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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-14400
________________________
D.C. Docket No. 1:13-cr-00012-WLS-TQL-2
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
STEWART PARNELL,
MICHAEL PARNELL,
MARY WILKERSON,
Defendants-Appellants.
________________________
Appeals from the United States District Court
for the Middle District of Georgia
_________________________
(January 23, 2018)
Before TJOFLAT, MARTIN, and ANDERSON, Circuit Judges.
PER CURIAM:
We have had the benefit of oral argument and carefully reviewed the parties’
briefs and the record. For the reasons discussed below, we conclude that the
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judgment of the district court should be affirmed. Because this opinion applies only
established law to these facts, it is written only for the benefit of the parties, who
are familiar with the extensive facts of this case. Thus, we include only a brief
summary of the facts below.
I. BACKGROUND
Defendant-Appellant Stewart Parnell is the former president of the Peanut
Corporation of America (“PCA”). Defendant-Appellant Michael Parnell, Stewart’s
brother, managed PCA’s sale of peanut paste to the Kellogg Company
(“Kellogg’s”). Defendant-Appellant Mary Wilkerson worked as PCA’s quality
assurance (“QA”) director at its production plant in Blakely, Georgia from June
2008 through 2009. Until 2009, PCA made and sold peanut products to food
producers across the United States. In 2009, federal authorities identified PCA’s
production plant in Blakely, Georgia as the source of a nationwide salmonella
outbreak. The Food and Drug Administration (“FDA”) initiated an inspection of
PCA’s Blakely facility. Following a four year investigation, Appellants were
indicted for their conduct regarding food safety at PCA and during the FDA’s
investigation.
During a seven-week jury trial, the Government presented evidence that
Stewart and Michael conspired with senior management at PCA to defraud its
customers regarding the safety of its products. Generally, to ensure that products
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are safe for human consumption, peanut manufacturers like PCA send samples
from a specific lot of product for microbiological testing before the lot is shipped.
Many PCA customers required PCA to attach a Certificate of Analysis (“COA”) to
each lot of product, certifying that the lot tested negative for bacteria. At Stewart’s
direction, PCA retested product that tested positive for salmonella until it obtained
a negative result, shipped product before receiving the test results for the product,
and even shipped product after receiving confirmed positive test results.
The Government also presented evidence regarding a scheme that Stewart,
Michael, and other senior management designed to help PCA meet production
demands for the Kellogg’s account. Specifically, in September 2007, PCA began
assigning future lot numbers to samples of peanut paste that it sent for testing. It
used those test results to create COAs for new lots of peanut paste that it shipped to
Kellogg’s. Thus beginning in September 2007, the COAs for Kellogg’s orders
contained test results for a sample pulled from a previous lot. The lot being shipped
had not been tested. PCA took samples from the new lot, assigned future lot
numbers to those samples, and sent them for testing to keep the practice going.
PCA did not inform Kellogg’s if test results for a lot that had already been shipped
came back positive. Eventually, PCA assigned multiple future lot numbers to
product from the same lot in order to decrease the number of lots that it tested.
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Between January 2008 and January 2009, more than 60% of paste lots for
Kellogg’s did not undergo any microbiological testing.
All Appellants knew that PCA had received positive salmonella test results
before the salmonella outbreak. But they were not forthcoming with the FDA
during its investigation. FDA Agent Janet Gray testified that she asked Stewart “if
he had any knowledge of other positives in 2008 [other than the four positive test
results of which Agent Gray was already aware], and he said this is not something
that happens very often and I think I would remember something positive. He said
he had no knowledge of any others, but if there was positive results [sic] then
certainly somebody at the plant would have knowledge of this.” [Doc. 559 at 141.]
Agent Gray testified that when she interviewed Wilkerson, she asked Wilkerson,
“if there were any other positives in 2008, and she told me she was not working in
QA beginning of the year and she was not aware of any positives.” [Doc. 559 at
142.]
The jury found Stewart and Michael guilty of several counts of fraudulently
introducing misbranded food into interstate commerce, interstate shipment and
wire fraud, and conspiring to commit these offenses. The jury also found Stewart
guilty of fraudulently introducing adulterated food into interstate commerce. The
jury found Stewart and Wilkerson guilty of obstruction of justice. The district court
sentenced Stewart to 336 months in prison, to be followed by three years of
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supervised release; sentenced Michael to 240 months in prison, to be followed by
three years of supervised release; and sentenced Wilkerson to 60 months in prison,
to be followed by two years of supervised release. Appellants challenge their
convictions and sentences. We address the multitude of issues raised by Appellants
in turn below.
II. DISCUSSION
A. All Appellants’ Argument Based on Juror Exposure to Extrinsic
Evidence
Prior to trial, Appellants moved to exclude evidence that the salmonella
outbreak caused nine deaths and over seven hundred illnesses under Federal Rule
of Evidence 403. At a hearing on the motion, the Government agreed not to present
evidence of deaths, and the district court denied Appellants’ motion with regards to
evidence of illnesses. The jury heard evidence that the salmonella outbreak caused
at least 700 illnesses at trial. The Government did not present any evidence that the
salmonella outbreak caused deaths. After trial, Appellants filed a motion for new
trial, claiming that the jury was exposed to extrinsic evidence about deaths.
Appellants attached an affidavit from Juror 34, in which Juror 34 said that “several
jurors mentioned that they had done their own research into the facts of this
matter,” the jury had discussed that the salmonella outbreak had caused nine
deaths, and Juror 35 told Juror 34 during jury selection that she believed all of the
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defendants were guilty because they had caused nine deaths. [Doc. 308-1 ¶¶ 3–4,
14.]
The district court held two hearings regarding the allegations of juror
exposure to extrinsic evidence. During the first hearing, the court questioned
Juror 34. Juror 34 testified that she encountered Wilkerson shortly after the trial at
Wilkerson’s daughter’s cross country meet. Juror 34 approached Wilkerson to tell
her that she had “done as much as I could for her, you know, praying for her in the
trial, and I just felt like that it was prejudged and I didn’t know what to do.” [Doc.
591 at 22–23.] Juror 34 admitted being “emotional” and “kind of upset” when she
spoke to Wilkerson. Following this incident, Stewart’s co-counsel contacted
Juror 34 and obtained her affidavit. The district court questioned Juror 34 at length
about the affidavit. Juror 34 reiterated that certain jurors made comments that all
Appellants were guilty and that they had killed nine people.
The district court questioned the remaining jurors, including the six
alternates, at a second sealed proceeding. Juror 35 denied expressing an opinion
about the case or about the guilt or innocence of a defendant to any prospective
juror, stating “[t]his is a case I did not know anything about.” [Doc. 592 at 22.]
Regarding Juror 34’s statement that Juror 35 had said during jury selection that the
defendants were guilty and that they caused nine deaths, Juror 35 replied, “I didn’t
know how many deaths was caused. No. I didn’t tell 34 that.” [Doc. 592 at 11–12.]
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Out of the remaining jurors and alternates, four reported hearing comments about
deaths during trial—Juror 37 and Juror 10 reported hearing about deaths before
deliberations, and Juror 4 and Juror 12 said that deaths were mentioned at some
point during the period of time the jury deliberating.
Appellants argue that they are entitled to a new trial based on the jury’s
alleged exposure to extrinsic evidence that people died as a result of the salmonella
outbreak. The Court reviews the denial of a motion for a new trial based on the
submission of extrinsic evidence to the jury for an abuse of discretion. United
States v. Whatley,
719 F.3d 1206, 1214 (11th Cir. 2013). The Court reviews the
district court’s underlying factual findings for clear error. United States v.
Siegelman,
640 F.3d 1159, 1181 n.31 (11th Cir. 2011) (per curiam).
“When jurors consider extrinsic evidence, a new trial is required if the
evidence poses a reasonable possibility of prejudice to the defendant.” Whatley,
719 F.3d at 1219 (quoting United States v. Dortch,
696 F.3d 1104, 1110 (11th Cir.
2012)). “A defendant who alleges denial of the right to an impartial jury resulting
from juror exposure to extraneous information has the burden of making a
colorable showing that the exposure has, in fact, occurred.”
Id. (quoting Dortch,
696 F.3d at 1110). “If the defendant does so, prejudice to the defendant is
presumed and the burden shifts to the government to show that the jurors’
consideration of extrinsic evidence was harmless to the defendant.” Id. (quoting
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Dortch, 696 F.3d at 1110). The Government must show that the exposure was
harmless beyond a reasonable doubt. 1 To determine whether the district court
abused its discretion by concluding that exposure to extrinsic evidence was
harmless, the Court considers four factors: (1) the nature of the extrinsic evidence;
(2) the manner in which the extrinsic evidence reached the jury; (3) the factual
findings in the district court and the manner of the court’s inquiry into the juror
issues; and (4) the strength of the government’s case against the defendant.
Whatley, 719 F.3d at 1219.
Although the district court ruled that Appellants failed to demonstrate that
the jury was exposed to the fact that there had been several deaths resulting from
the salmonella outbreak, we recognize that several jurors testified that they were
aware that the salmonella outbreak caused deaths. In light of the fact that there was
no evidence of deaths presented during trial, we assume arguendo that at least
several of the jurors who sat on the case were exposed to extrinsic evidence.
Therefore, our discussion proceeds directly to the prejudice issue.
With regards to the first factor—the nature of the extrinsic evidence—we
cannot conclude that jurors’ exposure to extrinsic evidence that the salmonella
1
“There is little, if any, difference between our statement in Fahy v. State of
Connecticut about ‘whether there is a reasonable possibility that the evidence complained of
might have contributed to the conviction’ and requiring the beneficiary of a constitutional error
to prove beyond a reasonable doubt that the error complained of did not contribute to the verdict
obtained.” Chapman v. California,
386 U.S. 18, 24,
87 S. Ct. 824, 828 (1967) (quoting Fahy v.
Connecticut,
375 U.S. 85, 86–87,
84 S. Ct. 229, 230 (1963)).
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outbreak caused deaths is not prejudicial at all. However during trial, the jury heard
evidence regarding the exceedingly serious nature of the salmonella outbreak. For
example, a doctor from the Center for Disease Control (“CDC”) testified that the
outbreak caused 714 known illnesses, 166 of which required hospitalization.
Based on the number of reported illnesses, the doctor estimated that there were
over 20,000 illnesses across the United States. The jury also heard evidence
regarding the symptoms associated with salmonella, such as fever, bloody diarrhea,
and vomiting, from the CDC doctor and a salmonella victim. Finally, the
indictment itself, which the trial court read to the jury, indicated that salmonella
can be life threatening. In light of all of this evidence, we cannot conclude that the
exposure of several jurors to the fact that several people also died from the
outbreak was highly prejudicial.
Regarding the manner in which the extrinsic evidence reached the jury, the
jurors’ testimony indicates that their knowledge of deaths came from overhearing
pieces of news reports, faint memories about the incident, or passing comments
from family members, fellow jurors, or venire members, not detailed news reports
about the salmonella outbreak. None of the jurors who recalled hearing about
deaths during trial or deliberations were able to remember details about the
statements. The jurors’ vague recall of these statements indicates their lack of
impact on the jurors. Furthermore, no juror indicated that any comment about
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deaths led to a discussion among the jurors. In fact, the majority of the jurors did
not report being exposed to extrinsic evidence at all. Given the jury’s limited
exposure, this factor weighs strongly in favor of the government, meaning it
strongly indicates that the exposure of several jurors to the fact that deaths had
occurred did not affect or contribute to the jury verdict.
Given the thoroughness of the district court’s investigation, the third factor,
the manner of the district court’s inquiry into the juror issues and the findings of
the district court, also strongly favors the Government. The district court conducted
two hearings in which it questioned the jurors outside of the presence of other
jurors. After observing each juror’s demeanor during a seven-week trial and their
post-trial testimony, the district court concluded that Juror 34 was biased in favor
of Wilkerson and refused to consider her testimony. Given the district court’s
ability to observe Juror 34’s demeanor and the fact that Juror 34 approached
Wilkerson after trial to express her sympathy, the district court did not clearly err
by finding that Juror 34 was not credible. 2
The final factor—the strength of the evidence—also strongly favors the
Government. With respect to both Stewart and Michael, the evidence of guilt was
overwhelming. As for evidence that Wilkerson was guilty of obstruction, the
2
The Court recognizes that the district court did not acknowledge that some of the
testimony of the other jurors provided minor corroboration for Juror 34. But we cannot conclude
that the district court’s credibility determination regarding Juror 34 is clearly erroneous for the
reasons stated above.
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Government offered the testimony of Agent Gray. Agent Gray stated, “I asked Ms.
Mary Wilkerson if she knew any—if there were any other positives in 2008, and
she told me she was not working in QA beginning of the year and she was not
aware of any positives.” [Doc. 559 at 142.] The Government also introduced two
emails indicating that Wilkerson knew about positive salmonella results at PCA in
2008. Specifically, in June 2008, Wilkerson wrote an email instructing other PCA
employees to put a shipment on hold because the lot had tested presumptively
positive for salmonella. Later that month, Wilkerson wrote the following in an
email to the manager of a different PCA facility: “I know you don’t know this but
we have a problem with the granulation line and salmonella at least every other
week if not every week, but when retested by a different lab it comes back ok.”
[Gov’t Ex. 40-01.] Thus, the evidence that Wilkerson did know of positive
salmonella results in 2008 was overwhelming. And while the obstruction of justice
charge against Wilkerson was based on a single question and answer to Agent
Gray during the investigation, the evidence is very clear that defendant Wilkerson
lied to Agent Gray about not having knowledge of positive test results.3
3
Wilkerson’s counsel attempted to portray to the jury that Agent Gray’s question
related only to January 2008. The problem with Wilkerson’s argument is that there is no
evidence at all to support her attorney’s speculation that Agent Gray’s question focused only on
January 2008, rather than that entire year. Wilkerson’s argument that Agent Gray asked Stewart,
PCA operating manager Samuel Lightsey, and Wilkerson the same question is not to the
contrary. According to an email that Agent Gray sent shortly after the investigation, she asked
Lightsey about positives “going back to January of 2008.” [Doc. 446-16.]
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Given that three of the four factors weigh strongly in favor of the
Government, consideration of the four factors indicates clearly that the extrinsic
evidence did not influence or contribute to the jury verdict.
B. All Appellants’ Argument Based on Kilgore’s and Lightsey’s Lay
Opinion Testimony
Appellants argue that the district court plainly erred by allowing PCA-
Blakely’s former operating managers, Samuel Lightsey and Daniel Kilgore, to
testify that certain PCA business records, such as COAs, were “false” and that
PCA could not have known that the product it shipped was safe based on the
documents. Appellants concede that they failed to object to this evidence at trial.
As the former operating managers of PCA-Blakely, Kilgore and Lightsey had
extensive experience with the plant’s testing practices. Both were also intimately
familiar with PCA’s fraudulent practices with regards to Kellogg’s. Thus, they had
ample knowledge from which to conclude that the COAs that they testified were
false were in fact false and that PCA could not have known that the product
shipped with the false COAs was safe. There is no error and certainly no plain
error in admitting this testimony.
C. Wilkerson’s Challenge to the Sufficiency of the Evidence
The evidence discussed above makes clear that there was ample evidence to
support the verdict of Wilkerson’s guilt.
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D. Brady Issues Raised by Wilkerson 4
Wilkerson argues that the Government violated Brady because she could not
access or search the documents produced by the Government and therefore could
not find Brady material. Wilkerson also objects to the number of documents that
the Government produced and the late date of some of the productions.
Specifically, Wilkerson objects to the Government producing a large hard drive of
documents in late June 2014 when the trial was set to begin on July 14. According
to Wilkerson, this production was one of many untimely data dumps, where the
Government produced hard drives containing hundreds of thousands of documents
that Wilkerson and her counsel did not have the resources to review for Brady
material before trial.
Although Wilkerson argues on appeal that the documents were not
searchable, the district court made a finding of fact at a July 11, 2014 hearing that
the documents produced by the Government were in fact searchable. Wilkerson
never clearly argued to the district court that the documents were not searchable.
Rather, Wilkerson’s counsel indicated that he was able to search the documents
after receiving the necessary software in October 2013. Additionally, the
Government provided a Bates index for the documents no later than December
2013, over seven months before trial. And the district court found no evidence of
4
This section discusses Wilkerson’s Brady and discovery issues.
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prosecutorial misconduct. Finally, an IT consultant and paralegal helped Wilkerson
and her counsel search and review the documents. Given that Wilkerson was able
to search the documents, they were not suppressed for purposes of Brady.
Furthermore, Wilkerson has failed to identify, either to the district court
during trial or even on appeal after having extensive additional time to search the
documents, any materially exculpatory evidence within the Government’s
productions. Wilkerson claims on appeal that the following documents are
exculpatory: (1) a February 1, 2009 email between Agent Gray and FDA Agent
Richard Hartline discussing edits to Agent Gray’s report of her investigation at
PCA Blakely; (2) a March 15, 2009 email between Agent Gray and FDA Agent
Robert Neligan regarding Agent Neligan editing Agent Gray’s report about PCA-
Blakely; (3) a February 3, 2009 email from Agent Gray to Erika Anderson
regarding the timeline of when Agent Gray learned of the positive salmonella test
results at PCA-Blakely; (4) the written report of Wilkerson’s September 16, 2009
interview with Agent Hartline; and (5) a copy of Agent Gray’s handwritten notes.
The three emails that Wilkerson cites show that Agent Gray consulted with
other agents and departments regarding her report of the PCA-Blakely facility. The
other agents suggested stylistic edits. Nothing in any of the emails suggests that
Agent Gray or any other federal officer altered or fabricated the substantive facts in
Agent Gray’s report. Additionally, Stewart’s counsel cross-examined Agent Gray
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about one of these emails and the editing of her report at trial. Wilkerson fails to
explain how her counsel’s additional ability to cross-examine Agent Gray about
the report would have altered the outcome at trial.
The written report of Wilkerson’s statement to Agent Hartline denying that
she told Agent Gray that she did not know of any positives in 2008 is arguably
favorable to Wilkerson. But, as discussed below, Wilkerson could not have offered
Agent Hartline’s report of her statement to prove the truth of her statement at trial.
Thus, this evidence could not have altered the jury’s verdict. Finally, there is
nothing exculpatory about Agent Gray’s handwritten notes. The notes are
consistent with Agent Gray’s testimony that she asked Wilkerson if she knew of
any positives in 2008 and Wilkerson answered in the negative.
E. Wilkerson’s Severance Argument
Wilkerson’s sole argument to the district court regarding severance related
to her claim that she needed more time to review the Government’s late production
of documents. Because Wilkerson never presented to the district court any
arguments which might support mandatory severance from the other two
Appellants, we review the district court’s failure to sever Wilkerson’s trial for plain
error. Although Wilkerson was only charged with obstruction of justice, evidence
regarding the nature of the PCA conspiracy would have been admissible at a
separate trial of Wilkerson. For example, the Government could have presented
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evidence regarding PCA’s misrepresentations to customers that the product had
been tested when it had not in fact been tested and the fact that customers were not
warned when previously shipped product tested positive for salmonella. In
addition, all of the evidence regarding the seriousness of the salmonella outbreak
would have been admissible. All of this evidence would have been admissible as
evidence of Wilkerson’s motive to lie.5 Given the fact that all of this evidence
would have been admissible in a separate trial against Wilkerson, the district court
did not plainly err by failing to try Wilkerson separately.
F. Other Issues Raised by Wilkerson
There is no evidence to support Wilkerson’s conclusory arguments that
Agent Gray fabricated her report or her handwritten notes or that the Government
deleted specific documents relevant to Wilkerson from the files produced to her
counsel. Nor is there any error plain or otherwise caused by the prosecutor’s
statement that Wilkerson was an unindicted co-conspirator. The prosecutor was
responding to Wilkerson’s counsel’s objection to the prosecutor’s question to
Lightsey about an email to him from Wilkerson. The prosecutor’s assertion that
Wilkerson was an unindicted co-conspirator was not only amply supported by the
evidence before the jury, but also was an appropriate response to Wilkerson’s
counsel’s hearsay objection. In other words, it was not hearsay because it was a co-
5
It is only the volume of such evidence that perhaps could have been excluded in a
separate trial of Wilkerson under Rule 403.
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conspirator’s statement in furtherance of the conspiracy. See Fed. R. Evid.
801(d)(2)(E).
Additionally, the prosecutor correctly told Wilkerson’s counsel that there
was no transcript of her interview with federal agents. Wilkerson’s argument that
this was a lie because her counsel misunderstood the statement is frivolous. And
there was also no error in the district court’s exclusion of Wilkerson’s self-serving
statement during her interview with Agent Hartline. Although Wilkerson’s
statement during that interview was a statement by a party, it was not admissible
because it was offered by Wilkerson, not by a party opponent to Wilkerson.
Finally, Wilkerson’s argument on appeal that the district court erred in denying her
post-trial request for transcripts is meritless. Notwithstanding the district court’s
repeated instructions that Wilkerson specify what part of the transcript was
requested and the need therefore, Wilkerson’s counsel failed to do so.6
G. Sentencing Issues
1. The Parnells’ challenge to the Government’s evidence of loss as
not being sufficiently specific or reliable
The Parnells argue that the district court erred when it found Stewart
responsible for a loss of $144.5 million and Michael responsible for a loss of $45.6
6
Other arguments raised by Appellants regarding their convictions are without
merit and warrant no discussion.
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million. The Parnells argue that the evidence of loss presented by the Government
was not sufficiently specific or reliable.
The Government chose to show loss by subpoenaing the 50 companies that
purchased the most PCA products in 2008. The subpoena gave the companies the
option of providing the documents that reflected the company’s financial loss and
costs that they and their insurance carriers incurred because of the recall or of
submitting “a comprehensive summary setting forth the requested information,
provided that the Custodian is prepared to testify as to the accuracy and
completeness of each such statement.” The subpoena also stated that the
Government reserved the right to require the production of the documents
underlying the spreadsheet and the provided statement of the document custodian
warned that the submission of false or fraudulent information could lead to
prosecution. An FBI agent then created a spreadsheet that compiled all of the
information, and the Government introduced both the spreadsheet and the
underlying documents at trial. In cross examination of the agent, the Defendants
elicited the fact that she did not conduct an audit of the various submissions
(although she did call a number of the victims), and the Defendants pointed out
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that the agent did not understand some of the terminology used in some of the
summaries submitted. 7
The Government bears the burden of producing evidence that proves the loss
by a preponderance of the evidence, which must be reliable and specific. United
States v. Cobb,
842 F.3d 1213, 1219 (11th Cir. 2016). Actual loss is defined as
“reasonably foreseeable pecuniary harm that resulted from the offense.” U.S.S.G.
§ 2B1.1, comment. n.3(A)(i)-(ii). The district court need only make a reasonable
estimate of the loss, and we will defer to that determination. Cobb, 842 F.3d at
1218-19.
Our careful review of the record leaves us confident that the district court
has not committed reversible error. We agree with the district court that the
circumstances surrounding the submissions provide considerable reliability. Each
company was warned that submission of false or fraudulent information exposed
them to potential prosecution. Although the Defendants successfully pointed to
some errors in the submissions, our careful review of the record leaves us
confident that any such errors fall far short of reducing the verifiable loss
calculation below an amount which could possibly have affected the sentence of
7
For example, the agent had intended to exclude lost sales from the loss calculation
but the Kellogg’s summary included two items representing lost sales (totaling $9.8 million).
We note that the $9.8 million in lost sales is not only a miniscule amount, as compared to the
$146 million of loss included by the agent.
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any defendant. For example, even considering only the Kellogg’s submission, the
summary chart provides evidence of well over the $20 million threshold for the 22-
level enhancement applied to Michael. That Kellogg’s chart revealed $10.4
million in the years 2008-09 of losses labeled “recalled NSV.” That clearly refers
to the net sales value of product actually recalled, which is clearly an appropriate
loss for the loss calculation. Similarly, that Kellogg’s chart reveals $10.3 million
in inventory lost because of the salmonella outbreak, which is again a clearly
appropriate loss. In addition, there were $4.1 million of “recall costs” in 2008-09,
which again are clearly appropriate for the loss calculation. And finally, “clean-up
costs” of $1 million in 2009 is also a clearly appropriate loss. That total of $25.8
million in losses easily exceeds the $20 million threshold which was the basis of
the 22-level enhancement applied to Michael.
We note that that same $25.8 million of losses to Kellogg’s are equally
applicable and equally reliable as losses for which Stewart is responsible. With
respect to Stewart, there is ample other evidence, in addition to the Kellogg’s $25.8
million loss, that is equally verifiable and equally reliable, such that there is no
possibility that a remand could produce a loss calculation which could reduce his
sentence. For example, the loss figure submitted by Abbott Labs --
$13,624,612.15 – was supported by amply extensive and reliable documentation,
and has not been questioned by Appellants either in the district court or on appeal.
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In addition, the $12,750,000 loss calculation submitted by Hartford Insurance
Company is undoubtedly reliable. The insurance proceeds from Hartford
Insurance Company were administered in the bankruptcy of PCA, and distributed
to individual victims. Appellants have not challenged the reliability of this
$12,750,000 either in the district court or on appeal. Thus, the losses suffered by
Kellogg’s, Abbott Labs, and Hartford Ins. Co. total more than $50 million, and are
not subject to any substantial criticism with respect to verifiability or reliability.
Although the district court enhanced the offense level of Stewart by 26 levels, an
enhancement of 22 levels, rather than 26 levels, would have created the same
maximum Guideline range of life imprisonment. That 22-level enhancement is
triggered by a threshold loss amount of $20 million, and, as noted above, a loss
calculation of far more than $20 million is virtually assured in the event a remand
in this case were ordered. Thus, we conclude that any remand would be futile, and
any errors in the district court’s calculation are harmless.
2. Defendant Michael’s challenge to the 3-level increase in his offense level
pursuant to Guideline section 3B1.1(b).
Section 3B1.1(b) provides a 3-level increase in the offense level “[i]f the
defendant was a manager or supervisor (but not an organizer or leader) and the
criminal activity involved five or more participants or was otherwise extensive.”
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U.S.S.G. § 3B1.1(b).8 The Guidelines commentary further instructs that “[t]o
qualify for an adjustment under this section, the defendant must have been the
organizer, leader, manager, or supervisor of one or more other participants.”
U.S.S.G. § 3B1.1 cmt. n.2.
Michael’s argument on appeal is that there is insufficient evidence that he
managed or supervised at least one participant in the conspiracy. We conclude
that his argument is wholly without merit. Lightsey’s testimony establishes that
Michael managed or supervised at least Lightsey. The evidence in the record
reveals ample evidence that the district court correctly concluded that Michael’s
conduct warranted manager status. For instance, he clearly exercised decision-
making authority when he responded to Lightsey’s urgent contact asking him about
the scheme with respect to the Kellogg’s account whereby false COAs
accompanied shipments of product to Kellogg’s. The fact that Lightsey called
Michael, rather than Stewart, about what he considered to be wrongful activity is
evidence that he considered Michael to be one who exercised control, and the fact
that he acquiesced when Michael instructed him to continue with the wrongful
8
Michael does not argue on appeal that the conspiracy involved fewer than five
participants.
22
Case: 15-14400 Date Filed: 01/23/2018 Page: 23 of 23
activity supports the district court’s finding that Lightsey was in fact managed by
defendant Michael. 9
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
9
Any other arguments raised by Appellants challenging their sentences are rejected
without discussion.
23
