United States v. Zehrbach

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 02-4863
DARUS ZEHRBACH,
Defendant-Appellant.

UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 02-4864
LEE ANN DEMUS,
Defendant-Appellant.

Appeals from the United States District Court
for the Northern District of West Virginia, at Clarksburg.
Irene M. Keeley, Chief District Judge.
(CR-00-33)
Argued: February 27, 2004
Decided: May 11, 2004
Before WIDENER, WILKINSON, and GREGORY, Circuit Judges.
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Terrance A. Bostic, Tampa, Florida; James Mack Pool,
Clarksburg, West Virginia, for Appellants. Zelda Elizabeth Wesley,
2 UNITED STATES v. ZEHRBACH
Assistant United States Attorney, Clarksburg, West Virginia, for
Appellee. ON BRIEF: Thomas E. Johnston, United States Attorney,
Clarksburg, West Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Darus Zehrbach ("Zehrbach"), an airplane engine salesman, and
Lee Ann Demus ("Demus"), his secretary/financial assistant (collec-
tively, "Defendants"), devised a scheme to defraud eight customers
(the "victims") out of money, in the form of deposits and progress
payments, which the victims intended to apply toward the purchase
of newly developed "kit" airplane engines. Essentially, Defendants
advised the victims that they had developed a specific engine, which
they had, in fact, never developed. They induced each victim to con-
tract for the allegedly developed engine and took deposits and pay-
ments from them for the alleged purpose of assembling these engines.
None of the victims, however, ever received their contracted for
engine or a refund, despite their requests. Upon further investigation,
authorities discovered evidence suggesting that Defendants had no
intention of producing any of the victims’ engines, that they misrepre-
sented the development of such engines, and that they had misused
the payments received from the victims for their engines. Addition-
ally, the victims were never informed that Demus, who handled the
finances, had a prior conviction for embezzlement and forgery. Nor
were the victims ever informed that, while he was supposed to be
assembling engines, Zehrbach was actually serving time in prison for
a prior bankruptcy fraud conviction. Ultimately, both Zehrbach and
Demus, were indicted by a federal grand jury on two counts of mail
fraud, and conspiracy, after authorities learned that, despite their
requests, none of the victims received their engines or a refund. Both
defendants were convicted by jury trial. On appeal, Defendants con-
UNITED STATES v. ZEHRBACH 3
tend that: (1) there is insufficient evidence to support the jury verdict;
(2) the district court erred by denying their motion for a new trial; (3)
the district court made evidentiary errors, the cumulative effect of
which violated their right to a fair trial; and (4) the district court made
sentencing errors. We conclude that: (1) the evidence is sufficient to
support the verdict; (2) Defendants were not entitled to a new trial;
(3) the district court’s evidentiary rulings were not an abuse of discre-
tion and, therefore, did not violate due process; and (4) the district
court did not commit reversible error during sentencing. We, there-
fore, affirm.
I.
In addition to their sentencing issues, Defendants challenge the suf-
ficiency of the evidence supporting their convictions and contend that
they are entitled to a new trial. Thus, we find it necessary to lay out
the facts relating to each of the victims in some detail. We, of course,
view the evidence in the light most favorable to sustaining the convic-
tion. United States v. Williams, 342 F.3d 350, 355 (4th Cir. 2003); see
also United States v. Lomax, 293 F.3d 701, 705 (4th Cir. 2002).
Defendants’ fraudulent scheme was facilitated using Light Power
Engine Corporation ("LPE"), an unincorporated West Virginia busi-
ness entity.1 Zehrbach was the president of LPE and Demus was
LPE’s general manager.2 LPE’s customers included recreational
pilots, racers and others.
1
As discussed infra, it is undisputed that LPE was not incorporated
through the office of the West Virginia Secretary of State. Defendants
contend, however, that their business was legitimate because the state
taxing authorities sent them tax bills. It is undisputed, however, that LPE
did not pay any taxes during the years it collected money from the vic-
tims.
2
Defendants contend that Demus was an independent contractor and
that she only worked for LPE approximately six hours per week. She
argues that she had a separate business, of which she was the sole owner,
whereby she performed administrative and bookkeeping tasks for various
businesses, including LPE. The district court, however, found that
Demus was a principal participant in LPE and the scheme to defraud.
4 UNITED STATES v. ZEHRBACH
The scheme was designed to mislead customers about the status of
LPE’s engines, so that customers would pay for an engine that LPE
had no intention of delivering. Zehrbach promised customers that he
would assemble and produce operational engines to certain specifica-
tions appropriate for experimental-class aircraft.
Between 1994 and 1996, LPE contracted with eight individuals
wishing to purchase kit airplane engines. When the contracts were
executed, Zehrbach advised the victims that the engines were already
fully-developed and only needed to be assembled. In fact, the engines
were not developed and a critical component of the engine, the "A-
Section," had not been assembled or tested. Nevertheless, the victims
were advised that these engines would meet a specific horsepower
and weight, and would run for a specified length of time before the
engines would have to be overhauled (time before overhaul or
"TBO"). The Government alleged that all of these representations
were false and because Zehrbach did not possess an operational
engine, he could not have known the TBO.3
The victims were also misled regarding how their money would be
handled. Each contract required a down payment and progress pay-
ments. Some victims were advised that their money would be held in
an escrow account until the engines were delivered. Others were
advised that their funds would not be used for salary, wages,
expenses, etc. In fact, some of the victims’ funds were deposited into
an escrow account from which Demus would make withdrawals and
deposit those funds into her personal account. In Spring 1995, for
example, Demus deposited approximately $22,000 from the escrow
account into her personal checking account.
As discussed above, the victims were never advised that Demus
had prior convictions for embezzlement and forgery. Moreover, the
victims were never advised that Zehrbach had been convicted of
bankruptcy fraud and conspiracy and was out on bond pending
appeal. Nor were they informed that he would have to report to fed-
eral prison—during the time he was supposedly manufacturing their
airplane engines—if he lost his appeal. And, in January 1995, Zehr-
3
To calculate TBO, there must be an operational engine which can run
until it requires overhauling.
UNITED STATES v. ZEHRBACH 5
bach lost his appeal and was incarcerated. He never informed the vic-
tims that he was incarcerated. Instead, he sent them letters stating that
he had suffered a "sudden personal crisis," but promising that produc-
tion would continue "unabated." Zehrbach and Demus nonetheless
continued to mislead the victims by accepting money for work they
had no intention of completing and by sending letters indicating that
the engines would be completed as promised.
In February 1995, for example, LPE contracted with two victims,
Dr. Richard Van Grouw and Robert Horton. Neither victim was
advised of Zehrbach’s pending incarceration. And, both victims paid
LPE deposits for their engines. In March 1995, Demus mailed letters
requesting progress payments from several other victims who had
previously contracted with LPE for engines in 1994, including: Paul
Fagerstrom, Dick Simkanin, Gleason McMichael, Marshall Mich-
aelian and Albert Printz. Each of these victims mailed their progress
payments to LPE expecting the engines were ready for assembly. In
May 1995, Zehrbach began serving his federal sentence at the Federal
Correctional Institution in Morgantown, West Virginia. In June 1995,
however, Demus mailed progress letters to Van Grouw and Horton
requesting their progress payments. Both mailed progress payments
to LPE, unaware of the fact that Zerhbach was in prison, that no
engines had been produced, and that LPE did not have an engine that
was operational.
At various times after August 1995, several victims became aware
that Zehrbach was in jail and that their engines were not operational
or did not exist. The victims requested assurances that: (1) LPE could
comply with the terms of the contract, and (2) their money was
secure. Zehrbach and Demus were unable to satisfy the victims’ con-
cerns and the victims thereafter requested either their engines or a
refund of their deposits. Zehrbach and Demus never delivered an
engine to any of the victims nor did they return any of their money.
Also, in 1996, while Zehrbach was incarcerated,4 LPE contracted
with James Harms for an engine. Harms paid a deposit of $10,083.00,
and like the other victims, he never received an engine or a refund.
4
Zehrbach received two criminal history points for committing this
offense while in prison. J.A. at 2105.
6 UNITED STATES v. ZEHRBACH
Ultimately, the total of payments actually made to LPE by all of the
victims was approximately $224,148.10, none of which was ever
refunded, and no victim received an airplane engine from LPE.
On December 6, 2000, Zehrbach and Demus were indicted by a
federal grand jury on two counts of mail fraud and conspiracy to com-
mit mail fraud in violation of Title 18, United States Code, Sections
371 and 1341. On March 7, 2002, a jury trial commenced. The trial
concluded on March 26, 2002. Both Zehrbach and Demus were con-
victed on both counts of the Indictment.
After the trial, the district court found that Zehrbach and Demus
obstructed justice by fabricating documents for the trial and introduc-
ing some of those documents into evidence. The fabricated documents
were offered to show that the engines were not completed because:
"(1) the victims wanted engines not safe [sic], (2) the victims’ indeci-
siveness, or (3) the victims failed to abide by the terms of the con-
tracts." J.A. at 2094. The fabricated documents also alleged that
Zehrbach advised the victims of his conviction and that he had to
report to jail. The fabricated documents were purportedly dated in
1994 or 1995, however, the victims did not become aware of these
documents until 2001, while preparing for the criminal trial.
Ultimately, Zehrbach was sentenced to a term of imprisonment of
51 months, to be followed by three years supervised release, and was
ordered to pay restitution in the amount of $224,148.10. Demus was
sentenced to a term of imprisonment of 33 months, to be followed by
three years supervised release, and was ordered to pay restitution in
the amount of $224,148.10. Defendants timely appealed.
II.
When reviewing the sufficiency of the evidence following a con-
viction, this Court views "the evidence and the reasonable inferences
to be drawn therefrom in the light most favorable to the Government."
United States v. Lomax, 293 F.3d 701, 705 (4th Cir. 2002) (quoting
United States v. Burgos, 94 F.3d 849, 863 (4th Cir. 1996) (en banc))
(internal quotation marks omitted). And, we must sustain the fact
finder’s verdict if "any rational trier of fact could have found the
essential elements of the crime beyond a reasonable doubt." United
UNITED STATES v. ZEHRBACH 7
States v. Myers, 280 F.3d 407, 415 (4th Cir. 2002) (quotation omit-
ted). Accord Glasser v. United States, 315 U.S. 60, 80 (1942) ("We
must sustain the jury’s verdict so long as there is substantial evidence
to support it."); see also, e.g., Burgos, 94 F.3d at 862-63. Further-
more, "determinations of credibility are within the sole province of
the [fact finder] and are not susceptible to judicial review." Lomax,
supra, (quotation omitted). A defendant challenging the sufficiency of
the evidence to support a conviction bears "a heavy burden." United
States v. Hoyte, 51 F.3d 1239, 1245 (4th Cir. 1995).
To prove a conspiracy, the Government must show an agreement
to do something illegal, willing participation by the defendant, and an
overt act in furtherance of the agreement. United States v. Meredith,
824 F.2d 1418, 1428 (4th Cir. 1987). Knowledge and participation
may be shown by circumstantial evidence. Id. Once a conspiracy has
been established, it is only necessary to show a "slight connection
between the defendant and the conspiracy to support conviction."
United States v. Brooks, 957 F.2d 1138, 1147 (4th Cir. 1992). Mail
fraud requires a showing of (1) knowing participation in a scheme to
defraud and (2) a mailing in furtherance of the scheme. United States
v. Dozie, 27 F.3d 95, 97 (4th Cir. 1994) (citing 18 U.S.C. § 1341 and
United States v. Odom, 736 F.2d 104, 109 (4th Cir. 1984)).
With these principles in mind, we turn first to Defendants’ claim
that the evidence at trial was insufficient as a matter of law to support
the verdict against them on the conspiracy and substantive mail fraud
counts. Afterward, we address their motion for a new trial.
A.
Defendants contend that there was insufficient evidence to support
the jury’s verdict as to Count One (conspiracy to commit mail fraud)
and Count Two (substantive mail fraud). Specifically, Defendants
argue that the Government’s failure of proof is "on the element of
intent." Appellant’s Br. at 29. Thus, Defendants assert that the district
court erred by denying their motions for judgment of acquittal. We
disagree.
An essential element of mail fraud and conspiracy to commit mail
fraud is "knowing participation in a scheme to defraud." Dozie, 27
8 UNITED STATES v. ZEHRBACH
F.3d at 97; United States v. Peters, 962 F.2d 1410, 1414 (9th Cir.
1992); United States v. Bush, 522 F.2d 641 (7th Cir. 1975). Because
direct evidence of intent is scarce, the Government may of course rely
on circumstantial evidence to carry its burden. United States v. Dia-
mond, 788 F.2d 1025, 1030 (4th Cir. 1986). Thus, "intent to defraud
may be inferred from a defendant’s statements and conduct." Peters,
962 F.2d at 1414 (citation omitted); see, e.g., United States v. Van
Dyke, 605 F.2d 220, 222-25 (6th Cir. 1979) (intent to defraud inferred
from evidence, including the defendant’s failure to respond to cus-
tomer complaints); United States v. Dial, 757 F.2d 163, 170 (7th Cir.
1985) (intent to defraud inferred from evidence that defendant took
steps to conceal illegal activities).
In order to convict Defendants of mail fraud, it is enough that the
Government charged and the jury found either that a victim was actu-
ally deprived of money or property or that Defendants intended to
defraud a victim of the same. United States v. Utz, 886 F.2d 1148,
1151 (9th Cir. 1989). A scheme to defraud, whether successful or not
remains within the purview of the mail fraud statute as long as the
jury finds an intent to obtain money or property from the victim of
Defendants’ deceit. Id. Thus, in a prosecution for mail fraud, the nec-
essary intent may be shown by evidence that Defendants devised a
fraudulent scheme or participated in it with knowledge of its fraudu-
lent nature. United States v. Perkal, 530 F.2d 604, 606 (4th Cir.
1974)("It is well settled that anyone who ‘knowingly and intention-
ally’ participates in the execution of a fraudulent scheme involving
the use of the mails comes within the prohibition of this section, and
this is true whether the indictment charges a conspiracy or not.");
United States v. Sturm, 671 F.2d 749, 751 (3d Cir. 1992).
Finally, under 18 U.S.C. § 1341, the fraudulent scheme need not be
one which includes an affirmative misrepresentation of fact since it
is only necessary for the Government to prove the scheme was calcu-
lated to deceive persons of ordinary prudence. United States v.
Bohonus, 628 F.2d 1167, 1172 (9th Cir. 1980). Similarly, deceitful
concealment of material facts is not constructive fraud but actual
fraud. Id.The Government contends that Defendants participated in a scheme
to defraud kit airplane engine purchasers by offering to sell airplane
UNITED STATES v. ZEHRBACH 9
engines they did not intend to deliver. In support of this charge, the
Government presented evidence that Defendants, through LPE,
entered into contracts to sell airplane engines to eight individuals. To
procure those contracts, Defendants advised the purchasers that the
engines were fully developed and only needed to be assembled, when
in fact the engines offered had not even been developed. Defendants,
however, contend that there was insufficient evidence from which a
rational trier of fact could conclude beyond a reasonable doubt that
LPE did not intend to deliver the engines.5
As to victim Harms, Defendants assert that "Zehrbach did not
intend to or actually defraud Harms." Appellants’ Br. at 29. It is
undisputed that Harms made a down payment for an engine, as
required by Defendants. Likewise, it is undisputed that Harms
requested modifications and a delay in the production, which Zehr-
bach agreed to accommodate. What is disputed, however, is why
Harms never received the engine or a refund of his money. According
to Defendants, "Harms ceased communication with Zehrbach and did
not make any additional payments on the engine. [And,] Zehrbach
made repeated attempts to contact Harms regarding his engine, but
Harms did not respond." Appellants’ Br. at 29. The Government,
however, adduced evidence that, contrary to Zerhbach’s representa-
tion that he had developed an engine that would meet his customer’s
requirements, no such engine was ever developed, tested or opera-
tional. J.A. at 238, 550, 649, 793-95. Thus, whatever Harms’ inten-
tions were, the Government contends that Zehrbach never intended
to deliver the engine Harms paid for. And, there was competent evi-
dence that, even after an extended delay, Harms demanded his engine
or a refund, yet LPE never refunded his money or delivered the
engine (or at least that portion thereof that Harms actually paid for).
Indeed, none of the victims received an engine or a refund, despite
their requests.6 Even Defendants concede that there was a complete
5
Demus’ conviction rises and falls on Zehrbach’s insofar as she was
alleged to be a co-conspirator of the scheme to defraud.
6
As to some of the victims’ claims, "Zehrbach testified it was his belief
that he was justified in retaining the engine parts and refusing refunds
due to cancellations, repudiations, and/or other breaches of contract
. . . ." Appellants’ Br. at 32. From the record, however, it seems that
Zehrbach, by failing to deliver the engines, materially breached the con-
tract. The victims each paid their deposit payments and progress pay-
ments as required and, therefore, it does not appear that any victim
materially breached the agreement. Thus, the jury was entitled to disre-
gard Zehrbach’s defense on this point.
10 UNITED STATES v. ZEHRBACH
"failure to deliver the engines . . . . " Appellants’ Br. at 39.7
In a mail fraud prosecution, evidence that the victims suffered
losses and the defendant refused to make good those losses is relevant
to show the defendant’s specific intent to defraud. United States v.
Copple, 24 F.3d 535, 545 (3d Cir. 1994); see also Van Dyke, 605 F.2d
at 222-25 (intent to defraud inferred from evidence, including the
defendant’s failure to respond to customer complaints); Anderson v.
United States, 369 F.2d 11, 15 (8th Cir. 1966)(defendant’s failure to
take any steps to ameliorate the victims’ loss is indicative of fraudu-
lent intent). Thus, a rational jury could infer that because LPE neither
refunded Harms’ money nor delivered any portion of the goods for
which Harms actually tendered payment, they never intended to do
so. The same is true for each victim because no victim received a
refund or an engine or even an explanation or response to their
claims.
The same can be said for each of the victims’ progress payments
for the supposedly "ready to assemble" engines.8 The victims’ con-
tracts each called for progress payments of 50% when the engines
were being assembled. J.A. at 633, 779. When a progress letter was
mailed, the customer was required to mail their 50% payment to LPE
to cover the costs of the engine’s assembly. J.A. at 231, 310, 449,
546. Yet, despite receipt of several progress payments, LPE never
assembled more than one engine. Appellee’s Br. at 15-16. And, it is
7
Defendants contend, however, that this complete failure only consti-
tutes "poor judgment, which does not rise to the level of reckless indif-
ference [or] constitute fraud." Appellants’ Br. at 39.
8
Defendants contend that "the contracts at issue do not state that a
progress payment is due when the engine is ready for assembly . . . the
50% progress payment is due when ‘components are on hand.’" Appel-
lants’ Br. at 38 (citing J.A. at 63). One of the progress letters stated: "We
have been notified by our suppliers that all of the components as required
for the progress payment for your engine will be in our hands by April
14-15. This is to advise you that your progress payment of $21,500.00
is due." Appellant’s Br. at 38. Even if we were to agree with Defendants’
construction of the progress letters, there was insufficient evidence that
any engine components were actually delivered to LPE to manufacture
each of the victims’ engines.
UNITED STATES v. ZEHRBACH 11
undisputed that engine—the somewhat similar "Morris Engine"—was
not the engine that any of the victims contracted for.
As further evidence of fraud and misrepresentation, the Govern-
ment offered evidence showing that Zehrbach represented to the vic-
tims that he had numerous, fully developed operational engines, that
those engines would meet a specific horsepower and weight, and that
those engines had a TBO of 2,200 hours.9 None of this, however, was
true since no such engine had ever been produced by LPE. Instead,
the Government demonstrated that Defendants used these promises to
collect money from the victims who were expecting delivery of such
an engine. Defendants, however, assert that "[t]here is absolutely no
evidence that any of the money collected from the alleged victims
was used for any other purpose than the construction of their
engines." Appellant’s Br. at 31. They also argue that "[i]f Zerhbach
did not intend to deliver the engines and was simply enriching himself
before his period of incarceration, he would not have spent all of the
money collected from the alleged victims on their engines." Id. In
support of this argument, Defendant’s offered at trial invoices totaling
$208,000.00 for parts and services related to the engines at issue. The
total amount of loss, however, was approximately $224,000.00, a dif-
ference of $16,000.00.10
A rational jury could have properly disregarded the defense on this
point, in its entirety. At sentencing, Zehrbach received an enhance-
ment for obstruction of justice, perjury,11 fabricating documents for
the trial, and introducing some of those documents into evidence.12
9
According to the Government, the TBO was important to the victims
because it indicates that the engine had been run numerous times. Appel-
lee’s Br. at 5 (citing J.A. at 764).
10
Defendants contend there were other expenses for which they have
no receipts.
11
Zehrbach attempted to retaliate against the victims by filing a false
statement with the FBI alleging that the victims were engaged in terrorist
activities. J.A. at 2093, 2130. Before the district court, Zehrbach con-
tended that he made the statement several years prior to the incidents at
issue in this case. However, his written statement to the FBI is dated Sep-
tember 15, 2001 and the letter references the attacks on the World Trade
Center. See Government’s Br. at 11-12.
12
The fabricated documents are discussed briefly supra at Part I.
12 UNITED STATES v. ZEHRBACH
J.A. at 2101. Indeed, the documents at issue related to these invoices,
which Defendants’ offered as proof of their intent to perform.
Moreover, much of Defendants’ case rests upon their own testi-
mony explaining their conduct. Yet, both defendants were convicted
of felonies evidencing a history of untruthfulness. Zehrbach was out
on bond pending appeal of his conviction for bankruptcy fraud and
conspiracy during much of the time that these transactions occurred.
Demus had prior embezzlement and forgery convictions. Yet, she was
responsible for sending the progress payment letters, making deposits,
and had signature authority on LPE’s business and escrow accounts.
Moreover, the Government offered evidence that Demus withdrew
the victims funds from LPE’s escrow account and deposited the funds
into her personal checking account.13 Of course, none of this was dis-
closed to the victims. In fact, Zehrbach and Demus assured the vic-
tims that their funds were secure. See J.A. at 469 (letter advising
customers that funds are in an "escrow account" and that they may
"verify this information with Lee Ann"). Additionally, the victims
were never advised that Zerhbach was serving a term of imprisonment
while he was supposed to be manufacturing their engines.14 Based
upon both Defendants’ prior felony convictions and their conduct in
13
Demus contends that since she was the sole shareholder of her com-
pany, which she argues was an independent contractor of LPE, she was
justified in depositing money into her personal account. A rational jury,
however, could have easily concluded that Demus’ conduct was
improper and discredited her testimony accordingly.
14
Demus, at the behest of Zehrbach, sent a letter to the victims stating
that Zehrbach suffered a "sudden personal crisis," and that the engines
would be delivered on time. J.A. at 233, 313, 405, 466, 548, 636, 789.
The letter stated:
Please be advised that I have suffered a sudden, personal crisis
that has caused me to be unavailable and is taking a considerable
amount of my time. Production and deliveries of one hundred
percent of all propellers, air conditioning systems, vibration
dampeners and aircraft kits will continue absolutely unabated for
every single customer. This will mean that engine deliveries will
be minimally affected, if at all.
J.A. at 637.
UNITED STATES v. ZEHRBACH 13
the instant case, a rational jury could have properly discounted or
entirely disregarded Zehrbach’s and Demus’ testimony.
This evidence alone—though there is much more—is sufficient
evidence from which a reasonable fact finder could infer that either
Zehrbach, Demus, or both, intended to defraud the victims. Specifi-
cally, there is evidence of actual fraud insofar as no victim ever
received an engine or a refund, despite their requests. J.A. at 320,
551-56, 639, 800-02. The circumstantial evidence is even more suffi-
cient.15
Accordingly, it is "clear that the trial record contained sufficient
evidence to support [each Defendant’s]16 conviction." Wright v. West,
505 U.S. 277, 296-97 (1992)(citation omitted) (A reviewing court
"faced with a record of historical facts that supports conflicting infer-
15
Defendants’ argument that there is no direct evidence of fraudulent
intent is unavailing. We have often held that direct evidence of intent is
unnecessary. See United States v. Jennings, 160 F.3d 1006, 1014 (4th
Cir. 1998). In Jennings, we held that to prove bribery, the Government
is not required to prove an expressed intention (or agreement) to engage
in a quid pro quo. Such an intent may be established by circumstantial
evidence. Id. (citing United States v. Massey, 89 F.3d 1433, 1439 (11th
Cir. 1996) and United States v. Biaggi, 909 F.2d 662, 684 (2d Cir.
1990)).
The Government established that none of the victims were ever made
aware of Zehrbach’s and Demus’ prior convictions for crimes involving
financial dishonesty; that Demus withdrew money from a business
escrow account and deposited it into her own personal checking account;
and that, Zerbach had not even come close to producing 8 engines for the
8 victims. This evidence is more than sufficient to sustain Defendants’
conviction for conspiracy.
16
The fact that some of the fraudulent events were perpetrated by Zehr-
bach or Demus separately, is of no consequence since each actor in a
conspiracy is liable for the acts of the other done in furtherance of the
conspiracy. Indeed, the elements of fraud may be satisfied either by a
principal acting alone, or through the acts of agents. e Plus, 313 F.3d at
180 (citing Dudley v. Estate Life Ins. Co. of Am., 220 Va. 343, 257
S.E.2d 871, 875 (1979) ("A principal who puts a servant or other agent
in a position which enables the agent . . . to commit a fraud upon third
persons is subject to liability to such third persons for the fraud.")).
14 UNITED STATES v. ZEHRBACH
ences must presume—even if it does not affirmatively appear in the
record—that the trier of fact resolved any such conflicts in favor of
the prosecution, and must defer to that resolution.")
B.
Count II of the Indictment charged that on or about December 15,
1995, Zehrbach and Demus caused to be delivered in the United
States mail a check in the amount of $6,649.00 "for the purpose of
executing and attempting to execute a scheme and artifice to defraud."
Defendants, however, contend that there is insufficient evidence from
which a rational trier of fact could find the elements of mail fraud
beyond a reasonable doubt.
The specific fact challenged under this Count relates to the Govern-
ment’s allegation that one of the victims, Simkanin, did not receive
his propeller, which he paid for. The Defendants’ evidence to the con-
trary consists of a memo jointly authored by two of Defendants’ sup-
pliers and another person, Mr. Johnson, who testified that he saw a
"five blade white propeller with red tips at [Simkanin’s] location in
early 1996." Appellants’ Br. at 40-41. To prove that the propeller
Johnson saw was the propeller Zehrbach was to provide Simkanin,
Defendants offered Zehrbach’s testimony "that the propeller ordered
for Simakanin was a five blade white propeller with red tips." Appel-
lants’ Br. at 41. As discussed above, however, the jury may have dis-
counted entirely any or all of Zehrbach’s testimony on account of his
felony convictions and history of dishonesty. See Ante at II.A. at
11-12. Thus, his testimony would not have been sufficient to rebut the
Government’s evidence, including Simkanin’s own testimony, that
Zehrbach never delivered the propeller. Accordingly, the convictions
under Count II are supported by sufficient evidence.
III.
Defendants contend that the district court erred by denying their
motion for a new trial. They based their motion upon a statement
made by the Government during closing arguments. Essentially, in
response to an argument made by defense counsel—suggesting that
the Government purposely failed to review some invoices, which
Demus now alleges were available at trial (as evidence that she and
UNITED STATES v. ZEHRBACH 15
Zehrbach actually paid for engine parts)—the Assistant United States
Attorney ("AUSA") responded during rebuttal that she had reviewed
numerous documents and never found any "checks" substantiating
Defendants’ claims of payment.17 Both defense counsel objected
below. In direct response, the district court admonished the AUSA not
to testify and gave a curative instruction.18 The district court, how-
ever, denied Defendants’ motion for a new trial stating the mistake
was "egregious and extremely unfortunate" but that the curative
instruction and admonishment were sufficient. J.A. at 1849-58.
In some cases, "prejudicial arguments by the prosecutor pose a
serious threat to a fair trial." Miller v. North Carolina, 583 F.2d 701,
706 (4th Cir. 1978). In Miller, we noted that such arguments "[n]ot
only . . . undermine the jury’s impartiality, but it also disregards the
prosecutor’s responsibility as a public officer." Id. (citing Berger v.
United States, 295 U.S. 78, 85, 88 (1935)). However, as this Court
noted in Miller, such egregious conduct on the part of the prosecutor
refers to seriously egregious arguments, such as, "where the prosecu-
tor appealed to the jury’s sense of patriotism in a wartime prosecu-
tion" or where the prosecutor’s arguments appeal to "racial
prejudice." Id. at 706-07. Even in those cases, however, this Court
noted that curative instructions may be sufficient. Id. at 707 ("There
may also be instances where the curative instructions of the trial judge
are so immediate and decisive that the prejudicial effects of the argu-
ment are effectively dispelled.")19
In this case, however, the district court gave an "immediate and
17
The parties do not dispute the statements made by counsel during
closing arguments. See Appellants’ Br. at 42-44; Government’s Br. at
19-21. Essentially, Defendants’ produced invoices, but never produced
any checks (cancelled or not cancelled) to substantiate their claim that
they "paid" money for expenses and parts.
18
The district court instructed the jury that the prosecutor was not
allowed to testify; that there was no evidence to support her remarks; that
she should not have made the remarks; and that the remarks were
stricken from the record. The district judge also admonished counsel to
"watch what you say." J.A. at 1765hh.
19
We did not reach the efficacy of curative instructions, however,
because none was given in Miller. Miller, 583 F.2d at 707.
16 UNITED STATES v. ZEHRBACH
decisive" curative instruction that sufficiently dispelled any prejudice
wrought by the AUSA’s remark. See id.; see also United States v.
Harrison, 716 F.2d 1050, 1053 (4th Cir. 1983)(holding that the
court’s curative instructions cured any prejudice created by prosecu-
tor’s improper remarks).20 To be sure, this Court has developed a two-
prong test for determining whether an error "so infected the trial with
unfairness as to make the resulting conviction a violation of due pro-
cess." United States v. Wilson, 135 F.3d 291, 297 (4th Cir. 1998)(cita-
tions omitted). Specifically, a defendant "must show (1) that the
[prosecutor’s] remarks were improper and (2) that they ‘prejudicially
affected the defendant’s substantial rights so as to deprive [him] of a
fair trial.’" United States v. Adam, 70 F.3d 776, 780 (4th Cir. 1995)
(quoting United States v. Mitchell, 1 F.3d 235, 240 (4th Cir. 1993));
accord United States v. Francisco, 35 F.3d 116, 120 (4th Cir. 1994);
United States v. Brockington, 849 F.2d 872, 875 (4th Cir. 1988).
There can be no dispute that the prosecutor’s remark was improper;
the Defendants, however, must still establish prejudice. This they can-
not do.
In Wilson, we noted that several factors are relevant to the determi-
nation of prejudice, including:
(1) the degree to which the prosecutor’s remarks have a
tendency to mislead the jury and to prejudice the
accused;
(2) whether the remarks were isolated or extensive;
(3) absent the remarks, the strength of competent proof
introduced to establish the guilt of the accused; and
20
In Harrison, we held that a trial judge’s curative instructions are usu-
ally sufficient to cure any prejudice brought about by counsel’s state-
ments of opinion or personal belief during arguments. We stated that
curative instructions "by the trial judge, combined with the fact that the
prosecutor’s comments were not used to bolster his case, but instead
were provoked by defense counsel’s vitriolic attack, leads us to the con-
clusion that the defendants’ trial was not ‘so fundamentally unfair as to
deny [them] due process.’" 716 F.2d at 1053 (quoting Donnelly v. De
Christoforo, 416 U.S. 637, 645 (1974)).
UNITED STATES v. ZEHRBACH 17
(4) whether the comments were deliberately placed before
the jury to divert attention to extraneous matters.
135 F.3d at 299 (quoting Adam, 70 F.3d at 780)(other citations omit-
ted). As to each of these elements, the facts are substantially in favor
of the Government.
First, as the district court noted, the AUSA’s statement was "egre-
gious and unfortunate" but it was not the kind of remark which has
an inherent tendency to mislead the jury and to prejudice the accused.
See, e.g., Miller, 583 F.2d at 706-07 (discussing prosecutorial argu-
ments that are inherently prejudicial). Second, the remarks were "iso-
lated" rather than "extensive." Wilson, 135 F.3d at 299.21 Third, as
discussed above, the competent proof of guilt notwithstanding the
prosecutor’s remarks was significant.22 And, fourth, there is no evi-
dence that the AUSA made her remarks "deliberately . . . to divert
attention to extraneous matters." Id. at 299.23
"We also consider (5) whether the prosecutor’s remarks were
invited by improper conduct of defense counsel, and (6) whether
curative instructions were given to the jury." Id. While there is no evi-
dence that defense counsel engaged in any improper conduct to pro-
voke the AUSA’s remarks, it is clear that her remarks were in direct
response to defense counsel’s suggestion during closing arguments
that the Government was hiding evidence from the jury. And, as
noted before, a curative instruction was given to the jury.
As we noted in Wilson, "these factors are examined in the context
of the entire trial, and no one factor is dispositive." Id. In this case,
however, each factor points toward a finding of no prejudice. Accord-
ingly, the district court’s curative instruction was sufficient and a new
trial was not required.
21
Defendants concede that the "prosecutor’s remarks were not exten-
sive . . . ." Appellant’s Br. at 49.
22
Defendants concede that this point rises or falls on their arguments
as to the sufficiency of the evidence. Appellants’ Br. at 49.
23
Defendants contend that the prosecutor’s remark was deliberate
because her case against Defendants was "weak." Appellants’ Br. at 50.
As discussed above, we obviously disagree.
18 UNITED STATES v. ZEHRBACH
IV.
Defendants argue that the "combined effect" of the district court’s
evidentiary rulings admitting certain evidence and excluding other
evidence was an abuse of discretion and denied them their right to a
fair trial. Appellants’ Br. at 50.
Ordinarily, we review a trial judge’s evidentiary rulings for abuse
of discretion. United States v. Hill, 322 F.3d 301 (4th Cir. 2003).
Defendants, however, do not contend that any one of the district
court’s evidentiary rulings was an abuse of discretion. Rather, Defen-
dants argue that the combined effect of the district court’s evidentiary
rulings deprived them of a fair trial. This Circuit has no published
opinions addressing such a "combined effects" claim, and we are
doubtful that such a claim is viable.24
Nevertheless, because Defendants’ argument is based upon their
"right to a fair trial," we must be mindful that when determining the
fairness of a criminal trial our ultimate concern must be whether "the
trial judge’s [decisions] were so prejudicial as to deny a party an
opportunity for a fair and impartial trial." United States v. Goodwin,
272 F.3d 659, 673 (4th Cir. 2001) (quoting United States v. Gastia-
buro, 16 F.3d 582, 589-90 (4th Cir. 1994)); see also Stillman v. Nor-
folk & W. Ry. Co., 811 F.2d 834, 839 (4th Cir. 1987). On the other
hand, while a criminal defendant "is entitled to a fair trial" he is not
entitled to "a perfect one." Lutwak v. United States, 344 U.S. 604, 619
(1953). "A fair trial in a fair tribunal is[, nonetheless,] a basic require-
ment of due process." In re Murchison, 349 U.S. 133, 136, 942
(1955). And, the proper role of a trial judge, most simply, is "to see
that justice is done in the cases heard before him [or her]." Simon v.
United States, 123 F.2d 80, 83 (4th Cir. 1941). Given this framework,
we turn next to apply the relevant legal principles to the instant case.
If we have properly construed Defendants’ contentions, we under-
stand them to say that the district judge’s rulings amounted to partial-
ity. We must, then, consider our cases on the proper conduct of trial
24
Appellants have not pointed us to any authority on this point. And,
we have not found any published decisions from our sister circuits
addressing such a claim either.
UNITED STATES v. ZEHRBACH 19
judges. In United States v. Head, 697 F.2d 1200 (4th Cir. 1982), for
example, the defendant asserted that there was improper judicial inter-
ference when the court interjected itself over 2,400 times in a four-
day trial. Head maintained that the judge’s questions, combined with
adverse evidentiary rulings (some based on judicial misconstructions
of both facts and law), put the judge in partnership with the prosecu-
tion. Despite the fact that "there was in this trial a distressingly fre-
quent exercise of the trial court’s undoubted discretionary prerogative
—and duty on appropriate occasions—to intervene sua sponte in the
proceedings," the court found no prejudice. Id. That is because the
judge’s "patent over-involvement" and criticisms were directed at
both sides, not affecting one more than the other. Id.; cf. Anderson v.
Warden, Md. Penitentiary, 696 F.2d 296, 299 (4th Cir. 1982) (finding
prejudice, in harmless error analysis, where "[t]he judge openly and
successfully pressed defendant’s two key witnesses to change their
testimony"); United States v. Cassiagnol, 420 F.2d 868, 878 (4th Cir.
1970) (finding prejudicial error where court interrupted both defen-
dant’s direct examination and defense counsel’s summation with
comments characterized as "sharp," "critical," and "chiding"). In this
case, however, there is no evidence that the district court was more
lenient toward the Government than it was toward Defendants.
Indeed, Defendants make no such argument. Most importantly, there
is no evidence in this case of partiality impinging upon the defen-
dant’s right to a fair trial akin to that in Cassiangol, supra, 420 F.2d
at 878.
Moreover, in Goodwin, we affirmed the defendant’s conviction
despite the fact that one judge concluded that the "trial judge’s hostile
and extensive questioning of defense witnesses made it appear that
she was on the side of the government." Goodwin, 272 F.2d at 681.
(Michael, J., dissenting). We did so because we concluded that Good-
win’s defenses were "predestined to failure." Id. Thus, in this case, the
fact that the evidence was otherwise sufficient to sustain the convic-
tion and the fact that Defendants do not argue that the district court’s
rulings somehow impaired their defenses, suggests that whatever we
make of their "combined effects" claim, it is inconsequential.
As we explained previously in Head, "we review for prejudicial
trial court error in the specific case and not, except in the most occa-
sional exercise of our supervisory powers, generally to police the con-
20 UNITED STATES v. ZEHRBACH
duct of trials against some general model of judiciousness." 697 F.2d
at 1210. Thus, it seems that we may not further review Defendants’
"combined effects" claim since more exacting review would be tanta-
mount to policing the district court for some "general model of judi-
ciousness." Id. Consequently, Defendants’ claim may only succeed if
one or some of the district court’s evidentiary rulings constituted an
abuse of discretion. This, however, is an argument Defendants do not
make.25 And, defense counsel offered no further explanation of their
theory at oral argument, nor did they demonstrate how any one of the
district court’s evidentiary rulings was an abuse of discretion. Instead,
Defendants claim that the "cumulative result of these rulings denied
the Defendants’ their right to a fair trial." In any event, we have
reviewed each of Defendants’ individual objections, and none alone
justifies reversal. Accordingly, the cumulative effect of the district
court’s rulings could not be prejudicial and Defendants’ right to a fair
trial has not been violated.
Because none of the district court’s evidentiary rulings alone con-
stitutes an abuse of discretion, the "combined effects" thereof could
not compel reversal; nor did the district court’s rulings, even when
considered in the aggregate, violate Defendants’ due process rights.
V.
Defendants contend that the district court erred at sentencing by
erroneously calculating the amount of loss, the amount of restitution,
and by failing to allow Defendants an opportunity to allocute. The
Defendants also challenge the district court’s calculation of Zehr-
bach’s sentence under Count II, and its decision not to grant his
motion for downward departure. We find no reversible error in any
of these determinations.
25
Defendants concede that "the adverse effect of any one of the above
rulings would not, in all likelihood, [have] been of such magnitude so as
to affect the substantial rights of the Defendants. . . ." Appellants’ Br. at
56.
UNITED STATES v. ZEHRBACH 21
A.
Defendants contend that the district court incorrectly determined
the amount of loss by including the loss suffered by Harms, Horton,
Fagerstrom and McMichael. Likewise, they contend it was error for
the court to order restitution based upon these losses. They argue that
"the losses allegedly suffered by Horton, Harms and Fagerstrom
should not be included because there was absolutely no evidence of
any fraud related to them." Appellants’ Br. at 59. And, Defendants
concede that their lack of evidence claims are based entirely upon
their sufficiency of the evidence claim, which we dismissed above. Id.
Thus, their claim should properly fail based upon our conclusion that
there is sufficient evidence to sustain the conviction. In any event,
there is independent evidence that each victim suffered a loss as a
result of the fraud. Fagerstrom entered into a contract with LPE in
July, 1994, and paid an initial deposit of $10,875. In response to a
March 1995 progress letter sent by Demus, Fagerstrom made a prog-
ress payment in the mount of $18,125.00. Fagerstrom never received
an engine or a refund, and there is sufficient evidence from which a
rational jury could find that Zehrbach and Demus never developed or
assembled the engine the victims contracted for. The same is true in
the cases of Harms, Horton and McMichael. See J.A. at 2097-2101
(PSR). Thus, Defendants’ objection is without merit and the court’s
loss calculation was not erroneous. Likewise, the restitution ordered
as to each of these victims was not erroneous. See United States v.
Henoud, 81 F.3d 484, 487 (4th Cir. 1996)("In general, criminal resti-
tution orders should not be overturned in the absence of an abuse of
discretion.").
B.
Defendants argue that the district court denied them their right of
allocution. During the sentencing hearing, both defendants moved for
a downward departure. And, the district court asked each defendant
if he or she wished to allocute. Zehrbach indicated that he wished to
allocute after the court addressed his motion for downward departure.
Government’s Br. at 26 (citing Sept. 4 Sentencing Hearing Transcript
at 114). Likewise, during Demus’ sentencing hearing, the court indi-
cated that allocution should occur after the departure issue was
addressed. Id. (citing Sept. 11 Sentencing Transcript at 156). Accord-
22 UNITED STATES v. ZEHRBACH
ing to the Government, "[b]oth sentencing hearings were continued
until October 18, 2002 [sic], with all of the parties anticipating that
all of the issues were addressed except the departure issue." Id. Dur-
ing the October 18th hearing, Zehrbach testified and was, thus, given
an opportunity to address the court. Id. Neither defendant requested
a separate allocution during the October 18th hearing, nor did they
object to their failure to receive one. Thus, that argument may have
been waived, and is subject only to plain error review.26
In any event, Federal Rule of Criminal Procedure 32 requires that
the district court "address the defendant personally in order to permit
the defendant to speak or present any information to mitigate the sen-
tence." Fed. R. Crim. P. 32(i)(4)(A)(ii) (2003); United States v. Cole,
27 F.3d 996 (4th Cir. 1994); United States v. Miller, 849 F.2d 896,
897 (4th Cir. 1988). Both defendants’ right to allocute was "ad-
dressed," and each defendant had an opportunity to speak as to miti-
gation in conjunction with their motions for downward departure.
Thus, it seems that the district court complied with its duty under
Rule 32. In any event, we need not reach that issue here because, even
if the district court failed to afford Defendants a separate opportunity
to allocute, that error was not plain and can not be reversed on this
record.
26
See United States v. Karam, 201 F.3d 320, 330-31 (4th Cir.
2000)(failure to object to denial of allocution is reviewed only for plain
error, and if guidelines were properly applied, Defendants are not preju-
diced and error is not plain); United States v. Ford, 88 F.3d 1350, 1355-
56 (4th Cir. 1996); United States v. Grubb, 11 F.3d 426, 440 (4th Cir.
1993) (failure to object to sentencing errors below results in waiver of
those arguments on appeal unless error was plain error); see also, United
States v. Torry, 166 F.2d 1211 (4th Cir. 1998) (Table unpub-
lished)("[A]ssuming without deciding that the district court erred in fail-
ing to provide Torry with an opportunity to allocute, the error was not
plain.") (citing United States v. Alli-Balogun, 72 F.3d 9, 12 (2d Cir.
1995) (stating that "we do not see how an error can be plain error when
the Supreme Court and this court have not spoken on the subject, and the
authority in other circuit courts is split")).
UNITED STATES v. ZEHRBACH 23
C.
Defendants contend that the district court erred when calculating
Zehrbach’s sentence under Count II by including the loss from Count
I in its calculations for Count II. The district court, however, sen-
tenced Zehrbach to serve his sentences for Counts I and II, concur-
rently. And, as discussed above, Zehrbach’s sentence as to Count I
was not erroneous. Because Zerhbach contends that his offense level
as to Count II should have been a 14 rather than a 20, but his offense
level as to Count I was properly calculated to be 20, any error by the
district court would be harmless given the concurrent nature of the
sentences. Even if Zehrbach achieved a reduced sentence on Count II,
his term of imprisonment would remain the same because his sen-
tence under Count I was properly calculated based upon his offense
level of 20. Thus, we may not reverse Zehrbach’s sentence under
Count II.
D.
Defendants contend that the district court erred by denying their
motions for downward departure under U.S.S.G. § 5K2.0 for unjust
enrichment. "[O]ur ability to review a district court’s decision
whether, and to what extent, to depart downward from the sentence
required by the Guidelines is fairly circumscribed. We are not permit-
ted to review a district court’s refusal to depart downward from the
Sentencing Guidelines unless ‘the district court was under the mis-
taken impression that it lacked the authority to depart.’" United States
v. Shaw, 313 F.3d 219, 222 (4th Cir. 2002)(quoting United States v.
Carr, 303 F.3d 539, 545 (4th Cir. 2002) (internal quotation marks
omitted)). The district court clearly stated that it had authority to
depart, J.A. at 2010-12, thus we may not review its decision any fur-
ther.
VI.
As discussed above, Defendants’ challenges to their convictions
and sentences fail. Accordingly, we affirm the judgment of the district
court as to both Zehrbach and Demus.
AFFIRMED