United States v. Stewart ( 2005 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 03-4775
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
TERRY W. STEWART,
Defendant - Appellant.
Appeal from the United States District Court for the Western
District of North Carolina, at Bryson City. Lacy H. Thornburg,
District Judge. (CR-01-11)
Argued: February 2, 2005 Decided: April 14, 2005
Before LUTTIG, WILLIAMS, and GREGORY, Circuit Judges.
Affirmed in part, vacated in part, and remanded by unpublished per
curiam opinion.
ARGUED: Camille Michel Davidson, THE FULLER LAW FIRM, P.C.,
Charlotte, North Carolina, for Appellant. Matthew Theodore
Martens, Assistant United States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Charlotte, North Carolina, for Appellee. ON
BRIEF: Gretchen C. F. Shappert, United States Attorney, Charlotte,
North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
On May 31, 2001, a grand jury returned a second superseding
indictment charging Appellant Terry W. Stewart (“Stewart”), with 37
counts of conspiracy, mail fraud, wire fraud, and money laundering.
After a trial in November 2001, in which Stewart appeared pro se,
a jury convicted Stewart on 24 of the 37 counts. The district
court thereafter sentenced him to 2,100 months (175 years) of
imprisonment. Stewart appeals his conviction and sentence. We
affirm Stewart’s conviction. However, consistent with United
States v. Hughes, No. 03-4172, 2005 WL 628224, (4th Cir. March 16,
2005), our recently published opinion giving guidance on the
application of United States v. Booker, 125 S. Ct. 738 (2005), we
find plain error in sentencing, exercise our discretion to notice
the error, vacate the sentence, and remand to the district court
for resentencing.
I.
1
This case involves a “Ponzi” scheme devised and carried out
by Phillip Vaughan (“Vaughan”), Phillip Greer (“Greer”) and,
Stewart. The premise of the scheme was the marketing of an
investment opportunity involving what was represented to the
1
A Ponzi scheme is essentially “a phony investment plan in
which monies paid by later investors are used to pay artificially
high returns to the initial investors,” rather than made from the
success of a legitimate business venture. United States v. Godwin,
272 F.3d 659, 666 (4th Cir. 2001) (citation omitted).
2
victims as a secret method of trading options and futures in a
“risk free” manner that produced consistently large returns and
allowed the investment to grow tax free through the use of trusts.
These representations were false.
In 1995, Vaughan formed a company named Banyan International
Ltd. (“Banyan”) to solicit investments from individuals. From 1996
through March 2000, Banyan salesmen sold “note receivables”
offering high fixed rates of return to unsophisticated individuals.
Proceeds from new investors were used to make lulling payments to
prior investors, and to pay money to Banyan insiders, allegedly
including Stewart. Banyan owed over 500 investors more than $89
million when the scheme was uncovered. Only $4.4 million was
seized from Banyan brokerage accounts.2
In 1994, Stewart and his wife, Jeni, began selling private
trusts as independent contractors for Commonwealth Trust Company
(“Commonwealth”), a California-based company.3 In the latter part
2
The total amount of principal investment was $56 million, but
the amount that the investors thought that their investments had
earned when the scheme was uncovered amounted to over $89 million.
At Stewart’s sentencing, the district court found that Banyan was
responsible for laundering approximately $114 million in funds.
3
Stewart, a decorated Marine Corps veteran, retired from the
military in 1991 and thereafter states that he “began to learn
things that he did not like about the government that he had served
for twenty-six years. He began to study tax issues and learned how
wealthy individuals used asset protection devices to protect their
assets from taxation and seizure.” Appellant’s Br. at 21. “As
Stewart gained knowledge about asset protection, he wanted to share
this information with others,” id., which is why he began working
with Commonwealth.
3
of 1996, Stewart met Vaughan and began a business relationship.
Stewart, who was not an employee or officer of Banyan, claims that
the relationship consisted of mutual referrals. However, the
Government maintains that a key component of the marketing of the
“note receivables” in the Ponzi scheme was the representation that
the earnings on the investments were non-taxable. In this regard,
Banyan’s investors were told that to render their investment non-
taxable, they needed to purchase a “pure trust organization,”
(“PTO”) and were directed to Commonwealth to make the purchase.4
Commonwealth sold three products to Banyan investors: (1) PTOs, (2)
Internationally Business Corporations (“IBCs”), and (3) “Private
Company Trusts” (“PCTs”).
Stewart offered his services at seminars throughout the
country. At these seminars, he advised people how to transfer
ownership of personal and business assets into one or more PTOs,
IBCs, or PCTs and then issue fabricated liens against the same
property to create the appearance that the property had no net
value.5 At some of these seminars, Banyan salesmen spoke, and
Stewart promoted the Banyan investment vehicles. Stewart, through
4
Stewart admits that Banyan literature endorsed Stewart and
Commonwealth but argues that many of Banyan’s investors were not
clients of his and purchased their PTOs elsewhere.
5
During these seminars, Stewart stated that “he hadn’t paid
taxes in years” because “it’s no longer legal to be taxed.” J.A.
745. Stewart also stated that because the PTOs were a private
contract between private individuals, they were protected by common
law and not subject to statutory laws. Id. at 1058-60; 1159.
4
Commonwealth, paid Banyan a $200 referral for people it referred to
Stewart.
Stewart charged $2,525 for the purchase of a PTO, which
included trust documents from Maricopa County, Arizona and minutes
of trustees meetings appointing the purchaser as “managing
director” of the trust. The package also included a “trust
identification number” to be used in place of a tax identification
number. The “trust identification numbers” used the same state
prefix and number of digits as tax identification numbers, but were
not legitimate.
Vaughan, Greer, and the other co-defendants all pled guilty.
Stewart was the only one to proceed to trial. This appeal from
Stewart’s conviction and sentence follows.
II.
First, Stewart argues that he did not knowingly and
intelligently waive his right to counsel. In the alternative, he
argues that the district court judge should have appointed standby
counsel given the complexities of his criminal trial. We reject
these arguments.
5
A.
Determination of a waiver of the right to counsel is a
question of law, and we review it de novo. United States v.
Singleton, 107 F.3d 1091, 1097 n.3 (4th Cir. 1997). The Supreme
Court has held that under the Sixth Amendment a criminal defendant
must be afforded the right to counsel, including court-appointed
counsel if the defendant is financially unable to retain an
attorney to defend himself. Gideon v. Wainwright, 372 U.S. 335,
341 (1963). But the Supreme Court has also made clear that
“although courts are commanded to protect the right to counsel
zealously, the defendant can waive the right if the waiver is
knowing, intelligent, and voluntary.” Singleton, 107 F.3d at 1095
(citing Brady v. United States, 397 U.S. 742 (1970); Johnson v.
Zerbst, 304 U.S. 458 (1938)).
Courts must take care not to force counsel upon a defendant,
because in addition to the right to the assistance of counsel, the
Sixth Amendment implicitly provides an affirmative right to self-
representation. Faretta v. California, 422 U.S. 806, 807 (1975).
To preserve both the right to counsel and the right to self-
representation, “a trial court must proceed with care in evaluating
a defendant’s expressed desire to forgo representation and conduct
his own defense.” Singleton, 107 F.3d at 1096. Indeed,
[a] trial court evaluating a defendant’s request to
represent himself must “transverse . . . a thin line”
between improperly allowing the defendant to proceed pro
se, thereby violating his right to counsel, and
6
improperly having the defendant proceed with counsel,
thereby violating his right to self-representation. A
skillful defendant could manipulate this dilemma to
create reversible error.
Fields v. Murray, 49 F.3d 1024, 1029 (4th Cir. 1995) (en banc)
(citations omitted).
“The determination of whether there has been an intelligent
waiver of the right to counsel must depend, in each case, upon the
particular facts and circumstances surrounding that case, including
the background, experience, and conduct of the accused.” Johnson,
304 U.S. at 464. “[W]hether there is a proper waiver should be
clearly determined by the trial court, and it would be fitting and
appropriate for that determination to appear upon the record.” Id.
at 465. Thus, “we review the sufficiency of a waiver of the right
to counsel by evaluating the complete profile of the defendant and
the circumstances of his decision as known to the trial court at
the time.” Singleton, 107 F.3d at 1097.
We have rejected the proposition that the failure of the trial
court to conduct a searching or formal inquiry into the defendant’s
understanding of his situation and his awareness of the dangers of
self-representation is error. Id. at 1097-98. Rather, “the trial
judge is merely required to determine the sufficiency of the waiver
from the record as a whole rather than from a formalistic,
deliberate, and searching inquiry.” Id. at 1098 (quoting United
States v. Gallop, 838 F.2d 105, 110 (4th Cir. 1988)).
7
B.
Stewart’s lack of counsel was discussed at several pre-trial
proceedings, including five separate status of counsel hearings.
First, at Stewart’s initial appearance before the magistrate judge,
the judge went through the second superseding indictment, after
giving Stewart an opportunity to read it, and asked Stewart if he
understood each of the charges against him. J.A. 104-125. Stewart
affirmatively stated that he understood each charge. Id. The
judge also went through the maximum penalties for each of the
charges and Stewart stated that he understood each penalty. Id.The judge then informed Stewart of his right to counsel, appointed
or retained, and Stewart stated that his wife was in the process of
interviewing attorneys to retain. Id. at 126.
Next, at Stewart’s detention hearing, the magistrate judge
asked Stewart about the status of his counsel and Stewart stated
that he was in the process of interviewing a particular attorney
but had not retained him. Id. at 134. The magistrate judge then
asked if Stewart wanted to post pone the hearing so that he could
have counsel present, but Stewart declined and signed a waiver of
counsel form for the purpose of the detention hearing only.6 Id.6
At the conclusion of the hearing, the magistrate judge set a
$500,000 unsecured bond for Stewart. J.A. 169. The district court
thereafter revoked Stewart’s bond and detained him, finding him to
be a flight risk. Id. at 215. We affirmed the district court’s
ruling. United States v. Stewart, 19 Fed. Appx. 46 (4th Cir.
2001).
8
at 134-35. At the detention hearing before the district court, the
district court judge advised Stewart of his right to counsel and
asked if he would like counsel appointed for him, but Stewart again
declined. Id. at 214-15.
At Stewart’s status of counsel hearing on July 9, 2001,
Stewart told the magistrate judge that he was arranging to retain
counsel. Id. at 221-22. After the magistrate judge stated to
Stewart that his best chance of getting an acquittal would be to
retain counsel, Stewart stated that he understood. The magistrate
judge then stated to Stewart:
Well, we need to get something done pretty soon. And you
need to understand that probably Judge Thornburg does not
have to wait until you’ve got a lawyer, and he will wait
a reasonable period of time for you to get a lawyer. But
if you don’t have a lawyer within a certain period of
time, he will not allow the fact that you don’t have a
lawyer deter the trial at some point from going on. Do
you understand?
Id. at 226. Stewart stated that he did understand. Id.
At the second status of counsel hearing on August 7, 2001, the
magistrate judge suggested that the court could appoint an attorney
until Stewart was able to find the funds to retain an attorney.
Id. at 231. The magistrate judge stated: “I worry about you, Mr.
Stewart. A lot of these other folks have got lawyers, and they’re
talking to the government.” Id. The magistrate judge told Stewart
again that “[b]ut what’s going to happen is it’s going to come up
against the trial date and you’re going to go I’m still trying to
get a lawyer and I need to postpone it, and they’re going to go
9
that’s too bad. . . . Do you understand what I’m saying.” Id. at
232. Stewart responded: “Well, sir, I feel in some ways that I’m
being constructively denied the counsel of my choice. . . . I
couldn’t make any arrangements to go up and see the attorney . . .
.” Id. Stewart told the magistrate judge that he would “like to
work a little harder on trying to work things out with [an attorney
in Indianapolis] at this point.” Id. at 233.
At the third status of counsel hearing on August 13, 2001,
Stewart stated that he was still working on getting an attorney and
the magistrate judge stated:
But I’m saying to you, you need somebody to help carry
the ball for you in this. I don’t want you to be left
with - you know, in a weakened position because you have
chosen not to accept court-appointed counsel and your own
futile effort to get your own counsel resulting in you
winding up representing yourself in a disastrous court
trial. And it happens sometimes, and people lose those
things and they want to go up and they say, well, I
didn’t have an attorney of my choice. And if the court
has done everything to give you a competent attorney, the
reason you don’t have an attorney of your choice is you
refused the court-appointed counsel and couldn’t hire
your own, that doesn’t get you the win down the road with
the court of appeals. In other words, we’re doing
everything we can to give you a lawyer.
Id. at 245-56. At the fourth status of counsel hearing on August
15, 2001, the magistrate judge asked Stewart again if he wanted a
court-appointed attorney and he stated, “I would like to continue
pro se, sir.” Id. at 253-b. The magistrate judge cautioned: “I
really think this is a bad mistake to represent yourself like this.
It never works over in federal court. . . . You’ve got to try to
10
protect yourself with regard to this case and be vocal in court and
try your case.” Id. at 253-e.
At the fifth, and final, status of counsel hearing on
September 13, 2001, the magistrate judge summarized the court’s
efforts to provide Stewart with counsel and noted that “in spite of
the numerous requests by the Court . . . you have chosen not to ask
for a court-appointed attorney.” Id. at 255. The magistrate judge
then told Stewart that the district court judge, Judge Thornburg,
had ruled that if Stewart did not request a court-appointed
attorney by September 21, he would have to proceed pro se or retain
counsel, but that the trial date in November 2001 would not be
delayed. Id. Stewart responded that he understood. Id. At a
calendar call on November 5, 2001, Stewart made a oral motion for
a continuance based on lack of preparation time, but, having
already continued the trial once, Judge Thornburg denied that
motion. Id. at 298.
C.
In Singleton, we set out the proper analysis for determining
if a waiver of counsel was knowing and intelligent. 107 F.3d at
1098-99. As noted, a formal inquiry is not required, rather, an
“open court exploration of the defendant’s background capabilities
and understanding of the dangers and disadvantages of self-
representation,” is all that is necessary. Id. at 1097-98.
11
Relevant factors include the defendant’s appreciation of the
charges and potential penalties, the defendant’s understanding of
the judicial process, and the defendant’s educational background.
Id. at 1098.
Looking first to the nature of the charges and the potential
penalty, Stewart was informed of these at his arraignment. As
detailed, the magistrate judge went through each charge and its
potential penalty, and Stewart responded that he understood each
one. The magistrate judge also, on numerous occasions, expressed
to Stewart that this was a complex fraud case that carried the
potential for a long sentence. Stewart also responded that he
understood this. Thus, Stewart was adequately informed of the
charges against him and their penalties.
Next, looking to Stewart’s appreciation of the judicial
process. Stewart proceeded pro se in several pre-trial hearings on
various motions as well as at his status of counsel hearings. In
these motion hearings, Stewart observed the Government’s attorney
make arguments and conduct direct examinations of witnesses.
Stewart also conducted cross-examinations of witnesses at these
hearings. In addition, throughout the hearings, the magistrate
judge reminded Stewart of the Federal Rules of Evidence and Federal
Rules of Criminal Procedure that must be followed. Indeed, Stewart
participated in the judicial process for nearly sixth months before
trial.
12
Finally, with regard to Stewart’s intelligence and education,
the magistrate judge and the district court each had ample
opportunity to observe Stewart throughout the pretrial hearings.
They each questioned him intensively about his decision to proceed
pro se. Stewart also had an impressive education and career in the
military.7 In addition, Stewart was well-spoken, respectful, and
even well-versed in various aspects of the law during his pretrial
hearings, demonstrating his competency and composure.
The complex nature of this fraud case as well as the large
nature of the penalties it carried highlight how unfortunate
Stewart’s decision to proceed pro se really was in this case.
However, it is hard to imagine what else the magistrate judge and
district court could have done to convince Stewart to proceed with
counsel, short of forcing counsel upon him, which would undoubtedly
violate his right to self-representation. A review of the record
as a whole is replete with evidence that Stewart’s decision to
forego counsel and proceed pro se was knowing, intelligent, and
voluntary. Under such circumstances, his waiver was effective.
7
While in the military, he was awarded two Purple Hearts, a
Bronze Star combat “V” for Valor, the Navy Commendation Medal, the
Vietnam Cross of Gallantry with Bronze Star, a National Defense
Medal, a Vietnam Service Medal, a Vietnam Campaign Medal with 9
clusters, the Presidential Unit Award, the Navy Unit Award, and the
Marine Corps Unit Award.
13
D.
Because Stewart did not request standby counsel or object to
the court’s failure to appoint standby counsel on its own, we must
review the trial court’s decision not to appoint standby counsel
for plain error. Plain error requires that the party seeking
appellate review demonstrate that: there is an error, the error is
plain, the error affects substantial rights, and the error
seriously affects the fairness, integrity or public reputation of
judicial proceedings. Olano, 507 U.S. at 732-37. However, because
no error occurred in this case, Stewart does not meet this
standard.
No court has held that the Constitution requires it to appoint
standby counsel. We have held that “[a]lthough a court may, in its
discretion, allow attorney participation [as standby counsel], the
Constitution does not mandate it.” Singleton, 107 F.3d at 1097
n.2, 1100; see United States v. Lawrence, 161 F.3d 250, 253 (4th
Cir. 1998) (“The Sixth Amendment does not require a court to grant
advisory counsel to a criminal defendant who chooses to exercise
his right to self-representation by proceeding pro se.”). While a
defendant may certainly be required to accept the assistance of
standby counsel over objection, a district court is not required to
offer standby counsel, particularly where, as here, no such request
is made.
14
III.
Stewart also raises a number of other objections to his
conviction. We address each in turn, but find them all without
merit.
A.
Stewart argues that the evidence was insufficient to support
the finding that he possessed the requisite intent to defraud.
Stewart did not move for a Fed. R. Crim. P. 29 judgment of
acquittal based on the insufficiency of the evidence. While we
have never considered the question of whether a defendant who fails
to move for a Rule 29 motion based on insufficiency of the evidence
may raise that issue on appeal, the Sixth and Ninth Circuits have
each held that a defendant may not. See United States v. Carr, 5
F.3d 986, 991 (6th Cir. 1992) (noting that because defendant failed
to make insufficiency arguments to judge either at the close of
government’s case or after the close of the evidence as a whole,
defendant failed to preserve issues for appellate review); United
States v. Ward, 914 F.2d 1340, 1346 (9th Cir. 1990) (stating that
appellant waived right to challenge the sufficiency of the evidence
on appeal by failing to move for a Rule 29 motion during trial on
that ground); 2A Charles Alan Wright, Federal Practice and
Procedure § 469 (3d ed. 2000) (referring to the “seemingly well-
settled doctrine that if no motion for judgment of acquittal was
15
made in the trial court, an appellate court cannot review the
sufficiency of the evidence. And if the defendant asserted
specific grounds in the trial court as the basis for a motion for
acquittal, he or she cannot assert other grounds on appeal.”).
Here, Stewart did make a motion styled a Rule 29 judgment of
acquittal, but it was based on grounds of alleged prosecutorial
misconduct. Supp. J.A. 1. The district court denied that motion,
stating that Stewart “makes no argument in his motion concerning
the sufficiency of the evidence.” Id. at 12.
Stewart’s failure to move for a Rule 29 motion based on the
sufficiency of the evidence precludes our review. As one purpose
of a Rule 29 motion is to allow the trial court the opportunity to
grant a defendant acquittal when the evidence is insufficient to
sustain a conviction, it only works efficiently when the trial
court has such an opportunity. However, even if we were to take
the first opportunity to review the sufficiency of the evidence
here, the evidence, when taken in the light most favorable to the
Government, was such that a reasonable trier of fact could have
16
found Stewart guilty beyond a reasonable doubt.8 United States v.
Tresvant, 677 F.2d 1018, 1021 (4th Cir. 1982).
B.
During trial, Stewart subpoenaed Vaughan, a co-defendant who
had previously pled guilty, as a potential witness to testify in
his defense. Vaughan, through counsel, moved to quash the subpoena
on the ground that he would invoke his Fifth Amendment right not to
incriminate himself if called to testify. The district court thus
quashed the subpoena. Stewart argues that the district court erred
in quashing the subpoena because Vaughan’s plea agreement
specifically stated that he was waiving his right not to be
compelled to incriminate himself. J.A. 1292. Alternatively,
Stewart argues that he should have been permitted to introduce
Vaughan’s hearsay statements into evidence.
In Mitchell v. United States, 526 U.S. 314 (1999), the Supreme
Court held that a defendant who waives his Fifth Amendment right to
remain silent by pleading guilty does not thereby waive his right
8
With regard to Stewart’s intent to defraud, testimony was
presented that Stewart informed investors that attorneys and CPAs
would conclude that the tax benefits he stated that the PTOs
offered were not available but that he believed that the tax
benefits were available. J.A. 359-60; 601, 1161. However,
testimony was also presented that Stewart received and ignored
warnings from outside attorneys and CPAs regarding the lack of
legitimacy of his tax advice. Id. at 890-901; 1056-70; 1152.
Based on these warnings, it was a reasonable for the jury to infer
that Stewart understood that his belief about the tax benefits of
the PTOs was unfounded.
17
to remain silent at his sentencing. See id. at 326 (“Although a
witness has pleaded guilty to a crime charged but has not been
sentenced, his constitutional privilege remains unimpaired.”). The
Court expressly noted that “a defendant who awaits sentencing after
having pleaded guilty may assert the privilege against self-
incrimination if called as a witness in the trial of a co-
defendant, in part because of the danger of responding to questions
that might have an adverse impact on his sentence or on his
prosecution for other crimes.” Id. at 327 (internal quotation
marks omitted). Thus, the mere fact that Vaughan had pled guilty
did not mean that he no longer possessed a valid fear of further
incriminating himself and the district court correctly quashed the
subpoena.
Stewart’s alternative argument that he should be allowed to
introduce Vaughan’s hearsay statements under Chambers v.
Mississippi, 410 U.S. 284 (1973) is also without merit. In
Chambers, the Supreme Court held that, in certain “circumstances,
where constitutional rights directly affecting the ascertainment of
guilt are implicated, the hearsay rule may not be applied
mechanistically to defeat the ends of justice.” Id. at 302. At
issue in Chambers was the exclusion of certain statements by a non-
defendant who had repeatedly admitted to friends and colleagues
that he had committed the murder for which the defendant was
charged. Id. at 292-93. These statements were excluded at trial
18
as hearsay. Id. at 299. The Court reversed, finding that because
the hearsay statements were “critical evidence” for the defense and
the circumstances under which the statements were made “provided
considerable assurance of their reliability,” their exclusion
violated due process. Id. at 300-02. We have since held that the
rule of Chambers is limited to third-party confessions. United
States v. Young, 248 F.3d 260, 271 (4th Cir. 2001); see Huffington
v. Nuth, 140 F.3d 572, 584 (4th Cir. 1998) (applying Chambers only
to “exculpatory confessions by third parties”).
Because Stewart did not argue to the district court that the
hearsay rules were unconstitutional as applied under Chambers, we
review the decision for plain error. See United States v.
Dukagjini, 326 F.3d 45, 59 (2d Cir. 2003) (applying plain error
review when appellants failed to preserve objection to
Confrontation Clause violation). In his brief, Stewart fails to
identify the specific hearsay statements that he contends were
improperly excluded under Chambers, how any such statements qualify
as “third party confessions,” how such statements were “critical”
to his case, or how they were given under circumstances giving
“considerable assurance of their reliability.” Under these facts,
it was not error for the district court to exclude Vaughan’s
statements as hearsay.
19
C.
Stewart next challenges the introduction at trial of evidence
that, he contends, was obtained during an unlawful search of a
“blue shed” located near his residence.9 He contends that the
search of the blue shed was unlawful because the warrant only
allowed for the search of his residence, which does not include the
outbuildings, and that the blue shed was located on an adjoining,
but separate, piece of land. We review the scope of the warrant de
novo. United States v. Oloyede, 982 F.2d 133, 138 (4th Cir. 1992).
Here, the warrant authorized the search of the “premises” at
765 Grinder Creek Road, which was identified as the brown
“residence and place of business” of Stewart. J.A. 1448. A
warrant authorizing the search of certain “premises” implicitly
includes authorization to search outbuildings found on those
premises. See, e.g., United States v. Pennington, 287 F.3d 739,
744 (8th Cir. 2002); United States v. Cannon, 264 F.3d 875, 880
(9th Cir. 2001). An affidavit in support of the warrant also may
be used to explain an ambiguity in the scope of the warrant.
United States v. Wuagneux, 683 F.2d 1343, 1350, n.6 (11th Cir.
1982). The affidavit in this case, submitted in support of the
warrant by a financial advisor for the Internal Revenue Service,
stated that the scope of the warrant included “any outbuildings and
9
Stewart fails, however, to point to any evidence actually
introduced at trial that was seized from the blue shed.
20
appurtenances thereto.” J.A. 1451. Thus, Stewart’s claim that the
agents exceeded the scope of the warrant fails.
During trial, Judge Thornburg rejected Stewart’s second
contention, that the blue shed was not located on the land covered
by the search warrant. Id. at 1013. We review factual findings on
a motion to suppress for clear error. United States v. Jarrett,
338 F.3d 339, 343-44 (4th Cir. 2003). Here, an IRS agent testified
at the suppression hearing that he reviewed the county maps at the
time of the search and determined that the blue shed was on the
parcel of land covered by the warrant. J.A. 718, 728. Given this
testimony, it was not clear error for the district court to find
that Stewart had not shown that the shed was on the other parcel of
land.10
D.
Stewart also argues that his rights were violated under Brady
v. Maryland, 373 U.S. 83 (1963), because certain bates-stamped
documents were missing from boxes that the Government gave him
access to for discovery. To establish a Brady violation, a
defendant must demonstrate that (1) the prosecutor withheld
10
In addition, even if the shed was on another parcel, any
error would not implicate the exclusionary rule because suppression
is not required when agents executing a search warrant make an
objectively reasonable mistake as to the boundaries of the property
that they are authorized to search. See United States v.
Patterson, 278 F.3d 315, 318 (4th Cir. 2002).
21
evidence that was favorable to the defendant, either directly or
with impeachment value, (2) the prosecutor suppressed the evidence,
either willfully or inadvertently, and (3) the evidence must be
material. United States v. Vinyard, 266 F.3d 320, 331 (4th Cir.
2001). Because Stewart did not raise this issue below, we review
it for plain error. Id. at 324.
Stewart contends that when he looked at the documents that the
Government gave him access to, he noticed that several documents
were missing from the sequentially numbered documents. However,
Stewart stated to the court that he had only looked at
“approximately 40 percent of” the documents supplied to him. J.A.
295. He also stated, “I’m not going to go through hundreds of
thousands of documents hoping I’m going to stumble across
something.” Id. at 261. Given that Stewart did not review all the
documents that the Government turned over to him, he cannot
establish the first element of Brady, that the Government withheld
evidence (much less evidence that was exculpatory or impeaching)
from him.11
11
Stewart also argues that a witness for the Government
testified that the witness had been given some information that was
favorable to Stewart, but that this information was not turned over
to him. Again, without a review of all the documents turned over
to him, Stewart cannot establish a violation.
22
E.
Stewart argues that he was not afforded the opportunity to
testify on his own behalf because he was not advised of this right.
A defendant in a criminal trial has a constitutional right to
testify on his own behalf. Rock v. Arkansas, 483 U.S. 44, 51
(1987). However, we have held that a district court is not
required to advise the defendant of his right to testify or obtain
an on-the-record waiver of that right. United States v. McMeans,
927 F.2d 162, 163 (4th Cir. 1991); see Sexton v. French, 163 F.3d
874, 881 (4th Cir. 1988) (“[T]he trial court does not have a sua
sponte duty to conduct a colloquy with the defendant at trial to
determine whether the defendant has knowingly and intelligently
waived the right to testify.”). Rather, “[t]o waive the right, all
the defendant needs to know is that a right to testify exists.”
McMeans, 927 F.2d at 163. Because Stewart failed to raise this
issue below, we review it for plain error. Olano, 507 U.S. at 730.
Here, the record reflects that the district court explicitly
informed Stewart of his right to testify. J.A. 934, 1014. Then,
after the close of the Government’s evidence, Stewart stated that
he would have only one witness, Vaughan. Id. at 1268. After
Vaughan invoked his Fifth Amendment privilege, the court asked if
Stewart had any further evidence and Stewart responded, “No, sir.”
Id. at 1307. Having been advised by the district court of his
23
right to testify, Stewart’s failure to testify is a waiver of that
right and his claim thus fails.12
F.
Stewart argues that the district court erred in failing to
give the jury a “reliance on expert” instruction on the issue of
intent to defraud because he contends that the IRS provided
erroneous information to him. Because Stewart did not object to
the instructions of the district court or request the reliance on
expert instruction, we review his claim for plain error. United
States v. Stitt, 250 F.3d 878, 883 (4th Cir. 2001).
The jury instructions contained an extensive discussion of the
intent to defraud. The instructions specifically advised the jury
that “the good faith of a defendant is a complete defense to the
charge of wire fraud.” J.A. 1387. They also stated that “[a]
person who acts . . . on a belief or an opinion honestly held is
not punishable . . . merely because the belief, [or] opinion turns
out to be inaccurate, incorrect, or wrong. A honest mistake in
judgment or an error in management does not rise to the level of
12
Indeed, Stewart cannot claim that he was confused that the
district court judge’s question to him about having further
evidence meant that it was his time to testify. In Stewart’s
earlier detention hearing, the magistrate judge asked Stewart,
“[D]o you want to put on any evidence today?”. J.A. 149. Stewart
then stated that he “would like to do a presentation,” and was
thereafter afforded the opportunity to testify on his own behalf.
Id. at 149-50.
24
intent to defraud.” Id. Given that these instructions accurately
stated the law with regard to an intent to defraud and expressly
advised the jury that good faith was a defense and that a honestly
held belief does not equate to an intent to defraud, the district
court did not err in failing to give a further “reliance on expert”
instruction.
IV.
Finally, Stewart presents challenges to the application of
various guideline enhancements to his sentence as well as a Sixth
Amendment challenge under Booker. The jury found Stewart guilty on
counts of conspiracy, wire fraud, mail fraud, conspiracy to commit
money laundering, and money laundering. At sentencing the district
court grouped all counts together pursuant to U.S. Sentencing
Guideline Manual § 3D1.2(d) and used the offense level for the
money laundering counts as the offense level for the group. It
calculated Stewart’s sentence as follows:
Base level offense for money laundering, § 2S1.1: 23
Enhancement for loss greater than $100,000,000,
§ 2S1.1(b)(2): +13
Enhancement for vulnerable victims, § 3A1.1(b)(1): +2
Enhancement for large number of vulnerable victims,
§ 3A1.1(b)(2): +2
Enhancement for being an organizer or leader,
§ 3B1.1(a): +4
25
Enhancement for abuse of position of trust,
§ 3B1.3: +2
==
Final Offense Level:13 46
The enhancements to Stewart’s sentence were based on facts found by
the district court, not the jury. With these enhancements, the
district court sentenced Stewart to 2100 months, running his
sentences consecutively under U.S. Sentencing Guideline Manual §
5G1.2(d).
As Stewart has raised his Booker objection for the first time
on appeal, we review this issue under plain error analysis, which
our recent decision in Hughes governs. Under Hughes, the district
court plainly erred in imposing a sentence on Stewart that exceeded
the maximum allowed under the guidelines based on the facts found
by the jury alone.14 Hughes, 2005 WL 628224, at *2. Thus, we
vacate Stewart’s sentence and remand for resentencing “consistent
with the remedial scheme set forth in Justice Breyer’s opinion for
the Court in Booker.” Id.13
The district court calculated Stewart’s sentencing level at
46, but as the highest level on the Sentencing Guideline chart is
43, his offense level is treated as a 43. See U.S. Sentencing
Guideline Manual, ch. 5, pt. A, cmt. n.2 (2000).
14
The Government conceded at oral argument that Stewart’s
sentence was enhanced on facts not found by the jury or admitted by
Stewart.
26
V.
For the reasons set forth above, the judgment of the district court
is
AFFIRMED IN PART,
VACATED IN PART,
AND REMANDED.
27