United States v. George Chivers

Case: 11-10430 Document: 00511975410 Page: 1 Date Filed: 09/05/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
September 5, 2012
No. 11-10430 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff – Appellee
v.
GEORGE BRENT CHIVERS,
Defendant – Appellant
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:10-CR-35-3
Before DAVIS, DENNIS, and HAYNES, Circuit Judges.
PER CURIAM:*
Defendant-Appellant George Chivers (“Chivers”) appeals his conviction
and sentence for conspiracy, mail fraud, and aiding and abetting. He contends
on appeal that he was improperly joined with defendants with whom he did not
participate in a conspiracy; that insufficient evidence supported his conviction;
that the district court improperly admitted an exhibit into evidence; and that the
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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district court erred in applying a four-level “aggravating-role” enhancement
under U.S.S.G. § 3B1.1 and a two-level obstruction-of-justice enhancement
under U.S.S.G. § 3C1.1. We VACATE and REMAND for resentencing on the
obstruction enhancement, but AFFIRM on all other issues.
I. Facts and Procedural History
Over a period of two years, Zurich American Insurance Company
(“Zurich”), Hartford Lloyds Insurance Company (“Hartford”), and Continental
Casualty Company received, processed, and investigated seven, nearly-identical
commercial insurance claims involving the theft of telemarketing equipment
known as “autodialers” from the vehicles of Chivers, his wife Sherrion Chivers
(“Sherrion”), Flynn Patrick Singleton (“Singleton”), and Singleton’s mother,
Ernestine Singleton-Davis (“Davis”). Upon noticing the similarity of several
claims, Zurich and Hartford referred the claims to their respective investigative
units. The subsequent investigations ultimately discovered that the invoices
submitted in support of the claims were fake.
A grand jury charged Chivers, Sherrion, Singleton, and Davis in a five-
count indictment for conspiracy to commit mail fraud and the substantive
offense of mail fraud. Count One charged all four defendants with conspiracy to
commit mail fraud in violation of 18 U.S.C. § 1349. The remaining counts
charged mail fraud and aiding and abetting, in violation of 18 U.S.C. §§ 1341
and 1342: Davis and Singleton were charged in Counts Two and Three. All four
defendants were charged in Count Four. Chivers, Singleton, and Sherrion were
charged in Count Five. Singleton pled guilty to one count of mail fraud and
aiding and abetting, and Davis pled guilty to a one-count superseding
information for making a false statement in violation of 18 U.S.C. § 1001.
Chivers and Sherrion proceeded to trial, where Singleton testified that the
insurance scheme stemmed from a discussion with Chivers regarding an article
about insurer reimbursement. Singleton admitted to creating the fictitious
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invoices at Chivers’s request. Singleton also conceded that he created a shell
company, in part, to generate false invoices that he could use as replacement
invoices for portions of the claims. Singleton further testified that he had
discussions with Chivers regarding each of the autodialer burglaries.
Besides Singleton’s testimony and the insurance and Post Office
investigations’ findings, the evidence against Chivers included claim files, proof-
of-loss forms, autodialer invoices, and commercial policies. The Government also
offered Exhibit 59, a timeline of events that summarized much of this evidence.
Chivers and Sherrion were convicted on all counts charged. The district
court sentenced Chivers to 57 months’ imprisonment on each count, to be served
concurrently, followed by three years of supervised release. Chivers timely
appealed.
II. Procedural and Evidentiary Arguments
We begin by briefly addressing—and rejecting—three of Chivers’s issues
on appeal. Chivers first argues that the evidence introduced at trial established
that Singleton was part of a separate conspiracy with Davis that did not include
Chivers, and, accordingly, that the evidence of that conspiracy prejudiced
Chivers’s defense. Because Chivers failed to raise this issue before the district
court, we review for plain error. See, e.g., Puckett v. United States, 556 U.S. 129,
135 (2009). The evidence at trial linked Chivers to Singleton and Davis, and
Chivers was charged with and convicted of conspiracy. We thus find no error in
the district court’s joinder of Chivers, Singleton, and Davis in the same criminal
action. In any event, Chivers makes no effort to explain why the evidence
introduced at trial—at which only Chivers and Sherrion were tried—prejudiced
his substantial rights. We affirm the district court on this issue.
Chivers next contends—in two conclusory sentences—that insufficient
evidence supported his conviction. Because he provides no explanation in
support of this argument, we consider it abandoned. United States v. Stalnaker,
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571 F.3d 428, 434 (5th Cir. 2009) (“Where a defendant asserts ‘that the evidence
was insufficient to convict him’ but fails ‘to make any argument whatsoever to
support this contention,’ the issue is considered abandoned.”) (citation omitted).
In any case, there was plenty of evidence against Chivers.
Chivers asserts in his final evidentiary objection that the district court
erred in admitting Exhibit 59’s timeline of events. We review challenges to a
district court’s evidentiary rulings for abuse of discretion, “but affirm so long as
any error is harmless.” United States v. Bishop, 264 F.3d 535, 546 (5th Cir.
2001). To prevail, Chivers “must demonstrate that the district court’s ruling
caused him substantial prejudice.” Id.
“Rule 1006 [of the Federal Rules of Evidence] allows admission of
summaries when (1) the evidence previously admitted is voluminous, and (2)
review by the jury would be inconvenient.” Id. at 547. “Summary charts in
particular are admissible when (1) they are based on competent evidence already
before the jury, (2) the primary evidence used to construct the charts is available
to the other side for comparison so that the correctness of the summary may be
tested, (3) the chart preparer is available for cross-examination, and (4) the jury
is properly instructed concerning use of the charts.” Id.
We discern no abuse of discretion in the district court’s admission of
Exhibit 59. The Government used Exhibit 59 to summarize claim records and
policy documents that totaled approximately 1,900 pages and were not subject
to convenient in-court examination. This evidence was already before the jury
and was also available to Chivers. Furthermore, the chart’s preparer testified
regarding Exhibit 59, and thus was available for cross-examination. Finally, the
district court instructed the jury that Exhibit 59 was not independent evidence,
was admitted to assist them in summarizing other evidence, and was to be
disregarded if the jury found it to be inaccurate. Accordingly, we find no
reversible error in the district court’s ruling on this issue.
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III. Sentencing Enhancements
We now turn to Chivers’s two sentencing-related arguments. “This court
reviews de novo the district court’s guidelines interpretations and reviews for
clear error the district court’s findings of fact.” United States v. Miller, 607 F.3d
144, 147 (5th Cir. 2010) (citation omitted). If a factual finding is plausible in
light of the entire record, it is not clearly erroneous. United States v. Brooks, 681
F.3d 678, 712 (5th Cir. 2012). “A factual finding is clearly erroneous only if,
based on the entirety of the evidence, the reviewing court is left with the definite
and firm conviction that a mistake has been made.” Id. Whether certain factual
findings are amenable to an enhancement’s application, however, is a question
of law reviewed de novo. Miller, 607 F.3d at 148.
We begin with Chivers’s objection to the four-level role enhancement under
U.S.S.G. § 3B1.1. The district court found that Chivers acted in a leadership
capacity by exercising a higher degree of decision-making authority and by
taking a more active role in the conspiracy than his wife. See U.S.S.G. §
3B1.1(a) & cmt. n.4. The district court based these findings on specific instances
of Chivers’s criminal activity and on statements made by Sherrion to a postal
inspector. The district court also found that the Chiverses engaged in
“extensive” criminal activity. Id. § 3B1.1(a).
We affirm the district court’s application of this enhancement. The record
does not establish that the district court clearly erred in finding that Chivers
acted in a leadership capacity over Sherrion, even if he did not exercise such
authority over Singleton.1 Chivers, moreover, makes no arguments against the
district court’s finding that the Chiverses engaged in “extensive” criminal
activity. Id. (providing that the four-level enhancement applies if the “criminal
activity” involved “five or more participants or was otherwise extensive”)
1
A conspiracy may have multiple “leaders” or “organizers.” U.S.S.G. § 3B1.1 cmt. n.4.
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(emphasis added). Accordingly, we conclude that the district court did not err
in applying the aggravating-role enhancement.
We reach a different conclusion, however, in regard to the district court’s
application of a two-level enhancement for obstruction of justice pursuant to
U.S.S.G. § 3C1.1, which provides for an enhancement where:
(1) the defendant willfully obstructed or impeded, or attempted to
obstruct or impede, the administration of justice with respect to the
investigation, prosecution, or sentencing of the instant offense of
conviction, and (2) the obstructive conduct related to (A) the
defendant’s offense of conviction and any relevant conduct; or (B) a
closely related offense . . . .
Chivers’s Pre-Sentence Report (“PSR”) noted that “[d]uring a two-hour
examination under oath conducted by attorneys for Zurich,” Chivers “was
untruthful concerning his statement[s] that he paid . . . with a cashier’s check
for the autodialers,” that the autodialers cost $25,000 each, and that he had
loaded the autodialers into his vehicle. The examination occurred during
Zurich’s private, claims-processing investigation into Chivers’s first fraudulent
claim, and was unrelated to any then-existing criminal investigation. Zurich
ultimately paid Chivers approximately $30,000 on his roughly $82,500 claim.
The PSR justified application of § 3C1.1 by citing commentary explaining
that the enhancement is warranted if the defendant committed perjury “during
the course of a civil proceeding if such perjury pertains to conduct that forms the
basis of the offense of conviction.” U.S.S.G. § 3C1.1 cmt. n.4(B).2 The PSR
reasoned that, because Chivers “was convicted of fraudulent activity in
connection with the autodialers, his testimony under oath during Zurich’s
insurance investigation [was] relevant conduct to the offense of conviction.”
2
Note 4 provides “a non-exhaustive list of examples of the types of conduct to which
this enhancement applies.” U.S.S.G. § 3C1.1 cmt. n.4.
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The district court followed this line of reasoning and determined that
§ 3C1.1 applied, finding that Chivers’s “false statements did hamper or thwart
Zurich’s ability to identify when and if the autodialers were actually purchased.”
The district court believed that “the statement taken by [Zurich] under oath does
fall within [the] type of statement or type of proceeding contemplated under the
applicable provision of the sentencing guidelines.” That is, the district court
interpreted § 3C1.1 to permit an obstruction enhancement if a defendant’s
perjury impeded a private civil investigation, so long as the subject matter of
that investigation later relates in some way to the offense of conviction.3
This interpretation is inconsistent with other parts of § 3C1.1. Where
possible, we must harmonize Guidelines and their commentary. See, e.g., United
States v. Pedragh, 225 F.3d 240, 244-45 (2d Cir. 2000); United States v. Guerra,
962 F.2d 484, 486 (5th Cir. 1992); see generally Stinson v. United States, 508
U.S. 36 (2000). Here, that requires reading Note 4(B) in light of “temporal” and
“awareness” requirements found elsewhere in § 3C1.1. United States v. Lister,
53 F.3d 66, 71 (5th Cir. 1995); see also Guerra, 962 F.2d at 486 (“Obviously, even
if never cited by a party, we can—indeed must—consider the commentary to the
guideline used by the district court.”).
As noted above, the obstruction enhancement requires a defendant to have
“willfully obstructed or impeded, or attempted to obstruct or impede, the
administration of justice with respect to the investigation . . . of the instant
offense of conviction.” U.S.S.G. § 3C1.1 (emphasis added). To bring
“[o]bstructive conduct that occurred prior to the start of the investigation of the
instant offense” within § 3C1.1’s ambit, the conduct must have been
3
Chivers does not address whether a private insurance investigation and concomitant
examination under oath is a “civil proceeding” within the meaning of § 3C1.1. Because we
decide this issue on other grounds, we need not reach this question. We will assume, without
deciding, that it is.
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“purposefully calculated, and likely, to thwart the investigation or prosecution
of the offense of conviction.”4 Id. § 3C1.1 cmt. n.1. Although the Guideline does
not define “investigation,” our jurisprudence provides that the investigation,
whether civil or criminal, must either be government-led or have some expected
connection to a government-led investigation.
Our recent decision in Brooks is instructive. 681 F.3d 678. Brooks
concerned three defendants convicted of violating the Commodities Exchange
Act and committing wire fraud for their attempts to manipulate the natural gas
market. Id. at 684-85. The defendants’ employer and its parent company had
become the target of several state and federal agencies’ investigations, as well
as a United States Attorney’s Office grand jury subpoena. Id. at 686. In
response, the parent company hired outside counsel to conduct an internal
investigation. Id. The defendants participated in the internal investigation and
were aware of the government investigations when they did so. Id. at 686-87.
The Brooks district court found that the defendants “provided materially
false information to the investigating government officials because they [misled]
the individuals involved in [the parent company’s] internal investigation.” Id.
at 716. Based on that finding, it applied obstruction enhancements to each
defendants’ offense level. On appeal, the defendants argued that the
enhancement did not apply because their false statements “occurred before any
government investigation started, . . . were not made directly to government
agents, and . . . did not actually impede the investigation.” Id. at 716.
4
Chivers uses language from Note 1 in his brief without actually citing Note 1. The
Government makes no reference to Note 1, arguing almost exclusively under Note 4(B).
Indeed, the Government in its brief says that the perjury’s “effect on [the postal inspector’s]
investigation . . . does not form the basis of the [obstruction] enhancement,” and it makes no
argument that such perjury was an attempt to impede that investigation. As we explain
below, it is not enough simply to show that the perjury “pertains” to the offense of conviction.
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We disagreed. We affirmed an obstruction enhancement as to one
defendant whom the record showed also destroyed documents during a related
state civil investigation. Our discussion noted that the relevant Guidelines then
in effect “did not require the investigation to be led by the federal government,
or to be a criminal investigation, so long as it was led by government officials.”
Id. at 716 n.43 (emphasis added); accord United States v. Emery, 991 F.2d 907,
911-12 (1st Cir. 1993).5
We also upheld enhancements for two other defendants who lied to outside
counsel during the parent company’s internal investigation. Brooks, 681 F.3d
at 717. “[A]lthough the statements were not made directly to government
officials,” we affirmed the Brooks district court’s finding “that they were made
with intent to be communicated to government officials, and thus impede the
investigation into their wrong-doing.” Id. We emphasized that the defendants
knew that the internal investigation was in response to specific inquiries from
the CFTC, the Federal Energy Regulatory Commission, and the United States
Attorney’s Office. Id.; see also id. at 688 (noting that the defendants participated
in an internal email discussion that referenced the ongoing investigations and
the corresponding need to avoid discussing certain matters in writing).
5
A subsequent amendment to § 3C1.1 did not alter this requirement. In 2006, the
Sentencing Commission amended § 3C1.1 to read “with respect to the investigation,” instead
of “during the course of the investigation.” U.S.S.G. app. C, Vol. III, amend. 693 (2011) (the
“Amendment”). The Commission made this change so that courts may consider conduct that
occurred prior to an investigation, but it gave no indication of an intent to discard the requisite
link between a government investigation and the obstructive conduct. See id. Indeed, the
Amendment altered Note 1 to provide that obstructive conduct occurring before the start of
the investigation, “may be covered . . . if the conduct was purposefully calculated, and likely,
to thwart the investigation or prosecution of the instant offense.” Id. (emphasis added).
The Amendment also added the part of Note 4(B) at issue here. Before 2007, Note 4(B)
discussed only “committing, suborning, or attempting to suborn perjury.” See, e.g., U.S.S.G.
§ 3C1.1 cmt. n.4(B) (2004). The Amendment inserted the clause “during the course of a civil
proceeding if such perjury pertains to conduct that forms the basis of the offense of conviction.”
U.S.S.G. § 3C1.1 cmt. n.4(B) (2010); see also U.S.S.G. app. C, Vol. III, amend. 693.
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Impeding a private civil investigation like Zurich’s without some
contemporary nexus to a government-led investigation, then, by itself does not
justify an obstruction of justice enhancement.6 To be clear, committing perjury
during a private civil proceeding initiated prior to a government-led
investigation may support an obstruction enhancement, but only if the private
investigation had some existing or expected connection to the later government
inquiry and the perjury was “purposefully calculated . . . to thwart [that]
investigation or prosecution of the offense of conviction.” U.S.S.G. § 3C1.1 cmt.
n.1. It is not enough to show that the obstructive conduct simply impeded a civil
investigation that later turns out to relate (or lead) to a government
investigation and an offense of conviction. See United States v. Zagari, 111 F.3d
307, 329 (2d. Cir. 1997) (“Just because perjured testimony is given in a related
action, and simply because that testimony is found to have been material to the
related proceeding, does not mean that the statements are material to the
instant [criminal] proceeding.”); cf. Lister, 53 F.3d at 71 (explaining that §
3C1.1’s requirements “reflect the notion that once government action has been
initiated, and an individual is aware of such action, we expect and encourage
that individual to cooperate and to comply with the authorities, and that
cooperation and compliance includes the cessation of any conduct that facilitates
the successful completion of a crime”).
The lies Chivers told under oath are part of the original crime, rather than
its cover-up. Thus, the outcome here might be different if, for example, Chivers
6
Other circuit cases are not to the contrary. See United States v. DeGeorge, 380 F.3d
1203,1222 (9th Cir. 2004) (“[T]he Defendant’s perjury occurred during the civil trial as part
of his scheme to defraud and not during the criminal investigation as part of an attempt to
obstruct justice.” (Note 8 context)); United States v. Fiore, 381 F.3d 89, 94 (2d Cir. 2004)
(finding an SEC civil investigation into conduct giving rise to a later criminal charge was
sufficient to render obstructive conduct relevant for sentencing); United States v. McGovern,
329 F.3d 247, 253 (1st Cir. 2003) (concluding that there was a “common-sense connection”
between the obstruction of Medicare and Medicaid audits and Medicare and Medicaid fraud).
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lied under oath during a private investigation initiated after Zurich paid his
claim. Chivers’s lies then would no longer simply be an effort to see his original
fraudulent act through to fruition—obtaining payment on the bogus insurance
claim. At that point, the perjury would instead be reasonably characterized as
“purposefully calculated and likely” to forestall and impede an expected criminal
investigation. See Lister, 53 F.3d at 71 (reasoning “that the obstruction of justice
enhancement should apply only to those cases where misconduct occurs with the
defendant’s knowledge of an investigation, or at least with the defendant’s
correct belief that an investigation is probably underway”); cf. United States v.
Wilson; 904 F.2d 234, 235 (5th Cir. 1990) (“[The defendant’s] intent clearly was
not to impede the investigation or prosecution of his offense. His intent was to
disguise himself in such a way so that his crime would go unpunished. At that
he was unsuccessful, and he deserves to be punished for his underlying offense.
An increase in his offense level is, however, unwarranted.”).7
In applying the obstruction enhancement here, the district court made no
finding that Chivers’s perjury was purposefully calculated and likely to impede
the mail fraud investigation or that Chivers knew that Zurich’s findings—like
the results of the internal investigation in Brooks—were intended to be
communicated to government officials for use in a government-led investigation.8
7
The defendant in Wilson was under government investigation during the relevant
time period, but he “was unaware that any investigation was taking place and prosecution had
not yet begun.” 904 F.2d at 235.
8
See Fiore, 381 F.3d at 94-95 (“Where federal administrative and prosecutorial
jurisdiction overlap, subsequent criminal investigations are often inseparable from prior civil
investigations, and perjury in the prior proceeding necessarily obstructs—if successful, by
preventing—the subsequent investigation. Securities fraud is a proper subject of both
administrative and criminal investigations, and whether the administrative enforcement
officials proceed before, after, or simultaneously with criminal prosecutors is often determined
by fortuitous circumstances regarding possession of particular evidence, available resources,
and legal issues, such as statutes of limitation. . . . SEC enforcement officials and prosecutors
all expect coordination at some investigative level and perceive the various proceedings as
integral to each other. A subject of the investigations will also view each as a different facet
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The district court instead based application of the enhancement solely on
Chivers’s perjury impeding Zurich’s claims-processing investigation, and the
Government urges that we do the same. Under the analysis above, however,
that is not a proper basis for an obstruction enhancement under § 3C1.1.
Accordingly, we AFFIRM Chivers’s conviction, VACATE his sentence, and
REMAND to the district court for resentencing.
AFFIRMED in part, VACATED and REMANDED in part.
of one problem. For example, a subject who decides upon perjury in an SEC proceeding will
do so principally because the goal is to avoid all liability or criminal liability in particular.”).
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