the district court for further proceedings.

I

Sassanelli was the general manager of car rental operations for Budget Rent A Car's Detroit office. In November 1989, Budget began to expand its facilities at Detroit Metropolitan Airport. Sassanelli agreed with Michael Kallen, the president of Kendall Construction Company, to hire Kendall as the general contractor for the construction project. Sassanelli and Kallen also agreed to submit fraudulently inflated or fictitious subcontractors' invoices to Budget for payment. The total loss to Budget from this scheme was approximately $834,000. Dwight T. Lynn, the owner of one of the subcontractors on the project, Lynn Equipment Company, also participated in the scheme; at Sassanelli's direction, he submitted inflated and fictitious invoices and passed the resulting profits along to corporations controlled by Sassanelli and Kallen.

The construction project was originally expected to cost $1.5 million, but ultimately cost Budget over $5.5 million. In 1991, Budget officials became suspicious of the cost overruns and demanded an explanation from Sassanelli. On April 8 of that year, Sassanelli and Kallen collaborated on a letter from Kendall Construction to Sassanelli that provided a false explanation for the overruns. Shortly thereafter, Budget fired Sassanelli. However, because he was warned in advance of his discharge, he was able to shred some documents in his office before he was told to leave.

The Federal Bureau of Investigation investigated the alleged fraud throughout 1991. While the criminal investigation was in progress, Budget filed a civil action against Sassanelli and the other participants in the fraud. In the course of that litigation, on November 14, 1994, Sassanelli submitted an affidavit in opposition to Budget's motion for summary judgment. Paragraph 12 of the affidavit states:

I have no knowledge that any of the individual contractors and/or companies that are alleged by Michael Kallen to have participated in a kick-back scheme with him nor did I participate with them either directly or indirectly in any type of kick-back scheme.

That paragraph was perjurious, as well as ungrammatical.

On November 22, 1994, a federal grand jury indicted Sassanelli on two counts of mail fraud, in violation of 18 U.S.C. § 1341; eleven counts of interstate transportation of a check obtained by fraud, in violation of 18 U.S.C. § 2314; and twelve counts of money laundering, in violation of 18 U.S.C. § 1956. On January 24, 1995, a grand jury returned a second indictment, charging him with a single count of perjury, in violation of 18 U.S.C. § 1621. Although a number of Sassanelli's allegations in his affidavit were false, the perjury count rested solely on paragraph 12.

The two indictments were consolidated pursuant to FED.R.CRIM.P. 13, and the case proceeded to trial on April 27, 1995. At trial, Lynn testified that at one point he told Kallen that he no longer wished to participate in the scheme. Lynn testified that Kallen responded by saying that if Sassanelli heard that, he would "go crazy." Shortly thereafter, Sassanelli visited Lynn. In Lynn's words, Sassanelli "pulled up and got out of his car and opened--he was out of his car, and pointed at the compartment between the seats and said, there is a .9 millimeter Baretta [sic] in there. I'm going to blow your blank head off. I took that as a serious threat, yes." Lynn testified that, after that encounter, he decided that he would be wise to continue his participation in the scheme. After Lynn's testimony, the government moved to enter into evidence a copy of Sassanelli's permit to carry a 9-millimeter Beretta. The district court overruled Sassanelli's objection to the introduction of the permit under FED.R.EVID. 403.

At the conclusion of the trial, the district court instructed the jury that for the crime of perjury, the government must prove the following three essential elements beyond a reasonable doubt:

1. That the defendant signed the affidavit described in the indictment and was under an oath at the time that he signed it;

2. That the affidavit was false, as described in the indictment; and

3. That the defendant knew at the time that the affidavit was false.

At no time did the district court instruct the jury that materiality was an element of the crime of perjury. On May 12, 1995, the jury found Sassanelli guilty on all counts, including the perjury count. At sentencing, the district court imposed a two-level sentencing enhancement on Sassanelli for obstruction of justice, based on Sassanelli's further perjury in the criminal trial. Accordingly, the district court sentenced Sassanelli to concurrent prison terms of 60 months for mail fraud, 60 months for perjury, 67 months for interstate transportation, and 67 months for money laundering. Sassanelli now appeals, raising three arguments. We consider each in turn.

II

Sassanelli first argues that his conviction on all counts should be reversed because his handgun permit should have been excluded from evidence under FED.R.EVID. 403. We review a district court's Rule 403 determination only for an abuse of discretion. See United States v. Garcia, 20 F.3d 670, 672 (6th Cir.1994). Under such a standard of review, this court takes a maximal view of the probative effect of the evidence and a minimal view of its unfairly prejudicial effect, and will hold that the district court erred only if the latter outweighs the former. See United States v. Sanders, 95 F.3d 449, 453 (6th Cir.1996). Sassanelli argues that the introduction into evidence of the permit was erroneous even under this highly deferential standard of review; since Lynn never saw the gun and did not know about the permit, the permit was irrelevant to any material issue.

We disagree. If anything, Lynn's ignorance of the permit added to its probative force. The permit independently corroborated Lynn's testimony; the fact that the defendant did in fact own a Beretta tended to establish the truthfulness of Lynn's statement that Sassanelli threatened him by referring to a Beretta. In turn, Lynn's testimony was highly probative of Sassanelli's role in the fraud. Given that the defendant did not argue either below or on appeal that Lynn's testimony itself should have been excluded, any additional prejudice arising from the introduction of the permit was minimal. Therefore, we cannot state that the district court abused its discretion by admitting the permit into evidence.

III

Sassanelli next argues that his perjury conviction under 18 U.S.C. § 1621 should be reversed because the district court failed to instruct the jury with respect to all of the elements of the crime. As noted above, the district court instructed the jury with respect to three of the elements of the crime of perjury, but failed to instruct them that they must also find that the false statement was material. This instruction was in accord with our court's precedents at that time, which held that, while materiality was an element of perjury, the trial court could hold a statement to be material without submitting that issue to the jury. See United States v. Adams, 870 F.2d 1140, 1146-47 (6th Cir.1989); United States v. Abadi, 706 F.2d 178, 180 (6th Cir.1983). Perhaps in recognition of these precedents, Sassanelli did not object to the instruction.

About a month later, the Supreme Court cast doubt on those precedents in United States v. Gaudin, 515 U.S. 506, 115 S.Ct. 2310, 132 L.Ed.2d 444 (1995). The Court reviewed a conviction under a different section, 18 U.S.C. § 1001, for making a materially false statement in a matter within the jurisdiction of a federal agency. The trial court had failed to submit the element of materiality to the jury. The Court noted that the Fifth and Sixth Amendments "require criminal convictions to rest upon a jury determination that the defendant is guilty of every element of the crime with which he is charged, beyond a reasonable doubt," and unanimously held that the trial court violated that rule by reserving the issue of materiality for its own decision. Gaudin, 515 U.S. at 508-10, 115 S.Ct. at 2313. In so doing, the Court thus rendered suspect the jury instructions on perjury given in Sassanelli's case. However, although Gaudin was decided more than three months before his sentencing, Sassanelli never filed a motion for a new trial.

The government argues that Sassanelli cannot satisfy the four-part test under FED.R.CRIM.P. 52(b) for appellate court reversal based on an erroneous instruction, where the defendant failed to object before the district court: (1) that the instruction was error; (2) that the error was plain; (3) that the plain error affected the defendant's substantial rights; and (4) that the court should exercise its discretion to correct the error because the error "seriously affected the fairness, integrity, or public reputation of judicial proceedings." United States v. Olano, 507 U.S. 725, 732, 113 S.Ct. 1770, 1776, 123 L.Ed.2d 508 (1993); see United States v. Jones, 108 F.3d 668, 670 (6th Cir.1997) (en banc). In response,...