United States v. Black
| Decision Date | 18 June 2020 |
| Docket Number | No. 19-5088,No. 19-5374,19-5088,19-5374 |
| Parties | UNITED STATES OF AMERICA, Plaintiff-Appellee, v. BRIAN BLACK, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
NOT RECOMMENDED FOR PUBLICATION
MURPHY, Circuit Judge. Brian Black served as the trustee for the Oleen Fewell Estate Trust, a trust that Oleen Fewell created to ensure that her daughter would have enough money after Fewell died. In 2012 the Trust's bank account totaled $204,894.49. Two years later it totaled $6.99. Where did the money go? The government alleged that Black used the Trust's money to cover his personal expenses, including expenses for his go-karting and hunting hobbies. A jury convicted Black of mail and wire fraud. After imposing a 57-month sentence, the district court ordered him to repay $150,422.53 in restitution. Black now challenges the sufficiency of the evidence for his fraud convictions, and argues that the district court erred in choosing the restitution amount. Finding no error, we affirm.
Given the jury verdict against Black, we recount the facts in the light most favorable to the government. See, e.g., United States v. Brown, 732 F.3d 569, 576 (6th Cir. 2013).
Oleen Fewell died in 1996. Fewell's will created a trust for the benefit of her middle-aged daughter, Sharon Conner. According to her brother, Sharon was "terrible with money." The Trust documents thus instructed the trustee to give Sharon a monthly stipend and to use its assets to maintain the Trust's property (including the farmhouse in which Sharon lived and some surrounding farmland in western Tennessee). Fewell initially named her nephew, Gerald Fewell Harber, to serve as trustee. He did so until his 2003 death. Before Fewell died, she had asked her great-nephew Lionel Hughes, a local insurance agent, to serve as a substitute trustee once Harber could no longer serve in that role. Hughes took over in 2003.
When Fewell died, her roughly $300,000 estate consisted mostly of the 88-acre farm. Thirteen years later, the Trust had run out of cash. Hughes began loaning money to the Trust to pay for Sharon's monthly expenses, which totaled about $1,500 a month. He believed that he had the discretionary power to sell the farmland and replenish the Trust's cash, but petitioned the probate court for advice. The court agreed. Hughes sold the farmland at a public auction for around $325,000. The buyers paid a $52,000 down payment to the Trust, and promised to pay the remainder with interest over ten years. Hughes repaid himself the money he had loaned the Trust and petitioned the probate court to withdraw as trustee, a role he found stressful.
In 2010 the probate court appointed Brian Black to replace Hughes as the trustee. Black was good friends with Sharon (and her husband Tommy and son Chris). The probate court required Black to post a $310,000 bond. Without this bond, Black could not serve as trustee or access the Trust's money. Black purchased this bond from a Michigan insurance company through Hughes's local insurance agency and paid an annual premium to renew it each year.
When Black took over, the Trust was still largely illiquid. It held the farmhouse and a note receivable from the farmland sale, but had only about $17,000 in cash. Things changed two years later. In February 2012, the farmland's buyers paid the Trust the remaining $200,000 they owed in a lump sum. When that payment arrived, the Trust held $204,894.49 in its bank account. By July 2014, the account had dwindled to $6.99. This rapid spending caught the bank's attention. Bank officials noticed that Black had written many checks to himself rather than to merchants, leading them to suspect that he was mishandling the Trust's money. The bank reported Black to the authorities.
A postal inspector employed by the U.S. Postal Service and Jack Dietz, a contract postal inspector employed by a private company, began to investigate Black's conduct as trustee. After interviewing witnesses (including Sharon), reviewing bank records belonging to the Trust and to Black, and subpoenaing the records that Hughes and Black had kept in their successive tenures as trustee, the postal inspectors confirmed the bank officials' suspicions. The inspectors concluded that Black had embezzled $178,372.53 from the Trust.
Some of the Trust's money went to improve the finances of Black and his friends. Black, for example, spent $5,500 to pay off his personal debts: $2,800 to a maxed-out American Express card and $2,700 to Morgan & Pottinger, a debt-collection firm collecting an old debt. Black also used over $18,000 of the Trust's money to provide interest-free loans to his friends, only $10,500 of which was ever repaid. And Black frequently wrote checks from the Trust's account to himself and either cashed them or deposited them in his own checking account.
Some of the Trust's money went to improve Black's home. Black spent nearly $9,000 to purchase what the seller described as a "top of the line" storage building and some "very nice" backyard furniture. He spent over $1,000 for a Texas Elite meat smoker. And he spent nearly $11,000 on a tractor with a lawnmower attachment. (Black later sold this piece of equipment for $11,000 but deposited the proceeds in his own bank account rather than in the Trust's account.) Black also used the Trust's money to, among other things, install a new air conditioner at his home (nearly $3,000), fertilize his lawn ($350), and buy a high-end Rainbow vacuum ($2,000).
But most of the Trust's money went toward Black's hobbies. A St. Louis Cardinals fan, Black spent nearly $6,000 to attend a "fantasy camp" and receive instructions from former players. Black was also an avid hunter and member of a hunting club. He bought a range of hunting-related items. These included: (1) two shotguns and a rifle (around $900), (2) three all-terrain vehicles and an amphibious vehicle ($5,100, at least $2,500, $3,845, and $4,000) for the club's members to ride between hunting locations, and (3) a large trackhoe excavator ($17,000) to clear paths at the club.
After becoming trustee Black also developed an interest in go-kart racing. He used $13,500 from the Trust to purchase two go-karts, a trailer, and some parts and paraphernalia from a father-and-son pair in Illinois. To fund the hobby, the son had sold go-kart parts to other racers under the business name Bang Bang Kart Supply. Once Black purchased this "business," he opened and controlled a bank account using the Bang Bang Kart Supply name. And he began racing go-karts and operating a similar business selling go-kart parts under that name. From then until the Trust ran out of money, Black used its funds to subsidize his go-karting, ultimately transferring $74,528 from the Trust account to his Bang Bang Kart Supply account. Besides those transfers, Black also used the Trust's money to buy two more go-karts ($1,000) and another trailer ($5,600).
The government indicted Black on eleven counts of mail fraud, wire fraud, or transporting stolen money in excess of $5,000 in interstate commerce. 18 U.S.C. §§ 1341, 1343, 2314. While Sharon had died before trial, the government offered testimony from thirty other witnesses over six days. Jack Dietz, the contractor who investigated Black's time as trustee and evaluated the legitimacy of his spending, served as a key witness. Black testified in his own defense, asserting that his many expenditures on seemingly personal items were either made for Sharon's benefit, made as repayment for money he had given her, or made with her permission. A jury convicted Black of three counts of fraudulently transferring stolen money, one count of mail fraud, and two counts of wire fraud. It acquitted him of the other counts. The district court sentenced Black to 57 months in prison followed by three years of supervised release and ordered him to repay the Trust $150,422.53 as restitution.
Black raises two arguments on appeal. He says that the government presented insufficient evidence to support his one mail-fraud conviction and two wire-fraud convictions. And he says the district court wrongly relied on Dietz's testimony to set the amount of restitution.
A defendant raising a challenge to the sufficiency of the evidence must meet a "demanding legal standard[.]" United States v. Potter, 927 F.3d 446, 453 (6th Cir. 2019). The defendant must show that no "rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Id. (citation omitted). Black has not met this standard for his fraud convictions.
1. Mail Fraud. The mail-fraud statute consists of one very long sentence:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, . . . for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both.
18 U.S.C. § 1341. We have read this language to require, among other things, that a defendant devise a "scheme to defraud" and use "the mails in furtherance of that scheme." United States v. Petlechkov, 922 F.3d 762, 766 (6th Cir. 2019); United States v. War...
To continue reading
Request your trial