Opinion
Case No. 3:11-cr-183-1
02-04-2013
UNITED STATES OF AMERICA, v. PAUL DAVID MUSGRAVE, Defendant.
Judge Timothy S. Black
ORDER DENYING MOTION FOR ACQUITTAL
At the close of the Government's case-in-chief, Defendant Paul David Musgrave moved, pursuant to Fed. R. Crim. P. 29(a), for a judgment of acquittal. Rule 29(a) states:
After the government closes its evidence or after the close of all the evidence, the court on the defendant's motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction. The court may on its own consider whether the evidence is insufficient to sustain a conviction.In determining a Rule 29(a) motion, courts review "the record in the light most favorable to the prosecution, [and] should grant relief only if it is found that upon the record evidence adduced at trial, no rational trier of fact could have found proof of guilt beyond a reasonable doubt." United States v. General Elec. Co., 869 F.Supp. 1285 (S.D. Ohio 1994) (citing United States v. Abner, 35 F.3d 251, 253 (6th Cir.1994); Jackson v. Virginia, 443 U.S. 307 (1979)); see also United States v. Clay, 667 F.3d 689 (6th 2012).
In reviewing the evidence on a motion for judgment of acquittal, the court cannot "make credibility determinations, and may not weigh the evidence." Id. (citing United States v. Davis, 981 F.2d 906, 908 (6th Cir.1992)). To prevail on such a motions, a defendant must do more than simply show that "there is some evidence in the record to support a finding of not guilty; rather, to prevail on a Rule 29 motion, the defendant must demonstrate that, when the evidence is viewed in the light most favorable to the government, no rational trier of fact could find the defendant guilty beyond a reasonable doubt." Id.
COUNT 5
Defendant first contends that he must be acquitted on Count 5 of the indictment. That Count alleges that, on or about February 6, 2009, the defendant caused Mutual Federal Savings Bank in Troy, Ohio to transmit an electronic datafax letter to the Small Business Administration in Kentucky containing a copy of Dayton International Tire Recycling's ("DITR") revised loan application, a collateral analysis of DITR and an Small Business Administration ("SBA") Form 912, Statement of Personal History. Neither party disputes, based on the evidence presented in the government's case-in-chief, that the subject datafax was actually transmitted on February 9, 2009.
Defendant first contends that he must be acquitted on this Count because of the date discrepancy. The Court finds no merit to Defendant's argument to this extent. "The government is not required to prove the exact date of an offense if, as was the case here, the indictment includes the language 'on or about' and the date proved at trial is 'reasonably near' the date alleged in the indictment." United States v. Swafford, 512 F.3d 833, 844 n6 (6th Cir. 2008) (citing United States v. Ford, 872 F.2d 1231, 1236 (6th Cir.1989)). Here, the dates are "reasonably near," i.e., a mere three days apart. Accordingly, the Court denies Defendant's Motion in this regard.
Next, Defendant argues that, because the proof at trial demonstrates that the conduct alleged in Count 5 occurred on February 9, 2009, the Count must merge with Count 5 with Count 7 because the conduct alleged in both counts occurred on the same date, i.e., February 9, 2009. However, "[t]he yardstick in determining whether there is duplicity or multiplicity is whether one offense or separate offenses are charged and . . . this is a difficult and subtle question." United States v. Davis, 306 F.3d 398, 415-16 (6th Cir. 2002) (citing 2 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 142, at 17 (3d ed.1999). Generally, "offenses are separate if each requires proof of an additional fact that the other does not." Id. (citation omitted).
Contrary to Defendant's contention, the mere fact that separate wire fraud counts occurred on the same date does not render the counts multiplicitous. The Sixth Circuit has held "that each use of the wires constitutes a separate crime under section 1343." United States v. Williams, 875 F.2d 868, 1989 WL 59274 (6th Cir. Jun 6, 1989); see also United States v. Garlick, 240 F.3d 789 (9th Cir. 2001) (stating that "[e]ach time [the defendant] used the wires, or caused them to be used, in furtherance of his scheme, he committed a new violation of the wire fraud statute"). Accordingly, the Court finds no merit to Defendant's multiplicity argument and denies his Motion for Judgment of Acquittal on Count 5.
Defendant contends that, because the Government earlier conceded that counts occurring on the same day should be merged into a single count, counts 5 and 7 should be merged on the basis of the law-of-the-case. The law-of-the-case doctrine provides that "a decision on an issue made by a court at one stage of a case should be given effect in successive stages of the same litigation." United States v. Cunningham, 679 F.3d 355, 376-77 (6th Cir. 2012) (citing United States v. Todd, 920 F.2d 399, 403 (6th Cir. 1990)). "'This doctrine applies with equal vigor to the decisions of a coordinate court in the same case and to a court's own decisions,' and 'can be applied to rulings made in a case that ends in a mistrial.'" Id. at 377. Even assuming the doctrine applied to a court order issued on the government's election to merge a number of counts in an indictment, the doctrine "is a discretionary tool that courts use to promote efficiency." Id. The Court concludes that the law-of-the-case doctrine does not apply in this instance, and if it did, merging counts has little impact on efficiency.
COUNT 14
Next, Defendant argues that he must be acquitted on Count 14 of the indictment. In Count 14, the government alleges that Defendant falsely and fraudulently annotated and represented to Mutual Federal Savings Bank ("MFSB") and the SBA on a business loan application and other supporting documents the fact that the defendant provided cash injections of $230,000 from personal savings, $63,000 from his home equity and $50,000 from a home equity line of credit as part of a contemplated purchase sale contract of tire recycling equipment and machinery.
The basis of Defendant's argument on this count is that there is no evidence that he made this statement to anyone. The only written evidence of this statement is a memorandum sent to the SBA by Gary Enz of Mutual Federal, wherein Enz represents the these sources of Defendant's cash injection. Defendant argues that there is no evidence that Defendant made such a statement to Gary Enz.
Contrary to Defendant's contention, however, Gary Enz testified that Defendant gave him the information he relayed in correspondence to the SBA. Although Enz's testimony was not absolute, he clearly testified that Defendant was the only source of information for the SBA application process on behalf of DITR.
COUNT 15
Defendant also moves for acquittal on Count 15. In Count 15, the government alleges that Defendant falsely and fraudulently annotated and represented to Mutual Federal and the SBA on a business loan application and other supporting documents the fact that ITBVI provided a cash injection of $369,569 on November 28, 2008 to Rubber Solutions as part of the contemplated purchase sale contract of tire recycling equipment and machinery.
On this Count, Defendant argues that the Government failed to prove that Defendant "knew" that ITBVI's cash injection was really Rubber Solutions reducing the overall price of the tire shredding equipment. Raymond Goldberg, however, owner of both Rubber Solutions and ITBVI, testified that he always stated that his cost injection would come only as the form of a cost reduction on the equipment by Rubber Solutions. Defendant acknowledges Goldberg's testimony in this regard, but argues that no rational fact finder would believe Goldberg even viewing his testimony in a light most favorable to the Government.
"[D]etermining the credibility of witnesses is a task for the jury, not this court." United States v. Beverly, 369 F.3d 516, 532 (6th Cir. 2004) (citing United States v. Hilliard, 11 F.3d 618, 620 (6th Cir.1993)); see also United States. v. Simpkins, 240 Fed. Appx. 334, 339 (11th Cir. 2007) (stating that "[c]redibility determinations are the sole province of the jury"). "For testimony of a government witness to be incredible as a matter of law, it must be unbelievable on its face." Simpkins, 240 Fed. Appx. at 340 (citing United States v. Calderon, 127 F.3d 1314, 1325 (11th Cir.1997).
Incredible testimony generally includes "testimony as to facts that the witness physically could not have possibly observed or events that could not have occurred under the laws of nature." Id. (citations omitted); see also United States. v. Grandinetti, 891 F.2d 1302, 1307 (7th Cir. 1989). Judgment of acquittal is not appropriate simply "because the government's case includes testimony by 'an array of scoundrels, liars, and brigands.'" Id. (citing United States v. Hewitt, 663 F.2d 1381, 1385 (11th Cir. 1981)); see also Grandinetti, 891 F.2d at 1307.
While the jury could find Goldberg's testimony not credible, Goldberg's testimony is not incredible as a matter of law. Goldberg testified that Defendant always knew ITBVI's cash injection was really a cost reduction. The jury is free to believe or disbelieve such testimony. Accordingly, Defendant's Motion for Acquittal must be denied in this regard.
COUNT 1
Next, Defendant moves for acquittal on the conspiracy count on the basis that the government failed to prove an agreement. "To establish conspiracy, the government must prove an agreement between two or more persons to act together in committing an offense, and an overt act in furtherance of the conspiracy." United States v. Milligan, 17 F.3d 177, 182 (6th Cir. 1994) (citing United States v. Butler, 618 F.2d 411, 414 (6th Cir.) cert. denied, 447 U.S. 927 (1980)).
The government, however, need not demonstrate "a formal agreement . . . because acts done with a common purpose can establish an implicit agreement." Id. at 182-83 (citations omitted). In fact, "[a] tacit or mutual understanding among conspirators is sufficient to show conspiratorial agreement, and conspiracy may be inferred from relevant and competent circumstantial evidence, such as acts of the conspirators themselves." Id. at 183 (citations omitted).
Here, the evidence is sufficient for reasonable jurors to find, at the least, a mutual understanding between Defendant and Goldberg to engage in wire fraud, bank fraud and making false statements on a loan application. For instance, Goldberg specifically testified about a tacit understanding to falsify invoices showing payment by ITBVI to Rubber Solutions, as well as an understanding to falsify packing lists. Accordingly, Defendant's Motion on the conspiracy charge is denied.
WIRE FRAUD AND BANK FRAUD COUNTS
Finally, Defendant moves for acquittal on the wire fraud counts and the bank fraud count. The crime of wire fraud, set forth in 18 U.S.C. § 1343, "consists of three elements, each of which must be proven beyond a reasonable doubt: (1) 'that the defendant devised or willfully participated in a scheme to defraud'; (2) 'that he used or caused to be used an interstate wire communication in furtherance of the scheme'; and (3) 'that he intended to deprive a victim of money or property.'" United States v. Cunningham, 679 F.3d 355, 370 (6th Cir. 2012) (citation omitted). Similarly, bank fraud, which is set forth in 18 U.S.C. § 1344, requires proof of three elements: "(1) that the defendant knowingly executed or attempted to execute a scheme to defraud a financial institution; (2) that the defendant did so with the intent to defraud; and (3) that the financial institution was insured by the FDIC." United States v. Parkes, 668 F.3d 295, 301 (6th Cir. 2012) (citation omitted).
Defendant argues that he must be acquitted on these counts because the evidence does not demonstrate any misrepresented or concealed fact. The Court has already addressed the purported misrepresentations concerning the source of Defendant's cash injection and the nature of ITBVI's cash injection. Finding evidence in the record upon which the jury could find at least two misrepresentations, Defendant's Motion for Judgment of Acquittal must be denied.
In the alternative, Defendant argues that the jury must be instructed that certain facts were not misrepresented or concealed. First, Defendant argues that no reasonable jury could conclude that he concealed Goldberg's interest in ITBVI. Defendant points to the undisputed fact that he disclosed Goldberg's interest in ITBVI when he gave Gary Enz a copy of the DITR Operating Agreement. Gary Enz testified that, although Defendant ultimately gave Enz a copy of the Operating Agreement, such disclosure did not occur until the parties were at the closing table, a time when there may have been a likelihood that such fact would be overlooked.
Defendant also argues that no reasonable jury could conclude that he concealed ITBVI by not providing a financial statement of ITBVI when requested by the SBA. This issue combines with Defendant's purported failure to disclose the Operating Agreement until just before closing to support the Government's contention that Defendant acted to conceal Goldberg's interest in ITBVI. Certainly the jury can consider this issue in determining whether Defendant engaged in a scheme to defraud, i.e., conceal Goldberg's interests in both Rubber Solutions and ITBVI.
Defendant also argues that no reasonable jury could conclude that his answers to questions twelve and thirteen on the SBA loan 7(a) loan application were false. With regard to question twelve, whether or not Defendant truthfully answered question twelve turns on whether or not Defendant knew ITBVI was merely a shell company for Goldberg. The jury could reasonably conclude, based on Goldberg's testimony and emails authored by Defendant, that Defendant knew ITBVI was a mere alter ego of Goldberg.
Question thirteen is much more of a broad question in that it essentially asks whether someone involved in DITR has any financial interest in a company with which DITR did business. Certainly facts presented at trial shows that Goldberg had a financial interest in DITR, through ITBVI, and that he also had financial interest in Rubber Solutions, a business with which DITR did business. In fact, Defendant previously answered "yes" to this same question on a previous loan application. A reasonable jury could conclude that Defendant did not truthfully answer questions on the SBA 7(a) loan application.
Finally, with regard to the issue of whether Defendant knew the tire shredder was coming from Oregon as opposed to Australia, reasonable jurors could conclude, based on the evidence presented in the Government's case, that Defendant knew the shredder was not coming from Australia.
Accordingly, reasonable jurors could conclude that all of the aforementioned facts were misrepresented or concealed by Defendant. As a result, the Court denies the instruction requested by Defendant.
CONCLUSION
Based on all of the foregoing, Defendant's Motion for Judgment of Acquittal is DENIED as to all counts.
IT IS SO ORDERED.
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Timothy S. Black
United States District Judge