United States v. Titchell

Opinions of the United
2001 Decisions States Court of Appeals
for the Third Circuit
8-16-2001
United States v. Titchell
Precedential or Non-Precedential:
Docket 00-3193
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Recommended Citation
"United States v. Titchell" (2001). 2001 Decisions. Paper 183.
http://digitalcommons.law.villanova.edu/thirdcircuit_2001/183
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Filed August 16, 2001
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 00-3193
UNITED STATES OF AMERICA
v.
LAWRENCE TITCHELL,
Appellant
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Criminal No. 98-cr-00111-3 )
District Judge: Honorable Gary L. Lancaster
Argued April 23, 2001
Before: RENDELL, AMBRO, and BRIGHT*,
Circuit Judges
(Filed: August 16, 2001)
Richard L. Rosenbaum, Esq.
[ARGUED]
Law Offices of Richard L.
Rosenbaum
Penthouse - One East Broward
Building
Ft. Lauderdale, FL 33301
Counsel for Appellant
_________________________________________________________________
* Hon. Myron Bright, Senior Judge of the United States Court of Appeals
for the Eighth Circuit, sitting by designation (via videoconference).
Bonnie R. Schlueter, Esq.
Barbara M. Carlin, Esq.
[ARGUED]
Office of United States Attorney
633 United States Post Office
and Courthouse
Pittsburgh, PA 15219
Counsel for Appellee
OPINION OF THE COURT
RENDELL, Circuit Judge:
Lawrence A. Titchell appeals his conviction and sentence
for two counts of mail fraud, in violation of 18 U.S.C.
S 1341, and one count of conspiracy to commit mail fraud,
in violation of 18 U.S.C. S 371. Titchell argues, inter alia,
that the District Court erred when calculating the"loss"
attributable to Titchell's conduct under U.S.S.G.S 2F1.1.
We agree, and will vacate Titchell's sentence and remand
for resentencing.1
I.
Titchell and his co-defendants, David Wells and Lloyd
Prudenza, were accused of participating in a scheme to
fraudulently procure funds from thousands of businesses
by mailing out fictitious invoices for renewal of telephone
"Yellow Pages" advertising. Wells and Prudenza were
fugitives at the time of Titchell's trial, and therefore Titchell
was tried alone. A jury found Titchell guilty, and his co-
defendants later pled guilty. The District Court sentenced
Titchell to a thirty-seven month term of imprisonment and
a three-year term of supervised release.
_________________________________________________________________
1. The District Court had jurisdiction over this case pursuant to 18
U.S.C. S 3231, and we have jurisdiction over this appeal pursuant to
28 U.S.C. S 1291.
2
II.
Titchell raises five issues on appeal: he maintains that (1)
his indictment was void because it was not signed by the
grand jury foreperson; (2) the District Court gave an
erroneous "willful blindness" jury instruction; (3) his trial
counsel was constitutionally ineffective due to counsel's
alleged failure to object to the admission of certain
testimony at trial; (4) his conviction and sentence violated
the principles announced in Apprendi v. New Jersey, 430
U.S. 466 (2000); and (5) the District Court erred when
calculating the "loss" attributable to Titchell's conduct
under U.S.S.G. S 2F1.1.
Titchell's first four arguments can be easily dismissed.
First, because he did not object at trial, we review for plain
error Titchell's contention that his indictment is void
because it was not signed by the foreperson of the grand
jury. Under the plain error standard, we will grant relief
only if: (1) an error was committed; (2) the error is plain,
meaning that it is clear or obvious; (3) the error affects
Titchell's substantial rights, which normally requires a
showing of prejudice; and (4) the error seriously affects the
fairness, integrity, or public reputation of judicial
proceedings. E.g., United States v. Nappi, 243 F.3d 758,
762 (3d Cir. 2001).
While the lack of signature on the indictment does
amount to error, the Supreme Court has explained that
"the foreman's duty to sign the indictment is a formality, for
the absence of the foreman's signature is a mere technical
irregularity that is not necessarily fatal to the indictment."
Hobby v. United States, 468 U.S. 339, 345 (1984). Indeed,
Titchell does not even attempt to meet his burden of
demonstrating prejudice from the error, and thus the error
cannot be grounds for relief.
Second, Titchell claims that the District Court gave an
erroneous willful blindness instruction. The government
argues that here, too, the standard of review should be
plain error, because Titchell did not properly object at trial.
However, Titchell did object at trial to the instruction,
arguing that it impermissibly lowered the government's
burden of proof. Supp. App., Vol. II, at 456-58. While
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Titchell's arguments on appeal do not perfectly track his
objection at trial, we think they are sufficiently similar that
the issue is preserved for our review.
That being said, we find no error in the District Court's
instruction. The court gave the jury a fairly standard willful
blindness instruction, which stated that the government
could meet its burden of proving Titchell's knowledge of the
falsity of his statements if the government establishes
"beyond a reasonable doubt that [Titchell] acted with
deliberate disregard" of the truth or with the"conscious
purpose of avoiding learning the truth." Id. , Vol. III, at 528.
The court also properly limited this instruction by telling
the jury that the element of knowledge would not be
satisfied if Titchell "actually believed the statement[s] to be
true," and that guilty knowledge "cannot be established by
demonstrating that [Titchell] was merely negligent or foolish
or acting out of inadvertence or accident." Id. at 528-29.
The only alleged shortcoming that Titchell identifies in
the instruction is that it omitted the requirement that "the
defendant himself was subjectively aware of the high
probability of the fact in question." Appellant's Br. at 26.
Titchell describes this as "the high probability
requirement." Id. Yet our cases make clear that no such
requirement exists. As we explained in United States v.
Stewart, 185 F.3d 112 (3d Cir. 1999), "we do not require a
court's [willful blindness] charge to contain specific
language that a defendant must have `a subjective
awareness of a high probability that something is amiss.' "
Id. at 126 (quoting United States v. Stuart , 22 F.3d 76, 81
(3d Cir. 1994)). As a result, Titchell's argument is meritless.
Next, Titchell raises a curious argument regarding his
trial counsel's alleged ineffectiveness. Titchell's former
attorney, Mr. Michael Feldman, had testified as a fact
witness for Titchell in an earlier workers' compensation
hearing in Ohio. At trial, the prosecution called Feldman as
a witness to testify regarding statements Titchell had made
to him, about which Feldman had testified at the workers'
compensation hearing. Titchell's counsel objected, but the
District Court allowed Feldman to testify, reasoning that
Titchell had waived his attorney-client privilege by calling
4
Mr. Feldman as a fact witness in the earlier workers'
compensation hearing. Supp. App., Vol. II, at 340.
Rather than arguing that the District Court erred,
Titchell on appeal claims that his attorney's failure to object
to Feldman's testimony constitutes ineffective assistance of
counsel. Appellant's Br. at 41-46. However, we reject
Titchell's claim for three reasons.
First, Titchell himself acknowledges that such a claim
should not be raised on direct appeal, but rather by way of
a habeas corpus petition. Id. at 42, 46; see, e.g., United
States v. Mustafa, 238 F.3d 485, 497 (3d Cir. 2001). For
that reason alone, we need not entertain Titchell's
ineffectiveness claim. Second, Titchell's claim makes no
sense because his trial counsel did object to Feldman's
testimony. Supp. App., Vol. I, at 1a; id., Vol. II, at 338-40.
Lastly, even had Titchell's trial counsel failed to object to
Feldman's testimony, Titchell would have suffered no
prejudice. This is because the District Court was correct to
admit Feldman's testimony, given that calling one's
attorney as a fact witness in a prior proceeding constitutes
a waiver of the attorney-client privilege, at least regarding
the subject of the testimony adduced in the prior
proceeding. E.g., Brown v. Trigg, 791 F.2d 598, 601 (7th
Cir. 1986) (ruling that defendant waived her attorney-client
privilege when she called an agent of her attorney to testify
at a prior juvenile court hearing).
Titchell's Apprendi-based argument is also without merit.
Because he did not object during the district court
proceedings, we review for plain error Titchell's claim that
his conviction and sentence violate the principles
announced in Apprendi. It is well-settled, in both this
Circuit and others, that Apprendi is not implicated unless
the defendant's actual sentence exceeds the statutory
maximum sentence for the crime of conviction. E.g., United
States v. Williams, 235 F.3d 858, 863 (3d Cir. 2000).
Titchell received a sentence of 37 months, while the
statutory maximum for mail fraud is five years. 18 U.S.C.
S 1341. Accordingly, there is simply no Apprendi error in
this case, plain or otherwise.
Finally, we will address Titchell's last argument, namely
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that the District Court erred when calculating the"loss"
attributable to Titchell's conduct under U.S.S.G.S 2F1.1. As
part of his mail fraud scheme, Titchell mailed out 119,575
fraudulent invoices for Yellow Pages advertising at $147
each, for an invoice total of $17,577,525. Apparently, it is
impossible to ascertain precisely how many of these
invoices were sent back to Titchell with payment, but when
the government became involved, it intercepted Titchell's
mail and seized approximately $647,000 worth of checks
that were intended to pay for the fraudulent advertisement.
Supp. App., Vol. III, at 661, 666, 673-74.2 If this $647,000
constitutes all the money that was sent to Titchell, it would
represent approximately a 3% return on his mailing, which
is what Titchell maintains is the norm for this sort of scam
and what he expected and intended to receive. Appellant's
Br. at 38; Supp. App., Vol. III, at 663. The government has
identified only one victim of Titchell's fraud who actually
lost his $147. Presentence Report, P 28. As part of his
sentence, Titchell was ordered to pay $147 restitution to
this victim. Supp. App., Vol. III, at 684. Therefore, the
record demonstrates a potential loss from Titchell's scam of
$17,577,525; Titchell argues that his intended loss was
only $647,000 (or something closely approximating that
amount, because he only expected a 3% return on his
mailing);3 and the actual loss that the government has
identified is a mere $147.
Titchell was sentenced pursuant to S 2F1.1 of the
Sentencing Guidelines, which establishes a base offense
level of 6, and then increases the offense level depending on
_________________________________________________________________
2. It is unclear from the record what has since happened to these checks
-- presumably they remain in the government's possession, or perhaps
they were returned to their rightful owners -- but certainly they were
never cashed.
3. Confusingly, Titchell's trial counsel at the sentencing hearing
repeatedly referred to this $647,000 as the "actual" loss, rather than the
intended loss. But this cannot be the "actual" loss, because this money
was intercepted by the government before Titchell could cash the checks.
Titchell's attorney's mischaracterization is perhaps understandable,
though, because he was simply trying to impress upon the court that the
"loss" for Sentencing Guidelines purposes should be far less than the
potential loss of $17,577,525.
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the "loss" involved. Application Note 8 states that "if an
intended loss that the defendant was attempting to inflict
can be determined, this figure will be used if it is greater
than the actual loss." The District Court's analysis of
intended loss consisted of the following paragraph:
In this case the bulk mailing did (sic) defendant was
found guilty of contained 119,575 bogus renewal
invoices at a quote of $147 a piece. Thus, intended loss
was $17,577,525. Therefore, the increase is warranted
and the base offense level is increased to 21.
Id. at 675. The District Court then sentenced Titchell to
thirty seven months of imprisonment, which is the bottom
of the Sentencing Guidelines range of thirty seven to forty
six months for an offense level of 21 and a criminal history
category of I.
Titchell objected to the District Court's manner of
calculating intended loss, and thus the issue is properly
preserved for appeal. Our review of the District Court's
interpretation and application of the Sentencing Guidelines
is plenary, but we must accept the District Court's factual
conclusions unless they are clearly erroneous. E.g., United
States v. Geevers, 226 F.3d 186, 189 (3d Cir. 2000).
The resolution of this issue is controlled by Geevers, in
which we exhaustively analyzed the concept of intended
loss under S 2F1.1.4 According to Geevers, "[i]t is clear that
a district court errs when it simply equates potential loss
with intended loss without deeper analysis." Id. at 192. This
is because "[t]he fraud guideline . . . has never endorsed
sentencing based on the worst-case scenario potential loss,"
and "equating possible loss with . . . intended loss" is a
"linguistic stretch" that we have previously rejected. Id.
(emphasis in original). Moreover, "[i]ntended loss refers to
_________________________________________________________________
4. Geevers was decided on August 18, 2000, which is several months
after Titchell's sentencing on February 4, 2000. Yet there are no
retroactivity concerns with applying Geevers to Titchell's sentencing on
direct appeal, because Geevers interpreted the same version of S 2F1.1
as was in force at the time of Titchell's sentencing. The parties agreed
at
oral argument that Geevers is controlling; surprisingly, however, neither
party cited Geevers in their briefs, even though they were filed several
weeks after Geevers had been decided.
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the defendant's subjective expectation, not to the risk of
loss to which he may have exposed his victims." Id.
Therefore, it is the government's burden "to prove intended,
not possible, loss if it seeks to increase guideline levels
faced by the defendant under S 2F1.1." Id.
Despite this warning that district courts should not
assume that intended and potential loss are the same, the
Geevers court went on to explain that it is permissible for
a district court to draw a reasonable inference that the
defendant intended to cause the full potential loss. Id. at
192-93. Indeed, such was the case in Geevers, in which we
affirmed the district court's determination that the
defendant in a check kiting scheme intended to cause the
full loss of the face amount of his false checks. Id. In other
words, the rule established by Geevers is that intended and
potential loss may be the same (and a district court can
draw an inference to that effect), but it is error for a district
court simply to equate the two without "deeper analysis."
It is evident from the transcript of the sentencing hearing
that the District Court erred by equating potential loss with
intended loss without the requisite "deeper analysis." As
noted above, in determining intended loss, the District
Court merely referenced the potential loss calculation, and
did not attempt to explain or justify why the potential loss
in this case should be considered the same as the intended
loss. The government appears to argue that the District
Court implicitly drew the reasonable inference that Titchell
intended to cause the full potential loss from his mail
fraud. This argument, however, does not satisfy Geevers: if
district courts could silently draw such inferences, there
would be little left of Geevers' admonition that district
courts must perform a "deeper analysis" than simply
calculating potential loss.
In any event, the government's argument misses the
mark because the sentencing hearing transcript confirms
that the District Court did not implicitly draw the
reasonable inference that Titchell intended to cause the full
potential loss; rather, the District Court misapprehended
the Sentencing Guidelines by assuming that intended loss
and potential loss are essentially the same underS 2F1.1.
Toward the end of the hearing, when summing up its
8
reasons for imposing the sentence that it did, the District
Court remarked that: "I've also taken into account the fact
that technically the potential loss is the one that's used for
guideline calculations." Supp. App., Vol. III, at 686.
Contrary to the District Court's understanding, potential
loss is not the measure that is "technically" used for
guideline calculations; instead, intended loss is the proper
measure, and the court erred by equating the two without
further analysis. It is also interesting to note that at
sentencing, the District Court observed that calculating
potential loss in this case "overstate[s] the seriousness of
the offense." Id. This statement seems to reflect the court's
view that its loss calculation under S 2F1.1 overstated
Titchell's actual intent, lending further support to the
conclusion that when calculating loss, the District Court
concerned itself with only potential loss and not intended
loss.5
Lastly, assuming that the District Court committed error,
we must ask if the government has met its burden of
demonstrating that the error is harmless beyond a
reasonable doubt. See Fed. R. Crim. P. 52(a). The
government has not even attempted to argue harmlessness
here, but even if it did, it would have difficulty meeting its
burden. The possibility clearly exists that the District Court
would impose a lesser sentence on remand. It is reasonable
to believe that once the District Court applies the proper
legal standards under S 2F1.1, intended loss will amount to
substantially less than $17,577,525, calling for a reduced
offense level and guidelines range. And if the guidelines
range were lowered, we certainly cannot assume that
Titchell's sentence would be unaffected. Thus, Titchell is
entitled to resentencing.
_________________________________________________________________
5. We have previously noted that "Application Note 11 of S 2F1.1
specifically provides an escape valve for situations in which the intended
loss may `overstate the seriousness of the offense.' " Geevers, 226 F.3d
at
195 (quoting Application Note 11). In such cases, Application Note 11
provides that "a downward departure may be warranted." Despite its
apparent belief that the potential loss overstated the seriousness of
Titchell's offense, the District Court nonetheless chose "not [to] depart
below the guidelines." Supp. App., Vol. III, at 686.
9
Accordingly, the Judgment and Conviction Order of the
District Court entered on February 14, 2000, will be
vacated and the case remanded for resentencing in
conformity with this opinion.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
10