United States v. Timothy Burns ( 2021 )

United States Court of Appeals
For the Eighth Circuit
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No. 19-3205
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United States of America
lllllllllllllllllllllPlaintiff - Appellee
v.
Timothy James Burns
lllllllllllllllllllllDefendant - Appellant
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Appeal from United States District Court
for the District of South Dakota - Sioux Falls
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Submitted: October 21, 2020
Filed: March 8, 2021
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Before SMITH, Chief Judge, LOKEN and GRUENDER, Circuit Judges.
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SMITH, Chief Judge.
A jury convicted Timothy Burns of wire fraud under 18 U.S.C. § 1343. Burns
makes five arguments on appeal: (1) the evidence against him was insufficient, (2)
the district court’s1 willful-blindness instruction was improper, (3) the jury instruction
1
The Honorable Karen E. Schreier, United States District Judge for the District
of South Dakota.
impermissibly varied from the indictment, (4) the district court erred by not giving
an explicit unanimity instruction, and (5) the district court erred by not sua sponte
individually polling the jury. We affirm.
I. Background
Tobias Ritesman operated Ritesman Enterprises, Inc., which, in turn, was the
parent company of Global Aquaponics, Inc., and South Dakota Food Security, LLC
(SDFS). Global and SDFS purportedly intended to build an aquaponics facility worth
$11 million.2 Global was to own 51 percent of the facility and contribute $5.6 million
to the project. SDFS was to own 49 percent of the facility and contribute $5.4 million
to the project. SDFS planned to raise its portion by selling shares. Thus, it created a
private placement memorandum, which detailed the purported project and investment
opportunities for potential investors.
Burns entered the picture as Global’s chief operating officer and the general
contractor for construction on the aquaponics facility. Burns hired two people,
Jeremiah Charlson and Gregg Selberg, to find investors for SDFS to accumulate
SDFS’s $5.4 million contribution. Burns instructed Charlson and Selberg to use the
private placement memorandum in their presentations to investors. Burns also gave
Charlson and Selberg additional information not included in the private placement
memorandum to tell investors. For example, Burns told Charlson and Selberg that
Global already had its $5.6 million contribution either on hand or in assets; it had
purchased land for the facility; it had secured contracts to sell fish and produce; and
the project had a funded bond from the State of South Dakota. But none of these
representations were true. Defrauded investors later testified they relied on these
statements when deciding to invest.
2
Aquaponics combines aquaculture (raising and breeding aquatic animals) and
hydroponics (growing plants without soil), using the aquatic animals to fertilize water
for the plants and the plants to purify it for the aquatic animals. Auqaponics, Oxford
English Dictionary (3d ed. 2012).
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Burns operated other unrelated businesses. Burns’s other businesses
experienced financial troubles during the time he promoted Global and SDFS. Thus,
Burns took investor funds intended for SDFS and used them to cover expenses related
to his other businesses. Burns or his bookkeeper, Jackie Voelker, would transfer the
money from SDFS’s or Global’s accounts to Burns’s other businesses.
Charlson and Selberg eventually became suspicious of Burns. They noticed
Burns was visibly stressed and would offer them double commission if they got a new
investor within a day. During this time, they also saw Burns looking at negative bank
accounts for SDFS. The company’s apparent insolvency concerned them given their
successful efforts to secure investors. Charlson and Selberg knew they had raised
$200,000 to $300,000 for SDFS and been told Global had $5.6 million ready. So
Charlson and Selberg discussed their concerns with Voelker. Voelker informed the
two that SDFS’s bank account was empty. The three decided to meet with Ritesman,
the supposed originator of the project. Ritesman replied to their concerns by saying
he would talk to Burns. Then, Charlson and Selberg decided to confront Burns
directly. Burns claimed that he was entitled to a $1 million down payment as general
contractor and that the transfers were simply advances for that sum. No one, however,
had heard about or seen a contract for the purported down payment. Burns later
showed them a contract addressing the down payment. Burns had drafted the contract
himself and signed it as the chief operating officer of Global and as president of one
of his other businesses.
After the confrontation, the scheme unraveled. SDFS filed a statement of
dissociation from Burns. And several months later, the Federal Bureau of
Investigation (FBI) interviewed Burns for his involvement with the scheme.
After the FBI investigation, a grand jury indicted Burns and Ritesman for wire
fraud under 18 U.S.C. § 1343. Ritesman pleaded guilty. Burns went to trial. At trial,
following the close of the evidence, the district court gave an actual-knowledge and
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a willful-blindness jury instruction for the intent element. It also gave the remainder
of the wire-fraud instruction. Burns’s counsel objected to the instruction, arguing it
constructively amended or varied from the indictment to an impermissible degree.
The district court overruled the objection, concluding that the wire-fraud jury
instruction did not constructively amend the indictment or constitute a variance. In
April 2019, Burns was convicted and sentenced. Burns timely appealed.
II. Discussion
Burns makes five arguments on appeal: (A) the evidence against him was
insufficient, (B) the district court’s willful-blindness instruction was improper, (C)
the jury instruction impermissibly varied from the indictment, (D) the district court
erred by not giving an explicit unanimity instruction, and (E) the district court erred
by not sua sponte polling the jurors individually.
A. Sufficiency of the Evidence
Burns argues that there was insufficient evidence to find him guilty under the
willful-blindness theory submitted to the jury. Burns did not, however, move for
acquittal based on insufficient evidence at trial. Consequently, we review for plain
error the district court’s decision to not sua sponte grant acquittal based on
insufficiency of evidence. United States v. Calhoun, 721 F.3d 596, 600 (8th Cir.
2013). To prevail, Burns must show (1) there was an error, (2) the error was plain, (3)
the error affected his substantial rights, and (4) the error “seriously affect[ed] the
fairness, integrity, or public reputation of judicial proceedings.” Id. Plain error is only
present on a sufficiency claim “if there is no evidence of the defendant’s guilt or the
evidence on a key element of the offense was so tenuous that a conviction would be
shocking.” Id. (quoting United States v. Villasenor, 236 F.3d 220, 222 (5th Cir.
2000)).
Under § 1343, “the government must prove (1) intent to defraud, (2)
participation in a scheme to defraud, and (3) the use of a wire in furtherance of the
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fraudulent scheme.” United States v. Roberts, 881 F.3d 1049, 1052 (8th Cir. 2018).
The government can establish the intent element by showing Burns had actual
knowledge or was willfully blind. See United States v. Hansen, 791 F.3d 863, 868
(8th Cir. 2015). Burns focuses his challenge on the intent element. Specifically, Burns
argues that there was insufficient evidence to show he was willfully blind. Willful
blindness exists when “(1) the defendant . . . subjectively believe[s] that there is a
high probability that a fact exists and (2) the defendant . . . take[s] deliberate actions
to avoid learning of that fact.” Id. (quoting Global-Tech Appliances, Inc. v. SEB S.A.,
563 U.S. 754, 769 (2011)). We conclude that the evidence presented at trial was
sufficient. The government presented ample evidence of guilt. And, on this record,
the jury’s conviction is not at all shocking.
First, Burns represented that Global had $5.6 million on hand or in assets for
the aquaponics facility. When Charlson asked Burns for specifics on Global’s
expenditures, he told Charlson and Selberg that investors should be notified of
Global’s money and expenditures on the project. Burns then repeated the falsehood
of Global’s $5.6 million during a meeting with potential investors. Global did not
have the money and had not made any purchases for the facility. Burns, as Global’s
chief operating officer and general contractor for the facility, managed Global’s day-
to-day operations, had access to Global’s bank accounts, and would have been aware
of purchases being made for the facility through those accounts. Nevertheless, he
claimed to have “no idea of [Global’s] overall financials.” Trial Tr.,Vol. IV, at 704,
United States v. Burns, No. 4:18-cr-40001-KES-2 (D.S.D. 2019), ECF No. 186-3.
Second, Burns told Charlson and Selberg that contracts had been made to sell
the facility’s fish and produce and that investors should be notified. But there were
no such contracts. At trial, Burns admitted he was not involved in contract
negotiations and had never heard the person who was in charge of sales state that
there were contracts.
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Third, Burns participated in a groundbreaking ceremony with local officials on
land supposedly purchased for the facility’s construction. The land, in fact, had not
been purchased. Burns knew this and also knew that they had only paid $15,000
earnest money towards the $200,000 purchase price.
Fourth, Burns transferred investor money from SDFS’s accounts to his own
struggling businesses’ accounts. Burns represented to others he could do whatever he
wished with the investor money. Burns claimed his expenditures were an advance on
the $1 million down payment he was to receive from Ritesman, which was allegedly
based on the contract Burns drafted and signed for both parties to the purported
contract. Instead of spending the hundreds of thousands of investor dollars on
purchasing the land or moving forward on construction, he transferred it to his other
businesses and made payment for “some preliminary dirt work.” Trial Tr., Vol. IV,
at 717.
This evidence was more than sufficient for the jury to have found Burns either
had actual knowledge or was willfully blind. First, the jury could have found that
Burns had actual knowledge that there were no contracts or was no land acquisition.
Burns, however, told Charlson and Selberg there were contracts for the projects when
he had never been told such contracts actually existed. Further, Burns participated in
the groundbreaking ceremony but knew the land was not purchased because he had
paid the earnest money, not the contract price. Second, the evidence showed that
Burns either knew Global did not have the $5.6 million, or that he, as chief operating
officer and general contractor, was willfully blind to the lack of expenditures from
Global’s accounts. No one knew better than Burns that the facility project, at best,
languished. And Burns transferred SDFS investor money into his businesses’
accounts without telling anyone. But Burns claimed to have no knowledge of
Global’s overall financials.
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Burns’s citation to United States v. Barnhart, 979 F.2d 647 (8th Cir. 1992), is
unpersuasive. In Barnhart, we held that when there is “evidence of either actual
knowledge or no knowledge” but no evidence of “purposely avoid[ing]” knowledge,
a willful-blindness instruction is improper. Id. at 651–52. In that case, Barnhart knew
only that the company was having financial issues but was still operating, and he had
received financial statements without a trace of impropriety. Id. at 652. Thus, he had
“failed to investigate,” but no more. Id. That evidence was too little to find him
willfully blind. But, here, Burns had access to Global’s accounts, was chief operating
officer of Global, and was general contractor of the aquaponics facility. He knew that
Global had claimed to have spent $5.6 million, though no meaningful progress had
been made on the facility. He nevertheless told others that Global had spent the
money on the project, while claiming to have no knowledge of Global’s overall
financials. This was not a simple failure to investigate, as in Barnhart. Instead, Burns
made representations that were contradicted by facts he had access to and that would
have been obvious to anyone in his position; the company he worked for as chief
operating officer and general contractor claimed to have spent $5.6 million but had
nothing to show for it. Burns’s response was that he did not know about his
company’s financials. He either knew or buried his head in the sand. See United
States v. Sigillito, 759 F.3d 913, 939 (8th Cir. 2014) (“[I]f reasonable inferences
support a finding the failure to investigate is equivalent to burying one’s head in the
sand, the jury may consider willful blindness as a basis for knowledge.” (quotation
omitted)).
The district court did not err, much less plainly err, when it did not sua sponte
acquit Burns based on an absence of sufficient evidence.
B. Willful-Blindness Instruction
Burns next argues that the district court erred by instructing the jury on willful
blindness. We review the district court’s inclusion of the instruction for an abuse of
discretion. United States v. Atkins, 881 F.3d 621, 627 (8th Cir. 2018). A willful-
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blindness jury instruction is particularly relevant in a case where the defendant
“assert[s] a lack of guilty knowledge in the face of immense evidence supporting an
inference of deliberate indifference.” Id. This is that case. As discussed above, Burns
claimed to have no knowledge of Global’s financials. But Burns had access to
Global’s accounts, which showed that Global had not spent $5.6 million. In addition,
Burns served as the general contractor for the aquaponics facility, where no
construction was completed nor equipment delivered. Like in Atkins, “[e]ven if the
jury believed [Burns’s] implausible explanation that he had no knowledge of the
criminal activity . . . , ‘there was sufficient evidence that he deliberately turned a blind
eye to . . . clearly illicit activity to warrant’ a willful blindness instruction.” Id. (fourth
alteration in original) (quoting United States v. Novak, 866 F.3d 921, 927 (8th Cir.
2017)). The district court did not abuse its discretion.
C. Variance
Burns challenges the wire-fraud jury instruction as an impermissible variance
from the indictment. His challenge fails.3 There is a variance “when the evidence
presented proves facts that are ‘materially different from those alleged in the
indictment.’” United States v. Johnson, 719 F.3d 660, 668 (8th Cir. 2013) (quoting
United States v. Buchanan, 574 F.3d 554, 564 (8th Cir. 2009)). Even then, a variance
is only reversible “if the variance infringed a defendant’s substantial rights.” Id. at
669 (quoting United States v. Ghant, 339 F.3d 660, 662 (8th Cir. 2003)). This is
because “[a] variance is harmless error if it does not prejudice a defendant’s right to
notice.” Id. at 668 (quoting United States v. Farish, 535 F.3d 815, 822 (8th Cir.
2008)). Burns’s substantial rights were infringed if he “could not reasonably have
3
We recently explained that our precedent conflicts as to the standard of review
when an appellant challenges the jury instruction as impermissibly varying from the
indictment. United States v. Shavers, 955 F.3d 685, 693–94 (8th Cir. 2020). We need
not address the conflict here because we affirm, whether we review de novo or for an
abuse of discretion.
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anticipated from the indictment the evidence to be presented against him.” Id. at 669(quoting United States v. Pizano, 421 F.3d 707, 720 (8th Cir. 2005)).4
Burns argues that the indictment misled him and his counsel into believing that
the government had to prove that both Burns and Ritesman committed wire fraud in
order to find Burns guilty. The indictment was not misleading. The indictment
sufficiently informed Burns that he would be standing trial for his own misconduct.
True, the indictment charged “the Defendants, Tobias Ritesman and Timothy Burns,”
with violating § 1343 and stated that Burns and Ritesman had worked together to
perpetuate wire fraud. Redacted Indictment at 1, United States v. Burns, No.
4:18-cr-40001-KES-2 (D.S.D. 2018), ECF No. 2. But both § 1343 and its model jury
instruction are phrased in the singular, making clear that the government had to prove
that Burns alone, not Burns and Ritesman together, violated § 1343.5 At trial, the
evidence correctly focused on Burns because Ritesman had already pleaded guilty.
Even so, to the extent the evidentiary focus shifted to Burns, it still tracked the
allegations in the indictment pertinent to Burns. Burns could have readily anticipated
the trial’s focus, and he suffered no injury to his substantial rights due to a lack of
notice.
4
The other two ways to show an infringement, which are irrelevant here, are
when “the indictment is so vague that there is a possibility of subsequent prosecution
for the same offense” and when “the defendant was prejudiced by a ‘spillover’ of
evidence from one conspiracy to another.” Johnson, 719 F.3d at 669 (quoting Pizano,
421 F.3d at 720).
5
Section 1343 uses the singular term whoever. 18 U.S.C. § 1343 (“Whoever,
having devised or intending to devise any scheme or artifice to defraud . . . .”)
(emphasis added)). Section 1343’s model jury instruction uses the singular term
defendant. Eighth Cir. Model Crim. Jury Instr. 6.18.1343 (2020) (“One, the defendant
. . . ; Two, the defendant . . . ; Three, the defendant . . . .”).
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We have found the same in similar situations where the defendant argued that
the indictment was constructively amended by the evidence or jury instructions. For
example, in United States v. Spencer, 592 F.3d 866 (8th Cir. 2010), the defendants
were indicted for “conspir[ing] with each [other] and with others.” Id. at 873 (second
alteration in original) (emphasis added). The jury instruction stated that each
defendant conspired “with at least one other person,” whether or not “that other
person is a defendant or named in the indictment.” Id. The defendants argued that the
indictment was constructively amended “because the indictment required the jury to
find the defendants guilty of the crime of conspiracy with each other,” while the jury
instruction allowed the jury to find them “guilty of simply conspiring with any other
person.” Id. (first emphasis added). We rejected that argument because it is well
settled that if one of the defendants was “acquitted, [the other] could be convicted for
conspiring with others.” Id. In the same way, § 1343 required only that Burns commit
wire fraud. It did not require that Burns plus Ritesman (or anyone else) commit wire
fraud. That fact makes this an easier case than Spencer because, unlike conspiracy,
no statutory elements require Burns to have coordinated with anyone. He could have
been convicted, even if he worked alone.
Thus, the district court did not err by giving a jury instruction that enabled a
finding that only Burns committed wire fraud.
D. Unanimity Instruction
Burns also argues that the district court should have sua sponte given an
explicit unanimity instruction. This court reviews the “district court’s decision not to
give a specific unanimity instruction” for clear error. United States v. Gruenberg, 989
F.2d 971, 975 (8th Cir. 1993).
We addressed a similar set of facts in Gruenberg. In Gruenberg, the defendant
was convicted of wire fraud. Id. at 972. The jury instructions did not include an
explicit unanimity requirement. Id. at 975. We held that there was no genuine risk of
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the jury voting nonunanimously because (1) the district court did not give a
nonunanimity instruction and (2) the district court explicitly instructed the jury to be
unanimous while reading the jury instructions. Id. “[T]he mere fact . . . that an
instruction could conceivably permit a jury to reach a non-unanimous verdict [was]
not sufficient to require reversal . . . .” Id. (second alteration in original) (quoting
United States v. Hiland, 909 F.2d 1114, 1139 (8th Cir. 1990)). The same is true here:
(1) the district court did not give a nonunanimity instruction, (2) the district court told
the jury it needed to find unanimously while reading the instructions, (3) the final jury
instructions mentioned that the jury should reach a unanimous verdict, (4) the verdict
form stated that the jury found unanimously, and (5) the district court asked the jury
if it reached a unanimous verdict before it read the guilty verdict.
Burns also urges that the district court should have defined negligence and
recklessness to avoid a potential nonunanimous verdict about whether he acted with
willful blindness, instead of some other mens rea. In essence, he complains that,
although the district court defined what willful blindness is, it should have defined
what it is not. But we presume that the jury followed the district court’s instructions.
United States v. Thomas, 877 F.3d 1077, 1079 (8th Cir. 2017) (quoting United States
v. Myers, 503 F.3d 676, 683 (8th Cir. 2007)). Thus, we find no reasonable basis to
conclude that the jury strayed from the district court’s definition of willful blindness.
We held similarly in Thomas, which had closer facts than are present here. After trial,
the jury in Thomas said that it thought the defendant’s “actions were negligent,” but
the statute and jury instructions required a finding that the defendant acted
“intentionally, knowingly, or recklessly.” Id. Even so, this court held that the
presumption that the jury followed the instructions was not rebutted. Id.Under either argument, there was no genuine risk of the jury finding
nonunanimously. Thus, the district court did not clearly err.
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E. Individual Polling
Finally, Burns argues that the district court erred by not sua sponte individually
polling the jury. But we have repeatedly held that if a defendant does not raise a
polling issue below, it is waived. United States v. Harris-Thompson, 751 F.3d 590,
598 (8th Cir. 2014) (“[I]t is well settled that a poll under [Criminal] Rule 31(d) is not
required unless requested and is waived if the request is not timely.” (alterations in
original) (quoting Hiland, 909 F.2d at 1138–39)).
After the verdict was read, the district court asked the jury to raise their hands
if they agreed with the verdict. All 12 members did. The district court then asked
Burns’s counsel if he wanted an individual poll of the jurors. Burns’s counsel replied,
“No, your Honor.” Trial Tr., Vol. V, at 823, United States v. Burns, No. 4:18-cr-
40001-KES-2 (D.S.D. 2019), ECF No. 186-4. Thus, Burns did not raise the issue
below, so it is waived on appeal.
III. Conclusion
We, therefore, affirm the district court.
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