United States v. Gary Gillion , 704 F.3d 284 ( 2012 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 11-4942
GARY LEE GILLION,
Defendant-Appellant.

Appeal from the United States District Court
for the District of South Carolina, at Columbia.
Joseph F. Anderson, Jr., District Judge.
(3:10-cr-00834-JFA-1)
Argued: October 26, 2012
Decided: December 28, 2012
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 opin-
ion, in which Judge Gregory and Judge Wilson joined.
COUNSEL
ARGUED: Eric William Ruschky, Columbia, South Caro-
lina, for Appellant. Winston David Holliday, Jr., OFFICE OF
THE UNITED STATES ATTORNEY, Columbia, South Car-
2 UNITED STATES v. GILLION
olina, for Appellee. ON BRIEF: John A. O’Leary,
O’LEARY & ASSOCIATES, INC., Columbia, South Caro-
lina, for Appellant. William N. Nettles, United States Attor-
ney, Columbia, South Carolina, for Appellee.
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 CitiCapi-
tal Trailer Rental ("CitiCapital"), a trailer leasing company
owned by CitiGroup, in 2000. Gillion was based in CitiCapi-
tal’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, Gil-
lion worked with a number of trailer leasing companies.
Throughout his career, he maintained a business relationship
and friendship with John DalCanton, a trailer leasing execu-
tive. DalCanton was serving as CitiCapital’s vice president in
its Dallas, Texas headquarters when the events leading to Gil-
lion’s convictions transpired.
UNITED STATES v. GILLION 3
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 com-
mit mail fraud and testified against Gillion at trial, described
three ways he and Gillion used Capital City to defraud Citi-
Capital and purloin profits beginning in late 2003. First, Gil-
lion 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 pur-
chase the trailers outright for a nominal sum at the end of the
period. DalCanton would either not report the nominal pur-
chase to Citigroup or "create a nominal purchase to cover up
these rentals" so he and Gillion could keep the lease pay-
ments. 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
4 UNITED STATES v. GILLION
been a Columbia-based CitiCapital customer for several
years. The government and Gillion presented conflicting
information as to whether Baker would have remained a Citi-
Capital customer as of late 2003. William Baker, the compa-
ny’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 addi-
tional credit. J.A. 679.
On October 28, 2003, Gillion, acting as president of Capital
City, signed a lease-to-own agreement with Baker. The agree-
ment 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 Capi-
tal 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 Citi-
Capital to Capital City, at $2000 per trailer. This sale repre-
sented 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.
UNITED STATES v. GILLION 5
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. Citi-
Capital 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, DalCan-
ton, and Gillion’s names to the fore. XTra’s inquiry led to a
civil suit against Gillion for conversion and breach of fidu-
ciary 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 infor-
mation 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 consti-
tutes 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 prof-
fered statements against him. Pursuant to the Agreement, Gil-
lion met with Special Agent Chris McClure on March 23,
6 UNITED STATES v. GILLION
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 conspir-
ing 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
proffered statements at trial.
During a jury trial in the United States District Court for
the District of South Carolina, the government presented testi-
mony from several witnesses, including DalCanton and
McClure. The government’s theory was that Gillion and Dal-
Canton had an overarching scheme to deprive CitiCapital of
UNITED STATES v. GILLION 7
profits, and that the pair used the three methods DalCanton
described—trailer sales, leases, and lease-to-own contracts—
to do so. DalCanton testified to each method, including the
documents surrounding the Baker deal, which represented the
third, or lease-to-own, method of defrauding CitiCapital. Dal-
Canton specifically testified to the used bill of sale document
he signed which allowed Gillion to buy the trailers he needed
for the Baker deal from CitiCapital; the $16,000 cashier’s
check Gillion used to purchase the trailers; and the fact that
DalCanton did not recognize the name of James B. Pitts, the
signature Gillion forged on the sale sheet. DalCanton stated
that CitiCapital "would have loved a profitable deal" on the
forty-eight-foot trailers Gillion contracted with Baker to lease.
J.A. 281. He also testified that in furtherance of the scheme,
he helped Gillion falsify a certificate of liability so that Capi-
tal City would appear to be legitimately insured as required by
CitiCapital and that he requested that Gillion use cashier’s
checks to submit payments to CitiCapital and DalCanton to
cover up the scheme. DalCanton testified to a letter he wrote
to a former CitiCapital customer, asking them to "remit all
payments" to Capital City, and the government produced an
e-mail written by Gillion in which he informed a former Citi-
Capital customer that Capital City was CitiCapital’s "sister"
company.
On June 15, 2011, the jury found Gillion guilty of four
counts of substantive 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. § 371.11
Before submitting the case to the jury, the district court dismissed three
of the substantive mail fraud counts (Counts 3, 4, and 6) because the court
could not conclude, as a matter of law, that the checks that formed the
basis for those counts had been delivered by mail. J.A. 640-41. The
remaining four counts correspond to the four checks Baker mailed within
the five-year limitations period, on April 27, 2006, May 25, 2006, June 29,
2006, and July 21, 2006. These four checks also serve as the overt acts
underlying Count One, conspiracy to commit mail fraud.
8 UNITED STATES v. GILLION
Gillion filed a motion for judgment of acquittal pursuant to
Federal Rule of Criminal Procedure 29(c), challenging the
sufficiency of the evidence underlying his convictions. The
district court denied the motion, explaining that "sufficient
evidence was presented to the jury to support its guilty ver-
dict." J.A. 1184. It subsequently sentenced Gillion to 33
months’ imprisonment, three years of probation, and restitu-
tion to XTra of $20,958.06. J.A. 1185-88. This appeal fol-
lowed.
II.
The issues before us on appeal are whether the district court
erred in admitting the statements Gillion made during his
proffer session and whether sufficient evidence supported Gil-
lion’s mail fraud convictions. We consider each issue in turn.
A.
We first consider Appellant’s contention that the district
court erred in admitting the statements he made pursuant to
his pre-indictment proffer Agreement. Although "we review
evidentiary rulings for an abuse of discretion and will only
overturn an evidentiary ruling that is arbitrary and irrational,"
United States v. Cloud, 680 F.3d 396, 401 (4th Cir. 2012)
(internal quotation and citation omitted), Gillion’s challenge
to the district court’s holding—that proffer agreements remain
in effect post-indictment—is a question of law which we
review de novo, United States v. Lopez, 219 F.3d 343, 346
(4th Cir. 2000).
Gillion argues that the government should not have been
able to ask him to sit for a polygraph examination pursuant to
the terms of the Agreement because the Agreement termi-
nated upon his indictment. The government replies that prof-
fer agreements are binding contracts construed by their terms,
and that Gillion’s Agreement allowed the government to
request a polygraph at any time. The district court concluded
UNITED STATES v. GILLION 9
that the Agreement was enforceable as a binding contract,
allowing the government to request that Gillion submit to a
polygraph examination or be found in breach. After Gillion
failed the polygraph examination by walking out of the inter-
view, the district court found that he had breached the Agree-
ment and allowed McClure to testify to the statements
obtained during the proffer interview.
1.
A proffer agreement "defines the obligations of the parties
and is intended to protect the defendant against the use of his
or her statements, particularly in those situations in which the
defendant has revealed incriminating information and the
proffer session does not mature into a plea agreement." Lopez,
219 F.3d at 345 n.1. We interpret a proffer agreement based
on the language it contains. Id. at 346-47. In sum, a proffer
agreement operates like a contract; accordingly, we examine
its express terms to determine whether the defendant is in
breach. See United States v. Liranzo, 944 F.2d 73, 77 (2d Cir.
1991) (holding that proffer agreements are interpreted like
contracts); United States v. Chiu, 109 F.3d 624, 625 (9th Cir.
1997) (same).
Gillion’s argument here is unavailing. Nothing in the
Agreement before us suggests a temporal limitation. Rather,
it requires Gillion to be "fully truthful and forthright at any
stage." J.A. 106. While Gillion is correct that basic principles
of contract interpretation "counsel[ ] that we construe any
ambiguities against [the] draftsman," Maersk Line, Ltd. v.
United States, 513 F.3d 418, 423 (4th Cir. 2008), there is no
such ambiguity here. As the government points out, the
Agreement "contemplates the possibility of a breach and trial"
in its provisions regarding the consequences of breach, mak-
ing clear that it does not lapse post-indictment. Appellee’s Br.
at 38. Therefore, the district court correctly applied our prece-
dent in "reject[ing] the defendant’s argument that either the
terms of the contract, or constitutional law or criminal law,
10 UNITED STATES v. GILLION
generally requires that the polygraph must be taken pre-
indictment." J.A. 173.
2.
Even if the district court erred in requiring Gillion to adhere
to the Agreement, admission of the proffered statements was
harmless.2 "In order to find a district court’s error harmless,
we need only be able to say with fair assurance, after ponder-
ing all that happened without stripping the erroneous action
from the whole, that the judgment was not substantially
swayed by the error." Cloud, 680 F.3d at 401 (internal quota-
tion and citation omitted); Fed. R. Crim. P. 52(a).
Gillion "submits that the admission of a ‘confession’ can
hardly ever be ‘harmless.’" Appellant’s Reply Br. at 8. While
a confession is "‘the most probative and damaging evidence
that can be admitted against [a defendant],’" United States v.
Johnson, 400 F.3d 187, 197 (4th Cir. 2005) (quoting Arizona
v. Fulminante, 499 U.S. 279, 296 (1991)), we have found
admission of a confession harmless when "‘the jury would
have returned a verdict of guilty’ absent the confession," id.(quoting United States v. Jones, 913 F.2d 174, 177 (4th Cir.
1990)). In Johnson, we found admission of the defendant’s
confession harmless when the government "introduced an
abundance of other evidence" and proved parts of the defen-
dant’s involvement "without any use of his statements." Id. at
197-98. Additionally, "[t]he settled law of this circuit recog-
nizes that the testimony of a defendant’s accomplices, stand-
ing alone and uncorroborated, can provide an adequate basis
for conviction." United States v. Burns, 990 F.2d 1426, 1439
(4th Cir. 1993).
The statements admitted at trial from Gillion’s proffer ses-
sion involve facts proven by the government in other ways. In
2
As counsel acknowledged at oral argument, the issue is subject to
harmless error analysis.
UNITED STATES v. GILLION 11
particular, DalCanton testified as to all the information
McClure provided (and in greater detail), including, for exam-
ple, the methods he and Gillion used to defraud CitiCapital
while employed there. Nor was DalCanton’s testimony "un-
corroborated"; rather, the government presented accompany-
ing exhibits, such as the Baker lease, the CitiCapital bill of
sale, and the Capital City cashier’s check for the Baker trailer
purchase, to corroborate DalCanton’s descriptions of the
fraud. Testimony from other witnesses also corroborated Dal-
Canton’s statements. For example, William Baker testified to
the timing of the Baker contract, the fact that Gillion offered
Baker "the 48-foot trailers that [he] liked to purchase" on "ba-
sically the same purchase plan" as his CitiCapital contract,
and that Gillion would mail him invoices for the contract,
which Baker would pay by mailing monthly checks to Capital
City.
Further, Gillion’s defense did not deny his involvement in
the Capital City scheme; Gillion’s attorney stated that he and
the government "basically all agree on the facts" even before
the district court issued its final ruling as to whether McClure
would testify to the proffered statements because Gillion had
breached the proffer. J.A. 221. Instead, Gillion’s argument
was primarily legal—that the government could not prove
CitiCapital had a property interest in the profits Gillion
obtained and that Gillion did not obtain the profits with mate-
rial false representations. Id. at 216-20. Indeed, before the
court’s final ruling holding that the proffered statements
would come in at trial, Gillion’s attorney offered to "consent
to a bench trial" and would have "consent[ed] to stipulated
facts" because "the facts are the facts."3 Id. at 221. Consider-
ing the testimony from DalCanton, Baker, and others, as well
3
Gillion even benefited from the admission of the proffered statements,
since he received credit for acceptance of responsibility under U.S.S.G.
§ 3E1.1 at sentencing, in part because the court found "the defendant
essentially didn’t challenge any of the factual matters" and went to trial to
preserve a legal claim. S.J.A. 10.
12 UNITED STATES v. GILLION
as numerous documents evidencing the fraud, we find that
even if the court below erred in admitting Gillion’s proffered
statements, their admission was harmless.
B.
We next consider Appellant’s argument that the district
court erred in denying his Rule 29 motion for judgment of
acquittal because the government failed to provide sufficient
evidence of mail fraud. We review a district court’s denial of
a Rule 29 motion de novo. United States v. Reid, 523 F.3d
310, 317 (4th Cir. 2008). "We will uphold the verdict if, view-
ing the evidence in the light most favorable to the govern-
ment, it is supported by substantial evidence." Id."[S]ubstantial evidence is evidence that a reasonable finder of
fact could accept as adequate and sufficient to support a con-
clusion of a defendant’s guilt beyond a reasonable doubt."
United States v. Palacios, 677 F.3d 234, 248 (4th Cir. 2012)
(internal quotation and citation omitted).
We turn first to the requirements for a mail fraud convic-
tion. The mail fraud statute criminalizes "devis[ing] or attem-
pt[ing] to devise any scheme or artifice to defraud, or for
obtaining money or property by means of false or fraudulent
pretenses, representations, or promises." 18 U.S.C. § 1341. To
establish mail fraud, "the Government must prove that the
defendant (1) knowingly participated in a scheme to defraud
and (2) mailed, or caused to be mailed, anything ‘for the pur-
pose of executing such scheme.’" United States v. Pierce, 409
F.3d 228, 232 (4th Cir. 2005) (quoting 18 U.S.C. § 1341).
Gillion raises multiple challenges to the sufficiency of the evi-
dence presented to prove mail fraud, and we address each in
turn.
1.
Gillion first contends that his mail fraud convictions should
be vacated because the government failed to establish that his
UNITED STATES v. GILLION 13
employer, CitiCapital, had a "property interest in the subse-
quent profits from the renting of [the Baker] trailers." Appel-
lant’s Br. at 30. Although Gillion admits that he "purchased
eight trailers from CitiCapital without disclosing his involve-
ment in the purchase," id. at 29, and completed the purchase
only after signing the Baker lease, id. at 17-18, he contends
his nondisclosure and the timing of the Baker deal are of no
consequence, since he ultimately took title to the trailers dur-
ing the lease period. The government responds that CitiCapi-
tal was entitled to the Baker lease proceeds since Gillion
negotiated a deal with CitiCapital property and fraudulently
concealed his identity in order to purchase that property after
the Baker contract had been signed. Therefore, "each payment
. . . tied back to the lease, and the fraud creating the lease
infected each payment with the same wrong." Appellee’s Br.
at 15. The district court found that the government presented
sufficient evidence, including testimony from DalCanton, to
support the jury’s guilty verdict.
When determining whether the defendant has devised a
scheme to obtain money or property by means of false or
fraudulent pretenses, "[i]t is essential to a conviction under
[the mail fraud statute] that the victim of the alleged fraud
actually have an interest in the money or property obtained by
the defendant." United States v. Gray, 405 F.3d 227, 234 (4th
Cir. 2005). "The Supreme Court has made it clear that the fed-
eral fraud statutes should be ‘interpreted broadly insofar as
property rights are concerned,’" id. (quoting McNally v.
United States, 483 U.S. 350, 356 (1987)). We have held "that
property is anything in which a person has a ‘right that could
be assigned, traded, bought, or otherwise disposed of.’" Id.(quoting United States v. Mancuso, 42 F.3d 836, 845 (4th Cir.
1994)). Thus, "the ‘property’ of which a victim is deprived
need not be tangible property." United States v. Adler, 186
F.3d 574, 576 (4th Cir. 1999). "[R]ather he need only be
deprived of some right over that property such as the right to
exclusive use," id., or "the intangible right to control the dis-
position of [his] assets," Gray, 405 F.3d at 234.
14 UNITED STATES v. GILLION
We reject the contention that CitiCapital had no property
interest in the lease-to-own payments that Gillion received for
the Baker trailer lease. First, we recognize that the trailers
themselves and the assignable lease-to-own contract consti-
tute property within our definition of the term. Id. The ques-
tion remains whether CitiCapital had an interest in that
property. We conclude that it did.
Gillion devised a scheme to defraud CitiCapital in which he
created a company with a very similar name to that of his
employer. He then offered Baker "the 48-foot trailers that
[Baker] liked to purchase" on "basically the same purchase
plan," J.A. 487, as Baker’s CitiCapital contract, thus entering
a lease-to-own contract with a former (and potential future)
CitiCapital client. Baker testified that until that point, he had
no plans to take his business elsewhere. Notably, Gillion
offered Baker eight specific trailers he did not yet own; on
October 28, 2003, CitiCapital owned each trailer Gillion
leased. Then, Gillion concealed his identity by forging a sig-
nature on CitiCapital’s used trailer bill of sale so that he could
purchase the eight specific trailers he had contracted to sell to
Baker. Gillion’s inside connection with DalCanton not only
allowed him to purchase the eight trailers undetected, but also
allowed him to obtain them for below book value (he paid
$16,000 for trailers then worth $17,241.59). Over the length
of the three-year lease-to-own period, Gillion received over
$27,000 in profits from the Baker contract alone.
Concealing his identity to trick CitiCapital into selling the
eight trailers itself constituted an interference in CitiCapital’s
right to dispose of its property. See Gray, 405 F.3d at 234(holding that depriving a company of its "intangible right to
control the disposition of its assets" constitutes mail fraud). In
addition, CitiCapital held a property interest in the Baker pay-
ments, since they derived from the lease-to-own contract Gil-
lion made using CitiCapital trailers, which Gillion
fraudulently purchased after the fact. As DalCanton testified,
the Baker deal was a profitable one that CitiCapital "would
UNITED STATES v. GILLION 15
have loved." J.A. 281. Instead of securing that deal for his
employer, Gillion negotiated with his employer’s property to
contract for a three-year stream of profits. The fact that Gil-
lion fraudulently transferred the trailers to Capital City during
the lease period such that Baker ultimately took title to the
trailers from Capital City rather than CitiCapital does not
negate CitiCapital’s property interest in the revenue stream
attached to the trailer contract that Gillion negotiated with
CitiCapital property. Therefore, we find that the government
presented sufficient evidence for the jury to find that Citi-
Capital had a property interest in the Baker lease-to-own pay-
ments.
2.
Second, Gillion contends that the government presented
insufficient evidence to prove that the Baker payments were
obtained by means of material false or fraudulent pretenses,
as required by 18 U.S.C. § 1341. Gillion’s primary argument
seems to be that the superseding indictment does not specifi-
cally allege the material false representations or concealments
Gillion used to defraud CitiCapital of its interest in the Baker
lease-to-own contract proceeds. We disagree.
To establish the existence of a scheme to defraud, the gov-
ernment must show that the defendant failed to disclose mate-
rial information or made material misrepresentations. See
Neder v. United States, 527 U.S. 1, 25 (1999) (holding that
"materiality of falsehood is an element of the federal mail
fraud . . . statute[ ]"). "‘Even in the absence of a fiduciary,
statutory, or other independent legal duty to disclose material
information, . . . acts taken to conceal, create a false impres-
sion, mislead, or otherwise deceive in order to prevent the
other party from acquiring material information,’" can com-
prise material misrepresentation or concealment of fact. Gray,
405 F.3d at 235 (quoting United States v. Colton, 231 F.3d
890, 898 (4th Cir. 2000)). Under this standard, "fraudulent
concealment—without any misrepresentation or duty to
16 UNITED STATES v. GILLION
disclose—can constitute . . . fraud." Id. at 899. A misrepresen-
tation is material if "‘a reasonable man would attach impor-
tance to its existence or nonexistence in determining his
choice of action in the transaction in question.’" Neder, 527
U.S. at 22 n.5 (quoting Restatement (Second) of Torts § 538
(1977)).
We find that the government provided sufficient evidence
such that a jury could find that Gillion obtained the Baker
profits by material false or fraudulent pretenses. First, the
superseding indictment alleged that Gillion and DalCanton
"used Capital City to divert to themselves money and
resources from CitiCapital." J.A. 74. The indictment also
alleged that "Capital City sold some of CitiCapital’s trailers
to entities controlled by [Gillion] and to third parties," and
that Gillion received revenue "through revenue streams estab-
lished using equipment formerly owned by CitiCapital and
acquired by [Gillion]." J.A. 75. The government submitted
ample evidence to the jury that Gillion used material false
pretenses and concealment to execute the Baker contract,
including multiple "acts taken to conceal . . . mislead, or oth-
erwise deceive in order to prevent [CitiCapital] from acquir-
ing material information." Colton, 231 F.3d at 898. The
information regarding Gillion’s identity as operator of a simi-
larly-named competitor company engaged in purchasing trail-
ers from CitiCapital for use with former CitiCapital clients
was certainly material in that, had CitiCapital known of Gil-
lion’s involvement with Capital City, it would have "termi-
nated" him at once, as DalCanton testified. Gillion and
DalCanton concealed their alliance and used cashier’s checks
to maintain secrecy; this included the check used to pay for
the Baker trailers. In a further attempt to conceal and misrep-
resent his identity, Gillion forged his brother-in-law’s signa-
ture on the Baker trailer bill of sale.
Furthermore, the indictment alleged multiple misrepresen-
tations in which Gillion engaged as part of his larger scheme
to defraud CitiCapital of profits. The government proved each
UNITED STATES v. GILLION 17
of these misrepresentations at trial, including establishing that
Gillion submitted a falsified credit request to DalCanton on
behalf of Capital City, provided false assurances to customers
that CitiCapital and Capital City were "sister organizations,"
and created false paper trails by using cashier’s checks to pay
CitiCapital and DalCanton.
Additionally, the district court properly instructed the jury
on the government’s burden in proving a scheme to defraud:
Fraud includes acts taken to conceal, create a false
impression, mislead or otherwise deceive in order to
prevent another person from acquiring material
information. Thus, a scheme to defraud can be
shown by deceptive acts or contrivances intended to
hide information, mislead, avoid suspicion, or avert
further inquiry into a material matter.
The government can prove a scheme to defraud by
evidence of active concealment of material informa-
tion. A statement is material if it has a natural ten-
dency to influence or is capable of influencing the
decision-making body to which was addressed. The
government must prove that the defendant acted with
the specific intent to defraud.
J.A. 741. "We generally presume that jurors follow their
instructions," Penry v. Johnson, 532 U.S. 782, 799 (2001),
and see no reason to veer from that presumption here. There-
fore, we find that the government submitted sufficient evi-
dence to the jury such that it could find that Gillion obtained
the Baker payments "by means of material false or fraudulent
pretenses."
3.
Third, and finally, Gillion challenges his mail fraud convic-
tions by contending that the mailings "were not for the pur-
18 UNITED STATES v. GILLION
pose of executing or attempting to execute the scheme to
defraud." Appellant’s Br. at 37. The government responds that
the mailed checks represented the consummation of Gillion’s
fraud, as they allowed him to reap the profits of the fraudulent
Baker deal.
A mailing "for the purpose of executing" the scheme to
defraud need not be at the scheme’s heart. Indeed, "it is not
necessary that the scheme contemplate the use of the mail as
an essential element." Pereira v. United States, 347 U.S. 1, 8
(1954). "[I]t is enough that the mailing be ‘incident to an
essential part of the scheme, or a step in the plot.’" Pierce,
409 F.3d at 232 (quoting Schmuck v. United States, 489 U.S.
705, 711 (1989)). "Where one does an act with knowledge
that the use of the mails will follow in the ordinary course of
business, or where such use can reasonably be foreseen, even
though not actually intended, then he ‘causes’ the mails to be
used" even if the use is "incident to an essential part of the
scheme." Pereira, 347 U.S. at 8-9; see also United States v.
Snowden, 770 F.2d 393, 397 (4th Cir. 1985). In particular,
"[m]ailings that occur subsequent to the commission of fraud-
ulent acts by the defendants but which relate to the acceptance
of the proceeds of the scheme have been upheld as the predi-
cate for mail fraud convictions." United States v. Blecker, 657
F.2d 629, 636 (4th Cir. 1981).
We find that the government presented sufficient evidence
for a jury to find the mailings from Baker to Capital City were
for the purpose of executing the scheme to defraud. Gillion’s
scheme contemplated that once he had obtained the trailers
necessary to fulfill the Baker lease-to-own contract from his
employer, he would receive monthly payments from Baker
during the three-year lease period. The lease itself made clear
that Gillion would invoice Baker and provided an address for
Capital City, making use of the mails foreseeable. The mailed
lease payments "relate to the acceptance of the proceeds of
the scheme," id., resulting in over $27,000 in profits for Gil-
lion over the lease period. Therefore, we agree with the dis-
UNITED STATES v. GILLION 19
trict court that the government presented sufficient evidence
for the jury to find that Gillion caused the mails to be used to
execute his fraudulent scheme.4
III.
For the foregoing reasons, the judgment of the district court
is
AFFIRMED.
4
Insofar as Appellant challenges the sufficiency of the evidence of his
conviction for conspiracy to commit mail fraud in violation of 18 U.S.C.
§ 371, we reject his challenge for the reasons stated above in Part II.B.1-
3. The elements of a conspiracy to commit mail fraud are (1) the existence
of an agreement to commit mail fraud, (2) willing participation by the
defendant, and (3) an overt act by one of the defendants in furtherance of
the agreement. United States v. Edwards, 188 F.3d 230, 234 (4th Cir.
1999). The government presented ample evidence that there was an agree-
ment to defraud CitiCapital between DalCanton and Gillion that contem-
plated the use of the mails, that Gillion willingly participated and often
orchestrated the schemes, and that Gillion received checks in furtherance
of the agreement within the statute of limitations.