United States v. Carr

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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No. 95-30130
Summary Calendar
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UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

JEFFREY B. CARR,

Defendant-Appellant.

______________________________________________

Appeal from the United States District Court for the
Eastern District of Louisiana
(94-CR-191-ALL)
______________________________________________
(October 10, 1995)

Before KING, SMITH, and BENAVIDES, Circuit Judges.

PER CURIAM:*

Jeffrey B. Carr was convicted of conspiracy to manufacture,

sell, and distribute prohibited electronic communication

intercepting devices. 47 U.S.C. § 605(e)(4); 18 U.S.C. § 2. He

also was convicted of substantive violations of § 605(e)(4). He

appeals, arguing that there was a fatal variance between the

*
Local Rule 47.5 provides: "The publication of opinions that
have no precedential value and merely decide particular cases on
the basis of well-settled principles of law imposes needless
expense on the public and burdens on the legal profession."
Pursuant to that Rule, the Court has determined that this opinion
should not be published.
indictment and the proof, that § 605(e)(4) is unconstitutionally

vague, and that the district court erred in calculating his offense

level. Finding no error, we affirm.

I. PROCEDURAL HISTORY

Carr and two other individuals, Jerry McCarter and Jeff Mayes,

were the principal officers of Video Marketing Services, Inc.

(VMS), each holding one-third of the issued stock in that company.

The company manufactured devices that could be used for lawful text

delivery or, with some modification, for the unlawful purpose of

decryption of satellite cable programming. On July 1, 1994, Carr

and three codefendants (Ronald MacDonald, William Hunter, and Mike

Hunter) were charged in a seven-count indictment with conspiracy

and distribution of prohibited electronic communication

intercepting devices. After a jury trial, Carr was convicted of

all five of the counts in which he was charged. The district court

sentenced Carr to 40 months imprisonment and three years supervised

release on each of the five counts, the sentences to run

concurrently. Carr appeals.

II. FATAL VARIANCE

Carr contends that there was a fatal variance between the

allegations in the indictment and the evidence presented at trial.

In reviewing a claim of fatal variance, this Court reverses only if

the evidence at trial varied from the allegations of the indictment

and the variance prejudiced the defendant's substantial rights.

United States v. Faulkner, 17 F.3d 745, 760 (5th Cir.), cert.

denied, __ U.S. __, 115 S.Ct. 193 (1994). Substantial rights are

affected if the defendant is surprised at trial or placed in risk

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of double jeopardy. United States v. Robinson, 974 F.2d 575, 578

(5th Cir. 1992). Even assuming that Carr shows a variance between

the indictment and the proof at trial, he has failed to establish

that his substantial rights were violated.

Count 1 of the indictment alleged that, beginning at a time

unknown but prior to 1993, and continuing through September 1993

Carr and other conspirators, named and unnamed, conspired to

manufacture, sell, and distribute electronic devices (hereinafter

referred to as VMS devices), knowing that the devices were

primarily used in the unauthorized decryption of satellite cable

programming. The indictment charged that the conspirators carried

out the conspiracy by marketing the devices through a sham "Sales

and Network Agreement" wherein distributors for VMS warranted that

the devices would be sold only as a lawful text-delivery system.

The indictment charged that by means of this sham agreement, VMS

had a fraudulent protective shield with which to disclaim knowledge

of and liability for the use of its devices in the unlawful

decryption of satellite cable programming. Counts 4 through 7, the

substantive counts, charged that on six occasions Carr sold and

distributed the VMS devices, knowing that the devices were

primarily of assistance in the unauthorized decryption of satellite

cable programming.1

Carr asserts that the evidence at trial shows that there was

a legitimate use for the VMS device -- text delivery. He contends

that the evidence showed that he was aware of the potential for

1
Counts 2 and 3 charged Carr's three coconspirators, but not
Carr, with similar substantive acts.

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consumers to use the device for illegally descrambling satellite

television signals and that, because of this, VMS placed warning

seals on all of its devices cautioning the users that the device

was intended for text delivery only, that any other use would be

illegal, and that the breaking of the seal would invalidate the

warranty on the device.

Carr argues that although the Government offered some evidence

that he had violated the antidecryption statute, there remains a

fatal variance because he did not commit the violations in the

manner alleged in the indictment. Carr argues that the Government

asserted in the indictment that he and his coconspirators had

accomplished their sales of the VMS device through "a sham `Sales

and Network Agreement' wherein VMS distributors apparently

warranted that the VMS devices would be sold only as a lawful text

delivery system."2 He argues that the evidence at trial, however,

showed that the "Sales and Network Agreements" were not shams but

were in fact created at the suggestion of VMS's Jerry McCarter

after he contacted an attorney about how to market the devices.

Carr contends that if the sales agreements were not the ways and

2
The entire "ways and means" section of the indictment provides
as follows:

Among the ways and means by which the defendants and
their coconspirators carried out the conspiracy was to
market the VMS devices through a sham "Sales and
Network Agreement" wherein VMS distributors apparently
warranted that the VMS devices would be sold only as a
lawful text delivery system. By means of this
Agreement, VMS had a fraudulent protective shield with
which to disclaim knowledge of and liability for the
use of its devices in the unlawful decryption of
satellite cable programming.

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means of carrying out the illegal distribution of the VMS devices,

as the indictment alleged, then Carr was not guilty of the charges

in the indictment.

The evidence showed that at least one of the three founders of

VMS, Jerry McCarter, believed that VMS was in fact established to

manufacture and sell the VMS devices solely for the legal purpose

of "delivering text" onto a television screen.3 McCarter testified

that he was aware that the VMS device could be used to pirate

satellite programming and that that was why the company placed the

warnings on the devices stating that they were to be used for text

delivery only. There was also testimony, however, that, whatever

McCarter's intentions were, Carr intended that the text delivery

application of the VMS device be used only as a cover for the more

marketable use of the device -- decryption of satellite cable

transmissions.

Peter Hoban testified that, before purchasing the VMS system

from one of VMS's distributors, he talked to Carr over the phone

about how the VMS device was capable of unscrambling the "wizard

codes" that protected satellite programming from being pirated.

Another witness testified that Carr told him that he had travelled

to Canada to obtain the wizard codes from the data stream that came

off of a certain satellite. Hoban testified about a meeting at his

fishing camp attended by Carr and one of his coconspirators, Bill

3
McCarter believed that the VMS device could be used somehow in
combination with outdated satellite dishes and modems to allow a
person to receive text on their television screen using only his
remote control. The viewer could then switch back and forth
between normal television and text delivery simply by pressing a
button on the remote control.

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Hunter, at which the three discussed satellite piracy while Carr

installed the VMS device into the Hoban's computer. Hoban

testified that, while at the camp, Carr explained to him how the

descrambling technology worked. Subsequent to Carr's installing

the wizard codes into the host computer at Hoban's camp, Hoban

testified that he purchased approximately 1000 VMS devices from VMS

and sold them to consumers for the purpose of unscrambling

satellite programming signals. Without the wizard codes installed

by Carr into Hoban's host computer, the VMS devices purchased by

Hoban and sold to home consumers could not have been used to

unscramble the programming signals.

Based on the evidence presented, the Government proved the

elements of the crimes alleged in the indictment. It established

that Carr conspired with at least Bill Hunter, Dana Lefever, and

Peter Hoban to distribute VMS devices for the purpose of illegally

descrambling satellite programming signals. Although the

indictment alleged that Carr conspired with three other individuals

(Ron MacDonald, William Hunter, and Mike Hunter) to commit the

aforementioned acts, the indictment also states that Carr conspired

with others, "named and unnamed." This Court has "held on numerous

occasions that a defendant's conspiracy conviction can be upheld

even if all other alleged coconspirators tried with him are

acquitted, so long as the indictment alleges other named or unnamed

coconspirators and there is sufficient evidence of a conspiracy

involving these other individuals who were not tried with the

defendant." Faulkner, 17 F.3d at 768 n. 35. Additionally,

although Jerry McCarter may not have viewed the "Sales and Network

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Agreements" as a sham, the evidence indicated that Carr viewed them

as a convenient cover for the illegal business. The indictment

alleged as much. Accordingly, Carr has not show that the

indictment failed to inform him adequately of the charges against

him to such an extent that he could not prepare his defense. See

United States v. Thomas, 12 F.3d 1350, 1357 (5th Cir.), cert.

denied, __ U.S. __, 114 S.Ct. 1861 (1994). Nor has Carr shown that

he faces a risk of a second prosecution for the same offenses. See

id. Because Carr's substantial rights were not affected, his claim

of variance cannot be fatal. Carr is not entitled to relief on

this claim.

III. UNCONSTITUTIONALLY VAGUE

Carr next contends that the anti-decryption statute under

which he was charged and convicted is unconstitutionally vague and

overly broad. "The void-for-vagueness doctrine requires that a

penal statute define the criminal offense with sufficient

definiteness so that an ordinary person may understand what conduct

is actually prohibited." United States v. Tansley, 986 F.2d 880,

885 (5th Cir. 1993). A reasonable degree of certainty, however, is

all that is required. Id. Further, one who is bent on wrongdoing

may not use the fair notice requirement as a shield. Id.

In pertinent part, 47 U.S.C. § 605(e)(4) provides that "[a]ny

person who manufactures, assembles, modifies, imports, exports,

sells, or distributes any electronic, mechanical, or other device

or equipment, knowing or having reason to know that the device or

equipment is primarily of assistance in the unauthorized decryption

of satellite cable programming" shall be subject to fines and

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imprisonment. This Court previously has addressed a constitutional

challenge to 47 U.S.C. § 605(e)(4). In United States v. Harrell,

983 F.2d 36 (5th Cir. 1993), we held that § 605(e)(4) "specifically

proscribes the surreptitious interception of satellite

transmissions and it is not vague or ambiguous at all." Id. at 39.

Although Carr acknowledges the holding in Harrell, he argues that

it is not controlling because, in that case, the contention was

that the statute did not make clear whether the prohibited conduct

was intended to apply to individual users or only to commercial

cable companies, rendering it void for vagueness. We agree that

while Harrell precludes any facial challenge to the statute, it is

not dispositive of Carr's claim that it is unconstitutional as

applied to him.

Carr argues that whether the equipment was "primarily of

assistance" in the unauthorized decryption of satellite programming

is unconstitutionally vague and overly broad. It is undisputed

that the devices were designed4 to have text legally delivered

through telephone lines and had to be modified before they could be

used to illegally descramble the satellite signals. He further

asserts that although the government's expert testified that the

4
Carr's remaining arguments center on the fact that the device
had to be modified before it could be used to illegally intercept
the signals. Those arguments convince us that 18 U.S.C. §
2512(1)(b) was not applicable to his conduct. Section 2512(1)(b)
makes it a crime to possess an electronic device knowing "that
the design of such device renders it primarily useful for the
purpose of surreptitious interception of wire or oral
communications. . . ." However, he was not convicted of
violating § 2512(1)(b); instead, he was convicted of violating 47
U.S.C. § 605(e)(4). Accordingly, we find the arguments afford
him no relief.

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primary use of the device was to illegally descramble satellite

signals after modification, the expert admitted that the devices

had a legitimate function. He therefore argues that the

application of the statute requires a citizen to guess at his peril

how a legitimate piece of equipment might be misused by a buyer.

Here, however, the evidence overwhelmingly showed that Carr knew

that the devices would be modified so that they could be used to

illegally intercept signals. Indeed, Carr admitted his knowledge

of the intended illegal activity during his testimony. It is

Carr's criminal knowledge, not the criminal intent of the purchaser

of the device, that violates § 605(e)(4). Cf. Tobacco Accessories,

Etc. v. Treen, 681 F.2d 378, 385 (5th Cir. 1982) (intent

requirement in drug paraphernalia statute includes seller, not just

purchaser or manufacturer).

"[V]agueness challenges to statutes which do not involve First

Amendment freedoms must be examined in the light of the facts of

the case at hand. . . . One to whose conduct a statute clearly

applies may not successfully challenge it for vagueness. . . ."

Tansley, 986 F.2d at 886 (brackets and ellipsis in opinion)

(citation and internal quotation marks omitted). We find that §

605(e)(4) clearly applies to Carr's conduct, and, therefore, his

challenge to the vagueness of the statute as applied to him must

fail.

Carr also contends that the statute is overly broad. "A

statute will survive an overbreadth challenge unless it reaches a

substantial amount of constitutionally protected conduct." United

States v. Wicker, 933 F.2d 284, 287 (5th Cir. 1991) (citation and

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internal quotation marks omitted), cert. denied, 502 U.S. 958, 112

S.Ct. 419 (1991). To the extent that an overbreadth problem might

occur in a particular application of § 605(e)(4), such could "be

cured through case-by-case analysis of the fact situations to which

its sanctions, assertedly, may not be implied." Id. at 288

(citation and internal quotation marks omitted). Carr has failed

to show that § 605(e)(4) reaches the requisite constitutionally

protected conduct. We find no merit in Carr's claim that 47 U.S.C.

§ 605(e)(4) punishes actions which are innocent or constitutionally

protected.5

IV. SENTENCING CALCULATION

Carr also contends that the district court erred by enhancing

his offense level by 13 levels based on the total value of the

devices sold. The presentence report (PSR) arrived at the increase

by multiplying the number of VMS devices that VMS sold (39,000) by

5
In the alternative, Carr argues that the district court erred
in denying his request for the following jury instruction:

The term "primarily of assistance" as used in the
statute which I read to you means that the device "as
designed" must render it primarily of assistance for
the illegal intercept of encrypted satellite signals.
A person who designs and distributes a device that is
not primarily of assistance in illegal satellite inter-
ceptions does not violate the statute simply because he
can reasonably anticipate that others might change the
device so as to make it primarily of assistance in
illegal interception.

The requested instruction adds an element (the "as designed"
element) to the statute that does not exist. The district court
therefore did not abuse its discretion in denying the requested
instruction. United States v. Pennington, 20 F.3d 593, 600 (5th
Cir. 1994).

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the retail values of the devices (ranging from $99 to $225). The

PSR therefore estimated the total value to be between $2.5 million

and $5 million. Based on that figure, pursuant to § 2F1.1 of the

guidelines, the PSR recommended increasing Carr's offense level by

13. See § 2F1.1(b)(1)(N). Carr objected to the PSR's

recommendation, asserting that "while there was evidence that VMS

sold approximately 39,000 devices through various distributors

there was no evidence presented that all of the devices were sold

for illegal purposes, much less that all of the unnamed

distributors purchased the devices for illegal use." At the

sentencing hearing, the district court overruled Carr's objection,

finding that "[t]he evidence at trial indicated that the defendant

intended that each of the 39,000 be used for illicit purposes. The

fact that the ultimate end user did or did not use the device in

conformity with the law is not relevant."

On appeal, Carr contends that some of the 39,000 devices sold

by VMS were used for legitimate purposes, presumably text delivery.

He also argues that the number of VMS devices alleged in the

indictment numbered only 77. He argues that the total loss would

thus amount to only between $10,000 and $20,000 and that, under §

2F1.1, his offense level only would have been increased by three

levels instead of 13. Of course, under the relevant conduct

guideline, U.S.S.G. § 1B1.3, the conduct for which the defendant is

sentenced is not limited to the conduct alleged in the indictment.

Moreover, "[a] district court's findings of fact for purposes

of applying the Sentencing Guidelines are reviewed under the

clearly erroneous standard of review." United States v. Hooker,

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997 F.2d 67, 75 (5th Cir. 1993). A factual finding is clearly

erroneous if it is not plausible in light of the record taken as a

whole. Anderson v. City of Bessemer City, 470 U.S. 564, 573-76,

105 S.Ct. 1504, 1511-12 (1985).

In sentencing, the district court may consider any evidence

that has "sufficient indicia of reliability to support its probable

accuracy," including evidence not admissible at trial. § 6A1.3,

comment.; accord United States v. Manthei, 913 F.2d 1130, 1138 (5th

Cir. 1990). The PSR itself bears such indicia. United States v.

Alfaro, 919 F.2d 962, 966 (5th Cir. 1990). At trial, there was

testimony that Carr "knew what the part was being sold for." The

court also heard a tape recording of a conversation between an

undercover agent and Carr related to illegal descrambling devices

in which Carr indicated his willingness to sell the device, and he

also asserted that they had "70,000 boards being updated through

[their] system." The undercover agent explained that he understood

"updating" to mean that they were transmitting wizard codes.

Carr has not met his burden of proving that the information

relied upon by the district court is "materially untrue, inaccurate

or unreliable," and, thus, the district court's determination is

not clearly erroneous. See United States v. Angulo, 927 F.2d 202,

205 (5th Cir. 1991).

Accordingly, the district court's judgment is AFFIRMED.

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