United States v. Moran Shepkaru , 191 F. App'x 893 ( 2006 )


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  •                                                                            [DO NOT PUBLISH]
    IN THE UNITED STATES COURT OF APPEALS
    FILED
    FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
    ___________________________ ELEVENTH CIRCUIT
    AUG 4, 2006
    No. 05-13288                          THOMAS K. KAHN
    ___________________________                       CLERK
    D.C. Docket No. 03-20139 CR-MGC
    UNITED STATES OF AMERICA,
    Plaintiff-Appellant,
    versus
    MORAN SHEPKARU,
    a.k.a. Lorain S.
    a.k.a. Moran S.,
    Defendant-Appellee.
    ___________________________
    Appeal from the United States District Court
    for the Southern District of Florida
    ____________________________
    (August 4, 2006)
    Before ANDERSON, FAY and SILER,* Circuit Judges.
    SILER, Circuit Judge:
    *
    Honorable Eugene E. Siler, Jr., United States Circuit Judge for the Sixth Circuit, sitting by
    designation.
    The United States appeals the district court’s post-jury verdict of acquittal of
    Moran Shepkaru (a.k.a. Loraine S. or Moran S.) and the district court’s alternative
    granting of a motion for a new trial. The government contends that the district court
    erred in finding insufficient evidence to support the jury’s verdict of guilty to
    conspiracy to commit wire fraud. Because there was sufficient circumstantial
    evidence of a conspiracy to commit wire fraud, we REVERSE and VACATE the
    post-verdict judgment of acquittal. However, we AFFIRM the district court’s order
    granting a new trial.
    FACTS
    In 2003, Shepkaru and ten other defendants were indicted for: (1) conspiracy
    to commit wire fraud, in violation of 
    18 U.S.C. § 1343
    ; (2) wire fraud, in violation of
    
    18 U.S.C. §§ 1842
     and 3; (3) extortion, in violation of 
    18 U.S.C. §§ 1951
     and 2; (4)
    making a false bill of lading, in violation of 
    49 U.S.C. § 80116
     and 
    18 U.S.C. § 2
    ; and
    (5) conspiracy to commit money laundering, in violation of 
    18 U.S.C. § 1956
    (h).
    The indictment charged all defendants with having been members of a
    conspiracy that represented to the public that they were reputable, long-established
    moving companies that provided low-cost estimates to customers in order to induce
    the consumers to hire the company to move their furnishings. Shepkaru’s indictment
    2
    alleged that she communicated moving estimates to customers via telephone,
    facsimile, and e-mail.
    The indictment further alleged that several co-conspirators supervised loading
    foremen who would rush the customer through the company’s paperwork, often
    causing the unsuspecting customer to sign blank or incomplete bills of lading and
    other documents that did not inform the customer of the total price for their move.
    Once the customer’s furnishings were loaded onto the moving truck, the foremen
    would fraudulently inflate the price of the move by claiming that the customer had
    many more cubic feet of cargo than initially estimated or by overcharging the
    customer for material used for packing.
    When a customer would contact the moving company regarding delivery of
    their furnishings, the company would refuse to deliver the customer’s furnishings
    until the customer paid the inflated price for the move. United States Department of
    Transportation regulations require that all of a customer’s furnishings must be
    returned upon payment of 110 percent of the original price quote. See 
    49 C.F.R. § 375.405
    (b)(1)-(10). Nevertheless, co-conspirators ignored complaints about the
    fraudulently inflated prices and lied to customers about the delivery of their
    furnishings, sometimes using false names when speaking with customers over the
    phone or in writing.
    3
    On October 14, 2004, Shepkaru was convicted of conspiring to commit wire
    fraud, but acquitted of the remaining substantive counts, which included wire fraud.
    The district court subsequently granted her motion for acquittal and motion for a new
    trial.
    ANALYSIS
    I. Acquittal
    We review de novo a district court’s grant of acquittal under Federal Rule of
    Criminal Procedure 29(c) and give no deference to the district court’s decision.2
    United States v. Williams, 
    390 F.3d 1319
    , 1323 (11th Cir. 2004). We must determine
    whether the evidence at trial was sufficient to permit a reasonable trier of fact to find
    the defendant guilty beyond a reasonable doubt. See United States v. Allen, 
    302 F.3d 1260
    , 1262 (11th Cir. 2002) (citing Jackson v. Virginia, 
    443 U.S. 307
    , 319 (1979)).
    We view the evidence in the light most favorable to the government, accepting the
    jury’s reasonable inferences and credibility determinations. Glasser v. United States,
    
    315 U.S. 60
    , 80 (1942), superseded by rule on other grounds, Bourjaily v. United
    States, 
    483 U.S. 171
     (1987).
    2
    The United States’s appeal of a judgment of acquittal may be reviewed on appeal. United
    States v. Shelley, 
    405 F.3d 1195
    , 1200 (11th Cir. 2005).
    4
    To prove conspiracy under 
    18 U.S.C. § 371
    , the government must establish the
    existence of an agreement to achieve an unlawful objective, the defendant’s knowing
    and voluntary participation in the conspiracy, and the commission of an overt act in
    furtherance of the conspiracy. United States v. Suba, 
    132 F.3d 662
    , 672 (11th Cir.
    1998). To prove conspiracy to commit wire fraud, the government must further show
    a defendant’s intent to devise any scheme to defraud another of money or property
    and use of the wire for purposes of executing the scheme. 
    18 U.S.C. § 1343
    ;
    Pelletier v. Zweifel, 
    921 F.2d 1465
    , 1498 (11th Cir. 1991). The scheme need not be
    carried out but if the scheme had been executed, it would deceive a reasonably
    prudent person. 
    Id. at 1498-99
    .
    The existence of an agreement may be proven by circumstantial evidence,
    including “inferences from the conduct of the alleged participants or from
    circumstantial evidence of a scheme.” United States v. Silvestri, 
    409 F.3d 1311
    , 1328
    (11th Cir. 2005). The government may establish knowledge of an illegal agreement
    by showing that the defendant “knew the essential object of the conspiracy.” 
    Id.
    Moreover, in reviewing the prosecution’s case, we draw no distinction between
    circumstantial and direct evidence. United States v. Navarro-Ordas, 
    770 F.2d 959
    ,
    966 (11th Cir. 1985). “It is not necessary for the evidence to exclude every
    reasonable hypothesis of innocence or be wholly inconsistent with every conclusion
    5
    except that of guilt, provided a reasonable trier of fact could find that the evidence
    establishes guilt beyond a reasonable doubt.’” United States v. Ward, 
    197 F.3d 1076
    ,
    1079 (11th Cir. 1999) (citations omitted).
    The government asserts that the district court committed several factual and
    legal errors that included overlooking probative evidence of Shepkaru’s knowing
    participation in the scheme. Shepkaru responds that there was no evidence of an
    express agreement between her and anyone else.              She acknowledges that
    circumstantial evidence may establish the existence of a conspiratorial agreement but
    only where the inferences are reasonable. She asserts that there is no evidence
    suggesting conspiratorial meetings, proof that she received the three percent of the
    total move price, or records reflecting the employee payment schedules and amounts.
    The evidence established that Shepkaru worked at the moving company with
    constantly changing names for over two years and that she earned commissions from
    the amount collected from some moves. At a minimum, Shepkaru would have been
    aware that customers’ bills had been increased and that some fraudulent scheme was
    afoot.
    Indeed, the government may establish knowledge of an illegal agreement by
    showing that the defendant knew the essential object of the conspiracy. Shepkaru
    originated the low bids. The victims’ testimony established that Shepkaru negotiated
    6
    the original offers without receiving assistance from others. Matthew Nassbaum
    testified that his original quote from Shepkaru was escalated from $2,900 to $8,400.
    He also testified that he realized he had been duped on his original move and called
    the moving company, posing as a new customer. He stated he spoke to Shepkaru who
    provided the same quote and reiterated that he would not be charged for additional
    cubic footage unless an extra truck was required. Ben Gersh also testified that his
    initial quote from Shepkaru at $750 was increased to $5,300.
    Although coconspirator Toledano’s testimony did not unequivocally state that
    Shepkaru agreed to participate in wire fraud, some of his testimony was sufficient to
    permit a reasonable jury to conclude that Shepkaru knew of and participated in the
    scheme. He testified that Shepkaru was working with the moving company before
    he arrived and continued to work as the company constantly changed names due to
    its bad reputation. He stated that even though other employees, including himself,
    quit working for the company due to their disgust with its business practices,
    Shepkaru continued working. He stated that Shepkaru was compensated by a weekly
    salary plus a three percent commission of the total the customer paid as evidenced by
    multiple job reports. He specifically testified that the moving company changed its
    name because of its bad reputation, customer complaints, and fraud. He stated that
    Shepkaru knew of and was paid by commissions of the total amount collected from
    7
    the moves because each salesperson maintained a list of the original estimates and the
    amount collected.
    The government presented several documents in Shepkaru’s handwriting
    showing a substantial difference between the original estimate and the amount
    collected, and that 99 percent of the customers were overcharged for moves.
    Toledano testified that several of the moving estimate original bids were in
    Shepkaru’s handwriting and that he spoke with Shepkaru about “how much the
    customer actually paid for the move.” In addition, Toledano testified that the moving
    company owner, van drivers, he, and Shepkaru met in the office to discuss making
    more money. A jury could reasonably infer that such meetings concerned the
    fraudulent business practices given the nature of the business.
    Shepkaru argues that she only provided the quotes and did not increase the
    prices, thus absolving her from the conspiracy to defraud. For instance, as part of the
    FBI’s undercover move, Shepkaru competitively negotiated a lower price after the
    agent claimed that a rival mover offered a lower price. The responsive email was
    signed by Loran S., which was Shepkaru’s alias. Contrary to the district court’s
    conclusion, there is evidence to permit a jury to reasonably find that Shepkaru
    originated the low ball bids.
    8
    The evidence presented at trial shows that Shepkaru’s offers to consumers
    were inconsistent and involved misstatements. On multiple occasions, the prices
    were almost double the initial quote. For instance, Onsgard/Lenz quoted “all
    inclusive” $850 and charged $1940 for a handling fee; an $880 moving fee based on
    cubic footage was increased because it was calculated on weight contrary to the terms
    of Shepkaru’s price quote; an all-inclusive $750 offer increased to $5,300 due to
    additional labor and insurance charges, which later were discovered to be false; and
    Nassbaum’s $2,900 all-inclusive offer was increased to $8,400 by pick up costs
    despite Shepkaru’s assurances that the initial quote was the complete cost unless an
    additional van was required. Moreover, Toledano testified that he and Shepkaru
    discussed the amount that the customer paid for the move and that customers were
    being lied to. He also said that Shepkaru was the only one who stayed with the
    company. Based upon these statements, the jury could reasonably infer that she was
    placing a low ball bid to lure customers into a transaction. From Toledano’s
    testimony that Shepkaru received a commission for the amount charged each
    customer, the jury could impute knowledge of the fraud.
    A jury could reasonably infer by the follow-up calls that Shepkaru had agreed
    to participate in the conspiracy. Evidence established that Shepkaru received calls
    placed by disgruntled customers – sometimes the same customers she extended an
    9
    offer to – that she often ignored. She did not inform the customers that their
    possessions could be redeemed on payment of 110 percent of the initial estimate,
    although she was personally notified of this requirement by FBI Agent William
    Schurek. A jury could reasonably believe from Shepkaru’s conduct that she
    knowingly participated in a conspiracy to defraud those customers. The elements of
    conspiracy do not require a showing that Shepkaru received her three percent
    commission even though Toledano testified that she received commissions from
    fraudulent moves.
    The district court was legally incorrect in finding that direct evidence of a
    conspiratorial agreement is required. See Silvestri, 
    409 F.3d at 1328
    ; Williams, 
    390 F.3d at 1324
    . Moreover, the district court incorrectly ignored the jury findings
    against Shepkaru’s version of events and dismissed all reasonable circumstantial
    evidence. Williams, 
    390 F.3d at 1324
     (reversing acquittal where the district court did
    not apply the correct standard requiring resolution of facts “in favor of the
    government” and acceptance of all reasonable inferences in support of the
    government’s case); see also United States v. Miranda, 
    425 F.3d 953
    , 961-62 (11th
    Cir. 2005) (reversing post-trial judgment of acquittal).
    In conclusion, the government showed that Shepkaru was engaged in a
    systematic scheme to provide low offers to induce customers of the moving company
    10
    to use their services by use of the electronic mail and telephone. Though the
    government’s more specific theories failed for lack of evidence, the record was
    sufficient to allow a reasonable finder of fact to conclude that Shepkaru conspired to
    engage in a fraudulent scheme to defraud customers of both money and property by
    using the wires.
    II. New Trial
    A search warrant executed at Shepkaru’s work place yielded a substantial
    number of records, including bills. The documents were disclosed in pretrial
    discovery and introduced into evidence at trial. The government created a chart from
    the seized records showing each individual moving contract initial quote, the ultimate
    bill, 110 percent of the original bid, and a percentage and actual difference between
    110 percent of the initial quote and the final bill.
    The grant of a new trial is reviewed for abuse of discretion but the abuse of
    discretion standard employed in this situation is more exacting. See United States v.
    Hernandez, 
    433 F.3d 1328
    , 1335-36 (11th Cir. 2005). A district court may weigh the
    evidence and assess the credibility of witnesses, but it may not set aside the verdict
    unless allowing the verdict to stand would result in a miscarriage of justice. Butcher
    v. United States, 
    368 F.3d 1290
    , 1297 (11th Cir. 2004).
    11
    The district court found that the summary chart and the commission sheets
    were vital to the government’s proof that Shepkaru was aware of and benefitted from
    the fraud occurring at the place of employment. As such, the district court’s ruling
    that Shepkaru’s substantial rights were “affected to such a degree by the
    government’s introduction of the summary chart and underlying business records”
    and grant of a new trial were not an abuse of discretion.
    The government downplays the chart as only having the potential for misuse
    even though its information is accurate. The government does not address the fact
    that accurate information can be used to create inaccurate inferences, which was the
    case here. Providing a jury with a chart that lists 144 “victims,” without showing that
    each listed person was actually a victim, is sufficient to support the district court’s
    finding of prejudice for a new trial. Moreover, the insinuation that Shepkaru received
    a commission from the total amount billed for each of the 144 so-called “victims” –
    even though it was not the amount actually collected in each case – may likewise be
    prejudicial.
    Therefore, the judgment of acquittal is REVERSED and VACATED, and the
    district court’s granting of a new trial is AFFIRMED.
    12