United States v. McClelland

141 F.3d 967, 1998 Colo. J. C.A.R. 1629, 49 Fed. R. Serv. 219, 1998 U.S. App. LEXIS 6903, 1998 WL 159475
CourtCourt of Appeals for the Tenth Circuit
DecidedApril 7, 1998
Docket97-5014
StatusPublished
Cited by15 cases

This text of 141 F.3d 967 (United States v. McClelland) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. McClelland, 141 F.3d 967, 1998 Colo. J. C.A.R. 1629, 49 Fed. R. Serv. 219, 1998 U.S. App. LEXIS 6903, 1998 WL 159475 (10th Cir. 1998).

Opinion

LOGAN, Circuit Judge.

Defendant James K. McClelland appeals his conviction by a jury of causing interstate transportation of securities and moneys knowing they were taken by fraud and inducing interstate travel, in violation of 18 U.S.C. § 2314, and conspiracy, in violation of 18 U.S.C. § 371. Defendant contends (1) that the government’s failure to preserve evidence denied him due process; and that the district court abused its discretion in (2) permitting the government to use evidence belatedly produced to the defense and (3) admitting certain evidence under Fed.R.Evid. 404(b). He further challenges the sufficiency of the evidence to support (4) his conviction for conspiracy to commit fraud, or (5) that he caused interstate travel by the two complaining witnesses. Finally, defendant contends that (6) the district court misapplied the sentencing guidelines.

I

The government’s evidence established that defendant served as president of Viking Communications, Ltd. (Viking), a Chicago-based company that sold telephone equipment to pay telephone service providers. Viking obtained parts and supplies and its technicians then assembled the pay telephones for sale. Among the parts incorporated into these telephones were used GTE circuit boards, the fundamental electronic mechanism of the telephone. Viking advertised its products and services nationally and specifically represented the pay telephones as new GTE equipment.

Triangle Communications (Triangle), an Oklahoma partnership of Jeff Lowry and Joe Beavers, entered into two separate sales contracts with Viking in March 1993 to purchase a total of fifty-five pay telephones. These contracts, which led to defendant’s original indictment, provided for a one-year equipment warranty and delivery within ninety days, although delivery was promised to begin within ten days. By mid-April Viking had shipped only eleven telephones to Triangle. Lowry and Beavers discovered scratches on the equipment and North American Marketing and other stickers inside the telephones, leading them to suspect that the circuit boards and other components in the eleven telephones were not new. In April 1993 they arranged for Sheri Westfall, a GTE representative, and Ron Lovejoy, an owner of pay telephones who also supplied telephone parts and performed repair work, to inspect the Viking telephones. Lovejoy was an authorized supplier of new GTE pay telephones. Both concluded that the circuit boards were used; Westfall photographed the equipment and created an audio tape preserving her observations.

Viking later shipped sixteen more telephones to Triangle; in May 1993 Westfall examined these telephones and also reexamined the original eleven telephones. Westfall concluded that all twenty-seven telephones contained used circuit boards. She again photographed the equipment and recorded her evaluation on an audio tape. After defendant and his employees failed to resolve Triangle’s objections to those twenty-seven telephones, or to deliver or refund payment on the remaining twenty-eight, Lowry and Beavers contacted the Federal Bureau of Investigation (FBI).

Triangle sold twenty-two telephones to Lovejoy in March 1995 because of the financial strain caused by defendant delivering twenty-seven used telephones that were not installed and generating revenue, and Viking’s failure to refund the purchase price paid on the undelivered telephones. Lowry and Beavers testified at trial that they did not alter the circuit boards in those Viking telephones before the sale. The FBI case agent, Brenda Entrikin, later learned of the sale and contacted Lovejoy. He assured her that he had not altered the telephones, including the circuit boards, and agreed to retain them in his possession. Entrikin and the Assistant U.S. Attorney concluded that the circuit *971 boards were the most critical evidence and retrieved those boards from Lovejoy. 1 The government also recovered the five complete telephones Triangle did not sell and they were available at trial. The government presented testimony from a number of witnesses, including Viking’s supplier and several Viking employees, who testified that the circuit boards contained in the twenty-seven telephones sold by Viking to Triangle were used.

After defendant’s indictment, his trial was postponed several times. Lovejoy and defendant’s experts both tested the twenty-seven circuit boards before trial. Defendant received Lovejoy’s test results before performing his own testing. During trial, the court denied defendant’s motion to dismiss the indictment because of willful destruction or loss of exculpatory evidence. The jury found defendant guilty on all counts. The district court imposed a forty-one-month prison term based on an $820,000 loss calculation.

II

Defendant first contends that the government’s failure to preserve evidence denied him due process. He argues that the remaining portions of the twenty-two telephones sold to Triangle was material exculpatory evidence. We review for clear error a district court’s finding whether the government destroyed exculpatory evidence. United States v. Bohl, 25 F.3d 904, 909 (10th Cir.1994). The issue of prosecutorial bad faith is a mixed question of law and fact, but because the factual question predominates we review that issue for clear error. Id.

The district court concluded that the twenty-seven circuit boards were .used and that the circuit board was “the most significant part of the telephones.” Ill R. 657. The court relied in part on defendant’s stipulation to the government expert’s test results on the twenty-seven circuit boards establishing that they were used or refurbished. The court further concluded that the failure of the circuit boards to function properly caused the victims’ loss. Based on those factual findings, the absence of any evidence that the missing telephone equipment would exculpate defendant, and no showing of bad faith by the government, the court refused to dismiss.

A defendant’s Fourteenth Amendment due process rights include a general right to access evidence. The government’s duty to preserve evidence, however, only requires that evidence be preserved if it “might be expected to play a significant role in the suspect’s defense.” California v. Trombetta, 467 U.S. 479, 488, 104 S.Ct. 2528, 2534, 81 L.Ed.2d 413 (1984). The evidence may not be destroyed if its exculpatory value is apparent and the defendant is unable reasonably to obtain comparable evidence. Id. If the value of the lost evidence is lower because it is only “potentially useful” to the defendant, however, a defendant must establish bad faith by the government in its failure to preserve the evidence. Arizona v. Young-blood, 488 U.S. 51, 58, 109 S.Ct. 333, 337, 102 L.Ed.2d 281 (1988).

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141 F.3d 967, 1998 Colo. J. C.A.R. 1629, 49 Fed. R. Serv. 219, 1998 U.S. App. LEXIS 6903, 1998 WL 159475, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-mcclelland-ca10-1998.