UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________
No. 95-10550
____________________
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
ALLAN GLEN VON HOFF,
also known as Allan Christian,
JIMMIE LEE BATES, JOHN WILLIAM HOELZER,
LEWIS HUDSON POWELL, III,
Defendants - Appellants.
__________________________________________
Appeal from the United States District Court
for the Northern District of Texas
( 4:94-CR-098-A )
__________________________________________
August 19, 1996
Before POLITZ, Chief Judge, JOLLY and BARKSDALE, Circuit Judges.
PER CURIAM:*
At issue are convictions and sentences arising out of a
fraudulent telemarketing scheme. Von Hoff, Bates, Hoelzer, and
Powell raise numerous due process, evidentiary and other claims.
We AFFIRM.
I.
*
Pursuant to Local Rule 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that this opinion should not be published and is not precedent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 Local Rule
47.5.4.
In early 1995, appellants were found guilty on several counts
of various fraud offenses for their parts in the telemarketing
scheme of GTP, Inc. Each appellant had a role in GTP: Powell as an
office manager; Bates as a telemarketer and later a sales manager;
Hoelzer and Von Hoff as telemarketers.
The scheme began in early 1988 and continued until GTP was
raided by law enforcement two years later. The raid was the
culmination of an investigation by Postal Inspectors and Internal
Revenue Agents, during which agents examined documents in GTP’s
trash and made calls to GTP posing as customers.
It is undisputed that GTP was a fraudulent scheme. To sell
water purifiers, and later, home security systems, GTP sent
postcards to victims throughout the United States telling the
recipient that they were “absolutely guaranteed” to receive one of
five “fabulous awards. No purchase necessary”. The awards listed
on the card included a new Chevrolet Blazer and a $5,000 cashier’s
check, and the card further instructed the recipient to call to
learn how to receive more of the listed prizes.
Approximately 20-30 GTP telephone operators, housed in a
“boiler room”, received calls prompted by the cards and told
victims that they would be eligible to receive more prizes if they
elected to purchase a product from GTP. GTP provided its sales
staff with scripts to guide the sales pitch. The scripts contained
false and misleading statements, and telemarketers also embellished
the pitch with further misrepresentations. After the sale was
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initially made by the telemarketer, a sales manager would “button
up” the sale by verifying certain information.
GTP never awarded a Blazer or a $5,000 cashier’s check, but
instead awarded only watches and retail merchandise checks valued
at substantially less than touted by GTP. And, the products sold
were grossly overpriced.
In October 1994, Powell, Bates, Von Hoff, and several others
were indicted on various fraud charges arising out of their
activities with GTP. That December, a superseding indictment added
charges against Hoelzer. Several of those charged entered into
plea agreements; appellants proceeded to trial and were convicted
on several counts in February 1995.
II.
The numerous issues at hand cover the board. None have merit.
A.
Convicted of conspiracy to commit wire fraud, in violation of
18 U.S.C. § 371, and wire fraud, in violation 18 U.S.C. § 1343,
Bates and Hoelzer challenge the sufficiency of the evidence.
Although it is undisputed that GTP was a fraudulent scheme, each
asserts that, for them, the evidence failed to demonstrate the
requisite knowledge and intent.
1.
For starters, the standard of review is in dispute. Bates and
Hoelzer moved for acquittal at the close of the Government’s case-
in-chief, but did not do so at the close of all the evidence. Only
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Von Hoff did. As a result, the Government advances the more
onerous “manifest miscarriage of justice” standard.
a.
“Where a defendant fails to renew his motion at the close of
all the evidence, after defense evidence has been presented, he
waives his objection to the earlier denial of his motion.” United
States v. Daniel, 957 F.2d 162, 164 (5th Cir. 1992). Therefore,
our review narrows greatly to the manifest miscarriage standard.
Id. For reversal, the record must be “devoid of evidence pointing
to guilt.” United States v. Robles-Pantoja, 887 F.2d 1250, 1254
(5th Cir. 1989). Bates and Hoelzer fall far short of clearing this
hurdle.
b.
Alternatively, had the acquittal motions been renewed,
reversal would be in order only if, viewing the evidence in the
light most favorable to the verdict, a rational trier of fact could
not have found the essential elements of the offenses charged
beyond a reasonable doubt. E.g., United States v. Zuniga, 18 F.3d
1254, 1260 (5th Cir.), cert. denied, __ U.S.__, 115 S. Ct. 214
(1994). See also, United States v. Aggarwal, 17 F.3d 737, 740 (5th
Cir. 1994) (reasonable jury can find intent based on circumstantial
evidence and need not exclude every hypothesis of innocence). Even
under this standard, the evidence was more than sufficient.
2.
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The record included, inter alia, witness (customer caller)
testimony combined with documentary evidence linking those callers
to the defendants. The witnesses testified regarding the
representations made by the persons who took their calls, and the
documentary evidence consisted of call logs and “button-up” forms,
which were created and signed by defendants and referred to the
callers by both name and credit card numbers.
a.
Numerous witnesses testified that Bates performed the “button
up” on their calls. Each was linked to Bates through documentary
evidence.
Customer Mellenbruch testified that, although he explained to
Bates that he did not wish to purchase anything, his credit card
was charged. He testified that Bates assured him that he would
only be charged for the shipping of his award, which he never
received.
Customer Brady testified that, upon recognizing that the
operation was probably fraudulent, he informed the salesman that he
did not want either the product or the Blazer. When transferred to
Bates, he told her that he did not want to purchase anything, did
not want a Blazer, and did not want his credit card charged. Bates
responded that she could not stop delivery of the Blazer. Brady’s
credit card was charged and, needless to say, he did not receive a
Blazer.
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Customer Faulkner testified that Bates assured him that he
could receive cash rather than the $5,500 worth of prizes that he
was guaranteed.
Customer Whitby testified that Bates elicited his credit card
number under the pretext that it was necessary to confirm that he
was a valid credit card holder and thus qualified to participate.
Although he told Bates that he did not want to purchase the
security system, his card was charged.
b.
The evidence against Hoelzer combined customer testimony
describing his sales pitch with documentary evidence -- GTP sales
logs and Hoelzer’s handwritten call records -- that tied the
particular customer to him.
Customer Bennett testified that Hoelzer told him that his was
the winning card, placed Bennett on hold while he purported to
confirm the number from the card in the computer (no telemarketer
had access to any computer), told Bennett he had won a Blazer and
asked what color he would prefer, and promised delivery in six to
eight weeks. Bennett testified that he believed that he would
receive the Blazer if he ordered the security system and therefore
agreed to do so in reliance on Hoelzer’s misrepresentations that he
had won the Blazer.
Customer Watkins testified that Hoelzer told her he needed her
credit card number only to process her awards; that she told him
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she did not want to purchase anything; and that, nevertheless, her
card was charged, but she never received anything.
Customer Wilcox testified that Hoelzer told him that his card
would not be charged for 30 days after receiving the system and
that only when Wilcox called back to confirm the purchase would his
account be charged. This was despite the fact that GTP’s
salespeople had been told that credit cards would be charged prior
to shipment. Wilcox was charged immediately, but never received
the system.
Customer Golden testified that Hoelzer made a similar
misrepresentation to her when he told her that she could use her
purifier for ten days before being charged; however her card was
charged before she received the product. She returned the water
purifier but her account was never credited.
Customer Brendon testified that he was victimized by the same
tactic when Hoelzer assured him of a 60-day free trial period for
his security system. Although Brendon never received the system,
his card was charged.
B.
The appellants assert, based on numerous examples, that their
due process rights were violated because, in sum, the trial court
abandoned its neutral role and became an advocate for the
Government. They point to the court’s limiting opening statements;
eliciting testimony favorable to the Government by questioning
witnesses; asking questions to establish admissibility of
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Government evidence; terminating cross-examination examination of
certain witnesses; inhibiting defense testimony; engaging in
hostile cross-examination of defendants; conveying to the jury
disbelief in defendants’ testimony (all of the appellants except
Von Hoff testified); rebuking defense counsel in absence of
objection by the Government; providing the jury with the indictment
but not the written jury charge; and limiting closing argument to
eight minutes per defendant and then interrupting it. They claim
that these points individually and cumulatively compel reversible
error.
To violate due process, the judge’s conduct must be so
prejudicial as to deny a fair trial. United States v. Bermea, 30
F.3d 1539, 1569, __ U.S. __, 115 S. Ct. 1113 (1995). But, the
trial transcript reveals little that might be construed as an at-
trial claim of due process violation.
No objection was made urging that a ruling or other action by
the court was violative of due process. In fact, quite often, no
objection of any sort was made. For example, there was no
objection regarding the limitations on opening statements or
closing arguments. Therefore, we review such issues only for plain
error, in accordance with the long-established rule that error must
be preserved at trial. E.g., United States v. Calverley, 37 F.3d
160 (5th Cir. 1994), cert. denied, __ U.S. __, 115 S. Ct. 1266
(1995). As to the issues which were preserved by contemporaneous
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objections, we review, of course, only for abuse of discretion.
E.g., United States v. Clemonts, 73 F.3d 1330, 1334 (5th Cir.
1996). We do not find reversible error under either standard.
On two occasions, the court advised the jury that it was not
to be swayed, by any of the court’s questions or statements, from
its role as fact finder. Moreover, none of the asserted instances
of overreaching by the judge fall beyond his proper role of
maintaining control over the trial and seeking to move it along in
a reasonably timely fashion. While we do not dispute that “the
district judge actively managed” the trial, “we conclude that ...
[his] actions ... were within his broad discretion to manage the
pace and objectivity of the trial.” United States v. Mizell, __
F.3d __, slip op. 95-10593, p. 4444 (5th Cir. July 1, 1996).
Concerning the written charge, unlike the indictment, not
being taken into the jury room, none of the defendants either
requested it or objected when the court confirmed that it did not
permit it in the jury room. Once again, we review only for plain
error; there is none.
Allowing the jury to have a copy of the charge during its
deliberations is problematic, because “[w]hile not error in itself,
the practice is conducive to dissection of the charge by the jury
and overemphasis of isolated parts rather than consideration of the
charge as a whole.” United States v. Schilleci, 545 F.2d 519, 526
(5th Cir. 1977). As to the indictment, the trial judge stated at
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the beginning and end of trial that it was not evidence and
instructed the jury not to consider it as proof of any fact. It is
well-settled that “juries are presumed to follow their
instructions.” Zafiro v. United States, __ U.S.__, 113 S. Ct. 933,
939 (1993).
C.
Linked in part to the due process contention are challenges to
evidentiary rulings. There was no abuse of discretion.
1.
Von Hoff’s attempt to question prosecution witness Field
regarding the general operation of GTP’s business was beyond the
scope of her direct testimony, which concerned Powell’s familiarity
with GTP operations. Von Hoff does not assert that his questioning
would have elicited information from which the jury might have
found bias against Von Hoff or reason to doubt Field’s ability to
recount accurately the substance of her testimony, but rather that
he hoped to establish by description of GTP’s organization that
only top management were responsible for the fraud. This attempt
to use cross-examination for development of defense evidence
violated the trial court’s limitation of it, consistent with F ED.
R. EVID. 611(b), to impeachment and matters within the scope of
direct.
2.
Next, Von Hoff challenges three Government exhibits.
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a.
Exhibits 193 and 196 purportedly contain “hearsay within
hearsay”. They are computer printouts of summaries entered by GTP
employees of telephone conversations with potential customers, and
were admitted pursuant to the hearsay business records exception.
FED R. EVID. 803(6). Testimony elicited by Von Hoff, that the
information in the documents was recorded contemporaneously with
its receipt from a customer, established its admissibility.
b.
Exhibit 143, a complaint letter from a customer was properly
admitted on the basis that it was not offered for the truth of the
matter stated but instead to establish Von Hoff’s awareness of the
complaint.
In the alternative, any error concerning these three exhibits
was harmless. See FED. R. EVID. 103.
D.
For the jury instructions challenged on appeal, it is most
doubtful whether each defendant properly preserved the issue. But,
in light of the trial court’s considering an objection by one
defendant to inure to the benefit of all, and the fact that we
reach the same conclusion regardless of whether plain error or
abuse of discretion frames the standard of review, we need not
address the point. Reviewing under the more lenient abuse of
discretion standard, we find none.
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1.
Failure to give “an instruction constitutes reversible error
only ... [if] (1) the requested instruction is substantially
correct; (2) the actual charge ... did not substantially cover the
content of the proposed instruction; and (3) the omission of the
instruction would seriously impair the defendant’s ability to
present his defense.” E.g., United States v. Storm, 36 F.3d 1289,
1294 (5th Cir. 1994), cert. denied, __ U.S. __, 115 S. Ct. 1798
(1995). Concerning the failure to give the requested instruction
on specific intent, and to more fully define “willfully”, the jury
was instructed repeatedly that the defendants had to have intended
to further an unlawful purpose; intended to defraud, deceive,
cheat, bring about a crime, and violate the law.
The jury was instructed further that it was not sufficient
that the defendants acted because of mistake or accident. These
instructions amply informed the jury that any action taken in good
faith or with innocent motive was not criminally actionable; thus,
the instructions did not prevent presenting the defense of good
faith.
2.
For a deliberate ignorance instruction to be warranted, the
evidence must be capable of “rais[ing] two inferences: (1) the
defendant was subjectively aware of a high probability of the
existence of the illegal conduct; and (2) the defendant purposely
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contrived to avoid learning of the illegal conduct.” United States
v. Lara-Velasquez, 919 F.2d 946, 951 (5th Cir. 1990). Along that
line, evidence of affirmative acts designed to avoid knowledge is
not required. United States v. Faulkner, 17 F.3d 745, 766 (5th
Cir.), cert. denied, __ U.S.__, 115 S. Ct. 193 (1994). On the
evidence in this case, there was no abuse of discretion in granting
the instruction. (In the alternative, the instruction would
constitute harmless error at worst.)
Concerning the subjective awareness prong, the following
evidence is illustrative: the sales-pitch scripts were facially
overwhelmingly suspicious; the sales staff saw the watches, which
telemarketers touted as worth $500, but the testimony of an expert,
valuing the watches at not more than $45, and the watches (as well
as their packaging) placed in evidence provided a basis from which
the jurors could have inferred that GTP employees were aware that
the watches’ value was being misrepresented to customers; and sales
staffers were suspiciously denied access to the GTP customer
service areas.
As for the avoid knowledge prong, a defendant’s failure to
inquire when circumstances are overwhelmingly suspicious suggests
conscious effort to avoid incriminating knowledge. United States
v. Daniel, 957 F.2d 162, 169-70 (5th Cir. 1992). No evidence
suggested that any of the defendants made such inquiries.
E.
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Powell asserts that the Government’s closing argument
improperly shifted the burden of proof. In this context, as usual,
if a defendant’s substantial rights were not prejudiced, any error
is deemed harmless. United States v. Morris, 568 F.2d 396, 402
(5th Cir. 1978).
At issue is the reference, in rebuttal, to Powell’s failure to
call any witness from Advantage Marketing (a company involved in
mailing GTP’s postcards, for which Powell tried to collect a debt
owed by GTP) to support his assertion that he held no stake in that
company. Any error regarding this somewhat tangential issue was
cured by the trial court’s sustaining the objection to the remark
and giving a curative instruction, reminding the jury that Powell
had no obligation to present any evidence.
F.
Finally, Bates, Hoelzer, and Von Hoff contest their sentences.
1.
Bates and Hoelzer challenge their perjury enhancements.
Obstruction of justice under Sentencing Guidelines § 3C1.1 is a
factual finding; accordingly, we review only for clear error. 18
U.S.C. § 3742(e); United States v. Storm, 36 F.3d 1289, 1295 (5th
Cir. 1994), cert. denied, __U.S. __, 115 S. Ct. 1798 (1995). Of
course, we review de novo the assertions at hand of constitutional
error.
a.
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The district court found that Bates committed perjury when she
testified that, during her tenure with GTP, she was aware of only
one misrepresentation by a telemarketer to a customer. Obviously,
the testimony was material to the intent element. The court found
the testimony knowingly false and given with intent to persuade the
jury to acquit. This finding was not clearly erroneous; there is
sufficient evidence in the record to conclude that the enhancement
applied. United States v. Franco-Torres, 869 F.2d 797, 800 (5th
Cir. 1989). In any event, Bates relies on two bases in challenging
the enhancement.
First she notes that the testimony was elicited by the court
and urges that the manner in which it questioned her conveyed an
impression that she was not credible, which led to her conviction
and subsequent enhancement. Our research reveals no basis, nor
does Bates cite any, for her contention that testimony elicited by
the court may not be considered perjury and punished just as if it
were elicited by opposing counsel. As noted, the trial court
instructed carefully that the jury was the fact finder, and we
reject Bates’ contention regarding the impression that the judge’s
questioning could have created for the reasons discussed supra.
Likewise, we reject Bates’ second basis: that the enhancement
penalized her for exercising her right to testify. Needless to
say, she does not possess a constitutional right to testify
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falsely. United States v. Dunnigan, 507 U.S. 87, 113A S. Ct. 1111,
1117 (1993).
b.
The court found Hoelzer’s testimony that he did not deviate
from the telemarketing script to be perjurious; specifically, it
found it false in light of other testimony that, in deviation from
the script, Hoelzer had misrepresented the timetable for being
charged for merchandise. The court found the testimony willfully
false and given in an effort to persuade the jury to acquit.
Obviously, contrary to Hoelzer’s contention, the testimony was
material. We reject his specious assertion that, because the
script was already a misrepresentation, false testimony that he had
never deviated from it was not material to the charged offense.
Likewise, Hoelzer’s claimed deprivation of the right to
indictment and trial before punishment for the crime of perjury is
foreclosed by Dunnigan, 507 U.S. at __, 113A S. Ct. at 1118
(holding that § 3C1.1 perjury enhancement is more than mere
surrogate for perjury prosecution).
Finally, Hoelzer’s claim that his right to equal protection
was violated because he was treated differently than non-defendant
witnesses who commit perjury is rejected for the obvious reason
that criminal defendants and witnesses are not similarly situated
for sentencing purposes.
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2.
Bates and Von Hoff contest the amount of loss attributable to
their conduct. Both contend that the district court erred by
attributing all sales during the time of their employment to their
conduct. Again, we review only for clear error.
a.
Bates’ position at GTP, particularly her sales manager role,
provided a sufficient basis to find that she was responsible for a
jointly undertaken fraudulent scheme and that the losses caused by
the scheme were reasonably foreseeable to her. (Bates asserts
erroneously that the court did not make findings on amount of loss;
the court adopted the factual findings in the presentence report.)
b.
Von Hoff urges that his loss calculation should not include
all sales by his shift (day) because he did not engage in jointly
undertaken criminal activity and most certainly should not include
those by the other shift (late). It was not clear error to find
that the actions of both shifts were foreseeable to him.
III.
For the foregoing reasons, the judgment is
AFFIRMED.
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