United States v. Lineberry

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT June 19, 2006
Charles R. Fulbruge III
Clerk
No. 05-40846
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JED STEWART LINEBERRY,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of Texas
(4:04-CR-25-ALL)
Before KING, BARKSDALE, and DENNIS, Circuit Judges.
PER CURIAM:*
Primarily at issue is whether Jed Lineberry’s indictment,
charging him with laundering monetary instruments (money
laundering), in violation of 18 U.S.C. § 1956(a)(1)(A)(i), was
constructively amended. Also at issue are: the denials of his
judgment-of-acquittal (JOA) and new-trial motions for money
laundering; the JOA denial for his false-declaration count; the
jury charge regarding money-laundering elements; and his criminal
*
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this opinion should not be published and is not precedent except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.
history being based upon judicial findings for prior convictions.
AFFIRMED.
I.
In February 2004, Lineberry was indicted on 19 money-
laundering counts and one count of false declaration before a
court. At his trial that October, the Government offered evidence
that, beginning in mid-2001, Lineberry and his wife, Melissa
Skeens, recruited, organized, promoted, and managed Worldwide
Escorts, a prostitution organization operating out of Plano, Texas.
Using an Internet website, they listed and advertised the
prostitutes, including their physical attributes and sexual
interests and inhibitions. Upon selecting a prostitute, the client
would call the 1-800 telephone number listed on the website.
Lineberry, Skeens, or a receptionist answered the calls and
prepared a customer information sheet, including the fees and
credit-card number for customers not paying cash, and made
arrangements for the customer and prostitute to meet.
The organization was operated out of Lineberry and Skeens’
residence, which Lineberry used to interview prostitutes and to
take sexually explicit photographs of, and have sex with, them.
The prostitutes sometimes had sex with their customers in the house
while Lineberry was there.
As part of the Government’s case, an undercover police officer
with the Plano Police Department testified she went to Lineberry’s
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residence to interview for a position with Worldwide Escorts. She
was given an employment application asking whether she had a
problem being photographed nude and was willing, by having sex with
the interviewer, to display the skills that would make her suitable
for the job. The latter question was followed by a sentence
stating that a negative reply meant she would not be hired.
Lineberry and Skeens orchestrated the prostitution and money-
laundering activities of at least 40 prostitutes in multiple
States; Lineberry was the operation’s organizer and leader. By the
fall of 2002, Lineberry and Skeens generated approximately $560,000
from their illegal activities. They transferred and distributed
these proceeds via the United States banking system and various
credit-card systems; portions were used to promote and carry on the
organization’s activities, such as recruiting, advertising,
apartment rental, payroll expenses for prostitutes, and
communications expenses.
The Government also offered evidence regarding Lineberry’s
false declaration before a court, presenting portions of a
transcript from a sentencing hearing for Lineberry’s earlier felon-
in-possession-of-a-firearm trial. There, Lineberry testified he
never received any money from his escort business. In response to
the false-declaration charge, Lineberry offered supplemental
testimony showing he later clarified that money was used to make
house payments and pay bills.
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Lineberry also presented evidence he was operating a legal
escort service. He claimed he contacted the Texas Attorney
General’s office to ascertain how to operate within legal limits.
Although many prostitutes testified that having sex with customers
was an implied condition of employment, Lineberry pointed to their
employment contract, which stated: “I agree that I will never have
sex as part of a fee or for a fee”.
At the close of the Government’s evidence, Lineberry moved for
JOA; it was denied. This motion was not renewed, however, at the
close of all the evidence.
The jury found Lineberry guilty of 18 of the 19 money-
laundering counts and the false-declaration count. Pursuant to a
special verdict form, it also found: Lineberry was the organizer
or leader of a criminal activity that involved five or more
participants or was otherwise extensive; he laundered funds between
$400,000 and $1 million; and his offense involved a commercial sex
act through the use of physical force, fraud, or coercion.
Lineberry moved for a new trial claiming, inter alia, the
Government offered insufficient evidence to support the verdict and
the court erred in denying his motion to dismiss the indictment.
That motion was denied in November 2004.
In May 2005, Lineberry was sentenced, inter alia, to 90 months
for each money-laundering, and 60 months for his false-declaration,
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conviction. The sentences were to run concurrently upon completion
of his earlier federal sentence.
II.
Lineberry claims: his indictment was constructively amended;
his JOA and new-trial motions for money laundering were erroneously
denied; his JOA motion was erroneously denied for his false-
declaration conviction because the evidence was insufficient to
prove various elements of the offense; the jury charge improperly
stated the money-laundering elements; and his criminal history was
based erroneously upon judicial findings of prior convictions.
A.
Primarily at issue is whether Lineberry’s indictment was
constructively amended. We review de novo. United States v.
Alhalabi, 443 F.3d 605, 614 (7th Cir. 2006).
As discussed infra, to prove the money-laundering charges
alleged in the indictment, the Government was required to prove,
inter alia, that Lineberry knew the property involved in the
financial transactions represented the proceeds of some form of a
felony. See 18 U.S.C. § 1956(a)(1)(A)(i) and (c)(1). The
indictment stated:
[Lineberry,] with the intent to promote the
carrying on of a specific unlawful activity as
defined in Title 18, United States Code,
Section 1956(c)(7), 1961(1) and 1952(b),
namely, the use of an interstate facility to
distribute the proceeds and promote the
unlawful activity of prostitution, did
knowingly and willfully conduct and cause to
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be conducted financial transactions designed
to promote the carrying on of said unlawful
activity, to wit: ... financial transactions
... which occurred in interstate commerce, and
while conducting said financial transactions,
[Lineberry] knew the property involved in the
financial transactions represented the
proceeds of some form of unlawful activity,
namely, prostitution in violation of the laws
of the State of Texas.
(Emphasis added.)
The indictment did not identify the specific underlying felony
offense that provided the unlawful proceeds. Accordingly,
Lineberry claims it was constructively amended, in violation of his
Fifth Amendment right to indictment by grand jury and his due
process right to a fair trial, when the jury was instructed it must
find “the financial transaction involved the proceeds of a
specified unlawful activity, namely the use of an interstate
facility to distribute the proceeds and promote the unlawful
activity of aggravated promotion of prostitution”, a felony
offense. (Emphasis added.) Pursuant to Texas Penal Code Annotated
§ 43.04(a), aggravated promotion of prostitution occurs when a
person “knowingly owns, invests in, finances, controls, supervises,
or manages a prostitution enterprise that uses two or more
prostitutes”.
Lineberry’s challenge to the indictment was first raised only
five days before trial, when he moved to dismiss it for failure to
identify the specific felony offense he was alleged to have known
generated the proceeds involved in the indictment’s alleged money-
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laundering transactions. After a telephonic hearing on 1 October
2004, the court orally denied the motion. Lineberry renewed his
motion on the first day of trial, requesting the Government be
required to choose under which felony offense it was prosecuting.
The Government responded it intended to offer evidence that, with
regard to the proceeds, Lineberry violated felony prostitution law
of the State of Texas — the offense of aggravated promotion of
prostitution, in violation of Texas Penal Code Annotated § 43.04.
The motion was denied a second time; it was denied a third time
prior to the jury’s being charged.
After trial, the court, by written order on 18 October,
explained the indictment sufficiently alleged all elements of 18
U.S.C. § 1956(a)(1)(A)(i): “While a better Indictment would have
specifically cited Texas Penal Code Section 43.04, aggravated
promotion of prostitution, the specific citation is not
constitutionally required”. United States v. Lineberry, No.
4:04CR25, order at 3 (E.D. Tex. 18 Oct. 2004).
A constructive amendment “occurs when the jury is permitted to
convict the defendant upon a factual basis that effectively
modified an essential element of the offense charged”. United
States v. Chambers, 408 F.3d 237, 241 (5th Cir. 2005) (emphasis in
original; internal citation omitted). Lineberry was charged with
money laundering, in violation of 18 U.S.C. § 1956(a)(1)(A)(i),
which states:
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Whoever, knowing that the property involved in
a financial transaction represents the
proceeds of some form of unlawful activity,
conducts or attempts to conduct such a
financial transaction which in fact involves
the proceeds of specified unlawful activity
... with the intent to promote the carrying on
of specified unlawful activity ... shall be
sentenced to a fine of not more than $500,000
or twice the value of the property involved in
the transaction, whichever is greater, or
imprisonment for not more than twenty years,
or both.
18 U.S.C. § 1956(a)(1)(A)(i) (emphasis added). Section 1956(c)(1)
defines “‘knowing that the property involved in a financial
transaction represents the proceeds of some form of unlawful
activity’” as knowing “the property ... represented proceeds from
some form, though not necessarily which form, of activity that
constitutes a felony under State, Federal, or foreign law ....”
Id. § 1956(c)(1) (emphasis added).
Lineberry’s indictment identified “prostitution in violation
of the laws of the State of Texas” as the activity through which he
knew he received his proceeds for money laundering. Under Texas
law, however, prostitution is a misdemeanor, not a felony, offense.
TEX. PENAL CODE ANN. § 43.02. Therefore, at issue is whether his
indictment sufficiently put him on notice both to prepare his
defense and for double-jeopardy purposes. See United States v.
Webb, 747 F.2d 278, 284 (5th Cir. 1984) (“To be sufficient, an
indictment needs only to allege each essential element of the
offense charged so as to enable the accused to prepare his defense
8
and to allow the accused to invoke the double jeopardy clause in
any subsequent proceeding.”), cert. denied, 469 U.S. 1226 (1985).
In determining whether Lineberry’s indictment was sufficient,
we consider not “whether [it] could have been framed in a more
satisfactory manner, but whether it conforms to minimal
constitutional standards”. Id. Furthermore, this inquiry is
“governed by practical and not technical considerations”. Id.As a practical matter, Lineberry was sufficiently put on
notice that the felony of aggravated promotion of prostitution was
the underlying offense for his money-laundering charge. Pursuant
to 18 U.S.C. § 1956(a)(1)(A)(i) and (c)(1)’s requirements, he knew
a felonious unlawful activity had to be the basis of his unlawful
money laundering proceeds. Although the indictment referenced
prostitution in a generic fashion, Texas has only two types of
felony prostitution: (1) aggravated promotion of prostitution; and
(2) compelling prostitution. The latter occurs when a person
“knowingly ... causes another by force, threat, or fraud to commit
prostitution; or ... causes by any means a person younger than 17
years to commit prostitution”. TEX. PENAL CODE ANN. § 43.05.
Lineberry’s indictment did not contain any allegations even
remotely suggesting compelling prostitution by either of these
means.
On the other hand, as stated above, aggravated promotion of
prostitution occurs when a person “knowingly owns, invests in,
9
finances, controls, supervises, or manages a prostitution
enterprise that uses two or more prostitutes”. TEX. PENAL CODE ANN.
§ 43.04(a) (emphasis added). Although the indictment did not
contain specific facts of the offense, its language and tenor, at
the very least, indicated aggravated promotion serving as the
underlying felony of which he had knowledge.
United States v. Doucet, 994 F.2d 169 (5th Cir. 1993), relied
on by Lineberry to demonstrate that a change in the prosecution’s
theory is a constructive amendment of the indictment, is easily
distinguishable. There, the Government changed its theory of the
case between its opening statement and closing argument and, on the
last day of trial, gave the court supplemental jury instructions
reflecting this change. Id. at 171. Accordingly, this court held
the indictment had been constructively amended because there was a
blatant change from the original indictment that “seriously
undercut the defense ... to the original terms of the prosecution”.
Id. at 173.
Here, there was no similar change during trial in the
Government’s case. It stated from the first day of trial that it
was prosecuting the money-laundering charges using aggravated
promotion of prostitution as the underlying felony. Furthermore,
Federal Rule of Criminal Procedure 7(c)(3) provides: “Unless the
defendant was misled and thereby prejudiced ... a [specific
statutory] citation’s omission is [not] a ground to dismiss the
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indictment or information or to reverse a conviction”. FED. R.
CRIM. P. 7(c)(3); see United States v. Threadgill, 172 F.3d 357, 373
(5th Cir.), cert. denied, 528 U.S. 871 (1999). Accordingly,
Lineberry’s indictment was sufficient to put him on notice of the
charges against him and was “sufficiently specific for double
jeopardy purposes”. Webb, 747 F.2d at 284.
B.
Maintaining the evidence was insufficient to prove he
promoted aggravated prostitution, Lineberry claims his JOA and new-
trial motions should have been granted for his money-laundering
convictions. Similarly, for the former, he claims the evidence was
insufficient to prove the underlying statement for his false-
declaration conviction was material or made knowingly.
As noted, Lineberry moved for JOA at the close of the
Government’s evidence but failed to do so at the close of all the
evidence. Accordingly, concerning whether JOA should have been
granted, we review only to determine whether affirming his
conviction would result in a manifest miscarriage of justice.
United States v. McIntosh, 280 F.3d 479, 483 (5th Cir. 2002) (“[A
manifest miscarriage of justice occurs] only where the record is
devoid of evidence pointing to guilt or contains evidence on a key
element of the offense [that is] so tenuous that a conviction would
be shocking”.) (second alteration in original; internal quotation
omitted). We view the evidence in the light most favorable to the
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Government, deferring to the jury’s credibility determinations.
See id.We review for abuse of discretion the denial of a new-trial
motion based on insufficiency of the evidence. Burton v. United
States, 237 F.3d 490, 496-97 (5th Cir. 2000).
1.
At trial, Lineberry insisted his business was a legal escort
service. On appeal, he claims the evidence was insufficient to
prove he committed promotion of aggravated prostitution, which, as
explained supra, was the underlying offense for his money-
laundering convictions.
The Government was not required to prove a violation of the
underlying state-felony statute beyond a reasonable doubt; rather,
it needed only offer proof of its existence. See United States v.
Conway, 507 F.2d 1047, 1051 (5th Cir. 1975). Lineberry conceded at
least twice at trial that the Government did not have to prove the
actual act of prostitution took place, but rather that the proceeds
at issue were from an unlawful activity.
a.
The evidence, viewed in the light most favorable to the
Government, was that Lineberry used credit-card systems to collect
prostitution fees and used financial institutions to distribute
those proceeds. Accordingly, Lineberry has not shown a manifest
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miscarriage of justice. See United States v. Green, 293 F.3d 886,
895 (5th Cir.), cert. denied, 537 U.S. 965 (2002).
b.
In considering whether the court abused its discretion by
denying Lineberry’s new-trial motion, we are mindful that “[s]uch
motions are not favored and are viewed with great caution”. United
States v. Blackthorne, 378 F.3d 449, 452 (5th Cir. 2004). Because
there was evidence to support the jury’s verdict, and because the
Government was not required to prove aggravated promotion of
prostitution beyond a reasonable doubt, the district court did not
abuse its discretion in denying a new trial.
2.
Regarding his insufficiency-of-the-evidence claim for his
false-declaration conviction, Lineberry was convicted under 18
U.S.C. § 1623(a). It provides: “Whoever under oath [before a
court] ... knowingly makes any false material declaration ... shall
be fined under this title or imprisoned ....” 18 U.S.C. § 1623(a)
(emphasis added). As noted, he claims the evidence fails for both
the knowingly and materiality elements.
a.
A statement is material when it “has a natural tendency to
influence, or [is] capable of influencing, the decision of the
decisionmaking body to which it [is] addressed”. Kungys v. United
States, 485 U.S. 759, 770 (1988) (internal quotation omitted).
13
Materiality is a question of law “to be decided by the court”, not
the jury. See, e.g., United States v. Damato, 554 F.2d 1371, 1373
(5th Cir. 1977) (“The trial court should embody its finding on
materiality in an instruction to the jury.”).
The court did not instruct the jury that, as a matter of law,
Lineberry’s statement was material; instead, it defined “material”
and explained it was an essential element for a false-declaration
conviction. See Barnes v. United States, 378 F.2d 646, 650-51 (5th
Cir. 1967) (holding defendant was not prejudiced where jury was not
instructed testimony was material as a matter of law, but was
instead instructed it must find the testimony material to sustain
a conviction), cert. denied, 390 U.S. 972 (1968); Blackmon v.
United States, 108 F.2d 572, 574 (5th Cir. 1940) (holding, although
jury should have been directly charged that testimony was material,
the evidence amply supported the jury’s verdict and there was “[n]o
error affecting [appellant’s] substantial rights”). In any event,
there was evidence of materiality.
b.
To convict under 18 U.S.C. § 1623, the Government had to
prove, inter alia, that Lineberry knew the statement was false when
he made it. There was evidence the statement was made knowing it
was false.
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In sum, Lineberry has failed to demonstrate the requisite
manifest miscarriage of justice. His sufficiency-of-the-evidence
challenge to his false-declaration conviction fails.
C.
Lineberry contends the district court improperly charged the
jury on the elements of money laundering specifically related to
his intent to promote the carrying on of the specified unlawful
activity. It instructed the jury must find Lineberry “intended to
promote the carrying on of the specified unlawful activity”, but,
despite Lineberry’s request, did not define “intended” or
“intentionally”.
Review is for abuse of discretion. United States v. Garcia-
Lopez, 234 F.3d 217, 219 (5th Cir. 2000), cert. denied, 532 U.S.
935 (2001). Lineberry must show his request: “(1) was a correct
statement of the law, (2) was not substantially covered in the
charge as a whole, and (3) concerned an important point in the
trial such that the failure to instruct the jury on the issue
seriously impaired [his] ability to present a given defense”.
United States v. Smithson, 49 F.3d 138, 142 (5th Cir. 1995).
The court did not define “intentionally”, but, at the
Government’s request, it defined “intended to promote” to include
reinvesting proceeds in the illegal enterprise and paying salaries
and expenses. Furthermore, the instructions conformed with the
Fifth Circuit Pattern Jury Instructions regarding § 1956, which do
15
not require a definition of “intentionally” as it relates to proof
that Lineberry intended to promote the carrying on of a specified
unlawful activity. See Fifth Circuit Pattern Jury Instructions:
Criminal § 2.76.
Lineberry has not shown the instructions as a whole failed to
correctly reflect the law or that the failure to define
“intentionally” impaired his defense. Rather, the jury’s finding
he “intended to promote” the specified unlawful activity was
consistent with evidence that he used credit cards to collect the
proceeds of prostitution and pay overhead expenses of the business,
and that he made or caused another to make bank wires or write
personal checks to pay salaries to prostitutes.
D.
Finally, Lineberry maintains the district court improperly
used a number of criminal history points based on prior convictions
in calculating his guideline sentencing range. The points were
imposed for three offenses for which the presentence investigation
report stated the details were unavailable.
1.
Almendarez-Torres v. United States, 523 U.S. 224, 235 (1998),
forecloses Lineberry’s claim that the court erred when increasing
his sentence based upon the facts of prior convictions neither
charged and proven beyond a reasonable doubt nor admitted by him.
Lineberry contends that case has been abrogated and that a majority
16
of the Supreme Court would overrule it in the light of Apprendi v.
New Jersey, 530 U.S. 466 (2000), as recognized in Shepard v. United
States, 125 S. Ct. 1254, 1263-64 (2005) (Thomas, J., concurring in
part and concurring in the judgment). Our court has repeatedly
rejected such contentions on the basis that Almendarez-Torres
remains binding. See, e.g., United States v. Garza-Lopez, 410 F.3d
268, 276 (5th Cir.), cert. denied, 126 S. Ct. 298 (2005).
2.
Lineberry next contends the district court relied on hearsay
and other information outside of the category of permissible proof
in finding the fact of his prior convictions. See Shepard, 125 S.
Ct. at 1263 (limiting inquiry of whether a guilty plea to a crime,
defined by a nongeneric statute, equates admission of the generic
offense elements “to the terms of the charging document, the terms
of the plea agreement or transcript of colloquy between judge and
defendant”); United States v. Gutierrez-Ramirez, 405 F.3d 352, 359
(5th Cir.) (limiting determination of whether convicted offense was
a “drug trafficking offense” under Sentencing Guidelines to same
documents) (internal quotation omitted), cert. denied, 126 S. Ct.
217 (2005). As the Government correctly notes, those cases are
distinguishable from this one, in which the district court was not
required to make any comparable factual determinations concerning
Lineberry’s prior convictions. Instead, the only factual
17
determination required was that the convictions took place and that
Lineberry received the required sentences.
III.
For the foregoing reasons, Lineberry’s conviction and sentence
are
AFFIRMED.
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