United States v. Myron Budnick , 552 F. App'x 876 ( 2014 )

Case: 12-15348 Date Filed: 01/10/2014 Page: 1 of 12
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
No. 12-15348
Non-Argument Calendar
D.C. Docket No. 1:11-cr-20324-MGC-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
MYRON BUDNICK,
Defendant-Appellant.
Appeal from the United States District Court for
the Southern District of Florida
(January 10, 2014)
Before HULL, WILSON and FAY, Circuit Judges.
PER CURIAM:
A jury convicted Myron Budnick for acts related to his role in a conspiracy
designed to operate sham companies to elicit credit and receive goods from
vendors knowing that he and his co-conspirators would abandon the sham
Case: 12-15348 Date Filed: 01/10/2014 Page: 2 of 12
companies before those companies paid for the delivered goods. This scheme is
referred to as a “bust-out.”
Budnick appeals his convictions and sentences for one count of conspiracy
to commit wire fraud, in violation of 18 U.S.C. § 1349, and four counts of
substantive wire fraud, in violation of 18 U.S.C. §§ 2 and 1343. On appeal,
Budnick argues that the district court erred by: (1) declining to remove an
impaneled juror; (2) declining to give a requested jury instruction; and
(3) increasing Budnick’s sentencing offense level based on his leadership role in
the criminal offense.
After review of the entire record on appeal and upon consideration of the
parties’ briefs, we affirm.
I. DISCUSSION
A. Retaining an Impaneled Juror
Budnick argues that the district court abused its discretion by declining to
remove an impaneled juror who had a strong reaction to certain testimony.
Budnick and his co-conspirators defrauded companies of goods under the
false pretense that their sham companies would pay for such goods. One victim of
the conspirators’ scheme was Mil-Spec Packaging of Georgia (“Mil-Spec”), a
vendor that manufactured and distributed packaging materials that were certified to
2
Case: 12-15348 Date Filed: 01/10/2014 Page: 3 of 12
government specifications. Mil-Spec sold its goods to the federal government,
government contractors, and private commercial companies.
During a lunch recess, one juror, a military veteran, told a courtroom deputy
that he had concerns about the acts committed against Mil-Spec. Before resuming
trial, the district court questioned the juror in the presence of Budnick, his counsel,
and the prosecutor. At the court’s request, the juror described his concern. As a
military veteran, the juror expressed concern that fraud, such as the fraud against
Mil-Spec, either (1) raises the price of the goods sold to the military or (2) reduces
the quality of goods sold to the military.
After conferring with defense counsel and the prosecutor, the district court
had this colloquy with the juror:
THE COURT: Sir, you reported to us that you had a
very strong reaction when you heard [the] testimony
[concerning the fraud perpetrated on Mil-Spec].
A JUROR: Yes, I did.
THE COURT: Now, you understand that in this case,
neither side has disputed that a fraud occurred based
upon what you’ve heard? Do you understand that?
A JUROR: Yes, ma’am.
THE COURT: And the only question is whether or not
Mr. Budnick participated in the fraud. Do you
understand that?
A JUROR: Yes, ma’am.
3
Case: 12-15348 Date Filed: 01/10/2014 Page: 4 of 12
THE COURT: Based upon your feelings do you believe
that you would be able to his [sic] listen to all the
evidence and render a decision based only on the
evidence in this case and not on any of the feelings that
you have just discussed with us in open court?
A JUROR: Is the evidence that were [sic] presented
before for Mil-Spec not considered part of the trial?
THE COURT: Oh, it’s part of this trial, but you still
have to determine whether or not this defendant was the
individual who committed the fraud. You still have to
make that determination as a juror.
A JUROR: Okay. I can keep an open mind to the rest of
the evidence that is going to be shown to us, but it is
going to be in the back of my mind, the whole Mil-Spec
situation.
The district court told the juror that it would hold the juror to his word that
he “will make every effort to be impartial in this case and listen to the evidence.”
The district court instructed the juror that he must “not have any discussion
with the other members of the jury about what we have discussed here in open
court.” The district court also instructed, “If for some reason you feel the need to
have this discussion again, please bring it to [the courtroom deputy’s] attention.”
4
Case: 12-15348 Date Filed: 01/10/2014 Page: 5 of 12
Here, we cannot say that the district court abused its considerable discretion
by declining to remove the impaneled juror. 1 After conducting a thorough inquiry
into the juror’s concern and potential bias, the district court determined that the
juror would be able to listen to the evidence and render a decision as to whether
Budnick individually participated in the fraud based on that evidence. In fact, with
respect to whether Budnick participated in the fraud, the juror told the court that he
would keep an “open mind to the rest of the evidence.” The district court also did
not abuse its discretion in relying on this statement from the juror.
Moreover, the district court instructed the juror to bring any further related
concerns to the courtroom deputy’s attention. The juror never expressed additional
concerns or thoughts of bias.
Having found no impairment to the juror’s impartiality, the district court
acted within its sound discretion in denying Budnick’s request to remove the
impaneled juror.
1
We review a district court’s decision to remove a juror for an abuse of discretion.
United States v. Augustin, 661 F.3d 1105, 1129 (11th Cir. 2011). Just cause exists to discharge a
juror if, inter alia, the court finds evidence that the juror cannot decide the issues fairly. United
States v. Register, 182 F.3d 820, 840 (11th Cir. 1999). The district court’s discretion will not be
disturbed absent a showing of bias or prejudice to the defendant. United States v. Fajardo, 787
F.2d 1523, 1525 (11th Cir. 1986).
5
Case: 12-15348 Date Filed: 01/10/2014 Page: 6 of 12
B. Jury Charge
Budnick argues that the district court abused its discretion by declining to
give a requested jury instruction.
The indictment alleges that Budnick and four others (1) conspired to commit
wire fraud and (2) committed wire fraud. The indictment alleges that the
conspiracy occurred “[f]rom on or about May 19, 2008, through on or about
August 28, 2010.” Specifically, the indictment alleges that Budnick and his co-
conspirators performed bust-outs on four sham companies. The indictment also
alleges four substantive counts of wire fraud that occurred between September
2008 and November 2009.
In mid-July 2010, one of Budnick’s co-conspirators, Ernesto Robau, met
with the government agent investigating the conspiracy. Ultimately, Robau agreed
to cooperate with the government investigation.
Specifically, in August 2010, Robau cooperated with the government, and,
with Robau’s knowledge and assistance, the government recorded a particularly
adverse conversation between Budnick and Robau at the “Ale House.” At trial,
Robau testified about the entire criminal scheme, including the acts discussed in
his “Ale House” conversation with Budnick. During Robau’s testimony, the
government published the “Ale House” recording and a subsequent telephone
6
Case: 12-15348 Date Filed: 01/10/2014 Page: 7 of 12
conversation between Robau and Budnick. The government also submitted into
evidence several emails between Robau and Budnick.
After Robau became an informant, Budnick could not be a co-conspirator
with Robau. See United States v. Lively, 803 F.2d 1124, 1126 (11th Cir. 1986)
(“[A] person cannot conspire with a government informer who secretly intends to
frustrate the conspiracy.”). As a result, Budnick requested the following jury
instruction:
Members of the jury, you are hereby instructed that after
July 28, 201[0], and prior to the meeting at the Ale
House, Ernesto Robau became the Government’s agent
and informer and thereafter could not be a co-conspirator
with Myron Budnick because one who acts as a
government agent and enters into a purported conspiracy
in the secret role of an informer cannot be a co-
conspirator.
The district court did not abuse its discretion by declining to give this jury
instruction.2 The indictment alleged four substantive counts of wire fraud that
occurred between September 2008 and November 2009—all well before the time
2
We review a district court’s refusal to give a requested jury instruction for an abuse of
discretion. United States v. Palma, 511 F.3d 1311, 1314-15 (11th Cir. 2008). “We will find
reversible error only if (1) the requested instruction correctly stated the law; (2) the actual charge
to the jury did not substantially cover the proposed instruction; and (3) the failure to give the
instruction substantially impaired the defendant’s ability to present an effective defense.” Id. at
1315 (internal quotation marks omitted). A “defendant is entitled to have presented instructions
relating to a theory of defense for which there is any foundation in the evidence, even though the
evidence may be weak, insufficient, inconsistent, or of doubtful credibility.” Lively, 803 F.2d at
1126 (internal quotation marks omitted).
7
Case: 12-15348 Date Filed: 01/10/2014 Page: 8 of 12
that Robau first worked with the government to record the August 2010 Ale House
conversation. The jurors had a copy of the indictment during their deliberations.
Furthermore, the evidence at trial showed that Budnick and his co-conspirators
completed the bust-out of the four sham companies described in the indictment
before Robau acted as a government informant in August 2010. Specifically, the
sham companies were opened in 2008 and 2009. And, the conspirators busted-out
and abandoned the sham companies by January 2010. Thus, given the record as a
whole, we cannot say that the district court abused its discretion by declining to
give the requested instruction because Robau became a government informant
months after the bust-out of the sham companies listed in the indictment ended.
Budnick’s reliance on this Court’s decision in United States v. Lively, 803
F.2d 1124, is misplaced. In Lively—under facts markedly different from the facts
here—we held that it was reversible error not to give a jury instruction similar to
the one Budnick requested.
In Lively, the indictment charged that the conspiracy occurred from
March 1985 until May 1985. 803 F.2d at 1126. The co-conspirator in Lively
became a government informant in March 1985, which was early in the alleged
conspiracy period. Id. at 1126. Part of the Lively defendant’s defense was that he
was unaware of the illegal aim of the conspiracy until April 1985, which was after
8
Case: 12-15348 Date Filed: 01/10/2014 Page: 9 of 12
his fellow co-conspirator became a government informant. Id. at 1127-28. Given
the nature of the defense’s theory, the Lively court held that the district court
committed reversible error in failing to address a “vital aspect of the defense’s
theory of the case . . . that was not substantially covered by other instructions.” Id.
at 1128.
Budnick made no such similar claim here—that is, Budnick did not argue at
trial that he became aware of the criminal scheme only after Robau became a
government informant. And, Budnick failed to direct this Court or the district
court to any evidence supporting that type of defense theory. Thus, unlike the
instruction in Lively, the requested jury instruction was not “vital” to Budnick’s
defense. Consequently, the district court’s failure to give the requested instruction
did not substantially impair Budnick’s ability to prepare or present an effective
defense.
For these reasons, the district court acted within its sound discretion in
denying Budnick’s requested jury instruction.
C. Sentencing Guidelines
Budnick argues that the district court erred by increasing his offense level
four levels for Budnick’s leadership role in the criminal offense.
9
Case: 12-15348 Date Filed: 01/10/2014 Page: 10 of 12
A defendant’s offense level is increased four levels “[i]f the defendant was
an organizer or leader of a criminal activity that involved five or more participants
or was otherwise extensive.” U.S.S.G. § 3B1.1(a). To qualify for the increase, the
defendant must have acted as an organizer or leader “of one or more other
participants.” Id. § 3B1.1, cmt. n.2. However, to be considered an organizer or
leader, a defendant need not have been the sole leader or kingpin of the conspiracy.
United States v. Ramirez, 426 F.3d 1344, 1355 (11th Cir. 2005).
“In distinguishing a leadership and organizational role from one of mere
management or supervision,” the district court considers the following factors:
[T]he exercise of decision making authority, the nature of
participation in the commission of the offense, the
recruitment of accomplices, the claimed right to a larger
share of the fruits of the crime, the degree of participation
in planning or organizing the offense, the nature and
scope of the illegal activity, and the degree of control and
authority exercised over others.
U.S.S.G. § 3B1.1, cmt. 4. The government must prove the existence of a
leadership role by a preponderance of the evidence. United States v. Alred, 144
F.3d 1405, 1421 (11th Cir. 1998).
10
Case: 12-15348 Date Filed: 01/10/2014 Page: 11 of 12
The district court did not clearly err by increasing Budnick’s offense level
four levels pursuant to U.S.S.G. § 3B1.1(a). 3 The trial evidence supported the
district court’s finding that Budnick exerted a leadership or organizational role
over one or more participants.4 For example, the evidence showed that Budnick
took on a leadership role in the conspiracy by: (1) preparing annual reports and
reinstatements for the sham companies; (2) deciding to use fraudulent credit or
trade references for companies without existing references; (3) sending letters to
creditors representing himself as the attorney of several fraudulent corporations;
(4) reinstating inactive corporations and changing the owners, officers, and
directors of those corporations; (5) recruiting an employee, Franklin Wellman, into
the conspiracy; (6) taking merchandise obtained by the conspiracy without
apparent payment; and (7) finding new companies on which to perform bust-outs.
The evidence also shows that Budnick acted as an organizer or leader of another
participant by recruiting an employee into the scheme and supervising the
employee in establishing a sham company.
3
We review for clear error a district court’s factual finding that a defendant was an
organizer or leader to support an increase in the offense level pursuant to § 3B1.1(a). Ramirez,
426 F.3d at 1355.
4
There is no dispute that the conspiracy involved at least five participants.
11
Case: 12-15348 Date Filed: 01/10/2014 Page: 12 of 12
The district court expressly referenced some of this evidence before
overruling Budnick’s objection to the offense-level increase at the sentencing
hearing. Specifically, in response to Budnick’s argument that the leadership-based
increase was unwarranted, the district court asked rhetorically:
Who was the person who . . . sent the letters to the
creditors when people started wanting their money back?
Who was the individual who represented himself as the
lawyer of some of these companies, when people tried to
get their money back? Who was the person that got
Mr. Wellman involved in this scheme?
In asking these questions, the district court made clear that it was well aware
of the actions evincing Budnick’s leadership role in the conspiracy. Moreover, the
district court said, “I was present at trial. I heard the evidence. I believe that this
enhancement is entirely appropriate, given the evidence that was produced at trial
in this case.”
Such comments show that the district court considered the evidence at trial
and found that a preponderance of the evidence supported the offense-level
increase for Budnick’s leadership role in the offense. Thus, the district court did
not clearly err in overruling Budnick’s objection to increasing his offense level
based on his leadership role in the offense.
II. CONCLUSION
Budnick’s convictions and sentences are AFFIRMED.
12