United States v. Emily Protsman ( 2016 )

United States Court of Appeals
For the Eighth Circuit
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No. 16-1432
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United States of America
lllllllllllllllllllll Plaintiff - Appellee
v.
Emily Protsman
lllllllllllllllllllll Defendant - Appellant
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Appeal from United States District Court
for the Northern District of Iowa - Cedar Rapids
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Submitted: June 13, 2016
Filed: July 21, 2016
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Before RILEY, Chief Judge, MURPHY and SHEPHERD, Circuit Judges.
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SHEPHERD, Circuit Judge.
Emily Protsman appeals the district court’s1 revocation of her term of
supervised release. She argues that the district court erred in finding hearsay evidence
admissible under Federal Rule of Criminal Procedure 32.1(b)(2)(C), and in finding
1
The Honorable Linda R. Reade, Chief Judge, United States District Court for
the Northern District of Iowa.
sufficient evidence to establish that she violated the terms of her supervised release.
We have jurisdiction under 28 U.S.C. § 1291 and affirm.
I.
Protsman began a five-year term of supervised release in June 2014 after
serving a prison sentence for committing disaster benefits fraud. In December 2015,
the United States Probation Office filed a petition to revoke Protsman’s term of
supervised release. A first and second supplemental petition followed. The second
supplemental petition, filed in January 2016, alleged one Grade B violation, a new law
violation of wire fraud, and four Grade C violations, including failure to truthfully
answer inquiries and failure to notify the Probation Office of a change in employment.
Protsman contested each allegation, and a hearing was held in January 2016.
At the hearing, Protsman’s probation officer, Chris Pauley, testified that the
Iowa City Police Department informed him that the Sierra Vista, Arizona Police
Department was investigating a potential wire fraud involving Protsman. Protsman’s
counsel objected to the testimony as violating Protsman’s right to confront and cross-
examine witnesses under Fed. R. Crim. P. 32.1, and the objection was taken under
advisement. Pauley testified that Sunny Allred had contacted the Sierra Vista Police
Department reporting that someone had fraudulently withdrawn money from her bank
account with Navy Federal Credit Union. Investigation revealed that $4,000 from
Allred’s account was transferred to Protsman’s bank account with Veridian Credit
Union. Pauley testified that he questioned Protsman and Protsman claimed to have
no knowledge of the $4,000 transfer. Pauley also stated that he had asked Protsman
about a $1,300 check endorsed by Protsman and deposited into her account, but that
she denied any knowledge of the deposit.
Next, Trina Becker, the manager of the Loss Prevention Department at Veridian
Credit Union, testified. Protsman objected once at the beginning of Becker’s
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testimony, citing only Fed. R. Crim. P. 32.1. Becker went on to testify that Protsman
had endorsed and deposited the $1,300 check into Protsman’s account at Veridian
Credit Union. Further, Becker testified that the Veridian Credit Union had received
a document from Navy Federal Credit Union stating that Navy Federal Credit Union
believed a $4,000 transfer to Protsman’s account was fraudulent and requesting the
money’s return. This form, along with a number of Veridian Credit Union documents,
including documents showing that Protsman endorsed and deposited the $1,300 check,
acknowledged the bank’s two-day hold policy, and made withdrawals after the two-
day period, were entered into evidence, subject to Protsman’s objection to the Navy
Federal Credit Union form. Becker also testified that Protsman made several ATM
withdrawals from her account after the $1,300 deposit. Becker explained that she had
questioned Protsman about the $4,000 transfer, and that Protsman stated that it was
for work she had done with a corporate moving business, relocating employees.
Becker recounted that when she asked Protsman if this work had been for Sunny
Allred, the owner of the account from which the money was wired, Protsman replied
that she was sure that she had in fact performed this work for Allred, but would need
to find her documentation. She further stated that Protsman claimed to be the victim
of hacking. Becker explained that another wire transfer had been made to Protsman’s
account a few days later from a popcorn company, and that when Becker asked the
owner of the popcorn company about the transfer, the owner explained that it was
intended for a shipping company and not Protsman.
Additionally, Pauley testified that Protsman’s account received deposits from
Brown’s Floor Care in Iowa City, Iowa. The checks were legitimate and endorsed by
Protsman. Protsman never reported to the probation office that she was employed by
Brown’s Floor Care.
The district court concluded that Pauley’s testimony about the investigation and
the Navy Federal Credit Union form was admissible. The district court reasoned that
the individuals with whom Pauley spoke were in Arizona, so it would be
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impracticable to present live testimony from them and that the evidence presented was
reliable. Regarding the Navy Federal Credit Union form, the district court reasoned
that it was “routine in the industry,” relied on by the relevant credit unions, and
Becker was available for cross-examination. The district court found that Protsman’s
counsel had only objected to one question asked of Becker, which was never
answered, so Becker’s testimony was admissible as well.
Based on this record, the district court found by a preponderance of evidence
that Protsman had committed the new law violation of wire fraud, failed to truthfully
answer inquiries, and failed to notify her probation officer of an employment change.
The violations yielded a guideline range of 18 to 24 months imprisonment. Based on
these three violations and six prior violations, the district court sentenced Protsman
to 18 months imprisonment, to be followed by a three-year term of supervised release.
II.
On appeal, Protsman argues that the district court erred in admitting Pauley’s
testimony, the Navy Federal Credit Union form, and Becker’s testimony, in violation
of Fed. R. Crim. P. 32.1(b)(2)(C), because Protsman was not given an opportunity to
cross-examine the hearsay declarants. Protsman also alleges that the district court
erred in finding sufficient evidence to establish the three violations.
A.
We review claimed violations of Fed. R. Crim. P. 32.1(b)(2)(C) for an abuse of
discretion. United States v. Martin, 382 F.3d 840, 844 (8th Cir. 2004). In probation-
revocation proceedings, the court “must balance the probationer’s right to confront a
witness against the grounds asserted by the government for not requiring
confrontation.” United States v. Bell, 785 F.2d 640, 642 (8th Cir. 1986). “First, the
court should assess the explanation the government offers of why confrontation is
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undesirable or impractical.” Id. at 643. For instance, the court will consider the
expense and difficulty incurred for the travel of out-of-state witnesses. Id. at 644; see
United States v. Harrison, 809 F.3d 420, 423 (8th Cir. 2015) (“It is apparent from the
record, however, that the live testimony of these [Virginia] witnesses would have been
unreasonably burdensome, impractical, and costly given the considerable distance
they would have been required to travel.”). Second, the court must consider “the
reliability of the evidence which the government offers in place of live testimony.”
Bell, 785 F.3d at 643. “Where . . . the government neither shows that presenting live
testimony would be unreasonably burdensome nor offers hearsay evidence that bears
indicia of reliability, the probationer is entitled to confrontation.” Id.
Protsman argues that the court erred in admitting Pauley’s testimony regarding
the investigation in Arizona. The detective and witness Pauley spoke with were in
Arizona, which the district court reasonably recognized as making confrontation
impracticable. See Harrison, 809 F.3d at 423. Protsman argues that the witnesses
should have been made available by telephone, but this court has yet to require this
of the district court. Further, the information Pauley testified to learning from the
detective and Allred is that $4,000 had been wired to Protsman’s account, without
Allred’s permission. Pauley confirmed the transfer of the $4,000 to Protsman’s
account, and thus provided corroboration. The district court “weighed the
practicalities of the situation and reliability,” and found the testimony admissible.
Given the district court’s careful weighing of the Fed. R. Crim P. 32.1(b)(2)(C)
factors, we find that it did not abuse its discretion in admitting Pauley’s testimony
with respect to the Arizona investigation.
Protsman also contends that the court erred in admitting the record from Navy
Federal Credit Union to Veridian Credit Union that identified the $4,000 transfer to
Protsman’s account as likely fraudulent, arguing that it is unreliable because it does
not indicate why the $4,000 transfer was identified as likely fraudulent. However, the
district court noted that the Navy Federal Credit Union was located in Virginia, that
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the type of document offered was routine in the industry, maintained in the normal
course of business, and that Ms. Becker was available for cross-examination. The
court concluded that it was “extremely reliable.” The district court did not err in
determining that, under the Fed. R. Crim P. 32.1(b)(2)(C) balancing test outlined in
Bell, the form was admissible.
Finally, Protsman challenges the district court’s decision to admit Becker’s
testimony that the owner of the popcorn company had told her that the funds
transferred from the company’s account to Protsman’s account were intended for a
shipping company and that the owner had not previously heard of Protsman.
However, the district court found that the objection was not preserved because
Protsman only objected to one question addressed to Becker, and Becker did not
answer that question. We reject Protsman’s argument on this issue by concluding that
even if the objection was preserved, Fed. R. Crim P. 32.1(b)(2)(C)’s balancing test
supports admitting the evidence, because the company is located in Texas, and Becker
provided the corresponding incoming wire information, which was received by the
district court without objection. See Martin, 382 F.3d at 845 (the appellate court can
conduct the balancing test if the underlying facts are sufficiently developed).
Protsman’s alleged concerns, including how Becker identified the popcorn company
on the transfer and obtained the name of the owner, could have been addressed in her
cross-examination of Becker.
B.
Next, Protsman contends that the admitted evidence was insufficient for the
court to find that she committed wire fraud, failed to answer questions truthfully, and
failed to notify her probation officer of a change in employment. We review the
district court’s decision to revoke supervised release and underlying fact findings for
clear error. Harrison, 809 F.3d at 422. The violation need only be established by a
preponderance of the evidence. 18 U.S.C. § 3583(e)(3).
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To establish wire fraud, the court must find “(1) intent to defraud,
(2) participation in a scheme to defraud, and (3) the use of a wire in furtherance of the
fraudulent scheme.” United States v. Rice, 699 F.3d 1043, 1047 (8th Cir. 2012). The
evidence established that a $4,000 wire transfer was made into Protsman’s bank
account from the bank account of Allred. Allred reported to the police that this
transfer was not authorized. Pauley verified that this deposit occurred and asked
Protsman about it. Protsman told Pauley that she had no idea why the $4,000 was
transferred to her account. When questioned by Becker, Protsman said she was
involved in a corporate moving business and that she was sure that the money was
payment for work she had done for Allred, but that she would need to check. The
court did not commit clear error in finding that the evidence of the wire transfer and
Protsman’s statements to Becker, attempting to justify the wire transfer although later
disavowing the transfer in answering Pauley’s questions, were sufficient to support
the finding that Protsman had committed wire fraud by a preponderance of the
evidence.
Further, the district court did not commit clear error in finding that Protsman
had failed to truthfully answer inquiries from her probation officer, Pauley. The
government alleged that Protsman lied to Pauley when she denied knowledge of the
various deposits and subsequent withdrawals from her bank account. When Pauley
asked Protsman about the $4,000 deposit, she claimed to not know what it was.
However, Protsman told Becker that she knew that the $4,000 was for work performed
for Allred, although she would need to check. Further, the documents admitted into
evidence show that Protsman endorsed the $1,300 check and signed the
acknowledgment of the bank’s policy placing a two-day hold on the funds. Protsman
made withdrawals following the end of the two-day hold. When asked by Pauley
about the $1,300 check, she claimed ignorance and purported to be the victim of fraud.
The district court did not err in finding that the government met its burden.
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Finally, Protsman challenges the sufficiency of the evidence supporting the
finding that she failed to notify the probation office of a change in employment. The
evidence submitted showed that Protsman received a number of legitimate, consistent
checks from Brown’s Floor Care, which she deposited or cashed. The checks’
“memo” blanks are filled in with a word which appears to be “moving.” Pauley
testified that Protsman did not inform him that Brown’s Floor Care was a source of
income. Thus, the district court did not commit clear error in finding that a
preponderance of evidence supported this charge.
III.
For these reasons, we find that the district court did not abuse its discretion in
admitting evidence or commit clear error in determining that Protsman committed the
three violations. We affirm.
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