F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
FEB 2 2005
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 03-3293
GEORGE SHEPARD,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Kansas
(D.C. No. 01-CR-10116-01-JTM)
Submitted on the briefs:
Eric F. Melgren, United States Attorney, and Brent I. Anderson, Assistant United
States, Wichita, Kansas, for Plaintiff-Appellee.
Larry Dean Kissee, Ash Flat, Arkansas, and Jeremy B. Lowrey, Sheridan,
Arkansas, for Defendant-Appellant.
Before EBEL, McWILLIAMS, and HENRY, Circuit Judges. *
HENRY, Circuit Judge.
After examining the briefs and appellate record, this panel has determined
*
unanimously to decide this case on the briefs without oral argument. See Fed. R.
App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted
without oral argument.
In July 2002, a jury found George Shepard guilty of twenty-four counts of
money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i); one count of
conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); one
count of transportation of stolen property, in violation of 18 U.S.C. § 2314; and
one count of wire fraud, in violation of 18 U.S.C. § 1343. On appeal, Mr.
Shepard argues that the evidence is insufficient to support his convictions. We
exercise jurisdiction under 28 U.S.C. § 1291 and affirm Mr. Shepard’s
convictions on all counts.
I. BACKGROUND
George Shepard was the chief welding inspector on a natural gas pipeline
project between Mobile Oil Corporation and KN Energy near Liberal, Kansas.
KN Energy, now doing business as Kinder Morgan, agreed in 1997 to install
compressor stations for the project’s pipelines. It retained Cisneros Welding and
Construction (“CWC”) as a contractor for the actual construction. Mr. Shepard
oversaw the work performed by CWC to ensure the project’s compliance with KN
Energy’s specifications. He reviewed and mailed daily time sheets for CWC
workers to KN Energy’s home office for payment. Mr. Shepard was paid salary
and per diem by an engineering sub-contractor that invoiced KN Energy. His son,
Kim Shepard (“Kim”), was another inspector on the project.
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KN Energy’s policies prohibited Mr. Shepard or Kim from renting their
own welding equipment to CWC or KN Energy for use at the Liberal site.
Around January 1998, Mr. Shepard asked a new CWC truck driver, Danny Blood,
if Mr. Shepard could put a welding rig in Mr. Blood’s name and collect rental
checks. Mr. Blood agreed, cashed the first two checks for welding rig rentals,
and forwarded the rental money to Mr. Shepard and Kim. Mr. Blood is not a
welder and never worked on a welding rig. He remained on the payroll for rig
rentals after cashing the initial checks, but payments no longer came to him. All
but three rig rental checks made payable to Mr. Blood were deposited into bank
accounts of Mr. Shepard or Kim. Rec. vol. III, doc. 111, at 555.
In addition, Mr. Shepard instructed Mr. Blood to haul KN Energy
equipment from the Liberal site to Thayer, Missouri. There, Mr. Shepard and
Kim owned Country Club Kennels and other property. Mr. Blood hauled a
tractor, bobcat, brush hog, and backhoe from Liberal to Thayer. From January
through April 1998, another CWC driver, Louis Loya, hauled four or five truck
loads of equipment from Liberal to Thayer. This equipment included steel pipe, a
small crane, a backhoe, prefabricated frames, and various tools.
Also in 1998, Mr. Shepard placed Jeremy Thomas Wooldridge on the CWC
payroll as a welder. Mr. Wooldridge worked for the Shepards in Thayer,
Missouri, but he never worked on the Liberal project. Mr. Shepard and Kim
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deposited Mr. Wooldridge’s welder checks into their bank accounts. Rec. vol. III,
doc. 111, at 549-50. In addition, Mr. Shepard placed a fictitious employee named
“Eloy Moreno” on the CWC payroll and collected payroll checks issued to “Mr.
Moreno.” Mr. Shepard also created a fictitious rental company, “Moreno
Rentals,” to generate CWC rental checks. Mr. Shepard and Kim collected the
“Moreno Rental” checks and deposited them in the bank accounts of Mr. Shepard,
Kim, and Country Club Kennels. Id. at 703.
The Liberal site’s project manager became aware of possible problems and
notified KN Energy in May or early June 1998. A KN Energy audit discovered
that (1) people on the payroll were not actually working; (2) welding equipment
that the welder did not own was being charged to the project; (3) materials that
did not relate to the project, such as dog feeders and dog food, were being
purchased; and (4) some of Mr. Shepard’s storage trailers and welding rigs were
being used on the project. Rec. vol. I, doc. 109, at 44. KN Energy terminated
Mr. Shepard’s employment in early June 1998. That same month, KN Energy
recovered on Mr. Shepard’s Missouri property fifty-five company items with an
estimated value of $88,854.
The government charged Mr. Shepard and Kim in a superceding indictment
with twenty-nine counts of money laundering, one count of conspiracy to commit
money laundering, one count of transportation of stolen goods, and one count of
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wire fraud. Prior to trial, the district court granted defendants’ motions for
severance. At the conclusion of the government’s evidence at Mr. Shepard’s trial,
he moved for a judgment of acquittal on all counts. The district court dismissed
five counts of money laundering because those checks “were deposited directly
into Kim Shepard or George Shepard’s accounts” and did not satisfy the necessary
concealment element for a money laundering conviction. Rec. vol. III, doc. 111,
at 764. The jury found Mr. Shepard guilty of twenty-four counts of money
laundering, one count of conspiracy to commit money laundering, one count of
transportation of stolen goods, and one count of wire fraud. A separate jury later
found Kim guilty of eighteen counts of money laundering, one count of
conspiracy to commit money laundering, and one count of wire fraud.
After the jury conviction, Mr. Shepard filed a motion for a judgment of
acquittal. The district court denied the motion, sentenced Mr. Shepard to thirty-
three months’ imprisonment, followed by three years of supervised release, and
ordered him to pay $106,328.71 in restitution.
II. DISCUSSION
On appeal, Mr. Shepard contends that the government did not present
sufficient evidence as to any of the offenses on which he was convicted. On this
question, we review the record de novo. United States v. Delgado-Uribe, 363
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F.3d 1077, 1081 (10th Cir. 2004). “We must determine whether viewing the
evidence in the light most favorable to the Government, any rational trier of fact
could have found Mr. Shepard guilty of the crime beyond a reasonable doubt.”
Id. (internal quotation marks omitted). This court does not weigh conflicting
evidence nor consider the credibility of witnesses. United States v. McKissick,
204 F.3d 1282, 1289-90 (10th Cir. 2000). We only determine “whether [the]
evidence, if believed, would establish each element of the crime.” United States
v. Vallo, 238 F.3d 1242, 1247 (10th Cir. 2001) (internal quotation marks omitted).
“We will only overturn a jury verdict if no reasonable juror could have reached
the disputed verdict.” United States v. Magleby, 241 F.3d 1306, 1312 (10th Cir.
2001) (internal quotation marks omitted).
A. Money laundering
The jury found Mr. Shepard guilty of twenty-four counts of money
laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i). That section provides, in
part:
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 a specified unlawful activity–knowing that the
transaction is designed in whole or in part–to conceal or disguise the
nature, the location, the source, the ownership, or the control of the
proceeds 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.
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Congress enacted this language in the Money Laundering Control Act of
1986 to target, as the term “laundering” connotes, the transformation of “dirty”
funds from illegal activities into a “clean” and usable form. The statutory
language, however, has needed some practical clarification. Thus, courts have
sometimes referenced an earlier Executive Branch report to define money
laundering’s manner and objectives.
Money laundering is “the process by which one conceals the existence,
illegal source, or illegal application of income, and disguises that income to make
it appear legitimate.” President’s Commission on Organized Crime, The Cash
Connection: Organized Crime, Financial Institutions, and Money Laundering, at
7 (Interim Report, Oct. 1984) [hereinafter The Cash Connection]; see also United
States v. Cuevas, 847 F.2d 1417, 1419 n.2 (9th Cir. 1988) (adopting The Cash
Connection’s definition of money laundering); United States v. Heyman, 794 F.2d
788, 789 n.1 (2d Cir. 1986) (same). Money laundering schemes assist criminals
who “seek to change large amounts of cash . . . into an ostensibly legitimate form,
such as business profits or loans, before using those funds for personal benefit.”
The Cash Connection at 7; see also United States v. Estermann, 324 F.3d 565,
570 (7th Cir. 2003) (“In its classic form, the money launderer folds ill-gotten
funds into the receipts of a legitimate business . . . .”). This circuit has noted its
agreement “with the Executive Branch statements [in The Cash Connection] . . .
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as to the purposes of the money laundering statute.” United States v. Garcia-
Emanuel, 14 F.3d 1469, 1474 (10th Cir. 1994).
On appeal, Mr. Shepard only challenges the sufficiency of the evidence in
support of the “design” requirement of the money laundering statute. Aplt’s Br.
at 30-34. He asserts that the government did not prove that he knew his
transactions were “designed in whole or in part [] to conceal or disguise” illegal
proceeds. 18 U.S.C. § 1956(a)(1)(B)(i). He argues that transaction proceeds
were “easily traceable” through the Shepards’ deposits, and that their second-
endorsement of several checks in question indicates a lack of design to conceal.
Aplt’s Br. at 32. Furthermore, Mr. Shepard maintains, documentary evidence
from banks handling the financial transactions at issue created a “clear paper
record” about the funds’ source. Id. at 32-33.
This court has discussed several types of evidence that may demonstrate an
intent to disguise or conceal illegal proceeds:
They include, among others, statements by a defendant probative of
intent to conceal; unusual secrecy surrounding the transaction;
structuring the transaction in a way to avoid attention; depositing illegal
profits in the bank account of a legitimate business; highly irregular
features of the transaction; using third parties to conceal the real owner;
a series of unusual financial moves cumulating in the transaction; or
expert testimony on practices of criminals.
Garcia-Emanuel, 14 F.3d at 1475-76.
We have also described two general “disciplines” for interpreting the
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concealment element. Id. at 1476. First, we construe the money laundering
statute as a “concealment statute–not a spending statute.” Id. We reject an
interpretation of the money laundering statute “to broadly encompass all
transactions, however ordinary on their face, which involve the proceeds of
unlawful activity.” United States v. Sanders, 928 F.2d 940, 946 (10th Cir. 1991);
see also United States v. Edgmon, 952 F.2d 1206, 1210 (10th Cir. 1991)
(“[M]erely spending the proceeds of illegal activities does not violate the money
laundering statute.”). The statute criminalizes only transactions “designed in
whole or in part [] to conceal or disguise the nature, the location, the source, the
ownership, or the control of the proceeds of specified unlawful activity.” 18
U.S.C. § 1956(a)(1)(B)(i).
Thus, we concluded in Sanders that the statute “reach[es] commercial
transactions intended (at least in part) to disguise the relationship of the item
purchased with the person providing the proceeds and that the proceeds used to
make the purchase were obtained from illegal activities.” 928 F.2d at 946. Along
with “those transactions designed to conceal the identity of the participants,” “the
statute is aimed broadly at transactions designed in whole or in part to conceal or
disguise in any manner the nature, location, source, ownership, or control of the
proceeds of unlawful activity.” United States v. Lovett, 964 F.2d 1029, 1034 n.3
(10th Cir. 1992).
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As a second “discipline,” we require the government to present substantial
evidence of concealment for a conviction. Garcia-Emanuel, 14 F.3d at 1476.
“[A]ctions that are merely suspicious and do not provide substantial evidence of a
design to conceal will not alone support a conviction.” Id. at 1475.
With these concepts in mind, we now analyze the twenty-four counts of
money laundering on which Mr. Shepard was convicted. These counts concern
three primary types of transactions. First, counts 5-8, 14-19, and 25-30 involve
deposits of illegal proceeds into a joint bank account for Country Club Kennels,
on which both Mr. Shepard and Kim were signatories. Second, counts 10 and 11
involve deposits of illegal proceeds into an account for Mr. Shepard’s daughter,
Chastity Shepard. Third, counts 1, 2, 4, and 20-22 involve the cashing of checks
made payable to Danny Blood and “Eloy Moreno.”
1. Deposits into Country Club Kennels
The government presented evidence at trial that Mr. Shepard and Kim
commingled sixteen illegal deposits with legitimate receipts in their Country Club
Kennels’ joint business account. These check deposits were of three kinds:
counts 4-8 were checks made payable to Danny Blood; counts 14-20 were checks
made payable to Jeremy Wooldridge; and counts 25-30 were checks made payable
to “Eloy Moreno.” Aplt’s Br. at 27-28. As noted, neither Mr. Blood nor Mr.
Wooldridge worked for Mr. Shepard’s kennel, and “Mr. Moreno” did not exist.
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An IRS agent testified at trial that Mr. Shepard’s sixteen deposits into the Country
Club Kennels account totaled $84,340.26, and the agent’s records concerning the
kennel account were admitted into evidence. Rec. vol. III, doc. 111, at 588, 592.
This circuit has noted that depositing illegal proceeds into the bank account
of a legitimate business may support the inference of an intent to conceal. See
Garcia-Emanuel, 14 F.3d at 1476. Other circuits agree. For example, the Fifth
Circuit concluded that “[e]vidence that the defendant commingled illegal proceeds
with legitimate business funds is sufficient to support a conviction under § 1956.”
United States v. Rodriguez, 278 F.3d 486, 491 (5th Cir. 2002). Similarly, the
Seventh Circuit has stated that commingling of funds “is itself suggestive of a
design to hide the source of ill-gotten gains.” United States v. Jackson, 935 F.2d
832, 840 (7th Cir. 1991); see also United States v. Bowman, 235 F.3d 1113, 1117
(8th Cir. 2000) (“Depositing unlawfully obtained money into a seemingly
legitimate business account . . . and passing [the money] off as funds of a
legitimate business is sufficient evidence to allow a reasonable jury to conclude
that [the defendant] intended to conceal the stolen nature of the money and its
true ownership.”) (internal citations and quotation marks omitted). We agree with
these decisions and conclude that commingling unlawful and legitimate deposits
supports the inference of an intent to conceal or disguise the illegal proceeds.
At Mr. Shepard’s trial, the IRS agent presented evidence tracing sixteen
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illegal checks to deposits in the Country Club Kennels’ joint business account.
Rec. vol. III, doc. 111, at 592. These unlawfully obtained checks, made payable
to Mr. Blood, Mr. Wooldridge, and “Mr. Moreno,” were fraudulently endorsed
prior to deposit in the kennel account. A jury could reasonably infer that these
deposits were commingled with legitimate kennel profits to conceal the nature,
source, or ownership of the illegal proceeds. Thus, we find sufficient evidence of
concealment to support Mr. Shepard’s convictions on the sixteen counts involving
unlawful deposits into the Country Club Kennels account.
2. Deposits into Mr. Shepard’s daughter’s account
Counts 10 and 11 involve Mr. Shepard’s deposits of illegal proceeds into
the account of his daughter, Chastity Shepard. At trial, the IRS agent testified
that Mr. Shepard deposited two checks into his daughter’s bank account. Rec.
vol. III, doc. 111, at 593. The checks, made payable to Jeremy Wooldridge, bore
an endorsement of Mr. Wooldridge and Mr. Shepard and totaled $1,147.45. Id.
“[U]sing third parties to conceal the real owner” supports the inference of
an intent to disguise or conceal illegal funds. Garcia-Emanuel, 14 F.3d at 1476.
Under 18 U.S.C. § 1956(a)(1)(B)(i), we may infer a design to conceal or disguise
unlawful proceeds “when a defendant transfers those proceeds into the control of
others with whom the defendant has a very close relationship.” Bowman, 235
F.3d at 1116. Other circuits examining deposits of illegally obtained money into
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a relative’s account have found such deposits probative of an intent to conceal or
disguise. The Eighth Circuit concluded that a defendant’s deposit of criminally
derived funds into his girlfriend’s checking account, which she later used to buy
personal items, “evinces the design to conceal.” Id. The Fifth Circuit found
sufficient evidence to satisfy the concealment element under § 1956 when a
defendant’s wife placed illegally obtained money in a safe deposit box under a
relative’s name. United States v. Short, 181 F.3d 620, 626 (5th Cir. 1999); see
also United States v. Stephenson, 183 F.3d 110, 120 (2d Cir. 1999) (holding the
concealment element satisfied when defendant’s wife put illegal drug proceeds
into a safe deposit box in her name).
This court has not specifically addressed the concealment element when a
defendant deposits unlawfully obtained proceeds into a family member’s account.
However, in light of Garcia-Emanuel, other circuits’ treatment of illegal deposits
into a relative’s account, and our standard of review of a jury verdict, we find
sufficient evidence of concealment to support Mr. Shepard’s conviction for counts
10 and 11. A rational jury could reasonably conclude that Mr. Shepard intended
to conceal or disguise the unlawfully gained checks when he deposited them in
his daughter’s account.
3. Checks made payable and cashed by Danny Blood or “Eloy Moreno”
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In the remaining six counts, checks made payable to falsified CWC
employees were cashed. Counts 1, 2, and 4 involve checks made payable to
Danny Blood, with an alleged endorsement by Danny Blood on the back. Checks
involved with counts 20 and 22 were made payable to “Eloy Moreno,” with the
printed name “Eloy Urquidi” on the back of the checks. The check related to
count 21 was also made payable to “Eloy Moreno.” On the back, this check
included the printed name of “Eloy Urquidi” and a second endorsement by Oscar
Hernandez, the CWC’s employee supervisor in Liberal. The IRS agent testified at
trial that these six checks totaled $20,841. Rec. vol. III, doc. 111, at 589-90.
Government witnesses testified that Mr. Shepard prepared and caused
others to prepare false documentation related to wages, per diem, and rental
equipment. According to these witnesses, Mr. Shepard then sent these false
documents to CWC to generate fraudulent wage, per diem, and rental equipment
checks made payable to both real and falsified individuals. Rec. vol. I, doc. 109,
at 154, 172-73; Rec. vol. II, doc. 110, at 306-10. Mr. Blood testified that he
personally cashed for the Shepards only two rig rental checks made payable to
him, but he “didn’t get every one” and at some point the fraudulent rig rental
checks were no longer delivered to him. Rec. vol. I, doc. 109, at 173-74. The
IRS agent stated that Mr. Shepard and Kim deposited checks made payable to Mr.
Blood. Rec. vol. III, doc. 111, at 555. In addition, Mr. Hernandez testified that
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Mr. Shepard directed him to complete fraudulent employment application forms
for “Eloy Moreno,” who did not work at the Liberal site and may not have been a
“real person.” Rec. vol. II, doc. 110, at 306-10.
These checks made payable to Mr. Blood and Mr. Moreno yet cashed by
Mr. Shepard evinced an intent to conceal or disguise the illegal funds. See
Garcia-Emanuel, 14 F.3d at 1475-76. By falsifying documentation to CWC with
individuals who never worked at the Liberal site, Mr. Shepard’s transactions were
structured “in a way to avoid attention,” “us[ed] third parties to conceal the real
owner,” and involved “highly irregular features.” Id. Thus, a reasonable jury
could find Mr. Shepard guilty of counts 1, 2, 4, and 20-22.
B. Conspiracy to commit money laundering
The jury found Mr. Shepard guilty of one count of conspiracy to commit
money laundering under 18 U.S.C. § 1956(h). To convict Mr. Shepard, the
government was required to prove (1) the existence of an agreement (2) to break
the law, (3) an overt act (4) in furtherance of the conspiracy’s object, and (5) that
he willfully entered the conspiracy. 18 U.S.C. § 371; United States v. Hanson, 41
F.3d 580, 582 (10th Cir. 1994). “The agreement or confederation to commit a
crime” is the essence of any conspiracy conviction. Id. at 582 (internal quotation
marks omitted).
Mr. Shepard argues that we should find no conspiracy in the absence of a
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design to conceal. However, as we have shown, the government clearly
introduced sufficient evidence from which a reasonable jury could conclude that
Mr. Shepard had the requisite intent to conceal illegal funds. Witnesses testified
that Mr. Shepard falsified time sheets to generate false payroll and rig rental
checks, received checks from CWC made payable to non-employees, caused
others to cash the checks, and falsely endorsed and mailed checks for deposit into
the accounts for Country Club Kennel and his daughter. Rec. vol. I, doc. 109, at
154, 171-73; Rec. vol. II, doc. 110, at 306-10; Rec. vol. III, doc. 111, at 703-12.
The evidence is therefore sufficient to support Mr. Shepard’s conviction for
conspiracy to commit money laundering.
C. Transportation of stolen property
The jury also convicted Mr. Shepard of one count of transportation of
stolen property under 18 U.S.C. § 2314. To convict Mr. Shepard of this offense,
the government was required to prove that (1) he transported “goods, wares,
merchandise, securities or money” in interstate or foreign commerce; (2) those
goods have a value of “$5,000 or more;” and (3) he “[knew] the same to have
been stolen, converted or taken by fraud.” 18 U.S.C. § 2314; Dowling v. United
States, 473 U.S. 207, 214 (1985).
Mr. Shepard argues that the government did not establish an underlying
theft for most of the property, and that with regard to the remaining property, the
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government did not show that its valuation exceeded $5,000. Aplt’s Br. at 36.
Mr. Shepard maintains that CWC’s on-site representative, Mr. Hernandez,
authorized most of the disputed property to be moved. Mr. Shepard
acknowledges, however, that he may have “misused machinery to engage in
building projects in Missouri” or misstated facts “related to who owned the
property in question.” Id. at 37.
At trial, two CWC truck drivers, Mr. Blood and Mr. Loya, testified that
they hauled equipment on several occasions from the Liberal site to the Thayer,
Missouri kennel that Mr. Shepard and Kim owned. Rec. vol. I, doc. 109, at 120-
25, 176-79. Mr. Shepard and Kim asked Mr. Blood to haul equipment to Missouri
“two or three times.” Id. at 177-78. Mr. Shepard also provided directions to Mr.
Loya after Mr. Hernandez instructed a Missouri delivery. Id. at 125. A KN
Energy district foreman visited the Thayer site in June 1998. The foreman took
photographs of the equipment at issue and prepared a list of items with an
estimated value of $88,854. Rec. vol. II, doc. 110, at 430-34. Also, the CWC
owner, Jose Cisneros, stated that he did not authorize Mr. Shepard or Kim to
move any equipment from the Liberal site to Missouri. Id. at 406.
CWC truck drivers testified that Mr. Shepard instructed them to transport
KN Energy property from Kansas to the Shepards’ property in Missouri, and this
property was cumulatively valued in excess of $5,000. Furthermore, the
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government’s evidence allowed a reasonable jury to conclude that Mr. Shepard
knew the KN Energy property “to have been stolen, converted or taken by fraud.”
18 U.S.C. § 2314. The evidence, viewed in the light most favorable to the
government, is therefore sufficient to support conviction on one count of
transportation of stolen property.
D. Wire fraud
The jury found Mr. Shepard guilty of one count of wire fraud under 18
U.S.C. § 1343. That section provides, in part:
Whoever, having devised or intending to devise any scheme or artifice
to defraud, or for obtaining money or property by means of false or
fraudulent pretenses, representations, or promises, transmits or causes
to be transmitted by means of wire, radio, or television communication
in interstate or foreign commerce, any writings, signs, signals, pictures,
or sounds for the purpose of executing such scheme or artifice, shall be
fined under this title or imprisoned . . . .
To establish wire fraud under 18 U.S.C. § 1343, the government was
required to prove (1) a scheme or artifice to defraud and (2) use of interstate wire
communications to facilitate that scheme. United States v. Bailey, 327 F.3d 1131,
1140 (10th Cir. 2003). The government proves a scheme to defraud by showing
“conduct intended or reasonably calculated to deceive persons of ordinary
prudence or comprehension.” United States v. Janusz, 135 F.3d 1319, 1323 (10th
Cir. 1998) (internal quotation marks omitted).
Count 9 of the indictment alleged that Mr. Shepard and Kim:
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[F]or the purpose of executing a scheme and artifice to defraud, and for
obtaining money by means of false and fraudulent pretenses and
representations, did knowingly and willfully transmit and cause to be
transmitted in interstate commerce by means of wire communication
certain writings, signs, signals and sounds which transmitted
information concerning wages to be paid to Danny Blood by Cisneros
Welding and Construction [CWC] in Odessa, Texas, for the purpose of
obtaining money for the defendants, when the defendants knew they
were not entitled to this money.
Rec. vol. I, doc. 30, at 5 (Superceding Indictment, filed Feb. 12, 2002). This
count concerns information that Mr. Shepard and Kim wired to CWC to generate
a check made payable to Mr. Blood.
In challenging the evidence supporting this conviction, Mr. Shepard argues
that the rig rental checks under Mr. Blood’s name were legitimate rental charges
for equipment actually owned by Mr. Shepard. Aplt’s Br. at 39. In addition, Mr.
Shepard asserts that CWC’s on-site representative, Mr. Hernandez, approved the
billing method and knew that rig rental checks were being billed through Mr.
Blood. Id.
We are not convinced by Mr. Shepard’s assertions. The government
presented evidence at trial that Mr. Shepard and his son Kim e-mailed or faxed
time sheets from the Liberal site to Odessa, Texas, where CWC processed checks
for wages, per diem, and rig rentals. Rec. vol. I, doc. 109, at 209. In Odessa, the
CWC general manager downloaded payroll sheets from the Shepards each
Monday morning and called Kim to verify delivery. Rec. vol. II, doc. 110, at 379-
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80. Furthermore, Mr. Blood’s own testimony confirmed that he was not a welder,
did not have a welding rig on the Liberal site, and should not have received rig
rental checks. Rec. vol. I, doc. 109, at 167-68, 172-73. We conclude that the
government provided sufficient evidence that Mr. Shepard transmitted
information about Mr. Blood’s wages through interstate commerce to generate a
fraudulent check.
III. CONCLUSION
We therefore AFFIRM Mr. Shepard’s convictions on all counts.
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