United States v. Chavis

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
August 29, 2006
UNITED STATES CO URT O F APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT

U N ITED STA TES O F A M ER ICA,

Plaintiff - Appellee,
v. No. 05-6001
ALAN LOUIS CHAVIS, a/k/a Louis
Allen, a/k/a John Lawrence,

Defendant - Appellant.

A PPE AL FR OM T HE UNITED STATES DISTRICT COURT
FO R TH E W ESTERN DISTRICT O F O K LAH O M A
(D.C. NO . CR-04-09-01-M )

Bill Zuhdi, Oklahoma City, Oklahoma, for D efendant - Appellant.

James F. Robinson, Assistant United States Attorney, (John C. Richter, United
States Attorney, on the brief), Oklahoma City, Oklahoma, for Plaintiff - Appellee.

Before TA CH A, HOL LOW A Y, and HA RTZ, Circuit Judges.

HA RTZ, Circuit Judge.

Alan Louis Chavis appeals his convictions in the United States District

Court for the W estern District of Oklahoma on 11 counts of mail fraud, see 18

U.S.C. § 1341, and one count of conspiracy to commit mail fraud, see id. § 371.
He contends that (1) the district court denied him his right to counsel, (2) there

was insufficient evidence to sustain his convictions, (3) the district court

erroneously refused to give a good-faith instruction to the jury, and (4) the district

court erroneously sentenced him under the mandatory Sentencing Guidelines

scheme. W e have jurisdiction under 28 U.S.C. § 1291 and affirm.

I. B ACKGR OU N D

M r. Chavis, using the aliases Louis Allen and John Lawrence, conducted an

envelope-stuffing scheme that operated like chain mail. Under the scheme,

new spaper advertisements promised employment at home and directed those

interested to call a phone number. Those who called (“responders”) listened to a

recording that asked them to leave their names, addresses, and phone numbers.

Responders who provided their addresses were sent an “introductory”

packet, which included a letter from a purported (but nonexistent) company

officer or employee, whose photograph was on the letter. There were several

versions of the letter. All described the work being offered as stuffing envelopes

at home. The letters differed in the announced rate of pay, which ranged from

$1.40 to $2.76 for each envelope stuffed. Some of the letters said that the w ork

originated from mail-order companies who needed workers but did not want to

pay for the resulting labor costs. “If they hired more employees,” those letters

explained, “they would have to supervise them, rent more office space, pay more

taxes, health insurance, liability insurance, workers’ compensation, and all of this

-2-
involves more paperwork.” Aplee. Supp. App. at 60, 75, 76. By using home

workers these companies could pay up to $2.76 per envelope stuffed “and still

save money.” Id. Other versions of the letter stated that workers were needed as

part of a company expansion into new markets “and we have literally hundreds of

thousands of new customers who need to receive our circulars.” Id. at 81, 96.

Several versions stated that preaddressed, prestamped envelopes and prefolded

circulars would be delivered to the responder’s home to be stuffed. All versions

of the letter directed responders to mail a registration fee of $25, which would

later be doubly or triply refunded.

Those who sent the $25 fee received an acceptance letter notifying them

that they had been accepted to stuff envelopes and instructing them to send a self-

addressed stamped envelope and $1 for each of five different training shipments.

The training materials told the responders to obtain a post office box and voice

mail and to place advertisements similar to the ones they had answered. The ads

were to include the phone number of a voice mail box, on which the participant

was to record a two-minute script. W hen those who followed these directions

(“participants”) began receiving responses in their voice mail boxes, they were to

send a packet of introductory materials similar to the ones they had received,

requesting a $25 registration fee. W hen the fee was paid, they were to keep half

for themselves and to forw ard the remaining $12.50 to the processing center.

Participants made copies of an acceptance letter provided with the training

-3-
materials and mailed one to each new responder. The letter directed the

responder to send money for training materials. The training materials lamely

attempted to describe this process as what had been advertised:

As w e told you in the last Training and Orientation Shipment, in
order to generate the Customer Response Envelopes you will be
processing, you will place classified ads in publications anywhere in
the United States. W hen the customers respond, these envelopes
(pre-addressed and stamped) are sent directly to you at the mailing
address you have selected. You stuff them w ith your pre-folded, free
details circulars/application and seal them. You mail your completed
envelopes. Next, the resulting cash remittances are sent directly to
you for processing. Again, you will stuff an envelope with a Notice
of Acceptance, which tells them that their paperwork has been
received and is being processed.

Aplee. Supp. App. at 89 (second and third emphasis added).

A few participants moved up in the operation, acting as processing centers.

Jacqueline Earls, at the direction of “Louis Allen,”continued w orking as a

participant but also received the $12.50 checks remitted by other participants,

who had kept half of each $25 application fee as their share. Retaining $5 for

herself from each check, she deposited the remainder into a bank account from

which “Allen” made withdrawals. She testified that she never sent envelopes to

be stuffed to any of the applicants but was merely increasing the number of

newspaper ads being placed. She eventually pleaded guilty to mail fraud.

Tamara Briscoe performed similar functions and spoke with “M r. Allen”

nearly every day. She ran ads, mailed out different versions of introductory

letters describing the work either as stuffing envelopes for mail-order companies

-4-
or as helping the business expand into new markets, and received applications and

money for training materials. She opened one bank account at “M r. Allen’s”

direction and forwarded to him an ATM card. She deposited into this account

$7.50 of each $12.50 check she received from participants; she kept the remaining

$5 for herself. Also, at “M r. Allen’s” direction she opened a second bank account

from which she made refunds. She eventually pleaded guilty to mail fraud.

Using the aliases Louis Allen and John Lawrence, M r. Chavis also hired

secretarial services to make bank deposits, to receive his mail, and to prepare

documents to be mailed. Sonja Patillo testified that she was hired by such a

service to collect the dollar bills responders sent in for the training materials. She

also mailed training materials to responders in the self-addressed stamped

envelopes they had provided, answ ered phone calls from responders, and tried “to

appease them in some way” if they were unhappy with the scheme. Aplt. App.

Vol. 1 at 706.

Some responders chose not to participate after receiving the training

materials and seeing what the “business” entailed. Some requested refunds.

No envelopes or prefolded circulars were ever delivered to participants.

The only items ever “stuffed” were the introductory letters, acceptance letters,

and training materials that were mailed to responders and new participants, not

materials for mail-order companies who needed workers. Participants were

simply recruiting others to send in more money in a classic Ponzi or pyramid

-5-
scheme. Based on the records seized by postal inspectors from M s. Briscoe and

M s. Earls, the government created two summary exhibits that calculated the

number of applications (and their accompanying $25 checks) they had handled:

17,890 for M s. Earls and 83,321 for M s. Briscoe.

M r. Chavis was arrested in mid-December 2003. The district court

appointed June Tyhurst as his counsel on December 24, 2003, but he filed a

waiver of counsel on December 31. After a series of hearings regarding his

request to proceed pro se, the court granted the request on February 12, 2004.

Although initially proposing that M s. Tyhurst be cocounsel, the court appointed

her as standby counsel. Several months later, on June 16, 2004, Gary Cantrell

entered an appearance as M r. Chavis’s cocounsel and the court permitted

M s. Tyhurst to withdraw. W ithin a month, however, M r. Cantrell filed a motion

to withdraw as cocounsel; the court granted the request on August 23, 2004, and

reappointed M s. Tyhurst as standby counsel.

At trial the government called 28 witnesses, including M s. Earls and

M s. Briscoe; six participants who had placed ads, received applications with $25

checks, and forwarded half the proceeds to a processing center; nine responders

who declined to participate further after sending the $25 registration fee or an

additional $5 for training materials; five people who provided secretarial services

to M r. Chavis; and one John Lawrence, whose name and social security number

M r. Chavis had misappropriated as an alias. M r. Chavis did not testify or call any

-6-
witnesses. The jury delivered guilty verdicts on all counts. M r. Chavis did not

object to the findings in the presentence report, and the district court sentenced

him to concurrent terms of 60 months’ imprisonment on the conspiracy count and

292 months’ imprisonment on the mail-fraud counts.

II. D ISC USSIO N

A. Denial of Counsel

M r. Chavis contends that the district court violated his right to counsel by

permitting M r. Cantrell to withdraw. In his brief on appeal M r. Chavis argued

that he had a right to cocounsel. At oral argument, however, M r. Chavis’s

attorney conceded that M r. Chavis had no such right. See United States v.

M cKinley, 58 F.3d 1475, 1480 (10th Cir. 1995) (“[I]t is certainly true that there is

no constitutional right to a hybrid form of representation.”); United States v. Hill,

526 F.2d 1019, 1025 (10th Cir. 1975) (“The Sixth Amendment does not give any

indication that hybrid representation is a right of constitutional dimensions. . . .

[And] no statutory right of hybrid representation is accorded.”). Instead, he

argued that M r. Chavis had relinquished his right to proceed pro se and had

retained M r. Cantrell as lead counsel. He cited M cKaskle v. Wiggins, 465 U.S.

168 (1984), and M cKinley, 58 F.3d at 1480, for the proposition that a pro se

defendant may relinquish his right to self-representation if his standby counsel

assumes control of the case. He contended that M r. Chavis’s retained counsel,

M r. Cantrell, did in fact assume control of the case and that by allowing

-7-
M r. C antrell to withdraw, the district court denied M r. Chavis his right to counsel.

W e disagree.

In M cKaskle a pro se defendant claimed that standby counsel had so

interfered with his self-representation that he had been deprived of the right to

conduct his own defense. See 465 U.S. at 173. The Supreme Court rejected the

claim on the facts of the case, but recognized that a pro se defendant must have “a

fair chance to present his case in his own way,” id. at 177, and that there are

limits that standby counsel must respect, see id. at 177-88. As for M cKinley, the

pertinent issue was simply whether the defendant had asked to proceed pro se or

merely to participate as cocounsel; we held that he had requested to proceed pro

se. See 58 F.3d at 1480-81.

Apparently what M r. Chavis is suggesting is that (1) M r. Cantrell had

exceeded the limits on cocounsel’s permissible exercise of authority in the case,

so that M r. Chavis had in essence relinquished his pro se representation; (2) the

withdrawal of M r. Cantrell therefore left M r. Chavis without counsel; and (3) the

court thus violated M r. Chavis’s right to counsel by allowing M r. Cantrell to

withdraw. This is an interesting argument in theory, but the first premise lacks

factual support.

The relationship between a pro se defendant and cocounsel was described

to M r. Chavis by the district court early in the proceedings. On December 5,

2004, the following exchange occurred:

-8-
 THE COURT: The Court – we researched it very quickly – was trying
to look at a circumstance where you would still be
representing yourself, but where the counsel could be
of more assistance to you, more of a co-counsel, or
joint counsel. That person wouldn’t be your whipping
boy, or girl, but you couldn’t say, “Go do this, this,
this,” and they go do it. That person, you are more in
an equal posture as related to the case.

THE DEFENDANT: They would be able to assist me on the rules of
evidence and courtroom procedures?

THE COURT: It would be more like a co-counsel situation. You, as
the D efendant, would participate certainly as your own
counsel and as co-counsel, but you would still have the
services of an appointed counsel in more than an
advisory role. But it would still be subject to your
direct control in matters of strategy and how you
wanted to examine w itnesses, and other functions.

There is no Constitutional right to this kind of
representation, but the Court is trying to create a
circumstance which creates the least – which lessens an
environment for error in the trial.

W ould you be interested in this joint counsel, or co-
counsel kind of thing?

...

THE DEFENDANT: . . . I can’t imagine why I would turn that down.

Aplt. A pp. Vol 1 at 27-28.

The bounds of authority for cocounsel were hardly approached, much less

exceeded, in this case. During the brief time that M r. Cantrell was cocounsel, he

filed no motions and did not appear in court as M r. Chavis’s representative. In

fact, the only documents in the record signed by M r. Cantrell are his entry of

-9-
appearance and his request to withdraw. M r. Chavis clearly requested the right to

represent himself, and then retained M r. Cantrell as his cocounsel, not lead

counsel. He was undoubtedly “present[ing] his case in his own way.” M cKaskle,

465 U.S. at 177. He maintained ultimate control of the case, and proceeded pro

se throughout. The district court did not violate M r. Chavis’s right to counsel by

allowing M r. Cantrell to withdraw and then appointing M s. Tyhurst only as

standby counsel.

B. Sufficiency of the Evidence

M r. Chavis argues that the evidence at trial was insufficient to support his

convictions for mail fraud and conspiracy to comm it mail fraud. Sufficiency of

the evidence is a question of law that we review de novo, asking only “whether

taking the evidence— both direct and circumstantial, together w ith the reasonable

inferences to be drawn therefrom— in the light most favorable to the government,

a reasonable jury could find the defendant[] guilty beyond a reasonable doubt.”

United States v. Platte, 401 F.3d 1176, 1180 (10th Cir. 2005) (internal quotation

marks omitted).

To establish guilt under the mail-fraud statute, 18 U.S.C. § 1341, the

government had to prove that (1) M r. Chavis engaged in a scheme or artifice to

defraud or to obtain money by means of false and fraudulent pretenses; (2) he did

so with the intent to defraud; and (3) he “used the United States mails . . . to

facilitate that scheme.” United States v. Rahseparian, 231 F.3d 1267, 1271 (10th

-10-
Cir. 2000). M r. Chavis argues only that the evidence was not sufficient to

establish the second element, the intent to defraud. The argument is frivolous.

M r. Chavis’s “business” promised those who responded to the newspaper

ads that they would earn money stuffing envelopes. This was a false promise.

The business did not provide participants with either material to be stuffed

(except for one form letter that the participants themselves had to copy for their

mailings) or envelopes. Although participants put documents in self-addressed

envelopes from their own victims, they were not being paid as described in the

newspaper ads and acceptance letters. They were not performing the task for

companies retaining their stuffing services (either mail-order firms or

M r. Chavis’s own operation), and even M r. Chavis did not argue at trial that he

had provided any envelope-stuffing work. The “service” the participants were

paid to provide was not stuffing envelopes but soliciting victims. Their pay was

based on how many victims they recruited to send them m oney, not on how

proficient they were at putting circulars in envelopes.

W itnesses described how M r. Chavis controlled the entire operation. It was

a natural, compelling inference for the jury to find that M r. Chavis caused the

promotional materials to be distributed with no intent to fulfill the promises

made. See Cleveland v. United States, 531 U.S. 12, 19 (2000) (it is “unmistakable

that the [mail-fraud statute] reache[s] false promises and misrepresentations as to

the future.” (internal quotation marks omitted)); United States v. O’M alley, 535

-11-
F.2d 589, 592 (10th Cir. 1976) (entering into agreement to sell with no intention

of performing constitutes fraud within meaning of mail-fraud statute). M oreover,

as icing on the cake, witnesses testified to M r. Chavis’s various artifices to

conceal his identity and involvement in the scheme. Such attempts at

concealment can establish fraudulent intent. See United States v. Welch, 327 F.3d

1081, 1105 (10th Cir. 2003) (“Intent [to defraud] may be inferred from evidence

that the defendant attempted to conceal activity.” (internal quotation marks

omitted)). The evidence was sufficient for the jury to find beyond a reasonable

doubt that M r. Chavis intentionally defrauded his victims.

As for the conspiracy charge, the government must prove: “(1) the

defendant’s agreement with another person to violate the law; (2) his knowledge

of the essential objective of the conspiracy; (3) his knowing and voluntary

involvement; and (4) interdependence among the alleged coconspirators.”

Rahseparian, 231 F.3d at 1272. “Stated simply,” the charge “required the

government to prove [he] had an explicit or implicit agreement with [his

coconspirators] to commit mail fraud.” Id.

The only possible question regarding this charge is whether any of

M r. Chavis’s associates realized that the enterprise was comm itting fraud; if they

did not, they could not have been coconspirators. See United States v. Weidner,

437 F.3d 1023, 1033 (10th Cir. 2006) (to establish guilt under § 371 “the

government was required to prove that the two [coconspirators] agreed to [commit

-12-
fraud], and to knowingly engage in” the criminal activity). But M s. Earls and

M s. Briscoe, both of whom pleaded guilty to mail fraud before testifying,

described their own involvement in terms that clearly showed their knowledge

that they were distributing false promises of envelope-stuffing jobs. Based on

this evidence, a reasonable jury could have found beyond a reasonable doubt that

M r. Chavis had an agreement with his coconspirators to commit mail fraud.

C. G ood-Faith Instruction

A defendant is not guilty of mail fraud if he “in good faith believed that the

plan would succeed, that the promises made would be kept and the representations

carried out.” United States v. Hopkins, 744 F.2d 716, 718 (10th Cir. 1984) (en

banc). At trial M r. Chavis requested (but apparently did not tender) a good-faith

instruction. The district court denied the request, ruling that there was

insufficient evidence in the record to support such an instruction. The court cited

United States v. Smith, 13 F.3d 1421, 1426 (10th Cir. 1994), for the proposition

that “a benign explanation of only some of the acts is insufficient,” and stated that

“[a]t best, that’s what this Court finds that we have here.” Aplt. App. Vol. 4 at

1011 (emphasis added). M r. Chavis objected to the court’s failure to give the

instruction, but he neither stated his reasons why the instruction should be given

nor gave any grounds for his objection to the court’s decision not to give it:

THE COURT: M r. Chavis, do you have any objections to the
instructions for the record that this Court will
give?

-13-
 M R. CHAVIS: No, I don’t, Your Honor.

THE COURT: Very well.

M R. CHAVIS: You noted my objection to the lack of good faith?

THE COURT: Right, I did.

Aplt. App. Vol. 4 at 1013.

Because M r. Chavis’s objection did not state the grounds on which it was

based, we question whether he adequately preserved the issue. See Fed. R. Crim.

P. 30(d). But we need not resolve that question because there was no error in

denying the requested instruction.

This court is bound by its en banc decision that a defendant in a mail-fraud

case is entitled to a good-faith instruction if he requests it and “there is sufficient

evidence to support the theory.” Hopkins, 744 F.2d 716 at 717. 1 To justify the

1
Apparently, we are the only circuit to so hold. The other circuits to
address the matter have held, at least as a practical matter, that a district court is
not required to give a separate good-faith-defense instruction in a fraud case
because a finding of the intent to defraud, which is an element of the crime, see
Rahseparian, 231 F.3d at 1271, necessarily implies that there was no good faith.
See United States v. Dockray, 943 F.2d 152, 155 (1st Cir. 1991) (“[W]here the
court properly instructs the jury on the element of intent to defraud— essentially
the opposite of good faith— a separate instruction on good faith is not required.”);
United States v. M cElroy, 910 F.2d 1016, 1026 (2d Cir. 1990) (instruction to jury
on “‘intent to defraud’ . . . conveyed the essence of a ‘good faith defense’
instruction”); United States v. Gross, 961 F.2d 1097, 1103 (3d Cir. 1992) (“[A]
jury finding that the defendant has acted knowingly and wilfully is inconsistent
with a finding that the defendant acted in good faith.”); United States v. M ancuso,
42 F.3d 836, 847 (4th Cir. 1994) (“If the district court gives adequate instruction
on specific intent, a separate instruction on good faith is not necessary.”); United
States v. Upton, 91 F.3d 677, 683 (5th Cir. 1996) (jury instruction on
(continued...)

-14-
instruction, the defendant’s evidence “must have the capacity to rebut all

evidence of false and misleading conduct, all failures to disclose that which

should have been disclosed and all matters that deceive and were intended to

deceive another.” Smith, 13 F.3d at 1426. “A benign explanation of only some of

1
(...continued)
“‘knowingly’” and “‘willfully’ . . . substantially covered” defendant’s good-faith
defense); United States v. M utuc, 349 F.3d 930, 934 (7th Cir. 2003) (“[A]
defendant is not entitled to a specific good faith instruction so long as,
considering the instructions as a whole, the jury was adequately instructed upon
his theory of defense. . . . It is self-evident that one with an intent to defraud
does not act in good faith.” (internal quotation marks and ellipsis omitted));
United States v. Rushton, 963 F.2d 272, 274 (9th Cir. 1992) (“[A] defendant is not
entitled to a separate good faith instruction when the court adequately instructs on
specific intent.” (internal quotation marks omitted)); United States v. Sirang, 70
F.3d 588, 594 (11th Cir. 1995) (“[A] finding of specific intent to deceive
categorically excludes a finding of good faith.” (internal quotation marks
omitted)); United States v. Gambler, 662 F.2d 834, 837 (D .C. Cir. 1981) (same).
The Eighth Circuit has not expressly overruled its statement that a good-faith
instruction is required, see United States v. Casperson, 773 F.2d 216, 223 (8th
Cir. 1985) (“[T]his court has held that defendants are entitled to an instruction on
good faith where one has been requested and evidence exists to support the
theory.”); but it has implicitly done so by holding that the requirement is satisfied
by a proper specific-intent instruction, see United States v. Sanders, 834 F.2d
717, 719 (8th Cir. 1987) (good-faith instruction not needed if specific intent to
defraud is required by the instructions given). Similarly, the Sixth Circuit,
relying on the Fifth Circuit decision in United States v. Goss, 650 F.2d 1336,
1345 (5th Cir. 1981), has held that failure to give a requested good-faith
instruction in a mail-fraud case is error, but the error is harmless when the
specific-intent instruction “adequately informed the jury of the defendants’ theory
of the case, and properly placed the burden of proof of intent on the government.”
United States v. M cGuire, 744 F.2d 1197, 1201-02 (6th Cir. 1984). (In later cases
the Fifth Circuit has not spoken in terms of harmless error, but rather has simply
held that a specific-intent instruction satisfactorily informs the jury of the
defense. See Upton, 91 F.3d at 683; United States v. Gray, 751 F.2d 733, 735-36
(5th Cir. 1985).)

-15-
the acts is insufficient”; the defendant must “completely rebut evidence that he or

she intended to defraud.” Id. In particular, “[a] defendant’s honest belief that a

venture will ultimately succeed does not constitute good faith if, in carrying out

the plan, he knowingly uses false representations or pretenses w ith intent to

deceive.” United States v. Janusz, 135 F.3d 1319, 1323 (10th Cir. 1998).

M r. Chavis’s claim of good faith is predicated on his assertions that he did

not think he was committing mail fraud and that he thought he was actually

helping participants. But he points to no evidence, nor does he even claim, that

he honestly believed that he would fulfill the promise to provide envelope-

stuffing jobs. Accordingly, he was not entitled to a good-faith instruction.

D. Sentencing

In Booker v. United States, 543 U.S. 220 (2005), the Supreme Court “held

that mandatory application of the [Sentencing] G uidelines violates the Sixth

Amendment when judge-found facts, other than those of prior convictions, are

employed to enhance a sentence.” United States v. Gonzalez-Huerta, 403 F.3d

727, 731 (10th Cir. 2005) (en banc). M r. Chavis’s trial w as conducted in

September 2004, before Booker but after the Supreme Court’s decision in Blakely

v. Washington, 542 U.S. 296 (2004), had cast doubt on whether a judge, rather

than the jury, could find the facts necessary for enhancements under the

Guidelines. Thus, after the jury returned its verdicts, the district court recessed to

finalize the jury instructions for factfindings relating to sentencing. At the end of

-16-
the recess, M r. Chavis announced to the court that he was waiving any

involvement by the jury in the sentencing proceeding. Also, he did not object to

the findings in the presentence report.

On appeal M r. Chavis argues that the district court nevertheless erred in

applying the Guidelines mandatorily. W e have used the term “nonconstitutional

Booker error” to categorize mandatory application of the Guidelines. See United

States v. Paxton, 422 F.3d 1203, 1207 (10th Cir. 2005). M r. Chavis did not raise

this argument in district court, so our review is for plain error. See G onzalez-

Huerta, 403 F.3d at 732. Again, plain error is “(1) error, (2) that is plain, which

(3) affects substantial rights, and which (4) seriously affects the fairness,

integrity, or public reputation of judicial proceedings.” Id. (internal quotation

marks omitted).

On this issue the government concedes that the first two prongs of the

plain-error test have been met, but argues that M r. Chavis has not met the third or

fourth prongs. W e need not address the third prong of the plain-error test because

M r. C havis cannot satisfy the fourth. See id. at 736. W e have held that

nonconstitutional Booker error does not satisfy the fourth prong if the sentence

falls within the Guidelines range and “there is no record evidence to support a

lower sentence” Id. at 738-39. W e see no such record evidence. The district

court did not commit plain error in sentencing M r. Chavis.

-17-
III. C ON CLU SIO N

W e AFFIRM the judgment of the district court.

-18-