United States v. Stone

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 02-4319
OLLIE BRYAN STONE,
Defendant-Appellant.

UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 02-4461
JAMES L. YATES,
Defendant-Appellant.

UNITED STATES OF AMERICA, 
Plaintiff-Appellant,
v.  No. 02-4541
JAMES L. YATES,
Defendant-Appellee.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Andre M. Davis, District Judge.
(CR-00-530)
Argued: September 25, 2003
Decided: January 22, 2004
Before WILKINSON, TRAXLER, and GREGORY, Circuit Judges.
2 UNITED STATES v. STONE
Affirmed in part, vacated in part, and remanded by unpublished per
curiam opinion.
COUNSEL
ARGUED: Robert Charles Bonsib, MARCUS & BONSIB, Green-
belt, Maryland; Allen Howard Orenberg, DILWORTH PAXSON,
L.L.P., Washington, D.C., for Appellants. David Ira Salem, Assistant
United States Attorney, Greenbelt, Maryland, for Appellee. ON
BRIEF: Thomas M. DiBiagio, United States Attorney, Ronald J.
Tenpas, Assistant United States Attorney, Greenbelt, Maryland, for
Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Appellants Ollie Bryan Stone and James L. Yates were both con-
victed of conspiracy to defraud the United States government in viola-
tion of 18 U.S.C.A. § 371 (West 2003) and of filing false claims upon
the United States government in violation of 18 U.S.C.A. § 287 (West
2003). Stone also pleaded guilty to filing false income tax returns
between the years of 1994 and 1997 in violation of 26 U.S.C.A.
§ 7206 (West 2003). The district court sentenced Stone to eighty-four
months imprisonment, and sentenced Yates to sixty days imprison-
ment to be served by intermittent confinement for thirty weekends.
Stone and Yates appeal, raising various challenges to their convic-
tions and sentences. The government cross-appeals Yates’s sentence.
We affirm the convictions of Stone and Yates, as well as Stone’s sen-
tence, but we vacate Yates’s sentence and remand for resentencing.
UNITED STATES v. STONE 3
I.
In 1988, Ollie Bryan Stone began employment as an electrician
with the General Services Administration ("GSA") at the Suitland
federal complex in Suitland, Maryland ("Suitland"). By 1995, Stone
was recognized by most of the building managers at Suitland as "sort
of the lead electrician." J.A. 290. While at Suitland, Stone also served
as a team leader for employees in charge of electrical repairs. As a
team leader, Stone determined whether electrical repairs could be
handled by Suitland electricians or needed to be outsourced to a pri-
vate contractor. Those outsourced projects costing more than $2,000
were assigned to a private contractor after a bidding process. For
those outsourced projects costing less than $2,000 — "micropur-
chases" — bidding was not required and an expedited approval pro-
cess was used. Under this expedited process, the GSA employee
requesting the repair work (the "buyer"), in this case Stone, completed
an internal GSA form known as a Form 2010. This form documented
the work being requested, the outside contractor’s name and address,
and the cost of the services being rendered.
The buyer would submit both the completed Form 2010 and the
contractor’s invoice to a building manager or some other employee
authorized to approve the request. In most instances, prior approval
by a building manager was required before work could commence;
however, if an emergency repair was required, buyers were autho-
rized to have the work done and then to seek approval after the fact.
Because Stone served as a team leader for Suitland’s electricians
and was recognized as a "lead electrician," Stone usually prepared the
Forms 2010 for electrical repairs. Many of the building managers
charged with reviewing and approving Stone’s requests had no elec-
trical training. Consequently, they relied upon the representations
made by Stone in the Form 2010s.
At some point, Stone began approaching Christian Fitzgerald,
Michael Lewis, and James Clark, contractors who were doing legiti-
mate work at Suitland, and asking these contractors to either inflate
their invoices for work done at Suitland or submit false invoices for
work never done at GSA.1 They agreed and the scheme evolved.
1
All three contractors pleaded guilty to conspiracy to defraud the fed-
eral government.
4 UNITED STATES v. STONE
Stone would generally categorize the invoices as being for emergency
work, allowing him to request payment without having prior
approval. Upon receiving payment from GSA, Fitzgerald, Lewis, and
Clark would provide Stone with his share of the overcharges through
gifts and cash payments. Among the gifts Stone received were an all-
terrain vehicle, furniture, guitars, a hot tub, and bloodhounds. The
contractors also performed free work on Stone’s home.
Stone also enlisted the assistance of his accountant, Jim Yates, to
recruit additional participants in the conspiracy and to prepare false
paperwork to conceal the scheme. As a result, Yates approached
Nicholas, Giuseppe, and Frank Gallo (the "Gallos") about forming
new contracting companies or using their existing companies to sub-
mit false invoices to Suitland.2 Yates was a family friend of the Gallos
and performed accounting work for them. In an effort to convince the
Gallos to participate in Stone’s scheme, Yates explained that he
would prepare the paperwork for the formation of the companies.
Yates further explained to the Gallos that the work would be com-
pleted by subcontractors hired by Stone, thus minimizing the risk to
the Gallos. Moreover, Yates explained that he would prepare the
invoices and forward the payments received by the Gallos to Stone.
Stone would then use the money to pay the subcontractors. In return
for their cooperation, the Gallos were promised ten percent of the
payment received from GSA.3
In 2000, GSA and the Internal Revenue Service ("IRS") began a
joint investigation into the activities of Stone and his co-conspirators.
As a result of this investigation, several search warrants were issued.
2
In 1996, Yates also approached Antonio DeLeonibus about establish-
ing a general contracting company. Yates did so despite having knowl-
edge that DeLeonibus was not qualified to do general contracting work.
To entice DeLeonibus to join the scheme, Yates described the proceeds
of the scheme as "free money." Despite Yates’s efforts, however,
DeLeonibus declined to participate in the conspiracy.
3
At trial, the Gallos testified that they never received the ten percent
they were promised. The Gallos did not have personal knowledge about
whether the work was performed by other contractors or what was done
with the money they gave to Yates. At about the same time, the Gallos
also performed contracting work on Stone’s and Yates’s homes.
UNITED STATES v. STONE 5
Upon learning of the search warrants, Stone sought to cover up the
scheme. He called Lewis and instructed him to contact the Gallos and
Yates. In response, Lewis set up two meetings with Yates. During the
first meeting, Yates, who was carrying a firearm, instructed Lewis to
undress to ensure that he was not wired. After determining that Lewis
was not wired, Yates reviewed with Lewis the items Lewis had pur-
chased for Stone as kickbacks. Yates later returned to Lewis two gui-
tars Lewis had purchased for Stone.
As part of his effort to conceal the scheme, Yates also contacted
Fitzgerald and offered to prepare false paperwork that would create
the impression that Stone worked for Fitzgerald. It was hoped that this
false paperwork would help explain any gifts provided to Stone by
Fitzgerald. Yates even visited Fitzgerald’s home and inspected his
records to determine the best way to create the appearance that Stone
was employed by Fitzgerald. Despite Yates’s repeated attempts to
convince Fitzgerald to help conceal the scheme, Fitzgerald declined
to assist Yates and Stone and did not have any contact with them after
Yates’s visit to his home.
Notwithstanding the efforts of Stone and Yates to conceal the
scheme, GSA and the IRS gathered sufficient evidence to obtain a
grand jury indictment. On October 25, 2000, the grand jury returned
a twelve-count indictment charging Stone, Yates, and others.4 The
indictment was subsequently superseded by a fourteen-count indict-
ment filed on October 18, 2001. Count One charged Stone and Yates
with conspiracy to defraud the United States government. Counts
Two through Ten charged Stone with filing false claims upon the
United States government. Counts Six through Eight also charged
Yates with filing false claims. Counts Eleven through Fourteen —
which were severed from the other counts prior to trial — charged
Stone with filing false income tax returns, charges to which Stone
later pleaded guilty.
The district court sentenced Stone to a term of eighty-four months
imprisonment. In sentencing Stone, the district court departed upward
4
Fitzgerald later pleaded guilty to a separate criminal information filed
by the government and agreed to cooperate with the government in its
case against Stone and Yates.
6 UNITED STATES v. STONE
pursuant to Section 2T1.1(b)(2) (use of a sophisticated means) and
Section 3B1.3 (abuse of a position of trust or use of a special skill)
of the Sentencing Guidelines. See United States Sentencing Commis-
sion, Guidelines Manual, §§ 2T1.1 & 3B1.3 (Nov. 1997) ("U.S.S.G.")
The district court, however, continued Yates’s sentencing hearing in
order to determine whether Yates’s family circumstances warranted
a downward departure. The district court later determined that a nine-
level downward departure was warranted under Sections 5H1.6 and
5K2.0 of the Sentencing Guidelines. The district court also imposed
a three-level upward adjustment pursuant to Section 3B1.1 (manager
or supervisory role in the offense) of the Sentencing Guidelines. As
a result, the district court sentenced Yates to sixty days imprisonment
to be served over thirty weekends.
II.
The defendants first argue that the district court erred by denying
their motions for severance. We review a district court’s denial of a
motion to sever for an abuse of discretion. See United States v. Ford,
88 F.3d 1350, 1361 (4th Cir. 1996). Both Stone and Yates argue that
severance was required because they presented antagonistic defenses.
Yates also argues that the district court erred in denying his motion
for severance because of the prejudicial spillover evidence relating
solely to Stone. We will address each of these contentions in turn.
A.
Claiming mutually antagonistic defenses, Stone and Yates initially
assert error in the district court’s denial of their motions for separate
trials under Rule 14 of the Federal Rules of Criminal Procedure. We
find no merit in this argument.
Defendants who are alleged to have participated in the same trans-
action or series of transactions may be charged in a single indictment.
See Fed. R. Crim. P. 8(b). "The basic rule is that persons who have
been indicted together, particularly for conspiracy, should be tried
together." United States v. Tipton, 90 F.3d 861, 883 (4th Cir. 1996).
Rule 14 of the Federal Rules of Criminal Procedure provides that the
court may grant a severance if it appears that a defendant or the gov-
ernment is prejudiced by a joinder of the defendants for trial. See Fed.
UNITED STATES v. STONE 7
R. Crim. P. 14. "Antagonistic defenses do not per se require sever-
ance, even if the defendants are hostile or attempt to cast blame on
each other." United States v. Becker, 585 F.2d 703, 707 (4th Cir.
1978); see also Zafiro v. United States, 506 U.S. 534, 538 (1993). In
order to obtain a severance on the ground of conflicting defenses, the
parties must demonstrate that "the conflict is so prejudicial that the
differences are irreconcilable, ‘and that the jury will unjustifiably
infer that this conflict alone demonstrates that both are guilty.’"
Becker, 585 F.2d at 707 (internal quotation marks omitted).
The defendants’ argument hinges on the fact that there were dis-
crepancies in the trial testimony given by Stone and Yates regarding
the Gallos’ involvement in the conspiracy. At trial, Yates testified that
he turned over to Stone the cash given to him by the Gallos and, like
the Gallos, assumed that Stone had subcontractors perform the work
at Suitland. Stone, in his defense, denied any involvement with the
Gallos and disclaimed the receipt of any money either directly from
the Gallos or indirectly through Yates. As a consequence of this con-
flicting testimony, Stone and Yates argue, they were unfairly preju-
diced because the jury unjustifiably would have inferred that this
conflict alone demonstrated that both Stone and Yates were guilty.
"A defendant must show prejudice in order for the court’s ruling
to constitute an abuse of discretion." United States v. Porter, 821 F.2d
968, 972 (4th Cir. 1987). "No prejudice exists if the jury" can "make
individual guilt determinations by following the court’s cautionary
instructions" and "appraising the independent evidence against each
defendant." Id. Neither Stone nor Yates has made the requisite show-
ing of abuse of discretion by the district court. Each defendant was
able to put forth his own individual theory of the case. When neces-
sary, the district judge issued instructions to limit any potential preju-
dice inherent in a witness’s testimony. These cautionary instructions
allowed the jury to make individual guilt determinations. In light of
the overwhelming evidence against both Stone and Yates, the jury
was well within its province to convict each appellant. Indeed, the
jury was not required to rely on either defendant’s testimony in order
to conclude that they were both guilty, and we see nothing about the
allegedly conflicting testimony that is unfairly prejudicial to Stone or
Yates. Independent testimony and documentation supplied ample evi-
dence to connect both Stone and Yates to the conspiracy. Because the
8 UNITED STATES v. STONE
defendants have failed to demonstrate that the antagonistic defenses
alone resulted in conviction, we conclude that the district court did
not abuse its discretion in denying their severance motions.
B.
Yates further contends that the district court erred in denying his
motion for severance because of the danger of prejudicial spillover of
evidence relating solely to Stone. This argument also fails.
As we have already noted, defendants charged in the same conspir-
acy indictment should ordinarily be tried together. United States v.
Roberts, 881 F.2d 95, 102 (4th Cir. 1989). "The fact that the evidence
against one defendant is stronger than the evidence against other
defendants does not in itself justify severance." United States v.
Brooks, 957 F.2d 1138, 1145 (4th Cir. 1992); see also United States
v. Hargrove, 647 F.2d 411, 415 (4th Cir. 1981). "If this were the case,
motions to sever, which are rarely granted in conspiracy cases, . . .
would have to be granted almost as a matter of course." Brooks, 957
F.2d at 1145 (citation omitted). Rather, the party moving for sever-
ance must establish that prejudice would result from a joint trial, not
merely that separate trials would result in a better chance of acquittal.
See United States v. Parodi, 703 F.2d 768, 780 (4th Cir. 1983). The
defendant must show that he or she was deprived of a fair trial or suf-
fered undue prejudice. See, e.g., United States v. Samuels, 970 F.2d
1312, 1314 (4th Cir. 1992); United States v. Brugman, 655 F.2d 540,
543 (4th Cir. 1981).
Our review of the record convinces us that Yates cannot meet this
heavy burden. Not only would much of the evidence admitted against
Stone have been admissible at a separate trial to show the nature of
the conspiracy with which Yates was charged, but the evidence
adduced against Yates was also more than ample to sustain his con-
victions. Under these circumstances, it cannot be said that the district
court abused its discretion in denying the motion for severance.
III.
Yates further maintains that the government proved not one con-
spiracy, but multiple conspiracies. To support this contention, Yates
UNITED STATES v. STONE 9
notes that (1) he had nothing to do with Clark; (2) neither Clark nor
Yates knew of the other’s involvement; and (3) Yates’s involvement
with Fitzgerald and Lewis only occurred after the 1999 search warrant
was executed. Because Yates allegedly had nothing to do with the
conspiracy involving Stone, Fitzgerald, Lewis, and Clark, Yates
argues, he should have only been tried as part of the Stone and Gallos
conspiracy.
In our view, the evidence is more than sufficient to support a find-
ing of a single conspiracy. That Yates never knew of Clark’s involve-
ment and only became involved in later criminal activities is
irrelevant. See United States v. Johnson, 54 F.3d 1150, 1154 (4th Cir.
1995) (concluding that evidence established a single conspiracy even
if the members of the conspiracy did not know each other or had lim-
ited contact with each other); United States v. Banks, 10 F.3d, 1044,
1054 (4th Cir. 1993) ("[O]ne may be a member of a conspiracy with-
out knowing its full scope, or all its members, and without taking part
in the full range of its activities or over the whole period of its exis-
tence.").
IV.
We turn now to Stone’s contention that the district court’s denial
of his motion to reopen his case following the testimony of Yates, his
co-defendant, denied Stone his constitutional right to present defense
witnesses. At trial, Stone put on his case-in-chief first, followed by
Yates. The parties did not object to proceeding in this order. Near the
end of the trial, and after Stone had presented his case, Yates testified.
His testimony, as the district court described it, "just absolutely slam-
m[ed] Mr. Stone." J.A. 1403. While the district court was initially
concerned about the fact that Yates, as the last defendant to put on a
case, "literally [became] a government witness against another defen-
dant [Stone]," upon further reflection the court noted that it did not
find the conflict to be as profound as it did on first impression. See
J.A. 1402, 1420.
It is within the district court’s sole discretion to reopen a case to
admit new evidence. United States v. Abbas, 74 F.3d 506, 510 (4th
Cir. 1996). When reviewing whether or not the district judge abused
his discretion in not reopening the case,
10 UNITED STATES v. STONE
we examine (1) whether the party moving to reopen pro-
vided a reasonable explanation for failing to present the evi-
dence in its case-in-chief; (2) whether the evidence was
relevant, admissible, or helpful to the jury; and (3) whether
reopening the case would have infused the evidence with
distorted importance, prejudiced the opposing party’s case,
or precluded the opposing party from meeting the evidence.
Id. at 511. In order to prevail under this test, Stone must satisfy each
prong. If Stone is unable to substantiate even one prong, "due defer-
ence is given to the discretion of the sitting judge." Id.After analyzing the first prong, we conclude that Stone did not pro-
vide the district court with a reasonable explanation of why he was
unable to present the evidence during his case-in-chief. Yates testified
as to Stone’s relationship with the Gallos and stated that he prepared
invoices for the Gallos based upon Forms 2010 that were provided by
Stone. He also stated that Stone organized the subcontractors who
were supposed to perform the work for the Gallos at Suitland. Yates
further testified that once GSA paid the Gallos for the work allegedly
done at Suitland, one of the Gallos would cash the check and hand
the money back over to Yates who would then give the entire sum to
Stone. While Stone contends that Yates’s hostile testimony came as
a surprise, the record indicates that Stone had reason to expect that
Yates’s testimony could contradict him. The record indicates that,
prior to trial, the government provided Stone’s counsel with a tran-
script of the Gallos’ grand jury testimony, in which they described
their activities in a manner consistent with Yates’s trial testimony.
Stone is also unable to satisfy the second prong of the test. If
allowed to reopen his case, Stone himself was to be placed back on
the witness stand. Because Stone’s general defense throughout the
trial was to deny all allegations put forth, his testimony could not
have provided much new information.5 Thus, because Stone is unable
5
At trial, Stone denied any involvement with the conspiracy to defraud
the government. He specifically denied any involvement in the arrange-
ments made for the Gallos’ companies to do work at Suitland. He denied
speaking with Yates about the Gallos and their alleged work for GSA.
He also denied telling Yates that the Gallos would get ten percent back
from any GSA project to which they lent their name. Stone further
denied receiving any money from Yates and specifically denied receiv-
ing any money for jobs the Gallos supposedly completed at Suitland.
UNITED STATES v. STONE 11
to meet all the necessary criteria, we find that the district court did not
abuse its discretion in denying his motion to reopen his case-in-chief.
V.
Stone and Yates maintain that the district court erred when it
denied their joint motion to continue the trial to allow defense counsel
time to examine certain medical records or, in the alternative, to
exclude the testimony of Fitzgerald. Fitzgerald was one of three GSA
contractors who pleaded guilty to charges related to the conspiracy to
defraud GSA. In August 2001, during the course of his plea colloquy
with the district court, Fitzgerald disclosed that he was under treat-
ment by a mental health counselor. Shortly before trial in the instant
case, the government received the pre-sentence report for Fitzgerald,
which further described his treatment and indicated he was suffering
from Bipolar II disorder. Approximately one week before the trial, the
government disclosed this information, along with information per-
taining to two prior alcohol-related arrests, to the defense. At roughly
the same time, Fitzgerald’s attorney asked the district court to seal the
transcript of the guilty plea and provided the district court with a copy
of his client’s medical records. Neither the government nor the defen-
dants had copies of those records.
Upon learning of the information pertaining to Fitzgerald, the
defendants filed a motion for continuance to allow for a complete
review of Fitzgerald’s medical records by counsel and a defense
expert. In the alternative, the defendants sought exclusion of Fitzger-
ald’s testimony, claiming among other things that their lack of access
to his records interfered with their Sixth Amendment rights to con-
front and cross-examine the government’s witness. The district court
denied the motion for a continuance. After conducting an in cam-
era review of Fitzgerald’s mental health records, the district court
also denied the motion to exclude Fitzgerald’s testimony. The district
court did, however, permit the defendants to cross-examine Fitzgerald
as to the existence of his psychiatric treatment and alcohol abuse
issues, but the court prevented defendants from probing in great detail
into such treatment.
The defendants contend that the denial of access to Fitzgerald’s
mental health records violated their Sixth Amendment right to con-
12 UNITED STATES v. STONE
frontation and irreparably prejudiced them. They argue that because
the government’s case rested on Fitzgerald’s testimony and their
defense centered on attacking his credibility, they were entitled to
Fitzgerald’s mental health records for use in cross-examination. We
may reverse the district court’s denial of the defendants’ motion only
for an abuse of discretion. United States v. McMillion, 14 F.3d 948,
955-56 (4th Cir. 1994).
The opportunity for cross-examination is central to the constitu-
tional right of confrontation. See Davis v. Alaska, 415 U.S. 308, 315-
16 (1974). This constitutional standard is met when defense counsel
is enabled to bring before the jury facts bearing on a witness’s reli-
ability. Id. at 318. In this case, the defendants were able to bring to
the jury’s attention the facts affecting Fitzgerald’s credibility without
accessing his mental health records. There was no need to disclose
Fitzgerald’s mental health records to defense counsel. The district
court permitted the defendants to rigorously cross-examine Fitzgerald,
allowing them to bring before the jury facts bearing on Fitzgerald’s
reliability. Counsel for Stone questioned Fitzgerald at length about his
psychiatric treatment. Fitzgerald acknowledged that he suffered from
Bipolar II disorder, that he was currently under treatment, that he had
seen as many as five different doctors over time, that he was on spe-
cific medication, that he occasionally self-medicated, that he was con-
fused at times, that he had disorganized thinking, and that he had
trouble sleeping and experienced depression. Counsel for Stone also
questioned Fitzgerald about his arrests for drunk driving. Counsel for
Yates touched on the same subjects, and questioned Fitzgerald about
his marital problems. Thus, the facts of Fitzgerald’s mental state and
treatment were disclosed in great detail to the jury. Denial of access
to the records, therefore, did not deprive Stone and Yates of their right
to confrontation.
In addition, even if we were to conclude that it was an error to deny
the defendants access to Fitzgerald’s mental health records, such error
would be harmless. See Delaware v. Van Arsdall, 475 U.S. 673, 684
(1986) (holding that the denial of a defendant’s opportunity to cross-
examine a witness is subject to harmless-error analysis). Fitzgerald
was one of three government cooperators providing testimony regard-
ing the defendants’ involvement in a scheme to defraud GSA. Thus,
given the extent of the government’s evidence and the defendant’s
UNITED STATES v. STONE 13
ability to cross-examine Fitzgerald, we find that any error was harm-
less.
VI.
We turn next to the defendants’ contention that the district court
erred in its jury instructions. The decision whether to give a jury
instruction and the content of an instruction are reviewed for abuse of
discretion. United States v. Russell, 971 F.2d 1098, 1107 (4th Cir.
1992). Yates contends the district court erred by giving a "willful
blindness" instruction. Stone and Yates also argue that the district
court should have given an instruction defining reasonable doubt.
Again, we disagree.
A.
Yates first contends that the district court erred in giving a willful
blindness instruction with respect to Counts Six and Seven, which
charged Yates with submitting and causing the submission of false
claims to GSA. A willful blindness instruction allows a "jury to
impute the element of knowledge to [a] 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
197, 203 (4th Cir. 1991). Yates contends that the willful blindness
instruction was erroneously given because there was insufficient evi-
dence presented of deliberate ignorance, but instead, only evidence of
actual knowledge on his part. As this court has previously stated,
however, "[a] willful blindness instruction is appropriate when the
defendant asserts a lack of guilty knowledge but the evidence sup-
ports an inference of deliberate ignorance." Abbas, 74 F.3d at 513(internal quotation marks omitted). "The record need not contain
direct evidence, however, that the defendant deliberately avoided
knowledge of wrongdoing; all that is necessary is evidence from
which the jury could infer deliberate avoidance of knowledge."
United States v. Whittington, 26 F.3d 456, 463 (4th Cir. 1994).
Yates asserted a lack of knowledge that the Gallo invoices he pre-
pared were false. At trial, the government introduced evidence of a
wide variety of unusual activities engaged in by Yates relating to the
preparation and submission of the invoices. For example, Yates pre-
14 UNITED STATES v. STONE
pared invoices at Stone’s request, but Yates never contacted any of
the subcontractors who had ostensibly performed the work, nor did he
request copies of any receipts from the subcontractors. This evidence
easily supports the inference that if Yates was unaware of what was
going on, it was only because he deliberately shut his eyes to it.6
Accordingly, we find that the district court did not err in giving the
jury a willful blindness instruction.
B.
Finally, defendants argue that the district court erred by refusing to
define reasonable doubt. "The law is well-settled in this Circuit that
a judge is not allowed to define reasonable doubt unless requested to
do so by the jury." United States v. Patterson, 150 F.3d 382, 389 (4th
Cir. 1998). Therefore, we find that the district judge did not abuse his
discretion in refusing to define reasonable doubt.
VII.
Both Stone and Yates also challenge their sentences. Stone contests
the two-level sentencing enhancement for abuse of a position of trust
and use of a special skill under Section 3B1.3 of the Sentencing
Guidelines. Stone also contests the two-level sentencing enhancement
for the use of sophisticated means to commit an offense under Section
2T1.1(b(2) of the Sentencing Guidelines. Yates contests the three-
level sentencing enhancement for his role in the offense under Section
3B1.1(b) of the Sentencing Guidelines. We address each contention
in turn.
6
As described at trial, Yates worked as a CPA and was employed, for
a time, in the Inspector General’s Office of the Department of Health and
Human Services ("DHHS"), which investigated criminal activity involv-
ing DHHS, including fraud. Thus, Yates was familiar with government
fraud. Yates’s professed ignorance in the face of these condemning cir-
cumstances suggests a deliberate avoidance of knowledge of the use of
false and inflated invoices.
UNITED STATES v. STONE 15
A.
Stone argues that the district court erred in assessing a two-level
enhancement under U.S.S.G. § 3B1.3 for abuse of a position of trust
and the use of a special skill to facilitate or conceal the commission
of a crime.7 We review for clear error the district court’s factual find-
ings that support the enhancement. United States v. Mackey, 114 F.3d
470, 475 (4th Cir. 1997) (concluding that whether defendant abused
a position of trust was a factual determination); United States v.
Helton 953 F.2d 867, 869 (4th Cir. 1992) (concluding that whether
defendant abused a position of trust or used a special skill is a factual
question). To the extent the district court undertakes a legal interpre-
tation of any guideline, our review is de novo. United States v.
Gormley, 201 F.3d 290, 294 (4th Cir. 2000).
(1)
We turn first to Stone’s challenge to the district court’s decision to
enhance his sentence based on an abuse of trust. "The basic question"
is whether Stone, by submitting false or inflated Forms 2010, "abused
a position of trust with respect to the victims of his fraud scheme
within the meaning of Guidelines § 3B1.3." United States v.
Caplinger, 339 F.3d 226, 236 (4th Cir. 2003). "Determining what
constitutes a position of trust for the purposes of § 3B1.3 is not a sim-
ple task." United States v. Morris, 286 F.3d 1291, 1296 (11th Cir.
2002)(internal quotation marks omitted).
Under Section 3B1.3 of the Sentencing Guidelines, a district court
must increase a defendant’s sentence by two levels "[i]f the defendant
abused a position of public or private trust" and that abuse "signifi-
7
Under U.S.S.G. § 3B1.3, the court may assess a two-level enhance-
ment if the defendant abused a position of trust or used a special skill to
facilitate or conceal the commission of a crime. In applying the enhance-
ment in this case, the district court concluded that Stone both abused a
position of trust and used a special skill to facilitate or conceal the com-
mission of the crime. While the district court relied on both grounds in
deciding to assess the enhancement under Section 3B1.3, a district court
need only find one of the grounds is satisfied in order for the enhance-
ment to apply.
16 UNITED STATES v. STONE
cantly facilitated the commission or concealment of the offense."
U.S.S.G. § 3B1.3; see also United States v. Akinkoye, 185 F.3d 192,
203 (4th Cir. 1999). The commentary to the Sentencing Guidelines
explains that
"[p]ublic or private trust" refers to a position of public or
private trust characterized by professional or managerial dis-
cretion. . . . For this enhancement to apply, the position of
trust must have contributed in some significant way to facil-
itating the commission or concealment of the offense. . . .
This adjustment for example, would apply in the case of an
embezzlement of a client’s funds by an attorney serving as
a guardian, a bank executive’s fraudulent loan scheme, or
the criminal sexual abuse of a patient by a physician under
the guise of an examination.
U.S.S.G. § 3B1.3, comment. (n.1).
This court has identified several factors that courts should consider
in determining whether a defendant held a position of trust.
First, courts ask whether a defendant had special duties or
special access to information not available to other employ-
ees. Second, the defendant’s level of supervision or degree
of managerial discretion is relevant. Bank tellers who
embezzle from their employers provide an example of a sit-
uation where there is little trust to abuse because the
employees are closely supervised, and it is expected that
wrongs they commit will be readily detected. Third, the
analysis also entails an examination of the acts committed
to determine whether this defendant is more culpable than
others who hold similar positions and may commit crimes.
United States v. Gordon, 61 F.3d 263, 269 (4th Cir. 1995) (internal
quotation marks and citations omitted); see also United States v.
Glymph, 96 F.3d 722, 727 (4th Cir. 1996).
We have emphasized that the "position of trust" inquiry must focus
on the relationship between the defendant and the victim from the vic-
UNITED STATES v. STONE 17
tim’s perspective. Gordon, 61 F.3d at 269. "There must be a trust
relationship between the defendant and his victim for the enhance-
ment to apply." United States v. Moore, 29 F.3d 175, 180 (4th Cir.
1994) (internal quotation marks and alteration omitted). In this case,
the primary victim of Stone’s scheme was GSA, which was misled by
Stone’s fraudulent Forms 2010.
In reviewing the factors mentioned above, we cannot conclude that
the district court clearly erred in determining that Stone held a posi-
tion of trust and abused it. Viewed from GSA’s perspective, Stone
exercised enormous discretion: as a lead electrician, Stone’s judg-
ments with respect to necessary repairs ordinarily received great def-
erence. Stone had knowledge about electrical repairs that the building
managers who signed off on the Forms 2010 did not. This specialized
knowledge allowed him to earn a "position of trust within the employ-
ment hierarchy and nobody looked over his shoulder." J.A. 1811. In
short, Stone was entrusted with responsibilities beyond those of other
electricians and repairmen at Suitland.
The evidence also clearly shows that Stone used his position in a
manner that significantly facilitated the commission or concealment
of the crime. He was the initiator of the fraud scheme, he instructed
others on how to defraud GSA and on how to avoid detection, and
significantly, he was in charge of the electrical repairs that were the
basis of the fraud scheme. See United States v. Johnson, 4 F.3d 904,
917 (10th Cir. 1993). Stone’s instructions to Fitzgerald, Lewis, Clark,
and Yates about how to prepare invoices and submit inflated and false
Forms 2010 were designed to aid in the commission and concealment
of the fraud scheme. Stone’s actions significantly facilitated the fraud
and constituted an abuse of his position as "lead electrician." Accord-
ingly, we conclude that the district court did not err in increasing
Stone’s guideline range by two levels for abusing a position of trust.
(2)
In applying the two-level enhancement under Section 3B1.3 of the
Sentencing Guidelines, the district court also concluded that Stone
used a special skill to facilitate or conceal the commission of a crime.
Stone contends that the district court erred because his skills as an
electrician did not rise to the level contemplated by the Guidelines.
18 UNITED STATES v. STONE
Section 3B1.3 provides: "If the defendant . . . used a special skill
in a manner that significantly facilitated the commission or conceal-
ment of the offense, increase [the offense level] by 2 levels." U.S.S.G.
§ 3B1.3. The analysis of whether Stone’s status as an electrician con-
stituted a special skill used to facilitate the crime involves two distinct
questions: (1) whether being an electrician is a special skill within the
meaning of Section 3B1.3 of the Guidelines; and (2) whether that skill
was used to facilitate the crime. The commentary to the Guidelines
explains that "‘[s]pecial skill’ refers to a skill not possessed by mem-
bers of the general public and usually requiring substantial education,
training or licensing." U.S.S.G. § 3B1.3 comment. (n.2). The exam-
ples of special skills provided in the commentary seem to require
more skilled education, training and licensing than is usually associ-
ated with being an electrician. See id. ("pilots, lawyers, doctors,
accountants, chemists, and demolition experts"). Although we do not
rule out the possibility that the skills of an electrician may be suffi-
cient for application of Section 3B1.3 in some cases, the record in this
case does not justify its application here.
In any event, "to qualify under the guidelines, the special skill
must, at a minimum, be used to actually commit or conceal the crime,
rather than merely to establish trust in a victim upon whom the defen-
dant then perpetrates a garden variety fraud." United States v. Hick-
man, 991 F.2d 1110, 1113 (3rd Cir. 1993). Moreover, "the case law
has generally required a direct use of the special skill." Id. Stone did
not directly use his electrical skills to facilitate this crime. He simply
took advantage of his position of trust and used it to defraud GSA.
Thus, we conclude that the use of special skill as a basis for the
upward adjustment under Section 3B1.3 constituted legal error.
As noted earlier, however, the district court need only find one of
the grounds — abuse of a position of trust or use of a special skill —
is satisfied in order for the enhancement under Section 3B1.3 to
apply. Therefore, because we have already found that the upward
adjustment pursuant to Section 3B1.3 was justified based on Stone’s
abuse of a position of trust, Stone’s sentence need not be recalculated.
B.
Stone also contends that the district court erred by imposing a two-
level enhancement for using sophisticated means to impede discovery
UNITED STATES v. STONE 19
of his tax fraud offense. See U.S.S.G. § 2T1.1(b)(2). We review this
claim for clear error. See United States v. Kontny, 238 F.3d 815, 821
(7th Cir. 2001).
"Sophisticated means" includes "conduct that is more complex or
demonstrates greater intricacy or planning than a routine tax-evasion
case." U.S.S.G. § 2T1.1, comment. (n.4). Standard examples include
hiding assets in offshore bank accounts and conducting business
through corporate shells or fictitious entities. Id.
The district court applied the two-level enhancement after noting
that "the offense characteristic sophisticated means is captured in
. . . [this] instance where the income is income in kind and is itself
the output of a fraudulent scheme." J.A. 1827. The district court fur-
ther found that Stone, among other things, "used fictitious entities,"
and had "people buying dogs in Alabama and bringing them . . . [to]
Maryland to make a gift to Mr. Stone" in order to impede discovery
of his tax fraud. Id.
Stone argues that his tax evasion was not sophisticated because it
was nothing more than a failure to report income derived from "side
jobs" and income in the form of in-kind benefits received during the
conspiracy. We disagree. While it is true that the commentary to the
Sentencing Guidelines "illustrates with examples suggesting a higher
level of financial sophistication, . . . the essence of the definition is
merely deliberate steps taken to make the offense difficult to detect."
Kontny, 238 F.3d at 821 (internal quotation marks and alteration omit-
ted). As the Seventh Circuit noted in Kontny, "‘sophistication’ must
refer not to the elegance, the ‘class,’ the ‘style’ of the defrauder —
the degree to which he approximates Cary Grant — but to the pres-
ence of efforts at concealment that go beyond . . . the concealment
inherent in tax fraud." Id.In this case, Stone received income "disguised as a gift, . . . [as]
construction on a personal home, [and as] provision of personal ser-
vices." J.A. 1828. Even though Stone’s actions did not involve the use
of offshore bank accounts or corporate shells, his use of "fictional
entities to perpetrate the fraud" that created the income, as well as the
use of in-kind gifts and services to disguise the unreported income
undeniably made it more difficult for the IRS to detect his evasion.
20 UNITED STATES v. STONE
This case does not present the situation where an individual taxpayer
merely "completed his individual 1040 tax form with false informa-
tion to avoid paying some of his federal taxes." United States v.
Jagim, 978 F.2d 1032, 1042 (8th Cir. 1992). Thus, the district court’s
finding of sophisticated means was not clearly erroneous.
C.
Yates maintains that the district court erred in imposing a three-
level enhancement under Section 3B1.1(b) of the Sentencing Guide-
lines based upon his role in the offense. Section 3B1.1(b) of the Sen-
tencing Guidelines permits an upward adjustment of three levels if the
"defendant was a manager or supervisor (but not an organizer or
leader) and the criminal activity involved five or more participants."
U.S.S.G. § 3B.1.1(b). Role in the offense adjustments are reviewed
for clear error. United States v. Sheffer, 896 F.2d 842, 846 (4th Cir.
1990). Yates contends that he did not perform the role of a manager
or supervisor, and that there was not evidence of five or more partici-
pants involved in the activity.
We look first to whether the criminal activity involved five or more
participants. "A ‘participant’ is a person who is criminally responsible
for the commission of the offense"; however, that person "need not
have been convicted." U.S.S.G. § 3B1.1, comment. (n.1). Both parties
agree that Stone, Fitzgerald, and Lewis can be defined as participants.
As a member of the conspiracy, Clark is also a participant.8 Finally,
Yates himself can be counted as a participant for purposes of sentenc-
ing enhancement, as there is no requirement that there be five partici-
pants in addition to their manager. Instead, the enhancement may be
applied as long as there is criminal activity that involved five or more
participants. See United States v. Fells, 920 F.2d 1179, 1182 (4th Cir.
1990); see also United States v. Wilder, 15 F.3d 1292, 1299 (5th Cir.
1994); United States v. Colletti, 984 F.2d 1339, 1346 (3rd Cir. 1992);
United States v. Montoya, 979 F.2d 136, 138 (8th Cir. 1992). Thus,
there are at least five participants in this criminal activity.
8
The fact that Clark had no connection with Yates is irrelevant. Section
3B1.1 of the Sentencing Guidelines does not require the manager, in this
case Yates, to have held a managerial role over all of the participants.
UNITED STATES v. STONE 21
Turning to the question of Yates’s role in the offense, the record
supports the district court’s finding that Yates was a manager or
supervisor. Yates recruited the Gallos to set up companies through
which false work orders were submitted to GSA. As the district court
noted, "[Yates] managed [the Gallo branch of the conspiracy] by set-
ting up the companies. He managed it by contacting GSA. He man-
aged it by doing the paperwork." J.A. 1821. Yates also managed the
cover-up of the scheme to defraud.
Contrary to Yates’s assertion, his role in the offense was not the
equivalent of a mere "billing clerk." J.A. 1637. Rather, the evidence
clearly indicates that Yates "not only managed [the Gallo branch of
the conspiracy], but he actually ran the whole thing," and, at the very
least, coordinated the activities of others. J.A. 1821. This is sufficient
to warrant the enhancement. Thus, the district court did not clearly err
in finding that Yates’s role in the offense justified a three-level
enhancement under Section 3B1.1(b) of the Guidelines.
VIII.
Finally, the government has cross-appealed Yates’s sentence,
maintaining that the court erred by departing downward nine levels
on the basis of Yates’s family responsibilities. Yates responds that it
was proper for the court to award him the downward departure
because of the extraordinary nature of his family circumstances.
At the sentencing hearing, Yates moved for a downward departure
on the basis of several factors, chief among which were his family
responsibilities.9 The court heard evidence that Yates’s son, Adam,
was severely disabled and required almost constant care; that Yates’s
wife, Adam’s primary caretaker, was ill and unable to take time to
care for herself because of Adam’s needs; and that Yates’s daughter,
a high school student, needed parental support and guidance. The dis-
trict court, after considering Yates’s argument and the government’s
objection, granted the downward departure on the basis of Yates’s
9
Specifically, Yates requested a downward departure on the basis of
his medical and mental situation, his employment history, his family
responsibilities, and the totality of the circumstances.
22 UNITED STATES v. STONE
family responsibilities pursuant Section 5H1.6 of the Guidelines.10 In
granting the departure, the district court deemed Yates’s family
responsibilities to be extraordinary.
[B]oth Adam’s and Mrs. Yates’[s] life will be so under-
mined, and their support systems will be so at risk if Mr.
Yates is away from them for an extended period of time,
that I believe and I find that this is the extraordinary circum-
stance in this rare disfavored guideline factor. . . . Yates’[s]
incarceration for 24 months would destroy this family by
destroying Mrs. Yates and casting Adam into an abyss out
of which I am absolutely convinced he would never climb.
. . . So, I find and conclude that a departure, though disfa-
vored, is independently justified under [Section] 5H1.6.
J.A. 1895, 1897, 1901.
Under the Sentencing Guidelines, a district court usually must
impose a sentence within the applicable guideline range. See United
States v. Barber, 119 F.3d 276, 279 (4th Cir. 1997). A sentencing
court may depart from the applicable guideline range only when it
"finds that there exists an aggravating or mitigating circumstance of
a kind, or to a degree, not adequately taken into consideration by the
Sentencing Commission in formulating the guidelines." 18 U.S.C.A.
§ 3553(b) (West 2003); see United States v. Wilson, 114 F.3d 429,
432 (4th Cir. 1997).
When deciding whether a departure is appropriate, the sentencing
court must first establish "whether the potential basis for departure
was forbidden, encouraged, discouraged, or unmentioned by the
Commission." Wilson 114 F.3d at 433. In this case, the district court
10
The district court granted the downward departure under "both
5H1.6, and, to the extent it adds anything . . . 5K2.0." J.A. 1906. While
the court threw "everything [into] the mix" when considering whether a
downward departure was warranted, it based its decision primarily on
Section 5H1.6 of the Guidelines and Yates’s family circumstances. J.A.
1907 & 1893. Specifically, the court noted that it did not "believe a
departure [was] appropriate on the basis of Mr. Yates’[s] special medical
condition [alone]." J.A. 1893.
UNITED STATES v. STONE 23
departed on the basis of Yates’s family circumstances, namely his
role as a caregiver for his physically and developmentally disabled
child. The Guidelines provide, however, that "[f]amily ties and
responsibilities . . . are not ordinarily relevant in determining whether
a sentence should be outside the applicable guideline range." U.S.S.G.
§ 5H1.6. Thus, the basis for the downward departure employed by the
district court in this case is a "discouraged" factor. Where a factor is
discouraged, "the court should depart only if the factor is present to
an exceptional degree or in some other way makes the case different
from the ordinary case where the factor is present." United States v.
Koon, 518 U.S. 81, 96 (1996).
This court has previously determined that a departure based on
family responsibilities is "permitted only upon a finding that the
defendant’s family ties or responsibilities are extraordinary." Wilson,
114 F.3d at 434. "Generally, a sentencing court may depart downward
on this basis only if it finds that the defendant is essentially ‘irreplace-
able.’" Elliott v. United States, 332 F.3d 753, 769 (4th Cir. 2003)
(quoting United States v. McClatchey, 316 F.3d 1122, 1133 (10th Cir.
2003) (reversing downward departure for defendant based on care for
his son because nothing in record "suggest[ed] that another individual
could not provide the necessary assistance in [defendant’s]
absence")); see also United States v. Sweeting, 213 F.3d 95, 104 (3rd
Cir. 2000) (reversing downward departure based on defendant’s
responsibility for child with Tourette’s Syndrome because nothing
indicated that the defendant was "so irreplaceable that her otherwise
ordinary family ties and . . . responsibilities are transformed into the
‘extraordinary’").
Although we sympathize with Yates’s situation, the record fails to
demonstrate that the care he provides is "irreplaceable." To the con-
trary, the evidence reflects that it is Mrs. Yates, Adam’s primary care-
giver, rather than Mr. Yates, who is "irreplaceable." While Mr. Yates
does indeed play an important role in holding the family together and
providing Mrs. Yates a great deal of support, his primary function is
that of breadwinner. While Yates’s incarceration will undoubtedly
make life difficult for this already strained family, the effect of his
absence on the family’s financial situation and support network is not
24 UNITED STATES v. STONE
different from what any family might face if the primary wage earner
were sentenced to continuous imprisonment.11
Indeed, this court has found improper Section 5H1.6 departures
under circumstances equally as compelling as Yates’s. See Elliot, 332
F.3d at 768-69 (4th Cir. 2003) (finding that district court abused its
discretion in departing downward under § 5H1.6 where defendant was
primary caregiver for an incapacitated husband who suffered from
cancer, heart disease, diabetes, memory loss and confusion); Wilson,
114 F.3d at 434 (reversing downward departure based on § 5H1.6
where father who was 21 years old had remained with his newborn
child rather than abandoning child); United States v. Rybicki, 96 F.3d
754, 759 (4th Cir. 1996) (holding that district court abused its discre-
tion in departing downward under § 5H1.6 based on defendant’s
responsibilities for his wife and son, both of whom had medical prob-
lems); United States v. Maddox, 48 F.3d 791, 799 (4th Cir. 1995)
(reversing downward departure for extraordinary family ties where
the district court found that the defendant provided invaluable care for
his severely mentally disabled sister and his mother and was "crucial
to the structure and stability of his family"); United States v. Bell, 974
F.2d 537, 538-39 (4th Cir. 1992) (disapproving departure based on
§ 5H1.6 because defendant’s responsibilities in a two-parent family
were even less extraordinary than those of a defendant who was a sin-
gle, custodial parent, despite finding of the district court "that an
extended period of incarceration would lead to the destruction of the
family"). Accordingly, while we appreciate the difficult circum-
stances with which the district court was faced, we hold that the find-
ing that Yates’s family situation constituted an extraordinarily family
responsibility was an abuse of discretion.12
11
The district court noted that the family would be able survive finan-
cially during the time of Yates’s incarceration.
12
To the extent that the district court based its departure under Section
5K2.0 on the accumulation of several factors, our rejection of the pri-
mary factor, Yates’s family responsibility, necessarily results in a finding
that the district court’s departure under Section 5K2.0 was also an abuse
of discretion.
UNITED STATES v. STONE 25
IX.
For the foregoing reasons, we affirm Stone’s convictions and sen-
tence. We also affirm Yates’s convictions, but we vacate his sentence
and remand for resentencing in accordance with this opinion.
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED