United States v. Dimitar Petlechkov , 922 F.3d 762 ( 2019 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 19a0082p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, ┐
Plaintiff-Appellee, │
│
> No. 18-5991
v. │
│
│
DIMITAR PETLECHKOV, │
Defendant-Appellant. │
┘
Appeal from the United States District Court
for the Western District of Tennessee at Memphis.
No. 2:17-cr-20344-1—Jon Phipps McCalla, District Judge.
Decided and Filed: May 1, 2019
Before: SUHRHEINRICH, THAPAR, and LARSEN, Circuit Judges.
_________________
COUNSEL
ON BRIEF: Michael J. Stengel, STENGEL LAW FIRM, Memphis, Tennessee, for Appellant.
David Pritchard, UNITED STATES ATTORNEY’S OFFICE, Memphis, Tennessee, for
Appellee.
_________________
OPINION
_________________
THAPAR, Circuit Judge. Proper venue in a criminal case is an “essential part[] of a free
and good government.” The Federal Farmer, in 2 The Complete Anti-Federalist 230 (Herbert J.
Storing ed. 1981). The government failed to meet its constitutional obligation to prove venue for
most of the charges it brought against Dimitar Petlechkov. Accordingly, we affirm in part,
reverse in part, and remand.
No. 18-5991 United States v. Petlechkov Page 2
I.
FedEx provides shipping discounts to high-volume customers. In order to obtain such a
discount, Dimitar Petlechkov lied to FedEx and claimed he was a vendor for a high-volume
shipper. He used those discounted rates to offer shipping services to third parties, pocketing the
profit margin between what he charged the third parties and what he paid FedEx. He shipped
nearly 30,000 packages this way until FedEx finally caught him.
The government charged Petlechkov with 20 counts of mail fraud. See 18 U.S.C. § 1341.
A jury convicted him on each count. The district court sentenced Petlechkov to 37 months in
prison and ordered him to pay approximately $800,000 in restitution. He now appeals his
convictions, sentence, and restitution award.
II.
Petlechkov challenges the sufficiency of the evidence underlying his mail fraud
convictions. On appeal, “the relevant question is whether, after viewing the evidence in the light
most favorable to the prosecution, any rational trier of fact could have found the essential
elements of the crime beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319
(1979).
To convict Petlechkov of mail fraud, the government had to prove that he devised a
scheme to defraud, used the mails in furtherance of that scheme, and intended to deprive the
victim of money or property. 18 U.S.C. § 1341; United States v. Warshak, 631 F.3d 266, 310
(6th Cir. 2010). A fraudulent scheme must include a material misrepresentation, which is a
misrepresentation that could influence the decision of a “person[] of ordinary prudence and
comprehension.” United States v. Jamieson, 427 F.3d 394, 415–16 (6th Cir. 2005). Materiality
is the only element Petlechkov disputes on appeal.
Petlechkov concedes that he made a misrepresentation but contends that it was not
material. His misrepresentation was simple: he called FedEx’s account manager for General
Dynamics—one of FedEx’s larger clients—and claimed he was a General Dynamics vendor
entitled to its discounted shipping rate. Soon afterwards, FedEx linked Petlechkov’s account to
No. 18-5991 United States v. Petlechkov Page 3
General Dynamics, and he was able to ship packages at its rate. All it took was a single phone
call. Petlechkov makes two arguments for why his phone call could not have influenced a
“person[] of ordinary prudence and comprehension.” Id. at 415–16. First, he claims vendors
were not actually entitled to discounts under General Dynamics’s contract with FedEx. And this
leads to his second argument: that federal law prohibits the unwritten discounts he received.
Thus, according to Petlechkov, the FedEx employees who signed off on his discount request
were not ordinary, prudent people—his bald assertion that he was a General Dynamics vendor
should not have convinced FedEx to give him a discount.
Petlechkov’s arguments fail. First, whatever discounts the General Dynamics agreement
required FedEx to provide, nothing in the record suggests that the agreement barred FedEx from
being more generous than required. And indeed, FedEx’s standard “operating procedure” was to
extend a customer’s discounts to its vendors. R. 75, Pg. ID 384–85, 397–98. Because FedEx
had such a policy, an ordinary, prudent employee would follow it. Thus, Petlechkov’s false
statement was capable of influencing FedEx’s decision. And indeed, it actually influenced
FedEx’s decision—FedEx gave him a discount that lasted for several years. The fact that
Petlechkov’s false statement caused its intended result is strong evidence that it was material.
See United States v. Bohn, 281 F. App’x 430, 440 (6th Cir. 2008); Jamieson, 427 F.3d at 416.
Petlechkov’s second argument fares no better. He claims that FedEx violated the
Sarbanes-Oxley Act by extending him a discount. See generally Sarbanes-Oxley Act of 2002,
Pub. L. No. 107-204, 116 Stat. 745. And he argues that a person of ordinary prudence would not
have granted him a discount that violated federal law. But Petlechkov neither cites Sarbanes-
Oxley nor offers any legal analysis of it, and it is not our job to construct a legal argument for
him. See McPherson v. Kelsey, 125 F.3d 989, 995–96 (6th Cir. 1997). Instead, Petlechkov
makes a purely factual argument. He relies entirely on the testimony of a FedEx employee,
Andrew Newborn. Thus, Petlechkov’s argument turns on interpretation of that testimony.
Newborn did testify that in some circumstances unwritten discounts violate Sarbanes-
Oxley. But he never said that unwritten discounts like Petlechkov’s—contained in a written
agreement but extended to someone not named in that agreement—violated Sarbanes-Oxley.
And more specifically, Newborn never said that Petlechkov’s specific vendor discount violated
No. 18-5991 United States v. Petlechkov Page 4
Sarbanes-Oxley. Despite Petlechkov’s arguments to the contrary, a rational juror could have
found his misrepresentation material.
III.
Next, Petlechkov argues that, even if he is in fact guilty, we should still dismiss the case
against him because the government failed to prove that venue was proper in the Western
District of Tennessee.
A.
The government argues we should not reach the merits of Petlechkov’s venue objection
because he “waived his challenge to venue by failing to raise it pre-trial.” Appellee Br. at 10. In
doing so, the government’s brief bounces back and forth between the concepts of waiver and
forfeiture. Though attorneys (and even courts) often use these concepts “interchangeably,” they
are distinct. Brenay v. Schartow, 709 F. App’x 331, 336 n.1 (6th Cir. 2017) (citing United States
v. Olano, 507 U.S. 725, 733 (1993)). As the Supreme Court has explained, “forfeiture is the
failure to make the timely assertion of a right,” while “waiver is the intentional relinquishment or
abandonment of a known right.” Olano, 507 U.S. at 733 (internal quotation marks omitted).
The government’s brief exclusively uses the term “waiver” rather than “forfeiture,” and the
government asserts that Petlechkov’s attorney “acknowledged to the government that venue was
proper.” Appellee Br. at 10. So the government does appear to be making a waiver argument.
But the government has not shown that Petlechkov’s attorney can singlehandedly waive
his client’s right to be tried in a proper venue. The Supreme Court has distinguished between
“tactical” rights (which can be waived by the defendant’s attorney) and “fundamental” rights
(which can only be waived by the defendant himself). Gonzalez v. United States, 553 U.S. 242,
250–51 (2008); see also McCoy v. Louisiana, 138 S. Ct. 1500, 1508 (2018). And as Justice
Scalia explained in Gonzalez, distinguishing between tactical and fundamental is no easy task.
See Gonzalez, 553 U.S. at 256–57 (Scalia, J., concurring in the judgment) (“Depending on the
circumstances, waiving any right can be a tactical decision. . . . I know of no objective criterion
for ranking rights.”).
No. 18-5991 United States v. Petlechkov Page 5
But ultimately it does not matter because there is no evidence that either Petlechkov or
his attorney “intentional[ly] relinquish[ed]” Petlechkov’s right to proper venue. Olano, 507 U.S.
at 733. The government relies solely on a purported phone call with Petlechkov’s attorney—a
conversation that “left [the government] with the impression” that a venue challenge was not
forthcoming. R. 75-1, Pg. ID 523. The details of the alleged conversation are not in the record.
Petlechkov’s attorney testified that he had “no independent recollection of the conversation,” id.
at 532, and the government admitted to the district court that there “was by no means a formal
stipulation” on the venue issue. Id. at 523. The government, therefore, has not met its burden of
proving the “intentional relinquishment or abandonment” of proper venue. See Olano, 507 U.S.
at 733.
To the extent the government is claiming forfeiture, that argument fails as well. Again,
forfeiture “is the failure to make the timely assertion of a right.” Id. Petlechkov did not object to
venue until after the close of the government’s proof at trial, and typically venue objections are
forfeited if not raised before trial. See Fed. R. Crim. P. 12(b)(3)(A)(i). But there is an exception
to this general rule. Defendants are only required to raise venue objections before trial if they
have notice of the alleged venue defect. Id. Thus, if a venue defect is not “apparent on the face
of the indictment” and the “defendant does not have notice of the defect through other means,”
then he does not need to object before trial. United States v. Grenoble, 413 F.3d 569, 573 (6th
Cir. 2005). In those circumstances, the defendant can presume that the government will offer
evidence at trial proving that venue is proper. But if the government fails to meet its burden at
trial, then the defendant is free to raise the objection. Id.Here, the government concedes that there was no venue defect apparent on the face of the
indictment and does not argue that Petlechkov himself had some other reason to know of a defect
before trial. Instead, the government claims the purported concession of venue by Petlechkov’s
attorney shows that Petlechkov was on notice of a venue defect. The government cites only one
case: United States v. Adams, 803 F.2d 722, 1986 WL 17714 (6th Cir. 1986) (table). But there,
the defendant’s attorney “conceded [on appeal] that he knew well before trial” the basis for a
venue objection and had failed to raise it. Id. at *9. Here, in contrast, Petlechkov’s attorney
contests that he conceded venue below and does not make any concession on appeal either.
No. 18-5991 United States v. Petlechkov Page 6
Accordingly, as the government has not shown that Petlechkov waived or forfeited his
venue objection, we must address the merits of Petlechkov’s venue argument.
B.
The Constitution requires that criminal defendants be tried in the place where they
committed their alleged crimes. U.S. Const. art. 3, § 2, cl. 3; id. amend. VI. Determining proper
venue is a two-step process. If the criminal statute has a specific venue provision, then courts
must accept that congressional choice (assuming it is otherwise constitutionally permissible). If
not, then courts determine the proper venue based on “the nature of the crime alleged and the
location of the act or acts constituting it.” Travis v. United States, 364 U.S. 631, 635 (1961); see
also United States v. Rodriguez-Moreno, 526 U.S. 275, 279 (1999).
The government says we should skip to the second step and analyze the “nature of the
crime alleged.” Travis, 364 U.S. at 635. But that is wrong: mail fraud has a specific statutory
venue provision. It provides, in pertinent part, that offenses “involving the use of the mails” can
be “prosecuted in any district from, through, or into which . . . mail matter . . . moves.”
18 U.S.C. § 3237(a). As this circuit has explained, “[a] plain reading of the text” shows “that
venue in a mail fraud case is limited to districts where the mail is deposited, received, or moves
through.” United States v. Wood, 364 F.3d 704, 713 (6th Cir. 2004) (citing 18 U.S.C. § 3237(a))
(emphasis added).
The government must prove proper venue for each count by a preponderance of the
evidence. United States v. Beddow, 957 F.2d 1330, 1335 (6th Cir. 1992). And in this case, each
count was tied to a specific package. Thus, the government had to prove each specific package
moved through the Western District of Tennessee. Since the jury found that the government did
so, Petlechkov concedes that we can only reverse if no rational juror could have come to that
conclusion. United States v. Kernell, 667 F.3d 746, 750 (6th Cir. 2012); United States v. Cooper,
40 F. App’x 39, 40 (6th Cir. 2002).
Counts 6, 13, and 19. The evidence showed that the packages underlying these three
counts were all sent from Munford, Tennessee, which is in the Western District of Tennessee.
The sender for each package was Aser Gruppe International. Aser Gruppe’s CEO Stephen
No. 18-5991 United States v. Petlechkov Page 7
Osborn testified that his company generally shipped its packages from a FedEx drop box in
Munford. Though Osborn (understandably) did not have a specific recollection of the three
packages at issue, the government does not need to present direct evidence of venue. Instead, the
government can prove venue based on a reasonable inference from circumstantial evidence.
United States v. Charlton, 372 F.2d 663, 664–65 (6th Cir. 1967); 2 Charles A. Wright & Arthur
R. Miller, Federal Practice & Procedure: Criminal § 307. Courts have found proof of venue in
mail fraud cases based on general practices and circumstantial evidence like we have here. See,
e.g., United States v. Holt, 899 F.2d 15, 1990 WL 37613, at *2 (6th Cir. 1990) (per curiam)
(table) (finding proof of venue in a mail fraud case based on a reasonable inference from
circumstantial evidence, even though the sender did not testify about the packages at issue);
United States v. Martino, 648 F.2d 367, 400–01 (5th Cir. 1981). Since a rational juror could
infer that Osborn followed his general practice and dropped the packages at the FedEx drop box
in Munford, a rational juror could have subsequently found that the government proved venue
for those Munford-related counts—6, 13, and 19. We affirm Petlechkov’s convictions on those
counts.
Counts 1–5, 7–12, 14–18, and 20. The packages underlying each of these counts were
sent from, and delivered to, destinations outside of the Western District of Tennessee. So to
prove venue for these counts, the government needed to show that the packages moved through
the Western District of Tennessee on the way to their destinations. Wood, 364 F.3d at 713.
The government’s venue argument for these counts relies on how FedEx’s shipping
process works. FedEx packages pass through hubs, where employees sort them by destination
and then send them on their way. See Tony Vieira, Why Use A Hub and Spoke System, FedEx
(April 16, 2009), https://about.van.fedex.com/blog/why-use-a-hub-and-spoke-system. The only
hub mentioned during trial was the one in Memphis, Tennessee, which is in the Western District.
But the government presented no evidence tying any particular package to that Memphis hub.
Yet, the government argues, the jury could have reasonably inferred that each of the packages
moved through it.
But the government slices the record too thin. No witness testified that Memphis was
FedEx’s only hub or even the primary hub. Indeed, the record shows that FedEx has “several
No. 18-5991 United States v. Petlechkov Page 8
hubs” outside of Memphis, even though they were not specifically named. R. 75, Pg. ID 411.
And unlike Counts 6, 13, and 19, there is no evidence of typical shipping practices, e.g., that
FedEx typically sent packages from certain locations through its Memphis hub. Although the
record reflects that FedEx’s worldwide headquarters is in Memphis, no witness said that means
any particular package moved through FedEx’s separate Memphis hub.
The government has one final argument that applies only to the packages with
international destinations. According to the government, the only international hub proven at
trial was the Memphis hub. Thus, the government argues, the jury could have inferred that any
packages shipped abroad must have moved through Memphis. If the evidence showed that
Memphis was indeed FedEx’s only international hub, then that would sustain venue for the
counts relying on packages with international destinations. But no one testified that Memphis is
the only international hub; a witness just said that it is “an international hub.” Id. at 414
(emphasis added). Nor did anyone testify about FedEx’s typical shipping procedures for
international packages. So the counts relying on international packages are no different than the
others.
In sum, it is possible that some of the packages at issue went through the Memphis hub.
But that is not enough. The government must prove venue count-by-count, and to do that it must
present enough evidence to allow a rational juror to find venue by a preponderance of the
evidence. See Wood, 364 F.3d at 713–14; United States v. Greene, 995 F.2d 793, 801–02 (8th
Cir. 1993). No evidence cannot be a preponderance of the evidence. And there is simply no
evidence, direct or circumstantial, that any specific package implicated in these counts ever
moved through the Western District of Tennessee. Cf. Johnson v. Coyle, 200 F.3d 987, 994–95
(6th Cir. 2000) (holding that no rational juror could have found the defendant guilty of
kidnapping when the government did not present any evidence of kidnapping as defined by state
law). Accordingly, no rational juror could have found that the government proved venue for
Counts 1–5, 7–12, 14–18, and 20. We must dismiss Petlechkov’s convictions on these counts.
No. 18-5991 United States v. Petlechkov Page 9
C.
Petlechkov did not argue that we should dismiss with prejudice—i.e., without giving the
government a chance to try again. And the government did not address the issue either. But we
have the discretion and obligation to explain the effect of our decision. See United States v.
Taylor, 487 U.S. 326, 336 (1988).
This issue turns on the Double Jeopardy Clause of the Fifth Amendment. The Double
Jeopardy Clause bars a retrial after an acquittal. U.S. Const. amend. V; Evans v. Michigan, 568
U.S. 313, 318 (2013). An “acquittal” is “any ruling that the prosecution’s proof is insufficient to
establish criminal liability for an offense.” Evans, 568 U.S. at 318. In contrast, procedural
dismissals “unrelated to factual guilt or innocence” do not implicate double jeopardy concerns.
Id. at 319. For instance, if a defendant successfully moves for dismissal based on pre-indictment
delay, the Double Jeopardy Clause does not bar another prosecution against him. United States
v. Scott, 437 U.S. 82, 95 (1978).
A dismissal on venue grounds does not qualify as an “acquittal” for double jeopardy
purposes. Though venue is a factual issue that the government must prove, it is not an element
of the underlying criminal offense. United States v. Kaytso, 868 F.2d 1020, 1021 (9th Cir.
1988). Accordingly, at least three of our sister circuits have held that a venue dismissal is not an
“acquittal.” Kaytso, 868 F.2d at 1021; Haney v. Burgess, 799 F.2d 661, 663–64 (11th Cir. 1986);
Wilkett v. United States, 655 F.2d 1007, 1011–12 (10th Cir. 1981) (“Venue is wholly neutral; it
is a question of procedure, more than anything else, and it does not either prove or disprove the
guilt of the accused.”).
This is true even for mail fraud, where the test for venue—that mail moved through the
district—resembles a substantive element of the offense. See Wood, 364 F.3d at 710, 713 (citing
18 U.S.C. §§ 1341, 3237(a)). To prove the substantive offense, the government established that
Petlechkov’s fraudulent scheme relied on mailing packages, a fact that he does not challenge.
But proving venue required something more. The government needed to prove where those
packages went. In this case, it had to prove that they moved through the Western District of
Tennessee. The government failed to make that showing, but that failure does not change the
No. 18-5991 United States v. Petlechkov Page 10
fact that Petlechkov committed mail fraud. Thus, we are dismissing the seventeen counts
because of “reasons required by the Constitution or laws . . . unrelated to factual guilt or
innocence.” Scott, 437 U.S. at 98 n.11. That means a dismissal without prejudice is appropriate.
* * *
We affirm Petlechkov’s convictions on Counts 6, 13, and 19, and dismiss all remaining
counts without prejudice. We need not address Petlechkov’s challenges to his sentence and the
restitution award because the district court will need to both resentence Petlechkov and
recalculate that award. See Hughey v. United States, 495 U.S. 411, 412–13, 419–20 (1990);
Wood, 364 F.3d at 714.
We AFFIRM in part, REVERSE in part, and REMAND for proceedings consistent with
this opinion.