U.S. v. Stephens

• Decision Date: 31 January 2008
• Docket Number: No. 06-2892.,06-2892.
• Citation: 514 F.3d 703
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Wayne STEPHENS, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

514 F.3d 703

UNITED STATES of America, Plaintiff-Appellant, v. Wayne STEPHENS, Defendant-Appellee.

No. 06-2892.

United States Court of Appeals, Seventh Circuit.

Argued May 24, 2007.

Decided January 31, 2008.

Edmond E. Chang (argued), Office of the United States Attorney, Chicago, IL, for Plaintiff-Appellant.

Barry Levenstam, Irina Dmitrieva (argued), Jenner & Block, Chicago, IL, for Defendant-Appellee.

Before POSNER, KANNE, and ROVNER, Circuit Judges.

KANNE, Circuit Judge.

This is the second time this court has considered the case of defendant Wayne Stephens. Stephens, a Yale-educated corporate executive in New York, was convicted of three counts of wire fraud and was sentenced to 21 months' imprisonment. We previously affirmed the conviction against a sufficiency-of-the-evidence challenge. United States v. Stephens, 421 F.3d 503 (7th Cir.2005) ("Stephens I"). In that opinion, this court also concluded that a prima facie Batson violation existed under step one of the three-part Batson test. See Batson v. Kentucky, 476 U.S. 79, 106 S.Ct. 1712, 90 L.Ed.2d 69 (1986). The case was remanded to the district court for further proceedings to be conducted pursuant to steps two and three of the Batson test. The district court determined on remand that the government had exercised its peremptory challenges to exclude prospective minority jurors in violation of the Constitution, and granted Stephens a new trial. The government appeals. We conclude there was no Batson violation and therefore reverse. The convictions are reinstated and affirmed, and the case is returned to the district court for resentencing pursuant to United States v. Paladino, 401 F.3d 471 (7th Cir.2005).

I. HISTORY

Stephens, an African American, was an in-house manager overseeing computer and technology support at the New York City office of Accenture. Accenture is the largest consulting firm in the world, with 158,000 employees in 49 countries. See Wikipedia, Accenture, http://en.wikipedia. org/wiki/Accenture (last visited Dec. 10, 2007). Accenture, like many large companies, required its employees to submit a time and expense report. Accenture used a computerized program, "ARTES," as its time and expense reporting program in 2000. The ARTES system had a feature that allowed an employee to manually add money to, or deduct money from, his paycheck. Apparently, the "add to/deduct from" feature was designed for expenses that were not addressed in other parts of the ARTES program.

Stephens used the "add to" feature to add amounts to his paycheck. From April through August 2000, he added approximately $68,000 to his paychecks. Accenture did not become aware that Stephens was increasing his paycheck until August 2000, when its internal auditors identified a $22,980 "add to" request made by Stephens. Accenture fired Stephens and reported his conduct to the government.

To convict Stephens of wire fraud, the government was required to prove beyond a reasonable doubt that: "(1) there was a scheme to defraud; (2) wires were used in furtherance [of} the scheme; and (3) Stephens participated in the scheme with the intent to defraud." Stephens I, 421 F.3d at 507 (citing United States v. Owens, 301 F.3d 521, 528 (7th Cir.2002)). It was undisputed that Stephens took the money from Accenture through the "add to" function in ARTES. It was also undisputed that Accenture transferred the money to Stephens via wire transfers from Accenture's bank in Chicago, Illinois, to Stephens's personal bank account in New Jersey. Consequently, the trial centered around whether there had been a scheme to defraud Accenture and whether Stephens had participated in that scheme.

The government presented evidence at trial that Stephens had engaged in a scheme because he disguised his "add to" requests so that Accenture would not identify them. This included Stephens's failure to submit copies of his ARTES reports to his supervisor and Accenture's accounting department, as required by Accenture procedure. Evidence was also presented that Stephens had submitted his reports for review in the period that he worked at Accenture before he began to use the "add to" feature to take money from Accenture.

On the intent issue, the government provided evidence of Accenture's personnel policies, Stephens's training on those policies, and his prior compliance with those policies before he began taking money via the "add to" function. The government also provided evidence that Stephens used the money to subsidize a lifestyle beyond his means for himself and his family. Thus, the government argued that Stephens knew that he should not take money from Accenture but did so anyway out of greed.

The government also presented evidence about how Stephens structured his "add to" requests. The first "add to" request was for $7,800 and Stephens also had a legitimate expense of $78 during that pay period. The government argued that this demonstrated his criminal intent because Stephens could claim a decimal error if challenged by Accenture. However, Accenture did not challenge the $7,800 request. After the original $7,800 success, Stephens began to increase his requests until the final $22,980 request that Accenture uncovered in August 2000.

Stephens testified on his own behalf and stated that he believed that it was appropriate to obtain money via the "add to" function. He argued that he believed that this was an appropriate cash advance and he always intended to repay the money to Accenture at some point in the future. Stephens testified that he believed that cash advances were proper based on information another employee had told him.

The government cross-examined Stephens. It questioned him about alleged dishonest statements made by him on his resume concerning his educational background at Yale University. The government also sought to impeach him with prior acts, including his personal, use of car rentals at his last company. The government also obtained concessions from Stephens that he did not obtain prior approval from anyone at Accenture for the alleged cash advances and did not sign a loan document or provide collateral to secure the advances. This allowed the government to argue that common sense dictated that Stephens knew that Accenture did not allow this type of advance to an employee.

The jury returned a guilty verdict on all three counts. Stephens's motion for a judgment of acquittal challenged the sufficiency of the evidence on the issue of whether the government had demonstrated that Stephens had engaged in a fraudulent scheme. More than two months after trial, and before ruling on the judgment of acquittal motion or sentencing Stephens, the district court issued a sua sponte minute order raising the Batson issue. The district court stated that the government had used all of its peremptory challenges to strike minority jurors. The court further explained that it had been concerned about the government's exercise of its peremptory challenges during voir dire but assumed that the defendant would object. The district court explained that it concluded at the time that Stephens had a strategic reason for his failure to object.

Nevertheless, after reconsidering its original evaluation of Stephens's failure to object, the district court concluded that there was no valid reason for the defendant's failure. Consequently, the district court stated that it was correcting its prior decision not to question the government during voir dire. The court required the government to provide non-discriminatory explanations for its exercise of its peremptory challenges.

The government responded by arguing that the district court lacked the authority to raise the Batson issue sua sponte at that stage in the proceedings. The government also provided a variety of nondiscriminatory explanations for its challenges. The district court then issued a second minute order agreeing with the government's position that the court did not have authority to raise the Batson issue sua sponte at that stage in the proceedings and consequently vacated the original order. United States v. Stephens, No. 02 CR 661, 2003 WL 21439862 (N.D.Ill. June 20, 2003) (unpublished order). The district court was clear to note that the vacating of its original order did not change its view that a prima facie case of a Batson violation existed and, consequently, the district court advised Stephens that he should raise the issue in a post-conviction challenge pursuant to 28 U.S.C. § 2255. Id. at *5. The court also noted that because it had vacated its original order, it no longer had the ability to perform steps two and three of the Batson analysis.

Stephens then appealed to this court, resulting in our Stephens I decision. That decision rejected Stephens's challenge to the sufficiency of the evidence for his wire-fraud convictions. Stephens I, 421 F.3d at 507-09. As for the Batson issue, the government dropped its objection to Stephens's failure to raise a timely Batson claim. Consequently, the Batson claim was considered on the merits.

A divided panel held that Stephens had set forth a prima facie case of a Batson violation pursuant to step one of the three-part Batson test. The case was remanded to the district court to conduct additional proceedings pursuant to steps two and three. Id. at 518.

On remand, the government provided its non-discriminatory explanations for its peremptory challenges. It also provided its original contemporaneous notes from voir dire to support the proffered explanations. The district court recognized that the government had provided non-discriminatory explanations for its peremptory challenges. These explanations were, however, dismissed as pretextual, and the district court concluded that the government had used its peremptory challenges to eliminate minority jurors in violation of Batson. United States v. Stephens, No. 02 CR 661, 2006 WL 1663447 (N.D.Ill. June 9, 2006) (unpublished order).

II. ANAL...