United States v. Robert Scully ( 2020 )

Case: 16-51429 Document: 00515332685 Page: 1 Date Filed: 03/04/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 16-51429 March 4, 2020
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff - Appellee
v.
ROBERT WARREN SCULLY, also known as Robert Scully, also known as
Robert W. Scully,
Defendant - Appellant
Appeal from the United States District Court
for the Western District of Texas
Before HIGGINBOTHAM, DENNIS, and HO, Circuit Judges.
JAMES L. DENNIS, Circuit Judge:
A jury convicted Robert “Bob” Scully of conspiracy to defraud the United
States, conspiracy to commit wire fraud, and three substantive counts of wire
fraud, relating to the operation of his company, Gourmet Express. Scully
appeals his conviction and sentence, arguing that (1) the IRS agents’ search of
his home office violated the Fourth Amendment; (2) the Government’s timing
in its filing of the second superseding indictment violated due process; (3) the
five-year delay between the indictment and trial violated his Sixth Amendment
right to a speedy trial; (4) the evidence was insufficient to sustain his wire-
fraud convictions; (5) his sentence was substantively unreasonable; and (6) the
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district court erred in imposing restitution. For the following reasons, we
AFFIRM.
I. Facts & Procedural Background
Scully was the owner of Gourmet Express (Gourmet), a company that
produced frozen meals. Gourmet’s other two partners—Scully’s nephew, Kevin
Scully (Kevin), and Kenneth Sliz—shared ownership and management of the
company along with Scully.
Initially, Gourmet bought shrimp for its frozen meals from U.S.
brokers—firms that imported shrimp from overseas and resold them in the
United States. Because this approach had high costs, Scully arranged for his
sister-in-law in Thailand, Nataporn Phaengbutdee (Nataporn), to inspect
shrimp there for one of Gourmet’s U.S.-based suppliers. Nataporn received a
commission, which was incorporated into the price Gourmet paid. Even with
the added cost of the commissions, the price Gourmet paid for shrimp was
reduced from around $4.80 a pound to $3.50 a pound.
Nataporn, acting at Scully’s suggestion, created various companies to
work as seafood inspectors for Gourmet. The first such company was Siam
Star. Scully and Kevin each owned part of Siam Star for about six months,
and Scully’s wife eventually controlled a majority of its shares. For tax
reasons, Nataporn later operated the business through a different entity, a
company called N&D, and later still, to a company she created, Groupwell.
Gourmet was the only food import customer for Siam Star, N&D, and
Groupwell. Nataporn’s companies did not physically possess the shrimp
Gourmet purchased. Instead, these companies paid the shrimp producers to
ship directly to Gourmet. Nataporn’s commission was for inspecting the
product on location at the plant and providing “boots on the ground” to ensure
that the shipment was uncontaminated and safe to sell to the customer, and
for assuming the risk of a failed shipment.
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Scully and Kevin received a portion of this commission, often through
accounts in their wives’ names. Nataporn sent hundreds of thousands of
dollars to her sister, Nunchanat, Scully’s wife, and Nataporn’s companies sent
hundreds of thousands of dollars to Mika Kon, who was a relative of Kevin’s
wife, Terumi.
Scully and Kevin did not disclose these payments on their federal tax
returns, nor did they disclose them to their business partner Sliz. When the
partnership between Sliz and Scully began to sour, Sliz started investigating
and discovered that Gourmet was overpaying for its product and paying a
premium to Nataporn’s companies. When Sliz asked Scully who owned or
controlled the companies, Scully said that he did not know.
The dispute between the partners resulted in civil litigation. Around the
time the lawsuit was filed, Scully deleted documents from a folder on his
computer labeled “Siam Star” and testified at a hearing that he didn’t know
how much Nataporn’s companies were paying for the shrimp the companies
sold to Gourmet; Scully was in fact in touch with the shrimp producers and
instructed Nataporn on how to negotiate prices with them. Kevin created
spreadsheets tracking the difference between the price Nataporn’s companies
paid for shrimp and the price those companies charged Gourmet.
The conflict among the partnership resulted in an outside investor, the
Ilex Group, purchasing Gourmet. Scully and Kevin were paid millions for their
interests in Gourmet and were able to stay on as executives and buy back in
as minority shareholders in the company. Ilex bought Sliz’s share, and Sliz
warned Ilex about the relationship between Gourmet and Nataporn’s company,
Groupwell. Scully assured Ilex that “the only problem with Groupwell was not
documenting the fact that my sister-in-law works there,” that Groupwell was
an independent entity, and that he and Kevin “weren’t really privy to” any
financial interest in the company. Scully and Kevin not disclose to Ilex that
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Nataporn controlled Groupwell and that Groupwell’s only food import
customer was Gourmet. Ilex later terminated Scully and Kevin after the two
attempted to have a new Chief Operating Officer fired.
A. Search of Scully’s Home Office
Concerned that Gourmet had been involved in federal crimes while he
owned it, Sliz went to the IRS, which launched an investigation. IRS agents
secured a warrant to search 1015 East Cliff Drive, which was Scully’s residence
and, according to a Gourmet company document, was also Gourmet’s “West
Coast Regional Office.” The affidavit submitted to the magistrate judge in
support of the warrant explained that Scully “converted a small apartment
behind the residence into an office” where he did work for Gourmet and that
officers were looking for the sort of evidence that would be found in a home
office. The affiant, Agent Gary Ploetz, stated that, in his experience, “business
records are kept at addresses listed as a business office.” The affidavit further
stated that “the latest Gourmet employee phone directory and office listing”
listed 1015 East Cliff Drive as an office, and that a phone and fax number were
listed for the same address.
Before preparing the warrant, agents reviewed satellite images of the
location and drove past it. IRS Agent Demetrius Hardeman prepared the
warrant application, and Ploetz acted as the affiant. They had the warrant
application reviewed and approved by local agents and the local U.S.
Attorney’s Office. A federal magistrate judge reviewed and signed both the
warrant and the affidavit in support. The agents involved in the seizure were
each provided a copy of the warrant before the raid. While the affidavit in
support of the warrant explained that Scully’s home office was in a building
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separate from the residence, the warrant included a physical description of the
primary residence only. 1
Scully’s home office was in fact located at 1015½ East Cliff Drive, a
separate building behind the primary residence and down a private sidewalk.
The parcel of land contained three structures served by one driveway—the
primary residence at 1015 East Cliff Drive, the home office behind the primary
residence at 1015½ East Cliff Drive, and a structure to the left of the primary
residence that was rented out. In addition to the primary residence, the agents
searched the home office at 1015½ East Cliff Drive and seized from that
location documents and an image of Scully’s computer hard drive. Agent
Hardeman instructed Ploetz’s team to not search the third structure on the
property because it was leased by someone else.
The agents also secured a warrant to search Kevin’s home, and inside a
cooler hidden in the crawl space underneath the home, agents found records
from a foreign bank documenting the transfers to Kevin’s wife from Nataporn’s
companies. The agents also recovered documents tracking the commissions
Scully and Kevin received. The searches of both homes uncovered documents
showing the commissions and the Scullys’ involvement with and monitoring of
Nataporn and her companies.
1The description stated in full:
The location of the premises is at the address of 1015 East Cliff Drive, Santa Cruz,
CA 95062 and is described as follows:
• It is a white, wooden, one story residence with green trimming. There is a
small wrap-around driveway that has one way in and out. A small sign with
house number “1015” is hanging in front of the house from the roof of the porch.
The front door has a screen door with green trimming.
• There are large bay-windows in the front left of the residence.
• Residences are only located on the northbound side of East Cliff Drive.
• Facing the residence from the street, there isn’t a house on the right side. The
home is covered by trees.
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B. Indictment and Trial
In July 2010, a grand jury indicted Scully for conspiracy to commit tax
fraud and aiding in filing false tax returns. 2 A superseding indictment in
November 2010, in addition to these charges, added one count of conspiracy to
commit wire fraud and five individual counts of wire fraud, alleging that Scully
and Kevin defrauded Sliz.
1. Motion to Suppress
Scully moved to suppress the evidence seized from his office, arguing
that the search of the office was unreasonable under the Fourth Amendment
because it had a separate street address not listed on the warrant and because
the physical description of the property contained in the warrant described
only the primary residence and not the separate home office. At a hearing,
Scully presented evidence showing that Pacific Gas and Electric had the
primary residence and home office listed as separate accounts at separate
addresses. Agent Hardeman testified that while he knew there was a small
apartment/office located behind the primary residence, he did not know that
the buildings had separate addresses and did not investigate whether the
separate buildings had separate addresses or utilities. Agent Ploetz did not
check with the post office to see if the home office had a separate address. The
agents explained that they had treated the front house and home office as part
of the same location during the search, that they did not realize that there was
such an address as 1015½, and that they had sought and executed the warrant
in good faith. The district court denied Scully’s motion to suppress, finding
that “law enforcement’s activities [were] reasonable within the Fourth
Amendment” and “not in violation of the good faith exception.”
2The charges against Kevin and Scully were one count of conspiracy to commit tax
fraud and three counts of aiding and assisting in filing false tax returns. Additionally, Kevin
individually was charged with five counts of filing false tax returns and one count of perjury.
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2. Second Superseding Indictment
Beginning in December 2010, Scully began moving for leave to depose
Nataporn and other foreign witnesses to prove that the Thai corporations in
the indictment were not shell corporations. The district court originally denied
the motion but granted Scully’s motion for reconsideration two years later,
allowing the depositions in Thailand to go forward in July 2013.
After the first set of depositions in Thailand in October 2013, the
Government secured a second superseding indictment that removed the
charges against Kevin, who died while the case was pending, and the allegation
that Nataporn’s companies were “shell compan[ies].” Scully moved first to
continue the case based on the second superseding indictment and later moved
to strike the second superseding indictment. He argued that the Government
“changed the tenor of this prosecution” and explained that his questioning of
the witnesses in Thailand would have been different if the second superseding
indictment was active at the time the depositions were taken.
The district court denied Scully’s motion. After comparing the two
indictments, the district court concluded that the Government curtailed,
rather than expanded, the charges against Scully. The district court continued
the case until March 2014 and allowed Scully to take additional depositions in
Thailand based on the second superseding indictment.
Nataporn’s second deposition was conducted in February 2014. At the
deposition, she produced two letters that she presented as Groupwell business
records. Each bore the letterhead of a Thai shrimp producer that had shipped
to Gourmet, and each recited that the producer had a commercial relationship
only with Groupwell, not Gourmet. The Government detected in the original
files evidence that suggested that Scully had drafted the text of the letters and
directed Nataporn to have it printed on the shrimp producers’ letterhead and
sent back to Groupwell and Gourmet. The Government alerted Scully’s
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counsel and the district court in March 2014 that the letters were potentially
fabricated, and the district court postponed trial to August 2014 to allow time
for a forensic examination of Scully’s hard drive. 3
Scully moved repeatedly to dismiss the second superseding indictment
for post-indictment delay, arguing that trial would not happen soon enough to
satisfy the Sixth Amendment’s speedy trial clause. In the alternative, Scully
requested a continuance until February 2015, which the court granted.
After granting the continuance, the district court denied Scully’s
renewed motions to dismiss the second superseding indictment for post-
indictment delay, reasoning that “the reasons for the delay were not negligence
on the part of the Government,” “much of the overall delay was due to
Defendant’s requests,” and “there was little danger that the Defendant’s
defense had been impaired by the delay.”
A few months before the trial date, the Government informed Scully’s
attorney that new discovery was available. The Government had conducted a
deeper investigation into Scully’s computer and produced new documents it
intended to use in its case in chief. Scully argued that the new discovery was
overwhelming and that he needed more time to review it and to conduct
another set of depositions in Thailand to address the new documents. The
district court allowed a third round of depositions in Thailand and rescheduled
trial for October 2015.
3 The Government introduced evidence at trial that when the experts reviewed
Scully’s computer, they discovered that the letters purportedly sent from shrimp suppliers to
Groupwell and Gourmet were saved on Scully’s computer. The letters’ metadata indicated
that the document was titled “Please send this letter with SMP letterhead addressed to
Groupwell and Gourmet Express” and sent to Nataporn. The two letters purportedly from
two different shrimp suppliers were materially identical, including punctuation and spacing
errors.
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3. Trial and Sentence
After a fourteen-day trial, the jury found Scully guilty of (1) conspiracy
to defraud the United States, (2) conspiracy to commit wire fraud, and (3) three
individual counts of wire fraud. It acquitted Scully of preparing false tax
returns.
The district court imposed concurrent, below-guidelines sentences of 180
months on the wire-fraud counts and 50 months on the tax-conspiracy count.
It also found that the Government established beyond a reasonable doubt and
“certainly by a preponderance of the evidence” that the United States lost
$1,206,539.94 in taxes and ordered restitution in that amount. Scully appeals,
arguing the district court committed several errors.
II. Fourth Amendment
First, Scully argues that the district court erred in admitting evidence
seized from his home office because the search violated the Fourth
Amendment. He claims that the officers exceeded the scope of the warrant
when they searched the home office behind his house at 1015½ East Cliff Drive
because the warrant 4 described only the primary residence at 1015 East Cliff
Drive. The Government argues that the good-faith exception to the
exclusionary rule applies because the agents did not commit the sort of
deliberate, reckless, or grossly negligent violation that would warrant
suppression, and, alternatively, that the good-faith exception is unnecessary
because the warrant adequately described the location the agents searched,
and therefore the search did not violate the Fourth Amendment.
We review “de novo the reasonableness of an officer’s reliance upon a
warrant issued by a magistrate.” United States v. Satterwhite, 980 F.2d 317,
4 The description was in fact included as an attachment to the warrant, and the
attachment was cross-referenced in the warrant itself. We refer to the description as if it
were contained in the warrant for ease of reference.
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321 (5th Cir. 1992). When evaluating a motion to suppress, “[w]e consider the
evidence in the light most favorable to the verdict, and accept the district
court’s factual findings unless clearly erroneous or influenced by an incorrect
view of the law.” United States v. Carrillo-Morales, 27 F.3d 1054, 1061 (5th
Cir. 1994).
In United States v. Leon, 468 U.S. 897 (1984), “the Supreme Court held
that the Fourth Amendment does not require the suppression of evidence
obtained as a result of objectively reasonable reliance on a warrant, even if the
warrant is subsequently invalidated.” United States v. Cherna, 184 F.3d 403,
407 (5th Cir. 1999). “We employ a two-step process for reviewing a district
court’s denial of a motion to suppress when a search warrant is involved.” Id.
We first “determine whether the good-faith exception to the exclusionary rule
announced in [Leon] applies,” and if it does, the analysis ends. Id. “If not, we
proceed to the second step, in which we ‘ensure that the magistrate had a
substantial basis for concluding that probable cause existed.’” Id. (alteration
omitted) (quoting United States v. Pena-Rodriguez, 110 F.3d 1120, 1129 (5th
Cir. 1997)).
The warrant in this case presents two potential issues. First, it listed
only the address for the primary residence, 1015 East Cliff Drive, and not the
address for the separate home office that the agents searched, 1015½ East Cliff
Drive. Second, the warrant’s description of the place to be searched described
only the primary residence and not the home office. We address each potential
problem in turn to determine whether either, or both combined, rendered the
officers’ actions in searching the home office unreasonable.
A. No Address
We first address whether the officers were reasonable in searching the
home office though it carried a different address. We conclude the agents acted
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reasonably and in good faith in their belief that the warrant for 1015 East Cliff
Drive authorized the search of the home office.
We have previously relied on the good-faith exception to uphold the
admission of evidence obtained from two separate addresses though only one
address was listed in the warrant. We applied the good-faith exception in
United States v. Carrillo-Morales, to excuse the search of 1418 West Avenue
pursuant to a warrant authorizing a search of a separate address, 1414 West
Avenue. 27 F.3d at 1063-64. The location of 1414 West Avenue contained two
buildings: an office building for a body shop business, and an adjoining garage
shop. Id. at 1058. The defendant “lived in the shop,” and the officers searched
that residence as well, “which [the defendant] claimed was 1418 West Avenue
rather than 1414 West Avenue.” Id. The search warrant authorized a search
of only 1414 West Avenue, the address of the body shop. Id. at 1059. In
concluding that the good-faith exception applied, we considered that (1) the
defendant’s residence “was inside the building where the garage area was
located”; (2) “[t]he number 1414 was painted on the outside of that building”;
(3) “[t]he two buildings on the premises were similar in appearance and
separated by an awning”; and (4) “the name Crown Paint and Body Shop was
on both buildings.” Id. at 1064.
Similarly, we upheld a search of two office buildings—located at 9172
Highway 51 N., Suite B, and 9170 Highway 51 N.—where both offices were
occupied by the same company, KMC, but the warrant specified only the 9172-
B address. See United States v. Judd, 889 F.2d 1410, 1412 (5th Cir. 1989).
Despite deciding the case on other grounds, we “nonetheless point[ed] out
briefly that [the defendants’] substantive complaint is contrary to the well-
established law concerning the specificity required in warrants.” Id. at 1413.
We explained that an error in description is not always fatal, that “the agents
checked the city business license records, bank records at a local bank,
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corporate filings with the Mississippi Secretary of State, and the address on
KMC letterhead to ascertain KMC’s address,” that the offices were in the same
building complex, and that “the door to 9170 was only 25 to 30 feet away from
the door to 9172-B.” Id. On those facts, we “conclude[d] that the description
of the KMC location contained in the search warrant was sufficient to support
a search of the KMC office at 9170.” Id.
Finally, in United States v. Melancon, we concluded that the search of a
defendant’s residence (located at Route 2, Box 622) and his business (located
at Route 2, Box 623) was authorized by warrant listing only the business
address as the place to be searched. 462 F.2d 82, 92-94 (5th Cir. 1972). We
noted that no fence separated the parcels, and there was a pathway worn
between them. Id. at 92-93. Moreover, the defendant listed Box 623 as both
his business address and residence in his application for a federal firearms
license. Id. at 93. The district court found no “reason to divide the premises
in two lots when the physical aspect of this whole set-up showed it was clearly
one establishment with a worn pathway between the two and obviously Mr.
Melancon lived in one and worked in the other.” Id. We affirmed the district
court’s denial of the motion to suppress, concluding “that the description of
Melancon’s property provides no basis for the invalidation of the search.” Id.
at 92-94.
Turning to the case at bar, in determining the place to be searched as
1015 East Cliff Drive, the agents relied on the Gourmet corporate documents
listing the West Coast Regional Office at that address, including “the latest
Gourmet employee phone directory and office listing,” and a phone and fax
number listed for the that address. They reviewed photographs and satellite
imagery, drove past the location, and relied on information provided by Sliz.
Though the Government could have done more and with additional research
may have discovered the separate addresses, it was reasonable to believe that
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the address listed on the company documents as the West Coast Regional
Office was in fact the address of the office. See Judd, 889 F.2d at 1413
(corporate filings showed only one address); Melancon, 462 F.2d at 93
(appellant did not distinguish between business address and residence in
application for firearms license). Moreover, no signs or markings indicated
that the home office carried a separate address, and both structures were
similar in appearance, were contained on a singular rectangular lot within the
same fenced area, appeared to be connected by the same utility wires, and were
connected by a sidewalk. See Carrillo-Morales, 27 F.3d at 1064 (“[t]he number
1414 was painted on the outside of that building” and “[t]he two buildings on
the premises were similar in appearance and separated by an awning”); Judd,
889 F.2d at 1413 (two offices were in the same building complex and “the door
to 9170 was only 25 to 30 feet away from the door to 9172-B”); Melancon, 462
F.2d at 92-93 (pathway worn between two structures and no fence separated
them). Under the circumstances, the officers acted reasonably and in good
faith in not including the address 1015½ East Cliff in the warrant application
and in believing that the warrant for 1015 East Cliff Drive covered both
buildings.
B. No Description
We next determine whether the officers were objectively reasonable and
acting in good faith in their belief that the warrant containing a physical
description of only the primary residence authorized the search of a separate
building behind the primary residence. See Leon, 468 U.S. at 922-23. Based
on the circumstances of this case, we conclude that they were.
Our court and others have upheld searches where the warrant lacked a
physical description of a second location searched by the officers. See United
States v. Bansal, 663 F.3d 634, 663 (3d Cir. 2011) (warrant that authorized
search of “premises” at address authorized search of detached garage); United
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States v. Gahagan, 865 F.2d 1490, 1492, 1499 (6th Cir. 1989); United States v.
Prout, 526 F.2d 380, 386 (5th Cir. 1976) (warrant that authorized search of
address of real estate office authorized search of apartment with separate
address “[g]iven the physical layout of the premises and their use by [the
defendants], as observed by surveillance officers” because both premises
shared a common foyer and “there was little likelihood that the wrong premises
would be searched”).
The Sixth Circuit has upheld a search where the officers searched a
building not described in the warrant and located at an address not listed in
the warrant. Gahagan, 865 F.2d at 1492-93, 1499. The warrant in that case
listed and described only 7609 Douglas Lake Road, one of four separate
dwellings in the rural area, as the place to be searched, but the officers
searched one other nearby dwelling that carried a separate address. Id. at
1493-94. The Sixth Circuit determined that the search was valid because one
of the officers involved in executing the warrant was also the affiant on the
application for the warrant, the search was confined to the areas that the
officer described, and the officer “conducted a pre search briefing session for
those officers who participated in the search and provided them a description
of the premises to be searched.” Id. at 1493. Specifically, that court held “that
when one of the executing officers is the affiant who describes the property to
the judge, and the judge finds probable cause to search the property as
described by the affiant, and the search is confined to the areas which the
affiant described, then the search, in this case, is in compliance with the fourth
amendment.” Id. at 1499. We have previously approved the practice of
referencing the affidavit supporting the warrant where “the warrant is
ambiguous, but fairly directs attention to the place actually searched.” See
United States v. Haydel, 649 F.2d 1152, 1156-57 (5th Cir. 1981). In that case,
we concluded:
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When the search warrant is read in conjunction with the affidavit,
it is clear that the target of the search was the residence of [the
defendant’s father]. There was no danger that the less-than-
perfect description on the face of the warrant allowed the officers
to conduct a random search. When the warrant is read in
circumstances’ light, the object of the search authorized was clear.
Id. at 1157.
Similarly here, the officer who executed the warrant, Agent Ploetz, was
also the agent who submitted warrant and the affidavit in support to the
magistrate judge. The affidavit, which was submitted to and signed by the
magistrate judge alongside the warrant, described Scully’s home office,
explained that Scully did work for Gourmet there, and that the agents were
looking for business records contained in the home office. The judge found
probable cause to search the property as described by Agent Ploetz, and the
search was confined to the areas described by him. See Gahagan, 865 F.2d at
1493-94, 1499 (affiant described property to the magistrate judge, judge found
probable cause to search property as described by the affiant, affiant was one
of the executing officers, and search was confined to the areas the affiant
described).
Prior to executing the warrant, Agent Ploetz met with the other
executing agents to make sure they knew what to search, and he testified that
“we were clear that we were going to be searching the main house and the
additional structures on the property,” except for the “rented” structure, which
Ploetz instructed not to search. See Gahagan, 865 F.2d at 1493 (affiant
“conducted a pre search briefing session for those officers who participated in
the search and provided them a description of the premises to be searched”);
Haydel, 649 F.2d at 1157 (“testimony concerning how the search was made
demonstrates that the officers knew” what place was intended to be searched).
It is “clear that the executing officers were in a position to be aided by [the
affidavit]” because Agent Ploetz, as the affiant, knew what the affidavit
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contained and was instructing agents while executing the warrant. See
Gahagan, 865 F.2d at 1497 (quoting 2 W. LAFAVE, SEARCH AND SEIZURE
§ 4.5(a), at 209 (2d ed. 1987)). 5 Because Agent Ploetz was both the affiant and
executing officer, and because he instructed the other officers on what places
to search, “[t]here was no danger that the less-than-perfect description on the
face of the warrant allowed the officers to conduct a random search.” Haydel,
649 F.2d at 1157; see also Prout, 526 F.2d at 388 (though separate apartment
was searched, given premises layout and surveillance officers’ observations,
“there was little likelihood that the wrong premises would be searched—as
indeed they were not” (quoting United States v. Darensbourg, 520 F.2d 985,
988 (5th Cir. 1975)). “When the warrant is read in circumstances’ light, the
object of the search authorized was clear,” Haydel, 649 F.2d at 1157, and
therefore the officers acted in objectively reasonable good faith in believing that
the warrant in this case authorized a search of the home office.
We therefore conclude that the district court did not err in denying
Scully’s motion to suppress the evidence found in his home office.
5 Regarding looking to the affidavit in support of the warrant and considering the
knowledge of the executing officer when executing a warrant, LaFave notes that if the
description in the warrant is inaccurate, “it is appropriate to look to the description appearing
in the warrant application or affidavit . . . where . . . the affiant was also the executing officer.”
2 SEARCH & SEIZURE § 4.5(a) (5th ed.).
The basic point is that there should be greater reluctance to take into account
other knowledge of the executing officer when the description is facially
deficient than when . . . the description is facially sufficient but partially
erroneous when compared to the actual description of the premises searched.
This is because in the former situation there is greater reason to question
whether the information supplied the magistrate in the first instance shows
that the investigation has in fact focused upon particular premises.
Id. Given the information that Agent Ploetz supplied to the magistrate judge concerning the
nature of the charges, what the agents believed Scully kept in his home office, and the object
of the search, it is clear that the “information supplied to the magistrate judge in the first
instance shows that the investigation . . . in fact focused on” the home office. Id.
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III. Due Process
In his second point of error, Scully argues that the Government filing the
second superseding indictment, which omitted any claim that the Thai
companies were shell corporations, violated due process because it was filed
after the depositions in Thailand had occurred, thus giving the Government a
preview of Scully’s defense and an opportunity to undermine it. The district
court rejected this argument, finding that the Government did not operate in
bad faith and that Scully was not prejudiced, and therefore denied Scully’s
motion to strike on this basis. We review “de novo a district court’s denial of a
motion to dismiss the indictment, including any underlying constitutional
claims,” and review the district court’s underlying factual findings for clear
error. United States v. Cordova-Soto, 804 F.3d 714, 718 (5th Cir. 2015).
To show that a pre-indictment delay violated the due process clause, a
defendant must establish: (1) that “the Government intended to delay
obtaining an indictment for the purpose of gaining some tactical advantage
over the accused . . . or for some other bad faith purpose,” and (2) “that the
improper delay caused actual, substantial prejudice to his defense.” United
States v. Seale, 600 F.3d 473, 479 (5th Cir. 2010). Scully fails on both prongs.
First, he has not demonstrated that the district court clearly erred in
finding that the Government did not act in bad faith. See United States v.
Avants, 367 F.3d 433, 442 (5th Cir. 2004) (reviewing for clear error the district
court’s finding on the Government’s intent). Scully argues that bad faith is
demonstrated by the fact that the Government altered the indictment when
the deposition testimony revealed that the Thai corporations were shell
corporations, and the Government should have been more diligent and
uncovered this information sooner. These actions do not demonstrate bad faith
because, as the Government points out, a prosecutor has an obligation to
decline to seek an indictment for an allegation he does not believe he can prove
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beyond a reasonable doubt, and any failure on the part of the Government to
uncover the information and revise the indictment sooner must be
characterized as negligent at worst, not deliberate. See Seale, 600 F.3d at 480
(explaining that first prong is not satisfied if delay “was investigative rather
than tactical”).
Second, Scully fails to demonstrate that the district court clearly erred
in finding that the delay did not cause his defense actual, substantial prejudice.
The district court explained that, based on its review of the two indictments
the Government “refined its charges against the defendant by—for all intents
and purposes, cutting back not expanding.” It also found that Scully was not
prejudiced because he had “ample” time to refine his defense accordingly and
take additional depositions in Thailand. Scully argues that the additional
depositions hurt his defense because they exposed contradictions in the
witnesses’ testimony and the jury saw Scully’s counsel spend time on issues
that were no longer relevant. As the Government correctly points out,
however, it was Scully, not the Government, that requested that the
depositions be played in full rather than merely excerpted.
Therefore, the second superseding indictment did not violate Scully’s due
process rights and the district court did not err in refusing to strike it.
IV. Right to a Speedy Trial
Third, Scully argues that the district court violated his Sixth
Amendment right to a speedy trial. In determining whether a defendant’s
Sixth Amendment right to a speedy trial was violated, we evaluate the four
factors set out in Barker v. Wingo, 407 U.S. 514 (1972): “(1) length of the delay,
(2) the reason for it, (3) the defendant’s diligence in asserting his Sixth
Amendment right, and (4) prejudice to the defendant resulting from the delay.”
United States v. Parker, 505 F.3d 323, 328 (5th Cir. 2007) (alteration omitted)
(quoting United States v. Hernandez, 457 F.3d 416, 420 (5th Cir. 2006). We
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review the district court’s weighing of the factors de novo and its underlying
factual findings for clear error. United States v. Bishop, 629 F.3d 462, 466 (5th
Cir. 2010).
The first factor “is a ‘triggering mechanism’ for determining whether the
court is required to balance the remaining three Barker factors.” United States
v. Serna-Villarreal, 352 F.3d 225, 230 (5th Cir. 2003). The district court found
that “the delay of three years between the first superseding indictment and the
second superseding indictment is sufficient for the Court to engage in a full
analysis of the Barker factors.” We agree.
Regarding the reason for the delay, “delays caused by defense counsel
are properly attributed to the defendant.” Vermont v. Brillon, 556 U.S. 81, 94
(2009). Here, the majority of the five-year, three-month delay 6 between the
original indictment and trial was attributable to Scully, who requested three
years’ worth of continuances for various reasons, including allowing his
counsel to prepare for trial, to accommodate his teaching schedule and other
cases, to resolve civil litigation related to the charges in the indictment, to take
depositions in Thailand, and in light of Kevin’s death.
At most, then, one year and nine months of delay is attributable to the
Government. “[W]hen evaluating delay-length, courts must consider the
complexity of, and facts for, each case.” United States v. Frye, 372 F.3d 729,
737 (5th Cir. 2004). Some delay is tolerable in a complex fraud and conspiracy
case that required foreign depositions and wherein one of the defendants died
before trial. See Barker, 407 U.S. at 531 (“[T]he delay that can be tolerated for
an ordinary street crime is considerably less than for a serious, complex
6 While delays of five years or more may give rise to a presumption of prejudice and
relieve the defendant of satisfying Barker’s fourth prong, see Bishop, 629 F.3d at 466, Scully
does not brief this argument and has therefore waived it, see United States v. Ogle, 415 F.3d
382, 383 (5th Cir. 2005).
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conspiracy charge.”). “[D]ifferent weights should be assigned to different
reasons.” Id. While “[a] deliberate attempt to delay the trial in order to
hamper the defense should be weighted heavily against the government,” “[a]
more neutral reason such as negligence or overcrowded courts should be
weighted less heavily but nevertheless should be considered since the ultimate
responsibility for such circumstances must rest with the government rather
than with the defendant.” Id.
The district court concluded that the Government did not act in bad faith
and its actions in failing to do various things sooner—including interview
witnesses in Thailand, conduct a full review of Scully’s computer, and seek a
warrant for Scully’s email account—did not amount to negligence. Scully’s
arguments to the contrary notwithstanding, we find no clear error in the
district court’s finding. Doggett v. United States, 505 U.S. 647, 652 (1992)
(explaining that district court’s finding that delay was not the result of
Government negligence is entitled to “considerable deference”).
Considering the third factor, the district court found that Scully did not
diligently assert his Sixth Amendment rights because, though he “immediately
assert[ed] his rights following the second superseding indictment, . . . this case
has been put on hold numerous times at his request.” We agree with the
district court that “it is clear that much of the overall delay was due to
Defendant’s requests.”
Finally, the district court found that Scully was not prejudiced by the
delay. It explained that “[b]ecause this case has been progressing towards
trial, albeit slowly, there is little danger of [Scully’s] defense being impaired by
loss of memory or exculpatory evidence.” Scully “bears the burden of
establishing actual prejudice and demonstrating that such prejudice is
sufficient to outweigh the other three factors.” Bishop, 629 F.3d at 465
(quoting United States v. Frye, 489 F.3d 201, 209 (5th Cir. 2007)). He has failed
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to meet this burden. Scully reiterates the argument he made in the district
court that the delay prejudiced him because the second superseding indictment
gave the Government a preview of his defense, therefore allowing the
Government to undermine his defense and alter its theory of the case. He also
complains that the Government secured a search warrant for his email based
on the first round of depositions in Thailand.
The district court did not clearly err in finding that the second
superseding indictment did not prejudice Scully, and Scully has not pointed to
any specific error in the district court’s findings, instead repeating the
arguments he presented in the district court asserting broadly that the court
erred in rejecting them. See Macklin v. City of New Orleans, 293 F.3d 237, 241
(5th Cir. 2002) (declining to address defendant’s argument where “[r]ather
than attacking the district court’s reasoning . . . , [the defendant] has chosen
to merely conclusorily state that the district court erred”). “The Government’s
continuing preparation during [a] delay”—securing a search warrant for
Scully’s email based on potential fabrication of business records uncovered
after the second round of depositions—“does not constitute prejudice.” Frye,
372 F.3d at 741. As for Scully’s claim that the second superseding indictment
“made it appear that counsel spent inordinate time on issues without basis in
the indictment,” as the Government points out, Scully’s counsel insisted that
the depositions be played in their entirety and in fact pointed out to the jury
that the Government changed course from its initial theory that the companies
were shell companies. Having weighed the four Barker factors, we conclude
that Scully’s Sixth Amendment right to a speedy trial was not violated.
V. Sufficiency of the Evidence
Fourth, Scully argues that there is insufficient evidence to support his
convictions for wire fraud and conspiracy to commit wire fraud because the
Government did not prove he engaged in a scheme to defraud and that he
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lacked the requisite intent. We review the sufficiency of the evidence de novo,
but our review is “highly deferential to the verdict.” United States v. Carbins,
882 F.3d 557, 563 (5th Cir. 2018) (quoting United States v. Chapman, 851 F.3d
363, 376 (5th Cir. 2017)). We must “determine whether, viewing all the
evidence in the light most favorable to the verdict, a rational jury could have
found that the evidence established the elements of the offense beyond a
reasonable doubt.” Id. (quoting United States v. Mahmood, 820 F.3d 177, 187
(5th Cir. 2016)). We “draw all reasonable inferences and make all credibility
determinations in favor of the verdict.” Id. (quoting Mahmood, 820 F.3d at
187).
To prove wire fraud, the Government must establish both a scheme to
defraud and a specific intent to defraud. United States v. Spalding, 894 F.3d
173, 181 (5th Cir. 2018). Conspiracy to commit wire fraud likewise requires
that the defendant joined the conspiracy with the “specific intent to defraud.”
United States v. Brooks, 681 F.3d 678, 700 (5th Cir. 2012).
To establish that Scully engaged in a scheme to defraud, the Government
must prove that he “made some kind of a false or fraudulent material
misrepresentation.” Spalding, 894 F.3d at 181 (quoting United States v.
Harris, 821 F.3d 589, 598 (5th Cir. 2016). Misleading omissions qualify as
false representations. See Pasquantino v. United States, 544 U.S. 349, 357
(2005). As for intent to defraud, this element is satisfied “when [a defendant]
acts knowingly with the specific intent to deceive for the purpose of causing
pecuniary loss to another or bringing about some financial gain to himself.”
United States v. Evans, 892 F.3d 692, 712 (5th Cir. 2018) (quoting United
States v. Umawa Oke Imo, 739 F.3d 226, 236 (5th Cir. 2014)). A jury can infer
intent from the facts and circumstances. United States v. Rivera, 295 F.3d 461,
466-67 (5th Cir. 2002).
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Viewing the evidence and drawing all reasonable inferences in the light
most favorable to the verdict, we conclude that the evidence was sufficient to
support Scully’s convictions for conspiracy to commit wire fraud and three
substantive counts of wire fraud.
First, a reasonable jury could conclude that Scully engaged in a scheme
to defraud. Sliz testified that he was unaware that Scully and Kevin were
receiving distributions from the suppliers, that Scully never discussed his
sister-in-law’s control over Groupwell, N&D, and Siam Star, and that Scully
denied knowing who owned those companies, while other evidence suggested
he in fact knew it was his sister-in-law. Sliz testified that it was important for
him to know whether Gourmet was overpaying for shrimp and whether the
money was “disappear[ing],” because that money belonged to the company.
Scully argues that he was only trying to save Gourmet and that Nataporn’s
companies provided a great benefit to Gourmet. Even assuming those
explanations somehow refute the evidence of the commissions Scully received,
a jury was entitled to reject those explanations and instead credit Sliz’s
testimony. See Spalding, 894 F.3d at 181; see United States v. Little, 889 F.2d
1367, 1368 (5th Cir. 1989) (explaining that an “entity suffers a property loss
when a contractor gives a kickback from his own money, even when he was the
low bidder, because the contractor was willing to sell his product . . . for the
stated price less the kickback amount”).
Second, a jury could reasonably infer Scully’s intent to defraud from the
facts and circumstances. See Rivera, 295 F.3d at 469. Viewing the evidence
most favorably to the verdict, Scully was receiving commissions from
Nataporn’s companies, thus bringing about financial gain, and acted
knowingly and with specific intent to deceive because he concealed the
commissions from Sliz and lied to about knowing who owned Nataporn’s
companies. A jury was entitled to reject Scully’s argument that his only intent
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was to save Gourmet and accept the other evidence—including Sliz’s testimony
and the spreadsheets and correspondence describing the commissions—that
showed Scully’s commission and his hiding it from Sliz.
Accordingly, there was sufficient evidence to convict Scully of wire fraud
and conspiracy to commit wire fraud.
VI. Substantive Reasonableness of Scully’s Sentence
Fifth, Scully argues his below-guidelines 180-month sentence is greater
than necessary to satisfy the 28 U.S.C. § 3553(a) purposes and is therefore
substantively unreasonable because the sentence overstates the seriousness of
Scully’s offenses, is not necessary to protect the public, and does not promote
respect for the law. “A sentence below the Guidelines range is presumptively
reasonable.” United States v. Broussard, 882 F.3d 104, 113 (5th Cir. 2018). To
rebut that presumption, a defendant must show that the sentence “(1) does not
account for a factor that should have received significant weight, (2) gives
significant weight to an irrelevant or improper factor, or (3) represents a clear
error of judgment in balancing the sentencing factors.” United States v.
Simpson, 796 F.3d 548, 558 (5th Cir. 2015) (quoting United States v. Warren,
720 F.3d 321, 332 (5th Cir. 2013)). Scully does not contend that the district
court failed to account for a factor, nor does he identify any irrelevant or
improper factor to which the district court gave significant weight. He simply
argues that the district court should have weighed the factors differently. We
have “consistently declined to merely reweigh the sentencing factors,” United
States v. Ayelotan, 917 F.3d 394, 409 (5th Cir. 2019), and we decline to do so
today. 7
7 As his sixth and final point of error, Scully argues that the district court’s ordering
him to pay more than $1 million in restitution violates the Sixth Amendment because the
court, not the jury, made the factual findings to support the restitution. Scully recognizes
that this argument is foreclosed by our precedent, see United States v. Rosbottom, 763 F.3d
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***
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
408, 420 (5th Cir. 2014), and “raises the issue of the rule’s applicability to preserve it for
possible review by the Supreme Court.”
25