United States v. James Streets , 401 F. App'x 81 ( 2010 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 10a0698n.06
No. 09-3362
FILED
UNITED STATES COURT OF APPEALS Nov 12, 2010
FOR THE SIXTH CIRCUIT LEONARD GREEN, Clerk
UNITED STATES OF AMERICA, )
)
Plaintiff-Appellee, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE SOUTHERN
) DISTRICT OF OHIO
JAMES H. STREETS, )
)
Defendant-Appellant. )
)
BEFORE: SUTTON and McKEAGUE, Circuit Judges; JONKER, District Judge.*
Jonker, District Judge. The government prosecuted Defendant James Streets for carrying
out a two-year scheme to defraud his employer by diverting customer payments from his employer
to himself. According to the government, Mr. Streets also made materially false statements to the
investigators handling the case for the Federal Bureau of Investigation. The matter culminated in
a trial where the jury found Mr. Streets guilty as charged of both mail fraud and making a materially
false statement to the government. Mr. Streets appealed. For the reasons given below, we affirm
his sentence and conviction.
*
The Honorable Robert J. Jonker, United States District Judge for the Western District of
Michigan, sitting by designation.
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FACTS
I. Background
The Putnam companies are a trucking company and several related businesses. In July 2000,
Putnam hired Mr. Streets to build and run the new brokerage business, Putnam Logistics. Putnam
gave Mr. Streets a great deal of autonomy and discretion in developing and running Putnam
Logistics.
Unlike the rest of the Putnam businesses, Putnam Logistics did not use trucks owned or
leased by Putnam. Instead, Putnam Logistics arranged shipments for a customer using third-party
truckers and trucking companies. After receiving confirmation of delivery, Putnam Logistics would
pay the third-party trucker. Putnam Logistics then would invoice the customer whose goods had
been transported, and the customer would pay Putnam Logistics for the work. Putnam Logistics
made a profit by charging the customer more than it paid the trucker to haul the load.
At the time Putnam Logistics was formed, its billing system used software that prevented it
from being integrated with the rest of the Putnam companies. Mr. Streets therefore was primarily
responsible for the paperwork, payment systems, and billing systems for Putnam Logistics. Ron
Kunkel, an employee of Putnam, provided some oversight over some aspects of Putnam Logistics’
billing. He was the only person authorized to write a check on behalf of Putnam Logistics. He also
reviewed the monthly sales report, drafted by Mr. Streets, that showed all of Putnam Logistics’
shipments, customers, receivables, and payables. In addition, Mr. Kunkel had access to review the
paper files related to the trip documents.
Although Mr. Streets could not write a Putnam check without Mr. Kunkel’s authorization,
Mr. Streets could issue payments in the form of T-Cheks. T-Cheks are a type of money order that
can be cashed at truck stops. Moreover, Mr. Streets had the discretion to decide whether to pay a
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trucker by T-Chek. He also had the discretion to decide whether to pay only the trucker’s advance
expenses or the entire trip by T-Chek. The only review Putnam conducted of the T-Cheks was done
by the accounting department, which merely reconciled a copy of the T-Chek Mr. Streets wrote
against the debits the T-Chek company made against Putnam’s account.
While Mr. Streets was managing Putnam Logistics, Mr. Kunkel noticed that some paper files
were missing documents or contained only handwritten notations. Mr. Kunkel frequently noticed
these types of discrepancies with particular carriers Mr. Streets used to deliver shipments for
Hankook Tires, an important customer of Putnam, and almost always when Mr. Streets had paid the
trucker by T-Chek. Mr. Kunkel was not particularly concerned about the problems, however,
because all of the documents in a file always matched with regard to the type of shipment, who
carried the shipment, and the amount that Mr. Streets said the carrier should be paid.
Mr. Streets’ authority to pay truckers by T-Chek and his control over Putnam Logistics’
billing and payment systems provided him with the vehicle to defraud Putnam. From August 2001
through March 2002, Mr. Streets paid truckers from a Putnam Logistics account but directed the
customers to pay himself, through a business named Howard Logistics. Mr. Streets accomplished
his scheme by placing in the Putnam Logistics files false invoices. The false invoices were to
Hankook Tires in care of Translogistics, a non-existent entity. The invoices Mr. Streets actually sent
to Hankook Tires for those same trips, however, directed Hankook Tires to pay Howard Logistics.
Mr. Streets then deposited into his own bank account the checks that Hankook Tires paid to Howard
Logistics.
After several months of these fraudulent transactions, Putnam Logistics’ accounts receivable
for the Translogistics/Hankook account began to increase. In January and February 2002, Putnam’s
vice president and Mr. Kunkel asked Mr. Streets for an explanation of the accounts-receivable
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problem. Mr. Streets told them that Translogistics was in financial trouble and had not been
remitting Hankook Tires’ payments to Putnam Logistics. He assured them, however, that another
company was planning to buy Translogistics and assume its liabilities. About a month later,
Mr. Streets told them that Translogistics had been sold and that he would re-bill the new company
for the amounts due to Putnam Logistics. Mr. Streets did not re-bill the new company, however,
until Putnam’s vice president insisted that he do it immediately. Mr. Streets then had new invoices
prepared, but he sent them to a nonexistent address.
In March and April 2002, Putnam purchased a new billing system and integrated Putnam
Logistics into the company-wide system. Mr. Streets was very reluctant to come onto the new billing
system, which provided Putnam with more oversight over Putnam Logistics. It also forced
Mr. Streets to input complete mailing addresses for each customer instead of the partial addresses
he had put in the system for Translogistics. The complete addresses he entered for Translogistics
in the new system were the false addresses that did not exist.
Mr. Streets resigned from Putnam Logistics in May 2002, shortly after Putnam completed
the billing change. After Mr. Streets left Putnam Logistics, Mr. Kunkel attempted to collect the
unpaid accounts and discovered that certain customers, including Hankook Tires, had been invoiced
to pay Howard Logistics instead of Putnam Logistics. He also discovered three checks from
“Translogistics Services,” at a false address, that partially repaid Putnam Logistics for some of the
trips. None of the checks or their paperwork named Mr. Streets, but the checks were written on his
account as shown by the account numbers pre-printed on the checks.
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Putnam contacted its attorney and the Zanesville Police about its discoveries. After doing
so, Putnam began receiving several letters from Mr. Streets’ alleged attorney, “J.S.D. Williard.”1
Those letters offered various and conflicting explanations for the Hankook Tires account and
included offers to pay unspecified outstanding bills. The author of the letters also threatened to sue
Putnam for various claims. The author sent letters to claims adjustor Kimberly Morin of the
Cincinnati Insurance Company, Putnam’s bonding company for employee malfeasance, after Putnam
made a claim with the company. Putnam also received letters that purported to be from Mathews
Company to Jim Streets at Putnam Logistics.2 Those letters claimed to need copies of outstanding
invoices related to discussions allegedly held with Mr. Streets the previous April. Mr. Streets later
admitted that he had written these letters.
In January 2007, FBI Special Agent Drew McGonaghy interviewed Mr. Streets at his home
in connection with his investigation of Putnam’s complaint against Mr. Streets. During that
interview, Mr. Streets stated that he had not taken any money that did not belong to him. Several
days later, Special Agent McGonaghy and Mr. Streets met to review records related to the case. On
that occasion, Mr. Streets informed Special Agent McGonaghy that he had to double broker the
Hankook Tires account after Putnam Logistics lost a load of tires that were shipped to Hankook
Tires. The Hankook Tires transportation manager did not know of any load intended for his
company that Putnam lost. Mr. Streets also explained that he had paid a “portion of the profits” to
Putnam Logistics in three checks totaling $13,720, and that he had made the payments under a
1
The letters use an address that Mr. Streets used for his business. J.S.D. Williard is the name
of Mr. Streets’ step-son, who is not a lawyer and who denied any knowledge of the letters.
2
Gretchen Mathews is defendant's step-daughter and lived at the address written on the letter
at the time the letter was sent. She knew nothing about the letter or Mathews Company.
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contract between himself and Putnam. Although he agreed to produce that contract, he never
actually produced it.
Special Agent McConaghy questioned Mr. Streets about a specific load delivery in August
2001, where Putnam Logistics paid Towns Transportation to deliver a load to Hankook Tires.
Instead of checking his records, Mr. Streets told the agents that he, and not Putnam Logistics, had
paid for the delivery. Mr. Streets admitted receiving payment from Hankook Tires for the trip, and
that he had deposited the check into his checking account.
The agents presented Mr. Streets with a similar situation, where a Howard Logistics invoice
was sent to MHF Metals, a Putnam Logistics customer. There, the payment went into Mr. Streets’
account but Putnam Logistics paid to transport the goods. Mr. Streets had no explanation for the
discrepancy, but he guessed it was a clerical mistake. Even after being shown T-Cheks from Putnam
Logistics paying the trucker for the MHF Metals load, Mr. Streets claimed that he had personally
paid all of the truckers in every case where Howard Logistics sent an invoice. Mr. Streets had
brought records with him, which he showed to the agents, but these records post-dated the time
period Mr. Streets was employed at Putnam Logistics. Mr. Streets agreed to gather records relevant
to the correct time period. He never did produce any records to the agents.
II. Mr. Streets’ Indictment and Trial
In April 2007, the grand jury indicted Mr. Streets on a charge of mail fraud, in violation of
18 U.S.C. § 1341, and on a charge of making one or more materially false statements, in violation
of 18 U.S.C. § 1001(a)(2). In support of the second count, making a materially false statement, the
government specified three separate false statements that it alleged supported the charge.
Mr. Streets’ trial commenced on April 28, 2008.
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An FBI analyst who had reviewed and summarized all of the documents relating to the 76
instances where Hankook Tires had paid Mr. Streets, acting as Howard Logistics, testified at trial.3
At trial, the analyst demonstrated generally how the brokerage system was supposed to work, how
Mr. Streets received payments from customers, and the total amounts of Mr. Streets’ fraud scheme.
He also testified about how the fraud scheme worked in the context of one particular mailing that
was charged in the indictment, which resulted in a Hankook Tires check to Howard Logistics in
April, 2002, in the amount of $11,292.58. The documents related to that trip and check were in
government exhibits 67 through 76. See Appx. Vol. VIII at 1503-04.
In his defense, Mr. Streets asserted that he, not Putnam Logistics, had paid for the deliveries.
Thus, according to Mr. Streets, he was entitled to the payments he received from Hankook Tires.
As support, Mr. Streets put forward numerous documents, although none of the documents were
originals. Many of the documents were not dated, other than dates that Mr. Streets had subsequently
added prior to trial. Only a few bills from truckers were included in the documents, and there were
no checks or T-Cheks that matched the amount, date, and trucker involved in any of the 76 charged
trips.
As additional evidence that Mr. Streets, not Putnam Logistics, had personally paid some of
the truckers for the Hankook Tires trips, Mr. Streets introduced checks drawn on his personal
account that were written to “SLC.” Mr. Streets testified that he knew from professional experience
3
The summary stated that: (1) the payments Mr. Streets received totaled $96,554.19; (2) each
of the 13 checks were deposited into Mr. Streets’ bank account; and (3) Mr. Streets had paid back
to Putnam Logistics $13,720 in three checks that were made to appear to come from the non-existent
Translogistics, but that had actually been drawn on Mr. Streets’ account. The FBI analyst also
reviewed and summarized all of the documents showing that Putnam Logistics was billed and paid
the truckers, at a minimum, $67,747 for those 76 trips.
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that SLC is a factoring company.4 He attempted to link his payments to SLC to some shipments for
which Hankook Tires paid him instead of Putnam Logistics, and he testified that his payments to
SLC were evidence that he, not Putnam Logistics, had paid for the trips. Mr. Streets later admitted
at trial, however, that SLC actually is the Student Loan Commission and that he had written the
checks to pay his own student loans.
The jury found Mr. Streets guilty on both counts. On the jury verdict form, the jury answered
interrogatories as to each of the three false statements alleged in Count Two and found that all three
statements violated the statute. The district court then held sentencing hearings in November 2008,
January 2009, and March 2009. It sentenced Mr. Streets to 41 months imprisonment on each count
to run concurrently and three years of supervised release. It also ordered Mr. Streets to pay
$212,145.60 in restitution. The written judgment on that sentence was filed March 25, 2009.
Mr. Streets timely appealed.
ANALYSIS
Mr. Streets presents six issues on appeal. He contends (1) that his counsel was ineffective;
(2) that there is insufficient evidence to support his convictions for mail fraud and making a false
statement; (3) that the district court erred in denying his motion for a mistrial related to juror
misconduct; (4) that the district court erred in applying certain sentencing enhancements to him; (5)
that the district court committed plain error when it failed to declare a mistrial because the jury did
not timely receive all of the exhibits; and (6) that the district court erred in including certain activities
in his relevant conduct for the purpose of sentencing. None of Mr. Streets’ contentions are well
taken. For the reasons given below, the judgment of the district court must be affirmed.
4
A factor or factoring company is a company that provides an advance to a trucker and then
collects from persons who hire the trucker payments that are made to the trucker.
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I. Ineffective Assistance of Counsel
For a court to reverse a conviction on the basis that it was the result of ineffective assistance
of counsel, “it must be shown that counsel’s performance was deficient and that the deficient
performance prejudiced the defense so as to render the trial unfair and the result unreliable.” Hall
v. Vasbinder, 563 F.3d 222, 237 (6th Cir. 2009). To establish prejudice, the defendant “must show
that there is a reasonable probability that, but for counsel’s unprofessional errors, the result of the
proceeding would have been different.” Id. (internal quotation marks omitted). Accordingly, the
court must be able to determine whether the actions taken by counsel were unprofessional or,
instead, the result of “sound strategic motive.” See United States v. Bradley, 400 F.3d 459, 462 (6th
Cir. 2005).
In “most direct appeals, however, the record contains scant information regarding the
preparation of [the defendant’s] trial counsel or his communications with [the defendant].” Id. at
461-62. This is because the trial record customarily is devoted to issues of guilt or innocence, not
the facts necessary to decide whether trial counsel was effective. See id. In the usual case, the
appellate court will “have no way of knowing whether a seemingly unusual or misguided action by
counsel had a sound strategic motive or was taken because the counsel’s alternatives were even
worse.” Id. (internal quotation marks omitted). Accordingly, a motion brought under 28 U.S.C.
§ 2255 “is preferable to direct appeal for deciding claims of ineffective-assistance.” Id. at 462(quoting Massaro v. United States, 538 U.S. 500, 504 (2003)). Unless “the record is adequate to
assess the merits of defendant’s allegations,” a court on direct appeal should decline to address the
defendant’s claim of ineffective assistance. Id.Mr. Streets’ claim of ineffective assistance of counsel relies on facts outside the record and
is not ripe for decision on this direct appeal. Mr. Streets’ complaints can be grouped into categories:
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his counsel failed to call witnesses that could have corroborated Mr. Streets’ allegations; his counsel
failed to properly investigate or prepare the case to the extent necessary to present an effective
defense; his counsel failed to gather additional evidence that would have corroborated Mr. Streets’
allegations; his counsel failed to adequately inquire of the venire during jury selection; his counsel
failed to challenge certain evidence presented by the government; and his counsel failed to request
a mistrial when it was discovered that the jury had deliberated without being in possession of all
exhibits. Each of these allegations supposes a fact that is not in the record or requires examination
of counsel’s strategy and motivation for choosing a particular course. See id. Because the Court
cannot tell from this record whether trial counsel was ineffective or following sound strategy, it
should “leave this issue to be decided in the first instance in post-conviction proceedings.” Id.II. Sufficiency of the Evidence
When a defendant attacks his conviction as being supported by insufficient evidence, “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) (emphasis in original). Viewing
the evidence in this light, a rational trier of fact could have found each essential element of the
offenses beyond a reasonable doubt. See id.A. Mail Fraud
Mail fraud under 18 U.S.C. § 1341 involves three elements: “(1) devising or intending to
devise a scheme to defraud (or to perform specified fraudulent acts); (2) involving a use of the mails;
and (3) for the purpose of executing the scheme or attempting to do so.” United States v. Crossley,
224 F.3d 847, 857 (6th Cir. 2000) (internal quotation marks omitted).
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This record contains evidence that Mr. Streets caused Putnam Logistics to pay the costs of
certain trips while Mr. Streets, doing business as Howard Logistics, received payment from the
customer for the same trip. The evidence of the fraud scheme included (1) more than $67,000 in
payments by Putnam Logistics for the 76 trips at issue; (2) invoices that Mr. Streets mailed to
Hankook Tires directing it to pay Howard Logistics instead of Putnam Logistics for those same trips;
(3) evidence of dummy-accounts-receivable entries on Putnam's books to cover up the fraud;
(4) evidence that Mr. Streets deposited Hankook Tires’ checks in his personal account; and
(5) evidence that Mr. Streets wrote letters and undertook other sloppy activities after-the-fact in an
effort to cover his tracks. This evidence alone, taken in the light most favorable to the government,
is sufficient to establish beyond a reasonable doubt the three elements of mail fraud. See id.B. Making False Statements
Making a false statement under 18 U.S.C. § 1001(a)(2) involves five elements: “(1) the
making of a statement; (2) the falsity of such statement; (3) knowledge of the falsity of such
statement; (4) relevance of such statement to the functioning of a federal department or agency; and
(5) that the false statement was material.” United States v. Hixon, 987 F.2d 1261, 1266 (6th Cir.
1993). The indictment identifies three separate false statements, and the jury (on special
interrogatories) found Mr. Streets guilty with regard to each of the three statements.
In the first statement, Mr. Streets claimed to have a contract with Putnam to continue his own
business as a broker. Mr. Streets contends that this statement was not material. Materiality under
section 1001 is a question of law. United States v. Chandler, 752 F.2d 1148, 1150 (6th Cir. 1985).
A statement is material when it has the natural tendency to influence, even if it did not actually
influence the government agent. Id. at 1151. In fact, a statement can meet the materiality
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requirement even if the government agent knows that the statement is false. United States v.
LeMaster, 54 F.3d 1224, 1230-31 (6th Cir. 1995).
This statement was material. See id.; Chandler, 752 F.2d at 1151. The government
introduced evidence at trial that Putnam had no knowledge that Mr. Streets was doing business as
Howard Logistics while he was starting and running Putnam Logistics. It further put forward
evidence that Mr. Streets never would have been hired by Putnam if Putnam had known that he was
running a competing business. Mr. Streets received the Hankook Tires’ payments in the name of
Howard Logistics; at trial he stated he was co-brokering some of the loads with Putnam.
Accordingly, the existence of such a broker’s contract would tend to show that Putnam was aware
that Streets operated a similar logistics business and that the company allowed him to broker loads
for himself, despite working for Putnam Logistics. Mr. Streets’ statement that he had such a contract
would tend to influence the investigation into whether Mr. Streets had an intent to defraud his
employer. The statement accordingly was material to the investigation. See id.When the FBI confronted him with documents for a specific trip chosen at random, “Trip
2123,” Mr. Streets made his second false statement, which was that he, not Putnam Logistics, had
paid the trucker for the loan invoiced on Putnam invoice #1097 and Howard Logistics invoice
#1047. Mr. Streets then followed up with his third false statement when he stated that he himself
had paid all of the independent drivers for the loads that were brokered through Howard Logistics
and that he had records to show it. Mr. Streets contends that there was insufficient evidence from
which the jury could conclude that he made either of these statements knowingly and willfully. His
contention is without merit.
Mr. Streets made both of these statements in a second FBI interview that was scheduled to
give Mr. Streets an opportunity to present his records to support his version of events and to review
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specific Putnam records. The evidence was such that a jury could conclude, based on the
circumstances and timing of the interview, that Mr. Streets was not merely mistaken when he stated
without hesitation or qualification that he had paid for a particular trip and that he had paid for all
of the trips. Mr. Streets declined to qualify his statement even when given the opportunity to review
the records and evidence against him. He also failed to produce records that supported his
statements, despite his promise to do so. The lack of such records supports the jury’s conclusion that
Mr. Streets was not merely mistaken, but he in fact had no reason to believe that he paid the truckers.
Accordingly, there was sufficient evidence from which a jury could conclude that these two
statements violated section 1001.
The jury needed to properly convict Mr. Streets of making only one false statement to uphold
the conviction on this count. See United States v. Dedman, 527 F.3d 577, 598 (6th Cir. 2008)
(“[W]e uphold a conviction where there was sufficient evidence for at least one of the alleged false
statements.”). Here, however, there was sufficient evidence from which the jury could conclude that
Mr. Streets made all three statements. Accordingly, we must affirm Mr. Streets’ conviction under
section 1001.
III. Juror Misconduct
During the second day of trial, government counsel informed the courtroom deputy, Jennifer
Kacsor, of two possible incidents of juror misconduct that had been brought to counsel’s attention.
First, Mike Gipson, a court security officer, had overhead a juror talking on the phone and
complaining that she was chosen as a juror. Second, Gretchen Mathews, a government witness and
Mr. Streets’ step-daughter, heard a juror, again speaking on a cell phone, say that “the defense was
doing horrible.” The trial court brought the jurors into the courtroom one at a time, but did not
inform them why. Mr. Gipson and Ms. Mathews were in the courtroom when each juror was
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brought in. Separately, they each identified juror number eight as the juror involved in both
incidents.
Defense counsel moved for a mistrial once Mr. Gipson and Ms. Mathews testified under oath
about what they had observed. In the alternative, defense counsel asked the court to question the
juror involved. Government counsel opposed the motion for a mistrial, claiming that the court did
not have any indication that the other jurors had overheard or were involved in the incidents.
Government counsel suggested that the court excuse the juror and seat an alternate as the most
appropriate remedy.
When questioned under oath by the court, juror number eight acknowledged the first incident,
when she complained of being chosen as a juror. She denied making any substantive comments
about the case, however, and she stated she had not formed an opinion as to Mr. Streets’ guilt or
innocence. She also denied that she had discussed the trial with anyone. She further denied listening
to the proceedings while in the jury room, after the court heard from Mr. Gipson that he had found
the juror alone near the door to the courtroom when he went to get her to testify. After hearing the
testimony, the district court removed the juror and seated an alternate, at the request of both parties.
Neither party asked for any further relief, including a declaration of a mistrial, at that time. Finally,
the court questioned each remaining juror individually. All of the remaining jurors denied
overhearing any other juror discussing the case at any time or discussing the case with anyone else.
Each juror also denied having formed an opinion regarding Mr. Streets’ guilt or innocence.
The district court’s decision not to grant a mistrial is reviewed under the abuse of discretion
standard. United States v. Wheaton, 517 F.3d 350, 361 (6th Cir. 2008). “We apply the
abuse-of-discretion standard in jury-misconduct cases precisely because the trial judge is in the best
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position to determine the nature of the alleged jury misconduct, and to determine appropriate
remedies for any demonstrated misconduct.” Id. (alterations and internal quotation marks omitted).
“The starting point for discussion of trial court treatment of extraneous contact with a jury
is Remmer v. United States, 347 U.S. 227 (1954).” White v. Smith, 984 F.2d 163, 165 (6th Cir.
1993). Under Remmer, if the communication to a juror comes from an outsider and suggests
bribery, the district court must hold a hearing to determine whether the defendant was prejudiced by
the statement. See id. at 166. Only such extreme communications are “deemed presumptively
prejudicial.” Id. (quoting Remmer, 347 U.S. at 229-30). Indeed, not all communications with jurors
even “warrant a hearing for a determination of potential bias.” Id. A brief communication between
a juror and a judge, for example, may not require an evidentiary hearing, let alone a presumption of
prejudice. See id.Here, there was no indication that an outsider communicated with a juror for the purpose of
bribing the juror. Instead, a witness for the government overhead a juror talking on a phone and
telling the person on the other end of the line that the defense was doing a terrible job. Although the
situation did not fall squarely within Remmer, the district court nevertheless conducted a hearing
with the consent and involvement of both parties to determine whether any misconduct had occurred.
See id. At that hearing, the juror denied making the statement or being in the area where the
statement was overheard. She further denied having formed an opinion about the case. The district
court noted that the juror’s phone call and discussion of the trial had not been clearly proven, but the
district court nevertheless excused her from jury service and seated an alternate juror. Both parties
consented to this solution. The district court then questioned individually the other jurors, and each
of them denied hearing the juror’s discussion of the case. The individual who had witnessed the
phone call also stated that no one else was around to overhear the juror’s statements. The district
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court concluded that the rest of the jury was not tainted and moved forward with the trial. See id.By dismissing the only juror who might have been subject to extraneous prejudicial information, the
district court eliminated any possible influence on the other jurors and negated any possible prejudice
to Mr. Streets. Id. The district court did not abuse its discretion when it did not grant a mistrial for
possible juror misconduct. See Wheaton, 517 F.3d at 361.
IV. The Late Delivery of Two Government Exhibits to the Jury
Closing arguments took place on the morning of May 6, 2008. During the government’s
closing, counsel referenced numerous exhibits, including the GX 77 series and GX 79.13. These
exhibits, however, were not delivered to the jury when they left for deliberations around noon.
Government counsel realized the error and informed the court and defense counsel, and the exhibits
were delivered to the jury before it returned its verdict.
Although the missing exhibits were delivered to the jury prior to its returning a verdict, it is
unclear from the record how much time the jury had the exhibits before they returned a verdict. The
record does not indicate when the court sent the exhibits to the jury. The court held a conference
with all parties at 2:33 pm the same day regarding the exhibits. At that time, all parties knew the jury
had notified chambers that it had reached a verdict. In total, the jury deliberated less than three
hours. The district court made a record of the matter, and defense counsel did not move for any
relief regarding the exhibits or the timing of their delivery to the jury. The court then brought the
jury into the courtroom for return of the verdict.
Mr. Streets argues that the district court erred when it failed to declare a mistrial or take other
action when it discovered that the jury had not promptly received all of the exhibits admitted at trial.
Because Mr. Streets first raises this argument on appeal, we apply the plain error standard. See
United States v. Baker, 458 F.3d 513, 517 (6th Cir. 2006). To establish plain error, a defendant must
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show (1) that an error occurred in the district court; (2) that the error was obvious or clear; (3) that
the error affected defendant’s substantial rights; and (4) that this error seriously affected “the
fairness, integrity or public reputation of the judicial proceedings.” United States v. Abboud, 438
F.3d 554, 583 (6th Cir. 2006) (quoting United States v. Wright, 343 F.3d 849, 861 (6th Cir. 2003)).
During the trial, the government used the GX 77 series of exhibits as part of its proof of
Mr. Streets’ fraud. The exhibits were copies of three checks that appeared to be from Translogistics,
a non-existent company at a non-existent address, but were really disguised payments from
Mr. Streets’ personal checking account. During closing arguments, the government used those same
exhibits and inadvertently failed to return them to the box with the other exhibits delivered to the
jury. As soon as the government realized the mistake, it notified the court and defense counsel. The
court delivered the exhibits to the jury before the jury returned its verdict. Mr. Streets’ counsel did
not move for a mistrial or request other relief related to the untimely delivery of the exhibits.
Mr. Streets contends that the absence of the exhibits affected his substantial rights and
constituted plain error because the exhibits went to the core of the issue of whether he had made a
false statement. Specifically, he contends that the exhibit shows that he did pay for the load invoiced
on Putnam invoice #1097 and Howard Logistics invoice #1047. As an initial matter, Mr. Streets
offers no authority in support of his contention that the district court plainly erred by delivering the
missing exhibits to the jury without taking additional corrective action. The record reflects that the
exhibits were given to the jury as soon as they were discovered and before the jury returned its
verdict. Moreover, the jury was able to consider, observe, and evaluate the exhibits in question
during the testimony of Ron Kunkel and during the government’s closing argument. Each page of
the exhibit was displayed on the overhead projector and discussed during the trial. Accordingly, the
Court should be satisfied on this record that the error in question did not have any influencing effect
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upon the jury.5 Accordingly, it was not plain error to deliver the exhibits to the jury without
additional remedy. See id.Additionally, the testimony at trial established that Mr. Streets’ repayment to Putnam
Logistics in those three checks was less than Putnam Logistics paid for the trips related to the checks.
The FBI analyst testified at trial that the amount received by Putnam Logistics in those three checks,
$13,720, was $11,210 less than Putnam Logistics had invoiced for those trips. The exhibits did not,
on their own, establish that Mr. Streets had not made a false statement when he stated that he paid
the trucker for those trips. Moreover, as discussed above, the jury needed to find Mr. Streets guilty
of only one of the false statements to properly convict him of Count II. See Dedman, 527 F.3d at
598. Accordingly, Mr. Streets has not established that the mistake in late delivering the exhibits was
a plain error that affected his substantial rights or seriously affected “the fairness, integrity or public
reputation of the judicial proceedings.” See Abboud, 438 F.3d at 583.
V. Sentencing Enhancements for Abuse of a Position of Trust and Obstruction of Justice
A. Abuse of a Position of Trust
On appeal, the Court reviews de novo the district court’s determination that a defendant
“occupied a position of trust for the purpose of the Sentencing Guidelines.” United States v. May,
568 F.3d 597, 602 (6th Cir. 2009) (quotation omitted). Under section 3B1.3, the offense level
increases by two points if the defendant abused a position of public or private trust, or used a special
skill, in a manner that significantly facilitated the commission or concealment of the offense.
“Section 3B1.3 of the Guidelines instructs that the term ‘public or private trust’ is ‘characterized by
5
Courts have found any error to be harmless when exhibits that had not been admitted were
delivered to the jury. See United States v. Bentley, 489 F.3d 360, 363 (D.C. Cir. 2007); United States
v. Bishop, 492 F.2d 1361, 1366 (8th Cir. 1974).
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professional or managerial discretion.’” Id. at 602-03 (quoting U.S.S.G. § 3B1.3 n.1). Individuals
in a position of professional or managerial discretion “are subject to significantly less supervision
than employees whose responsibilities are primarily non-discretionary in nature.” Id. at 603
(quotation omitted). A district court should apply the enhancement only “if the position of trust
contributed in some significant way to facilitating the commission or concealment of the offense.”
Id. (alteration and internal quotation marks omitted). Although “the enhancement would be proper
as to a bank executive’s fraudulent loan scheme, it would not be appropriate in the case of an
embezzlement or theft by an ordinary bank teller.” Id. (internal quotation marks omitted).
Additionally, “the level of discretion accorded an employee is to be the decisive factor in
determining whether his position was one that can be characterized as a trust position.” Id.
(alteration and quotation omitted). The term trust as used in the Guidelines is a term of art, not the
ordinary dictionary concept of trust. Id.
The district court properly concluded that Mr. Streets had abused a position of trust.
Mr. Streets’ duties and position at Putnam Logistics gave him wide managerial discretion, and he
used that discretion to facilitate his fraud scheme. See id. He was subject to significantly less
supervision than a standard employee. See id. Mr. Streets was brought to Putnam Logistics to start
a logistics business from the ground up, and he was hired because he appeared to have substantial
experience in operating a logistics business. Indeed, Putnam hired and placed Mr. Streets in his
position because of Mr. Streets’ presumed better judgment in developing and managing Putnam
Logistics. In his position, he held operational discretion to set up virtually every aspect of the
business, including developing and maintaining the methods of record-keeping that would be used
to double check his work. Moreover, he had independent authority to locate and select customers,
trips, and truckers; to invoice customers; and to pay truckers. He even held discretion to determine
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whether to pay truckers by check, which involved other departments at Putnam, or to pay by T-Chek,
which required only his own authorization. Mr. Streets used the discretion and independence of his
position to direct customers to pay him instead of Putnam and to have Putnam Logistics pay the
truckers for those same trips by T-Chek, a method of payment that involved no oversight and was
difficult to trace. Furthermore, he used his position to lay false trails in the paperwork, including
false invoices, false addresses of alleged customers, and partial payments that he made to appear to
come from false sources. Mr. Streets’ actions are more akin to an attorney stealing his client’s funds
or a “bank executive’s fraudulent loan scheme” than to “theft by an ordinary bank teller or hotel
clerk.” See U.S.S.G. § 3B1.3 n.1. Because Mr. Streets used his managerial discretion and
independence to defraud his employer, the district court did not err in concluding that Mr. Streets
occupied and abused a position of trust. See id.; May, 568 F.3d at 603.
Mr. Streets’ reliance on United States v. Tatum, 518 F.3d 369 (6th Cir. 2008), does not
change this outcome. Tatum involved a simple embezzlement by an office manager. Id. at 370.
Although Ms. Tatum’s duties included preparing checks to pay company bills, she had no authority
to decide whether or not to issue a check. Id. Indeed, she did not even have authority to sign a check
once the company decided the check should be issued. Id. Unlike Mr. Streets, Ms. Tatum was not
given any discretion to use her judgment over the finances of the company, to select customers, to
set the rate at which clients would be charged, to set the rate at which services would be paid, or to
authorize payments. See id. at 373. Additionally, she was closely supervised. See id. Accordingly,
Ms. Tatum’s employer did not “intentionally make[] himself or itself vulnerable” to her or cede to
her “presumed better judgment” by giving her “control over [its] affairs.” See id. Putnam, by
contrast, made itself vulnerable to Mr. Streets by ceding to his judgment control over its affairs.
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Accordingly, the district court properly assessed to Mr. Streets two points for abuse of a position of
trust. See id.B. Obstruction of Justice
A deferential standard of review is appropriate in reviewing applications of the sentencing
enhancement for obstruction of justice. United States v. Jackson-Randolph, 282 F.3d 369, 389 (6th
Cir. 2002). Accordingly, “the clear error standard is . . . appropriate for reviewing sentencing
decisions under § 3C1.1 where the sole issue before the district court is a fact-bound application of
the guideline provisions.” Id. at 390. This adjustment applies if the defendant obstructed “the
investigation, prosecution, or sentencing” of the offense of his conviction. U.S.S.G. § 3C1.1 n.1.
Although the “provision is not intended to punish a defendant for the exercise of a constitutional
right,” such as a defendant’s general “denial of guilt,” it is appropriately applied to “a denial of guilt
under oath that constitutes perjury.” U.S.S.G. § 3C1.1 n.2 & n.4(b). “In applying this provision in
respect to alleged false testimony or statements by the defendant, the court should be cognizant that
inaccurate testimony or statements sometimes may result from confusion, mistake, or faulty memory
and, thus, not all inaccurate testimony or statements necessarily reflect a willful attempt to obstruct
justice.” U.S.S.G. § 3C1.1 n.2.
The presentence investigation report recommended applying to Mr. Streets the two-point
enhancement for obstruction of justice based on his perjury and his producing false, altered or
counterfeit documents during the trial. The district court applied the enhancement only for
Mr. Streets’ perjury, based on his statement at trial that SLC is a factoring business and that his four
checks in the total amount of $3,500 to SLC were payments for truckers. In support of his assertion
that SLC is a factor, Mr. Streets pointed to three bills of lading with the handwritten notation SLC.
By contrast, other instances of his paying a factor involved invoices that had printed clearly on them
U.S. v. Streets 22
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a factor stamp. The invoice related to the three bills of lading had on it neither a factor stamp nor
the notation SLC. Mr. Streets did not provide any documents in support of the fourth SLC check,
which was dated six months after Mr. Streets’ employment with Putnam Logistics ended. On cross-
examination, government counsel confronted Mr. Streets with documentation from Citibank of
South Dakota, which proved that the checks Mr. Streets wrote to SLC were made to the Student
Loan Commission and not to a factoring company. Mr. Streets admitted that he recognized the
checks made to SLC to be student loan payments actually made to the Student Loan Commission.
He then admitted that the checks he wrote to SLC were not to pay a trucker for a trip. The district
court did not clearly err when it concluded that these statements amounted to perjury and applied the
enhancement under section 3C1.1. See Jackson-Randolph, 282 F.3d at 389; U.S.S.G. § 3C1.1 n.2
& n.4(b).
Mr. Streets’ contention that his statements were merely inaccurate or the result of confusion,
mistake, or faulty memory is unavailing. The district court acknowledged that mere mistakes and
confusion do not necessarily reflect a willful attempt to obstruct justice, but it nevertheless concluded
that Mr. Streets had obstructed justice by committing perjury. Mr. Streets testified on direct
examination that he was familiar with factor companies in the trucking business in general and with
a factoring company called SLC in particular. His affirmative statement that SLC is a factor supports
the conclusion that his statements were not merely mistakes of recollection, as does the fact that no
such factor company exists. This is shown, too, by the fact that all other factoring companies at issue
were clearly identified on an invoice by a rubber stamp with their name, position as a factor, and
directions for payment, not by a handwritten notation of an acronym on a bill of lading.
Additionally, the checks to SLC were written on his personal account, unlike other checks he paid
to truckers that were written on the Howard Logistics checking account. And at least one of the
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checks stated on its memorandum line that the check was for “Principal Only,” which indicates it
is a loan payment and not a payment to a trucker. From these facts, the district court did not clearly
err when it concluded that Mr. Streets’ statements were perjury and a deliberate attempt to mislead
the jury and convince them that Mr. Streets had paid the truckers when he had not done so.
VI. The District Court’s Determination of Relevant Conduct and Restitution
The district court held three sentencing hearings over the course of four months. The
government put forth Ron Kunkel, Putnam Logistics’ financial officer, as well as a spread sheet
summary and two notebooks of documents, as evidence of relevant conduct and restitution amounts.
The government originally claimed $221,919.27 in restitution, but later reduced the figure to
$212,145.60 to avoid a potential double-counting issue. The court treated as relevant conduct some
incidents not presented at trial. The relevant conduct included additional payments by Hankook
Tires to Mr. Streets, similar fraud with other customers besides Hankook Tires, T-Cheks and loading
fees paid to truckers for which Putnam Logistics did not have any paperwork, payments Putnam
Logistics made to Mr. Streets for a tractor trailer leased by him, and checks Mr. Streets wrote to
himself using the alias James Callahan, his first name and wife’s last name.
In determining Mr. Streets’ total offense level, the district court found the total loss
attributable to Mr. Streets to be $221,745.60. That finding resulted in adding twelve levels to
Mr. Streets’ base offense level. We review a district court’s findings of fact as to relevant conduct,
loss, and restitution for clear error. See United States v. Rothwell, 387 F.3d 579, 582 (6th Cir. 2004);
United States v. Guthrie, 144 F.3d 1006, 1011 (6th Cir. 1998). “[W]hether those facts as determined
by the district court warrant the application of a particular guideline provision is purely a legal
question and is reviewed de novo by this court.” Rothwell, 387 F.3d at 582. Additionally, we review
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de novo the district court’s interpretation of the Sentencing Guidelines. United States v. Williams,
411 F.3d 675, 677 (6th Cir. 2005).
A. The Categories of Loss the District Court Included in Mr. Streets’ Relevant
Conduct
Mr. Streets first contends that the district court impermissibly attributed to him losses that
were not found by the jury at trial. He contends that this inclusion of losses violated his
constitutional rights. His contention is without merit. See, e.g., United States v. White, 551 F.3d
381, 385 (6th Cir. 2008) (en banc). As long as the defendant “receives a sentence at or below the
statutory ceiling set by the jury’s verdict,” the district court does not abridge the defendant’s rights
by looking to other facts when “selecting a sentence within that statutory range.” Id.Mr. Streets next contends that certain items of uncharged relevant conduct relate to
transactions outside the scope of the conduct established during trial. He contends that the district
court impermissibly considered them as part of his relevant conduct. He objects that certain items
were outside of the time frame established at trial and that other items were related to customers
other than Hankook Tires, the customer discussed at trial. This contention, too, is without merit.
Conduct may be considered as part of the relevant conduct even if it is outside the specific
charge in the indictment or does not constitute a federal offense. United States v. Klups, 514 F.3d
532, 537-38 (6th Cir. 2008). Under the Federal Sentencing Guidelines, relevant conduct includes
“all acts and omissions [committed by the defendant] that were part of the same course of conduct
or common scheme or plan as the offense of conviction.” U.S.S.G. § 1B1.3(a)(2). “For two or more
offenses to constitute part of a common scheme or plan, they must be substantially connected to each
other by at least one common factor, such as common victims, common accomplices, common
purpose, or similar modus operandi.” U.S.S.G. § lB1.3 cmt. 9(A). Furthermore, “[o]ffenses that do
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not qualify as part of a common scheme or plan may nonetheless qualify as part of the same course
of conduct if they are sufficiently connected or related to each other as to warrant the conclusion that
they are part of a single episode, spree, or ongoing series of offenses.” U.S.S.G. § lB1.3 cmt. 9(B).
In determining whether offenses constitute the same course of conduct, the court may consider “the
degree of similarity of the offenses, the regularity (repetitions) of the offenses, and the time interval
between the offenses.” Id.
Mr. Streets objects to the inclusion in his relevant conduct of amounts paid to non-Hankook
Tires customers, amounts paid to cover services in connection with Hankook Tires shipments but
for which there was no Putnam Logistics paperwork, payments Mr. Streets made by T-Chek to
truckers for services unrelated to any Putnam Logistics load, and payments Mr. Streets made to
himself under an alias as a commission for shipments he actually credited to Putnam Logistics.
These payments were carried out by the same mechanism as the fraud involving Hankook Tires. For
each, Mr. Streets used his position at Putnam Logistics to cause Putnam Logistics to pay for services
while he reaped the rewards. In some instances, he used bills from Howard Logistics to the customer
to cover his tracks. In others, he used Putnam Logistics’ T-Checks and left no paper trail whatsoever
at Putnam Logistics. In each case, however, the victim was the same and the basic methods and time
frames were the same. The conduct therefore was substantially connected by at least several
common factors, including the same victim, purpose, and modus operandi. See U.S.S.G. § lB1.3
cmt. 9(A). Additionally, the offenses constituted the same course of conduct because of the degree
of similarity of the offenses and the time interval between the offenses. U.S.S.G. § lB1.3 cmt. 9(B).
The district court did not err in including these offenses in Mr. Streets’ relevant conduct. See id.;
Klups, 514 F.3d at 537-38.
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B. Determination of the Total Amount of Loss for Purposes of Relevant Conduct
or Restitution
On appeal, Mr. Streets challenges for the first time some of the particular amounts the district
court included in its total loss calculation. Although he filed objections to the presentence
investigation report regarding the categories of losses included in relevant conduct, he did not
specifically challenge at any stage of sentencing the amounts, the trips included or other items
constituting the total for each category of loss. Because Mr. Streets is raising this factual challenge
for the first time on appeal, the Court should review his objections only for plain error. See Baker,
458 F.3d at 517.
Here, Mr. Streets simply asserts, without support, that the government has double-counted
certain amounts and that the information lacked sufficient indicia of reliability to support the
probable accuracy of it for the purposes of relevant conduct. This contention is without merit. The
presentence investigation report and the government’s sentencing memoranda detailed the loss
amounts. For Mr. Streets to challenge the detailed factual allegations in the presentence
investigation report, he was required to do more than just object to them. United States v. Duckro,
466 F.3d 438, 449 (6th Cir. 2006). Indeed, he must produce evidence to call those facts into
question. Id. “When a defendant fails to produce any evidence to contradict the facts set forth in
the PSR, a district court is entitled to rely on those facts when sentencing the defendant.” United
States v. Geerken, 506 F.3d 461, 467 (6th Cir. 2007). Even now, Mr. Streets does not produce
evidence to contradict the district court’s conclusions. Instead, he merely asserts on appeal that the
numbers are incorrect and unsupported. Accordingly, the district court did not clearly err in
determining the particular amounts of loss attributable to Mr. Streets. See id.U.S. v. Streets 27
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CONCLUSION
For the foregoing reasons, the Court AFFIRMS Mr. Streets’ conviction and sentence.