United States v. Wood

• Court: Court of Appeals for the Fifth Circuit
• Decided: February 13, 2001
• Docket: 99-31261
• Status: Unpublished

Opinion

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 99-31261 _____________________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

MARION DOUGLAS WOOD,

Defendant-Appellant. _________________________________________________________________

Appeal from the United States District Court for the Eastern District of Louisiana, New Orleans USDC No. 94-CR-377-3-B _________________________________________________________________ February 7, 2001

Before JOLLY and DAVIS, Circuit Judges, and RESTANI, Judge.*

PER CURIAM:**

Marion Douglas Wood was convicted of conspiracy to commit mail

fraud, wire fraud, and money laundering in his role as President of

Midwest Life and Public Investors Life from April 1990 to February

1991. On appeal, Wood challenges his conviction, claiming: (1)

that the indictment was duplicitous, because it charged more than

one conspiracy, and that it prejudiced him because the evidence, at

* Judge, U.S. Court of International Trade, sitting by designation. ** Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. most, only connected him with one conspiracy; (2) that the delay

between the indictment and the trial violated his Sixth Amendment

right to a speedy trial; (3) that the district court erred in

refusing to strike some of the language in the indictment as

prejudicial surplusage; (4) that the district court erred in

failing to instruct on materiality; (5) that the district court’s

instruction pursuant to Allen v. United States, 164 U.S. 492

(1896), modified to meet the current situation, coerced the jury

into reaching a verdict; and (6) that the district court erred in

applying the sentencing guidelines and in refusing to depart

downward. Because we find no reversible error, we affirm Wood’s

conviction.

I

In December 1989, Southshore Holding Corporation, owned by Bob

Shamburger and Gary Jackson, purchased Riverside Holding Company,

which owned The Midwest Life Insurance Company (“Midwest”),

Fidelity Fire and Casualty Insurance Company (“Fidelity Fire”),

Public Investors Life Insurance Company (“PILICO”), and a number of

other companies. Shortly thereafter, Jackson and Shamburger hired

Wood, a practicing attorney and state legislator in Arkansas, to be

president of Midwest and PILICO.

Wood was responsible for filing financial statements for the

companies, and for encouraging investor capital. During Wood’s

2 tenure as president of Midwest and PILICO, however, over $40

million in assets were transferred to Jackson and Shamburger,

hardly a capital investment. Although Wood contends that he did

not examine them, Wood signed a variety of documents, including

some that inaccurately reported the value of assets, and others

that were backdated to fall into earlier financial quarters.

Notwithstanding this good service for those in charge, Wood was

discharged by Shamburger in February of 1991.

In December of 1994, Wood was charged along with six other

defendants with conspiracy to commit mail fraud, wire fraud, and

money laundering, as well as substantive violations of mail fraud

in violation of 18 U.S.C. §§ 1341, 1343. The government had the

indictment sealed; it was not unsealed until January 1996.

Other facts relate to the speedy trial claim: on February 27,

1996, the court granted the motion of Wood’s co-defendant, James L.

Adams, to continue the trial date due to the complexity of the

case. On March 4, 1996, the court reset the trial for January

1997. At this point, Wood requested that the court not delay the

trial, and, two weeks later, filed an objection to the continuance.

On April 2, 1997, Wood moved to dismiss the indictment alleging

that the court had violated the Speedy Trial Act by improperly

entering its continuance order. The district court denied this

motion on December 27, 1996. In 1997 and 1998, Wood’s

3 co-defendant, Jackson, filed five separate continuances for medical

reasons. Wood objected to some of these continuances, and

requested severance from the other defendants, which the court

denied.

The case was first tried beginning on January 13, 1999. The

jury was unable to break a deadlock, and a mistrial was declared as

to Wood on March 5, 1999. Wood was tried again, by himself, on

August 2, 1999. The jury deliberated for one and a half days

before informing the court that it was deadlocked. After an Allen

charge, the jury returned verdicts of guilty on all counts.

Wood filed objections to the pre-sentencing report, which were

overruled, and a motion for downward departure from the guidelines,

which was denied. Wood was sentenced to fourteen years and five

years, to run concurrently, and $1.4 million in restitution.

II

Wood first argues that the district court erred in denying the

defendant’s motion to dismiss the conspiracy charge as duplicitous.

Wood contends that although the indictment supposedly charged only

one conspiracy, the government, in fact, charged at least two

conspiracies. He argues that he was prejudiced by the introduction

of evidence related to a conspiracy in which he had no involvement.

Wood also claims that, to the extent that the government claims

only one conspiracy, there is no evidence that he was a part of the

4 conspiracy and thus the case against him should have been

dismissed.

We review a claim that an indictment is duplicitous de novo.

United States v. Sharpe, 193 F.3d 852, 866 (5th Cir. 1999). The

indictment should be assessed to determine whether each count can

be read to charge only one violation. Id. As long as there is an

agreement among the defendants on an overall objective, the

indictment can be read to charge one conspiracy. Id. Here, the

indictment charged that the objectives of the conspiracy were to

defraud Midwest and Fidelity Fire, and to conceal this fraud

through the distribution of false financial information.1 This

count can be read to charge only one conspiracy. See United States

v. Mann, 161 F.3d 840, 858 (5th Cir. 1999) (recognizing that acts

of concealment are sometimes a necessary part of the overall

conspiracy). Furthermore, the district court did not err in

failing to dismiss the conspiracy charge against Wood for variance

1 We agree that the government’s draftsmanship asks for trouble. Specifically, the indictment charged that: [t]he main objective of the conspiracy was to defraud Midwest Life and Fidelity Fire of money and other assets, distribute false financial information about Midwest Life to conceal the fraudulent activities, to lure new investors and policyholders, and to deceive current investors and policyholders while distributing false financial information about Public Investors Life to conceal its poor financial condition. Nevertheless, this charge breaks down into an overall objective of two main components: (1) to defraud Midwest and Fidelity Fire, and (2) to conceal these fraudulent activities.

5 between the conspiracy and the proof offered at trial. The

government introduced evidence regarding several of Wood’s

transactions and misrepresentations that reasonably could support

the jury’s determination that Wood knew of and adopted the

objective of defrauding Midwest and Fidelity Fire and concealing

that fraud. For instance, the government introduced evidence that

Wood, as president of Midwest, signed a backdated purchase and sale

agreement selling the Parkway Plaza building to three shell

corporations, even though, at the actual date of the agreement, he

was hiring real estate agents to attempt to sell the building. The

government also introduced evidence that Wood helped to create a

bogus $5,000,000 promissory note, turning the loss on Midwest’s

financial statements into a gain, by signing a letter canceling an

already executed agreement for a $6,000,000 loan, and substituting

a backdated document claiming $11,000,000 in indebtedness for

virtually the same collateral. Although Wood claims he only signed

the documents, and was not aware of the contents of the documents,

this evidence, and evidence of other transactions, could reasonably

support the jury’s determination that Wood was involved in the

conspiracy.

III

Wood next challenges the district court’s failure to dismiss

the indictment for lack of a Speedy Trial, as guaranteed by the

6 Sixth Amendment.2 Wood was indicted in December of 1994, the

indictment was unsealed in January of 1996, and his first trial

took place in January of 1999. Thus, approximately four years

elapsed between the date of his trial and the date of his initial

sealed indictment, and approximately three years elapsed between

the date of his trial and the date of the unsealing of the

indictment.3

The Supreme Court has provided a four-part balancing test to

determine whether a defendant received a speedy trial under the

Sixth Amendment. In evaluating Wood’s claim, we must consider: (1)

the length of the delay, (2) whether the defendant asserted his

right to a speedy trial, (3) the reason for the delay, and (4)

prejudice to the defendant. Barker v. Wingo, 407 U.S. 514, 530

(1972). We view the length of delay as a threshold inquiry. A

delay of one year is presumptively prejudicial, and, therefore, is

sufficient to trigger speedy trial analysis. United States v.

2 On appeal, Wood does not challenge the delay under the Speedy Trial Act, nor does he challenge the district court’s ruling that there was no due process violation in the pre-indictment delay of forty-five months. 3 Because we find that Wood’s Sixth Amendment right to a speedy trial was not violated either by the delay between the date of the unsealing of the indictment and the date of trial or the date of the initial indictment and the date of the trial, we do not consider whether the Sixth Amendment right to a speedy trial attaches when the defendant is initially indicted or when the indictment is unsealed.

7 Lucien, 61 F.3d 366, 371 (5th Cir. 1995). Because Wood’s case was

delayed for three to four years, we turn to consider the other

three factors. Wood’s objections to the continuances centered

primarily on his requests for severance from the other defendants.

He did, however, assert his right to a speedy trial.

We must next take into account the reasons for the delay.

Trial was delayed, first, because the indictment was sealed while

the government searched for all of the defendants, and, second,

because Wood’s co-defendants moved for continuances for extra

preparation time and illness. As the Supreme Court has noted,

“pretrial delay is often both inevitable and wholly justifiable.”

Doggett v. United States, 505 U.S. 647, 656 (1992). Thus, “where

the state advances valid reasons for the delay, or the delay is

attributable to acts of the defendant, this factor is weighed in

favor of the state.” Cowart v. Hargett, 16 F.3d 642, 647 (5th Cir.

1994). Here, there is no indication that the government failed to

search for Wood’s co-defendants with diligence. Furthermore, the

government objected to the continuances requested by Wood’s co-

defendants. Because the delays were not the result of the

government’s negligence or bad faith, but instead are attributable

to Wood’s co-defendants, this factor weighs in favor of the state.

Finally, we examine the degree of prejudice resulting from the

delay. Because “the government was reasonably diligent in its

8 efforts to bring the defendant to trial, the defendant must show

‘specific prejudice to his defense.’” Robinson v. Whitley, 2 F.3d

562, 570 (5th Cir. 1993) (quoting Doggett, 505 U.S. at 654).

Potential harm resulting from a delay includes oppressive pretrial

incarceration, anxiety and concern of the accused, and the

possibility that the defendant’s defense will be impaired by

“dimming memories and loss of exculpatory evidence.” Doggett, 505

U.S. at 654. Here, there was no pretrial incarceration. Wood only

complained about anxiety in his first speedy trial motion. Thus,

Wood first argues that, because of the delay, he lost the important

testimony of Jerry Willis. Wood has failed to demonstrate,

however, that not having Willis’s testimony impaired his defense.

Wood has also not explained why neither he nor his attorney took

steps to interview Willis or preserve his testimony. See United

States v. Neal, 27 F.3d 1035, 1043 (5th Cir. 1994). Wood next

argues that the delay impaired his memory, which weakened his trial

testimony. Specifically, he contends that the prosecutor

confronted him with transactions and conversations that had

allegedly taken place nine years earlier, and then juxtaposed that

against his grand jury and civil deposition testimony. While

Wood’s confusion on the stand might be tangentially related to the

three- or four-year time lapse between indictment and trial, Wood

did not suffer memory lapses on direct examination. The possible

9 relationship between his confusion at the hands of the prosecutor

and the time delay does not support a finding of actual prejudice.

Thus, in balancing all of these factors, we must conclude that

Wood’s right to a speedy trial under the Sixth Amendment was not

violated.

IV

Wood also argues that the district court erred in not striking

allegations in the indictment that Wood caused a number of acts to

be done, such as causing individuals and entities to make campaign

contributions to a corrupt Louisiana insurance commissioner to

ensure less regulation and review of the insurance companies’

management. In his motion to strike, Wood objected to seventeen

uses of the word “cause” in the indictment, only one of which is

described in detail in his appellate brief. Wood claims that the

trial judge should have known that the allegations were prejudicial

surplusage because they were unsupported by any evidence at the

first trial.

We review a district court’s decision to deny a motion to

strike for abuse of discretion. United States v. Graves, 5 F.3d

1546, 1550 (5th Cir. 1993). To hold that this refusal to strike

should invalidate Wood’s conviction, we must find that the

“allegedly excessive language was irrelevant, inflammatory and

prejudicial.” United States v. Bullock, 451 F.2d 884, 888 (1971).

10 Because we find that Wood failed to meet this exacting standard,

the district court did not commit reversible error in denying the

motion to strike.

V

Because Wood did not object at trial to either the district

court’s failure to instruct the jury as to the materiality element

of mail fraud and wire fraud, or the district court’s Allen charge

to the jury to continue deliberating, this court reviews both of

those determinations for plain error. Because we find that neither

of these actions “seriously affect fairness, integrity or public

reputation of judicial proceeding and result in miscarriage of

justice,” there is no plain error. United States v. Waldrip, 981

F.2d 799, 805 (5th Cir. 1993).

VI

Finally, Wood objects to the district court’s application of

the sentencing guidelines and its failure to downwardly depart. We

review a district court's application of the sentencing guidelines

de novo and its findings of fact under a clearly erroneous

standard. United States v. Morrow, 177 F.3d 272, 300 (5th Cir.

1999). Wood argues that the district court should not have used

money laundering as a basis for his sentence, because he was not

even charged with money laundering. Under U.S. Sentencing

Guidelines Manual § 1B1.2(d), using money laundering as the basis

11 for sentencing on Wood’s conspiracy violation was appropriate as

long as “the court, were it sitting as trier of fact, could convict

the defendant of conspiring to commit that object offense.” U.S.

Sentencing Guidelines Manual § 1B1.2(d), cmt. n.4. In overruling

Wood’s objection to the use of money laundering for the basis of

Wood’s sentence, the district court specifically noted that Wood

signed off on the Grant Street transaction, in which Midwest

purchased mortgages from Master Holding, 98, Inc., a company owned

by Jackson and Shamburger. Midwest purchased the mortgages at

their face-value from Master Holding, despite the fact that Wood

had received correspondence that the mortgages were being offered

at a steeply discounted rate. Because we find that the district

court’s determination that Wood conspired to launder money through

the Grant Street transaction was not clearly erroneous, we uphold

Wood’s sentence.

Wood also appeals from the district court’s refusal to depart

downward from the sentencing guidelines, arguing that the

disparity between his sentence and the sentence of his

co-conspirator is unjustified. This court, however, can only

review a district court’s refusal to depart from the guidelines if

its decision was based on the erroneous belief that it did not have

the authority to depart. United States v. Davis, 226 F.3d 346, 359

(5th Cir. 2000). A review of the record convinces us that the

12 district court was aware of its ability to depart downward but

chose not to depart. Thus, the district court’s decision not to

depart is unreviewable.

VII

The district court did not err in failing to find the

indictment duplicitous, in finding that there was no Sixth

Amendment speedy trial violation, in refusing to strike certain

terms from the indictment, and in not instructing the jury on

materiality. We also hold that the Allen charge given to the jury

was not plain error, and that the district court did not err in

applying the sentencing guidelines. Accordingly, the judgment of

the district court is

A F F I R M E D.