United States v. Jerrod Gardenhire ( 2012 )

Case: 11-50123 Document: 00511909649 Page: 1 Date Filed: 07/03/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 3, 2012
No. 11-50123 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
JERROD GARDENHIRE; GARY GARDENHIRE,
Defendants-Appellants
Appeals from the United States District Court
for the Western District of Texas
USDC No. 7:10-CR-1722
Before SMITH, GARZA, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
A jury convicted Gary Gardenhire and Jerrod Gardenhire of six counts of
mail fraud and one count of conspiracy to commit mail fraud. On appeal, they
assert that the district court’s jury instruction constructively amended the
indictment in violation of the Grand Jury Clause and Due Process Clause of the
Fifth Amendment. We AFFIRM.
*
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
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No. 11-50123
I
Gary Gardenhire, Jerrod Gardenhire, Cody Eckel, and Fred Foster were
indicted on six counts of mail fraud, 18 U.S.C. § 1341, and one count of
conspiracy to commit mail fraud, 18 U.S.C. § 1349. Eckel and Foster entered
guilty pleas, and the Gardenhires proceeded to trial. The facts surrounding the
mail fraud scheme, viewed in the light most favorable to the verdict, were as
follows. See United States v. Rains, 615 F.3d 589, 592 (5th Cir. 2010).
Gary Gardenhire and Larry Wayne Webb became friends while working
for Austin Distributing, a hydraulic hose business. Webb and Gary subsequently
started a new hydraulic hose business together called The Hose Connection
(THC). Webb owned 60% of THC and Gary owned 40%. In addition to being a
co-owner, Gary was a salaried employee, responsible for managing THC’s day-to-
day operations. Gary and Webb also hired Gary’s brother Jerrod as a salesman.
After customers purchased equipment from THC, the Gardenhires,
without Webb’s knowledge, sent invoices for the equipment from a separate
company, owned by the Gardenhires, called Louder Than Hell Speakers (LTH).
Then, with the encouragement of Eckel and Foster, who received commissions
for their aid in the fraud, THC’s customers sent payments to LTH. Through this
scheme, the Gardenhires pilfered at least $1.75 million worth of payments from
THC.
At the close of trial, pursuant to Gary’s request, the district court
instructed the jury using Fifth Circuit Pattern Jury Instruction 2.59. The
instruction stated in part that a “‘scheme to defraud’ includes any scheme to
deprive another of money, property, or of the intangible right to honest services
by means of false or fraudulent pretenses, representations, or promises.” None
of the parties objected to the instruction, and the jury found the Gardenhires
guilty on all counts alleged in the indictment. The district court sentenced
Jerrod to 46 months imprisonment and three years of supervised release; it
2
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sentenced Gary to 57 months’ imprisonment and three years of supervised
release. Jerrod and Gary filed a timely notice of appeal.
II
On appeal, the Gardenhires contend that the district court erred by
including the “intangible right to honest services” language in the jury
instruction. The Gardenhires assert that by doing so the district court
constructively amended the indictment, which did not include a charge
regarding the right to honest services, in violation of the Grand Jury Clause and
Due Process Clause of the Fifth Amendment.1
A defendant who has been indicted by a grand jury has a Fifth
Amendment right to be tried solely on the allegations made by that grand jury.
Stirone v. United States, 361 U.S. 212, 215-18 (1960). “The indictment cannot
be ‘broadened or altered’ except by the grand jury.” United States v. Arlen, 947
F.2d 139, 144 (5th Cir. 1991) (quoting United States v. Chandler, 858 F.2d 254,
256 (5th Cir. 1988)). A constructive amendment of the indictment “occurs when
the trial court ‘through its instructions and facts it permits in evidence, allows
proof of an essential element of a crime on an alternative basis permitted by the
statute but not charged in the indictment.’” Id. (quoting United States v.
Slovacek, 867 F.2d 842, 847 (5th Cir. 1989)).
Because neither of the Gardenhires objected to the instruction, our review
is for plain error.2 In order to show plain error, an appellant must show a
1
The Gardenhires assert that the instruction allowed the jury to convict under 18
U.S.C. § 1346 for “honest services fraud,” an offense not alleged in the indictment. See § 1346
(“For the purposes of this chapter, the term ‘scheme or artifice to defraud’ includes a scheme
or artifice to deprive another of the intangible right of honest services.”).
2
The Government contends that Gary Gardenhire invited the district court’s error by
requesting the jury instruction in question and that the error is therefore either unreviewable
or reviewable only for manifest injustice. See United States v. Puig-Infante, 19 F.3d 929, 941
(5th Cir. 1994). Because we conclude that the Gardenhires have not shown plain error, we
need not address whether the error was invited.
3
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forfeited error that is clear or obvious and that affects his substantial rights,
“which in the ordinary case means he must demonstrate that it ‘affected the
outcome of the district court proceedings.’” Puckett v. United States, 556 U.S.
129, 135 (2009) (quoting United States v. Olano, 507 U.S. 725, 734 (1993)). Even
if the Gardenhires make such a showing, this court will only correct the error if
it seriously affects the fairness, integrity, or public reputation of the judicial
proceedings. Id.The Gardenhires contend primarily that the district court committed plain
error under United States v. Griffin, 324 F.3d 330 (5th Cir. 2003). In Griffin, the
defendants were indicted for conspiracy, bribery, money laundering, and mail
fraud arising from a real estate scheme involving tax credits for low income
housing. Id. at 337. The indictment alleged that Griffin and her co-conspirators
committed mail fraud by mailing a pre-application notification for tax credits for
a housing project in order to defraud various governmental entities “and to
obtain money and property by false pretenses.” Id. at 352. However, the court
charged the jury that a “‘scheme to defraud’ included any scheme to deprive
another of money, property, or of the intangible right to honest services by
means of false or fraudulent pretenses, representations, or promises.” Id. at 353.
On plain error review, this court held that (1) the unissued tax credits were not
“property” within the meaning of the mail fraud statute until they were issued,
and (2) the court’s charge constructively amended the indictment to include a
basis for the fraud that was not charged in the indictment by including the
intangible right to honest services language. Id. at 353-56. Finding plain error,
this court reversed the defendants’ mail fraud convictions. Id. at 356.
The Gardenhires’ reliance on Griffin is misplaced. Because the court in
Griffin concluded that the unissued tax credits were not property under the mail
fraud statute, the defendants could not have been convicted without the “honest
services” language, which did not appear in the indictment. In this case,
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however, both the “money and property” basis and the “honest services” basis for
conviction were not only available to the jury, they were inextricably
intertwined. Based on the evidence in this case, the jury could not have
convicted the Gardenhires of depriving Webb of honest services without also
finding that they had deprived Webb of money and property. See United States
v. Jackson, 220 F. App’x 317, 329 (5th Cir. 2007).3 Because the jury could not
have concluded that the Gardenhires deprived Webb of honest services without
also finding that they deprived him of money and property, we conclude that the
district court’s error did not affect the Gardenhires’ substantial rights.
III
For the foregoing reasons, we conclude that the Gardenhires have not
shown that the outcome of the trial would have been different if the district court
had not included the “honest services” language. See Puckett, 556 U.S. at 135.
There was no plain error. We AFFIRM.
3
The Gardenhires also contend that they were prejudiced by the Government’s
reference in closing argument to Gardenhire’s and Webb’s friendship. This contention fails
for the same reason that Griffin is inapposite. There was no basis in evidence for finding that
Gary Gardenhire betrayed Webb’s friendship without also finding that he deprived Webb of
money and property.
5