UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-5070
UNITED STATES OF AMERICA,
Plaintiff - Appellant,
v.
WILLIAM CARL SOUDER, JR.; MARVIN DEAN CHAMBERS, SR.; ALVIN
LEWIS ELLIOTT, SR.,
Defendants – Appellees.
Appeal from the United States District Court for the Middle
District of North Carolina, at Greensboro. James A. Beaty, Jr.,
Chief District Judge. (1:08-cr-00136-JAB-1)
Argued: March 25, 2011 Decided: June 30, 2011
Before TRAXLER, Chief Judge, and WILKINSON and DIAZ, Circuit
Judges.
Affirmed in part, reversed in part, and remanded by unpublished
opinion. Judge Diaz wrote the opinion, in which Chief Judge
Traxler and Judge Wilkinson joined.
ARGUED: Frank J. Chut, Jr., OFFICE OF THE UNITED STATES
ATTORNEY, Greensboro, North Carolina, for Appellant. James E.
Ferguson, II, FERGUSON STEIN CHAMBERS GRESHAM & SUMTER, P.A.,
for Appellees. ON BRIEF: Anna Mills Wagoner, OFFICE OF THE
UNITED STATES ATTORNEY, Greensboro, North Carolina, for
Appellant. Thomas H. Johnson, Jr., GRAY, JOHNSON & LAWSON, LLP,
for Appellee Souder; Eric D. Placke, OFFICE OF THE FEDERAL
PUBLIC DEFENDER, Greensboro, NC, for Appellee Elliott.
Unpublished opinions are not binding precedent in this circuit.
2
DIAZ, Circuit Judge:
William Carl Souder, Jr., Marvin Dean Chambers, Sr., and
Alvin Lewis Elliott, Sr. (“Defendants”) were indicted in
Greensboro, North Carolina on nine counts of mail fraud in
violation of 18 U.S.C. § 1341. The Defendants, along with a
fourth co-defendant, James Henry Wilcher, were also charged in a
second indictment with honest services mail fraud in violation
of 18 U.S.C. §§ 1341 and 1346. After a thirteen-day trial that
began on June 30, 2009, the jury returned guilty verdicts
against the Defendants as to all counts in both indictments, but
acquitted Wilcher.
The Defendants filed a joint post-verdict motion for
judgment of acquittal, which the district court granted. The
district court also conditionally granted a new trial. The
government timely appealed. 1 We hold that the district court
erred in granting judgment of acquittal and therefore reverse as
to that issue. Applying the much more deferential “abuse of
discretion” standard to the district court’s decision to
conditionally grant a new trial, we affirm that ruling, and
remand for further proceedings.
1
The government has since dismissed its appeal with respect
to the honest services mail fraud charges in the second
indictment.
3
I.
We review first the trial court’s order granting the
Defendants’ motion for judgment of acquittal. As to this issue,
we view the evidence in the light most favorable to the
government and recite the facts accordingly.
This case stems from a supplemental life insurance program
developed by the Defendants for the Most Worshipful Prince Hall
Grand Lodge of Free and Accepted Masons of North Carolina and
Jurisdiction, Inc. (“Grand Lodge”). The Grand Lodge oversees
approximately three hundred local Masonic lodges scattered
throughout North Carolina, which, at the time of these events,
boasted over 18,000 individual members or Masons. Defendants
Chambers and Elliott were salaried officers of the Grand Lodge,
serving as Grand Master and Grand Secretary, respectively.
Defendant Souder was President and CEO of Atlanta Life General
Agency, Inc. (“ALGA”), a corporate subsidiary of Atlanta Life
Insurance Company. ALGA’s primary business was the sale of
insurance products underwritten by other companies, from which
it earned commissions. Defendant Wilcher was an insurance agent
and owner of the Wilcher Group, based in Johnsonville, South
Carolina.
Stated broadly, the government’s theory of the case was
that the Defendants misrepresented the terms of the supplemental
4
life insurance program to the Masons by, at least in some
instances, binding Masons (and the Grand Lodge) to pay premiums
on insurance policies that (1) exceeded the amount of the death
benefit sought by the Mason, and (2) named the Grand Lodge as a
partial beneficiary without the Mason’s consent. In furtherance
of the alleged scheme, the Defendants mailed so-called
“certificates of insurance” to Masons that understated the
amount of insurance obtained by the Mason and failed to disclose
that the Grand Lodge was a partial beneficiary of the policy.
According to the government, this scheme directly benefitted
Souder, in that he earned commissions on all policies issued,
and had the potential to benefit Chambers and Elliott, who, as
the Grand Lodge’s senior officers, would have free rein over the
use of the death benefit proceeds accruing to the Grand Lodge.
Before offering the supplemental insurance program at issue
in this case, the Grand Lodge provided each Mason a $500
benefit, payable to a surviving beneficiary upon a Mason’s
death. This death benefit was paid from the Grand Lodge’s
“Benevolence Fund,” which was funded primarily by the Masons’
annual dues. Benevolence Fund monies were held in trust by the
Grand Lodge and were to be used for the purpose of paying death
benefits to beneficiaries.
5
In late 2001 or early 2002, Chambers met Wilcher at a
conference where they discussed the prospect of developing a
supplemental insurance program for the Grand Lodge. Chambers
told Wilcher that any such program would have to satisfy certain
requirements, to wit: (1) every Mason had to be able to qualify
without, or with only a modest, physical examination; (2) issued
policies had to be whole life; and (3) the premium structure had
to allow for payment by both the insured Mason and the Grand
Lodge.
Unable to implement Chambers’s concept, Wilcher introduced
Chambers to Souder. Chambers and Souder met in Atlanta several
times to discuss the program. On or about May 16, 2002, Souder
spoke with Jayne Silven, a vice president serving special
insurance markets for American Heritage Life Insurance Company
(“American Heritage”), about the insurance program. As Souder
described the program to Silven, the Grand Lodge would own the
individual policies and be responsible for collecting premiums
from the Masons. Masons under the age of 65 would be eligible
for $25,000 of coverage, while those aged 65 to 75 could obtain
$10,000 in coverage. Any death benefit paid on $25,000 policies
6
would be split between the insured’s beneficiary and the Grand
Lodge. 2
After conducting due diligence, American Heritage agreed to
underwrite the insurance program. In its final form, the
program provided that the Grand Lodge would receive $15,000 of
any death benefit paid under a $25,000 policy, with the
beneficiary designated by the Mason receiving the $10,000
balance.
Chambers convened a special session meeting of the Grand
Lodge at its headquarters in Durham, North Carolina on May 25,
2002, where he announced the new insurance program to the Grand
Lodge’s regional directors, deputy wardens, and some rank and
file Masons in attendance. Many of the attendees were there in
a representative capacity, sent to gather information about the
program to disseminate to their respective local lodges.
Several hundred Masons attended the May 25 meeting, along
with more than a hundred members of the Grand Lodge’s sister
organization, the Order of the Eastern Star. Chambers explained
that the program would supplement the death benefits offered
2
At trial, several witnesses described this type of split
beneficiary arrangement as a “legacy” program, which is commonly
used in the insurance industry as a funding mechanism for
charitable organizations.
7
through the Benevolence Fund and encouraged Masons to apply.
Souder described the program as a voluntary plan providing a
$10,000 death benefit to the beneficiary of the Mason’s choice.
Souder also provided a written summary of the program that
listed the $10,000 benefit amount and advised the Masons that
they would have to pay $5.50 per week for the coverage, with the
Grand Lodge paying the entire premium for the first quarter that
the individual policies were in place, and thereafter providing
a weekly $3.00 subsidy for each Mason’s policy. At the meeting,
some Masons expressed concern about the impact of the new
program on the Benevolence Fund, but Chambers disclaimed any
intent to use money from the Fund to pay premiums for the
insurance program.
Chambers told those present at the meeting that the Grand
Lodge would be the owner of the policies, would maintain the
policies, and would issue certificates to Masons choosing to
participate in the program. However, neither Chambers nor
Souder disclosed that the program they were contemplating would
also provide a $25,000 policy option that would partially
benefit the Grand Lodge. To the contrary, Chambers
affirmatively represented that the Grand Lodge would not benefit
from the program. In response to an inquiry as to whether the
Grand Lodge would receive any portion of the $10,000 death
8
benefit, Souder stated that each Mason would determine his
beneficiary and “[t]hat person will receive the $10,000.” J.A.
2900 (transcript of tape recording of May 25, 2002 meeting).
Chambers added, “[I]f you want to make the Grand Lodge the
beneficiary, we get the $10,000.” Id.
On June 4, 2002, ALGA and American Heritage signed a formal
letter of intent to issue $10,000 and $25,000 policies. ALGA
also engaged a second insurance company, Presidential Life
Insurance Company (“Presidential Life”), to provide $10,000
insurance coverage for those Masons who failed to qualify for
American Heritage policies. Although disputed by the
Defendants, the government’s evidence showed that at the time of
the May 25 special session meeting, American Heritage was the
only insurance company then being solicited by the Defendants to
provide coverage to the Masons.
On June 15, 2002, after ALGA and American Heritage signed a
letter of intent to provide insurance coverage--to include
$25,000 split beneficiary policies--Chambers presented the
program to the executive committee of the Order of the Eastern
Star. Again, Chambers did not disclose that the Grand Lodge
would be a partial beneficiary on any $25,000 policies issued,
although he briefly mentioned that the Grand Lodge expected to
9
obtain some return on the program if there was sufficient
participation. 3
Following these meetings, various regional and local lodge
meetings were held around the state to inform Masons about the
availability of the supplemental insurance program and to
explain its benefits. From June 2002 to August 2003, between
six and seven hundred Masons across the state applied for
insurance coverage through the program; approximately three
hundred $25,000 policies were issued and approximately three
hundred and fifty $10,000 policies were issued.
ALGA was responsible for administering the program and
processing the insurance applications. Each of the Defendants
participated in teleconferences discussing the manner in which
ALGA would process Mason applications. During one such
teleconference, Defendant Elliott stated “[t]hat the agents
[processing the applications] should not disclose the face
amount of the policy to the applicants.” Id. 1015.
Souder and Gloria Giles, the assistant vice president of
training and development at ALGA, trained the policy writing
3
According to Chambers, this return would come in the form
of unspecified “residuals” that would flow back to the Grand
Lodge.
10
agents, both in person at ALGA’s offices in Atlanta and via
teleconference. Giles, who reported directly to Souder,
instructed agents not to complete the application fields
relating to the face amount of the death benefit or the
beneficiary designation. Agents were directed to deliver the
signed applications to Souder’s attention at ALGA. ALGA would
then determine the face amount of the death benefit, calculate
the premium, and name the Grand Lodge as a beneficiary for
Masons who qualified for $25,000 policies.
When a Mason applied for insurance under the program, he
also signed a “Required Disclosure Statement for Accelerated
Benefit Rider,” (“Rider”) which informed the Mason that he might
be eligible for an advance of a percentage of the death benefit,
in the event he was diagnosed with a terminal illness. The
Riders also contained a generic statement that “The minimum face
amount of a policy that this rider may be attached to is
$25,000.” The Riders, however, were attached to all
applications, only some of which resulted in the issuance of
$25,000 policies. Further, the Riders did not alert Masons that
the Grand Lodge would be a beneficiary on $25,000 policies.
After issuing the policy, American Heritage delivered it to
ALGA, which then sent it to Chambers and Elliott along with a
request that the Grand Lodge remit the premium payment. The
11
Grand Lodge did not forward policies to insured Masons but
instead retained them in its files. However, to provide insured
Masons with some evidence of their arrangement with the Grand
Lodge, Elliott and Chambers, with the assistance of Gloria Giles
at ALGA, prepared certificates of insurance that (1) listed the
name of the Mason’s designated beneficiary, (2) identified the
Grand Lodge as the owner of the policy, (3) represented that the
Mason was entitled to a $10,000 death benefit, and (4) advised
the Mason that his share of the monthly insurance premium was
$22.00. The certificates did not, however, disclose the face
amount of policies issued for $25,000, did not reflect that the
Grand Lodge was a beneficiary of those policies, and listed a
uniform “policy number” (79647) that did not match the
individual Mason’s policy number. 4 Chambers and Elliott signed
the certificates and mailed them to participating Masons. 5
At the annual Grand Lodge meeting in October 2003, Chambers
and Elliott represented in writing that the supplemental
insurance program was a success and that it provided a $10,000
4
This number instead referred to the uniform billing number
created by ALGA.
5
The misrepresentations and omissions contained in the
certificates of insurance underpinned the government’s nine-
count indictment alleging mail fraud.
12
benefit to participating Masons. Chambers and Elliott did not
then disclose that some Masons had been insured for $25,000
without their knowledge or that the Grand Lodge was a
beneficiary of such policies.
In 2003, Chambers was defeated in his bid for re-election
as Grand Master. The new Grand Lodge leadership terminated the
insurance program, after discovering that the Grand Lodge had
paid over $300,000 in premiums, a portion of which was funded
through the Grand Lodge’s Benevolence Fund. Individual Masons
paid over $50,000 in insurance premiums. Moreover, only one
insured Mason died during the time the program was in operation,
and his claim for benefits was denied.
At trial, several Masons testified that they were unaware
they had been insured for $25,000 or that the Grand Lodge was a
beneficiary of their policies. The certificates of insurance
also lulled some Masons into believing they had a $10,000
insurance policy with a single beneficiary, when in fact they
were insured for $25,000 with the Grand Lodge as a partial
beneficiary.
A jury convicted Souder, Chambers, and Elliott of the nine
counts of mail fraud charged in the first indictment. The
district court heard argument on the Defendants’ joint post-
verdict motion for judgment of acquittal and found the
13
government’s evidence insufficient as a matter of law to sustain
the verdicts. Accordingly, the district court granted the
Defendants’ motion and also conditionally granted a new trial.
II.
A.
The government first contends that the district court erred
in entering judgment of acquittal on the mail fraud counts. We
agree and reverse.
We review a district court’s grant of a judgment of
acquittal de novo, assessing whether, taking the evidence in the
light most favorable to the government, “a rational trier of
fact could have found the essential elements of the charged
offense beyond a reasonable doubt.” United States v. Singh, 518
F.3d 236, 246 (4th Cir. 2008). A conviction for mail fraud
under 18 U.S.C. § 1341 requires the government to prove “the
existence of a scheme to defraud, and [] the use of the mails
for the purpose of executing the scheme.” United States v.
Godwin, 272 F.3d 659, 666 (4th Cir. 2001). The government must
also prove that each defendant acted with specific intent to
defraud. Id. A scheme or artifice to defraud must employ some
material misrepresentation or concealment of fact. See, e.g.,
United States v. Harvey, 532 F.3d 326, 333 (4th Cir. 2008).
14
Common-law fraud arises not just from a failure to disclose
material information pursuant to a fiduciary, statutory, or
other legal duty, but “ ‘includes acts taken to conceal, create a
false impression, mislead, or otherwise deceive in order to
prevent the other party from acquiring material information.’ ”
United States v. Gray, 405 F.3d 227, 235 (4th Cir. 2005)
(quoting United States v. Colton, 231 F.3d 890, 898 (4th Cir.
2000)).
The government contends the evidence of the Defendants’
conduct with respect to the Grand Lodge insurance program was
sufficient to sustain the mail fraud convictions. In
particular, the government points to evidence tending to show
that the Defendants (1) failed to disclose at the May 25, 2002
meeting that the supplemental insurance program then being
contemplated would include policies providing $25,000 in
insurance coverage with a partial benefit to the Grand Lodge;
(2) continued to misrepresent the terms of the program in
subsequent discussions with Masons, including members of the
Grand Lodge’s leadership; (3) directed ALGA agents to omit the
policy amounts and beneficiary designations on applications
submitted by participating Masons; (4) created certificates of
insurance for mailing to participating Masons that did not
accurately represent the actual policy amounts and failed to
15
disclose that the Grand Lodge would be a partial beneficiary on
policies issued for $25,000; and (5) deprived both the Grand
Lodge and individual Masons of the money used to fund the
premium payments for the program.
As they did at trial, the Defendants contend that the
government improperly “create[d] a crime” from the Defendants’
mismanaged efforts to create an insurance program designed to
benefit both the Grand Lodge and its members. Appellee’s Br. 3.
The Defendants maintain that the $25,000 policies that are the
crux of the government’s case had not yet been approved by
American Heritage at the time of the May 25, 2002 meeting and,
thus, the Defendants could not have materially misrepresented
the terms of those policies. Although the Defendants do not
dispute that certificates of insurance were prepared and mailed
to participating Masons, they contend that the documents served
only to provide Masons with proof that they were insured and
that their named beneficiary would receive a $10,000 benefit.
According to the Defendants, the Masons were otherwise aware of
the full scope of the insurance program implemented by the Grand
Lodge.
B.
In granting the motion for judgment of acquittal, the
district court concluded that “the Government failed to present
16
substantial evidence, or any evidence for that matter, of any
material misrepresentation or omission made by Defendants with
regard to or in furtherance of a scheme to defraud the Grand
Lodge and its members.” J.A. 2859. Viewing the evidence in the
light most favorable to the government, we find the district
court’s conclusion at odds with the record.
The district court first concluded that statements made by
the Defendants at the May 25, 2002 meeting were not
misrepresentations as to the existence of a $25,000 policy that
would benefit the Grand Lodge because “negotiations between
Atlanta Life and American Heritage [regarding issuance of
$25,000 policies] were not complete until June 4, 2002.” Id.
2833. On this issue, however, the district court failed to
credit the government’s evidence tending to show that the
Defendants’ intent from the inception of the program was, at
least in part, to benefit the Grand Lodge directly. To that
end, the evidence showed that Souder pitched the program to
Jayne Silven on May 16 or 17, 2002 as one where the Grand Lodge
would own any policies issued and would be a partial beneficiary
on certain policies. This discussion predated the May 25, 2002
meeting at which Chambers and Souder denied that the Grand Lodge
stood to benefit from the program. Considering the evidence as
a whole and drawing all inferences in favor of the government, a
17
rational jury could conclude that Chambers’s and Souder’s
failures to inform the Masons at the May 25 meeting of the
specifics of the insurance program then being contemplated,
coupled with Chambers’s statements that the Grand Lodge would
not benefit from the program, were material misrepresentations.
Further, the jury heard evidence that Chambers provided a
summary to the Executive Committee of the Eastern Star on June
15, 2002--after American Heritage had agreed to underwrite the
$25,000 split benefit policies--where he again failed to mention
that the Grand Lodge stood to benefit from the program. The
jury heard additional evidence that Chambers and Elliott made
written representations to Masons at the Grand Lodge annual
meeting in October 2003 that the program was a success and
provided a $10,000 benefit, but again omitted any reference to
the $25,000 policies for which the Grand Lodge was a
beneficiary. Finally, several members of the Grand Lodge
executive committee testified that they were unaware that the
Grand Lodge was a beneficiary on issued $25,000 policies.
Moreover, even if we were to accept the district court’s
view that the Defendants’ failure to discuss the details of the
proposed $25,000 policy program at the May 25 meeting was not a
material omission of fact because such a program had not yet
been finalized, the government presented other evidence that a
18
rational jury could have accepted as sufficient to convict on
the mail fraud counts. In particular, the district court failed
to credit the government’s evidence tending to show that the
Defendants directed ALGA agents to omit the face amount of the
policy and the identity of the beneficiary on applications
submitted by Masons, and that, at least in some instances,
policies were issued that insured Masons for $25,000 and named
the Grand Lodge as a partial beneficiary without the knowledge
of the insured.
The Defendants posit an innocent explanation for this state
of affairs, contending that the face amount of the policy could
not be established at the time of the application, because the
ultimate amount of coverage depended on underwriting variables
related to each insured. That explanation, however, does not
fully address the government’s contention that Masons were never
told that they could be approved for $25,000 in insurance
coverage, or that a portion of that coverage would inure to the
benefit of the Grand Lodge. Regardless, in apparently crediting
the Defendants’ explanations for their actions, the district
court failed to recognize that the jury was free to assess the
evidence and to resolve any contradictions against the
Defendants.
19
As for the certificates of insurance that the Defendants
prepared, signed, and mailed to individual Masons, a rational
jury could have concluded that they were created for deceptive
purposes, contrary to the district court’s conclusion and the
Defendants’ argument on appeal. As we have already noted, the
certificates were inaccurate in key respects, insofar as they
omitted the face amount of the policies for those Masons who had
been insured for $25,000 and did not reflect that the Grand
Lodge was a beneficiary of those policies. We are also
satisfied that a rational jury could conclude that these
omissions were material. Indeed, the government presented
testimony from a number of Masons that they never intended to
purchase $25,000 policies that would benefit the Grand Lodge and
that the certificates misled them about the true nature of the
transactions.
The district court also concluded that the Riders signed by
each Mason sufficiently alerted those applying for insurance
that they might qualify for a $25,000 policy. But while it is
true that each Rider included a generic statement that the
minimum face amount of the policy to which it could be attached
was $25,000, the evidence also showed that (1) the Riders were
attached to all applications, only some of which resulted in the
issuance of $25,000 policies, and (2) the Riders did not alert
20
Masons that the Grand Lodge would be a beneficiary on at least
some of the policies. Thus, a rational jury could have
concluded that the Riders did not provide the type of notice
that the district court ascribed to them.
The district court also determined that “the Government
presented no evidence to support a jury finding that any of the
Defendants acted with the specific intent to defraud the Grand
Lodge and its members of something of value.” Id. 2860. Here
again, we find the district court failed to give proper weight
to the government’s evidence tending to show that (1) the
Defendants had reached an agreement in principle with American
Heritage--before the May 25, 2002 meeting--to offer Masons
$25,000 policies that would partially benefit the Grand Lodge;
(2) the Defendants’ agents intentionally procured the signatures
of Masons on insurance applications without including the face
amount of the policy or the identity of the Grand Lodge as a
beneficiary; (3) some applications were processed so as to
provide Masons who qualified with $25,000 in coverage and name
the Grand Lodge as a partial beneficiary without the insured’s
knowledge or consent; and (4) Masons within the Grand Lodge’s
leadership, as well as rank and file members, were unaware that
the program was issuing $25,000 policies that in part benefitted
the Grand Lodge. Moreover, the government easily satisfied its
21
burden to show that the Defendants wrongfully deprived the Grand
Lodge and its members of something of value in the form of the
premium payments tendered by these parties.
In sum, viewing the evidence in the light most favorable to
the government, “a reasonable jury could conclude that the
defendants engaged in a scheme to defraud, and that they carried
it out by use of the mails,” Godwin, 272 F.3d at 667.
Accordingly, we reverse the district court’s grant of the
Defendants’ post-verdict motion for judgment of acquittal.
III.
The government next asserts that the district court erred
in conditionally granting a new trial. Applying the more
deferential standard of review applicable to this issue, we
affirm.
We review a district court’s grant of a new trial for abuse
of discretion. Singh, 518 F.3d at 249. The district court may
order a new trial if the evidence weighs so heavily against the
verdict that to deny a new trial would be contrary to the
“interest of justice.” See Fed. R. Crim. P. 33(a); United
States v. Campbell, 977 F.2d 854, 860 (4th Cir. 1992).
Although the decision to grant a new trial lies within the
discretion of the district court, respect for the role of the
22
jury demands that a court exercise this discretion “sparingly,”
United States v. Smith, 451 F.3d 209, 217 (4th Cir. 2006), i.e.,
only when “the evidence weighs so heavily against the verdict
that it would be unjust to enter judgment.” United States v.
Arrington, 757 F.2d 1484, 1485 (4th Cir. 1985). Nevertheless,
in contrast to the limitations imposed on a trial court when
considering a motion for judgment of acquittal, the court may
consider the credibility of witnesses and need not view the
evidence in the light most favorable to the government in
determining whether to grant a new trial. Campbell, 977 F.2d at
860.
At the outset, we reject the government’s contention that
the district court improperly granted a new trial for the same
reason it erroneously granted a judgment of acquittal: that the
evidence was insufficient to support the verdicts. There is of
course a difference in degree and kind between a trial court’s
decision to grant a motion for judgment of acquittal and its
decision to award a new trial. In assessing the former, the
trial court must find that the evidence was legally insufficient
to support the conviction (i.e., that no rational jury could
have voted to convict on the government’s evidence); as to the
latter, the trial court may grant relief if it determines that
the evidence--even if legally sufficient to convict--weighs so
23
heavily against the verdict that it would be unjust to enter
judgment. See id.
As a result, our cases hold that if the evidence is legally
sufficient to affirm a criminal conviction, a trial court abuses
its discretion when, without further explanation, it grants “a
new trial based on its finding that the evidence was
insufficient to support the verdict.” United States v. Wood,
340 F. App’x 910, 911 (4th Cir. 2009). In this vein, the
government argues here that “the same factors that the judge
considered in granting the judgment of acquittal apparently
provided the basis for its grant of a new trial,” and thus “the
fundamental error that tainted the district court’s decision to
grant a judgment of acquittal also tainted its decision to grant
a new trial.” Appellant’s Br. 56-57.
Pressing its point further, the government analogizes the
instant case to Singh and United States v. Wilson, 118 F.3d 228
(4th Cir. 1997). In Singh, however, we reversed a judgment of
acquittal and the grant of a new trial for a corporate
defendant, finding with respect to the latter that “the evidence
. . . did not at all weigh heavily against the verdict . . . but
was wholly sufficient to support it.” 518 F.3d at 250. The
district court’s error, we concluded, rested on its erroneous
determination that the criminal conduct of the defendant’s agent
24
or employee could not be imputed to the defendant. Id. at 251.
This error, we held, tainted the district court’s analysis with
respect to the judgment of acquittal and the grant of a new
trial. Id. In this case, however, the district court did not
commit the type of foundational legal error that compelled us to
reverse in Singh. Rather, “we interpret the district court’s
ruling as a finding that the verdict was against the cumulative
weight of the evidence[, which] is a proper ground upon which to
grant a new trial.” Campbell, 977 F.2d at 860 n.6.
In Wilson, we reversed a judgment of acquittal and affirmed
a denial of a motion for a new trial. We held there that
because “abundant evidence support[ed] the jury’s verdict,” the
district court did not abuse its discretion in denying a motion
for a new trial based on the weight of the evidence. 118 F.3d
at 237. Contrary to the government’s suggestion, however,
Wilson does not hold that a trial court is foreclosed from
granting a motion for a new trial in every case where the
evidence is legally sufficient to support a jury’s verdict. And
while Wilson teaches that “a district court should exercise its
discretion to grant a new trial ‘sparingly’ and that the
district court should grant a new trial based on the weight of
the evidence ‘only when the evidence weighs heavily against the
verdict,’ ” id., we evaluate such a ruling against the backdrop
25
of the district court’s “broad power” to independently weigh the
evidence when considering such a motion, as well as the
deferential standard of review we must apply to that decision,
Arrington, 757 F.2d at 1485.
Although the district court’s memorandum opinion could have
been clearer on the point, we are satisfied that the able and
experienced trial judge presiding over this case understood the
extent, and limits, of his discretion in considering the motion
for a new trial. And while the trial court erred by drawing
inferences unfavorable to the government with respect to the
Defendants’ motion for acquittal, it was under no such
constraint when considering whether the verdicts were against
the cumulative weight of the evidence.
In that regard, the district court noted that only a few
hundred of the over 18,000 members of the Grand Lodge were
present at the May 25, 2002 meeting where, according to the
government, the Defendants first planted the seeds of deception
with respect to the supplemental insurance program. Indeed, the
vast majority of the Masons received information about the
program through regional and local lodge meetings held around
the state at which the Defendants were not present.
Moreover, three Masons called by the government testified
that they understood the program offered $25,000 policies or
26
that those policies had a split benefit provision where some
portion of the death benefit would be paid to the Grand Lodge.
The Defendants also called four additional Masons, who testified
that they too were aware of the $25,000 split benefit policies
and understood that the Grand Lodge would receive some portion
of the death benefit from the policies. On the strength of this
evidence, the district court, now considering the record
pursuant to Rule 33, opined that the government’s “evidence with
regard to material omissions was based on the recollections of
Masons who attended meetings regarding the [insurance program],
some of whom testified to having knowledge of the very facts
that the Government contends the Defendants materially omitted
or concealed [from Grand Lodge members].” J.A. 2859-60.
The testimony of government witness James Lightfoot
provides a stark example of the confusion endemic among the
Masons regarding the specifics of the insurance program.
Lightfoot attended the May 25, 2002 meeting that the government
portrays as the genesis of the scheme to defraud. Lightfoot,
however, insisted at trial that Chambers told those present that
the program would include a split beneficiary arrangement to
partially benefit the Grand Lodge, but that Chambers backpedaled
on this aspect of the program after several Masons voiced
objections. Lightfoot did not recall, however, hearing Chambers
27
tell those assembled that the Grand Lodge would own the
policies.
The government’s evidence at trial included a transcript of
the 25 May meeting, which was produced from an audio recording.
Tellingly, the transcript does not corroborate Lightfoot’s view
as to what Chambers purportedly said regarding the split
beneficiary arrangement, although it confirms what Chambers said
(and Lightfoot could not remember) about the ownership of the
policies. Our point here is this: We cannot say the district
court abused its discretion when--in considering whether the
verdicts were against the cumulative weight of the evidence--it
questioned precisely what Masons were told, or remembered some
six years later, regarding the particulars of the supplemental
insurance program.
The district court also placed great weight on the Riders
attached to each insurance application, which contained a
declaration that the minimum face amount of the policy to which
they may be attached was $25,000. The district court found that
the Riders supported the view “that there was widespread
knowledge among the members of the Grand Lodge’s offering of
$25,000 policies.” Id. 2836. While the district court erred in
drawing such an inference on the motion for judgment of
28
acquittal, it was entitled to weigh this evidence as it saw fit
when determining whether to grant a new trial.
Further, the record is unclear as to precisely which
policies were available to Masons, as opposed to merely
contemplated or agreed upon in principle, at the time of the May
25, 2002 meeting. The district court concluded that only
$10,000 policies were available for issuance at that time and
thus the Defendants could not have misrepresented any facts at
the May 25 meeting related to $25,000 policies that had not yet
been approved. Here again, we can discern no abuse of
discretion in such a determination by the district court.
The district court further accepted as credible the
Defendants’ explanation that agents were instructed to leave
blank the “amount of insurance” field on a Mason’s application
because the underwriters could determine the actual amount of
coverage only upon review of a completed application. Regarding
the certificates of insurance issued by the Grand Lodge that the
government argued served to perpetuate the fraud, the district
court concluded instead that Chambers and Elliott did not
specifically intend to defraud their fellow Masons, but rather
asked ALGA to help them respond to the requests of individual
Masons by creating a document that would “serve as proof to the
members of their death’s benefit [sic]” and “reflect the
29
relationship between the Grand Lodge and its members.” Id.
2839. In that regard, the district court found “that the
information contained in the certificates is correct and
accurately represents the information that had been conveyed to
the members” regarding the Grand Lodge’s ownership of the
policies, the Mason’s $10,000 death benefit, the Mason’s
designated beneficiary, and the Mason’s monthly premiums. Id.
2839-40. The government understandably infers something
entirely different from this evidence, but it bears repeating
that on a motion for a new trial, it is the district court’s
prerogative to draw its own inferences, Campbell, 972 F.2d at
860. 6
Finally, Chambers and Souder testified at trial and denied
any intent to conceal the particulars of the insurance program
or to defraud the Grand Lodge or its members. Rather, they
contended their intent, even if poorly executed, was “to create
an insurance program that would inure to the benefit, and not
6
The government criticizes the district court for not
providing a point-by-point rebuttal of its evidence regarding
the alleged scheme or artifice to defraud. Perhaps so, but we
are unaware of any law requiring the level of detail that the
government insists on. We are satisfied that the district court
gave sufficient and careful consideration to all of the evidence
in this case before determining that the verdicts were against
the greater weight of that evidence.
30
the deprivation, of the Grand Lodge and its members.” J.A.
2843. Although not an express point of emphasis in the district
court’s memorandum opinion, it seems clear that the district
court chose to credit the Defendants’ innocent explanations for
their actions over the sinister interpretation posited by the
government. And while the government would wish it otherwise,
it is precisely this kind of credibility determination that is
the trial court’s call to make on a motion for a new trial.
At bottom, in urging reversal of the district court as to
this issue, the government would have us ignore the standard we
are bound to apply on appeal. While reasonable judges might
view this record differently if allowed to consider it in the
first instance, and we have nothing but the utmost respect for
the jury that considered this difficult matter over thirteen
days, we cannot say that the district court abused its
discretion in holding that the evidence weighed so heavily
against the verdicts so as to warrant a new trial. See, e.g.,
Evans v. Eaton Corp. Long Term Disability Plan, 514 F.3d 315,
322 (4th Cir. 2008) (“At its immovable core, the abuse of
discretion standard requires a reviewing court to show enough
deference to a primary decision-maker’s judgment that the court
does not reverse merely because it would have come to a
different result in the first instance.”).
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IV.
For the foregoing reasons, we reverse the district court’s
judgment of acquittal, affirm the conditional grant of a new
trial, and remand to the district court for further proceedings.
AFFIRMED IN PART,
REVERSED IN PART,
AND REMANDED
32