Appendix Vol I — Dvorak v. United States
Supreme Court brief2001
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Supreme Court, U.S.
@ FILED
11
e 0%1144 JAN 162008
OFFICE OF THE CLERK
IN THE
Supreme Court of the Mnited States
ROBERT F. DVORAK,
Petitioner,
Vv.
UNITED STATES GOVERNMENT,
Respondent.
On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Fourth Circuit
APPENDIX
TO THE PETITION FOR A WRIT OF CERTIORARI
(VOLUME ft)
Barry P. Steinberg, Esq.
Counsel of Record
Alan D. Strasser, Esq.
Nancy E. Nunan, Esq.
Counsel for Petitioner
Kutak Rock LLP
1101 Connecticut Avenue, N.W.
Suite 1000
Washington, D.C. 20036
202/828-2400
Balmar Legal Publishing Services, Washington, DC 202-682-9300
22Sp¢e* Jo S
la
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 00-4353
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
Vv.
ROBERT F. DVORAK,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Albert V. Bryan, Jr., Senior District Judge.
(CR-99-412-A)
Submitted: September 20, 2000
Decided: October 17, 2000
Before WILKINS, LUTTIG, and MOTZ, Circuit Judges.
Affirmed by unpublished per curiam opinion.
COUNSEL
Alan D. Strasser, Nancy E. Nunan, KUTAK ROCK, L.L.P.,
Washington, D.C., for Appellant. Helen F. Fahey, United
States Attorney, Stephen P. Learned, Assistant United States
Attorney, Alexandria, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this
circuit. See Local Rule 36(c).
2a
OPINION
PER CURIAM:
Robert F. Dvorak appeals his convictions and sentences
for conspiracy, making false statements, and wire fraud. We
affirm.
Dvorak owned the Ritz Audio Visual store in Beltsville,
Maryland (“Ritz AV”). In that capacity, he sold numerous
items to Robert Burchell, who ostensibly purchased these
goods for the Drug Enforcement Agency (DEA) but in fact
embezzled them. The primary issue at trial was whether
Dvorak realized that Burchell was misusing the property
bought by the DEA. The jury, apparently believing that
Dvorak had the requisite awareness, convicted him of all
nineteen counts in the indictment. The district court sentenced
Dvorak to concurrent terms of thirty-seven months
imprisonment, and this appeal followed.
Dvorak’s first claim is that the district court erred by
refusing to instruct the jury that good faith is a defense to
charges of wire fraud and making false statements. The
court’s instructions concerning willfulness and knowledge
adequately addressed this issue, however. See United States v.
Fowler, 932 F.2d 306, 316-17 (4th Cir. 1991).
Dvorak next faults the district court for refusing to strike
portions of the prosecutor’s closing argument. This issue
relates to hearsay evidence suggesting that Burchell resold
goods the DEA bought from Ritz AV. The court did not admit
this hearsay as substantive evidence of the resale of goods,
but rather to show that Dvorak, who heard the statements in
question, was on notice that Burchell was misusing
government property. Dvorak contends that the prosecutor
blurred this distinction in his closing argument. We have
reviewed the prosecutor’s remarks and do not agree that they
had such an effect. Furthermore, because Dvorak was not
implicated in any resale of property, he would not have been
prejudiced by any misconceptions about the purpose for
which the hearsay evidence was introduced. See United States
3a
v. Wilson, 135 F.3d 291, 297 (4th Cir. 1998) (describing
showing required to establish improper closing argument).
Finally, Dvorak contends that the district court failed to
make the findings necessary to support its imposition of a
two-level sentencing enhancement for obstruction of justice.
See United States Sentencing Guidelines Manual § 3C1.1
(1998). The court, however, specifically identified the
testimony supporting such an enhancement (Dvorak’s denial
that he was aware of Burchell’s criminal activities) and
expressly found that testimony to be false and material. These
findings were sufficient. See United States v. Dunnigan, 507
U.S. 87 (1993).
For the foregoing reasons, we affirm Dvorak’s
convictions and sentences. We dispense with oral argument
because the facts and legal contentions are adequately
presented in the materials before the court and argument
would not aid the decisional process.
AFFIRMED
4a
AO 245 (Rev. 2/99) (EDVA rev. 1) Sheet 1 - Judgment in a Criminal Case
FILED
—__ 4, 2000
CLERK, U.S. DISTRICT COURT
ALEXANDRIA, VIRGINIA
Case Number 1:99CR00412-001
UNITED STATES DISTRICT COURT
Eastern District of Virginia
Alexandria Division
UNITED STATES OF AMERICA
v.
ROBERT DVORAK,
Defendant.
AMENDED JUDGMENT IN A CRIMINAL CASE
The defendant, ROBERT DVORAK, was represented by
Alan D. Strasser, Esquire.
The defendant was found guilty on count(s) 1, 2, 3, 4, 5,
6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, and 19 of the
Indictment after a plea of not guilty. Accordingly, the
defendant is adjudged guilty of the following count(s),
involving the indicated offense(s):
Title & Section Nature of Offense Date Offense Count
Concluded Number(s)
18 USC 371 Conspiracy to defraud 8/29/97 1
the United States
18 USC 1001 Knowingly and willfully 2/10/95 - 2 thru 15
made a materially false 9/26/97
statement and
5a
18 USC 1343 Fraud by wire 1/17/91 - 16 thru 19
9/26/97
As pronounced on April 28, 2000, the defendant is
sentenced as provided in pages 2 through 7 of this Judgment.
The sentence is imposed pursuant to the Sentencing Reform
Act of 1984.
IT IS FURTHER ORDERED that the defendant shall
. hotify the United States Attorney for this district within 30
days of any change of name, residence, or mailing address
unti! all fines, restitution, costs, and special assessments
imposed by this judgment are fully paid.
Signed this 4th day of May. 2000.
/s/
Albert V. Bryan, Jr.
‘United States District Judge
Defendant’s SSN: 579-78-7352
Defendant’s Date of Birth: 9/12/54
Defendant’s address: 8404 Cherry Laurel Court
Laurel, MD 20723
6a
IMPRISONMENT
The defendant is hereby committed to the custody of the
United States Bureau of Prisons to be imprisoned for a term
of THIRTY-SEVEN (37) MONTHS as to each Count to be
served concurrently with each other.
The Court makes the following recommendations to the
Bureau of Prisons:
That while incarcerated the defendant receive medical
treatment for his condition.
The defendant shall surrender to the United States
Marshal for this district 48 hours after the completion of the
appeal process.
RETURN
I have executed this Judgment as follows:
Defendant delivered on to
at , with a certified copy of this Judgment.
c: P.O. (2) (3)
Mshl. (4) (2)
U. S.Atty. United States Marshal
U.S.Coll.
Dft. Cnsl.
PTS Deputy Marshal
Financial
Registrar
ob
7a
AO 245 S Rev. 2/99) (EDVA rev. 1) Sheet 3 - Supervised Release
Defendant: Robert F. Dvorak
Case Number: CR 99-412-001
SUPERVISED RELEASE
Upon release from imprisonment, the defendant shall be
on supervised release for a term of THREE (3) YEARS.
The Probation Office shall provide the defendant with a copy
of the standard conditions and any special conditions of
supervised release.
The defendant shall report to the probation office in the
district to which the defendant is released within 72
hours of release from the custody of the Bureau of
Prisons.
While on supervised release, the defendant shall not
commit another federal, state, or local crime.
While on supervised release, the defendant shall not
possess a firearm or destructive device.
If this judgment imposes a fine or a restitution in
accordance with the Schedule of Payments set forth in
the Criminal Monetary Penalties sheet of this judgment.
STANDARD CONDITIONS OF
SUPERVISED RELEASE
The defendant shall comply with the standard conditions that
have been adopted by this court (set forth below):
1) The defendant shall not leave the judicial district without
the permission of the court or probation officer.
2) The defendant shall report to the probation officer and
shall submit a truthful and complete written report within
the first five days of each month.
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
8a
The defendant shall answer truthfully all inquiries by the
probation officer and follow the instructions of the
probation officer.
The defendant shall support his or her dependents and
meet other family responsibilities.
The defendant shall work regularly at a lawful
occupation unless excused by the probation officer for
schooling, training, or other acceptable reasons.
The defendant shall notify the Probation Officer within
72 hours, or earlier if so directed, of any change in
residence.
The defendant shall refrain from excessive use of alcohol
and shall not purchase, possess, use, distribute, or
administer any narcotic or other controlled substance, or
any paraphernalia related to such substances, except as
prescribed by physician.
The defendant shall not frequent places where controlled
substances are illegally sold, used, distributed or
administered.
The defendant shall not associate with any persons
engaged in criminal activity, and shall not associate with
any person convicted of a felony unless granted
permission to do so by the probation officer.
The defendant shall permit a probation officer to visit
him or her at any time at home or elsewhere and shall
permit confiscation of any contraband observed in plain
view of the probation officer.
The defendant shall notify the probation officer within
seventy-two hours of being arrested or questioned by a
law enforcement officer.
The defendant shall not enter into any agreement to act
as an informer or a special agent of a law enforcement
agency without the permission of the court.
9a
13) As directed by the probation officer, the defendant shall
notify third parties of risks that may be occasioned by the
defendant's criminal record or personal history or
characteristics, and shall permit the probation officer to
make such notifications and to confirm the defendant's
compliance with such notification requirement.
__ SPECIAL CONDITIONS OF SUPEVISION
While on supervised release, pursuant to this Judgment, the
defendant shall also comply with the following additional
conditions:
The mandatory drug testing provisions of 18 U.S.C. §
3563(a(S) are waived upon the courts finding that the
offense of conviction is not drug-related, there is no current or
past history of substance abuse, and there is a low risk of
future substance abuse by the defendant.
The defendant shall pay the restitution as ordered.
10a
AO 245 S (Rev. 2/99) (EDVA rev.) Sheet 5 - Financial Penalties
Defendant: Robert F. Dvorak _
Case Number: CR 99-412-001
CRIMINAL MONETARY PENALTIES
The defendant shall pay the following total monetary
penalties in accordance with the schedule of payments set out
below.
Count Special Assessment Fine
1 $100.00
2 $100.00
3 $100.00 |
4 $100.00 |
5 $100.00 |
6 $100.00 |
7 $100.00
8 $100.00
G $100.00
10 $100.00
11 $100.00
12 $100.00
13 $100.00
14 $100.00
15 $100.00
16 $100.00
17 $100.00
18 $100.00
19 $100.00
Total $1,900.00
FINE
No fines have been imposed in this case.
lla
SCHEDULE OF PAYMENTS
Payments shall be applied in the following order (1)
assessment; (2) restitution; (3) fine principal; (4) cost of
prosecution; (5) interest (6) penalties
The special assessment is due in full immediately. If not paid
immediately, the court authorizes the deduction of appropriate
sums from the defendant’s account while in confinement in
accordance with the applicable rules and regulations of the
Bureau of Prisons.
Any special assessment. restitution, or fine payments may be
subject to penalties for default and delinquency.
If this judgment imposes a period of imprisonment, payment
of Criminal Monetary penalties shall be due during the period
of imprisonment.
All criminal monetary penalty payments are to be made to the
Clerk, United States District Court, except those payments
made through the Bureau of Prisons’ Inmate Financial
Responsibility Program.
12a
RESTITUTION AND FORFEITURE
RESTITUTION
The court. pursuant to the Victim and Witness
Restitution Act, finds that the following is/are victim(s) of
defendant's criminal conduct and has/have sustained loss in
the indicated amounts and orders $1039.93 restitution by the
defendant as follows:
Name & address of payee(s) Amount
General Accounting Unit, DEA $1,039,929.10
700 Army Navy Drive
Arlington, VA 22202
Total $1,039,929.10
Payments of restitution are to be made to Clerk, U.S.
District Court.
Restitution is due and payable at the rate of $300.00
per month commencing 30 days from today. Any amount
due a victim to whom restitution is ordered in this order shall
be reduced by any amount the victim recovers from the same
loss for any co-defendant or any other source.
If there are multiple payees, any payment not made
directly to a payee shall be divided proportionately among the
payees named unless otherwise specified here:
FORFEITURE
Forfeiture has not been ordered in this case.
13a
AO 245 S (Rev. 2/99) (EDVA rev. 1) Sheet 1 - Judgment in a Criminal Case
FILED
APRIL 28, 2000
CLERK, U.S. DISTRICT COURT
ALEXANDRIA, VIRGINIA
Case Number 1:99CR00412-001
UNITED STATES DISTRICT COURT
Eastern District of Virginia
Alexandria Division
UNITED STATES OF AMERICA
v.
ROBERT DVORAK,
Defendant.
JUDGMENT IN A CRIMINAL CASE
The defendant, ROBERT DVORAK, was represented by
Alan D. Strasser, Esquire.
The defendant was found guilty on count(s) 1, 2, 3, 4, 5,
6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, and 19 of the
Indictment after a plea of not guilty. Accordingly, the
defendant is adjudged guilty of the following count(s),
involving the indicated offense(s):
Tithe & Section Nature of Offense Date Offense Count
Concluded Number(s)
18 USC 371 Conspiracy to defraud 8/29/97 1
the United States
18 USC 1001 Knowingly and willfully 2/10/95 - 2 thru 15
made a materially false 9/26/97
statement and
represenation
14a
18 USC 1343 Fraud by wire 1/17/97 - 16 thru 19
9/26/97
As pronounced on April 28, 2000, the defendant is
sentenced as provided in pages 2 through 7 of this Judgment.
The sentence is imposed pursuant to the Sentencing Reform
Act of 1984.
IT IS FURTHER ORDERED that the defendant shall
notify the United States Attorney for this district within 30
days of any change of name, residence, or mailing address
until all fines, restitution, costs, and special assessments
imposed by this judgment are fully paid.
Signed this 28th day of April, 2000.
/s/
Albert V. Bryan, Jr.
United States District Judge
Defendant’s SSN: 579-78-7352 A True Copy, Teste:
Defendant’s Date of Birth: 9/12/54 Norman H. Meyer, Jr.; Clerk
Defendant’s address: By /s/
8404 Cherry Laurel Court Deputy Clerk
Laurel, MD 20723
15a
AO 245 S Rev. 2/99) (EDVA rev. 1) Sheet 3 - Supervised Release
Defendant: Robert F. Dvorak
Case Number: CR 99-412-001
SUPERVISED RELEASE
Upon release from imprisonment, the defendant shall be
on supervised release for a term of THREE (3) YEARS.
The Probation Office shall provide the defendant with a copy
of the standard conditions and any special conditions of
supervised release.
The defendant shall report to the probation office in the
district to which the defendant is released within 72
hours of release from the custody of the Bureau of
Prisons.
While on supervised release, the defendant shall not
commit another federal, state, or local crime.
While on supervised release, the defendant shall not
possess a firearm or destructive device.
If this judgment imposes a fine or a_restitution in
accordance with the Schedule of Payments set forth in
the Criminal Monetary Penalties sheet of this judgment.
STANDARD CONDITIONS OF
SUPERVISED RELEASE
The defendant shall comply with the standard conditions that
have been adopted by this court (set forth below):
1) The defendant shall not leave the judicial district without
the permission of the court or probation officer.
2) The defendant shall report-to the probation officer and
shall submit a truthful and complete written report within
the first five days of each month.
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
l6a
The defendant shall answer truthfully all inquiries by the
probation officer and follow the instructions of the
probation officer.
The defendant shall support his or her dependents and
meet other family responsibilities.
The defendant shall work regularly at a lawful
occupation unless excused by the probation officer for
schooling, training, or other acceptable reasons.
The defendant shall notify the Probation Officer within
72 hours, or earlier if so directed, of any change in
residence.
The defendant shall refrain from excessive use of alcohol
and shall not purchase, possess, use, distribute, or
administer any narcotic or other controlled substance, or
any paraphernalia related to such substances, except as
prescribed by physician.
The defendant shall not frequent places where controlled
substances are illegally sold, used, distributed or
aid
The defendant shall not associate with any persons
engaged in criminal activity, and shall not associate with
any person convicted of a felony unless granted
permission to do so by the probation officer.
The defendant shall permit a probation officer to visit
him or her at any time at home or elsewhere and shall
permit confiscation of any contraband observed in plain
view of the probation officer.
The defendant shall notify the probation officer within
seventy-two hours of being arrested or questioned by a
law enforcement officer.
The defendant shall not enter into any agreement to act
as an informer or a special agent of a law enforcement
agency without the permission of the court.
17a
13) As directed by the probation officer, the defendant shall
notify third parties of risks that may be occasioned by the
defendant's criminal record or personal history or
characteristics, and shall permit the probation officer to
make such notifications and to confirm the defendant's
compliance with such notification requirement.
SPECIAL CONDITIONS OF SUPEVISION
While on supervised release, pursuant to this Judgment, the
defendant shall also comply with the following additional
conditions:
1) The mandatory drug testing provisions of 18 U.S.C. §
3563(a)(5) are waived upon the courts finding that the
offense of conviction is not drug-related, there is no current or
past history of substance abuse, and there is a low risk of
future substance abuse by the defendant.
2) Pay the restitution as ordered.
18a
AO 245 S (Rev. 2/99) (EDVA rev.) Sheet 5 - Financial Penalties
Defendant: Robert F. Dvorak
Case Number: CR 99-412-001
CRIMINAL MONETARY PENALTIES
The defendant shall pay the following total monetary
penalties in accordance with the schedule of payments set out
below.
Count Special Assessment Fine
1 $100.00
: 2 $100.00
~ 3 $100.00
4 $100.00 #
5 $100.00
6 $100.00
7 $100.00
8 $100.00
9 $100.00
10 $100.00
11 $100.00
12 $100.00
13 $100.00
14 $100.00 _
15 $100.00
16 $100.00
17 $100.00
18 $100.00
19 $100.00
Total $1,900.00
FINE
No fines have been imposed in this case.
atelier erties tte rt acer tegen ae =
19a
SCHEDULE OF PAYMENTS
Payments shall be applied in the following order (1)
assessment; (2) restitution; (3) fine principal; (4) cost of
prosecution; (5) interest (6) penalties
The special assessment is due in full immediately. If not paid
immediately, the court authorizes the deduction of appropriate
sums from the defendant’s account while in confinement in
accordance with the applicable rules and regulations of the
Bureau of Prisons. |
Any special assessment. restitution, or fine payments may be
subject to penalties for default and delinquency.
If this judgment imposes a period of imprisonment, payment
of Criminal Monetary penalties shall be due during the period
of imprisonment. All criminal monetary penalty payments are
to be made to the Clerk, United States District Court, except
those payments made through the Bureau of Prisons’ Inmate
Financial Responsibility Program.
20a
RESTITUTION AND FORFEITURE
RESTITUTION
The court. pursuant to the Victim and Witness
Restitution Act, finds that the following is/are victim(s) of
defendant's criminal conduct and has/have sustained loss in
the indicated amounts and orders $1039.93 restitution by the
defendant as follows:
Name & address of payee(s) Amount
General Accounting Unit, DEA $1,039,929.10
700 Army Navy Drive
Arlington, VA 22202
Total $1,039,929.10
Payments of restitution are to be made to Clerk, U.S.
District Court.
Restitution is due and payable at the rate of $300.00
per month commencing 30 days from today. Any amount
due a victim to whom restitution is ordered in this order shall
be reduced by any amount the victim recovers from the same
loss for any co-defendant or any other source.
If there are multiple payees, any payment not made
directly to a payee shall be divided proportionately among the
payees named unless otherwise specified here:
FORFEITURE
Forfeiture has not been ordered in this case.
4 1:99-cr-00412
Alan D. Strasser, Esq. agil
Kutak Rock
1101 Connecticut Ave NW
Suite 1000
Washington, DC 20036-4374
22a
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
ALEXANDRIA DIVISION
CRIMINAL NO. 99-412-A
UNITED STATES OF AMERICA
V.
ROBERT DVORAK,
Defendant.
ORDER
For the reasons stated from the bench, it is hereby
ORDERED that the motions of the defendant for a new
trial and judgment of acquittal are denied.
/s/
Albert V. Bryan, Jr.,
United States District Judge
Alexandria, Virginia
April 28th, 2000
y age
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
ALEXANDRIA DIVISION
CRIMINAL NO. 99-412-A
UNITED STATES OF AMERICA
V.
ROBERT DVORAK,
Defendant.
FINDINGS AND REASONS
Pursuant to F. R. Crim. P. 32(c), the defendant alleged
the following inaccuracies in the presentence investigation
report (PSI): :
The defendant controverts the statements regarding the
offense conduct in paragraphs 10-13, 15, 17, 18 and 20 of the
PSI. The court finds the statements in those paragraphs are
correct.
The defendant controverts the statement in paragraph 23
as to the amount of loss and restitution. The court finds the
amounts set forth in that paragraph are correct as being an
amount reasonably foreseeable to the defendant as involved in
conspiracy at the time he became a party in the conspiracy.
However the amount of restitution should be $1,039,929.10
instead of $1,144,034.07.
The defendant controverts the statement in paragraph 29
as to obstruction of justice. The court finds an obstruction of
justice enhancement is appropriate for giving false material
testimony at trial.
24a
The defendant requested a downward departure under
U.S.S.G. § 5H1.4. The court finds such a departure is not
warranted. aly
Pursuant to 18 U.S.C. § 3553, the court sets forth the
following findings in connection with the sentence this day
imposed:
The unadjusted severity level for the offense for which
the defendant has been found guilty is 6, increased by 11
because of the amount involved (more than $800,000),
increased by 2 for obstruction of justice, increased by 2 for
more thaa minimal planning, results in an offense level total
of 21 with a criminal history category of I, this results in a
range of punishment of 37 to 46 months, a supervised release
term of years, and a fine range between $7,500 and $75,000.
Restitution was ordered in the amount of $1,039,929.10
to be paid to the Drug Enforcement Administration at the rate
of $300 per month, such payment to begin 30 days from this
date. The court finds the defendant’s resources and earning
Capacity as referenced in the presentence report, taking his
own needs and the needs of those dependant upon him, are
sufficient to enable him to make these payments. Neither fine,
costs of imprisonment, nor costs of supervised release was
ordered because the defendant’s resources are such that he
can not afford pay them in addition to the restitution.
The court adopts paragraphs 8-22, 23 except as to the
change in the amount of restitution, 24-28, 29 as amended and
30-61 of the presentence investigation report.
The court imposed concurrent sentences of 37 months
incarceration and 3 year terms of supervised release on
Counts 1-19. The court further imposed a $100 assessment
per count for a total of $1,900 due immediately. The court
imposed as a condition of the supervised release that
defendant pay the restitution as above set forth. The court
recommended waiver of substance abuse treatment and
testing as a condition of supervised release.
ad
25a
Is/
Albert V. Bryan, Jr.,
United States District Judge
Alexandria, Virginia
April 28th, 2000
26a
COPY |
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
CRIMINAL ACTION
NO. 99-412-A
Friday, April 28, 2000
Alexandria, Virginia
UNITED STATES OF AMERICA
-VS-
ROBERT F. DVORAK,
Defendant.
Transcript of sentencing proceedings in the above-
Captioned matter.
BEFORE:
The Honorable ALBERT V. BRYAN, JR., Judge
United States District Court
APPEARANCES:
FOR THE UNITED STATES:
STEPHEN P. LEARNED, ESQ.
DABNEY LANGHORNE, ESQ.
UNITED STATES ATTORNEY’S OFFICE
2100 Jamieson Avenue
Alexandria, Virginia 22314-5794
27a
* * *
DON McCOY, RMR
OFFICIAL COURT REPORTER
(703) 683-3668
APPEARANCES: (Continued)
FOR THE DEFENDANT:
ALAN D. STRASSER, ESQ.
NANCY NUNAN, ESQ.
KUTAK ROCK, LLP
vache 1101 Connecticut Avenue,.N.W.
Washington, D. C. 20036
C-O-N-T-E-N-T-S
WITNESS: DIRECT CROSS REDIRECT RECROSS
(None)
ARGUMENT BY MR. STRASSER PAGE 3, 11, 35
ARGUMENT BY MR. LEARNED PAGE 5, 26
COURT’S RULINGS PAGE 8, 39
28a
P-R-O-C-E-E-D-I-N-G-S
THE CLERK: Criminal No. 99-412-A, United
States vs. Robert F. Dvorak.
MR. LEARNED: Good morming, Your Honor;
Steve Learned for the United States.
Dabney Langhorne may be able to join me later.
She’s in Judge Hilton’s court, I believe.
MR. STRASSER: Good morming, Your Honor;
Alan Strasser for Mr. Dvorak, who is present, and with me is
also my colleague, Nancy Nunan.
THE COURT: There is before the Court the motion
for a new trial, or, in the alternative, for judgment of acquittal.
I expect it’s the other way around. But do you want to be
heard further on that? It’s been pretty well briefed, but if you
want to address it further, now is the time.
MR. STRASSER: Your Honor, I am prepared to
argue it. I think it might be helpful if I knew whether the
Court had questions that it wanted me to address so I could
focus my remarks.
THE COURT: No. I have considered everything --
at least I have tried to consider everything you have submitted
-- and I have to say this, that your motions both in essence
boil down to what you assert is the unbelievability of Mr.
Burchell.
There are other matters, too, the instruction or the
failure to give the good-faith instruction and the remarks of
29a
Mr. Learned or his co-counsel before the jury. But I know
what you are bringing up. I’m not sure I agree with all of
them, but I don’t have any questions about them.
MR. STRASSER: I think they fit together, Judge. I
agree with the Court’s description of our motions, but the
points fit together, given what I believe was Mr. Burchell’s
_lack.of credibility as a witness.
THE COURT: The jury didn’t have any problem
with it, obviously, and frankly neither do I, or did I. He was a
liar, and he was a thief, but his testimony came across as
fairly credible. And it was vigorously attacked and capably
attacked by you. But I must say I found it convincing, which
I’m sure is a blow to you, but I would be less than candid to
look at you and act like I was being convinced that he was
unbelievable. Bs
MR. STRASSER: I appreciate that, Your Honor.
Then our argument boils down to what the Court described as
instructional error, and the misstatements by the Government
in closing argument.
THE COURT: Did you object to those statements at
the time?
MR. STRASSER: I objected to the comments about
McLean Bible Church. The misstatements about Mr.
Burchell’s expectations, I do not believe I objected to during
closing argument.
30a
THE COURT: I didn’t think so, and I knew that you
had objected to some, but I couldn’t remember exactly which
ones.
MR. STRASSER: It was a circumstantial case with
accomplice testimony. The Government’s arguments, the
Government’s arguments carry a lot of weight simply because
they come from the Government.
If the jury evaluated the evidence without knowing
the that good faith was a defense for Mr. Dvorak, their
assessment of Mr. Burchell’s credibility, I think, is hard to
determine, and that really is the essence of our request for a
new trial.
Thank you, sir.
THE COURT: Mr. Learned, did you want to
respond to any of that?
MR. LEARNED: Your Honor, I don’t think it’s
necessary. I filed a lemgthy brief. The good-faith instruction,
Your Honor, the one he submitted and that he wanted read, I
guess, Only dealt with counts 2 through 19. It specifically left
out the conspiracy count. So had the Court given that
instruction as given, you know, it didn’t apply to the
conspiracy count. So, therefore, he can only overturn, the only
thing that could be overturned would be counts 2 through 19.
THE COURT: Well, that’s a fair number of counts.
MR. LEARNED: Well, that’s, but I mean, the
bottom line is that we feel the Court’s instruction clearly
covered it.
3la
Obviously, had the jury believed Mr. Dvorak, they
would have been compelled to acquit him on the instructions
that Your Honor gave.
You told the jury that they could not convict him if
what he did was by mistake or accident or words to that
effect. I have cited the precise language, and obviously had
they believed him, they would have been duty bound on the
instruction you gave to acquit him. The same thing with the
willful blindness instruction, the instruction specifically said,
you know, you cannot convict this man, ladies and gentlemen,
on the basis of negligence or carelessness.
Had they believed Mr. Dvorak, in his testimony that
he was, you know, mistaken, maybe careless, not careful
enough, they would have been duty bound. So it’s our view
that the instruction was weighed. I don’t need to go into that,
but also we feel that it was adequately covered.
Ms. Langhome, my colleague, did in rebuttal
argument appear to overstate, misstate -- I will say misstate or
go beyond what Mr. Burchell had testified to about his own
expectations about a reduction in sentence. That was a
mistake. That happens to attorneys in final argument.
It was not objected to, and that was a significant
factor, because when counsel makes an objection to the
Government in their opening statement, the Government has
the opportunity to rethink. When you are a prosecutor and
someone objects to what you are saying, you can step back for
a minute, had there been an objection, and Ms. Langhorne
could have corrected it, could have told the jury, ladies and
gentlemen, your recollection controls and so forth. The Court
could have stepped in. There was no objection.
Certainly, this doesn’t rise to the area of plain error.
As I pointed out in my opening final argument, the very first
paragraph of my opening statement was to remind the jury
that their recollection of the evidence is what counts, and that
attorneys sometimes mistakenly misstate the evidence.
32a
So I think we have adequately addressed those
issues, and I believe frankly that we haven’t really addressed
the specific issue of whether or not a stay is appropriate of
sentencing, but I think that any appeal here would be for
purposes of delay only. There really is no --
THE COURT: (Interposing) Well, we haven’t
reached that point yet.
MR. LEARNED: Right.
THE COURT: Well, on the motions for a new trial
and for judgment of acquittal, the motion for a new trial is a
little different standard. It’s whether the evidence, whether the
verdict is against the weight of the evidence, and whether the
interests of justice require a retrial.
And, as I indicated to counsel, a lot of the weight-
of-the-evidence argument is the asserted unbelievability of
Burchell.
The jury found him believable, and so did I. I can’t
find that this verdict is against the weight of the evidence or is
not in the interest of justice.
Insofar as the improper remarks of the Government,
they were fairly innocuous, I think. The misrepresentation or
misstatement as to Burchell’s expectations of a further
reduction of sentence were not objected to.
Had they been objected to, I would have instructed
the jury that it was their recollection of the evidence that
counts.
The jury was instructed that statements and
argument of counsel are not evidence in the case. And the
McLean Bible incident, it seems to me, is trivial and certainly
innocuous.
33a
As to the good-faith proffered instruction, I don’t
think a good-faith instruction is necessary where the Court
gives an adequate willfulness instruction as one of the
elements the Government must prove.
The jury was instructed that in order to convict
under any of these offenses, one of the elements that the
Government must prove was that the defendant’s activity was
willful. -
The Court defined willful as being voluntary and
intentional and with a specific intent to do something the law
forbids, that is, with the bad purpose to either disobey or
disregard the law, and not because of mistake or accident or
other innocent reason.
If they had to find that it was with a bad purpose to
disobey or disregard the law, that it seems to me negates any
good faith and is adequate even in the absence of a good-faith
- instruction. :
Motion for judgment of acquittal is a little different
standard. It is, of course, whether giving the Government the
benefit of ali reasonable inferences, no jury could have
convicted the defendant.
As I say, some of the same things are addressed in
that motion, that is, the good-faith instruction, the failure to
give a good-faith instruction, the believability of Burchell and
whether literal falsity has been proved, and materiality.
It seems to me the argument that literal falsity and
materiality has not been proved is a little disingenuous. The
whole method of this scheme was to disguise the manner in
which the invoices were worded, so that the responsive
agency official would be misled into possibly thinking that
these were legitimate purchases.
But even with that, the boat, the camper -- I mean
the trailer, the computers, the laser disks containing
pornography, it was false, and clearly false, and the jury was
34a
not hoodwinked by that, nor the clever way of wording the
invoices.
And they were designed so that the — they were >
calculated so that they would induce agency action, and that,
of course, is the essence of materiality.
So I find that neither the motion for a new trial nor
the motion for judgment of acquittal should be granted, and
those motions will be denied.
That brings us to sentencing, and there are several
matters that counsel have brought to my attention as far as the
asserted errors in the presentence report, but initially, Mr.
OO, RNS Fee See ee ee ee ee
report with your attorneys?
THE DEFENDANT: Yes, Your Honor, I have.
THE COURT: Have you seen the errors that they
have addressed, the asserted errors?
THE DEFENDANT: Yes, sir, we have discussed
them.
THE COURT: Are there any other matters in the
report with which you disagree?
THE DEFENDANT: No, sir.
a
Fax
THE COURT: All right, sir. Then, counsel, you
want to address the calculation of the loss and the obstruction
of justice.
35a
You also, of course, disagree with the offense
conduct which is, as you point out, the Government’s version
which both the jury and apparently the Court accepted, but if
you want to address in more detail the calculation of the loss
or the obstruction of justice, I’ll hear you on that.
MR. STRASSER: Thank you, Your Honor.
Your Honor, I also would wish to address the
; restitution issue.
THE COURT: Well that’s tied in with the
calculation of the loss, and you also request a downward
departure under Guideline 5(h)1.
MR. STRASSER: Let me begin with the calculation
of the loss. My fundamental objection to the calculation of the
loss that’s proposed by the Government and accepted by Ms.
Blanchard, is that it rests essentially on the word, the post
facto word of Mr. Burchell of saying, I stole that, I stole that,
I stole that, I stole that, and therefore, Mr. Dvorak is
responsible for it.
It essentially comes down to what I think is
arbitrary, to Burchell saying after the fact those are the things
I stole. But the guidelines don’t make the loss calculation turn
on the same principal as the principal of criminal liability, but
instead require a certain element of foreseeability.
I will not talk about the foreseeability on the laser
disks or the boat or the camper that the Court just referred to,
but on the other items, there are items that are like the ones
that Ritz sold to the DEA and sells to other Government
agencies, computers, isions, computer monitors, video
projectors, standard audiovisual equipment, much of which
Ritz sold to DEA, and Burchell, it turned out, stole.
36a
Saying that Mr. Dvorak is responsible for all of that
is to say that he knew in advance what Mr. Burchell was
doing, and that is the point that we contest. But even
Burchell’s testimony didn’t suggest that he told Mr. Dvorak
as to each item.
THE COURT: No, I’m sure he didn’t. Everybody
seemed to sort of, don’t ask any questions.
MR. STRASSER: That’s it, Judge. That is what
swayed the jury is the willful blindness instruction, the
conscious avoidance instruction, that the jury looked at this in
hindsight and said, Mr. Dvorak should have asked some more
questions. He should have done more, and since he didn’t, he
is guilty of a crime. But not asking questions is different than
knowing. It’s different than foreseeing.
THE COURT: But it can be conscious avoidance.
MR. STRASSER: Your Honor, I agree that it could
support a finding of guilt, but that’s different than reasonable
foreseeability, which is the standard under the guidelines. And
that is why we have distinguished from the vast majority of
that equipment, three-quarters of it, which is
audiovisual equipment that we contend was not foreseeable
that Mr: Burchell was stealing.
It is not the kind of stuff you use in your house. It is
commercial equipment. It is used in courtrooms and in
corporate presentations. It is just not the sort of equipment
that a person takes, and so we suggest that it is unfair under —
the guidelines to attribute all of that loss to Mr. Dvorak.
On the obstruction question--
37a
THE COURT: (interposing) I might tell you in
advance, I’m not as concerned on the obstruction of justice
aspect on the failure to, on the document that allegedly was
not produced in response to the subpoena. That could go
either way. I’m willing to give the defendant the benefit of the
doubt on that.
But I do think there is a legitimate issue whether he
took the stand and lied, and that would be, if I find an
obstruction-of-justice enhancement, appropriate, it would be
on that prong that is mentioned in the presentence report.
pena
MR. STRASSER: That is a prong that the
Government has not argued. The Government’s sentencing
memorandum seeks the enhancement only on the document.
THE COURT: But I’m not bound by what the
Government does.
MR. STRASSER: Of course not. But I think then
there is a question of notice to Mr. Dvorak about what
precisely was the false testimony that he was supposed to
have given. The presentence report is not illuminating on that
point.
To be sure, Mr. Dvorak said he was not guilty of the
offenses.
THE COURT: That he didn’t know anything about
any of this, what these -- was not aware that these purchases
were not legitimate DEA purchases. ,
MR. STRASSER: That he believed otherwise, I
think was his testimony.
38a
THE COURT: Yes.
MR. STRASSER: And I guess I don’t -- (pause).
THE COURT: And that was the issue in the case,
really, whether he acted willfully.
MR. STRASSER: I agree, Your Honor.
THE COURT: There wasn’t any question that these
items were stolen by Burchell, and so the real issue in the case
was whether the defendant knew that they were being stolen
or misinvoiced, or whether he believed to the contrary.
MR. STRASSER: And that’s why I think the
willful-blindness instruction was so important to the jury’s
verdict, because looking at it with the safety of hindsight, the
jury could say you should have -- to Mr. Dvorak -- you should
have asked for questions. You should have pressed Burchell.
When Burchell said, It’s not for you to know, you should
have said something to that, or you should have called
somebody else.
Now, to my mind, the great irony, of course, is had
Mr. Dvorak say called Mr. Bucklin or Mr. Whiteside, Mr.
Burchell’s supervisors, who were in on the scheme, too, it
would have done no good at all. But that also is with
hindsight. It’s not something that Mr. Dvorak knew at the
time.
Put another way, Your Honor, I think Mr. Dvorak’s
testimony about what he believed at the time is not even
inconsistent with what Burchell said, but I think the jury sized
that up and said, You may actually have believed that, but you
39a
should have asked more. You should have gone farther than
that.
There were, I suppose, in the jury’s mind enough
red flags so that Mr. Dvorak should have taken affirmative
steps to find out what Burchell was doing, but none of that
makes any of his testimony false.
I suggest his testimony, or put another way, his
testimony could have been true, and the jury could have said,
Well, even if we believed every word you said, under the
instruction as given, we can find you guilty for your
conscious avoidance of knowledge.
And that, that says to me there is nothing here -- I
have overstated -- there is an inadequate basis for an
enhancement for obstruction of justice for perjury, no
particular false statement, no statement made with the intent
of interfering with the proceedings. Mr. Dvorak testified to
what he believed.
The jury said, That wasn’t enough, what you
believed.
So, I suggest to the Court that an enhancement for
perjurious testimony in this case is little different than an
enhancement for a denial of guilt. It is different than the cases
where someone testifies a transaction didn’t happen. The
police didn’t take the drugs off me. I didn’t sign that
document.
Those kinds of cases where the perjury is clear, it is
provable, this wouldn’t be a provable perjury case, just a
conflict in testimony between two witnesses. So I don’t think
that an enhancement for obstruction is warranted.
Does the Court wish me to address the restitution
issues now?
THE COURT: To the extent you think it’s different
from the amount of the loss, yes.
—————————————
40a
MR. STRASSER: Only two points on that, Your
Honor: One is I believe there is an ex post facto issue here in
the application of the Mandatory Victims Restitution Act to
conduct that occurred before the effective date of the act.
THE COURT: I suggest that the law on conspiracy
is that if the conspiracy straddles the effective date that its
post effective date is applicable without any ex post facto
problem. You disagree with that?
\
MR. STRASSER: Your Honor, I would agree that
the conduct after the effective date would be subject to the
statute, just as the conduct that’s in the false statements count
that occur after the effective date of the statute is subject to
that statute.
But the conduct before -- well, I guess my answer
on that is there isn’t binding precedent in this circuit that
holds that the conspiracy count does, that the act does apply to
a conspiracy that straddles it. I think other courts, including
the D.C. Circuit, have suggested that there is an ex post facto
issue there.
The second issue on restitution is the extent of the
Government’s recovery of the identical items. We suggested
in our objections to the presentence report, and again in our
submission to this Court, that the Government had recovered
pretty much everything.
The Government responded to that by saying, We
did not, that there was recovery of only a certain amount of
property as a, quote unquote, administrative forfeiture.
But the Government’s valuation of that property is
undertaken at Mr. Dvorak’s detriment. That is, some of the
property recovered both from Burchell and from Michael
Hendrix is the identical property that Ritz sold to Burchell,
which, when the DEA bought it, was valued at one level; but
4la
when the DEA recovered the identical property, it was valued
at about a third of that.
The Government suggests that there is no basis to
credit Mr. Dvorak for restitution purposes for property that is
recovered through administrative forfeiture.
And Mr. Learned handed to me this morning the
Fourth Circuit’s decision in United States vs. Alalade, A-L-A-
_L-A-D-E, which is at 204 F 3d 536, which is a case in which
the defendant forfeited property administratively and then
argued that he ought to be credited for it in the calculation of
restitution.
What the Court said is he would not be credited for
that recovery when there was no evidence that the victims had
actually received it. In that case the victims were banks.
Footnote five of the opinion carefully states that the
Court reserves the question of what effect it would have if the
administrative recovery had actually gone to the victim. In the
case before this Court it is the same institution that forfeited
the property and recovered it; that is, it is the Justice
Department.
So all of that has gone exactly to the victim of the
offense, and I suggest ought to be credited and not at the
value that the Government attributed to it based on an
undisclosed standard.
THE COURT: What does your calculation of that
do to the restitution amount that the presentence report
recommends? By how much does it reduce it?
MR. STRASSER: Your Honor, I don’t have a
calculation of it since I just saw the Government’s answer on
this in the last couple of days. I would say the difference is
some hundreds of thousands of dollars. The Government's
submission -- if I may have the Court’s indulgence one
42a
moment -- the Government’s submission on Wednesday
reported a number.
THE COURT: $1,039,000?
MR. STRASSER: But not as the value of the
property recovered. What the Government reports is the value
of the property recovered is $476,000 and some odd. That
$476,000, some fraction of that, probably half, is
undervalued, I would say, by two-thirds.
The Government also says that electronic
equipment valued at $33,000 was obtained from Hendrix.
Now, I have not had the chance to go back to Mr. Hendrix’s
plea agreement and figure out how the Government derived
the number of $33,000.
What I can tell from looking at Mr. Hendrix’s plea
agreement is that there’s a column on it that lists the invoice
cost of the property, which totals about a half million dollars
and then a column that lists the value of the property, which
has it at about $200,000, a little bit less than $200,000. That’s
where I get the figure that is understated by approximately
two-thirds.
This is a rough calculation, to be sure, but that
suggests to me that the Government recovered about
$100,000 worth of property from Hendrix and somewhere
around $800,000 or $900,000 worth from Burchell.
I did not see on the plea agreement for Burchell
some valuation of other property that he had forfeited to the
Government. He testified that he had forfeited his DEA
pension.
THE COURT: He’s been ordered to make
restitution in a substantial amount. It’s in one of your_
pleadings, but I can’t remember which.
43a
MR. STRASSER: I think it’s $2.6 million, Your
Honor, and the Government represents that he has made
restitution of $79,000.
It is impossible to tell from what the Government
has provided whether that includes the present value of the
annuity that represents his pension for his expected life span.
He is a man in his fifties. I would expect that that annuity
would be worth some substantial amount of money. None of
that is -- that is recovered by the Government, but not credited
to Mr. Dvorak.
And that’s why we said in rough terms the
Government has recovered everything already from Mr.
Burchell and from Hendrix.
The Government has also forfeited, and I believe
Mr. Burchell testified that he lost his houses to the
Government. I frankly do not remember seeing that valued in
the plea agreement either.
That is my argument on the restitution point.
THE COURT: Do you want to be heard on the
downward departure?
MR. STRASSER: I do want to be heard on that,
Your Honor.
We seek a downward departure for Mr. Dvorak for
two reasons. The primary reason is an extraordinary physical
impairment, but that first reason links to the second reason,
which is that he would be unusually vulnerable in prison. And
let me talk briefly about that second one first. He is not a large
man. He is not a tall man or heavy man, and he is by no
means a strong man. He is hampered by having to carry
around with him this breathing apparatus that he has with him
in court. And I suggest that that alone would make him
vulnerable in prison.
44a
But the more compelling reason to my mind is the
difficulty that he has in breathing, which he has felt the
Symptoms of it over the last months, but having the reluctance
that I think is not unknown among certain males, he didn’t go
to the doctor to find out what it is about.
And having gone to the doctor after the trial to learn
about his health, he learned that he had a serious breathing
problem that has gotten worse through his life and could be
expected to continue to get worse. It comes from the scoliosis
that he has, which has the effect of compressing his lungs.
It means that he can’t walk any substantial distance.
It means he can’t carry things. During the trial even, he was
unable to carry -- we had notebooks galore during the trial
filled with all manner of documents, and Mr. Dvorak was
unable even to carry one of those.
During the trial when we decided to leave the
courthouse for lunch and go to the carryout that’s just one
block away, Mr. Dvorak was unable to walk that distance. It
affects his life, and this was even before he went to the doctor.
He just knew he couldn’t walk that distance.
He now has with him when he’s at work this
portable breathing apparatus. He has at home an oxygen
generator, which is a stationary device that has a very long
hose on it.
Even that has not proved adequate for him to be
able to breathe adequately at night. And when Dr. Elson saw
Mr. Dvorak again yesterday, he prescribed for him what is
called a noninvasive ventilator for use at night.
I have spoken to the respiratory therapist about this,
who tells me that it is a mask that fits over, that’s strapped to
one’s face and then attached to a device that generates
oxygen, and that would permit Mr. Dvorak to breathe at night.
The implication of this impairment for Mr. Dvorak
is there is basically nothing that he can do in prison. He can’t
45a
walk. He can’t carry. He can’t climb. There is virtually no
activities that he could undertake.
We spoke to Mr. Hicks in the Bureau of Prisons,
apparently the same person that Mr. Learned spoke to, about
what prisons in the Federal system could accommodate Mr.
Dvorak with this medical problem. Mr. Hicks told us there
were two, the one in Lexington, Kentucky, and the one in
Rochester, Minnesota.
He said that he expected that there would be another
one open in Massachusetts, but that wouldn’t be ready until
the end of the year.
What strikes me about it, though, is that sentencing
Mr. Dvorak to one of those prisons would mean essentially
putting him in the cell, either in his bed or in his chair, for the
entire duration of whatever sentence the Court would impose,
because there would not be anything else that he would be
_able to do in the prison.
I wonder whether that is really a wise use of the
taxpayers’ money. I wonder, given the nature of the offense
here, whether that is something that is required for
punishment of Mr. Dvorak. He has not had anything to do
with the Government or Government customers in a year,
something that Ritz undertook as a precautionary measure,
not knowing what would happen in this case.
He obviously poses no danger to anyone. When I
say that, I don’t mean to minimize the offense. The jury found
him guilty, and the Court has made clear its view of the
evidence. I do not mean to suggest that Mr. Dvorak’s conduct
is de minimis.
But I do mean to suggest that the guidelines permit
recognition of the extraordinary impact that the service of a
sentence would have, and this would be. This would be in
essence solitary confinement. This would be basically sitting
in a jail cell for the entire duration of the sentence.
46a
I suggest that the public would be better served, and
the issues of deterrence would be better served by not forcing
the taxpayers to bear that burden, but instead sentencing Mr.
Dvorak either to a halfway house or to home detention, with
other appropriate requirements. So we would ask the Court to
depart downward to a sentence that would permit that.
When we spoke to Mr. Hicks in the Bureau of
Prisons, and should the Court disagree with me, let me ask
then as to the next step. Mr. Hicks said it was important that
Mr. Dvorak be permitted to surrender voluntarily to the
prison, because he said it would take some time to arrange for
suitable transportation. So that frankly was his suggestion and
not ours.
In any event, should the Court disagree with our
recommended sentence, and we would ask the Court first to
release Mr. Dvorak pending an appeal, as we do intend to
note an appeal, and if the Court is unwilling to do that then to
order that he surrender voluntarily to the Bureau of Prisons
upon notification from the marshals.
But I hope we don’t get to that point. I hope the
Court agrees that a more suitable sentence would be one in a
halfway house or home detention, and that is the sentence that
we ask the Court to impose.
THE COURT: All right.
Mr. Learned, on the presentence report objections,
an item that concerns me is whether or to what extent there
ought to be credited against the restitution directive the value
of recovered assets. You have a fairly minimal figure on that.
MR. LEARNED: Yes, Your Honor.
THE COURT: And counsel suggests it ought to be
47a
MR. LEARNED: Yes, let me address that. Your
Honor, if I may submit to the Court, and I apologize, I came
across this Fourth Circuit case that came down in late
February of this year, U.S. vs. Alalade, which backs up the
Seventh Circuit opinion, Emerson, on specific administrative
forfeiture is not an offset. I believe on page three of that
opinion, Your Honor, if you look at the second column, on
page three, the bottom, the first full paragraph, page three, on
the right-hand side, you can see it:
We fully agree with the Government that the plain
language of the MVRA did not grant the District Court
discretion to reduce the amount of restitution required of the
order by an amount equal to the value of the property seized
from the defendant here and retained by the Government in
administrative forfeiture.
In other words, I mean forfeiture is an entirely
different remedy. It’s not mutually exclusive. Now, that’s the
law. I apologize for not bumping into that case until just the
very last minute.
But again, dealing with this issue of the value of the
property now, to give the Court historical perspective. Mr.
Burchell pleaded guilty to a major conspiracy to defraud the
United States. He was involved with other people. He was
involved with another vendor who had nothing to do with Mr.
Dvorak.
What the department did with him when he was
debriefed was to lay out on the table all the invoices that he
was involved with, and he identified the items which he
embezzled, and those items were paid for by the Drug
Enforcement Administration to the tune of $2.68 million.
Now, at the time of the search warrant the
Government seized all kinds of things, seized a host of
movies and music, equipment and so forth, bank accounts,
Cars.
48a
As I understand it, the forfeiture unit has valued
what it seized from him at $476,000. Now this is not inflated
dollar figures. This is not what DEA paid — this is the value.
The Government has valued, and I don’t know exactly how
they do it, the forfeiture unit. They take a big-screen
television set, and I don’t know whether it’s still in the box or
not, but they put a dollar on it.
Obviously, the bank accounts they seized, but
everything they seized from him and administratively
forfeited, which simply means that he did not contest, that’s
what that means, was valued at $476,000.
Now what did all that include? I don’t really know,
Your Honor. I know that it includes some bank accounts. It
included, I think, at least two cars. You cannot
administratively forfeit a house. That's real estate. That has to
be done differently.
The financial litigation told me that he has paid or
he’s credited with $79,000 payment on his $2.6 million
restitution, and I do know that he lost his pension, not his
military pension. He’s a retired military guy, and he is still
apparently eligible for that, but his Government pension,
because he had like 25 years in or 20 years in with the Drug
Enforcement Administration. He gave that up. I don’t know
exactly where that fits. I don’t know whether that would be
deemed to be administratively forfeited. That might be where
it is, or it might be in the $79,000.
But that’s all the Government has to show for Mr.
Burchell, $476,000, and then $79,000. He’s admitted to $2.6
million worth of fraud.
Now, this Mr. Hendrix was a coconspirator on the
Dvorak matter as well as some other things. When they went
in, and we actually didn’t do a search warrant on his house,
but he pleaded guilty. He had a lot of equipment. Now he had
been selling equipment. He had a lot of equipment. We
administratively forfeited $33,000 of his stuff.
49a
And then Jean Burchell, who to a minor degree,
played a role in this case. She was the ex-wife of Burchell.
She worked at DEA. We forfeited her Jeep Cherokee because
Burchell told us that money he used from embezzling the
equipment he bought her the car. So we embezzled (sic) her
car. So the Government has collected, you know, add the
figures up. We are talking about maybe $600,000 or
something out of the $2.68 million loss.
So that’s where the Government is, and, you know,
I don’t know how else to explain it other than that. The law is
clear in my opinion, particularly with this Fourth Circuit
opinion. I mean, you know, you don’t get credit.
Even Burchell himself didn’t get credit for his
forfeitures. He got stuck with the full restitution, and all this
equipment and bank accounts and cars and everything went.
He didn’t get credit for that.
I hope that addresses that issue, Your Honor, if I might
move on to some other issues.
THE COURT: All right.
MR. LEARNED: I want to address this allegation
that I misrepresented to the Court my conversation with Dr.
Elson. When I read counsel’s sentencing memorandum, the
whole thrust of this memorandum is that the defendant is so
severely limited, is such in bad physical shape that he can do
nothing useful virtually, and that, you know, he can’t do any
menial jobs. He can’t even do his own laundry. He can’t put --
he’s in such bad shape he can’t put clothing into a laundry
machine and push a button and pour some cleaning fluid in it.
But, in any event, the key thing that counsel said
was that the Court would be sentencing Mr. Dvorak to a
prison hospital bed. Now that to me was a gross distortion,
and what that implied was that medical professionals at the
50a
FCI would look at Mr. Dvorak and say, Well, you know, you
are in such bad shape you belong in a wheelchair or a bed.
That’s it.
And Dr. Elson specifically rejects that conclusion,
and I stand by that. Even in his counteraffidavit he says
confinement to a bed is completely inappropriate for this man.
And that was the conversation I had with him.
I mentioned a wheelchair. I said, Does Mr. Dvorak
belong in a wheelchair or a bed?
He says, No. At that point, he said to me, the kind
of activities he’s had for the past six months, he should be
able to continue-with his ambulatory oxygen.
Now, counsel says he can’t walk anywhere. Well,
he came into this courthouse for three days in the trial. It’s
more than -- you know, he says he can’t walk more than 50
feet. It’s more than that to the elevators.
He got up and testified unassisted. He can walk
around. I realize he’s severely limited in terms of, you know,
the length of time for him to walk places and so forth. We
don’t deny that. Obviously, he needs ambulatory oxygen, but
to say that the Court would be sentencing this man, as counsel
just said a minute ago, to solitary confinement, to a hospital
bed is absolutely rejected by the medical advice of his doctor,
who says that is not the appropriate medical determination.
THE COURT: I don’t need to hear any more about
that.
MR. LEARNED: In any event, Your Honor.
So, let me just address a couple of other things. The
calculation of loss, obviously, as we pointed out in our piece,
the standard items, a lot of standard items were sold, but this
is not dependent upon Mr. Dvorak’s testimony.
5la
Government’s Exhibit 160, which was prepared by
the FBI Agent Steven D’ Antuono, he did a careful analysis of
the description on these items that are in the internal records
of Ritz versus the description on the invoice going to DEA,
and he showed on that exhibit about $900,000 worth of items
which were, you know, it was clear that there was a
misdescription or an inaccurate description or some sort of
incomplete description, which is inherently deceptive, Your
Honor.
And clearly, you know, Mr. Dvorak realized that
while he was selling a car stereo, that’s standard for him to
sell, but it’s not standard for him to call it an electronic box.
It’s standard for him to sell a digital camera, but it’s not
standard for him to sell it as an optical device.
So those descriptions in the calculation of loss is
really based upon the analysis of the documents, as much as
anything else.
Also, we do not abandon, Your Honor, the idea that
there should not be obstruction because counsel lied. The fact
that I didn’t argue that in my sentencing memo means that I
was not going to argue what I felt to be was obvious.
The Court sat through the testimony. Mr. Dvorak
_testified about some specific documents. I wanted to lay the
foundation for documentary obstruction, and I pointed out in
my brief this specific document here where he wrote, Copy of
purchase order never received, and then produced the
document.
We have established, and he testified on the stand,
that he did not create that writing later on at another point in
time. In fact, here is the purchase order number, and on this
very document it says, See purchase order. We have
established that there were 35 times his order form had that
documentation, yet only one time, only once does it occur that
the purchase order is not available.
52a
This Exhibit 18, as I pointed out at trial, Your
Honor, was a very significant document. He took the position
that Burchell somehow created this document, he had nothing
to do with this document. And yet there are very suspicious
circumstances just looking at the documents, which we have
laid out and explained in Agent D’ Antuono’s deposition.
There’s all these unusual coincidences that all
intersect with this one transaction which he disavows, claims
he had nothing to do with that invoice. That’s clearly lying.
But we didn’t abandon that as a theory of obstruction.
We felt the Court should see the significant
obstruction at the investigative level, and we laid out in very
detailed form why you could conclude that and why the
nature of the documents themselves and the circumstances
gave very powerful corroboration to Mr. Burchell’s
testimony.
Obviously, he lied about, there was one
conversation that Burchell testified that after he got the
camper, he showed him the camper, and he testified that Mr.
Dvorak came out and opened up the back and looked in the
camper. ,
Mr. Dvorak testified he never saw the camper,
never saw it, never went in and looked at it. He didn’t even
realize that the camper that he happened to see, you know, at
some point, never went and looked at it, never made the
connection, never made the connection at all. He had trailers
on the back of his cars. Never made the connection.
He testified that, I mean there are numerous
instances, Your Honor, that was just direct testimony, you
know, in direct contradiction to what Mr. Burchell said. So
we think that obstruction, this is a clear case of it. Of all the
cases that I have tried, I can’t think of a better case really.
So, again the conspiracy straddles this mandatory
act, and again, I think the forfeiture item is just a separate
remedy.
53a
I can’t think of any other matter, Your Honor. I
think I have addressed those, unless the Court has a question.
THE COURT: Mr. Strasser, do you want to respond
to any of that?
MR. STRASSER: I do, Your Honor.
Let me start with the obstruction. I don’t think the
contradiction between two witnesses’ testimony is enough to
support an obstruction enhancement. Mr. Learned has
advanced the proposition that the uncorroborated testimony of
Mr. Burchell about the camper or the trailer or seeing some
document would be enough for an obstruction peamanconient
as against Mr. Dvorak.
I don’t think the guidelines are intended to heap
additional punishment on a defendant who contradicts a
Government witness. The jury didn’t have to accept a word of
that testimony from Burchell to have found Mr. Dvorak
guilty. So there is no way to tell what the jury found on that
question. I don’t think it could turn on-who the Government
finds more believable.
On the restitution issue, the Government correctly
quoted from the decision that it provided to me this morning
and to the Court this morning, but it omits any reference to
the last footnote in the case, which reserves precisely the issue
in this case, that is, once the victim receives the value of the
forfeiture, should the District Court credit that toward the
restitution? And, of course, the victim has in this case. It is the
same entity that is receiving the restitution and the
administrative forfeiture.
The statute provides that once the Court has set a
restitutionary amount, it should then reduce the restitutionary
amount by any amount the victim has recovered through civil
litigation.
setae ieee
54a
It seems to me that it would be the height of
irrationality for the DEA to be able to recover these items
through administrative forfeiture. Mr. Dvorak does not get
credit for that. As to the DEA recovering it through civil
litigation, then Mr. Dvorak does get credit for that.
As to the evaluation of the items, I can't tell on
what basis the forfeiture unit valued them either. I know from
the discovery that the Government provided in this case that,
when the FBI came to Mr. Burchell’s house in October of ’97,
it seized a variety of items. And to suggest that those items --
then the Government had them from that point forward. Then
to suggest that they ought to be --
THE COURT: (interposing) Going back to your
restitution issue just a minute, was anything forfeited that was
seized from the defendant?
MR. STRASSER: No.
THE COURT: Do you sense a problem with giving
him any advantage from things that were seized from
somebody else? Why should he get -- (pause)?
MR. STRASSER: It’s the same, well, the
fundamental problem, of course, is Mr. Dvorak didn’t get
anything to begin with. It all went to his company, not to him.
He literally could not pay it back, because he didn’t get it to
begin with, and that’s really the problem that I think I’m
addressing first.
But, secondly, how many times can the Government
recover for the same loss? The statute provides that the Court
could order the return of the property itself. Well, Mr. Dvorak
doesn’t have control of that, but the Government has control
of it. It seized a lot of it from Mr. Burchell back in October of
TT
55a
"97 and has had it ever since. And if that would satisfy Mr.
Dvorak’s restitution obligation, that is the return of the
_ property itself, I don’t see why he should not get credit for it.
THE COURT: Okay.
MR. STRASSER: I don’t think the statute also puts
a limit on who the recovery should be from in the civil
litigation. Again, it’s a question of how many times should the
Government recover for it?
As to the point about sentencing Mr. Dvorak to a
hospital bed, I did not mean to suggest in my sentencing
memorandum that he would be sentenced to bed rest. His
doctor says that is not appropriate. What I do suggest, though,
is that the range of activities that’s available in prison is pretty
limited.
THE COURT: It is for everybody.
MR. STRASSER: Yes, sir, but when you take Mr.
Dvorak, with his physical limitations, and put him into that
facility with that limited range, it’s going to mean that there’s
nothing he can do. It is not just a question of saying he could
do the same things he could do at Ritz. He can’t. Those things
won't be available to him in the prison, so that would be
essentially sentencing him to sit in a jail cell for whatever
length of time the Court would impose.
THE COURT: All right.
MR. STRASSER: Thank you.
56a
THE COURT: Well, addressing the objections
made under Rule 32, as far as the amount of the loss is
concerned in paragraph 23 of the report, I find that the
calculation of the amount of that loss, as well as the restitution
order in the amount of $1,039,929.10 is appropriate.
I find that that amount of loss as a result of the
conspiracy was an amount, and the items lost which go to
make up that amount, was reasonably foreseeable to this
defendant on and after February 14th when his participation
in the conspiracy began; and I think it’s appropriate to hold
him accountable and require his restitution of that amount.
He will, of course, be held jointly responsible with
Burchell for that amount, but that is an appropriate amount.
To the extent that there is any ex post facto problem involved,
and I don’t believe there is, the only difference is that
following the amendment of the Victims Protection Act, or
whatever it was, the act that made restitution mandatory, prior
to that time the only inquiry the Court was to make was to
whether the defendant’s resources were such that he could
make the payments, taking into account his own needs and the
needs of those dependent upon him, he has the capability of
making these payments at the rate that I will order, whether
the restitution is mandatory or not.
Insofar as the other objections to the report, that is
the offense conduct in paragraphs 4 through 7, 10 through 13,
15, 17, 18, and 20, I find that the findings and statements in
the presentence report are correct. Obviously, as counsel for
the defendant points out, it’s the Government’s version of the
things, but the jury accepted the Government’s version of the
things, as do I. And those statements are correct.
The obstruction of justice enhancement in my
opinion is warranted, because I find that the defendant's
statement that he was not only unaware of the deviousness
and culpability of Burchell, but indeed he thought, to the
contrary, that these were perfectly legitimate purchases for the
DEA is both false and material.
57a
This is not just the defendant against the word of
Burchell. This was false testimony, and it was the testimony
which centered around the real issue in the case. There wasn’t
any question there had been embezzlement. The only real
question as far as this defendant was concerned is whether he
knew of it and participated in it, and in my opinion his
statement that he did not know it was false and was material
in that it was the basis upon which the jury, or could have
been the basis upon which the jury acquitted him. So that
enhancement is justified.
As far as downward departure is concerned, while
there is no legal prohibition against the Court granting such a
downward departure, I do not think that it is justified under
these circumstances. Guideline 5(h)1.4 entitles the defendant
or permits the Court to make a downward departure where
there’s an extraordinary physical impairment.
; There is a physical impairment. The defendant is
limited, but his medical condition is not such that it cannot be
handled adequately by the Bureau of Prisons, making him
have accessible to him whenever needed, and indeed at all
times if needed, the ambulatory oxygen cannister.
He may be vulnerable in prison, but that
vulnerability is no different from any other slight, elderly
person that is there. So the motion for a downward departure
is denied.
I find, therefore, that for guideline purposes, the
base level for this offense is six, increased by 11 because of
the amount involved, that is, more than $800,000, indeed
$1,039,929.10, increased by two for the obstruction of justice,
increased by two for more than minimal planning results in an
adjusted level of 21.
With a criminal-history category of Roman numeral
I, this results in a range of 37 to 46 months, or 36 to 46
months, a two- to three-year term of supervised release, and a
fine of between $7500 and $75,000.
58a
With that background, Mr. Strasser, Ill hear any
further statement you want to make on the defendant’s behalf
or any other information you want to bring to the attention of
the Court.
MR. STRASSER: Your Honor, I would ask you to
sentence him at the bottom of the range. Mr. Burchell is
serving a sentence only of 40 months, and he was the
mastermind of this scheme and the person who brought in a
much wider variety of people, and caused the --
THE COURT: (interposing) Did he get a Rule 35
reduction in his sentence.
MR. STRASSER: Yes. He began with a sentence of
48, then it was reduced to 40.
THE COURT: All right.
MR. STRASSER: As to the fine, I don’t think Mr.
Dvorak has the resources to pay any sort of fine. I would ask
the Court to be mindful of the limitation on his resources in
establishing a repayment schedule. His resources are limited,
as shown by the presentence report.
Other than that, I don’t think I -- well, I would ask
again the Court to release Mr. Dvorak first of all pending an
appeal. I understand it is not the Court’s practice to do that. I
would ask.
THE COURT: It’s not my practice to allow
voluntary surrender, but I don’t have any particular practice --
maybe the Bar thinks I do, and they may have a better read on
59a
it -- but I don’t have any preconceptions about stay pending
appeal. I will address that after I impose sentence.
MR. STRASSER: Very well.
THE COURT: Will the defendant come forward.
Mr. Dvorak, is there any statement you want to
make on your own behalf, sir?
THE DEFENDANT: Well, Your Honor, I’m very
very sorry that I was in any way connected to these crimes.
And contrary to your belief, sir, 1 was tricked and fooled by
Robert Burchell into believing that the items purchased were
for the DEA.
I did not knowingly and willfully conspire with this
man to defraud the U.S. Government. The people who know
me know that I would never do anything like that.
There are other things to say here, but, Your Honor,
I realize that the jury has found me guilty, and I must accept
the consequences.
I profoundly regret that the embezzlement scheme
was not obvious to me at the time it was being carried out,
and I’m sorry; and I hope you will show me some
compassion.
THE COURT: All right, sir. Anything further you
want to say to the Court?
THE DEFENDANT: No, Your Honor.
SRI a
60a
THE COURT: Any reason why the Court should
not now impose its sentence?
THE DEFENDANT: No, Your Honor.
THE COURT: Any statement the United States
Attorney wants to make?
MR. LEARNED: None, Your Honor.
THE COURT: Well, it will be the sentence of the
Court that the defendant be committed to the custody of the
Attorney General or her authorized representative for
imprisonment for a term of 37 months on each of the counts 1
through 19, those sentences to run concurrently.
There will be a three-year term of supervised
release on each count, also to run concurrently. There will be
restitution ordered in the amount of $1,039,929.10, owed
jointly with his co-defendants, payable at the rate of $300 per
month, beginning 60 days after his release.
I find that his resources are such that taking into
account his own needs and the needs of those dependent upon
him, he is well capable of making that.
I will impose as conditions of the supervised release
that he pay the restitution, and I will waive the substance
abuse testing and treatment general requirement of all
supervised-release defendants.
Because the defendant did not plead guilty, he is
advised he has the right to appeal. If he’s unable to pay the
cost of an appeal, an attorney will be appointed for him for
that purpose. If he desires to take an appeal, notice of that fact
must be given the clerk within ten days.
6la
We now have the issue of whether the execution of
the sentence ought to be suspended pending appeal, and I take
it there will be an appeal.
MR. STRASSER: Yes.
THE COURT: Mr. Learned, you oppose release on
bond pending appeal. Do you really think this defendant is
going anywhere?
MR. LEARNED: No, but I mean I know how long
appeals last, Your Honor, and I also know that, if I might add,
the restitution order that the Court has fashioned that he
doesn’t have to pay anything until 60 days after his release, I
wonder if the Court could modify that. He has stock in a
company that’s worth $150,000 by his own account.
aed
THE COURT: Well, I will consider whether, when
that 60 days begins to run, depending on whether he is
out on bond pending appeal or whatever. If he’s
incarcerated, I’m not going to require it.
MR. LEARNED: Your Honor, the problem I have,
obviously, if there were a substantial question here, but I
mean it’s the perception of the public that’s at stake here. I
mean this man is well known in this community. I realize
there wasn’t much press on this case, but among people who
sell audiovisual equipment who do business with the
Government, this case is well known. This is a big case. A lot
of people know about this.
A man gets convicted, and then, you know, he is
still there in the community. I mean, months go by, and, you
62a
know, didn’t I hear, I thought this guy was convicted months
ago. What's going on?
The perception of someone who's been convicted
and then hasn’t gone to jail, hasn’t been sentenced for months
on end, I think it just is very detrimental to the public
perception of justice.
I know how long these appeals take. I mean, you
know, counsel, he is not going to push it along very fast, and
the Court of Appeals has got a lot of things. I mean, it’s
sometimes a year, more than a year, I have had cases of that
sort. And it just, obviously, if there were a matter here, a close
legal issue where there might be case law going different
ways, but I mean everything is clear in this circumstance.
I pointed out that good-faith instruction, even if he
wins on that point, he is not contesting the conspiracy count,
so let’s assume he wins that count, or wins that argument in
the Court of Appeals, he still comes back. He’s convicted of
conspiracy. The conspiracy covers the whole time frame. He's
still stuck with everything the court has sentenced.
The only other thing, I mean, we have got a plain
error problem with a prosecutor who misstated some
evidence. It was such an isolated, harmless thing. I mean, it’s
really a completely harmless error. So, I don’t see any issue
there.
1 do feel that there’s a significant perception. I
mean, people, poor people all the time get convicted, and they
are sent out, and in this particular courtroom, boom, they go
right away. And the perception is, you know, you got a
lawyer, you are wealthy, you can do these
somehow, when do you go to jail? Well, months go by. So I
think it really is detrimental to the perception, the public
perception of justice in this Eastern District for that to happen.
THE COURT: We will deal with the perception,
and if we are criticized for it, so be it, but I’m convinced the
63a
defendant is not at risk of flight nor will he be a danger to the
community.
I neglected in my sentence to impose a special
assessment of $100 on each count, which will be part of the
sentence, for $1900.
I do, however, revise the timetable for the beginning
of the payments and let the $300 per month begin 30 days
from today instead of 60 days from his release from
confinement.
He is continued on bond pending appeal, and he
shall continue to abide by the pretrial release requirements if
there are any.
Mr. Strasser, is he under supervision of pretrial
services?
MR. STRASSER: No, Your Honor. I think he’s on
his own recognizance in this case.
THE COURT: I don’t have any problem with the
continuation of the bond. He shall, however, remain on bond
to abide the judgment of the Fourth Circuit.
If the Fourth Circuit affirms the convictions and
sentences, then he shall within 48 hours report to the Bureau
of Prisons for designation. Now if there is any problem with
that, there will be plenty of time to work that out between
now and then.
He is continued on bond.
MR. STRASSER: Thank you, Your Honor.
THE COURT: And we will deal with the perception
the best way we can, Mr. Learned, your office and mine.
64a
Court will stand adjourned.
(Whereupon, at 10:36 o'clock a.m., the above-
captioned proceedings were concluded, and court stood
adjourned. )
65a
COMMONWEALTH OF VIRGINIA )
CITY OF ALEXANDRIA )
I, EDWARD DONOVAN McCOY, Registered
Professional Reporter and Official Court Reporter for the
United States District Court for the Eastern District of
Virginia, appointed pursuant to the provisions of Title 28,
United States Code, Section ‘753, do hereby certify that I was
authorized to report, and did so report in Stenotype, the
foregoing proceedings;
THEREAFTER, my Stenotype notes were reduced
to typewriting under my supervision; and I further certify that
the pages herein numbered contain a true and correct
transcription of my Stenotype notes taken herein.
DONE and signed, this day of
» 19_, in the City of Alexandria,
Commonwealth of Virginia.
COPY
EDWARD DONOVAN McCOY, RPR
Official Court Reporter
U.S. Const. amend. V
No person shall be held to answer for a capital, or
otherwise infamous crime, unless on a presentment or
indictment of a Grand Jury, except in cases arising in the land
or naval forces, or in the Militia, when in actual service in
time of War or public danger; nor shall any person be subject
for the same offence to be twice put in jeopardy of life or
limb; nor shall be compelled in any criminal case to be a
witness against himself, nor be deprived of life, liberty, or
property, without due process of law; nor shall private
property be taken for public use, without just compensation.
67a
18 U.S.C. § 1621. Perjury generally
Whoever -
(1) having taken an oath before a competent tribunal,
officer, or person, in any case in which a law of the United
States authorizes an oath to be administered, that he will
testify, declare, depose, or certify truly, or that any written
testimony, declaration, deposition, or certificate by him
subscribed, is true, willfully and contrary to such oath states
or subscribes any material matter which he does not believe to
be true; or
(2) in any declaration, certificate, verification, or
statement under penalty of perjury as permitted under section
1746 of title 28, United States Code, willfully subscribes as
true any material matter which he does not believe to be true;
is guilty of perjury and shall, except as otherwise expressly
provided by law, be fined under this title or imprisoned not
more than five years, or both. This section is applicable
whether the statement or subscription is made within or
without the United States.
(June 25, 1948, ch. 645, 62 Stat. 773; Pub.L. 88-619, Sec. 1,
Oct. 3, 1964, 78 Stat. 995; Pub.L. 94-550, Sec. 2, Oct. 18,
1976, 90 Stat. 2534; Pub.L. 103-322, title XXXII, Sec.
330016(1)(1), Sept. 13, 1994, 108 Stat. 2147.)
68a
18 U.S.C. § 3552. Presentence reports
(a) Presentence Investigation and Report by Probation
Officer. - A United States probation officer shall make a
presentence investigation of a defendant that is required
pursuant to the provisions of Rule 32(c) of the Federal Rules
of Criminal Procedure, and shall, before the imposition of
sentence, report the results of the investigation to the court.
(b) Presentence Study and Report by Bureau of Prisons. -
If the court, before or after its receipt of a report specified in
subsection (a) or (c), desires more information than is
otherwise available to it as a basis for determining the
sentence to be imposed on a defendant found guilty of a
misdemeanor or felony, it may order a study of the defendant.
The study shall be conducted in the local community by
qualified consultants unless the sentencing judge finds that
there is a compelling reason for the study to be done by the
Bureau of Prisons or there are no adequate professional
resources available in the local community to perform the
study. The period of the study shall be no more than sixty
days. The order shall specify the additional information that
the court needs before determining the sentence to be
imposed. Such an order shall be treated for administrative
purposes as a provisional sentence of imprisonment for the
maximum term authorized by section 3581(b) for the offense
committed. The study shall inquire into such matters as are
specified by the court and any other matters that the Bureau of
Prisons or the professional consultants believe are pertinent to
the factors set forth in section 3553(a). The period of the
study may, in the discretion of the court, be extended for an
additional period of not more than sixty days. By the
expiration of the period of the study, or by the expiration of
any extension granted by the court, the United States marshal
shall, if the defendant is in custody, return the defendant to
the court for final sentencing. The Bureau of Prisons or the
professional consultants shall provide the court with a written
69a
report of the pertinent results of the study and make to the
court whatever recommendations the Bureau or the
consultants believe will be helpful to a proper resolution of
the case. The report shall include recommendations of the
Bureau or the consultants conceming the guidelines and
policy statements, promulgated by the Sentencing
Commission pursuant to 28 U.S.C. § 994(a), that they believe
are applicable to the defendant’s case. After receiving the
report and the recommendations, the court shall proceed
finally to sentence the defendant in accordance with the
sentencing alternatives and procedures available under this
chapter. --
(c) Presentence Examination and Report by Psychiatric
or Psychological Examiners. - If the court, before or after its
receipt of a report specified in subsection (a) or (b) desires
more information than is otherwise available to it as a basis
for determining the mental condition of the defendant, the
court may order the same psychiatric or psychological
examination and report thereon as may be ordered under
section 4244(b) of this title.
(d) Disclosure of Presentence Reports - The court shall
assure that a report filed pursuant to this section is disclosed
to the defendant, the counsel for the defendant, and the
attorney for the Government at least ten days prior to the date
set for sentencing, unless this minimum period is waived by
the defendant. The court shall provide a copy of the
presentence report to the attorney for the Government to use
in collecting an assessment, criminal fine, forfeiture or
restitution imposed.
(Added Pub.L. 98-473, title II, Sec. 212(a)(2), Oct. 12, 1984,
98 Stat. 1988; amended Pub.L. 99-646, Sec. 7(a), Nov. 10,
1986, 100 Stat. 3593; Pub.L. 101-647, title XXXVI, Sec.
3625, Nov. 29, 1990, 104 Stat. 4965.)
70a
Federal Rules of Criminal Procedure, Rule 32 (Sentence and
Judgment)
(a) In General; Time for Sentencing. When a
presentence investigation and report are made under
subdivision (b)(1), sentence should be imposed without
unnecessary delay following completion of the process
prescribed by subdivision (b)(6). The time limits prescribed in
subdivision (b)(6) may be either shortened or lengthened for
good cause.
(b) Presentence Investigation and Report.
(1) When Made. The probation officer must make
a presentence investigation and submit a report to the
court before the sentence is imposed, unless:
(A) _ the court finds that the information in
the record enables it to exercise its sentencing
authority meaningfully under 18 U.S.C. § 3553;
and
(B) the court explains this finding on the
record.
Notwithstanding the preceding sentence, a presentence
investigation and report, or other report containing
information sufficient for the court to enter an order of
restitution, as the court may direct, shall be required in
any case in which restitution is required to be ordered.
(2) Presence of Counsel. On request, the
defendant’s counsel is entitled to notice and a reasonable
opportunity to attend any interview of the defendant by a
probation officer in the course of a presentence
investigation.
(3) Nondisclosure. The report must not be
submitted to the court or its contents disclosed to anyone
unless the defendant has consented in writing, has
Tla
pleaded guilty or nolo contendere, or has been found
guilty.
(4) Contents of the Presentence Report. The
presentence report must contain--
(A) information about the defendant’s
history and characteristics, including any prior
criminal record, financial condition, and any
circumstances that, because they affect the
defendant’s behavior, may be helpful in imposing
sentence or in correctional treatment;
(B) _ the classification of the offense and of
the defendant under the categories established by
the Sentencing Commission under 28 U.S.C. §
994(a), as the probation officer beliéves to be
applicable to the defendant’s case; the kinds of
sentence and the sentencing range suggested for
such a category of offense committed by such a
category of defendant as set forth in the guidelines
issued by the Sentencing Commission under 28
U.S.C. § 994(a)(1); and the probation officer’s
explanation of any factors that may suggest a
different sentence--within or withcut the applicable
guideline--that would be more appropriate, given all
the circumstances;
(C) a reference to any pertinent policy
Statement issued by the Sentencing Commission
under 28 U.S.C. § 994(a)(2);
(D) verified information, stated in a
nonargumentative style, containing an assessment
of the financial, social, psychological, and medical
impact on any individual against whom the offense
has been committed;
(E) in appropriate cases, information about
the nature and extent of nonprison programs and
resources available for the defendant;
Ee
72a
(F) in appropriate cases, information
sufficient for the court to enter an order of
restitution;
(G) any report and recommendation
resulting from a study ordered by the court under 18
U.S.C. § 3552(b); and
(H) any other information required by the
court.
(5) Exclusions. The presentence report must
exclude:
(A) any diagnostic opinions that, if
disclosed, might seriously disrupt a program of
rehabilitation;
(B) __ sources of information obtained upon a
promise of confidentiality; or
(C) any other information that, if disclosed,
might result in harm, physical or otherwise, to the
defendant or other persons.
(6) Disclosure and Objections.
(A) Not less than 35 days before the
sentencing hearing--unless the defendant waives
this minimum period--the probation officer must
furnish the presentence report to the defendant, the
defendant’s counsel, and the attorney for the
Government. The court may, by local rule or in
individual cases, direct that the probation officer not
disclose the probation officer’s recommendation, if
any, on the sentence.
(B) Within 14 days after receiving the
presentence report, the parties shall communicate in
writing to the probation officer, and to each other,
any objections to any material information,
sentencing classifications, sentencing guideline
ranges, and policy statements contained in or
73a
omitted from the presentence report. After receiving
objections, the probation officer may meet with the
defendant, the defendant’s counsel, and the attorney
for the Government to discuss those objections. The
probation officer may also conduct a further
investigation and revise the presentence report as
appropriate.
(C) Not later than 7 days before the
sentencing hearing, the probation officer must
submit the presentence report to the court, together
with an addendum setting forth any unresolved
objections, the grounds for those objections, and the
probation officer’s comments on the objections. At
the same time, the probation officer must furnish
the revisions of the presentence report and the
addendum to the defendant, the defendant’s
counsel, and the attorney for the Government.
(D) Except for any unresolved objection
under subdivision (b)(6)(B), the court may, at the
hearing, accept the presentence report as its findings
of fact. For good cause shown, the court may allow
a new objection to be raised at any time before
imposing sentence.
(c) Sentence.
(1) Sentencing Hearing. At the sentencing hearing,
the court must afford counsel for the defendant and for
the Government an opportunity to comment on the
probation officer’s determinations and on other matters
relating to the appropriate sentence, and must rule on any
unresolved objections to the presentence report. The
court may, in its discretion, permit the parties to
introduce testimony or other evidence on the objections.
For each matter controverted, the court must make either
a finding on the allegation or a determination that no
finding is necessary because the controverted matter will
not be taken into account in, or will not affect,
74a
sentencing. A written record of these findings and
determinations must be appended to any copy of the
presentence report made available to the Bureau of
Prisons.
(2) Production of Statements at Sentencing
Hearing. Rule 26.2(a)-(d) and (f) applies at a sentencing
hearing under this rule. If a party elects not to comply
with an order under Rule 26.2(a) to deliver a statement to
the movant, the court may not consider the affidavit or
testimony of the witness whose statement is withheld. 7
(3) Imposition of Sentence. Before imposing
sentence, the court must:
(A) verify that the defendant and
defendant’s counsel have read and discussed the
presentence report made available under
subdivision (b)(6)(A). If the court has received
information excluded from the presentence report
under subdivision (b)(5) the court--in lieu of
making that information available--must summarize
it in writing, if the information will be relied on in
determining sentence. The court must also give the
defendant and the defendant’s counsel a reasonable
opportunity to comment on that information;
(B) afford defendant’s counsel an
opportunity to speak on behalf of the defendant;
(C) address the defendant personally and
determine whether the defendant wishes to make a
statement and to present any information in
mitigation of the sentence;
(D) afford the attorney for the Government
an opportunity equivalent to that of the defendant’s
counsel to speak to the court; and
(E) if sentence is to be imposed for a crime
of violence or sexual abuse, address the victim
personally if the victim is present at the sentencing
75a
hearing and determine if the victim wishes to make
a statement or present any information in relation to
the sentence.
(4) In Camera Proceedings. The court’s s
of information under subdivision (c)(3)(A) may be in
camera. Upon joint motion by the defendant and by the
attorney for the Government, the court may hear in
camera the statements--made under subdivision
(c(3)(B), (C), (D), and (E)-by the defendant, the
defendant’s counsel, the victim, or the attorney for the
Government.
(5) Notification of Right to Appeal. After
imposing sentence in a case which has gone to trial on a
plea of not guilty, the court must advise the defendant of
the right to appeal. After imposing sentence in any case,
the court must advise the defendant of any right to appeal
the sentence, and of the right of a person who is unable
to pay the cost of an appeal to apply for leave to appeal
in forma pauperis. If the defendant so requests, the clerk
of the court must immediately prepare and file a notice
of appeal on behalf of the defendant.
(d) Judgment.
(1) In General. A judgment of conviction must set
forth the plea, the verdict or findings, the adjudication,
and the sentence. If the defendant is found not guilty or
for any other reason is entitled to be discharged,
judgment must be entered accordingly. The judgment
must be signed by the judge and entered by the clerk.
(2) Criminal Forfeiture. If a verdict contains a
finding that property is subject to a criminal forfeiture, or
if a defendant enters a guilty plea subjecting property to
such forfeiture, the court may enter a preliminary order
of forfeiture after providing notice to the defendant and a
reasonable opportunity to be heard on the timing and
form of the order. The order of forfeiture shall authorize
the Attomey General to seize the property subject to
76a
forfeiture, to conduct any discovery that the court
considers proper to help identify, locate, or dispose of
the property, and to begin proceedings consistent with
any statutory requirements pertaining to ancillary
hearings and the rights of third parties. At sentencing, a
final order of forfeiture shall be made part of the
sentence and included in the judgment. The court may
include in the final order such conditions as may be
reasonably necessary to preserve the value of the
property pending any appeal.
(e) Plea Withdrawal. If a motion to withdraw a plea of
guilty or nolo contendere is made before sentence is
imposed, the court may permit the plea to be withdrawn
if the defendant shows any fair and just reason. At any
later time, a plea may be set aside only on direct appeal
or by motion under 28 U.S.C. § 2255.
(f) Definitions. For purposes of this rule
(1) “victim” means any individual against whom
an offense has been committed for which a sentence is to
be imposed, but the right of allocution under subdivision
(c3)E) may be exercised instead by—-
(A) a parent or legal guardian if the victim
is below the age of eighteen years or
incompetent; or
(B) one or more family members or
relatives designated by the court if the victim is
deceased or incapacitated;
if such person or persons are present at the sentencing
hearing, regardless of whether the victim is present; and
(2) “crime of violence or sexual abuse” means a
crime that involved the use or attempted or threatened
use of physical force against the person or property of
another, or a crime under chapter 109A of title 18,
United States Code.
during the course of the investigation, prosecution, or
sentencing of the instant offense of conviction, and (B) the
obstructive conduct related to (i) the defendant’s offense of
conviction and any relevant conduct: or (ii) a closely related
offense, increase the offense level by 2 levels.
Commentary
tpplication Notes:
1. This adjustment applies if the defendant’s obstructive
conduct (A) occurred during the course of the investigation,
prosecution, or sentencing of the defendant’s instant Offense
of conviction, and (B) related to (i) the defendant's offense of
conviction and any relevant conduct; or (ii) an otherwise
closely related case, such as that of a co-defendant.
2. This provision is not intended to punish a defendant for
3. Obstructive conduct can vary widely in nature, degree of
planning, and seriousness. Application Note 4 sets forth
78a
examples of the types of conduct to which this adjustment is
intended to apply. Application Note 5 sets forth examples of
less serious forms of conduct to which this enhancement is not
intended to apply, but that ordinarily can appropriately be
sanctioned by the determination of the particular sentence
within the otherwise applicable guideline range. Although the
conduct to which this adjustment applies is not subject to
precise definition, comparison of the examples set forth in
Application Notes 4 and 5 should assist the court in
determining whether application of this adjustment is
warranted in a particular case.
4. The following is a non-exhaustive list of examples of the
types of conduct to which this adjustment applies:
(a) threatening, intimidating, or otherwise unlawfully
influencing a co-defendant, witness, or juror, directly or
indirectly, or attempting to do so;
(b) committing, suborning, or attempting to suborn perjury;
(c) producing or attempting to produce a false, altered, or
counterfeit document or record during an official
investigation or judicial proceeding;
(d) destroying or concealing or directing or procuring
another person to destroy or conceal evidence that is material
to an official investigation or judicial proceeding (¢.g.
shredding a document or destroying ledgers upon learning
that an official investigation has commenced or is about to
commence), or attempting to do so; however, if such conduct
occurred contemporaneously with arrest (€.g., attempting to
swallow or throw away a controlled substance), it shall not,
standing alone, be sufficient to warrant an adjustment for
obstruction unless it resulted in a material hindrance to the
official investigation or prosecution of the instant offense or
the sentencing of the offender;
(e) escaping or attempting to escape from custody before
trial or sentencing; or willfully failing to appear, as ordered,
for a judicial proceeding;
79a
(f) providing materially false information to a judge or
magistrate;
(8) providing a materially false statement to a law
enforcement officer that significantly obstructed or impeded
the official investigation or prosecution of the instant offense;
(h) providing materially false information to a probation
officer in respect to a presentence or other investigation for
_ the court;
(i) other conduct prohibited by obstruction of Justice
provisions under Title 18, United States Code (e.g., 18 U.S.C.
$§ 1510, 1511).
This adjustment also applies to any other obstructive conduct
in respect to the official investigation, prosecution, or
sentencing of the instant offense where there is a separate
count of conviction for such conduct.
5. Some types of conduct ordinarily do not warrant
application of this adjustment but may warrant a greater
sentence within the otherwise applicable guideline range or
affect the determination of whether other guideline
adjustments apply (e.g. §3EI.] (Acceptance of
Responsibility)). However, if the defendant is convicted of a
separate count for such conduct, this adjustment will apply
and increase the offense level for the underlying offense (i.e.,
the offense with respect to which the obstructive conduct
occurred). See Application Note 8, below.
The following is a non-exhaustive list of examples of the types
of conduct to which this application note applies:
(a) providing a false name or identification document at
arrest, except where such conduct actually resulted in a
significant hindrance to the investigation or prosecution of
the instant offense;
(b) making false statements, not under oath, to law
enforcement officers, unless Application Note 3(g) [sic] above
applies;
80a
(c) providing incomplete or misleading information, not
amounting to a material falsehood, in respect to a
presentence investigation;
(d) avoiding or fleeing from arrest (see, however, §3C1.2
(Reckless Endangerment During Flight));
(e) lying to a probation or pretrial services officer about
defendant's drug use while on pre-trial release, although such
conduct may be a factor in determining whether to reduce the
defendant’s sentence under §3E1.1 (Acceptance of
Responsibility). i
6. “Material” evidence, fact, statement, or information, as
used in this section, means evidence, fact, statement, or
information that, if believed, would tend to influence or affect
the issue under determination.
7. If the defendant is convicted of an offense covered by
§2J1.1 (Contempt), §2J1.2 (Obstruction of Justice), §2J1.3
(Perjury or Subornation of Perjury; Bribery of Witness),
§2J1.5 (Failure to Appear by Material Witness), §2J1.6
(Failure to Appear by Defendant), §2J1.9 (Payment to
Witness), §2X3.1 (Accessory After the Fact), or §2X4.1
(Misprision of Felony), this adjustment is not to be applied to
the offense level for that offense except if a significant further
obstruction occurred during the investigation, prosecution, or
sentencing of the obstruction offense itself (e.g. if the
defendant threatened a witness during the course of the
prosecution for the obstruction offense).
8. If the defendant is convicted both of an obstruction
offense (e.g., 18 U.S.C. § 3146 (Penalty for failure to appear);
18 U.S.C. § 1621 (Perjury generally)) and an underlying
offense (the offense with respect to which the obstructive
conduct occurred), the count for the obstruction offense will
be grouped with the count for the underlying offense under
subsection (c) of §3D1.2 (Groups of Closely Related Counts).
The offense level for that group of closely related counts will
be the offense level for the underlying offense increased by the
8la
2-level adjustment specified by this section, or the offense
level for the obstruction offense, whichever is greater.
9. Under this section, the defendant is accountable for his
own conduct and for conduct that he aided or abetted,
counseled, commanded, induced, procured, or willfully
caused.
Historical Note: Effective November 1, 1987. Amended effective
November 1, 1989 (see Appendix C, amendments 251 and 252);
November 1, 1990 (see Appendix C, amendment 347); November 1, 1991
(see Appendix C, amendment 415); November 1, 1992 (see Appendix C,
amendment 457); November 1, 1993 (see Appendix C, amendment 496);
November 1, 1997 (see Appendix C, amendment 566); November 1, 1998
(see Appendix C, amendments 579, 581, and 582).
82a
1999 Federal Sentencing Guidelines
§6A1.1. Presentence Report (Policy Statement)
A probation officer shall conduct a presentence investigation
and report to the court before the imposition of sentence
unless the court finds that there is information in the record
sufficient to enable the meaningful exercise of sentencing
authority pursuant to 18 U.S.C. § 3553, and the court explains
this finding on the record. Rule 32(b)(1), Fed. R. Crim. P. The
defendant may not waive preparation of the presentence
report.
Commentary
A thorough presentence investigation is essential in
determining the facts relevant to sentencing. In order to
ensure that the sentencing judge will have information
sufficient to determine the appropriate sentence, Congress
deleted provisions of Rule 32(c), Fed. R. Crim. P., which
previously permitted the defendant to waive the presentence
report. Rule 32(bX1) permits the judge to dispense with a
presentence report, but only after explaining, on the record,
why sufficient information is already available.
i - Effective November 1, 1987. Amended effective June 15,
1988 (see Appendix C, amendment 58); November 1, 1989 (see Appendix
C, amendment 293); November 1, 1997 (see Appendix C, amendment
574).
83a
1999 Federal Sentencing Guidelines
Pome : sentenc:
Courts should adopt procedures to provide for the timely
disclosure of the presentence report; the narrowing and
resolution, where feasible, of issues in dispute in advance of
the sentencing hearing; and the identification for the court of
issues remaining in dispute. Rule 32(b)(6), Fed. R. Crim. P.
Commentary
ey
1. Under Rule 32, Fed. R. Crim. P., if the court intends to
consider a sentence outside the applicable guideline range on
'‘@ ground not identified as a ground for departure either in the
presentence report or a pre-hearing submission, it shall
provide reasonable notice that it is contemplating such ruling,
specifically identifying the grounds for the departure. Burns
v. United States, 501 U.S. 129, 135-39 (1991).
Background: In order to focus the issues prior to sentencing,
the parties are required to respond in writing to the
presentence report and to identify any issues in dispute. Rule
32(b)(6)(B), Fed. R. Crim. P.
Historical Note: Effective November 1, 1987. Amended effective June 15,
1988 (see Appendix C, amendment 59); November 1, 1991 (see Appendix
C, amendment 425); November 1, 1997 (see Appendix C, amendment
574).
84a
1999 Federal Sentencing Guidelines
§6A1.3. Resolution of ors (Policy Statement)
(a) When any factor important to the sentencing
determination is reasonably in dispute, the parties shall be
given an adequate opportunity to present information to the
court regarding that factor. In resolving any dispute
concerning a factor important to the sentencing determination,
the court may consider relevant information without regard to
its admissibility under the rules of evidence applicable at trial,
provided that the information has sufficient indicia of
reliability to support its probable accuracy.
(b) The court shall resolve disputed sentencing factors at a
sentencing hearing in accordance with Rule 32(c)(1), Fed. R.
Crim. P.
Commentary
In pre-guidelines practice, factors relevant to sentencing were
often determined in an informal fashion. The informality was
to some extent explained by the fact that particular offense
and offender characteristics rarely had a highly specific or
required sentencing consequence. This situation no longer
exists under sentencing guidelines. The court’s resolution of
disputed sentencing factors usually has a measurable effect
on the applicable punis . More formality is therefore
unavoidable if the sentencing process is to be accurate and
fair.
Although lengthy sentencing hearings seldom should be
necessary, disputes about sentencing factors must be resolved
with care. When a dispute exists about any factor important to
the sentencing determination, the court must ensure that the
parties have an adequate opportunity to present relevant
information. Written statements of counsel or affidavits of
witnesses may be adequate under many circumstances. See,
e.g., Uni 924 F.2d 427 (2d Cir. 1991). An
evidentiary hearing may sometimes be the only reliable way
85a
to resolve disputed issues. See, e.g., United States v. Jimenez
Martinez, 83 F.3d 488, 494-95 (Ist Cir. 1996) (finding error
in district court’s denial of defendant’s motion for evidentiary
hearing given questionable reliability of affidavit on which
the district court relied at sentencing); United States vy.
Roberts, 14 F.3d 502, 521 (10th Cir. 1993) (remanding
because district court did not hold evidentiary. hearing to
address defendants’ objections to drug quantity determination
or make requisite findings of fact regarding drug quantity);
see also, United States v. Fatico, 603 F.2d 1053, 1057 n.9 (2d
Cir. 1979), cert. denied, 444 U.S. 1073 (1980). The
sentencing court must determine the appropriate procedure in
light of the nature of the dispute, its relevance to the
sentencing determination, and applicable case law.
In determining the relevant facts, sentencing judges are not
restricted to information that would be admissible at trial. See
18 U.S.C. § 3661; see also United States v. Watts, 117 S. Ct.
633, 635 (1997) (holding that lower evidentiary standard at
sentencing permits sentencing court’s consideration of
acquitted conduct); Witte v. United States, 515 U.S. 389, 399-
401 (1995) (noting that sentencing courts have traditionally
considered wide range of information without the procedural
protections of a criminal trial, including information
concerning criminal conduct that may be the subject of a
subsequent prosecution); Nichols v. United States, 511 U.S.
738, 747-48 (1994) (noting that district courts have
traditionally considered defendant’s prior criminal conduct
even when the conduct did not result in a conviction). Any
information may be considered, so long as it has sufficient
indicia of reliability to support its probable accuracy. Watts,
117 S. Ct. at 637; Nichols, 511 U.S. at 748; United States v.
Zuleta-Alvarez, 922 F.2d 33 (1st Cir. 1990), cert. denied, 500
U.S. 927 (1991); United States v. Beaulieu, 893 F.2d 1177
(10th Cir.), cert. denied, 497 U.S. 1038 (1990). Reliable
hearsay evidence may be considered. United States v. Petty,
982 F.2d 1365 (9th Cir. 1993), cert. denied, 510 U.S. 1040
(1994); United States v. Sciarrino, 884 F.2d 95 (3d Cir.), cert.
denied, 493 U.S. 997 (1989). Out-of-court declarations by an
86a
unidentified informant may be considered where there is good
cause for the non-disclosure of the informant’s identity and
there is sufficient corroboration by other means. United
States v. Rogers, 1 F.3d 341 (5th Cir. 1993); see also United
States v. Young, 981 F.2d 180 (Sth Cir.), cert. denied, 508
U.S. 980 (1993); United States v. Fatico, 579 F.2d 707, 713
(2d Cir. 1978), cert. denied, 444 U.S. 1073 (1980). Unreliable
allegations shall not be considered. United States v. Ortiz,
993 F.2d 204 (10th Cir. 1993).
The Commission believes that use of a preponderance of the
evidence standard is appropriate to meet due process
requirements and policy concerns in resolving disputes
regarding application of the guidelines to the facts of a case.
Historical Note: Effective November 1, 1987. Amended effective
November 1, 1989 (see Appendix C, amendment 294); November 1, 1991
(see Appendix C, amendment 387); November 1, 1997 (see Appendix C,
amendment 574); November 1, 1998 (see Appendix C, amendment 586).
87a
Defendant’s Requested Jury Instruction No. 37
defendant is simply inconsistent with a finding of knowingly
and willfully making false, fictitious or fraudulent statements;
and is inconsistent with the intent to defraud or to obtain
money or property by means of false or fraudulent pretenses,
representations or promises alleged in those charges.
A person who acts on a belief or an opinion honestly
held is not punishable under either of these statutes merely
because the belief or opinion turns out to be inaccurate,
incorrect, or wrong. An honest mistake in judgement or an
error in management does not arise to the level of knowledge
and willfulness required by these statutes.
This law prohibiting false statements is intended to
subject to criminal punishment only those people who
knowingly and willfully attempt to deceive. Similarly, the
wire fraud statute is written to subject to criminal punishment
only those people who knowingly defraud or knowingly
obtain money or property by means of false or fraudulent
pretenses, representations, or promises.
With respect to the false claims charges, in determining
whether or not the government has proven beyond a
reasonable doubt that the defendant acted in good faith or
acted knowingly and willfully in making false, fictitious or
fraudulent statements, the jury must consider all of the
| Rl GONE sais a ns as,
88a
evidence in the case bearing on the defendant’s state of mind.
Similarly, with respect to the wire fraud charges, in
determining whether or not the government has proven
beyond a reasonable doubt that the defendant acted with an
intent to defraud or to obtain money or property by means of
false or fraudulent pretenses, representations, or promises or
whether the defendant acted in good faith, the jury must
consider all the evidence in the case bearing on the
defendant’s state of mind.
Keep in mind as you make your decisions that the
Defendant, Bob Dvorak, does not have an obligation to prove
that he acted in good faith because the defendant in a criminal
case does not have an obligation to prove anything. It is the
government’s burden to prove to you, beyond a reasonable
doubt, that the defendant Bob Dvorak acted knowingly and
willfully to make false, fictitious or fraudulent statements.
Similarly, it is the government’s burden to show beyond a
reasonable doubt that Bob Dvorak acted with the intent to
defraud or to obtain money or property.
If you find that the defendant Bob Dvorak did not act
with the specific intent to commit a crime, but instead acted in
good faith, that is, in the good faith belief that he was doing
nothing wrong, then that is a defense to both the false
statement charges and the wire fraud charges in this case and
you must acquit Bob Dvorak of these charges.
Authority: E. Devitt, C. Blackmar & K. O’Malley, Federal
j § 27.16 (1992) (modified);
Sand, Siffert, Loughlin & Reiss, Modem Federal Jury
Instructions, Instruction § 8-1 (1992) (modified).
MR. STRASSER: Could I inquire of the Court, I
think the Government has suggested, but I don’t believe I
have seen a draft of a willful blindness instruction?
THE COURT: I have got a willful blindness
instruction. I have got a conspiracy instruction, an aiding and
abetting instruction that I have been giving for years, but I
think willful blindness is particularly appropriate in this case.
MR. STRASSER: That was the charge I was
objecting to.
THE COURT: Yow have offered a good-faith
instruction. It seems to me an appropriate instruction on
willfulness and requirement of willfulness and knowingly is
adequate for this.
MR. STRASSER: The Court will not give a
separate good-faith instruction?
THE COURT: No. You get a pretty strong
willfulness, although the Government suggested this bad
purpose. I don’t know if a bad purpose was part of
willfulness, except maybe in a tax case. I'll give it, because
the Government --
MR. STRASSER: They asked for it. We didn’t
object to that.
90a
THE COURT: Pick it up and run with it.
MR. LEARNED: There’s one concern I have.
** * * *
9la
*_*s+ *+ *¢ &
a matter within the jurisdiction of the Drug Enforcement
Administration, to knowingly and willfully make materially
false, fraudulent, fictitious -- materially false, fictitious, and
fraudulent statements.
Count one then goes to allege certain manner and means
by which the conspiracy allegedly was carried out and lists a
number of overt acts; that is, acts allegedly performed in
furtherance of the conspiracy.
Count one is drawn pursuant to a provision of the United
States Code that provides that if two or more persons conspire
either to commit any offense against the United States or to
defraud the United States or any agency thereof in any
manner or for any purpose, and one or more of such persons
do any act to effect the object of the conspiracy, each is guilty
of an offense against the laws of the United States.
Certain terms will be used throughout these instructions,
and I'll define them for you now. The term willfully is used.
To act willfully is to act voluntarily and intentionally and with
a specific intent to do something the law forbids; that is, with
a bad purpose, to either disobey or disregard the law. To act
knowingly is to act voluntarily and intentionally and not
because of mistake or accident or other innocent reason.
Knowingly is used as an element in all of the offenses
charged, and the Government may prove that a defendant
acted knowingly by proving beyond a reasonable doubt that
this defendant deliberately closed his eyes to what would
otherwise have been obvious to him.
No one can avoid responsibility for a crime by
deliberately ignoring what is obvious. A finding beyond a
reasonable doubt of an intent of the defendant to avoid
knowledge or enlightenment would permit the jury to infer
knowledge.
Stated another way, a defendant’s knowledge of a
particular fact may be inferred from a deliberate or intentional
92a
ignorance or deliberate or intentional blindness to the
existence of that fact.
It is, of course, entirely up to you as to whether you find
any deliberat= ignorance or deliberate closing of the eyes, and
the inferences to be drawn from any such evidence. And the
fact that you may draw such an inference or knowledge does
not relieve the Government of its burden to prove that the
defendant acted knowingly by proof beyond a reasonable
doubt.
You may not infer that a defendant had knowledge,
however, merely from proof of mistake or negligence or
carelessness.
A conspiracy such as the one charged in count one is a
combination of two or more persons by concerted action.
*x* * * *
chai aaa
.
P-R-O-C-E-E-D-I-N-G-S
(10:15 a.m.)
THE COURT: My reason for convening court was
I thought we were going to perhaps have to consider whether
to use an alternate. We are missing a juror.
Mr. Jackson tells me that the missing juror has been
spied apparently out the window approaching the courthouse.
So, if that’s really who it is, I'll recess until she gets here.
Do you know who it is?
COURT SECURITY OFFICER: Yes, Your Honor.
THE COURT: I assume the other jurors know who
she is, too. We will recess until she gets here.
(Whereupon, at 10:15 a.m., court stood in brief
recess and reconvened at 10:22 a.m.).
THE COURT: Mr. Learned?
MR. LEARNED: May it please the Court, counsel,
ladies and gentlemen, this is the time when we lawyers can
summarize the evidence, explain how it proves, or, in defense
counsel’s case, how it disproves the case; but what we
lawyers say is not evidence.
Obviously, the evidence was on the witness stand or
the documents you are going to see, and when lawyers try to
describe what we recollect was the evidence, if your
recollection is different from that, then disregard it, because
pe ee
94a
it’s your recollection of the evidence, not mine or any other
lawyer in this courtroom that counts.
Now, although there are a lot of documents in this
case, a lot of money changed hands, we have four years worth
of transactions, basically 78 specific transactions, it really
comes down to a pretty simple case. It’s pretty obvious crime
was going on. DEA was defrauded very substantially. The
only issue really is whether or not the defendant, Mr. Dvorak,
knowingly participated in this crime.
Now, where do we start with the evidence? Mr.
Burchell testified, and also Mr. Lunsford, that these
transactions began, transaction number one, in about March of
1993. Burchell was already in the process of embezzling
equipment at that time with his friend, Michael Hendrix.
He goes out there. He orders certain equipment.
He deals with Mr. Lunsford for the first few times. The
descriptions aren’t all that -- there aren’t that many
misdescriptions. There are some in the beginning, but they
don’t stand out. Mr. Lunsford goes on vacation in the
Summer of ’93, and Mr. Burchell begins dealing with Mr.
Dvorak.
The relationship forms, and Mr. Burchell explained
in one of his earliest conversztions with Mr. Dvorak was that,
We couldn’t buy these items unless the descriptions were
vague.
Now, on cross-examination, when counsel asked
Mr. Burchell about, Well, when did this conspiracy start, and
Mr. Burchell was trying to explain it, Burchell actually said
further in elaborating on that conversation, We are not
supposed to get these items. He’s saying that to Mr. Dvorak.
So Dvorak is probably wondering what’s going on
here. Descriptions have to be vague. But what happens? They
start out with transaction No. 7. Mr. Dvorak was quoted by
Mr. Burchell as saying, Well, it’s okay if we can use our
model numbers on these items.
; j
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95a
So you start out with some model numbers, but the
descriptions become pretty apparent. I’m not going to read
them off to you. They are detailed very nicely in a summary
Sheet that Agent D’Antuono testified to yesterday where
certain items are referred to, I mentioned in my opening
statement. Certain technical jargon is used to deceive or
conceal what it is that’s being purchased.
The important thing to Mr. Burchell is that as these
items progressed throughout ’93, and they become quite
substantial dollarwise, that this man never asked any
questions, and so his confidence builds that he can trust Mr.
Dvorak as more and more of these descriptions, the way, the
terminology they use and so forth.
And so, finally, Mr. Burchell reaches a point where
he thinks he can trust Mr. Dvorak enough to make a very
unusual purchase, because up to this point in time, the
_ purchases are mostly standard for an audiovisual store, those
kinds of items.
But now he is going to bring up something entirely
different. He wants to buy some laser disks, movies, $24,000
worth of movies. Now, this is a big step now. Why? I asked
Mr. Burchell, why did you ask him? Were you concemed that
he might say, Well, why does DEA want a lot of movies, and
why am I supposed to - I’m not in the movies business. Why
don’t they go out to some video store and buy them? What do
you want me for?
Mr. Burchell’s answer was, I was confident. He told
me several times, Whatever you want, we will get. So that
confidence was there, and so what happens, he decides he has
to give him the name of a supplier. He orders a bunch of laser
disks and the process begins.
And, of course, the most important thing now is
what are we have going to tell DEA? How is this going to be
billed to the Drug Enforcement Administration?
WORRRR ROH Fe PORE AG RT cg nee oa ae wth NB RTOs pict ct yg
96a
They discuss the language he used, and the most
important document in the case, ladies and gentlemen, is his
document 18. These transactions are all put in 78 folders. The
documents on the left are all the documents that come from
the Drug Enforcement Administration. Al! the documents on
the right are the documents that came from the defendant’s
own company.
These are the documents that the defendant himself
gathered up. He was alone with these documents. He knew
he was under suspicion. He gathered them and produced
them.
They are revealing. But this was the real problem,
because what they decided to do in the first transaction, they
called $24,000 worth of laser disks, they called them, you
know, a mounting kit, a tube adapter screen unit, generaior,
monitor units, support assembly. These were egregious
misdescriptions of what it was.
Now, Burchell’s explanation is, Hey, I'm
committing a crime here, and this guy is helping me. What
did the defendant say about this transaction? Well, he said,
Look, I billed it as laser disks. on the right-hand side here is
my invoice, and my copy of my invoice simply called it laser
disks, and that is how I billed it to the DEA.
This document here that the Government has on the
left-hand side, which refers to these all this technical jargon, I
don’t know how that came into existence. Imagine that. It’s
the mystery explanation. Burchell’s explanation is I am
committing a crime, and he is helping me.
The defendant’s explanation is I don’t know how
this document exists. It has somehow been created or maybe
he did some kind of funny white-out or something, but it
didn’t come from -- it didn’t come from my company.
And yet, look at it. How could it be and why would
Burchell need to phony up a document? Up to this point in
time when Burchell wanted something, the defendant
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admitted, I changed the invoice. If he said to put it this way, I
changed the invoice, so why does Burchell need to phony up
the document? The document speaks for itself.
There is no explanation by the defendant, and this is
such a troubling document to him, because this is the
document that seals the conspiracy. This is the point in time
when Burchell knows for certain that this guy is in camp with
me. We will have this mutual, profitable relationship. I'll get
what I want. He’s going to make money. There is no problem
here. I can trust him. And so that’s how this scheme, that’s
how this thing was sealed, was that document.
Now, the defendant’s explanation, he has a problem
with it, because if you look on the right-hand side of the
documents, you will see that actually he produced three
documents. And there is a written order form that he’s
produced to the FBI. It’s got here, laser disks, his
handwriting.
And down in the little comer here, defense counsel
brought this out, it’s a little handwritten note here which says,
Copy of PO not received. You can see that there.
So, he doesn’t want -- you know, making it look
like there never was a purchase order, however, his own
workup sheet does have a purchase order right on it, 9194189,
so he must have had a purchase order because he’s got a
number to it, and his own invoice cites the same purchase
order number. But his own documentation Says there never
was a purchase order.
Well, guess what? That purchase order number, if
you look at the purchase order, again this technical jargon that
came from Burchell, this purchase order, and again this is the
Government’s copy of the purchase order, is the very same
number, 9194189. And that’s what he has on his own intemal
invoice, so how did he get that purchase number on his
document if he hadn’t gotten the purchase order?
98a
And you don’t know about that little comment there
written in handwriting, Copy of purchase order not received.
Remember, he was gathering these documents. He was under
suspicion. You don’t really know when that little thing was
written on there, because this is the troubling document,
document 18.
You go back and you study this document. Again,
there is no explanation from the defense of this document.
This is a killer. This is the smoking gun.
The transactions continued all throughout *94. More
equipment is purchased and misdescribed. There are all kinds
of -- the $24,000, that was used up before too long. Burchell
got an insatiable desire for movies and music. He had to get
some more.
So, transaction 25, okay, transaction 25, they bill
out some laser disks, and at this point in time they are a little
more sophisticated about it. They get a bunch of laser disks,
and they are just going to call them -- get this -- 12-inch, read-
only memory disks. It’s not going to be such a blatant
misdescription. It’s going to be a clever little technical jargon
there.
See, the defendant already is thinking, you know is
someday I may have to explain this stuff, so we have got to
use wording here that is in the zone. So we use this language,
12-inch, read-only memory disks.
What do his own records show? It’s a bunch of laser
disks that he ordered. So they go on and they proceed, and
then the transaction, again that transaction is worth $2400.
Transaction No. 26, this is a transaction for $9,000.
Again, they need more money. Burchell’s recollection is that
every time I ordered, when he ran out of money, he would tell
me, I need some more money. He would do another invoice.
This one was called, simply billed 12-inch, read only. The
Government says, that’s the Government invoice, 12-inch,
99a
read only. His internal invoice, 12-inch, read only, laser disks,
one lot.
Okay, now counsel you know was talking about,
well, maybe there’s some white-out there or something.
Maybe something is going on here. Why would Burchell need
to white out anything? Whenever he wanted an invoice, the
defendant produced it for him. He doesn’t need to manipulate
it. This man is willing to produce the paper for him. He
doesn’t need to manipulate any of these documents. That’s the
purpose of Mr. Dvorak. That’s his job. Give me the invoice so
I can do this, present it to the DEA.
And, of course, during this time period, they are
back and forth communicating. What did Burchell remember
about the fax machine? I told him, Don’t fax anything unless
I’m there at the fax machine, because they are communicating
back and forth.
Burchell, as you will see in these documents, these
notebooks, we have some bulk exhibits, Burchell has just an
insatiable, compulsive desire to purchase every conceivable
movie title that is available in the marketplace, certainly every
pornographic one. And these faxes are going back, and he
writes them out and lists them all. So he’s standing by the fax
machine.
So these transactions continue on, and finally, we
get into ‘95. What happens? We get to the vehicle cover.
Burchell, see his confidence is so much at this point, what
does he do? He goes and says, I want to get a vehicle cover
for my Chevy S-10 pickup.
So what does the defendant -- the defendant
remembers the transaction. He directed him down the street in
Beltsville to this particular company where it was done. But
yet he said he didn’t remember ever seeing it. He doesn’t
remember it.
100a
Burchell says, Hey, when I came up there and had it
on my Chevy S-10, he got out and looked at it and opened it
and took a look at it.
Burchell says, Hey, I drove a series of cars, but I
told him which cars were mine. Burchell is out there a couple
of times a months, maybe three times a month. You are
talking about 78 transactions over roughly four years. Figure
it out, you know. A couple of times a month on average.
So anyway, he’s out there. He’s talking. He gets the
vehicle cab. What’s it billed? The Government is billed for
just a cover. That’s what it’s called. It’s nine hundred some
dollars.
Then what happens next? Burchell is involved. He
tells him he’s going to Bracey. He’s going to buy a retirement
home. He tells them he’s going down there. He going to -- he
needs a generator, portable generator, needs a jet ski, all kinds
of equipment, an all-terrain vehicle to drive around the
woods.
Of course, the defendant denies these conversations.
Well, I knew we were buying this stuff, but I didn’t know --
he never told me. He didn’t even tell me about Bracey.
The defendant says he didn’t even know that this
man had. a vacation home. Now, of course, Burchell is
commuting. On weekends he’s down there for about a year or
so. He testifies he’s up here during the week, and this man
he’s working with doesn’t know anything about his vacation
home down in Bracey?
So the transactions continue on. We go beyond the
trailers. Finally, in "95, also the topic of music comes up.
Burchell, he remembered that. He said, I had never hinted to
him or suggested music. He came to me and recommended I
get music.
Now, the defendant said, Well, one of my people
there suggested to me that I might suggest to Mr. Burchell
that he ought to buy music, so I mentioned that to him.
10la
Why is Mr. Dvorak recommending to the Drug
Enforcement Administration that they buy a lot of music
compact disks? Why is he recommending it? Of course, Mr.
Burchell remembered certain items that he individually
for Patsy Cline years ago, and Burchell remembered that
conversation.
The defendant said, Well, you know, I didn’t tell
him that. He overheard that among employees, as though
Burchell was, you know, in a room with other employees, and
does that sound like Burchell? Although the defendant
admitted he recommended some Sinatra collection, he
recommended that, and that is because the vendor, who was
selling all this stuff, recommended it.
Again, the defendant is recommending the Drug
Enforcement Administration buy a Sinatra compact disk. So
anyway, those transactions, now when they start billing those
transactions, well, they call them CD rom, one lot or CD rom
package. That’s what they are called, although really they are
both laser disks and compact music disks. They are all one
package virtually. They are all thrown together. Whenever
they are out of money, they just come together and come up
with another invoice.
Eventually, we get into 96. We have got hardware.
You know, we have got lawn mowers, and we get into
cabinets, these Sorice glass-door cabinets. Burchell is
collecting so many movies. Imagine the problem he’s got. He
is into at this point in time nearly a $100,000 worth of movies
and music, so he gets, the very first crack he gets 16 of these
top-of-the line cabinets that are especially designed with glass
doors. When you look at the internal records of Ritz, you will
see some nice brochures there that describe these things.
He tells him. He tells him what they are for. Of
course, the defendant says, I didn’t know what these were for.
He never said that, you know. So the DEA is now buying, not
102a
only did they buy all this equipment, music and stuff, they are
also buying these nice cabinets, which are especially designed
for laser disks with nice little spaces for the music and so
forth.
So the transactions continue. All kinds of Sharp
video projectors are purchased, and then in June or July 1996,
a very important event happens. This is absolutely
uncontested in the case. Even if you don’t believe a word of
Burchell, you have got to believe this.
What happens? Gary Lunsford, they are trying to
sell a Sharp video projector to the McLean Bible Church. The
deal doesn’t go through. The other salesman goes out to visit,
finds out about it, comes back and reports what happened.
Here’s Lunsford there. Here’s the defendant there.
What does this guy Chris Williams say? They have already
got a video projector at some price, and he quoted the price.
The price was less than what the authorized dealer, Ritz, was
able to pay for it.
So what does Lunsford do? He gets the serial
number. He says, Let’s go check. Remember, they are the
authorized dealer. Somebody was invading their territory.
He’s the authorized dealer. He goes in and runs the serial
number, and he says, I can’t believe it. This is one we sold the
DEA. That’s uncontested.
The defendant took the stand. He didn’t deny that
that conversation took place, so you know for a fact that
happened. Now, you see he can’t -- he would love to be able
to say his business partner is a liar, but he can’t do that. He
can’t say that Lunsford is a liar, so you have just got to accept
that fact. It happened.
So he knows now that Burchell is selling one of
these video projectors. It’s being sold at a price that is below
what they could do.
What happens? Now Lunsford says, I didn’t say
anything. Did you try to confront him? No, we didn’t.
103a
Burchell says nobody said anything to him. You see, nobody
says anything. Lunsford, he knows these transactions are
profitable.
What do we know from Lunsford? The DEA was
their second biggest customer over that four-year period. The
only customer bigger than that was the Seventh-Day
Adventists Church. Lunsford didn’t want to necessarily rock
the boat, and Dvorak, he was silent. He didn’t speak up. He
didn’t say anything. That proves, you see, he really knew
what was going on.
Had he been innocent, had he been just fooled by all
these transactions, he would have said, Wait a minute. We
had better call the FBI, or we had better go find out, why did
this happen?
So anyway, the transactions continue, and there’s a
very significant transaction. A month after this McLean Bible
Church incident, Burchell comes in and says to Dvorak, I
want a boat for the lake down there. He explained how he
lived on nice little lakefront property down in Bracey.
What happens? Dvorak says, I don’t think I can do
a boat, but I do know a guy, so he brings in this guy
Tomlinson, who is next door, Global Sales. Now, what do we
know about Global Sales?
Mr. Lunsford explained Global Sales is like a
marketing agent for them. I mean, Global Sales gets on the
phone and tries to get Government customers to buy the
equipment.
All the paperwork is done by Ritz. Ritz invoices the
sale. These guys just put the deal together. They are on the
phone. They put the deal together, and when they put the deal
together, they get a commission. ;
So money flows from Ritz, which makes the deal.
They sell it, and they would pay a commission, 60-40,
whatever, to these guys, Bob Tomlinson and his partner,
104a
Chester Johnson. So that’s what you know about Global
Sales.
Well, he calls this guy Tomlinson in, and Dvorak,
or, Burchell testifies how, you know, they talk about he needs
a boat. Burchell gives him a description.
Tomlinson says, Well, I know somebody, and
Tomlinson goes out and contacts, and the deal is set in
motion. They have a second meeting. Again, all these -- these
meetings are in Dvorak’s office. At the second meeting, what
happens?
The second meeting, they are sitting there, and
that’s when the topic comes up about what to pay, how much
money is the DEA going to be charged and what to use?
Burchell describes it. The three of them are around
like in Dvorak’s office, and Burchell says, It’s got to have
something to do with computers. And they all suggest, Mr.
Dvorak suggests some wording, and Mr. Tomlinson suggests.
Finally, Tomlinson comes up with the word motherboards,
and that’s what they decided to do.
There are three invoices, Exhibits 101, 102, and
103. That’s about $65,000 of motherboard, you know,
ostensibly, motherboard sales to DEA, when in reality what
was it? It was a boat.
Now, on the second or the third meeting, Burchell
brought up the idea, I want some golf clubs for his sister. So
the golf clubs come up, and again, what does Dvorak say to
him?
He says, Well, you know, Tomlinson plays golf, so
we'll get him involved. So Tomlinson comes in. Tomlinson,
you know, goes out and buys golf clubs. That gets in the deal,
too. There are ultimately three invoices, about $65,000 is paid
for a boat and golf clubs. Now, Mr. Dvorak’s explanation of
this doesn’t make any sense.
105a
First of all, Dvorak says, Well, I brought them
together. They were in my office. I was on the phone, like, I
didn’t really know what they were talking about.
Now, wait a minute. Mr. Burchell is in the middle
of a fraudulent transaction, and he’s going to have some guy
go out and get a boat and have that guy bill it as
motherboards? How does Burchell have the trust to deal with
this guy Tomlinson? He’s never dealt with him before.
Clearly, he would want Dvorak in the picture.
And also golf clubs. What did Mr. Dvorak say
about golf clubs? I didn’t even know there was golf clubs
involved. He didn’t know anything about golf clubs.
Well, is Burchell going to go off on his own and
deal with this guy Tomlinson? Again, he has got no trust.
There hasn’t been any relationship built up the way there was
the defendant. He has no relationship with this guy.
He’s going to say, I'll tell you what, I want you to
go out and buy by some golf clubs, and I want you to bill it to
the Government as motherboards?
This guy is going to say, Wait a minute. I’m going
to ask some questions. I’m going to make a phone call here.
So, it’s clear this transaction would never have
occurred with Burchell and Tomlinson unless he had Dvorak
in the middle to protect him. Dvorak -- he relied on Dvorak.
And, obviously, Tomlinson, he doesn’t know Burchell. So it’s
Dvorak that links the two. Yet Dvorak says, Well, they were
in my office, and I was on the phone, but I didn’t really know.
I didn’t know anything about motherboards.
What I did was, since Mr. Tomlinson didn’t
invoice, I created a template off my Excel spread sheet and
gave it to him. And I didn’t know anything about
motherboards.
Wait a minute. You mean, you are telling me that
Mr. Burchell is so reckless that he would deal with a guy that
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106a
he never dealt with before and tell him, Now, you buy a boat.
I want you to sell a boat to the DEA and I want you to call it
motherboards. It’s inconceivable that Burchell would do such
a thing.
And Lunsford, he admitting knowing more about
the transaction than the defendant. Lunsford knew it was
billed as motherboards. Lunsford saw a purchase order. He
said Tomlinson showed me a purchase order, and I knew
there was a boat being bought, and I knew that it was being
billed as motherboards. And that’s why Lunsford lied.
When the FBI came around and interviewed,
Lunsford admitted that he lied about that transaction, because
both he and Dvorak got $5600 each.
Now, Mr. Dvorak, he didn’t want to admit to the
$5600, you know, like it’s a commission, like I somehow, like
it’s not money I made in the deal, or I didn’t get anything out
of this, like I was paid in Russian rubles or something, you
know, like I didn’t get -- well, it’s a commission.
Let me tell you, Mr. Lunsford explained this wasn’t
just the standard commission. The standard commission is
they pay, they pay Global. The money doesn’t flow the other
way, and this is the only time Lunsford ever knew of a
situation where he was getting money, and they are getting
personal money. This is a check personally to them.
The money is not run through the company, through
David Ritz, 20-percent owner of the company. The money is
not going through that. They helped arrange this deal, and
they get $5600 each. The defendant somehow couldn’t admit
the fact that he made some money in this deal.
So anyway, that transaction, these things continue
on. We get into just a litany of purchases being made.
Vacuum cleaners. I mean, you know, Burchell testified he
was in his office looking at a catalog, and, you know, a
microwave oven, a microwave oven got billed as a microwave
switch. All these things were going on, more movies, more
107a
music. And what’s interesting is the number of Sharp video
projectors, and you will see this when you look at the chart.
After they hear, both of them, Lunsford and
Dvorak, hear about that McLean Bible Church situation, right
afterwards, there was about another forty or fifty, or about
forty, I think, video projectors being sold. They know full
well what’s going on.
So anyway, they finally, they continue to bill, and
these cable descramblers, remember that story? Burchell said
that he wanted to get some cable descramblers.
Well, Dvorak didn’t want to actually buy them. He
was concerned they might be illegal. So what he did was, he
said, I’Il tell you what. You bill me for the sale, and I’ll get
money orders, and then the dealer will just deliver them to
your office; and you take these money orders because they
will be COD, and you pay for them.
So it’s as though the Government needs to have Mr.
Dvorak to be in the middle of this deal and has to go out and
get money orders so that these cable descramblers can be
purchased. It just makes no sense at all.
So anyway, we get to the point in 97 where
Burchell is becoming increasingly aggressive in what he’s
doing, and, you know, he gets a hot tub, you remember.
And, of course, I asked Mr. Burchell, Why would
you ask for a hot tub? I mean, were you fearful or concerned?
He says again, I trusted Mr. Dvorak. We had been
doing this. I trusted him. He had told me a number of
occasions, whatever you want, I’ll get for you. And see this
trust, you see in a conspiracy trust is important because you
are really exposing yourself.
The other person can blow the whistle on you, so
that relationship has to build. That’s why it’s inconceivable
that Burchell would go off on his own with Tomlinson and
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get a boat and golf clubs and call them motherboards, and yet,
that’s the defendant’s version.
Does that make sense? That explanation is as
ludicrous as what I call the mystery explanation for Exhibit
18, the famous first laser disk transaction, you know, the
invoice that came out of nowhere. Again, that invoice was
explained.
By the way, getting back to that exhibit, Mr.
Lunsford explained that you could manually go in the system
and change the invoice number. It was possible to create that
invoice. Of course, you know, there is no explanation as to
why it exists from the defendant.
In any event, but in °97, it’s important because
Dvorak begins to sense that the nature of these purchases,
Burchell is going to get caught one of these days. So he
happens to stick his head in the door in June or July of 97,
and the transactions are still going on. And he tells Mr.
Lunsford, his business partner, you know, One of these days
the FBI is going to come around and ask questions.
Now, again Mr. Dvorak, he can’t call his business
partner a liar. He can call -- every time he has got an
uncomfortable conversation, he says, Well, Burchell is lying.
Burchell is lying. But his business partner, so what can he do
with that? He can’t say Mr. Lunsford, my business partner,
lied about that statement about the FBI.
So what he does is he puts a spin on it, and he says,
Well, it was out of context. What I was telling him was I was
concerned about, you know, all this litigation companies have
about workmen’s compensation and, you know, who knows,
one day the FBI is going to come in and shut you down, like
you have got some disgruntled employee, and workmen’s
compensation and litigation costs.
That explanation, ladies and gentlemen, you know,
everybody knows the FBI doesn’t go around and knock on
your door because you have got a workmen’s comp problem.
109a
Now, whatever you have to think about Burchell,
and you have got to weigh Burchell’s testimony carefully.
Burchell is a thief. He defrauded his own agency. He worked
for 25 years, defrauded it, $2 million. You have got to weigh
carefully what he says.
But I will tell you, ladies and gentlemen, Burchell never
told you anything that insulted your intelligence. He never
told you anything stupid. And yet, that statement about the
FBI coming around because of a workmen’s comp probiem
fear, that is outrageously stupid. That’s the sign of a desperate
man.
Burchell, all he had to do was tell the truth. The
defendant, he’s desperate, and there is no better Sign of that
than that absolutely ridiculous -- and again, see he couldn’t
call his businss partner a liar, so he had to admit that the
conversation occurred.
So again what happens? Finally, you know, the
deal, and Burchell testifies in late October. The FBI comes
up. Everything collapses, and there is that little period there
where, several weeks, where they are trying contact Burchell.
He’s not contacting them, and they are trying to contact him.
The movies are building up and merchandise. There has been
no contact.
Lunsford says, you know, in the middle of this
period, he says, Well, Dvorak told me again, you know, The
FBI is going to come round, I think. They are going to come
around and talk to us.
Yet, what happens? When the FBI shows up
December Ist, what does he say to the FBI? He says, Well,
there was wasn’t anything Suspicious; there wasn’t anything
suspicion in dealing with Mr. Burchell.
Lunsford, he lies, because at least he knows about
the boat deal, and so, you know, he’s troubled enough about
the deal. Of course, he knew all about the fact that McLean
Bible Church got this video projector.
110a
Of course, Lunsford doesn’t see a lot of these
invoices that go out. He only sees the retained copy. Very
often, that is the sanitized copy. You see, that’s the copy they
keep in their records. Nobody told him what was it we really
sold, you see.
So Lunsford doesn’t see all this stuff, but he - you
know, he lies. But the defendant, he says, Oh, there’s nothing
suspicious here, even though he told Lunsford on two
previous occasions, you know, This deal, the FBI is going to
come in and ask questions.
Now, why -- here is the key question, ladies and
gentlemen, I would like you to keep asking yourself
throughout this as you deliberate. Ask yourself why Burchell
was willing to risk exposure by ordering such outrageous
things as, you know, golf clubs, and snowblowers, and
massage chairs, and all this stuff?
Why was he? Because, you know, if he feared
exposure from Mr. Dvorak, if he was in a situation where he
thought he was fooling Mr. Dvorak, do you know what he
would do? He would just buy more Sharp video projectors,
you know, get the money. He was selling them at a pretty
good price. After all, it didn’t cost him a dime for them. Sell
them and then go out and buy a hot tub with the cash, you see.
If he felt that this guy here, you know, I’m fooling
him, Mr. Dvorak, I’m fooling him. He thinks these are -- so
why would he be so -- why would he order these kinds of
things from him? He could just buy more video projectors
from him and take the money and then go out and buy
vacuum cleaners and snowblowers and jet skis. But he didn't
buy them. You know, it was a pain in the neck to sell these
things.
He just says, Hey, man, I trust this guy. He knows
what I’m doing. So what does he do? He just says, You go out
and get it. I want to buy a hot tub. Bill it to DEA as a
whatever, all right.
Illa
So, that tells you so much that there was a mutual
understanding. A conspiracy is not necessarily an explicit
agreement. It’s a mutual understanding, a coming together of
two people with a mutual objective, profitable to both with an
illegal purpose understood.
Now, it’s not necessary that the defendant
understand every aspect of what Burchell is doing, as long as
he understands the underlying, illegal purpose.
Now, you have heard a little bit about pinball
machines and sting operations, you know, undercover
operations, and so forth. Sure, I mean we all know this.
Everybody knows, anybody who reads newspapers knows
that the DEA might be involved in some undercover deal.
It’s conceivable _ the Drug __ Enforcement
Administration might need to buy some pornographic movies.
Who knows? But they don’t have to be billed —- I mean, there
is no reason -- I can tell you about this pinball machine. The
defendant says he heard about some pinball machines out
there that the DEA was putting cameras in.
Let me tell you, ladies and gentlemen, whoever sold
the pinball machines to DEA, I’ll bet you they didn’t invoice
them as, you know, hand-controlled, electronic, rotating
devices, right? They probably called them pinball machines.
Now, you are going to hear a lot about, well,
Burchell is a liar, you can’t trust Burchell. It’s true you have
to weigh carefully, no doubt about it, you have got to
carefully weigh what he said.
Now, a couple of things. Burchell admitted, and this
was established, the first time he met with the FBI and started
to confess what he was doing, he told them right up front
about Mr. Dvorak and another vendor by the name of
Robinson. That was established. He told them.
He held back, he admitted he held back on some of
his DEA employees and his ex-wife, Jean Burchell. He was
kind of reluctant to give them up. It wasn’t until the
112a
documents were put in front of him that he told the whole
story, involving you know ten years, hundreds of transactions.
Now, counsel made this big point, Well, now when
you told the FBI such and such, you didn’t tell them about
this conversation about some specific, that jet skis were being
used. You didn’t tell them that.
He was being interviewed on hundreds - of
transactions, all kinds of deals, on a particular deal he have
might have mentioned to Dvorak. He was in the Grand Jury
for one hour. He was on the witness stand here, focused
exclusively on this case, for three hours. So the fact that he
might, there’s no -- when he was interviewed by the FBI,
didn’t say a particular thing, the obvious question is he wasn’t
asked, he wasn’t asked about some of the things that he was
asked on the witness stand. ,
This is a guy that had to be debriefed. I mean, you
can imagine ten years’ worth of fraud, involving Mr. Hendrix,
his former wife, and he had knowledge of many other people.
He pled guilty, he cooperated, and his sentence was reduced
from 48 to 40 months as a result of that.
Now, let me just talk a little bit about the
indictment. Again, he’s charged with a conspiracy, the
opening count of the indictment. His Honor is going to
explain the law to you. He’s charged with conspiracy to
defraud the United States by using some deceptive device.
You know, fraud is anything deceptive. You know,
it’s kind of like, it’s as old as falsehood. You can’t define
fraud. Fraud is as old as falsehood and as versatile as human
ingenuity. You know it when you see it, all right. You saw
plenty of it in this case. Also, conspiracy to commit false
statements, and some of the counts of the indictment, counts
two through fifteen identify specific false statements.
Now, counsel may argue that some of this stuff is
not false. Like he may say, Well, wait a minute. Count eight
here, movie laser disks, what’s wrong with calling them CD
113a
roms? I mean, they aré -- or computer data device? I mean,
it’s like saying, you know, after all, you know, a refrigerator
is an electronic storage box, isn’t it? So, what’s wrong -- is it
false if I call a refrigerator a -- I realize we don’t have
anything about a refrigerator -- I’m just using that as an
example -- the point being is that if you come up with some
technical jargon that’s not the normal, the normal
nomenclature for that item, it’s untrue.
You walk into Circuit City or some of these -- I
want to buy a CD rom, one-lot package. They are going to
look at you and say, What are you talking about? Okay? You
have got to call things what they are. There Clearly was intent
to deceive. Burchell has explained th
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