United States v. Jack Parker , 790 F.3d 550 ( 2015 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-4989
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
JACK WINFRED PARKER,
Defendant - Appellant.
No. 13-4990
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
DOUGLAS E. TAYLOR,
Defendant - Appellant.
Appeals from the United States District Court for the District
of South Carolina, at Columbia. Cameron McGowan Currie, Senior
District Judge. (3:13-cr-00133-CMC-2; 3:13-cr-00133-CMC-3)
Argued: March 27, 2015 Decided: June 25, 2015
Before DUNCAN, KEENAN, and THACKER, Circuit Judges.
Vacated and remanded by published opinion. Judge Keenan wrote
the opinion, in which Judge Duncan and Judge Thacker joined.
ARGUED: Joshua Snow Kendrick, KENDRICK & LEONARD, P.C.,
Greenville, South Carolina, for Appellants. Julius Ness
Richardson, OFFICE OF THE UNITED STATES ATTORNEY, Columbia,
South Carolina, for Appellee. ON BRIEF: Christopher S. Leonard,
KENDRICK & LEONARD, P.C., Greenville, South Carolina, for
Appellants. William N. Nettles, United States Attorney, Winston
D. Holliday, Jr., Assistant United States Attorney, OFFICE OF
THE UNITED STATES ATTORNEY, Columbia, South Carolina, for
Appellee.
2
BARBARA MILANO KEENAN, Circuit Judge:
Jack Parker and Douglas Taylor (collectively, the
defendants) appeal their convictions for engaging in illegal
gambling, in violation of 18 U.S.C. § 1955. This appeal
primarily presents the question whether prosecutors’ failure to
disclose certain impeachment evidence, despite knowing of such
evidence before trial, violated the constitutional protections
articulated in Brady v. Maryland, 373 U.S. 83 (1963).
The central contested issue during the jury trial was the
sufficiency of the evidence to satisfy the statutory requirement
that the gambling operation involve at least five persons. The
government advanced several theories regarding the identity of
the “fifth participant” in the gambling business, including that
Jack Parker’s daughter-in-law, Tammy Parker, participated in the
enterprise by maintaining financial and tax records of gambling
proceeds.
The defendants argue on appeal that the government violated
Brady by failing to disclose certain impeachment information
regarding Ben Staples, a government witness who testified about
Tammy Parker’s involvement in the gambling operation. Upon our
review, we conclude that the government violated its obligations
under Brady and, accordingly, we vacate the defendants’
convictions and remand their cases to the district court.
3
I.
Jack Parker, his son, Brett Parker, and Douglas Taylor 1 were
tried in the district court for participating in an illegal
gambling business involving at least five participants, in
violation of 18 U.S.C. § 1955. All three defendants were
convicted following a three-day jury trial, although only Jack
and Douglas have filed this appeal from their convictions. 2
A.
We begin by describing the statute under which the
defendants were convicted, 18 U.S.C. § 1955, which prohibits the
acts of “conduct[ing], financ[ing], manag[ing], supervis[ing],
direct[ing], or own[ing] all or part of an illegal gambling
business.” 18 U.S.C. § 1955(a). An “illegal gambling business”
is defined as a gambling business that: (1) is operated in
violation of applicable state or local law; (2) “involves five
or more persons who conduct, finance, manage, supervise, direct,
or own all or part of such business” (the five-participant
requirement); and (3) “has been or remains in substantially
continuous operation for a period in excess of thirty days or
1
Because Jack, Brett, and Tammy Parker share a last name,
we will refer to all the defendants by their first names in this
opinion.
2
In addition to the federal gambling conviction, Brett was
convicted in a South Carolina state court of murdering his wife,
Tammy, and his business partner, Bryan Capnerhurst. Brett was
sentenced to two terms of life imprisonment for these murders.
4
has a gross revenue of $2,000 in any single day.” Id.
§ 1955(b).
Congress imposed the above size and duration limitations in
Section 1955 “as a means of screening out those gambling
businesses that are too insignificant to warrant federal
action.” United States v. Gresko, 632 F.2d 1128, 1132 (4th Cir.
1980). When attempting to prove the five-participant
requirement, the government need not show that the same five
participants were involved in the business for all thirty days;
“[h]owever, there must be evidence that the business involved at
least five people at all times for thirty days.” Id. at 1132-
33. Accordingly, a jury considering the five-participant
requirement may reach a guilty verdict under Section 1955 so
long “[a]s each member of the jury agrees that some five persons
were involved at all times over some thirty-day period or on any
one single day in which the gross revenues exceeded $2,000.”
United States v. Nicolaou, 180 F.3d 565, 571 (4th Cir. 1999)
(emphasis in original).
B.
The defendants stipulated at trial that they engaged in
“bookmaking” in violation of South Carolina law. Therefore, the
government’s evidence focused on the five-participant
requirement of Section 1955. The government sought to prove
that the business operated by Jack and Douglas was linked to
5
another two-person gambling enterprise operated by Brett, and
that this joint enterprise also included a fifth participant.
The defendants stipulated that Jack and Douglas engaged in
a sports gambling business together, and further stipulated that
Brett worked with a fourth man, Bryan Capnerhurst, also in a
sports gambling business. In the course of these gambling
operations, customers placed telephone calls or sent text
messages to the defendants to place bets on the outcome of
certain collegiate and professional sporting events. Brett,
Bryan, Jack, and Douglas thus acted as “bookmakers,” or
“bookies,” and received a ten percent surcharge on bets their
customers lost as well as the net value of their customers’
losses minus their wins.
Although these gambling operations often were conducted as
separate enterprises, the evidence also showed that Jack and
Douglas periodically answered the telephone line that Brett and
Bryan used for accepting bets, and vice versa. Beginning in
February 2012, Jack and Douglas transferred to Brett and Bryan
telephone calls received from customers who wished to place bets
on NCAA basketball games. The proceeds or losses from these
shared clients were distributed among the four bookmakers. The
government argued from this evidence that Brett, Bryan, Jack,
and Douglas all participated in the same gambling business (the
6
gambling business) during the time period alleged in the
indictment.
To satisfy the five-participant requirement of Section
1955, the government offered evidence regarding several
additional individuals linked to the gambling business through
Brett. The government first sought to prove that Brett’s wife,
Tammy, not only was aware of her husband’s gambling business,
but also participated in the business by directing the use of
Brett’s gambling income for family expenses and by maintaining
the family’s financial records. In support of this theory, the
government presented the testimony of Ben Staples, a family
friend, who stated that he assisted Tammy in preparing joint
federal tax returns in which she disclosed Brett’s income from
the gambling business.
Through Staples’s testimony, the government introduced
Tammy’s handwritten notes regarding the family’s budget and
finances. Tammy included several references to gambling
proceeds in these notes, including sums of money held in a
“booking fund” and the share of profits from the gambling
business that were due to Bryan. 3 She also indicated in her
notes some plans she had for distributing gambling proceeds,
3 A law enforcement investigator testified that Brett
designated the booking fund as a cash reserve for use in the
event that he incurred significant gambling losses.
7
such as one note stating, “use deposits from booking to pay for
equity line.”
Aside from Staples’s testimony and Tammy’s notes, the
government offered two other items of evidence regarding Tammy’s
involvement in the gambling business. First, during a search of
Brett’s and Tammy’s home after her death, law enforcement agents
recovered from Tammy’s desk an envelope with the words “Booking
Fund-$20,000” written on the envelope. This envelope was
introduced as an exhibit at trial. Second, Harold Saxby, one of
Brett’s gambling customers, testified that when Brett was not at
home, Tammy periodically accepted envelopes containing money for
bets. The government asserted that this collective evidence
supported the conclusion that Tammy was the fifth participant in
the gambling business.
The government also argued that certain individuals who
worked as “layoff bookies” each could have constituted the fifth
participant in the gambling business. See United States v.
Jenkins, 649 F.2d 273, 275 (4th Cir. 1981) (explaining
circumstances under which a layoff bookie can be considered a
participant in a gambling business). “Lay off betting” occurs
when a bookmaker “passes on to another bookmaker [i.e., a
‘layoff bookie’] the amount of bets by which his own ‘book’ is
unbalanced; thus to the extent he loses to his own customers, he
wins back from the other bookmaker, or vice versa.” United
8
States v. Thomas, 508 F.2d 1200, 1202 n.2 (8th Cir. 1975).
Layoff betting is therefore a type of insurance for bookmakers
to protect against losses to their own customers. Id.
Several witnesses testified about Brett’s participation in
layoff betting and his association with layoff bookies. An
officer investigating the present case testified that Brett had
admitted having engaged a layoff bookie named Ron Spence. Also,
in recorded conversations with Staples and Jack, Brett had
discussed his practice of laying off bets.
Government witness Harry Benenhaley, another bookmaker,
testified that Brett’s conduct of placing bets with Benenhaley
was “consistent with” the practice of laying off bets. However,
Benenhaley also stated that he eventually suspected that Brett
was using the purported layoff account to place personal bets on
his own behalf. The government nevertheless asserted that the
evidence regarding Brett’s layoff betting supported a finding
that one of the layoff bookies was a fifth participant in the
gambling business.
Finally, the government offered evidence that Brett
received “lines” from another bookmaker, Vincent Sanford, that
could render Sanford a fifth participant in the gambling
business. A “line” “constitutes the ‘odds’ or ‘handicaps’ or
‘point spreads’ on the wagered contests,” and includes “a list
of the teams and events with a certain number of points
9
attributed to the nonfavored team. To win a bet on the favored
team . . . that team must win by a score exceeding the point
spread given to the nonfavored team.” United States v. George,
568 F.2d 1064, 1067 n.4 (4th Cir. 1978) (quoting Thomas, 508
F.2d at 1202).
Sanford testified that he provided Brett with lines on a
daily basis during a three-year period between 2009 and 2012,
and suggested that these lines assisted Brett in placing his
personal bets. After receiving Sanford’s lines, Brett
frequently placed such personal bets with Sanford. The record
does not indicate whether Brett used Sanford’s lines in the
gambling business. However, bookies may cooperate with each
other in order to set consistent lines and to prevent bettors
from winning on competing teams. See id. at 1067 n.7, 1069-70.
In this case, the government sought to prove a link connecting
Sanford to Brett’s gambling business by eliciting the above
evidence of Sanford’s sharing of information.
C.
The jury trial began on Monday, September 16, 2013. On the
preceding Friday, September 13, 2013, Staples advised the
prosecution team from the United States Attorney’s Office for
the District of South Carolina that the Utah office of the
Securities and Exchange Commission (SEC) was actively
investigating him for fraud. The prosecution team did not
10
disclose its knowledge of this investigation to the defendants’
attorneys. When the government presented Staples’s testimony on
Tuesday, September 17, 2013, the defendants’ counsel did not
cross-examine him.
Also on Tuesday, September 17, 2013, an attorney in the
civil division of the same United States Attorney’s Office that
was prosecuting the defendants (the civil division) received a
draft civil complaint from the SEC identifying Staples as a
defendant. The complaint was to be filed in the district court
in South Carolina, with the United States Attorney’s Office for
the District of South Carolina acting as local counsel. In the
complaint, the government alleged that Staples had engaged in
“fraudulent conduct . . . designed to profit from the deaths of
terminally ill individuals.” Staples allegedly purchased on
these individuals’ behalf discounted corporate bonds containing
a survivor’s option, which option Staples fraudulently redeemed
at full value for his own benefit upon the death of each client.
Staples allegedly obtained profits of at least $6.5 million as a
result of this scheme.
One day after the civil division received the complaint, on
Wednesday, September 18, 2013, the jury in the defendants’ case
began its deliberations, and returned guilty verdicts the same
day against Jack, Brett, and Douglas. Also on that day, the
chief attorney of the civil division read a newspaper article
11
about Staples’s testimony in the present case, and contacted the
Utah office of the SEC to determine whether Staples was the same
person who was the subject of the SEC complaint. However, the
record does not show whether, or in what manner, the SEC
responded to this request for information.
On Friday, September 20, 2013, two days after the jury
returned the guilty verdicts, an attorney in the civil division
filed the SEC complaint in the district court. After the
complaint was filed, an attorney in that division discussed the
contents of the complaint with the prosecutors in this case.
On Tuesday, September 24, 2013, after defense counsel
learned of the SEC complaint, the defendants requested a new
trial based on the government’s failure to disclose the
impeachment evidence involving the SEC investigation, which the
defendants contended was material to the jury’s verdict. In
assessing the defendants’ Brady claim, the district court
assumed that the prosecutors knew during the trial that Staples
was being investigated by the SEC, and that there was a pending
civil complaint. Although the court found that the defendants
did not know about the SEC investigation, the court concluded
that a Brady violation had not occurred because evidence of the
SEC investigation was not material to the jury’s determination
of the defendants’ guilt. Thus, the district court found that
the defendants had failed to show that there was a reasonable
12
probability of a different result had they been informed in a
timely manner of the SEC investigation.
The district court reasoned that although Staples’s
testimony helped to establish Tammy’s involvement in the
gambling business, “the Government’s case did not depend on
Tammy Parker being the fifth participant.” The court further
explained that Staples’s testimony was limited to authenticating
Tammy’s notes and the audio recordings and to matters that
largely were not in dispute, and that, therefore, an attack on
Staples’s credibility was unlikely to have had an impact on the
jury verdict. The court accordingly denied the defendants’
motions for a new trial, and this appeal followed.
II.
The defendants argue that the district court erred in
denying their motions for a new trial based on the government’s
failure to disclose its knowledge of the active SEC
investigation, in violation of Brady. The defendants assert
that the SEC investigation was material to the outcome of the
trial, because the jury could have found that Tammy was the
fifth participant based primarily on Staples’s testimony linking
her to the gambling business.
In response, the government contends that its failure to
disclose information about the ongoing SEC investigation did not
13
result in a Brady violation because: (1) the fraud investigation
conducted by the SEC was not proper impeachment evidence under
Federal Rule of Evidence 608(b); (2) Staples provided only
“limited” and “uncontroversial” testimony; (3) the defendants
already had knowledge of Staples’s business practices underlying
the SEC complaint; and (4) the prosecution team did not have a
duty to “uncover” an investigation conducted by another
government agency. We disagree with the government’s arguments.
We review the district court’s denial of a motion for a new
trial for abuse of discretion. United States v. Stokes, 261
F.3d 496, 502 (4th Cir. 2001). A district court abuses its
discretion when it commits a legal error in determining whether
a Brady violation has occurred; we therefore review the district
court’s Brady ruling de novo. United States v. Bartko, 728 F.3d
327, 338 (4th Cir. 2013). In conducting this de novo analysis,
we review the district court’s accompanying factual findings for
clear error. United States v. King, 628 F.3d 693, 702 (4th Cir.
2011).
Under the Supreme Court’s decision in Brady, “the
suppression by the prosecution of evidence favorable to an
accused . . . violates due process where the evidence is
material either to guilt or to punishment, irrespective of the
good faith or bad faith of the prosecution.” 373 U.S. at 87.
To establish a Brady violation, a defendant must show (1) that
14
the undisclosed information was favorable, either because it was
exculpatory or because it was impeaching; (2) that the
information was material; and (3) that the prosecution knew
about the evidence and failed to disclose it. United States v.
Wilson, 624 F.3d 640, 661 (4th Cir. 2010); see also Giglio v.
United States, 405 U.S. 150, 153-54 (1972) (explaining that
material impeachment information is encompassed within the Brady
rule).
Evidence is material if there is a “reasonable probability
that its disclosure would have produced a different result.”
Bartko, 728 F.3d at 340 (citation omitted). This standard does
not require a showing that a jury more likely than not would
have returned a different verdict. Id. Rather, the “reasonable
probability” standard is satisfied if “the likelihood of a
different result is great enough to undermine confidence in the
outcome of the trial.” Id. (citation and internal quotation
marks omitted). And, in particular, impeachment evidence may be
material when the witness in question “supplied the only
evidence of an essential element of the offense,” especially if
the undisclosed evidence was the only significant impeachment
material. Id. at 339 (citation omitted). In contrast,
impeachment evidence is not material if it is “cumulative of
evidence of bias or partiality already presented and thus would
15
have provided only marginal additional support for the defense.”
Id. (citation, internal quotation marks, and brackets omitted).
Initially, we conclude that the ongoing nature of the SEC
investigation was admissible, favorable impeachment evidence.
If the defendants had been able to cross-examine Staples about
the SEC investigation, they could have impeached Staples’s
credibility in two ways. First, such evidence would have
demonstrated Staples’s potential bias in testifying as a
government witness when he knew that a significant federal
investigation was pending against him. “[T]he exposure of a
witness’ motivation in testifying is a proper and important
function” of cross-examination. United States v. Ambers, 85
F.3d 173, 176 (4th Cir. 1996) (quoting Davis v. Alaska, 415 U.S.
308, 316-17 (1974)). As the Supreme Court observed in United
States v. Abel, 469 U.S. 45 (1984), an effective showing of bias
held by a witness “would have a tendency to make the facts to
which he testified less probable in the eyes of the jury than it
would be without such testimony.” Id. at 51.
Second, questions regarding the SEC fraud investigation
could have been used under Federal Rule of Evidence 608(b) to
show Staples’s general character for untruthfulness. Under Rule
608(b), “specific instances of a witness’s conduct” may be the
subject of cross-examination if such instances “are probative of
16
the character for truthfulness or untruthfulness of [] the
witness.” Fed. R. Evid. 608(b).
Fraudulent conduct is an “instance[] of misconduct
. . . clearly probative of truthfulness or untruthfulness” and
such evidence is admissible under Rule 608(b). United States v.
Leake, 642 F.2d 715, 718-19 (4th Cir. 1981). Although the
allegations in the SEC complaint had not yet been proven at the
time of the defendants’ trial, the alleged conduct underlying
the SEC complaint and the government’s pursuit of a fraud
investigation against Staples unquestionably were probative of
Staples’s character for untruthfulness under Rule 608(b).
Therefore, evidence of the ongoing SEC investigation was
favorable impeachment information under the first prong of
Brady. 4 See Wilson, 624 F.3d at 661.
We next conclude that evidence of the SEC investigation
was material under the standard articulated in Brady, and under
decisions applying the Brady rule. As we already have noted,
for the jury to have convicted the defendants under Section
1955, it was not necessary that all twelve jurors agree on the
identity of the fifth participant. See Nicolaou, 180 F.3d at
571. The jury could have reached a guilty verdict against the
4
We observe that, in its consideration of the defendants’
motions for a new trial, the district court noted that it would
have permitted limited cross-examination regarding the SEC
investigation.
17
defendants if only one juror had based her determination of
guilt on a finding that Tammy was the fifth participant in the
business, and the remaining eleven jurors had concluded instead
that a layoff bookie was the fifth participant.
The verdict form did not ask the jurors to specify the
identities of the participants in the gambling business and,
thus, we do not know whether any juror relied on Tammy’s
involvement in the gambling business to satisfy the five-
participant requirement. However, in light of the relative
strength of the government’s theories, we conclude that there is
a reasonable probability that at least one juror would have
viewed Tammy as the fifth participant.
The government depicted Tammy as the only purported fifth
participant who had a role in managing money made in the
gambling business. Tammy’s payment of taxes on gambling income
illustrated her detailed knowledge of and direct involvement in
the gambling business’ finances. Tammy also physically accepted
payments from one of Brett’s customers, accounted for the
“booking fund,” set aside the share of profits owed to Bryan,
Brett’s employee in the gambling business, and directed the use
of gambling proceeds for household expenses. These facts
constituted sufficient evidence from which the jury could have
concluded that Tammy was a fifth participant in the gambling
18
business based on her role in actively managing the business’
proceeds.
We further observe that the government’s evidence
supporting the layoff bookie theory was no stronger than the
evidence supporting Tammy’s involvement. While the evidence
regarding Brett’s use of layoff bookies involved the testimony
of several witnesses, this evidence was general and cumulative
in nature. Although the jury could have inferred from this
evidence that Brett engaged in layoff betting during the time
period alleged in the indictment, the government’s evidence
supporting this theory was far from overwhelming, and was not
sufficiently strong to permit us to conclude that all twelve
jurors convicted the defendants on this theory regarding the
fifth participant.
The government’s evidence concerning Sanford’s involvement
in the gambling business, which involved providing “lines” to
Brett, was even less substantial than the evidence supporting
the layoff bookie theory. Sanford testified that he was not
concerned with other bookmakers’ lines, and suggested that he
sent lines to Brett in order to facilitate Brett’s personal
betting. Although the government contends otherwise, Sanford’s
testimony could only support the conclusion that Brett used the
lines to place his own personal bets with Sanford.
19
Upon review of this evidence supporting each of the three
theories advanced by the government, we conclude that there is a
reasonable probability that at least one juror would have
rejected the government’s theories with respect to the layoff
bookies and Sanford, and found that Tammy was the only fifth
participant in the gambling business. 5 Accordingly, in
considering the materiality prong of Brady, we must determine
whether the ability to impeach Staples’s testimony would have
had a reasonable probability of changing a single juror’s view
regarding Tammy’s involvement in the gambling enterprise.
Aside from Staples’s testimony, the government presented
only minimal evidence of Tammy’s involvement in the gambling
operation. The only other evidence linking Tammy to the
business was her periodic acceptance of envelopes containing
betting payments when Brett was not at home, and the “booking
fund” envelope that was found on her desk after her death.
Although a jury could have concluded from this additional
evidence that Tammy physically handled betting funds, Staples’s
testimony, if believed, affirmatively established that Tammy
5 We also observe that during its deliberations, the jury
submitted to the court a question concerning whether all jurors
must unanimously agree on the identity of the fifth participant.
This jury question, although not definitive in any respect,
provides additional support for a conclusion that there is a
reasonable probability that at least one member of the jury
relied on Tammy’s involvement to satisfy the five-participant
requirement.
20
actively managed the gambling proceeds as part of the family’s
budget and paid taxes on gambling income on Brett’s behalf.
Staples’s testimony therefore supplied critical evidence in
support of the government’s theory that Tammy acted as a fifth
participant in the gambling business. Moreover, such testimony
was particularly significant because no evidence directly linked
Tammy to the gambling business conducted by Jack and Douglas.
The evidence in the present case thus stands in stark
contrast to the evidence in Bartko, in which we identified an
egregious pattern of Brady violations by the government, but
concluded that these failures were not material due to the
strength of the government’s case and the defendant’s already
extensive impeachment of a key government witness. 728 F.3d at
337-40. Here, however, defense counsel did not even attempt to
cross-examine Staples in the absence of available impeachment
evidence concerning Staples’s fraudulent activities. 6
Additionally, in Bartko, we emphasized that the government
had presented “overwhelming” evidence of Bartko’s guilt “beyond
6 The government contends that defense counsel could have
cross-examined Staples regarding his past romantic relationship
with Tammy, even though Staples already had admitted the fact of
the relationship on direct examination. This argument, however,
misses the point that evidence of an active federal fraud
investigation of Staples’s activities involving terminally ill
victims would have been far more damaging to Staples’s
credibility than his romantic liaison with a deceased
acquaintance.
21
any shadow of a doubt.” Id. at 340 (agreeing with these
conclusions reached by the district court). In contrast, the
government in the present case pieced together various different
theories regarding the identity of the fifth participant, none
of which was supported by overwhelming evidence.
We therefore disagree with the government’s
characterization of Staples’s testimony as being of “limited”
effect. By authenticating Tammy’s handwriting and her budget
notes for the jury, Staples’s testimony provided the only direct
evidence of Tammy’s active management of gambling proceeds, as
opposed to mere knowledge of Brett’s role in the gambling
business. And because the government did not offer into
evidence the actual tax returns on which Tammy listed the
gambling income, Staples’s testimony was the only evidence
establishing that Tammy completed those tax forms.
If the defendants had been able to ask Staples about
whether his testimony was influenced by a desire to receive
favorable treatment from the government in the fraud
investigation, and about his alleged involvement in the major
fraud scheme, the defendants could have undermined further the
limited evidence presented by the government that Tammy was the
22
fifth participant in the gambling business. 7 For these reasons,
we conclude that the prosecutors violated their obligations
under Brady when they failed to disclose impeachment evidence of
the SEC investigation to defense counsel, and that this
impeachment evidence was material to the outcome of the trial.
Our conclusion is not altered by the government’s
contention that it was not required to disclose information
about the SEC investigation because the defendants already were
aware of Staples’s conduct underlying the SEC complaint. In
making this assertion, the government principally relies on a
recorded conversation between Brett and Jack in which Brett
stated that he thought that Staples was engaged in a “scam”
involving elderly people, and that “if they investigate
[Staples] he won’t want to get on the stand with nothing
[because] his credibility is sh*t” (emphasis added). The
government further asserts that Jack informed a Secret Service
agent working on the federal gambling investigation that Staples
was being investigated for certain “questionable business
practices.”
7
We disagree with the government’s argument that evidence
of the SEC investigation is not material because Staples would
have denied engaging in fraud if asked during cross-examination.
Staples had admitted to the prosecution team that he was aware
of the SEC investigation, which knowledge itself would have
called into question Staples’s motivation for testifying on
behalf of the government.
23
We examine this issue under the established principle that
when “exculpatory information is not only available to the
defendant but also lies in a source where a reasonable defendant
would have looked, a defendant is not entitled to the benefit of
the Brady doctrine.” United States v. Jeffers, 570 F.3d 557,
573 (4th Cir. 2009) (quoting United States v. Wilson, 901 F.2d
378, 381 (4th Cir. 1990)). Thus, a Brady violation has not
occurred if the defense is aware, or should have been aware, of
impeachment evidence in time to use it in a reasonable and
effective manner at trial. Id.
After considering the government’s evidence, the district
court found that although Brett and Jack “may have thought
Staples had stolen from elderly or sick people,” neither Jack,
Douglas, nor Brett knew about the nature of the fraud, the
active SEC investigation, or the imminent SEC complaint. The
government has failed to identify anything in the record to show
that the district court clearly erred in this determination.
See King, 628 F.3d at 702. Moreover, even if the defendants
were aware of Staples’s alleged “questionable business
practices,” the impeachment value of such information would have
been far less than the value of showing that Staples was the
subject of an imminent civil fraud action and may have been
testifying in an effort to receive favorable treatment from the
government. Thus, the proffered evidence of Brett’s and Jack’s
24
knowledge did not relieve the government of its disclosure
obligations. 8
We likewise disagree with the defendants’ contention that
the evidence was insufficient to support their convictions. In
evaluating a challenge to the sufficiency of the evidence, we
must determine whether a reasonable fact finder could have
accepted the evidence “as adequate and sufficient to support a
conclusion of a defendant’s guilt beyond a reasonable doubt,”
viewing the evidence in the light most favorable to the
government. United States v. Cornell, 780 F.3d 616, 630 (4th
Cir. 2015) (quotation marks and citations omitted).
As we already have observed, the sole disputed element of
the crime was whether there were five participants in the
gambling business for the required time period. Although
Section 1955 requires that an illegal gambling business
8
We similarly are unpersuaded by the government’s argument
that its disclosure obligations were not triggered because the
prosecution team was unaware before trial of the imminent civil
complaint initiated by the SEC and filed by a different division
of the United States Attorney’s Office in South Carolina. The
government contends that the prosecution team did not have to
uncover impeachment information held by other government
agencies. See Kyles v. Whitley, 514 U.S. 419, 437 (1995)
(“[T]he individual prosecutor has a duty to learn of any
favorable evidence known to the others acting on the
government’s behalf in the case.”) (emphasis added). We need
not consider whether this distinction advocated by the
government has any merit, in light of the prosecution team’s
admission that Staples personally had advised the prosecutors
about the active SEC investigation three days before trial.
25
“involve[] five or more persons” who engage in certain business-
related activities, the jurors need not reach a unanimous
agreement regarding which five persons comprised the gambling
business. See Nicolaou, 180 F.3d at 571. In other words, the
disputed element of Section 1955 on which the jury must be
unanimous is the size of the gambling operation, not the
“particular set of facts” underlying the five-participant
element. Id.; see also Schad v. Arizona, 501 U.S. 624, 631-32
(1991) (explaining that jurors returning a general verdict need
not agree on a single means of commission of the crime)
(plurality opinion); United States v. Griggs, 569 F.3d 341, 343
(7th Cir. 2009) (“The law distinguishes between the elements of
a crime, as to which the jury must be unanimous, and the means
by which the crime is committed.”). As the Supreme Court
explained in Griffin v. United States, we will not overturn a
jury’s guilty verdict merely because the jury had the “option of
relying upon a factually inadequate theory” proffered by the
government, so long as “there existed alternative grounds for
which the evidence was sufficient.” 502 U.S. 46, 59-60 (1991)
(citation omitted).
We therefore must determine whether the government
presented sufficient evidence to support one of its theories
regarding the fifth participant. We initially hold that the
government offered sufficient evidence for the jury to find that
26
Brett, Jack, Douglas, and Bryan worked together in a single
gambling business. The evidence, construed in the light most
favorable to the government, showed that the bookmakers from
each business periodically answered the telephone lines the
other business used to accept bets, and that the two operations
shared clients beginning in February 2012. In addition, as we
explained in our Brady analysis, the evidence was sufficient to
support a jury finding that Tammy was a fifth participant.
Although the government’s case was not overwhelming, the
evidence viewed in the light most favorable to the government
formed a sufficient basis for the defendants’ convictions. 9 We
therefore do not enter judgments of acquittal, but vacate the
defendants’ convictions based on the government’s Brady
violation and remand the cases to the district court.
9
The defendants additionally argue that Tammy’s notes are
inadmissible hearsay and should have been excluded from the
trial. We disagree. The notes were not “offer[ed] . . . to
prove the truth of the matter asserted” such as, for example,
the value of the money actually held in the booking fund. See
Fed. R. Evid. 801(c). Rather, the government offered the notes
to illustrate Tammy’s knowledge of and participation in the
gambling business. Because the notes are not hearsay, the
district court did not abuse its discretion in admitting them.
27
III.
Accordingly, we vacate the convictions of Jack Parker and
Douglas Taylor. We remand their cases to the district court for
further proceedings consistent with this opinion.
VACATED AND REMANDED
28