U.S. v. Whitfield

• Decision Date: 11 December 2009
• Docket Number: No. 07-60748.,07-60748.
• Citation: 590 F.3d 325
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. John H. WHITFIELD; Paul S. Minor; Walter W. Teel, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

590 F.3d 325

UNITED STATES of America, Plaintiff-Appellee, v. John H. WHITFIELD; Paul S. Minor; Walter W. Teel, Defendants-Appellants.

No. 07-60748.

United States Court of Appeals, Fifth Circuit.

December 11, 2009.

Elizabeth D. Collery (argued), U.S. Dept. of Justice, Crim. Div., Washington, DC, David Harrison Fulcher, Jackson, MS, Ruth R. Morgan, Asst. U.S. Atty., Gulfport, MS, for U.S.

David Neil McCarty, David Neil McCarty Law Firm, P.L.L.C., Drew McLemore Martin, Melissa Selman Martin, Martin Law Firm, Jackson, MS, for Whitfield.

Abbe David Lowell (argued), McDermott, Will & Emory, Washington, DC, Hiram C. Eastland, Jr., Eastland Law Offices, Greenwood, MS, for Minor.

George Lowrey Lucas, Sr. Lit. Counsel (argued), Fed. Pub. Def., Jackson, MS, for Teel.

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

Before GARWOOD, BENAVIDES and HAYNES, Circuit Judges.

GARWOOD, Circuit Judge:

Defendants-appellants, attorney Paul Minor and former Mississippi state judges John Whitfield and Walter ("Wes") Teel, were charged with participating in two separate bribery schemes in which Minor arranged, guaranteed, and eventually paid off loans for Whitfield and Teel, allegedly in order to corruptly influence the outcome of cases Minor filed in their courts. A jury found all three appellants guilty of conspiracy in violation of 18 U.S.C. § 371; mail, wire, and honest services fraud in violation of 18 U.S.C. §§ 1341, 1343, 1346 and 2; and federal program bribery in violation of 18 U.S.C. § 666. Additionally, Minor was convicted of racketeering in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962. Appellants appeal their convictions and sentences on numerous grounds. For the following reasons, we VACATE all the convictions related to federal program bribery under 18 U.S.C. § 666, including the conviction of Minor and Teel for conspiracy to violate section 666. We AFFIRM all other convictions, and we REMAND for resentencing as to all appellants in accordance with this opinion.

FACTS

This case concerns two separate bribery schemes, at the center of which lay Paul Minor, formerly a successful trial attorney in Mississippi. Minor had a professional, if not personal, relationship with appellants John Whitfield and Wes Teel prior to the events giving rise to this prosecution. Acting as guarantor, Minor arranged for Peoples Bank in Biloxi, Mississippi to loan Whitfield and Teel substantial amounts of money, purportedly in connection with each of their campaigns for state judicial office. Although the structure of the loan transactions was similar, neither Whitfield nor Teel had any knowledge of Minor's dealings with the other. As the two bribery schemes were thus distinct, we relate the facts surrounding each separately.

I. Whitfield Scheme

In the fall of 1998, Whitfield was in the midst of a reelection campaign to retain his position as circuit judge on the Second Circuit Court of Mississippi. Minor arranged for The Peoples Bank in Biloxi, Mississippi, with which he had substantial deposits, to grant Whitfield two loans with Minor serving as guarantor. Peoples Bank sought no collateral to secure the loans, but rather, in the words of the loan officer that handled the transactions, relied "simply on the strength of Mr. Minor's financial ability" to ensure repayment. On October 12, 1998, Peoples Bank loaned Whitfield $40,000 for "campaign funds," which he deposited into his campaign account. Later, after Whitfield's successful reelection, Peoples Bank granted Whitfield another loan for $100,000 on November 19, 1998, the purpose of which was described in the loan documents as a "down payment on home." Whitfield deposited the proceeds of this loan in the bank account of his then-girlfriend, who used the majority of the money to place a down-payment on a house for the two of them. Whitfield and his girlfriend spent the remainder of the loan proceeds to purchase home furnishings and to pay credit card bills.¹ Whitfield never listed either loan on his campaign disclosure forms, nor did he report subsequent loan repayments made by Minor on the annual statements of economic interest that he was required to file as a judge.²

At trial, the Government contended that, as Whitfield had little or no money at the time, he accepted the loans never intending to pay them back himself. Indeed, by the time that the loans were eventually repaid at the insistence of bank examiners in 2002, Whitfield had only contributed a total of approximately $13,200 towards repayment of his loans and the interest thereon, $5,000 of which came from the campaign account originally funded by the $40,000 loan and approximately $5,650 of which was only made possible by a timely and unexplained cash deposit made to his personal checking account after his check to Peoples Bank had bounced. In contrast, over the nearly four-year period in which the loans were outstanding, Minor, either directly or indirectly, paid a total of approximately $178,600 in principal and interest on the loans.

At Minor's request, the loans were structured as renewable short-term "balloon" loans, whereby every six months the accumulated interest became due and the loan principal would either have to be renewed or paid in full. Under the Government's theory of the case, this arrangement allowed Minor to keep Whitfield on a string while Minor held the bank at bay. Every six months when the loans became due, bank officials would attempt to notify Whitfield by mail and telephone, yet Whitfield was unresponsive and largely ignored his obligation. As a result, the bank would be forced to contact Minor, who, instead of paying directly by check, would cash a check and renew the loans by making the necessary payments in cash.³ Whitfield would occasionally make small payments with his own money, but, as noted above, the vast majority of the payments were made by Minor.

Meanwhile, shortly after Minor arranged the loans for Whitfield in the fall of 1998, Minor's law firm filed a potentially lucrative personal injury suit, Marks v. Diamond Offshore Management Co.,⁴ in the Second Circuit Court. Marks was injured while working on an off-shore oil rig, and he hired Minor & Associates on a contingent-fee basis to represent him in the ensuing Jones Act suit against his employer. Although plaintiffs seeking personal injury damages generally prefer to try their cases before a jury, Minor's firm made the unusual request for a bench trial. Normally, the Second Circuit Court followed a procedure whereby cases were randomly assigned among the four Second Circuit judges after the defendant had filed an answer. However, immediately upon filing their complaint, Minor's firm circumvented this process by filing a motion with Judge Whitfield seeking an expedited hearing to set a trial date, purportedly so that Marks could obtain funds to cover his medical expenses as soon as possible. On February 10, 1999, twelve days before Diamond Offshore had even received a summons (and thus had yet to file an answer triggering the random assignment procedure), Whitfield issued a "Fiat" requiring the parties to appear before him in a hearing on the motion to set a trial date. At the hearing Whitfield set the case for trial in his own court, thereby effectively assigning the case to himself.

Diamond Offshore's attorneys became suspicious and investigated for a potential relationship between Whitfield and Minor & Associates. However, they discovered no connection (in part because Whitfield's campaign disclosure forms revealed none), nor did Whitfield inform the parties of his financial arrangement with Minor. The case was tried before Whitfield June 20-22, 2000. On July 12, 2000, Whitfield ruled in favor of Marks and awarded him $3.75 million in damages. Whitfield's loans matured again soon thereafter, and unbeknownst to Diamond Offshore's counsel, on September 8, 2000, Minor made a $6,900 cash payment to renew them. On October 3, 2000, in response to Diamond Offshore's post-trial motions, Whitfield reduced the award and issued a final judgment in Marks' favor for $3.64 million, $3 million of which was attributable to noneconomic "soft" damages (pain, suffering, loss of enjoyment of life). Diamond Offshore later appealed to the Mississippi Supreme Court, which, sitting en banc, affirmed the finding of liability. Diamond Offshore Mgmt. Co. v. Marks, 2003 Miss. LEXIS 88, at *36, 2003 WL 556438 (Miss. Feb. 27, 2003), withdrawn, 2007 Miss. LEXIS 237 (Miss. Apr. 26, 2007). However, after conceding that "the trial court had ample material in the record to justify a high award of damages," the court reduced the compensatory damages to $1 million (leaving a total award of $1.64 million), which it deemed to be "within the range of what we consider acceptable for [Marks'] pain, suffering, and loss of enjoyment of life." Id. at *36-37, 2003 WL 556438.⁵

Soon after the close of the Marks trial, Whitfield resigned from the bench, and Minor helped him obtain a job at a prominent law firm in Gulfport, Mississippi. At that point, Minor deviated from his standard method of payment on the loans by funneling money through Whitfield rather than paying the bank himself. In May and December of 2001, Minor wrote two checks to Whitfield for $15,000 and $10,000 respectively. The checks were accompanied by cover letters attempting to conceal their true purpose, which was revealed when Whitfield issued checks to Peoples Bank in the exact same amounts as soon as Minor's checks cleared.⁶ Afterward, Minor returned to his practice of making cash payments directly to the bank.

Eventually, in July of 2002, federal and state bank examiners conducting a routine audit of Peoples Bank discovered and criticized the loans, which by that point had been consolidated into a single obligation. As a result, the bank requested that the debt be satisfied in full. Minor agreed, and...