United States v. Wood ( 2001 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 99-31261
_____________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
MARION DOUGLAS WOOD,
Defendant-Appellant.
_________________________________________________________________
Appeal from the United States District Court for the
Eastern District of Louisiana, New Orleans
USDC No. 94-CR-377-3-B
_________________________________________________________________
February 7, 2001
Before JOLLY and DAVIS, Circuit Judges, and RESTANI, Judge.*
PER CURIAM:**
Marion Douglas Wood was convicted of conspiracy to commit mail
fraud, wire fraud, and money laundering in his role as President of
Midwest Life and Public Investors Life from April 1990 to February
1991. On appeal, Wood challenges his conviction, claiming: (1)
that the indictment was duplicitous, because it charged more than
one conspiracy, and that it prejudiced him because the evidence, at
*
Judge, U.S. Court of International Trade, sitting by
designation.
**
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
most, only connected him with one conspiracy; (2) that the delay
between the indictment and the trial violated his Sixth Amendment
right to a speedy trial; (3) that the district court erred in
refusing to strike some of the language in the indictment as
prejudicial surplusage; (4) that the district court erred in
failing to instruct on materiality; (5) that the district court’s
instruction pursuant to Allen v. United States, 164 U.S. 492(1896), modified to meet the current situation, coerced the jury
into reaching a verdict; and (6) that the district court erred in
applying the sentencing guidelines and in refusing to depart
downward. Because we find no reversible error, we affirm Wood’s
conviction.
I
In December 1989, Southshore Holding Corporation, owned by Bob
Shamburger and Gary Jackson, purchased Riverside Holding Company,
which owned The Midwest Life Insurance Company (“Midwest”),
Fidelity Fire and Casualty Insurance Company (“Fidelity Fire”),
Public Investors Life Insurance Company (“PILICO”), and a number of
other companies. Shortly thereafter, Jackson and Shamburger hired
Wood, a practicing attorney and state legislator in Arkansas, to be
president of Midwest and PILICO.
Wood was responsible for filing financial statements for the
companies, and for encouraging investor capital. During Wood’s
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tenure as president of Midwest and PILICO, however, over $40
million in assets were transferred to Jackson and Shamburger,
hardly a capital investment. Although Wood contends that he did
not examine them, Wood signed a variety of documents, including
some that inaccurately reported the value of assets, and others
that were backdated to fall into earlier financial quarters.
Notwithstanding this good service for those in charge, Wood was
discharged by Shamburger in February of 1991.
In December of 1994, Wood was charged along with six other
defendants with conspiracy to commit mail fraud, wire fraud, and
money laundering, as well as substantive violations of mail fraud
in violation of 18 U.S.C. §§ 1341, 1343. The government had the
indictment sealed; it was not unsealed until January 1996.
Other facts relate to the speedy trial claim: on February 27,
1996, the court granted the motion of Wood’s co-defendant, James L.
Adams, to continue the trial date due to the complexity of the
case. On March 4, 1996, the court reset the trial for January
1997. At this point, Wood requested that the court not delay the
trial, and, two weeks later, filed an objection to the continuance.
On April 2, 1997, Wood moved to dismiss the indictment alleging
that the court had violated the Speedy Trial Act by improperly
entering its continuance order. The district court denied this
motion on December 27, 1996. In 1997 and 1998, Wood’s
3
co-defendant, Jackson, filed five separate continuances for medical
reasons. Wood objected to some of these continuances, and
requested severance from the other defendants, which the court
denied.
The case was first tried beginning on January 13, 1999. The
jury was unable to break a deadlock, and a mistrial was declared as
to Wood on March 5, 1999. Wood was tried again, by himself, on
August 2, 1999. The jury deliberated for one and a half days
before informing the court that it was deadlocked. After an Allen
charge, the jury returned verdicts of guilty on all counts.
Wood filed objections to the pre-sentencing report, which were
overruled, and a motion for downward departure from the guidelines,
which was denied. Wood was sentenced to fourteen years and five
years, to run concurrently, and $1.4 million in restitution.
II
Wood first argues that the district court erred in denying the
defendant’s motion to dismiss the conspiracy charge as duplicitous.
Wood contends that although the indictment supposedly charged only
one conspiracy, the government, in fact, charged at least two
conspiracies. He argues that he was prejudiced by the introduction
of evidence related to a conspiracy in which he had no involvement.
Wood also claims that, to the extent that the government claims
only one conspiracy, there is no evidence that he was a part of the
4
conspiracy and thus the case against him should have been
dismissed.
We review a claim that an indictment is duplicitous de novo.
United States v. Sharpe, 193 F.3d 852, 866 (5th Cir. 1999). The
indictment should be assessed to determine whether each count can
be read to charge only one violation. Id. As long as there is an
agreement among the defendants on an overall objective, the
indictment can be read to charge one conspiracy. Id. Here, the
indictment charged that the objectives of the conspiracy were to
defraud Midwest and Fidelity Fire, and to conceal this fraud
through the distribution of false financial information.1 This
count can be read to charge only one conspiracy. See United States
v. Mann, 161 F.3d 840, 858 (5th Cir. 1999) (recognizing that acts
of concealment are sometimes a necessary part of the overall
conspiracy). Furthermore, the district court did not err in
failing to dismiss the conspiracy charge against Wood for variance
1
We agree that the government’s draftsmanship asks for
trouble. Specifically, the indictment charged that:
[t]he main objective of the conspiracy was to defraud
Midwest Life and Fidelity Fire of money and other assets,
distribute false financial information about Midwest Life
to conceal the fraudulent activities, to lure new
investors and policyholders, and to deceive current
investors and policyholders while distributing false
financial information about Public Investors Life to
conceal its poor financial condition.
Nevertheless, this charge breaks down into an overall objective of
two main components: (1) to defraud Midwest and Fidelity Fire, and
(2) to conceal these fraudulent activities.
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between the conspiracy and the proof offered at trial. The
government introduced evidence regarding several of Wood’s
transactions and misrepresentations that reasonably could support
the jury’s determination that Wood knew of and adopted the
objective of defrauding Midwest and Fidelity Fire and concealing
that fraud. For instance, the government introduced evidence that
Wood, as president of Midwest, signed a backdated purchase and sale
agreement selling the Parkway Plaza building to three shell
corporations, even though, at the actual date of the agreement, he
was hiring real estate agents to attempt to sell the building. The
government also introduced evidence that Wood helped to create a
bogus $5,000,000 promissory note, turning the loss on Midwest’s
financial statements into a gain, by signing a letter canceling an
already executed agreement for a $6,000,000 loan, and substituting
a backdated document claiming $11,000,000 in indebtedness for
virtually the same collateral. Although Wood claims he only signed
the documents, and was not aware of the contents of the documents,
this evidence, and evidence of other transactions, could reasonably
support the jury’s determination that Wood was involved in the
conspiracy.
III
Wood next challenges the district court’s failure to dismiss
the indictment for lack of a Speedy Trial, as guaranteed by the
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Sixth Amendment.2 Wood was indicted in December of 1994, the
indictment was unsealed in January of 1996, and his first trial
took place in January of 1999. Thus, approximately four years
elapsed between the date of his trial and the date of his initial
sealed indictment, and approximately three years elapsed between
the date of his trial and the date of the unsealing of the
indictment.3
The Supreme Court has provided a four-part balancing test to
determine whether a defendant received a speedy trial under the
Sixth Amendment. In evaluating Wood’s claim, we must consider: (1)
the length of the delay, (2) whether the defendant asserted his
right to a speedy trial, (3) the reason for the delay, and (4)
prejudice to the defendant. Barker v. Wingo, 407 U.S. 514, 530
(1972). We view the length of delay as a threshold inquiry. A
delay of one year is presumptively prejudicial, and, therefore, is
sufficient to trigger speedy trial analysis. United States v.
2
On appeal, Wood does not challenge the delay under the Speedy
Trial Act, nor does he challenge the district court’s ruling that
there was no due process violation in the pre-indictment delay of
forty-five months.
3
Because we find that Wood’s Sixth Amendment right to a speedy
trial was not violated either by the delay between the date of the
unsealing of the indictment and the date of trial or the date of
the initial indictment and the date of the trial, we do not
consider whether the Sixth Amendment right to a speedy trial
attaches when the defendant is initially indicted or when the
indictment is unsealed.
7
Lucien, 61 F.3d 366, 371 (5th Cir. 1995). Because Wood’s case was
delayed for three to four years, we turn to consider the other
three factors. Wood’s objections to the continuances centered
primarily on his requests for severance from the other defendants.
He did, however, assert his right to a speedy trial.
We must next take into account the reasons for the delay.
Trial was delayed, first, because the indictment was sealed while
the government searched for all of the defendants, and, second,
because Wood’s co-defendants moved for continuances for extra
preparation time and illness. As the Supreme Court has noted,
“pretrial delay is often both inevitable and wholly justifiable.”
Doggett v. United States, 505 U.S. 647, 656 (1992). Thus, “where
the state advances valid reasons for the delay, or the delay is
attributable to acts of the defendant, this factor is weighed in
favor of the state.” Cowart v. Hargett, 16 F.3d 642, 647 (5th Cir.
1994). Here, there is no indication that the government failed to
search for Wood’s co-defendants with diligence. Furthermore, the
government objected to the continuances requested by Wood’s co-
defendants. Because the delays were not the result of the
government’s negligence or bad faith, but instead are attributable
to Wood’s co-defendants, this factor weighs in favor of the state.
Finally, we examine the degree of prejudice resulting from the
delay. Because “the government was reasonably diligent in its
8
efforts to bring the defendant to trial, the defendant must show
‘specific prejudice to his defense.’” Robinson v. Whitley, 2 F.3d
562, 570 (5th Cir. 1993) (quoting Doggett, 505 U.S. at 654).
Potential harm resulting from a delay includes oppressive pretrial
incarceration, anxiety and concern of the accused, and the
possibility that the defendant’s defense will be impaired by
“dimming memories and loss of exculpatory evidence.” Doggett, 505
U.S. at 654. Here, there was no pretrial incarceration. Wood only
complained about anxiety in his first speedy trial motion. Thus,
Wood first argues that, because of the delay, he lost the important
testimony of Jerry Willis. Wood has failed to demonstrate,
however, that not having Willis’s testimony impaired his defense.
Wood has also not explained why neither he nor his attorney took
steps to interview Willis or preserve his testimony. See United
States v. Neal, 27 F.3d 1035, 1043 (5th Cir. 1994). Wood next
argues that the delay impaired his memory, which weakened his trial
testimony. Specifically, he contends that the prosecutor
confronted him with transactions and conversations that had
allegedly taken place nine years earlier, and then juxtaposed that
against his grand jury and civil deposition testimony. While
Wood’s confusion on the stand might be tangentially related to the
three- or four-year time lapse between indictment and trial, Wood
did not suffer memory lapses on direct examination. The possible
9
relationship between his confusion at the hands of the prosecutor
and the time delay does not support a finding of actual prejudice.
Thus, in balancing all of these factors, we must conclude that
Wood’s right to a speedy trial under the Sixth Amendment was not
violated.
IV
Wood also argues that the district court erred in not striking
allegations in the indictment that Wood caused a number of acts to
be done, such as causing individuals and entities to make campaign
contributions to a corrupt Louisiana insurance commissioner to
ensure less regulation and review of the insurance companies’
management. In his motion to strike, Wood objected to seventeen
uses of the word “cause” in the indictment, only one of which is
described in detail in his appellate brief. Wood claims that the
trial judge should have known that the allegations were prejudicial
surplusage because they were unsupported by any evidence at the
first trial.
We review a district court’s decision to deny a motion to
strike for abuse of discretion. United States v. Graves, 5 F.3d
1546, 1550 (5th Cir. 1993). To hold that this refusal to strike
should invalidate Wood’s conviction, we must find that the
“allegedly excessive language was irrelevant, inflammatory and
prejudicial.” United States v. Bullock, 451 F.2d 884, 888 (1971).
10
Because we find that Wood failed to meet this exacting standard,
the district court did not commit reversible error in denying the
motion to strike.
V
Because Wood did not object at trial to either the district
court’s failure to instruct the jury as to the materiality element
of mail fraud and wire fraud, or the district court’s Allen charge
to the jury to continue deliberating, this court reviews both of
those determinations for plain error. Because we find that neither
of these actions “seriously affect fairness, integrity or public
reputation of judicial proceeding and result in miscarriage of
justice,” there is no plain error. United States v. Waldrip, 981
F.2d 799, 805 (5th Cir. 1993).
VI
Finally, Wood objects to the district court’s application of
the sentencing guidelines and its failure to downwardly depart. We
review a district court's application of the sentencing guidelines
de novo and its findings of fact under a clearly erroneous
standard. United States v. Morrow, 177 F.3d 272, 300 (5th Cir.
1999). Wood argues that the district court should not have used
money laundering as a basis for his sentence, because he was not
even charged with money laundering. Under U.S. Sentencing
Guidelines Manual § 1B1.2(d), using money laundering as the basis
11
for sentencing on Wood’s conspiracy violation was appropriate as
long as “the court, were it sitting as trier of fact, could convict
the defendant of conspiring to commit that object offense.” U.S.
Sentencing Guidelines Manual § 1B1.2(d), cmt. n.4. In overruling
Wood’s objection to the use of money laundering for the basis of
Wood’s sentence, the district court specifically noted that Wood
signed off on the Grant Street transaction, in which Midwest
purchased mortgages from Master Holding, 98, Inc., a company owned
by Jackson and Shamburger. Midwest purchased the mortgages at
their face-value from Master Holding, despite the fact that Wood
had received correspondence that the mortgages were being offered
at a steeply discounted rate. Because we find that the district
court’s determination that Wood conspired to launder money through
the Grant Street transaction was not clearly erroneous, we uphold
Wood’s sentence.
Wood also appeals from the district court’s refusal to depart
downward from the sentencing guidelines, arguing that the
disparity between his sentence and the sentence of his
co-conspirator is unjustified. This court, however, can only
review a district court’s refusal to depart from the guidelines if
its decision was based on the erroneous belief that it did not have
the authority to depart. United States v. Davis, 226 F.3d 346, 359
(5th Cir. 2000). A review of the record convinces us that the
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district court was aware of its ability to depart downward but
chose not to depart. Thus, the district court’s decision not to
depart is unreviewable.
VII
The district court did not err in failing to find the
indictment duplicitous, in finding that there was no Sixth
Amendment speedy trial violation, in refusing to strike certain
terms from the indictment, and in not instructing the jury on
materiality. We also hold that the Allen charge given to the jury
was not plain error, and that the district court did not err in
applying the sentencing guidelines. Accordingly, the judgment of
the district court is
A F F I R M E D.
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