United States v. Michelle Myricks

• Court: Court of Appeals for the Sixth Circuit
• Decided: July 8, 2024
• Docket: 23-1614
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 24a0291n.06

No. 23-1614

UNITED STATES COURT OF APPEALS FILED FOR THE SIXTH CIRCUIT Jul 08, 2024 KELLY L. STEPHENS, Clerk ) UNITED STATES OF AMERICA, ) Plaintiff-Appellee, ) ON APPEAL FROM THE UNITED ) STATES DISTRICT COURT FOR v. ) THE EASTERN DISTRICT OF ) MICHIGAN MICHELLE MYRICKS, ) Defendant-Appellant. ) OPINION ) )

Before: SUTTON, Chief Judge; CLAY and BUSH, Circuit Judges.

CLAY, Circuit Judge. Defendant Michelle Myricks challenges her conviction and

sentence for several counts of wire fraud committed against her former employer, Great Trades,

in violation of 18 U.S.C. § 1343. Myricks argues that the district court erred in admitting certain

prejudicial “other acts” evidence and in calculating her restitution amount. Finding no error in

these decisions, we AFFIRM.

I. BACKGROUND

A. Factual Background

Defendant Michelle Myricks worked at Great Trades, LLC, an organization that offers

educational resources for students to learn investing and finance skills, from October 2016 to

December 2017. Myricks was the office manager whose duties included, among other things,

sending monthly salary reports to a third-party payroll vendor, which would then issue paychecks

based on the information provided to them by Myricks. In December 2017, Myricks’ co-worker

reported to Myricks’ supervisor, Robert Bolya, the monetary figures that Myricks requested for No. 23-1614, United States v. Myricks

herself from Great Trades’ payroll manager, suspecting that Myricks was inflating the figures

beyond her legitimate earnings. Bolya contacted the police. Days later, Myricks was terminated.

The government began an investigation into wire fraud, finding that Myricks had requested around

$400,000 from the payroll vendor despite earning a salary only around $33,000–$48,000 per year.

As relevant to this case, Myricks requested public assistance before, during, and after her

employment at Great Trades. Prior to working at Great Trades, Myricks received food stamp and

cash assistance benefits from the Michigan Department of Health and Human Services

(“MDHHS”). In December 2016, after Myricks started working at Great Trades, Myricks falsely

listed her salary as $500 per month on an MDHHS form. Additionally, two months after her

employment with Great Trades ended, Myricks applied for unemployment benefits from the

Michigan Department of Talent and Economic Opportunity (“MDTEO”). On that application,

Myricks listed her former salary as $33,000 annually.

B. Procedural Background

For taking more money from Great Trades than what she was supposed to earn, the

government indicted Myricks on four counts of wire fraud. According to the indictment, Myricks

instructed the payroll vendor to pay her more than $400,000 over the course of fourteen months,

over $350,000 more than her authorized salary of approximately $48,000 per year. The

superseding indictment references four specific wire transfers, totaling $64,748.07, that Myricks

received after instructing the payroll specialists to pay her more than her salary. However, the

government also proffered evidence at trial and sentencing that Myricks’ scheme defrauded Great

Trades of a total of $400,162.71 and that, during the relevant period, the payroll vendor deposited

a total of $346,185.33 into Myricks’ bank account.

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Before trial, the government sought to introduce Myricks’ communications with the

Michigan public assistance agencies, MDTEO and MDHHS, as evidence relevant to her Great

Trades wire fraud. Myricks filed a motion in limine, arguing that these statements were neither

relevant nor probative, and would be unfairly prejudicial. The district court overruled Myricks’

motion and admitted the evidence associated with Myricks’ statement to MDHHS that she was

earning only $500 per week, as well as Myricks’ application for unemployment benefits that

included the statement that she earned $33,000 annually at Great Trades. The district court held

that the application for unemployment benefits was part of the Great Trades fraud, and that the

statement that she was earning only $500 per week was indicative of Myricks’ consciousness of

guilt and intent to defraud.

At trial, the government put on several witnesses, including the law enforcement agent who

investigated the fraud, as well as several Great Trades employees to explain Myricks’ role at the

company, her relative salary, and why there was no legitimate purpose for her to request so much

money from the payroll vendor. The government also put forth documentary evidence such as:

(1) Myricks’ emails to the payroll administrator over the course of fourteen months, in which she

requested a total of $400,162.71; (2) Myricks’ bank records which showed payroll deposits totaling

$346,185.33; (3) Myricks’ offer letter listing her salary as the substantially lower figure of

$33,000; and (4) documents showing that Myricks was entitled, at most, to $47,569.34.

Myricks’ only defense at trial was that she was authorized to be paid on commission, over

and above her salary, based on her negotiation of student contracts. In other words, Myricks

argued that she was entitled to the funds she instructed the payroll vendor to provide, and there

was therefore no scheme or intent to defraud. Myricks was unable to offer proof of such contracts

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at trial. For its part, the government put forth substantial proof that Myricks was not paid on

commission, but rather was a salaried employee making in the range of $33,000–$48,000 per year.

Myricks was convicted at a jury trial of four counts of wire fraud and proceeded to

sentencing. The presentence report (“PSR”) lists the total amount that Myricks embezzled as

$352,593.37, based on the difference between the amount Myricks requested from the payroll

vendor—$400,162.71—and what the PSR listed as her salary—$47,569.34.1 The district court

sentenced Myricks to a term of 24 months’ imprisonment, and ordered Myricks to pay restitution

to the partner-owners of Great Trades in the amount of $352,593.37. Myricks’ attorney did not

object at sentencing to this restitution amount.

II. DISCUSSION

A. Myricks’ Evidentiary Claim

Myricks argues that the district court erred in admitting her statements to the Michigan

public assistance agencies. As a preliminary matter, the parties dispute whether this evidence was

admitted under Federal Rule of Evidence 404(b) and therefore reviewable de novo. United States

v. Barnes, 822 F.3d 914, 920–21 (6th Cir. 2016). Myricks argues that, because the public benefits

evidence is not “intrinsic” evidence that is relevant to the crime of conviction, it is “other act”

evidence such that Rule 404(b) applies. In response, the government argues that the evidence was

intrinsic to the crime charged and that 404(b) therefore does not apply. See United States v. Sumlin,

956 F.3d 879, 889 (6th Cir. 2020).

1 Throughout the trial, there was a lack of clarity as to Myricks’ exact salary. The PSR notes that Myricks’ salary was only $33,000 per year. But the PSR also claims that Myricks was entitled to receive only $47,569.34 per year. This number was calculated by adding one pro-rated payment of $1,818.55 for the month of October 2016, plus 27 payments of Myricks’ bi-monthly authorized payroll of $1,584 from November 2016 to December 2017, plus two authorized bonuses of $1,521.44 and $1,461.35. It is this latter figure, $47,569.34, that appears to be most accurate and that, as discussed below, the district court used in calculating the restitution amount.

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The government is incorrect, and the “other act” analysis pursuant to 404(b) applies. This

evidence is not “intrinsic” evidence that is probative of the crime charged. “Evidence of uncharged

criminal activity is not considered other crimes evidence under Fed. R. Evid. 404(b) if it arose out

of the same transaction or series of transactions as the charged offense, if it is inextricably

intertwined with the evidence regarding the charged offense, or if it is necessary to complete the

story of the crime on trial.” United States v. Price, 329 F.3d 903, 906 (6th Cir. 2003) (cleaned up)

(quoting United States v. Towne, 870 F.2d 880, 886 (2d Cir. 1989)). Myricks’ statements to the

state agencies do not pass this test. First, the statements do not arise out of the same transaction

as the charged offense, as they do not involve defrauding Great Trades of any money. Second,

because the relevant evidence of Myricks' bank statements and emails can stand alone, independent

of her submissions to the public assistance agencies, these statements are not inextricably

intertwined with the evidence regarding the Great Trades fraud. Third, for similar reasons, the

statements are not necessary to complete the story of the Great Trades fraud on trial. Therefore,

we must evaluate this evidence as Rule 404(b) “other act” evidence.

Rule 404(b) provides that “[e]vidence of any other crime, wrong, or act is not admissible

to prove a person’s character in order to show that on a particular occasion the person acted in

accordance with the character.” Fed. R. Evid. 404(b)(1). However, the rule provides for

admissibility of such evidence for other purposes, “such as proving motive, opportunity, intent,

preparation, plan, knowledge, identity, absence of mistake, or lack of accident.” Fed. R. Evid.

404(b)(2). “Trial courts employ a three-part test to determine the admissibility of 404(b)(2)

evidence.” Barnes, 822 F.3d at 920. The district court must consider: “(1) whether there is

sufficient evidence that the other act in question actually occurred; (2) whether the evidence of the

other act is probative of a material issue other than character; and (3) whether the probative value

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of the evidence is substantially outweighed by its potential prejudicial effect.” United States v.

Emmons, 8 F.4th 454, 474 (6th Cir. 2021) (citation omitted). As to the probative value of the

evidence, the trial court must analyze whether: “(1) the evidence is offered for an admissible

purpose, (2) the purpose for which the evidence is offered is material or ‘in issue,’ and (3) the

evidence is probative with regard to the purpose for which it is offered.” Id. (citation omitted).

In this case, the aforementioned evidence is probative of a material issue other than

character—Myricks’ intent. Myricks put her intent at issue because her sole defense at trial was

that she lacked the requisite intent to defraud Great Trades because she thought she was entitled

to the money she requested from the payroll vendor. Myricks’ theory was that she was owed

commission on certain contracts she helped negotiate, and that this commission agreement

explained her inflated payments from the payroll company. If she was only requesting what she

believed she was owed, Myricks argued, then she did not have the requisite intent to defraud.

Once intent was at issue, the government was then allowed to introduce “other acts”

evidence to rebut this defense. See United States v. Johnson, 27 F.3d 1186, 1192 (6th Cir. 1994)

(“[W]here there is thrust upon the government, either by virtue of the defense raised by the

defendant or by virtue of the elements of the crime charged, the affirmative duty to prove that the

underlying prohibited act was done with a specific criminal intent, other acts evidence may be

introduced under Rule 404(b).”). And Myricks’ statements to the Michigan agencies rebut her

defense because they contradict Myricks’ claim that she earned any commission. Myricks’

statements that she earned $500 per month and $33,000 per year included no mention of

commission payments, and are substantially lower than the $400,000 she requested from Great

Trades. The statements therefore undermine her claim that she lacked the requisite intent to

defraud. Accordingly, the statements were admissible for the permissible 404(b) purpose of intent.

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Still, under Rule 403 of the Federal Rules of Evidence, the evidence is admissible only if

the probative value is not substantially outweighed by a risk of unfair prejudice. Emmons, 8 F.4th

at 474. When conducting this analysis, we “must look at the evidence in a light most favorable to

its proponent, maximizing its probative value and minimizing its prejudicial effect.” United States

v. Brady, 595 F.2d 359, 361 (6th Cir. 1979). As discussed, this evidence is certainly probative on

the issue of intent and to rebut Myricks’ sole defense theory. But in considering a piece of

evidence’s probative value, we must consider the availability of other means of proof. United

States v. Asher, 910 F.3d 854, 861 (6th Cir. 2018). To be sure, the government introduced other

evidence to rebut Myricks’ defense that she was entitled to the payments, namely, several Great

Trades employees who testified that Myricks was not paid on commission. Nevertheless, “[t]he

Supreme Court has cautioned that the existence of an alternative means of proof—even one with

substantially the same or greater probative value but a lower danger of unfair prejudice—does not

require exclusion of more prejudicial evidence.” Id. (citation omitted). In this case, the evidence

had strong probative value, as it involved Myricks’ own disclosures to third parties that did not list

her purported commission payments. And Myricks’ arguments that the evidence is especially

prejudicial are unavailing. See, e.g., United States v. Mandoka, 869 F.3d 448, 459 (6th Cir. 2017);

United States v. Davis, 707 F.2d 880, 884 (6th Cir. 1983) (“[T]he chance of prejudice is always

present in a 404(b) situation . . . .”). The alleged prejudice that Myricks claims—that this was

misleading propensity evidence—does not substantially outweigh its strong probative value in

undermining Myricks’ sole defense theory, as it must for exclusion under Rule 403. Even if the

evidence was admitted in error, it was likely harmless, given the wealth of other evidence to

convict Myricks—including the emails in which she told Great Trades she was entitled to hundreds

of thousands of dollars more than her salary, and the bank statements that indicated how much

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money she defrauded Great Trades from over time. Cf. United States v. Sadler, 24 F.4th 515, 556

(6th Cir. 2022) (declining to reverse where a rational jury could have found guilt beyond a

reasonable doubt without considering the challenged evidence). Therefore, Myricks cannot prevail

on her evidentiary claim.

B. Myricks’ Sentencing Claim

Myricks challenges the district court’s determination of the restitution amount that it

ordered Myricks to pay. Because her counsel did not object to the district court’s calculations at

sentencing, we review this claim for plain error. United States v. Reaume, 338 F.3d 577, 585 (6th

Cir. 2003). “To establish plain error, a defendant must show: (1) that an error occurred in the

district court; (2) that the error was plain, i.e., obvious or clear; (3) that the error affected substantial

rights of the defendant; and (4) that this adverse impact seriously affected the fairness, integrity,

or public reputation of the judicial proceedings.” Id.

Myricks cannot satisfy this demanding standard. She argues that the district court erred in

determining that she owed $352,593.37 in restitution without sufficient calculation or explanation.

This number represents the difference in the amount of money Myricks requested from Great

Trades ($400,162.71) and the actual salary to which she was entitled ($47,569.34). At trial, the

government produced bank records that indicated that Myricks requested $400,162.71, and that

payroll deposited $346,185.33 into her bank account. The government explained at trial and on

appeal that $346,185.33 was deposited into Myricks’ account after taxes were withheld from her

requested $400,162.71.

Notably, Myricks puts forth no countervailing documentation, nor does she suggest a

specific figure—let alone one supported by evidence—that she argues should have been used to

calculate restitution. Rather, she relies only on the lack of clarity on her exact salary figure to

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argue that the district court erred in determining restitution when such confusion existed. True,

there is conflicting evidence in the record about whether her salary was $33,000 or $47,569.34.

But the government used the latter figure by calculating Myricks’ legitimate bi-monthly

disbursements plus two legitimate bonuses. The government then subtracted this sum from the

total amount that Myricks requested from payroll ($400,162.71) to arrive at the final restitution

amount: $352,593.37, which the district court adopted with no objection from Myricks’ attorney.

This evidence is sufficient for the preponderance of the evidence standard, particularly when

Myricks failed to object or put forth any other figure that would arguably be more appropriate.

Myricks also argues that the district court erred by ordering a restitution amount that

exceeded Great Trades’ loss. In particular, Myricks claims that the district court ordered her to

pay a windfall of at least $53,977.38 that she may have requested via email, but never actually

received. Def. Br., ECF No. 28, 32 (referring to the difference between her requested sum of

$400,162.71 and the $346,185.33 that was deposited into her account). Myricks argues that

restitution must be based on actual loss as opposed to intended loss, and that this sum is therefore

in error. Cf. United States v. Younes, 194 F. App’x 302, 317 (6th Cir. 2006). But this amount is

explained by tax withholdings. A government witness explained at trial that $346,185.33 was

deposited into Myricks’ account after the payroll vendor withheld taxes from the $400,162.71 it

took from Great Trades at Myricks’ instruction. In other words, the $400,162.71 is not intended

loss—which we agree would be impermissible for the district court to award as restitution—but

rather money that the company actually lost, because Myricks’ fraud required it to pay additional

taxes. That Myricks did not personally receive the full $400,162.71 does not mean her fraud did

not deprive the company of that amount. See United States v. Kilpatrick, 798 F.3d 365, 390 (6th

Cir. 2015) (noting that the measure of restitution is the victim’s loss, not the defendant’s gain).

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Once the withheld taxes are added to what Myricks received, $346,185.33, the total amount

that Myricks caused the company to lose is $400,162.71. We then subtract from that amount the

money that Myricks was legitimately owed as a salaried employee, $47,569.34, because it would

make little sense to require Myricks to pay back her rightful salary. Cf. United States v. Boring,

557 F.3d 707, 714 (6th Cir. 2009) (“[T]he district court may not include in its calculation of a

restitution award the worker’s compensation payments to which [the defendant] was legitimately

entitled, since those do not constitute losses to the victim and thus are not properly the subject of

restitution.”). Once this arithmetic is complete, we arrive at the same figure of restitution that the

government requested, and that the district court granted: $352,593.37.

In short, none of Myricks’ arguments persuade us that the district court erred, let alone in

such a way that affected her substantial rights, as required for plain error review.

CONCLUSION

For the reasons stated above, the judgment of the district court is AFFIRMED.

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