United States v. Gillion

• Decision Date: 28 December 2012
• Docket Number: No. 11–4942.,11–4942.
• Citation: 704 F.3d 284
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Gary Lee GILLION, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

704 F.3d 284

UNITED STATES of America, Plaintiff–Appellee,

v.Gary Lee GILLION, Defendant–Appellant.

No. 11–4942.

United States Court of Appeals,Fourth Circuit.

Argued: Oct. 26, 2012.

Decided: Dec. 28, 2012.

ARGUED:Eric William Ruschky, Columbia, South Carolina, for Appellant. Winston David Holliday, Jr., Office of the United States Attorney, Columbia, South Carolina, for Appellee. ON BRIEF:John A. O'Leary, O'Leary & Associates, Inc., Columbia, South Carolina, for Appellant. William N. Nettles, United States Attorney, Columbia, South Carolina, for Appellee.

Before GREGORY and DUNCAN, Circuit Judges, and SAMUEL G. WILSON, United States District Judge for the Western District of Virginia, sitting by designation.

Affirmed by published opinion. Judge DUNCAN wrote the opinion, in which Judge GREGORY and Judge WILSON joined.

OPINION

DUNCAN, Circuit Judge:

This appeal arises from Gary Lee Gillion's convictions on four counts of mail fraud, in violation of 18 U.S.C. § 1341, and one count of conspiring to commit mail fraud, in violation of 18 U.S.C. § 371. Gillion challenges the sufficiency of the evidence underlying his convictions, as well as the district court's admission of statements he made pursuant to a pre-indictment proffer agreement with the Government. For the following reasons, we affirm.

I.

A.

Gillion became southeastern regional manager of CitiCapital Trailer Rental (“CitiCapital”),a trailer leasing company owned by CitiGroup, in 2000. Gillion was based in CitiCapital's Columbia, South Carolina office. His duties as regional manager included overseeing the profit of the region's branches, monitoring sales contracts, and ensuring that branches complied with company policies.

Prior to becoming a regional manager at CitiCapital, Gillion worked with a number of trailer leasing companies. Throughout his career, he maintained a business relationship and friendship with John DalCanton, a trailer leasing executive. DalCanton was serving as CitiCapital's vice president in its Dallas, Texas headquarters when the events leading to Gillion's convictions transpired.

In early December 2003, DalCanton visited Gillion in Columbia and told him that CitiGroup was considering selling CitiCapital. Concerned that the sale would mean Gillion and DalCanton would lose their jobs, Gillion told DalCanton he had created a side company—Capital City Trailer (“Capital City”)—to “make some money” in case CitiCapital laid them off. J.A. 267. Records reveal that Gillion opened a business checking account in Capital City's name on November 15, 2003.

DalCanton, who later pleaded guilty to conspiring to commit mail fraud and testified against Gillion at trial, described three ways he and Gillion used Capital City to defraud CitiCapital and purloin profits beginning in late 2003. First, Gillion would arrange sales of Columbia-based trailers, checking the book value of the trailers with DalCanton before finalizing each sale. Gillion would then sell the trailers for more than book value, write a cashier's check to CitiCapital for the book value of the sale, and keep the profits above book value to split with DalCanton. Second, Gillion and DalCanton would arrange secret leases of the Columbia-based trailers and keep the lease payments as profits. Third, Gillion and DalCanton would arrange lease-to-own contracts on behalf of Capital City with potential CitiCapital customers, who would lease trailers from Capital City for a number of months, then purchase the trailers outright for a nominal sum at the end of the period. DalCanton would either not report the nominal purchase to CitiGroup or “create a nominal purchase to cover up these rentals” so he and Gillion could keep the lease payments. J.A. 271. On at least one occasion, described in detail below, Gillion and DalCanton arranged for CitiCapital to sell Capital City the trailers it needed to execute a lease-to-own contract during the lease period, so Capital City could reap the lease-to-own contract profits outright.

The third strategy forms the basis for Gillion's mail fraud convictions. The scheme involved Baker Transportation (“Baker”), a South Carolina trucking company which had been a Columbia-based CitiCapital customer for several years. The government and Gillion presented conflicting information as to whether Baker would have remained a CitiCapital customer as of late 2003. William Baker, the company's owner, testified that there was no reason to believe his relationship with CitiCapital would end in 2003 or 2004 and that he had no plans to take his business elsewhere. J.A. 486. The CitiCapital salesman in charge of Baker's account, Kevin Sparks, testified that Baker often made late payments and that he could not approve Baker's credit for further trailer rentals in 2003. J.A. 675. Sparks also testified, however, that Gillion could override credit determinations and give customers additional credit. J.A. 679.

On October 28, 2003, Gillion, acting as president of Capital City, signed a lease-to-own agreement with Baker. The agreement named eight forty-eight-foot trailers by serial number. Baker testified that these were “the 48–foot trailers that [he] liked to purchase” and that the agreement was “basically the same purchase plan” as his previous CitiCapital contract. J.A. 487. Baker agreed to make lease payments to Capital City over three years, from November 1, 2003, to November 1, 2006. J.A. 929. Each lease payment would be for $150 per trailer, per month, plus tax, with Baker receiving the option to purchase the trailers for one dollar at the end of the lease period. The contract listed a mailing address at which Baker would be invoiced and an address for Capital City.

As of October 28, 2003, however, neither Gillion nor Capital City owned the eight trailers named in the Baker lease. Rather, on December 11, 2003, Gillion had DalCanton approve a $16,000 sale of the eight named trailers from CitiCapital to Capital City, at $2000 per trailer. This sale represented a $1241 loss for CitiCapital. The “used bill of sale” document listed, by serial number, the same eight forty-eight-foot trailers Gillion had already leased to Baker. Gillion did not sign his name to the sale document. Instead, to conceal his identity, he forged his brother-in-law's name—James B. Pitts—as the Capital City purchaser. On February 11, 2004, DalCanton transferred the eight trailer titles from CitiCapital to Capital City. Between November 1, 2003, and November 1, 2006, Baker mailed lease payments totaling more than $43,200 to Gillion as president of Capital City. In particular, Baker mailed checks on April 27, 2006, May 25, 2006, June 29, 2006, and July 21, 2006. Over the course of the three-year lease, Capital City, Gillion, and DalCanton received over $27,000 in profits from the Baker deal.

Although CitiGroup did not sell CitiCapital in 2003, as DalCanton predicted, it did eventually sell the company. CitiCapital came to rest in the hands of XTra Lease (“XTra”), a national trailer leasing company, in February of 2005. After purchasing CitiCapital, XTra's due diligence revealed accounting discrepancies that brought Capital City, DalCanton, and Gillion's names to the fore. XTra's inquiry led to a civil suit against Gillion for conversion and breach of fiduciary duty, in which Gillion was held liable to XTra for over one million dollars.

B.

On March 23, 2010—before his eventual indictment—Gillion signed a proffer agreement with the government (the “Agreement”), pursuant to which he agreed to provide information about his actions while employed as a CitiCapital regional manager. He also agreed to “submit to polygraph examination(s) by any qualified polygraph examiner should [he] be requested to do so,” acknowledging that “[f]ailure to pass to the satisfaction of the Government any polygraph examination administered pursuant to this Agreement constitutes a breach of the Agreement,” which then allowed the Government to “use for any purpose any statements” Gillion made during the interview. J.A. 106. Absent breach, the Agreement barred the government from using Gillion's proffered statements against him. Pursuant to the Agreement, Gillion met with Special Agent Chris McClure on March 23, 2010, for an interview, during which he admitted that he had formed Capital City; leased and sold some CitiCapital trailers “in furtherance of the scheme”; assured some customers “that CitiCapital and Capital City were indeed sister companies”; used DalCanton to create “a cover trail using paper”; and run Capital City while working for CitiCapital. J.A. 620.

A federal grand jury issued a nine-count indictment on August 18, 2010, charging Gillion with one count of conspiring to embezzle from a common carrier, in violation of 18 U.S.C. § 371, and eight counts of embezzling from a common carrier, in violation of 18 U.S.C. § 660. On April 5, 2011, a grand jury issued an eight-count superseding indictment, charging Gillion with one count of conspiracy to commit mail fraud, in violation of 18 U.S.C. § 371, and seven counts of substantive mail fraud, in violation of 18 U.S.C. § 1341.

Before trial, the government requested that Gillion submit to a polygraph examination to test the truth of his original proffer interview. Gillion moved to suppress the statements he made during the pre-indictment proffer session, arguing that the Agreement had no effect post-indictment. The government contended that the Agreement was still in effect as a binding contract. The district court found the Agreement was still in effect, and held that Gillion could either sit for the polygraph examination—which would be limited to questions related to topics raised in the original proffer interview—or be found in breach. Gillion sat for the polygraph examination on June 6, 2011, but left the session midway, disputing the scope of the questions. As a result, the district court found Gillion in breach and allowed Agent McClure to testify to Gillion's...