United States v. Michael Teadt , 653 F. App'x 421 ( 2016 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 16a0348n.06
Nos. 14-3995, 14-4124, 14-4125, 15-3014, 15-3015
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
UNITED STATES OF AMERICA, ) Jun 24, 2016
)
DEBORAH S. HUNT, Clerk
Plaintiff-Appellee, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR
) THE NORTHERN DISTRICT OF
MICHAEL L. TEADT, BRADFORD HUEBNER, ) OHIO
and CHARLES EMMENECKER, )
)
Defendants-Appellants.
Before: BOGGS and DONALD, Circuit Judges; HOOD, District Judge.1
HOOD, District Judge. This case involves the consolidated appeals from the convictions
of three defendants who were jointly indicted and tried for federal fraud crimes. Following a
jury trial, Defendant Huebner was convicted of conspiracy to commit wire fraud, wire fraud,
mail fraud, money laundering, and structuring; Defendant Emmenecker was convicted of
conspiracy to commit wire fraud and wire fraud; and Defendant Teadt was convicted of mail
fraud. The defendants raise numerous issues on appeal, including challenges to the sufficiency
of the evidence, the district court’s restitution order, the jury instructions, and the prosecutor’s
conduct.
1
The Honorable Joseph M. Hood, United States District Judge for the Eastern District of
Kentucky, sitting by designation.
Case Nos. 14-3995/14-4124/14-4125/15-3014/15-3015, United States v. Teadt, et al.
BACKGROUND
When Michael Teadt and Bradford Huebner met at an art festival in Toledo, Ohio in
2008, the two quickly became friends. Teadt was between permanent jobs, but was selling
energy-efficient windows and doors. Huebner told Teadt about his business—Energy Saver
Advisors—and invited Teadt to his downtown Toledo office to see the company’s products.
Teadt ultimately received an invitation from Huebner to use a cubicle at the office while
searching for a job. Teadt took Huebner up on the offer and eventually secured employment
with a New Jersey-based company called S.S. White. In the meantime, Huebner learned of the
Wood County (Ohio) Department of Job and Family Services Project HIRE Program, which
would subsidize job training for workers who had been laid off from their jobs. Although Teadt
was working at S.S. White, he and Huebner’s employee Kelly Bland completed the Project
HIRE paperwork and Huebner eventually received more than $5,000 in benefits from the
program.
Around this same time, Energy Saver Advisors began to market and sell Iraqi dinars
under the name the “BH Group.” According to Huebner and his longtime friend Charles
Emmenecker, the dinars, each worth a fraction of a cent, would become worth several U.S.
dollars overnight based on speculation that the Iraqi government would unilaterally “revaluate”
its currency. Shortly after the inception of the scheme, Rudolph Coenen entered the picture.
Coenen held himself out to be a foreign-currency expert and former vice president of J.P.
Morgan Chase as well as a war hero.2 The three men used weekly “conference calls” as their
main marketing tool. The calls essentially were commercials for dinars and could be accessed by
2
Coenen pled guilty to conspiracy to commit wire fraud, wire fraud, and money laundering and
was sentenced to 63 months’ imprisonment.
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Case Nos. 14-3995/14-4124/14-4125/15-3014/15-3015, United States v. Teadt, et al.
the public by dialing in or listening to a recording on the internet. The men attempted to bolster
listeners’ confidence in dinar investment by making vague references to Executive Order 13303
and a fictitious statute called the Overseas Investment Protection Act.
Coenen, Huebner, and Emmenecker concocted the idea that, once the dinar revaluation
came to pass, their customers would need an appropriate vehicle for the investment of their
riches. They created two purported hedge funds and began pre-selling “inception investors’
seats.” They sold almost 1,000 seats at a price of $750 each. After they began selling the seats,
they contacted lawyers and tried to initiate the required paperwork, assuring investors that the
SEC was appropriately involved. Apex Fund Services, the company who was engaged to
administer the funds initially, withdrew after conducting due diligence.
In the spring of 2011, Huebner began receiving anonymous emails raising serious
concerns about Coenen’s background as well as the possibility that the dinar scheme and hedge
funds were fraudulent. Huebner maintains that he had such great faith in the business and in
Coenen, he simply did not believe the claims. Prakash Karamchani and Tim Varner were
independent computer experts whom Huebner had hired to set up a subscription news service for
the BH Group. Karamchani and Varner became so suspicious that they hired an investigator to
look into Coenen’s background. The background check revealed that Coenen had not worked at
J.P. Morgan, had not served in the military, had no educational background in finance or
currency, and had a criminal history. When confronted with this information, Huebner, after
consulting with Teadt, contacted the FBI regarding Coenen. Little did Huebner realize that
Huebner himself was already under investigation on suspicion of mail and wire fraud. On July
27, 2011—the day he met with an FBI agent to talk about Coenen—agents searched Huebner’s
home and office, seizing dinars then worth $241,192.38 U.S. dollars.
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During a ten-day trial, the jury heard testimony from a host of witnesses, including the
defendants. Huebner and Emmenecker were convicted of conspiracy to commit wire fraud and
wire fraud in connection with the dinar scheme. Huebner was also convicted of nine counts of
money laundering and thirty counts of structuring to evade reporting requirements. Huebner and
Teadt were convicted of mail fraud in connection with the Wood County HIRE program.
DISCUSSION
I. Motion to Sever
Prior to trial, the defendants moved to sever Count 3, the mail-fraud charge involving the
Wood County HIRE program, arguing that it did not relate sufficiently to the balance of the
charges. While defrauding the Wood County HIRE Program formed the substantive basis of the
mail-fraud charge, it also was alleged to be an act in furtherance of the wire-fraud conspiracy.
The district court concluded that evidence of the HIRE Program fraud was
“relevant and necessarily a part of the ‘same act or transaction, or . . . the same series of acts or
transactions, constituting an offense or offenses’ under Criminal Rule 8(b),” and, thus, Count 3
was properly joined. The court also found that none of the defendants would stand a better
chance of acquittal if tried on his own, and any risk of prejudice could be cured by proper jury
instructions.
We review de novo whether joinder was proper. United States v. Deitz, 577 F.3d 672,
692 (6th Cir. 2009). “The joinder of multiple defendants is proper under Rule 8(b) only if each
of the counts of the indictment arises out of the same act or transaction or series of acts or
transactions.” United States v. Hatcher, 680 F.2d 438, 441 (6th Cir. 1982). A group of acts or
transactions constitutes a series where they are part of a common scheme or plan. United States
v. Lewis, 363 F. App’x 382, 390 (6th Cir. 2010); see also Fed. R. Crim. P. 8(a).
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Case Nos. 14-3995/14-4124/14-4125/15-3014/15-3015, United States v. Teadt, et al.
We look, as did the district court, to the allegations in the indictment to determine
whether joinder was proper. See Deitz, 577 F.3d at 691. The indictment alleges that in or about
2010, Teadt allied himself with Huebner regarding the sale of dinars and, later, sales of seats in
two non-existent hedge funds. The indictment further alleges that Teadt and Huebner, along
with Emmenecker, repeatedly made claims to potential investors over the telephone and internet
that even relatively small investors in the Iraqi dinar would became wealthy overnight. Teadt,
Huebner, and Emmenecker began marketing the non-existent hedge funds to investors and
members of the BH Group, selling seats in the funds for $750 each. The following is listed as an
act in furtherance of the conspiracy:
On or about July 10, 2010 to on or about January 14, 2011, in order to obtain
funds to defray the costs of The BH Group’s dinar and hedge fund business,
[Huebner] and [Teadt] made multiple false and misleading statements to the
Wood County (Ohio) Department of Job and Family Services (WCDJFS) by
falsifying application documents for WCDJFS’s Project HIRE program, resulting
in improper payment of taxpayer funds to The BH Group.
Based on the allegations of these logically interrelated transactions, the district court did not err
in declining to sever Count 3.
“Rule 14 provides that severance may be granted if substantial prejudice would result to
an individual defendant tried jointly with another.” United States v. Licavoli, 725 F.2d 1040,
1051 (6th Cir. 1984). Huebner contends that he was prejudiced significantly by the inclusion of
Count 3. He emphasizes that his business, Energy Saver Advisors, with which Teadt first
became involved, was not involved in the dinar scheme. It was through Energy Saver Advisors
that he applied for the HIRE Program funding. Huebner testified however, that with respect to
the dinar scheme, Energy Saver Advisors was simply doing business as the BH Group. In fact,
in the beginning, dinar customers were making payments to Energy Saver Advisors, and
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Huebner created the alternative name to minimize confusion. And while there certainly are some
aspects of the mail-fraud scheme that do not, at least facially, overlap with the dinar scheme,
many circumstances are intertwined. Importantly, Defendants have shown no reason that
limiting instructions would not cure any risk of prejudice. See Zafiro v. United States, 506 U.S.
534, 540 (1993).
II. Sufficiency of the Evidence
A. Teadt
Teadt contends that there was insufficient evidence to convict him of mail fraud, as there
was no evidence that he knowingly joined a scheme to defraud Wood County. Ordinarily, when
the sufficiency of the evidence is challenged on appeal, we must determine, viewing the evidence
in the light most favorable to the government, whether any rational trier of fact could have found
that the essential elements of the crime were satisfied. United States v. Jones, 102 F.3d 804, 807
(6th Cir. 1996). To preserve this challenge for appeal, however, the defendant must not only
make a motion for acquittal at the conclusion of the government’s case-in-chief, but must also
renew the motion after the close of the evidence. United States v. Price, 134 F.3d 340, 350 (6th
Cir. 1998). Because Teadt failed to renew his motion, we review it only for a manifest
miscarriage of justice, which exists only when “the record is devoid of evidence pointing to
guilt.” United States v. Roberge, 565 F.3d 1005, 1008 (6th Cir. 2009).
To find Teadt guilty of mail fraud, the jury had to conclude, by a preponderance of the
evidence, that each of the following three elements had been proven: “(1) a scheme or artifice to
defraud; (2) use of mails in furtherance of the scheme; and (3) intent to deprive a victim of
money or property.” United States v. Turner, 465 F.3d 667, 680 (6th Cir. 2006). Teadt disputes
only the third element, relying on his testimony that he had nothing to do with Huebner’s
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forwarding of the fraudulent documents to Wood County. Further, he claims that he did not
personally obtain any funds. Teadt also testified that he believed he was going to be terminated
from his job at S.S. White, so he actually would be unemployed sometime in the near future. His
plan was to take a job with Huebner’s business if the funding from Wood County came through.
Teadt’s testimony gives rise to a reasonable inference that he intended to deprive Wood
County of funds. When Teadt completed the paperwork for the Wood County HIRE Program,
he lied about being unemployed. His testimony suggests that he believed his future employment
with Huebner’s business was dependent upon funding from Wood County. There is no
requirement that Teadt personally received the funds. Based on the foregoing, the record is not
devoid of evidence pointing to Teadt’s guilt.
B. Huebner
Huebner also failed to renew his motion for acquittal after the close of the evidence, so
we review his sufficiency-of-the-evidence challenges for a manifest miscarriage of justice. See
Price, 134 F.3d at 350. Huebner contends that there was insufficient evidence at trial to convict
him of conspiracy to commit wire fraud and money laundering.
With respect to his conviction for conspiracy to commit wire fraud, 18 U.S.C. § 1343,
§ 1349, Huebner alleges that there was insufficient evidence to demonstrate that he formed an
agreement to commit the crime. See United States v. Cunningham, 679 F.3d 355, 373 (6th Cir.
2012) (conviction for conspiracy to commit wire fraud requires the following: the defendant
“knowingly and willfully joined in an agreement with at least one other person to commit an act
of [wire] fraud and that there was at least one overt act in furtherance of the agreement” (quoting
United States v. Jamieson, 427 F.3d 394, 402 (6th Cir. 2005). Huebner insists that he simply
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was a sincere believer in the imminent revaluation of dinar and that, like many people, he was
duped by Rudolph Coenen.
However, the record is not devoid of evidence indicating that Huebner conspired to
commit wire fraud. The jury easily could have disbelieved Huebner’s claims of his sincere belief
in Coenen and the revaluation of the dinar. Huebner failed to offer competent evidence at trial
supporting his claims that such a revaluation was likely to occur. Instead, Huebner,
Emmenecker, and Coenen falsely claimed that, through Executive Order 13303, President
George W. Bush expressly endorsed the purchase of dinars. They also assured potential buyers
of a fictitious United States statute called the “Overseas Investment Protection Act,” which
supposedly guaranteed 90% of any investment made in Iraq. With regard to the hedge funds,
which were illegal themselves, Huebner and the others told call-in listeners that there were
delays due to pending paperwork with the Security Exchange Commission. That was proven to
be a complete fabrication. During the raid on Huebner’s office, FBI agents discovered dinars
stuffed in drawers, cabinets, and even an oven. Based on the foregoing evidence, the jury
reasonably concluded that Huebner conspired to commit wire fraud when he participated in the
dinar and hedge-fund schemes.
Huebner also challenges the sufficiency of the evidence with respect to his conviction for
money laundering, 18 U.S.C. § 1957. Specifically, he contends that the government did not meet
its burden of proving his mens rea during the time frame designated in the indictment.
Huebner’s argument, however, rests entirely upon his claims that he was duped by Coenen’s lies
and was not aware of any fraudulent activity until July 2011 when Karamchani and Varner
confronted Huebner with Conen’s background. For the reasons stated above, Huebner’s
argument fails.
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C. Emmenecker
Emmenecker contends that the evidence adduced at trial was insufficient to convict him
of wire fraud, 18 U.S.C. § 1343, and conspiracy to commit wire fraud, 18 U.S.C. § 1349. At the
close of the government’s evidence, Emmenecker made a motion under Federal Rule of Criminal
Procedure 29(a) for a judgment of acquittal. The district court opted to reserve decision pursuant
to Rule 29(b), ultimately denying the motion on May 15, 2014. Emmenecker did not renew the
motion but contends that he was not required to, since the district court’s ruling on his initial
motion came after all of his evidence was in.
While a defendant might not be required to take any additional steps when a district court
has reserved its ruling until after the close of all the evidence, see United States v. Wagner, 382
F.3d 598, 611 n.2 (6th Cir. 2004), that is not what occurred in this case. Emmenecker did not
present further evidence after the court’s May 15 ruling, but the other defendants presented
numerous witnesses on May 16, 2014. While some of that day’s testimony focused on
structuring, with which Emmenecker was not charged, other testimony involved the overall dinar
scheme. Since Emmenecker did not renew his Rule 29 motion after the close of proof, our
review is limited to determining whether there was a manifest miscarriage of justice. See Price,
134 F.3d at 350.
Emmenecker claims that he simply moderated the group’s weekly conference calls
because it provided some exposure for himself and Xango, the health drink he was selling. Other
than that, he contends, he profited nothing. He testified that he and Huebner had been friends for
approximately 50 years and that he had purchased over $20,000 in dinars himself. He further
testified that he was an experienced networker and that he appeared on the weekly call-in shows,
sharing promotional information that he had heard on previous calls and had seen “written over
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and over again” in various sources found in his own research. Emmenecker maintains that,
throughout the scheme, he had no reason to doubt the truth of any of the claims the group made
about dinars. After the time that Emmenecker stated that he learned the truth about Coenen’s
deceptions, however, the two continued to appear on call-in shows together. Emmenecker
conceded that, by that time, he knew that Coenen was a “bad guy.”
The jury could have reasonably disbelieved Emmenecker’s claims regarding his sincere
beliefs about dinars. Emmenecker concedes that he continued to participate in the weekly calls
with Coenen after he knew that Huebner informed the FBI that he suspected Coenen of
malfeasance. Emmenecker also testified that in 2010, a concerned client sent him links to
websites warning the public that the impending “revaluation” of the dinar was a scam. And
while Emmenecker contends that his own misrepresentations (e.g., Executive Order 13303 and
the Overseas Investment Protection Act) were immaterial, reasonable individuals could have
relied on those representations in deciding whether to purchase dinars. In fact, some of the dinar
purchasers who testified at trial stated that they did rely on these types of representations in
making their decisions. Accordingly, the record is not devoid of evidence to sustain
Emmenecker’s convictions for wire fraud and conspiracy to commit wire fraud.
III. Restitution Order
The Mandatory Victims Restitution Act (“MVRA”) requires those convicted of offenses
against property under Title 18 to pay restitution for victims’ losses. United States v. Elson, 577
F.3d 713, 721 (6th Cir. 2009). We review the amount of restitution ordered by the district court
for an abuse of discretion. United States v. Bogart, 576 F.3d 565, 569 (6th Cir. 2009). To prove
the amount of loss, see 18 U.S.C. § 3664(e), the government provided the district court with the
names of those who purchased hedge-fund seats, as well as the names of those who purchased
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dinars and the amount of U.S. dollars paid. Through questionnaire responses, the government
identified 98 individuals who had purchased dinars, estimating that these individuals purchased
$344,582 in dinars. The district court applied a 30% assumed-loss rate to account for what the
dinars were actually worth, resulting in $103,374.60 in restitution for losses caused by the dinar
fraud.
Huebner claims, creatively, that since many of the purchasers do not consider themselves
victims, they cannot be recognized as such under the law. He identifies several purchasers who
testified at trial to still owning the dinars and believing, or at least hoping, that the speculated
revaluation would occur. The Mandatory Victims Restitution Act defines “victim” as “a person
directly and proximately harmed as a result of the commission of an offense for which restitution
may be ordered.” 18 U.S.C. § 3663A(a)(2). The district court concluded that all 98 identified
buyers were victims under the Act, as they were harmed by their purchases of the dinars because
the fair market value was substantially less than the amount they paid to Huebner. Reviewing
the issue de novo, see United States v. Chalupnik, 514 F.3d 748, 752 (8th Cir. 2008), we find that
the 98 identified buyers are victims under the MVRA. The Act does not require a victim to have
a subjective belief that he or she has been harmed. Rather, it is left to the court to make that
determination. We agree with the district court that they are victims, regardless of their
subjective beliefs.
Turning to Huebner’s second argument, he contends that until purchasers have sold their
dinars, they have suffered no actual loss and, thus, there is no basis for awarding restitution. See
United States v. Simpson, 538 F.3d 459, 465–66 (6th Cir. 2008) (restitution requires finding of
actual loss). While some purchasers may still hold their dinars, they have suffered a loss by
virtue of the fact that the dinars are worth much less than the price they paid and likely always
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will be. The Supreme Court’s decision in Robers v. United States, 134 S. Ct. 1854 (2014), is
instructive. A provision of the MVRA states that when return of a victim’s property is
“impossible, impracticable, or inadequate,” the offender must pay the victim “an amount equal
to” the property’s value less “the value (as of the date the property is returned) of any party of
the property that is returned.” 18 U.S.C. § 3663A(b)(1)(B). Robers was convicted of conspiracy
to commit wire fraud after he submitted fraudulent mortgage loan applications to two banks.
Robers, 134 S. Ct. at 1856. The banks lent Robers $470,000 to purchase two houses and, when
he failed to make loan payments, the banks foreclosed on the mortgages. Id. Although the banks
took title to the houses in 2006, they were not able to sell them until 2007 and 2008, for a total
price of $280,000. Id. Robers was subsequently ordered to pay restitution of about $220,000—
the rough difference between the $470,000 he was lent and the amount the banks received for
selling the houses. Id. Like Huebner, Robers argued that, under the current reading of the
MVRA, when a victim still holds “collateral” at the time of sentencing, the court would be faced
with the dilemma of either refusing to award restitution altogether or giving the victim a
windfall. Id. at 1858. The Court rejected this argument, pointing out that the provisions of the
MVRA allow courts to adjust for various situations. Id. That is what the district court did here
by making a reasonable estimate of the victims’ losses. See United States v. Jones, 511 F. App’x
420, 423 (6th Cir. 2013) (citing USSG § 2B1.1 cmt. 3 n.3(C)). This type of reasoned estimate is
particularly appropriate in cases “where the losses occasioned by financial frauds are not easy to
quantify.” United States v. Triana, 468 F.3d 308, 320 (6th Cir. 2006).
The district court also ordered Emmenecker to pay $836,124.60 in restitution, joint and
several with Coenen and Huebner. This award is comprised of two parts: $103,374.60 for the
dinar purchasers’ losses and $732,750.00 for losses suffered as a result of the hedge-fund seat
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sales. Emmenecker challenges the award, arguing that he should not be held responsible
because, unforeseeably to him, Coenen and Huebner spent or otherwise dissipated those funds.
Citing his relative level of culpability, Emmenecker asked the district court to apportion his
responsibility with respect to restitution at twenty percent. The district court declined to do so,
finding that Emmenecker was involved in the wire-fraud conspiracy during its heyday and
“fueled the ‘dinar hysteria’ which eventually led to the fraudulent hedge fund.” Regardless of
whether he benefitted from the proceeds directly, his actions caused others to lose money, which
was the reasonable, foreseeable consequence of participants in a fraudulent scheme. The district
court has wide latitude to fashion restitution awards, including imposing joint- and - several-
liability, “to best effectuate the [MVRA’s] purpose of fully compensating victims.” United
States v. Hargrove, 714 F.3d 371, 377–78 (6th Cir. 2013). The district court did not abuse its
discretion with respect to applying joint - and - several liability.
Emmenecker also contends that the district court wrongfully assumed that every sale of
dinar was fraudulent. He claims that because it is lawful to sell dinar to American citizens, the
district court should have reviewed each sale to determine whether that particular sale was
fraudulent. We disagree, as we have previously concluded that the government satisfies its
burden by a preponderance of the evidence when it extrapolates a total loss amount from a
representative group of victims. See United States v. Jones, 511 F. App’x 420, 423 (6th Cir.
2013) (explaining that “[a] preponderance of the evidence shows that the 285 bills from the 210
patient files were a representative sample from which the district court could reasonably
extrapolate a total loss amount”). While a victim’s losses may only be included in a restitution
award arising from fraud if the victim actually relied on the perpetrator’s fraudulent conduct or
misrepresentations, see United States v. Farano, 749 F.3d 658, 666 (7th Cir. 2014),
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Emmenecker has not demonstrated that any of the dinar purchasers did not in some way rely on
the BH Group’s fraudulent marketing or that the district court did not rely on a representative
sample of dinar investors when it calculated the loss determination. Thus, the district court did
not clearly err in calculating the loss determination.
Finally, Emmenecker takes issue with the district court’s decision to average two bids
from dinar buyers to determine the fair market value of the dinar. He asserts that the district
court should have considered only the higher offer, as would any rational investor. The district
court’s decision, he continues, unfairly increased the loss amount in the restitution calculation.
Fair market value is discussed in U.S.S.G. § 2B1.1, comment n.3, which states that “[t]he
court need only make a reasonable estimate of the loss.” We employ a two-step approach in
determining fair market value: first, we determine “whether a market value for the stolen
property is readily ascertainable,” and second, if it is, we “determine whether that figure
adequately measures either the harm suffered by the victim or the gain to the perpetrator,
whichever is greater.” United States v. Sosebee, 419 F.3d 451, 456 (6th Cir. 2005). The
Supreme Court has said that “even in the ordinary case, assessment of the market value involves
the use of assumptions, which make[s] it unlikely that the appraisal will reflect true value with
nicety.” United States v. Miller, 317 U.S. 369, 374 (1943). Indeed, we have determined loss
based on the fair market value as “the market price at which an average buyer would purchase
the property from an average seller.” United States v. Moore, 225 F.3d 637, 643 (6th Cir. 2000).
The district court’s use of averages was not clear error. We conclude that the restitution order is
valid.
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IV. Teadt’s Claim of Ownership of Seized Dinars
Teadt contends that the district court erred in concluding that he had not met his burden
under 21 U.S.C. § 853(n) to establish ownership of dinars seized from Huebner’s office on July
27, 2011. The district court’s legal interpretations are reviewed de novo; its factual findings are
reviewed for clear error.3 United States v. Salti, 579 F.3d 656, 667 (6th Cir. 2009). During the
execution of the search warrant at Huebner’s office, agents located 705 dinar notes locked in
Teadt’s desk. Agents seized those notes along with others found in the office. Because the
government initially was unsure whether the notes belonged to Teadt or Huebner, the United
States sought forfeiture of the notes from both men. Ultimately, Teadt was acquitted of the dinar
and hedge-fund frauds while Huebner was convicted. The district court found that the seized
currency was subject to forfeiture against Huebner. At that point, Teadt made a third-party claim
under § 853(n) for $14,975.96 converted from 17,625,000 dinar notes. On December 18, 2014,
the district court held an evidentiary hearing on Teadt’s claim and denied the claim the following
day. The court was not swayed by Teadt’s testimony that Huebner’s office was a safer place
than Teadt’s own home to store the dinars. Teadt’s statement contradicted his trial testimony,
during which he stated that he deposited cash into a bank instead of keeping it at the BH Group
office because the office was not a safe place to keep cash. Testimony revealed that when an
undercover IRS agent purchased dinars from the BH Group, Teadt retrieved the currency from
3
Teadt asserts that the district court erred in shifting the burden of proof to him. Instead of
requiring the government to prove by a preponderance of evidence that the dinars were
forfeitable, Teadt claims that the district court erroneously required him to prove his claim by a
preponderance of the evidence. The district court did not err. We have explained that while the
government ordinarily must prove forfeiture by a preponderance of the evidence, United States v.
Warshak, 631 F.3d 266, 331 (6th Cir. 2010), in an ancillary claim, “the burden shifts to the
petitioner to establish the petitioner’s third-party claim by a preponderance of the evidence,”
United States v. Coffman, 612 F. App’x 278, 284 (6th Cir. 2015) (internal quotation marks
omitted).
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his desk drawer. It is also notable that dinar notes were stashed in drawers and cabinets all
around the office. The only documentary evidence that Teadt submitted in support of his claim
was checks made out from Teadt to Huebner totaling $9,350.00. Based on the facts of record,
the district court did not commit clear error in rejecting Teadt’s claim under § 853(n).
V. Structuring to Avoid Reporting Requirement Instruction
Huebner was convicted on Counts 13 through 42 of structuring and attempting to
structure transactions to avoid reporting requirements under 31 U.S.C. §§ 5313(a) and
5324(a)(3). During his testimony at trial, Huebner conceded that he intentionally deposited cash
to avoid making deposits over $10,000. While at times it was a coincidence, he stated, other
times, it was done upon the advice of a bank employee to avoid allegedly unnecessary
paperwork. Over Huebner’s objection, the district court instructed the jury that Huebner could
not rely on the bank teller’s instructions.
We review challenges to jury instructions for an abuse of discretion. United States v.
Ross, 502 F.3d 521, 527 (6th Cir. 2007). Further, a judgment may be reversed based upon an
improper jury instruction “only if the instructions, viewed as a whole, were confusing,
misleading, or prejudicial.” United States v. Harrod, 168 F.3d 887, 892 (6th Cir. 1999) (quoting
Beard v. Norwegian Caribbean Lines, 900 F.2d 71, 72-73 (6th Cir. 1990)). With respect to
structuring, the jury was instructed as follows:
The government must prove that a given defendant knew of the reporting
requirement and that he intended to evade it. The government does not have to
prove that a defendant knew that evading the requirement was illegal. A
defendant’s belief that his conduct was lawful is not a defense to this charge, even
if that belief is based on statements made to him by bank employees.
While Huebner argues that the reference to bank employees eviscerated his entire defense
to the charges, the district court did not abuse its discretion in choosing to include it. Most
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Case Nos. 14-3995/14-4124/14-4125/15-3014/15-3015, United States v. Teadt, et al.
importantly, the court correctly instructed the jury that Huebner had to know of the reporting
requirement and intend to evade it. See United States v. Pang, 362 F3d 1187, 1193-94 (9th Cir.
2004). Huebner argues that, based on the advice of bank employees, he believed the reporting
requirement was an internal bank procedure. He was able to present this evidence through his
testimony, however, and was therefore not prejudiced by this instruction. Regardless, Congress
has revised the structuring statute “to obviate the need to prove that a defendant knew his
structuring activities were illegal.” United States v. Khalife, 106 F.3d 1300, 1302 n.3 (6th Cir.
1997).
VI. Witnesses Admitted As Experts
Teadt complains because the government asked, in the presence of the jury, that its
witness, IRS Agent William Massi, be admitted as an expert for his testimony regarding his
investigation of Defendants’ computers. Upon the government’s motion to admit him, defense
counsel responded: “No objection.” The district court remained silent, and Massi’s testimony
continued. In United States v. Johnson, 488 F.3d 690, 697 (6th Cir. 2007), we disapproved of
the trial judge’s declaration before the jury that the testifying officer was to be considered an
expert. We cited to the Eighth Circuit for the proposition that “[s]uch an offer and finding by the
Court might influence the jury in its evaluation of the expert and the better procedure is to avoid
an acknowledgement of the witnesses’ expertise by the Court.” Id. (quoting United States v.
Bartley, 855 F.2d 547, 552 (8th Cir. 1988)). Unlike the judge in Johnson, however, the trial
judge in the case at bar did not make a declaration regarding Massi’s qualification as an expert.
Rather, he remained silent in the face of defense counsel’s acquiescence and Massi’s testimony
continued. Indeed, counsel should refrain from asking the court to approve a witness as an
expert in the presence of the jury. See id. And in the absence of ruling on an objection, the court
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Case Nos. 14-3995/14-4124/14-4125/15-3014/15-3015, United States v. Teadt, et al.
should not, in the presence of the jury, make a determination as to whether a witness is qualified
as an expert. Id. at 698 (citing ABA Civil Trial Practice Standard 17 (Feb. 1998)); see also
United States v. Trepanier, 576 F. App’x 531, 536 (6th Cir. 2014).
In any event, plain error has not occurred. Subsequent to the events described above,
Teadt’s attorney moved the court, in the presence of the jury, to designate Richard Green,
Defendants’ computer witness, as an expert. The government stated that it had no objection and,
just he had done previously, the trial judge remained silent. Any implicit bias created by the trial
court’s acceptance of Massi as an expert was neutralized by its acceptance of Green as a defense
expert on the same subject matter.
VII. Prosecutorial and Juror Misconduct
Defendants Emmenecker and Teadt argue that the prosecutor made inappropriate
statements during closing arguments, but since Defendants did not challenge these statements
below, we review them only for plain error. United States v. Koeberlein, 161 F.3d 946, 948–49
(6th Cir. 1998). Both Defendants suggest that the prosecutor improperly referred to evidence
that existed, but was not in the record by telling the jury “I wish we could show cash deposits
into Mr. Emmenecker and Mr. Teadt’s accounts that we could say was how they profited.”
When the statement is viewed in context, however, it is clear that the prosecutor was merely
conceding that the government had no direct evidence of how Teadt or Emmenecker benefitted
monetarily from the crimes.
Emmenecker takes issue with a number of other minor statements by the prosecutor.
A thorough review of the trial transcript reveals that these statements fall within the range of
discretion given to prosecutors during closing arguments. See United States v. al-Maliki,
787 F.3d 784, 795 (6th Cir. 2015).
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Case Nos. 14-3995/14-4124/14-4125/15-3014/15-3015, United States v. Teadt, et al.
Finally, the district court did not plainly err in dealing with the issue of sleeping jurors.
See United States v. Maxwell, 160 F.3d 1071, 1076-77 (6th Cir. 1998). One juror who was
having difficulty remaining awake was dismissed as an alternate at the conclusion of trial. The
judge also reminded the jurors repeatedly that he was observing them, assessing their level of
alertness, and “tak[ing] actions to wake up the situation.” A district judge has “considerable
discretion in deciding how to handle a sleeping juror and overturning the verdict is appropriate
only if the defendant was deprived of his Fifth Amendment due process rights or his Sixth
Amendment right to an impartial jury.” United States v. Cook, 550 F. App’x 265, 270 (6th Cir.
2014) (internal quotation marks removed). On this record, we cannot find such a deprivation of
rights.
CONCLUSION
For the foregoing reasons, the judgment of the district court is AFFIRMED.
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