United States v. Ruhe

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 98-4731
ROBERT RUHE,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of West Virginia, at Clarksburg.
Irene M. Keeley, District Judge.
(CR-96-3)
Argued: April 9, 1999
Decided: August 31, 1999
Before MURNAGHAN, WILKINS, and NIEMEYER,
Circuit Judges.
_________________________________________________________________
Affirmed in part and vacated and remanded in part with instructions
by published opinion. Judge Murnaghan wrote the opinion, in which
Judge Wilkins joined. Judge Niemeyer wrote an opinion concurring
in part and dissenting in part.
_________________________________________________________________
COUNSEL
ARGUED: Michael M. Fisher, OFFUTT, FISHER & NORD, Hun-
tington, West Virginia, for Appellant. Zelda Elizabeth Wesley, Assis-
tant United States Attorney, Clarksburg, West Virginia, for Appellee.
ON BRIEF: Chad S. Lovejoy, OFFUTT, FISHER & NORD, Hun-
tington, West Virginia, for Appellant. William D. Wilmoth, United
States Attorney, Clarksburg, West Virginia, for Appellee.
_________________________________________________________________
OPINION
MURNAGHAN, Circuit Judge:
Appellant Robert Ruhe was tried and convicted of conspiring to
transport stolen property in interstate commerce and aiding and abet-
ting the transportation of stolen property in interstate commerce. Ruhe
appeals various aspects of his trial and sentencing. Ruhe asserts that
illegally seized evidence was improperly used, that the district court
improperly gave the jury a "willful blindness" instruction, that the dis-
trict court incorrectly refused to admit polygraph evidence and to con-
sider such evidence at sentencing, that the evidence was insufficient
to convict him, and that the district court incorrectly valued the stolen
aircraft parts for both jurisdictional and sentencing purposes. We
affirm the district court in most respects but vacate Ruhe's sentence
and remand for re-sentencing.
I.
Appellant Ruhe ("Ruhe" or "Appellant"), had been involved in the
aircraft business for over twenty years at the time of the events in
question. He owned a facility licensed by the Federal Aviation
Administration ("FAA") to overhaul used aircraft parts. He also
owned two other aircraft-related businesses. Through these businesses
he often bought and sold used aircraft parts via a variety of methods.
In 1984, Gary Byard, a friend of Ruhe, began working at Pratt &
Whitney. Eventually Byard joined the engineering department of Pratt
& Whitney's Bridgeport, West Virginia facility. One of his job duties
there included maintenance of the "scrap cage" in which Pratt &
Whitney stored used aircraft parts deemed to be unserviceable and
slated for mutilation. After such parts were mutilated they were sold
as steel scrap. These parts were designated by placing red tags on
them.
2
Sometime around 1993 or 1994 Byard began stealing aircraft parts
from the scrap cage and selling them to Ruhe. The main trial issue
was whether Ruhe knew that these parts were stolen. Byard never told
Ruhe that he was stealing the parts. Byard testified, though, that Ruhe
had to know that they were stolen. Ruhe maintained that Byard never
told him that they were stolen, and that he assumed that Byard
obtained the parts legitimately through his high position at Pratt &
Whitney.
For over one year Byard once a week or once a month would bring
parts to Ruhe's businesses or his residence (which is located directly
next to his businesses). Ruhe would pay Byard directly, or write a
check to Byard or one of Byard's family members. Byard testified
that sometimes he brought parts he knew Appellant could use, and
sometimes Appellant told Byard the parts he needed. Appellant
always decided how much to pay Byard for the parts.
Appellant's employees expressed concern to him about the parts
purchased from Byard. The aircraft industry apparently has a pedigree
system whereby aircraft parts are accompanied by documentation
indicating their source and usage. The "red-tagged" parts purchased
from Byard lacked such documentation. Additionally, Appellant's
employees were concerned by the fact that the red tags accompanying
the parts stated "To be scrapped." Several employees suspected that
the red-tagged parts were stolen. Some evidence indicated that when
employees raised concerns about these parts, Appellant either told
them not to worry, or forbade them from exploring the source of the
parts.
On the other hand, Appellant presented evidence that he sought out
the source of the parts. After one employee questioned him about the
parts, Appellant sent a letter to Pratt & Whitney's help desk in Can-
ada, inquiring about the history of two of the parts. Appellant testified
that he sent the letter to Pratt & Whitney Canada rather than Pratt &
Whitney Bridgeport (where Byard worked) because the Pratt & Whit-
ney help desk in Canada was the designated parts tracing desk. Ruhe
also testified that he "grilled" Byard about the source of the parts.
Byard's testimony neither supported nor directly contradicted this
contention.
3
One of Appellant's ex-employees alerted the FAA hotline to the
possibility that Ruhe was using stolen parts. This phone call resulted
in a joint investigation into Appellant by the Federal Bureau of Inves-
tigation ("FBI") and the FAA. The FBI contacted one of Appellant's
employees, Roy Vennekotter, and convinced him to supply them with
photocopies of red tags attached to various parts thought to be stolen.
Later, Byard was contacted. Byard agreed to cooperate with the FBI
and made monitored phone calls to Appellant to discuss the parts.
During one phone call Byard mentioned that it would be difficult to
continue to obtain parts because there was heightened security at Pratt
& Whitney. Appellant asked Byard if he could put Appellant in touch
with the true owners of the parts so that Appellant could purchase the
parts directly from them.
Byard also arranged to make a "controlled delivery" of stolen parts
to Appellant. Based on this controlled delivery, the FBI obtained a
warrant to search Appellant's house and business. A number of air-
craft parts were seized during that search.1
Thereafter, Appellant was arrested and tried for dealing in stolen
goods with a value greater than $5,000 transported in interstate com-
merce under 18 U.S.C.A. § 2314 (West Supp. 1999). Appellant was
convicted. The court determined that Appellant's base offense level
under the Sentencing Guidelines was four (4). Because the court
found that the loss exceeded $70,000, eight (8) additional levels were
added under U.S.S.G. § 2B1.1(b)(1)(I) (West 1996 & Supp. 1999).
Appellant's adjusted offense level was twelve (12) and he was sen-
tenced to twelve (12) months and one (1) day. Appellant appeals from
various aspects of the trial and sentencing.
II.
Appellant argues that he is entitled to a new trial because the gov-
ernment made impermissible references to evidence that should have
been suppressed.
The facts surrounding this issue are disturbing. On October 7,
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1 The irregularities in this search will be discussed infra in section II.
4
1995, pursuant to a search warrant, the FBI searched Appellant's
house and seized various items. Appellant moved to suppress this evi-
dence, alleging that the warrant was defective on its face in that it
failed to describe the items to be seized with particularity. The magis-
trate judge to which the issue had been assigned agreed, rejecting any
good faith exception to the exclusionary rule since the warrant was
defective on its face. The district court adopted the magistrate judge's
ruling. This Court reversed. The Court did not reach the adequacy of
the warrant, instead holding that the good faith exception was applica-
ble because the warrant "was not so facially defective as to preclude
reasonable reliance on it." See United States v. Ruhe, 113 F.3d 1233,
1997 WL 269339, at **3 (4th Cir. 1997) (unpublished table
disposition).2
Throughout each of the stages of the suppression procedure the
government maintained that the items which were not identified by
serial number in the warrant had been seized because each had a red
Pratt & Whitney tag affixed to it, creating probable cause that it had
been stolen from Pratt & Whitney's scrap cage. This Court's opinion
in Ruhe specifically mentioned the government's representation that
the seized parts bore red tags. See Ruhe, 113 F.3d 1233, 1997 WL
269339, at **1 ("each of these parts was prominently marked with a
red tag"). When Appellant's counsel went to examine the evidence for
the first time in August, 1997, however, not one piece of evidence had
a red Pratt & Whitney tag affixed.
The Appellant immediately moved via motion in limine to suppress
all of the evidence seized during the search of his home since the
basis for the seizure of the parts not identified by serial number in the
warrant (probable cause because of the red Pratt & Whitney tags) was
apparently false.
Prior to the hearing on this motion, the government stated that it
would voluntarily suppress the questionable evidence:
In light of this discrepancy between [the FBI agent's] testi-
mony and the actual state of the physical evidence and par-
_________________________________________________________________
2 United States v. Ruhe is cited here and elsewhere in this opinion for
the law of the case. See 4th Cir. R. 36(c).
5
ticularly considering the importance the presence of red tags
had on the suppression issue, I have decided that I will treat
the parts which did not have red tags as if they were sup-
pressed for having been improperly seized under the search
warrant. Accordingly I will only offer into evidence the air-
craft parts identified by serial number in the search warrant
and the one item identified with a Pratt & Whitney red tag.3
(J.A. at 592.) The district court denied the motion in limine.
At trial the government admitted into evidence only three aircraft
parts, all three of which had been referenced by a serial number in the
warrant. However, the government and government witnesses made
numerous references throughout the trial to the other aircraft parts
which had been improperly seized.4
Appellant first argues that because most of the aircraft parts were
illegally seized, all items seized in the search of his home should be
suppressed, even those seized legally. We reject this argument. In
extreme circumstances even properly seized evidence may be
excluded when the officers executing the warrant exhibit a "flagrant
disregard for its terms." United States v. Jones, 31 F.3d 1304, 1314
(4th Cir. 1994) (internal quotations omitted). See also United States
v. Borromeo, 954 F.2d 245, 246 (4th Cir. 1992); United States v.
Medlin, 842 F.2d 1194, 1199 (10th Cir. 1988). The general rule, how-
ever, is that items properly seized may still be admitted even when
they are obtained at the same time as improperly seized items. See
Jones, 31 F.3d at 1314; United States v. Shilling, 826 F.2d 1365, 1369
(4th Cir. 1987), implied overruling on other grounds recognized by
United States v. Starkes, 32 F.3d 100, 101 (4th Cir. 1994).
_________________________________________________________________
3 Apparently, on the government's review of the evidence, one of the
pieces of evidence was marked with a red tag.
4 The government argues that because this evidence was admitted with-
out objection, we cannot address Appellant's arguments on appeal. The
government is incorrect. The district court ruled upon Appellant's motion
in limine. Therefore, that motion served to preserve the issue without the
need for additional objections. See United States v. Williams, 81 F.3d
1321, 1325 (4th Cir. 1996).
6
If the parts did not have red tags when they were seized, then we
cannot use words stern enough to condemn the responsible actors for
their outrageous and illegal conduct in making false representations
before the courts. Such conduct is intolerable at all, and especially so
from government agents.
But, we must distinguish the government's conduct before the
courts from its conduct when executing the search warrant. The latter
conduct was not such a "flagrant disregard" for the terms of the search
warrant as to render the entire search unlawful. Appellant has
acknowledged previously that the warrant was broadly phrased,5
allowing seizure of "[a]ircraft components to include but not limited
to P-T blades; compressor hubs; P-T wheel; [and] CT disc . . . ." (J.A.
at 108.) All of the parts wrongfully seized by the government were
the types of items (i.e., aircraft components) described in the warrant.
Thus, while the government may not have had probable cause for the
questionable seizures, the government's actions were not so extreme
as to invalidate the otherwise legal aspects of the search.
Appellant next argues that the government's apparent misrepresen-
tation about the red tags invalidates our decision in United States v.
Ruhe, supra, upholding the validity of the search of his home. Appel-
lant is wrong, however. Our decision in Ruhe was not dependent upon
the presence of the red tags. That decision merely established that the
search as a whole was not illegal because the warrant was not so defi-
cient on its face as to preclude good faith reliance upon it. We were
not presented with and did not address the admissibility of any partic-
ular items. We think it is clear that if the evidence which was sup-
posed to be red tagged was not so identified, then the seizure of such
evidence was unconstitutional. But, this conclusion is separate and
independent from our previous conclusion that the search of Ruhe's
home was validly conducted in good faith reliance on the warrant.
The unconstitutional taint of these seizures did not spread to the trial
since the improperly seized evidence was not itself admitted.
Finally, Appellant argues that under the Wong Sun "fruit of the poi-
sonous tree" doctrine, see Wong Sun v. United States, 371 U.S. 471
_________________________________________________________________
5 Indeed, Appellant challenged the warrant as being overly broad on its
face.
7
(1963), the government should not have been allowed to make any
references to the improperly seized items at trial or to any other evi-
dence which was obtained as a consequence of the unlawful search.
Once again, Appellant's arguments are unavailing. Generally the
exclusionary rule requires the suppression not only of the evidence
improperly seized, but "extends as well to the indirect as the direct
products of such invasions." Wong Sun, 371 U.S. at 484. The "fruit
of the poisonous tree" doctrine recognizes an exception, however,
when the evidence in question would have been available from an
independent source: "the facts thus obtained[from an illegal search
do not] become sacred and inaccessible. If knowledge of them is
gained from an independent source they may be proved like any oth-
ers ...." Silverthorne Lumber Co. v. United States, 251 U.S. 385, 392
(1920), overruled on other grounds by United States v. Havens, 446
U.S. 620 (1980), quoted in Wong Sun, 471 U.S. at 485. The govern-
ment's other references to the stolen items came from Appellant's
check register, Byard's testimony from direct personal knowledge,
and the testimony of other witnesses who had personally seen red-
tagged parts at Appellant's shop. This evidence was not the fruit of
the illegal seizures at Appellant's home. Instead, that search and those
seizures were the culmination of an investigation during which this
other evidence had already been gathered. The check register was
seized during the search of Appellant's home. This seizure, however,
was expressly authorized in the warrant. Therefore, although appar-
ently the government was guilty of illegally seizing evidence, no evi-
dence admitted at trial violated the exclusionary rule or the fruit of the
poisonous tree doctrine.
III.
The standard of review for determining whether the district court
should have given a jury instruction is abuse of discretion. United
States v. Abbas, 74 F.3d 506, 513 (4th Cir. 1996).
To convict Appellant, the government had to prove that he had
knowledge that the aircraft parts acquired from Byard had been
stolen. A "willful blindness" or "Jewell" instruction "allows the jury
to impute the element of knowledge to the defendant if the evidence
indicates that he purposely closed his eyes to avoid knowing what
was taking place around him." United States v. Schnabel, 939 F.2d
8
197, 203 (4th Cir. 1991). A willful blindness instruction is proper
"when the defendant asserts a lack of guilty knowledge but the evi-
dence supports an inference of deliberate ignorance." United States v.
Gruenberg, 989 F.2d 971, 974 (8th Cir. 1993), quoted in Abbas, 74
F.3d at 513. If the evidence supports both actual knowledge on the
part of the defendant and deliberate ignorance, a willful blindness
instruction is proper. Abbas, 74 F.3d at 513.
Appellant argues that the evidence did not support a willful blind-
ness instruction. Appellant turns to Ninth Circuit case law expounding
upon the limited nature of that instruction. He cites to the discussion
of the instruction in United States v. Jewell , 532 F.2d 697 (9th Cir.
1976):
[The willful blindness instruction] is, at the same time, an
unstable rule, because judges are apt to forget its very lim-
ited scope. A court can properly find willful blindness only
where it can almost be said that the defendant actually
knew. He suspected the fact; he realised its probability; but
he refrained from obtaining the final confirmation because
he wanted in the event to be able to deny knowledge. This,
and this alone, is willful blindness. It requires in effect a
finding that the defendant intended to cheat the administra-
tion of justice. Any wider definition would make the doc-
trine of willful blindness indistinguishable from the civil
doctrine of negligence in not obtaining knowledge.
Id. at 700 n.7 (quoting Glanville Williams, Criminal Law: The Gen-
eral Part § 57, at 157 (2d ed. 1961)). Appellant also notes that before
allowing the use of a willful blindness instruction, the Ninth Circuit
requires that the prosecution show that the defendant deliberately
avoided obtaining more knowledge "in order to provide him or herself
with a defense in the event of prosecution." United States v. Baron,
94 F.3d 1312, 1318 n.3 (9th Cir. 1996). Finally, Appellant points out
that many courts have stated that the willful blindness instruction is
proper only in "rare circumstances." See , e.g., United States v. Lara-
Velasquez, 919 F.2d 946, 951 (5th Cir. 1990).
Appellant cites the following evidence as inconsistent with the
willful blindness instruction: (1) Byard was a close friend known to
9
hold a high position in Pratt & Whitney; (2) According to Appellant,
Byard never indicated that the aircraft parts were stolen, just that they
were designated for scrap; (3) When Appellant's employees began
questioning Appellant about the source of these parts, Appellant took
two actions to investigate their origins. First, Appellant wrote a letter
to Pratt & Whitney's help desk to trace the origin of some of the
parts. Second, Appellant says he "grilled" Byard about the legitimacy
of the means by which he obtained the parts. Given this evidence that
Appellant actively sought to discover whether the parts were stolen,
and the limited scope for the willful blindness instruction, Appellant
argues that it was an abuse of discretion to give such an instruction.
We hold that the district court did not abuse its discretion. First,
this circuit has never adopted the Ninth Circuit's additional require-
ment that the government prove that the defendant's ignorance was
for the purpose of providing a defense in case of prosecution. Second,
while the deliberate blindness instruction is only proper in rare cir-
cumstances, this is just such a situation. There is ample evidence sup-
porting the district court's decision to give the willful blindness
instruction: Appellant prohibited his employees from contacting Pratt
& Whitney about the parts; Byard's testimony was indirectly incon-
sistent with Appellant's assertion that he "grilled" Byard about the
legitimacy of the parts; the parts came without the normal documenta-
tion associated with aircraft parts; Appellant did not keep invoices or
receipts of the parts purchased from Byard; Byard only sold Appellant
parts by driving them to Appellant's house -- typically other parts
purchases came via UPS or Federal Express; Appellant set the price
he would pay Byard for the parts; payment was made to Byard or one
of his family members, not to Pratt & Whitney; Byard's reference in
a phone conversation to difficulty in obtaining parts due to increased
security; and the fact that many of the parts contained red Pratt &
Whitney "to be scrapped" tags. Thus, it was not an abuse of discretion
for the district court to find that the evidence supported the inference
that Appellant was purposely remaining ignorant of Byard's illegal
acts.
IV.
A district court's decision to grant or deny a motion under Federal
Rule of Criminal Procedure 12(f) seeking to file an untimely motion
10
to suppress is reviewed for clear error. See United States v. Chavez,
902 F.2d 259, 262-65 (4th Cir. 1990); United States v. Wertz, 625
F.2d 1128, 1132 (4th Cir. 1980); United States v. Mangieri, 694 F.2d
1270, 1282 (D.C. Cir. 1982).
Appellant argues that government exhibits 12 through 44 (the
"Vennekotter documents") were seized in violation of his Fourth
Amendment rights and asserts that they were erroneously admitted
into evidence. Exhibits 12 through 44 are photocopies of tags that
were affixed to various aircraft parts in Ruhe's place of business. The
FBI had contacted one of Appellant's employees, Roy Vennekotter,
and asked him to make the photocopies. Vennekotter did as requested
and gave the photocopies to the FBI. The FBI did not have a warrant
for this search.
Although we have some doubts about the legality of the search, we
need not reach that issue. Under Fed. R. Crim. P. 12(f), the general
rule is that a defendant forfeits a suppression claim if that claim is not
timely raised. Such a forfeiture can be excused if good cause is
shown. Fed. R. Crim. P. 12(f). Whether or not the Vennekotter docu-
ments should have been suppressed, Appellant forfeited his right to
challenge the search by failing to seek suppression of the Vennekotter
documents, and failing to object to their admission at trial. Prior to
trial, but after the deadline for filing a motion to suppress, the govern-
ment gave Appellant its proposed exhibit list. This list stated that the
government intended to introduce "Documents provided by Roy Ven-
nekotter of the tags from the Ohio Turbine Center." (J.A. 151-152.)
We hold that this list gave Appellant the requisite notice to challenge
the Vennekotter documents via a motion to suppress. 6 His failure to
timely do so forfeited his rights.
Appellant argues that there was good cause for his failure to file
a pre-trial motion to suppress. According to Ruhe, the vague reference
_________________________________________________________________
6 The district court stated in its memorandum opinion and order that it
would have allowed Appellant to file a motion to suppress out of time
had such a motion been filed shortly after the exhibit list was made avail-
able. Under United States v. Chavez, 902 F.2d 259, 262-64 (4th Cir.
1990), the district court would have been required to allow such a pre-
trial challenge.
11
to Vennekotter in the exhibit list was insufficient to give him notice
of the potential illegality of the search. The exhibit list item, "Docu-
ments provided by Roy Vennekotter of the tags from the Ohio Tur-
bine Center," only indicates the source of the Vennekotter documents
and does not suggest that Vennekotter obtained the documents at the
FBI's bidding. Therefore, the first time he says he learned that the
documents had been obtained from Vennekotter at the FBI's direction
-- the basis for a motion to suppress -- was at trial, when Vennekot-
ter testified to that effect. After learning this information, Ruhe main-
tains he raised the suppression issue at the earliest opportunity -- in
a post-trial motion for acquittal.
Ruhe's arguments are unavailing. Defendants are subject to a due
diligence standard. Even if the defendant did not know all of the
information establishing the basis for a claim, the court will not
excuse a forfeiture if the defendant, by due diligence, could have or
should have discovered the basis for the claim. See United States v.
Mangieri, 694 F.2d at 1283-84; United States v. DeLuna, 616 F.
Supp. 534, 538-539 (W.D. Mo. 1985). In United States v. Chavez, this
Court held that good cause existed to excuse a failure to timely file
a motion to suppress when the defendant did not know the basis for
that motion until after the time for such a motion had expired. Chavez,
902 F.2d at 262-65. Chavez is distinguishable from the present one,
however. In Chavez the information serving as the basis for the sup-
pression claim was only available in a grand jury transcript. The court
had prevented the defendant from inquiring into the substance of the
information at a preliminary hearing. The day after the government
finally turned over the grand jury transcript, and prior to trial, the
defendant filed his by then untimely motion to suppress. We held that
under the circumstances, the district court's refusal to entertain that
motion was clear error.
In the case sub judice, as of the moment the exhibit list was filed,
Appellant was on notice of the possibility that the government had
used Vennekotter as its agent. Although the exhibit list was not one-
hundred percent clear, the statement in the exhibit list was sufficient
to alert Appellant that he needed to investigate further. To borrow
from the court in Mangieri:
Even if [the clues in the exhibit list] fell short of providing
a detailed roadmap of . . . the precise facts that appellant
12
eventually relied on in his motion to suppress, they certainly
should have pointed to a need to undertake some basic dis-
covery as to whom the government was talking and how
they [obtained the evidence to be used at trial].
Mangieri, 694 F.2d at 1284.
Additionally, after Vennekotter testified, Appellant had all the
information he needed to object to the admission of the documents
taken by Vennekotter. Appellant failed to challenge the admission of
the Vennekotter documents at that time, however. If the district court
had accepted Appellant's claim that he had good cause for the delay
in seeking to have the Vennekotter documents suppressed, then the
district court may have passed on that motion. See United States v.
Cranson, 453 F.2d 123, 125 (4th Cir. 1971). Cf. Chavez, 902 F.2d at
262-64 (requiring district court to allow untimely motion for good
cause before trial). Instead Appellant chose to wait until after trial to
raise the suppression issue in a motion for acquittal. A motion at that
late date, given the prior knowledge and opportunities to raise the
motion, was untimely.7
_________________________________________________________________
7 Appellant also notes that we may hear his claim if the district court
committed plain error in admitting the evidence. See Fed. R. Crim. P.
52(b); United States v. Olano, 507 U.S. 725, 732-34 (1993) (noting dif-
ference between waiver and forfeiture in plain error analysis). We find
no error here approaching the Olano standard. See Olano, 507 U.S. at
732-36 (holding that plain error requires (1) an"error," (2) that is "plain,"
i.e., clear or obvious, (3) that "affect[s] substantial rights," and (4) that
"seriously affect[s] the fairness, integrity or public reputation of judicial
proceedings.") In particular, even if the Vennekotter documents should
have been excluded, this error was not "plain": it is a close and complex
question whether the FBI's use of Vennekotter violated Ruhe's Fourth
Amendment rights. Compare Skinner v. Railway Labor Executives'
Assn., 489 U.S. 602, 614 (1989) (when private person acts as government
agent, his searches and seizures become subject to Fourth Amendment),
Coolidge v. New Hampshire, 403 U.S. 443, 487 (1971) (same),
Schneckloth v. Bustamonte, 412 U.S. 218, 219 (1973) (a search by a gov-
ernment agent without a warrant is per se unreasonable unless it falls into
one of the well-defined exceptions), and Marshall v. Barlow's, Inc., 436
U.S. 307, 315 (1978) ("The owner of a business has not, by the necessary
utilization of employees . . . thrown open the areas where employees
13
V.
We reject Appellant's challenges to the district court's treatment of
his polygraph evidence. Appellant argues that the district court com-
mitted two errors with regard to his effort to have polygraph evidence
admitted.8 First, Appellant asserts that the district court improperly
refused admission of his polygraph evidence at trial and asks us to
reconsider the Fourth Circuit's per se ban on such evidence. Second,
Appellant challenges the district court's refusal to consider the poly-
graph evidence at sentencing as a basis for giving Appellant a 2-level
decrease for Acceptance of Responsibility under U.S.S.G. § 3E1.1.
A.
We review a district court's evidentiary rulings for an abuse of dis-
cretion. United States v. ReBrook, 58 F.3d 961, 967 (4th Cir. 1995).
The district court refused to admit polygraph evidence at trial, citing
this circuit's per se ban on polygraph evidence. See United States v.
Sanchez, 118 F.3d 192, 197 (4th Cir. 1997); United States v.
Chambers, 985 F.2d 1263, 1270-71 (4th Cir. 1993); United States v.
A & S Council Oil Co., 947 F.2d 1128, 1134 (4th Cir. 1991); United
States v. Herrera, 832 F.2d 833, 835 (4th Cir. 1987); United States
v. Tedder, 801 F.2d 1437, 1444-45 (4th Cir. 1986).
Appellant now asks this Court to reconsider the Fourth Circuit's
per se ban. Ruhe has picked a particularly inopportune time to make
this request because the Supreme Court has recently held that such
per se bans on polygraph tests are permissible. See generally United
States v. Scheffer, ___ U.S. ___, 118 S. Ct. 1261 (1998). In any event,
_________________________________________________________________
alone are permitted to the warrantless scrutiny of government agents"),
with id. at 314-15 ("What [employees] observe in their daily functions is
undoubtedly beyond the employer's reasonable expectation of privacy."),
and United States v. Jenkins, 46 F.3d 447, 455-456 (5th Cir. 1995) (find-
ing employee-assisted search constitutional based on theory that
employee could consent to the search).
8 The polygraph evidence consisted of Appellant's answers to questions
concerning his knowledge regarding the fact that the aircraft parts were
stolen.
14
as a simple panel, we are bound by prior precedent from other panels
in this circuit absent contrary law from an en banc or Supreme Court
decision. See Busby v. Crown Supply, Inc., 896 F.2d 833, 840-41 (4th
Cir. 1990) (en banc section of the opinion). 9
B.
We review a district court's decision to grant or deny an adjust-
ment for acceptance of responsibility for clear error. United States v.
Castner, 50 F.3d 1267, 1279 (4th Cir. 1995).
Appellant contends that it was clear error for the district court to
refuse to consider his polygraph evidence at sentencing. Appellant
contends that the polygraph evidence clearly entitles him to a down-
ward departure for acceptance of responsibility.
Regardless of whether the district court should have considered the
polygraph evidence at sentencing, it was not clearly erroneous for the
district court to refuse to use that evidence to grant a two-level
decrease for Acceptance of Responsibility. As the district court noted
in its Memorandum Opinion and Order, Appellant's polygraph evi-
dence did not at all show that he accepted responsibility for his crime.
In fact, the polygraph evidence at issue only indicated Appellant's
continued denial of responsibility because it only served as evidence
that he did not realize that the aircraft parts were stolen -- i.e., that
he did not commit the crime for which he was charged. Therefore, the
district court did not commit any error in denying to grant Appellant
a decrease for Acceptance of Responsibility based on the polygraph
evidence.
VI.
Ruhe challenged the jury's verdict with a motion for judgment of
acquittal, see Fed. R. Crim. P. 29, claiming the government presented
_________________________________________________________________
9 In United States v. Toth, 91 F.3d 136, 1996 WL 426865 (4th Cir.
1996) (unpublished table disposition), it was suggested that a panel could
rely upon Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579
(1993), to alter the circuit's law on polygraph evidence. Ruhe has not
advanced that argument and we do not pass upon it.
15
insufficient evidence to convict him. When assessing the sufficiency
of the evidence of a criminal conviction on direct review, "[t]he ver-
dict of [the] jury must be sustained if there is substantial evidence,
taking the view most favorable to the Government, to support it."
Glasser v. United States, 315 U.S. 60, 80 (1942). That is, we must
examine whether a rational fact finder could fairly find the essential
elements of the crimes charged beyond a reasonable doubt. See
United States v. Burgos, 94 F.3d 849, 863 (4th Cir. 1996) (en banc);
United States v. Kennedy, 32 F.3d 876, 886 (4th Cir. 1991). The court
must "give[ ] full play to the responsibility of the trier of fact fairly
to resolve conflicts in the testimony, to weigh the evidence, and to
draw reasonable inferences from basic facts to ultimate facts."
Jackson v. Virginia, 443 U.S. 307, 319 (1979).
Appellant argues that the government failed to produce evidence
sufficient to prove beyond a reasonable doubt that each element of the
offense had been satisfied.10 In particular, Appellant argues (1) that
there was insufficient evidence that he knew the purpose of the agree-
ment and then deliberately joined the conspiracy agreement or under-
standing, and (2) that there was insufficient evidence that he knew the
aircraft parts were stolen.
We affirm the district court's rejection of this motion. The govern-
ment presented substantial evidence upon which a reasonable jury
could have found that Appellant either knew that the parts were stolen
or was deliberately blind to that fact. Further, there was substantial
evidence that Appellant deliberately continued to take part in the
ongoing criminal enterprise to obtain the stolen goods. Such evidence
includes the facts that the red-tagged nature of the parts alerted even
unknowledgeable employees that the parts were from a questionable
source; that Appellant paid Byard directly rather than Pratt & Whit-
ney; that he dictated the price to be paid; that he refused to allow
employees to contact Pratt & Whitney; and that Byard had indicated
that he would have difficulty obtaining parts in the future due to
increased security.
_________________________________________________________________
10 Ruhe's challenge to the jurisdictional element of the crime is dis-
cussed infra in section VII.
16
VII.
Finally, Appellant contends that the district court incorrectly calcu-
lated the amount of the loss for jurisdictional and sentencing pur-
poses. The federal courts only have subject matter jurisdiction when
the value of the stolen goods is $5,000 or more. 18 U.S.C.A. § 2314.
Additionally, the length of a defendant's sentence under the Sentenc-
ing Guidelines § 2B1.1 is contingent upon the value of the loss.
According to Appellant, because of the incorrect valuation of the loss
the district court erroneously increased his sentence by eight levels.
A.
Since the jurisdictional value of the goods is an element of the
crime, United States v. Wentz, 800 F.2d 1325, 1326 (4th Cir. 1986),
we review the record to see if there was substantial evidence such that
a rational juror could find beyond a reasonable doubt that the jurisdic-
tional value had been satisfied. See Burgos, 94 F.3d at 863; Kennedy,
32 F.3d at 886.
The district court held that the jury could have concluded that the
jurisdictional value had been satisfied if they valued the stolen aircraft
at the fair market value of that property as evidenced by the amount
that Appellant actually paid for that property.
Appellant argues that the most the jury could have concluded the
parts were worth was $170. Ruhe notes that most of the property
stolen was "red-tagged," meaning destined for scrap and mutilation.
He points to evidence at trial that Pratt & Whitney sells mutilated
scrapped parts at 85 cents per pound, which would put the total value
of the 200 pounds of goods received at between $85 and $170. Appel-
lant points to United States v. Clutterbuck, 421 F.2d 485 (9th Cir.
1970), to support his position. Clutterbuck has facts very similar to
those at bar. In Clutterbuck, the defendant was charged with stealing
aircraft parts which had been used and discarded as outworn and then
held out for sale as steel scrap. The defendant argued that the jurisdic-
tional amount had not been satisfied because the parts had to be val-
ued as steel scrap rather than as classified, segregated parts. The
Ninth Circuit agreed:
17
We hold that where as here machine parts have been used
by the government to the point where their usefulness to the
government as such has been exhausted; and where they
have been discarded and held for disposal as scrap rather
than as classified, segregated parts, they have lost their orig-
inal identity and have been transformed into scrap. . . . The
fact that a discriminating thief pawing over a scrap bin can
identify some of the scrap items as [particular aircraft parts]
and confine his theft to them does not change the result.
Neither the thief's purpose, nor potential retransformation or
use alters the fact that the thing of value stolen from the
government constituted steel scrap.
Clutterbuck, 421 F.2d at 486. Appellant also notes that in United
States v. Carawan, 64 F.3d 660, 1995 WL 478014 (unpublished table
disposition) (4th Cir. 1995), the panel used language indicating an
agreement with the Clutterbuck decision.
We affirm the district court's determination that the jury could
have concluded beyond a reasonable doubt that the property for juris-
dictional purposes had a value of $86,100, the value paid by Appel-
lant. For violations of § 2314, the value of stolen property is defined,
as the "face, par, or market value, whichever is greatest." 18 U.S.C.A.
§ 2311 (West 1970) (emphasis added). The standard test for market
value is the price a willing buyer would pay a willing seller at the
time and place the property was stolen. Wentz , 800 F.2d at 1326;
United States v. Cummings, 798 F.2d 413, 415 (10th Cir. 1986). Even
though the parts were destined for sale as scrap, they also had an inde-
pendent resale value in the overhaul market as evidenced by Appel-
lant's purchases.
While Clutterbuck's facts are closely analogous, it really deals with
a different legal issue -- whether a cost price (i.e., original cost)
could be used as the valuation method. See Clutterbuck, 421 F.2d at
486. The government has not sought to have cost pricing used to
determine value, only the amounts paid by Appellant. Clutterbuck is
further distinguishable because there the parts at issue were to be sold
exactly as is for scrap. By contrast, in the case at bar, the parts would
be mutilated before being sold as scrap. In their condition when sold,
Appellant, a willing buyer paid over $5,000 for the goods to a willing
18
seller.11 Cf. United States v. Robie, 166 F.3d 444, 449-52 (2d Cir.
1999) (holding that jury could infer that stolen, misprinted stamps that
were worthless to the Postal Service nevertheless had a jurisdictional
value of more than $5,000 because the defendant was aware that the
stamps could be sold for a price greater than the jurisdictional
amount). Therefore, for jurisdictional purposes there was substantial
evidence such that the jury could find that the jurisdictional value had
been satisfied.
B.
Appellant also challenges the determination of the value of the
goods for sentencing purposes. Determining the value of stolen prop-
erty for sentencing purposes is a factual issue reviewed for clear error
when the facts are disputed, but a question of law reviewed de novo
when the facts are undisputed. See United States v. Chatterji, 46 F.3d
1336, 1340 (4th Cir. 1995). Here the facts are undisputed, so review
is de novo. Under the Sentencing Guidelines, a court need not deter-
mine the value of stolen goods with precision, but need only make a
reasonable estimate of the value given available information.
U.S.S.G. § 2B1.1, comment (n.3).
The district court applied the same valuation approach for sentenc-
ing purposes that it had presumed the jury had used for jurisdictional
purposes. We find this approach to be erroneous and therefore vacate
Appellant's sentence and remand for re-sentencing.
There is no statutory reason why the value of certain goods for
jurisdictional purposes should be the same as the value for sentencing
purposes. In fact, there are good reasons why these values should be
different. See, e.g., Robie, 166 F.3d at 455 (holding that district court
erred in sentencing defendant based on the value of stolen goods to
the defendant when the goods were valueless to the victim, even
_________________________________________________________________
11 Appellant argues that Byard was not a "willing seller" because he
stole the property and Pratt & Whitney, the rightful owner, would not
have sold these parts. Testimony at trial showed, however, that Byard's
status as a thief meant simply that he accepted less for the goods than
would have a willing seller who had purchased the goods through legiti-
mate channels.
19
though the court had previously determined that a finding of the juris-
dictional amount could be based on the value of the goods to the
defendant). First and foremost, the definitions are different. For juris-
dictional purposes, 18 U.S.C.A. § 2311 requires a determination of
the "value" of the goods. As noted above, value is defined as "face,
par, or market value." By contrast, the Sentencing Guidelines are con-
cerned with the "loss" to the victim. U.S.S.G.§ 2B1.1(b)(1). See also
Frank O. Bowman, III, Coping with "Loss": A Re-examination of Sen-
tencing Federal Economic Crimes Under the Guidelines , 51 Vand. L.
Rev. 461, 463 (1998) (stating that the basic proposition accepted by
the Sentencing Commission is that the focus of sentences should be
on the magnitude and nature of the economic deprivation caused by
the crime). Cf. Husten v. United States, 95 F.2d 168, 170 (8th Cir.
1938) (noting that valuation for purposes of 18 U.S.C. § 2314 is not
concerned with loss to the victim). The general rule is that loss is
determined by measuring the harm to the victim. See U.S.S.G.
§ 2B1.1, comment (n.2).
Admittedly, the application notes to the Sentencing Guidelines
define "loss" as the "value" of the property taken, ordinarily the "fair
market value." U.S.S.G. § 2B1.1, comment (n.2). In the Guidelines
context, however, "value" and "fair market value" are merely methods
for determining the loss to the victim. See, e.g., United States v.
Parsons, 109 F.3d 1002, 1003 (4th Cir. 1997); Chatterji, 46 F.3d at
1340;12 United States v. Haddock, 12 F.3d 950, 960 (10th Cir. 1993).
A second important difference is that, for jurisdictional purposes,
the statute directs the court to use whichever value is the greatest. 18
U.S.C.A. § 2311. The Sentencing Guidelines contain no such com-
mand. The Sentencing Guidelines are not mean-spirited, seeking to
keep a defendant behind bars for as much time as conceivably possi-
ble; they are concerned with the severity of the harm caused by the
defendant. See Bowman, supra. Thus, rather than choosing the great-
est value offered by different methodologies, the Guidelines instruct
the courts to find the value that most closely represents the loss to the
victim. See, e.g., Chatterji, 46 F.3d at 1340 ("[G]ain is only an alter-
_________________________________________________________________
12 Both Parsons and Chatterji involved the word "loss" as used in
U.S.S.G. § 2F1.1. Application Note 7 of that section states that "loss" for
purposes of § 2F1.1 is the same as "loss" for purposes of § 2B1.1.
20
native measure of some actual, probable, or intended loss; it is not a
proxy for loss when there is none."); United States v. Robie, 166 F.3d
444, 455 (2d Cir. 1999) (rejecting use of defendant's gain when no
economic loss to the victim); United States v. Andersen, 45 F.3d 217,
221-22 (7th Cir. 1995) (where there is no evidence of financial loss
to the victim, sentencing enhancement based on defendant's gain is
not appropriate).
The district court relied on United States v. Barnes, 116 F.3d 473,
1997 WL 337454 (4th Cir. 1997) (unpublished table disposition), to
support its decision. In Barnes, the defendants stole computer mem-
ory modules from their employer and sold them for large sums of
money. The defendants maintained that at least some of these mod-
ules had been rejected and would have been thrown away, but the
defendants were able to repair them. The district court found that the
majority of the modules were in good condition when stolen. The
panel rejected the argument on appeal that the "loss" was zero
because the faulty chips would only have been discarded. The panel
instead held that the "loss" for sentencing purposes was the value
which the defendants received upon resale of the chips:
Even if all the stolen materials were genuine rejects which
Mitsubishi would not have marketed, they still had a market
value. Whether Mitsubishi intended to sell them or recycle
them is not determinative. Mitsubishi suffered a loss by hav-
ing its products stolen and the sale of these products estab-
lished their fair market value.
Barnes, 116 F.3d at 473.
We are not controlled here by Barnes. First, unpublished opinions
are not binding precedent in this circuit. See Hogan v. Carter, 85 F.3d
1113, 1118 (4th Cir. 1996) (Motz, J., concurring in the judgment); 4th
Cir. R. 36(c). Second, the above-quoted passage is dicta. The facts in
Barnes showed that many of the modules stolen were not defective
and would have been sold by the victim absent the theft. Finally, to
the extent that Barnes is inconsistent with Chatterji's remonstration
that the defendant's gain is not a proxy for loss when there is none,
see Chatterji, 46 F.3d at 1340, we are controlled by the published
decision. See also Robie, 166 F.3d at 455.
21
Therefore, we remand for re-sentencing with instructions that the
district court consider the loss to the victim, here Pratt & Whitney, for
sentencing purposes. Of importance to decide the issue may be the
extent to which, in each case, the instruction to mutilate by Pratt &
Whitney had been accomplished when the part was stolen. We note
that for those parts which Pratt & Whitney would only have sold for
scrap, the scrap value seems to be the most accurate method of valu-
ing loss. Indeed, in the presentence report, counsel for Pratt & Whit-
ney stated that the company suffered no loss. The district court will
have to sort through the facts on re-sentencing.
AFFIRMED IN PART AND VACATED AND
REMANDED IN PART WITH INSTRUCTIONS
NIEMEYER, Circuit Judge, concurring in part and dissenting in part:
I concur in Parts I through VI and VII.A. I respectfully dissent
from Part VII.B.
My disagreement is with the majority's interpretation of U.S.S.G.
§ 2B1.1 where it measures the "loss" for sentencing purposes by the
value of goods to the victim. While the majority states categorically
that § 2B1.1 is "concerned with the ``loss' to the victim," supra at 20
(emphasis added), the Sentencing Guideline and the Application Note
to it permit no such interpretation, and for good reason. By misinter-
preting the Guideline, the majority's opinion improperly reduces the
sentence required for the offense for which the defendant was con-
victed.
Ruhe was convicted of dealing in stolen property having a value
greater than $5,000 in interstate commerce. See 18 U.S.C. § 2314.
The applicable Sentencing Guideline for that offense reads in part, "If
the loss exceeds $100, increase the offense level as follows: [a chart
of loss values and corresponding sentencing enhancements then fol-
lows]." U.S.S.G. § 2B1.1(b)(1) (emphasis added). The Application
Note defines "loss" to mean "the value of the property taken." It goes
on to say: "Ordinarily, when property is taken or destroyed the loss
is the fair market value of the particular property at issue. Where the
market value is difficult to ascertain or inadequate to measure harm
to the victim, the court may measure loss in some other way, such as
22
reasonable replacement cost to the victim." U.S.S.G. § 2B1.1, com-
ment. (n.2) (emphasis added). This comment makes it clear that the
general rule for valuing loss requires the court to determine the mar-
ket value of the stolen property. Only where market value is difficult
to ascertain or where the market value understates the harm to the
victim is a court permitted to use an alternative valuation method. A
court is not permitted to ignore the mandated fair market valuation
method simply to avoid being "mean-spirited" toward the criminals
who trafficked in stolen property. See supra at 20. Where dealers buy
and sell stolen property, there can be no difficulty determining the
market value of the property, and there generally would be no claim
that the market value understates the harm to victims of the defen-
dants' trafficking offense, such as the purchasers of the stolen goods
or their competitors. While theft has one victim, the dealing in stolen
property has others. But regardless of the value of stolen goods "to
the victim," when they have value in the marketplace, as established
by multiple transactions among dealers engaging in stolen property,
the Guideline necessarily intends that the sentencing be measured by
that "fair market value."
The majority's reliance on United States v. Chatterji, 46 F.3d 1336
(4th Cir. 1995), is misplaced as Chatterji did not deal with any theft
of or dealing in stolen goods. Rather, in Chatterji, the defendant's
fraud consisted of conducting a drug test improperly in an effort to
obtain quick FDA approval of one drug and misleading the FDA as
to a formula change of another drug product. See id. at 1338-39.
Although there was fraud, nothing was taken, and thus there was no
"loss" under the Sentencing Guidelines. Even if one were to contend
that FDA approval was "stolen," FDA approval cannot be bought or
sold, even by the FDA, and thus has no market value. In contrast, the
defendant was convicted of trafficking in stolen airplane parts. Some-
thing was stolen, sold, and resold, providing a readily ascertainable
value. This case, while not at all like Chatterji, is much more like
United States v. Barnes, 116 F.3d 473, 1997 WL 337454 (4th Cir.
1997) (unpublished), where we held that the proper valuation of the
goods stolen by the defendants was the amount of money that they
had received for the goods (i.e. the market value) even though it
appeared that the goods had been worth less to the goods' true owner.
I would further note that the absence of any suggestion in the
Guidelines and Application Notes that loss valuation is to be limited
23
could only be a deliberate decision by the Sentencing Commission.
The crime in the case before us was indeed not even a theft crime but
a crime for dealing in interstate commerce in stolen goods. See 18
U.S.C. § 2314. While the victim of the original theft was Pratt &
Whitney, the parties to the transactions which were made criminal by
§ 2314 were Ruhe and Byard, and their victims were subsequent pur-
chasers and customers, as well as competitors in the market. The
essence of this crime is dealing, not stealing. Accordingly, it makes
yet less sense for the majority to read into the Guideline a limitation
that focuses only on the subjective financial valuation of Pratt &
Whitney. Moreover, while Pratt & Whitney was the victim of the
original theft, it was not the victim of a market that deals in stolen
goods. Accordingly, "loss" as defined in U.S.S.G. § 2B1.1 does not,
and cannot be, limited to "loss to the victim."
Because the parties to the illegal transactions in this case dealt in
stolen goods worth more than $70,000 as evidenced by the money
they exchanged, thereby establishing a floor for the goods' market
value, the "loss" as used in U.S.S.G. § 2B1.1 and defined by the
Application Note is over $70,000. See U.S.S.G. § 2B1.1, comment.
(n.2) (defining loss as fair market value).
I would affirm the district court's sentence.
24